Salzgitter Aktie

Good morning, ladies and gentlemen, and welcome to the conference call of the Q1 results 2026 of the Salzgitter AG. [Operator Instructions]. Let me now turn the floor over to Birgit Potrafki, CFO; and Markus Heidler, Head of Investor Relations.

Thank you very much, and good morning, ladies and gentlemen, and a warm welcome from me here in Salzgitter. I'm happy to announce that with EUR 280 million adjusted EBITDA, we have made a promising start to 2026. And I can tell you that after 2 challenging years, that feels really good.

As announced on April 21, our first quarter performance was boosted by an exceptionally strong contribution from our stake in Aurubis. This was driven by the high prices commanded for precious metals. It's important to stress though that all our core business units also contributed to the earnings improvement versus a year earlier. This is obviously very pleasing. Our P28 performance program has been a key contributor to this business-wide turnaround. An additional EUR 43 million in efficiency gains were realized already in the first quarter.

Our net financial position has also improved considerably since the beginning of the year from minus EUR 954 million to minus EUR 679 million, mainly on the back of the prompt payment of additionally committed public funding of EUR 253 million on the first quarter.

Having said that, we are not getting carried away. The market environment in which we are operating offers some glimmers of hope, but remains challenging overall. We said at the start of the year that we were cautiously optimistic about our prospects for the year, and that remains the case. On the one hand, the new trade defense instrument proposed by the EU Commission in October will be formally adopted in the coming weeks. From July onwards, it will enable the EU to reset duty-free imports back to where they were a decade ago. This will reverse the surge in imports and help restore the long-term viability of EU steel production. At the same time, the Carbon Border Adjustment Mechanism introduced at the turn of the year is already showing a welcome impact on pricing. On the other hand, the high levels of economic uncertainty that has been depressing the European steel market have persisted. In fact, they have increased again due to the hostilities in the Gulf region and the closure of the Strait of Hormuz.

Additionally, they have resulted in surging energy prices and freight rates. While we are well hedged for 2026 for gas and electricity, those price pressures are pushing down growth projections worldwide. In that context, we have revised our guidance upwards for the year, but not by as much as some of you might have anticipated after such a strong first quarter. And when talking personally to some of you before we adjusted the guidance, I can tell you some of you really challenged me on that.

While we expect profit to be higher than projected at the start of the year, our revenue guidance is unchanged. As disclosed on April 21, we are now guiding for sales of around EUR 9.5 billion and an EBITDA VX of between EUR 625 million and EUR 725 million.

So to conclude, we have made a promising start to the year, and it's pleasing to see all our core business units contributing to our improved performance. EU measures will also bring some relief, but ongoing geopolitical and macroeconomic uncertainties mean our growing optimism must be balanced with a healthy dose of caution.

Thank you for your attention. I'm now looking forward to your questions.

[Operator Instructions].

Boris, your question, please.

Really my questions on the steel production business. We see that order intake shows a plus 7% year-on-year growth. So there seems to be a slight recovery. I would be interested in getting your comments on the drivers, what you see behind this recovery, and whether you continue to see a change in the customer behavior in Europe?

And on the profitability side, it seems like you've been helped by input prices, which shows a EUR 54 per tonne EBITDA in Q1. So how sustainable is that number? And do you see potential upside going into the rest of the fiscal year?

Thank you, Boris, for your questions. So starting with the sales. And we see an overall sales improvement for the total year in steel production as well as for the whole company, of course. And we have already gave that outlook when we talked last time here. And looking at the cost basis, we believe also that this will be continued to be stable. And yes, you're right, we have seen an increased order intake, and that is supporting our projection that sales will be improved compared to last year and is perfectly in line with our guidance that is also above sales of last year.

Okay. And just as a follow-up, when you say this continued to be stable, you mean the costs, so we should see an improvement in the EBITDA per tonne margin over the remainder of the year. That's the right way to put it?

So you are still talking about the segment steel production, Boris, right?

Yes, correct. Yes.

Yes. So we see -- we have had also in steel production, a good result in the first quarter and a lot stronger than the year before. And we see a continued strong performance in the total year and also in each of the quarters.

Okay. So at least this kind of profitability could be extrapolated?

Yes, I see a really good stability.

The next question is from Tristan Gresser, BNP Paribas.

Yes. Just going back to Boris' question on the stability of margin performance for steel production. I mean, steel prices have moved up quite a bit since the start of the year. Your ASP in Q1 were probably not reflected that price increase. So I'm a bit surprised, you said that you would expect some stability. My understanding is that Q2 should see a sharp appreciation in margin with steel pricing being the main driver, but would be keen to hear a bit about the bridge for that division into Q2. You talked about costs, but what about prices and what about volumes? How should we think about it? That would be my first question, and then I have 2 more.

Volume-wise, we have seen the order intake. So that is also giving some positive impacts on the volume side price-wise. If you look at the HRC price levels, and you see where they are right now, like around EUR 700, EUR 710, slightly below EUR 700. So that price level is almost back to the level we have seen during the second quarter of last year. So it's not really exceeding what we have seen last year yet, right? In July -- we had a peak in the second quarter, then we had a dip in July. And then prices have slowly recovered now, not even back to the level that we have seen in the second quarter. So what we see from the price side, it has not yet been developing beyond what we have seen in some months last year. So, so far concerning the prices, yes. And anyway, we are now negotiating, of course, contracts with customers based on the actual price level. And we have included that in our guidance already.

Okay. So you would not expect ASP selling prices to increase into Q2?

We have slight assumptions. To be honest, we do not see a bigger boost. And why is this? Because some of the price impacts coming from expected safeguards and coming from CBAM have already materialized in the prices. How much, we all don't know. However, some of these assumptions are already reflected in the price. We believe that the impacts coming from safeguards, which will apply up from July, will not be right away, because we expect that some stockholding will be provided in order to get prepared for that change. And we have already talked about that earlier. We see an additional impact from safeguards materializing more towards the end of the year, not in the middle of the year. So that is how much I can disclose on our view on price development.

Okay. But just to confirm I understood correctly, the bridge in the guidance into Q2 is stable cost, higher volumes, stable selling prices for the Steel Production division.

You are right, with some slight addition I would like to make. We are having our performance program, and we are targeting EUR 120 million cost savings, and we have materialized, in the first 3 months, already EUR 43 million. So there are still some EUR 80 million to go. And of course, this will have a positive impact on our cost basis. And also to mention, we have a seasonality, of course, always in our revenues, as each and every year, with national holidays and also revision of our machinery. But that is nothing different to what we have seen in the previous years.

Okay. All right. And the second -- well, now it's not the second question, but on Steel Processing, would you expect the division to be positive EBITDA into Q2? I mean you mentioned in the report, the strong increase in plate prices. They've continued to perform well. I know in the report, you also mentioned some higher costs offsetting fully this increase in prices. So keen to understand also a bit the bridge into Q2 and what sorts of cost pressure you've seen for that division, and if that should prevent the division to turn EBITDA positive into Q2?

So we definitely expect some improvement in the margins in the upcoming quarters and also in Q2. Let's see whether we will manage to be positive, yes. I hope we can come up with some nice news when we give our next updates. However, we plan to improve here. The market remains challenging, especially in the precision tube groups, where we have still quite some underutilization.

We are quite nicely booked in Ilsenburg, and we still have capacity when it comes to large diameter tubes and also when it comes to MGB. So in case economy would pick up, we would be able to use more of our capacities. As I said, still quantities not as good as we would like them. So we all this covered in our guidance. But in case economy would pick up even further, we are ready to provide out of the entities that I have just mentioned. Other than that, about prices, we have talked already. That's more or less the picture I can provide to you.

The next question is from Maxime Kogge, ODDO BHF.

Another French analyst asking questions now. So the first one is on HKM. So you obtained the EU antitrust agreement recently for the deal. So what do you still need to do to get to close the deal? Are you still in discussions with thyssenkrupp or Vallourec on some details? And when do you think you can give us a sense of the impact of HKM's integration into your results?

So thank you, Maxime, for raising the HKM questions that I think are of interest to almost everybody on the line. So you're right, we've received the EU antitrust. Okay. So that's fine. And other than that, we are still busy negotiating with our colleagues from thyssenkrupp Steel, and we are quite confident that we will be able to close the deal in the near future. Of course, you may understand, I'm not going to disclose any details on negotiation terms. However, we are really confident that in the upcoming time, there will be a good decision, which will be good for everybody. And after that, we will talk about the impacts on our results and what this means for Salzgitter AG in total.

Okay. Second one is on your recent announcements to dispose of your treasury shares. This had quite a negative impact on the share price when it was announced. Have you, in the meantime, carried out some disposals of treasury shares? And under which time frame do you expect to achieve those sales? Is your objective to go down to 0 of treasury shares? And what would be the expected use of proceeds from that?

Yes. We were also quite surprised by the drop in the share. And why was this? Because as you may have realized that one of our main shareholders has reduced its shares without causing such an impact. So that was kind of a surprise. However, shares have recovered. So no sustainable impact here. And yes, we have started to sell some of our shares. That is why we also went public, because we fell below 10%. And we are not under pressure here. You have seen from our net financial position and from our cash position that there is no pressure here. However, we decided to optimistically use the situation to sell some of our shares. And why is this? Because first, we got the feedback from the market that the liquidity in the share should be increased. And second, it is also contributing to financial stability of the company. Did I answer your question with this?

Yes. And the objective at the end would be to hold 0 of treasury shares, or you could still own some of them at the end of the process?

We are now targeting to move towards 5%. But as I said, not under pressure, no time limit set for that. So really easy going here.

Okay. No, that's clear. And just the last one, I mean, you said previously you didn't expect volumes to increase that much in the coming 2 quarters. So I should infer from that, that reopening the blast furnace #3, the one that is still idled, is still not being considered, right? I mean, this is something that you will perhaps rather envisage at the end of the year?

Maxime, when I talked about we are not expecting too much volume increase, I was in the steel processing area, not so much in steel producing. And about the blast furnace C, the plan is to get that switched on again in autumn somewhere.

In autumn. Okay. That's clear. Okay, just after the new safeguard has kicked in. All right. That's it from my side.

Thank you, Maxime.

The next question is from Bastian Synagowitz, Deutsche Bank.

Just a very quick remark on the pricing assumptions. I'm a little bit surprised. I mean, you say prices are not really above last year. I think they are well above last year, and so are margins. So I think there's a lot of good reasons to be probably a bit more positive here. But just I would probably take that as the usual Salzgitter conservatism. My question though is on cash flow. And I thought that was actually very strong. Now maybe could you please give us a quick refresher on the debt levels which you are now expecting for the end of this year? That's my first one.

Yes, sure. Thank you, Bastian. When we talked last time, I have shown a graph where I showed our investments, and I have also already announced on that graph that we are expecting this EUR 250 million. And luckily, we received them already in the first quarter. So when we talked last time, my view on the liquidity side and on the net financial position was already including the anticipation of the EUR 250 million. And with this, I state that we will be slightly above minus EUR 1 billion towards the end of the year. And looking at our EBITDA guidance, that means we will be max reaching a leverage of 2x.

Okay. All right. And then my next one is on, like, I guess, the use of your balance sheet as well as your assets. So you're now deciding to sell some treasury shares. Obviously, on the other hand, you still have a very sizable stake in Aurubis, which, I mean, has just been hitting another, I guess, record share price level. So how are you basically looking at these 2 options of selling your own shares relative to selling Aurubis shares at a record level? Just keen to get your thoughts here.

So you know that we have an exchangeable bond issued on some of our Aurubis shares, and we are fine with this. And next to that, we are quite pleased, especially looking at Q1 results, to participate in the nice Aurubis margins and EBITDA contributions to our EBITDA.

But has this been an option as well you've been at least considering?

Yes. We are always -- you may very well imagine that we are considering and evaluating all the options constantly that you are also seeing, right? And then we take our decisions. And our decision has been exchangeable bond and selling of own shares.

Okay. All right. And then, maybe staying on the topic of Aurubis and also what it means for your guidance framework, I would say just from, I guess, the capital market side, the last quarter probably illustrated very well why there are probably a lot of good reasons for why Aurubis should probably not be part of your operating guidance. I mean, your operating guidance is really more or less like a playball of metal prices and derivatives with the leverage from Aurubis. So is this something you also consider potentially whether you may change that?

And I guess the other question here is just given the significant volatility from Aurubis, which could obviously like almost change with any move in metal prices, I mean, is this something you have also basically been cushioning for a little bit with maybe haircuts in other parts of your operating guidance just given this is a volatility you can't really control?

First of all, we have not planned for the time being to change how we deal with the contributions from Aurubis. So we have done this for many, many years, the way we do it. And for the time being, we are going to continue that. What we have done, and you have seen that we have now established the EBITDA and EBT VX and taking out the valuation effects from the exchangeable bond. That's very important because that's also fluctuating. You're right, the Aurubis contribution includes 2 elements. The first element is the operational performance and the second element is the performance coming from the precious metal evaluation. And here, we have taken a prudent approach in that way that we do not anticipate any further contributions coming -- positive contributions coming from the precious metal sites in the remaining quarters.

The next question is from Dominic O'Kane from JPMorgan.

I have 3 short questions. So firstly, just again on cash flow. At the Q4 update, you indicated that you were expecting CapEx for 2026 to be around EUR 900 million. The Q1 run rate is quite significantly below that. So again, if you could just maybe talk to us about how you're thinking about CapEx for the full year and the timing of the CapEx spend? And then I have 2 other questions.

Okay. Let's start with this one. Thank you, Dominic. So in the last call, I have shown that we anticipate for this year EUR 875 million of CapEx. And I have already indicated that EUR 250 million of additional funding will have a positive impact on that, meaning reducing that. And that is what we have seen. So first of all, we always have a seasonality in our CapEx spending, which is, like in almost all other companies, more towards the second half of the year. And second big impact, this additional EUR 250 million of funding we have received in the first quarter. And that, of course, had a positive impact on our CapEx spending since it's accounted for in the CapEx. So that's as much as I can say for the CapEx spending. And we have proven, in the last years, that we anyway still look very carefully at each investment we are taking, and taking very mindful decisions on each bigger investment. So, so much on cash flow and CapEx.

