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Facts & Figures

2001/2002IAS

3,353.7

402.2

12.0 %

159.5

4.8 %

90.8

54.9

1.68

4,087.1

180.3

605.8

242.7

1,563.7

624.5

39.9 %

6.1 %

1,074.0

32.920,000

32.55

1.20

–

17,129

Values in millions of EUR

Turnover

Operating result beforedepreciation (EBITDA)

EBITDA margin

Operating result (EBIT)

EBIT margin

Result fromordinary activities (EGT)

Net profit

EPS – Earnings / share (in EUR)

Balance sheet total

Cash-flow from operations

Investments in tangible andintangible assets and interests

Depreciation

Shareholders’ equity

Net financial debt

Net financial debtas a % of equity

Return on Capital Employed(ROCE)

Market capitalizationperiod end (in EUR millions)

Number of shares

End of period share price (in EUR)

Dividend / share (in EUR)

Bonus / share (in EUR)

Employees excl. apprentices(period end)

1998/1999IAS

2,581.9

356.6

13.8 %

167.8

6.5 %

147.1

108.4

3.28

3,071.3

362.3

429.7

188.7

1,343.8

244.2

18.2 %

9.0 %

947.5

33.000,000

28.71

1.20

–

16,179

1999/2000IAS

2,711.7

354.3

13.1 %

153.0

5.6 %

163.9

128.9

3.91

3,123.3

259.3

292.5

201.3

1,430.0

286.4

20.0 %

7.8 %

1,072.5

33.000,000

32.50

1.20

–

15,228

2000/2001IAS

3,166.1

478.1

15.1 %

258.3

8.2 %

247.1

179.1

5.60

3,401.2

388.7

319.0

219.8

1,529.5

251.7

16.5 %

12.1 %

967.7

31.676,700

30.55

1.20

0.70

15,658

2002/2003IAS

4,391.9

516.1

11.8 %

223.0

5.1 %

122.0

78.0

1.99

4,516.7

267.2

622.8

293.1

1,785.9

830.6

46.5 %

7.1 %

904.8

39.340,303

23.00

1.20

–

22,737

* As proposed to the Annual General Shareholders’ Meeting

voestalpine AG key figures

*

Chronicle 2

Supervisory Board 4

Letter of the Supervisory Board 6

Management Board 8

Letter of the Management Board 10

Group Structure 13

Highlights 14

Management Report 15

Corporate Governance 36

The Share 38

Divisional Reports 41

Financial Statements 2002/2003 63

Service 138

Contents

2

Chronicle of the Financial Year

2002/2003

April

May

June

July

August

September

voestalpine acquires the

engineering company Matzner

On 29 May the agreementregarding the acquisition of 80 %of the holding company of theGerman Matzner Group is signed.A decisive step, making voestalpine a compleete systemsprovider in the body-in-white segment.

voestalpine acquires

the majority in VAE

voestalpine Bahnsysteme takesover the 45.3 % share of VAE,which had been previously heldby Vossloh AG, making it themajority shareholder of the lead-ing switch manufacturer world-wide with an interest of 90.6 %. In the same month, 70 % of therailway infrastructure companyvoestalpine Railpro in theNetherlands are acquired. In thedivision motion, the largest andmost modern press mill in Europeis opened in Schwäbisch Gmünd.

Division Profilform expands

the cold rolled profile segment

The Division Profilform acquiresthe assets of the cold rolled profile sector of the Germanbright steel manufacturerSchmolz + Bickenbach in order to expand its cold profile segment. The production facilitiesare taken over by voestalpinePräzisionsprofil, the German company of Division Profilform.

Successful capital increase to

finance the acquisitions

The capital increase, which wasoversubscribed several times,brings net revenue in the amountof EUR 215 million, which wasutilized to finance our growth policy through acquisitions in theDivision Railway Systems and thedivision motion. The ÖIAG sharein voestalpine AG decreases from37.8 to 34.7 %.

voestalpine employees demon-

strate solidarity with the victims

of the flood disaster

Some voestalpine locations andmany employees are affected bythe terrible flood disaster inEurope. The corporation makesmore than EUR 1 million availablefor immediate aid. The employeesparticipate in an impressive showof solidarity, too: They “donate”the equivalent of a vacation dayto the victims.

50 years LD process – a special

anniversary

voestalpine celebrates the LDprocess, which was developed in 1952 at the locations of Linz and Donawitz and whichrevolutionized the world’s steelindustry. Our traditional culturalevent, the voestival 2002, is alsopaying tribute to this anniversary.

Financial year 2002/2003 | 3

Chronicle

October

November

December

January

February

March

voestalpine delivers the

1.5 millionth ton

A special partnership exists between voestalpine and afamous automobile manu-facturer in Southern Germany.Representatives of both corporations celebrated the delivery of the 1.5 millionth ton and discussed the futurepotential of this highly successfulcollaboration.

Changes in the voestalpine AG

Management Board

With the beginning of the year, some changes in theManagement Board are takingeffect. The board is expandedfrom four to six members, withJosef Mülner as regular memberand Franz Hirschmanner asdeputy member. Furthermore, as of January 1, the IT activitiesof the Austrian locations are divested, and a new company,voestalpine Informations-technologie GmbH, is formed.

Additional expansion of

employee participation

With the second phase of theemployee participation program,the participation was increasedfrom four to 6.4 %. The employ-ees at the Austrian locations purchase an additional 990,000 voestalpine AG shares at theprice of EUR 24.50 per share.

voestalpine Europlatinen

increases its share in Euroweld

voestalpine Europlatinen increases its share in the Italianmanufacturer of blanks Euroweldfrom 67 to 92 %. Logistics Service and voestalpineSchienen present a logisticalworld premiere: the transport of60-meter rails by ship to SouthAfrica. A total of nine shipmentsto South Africa of the specialheavy rails from voestalpine,which weigh 4,500 tons each, are carried out.

The way is paved for the VAE

takeover

In the extraordinary GeneralShareholders’ Meeting of VAE,the merging of the switch manufacturer with voestalpineBahnsysteme as sole owner isapproved. voestalpine’s environmentalmanagement gets two awards.After the EMAS prize 2002,voestalpine is being honored with the Austrian EnvironmentalReporting Award 2001.

voestalpine initiates the first

steps on the Asian automobile

component supplier market

voestalpine Europlatinen and theleading South Korean steel manu-facturer agree on a technologicalcooperation in the segment oflaser-welded blanks. On 3 April 2003, a production facility forblanks in South Korea is put intooperation within the scope of thiscooperation. In just three months,voestalpine Stahl Donawitz takesthe reconditioned blast furnace 4as well as the new cloth filtersystem into operation.

4

Prof. Dipl.-Ing. Dr. Rudolf Streicher 1) 2)

Chairman of the Supervisory Board

Former Chairman of the Managing Board of Österreichische Industrieholding AG

Dipl.-Ing. Rainer Wieltsch 1) 2)

Deputy Chairman of the Supervisory Board (since 2 July 2002)

Mitglied des Vorstandes der Österreichischen Industrieholding AG

KR Dipl.-Ing. Dr. Josef FegerlMember of the Supervisory Board Member of the Supervisory Board of MIBA AG

Dr. Cornelius GruppMember of the Supervisory Board (since 2 July 2002)

Chairman of the Supervisory Board of CAG Holding GmbH

Karl HaasMember of the Supervisory Board General Secretary of the Trade Union for the Metal and Textile Sector

KR Dkfm. Karl Hollweger 2)

Member of the Supervisory Board Former Chairman of the Managing Board of Österreichische Industrieholding AG

Dr. Stefan KralikMember of the Supervisory Board Notary Public

Dr. Joachim LemppenauMember of the Supervisory Board Chairman of the Managing Boards of Volksfürsorge Holding AG, Volksfürsorge Deutsche Lebensversicherung AG and Volksfürsorge Deutsche Sachversicherung AG

Dr. Peter Michaelis 2)

Member of the Supervisory Board(until 2 July 2002 Deputy Chairman of the Supervisory Board)

Speaker of the Managing Board of Österreichische Industrieholding AG

The Supervisory Board


Supervisory Board

1) Member of the Presidential Committee2) Member of the Accounting Committee

KR Dr. Ludwig ScharingerMember of the Supervisory Board CEO of Raiffeisen Landesbank Oberösterreich

Josef GritzMember of the Supervisory Board Chairman of the Works Council for Wage Earners of voestalpine Stahl Donawitz GmbH

Johann HeiligenbrunnerMember of the Supervisory Board Chairman of the Works Council for Salaried Stuff of voestalpine AG

Josef Kronister

Member of the Supervisory Board

Chairman of the Works Council for Wage Earners of voestalpineStahl GmbH

Helmut Oberchristl 1) 2)


Chairman of the Central Works Council of voestalpine Stahl GmbH

Ing. Fritz Sulzbacher 2)


Chairman of the Works Council for Salaried Staff of voestalpine Stahl GmbH

Member of the Provincial Parliament

em. o. Univ.-Prof. Dr.h.c. Dr. Rudolf Strasser

Honorary Chairman of the Supervisory Board

Johannes Kepler University of Linz

KR Dkfm. Dr. Erich Becker

Member of the Supervisory Board (until 7 June 2002)

Chairman of the Managing Board of VA Technologie AG

Letter of the Supervisory Board

6

Ladies and Gentlemen,

The voestalpine Group’s process of change toward becoming primarily a process-

ing corporation continued in the 2002/2003 financial year and manifested itself

impressively in the sales revenue and operating results, both with regard to the

entire Group, which was able to realize the second best result in its history, and as

far as the business performance of the individual divisions was concerned. More-

over, voestalpine has once again proven that the Group takes all of its responsi-

bilities seriously, not just those of an economic nature. The fact that in times, when

throughout Europe investments have practically ground to a halt, voestalpine initi-

ated the largest investment program in recent Austrian economic history at its Linz

location – an initiative that is stimulating the job market in the entire region –

certainly deserves to be mentioned. The first company to comprehensively examine

the demographic development predicted for the coming decade, voestalpine has

also engaged in discourse regarding the change in values in the work environment,

and the Group-wide “LIFE” program is an outgrowth of these efforts.

The successful course taken by the voestalpine Group since its IPO in 1995 has

clearly shown that the strategy and how it was implemented was right on target.

Against the backdrop of the announced withdrawal of the Austrian state holding

company ÖIAG, the Supervisory Board’s view is that it must be ensured that the

independence and autonomy of the voestalpine Group and its current structure be

preserved in the event of a possible new ownership configuration.

Particularly in a phase of implementing a major strategy, it is the responsibility of the

Supervisory Board to ensure the greatest degree of stability. This especially in-

cludes the preservation of continuity in the personnel structure, for setting a long-

term course with regard to the major players creates the necessary order and

predictability so that a company can continue with its growth policy. In the

2002/2003 financial year, the Supervisory Board of voestalpine AG made impor-

tant organizational and personnel decisions in this regard in December 2002, which

subsequently became effective on 1 January 2003.


Aside from an expansion of the Management Board from four to six members, the

areas of responsibility of the individual members of the Management Board were

partially reassigned. The main areas of responsibility for the management of the

Group will be concentrated more than before in the offices of the Chairman and the

Management Board member responsible for finances; this will enable those

Management Board members responsible for the various divisions to focus more

fully on their sectors, which continue to grow. These decisions were made taking

the ambitious growth policy of the voestalpine Group into consideration, as well as

the increasing demands being made on the management of the individual divisions,

for example, in connection with the “Linz 2010” investment program being imple-

mented by the Division Steel. In the interest of ensuring sufficient integration within

the Group, however, those Management Board members who are responsible for

the divisions have retained at least one Group-wide area of responsibility.

In the name of the Supervisory Board, I would like to thank the Management Board

and the executives. But most of all, I would like to express our appreciation to our

employees at all locations throughout the world for an extraordinarily successful

financial year and thank them for their hard work and commitment. Once again, the

voestalpine Group has proven that the slogan “one step ahead” is not just an empty

phrase but our authentic lived practice.

R. Streicher

Supervisory Board

Management Board

8

Dr. Werner Haidenthaler, Dkfm. Franz Struzl, Dr. Wolfgang Eder, Dipl.-Ing. Franz Hirschmanner (front from the left)Mag. Wolfgang Spreitzer, Dipl.-Ing. Josef Mülner (back from the left)


Management Board

The changes in the Management Board with a partial reallocation of the functions became effective on 1 January, 2003.

Dkfm. Franz Struzl

Areas of responsibility within the Group:

– Group development

– Strategic human resources management

– Corporate communications

– Legal matters and M&A

– Environmental concerns

– Sales organization

– Auditing

Dr. Wolfgang Eder


– Investor relations

– Market image

Dr. Werner Haidenthaler


– Accounting

– Controlling

– Group treasury

– Taxes

– Management information systems

– Risk management

Mag. Wolfgang Spreitzer

Area of responsibility within the Group:

– Information technology

Dipl.-Ing. Josef Mülner


– R&D and innovation strategy

Dipl.-Ing. Franz Hirschmanner


– Sourcing strategy

(born 1942, joined voestalpine in 1967)President and Chairman of the Management BoardHead of Division Railway Systems (until 31 December 2002)

(born 1952, joined voestalpine in 1978)Deputy Chairman of the Management BoardHead of the Divisions Steel and motion

(born 1944, joined voestalpine in 1985)Member of the Management Board

(born 1951, joined voestalpine in 1971)Member of the Management BoardHead of the Division Profilform

(born 1947, joined voestalpine in 1974)Member of the Management Board (since 1 January 2003)Head of the Division Railway Systems (since 1 January 2003)

(born 1953, joined voestalpine in 1978)Deputy Member of the Management Board (since 1 January 2003)Deputy Head of the Division Steel (since 1 January 2003)

10

Letter of the Management Board

Ladies and Gentlemen,

This time, we are presenting an annual report that is special in two different

respects. First of all, we are pleased to have had a financial year, in which the

voestalpine Group – despite the international economic environment that

continues to be difficult – not only registered a significant improvement of all its

key figures in comparison to the previous year but, with an operating result of

EUR 223 million, was able to realize the second best result in the history of

the Group. And, secondly, in a part of this report, which has purposely been

separated from the facts and figures, we want to present impressions and

images of the voestalpine Group, which will illustrate and elucidate the changes

that have occurred over the past few years.

This process of change from a company orientated toward steel production to

an international processing Group – which, however, does not deny its roots in

the steel industry – is clearly reflected in the way our key figures have devel-

oped. To a significant extent, the 31 % increase in sales during the 2002/2003

financial year, from EUR 3.4 billion to EUR 4.4 billion, is the result of those acqui-

sitions – particularly in the Division Railway Systems and division motion – which

were made in the last few years within the scope of this strategic new direction.

An important milestone in this process was the successful capital increase in

April 2002. Another gratifying factor is that a considerable part of these addi-

tional sales were generated endogenously, in particular in the Division Steel, but

also in individual companies of the Divisions Railway Systems and motion.

This dynamic development, paired with improved earnings, shows that the stra-

tegy of controlled value-adding growth has been implemented successfully to

the benefit of our customers, our shareholders, and our employees. The solid

and highly profitable core of the already existing companies was expanded in

the last few years by a number of companies, bringing the voestalpine Group

crucial new competence in the areas of development, processing, and services;

their integration into the Group and its affiliated companies is going very

smoothly. Accordingly, in the 2002/2003 financial year, the Division Railway

Systems was able to again surpass its prior sales and earnings record from the

previous year, while the division motion increased its sales figures more than

five-fold, for the first time boosting its operating results to a level that is signifi-

cant for the Group. The development in the Division Steel was solid – as it has

habitually been – and both sales and operating results went up in comparison to

the previous year. The Division Profilform was also able to generate a further

improvement of its already high operating earnings margin.


In the total sales of the Group, continued expansion of the processing sector

has led to a relative decline of purely steel-oriented business, even though, in

absolute figures, the Division Steel was able to realize a considerable improve-

ment. To compare: while at the end of the previous financial year, steel produc-

tion’s share of the total sales of the Group was still at 60 % compared to 40 %

processing, in this past year, this ratio has been reversed. For the first time,

the “steel share” was under 50 %, while 53 % of the total Group sales were

generated by the Divisions Railway Systems, motion, and Profilform. In the past

year, the voestalpine Group has come yet another step closer to the target

of reaching a ratio of about 60 % processing to 40 % steel production by the

financial year 2005/2006.

This development, accompanied and driven in particular by the acquisitions,

which were carried out worldwide in order to implement our “downstream”

strategy, not only expanded our range of products and know-how, but also

changed the “voestalpine work environment” to a perceptible degree. In our

youngest sector, the division motion, for example, 95 % of the employees are

working at locations outside of Austria, and Group-wide, about 40 % of our

23,000 employees are working in non-Austrian companies. The voestalpine

Group has become a European corporation that also operates development

and production facilities beyond Europe, namely in the US, but also in South

America, South Africa, and Australia.

For a corporation, where being employee-oriented was always a central element

of its corporate culture, this has brought new challenges. Therefore, voestalpine

AG has initiated the “LIFE” program and has made it a Group-wide focal point in

order to make the work environment within the company even more attractive.

On one hand, this includes the strategic and cultural integration of employees in

those companies, which are the newest members of our Group, and on the

other, it entails taking demographic trends into consideration, as well as

adapting to the changing expectations that employees have of their jobs, for

example, new forms of work, working time models, qualifications, motivation, or

a holistically healthy work environment. It is in this context that we see the

continued expansion of employee participation from 4 to 6.4 %, which took

place in March 2003, not only as a measure to secure a stable ownership

structure in the long term but, beyond that, as a clear expression of our employ-

ees’ confidence in the Group and its strategy.


How diverse the voestalpine Group and its people are, what services we offer

our customers, and how the know-how network of the four divisions jointly

works on innovations – these are the things we want to show you in the second

part of this annual report so that you can get real insight into our corporation

and can have an accurate impression of the changes that the voestalpine

Group has made in the past years.

We would now like to thank all those who have helped us in our endeavors and

thus made our success possible: our customers, whose partnership has

accompanied us loyally for many years; our shareholders, who prove their confi-

dence in us by entrusting us with their investment; and last but not least, our

employees throughout the world, whose strong commitment has been a major

contribution to the successful changes our Group has implemented.

In conclusion, we would also like to comment on the future of the Group from

the Management Board’s point of view. The Austrian government has decided

to withdraw completely from the ownership of voestalpine AG. This means that

the Austrian state holding company ÖIAG will, in the foreseeable future, dispose

of the 34.7 % capital stock that it currently still holds. With regard to the suc-

cessful course that the Group has taken in the past years – the consistent

implementation of a strategy of value-adding growth built on the solid knowl-

edge base of our employees and the decades-long partnership with our

customers and suppliers – we are assuming that the complete withdrawal of

the government from the ownership structure will not change the autonomy and

independence of the voestalpine Group.

Franz Struzl Wolfgang Eder Werner Haidenthaler

Wolfgang Spreitzer Josef Mülner Franz Hirschmanner



Group Structureby Divisions

voestalpine AG (Holding)

voestalpine – Division Steel

voestalpine – Division Railway Systems

voestalpine – division motion

voestalpine – Division Profilform

voestalpine Stahl GmbH

– voestalpine Grobblech GmbH & Co KG

– voestalpine Gießerei Linz GmbH

– voestalpine Gießerei Traisen GmbH

– voestalpine Schmiede GmbH

– voestalpine Stahl Service Center GmbH

– voestalpine Stahlhandel GmbH

– Logistik Service GmbH

– voestalpine Mechatronics GmbH (58%)

– voestalpine Rohstoffhandel GmbH

– voestalpine Rohstoffbeschaffungs-GmbH

voestalpine Bahnsysteme GmbH (Holding)

– voestalpine Schienen GmbH

– TSTG Schienen Technik GmbH

– VAE GmbH

– voestalpine Klöckner Bahntechnik GmbH

– voestalpine Railpro B.V.

– voestalpine Stahl Donawitz GmbH

– voestalpine Austria Draht GmbH

– voestalpine Tubulars GmbH & Co KG (50%)

voestalpine motion gmbh (Holding)

– Polynorm N.V.

– voestalpine Matzner GmbH

– voestalpine Europlatinen GmbH & Co KG

– Euroweld S.r.l. (92 %)

– voestalpine Rotec GmbH

– Elmsteel Group Ltd.

– voestalpine Präzisrohrtechnik GmbH

– Turinauto S.p.A. (33,33%)

voestalpine Krems GmbH

– voestalpine Krems Finaltechnik GmbH

– Sadef N.V.

– Metsec plc

– Roll Forming Corporation

– voestalpine Profilform s.r.o.

– voestalpine Präzisionsprofil GmbH

14

Highlights 2002/2003

– Second most successful financial year in the history of the voestalpine Group

– Sales increased by 31 % to EUR 4.4 billion, EBIT rose by almost 40 % to EUR 223 million

– Divisions Railway Systems and motion expanded through acquisitions to become complete systems providers in their segments

– With hot-dip galvanizing plant 3, the first major project of the “Linz 2010” investment program has been completed

– “LIFE,” a Group-wide employee program, initiated

– Employee participation increases from 4 to 6.4 %.


This Management Report constitutes the consolidated Management Report as

provided for in Section 267(3) of the Austrian Commercial Code (HGB), which

permits the presentation of a combined Management Report for the Group and

voestalpine AG.

Economic environment

The hoped-for recovery of the international economic situation in 2002 did not

materialize. All the major economic indicators have been declining or, at best,

stagnating. According to regions and the most important customer industries,

the past financial year presents the following overall picture:

Development of the most important economic indicators

In the 2002 calendar year, the Austrian economy grew by only 1 % in real terms.

This approximately corresponds to the GDP growth in 2001 (0.7 %) and the pre-

dicted figure for 2003 (1.1 %). In the recent history of the Austrian economy, this

is the first time that such low growth figures occurred for three years in a row.

Investments also took a downturn. The effective gross domestic investment

spending decreased in 2002 by 4.8 %, while equipment investments fell by

8.9%, and construction declined by 1.2% compared to the previous year.

Austrian exports rose by a mere 5.5 % (as a comparison: in 2000 the increase

was 13.1 %).

Overall, the economic situation in the rest of Europe is similar. In 2002, the

gross domestic product in the EU rose by only 0.9 % (0.8 % in the Eurozone),

the lowest growth rate since 1993. During the first calendar quarter of 2003 (the

fourth quarter of the 2002/2003 financial year of the voestalpine Group), the

economy in the Eurozone continued to stagnate, and in individual countries

such as Germany or Italy, the gross domestic product even fell in comparison to

the previous quarter. In 2002, the economy experienced stronger growth in the

USA (+2.4 %), and, overall, the world economy grew by 2.9 %, mainly as a

result of the positive development in China. Industrial production in the EU fell by

1.3 % compared to 2001. In the USA, the decline was 0.7 %. An additional

obstacle for quick recovery in Europe is sluggish demand in the European

countries and the stronger Euro versus the US dollar. The raw materials prices

rose worldwide by 1 % in real terms; in the steel industry, oil, coke, and ores

were the materials most affected by price increases.

Management Report 2002/2003

In 2002, the

economy in Austria

grew by only 1%.

Investments

declined sharply.

Continued

economic stagna-

tion in Europe.

16

Management Report

Development of the most important customer industries

The European construction industry stagnated in 2002 for the second year in a

row. This development was driven in particular by an above-average decline in

Germany. The situation for the household appliance industry was more differen-

tiated. In 2002, Italian manufacturers were able to boost total sales by about

2 %, and exports, which account for around two thirds of sales, showed an

upward tendency. Toward the end of 2002 and in the first quarter of 2003,

export growth even accelerated significantly. With a plus of 10 % compared to

the same period during the previous year, exports reached a new record high,

and production grew by 3.5 %. The German household appliance market,

however, shrank in 2002 by about 4 %; for built-in appliances, the decline was

even higher at around 7 %, due to decreased construction activity.

Seen overall, the worldwide economic situation of the automotive industry was

stable in 2002, despite recessionary trends in the USA and Western Europe. The

dynamic situation on the Asian growth markets made a major contribution to this

trend. After the record numbers in 2001, the economic environment in the past

year deteriorated significantly in Western Europe, the main market of voestalpine

Division Steel and division motion. In 2002, production in Europe decreased by

–0.7% and by –1.6% in the European Union, the first decline since 1996. In those

markets, which have the greatest importance for the voestalpine Group, produc-

tion figures rose only in France (by 1.8%), while numbers in Germany (–3.9%) and

Italy (–9.7%) declined considerably. The main customers of voestalpine – for the

most part well-known premium manufacturers – were nevertheless able to hold

their positions despite the difficult market situation.

The railway industry developed by and large counter to the general economic

trend. This sector experienced a stable and high level of demand in almost all

regions because of extensive investments being made in modernizing and

upgrading and/or expanding the rail infrastructure.

Business performance of the voestalpine Group

In the 2002/2003 financial year, the voestalpine Group continued its strategy of

value-adding growth – increasing sales, while at the same time improving profi-

tability – despite the difficult economic environment. Compared to the previous

year, both sales and profits rose substantially. For voestalpine, the 2002/2003

financial year was the second best year in the history of the corporation.

During the 2002/2003 financial year, initial consolidation was completed for the

companies Polynorm and Elmsteel (division motion), which had been acquired in

Economic trends

differ in various

industries: conti-

nued stagnation in

the construction

industry and a

somewhat positive

trend in the house-

hold appliance

industry.

Premium custo-

mers in the auto-

motive industry are

able to hold their

own in a difficult

market

environment.

Railway industry

remains at

a high level.

Second most suc-

cessful year in the

history of the

voestalpine Group.


Management Report

2001, as well as for the companies acquired in the 2002/2003 financial year,

voestalpine Matzner (division motion), voestalpine Railpro, Wisselbouw, as well

as for the full acquisition of VAE (both by Division Railway Systems).

In the 2002/2003 financial year, sales increased by 31% from EUR 3,353.7 million

to EUR 4,391.9 million. About 90% of this sales growth is derived from the newly

acquired companies, while the remainder is attributable to endogenous growth of

the individual companies of the Divisions Steel, Railway Systems, and motion.

Primarily based on the acquisitions in the Divisions Railway Systems and

motion, the percentage of deliveries to railway customers and to the automotive

industry rose in the 2002/2003 financial year. To date, about one third of the

sales of the entire Group is accounted for by the automotive sector. This not

only includes the sales of the division motion but also the supply of components

to the automotive industry by other divisions.

Compared to the previous year, the percentage of exports to total sales of the

Group rose once again. At the end of the financial year, the percentage of

exports was already at 82 %, an increase of 5 percentage points over the

previous year. Despite of the fact that this increase was mainly attributable to

the sales generated by the acquired companies, the Division Steel nevertheless

was able to further increase its export share as well. The most important market

by far for the voestalpine Group was again the European Union, where (not

including Austria) 60 % of total sales were generated. Sales in the rest of

the world also rose – primarily as a result of the consolidation of VAE with its

21 production sites worldwide.

2002/032001/022000/011999/001998/99

3,353.7 4,391.93,166.12,711.72,581.9

External salesFinancial year 2002/2003 in EUR million

29% Automotive*

13% Steel and machine constructions

External sales by sectors

Financial year 2002/2003 in % of total sales

15% Building construction*

6% Oil/energy

13% Other**

5% Household appliances

19% Railways

* including supply industry** including materials handling and storage technology

18

Management Report

Sales in the Eastern and Central European region (deliveries to the Czech

Republic, Slovakia, Hungary, Poland, Slovenia, and Croatia) showed a clearly

upward trend. In absolute figures, the proportion of sales attributable to these

markets increased from around EUR 220 million in the 2001/2002 financial year

to about EUR 312 million.

The way that the sales pattern by divisions has developed illustrates the push

for growth in the processing sector in the past year. The Division Steel remained

the sector with the strongest sales in the voestalpine Group in the 2002/2003

financial year, but, for the first time, the share of the steel production segment in

the total sales of the Group was smaller than that of the processing divisions

Railway Systems, motion, and Profilform. While in the previous year, 60 % of the

total sales of the Group were generated by the Division Steel, as of the end of

the 2002/2003 financial year, it was only 47 %, despite the fact that absolute

sales figures had risen. The division motion, which only contributed 5 % to the

total sales of the voestalpine Group during the previous financial year, increased

its share to 16 %. At 27 %, the Division Railway Systems’ share of consolidated

sales remained stable despite the significant increase in absolute figures, while

the share of the Division Profilform went down from 14 % to 10 %.

EBITDA (earnings before interest, taxes, depreciation and amortization) rose by

28.3 % from EUR 402.2 million to EUR 516.1 million. The increase in earnings

before interest and taxes (EBIT) was even more substantial, improving by

39.8 % from EUR 159.5 million to EUR 223.0 million. The positive development

was a result of a significantly improved trend in earnings and results in the

External sales by regions


10% Rest of the world

18% Austria

22% Other EU countries

27 % Germany

12% Other European countries

11% Italy

2001/022000/011999/001998/99 2002/03

402.2478.1354.3356.6 516.1

Earnings before interest, taxes, depreciation and amortization (EBITDA)Financial year 2002/2003 in EUR million


Management Report

Division Steel on one hand, and on the other, a consequence of the further

improvement of the operating results in the other three divisions as compared to

the previous year.

The result from ordinary activities increased by 34.4% from EUR 90.8 million to

EUR 122.0 million, despite the extraordinary loss incurred from the write-down

of the interest in VA Technologie AG as of 31 March 2003 versus 31 March

2002 in the amount of EUR 39.6 million (before taxes).

In May 2003, voestalpine AG sold its interest of 19.05 % in VA Technologie AG

to an Austrian investor group. This step was implemented in line with the

voestalpine Group strategy of concentrating on its core competencies.

As compared to the previous financial year, the net income rose by EUR 54.9 million

to EUR 78.0 million (+ 42.1%).

The net financial debt increased from EUR 624.5 million to EUR 830.6 million

during the 2002/2003 financial year as a result of the substantial acquisitions.

