Erste Group Research Company Update voestalpine | Steel | Austria 08 February 2012

voestalpine
from Buy to Accumulate

Analyst: Franz Hoerl, CFA +43 (0)5 0100 - 18506 franz.hoerl@erstegroup.com

Share price (EUR) close as of 06/02/2012 Number of shares (mn) Market capitalization (EUR mn) Enterprise value (EUR mn) 27.8 168.6 4,689.1 9,199.0
Integrated Telecoms

Reuters Bloomberg Div. Ex-date Target price

VOES.VI VOE AV 09/07/12 32.5

Free float 63.8% Shareholders Employee found. (13.3%) RLB O Invest (>15%), Oberbank (7.9%) www.v oestalpine.com Homepage:

Key figures Overview

EUR m n Net sales EBITDA EBIT EBT Net profit EPS (EUR) CEPS (EUR) BVPS (EU R) Dividend/Share (EUR) EV/EBITD A (x) P/E (x) P/CE (x) Dividend yield (%) EBITDA margin (% ) Operat ing margin (%) Net profit margin (%) 2011 10,953.7 1,605.6 984.8 781.0 512.7 3. 04 6. 88 21. 51 0. 80 6. 36 10. 89 4. 82 2. 41 14. 66 8. 99 5. 43 2012e 11,687.4 1,475.7 881.2 699.6 469.4 2. 78 6. 21 23. 47 0. 80 6. 23 9. 99 4. 48 2. 88 12. 63 7. 54 4. 70 2013e 11,209. 0 1,404. 7 826. 0 653. 2 434. 7 2.58 5.75 25.24 0.80 6.30 10.80 4.83 2.88 12.53 7.37 4.59 2014e 11, 607. 0 1, 567. 1 1, 007. 8 860. 3 589. 7 3.49 7.07 27.94 1.20 5.41 7.96 3.93 4.31 13.50 8.68 5.79
Austria

Financial Strength
2011 ROE (%) ROCE (%) Equity ratio (%) Net debt (EUR mn) G earing (%) 15.03 9.06 35.87 3,564.07 75.98 2012e 12.38 8.20 37.94 3,431.60 68.17 2013e 10.58 7.66 41.26 3,076.59 57.60 2014e 13.14 9.21 44.27 2,692.14 46.37

Attractive valuation, despite outperformance Recommendation change: We raise our target price
slightly from EUR 31.5 to EUR 32.5, but downgrade the share from Buy to Accumulate. Despite its long-term outperformance, voestalpine is still valued attractively compared to peers, with discounts ranging from 6-39%. Low 3Q11/12e steel production: Using worldsteel association data, we infer that the Steel Divisions capacity utilization in 3Q11/12e must have been clearly below the 90% guidance given in November. Destocking (by voestalpine as well as customers) should have played the biggest role, however. FY11/12e guidance and consensus are likely (too) ambitious: The expected lower fixed cost degression of the Steel Division in 3Q11/12 will be hard to make up for in 4Q11/12e. Estimates lowered for FY11/12e, but raised for FY12/13e and FY13/14e: Forward-looking indicators have taken a turn for the better in recent weeks and the most important cyclical customer industries have been holding up reasonably well so far. Also, Wolfgang Eder, voestalpines CEO and head of the Steel Division, turned optimistic, noting that order intake has improved massively in January. He therefore expects a cyclical upswing in the absence of unexpected events.

Trading data & Statistics Daily averages Volume Trading value (EUR mn)
40

5 days 440,886 12.3

30 days 421,498 10.9

last year 427,674 9.1

35

30

25

20

15 voestalpine ATX (Rebased) DJ EURO STOXX Basic Resources (Rebased)

Price performance: in EUR

1M 20.7%

3M 6.1%

6M -3.5%

12M -18.4%
Page 1

Erste Group Research Company Update 08 February 2012

All prices are those current at the end of the previous trading session unless otherwise indicated and are sourced from local exchanges via Reuters, Bloomberg and other vendors.

Erste Group Research Company Update voestalpine | Steel | Austria 08 February 2012

Figures overview
Steel Division capacity utilization seems to have been below guidance in 3Q11/12e Using production data published by the worldsteel association, we infer that production in the Steel Division must have been very low in 3Q11/12, due to a very weak December. We estimate that capacity utilization of the blast furnaces in Linz must have been reduced to around 75% in order to bring down high inventories of semi-finished products, while utilization of the rolling capacity was likely higher at about 80-85% - both likely below the companys guidance of 90% utilization given in November. Inventories of rolling slabs had increased in 2Q11/12 due to the 3-week shutdown of the hot rolling mill to upgrade annual capacity from 5.5mn to 6.0mn tons.