Okay. Excellent. And then just 2 other questions. So obviously, your commentary around the Q2 outlook for Steel Production is, I think, relatively conservative. Could you maybe just talk to us about how you're seeing the current customer environment with regards to some of the uncertainties in the Middle East? Are you seeing any kind of slowdown in customer inquiries or orders? Is there any discernible change in customer behavior?

And then my final question is, could we just maybe talk about the Technology business unit. It was a very, very strong quarter. There's certainly been an improvement in the contribution from that division in recent quarters. Do you think that you are able to sustain the type of run rate that you had in Q1 for the rest of 2026? Those are my questions.

Sorry, I didn't catch the last question.

My last question is on the Technology business unit. You obviously had a very strong Q1. Should we think that, that is a sustainable run rate going forward?

Yes, fine. Thank you. So I will start with the sales, and why -- and you're thinking we may be more bold in our guidance. So sales, 2 messages. First of all, we have not seen significant cuts in single customer orders due to the crisis in the Middle East. Second, we have all seen that projections for the economy have been revised downwards, right; for Germany below 0.5%. And to be honest, that is not growth. That is a slight recovery of what -- about what we have lost the years before. So the crisis in the Middle East and tariff discussions from U.S. are pushing on economic expectations, and this means also on all of our customer segments, of course.

Where we really feel the crisis in the Middle East is our international trade. Here, we feel the pressure on volumes, on prices. And here, we feel a real impact. So the customer behavior we have seen so far is more in line with the economic expectations rather than individual expectations.

And about our guidance. Look, as I have said in my intro, we have so much uncertainties from this tariffs now, from the situation in the Middle East, that there is quite some uncertainty about what's going to happen and how this is going to impact our business. So of course, we have taken into account that we somehow have to deal with these uncertainties. And saying that, I personally, at this point in time, do not see any major threats to our guidance.

The Technology result, I can tell that the Technology result in the first quarter has been strong, because we are still very much profiting from the Plasmax orders that we are delivering. We had a bigger Plasmax order, and we are still profiting from that. Other than that, overall, in the total year, especially KHS will have another record year when it comes to sales and we'll have another record year when it comes to profit as well. And we see that we expect all 4 quarters on the profit side being stronger than the quarters we have seen last year. So, so much is how I look at it. And with the first quarter being especially strong and if you look at the seasonality of the Technology segment, you also always see a very strong fourth quarter in almost each year. And we are expecting this to happen also this year.

There are no further analyst questions, but there is a question in the chat asking if there are any one-offs included in the results, especially in the Steel Production division?

If you look at the first quarter, we have had one one-off effect which was not in Steel Production, but which was taking place in the Trade segment. And here, we had reduced restructuring costs following some negotiations, and we had a positive result here of EUR 11 million.

And now we have the next question coming from Krishan.

Slight clarification on the green steel subsidy. So you said you received EUR 250 million, well ahead of your expectations. So can you help us as in how much of the total subsidy you have received? And do you expect to receive any further subsidy like in 2027?

So we have received more than EUR 1 billion of subsidies already, and we are getting EUR 1.3 billion subsidies overall. And the majority we will receive until the end of the remaining -- almost EUR 300 million we will receive until the end of this year, and only a minor portion is to be expected for 2027.

Understand. And then following up on Bastian's questions in terms of giving the operating guidance excluding the Aurubis. So what is the rationale of including Aurubis in your guidance when you are supposed to make an assessment of what Aurubis is going to make when you don't control that business. So have you considered giving the guidance only for the operating businesses, maybe from, say, next year onwards?

You know that Aurubis has been part of our group for many years, and it has always been -- we have a major stake here, and we look at the Aurubis as an integral part of our company. And that is why we have decided to include and to guide also the contributions from Aurubis. Apart from this year, where we have decided to guide an EBT VX and EBITDA VX taking into account -- or taking out the fluctuations we see on the exchangeable bond, our philosophy has always been not to provide EBT and EBITDA adjusted where it's difficult to see what's the result of the overall company. So that's what more or less has been our philosophy and still is.

Was there a follow-up question, Krishan?

Krishan, you're fine or if you have more questions?

No, I'm good. Thanks a lot.

Okay. Cole, it's up to you now.

Just would like a little bit of color on how you're seeing trading and inventory levels for steel in Europe, considering people are buying a little bit more before the quota system comes in. I'm just wondering how you see those inventory levels being managed through the rest of this year?

And then just a housekeeping question. I know you said you're going to be selling treasury shares, and there's no rush to do that. But could you give us how much shares you've sold at the moment just from a share count perspective for the following quarters?

Yes. Cole, thanks for your questions. I will start with your first question concerning inventory levels. We have seen higher imports in the fourth quarter of last year. And our interpretation is that this is a front-loading in line with the CBAM regulations and also already some preparation concerning the import quotas to be reduced mid of the year. So yes, we have seen that taking place. And still, if I talk to my colleagues from the Trade, they still see that happening. So that is why we believe that the impact from the safeguard measures as of July will materialize with the time being.

And concerning the treasury shares, I know and I can understand that this is of high interest to understand how much we have sold in the meantime. However, please be so kind to understand that we are not going to disclose any details here.

Will you just provide a share count number with every quarter then just so we get the correct share count?

We will provide the next information when we come to the 5%, so when like official regulations require us to give more information.

Okay. Understood. And then could I just follow up on HKM. Would you mind just providing, I know you can't give too much at this stage, but rough time lines and process from here when you will give us a more detailed update on HKM?

Yes. I would like to repeat, Cole, what I have said before that we are still in negotiations with the colleague from thyssenkrupp Steel, and that we are confident that in the near future we will be able to come to an agreement, which is good for all sides, and that as soon as this is happening, we will provide the required information.

We have a question in the chat from Jonas Freme, what steel price we assume in our guidance.

First of all, we do not disclose the prices we have in our contracts. And also, you have to understand that in our contracts, the contracts have different time horizons. So some contracts we are doing in steel have a time horizon of 4 weeks or 2 weeks, some have 3 months, some are 6 months, some have 12 months. So giving one single price would also be really of no help. And next to that, we are not disclosing single prices that we have included in our guidance.

Okay. We have all answered the questions from the chat. There are no further questions in the line. If so, please let us know.

At the moment, there are no further questions. So dear ladies and gentlemen, thank you very much for your questions. We are closing the Q&A session now.

Thank you. Have a great day.

Thanks.

Good morning, ladies and gentlemen, and welcome. Thanks for joining our analyst conference for the fiscal year 2025. I'm here with our CEO, Gunnar Groebler; our CFO, Birgit Potrafki, who will run you through the presentation. And afterwards, and as always, you've got the opportunity to ask questions.

And with that, I'd like to hand over to you, Gunnar.

Thank you very much, Markus. Good morning from my side. Welcome to the analyst conference for the full year 2025. Certainly, we also will touch upon '26 and how we look upon that. We have underlined the headline with back and black because that is what basically describes 2025. We have had a difficult market environment, continuously difficult market environment, perhaps even slightly worse than 2024. However, we have focused on our internal resilience. We have done our homework, and this is what we're going to show to you now through this conference, how we have been able to improve our internal performance and resilience to get to this statement back in black.

First of all, I would like to start with a number that went down, which is good. And that's our LTF, the long-term injury frequency. We have broken the trend of '23, '24 where we had a slight uptick. We're below 7 again and certainly not at the end of our journey here, a clear strategy, as you can see on the bottom of the page that we follow, starting from leadership and accountability of each and everybody in the company all the way to suppliers and contractors, how we include them into our health and safety work and take a very holistic approach. So first signal and first message on that element of health and safety. We're also back online and in the trend that we need. For sure, much more that is needed and much more to come. But again, trend is broken back on track.

We are looking at a time of a lot of uncertainty and where I think everybody is very concerned about what's going to happen within the next 24 hours. We have done a first assessment on what the impact is. And on the negative side, of course, the uncertainty that you have in the total economy is not good for investments, is not helping a fundamental uptick that we have seen in the markets for steel. So the longer this conflict takes, the more pressure we're certainly going to see on the global economy, including Europe, even though Europe might not be so much impacted as other regions like Asia. Still, we're going to observe that also in Europe.

Cost increase is already something that we see. Everybody sees once you get to the gas station. Of course, we see it as well. Freight rates for bulk cargo has gone up, so -- which is important for our iron ore and coal transports, even though more than 50% of our iron ore comes from Europe, still, there's a cost effect that we see. Same thing on the outbound logistics, trucks going to our customers. Certainly, something we're going to have to discuss, and we started that dialogue to have to discuss with our customers because it's pretty clear that the steel industry cannot carry those costs all alone. We will have to find common ground and common solutions here. The longer it takes, we're going to see certainly also more macro trends and macro influence on inflation, but also on the monetary policy globally. So that certainly will also affect us.

On the positive side, though, we have a euro single market that is functioning. We have an underlying stable demand coming out of Europe. And given that Europe is our core home turf in terms of customers, that's certainly something that will help us through the next period. And on top of that, as I said, other regions are hit potentially harder than Europe is when it comes to energy demand and energy cost. Those importers into Europe certainly will also have a different cost base, so higher prices for imports and higher level of uncertainty also given the distortions we see on logistical chains all over right now.

Last but not least, you have the picture of the Persian Gulf there. Most of the DRI projects that are ongoing right now are located in the Persian Gulf. So they are long term also hit by any sort of distortion that we're going to see on the Strait of Hormuz. So with our DRI on site here in Salzgitter, we have de-risked in that aspect, our future steel production.

And de-risking is perhaps also the wording that we're going to use when we're talking about strategy. We have been following through with our strategy also in 2025 and further de-risk the company, both internally, but also, as said, through the shift from CO2-intensive energy carriers to low CO2 steel production also de-risked from that geostrategic angle. So on the performance side, and Birgit will go through the details later in your presentation, Birgit, we have been able to do restructurings where necessary, mentioning trading here where we went through a deep restructuring in the European trading business, cutting product lines, cutting sort of customer groups, cutting jobs, ultimately also people, but bringing trading back to black already in 2025. So a successful restructuring that we have done there.

Same goes for steel processing and Mannesmann precision tubes. We did close our site in Helmond. We halved our size in a site in Mexico. So also here going through restructuring to adjust to market conditions as we see them also going forward.

P28 performance, our performance program has exceeded our ambition and Birgit will talk you through that in detail. And we have also managed to continue our portfolio management efforts. We have sold our shoe machinery factory, DESMA in 2025, and we are continuing to review the portfolio, but not only in divestments, but also in acquisitions. Latest example here is the acquisition of Thyrolf & Uhle prepared in 2025 and then executed early '26, which enables us to get a stronger foothold on the defense side. I will walk you through that in a sec.

Transformation, of course, is a lot around SALCOS Phase 1. Just to be very clear, there's no intention whatsoever to postpone SALCOS Phase 1. We're going to go live with that summer next year. So that is well underway. We are well advanced when it comes to construction. We are now sort of bringing more and more equipment into all the buildings that have been built. And we are also in a transition phase from a pure construction site into also the market phase where next to the construction, we also intensify the dialogue with the customers, and they intensify the dialogue with us to then get to sign contracts on green steel.

You might recall that we had first projects already in 2025 using our site in Peine for the slabs. So we have proven that Salzgitter can deliver green steel and can deliver green steel products. And now we're in the discussions to sort of further -- take it one step further with ramping up SALCOS then on site here.

What helped clearly is that we got the less certification. The low-emission steel standard is established as a European standard by now, and we have gotten certificates not only for Salzgitter and Peine, but also for downstream activities like Ilsenburg and Mühlheim. So that's also well underway.

And last but not least, it's not only our transition and our transformation, it's also supporting transformation outside, supporting transformation, especially on the energy side. We're delivering pipes for the hydrogen backbone, both in Germany, but also in Europe. So also here, we are supporting that transformation in other parts of the European industry as well.

Customer focus has been a core element of the strategy and remains a core element of the strategy. Let me start with defense. We have, as said, acquired Thyrolf & Uhle together with our company, Universal Eisen Stahl. They joined forces now to be able not only to deliver plate steel to our customers, but also already components so that for system aggregator, we can actually be and we are very well -- a very good sort of supplier. And this move has been highly appreciated by our customers that we are really sort of further integrating capacity on the construction side as well as delivering pure plate as we do from Ilsenburg.

Infrastructure. You all know the infrastructure package that the German government has put forward. We expect that now to hit the road second half of '26, but then full value in '27. And energy projects I mentioned already with the hydrogen backbone and other projects around the globe that we can serve with pipelines and other material.

Last but not least, let me have a short look also on our technology business. KHS has again performed very, very well and especially with the product Plasmax. We are well underway with a large contract that the company signed last year and also implementing that in other parts of the world.

So KHS has a strong foothold and really a good performance in '25 and good order intake that carries us through 2026. So pursuing our vision, it's a clear strategy, and we are sticking to the strategy, and it shows that even in turbulent times like we have it now, this strategy is resilient and helps us to really navigate through and prioritize where the focus should be. And I think we have delivered on that in '25 and continue in '26.

Looking at SALCOS. As said, we are preparing for commissioning. It is working as planned. You see the picture of the direct reduction facility at the final height of 140 meters. You can see it from outside the site far away. It's a new skyline that we have created here in Salzgitter. Electric arc furnace construction is well underway, so is the electrolyzer. I think we're going to move in the stacks now in Q2. So also here well on time and in full swing. So that leaves us confident to really have a commissioning over summer 2027, first half of '27. And then be able to deliver green steel to the market and be the first transformed integrated steel mill in Europe that will actually go that step at that scale.

