ThyssenKrupp Aktie

[Technical Difficulty] EUR 311 million, mainly on the back of the preceding restructuring provisions in Q1 that you're all aware of.

Talking about free cash flow before M&A, that was minus EUR 140 million in the quarter, improving by EUR 140 million year-on-year. That leads to a accumulated 9-month figure of minus EUR 1.9 billion. Overall, important to note that reflects our usual cash flow pattern that will reverse in the running quarter. Miguel has already mentioned that we do confirm our full year guidance for free cash flow before M&A. With regard to our balance sheet, we maintained a solid net cash position at around EUR 2.6 billion. And in order to conclude the financial overview for the group, the key message is quite straightforward. We are executing strongly on performance management and at the same time, preserving balance sheet strength, 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 third quarter. On sales, overall message is that top line development shows a promising momentum. Improvement was especially supported by Material Services, now tk accelis, with positive effects from prices and volumes, while other segments such as Automotive Technology and Decarbon Technologies still faced pretty low demand.

Let's get to EBIT adjusted. Overall increase was mainly driven by steel on the back of restructuring efforts and more favorable raw material costs. In addition, Material Services and Marine Systems also posted pleasant year-over-year increases. These developments more than offset the declines in Automotive and Decarbon Technologies. In short, the quarter demonstrates that our performance measures are becoming increasingly visible in the numbers, even though we are not yet seeing a broad-based market recovery across all segments.

Let's turn to our segments. First, Automotive Technology. The key message for Q3 is that we are continuing to manage through a soft market environment, while staying focused on restructuring and internal countermeasures. Sales remain under pressure year-over-year, mainly reflecting softer demand in the serial business. At the same time, continue to see growth in the aftermarket group and Forged Technologies. Please also keep in mind the M&A effect from Automation Engineering with closing of the transaction at the end of March 2026. Hence, from an organic perspective, sales were rather flat.

On profitability, EBIT adjusted declined in the quarter. Restructuring benefits and our internal countermeasures are visible, but they could not fully compensate the lower volumes and higher special freight costs. On BCF business cash flow, the development was quite encouraging. Lower investments, improved net working capital, both more than offset the earnings decline and restructuring cash outs. As a result, business cash flow improved year-over-year. So, in summary, demand in Automotive remains challenging, but the operational measures are gaining more and more traction.

Let's move on to Decarbon Technologies. At Decarbon Technologies, we're still facing a pretty hesitant project environment, mainly in the chemical plant business. Customers continue to postpone project, which, together with the usual volatility in the project business leads to weak order intake and therefore, decreasing sales. The main driver of the sales decline was plant engineering, and these deteriorating sales negatively impacted our EBIT adjusted in the third quarter. That was also affected by project-related additional costs in the cement business coming from past legacy projects.

Performance measures and efficiency gains resulting from our ongoing restructuring and purchasing optimization could support earnings. However, we were not able to fully compensate for the decrease. Positive news on the last KPI on this slide, DT was able to raise business cash flow, mainly on the back of temporarily favorable payment profiles.

Let's move on to Materials Services, now known as tk accelis. tk accelis delivered a clear earnings improvement, supported by a favorable market environment, especially in North America, but also in Europe. We saw strong growth in sales that was driven by materials and processing business in Europe and North America with significantly higher shipments, particularly in direct-to-customer businesses and on the back of distribution and processing volumes.

Let's take a look at earnings. EBIT adjusted significantly increased due to supportive market conditions and a very strong operational performance with the North American operations delivering the strongest earnings uplift. In addition, our processing business, as well as the European Materials business also performed positively. Talking about cash flow, our business cash flow benefited here from higher earnings, partly offset by price increase net working capital buildout.

Moving on to Steel, Steel Europe. There sales increased in the third quarter, driven by higher shipments, particularly from automotive and industrial customers. However, pricing there remained under pressure, especially in packaging and electrical steel. Moving on to EBIT adjusted that improved significantly in the third quarter and more than doubled year-to-date. That was mainly driven by restructuring measures, our hiring freeze, operational excellence initiatives and lower raw material costs.