Figures overview
Q3 11/12e FY 11/12e Q4 11/12e April-Jun Q1 10/11 April-Jun Q1 11/12 FY 12/13e 202.2 303.0 46.9 111.3 233.0 -70.4 826.0 850.0 7.6% 434.7
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Q4 10/11

Q2 11/12

Q2 10/11

Q3 10/11

FY 10/11

FY 09/10

IFRS (EURmn)

Jan-Mar

Apr-Sep

H1 11/12

Sales Steel Railway Systems Automotive Profilform Special Steel Consolidation Group Growth y/y EBIT Steel Railway Systems Automotive Profilform Special Steel Consolidation Group (IFRS) Group before PPA Adj. EBIT-Margin

3,098.7 2,295.8 835.4 871.3 1,895.4 -446.6 8,550.0 -27.1% 201.4 241.2 18.0 38.6 -103.2 -43.9 352.0 468.4 5.5%

856.2 928.3 956.6 1,098.2 3,839.3 667.9 668.4 695.6 691.4 2,723.3 242.6 234.1 265.8 297.6 1,040.1 273.5 283.0 275.4 307.4 1,139.3 613.8 623.1 658.2 736.2 2,631.3 -97.9 -101.2 -106.8 -113.7 -419.6 2,556.1 2,635.7 2,744.8 3,017.1 10,953.7 22.1% 26.2% 30.3% 33.4% 28.1% 80.7 63.0 12.8 28.4 36.6 -18.2 203.3 220.1 8.6% 85.1 66.2 12.1 28.9 38.5 -19.9 210.9 227.7 8.6% 84.2 78.2 16.6 26.3 51.2 -12.5 244.0 260.8 9.5% 131.2 121.5 101.5 22.5 34.4 82.2 -35.5 326.6 343.4 11.4% 172.4 371.5 308.9 64.0 118.0 208.5 -86.0 984.8 1,051.8 9.6% 512.7

1,038.3 978.1 752.8 751.6 293.1 291.7 329.6 302.4 750.7 713.0 -113.0 -110.6 3,051.5 2,926.2 19.4% 11.0% 101.3 92.2 18.5 41.1 82.7 -18.2 317.6 328.9 10.8% 189.9 59.8 79.7 11.1 23.1 59.0 -18.9 213.8 225.1 7.7% 116.6

2,016.4 996.8 1,015.8 4,029.0 3,947.2 1,504.4 702.6 694.9 2,901.8 2,786.6 584.8 288.4 294.6 1,167.8 1,110.1 632.0 300.2 298.2 1,230.4 1,193.5 1,463.7 681.2 662.6 2,807.5 2,614.4 -223.6 -112.8 -112.7 -449.1 -442.8 5,977.7 2,856.4 2,853.3 11,687.4 11,209.0 15.1% 4.1% -5.4% 6.7% -4.1% 161.1 171.9 29.6 64.2 141.7 -37.1 531.4 553.9 9.3% 306.5 11.8 69.9 13.5 24.4 57.4 -20.4 156.6 167.9 5.9% 69.3 37.5 72.0 14.0 25.3 60.4 -16.0 193.2 204.5 7.2% 93.7 210.4 313.8 57.1 113.9 259.5 -73.4 881.2 926.2 7.9% 469.4

Net attributable income Group (IFRS) 108.4 100.7 108.4 Source: voestalpine AG, Erste Group estimates

FY11/12e guidance and consensus look too ambitious

Destocking, and not real demand, should have played biggest role

We do not view the expected low capacity utilization in 3Q11/12 as dramatic, as we think it is not real end demand, but rather destocking activity (by end-clients, steel distributors and voestalpine itself) that is mainly responsible. We therefore expect a moderate improvement in results q/q already in 4Q11/12e and further in FY12/13e. Nevertheless, in light of the lower fixed cost degression burdening the Steel Divisions profitability in 3Q11/12e, the current consensus estimates and company guidance for the full year look too ambitious. Our new FY11/12e EBIT estimate of EUR 881mn is 2% below company guidance (EUR 900mn) and 6% below the consensus (EUR 939mn).

