1) Incl. sales to other corporate divisions
The Tubes Division consists of a large number of subsidiaries and associated companies which manufacture and process welded and seamless steel tubes on four continents. The product spectrum comprises mainly pipelines of all diameters, ranging from gas pipelines through to injection tubes for diesel engines, stainless oil field and boiler tubes, precision tubes and cold-finished tubes for the automotive and machine building industries, as well as construction tubes in a variety of profiles.
Having started at an early stage in 2010, the global steel tube production’s process of recovery from the 2009 slump is set to continue in 2011. Chinese production is likely to see an above-average increase driven by strong domestic demand. The rest of the world is also reporting ongoing growth rates against the backdrop of still very high energy prices. Production will, however, be unable to match the record level in 2008. The nuclear catastrophe in Japan has at minimum called the German energy concept into question and ensured a revival of the discussion about the energy mix in other countries. In the medium term, therefore, positive stimulus for the steel tubes industry can be expected from the growing significance of gas, and thus of plans for new exploration projects, pipelines and power plant construction, as well as from new technologies, such as the conveying of unconventional gas or C02 storage. A countermanding effect is, however, the swift ramping up of global steel tubes capacities induced by the boom years from 2005 to 2008 which is likely to persist in 2011 and beyond.
Despite the lower volume booked, new orders placed with the Tubes Division in the first three months of the financial year 2011 were 18 % higher than a year ago owing to the improved selling price level. To the exception of HFI-welded tubes, the other product groups reported partly notable growth rates, led by the increase in seamless stainless tubes (+65 %) through the acquiring of major orders. Consolidated orders on hand climbed by 36 % with all product segments recording growth.
Tube shipments fell short of the previous-year level as the higher volume of precision and stainless tubes was unable to fully compensate for the decline in large-diameter tubes.
Tubes-Sales (in € million)
Tubes-EBT (in € million)
The Tubes Division's segment sales were slightly higher year on year. Here, the large-diameter product segment was unable to match sales in terms of volume whereas all other product segments outperformed the previous year's figure external sales remained at an unchanged level.
The pre-tax result stood at 14.7 million in the first quarter of 2011, which was considerably above the figure posted in the year-earlier period. All product segments contributed to this development with only the largediameter tubes business marginally dropping behind the 2010 figure. The precision tubes segment staged a turnaround and wrote back figures again.
Business performance of the product segments:
Whereas standard business in HFI-welded tubes performed well, incoming orders in the international project business ran at a lower level as the markets remained unsettled against the backdrop of fierce competition. Consequently, order intake in the first quarter of 2011 was lower in a year-on-year comparison. Owing to selling prices, orders in hand exceeded the previous year's figure, and shipments attained the 2010 level. The renewed uptrend in prices boosted sales and led to an improvement in the result before tax, which nonetheless remained in the red.
Orders placed by the mechanical engineering and the trade industries doubled and, in conjunction with the rising demand from the automotive sector, resulted in an increase in order intake by the precision tubes segment of almost 50 % in comparison with the year-earlier period. As the precision tubes plants are running production to almost full capacity, orders in hand have soared by 75 % even though shipments were also higher than a year ago. Higher selling prices led to an above-average sales growth. The increase in volume and the successful implementation of measures initiated to improve profit resulted in a pre-tax profit.
The market environment for seamless stainless tubes has been difficult since the slump in 2008. However, order intake from 2010 and performance to date in the current reporting period are reason for cautious optimism. Particularly in the oil and gas segments there has been a certain discernible recovery, corroborated by the currently large number of projects being put out to public tender. The MST Group was already reaping the benefit of this positive development in 2010. The recovery continued in the first three months of 2011 when a number of major contracts were acquired, although there is still no sustainable improvement in the MST Group’s important power plant construction project business. Order intake and orders in hand were considerably higher than a year ago. Shipments and sales were also raised. Following the negative result posted in the first quarter of 2010, breakeven was achieved in the first quarter of the current year.