Cash flow, our business cash flow also improved year-over-year, supported also by government funding for the direct reduction plan that is progressing. Overall, self-help measures continue to deliver tangible results and help offset the challenging market environment.

Last but not least, Marine Systems, TKMS. As usual, only a couple of brief comments on Marine Systems as all operational details have already been presented yesterday. But it's without saying that we, as a majority shareholder, are more than happy with the development of our segment. Marine Systems continues to build a strong foundation for future growth, supported by an order backlog of more than EUR 20 billion.

Let's move on to our EBIT adjusted bridge to net income. Looking at the special items, we saw a slight net positive effect that was mainly driven by the HKM exit from early July and its implications and most notably, write-ups at Steel Europe of around about EUR 400 million in light of a more profitable business outlook of the remaining segment without HKM. As well as the respective impairment losses of EUR 276 million by classifying HKM as a disposal group discontinued operations. Please note that the actual deconsolidation of HKM with a negative low 3-digit million euro impact will be included in our fourth quarter accounts. The remaining positions are rather straightforward after the financial results and taxes, net income for the third quarter came in at EUR 34 million positive.

Next chart. Our third quarter reconciliation to free cash flow before M&A. As you can see, in the third quarter, we did not face any material net reconciliation items. Investments are net positive in the quarter, mainly on the back of funding for the direct reduction plant at Steel Europe with an amount of EUR 252 million. The M&A adjustment includes the proceeds for the sale of the remaining stake in AST in the range of a high double-digit million euro figure. Overall, that led to a free cash flow before M&A of minus EUR 114 million. While the quarterly figure remains negative, it improved year-on-year and continues to reflect the typical seasonal cash flow pattern.

So, let's have a closer look at our outlook for the remaining year. As Miguel already mentioned, for the full year, we are lowering our group guidance for sales and narrowing for EBIT adjusted, while confirming for free cash flow before M&A. So, let's have a look at the details. For the group, sales are now expected to be between minus 3% and minus 1% versus the prior year. EBIT adjusted is now expected in the range of EUR 600 million to EUR 900 million compared with our previous range of EUR 500 million to EUR 900 million.

Free cash flow before M&A is confirmed at minus EUR 600 million to minus EUR 300 million, including lower restructuring cash outs of up to EUR 250 million, as well as a somewhat lower CapEx guidance of EUR 2 billion to EUR 1.3 billion. Net income is expected to be between minus EUR 700 million and minus EUR 40 million including restructuring provisions mainly at Steel Europe. At a segment level, there are several adjustments that led to the updated group guidance. Let me highlight a couple of them.

We raised our guidance for sales and EBIT adjusted at Materials Services and Marine Systems. We also raised our EBIT adjusted guidance for Steel Europe, while becoming a bit more cautious in terms of sales expectations. Overall, the guidance reflects improved operational execution, while maintaining appropriate caution on market visibility.

And with that, Miguel, up to you again.

Thank you very much, Axel. Let me wrap up today's call with 5 key messages. First, we are changing the setup of thyssenkrupp AG into a lean financial holding company. That transformation is in execution. Second, the tk accelis spin-off will be the next visible proof point in delivering on ACES 2030. Third, on the Steel Europe Capital Markets Day at the end of September, we will provide transparency on the recent progress and milestones that we have reached. Fourth, we will continue to take an individual approach for each business, including the necessary restructuring to secure sustainable success. And finally, we will leverage the opportunities arising from the green transformation and with that, we are at the end of today's presentation. Thank you all for your continued interest and trust. Axel and I are now happy to take your questions. Andreas, back to you.

Thank you very much. We are now coming to the Q&A session. [Operator Instructions] So, the first question is coming from Ephrem Ravi from Citi.

Three quick questions. Firstly, should we see the Steel Capital Markets Day as sort of a prelude for what you kind of have done for Marine Systems and accelis, i.e., kind of a spin-off with holding and then 1:20 shares? Or is this not kind of a signal to the market that that's the current preferred route of how to kind of unlock value in that business? Second question on sort of Steel Europe again, the reduction in sales guidance but upgrade in EBIT guidance, should we kind of take that as more lower volumes, but obviously higher prices and profitability that you're expecting for the last quarter of the fiscal year? And third and final question, sorry to ask this, I know this is a boring and standard question, but Rhine River levels in terms of impact on raw material cost and finished product logistics cost. Could you give us a sense as to how much potentially volume impact or cost impact could be because of that development?

