Ladies and gentlemen, welcome to the Voestalpine P ublication First Half Business Year 2025-2026 Conference Call. I'm Moritz, the conference 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 one 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 Mayer. 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 Voestalpine for those who don't know us. Voestalpine 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 solutions 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 was 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 supported by high exports in the rest of the world. We will talk about tariffs afterwards, and we see a weaker development of the domestic economy. And South America, Brazil, for us, are 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 have led to uncertainty in the economy worldwide. And what we see, 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 Voestalpine, 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. I would say we delivered a very solid result for this first half year, considering the environment we are in. The earnings are as expected. We had a strong cash flow development, and the 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 greentec steel projects are on time and on budget. So far, so good. 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. All these activities and impacts from the tariffs are included in the guidance, but it's unchanged. Only four interesting projects that you know that besides tariffs, there are also projects in Voestalpine. We had the groundbreaking for a new R&D project. In the R&D 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. We have already started. Start of production will be in two years, in 2027, and after two years, we know if this process is competitive. We do that with very good partners, with Primetals. It's an engineering company, and Rio Tinto, you know Rio Tinto anyway. Because I will touch this high-bay warehouse topic afterwards, 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. That's these high-bay warehouses we are building, and this market is still growing and highly profitable for us. We also think about our capacity expansion in the U.S.. We have contracts with two international truck OEMs in the U.S.A., production for the U.S. market for side members. 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 and 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 Koralm Tunnel, which is the sixth longest tunnel in the world, 33 km top speed, 250 km per hour, and this is a very interesting project with 290 km rails and 235 high-speed 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 highly utilized in this business. We have good orders, good production, and we have projects in our heavy plate business. 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 E.U. safeguard measures, and the U.S. tariffs are not very important for Steel Division. It's negligible for this division. 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 sold Buderus. 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. We will see the first positive results in the course of the second half of the year. The U.S. tariffs here, yes, again, affected, but manageable. Most affected the Swedish and Brazilian special steel mill. But EBITDA margin of 7.6% is, I think, very solid in this given environment. Metal Engineering. 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 Voestalpine 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, we are a 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 more European business, strong, stable demand in Europe. Fixation, new business for us, but important. Solid development in Europe, particularly in CEE and Signaling, fast-growing business, and it's very important to get such complex projects, as I've mentioned before, in Koralm Tunnel. It has a very stable demand and trend in Europe, and also growing business in the Middle East and with this 10%, more than 10% EBITDA, the biggest contributor. Metal Forming Division, Automotive Components, lower production in Europe, so it's the divisions which are most affected by the lower car production. We have reorganization projects in execution, Tubes & Sections. Overall, solid. Demand slowed 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 year, so I think they developed quite well under the given environment. As I mentioned before, Warehouse & Rack Solutions, very strong development, and the order book for the next two years is very strong. In this division, we have no relevant impact from the tariffs. The EBITDA level is below the average of the group with 6.3%. Now I would hand over to Gerald to lead us through the figures. Yeah, ladies and gentlemen, Herbert provided an overview of the latest developments in our markets and business divisions. In the following minutes, I will outline how these developments are reflected in our financials. I would like to start with this overview. Revenues declined by EUR 450 million or 5.6%. All four divisions contributed less operationally compared to the previous year. Of the total decrease, about EUR 300 million is attributable to lower price levels in particular, and EUR 150 million is related to the sale of our former subsidiary, Buderus Edelstahl. Despite the decline in revenue, our results are above the first half of 2024-2025. Yeah, and in particular, High Performance Metals Division achieved stronger contributions. This, of course, was also related to the sale of Buderus, where we had a one-off impact last year of