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Voestalpine: From Nazi War Machine to Green Steel Pioneer
I. Introduction: The Paradox of Progress
Picture this: It is a crisp autumn morning in Linz, AustriaâHitler's hometown. At the sprawling voestalpine steel complex, construction crews operate around the clock, building the infrastructure for what will soon become the largest climate protection program in Austrian history. This transformation corresponds to annual savings of almost 4 million tons of CO2, or nearly 5% of national emissions. That makes greentec steel Austria's largest climate protection program.
The paradox is stunning. The groundbreaking ceremony for a company named "Reichswerke Aktiengesellschaft fĂŒr Erzbergbau und EisenhĂŒtten 'Hermann Göring'" (a subsidiary of the Berlin-based German industrial conglomerate, Reichswerke AG, which had been founded in 1937) took place on May 13, 1938, in Linz-St. Peter. Those same groundsâonce soaked in the labor of concentration camp prisonersânow host the world's most ambitious industrial decarbonization effort.
Voestalpine presents a question that haunts European industry: How do you build something morally redemptive from foundations of profound evil? And more practically for investors: How did a company born from totalitarian state planning become one of the few profitable steel companies in Europe?
voestalpine is a globally leading steel and technology group with a unique combination of materials and processing expertise. voestalpine, which operates globally, has around 500 Group companies and locations in more than 50 countries on all five continents. With its premium products and system solutions, voestalpine is a leading partner to the automotive and machinery industries, as well as to the aerospace and energy industries. The company is also the global market leader in railway systems and special sections.
The financial profile tells part of the story. Consolidated revenues amounted to âŹ15.7 billion (-5.6% y/y), EBITDA was âŹ1.3 billion, and net profit after tax reached âŹ179 million in the business year 2024/25. But numbers alone cannot capture the transformation narrative: from Nazi armaments producer to nationalized socialist flagship to privatized capitalist success story to green technology pioneer.
This article explores three inflection points that define voestalpine's remarkable journey: its post-war reinvention through the revolutionary LD process, its strategic pivot through the transformative Böhler-Uddeholm acquisition, and its current bet-the-company wager on greentec steel. Along the way, we will examine the lessons for investors navigating industrial transitions, the strategic moats that protect premium steelmakers, and the questions that remain unanswered as voestalpine races toward 2027.
II. Dark Origins: Birth from War (1938-1945)
The story of voestalpine cannot begin anywhere but the darkest chapter in European history. Understanding why requires grasping a simple truth: the company's founding was not incidental to Nazi ideologyâit was an expression of it.
Reichswerke Hermann Göring ("Hermann Göring Reich Works") was an industrial conglomerate in Nazi Germany from 1937 until 1945. It was established to extract and process domestic iron ores from Salzgitter that were deemed uneconomical by the privately held steel mills. The state-owned Reichswerke was seen as a vehicle for hastening growth in ore mining and steel output regardless of private capitalists' plans and opinions, which ran in alignment to Adolf Hitler's strategic and economic vision.
Why Linz? The choice was not merely geographicâit was personal. Linz was Hitler's birthplace, and the FĂŒhrer envisioned transforming the provincial capital into a cultural and industrial showcase. The roughly 4,500 inhabitants of Linz-St. Peter/Zizlau were relocated to other parts of the city to make way for what would become one of the largest steelworks in the Reich.
The scale was breathtaking. By the end of 1941 the Reichswerke became the largest company in Europe and probably in the whole world, with a capital of 2.4 billion âïžâłïž and about half a million workers. It provided one-eighth of German steel output during the war.
But this empire was built on human suffering. Thousands of foreign laborers from more than thirty nations were forced to erect and operate the "Reichswerke Hermann Göring AG Berlin" in Linz. They included both men and women, adolescents, prisoners of war, and concentration camp inmates.
Later on (from 1940/41) forced laborers and prisoners of war were used as well as (from 1942) male concentration camp inmates. The concentration camp inmates were interned in two external camps of the Mauthausen-Gusen concentration camp complex that had been erected on the factory grounds and were deployed as forced labor in the Linz steelworks as well as in Eisenwerke Oberdonau GmbH and Stahlbau GmbH.
Modern voestalpine has chosen not to bury this history. Top management at the Austrian VA Steel was determined from the start not to ignore this issue and at the end of 1998 their response was to commission a group of academics including historians, economists and psychologists to conduct the research project 'Nazi Forced Labor in Linz under the "Reichswerke Hermann Göring AG Berlin" 1938-1945'. The objective was to achieve comprehensive clarity about the background circumstances and the effects of this dark episode in history.
voestalpine is the first Austrian company to dedicate a permanent exhibit to the subject of forced labor. Against their will and under inhuman conditions, these forced laborers created the foundation of an internationally successful group of companies.
The war's end brought destruction and uncertainty. Allied bombing had devastated facilities, and Soviet-American negotiations over Austria's industrial future reached a stalemate. The Austrian national government carefully persuaded the Americans to save Linz. In the summer of 1946, when allied negotiations on Linz reached a stalemate, the Americans decided to restore Linz unilaterally, regardless of British or Soviet opinion. Tactics of reconstruction became a subject of a debate between the Department of State, which advocated nationalization, and the U.S. Army, represented by Mark W. Clark, who stood for privatization. The diplomats prevailed, and the Austrian government was allowed to nationalize the former German assets at will.