What helps is the modularity that we have with SALCOS, so we can adapt to the current situation, both from a customer side, from the financing perspective, but also from the regulatory perspective and the market. And we have taken a decision in '25 to postpone SALCOS Phase 2 to '28, '29. And we will then look into that constantly when is the right moment in time, when do we feel sufficiently comfortable and confident that the next electric arc furnace in Salzgitter will hit the market at a good time. Without a doubt, we will build the second electric arc furnace on site. So we will go all the way when it comes to the transformation. Just the point in time is something that where we have flexibility through the modular approach, and we will use that, of course.

Then also coming back to SALCOS Phase 1, important to note, we have been successful in 2025 to negotiate both with our colleagues in Berlin, but also with the Federal State of Lower Saxony and the colleagues in Brussels to get the last tranche of the funding, another EUR 322 million that have been approved so that we're now looking at a total funding of EUR 1.3 billion for SALCOS, so coming from EUR 1 billion to EUR 1.3 billion to EUR 2 billion, which certainly supports the overall project. Also, as some of you have already mentioned to us, the cost increase that we have seen on SALCOS from roughly EUR 2.5 billion. That's how we said it to now EUR 2.7 billion. We are closing the end of construction. Hence, we are getting a bit more sharp, but that is certainly what we see. And hence, the additional funding exceeds the additional cost. So it's a positive impact on the project as such.

We get a lot of questions on HKM as the second steel mill that we operate for slabs. We have taken a decision to take responsibility for HKM and have made an offer to thyssenkrupp Steel and Vallourec to buy their shares and then take full ownership of HKM and transform HKM into a electric arc furnace steel mill as of 2029, 2030. Why do we do that? Because there's an industrial logic for us. There's an industrial logic from an integrated value chain, including HKM, which already today delivers material into Salzgitter. There's a clear security aspect when it comes to feedstock for defense products. And there are, of course, synergies between the 2 units, not only in decarbonization, but also beyond. But certainly in decarbonization, we're talking 2 new electric arc furnaces, we certainly can learn from each other there and create synergies.

And last but not least, and we shouldn't forget that, HKM will be the only steel mill in Europe that is able to provide slabs to the European market, especially once the Russian slabs are pushed out through the sanctions, which will happen in '28. There's certainly a market demand for slabs. And here, HKM as the sole steel mill in Europe that can deliver that is well positioned.

Financing of that transformation will happen through the internal resources through the transaction proceeds that we're going to get and through public subsidies. HKM has been able to secure EUR 200 million in public grant. So that's already signed and sealed, and that would certainly then also support the financial attractiveness of that deal. And we estimate that this deal will be closed by summer this year. So also here, speed is of essence, and we are in full swing together with the current co-shareholders to get that deal done.

I talked about defense. We made a great step forward in 2025 to get all the permits from especially the German military services, but as well as from some of the suppliers to the military. Good feedback when it comes to the secure material. Good feedback both from the defense industry, but also from the German military on the quality, on the protection features that we have with that steel. So that's good. We are looking at applications beyond military also in the civil defense like the Technisches Hilfswerk, German civil defense unit as well as Red Cross, UN, et cetera. So we are broadening our perspective here, but clearly, with a strong focus on getting ourselves more known and the product more known in the defense sector. That's what happened in '25.

As said, we extend the value chain, and we use '26 now to really get into that market, get first deliveries out, prove our quality and then ramp up from there for the years '27, '28 and years to come. So also here, a good step forward to create that market for us and create the product and the visibility of Salzgitter in that market environment.

Looking at the overall market environment, while, geopolitical that is sort of very acute right now with all the happenings in Iran, certainly something that we need to -- all of us need to follow and monitor closely. However, growth rates that we see underlying, especially in Europe, remain stable. So we will have a look at how long that war will take. That will certainly have an impact. But overall, we see a certain growth rate globally, but then also on the European side.

Germany recovers -- sorry, at least parts of the industrial sector and the construction sector, we see a pickup on the construction side, which helps our unit in Peine, but also in the plate business, especially vis-à-vis yellow goods. So with now winter being finally over, we certainly see a pickup there, mild recovery through the year. And then through the fiscal stimulus package, certainly something that we're going to see with more enthusiasm through '27, '28 but first elements of the second half of this year already, as we have said before.

Yes, European steel, I talked about. Let me perhaps look at regulatory framework in Europe. Carbon board adjustment mechanism has been implemented as of first of first. I think it was a success in '25 to get that through and get that implemented. We know it's not perfect. We absolutely know it's not perfect, and EU Commission also knows it's not perfect. So the amendments are out to improve the regulation, and we expect this to be implemented this year so that we get a carbon board adjustment mechanism that is even more robust and more perfect than what we see right now.

On the trade defense instrument, EU Commission has made a strong proposal in autumn last year, has been embraced by the parliament, the European Parliament and by most member states. The trialogue is ongoing, and we expect no further delay of that trade defense instrument to come into force 1st of July this year. And we already see this also on market -- steel price market, and I will get to that in a second.

Looking at CO2, of course, the whole debate around the ETS system has put the upward trend to a halt and CO2 has dropped. Still, we are above levels of 2025 if you look at it. However, I would say, a normal reaction in all the public debate around ETS. What I think is important is that none of those who are discussing the ETS reform right now questions the ETS system as such. I think it's fair to say that you need to adapt the system to the current environment that we have. And that's exactly the purpose of that long planned reform in summer '26. But none of the decision-makers nor those that are lobbying right now is question the ETS system as such, which I think is very important because it is a market-based system for CO2 and certainly something that works. It has at least proven that it works over the last 25 years.

Looking at other prices, be it raw materials and energy. Looking at energy, of course, you see the uptick given the Iran war. How do we look upon it when we're talking natural gas, more than 50% of our capacity has been hedged for '26. So we're, in that respect, not fully exposed to the gas price development. But we are, of course, closely monitoring and looking into how we can internally react to that.

Electricity, same pattern. However, here, we are even more hedged. You remember that we have a strategy in which we go for CO2-free electricity PPAs. And those PPAs, of course, are a good hedge now for us with that electricity price development.

Looking at the raw materials, iron ore spike is due to bunker oil price increase, hence, logistic costs that we see through the closure of the Strait of Hormuz. Coking coal, the decline comes from weather effects that we had, especially in Australia with strong rain pushed up prices. Those rains are gone now, hence, prices came down. Certainly, we're also going to see some effects on bunker oil here on the coal side as well, perhaps not that much then with iron ore, but certainly, we're going to see certain effects there as well.

Now with those, look at the steel prices. Steel price has picked up. Now I'm looking at the left side, blue line, hot-rolled coil. Since summer last year, we have seen a constant pickup in prices. We're north of 700 now, which is -- which we haven't seen since '24 -- early '24, which is really good. Other prices like plate and sections are following that trend, not as explicit but are following sections. I expect more price development now that construction kicks in, in Q2, Q3, regular seasonal pattern that we should see there as well. On the international side, the spread is widening. U.S. sees the price increase due to the tax regime that we have there. China, low internal demand, hence, lower prices and Europe is well positioned here in the middle.

How does that translate into key figures? Birgit, you will dive into the financial figures quite intensively as it is your role. So let me perhaps focus on some of the numbers that are less financial. Crude steel production went down year-on-year '24 to '25, which is predominantly due to us taking blast furnace C in Salzgitter out of operation. And then, of course, a couple of adjustments due to lower markets. Hence, also sales went down. Birgit will guide you through that. With lower production, you also, of course, have lower Scope 1 CO2 emissions also went down. And the decline in workforce is predominantly due to deconsolidation of Mannesmann Stainless tube in 2025, some countering effects, especially on the steel production side to ramp up the team that will handle the parallel operation of blast furnace and electric arc furnace. That's what you see in the core workforce numbers.

Short shot on the business units. Let me start on the right-hand side, technology. Again, a very strong year, record year for KHS, third record year in a row. So KHS is really, really performing well. And even though sales have been slightly below '24, but still a very strong development, very happy with the development of KHS and of course, also with the development of Aurubis, which you don't see on that slide, but still worth to mention because those 2 certainly have carried us through the year 2025.

Trading, positive, as said, restructuring has turned out very positively, positive numbers there. Steel processing, steel production, both negative. However, especially on the steel processing side, you see good development. On the results side, given the restructuring that we have seen there, given a strong focus on performance. So that's what you see here in the numbers. Steel production, yes, basically on the same level as 2024. But given the reduced sales, I think it also shows that restructuring or the performance measures have gotten some result effect here as well.

Let me close with the dividend proposal. We are proposing and have discussed that with the Supervisory Board a constant dividend vis-à-vis '24, EUR 0.2 per share. This underlines the investment activity that we still have with SALCOS. So cautious on the dividend. It underlines also the headwinds that we had in the market in '25 and that we continue to have also in '26. So prudent also on our end here. But it also underlines the stability that we owe our shareholders in terms of dividends. So we believe this is a fair representation of their contribution to Salzgitter. Hence, this is what we're going to propose to the shareholders then in the summer.

With that, I'd like to hand over to you, Birgit. Thank you and let you guide through the financials. Thank you.

Thank you, Gunnar. Yes, thank you, Gunnar. A warm welcome also from me to you out there. Happy to have you today. And before I go to the detailed figures, please allow me to reflect on 2025 and also to give you a slight outlook on what is to be expected for 2026 at a glance here.

So 2025, Gunnar has mentioned it, was still a challenging year for us, especially in the steel segments where the wind of the economy of the not recovering economy was still blowing very strong into our faces, especially in the trade segment, but also in steel producing and processing. We were burdened by prices and in trading also by volumes. You have said it, Aurubis and technology have performed nicely and flattened nicely the challenges we have faced in steel.

So for us, last year was a year of organizing financial stability. And how have we done this? Number one, we have concentrated on our performance program, and we have managed to exceed our self-set targets of almost EUR 100 million by 33%. And thanks, Gunnar, you have mentioned it. You left it to announce the exact figure by me. And I'm quite happy and proud of that because this is something that a lot of people in our company organize by constantly and every day working on the measures that are behind this program.

We also, Gunnar has mentioned this, have focused on continuing our restructuring activities with focus in the trading segment, steel trading segment. And here, despite the strong headwind we have faced, we have managed to be positive. Gunnar has just shown the figures here. And we issued an exchangeable bond in order to safeguard our financial basis. And also, we focused on cash measures. Also when spending money for our investments, there was a very strict discipline. And all of this paid in into our net financial position, which stayed below minus EUR 1 billion. And with this, a lot stronger than what we had forecasted over the course of last year. So we have focused on cost. We have focused on financial stabilization and on restructuring. And all of this plays a nice stable financial basis, and I will show you this in the figures as well.

And what is going to happen now in 2026? Headwinds are going to continue. We see some slight improvement. Gunnar has mentioned the prices. Gunnar has mentioned the EU measures. However, the German economy is not yet flourishing. And actually, we do not expect a sudden pickup here. And we also will see that we had some nice positive onetime effects in the trading unit last year, which we will not see again this year. This will also have an impact. We will still be positive, however, not as positive as driven by the onetime effects.

We do anticipate, as Gunnar has laid out in detail that the measures as well from the EU as well as from the German government will be effective. However, we expect to see some effects this year and to see the full potential of the effects rather starting from 2027 onwards.

So we see a positive momentum building in '26 to be continued in 2027. We are back to black already with our adjusted EBT with a slight positive number of plus 2, and we will be back to a stronger black even in this year as we have guided. So -- and of course, in addition, we will also continue to focus on our own homework, which is the cost improvement measures, which is restructuring and which is also shaping our portfolio in order to be fit for the future.

Looking now at the numbers, we see here that our sales, left upper side, came out at almost EUR 9 billion, which is EUR 1 billion below the year before. And when I come to the income statement, I will give you some more details where the minus EUR 1 billion went more or less. We see -- if we look at our adjusted EBT and EBITDA figures, we see that, of course, that the EBITDA was slightly reduced compared to 1 year before, and this is also due to the reduction in the sales revenues. And we see the adjusted EBT of breakeven of a slightly positive plus 2% here.

And the EBITDA VX and the EBT VX stands for valuation and stands for exchangeable bond shows the figures without the valuation effects coming from our exchangeable bond because this impact would not show the real performance of our company. That is why we decided up from 2026 to report adjusted figures here. And right to these figures, you see the EBITDA and the EBT including the valuation effect of the exchangeable bond, which was minus EUR 30 million by the end of last year.

Very strong last year, upper right figure, our business cash flow or gross operating cash flow. You see here slightly above EUR 0.5 billion. That is one of the most important figures to us in these challenging times, and you see that we could even manage to improve it by almost EUR 100 million compared to the year before.

And our net financial position came out at minus EUR 954 million, so below minus EUR 1 billion. Of course, it's negative. However, if you may recap, when we discussed this figure over the course of the last year, we were starting with expecting EUR 1.7 billion, then cut down to EUR 1.5 billion. And in the fourth quarter, we discussed EUR 1.1, and we even managed to be below the minus 1. And some smaller contribution were also coming from the working capital side here.

Looking at our income statement, you see here on the left side, our sales revenues of around EUR 9 billion. And before I come to the deviation to previous year, allow me to quickly guide you through the major elements of our profit and loss here of our income statement. And you see that we have 3 main drivers that are deciding about our results. First, our material costs, which were around EUR 5.8 billion last year, followed by personnel expenses of EUR 1.9 billion and then by other operating expenses of minus EUR 1.5 billion. And here, you also see the effect of the valuation of the exchangeable bond of minus EUR 30 million that is included here.

Our contributions from our equity companies is stable, slightly above EUR 180 million. You see a negative impact from financing results and all this leading to an adjusted EBT of plus EUR 2 million, including the valuation of the bond of minus EUR 28 million. Then we have taxes of EUR 42 million and a result after tax of minus EUR 70 million.

