Voestalpine secures €500M rail deals amid steel market struggles
Voestalpine has landed two major rail contracts worth nearly €500 million with Deutsche Bahn and Swiss Federal Railways (SBB). The deals include modernising tracks, supplying signalling technology, and installing real-time monitoring systems. These long-term agreements come as the company faces a challenging steel market and a share price well below its recent peak.
The Swiss contract centres on a 20-year framework agreement with SBB. Voestalpine will deliver axle-counting systems for real-time track monitoring as part of Switzerland's ongoing rail network upgrades. Demand for rail and signalling technology in the country has surged in recent years, growing by 5–7% annually. This rise follows heavy investment in projects like the Gotthard Base Tunnel, EU funding, and sustainability targets.
In Germany, Voestalpine will supply premium rails, switch components, and signalling equipment for Deutsche Bahn's infrastructure projects. The national operator plans to invest over €23 billion in upgrades by 2026. However, German demand for rail technology has remained flat or slightly declined—growing just 1–2% yearly—due to budget cuts at DB Netz, supply chain issues, and a shift toward digital systems like ETCS. The new contracts could help stabilise Voestalpine's revenue streams. Currently, the company's share price sits around 19% below its 52-week high. Secure, long-term orders may reduce its reliance on the volatile steel market, offering more predictable capacity. Beyond rail contracts, Voestalpine's logistics arm, CargoServ, ensures a steady supply of raw materials. Each year, it transports roughly 1.8 million tons of iron ore from the Erzberg mine to the Linz steelworks using specialised container systems.
The agreements with SBB and Deutsche Bahn mark a significant expansion of Voestalpine's rail infrastructure business. Both contracts provide long-term revenue while supporting major upgrades in Swiss and German networks. For the company, these deals arrive at a time when diversifying beyond steel production has become increasingly important.
