Operator: Ladies and gentlemen, welcome to the Voestalpine Publication Third Quarter Business Year 2025-2026 Conference Call. I am Mathilde, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Peter Fleischer, Head of IR. Please go ahead.

Peter Fleischer: Good afternoon, ladies and gentlemen, and a warm welcome to our first quarter to third quarter results of the business year '25, '26, the first 9 months of the actual business year. With me is Herbert Eibensteiner, our CEO; and Gerald Mayer, our CFO, who will give you a brief overview of what has happened in the first 9 months, and we will be happy to answer your question afterwards. Herbert, please feel free to go ahead.

Herbert Eibensteiner: Thank you, Peter. Good afternoon, ladies and gentlemen, also from my side. I would jump right into the presentation. And for those who are not so familiar with Voestalpine, I would like to give a brief introduction. Voestalpine is a global special metals and steel company and an industrial group, and we combine this steel and metal production with processing and engineering competence. And from this expertise, we develop this special high-quality solutions that offer our customers the competitive advantages. And we are a leading partner for high-tech industries with high entry barriers such as aerospace, automotive, or railway systems, and we are stock listed since 1995 and committed to value creation for our shareholders. So what was happened in this first 9 months when it comes to the global economic environment. Let me start with Europe, which is the biggest market for Voestalpine. In one word, relatively weak. So we had from the beginning of the business year, relatively subdued economic development. And only in the last weeks or days, we see a slight upturn in industrial production in Europe. And when we come to North America, you know all the action around tariffs. We have still a robust economic growth, but we know that this is mostly driven by this high investment in the tech sector in Industry growth is by far weaker. And when we go to -- or look to Asia, in particular, China, we see a relatively stable economic development, and this is supported mostly by exports into the rest of the world also because even more because of tariffs and South America, which is Brazil, the biggest market for us, we see a reduction in economic sentiment, why we have this increase in interest rates and we see strong competition from Chinese imports knowing that Brazil is not protecting its borders and trade flows. Let me come to the highlights of the first 3 quarters. We have very solid results in the first 9 months in a relatively challenging environment. I have mentioned that. And I'm -- I think it's very positive that we have a very, very strong financial position. Gerald will present it in his part of the presentation. And for me, it's very important that we can show again strong cash flow development also in the last quarter. And our markets, railway infrastructure, aerospace and warehouse and rack solutions unchanged, positive, good development, and I would say, the best to describe the rest of the markets is that it's a stable demand at low level in mechanical engineering construction industries. And we have a mixed development in automotive industry on the one hand, steel flat still, which is very positive, mainly driven through gaining more market share and the automotive components business is a bit weaker. And so coming from all these restructuring measures we have implemented, we see also a decreased number of employees compared to previous year. So what is still our strategic focus is these 3 pillars. The first is more short term. We have this reorganization measures in place. We do also portfolio optimization, portfolio management. You know we have sold in high-performance metals. And I think in the last days, you have heard that we have also divested BOHLER Profil in January, which is signed but not closed so far. And I think the biggest part of reorganization is automotive components with all its sites worldwide, but also in high-performance metals, again, streamlining the warehouse structure, streamlining the sales structure and also in all those activities, focus is efficiency, efficiency, efficiency. And we are quite good on the way and all the programs in time. So we do not forget our growth activities, which are strategically is railway systems, tubes and section, warehouse solutions and aerospace. And we are focusing also in new regions for us in attractive regions. And this is India. I will come afterwards in the presentation with a bit more information. And the third pillar is this decarbonization projects we are running in -- on 2 sites in Austria, so where we want to replace 2 out of 5 blast furnaces by electric arc furnaces, EUR 1.5 billion. And I think all these projects are in time and on budget. And so we -- in a year from today's on, we will start the ramp-up, for instance, in both activities for this greentec projects. Let me come to the 3 highlights. I think I want to give you some positive impressions what we are doing or what we have done. You know that Railway Systems is a very international business where we do business all over the world, but also in the small Austrian railway market. So we have recently closed the project in Austria, Koralmbahn, which is a 35-kilometer long tunnel, one of the longest worldwide, and we provided for this project, 290 kilometers rail and 235 turnouts and all the digital monitoring system, I think that's a quite positive project for Voestalpine. And we have numerous other international railway projects all over the world, very important for us. Warehouse and Rack Solutions, a bit smaller as a business, but also with very positive projects. Currently, we are working on a hybrid warehouse in Turkey, the biggest we have ever built, 230 meters long, 80 wide and 40 meters high with thousands of pallet places and a similar project in Czech Republic for a tire producer. This is with 50 meters, even the highest we have ever built. So you see even in a very traditional business, there is every year new demand in bigger and more complex projects all over the world. And I have mentioned India before. So for us, at the moment, a relatively small market. We have