A cold economical shower and a cold farewell in Vostalpine

The short warning strike by metalworkers likely came in time for Voestalpine’s half-year results. Their media presence ultimately provides a particularly prominent stage for the struggle for higher wages. The fact that morning traffic in Linz came to a standstill on Wednesday attracted more attention, at least there.

However, Austria’s largest steel company does not currently have any shiny numbers to show. The cold economic shower is much stronger than expected. Profit after tax fell to 333 million euros, from 715 million a year ago. If Austria’s Voestalpine had to pay wages about 10% higher, it would be only a trivial matter: it would cost about 200 million euros, says CEO Herbert Ebensteiner. Voestalpine could again be at risk of a “mid-double-digit million sum” per year if government electricity cost offsets are not extended beyond this year. Ebensteiner: “Our demand is that this also be available for the next few years.” Other EU countries will achieve cost parity by 2030.

Ebensteiner declines to comment on the escalating collective contract negotiations. At least in public places. He only mentioned high wage costs of €200 million when asked. The CEO tries to calm things down in the video conference. After a short warning strike, operations returned to normal again.

“In a sense, normalization”

Overall, the council is trying to paint a picture of normalcy. And with 2022’s record-breaking numbers, the bar was set unattainably high from the start. “We are seeing a sense of normalization,” said outgoing CFO Robert Ottel. Voestalpine generated sales of €8.5 billion in the first half of the year, 8.4 percent lower than in the second half of 2022. Things are still going well for the group in the rail infrastructure, aviation and energy sectors. In the automotive sector, business is better thanks to relaxation in supply chains. However, the construction crisis, the poor situation, especially in German mechanical engineering, and weak demand for consumer goods, had a greater impact. According to Otel, two-thirds of the decrease in sales is due to lower sales volume and one-third to lower prices.

This was the last appearance in the role for Voestalpine’s longtime CFO. Ottel will officially retire at the end of March. In the future, the 56-year-old would like to play the violin for the first time in a company, but it seems he doesn’t have a contract in his pocket yet. What matters to him is what the company’s values ​​and culture are, Ottel says.

Ottel sees the Voestalpine Group as ideally positioned for future growth. He succinctly mentioned in just a few sentences the role he played in this: The debt ratio had fallen by a third during his 20 years on the board. If Voestalpine has €7.8 billion worth of shares today, that’s four times what it had when it started.