Good afternoon, ladies and gentlemen, and a warm welcome to our first quarter to third quarter results of the business year 2025/2026, the first nine months of the actual business year. With me is Herbert Eibensteiner, our CEO, and Gerald Mayer, our CFO, who will give you a brief overview of what has happened in these first nine months, and we will be happy to answer your questions afterwards.

Herbert, please feel free to go ahead.

Thank you, Peter. Good afternoon, ladies and gentlemen, also from my side.

I will jump right into the presentation, and for those who are not so familiar with voestalpine, I would like to give a brief introduction. voestalpine is a global special metals and steel company and an industrial group, and we combine this steel and metal production with processing and engineering competence.

From this expertise, we develop these special high-quality solutions that offer our customers competitive advantages. We are a leading partner for high-tech industries with high entry barriers, such as aerospace, automotive, or railway systems, and we are stock-listed since 1995 and committed to value creation for our shareholders.

What was happen in these first nine months when it comes to the global global economic environment? Let me start with Europe, which is the biggest market for voestalpine.

In one word, relatively weak. We had from the beginning of the business year relatively subdued economic development, and only in the last week, weeks or days, we see a slight upturn in industrial production in Europe.

When we come to North America, you know all the action around tariffs. We have still a robust economic growth, but we know that this is mostly driven by this high investment in the tech sector.

In industry growth is by far by far weaker. When we go to or look to to Asia, in particular China, we see a relatively stable economic development, and this is supported mostly by exports into the rest of the world, also because even even more because of of of tariffs.

South America, which is Brazil, the biggest market for us, we see a reduction in economic sentiment why we have this increase in interest rates, and we see strong competition from Chinese imports knowing that Brazil is not protecting its its borders and and trade flows. Let me come to the to the highlights of the first three quarters.

We had very solid results in the first nine months in a relatively challenging environment. I have mentioned that, and I think it's very positive that we have a very very strong financial position.

Gerald will present it in his part of the presentation, and for me it's very important that we can show again strong cash flow development also in in the last in the last quarter. Our markets, railway infrastructure, aerospace, and warehouse and rack solutions, are unchanged are unchanged positive, good development.

I would say it's best to describe the rest of the markets is that it's a stable demand at low level in mechanical engineering, construction industries, and we have a mixed development in automotive industry. On the one hand, steel steel flat steel, which is very positive, mainly driven through gaining more market share, and the automotive components business is a bit weaker.

Coming from all these restructuring measures we have implemented, we see also a decreased number of employees compared to previous compared to previous year. What is still our strategic focus?

These are three pillars. The first is more short term.

We have these reorganization measures in place. We do also portfolio optimization, portfolio management.

We have sold Buderus in High Performance Metals, and I think in the last days you have heard that we also have always also divested Böhler Profil in in January, which is signed but not closed so far. I think the the biggest part of reorganization is automotive components with all all its sites sites worldwide, but also in High Performance Metals again, streamlining the warehouse structure, streamlining the sales structure, and also in all those activities a focus is efficiency, efficiency, efficiency.

We are we are quite good on the way, and all the programs are in in time. We do not forget our growth activities, which are strategically is Railway Systems, Tubes & Sections, Warehouse Solutions, and Aerospace.

We are focusing also in new regions for us in attractive regions, and this is India. I will come afterwards in the presentation with a bit more information.

The third pillar is this decarbonization projects we have running on two sites in Austria, where we want to replace two out of five blast furnaces by electro-arc furnaces, 1.5 billion, and I think all these projects are in time in time and on budget. We, in a year from today on, we will start the ramp-up, for instance, in both activities for this greentec steel projects.

Let me come to three highlights. I think what to give you some positive impressions what we what we are doing or what we have done.

That Railway Systems is a very international business, where we do business all over the world, but also in in the small Austrian railway markets. We have recently closed closed the project in in Austria, Koralmbahn, which is a 35-kilometer-long tunnel, one of the longest worldwide, and we provide or we provided for this project 290 kilometers rail and 235 turnouts and all the digital monitoring system.

