Voestalpine AG (VOE) Earnings Call Transcript & Summary

Good morning ladies and gentlemen, I would like to welcome you cordially to Voestalpine Full year results conference. I'd like to report about the past business year 2023-2024, and we will also provide you with an outlook. My name is Peter Felsbach, Head of the Group Communications and our facilitator for this press conference. There is media information, photos and videos and publications can be found as usual on our website www.voestalpine.com, in the Media section. The presentation will about 45 minutes, and afterwards you will be able to ask questions from our Board members. [Operator Instructions] Now let's move on to the content. A very busy and eventual business year lies behind us. So we have started the groundbreaking ceremonies in Linz and Donawitz for greentec steel and the new special steel plant in Kapfenberg has been inaugurated. We're still in a very challenging economic environment with numerous geopolitical conflicts. Voestalpine wouldn't be Voestalpine if it didn't have a very robust result after all. More on that from our Board members. I'd like to welcome them very cordially. As you know, since the 1st of April of 2024, we had three new members in the Board of Voestalpine AG. On your left, we have Reinhard Nöbaueru, the new Head of the High Performance Metals Division; Carola Richter, the new Head of the Metal Forming Division; CEO, Herbert Eibensteiner; Gerald Mayer, our new CFO of Voestalpine AG; Hubert Zajicek, Head of the Steel Division; and Franz Kainersdorfer, Head the Metal Engineering Division. Our new Board members have already been communicated, so I'd like to also introduce them in alphabetic sequence. Gerald Mayer, the new CFO of Voestalpine AG; And a well known face to many of you, has studied in Linz business school and started as a tax adviser in Linz and held various leadership positions in VA AG, Siemens. Since 2007, he was the CFO with the international AMAG Austria Metall AG, in charge of Finance and Controlling, Accounting and Law. In 2019, he was also appointed as the CEO. Gerald Mayer is married and has three daughters. Reinhard Nöbaueru, new Head of the High Performance Metals was born in Steyr, and studied at the Mining University at Leoben and at the ETH Zurich. Since 1988, he's been working in the steel industry. In 2005, he joined Voestalpine and he held various management positions in Austria and abroad. Since 2011, Reinhard Nobaueru has been a member of the Board of the High Performance Metals division, where he's been in charge of [indiscernible] service. He's married and has two adult children. Carola Richter, new Head of the Metal Forming division. She was born in Germany. She did her PhD at the Universities of Heidelberg and Weizmann Institute of Science in Israel in the area of high-energy physics. In the past 20 years, she held managerial positions for BASF. More than 10 years she spent outside of Europe. Since 2019, she was the regional president, in charge of for the growth region Asia Pacific, headquartered in Hong Kong and recently in Singapore. Carola Richter is married, and she moved from Singapore to Linz. I'd like to welcome you in the team of the Board members of Voestalpine AG and would like to wish you all the best. Now this brings us to the first part, I would like to ask our CEO Herbert Eibensteiner for his presentation.

Ladies and gentlemen, I cordially welcome also on my side the presentation of the figures of the past business year 2023-'24. I would like to start with the highlights. As Mr. Felsbach has already said, we have a very solid operating result, a good EBITDA, it's very robust in a very difficult market environment. That's how we managed to fulfill market expectations. The comparative figures, we are comparing with a record year because, as you know, last year, we achieved record results at Voestalpine AG. And this year, we achieved the second highest revenue after the record result in the previous year. And debt is also at a historically low level. That is important in order to ensure that the project that we are planning to implement in future can actually be implemented and also compared to the previous business year, we managed to also increase the operating cash flow. There's also very important projects that we launched in international markets. Our colleagues are going to report on that. Important projects in the U.S., for example, in the area of railways engineering have been implemented and also projects in Europe, the railway attachment structures. And also in warehouse technology last year, we acquired a company in Italy, and also a plant in the U.S. for the production for the American market. New automotive lines were delivered to China, and they were commissioned there. So I believe that these are very important projects for our future to ensure that we have a good presence in international markets. And we're also seeing that the demand in terms of renewable energy sources is going up internationally. So in Brazil, for example, our capacities were doubled. But we also implemented important measures for the restructuring of some parts of our business in Germany, such as, for example, the reorganization of our Automotive segment, and also the planned divestment of Buderos special steel in Germany. We are going to hear about this in more detail later on. Now there have also been some technological milestones in the past business year. The official opening of the special steel plant in Kapfenberg, as you know, 200,000 tonnes of special steels will be produced there for the international automotive industry, for the energy industry and also for the aerospace industry. I think this is a very modern plant that we have opened there and the ramp up is working according to schedule. We also have another big project, namely Greentec Steel, a very outbreaking project. We have our launched projects in Linz and Donawitz. The contracts have been awarded for the key facilities, and you will hear that we are on time and on budget when it comes to implementing our project. And let me remind you that until 2027, we are going to invest EUR 1.5 billion. Now let us move on to the global economic environment. Europe is our weakest market. We are seeing subdued economic growth in Europe in the past business year. And Germany, a very important market for us, has not really developed very well. We are seeing a significantly better development in the U.S. In spite of the continuing high interest rates, but we have seen a very robust growth in the U.S., even though there's a persistent inflation there. China and Asia saw lower growth than in previous years. There are problems and issues in the real estate industry there, and these are weighing down on the growth there. But anyway, there's still robust development in China. And in South America, we are -- we've seen a very positive environment and only towards the end of the business year, there has been somewhat slower economic growth. I would now like to ask Gerald Mayer to present the figures. Gerald, over to you.