Erste Group Research Company Update 08 February 2012

Jan-Mar

Oct-Dec

Oct-Dec

Jul-Sep

Jul-Sep

Erste Group Research Company Update voestalpine | Steel | Austria 08 February 2012 Monthly crude steel production in Austria
700 600 Steel production in 000 t 500 400 0.0% 300 200 100 0 Dec-10 Oct-11 Dec-11 Feb-11 Jun-11 Aug-11 Apr-11 -10.0% -20.0% -30.0% 30.0% 20.0% 10.0% y/y growth

LME steel billet price (USD per ton)

Source: World Steel Association

Source: London Metal Exchange

Spot market steel prices trended lower again recently

Likely next move from here should be up

Both raw material prices and steel prices on the spot market have continued to suffer from weak confidence and destocking during the last few months. Steel prices recovered briefly around the turn of the year, which helped voestalpine to renew a number of annual contracts with the automotive industry at decent levels, albeit on average lower than previously. While prices for newly bought iron ore and coking coal also declined as per the start of January, the full positive effect will not be felt until 1Q12/13, due to existing stock. We believe that the most likely next move of steel prices is upwards, as (1) steel mills are already working on thin margins and have cut production; (2) import pressure remains low; and (3) steel end users will have to step up order activity once their inventories are sufficiently low.

German car production / expectations

60% 50% 40% 30% 20% 10% 0% Nov-10 Jan-10 Jan-11 May-10 May-11 -10% -20% -30% -40% Nov-11 Sep-10 Sep-11 Mar-10 Mar-11 Jan-12 Jul-10 Jul-11
60 50

VDMA plant & machinery orders (% y/y)

70

50
40

30

30

20 Index points

10 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11

10

-10

-10

-30

-20

-50
-30

-40

-70

German car production y/y

Expectations next 3 months (rhs)

Domestic orders

Foreign orders

Total orders

Source: Datastream

Source: Datastream

Largest customer industry (automotive) remains unaffected Cyclical engineering industry slows down no repeat of 2008/09
Erste Group Research Company Update 08 February 2012

voestalpines largest customer industry, automotive (30% of group sales), continues to raise production, driven by strong export markets. In January 2012, German car producers raised production 11.8% y/y and production expectations are significantly less negative than they were back in November. The cyclical engineering industry (14% of group sales) is continuing to slow, as industrial confidence indicators show companies have been growing more concerned and are delaying investments. However, a return of the 2008/09 scenario does not look likely. The
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Erste Group Research Company Update voestalpine | Steel | Austria 08 February 2012 German engineering industry body, VDMA, reports that order intake in 4Q11 declined 7% y/y, due entirely to lower foreign orders. Forward-looking industrial indicators improved Forward-looking indicators such as industrial confidence and manufacturing PMIs have taken a turn for the better in recent weeks. The US manufacturing sector seems to be expanding and PMIs in the Eurozone and China while still pointing to a moderate contraction seem to have already bottomed out. Wolfgang Eder, voestalpines CEO and head of the Steel Division, turned optimistic at the end of January, noting that order intake improved massively that month. He therefore expects a cyclical upswing in the absence of unexpected events with banks or government debt.

CEO Eder notes massive order improvement in January and expects cyclical upswing

Estimate changes
Estimates lowered for FY11/12e, but raised for FY12/13e We fine-tuned our estimates and expect slightly lower earnings for FY11/12. However, based on more positive forward-looking industrial indicators and as activity in most important customer industries is holding up reasonably well, we now expect the downturn in FY12/13 to be somewhat less severe than we feared in our last report. We made no big changes to our long-term estimates.
2011/12e Now Before 11,687.4 1,475.7 881.2 469.4 2.78 11,646.2 1,509.6 915.1 495.5 2.94 2012/13e Now Before 11,209.0 1,404.7 826.0 434.7 2.58 10,670.8 1,275.1 701.9 344.2 2.04 2013/14e Now Before 11,607.0 1,567.1 1,007.8 589.7 3.49 11,083.2 1,512.8 938.3 538.8 3.19

Change in estimates
Consolidated, IFRS (EUR, mn) Sales revenues EBITDA EBIT Net after minorities EPS (in EUR) Source: Erste Group Research Change 0.4% -2.2% -3.7% -5.3% -5.3% Change 5.0% 10.2% 17.7% 26.3% 26.3% Change 4.7% 3.6% 7.4% 9.5% 9.6%

Valuation and recommendation

1. DCF valuation: Based on higher estimates mainly for 2012/13e and 2013/14e, our DCF model arrives at a slightly higher 12-month target price of EUR 32.5 per share (previously: EUR 31.5). The DCF model is calculated with a current risk-free rate of 3.0% (4.5% in the long term), a normalized terminal value and deducting the expected net debt (including hybrid capital and social capital) at the end of March 2012. For the terminal value, we assumed a slightly lower normalized mid-cycle EBIT margin of 8.5%, a 1% annual growth rate and investments 5% above depreciation. voestalpine plans to limit investments to below depreciation (about EUR 600mn) and we have not included any acquisitions or divestments in our CAPEX assumptions.

