Salzgitter Ag Akt Shs

Ladies and gentlemen, and welcome to the content call of the Q1 results 2026 of the Zeiss Gitter AG. At this time, all participants are being placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to Birgit Potrafki, CFO, and Markus Heidler, Head of Investor Relations. Thank you very much. And a good morning, ladies and gentlemen, and a warm welcome from me here in Salzburg. I'm happy to announce that with 280 million adjusted EBTA, we have made a promising start to 2026. And I can tell you that after two challenging years, that feels really good. As announced on April 21st, Our first quarter performance was boosted by an exceptionally strong contribution from our stake in Arubis. This was driven by the high prices commanded for precious metals. It's important to stress though that all our core business units also contributed to the earnings improvement versus a year earlier. This is obviously very pleasing. Our P28 performance program has been a key contributor to this business-wide turnaround. An additional 43 million euros in efficiency gains were realized already in the first quarter. Our next financial position has also improved considerably since the beginning of the year from minus 954 million euros to minus 679 million euros. mainly on the back of the prompt payment of additionally committed public funding of €253 million on the first quarter. Having said that, we are not getting carried away. The market environment in which we are operating offers some glimmers of hope, but remains challenging overall. We said at the start of the year that we were cautiously optimistic about our prospects for the year, and that remains the case. On the one hand, the new trade defense instrument proposed by the EU Commission in October will be formally adopted in the coming weeks. From July onwards, it will enable the EU to reset duty-free imports back to where they were a decade ago. This will reverse the research in imports and help restore the long-term viability of EU steel production. At the same time, the carbon border adjustment mechanism introduced at the turn of the year is already showing a welcome impact on piping. On the other hand, the high levels of economic uncertainty that have been depressing the European steel market have persisted. In fact, they have increased again due to the hostilities in the Gulf region and the closure of the Strait of Hormuz. Additionally, they have resulted in surging energy prices and trade rates. While we are well-hatched for 2026 for gas and electricity, those price pressures are pushing down growth projections worldwide. In that context, we have revised our guidance upwards for the year, but not by as much as some of you might have anticipated after such a strong third quarter. And when talking personally to some of you before we adjusted the guidance, I can tell you some of you really challenged me on that. While we expect profit to be higher than projected at the start of the year, our revenue guidance is unchanged. As disclosed on April 23rd, We are now guiding for sales of around €9.5 billion and EBITDA VX of between €625 and €725 million. So to conclude, we have made a promising start to the year and it is pleasing to see all our core business units contributing to our improved performance. EU measures will also bring some relief But ongoing geopolitical and macroeconomic uncertainties mean our growing optimism must be balanced with a healthy dose of caution. Thank you for your attention. I'm now looking forward to your questions. Thank you very much. Dear ladies and gentlemen, if you are dialed in at the conference call, please press star and the pound key to ask a question, or if you joined us via web interface, please click on the dial-in button and then raise your hand to ask a question. I repeat, the combination, if you are dialed in the call, is star, nine, pound key, or please click on the dial-in button on the web interface and raise your hand. The first questions are already incoming. One moment, first question, please.

Always do a question, please.

Can you hear me? Hi. The question is really my questions on the production business. We see that order in tech shows a plus 7% on your growth, so there seems to be a slight recovery. I would be interested in getting your comments on the drivers, what you see behind this recovery and whether you continue to see a change in the customer behavior in Europe. And on the profitability side, it seems like you've been helped by input prices, which shows a 54 euro per ton EBDA in Q1. So how sustainable is that number and is it potential upside going into the rest of the fiscal year?

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

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

So you are talking about the segment still production bonus, right? Yes, correct. Yeah. Yeah. So we see we have had also in steel production a good result in the first quarter and a lot stronger than the year before. And we see a continued strong performance in the total year and also in each of the quarters.

Okay, so at least this kind of profitability could be extrapolated.

Yeah, I see a really good stability. Okay. Thank you. Thank you, Boris. Thank you very much. The next question is from Tristan Gressa, BNP Paribas. Please, have it here.

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

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

Okay, so you would not expect ASP selling prices to increase into Q2?

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

Okay. But just to confirm, I understood correctly the bridge and the guidance in 2Q2 is stable costs, higher volumes, stable selling prices for the steel production division.