The Reichswerke assets in allied-occupied Austria were nationalized by the First Nationalization Law enacted by the Austrian parliament on 26 July 1946. The ore mines in Erzberg and the steel mills in Linz, destroyed by allied air raids, were reorganized into the state-owned VĂEST (now part of Voestalpine).
From the ashes of Nazi industry, a new chapter would beginâone defined not by conquest but by innovation.
III. Post-War Nationalization & The LD Process Revolution (1946-1970s)
The post-war years presented Austria with an existential challenge: how to rebuild an industrial base from wreckage, without access to vast capital markets or natural resource endowments. The answer would come from an unexpected placeâthe minds of Austrian engineers who would revolutionize global steelmaking.
Rebuilding from Rubble
The mills of Linz were nationalized in July 1946 as the VĂEST (Vereinigte Ăsterreichische Eisen und Stahlwerke, United Austrian Iron and Steelworks). VĂEST decided to dispose of three of its six blast furnaces. One was dismantled and sold to SSAB (then known as Norrbottens JĂ€rnverk AB) in LuleĂ„, Sweden; the proceeds were used to purchase coal in Poland.
Austria occupied a peculiar position in post-war Europe: officially neutral but industrially ambitious, squeezed between Western capitalism and Soviet communism. VĂEST became a symbol of Austrian reconstructionâthe flagship of the republic's nationalized industry. But survival required more than symbolism. It required competitive advantage.
The LD Process: A World-Changing Innovation
The breakthrough came from necessity. Austrian steelmakers needed a method that could compete with established producers despite limited resources and outdated equipment. What they developed instead would reshape the entire industry.
By June 1949, VĂEST developed an adaptation of Durrer's process, known as the LD (Linz-Donawitz) process. In December 1949, VĂEST and ĂAMG committed to building their first 30-ton oxygen converters.
The technology was elegantly simple yet transformative. Basic oxygen steelmaking (BOS, BOP, BOF, or OSM), also known as Linz-Donawitz steelmaking or the oxygen converter process, is a method of primary steelmaking in which carbon-rich molten pig iron is made into steel. Blowing oxygen through molten pig iron lowers the carbon content of the alloy and changes it into low-carbon steel. The process is known as basic because fluxes of calcium oxide or dolomite, which are chemical bases, are added to promote the removal of impurities and protect the lining of the converter.
After a good six years of research and development, the first 30 tons of LD steel were tapped from the converter on 27 November 1952 in the former LD steelmaking plant 1 of VĂEST in Linz. This was a significant step for everyone involved and at the same time the official beginning of the winning LD technology throughout the world, a method used to produce steel by blowing industrial oxygen into hot metal.
The steel mill was already producing when it was inaugurated on January 5, 1953 by the President of Austria, Theodor Körner. The second LD steel mill went into operation shortly thereafter â on May 22, 1953 â at the Ăsterreichisch-Alpine Montangesellschaft (ĂAMG) in Donawitz.
The productivity gains were staggering. LD converters are capable of converting molten iron into crude steel in less than 40 minutes, compared to 10â12 hours that is required using Siemens-Martin furnaces. The new oxygen-blowing process also reduced investment and operating costs by 50% compared to the open-hearth route.
Word spread quickly. In 1960, 4% of the global total crude steel production was produced using the LD process. In 1970 this figure was already 40%, in 1974 it rose to almost 50%, in 1992 it was 60% and today, 60 years after the first casting in Linz, around two-thirds of the world's steel is produced using the LD process. Thanks to the LD process, global steel production has increased from 200 million tons at that time to around 1.5 billion tons per year.
Today, around 70% of global steel production is based on this technology.
A Cautionary Tale in IP Strategy
Here lies one of the great "what ifs" in business history. Austrian engineers had invented a process that would enable the modern steel industryâand they failed to capture its economic value.
The LD process reduced processing time and capital costs per ton of steel, contributing to the competitive advantage of Austrian steel. However, errors made by the VĂEST and the ĂAMG management in licensing their technology made control over its adoption elsewhere impossible and, by the end of the 1950s, the Austrians had lost their competitive edge.
In August 1954 Dominion Foundries & Steel, Ltd. of Canada became the first corporation outside Germany to operate an LD steelworks. Within a decade, the technology was everywhereâoften without meaningful compensation to its inventors.
The lesson for investors is timeless: technological innovation without IP protection creates industry-wide value but captures little firm-specific profit. voestalpine would spend the next several decades seeking other sources of competitive advantage.
IV. Expansion, Diversification & The 1985 Crisis (1970s-1990)
The 1970s brought both opportunity and hubris to VOEST-ALPINE. Fresh from the LD process success, management pursued aggressive diversificationâa strategy that would culminate in one of Austria's worst corporate disasters.
The Merger Years
In 1973, VĂEST merged with Ăsterreichisch-Alpine Montangesellschaft (ĂAMG) to form VOEST-ALPINE AG. During the 1960s and 1970s, the company expanded geographically and diversified its product range. International sales offices were established, and the company entered new product categories.
But the state-owned enterprise suffered from the classic afflictions of political ownership: bloated workforce, unclear strategy, and diversification into areas far from core competence.