With an increase in equity from EUR 1.6 billion to 1.8 billion, the gearing ratio

(net financial debt in percent of equity) was 46.5 % compared to 40 % in the

previous financial year.

2001/02 2002/032000/011999/001998/99

223.0159.5258.3153.0167.8

Earning before interest and taxes (EBIT)Financial year 2002/2003 in EUR million

16% division motion

External sales by divisions


10% Division Profilform

47% Divsion Steel

27% Division Railway Systems

20

Management Report

The earnings per share for the 2002/2003 financial year amount to EUR 1.99

compared to EUR 1.68 in the previous year. The previously mentioned loss

incurred from the write-down of the interest in VA Technologie AG is not a cash

loss and therefore does not affect the computation of the dividend. Contingent

on the approval by the Annual General Shareholders’ Meeting, voestalpine AG

will – as in the past three years – pay out a dividend of EUR 1.20 per share.

Changes in the voestalpine AG Management Board

On 16 December 2002, the Supervisory Board of voestalpine AG approved

changes in the Management Board of the Group, which became effective on

1 January 2003. The Management Board has been expanded from four to six

members. Dipl.-Ing. Josef Mülner has been designated as a new member

and Dipl.-Ing. Franz Hirschmanner as a deputy member of the voestalpine AG

Management Board. In addition, reassignment of some of the Group functions

within the Management Board became effective at the same time.

The reason for increasing the number of Management Board members lies primarily

in the significant expansion of the voestalpine Group in the past few years. While in

1995, the year of the IPO, sales still hovered at EUR 2.5 billion; at the end of the

2002/2003 financial year, they had already risen to EUR 4.4 billion. In the same time

Management

Board expanded

from four to six

members.

25

1.7

1,5

29

.5

62

4.5

1,5

63

.7

83

0.6

1,7

85

.9

28

6.4

1,4

30

.0

24

4.2

1,3

43

.8

18.2 % 16.5 %

39.9 %

46.5 %

20.0 %

NET FINANCIAL DEBT EQUITY GEARING in %

2001/022000/011999/001998/99 2002/03

Net financial debt/equity/gearingFinancial year 2002/2003 in EUR million


Management Report

period, the number of employees increased from 15,000 to just over 23,000.

The number of equity holdings rose from 80 to about 300. Furthermore, the chan-

ges are connected to the medium-term succession planning for the Manage-

ment Board, as well as to the realization of the “Linz 2010” investment program.

Against this backdrop, the main areas of responsibility for the management of the

Group will be concentrated more than previously in the offices of the Chairman

and the Management Board member responsible for finances; this will enable

those Management Board members responsible for the various divisions to focus

more fully on their sectors, which continue to grow. In the interest of ensuring

sufficient integration within the Group, those Management Board members who

are responsible for the divisions have retained Group-wide areas of responsibility.

– As Chairman and Speaker of the Management Board, Dkfm. Franz Struzl

is entrusted with overall leadership and coordination of the Group. Group

development, strategic human resources management (including senior

executives), public relations, legal matters and M&A, environmental issues,

sales organization, and auditing fall within his area of responsibility within the

Group. Dkfm. Struzl has withdrawn from operative business management

and, as of 1 January 2003, has handed over the management of the Division

Railway Systems, which he had previously supervised concurrently with his

other responsibilities, to Dipl.-Ing. Josef Mülner.

– The Deputy Chairman of the Management Board, Dr. Wolfgang Eder,

continues to be the Head of the Divisions Steel and motion. His areas of

responsibility within the Group are investor relations and market image. In

accordance with the Supervisory Board’s decision, Dr. Eder will succeed

Dkfm. Struzl as Chairman of the Management Board of voestalpine AG during

the course of 2006.

– Dr. Werner Haidenthaler’s areas of responsibility within the Group are

accounting, controlling (including controlling of holding and associated

companies), Group treasury, taxes, management information systems, and

risk management.

– Mag. Wolfgang Spreitzer continues as Head of the Division Profilform; his

area of responsibility within the Group is information technology.

– Dipl.-Ing. Josef Mülner is the Head of the Division Railway Systems, and his

areas of responsibility within the Management Board are R&D and innovation

strategy.

– Dipl.-Ing. Franz Hirschmanner will assist Dr. Eder as Deputy Head of the

Division Steel, in particular regarding the implementation of the “Linz 2010”

program. His area of responsibility within the Group is sourcing strategy,

including raw materials strategy.

Reassignment of

Group areas of

responsibility and

personnel changes

in the management

of the divisions.

22

Management Report

Acquisitions

In line with the Group’s “downstream” strategy, which is aimed at continuously

optimizing the value-added chain, a number of strategically important acquisi-

tions were made during the 2002/2003 financial year, focusing on the Divisions

Railway Systems and motion.

In 2002, the Division Railway Systems took over the 45.3 % share of VAE AG

which had been previously held by Vossloh AG, in addition to its existing 45.3 %

share of the company, and, in January 2003, also acquired the remaining 9.4 %

free-float shares by paying out the minority shareholders. Thus, the main divi-

sional company, voestalpine Bahnsysteme GmbH, is now the sole owner of the

internationally leading manufacturer of switches and turnout systems with

21 production sites worldwide. In June 2002, VAE GmbH acquired the switch

manufacturer Wisselbouw in the Netherlands.

In the logistics/service sector, the Division Railway Systems acquired 70 % of

voestalpine Railpro B.V. in July 2002. The Dutch company is active as a “one-

stop shop” in the railway infrastructure sector and was founded in 1995, when

the sourcing segment was divested from the Dutch National Railways.

With these acquisitions, the Division Railway Systems has already reached its

strategic goal of becoming a complete systems provider for railway superstruc-

tures in the 2002/2003 financial year, although the target date had been

2005/2006. The product, service, and logistics range was rounded out in

Germany and the Netherlands, so that it is the only corporation in the industry

that can provide comprehensive deliveries and services for the “steel track” –

including complete supply chain management and general contractor services.

The situation is similar in the division motion, which is active in the automotive

body-in-white segment. After the purchase of the Dutch Polynorm Group at the

end of 2001, whose acquisition enabled the division to obtain competence in

alternative materials such as aluminum, plastic and composite materials for the

first time, and the purchase of the British precision tube company Elmsteel Ltd.

(a subsidiary of the voestalpine Rotec Group), the focal point during the

2002/2003 financial year was on the acquisition of engineering know-how.

As of 31 May 2002, 80 % of voestalpine Matzner GmbH were acquired. The

share was increased in the course of the financial year to 90 %. The German

company specializes in engineering in the body-in-white segment and in body

shell components, as well as in the manufacturing of prototypes and series.

division motion

expands its compe-

tence in the body-in-

white segment.

Division Railway

Systems expanded

to become a com-

plete systems

provider.


Management Report

Within the voestalpine Group, the company exercises a connecting function

between the companies of the division motion and other Group companies

which are active in the automotive supply sector. This provides the voestalpine

Group with full competence in the body-in-white segment – from high-grade

materials to engineering and product development, toolmaking, processing and

manufacturing know-how and, finally, assembly.

In addition, the Division Profilform has taken over the cold rolled profile segment

of the German manufacturer of welded blanks Schmolz + Bickenbach and

integrated it into its German subsidiary voestalpine Präzisionsprofil GmbH. As a

result, the division, which is the most profitable manufacturer of special profiles

with the highest sales rates in Europe, has expanded the cold profile sector

even further.

Strategy

Capital increase for value-adding growth

As presented in detail in the annual report for the 2001/2002 financial year,

voestalpine AG completed a capital increase in April 2002 on the Vienna Stock

Exchange, whose net proceeds of EUR 215 million were used to finance new

acquisitions – a strategy, which will be continued in the future. Within the scope

of this capital increase, the interest of Österreichische Industrieholding AG

(ÖIAG) in the share capital of voestalpine AG was reduced from 37.8 to 34.7 %.

Stepped-up expansion of further processing activities

The medium-term goal of the voestalpine Group is an increase in sales by the

2005/2006 financial year from currently EUR 4.4 billion to over EUR 5 billion.

This growth, which will be primarily generated by means of further acquisitions

and also by endogenous growth, will be focused on the Divisions Railway

Systems and motion and thus on the expansion of further processing activities.

At the same time, the earning power of the Group is to be maintained at a

stable and high level.

Since 1998, voestalpine has made a number of acquisitions – all companies in

the development, processing, and service sectors. These companies were

(according to the calendar year of the acquisition) as follows:

1998

Metsec plc, Division Profilform

VAE AG (45 %), Division Railway Systems

Ambitious goals

for growth in the

period 2005/2006:

continued

expansion of the

processing sector.

24

Management Report

2000

Roll Forming Corporation, Division Profilform

voestalpine Klöckner Bahntechnik GmbH, Division Railway Systems

Turinauto S.p.A. (33 %), division motion

voestalpine Rotec GmbH, division motion

2001

TSTG Schienen Technik GmbH, Division Railway Systems

Polynorm B.V., division motion

Elmsteel Ltd. (voestalpine Rotec Group), division motion

2002

voestalpine Matzner GmbH (90 %), division motion

Wisselbouw B.V. (VAE), Division Railway Systems

voestalpine Railpro B.V. (70 %), Division Railway Systems

VAE AG (100 %), Division Railway Systems

Schmolz + Bickenbach (asset deal of voestalpine Präzisionsprofil GmbH),

Division Profilform

As a result of these acquisitions, the share of engineering and processing

activities of the total sales of the voestalpine Group increased from 30 % in

the 1998/1999 financial year to 40 % in the 2001/2002 financial year, and

finally, to 53 % at the end of the past financial year. In the next three years, we

are aiming for additional growth so that around 60 % of Group sales will result

from processing activities..

Regarding the plans for the continued development of the four divisions within

the scope of this superordinate Group strategy, please read the details in the

corresponding chapters after the Management Report.

Establishment of independent companies

As of 1 January 2003, all information technology (IT) competences and activities

performed at the Austrian locations Linz, Krems, Donawitz, and Bruck were

divested and merged with voestalpine Informationstechnologie GmbH, a 100 %

subsidiary of voestalpine AG. The employees who had been working in this

sector were transferred to the new company.

The major goal of this measure was to increase IT efficiency and competence

through utilization of synergies, optimization of technical processes, and

improved coordination within the scope of the voestalpine Group’s IT strategy.

IT activities

divested.


Management Report

In the medium term, the IT activities of all major Group companies will be inte-

grated into this new network.

Additionally, voestalpine Informationstechnologie GmbH will also be a service

provider for external customers.

Investments

Investments in the 2002/2003 financial year amounted to EUR 622.8 million.

This corresponds to an increase of about 3 % compared to the previous year’s

figure of EUR 605.8 million. Investments in tangible fixed assets totaled EUR

479.2 million, while investments in intangible fixed assets and equity holdings

came to EUR 143.6 million.

The focal point of our investment activities was the program “Linz 2010,” which

was implemented with the goal of expanding the Linz site, the main location of

the Division Steel, to a leading steel competence center in Europe (in particular

for the automotive industry). Within the scope of the first phase, EUR 1 billion

will be invested up to the 2005/2006 financial year in the modernization and

development of the metallurgical sector and the new construction or expansion

of processing facilities. The first major project that has been completed was the

new construction of hot-dip galvanizing plant 3 with an investment totaling

around EUR 127 million. This plant began pilot operation in May 2003, and

market supply will start in late summer of the same year.

All planning and construction work for the further projects within the first phase

is going according to plan – both as far as costs and time are concerned. The

INVESTMENTS IN TANGIBLE FIXED ASSETS DEPRECIATION

2001/022000/011999/001998/99 2002/03

519,6 479,2253,0278,0333,3

Investment expenditure (tangible fixed assets)/depreciationFinancial year 2002/2003 in EUR million

“Linz 2010” focal

point of invest-

ments – first major

project already

completed.

26

Management Report

current focal points are coil coating plant 2, which will go into operation in April

2004, continuous casting plant 6, which will go into operation in fall 2004, as

well as the preparations for the reconditioning and expansion of the main unit of

blast furnace A, which is also being planned for the fall of 2004. The invest-

ments within the scope of the “Linz 2010” program are a result of the increasing

demand by customers in the automotive industry for specially treated and/or

coated plates and the highest grade steels, something that the current capacity

at the Linz location cannot come close to accommodating.

With investment costs totaling about EUR 30 million, voestalpine Grobblech

GmbH & Co KG, a company of the Division Steel, realized its largest investment

project to date, during which the company’s production facilities underwent a

full modernization.

Extensive investments were also implemented in the Division Railway Systems

during the 2002/2003 financial year: The switch technology sector constructed

a new production facility for the “HYTRONICS” product line (electronic and

hydraulic switch components). In addition, in the Brandenburg plant of BWG, a

German subsidiary of VAE GmbH, a new production facility for elastic ribbed

plates, which are utilized for high-speed tracks, was built. In total, the switch

sector invested around EUR 10 million in new production facilities.

In the railway technology sector, investments were focused on the construction

of a second warehouse for ultra-long rails, as well as facilities of voestalpine

Schienen GmbH in Donawitz to optimize materials flow and intended for a total

capacity for ultra-long rails of 200,000 tons per year. The reason for these

investments, which totaled more than EUR 10 million, is the continuously rising

demand in Europe for ultra-long rails, a product where voestalpine is the market

and technology leader.

In addition, blast furnace 4 at voestalpine Stahl Donawitz GmbH was recondi-

tioned in the 2002/2003 financial year, with an investment total of EUR 16.6

million, and a new fabric filter system with an expenditure of EUR 9.6 million

was put into operation. This new system enables a considerable and sustained

reduction of dust emissions in the area of the sintering plant. Moreover, EUR 1.9

million were invested in the expansion of the annealing plant in Donawitz.

In the division motion, Polynorm Germany built a second press plant at the

Schwäbisch Gmünd site (Germany), and a new painting plant is currently under

construction at Polynorm B.V. in Bunschoten, Netherlands. The investment

volume for both projects amounts to approximately EUR 65 million.

Comprehensive

investments in the

Division Railway

Systems.


Management Report

Employees

As of the end of the 2002/2003 financial year, the voestalpine Group had

22,737 employees (not including apprentices). Compared to the previous year,

this means an increase of 5,608 employees or a growth rate of 33 % – largely as

a result of acquisitions.

As a result of the international expansion in the past few years, the percentage

of employees working in Group companies outside of Austria rose from 3,229 to

the current figure of 8,189 – that is 36 % of all employees of the voestalpine

Group. In the division motion, the figure is even higher; 95 % of the workforce is

employed in non-Austrian Group companies.

In the 2002/2003 financial year, the employee participation program continued

to be expanded. Since November 2001, approximately 13,500 employees in

Austrian Group companies held about 4 % of the shares of voestalpine AG.

In March 2003, the second phase was implemented. The employees at the

locations in Austria acquired an additional 990,000 individual shares, which

corresponds to about 2.5 % of the shares issued. The purchase price was

EUR 24.50 per share. By including other companies (for example, the Austrian

sites of VAE GmbH), about 14,500 employees are now co-owners of their

company and hold about 6.4 % of all voestalpine AG shares.

Within the scope of the application of a so-called “opening clause” of the collec-

tive agreement, 0.5 percent of wages and salaries are not paid out but instead,

employees at the locations in Austria invest this amount in their company’s

stock through the voestalpine employees’ private foundation. Because the legal

situation is different with respect to the various non-Austrian locations of the

Group, an expansion of the employee participation program to the international

employees of the Group is currently not yet possible.

In the human resources sector, the focus was on the “LIFE” program in the

2002/2003 financial year. This long-term project focuses on the expected

demographic development in the job market, which predicts a drastic shortage

of qualified young employees and, at the same time, a sharp increase in the

number of older employees in the coming years. Moreover, it is geared toward

the statutory measures with respect to a higher retirement age, thus increasing

the length of the working life. “LIFE” also places a great deal of attention on the

change in values in the work environment, which has led to factors like greater

compatibility of family and career, new work forms, and greater priority for health

Percentage

of employees

working outside

of Austria signifi-

cantly increased.

Group-wide

program “LIFE” –

Fundamental

reshaping of the

“voestalpine work

environment”.

28

Management Report

issues being viewed as increasingly important. These days, when people

choose an employer, they consider how employee-oriented a company is to

be a criterion that is just as significant as wage and salary fairness.

The “LIFE” program, which is being jointly backed by the management and the

works council, entails a complete reorganization of human resources manage-

ment and is directed toward sustainability, a holistic orientation, and a long-term

change in attitudes for both management and employees. With a “bundle” of

coordinated measures, the “voestalpine work environment” will be made more

attractive for all of the generations employed in the company.

Currently the “LIFE” program is centered on the development of a long-term

personnel strategy for the individual Group companies, as well as the actual

implementation of initial measures. For example, in a pilot project at the Linz

site, new models for shift operation are being developed. In order to promote

fairness in career advancement, age limits for both external and in-house job

applications have been largely eliminated. Other priority measures are making

2 % of the total annual working hours mandatory for training and continued

education programs for all employees, increasing the percentage of female

employees in qualified technical jobs, support and sponsorship for apprentices

and a new generation of executives (both with in-house programs and in

collaboration with universities), and the ergonomics and health sector. Agree-

ments on annual targets have been made with the CEOs of the individual Group

companies, who have committed themselves to implementing the measures

contained in the "LIFE” program. The first step is to realize the project at

the Austrian locations. Once this goal has been achieved, it will gradually be

expanded to include the entire voestalpine Group.

In addition, the voestalpine Group is also sponsoring students in many different

ways. Together with the Johannes Kepler University in Linz and the Montan-

universität Leoben (University for Mining and Metallurgy), voestalpine AG has

endowed the “voestalpine economic prize” for outstanding theses, dissertations,

and other academic work. In addition, voestalpine supports 50 students of

technical and other company-relevant courses of study by paying their tuition,

and more than 300 students of technical courses of study get summer intern-

ships in one of the Group’s companies. And last but not least, the voestalpine

Group is sponsoring talented students at the University for Mining and Metallurgy

in Leoben by awarding EUR 3,000 annually within the scope of the “Success

Scholarship”. Through an industry initiative with other companies, all students at

the University for Mining and Metallurgy in the first phase of their studies are

generally refunded their tuition through the so-called “practice check”.

Extensive

sponsorship

of students.


Management Report

Environment and safety

Environment

In the 2002/2003 financial year, investments in facilities to reduce emissions

further increased in comparison to the previous year, while the operating costs

remained stable at a high level. The main reason for this was the construction

and start of operation of the fabric filter exhaust air decontamination system at

the sintering plant at voestalpine Stahl Donawitz GmbH in June 2002. The

investment expenditure was EUR 9.6 million. Together with the already existing

electrical filter for dust emissions, the new unit not only extracts dust from

emissions but simultaneously reduces sulfur dioxide emissions from the exhaust

air from the sintering process.

The voestalpine Group’s strategy of successfully implementing Group-wide

environmental management systems in accordance with EMAS and ISO14001

received recognition on two separate occasions. In October 2002, voestalpine

Stahl GmbH was awarded the Austrian EMAS prize 2002 for its diverse mar-

keting activities in connection with environmental management, and in early

December, the environmental declaration made by the Linz and Steyrling sites

was honored with the AERA (Austrian Environmental Reporting Award) for the

second time.

With the ratification of the Kyoto Protocol, the countries of the EU have set

themselves ambitious goals regarding climate protection. The first policy instru-

ment that has emerged from the ratification is the EU-wide emissions trading

system, which is set to begin in 2005. In addition to the steps already taken in

this area, during the past financial year, the voestalpine Group began to partici-

pate vigorously – both nationally and internationally – in the preparations toward

implementation of climate policy measures. A task force was put together to

deal primarily with those companies in the voestalpine Group who produce the

most emissions. The most important tasks are developing an exact data basis

for the calculation of emissions, drawing up an inventory of greenhouse gases,

and investigating and evaluating greenhouse gas reduction projects. Measures

toward climate protection will not only be taken at those locations, which pro-

duce the major portion of the Group’s emissions. At less emission-intensive

locations as well, instruments will be put into place that have been adapted

to the local situation. The Group also participates actively in the creation of

standards for drawing up inventories of greenhouse gases. These are very

important because the value of emissions certificates will be largely dependent

on the degree of trust people have in the quality of the calculation method of

emissions volumes.

New facility

in Donawitz

significantly

reduces pollutant

emissions.

Recognition of

voestalpine’s

environmental

marketing.

voestalpine

is involved in

measures against

climate change.

30

Management Report

The “Know-How

Network” for

the automotive

industry.

Safety

The previous years saw positive results generated by the safety management

systems, and this trend continued in the 2002/2003 financial year. For example,

the accident frequency rate at the Donawitz location was reduced by 27 %,

and at the Linz site by 18 %. At the Krems site, absences due to occupational

accidents were reduced by 13 % in the past year.

In the Division Railway Systems, successful re-audits of the management

systems of all companies were conducted. In addition, VAE Eisenbahnsysteme

GmbH in Zeltweg received the State Prize for Occupational Safety in May 2002.

Criteria for this award were the systematic integration of protection of employ-

ees into everyday operating procedures, as well as the quality and number of

innovative and sustainable measures that had been implemented.

Research and development

During the 2002/2003 financial year, the expenditures of the voestalpine Group

for Research and Development went up by just over 30 %, from EUR 36 million

to 46 million. On one hand, this is the result of the R&D capacities, which were

obtained together with the newly acquired companies, but on the other, it

reflects the Group’s research expenditure in absolute figures.

The formation of the voestalpine Research Board created the structural prereq-

uisites for improved coordination and increased efficiency of the R&D activities

within the Group. The Research Board bundles the Group-wide research

projects and coordinates operational research and development without

diminishing the corporate autonomy of the individual Group companies.

The highlight of the “Know-How Network voestalpine” during the past financial

year was the “door module project”. In the course of this project, the Divisions

Steel, motion, and Profilform developed jointly and in collaboration with a

renowned German automobile manufacturer a technologically optimized door-

in-white together with an entire door module. For the first time, the voestalpine

Group also took on the engineering, including prototype production. The project

goal was two-fold. On one hand, we wanted to prove the problem-solving

competence and the cross-divisional know-how of our Group. On the other

hand, the intention was to optimize the synergies of the participating sectors to

provide maximum benefit for the customers.

voestalpine Rese-

arch Board coordi-

nates Group-wide

R&D.

Substantial

reduction of

work-related

accidents.


Management Report

Another priority R&D undertaking was a pilot project studying the materials cycle

in automobile production. An EU directive states that by 2015, automobile

manufacturers must recycle at least 85 % of the vehicle weight. The project

developed technical solutions toward using granulate from used tires and plastic

as an energy carrier in the production process. Within the scope of this

project, concrete discussions were conducted with automobile manufacturers.

By generating innovations in the materials cycle, the voestalpine Group is taking

yet another step toward establishing itself as a partner of its customers for the

entire lifetime of an automobile – from engineering to recycling solutions. At

the same time, it is making a significant contribution toward protection of the

environment by reducing the use of non-renewable energy carriers in favor of

recycled material.

For the automotive industry, work on innovations in the “multi-material mix”

sector is being intensified. This is the combination of diverse materials such as

steel, aluminum, and plastic. voestalpine Matzner already developed this kind of

hybrid solution for a body module together with an automobile manufacturer

during the 2002/2003 financial year and produced a prototype.

In addition, there are various projects directed toward better know-how transfer

between business and research. For example, voestalpine Stahl GmbH and

voestalpine Stahl Donawitz GmbH are working together with universities,

research companies, and other corporations in KnetMET, the Competence

Center for Metallurgy and Environmental Process Engineering. Among its

projects, this group is working on optimizing production processes for steel.

Risk Management

Systematic risk management, which the voestalpine Group initiated in the

2000/2001 financial year, is primarily directed toward early recognition and

minimization of risks.

The risk management system of voestalpine contains three levels:

Operational risk management is based on a revolving process, which is under-

gone at least once a year uniformly throughout the Group and which enables

early identification of potential risks. Among others, operational, environmental,

technical, and IT risks are documented. The second level, strategic risk

management, serves to secure strategic forward planning, while the third level,

the “shadow” rating, is used for internal valuation of the corporation as a whole

based on the usual rating rules.

Pilot projects

to improve the

materials cycle.

Materials

combination for

the automotive

industry is a

focal point.

Three levels of

risk management.

32

Management Report

The e-business

projects of

voestalpine

simplify processes

for customers and

guarantee greater

transparency.

For risks, which had been found within the Group in the past, concrete miti-

gation measures were developed and have already been largely implemented;

this has enabled us to reduce risk potential even further. In the past financial

year, risk management was also introduced in the newly acquired fully con-

solidated companies of the voestalpine Group. During the process, no major

risks, which could be construed as endangering the Group’s existence, were

found in these companies.

The risk management system must be seen as an integral part of business

processes and thus, by extension, part of the operational procedures, and it is

being continuously expanded and developed. In the past financial year, risk

surveys were conducted in the larger Group companies together with an insur-

ance consortium, and additional measures were developed jointly with insurers

to minimize possible (fire) risks. Additionally, Group-wide best practice projects

are being carried out, during which experience with regard to cross-company

risks within the individual companies is being documented and joint problem

solutions are being developed. For example, in the past financial year, the guide-

line for protecting know-how, which was created within the scope of the knowl-

edge management project, was integrated into the “LIFE” program. Likewise,

the package of measures directed toward avoiding EDP risks was implemented

in the individual Group companies.

With the new equity capital regulations (“Basle II”), which will become effective in

2005, banks will intensify risk differentiation in the future when extending loans.

Since an existing risk management system is considered to be clear evidence of

responsible risk handling, the importance of our risk management system will

continue to increase.

E-Business

Since April 2002, all of the pilot projects in the sectors Customer Relationship

Management (CRM), Supply Chain Management, and e-procurement have been

running in real-time operation.

This includes the information platform of voestalpine Austria Draht GmbH,

which makes all up-to-the-minute order, inventory, and address data available

online; e-services of voestalpine Krems GmbH, which has made transaction

processing largely electronic – a significant benefit for customers; as well as

Group-wide e-procurement, which currently comprises a material catalog with

more than 300,000 items.

Risk potential

lowered through

concrete

measures.


Management Report

Customers are also increasingly utilizing the order tracking option offered by

voestalpine Stahl GmbH. This service makes it possible to retrieve information

about current orders, their production status, as well as schedules. Should it not

be possible to comply with a delivery date, the system automatically suggests

an alternate date. Moreover, it is possible to use the order tracking system to

schedule and dispatch material for production.

The KundenServiceCenter (Customer Service Center, KSC) is a result of on-

going development of this application. Here, additional order information and

data, such as order confirmations, are made available online. The KSC was

developed as a comprehensive customer portal; some of the services it offers

are document management, tracking complaints, and electronic placement of

follow-up orders.

The VIP tool was developed as a joint project by a renowned German auto-

mobile manufacturer, voestalpine Stahl GmbH, and voestalpine Europlatinen

GmbH, with the purpose of transparent presentation of anticipations and in-

ventory data online. A simple calculation makes it possible to preview inventory

development, and an early warning system signals any impending material

shortages to the users by e-mail. The measures taken can be documented in

and communicated through the system with a memo function.

In the contract logistics sector of Logistik Service GmbH, the shipping software

package “Speedy” is the basis for all future e-business activities. By the end of

the 2003/2004 financial year, a new application for placing shipments online will

be operational, replacing time and cost-intensive communication with logistics

providers by modern online shipment placement.

Continuous Improvement Program

With regard to productivity and overall profitability, the voestalpine Group is

an industry leader. A significant element in this connection is the continuous

optimization of operational processes and the increase of efficiency, while, at the

same time, incorporating the employees who are working in the respective

sectors as much as possible into the procedures.

The Continuous Improvement Program (CIP), which was originally created in

1994/1995 as a one-time initiative prior to the IPO, has been developed further

and, today, it is a permanent part of the Group-wide profit optimization concept.

The annual achievable cost savings are linked to the price-cost scissors effects

and amount to an average of at least 2 % of the total sales revenue.

The Continuous

Improvement

Program enables

cost savings of 2%

of annual sales.

34

Management Report

Within the scope of the CIP, a number of site-specific models have been

developed, which are somewhat different in methodology. In the largest indi-

vidual operational company, voestalpine Stahl GmbH, this initiative is being

implemented under the name “simply better.”

The program was created two years ago and utilizes the substantial cost

savings potential resulting from teamwork at the production sites. Employees

get intensive training before they participate. By the end of the 2002/2003

financial year, 3,000 employees in the production segment (that corresponds

to about half of all employees in voestalpine Stahl GmbH) have already been

trained; by the end of 2003, the training of all employees working in production

will be completed. Simultaneously, a corresponding program is being developed

for white-collar employees.

In the 2002/2003 financial year alone, 838 concrete improvement suggestions

with a savings potential of EUR 4 million have been implemented within the

initial phase of “simply better.” They included 264 “calculable,” that is directly

quantifiable ideas, and the remainder were “non-calculable” improvements,

which related to subjects like safety and health.

Within the scope of the continuous improvement process, the largest training

program (because all employees are participating) in the company’s history was

initiated at the Krems site. Similar ambitious programs are also carried out in the

subsidiaries of voestalpine Krems GmbH.

Major success

for the “simply

better” project.


Management Report

Forecast

The European economy has been on a downward slide for three years in a row,

and there is no imminent sign of recovery. The markets in a number of important

European countries are dominated by political and economic crises, and there-

fore there is little faith that the situation will significantly improve anytime soon.

The same holds true for the voestalpine Group’s key industrial sectors: a further

deterioration of the economic situation appears more likely than a recovery.

Consequently, the European automotive industry expects a further decrease

in production numbers for 2003. The prospects for the construction and

construction supply industries are even bleaker, and even in the previously

booming railway sector, the first effects of the tightened budgets in some

European countries will soon become noticeable.

The fact that for the 2003/2004 financial year, the voestalpine Group still

expects a further, albeit moderate, improvement in sales and results over the

year under review is due to the excellent market position and cost situation in

all sectors of the Group. In the current negative economic environment, the

consistent implementation of cost management measures in the past years and

the concentration on attractive niche market segments give the Group a definite

advantage over its competitors.