only EUR 190 million revenue. There are 5 location production sites with 1,000 FTEs. And we have already a turnout activity there, but we want to expand this engineering and design capabilities in India with a couple of people in India, which are training the local guys to improve our footprint there. First production site is planned in special tubes, special sections. Most of you know that we have a standard procedure for that 20,000 square feet building, then adding 3, 4 machines after 5 years, we fill up this facility. And then we think of the next steps, we will start that next year, I think. And we are growing in aerospace supplies in India, so where we have seen more and more activities for delivery to the OEMs, and we have achieved the first important approval so we can deliver to the producers of aerospace airplane parts. And also, we have a welding consumables facility there. We want to expand that. The market is growing. So 2 topics, railway very important for us, warehouse very important for us. And geographically, India is small, but will develop steadily in the years to come. So let me come to a quick view on the divisions. Steel division, very, very strong performance in a relatively weak economic environment. And we faced a very good demand from the automotive industry. I've mentioned before that I think that we gained market share when it comes to higher quality steel sheets and also in the energy sector, which is mostly heavy plates. And in all the other markets, mechanical engineering, building and so on, I have mentioned it before with a relatively stable and on a lower level demand. Market segments -- or sentiment in the steel sector improved after the announcement of the EU safeguard measures and CBAM. I think we will discuss that for sure when we come to your questions with a positive outlook for the remainder of the year and into -- especially into next year to come. And when you look at the EBITDA figure with more than 13%, I think considering the time we are in a very good result. High Performance Metals, a bit different with a very weak economy and uncertain market condition with a high import pressures -- import pressure, especially when it comes to tooling and industrial parts. Oil and gas was impacted by this low rig count -- with low exploration. Aerospace, on the other hand, very strong development in Europe. And in the course of the year, we see a very good improvement from the demand of Boeing. And we have got additional volumes, additional contracts in this segment. And High Performance Metals is a very important part of our reorganization plans. And we see this first positive results out of that when you consider decreasing volumes and the results remain steady. So we -- for me that the reorganization and restructuring is working. And we -- as I mentioned before, we built a new sales organization and most of that is already implemented, and we will see the positive results into next year. And even in this difficult situation, we have this 7.6% EBITDA margin. Metal Engineering, Railway Systems, the biggest part of Metal Engineering is Railway Systems with a good performance. We have typical seasonal effects in the winter months this year, maybe a bit more. And Industrial Systems show different performance when it comes to welding, relatively stable on satisfying levels. On the other hand, we have tubulars, which is heavily impacted by the U.S. tariffs. This is OCTG business and half of the business is U.S. business. So we have again reduced our volumes there. And wire is operating in a very weak market environment. But in the course of the year, we have at least increased the volumes on the price side. We are working actively and the efficiency. In all these activities, we have implemented efficiency programs and everything is well in place and on schedule and we look at the figure. The division has 8.7% EBITDA. And we have promised you that we'll give you a deeper insight of the Railway Systems unit, which is the biggest part of the Metal Engineering division. It's a very important driver also for our long-term growth ambition. And in this business, we are a full service provider globally of railway infrastructure solutions. The biggest part is turnout systems with more than 60% of sales. And we have very good development in all markets globally. It's not only replacement and maintenance. It's also new projects, new activities and rail technology. Rail is a bit below 30% of sales with ongoing solid performance. Main market is Europe. Fixation, new business for us, but again, a very positive development, especially in Central and Eastern Europe. This is a part of the business we want to grow in the future as well. And signaling has grown quite significantly in the last years. Again, already 6% of our sales, a very good development, and we are delivering at a very good level. And you see -- when you see this 10.3% in EBITDA margin, you are aware that this is the most important part of this Metal Engineering division. Metal Forming, as I mentioned before, automotive components compared to that what we see in the Steel division is weaker. So we are mostly focusing on European carmaker. So in Europe, we see this 12 million cars and not more. And even the U.S. tariffs had an impact in our North American market, our business in automotive components. And as I mentioned before, we are in a deep reorganization part. And it's clear that we have -- there is a way to go, but we are sticking to our plan. And so far on time. And also, we see here the first positive results. Also, we have an outflow of money or cost for restructuring in this area. So Tubes and Sections, overall solid performance. We had a slowdown in the second half of the year after the summer because of some delayed projects. We will see that in the fourth quarter, more or less good results with a bit lower volume. Precision Strip has improved in the course of the year also profitability-wise and Warehouse and Rack Solutions have touched it very strong demand, long order book also for the next year and even in 2027. EBITDA margin here because of the weakness of automotive component with 6.3%. So this was a very brief overview of the divisional development, and I would ask Gerald to guide us through the figures.