The 1985 Collapse: A Near-Death Experience
The crisis that had been brewing in the nationalized industries for a long time finally came to a head in 1985: As VOEST-ALPINE had been writing lots of red ink since 1981, the government had stepped in repeatedly to help with capital infusions, but these entailed stricter state control over the allocation of the funds. The fact that the Group had used its political clout to lasting effect; the fact that it had been abused to serve as a national labor pool; changes in international economic parameters; the erosion of individual companies; diversification failures in both foreign projects and the finished goods division (among others, the Bayou Steel Corporation in Louisiana, USA); as well as the enormous losses that a company named Intertrading (which was founded in 1978 and is VOEST-ALPINE's trading subsidiary) had run up in connection with its speculative activities in the oil market led to the bankruptcy of VOEST-ALPINE in 1985.
The Intertrading scandal became emblematic of state-enterprise dysfunction. Unsuccessful speculations on falling prices brought VA Intertrading significant financial losses. A misjudgment with severe consequences: The entire VOEST-ALPINE executive board and Intertrading's management had to resign on the instructions of the then Federal Chancellor Fred Sinowatz.
During 1978, Voest-Alpine and other European companies started Bayou Steel Corporation, incorporated in Louisiana in 1979. The first mill opened in LaPlace, Louisiana in 1981, but the company did not do well because of high energy prices and cheaper foreign steel. During 1986, Voest-Alpine sold its interest.
Reorganization and the Seeds of Recovery
Owing to the events of 1985, an entirely new corporate management was appointed in 1986. The company's workforce was greatly reduced, both in that year and in subsequent years. The Stahlstiftung (Steel Foundation) was founded in 1987 to support those employees who had lost their jobs. This social innovation was aimed at helping them gain skills in new fields or acquire higher skills in their existing professions so that they could be reintegrated into the workforce. By 1991, the Foundation had enabled 700 employees to switch to new fields and/or to improve their qualifications.
Corporate planning was now focused on consolidation, automation, and partial restructuring. In the fall of 1986, the so-called "Concept for a New VOEST-ALPINE" was adopted after a thorough analysis of all of the company's lines of business. A new organizational structure was developed, an automation program was adopted, and an investment program was authorized.
The 1985 crisis taught hard lessons: political ownership creates perverse incentives; diversification without competence destroys value; speculative trading has no place in industrial companies. These lessons would inform the transformation to come.
V. Privatization & Strategic Pivot (1990-2001)
The fall of the Berlin Wall in 1989 marked not just the end of an era for European politics but also for European state-owned enterprises. Austria's socialist industrial model had failed spectacularly in 1985, and by the early 1990s, even labor unions recognized that privatization offered the only path to sustainable success.
The Path to the Stock Exchange
By 1993 Austria's ambitious program to privatize much of its industrial sector was finally underway. That year, with the breakup of the state holding company, Austrian Industries, Voest-Alpine Stahl and its sister company, Voest-Alpine Technologie, became independently established. VA Technologie AG, the engineering company, made its initial public offering on the Vienna Stock Exchange in 1994, and Voest-Alpine Stahl (VA Stahl) followed suit in 1995. VA Stahl's initial issue of 11.2 million sharesâ8.2 million shares offered by OIAG, the state industrial holding company, and three million new sharesâat Sch 285 per share represented one of the biggest privatizations in Austrian history.
October 9, 1995 was a special milestone in the history of voestalpine. On this day, the voestalpine share was listed for the first time on the Vienna Stock Exchange, paving the way for voestalpine to become a successful privatized company.
The privatization of VOEST-ALPINE STAHL AG began in October 1995 with the sale of 31.7 percent of the Republic of Austria's shares on the stock exchange. BĂHLER-UDDEHOLM AG also went public the same year.
At the time of the voestalpine (then VOEST-ALPINE STAHL AG) IPO in 1995, 43% of its shares were still owned by the state. Ten years later, on August 31, 2005 the irrevocable, i.e. 100%, privatization was complete, simultaneously marking the final turning point in the Group's history.
Wolfgang Eder: The Architect of Transformation
The privatization coincided with the rise of Wolfgang Eder, a lawyer by training who would become one of Austria's most consequential industrial leaders. After studying law, he began his career in 1978 with the former VOEST-ALPINE Group. After successfully coordinating the IPO, he was appointed to the Management Board in 1995 and has headed the Group since April 1, 2004.
Under Eder's leadership the voestalpine Group almost tripled its annual revenue, from around ⏠4 billion to over ⏠11 billion, developing from a traditional steel producing company into a global steel-based technology and capital goods group.
By supporting the company's IPO and privatization of the former 'Austrian flagship state-owned industry,' Eder participated in what is probably the most dramatic turning point in the Group's history and carried out its strategic realignment all the way to its present focus on high quality and internationalization with a lot of courage, commitment, and a remarkable leadership style.
Strategic Reorientation: From Commodity to Specialty
The strategic insight driving privatization-era voestalpine was deceptively simple: commodity steel is a losing game. Global overcapacity, thin margins, and vulnerability to low-cost competition from emerging markets made bulk steelmaking an unattractive business. The answer was vertical integration and specialization.
In 1993, VOEST-ALPINE STAHL AG, as the managing holding company, was divided into three divisions: flat products, long products, and processing. To optimize its portfolio, in 1994 the company divested itself of activities that were either unrelated to its core segments or offered too little in the way of group synergies. The next step entailed concentration and specialization on high-quality niche products.