Yes. Thank you very much for the questions. I would like to start with how to frame the Steel Capital Market Day end of September. Actually, as explained, we have been concluding 3 major milestones in steel, which was in December, the agreement on the restructuring plan, then as mentioned, also the HKM agreement and deal. And third, obviously, very important as well, is the European Union tariffs and quota reduction -- tariff increase and quota reduction being in place since July 1. These 3 major events need to be, in our belief, better explained. And that's the reason why we are doing this Capital Market Day end of September in order that the impact from these 3 very important milestones can be interpreted in the right way by you. And that's the motivation for doing this Capital Market Day that we are driving also steel into independence. I think this has been communicated. This is very clear. But we should, first of all, inform about the 3 major things that happened, and we take it from there.

All right. Ephrem, maybe I'll start with your question on the Rhine River situation. That's something we are monitoring on a daily basis. Steel has set up a dedicated task force for that. We are slightly adapting logistics and also taking precautious measures at our production. I cannot yet tell you any potential impact. Let's see what the next weeks bring. But there is a laser focus on that topic and production is all on it. Second, with regard to your question, steel fourth quarter, exactly as you said, assuming lower volumes and somewhat better pricing.

Now the next in line is Dominic O'Kane, JPMorgan.

I have 2 questions. Again, going back to Steel Europe and the -- again, the guide that you've given for the full year. So, I guess my question is, to what extent is the guide overly conservative? Or is it signaling quite significant weakness for Q4? Obviously, if we look at your 9 months realized adjusted EBIT, you're at EUR 373 million. So, you're already comfortably at the midpoint of the range. Given what you're seeing at the moment in terms of the slowdown in Europe, is Steel Europe profitable adjusted EBIT for Q4. So again, I just want to get a sense of are you actually signaling a materially weaker Q4 at Steel Europe than I think ourselves and consensus might be expecting? My second question, again, just maybe going back to the group structure and the success that you've clearly had on TKMS and accelis coming up. How are you thinking about your -- again, whether you -- the 51% long term is the right ownership level? Again, we're at a situation where at the moment, we obviously have kind of peak demand for defense, very, very strong performance for that market. How are you thinking about maybe monetizing the opportunity and the strength that you see for both TKMS and accelis at the moment?

Should I start with your last question? I think it has been a very successful start that we did with Marine System and also we expect a good start with tk accelis with our 51% ownership. And there is no plans in the future to monetize that or to change that so far.

All right. Dominic, let me try to answer your question on our steel guidance. I'd say in your words, it's more caution than weakness. And caution is due to a couple of factors. First of all, uncertainty on energy prices, given the quite volatile situation in and around Iran. Then we've touched upon the Rhine River situation. That's also something we need to monitor. And there is some upcoming and planned maintenance. So that is probably the underlying reason for what we would call more caution than weakness.

Could you maybe just elaborate on the maintenance? How long will the maintenance be affecting the plants?

It's not an overall maintenance. And you're aware that, that plant consists of many huge aggregates. I'd say a major maintenance period is now upcoming for around about 2 quarters. That's something we -- it's a regular business, and that's something we need to manage.

So, that will be Q4 and Q1, just to be clear?

Yes, Q4, Q1 and also lingering into the second quarter.

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

Two for me, please. First one is on accelis and then just a follow-up on steel. So, first of all, in accelis, obviously, a big increase in profitability. And I'm just wondering if you could give us some color on how this might be helped by inventory effects for materials that were perhaps previously acquired at a lower price and are now being sold for higher prices versus how much is actual structural profit uplift from running the business better, perhaps in anticipation of the spin. So that's the first question. Second question is on the steel business. It's a bit of a turnaround here, right? So you previously effectively were looking at giving this away for free. So, you've now got the TRQ, you've got the announced restructuring. Are you willing to confirm a potential profit uplift in steel from the labor restructuring of, say, EUR 400 million to EUR 450 million?