Gerald Mayer: Thank you, Herbert. So after this, as Herbert said, brief overview, I would say it was even comprehensive. I would like to share with you how this is reflected in our financials. So we have in front of us our table here with our key KPIs. You see there that revenues are down roughly EUR 600 million, EUR 450 million out of this EUR 600 million are referring to lower prices, and other EUR 50 million are referring to a weaker U.S. dollar, in particular, we had higher volumes. So this came with plus EUR 120 million. And then you remember that we sold last year, Buderus Edelstahl, and they had an impact last year of EUR 220 million. So this is a reduction, which we have, of course, then in the first 9 months of '25-'26. Talking about our profitability, you see that all the lines are in green lights on. So we are up in all of these line items. So EBITDA is at EUR 1 billion, a little bit above EUR 1 billion compared to EUR 970 million last year. EBIT is up EUR 470 million compared to EUR 390 million last year. So in particular, strong, as also Herbert explained, was our Steel division operationally. We are up in HPM division and in Metal Forming division also, of course, partly driven by negative one-offs last year. We talked about restructuring efforts in our automotive components business unit. I talked about the sale of -- or the divestment of Buderus Edelstahl last year. This had a positive impact this year. Metal Engineering was a little bit weaker compared to last year. I will talk about that in some moments. What is interesting here on this table is profit before tax. It's significantly up. There is one main reason between EBIT and between profit before tax, it's our financial income. We reduced our net debt by roughly EUR 300 million, if I compare an average the first 9 months last year to the first 9 months this year. And also interest rates are down, as you know, and this had this impact of, yes, a significant impact this year. And so therefore, EUR 120 million up. On the other side, talking about profit after tax, you will realize immediately that we had quite a higher, let's say, perhaps an unexpected high tax rate. And last year, it was very positive, a very low one. Talking about last year, the main impact was that we recognized taxes for prior years last year, about EUR 20 million. And this year, it's the other way around. We had tax losses, as I talked about that also in our half year presentation in Brazil and Germany, in particular, where we did not recognize tax losses. And therefore, the tax rate is above 30% for the first 9 months. Talking about the first bridge, EUR 968 million to EUR 1 billion roughly. So you see here the significant impact of lower prices in the first half and positively compensated at least partly by lower raw materials. So the gross margin is down EUR 137 million, roughly 60% attributable there to our Steel division and 75% to our Metal Engineering division. And out of the EUR 75 million in our Metal Engineering, I can share with you that a stake of EUR 50 million refers to simply higher tariffs to the U.S. tariff situation in our tubulars business in Metal Engineering. Yes, higher volume and mix effect, which is positive there with EUR 73 million. So in particular, in our Steel division, we have had a super capacity utilization rate in the first 9 months. So we came with 300,000 tonnes higher volumes. So this is more than EUR 100 million. The mix effect is a little bit negative there in Steel division. And in HPM division, we lost some volumes compared to last year. So this had a negative impact there. But in total, for the group, as I said, EUR 73 million plus. In Miscellaneous, also, as I mentioned here, the part of miscellaneous plus EUR 134 million. We had, of course, the impact of Buderus. We had the impact last year of our restructuring or reorganization efforts we had in automotive components. On the other side, inflationary effects were compensated by our cost, let's say, efforts we had all over our group, and this is in brief bridge #1. And bridge # 2, I share with you the deviations of the respective Voestalpine divisions. You see there that we had this positive development in steel. As I mentioned before, higher volumes, lower prices, negative mix effect, but positive also optimized cost effects ended up in EUR 50 million plus. And as you know, also last year was still -- was a very positive one. And here, we are doing even better. So we are very proud of the performance here of our Steel division. HPM, as also Herbert said, reorganization is on track. We have positive effects there, which compensated for the lower volumes. We still have been facing