Outlook

The sovereign debt crisis has had a clear impact on our core markets in fiscal 2011/2012 to date; continuing economic uncertainties cannot be ruled out.

However, based on the stability of our less cyclical capital goods operations as well as improvements in our materials operations, we expect a moderate increase in our adjusted EBIT in the 2nd half of the current fiscal year compared with the 1st half:

• In the materials operations, we expect Steel Europe's earnings to come in at the level of the 1st half with volumes and prices influenced by continuing intense competition, while earnings at Materials Services should be better in the 2nd half. At Steel Americas, the increased stability of the operational ramp-up will bring improvements; these will be partly offset by continuing price pressure due to the market entry.
• In the capital goods operations we expect earnings contributions to improve at Plant Technology and hold steady at Elevator Technology. In the comparatively more cyclical Components Technology business we believe that the current good operating levels will continue into the 2nd fiscal half. The earnings contributions from Marine Systems will normalize.

For fiscal year 2011/2012 as a whole we expect adjusted EBIT for the Group in the mid three-digit million euro range.

Our goal in fiscal 2011/2012 remains to reduce complexity in the Group, cut costs, and sustainably improve cash generation. In addition we aim to reduce net financial debt.

• We will continue to work on the structural improvement of the Group and rigorously implement our integrated strategic development plan. This may include measures to achieve sustainable cost reductions or optimize the portfolio.
• Provided the economic effects of the sovereign debt crisis do not extend into our 2012/2013 fiscal year, we expect our sales to increase in line with general economic growth. Offsetting effects could result from portfolio measures.
• Rising sales and structural improvements should have a correspondingly positive effect on earnings. Further upside potential should come from operating improvements at Steel Americas. We will continue to seek to reduce our net financial debt.

Source: Interim Report 1st half 2011/2012, p. 26-27