voestalpine is bracing itself against a persistent economic downturn and the car crisis. “We are certainly in a very weak environment – there is a subdued economic mood worldwide,” said CEO Herbert Eibensteiner on Wednesday at the Business Journalists’ Club in Vienna. Europe is a particularly weak market. In his opinion, politicians are required to set the right course here.
“We cannot expect any immediate improvement in the economic situation,” said the boss of one of the largest domestic industrial companies. voestalpine has also made people sit up and take notice this year with profit warnings and significant drops in earnings – voestalpine reduced its profit expectations (before interest, taxes, depreciation and amortization) for the current 2024/25 financial year (as of the end of March) to 1.4 billion euros in October In August, 1.7 billion euros were still expected, meaning a value at the previous year’s level. In the first half of the financial year, profit after taxes fell from 321 to 183 million euros compared to the same period last year – a decline of 43 percent. “The international positioning in different industries and geographical markets stabilizes our consolidated results,” emphasized Eibensteiner.
High energy and personnel costs are a hurdle
The high personnel costs and the major issue of energy costs are problematic for voestalpine in Austria. The latter especially with a view to the transformation towards climate-neutral steel production. To do this, Voest Blast Furnaces is converting to electrical operation and for this it needs the appropriate infrastructure and economically viable energy prices. “We will have increasing energy needs,” it is clear to Eibensteiner. “After 2030 we will need additional electricity for decarbonization.”
According to Eibensteiner, it would be important for Europe’s future and competitiveness that domestic politics also take shape. The new EU Commission under Commission President Ursula von der Leyen, which was confirmed today in Strasbourg and can start work on December 1st, will use the first 100 days to concentrate on the “Clean Industrial Deal”. “The governments of the European countries have to be involved and it is important that the Austrian government is actively involved,” emphasized the company leader, referring to a location policy that is positive for Austria. His approach: “Down with labor costs and we have to find a solution to the high energy costs.” Eibensteiner hopes that a new government (in Austria, note) “will have a sufficient supply of experts.” “The government can think about which activities are driving inflation.”
Europe must make “relevant trade policy”.
The international trading environment is changing. “If other importing nations lock themselves down, trade flows go to where it is easiest,” said Eibensteiner. “The Chinese will isolate themselves, the USA will isolate themselves and the real problem is that the EU cannot counteract this,” says the voestalpine boss. “I believe it is important to strengthen Europe.” Europe must also make “a relevant trade policy”. “We are geopolitically irrelevant and do not make trade policy – that is what makes Europe weak,” said the voestalpine boss. “We are a big market, but we also have to take this into our own hands.”
The tariffs are “just one of the issues”. “The important thing is that we have now established that the framework conditions for the transformation – such as sufficient available renewable energy – do not exist,” said Eibensteiner. “These are all signs that we cannot achieve this in this time.” In his opinion, a revision of the European Carbon Border Adjustment Mechanism (CBAM) would be “important”. Furthermore, “the markets in Europe where necessary must be protected”. And thirdly, we have to get rid of this excessive bureaucracy.
“We have no relaxation in protectionism, we have over 4,000 more trade restrictions worldwide every year – not just tariffs – and protectionism will not decrease,” expects Eibensteiner. Just this week, US President-elect Donald Trump announced additional tariffs on goods from Canada, Mexico and China. voestalpine’s answer to increasing protectionism: produce “locally for local”, i.e. with plants on site in the country in which the respective buyers of Voest products have their factories.
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