36

In October 2002, the Austrian Code of Corporate Governance was published.

This Code provides Austrian corporations with a regulatory framework for

company management and supervision.

The Code’s objective is the responsible management and supervision of com-

panies and groups of companies, aiming at the creation of sustainable and

long-term value. The Code is designed to establish a high degree of transpar-

ency for all company stakeholders.

The Code is based on the provisions of Austrian corporation law, securities

law and capital market law, as well as on the tenets of the OECD Principles of

Corporate Governance.

voestalpine AG has already in the past been largely in compliance with the inter-

nationally recognized Principles of Good Corporate Governance. For example,

voestalpine AG was the first listed Austrian company in which the risk manage-

ment terms set forth in Germany’s KonTraG (law on control and transparency

in business) were implemented group-wide and audited by a certified public

accountant. Due to the high standards of corporate governance already in

place, introduction of the Austrian Code of Corporate Governance will require

only a few adjustments.

The Code achieves validity through voluntary self-regulation by the companies.

The Management Board and Supervisory Board of voestalpine AG have

approved the recognition of the Code of Corporate Governance and begun to

organize the steps necessary for its implementation. The designated outside

monitoring of adherence to the Code will take place for the first time when the

annual statement of accounts is drawn up for the current financial year.

Corporate Governance



In addition to the mandatory “L Rules” (Legal Requirement), the Code will

be observed in accordance with the “C Rules” (Comply or Explain) with the

following restrictions:

– Rule 38: No age limit is defined in the Articles of Incorporation for the no-

mination of members to the Management Board. In the principles for the

nomination of Management Board members, however, the Supervisory Board

has established an age limit of 65 years for the final nomination. The Super-

visory Board may make reasonable exceptions to this principle.

– Rule 42: No strategy committee will be set up by the Supervisory Board.

Issues of corporate strategy will be addressed exclusively in the full session of

the Supervisory Board.

– Rule 49: Company transactions with individual members of the Supervisory

Board or companies with which they are associated shall be entered into on

the basis of general market conditions. Such transactions shall be submitted

to the Supervisory Board for approval and subsequently made public if they

fall under the list of transactions requiring action by the Supervisory Board or if

they do not conform to the conventional standards of the industry.

– Rule 54: The Articles of Incorporation do not specify an age limit for the

nomination of Supervisory Board members for the company.

– Rule 69: Reports on the acquisition and sale of shares by members of the

Management Board will not be announced on the company’s website.

The reports to the Financial Market Supervisory Authority shall be deemed

sufficient.

38

The Share

The price performance of the voestalpine share during the 2002/2003 financial

year was characterized by the downbeat climate on the stock exchanges and

the precarious economic prospects in both the USA and Europe. The share

price moved in accordance with the mostly negative trend – from the high of

EUR 34.45 at the beginning of the year down to EUR 21.80 at the end of the

2002/2003 financial year (April 2002 to March 2003). This puts the voestalpine

share squarely in the trend taken by the stock of European and American indus-

trials, as can be seen from a comparison with the DJ STOXX Index (Europe)

and the DJ Industrial Index (USA). The fact that there is nevertheless a happy

ending is the result of the strong performance of voestalpine share during the

months of April and May 2003. The noticeably greater interest of international

investors coupled with good earnings prospects for the past year, as well

as the sale of the interest in VA Technologie AG (19.05 %) have lead to a sharp

rise in the share price that clearly outperformed the American DJ Industrial

Index and the DJ STOXX Index. As a result of the recent price increases, the

voestalpine share also came closer to the performance of the ATX.

Ownership structure

Following the capital increase in April 2002 and the share price decline during

the second half of 2002, the ownership structure changed somewhat. It was

primarily the international investment funds that did some major reshuffling

of their equity funds, and this resulted in a broader distribution of voestalpine

shares. In general, there was a modest shift of the major groups of shareholders

80

75

70

65

60

85

90

95

100

105

110

April 2002 16 May 2003Changes since end of March 2002 in %

voestalpine AG

Austrian Traded Index (ATX)

voestalpine AG vs. Austrian Trade Index (ATX)Financial year 2002/2003


The Share

from the USA to Austria and Great Britain. Another point to be mentioned in this

connection is the share repurchase program which was initiated in September

2002 and in the course of which 1.18 million shares were repurchased up to

March 2003. This means that the planned total volume of 1.2 million shares was

almost completely utilized. The repurchased shares were primarily used for the

expansion of the employee participation program. For this reason, 990,000

shares from the repurchase program were passed on to the employees’

participation foundation at the repurchase price. As a result, the employees are

now in possession of about 6.4 % of the issued voestalpine shares. Currently,

voestalpine still holds 259,697 shares of its own stock.

Information on the share

Share capital EUR 287,784,423.30 divided

into 39,600,000 non-par value shares

Class of shares

Share price high April 2002 to March 2003 EUR 34.45

Share price low April 2002 to March 2003 EUR 21.80

Share price as of 31 March 2003 EUR 23.00

Market capitalization as of 31 March 2003* EUR 904,826,969

30% Austria

65,3% free-float shares

6,4% ESS*

3% Germany

13% North America

8% GB

4,9% ROW

34,7% ÖIAG

Ownership structureFinancial year 2002/2003

* Employee shareholding scheme

voestalpine AG

DJ STOXX Index

DJ IND. Index

April 2002 16 May 2003Changes since end of March 2002 in %

60

50

70

80

90

100

110

120

voestalpine AG vs. Dow Jones STOXX & Dow Jones Ind. IndexFinancial year 2002/2003

* Basis: Total number of shares minus repurchased shares

40

The Share

Financial year 2002/2003

Earnings per share EUR 1.99

Dividend per share* EUR 1.20

Book value per share EUR 45.40

Distribution ratio % 60

* As proposed to the Annual General Shareholders’ Meeting

Schedule 2003

1 July 2003 Annual General Shareholders’ Meeting

7 July 2003 Ex dividend date

14 July 2003 Dividend payment date

18 August 2003 Letter to shareholders on the first quarter 2003/2004

14 November 2003 Letter to shareholders on the first half of 2003/2004

Information for shareholders

Telephone: +43 (0)732/6585-3152

E-mail: [email protected]

Internet: www.voestalpine.com

Security identification number: 093750

ISIN AT0000937503

Reuters: VAST.VI

Bloomberg: VAST AV

Datastream: O:VAS

Regular analyses on the development of the voestalpine AG share as

viewed by the capital market are prepared by the following institutions:

ABN Amro, London

Bank Austria Creditanstalt, Vienna

BNP Paribas, London

Commerzbank, London

Credit Lyonnais, London

Deutsche Bank, Frankfurt/Vienna

Erste Bank, Vienna

Goldman Sachs, London

HSBC CCF Securities, London

ING BHF-BANK, Frankfurt

JP Morgan, London

Morgan Stanley, London

Raiffeisen Centrobank, Vienna

Société Générale, Paris

UBS Warburg, London


Division Steel

Highlights

– Significant increase in sales and earnings

– With hot-dip galvanizing plant 3, the first major project of

the “Linz 2010” investment program has been completed

– Record steel production at the Linz location with 4.42 million tons

– Continued improvement of the product mix


Contrary to the general economic trend, in 2002, the development of the global

steel economy – both as far as quantities and prices were concerned – took

a very satisfactory direction. For the first time, the worldwide crude steel

production exceeded the 900 million ton mark and, at 902 million tons (this is

an increase of more than 6 % compared to 2001), reached an all-time record.

This growth, however, occurred predominately in Asia and South America.

China increased its crude steel production in 2002 by 20 % to 181.6 million tons,

becoming the world’s largest steel producer and overtaking the European Union,

where – at 158.5 million tons – steel production was sluggish compared to

2001. Now 41 % of the world steel production has been captured by producers

from the Far East, 19 % is claimed by the European Union, and 11 % is held by

the USA.

In the first months of 2003, growth in world steel production has continued.

In the first quarter of the calendar year, the crude steel quantity produced world-

wide rose, compared to the same period in 2002, by 8.8 % from 208.5 million to

226.8 million tons. This surge is also due to the disproportionate growth in

China.The above average increases in the Far East, as compared to the more or

less stagnant production in the European Union, mirror the much stronger

economic growth in Asia with its corresponding rise in investment activity

on one hand, and, on the other, the structural streamlining in the European steel

industry together with the reduction of overcapacities. As far as prices are

concerned, the trend was considerably more auspicious than most recently.

For the most part, the increases resulted from adjustments of inventories on one

hand, and, on the other, from the considerable discipline shown by European

steel producers as far as quantities were concerned, in favor of a stabilization of

the market price.

World market share/Crude steel production2002

19% EU

18% China

5% South Korea

4% South America

4% Africa - Middle East - Oceania

11% USA6% Other Europe

12% C.I.S.

4% Other North andCentral America

12% Japan

6% Other Asia

42

Division Steel

Business performance

An overview of the key figures

In the 2002/2003 financial year, the Division Steel was able to realize a substantial

increase in sales and a considerable improvement of the operating results

(EBITDA and EBIT). Sales increased by 9.3% from EUR 2,001.4 million to EUR

2,188.5 million. At EUR 262.1 million, the EBITDA was 7.6% above last year’s

figure of EUR 243.5 million. EBIT rose from EUR 101.5 million to EUR 116.1 mil-

lion. This corresponds to an increase in the operating result by 14.4% as compa-

red to the previous financial year. All the main operative companies of the Division

Steel posted positive results. As of the end of the 2002/2003 financial year, there

were 9,342 employees, an increase of 110 persons over last year’s number. The

crude steel production at the Linz site rose from 4.12 to just over 4.4 million tons,

thus achieving a new all-time record. This resulted partly from advance production

in connection with the reconditioning and expansion of blast furnace A, which

is planned for the 2004 calendar year. Including the quantity produced at the

Donawitz location of 1.3 million tons, crude steel production of the voestalpine

Group in the 2002/2003 financial year rose from 5.4 to just over 5.7 million tons.

Business performance in detail

At the beginning of the 2002 calendar year, steel prices hit a low. At this time,

they were at about 5 % (for cold-rolled steel strips even more significantly) under

the previous all-time low in 2000. Subsequently, the revenues rose in several

phases up to the end of the first calendar quarter of 2003, so that, at the end of

the 2002/2003 financial year, the price levels for flat products in the Division Steel

were about 2.6 % higher than those at the beginning of the previous year. The

price trends were, however, somewhat more problematical for foundry products

and in the steel trade, where the earnings and/or the margins declined sharply.

Key figures

2002/2003 2001/2002

Sales 2,188.5 2,001.4

EBITDA 262.1 243.5

EBITDA margin (in %) 12.0% 12.2%

EBIT 116.1 101.5

EBIT margin (in %) 5.3% 5.1%

Employees (not including apprentices) 9,342 9,232

Division Steel in EUR million

Increase in sales

of just above

10% and a clear

increase in the

operating result.

After the low point

in early 2002, steel

prices began to

recover.

Markets of the Division SteelFinancial year 2002/2003 in % of sales


36% Austria

11% Other EU countries

22% Germany

13 % Other European countries

15% Italy


Division Steel

As had already been the case in previous years, the Division Steel benefited

from largely longer-term supply contracts. Contracts like these mitigate cyclical

declines in price but, as a consequence, price increases may become effective

with a delay. For example, deliveries for the automotive industry are made

exclusively on the basis of longer-term delivery contracts, and for the household

appliance industry, this is largely the case as well.

Our customer base was an additional factor that contributed to the positive busi-

ness performance. Especially for the main divisional company, voestalpine Stahl

GmbH, which contributes about 70 % of the division’s sales, the main customers

from the automotive and household appliance industries do most of their busi-

ness in the premium segment, which is less dependent on the general state

of the economy. The development of this customer base during the previous

financial year was stable (automotive industry) or reflected the cyclical trend only

moderately (household appliance industry). On the other hand, the building and

building supply industries were strongly influenced by the cyclical trend.

Furthermore, particularly in difficult phases of the economic cycle, it was obvious

that the strategy of moving toward high-grade specialized products was

successful, since these are significantly less affected by cyclical fluctuations

than commodities.

As regards geographical distribution, just over one third of the division’s sales in

the 2002/2003 financial year was accounted for by Austria, and around half was

generated by customers in the countries of the EU, in particular Germany and

Italy.

The business performance of the individual companies of the Division Steel can

be summarized as follows:

voestalpine Stahl GmbH: With an 8.7 % increase in sales, from EUR 1,421.0

million to EUR 1,544.7 million, the main divisional company was able to improve

its operating result significantly compared to the previous year. Compared to the

previous year, profits were up. Starting with the end of the first business quarter

of 2002/2003, it was possible to implement price increases. Overall, the profits

per ton for the entire financial year were on average 2.6 % above those of the

previous year. With the higher sales, this made the considerable increase in the

operating result of about 55 % possible. The shipped quantity of flat products

was boosted by 6.1 % from 3.76 to 3.99 million tons. The reduction in the

number of employees from 6,605 to 6,335 was the result of two organizational

measures. On one hand, 290 employees of voestalpine Stahl GmbH were

Long-term

contracts and an

improved product

mix promote a

favorable business

performance.

Stable and positive

development

regarding premium

customers.

Customers of theDivision SteelFinancial year 2002/2003 in % of sales

11% Household appliance industry

26% Automotive industry*

20% Other

19% Steel and machine construction

6% Oil and energy industries

18% Building supply industry

*including supply industry

44

Division Steel

Stahl Service

Center Group

boosts sales

by 28%.

Gießerei Group:

decline in the

energy sector,

growth in the

automotive

industry.

merged into Logistik Service GmbH. On the other hand, those employees who

had been working in the IT sector were merged into voestalpine Informations-

technologie GmbH, which was established effective 1 January 2003 as a 100 %

subsidiary of voestalpine AG and which took over all IT-related activities of the

Group locations at Linz, Krems, Donawitz, and Bruck.

voestalpine Grobblech GmbH & Co KG: The first nine months of the

2002/2003 financial year were characterized by lackluster demand due to the

weak economy. In addition, the start-up phase following the major modernization

of the plants took longer than planned, leading to declines in production

numbers. During the last quarter of the financial year, these difficulties were

remedied, and the demand situation also improved. For the 2002/2003 financial

year, voestalpine Grobblech GmbH & Co KG posted sales which sank from

EUR 212.2 million to 193.7 million, while the company’s result remained positive.

voestalpine Gießerei Group: Besides the generally sluggish demand, the

weakness of the energy sector, the most important customer group in the heavy

forging segment, particulary affected voestalpine Gießerei Linz GmbH. In the

past few years, the company had specialized in this sector, and in the 2002/2003

financial year, it was affected by the cancellation and/or deferment of orders. The

trend in the non-ferrous metal forging sector ran counter to this development.

Here, the supply quantities rose significantly, and the prices remained stable

(focus: automotive industry). The subsidiary voestalpine Gießerei Traisen GmbH

was able to partially compensate for the slide in prices for steel forging products

by increasing quantities in other product segments and successfully maintained

sales at a stable level. In the 2002/2003 financial year, the Gießerei Group posted

total sales of EUR 85.8 million, compared to EUR 103.3 million in the previous

year, and a positive result.

voestalpine Schmiede GmbH: Although the performance during the first

quarter of the financial year was still satisfactory, there was a significant decline

in orders in the following period in the engine/compressor sector, with corre-

sponding reduced sales of crankshafts and con rods. At the beginning of the

2003 calendar year, the market situation returned to normal, however, the price

levels remained subdued. Thus, compared to the previous year, total sales

declined from EUR 26.2 million to 19.1 million.

voestalpine Stahl Service Center Group: Despite the difficult general econom-

ic environment, it was possible to considerably increase both sales quantities and

sales revenues in the 2002/2003 financial year. The main reasons for that were

the satisfactory utilization levels of the main customers and continuing price

voestalpine

Schmiede GmbH

affected by a

decline in orders.

Slight decline

in sales for

voestalpine

Grobblech

GmbH & Co KG.


Division Steel

increases. Sales of the Stahl Service Center Group rose by 28.3 % from EUR

199.5 million to EUR 255.1 million, and the sales quantity reached a new all-time

record with 540,000 tons.

voestalpine Stahlhandel Group: The 2002/2003 financial year was character-

ized by cutthroat competition and a resulting decline in the profit margins.

As a reaction to the changed market conditions, a reengineering concept was

implemented and the storage facility in Vienna closed. Both measures will not,

however, show any affects until the current financial year 2003/2004. Additionally,

the construction industry sector was divested as of 1 April 2003 and merged with

the subsidiary Neptun Stahlhandel. Based on the overall positive development of

the subsidiaries, at EUR 239.3 million, the sales of the Group were just slightly

under the previous year’s figure of EUR 245.8 million.

Logistik Service GmbH: Logistik Service GmbH, which was established on

1 April 2002, experienced considerable growth in the 2002/2003 financial year.

The subsidiary Cargo Service GmbH, which was already carrying out railway

transports of lime for voestalpine Stahl GmbH, took over ore transport from

Eisenerz (Styria) to Linz in January 2003. Business with third-party customers

was also successful, and it was possible to expand it to 26 % of the total

sales revenue. Compared to the previous year, sales, together with a stable

positive result, increased by 15 % from EUR 58.5 million to 67.5 million. As of

the beginning of the 2003/2004 financial year, the company has also taken over

the logistics and transport activities of voestalpine Stahlhandel GmbH. This

corresponds to additional sales of about EUR 13 million.

voestalpine Mechatronics GmbH: This company, of which voestalpine Stahl

GmbH holds a share of 58 %, increased its sales from EUR 10.2 million to

11.7 million and thus shows clearly positive results.

Development of the product mix

In the 2002/2003 financial year, the product mix continued to be improved

toward galvanized and organically coated products as well as high grade steels.

New materials concepts for a number of high-quality steel grades have been

developed and realized. As part of the strategy of the Division Steel to expand

its leading position in the European steel industry as far as both quality and

technology are concerned, the “Linz 2010” investment program is of central

importance, since it opens up new possibilities both in the field of metallurgy and

in the rolling and processing sectors.

Sales growth

for voestalpine

Mechatronics

GmbH.

Difficult market

environment

for voestalpine

Stahlhandel Group.

Logistik Service

GmbH continues

to experience

strong growth.

Investment pro-

gram “Linz 2010”

takes the cus-

tomers’ demand

into consideration.

Division Steel

Strategy

Organically coated material is the market segment that is experiencing the

strongest growth in the steel industry. According to the forecasts, consumption

will rise from 3.8 million tons (1999) to around 7 million tons (2010).

With the currently existing capacities, the Division Steel can no longer meet

the rising demand of its most important customers for specially treated and/or

coated plates. The demand for these products results from more stringent

requirements regarding corrosion protection on one hand and the planned

introduction of pre-painted sheets in the automotive industry on the other. One of

the ways in which voestalpine Stahl GmbH is participating in this trend is through

its – partly exclusive – research and development partnerships with renowned

customers from the automotive industry.

With investments of around EUR 1 billion by the middle of this decade, the Linz

site will thus – in line with this development – become one of the leading steel

competence centers in Europe focused on the automotive industry.

The main investments in the processing sector are the new construction of the

hot-dip galvanizing plant 3 as well as a second coil coating plant. The new hot-

dip galvanizing plant, which represents an investment of about EUR 127 million,

has already begun its pilot operation in March 2003, and the coil coating plant 2

will commence operations in about a year. The investment volume for these

projects is about EUR 54 million. Also in 2004, the new continuous casting

plant 6 will be completed.

In order to provide sufficient capacity for the attached processing plants on a

long-term basis, blast furnace A will be reconditioned and expanded in the fall of

2004. This investment, which is about EUR 180 million, will subsequently also

enable the increase of the crude steel capacity at the Linz location by about

25 %.

Additional measures within the scope of the “Linz 2010” program relate to energy

supply and infrastructure.

46


Division Railway Systems

Highlights

– New sales and earnings record

– Sales and strategy target for 2005/2006 already reached

– Full acquisition of the VAE Group and takeover of 70 %

of voestalpine Railpro B.V.

– Numerous international orders for rails, switches, services,

and project coordination.


Railway activities (rails, switches, logistics/services)

During the 2002/2003 financial year, the market environment for those compa-

nies of the division, which are active in the railway sector (voestalpine Schienen

GmbH, TSTG Schienen Technik GmbH, VAE Group, voestalpine Klöckner

Bahntechnik GmbH, and voestalpine Railpro B.V.), was favorable – largely des-

pite the development of the economy in general. With few exceptions, the

Western European market is characterized by extensive activities in the sector

of maintenance and renewal of the railway infrastructure. The reasons for this

are, in particular, back-log demand for already existing rail networks of various

national railways (for example in Germany and the Netherlands), as well as

partially outdated rail networks (for instance in Great Britain). In North America,

however, sustained economic stagnation has been having a negative effect on

the freight train sector. Customers in this sector have been noticeably reticent in

making business investments. The mass transit sector continues to experience

growth. In the markets in other parts of the world (Australia, Far East, South

Africa, and South America), numerous attractive railway construction projects

in both the high-speed and the municipal sector are being planned or are

already being realized.

The expected increase of railway traffic in both the passenger and freight sector

as a result of the expansion of the European Union as well as the EU liberali-

zation and interoperability regulations will intensify these activities even further.

In addition, the planned expansion of the main railroads and key corridors of

Europe will lead to new construction in both the normal and high-speed sectors

in Western Europe (Germany, Italy, Spain, Switzerland, and the Netherlands), as

well as in the countries of Central Europe. Despite the funds made available by

the European Union, the realization of the expansion projects in the countries of

Central Europe is being delayed because of the required national funds (which,

in some cases, are just not in the national budgets).

Growth potential

for the Division

Railway Systems

through invest-

ments in rail

infrastructure.

67% EU

13% Central Europe

Markets of the Division Railway SystemsFinancial year 2002/2003 in % of sales

*including supply industry


10% North America

48


The municipal mass transit operations in all of Europe are still feeling the effect

of cuts in municipal budgets. Thus, observed as a whole from the current van-

tage point, the economy of this industry in the most important sales market of

Europe can be expected to remain stable – that means, relatively independent

of the general economic environment. This in turn results in growth possibilities

for the railway activities of the voestalpine Division Railway Systems – moderate

perhaps, but still existing, when compared to other industries.

Industrial Partnerships

In contrast to this, the companies of the Industrial Partnerships sector (voestalpine

Austria Draht GmbH, voestalpine Tubulars GmbH & Co KG, and voestalpine

Stahl Donawitz GmbH) were confronted not just by a Europe-wide but a world-

wide weak economic environment. Employing a consistent niche strategy, the

processing segment of the Industrial Partnerships sector (voestalpine Austria

Draht GmbH and voestalpine Tubulars GmbH & Co KG) was able to success-

fully avoid the effects of the weak economy. The financial year was more difficult

for voestalpine Stahl Donawitz GmbH. On one hand, the results were negatively

affected by the price increases for raw materials (coke, ores, scrap metal, and

alloys), which went against the general economic trend, and on the other hand,

by the new installation of blast furnace 4. It was possible to partially compen-

sate these additional expenses by means of rationalization measures.



Regarding sales and earnings (EBITDA and EBIT), the Division Railway Systems

was able to surpass not only the originally projected figures; in the financial year

2002/2003, the previous year’s figures, which had already been a record, were

again exceeded. The gains in sales and earnings were realized through both

acquisitions and through endogenous growth in the existing sectors.

Sales increased by 40 % from EUR 891.5 million to EUR 1,247.7 million. This

means that the Division Railway Systems has already reached the sales target of

about EUR 1.3 billion as of the end of the financial year 2002/2003, which

was originally not projected until 2005/2006. The EBITDA increased by 26.3 %

from EUR 105.5 million to EUR 133.2 million. The EBIT amounted to EUR 64.1

million, which put it 38.4 % above the previous year’s figure of EUR 46.3 million.

The number of employees increased – mainly attributable to acquisitions – by

36.5 % from 5,030 to 6,865 employees.

Employing a

consistent niche

strategy against

a weak economy.

New record figures

for sales and

earnings through

acquisitions and

organic growth.



Key figures

Sales

EBITDA

EBITDA margin (in %)

EBIT

EBIT margin (in %)

Employees (not including apprentices)

Division Railway Systems in EUR million

2001/2002

891.5

105.5

11.8%

46.3

5.2%

5,030

2002/2003

1,247.7

133.2

10.7%

64.1

5.1%

6,865

The capacity of all operational sectors of the Division Railway Systems (with the

exception of voestalpine Stahl Donawitz GmbH because of the reconditioning

of the blast furnace) was fully utilized, and they were all able to further improve

their productivity figures. The Continuous Improvement Programs – CIPs, which

were implemented in a collaborative effort between employees and manage-

ment, contributed significantly to the rise in productivity.


The Switch Technology sector (VAE Group) had its best year in its 150-year

history. The evolution of the high-speed sector was particularly successful with

extensive shipments of high-speed switch systems to Germany, Spain, and the

Netherlands, as well as the awarding of a high-prestige contract for the delivery

of switch points for the new high-speed track in Taiwan. The track Taipei-

Koashiung is currently the largest single railway construction project in the

world, and it has a high degree of effectiveness as a reference for future pro-

jects. VAE also received new orders in the local mass transit sector, for instance

for German tram depots, as well as for the metros in Athens and Singapore.

In the Railway Technology sector (voestalpine Schienen GmbH, Donawitz, and

TSTG Schienen Technik GmbH, Duisburg) business performance in the Europe-

an core markets was very gratifying. The most important projects of voestalpine

in this sector were the new construction of the tracks Cologne-Rhein-Main

(Germany), Rome-Naples (Italy) and Corridor IV (Romania). In the high-quality

overseas market segment (for instance HSH rails and special profiles, as well as

metro and high-speed projects in several Asian metropolitan areas), we won

The most success-

ful year in the

history of VAE.

Gratifying develop-

ment in the Euro-

pean core markets

and numerous

international rail-

way construction

projects.

50


new contracts and finished existing ones. In the Division Railway Systems itself,

we were able to successfully integrate TSTG Schienen Technik GmbH (formerly

Thyssen Schienen Technik GmbH), which had been acquired in August 2001,

and were able to position it as the Division Railway Systems’ second leading rail

production site in Europe.

In numerous projects, the Logistics/Services sector (voestalpine Klöckner

Bahntechnik GmbH and voestalpine Railpro B.V.) was able to demonstrate its

competence in providing complete systems solutions (all requirements for rail

systems and rail connections) as well as the necessary project management in

addition to its sales channel and logistics functions. Orders for major construc-

tion projects – such as the Gotthard base tunnel (rail network for construction

purposes) being built by the Swiss Federal Railways and the German Federal

Railways’ new construction project Nuremberg-Ingolstadt – were acquired, and

the comprehensive supply for the Dutch reconstruction and modernization pro-

jects was secured.

In the Industrial Partnerships sector, the wire rod and wire processing segments

of voestalpine Austria Draht GmbH have developed successfully, in particular by

entering new quality segments, such as ball bearing steel, as well as initiating

collaborative projects with customers (with the purpose of reducing the process

steps at the customers’ premises). The rationalization project “Vision 2003

plus,” which was implemented jointly with a consultant at both locations of

voestalpine Austria Draht GmbH in Bruck and Donawitz made a significant

contribution to the sustained increase of the company’s profitability.

By employing a consistent niche strategy and through long-term delivery con-

tracts, voestalpine Tubulars GmbH & Co KG was able to avoid the weak eco-

nomic situation in the oil and natural gas industry. Diversification with regard to

markets and customers, which it has already been practicing for several years,

significantly contributed to this development. With 1.3 million tons, voestalpine

Stahl DonawitzGmbH achieved record production results in its state-of-the-art

LD compact steel plant and thus secured the complete supply of all rolling mills

of the Division and of particular external customers with high-grade steel

pre-materials.

The Logistics/

Services sector

demonstrates

competence in

complete systems

solutions.



Development of the product and service mix

During the 2002/2003 financial year, with the three sectors rails, switches, and

logistics & services, 66.5 % of all divisional sales resulted from railway activities

(53 % in the previous year). The areas, where the increase was especially notice-

able included, in particular, the special products ultra-long and head special

hardened rails, as well as several special profiles and special products for

switches and turnout systems.

In the switch technology sector, VAE GmbH was able to successfully establish

the “HYTRONICS” product range with the Austrian Federal Railways; this was

an important step into a new, innovative product and logistics segment, which

meant that immediate deliveries of “installation-ready switches (turnout

systems)” became possible. Further market penetration in Europe with ultra-

long rails (up to 120 meters long, non-welded joints) was successful due to the

utilization of just-in-time logistics, which had been further developed, as well as

extended logistics and service offerings through rail unloading at the construc-

tion site with the company’s own unloading system “RAILPUTLER”. For three

sections of the new construction of the Cologne-Rhein-Main line, voestalpine

Klöckner Bahntechnik GmbH (logistics/services sector), together with partner

enterprises, coordinated, for the first time, the entire process chain of rail and

switch logistics, system installation, as well as the completion of the superstruc-

ture portion and the final acceptance of the high-speed track. In the Industrial

Partnerships sector, voestalpine Austria Draht GmbH was able to accomplish

yet another step in the further development of its product portfolio with in-line

production of surface-coated cold extruded wire without pickling treatment.