In 1998, for example, the VOEST-ALPINE KREMS Group acquired METSEC plc, a British company, to buttress its already leading position in the European steel sections and precision tubes segment. In 2001, voestalpine motion gmbh acquired the Dutch automotive supplier Polynorm N.V.; it was the largest acquisition to date in the history of the voestalpine Group.
Not every deal succeeded. In 1998, however, the VOEST-ALPINE STAHL Group's attempt to acquire PREUSSAG STAHL AG (Salzgitter, Germany) failed because German politicians intervened to block the transaction. The blocked deal highlighted the political complexities of European steel consolidationâa theme that persists to this day.
The Brand Transformation
In 2001 the corporate structure was altered. A breakdown into the divisions of Steel, motion (from 2005 onward Automotive), Railway Systems and Profilform reflected a clear orientation towards processing ("More out of steel"). At the same time, the name of the Group was changed to voestalpine AGâlowercase, one word, deliberately distanced from its historical predecessors.
In recent years voestalpine has sought to distance itself from its image as a steel producer and increase its emphasis on steel processing activities, investing heavily in research and development for high-quality, high-profit steel products.
By the time of full privatization in 2005, voestalpine had transformed from a state-owned commodity producer into a focused, quality-driven technology group. But the biggest transformation lay ahead.
VI. The Böhler-Uddeholm Acquisition: A Transformative Deal (2007-2008)
In the annals of Austrian business history, few deals carry the weight of voestalpine's acquisition of Böhler-Uddeholm. It was the largest industrial acquisition in Austrian history, worth approximately âŹ2 billion. More importantly, it fundamentally changed what voestalpine wasâand what it could become.
Understanding the Target
Böhler-Uddeholm is an Austrian company specialized in producing tool steel and special forgings. It was formed in 1991 as a result of a merger between the Austrian parastatal Böhler and Uddeholms AB of Sweden.
The history of Böhler goes back to 1870. Albert & Emil Böhler founded as a "general partnership" in Vienna. BĂHLER is steeped in rich history dating back to 1446 when the first hammer forge was established, on the site of the current BĂHLER Steel mill in Kapfenberg, Austria. In 1900 Bohler developed the revolutionary High Speed Steel BĂHLER Rapid.
Böhler-Uddeholm represented the pinnacle of specialty steel: tool steels, high-speed steels, and forged components for aerospace, automotive, and oil and gas applications. These were products with pricing power, technological barriers to entry, and customers who valued quality over cost.
The Deal Mechanics
In April 2007, voestalpine made a bid for 20.95 percent of the Austrian tool steel producer Böhler-Uddeholm, which was created in 1991 from the merger of Böhler Group and Swedish Uddeholm Group, the latter acquired by Voest-Alpine Stahl AG in 1990. The combined company was one of three created from Austrian Industries AG in 1993. By June, voestalpine held 55 percent of voting stock after "the largest acquisition in Austria's industrial history", worth two billion Euros. In March 2008, voestalpine said it owned 90.24% of Böhler-Uddehom and intended to buy the rest.
In April 2007, voestalpine AG made a takeover offer for Böhler-Uddeholm - the bid was accepted by a majority of shareholders in June of that year. voestalpine completed a squeeze out of Böhler-Uddeholm's remaining shareholders in September 2008 to gain complete control.
The Strategic Rationale
The acquisition logic was elegant: voestalpine's existing steel division produced high-quality flat products, but these remained closer to the commodity end of the spectrum. Böhler-Uddeholm's tool steels and specialty forgings occupied the opposite extremeâhighly engineered, relationship-intensive products sold to demanding customers at premium prices.
2007 voestalpine AG acquired Böhler-Uddeholm AG; one year later the company was fully integrated into the voestalpine Group as the Special Steel Division. 2011 The holding company Böhler-Uddeholm AG was renamed voestalpine Edelstahl GmbH.
The deal created a four-division structure that persists today: Steel Division (flat products), High Performance Metals Division (formerly Special Steel, built on Böhler-Uddeholm), Metal Engineering Division (railway systems and wire), and Metal Forming Division (automotive components and tubes).
The Timing Challenge
In retrospect, closing a âŹ2 billion deal in 2007-2008 looks like spectacularly bad timing. Lehman Brothers collapsed in September 2008, and the global financial crisis devastated industrial demand.
In the fall of 2008, the economic slump resulting from the worldwide banking and financial crisis also affected voestalpine. To respond to the deteriorating situation, the Group's crisis management, which was implemented rapidly and across the board, focused on Group-wide cost optimization and efficiency improvement programs. The 2009/10 business year, which was buffeted by the major economic crisis, was the hardest and most difficult since the onset of the Group's privatization in 1995. In the first nine months of the business year 2010/11, however, voestalpine managed yet again to generate significant increases in both revenue and earnings.
The company survivedâand ultimately thrivedâbecause the strategic logic remained sound even as the timing proved difficult. Böhler-Uddeholm brought not just products but capabilities: aerospace expertise, additive manufacturing knowledge, and customer relationships with the world's most demanding manufacturers.
2017 voestalpine Edelstahl GmbH and Special Steel Division changed its name to High Performance Metals GmbH and High Performance Metals Division respectively.
