Welcome to the conference call of Salzgitter AG regarding the Q3 results 2023. Please be aware that this conference call will be recorded. I will now hand over to Mr. Burkhard Becker, CFO of Salzgitter AG, and Mr. Markus Heidler, Head of Investor Relations. Yeah, thank you very much. Good morning, ladies and gentlemen. Welcome to the conference call on the results of the first nine months of the financial year 2023, in which we saw continuously increasing economic challenges. We therefore view the results in the first nine months of the financial year as indeed presentable, although it was discernibly below the exceptional year of 2022. The trend was mainly driven by the still satisfactory results of the steel production and steel processing business unit in the first half year, and the continued outstanding performance of the technology business unit. Compared with year-end 2022, the Salzgitter Group's net financial debt decreased by more than EUR 150 million, despite the high level of investment. This achievement once more demonstrates the Salzgitter Group's robust balance sheet and sound financial position. External sales decreased to EUR 8.4 billion, mainly due to a downturn in shipment volumes and the lower average selling prices of many rolled steel products compared with the year earlier period. EBITDA of EUR 576 million and earnings before taxes of EUR 254 million include a contribution of EUR 20 million from Aurubis. The after-tax result came in at EUR 194 million, which brings basic earnings per share to EUR 3.5. Return on capital employed amounted to 6.5%. The equity ratio remained virtually stable at 45%. We are particularly pleased that despite the economic headwinds and the high level of CapEx, our net debt halved from EUR 800 million at the end of September 2022, to EUR 400 million this year. We have relentlessly pursued our Salzgitter AG 2030 strategy, also in this financial year, first and foremost, by continuing to work full steam ahead on rapidly implementing our Salzgitter decarbonization program. By now, we have placed orders for all primary facility components of the first stage of Salzgitter. The construction work at the Salzgitter site is making good progress. The German government's agreement, reached at the end of last week, to lower Germany's electricity tax, serves as a demonstration of the political will to back the reduction in electricity prices in Germany, so urgently required. It is worth noting, however, that the solution essentially affirms the current status quo for the energy-intensive industry. We are unable to detect substantial safeguarding for the industry that currently finds itself not only in global competition, but also right in the middle of capital-intensive transformation. More effort is needed here. In order to secure our crude steel supply until Salzgitter is realized, we are in the process of relining our Blast Furnace A in Salzgitter at the moment. That should be concluded by the end of this month. We have also continued to vigorously pursue our internal efficiency measures in the past months. Our Performance 2026 program of measures is meanwhile aimed at delivering a planned overall effect of more than EUR 200 million. While the development of shipment volumes and prices for main, many products required us to reduce our sales outlook, we are adhering to our recent earnings guidance of EBITDA of between EUR 650 million and EUR 700 million, a pre-tax profit of between EUR 200 million and EUR 250 million. The reduction of our working capital, and therefore also of our net financial debt, is meanwhile progressing as planned. Yeah, thank you all very much. So far, my speech. And with that, I would like to start the Q&A session with you. Thank you very much. Thank you. If you would like to ask a question, please use the raise hand icon on the button bar in the front end. When it's your turn, I will announce your name, and you will see an activation notification in WebEx. If you wish to withdraw your question, click again on the hand icon. Participants who have dialed in via telephone should press star three on their keypad and wait for further instructions. Patrick Mann, may we have your question, please? Thank you for the opportunity. I just wanted to ask about the outlook for markets, maybe next year. If I think about the kind of key end markets, construction still looks weak, and I see in your outlook statement, you say, you know, the call-offs in the auto sector have been fairly constant because of the order backlog, but that's starting to run down now. And then maybe linked to that, in terms of bringing Blast Furnace A back online and what to do with Blast Furnace C, do you see any adjustment to your production plans, going forward? Thank you. Okay, let me start with the second question. The Blast Furnace A, as scheduled, will be back on stream at the end of November, and no change from our side plans. And Blast Furnace C, the small one with a capacity of 500,000 metric tons per annum, is back on stream for several weeks now. And same for this furnace. We will operate them with both furnaces. Yeah, outlook for