And if you look now at the boxes on the bottom of the slide, you see the deviations compared to last year. And here, I would like to mention the most significant ones. First, sales, down by EUR 1 billion. What were the major impacts? Major impact first was the deconsolidation of the Mannesmann Stainless group, which was not in our figures '25, but still in '24. We have seen quite some turnover reduction in the steel segments, in all steel segments, especially in trade and mainly driven by price impacts, as Gunnar has shown the price developments and in the trade segment as well by volume impacts.

And if we look at our material expenses, we see that our material expenses were a lot better than 1 year before and could even overcompensate the reduction in sales. And Gunnar has shown the development of the material prices starting beginning of '24 and coming down over the course of the year and even in '25. So this had really some very supportive impact here.

Personnel expenses also slightly reduced due to also MST deconsolidation and as well as restructuring activities from the Trade segment. Depreciation was burdened in 2024 by impairments in the MPT Group and HKM and some minor other impacts, which accounted for the most part of the difference compared to the year before of the EUR 300 million that you see here. You see in other operating expenses, a delta of minus EUR 119 million. Here, we have 2 impacts. We have the effect of the exchangeable bond worth EUR 30 million, and we have foreign exchange impacts here as well. And you see the counter position in other operating income where we have benefits from foreign exchange effects.

And you see from our financing activities, we even performed better, EUR 31 million than 1 year before. And all of this comes together in an improvement of EUR 298 million, so almost EUR 300 million compared to 1 year before if we look at the adjusted EBT.

If we have a look at our balance sheet, we see a lot of stability in our balance sheet. The total assets are stable, slightly above EUR 10.4 billion in both years, '25 and '24. We see a slight increase in our noncurrent assets due to mainly our spendings in SALCOS. We see a decrease in inventories due to prices and also due to working capital management, and we see a stability in the other 2 positions here.

If we look at the equity and liability side, we also see stability. We see an equity ratio which is constantly slightly above 42%. We see reduced pensions due to a higher interest rate, and we see some movements in our liabilities. Current liabilities have been decreased because we shifted some of our current liabilities to the noncurrent liabilities. And you also see an increase in the noncurrent liabilities due to our exchangeable bond worth EUR 500 million, which is reflected here.

Coming to our cash flow statement. On the left side, you see our operating cash flow contributions from each quarter 2024 and next to that, 2025, and you recognize the EUR 505 million 2025 that I had mentioned before. And we can see mainly two things. First, in 2025, in the first 3 quarters, we performed a lot better than the year before. And you see that in the fourth quarter of 2024, there is quite a huge contribution that was coming from the working capital, mainly revaluation of inventories and accounts payable that we had in line with our SALCOS spendings.

And if you look to the right side on our cash flow statement, you again can see a lot of stability. We started the year with EUR 1 billion of cash and cash equivalents, and we ended the year with slightly above EUR 1 billion. And our cash flow for investments that we needed, almost EUR 700 million was financed on one side by our operating cash flow and on the other side, out of our cash flow from financing activities.

Coming to investments. You have now just seen slightly above EUR 700 million. If we look only at the CapEx block out of this, you see here for 2025, EUR 528 million. And I can tell you that 2025 was actually a peak spending year concerning SALCOS. And it was also at peak year concerning inflow of fundings. That is why the net number is not as strong as the year before. But in 2025, we received fundings for the year '25 and also some fundings that were related to the investments in 2024.

I have mentioned a disciplined spending in our entities, and you can also see this here in our CapEx spendings, which are not SALCOS. And you see the EUR 299 million here are quite significantly below the 2 years before.

So what are we going to expect in 2026 now? You see a number slightly below minus EUR 900 million, approaching a similar level compared to 2024. However, Gunnar has mentioned the nice additional funding we are going to receive with EUR 322 million. And the cash inflow portion of that, we are expecting EUR 250 million this year. And this will bring down the figure of 2026 to slightly above EUR 600 million, and then the difference to '25 is around EUR 100 million.

Now I come to a topic that's really close to my heart, I have to say, because so many people are working on this and are so diligently doing this, and it's so fair that they also can harvest this nice success. You see the target on the right side, EUR 97 million, and you see next to that what we actually achieved, EUR 129 million. And within this figure, EUR 110 million have a sustainable effect will constantly bring down the cost basis. And this is an overachievement of 32%, what a figure.

If you look at the year before on the left side of the graph, you see that we managed in '24 to organize EUR 65 million of contribution. And you see that '25 number is double of the number of '24. So we doubled the cost contributions from 1 year to the other. And you see that the biggest portions are organized in the segments where we were negative last year, so in steel producing and steel processing. You may wonder why trade is such an overseeable number, and this is due to the fact that restructuring activities are not part of our performance program. So these contributions from restructuring activities are coming on top of the amounts that you can see here.

If we look at the contribution of the performance program by year, on the left side, you can see in the middle, again, the EUR 129 million. And on the left side of that, you see what we have organized the 2 years before. And let me remind you that we had an original program, which was targeting EUR 250 million, and we doubled that to EUR 500 million. And the EUR 250 million of the original program has already been organized by the end of last year. And this makes us confident that we can also manage to organize the remaining portion. And the target for this year is EUR 122 million.

And you see on the right side, not only have we doubled our ambition, we have further increased it up to EUR 575 million because we need it in some entities. And the best part is that not we as a Board did that, that the entities themselves did that. And you see here how the distribution is. The major contribution comes from steel processing with 60% and 20% from no, from steel producing -- excuse me, 60% from steel producing, 20% from steel processing.

Just I have listed some examples here because there's always the question raised, what exactly are you doing? How are you organizing? Let me just pick 2 examples here. Purchasing in our Peine entity, we have reorganized the material mix that we put in our electric arc furnace. And we have replaced part of the scrap components by other iron ore bearing materials with a positive impact on material cost and logistics.

Logistics has so many impacts, if you care about that. We have broad transports from trucks on rail. We have shortened transports. We have combined transports. And this has positive impacts on not only cost, but also on the time transports take and, of course, also on CO2.

Outlook for 2026, Gunnar has mentioned so much. I'm just going to run over the headlines here. The steel market is expected to recover slightly compared to the year before. We see positive production trend also for the German mechanical engineering sector and of course, impulses from regulatory and government demand. And all this led us to our guidance that we have issued already quite some time ago. Sales of EUR 9.5 billion, adjusted EBITDA VX between EUR 500 million and EUR 600 million, a pretax result VX between EUR 75 million and EUR 175 million. So really be back to black compared to 2 years ago and even stronger than last year and the return on capital employed marginally above the year before.

Outlook for the business units. Gunnar has shown that all business units and segments have suffered in sales in 2025, and we are expecting increased sales in all segments this year. We expect technology, Gunnar has talked about that to remain strong, to contribute further. We also expect Aurubis to remain strong to contribute further. And in addition, we expect, especially in steel producing and steel processing to have also significant higher EBT compared to 2025. We even expect in the steel production area to be also back to black.

So now let's come to the conclusion before we come to your questions. I will share the conclusions with Gunnar. I will start and then hand over to him. Let me quickly summarize. We managed to stabilize our earnings as forecasted. And P28 in our performance program, we exceeded our target by 33% and doubled our contribution compared to the year before. We focused to restructure and advanced here. We managed to diversity our liquidity and lay a stable foundation here. And we are cautiously optimistic for 2026 and see a stronger upward trend from 2027.

And with this, back to you, Gunnar.

Thank you very much, Birgit. And let me then conclude. So what you've seen is a lot of focus on stability and creating stability and creating resilience in our company on our way of that transformation. And it is just following through with our strategy. It's following through with improving the company's resilience going forward. The funding, the SALCOS funding, additional funding is certainly of great help for us. And you mentioned sort of how this will affect our net financial position.

I talked you through HKM. I think we have a good case going forward. There's a lot of work to be done, no ifs and buts about that. But we have a clear plan. We have a clear commitment also from the management team of HKM, and we are very confident that we, a, will be able to take over HKM this year and then also run through the decarbonization program, the transformational program for HKM, reducing capacity, reducing workforce, making this a slim and agile steel mill going forward.

Technology, we talked about, is strong, remains strong, has a good perspective also from a market view going forward. And yes, we're going to need continuous support from the regulatory environments, carbon board adjustment mechanism. Safeguards are addressed. The ETS now is under review, as we talked you through. And we will certainly also constantly remind the German government that energy prices in Germany are structurally higher and too high. So that's certainly something that we are also going to continue to work on in '26 and beyond. With that, I think we have, as said, a resilient company going forward that is able to support German's economy, German's industry, also securing a resilient year '26 for those with us as a systematically and systemically important foundation for Europe's industry, and we're happy to be part of that, happy to contribute to that and happy to support.

And now we now are thank you very much for your attention and ask for your questions. Thank you.

Right. There are already some hands raised. So let's start with Andy Jones, please.

I just had a few questions. Firstly, just on Ilsenburg with the contribution you expect from the defense steel. I mean, how -- what are we talking about in terms of tonnes? Can you compare the average margin on some of these defense applications compared to standard steel grades? That's the first one.

And then secondly, could you try and quantify potentially what the impact of higher energy costs and freight costs could be on your business? I mean if we just take where spot is today, can you give us as a ballpark for the annualized impact you expect on your financials?

Yes, happy to. Thanks, Andrew. So when it comes to defense contribution is certainly not that much on the volume side, right? I made that comparison in some other occasions that the volume coming through defense will certainly not compensate for the volume loss that we have seen on the automotive sector since 2018. So volume-wise, this is a different ball game. It will remain a niche market when it comes to volumes. However, of course, price levels, margins, et cetera, are much more attractive in this area. And this is also why we have, focused on defense and have broadened our spectrum there and are in that market and will also remain in that market. So that's -- I think that if I got it right, the first question, right?

Or put any numbers around it?

So what we have said is that we're going to see sales-wise, roughly single-digit percentage in sales coming from the defense market within the next 2, 3 years. So we are still in a ramp-up phase. We're still sort of in getting all the permits, both from the military, but also from some of the suppliers to the military. So '26 is a transitional year, but then I think we can get to a mid- to high single-digit number when it comes to overall sales.

So your second question, impact on energy prices with the current situation we're having in Iran. As I told you, sort of the hedging level that we have on the gas side is north of 50%. So that also already reduces it. Our assessment so far with current knowledge is that the impact will be between EUR 10 million and EUR 15 million on an EBT level. So relatively modest because also on the oil side, there is not that much impact on us. As said, electricity is what we are focusing mainly on. And here, we are well hedged. So it's a limited impact as we see it today.

And does that include freight?

Sorry, you couldn't...

I mentioned freight as well.

Yes, of course. As I think both of us said, there is an impact on freight rates. That is something we're seeing already and something we're discussing with the customers already. So we have initiated discussions with the customers because as I said, it's pretty unlikely that we can carry those cost increases all ourselves. There will be -- they will have to find agreements, but that's too early to sell. That's really -- that hasn't really sort of come to any conclusion yet, but there will be a burden sharing across the value chain, I believe.

The next question comes from Zurich from Bastian.

Can you hear me?

Yes.

I've got a couple. Maybe starting off with your outlook for the trading unit. We expect a drop in an environment despite prices having gone up significantly already. And at least from looking at your outlook statement for steel production and processing, you don't seem to be disagreeing with that. I guess this would be really the first time that trading losses correlation to the steel cycle. And even if we consider this EUR 8 million provision release, which we had last year, I guess the bar for an improvement should sit pretty low.

Now have you started the year with a lower-than-usual inventory position? Or is it just you being conservative? Maybe you can just help us why your guidance in trading does not really sound a bit more optimistic? That's my first one.

Yes. Look, when it comes to the outlook for trading, yes, we have been more on the cautious side also because we see clearly that on the international trading -- in the international trading sort of volumes have dropped significantly. There's a lot of uncertainty in the market right now. Hence, there's low volumes on the international trading. So we have been very cautious on that. And we shouldn't forget that we are not fully through with the restructuring of trading. So there is still some work to be done, and that's then also reflected in here.

When it comes to inventory, I think we have been -- but correct me if I'm wrong, relatively on at par level when it comes to '26.

Yes. What we expect in the industry is that before the safeguard measures will be -- how to say, will be put into place, the stronger safeguard measures, we expect that some will be building stock up in order to avoid to be affected right away from 1st of July. And this is also seen by our trading segment, and this is also what makes them cautious, yes.

Yes. We've seen a similar effect on CBAM as well, right, in Q4. I think we discussed it at some point that sort of there the market is reacting to those regulatory measures. And that's what we take into account.

Okay. Okay. Fair enough. Then my second question is maybe already on the first quarter, which is pretty much done. So could you please give us a little bit of early color on how the quarter has gone so far, how your order book shapes up for the second quarter and also whether you've seen any changes in client behavior just in the last 2 weeks in particular?

No, we haven't seen any changes in client behavior yet. So, so far, things have developed as planned. And I think it's fair to say that the first quarter has been as expected, so better than what we have seen last year. Of course, we had a pretty strong winter. We shouldn't forget that, which had effects on our delivery to customers and had effect on logistics, but it seems like we are able to catch up then in March on that end. So sales-wise, slightly below. But overall, I think also the additional cost measures, P28 is continuing, et cetera, are also delivering on that target. I don't know, do you want to add?

No, that's fine. That's fine. That's fine. But yes, the year start was as we had expected it and is carrying our guidance, especially for the EBT guidance.

Okay. Great. And then lastly, on the ETS reform. What is your expectation on how the system may be amended? Could we see a slower phaseout in free allocations? And what do you see as the most likely outcome?

Yes. Well, I think what has been discussed now also from Lafondnder line is to look at the market reserve and postpone sort of the market reserve there and through that, give a bit of release and pressure on CO2 prices. On top of that, but that's basically sort of an ad hoc measure, right? It's not the reform of the ETS.

I think it's going to be important to understand because you have a couple of building blocks of this ETS system, what you want to work with. One discussion is, of course, the slower phaseout of the free allocation. One is to review benchmark the benchmark process. So that's in the air right now, too early to -- at least for me, too early to have a firm view on that.