Erste Group Research Company Update 08 February 2012

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Erste Group Research Company Update voestalpine | Steel | Austria 08 February 2012

WACC calculation
2013e Risk free rate Equity risk premium Beta Cost of equity Cost of debt Effective tax rate After-tax cost of debt Equity weight WACC 3.0% 4.9% 1.40 9.9% 5.0% 25.0% 3.8% 60% 7.4% 2014e 3.0% 4.9% 1.40 9.9% 5.0% 25.0% 3.8% 60% 7.4% 2015e 3.0% 4.9% 1.40 9.9% 5.0% 25.0% 3.8% 60% 7.4% 2016e 3.0% 4.9% 1.40 9.9% 5.0% 25.0% 3.8% 60% 7.4% 2017e 3.0% 4.9% 1.40 9.9% 5.0% 25.0% 3.8% 60% 7.4% NY / TV 4.5% 4.8% 1.40 11.2% 6.0% 25.0% 4.5% 80% 9.9%

DCF valuation
(EUR mn) Sales growth EBIT EBIT margin Tax rate Taxes on EBIT NOPLAT + Depreciation and Amortisation Capital expenditures / Depreciation +/- Change in working capital Chg. working capital / chg. Sales - Capital expenditures Free cash flow to the firm Terminal value growth Terminal value Discounted free cash flow - Mar 31 2012 Enterprise value - Mar 31 2012 Minorities Non-operating assets Net debt Hybrid capital Equity value - Mar 31 2012 Number of shares outstanding (mn) Cost of equity 12M target price per share (EUR) Current share price (EUR) Up/Downside 2013e -4.1% 826.0 7.4% 25.0% -206.5 619.5 578.7 96.8% 88.1 -18.4% -560.0 726.2 2014e 3.6% 1,007.8 8.7% 25.0% -251.9 755.8 559.3 103.7% -43.6 -10.9% -580.0 691.5 2015e 6.8% 1,184.3 9.6% 25.0% -296.1 888.3 569.3 101.9% -114.9 -14.7% -580.0 762.7 2016e 4.9% 1,298.6 10.0% 25.0% -324.6 973.9 568.9 105.5% -92.3 -15.1% -600.0 850.5 2017e 2.9% 1,290.3 9.6% 25.0% -322.6 967.7 580.5 103.4% -72.2 -19.2% -600.0 876.0 NY / TV 1.0% 1,148.6 8.5% 25.0% -287.1 861.4 585.0 105.0% -22.7 -17.0% -614.3 809.4 1.0% 9,200.8 6,432.3

676.1 9,574.0 81.6 0.0 3,431.6 992.1 5,068.7 168.7 9.9% 32.5 27.8 16.8%

599.3

615.3

638.7

612.4

Enterprise value breakdown

Sensitivity (per share)

Terminal value EBIT margin

P V of terminal value 67%

WACC

PV of detailed period 33%

32 8.9% 9.4% 9.9% 10.4% 10.9% 32 8.9% 9.4% 9.9% 10.4% 10.9%

7.5% 31.9 29.5 27.3 25.4 23.7 0.0% 32.1 29.9 28.0 26.2 24.6

8.0%

8.5%

9.0% 40.6 37.7 35.1 32.7 30.6 1.5% 41.1 37.9 35.2 32.7 30.5

9.5% 43.5 40.4 37.6 35.2 33.0 2.0% 45.0 41.4 38.2 35.4 32.9

34.8 37.7 32.2 34.9 32.5 29.9 27.8 30.3 26.0 28.3 Terminal value growth 0.5% 1.0% 34.7 37.7 32.3 34.9 30.1 32.5 28.1 30.3 26.4 28.3

Source: Erste Group Research

Erste Group Research Company Update 08 February 2012 Page 5

WACC

Erste Group Research Company Update voestalpine | Steel | Austria 08 February 2012 2. Peer group comparison: voestalpine has above-average financial leverage, which can be seen in the high EV, as compared to market capitalization. Due to its focus on high-quality niche segments, market share gains, the high share of the downstream business and low exposure to the weak construction industry, voestalpine has been the most defensive steel company in the peer group (i.e. lowest operating leverage). voestalpine trades at discounts of 6-15% on EV/EBITDA and 29-39% on P/E for the years 2011/12e 2013-14e. Although voestalpines ROE is about double the peer groups, its premium on P/BV is just 17%. Overall, despite its gradual outperformance, voestalpine is still valued attractively compared to peers.