headwinds in HPM's there. It's turning a little bit at the moment, and we think we bottomed out the last months were a little bit better in terms of order intake and also in terms of turnover. So we see some slight improvements there at the moment. But market-wise, in the first 9 months, it was weaker compared to prior year. We also -- we talked about reorganization of several logistics sites there, we reduced manning. So this will have also a positive impact in future and had a positive and first positive impact in our first 9 months here. Metal Engineering, I mentioned, this is the only division where we lost a little bit ground, at least when we talk about the results compared to prior year. So we are down EUR 79 million. In particular, I would say -- and it's obvious. So the main part there is the tariff situation in the U.S. We published that we reduced manning in our tubulars business unit in Austria. And this is simply the only reason there is lower tariffs and a little bit, of course, also the rig counts Herbert mentioned before. In the business unit while also we are facing headwinds from the markets, very solid is our welding business unit in Metal Engineering. And we also were talking about Railway Systems before, which is strong, stays strong, very solid. And of course, we also have some cyclicality or seasonality in there, but very solid, and we have, for sure, a prosperous future in front of us in Railway Systems. Metal Forming division, last but not least, plus EUR 21 million. If you look here at the business -- at our business units, we are a little bit weaker in Tubes and Sections, which is the biggest business units there compared to prior years. I would say, in total, it is solid, but also some headwinds in the first 9 months, but we expect also a good future there. Automotive components was touched by Herbert. We closed Birkenfeld. We have now 200 people less just because of that. And very positive is Precision Strip and Warehouse and Racks as Herbert shared with you some moments ago. Very positive cash flow situation. What you see here is the summary. Actually, cash flow from results is EUR 873 million. I would like to add here the EUR 228 million from change in working capital. So if you add this up, we are above our EBITDA level. It's clear so that we had very positive impacts there from working capital initiatives. And yes, I think, yes, we did a good job there. We had some negative effects also in there because we had volumes picking up, for example, in Steel division on the other side, positively. We optimized and we continue to optimize in HPM, also in Metal Engineering, and there is more to come also in Metal forming. Investing activities, you see here that we are exactly at the level of our prior year. You know our guidance of EUR 1.1 billion for the full year. So you immediately can see that we are not at the run rate for, let's say, what you would expect perhaps for the first 9 months. Our guidance stays at EUR 1.1 billion at the moment as our big investment projects are up and running and are on time and on budget actually. Of course, it is milestone driven and you never know exactly do you have a cash out then end of March or is it beginning of April or whenever it is. So it is -- but we stick to this EUR 1.1 billion in terms of guidance. What you also have to take into account, if I talk a little bit about guidance, and I would like to do that now here that in the fourth quarter, we always have our cash outs for our CO2 certificates, ETS cash outs, which we pay normally in Jan. This is extra EUR 180 million roughly, which you do not see in the first 9 months and the additional cash out for CapEx, as I mentioned before. So this leads to the guidance of EUR 1.1 billion or another EUR 350 million to go until end of our business year, but it should stay a positive free cash flow, and we also expect a slight positive free cash flow in our fourth quarter. Talking about our solid balance sheet, about our financial structure there. What you see here, and I share with you that we reduced since the beginning of the year, net debt by another EUR 200 million roughly. Our equity position is right now 50% or EUR 7.6 billion and gearing is down to 1.0 net debt to EBITDA or 19%. So very solid. I think -- we think given the big projects which we have in front of us, given the idea also Herbert shared with you talking about strategic things that we have some growth segments in front of us, a lot of uncertainty. We are convinced that the strong balance is a good, let's say, a good and necessary foundation at times like this. So this was my summary, and Herbert will now continue with the outlook.