What is important, though, is that whoever we talk to, whoever we listen to, it's pretty clear that everybody has understood that whatever we do on the ETS should not harm those that have already done their investments. So this first-mover disadvantage is something that people are very well aware of and that should be -- in all cases, should be avoided in any type of reform.

Next question is from Cole.

I'd just like to follow up a little bit on your supply chain. And we've seen across various industries challenges getting certain raw materials. And I'm just wondering if is there anything that we should be thinking about? You've been quite clear on electricity and gas hedges, but are there any products or items available in your supply chain that give you pause for concern? And on your sales side, I know you mentioned there's been no change to client behaviors yet, but do you expect to see an increase in procurement from your customers just as they build up safety stocks in a longer supply chain?

Well, first of all, we have done a quick risk assessment on the supply chain. Is there anything that is at risk here? We haven't identified something that is absolutely at risk. We talked about energy, raw material. Rest coal is unaffected right now by the war in Iran next to bulk oil, as said, but unaffected otherwise. And on the iron ore side, as I mentioned, we're roughly 50% of our iron ore comes from EU. Hence, also here the risk is absolutely low.

Next to that, we haven't -- again, haven't seen any major threats when it comes to logistics. That actually also goes for SALCOS. It's not that we see any material that gets stuck somewhere and we would stop our construction process. So when it comes to sales, yes, as said, the expectation is there or the -- so far, we haven't seen any changes in the behavior of our customers. Of course, we are in discussions with those, what does a prolonged war in Iran means to them and how do they react?

What I can envisage is that some of the customers that are also focusing on imports from outside Europe for their material, for their steel might actually turn to more a European value chain in order to reduce uncertainty and also given that other producer outside Europe are much more dependent on oil and gas coming from the Persian Gulf, hence, are hit more than we are with the cost increase, which then also will increase their cost of production and make the import less attractive than it has been perhaps in the past years. So we might see a shift call when it comes to behavior and pattern for sales from our customers or from -- yes, the buying pattern from our customers. But again, it's too early to say right now. We don't see those changes yet.

That's helpful. And then maybe just following up on HKM. I'd just like to hear your thoughts on the slab market and how you think it's going to develop over the next few years because slab is not subject to the 50% import tariffs. We're seeing some more slab getting imported now. I'm just wondering to see how you see the slab market developing over the next few years.

Yes. I think in terms of cost and cost development, I think the same goes for slab then I just mentioned to any kind of steel product. First thing.

Secondly, the slabs from Russia are under a -- I'm missing the word, the European sort of regime.

Sanction.

Sanction regime. Thank you. So they will be pushed out by latest September '28. And we're talking 3.5 million tonnes of slabs coming out of Russia still into Europe today. So those 3.5 million will vanish. In total, -- we're looking at a slab market of roughly 10 million tonnes that is a free market for slab in Europe. And with HKM delivering roughly -- and of this, the 3.5 million will move out. So -- and HKM will have an excess capacity for the market of roughly 1 million tonnes.

So we are very confident that in such a market, a market share of 10% for an HKM, which has proven in the past that they can deliver in quality and time to that market because we always have sold slabs into the market from the 3 shareholders that is not overly ambitious and should very well work. And we shouldn't forget we're talking then about one of the most modern, most efficient electric arc furnace in Europe. Hence, also from a cost position, we should be able to compete. We are very confident with that.

Then we have Boris, please.

I have three questions. So the first maybe on HKM. Can you share those key elements that have been agreed upon with thyssenkrupp Vallourec? And what kind of support you would expect from those guys to go further in that -- in buying the assets?

The second question would be on the TRQs. Do you still expect the TRQs to be voted with a minimal dilution and by the end of this quarter. So that leaves a few days to go.

And the last one, I would be interested to know the split of your production costs between the different kinds of energy being electricity, natural gas and coking coal. Because it seems like at the moment, you are quite relying on blast furnaces or potentially less exposed than other players using electric arc furnaces like Turkey at the moment.

Yes. Let me try to answer those questions. So on the HKM side, we are in negotiations right now. So I'm very confident that we're going to sign this and close this by middle of this year and as of then, get full ownership of HKM.

When it comes to the support, Boris, apologies, but we're in those negotiations, so too early to tell. But if you take -- I think it was publicly stated, we were in discussions on a sale to CE Capital, HKM to sell to CE Capital. I think 2 years ago, if you do some research on those numbers, you might be very close to -- or relatively close to reality. Let's see. But again, we're in the middle of the process. Additional funding will be the EUR 200 million that HKM got on public funding, right? So we shouldn't forget that. They asked for public funding under the BIK regime and got that approved in December last year. So that will certainly be available for the transformation as well.

When it comes to the split of energy costs, I don't have those numbers top of my head. But what you said is absolutely right. We are -- especially with Salzgitter, with our site in Salzgitter operating on blast furnaces right now. So we are producing most of our energy ourselves with the blast furnace gas coming out of coal. So that is how we look upon our energy situation in Salzgitter. Peine is certainly -- given it's an electric arc furnace is a different thing. I think I mentioned when we talked about the electricity that we are very well hedged on the electricity side for 2026. So we don't see any major deviation or any major impact on Peine through the electricity cost given the hedges that we have, the green PPAs that we signed over the last 3 years are a great deal of help here when it comes to Peine. And then you had a third question that I missed out.

Development of the tariff quotas.

So what was your question on the tariff quotas, please, again?

Do you still expect the parliament and the council in Europe to adopt the proposal of the European Commission by the end of this quarter? And do you expect that to be the dilution of the final document to be minimal?

Well, first of all, yes, we believe that we're going to get a decision that leads to an implementation by 1st of July with the trade defense instrument. And there is a discussion of this carryover effect. I think that's what you're mentioning, what you're talking about, right? And we have a clear position as Salzgitter, but also as a steel industry, both through the virtual signing in Germany, but also Eurofair in Brussels and try to massage that in that this carryover effect will not affect us on the business side if it cannot be included because that certainly is a certain risk. I don't see this as a major risk, but it's certainly unpleasant to have. So we're going to work against that.

Okay. Then Maxim, it's up to you.

So first question is on natural gas because at this stage, your needs are quite manageable in the current setup. But with SALCOS ramping up from 2027, I mean this will get multiplied by -- I don't have the figure on the top of my mind, but by very high amount. So how do you prepare for that given that gas prices might remain elevated until -- or are you starting there to hedge already? Or is there a risk that the SALCOS setup will be less competitive than traditional blast furnace production due to high gas prices?

Yes. Well, first of all, if gas prices remain high, will not only hit us, it will hit everybody, right? So in that sense, we'll just increase price levels overall. And in that context, then I think we -- SALCOS will remain competitive. On top of that, we are -- of course, we then will strengthen our efforts or review our efforts in terms of hydrogen and whether hydrogen can compensate for natural gas quicker than anticipated.

So we have options here to play, Maxim. So first of all, increased price level overall. And then we have flexibility with SALCOS when it comes to natural gas and to hydrogen. So we certainly can deal with that development. But you're right, we certainly have to look at the developments now and how that will impact our overall cost situation going forward, and that is then well beyond the energy part only.

Okay. Second question is on a follow-up on HKM. So could you perhaps detail the impact it will have on your crude steelmaking capacity because you already account for some of HKM's capacity for about 30% of it. Do you have plans to downsize it. So what will be the net impact in terms of capacity on that filter? And how long do you think you need to bring the operation back to profits?

Yes. So what we have is at HKM today is a 5 million tonne operation, right?

As far as I understand, it's now loss-making.

Sorry, I broke up. Hope you can hear me clear, Maxim? Can you hear me?

Maxim now you're moving -- can you...

Okay. Good. Good. So looking at HKM, we're looking at 5 million tonnes capacity right now. In the end stage, after transformation, we will downsize it to max 2.5 million tonnes. So 1 electric arc furnace that we're going to operate on site in HKM. So that's capacity-wise, how we look upon it. So we're taking out capacity in the European -- overall European market.

HKM is not loss-making. It is a cost center as it is operated right now. We will certainly turn that into a profit center. And the business plan shows that we will be able to bring HKM back into -- or bring -- make it a positive contribution to the overall group already by 2027. So that's -- and the interim period is due to capacity adjustments, et cetera, but it will be well funded through the proceeds that we get through the acquisition, the funding that HKM has gotten themselves and our contribution as well.

Maxim, is that right for you. Maxim, is that right for you? Did everything come through?

Okay. And just the last question is on perhaps the net debt guidance for this year because previously, I think you had spoken of...

Yes, we can hear you.

You can't is on the net debt guidance. Net debt for this year.

I will take that. Yes. Of course, thanks for that question, and I, of course, expected it.

I spoken...

There's a delay in here.

Yes, there's some technical challenges. Can you hear us now back? Can you hear us?

Yes.

Okay. Sorry, you seem to be interrupted. But anyway, the most important part is that you can hear us. I think we got your question. It's about the guidance on the net financial position, where we came out slightly below minus EUR 1 billion last year and what's going to happen this year. So we expect to be something between minus EUR 1.1 billion and not exceeding EUR 1.billion 5 yes, rather on the lower side, definitely not exceeding EUR 1.5 billion.

Okay. Great. Next question is a kind of black box because someone haven't stated his or her name, but let's see who it is. And if we take the question, please.

Yes. Can you hear me?

Yes.

It's Tristan Gresser from BNP Paribas. Apologies for that. So my first question is on the steel production business. I think in the annual report, in the steel outlook, you mentioned that strip demand will not quite cover capacity utilization. I was wondering if you could explain a bit what this means. I think in previous reports, you always were quantifying that business as able to cover capacity utilization. And it sounds a bit more cautious, but with the CBAM, the quotas tailwinds, it would be helpful if you could help us understand the volume trajectory there and also to confirm a bit the time line you have in mind for the restart of the smaller blast furnace.

Yes. I think you are -- you're spot on with the blast furnace. As you might know, we have taken that out of operation in 2025 to do a relining. We have then consciously decided not to take it into operation for 2025. It's still not in operation. And that helps us also then to get to that match that you mentioned between the demand and our production. And you shouldn't forget that for -- for our site in Salzgitter, they're not only producing for the flat business, but also for the plate business for Ilsenburg. So we're able -- there is flexibility in the system. We're able to adjust according to demand, and we have that flexibility through the blast furnace C. Is that -- if I got your question right. Otherwise, please come back.

Yes. No, it's fair. So you do plan to restart the blast furnace C at some point this year. But regardless of the demand environment, there seems to be strong, let's say, tailwinds just from the policy perspective. If demand remains steady, you should still be able to grow your volume and gain market shares versus imports. Is that still -- I thought it was a fair assessment a couple of months back, but I'm just trying to understand if it's still a fair assessment that regardless of the demand environment, we should expect some stronger volumes for the steel production business this year.

Yes. I think that was our view a couple of months back, and then we still remain stable on that view. Otherwise, sort of the -- yes, no, I think we remain stable on that view that we should be able to recover some of the demand that might occur through lower imports into Europe.

Let me add some information, which may be interesting for you because after the electric arc furnace, there is our hot rolled mill, right? And we have not brought this capacity down. And we feeded it with slabs coming from our own production from our own arc furnaces. And we feed it in addition with slabs that we had on stock from HKM from the year before. So not -- please don't be mistaken that we have taken out a blast furnace C does not mean we have cut down downstream on the value chain capacities, yes.

Okay. That makes sense. And then a second question is on steel processing. I think you flagged good utilization in H1. Energy demand in the U.S. is good. I've seen you had some recent hydrogen orders coming through. So I think the direction of travel is clear. You were getting close to positive EBITDA in Q4. So with those tailwinds, could you be positive EBT at some point during the year, if not the full year? I'm trying to understand why it might be a bit some cautiousness for that business.

Well, the cautious comes from our market assessment that we have not seen this huge pickup in -- on the energy side, as you mentioned. Yes, you're right, we have been able to earn some contracts on the hydrogen backbone. However, expectation in the previous years have been much higher. So this has been slow.

U.S. is not a strong market for us. We are delivering pipes into the U.S., yes. But given the tax regime that is there, of course, U.S. is also pretty cautious with buying from Europe because that is substantial additional cost. However, we see that some of the steel mills, especially on the midsized pipes in the U.S. are well booked. So U.S. customers are turning also to us. But so far, I would say it is not that clearly visible. Hence, we are a bit cautious on that end.

All right. And maybe a last question on the ETS reform. Do you want more free allocation? What would be a positive outcome for you? I think the steel industry is relatively split on that matter. And you have some carbon allocation, but you're also quite advanced in your decarb program. So what do you want from the ETS reform? And also, we've seen over recent weeks and over the past months, European steel equities, including South fall when the CO2 price is falling. That seems counterintuitive, but I wonder if that does make sense to you and if you could discuss that a little bit.

No, I don't -- I share your view with the counterintuitivity of the CO2 price. As we still run on blast furnaces, we shouldn't forget that. We're talking about SALCOS, but we're still running on blast furnace. And even with SALCOS Phase 1 coming into operation next year, we still have blast furnaces in operation. So that's a bit counterintuitive.

However, when it comes to the ETS, for me, it is of utmost importance that we don't skip the system as such. It is very clear to me and to a lot of people I talk to that the system as a competitive CO2 reduction system is functioning and is functioning and should remain in that general setup. Of course, you can discuss the phaseout of free allowances. Of course, you can discuss sort of the benchmark of certain assets, be it blast furnaces, DRI, et cetera. Happy to do so as long as everybody understands that those companies that have taken investment decisions have taken those investment decisions on a certain regulatory framework that was given to us, and there was a lot of stability around over the last 25 years. So if you change on the ETS system, you cannot harm those first movers. I think that, to me, is the most important one when looking at the reform of the ETS.

Are there any further questions?