Ladies and gentlemen, I'm very pleased that since the first of April, I'm part of the Management Board of Voestalpine. And I can tell you we have a robust financial position, that is based on a very strong strategy. So basically, it's a very robust company. Before I talk about the financial KPIs, let me inform you, as Mr. Eibensteiner already said, the result of last year has been a record-breaking result. And you, of course, have to see this in the right context. Revenue has gone down from EUR 18.2 billion to EUR 16.7 billion. About 50% of this is due to lower volumes and another 50% is caused by lower prices. Taking a look at the divisions, there's been a downturn in three divisions. The Metal Engineering division alone has seen a slight increase in revenue. The operating result, the EBITDA, that's the result before taxes, depreciation and amortization, is at EUR 1.7 billion approximately. So it's down after EUR 2.5 billion in the previous year, a minus of 34.5% as you can see here. But if you take a look at the long-term view, that's still a very robust result. The profit from operations EBIT, close to EUR 600 million after EUR 1.6 billion in the previous year. This is influenced by special effects. In 2023, non-recurring items those were impairments of company values that don't have an impact on cash, but they amounted to about EUR 400 million. The profit before tax is EUR 400 million and the financial results due to higher interest rates has also gone down, and you can see this with when you take a look at the difference between the EBIT and the pre-tax results. The profit after tax, EUR 207 million after EUR 1.2 billion in the previous year. So the tax rate is a bit higher than usual because of these impairments and non-recurring items that cannot be deducted from tax. So the dividend per share will be proposed at the amount of EUR 0.70 per share. The Annual General Meeting is in July, we'll decide on that. And the number of employees has remained more or less stable in this corner slightly. As announced, I would like to compare EBITDA in a multi-year comparison. So EUR 1.7 billion is quite robust. When you compare it with the previous years, we've seen two record-breaking results in the past 2 years. So if you look back a bit further into the past, you see that it's actually quite good result. And allow me to mention that we are in a very challenging, volatile and difficult economic environment. So I think it is a very robust and respective result of EUR 1.7 billion. I mentioned at the beginning that Voestalpine has a good solid robust equity base. You can see this here. We come from a time of a reduction of debt. So these record-breaking years were used to bring down the debt of -- and also the equity ratio is currently 22%. So it is at the level of the previous year. The equity is EUR 7.5 billion, that's an equity ratio of 45%. So this is a very robust equity base. So we are basically well prepared for any projects going forward, including our transformation and decarbonization of the Voestalpine Group. And last but not least, this is always important. Take a look at the financial position. We see that liquidity at the year-end was EUR 2.6 billion. So the liquidity also contains the committed lines that we agreed with our banks. On the right-hand side, you can see the repayments, the loans that will be repaid. So you see that with this liquidity, the loans of the coming 4 years can be repaid, and I think that is a very comforting position to be in. So all things considered, as far as my part is concerned, we can say that the economic environment has been difficult. The EBITDA of EUR 1.7 billion is a robust EBITDA. And the financial position, equity position of the Voestalpine Group is suitable in order to ensure that our transformation towards a green steel company can be supported. Thank you.

Yes. Thank you very much, Mr. Mayer for his overview. This takes us to the highlights of the four divisions. We'll start with the Steel division with Mr. Zajicek; and Mr. Nöbaueru and Mr. Kainersdorfer will talk about the High Performance Metals and the Metal Engineering division, respectively; and then Carola Richter will talk about the Metal Forming division, and then we'll continue with the strategy for 2030 plus. Mr. Zajicek, please.

