ThyssenKrupp Aktie

Hello, everyone. This is Andreas Trösch from Investor Relations. Also on behalf of my entire team, I wish you a very warm welcome to our conference call on the first half year results '25/'26. With me in the room are our CEO, Miguel Lopez; and our CFO, Dr. Axel Hamann, and also my colleagues from the IR team. Before I hand over to the CEO and CFO for their presentations, some housekeeping. All the documents, as usual, for this call are available in the IR section on the website. The call will be recorded, and a replay will be available shortly after the call. After the presentations, there will be the usual Q&A session for our analysts. [Operator Instructions]

And with that, I would like to hand over to our CEO, Miguel Lopez.

Thank you, Andreas, and hello, everyone. Welcome to our quarter 2 conference call. As usual, I would like to give you a concise management summary for the second quarter of fiscal year '25/'26, covering our performance, our portfolio progress under ACES 2030 and the key milestones with regard to our green transformation efforts. Let me start with some examples for our portfolio efforts under ACES 2030. At headquarters, we have started the transformation towards the financial holding structure, aiming to be finalized and fully effective by 2030 at the latest. This goes hand-in-hand with a declining cost base.

At Materials Services, we are fully focused on capital market readiness, including early-stage marketing activities to create awareness for the value and growth potential of that segment. At Steel Europe, the restructuring is in execution and progressing very well. This will found the basis for a sustainable performance boost and ultimately, an independent business in which thyssenkrupp may retain a minority stake going forward. As you all know, Jindal International Steel and we have mutually agreed to pause talks regarding a potential transaction in light of the improved regulatory environment for the steel industry in Europe as well as our efforts in realigning the segment.

The term sheet for the new HKM shareholder structure agreed in February, it's just one example. At Automotive Technology, we successfully completed the sale of Automation Engineering in March, which is a clear example of disciplined portfolio management and execution. And on TK Elevator, the recent news flows, meaning the Kone announcement to combine the 2 businesses is a proof point for the underlying value of our stake in TK Elevator. As you all know, we are a minority shareholder and are monitoring the upcoming developments closely. I can say we are happy to be part of the game.

Now a few remarks on performance. Overall, we again achieved a significant increase in performance despite continued market headwinds. The impact of our restructuring measures is becoming increasingly visible across the group, and this is strengthening our operational resilience. Based on what we see today, we confirm our outlook for the full fiscal year '25/'26 for EBIT adjusted and free cash flow before M&A. At the same time, the effects of the political and regulatory framework such as CBAM and steel tariffs are not yet fully tangible in our results, but this should provide additional upside going forward.

Last but not least, let's look at green transformation. For me, personally, launching the European Resilience Alliance was definitely a highlight in the recent quarter. European Resilience Alliance is a pan-European CEO-led initiative, bringing together leading industrial companies across the clean hydrogen value chain to accelerate and scale clean hydrogen deployment in Europe. The mission of the European Resilience Alliance is to advance Europe's industrial decarbonization and resilience by producing its own low-carbon fuels, industrial input materials and products. European Resilience Alliance aims to mobilize a unified coalition for policy and bankability across the value chain as well as to build scalable markets, clusters and cross-border corridors to promote scale and self-reliance.

Another highlight comes from Steel Europe, which is to start supplying CO2-reduced bluemint steel to BMW from 2026 for the use in series production. In parallel, the DRI plant construction continues with full commitment as it remains central to our pathway towards green steelmaking in the future. In addition, Uhde was selected for a biomass to methanol technology integration study in Canada, reinforcing the momentum and relevance of our technology portfolio in the global transition.

To conclude, we are improving performance through restructuring, advancing ACES 2030 through concrete portfolio actions and converting our green transformation strategy into real industrial progress. These 3 elements reinforce one another. They strengthen our foundation today while building the growth platform for tomorrow.

And now, Axel, the stage is yours for the financial section.

Thanks, Miguel. And let me turn to the financial overview for the second quarter. In a continued challenging market environment, our strict performance management is once again delivering tangible results. We continue to execute our OpEx measures with discipline and the impact is visible in our performance. At the same time, we saw again lower sales, but we're able to more than offset that pressure in terms of earnings through active performance management and cost control. We're also making strong progress on workforce reduction. Year-to-date, our headcount is down by approximately 2,000 FTEs.

Let's have a look into some details. In the second quarter, sales came in at EUR 8.4 billion. That's a decline of 2% year-over-year, leading to a 6-month drop in sales of minus 5%. However, adjusting for currency effects, we even saw a plus 1% increase in the second quarter and the respective 6-month decline of minus 2%. EBIT adjusted significantly increased to EUR 198 million in Q2, which is EUR 179 million above last year's level. 6-month EBIT adjusted consequently stands at EUR 409 million.

Net income. In the second quarter, net income was slightly negative with minus EUR 11 million. In light of the restructuring expenses, provisions at Steel Europe of approximately EUR 400 million in the first quarter, net income in the first 6 months is minus EUR 345 million. In terms of free cash flow before M&A, we saw the typical cyclicality in the first half of the year. We are very confident that this pattern will reverse in the second half, especially in the fourth quarter as seasonal effects unwind.

The second quarter came in with minus EUR 327 million, leading to a 6-month figure of minus EUR 1.8 billion. Consequently, the cash flow development led to a decrease in our net cash position, which now stands at EUR 2.8 billion. That's still a solid level that will again increase throughout the fiscal year, especially on the back of an expected strong fourth quarter cash flow.

Looking ahead, like Miguel already mentioned, there's also a realistic upside potential if conditions for the European steel industry improve, including, for example, the effects of import quotas and tariffs. At the same time, I want to be clear about the challenges. The overall economic outlook remains difficult to estimate and macro uncertainty is rising, including the continued tensions in the Middle East and the war in Iran. Demand is still weak across most customer groups and regions. However, our overall message is straightforward. We're executing strongly on performance management, preserving balance sheet strength and positioning ourselves for potential upside while staying realistic about the macro and demand environment.

Turning to the next slide. This provides a high-level view of sales and EBIT adjusted development in the second quarter. Starting with sales, demand remained uneven across end markets. On the one hand side, we saw a pleasant increase at Materials Services or Marine Systems. On the other hand, we saw declines, especially at Decarbon Technologies, but also at Automotive Technology and Steel Europe.

Let's move to EBIT adjusted. Key message here is that performance improved across almost all segments. You can see that the year-over-year development is clearly positive and that improvement is the result of strict performance management. In particular, our efficiency measures continue to take effect through the quarter, and we also benefited from higher price levels. For example, at Materials Services and a lower cost base at Steel Europe. So we are improving profitability through execution, and we are protecting our margins through discipline.

Let's turn to our segments, Automotive Technology. The performance improved year-over-year with restructuring and internal countermeasures clearly flowing through to earnings. On the top line, demand remained persistently soft and currency was a headwind. That said, we saw pockets of resilience with growth in camshaft and forged component businesses, partly offsetting the broader weakness.

With regard to earnings, profitability increased meaningfully. The key positives here were restructuring effects, lower personnel expenses and operational measures such as volume, compensation and efficiency initiatives. These were partly offset by the sales decline, higher freight costs and negative currency effects. Business cash flow improved versus last year, mainly driven by lower net working capital and lower invest, but still a negative figure, especially in light of restructuring cash out, which are, however, below the prior year.

Turning to Decarbon Technologies. At DT, we saw positive order development in the second quarter, particularly in our water electrolysis business. At the same time, however, we continue to experience some project postponements from customers in the chemical plant business, which still is limiting momentum in that area. Main driver of the sales decline is the water electrolysis business with lower order intake levels in the past and some technical sales effects.

Adjusted EBIT declined in the second quarter, mainly due to increased project-related expenses in the water electrolysis business that were only partly offset by a positive onetime effect at the chemicals business. In addition, DT benefited from performance measures and efficiency gains, including restructuring and purchasing optimization. Last KPI on this slide is business cash flow, which declined following lower earnings and adverse changes in project payment profiles.

Let's take a look at Materials Services. At Materials Services, earnings increased significantly year-over-year, supported by a favorable market environment, especially in North America, with Europe also contributing. Sales increased across distribution and direct-to-customer businesses as well as automotive-related service centers. However, shipments were significantly lower year-over-year, mainly in the direct-to-customer business. EBIT adjusted significantly increased, meaning all businesses improved earnings with North America showing the strongest uplift due to the favorable market backdrop. Business cash flow was higher year-over-year, mainly due to higher earnings and lower investments.

Let's turn to Steel Europe. Steel Europe delivered a further improvement in earnings despite a difficult market environment, characterized by low price levels and weak demand in selected end markets, but with recently increased spot prices. However, overall shipments increased by around 2% year-over-year, driven by higher volumes from automotive and industrial customers, demonstrating a resilient underlying demand. This positive volume development was partly offset by ongoing challenges in packaging steel and electrical steel, which continue to be affected by global market pressures.

In the second quarter, the significant EBIT adjusted improvement was mainly driven by the following: more favorable raw material prices, especially on the input side, APEX and efficiency measures, including cost discipline, productivity gains and continuous improvement programs. These measures more than compensated for weaker pricing environment on the sales side. The business free cash flow showed a notable improvement in the second quarter. That improvement was achieved despite higher investments, supported mainly by a release of net working capital, particularly through inventory reduction.

Last but not least, Marine Systems. As usual, I will only briefly comment on Marine Systems as all details have already been presented yesterday. Important is that overall, we saw ongoing strong demand for defense products and the order backlog of Marine Systems stands now at a record level of EUR 20 billion.

Let's turn to the EBIT adjusted to net income bridge that again indicates that we are in a transition period. Looking at special items, we saw restructuring expenses, mainly at Decarbon Technologies and Automotive Technology as well as disposal losses, for instance, in connection with the sale of Automation Engineering within our Automotive group. The remaining positions are rather unspectacular and straightforward. Overall, that led to a slightly negative net income.

Now let's take a look at the way from net income to free cash flow before M&A. As you can see, in the second quarter, we did not face any material net working capital effects, also an outcome of our discipline in terms of capital allocation. The remaining positions, meaning cash flow from invest and our M&A and lease adjustments are also rather straightforward with Steel Europe as usually posting the biggest shares in investments.

Let's now have a closer look to our outlook for the remaining year. Miguel has already mentioned that we confirm our group guidance for EBIT adjusted and free cash flow before M&A, but also for net income. In detail, the group guidance is as follows. We expect sales in the range of minus 3% to 0% compared to the previous year. The lowered range is mainly driven by adjustments at Decarbon Technologies and Steel Europe as a result of referred sales recognition that refers to DT and of a changed product mix that is at Steel Europe.

The other KPIs remain unchanged. One remark on investments that also affect free cash flow before M&A. Overall, we keep being very cautious with investments, meaning an orientation clearly towards the lower end of our guided range of EUR 1.4 billion to EUR 1.6 billion.

And with that, Miguel, over to you again.

Thank you, Axel. Before we come to our Q&A, I would like to remind you of our strategic outlook. The overall key message is clear. Big decisions are behind us. Now it's about disciplined execution and implementation. And today, we gave you an update on where we stand. As you all know, we are in the process of developing thyssenkrupp into a lean financial holding company. By doing so, we will strengthen the independence of our segments and increase their accountability as well as entrepreneurial freedom.

I'm convinced that this will also encourage innovation and unlock additional growth prospects. I'm also convinced that this approach will ultimately translate into additional value for our shareholders. And by working with full steam towards the capital market readiness of Materials Services, we make sure that the capital market is aware of the value and growth potential of that segment. As you all know, the very successful spin-off of TKMS might be a blueprint for things to come. We will keep you updated. And with that, we are at the end of today's presentation. Thank you all for your continued interest and trust. With that, we are happy to take your questions.

Andreas, back to you.

Thank you, Miguel. [Operator Instructions] The first question comes today from Boris Bourdet.

I will have 3 questions. The first is on Jindal. After the discussions that have been paused, do you see a potential for alternative offers? We heard about the CEO of Flacks Group pointing to some interest where in the case talks with Jindal would be halted. So that's the first question. Then on TKE, early calculations point to a EUR 1 billion cash in for the group by Q2 '27. What would be the use of cash that you would anticipate?

And then looking at the guidance, I was just wondering whether there is any specific reason why you don't upgrade the guidance. You're already at more than EUR 400 million for H1. Guidance is EUR 500 million to EUR 900 million. So I guess you might be more comfortable with the upper end of that guidance based on the achievements so far, but happy to get any remarks on that.

Yes. Thank you, Boris, for your questions. So first one, we're talking about Steel, obviously, we have 3 major events that were, to us, very important. And that was the first -- the agreement on the restructuring program, which we concluded with the union, IG Metall in December. The second one was the agreement with Salzgitter on HKM, which was in March. And the third major event in front of us, this one, is that we will see the implementation of additional tariffs, increase of tariffs and a reduction of quota for steel imports in the European Union.

All these 3 events, we mentioned that before, have been, of course, taking us to look at what kind of value we might expect in Steel. And this obviously is motivating us very much to continue the restructuring effort ourselves. So this is in general, Steel. Of course, if there would be other offers coming, we will look to each and every other offer. But the priority is very clear. We want to create value, and we want to execute the measures that we have been agreeing on defining and implement those.

All right. Boris, your question relating to our Elevator stake and our guidance. First of all, Elevator, you've mentioned EUR 1 billion in cash. I'd say it's a little bit optimistic. If you do the math on our 16% stake and the reported EUR 5 billion share in cash. But nevertheless, we do expect some cash after the closing of the deal. That is approximately 12 to 18 months.

Having said that, it does improve our liquidity. It would improve our liquidity and it would add some flexibility. But at this point in time, no concrete plans yet what we're going to do with that potential inflow of cash. Your third question, the adjusted EBIT guidance. First of all, the fact that we have left the guidance unchanged is probably owed due to the uncertainties on a macro level, let me put it that way. However, very important to understand is that we would see ourselves at the upper end of that range. I hope that makes sense for you.

And then the next question comes from Bastian Synagowitz.

Maybe my first question is on Automotive, where you seem to be doing quite well despite, I guess, all of the challenges out there. Your EBIT and margins have improved despite the contraction on the top line. I guess now your order intake is at least up a little, which is good to see. But there's still a further significant run rate improvement, which you need to hit the low end of the guidance range. So I just wanted to follow up here. Is this step-up which you're implying with your guidance pretty much driven by just cost cutting? That is my first question.

Yes, Bastian. Well, 2 points. First of all, we do see, let's say, increasing levels of impact of our restructuring. You may remember that we talked a lot about our touchdown program at Automotive. So that is kicking in. And towards the second half of the year, which is usual for the industry, we will also consider one or the other claims management that is also due towards the second half of the year. So that makes us confident that we will still meet our guidance also for Automotive.

Okay. Then my next one is a follow-up on Steel where, I guess you're rightly growing more confident on the market outlook, and there's obviously a lot of factors supporting it. But just with the Jindal deal not happening, the business is obviously becoming at least a bit more relevant to you again in the short term until you separate it. Now I guess for the last 2 years, the business has been draining cash and I guess it will probably also keep doing so this year with all of the restructuring and maybe some working capital needs you may have as well.

