voestalpine - 2006/07 result exceeds EUR 1 billion for the first time, dividend almost doubled

• Group achieves sales of over EUR 7 billion and an operating result of more than EUR 1 billion for the first time.
• EBITDA and EBIT margin as well as ROCE reach record levels once again.
• New record figures for sales, earnings and margins in all four divisions.
• Investments, research expenditures and ongoing environmental expenditures also at new record levels.
• The voestalpine share price increased by 86%.
• Proposed dividend of EUR 1.45 per share (previous year: EUR 0.78).
• Positive outlook also for the current business year 2007/08.

The 2006/07 business year was by far the most successful in the voestalpine Group's history. In addition to a renewed increase in revenue and an increase in all other key figures, the operating result was significantly improved for the fifth time in a row - and thus a new record result was achieved for the third time in a row. In addition, all four divisions achieved new record figures for sales, earnings and margins.

• Revenue increased by 13.1% from EUR 6,230.6 million to EUR 7,049.8 million, exceeding the EUR 7 billion mark for the first time.
• EBITDA (earnings before interest, taxes, depreciation and amortization) improved by 26.5% from EUR 1,079.0 million to EUR 1,365.0 million. The EBITDA margin rose from 17.3 % to 19.4 % in the 2006/07 financial year.
• At EUR 1,012.7 million, EBIT (result from operating activities) was 39.9 % higher than that of the previous year. EUR 1,012.7 million, 39.9 % higher than in the previous year (EUR 724.1 million). The operating result thus not only exceeded the EUR 1 billion mark for the first time in the Group's history, but also almost doubled in the last two financial years. The EBIT margin for the 2006/07 financial year therefore increased significantly from 11.6% to 14.4%.
• Due to the significant improvement in the operating result, profit before tax in 2006/07 was also markedly higher than in the previous year, rising by 44.9 % from EUR 674.3 million to EUR 977.2 million, as was the net profit for the year (profit after tax), which increased by 45.4 % from EUR 525.9 million to EUR 764.9 million.
• Due to the brisk acquisition activity and the share buyback program that has been running since October 2006, net financial debt rose by 39.6 % from EUR 376.9 million to EUR 526.2 million in the 2006/07 financial year. At the same time, equity increased by 14.9 % from EUR 2,547.3 million to EUR 2,926.3 million. This results in an increase in the gearing ratio (net financial debt as a percentage of equity) from 14.8 % to 18 % for the 2006/07 financial year, although the increase is exclusively due to the accelerated buyback of treasury shares and parts of the convertible bond.
• Earnings per share for the 2006/07 financial year amounted to EUR 4.77. This corresponds to an increase of 46.8 % compared to the previous year (EUR 3.25).
• Subject to the approval of the Annual General Meeting of voestalpine AG to be held on July 4, 2007, a dividend of EUR 1.45 per share will be distributed to the shareholders for the business year 2006/07. This corresponds to a dividend yield of 4.1%. The proposed dividend is thus significantly higher than that of the previous year, which amounted to EUR 0.78 per share, taking into account the share split that has taken place in the meantime.
• As of March 31, 2007, the voestalpine Group had 25,326 employees (excluding apprentices), 42% of whom worked outside Austria. Compared to the previous year (22,918), this corresponds to an increase of 2,408 employees or 10.5%, mainly due to acquisitions.

Only a quarter of the increase in revenue results from acquisitions

In the 2006/07 business year, an increase in revenue was achieved not only at Group level, but in all four divisions; the largest growth was recorded by the Profilform Division with 23.2%, a significant increase was also achieved in the Railway Systems Division (+13.1%) and the Steel Division (+11%). Sales growth in the Automotive division amounted to 4%.

Group sales increased by EUR 819 million compared to the previous year; only a quarter of this growth (EUR 200 million) was due to the first-time consolidation of the companies acquired in the Railway Systems, Profilform and Automotive processing divisions in 2006/07. The majority of the Group's sales growth was therefore attributable to the generally excellent business performance in the Steel, Railway Systems and Profilform divisions and to investments taking effect. The business areas of flat steel and heavy plate (Steel Division), rail technology, switch technology, quality wire and seamless tubes (Railway Systems Division), special profiles and storage technology (Profilform Division) and laser-welded blanks and precision parts (Automotive Division) deserve special mention. Above-average sales growth was achieved in all of these areas compared to the previous year.

Export ratio rises to 84

As in previous years, the ratio between steel and processing activities remained balanced in 2006/07 at 49:51% of Group sales.
The export ratio of the voestalpine Group rose further in the past business year from 82% to
84%.