Well, maybe let's start with Jason, this is Axel. Maybe let's start with accelis Material Services. The uplift that we are mentioning, it's -- the majority is based on volume, but it's also due to the effect you've been describing selling materials at higher prices. So, it's a mix of volume and price increases. For steel, can you specify your question maybe? What do you mean with EUR 400 million to EUR 500 million?

So, you're laying off -- you've got, I think, a total 11,000 people who are leaving the business, 5,500 are leaving, leaving, 5,500 being outsourced. If we think about 5,500 and the cost of a steel worker, if we think about the run rate profitability of this business, it could be several hundred millions of euros better than it has been historically. Is that the right way to think about it? I guess I'm just trying to think about the profit potential for the steel business and how it's evolving versus what it was 2 or 3 years ago.

Jason, this question energizes me a lot, to be honest. And I think this is exactly the reason why we are now doing the Capital Market Day end of September because we want to be transparent in what the different buckets will be impacting the bottom line. So, please stay tuned until end of September, and I would like to see you in London, and then we will get you and all the other market participants then informed about what the 3 big things that I mentioned before will be in terms of bottom line and also in the medium term. So, it's indeed something very important to communicate.

And just so that I understand, so historically, there was a dual track here, which was separate the steel business through an IPO like we've done already with Marine, like we're doing with accelis or potentially pursue a trade sale to a third party. Would you confirm that the focus today is very much on door #1?

Definitely.

Next in line is Boris Bourdet from Kepler.

Just as a follow-up on Jason question on the steel CMD and potential spin-off. Would that be a minority spin-off? Or would that be a majority spin-off? Because I remember in the past, you were really much looking to make that business independent. And given the 3 elements you've outlined like the TRQ, the restructuring and the deal on HKM, do you see now the lines moving in terms of potential buyers? That's the first question. And the second question would be on restructuring. I haven't seen provisions for restructuring moving so much quarter-on-quarter. Is it something pending that we should expect in Q4? And maybe a very last one on the DRI plant. I remember the total investment was a gross investments of EUR 3 billion financed up to EUR 2 billion with public funding. I've seen a press release this morning pointing to potential renegotiations. So, what could be the upside here?

All right. Boris, it's Axel. Maybe on the DRI, you're totally right. Overall volume of around about EUR 3 billion funding or public funding is EUR 2 billion. There is no re negotiation on the financial terms or fundings. There is talks around to what extent we need to, let's say, use hydrogen in the first instance. That is something we have been very successfully and very positively negotiating with both the EU on a EU level, but also on a national level. So, from a financing perspective, nothing is going to change, EUR 3 billion overall, let's say, CapEx. And of that EUR 3 billion, EUR 2 billion is publicly funded. So, that is with regard to DRI.

Then your question with regard to restructuring provisions, there is not much more to expect in the remaining year. So, we've done our restructuring provisions mainly for steel in the first quarter. And we have now that is also important to realize in the first quarter, we have somehow anticipated restructuring provisions for HKM. However, as you know, we have now sold our shares to Salzgitter, and that is why there's not going to be any restructuring provisions on HKM anymore. And I guess, Miguel, you're going to take the, yes.

Yes. Regarding your question about a spin-off in steel, majority and minority, I would like to indicate, let's please do step by step. The next step, and that's the reason why we announced it the other day. The next step is to get the Capital Market Day for steel end of September. There, we will inform about, as mentioned before, the 3 major actions that we did put in place. So, the restructuring agreement, HKM and also the increase of tariffs and a reduction of import quota into the European Union and their respective bottom line impacts that we will see over time regarding these 3 impacts.

And then with the CMD being done, we will then take one step after the other. So, no decisions are made. And as I said, we have been making a lot of good experience with getting really very organized step by step, and we will do so the same way for steel.

Next in line is Alain Gabriel from Morgan Stanley.