But then there are the market tailwinds. There's obviously a restructuring program, which is unprecedented in scale. So is the previous EUR 100 EBITDA per tonne margin level, which I guess was the previous margin target still what you're aiming for? Have your aspiration levels been rising against that? And then also, I guess, is there any guidance you're happy to give at this point when you do expect Steel to become a net contributor of cash again?

Yes. Bastian, first of all, Steel has always been relevant to us as a group. And you rightfully mentioned, we currently do see some tailwinds also because of regulatory effects. So that makes us optimistic that we are -- within the next 3 years, as we've stated previously, we are further improving our business and would also expect to become cash positive within that time frame.

So within the next 2 years, basically, is what you're planning for?

Two to three years.

Yes. Got you. Okay. Great. Then very last question, also coming back to the Elevator stake, but more actually with regards to the equity rather than the cash, I guess you will receive a more liquid version of the equity. So what are your plans here? Do you aim to keep that as retaining stake in Kone? There's obviously lockup, but obviously thinking more beyond. May you use the proceeds to maybe also fund part of the pensions? Is that an option? Or would you even consider to distribute the shares to the thyssenkrupp AG investors ultimately very similar to what you have done with TKMS already and what you're planning for with TK MX in parts?

Yes. I do understand the curiosity. But at this point in time, we have not yet stated or formed any opinion what to do with the increased liquidity. And as said, it's going to improve our -- it's going to increase our flexibility and let's cross the bridge once we get there. And as said, it's going to require 12 to 18 months until closing. And it will certainly, let's say, help us and give us more stability in our anticipated transformation.

[Operator Instructions] There is one more question from Krishan Agarwal.

Yes. Can you hear me?

Yes, now we hear you.

Yes. So quick clarification on the Jindal sort of process getting paused. So has there been a disagreement between the parties in the sense that outlook for the steel in Europe has improved and hence, the -- any kind of a price expectation from the thyssenkrupp, which Jindal was unwilling to move up? Can you help us give some more granularity in the where the process sort of, came to a situation where you agreed to pause it? And is it kind of a permanent pause in the sense that you are sort of on your own ways or you can sort of reassemble at some point of time?

Thank you for the question. Obviously, by implementing and getting also major decisions on these 3 topics. Obviously, the first 2 that I described before, so the agreement for restructuring, this is in our hands. So meaning there, the cost situation will be improved. Same will happen over time with what we negotiated with HKM with Salzgitter on HKM. And of course, the external factor is more something that we need to see how it will be effective. But the first 2 ones are very concrete cost reduction that we have in our own hands.

Having said this, obviously, then the valuation changed. The view on the value of the business is changing by all these 3 measures, and that was what caused the decision. So we have a very, very good relationship with the Jindal family, and we agreed that we pause because, as you know, always, investors are looking for more the past performance when valuing businesses and they adopt the show-me behavior.

And in this case, with past performance, as we are implementing all the measures, this is not reflecting what the real value of the business constitutes. So the length of the pause is not important. So it is, of course, us implementing measures and seeing the results in the bottom line, but also in the top line.

And a follow-up on the steel business. I mean, Miguel, you came into the thyssenkrupp when the markets were down, steel markets were looking down and then now the cycle sort of is turning up. But then if we were to look at the steel business in the previous cycle when the prices sort of started moving up, thyssenkrupp somehow has lagged into those price realization because of the contract structure.

Now have you had a time to sit down with the steel team marketing managers and had that hard conversation that, okay, look, we have lost out on the previous price appreciation under the steel business because we had good relationship with our customers. How do we rewrite those contracts in the current market so that we benefit from the rising prices compared to what we have sacrificed into the last cycle?

Well, as you can imagine, the discussion on operational matters is and also on strategic matters is ongoing. This is very clear. And I do believe that our steel management will be implementing the right things in order to get us where we belong.

And we have a follow-up question from Boris Bourdet.

Yes. Two follow-ups. The first is on HKM. So do we -- looking at the whole provision for restructuring your planning for the year, are we still looking at something like EUR 700 million, EUR 800 million? That's the first question. And the second is on Materials Services. Would you be able to share some early feedback you received so far on the operation and maybe hint at the timing?

All right. Maybe, Boris, let me start with HKM and you've mentioned provisions. As you are aware, we have not yet closed our discussions with Salzgitter, but are on a very, let's say, promising way. In terms of provisions, the number you've mentioned, I'd consider too high. We have guided in the past a low to mid-3-digit million euro number, and that is still the case. That is with regard to provisions at HKM. And as said, still to come as we have not yet closed the transaction with Salzgitter.

On the Materials Services piece, I believe the markets are motivated to see there a next step in this regard. So we get positive feedback from -- around a next step thinking.

The EUR 700 million to EUR 800 million that was referring to the whole restructuring package for Steel, including HKM. So.

Okay. That is something, yes -- Bastian (sic) [ Boris ], that is something I can't confirm at the lower end.

All right. Thank you very much all. There seem to be no further questions. If there are further questions, you can always reach the Investor Relations team. Thanks for participating. Have a wonderful day. Speak to you soon. Thank you.

Hello, everyone. This is Andreas Trosch from Investor Relations thyssenkrupp. Also on behalf of my entire team, I wish you a very warm welcome to our conference call on the first quarter results '25-'26.

With me on the call are our CEO, Miguel Lopez; and our CFO, Axel Hamann. Before I hand over to the CEO and CFO for their presentations, I have some housekeeping. All the documents for this call are available in the IR section on the website. The call will be recorded, and a replay will be available shortly after the call.

After the presentations, there will be the usual Q&A session for our analysts. we use Microsoft Teams for the call [Operator Instructions].

With that, I would like to hand over to our CEO, Miguel Lopez.

Thank you, Andreas, and hello, everyone. Welcome to our first conference call in the current fiscal year. Let me start with an overview of our management priorities. First of all, portfolio.

In terms of our strategic transformation, we continue to execute ACES 2030 with full focus also in order to establish thyssenkrupp as a lean financial holding company. With the successful spin-off of TKMS in October, a major milestone on our path towards this target picture, we created significant value for our shareholders. That is our clear ambition also for any portfolio actions ahead.

For Materials Services, we push ahead for capital market readiness and their respective stand-alone setup. At Automotive Technology, we defined and implemented a new structure with clear focus on the core businesses. Moreover, we also initiated the sale of the noncore business unit, Automation Engineering, in November.

At Steel Europe, negotiations with Jindal about the majority holding are ongoing and the respective due diligence is on its way. And let me remind you that we have reached a collective restructuring agreement with IG Metall Union in December, an historic milestone for thyssenkrupp. And in addition, actually another very important historical milestone just from last week, we have agreed on a term sheet on the new shareholder structure of HKM. Salzgitter plans to continue to operate HKM as the sole shareholder from June 1, 2026 onwards. That also means that the slab supply to thyssenkrupp Steel will already end in 2028.

Regarding performance, Q1 marks a confirming start to the new financial year, even though our markets remain challenging across many of our customers' industries. Therefore, we confirm our group guidance for fiscal year '25, '26. On a relevant note, the likely positive implications from current political initiatives in Europe, such as CBAM or steel tariffs have not yet translated into measurable tangible effects, but they do present upside potential for our businesses going forward. On the green transformation side, we continue to build momentum.

Let's start with the recent announcement. Uniper and Uhde have signed a framework agreement on ammonia cracking technology. The agreement covers up to 6 large-scale plants with a total capacity of 7,200 metric tonnes of ammonia per day. In addition, construction of the DRI plant at Steel Europe is moving ahead with full commitment.

More from an ESG perspective, CDP -- so Carbon Disclosure Project, again honored thyssenkrupp for transparency and climate protection for the 10th consecutive year. With this result, thyssenkrupp has once again secured a place on the annual Climate A List, make it one of only 877 companies internationally with this distinction, including 34 companies from Germany.

To summarize, a difficult market environment persists, but we are executing our strategy with discipline, reshaping our portfolio and improving our operational performance. Plus, we are confirming our full year guidance.

Axel, the stage is yours for the financial section.

Thanks, Miguel. Hello, everyone. This is Axel. Yes, let me turn now to the financial overview for the first quarter. Despite the macro environment you just have heard about, we achieved a promising and confirming start into the new fiscal year.

We've increased our EBIT adjusted despite the top line headwinds, which continues to serve as a proof point that our internal efforts and the respective performance management are paying off. While sales decreased to EUR 7.2 billion, that means an 8% decline year-over-year. Our EBIT adjusted increased to EUR 211 million, which is EUR 20 million above last year's level. Net income came in at minus EUR 334 million, mainly

[Audio Gap]

We have experienced some technical issues here. Apologies for that.

I believe that I was talking about the net income, which came in at minus EUR 334 million. And I explained that this was on the back of the expected restructuring expenses at Steel Europe.

Now let me now turn to free cash flow. And as already flagged in our last conference call, you see a typical seasonal pattern here at the beginning of the fiscal year. And that's what you see at the minus EUR 1.5 billion free cash flow before M&A. And this is important to get it right, and I want to highlight it right here.

Our free cash flow before M&A guidance for the entire year remains unchanged as we expect a reversal of this Q1 pattern in the course of the fiscal year, particularly in the second half. So that cash flow development led to a decrease in our net cash position. It's now at EUR 3.2 billion. That is still a very solid level that will also recover throughout the fiscal year as free cash flow before M&A is improving.

Also some operational comments. We see tangible results from our restructuring and performance initiatives. Workforce reduction is progressing as planned, with FTE down by around 1,100 year-to-date, first quarter, 1 quarter. And a bit more from a broader perspective, the future economic development remains challenging overall from our point of view. And we do continue to face weak customer demand, particularly in Europe, but also uncertain upside potential that is related to the political framework in Europe.

Now first quarter sales and EBIT adjusted development, which you see here in that chart. Most segments managed to improve or at least stabilize their performance despite weak demand conditions. I've already mentioned that the sales decline of more than EUR 600 million is more than offset in our EBIT adjusted. This is again a pretty clear proof point for our increased underlying resilience.

With regard to sales, we saw declines of stagnation across all segments, with the decline mainly driven by three segments. First, Decarbon Technologies, still facing hesitant markets and some project postponements on the customer side. Then Material Services and Steel Europe, they both showed lower demand that, for example, you can see also at the trading business at our Materials Services segment. In terms of EBIT adjusted, we saw a number of improvements across the group with Steel Europe posting the biggest increase, which was also due to lower raw materials prices and some efficiency gains. Looking at DT, Decarbon Technologies, the negative first quarter resulted from lower sales and project-related additional costs at the cement business.

Let's now talk a little bit about Automotive Technology. Overall, challenging market environment, soft demand levels also in Q1. Total, we had a sales decline of around about 3% year-over-year. However, if you adjust for the negative currency effects, sales were around about on prior year's level. Here, we experienced a growth in the serial business that was overshadowed by the declines in the project business as well as from our business unit, Springs & Stabilizers.

Let's take a look at earnings. We saw per performance increase. EBIT adjusted came in at EUR 20 million. That's up by EUR 8 million year-over-year. So what we can see is here that our internal countermeasures such as volume compensations from customers, savings from restructuring, and efficiency initiatives are in place and are working. Ultimately, these efforts could more than offset the top line and currency headwinds.

Let's look at -- business cash flow came in again in negative territory at around about minus EUR 70 million. That's mainly driven by restructuring cash outs and net working capital changes as expected.

Let's turn to Decarbon Technologies. Overall, we continue to see an ongoing hesitant market environment with a number of project deferrals on the customer side. That translated into weak order intake and therefore, declining sales of minus 19% in our first quarter, especially in the water electrolyzers business at thyssenkrupp nucera and in the new build businesses at Chemicals. These lower sales led to the decrease of EBIT adjusted by minus EUR 33 million to minus EUR 16 million. In addition, some project-related additional costs at Polysius impacted that result. Performance measures and efficiency gains supported earnings, however, could not compensate the decrease. Also, the cash flow was hit by missing sales. The drop in business cash flow to minus EUR 162 million was driven by the lower top line as well as negative cash profiles in our project business at DT.

Let's turn to Materials Services. Material Services delivered higher earnings despite a challenging market environment, particularly in Europe. Sales declined here by minus 6% year-over-year, mainly due to weaker performance in the direct-to-customer business, which also led to significantly lower shipments. At the same time, distribution and processing businesses in North America showed some solid growth.

EBIT adjusted came in at EUR 50 million, with a strong performance of our processing business, especially in North America, more than offsetting the decline in European distribution and also supported by APEX cost reduction and efficiency measures.

Business cash flow. Business cash flow was down year-over-year, reflecting the before mentioned typical seasonality with the net working capital buildup at the start of the fiscal year, also influenced by higher price levels that we particularly see at some commodities.

Steel Europe. So for Steel, the market conditions in Europe remain challenging, with, for example, demand being still quite reluctant. Consequently, sales decreased by minus 10% and shipments fell by 4%. However, we also saw some higher volumes from our automotive customers and from steel service centers.

Let's take a look at EBIT adjusted. Despite the lower top line, EBIT adjusted at Steel increased to EUR 216 million. That is due to more favorable raw material prices and also efficiency measures that was supporting the positive earnings development. Business cash flow at Steel decreased year-over-year, also, as mentioned, driven by a seasonal buildup of net working capital and here, mainly receivables and payables.

Last but not least, Marine Systems, TKMS. Overall, we see ongoing strong demand for defense products across the product range. Order backlog continues to be impressive, stands now at a record level of EUR 18.7 billion. And so here only a couple of brief comments on Marine as a segment of thyssenkrupp because all operational details are available in the reporting of TKMS as of yesterday as they already conducted their earnings call. Important to mention is here for Marine Systems, all relevant will develop in line with our outlook, including the updated sales guidance.

Now let's take a look at our EBIT adjusted to net income bridge. You can see here that we are also in a transition period. Let's take a special look at the special items.

The first and largest portion of restructuring expenses of EUR 400 million, more specifically EUR 401 million at Steel Europe is now included in our first quarter, and the remainder will be booked in the course of the financial year '25-'26. In addition, we faced some impairment losses at Automotive Technology in connection with the signing of the sale of our business unit Automation Engineering. The remaining positions are rather straightforward. Overall, we saw a negative net income of EUR 334 million.

Now what do we get from net income to our free cash flow before M&A. In essence, the delta between net income and free cash flow before M&A is the aforementioned seasonal net working capital swing, particularly within our materials businesses that will, as mentioned, reverse over the course of the fiscal year, particularly in the second half. Remaining positions, meaning cash flow from invest and M&A and these adjustments are also straightforward. So it's really -- it's the seasonal net working capital pattern.

Again, also very important for me to highlight, we do confirm our free cash flow before M&A guidance for the entire year, which is a good segue to the next chart. So guidance. Miguel and also myself have already stressed that we confirm our group guidance. And that means in particularly, we expect sales in the range of minus 2% to plus 1% compared to prior year, so unchanged. EBIT adjusted, as previously guided, will end in the range between EUR 500 million and EUR 900 million.

Free cash flow before M&A is expected to come in between minus EUR 600 million and minus EUR 300 million despite our Q1, as explained, including expected cash outflows from restructuring of up to EUR 350 million. So the EUR 350 million cash outflows from restructuring are already included in our guidance of minus EUR 600 million to minus EUR 300 million.

