Annual Report 2005/06 - voestalpine

Divisional Reports
Annual Report 2005/06
trend in orders to external companies.
The overseas markets continue to develop
very positively because of the economic
situation. Analogously to the track segment,
the switches segment benefited from investments
in the heavy goods transport sector
in South Africa and Australia because of the
expansion of raw materials exploitation. The
2005/06 business year was very positive
for the Group’s North American sites for
switches production.
In the rail construction logistics and services
business sector, which has its main markets
in Western Europe, growth in Holland was
contrasted with a sluggish or even declining
German market, whose weakness, however,
was partially compensated by new tunnel
construction projects in Switzerland.
The performance of the division’s niche segments,
wire and seamless tubes, was very
gratifying in the 2005/06 business year.
In the wire business sector, a strategy of concentrating
on high quality products (particularly
for applications in the automotive industry)
continued consistently, increasing the
share of sophisticated product grades to 86%
of sales. With the focus on highest quality wire
grades, the sales that declined slightly as a
result of the economic situation during the
past business year were more than compensated
for by higher earnings. Overall, the
prices in this segment reached an all-time
high toward the end of the third quarter, before
a moderate adjustment took place in early
2006.
In the seamless tube segment, the Group
has consistently been specializing in high
quality niche products, particularly highest
quality grades for applications in the oil and
natural gas sector (vertical drill-hole piping).
As a result of the worldwide investment
boom, prices for products supplied to these
industries reached an all-time high during
the past year, resulting in a record profit.
The division’s manufacturing base centered
on steel primarily delivers prematerial for
the track, wire, and seamless tube sectors,
as well as a small volume of semi-finished
products to external customers in Germany
and Italy. The high level of earnings that
was achieved in the previous business year
in this unit was maintained.
DevelopmenT oF The
Key FigUres
The Division Railway Systems was able to
significantly exceed the satisfactory figures
of the previous year in 2005/06 and realized
both a substantial increase in sales and an
above average boost in the profit.
The revenue went up by 14.6% from
EUR 1,586.4 million to EUR 1,817.7 million.
As a result of the excellent business performance
of the wire and seamless tube unit, its
share of the division’s total sales increased
markedly compared to the previous year;
the seamless tube segment saw the largest
gain, increasing its share in the division’s