Herbert Eibensteiner: So I think the outlook is not really a surprise for you. So we think that the global economy has more or less adapted to the -- after the imposing of these tariffs in the U.S. and we think that more or less the trends will continue what we have seen before. Automotive industry remains on current levels. As I mentioned before, this 12 million cars a year, construction, mechanical engineering, consumer goods, more or less stable at current levels. Demand from the conventional energy sector for pipelines will remain strong in this fiscal year. And -- but we see no pickup in exploration activities, which would positively -- would be positive for OCTG. So stable situation, but we see still this positive momentum in railway infrastructure with a good order book in aerospace and also warehouse and rack solutions, we can say that we are booked quite well. And all this implementation of reorganization works quite well. So we can confirm the guidance of EBITDA between EUR 1.4 billion and EUR 1.55 billion. So that was our outlook, and we are happy to answer your questions now.

Operator: [Operator Instructions] The first question comes from the line of Alain Gabriel from Morgan Stanley.

Alain Gabriel: I have 2 questions from my side. The first one is starting with the guidance since you -- since that was the closing remarks, your steel business is highly levered to the improving spreads in Europe. The guidance for Q4 may not have fully captured the extent of the price action that we have been seeing recently in Europe. Can you help us better understand the drivers between volumes, pricing and costs as we look at your steel business beyond Q4, i.e., into Q1 fiscal '27 and beyond? That would be my first question.

Herbert Eibensteiner: Yes, to a certain extent that the most recent pickups are in our pricing because we have it in our yearly contracts in and also here and there in quarterly business. But when you ask beyond Q4, we have all this picture in mind where we have CBAM now in -- since January, we have these safeguards in front of us. We think that safeguards will be implemented in -- with 1st of July. And all the infrastructure programs, we -- in Germany, maybe the first defense spending is in front of us. And surprisingly, the commission is talking about -- or discussing about how we proceed with the free allowances, CO2 allowances. So I think that's quite a positive momentum into next year. But we have to say there are 2 scenarios; a scenario with a quick pickup of prices and there is a scenario with a steady development of steel prices. I would say we think of the steady development in the course of the year, considering that safeguards will be into effect in July and also the infrastructure measures, we think and I have presented this also in last quarter, we think that the first bigger projects will come during the summer or after the summer. So I think -- and we have with this -- with our -- how should I say, our contract structure, we have a certain time lag. So we are now locked in with our quarterly -- with our yearly business where we have achieved a certain improvement, but we are then locked in. We have half year -- this is 40% of our business, 40% of our business is quarterly business. So we are closer to the market and the rest is then half year business. So we will see a certain time lag. So we will see improve -- we will see improved prices in the course of the year with this before mentioned time lag of Voestalpine. And I think it will improve, but this is how we see our guidance in the course of the year. And we know that we have into next year this project business in heavy plate, which is -- and we have some delays in projects. We know that into 2027, there are big projects again. So I think we will come through this year 2026 with slightly improving prices for Voestalpine, maybe a bit behind the market because of the things I mentioned, but we will then fully benefit in 2027 from all these positive effects.