I think that's a quite positive project for of voestalpine, and we have numerous other international railway projects all over the world, very important for us. Warehouse & Rack Solutions, a bit smaller as a business, but also with very positive projects.

Currently, we're working on a on a high-bay warehouse in Turkey, the biggest we have ever built, 230 meters long, 80 wide, and 40 meters high with thousands of of pallet places, and a similar project in Czech Republic for a tire producer. This is with 50 meters even the highest even the highest we have ever built.

You see, even in in a very traditional business, there is every year new new demand in bigger and more complex projects all over the world. I have mentioned India before, for us at the moment a relatively small market.

We have only 190 million revenue there, five location production sites with with 1,000 FTEs, and we we have already a turnout activity there, but we want to expand this engineering and design capabilities in India with a couple of of people in in India, which are trained which are training the the local local guys to improve our footprint there. First production site is is planned in special tubes, special sections.

Most of you know that that we have a standard procedure for that: 20,000 square feet building, then adding three, four machines. After five years, we fill up this facility, and then we think of of the next steps.

We will start that next year, I think, and we are growing in aerospace supplies in India, where we have see more and more activities for delivery to the OEMs, and we have achieved the first important approvals so we can deliver to the producers of aerospace airplane parts. Also also, we have a welding consumables facility there.

We want to expand that. The market is growing.

Two two topics: railway, very important for us; warehouse, very important for us; and geographically, India is small, but will develop steadily in the years to come. Let me come to a quick view on on the divisions.

Steel Division, very very very strong very strong performance in a relatively weak economic environment. We we faced a very good demand from the automotive industry, I have mentioned before, that I think that we we gained market share when it comes to higher higher quality steel sheets and also in the energy sector, which is mostly heavy plates.

In all the other markets, mechanical engineering, building, and so on, I have mentioned it before, with a relatively stable and on a lower level demand. Market segments in or sentiment in in the steel sector improved after the announcement of of the EU safeguard measures and CBAM.

I think we will discuss that for sure when we come to your to your questions with a positive outlook outlook for the remainder of the year or and into into, especially into next next years next year to come. When you look at the EBITDA figure with more than 13%, I think considering the time we are in, a very good result.

High Performance Metals, a bit different, with a very weak economy and uncertain market condition with a high import import pressures import pressure, especially when it comes to tooling and industrial parts. Oil and gas was impacted by this low rig count, by with low exploration.

Aerospace, on the other hand, very strong development in in Europe, and in the course of the year, we see a a very good improvement from the demand of of Boeing. We have got additional additional volumes, additional contracts in this in this segment.

High Performance Metals is very important part of our reorganization plans, and we see this first positive results out of that when you consider with decreasing volumes and the results remain steady. For me is that that the reorganization and restructuring is working.

We, as I mentioned before, we built a new sales organization, and most of that is is already implemented, and we will see the positive results into next year. Even in this difficult situation, we have this 7.6% EBITDA margin.

Metal Engineering, Railway Systems, the biggest part of Metal Engineering is Railway Systems with good performance. We have typical seasonal effects in the winter months, this this year maybe maybe a bit more.

Industrial Systems show different performance when it comes to Welding, relatively stable and satisfies satisfying levels. On the other hand, we have Tubulars, which is heavily impacted by the US tariffs.

This is OCTG business, and half of the business is US business. We have again reduced our volumes there.

Wire is operating in in in in a very weak market environments, but in the course of the year, we have at least increased the volumes. On the price side, we are working actively, and the efficiency In all these activities, we have implemented efficiency programs, and everything is well in in place and on schedule.

When we look at the figure, the division has 8.7% EBITDA. We have promised you that we give you a a deeper insight of the Railway Systems unit, which is the biggest part the biggest part of of the Metal Engineering Division, a very important driver also for our long-term long-term growth ambition.