I think it's Tristan's hand. So there shouldn't be no more questions left so far. So thank you for your participation for the last 1.5 hours and see you next time. Thank you.

Thank you very much. Have a great weekend. Take care.

Thank you.

Ladies and gentlemen, welcome to our analyst conference for the first half 2025. Before we start, 2 remarks from my side. First one, this analyst conference will be recorded and afterwards, published on our website. The second one, this is an analyst conference. The press is very welcome to listen, but we will only allow questions from participants of the capital market.

And without further ado, I'd like to hand over to you, Gunnar.

Well, thank you very much, Markus. Good morning, everybody, in this call. Very happy to have you all here and to report to you the first half of this year for Salzgitter -- for the Salzgitter Group.

And as usually, we'd like to start with the occupational safety. You know that this is a very sort of important topic for all of us. And I'm very pleased to report that we have started well into this year compared to previous years. Hence, we are well underway to further reduce the LTIF quota. The target remains to have 0 accidents and also all activities ongoing that we also reported on the Annual General Meeting remain in place and remain under full focus to further reduce the LTIF also going forward.

Now looking at the market environment, we, of course, see that the U.S. tariff policy has further developed now with the overall quota of 15%. However, steel remains at 50%. There is an open question still to be answered between the negotiating parties, whether there's a quota, tax-free quota, to be implemented, but to be seen. So certainly, nothing that we are, as industry, very happy about. We at Salzgitter are not that much hurt by this tariff given that our export into the U.S. is limited also from the pipe business. There's limited downside risk that we see in that area. But however, of course, it adds to the overall uncertainty that we see in the market.

China is, of course, still a topic for us. We see that the export industry is under massive pressure. We see also further inflows of Chinese steel into Europe. Actually, '26 -- '25 has been so far the record year in terms of export into Europe. Back since 1990, we haven't seen figures that high compared to that.

Staying with Germany, of course, the trade disputes that I just talked about are hitting us in times where also the demand is very low. So we are sort of hit from both ends. Of course, we see, with some positive notion, the fiscal policy that should improve growth in the steel sector as of 2026. And certainly, the budget discussion, the national budget discussion now in September should also give some more clarity on potential cost reduction on the electricity side. Let's see where the German government will land that discussion.

Looking at EU, steel demand is low, same picture as in Germany. And the import remains high. We see more than 30% of the total volume being imported, not only China, but also other countries, but also here, record high numbers. However, the political and regulatory discussion we are seeing, and we get back to that at a later chart, is, of course, to some extent, positive and should help us to reduce imports going forward. Stimulus through construction and defense is a bit the same like in Germany. We see this a potential demand increase as of '26. We don't see this hitting the ground in '25. So we are waiting for this in '26 and from there onwards.

Intensive discussions when it comes to the Carbon Border Adjustment Mechanism, the CBAM, given that it has to be implemented in '26. So a lot of work has to be done in Brussels in the second half, especially Q4 '25, and also a high debate right now on the trade instruments, the safeguards, which also needs to be replaced then in '26. So also here a lot of political debate we're having, both in Brussels, but also in Berlin.

Raw material energy prices, we have seen a recent increase on the iron ore side, which has fallen below $100 per tonne, now being above $100 or $100 and a bit north of that. Let's see where sort of that stabilizes. Coking coal, still below $200, relatively stable there with daily fluctuation, but that's more sort of, at least to our read, this is not the physical trade, but rather the financial trade that gives this kind of fluctuation structurally below $200. Energy prices relatively stable at EUR 90 per megawatt hour in Germany. And so is natural gas, has come down quite substantially after the winter increase and now relatively stable there as well. Also, of course, driven by the low industrial demand overall.

Looking at steel, we have seen steel prices coming down. I'm looking at the left side, Northern Europe. Steel prices went up in '25 until late April, beginning of May, and then went down again. We've seen EUR 540, EUR 535 per tonne of hot-rolled coil. Recently, a pickup. Our read is this is already expectation of the market when it comes to safeguards in CBAM given that this will kick in as of beginning of '26, and potentially also reflecting the pickup that we have seen in China lately.

If you look at the right side, the yellow -- the orange curve, China has had a steel price increase since July '25. So our read here is, in preparation of the 2 sessions of the NPC and the CPPCC in March next year, there has been some guidance that China will look to overcapacity that they have themselves and try to balance the overcapacity question with sustainability. So certainly, at least a hint that overcapacity is addressed also then in March next year from the NPC. So that's certainly a positive trend, but further to be looked at whether that is stabilizing or not.

So zooming in on Salzgitter, first half '25 vis-a-vis first half of '24, going through the numbers quickly. Birgit will go through them in more detail. Crude steel production, of course, the low production due to low demand, but also maintenance work on our Blast Furnace C that has been carried out in the first half of '25, hence, the difference of 400,000 tonnes first half '25 vis-a-vis '24.

External sales have come down quite considerably. This is predominantly due to prices. And then basically, that trickles down also on the following numbers. We should be aware of that the results include Aurubis at a level of EUR 71 million, slightly above last year's numbers that were at EUR 70.5 million, if I recall correctly. So slightly above. That is included here, of course. And also a big number, and Birgit will also elaborate further on that, is the reporting date related valuation of derivatives, which is included here at roughly minus EUR 80 million vis-a-vis a plus EUR 10 million in the first half of '24. So also that is part of the numbers. What we should -- it's not on that slide, but we should also mention is that our equity ratio remains very healthy at a level of 42.2%. So that is perhaps worth mentioning on that slide as well.

Looking at the different business units. In the first half, of course, steel production has seen the low level of demand. Prices -- or revenues that were flat, I should say, have stabilized in the second quarter slightly, but sales and earnings down due to the low prices, as I just mentioned.

Steel Processing is hit by weak demand on heavy plate, very weak demand also in terms of shift in qualities down to the lower grades. And we have seen market price decline also now towards the middle of this year. So hard hit on heavy plate. Line pipe demand is stable. It has not dropped. Also exports into the U.S. have not been canceled. So of course, at risk, but not canceled yet. On the precision tubes side, low demand from core segments, especially automotive. And we should not forget that here in the Steel Processing, we had the deconsolidation of the stainless steel tubes from first half of '24 to this first half '25. This is, in terms of sales, roughly EUR 170 million reduction due to the deconsolidation.

Trading has recovered compared to last year. So the turnaround is well underway. We are achieving good results on the improvement measures that we have implemented. So on that end, good. However, of course, we see an overall European weak demand on stock keeping trade, hence, also there a decline. International trade has also recently come down with the uncertainty on the U.S. tax discussion, however, stabilized otherwise.

Technology, positive news from KHS. We foresee a record year for KHS again. So with an EBT well above EUR 100 million for this year. Order intake is also significantly above last year. Our Plasmax technology is really kicking off, especially in India. Now we're trying sort of to move that forward into Africa and the Americas. So good development here. Technology still includes KDS, our shoe machinery. You follow that we recently signed a deal to sell DESMA shoe machines, but still included here.

So taking all that together, we have sort of narrowed down our management guidance for the remainder of this year, sales being between EUR 9 billion and EUR 9.5 billion, EBITDA between EUR 300 million and EUR 400 million. The pretax results narrowed down from minus EUR 100 million to 0 and a ROCE that is slightly higher year-on-year, so compared to last year. So that is how we overall look upon the year for the Salzgitter Group.

Going further down a bit more into details, again, starting with the political framework we're looking at. Trade defense. There has been a lot of discussions on trade defense, especially in Brussels lately. The safeguard review is completed. I think that is good, however, not sufficient yet. Same goes for the safeguard successor instrument. There is a proposal upcoming now in Q3. The consultation of the industry, the wider industry is ongoing and the steel industry as such is invited -- or not only the steel industry, but we are also invited to contribute to the sort of data collection that EU is doing right now. So we expect then a proposal by Q3 of this year.

And then we have and Melt&Pour, which is part of the consultation. So should Melt&Pour be integrated into the safeguards? From our perspective, absolutely, yes, in order to reduce circumvention options in the safeguards that we today see. And then also the last 2 points, which are more of a strict enforcement of existing TDI rules, both the threat of injury procedures as well as the lesser duty rule. Those are existing TDI rules that should be enforced in a stricter way. However, as we have seen from the past, difficult to implement. So let's see how that then plays out in practice.

Carbon Border Adjustment Mechanism is something we're going to see as of '26. Details regarding the export solution will be expected in Q4 as well as the expanding of the scope and the measurements against circumventions. So all in Q4 '25. So heavy on that quarter and hence, a lot of focus from our end at Salzgitter, but the entire industry to get things right here and to also lobby the commission early on to get also an actionable set of rules for the CBAM.

Last but not least, energy bureaucracy key markets. It's good to see that the Steel and Metals Action Plan includes those elements as well. Some of them are very known to us. If you take the label for CO2 intensity of products, this is covered through our less label, and we're now in discussions with the commission to integrate that into their view on the labeling.

The lower grid fees is something that is discussed in Germany, should be included in the upcoming budget. And hence, we will see how that then plays out for us in terms of cost reduction as of '26. Then scrap export is a reciprocity element that EU is discussing there with other scrap exporting countries. And then the reform of that research fund is just making available EUR 1.5 billion that are still parked in that research fund and have not been sort of called off and make them usable for the transformation. So you see the Steel and Metals Action Plan has a lot of elements that will and can support the steel industry going forward and can also address some of the challenges that we have here as an industry and also, of course, as Salzgitter.

So how do we then approach the entire situation? As you recall, we have this holistic approach where we look at both growth, but also performance initiatives and performance measures. Looking at the growth to start with, I will not go through all of them. I think the ones in bold are the ones that have changed since we talked to you through that last time. We have further increased partnerships around the green steel products, SALCOS, especially in the commercial vehicle side. We have closed further closed-loop agreements with OEMs, but also with the construction industry, first time that we have construction industry on that end. And we are also increasing our activities on the commercial recycling of slag, hence, making slag really a product -- or the different types of slag a product and a revenue stream out of that going forward.

On the Steel Processing side, we have been very vocal about the approval from the German Bundeswehr for SECURE 500. Further approvals are expected in the second half of this year. They should come in slightly quicker than the first one given that we are basically setting -- or basing them on the existing approval. So we should be able to further perform here.

Trading. Interesting to see that Middle East is interested in green steel and the international trading arm of our trading house is expanding the trades for green steel in the Middle East, both on material, but also third-party material. Same goes for scrap. Scrap becomes more and more relevant also on the trading side. Africa, Southeast Asia is here the key market.

Heavy plate. There's high interest in heavy plate, high-quality heavy plate in and to Asia, interesting enough. Also, Asia is interested to import high-quality heavy plate from Germany, so supporting there. And on Technology, I talked you through Plasmax and the successes we have there. I'll not go further into that unless you have a question then later on in the Q&A.

Now looking at the initiatives and performance measures. Let me start then with the portfolio. I talked about Desma, the shoe machinery. The sale is signed, has been signed last week with NMP. So the transfer is supposed to happen this year. So the closing is supposed to happen now in Q3. So next step in our portfolio management, so continuous work there.

On the structure, we talked about the restructuring of the trading unit, and you have seen the numbers. So restructuring is progressing well. Social plan has been signed and is executed as we speak. We are reducing a triple-digit number of employees in the trading unit, and this is all going through quite smoothly, which I think is a success in the way we do restructuring in Salzgitter and here in particular.

Same goes for the Steel Processing unit. Restructuring ongoing on the MPT, the Precision Tubes Group, which is, one, the closure of our Helmond site in the Netherlands, and we will sort of reshuffle the volume that has been processed in Helmond to other sites. And we're also talking here roughly 70 FTEs that will be reduced as well as further focus on the Mexican side, where we also are progressing well in order to get performance up here. So initial success on those restructuring measures.

Now talking performance in the economic measures, I hand over to you, Birgit, to guide us through here.

Sure. Thank you, Gunnar. A warm welcome also from me to you out there. A pleasure to be here with you again today. So looking at performance, that is really a topic that is going quite well. As you know, as you are aware, we have expanded our performance program from the original Performance 2026 program to a new program or a large program Performance 2028. And by this, we doubled our ambition coming from EUR 250 million of cost savings to EUR 500 million of total cost savings until 2028. And this year, we have already realized EUR 48 million out of the target EUR 97 million. I will show you this in the next slide. That is our target for this year. So that is running precisely on track, which is really good. And as you have seen, we really need also these contributions.

And next to the performance program, we are, of course, also focusing on cash measures, really tightly looking at investments, tightly looking at budgets and spendings, of course, and also tightly looking at our working capital management. And we will have a look at this also in the upcoming slides.

So here some more details on our Performance Program '28. You find here again, on the right side, the EUR 48 million I have mentioned already, which we have realized in the first 6 months. You see right of that, the target of EUR 97 million. So we are here perfectly on line to realize this target. And we are very confident that we will be able to make it. And we are targeting for 2026 an even higher amount, and we are right now busy also clearing already about the measures for next year. Also good to see the EUR 48 million in the first half of the year are already 3/4 of what we have achieved last year for the total year. So really, you can see that we are really expanding here and that we are also able to deliver here.

So coming to the KPIs. As Gunnar has said already, we did not expect a pickup of the economy in the first half of the year. And in addition, we are also facing quite some price pressure in the steel segment, and we also have the deconsolidation of the MST Group. And all this is summing up in our sales of EUR 4.665 million (sic) [ billion ], which is 11% below previous year. And if you take out the deconsolidation of the MST, it is 8% below previous year, and the main decrease is coming from the trade area here. And as a result, of course, EBITDA comes down. We realized EUR 116.8 million in the first 6 months.

Our earnings include, as shown, the positive contributions from our cost saving program, from our restructuring activities, especially trade, and from a sustainably strong performing Technology segment and from our Aurubis shares. Gunnar has mentioned the more than EUR 70 million here as well. However, we had to digest EUR 80 million from the reporting date valuation of derivative positions. And in addition, we deferred EUR 10 million impairment risk from planned portfolio streamlining. This means the earnings from our business activities plus Aurubis were balanced.