Outstanding earnings development at both Group and divisional level

The 26.5% increase in EBITDA was the result of above-average improvements in the Profilform (+46.5%) and Railway Systems (+27.5%) Divisions as well as a significant increase in the Steel Division (+22.7%). With an increase of 7.9%, the Automotive division also recorded a clear improvement on the previous year.

Operating result up by almost 40% to over EUR 1 billion

The extraordinary development of EBIT at Group level (increase of almost 40% to more than EUR 1 billion for the first time) is also reflected in the equally impressive improvement of the individual divisions to new record results across the board. In addition to the further increase in the Steel Division, the disproportionately positive development of the Processing Divisions Railway Systems and Profilform should be emphasized. The Automotive Division is also on the right track with a further increase in EBIT.

In line with the trend in sales and EBITDA, the strongest increase in EBIT took place in the Profilform Division, which increased its operating result by 64.9%, while the Railway Systems (by 36.1%) and Steel (by 34.8%) Divisions also achieved an improvement roughly in line with the Group average. The earnings trend in the Automotive division was also very pleasing, with EBIT rising by 10.1% from EUR 38.6 million to EUR 42.5 million, the highest figure since the division was founded in 2001. At 5.2%, its EBIT margin (after 4.9% in the previous year) exceeded the 5% mark for the first time, which corresponds to a top earnings level in the automotive supply industry. The Railway Systems Division, now the most profitable area of the voestalpine Group, improved its EBIT margin from 13.6% to 16.4% and was thus above the Group average of 14.4%, as was the Profilform Division with an increase from 11.2% to 15.0% and the Steel Division with an increase from 12.2% to 14.8%.

The further improvement in the voestalpine Group's earnings situation resulted overall from increased sales volumes in all key areas, a higher revenue level compared to the previous year, as well as measures to further increase cost efficiency and optimize the product mix. In the three processing divisions, the newly acquired companies also made their first clearly positive contributions to earnings and thus made a decisive contribution to the year-on-year increase in EBIT.

First-time consolidation of newly acquired companies

In the course of the 2006/07 financial year, the revenue, earnings and employees of the following acquired companies were fully consolidated for the first time: voestalpine Draht Finsterwalde GmbH, Rail Center Duisburg GmbH, TENS Spolka z.o.o. and Açotrilho (Railway Systems Division), Société Profilafroid, Société Automatique de Profilage (SAP) and ZAO voestalpine Arkada Profil (Profilform Division) as well as Gutbrod Stanz- und Umformtechnik GmbH, Hügel GmbH & Co. KG and Amstutz Levin & Cie (Automotive Division).

In contrast, the companies voestalpine Stahlhandel GmbH, Koellensperger Stahlhandel GmbH & Co KG, Neptun Stahlhandel GmbH, Veting voestalpine d.o.o., voestalpine Stahlhandel spol.s.r.o., Rohstoffhandel GmbH, Schrott Waltner GmbH and Eisenhandel Gebeshuber GmbH (all Steel Division) were fully consolidated for the last time.

Extensive acquisition activities

In the 2006/07 business year, the voestalpine Group continued its strategy of value-enhancing growth through acquisitions while at the same time focusing more strongly on areas close to its core business. In addition to extensive company acquisitions in the Processing Divisions Railway Systems, Profilform and Automotive, which were aimed at further expanding the market position in specialized and technology-intensive product segments, the concentration on the core areas was driven forward in the past year and thus essentially completed for the time being.

Another sharp rise in investments

The investments of the voestalpine Group continued to rise sharply in the 2006/07 business year. At EUR 906.1 million, they were 60% higher than in the previous year (EUR 566.3 million). Of this amount, EUR 748.6 million was invested in property, plant and equipment, EUR 139.5 million in intangible assets and EUR 18.0 million in investments.

It should be emphasized that all four divisions recorded significantly higher investment activity compared to the previous year. The focus of investments in property, plant and equipment in all divisions was once again on expanding production capacity for technologically and procedurally sophisticated specialty products combined with further improvements in environmental compatibility, energy efficiency and the respective site infrastructure.

Current environmental expenditure reaches new record level

The voestalpine Group's environmental investments remained at a high level in the 2006/07 business year. At EUR 47 million, they were only slightly below the previous record level of the year before last (EUR 50 million), while at the same time current expenditure for the operation and maintenance of existing environmental facilities increased by almost 12% from EUR 169 million to EUR 189 million. The focus of environmental activities in the 2006/07 financial year was in the Steel and Railway Systems divisions and thus at the two largest Group locations.