EUR 81 million. Steel Division was fairly stable. Metal Engineering Division and Metal Forming Division recorded lower earnings. As a result, our margins have improved. On the one side, of course, we had lower revenues. On the other side, we have this increased result levels. Of course, this resulted then in increased margins. Our interest income is, and if you do the math here, you will see that it is stronger than last year. More than EUR 20 million are roughly related to a significantly reduced net debt position, and this combined with lower interest rates supported our interest income. Profit before tax is EUR 278 million compared to EUR 248 million last year. Profit after tax, you see an increase there of 8.6%, so this is below this +EUR 12 million in profit before tax. The main reason is that we saw a higher tax rate there, and this is linked to losses we had in Germany, in the U.S., and in Brazil that we did not recognize the tax assets. I prepared two bridges. The first one you see on the slide number 14, you see the half-year-half-year comparison and the impact of pricing. It means - EUR 270 million, which was more or less, let's say, two-thirds of it was compensated by lower raw material prices. The gross margin, in gross margin, we lost roughly EUR 80 million. This is what you can see in this slide, in this bridge. This EUR 80 million were more or less completely associated to our Steel Division. There is a minor impact also from Metal Forming in HPM Division and in Metal Engineering, it's plus minus zero. You see a positive impact from mix and volume. Volume is in particular associated to strong performance in Steel Division, where we had stronger volumes in the first half compared to the previous year. In HPM Division, volumes were down slightly, and we saw some negative mix impact in Metal Engineering Division. All in all, it adds up to +EUR 45 million. Miscellaneous is + EUR 39 million, as I mentioned here on this slide. There you also, of course, have the positive impacts, 81 million EUR from Buderus last year, this one-offs we communicated one year ago, and of course, there are also included negative impacts from U.S. tariffs, cost inflationary items, and also, of course, our positive impacts from cost reduction programs, CIP programs, and so on. As last time, I prepared the bridge according to our divisional organization. You see here that Steel Division was very strong, by the way, also in the first half last year. It was very strong in Q1 last year, and this year, the full first half was very strong, and in particular, second quarter was very solid. You see the increase of EUR 87 million in HPM Division, mainly associated to what I mentioned before, means the one-off from the sale of Buderus last year, which had a negative impact. The environment, as Herbert discussed, is still difficult, but our measures are working out quite well. And so we are a little bit above operationally the prior year level. Metal Engineering, down EUR 61 million. We have four business units in there. Of course, for all of them, it's a little bit weaker than it was last year in the first quarter, but in the first half. But the main impact, of course, comes from tubular business, where we are highly affected by the tariff situation in the U.S. And in our Wire Division, we are somehow suffering from weaker markets. Metal Forming is down EUR 23 million compared to prior year. We have some headwinds in the markets in our tubes and section business, also still in Automotive Components business. We're also restructuring that area. Herbert also talked about that before. What was very strong again was Warehouse & Rack Solutions. And as we heard before, also in Precision Strip, we have some positive developments there. So we are in EBITDA. We are slightly above prior year level. And I would say, given the environment, a satisfying performance. Cash flow statement, slide number 16. I would say a very positive development there. Cash flow from results, EUR 687 million compared to EUR 481 million. Of course, we had a positive contribution of a higher net result there on the one side. On the other side, we have lower interest rates and interest payments. On the one side, our debt is down. Interest rate came down. On the other side, we also issued a bond last year, and EUR 20 million of these payments for interest are in the second half, and last year, definitely the bulk of this was in the first half. It's EUR 20 million out of debt. Prior year, we also had a one-off there. We had interest payments for prior periods in there of more than EUR 100 million. So this was a burden to this prior year cash flow from results. Very strong again is our changes in net working capital, +EUR 96 million there, so we managed in the last 12 months to release more than EUR 500 million of our net working capital there, and also, roughly EUR 50 million are associated to lower inventory levels out of this EUR 96 million. Cash flow from operating activities this adds then up to EUR 783 million compared to EUR 346 million prior year, means more than doubled this number. Cash flow from investing activities, EUR 510 million last year, EUR 490 million this year, roughly. You see there that we are not at the run rate where we perhaps, or you assume perhaps that we are. Our outlook is still EUR 1,150 million for the year as a whole. We are on time and on budget doing, and I'm talking about our greentec steel, or as we call them, transformation projects or decarbonization projects in Linz and in Donawitz. As