Ladies and gentlemen, the Steel division of Voestalpine achieved a very robust result in the past business year. This was characterized by two important segments. On the one hand, the automotive industry and the energy industry, energy sector, this have been stable in terms of the demand situation and our high-tech products allowed us to also enforce our prices. But there have also been some weaker market segments, the construction industry, mechanical engineering and white goods and appliances. As you've heard from Mr. Eibensteiner, our CEO, we are in the midst of preparing for our carbon neutral production with the name Greentec steel, investing in Linz. About EUR 1 billion of the EUR 1.5 billion will be invested here in Linz. The project is proceeding according to schedule. Due to local circumstances, we are needing to shift some things, but we are clearing the construction site and the new raw material supply of the steel plant has already been started. It's an 800-meter long and 68-meter high conveyor bridge that's already being installed. We have 220,000 volt power supply. And at the beginning of the year, the electric arc furnace contract has been awarded to Primetals. And in terms of costs, we are also doing very well and everything is on time and on budget. We're also preparing the market for green steel. We are already offering steel products under the brand name Greentec Steel Edition. We have a lower CO2 footprint for our products. And when it comes to the commissioning of the plant in 2027, we will already have prepared the market for green steel. Of course, we are not only investing in the transformation towards CO2-neutral production, but we're also trying to make sure that we remain quality leaders in the area of steel products. We want to expand this position further. I'm very pleased that our very important plant has been commissioned. It's a pickling line in the cold rolling mill, a huge plant, where we want to improve our quality even further, and an old plant has been shut down and also the modernization of the hot-dip galvanizing line. So these are products that are in high demand in the automotive industry. So this modernization is progressing according to plan, and will be continued for a few years to come to make sure that we are not only transforming, but we're also maintaining our position as a high-quality supplier. Thank you.

Ladies and gentlemen, I would also like to welcome you cordially. Today, I would like to present the highlights from the High Performance Metals division. This is the first time that, since I've just taken over this High Performance Metals Division. We are in a very good position. And in the coming years, together with my team members across the globe, I'm going to expand this position further. As to the past business year, we were confronted with quite varying demand across the regions. There's been an overall decline in earnings across the entire division, especially in toolmaking, where there's been a subdued demand as an extremely strong competitive pressure for standard products, especially in Germany. And on the other hand we are seeing positive development in the U.S. and North America and a very positive trend, which continued in China in recent months. We've also seen a very positive trend in the aerospace industry. The energy sector remains stable. And after long deliberations, we have started the divestment process for Buderus Edelstahl. Then the new special steel plant in Kapfenberg was put into operation in the beginning of 2024. We are ramping up. It's going according to plan. So we're in a good way. Thank you.

Ladies and gentlemen, I'd also like to welcome you very cordially, and I will report on the Metal Engineering Division in the past business year. And we organized in two segments, the Railway Systems and the Industrial Systems segment. In Railway Systems last year, we had a very stable growth characterized by high demand for our products and systems. And there's also been very good results coming from the Railway Systems segment. And we have used this past year in order to broaden our offer to have a systemic offer. Also digitization was used. We also use artificial intelligence. So we are well underway in order to expand our global market leadership position. In the area of Industrial Systems, that is subdivided into several other segments. In the area of welding, for example, due to the international setup we were uncoupled from the European development in a positive sense. That is to say we achieved a very robust result in the Welding segment, and we used the time in order to complete our product portfolio. So in the year of welding wire, we needed to broaden our offer, and we acquired an Italian premium manufacturer of welding wire. So welding will be offering a full range of products and will be developed further. The business area where we are seeing very strong impact of the European business environment, which is quite weak, is the area of wire, where there's quite moderate demand. We adapted our capacities accordingly, and we'll continue to do so. But here too, we are in the process of ensuring that our products, customers and our regional setup will be further diversified. So in the past business year, we've also started cost optimization programs in order to be sure that if business picks up again, we are well prepared, and we have a good, sustainable position. The new segment that has delivered a significant contribution to our results is Tubulars. So in the past business year, we benefited from the very good demand situation in the area of the energy industry, and we have used this time in order to develop our strategy further and to be ready for the future. Because in the coming 10 years, as far as oil and gas are concerned, there will be a lower demand. So we quickly implemented a new product segment, and within one year, we acquired a competitor for this product. So in the course of this year, after this summer, we are going to launch this new product portfolio. This seamless square and rectangular, hollow sections. Now where we have a conclusion, I can report that just like in the Steel division, we are working to have a transition of our technology with installation of an electric arc furnace in Donawitz, which is on schedule. So in 2027, we'll...