Our cash flow from operating activities was significantly stronger than last year. As you can see here, we reached EUR 81 million. And this was strongly supported by the reduction in working capital, the figure you can also find here, almost EUR 2.5 billion compared to EUR 3 billion 1 year before. And also quite good to see is our net financial debt, not as an absolute figure, but concerning the development, because it was a lot better than originally anticipated. And despite SALCOS investment, it was only slightly higher than 1 year ago.

So what do we expect for the second half of the year? We expect that our financial debt will be around minus EUR 1.2 billion, which is significantly below our last prognosis we shared with you in our last meeting here, which was around minus EUR 1.5 billion. We expect only a very cautious economic recovery, and we expect also having a positive impact, reduced cost for raw materials, especially for those purchased in U.S. dollar. And we, of course, expect the other half of our Performance '28 cost-saving program, technology with a very strong fourth quarter and, of course, ongoing Aurubis contributions.

All what we have discussed right now, we, of course, can also see here in our profit and loss statement. The sales decrease of minus EUR 578 million. And due to changes in finished goods and work in progress, a decrease in total in the operating performance of minus EUR 833.8 million. And we see here also nice almost 85% of the operating performance can be compensated by the material cost reduction of minus EUR 714 million. And the changes in other operating income and expenses are almost balanced. They are mainly influenced here by exchange rate impacts and by reduced administration costs as well.

Looking at our balance sheet, our noncurrent assets increased mainly in the area of the intangible assets, property, plant and equipment, by EUR 51 million and also investments accounted for using the equity methods, this is mainly Aurubis, by EUR 53.6 million. Looking at our current assets, the inventories decreased nicely by more than EUR 220 million, whilst we see the upswing in the trade receivables compared to the year-end closing. Assets held for sale here are, as Gunnar has mentioned, our DESMA shoe machine entity. So we are putting this now into this line here with EUR 47.7 million. And you see that our cash was reduced by EUR 237 million for investing activities.

Looking at the other side of the balance sheet, we see here a decrease in the equity. This is in line with the reduced earnings. So the equity reduced here by EUR 97 million. Looking at the noncurrent liabilities, we see here an overall increase by EUR 90.8 million. Whilst provisions for pensions decreased due to a higher interest rate by EUR 100 million, we see that the financial liabilities increased by EUR 168.7 million. Looking at current liabilities, we see an overall decrease by EUR 149.7 million, mainly driven by reduced financial liabilities of minus EUR 201.9 million, and also trade payables, which were reduced by EUR 122.8 million. And these 2 positions were partially compensated by other liabilities, which increased EUR 112.8 million.

Looking at our cash flow statement, we started at the beginning of the year with around EUR 1 billion. And I have already presented to you the EUR 81 million cash from operating activities that we can add up here. And then we spent, for investing activities, EUR 243.5 million, and cash from financing cost us EUR 47.3 million. So we have cash and cash equivalents at the end of the first half of the year of EUR 765 million, which is better than 1 year before, and that amount is EUR 184.4 million.

Working capital, you see here the quarterly development and the comparison compared to 1 year ago with a nice decrease of more than EUR 0.5 billion, down to around EUR 2.5 billion. And of course, here are reflected lower prices for raw materials and for steel products as well as our really strong focus on managing our working capital.

Investments, you see that we have spent in the first half of this year, EUR 241 million. Our budget is also quite high for this year, however, a little lower than last year. And it looks like -- it may look like we will not be able to reach almost the level of last year. However, when we analyze last year, we see that the ratio between the first and the second half of the year were almost equal. So there is, for us, no need, due to the figure of the first half, to cut down on the total year's figure.

And with this, I hand over to you, Gunnar.

Well, thank you very much, Birgit. Let me just quickly conclude here and then open up for your questions. So first half has been a difficult one. Recovery has, as expected, not happened, and we see perhaps slight recovery, at least when looking at steel price, as I've shown to you for the second half, but very limited. So it will remain a difficult year. We counter that difficult year with the holistic approach that we both presented to you and updated you on.

Let me perhaps put it in 3 main messages. First of all, the cost and performance program continues rigorously. So we are focusing on really getting our performance stabilized and further improved as well as the cost level down, including working capital, as Birgit has shown to you.

Secondly, we're continuing our decarbonization program. So SALCOS 1 is not in question. However, we do this in a practical and a reliable, in a rational way, embracing the outer world, embracing the current global and European market and regulatory developments. Hence, we make use of the modularity of SALCOS, which allows us to take investment decisions if and when market conditions and the overall framework conditions are right. So take the right decisions at the right time, I think, is the term here. So really making use of that modularity going forward. I think that's one of the very strong elements of the SALCOS program as such.

And thirdly, a very clear message to policymakers, both in Berlin and in Brussels, that they define steel as a strategic industry for Europe, ensuring Europe's resilience. So if that is their case, and I think this is underpinned with both the Steel and Metals Action Plan as well as with the coalition agreement in Germany, then they also need to quickly create the environment in which the steel industry is able to proceed and to compete on equal terms with all our competitors around the globe.

So making the level playing field reality is what policymakers have to do and have to do quickly in order to really sort of underpin their own view on the steel industry. So that is what policymakers have to do. But again, I would like to emphasize, we do what we need to do on our performance, on our cash management, on our cost management as well as on the investment and transformation activities going forward.

With that, I'd like to close, and open up for questions. Thank you.

Thank you very much. We start with the first questions from Tristan, please.

All right. Perfect. The first one, can you explain a little bit the EUR 80 million impact from derivative positions, where it's come from? Is that just in IP? Or is that also hitting other divisions? And also just a quick one on the trading division. I think you mentioned a positive one-off in Q2. So I mean, that was a strong performance. Should we expect trading to continue in this current earnings level into Q3, Q4? That's my first question, and then I have another.

Yes. Thank you, Tristan. So looking at our valuation of the derivatives and the minus EUR 80 million, we are doing, as most companies do, of course, the major hedging on the AG level, right, and not down in the divisions. And the major portion is coming from the overall hedging on the AG level, and we are doing this hedging activities here mainly because of our purchase of raw materials in U.S. dollars. But however, 1/3 of the derivatives is organized in the trading business, and that is very short term, because that is always in line with the deals trading is doing. So yes, let's put it this way, 2/3 are, for the overall company, mainly related to save the material cost and 1/3 of the EUR 80 million is related to trade.

That was your first question. And the second question...

On trading, whether the performance were...

On trading, the performance. And thanks for putting that question to me, because I forgot to mention one thing when I showed the Performance '28 Program results and targets. And here, I have to underline that this is not including restructuring activities. We keep restructuring completely outside the Performance Program. So you have seen only a minor figure for trade, and you have to add a little more than EUR 6 million sustainable improvement in Trading coming from restructuring activities. And this is the start, and the contribution from restructuring will be increased over time even more. I hope I could answer your 2 questions, Tristan?

Yes. So just a quick follow-up. The EUR 80 million negative valuation effect. So you're saying 1/3 is in trading?

Yes. roughly 1/3, yes.

All right. And then my second question is not an easy question, but really -- sorry, what is holding back your steel production performance in Q2? I mean all peers we've looked at have shown improvement quarter-on-quarter and HRC went up to EUR 650 at some point. So you must have seen some positive FX. So is that an issue of mix? Is that an issue of cost? Is that something else? And also, when you look at your outlook for that division into Q3, Q4, can you discuss a little bit the trajectory in terms of shipments? I think you also mentioned lower raw material costs. So how should we think about the second half?

If I may, for the first half, looking at steel production, you might recall, we had operational issues with a fire in the mill. So that was certainly something that threw performance back. And secondly, also the major overhaul of the Blast Furnace C, where sort of production has come down. So I think those are effects that we have seen in the first half. We are certainly not planning for them in the second half. So performance-wise, we should be back on track for the second half of this year. Yes, I think that's how we look at our internal performance.

When it comes to prices, price developments, I just mentioned that, Tristan. So we see a certain pickup on prices due to expectation of political developments, the Carbon Border Adjustment Mechanism kicking in, in '26, and first shipments -- or reduction of shipments given that the risk of being hit by the Carbon Border Adjustment Mechanism that drives prices slightly up and certainly something we want to also take part in.

Okay. And just maybe a last one. Would you expect a big bounce in imports into September, October as distributors, buyers kind of try to move ahead of the CBAM and the safeguards? And is that a risk that you baked into your new guidance?

We don't see that as a risk abating in our guidance, no. We, of course, observe how especially traders from Asia are acting right now, but we don't see this as a risk to our guidance, no.

Next questions are coming from Boris Bourdet from Kepler.

Perfect. A couple of questions. Maybe on trade policy. Can you share with us what the ideal scenario would be for you, what you have been asking when lobbying with the European Union and the German government? And what are the chances for your request to be successfully implemented? What do you expect the outcome to be basically?

And a second question would be on disposals. You've made the sale of KDS. Where do you sit now in terms of further potential disposals, I think, of Aurubis' stake and KHS that has been remote to being discussed by the Board? And just to follow up on Tristan's question on the FX impact. Do you expect that FX impact to reverse at some point based on current prices you see on the market?

Yes. Boris, let me take the first 2 ones and then hand over to Birgit. So trade policy, what the ideal scenario would be, of course, is a clear acknowledgment that the inflow into Europe is unhealthy. We have seen a doubling of imports over the last 10 years. So ideal scenario would be that we get back to trade inflows as we have seen them in 2015, '16, which is a cut of 50% compared to today. So that is certainly what we lobby. The commission -- however, whether this is then something that the commission will follow, that is to be seen. I think the sentiment, the general political sentiment in Brussels is moving into our favor. However, let's see what the rules ultimately look like.

So as I said in my conclusion statement, what we want is a level playing field to do business with our competitors -- with our customers like our competitors from outside Europe can do and at the same cost level that they can produce. And we see quite some disadvantages in Europe. Some of them are structural, and we can handle them with improved performance. Some of them are regulatory and they need to be conquered, and that's what we're asking for.

On KDS, or further disposal, as we have said now since quite some time back, we have a much more active portfolio management going forward. So you should not expect KDS being the last portfolio company we are looking at in terms of portfolio management, but no news on Aurubis and KHS. As you have seen also presented by Birgit, KHS is delivering extraordinary results right now, very good results. We're very happy with the performance and the performance improvement that KHS has done over the last 3, 4 years and certainly something we are happy with as it stands. No further news on those 2 companies as of now.

And with that, FX for you.

Yes, challenging topic. At the end of the quarter, the exchange rate, euros to U.S. dollar, listed at $1.08. And I guess we were all surprised about that development in the first months of the year. And then we thought that that's already quite impressive. However, at the end of the second quarter, the exchange rate climbed up to $1.18.

So what is to be expected for the upcoming months? There are some banks and institutes who are rather conservative, having a prognosis of $1.10. And the majority, however, is expecting this rate to stay at $1.18. And some even think that over the course of the beginning of next year, it may even further deteriorate versus towards $1.20. So it's quite difficult to really predict what this will bring, what the future will bring here. However, as you may very well imagine, we are constantly adapting our hedging activities according to the actual rate and to what is going to be expected. So that's all I can tell you about the expectations concerning the exchange rate.

Okay. So any move in the direction of $1.10 would be a positive on your H2 results, while any stability around the $1.18 or something would be something natural?

You're right. And you have seen the exchange rate at the end of June was $1.18. So exactly like you summarized it. Against the $1.18, there will be the deviations. And of course, don't forget also, of course, the volume, the hedged volume also has a major impact. That's also clear, yes.

Right. Then we move on to Bastian, please.

So my first question is just following up briefly on the effect of the relining. Could you maybe just share with us how much in absolute numbers the relining has been impacting your numbers? You've already been carving out the, I guess, the EUR 80 million of FX, which I think was for the first half, right? So I guess the effect for the second quarter was probably a little bit smaller. But if you could give us the effect of the relining, that would be great. That's my first question.

What did you mean by relining, sorry?

Maintenance.

I'm happy to Bastian, but what effect are you looking at? In terms of cost for the relining, or...

Yes, exactly. I guess, basically, if you would more or less strip that out, how would the steel business have performed in the second quarter? I guess, usually, that can be anywhere between typically, I don't know, I would say, like EUR 10 million to EUR 70 million. I don't think it's been at the larger end. But yes, if you could give us maybe the overall impact on the earnings versus where you would have been if you wouldn't have had that effect.

What I can share with you is the CapEx, which is below EUR 10 million for all the work that has been done on C. We don't have the numbers at hand here sort of what that would mean in terms of if C would have performed as usually, Bastian. By the way, difficult to say because sort of there's a market element in there as well.

Yes. Okay. Fair enough. No problem. Then just secondly, on the outlook. So I guess there's been a couple of, I would say, one-off items in the second quarter. Now if we strip those out, I guess, particularly the FX effect, let's assume that's just going to be flat. It's going to bring you pretty much close to, I guess, breakeven EBITDA. I think the underlying market doesn't really seem like it's going to improve, at least not in the third quarter, maybe not in the fourth quarter either. So what are the main drivers here? And do you need anything else other than FX for you to play out in your favor to hit your guidance run rate?

So let me take this question. I will start and Gunnar, of course, will add. So when I presented the KPIs, I gave a short outlook for the second half of the year. So first of all, FX, you're right, like if the exchange rate will not exceed $1.18 and also based on volume, the development will be accordingly. And what do we expect for the second half? Let me repeat. We expect only a very cautious economic recovery, reduced costs for materials, I have mentioned that we purchase and especially in U.S. dollars. And we expect technology with a strong fourth quarter, that's seasonally every year the case. And we expect good contributions from the Aurubis participation to be continued. So all these positive impacts and not an impact coming from the derivatives amounting again to EUR 80 million. All this led us to put out the guidance from minus EUR 100 million to 0, because before when we had the guidance open even up to plus EUR 100 million, we were expecting that the recovery of the economy would quick up a little bit more than we are seeing it right now.