I have 3 short questions. The first is on HKM and the impact of that business that it had on the Steel Europe. So, now that you're stripping out HKM, can you give us an order of magnitude of the impact of that business upside or downside to your underlying Steel Europe EBITDA or EBIT in that sense? That's one. And then two on TK Elevator. If you were to hypothetically sell your stake today, would you be incurring any capital gains taxes? And then three is on your free cash flow guidance. You've lifted your EBITDA or EBIT, you've cut your CapEx and yet your free cash flow remains unchanged. Presumably, this is entirely a change in assumptions on the net working capital? Or is there anything else that you've changed?

All right. Thanks, Alain. Maybe let me start with HKM. We cannot quantify the EBIT impact, but I think I can give you a little bit of, let's say, of a calibration. We were able by selling HKM, we were able to write up our steel business at an amount of around EUR 400 million. That should give us -- that should give you an impression, let's say, what the impact has been over the past years. So, it's a positive impact on our steel business that we have sold our shares to Salzgitter. Yes, that hopefully, that put that into perspective, HKM. Then free cash flow, it's still -- I mean, we're expecting still restructuring cash out. We have confirmed our guidance, again, minus EUR 300 million to minus EUR 600 million, and we are quite optimistic in order to reach that guidance.

Can you specify your question with regard to TKMS? That wasn't so clear to me.

Yes, you do have it on your statement on your balance sheet at book value. If you were going to sell your stake, let's say, at market value today, would you be incurring any capital gains tax? Or do you have some tax losses that you can write off against it so that you can sell it at market value?

I'd say from the top of my mind, capital gains tax would be insignificant.

And now the last one currently is Bastian. [Operator Instructions] But now Bastian Synagowitz with Deutsche Bank. Bastian, please.

I start off briefly on automotive, I guess, where you've been cutting your guidance. But I guess if we extrapolate what this now implies for your expectations on the fourth quarter, it would still be obviously an improved performance relative to Q3. I guess, usually, there's also a bit of a softening automotive seasonality. So, could you please help us to understand what's driving this improvement? I suppose it is restructuring. But I guess when we look at the overall restructuring cash out, which you're guiding for, I think it's gone down to EUR 250 million from EUR 350 million before. So, is this just a deferral? And why is the restructuring basically the restructuring pace being slowed here? That would be my first question.

All right. Bastian, this is Axel. First of all, automotive remainder of the year, yes, there's still some way to go. But honestly, it's a similar pattern you've seen throughout the past years. And let's say, part of the automotive business is also claims management towards the end of the quarter, particularly towards the end of the fiscal year. And that is something the guys from automotive also pushing on heavily. And that is part of the reason or that's the major source why we expect automotive to come up what we've guided for. So, it's basically short answer is claims management.

Then second part is free cash flow, restructuring, yes. It's not -- Bastian, we're not slowing our pace. It's something -- the EUR 350 million was also -- part of the figures was also related to HKM, which we're now not restructuring, but we're selling. And the remainder is going to become visible also for the next year. So, what we see is our FTE decrease in SE is currently still the majority coming from our hiring freeze, but the real restructuring is more and more kicking in, and that's something we're going to also report to you over the next quarters.

Okay. Great. Very clear. Maybe just given that you mentioned HKM, maybe starting with that as a next question. I guess given that the transaction here is now finalized, can you just update us the -- I guess, the provisions for any potential future payments to HKM, will these sit in the steel entity or in the parent entity, please?

Yes. Thanks for the question. Happy to answer that because we've made a clear cut. We have transferred our pension provisions to HKM. So, nothing is going to sit with steel or with TKAG.

Got you. But I was actually referring more to any potential future payments for restructuring decarbonizations where I thought there was still -- I think you mentioned that in the last call that some of the potential payments would be in a deferred way and come just in the future years. So, I was just wondering, will this be made out of the parent entity or of the steel entity?

You're meaning the pattern, let's say, we are -- let's say, we've guided a low to mid-3-digit million euro number for HKM, and that's going to come over the next 3 years. And it's going to be paid off from steel.