VII. Navigating Crisis & Building Global Reach (2008-2016)
The post-crisis decade tested voestalpine's resilience while setting the stage for its green transformation. Two investments during this period illustrate the company's strategic approach: a bold bet on American natural gas and a calculated expansion in railway systems.
The Texas HBI Plant: American Expansion
In the early 2010s, voestalpine made one of its most consequential capital allocation decisions: a massive investment in Hot Briquetted Iron (HBI) production in the United States.
The HBI plant in Texas was announced in 2012 and started operating four years later. The costs of construction amounted to around EUR 870 million (USD 1.012 billion at the exchange rate valid at the time).
The state-of-the-art plant, which was opened in October 2016, is one of the largest of its kind in the world. It has an annual capacity of two million tonnes of HBI, a high-quality feedstock made through the direct reduction of iron ore which is used to produce high-quality steel grades in an electric arc furnace ('EAF'), but which can also be used in blast furnaces, resulting in lower coke consumption.
The strategic rationale was threefold: access to cheap American natural gas for production, proximity to raw material sources, and a hedge against European energy costs. The Corpus Christi facility, which covers an area of two square kilometers and employs over 270 people, is located in an optimal coastal position with direct access to a broad and deep shipping channel.
But the investment proved troubled. It was necessary to make unplanned write-offs totaling EUR 372 million in 2019 and 2020 in response to the difficult market environment. Over the past years, the voestalpine subsidiary succeeded in gradually stabilizing the business model as well as the product and customer structure.
In 2022, voestalpine restructured the investment. voestalpine sold 80 percent of its shares to ArcelorMittal in a deal that valued the plant at approximately $1 billion. Part of voestalpine's further shareholding is a long-term supply agreement of 420,000 tons per year of the HBI produced in Corpus Christi. This provides the basis for further decarbonization of the steel production in Linz and Donawitz ("greentec steel").
The primary source of the necessary HBI is the direct reduction plant in Texas/USA in which voestalpine has held a 20% stake since 2022. Annual deliveries of 420,000 tons of HBI are contractually secured for the long term.
The Texas episode illustrates a recurring theme in voestalpine's history: strategic vision combined with execution challenges. The HBI investment was conceptually soundâsecuring low-carbon iron feedstock for future electric steelmaking. But managing a $1 billion facility 8,000 kilometers from headquarters proved difficult. The ArcelorMittal partnership resolved this by converting an operational headache into a secured supply relationship.
Railway Systems: Global Leadership
While Texas captured headlines, voestalpine's railway division quietly built world-leading positions in niche markets.
The company is the global market leader in railway systems and special sections. Orders for turnouts for high-speed railway lines in both Europe and Asia enabled the voestalpine Group in 2008 to continue expanding its leading position in the fast-growing rail market and to become the number one in Asia for high-speed turnouts.
The railway systems business exemplifies voestalpine's strategic approach: find niches where technical excellence creates barriers to entry, build global scale, and maintain pricing power through innovation. Turnouts (railway switches) are safety-critical components where failure is catastrophic. Customersâtypically state railway authoritiesâprioritize reliability over cost.
VIII. The Green Transformation: Greentec Steel (2017-Present)
Every industrial company claims to prioritize sustainability. voestalpine is actually betting the company on it.
Repositioning as a Technology Company
In February 2018, voestalpine started constructing a steel mill in Linz, Austria specifically utilizing 6 MW hydrogen fuel technology instead of coal, which started in late 2019.
In July 2017, voestalpine AG was given a new corporate design intended to reflect the company's orientation toward the future and its fundamental change from a steelmaking group to a technology group. The message was clear: voestalpine no longer wanted to be perceived as a steel company, but as a technology company that happened to work with steel.
Voestalpine is responsible for 10% of all Austrian CO2 emissions, which makes it the biggest emitter in the country. This uncomfortable reality made decarbonization not just a strategic choice but an existential necessity.
The Hydrogen Pilot: H2FUTURE
Now the world's largest and most advanced electrolyser has commenced production of green hydrogen at the voestalpine premises in Linz. The new plant has a capacity of over 6 megawatts, and is currently regarded as the most effective and state-of-the-art facility of its type. It will be used to test whether the technology deployed to produce green hydrogen is suitable for use on an industrial scale. Furthermore, the project, which receives EUR 18 million in EU funding, will investigate the potential to provide network services, and potentially compensate for fluctuations in the power grid.
The facility's high-tech core consists of 12 stacks, each comprising 50 electrolysis cells. With an output of six megawatts, the facility produces 1,200 m3 of green hydrogen an hour. Electricity is used to split water into hydrogen and oxygen by applying voltage to the electrodes in the electrolysis cells.
voestalpine and VERBUND are further extending the successful and one of the world's longest-running PEM electrolysis plants, H2FUTURE, in Linz. The expansion includes the production, compression, purification, storage, loading, and further use of green hydrogen. To this end, the plant at the voestalpine siteâcommissioned in 2019 as the world's largest hydrogen pilot project at the timeâwill be expanded to include a compression and purification plant, as well as five hydrogen storage tanks.
The Greentec Steel Mega-Investment
H2FUTURE was a pilot. Greentec steel is the main event.