Customers of the Division Railway SystemsFinancial year 2002/2003 in % of sales


64% Railways and municipaltransport operators

3% Other

11% Oil and naturalgas industries

4% Construction industry

9% Automobile industry

Products of the Division Railway SystemsFinancial year 2002/2003 in % of sales

15% Wire rod

7% Semi-finished products

9% Seamless tubes

2% Other

67% Railway products (rails, switches, services)

Operative companies of the Division Railway Systems

voestalpine Schienen

TSTG Schienen Technik GmbH

VAE-Group

voestalpine Railpro B.V.

voestalpine Klöckner Bahntechnik GmbH

voestalpine Stahl Donawitz

voestalpine Tubulars

voestalpine Austria Draht

2001/2002

Sales (in EUR million)

207.6

74.5

320.9

-

67.9

321.5

259.8

177.2

1

3

3

2002/2003

Sales (in EUR million)

227.7

135.0

394.5

119.2

68.3

339.7

229.4

188.0

2

4

1 Abbreviated financial year2 For details regarding the consolidation of VAE in the 2002/2003 financial year,

please see the chapter “Acquisitions” on page 53.3 In the 2001/2002 balance sheet, 50% were pro rata consolidated,

in accordance with the shareholding ratio.4 In the 2002/2003 balance sheet, 50% were pro rata consolidated,

in accordance with the shareholding ratio.

52


The division

was expanded

to become a

complete systems

provider for the

rail track system.

The future focal

point will be coun-

try-specific further

development.

The continuous further development of the product portfolio in the three

segments of oil field pipes, the normal production program (boiler tubes and

tubes for the automobile industry), as well as green pipes (input pipes for drill

pipes) in close collaboration with customers was the focal point of development

activities of voestalpine Tubulars GmbH & Co KG.

Strategy

The voestalpine Division Railway Systems has already reached those sales and

strategy targets in the 2002/2003 financial year, which had been originally pro-

jected for 2005/2006. Achieving the sales target of about EUR 1.3 billion was

not the only result of the complete takeover of the VAE Group, which took place

in the 2002/2003 financial year, and the acquisition of a 70 % majority of

voestalpine Railpro B.V. These acquisitions also rounded out the product,

service, and logistics offerings so that no other company of the industry can be

compared to the Division Railway Systems, which has the unique position of

being able to be a complete systems provider for “steel tracks”.

For the 2003/2004 financial year, we are planning to continue to implement

this overall strategy in the railway activities sector by developing the product,

service, and logistics portfolio for rail track systems country-specifically and

intend to include cooperation partners in this process. The goal is to develop

the maximum potential for customer benefits. Additionally, we will continue with

the integration process of the companies which were acquired in the last

two years.

In the processing sector of the Industrial Partnerships sector, voestalpine

Austria Draht GmbH and voestalpine Tubulars GmbH & Co KG intend to

continue with the consistent implementation of their niche strategies.

For voestalpine Stahl Donawitz GmbH, increased external marketing of semi-

finished products – in addition to the full supply of the Division’s own rolling mills

– should make it possible to fully utilize the production capacity.



Acquisitions

In the 2002/2003 financial year, the following corporations and/or interests in

corporations were acquired and consolidated as follows:

Wisselbouw Nederland B.V. (Netherlands)

Switch (turnout systems) construction

Acquired as of 30 June 2002

Additional sales: EUR 14.4 million

Consolidation date: 1 January 2002 (retroactively)

Type of consolidation: Full consolidation (100 %)

Number of consolidated months: 15

VAE Group (Austria)

Switch construction

Purchase of the interest previously held by Vossloh AG as of 18 January 2003


Consolidation date: 1 October 2002


Number of consolidated months: Partial acquisition as of 30 September

2002 and/or 18 January 2003, as well

as payout of the minority shareholders

in January 2003. Therefore 50 % consoli-

dation for 6 months (from 1 January to

30 June 2002), 100 % from 1 July to

31 December 2002, and (to adjust the

business year) 100 % from 1 January to

March 2003.

voestalpine Railpro B.V. (Netherlands)

Railway infrastructure

Acquisition of 70 % as of 18 July 2002


Consolidation date: 16 June 2002


Number of consolidated months: 9.5

54

division motion

Highlights

– Significant increase in sales and earnings through integration

and first consolidation of the newly acquired companies

– 56 % sales growth and record results for

voestalpine Europlatinen GmbH & Co KG

– From the concept to series production: division motion has established

itself as a complete supplier in the automotive body-in-white sector.

– 95 % of the staff employed outside of Austria


In general, the worldwide automotive economy was stable in 2002, despite reces-

sive economic tendencies in the US and Western Europe. The dynamic cyclical

trends in the Asian growth markets held the demand for automobiles at an overall

high level, even though the regional crises in some Eastern European countries and

in South America also negatively influenced global automobile sales.

In the last year, however, the environment deteriorated markedly in Western

Europe, the chief market of voestalpine division motion, following the record

production in 2001. The ongoing economic stagnation within the European Union

and a weak propensity to invest resulted in weaker trends than last year both in

the registration of new passenger cars and the market for commercial vehicles.

The production of European automobile companies declined for the first time

since 1996 as a reaction to the fallen demand in the European Union. But the key

customers of voestalpine – well-known premium manufacturers – were able to

successfully hold their position despite the most dire market conditions.

A continuing trend toward slightly falling production figures is forecast for the auto-

motive industry in 2003. The prognosis for the automotive industry beginning in

2004 is for worldwide growth, including the markets in Europe.



Despite the difficult market environment, the automotive sector of the voestalpine

Group continued its course of profitable growth in the past financial year. The

division motion succeeded in positioning itself convincingly for the first time in the

body-in-white supplier market.

Markets of the division motion

Financial year 2002/2003 in % of sales


50 % Germany

14% Rest of EC

7% France

11% USA

13% Great Britain


division motion

The trend in sales and earnings reflects the dynamics of the growth strategy of

the division – which is primarily based on acquistions – in the past two years.

Sales were raised from EUR 173.0 million in the 2001/2002 financial year to

EUR 757.8 million, an over fourfold increase. This increase is primarily attributable

to the first consolidation of the companies Polynorm N.V. and Elmsteel Ltd.,

acquired at the end of 2001, and the voestalpine Matzner Group, acquired

in 2002. It must be kept in mind, however, that for Polynorm and Elmsteel five

quarters were consolidated in the annual statement for each of the companies

due to the changeover to the voestalpine Group’s financial year (1 April to 31

March). The resulting increase in sales amounted to some EUR 140 million.

A smaller part of the growth in sales was also attained through endogenous

growth, particularly that of the voestalpine Europlatinen Group, which managed to

increase its sales by more than fifty percent over last year.

The earnings indicators EBITDA and EBIT were also significantly improved. EBITDA

rose from EUR 14.9 million to EUR 79.6 million in the 2002/2003 financial year. This

raised the EBITDA margin from 8.6% to 10.5%. The EBIT, still somewhat negative

last year with EUR -0.6 million, rose to EUR 29.2 million. Consequently, the EBIT

margin increased from -0.4% in the prior financial year to 3.8% in the year under

review. Thus, for the first time, the division motion made a decisive contribution

to the operating results of the voestalpine Group. The number of employees in-

creased, as a result of acquisitions, from 696 to 4,062, around 95% of which are

employed outside of Austria.


Comprehensive integrative measures were implemented in the areas of personnel

development, sales organization, research and development, management systems

and information management, significantly increasing the efficiency of the division,

which was established not even two years ago. An interdivisional cost-reduction

program implemented at the same time will bring about some EUR 25 million in

cumulative savings in the current and the following financial year.

Key figures

2002/2003 2001/2002

Sales 757.8 173.0

EBITDA 79.6 14.9

EBITDA margin (in %) 10.5% 8.6%

EBIT 29.2 -0.6

EBIT margin (in %) 3.8% -0.4%

Employees (not including apprentices) 4,062 696

division motion in EUR million

First consolidation

of the acquisitions

and endogenous

growth result in

significant increa-

ses in sales and

earnings.

56

division motion

The business performance of the individual companies was as follows:

Polynorm Group: The core business of Polynorm is the manufacture of body-in-

white components and modules as well as toolmaking. As a result of high manu-

facturing flexibility, good technical positioning and its broad customer portfolio,

Polynorm was able to obtain sales of EUR 473.7 million with satisfying results in the

past financial year, despite the difficult market situation. One of the world’s most

modern press mills for large exterior parts was opened in June of 2002 at the

Schwäbisch Gmünd site (Germany). In the course of the successful initial stage

of operation, the partnership with Southern German automobile manufacturers in

particular was intensified. The competence in processing aluminum was expanded

at the same time. Polynorm was responsible for the manufacture of all parts of the

aluminum body and for the successful preparation and launch of series production

of the new Jaguar XJ at the Castle Bromwich site (Great Britain). The stability of

the Polynorm Group is currently being borne primarily by its renowned individual

companies in the Netherlands and in Germany; the more recently established sites

in the USA and Great Britain will contribute significantly to profitable growth in the

future once the set-up and integration process has been concluded.

voestalpine Europlatinen Group: The trend towards laser-welded blanks has

continued unabated due to the demand for greater safety and the constant striving

to reduce costs and weight in automotive bodies. With voestalpine Europlatinen

GmbH & Co KG and its 92% share in Euroweld s.r.l. Turin, the division motion

has two companies which are active in the production of custom-welded blanks

and which together rank among the world’s largest suppliers in this sector. Due pri-

marily to the combination of a satisfactory order situation and a concurrent increase

in productivity and reduction of rejects in production, voestalpine Europlatinen

GmbH & Co KG attained the best results in the company’s history in the 2002/2003

financial year. Sales rose from EUR 49.4 million to EUR 77.2 million. This represents

an increase of 56.3% over the previous year. Euroweld s.r.l. also managed to

increase sales from EUR 25.4 million in the prior financial year to EUR 27.8 million

(+9.4%), despite the difficult market environment, especially in Italy.

voestalpine Rotec Group: In the sector of precision tubing, voestalpine Rotec

GmbH and its subsidiary Elmsteel Ltd., acquired in December 2001, rank among

the leading European suppliers to the automotive industry. The sales of the British

precision tube manufacturer were consolidated for the first time in the 2002/2003

financial year. As a result of the successful integration of the company, the Group

was able to increase sales in the year under review by 64.2%, from EUR 98.13

million to EUR 161.1 million. In addition, the Group managed to continue its

strategic course towards further processing of precision tubing and to position

itself more strongly as a component supplier.

Polynorm Group:

positive business

performance and

expansion of inter-

national presence.

The best year

on record for the

voestalpine Euro-

platinen Group –

56% increase in

sales.

Rotec Group: 64%

increase in sales

through integration

of Elmsteel.


division motion

voestalpine Matzner Group: The latest acquisition added an initial EUR 18,1 mil-

lion to the total sales of the division motion in the 2002/2003 financial year.

The voestalpine Matzner Group – headquartered in Bissendorf near Osnabrück

(Germany) and comprising the divisions of Product Development, Toolmaking and

Prototype Construction – is an established company in the automotive supply

industry, performing important tasks within the division motion: On the one hand,

voestalpine Matzner has a comprehensive function with regard to the competencies

of the division: Within a Simultaneous Engineering Process, the experience gathered

during materials development, toolmaking, forming, quality assurance and series

production of the individual division companies is taken directly into account in pro-

duct development for our automotive customers. On the other hand, voestalpine

Matzner is active as an engine of innovation. In order to fulfill this role, trends and

customer requirements must be quickly recognized, and corresponding solutions

must be developed. Forward-looking concepts are developed and realized as

product developments through close collaboration in seven offices at the sites of

the key customers.

Turinauto S.p.A. (33.3% shareholding): The company Turinauto, which came into

being in 1999/2000 through outsourcing measures by the Fiat Group, specializes

in the manufacture of parts and body-in-white components, as well as in body-

in-white assembly. In the year under review, a mostly stable business performance

has been achieved through the establishment of strategic partnerships to other

European automobile companies, despite the difficult situation of the Italian auto-

motive industry.

Product development

The achievement of objectives in the division motion – materials know-how combi-

ned with processing and engineering competence – was supported by intensive

innovation and integration management. For the first time, products were success-

fully developed with the participation of all companies of the division as well as of

other divisions of the voestalpine Group, demonstrating the benefit to the customer

that can be achieved through the bundled competence of the motion network. The

division motion acknowledged the significance of weight reduction in automobile

construction through the following measures during the 2002/2003 financial year:

– Expansion of skills in the processing of high-tensile steels through the increased

combination of material and processing competence within the voestalpine

Group

– Targeted expansion of the scope of competency in the sector of aluminum and

plastics processing

– Development of a special door-in-white/door module for passenger vehicles with

advantages regarding weight, strength/durability and costs as compared to con-

ventional door concepts (“door module project”).

voestalpine

Matzner Group:

engineering as a

comprehensive

function.

Turinauto is

building strategic

partnerships.

Innovative product

developments

as part of the

voestalpine com-

petency network.

58

division motion

Acquisitions

In the 2002/2003 financial year, the following corporations and/or interests in

corporations were acquired and consolidated as follows:

voestalpine Matzner GmbH (Germany)

Engineering

Acquired as of 31 May 2002


Consolidation date: 1 October 2002 (retroactively)

Type of consolidation: Full consolidation (100%)

Number of consolidated months: 6

Euroweld s.r.l. (Italy)

Increase of voestalpine Europlatinen GmbH’s shareholding in Euroweld from 67%

to 92% as of 12 February 2003 (full consolidation already effected at a prior point

in time).

Strategy

Following the acquisition of the engineering company voestalpine Matzner GmbH,

the division motion – as a supplier of parts, components and modules for bodies-in-

white – is now poised to develop entire bodies for automotive manufacturers and to

produce the advance prototypes necessary. The division motion can thereby provide

all elements of the body-in-white from one source, from the concept to prototype

construction and series production.

In implementing the overall strategy toward becoming a complete provider for

bodies-in-white, the focus in the 2002/2003 financial year was on the following

points:

- Light-weight body construction with the highest demands on quality

- Design to cost: Product development in consideration of optimized coordination

of technical product characteristics and production costs

- Setup of an efficient supply chain management between the division motion

and the Division Steel on the one hand and the end customers on the other.

This strategy is being further pursued in the 2003/2004 financial year while the

integration and interlinking of the division companies is intensified. In addition, further

expansion of competence is planned for the assembly sector.

division motion

as a complete

supplier for

automotive

body-in-white.


Highlights

– High profitability achieved again despite modest sales

decline due to negative economic environment

– Continued improvement of the product mix with movement

toward highly value-added segments

– Asset deal in the cold profile segment strengthens strategic

position on the German market

– New business unit “lightweight construction” accelerates

cooperation with automotive industry


During the past financial year, the economic development in the geographical

core markets of the Division Profilform (those are, in particular, Germany, Great

Britain, the USA, and Austria) as well as in the key segments (construction, build-

ing supply, and commercial vehicle industry) was characterized by difficulties.

Because of the weak economy and the concurrent price increase for pre-

materials, whose cycle did not follow the economic development for the first

time, it was impossible for the steel processing industry to pass on all price

increases to the customers.

The sales structure generally corresponds to the size of the individual compa-

nies and/or their local markets and also mirrors the internationalization of the

division during the past few years. In accordance with that development, 88 %

of sales were made outside of Austria.



In the 2002/2003 financial year, due to the negative economic situation, sales

declined from EUR 463.1 million to EUR 450.4 million, which is 2.7 % below the

figure for the previous year. Sales volumes were kept at a continuously high

level.

Despite the difficult economic environment, a product mix that has been im-

proved even further through expansion of those segments with higher added

value has enabled us to again reach those record figures in profitability that we

Division Profilform

Customers of the Division ProfilformFinancial year 2002/2003 in % of sales

15% Building supply industry

15% Automotive

22% Other


13% Materials handlingand storage technology

20% Constructionindustry

60

Division Profilform

had realized in the previous year. EBITDA declined by just over 2 % from EUR

66.5 million to 65.2 million, while the EBITDA margin in percent of total sales

rose from 14.1 to 14.5 %. The development for earnings before interest and

taxes (EBIT) was similar, with a slight decline of 0.5 % from EUR 39.3 million to

EUR 39.1 million and an increase of the EBIT margin by 2 percentage points to

8.7 %. The Division Profilform is active at seven sites in six countries and, as of

the end of the 2002/2003 financial year, had 2,162 employees, an increase of

3.4 % as compared to the previous year.


Sales efforts were focused on customer-specific solutions, both by providing

tailor-made cross-sections and customized pre-processing. Here, the compen-

satory effect of our timely entry into the further processing segment of tubes and

sections was clear; without it, the sales figures we achieved would not have

been possible. The 2002/2003 financial year was difficult both with regard to

sales figures and prices. Against this backdrop, the pre-material prices, which

rose concurrently, were especially problematic because they could only be

passed on to the customers to a very minimal extent. Nevertheless, despite

difficult underlying circumstances, we were able to reinforce our strategic

position in the market.

In the individual companies of the Division Profilform, the business performance

during the 2002/2003 financial year was as follows.

voestalpine Krems, the lead company of the Division, was able to slightly im-

prove the previous year’s sales from EUR 157.9 million to EUR 161.7 million,

which brought a modest rise in the operating results. Positive extraordinary

effects (land sale) and negative ones (aid to employees following flood disaster

and special projects) essentially offset each other.

Key figures

2002/2003 2001/2002

Sales 450.4 463.1

EBITDA 65.2 66.5

EBITDA margin (in %) 14.5 % 14.1 %

EBIT 39.1 39.3

EBIT margin (in %) 8.7 % 8.5 %

Employees (not including apprentices) 2,162 2,090

Division Profilform in EUR million

Focus on

customer-specific

solutions –

strategic position

reinforced.

Markets of theDivision ProfilformFinancial year 2002/2003 in % of sales

25% Other EU countires

12% Austria


23 % Germany

9% Other European countries

22% Great Britain

Lead company

increased sales

and operating

result.


Division Profilform

voestalpine Krems Finaltechnik achieved a significant increase in sales and

operating results as compared to the previous year’s figures. The sales of the

company increased by 13 % from EUR 46.7 million to EUR 52.8 million. The

positive business performance is primarily due to the gratifying development of

orders for guide rails and successful sales in the high-bay storage technology

segment, as well as to the general improvement in operational performance.

While the Belgian company Sadef showed a slight decline in sales of about 2 %

during the 2002/2003 financial year, from EUR 105.9 million to EUR 103.7 mil-

lion, the operating results margins remained stable and at a high level. This

development took place under strong pressure from the competition and in a

difficult economic environment, particularly on the German market.

Metsec, the British company of the Division Profilform, posted excellent oper-

ating results in the past financial year in the sector of the “building division”

(these are proprietary profile systems with a major service component), however,

in the “custom roll forming” sector, restructuring measures had to be initiated to

improve the operating results. In the 2002/2003 financial year, sales declined

from EUR 98.8 million to EUR 92.2 million.

For voestalpine Präzisionsprofil in Germany, events during the past financial

year were strongly affected by the integration of the acquired cold profile sector

of Schmolz + Bickenbach. The move of production facilities to the expanded

Cologne/Hürth site will be spread out over the entire 2003/2004 financial year.

This will mean at least a three-fold increase of production volume. The result will

be a significant strategic role on the German market for special sections. As a

result of the asset deal, the sales of the company doubled from EUR 7.9 million

to EUR 15.4 million.

The Roll Forming Corporation (RFC) with production sites in Kentucky and

Indiana posted negative operating results for the past financial year. This was

due to the continued difficult situation on the US market, as well as to a high

degree of dependency on a few key customers. The sales of the Roll Forming

Corporation declined from EUR 50.3 million (due to the changeover of the fiscal

year, however, the calculation basis was 15 months in the 2001/2002 financial

year) to EUR 32.7 million. In order to remedy this situation, measures have

already been taken on the management level, with regard to employees, and

in the market. In addition, support in the technology sector from Sadef and

voestalpine Krems will be intensified. At EUR 6 million, sales of voestalpine

Profilform s.r.o. in Vyskov (Czech Republic) remained under the previous year’s

figure of EUR 8.1 million.

Positive business

performance for

voestalpine Krems

Finaltechnik.

Stable develop-

ment at Sadef.

Restructuring mea-

sures initiated at

Metsec.

Cold profile sector

expanded in

Germany.

Difficult economic

environment

adversely affects

operating results

of RFC.

62

Division Profilform

Development of the product mix

The new business unit “lightweight construction”, which was established a year

ago, was increasingly integrated into development partnerships with companies

in the automotive and automotive supply industries. In this connection, the

cross-divisional cooperation within the voestalpine Group in the “door module”

project stands out in particular. Additionally, the pre-processing center at the

Krems location was expanded during the 2002/2003 financial year. In order to

improve the product mix, investments will be made at all Division Profilform

sites.

Acquisitions

In addition to the successfully completed asset deal for the cold profile segment

of the German manufacturer of bright steel Schmolz + Bickenbach, which rep-

resented a step toward improved positioning in the German market, additional

major efforts were made to continue with the expansion activities through

acquisitions. However, these were not successful in the past financial year. A

number of companies were investigated with regard to their suitability; however,

no successful deals were completed because the evaluated companies did not

fulfill our financial and strategic criteria for acquisitions.

Strategy

In the 2002/2003 financial year, comprehensive preparations were made for

future priorities and/or for extraordinary expenditures in the employee sector

and for new strategic business units. Additionally, numerous market surveys

were carried out, for example, to examine market entry opportunities in China,

as well as feasibility studies with regard to continued growth through acqui-

sitions. In order to counter the difficult economic circumstances, an ambitious

market-based program aimed at achieving optimal product pricing was realized

with the assistance of an external business consultant.

New business unit

“lightweight con-

struction” focuses

on the automotive

industry.

Comprehensive

preparations for

future strategic

development.


voestalpineFinancial Statements 2002/2003

Financial Statements


voestalpine AGReport of the Supervisory Board on the 2002/2003 financial year

The Supervisory Board has fulfilled its responsibilities according to legal provi-

sions and the articles of incorporation within the framework of six meetings. On

these occasions, the Management Board furnished extensive written and oral

disclosure as to the business development and the position of the company.

The annual financial statements and the consolidated financial statements of

31 March 2003 were audited by the annual accounts auditors Grant Thornton

Wirtschaftsprüfungs- und Steuerberatungs-GmbH (Auditing and Tax Consulting

Ltd.), Vienna, that were elected according to the provisions of section 270 HGB

(Austrian Commercial Code).

Based on the results of the audit, the financial statements and the consolidated

financial statements conform to legal provisions and adhere to the stipulations of

the articles of incorporation. The audit further demonstrated the compliance to

the fullest extent with the provisions of section 269 HGB (Austrian Commercial

Code) and as a result the auditors issued an unqualified certification.

There was no occasion for objection. The Supervisory Board has examined and

approved the financial statements and the consolidated financial statements, as

well as the status report and the proposal for profit distribution. The financial state-

ments are thus established pursuant to section 125 Corporate Law (Aktiengesetz).

The consolidated financial statements were compiled according to the Interna-

tional Accounting Standards (IAS). These financial statements were also audited

by Grant Thornton Wirtschaftsprüfungs- und Steuerberatungs-GmbH (Auditing

and Tax Consulting Ltd.), Vienna, and accorded an unqualified certification.

The Supervisory Board acknowledged and approved the consolidated financial

statements and status report.

It is determined that the 2002/2003 financial year closed with a balance sheet

profit of EUR 47.945,897.98. It is proposed to distribute a dividend of EUR 1.20

per share with dividend rights and to carry the remainder forward to new

account.

The Supervisory Board

R. Streicher

(Chairman)

Vienna, 5 June 2003

66


voestalpine GroupBalance sheet at 31/3/2003

ASSETS Note No.

A. FIXED ASSETS

I. Intangible assets 1

1. Goodwill

2. Rights

3. Advance payments made

II. Tangible assets 2

1. Land; rights similar to land and buildings

2. Plant (technical) and machinery

3. Other plant; furniture and fixtures

4. Advance payments made and assets under construction

III. Financial assets 3

1. Investments in companies

2. Loans

3. Securities (loan stock rights) held as fixed assets

B. CURRENT ASSETS

I. Inventory 4

II. Receivables and other assets 5

1. Trade accounts receivable

2. Receivables from affiliated companies

3. Receivables from companies in

which an investment is held

4. Other receivables and other assets

III. Securities and shares 6

IV. Cash in hand; checks; balances with credit institutions

C. PREPAID EXPENSES AND DEFERRED CHARGES 7

1. Deferred taxes

2. Other

TOTAL ASSETS

31/3/2002

EUR thsd.

161,918.05

25,903.04

2,409.50

190,230.59

421,675.88

1.033,722.00

102,647.41

97,068.70

1.655,113.99

63,813.16

53,191.00

85,956.95

202,961.11

2.048,305.69

747,639.78

463,801.24

14,673.01

27,949.50

196,042.39

702,466.14

303,779.20

166,803.38

1.920,688.50

62,379.21

55,697.68

118,076.89

4.087,071.08

31/3/2003

EUR thsd.

260,071.15

33,747.48

3,207.70

297,026.33

515,474.79

1.059,595.51

111,254.74

173,988.65

1.860,313.69

71,101.75

30,537.45

79,585.65

181,224.85

2.338,564.87

906,105.00

613,863.07

5,122.11

23,269.71

174,385.28

816,640.17

204,327.30

114,626.37

2.041,698.84

74,034.07

62,440.76

136,474.83

4.516,738.54



voestalpine GroupBalance sheet at 31/3/2003

Liabilities Note No.

A. STOCKHOLDERS' EQUITY 8

1. Share capital

2. Capital reserves

3. Revenue reserves

4. Balance sheet profit

5. Own shares

B. MINORITY INTEREST 9

C. PROVISIONS 10

1. Provisions for severance payments

2. Provisions for pension payments

3. Provisions for deferred taxes

4. Other tax provisions

5. Provisions for accrued vacation time and

anniversary bonuses

6. Other provisions

D. LIABILITIES 11

1. Liabilities to credit institutions

2. Other interest-bearing long-term liabilities

3. Advance payments received on orders

4. Trade accounts payable

5. Bills payable

6. Liabilities to affiliated companies

7. Liabilities to companies in which

an investment is held

8. Other liabilities

E. DEFERRED INCOME AND ACCRUALS

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

F. CONTINGENT LIABILITIES 12

31/3/2002

EUR thsd.

239,820.40

290,685.70

987,676.85

48,057.57

–2,567.86

1.563,672.66

38,846.15

210,945.97

76,655.36

47,649.24

64,062.01

117,212.25

137,156.15

653,680.98

904,618.89

143,389.05

7,006.32

416,783.48

66,780.90

26,724.10

44,635.55

207,298.08

1.817,236.37

2.470,917.35

13,634.92

4.087,071.08

41,663.0

31/3/2003

EUR thsd.

287,784.40

451,756.14

1.004,979.47

47,945.90

–6,605.44

1.785,860.47

53,545.50

233,975.72

80,037.90

49,546.43

36,107.30

126,871.75

144,165.12

670,704.22

1.009,464.18

106,029.14

26,384.77

485,967.25

76,087.20

17,608.47

31,919.55

236,336.19

1.989,796.75

2.660,500.97

16,831.60

4.516,738.54

42,769.90

68


voestalpine GroupIncome statement 2002/2003

Note No.

1. Sales revenue 15

2. Costs of goods

sold 16

3. Gross profit or loss

4. Other operating income 17

5. Selling expenses 18

6. Administrative expenses 19

7. Other operating expenses 20

8. Subtotal line 1 through 7 (Operating result)

9. Income from investments 21

a) Income from associated companies

b) Other income from investments

10. Net interest 22

11. Other financial result 23

12. Subtotal line 9 through 11 (Financial result)

13. Ordinary result

14. Taxes on income and earnings 24

15. Minority interest 25

16. Consolidated net for the year

2001/2002

EUR thsd.

3.353,707.30

–2.659,630.47

694,076.83

129,186.96

–307,354.67

–162,297.03

–194,086.09

159,526.00

13,956.10

–2,776.90

–39,488.71

–40,434.92

–68,744.43

90,781.57

–31,900.65

–3,956.70

54,924.22

2002/2003

EUR thsd.

4.391,938.01

–3.475,568.64

916,369.37

167,124.06

–398,092.73

–299,989.04

–162,376.62

223,035.04

12,559.80

–494.80

–62,272.04

–50,867.40

–101,074.44

121,960.60

–35,635.20

–8,353.90

77,971.50



Note No.

Consolidated net for the year

Depreciation/appreciation of fixed assets

Book value of sold assets

Increase (decrease) in long-term provisions

Changes in accruals from associated companies

Pro-rated income from associated companies

Other non-cash income/expenses

Cash flow from the balance sheet

Income from the sale of fixed assets

Cash flow from the result

Changes in working capital

Cash flow from operations 26

Investment expenses

Income from the sale of investments

Expenses for changes in the scope of consolidation

Income from changes in the scope of consolidation

Changes in finance facilities granted and other

financial investments

Cash flow from investment activities 27

Dividends, capital increases

Purchase of own shares

Changes in finance facilities

Cash flow from financing activities 28

Change in liquidity

Liquid assets, beginning balance

Changes in the scope of consolidation

Changes in liquidity

Liquid assets, closing balance 29

voestalpine GroupCash flow statement 2002/2003

2001/2002

EUR million

54.9

245.0

17.4

10.1

1.3

–1.0

35.3

363.0

–34.8

328.2

–147.9

180.3

–280.4

27.2

–170.2

13.9

–24.8

–434.3

–63.7

39.6

322.3

298.2

44.3

94.9

27.7

44.3

166.9

2002/2003

EUR million

78.0

297.3

14.9

12.4

–9.8

2.8

48.0

443.6

–31.3

412.3

–145.1

267.2

–427.5

63.1

–202.9

0.0

124.5

–442.8

155.4

–4.0

–42.2

109.2

–66.3

166.9

14.0

–66.3

114.6

70


voestalpine GroupDevelopment of equity 2002/2003

in EUR thsd.

As of 1/4/2001

Consolidated profit

Dividend distribution


Currency translation

Other changes

As of 31/3/2002

ShareCapital

239,820.4

0.0

0.0

0.0

0.0

0.0

239,820.4

Capital

Reserves

290,685.7

0.0

0.0

0.0

0.0

0.0

290,685.7

Revenue

Reserves

976,774.4

6,866.6

0.0

0.0

1,880.4

305.7

985,827.1

Own

Shares

–42,160.3

0.0

0.0

39,592.4

0.0

0.0

–2,567.9

Balance

Sheet Profit

64,395.7

48,057.6

–62,545.9

0,0

0.0

0.0

49,907.4

Total

1.529,515.9

54,924.2

–62,545.9

39,592.4

1,880.4

305.7

1.563,672.7



in EUR thsd.