Looking at investments, obviously, also a driver of free cash flow before M&A. Overall, we are pretty cautious with investments. And that means that we're orientating ourselves rather to the lower end of our guidance of EUR 1.4 billion to EUR 1.6 billion. Here, similar to the last financial year, there might be a possible revisit over the remainder of the year as we see clearer towards the end of the year.

Last but not least, net income. Here, our unchanged guidance, minus EUR 800 million to minus EUR 400 million, including restructuring expenses, mainly at Steel Europe. So if you look at the segments, there are a couple of smaller changes, but those do balance out on a group perspective. For example, on sales, automotive -- the guidance now takes into account the initiated sale of Automation Engineering, the business unit, and we have now better or higher sales expectations for Marine Systems. But overall, group guidance is confirmed for all KPIs.

With that, Miguel, I'd say it's up to you again.

Thank you very much, Axel. Before we come to our Q&A, I would like to highlight some reflections and outline the way forward. That slide looks familiar to you. That's why I will keep it short.

The overall key message is big decisions are behind us. Now it's about disciplined execution and implementation. As you all know, we are developing thyssenkrupp into a lean financial holding company. By doing so, we will strengthen the independence of our segments and increase their accountability as well as entrepreneurial freedom. I'm convinced that this will also encourage innovation and unlock additional growth prospects. I'm also convinced that this approach will ultimately translate into additional value for our shareholders. And by working with full steam towards the capital market readiness of Materials Services, we make sure that this may become an option to further develop thyssenkrupp towards our strategic goal of a financial holding.

With that, we are at the end of today's presentation. Thank you all for your continued interest and trust. We are now ready to take your questions. Andreas, back to you.

Thank you very much, Miguel and Axel. As mentioned, we are now ready to take your questions, and we are opening the Q&A session for our analysts.

The first one in line is Boris.

I have three. So the first one is on the general discussions. There were recent rumors that [ Salz ] might be interested also in the steel business. So I would be interested to get an update on the process. Where are you? And what's according to your knowledge, the most likely time line for a decision?

Maybe the second one that would be on the political support you mentioned during the presentation, CBAM and TRQ and others. You pointed out the fact that there could be some upside going forward. So does your current guidance include those supports? And if not, what could be the potential uplift?

The last one is on Steel Europe, pretty decent margin over the period in Q1. So I would be interested to know how much is the contribution from the energy compensation in Germany this quarter?

Boris, for your questions -- I'll start with the first one. So we are in the due diligence process with Jindal Group, intense conversations. Of course, you always understand that we cannot do any kind of statements around timing. And of course, it's also important to understand that the highlight of last week has been HKM. So the agreement that Salzgitter will continue the company on its own. And of course, all this influences, of course, also the due diligence process because that's a new factor coming now in and certainly positive.

So discussions ongoing, and we will let you know as soon as something is more concrete to be reported.

Yes, it is expected -- your second question, it is expected that we will see improved, pricing after the tariffs will be introduced in Europe. And also the CBAM -- concrete CBAM actions will, I believe, also help. We will not see anything this fiscal year around it because we expect the European Union to decide on the tariffs around May, June. And until then everything is really getting into the orders, we will see an impact for sure next fiscal year. But the likelihood that we see this fiscal year some positive effects already in our view is, for the time being, very limited.

For the third question, I hand over to Axel.

Thanks, Miguel. Yes, Boris, you've asked for the electric compensation and what the share is for the, let's say, increase also in EBIT. It's basically 3 components that help us increasing the EBIT. It's raw material prices, it's efficiency gains. And as you said, it's the electrical price compensation, and that is a bit higher than last year. I hope that gives you an indication.

Can you just remind us how much that was last year?

That was a low 3-digit million euro number.

Now the next question comes from Jason Fairclough. If not, then we try the next in line and come back to Jason in a second.

Next in line is Alain Gabriel.

A couple of questions. On HKM, how do you see the cash outflows relating to the sale potentially being phased over the course of this year and beyond? That's the first question.

The second one is still on HKM. Can you give us some indication of the pro forma Steel Europe EBITDA without HKM, potentially for '25 or even Q1 '26, just to help us quantify the impact of HKM or even if it's easier, if you can give us what would your guidance have been ex-HKM for '25, '26?

All right. Thanks. First of all, cash outflow or I should say, potential cash outflow for HKM, a term sheet has been signed. And as we stated, it's going to be a low to mid-3-digit million euro number.

The cash outflow pattern, what I can already provide you with as of now, it's going to be a minor part of this year, and we're going to stretch that out over at least 3 years. So you would see a sequential cash out, and we're going to start with a smaller part in this year in case we're going to close the deal, and that is expected for June of this year.

With regard to guidance for HKM, we do not disclose, let's say, individual guidance for that business as part of our Steel segment.

But can you give us some indication if it's a positive EBITDA or negative EBITDA if we were to strip it out? Or even that you cannot give any color?

Well, there's still a couple of variables also to be negotiated in terms of supply from HKM. So it's really -- it's too early to tell.

Now let's try Jason again, Jason Fairclough. Unmute yourself.

All right. Well then, let's try again later.

Now we're switching over to Bastian. Bastian Synagowitz. Can you unmute yourself Bastian?

Maybe firstly, starting off on the strategic plans you have for the Steel business. I guess maybe looking at the broader market, obviously, the -- I guess, the equity market has significantly rerated the valuation of any European steel asset given the very supportive policy backdrop. And if we overlay this with the talks you're currently having on the possible sale of the unit, this must be obviously a very different conversation today versus the talks which you probably had at the very early stage of that process.

So can you confirm that you're basically seeing a positive momentum here in these talks? And -- or is there also a scenario where at least you may potentially crystallize the value of the steel unit in a different way? And has this become more likely? That's my first question.

Obviously, a very relevant strategic question you raised. I mean, it is quite clear that the sentiment, and we have seen that -- you have seen that also in all the steel companies that are publicly listed. So the sentiment has turned into a positive one for the last 4 months. We have seen increases in the share prices of around 50% and more. So there is a clear positive sentiment.

It is also clear that this is due to the tariff situation, as mentioned before, and the limitation also of the import quota for Europe. And of course, the idea of resilience -- and I've been reporting, you remember about the Steel summit with Chancellor Merz and also talks that we had directly with Ursula von der Leyen and her team. So yes, there is a clear positive sentiment here. And of course, that will have, for sure, to get into an input for the conversations with our colleagues from Jindal, no doubt about that.

Maybe just looking also at the recent news around the possible plans to delay the phaseout under the European ETS scheme. I would think that, that must be quite positive news for you as well in terms of like the CapEx perspective of the business. And in that sense, probably in the overall context, probably is another derisking factor for the unit. Would you agree with this?

Yes, there are really good things happening, and this will have quite a different shape in terms of Steel for the future.

Then maybe lastly, one more technical question just on the restructuring costs you're expecting. I think you're now guiding for EUR 700 million to EUR 800 million of restructuring costs in total. Is this only related to Steel? Or does this already include something for the other units as well or maybe even for HKM? Or is this just Steel?

Yes. Let me take that question, Bastian. The vast majority is Steel related. And we've also, let's say, provisioned -- not technically, but planned for some at HKM. And what is also included is a minor part for automotive. So vast majority is Steel.

The HKM portion, however, that does not include the low to mid-3-digit number you were referring to earlier, I suppose? Or does it include that one as well?

It's not too far away, let me put it that way.

All right. Thank you, Bastian and now again, trying Jason.

Look, a couple of quick ones for me. First, I was wondering if you could just give us an update on Elevators. How are you thinking about the value of that stake? And what's the path to releasing that value?

On Material Services, we've talked about this one before, huge working capital in this business. Do you think it's performing the way it needs to? And again, how do you think about releasing value? And Steel, is the vision to sell completely now? Or would you just be looking to sell a 51% stake?

Let me maybe start with Elevator, Jason. You've probably seen currently booked at around about EUR 2 billion. I think there's a certain expectation in the market around, let's say, further developing TKE. So as of now, we're super happy with our share, and we're looking forward what the developments around TKE will be. Obviously, there are some, let's say, talk in the market around IPO. Let's see. We're happy with our share, and we're looking forward how this is going to develop.

With regard to working capital, I think that's something we've touched upon also in the past for Materials Services. Are we happy with the performance? I think we're working towards capital market readiness, let me put it that way. And working capital efficiency is a part of it. And yes, so let's see when that business is going to be capital market ready, and so we will let you know once we're there.

With regard to Steel, it's maybe a question for you, Miguel. If I recall you correctly, it was around whether we're going to sell or whether we intend to sell 100%, or whether we can think of any 50% structure.

Okay. I was having technical problems for 30 seconds. Well, Jason, on your question around what portion of the business is -- of the Steel business is in discussion for selling. We continue to go the direction of to sell the majority of it. That's what is in the discussions with Jindal right now.

Can I just follow up on the Material Services. So it's an interesting phrase you used there, working towards capital market readiness. So should we read from that, that you're considering a potential IPO or sale of that business?

No. I mean it's part of our overall strategy that we want to enable our businesses and then ultimately become a financial holding company. And that would encompass that the segments would eventually be also listed. That's something we've communicated and materials may be one of them. But as I said, no -- final decision not yet taken, but we're working hard on, let's say, getting all ducks in a row.

Okay. Glad we could make it for a third time. Thank you.

[Operator Instructions] Next follow-up question is coming from Alain Gabriel.

A couple of follow-ups. On Steel Europe, you are not too far from the bottom end of your guidance range just with the Q1 numbers. Should we see your full year number as conservative? Or are there any items that you expect to develop over the course of the year that would drag down the margins? That's one.

The second question is on Steel Europe. Can you remind us what are the pension provisions allocated to Steel Europe? And on top of that, what are the other restructuring provisions that are booked as liabilities on your balance sheet for Steel Europe?

Sure. Thank you. First of all, we've touched upon the guidance for steel after that promising start. As said, the reasons are threefold. It's efficiency gains -- it's lower raw material prices, and it's also the electrical price compensation. So I would not rule out at this point in time that we continue to see efficiency gains. And with regard to prices, let's see. But you see me rather, let's say, on the comfortable side, if I look at our guidance range for steel, let me put it that way.

Then pension provisions for Steel should be around EUR 2.4 billion. And with regard to -- I think you also asked around for restructuring provisions, that is something we have guided around a mid- to high 3-digit million euro numbers for this year.

Thank you, Alan, for your questions. There seems to be no more questions currently in the call. If you have more questions, please contact the Investor Relations team, including myself.

So thank you very much for participating in that call, and have a great day. Thanks.

Thanks, everyone. Bye-bye. Bye.

Hello, everyone. This is Andreas Trösch from Investor Relations. Also on behalf of my entire team, I wish you a very warm welcome to our conference call on the full year results '24-'25.

With me in the room are our CEO, Miguel Lopez; and our CFO, Axel Hamann, plus my colleagues from the Investor Relations team.

I have some housekeeping before I hand over to the CEO and CFO for the presentations. All the documents for this call are available in the IR section on the website. The call will be recorded, and a replay will be available shortly after the call. After the presentation, there will be the usual Q&A session for analysts. [Operator Instructions]

And with that, I would like to hand over to our CEO, Miguel Lopez.

Thank you, Andreas, and hello, everyone. Welcome to our conference call for fiscal year '24-'25.

Please let me start with a recap from our key strategic milestones in the recent year.

At last year's conference call, we proclaimed the year of decisions, and we have taken many. The presentation of our new strategic future model, ACES 2030 was one decisive step ahead. ACES 2030 provides the operating framework for our transformation, which we are already implementing with determination and at high speed.

We also successfully listed TKMS by a spin-off on the stock exchange. Other businesses will follow as soon as we have put them in a profitable position that means ready for the capital market.

We are, moreover, negotiating with Jindal Steel about the potential sale of our steel business. This is based on the industrial future concept developed by the Executive Board of Steel Europe, the road map for modern competitive and sustainable steel production. The collective restructuring agreement entered into with IG Metall in the past week is creating the required framework to implement this concept step by step.

The milestones reached so far demonstrate that we are already in the middle of the year of execution and are driving the transformation with all our energy.

Let's now take a look ahead. We have a clear vision for the future. We are realigning the group. The long-term goal is the gradual transition towards stand-alone businesses that are also open to third parties. We are jointly transforming thyssenkrupp into a financial holding company with strong independent entities under the umbrella of thyssenkrupp.

The stand-alone solutions for the segments will significantly strengthen their entrepreneurial freedom and offer them new growth prospects, more decision-making power, greater flexibility to make investment and marketing decisions and individual access to the capital market.

At the same time, the new structure offers increased accountability and more transparency for the businesses. These are both significant levers for improving performance.

Overall, we build stand-alone structures for our segments, subject to their capital market readiness. This comprises not only a forward-looking strategy, but also a convincing performance. In those businesses where a stand-alone solution is not yet possible, we will continue to focus on performance and competitiveness. In this process, we are also realigning the corporate functions in the future headquarters with focus on the financial management of the entire portfolio. This realignment will probably take several years, and we approach it with determination and clear objectives as well as with sound judgment.

Let's now look a little closer at TKMS, our actual first stand-alone business and what we already have achieved there in terms of value crystallization. We have completed the spin-off, unlocking significant value for our thyssenkrupp shareholders.

Please let me remind you about some details of the spin-off. 49% of the TKMS shares were distributed to existing tkAG shareholders, while 51% remain with us as fully consolidated segment. Shareholders of thyssenkrupp received 1 TKMS share for every 20 tkAG shares. TKMS is now from October 20, listed on the Frankfurt Stock Exchange, posting capital market visibility in excess.

And there are also good news from the last week, TKMS will be listed in the MDAX. Within just a few weeks, TKMS has managed to establish itself among the top 90 listed companies on the German Stock Exchange. Overall, this transaction delivered over 14% value creation for thyssenkrupp shareholders on the first day of TKMS trading. On top of the preceding tkAG share price increase of approximately 240% in fiscal year '24-'25.

On our way towards the financial holding company, the TKMS spin-off might serve as a blueprint for the other segments.

And now Axel, please go ahead with your financial section.

Thanks, Miguel. So overall picture upfront. Persistent market headwinds more than offset by straight performance management. We basically saw pretty weak demand across most customer groups and regions throughout the year. In addition, geopolitical uncertainties persisted, for example, from global tariff developments.

With regard to sales, we saw further market induced declines in the fourth quarter, minus 6% and consequently, over the entire fiscal year, around minus 6%, meaning EUR 2.2 billion sales decrease. On top of the minus 7% in the financial year '23-'24, that's even more proof of a solid performance considering a top line drop of almost EUR 5 billion in 2 years, while keeping our EBIT adjusted stable.

Let's talk about EBIT adjusted. Despite the mentioned top line development, we saw a strong fourth quarter with EUR 274 million, leading to a financial year figure of EUR 640 million, an increase of EUR 72 million year-over-year. So the earnings increase is also an outcome of our rigid restructuring efforts. For example, FTE reduction of 4,800 year-to-date and thereof, you can attribute more or less 1,500 to Steel Europe.