Good morning also from me. I am very pleased that this is first time that I have the chance of participating in the press conference of our full year results. I'll report on the Metal Forming division, where we're leading position in market segments that offer and require tailor-made solutions. Together with the Metal Forming team, we are going to continue to grow and to focus on internationalization. I would like to focus on a few highlights from the 2023-'24 business year, and it's about the international dimension. We are very proud about the closing of the acquisition of our new Italian subsidiary, Torri, in autumn of last year. So the integration is on schedule and together with our Dutch subsidiary Nedcon, that's already working. In the area of warehouse technology, we have not only fitting technological addition to our portfolio, but also a good geographic fit. We'll continue with organic growth, new projects that stay with warehouse technology. And the very important North American market, we have a -- built a new hall that was inaugurated on the 31st of January of 2024. I already visited it. And there's another hall that will be built for processing plant, the roll corporation. So when I was there, well, the plants were already being installed, and we plan to go live in summer. Now in the Czech Republic, we've also expanded. In Brazil, we doubled our capacities. And also in China, our important growth market, five plants are for air spring components for Chinese OEMs were built. Now let me continue with the business results. We'll start with Tubes & Sections. Outside of Europe, we have good business for material handling in aerospace. In South America, the trucks and bus business compensated for the weaker PV business. And in Asia, as I said previously, with the air spring systems, we are managing to penetrate the market, and we compensated for the weaker performance in the Construction Industry segment. Now in Europe, PV business was good, which offset the slightly weaker performance in the Automotive segment. What's been very positive in Europe is our British subsidiary, Metsec, has managed to show a robust performance in the very difficult market segment. So in terms of Tubes & Sections, you see that we are working in many different industries in many different geographic regions. And with the stable portfolio, we are still managing to achieve good margins. We're also very happy in terms of Warehouse & Rack solutions. Well, this is where the online dealers are more confident after the COVID digitalization and automation of warehouse technology continues, and we are very pleased about full order books in the coming business year. Mr. Eibensteiner, our CEO, has already said it. The automotive industry is a bit more difficult, especially as far as Europe is concerned. The Metal Forming Division, we are very strong in terms of the European German OEMs. And just to give you a comparison, the automotive industry is still 20% below the figures of the figures of 2019 for the production of new cars. Now what does this mean for us? We are in the process of a strategic reorientation to ensure the good capacity utilization of our plant and equipment. It's about attracting new business and the current competition. And also, we are trying to win over new international customers, and we believe that with our global network and as a strategic partner for complex solutions and with excellent quality and performance, we have a good outlook. Now let me briefly talk about our foreign subsidiaries in the automotive industry. These are performing very well, and we are seeing the growth there that we expected. And of course, we also going to restructure our German production. We've already reacted by personnel-related measures and by the divestment in Nagold, and we will continue to ensure that we remain competitive and we're also going to move for digitization, automation and manage costs. And then there's Precision Strip. We had a slightly weaker demand in the construction industry and in packaging. Warehouses of our customers were quite full. But this business, of course, depends on novelties, innovations, and we had a successful market launch in Precision Strip in the area of non-ferrous metals. So this is a new technology to combine aluminum and copper, and we are very successful in terms of electronics applications.

Thank you to the report of our four divisions for the highlights and the overview for the past business year. As we've heard repeatedly, we're in a very dynamic environment, so it is very important to have a clear plan, a clear strategy. Voestalpine in the past business year has also worked to develop this strategy 2030+. So I'd like to invite you to watch a short video clip, and Mr. Eibensteiner, our CEO, will then present the details. [Presentation]