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

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

So we definitely expect some improvement in the margins in the upcoming Q quarter and also in Q2. Let's see whether we will manage to be positive. I hope we can come up with some nice news when we get our next update. However, we plan to improve here. The market remains challenging, especially in the precision tube groups, where we have still quite some underutilization. We are quite nicely booked in Ilsenburg. And we still have capacity when it comes to large diameter tubes and also when it comes to MGB. So in case economy would pick up, we would be able to use more of our capacity. As I said, still quantity is not as good as we would like them to be. All this is covered in our guidance. but in case economy would pick up even further, we are ready to provide out of the entities that I have just mentioned. Other than that, for prices we have talked already, that's more or less the picture I can provide to you.

Okay, that's clear. I go back to the queue. Thank you.

Thank you. Thank you very much. The next question is from Maxime Korg, ODDR BHF.

Good morning Birgit, another French analyst asking a question now. So the first one is on HTM. So you obtained the EU antitrust agreement recently for the deal. So what do you still need to get to close the deal? Are you still in discussions with Decent Group or Valuerec on some details? And when do you think you can give us a sense of the impact of HKM's integration into your results?

So thank you, Martin, for raising the HKM questions that I think are of interest to almost everybody in the line. So the EU, right, we received the EU antitrust, okay, so that's fine. And other than that, we are still, how to say, we are still busy negotiating with our colleagues from Jutton Kurz Field, and we are quite confident that we will be able to close the deal in the near future. I'm not going, of course, you may understand, I'm not going to disclose any details on negotiation terms. However, we are really confident that in the upcoming time, there will be a good decision, which will be good for everybody. And after that, we will talk about the impacts on our results and what this means for SARS-CoV-2 in total.

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

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

All right.

Did I answer your question?

Yeah, and the objective at the end would be to hold zero of treasury shares, or you could still own some of them at the end of the process?

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

Okay, now that's clear. And just the last one, I mean, you said previously you didn't expect volume to increase that much in the coming two quarters. So I should infer from that that reopening the blast furnace number three, the one that is still idle, is still not being considered, right? I mean, this is something that you will perhaps rather envisage at the end of the year. Yes.

Martin, when I talked about we are not expecting too much volume increase, I was in the steel processing area, not so much in steel producing. Okay. And what we are going to see, the plan is to get that switch on again in autumn somewhere.

In autumn.

Okay.

Yeah.

Okay, that's good. Okay, just after the new Zerg world has kicked in, right? or I just sit on my side.

Thank you, Maxine. Thank you very much for your questions. The next question is from . Please, .

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

Yeah, sure. Thank you, Bastian. When we talked last time, I have shown a graph where I showed our investment, and I have also already announced on that graph that we are expecting these 250 million euros. And luckily, we received them already in the first quarter. So, when we talked last time, my view on the liquidity side and on the net financial position was already including the anticipation of the €250 million. And with this, I think that we will be slightly above a €-1 billion towards the end of the year. And looking at our EBITDA guidance, that means we will be max reaching an average of two.

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

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

But has this been an option as well? You've been at least considering? I mean, we are considering...

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

All right. And then, yeah, maybe staying on the topic of all rubles and also what it means for your guidance framework, I would say just from, I guess, the capital market side, the last quarter probably illustrated very, very well why there are probably a lot of good reasons for why rubles should probably not be part of your operating guidance. I mean, you're operating... guidance, maybe more or less like a play ball of metal prices and derivatives with the leverage from our rubles. So is this something you also consider potentially whether you may change that? And I guess the other question here is just given the significant volatility from our rubles, which could obviously like almost change with any move in metal prices. I mean, is this something you have also basically been cushioning for a little bit with maybe haircuts in other parts of your operating guidance, just given this is a volatility you can't really control?

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

Okay, thank you.

Thank you, Gautam. The next question is from Dominic O'Kane from J.P. Morgan. The floor is yours.

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

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

Okay, excellent. And then just two other questions. So obviously your commentary around the Q2 outlook for steel production is, I think, relatively conservative. Could you maybe just talk to us about how you're seeing the current customer environment with regards to some of the uncertainties in the Middle East? Are you seeing any kind of slowdown in customer inquiries or orders? Is there any discernible change in customer behavior? Yeah. And then my final question is, can we just maybe talk about the technology business unit? There's a very, very strong quarter. There's certainly been an improvement in the contribution from that division in recent quarters. Do you think that you are able to sustain the type of run rate that you had in Q1 for the rest of 2026?