Regarding net income, we've ended in positive territory. Fourth quarter benefited significantly from the elevator valuation effects as expected and anticipated. That was EUR 902 million in the fourth quarter, therefore, leading to a quarterly net income of EUR 653 million.

As a reminder, we also saw a negative tax effects of more or less EUR 150 million in the third quarter, resulting from the Marine spin-off in addition to the unfortunately usual overall impairments of approximately EUR 800 million in our financial year '24-'25. Of that EUR 800 million, approximately EUR 600 million are attributed to Steel Europe.

Let's talk about free cash flow before M&A, third year in a row positive with EUR 363 million. That's an increase of EUR 253 million year-over-year, supported by a strong fourth quarter with, let's say, the usual net working capital seasonality pattern and also benefiting from a Marine Systems prepayment that already happened in the first quarter.

So please keep also in mind the financial year '24-'25 free cash flow before M&A also includes the cash out for restructuring of approximately EUR 250 million.

Talking about our net cash position, that's almost EUR 5 billion following the positive cash flow development and for example, the proceeds from the sale of our Electrical Steel India business. So that's a sound basis for all the portfolio topics to achieve the target picture of a financial holding company in the future.

So overall, we've met our updated guidance for sales and EBIT adjusted and net income and free cash flow before M&A came in even slightly better.

So let's talk about sales and EBIT adjusted development. As already mentioned, sales decline of more than EUR 2 billion have been offset in EBIT adjusted. This is again a pretty clear proof of our increasing underlying resilience. That means we tackle what can be tackled by ourselves.

With regard to sales, we saw a decline across almost all segments, except Marine Systems. I'm sure you've heard about that yesterday in the investor call. Lower demand, especially from the automotive sector weighed in on automotive technology, but also on steel and materials in addition to some unfavorable pricing.

EBIT adjusted, lower part of the chart, it's a mixed picture for the different segments, some declines, but also some increases. For example, Decarbon Technologies, that's up by EUR 126 million, also considering negative onetime effects in the prior year. Steel Europe also benefited from a mix of, for example, lower D&A, but also decreased raw material prices as well as some additional restructuring efforts.

Let's come to Automotive Technology. Overall, soft demand, pretty tough market environment that led to declining sales, down by 7% year-over-year. Highlight, obviously, we saw growth at Bilstein, fueled by aftermarket activities. EBIT adjusted market headwinds mitigated to a large extent on the back of internal performance efforts such as restructuring and efficiency initiatives. EBIT adjusted came in at EUR 187 million, down by minus EUR 58 million year-over-year.

So also here, we saw a decline in personnel expenses following our restructuring efforts that was outweighed, unfortunately by lower volumes, underutilization in project businesses as well as some negative onetime effects.

Cash flow ended in positive territory at Automotive. Year-over-year decline, however, in the financial -- in the entire year, mainly driven by our restructuring cash outs.

Let's talk about Decarbon Technologies. Overall, there, we saw an ongoing hesitant market environment with some project deferrals or postponements from our customers. So that translated into a weak order intake and therefore, also declining sales of minus 10% over the entire year, especially that's the case in the new build business and at chemicals and cement plants.

So considering the sale of tk Industries India in the previous year, the organic sales decline was only down by minus 4%. Coming to EBIT adjusted, strong increase of EUR 126 million to EUR 71 million over the entire year '24-'25, almost all businesses with increased contributions, for example, also supported by performance measures and efficiency gains.

In addition, prior year was negatively affected by significant a periodic higher costs in the range of a high 2-digit million euro amount at the cement business. Business cash flow, we saw a pleasant increase of EUR 192 million over the entire financial year. That's due to higher earnings as well as positive cash profiles in the project businesses.

Let's continue with Materials. Also there, we saw challenging market conditions in Europe. Demand and price levels remain pretty weak across our key product groups. And as a result, sales fell by 6% with shipment volumes significantly lower, primarily due to weakness in the direct-to-customer business.

However, North America showed some resilience. That's why we saw some slight growth in the North American distribution business that helped partially offset the downturn in Europe.

Talking about EBIT adjusted, all business units remained profitable despite market headwinds and Supply Chain Solutions contributing here the highest share of our earnings. Overall, EBIT adjusted came in at Materials at EUR 132 million, down by EUR 71 million year-over-year. Business cash flow also down year-over-year, and that's mainly due to the lower net working capital release compared to the previous year.

So let's continue with Steel Europe. Market conditions in Europe remain challenging with both demand and pricing. Consequently, sales decreased at steel by 9% and shipments fell by 6%, especially the European automotive industry and the industrial businesses remained quite weak. Higher volumes were seen at packaging and electrical steel, but those could only partly compensate the decrease.

EBIT adjusted. So actually, due to the lower top line and despite the lower top line, EBIT adjusted increased to EUR 330 million. That was mainly driven by several positive effects, including restructuring efforts and also some more favorable raw materials prices.

With regard to business cash flow, business cash flow was increased year-over-year, and that's mainly driven by a higher earnings base, as mentioned, the EUR 337 million EBIT adjusted as well as a higher net working capital release at the end of the year.

Marine Systems, global markets show unchanged strong demand for defense products, including submarines and surface vessels as well as electronics, all three of our business units. As a consequence, the backlog of our Marine Systems business stands at a record level of EUR 18.2 billion, including new equipment orders as well as a very new service contract.

So let me also briefly comment on Marine Systems as a segment of thyssenkrupp. As mentioned, I hope you've all been part of the investor call and the reporting of TKMS yesterday, all relevant KPIs, including sales, EBIT adjusted business cash flow are up and developing in the right direction.

One highlight for sure, the strong increase in business cash flow on the back of the new submarine orders from Germany in the first quarter.

So let's talk about our known EBIT adjusted bridge to net income bridge. Here, you can see that we are also in a transition period, especially in terms of special items. That's quite obvious. We see a mix of several effects, such as impairments, mainly in steel, some necessary restructuring, mainly automotive, but also some positive effects resulting, for example, from the sale of our Electrical Steel India business.

Looking at our equity results. As of end of the fiscal year '25, we've changed the valuation approach of our elevator stake from equity towards a fair value approach. And that led to a positive valuation effect of around about EUR 900 million, which is included also in finance and others.

With regard to taxes, we've talked about that in Q3, that position includes a devaluation of deferred tax assets resulting from our Marine Systems spin-off of more or less EUR 150 million. Overall, we're coming in at a positive net income of EUR 532 million.

Next chart is the reconciliation from net income to free cash flow before M&A. That means basically the -- from the sale of Electrical Steel India that is not included and therefore, adjusted. We see the usual reconciliation elements to the operating cash flow, mainly including D&A, reversal effects from the mentioned elevator valuation and some positive net working capital effects also on the back of our known efficiency improvements as part of APEX.

Let me make one general comment on the investments. Approximately 50% referred to Steel Europe. That is also in connection with the construction of the DRI plant in Duisburg.

Overall, we saw a positive free cash flow before M&A the amount of EUR 363 million.

Let me now come to the outlook for the running financial year '25-'26. Overall, that year will be a year of implementation with continued focus on performance and restructuring, while markets remain quite uncertain. We see ongoing tough market environment, especially in auto, with some slight hopes of first order intake coming from defense and infrastructure governmental programs, but not yet really certain or visible at the moment. Therefore, we do see a slight sales increase of around about 1% -- up to 1%.

With regard to EBIT adjusted, depending on the top line development, as mentioned before, we see an EBIT adjusted of up to EUR 900 million. Like in the past year, ongoing restructuring efforts will be quite visible in free cash flow before M&A. And considering that our planned restructuring cash out amount to EUR 350 million, we expect free cash flow before M&A to come out in the range of minus EUR 600 million to EUR 300 million after 3 positive years that we just reported today.

So as a reminder, driven by the typical cash flow pattern you've also seen in the last years and from today's perspective, Q1 is to be expected significantly negative from a free cash flow perspective, might even be a negative 4-digit figure, but that would, as in the last years, then reverse in the course of the following quarters.

The recently agreed upon restructuring program at Steel and the corresponding restructuring provisions are obviously visible in our net income guidance for the actual financial year. And we estimate that in a range of minus EUR 800 million to minus EUR 400 million for the entire group. On a pro forma basis, considering the restructuring effects mainly at Steel Europe, the net income would end up around breakeven.

Let's also take a look beyond the financial year '25-'26. Our midterm targets are clear and confirmed and remain valid. We are striving for an EBIT adjusted margin of 4% to 6% that will also lead to a significant positive free cash flow before M&A as well as reliable dividend payments. We will step-by-step bring the performance up by executing our agenda.

One recent example that I also want to highlight against this background, at the end of November '25, we initiated the sale of Automation Engineering, a part of Automotive Technology. That's one of the three business units that are no longer part of our core automotive business. And with the signing of this agreement, our segment Automotive has taken an important step in its transformation process that will ultimately also boost performance.

And with that, Miguel, back to you.

Thank you, Axel. Before we come to our Q&A, I would like to share a few reflections and outline the way forward. A year of decisions is behind us, a year in which we bravely embarked on new paths and set the course for the future. We are developing thyssenkrupp into a financial holding company and thus strengthening the independence of our segments. This will then increase their accountability, entrepreneurial freedom, encourage innovation and unlock new growth prospects.

In the current fiscal year, we are already in the middle of the execution phase, having reached first milestones by the successful stock market listing of TKMS and the signing of the collective restructuring agreement at Steel Europe. For the transformation of thyssenkrupp, we are pursuing an individual approach for each segment and ensure that we create the conditions for sustainable success, either by finding a stand-alone solution or initially by boosting competitiveness.

Moreover, leveraging opportunities from the green transformation and making necessary restructuring investments will be crucial for positioning thyssenkrupp for future success.

And with that, we wrap up today's presentation. Thank you all for your continued interest and trust. We are now ready to take your questions. Andreas, over to you.

[Operator Instructions] The first question today comes from Boris Bourdet. Can you hear us, Boris?

Sorry, mute was locked. I have 3 questions. The first is on the guidance and especially on the Steel Europe business. You are guiding for an EBIT adjusted that should be between EUR 225 million and EUR 325 million, which compares to EUR 337 million this year.

So I'm curious to know the reasons for this cautiousness. Can you tell us how much is positive one-offs that won't recur next year? And what's the scenario in steel, having in mind that there will be a support from the European Commission and CBAM? That's the first question.

Okay. Thank you, Boris. So guidance still for the next year, and you've mentioned positive effects for this year. First of all, the somewhat higher EBIT adjusted in the previous year was also on the back of some positive effects that we're not going to see in this year. That is why you see instead of the EUR 337 million, you see the EUR 325 million to EUR 325 million. And you've mentioned CBAM, that is something we would see as an opportunity beyond what we've guided.

Okay. And then can you quantify the one-offs last year?

The one-offs last year, I'd quantify them between EUR 100 million and EUR 150 million.

Then my second question would be on the negotiations with Jindal. What would you say are the key topics of negotiations and the main obstacles you might be having to face in the negotiations? And how confident are you? And what would be the time frame for an agreement with Jindal?

Yes. Thank you very much, Boris. Of course, during M&A processes, it is always very difficult to really get a timing precisely. The only thing that I can now state here is we are in the due diligence phase. The due diligence is running as expected. And we need to take it from here. So everything is positive, no major roadblocks. So we take it from here.

And then my last question is on HKM. There have been some headlines recently mentioning that Salzgitter was ready to operate HKM on its own on a reduced -- with a reduced scope and that thyssenkrupp, yourself and Vallourec might be required to provide some funds to help them adjust the business. So is this pure fantasy? Or is it likely a scenario in your view?

Well, the statement we made is that in future, we don't need the capacity of HKM, and we are very positive about the fact that Salzgitter is looking at the future of HKM production on its own. And of course, we are prepared for positive and constructive talks and also negotiations. So we are happy that they see the future for HKM and we are looking forward to their further offerings.

Okay. Will that be already included in your provision for restructuring that you booked?

That's correct.

Okay, so there is no risk from negotiations with Salzgitter of you having to add new provisions or new investments in the future of HKM?

Not at this time.

And the next question comes from Bastian Synagowitz.

Hopefully, you can hear me now?

Yes.

So just starting off maybe on the portfolio side and actually with automotive engineering. And that's been a business which, from memory, I think thyssenkrupp really struggled to handle and basically sell over almost like probably more than 10 years. So it's really good to see that you're basically making progress here.

Could you maybe give us any color on how far this business has been contributing? Any losses to your 2025 numbers? And then also maybe related to this and also related to, I guess, all of the other moving parts, are there any other one-off items we should be keeping in mind for the first quarter already across the different businesses? This is my first question.

So with regard to -- Bastian, with regard to your first question, AE, Automation Engineering, the fact that this is part of the three business units that we kind of separated or do not account for our core business anymore gives you an indication that this may not be -- not have been the most profitable business in the past. And that is why we are divesting now a substantial part of Automation Engineering.

With regard to one-offs in the first quarter for the entire, let's say, financial year, I think we've touched upon in our presentation that we are foreseeing some provisions for restructuring. And that is basically the reason why you also would see the -- in our guidance, the negative net income. And if you ask me for one-offs, that is probably the one you should pay attention most. We're going to see due to the fact that we're entering into a year of implementation, we're going to see quite a lot of restructuring provisions.

Okay. Understood. I was also referring -- so first of all, I wanted to check whether there's maybe even like a loss contribution number you could give us for automotive because I guess, if you're selling it, that's actually very positive because you can basically cut off those losses. So just if you have that number.

And then maybe in terms of one-offs, I guess there were also a couple of articles suggesting that there were some issues around, for example, the hot rolling line. So is there anything on the operational side, maybe we should be keeping in mind for the first quarter as a starting point?

Yes. As mentioned, the fact that we are divesting the business is an indicator that this may have not been the greatest, let's say, performance contributor. And with regard to steel, we need to take that quarter-by-quarter, whether we would need to account for additional impairments or not. Let's see once we get there.

Okay. Sounds good. Fair enough. Then my next question is on [ D Tech ]. And here, I was wondering whether you could maybe give us an update on the trends you're currently seeing in your different subunits? Do you see maybe any signs of demand picking up in either road or the plant engineering units where last year has been obviously a little bit more difficult. I guess, quite frankly, it's not been a great year to take big investment decisions. But do you see whether anything is changing? Or do you think 2026 will be mostly driven by your big efforts here on cost cutting?

In general, we still see that FID decisions on customer side are taken with great analysis and resilience. And so the pipeline is really quite full of projects that need to be then decided on. And so my expectation really is here that we will see some realization of FIDs in the next 12 to 24 months.

So it is still, again, many, many regulations to be still decided upon, fixed by many governments out there. And that's the reason why, again, the pipeline is full. And we are preparing ourselves for being, as mentioned many times, for being really competitive. And as soon as FIDs are coming to be there and execute in the best manner. So this is my summary from today's perspective.

Okay. Great. And then maybe my last question, coming back also to the Jindal transaction within the scope of what you can say versus what you can't say. But could you maybe give us an update here? As it stands, would you lean to possibly retain a minority stake in the business? I guess there were a couple of headlines from your press conference earlier suggesting that. And has the targeted shareholder structure changed versus, I guess, the earlier starting point of the indicative bid?