Ladies and gentlemen, today, I can only show you a little excerpt of the Strategy 2030+ of Voestalpine. But I believe what's important is this reference to the fact that we expect a very dynamic environment in the future. I think you are familiar with the global mega trends. We can say that geopolitical uncertainty will increase. We see that there's a discussion about trade barriers and new trade barriers are being erected. When there's climate change, sustainability and conservation of resources is getting even more important in the future, in everything that we do. Also in terms of what our environment is going to look like. And what we're seeing is demographic change and there's also a sociocultural transformation. If you consider how our new employees will have to react to the various economic circumstances, and of how employees view companies in future. We're also seeing an accelerating technological progress, and this is probably going to accelerate more in the future. So these are some of the challenges we are facing. So it is very important for us to make sure that we are still sustainable and have sustainable value-adding growth. And to ensure that the future viability, the robustness and the resilience of our company continuously developed. Now these are some of the goals for the years to come. So if we can say in 2030 that we achieved all of these goals, that would be a very successful implementation of our strategy. That means that we would have reached our goals. So we want to have a value adding growth in this dynamic environment, especially in terms of processing and also at the international level. So our colleagues have already said in which direction we are intending to go. We need to have a successful decarbonization strategy, and we also need to make sure that we do this in an economically viable way. So we need to find the right business case for this decarbonization approach. And you're seeing that there are challenges in the area of mobility. There are also market shifts. We see this transformation as an opportunity and also as a chance to develop and grow. So on the one hand, we need to navigate the energy transition in order to ensure that we meet our energy demand for the future. And we're also seeing that the energy industry itself is going through a transformation process, and this is a chance to sell our high-quality products to the energy industry. So I talked about the trade barriers that are coming up, and there is no doubt that there will continue to be a further globalization and internationalization in this changed trading environment. So we want to be even closer to our customers in the global markets. Let me give one example. We are producing warehouse technology parts for the U.S. market -- in the U.S., and this is exactly what we intend to do. We want to move closer to our customers in the various markets. So we want to have competitive production facilities, that is something that is necessary to ensure that our products, our technologies and production sites continue to be state-of-the-art. And I believe that this technology leadership position that we are striving to achieve is a focus on high-tech products. So we are not trying to grow in the commodity segment. So we want to continue to develop outside the international level. And what's really important is that -- is that Voestalpine continues to be an attractive employer for highly qualified and motivated employees, we want to maintain and also expand this position of being a highly attractive employer. And now I'd like to show you one more slide to focus on that last point, talking about qualified employees. So we know that good employees are the pillar of our success. We are investing a lot in training and continuing professional development. So about EUR 70 million were invested in training last year. And this has been a very good investment, I may say, and it will stay that way. Our focus is on ensuring that we grow our workflow from within. So you know the figures. We have about 1,600 apprentices that are currently undergoing training in our various plants. This is very important for me and for all of us to ensure that we attract more women to Voestalpine. We're partially successful with that. So the number of women in technical professions has been doubled in the past decade. When it comes to apprentices, 26% of the young specialists are female. But I think it is very important that as an industrial company, we become even more attractive to women in order to attract more women to industry and technology. So we have set ourselves the goal to increase the share of women in management positions in the coming years and we're going to grow this rate significantly. Now let me move on to the outlook for the coming business year. So this year, too, we are seeing quite various developments. There are different patterns of development in the individual economic regions and market segments. So what we are seeing is that there's continued positive market environment for rail infrastructure, aerospace and warehouse technology. We're also seeing stable growth in the automotive industry and also a stable development in the Energy segment. Even though in the past business year, the energy industry has boomed, but this has now leveled off. There's a bit less exploration, but we're selling more pipelines and construction, mechanical engineering and the consumer goods, we expect the business to remain at least at the current level. So we are seeing that this is bottoming out and no further deterioration is in sight. So we consist -- we want to consistently implement our group strategy. And you've seen the figures that my colleague, Gerald Mayer, our CFO, presented. We are also in very good financial position and a good technological position. So our outlook for 2024 and 2025 is an EBITDA between EUR 1.7 billion to EUR 1.8 billion. So thank you very much for your attention, and I'm looking forward to your questions.

Thank you very much, Herbert Eibensteiner, for the part of presenting the Strategy 2030+ and the outlook. When you see me with a tablet, you know that the Q&A session is about to start. You have several options of sending us your questions. Thank you very much. We have already received a few questions, and thank you much for sticking around. We're almost on time. So it's 10:48. The front page for journalists is already open, so please register. It takes maybe a minute or 2 for you to be registered. Then there's also the chat tool. If you follow us on the streaming website, we're going to read out your questions and give your name and the company you're working for. And there's also the option of sending us your questions via e-mail. So let's start with the chat tool. There's already a couple of questions there. Let me start with Mr. Nöbaueru. The question is on the plant divestment of the German subsidiary Buderus Edelstahl. Mr. Nöbaueru, maybe you can give us a short idea of what this is about, and whether we'll continue and go ahead with the divestment.

There's a Board resolution taken in March of this year. So in March, we decided to go ahead with the strategic repositioning of Buderus Edelstahl that was turned into a divestment process, and that is in line with our strategy. High Performance Metals is thus focusing its portfolio more on the high-tech segment, and we are consistently continuing along this line.

