Voestalpine Ag Unsp/Adr

Welcome to the first Alpine publication, first half business year 2025-26 conference call. I'm Moritz, the course call operator. I would like to remind you that all participants will be in a listen-only mode and the conference has been recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Peter Fleischer. Please go ahead, sir.

Thank you very much. Good afternoon, ladies and gentlemen, for our first half 2025-2026 results announcements. With me is our CEO, Herbert Eibensteiner, and the CFO, Gerald Meyer. We will give you a brief overview of what has happened in the first half, and we will be very happy to answer your questions afterwards.

Good afternoon, ladies and gentlemen. Let me start with a brief introduction of Östalpene for those who don't know us. First Alpine is a global special metals and steel and industrial group. What we combine is this production and processing and engineering competence. And from this expertise, we develop innovative special solution to our customers to improve their competitiveness. And that makes us a leading partner for high-tech industries with high entry barriers, such as railway systems, automotive, or aerospace. And we are stock listed since 1995, and we are committed to value creation for our shareholders. Let me start with the global economic environment in the first half of the year. And what we see is that North America is still relatively robust economic growth, a lot of investments in the technology sector, Now, I would say industry development is a bit lower at the moment. When we look at Europe, we have this subdued economic development, and at the moment we are somewhat between cautious optimism and continuing uncertainty when we come to Asia. Mostly China is important for us. Relatively stable economic development. This growth in China is remarkable. supported by high exports in the rest of the world. You know, we will talk about tariffs. And we see a weaker development of the domestic economy. In South America, Brazil, for us, very important. We see a reduction of the economic environment. Why? We have high interest rates. and a very strong competition from Chinese imports. This is a country with no trade restrictions and a target of the Chinese exports. What are the highlights of this first half? For sure the U.S. tariffs, which has led to uncertainty in the economy worldwide. And what we see, as I have mentioned that before, this is noticeable in North America as well, with more cautious investments in industrial business. So far, we can see that at the moment. For First Alpine, we are affected by these tariffs. We can say this is manageable for us, and we see a high double-digit EBITDA impact for this business year coming from the U.S. tariffs. So all in all, the major economic trends are unchanged. We have, I would say, we delivered a very solid result for this year. First half year, considering the environment we are in, the earnings are as expected. We had a strong cash flow development and balance sheet is very solid so far. Gerald will elaborate on that later on. All our reorganization and efficiency measures are very well on track, and these two decarbonization green textile projects are on time and on budget so far. so good. And what we see at the moment is we can expect a tailwind from the announced safeguard measures and CBAM and the implementation will be from our perspective in the next year. We'll discuss that anyway afterwards. The outlook and the guidance is unchanged, so all these activities and impacts from the tariffs are included in the guidance, but it's unchanged. So only four interesting projects that you know that we, besides tariffs, there are also projects in Vestalpine. So we had the groundbreaking for a new R&D project. So in the R&D project, laboratories we see that we can produce hydrogen based pig iron and that's the reason why we want to start or to erect a demonstration plant in Linz and we have already started start of production will be in two years in 2027 and after two years we know if this process is is competitive, and we do that with very good partners, with Primetals, it's an engineering company, and Rio Tinto, you know Rio Tinto anyway. So, because I will touch this hybrid warehouse topic afterwards, so we got the major project in Turkey, for a logistics service provider, start of production end of this year and completion in 2027. Just to give you some figures, this is 250 meters long, 90 meters wide, 40 meters high, more than 11,000 tons of steel profiles. So that's the These hybrid warehouses we are building and this market is still growing and high profitable for us. But we also think about our capacity expansion in the U.S. We have contracts with two international truck OEMs. In the U.S., production for the U.S. market for side members. So production facility is completed. We are delivering the machines so far, and we will start production in summer 2026, by the way. We do the same business in Europe, in Belgium, for European OEMs. And on the right-hand side, our – railway system business just as an example because it's coming from Austria. We got the contract for the core arm tunnel which is the sixth longest tunnel in the world 33 kilometers top speed 250 a kilometer per hours and this is a very interesting project with 290 kilometer rail race and and 235 high speeds turnouts on this way from Graz to Klagenfurt. So this is an example of projects we are doing not only in Austria, but all over the world. Let me come to the divisions. Steel division, very strong performance of our flat steel business in a relatively difficult market. Why? We are high utilized in this business. We have good orders, good production, and we have projects in our heavy plate business. And the demand from the automotive sector is and was very good, and also from the energy sectors and other markets remains stable on the existing level, I would say, when it comes to building mechanical engineering and so on, which is on lower levels. General market sentiment has improved after the announcement of the EU safeguard measures and the US tariffs is not very important for steel division. It's negligible for this division. And when you look at the EBITDA margin, it's more than 30% so far. I come to the high-performance metals division. It's a bit different. We have lower demand with reduced utilizations of all our special mills, special steel mills worldwide, tooling and industrials muted, and also in Europe especially intense competition. This was the reason why we We sold puteros. Oil and gas is lower by low exploration activities. And aerospace, which is the bigger part of this division, very strong. We got new orders and we see a continued upward trend. We do a lot of reorganization there, streamlining the global sales network. We have working capital measures there and intense efficiency and cost-cutting programs in execution. And we will see the first positive results in the course of the second half of the year. And the U.S. tariffs here, yes, again affected, but manageable. Most affected Swedish and the Swedish and Brazilian special steel mill. But EBITDA margin of 7.6 is, I think, very solid in this given environment. Metal engineering is railway systems continue with very strong performance and I will touch that in the next slide. We see a mixed picture in our industrial systems business. And we have also implemented efficiency programs. Wire is stable on very low levels, I would say. And we see also a very low demand from seamless tubes. And welding consumable worldwide business is relatively stable on solid levels. And this seamless tubes business is most affected in our first Albini group by these tariffs and has a negative impact. So we have to reduce volumes. in this business. But still a 9.1% EBITDA margin, and the most important contributor to this result is railway systems, which is an integral part, the biggest part of metal engineering. and also, I would say, a business which is a driver of our long-term growth strategy. Turnout systems, you know, we are world market leader there with 60% of sales of railway systems. We see all over the world a very good demand in all our relevant markets. Rail technology, 30%. It's a more European business. Strong, stable demand in Europe. Fixation, new business for us, but important. Solid development in Europe, particularly in CAE and signaling. fast-growing business, and it's very important to get such complex project, as I've mentioned before, in Core Arm Tunnel. It has a very stable demand and trend in Europe, and also a growing business in Middle East, and with this more than 10% EPTR, the biggest contributor. Metal forming division, automotive components, lower production in Europe, so it's the divisions which is most affected by the lower car production. We have reorganization projects in execution, tubes and sections, overall solid, demands load a bit after the summer, but we will see an improvement till the end of the year. Precision strip surprisingly improved in the course of the first half of the years. I think they developed quite well under the given environment. And as I mentioned before, warehouse and rack solutions, very strong development in the order book for the next two years. is very strong and in this division we have no relevant impact from the tariffs. And the EPTA level is below the average of the group with 6.3%. And now I would hand over to Gerald to lead us through the figures.