The Austrian steel and technology group Voestalpine is presenting a compelling financial narrative for 2025, characterized by improved earnings, a rapidly shrinking debt load, and a record-breaking stock performance. This occurs against a backdrop of a challenging economic climate, raising central questions about the sustainability of this upswing. Management has reaffirmed its full-year guidance despite headwinds, all while advancing its ambitious green transformation agenda.
A Meteoric Share Price Advance
Voestalpine’s equity has been a standout performer. The share price has surged approximately 110% since the start of the year. In the latest session, shares closed at €38.16, marking a fresh 52-week high. This price level represents a doubling of the stock’s value within a twelve-month period and stands more than 120% above its 52-week low recorded in January.
Technical indicators suggest the rally has room to run. The current share price sits about 39% above its 200-day moving average. Meanwhile, the 14-day Relative Strength Index (RSI) reading of 38.2 indicates the stock is not in overbought territory in the near term.
First-Half 2025/26: Profitability Trumps Revenue
Operational results for the first half of the 2025/26 fiscal year presented a mixed but fundamentally solid picture. While group revenue declined by 5.6% to €7.6 billion, profitability metrics showed clear improvement:
- Earnings before interest, taxes, depreciation, and amortization (EBITDA) reached €722 million, a slight increase of 0.6% year-on-year.
- EBIT rose 2% to €345 million.
- Profit before tax saw a significant 12% jump to €278 million.
- Earnings per share climbed 21.3% to €1.14.
- Free cash flow turned strongly positive to €296 million, a notable reversal from a negative figure in the prior-year period.
The EBITDA margin expanded from 8.9% to 9.5%, demonstrating the company’s ability to offset a modest revenue dip with enhanced operational efficiency. The substantial leap in earnings per share and the decisive shift to positive free cash flow have provided significant momentum for the stock.
Balance Sheet Strength Hits Multi-Year High
Voestalpine’s financial position has strengthened considerably. The gearing ratio, a key measure of indebtedness, fell to 19.5%—its lowest level since the 2006/07 financial year. An equity ratio of 49% underscores this robust financial standing, and the net debt-to-EBITDA ratio rests at a comfortable 1.1x.
Operational cash flow more than doubled to €783 million. Management attributes this strength primarily to enhanced working capital management and lower interest and tax payments. This combination of robust liquidity and reduced debt provides increased financial flexibility for strategic initiatives, including investments in decarbonization.
Divisional Performance: A Varied Landscape
The company’s four operating divisions exhibited divergent trends:
- Steel Division: Maintained high profitability with an EBITDA margin of 13.8%.
- Railway Systems: Benefited from robust global demand, achieving a 10.6% margin.
- High Performance Metals: Faced weaker capacity utilization, resulting in a 7.6% EBITDA margin.
- Metal Forming: Experienced a mixed performance in its automotive business.
The Railway Systems division stands out as a clear growth driver, capitalizing on global infrastructure programs and major rail transport projects worldwide.
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The Koralm Railway: A Flagship Project
A prominent showcase for this division is the Koralm Railway, scheduled to commence operations on December 14, 2025. The project incorporates 290 kilometers of Voestalpine’s premium rails and 235 high-tech switches. Its centerpiece is the 33-kilometer Koralm Tunnel, ranking among the longest railway tunnels globally. Such projects reinforce the division’s position in the international market for sophisticated infrastructure solutions.
Strategic Restructuring Amid Economic Challenges
Despite the positive financial metrics, the broader economic environment, particularly in Europe, remains difficult. In response, Voestalpine is implementing capacity adjustments and structural measures. In Austria, sites in Kindberg and Mürzzuschlag are affected, impacting approximately 280 full-time positions and 60 temporary jobs. Automotive component sites in Germany are also being realigned.
Group-wide, the number of employees (measured in full-time equivalents) decreased by 4.1% to 49,600. This reduction stems from both the restructuring programs and the divestment of Buderus Edelstahl. These actions aim to align the cost base with the weaker market conditions and stabilize profitability.
Advancing the Green Transition with Hy4Smelt
Concurrently, the company is aggressively pursuing the decarbonization of its production processes. Its Hy4Smelt project at the Linz site will establish the world’s first industrial-scale demonstration plant for hydrogen-based direct reduction. Construction began in September 2025, with commissioning planned for the end of 2027. The total investment volume is approximately €170 million.
This facility is designed to mark a crucial technological step toward lower-CO₂ steel production. It is expected to strengthen Voestalpine’s competitive position within an evolving regulatory landscape, especially in light of stricter climate targets and the European Union’s Carbon Border Adjustment Mechanism (CBAM).
Headwind from US Tariffs
Not all business segments are faring equally well. US import tariffs are notably impacting the seamless tube business. At Voestalpine Tubulars, these measures have led to significant sales declines. A decision regarding potential further capacity adjustments at the Kindberg site is expected by year-end. Consequently, this segment remains a pressure point within an otherwise solid overall corporate performance.
Reaffirmed Outlook
Despite tariff impacts and a weaker economic climate, management has maintained its guidance for the full 2025/26 fiscal year. The company continues to anticipate EBITDA in a range of €1.4 billion to €1.55 billion, with the negative effects of US tariffs already factored into this forecast. The executive board anticipates additional support from announced EU protective measures for the steel industry and the phased implementation of CBAM.
With its powerful share price advance, improved profitability, record-low debt, and strategic future projects, Voestalpine’s stock remains closely tied to its operational execution. Should the company succeed in maintaining its margins despite economic softness and bring the Hy4Smelt project online as planned by late 2027, the current valuation could find further support from earnings contributions linked to its green transformation.
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