As of 1/4/2002

Consolidated profit

Capital increase

Dividend distribution


Currency translation

Hedge Accounting

Other changes

As of 31/3/2003

ShareCapital

239,820.4

0.0

47,964.0

0.0

0.0

0.0

0.0

0.0

287,784.4

Capital

Reserves

290,685.7

0.0

161,070.5

0.0

0.0

0.0

0,0

0.0

451,756.2

Revenue

Reserves

985,827.1

32,500.3

0.0

0.0

0.0

–9,870.9

–3,812.7

335.7

1.004,979.5

Own

Shares

–2,567.90

0,0

0,0

0,0

–4,037.6

0,0

0,0

0,0

–6,605.5

Balance

Sheet Profit

49,907.4

45,471.2

0,0

–47,432.7

0,0

0.0

0.0

0.0

47,945.9

Total

1.563,672.7

77,971.5

209,034.5

–47,432.7

–4,037.6

–9,870.9

–3,812.7

335.7

1.785,860.5

72


in EUR thsd.

I. INTANGIBLE ASSETS

1. Rights

2. Goodwill

3. Advance payments made

Total intangible assets

II. TANGIBLE ASSETS

1. Land, rights similar to land

and buildings

2. Plant (technical) and

machinery

3. Other plant, furniture and

fixtures

4. Advance payments made and

assets under construction

Total tangible assets

III. FINANCIAL ASSETS

1. Investments in affiliated

companies

2. Loans to affiliated

companies

3. Investments in associated

companies

4. Loans to associated

companies

5. Other investments

6. Loans to companies in which

an investment is held

7. Securities (loan stock rights)

held as fixed assets

8. Other loans

Total financial assets

TOTAL FIXED ASSETS

Changes DifferenceAs of in scope of in currency Reclassi- As of

1/4/2002 consolid. translation Additions Disposals fications 31/3/2003

77.433,3 9.418,8 (90,3) 12.385,8 524,2 0,0 98.623,4

179.705,8 6.424,3 0,0 112.903,4 10.646,5 0,0 288.387,0

2.409,5 1.035,2 (0,7) 1.686,7 0,0 (1.923,0) 3.207,7

259.548,6 16.878,3 (91,0) 126.975,9 11.170,7 (1.923,0) 390.218,1

1,017.518,0 57.284,6 (8.748,4) 55.993,1 11.198,2 44.733,1 1,155.582,2

3,674.762,9 88.692,2 (14.981,1) 151.103,6 67.169,5 51.190,9 3,883.599,0

383.595,2 24.946,1 (3.631,2) 37.557,1 21.533,0 5.000,4 425.934,6

97.068,7 2.665,1 (112,2) 155.681,9 3.971,2 (77.343,6) 173.988,7

5,172.944,8 173.588,0 (27.472,9) 400.335,7 103.871,9 23.580,8 5,639.104,5

4.782,1 34,6 0,0 2.265,5 84,8 0,0 6.997,4

23.522,9 0,0 0,0 0,0 21.805,7 0,0 1.717,2

58.774,1 0,0 0,0 8.604,5 11.217,6 183,2 56.344,2

14.173,9 0,0 0,0 0,0 1.291,1 0,0 12.882,8

14.553,8 1.411,2 1,6 2.840,6 1.446,0 6.026,5 23.387,7

1.558,9 0,0 0,0 0,0 774,7 0,0 784,2

91.761,0 3.152,9 0,0 2.959,8 14.500,5 0,0 83.373,2

13.995,7 42,6 (0,8) 11.969,8 5.126,1 0,0 20.881,2

223.122,4 4.641,3 0,8 28.640,2 56.246,5 6.209,7 206.367,9

5,655.615,7 195.107,6 (27.563,1) 555.951,8 171.289,1 27.867,5 6,235.690,5

Development of acquisition and manufacturing cost

voestalpine GroupDevelopment of assets of 31/3/2003



Accumul. Changes Diference Value Accumul.depreciation in scope of in currency adjust- Reclassi- depreciation Book value Book value

1/4/2001 consolid. translation Additions Disposals ments fications 31/3/2003 31/3/2002 31/3/2003

51.530,1 4.781,3 (92,0) 12.254,5 3.598,0 0,0 0,0 64.875,9 25.903,2 33.747,5

17.787,8 207,8 0,0 12.957,4 2.637,2 0,0 0,0 28.315,8 161.918,0 260.071,2

0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 2.409,5 3.207,7

69.317,9 4.989,1 (92,0) 25.211,9 6.235,2 0,0 0,0 93.191,7 190.230,7 297.026,4

595.842,1 19.726,1 (1.901,4) 32.016,4 5.575,7 0,0 0,0 640.107,5 421.675,9 515.474,7

2,641.040,9 57.163,7 (8.030,8) 196.903,6 63.074,0 0,0 0,0 2,824.003,4 1,033.722,0 1,059.595,6

280.947,8 17.810,4 (2.768,7) 38.977,3 20.286,8 0,0 0,0 314.680,0 102.647,4 111.254,6

0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 97.068,7 173.988,7

3,517.830,8 94.700,2 (12.700,9) 267.897,3 88.936,5 0,0 0,0 3,778.790,9 1,655.114,0 1,860.313,6

226,9 24,9 0,0 2.170,0 0,0 0,0 0,0 2.421,8 4.555,2 4.575,6

0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 23.522,9 1.717,2

3.528,1 0,0 0,0 2.810,4 2.339,4 0,0 0,0 3.999,1 55.246,0 52.345,1

286,9 0,0 0,0 2.906,9 0,0 0,0 0,0 3.193,8 13.887,0 9.689,0

10.541,7 0,0 0,0 930,9 2.266,1 0,0 0,0 9.206,5 4.012,1 14.181,2

5,0 0,0 0,0 0,0 0,0 0,0 0,0 5,0 1.553,9 779,2

5.804,1 162,5 0,0 91,9 818,1 1.453,0 0,0 3.787,4 85.956,9 79.585,8

(231,3) 0,0 0,0 3.661,8 901,1 0,0 0,0 2.529,4 14.227,0 18.351,8

20.161,4 187,4 0,0 12.571,9 6.324,7 1.453,0 0,0 25.143,0 202.961,0 181.224,9

3,607.310,1 99.876,7 (12.792,9) 305.681,1 101.496,4 1.453,0 0,0 3,897.125,6 2,048.305,7 2,338.564,9

Development of depreciation Net value

74


A. General principles

The object of voestalpine AG (4020 Linz, VOEST-ALPINE-Straße 1, company

register No. FN 66209 t at the commercial court in Linz) and of its Group com-

panies is the manufacture, processing and the sale of materials made from

steel, research and development in the areas of metallurgy, advanced metal

processing and materials technology.

The consolidated financial statements of voestalpine AG for the 2002/2003

financial year (1/4/2002 – 31/3/2003) have been prepared in accordance with

the International Accounting Standards (IAS) in the version current for the

2002/2003 financial year. This also applies to the comparison period for

2001/2002.

The consolidated financial statements presented were prepared in compliance

with the law governing consolidated financial statements (KonzAG) which was

published in March of 1999 (section 245a of the Austrian Commercial Code

(HGB). According to this law, a parent company preparing consolidated annual

financial statements and a consolidated status report in line with international

accounting standards is not obligated to prepare financial statements according

to the national provisions in the respective commercial code.

The financial statements of all essential consolidated companies, both domestic

and foreign, were audited by independent auditors and accorded their unquali-

fied certification. The orderly transfer from the annual financial statements

of the companies prepared according to national regulations to the uniform

consolidated regulations in line with the International Accounting Standards,

IAS, has also been certified.

The balance sheet date, according to IAS 27, is the balance sheet date of

the parent company; the annual financial statements of fully consolidated com-

panies were generally prepared with this balance sheet date. Exceptions are

made only in cases, where foreign regulations oppose this requirement or in

cases of companies newly added to the scope of consolidation. The differing

balance sheet dates do not deviate by more than three months before the

balance sheet date.

The consolidated financial statements were prepared in thousands of EURO

(EUR thsd.), the statements in the notes to the financial statements (unless

indicated otherwise) are in millions of EURO (EUR million).

Notes to the consolidated financial statements using IAS for voestalpine AG 2002/2003



The methods essential to the preparation of the accounts, the valuation and the

consolidation for voestalpine AG are as follows (stated according to section 245

paragraph 1 line 2 Austrian Commercial Code (HGB):

1. Goodwill

According to IAS 22, acquisition costs in excess of the assessed value of the

identifiable assets and liabilities of the interest acquired by the purchaser on the

day of the transaction are to be reported as goodwill and carried as asset.

Goodwill is to be depreciated by scheduled depreciation over the period of use-

ful life, where a maximum period of useful life of 20 years is assumed. The res-

pective right to elect netting with own funds without affecting earnings accor-

ding to the Austrian Commercial Code does not exist according to IAS 22.

2. Leasing

According to IAS 17, the allocation of a leasing item to either the lessor or the

lessee is assigned according to the criterion of assigning all essential risks and

prospects, which are tied to the ownership of the leasing item.

3. Inventory

According to IAS 2, inventory is to be assessed at the lower of acquisition or

manufacturing cost and net sales value. IAS and HGB differ primarily in the fact,

that the lower valuation according to IAS is strictly oriented on the consumer

market, while the HGB aligns the valuation of raw materials, supplies and

consumables generally on the replacement value market and the valuation of

work in progress, finished products and merchandise on the consumer market.

According to IAS 2 manufacturing costs comprise all product-related variable

and fixed costs.

4. Deferred taxes

IAS 12 requires an assessment of deferred taxes for all taxable temporary differ-

ences between the book value in the IAS balance sheet and the tax statement.

The HGB requires deferred taxes only in cases, where temporary differences

arise on the liability side. The reporting of deferred taxes on the asset side,

according to HGB pursuant to section 198 paragraph 10 HGB is elective.

76


The HGB is in line with the income statement oriented “timing-concept”, while

IAS 12 is in line with the balance sheet oriented “temporary concept”.

The presentation of deferred taxes on the asset side on losses carried forward

is mandatory, if it is to be concluded that they will be consumed by future tax

profits.

5. Valuation of foreign currency

The HGB, following the principle of imparity, mandates the reporting of unrealized

losses. Profit can only be reported after it has been realized. According to IAS

21, monetary items in foreign currency must be reported as of the balance sheet

date.

6. Securities held as current assets

According to IAS 39, securities are valued depending on their use. Securities

held for trading and securities that can be sold at any time are initially valued at

cost including possible transaction costs. Subsequent valuations will be valued

at the attributable current value. Securities that are held to maturity are to

be valued at acquisition cost carried forward. According to HGB (Austrian

Commercial Code) the differentiation is made between securities held as fixed

assets (valued using the adjusted lowest value concept) and securities held as

current assets (valued at the strict lowest value concept).

7. Minority interest

While the HGB requires a presentation of minority interest within the Share-

holders’ Equity under a separate item, IAS accords it a separate position

between own funds and borrowed funds.

8. Social capital provisions

Provisions for severance payments and anniversary bonuses are calculated

on the partial value method, according to Austrian balance sheet regulations.

IAS 19 requires the method of commitment cash value. The interest is based on

the actual long-term interest rate in the capital markets on the balance sheet

date; future pay raises are taken into account until the anticipated retirement.



Provisions, therefore, are increasing more rapidly during the accumulation phase

than if the partial value method of the Austrian Commercial Code (HGB) is

applied. Already during the 1999/2000 financial year, the transition was made

for the financial statements of the individual Group companies to the valuation

method required by IAS 19. Provisions are therefore valued at the cash value of

accrued pension claims (projected unit credit method).

9. Other provisions

The calculation of provisions according to IAS 37 is based on differing criteria

regarding underlying payment commitments and their probability of occurrence.

According to IAS 37.14 a liability with undetermined effective date or undeter-

mined amount is to be written on the liability side as a provision if it is probable

that the fulfillment of a current legal or de-facto obligation resulting from past

events will lead to a disbursal of resources. Furthermore, a reliable estimate

of the amount of the liability has to be possible. Different from the Austrian Com-

mercial Code, the valuation is based on the highest probability of occurrence,

not on the principle of commercial caution. Provisions for expenses are possible

according to the Austrian Commercial Code, but not according to IAS.

10. Expanded disclosure in the notes to the financial statements

In line with IAS-reporting, a duty to furnish detailed explanations to items of the

balance sheet, the income statement, the cash flow statement and the develop-

ment of the equity in the notes to the financial statements exists. In addition,

requirements to furnish further information on business segments and derivative

financial instruments exist that are not mandated by the Austrian Commercial

Code (HGB).

11. Realization of earnings

Earnings from the sale of products and goods are realized at the date of the

passing of the risks and prospects to the buyer.

Interest earnings are realized on a pro rata temporis basis taking into account

the effective interest yield of the respective asset. Dividend earnings are re-

ported as of the date of accrual of the corresponding legal claim.

78


B. Principles of consolidation

1. Scope of consolidation

An overview of all companies of voestalpine AG is included at the end of the

notes to the financial statements.

The determination of the scope of consolidation is made according to the pro-

visions of IAS 27.11. – 27.14. Accordingly, aside from voestalpine AG,

40 domestic and 102 foreign subsidiaries, in which voestalpine AG directly or

indirectly holds the majority of the voting rights or rather the possibility of legal

and actual control, are part of the scope of fully consolidated companies.

During the year under review, 40 (prior year: 35) affiliated companies whose

influence on the net worth, financial and earnings position is not material (indi-

vidually and in total) are not consolidated.

According to IAS 31 (Financial Reporting of Interests in Joint Ventures),

voestalpine Tubulars GmbH & Co, in addition to three smaller companies, is

being included in the consolidated financial statements on a pro rata basis.

The inclusion of the companies of the VAE Group was changed from pro rata

consolidation to full consolidation after an increase of the participation quota

during the year under review. 12 companies are included in the consolidated

financial statements within the scope of equity consolidation.

The scope of consolidation during the year under review developed as follows:

Fully Pro rata ConsolidationScope of Consolidation consolidated consolidation at equity

As of 1/4/2002 107 29 13

Included for the first timeduring the year under review 18 0 1

Changes in the type of consolidation 26 –25 –1

Disposals during the year under review 8 0 –1

As of 31/3/2003 143 4 12

Of which foreign 102 2 6

The initial consolidation for companies included for the first time occurs at the

time of acquisition.



During the past financial year, four acquisitions took place that had a material

impact on the consolidated financial statements of voestalpine AG. voestalpine

Bahnsysteme GmbH acquired the remaining 50 % of the shares of the VAE

Group from the previous co-owner Vossloh AG and 4.69 % from a variety of

different shareholders. Additionally, voestalpine Bahnsysteme GmbH took over

70 % of the shares of Railpro B.V. VAE GmbH acquired 100 % of the shares of

Wisselbouw Nederland B.V, and voestalpine motion gmbh took over 90 % of

the shares of Horst Matzner Holding GmbH, Osnabrück.

VAE Railpro B.V Matzner Wisselbouw

Shares acquired during the business year 54.69 % 70.00 % 90.00 % 100.00 %

Acquired by voestalpine voestalpine voestalpine VAE GmbHBahnsysteme Bahnsysteme motion

GmbH GmbH gmbh

Date of initial consolidation 1/10/ 2002 1/10/ 2002 1/10/2002 1/4/2002

Segment Railway Systems Railway Systems motion Railway Systems

Goodwill in EUR million 96.6 9.0 3.3 4.6

Period of depreciation 20 years 20 years 20 years 20 years

The company acquisitions and the corresponding initial consolidations have had

the following effect on the consolidated financial statements:

31/3/2003 31/3/2002Added values in EUR million in EUR million

Fixed assets 99.3 220.4

Current assets 216.1 284.2

Prepaid expenses and deferred charges 5.2 16.6

Assets 320.6 521.2

Shareholders’ equity 100.8 119.4

Minority interest 11.6 2.3

Provisions 41.5 78.1

Liabilities 166.4 285.2

Deferred income and accruals 0.3 36.2

Liabilities and shareholders’ equity 320.6 521.2

Employees 2,344 976

80


The consolidated income statement for 2002/2003 includes these companies

consolidated for the first time with sales of EUR 335.2 million, operating result of

EUR 17.9 million and a net profit for the year of EUR 9.6 million.

2. Methods of consolidation

Capital consolidation occurred at the time of transition to International

Accounting Standards effective 1/4/1997. Additions after 1/4/1997 will have an

initial consolidation date concurrent with the date of their acquisition.

Capital consolidation is based on the book value method. This method offsets

the respective book value of an investment against the proportionate equity at

the time of the acquisition. Should a difference arise between the acquisition

cost and the proportionate equity at the time of the acquisition and if it can be

identified, it will be included in the assets of the subsidiary. Remaining differences

on the asset side are reported as goodwill and depreciated over their periods of

useful life.

During the initial consolidation in the financial year under review differing

amounts on the assets side (amounting to EUR 123.6 million) comprised hidden

reserves amounting to EUR 4.5 million and EUR 119.1 million were written as

goodwill on the asset side.

The consolidation of joint companies is done on a pro rata basis according to

uniform principles.

Interim results, expenses and income, as well as inter-company receivables and

liabilities between consolidated companies are eliminated. For consolidated

processes that impact the results corresponding tax deferrals and accruals are

formed. Consolidation measures due to relationships with pro rata consolidated

companies are being implemented in proportion to the investment.

For companies consolidated at equity the differing amount from equity offset is

being determined on the same principles as for fully consolidated companies.

As far as possible, valuation is adapted to uniform Group valuation and interim

results are eliminated. Since the period 2001/2002, the value of companies

consolidated at equity has been reported under the item “investments in

affiliated companies”. As of 31/3/2003, the amount was EUR 9.9 million.



C. Currency translation

The statements of fully consolidated foreign subsidiaries and the pro-rated equity

of foreign associated companies were translated according to IAS 21. The cur-

rency for all companies is the respective local currency, since the companies

conduct their business independently in regard to finance, economy and

organization.

The conversion of the balance sheet occurs at the middle rates on the balance

sheet date, with exception of equity items (historical currency conversion rate).

The conversion of the income statement uses average annual conversion rates.

Differing amounts arising from currency translation of asset and liability items

compared to the prior year‘s conversion, as well as translation differences

between the balance sheet and the income statement are treated in such a way

as to have no impact on results.

Translation differences arising from the development of the equity in comparison

with the initial consolidation are offset against reserves in such a way as not to

have an impact on results.

Translation differences from the conversion of foreign monetary currency items

in the individual financial statements due to currency exchange fluctuations

between the entry date of the transaction and the balance sheet date are re-

ported in the respective period impacting the result.

The currency exchange rates of essential currencies have changed as follows:

Currency Middle Rate on the Balance Sheet Date Annual Average Rate

31/3/2003 31/3/2002 31/3/2003 31/3/2002

USD 1.0895 0.8724 0.9942 0.8840

GBP 0.6896 0.6130 0.6426 0.6174

82


D. Accounting and valuation principles

The financial statements of all companies included are based on uniform Group

accounting and valuation principles.

The compliance with the uniform IAS accounting and valuation standards was

audited by the individual auditors of all essential Group companies and certified.

Non-essential companies consolidated at equity are partly not adapted to the

uniform Group valuation principles.

Fixed assets

Intangible assets are reported at acquisition cost less scheduled linear deprecia-

tion (period of useful life span between 3 and 5 years), in line with IAS 38. There

were no research expenses written as assets according to IAS 38.42. No

development costs exist that could be carried as assets according to IAS 38.45.

Goodwill, resulting from acquisitions reported in individual financial statements (if

equity added to hidden reserves does not amount to the acquisition cost) is

generally written on the asset side and depreciated. If acquisitions or strategic

investments are made for the qualitative or quantitative expansion of the core

business of the company, goodwill is depreciated over a period of 20 years, in

all other cases the period of depreciation is generally 10 years.

The valuation of tangible assets according to IAS 16 is based on the cost of

acquisition or manufacture; less scheduled linear depreciation (IAS 16.47) or the

lower amount that could be realized through a sale of the asset. Long-term

extraordinary devaluation is accounted for as extraordinary depreciation.

The manufacturing cost of self-constructed assets is comprised of the individual

costs and a proportionate share of general material and manufacturing cost

necessary for production. Depreciation due to manufacturing and proportionate

expenses for the company‘s social security costs and the voluntary social

contributions of the company are also included here.

Interest expenses incurred during the period of manufacture are not included.

Assets of minor value up to EUR 400.00 are usually depreciated in full during the

year of their acquisition, analogous to the course of action required by the HGB.



Scheduled depreciation of fixed assets subject to wear is based on uniform

Group periods of useful life:

%

Business buildings and plants and other buildings 2.0 – 20.0

Plant (technical) and machinery 3.3 – 25.0

Other plant, operating and office equipment 5.0 – 20.0

Leased fixed assets, which should be viewed as asset acquisitions with long-

term financing, are written as assets at the lower of cash or market value, in line

with IAS 17 (accounting for leases), due to the risks and opportunities arising

from the ownership of the asset. Depreciation is scheduled to occur over the

commercial period of useful life of the asset or, if shorter, over the term of the

leasing contract. Payment commitments resulting from future leasing rates are

discounted and written as liabilities.

Items ceded under all other leasing and lease agreements are treated as

operative leasing and are reported by the lessor or landlord. Lease payments

are presented as expense.

Investment subsidies are written as liabilities and dissolved according to the

period of useful life of the asset granted the investment. Subsidies for invest-

ments resulting from official requirements adding no additional commercial value

for the company are offset against acquisition cost on the asset side.

During the 2002/2003 financial year subsidies of public authorities amounting to

EUR 17.67 million (prior year: EUR 5.0 million) for investments, research and

development activities and measures to improve the labor market were received

impacting income.

Shares in associated companies as well as in other affiliated companies, insofar

as they are not investments of minor importance, are generally valued at their

pro rata equity based on the equity method. Generally, the same valuation

methods are utilized that apply to fully consolidated companies.

Other investments are valued at their acquisition cost less applicable extra-

ordinary depreciation to take decreased value into account.

Loans within the voestalpine AG Group are valued at carried acquisition costs

applying the effective interest method.

84


Securities and loan stock rights held as fixed assets are valued at acquisition

cost or market value on the balance sheet date. The securities reported in the

financial statements are for the most part for the legal coverage of provisions for

severance payments and pensions.

Current assets

Inventories comprise raw materials, supplies and consumables as well as mer-

chandise valued at acquisition cost and products valued at manufacturing cost.

Should the values be lower on the balance sheet date, due to a decrease in

prices on the stock exchange or the market, those lower values are presented.

Manufacturing costs comprise exclusively directly associated cost (manufac-

turing material, manufacturing wages) and pro-rated general materials and

manufacturing cost based on capacity utilization. General administrative

expenses and expenses for voluntary social contributions and contributions to the

company‘s retirement provisions and interest on borrowed capital are not re-

ported as assets.

Acquisition and manufacturing costs are determined for similar assets based on

the method of weighted average prices or similar methods. For risks to the

inventory, appropriate discounts due to storage time or reduced usability are

calculated.

Receivables and other assets are written on the asset side at acquisition cost.

Discernable risks are covered through credit insurance.

Receivables without interest or with low interest with a term exceeding one year

are valued at the discounted cash value.

Securities held as current assets are valued at the existing stock exchange or

market value on the balance sheet date.

Cash in hand and balances with credit institutions are valued at the current rate

on the balance sheet date. There were no restrictions on use of these items on

the balance sheet date.



Impaired value of assets

Intangible assets (including goodwill carried as asset) as well as tangible fixed

assets are audited on a regular basis regarding the value of the amount written

as assets according to IAS 36 (Impairment Test for Cash Generating Units). If

the amount that the asset could achieve (the higher of net sales value and value

in use) is lower than the book value, then extraordinary depreciation has to be

taken. If the reason for an earlier extraordinary depreciation is no longer valid, a

revalorization to the carried acquisition and manufacturing costs takes place.

Tax deferrals

Deferred taxes are generally determined for all temporary deviations between

the IAS accounts and the tax accounts of the Group companies as well as for

consolidation activities generating additional temporary deviations. Furthermore,

tax deferrals on the asset side are formed for all losses carried forward, where

consumption can realistically be assumed.

The calculation of deferred taxes according to IAS 12 (income taxes – revised

1996) is based on the balance sheet liability method. The calculation for de-

ferred taxes of domestic companies is based on a tax rate of 34 %. Calculations

for foreign companies are based on their respective local tax rate.

Borrowed capital

Provisions for payments to employees that have to be reported according to IAS

19 for voestalpine AG comprise provisions for pension and severance pay-

ments as well as for anniversary bonuses.

voestalpine AG Group’s accounting adheres to the principle that these commit-

ments can at any time be transferred or transposed to a third party. The com-

mitments are calculated during the 2002/2003 financial year based on the

Heubeck tables that are also representative for Austrian circumstances. The

death, marriage and disability probabilities included therein are representative

for the staff of our Group.

The increase or decrease of either the cash value (projected unit credit method)

of the benefit oriented obligation or the attributable current value of the pension

fund (for pension fund obligations) can lead to actuarial gains or losses, the

reasons of which can be, among others, changes in calculation parameters,

86


changes in estimates regarding the risk development of the obligation or

differences between the anticipated and the actual income from funds assets.

These actuarial gains or losses are distributed over the future average term of

employment of the staff, if this is outside of the corridor of 10 % of the value of

the obligation. From the 2002/2003 financial year onward, this distribution over

the average remaining term of employment will be limited to a corridor of 17 %

of the overall obligation. All deviations exceeding this limit will immediately be

reported as expense (EUR 17.4 million in the business year under review).

The corridor method is used for severance and pension payments, actuarial

differences arising from anniversary bonuses are instantly realized, impacting the

result.

The calculation of social capital provisions is based on the following parameters:

in % 2002/2003 2001/2002

Interest rate 5.5 5.5

Emolument increase 3.0 3.0

Pension increase 2.5 3.0

Retirement age (men/women) in years 61/56 61/56

The calculation of commitments on the balance sheet date is based on the

projected unit credit method. This method determines the individual cash

value of the rights accrued by the employee. taking into account the assumed

emolument and pension increases.

Severance payments

Employees of the Austrian Group companies receive, in cases of termination by

the employer or in case of retirement, a one-time severance payment.

In the case of employment contracts signed before 1/1/2003, the amount of

severance is tied to the length of employment and is calculated as a multiple of

the last month’s salary. The entitlement to severance payments arises at the end

of the third year of service and in that case amounts to two times the last

month’s payment. After a time of service of 25 years, the maximum amount of

severance pay is reached comprising 12 months’ salary.



Employment contracts established after 31/12/2002 are subject to the new

severance pay system. Requiring payment of monthly contributions to an exter-

nal severance payments fund, this contribution-oriented system guarantees

that each employee will receive severance pay depending on the number of

contribution months and the success of the investments made by the severance

payments fund but independent of the duration of employment with any

individual employer.

Pension commitments

The voestalpine Group’s pension commitments comprise, in particular in Austria

and in the Netherlands, defined contribution pension commitments and defined

benefit commitments.

While defined pension commitments are satisfied through fixed payments to a

pension fund or as contributions to an increase in coverage according to ASVG,

defined benefit commitments are derived either from a percentage per year of

service of the salary or wage amount when leaving the company or from a valor-

ized fixed amount per year of service rendered. Defined benefit commitments

are reported in the financial statement of the respective company until the

contractual date when the pensions become irrevocable is reached. After

irrevocability is reached, funding through the pension fund comes into effect.

All commitments are valorized for current pension payments based on the

consumer price index, the current increase in collective wage contracts or the

general company salary index and wage index.

For valuation of other provisions please refer to the explanations in item “A.9.”.

Liabilities are calculated at the nominal value or the amount of repayment.

Liabilities resulting from financing leasing contracts are shown at the cash value

of the future leasing installments.

Derivative financial instruments

The voestalpine AG Group uses derivative financial instruments solely for

hedging purposes, to reduce the risk arising from the operations in the areas

currency, interest and market value, or rather the resulting financial require-

ments.

88


According to IAS 39, all derivative financial instruments are to be valued at

current market value. In the past business year, a connection with existing basic

transactions (in particular raw materials purchases in USD) was proven and

documented for the majority of the forward exchange transactions so that the

requirements for application of hedge accounting are fulfilled. Market value

changes of derivative financial instruments are reflected, applying hedge

accounting, via the equity without impacting the results. When the respective

basic transaction is recognized, the basic and the hedging transaction are

valuated via the income statement. The valuation of derivative financial

instruments concluded between voestalpine AG and external banks according

to IAS 39 has an impact in the amount of EUR 2.2 million on the result for the

business year 2002/2003 (prior year: EUR –3.2 million).

A detailed explanation of the financial instruments can be found under item

“F.13. Notes to the financial statements – financial instruments”.

Estimates

During the preparation of a consolidated report, estimates and assumptions

have to be made to a certain degree that have an impact in regard to reported

assets and liabilities, the reporting of other liabilities on the balance sheet date

and the statement of income and expenses during the period under review.

The actual amounts arising in the future may deviate from this estimation.



E. Notes to the balance sheet

The detailed development of fixed assets is shown in the table Development of

Assets. The impact of changes in the scope of consolidation is shown separately.

Currency translation differences arising from the difference in the translation of

assets at the beginning and end of the year are also shown as separate items.

1. Intangible assets:

The additions to the goodwill during the 2002/2003 financial year amounted to

a total of EUR 119.1 million; on 31/3/2003, a total goodwill of EUR 260.1 is

reported in the consolidated balance sheet of voestalpine AG.

A detailed development of intangible assets is shown in the table Development

of Assets, which is a part of this financial statement.