In April 2023, the Supervisory Board of the voestalpine Group approved EUR 1.5 billion to be invested in the further decarbonization of steel production. Electric arc furnaces powered by green electricity will become the core of our steel production as of 2027. Starting this year, EAFs (electric arc furnaces) will replace two blast furnaces and reduce CO2 emissions by 30%.
greentec steel from voestalpine is Austria's largest climate protection program: in the first step of this phased approach, one electric arc furnace (EAF) powered by green electricity will be built at each of the sites in Linz and Donawitz aiming to reduce CO2 emissions by 50%. Starting in 2027, the two electric arc furnaces will enable voestalpine to produce around 2.5 million tons of CO2-reduced steel annually: 1.6 million tons in Linz, and 850,000 tons in Donawitz.
A home for the new electric arc furnace: The building enclosure for the EAF is now under construction. Construction of the electric steelmaking plant at the Linz site has made great progress as part of the greentec steel project. The new EAF steelmaking building that is currently under construction will house the Electric Arc Furnace 1 (EAF1). A look at the current status of construction shows how much has already been accomplished in recent months. With a length of 100 meters, a width of 60 meters and a height of 65 meters, the new EAF building at the Linz location is a true giant that could house around 40 average single-family homes on the ground floor. A large number of projects must be coordinated in order to bring this giant to life.
The EAF has a furnace capacity of 180 tons per charge, and will start operating in 2027. The contract for the EAF at the site in Donawitz was awarded to Italian plant engineers Danieli & C. Officine Meccaniche S.p.A. in summer 2023.
The Green Bond: Capital Market Innovation
A few weeks ago, voestalpine became the first European steel company to publish a Green Financing Framework, the basis for this green bond. Our Green Financing Framework fulfills the stringent requirements of the International Capital Market Association whose standards are considered best practice worldwide. Our framework for this first green bond and future green financing is the gold standard. The Green Financing Framework was reviewed by the ESG rating and research agency Moody's as part of a second party opinion, and awarded a top rating ("very good").
In fall 2024, voestalpine AG successfully issued its first green corporate bond in the amount of EUR 500 million. The five-year bond, with a coupon of 3.75%, was also subscribed by private investors.
IFC today announced an anchor investment of âŹ75 million in the first green bond issuance by voestalpine AG, a global leader in steel processing and production headquartered in Austria.
The European Investment Bank (EIB) is providing a loan of âŹ300 million to voestalpine AG, Europe's third largest steelmaker. The financing will be used for the company's research and development (R&D) programme over a period of four years. European Investment Bank supports Austria's only crude steel producer voestalpine in its mission to lower the environmental and carbon footprint of its activities. A focus will be on greentec steel, a plan to reduce CO2 emissions by up to 30% in 2029 compared to 2019 by partially replacing coal-based blast furnaces with electric arc furnaces powered by green electricity.
Herbert Eibensteiner: The Green Steel CEO
The transformation is being executed under the leadership of Herbert Eibensteiner, who succeeded Wolfgang Eder as CEO in July 2019. Herbert Eibensteiner is a highly qualified and experienced manager who was born in Linz, Austria, in 1963. He has had a long and international career, has been working for voestalpine since 1989, and thus knows the ins and outs of the Company's business. He has been a member of the Management Board of voestalpine AG since 2012 and, in addition, has also been managing the Steel Division, the Group's highest revenue earning division, since October 2014. Eibensteiner graduated from the Vienna University of Technology in 1988 with a degree in mechanical engineering and business management.
Before joining the Management Board of voestalpine in April 2012, Herbert Eibensteiner was CEO of several Group companies. He was also globally active within the voestalpine Group and held numerous supervisory board positions, including in the United States, Brazil, and China, both as a member and as chairman. In his capacity as a Member of the Management Board of voestalpine AG, he headed the Metal Forming Division until September 2014, and the Steel Division from October 2014 to July 2019. Herbert Eibensteiner has been the CEO of voestalpine AG since July 2019.
Herbert Eibensteiner remains the Chairman of the Management Board of voestalpine AG for another five years.
"voestalpine has been an environmental benchmark in the industry for decades and has a clear plan to transform its steel production with greentec steel. As early as 2027, we will partially switch from the traditional blast furnace route to green electricity-based electric arc technology, thereby reducing our emissions by around 30% by 2029. Greentec steel is therefore the largest climate protection program in Austria. By issuing the first green bond in the European steel industry, we are now also taking on a pioneering role on the capital market," said Herbert Eibensteiner, CEO of voestalpine AG.
IX. Competitive Position and Industry Analysis
The European Steel Landscape
voestalpine operates in one of the most challenging industrial environments imaginable: European steel production.
SSAB's primary European competitors for strip products vary by market and include ArcelorMittal S.A., Dillinger HĂŒtte AG, Salzgitter AG, ThyssenKrupp and Voest Alpine.
Companies based just in one jurisdiction include: thyssenkrupp Steel, Salzgitter AG, and SHS, all based in Germany; and Voestalpine in Austria.
European companies face a challenging market: declining demand because of slowing production from major sectors like the automotive industry, and a lack of large-scale infrastructure development in recent decades. Compounding this, global overcapacity reached record highs in 2023, driving down prices in the steel market. As a result, seven plants have been idled with job cuts across the sector.
In November 2024, Thyssenkrupp announced it would lay off around 5,000 jobs at its steel subsidiary by 2030 and outsource a further 6,000 jobs.