Peer Group Comparison

(EUR mn) Rautaruukki Oyj SSAB Svenskt Stal Salzgitter AG ThyssenKrupp AG ArcelorMittal Acerinox SA Sandvik AB voestalpine Market EV Cap. 11/12e 1,304 1,768 2,064 4,201 2,838 1,713 11,519 12,561 25,224 42,430 2,781 3,616 14,774 13,964 4,694 9,199 Price 9.3 8.6 47.2 22.4 16.2 11.2 11.8 EBITDA 11/12e 12/13e 13/14e 11/12e 189 233 328 2,798 551 642 764 4,959 605 645 732 9,610 3,385 2,920 3,953 43,356 7,739 7,809 9,096 72,228 374 481 593 4,708 1,897 2,075 2,277 10,420 1,476 1,405 1,567 11,687 EV/EBITDA 11/12e 12/13e 13/14e 9.4 8.9 6.1 7.6 7.2 5.7 2.8 3.1 2.6 3.7 5.2 3.7 5.5 5.6 4.7 9.7 8.3 6.8 7.4 8.3 7.4 7.4 7.2 5.7 6.2 6.3 5.4 -15% -12% -6% 11/12e 84.1 14.0 18.5 7.3 10.2 24.7 15.4 15.4 10.0 -35% 9.3 -39% Sales 12/13e 2,885 5,236 9,626 42,276 70,807 5,150 10,915 11,209 13/14e 2,995 5,566 9,960 45,412 74,744 5,714 11,516 11,607 11/12e 0.11 0.60 2.55 -0.97 1.59 0.45 0.75 2.78 P/BV 11/12e 1.0 0.8 0.6 1.2 0.5 1.6 3.8 1.0 1.2 17% EPS 12/13e 0.30 0.76 3.45 1.26 1.68 0.73 0.81 2.58 13/14e 0.79 1.02 4.11 2.50 2.40 0.98 0.94 3.49

Rautaruukki Oyj Euro SSAB Svenskt Stal Euro Salzgitter AG Euro ThyssenKrupp AG Euro ArcelorMittal Euro Acerinox SA Euro Sandvik AB Euro Median voestalpine Euro 27.82 Premium/discount Multiple adjusted for ppa Premium/discount to peers Source: Factset, Erste Group estimates

P/E 12/13e 13/14e 31.0 11.8 11.3 8.4 13.7 11.5 17.8 9.0 9.6 6.7 15.3 11.4 14.5 12.5 14.5 11.4 10.8 8.0 -26% -30% 10.4 7.9 -29% -31%

ROE 11/12e 12/13e 1.2% 3.3% 5.6% 6.7% 3.5% 4.5% -5.2% 6.9% 5.1% 5.3% 6.3% 9.8% 24.5% 23.0% 5.1% 6.7% 12.4% 10.6%

Downgrade to Accumulate with slightly higher target price of EUR 32.5 (prev.: EUR 31.5)

In light of a lower estimate for 2011/12e but higher estimates for 2012/13e and 2013/14e, we raise our target price slightly, from EUR 31.5 to EUR 32.5, but downgrade the share from Buy to Accumulate, after its recent strong rebound. In comparison to the peer group, the general economic outlook still favors voestalpine, due to its more defensive business model and discounts of 6-39%.

Erste Group Research Company Update 08 February 2012

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Erste Group Research Company Update voestalpine | Steel | Austria 08 February 2012

