Voestalpine Ag Unsp/Adr

So I would like to jump into the presentation of this first quarter, 25-26. So I think you are well aware that we are all in a very challenging environment, but Despite of that, we can present a solid result in this quota. We have a very strong financial basis, and our strategy is very robust with this global footprint and this diversified product portfolio worldwide, and we And I'm happy that I can present a good, high free cash flow in this first quarter. And we will discuss afterwards what the outlook for that is. We have reduced our net debt further to the lowest level in the last decade, and that means that we are working on basis of a very strong balance sheet. And when you look at the at the market where we are in and was positive in this first quarter, and I think that we will also see in the forecast that this will be very stable, is this upward trend in railway systems, also a good demand in aerospace, and also Very, very good and still and we are already fully booked for this year and we are working on the order book next year is this hybrid warehouse business with very good demand. Stable is automotive components in mechanical engineering and building industry that on a actual but low labor, and that's the reason why we decided to reorganize some businesses. Most affected is automotive components and high-performance metals, but we do also efficiency programs in the other. in the other divisions and this is what we can do to have the plan that we take the opportunity to adapt to a new situation and gain efficiency in all our businesses. Number of employees dropped to 49,600. And let me give you some example what was happened in this quarter. You may remember when we talk about railway systems in the past, we produce rails. We are world market leader in turnouts, and we have decided five, six years ago to go into this digital monitor systems, and we developed this system Centric And we got now a very good and major contract for this part of our business from the Dutch railway system company, ProRail. And I think that's a clear indication that we are seen as a full system supplier in the automotive industry. in the railway system components business. We have a contract signed for high-quality steel with BYD in their Hungary company, where they want to start up a production for cars. And I think that's not unlogic because we are delivering to all automotive OEMs in Europe. And that's a logic step that also incoming new producers part of our customer base. Recently, we tried to prove that it's possible to produce a green rail from hydrogen-based steel production together with the Austrian State Railways, a very interesting R&D project, I would say, here you see this rail is produced with HIFOR, which is a hydrogen-based I would say, and it's CO2 zero, and as I mentioned before, it's an R&D project, but these rails are implemented in the normal railway system, and it's close to our facility. And a boom in warehouse and rack solution is still ongoing. And also the development of our customers are ongoing. So we see more robotic applications and we react and develop new rack systems also for those applications will be good products also for the next years to come. So what was the economic environment we were in in the first quarter? US still relatively robust. And we saw that, or we think that this positive, very positive economic effect was also due to advanced purchasing. Europe relatively weak with certain improvements, but ongoing uncertainty due to the U.S. tariff policy. Relatively stable and good economic development in China, although they haven't overcome the real estate crisis. And in Brazil, our biggest South American market is a bit affected from high interests at the moment. And some of our customers are also affected from strong competition from Chinese imports. So a lot of uncertainty you can imagine, and we have adapted this with different plans. Let me start with the Steel Division. Fösslbini Steel Division performed in this very difficult European environment very good because we decided last year with a marketing program to create more market share with positive outcome. So we see that especially automotive and energy increased in this year. And we see a very solid utilization of the steel plant, more than 90%. And they gained also efficiency improvements with clear programs. And what's relatively new, we think that the steel prices in Europe have now bottomed out. You know, there was a certain reduction at the spot market, but now it seems to be down. that we have found ground and we can expect a certain improvement in the months to come. In high-performance battles, I said before, was relatively affected by this uncertain environment, huge competition in Europe, and we started a reorganization. This reorganization is on track, and we see the first improvements. You know we have sold Poderos last year. This was a strategic A strategic decision we see in our segments we are in is interesting that tooling is globally relatively low with one exemption and that's China. This is our best market in that context. And when you look in industrial segment automotive week, you know this division is living from new models, which are – The number is relatively low, but mining, medical technique, food and beverage is doing quite well. And aerospace, as I've mentioned before, has unchanged. Very good market environment. And oil and gas is relatively low. Metal engineering, you know, biggest big portion of metal engineering is railway systems, you know, unchanged strong demand globally. Seamless tubes business slowed down in quarter one due to a lower demand in the US and is also the area where we are most affected by tariffs. And welding business, international business, is surprisingly stable also over the last years and months. And still challenging is the market, which is more focused on Europe is wire technology. But here we do also some efficiency and improvement programs that we improve our efficiency here and get more volumes in-house. Metal forming division, you know, automotive components is hit quite hard. quite heavy. So this reorganization is really well on track. So we reduce people. We close companies. We put machines together so we rebuild or reorganize this area substantially and we will see the first positive effects at the end of this business here. The market for automotive components is stable on that actual lower level. And in tubes and sections, it's a very solid development. It's a business of around a billion turnover. And We see here and there some improvements in demand, but all in all, a very solid-running business. And as mentioned before, we are also in rec solution, fully booked this year and nearly fully booked also next year. So I would hand over to Gerald to present the figures.