And then also here related to that and on the financing of the steel unit, which you announced together, I guess, with the successful finalization of the restructuring agreement with the unions, how is the financing structured? Have you basically have you injected a certain amount of capital, which the business now needs to run with? Or have you guaranteed any financing requirements until, I guess, the 2030 time line, which was mentioned in how is this financing structured basically? That would be my question.

Thank you. So the discussions with Jindal are clearly focused on them taking a majority. And let's see how the majority will finally look like. This is a topic that obviously will be regarded at the end of the negotiations in much more detail. But the clear orientation is to get them a majority.

Around the financing discussions, you know that we have been agreeing with the unions around the collective prepayment agreement that the financing is secured. And we won't provide any further detail around that. I hope you understand it.

[Operator Instructions] And the next question right now comes from Tommaso Castello.

I have two. The first one is on your free cash flow generation before M&A. You're guiding for negative values despite only a small increase in investments and EUR 350 million from restructuring, but you had EUR 250 million this year. So if you could spend some words, give us some color on what are the other drags there?

Sure. Thanks, Tommaso. You're right. Our negative free cash flow is mainly burdened by restructuring cash outs. And the question in terms of difference year-over-year, maybe two aspects. We saw a significant milestone payment from Marine last year that we would not foresee to the extent this year.

And then maybe if I can go back to your Steel Europe division. Do you expect any further impairments next year?

Yes, cannot be excluded. Let's see how the restructuring efforts kick in. But you're probably aware that we need first some data points on the improvements before we can exclude potential impairments. So at this point in time, short answer is, cannot be excluded.

Thank you very much for your question. There seems to be no more questions at this time. So thank you very much, everyone, for joining us here at the call. If you have more questions during the day, then please let us know at the Investor Relations team. Thank you so much, and have a great day.

Ladies and gentlemen, we'd like to welcome you to our final press conference here at thyssenkrupp AG. I'd like to welcome you here at our conference center at Essen. And we're very happy that you found your way to Essen, either live or virtually. And this press conference, we are allowed to transmit via live stream. So all of the journalists who are here or watching us online can ask their questions.

And I'd like to also welcome our colleagues at thyssenkrupp who are also watching us on live stream. On the stage, we have the management, Mr. Lopez and Henne, Axel Hamann, Volkmar Dinstuhl, right next to me for HR, Wilfried von Rath. And prior to beginning, a few service announcements. We have about 90 minutes for this press conference. Conference language is German. And for those listening who cannot speak German, we have a simultaneous translation for you. Therefore, you can ask your questions in German or in English whatever you prefer. We will answer in German, but that will then be simultaneously translated into English.

At the beginning, Miguel Lopez and our CFO, Axel Hamann, are going to be speaking about our business year of '24, '25, and they will give us an outlook on the current financial year. And then after that, the entire management team will be here to answer your questions.

I'd like to pass the floor to Miguel Lopez.

Thank you very much, Frank. Good morning, ladies and gentlemen. Welcome to those of you here in Essen and to all those attending via live stream. I'm pleased to welcome you on behalf of the entire Executive Board and to today's annual press conference of thyssenkrupp AG for the fiscal year '24, '25. We look back at a fiscal year that was once again overshadowed by difficult geopolitical and economic public conditions, policy conditions. The war in Ukraine continues to keep the world on tenderhooks and threat scenarios are edging closer, ranging from government controlled disinformation to targeted acts of sabotage against critical infrastructure.

The fragile situation in the Middle East has persisted. And in the U.S., the economic and foreign policy orientation is shifting. Protectionism is on the rise in North America under President Trump, while climate policy is receding further into the background. And China is selectively playing to its powers over trade and commodities. Europe is searching for its own way. In this conflict situation, Brussels has ambitious plans, greater economic competitiveness, greater geostrategic independence, greater climate protection and all of that at the same time.

One year after the publication of the prestigious Draghi report, the author himself has drawn a sobering conclusion. In many areas, Europe's position is worse than in 2024. Implementation of the proposals from the Draghi report has stalled. Many reforms are struggling to get off the ground. The connection between growth and climate change mitigation is not yet gaining traction. The process is often dominated by national interest rather than resolute joint steps. Germany and Europe are wrestling with the questions of how they can exist and get their economies to grow again between the 2 major powers, China and the U.S.

Many of our customer industries are under considerable pressure from engineering through the chemical industry down to the construction sector. The automotive industry is in particular, is currently immersed in a massive crisis. Sales volumes are stagnating, production in Europe persists at a low level. High investment costs and technological upheavals are placing a huge burden on companies. Add to that the uncertainty over the ban on combustion engines, which makes it difficult to plan ahead.

Tariffs are exacerbating the situation. As anything that fails to make, it's true America's tariff wall is looking for new sales markets, especially in Europe. This leads to rising import volumes, growing competition and even greater pressure. All these developments are shifting the goalposts for countries, for companies, for industries, for consumers and for entire regions.

Ladies and gentlemen, it's high time that we in Europe and Germany recognized that the entire playing field is rearranging itself and that we are right in the middle of this process. And yet it seems to me that policymakers in some parts of society are still finding it difficult to accept this reality. Instead, many people are clutching to a world of outdated ideas shaped by the prosperity and success of previous decades.

Change is not the problem. The problem is hesitant action in addressing it. What we need is a change of view. We have to look forward rather than back, be more open to innovation and be prepared not to preserve traditional ways for their own sake, but think in new ways, even if it is painful. This is the ambition we pursue at thyssenkrupp. We embrace change. and are making it the starting point of our own transformation.

In a time of global upheaval, we focus on renewal, responsibility and future viability. We want to be part of the solution, not the problem. As an industrial and technology group with creative drive, future strength and readiness to change. In the middle of this complex situation, we have to focus on what is possible. No matter how challenging the environment, it offers new headroom and new opportunities at the same time for making strategic choices, for taking joint initiatives, for embracing forward-looking action.

To take advantage of these opportunities, it is critical for all players to act as one, the economy, policymakers and society. The exchange required to this end among all those involved here have become more intense. And I hope they're all coming around to recognizing that we need courageous reforms and massive investments to safeguard the competitiveness of European industry. The genuine clean industrial deal at the European level would send an important signal. It has to be open to all types of technology, encourage innovation, drive decarbonization and in this way, create the basis for sustainable growth.

The German government also intends to mobilize huge investments. The off-budget fund for the Bundeswehr is driving the expansion and modernization of the German armed forces. Even more ambitious is the planned off-budget fund for infrastructure and climate neutrality, which is intended to kickstart investments of around EUR 500 billion. Other European countries have similar initiatives, a clear signal that Europe is willing to set the course for a more resilient economy.

But we will have to become faster, much faster at gaining -- at getting from intention to action, and it must not waste any more time. Ladies and gentlemen, at the annual press conference 2024, a year ago, we proclaimed the year of decisions, and we have taken a great many. The presentation of our new strategic future model, ACES 2030, was a decisive step ahead. ACES 2030 was decisive. It provides a clear operating framework for our transformation when we are already implementing with determination and at high speed we successfully listed TKMS on the stock exchange.

Other businesses are set to follow suit as soon as we have put them on a profitable position ready for the capital market. We're moreover negotiating with Jindal Steel about the potential sale of our steel business. This is based on the industrial future concept developed by the Steel Executive Board, the road map for modern, competitive and sustainable steel production at TKSE.

The collective restructuring agreement entered into with the IG Metall trade union in the past week and the relevant company regulations are creating the basis required to implement this concept step by step. The milestones reached so far demonstrate that we are already in the middle of the year of implementation, and we are driving the transformation with all our energy.

Before I show you where we currently stand in this transformation, what progresses we've already made despite the difficult conditions and how we are forging ahead, I want to hand the floor to our CFO, Axel Hamann, who will put the thyssenkrupp's financial performance in the past fiscal year into context and also explain our financial forecast for the current fiscal year.

Over to you. Axel, floor is yours.

Yes. Thank you very much, Miguel. Good morning. Miguel Lopez has already outlined the current market environment. Fiscal year '24, '25 was extremely challenging as uncertain markets and weaker demand noticeably curbed our business. Against this backdrop, we have adjusted our sales forecast downward in the course of the fiscal year and consequently also firmed up the target for the adjusted EBIT to a figure at the lower end of the range between EUR 600 million and EUR 1 billion.

But we held our ground in a persistently difficult market environment. We achieved all the targets for our key financial performance indicators as latterly adjusted in our 9 months report. Consolidated net sales in fiscal year '24, '25 amounted to EUR 32.8 billion, down 6% on the previous year. It was, therefore, all the more important for us to continue to systematically address the issues of improving efficiency and cutting costs in all segments.

As a result, we not only cushioned the difficult market conditions, but improved adjusted EBIT by EUR 72 million and EUR 640 million. Our APEX performance program was a major contributor to this success. Our free cash flow before M&A, which stood at EUR 363 million was in positive territory for the third year in succession, exceeding the prior year figure by EUR 253 million and above the range of between 0 and EUR 300 million we had communicated.

Our net financial assets increased to EUR 4.9 million, what is more the repayment of the last outstanding bond in February '25 made us largely free from bank and capital market debt. On the bottom line, we generated net income of EUR 352 million after 2 negative years. That is an increase of almost EUR 2 billion compared to the prior year. Special items to be highlighted in the context are the reversal of impairment losses on the elevator investment and the sale of thyssenkrupp Electrical Steel India.

Total equity rose to EUR 10.6 billion, taking the group's equity ratio to 37%, reflecting a balance sheet that has remained robust overall. We will propose to the AGM on January 30, '26 that an unchanged dividend of EUR 0.15 per share be paid for the past fiscal year. In doing so, we aim to achieve dividend continuity compared to prior years and reliability for our shareholders.

Our share price also performed well. During the reporting period, the price of thyssenkrupp stock increased by about 240%, significantly better than the relevant benchmark indices. Our ongoing transformation aimed at finding stand-alone solutions for our businesses has strengthened the trust of the capital market with the share price reaching a high of EUR 11.81 for the reporting period at the end of September 2025.

thyssenkrupp shares have continued their positive performance in the current fiscal year and held up well in view of the spin-off of 49% to TKMS. Looking ahead at the current fiscal year '25, 2026, we continue to expect an extremely uncertain market environment. Trends in the global economy remain unpredictable. The challenges in our core industries, especially in the steel and automotive sectors will continue to demand our attention and possibly worsen further.

Against this background, we anticipate the change in sales to be in the range of between minus 2% and plus 1% compared year-on-year. For Materials Services and Steel Europe, we expect increases in response to a rise in demand, while we anticipate a decline for Automotive Technology and Decarbon Technologies. We expect adjusted EBIT of between EUR 500 million and EUR 900 million. Here, we continue to benefit from the restructuring measures we have already initiated as well as the actions under the APEX performance program.

We expect free cash flow before M&A to be between minus EUR 600 million and minus EUR 300 million. It should be taken into account in this context that cash outflows of around EUR 350 million are expected for restructuring, in particular, at Steel Europe and Automotive Technology. In addition, the payment profiles in the project business, especially advanced payments at Marine Systems have a major influence on the forecast development.

As for net income for the year, we anticipate an amount of between minus EUR 800 million and minus EUR 400 million. This includes considerable provisions for restructuring, particularly at Steel Europe. Our forecast takes account of both external challenges and internal measures. The expected sales performance is a direct consequence of the difficult market environment. At the same time, our adjusted EBIT shows that we can hold our own operationally, a clear sign of the effectiveness of the efficiency and restructuring measures we have already initiated.

The free cash flow and net income forecast clearly shows that 2025, 2026 will be a year of implementation. Restructuring and strategic adjustments such as the reduction of production capacity for steel are impacting on the figures, but are creating the basis for sustainable improvements. In the medium term, we, therefore, remain committed to our financial targets. We are still seeking to achieve an adjusted EBIT margin of 4% to 6% at group level, a significantly positive value for free cash flow before M&A and reliable dividend payments for our shareholders.

Finally, I want to note that the decisive implementation of our efficiency and cost-cutting programs in all segments has been and continues to be crucial to the performance of our businesses. It is now a matter of holding this course and remaining consistent in implementing our measures. Transformation is a good point to hand back to Miguel.

Excellent, thanks. Ladies and gentlemen. We have a clear goal for the future. We are realigning the group. The long-term goal is a stepwise transition of all businesses to stand-alone solutions and are open to third-party investment. We are jointly transforming thyssenkrupp into a financial holding company with strong independent entities under the shared umbrella of the thyssenkrupp AG.

Stand-alone solutions for the segments will massively strengthen their entrepreneurial freedom, offering them new growth prospects for decision-making powers, more decision-making powers, greater flexibility to make investment and marketing decisions and individual access to the capital market. At the same time, the new structure gives the independent companies increased accountability and more transparency.

Taken together, these are a significant lever for improving performance sustainably. In the process, we are also realigning the corporate functions. Headquarters will, in the future, focus on the financial management of the entire portfolio. This realignment is a process plan that takes several years, which we approach with determination and clear objectives as well as with the appropriate sense of proportion.

This is because it is important to us to implement changes responsibly together with all involved parties. We build stand-alone structures for our segments subject to the capital market readiness. This compromises not only a forward-looking strategy, but also convincing results and structures for independent action. This is the foundation needed to create the basis for the next step. In those businesses where a stand-alone solution is not yet possible, we will simultaneously provide targeted support to boost performance and competitiveness.

This is a pragmatic approach, reliable and based on growing value. For our workforce of more than 93,000 employees throughout the world, this means that there is clear direction and a prospect for the future. As part of the group's comprehensive transformation, ensuring strong social protection for our employees remains a key priority. In early December, thyssenkrupp AG and IG Metall, therefore, agreed to extend the existing framework agreement.

The shared objective is to enhance the competitiveness of the individual businesses while securing jobs and locations for the long term wherever possible. We want to take this opportunity to emphasize that this transformation would not be possible without the outstanding commitment of our employees. They are the beating heart of our company. Their dedication and willingness to help shape changes make the difference. Their commitment breathes life into our ACES 2030 future model. On behalf of the entire Executive Board, I would like to express my thanks to them explicitly.

Let's now turn to our segments. First and foremost, the impressive stock market debut marking the completion of a stand-alone process for TKMS in October. The response of the copper market was very encouraging. The shares started trading at EUR 60 on October 20 and closed the first day of trading at EUR 81. This meant that TKMS had reached a market capitalization of around EUR 5.2 billion, significantly higher than many analysts had predicted and a classic consolidation of value for our shareholders.

This positive development was the result of hard work, careful preparation and a convincing growth story. In the meantime, TKMS meets the Deutsche Börse criteria for inclusion in the MDAX and will be admitted to the second most important German index as of December 22. By repositioning TKMS, we have combined the best of both worlds, the entrepreneurial freedom of an independent company and the stability of a strong anchor investor.

Today, the company is Europe's only fully integrated system house for maritime defense. With around 8,600 employees and a record order backlog of EUR 18.2 billion as of the reporting date, TKMS is ideally positioned as a maritime powerhouse. In addition, new orders are in the preparatory phase. For example, the Norwegian government has announced plans to order 2 more submarines from TKMS. We have systematically improved performance in recent years while also making strategic investments.