Contacts
Group Research
Head of Group Research Friedrich Mostbck, CEFA Macro/Fixed Income Research Head: Gudrun Egger, CEFA (Euroland) Adrian Beck (AT, SW)) Mildred Hager (US, JP, Euroland) Alihan Karadagoglu (Corporates) Peter Kaufmann (Corporates) Carmen Riefler-Kowarsch (Covered Bonds) Elena Statelov, CIIA (Corporates) Macro/Fixed Income Research CEE Co-Head CEE: Juraj Kotian (Macro/FI) Birgit Niessner (CEE) CEE Equity Research Co-Head: Gnther Artner, CFA Co-Head: Henning Ekuchen Gnter Hohberger (Banks) Franz Hrl, CFA (Steel, Construction) Daniel Lion, CIIA (IT) Christoph Schultes, CIIA (Insurance, Utility) Thomas Unger, CFA (Oil&Gas) Vera Sutedja, CFA (Telecom) Vladimira Urbankova, MBA (Pharma) Martina Valenta, MBA (Real Estate) Gerald Walek, CFA (Machinery) International Equities Hans Engel (Market strategist) Stephan Lingnau (Europe) Ronald Stferle (Asia) Editor Research CEE Brett Aarons Research Croatia/Serbia Head: Mladen Dodig (Equity) Head: Alen Kovac (Fixed income) Anto Augustinovic (Equity) Ivana Rogic (Fixed income) Davor Spoljar; CFA (Equity) Research Czech Republic Head: David Navratil (Fixed income) Petr Bittner (Fixed income) Head: Petr Bartek (Equity) Vaclav Kminek (Media) Jana Krajcova (Fixed income) Martin Krajhanzl (Equity) Martin Lobotka (Fixed income) Lubos Mokras (Fixed income) Josef Novotn (Equity) Research Hungary Head: Jzsef Mir (Equity) Orsolya Nyeste (Fixed income) Gergely Gabler (Equity) Zoltan Arokszallasi (Fixed income) Research Poland Head: Piotr Lopaciuk (Equity) Tomasz Kasowicz (Equity) Marek Czachor (Equity) Research Romania Head: Lucian Claudiu Anghel Head Equity: Mihai Caruntu (Equity) Dorina Cobiscan (Fixed Income) Dumitru Dulgheru (Fixed income) Eugen Sinca (Fixed income) Raluca Ungureanu (Equity) Research Slovakia Head: Juraj Barta, CFA (Fixed income) Sona Muzikarova (Fixed income) Maria Valachyova (Fixed income) Research Ukraine Head: Maryan Zablotskyy (Fixed income) Ivan Ulitko (Equity) Igor Zholonkivskyi (Equity) Research Turkey Head: Erkin Sahinoz (Fixed Income) Sevda Sarp (Equity) Evrim Dairecioglu (Equity) Ozlem Derici (Fixed Income) Mehmet Emin Zumrut (Equity) M. Grkem Gker (Equity) +43 (0)5 0100 - 11902 +43 (0)5 0100 - 11909 +43 (0)5 0100 11957 +43 (0)5 0100 - 17331 +43 (0)5 0100 - 19633 +43 (0)5 0100 - 11183 +43 (0)5 0100 - 19632 +43 (0)5 0100 - 19641 +43 (0)5 0100 - 17357 +43 (0)5 0100 - 18781 +43 (0)5 0100 - 11523 +43 (0)5 0100 - 19634 +43 (0)5 0100 - 17354 +43 (0)5 0100 - 18506 +43 (0)5 0100 - 17420 +43 (0)5 0100 - 16314 +43 (0)5 0100 - 17344 +43 (0)5 0100 - 11905 +43 (0)5 0100 - 17343 +43 (0)5 0100 - 11913 +43 (0)5 0100 - 16360 +43 (0)5 0100 - 19835 +43 (0)5 0100 - 16574 +43 (0)5 0100 - 11723 +420 956 711 014 +381 11 22 09 178 +385 62 37 1383 +385 62 37 2833 +385 62 37 2419 +385 62 37 2825 +420 224 995 439 +420 224 995 172 +420 224 995 227 +420 224 995 289 +420 224 995 232 +420 224 995 434 +420 224 995 192 +420 224 995 456 +420 224 995 213 +361 235-5131 +361 373-2026 +361 235-5132 +361 373-2830 +48 22 330 6252 +48 22 330 6251 +48 22 330 6254 +40 37226 1021 +40 21 311 2754 +40 37226 1028 +40 37226 1029 +40 37226 1026 +40 21 311 2754 +421 2 4862 4166 +421 2 4862 4762 +421 2 4862 4185 +38 044 593 - 9188 +38 044 593 0003 +38 044 593 - 1784 +90 212 371 2540 +90 212 371 2537 +90 212 371 2535 +90 212 371 2536 +90 212 371 2539 +90 212 371 2534