As of 2017, voestalpine is one of the few profitable steel companies in Europe. This distinctionâmaintained through multiple economic cyclesâreflects the company's strategic differentiation.
Porter's Five Forces Analysis
Threat of New Entrants: LOW Steel production requires enormous capital investment (voestalpine's greentec steel investment alone is âŹ1.5 billion), decades of accumulated expertise, and established customer relationships. The threat of new conventional steelmakers in Europe is negligible. However, green steel startups like H2 Green Steel represent a different kind of threatâthey aim to leapfrog existing players with entirely new production methods.
Bargaining Power of Suppliers: MODERATE voestalpine requires iron ore, coking coal (for now), scrap steel, and energy. Iron ore is concentrated among a few global suppliers (Vale, Rio Tinto, BHP), but voestalpine's long-term contracts and vertical integration (HBI supply from Texas) provide some protection. The shift to EAF steelmaking will increase dependence on scrap availability and electricity prices.
Bargaining Power of Buyers: MODERATE TO HIGH In commodity steel, buyers have significant power. But voestalpine has systematically moved toward applications where switching costs are high: aerospace components, automotive structural parts, railway turnouts. In these segments, qualification processes take years and quality trumps price.
Threat of Substitutes: LOW Steel has no viable substitute for most structural and engineering applications. Aluminum competes in weight-sensitive applications (automotive bodies), but steel's cost advantage remains significant. Carbon fiber and composites remain niche.
Competitive Rivalry: INTENSE European steel is characterized by overcapacity, declining demand, and powerful unions that resist restructuring. voestalpine's responseâfocus on specialty products and technology leadershipâreflects the only viable strategy.
Hamilton Helmer's 7 Powers Analysis
Scale Economies: Limited at the Group level (voestalpine is mid-sized globally), but significant within specific niches. The railway systems division, for example, achieves global scale in turnout production that competitors cannot match.
Network Effects: Not applicable to steel production.
Counter-Positioning: voestalpine's green steel strategy represents potential counter-positioning. If greentec steel succeeds while competitors remain wedded to blast furnaces, voestalpine gains an advantage that cannot be matched without massive capital investment and operational transformation.
Switching Costs: HIGH in specialty applications. Aerospace qualification, automotive validation, and railway certification create multi-year switching costs. Customers cannot easily substitute suppliers.
Branding: The voestalpine brand carries weight in premium applications. The company's reputation for quality provides pricing power in markets where failure costs are catastrophic.
Cornered Resource: Not applicable in the traditional sense, but voestalpine's long-term HBI supply contract provides secured access to low-carbon feedstock.
Process Power: THIS IS voestalpine's PRIMARY MOAT. The company's manufacturing expertiseâaccumulated over decadesâcannot be easily replicated. High Performance Metals' aerospace forgings, Steel Division's advanced automotive steels, and Metal Engineering's turnout systems all reflect deep process knowledge embedded in equipment, procedures, and workforce skills.
X. Financial Analysis and Investment Considerations
Recent Financial Performance
Thanks to the Group's global presence, broad diversification across products and customer segments, as well as a focus on the highest quality segment, the decrease in revenue was moderateâdown 5.6% from EUR 16,684.3 million in the 2023/24 business year to EUR 15,743.7 million in 2024/25âdespite a challenging economic environment.
Consolidated earnings before taxes amounted to EUR 271 million. Profit after tax was EUR 179 million.
Cash flows from operating activities remained at the previous year's level of EUR 1.4 billion due to the rigorous management of working capital despite the decline in profit. The free cash flow of EUR 309 million for the 2024/25 business year despite high level of investing activities and a difficult environment reflects the outstanding performance of the company and its employees.
Net financial debt remained unchanged at EUR 1.65 billion as of March 31, 2025. Equity amounted to EUR 7.5 billion as of March 31, 2025. The gearing ratio (net financial debt in relation to equity) remained virtually unchanged compared to the previous year at 22.1%.
Outlook and Guidance
Against this backdrop, voestalpine AG's management board currently expects EBITDA for the 2025/26 business year to range between EUR 1.40 billion and EUR 1.55 billion.
This situation was triggered by tariffs imposed by the US administration on April 2, 2025, affecting nearly every economy engaged in trade with the United States. Although a 90-day suspension helped to stabilize the sharply declining capital markets, it has not calmed the real economy, which is adapting to increasingly unpredictable conditions. In addition to these macroeconomic effects, the voestalpine Group is directly impacted in the 2025/26 business year by tariffs enacted by the US administration on March 12, 2025, which target steel and aluminum imports into the United States. Based on current assessments, these tariffs are expected to have a negative impact on voestalpine's earnings in the mid-double-digit million-euro range over the course of the 2025/26 business year.
Key Performance Indicators to Track
1. EBITDA Margin by Division The most critical metric for voestalpine investors is EBITDA margin, particularly the differential between the High Performance Metals Division (which should command premium margins) and the Steel Division (more commodity-exposed). Margin compression in High Performance Metals would signal competitive pressure in voestalpine's most defensible business.
2. Capital Expenditure vs. Depreciation Ratio With greentec steel requiring âŹ1.5 billion in investment, the relationship between capital spending and depreciation reveals whether voestalpine is genuinely investing in transformation or merely maintaining existing assets. Currently, investment activity significantly exceeds depreciation due to greentec steel implementation.