In Kiel alone, over EUR 250 million went into one of the world's most modern shipbuilding halls. Another 3-digit million euro amount is planned for the Wismar site. With its IPO completed, TKMS now has the necessary flexibility and access to the capital market to meet strong demand, grow further and extends its technology leadership. We are, therefore, very much looking forward to accompanying TKMS on its onward path and shaking a successful future together.

It is crystal clear to us that Germany and Europe need a strong steel production base and one that is environmentally compatible, but the boundary conditions continue to be challenging. Weak demand in key customer industries, in particular, the automotive industry is weighing on steel and the prospect of supplies for the green hydrogen for sustainable steel production still seems remote. At the same time, U.S. import tariffs are adding to the pressure. It is all the more important now to take effective EU trade defense measures against unfair imports, in particular of low-priced goods from Asia as well as competitive energy prices and more domestic value creation.

Companies, including ours, are also required to play their part. We have to do our homework now to create the conditions to ensure that steel can continue to produce -- to be produced in Duisburg in the future. It is to do just that, that the Steel Executive Board has developed the Industrial Future concept, the road map for a competitive, modern and sustainable steel production. A significant milestone on this road was the signing of the collective restructuring agreement with the IG Metall trade union.

It finally opens the path towards operational implementation of the industrial future concept. It focuses on 3 points. Firstly, we continue to systematically drive the technology and quality leadership of our steel segment. For this reason, we have realized major investments. The new continuous caster 4, the modernized hot strip mill for including 2 new walking beam furnaces and a fully automated slab logistics system.

This gives thyssenkrupp Steel one of the most cutting-edge plant networks in the European steel industry, a decisive step in consolidating its technological leadership and meeting the growing requirements of our customers. Secondly, our future concept envisages a reduction in shipping capacity from around 11.5 million metric tons at present to a target level of roughly 8.7 to 9 metric tons per annum in order to adapt to actual market demand.

What this means is targeted site consolidation, optimization in production and admin and an adjustment to personnel expenses by an average of about 10% by 2030. These measures will systematically drive our realignment. Another key component relates to HKM. In April 25, the Executive Board of Steel Europe resolved with the approval of the Supervisory Board to terminate the supply agreement with HKM as of December 31, 2032, ending the obligation to purchase around 2.5 million tons of steel every year.

This is an important step towards adjusting capacity. Independently of that, we expect that all shareholders of HKM will act in joint responsibility to find a viable solution for the employees and the site. It is clear that the separation from HKM is a necessary step for thyssenkrupp Steel to achieve a sustainably competitive cost structure, safeguard our Duisburg site and to put the steel business in a financially robust and future-proof position.

And thirdly, we are committed to continuing the green transformation of the steel business. We are keeping to our plan of building a direct reduction plant in Duisburg. Despite the complex environment and existing regulatory uncertainty, we are making an upfront investment in its construction and planned operation. We will thus create the foundation for using large quantities of green hydrogen in Germany and make an indispensable contribution to climate change mitigation. I will come back to this shortly.

The fact is that this approach is a clear commitment in Germany as a business location and to our responsibility for the environment. On the basis of this process, we can now also explore new strategic options. As you know, Jindal Steel has submitted a nonbinding indicative offer for the steel business. Against this background, we have ended discussions with EP Group and received a 20% interest back from EPG. We are currently engaged in a constructive exchange with Jindal Steel with the ongoing comprehensive due diligence at the center. It forms the basis for potential next steps.

Let's now talk about Materials Services. This segment is transitioning from a traditional trader to a modern supply chain service provider. However, the market environment of Materials Services is also going through a period of change. Global shifts in trading, new competitive conditions, increasing regulation and economic uncertainty are creating greater complexity and reducing the ability to plan. Today's international players have to respond to these developments with flexibility through digital channels and with our customer proximity.

And that is exactly the basis for our approach. We focus on expanding the supply chain business and AI-based digitization and on sustainability. Especially in times of global trade conflicts and disrupted supply chains, we see the kind of added value that Materials Services can provide to customers in Europe and North America. It is important to note that Materials Services has demonstrated for decades, including in challenging market phases that it is able to generate reliable cash flows and solid returns.

At the same time, the market offers opportunities for consolidation. In both Europe and North America, we are on a clear course in this regard, prioritizing growth and further development in the U.S.A., we are already among the top 20 warehousing providers, strong evidence of our successful growth path and the basis for further expansion.

By acquiring WAVES, a software provider for ESG sustainability data and reporting in Luxembourg, we have already boosted our portfolio of digital solutions. As mentioned earlier, the difficult situation of the automotive industry is also affecting our Automotive Technology segment. The ongoing changes and massive crisis in the global automotive industry, including structural market upheaval, technological transformation and noticeable reluctance to engage in new business are having an enormous impact on the segment.

Our current structures make it difficult to keep up with an international competition in a sustainable way. And as a response, the Executive Board of Automotive Technology has launched a global structure program that cuts costs, optimizes processes and pools support functions. Costs are to be cut by around EUR 150 million in total. This also means that around 1,800 jobs will have to be cut primarily in the corporate functions and administrative areas.

Alongside the global structure program, AT will also have to implement site-specific measures. This is because even though measures were initiated at an early stage, some steps are not enough to fully account for the structural changes. Socially responsible solutions are being sought together with the employees' representatives. The AT Executive Board is making sure that those affected receive individual offers of support to make the transition as smooth as possible.

Another measure initiated by Automotive Technology is a comprehensive organizational realignment of the business. The segment will, in future, focus its portfolio clearly on 4 customers in technology-centered areas: chassis, components, aftermarket and forging business. 4 new business units have been created accordingly. Each of these units is to have the ability in future to further improve its operational efficiency, finance investments from its own resources and generate sustainable profitable growth by actively taking advantage of market opportunities for example, as part of the transition to e-mobility, especially in the strategically important focused market of China.

The current business units, automotive, body solutions, Automation Engineering and Springs & Stabilizers are not part of the new structure and will be continued separately. New development prospects are being explored for these businesses, including in the form of partnerships of new owners. And this -- we initiated in this context, the sale of Automation Engineering to the technology company, Agile Robots in November, subject to the usual regulatory approvals, we expect the transaction to be completed in the coming months.

Although the market ramp-up of green technologies is advancing at a slower pace than many had hoped, there is no doubt about the long-term trend. The direction is clear according to the latest report of the International Energy Agency, around $2.2 trillion were invested in renewable energies, power grids, storage units and other clean technologies in 2025, twice the combined total spend on oil, gas and coal.

This is why we are pressing ahead with a focus on performance and future viability in our Decarbon Technologies segment. Uhde recently entered into a strategic partnership with Uniper to bring a large-scale ammonia cracker to industrial maturity. The aim of this partnership is to convert imported ammonia into hydrogen on an industrial scale and make it available for a wide range of industries such as energy, steel and chemicals. Uhde supplies bearings to the first German wind park for an industrial plant, our rolling mill in Hohenlimburg.

This will ensure that the site is, for the most part, supplied with green and wind power. This is a pioneering step in industrial decarbonization. And Polysius, on the other hand, supplies CO2 capture technology to the TITAN Group in Greece for a large-scale project of the Kamari cement plant. It uses oxyfuel technology to capture most of the CO2 and prepare for long-term storage or industrial use.

And thyssenkrupp nucera has successfully completed the acquisition of key technology assets from the Danish company, Green Hydrogen Systems. By taking this step, the electrolysis specialist is expanding its technology portfolio by adding high-pressure electrolysis, a development that will boost the company's position in the global market for green hydrogen. And these examples demonstrate that Decarbon Technologies is sought after internationally as a partner for green transformation, especially in the global growth regions. The continued expansion of this segment is far more than an entrepreneurial decision. It's a key contribution to industrial resilience for thyssenkrupp and for Europe as a business location in general.

This is why we are systematically honing Decarbon Technologies to be ready for when the markets are -- for green technology are finally ready for takeoff. And therefore, it is important to have the right framework right now. I'm convinced that we will only be able to create the conditions for the long-term success of a sustainable European industry if policymakers, the economy and society act as one. A key lever for this is a sovereign energy supply. Specifically, the energy supply has to meet these criteria. It must be reliably available around the clock, 365 days a year.

It must be affordable even against international competition, and it must be clean so that we can mitigate climate change and achieve our targets. And hydrogen is a key in this process as it is the only material that can create complete climate neutrality on an industrial scale. Three key requirements have to be met. First, we need to speed up the development of infrastructure. We need a European hydrogen network that transports energy from the Iberian Peninsula or from Scandinavia to the heart of Europe's industry.

Cross-border pipelines will be required. Moreover, import terminals and ammonia crackers must be planned and realized urgently. Slow approval processes must not hold back this expansion. The second thing we need is competitive hydrogen prices and volumes. At present, green hydrogen is still 3x to 4x more expensive than fossil fuel alternatives. No company today is able to shoulder this green premium alone. Europe must, therefore, work more closely together on hydrogen procurement and pool demand in order to generate economies of scale and bring down prices. We want to be a pioneer and drive the necessary steps with the like-minded buyers.

And third, we need a pragmatic approach during the current transition phase. If we focus exclusively on green hydrogen, we will not be able to meet demand in the short and medium term. Low carbon hydrogen as well as natural gas will temporarily have to be accepted as part of the solution. In this way, we will be able to get up to speed during the transformation and to finance the change to avoid permanent dependence on state subsidies.

Ladies and gentlemen, a year of clear decisions is behind us, a year in which we bravely embarked on a new path and set the course for the future. We are developing thyssenkrupp AG into a financial holding company thus strengthening the independence of our segments. This will increase their entrepreneurial freedom, encourage innovation and unlock new growth prospects. In the current fiscal year, we are already in the middle of the implementation phase, having reached initial milestones in the successful stock market listing of TKMS and the signing of the key collective restructuring agreement to TKSE.

For the transformation of thyssenkrupp, we are pursuing an individual approach for each segment and ensure that we create the conditions for sustainable success, either by finding a stand-alone solution or initially by boosting competitiveness. At the same time, we are actively involved in shaping the major areas of the future, the decarbonization of industry, secure energy supplies at competitive costs. This is because a strong resilient industry is indispensable for Europe's future, and that's for the good of all of us.

Therefore, at thyssenkrupp, we will put all our energy into developing thyssenkrupp and strengthening the future of our company and the industry for our customers, for our employees and for society. Thank you. And now we're looking forward to any questions you may have.

Hello, everyone. This is Andreas Trosch from Investor Relations. Also on behalf of my entire team, I wish you a very warm welcome to our conference call on the 9 months results '24-'25 of thyssenkrupp.

With me in the room are: our CEO, Miguel Lopez; and our CFO, Axel Hamann, plus my colleagues from the Investor Relations team. I have some housekeeping before I hand over to the CEO and CFO for their presentations.

All the documents for this call are available in the IR section on the website. The call will be recorded, and a replay will be available shortly after the call. After the presentation, there will be the usual Q&A session for analysts. [Operator Instructions]

And with that, I would like to hand over to our CEO, Miguel Lopez.

Thank you, Andreas, and good morning, everyone. Welcome to our Q3 Conference Call, the first time today with our new CFO, Axel Hamann, who will introduce himself in a couple of minutes.

Let's dive straight into the management summary for quarter 3, '24-'25. As usual, first, I will provide you with an overview of our latest achievements with regard to our strategic initiatives in the third quarter, followed by Axel, who will present to you the financials in detail.

Let's start with the first item, portfolio. You all know that we are working on shaping the future of thyssenkrupp as a strategic holding company with independently managed business segments. The future independence of our current segments will increase their entrepreneurial flexibility, strengthen their investment plans and earnings responsibility and improve transparency for investors. Ultimately, our goal is to unlock and crystallize value for our shareholders.

A key milestone of that transformation, the spin-off of Marine Systems is progressing exactly as planned, and we are fully on track for the listing in calendar year 2025. I will give you more details in a minute.

Regarding Steel Europe, I'm pleased to share that we have reached consensus this July on the collective restructuring agreement. This is a major step in preparing the segment for future resilience. And at Automotive Technology, we will realign the segment into 4 business units to sharpen our capital market readiness and accelerate growth.

And now on to performance. Despite ongoing market headwinds, Q3 delivered solid results with notable quarter-on-quarter improvements. We had to adjust our top line guidance to reflect the tougher environment, as you can see in our lowered sales assumptions. As a consequence, we specified our EBIT adjusted guidance to the lower end of the original range.

But -- and maybe this is the most important message, we confirm the guidance for free cash flow before M&A. This will mark the third consecutive year of delivering positive free cash flow before M&A, a strong testament to our operational discipline. We are executing necessary restructuring measures effectively with positive effects already visible. A standout achievement.

Marine Systems achieved another record order backlog, thanks to major submarine orders from Singapore and a service contract with Germany to modernize 6 submarines. And last but not least, I will give you some examples and proof points for our efforts to prepare thyssenkrupp for the future, green transformation. The partnership between Uhde and Uniper represents a pivotal step toward industrial scale hydrogen production from imported ammonia.

Moreover, at Steel Europe, we are committed to and remain on track with the DRI plant construction in Duisburg. The progress is becoming more and more visible at site.

Last but not least, we are proud to have received approval from the science-based targets initiative for our updated climate goals, reinforcing our commitment to responsible and forward-looking leadership.

Turning to the Marine Systems spin-off. We are happy and thankful to report strong shareholder support for the envisaged capital market listing. What is coming next is our Capital Markets Day, followed by the listing on the prime standard on the Deutsche Borse Stock Exchange in Frankfurt later this calendar year. The spin-off will be structured as a minority spin.

thyssenkrupp AG will keep 51%. Therefore, Marine Systems will remain a fully consolidated entity in our financials. For existing thyssenkrupp shareholders, the allocation ratio will be 1 TKMS share for every 20 TK AG shares held. This structure allows TK AG shareholders to benefit directly from TKMS growth trajectory and long-term value creation.

And now Axel, please go ahead with your financial section.

Thank you, Miguel, and good morning, everyone. After having joined the team in -- on May 1, I'm now happy to provide some color on the Q3 results for our fiscal year 2024-2025. What you're going to see is the usual format, highlights and challenges. So let me start with the highlights from the third quarter '24-'25.

Miguel already mentioned the group guidance. We have only specified our EBIT adjusted guidance within the previous range, and we'll get to that in a bit into more detail. However, really important, one of our core KPIs, we are confirming our guidance for free cash flow before M&A.

Our known APEX 2.0 program is helping us to increase and maintain the underlying business resilience. And therefore, we see an increase in EBIT adjusted, despite 9% sales drop year-over-year. That is an indication for our ambitions, efforts and for our resilience. We do also report a workforce reduction. We are 4,200 FTEs down year-to-date and only 600 of the 4,200 is portfolio-driven, so you see a decent chunk of FTE reduction with regard to restructurings.

We do have an ongoing strong balance sheet, EUR 3.7 billion net cash and on top comes EUR 1.1 billion available revolving credit facilities. Let me continue with our challenges, and Miguel you've mentioned, there are some weak demand as well as some overwhelming macro uncertainties across most our customer groups. And these are in specific automotive, construction, machinery, and that is why there's a reason for a more cautious top line assumptions, and we'll get to the guidance at the end of the presentation.

