Thyssenkrupp AG

hello and welcome to the chisholm crop interim report first half 2023 2024. throughout the call all participants will be in a listen only mode and afterwards there will be a question and answer session please note that this call is being recorded today i'm pleased to present andreas trush please begin your meeting thank you very much operator hello everyone this is andreas trush from investor relations also on behalf of my entire team i wish you a very warm

Welcome to our conference call on the Q2 results. With me in the room are our CEO, Miguel Lopez, and our CFO, Klaus Keisberg, and also my colleagues from the IR team. Before I hand over to the CEO and CFO for their presentations, some housekeeping. All the documents as usual for this call are available in the IR section on the website. The call will be recorded and the replay will be available shortly after the call. After the presentations, There will be the usual Q&A session. Please only ask two, maximum three questions at a time so that everyone has a chance to ask the questions. And with that, I would like to hand over to our CEO, Miguel Lopez.

Thank you very much, Andreas, and also a warm welcome from my side to our audience today, to today's Q2 conference call. Let me start with a recap of what we have accomplished in the past quarter. We all know about the challenges the volatile macro environment is presenting. However, we are actively managing the current situation. And again, we were able to clearly deliver on our three management priorities. Let's start with portfolio and our most recent attack release and historic step forward to Syncorp we announced. A 20% sale of Steel Europe to EPE Corporate Group. a significant first step towards our planned 50-50 joint venture. I will come to this in more detail in a minute. Apart from Steel Europe, we also made tangible improvements with regard to the standalone solution for marine systems. Here, we are in the due diligence phase that is very well progressing with both private equity and KfW Bank. In addition, we are also in elaboration about the spin-off solution. We will keep you, of course, informed as soon as there are relevant updates. Looking at decarbon technologies, after having created that promising segment at the beginning of the current fiscal year, the board is now complete and has already started to intensify their work. Also, I'm happy to add that we were able to win several female board members with long-lasting business experience from inside and outside to support for decarbon technologies, including a new female CFO for the DT board, Caroline Nabilo. Moreover, we were able to close the transaction of our remaining 55% stake in TK Industries India after the successful signing in Q1. Our second priority is performance, and today we can present a satisfying second quarter that is in line with our expectations so that we can again confirm our full year guidance for EBIT adjusted and free cash flow before M&A. We are also very well on track with our APEX program and the incremental improvements across all businesses that are contributing to our overall performance and resilience. However, throughout the company, we are all aware that our performance is not where it should be and that all segments will have to increase the efforts. One example is Steel Europe. Here, in mid of April, the segment announced first plans for structural realignment to boost competitiveness and profitability, which they will specify in the near future. Another example, material services just recently published plans for fundamental structural transformation of the business model at TK Schulte. to acknowledge the changed customer needs and proactively act to secure and expand the market position. Our third item on our priority list is green transformation. And I would like to give you some examples of what we are doing to support and benefit from it. At Decarbon Technologies, we are leveraging business opportunities as an enabler of green technologies and decarbonization for our customers. For instance, at UDE, where we have signed a pre-FEED, which stands for Front End Engineering and Design, contract to conceptually develop an integrated fertilizer complex for Genesis fertilizers. In addition, Polyseus officially started the construction of one of the world's first carbon-neutral cement plants for our customer Holzip. And last, but not least, I'm happy to announce that our efforts also pay off from an official side. ThyssenKrupp is on the CDP climate A list for the eighth time in a row. Let me emphasize again, ThyssenKrupp wants to play a proactive role in the green transformation, and this will pay off for all our stakeholders. Besides this, there are also positive news from a governance perspective. We have just been nominated as MDAX number one in Union Investments corporate governance ranking, a confirming sign that also our corporate governance efforts are positively recognized by the capital market. As indicated before, I would now like to come back to the recent deal announcement. This is really an historic milestone for ThyssenKrupp. During the conference call on the day of the deal announcement, I explained the deal rationale and some background information. Everything that can be said at this point in time is an ongoing M&A process. Therefore, I will keep it short. As you all know, we are in ongoing talks with EPCG to achieve the envisaged 50-50 joint venture. By the end of April, we could announce the first step Towards the joint venture, EPCG will buy an initial 20% stake in Steel Europe and aims for another 30%, which we are currently negotiating on. Right now, we expect the 20% deal to be closed within the current fiscal year. As usual in such transactions, the deal is subject to several approvals, for instance, merger control approval. For us, the Invisage joint venture will combine the materials capabilities of Steel Europe with the energy expertise of EPCG for capturing the potential of the decarbonization of the steel industry. Together with the updated business plan, we will create a high-performing and profitable steel company. Let's now move on to further insights on Apex. I've already mentioned that APEX is well on track with incremental improvements across all businesses. APEX is now more than six months in place, and I would like to take the chance for a quick recap, as well as a status update. On the left-hand side, you can see our APEX targets, and it goes without saying that these are confirmed. That means that APEX drives for total performance gains up to 2 billion euro until fiscal year 2425 and therefore is the key enabler to achieve our midterm targets. Throughout the company everybody is working with full effort to reach these ambitious goals and make APEX a success. As of today, meaning six months after the launch, we have already identified more than 4,600 individual measures to adding up to a value of approximately 1.8 billion euro. Please note that we had approximately 1.3 billion euro at the end of quarter one, a remarkable quarter over quarter step up. So you can see that we are making good progress and have achieved significant momentum through various initiatives and segment specific deep dives. that positive momentum gives us confidence that especially in the worsening macro environment, we will be able to reach our targets by identifying and leveraging additional measures. With that having said, I would like to hand over today for the last time to Klaus for the Q2 financial highlights. And I would also like to take this opportunity to express my gratitude to you for your efforts and dedicated work for Küssen Group in the almost last 30 years. Working with you was a great pleasure and I really appreciate it. Thank you very much, Klaus.