Hello everyone, this is Andreas Trösch 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 2025/2026.

With me on the call are our CEO, Miguel López, 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.

In order to ask a question, you have to push the raise your hand icon and we will announce your name and open your line. If you are on mute, you must unmute yourself in addition.

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

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. Portfolio.

In terms of our strategic transformation, we continue to execute APEX 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 the respective stand-alone setup.

At Automotive Technology, we defined and implemented the 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 a majority holding are ongoing, and the respective due diligence is on its way. Let me remind you that we have reached a collective restructuring agreement with IG Metall union in December, an historic milestone for thyssenkrupp.

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 1st, 2026 onwards.

That also means that the slab supply to thyssenkrupp Steel will already end in 2028. Regarding performance, Q1 marks a confirming start into 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 2025/2026. 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 a 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 tons 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, 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, making 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. Now, Axel, the stage is yours for the financial section.

Thanks, Miguel. Hello everyone, this is Axel.

Let me turn now to the financial overview for the first quarter. Despite the market 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 €7.2 billion, that means a 8% decline year over year, our EBIT adjusted increased to €211 million, which is €20 million above last year's level.

Net income came in at -€334 million, mainly... [German: Ist heute wohl öfter so.

Jetzt. Soll ich den Chat schreiben, dass wir die?]

[unclear] [German: Sind wir online wieder? Probieren?

Ja, da ist das Bild wieder da.] Wonderful.

All right, we have experienced some technical issues here. Apologies for that.

I believe that I was talking about the net income, which came in at -€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.

As already flagged in our last conference call, you see a typical seasonal pattern here at the beginning of the fiscal year, and therefore you see at the -€1.5 billion free cash flow before M&A. 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. That cash flow development led to a decrease in our net cash position.

It's now at €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, one quarter.

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 developments, 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 €600 million is more than offset in our EBIT adjusted. This is again a really clear proof point for our increased underlying resilience.

With regard to sales, we saw declines or 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 Materials 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 round about 3% year over year.

However, if you adjust for the negative currency effects, sales were round about on prior year's level. Here, we experienced growth in the serial business that was overshadowed by the decline in the project business as well as from our business unit Springs & Stabilizers.

Let's take a look at earnings. We saw pure performance increase.

EBIT adjusted came in at €20 million. That's up by €8 million year over year.

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 round about -€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 -19% in our first quarter, especially in the water electrolyzers business at thyssenkrupp nucera and in the new build businesses at chemical.

These lower sales led to the decrease of EBIT adjusted by -€33 million to -€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 -€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.

Materials Services delivered higher earnings despite a challenging market environment, particularly in Europe. Sales declined here by -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 €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 a net working capital build-up 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 -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 €216 million.

That is due to more favorable raw materials 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 seasonal build-up of net working capital, and here, mainly in 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 €18.7 billion. 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 €400, more specifically €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 2025/2026. 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 €334 million.

Now, how do you 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. 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. 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 -2 to +1% compared to prior year, unchanged. EBIT adjusted, as previously guided, will end in the range between €500 and €900 million.

Free cash flow before M&A is expected to come in between -€600 and -€300 million despite our Q1, as explained, including expected cash outflows from restructuring of up to €350 million. The €350 million cash outflows from restructuring are already included in our guidance of -€600 to -€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 €1.4 to €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, -€800 to -€400 million, including restructuring expenses mainly at Steel Europe. 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 shareholder.

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 and 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 Bourdet. Please, Boris, go ahead.

One second, we will unmute you.

Yeah.

Yeah.

Hi, thank you for taking my questions. I have three.

The first one is on the Jindal discussions. There were various recent rumors that Steag might be interested also in the steel business.

I would be interested to get an update on the process, where are you and what's, according to your knowledge, the most likely timeline 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 at the fact that there could be some upside going forward. Does your current guidance include those supports, and if not, what could be the potential uplift?

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

Thank you.

Thank you, Boris, for your questions. I start with the first one.

We are in the due diligence process with the Jindal Group, intense conversations. Of course, you always understand that we cannot do any kind of statements around timing.

Of course, it's also important to understand that the highlight of last week has been HKM, the agreement that Salzgitter will continue the company on its own. Of course all this influences of course also the due diligence process because that's a new factor coming now in, and certainly positive.