Okay. Thank you. This takes us to the next question. I forgot the question was by [indiscernible] from the [indiscernible]. Let's move on to [indiscernible]. What is the impact of the carbon border adjustment mechanism on Voestalpine?

As far as CBAM is concerned, the carbon Board adjustment mechanism, this is still in trial operation. And in 2026, we're going to go live. But we have hindered in numbers, so we are still in the start-up in the ramp-up process. This increases , of course, the complexity and the efforts needed. There's still a lot we need to learn, also from the authorities. But anyway, we are well aligned with them, and CBAM is supposed to ensure that any imports coming to Europe will reflect the CO2 costs incurred due to regulations here in Europe. And this is a very important tool for us going forward to ensure that we have a level playing field so that we are all operating under the same conditions. So I think this is a very important tool. There's another question that is still being debated. What about exports and CBAM? So this is being discussed in Brussels because we're an export-oriented company. And as far as exports outside of Europe are concerned, we also need a level playing field there. So this still needs to be discussed. So this is still work in progress. It's an important tool. It also requires a lot of effort needs to be optimized and fine-tuned, so we need to learn to work with it so that we are ready when it goes live in 2026. So it's an important topic, how to handle exports to make sure that we can maintain our position outside of Europe as well.

Thank you. In the chat tool, there's a lot of questions we're receiving. Telephone conference is still available. [Operator Instructions]. Let's continue with [indiscernible] from [indiscernible]. Question is how do you deal with the trade barriers? And where are the trade barriers? Were there any imminent threats? Can you cite an example and how does Voestalpine deal with that?

As you can see how we are dealing with trade barriers, because there are some markets that we can only reach when we pay customs fees. But on the other hand, we are also trying to produce locally in order to circumvent these trade barriers. This is why we try to produce, for example, directly in the U.S. or in China where we are producing locally for our local customers there.

Next question comes from the [indiscernible], a newspaper in Austria. There are several questions. Why a 120% dividend paid out, is that sustainable? The second question is the court decision about the 220-kilovolt power line is still missing. Could there be delays for the electric arc furnace project as a consequence, and do you might levy import duties on Chinese electric vehicles? What do you think about that? And what do you think about the trade conflicts between the U.S. and China in general?

Let me refer to your first question as to the dividend. The subject of the dividend is also a very important decision. On the one hand, the results of one-off effects or non-recurring effects and impairments needs to be considered. And we did that. On the other hand, what we are seeing is that we have a robust cash flow. This is why we finally took the decision to pay a dividend of EUR 0.70 per share. This is at least what we're going to suggest or propose to the Annual General Meeting. The 220-kilovolt line, what's the next question?

Yes. I'd answer that. Well, the 220-kilovolt line is a basic prerequisite for us. It is important for us to ensure that our electric arc furnace in Linz can be operated. This is an APG process, not ours. So there's a negotiation that took place a couple of weeks ago. And we believe that this has been a very positive negotiation in the coming days. We expect that this decision will be confirmed, and we believe that it will be in our interest. And the current construction side for Voestalpine and APG, well they are all underway, and there will be no delays.

What about electric vehicles in China?

I would like to answer that, if I may. Well, the way I see it is that we hope that there's a kind of learning effect. We know this from the past when Japanese OEMs or Korean OEMs started to sell their product to Europe and other geographic regions. So we started raising customs fees. Although we learned from this example of Japan and Korea, if they have a local production here, in the various geographic regions, they will start producing in North America and in Europe. The Chinese are quite fast in doing it. BYD, for example, already said that they are planning to build a factory in Hungary. And that is a big opportunity for us. So if the Chinese OEMs are beginning to build the factories here in Europe, then this is a great potential for us and we're really in touch with these OEMs to ensure that our high-quality and demanding products can be supplied to them.

Thank you. That answers the first round of questions. Now let's move on to Birgit Kremser from the Austrian Press Agency before we have the first telephone question. Ms. Kremser sent us several questions. The first one is, could you explain these non-recurring effects that decreased the profit? Then are you planning to dismiss workers and has the number of jobs in Austria changed? And how has it evolved in Germany as of the 31st of March of 2024?

I will gladly answer the first question about this non-recurring effects. Well, we heard that we're going to sell Buderos Edelstahl. This is a divestment process, it's underway. It was necessary to make an impairment, in view of the price at which will be sold, maybe EUR 180 million, more or less. There are also some company values that need to -- subject to evaluation according to IFRS. And if necessary impairments need to be made to the company value. So this referred to two parts: maybe the Metal Forming Division, the Automotive Components segment and also Mr. Nöbaueru's High Performance Metals, another payment had to be made. So in total, it's EUR 400 million in payment.