We do have some lack of clarity on the tariff development during the reporting period that also gives some uncertainty to our customers and the implications are to be closely monitored. It's important to understand that those tariff developments are of a more indirect impact on our business and not so much direct impact as we are having a local-to-local business in the U.S., and we do not import much of steel into the U.S.

Last but not least, cash flow volatility. You're aware that our cash flow profile is somewhat geared towards the end of the financial year, and that's something we are currently experiencing in the third quarter.

Let me continue with the overview on our core KPIs, financial overview. [ Header is ] sound performance in ongoing challenging markets, and it's a mixed picture. So quarter 3, we are 9% down in terms of sales year-over-year. First 3 quarters versus year-over-year, 6% down. EBIT adjusted, as mentioned, on a year-over-year from a quarter point of view, third quarter, we are EUR 7 million above the quarter 3 in 2023 and '24. 9 months, slightly below the previous year's time frame with EUR 365 million, and we get to our EBIT adjusted guidance at the end of the presentation, and we will provide you some comfort how to end up within the range of EUR 600 million to EUR 1 billion.

Let me continue with net income. Net income for the quarter is minus EUR 255 compared to minus EUR 227 million -- compared to minus EUR 222 million compared to last quarter. What is important to realize here that includes the devaluation of deferred tax assets resulting from the preparation of our TKMS spin-off. And as a quick explanation, that's more or less EUR 150 million.

We had to terminate the profit and loss transfer agreement with TKMS in light of the upcoming listing and the termination of the profit and loss transfer agreement is ending the tax consolidation. And therefore, in future, we will not be able to net our carry loss forward, and that is an impact on net income in the amount of circa EUR 150 million. In addition to that, it's an impairment at steel, around about EUR 100 million, and we do also see some restructuring provisions in automotive that is a 2-digit million-euro figure.

Let me continue with free cash flow before M&A. In Q3, minus EUR 227 million. It's EUR 28 million better than Q3 of '23-'24. From a year-to-date perspective, we are at EUR 817 million negative. You're well aware that our cash profile is geared towards the end of the financial year. Therefore, we still expect a positive free cash flow, but more details to come at the guidance part.

Balance sheet highlights, still, as mentioned, net cash, EUR 3.7 billion. Pensions slightly down due to increased discount rates, and we're still having a very comfortable equity ratio of 34.9%.

Let's turn the page and continue with Sales and EBIT adjusted development. I will only highlight a few effects with, let's say, major impact on the bridges. Again, sales from a quarter perspective, down from EUR 9 billion in Q3 '23-'24 to EUR 8.2 billion in Q3 '24-'25. That's more or less EUR 800 million down. The major, let's say, reasons are in our Steel business with around about EUR 400 million decrease followed by the Materials business, EUR 300 million; and Automotive, EUR 0.1 billion -- EUR 100 million. And for both Steel and MX, it's mainly price and volume. For Auto, it's more or less demand driven and not so much price.

The -- let's continue with the EBIT adjusted bridge for the third quarter. Here, you see the development from EUR 149 million to EUR 155 million, slight increase for this year's quarter. You see Decarbon Technologies, where we are benefiting from a [ EUR 101 million -- EUR 100 million ] increase. That's basically driven by a prior year negative onetime effect, and we've given some transparency on the EUR 80 million effect in our past calls. For Steel, it's a top line development plus some underutilization. That's why you see the almost EUR 70 million negative development from an EBIT adjusted point of view.

So the EBIT, the EBIT adjusted, it's decreased despite lower sales. And again, it's an indication from our point of view for an improved resilience; and therefore, also includes some contributions from our ongoing efficiency program, APEX 2.0.

Let's move to the segments and start with Automotive Technology. There, we see some solid earnings in an ongoing challenging market environment. Sales are from a quality perspective, down by 7%. Year-to-date, 9 months, minus 8% I've mentioned the persistent soft demand and some challenging market environments. However, although we do report a decrease year-over-year, we have Q3 versus Q2 stable, supported by some higher sales at Bilstein and Forged Technologies.

EBIT adjusted for Auto quarter-over-quarter, EUR 16 million down due to the reduced sales. On a year-to-date basis, EUR 174 million to EUR 98 million. That means a EUR 77 million decrease. Again, lower volumes and a negative onetime effect outweigh the decline in our personnel expenses. And we've already announced and we are running a restructuring program of around about EUR 100 million savings. And very recently, we announced another transformation and those -- that impact will come on top. So bottom line restructuring and extended cost-cutting initiatives are on track at Automotive.

Correspondingly, business cash flow down from a quarterly basis, EUR 44 million, EUR 81 million to EUR 37 million. And on a year-to-date basis, minus EUR 297 million, down to minus EUR 182 million. And you will see here the impact from restructuring cash outs and also the earnings decline versus some lower invest that we have counter-steered starting over the past months.

Let's continue with Decarbon Technologies. There, we do see a step-up in earnings despite a hesitant market environment. And so from a sales perspective, we do see a 10% decline. However, very important to note organically, so if you would not consider the sale of TK Industries India last year, we would see 2% sales increase for the first 9 months of the year '24-'25.

EBIT adjusted, important to note, almost all businesses with an increased contribution. Nucera has reported earnings a couple of days ago. We would consider them as stable. And we do see some -- at Polysius, we do see some -- a periodic higher cost versus prior year. APEX measures are in full swing at Decarbon Technologies and support with restructuring efficiency gains and some purchase optimization.

Let me end Decarbon with business cash flow. Here, we do see some impact by a temporary negative cash profile in the Project business. We do have some projects where we are at a stage where usually the cash-in is a little bit lower than at the start of the project. And the year-to-date development more or less follows the EBIT adjusted, compensated by some higher investments.

Material Services, sales down by 10% for the third quarter from a year-to-date perspective, 6%, EUR 9 billion (sic) [ EUR 9.2 billion ] to EUR 8.6 billion. As mentioned, we do lower price levels in key product groups and a pretty weak demand across Europe. However, we do see some slight growth at our distribution business in North America. Our shipments are down year-over-year, and that is mainly impacted by our direct-to-customer business.

Let me continue with EBIT adjusted. EBIT adjusted is down corresponding to our sales decrease by EUR 30 million in the third quarter. From a year-to-date perspective, it's minus EUR 71 million. However, all business units are profitable, Supply Chain Solutions business with the highest earnings contributions amongst the business units. Despite the top line decrease, we do -- a sequential quarterly increase year-to-date. We have -- compared to -- comparable to Decarbon, we do have continued support by our APEX measures. For example, we are still in the midst of restructuring in Germany.

That gets me to the business cash flow for Materials. From a quarterly perspective, following our sales decline, we have a decrease of minus EUR 96 million. From a 9-month perspective, we have a decrease to minus EUR 311 million. That is due to the net working capital increase, which is a decrease of payables and an earnings decline. And again, particularly for MX, you will see a cash flow profile that is geared towards the end of the fiscal year. So you can expect different numbers towards the end, towards September 2025.

Let me continue with Steel. Steel Europe, persistently weak demand and lower price levels weigh on our performance. We do have a sales decline for the third quarter of 13% year-to-date, minus 11%. We do see market headwinds from lower price levels and also ongoing soft demand, and that is due also to the industry dynamics I've mentioned at the beginning of the presentation. Shipments are down by 8% year-over-year and what particularly burns us is the Automotive and Industrial businesses. We do see some better development at Packaging Steel.

This leads me to the EBIT adjustment, EBIT adjusted of Steel. There for the third quarter, we report a decrease from EUR 100 million in the previous year to EUR 31 million in the third quarter '24-'25. Year-to-date, it decreased by minus EUR 61 million from EUR 238 million to EUR 177 million. We do see a top line -- that is due to the top line development, as mentioned.

We have also some underutilization of plants as we are currently, let's say, having some conversion shutdowns, particularly in May and June. This is to be improved over the remainder of the quarter. We do see some positive effects, though, from some favorable raw material prices, and as with the other 2 business segments, we do see the impact from APEX measures.

Coming to business cash flow for Steel, we do have an increase in business cash flow from minus EUR 197 million to EUR 127 million. Year-to-date, we are still negative at EUR 350 million due to the net working capital release and some lower investments versus the earnings decline. You will also see what we're going to guide for the rest of the year. We have -- we are applying some strict capital discipline, and that is why we have reduced capital investments, not only in Steel, but also across other segments.

Let me now continue with Marine Systems. Marine Systems is displaying a record order backlog, and it is paving its way not only for future growth, but also hopefully paving its way to the listing until the end of the calendar year 2025.

So let me report on sales of Marine Systems from a quarterly perspective, up 14%, EUR 438 million to EUR 500 million. Year-to-date, we are up in sales by 14%, 1-4 -- with now EUR 1.6 billion for the first 9 months '24-'25. We do see a very nice progress in execution of new projects, both in Service and Marine Electronics. We are enjoying a record order backlog of EUR 18.5 billion, and we have just recently reported a new order for 2 submarines from Singapore. And we're also very happy to report the largest service contract ever for 6 submarines from Germany.

EBIT adjusted, that's important to explain, and I'll get to that in a few seconds. Third quarter down by EUR 7 million from EUR 30 million to EUR 23 million. Year-to-date, EUR 72 million to EUR 85 million. Despite the progress in project execution and service, we here have a negative onetime effect, and we'll get to a bit more detail during the part for our guidance for the remainder of the year. It's basically the application of IFRS 15. It's clarifying the allocation of contractual obligations for long-term orders. It's a so-called serious guidance. So we kind of -- IFRS 15 kind of flattens the EBIT.

If you have, for example, 4 submarines in a row in the past, there was a different profile for EBIT adjusted. This is going to be flattened, and that's why you see the onetime effect. But from an operational point of view, nothing has changed, and we'll get to that at the end of the presentation when it comes to our guidance for the Marine segment.

Business cash flow for Marine Systems is down by EUR 126 million for the quarter to EUR 160 million. It's still up for the first 9 months of the year to EUR 582 million. And the decrease is mainly due to project-related cash outs.

Let me now get to the bridge for the third quarter from EBIT adjusted to net income. Again, I will highlight only the major effects here. We're starting at EUR 155 million EBIT adjusted and the deduction of the special items. Here, as mentioned, around about EUR 100 million for the impairment at Steel comparable to the previous quarter. And we also do see some restructuring expenses at Auto at the amount of almost EUR 70 million.

Let me also highlight the tax column at the right of the chart. That is, again, as mentioned, the devaluation of the deferred tax assets resulting from the TKMS spin-off. As explained, we had to terminate the profit and loss transfer agreement, and therefore, we will not be able to net losses on a group level with the segment's EBIT in future. And that is hitting the net income by more or less EUR 150 million and gets us to minus EUR 255 million. Net income, it's important to keep in mind that's some specific onetime effect.

Continuing with the bridge on the next page, net income to free cash flow before M&A. Major chunk are here some negative net working capital effect. Obviously, we're also adding back the positive noncash items, depreciation and amortization and again, the -- more or less EUR 150 million of deferred taxes.

The EUR 260 million cash flow invest, around about 50% of the EUR 260 million relate to Steel Europe. And a major part of that is also our DRI power plant at Steel, which gets us in the end at minus EUR 227 million free cash flow before M&A. Important to keep in mind, we'll spend some few, let's say, some further comments on the guidance towards the end of the year. Now on the next page.

So this is here the overview for our updated fiscal year 2024-2025 outlook. Let me start with sales. We are now expecting for the fiscal year '24-'25, minus 7% to minus 5%. Previously, we've guided minus 3% to 0%. That is due to the headwinds we're experiencing in our main markets. EBIT adjusted already mentioned, we are now guiding at the lower end of our previously guided range of EUR 600 million to EUR 1 billion. Free cash flow before M&A on a group level, unchanged, EUR 0 million to EUR 300 million and where -- we're comfortable to reach that until the end of the year.

Let's now switch from the group level to the segment level. Auto -- Automotive Technology sales, new guidance is minus 7% to minus 5%, previously minus 4% to 0%. The EBIT adjusted is now expected to come in at the lower end of our guidance of EUR 200 million to EUR 300 million.

Decarbon Technology, we do expect for the fiscal year 2025, a sales development of minus 9% to minus 5%. Again, I've mentioned the impact from our sale of TK Industries in India. If you would consider that and net that out, we would be almost flat for fiscal year 2004-'25 (sic) [ 2024-'25. ]

Continuing with Materials Services, also experiencing some headwinds in its core markets, also particularly in Europe. New guidance range is minus 6% to minus 3% for sales, previously minus 2% to 1% and EBIT adjusted is now EUR 100 million to EUR 150 million, previously EUR 150 million to EUR 250 million.

Steel, minus 10% to 8% -- minus 8% in terms of sales, also lowered guidance from previously minus 6% to minus 3%. Important to note, EBIT adjusted still at EUR 250 million to EUR 500 million.

Now very important, the guidance for Marine Systems. I've mentioned the application of IFRS 15 already. And with the application of IFRS 15, we do expect sales of minus 2% to 1%, previously 3% to 6%. What's really important is from a segment view, Marine Systems itself, nothing has changed in terms of operational performance. And if you will take a look at the listing perspectives and the combined financial statements, you will see the consistent application of IFRS 15 will lead to the previously guided sales growth of 3% to 6%. EBIT adjusted for Marine, still EUR 100 million to EUR 150 million.

So with that, in summary, we're experiencing some headwinds with regard to sales, but are really applying efforts and are keeping our guidance at the lower range for our adjusted EBIT. We are confident that we are still going to achieve the positive free cash flow before M&A.

And with that message, I hand over back to you, Miguel.

Thank you, Axel. Before we close, I would like to share a few reflections. This chart looks very familiar to you and is basically unchanged.

Let me shine a light on some key achievements from our strategic agenda. We are just about to finalize the business plan for Steel Europe on the back of the recently reached consensus on the collective restructuring agreement. I know many of you are eager for financial details. Once everything is finalized, we will have more information.

And as already mentioned, we pushed ahead with the minority spin-off of the Marine business in calendar year 2025. And this might serve as a blueprint for strategic steps ahead, such as the stand-alone options for the remaining segments to reach our vision of a strategic holding company. Additionally, leveraging opportunities from the green transformation and making necessary restructuring investments will be crucial for positioning thyssenkrupp for future success.

And with that, we wrap up today's presentation. Andreas, over to you.

Thank you very much for your presentation. We are now coming to the Q&A session. [Operator Instructions] And now we're coming to the question of the first analyst, which is Boris Bourdet.

I have 2. The first one is on the EBIT guidance. So the group achieved an EBIT of EUR 155 million in Q3. When we're looking at last year, the Q4 EBIT was pretty the same as Q3. So the implied number for Q4 to achieve your guidance this year is EUR 235 million in Q4. So can you share the bridge here to -- what will be the drivers to improve the performance from EUR 155 million to EUR 235 million? That's the first question.

And the second, it's obviously on Steel Europe. So I would be curious to know what will be the next steps now that consensus has been reached? What are the next milestones to reach? And what would be the contribution of this consensus agreement on restructuring in terms of cost cutting?