Thank you. My pleasure to inform you how this challenging environment Herbert was talking about, how this ongoing trade barrier discussions and also how our optimization initiatives translated into our Q1 numbers. I would like to start with this slide, number nine, where you see on top line revenue is down by 6% or 240 million roughly. Roughly two-thirds of it refer to lower prices, market prices. 80 million out of this 240 reduction refer to the sale of puteros. You know that we sold it off in the last quarter of our pandemic. last business year or beginning of this calendar year. Talking about profitability, EBITDA, and you will see two bridges a little bit later. But for this overview, in EBITDA, of course, on the one side, we had these lower prices, which were not compensated by the cheaper raw materials. We did have just a minor impact from volume deviations. So on the one side, in steel division, volumes were up. Herbert explained our initiatives there. The capacity utilization on our side is quite high. On the other side, we have lower volumes in HBM, but it's a wash if you add them up. And for the rest, I would say, of the divisions, all the divisions except HPM division are below prior year level, given the market environment in HPM. We are above prior year level, and this has to do with one-off effects, which we saw with regard to the sale of Putiavus last year. Depreciation exactly at the same level as last year. So this means also in EBIT as in EBITDA, we are 56 million behind the first quarter of 2024-25. Profit before taxes, 50 million. What you see there is that financial result means the difference between EBIT and profit before tax is improved compared to last year. The main reason is simply lower interest rates and reduced net debt. And the outcome is what we see there. And this means a financial result of roughly 33 million, minus 33 million. Tax rate, I would say, also no surprise, at 23% for the first quarter of of this business here. First bridge I would like to present, as you know, so the first two columns means our gross margin prices are down, partly compensated by lower raw materials, lower energy prices. The difference of 110 million miners has been mainly allocated to our steel division. where we saw this and it was expected lower prices also from beginning of this calendar year and also of first quarter of this business year. Mix and volume, just plus $8 million. Going into a little bit more detail there, volume is positive in steel division. I mentioned it here, but mentioned it, capacity utilization in particular in steel was high. Also, mix was positive in steel division. On the other side, we saw lower volumes in HBM rest more or less stable. Miscellaneous, plus $46 million. In this column, you see... In particular, the valuation of puteros, a little bit less than 30 million, a negative one of last year when we prepared and we were preparing ourselves for the sale of puteros. And, of course, there are also our cost efficiency measures in there. So we are working on all the divisions in improving our cost position and optimizing. And this is, of course, also part there. or included there. Next bridge is how we developed by divisions from first quarter 24-25 to our first quarter 25-26. EBTA in steel division is down 40 million by 40 million roughly. It is with 109 million euros still very strong I would say. The high capacity utilization, as I mentioned at various times, really supported this solid outcome on first quarter. And it was actually above our internal expectations from some months ago. So they did a very good job, I would say, there. And so minus 40 is still very strong. High performance metal plus 25. I mentioned the one-offs of prior year with roughly 28 million. We also have it there in our comment. A clean year-on-year comparison would be an outcome in a largely or more or less stable development of HPM division. And stability there resulted more or less because of, I would say, two items. Number one, volume is lower. It means we have a burden there on the one side. On the other side, we have our organization restructuring program in place. We have a strong aerospace business in there. And so if you put this together, add this up, operationally I would say stable, and it's plus 25 because one off from prior year is not in anymore. So metal engineering division, minus $30 million. First of all, we have to understand that last year was very strong with regard to metal engineering, in particular from our seamless tubes and tubulars business. So it was after two record years, we had a very last, very strong quarter. And this was our first quarter, 24, 25. This quarter was, of course, affected, was affected. economically more difficult. Oil prices are definitely lower. On the other side, this is the business unit where we are highly affected also by these trade barrier discussions and U.S. tariff discussions. So this is weaker. Also, wire is weaker. But in wire, we think that we saw the bottom and we should improve. Railway, weaker year on year. We had extraordinary positive contracts in there in the first quarter last year, so it's a little bit weaker, but it is strong and it will stay strong. So this is what I can add here and inform here. Welding, as Herbert mentioned, largely stable geographically. We have different spots where we are stronger than we were last year, but this is also one advantage in particular from this business unit that we have a global setup there. And if one is weak, the other is strong, and therefore stability. Metal forming. You see here minus of 16. This has to be largely allocated to automotive components, which is weaker compared to prior year. You know that we are