Thyssenkrupp AG

311 million euro, mainly on the back of the preceding restructuring provisions in Q1 that you're all aware of. Talking about free cash flow before M&A, that was minus 140 million euro in the quarter, improving by 140 million euro year on year. That leads to a accumulated nine-month figure of minus 1.9 billion euro. Overall, important to note that reflects our usual cash flow pattern that will reverse in the running quarter. Miguel has already mentioned that we do confirm our full year guidance for free cash flow before M&A. With regard to our balance sheet, we maintained a solid net cash position at around 2.6 billion Euro. And in order to conclude the financial overview for the group, the key message is quite straightforward. We are executing strongly on performance management and at the same time preserving balance sheet strength while staying realistic about the macro and demand environment. Turning to the next slide, this provides a high-level view of sales and EBIT adjusted development in the third quarter. On sales, our message is that top-line development shows a promising momentum. Improvement was especially supported by material services, now TKXLS, with positive effects from prices and volumes, while other segments, such as automotive technology and decarbon technologies, still faced pretty low demand. Let's get to EBIT adjusted. Overall increase was mainly driven by steel on the back of restructuring efforts and more favorable raw material costs. In addition, material services and marine systems also posted pleasant year-over-year increases. These developments more than offset In short, the quarter demonstrates that our performance measures are becoming increasingly visible in the numbers, even though we are not yet seeing a broad-based market recovery across all segments. Let's turn to our segments. First, automotive technology. The key message for Q3 is that we are continuing to manage the soft market environment Thank you very much. Sales were rather flat. On profitability, EBIT adjusted, declined in the quarter. Restructuring benefits and our internal countermeasures are visible, but they could not fully compensate the lower volumes and higher special freight costs. On BCS business cash flow, the development was quite encouraging. Lower investments, improved networking capital, Both more than offset the earnings decline and restructuring cash outs. As a result, business cash flow improved year over year. So in summary, demand in automotive remains challenging, but the operational measures are gaining more and more traction. Let's move on to decarbon technologies. At decarbon technologies, we're still facing a pretty hesitant project environment, mainly in the chemical plant business. Customers continue to postpone projects which, together with the usual volatility in the project business, leads to weak order intake and therefore decrease in sales. The main driver of the sales decline was plant engineering, and these deteriorating sales negatively impacted our EBIT adjusted in the third quarter. That was also affected by project-related additional costs in the salmon business coming from past legacy projects. Performance measures and efficiency gains resulting from our ongoing restructuring and purchasing optimization could support earnings, however, we were not able to fully compensate for the decrease. Positive news on the last KPI on this slide, BT was able to raise business cash flow, mainly on the back of temporarily favorable payment profiles. Let's move on to material services, now known as TKExcells. TKXL has delivered a clear earnings improvement, supported by a favorable market environment, especially in North America, but also in Europe. We saw strong growth in sales that was driven by materials and processing business in Europe and North America, with significantly higher shipments, particularly in direct-to-customer businesses and on the back of distribution and processing volumes. Let's take a look at earnings. We will adjust it. Significantly increased due to supportive market conditions and a very strong operational performance with the North American operations delivering the strongest earnings uplift. In addition, our processing business as well as the European materials business also performed positively. Talking about cash flow, our business cash flow benefited here from higher earnings, partly offset by price increase, net working capital build-up. Moving on to steel, steel Europe, their sales increased in the third quarter, driven by higher shipments, particularly from automotive and industrial customers. However, pricing there remained under pressure, especially in packaging and electrical steel. Moving on to EBIT adjusted, that improved significantly in the third quarter, and more than doubled year to date. That was mainly driven by Our business cash flow also improved year over year, supported also by government funding for the direct reduction plan that is progressing. Overall, self-help measures continue to deliver tangible results and help offset the challenging market environment. Last but not least, Marine Systems, TKMS. As usual, only a couple of brief comments on Marine Systems, as all operational details have already been presented yesterday. But it's without saying that we as a majority shareholder are more than happy with the development of our segment. Marine Systems continues to build a strong foundation for future growth, supported by an order backlog of more than €20 billion. Let's move on to our EBIT adjusted bridge to net income. Looking at the special items, we saw a slight net positive effect that was mainly driven by the HKM exit from early July and its implications. And most notably, write-ups at Steel Europe of around about 400 million euro in light of a more profitable business outlook of the remaining segment without HKM. as well as the respective impairment losses of 276 million euro by classifying HKM as a disposal group discontinued operations. Please note that the actual deconsolidation of HKM with a negative low three-digit million euro impact will be included in our fourth quarter accounts. The remaining positions are rather straightforward after the financial results and taxes Net income for the third quarter came in at €34 million positive. Next chart. Our third quarter reconciliation to free cash flow before M&A. As you can see, in the third quarter we did not face any material net reconciliation items. Investments are net positive in the quarter, mainly on the back of funding for the direct reduction plant at Steel Europe. The M&A adjustment includes the proceeds for the sale of the remaining stake in AST in the range of a high double-digit million-euro figure. Overall, that led to a free cash flow before M&A of minus 114 million euros. While the quarterly figure remains negative, it approved year-on-year, and continues to reflect the typical seasonal cash flow pattern. So let's have a closer look at our outlook for the remaining year. As Miguel already mentioned, for the full year, we are lowering our group guidance for sales and narrowing for EBIT adjusted, while confirming for free cash flow before M&A. So let's have a look at the details. For the group, sales are now expected to be between minus 3% and minus 1% versus the prior year. Even adjusted is now expected in the range of 600 to 900 million euro, compared with our previous range of 500 million to 900 million euro. Pre-cash flow before M&A is confirmed at minus 600 to minus 300 million euro. including lower restructuring cash-outs of up to 250 million euro, as well as a somewhat lower capex guidance of 1 to 2 to 1.3 billion euro. The income is expected to be between minus 700 and minus 400 million euro, including restructuring provisions mainly at scale euro. At the segment level, there are several adjustments that led to the updated group guidance. Let me highlight a couple of them. We raised our guidance for sales and EBIT adjusted at material services and marine systems. We also raised our EBIT adjusted guidance for Skill Europe, while becoming a bit more cautious in terms of sales expectations. Overall, The guidance reflects improved operational execution while maintaining appropriate caution on market feasibility. And with that, Miguel, it's up to you again.

Thank you very much, Axel.

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