2. Tangible assets:

Tangible assets also comprise leased assets, which due to the structure of the

leasing agreement economically have to be included in the tangible assets of

voestalpine AG. On 31/3/2003 this amount, reported as assets, is EUR 46.01

million (prior year: EUR 7.88 million). It is included in the balance sheet items

“plant (technical) and machinery” and “land, rights similar to land and buildings”.

From the utilization of such assets reported on the balance sheet arise commit-

ments for minimum lease payments of:

31/3/2003 31/3/2002in EUR million in EUR million

Remaining term less than one year 5.36 0.79

Remaining term between one and five years 14.26 2.97

Remaining term longer than five years 41.18 5.36

The cash value of all leasing rates is EUR 56.45 million (prior year: EUR 5.45

million), financing costs from lease financing amount to EUR 4.70 million (prior

year: EUR 2,1 million).

Minimum leasing payment commitments for operative leasing within the Group

are primarily for built-up areas, railroad cars, automobiles and EDP equipment.

90


Minimum leasing payments for built-up areas are in the first year EUR 1.23 million,

in the following four years EUR 4.92 million and afterwards EUR 11.07 million.

During the year under review, extraordinary depreciation on tangible assets

(according to IAS 36) amounted to EUR 0,46 million (prior year: EUR 0.39

million).

As per 31/3/2003 restrictions on the disposition of tangible assets amount to

EUR 5.32 million (prior year: EUR 2.80 million).

Maintenance costs are generally reported as expenses.

The reporting of assets not essential to operations (IAS 40) for the voestalpine

Group are valued at acquisition cost. The option to report assets not essential to

operations at current value is not taken.

Tangible assets include real estate with a book value of EUR 0.05 million which,

at the balance sheet date, were classified as not essential to operations (IAS

40). The current value of this real estate is EUR 16.64 million. The determination

of market value is done through extrapolation from similar real estate trans-

actions that took place during the financial year.

A detailed development of tangible assets is shown in the table Development of

Assets, which is part of this financial statement.



3. Financial assets

At the balance sheet date, the securities held as fixed assets were valued

according to the classification specified in IAS 39 at the current market value.

Securities in the amount of EUR 101.98 million (previous year: EUR 45.71

million) are pledged for investment loans granted by the European Investment

Bank (IAS 25.49).

A detailed development of the individual items is shown in the table Develop-

ment of Assets, which is part of this financial statement.

4. Inventory

The segmentation of inventory is detailed in the following overview:

31/3/2003 31/3/2002in EUR million in EUR million

Raw materials, supplies and consumables 317.41 254.80

Semi-finished products 240.38 201.71

Finished products 266.62 239.59

Trading goods 72.78 41.04

Services not yet invoiced 4.40 5.28

Advance payments made 4.51 5.22

906.10 747.64

Of existing inventory on 31 March 2003 inventory amounting to EUR 906.10

million, EUR 5.49 million (prior year: EUR 4.05 million) is reported at the net

sales value.

Revalorization according to IAS 2.31 was not performed during the year under

review.

On 31/3/2003 no inventories of fully consolidated companies (prior year:

EUR 0.27 million) are pledged as securities for liabilities.

92


5. Receivables and other assets

Of which with Of which withremaining remaining

Book value term of term of more Book value31/3/2003 up to 1 year than 1 year 31/3/2002

in EUR million in EUR million in EUR million in EUR million

Trade accountsreceivable 613.86 613.80 0.06 463.80

Receivables from affiliated companies– trade accounts receivable 2.32 2.32 0.00 3.28

– from financing and clearing 2.12 2.12 0.00 5.95

– from profit poolsand dividend payments 0.00 0.00 0.00 4.09

– other 0.68 0.68 0.00 1.36

Receivables from companiesin which an investmentis held– trade accounts receivable 15.24 15.24 0.00 13.26

– from financing and clearing 3.02 3.02 0.00 9.82

– from profit poolsand dividend payments 4.92 4.92 0.00 4.83

– from the disposal of assets 0.00 0.00 0.00 0.00

– other 0.08 0.08 0.00 0.04

Other receivables and other assets– from financing 6.50 5.85 0.65 13.60

– from the disposal of assets 2.94 2.94 0.00 35.21

– other 164.96 159.27 5.69 147.23

816.64 810.24 6.40 702.47

6. Securities and shares

The item securities and shares held as current assets discloses mainly the

shares held by Group companies in the V54-capital investment fund amounting

to EUR 122.16 million (prior year: EUR 180.35 million) as well as other securities

amounting to EUR 26.21 million (prior year: EUR 25.14 million).

The item other securities reported in the current assets includes the investment

in VA Technologie AG (19.05 %) (EUR 50.3 million).



7. Prepaid expenses and accruals

The item prepaid expenses and accruals contains no expenses for borrowed

funds and discounts, as in the prior year.

Deferred taxes on the asset side are reported as part of the item prepaid ex-

penses and accruals and deferred taxes reported under the item other

provisions report a balance of EUR 24.48 million (prior year: EUR 14.73 million)

and arise from differences in book values of the following balance sheet items:

31/3/2003 31/3/2002Assets Liabilities Assets Liabilities


Companies

Fixed assets 37.34 35.49 34.50 46.82

Current assets 11.23 88.20 15.27 99.44

Provisions for severanceand pension payments 45.63 4.89 60.53 7.01

Tax losses carried forward 99.42 0.00 73.94 0.00

Other liabilities 22.32 7.33 49.78 35.40

Subtotal 215.93 135.91 234.02 188.67

Consolidation

Elimination of intercompany profits 19.69 0.00 8.77 0.00

Hidden reserves 0.00 14.36 0.00 7.65

Other 5.82 19.18 7.62 10.77

Subtotal 25.51 33.53 16.39 18.42

Differences in bookvalues (netted) 71.99 43.32

Deferred taxes (netted) 24.48 14 73

The increase in the balance of prepaid expenses and accruals for deferred taxes

from 2001/2002 to 2002/2003 in the amount of EUR 9,75 million impacts the

expenses in the amount of EUR 16.42 million (see item 23). An additional

amount of EUR 6.67 million (netted) resulted from changes with no impact on

results, due to initial consolidation and offsetting of the cost of the capital increase

against the equity.

Due to the tax regulations currently in effect, it can be assumed that the differing

amounts between the tax rate determination and the proportionate equity

of subsidiaries included in the consolidated financial statements will remain

generally tax-free. Therefore, no tax deferrals took place.

94


Prepaid expenses and deferred income also reports the expense due to the first

employee investment plan which took place during the business year 2001/02.

The distribution is over the average remaining term of work (see item I.35 –

other remarks – employee participation).

8. Group equity

The development of Group equity reported in the balance sheet of voestalpine

Group is shown in a separate table Development of Equity, which is a part of

this financial statement. In April of the past financial year voestalpine AG availed

itself of the opportunity to increase the share capital of the company, through a

capital increase, by a further nominal amount of EUR 47.96 million (20 % of the

share capital) by issuing new individual share certificates. The corresponding

authorization was granted on the occasion of the Annual General Shareholders'

Meeting of 7/7/1999 (authorization relating to approved capital). The new shares

were issued through a public offering in Austria and private placement with inter-

national institutional investors. The emission price was fixed at EUR 32.50 per

new share.

The amount exceeding the nominal amount was allocated to the restricted

capital reserves. Thus the share capital on the balance sheet date amounted to

EUR 287.87 million (previous year: EUR 239.82 million) and is divided into 39.6

million share certificates (previous year: 33.0 million).

On the occasion of the Annual General Shareholders’ Meeting of 2/7/2002 the

Management Board was authorized to increase the share capital of the company

until 30/6/2007 by up to EUR 57,556,884.66, if necessary in several tranches,

by way of issue of up to 7,920,000 individual share certificates made out to

bearer.

Additionally, the Management Board was authorized to increase the share capi-

tal of the company until 30/6/2007 by a further amount of up to EUR

28,778,442.33, if necessary in several tranches, by issueing up to 3,960,000

individual share certificates made out to bearer to be issued to employees,

executives and members of the Management Board of the company in the

framework of an employee participation plan or a stock option plan excluding a

subscription right on the part of the stockholders.



The transition of equity on 31/3/2003 reports a capital reserve of EUR 451.76

million (previous year: EUR 290.69 million) comprised of EUR 366.99 million res-

tricted reserves (previous year: EUR 200.46 million) and EUR 84.77 million non-

restricted capital reserves.

Restricted capital reserves are only to be used to equalize a balance sheet loss

that would otherwise have to be reported.

The revenue reserves reported in the table Development of Equity comprise

solely unrestricted revenue reserves.

The consolidated balance sheet profit reported in the consolidated financial

statements is identical to the balance sheet profit of voestalpine AG, which

is still being prepared according to national legal requirements and is to be dis-

tributed as a dividend.

During the past financial year, voestalpine AG acquired a further quantity of its

own shares in order to transfer them, in the context of an expansion of the

existing employee participation plan (see item 36), to the employees or to the

private foundation of voestalpine employees, respectively (authorization issued

by the Annual General Shareholders’ Meeting on 2/7/2002).

Own shares Book value Share capital Share capitalthsd. pcs. EUR thsd. % EUR thsd.

As of 31/3/2002 81 2,568 0.2 589

Additions 1,181 28,686 3.0 8.583

Disposals –1,002 –24,649 –2.5 –7.285

As of 31/3/2003 260 6,605 0.7 1.88

The own shares are openly deducted from the equity.


Minority interest comprises shares in the equity of consolidated Group com-

panies held by third parties. Minority interest is particularly high in the case of

the VAE Group, companies of the Rotec Group and Railpro B.V.

96


10. Provisions

Provisions for severance payments developed as follows during the 2002/2003

financial year:

2002/2003 2001/2002in EUR million in EUR million

Cash value of projected benefit obligation (PBO) per 1/4/2002 254.29 203.16

Service costs for the period 7.26 7.09

Interest costs for the period 8.1 12.19

Additions from changes in scope of consolidation 13.69 0.19

Payments during the business year –10.24 –11.68

Actuarial gains / losses 2.11 43.34

Cash value of projected benefit obligation (PBO)per 31/3/2003 275.21 254.29

Actuarial gains / losses –41.23 –43.34

Provisions for severance payments (balance sheet 31/3/2003) 233.98 210.95

Provisions for pensions developed as follows in 2002/2003:

2002/2003 2001/2002in EUR million in EUR million


Service costs for the period 9.08 1.40

Interest costs for the period 11.68 6.89

Subsequent addition of service costs 0.66 0.00

Additions from changes in scope of consolidation 36.22 78.17

Payments during the business year –6.46 –4.66

Actuarial gains / losses 2.15 21.61


Plan assets as of 31/3/2003 –167.49 –119.99

Subsequent addition of service costs –0.30 0.00

Actuarial gains / losses –23.76 –21.61

Provision for pension payments (balance sheet 31/3/2003) 80.04 76.66



For the calculation of the provisions for pension payments, an expected interest

rate of the fund assets of 6.0% was used as a basis. Due to the developments

in the financial markets in the year 2002/2003, the actual interest rate was around

–4%.

The development of other provisions that are valued according to IAS 37 is

shown in the following table:

ChangesCurrencyin the trans- Of

As of scope lation As of which1/4/ of differ- Con- Re- Allo- 31/3/ long-

in EUR million 2002 consol. ence sumed versal cation 2003 term

Provisions for accrued vacation 57.94 4.09 –0.09 48.95 0.00 50.93 63.92 0.00

Provisions foranniversary bonuses 59.29 2.78 0.00 1.06 0.03 1.98 62.96 62.88

Provisions for otherpersonnel expenses 39.05 3.57 –0.09 31.29 4.47 34.01 40.78 6.08

Tax provisions 64.07 1.87 –0.16 59.72 0.68 30.73 36.11 0.00

Provisions for deferred taxes 47.64 3.51 –0.89 2.83 0.83 2.95 49.55 49.55

Provisions for future backcharges and missingpurchase invoices 19.76 0.79 0.00 10.61 4.23 12.45 18.16 6.79

Provisions for guarantees and other risks 19.53 4.82 -0.03 7.98 1.71 12.60 27.23 6.67

Provisions for imminent lossesfrom pending transactions 12.98 0.48 0.00 16.35 0.35 7.85 4.61 0.00

Other provisions 45.82 6.31 –0.08 25.17 3.84 30.33 53.37 4.63

Total 366.08 28.22 –1.34 203.96 16.14 183.83 356.69 136.60

Provisions for other personnel expenses comprise mainly provisions for

restructuring measures, the stock option plan, performance bonuses and variable

salary components.

98


11. Liabilities

Of which with Of which witha remaining a remaining

Book value term of up term of more Book value31/3/2003 to 1 year than 1 year 31/ 3/2002


Liabilities to credit institutions 1,009.46 485.93 523.53 912.27

Other long-term interest-bearing liabilities 106.03 14.02 92.01 143.39

Advance paymentsreceived on orders 26.38 26.30 0.08 7.01

Trade accountspayable– from asset acquisitions 57.02 57.02 0.00 71.19– other 428.95 428.89 0.06 345.59

Bills payable Own bills 76.09 76.09 0.00 66.78

Liabilities to affiliatedcompanies– trade accounts payable 3.03 3.03 0.00 8.30– from financing and clearing 13.12 13.12 0.00 4.45– from asset acquisitions 0.08 0.08 0.00 2.60– other 1.37 1.37 0.00 11.37

Liabilities to companiesin which an investmentis held– trade accounts payable 2.95 2.95 0.00 2.28– from financing and clearing 28.72 28.72 0.00 40.50– from asset acquisitions 0.00 0.00 0.00 0.00– other 0.25 0.25 0.00 1.86

Other liabilities– from taxes 31.72 31.72 0.00 30.97– from social security 30.16 30.16 0.00 21.54– from financing 29,87 29,31 0,56 5.99– from asset acquisitions 0.05 0.02 0.03 8.68– other 144,54 144,50 0.04 132.47

1,989.79 1,373.48 616.31 1,817.24

12. Contingencies

Book value Book valuein EUR million 31/3/2003 31/3/2002

Guarantees and warranties 38.12 32.56

Letters of comfort 3.37 8.21

Bill commitments 1.28 0.63

Other 0.00 0.26

42.77 41.66

Contingencies are valued according to IAS 37.



13. Balance sheet by maturities

ASSETS LIABILITIES

31/03/ 2003 31/3/2002 31/3/2003 31/03/2002in EUR mill. in EUR mill. in EUR mill. in EUR mill.

Long-term assets Equity 1,785.9 1,563.7

Fixed assets 2,338.6 2,048.3

Long-term Minorityreceivables 6.4 7.2 interest 53.5 38.8

Deferred taxes 74.0 62.4

2,419.0 2,117.9 Long-term borrowed capital

Long-termfinancial liabilities 616.1 691.4

Deferred taxes 49.6 47.6

Long-term provisions 401.0 370.2

Other long-term liabilities 0.2 10.0

1,066.9 1,119.2

Short-term Short-term assets borrowed capital

Short-term Short-termcurrent assets 2,035.3 1,913.5 financial liabilities 579.9 415.2

Other prepaidexpenses and Trade accountsdeferred charges 62.4 55.7 payable 492.0 416.8

2,097.7 1,969.2 Advanced payments received 26.3 7.0

Short term provisions 220.1 235.9

Other short-term liabilities 275.4 276.9

Deferred incomeand accruals 16.8 13.6

1,610.5 1,365.4

4,516.7 4,087.1 4,516.7 4,087.1

100


14. Financial instruments

The International Accounting Standards distinguish between original and

derivative financial instruments.

A) Original financial instruments

Original financial instruments are trade accounts receivable and payable

(main business) and financial receivables and debts. Existing original financial

instruments are evident from the balance sheet.

IAS 39 divides the original financial instruments carried on the asset side in the

following categories: for trading, held to maturity and available for sale. This

classification mandates the reporting at market value or at acquisition costs,

which will be explained further later on. Original financial instruments carried as

liabilities are reported at their face value or at the higher redemption value

according to the principle of carried acquisition costs.

Credit risk

Credit risk describes losses which can occur through non-fulfillment of contrac-

tual obligations of individual partners.

The imminent credit risk in the main business is mostly hedged through credit

insurance and bank securities (guarantees, letters of credit). Internal guidelines

establish credit criteria and therefore control credit risk from original financial

instruments, for instance through bank limits.

The credit risk for derivative financial instruments is limited to transactions with

positive market value and of those to replacement cost. Derivative transactions

are almost exclusively based on standardized global contracts for financial

futures.

Liquidity risk

Liquidity risk is the risk to be able to access financial funds at anytime to be

able to pay liabilities incurred.

Apart from financial planning, a correspondent financial policy and the possibility

to utilize revolving credit agreements with banks to their limits, a contractually

agreed liquidity reserve of EUR 100 million exists to bridge possible downturns

due to the economy.



The sources of financing are selected on the basis of the principle of bank

independence.

Price risk

Determination of price risk: voestalpine AG, to quantify interest and currency

risk, utilizes the value at risk concept. The maximum loss potential for the

next business day and year is determined monthly with a 95 % certainty. The

correlation of the individual currencies is taken into account. The interest rate

management also utilizes the present value basis point method.

Currency risk

Currency risk arises from the fact that the value of a financial instrument can

change due to exchange rate fluctuations.

A first hedge is initially provided through items that are naturally self contained,

for instance trade receivables in USD opposed to liabilities for the purchase

of raw materials in USD (USD netting). A further possibility arises from the

utilization of derivative hedging instruments. voestalpine AG hedges the

budgeted foreign currency payment flows (net) of the next 12 months. Hedging

for a longer term only occurs in the case of contractual business projects.

The coverage ratio is between 50 % and 100 % per quarter. The further the cash

flow is in the future, the lower the security ratio.

In the financial year 2002/2003, hedge accounting to hedge foreign currency

payment flows as defined by IAS 39 was applied for the first time.

Interest rate risk

Interest rate risk results from fluctuation in the market rate of interest, which can

lead to fluctuation in the value of a financial instrument.

voestalpine AG differentiates between cash flow risk (the risk that interest

expenses or interest income change for the worse) for variable interest financial

instruments and cash value risk for fixed interest financial instruments.

Currently, the interest rate is only secured through cash flow hedges. This year,

hedge accounting was for the first time applied to these cash flow hedges. The

changes in market value of derivative hedge instruments totaling EUR 3.81

million were recognized in such a way as to reduce equity.

Should the interest rate rise by 1 %, net interest expense for variable

interest financial instruments would increase by EUR 5.15 million (prior year:

EUR 3.31 million).

Foreign currency portfolio(Net)Financial year 2002/2003

Outflows are prevalent in USD, inflows prevail in other currencies.

70% USD

13%GBP

9% SEK

5 %CAD

3% OTHERS

102


The cash value risk determined on the basis of the present value basis point

method as of 31/3/2003 for fixed interest financial instruments on the asset side

amounts to EUR 3.88 million (prior year: EUR 5,45 million) and on the liabilities

side EUR 14.96 million (prior year: EUR 13.98 million) in case of an interest rate

change of 1 %. In case of an interest rate increase of 1 %, voestalpine AG would

have a net cash value loss of EUR 11.08 million (prior year: EUR 8.53 million for

a drop in interest rates of 1 %).

With an interest rate commitment of 2.5 years, the weighted average on the

asset side is 4.03 % and on the liabilities side with an interest rate commitment

of 2.4 years it amounts to 3.9 %.

Current* Weighted Average Sensitivity at Cash flow Value atsituation average interest 1 % interest rate risk Risk

interest rate rate term changein EUR mill. in EUR mill. in EUR mill. in EUR mill.

Assets 314 4.03 % 2.5 years –3.9 –1,0 –4.7

Liabilities 1,048 3.90 % 2.4 years 15,0 6.1 17.3

Net –734 0.13 % 11.1 5.1 12.6

LIABILITIES ASSETS NET

9 years 10 years8 years7 years6 years5 years4 years3 years2 years1 year

-2,0

-1,5

-1,0

-0,5

0,0

0,5

1,0

1,5

2,0

2,5

3,0

Interest rate terms (change in cash value given 1% increase in interest rates for the respective interest rate terms) in EUR million



The items on the assets side are, in an amount of EUR 208.8 million (prior year:

EUR 268.1 million), invested in the securities funds V47 and V54. Apart from

these funds, a total of EUR 17.9 million is invested in securities, while cash in

bank deposits amounts to EUR 87.3 million. The entire securities portfolio is

classified as available for sale and therefore reported at market values, which

are calculated on the basis of stock exchange prices. There are four sub-funds,

which are contained in two umbrella funds, one of which is used to cover

severance and pension commitments.

The investment criteria in the sub-funds are as follows:

V 101: money market fund, primarily investing in floaters and bonds with short

remaining terms.

V 102: investment fund for medium-term investments with maturities between

3 and 7 years, focusing on government bonds in Austria and Germany

as well as liquid mortgage bonds in Germany.

V 103: investment fund for long-term investments with maturities between

7 and 12 years, focusing on government bonds in Austria and Germany

as well as bonds with excellent liquidity.

The following applies for all three funds:

The investment currency is exclusively the Euro. The lower limit of the credit

rating is AA-, exceptions are made only for selected bonds of Austrian issuers

without international ratings.

V 104: international share fund, the investments of which are in line with the

Morgan Stanley World and Europe indexes. The foreign currency risk is

hedged through exchange rate hedges.

The umbrella funds V54 and V47 were able to achieve increases in value in spite

of the fact that the capital markets were confronted with a very difficult situation

during the past year. The performance of the V54 during the financial year

amounted to 4.81 %, thus exceeding the performance of the benchmark. The

performance of the V47 amounted to 6.39 %, i.e. it remained slightly below the

benchmark.

The portfolio carried on the liabilities side was entered entirely without dis-

counts, the acquisition costs carried forward are, therefore, equal to the nominal

values.

104


B) Derivative financial instruments

Derivative Financial Instruments are used exclusively for hedging and include

interest rate and currency swaps, cross currency swaps, currency futures and

currency options.

Risk from the fluctuation of the price of raw materials (excluding currency risk)

is not hedged using derivative instruments.

Portfolio of open derivative financial instruments as of 31/3/2003:

Nominal valuein EUR million Fair value Term

Currency futures

(incl. currency swaps) 158 0.4 90 % less than 1 year

Currency options 33 –1.1 Less than 1 year

Interest rate options 22 –0.7 < 5 years

Interest rate swap 149 –4.8 31 % > 5 years

Total 362 –6.2

Fair value

Derivative currency transactions are valued daily according to the mark to

market method, interest rate transactions are valued monthly. During the evaluation

the value is determined that could be realized, if the hedging operation was

netted (including transaction cost and bid-offer spreads).

The scope of activities is detailed in internal guidelines. To ensure efficient

risk control and based on the principle of multiple control, the front office

(transaction contracting) and the back office (transaction processing) as well as

entry into the books is organizationally separate.

The business practices employed are audited annually by an international

auditor.

F. Notes to the income statement

15. Sales revenue

The companies of voestalpine Group achieved total sales of EUR 5,824.66

million for the 2002/2003 financial year (previous year: EUR 4,421.58 million).

After elimination of internal sales of EUR 1,432.73 million (previous year: EUR

1,067.87 million), the external sales amounted to EUR 4,391.94 million (previous

year: EUR 3,353.71 million). Sales are almost exclusively achieved by selling

goods. Revenues from the provision of services are of minor importance.

Sales by division

2002/2003 2001/2002in EUR mill. in EUR mill.

voestalpine Stahl 2,188.53 2,001.39

voestalpine Bahnsysteme 1,247.69 891.51

voestalpine Profilform 450.36 463.11

voestalpine motion 757.80 172.97

External sales volume of the divisions 4,644.38 3,528.98

Consolidation between divisions –252.44 –175.27

External sales for the Group 4,391.94 3,353.71

Sales by region (from the point of view of voestalpine AG)


Sales revenue domestic 802.93 769.85

Sales revenue export 2,040.95 1,949.11

Sales revenue foreign 1,548.06 634.75

4,391.94 3,353.71

16. Cost of goods sold

The manufacturing costs include personnel expenses amounting to EUR 853.91

million (prior year: EUR 632.35 million) and depreciation on tangible and intangible

assets of EUR 251.49 million (prior year: EUR 206.31 million). The remaining

expenses reported as manufacturing costs comprise primarily services and

materials (in particular prematerials and energy) from third parties utilized during

the production process of sold products. The material expenses included in the

production costs for the period under review amount to EUR 2.171,64 million



106


(prior year: EUR 1,659.21 million); the total cost of materials for the

period under review amounts to EUR 2,245.62 million (prior year: EUR 1,714.86

million).

17. Other operating income

Composition:


Income from the disposaland appreciation of fixed assetswith the exception of financial assets 16.65 21.33

Income from the release of provisions 22.26 16.38

Other operating income 128.21 91.48

167.12 129.19

The income from the appreciation of fixed assets with the exception of financial

assets is mainly comprised of income from the sale of real estate.

Other income comprises in particular income from secondary transactions and

realized exchange rate profits from currency translation. The voestalpine AG

Group presents all income as part of other operating income that is not directly

attributable to the core business income (for instance energy supply, EDP

services and on-site services). The investment growth premium granted during

the business year in order to stimulate economic development is reported under

the item “other operating income” and amounts to EUR 12 million. The invest-

ment growth premium in its entirety is reported as an item impacting income for

the year under review, since the granting of the premium is not contingent upon

further conditions (e.g. retention period for the investment assets).

18. Cost of sales

The cost of sales includes in particular expenses incurred during sales activities

such as marketing, distribution and logistics.

19. Administrative expenses

This item includes all expenses for general administration, provided they are not

part of manufacturing expenses.



20. Other operating expenses


Taxes, insofar as they are not taxes onincome and earnings 7.57 4.45

Depreciation of goodwill 12.30 7.78

Book losses from the sale of fixed assets 0.77 1.54

Other operating expenses 141.74 180.32

162.38 194.09

The other operating expenses comprise in particular expenses in relation to

secondary transactions, the income from which is reported in other operating

income (see item 17 “other operating income”).

21. Investment income


Income from associated companies 12.67 13.96

Income from other affiliated companies 1.01 2.06

Income from other investments 0.18 0.30

Expenses from financial assets –1.79 –5.14

12.07 11.18

22. Interest result


Interest and similar income 34.54 19.96

Interest and similar expenses –106.78 –83.91

Income from securities 8.07 23.78

(Of which from affiliated companies) (0.00) (0.00)

Income from loans 1.90 0.68

(Of which from affiliated companies) (0.13) (0.66)

–62.27 –39.49

108


The item interest and similar expenses contains the interest portion of the

allocation to social capital provisions of EUR 23.28 million (prior year:

EUR 21.28 million).

23. Other financial result


Result from the sale of financial assets 0.55 0.38

Income from the appreciation of financial assets 1.45 0.00

Result from the sale of financial assets held as current assets 0.53 –0.47

Depreciation on other financial assets and securities held as current assets –53.40 –40.34

–50.87 –40.43

The item “depreciation on securities held as current assets” includes a devalua-

tion amount from the balance sheet valuation of VA Technologie AG shares of

EUR 39.63 million (previous year: EUR 31.37 million).

24. Taxes on income and earning

Taxes on income and earnings, aside from the taxes on income and earnings

paid or owed by the individual companies, also reports deferred tax accruals.


Income tax expense 52.05 33.25

Deferred tax accruals –16.42 –1.35

35.63 31.90

The income tax expenses include non-recurrent tax revenues of EUR 1.80

million (prior year: non-recurrent tax expense of EUR 0.20 million).



The difference between the calculated income tax (profit before taxes multiplied

by the national tax rate of 34 %) and the income tax expense for 2002/2003

according to the income statement of EUR 35.64 million is due to the following

reasons:


Income before income tax 121.96 90.78

Of which 34 % calculated tax expense 41.47 30.87

– foreign tax rates 1.70 0.60

– investment promotion 0.00 –1.51

– tax free investment income –4.10 –3.89

– non-recurring tax expenses / revenues –1.80 1.75

– other non-temporary differences –1.63 4.08

Income tax expense according to income statement 35.63 31.90

Consolidated tax rate in % 29.2 % 35.1 %


The profit distributed to other partners amounts to EUR 8.35 million (prior year:

EUR 3.96 million).

110


G) Notes to the cash flow statement

The cash flow statement segments the inflow and outflow of funds during the

year under review according to IAS 7 in "operations", "investment activities" and

"financial activities".

The cash flow statement is derived by the indirect method from the consoli-

dated financial statements of voestalpine AG.

26. Cash flow from operations

Fund inflows and outflows from interest payments made or received and from

income taxes are included in the cash flow from operations, with interest ex-

penses and income in general payable, with the exception of the interest

component for social capital. A dividend of EUR 12.69 million (prior year:

EUR 12.90 million) was received from associated companies.

Under the item “other non-cash income / expenses”, the non-cash depreciation

of the VA Technologie shares, in particular, is reversed.

27. Cash flow from investment activities

The cash flow from investment activities from the acquisition of subsidiaries

amounts to EUR 202.93 million (prior year: EUR 170.18 million), the cash flow

from the sale of subsidiaries amounts to EUR 0.00 million (prior year: EUR 13.89

million). In addition, currency or equivalents taken over from these companies

amount to EUR 14.00 million (prior year: EUR 27.67 million).

28. Cash flow from financing activities

Dividend payments are reported in the cash flow from financing activities.

During the 2002/2003 financial year, dividend payments from voestalpine AG

amounted to EUR 47.43 million (prior year: EUR 62.55 million).



29. Fund of liquid assets

The fund of liquid assets exclusively comprises, pursuant to the narrow

definition of IAS 7, balances with credit institutions and cash in hand amounting

to EUR 114.63 million (prior year: EUR 166.80 million).

There are no restrictions on the use of the currency and currency equivalents of

the Group contained in the fund during the financial year 2002/2003 (IAS 7.48).

112


H. Other remarks

30. Segmented reporting

Following the strategic reorientation, the divisional segmentation into the two

divisions flat and long products was abandoned in the financial year 2001/2002.