Let me answer the question concerning the headcount. The number of people employed in Austria, we have about 24,000 employees here in Austria. And I assume that from today's perspective, this number will remain more or less constant. I think Ms. Kremser you asked me this last time as well. In the Voestalpine group, we also have the possibility of breathing, so to speak. So we have about 1,500 man-years of over time and more than 3,000 man-years of agency workers. So we have the possibility to have some leeway or to breathe. 5,000 employees leave the company every year. So there's the possibility of making adjustments, simply by reducing the overtime work or if we don't fill any vacancies immediately, we can react and adjust the headcount, but I still believe that as far as the Austrian companies are concerned, at the end of the day, all things considered, we are going to have the same amount of employees.

Thank you. That takes us to the phone conference. [indiscernible] from [indiscernible].

Three questions have already been answered, so you can delete those, the 220 kV line. But I have a question for Mr. Eibensteiner, the CEO. In your outlook, why are you so conservative in terms of the EBITDA? Because you were quite upbeat and said that things are looking up.

I think I wasn't cautious in that. I think it was quite realistic. So the outlook is similar as in the past business year. And I think it was a spot on landing. There are some areas that are quite stable, but there are also some segments that are showing a very moderate growth, such as the construction industry, the mechanical engineering industry and the consumer goods industry. So we will see, whether in the course of the year, there will be an improvement or not. Let me remind you of the fact that the expectations of the short-term interest rate cuts of the central banks were expected before the summer. Well, this hasn't happened so far. So there's still some uncertainties out there, and this is also one of the reasons why we have a stable outlook of the EBITDA of EUR 1.7 billion to EUR 1.8 billion.

Well, the way I know the corporation, there's still some room for improvement there if the circumstances are favorable.

Was that a statement or a question? I guess it was a statement, right? Well, you may contradict me if you like. Well, the outlook is what I presented.

Well, the 4th of June in 2025, we'll have the answer, I guess. Let me move on to the next question [indiscernible] from [indiscernible].

I would like to know about the sale of Buderus. When do you think the closing will happen? Will this be in the first half of the year or maybe in the second half of the year? Any ideas?

We are currently engaged in negotiations with interested parties. And of course, we are committed to secrecy and confidentiality, so I cannot answer your question when exactly the process is expected to close. But we are acting in line with the interests of the company and the employees, and we're now trying to come to a rapid conclusion of the agreements.

And a question for Mr. Eibensteiner, you emphasized that we need to move closer to our customers in light of the rising trading barriers. What does this mean for your strategy? Does this mean that existing sites will be expanded in other countries as Ms. Richter said? Or are we keeping our eyes open for any acquisitions going forward in order to maybe eliminate those trade barriers and to be closer to our customers, the local presence?

Well, basically, Voestalpine has internationalized its presence in the past by ever moving closer to our customers. And I think that trade barriers are an additional trigger that induce us to invest in new markets. So we are trying to make sure that we are going to grow in those areas, and that's only logical. So we are not trying to relocate. So we are investing EUR 1.5 billion here in Austria in order to secure our assets here. But there's also a processing area that is very international in scope and this international dimension is going to be expanded in the future.

Before we move on to the next question from our conference call, maybe we can talk about Wetzlar, Mr. Nöbaueru? So we're in the process of a divestment process. We cannot divulge any further details because we have agreed to confidentiality. There's one more question from Germany, from Ms. Freidman, the sale of Buderus Edelstahl is in line with the consistent implementation of the strategy to focus on the highest quality of materials. So maybe Mr. Nöbaueru can answer that question considering our strategy.

Well High Performance Metals is working in the area of high-performance materials. And with the new building of the steel plant in Kapfenberg, we have taken a further step in this direction. Globally, we are a company that is working in the area of stainless steel of special steel. And we're also investing a lot in high-tech, whether it's tool steels, high-grade steels or nickel-based or other alloy-based steels for the aerospace industry or the energy industry. So this is what we are referring to that we want to continue to grow in those segments and move forward with these high-performance materials.

Thank you. Let us switch back to the conference call. We have [indiscernible] from Thomson Reuters.

Yes. I have a question on the dividend. So the question was whether it is sustainable since it's 120% payout ratio? So the dividend is below expectations in light of the very robust cash flow. So my question is the decarbonization strategy and your CapEx play a role here?