This business in this business, we are a a full service provider globally of railway infrastructure solutions. The biggest part is turnout systems with more than 60% of sales, and we have very good development in all markets globally.

It's not only replacement and maintenance, it's also new new projects, new activities. Rail Technology, rail is a bit below 30% of sales with ongoing solid performance.

Main market main market is is Europe. Fixation, new new business for us, but again a very positive development, especially in Central and Eastern Europe.

This is a part of the business we want to grow in the future as well. Signaling has grown quite significantly in the last years, again already 6% of of our sales, a very good development, and we are delivering at very good level.

You see when you see this 10.3% in EBITDA margin, you you are aware that this is the most important part of of this Metal Engineering Division. Metal Forming, as I as I mentioned before, automotive components compared to that what we see in the Steel Division is weaker.

We we are mostly focusing on European car maker. In Europe, we see this 12 million cars and not not more.

Even the US tariffs had an impact in our North American market or business in in Automotive Components. As I mentioned before, we are in a deep reorganization part, and it's clear that we we have a There is a way to go, but we are we are sticking to our plan and so far on on on time.

Also, we see here the first positive the first positive results, although we have an outflow of money or costs for restructuring in in this area. Tubes & Sections, overall solid performance.

We had a slowdown in the second half of the year after the summer because of some some delayed projects. We will see that in the in the fourth quarter, more or less good good results with a bit lower volume.

Precision Strip has improved in the course of the year, also profitability-wise. Warehouse & Rack Solutions, I have touched that, very strong demand, long order book also for next and for the next year and even in in 2027.

EBITDA margin here because of the weakness of Automotive Components with 6.3%. This was a very brief overview of the divisional developments, and I would ask Gerald to guide us through the figures.

Thank you, Herbert. After this, as Herbert said, brief overview, I would say it was even comprehensive.

I would like to share with you how this is reflected in our financials. We have in front of us our table here with our key KPIs, you see there that revenues are down roughly €600 million.

€450 million out of this €600 million are referring to lower prices, another €50 million are referring to a weaker US dollar in particular. We had higher volumes, this came with plus €120 million.

Then you remember that we sold last year Buderus Edelstahl, and they had an impact last year of €220 million, this is a reduction which we have, of course, then in the first nine months of 2025/2026. Talking about our profitability, you see that all the lines are in green lights on, we are up in all of these line items.

EBITDA is at €1 billion, a little bit above €1 billion compared to €970 million last year. EBIT is up €470 million compared to €390 million last year.

In particular strong, as also Herbert explained, was our Steel Division operationally. We are up in HPM Division and in Metal Forming Division, also, of course, partly driven by negative one-offs last year.

We talked about restructuring efforts in our Automotive Components business unit. I talked about the sale of or the divestment of Buderus Edelstahl last year.

This had a positive impact this year. Metal Engineering was a little bit weaker compared to last year.

I will talk about that in some moments. What is interesting here on this table is profit before tax.

It's significantly up. There's one main reason between EBIT and between profit before tax: it's our financial income.

We reduced our net debt by roughly €300 million if I compare an average the first nine months last year to the first nine months this year. Also interest rates are down, as and this had a significant impact this year and so therefore €120 million up.

On the other side, talking about profit after tax, you will realize immediately that we had quite a higher, let's say, perhaps an unexpected high tax rate. Last year it was very positive, a very low one.

Talking about last year, the main impact was that we recognized taxes for prior years last year, about €20 million. This year it's the other way around.

We had tax losses, as I talked about that also in our half-year presentation, in Brazil and Germany in particular, where we did not recognize tax losses, and therefore the tax rate is above 30% for the first nine months. Talking about the first bridge, 968 to 1 billion roughly, you see here the significant impact of lower prices in the first half and positively compensated, at least partly, by lower raw materials.