Okay, Dominic, (sic) [ Boris ] thank you. Let me provide some color on our way to go until the end of the year. You've mentioned the EBIT guidance. And you're right, there's still EUR 235 million to go. And we do feel confident backed by a couple of aspects.

First of all, I've mentioned the reduction of around about 4,200 employees year-to-date. That will have an effect on the remainder of the year. We're still pushing hard. Our efficiency program, APEX. We will see some positive effects also from Automotive. We are talking here about claims management until the end of the fiscal year. And last but not least, very importantly, we do, let's say, anticipate also some personnel cost improvements at Steel. So we have some flexibility to also, let's say, reduce one or the other provision that has been part of the most recent negotiations.

So overall, it's still some way to go, but we do believe and we are confident that we're going to make the EUR 235 million to go. And with that, over to Miguel, maybe you want to provide some color on the current situation at Steel.

Yes. Thank you for the question, Boris. I believe it's, first of all, to say it's a big milestone that we could achieve here with this agreement. And you know the raw data that will now kick in, in the next years, which is the number of job cuts and the number of outsourcing amounting overall to 11,000 in total over the next years.

I think the next steps here to go, there are basically 2 things that we're going to do. First, from a union perspective, they will -- they are asking their members for approval, and this process is ongoing. And there's a second very important thing is how to secure the financing overall. And we are also working on that, and this will be clear in the next couple of months so that everything can be executed as planned.

Around the cost contribution overall, I would be taking this to the next quarter in order to make sure that everything is then really already planned for the subsequent years. So give us a little bit more of time to be more precise on this one.

Okay. And just as a follow-up on that, how would you describe the discussions at the moment with Daniel Kretinsky?

Well, we are in a very good relationship. He is a 20% shareholder. And we are getting now more and more certainty around the elements that we need to have in order to continue with our 50/50 discussions.

And the next in line is Tom Zhang from Barclays Capital.

Two for me as well, please. First one, just following up on the guidance in Steel Europe. There's a very wide range, right, that you've kept the EUR 250 million to EUR 500 million on EBIT. Could you just talk us through what assumptions you might have to hit the bottom or the top end of that guidance and basically why that range wasn't narrowed? And maybe you can, if possible, clarify just how many provisions are currently built in for those negotiations that you mentioned we might get some provision release. Maybe any color there?

And then the second question, just around Marine Systems. So you mentioned around IFRS 15 clarifying the allocation of contractual obligations. Could you just let us know, one, are these linked to some of the recent contracts you booked this year? Or are they from older contracts? And could you also just clarify that there's no actual change to your obligations. This is purely a sort of timing of revenue recognition issue. There's no actual change in your -- what the project actually entails?

Thank you, Tom. You've mentioned the guidance around Steel. And as mentioned, it's difficult to provide you with the bridge, but I've mentioned the provision that we may consider to release. And maybe you would expect something between EUR 50 million and EUR 100 million. But this is, let's say, the ongoing assumption. And can you clarify your second question again?

So it was just the IFRS 15 adjustment that you made, could you just clarify, it's a purely timing of revenue recognition or is an accounting thing. There's no actual change to your obligations because when it says clarifying the contractual obligations, just wondering if there's something that's actually different with the project or it's a pure accounting issue?

It's a pure accounting issue. And thanks for asking the question, Tom. It's more or less flattening the pattern, but from a pure amount, there are no changes. It's -- as you said, it's a pure accounting technique. And unfortunately, we had to correct it in our TK AG reporting, but what you're going to see at the segment at the listing perspective will be, let's say, very much known to you because we're going to repeat the guidance of 3% to 6%. So bottom line, it's only an accounting impact.

Okay. That's clear. And then maybe if I could just follow up just on the Steel segment. So I see there's this EUR 550 million (sic) [ EUR 50 million ] to EUR 100 million provision release, but I guess the EUR 500 million full year number at the top end would be over EUR 300 million EBIT in Q4. I mean, are there any other levers that we're missing that means that might actually be possible? Or do you think towards the middle or the lower end of the Steel Europe guidance is reasonable?

Yes, I think the range kind of reflects the volatility we are seeing also until the end of the year. And that's why we need the remaining 2 months in order, let's say, to have the final result. And I ask for your understanding that we cannot provide more color at this point in time.

And the next in line is Jason Fairclough from Bank of America.

Congrats, I guess, on getting Marine Systems over the line. It's nice to see some progress on some of these levers. Just thinking about some of the other levers you can pull, buttons you can push. You've got this Elevator stake. And then I guess I'm also thinking a bit about Material Services. So for the Elevator stake, could you just remind us what are you carrying that at on the balance sheet today? And how do you think about how that compares to the recent transaction that we saw in that business? So that's the first question.

Thank you, Jason. And so you've mentioned the TKE stake. And as you've probably seen, we saw a transaction at the end of July closed by Alat. And we've also mentioned in our interim report that we are considering to provide some more transparency on the actual value of the TKE stake. So that's most likely to crystallize until the end of the fiscal year.

So -- and the carrying value today?

Could be more or less EUR 1.1 billion.

But -- and there's no sort of need or accounting requirement to sort of write that to a more appropriate value at the moment?

What could happen? We may see an appreciation until the end of the year. It's kind of indicated in the interim report, and you may very well see the appreciation of that stake.

Okay. Look, my second question is on another business that we've spoken about before, which is Material Services. Last I checked, this business had capital employed of north of EUR 3 billion. I don't know how much that's changed lately. And really not much business cash flow at all. There was a news story earlier this year that suggested that you were considering your options here.

As you progress with the other levers, as you progress Marine, as you progress Elevators, as you progress Steel, is it time to start taking a harder look at Material Services?

Thank you, Jason. Of course, we are developing in detail the concept for what we want to achieve in the long term, which is the strategic holding. And obviously, we are also looking to the Material Service businesses as we are also looking to the other businesses, how to get them to play a significant role in the long run being participations in this strategic holding.

So planning is ongoing here. And so we will certainly see at the moment in time that we consider to be ready then also to communicate the next steps here, but we are looking at it.

Could you just remind us the capital employed in this business these days? Is it still -- is it still over EUR 3 billion? And do you think this business achieves the cost of capital?

Yes. Well, I can provide you with a number for the net working capital, not with the capital employed. The net working capital is currently at EUR 2.5 billion. And capital employed is most likely a bit higher.

Okay. And do you think it achieves a return in excess of its cost of capital?

Well, that is debatable. But our ambition is certainly to achieve that in the future. As Miguel said, we would consider next steps once the -- any segment would be capital market ready. And let's say, earning cost of capital may be one element of being capital market ready.

And the next in line is Bastian Synagowitz from Deutsche Bank.

My first one is starting off on Decarbonization Technologies. And I guess when we look at your performance, it has obviously improved a lot versus the last couple of years. But then at least when we look at your book-to-bill ratio, it's been just at 0.7x this year, which does suggest some contraction into next year. So could you maybe just briefly update us on what the various trends are there in the businesses which are being casted into that division?

And then also whether you see any improvement or indication of improvement in your order pipeline? Or whether you think you have to step up the restructuring in that business to basically counter the top line trend? That's my first question.

Thank you, Bastian. Well, we can see that over the last 2 years, you remember, we started with Decarbon Technologies. We formed it after me starting to be the CEO of TK AG. And at the time, the growth rates indicated for the green molecules business specifically were super, super positive and the growth rates were double digits at the time projected into the future.

Right now, so over the last 24 months, we have seen because of known uncertainties, the interest rates developing as they did, but also regulations missing in different parts of the world, we have seen that many FIDs were not simply done. Nevertheless -- and that was the reason for then book-to-bill ratio being as it is today.

Nevertheless, if we look to the project pipelines, the project pipelines are very full so that from a perspective of further driving the green transformation in different parts of the world, we need to expect that at a certain point in time, I would think in the next 2 years, we will see growth again here for sure. This is true for what we are doing around hydrogen and green hydrogen. This is true for what we are doing in the other green molecules like ammonia or e-fuels or e-methanol.

And this is also true for our Wind business. A significant part of [ Rothe Erde ] is Wind business, and we are also seeing there the first signs of improvements, specifically in China. So overall, I think it's a temporary development. We will see growth rates -- important growth rates in the next years to come.

Okay. Sounds good. That does sound very confident, which is good to hear. And then my second question is coming back on your guidance, which obviously implies quite a significant improvement in the fourth quarter, pretty much against most market trends, I guess, which you're seeing in the Materials business, maybe also in terms of general market seasonality.

And you mentioned obviously a lot of that is cost cutting driven. You mentioned some other effects. Can I just clarify, I didn't catch that probably. The provision release in Steel you're expecting in the fourth quarter, is that in the magnitude of EUR 50 million to EUR 100 million? Did I capture that correctly?

That's correct, Bastian. EUR 50 million to EUR 100 million. It's personnel expenses, and that's something we will utilize to bolster the remainder of the year. It's one of the levers. And I've mentioned a couple of other levers, strong fourth quarter at Auto, some claims management the ongoing positive or the increasing -- the positive effects from the FTE reduction [ ETC. ] But to your question, it's the EUR 50 million to EUR 100 million.

Understood. And the claims management you mentioned in Autos, is that like a year of the end exercise event? And could you also quantify that by any chance?

Yes. It's -- I can confirm that is a typical pattern of the business towards the end of the year, settling some ongoing claims on demand and volumes. However, I cannot quantify it.

Okay. Understood. Okay. Great. And then maybe moving over to the Steel business. Just on -- I guess, on the restructuring process, so did I understand correctly that you will provide us with an update on the restructuring provisions in the fourth quarter. So those will be booked in Q4? Or may those be actually shifted into the first fiscal year quarter of the next year?

Bastian, the latter could very well be. So as of now, we do expect a 3-digit million-euro number. But at this point in time, we would not expect to book it still in this fiscal year.

Okay. Very, very clear. And then maybe moving over to the other aspects of your plans. So you've not yet determined the business plan. And I guess that means you should also have generally pretty good visibility on the starting balance sheet, which is required for the business as it's being separated, and hence, the amount of cash you will be putting in there to facilitate the separation.

Could you maybe give us at least an early update or broad guidance on where that number could be? Is there maybe at least a floor you could guide us towards, which people should be expecting, also I guess, for the capital markets, it's obviously an important number to keep in mind.

Thanks, Bastian. It's difficult to quantify, but I guess we can confirm that in whatever shape and whatever form the business is going to operate, it will have the required liquidity.

Okay. Okay. Fair enough. But is that a number which you will be able to share with us as well by the year-end?

Unfortunately, I would not expect it to be ready at the end of the year. As soon as we have it, we're going to share it. If you ask me now, probably not until the end of the year.

Okay. Okay. Got you. And then just maybe taking even a step higher. So I guess on the big picture strategic future of the business. So you clearly stated that you're still aiming for a separation and I guess, that 50/50 JV structure with EPCG. Now I guess, at least when we look at the policy side, there's a possible scenario out there where the EU may obviously do something in the next couple of months, which could be very supportive to the Steel sector. And I guess that will be moving, I guess, the NPV and value of the business quite considerably.

And so depending on the outcome there, is there a chance that you may ultimately be ending up retaining the Steel business? And also similar to the put option, which is held by EPCG, do you actually also have a call option, which would allow you to claim back 100% if you wanted to?

Well, Bastian, of course, the considerations on what will policymakers do is one of the elements that we are, of course, working on. We are talking to Brussels. We are talking to Germany in -- or to Berlin in this case in order to get them to understand what we consider the important things that we need to establish in terms of tariffs or in terms of import regulations.

We are -- you know that we have been always very clear on that we are not happy with the current shape of CBAM and the like. So this is something that is indeed one of the very significant elements in order to also get the business plan in shape. And we need to further work on those topics with Brussels and Berlin and then get certainty. And then we will see. So you will certainly hear as soon as this -- regulations are established, you will hear about it, and then we can talk also about the impact on our end.

Okay. Okay. Got you. But I would say like depending on the outcome, and that could be at least in theory, very positive as well for the Steel business. Is there a scenario where you may just say, well, in this environment and with that new framework, you basically feel more comfortable to be retaining a majority?

I would not see any reason right now for changing our way that we defined. And so I would keep it there.

Thank you, Bastian, I just want to move on to the others so that they have a chance as well. So next question comes from Alain Gabriel.

I just have one, which is on the restructuring costs. I appreciate you're still working out the details for Steel Europe. However, for the rest of the business, can you give us some color on the cash restructuring and transaction costs that you are budgeting for Q4, and then for fiscal '26? I would say, mostly relating to APEX, the Marine Systems transaction costs and any other material costs that you are budgeting for the business?

Thanks, Alain. First of all, with regard to Steel, we've touched upon the, let's say, the finalized negotiations. We've also talked about the provision that is most likely to be built next year. And what we've already indicated is that provision is going to be in the ballpark of around about 3-digit million-euro. So that is Steel.

There is also a new transformation for Auto, where we have not yet finalized our quantifications on possible, let's say, provisions. But I can give you a number for the year '24-'25. We would expect restructuring cash out in the amount of around about EUR 250 million. So this year, EUR 250 million.

Next year, possible provisions for Steel in the amount of a 3-digit million number, plus potentially upon further, let's say, confirmation and then quantification, additional restructuring cash out with Auto due to the most recent announced transformation into 4 business units, [ ETC. ] I hope that answers your question.

And for the transaction cost for Marine Systems, any guidance you can give there? And for the other businesses, is there any other restructuring going on for everything else that you haven't really touched on?

Yes. For Marine, ballpark number, I'd say, EUR 50 million to EUR 100 million. And let's check back and then maybe we're going to provide you in the aftermath. But from the top of my head, separation of the segment, EUR 50 million to EUR 100 million.

Thank you very much, Alain. And now the final question for today coming from Christian Obst of Baader Bank.

Just one left. It's concerning the FX impact you have on your top line and your EBIT line so far and what you expect for the entire year, maybe a little bit more specific when it comes to Rasselstein packaging steel, the export in the U.S., how much of the share are you exporting in the U.S.? And is that at risk currently?

Sure. Thanks, Christian. First of all, FX currency impact from the top of my mind, around about EUR 300 million decrease in light of the U.S. dollar development, and that's a major chunk. That's more than EUR 100 million, somewhere between EUR 100 million and EUR 125 million; then the renminbi; and last but not least, the Brazilian real, that is more or less the impact from FX. So it is a considerable amount, but not really changing the overall picture.

With regard to Rasselstein and import or exports into the U.S., it's a small amount of the business. So overall, we are -- although we are experiencing the indirect effects, we are not, let's say, burdened by too much direct tariffs as the amount or the share of steel we are exporting to the U.S. is rather limited. On the exact amount of Rasselstein, I would need to look that up. Maybe we'll get back to you in the aftermath. I hope that is okay for you.

The EUR 300 million, this is a top line impact, right? And what is on the EBIT? The impact on the operating EBIT?

The impact, I mean, it's probably on EBIT is way below EUR 50 million for the entire year.

Thanks, Christian. And with that, we are concluding the Q&A session for today. Thank you very much. Have a great day, everyone, and speak soon.

Thanks, everyone for dialing in.

Thank you. Bye-bye.