Group Institutional & Retail Sales

Institutional Equity Sales Vienna Head: Brigitte Zeitlberger-Schmid +43 (0)5 0100 - 83123 Cash Equity Sales Hind Al Jassani +43 (0)5 0100 - 83111 Werner Fuerst +43 (0)5 0100 - 83121 Josef Kerekes +43 (0)5 0100 - 83125 Cormac Lyden +43 (0)5 0100 - 83127 Stefan Raidl +43 (0)5 0100 - 83113 Simone Rentschler +43 (0)5 0100 - 83124 Derivative Sales Christian Luig +43 (0)5 0100 - 83181 Brigitta Weilinger +43 (0)5 0100 - 83182 Sabine Kircher +43 (0)5 0100 - 83161 Christian Klikovich +43 (0)5 0100 - 83162 Armin Pfingstl +43 (0)5 0100 - 83171 Roman Rafeiner +43 (0)5 0100 - 83172 Institutional Equity Sales London Head: Michal Rizek +44 20 7623 - 4154 Jiri Feres +44 20 7623 - 4154 Tatyana Dachyshyn +44 20 7623 - 4154 Declan Wooloughan +44 20 7623 - 4154 Institutional Equity Sales Croatia Damir Eror (Equity) +38 562 37 28 13 Zeljka Kajkut (Equity) +38 562 37 28 11 Institutional Sales Czech Republic Head: Michal Rizek +420 224 995-537 Ondrej Cech (Fixed income) +420 224 995-577 Radim Kramule +420 224 995-537 Jiri Smehlik (Equity) +420 224 995-510 Pavel Zdichynec (Fixed income) +420 224 995-590 Institutional Sales Hungary Gregor Glatzer (Equity) +361 235-5144 Attila Preisz (Equity) +361 235-5162 Norbert Siklosi (Fixed income) +361 235-5842 Institutional Equity Sales Poland Head: Andrzej Tabor +4822 330 62 03 Pawel Czuprynski (Equity) +4822 330 62 12 Lukasz Mitan (Equity) +4822 330 62 13 Jacek Krysinski (Equity) +4822 330 62 18 Institutional Equity Sales Turkey Simin z Gerards (Head) +9 0212 371 2525 Mine Yoruk +9 0212 371 2526 Institutional Equity Sales Slovakia Head: Dusan Svitek +48 62 56 20 Andrea Slesarova (Client sales) +48 62 56 27 Saving Banks & Sales Retail Head: Thomas Schaufler +43 (0)5 0100 - 84225 Equity Retail Sales Head: Kurt Gerhold +43 (0)5 0100 - 84232 Fixed Income & Certificate Sales Head: Uwe Kolar +43 (0)5 0100 - 83214 Treasury Domestic Sales Head: Markus Kaller +43 (0)5 0100 - 84239 Corporate Sales AT Mag. Martina Kranzl +43 (0)5 0100 84147 Karin Rattay +43 (0)5 0100 - 84112 Mag. Markus Pistracher +43 (0)5 0100 - 84152 Gnther Gneiss +43 (0)5 0100 - 84145 Jrgen Flassak, MA +43 (0)5 0100 - 84141 Antonius Burger-Scheidlin, MBA +43 (0)5 0100 - 84624 Fixed Income Institutional Desk Head G7: Thomas Almen +43 (0)5 0100 - 84323 Head Germany: Ingo Lusch +43 (0)5 0100 - 84111 Fixed Income International & High End Sales Vienna Jaromir Malak/ Zach Carvell +43 (0)5 100 - 84254 U. Inhofner/ P. Zagan/ C. Mitu +43 (0)5 100 - 84254 Fixed Income International Sales London Antony Brown +44 20 7623 4159

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Erste Group Research Company Update voestalpine | Steel | Austria 08 February 2012 voestalpine
45

Rating history
Date 07. Oct 09 29. May 09 21. Jul 08 05. Jul 07 12. Mar 07 24. Feb 06 25. Nov 05 13. Apr 05 19. Nov 04 25. May 04 30. Mar 04 26. Nov 03 Rating Buy Hold Accumulate Buy Accumulate Hold Buy Accumulate Buy Hold Accumulate Buy Price 24.18 20.31 41.87 64.25 50.15 24.25 19.95 14.28 13.13 9.15 9.20 8.32 Target Price 29.00 17.00 44.00 88.00 56.00 26.25 25.00 62.00 65.00 38.00 40.00 38.00

40

35

30

25

20

15 Jun 10

Sep 10

Dec 10

Mar 11

Jun 11

Sep 11

Dec 11

Mar 12

Target price 12 m fwd

Company
voestalpine

Specific disclosure(s) if applicable

2, 4

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Erste Group Research Company Update voestalpine | Steel | Austria 08 February 2012

