Voestalpine plans to sell German plant Buderus Edelstahl

The company justifies this step by the negative economic conditions for industrial companies in Germany

Austrian steelmaker Voestalpine AG plans to sell Buderus Edelstahl, part of the German Voestalpine High Performance Metals division, instead of the previously planned strategic re-profiling of the plant. This is stated in the company’s press release.

«The Management Board of voestalpine AG is reacting to the changed economic conditions for industrial manufacturing companies and is reorganizing production sites in Germany. This step is a consistent implementation of voestalpine Group’s strategy of focusing the materials business on the highest quality spectrum and expanding the downstream business in promising global segments,» the statement said.

Following the restructuring of Buderus Edelstahl in Germany, the company decided to sell the plant. Thus, the German division is concentrating its product portfolio on the high-tech specialty steel segment and reducing the share of tool and structural steel production from standard grades. Management believes that optimizing the product portfolio will strengthen High Performance Metals’ competitive position.

The sale of the business will result in a one-time negative impact on EBIT of approximately €340 million, of which approximately €90 million will be on EBITDA.

Voestalpine’s German automotive components division is also subject to adjustments. In particular, the company will respond to structural underutilization of capacity by selling its production site in Nagold, Germany. This will result in an impairment loss of approximately €70 million.

In total, the restructuring measures at the German operations will have a one-time impact on the group’s EBITDA of around €90 million and on EBIT of around €410 million. As a result, voestalpine’s EBITDA expectations for the 2023/2024 financial year have been adjusted from €1.7 billion to around €1.6 billion.

«These measures and the one-time earnings burden strengthen the potential for the voestalpine Group’s future prospects in a significantly changing economic and regulatory environment,» the company concludes.

As GMK Center reported earlier, voestalpine planned to suspend production of specialty wire products in Fürstenberg, Austria, by the end of 2023. The company noted that the production of saw wire has been unprofitable for several years, despite restructuring efforts and investments in capacity.