I mentioned before, our guidance for this year still will be EUR 1,150 million. There is more to come until end of this year. This adds up then to a free cash flow for this period of EUR 300 million. This is one of the best performances we had for our first half of the fiscal year. Yeah, having said that, we still, of course, have a solid equity base there. We have an equity of EUR 7.5 billion, equity ratio of 49%. Gearing ratio came down to roughly 20%. As I also mentioned here, there are no major redemptions until the end of this year. Everything is solid. Yeah, we can build on that for all the future challenges we have. Let me come to the outlook for the rest of the year. You know that the uncertainty is still there in the course of these U.S. tariffs and also all the weak economies in Europe, so the existing trends in the major economies will more or less continue. Mechanical engineering, construction, consumer goods at low level, but stable. Automotive industry is divided also for the rest of the year. Components is muted and with all the restructuring measures. We see solid demand for the Steel Division, for high-quality steel. The energy market is mixed. Exploration is very low and our OCTG business is affected by the tariffs anyway. What we see is for the remainder of the year, good projects from pipeline business. As I mentioned before, ongoing good development in railway systems, in aerospace, and in warehouse technology, and all the reorganization projects are well on track. We will see, especially in high-performance metals and even more in Metal Forming, the first positive results at the end of the year, and we think that the announced safeguard measures will lead to a more positive view for the upcoming year for the steel division, and the negative effects are included in the guidance as far as we know at this time, and that's the reason why we confirm our guidance and we expect an EBITDA between EUR 1.4 billion and EUR 1.55 billion for FY 2024 at the end of the year. I'm happy. Thank you for your attention and we will be happy to answer your questions. Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and one at this time. One moment for the first question, please. And the first question comes from Tristan Gresser from BNP Paribas. Please go ahead. Yes, hi. Thank you for taking my questions. I have two. The first one, if you could discuss a little bit the ongoing contract negotiations with OEMs. Are they taking place earlier or later this year? Do you think there is a potential for a triple-digit increase for next year? And if you could just remind us how much of your steel portfolio is now on annual contract and how much of that is renegotiated in January. That would be my first question. We have roughly 2 million tons in auto, and 40% of that is annual contracts, so this is the figure we are talking about. At the moment, I would say we are just at the beginning of the negotiations, and I think it's when you look at the steel prices in the course of the years, we have now a very positive momentum for the next year. Normally, OEMs would ask for a reduction, and now we are fighting that we get more. That's clear, but you can imagine that at this time, with the fantasy of CBAM and safeguard, it will be a very tough negotiation, and I wouldn't be surprised that we wouldn't or we won't have a final result at the end of December. I would count for January, so I think they are very tough discussions, I assume. Okay. No, that's very clear. My second question is on the steel action plan. If tomorrow the European Commission mandates that 60% of steel in public procurement should now be European-made, low-carbon steel, how big of an impact is it? Is that a game changer? How big it is for the industry? How big is public procurement in general for steel in Europe, but also for you, more particularly for your own business? Would it have an impact? And if you can elaborate a bit on that, that'd be great. Thank you. Yeah, in general, we have these three parts of, how should I say, positive things in our environment. This is safeguard, this is CBAM, and this green market activity. So all in all, I think it's positive for the steel divisions. Yeah, the public markets, we are not really in the building industry. We're not that much in the building industry. But when it comes to a green steel market, this is very positive for us because we will be one of the first who can provide in 2027 green steel or CO2-reduced steel. So I think that will be very positive for Voestalpine in particular. Okay. And just a quick follow-up on automotive demand. Would you say public buying, public purchasing is a big share or a single-digit share of the total demand or any color there? Well, it's difficult. I think at the moment, very difficult to say. Okay. No, that's fair. Thanks a lot. Appreciate it. The next question comes from Bastian Synagowitz from Deutsche Bank. Please go ahead. Yes. Good afternoon, and thanks for taking my questions as well. I'll start off with the metals engineering business and the rails business here in particular. So first of all, I'm wondering, what is your conviction here on a rebound in the German rail sector next year? I guess this year, you're seeing a bit of a pause, I guess, due to the budget constraints. But do you see any early indications or evidence from projects or tenders coming up already at this point? That's my first question. Yeah. There is business in the German market. We had a relatively good year in the German market, and