From steel, yes. Got you. Okay. Perfect. And then just maybe looking at steel again and just given the overall refinancing and separation you're currently working on, on a business unit level, can you already give us some color on the starting balance sheet, which you're aiming for, for steel and whether you're planning to equip the entity with a certain portion of your net cash, which you still have on a group level? I guess when we look at accelis as a comparable case, I guess it's been allocated actually with some debt on top of the pensions. And in steel, you've already been investing heavily over the last couple of years. And now the economics are clearly improving. There's obviously a lot of restructuring underway. But then there's obviously the pension restructuring and maybe still a bit of an unknown on decarbonization. So, what are your thoughts here?

Yes, Bastian, I totally appreciate your interest in that question, but it's only -- it's too early to talk about. So, we're going to talk about the right capital structure for the business when time comes. And we're really looking forward to talking about the performance of the steel business in our upcoming Capital Markets Day in September.

Okay. Great. And last one, could you maybe help us with how much out of the EUR 3 billion budget for the transformation and DI plant has been paid already relative to what is still due in the next few years?

Yes. So, first of all, what I can -- again, referring to what I've mentioned a couple of minutes ago, overall around about EUR 3 billion. And of that EUR 2 billion funding. And so far, we have received around about EUR 1 billion public funding.

Okay. And how much have you been paying then on a gross level for the project? So, if you say relative to the EUR 3 billion, how much of the EUR 3 billion have you been paying in total?

Yes. So, around about net payment after funding, this has cost us so far around about EUR 300 million.

Okay. So, EUR 1.3 billion gross, yes, got you.

And there is a follow-up question from Jason. Jason, please?

Just wanted to chat a little bit about the pensions. This is a bit of a bug bear for a lot of people in the market. I think historically, you've said that about half of the EUR 5 billion is associated with steel. Maybe you could give us a little bit of color about how much of the pension is actually leaving with HKM. And then again, as we think about all these businesses being deconsolidated, is it time to start thinking about an attributable pension liability rather than a consolidated pension liability?

Jason, this is Axel. First of all, you're right, pension provisions overall amount more or less to EUR 5 billion, EUR 5.2 billion. It's also true that about half of it is with steel. What has been transferred to HKM is not a significant number. If I'm not mistaken, it's a low 3-digit million euro number. Yes.

Okay. So, again, on a go-forward basis, as we think about all these carve-outs and spin-outs and IPOs, historically, the view was let's deconsolidate steel and we deconsolidate half of the pensions. Is that still a consideration? Or has that moved to a bit of a backseat?

Well, it depends on the capital structure and pensions, as you know, is a part of the capital structure. And ideally, every business, every segment is able to finance on its own its capital structure, so does TKMS and so will do tk accelis. And to give you an example, with tk accelis, we've also transferred pension liabilities that can be, let's say, tied to the business.

So, if we look at the -- because I think it's the annual cost flowing through the income statement is about EUR 300 million to EUR 400 million? Or is it EUR 300 million? And then the cash payments is EUR 400 million. I assume that's broadly correlated with the actual pension liability. So again, if we look at that payment, half of that payment is being made by the steel business. Is that the right way to think about it?

That is absolutely correct.

Okay. So, I guess, again, I think we probably need to go in and have a think about just treating this as 100% consolidated debt. Maybe it feels like we're being a bit too harsh on it.

All right. Understood.

And now Klaus Ringel from ODDO, please.

Just one thing on bullet point in the presentation where you said that you want to leverage the opportunities of the green transformation. Question here, if this is within the existing, let's say, technologies and assets? Or would you also look beyond? So some color here would be appreciated.

Well, I think the green transformation has been driven in Decarbon Technologies on one hand and on the other hand, in steel with the DRI. We have seen over the last 3 years, very hesitant markets in around clean fuels overall and of course, also impacted by the regulations, not clear. So, policy framework is not clear, but also by a geopolitical impact. Having said that, we are focusing, of course, very much still on the technologies that we have currently on hand, and that will be so for the next time as well, as soon as markets stabilize and we have a much better visibility of what will be coming regarding clean fuels, then obviously, situation can change. But for the next coming time, we will exploit the technologies that we have right now on hand.

Thank you very much. That seems to be all from your side. Thank you very much for participating. Thanks for all your questions. If you have follow-up questions after the call, please call myself or the team. Thank you, and have a great day.

Thanks, everyone. 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 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.