the charts of EWO (in green, Austria large cap index in USD) vs CMC (in black, Commericial metal)

the correlation is unmistakable.

checking deeper, the reason is clear:

the second largest stock within EWO is:

Vostalpine, a steel and metals processing company was once government owned, then fully privatized by 2010. now focusing on metals processing for auto and aircraft, and building plants in US and China.


from company website:

1/2H 2015 results

  • Revenue up by 4.1% from EUR 5.6 billion to EUR 5.8 billion
  • Earnings impacted by both positive non-recurring effects and increase in operating result
  • Operating result (EBITDA) rises by 17.9% from EUR 757 million to EUR 892 million (excluding non-recurring effects, going from EUR 690 million to EUR 755 million, a plus of 9.3%); EBITDA margin is 15.4%; at 13%, the adjusted EBITDA margin is also a clear gain over the previous year’s figure of 12.4%
  • Profit from operations (EBIT) climbs by 29.4% from EUR 445 million to EUR 575 million (excluding non-recurring effects, going from EUR 400 million to EUR 450 million, a plus of 12.7%); EBIT margin is 9.9%; the adjusted EBIT margin is also up from 7.2% to 7.8%
  • At EUR 506 million, profit before tax is 29.1% higher than in the previous year (excluding non-recurring effects: EUR 381 million, +9.8%); profit for the period goes up by 33.3% to EUR 421 million (excluding non-recurring effects: EUR 290 million, +6.6%)
  • At 57.2%, gearing ratio improves despite the recent distribution of dividends
  • Construction of the direct reduction plant in Texas has almost reached the final phase
  • At 48,719 as of the end of the first half of 2015/16, the workforce reaches a record high

if this momentum continues, annual ebidta could reach 1.7B EUR or about 1.6B USD in 2017

trading at 31 EUR, or 5.4B market cap with about 2.5B net debt, that gives EV=5.4+2.5=7.9B

or EV/Ebidta=7.9/1.6=4.9 somewhat cheap

to give an example

CMC @ 15 is at about 5.5,

STLD  @ 17.5 is at 8

all three seem to be good companies in a difficult industry

Voestalpine probably got a late start, being handcuffed by the Austrian government meddling and unions. Whereas the US based companies are more entrepreurial.


it does seem if oil prices stay low for the next decade or two, then demand for autos and aircraft  in emerging markets will explode after this weak period, as more people want to travel domestically or internaionally.