Important Disclosures
General disclosures: All recommendations given by Erste Group Research are independent and based on the latest company, industry and general information publicly available. The best possible care and integrity is used to avoid errors and/or misstatements. No influence on the rating and/or target price is being exerted by either the covered company or other internal Erste Group departments. Each research piece is reviewed by a senior research executive, the rating is agreed upon with an internal rating committee of senior research executives. Erste Group Compliance Rules state that no analyst is allowed to hold a direct ownership position in securities issued by the covered company or derivatives thereof. Analysts are not allowed to involve themselves in any paid activities with the covered companies except as disclosed otherwise. The analyst's compensation is primarily based not on investment banking fees received, but rather on performance and quality of research produced. Description of specific disclosures:
(1) Erste Group and/or its affiliates hold(s) an investment in any class of common equity of the covered company of more than 5% (for Croatian companies 1%). (2) Erste Group and/or its affiliates act(s) as market maker or liquidity provider for securities issued by the covered company. (3) Within the past year, Erste Group and/or its affiliates have managed or co-managed a public offering for the covered company. (4) Erste Group and/or its affiliates have an agreement with the covered company relating to the provision of investment banking services or have received compensation during the past 12 months. (5) Erste Group and/or its affiliate(s) have other significant financial interests in relation to the covered company.

Erste Group rating definitions Buy Accumulate Hold Reduce Sell

> +20% to target price +10% < target price < +20% 0% < target price < +10% -10% < target price < 0% < -10% to target price

Our target prices are established by determining the fair value of stocks, taking into account additional fundamental factors and news of relevance for the stock price (such as M&A activities, major forthcoming share deals, positive/negative share/sector sentiment, news) and refer to 12 months from now. All recommendations are to be understood relative to our current fundamental valuation of the stock. The recommendation does not indicate any relative performance of the stock vs. a regional or sector benchmark.

Distribution of ratings
Coverage universe No. in % 65 35.9 43 23.8 40 22.1 9 5.0 5 2.8 19 10.5 181 100.0 Inv. banking-relationship No. in % 12 42.9 7 25.0 5 17.9 3 10.7 0 0.0 1 3.6 28 100.0

Recommendation Buy Accumulate Hold Reduce Sell N.R./UND.REV./RESTR. Total

Published by Erste Group Bank AG, Neutorgasse 17, 1010 Vienna, Austria. Phone +43 (0)5 0100 - ext.

Erste Group Homepage: www.erstegroup.com On Bloomberg please type: EBS AV and then F8 GO
This research report was prepared by Erste Group Bank AG (Erste Group) or its affiliate named herein. The individual(s) involved in the preparation of the report were at the relevant time employed in Erste Group or any of its affiliates. The report was prepared for Erste Group clients. The information herein has been obtained from, and any opinions herein are based upon, sources believed reliable, but we do not represent that it is accurate or complete and it should not be relied upon as such. All opinions, forecasts and estimates herein reflect our judgment on the date of this report and are subject to change without notice. The report is not intended to be an offer, or the solicitation of any offer, to buy or sell the securities referred to herein. From time to time, Erste Group or its affiliates or the principals or employees of Erste Group or its affiliates may have a position in the securities referred to herein or hold options, warrants or rights with respect thereto or other securities of such issuers and may make a market or otherwise act as principal in transactions in any of these securities. Erste Group or its affiliates or the principals or employees of Erste Group or its affiliates may from time to time provide investment banking or consulting services to or serve as a director of a company being reported on herein. Further information on the securities referred to herein may be obtained from Erste Group upon request. Past performance is not necessarily indicative for future results and transactions in securities, options or futures can be considered risky. Not all transactions are suitable for every investor. Investors should consult their advisor, to make sure that the planned investment fits into their needs and preferences and that the involved risks are fully understood. This document may not be reproduced, distributed or published without the prior consent of Erste Group. Erste Group Bank AG confirms that it has approved any investment advertisements contained in this material. Erste Group Bank AG is regulated by the Financial Market Authority (FMA) Otto-Wagner-Platz 5,1090 Vienna, and for the conduct of investment business in the UK by the Financial Services Authority (FSA) and for the conduct of investment activities in Croatia by the Croatian Financial Services Supervisory Agency (CFSSA). Notice to Turkish Investors: As required by the Capital Markets Board of Turkey, investment information, comments and recommendations stated here, are not within the scope of investment advisory activity. Investment advisory service is provided in accordance with a contract of engagement on investment advisory concluded between brokerage houses, portfolio management companies, non-deposit banks and clients. Comments and recommendations stated here rely on the individual opinions of the ones providing these comments and recommendations. These opinions may not fit to your financial status, risk and return preferences. For this reason, to make an investment decision by relying solely to this information stated here may not bring about outcomes that fit your expectations.

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