Outlook
As already reported, effective September 30, 2011 the legal, organizational and contractual conditions were created for the separation of the Stainless Global business area; it is thus now classified as a discontinued operation. The following forecast therefore relates exclusively to the Group's continuing operations, which no longer include Stainless Global.
Sales and earnings – In fiscal 2011/2012 priority will continue to be given to the implementation of the Group's Strategic Way Forward. This integrated strategy encompassing portfolio optimization, change management and a strong focus on performance is aimed at improving the Group's financial situation and increasing our strategic latitude. The corporate program impact is the central platform for this.
Our business performance in 2011/2012 will be characterized to a very large extent by the possible impact of the financial crisis on our core markets in Europe and the NAFTA region, the scope of which cannot be reliably assessed at this time. The Group takes these uncertain parameters into account in its outlook.
Our expectations for sales and earnings from continuing operations (adjusted EBIT) compared with the prior year are currently as follows:
In the event of stagnation in our core markets we expect the Group's sales to remain at the prior-year level provided there are no major dislocations on the raw materials markets.
Earnings from the Materials business units should improve as a result of the ramp-up at Steel Americas; this will be partly offset by the absence of prior-year earnings effects from raw material-driven price increases at Steel Europe and Materials Services. At our less cyclical Technologies businesses Elevator Technology, Plant Technology and Marine Systems, earnings should be stable; however at Marine Systems the positive nonrecurring effects of the prior year will not be repeated. At Components Technology there could be a slight decline in capacity utilization.
In the event of a slight downturn in our core markets we expect sales and earnings to slip, but after-tax income from continuing operations should remain positive.
Our goal in the 2011/2012 fiscal year continues to be to reduce complexity in the Group, cut costs, and improve cash generation on a sustainable basis. In addition we will strive to lower our net financial debt.
In the 2012/2013 fiscal year we will work on the structural improvement of the Group and rigorously implement our integrated strategic development plan. This may include among other things measures to achieve sustainable cost reductions or to 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 with the general growth in the economy. Offsetting effects could result from portfolio measures. Rising sales and structural improvements should have a correspondingly positive impact on earnings. Further upside potential should come from operating improvements at Steel Americas. We will continue to strive to reduce our net financial debt.
Source: Annual Report 2010/2011, p. 104-105