markets, yeah, construction, meaning PTG sections, it's still very big no momentum in the demand for Peiner Träger. Yes, yes, you are right. The order intake in automotive is yeah let me say by around 5%-10% lower than the shipments. And we see a tight movement for this. Yeah, so and yeah, it's too early. We are in the middle of the budgeting process to speak about 2024, but at least first quarter will be quite challenging for all what is steel. Not for technology. Technology is still very strong. So for further questions, please use the Raise Hand icon on the bottom bar on the front end. Participants who have dialed in via telephone should press star three on the keypad and wait for further instructions. Mr. Christian Obst, may we have your question, please? To the cash flow. So it was quite remarkable of the debt reduction. You mentioned that. What do you expect for the fourth quarter? Is there more to come? And going into the next year, do you think there is a meaningful change when it comes to the entire how suppliers and customers are dealing with their cash because of the rising interest rates or high interest rates? Do you expect any meaningful change in the entire structure of cash development going into the next year? This is the first question. Yeah. Cash flow Q4 helps. Let me answer in terms of net financial position. September, EUR 400 million debt. I confirm this as Walter Pieter's expectation in December. Why? I see just little further decrease in working capital. But you may be aware that we are in the process of selling the participation of Borusan Mannesmann to Borusan in Turkey. The cash of a little more than EUR 50 million will be cashed in end of November. But on the other hand, we have a cash out for SALCOS®. SALCOS® for the entire year, our gross cash out will be EUR 400 million, and in September, we had EUR 250 million. So, this will be financed by what I said, little by reduction working capital, Borusan Mannesmann, and this and that. Yeah. Yeah, meaningful change, economic environment, interest rates, et cetera. What we see is that that some of our customers wait for further reduction in prices. But we are quite confident that business, and that is indeed what we see, that with the stabilizing of the end product prices, a customer in yeah, Q1 or end of Q1, will decide on their investment decisions. Although I expect the interest rates with the side movement on the level we have here, and that we will see some restocking effects during Q1. Yeah, but not very early. I think the next weeks will be challenging. Yeah. Yeah. Construction business is not. Yeah, we don't expect such an increase. So overall, when we see now the stabilizing of the prices, end products, then more and more customers will decide on their projects, and some restocking beginning of the new year. Okay. Thank you for that detailed answer. Another one is on heavy plate and EUROPIPE. Do you see in heavy plate any special situation? What do you expect going forward when it comes especially to, to the wind industry, which is in some kind of a doldrums currently? The next one then to EUROPIPE and all the related infrastructure developments. Do you see some additional uptick when it comes to the new year? Yeah. Although definitely for EUROPIPE, yeah. There are several projects under discussion with customers, and we can say worldwide, worldwide, yeah. Even Australia, Papua New Guinea, I never believed that we are able to deliver in this region. No, that was a joke. Anyhow, there are many, many projects, but decisions expected in early summer or late spring 2024. So, that means that the load for EUROPIPE and for plate here, Mannesmann Rohre in Mülheim, will be low for 5-6 months now, but good expectation. And winds, yeah, we see that both for Ilsenburg and for Mülheim as an opportunity, and we are present in this market. Yes. Yeah. Another question then concerning EUROPIPE and all the maybe upcoming new orders. Can you say something about the pricing environment there, and how do you secure that you make a decent margin on that, if it comes, of course? Yeah. What you have to be aware of is that some competitors in Asia for the tube business are no longer serving this market. That, by the way, is the rationale behind that we can deliver to Australia also. And that also helps that we expect to earn a reasonable margin on that. Securing, if I understand your question, so yes, when EUROPIPE gets this order and delivery time is longer, yeah, then we, meaning EUROPIPE, is hedging the iron ore or dollar content for this timing. Yeah, that we do. Okay. One last question is on imports. Where do you see the main threats? You mentioned that in your three-quarter report, of course, where do you see the main threat coming from imports in the next year? Yeah. Imports are strong for plate business, yeah. There we see Vietnam, India that are yeah, they are- that is the strongest impact for the quarto plate business. Okay. Thank you very much. I will connect now a telephone participant. Please- Hello? Yes, hello, this is Alain from Morgan Stanley, Alain Gabriel. Two questions from my