The voestalpine Group's expenses for research and development also increased in the 2006/07 business year, totaling EUR 66 million. This represents an increase of 7.3% compared to the previous year (EUR 61.5 million) and corresponds to a research ratio (measured against Group revenue) of just under 1%. In terms of value added, the share of R&D expenditure currently stands at 2.18%.

The upward trend of the voestalpine share price, which began with the final privatization decision in September 2003, continued unabated in the 2006/07 business year. On March 30, 2007, the voestalpine share closed at a new all-time high of EUR 54.30, which corresponds to an increase of 85.8% compared to the beginning of the business year (EUR 29.23). This means that the voestalpine share not only once again clearly outperformed the leading Austrian ATX index and the international benchmark indices Stoxx (Europe) and Dow Jones Industrial (USA), but also achieved an increase in value of almost 90% for the second business year in succession (2005/06: 88.4%).

On March 30, 2007, one day after the announcement of the takeover bid for BÖHLER-UDDEHOLM AG, the voestalpine share reached its highest level to date; a phase of stable price development around the EUR 50 mark at the beginning of the business year was followed by a significant upward trend at the end of May 2007. The share reached a new provisional high of EUR 56.34 on June 4, 2007.

The first quarter of the business year 2007/08 of the voestalpine Group is characterized by a continuing high demand from all industries. While in the last two years it was primarily steadily growing exports that drove the upswing in Europe, the positive development has recently been increasingly supported by dynamic domestic demand. As the situation in the other important economic regions of the world - apart from a somewhat subdued economic situation in North America - also remains stable at a good level, a negative trend reversal also appears unlikely in the further course of 2007.

Against this background of overall economic development, the attractive market environment of recent months in the Steel Division should be well secured until the fall of 2007. The increases in raw material prices at the beginning of this year were largely neutralized by corresponding price adjustments for finished products. As neither the stock situation nor the development of imports indicate any critical trends and demand from all important customer sectors remains strong, the Steel Division is currently expected to repeat the pleasing result of the past financial year in the 2007/08 financial year.

The starting position of the Railway Systems Division at the beginning of the 2007/08 financial year is very similar to that of the previous year. Its core business of rails/switches is supported by a continuing good economic environment in Europe, which is hardly inferior to the overseas markets, where demand remains high overall. Since concentrating on the most demanding market segments in terms of quality, the wire niche segment has achieved stable high margins, which are unlikely to change for the time being due to continued high demand throughout Europe. The most difficult area to assess for the next 12 months is the development in the second niche area, the seamless tubes segment. Following a boom that has now lasted more than three years, demand for oilfield pipes in some regions appears to be unbroken, but the new capacities that have come on stream are having a dampening effect on prices. Not least against this backdrop, the division is systematically working on developing new customer segments for seamless tubes (e.g. the automotive industry) in order to secure attractive margins in this area in the long term. For the Railway Systems Division as a whole, a repeat of the previous year's result seems possible in 2007/08.

As far as the most important markets of the Profilform Division are concerned, the generally good economic climate in the European Union and Eastern Europe is expected to continue, as well as a still subdued but essentially stable economy in the USA. In the construction industry, the momentum in Russia will continue, while Western Europe, including the UK, is expected to continue its positive development; the situation is similar in the transport and storage technology sector, and the good level of demand in the automotive industry (particularly in commercial vehicle and bus construction) should also continue. Against the backdrop of a stable environment, there are also no signs of a change in the positive market situation in the custom roll forming sector. Provided the economic environment does not deteriorate significantly over the course of the financial year, earnings in the Profilform Division should again be at the previous year's level.

In the Automotive Division, the upward trend of recent years will continue in the 2007/08 financial year. The restructuring and portfolio streamlining measures of the past already had a clearly positive effect in 2006/07. In conjunction with a further improvement in the market environment, particularly in Europe, and disproportionately high earnings contributions from the recently acquired divisional companies, a further increase in earnings is expected for 2007/08. The continuation of the upward trend is being driven by solid development in the laser-welded blanks and structural parts and components segments, the accelerated exploitation of additional market potential in precision and safety parts and a targeted reduction in volatility in large pressed parts. After the Automotive division grew by around thirty percent in the last six months alone through acquisitions, the 2007/08 financial year will be characterized primarily by integration measures.

Against the background of a continuing positive development in all four divisions of the Group, from today's perspective, an operating result in the region of EUR 1 billion is once again expected for voestalpine AG in the business year 2007/08 - excluding acquisitions.