The new structure includes the Divisions Steel, Railway Systems, Profilform and

motion. This segmentation corresponds to the internal organizational and

management structure of the Group and forms the basis of primary segment

reporting.

Amounts from netting between segments are based on comparable market

conditions.

Secondary reporting segments are structured according to the location of the

Group companies (IAS 14.69).

Division DivisionSteel Railway Systems

2002/2003 2001/2002 2002/2003 2001/2002in EUR mill. in EUR mill. in EUR mill. in EUR mill.

Sales revenue (total) 2,949.18 2,564.77 1,626.94 1,193.18

Of which internal sales –760.65 –563.37 –379.25 –301.67

Sales by segment 2,188.53 2,001.40 1,247.69 891.51

Operating result (EBIT) 116.13 101.45 64.13 46.28

Income from associatedcompanies 8.22 8.36 0.00 0.08

Assets by segment 2,140.28 2,207.91 1,282.55 902.19

Liabilities by segment 1,238.01 1,458.53 753.52 571.79

Investments in associatedcompanies 32.81 34.86 0.00 0.18

Investments 1) 244.03 197.69 283.53 95.33

Depreciation 2) 145.96 142.02 69.06 59.25

EBITD 262.09 243.47 133.19 105.53

Employees (not including apprentices) 9,342 9,232 6,865 5,030



1) Consolidated2) Intangible and tangible assets

Division division Other/Profilform motion consolidation Group

2002/2003 2001/2002 2002/2003 2001/2002 2002/2003 2001/2002 2002/2003 2001/2002in EUR mill. in EUR mill. in EUR mill. in EUR mill. in EUR mill. in EUR mill. in EUR mill. in EUR mill.

464.44 476.72 758.21 172.97 25.89 13.94 5,824.66 4,421.58

–14.08 –13.61 –0.41 0.00 –278.33 –189.22 –1,432.72 –1,067.87

450.36 463.11 757.80 172.97 –252.44 –175.28 4,391.94 3,353.71

39.05 39.33 29.17 –0.62 –25.44 –26.91 223.04 159.53

0.00 0.00 –0.99 0.00 5.44 5.52 12.67 13.96

379.95 374.29 863.93 641.81 –149.97 –39.13 4,516.74 4,087.07

200.67 202.56 627.38 550.47 –159.08 –312.43 2,660.50 2,470.92

0.00 0.00 9.67 10.67 9.85 9.54 52.33 55.25

29.88 37.56 62.59 268.37 –1.94 0.34 618.09 599.29

26.16 26.17 50.40 15.51 1.45 –0.23 293.03 242.72

65.21 65.50 79.57 14.89 –24.00 –27.14 516.06 402.25

2,162 2,090 4,062 696 306 81 22,737 17,129

European Otherin EUR million Austria Union countries Consolidation Group

2002/2003 2001/2002 2002/2003 2001/2002 2002/2003 2001/2002 2002/2003 2001/2002 2002/2003 2001/2002

External sales1 3,123.11 2,780.10 1,192.18 470.06 76.65 103.54 0.00 0.01 4,391.94 3,353.71

Assets by segment 6,524.56 5,565.77 1,316.49 1,018.93 92.78 96.51 –3,417.09 –2,594.14 4,516.74 4,087.07

Liabilities by segment 3,155.74 2,918.14 886.97 758.63 43.90 42.62 –1,426.11 –1,298.80 2,660.50 2,420.59

Investments2 508.04 340.45 99.91 238.35 10.14 20.48 0.00 0.01 618.09 599.29

114


31. Details on executive bodies and employees

Total personnel expenses are comprised as follows:


Wages 587.77 388.11

Salaries 325.29 268.02

Expenses for severance payments 14.57 9.29

Expenses for pensions 18.31 2.27

Social security contributions dependent onsalary and mandatory contributions 190.32 166.79

Other social security expenses 11.90 9.95

1,148.16 844.44

The expenses for severance and pension payments include payments and

adjustments of the provisions for severance and pension payments.

The number of employees during the 2002/2003 financial year developed as follows:

31/3/2003 31/3/2002Balance Balance

sheet date Average1 sheet date Average1

Employees 16,401 15,265 11,809 11,242

Salaried employees 6,336 5,863 5,320 5,096

Apprentices 644 610 501 494

23,381 21,738 17,630 16,832

1 monthly average

During the period under review, the remuneration of the Management Board of

voestalpine AG amounted to EUR 3.82 million (prior year: EUR 2.91 million).



Provisions for other payments due in the long-term to members of the Manage-

ment Board of voestalpine AG exist on 31/3/2003 for anniversary bonus,

severance pay and pension obligations. During the year under review, the

allocations to the provisions amounted to EUR 0.13 million (anniversary

bonuses), EUR 0.24 million (severance pay) and EUR 1.65 million (pensions).

Emoluments paid to the members of the Supervisory Board and other payments

to the Supervisory Board amount to EUR 0.17 million for the financial year

2002/2003 (prior year: EUR 0.19 million).

32. Earnings per share

Earnings per share are determined according to IAS 33, by dividing the net

profit for the year after minority interest by the number of outstanding shares.

Due to the share repurchase that took place during the year under review (see

item 8, “group equity”) the number of shares for the calculation of the “dilutive

earnings per share” is 39,156,341 differing from the total number of shares

(prior year: 32.656,929).

2002/2003 2001/2002

Consolidated net profit for the year (in EUR mill.) 77.97 54.92

Average number of outstanding shares (in mill.) 39.16 32.66

Dilutive earnings per share (in EUR) 1.99 1.68

Total numbers of shares (in mill.) 39.60 33.00

Basic earnings per share (in EUR) 1.97 1.66

116


33. Close relationships with other legal entities

The following relationships exist between the consolidated/pro rata consolidated

companies and the most important companies not included in the Group's

scope of consolidation by way of full or pro rata consolidation:

The companies included in the scope of consolidation during the 2002/2003

financial year achieved sales revenues amounting to approximately EUR 155.68

million (prior year: EUR 148.99 million) from trade accounts receivable from

non-consolidated Group companies. At the same time, trade accounts payable

from non-consolidated Group companies to consolidated Group companies

in the amount of EUR 10.43 million (prior year: EUR 18.81 million) and other

operating expenses totaling approximately EUR 33.91 million (prior year:

EUR 37.53 million) were included in the consolidated income statement. On the

balance sheet date these relationships with non-consolidated Group companies

resulted in receivables of approximately EUR 39.98 million (prior year:

EUR 32.46 million) and liabilities of approximately EUR 12.79 million (prior year:

EUR 12.43 million). The fact that these Group companies are not consolidated

has no significant impact on the net worth, financial and earnings situation of the

company. The non-consolidated companies in particular employ temporary

employees to cover short-term personnel shortages (31/3/2003: 563; prior year:

641).



34. Stock option plan

During the 2001/2002 financial year, voestalpine AG started a stock option plan

for the management of the Group. The members of the Management Board

were granted a total of 175,027 options, senior executives holding key positions

24,360 options.

Each option entitles the bearer, after fulfilling the necessary prerequisites,

to subscribe for one voestalpine share at the fixed exercise price. It is also pos-

sible for the option holder to elect to pay the difference between the option price

and the closing price of the voestalpine share. The option price is the average

closing price of the voestalpine share during the fifteen trading days following the

Annual General Shareholders‘ Meeting on 2/7/2002 and is fixed at EUR 34.57.

The exercise of the option is tied to the following development of the share price

of the voestalpine share: if the price on the day of exercise is at least 15 %

above the reference price then a maximum of 50 % of the options can be

exercised. If the share price on the day of exercise is at least 20 % above

the reference price, 100 % of the options can be exercised. Also, at the time of

exercise, the participants have to be employed by voestalpine AG or one of the

Group companies.

The options granted to each participant can be exercised at the earliest after

1/8/2003 and at the latest on 31/7/2006. During their term, the options can only

be exercised within twenty trading days as of the publication of the interim

reports and the annual report of voestalpine AG.

The option warrants and the rights to exercise the options are non-transferable.

The voestalpine shares acquired on the basis of the exercise of such options

can be sold without restrictions. The options on the balance sheet date are

reported at an estimated value of EUR 1.02 (prior year: EUR 4.22) per option.

This amount will be accrued over the blocking period of 24 months by way of a

provision. This provision amounts to EUR 0.86 million at 31/3/2003 (prior year:

EUR 1.43 million). The market value of the options is determined on the basis of

the Black Scholes option price formula.

118


35. Employee participation

In addition to the employee participation plan implemented during the

2001/2002 financial year, in the course of which the employees were assigned

one percent of the shares of voestalpine AG in return for a wage/salary con-

cession (calculation based on cash value, for further details please refer to the

notes to the consolidated financial statements using IAS for 2001/2002; item

35), a further employee participation plan was implemented in the 2002/2003

financial year.

The employee participation plan 2002/2003 is based on a collective bargaining

agreement and is part of a wage and salary increase effective as of 1 November

2002. In the framework of this agreement, 0.5 % of the total amount of the

salaries and wages necessary for the actual increase was used for the purpose

of a participation of the employees in voestalpine AG.

The actual amount results from the amount of the wage/salary concession

determined every month on the basis of 1/11/2002 applying an annual increase

of 3.5 %.

To implement the model, an agreement to expand the employee participation

scheme was concluded on 24/3/2002 between the company and the employees’

council. The shares due to the employees were acquired by the private founda-

tion of voestalpine employees, which transfers it to the employees according to

their respective amounts of wage/salary concession.

On the whole, the employees (or the private foundation of voestalpine employees

in its capacity as the employees’ trustee) held approx. 6.5 % of the shares of

voestalpine AG at the balance sheet date (31/3/2003).

36. Significant events after the balance sheet date

The present consolidated financial statements were completed and signed by

the Management Board of voestalpine AG on 23/5/2003.

On 14/5/2003, voestalpine AG sold its entire participation (19.05 % of the

shares) of VA TECHNOLOGIE AG to a group of investors. This transaction will

be reflected in the balance sheet in the first quarter of the financial year

2003/2004.



37. Profit distribution

The individual financial statement for 31/3/2003 for voestalpine AG, presented

according to the regulations of the Austrian Commercial Code, HGB, is the

basis for the distribution of profits. This financial statement, audited by Grant

Thornton Wirtschaftsprüfungs- und Steuerberatungs-GmbH, shows a balance

sheet profit of EUR 47.94 million. The Management Board will propose to the

Annual General Shareholders’ Meeting a distribution of EUR 1.20 per share with

dividend rights.

Linz, 23/5/2003

The Management Board

The consolidated annual financial statements of voestalpine AG, including all

relevant documents, have been submitted at the company register of the

commercial court Linz under company register no. FN 66209 t.

Franz Struzl Wolfgang Eder Werner Haidenthaler

Wolfgang Spreitzer Josef Mülner Franz Hirschmanner

120


AUDITOR’S REPORT and CERTIFICATION

according to section 245a

in connection with section 274 paragraph 5 HGB

We have audited the consolidated presentation of accounts

(consolidated financial statements and consolidated management report) of

voestalpine AG, Linz,

for 31/3/2003, comprised of the consolidated balance sheet, consolidated

income statement and consolidated cash flow statement, the notes to the finan-

cial statements and the consolidated management report for the 2002/2003

financial year. The consolidated presentation of accounts in line with section

245a HGB comprises documents mandated by the standards of the International

Accounting Standards Committee (IASC) as well as an orderly presentation

according to section 267 HGB (Art. 36 of the 7th EU Directive) of the additional

disclosure required for the consolidated management report. The consolidated

presentation of accounts is a responsibility of the Management Board of the

company. It is our task to ascertain, based on the audit we have performed, that

the consolidated presentation of accounts is in line with the International

Accounting Standards (IAS). Other auditors in part performed the audit of

individual subsidiaries. Our audit result in the cases of these subsidiaries is entire-

ly based on their certification.

We have conducted our audit taking into account the principles of proper annual

account auditing, and also taking into account the International Standards on

Auditing (ISA). Accordingly, the audit is to be planned and executed in a way

that ensures that it can be judged with sufficient certainty that the consolidated

presentation of accounts is free of essential false statements. As part of the

audit, proof for valuations and statements in the consolidated presentation of

accounts was judged based on spot checks. The audit comprises a judgment

about the accounting principles applied (reporting and valuation methods) and

of essential assessments of the Management Board as well as the appreciation

of the overall presentation of the consolidated presentation of accounts.

We believe that our audit is a sufficiently secure basis for our audit certification.



Based on the findings during the audit we have reached the following conclusion:

We are convinced that the annual presentation of accounts in all essential matters

gives a true and fair view of the net worth and financial status of the Group as

of 31/3/2003 as well as of the income position and the cash flows during the

recent financial year 2002/2003 in accordance with IAS requirements. The

prerequisites for the release of the company from presenting a consolidated

annual report according to Austrian Law have been met (section 245a HGB).

The consolidated management report conforms to the consolidated financial

statements.

Vienna, 23/5/2003

Grant Thornton

Wirtschaftsprüfungs- und Steuerberatungs-GmbH

Member Firm of Grant Thornton International

Univ. Doz. Dr. Walter Platzer Dr. Franz Schiessel

Certified Auditors and Tax Consultants

122


Group companiesvoestalpine AG

Domicile of

Symbol the company

voestalpine Stahl GmbH VAS Linz

voestalpine Grobblech GmbH & Co KG VAGB Linz

voestalpine Grobblech GmbH VAGROB Linz

G.C. De Jong Construction B.V. GCC Zierikzee / Netherlands

voestalpine Schmiede GmbH VASCH Linz

Logistik Service GmbH LOGSERV Linz

Cargo Service GmbH CARGO Linz

voestalpine Gießerei Linz GmbH VAGL Linz

voestalpine Gießerei Traisen GmbH VAGT Traisen

voestalpine Stahlhandel GmbH VASTH Linz

Köllensperger Stahlhandel GmbH & Co KG KOELL Thaur bei Innsbruck

Köllensperger Stahlhandel GmbH KOESTAHL Thaur bei Innsbruck

Richard Zimmermann Eisengroßhandel ZIMME St. Pölten

Gesellschaft m.b.H.

NEPTUN STAHLHANDEL GmbH NEP Linz

ARGE Baustahl Eisen Blasy-Neptun GmbH ARGE Innsbruck

voestalpine Stahlhandel Budapest Kft. VASTUN Budapest / Hungary

voestalpine Stahlhandel spol. s r.o. VASTCZ Pardubice / Czech Republic

VOEST-ALPINE STAHLHANDEL d.o.o. VASTSLO Maribor / Slovenia

VOEST-ALPINE STAHLHANDEL, zastupenie v SR VASTSK Nitra / Slovakia

VAS – TAD Edelstahl Handels GmbH VASTAD Linz

VOEST-ALPINE GmbH München VASTMUE Munich / Germany

Vereinigte Biege-Gesellschaft m.b.H. BIEGE Klagenfurt

BWS BEWEHRUNGSSTAHL GmbH BWS Vienna

VOEST-ALPINE STAHLHANDEL Polska Sp. z o.o. VASTHPOL Gliwice / Poland

VETING-VOEST ALPINE STAHLHANDEL GRUPA

Za proizvodnju i trgovinu metalima d.o.o. in Liquidation VETING Varazdin / Croatia

Veting voestalpine d.o.o. VETINGVA Varazdin / Croatia

„Veting voestalpinee Stahlhandel d.o.o.

za proizvodnju i trgovinu Sarajevo“ VETSERB Sarajevo / Serbia

MONTEKS d.o.o. MONT Varazdin / Croatia

voestalpine Stahl Service Center GmbH VASSC Linz

METALSERVICE S.P.A. METALSER Cittadella / Italy

Herzog Coilex GmbH COILEX Stuttgart / Germany

Division Steel



Type of Interest Parent

Consolidation held company

KV 99.000 % VAAG

1.000 % DBG

KV 100.000 % VAS

KV 100.000 % VAS

KE 30.000 % VAGB

KV 100.000 % VAS

KV 100.000 % VAS

KO 100.000 % LOGSERV

KV 100.000 % VAS

KV 99.667 % VAGL

0.333 % DBG

KV 99.999 % VAS

0.001 % DBG

KV 60.000 % VASTH

KO 60.000 % VASTH

KE 99.800 % NEP

0.200 % VAAD

KV 100.000 % VASTH

KO 50.000 % NEP

KO 100.000 % VASTH

KV 100.000 % VASTH

KO 100.000 % VASTH

KO 100.000 % VASTH

KE 50.000 % VASTH

KO 100.000 % VASTH

KO 67.000 % NEP

KO 36.000 % NEP

KO 100.000 % VASTH

KV 60.000 % VASTH

KO 60.000 % VASTH

100.000 % VETINGVA

KO 100.000 % VETING

KV 99.800 % VAS

0.200 % DBG

KE 40.000 % VASSC

KE 25.100 % VASSC

124


Domicile of

Symbol the company

voestalpine Rohstoffhandel GmbH VAROH Vienna

SCHROTT - WALTNER Eisen, Metalle, Maschinen

Gesellschaft mit beschränkter Haftung SCHW Graz

Eisenhandel Gebeshuber GmbH GEB Wolfern

SROT GEBESHUBER spol. s.r.o. GEBSR Brünn / Czech Republic

voestalpine Rohstoffbeschaffungs GmbH VAROB Linz

Importkohle Gesellschaft m.b.H. IMPORTK Vienna

VOEST-ALPINE MECHATRONICS GmbH VAMECH Linz

DWA DUNAFERR - VOEST-ALPINE

Hideghengermü Kft. DUNAFERR Dunaujváros / Hungary

GEORG FISCHER FITTINGS GmbH FIT Traisen

Industrie-Logistik-Linz GmbH ILL Linz

Stahlservice Rauschenberger Verwaltungs-GmbH RAUVW Asperg / Germany

Stahlservice Rauschenberger GmbH u. Co KG RAU Asperg / Germany

Wuppermann Austria Gesellschaft m.b.H. WUPPERM Judenburg

CATERING UND BETRIEBSSERVICE GmbH CBS Linz

AUSTROBEL GmbH AUSTROB Shlobin / Belorussia

Hüttensand Export und Handel GmbH HUESAN Linz

Linzer Schlackenaufbereitungs- und

vertriebsgesellschaft m.b.H. LISAG Linz

voestalpine Personalberatung und -systeme GmbH VAPS Linz

voestalpine Personalservice GmbH VAPSERV Linz

VA OMV Personalholding GmbH VOP Linz

Kontext Druckerei GmbH KONTEX Linz

Werksgärtnerei Gesellschaft m.b.H. GAERT Linz

GWL Gebäude-, Wohnungs- und Liegenschafts-

Verwaltungsgesellschaft m.b.H. GWL Linz

Division Steel





KV 69.693 % VAS

12.899 % VADO

0.928 % DBG

KV 75.000 % VAROH

KV 99.990 % VAROH

0.010 % DBG

KO 80.000 % GEB

KV 75.100 % VAS

24.900 % VADO

KV 66.000 % VAROB

KV 58.000 % VAS

5.000 % VABS

KO 45..209% VAS

KE 49.000 % VAS

KE 25.100 % VAS

KO 100.000 % VAS

KV 100.000 % VAS

KE 30.000 % VAS

KV 100.000 % VAS

KO 50.000 % CBS

KO 30.000 % VAS

20.000 % VADO

KO 33.333 % VAS

KO 100.000 % VAS

KO 100.000 % VOP

KO 100.000 % VAPS

KO 64.800 % VAS

KO 100.000 % VAS

KO 76.000 % VAS

126



Domicile of

Symbol the company

voestalpine Bahnsysteme GmbH VABS Leoben-Donawitz

voestalpine Bahnsysteme Beteiligungs GmbH VABB Leoben-Donawitz

voestalpine Schienen GmbH VASI Leoben-Donawitz

voestalpine Stahl Donawitz GmbH VADO Leoben-Donawitz

VAK VOEST-ALPINE Klöckner Bahntechnik GmbH VABT Berlin / Germany

Liefergemeinschaft Gotthard-Basis Tunnel GmbH LGGBT Duisburg / Germany

TSTG Schienen Technik GmbH TSTG Duisburg / Germany

voestalpine Tubulars GmbH & Co KG VAKI Kindberg

voestalpine Tubulars GmbH VAKILI Linz

VOEST-ALPINE TUBULAR CORP. VATC Houston / USA

VOEST-ALPINE SOUTH AMERICA, C.A. VASA Caracas / Venezuela

VOEST-ALPINE STEEL MIDDLE EAST FZE VAME Dubai / UAR

VAE GmbH VAE Vienna

VAE Eisenbahnsysteme GmbH VAEE Zeltweg

Weichenwerk Wörth GmbH WWG St. Georgen am Steinfeld

VAE Nortrak North America Incorporation VAENNA Cheyenne / USA

VAE NORTRAK LTD. VAN Vancouver / Canada

VAE Nortrak Inc. VANI Birmingham / USA

VAE Nortrak Cheyenne Inc. VANCI Cheyenne / USA

VAE Holding Deutschland GmbH VAEHD Butzbach / Germany

VAE Geschäftsführung (Deutschland) GmbH VAEGF Butzbach / Germany

BWG Gesellschaft mbH & CO KG BWG Butzbach / Germany

WBG Weichenwerk Brandenburg GmbH WBG Brandenburg / Germany

HBW Light Rail – Haagsche Wisselbouwbedrijf B.V. HBW Den Haag / Netherlands

WBN (Wisselbouw Nederland B.V.) WBN Utrecht / Netherlands

VAE Railway Systems Pty.Ltd. VAERAIL Mackay / Australia

VAMAV Vasúti Berendezések Kft. VAMAV Gyöngyös / Hungary

VAE Riga SIA VAERIGA Riga / Latvia

VAE Legetecha UAB VAELEGE Vilnius / Lithuania

JEZ Sistemas Ferroviarios S.L. JEZ Llodio / Spain

VAE UK Ltd. VAEUK Edinburgh / Great Britain

VAE Africa (Pty) Ltd. VAESA Isando / South Africa

VAE Perway (Pty) Ltd. TRANS Bloemfontein / South Africa

VAE Sofia OOD VAESOFIA Sofia / Bulgary





KV 100.000 % VAAG

KV 100.000 % VABS

KV 99.000 % VABS

1.000 % DBG

KV 99.900 % VABS

0.100 % DBG

KV 100.000 % VABS

KE 50.000 % VABT

KV 100.000 % VABS

KQ 49.985 % VADO

0.010 % VAKILI

KQ 50.000 % VABS

KO 100.000 % VAKILI

KO 100.000 % VAKILI

KO 100.000 % VAKILI

KV 100.000 % VABS

KV 100.000 % VAE

KV 70.000 % VAEE

KV 83.500 % VAE

KV 100.000 % VAENNA

KV 100.000 % VAENNA

KV 100.000 % VAENNA

KV 100.000 % VAE

KV 100.000 % VAE

KV 99.997% VAEHD

0.003 % VAEGF

KV 100.000 % BWG

KV 51.400 % BWG

KV 100.000 % VAE

KV 100.000 % VAE

KV 50.000 % VAE

KV 93.420 % VAE

KV 66.000 % VAE

KV 50.000 % VAE

KV 100.000 % VAE

KV 100.000 % VAE

KV 65.000 % VAE

KV 51.000 % VAE

128



Domicile of

Symbol the company

VAE Apcarom S.A. VAEAPC Buzau / Romania

VAE Italia S.r.l. VAEITAL Rome / Italy

VAE Polska Sp.z.o.o. VAEPOL Gdansk / Poland

Gerfer Lda. GERFER Lissabon / Portugal

VAE Murom LLC MUROM Moscow / Russia

Burbiola S.A. BURBIOL Amurrio / Spain

AJA UTE AJAUTE Spain

Rail Group – Firmengruppe Bahntechnik Brandenburg WBGRAIL Brandenburg / Germany

voestalpine Railpro B.V. RAIL Hilversum / Netherlands

voestalpine Austria Draht GmbH VAAD Bruck an der Mur

SCHMID SCHRAUBEN HAINFELD GmbH SSCH Hainfeld

voestalpine Personalservice Donawitz GmbH DVAPSL Linz

voestalpine Personalservice Donawitz GmbH & Co KG VAPSDO Leoben-Donawitz

Liegenschaftsverwaltungs GmbH LVG Leoben-Donawitz

division motion

Domicile of

Symbol the company

voestalpine motion gmbh AUTOH Linz

voestalpine Europlatinen GmbH & Co KG VAPL Linz

voestalpine Europlatinen GmbH EUPL Linz

TURINAUTO S.P.A. TURIN Torino

EUROWELD S.R.L. WELD Torino

ROTEC Zug AG ROTZU Zug / Switzerland

Rotec Vertriebs GmbH ROTVER Monheim / Germany

ROTEC Beteiligungs-GmbH RBG Monheim / Germany

voestalpine Rotec GmbH ROTMO Monheim / Germany

voestalpine Präzisrohrtechnik GmbH VAPRT Krieglach

ROTEC Benelux B.V.B.A. ROTBX Saint-Truiden / Belgium

Production Tube Cutting S.A. PTCF Ozoir la Ferrière / France





KV 79.730 % VAE

KV 95.000 % VAE

5.000 % VAEUK

KV 100.000 % VAE

KO 60.000 % VAE

KO 50.000 % VAE

KO 50.000 % JEZ

KO 33.000 % JEZ

KO 16.670 % WBG

KV 70.000 % VABS

KV 99.950 % VABS

0.050 % DBG

KV 99.800 % VAAD

0.200 % NEP

KV 100.000 % VABS

KV 100.000 % VABS

KO 98.000 % VABS

2.000 % DBG



KV 100.000 % VAAG

KV 100.000 % AUTOH

KV 100.000 % AUTOH

KE 33.330 % AUTOH

KV 92.000 % EUPL

KV 100.000 % AUTOH

KV 100.000 % ROTMO

KQ 50.000 % ROTMO

KV 56.579 % AUTOH

43.421 % ROTZU

KV 50.394 % RBG

49.606 % ROTMO

KV 99.900 % ROTMO

KV 99.990 % ROTMO

130


Domicile of

Symbol the company

PTC Iberica S.A. PTCI Okondo / Spain

ROTEC Iberica S.A. ROTIB Okondo / Spain

PTC Barcelona S.A. PTCB Barcelona / Spain

ROTEC Skandinavien AB ROTSK Halmstad / Sweden

Aceralia ROTEC S.L. ROTAC Bera de Bidasoa / Spain

Automatlego ROTEC Skandinavien AUTOLEG Bergkvara / Sweden

SCI Jean Monnet SCIJM Goussainville / France

Retrospective Limited RETRO Hinckley / Great Britain

Elmsteel Group Limited ELMG Hinckley / Great Britain

Elmsteel Inc ELMUS South Lafayette / USA

Elmsteel Limited ELMGB Hinckley / Great Britain

Elmsteel Tube Limited ELMTGB Hinckley / Great Britain

Elmsteel Polska sp zoo ELMPL Sroda Slaska / Poland

voestalpine Automotive Netherlands Holding BV SPC Bunschoten / Netherlands

Polynorm N.V. POLY Bunschoten / Netherlands

Polynorm Automotive Holding Inc. PAUTOUSH Novi (Michigan) / USA

Polynorm Automotive North America Inc. PAUTOUS Novi (Michigan) / USA

Polynorm Automotive Engineering Centre (UK) Ltd. PAUTOUK Worthing / Great Britain