3. CO2 Emissions Intensity (tons CO2 per ton steel) This will become the industry's defining competitive metric. voestalpine targets 30% reduction by 2029. Investors should track actual progress against this target, as it determines both regulatory exposure and pricing power in markets where customers demand low-carbon materials.
Bull Case
- Green steel premium materializes: If automotive and aerospace OEMs pay meaningful premiums for verified low-carbon steel, voestalpine's first-mover position generates substantial margin expansion
- European policy support intensifies: Carbon border adjustment mechanisms (CBAM), subsidies for green steel investment, and protection against carbon-intensive imports create favorable competitive dynamics
- High Performance Metals division continues winning aerospace content: Electric aircraft, space launch systems, and next-generation defense platforms drive demand for specialty forgings
- Railway infrastructure boom: Global investment in high-speed rail and metro systems benefits voestalpine's world-leading turnout business
Bear Case
- Green steel premium disappoints: If customers refuse to pay meaningfully higher prices for low-carbon steel, the âŹ1.5 billion greentec investment destroys value
- Energy costs undermine competitiveness: Electric arc furnace steelmaking requires massive electricity consumption. If Austrian/European power prices remain elevated versus global alternatives, production costs become uncompetitive
- Automotive transition disrupts steel demand: Electric vehicles require different steel applications than internal combustion vehicles. If voestalpine's automotive business fails to pivot effectively, a major end market erodes
- Chinese overcapacity overwhelms European steel: Despite carbon border mechanisms, Chinese steel exports could flood global markets, destroying pricing power for all European producers
- Execution risk on greentec steel: Major industrial transformations frequently encounter delays, cost overruns, and technical challenges. The 2027 EAF startup timeline is ambitious
Regulatory and Legal Considerations
In 2012, the German Bundeskartellamt served fines totalling âŹ124.5 million on ThyssenKrupp GfT Gleistechnik GmbH and other companies including TSTG Schienen Technik GmbH & Co. KG, Duisburg, a subsidiary of the Voestalpine group (âŹ4.5m); and Voestalpine BWG GmbH & Co. KG, Butzbach, another Voestalpine subsidiary (âŹ4m) for price-fixing of steel railway lines and points blades supplied to Deutsche Bahn, the German state railway. The proceedings had been triggered by an application for leniency filed by the Austrian company Voestalpine AG.
Voestalpine discovered balance sheet irregularities totaling âŹ100 million ($108.63 million) at a subsidiary, involving intentional journal entries to enhance reported profits over the past decade. The Austrian steelmaker found that certain assets were overstated in inventories and receivables, while omissions occurred in accounting for tools, development services, and price adjustments. Voestalpine initiated an internal investigation and placed suspicion on a former manager of the Metal Forming Division, who left in 2023.
XI. Conclusion: The Weight of History, The Promise of Transformation
voestalpine presents a remarkable study in industrial evolution. Born from the darkest chapter of European history, nationalized into socialist symbolism, nearly destroyed by political mismanagement, privatized into competitive success, and now betting its future on green transformationâthe company embodies the tensions and possibilities of European industry.
Since the IPO in 1995, the number of employees has grown from 15,000 to over 50,000, mostly outside Austria, and increasingly outside Europe. The IPO also marked the beginning of the privatization of the former "flagship of Austria's nationalized industry." Since 2005, voestalpine AG has been 100% listed on the Vienna Stock Exchange.
The strategic questions confronting voestalpine today parallel those it faced at each prior inflection point:
In 1946: Can Nazi-era industrial capacity be repurposed for peaceful prosperity? In 1952: Can Austrian engineers compete with established global players? In 1985: Can a bloated state enterprise be restructured for survival? In 1995: Can privatization unlock entrepreneurial energy in socialist culture? In 2007: Can acquiring specialty steel capabilities transform a commodity producer? In 2027: Can switching from blast furnaces to electric arc furnaces redefine European steelmaking?
Each previous transition succeededâthough not without pain, setbacks, and near-misses. The greentec steel transformation represents perhaps the most consequential bet yet.
As of 2030 to 2035, we plan to replace another blast furnace at each of the sites in Linz and Donawitz. To achieve the goal of steel production with net zero CO2-emissions by 2050, we are actively researching into several new processes and investing in pilot projects that demonstrate new ways to produce steel. Another, particularly important, prerequisite for decarbonizing steel production is the availability of sufficient quantities of renewable energy at commercially realistic prices.
For investors, voestalpine offers exposure to a unique combination: European industrial heritage, specialty steel market positions, global railway infrastructure leadership, and first-mover positioning in green steelmaking. The risks are substantialâexecution challenges, commodity exposure, energy costs, and transition uncertainty. But the potential reward is participation in what may become the defining industrial transformation of the 2020s.
In the long run, we are aiming for steel production with net-zero-CO2-emissions by 2050. Hydrogen will play an important role here. Together with our partner VERBUND, we will gain further crucial insights through H2FUTURE Follow-up," says Herbert Eibensteiner, CEO of voestalpine AG.
The company that invented the LD processâtechnology that now produces 70% of the world's steelâis attempting another world-changing innovation. Whether greentec steel achieves similar success will determine voestalpine's next chapter.
From Reichswerke Hermann Göring to greentec steel: an 87-year journey through the extremes of 20th and 21st century industrial history. The steel endures. The story continues.
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