The gross margin is down €137 million, roughly 60% attributable there to our Steel Division and 75 to our Metal Engineering Division. Out of this 75 in our Metal Engineering, I can share with you that a stake of €50 million refers to simply higher tariffs, to the US tariff situation in our Tubulars business in Metal Engineering.

Higher volume and mix effect, which is positive there with €73 million. In particular in our Steel Division, we have had a super capacity utilization rate in the first nine months, it came with 300,000 tons higher volumes, this is more than €100 million.

The mix effect is a little bit negative there in Steel Division. In HPM Division, we lost some volumes compared to last year, this had a negative impact there.

In total for the group, as I said, €73 million plus. Miscellaneous, also as I mentioned here, the part of miscellaneous plus €134 million.

We had, of course, the impact of Buderus. We had the impact last year of our restructuring or reorganization efforts we had in Automotive Components.

On the other side, inflationary effects were compensated by our cost, let's say, efforts we had all over our group. This is, in brief, bridge number one.

Bridge number two, I share with you the deviations of the respective voestalpine divisions. You see there that we had this positive development in Steel.

As I mentioned before, higher volumes, lower prices, negative mix effect, but positive also optimized cost effects, ended up in €50 million plus. As also last year was a very positive one, and here we are doing even better.

We are very proud of the performance here of our Steel Division. HPM, as also Herbert said, reorganization is on track.

We have positive effects there which compensated for the lower volumes. We still have and facing headwinds in HPM's markets.

It's turning a little bit at the moment, and we think we bottomed out. The last months were a little bit better in terms of order intake and also in terms of turnover, we see some slight improvements there at the moment.

Market-wise, in the first nine months, it was weaker compared to prior year. We also talked about reorganization of several logistic sites there.

We reduced manning, this will have also positive impact in future, and had first positive impacts in our first nine months here. Metal Engineering, I mentioned, this is the only division where we lost a little bit ground, at least when we talk about results compared to prior year, we are down €79 million.

In particular, I would say the and it's obvious, the main part there is the tariff situation in the US. We published that we reduced manning in our Tubulars business unit in Austria, and this is simply the only reason there is lower tariffs and a little bit, of course, also the rig counts Herbert mentioned before.

In the business unit Wire, also we're facing headwinds from the markets. Very solid is our Welding business unit in Metal Engineering, and we also were talking about Railway Systems before, which is strong, stays strong, very solid.

Of course, we also have some cyclicality or seasonality in there, but very solid, and we have for sure a prosperous future in front of us in Railway Systems. Metal Forming Division, last but not least, plus €21 million.

If you look here at our business units, we are a little bit weaker in Tubes & Sections, which is the biggest business units there compared to prior years. I would say in total it is solid, but also some headwinds in this first nine months.

We expect also a good future there. Automotive Components was touched by Herbert.

We closed Birkenfeld. We have now 200 people less just because of that.

Very positive is Precision Strip and Warehouse & Racks, as Herbert shared with you some moments ago. Very positive cash flow situation.

What you see here is the summary actually. Cash flow from results is €873 million.

I would like to add here the €228 million from change in working capital, if you add this up, we are above our EBITDA level. It's clear so that we had very positive impacts there from working capital initiatives.

I think, yeah, we did a good job there. We had some negative effects also in there because we had volumes picking up, for example, in Steel Division.

On the other side, positively, we optimized and we continue to optimize in HPM, also in Metal Engineering, and there's more to come also in Metal Forming. Investing activities, you see here that we are exactly at the level of our prior year.

Our guidance of €1.1 billion for the full year, you immediately can see that we are not at the run rate for let's say what you would expect perhaps for the first nine months. Our guidance stays at €1.1 billion at the moment as our big investment projects are up and running and are on time and on budget, actually.

Of course, it is milestone-driven, and you never know exactly do you have a cash out then end of March or is it beginning of April or whenever it is. It is, but we stick to this €1.1 billion in terms of guidance.