Discussions ongoing and we will let you know as soon as something is more concrete to be reported. Yes, your second question, it is expected that we will see improved pricing after the tariffs will be introduced in Europe, and also 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.

Sure. Thanks, Miguel.

Boris, you've asked for the electric compensation and what's the share is for the let's say increase also in EBIT. It's basically three 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.

Hope that gives you an indication.

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

Now, that was a low-three-digit-million-euro number.

Very good. Thank you.

Sure.

Thanks, Boris. Now the next question come from Jason Fairclough.

Jason, go ahead. One second.

Can you unmute yourself, Jason? Doesn't he hear us?

If not, then we try the next in line and come back to Jason in a second. Next in line is Alain Gabriel.

Please, Alain, go ahead.

Hi, thank you for taking my question and good morning, everyone. 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, 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? Thank you.

All right, thanks, Alain. Potential cash outflow for HKM, a term sheet has been signed, and as we stated, it's going to be a low- to mid-three-digit-million-euro number, and 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.

You would see a sequential cash-out, and we're going to start with the smaller part in this year in case we're going to close the deal, and that is expected for June of this year. Sure.

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

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? Oh,

there's still a couple of variables also to be negotiated in terms of supply from HKM. It's too early to tell.

Understood. Thank you.

Sure.

Thanks. Now let's try Jason again, Jason Fairclough.

You unmute yourself? All right, well then, yeah, let's try again later.

Now we're switching over to Bastian Synagowitz. Bastian, please go ahead.

Can you unmute yourself, Bastian?

I think now the button has been cleared, sorry.

It was locked before. That's all right.

Now we can hear you.

Good morning and thanks for taking my questions as well. Maybe firstly starting off on the strategic plans you have for the steel business.

I guess maybe looking at the broader market, 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. Can you confirm that you're basically seeing a positive momentum here in these talks?

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.

Thank you, Bastian. Obviously a very relevant strategic question you raise.

It is quite clear that the sentiment, you've seen that also in all the steel companies that are publicly listed, 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, 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. 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.

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.

Understood. Maybe just looking also at the recent news around the possible plans to delay the phase-out under the European ETS scheme, I would think that that must be quite positive news for you as well in terms of the capex perspective of the business, and in that sense probably in the context is another derisking factor for the unit.

Would you agree with this?

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

Great. Then maybe lastly, one more technical question just on the restructuring cost you're expecting.

I think you're now guiding for €700 to €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?

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.

Vast majority is Steel.

Okay. The HKM portion, however, that does not include the low- to mid-three-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.

Got you. Thanks.

All right, thank you, Bastian. Now again trying Jason.

Hello! Third time's lucky.

Excellent! There he is.

Yes, good morning, guys. Thanks for the presentation.

Hey, look, a couple quick ones from 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 Materials 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?

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 round about €2 billion.

I think that's a certain expectation in the market around let's say further developing TKE. 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 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. Working capital efficiency is a part of it, and yeah, 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, that'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.

Can you hear me?

Yes.

Thank you. I was having technical problems for 30 seconds.

Jason, on your question around what portion 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.

Okay. Could I

just follow up on the Materials Services? It's an interesting phrase you used there, working towards capital market readiness.

Should we read from that that you're considering a potential IPO or sale of that business?

No, it's part of our overall strategy that we want to enable our businesses and 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 said, no final decision not yet taken, but we're working hard on let's say getting all ducks in a row.

Thanks very much. Glad we could make it work the third time.

Thank you.

You're more than welcome.

Thanks, Jason. As a reminder, if you want to ask a question, please push the raise your hand icon on your Teams, and next follow-up questions coming from Alain Gabriel.

Alain, please go ahead.

Thank you for taking my follow-ups. 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 item 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?

Thank you.

Sure, thank you, Alain. You'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.

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. 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 €2.4 billion, and with regard to I think you've also asked for restructuring provisions, that is something we have guided around a mid- to high-three-digit-million-euro numbers for this year.

Thank you.

Sure. Thank you, Alain, 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.

Thank you very much for participating in that call and have a great day. Thanks.

Thanks, everyone. Bye-bye.