Yes. And then also sort of some of the regulatory developments are kicking in later than expected. You might recall the discussion in Germany on the electricity prices, for example, and grid fees, they only now will kick in, in '26. Hence this will not help us in '25 as one of the examples, right?

Okay. Understood. Great. And then just following up on the efficiency program. Of course, the EUR 500 million is a large number. It seems like basically having a bit more detail in terms of how you want to get to those numbers. What's the overall headcount and FTE reduction, which you're aiming for until 2028? Is there already a number to it?

Look, the way we look at this improvement program is that we want to improve our efficiency and the cost level as such. Of course, FTEs and FTE reduction is a part of it. And I mentioned the number for the restructuring of trading, which is a triple-digit FTE number. However, it's not that we just lay out a number and then see how we fulfill that number, but we're coming from a bottom-up approach.

How can we further improve? We have set a target, a financial target, not an FTE target. Hence, there will be FTE reduction. Those we will discuss with works council and get to agreements, and then we will communicate those. But the overall target is to reach the EUR 500 million and not to reach a certain FTE target. So we are a bit different here in the approach compared to some of our competitors. However, I think, especially again, mentioning trading, the result is as such positive as we sort of get to the measures first, then define what is the FTE impact, then negotiate and then communicate.

Okay. Understood. Great. Then a very last question just on the recent announcement with regards to your certification for defense grades. And I guess the shares reacted obviously quite strongly to that. So last quarter, you mentioned that you have established an internal task force for defense. Could you maybe share with us at least the broad corridor in absolute numbers or in percentage numbers on how much sales potential in defense you would see, say, in the next 3 to 5 years? So is this something which can really make a material financial difference for you?

Well, first of all, yes, the task force is up and running and is very successful in the discussions with potential customers. So we're sort of really picking up on the interaction with the defense space as such, given that we are sort of relative newcomers in that area. We had some activities with Universal, which is part of trading, however, limited. So this interaction has intensified a lot and is very positive.

It is still very difficult and early days to really look at the overall potential that this new investment cycle in the defense industry will give. But let me try to put it in the other way around. We have a facility in Ilsenburg producing those plates. This is a capacity, if you take those plates, of roughly 150,000 tonnes a year. And ambition level should be that up to 50% of this capacity over time should be filled by defense products or by products that are like SECURE 500. So also from a margin perspective, alike. So that is what we see we should be able to contribute to the overall market.

And then let's see sort of how successful we are with the ramp-up. But this is at least something we could envisage to target at for the upcoming years.

Secondly, perhaps coming back to the task force, we will now sort of transform a task force which is more project-based into a more line organization to make sure that also sort of going forward, we will have the right interaction with our customers also on that level.

All right. Next question comes from Alain Gabriel.

Just my question is on HKM. Do you have any latest updates over the last quarter or last few months based on your discussions with your JV partners? We read that your key JV partner has terminated their slab agreement as of 2030. How would that impact your business? That's one. And then two, you may need to inject some cash into HKM for restructuring or potential closure. Can you give us a range of outcomes of that investment in HKM?

Well, thank you, Alain. First of all, we are in constant discussions with both partners, Vallourec and thyssenkrupp Steel. By the way, thyssenkrupp has terminated the agreement and it will last until 2032, not 2030, but 2032. So they are obliged to offtake slabs from HKM until 2032, unless we jointly decide differently. As we have always said, we are exploring our options, and we will take a decision, an informed decision in Q3 how to move forward with HKM. There are different options. We can jointly come to an agreement to close HKM, and then we have different scenarios.

So giving you cash figures on that is difficult, because it also will depend when closure will happen and how we will do that. I think it is fair to say it's going to be a triple-digit million number, total cash for a closure. If we would come to a view of further continuing HKM together with TKSE given that they are still partners in there, and also Vallourec also has a delivery or an offtake obligation in '28. Certainly, cash profile would be very different, potentially much lower. But then you also have to have an idea what to do with HKM afterwards. So this is exactly what we are analyzing, as we have said all the way through, and we will take decisions in Q3, but too early to say right now.

And a follow-up on HKM. Are you able to share the P&L and the cash flow statement impact of HKM during the first half or the second quarter, so that we can see how the business is impacting your group?

So we do not consolidate HKM in our figures. The interlink between HKM and us are the transfer prices that we are paying for the slabs. So there is no like cash injection from our side beyond paying the bills for the slabs that are delivered to us, yes. And if at the end of the year, the costs are higher or lower than what has been in the bills to us, then there is an adjustment payment made. That is the way we are linking the 2 companies together.

Christian, then it's up to you.

I have 3 questions, one on heavy plate again. So normally, strong customers are wind, pipeline industry and so on and so forth. So you mentioned it was very weak. Do you see any kind of comeback of orders there? Or do you expect some comeback of orders there? And where do you currently see the main weakness in the orders when it comes to heavy plate? This is the first question, and I'll take them one by one.

Okay. You're absolutely right. Wind industry, pipeline industry is a large offtaker of heavy plates plus the yellow goods. All 3 have been very sort of reluctant and are waiting for sort of how the overall economy is developing wind. You have seen that even auctions on the offshore wind side in Germany have been called off due to lack of interest. So that, of course, puts the wind industry or the offtake from wind industry further down. I think we're conquering -- trying to conquer that at least. You might have followed that as well that we are offering now green plates also for the wind industry, but it is a slow pickup that we see there, really waiting with the investments.

Same goes for pipelines. The pipeline of projects when it comes to pipelines is quite filled. So there are a lot of projects out in the market. However, decision-making of those that are to be built or that want to build pipelines is relatively slow and hesitant. So also here, we see that the market in principle is there, but the decision-making for those projects is slow. Also, of course, given that some of the projects are U.S. projects, hence, they are waiting for sort of the whole trade conflict to settle at some point to make reasonable decisions there as well.

And in the yellow goods, given that the construction industry as such has been weak also, of course, yellow good industry has been very hesitant to further invest, hence, also low demand there. Good to read at least this morning in the German Handelsblatt that the construction market and the sale of houses and rents are going up. That will certainly also then, over time, impact the construction market and the yellow goods market. But to be seen, Christian, to be seen.

So this means when we take your description of the entire market currently is that any new order you are taking is on a very low margin. Is that right? And so there's some kind of a time lag before we see some kind of a margin recovery?

Well, the overall price level for heavy plate -- I mentioned that in my presentation, the overall price level is low, and that, of course, also hits us.

Okay. Then on trading, the second half was, especially when it comes to overall sales, quite strong, on the same level like we have seen '24 almost. So can you give us some kind of an indication was that on volume or prices? Prices are not improving. So it should have been volume. And can we expect the same volume going forward, so that we will see maybe some kind of the same development like we have seen in the second half of '24 and the second half of '25 for the trading business?

Well, that is difficult to predict these days what the volumes will be. I think what you see, Christian, is, first of all, that our cost reduction program is really sort of hitting the ground, improving our cost position overall, also compared to the second half of -- that will be, of course, also compared to the second half of last year given that the major cost reduction program only started in Q1 this year, especially when it comes to the headcount reduction.

And also, it will be important to understand and to see how the international trading will develop for the second half if the whole trade discussion settles. I think then also the confidence of our trading partners will increase and allow for more business on the international trading. Volumes and prices for domestic local trading, our so-called lagerhandel is still low.

Okay. It's difficult to predict, of course. Going to net debt, you mentioned it will come in below EUR 1.5 billion. Is the sale of the shoe machines already included? Or would that give some kind of an additional tailwind for that? And so how far do you expect -- can it come down to EUR 1.2 billion, EUR 1.3 billion?

Yes. I mentioned the figures in the beginning of my talk, that is we expected around EUR 1.2 billion. And we have the DESMA shoe machines included in our cash forecast.

Okay. And last question. So there is one DESMA company left, which makes no sense in this kind of portfolio. Do you also expect, if you are selling it, some kind of a positive impact or more on the negative side?

Well, first of all, there is no decision taken. And as I also mentioned towards Boris, we are reviewing the portfolio constantly. And yes, of course, we're also looking at KDE. But no decision taken. Hence, I can also not sort of properly answer your question. So we are not in a process. We don't have any price points and no decision taken here.

Okay. Maybe one additional. Have you heard something else from your main investors so far after the AGM? So how are the talks ongoing with these guys?

Well, of course, we are in constant dialogue with our shareholders, including our 2 main shareholders, and we have very sort of constructive talks when it comes to the operational performance of the company and what to do and also the strategic further developments. So of course, we talk and we are sort of very intensively sort of discussing the future of this company jointly.

And they are really supporting also the entire SALCOS way so far, I would suppose?

Absolutely. All shareholders that I talked with are fully supportive when it comes to SALCOS Phase 1 and implementing it as planned. And as I mentioned, I think the beauty of SALCOS is the modularity, and then we will take joint decisions when is the right time to then invest into SALCOS in the next SALCOS phase.

Thank you, Christian. Next question comes from Dominic O'Kane, please.

Just one other question on cash flow. The guidance that you've given on net debt is really helpful. At the end of Q1, you talked about EUR 800 million of CapEx for 2025. So are you still comfortable that EUR 800 million is the number? Or do you think there's some potential maybe downside given the run rate in H1? And then a similar question just on working capital. Could you just maybe help us with the bridge for working capital for Q3, Q4?

Okay. So first, CapEx, we have seen different -- if not different, similar spending behavior last year when it comes to CapEx. That the spending in the first half of the year was significantly under proportional. And then towards the second half of the year, we could still make it.

Please keep in mind that especially our SALCOS investments are related to really big numbers. So that means if there is a shift like in one of these numbers, there could always be a bigger spillover to the next year. But that is only then a matter of time. That is not a matter of spending or not spending. And of course, our divisions and we ourselves, we are looking at all the other spendings as very careful, as I said. However, at this point in time, we think that we will still reach slightly above EUR 800 million in CapEx by the end of the year. And if not, we expect that it will be then, if the figure would be like remarkably, how to say, less, then it would be rather a spillover to the next year than a sustainable decrease.

And the second question was?

Cash flow development, working capital.

Working capital. You were referring to slide number...

Working capital for Q3, Q4?

Yes, Markus, can we go back to the slide?

Yes.

Q3 and Q4, that is there. Yes, we have several impacts here, for sure, since it's also year-end closing, also devaluation or reevaluation of inventories, for example, and as well, of course, a tight working capital management and our ambition, especially in the inventory level, but also in accounts receivables always is to try to move towards the optimum, which you mainly achieve towards the end of the year, for the year-end closing. So we have managed by the second quarter of this year to be very close to the low year-end closing of the fourth quarter of last year.

If your question also goes forward to the end of this year, then I can tell you that our ambition is to have further reductions from working capital management compared to the second quarter of this year.

So next question from Maxime, please.

Good. So just one question left on my side. So it's a general question around tariffs. So there was a nonpaper initiative towards the commission from France, but supported by a majority of European states published last July asking for a series of measures providing for drastic cuts in import market share to just 15% for flat, even down to 5% for long products. And curiously enough, it was not supported by Germany. So why do you think Germany is standing against the measure, at least not supporting it? And don't you feel your major challenge is rather convincing the German government rather than the European Union to put in place better defense?

Well, first of all, we absolutely embrace the nonpaper that has been issued by France. And yes, there's a lot of support for that nonpaper from other European countries, which is good. Still it has not been adopted in Brussels. So we still have some work to be done there as well. However, your comment is right. Germany has not officially supported that nonpaper. However, there is a lot of support for elements of that paper also from the German government.

It is more of a sort of formal and regulatory reason why they don't embrace the full nonpaper, but rather elements of it, which has to do with a different view on WTO rules than the French government has. So it is not that the German government does not support the content. They absolutely support the content. It is more -- at least this is sort of what I get to know from talking to policymakers in Berlin, it is rather the different view on WTO conformity and rules that brings the German government to not officially embrace that nonpaper in its totality.

Okay. So you don't feel they are favoring the interests of downstream consumers such as carmakers rather than your interests and those of the steelmaking industry at large. This is not the...

Well, of course, as France, Germany has to balance the interests of different important industries and certainly, car manufacturing and all the industries around are an important industry for Germany. However, it is also notably new that even other industries like the [ pharma ] is now very clearly also supporting elements of what the nonpaper includes when it comes to tariffs and to import barriers for not only steel but also steel-intensive goods. So you see that there is also an industrial shift in Germany with a view on how to look upon the elements of the nonpaper.

Then what I see from here, the last question from Milos, please.

Just one question. What is the current level of committed unused credit lines? And what are their maturities?

Unused credit lines, I can tell you that our major credit line from our syndicated loan for the cash side as of today is undrawn.

And maturity?

Yes, the maturity of the syndicated loan is mid of 2029, and we are expecting the final banks these days to give us the feedback on the last prolongation until mid of 2030.

Just one follow-up question, please. What is the volume of the syndicated facility?

Altogether, it's slightly above EUR 1 billion. And cash-wise, because we have the advance side and we have the cash side, it's slightly below EUR 700 million.

Okay. If there are no further questions, then we'd like to thank you for your interest, for your participation. And okay, I see a question from Bastian, please.

Just a quick one on the KHS Technology business. You've got a very strong order intake this quarter. Can you elaborate a little bit more? Is it one specific big order? Or it's like a broad improvement in the demand on the pipe?

Yes, so Bastian, what I can disclose here is it is predominantly on our Plasmax technology. So as I mentioned earlier in the call, Plasmax is really taking off. So we are able to convince our customers that Plasmax is a future technology for them. Hence, strong order intake on that technology.

Thank you for your participation. If there are any questions after the conference, please do not hesitate to call us. Otherwise, we'll talk to you in November at the latest, I would guess.

Yes. Thank you very much for your participation, for your questions, for your interest, and stay tuned on Salzgitter. Thank you.

Thank you. Bye.