What you also have to take into account if I talk a little bit about guidance, and I would like to do that now here, that in the fourth quarter, we always have our cash outs for our CO2 certificates, ETS cash outs, which we pay normally in Jan. This is extra €180 million roughly, which you do not see in the first nine months, and the additional cash outs for CapEx as I mentioned before.

This leads then to the guidance of €1.1 billion or another 350 to go until end of our business year. It should stay a positive free cash flow, and we also expect a slight positive free cash flow in our fourth quarter.

Talking about our solid balance sheet, about our financial structure there, what you see here and I share with you that we reduced since the beginning of the year net debt by another €200 million roughly. Our equity position is right now 50% or €7.6 billion, and gearing is down to 1.0 net debt to EBITDA or 19%.

Very solid. We think, given the big projects which we have in front of us, given the idea also Herbert shared with you talking about strategic things that we have some growth segments in front of us, a lot of uncertainty, we are convinced that a strong balance is a good and necessary foundation at times like this.

This was my summary, and Herbert will now continue with the outlook.

I think the outlook is not really a surprise for you. We think that the global economy has more or less adapted to the after the imposing of this tariffs in the US, and we think that more or less the trends will continue.

What we have seen before, automotive industry remains on current levels, as I mentioned before, this 12 million cars a year. Construction, mechanical engineering, consumer goods, more or less stable at current levels.

Demand from the conventional energy sector for pipelines will remain strong in this fiscal year, but we see no pickup in exploration activities, which would be positive for OCTG. Stable situation, but we see positive momentum in railway infrastructure.

We have a good order book in Aerospace and also Warehouse & Rack Solutions. We can say that we are booked quite well, and all this implementation of reorganization works quite well.

We can confirm the guidance of EBITDA between €1.4 billion and €1.55 billion. That was our outlook, and we are happy to answer your questions now.

Yes, good afternoon, everyone. I have two questions from my side.

The first one is starting with the guidance since that was your closing remarks. Your steel business is highly levered to the improving spreads in Europe.

The guidance for Q4 may not have fully captured the extent of the price action that we have been seeing recently in Europe. Can you help us better understand the drivers between volumes, pricing, and costs as we look at your steel business beyond Q4, i.e.

into Q1 fiscal '27 and beyond? That would be my first question.

To a certain extent that the most recent pickups are in our pricing, because we have it in our yearly contracts and also here and there in quarterly business. When you ask beyond Q4, we have all this picture in mind where we have CBAM now since January.

We have this safeguards in front of us. We think that safeguard will be implemented with 1st of July.

All the infrastructure programs in Germany, maybe the first defense spending is in front of us. Surprisingly, the Commission is talking about or discussing about how we proceed with the free allowances, CO2 allowances.

I think that's quite a positive momentum into next year, but we have to say, there are two scenarios: a scenario with a quick pickup of prices, and there is a scenarios with a steady development of steel prices. I would say we think of this steady development in the course of the year considering that safeguards will be into effect in July.

Also the infrastructure measures we think, and I have presented this also in last quarter, we think that the first bigger projects will come during the summer or after the summer. I think, and we have with our how should I say, our contract structure, we have a certain time lag, we are now locked in with our yearly business, where we have achieved a certain improvement, but we are then locked in.

We have half-year, this is 40% of our business, 40% of our business is quarterly business, where we are closer to the markets, and the rest is then half-year business, we will see a certain time lag. We will see improved prices in the course of the year with this before-mentioned time lag of voestalpine.

I think it will improve, but this is how we see our guidance in the course of the year. We know that we have into next year this project business in heavy plate, which is, and we have some delays in projects.

We know that into 2027, there are big big projects again. I think we will come through this year 2020 2026 with slightly improving prices for voestalpine, maybe a bit behind the market because of the things I mentioned, but we will then fully benefit in 2027 from all this positive effects.

Thank you. That's clear.