Polynorm Plastics BV PPLASTNL Roosendaal / Netherlands

Polynorm Plastics UK Ltd. PPLASTUK St. Helens / Great Britain

Polynorm Grau Werkzeug- und PWERKZD Schwäbisch Gmünd /

Formenbau GmbH & Co. Germany

Bauer und Dittus GmbH & Co. KG BUDD Wiesbaum / Germany

Polynorm Immobilien GmbH & Co. KG PIMMOD Emsdetten / Germany

Flamco STAG Behälterbau GmbH FLABEHD Genthin / Germany

Flamco STAG GmbH FLAMCOD Genthin / Germany

Flamco UK Ltd. FLAMCOUK St. Helens / Great Britain

Polynorm GmbH PD Velbert / Germany

Polynorm Stadco PSTAD

Flamco Holding BV FHNL Bunschoten / Netherlands

Flamco Flexcon Vertriebsgesellschaft mbH FFAUT Vienna

Flamco Flexcon Sarl FFFRA Saint-Quen l'Aumone /

France

BT Befestigungstechnik AG BTCH Küssnacht / Switzerland

division motion





KV 64.230 % ROTIB

35.000 % ROTMO

KV 100.000 % ROTMO

KV 100.000 % ROTIB

KV 70.000 % ROTZU

30.000 % ROTMO

KO 25.000 % ROTMO

24.000 % ROTIB

KO 45.110 % ROTSK

KV 99.950 % ROTMO

KV 100.000 % ROTMO

KV 100.000 % RETRO

KV 100.000 % ELMG

KV 100.000 % ELMG

KV 100.000 % ELMG

KV 100.000 % ELMG

KV 100.000 % AUTOH

KV 100.000 % AUTOH

KV 100.000 % POLYINT

KV 100.000 % PAUTOUSH


KV 100.000 % POLYHOLD


KV 100.000 % PD

KV 100.000 % PD

KV 100.000 % TURHOLL

KV 100.000 % PD

KV 100.000 % FLABEHD

KV 100.000 % FFUK


KV 100.000 %





132


division motion

Domicile of

Symbol the company

Flamco Polska Sp. z o.o. FLAMPOL Poznan / Poland

Flamco Flexcon Ltd. FFUK St. Helens / Great Britain

Flamco Flexcon GmbH FFD Genthin / Germany

Body Systems do Brazil Ltda. BODYBRA Camacari BA / Brazil

Flamco I.M.Z. BV FLAMNL Zuthpen / Netherlands

Flamco Flexcon BV FFNL Bunschoten / Netherlands

Flamco BV FLAMCONL Gouda / Netherlands

Turnkey Holland BV TURHOLL Bunschoten / Netherlands

Polynorm Holland BV PHOLL Bunschoten / Netherlands

Polynorm Service & Supply BV PSERVNL Bunschoten / Netherlands

Polynorm Automotive BV PAUTONL Bunschoten / Netherlands

Polynorm International BV POLYINT Bunschoten / Netherlands

Polynorm Holland Holding BV POLYHOLD Bunschoten / Netherlands

Body Systems International BV BODYNL Bunschoten / Netherlands

Polynorm Automotive Deutschland GmbH PAUTOD Schwäbisch Gmünd /

Germany

Wemefa Horst Christopeit GmbH WEMD Velbert / Germany

voestalpine Matzner Holding GmbH HMHO Bissendorf / Germany

voestalpine Matzner GmbH Bissendorf / Germany

voestalpine Matzner GmbH & Co KG HMFE Bissendorf / Germany

voestalpine Matzner Fertigungs GmbH HMENF Bissendorf / Germany

voestalpine Matzner Engineering GmbH HMENE Bissendorf / Germany

CCE Systemhaus GmbH & Co KG HCCE Bissendorf / Germany

CCE Systemhaus GmbH HMENC Bissendorf / Germany

IAV Matzner Fahrzeugsicherheit GmbH & Co KG IAV Gifhorn / Germany








KE 24.000 % BODYNL

KV 100.000 % FLAMCONL







KV 100.000 % POLY

KV 100.000 % POLY

KQ 50.000 % POLYINT

KV 100.000 % PD


KV 90.000 % AUTOH

KO 100.000 % HMHO

KV 100.000 % HMHO

KV 100.000 % HMHO

KV 100.000 % HMHO

KV 100.000 % HMHO

KV 100.000 % HMHO

KO 50.000 % HMHO

134


Division Profilform

Domicile of

Symbol the company

voestalpine Krems GmbH VAKR Krems

voestalpine Krems Finaltechnik GmbH VAKF Krems

SADEF N.V. SADEF Hooglede-Gits / Belgium

SADEF FRANCE S.A.R.L. SADEFFR Nogent sur Marne /

France

voestalpine Profilform s.r.o. VAKCZ Vyskov / Czech Republic

voestalpine Präzisionsprofil GmbH PRÄPR Hürth / Germany

Global Rollforming Corporation GRC Shelbyville / USA

Roll Forming Corporation RFC Shelbyville / USA

VOEST-ALPINE KREMS U.K. plc VAKUK London / Great Britain

Metsec plc METSEC Oldbury / Great Britain

Energy Tubes Limited ENTUB Oldbury / Great Britain

HEP Sections Limited HEP Oldbury / Great Britain

Metal Sections Limited METAL Oldbury / Great Britain

Metsec Framing Limited MEFRA Oldbury / Great Britain

Metsec Engineering Products Limited METEP Oldbury / Great Britain

Metsec Profile Manipulation Limited METPRO Oldbury / Great Britain

Metsys Systems Limited MESYS Oldbury / Great Britain

Metframe Limited METFRA Oldbury / Great Britain

Metsec Building Products Limited METBP Oldbury / Great Britain

Gemeinnützige Donau-Ennstaler

Siedlungs-Aktiengesellschaft GEDESAG Krems





KV 99.000 % VAAG

1.000 % DBG

KV 99.000 % VAKR

1.000 % DBG

KV 99.000 % VAKR

1.000 % DBG

KO 90.000 % SADEF

10.000 % VAKR

KV 100.000 % VAKR

KV 100.000 % VAKR

KV 58.073 % VAKR

41.927% SADEF

KV 100.000 % GRC

KV 100.000 % VAKR

KV 100.000 % VAKUK

KV 100.000 % METSEC

KV 100.000 % METSEC

KV 100.000 % METSEC

KV 100.000 % METSEC

KV 100.000 % METSEC

KV 100.000 % METSEC

KV 100.000 % METSEC

KV 100.000 % METSEC

KV 100.000 % METSEC

KO 33.333% VAKR

136


Other companies

Domicile of

Symbol the company

VA Technologie Aktiengesellschaft VATECH Linz

VOEST-ALPINE Intertrading Aktiengesellschaft VAINT Linz

voestalpine Informationstechnologie GmbH VAIG Linz

voestalpine Dienstleistungs- und Finanzierungs GmbH VADF Munich / Germany

IVM Industieversicherungsmakler GmbH IVM Linz

APK-Pensionskasse Aktiengesellschaft APKP Vienna

Danube Equity Invest Management GmbH DEM Linz

Danube Beteiligungs Invest MF-AG DBI Linz

Danube Equity Invest AG DIE Linz

voestalpine Eurostahl GmbH VAEURO Linz

voestalpine Polska Sp.z o.o. VAKAT Krakow / Poland

voestalpine Scandinavia AB VASVEN Stockholm / Schweden

voestalpine Belgium NV/SA. VABELG Brussels / Belgium

voestalpine Danmark ApS. VADK Copenhagen / Denmark

voestalpine France S.A. VAFRANC Strasbourg / France

voestalpine Nederland B.V. VANL s’Gravenhage / Netherlands

voestalpine Jugoslavija d.o.o. VASERB Belgrade / Republic of Serbia

voestalpine Deutschland GmbH VAMUE Munich / Germany

voestalpine UK LTD VAUK London / Great Britain

voestalpine Italia S.p.A. VAMAI Milan / Italy

voestalpine Stahl d.o.o. VASLO Ljubljana / Slovenia

voestalpine Hungaria Kft. VAUNG Budapest / Hungary

voestalpine CR, s.r.o. VAPRAG Prague / Czech Republic

voestalpine Stahl d.o.o. VAKRO Zagreb / Croatia

voestalpine Norge AS VANOR Oslo / Norway

voestalpine Schweiz GmbH VAZUE Zurich / Switzerland

voestalpine USA Corp. VASTEEL New York / USA

Donauländische Baugesellschaft m.b.H. DBG Linz





KO 19.050 % VAAG

KE 38.500 % VAAG

KV 100.000 % VAAG

KV 100.000 % VAAG

KO 33.333% VAAG

KO 19.110 % VAAG

KV 100.000 % VAAG

KV 100.000 % DIE

KV 71.373 % VAEURO

KV 100.000 % VAAG

KO 100.000 % VAEURO

KO 100.000 % VAEURO

KO 100.000 % VAEURO

KO 100.000 % VAEURO

KO 99.831% VAEURO

KO 100.000 % VAEURO

KO 100.000 % VAEURO

KO 94.900 % VAEURO

5.100 % DBG

KO 100.000 % VAEURO

KO 99.000 % VAEURO

1.000 % DBG

KO 100.000 % VAEURO

KO 99.000 % VAEURO

1.000 % DBG

KO 100.000 % VAEURO

KO 100.000 % VAEURO

KO 100.000 % VAEURO

KO 100.000 % VAEURO

KO 100.000 % VAEURO

KV 100.000 % VAEURO

138

Glossary

FINANCIAL

Acquisition

One company taking over the interest

in another company.

Asset purchase

A type of transaction in which the

buyer purchases assets from the target

company, rather than shares.

Associated company

A company included in the consolidated

financial statements neither on a fully or

partially consolidated basis, but rather

according to the equity method; how-

ever, a company which is included in the

consolidation has a significant influence

on its business and financial policies.

ATX

Abbreviation for Austrian Traded Index:

Price index calculated by the Vienna

Stock Exchange and containing the

most actively traded shares on the

Vienna Stock Exchange.

Capital Employed

The total of fixed capital and borrowings

which is equivalent to total assets less

all liabilities which do not bear interest.


Corporate Governance is concerned

with holding the balance between

economic and social goals and

between individual and communal

goals. The corporate governance

framework is there to encourage the

efficient use of resources and equally

to require accountability for the

stewardship of those resources.

EBIT (Earnings before interest

and taxes)

Operating and non-operating profit

before the deduction of interest and

income taxes.

EBITDA (Earnings before interest,

taxes, depreciation, and amortization)

operating and non-operating profit

before the deduction of interest

and income taxes. Depreciation

and amortization expenses are

not included in the costs.

Endogenous growth

Economic growth generated by

forces within a company.

E-Procurement

Electronic procurement of goods and/or

services. E-Procurement combines the

use of Internet technology with procure-

ment best practices to streamline the

purchasing process and reduce costs.

Equity

Equity is the ownership interest in a

corporation, represented by the shares

of stock which are held by investors.

Exogenous growth

Economic growth generated

by acquisitions.

Glossary


Glossary

Free Cash Flow

The cash flow from operations

minus capital expenditures minus

cash dividends paid.

Free float

The number of shares that are

actively tradable in the market.

Gearing

Ratio of the net financial debt of a

company to its shareholders' equity.

This is a measure of the debt burden

of a company in relation to the

resources it has available.

IAS (International Accounting

Standards)

Accounting rules and procedures

developed by the International

Accounting Standards Committee

and to be administered by the IASB.

All EU countries are required to

adopt IAS by 2005.

Joint Venture

A form of business partnership between

two or more companies to engage in

a commercial enterprise with mutual

sharing of profits and losses.

Liquidity Ratio

A ratio that measures a company's

ability to pay off short-term debt as

it becomes due.

Market Capitalization

Value obtained by multiplying the market

price of a share by the number of issued

shares and in some cases of other listed

securities. It is the total value of a listed

company as determined by the market

at any given moment in time.

Ratings

An evaluation of credit quality of

a company. Investors and analysts

use ratings to assess the risk of

an investment.

Return on Equity

The ROE is calculated by the ratio

between the after-tax profit and the

average amount of equity as shown in

the balance sheet; it indicates the return

which the company achieves on the

capital it employs.

ROCE (Return on Capital Employed)

ROCE is the ratio of operating profits

generated to the amount of operating

capital invested.

Volatility

The degree of fluctuation for a given

price or rate, such as a stock price

or currency exchange rate.

Weighted Average Cost of Capital

(WACC)

An average representing the expected

return on all of a company’s securities.

Each source of capital is weighted

according to its prominence in the

company's capital structure.

140

Glossary

Body-in-white

Unpainted and untrimmed automotive

upper body structures.

Coating

The process of covering steel with

another material (tin, chrome, zinc),

primarily for corrosion resistance.

Coils

Steel sheet that has been wound.

A slab, once rolled in a hot-strip mill,

can be more than one mile long; coils

are the most efficient way to store

and transport sheet steel.

Coke

The basic fuel consumed in blast

furnaces in the smelting of iron.

Coke is a processed form of coal.

Cold working (rolling)

Changes in the structure and shape of

steel at a low temperature (often room

temperature). It is used to create a

permanent increase in the hardness

and strength of the steel.

Continuous casting

A method of pouring steel directly from

a ladle through a tundish into a mold,

shaped to form billets, blooms, or slabs.

TECHNICAL

Billet

A semi-finished steel form that is used

for “long” products: bars, channels or

other structural shapes.

Blanking

An early step in preparing flat-rolled

steel for use by an end user. A blank

is a section of sheet that has the same

outer dimensions as a specified part

(such as a car door or hood) but that

has not yet been stamped.

Blast furnace

A towering cylinder lined with heat-

resistant (refractory) bricks, used by

integrated steel mills to smelt iron from

ore. Its name comes from the “blast” of

hot air and gases forced up through the

iron ore, coke and limestone that load

the furnace.

Bloom

A semi-finished steel form whose

rectangular cross-section is more than

eight inches. This large cast steel shape

is broken down in the mill to produce

the familiar rails, I-beams, H-beams and

sheet piling. Blooms are also part of the

high-quality bar manufacturing process.

Reduction of a bloom to a much smaller

cross-section can improve the quality

of the metal.


Glossary

Hollow sections, see “Welded tubes”.

Hot rolled

Product that is sold in its “as produced

state” off the hot mill with no further

reduction or processing steps.

Hot mill

The rolling mill that reduces a hot slab

into a coil of specified thickness; the

whole processing is done at a relatively

high temperature (when the steel is

still “red”).

Laser-welded blanks

Two or more sheets of steel seam-

welded together into a single “blank”

which is then stamped into a part.

Materials that are both highly malleable

and strong can be combined to meet

customer requirements.

Organic coating

High-tech composite material made

of thin sheet with the highest surface

quality and with a colored organic

coating. Organic coating offers an even

surface, excellent malleability and deep

drawing characteristics due to anti-

friction effects, high protection against

corrosion, high resistance to chemical

influences and good temperature

resistance.

Drill pipe

Pipe used in the drilling of an oil or gas

well. Drill pipe is the conduit between

the wellhead motor and the drill bit.

Galvanized steel

Steel coated with a thin layer of zinc

to provide corrosion resistance in

underbody auto parts, garbage cans,

storage tanks, or fencing wire. Sheet

steel normally must be cold-rolled

prior to the galvanizing stage.

Hot dipped

Steel is run through a molten zinc

coating bath, followed by an air

stream “wipe” that controls the

thickness of the zinc finish.

Electrogalvanized

Zinc plating process whereby the

molecules on the positively charged

zinc anode attach to the negatively

charged sheet steel. The thickness of

the zinc coating is readily controlled.

By increasing the electric charge or

slowing the speed of the steel through

the plating area, the coating will thicken.

Heavy plate

Steel sheet with a width of up to

200 inches and a thickness of at

least 5 millimeters. Mainly used for

construction, heavy machinery, ship

building or pipes of big diameters.

142

Glossary

Simultaneous engineering

At any time of the design process each

product life state is appropriately taken

into consideration, i.e. by applying the

related expert knowledge by means of

forecasting, prognosis and simulation

either by tools or by involving the human

expert directly.

Slag

The impurities in a molten pool of iron.

Flux such as limestone may be added

to foster the congregation of undesired

elements into a slag. Because slag is

lighter than iron, it will float on top of

the pool, where it can be skimmed.

Special sections

Sections that are tailor-made to meet

individual requirements of the customer.

Speciality tubes

Refers to a wide variety of high-

quality custom-made tubular products

requiring critical tolerances, precise

dimensional control and special metal-

lurgical properties. Speciality tubing is

used in the manufacture of automotive,

construction and agricultural equipment,

and in industrial applications such as

hydraulic cylinders, machine parts and

printing rollers.

Scrap (Ferrous)

Ferrous (iron-containing) material that

generally is remelted and recast into

new steel.

Seamless tubes

Tubes made from a solid billet or

bloom, which is heated, then rotated

under extreme pressure. This rotational

pressure creates an opening in the

center of the billet, which is then

shaped by a mandrel to form a tube.

Sections

Blooms or billets that are hot-rolled in a

rolling mill to form, among other shapes,

“L” “U” “T” or “I” shapes. Sections can

also be produced by welding together

pieces of flat products. Sections can be

used for a wide variety of purposes in

the construction, machinery and trans-

port industries. Also known as “profiles.”

Semi-finished steel

Steel shapes – for example, blooms,

billets or slabs – that later are rolled

into finished products such as beams,

bars or sheet.


Glossary

Supply Chain Management (SCM)

The management and control

of all materials, funds, and related

information in the logistics process

from the acquisition of raw materials

to the delivery of finished products

to the end user.

Surface-coated steel products

Products that are metallically or

organically coated through different

methods, such as hot dip galvanizing,

electrical galvanizing, color coating and

powder coating. Surface coating helps

adapt steel for different end uses and

creates more value in the steel product.

Switches

Turnout systems and components that

meet a wide range of requirements,

including high speeds and axle loads,

that are used for passengers, freight,

heavy haul, commuting and suburban

rail transport.

Tailored blanks

A section of sheet or strip that is

cut-to-length and trimmed to match

specifications for the manufacturer's

stamping design for a particular part.

Because excess steel is cut away

(to save shipping costs), all that

remains for the stamper is to impart

the three-dimensional shape with

a die press (see “Blanking”).

Welded tubes

Rolled plates welded into tubes of

various shapes, gauges and diameters

from different types of material.

Wire rod

Round, thin semi-finished steel length

that is rolled from a billet and coiled

for further processing. Wire rod is

commonly drawn into wire products

or used to make bolts and nails.

144

Service

Addresses

voestalpine – Division Steel

voestalpine Stahl GmbH

A-4020 Linz, VOEST-ALPINE-Straße 3

Tel.: +43 (0)732/65 85-0

Fax: +43 (0)732/69 80-8981

Internet: www.voestalpine.com/stahl

E-Mail: [email protected]

voestalpine Stahlhandel GmbH

A-4030 Linz, Lunzer Straße 105

Tel.: +43 (0)732/69 24-0

Fax: +43 (0)732/69 24-1000

Internet: www.voestalpine.com/stahlhandel


voestalpine Stahl Service Center GmbH

A-4020 Linz, Industriezeile 28

Tel.: +43 (0)732/749 88-0

Fax: +43 (0)732/749 88-200

Internet: www.voestalpine.com/stahlservicecenter


voestalpine Grobblech GmbH


Tel.: +43 (0)732/65 85-0

Fax: +43 (0)732/69 80-3702

Internet: www.voestalpine.com/grobblech


voestalpine Gießerei Linz GmbH


Tel.: +43 (0)732/65 85-77238

Fax: +43 (0)732/69 80-2277

Internet: www.voestalpine.com/giesserei


voestalpine Gießerei Traisen GmbH

A-3160 Traisen, Mariazeller Straße 75

Tel.: +43 (0)2762/505-0

Fax: +43 (0)2762/505-253

Internet: www.voestalpine.com/giesserei-traisen


voestalpine Schmiede GmbH

A-4031 Linz, Vergütereistraße 2

Tel.: +43 (0)732/65 85-6476

Fax: +43 (0)732/65 85-DW

Internet: www.voestalpine.com/schmiede


Logistik Service GmbH


Tel.: +43 (0)732/65 98-0

Fax: +43 (0)732/69 80-4895

Internet: www.voestalpine.com/logserv


voestalpine Rohstoffhandel GmbH

A-1113 Vienna, Zinnergasse 6a

Tel.: +43 (0)1/767 15 46-0

Fax: +43 (0)1/767 15 46-74 oder -75

Internet: www.voestalpine.com/rohstoffhandel


voestalpine Rohstoffbeschaffungs-GmbH

A-4020 Linz, Stahlstraße 31

Tel.: +43 (0)732/65 85-8345

Fax: +43 (0)732/69 80-8183

Internet: www.voestalpine.com/rohstoffbeschaffung



Service

voestalpine Bahnsysteme GmbH

A-8700 Leoben-Donawitz, Kerpelystraße 199

Tel.: +43 (0)3842/202-0

Fax: +43 (0)3842/202-DW

Internet: www.voestalpine.com/bahnsysteme


voestalpine Schienen GmbH


Tel.: +43 (0)3842/202-0

Fax: +43 (0)3842/202-DW

Internet: www.voestalpine.com/schienen


TSTG (Thyssen Schienen Technik GmbH)

D-47166 Duisburg, Kaiser-Wilhelm-Straße 100

Tel.: +49 (0)203/5224-693

Fax: +49 (0)203/5224-694

Internet: www.tstg.de


VAE GmbH

A-1010 Vienna, Rotenturmstraße 5–9

Tel.: +43 (0)1/531 18-0

Fax: +43 (0)1/531 18-222

Internet: www.vae-ag.com


VAE Eisenbahnsysteme GmbH

A-8740 Zeltweg, Alpinestraße 1

Tel.: +43 (0) 3577/750-0

Fax: +43 (0) 3577/750-209

Internet: www.vae-ag.com


voestalpine Klöckner Bahntechnik GmbH

D-12103 Berlin, Alboinstraße 96–110

Tel.: +49 (0)30/754 84-0

Fax: +49 (0)30/754 84-DW 168

Internet: www.vak-bahntechnik.de


voestalpine Stahl Donawitz GmbH


Tel.: +43 (0)3842/201-0

Fax: +43 (0)3842/201-DW

Internet: www.voestalpine.com/stahldonawitz


voestalpine Austria Draht GmbH

A-8600 Bruck/Mur, Bahnhofstraße 2

Tel.: +43 (0)3862/893-0

Fax: +43 (0)3862/893-DW

Internet: www.voestalpine.com/austriadraht


voestalpine Tubulars GmbH & Co KG

A-8652 Kindberg-Aumühl, Alpinestraße 17

Tel.: +43 (0)3865/22 15-0

Fax: +43 (0)3865/22 15-0

Internet: www.vatubulars.com


voestalpine Railpro B.V.

1222 AB Hilversum Niederlande

Nieuwe Crailoseweg 8

Tel.: +31 (0)35/688-9600

Fax: +31 (0)35/688-9666

Internet: www.railpro.nl

E-mail: [email protected]

voestalpine – Division Railway Systems

146

Service

voestalpine – division motion

voestalpine motion gmbh


Tel.: +43 (0)732/65 85-0

Fax: +43 (0)732/69 80-DW

Internet: www.voestalpine.com/motion


voestalpineEuroplatinen GmbH &Co KG

A-4020 Linz, Stahlstraße 47

Tel.: +43 (0)732/65 85-0

Fax: +43 (0)732/69 80-DW

Internet: www.voestalpine.com/europlatinen


Euroweld S.r.l.

I-10156 Torino, Strada della Cebrosa 87

Tel.: +39 (0)11/225 09-11

Tel.: +39 (0)11/225 09-22

Internet: www.voestalpine.com/euroweld


Polynorm N.V.

NL-3751LJ Bunschoten, Amersfoortseweg 9

Tel.: +31 (0)33/298 95 11

Fax: +31 (0)33/298 90 04

Internet: www.polynorm.com


Polynorm Automotive B.V.

NL-3751LJ Bunschoten, Amersfoortseweg 9

Tel.: +31 (0)33/298 95 11

Fax: +31 (0)33/298 90 07



Polynorm Plastics B.V.

NL-4704 RG Roosendaal, Borchwerf 37

Tel.: +31 (0)16/55 75-475

Fax: +31 (0)16/55 54-115


Horst Matzner Engineering GmbH & Co. KG

D-49143 Bissendorf, Gewerbepark 18

Tel.: +49 (0)5402/701-501

Fax: +49 (0)5402/701-529


Polynorm Grau Werkzeug- und

Formenbau GmbH & Co

D-73529 Schwäbisch Gmünd, Güglingstraße 73

Tel.: +49 (0)7171/972-301

Fax: +49 (0)7171/972-321

Internet: www.polynorm-grau.de

ROTEC GmbH

Gesellschaft für Rohrtechnik

D-40789 Monheim am Rhein, Wachtelstraße 14

Tel.: +49 (0)2173/930-6

Fax: +49 (0)2173/930-749

Internet: www.voestalpine.com/rotec


Elmsteel Group Limited

Hinckley, Leicestershire LE10 3BS, UK

Jacknell Road, Dodwells Bridge Industrial Estate

Tel.: +44 (0)1455/62 03 00

Fax: +44 (0)1455/62 03 20

Internet: www.elmsteel.co.uk


voestalpine Präzisrohrtechnik GmbH

(Production)

A-8670 Krieglach, Eisenhammerstraße 15

Tel.: +43 (0)3855/24 66

Fax: +43 (0)3855/31 04

Internet: www.voestalpine.com/praezisrohrtechnik


voestalpine Präzisrohrtechnik GmbH

(Sales)

A-4020 Linz, Scharitzerstraße 28

Tel.: +43 (0)732/66 94-68

Fax: +43 (0)732/66 81-74

Internet: www.vpt.at


Turinauto S.p.A.

Via Tirreno 45, I-10100 Rivalta (Torino)

Tel.: +39 (0)11/908-1916

Fax: +39 (0)11/908-1920

Internet: www.voestalpine.com/turinauto

www.turinauto.it



Service

voestalpine Krems GmbH

A-3502 Krems, Schmidhüttenstraße 5

Tel.: +43 (0)2732/885-0

Fax: +43 (0)2732/885-DW

Internet: www.voestalpine.com/krems


voestalpine Krems Finaltechnik GmbH

A-3502 Krems, Schmidhüttenstraße 5

Tel.: +43 (0)2732/885-0

Fax: +43 (0)2732/885-DW

Internet: www.voestalpine.com/finaltechnik


Sadef N.V.

B-8830 Hooglede-Gits, Bruggesteenweg 60

Tel.: +32 (0)51/26 12 11

Fax: +32 (0)51/26 13 00

Internet: www.voestalpine.com/sadef


Metsec plc

West Midlands, B69 4HE

Broadwell Road, Oldbury, Warley

United Kingdom

Tel.: +44 (0)121/601-6000

Fax: +44 (0)121/601-DW

Internet: www.voestalpine.com/metsec


voestalpine Präzisionsprofil GmbH

D-50354 Hürth, Franz-Tilgner-Straße 10

Tel.: +49 (0)2233/61 16-0

Fax: +49 (0)2233/61 16-16

Internet: www.voestalpine.com/praezisionsprofil


Roll Forming Corporation

1070 Industrial Lane

40066-0369 Shelbyville, Kentucky, USA

Tel.: +1 (0)502/633-4437 225

Fax: +1 (0)502/633-5824

Internet: www.voestalpine.com/rfc


voestalpine Profilform s.r.o.

CZ-682 23 Vyskov, Továmi 4

Tel.: +42 (0)507/333 700

Fax: +42 (0)507/333 702

Internet: www.voestalpine.com/profilform-cz


voestalpine – Division Profilform

148

Service

voestalpine Eurostahl GmbH

voestalpine Eurostahl GmbH is the international sales organization of the

voestalpine Group. It has sales and representative offices all over the world.

This international network ensures the presence as well as competent

consumer care in all important markets.

voestalpine Eurostahl GmbH


Tel.: +43 (0)732/65 85-8015

Fax: +43 (0)732/69 80-8021

Internet: www.voestalpine.com/eurostahl


voestalpine Belgium NV/SA

B-1200 Bruxelles, Place de l’Alma 3

Tel.: +32 (0)2/770 08 52

Fax: +32 (0)2/770 02 87

Internet: www.voestalpine.com/be


voestalpine Danmark ApS

DK-2100 Copenhagen, Dag Hammarskjölds Alle 29

Tel.: +45 (0)354 318 44

Fax: +45 (0)354 336 66

Internet: www.voestalpine.com/dk


voestalpine Deutschland GmbH

D-80687 Munich, Elsenheimerstraße 59

Tel.: +49 (0)89/578 35-0

Fax: +49 (0)89/57 71 37

Internet: www.voestalpine.com/de


D-40212 Düsseldorf, Schadowstraße 68/IV

Tel.: +49 (0)211/35 59 34-0

Fax: +49 (0)211/35 59 34-10

D-01616 Strehla, Am Wasserturm 28

Tel.: +49 (0)35264/905-19

Fax: +49 (0)35264/905-18

voestalpine France S.A.

F-67000 Strasbourg, 61, Allee de la Robertsau

Tel.: +33 (0)388/21 23 80

Fax: +33 (0)388/25 03 25

Internet: www.voestalpine.com/fr


voestalpine UK ltd.

Albion Place, VOEST-ALPINE House

Hammersmith, W6 OQT

London, UK

Tel.: +44 (0)20/86 00-5800

Fax: +44 (0)20/87 41-3099

Internet: www.voestalpine.com/uk


voestalpine Italia S.p.A.

I-20121 Milan, Via F. Turati 29

Tel.: +39 (0)2/290 81-1

Fax: +39 (0)2/655 50 91

Internet: www.voestalpine.com/it


voestalpine d.o.o.

YU-11070 Novi Beograd

Ulica proleterske solidarnosti br. 18/1

Tel.: +38 (0)1/11 311 83 38

Fax: +38 (0)1/11 134 108

Internet: www.voestalpine.com/yu


voestalpine d.o.o.

HR-10000 Zagreb, Petrinjska ulica 61

Tel.: +38 (0)5 1 4880-350, -360

Fax: +38 (0)5 1 4819-446

Internet: www.voestalpine.com/hr



Service

voestalpine Nederland B.V.

NL-2596 BK Den Haag, Willem Witsenplein 4

Tel.: +31 (0)70/314 16 66

Fax: +31 (0)70/328 20 92

Internet: www.voestalpine.com/nl


voestalpine Polska Sp.z o.o.

PL 31-105 Krakow, ul. Zwierzyniecka 29

Tel.: +48 (0)12/428 35 70, 428 35 71

Fax: +48 (0)12/428 35 72

Internet: www.voestalpine.com/pl


voestalpine Eurostahl GmbH,

Representative office Moscow

RF - 113114 Moscow, Koschevnitscheskij Projesd, 1

Tel.: +7 (0)95/721 1997

Fax: +7 (0)95/721 1998

Internet: www.voestalpine.com/ru


voestalpine Scandinavia AB

S-10246 Stockholm, Nybrogatan 44, P.O.Box 5270

Tel.: +46 (0)8/545 89-450

Fax: +46 (0)8/545 89-457

Internet: www.voestalpine.com/se


voestalpine Schweiz GmbH

CH-8050 Zurich-Oerlikon, Siewerdtstraße 105

Tel.: +41 (0)1/318 65 65

Fax: +41 (0)1/318 65 00

Internet: www.voestalpine.com/ch


voestalpine d.o.o.

SLO-1000 Ljubljana, Poljanska 22c

Tel.: +38 (0)61 439 26 60

Fax: +38 (0)61 432 60 76

Internet: www.voestalpine.com/si


voestalpine CR, s.r.o

CZ-120 00 Praha 2, Karlovo námesti 31

Tel.: +42 (0)2/249 08 100, -105, -108

od. -109

Fax: +42 (0)2/249 08 104

Internet: www.voestalpine.com/cz


voestalpine Hungaria Kft

H-1123 Budapest, Alkotás u. 39/C.

Tel.: +36 (0)1/489-5500, -5501 od. -5502

Fax: +36 (0)1/489-5505

Internet: www.voestalpine.com/hu


voestalpine USA Corp.

500 Mamaroneck Ave, Suite 310

Harrison, NY 10528, U.S.A.

Tel.: +1 (0)914/899-3700

Fax: +1 (0)914/381-0509

Internet: www.voestalpine.com/us


150

Service

Locations worldwide

Production facilities

Sales and representative offices

The voestalpine Group – an international corporation with development and production facilities as well as sales officesboth in Europe and overseas, with immediate access to its key-customers.

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