I think that there are projects also in the next years we have booked. I think that we will realize that. But we know also that Deutsche Bahn is in a reorganization phase that we may face one or the other postponed project that can be the case. But what we have heard that in this infrastructure program, that a bigger portion than expected is allocated to railway infrastructure, and this will be coming in 2027. And this is a very positive news for Voestalpine, knowing that we are a relevant supplier for these railway infrastructure packages. Okay. Thank you. Thanks. That's very clear. Then my next question is on your free cash flow, which I think has been very impressive this quarter. Now, I guess the third quarter is usually a little bit weaker due to the working capital you typically absorb from your customers, which have a different financial year. So can you please give us a little bit of color, first of all, what you expect for Q3 on the free cash flow side and whether the EUR 350 million free cash flow target for the full year is more a floor or a ceiling? And then maybe also related to this, is there any other item we need to consider for the cash flow this year? I guess you will have probably some restructuring expenses. And do you think that it is pretty safe to say that the year-end net debt will be at least on the levels of the second quarter? And maybe also, I guess, what is your conviction here for also generating decent underlying cash flow next year? Thank you. I would like to take this question. Yeah, first of all, I think many things went good and right in our first half of this year. Of course, as I also explained during my presentation, in terms of investing cash flow or cash flow from investing activities, we are not at the run rate to reach this EUR 1.15 billion until the end of the year, but this is still our plan. So we will catch up there, and this will be a burden to our free cash flow in the second half of the year. Working capital, I think we achieved a lot there. We cannot assume that we simply double what we have in there or even doing more because we released roughly 500 or even more than 500 in the last 12 months. So this comes somehow to a natural end, I would say. There is potential. Potential, I would associate and relate to our HPM Division in particular. They are working hard on that side. So we will see some releases there. To your question specifically, of course, through the first of December, we have many customers. It's their year-end, and we will see an impact. And after my 18 or 19 months here within Voestalpine, this is what I would like or can confirm. So we will see an impact there, which is a negative one in our Q3, means through the 1st of December. And you asked specifically the question how I would qualify this EUR 350 million guidance. Is it a floor? I would say, as CFO, I would say, yeah, it could be a floor, but there's still some uncertainty there. But I am positive that we will minimum reach this level and for the next year. So we are right now in the phase of doing our planning exercise. We guided for next year. I think it was in our last call, EUR 1.15 billion for CapEx as well. This is up to now unchanged. So I can confirm that. And having said that, we definitely target the positive free cash flow also next year. Okay. Excellent. Thanks, Gerald. As a reminder, anyone who wishes to ask a question may press star and one at this time. The next question comes from Patrick Steiner from ODDO BHF. Please go ahead. Good afternoon. Patrick Steiner speaking. Thank you very much for taking my questions. One remaining from my side. Could you please share with us your view on the High Performance Metals Division? I mean, will you recover profitability to past margin levels? And if yes, how long will it take? And what are, in your view, the main drivers to get there? Thanks. So also for HPM Division, we walked the talk. And as we said the last time, so this is still unchanged, our plan. So we expect in the period of the next three years that we will see EBITDA levels again. We had in the past, I mean, EUR 350 million-EUR 400 million. This is our clear target there. The guys there are really working hard, restructuring everything in full this year. What we faced, as also Herbert elaborated, was some headwinds also from the market, but the plan, the restructuring plan, is absolutely on track, and this is definitely positive. And this is also the reason why they are where they are in terms of profitability in this first half, because with this difficult market, I would even have expected a weaker result. But they're doing well, and I'm positive at the end of this sort of crisis, we will see some recovery from the markets. We will do well, and we will be on top again. So EUR 350 million- EUR 400 million in three years plus. This is what I would assume. Perfect. Thank you very much. Sounds promising. So it looks like there are no further questions at this time. So I would like to turn the conference back over to Peter Fleischer for any closing remarks. Thank you very much, ladies and gentlemen, for the interesting discussion and for your time. Anyway, anyhow, if there come up any questions, please feel free to give either Gerald or myself a call. And I'm sure we will be able to continue the discussion. Thank you very much so far, and have a good day. Bye-bye. Bye-bye. Voestalpine, one step ahead. Ladies and gentlemen, the conference is now concluded, and we may disconnect. Thank you very much for your joint attendance.