The second question is on HPM, which has been a drag on the business for the last few quarters. You are clearly doing a lot of effort and progress in restructuring the business, but ultimately we may need to see an improvement in, let's say, automotive tooling, industrial CapEx, and other end markets.

Are you seeing any early signs of restocking or improved order intake? I appreciate the outlook for the business may not look great now, but at least any signs of green shoots that you are seeing, or do you expect a more prolonged demand trough?

Then an extension to the question: what utilization rates are you currently running at for that business? Thank you.

The utilization rate is relatively low, I would say, at 80%. There is room to improve.

That's the reason why we make this efficiency measures. I would say, there was a sentence in our presentation, slight improvements, but to see that we see a quicker recovery, I think it's not the case.

We see good products in China. We see this better projects in aerospace, but we see this improvement in results are mostly coming from the restructuring part.

I would like to add one sentence there. I think we also really working hard there in reducing working capital.

By doing that, of course, we produce also less. We expect also a positive impact there next year.

In the last months, in particular step by step, we saw some small signs. You were asking about small signs of improvement in tooling.

Yes, we do see that. In my opinion, we bottomed out there and it should go up.

At least this is our take as of today. Means restructuring is going as planned, and I would say we will also see a higher level of production, and so we clearly expect an improvement there for next year.

You were asking the last times what is this midterm, long-term outlook there. We stick to that, in three years we will have this €400 million level of EBITDA.

Thank you. Thank you very much.

Yes, hi. Thank you for taking my question.

First on the EBITDA guidance, I was wondering why you did not refine a bit more the full-year guidance now that we have only one quarter left. Put another way, what would drive the EBITDA to the low end of the guidance and what you think would drive it to the high end?

At this stage, with the visibility you have, do you think the top end of the guidance is more than likely?

Tristan, I think a fair question, and we were really thinking about that. You saw that we signed to sell one of our companies in HPM Division, and our guidance simply covers both scenarios: do we close or not close this deal?

If we close this deal, we are more at the upper side; if we don't close it, we are more at the lower side of our guidance. This is actually the take there, and you could split it, yeah?

Is it 1.4 to 1.475 or is it 1.475 to 1.55? It is, and we simply don't know if closing will happen or not.

Okay. All right, no, that's very clear.

Then on the auto contract negotiations, I think you mentioned it, I would just wanted to see if you could add a bit more color. They have concluded, the vast majority of it has concluded already, you're still not negotiating?

Were you able to recoup the year-on-year loss you had last year, or is it going to be more the increase you managed to lock in? Is it more type of a mid-double-digit increase for this calendar year, well, and also if you can share some outlook for auto demand and volumes, not necessarily for fiscal Q4, but for the calendar year 2026?

I think we talk about Steel Division. I think we will be fully booked in our automotive business.

We have this contracts. We do not everything in January, we have also in April and June and even in the fourth quarter in the third quarter negotiations, but when you put everything together, the bigger part is negotiated in January.

Yes, we achieved a plus in our yearly auto contracts. I think volume-wise, we got a bit better mix.

That's always the third part. We are talking about volumes, mix, and prices.

Yes, we achieved a better mix, and I think we are fully booked in auto. I think that's the overall picture.

When you would consider negotiations in October, we would have a reduction, and with the improvement and the announcements of safeguards and whatever, we could achieve a plus in our auto contracts.

All right, that's very clear. Maybe a last question if I can squeeze that in.

The heavy plate business that's been really successful in fiscal 2026 on the energy side, you mentioned some delays, should we expect the performance in fiscal 2027 to be not as good as what you've seen in 2026?

Yes. We are fully booked till the end of the year, more or less, and in the second half of 2027, we see some delays or postponing of projects into 2027.

This will be the difference between 2027 and 2026.

It's more of an issue of maybe volumes rather than the margins themselves?

No, it's no margins squeeze, this is a project business, and either you get the project or it's postponed or not available. In this case, it's postponed into 2027, and we think it's not lost.