side. Firstly, were there any sizable hedging gains that have improved your cost performance in steel production, during the quarter? And how should you expect the raw material costs to evolve during Q4 and then subsequently in 1Q 2024? That's my first question. Thank you. Now, hedging impacts insignificant. Reason is that with this high level for coking coal, we did only small volumes, and we did some for iron ore, but yeah maybe one-digit million EUR number positive yeah, so not significant, yeah. And yeah, for iron ore and coking coal raw material prices we assume that we see a tight movement on the level we have today. Thank you. That's very clear. And my second question is on SALCOS®. Do you mind giving us an update on the project? How is it going as planned? Any updates on the overall budget, and do you see any risks from today's point of view of further escalations in the budget? Thank you. With respect to the budget, definitely no risk. What is the reason? Yeah, we could set up all the contracts for the primary equipment. For all important equipment, we have now the contracts, yeah, so we locked in the prices and the timing, et cetera. So, definitely no risks that we see an overrun in the budget, yeah. And so far, when you look here, what is going on, on the sites of your construction work, the preparation of the ground, et cetera, no, it's going well. You know, I would assume if outside temperatures, et cetera, and we will get mild winter here, that will help also. Yeah. Thank you. Next question, Mr. Andrew Jones. Your line is open, Mr. Jones. Okay. Can you hear me okay? Yeah. Ah, good. Cool. So just a couple of things. On the U.S. tariff situation, clearly, I mean, it looks as though you're gonna be facing those Section 232 tariffs at some stage, if we don't get some sort of breakthrough. Can you just give us an idea of your exposure to that change in tariff regime, what that could mean in terms of maybe a ballpark estimate for the potential EBITDA hit? Then, just secondly, on your steel processing unit, I think in the second quarter, you were talking about EBITDA for this year, somewhere around EUR 300 million. And I think you were saying that, like, structurally, the business has improved with high utilizations and yields on both plans, and you were, I think you threw out a number of about EUR 250 million per annum going forward. In light of the weaker numbers for Q3, I mean, do you still stand by that sort of mid-cycle profitability level? And, you know, is it, you know, fair to still fair to say that we've seen structural improvement driving, you know, the strong first half, or was it more of a reflection of a strong energy market that's maybe mean- reverting now? Thank you. Yeah, steel processing in the first half of 2024 compared to expectations for the entire year and midterm. I would expect that also for steel processing, yeah, first half weaker than the second, yeah. And one of the reasons is that decision on bigger projects, yeah, as I told for EUROPIPE, is also true for Mannesmann Line Pipe, for Mannesmann Großrohr in Salzgitter AG, and also for our stainless company, Mannesmann Stainless Tubes, yeah. For the midterm, I'm still confident that the numbers we talked about as a kind of guidance for this business can be performed, yeah. Becauseof the plate, wind industry, we will participate there, large diameter tubes, as I told you, big projects, and that is not only true for 2024, yeah. For example, EUROPIPE and Mannesmann Großrohr, PVC, several projects, not only hydrogen, Carbon Capture Storage, for example, et cetera. So, I'm optimistic to confirm that midterm, yeah, first half lower than second half, 2024. Yeah, and exposure, US, not really so significant for us, yeah. I mean, we have a stronger for the company, for the company in the Mannesmann Line Pipe business. They are delivering in good times, around 80,000 metric tons to the United States. But nothing really worth to discuss for the Salzgitter Group as a whole. Okay. So a fairly immaterial impact, you think? Yeah. Yeah. Yeah. Okay, thank you. There are no further questions... Sorry, we have one more. Moses Ola, may we have your question, please? Hi, hello, can you hear me? Yeah, I can hear you. Hello? Can you hear me? Yeah, I can hear you. Okay, thank you. So just three questions from myself, please. So the first question, just on working capital and net debt guidance. So previous guidance was for EUR 500 million working capital release, net debt for EUR 400 million at the end of the year. Do you have any revised targets on that now that you're tracking well ahead at Q3? And just again, on working capital, so into next year, how much do you think is there less structurally to squeeze out of the business? No, as I said, we confirm guidance for net debt on the level of September, means debt of EUR 400 million, yeah. And yeah, maybe we see a little decrease working capital. Little means for me, around EUR 50 million. But on the other and, and then we have a cash in of Borusan Mannesmann, another EUR 50 million, and we have cash out for SALCOS®, yeah. So the balance of this is that I confirm