restructuring there. We all know and understand that in particular in Germany, automotive industry is weak. And this is the result out of that component. all the other business units are fairly stable and strong. So going there and talking about tubes and sections, for example, strong at high level, perhaps a little bit weaker than last year, but still stable, strong, and we expect another good year for tubes and sections. Warehouse and Rex was mentioned by Herbert, absolutely strong and stable, and also Precision Strip, which was improving compared to last year, and where we also see an improvement for the rest of So if we add up everything there, so EBITDA is down from 417 to 361, but I would consider it as a very solid number given the environment where we are in. Next slide, cash flow statement, very strong performance in cash flows in this first quarter. So we had a reduced result, but the cash flow from results is at the level of prior year. And where we really stand out in this first quarter was the change of net working capital compared to last first quarter. where we increased working capital by 150 million. Now we reduced it by 81 million. And this comes from reduced inventories. And talking about reduced inventories, 40% is allocated there to lower volumes, means the volume reduced and not just prices. So we're really working on that really tough. in improving our, let's say, networking capital position. And you definitely followed our performance there. Also, the last nine months, which were very strong there, we saw a very good second half of last business year and also a very strong first quarter. And this stands out compared to the first quarters of, let's say, I would say, historically in First Alpena. So very strong one this year. What do we expect in the next month there? Of course, we cannot calculate here four times 80. This wouldn't work out. This is not possible. But we will see some more improvements which should come in particular from HPM division where we have some optimization projects up and running. And so we expect some additional improvements there until end of this business year. So, if we add up changes in networking capital, cash flow from operating results, cash flow from operation is 444 plus 230 roughly compared to prior year. Cash flow from investing activities, I would say a little bit below the expected run rate at 256 million. In there is 80 million roughly of our transformation green textile projects. And normally the expectation would have been perhaps 290, 300. We will catch up until end of the year. So means our guidance regarding cash reform investing activities stays unchanged at 1,150. So this is our clear expectation there. We had a cash flow, positive free cash of 190 million roughly in this first quarter. And I would say, yeah, very happy with that. My last slide talking about our gearing level, net financial debt level, also about a strong balance sheet. And my thoughts there, first of all, 50% equity ratio, 7.5 billion, which is stable. I would say a strong position in an uncertain environment and volatile environment. Low debt level also reflects... I would say also our strategy when we talk about uncertainty. So we add net debt to EBITDA 1.1 and have a gearing ratio of 19 pre-dividend payment. If I would deduct the dividend payments which happened beginning of second quarter, the gearing ratio would be 21%. So you know our targets there. So you also can read it in our annual report. We said we do not want to exceed two times net debt EBITDA or 50% of gearing ratio in a normal environment. Of course, now we include in our thoughts that we need more stability for our investors. You know our capital allocation policy, which we published beginning of this quarter. And that one part is key. And this means stability. We want to secure investment grade profile and so on and so forth. We want to optimize also our capital structure policy. with regard to a very low weighted average cost of capital. So these are our thoughts there. And so I would say it's a decent and healthy status which we have there in terms of net debt position and capital structure.

Let me come to the outlook here. There is further uncertainty, especially coming from these global trade discussions and all its regional economic effects, which are not clear at the moment. What we can do is focus on that, what we can influence. And, you know, Gerald mentioned that we focus on free cash flow. We focus on efficiency gain. We reorganize weak currencies. weak businesses. We look at our debt positions. We are disciplined in capital spent. This all together is that we can rely on that what we see in the market. We think that the automotive industry is expected to stay on this current levels. I would say same in building mechanical engineering and also consumer goods also on that actual level in general. The energy sector, and here we are talking about OCTG business. We lost momentum in Q1, and this is expected to remain at this lower level in the next months. and also no tailwind from the tooling market so far on that level. But all those businesses, I would say, have so far bottomed out, but no tailwind, unfortunately. But we see these big markets in railway infrastructure, in aerospace, and also in warehouse technology that we – We'll have a positive outlook, a very positive outlook, and all those other businesses I have mentioned, all this reorganization work we are doing is well on track, and also the The tariff threats also in this guidance, I would say we can confirm our guidance. And this is the EBITDA between 1.4 billion and 1.55 billion euros. So that was the presentation in brief, and I'm sure you have a lot of questions. Thank you.