Those are my last questions.

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

Yeah, fine. Thank you. So I will start with the sales. And you're thinking we may be more bored in our lives. So, two messages. First of all, we have not seen significant cuts in single customer orders due to the crisis in the Middle East. Second, we have all seen that projections for the economy have been revised downwards, right? For Germany, below 0.5%. And to be honest, that is not growth. That is a slight recovery about what we have lost the years before. So the crisis in the Middle East and Paris discussions from the U.S. are pushing on economic expectations, and this means also on all of our customer segments, of course. Where we really feel it, where we really feel the crisis in the Middle East is our international trade. Here we feel the pressure on the volumes, on prices, and here we feel a real impact. So if the customer behavior we have seen so far is more in line with the economic expectations rather than individual expectations. Looking at technology art and about our guidance, look, we have so much, as I have said in my intro, we have so much uncertainties. from this terrorist stuff, from the situation in the Middle East, that there is quite some uncertainty about what's going to happen and how this is going to impact our business. So, of course, we have taken into account that we somehow have to deal with this uncertainty. And saying that, I personally, at this point in time, do not see any major threat to our guidance. The technology result, I can tell that the technology result in the first quarter has been strong because we are still very much profiting from the plus-max orders that we are delivering. We have a bigger plus-max order and we are still profiting from that. Other than that, overall in the total year, especially KHS will have another record year when it comes to sales. and we'll have another record year when it comes to profit as well. And we see that we expect all four quarters on the profit side being stronger than the quarters we have seen last year. So, so much is how I look at it. And with the first quarter being especially strong, And if you look at the seasonality of the technology segment, you also always see a very strong fourth quarter in almost each year. And we are expecting this to happen also this year.

Thank you very much.

Thank you, Dominic. There are no further questions, but there is a question in the chat. asking if there are any one-offs included in the results, especially in the steel production divisions.

In the steel production, if you look at the first quarter, we have had one-off effect, which was not in steel production, but which was taking place in the trade segment. And here we had reduced restructuring costs following some negotiations, and we had the positive result here of 11 million euros.

And now we have the next question coming from Christian.

Thanks for taking my question. Slight clarification on the green scheme subsidy. So you said you received 250 million euros well ahead in your expectations. So, can you help us as in how much of the total subsidy you have received and do you expect to receive any further subsidy like in 2027?

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

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

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

I understand.

Thanks a lot. Thank you, Prashant.

Was there a follow-up question, Prashant?

Christian, you're fine? Or do you have more questions? No, I'm good. I'm good. Thanks a lot.

Thanks, Christian.

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

Morning. Thanks for taking my question. Just to like a little bit of color on, you know, how are you seeing trading and inventory levels for steel in Europe, considering, you know, people are buying a little bit more before the The quota system comes in. I'm just wondering how you see those inventory levels being managed through the rest of this year. And then just a housekeeping question. I know you said you're going to be selling treasury shares and there's no rush to do that, but could you give us how much shares you've sold at the moment just from a share count perspective for the following quarters?

Thank you. Yeah. Yeah. Thanks for your questions. I will start with your first question concerning inventory levels. We have seen higher imports in the fourth quarter of last year. Our anticipation is that this is a front-loading in line with the CBAM regulations. and also already some preparation concerning the import quotas to be reduced mid of the year. So yes, we have seen that taking place and still we see, if I talk to my colleagues from the trade, they still see that happening. So that is why we believe that the impact from the safeguard measures as of July, it will materialize with the time. And concerning the treasury shares, I know and I can understand that this is of high interest to understand how much we have told in the meantime. However, please be so kind to understand that we are not going to disclose any details here.

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

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

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

Yeah, I would like to repeat, Carl, what I have said before, that we are still in negotiations with the colleagues from Swiss and Cross Steel and that we are confident that in the near future we will be able to come to an agreement which is good for all sites, and that as soon as this is happening, we will provide the required information. Thank you. We have a question in the chat from Lona Fremming. What steep rise we assume in our guidance? First of all, we do not disclose the prices we have in our contract. And also, you have to understand that in our contract, how to say, the contracts have different time horizons. So some contracts we are doing in steel have a time horizon of four weeks or two weeks. Some have three months, some have six months, some have 12 months. So giving one single price would also be of no help, and next to that, we are not disclosing single prices that we have included in our guidance.

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

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