the EUR 400 million, yeah. Yeah, and for the next year, the one aspect is the pricing of material. As I said, I expect raw material side movement, and maybe a little normalization of end product prices, and hopefully some higher volume. Yeah, this would need some additional working capital, but not in really material terms. Yeah, normal fluctuation, yeah. Okay, thanks for that. My second question is on BA Technology. So again, continued upward improvement in this segment. So given the order book visibility that you have in that business, what would you, how would you class earnings expectations into next year? Could we be looking at, you know, triple-digit earnings before tax performance there, technology for next year? Answer: Yes. Thank you very much for that. And then finally, on the electricity taxes. So you commented here that more is still needed from the German government. What specifically would you like to see here? I think previous reports mentioned subsidies for electricity users, but this time around, it's been revised into taxes. You know, which model do you think is better here? Would you prefer the subsidies or taxes, or what were your comments alluding to? Yeah. It's not only that we are see demand for subsidies, yeah. We think that all decision processes in Germany in this structure, and that is not only on federal stage, that is in the several countries here and on local authorities and so on, so that all the decision processes for infrastructure, for network, tubes, hydrogen, et cetera, all this has to be quicker, yeah. Because we think this transformation process the demand is clear, yeah, what we have to do, but we need a roadmap and commitment of all decision makers to do it quicker, yeah. And as we always said, subsidy for the electricity price is always seen from our side as a temporary, so-called, we call it, call it as a bridge price for a certain time period, not for forever, yeah. So decision process quicker, yeah, level playing field with incoming imports. So nothing really new, yeah. But yeah, we like to see it happen. Understood. Thank you so much. Mr. Bastian Synagowitz, may we have your question, please? Bastian, you are in the line. Yep. Good morning. Hopefully, you can hear me now. Yes. Perfect. I would like to go back to the performance of the production segment, which seems to have gone quite a bit better versus, I think also what you indicated in the last call, despite all of the headwinds. Can you maybe help us to understand what has been driving this? And maybe also help us whether you expect to keep that run rate in the fourth quarter. And maybe also in that context here, maybe help us to understand where you stand in terms of the ramp-up of your new galvanizing line, and whether we can expect even more contribution next year versus this year. Yeah, unlikely not, but joke away. What we have to see is that, yeah, the performance of steel production in Q2 was not quite there where we expect this, but this better result in Q3, yeah, is not an indicator for a trend reversal. Yeah, definitely not, you are aware as a long-term observer of Salzgitter AG, that a Q4 anyhow is always a difficult one in terms of Christmas season, when automotive especially demands what material that is sitting in our stock, et cetera, et cetera. So not a trend reversal, yeah. What I said for 2024 means that Q1 in steel production will be a challenging one. Okay. Okay, thank you. Then, my second question is on SALCOS®. I guess for the electrolyzer equipment, you've been choosing pressurized alkaline, which is the same technology which you also used for your pilot phase. But I think you changed to, you switched to a different supplier now, and from my understanding, HydrogenPro has so far not built a single plant in industrial scale so far. Of course, there are generally very, very few industrialized or industrial scale electrolyzer plants which have been built. But maybe can you please talk about what led you to go with this supplier? And maybe also how far you've been considering the execution risk here in that choice. Yeah. I have to admit that I'm not so close to that, but it was a normal process. You are talking about ANDRITZ, yeah? And no, it's they made the best performance in the entire process here, in the quotations, technical layout, et cetera, yeah. I was actually referring to HydrogenPro. I think ANDRITZ is only the EPC provider, but I think the technology provider is HydrogenPro. So that was the one I was referring to here. And I think in the pilot phase you've been using Sunfire, and so I was just wondering why you switched here and but, yeah, just in case there's any more color on that. I have the language. I suggest that you work this out later with Mr. Heidler. Okay, no problems. Thank you. There are no further questions. All right then, if all questions are answered, I guess we are ending the Q&A session here, and thanks for the discussion. Talk to you soon. In case there are any further questions, just give Jan Diesemann or me a call. Thank you. Thank you to everyone who participated in this conference. Goodbye. Goodbye. Thank you.