Far, this is the reason why we are for 2027 quite 2027/28 quite optimistic.

Okay. All right, perfect.

Thank you. Thanks a lot.

If I just think about the interplay between your EBITDA, your cash flow, and your balance sheet, so as we enter calendar 2026, I think there's a runway over the next couple of years where it's reasonable we can start thinking about maybe a €2 billion a year continuing EBITDA profile. Obviously with the Capital Markets Day in October, you unveiled a new dividend policy and gave more details around your thoughts on the balance sheet.

My question is, given what you've reported this morning, we're now sitting in a situation where have 1 1 times net debt EBITDA, should we start to think about potential deleveraging of the balance sheet from this point forward? Therefore, how should we think about your use of the balance sheet as we look into 2026 and 2027?

Thank you.

Let me take this question. I think what we said in our Capital Markets Day, nothing really changed.

We are on track to all we said, we really try our best to deliver there, and I think we are well on track there. Talking about the next years, we'll see what really will come.

I think Herbert explained a little bit our view and our take there, and I think we have to wait and see a little bit how things actually are really developing. In terms of debt level in our balance sheet, I think in particular in times like that where uncertainty is high, it's better to have a little bit more deleverage perhaps balance sheet, but we are more or less there where we should be.

There is also some room for growth in there. This is also clear, and I think we also talked about the three areas where we want to grow, and we simply want to be also ready for that.

I think everything unchanged. Our policy in terms of capital allocation is as presented, including dividends, as presented during our Capital Markets Day, no real change.

We simply deliver what we promised, this is our take there.

If I could just ask one additional question. You've provided us with kind of free cash flow projections for FY '26.

Is it too early to say whether we could think about a similar number for 2027?

Thanks, yeah. What I can share here at the moment, we are right now preparing our business plan for the next year and our budget.

Our take there is next year, one thing is clear: we will have, I would say, in terms of CapEx or cash flow from investing, we will have a similar level of like we have this year. 1 150 is still our guidance for next year in terms of cash flow from investing activities.

In addition to that, we know that we have to reline a blast furnace, for example, in Donawitz in our plans, there are some extraordinary things which lead to some cash out. Our clear plan is to deliver again a positive free cash flow.

Will it be at the same level as this year? I would say it is a little bit more limited to optimize working capital in addition to what we did the last 18 months.

I think we achieved a lot there, and we will not see the same magnitude again. This is not realistic in my opinion.

It should stay a positive free cash flow, in particular driven by the two divisions which did not contribute that much in the last years. Means this is in particular now Metal Forming and HPM Division.

For the reasons I just mentioned for Metal Engineering, I expect here a little bit less contribution, and also from Steel Division here also we are peaking in terms of cash outs for our investing activities.

Excellent. Thank you.

Good afternoon, all, and thanks for taking my questions. Actually, maybe I'll bring one question forward given that we're already on the topic of capital allocation.

Maybe just following up on CapEx specifically. I guess at the Capital Markets Day you gave this guidance for €1.15 billion CapEx, and you said that also is a good assumption for the midterm.

Of course, there's the €400 million decarb CapEx which will start to fade over time. My understanding is that you may have sharpened your midterm plans on CapEx a little, could you just please update us on what your CapEx thinking is once the decarb burden eases?

Then briefly also on buybacks. I guess given your balance sheet, given that you do expect another positive cash contribution next year as well and I guess the outlook just generally looks quite positive, would you still consider buybacks as well if the time is right and balance sheet and cash flow do allow it?

Thank you.

We did not make our mind about buybacks and so on. It still stays as I said.

I simply would like to confirm now what we said at our Capital Markets Day, and let us start to present and to deliver something for the next year. In terms of midterm outlook in terms of capital expenditure, very similar to what we said before: 1 150 for next year is what we assume, 1.1 for this year, as I think we also shared with you last time.

