Annual Report - voestalpine

Management Report
26 Annual Report 2007/08
Report of the Management Board
Management Report 2007/08
This Management Report also constitutes the voestalpine Group
Management Report as we make use of the provision of section 267(4)
of the Austrian Companies Code (UGB) which permits the consolidation
of these two reports.
Economic environment
Continuation of
good economic development
The global economy showed stable growth
throughout the entire financial year. In
addition to sustained high growth rates in
Asia and South America, the momentum of
the previous year also continued in the
European Union (EU-27), the most important
economic area for the voestalpine
Group, with a growth rate of 3%. The most
impressive economic growth in the EU was
achieved by the twelve new member states
in Central and Eastern Europe, which recorded
an increase in gross domestic product
of approximately 6%.
Increased demand in
key customer sectors
Growth in the key customer sectors of the
voestalpine Group largely followed the overall
economic trend. Compared to the previous
year, further increases in demand were
recorded in all of the Group’s key customer
segments.
The detailed situation in the key sectors (as
measured by total revenues) was as follows:
The European automotive industry, and in
particular the premium segment, which is
the most important to the voestalpine Group,
recorded significant increases in production
and sales. The increase over the previous
year, partly driven by new production capacities
in Central and Eeastern Europe, was
particularly significant in the demand for
high quality steel strip (Steel Division),
quality wire (Railway Systems Division),
special automotive profiles (Profil form Division),
laser welded blanks, safety components
and precision pipes (Auto motive Division),
and special steels and tool steels
(Special Steel Division).
Dynamic growth also continued in the commercial
vehicle industry and agricultural
machinery manufacturing sector, which are
mainly important to the Profilform Division
(which primarily supplies European and
North American customers in this segment),
and to the welding consumables business
area of the Special Steel Division.
Business volume continued to grow in the
household appliance industry as well, which
has been steadily adding new capacity for
years in Eastern Europe and represents a
key driver of the further increase in demand
for coated sheets in the Steel Division.
The railway infrastructure sector gained
further momentum throughout Europe, the
growth regions of Asia, Australia, South
Africa, and North and South America.
Accelerated investment programs to expand