Of course, that also played a role. And this is also due to the non-recurring effects and due to the good cash flow that we then decided to make a full dividend payment. But of course, it is also clear that we're also keeping an eye on how the company will develop in the future so the EUR 0.70 per share dividend will be proposed to the Annual General Meeting.

Okay, so let us take a look at what else has already been answered. Dr. [indiscernible], argumented in his items, so Buderus has been at risk, second part of the question refers to the Voestalpine strategy, a question for Mr. Mayer, which EBIT margins are you striving to achieve in the medium term?

We are thinking in terms of return on capital employed. And the guidance is about 12%. And we want to achieve this in the long term, medium term, so this is a figure that I can give you, 12%.

Question from [indiscernible]. What personnel measures are you planning to take in the individual sectors? I think you already referred to personnel-related measures in the individual sectors, right? I think we already said that we are seeing some leeway there. The breathing, so to speak. So that has already been addressed. Then [indiscernible], the North American share of total revenue has gone from 17% to 14%. Is this due to the deconsolidation of the Texas assets?

Well, that was the most significant part here.

So, the answer is yes. And let's take a look at the conference call. [Operator Instructions]. Ms. [indiscernible] has a subsequent question.

I have a completely different question. I would like to know about the strategy 2030+ and the years until then. Do you have any CapEx figures? How much you are planning to spend per year or in total?

If I had to present the midterm plan to you, I think this would go beyond the scope of this press conference, but let me give you an example anyway. I think EUR 900 million -- I think there were EUR 800 million worth of depreciations, and we are now investing EUR 1.5 billion until 2027. So this means that in the coming years, we are going to have more than EUR 1 billion CapEx every year. On the one hand, this is the Greentec Steel project implementation. And on the other hand, there's also repair and maintenance to a certain extent, but also the further development of our downstream assets. So that means that we'll have more write-downs, more depreciation. But anyway, this is taken into account in our planning. Thank you.

Thank you for the question. There's another question in the chat tool. Question for Mr. Eibensteiner. You said that we need to move closer to our customers. One example you gave us, the U.S. What is the impact of the Inflation Reduction Act, the IRA?

Basically, the Inflation Reduction Act is very smart, very intelligently done. So the U.S. assume that if investments are made, that the business case will pay off. So the -- of tax reduction, so that's a very positive outlook. This means there will be less cash out in the future. So in Europe, you get subsidies for projects that are not really economically viable. So I like the inflation reduction act approach much better. But anyway, I think the purpose of the question is to find out how we think in terms of our investments in the U.S. So basically, it's always about where we see our market, where our customers at. And this constitutes the basis of our decisions because we want to produce local for local.

Thank you. Let me check whether there's any other questions. Let's go back to the conference call. And if there's any questions in the chat tool, we have almost worked off all the questions. So if there's any last minute questions, post them now and in the conference call, we have [indiscernible].

Two short questions. In Germany, ThyssenKrupp is reducing capacities. Is Voestalpine also going to do this in the medium term? My second question concerns trade barriers or safeguards of the European Union, which raised these barriers, restricting imports further last week. So does this mean that in the medium term or maybe in the short term, the European steel prices might stabilize and go up? And how quickly could this happen and for which products would this apply?

Of course, I am following what Thyssen planning to do. We're all familiar with the market, so I assume that these decisions depend on the market. I'm not going to further comment the approach used by Thyssen. As far as the safeguards are concerned, well, they have been around for many years. And the European steel market is used to having -- to importing 30 million tonnes of steel in the framework of the safeguard measures. So I believe it is important to say that the safeguard measures are actually extended.

Then there's a question for Gerald Mayer by Ms. [indiscernible], she would like to have an EBIT margin forecast.

Well, it's 9% for the cycle. So 9% for the strategy 2030+.

Okay. 9% EBIT margin. Okay. So I think it takes us to the end. Any questions received via e-mail? No, there are none. So let me give you some moments for any further questions. On the 3rd of July, there will be the biggest Annual General Meeting in the design center. Media representatives are welcome to register. So if you want to participate, you need to register. And on the 7th of August, there will be the Q1 figures for the current business year 2024-2025. Now one last look at whether there's any last minute questions. If not, that winds up our earnings call for the full year results of 2023-2024. Seeing none, that winds up our press conference for this year. I'd like to thank you very much for your participation and your questions. I'd also like to thank my team in the background. I'd like to thank the Board members for the presentation and for answering the questions. And we'll see you on the 7th of August with the figures for the first quarter. Meanwhile, have a wonderful summer. Weather is also looking up now. Thank you very much, and all the best. [Statements in English on this transcript were spoken by an interpreter present on the live call.]