Then I would expect it goes more to €1 billion or a little bit below €1 billion for the future, and this is then roughly at the level of our future depreciation when we start to depreciate also the new projects. This is roughly how we see it at the moment.

Of course, we need some room for perhaps some maneuvers in the future.

Understood. No, absolutely understood.

I think you should probably provision for a bit of flexibility. Then maybe just lastly on I guess demand also in the rail business, which obviously is the business where people turned quite positive a year ago.

Could you just go a bit more into detail what you're seeing there? I guess the last calendar year quarter is always a bit weaker, but do you now start to see more activity coming through in the German market as well?

We got again a frame contract in Germany, and so it was a bit weaker in autumn, I would say, October, November. The management change and all those things, I guess, was the result.

What we see now is that steadily, I would say, not at once, steadily new demand is coming into this frame contract. I assume that Deutsche Bahn is well aware that repair measures will also be very important in the future.

I think it will be a normal business year in Germany, and everybody who thinks that Deutsche Bahn has stopped repairing the railway infrastructure is for sure wrong. We will get this project on stream not immediately, with a certain time lag, and as I said, this infrastructure projects will then come more and more in the course of the year.

Understood. Thank you.

Good afternoon and thanks for taking my question. I got one left.

Maybe if you could spend a few words on your capacity utilization rate at your steel operations, and I'm referring especially to the capacity of displacing potential lack of volumes coming from imports, should, as the estimates say, the import level be reduced by around 10 million tons given the new trade measures and CBAM into the future. Is that something that you're confident in?

I think this is a good figure. We know that the cutoff of this quarter regulations is around 12 million 12 million tons, which is 10% of the actual production in Europe, roughly.

I would say that what leads to this higher capacity rate in Europe and the expectation is that the prices are rising. I think that's a very strong trade measure, a safeguard, and it's not finally decided, but we will see it in July.

In combination with CBAM and all the other topics I mentioned, infrastructure, maybe the first defense spend, this will improve the economy in Europe. All in all, in the next two years, I would say, very positive, especially 2027.

Our utilization was relatively high. There is always room for different capacity, but this will be around, I would say, 300 300,000 tons, which is always possible to produce more.

I think we will fill up our capacity in our steel mill relatively quickly.

Sorry, just to confirm, you can add 300 to 400 kt per annum should the market demand that volume?

Yes.

Great. Thank you.

Yes, hi, thank you for taking the follow-up question. It's just on there's been a lot of news flows and news around the the potential reform of the the ETS system and potentially the extension of the free allocations for industrial players in Europe.

I was wondering if you could share your position. It does seem that a year a year and a half ago, that was not even part of the debate, and now it's it's it seems that there is strong momentum building around it.

How likely do you think this this will be some sort of relief in terms of free allocation? What do you think could be the options that the Commission is looking at?

Eventually, if it comes to that and you receive more free allocation or for longer, will that change how you approach decarbonization spending, and can you spread out maybe your decarb project on a longer time period?

I think it's, as I mentioned before, it was really a surprise that the Commission started this discussion. All over Europe, all the CO2 emitting companies, chemical industry, steel industry, we are fiercely asking the environmental ministers to ask the Commission to prepare something how we can design this free allocation, the ETS system, to a more pragmatic approach.

This was the start of this discussion. I think for us it's positive.

We are underallocated, and I was always of the opinion that in the time we are investing in CO2 reduction, we cannot, in addition, pay for CO2 allowances. I think that's true, and it's considered from the Commission.

We will see how their options are. Is it then 100% dedication to CO2 reduction or a certain percentage?

I think everything is in discussion, but at the end, when it would be come into action, it would be a relief for our future capital expenditure or cash management.

All right, that's very clear. Thank you.

Thank you very much for your time, for spending the time with us, and for this very interesting discussions. However, if there come up any questions or if you need any additional information, please feel free to drop either Gerald or myself a line.

We will be happy to answer. Thank you very much, and have a good day.