Voestalpine : undertakes non-recurring write offs to the sum of EUR 280 million

The productivity level on which the original plans for the automotive plant in Carterville (USA) were based cannot be achieved. The reasons for this include the impossibility of an efficient personnel deployment (comparable to those in Europe), with result that significantly higher personnel costs are expected in future. As a result, the planned results are not achievable. The required write offs amount to around EUR 40 million. voestalpine opened it first North American production site for ultra high-strength lightweight body parts in Cartersville in 2014 and has subsequently gradually expanding operations at the site on an annual basis. Following huge initial difficulties during the third expansion phase, the technical challenges are now coming to an end and several lines are currently starting up in parallel. voestalpine is anticipating positive results as early as the coming business year. Cartersville remains an important site for voestalpine in the USA. Due to continued disruptions in the automotive sector and their impact on the automotive supply industry, the Metal Forming Division will have to make provisions of around EUR 20 million, which will also include restructuring at other sites.

In the European special steel market, over the past quarters trade restricutions have had a significantly negative impact on supply and demand, especially for tool steel. This has particularly affected the German voestalpine subsidiary Buderus Edelstahl. In addition to the economic downturn in Europe, uncertainty in the automotive sector, and a steep rise in imports from competitors based outside Europe, energy and power grid costs are also having a negative impact on business performance at the site in Wetzlar. The non-recurring costs (special write offs and restructuring costs) at Buderus Edelstahl amount to around EUR 35 million and also include a significant reduction in the share of in-house production for one production area. This could impact a quarter of the current workforce of 1,500 employees (FTE).