Alain Gabriel: That's clear. And the second question is on HPM, which has been a drag on the business for the last few quarters. You are clearly doing a lot of efforts and progress in restructuring the business, but ultimately, we may need to see an improvement in, let's say, automotive tooling, industrial CapEx and other end markets. Are you seeing any early signs of restocking or improved order intake? I appreciate the outlook for the business may not be -- may not look great now, but at least any signs of green shoots that you are seeing? Or do you do expect a more prolonged demand trough? And then an extension to the question, what utilization rates are you currently running at for that business?

Herbert Eibensteiner: The utilization rate is relatively low, I would say, at 80%. And so there is room to improve. That's the reason why we make this efficiency measures. I would say, there was a sentence in our presentation, slight improvement, but that we see a quicker recovery. I think it's not the case. We see good products in China. We see this better projects in aerospace, but we see this improvement in results are mostly coming from the restructuring part.

Gerald Mayer: I would like to add one sentence there. I think we also -- we're also really working hard in reducing working capital. And by doing that, of course, we produce also less. So we expect also a positive impact there next year. And in the last months, in particular, step by step, we saw some small signs. And you were asking about small signs of improvement in tooling. Yes, we do see that. So in my opinion, we bottomed out there, and it should go up, at least this is our take as of today, means restructuring is going as planned. And I would say we will also see a higher level of production. And so we clearly expect an improvement there for next year. And you were asking the last times, what is this midterm, long-term outlook there. We stick to that. So in 3 years, we will have this EUR 400 million level of EBITDA.

Operator: The next question comes from the line of Tristan Gresser from BNP Paribas.

Tristan Gresser: First, on the EBITDA guidance, I was wondering why you did not refine a bit more the full year guidance now that we have only 1 quarter left. Put another way, what would drive the EBITDA to the low end of the guidance? And what do you think would drive it to the high end? And at this stage, with the visibility you have, do you think the top end of the guidance is more than likely?

Gerald Mayer: Tristan, I think a fair question. And we were really thinking about it. You saw that we signed to sell one of our companies in HPM division. And our guidance simply covers both scenarios. Do we close or not close this deal? And if we close this deal, we are more at the upper side. If we don't close it, we are more at the lower side of our guidance. So this is actually the take there. And you could split it. Is it EUR 1.4 billion to EUR 1.475 or is it EUR 1.475 billion to EUR 1.55 billion. So it is -- and we simply don't know if closing will happen or not.

Tristan Gresser: All right. No, that's very clear. And then on the auto contract negotiations, I think you mentioned it, I just wanted to see if you could add a bit more color. So they have concluded -- the vast majority of it has concluded already. You're still not negotiating. Were you able to recoup the kind of loss -- the year-on-year loss you had last year? Or is it going to be more -- the increase you managed to lock in? Is it more type of a mid-double-digit increase for this calendar year as well. And then also, if you can share some outlook for auto demand and volumes, not necessarily for fiscal Q4, but for the calendar year 2026.

Herbert Eibensteiner: Yes. I think we will be fully -- and I think we talk about Steel division. I think we will be fully booked in our automotive business. We have these contracts. We have achieved -- we do not everything in January. So we have also in April and June and even in the fourth quarter negotiation -- in the third quarter negotiations. But when you put everything together, the bigger part is negotiated in January. And yes, we achieved a plus in our auto -- yearly auto contracts. And I think volume-wise, we got a bit better mix. That's always the third part. We are talking about volumes, mix and prices. And yes, we achieved a better mix. And I think we are fully booked in auto. So I think that's the overall picture. When you would consider negotiations in October, we would have a reduction and with the improvement and the announcements of safeguards and whatever, we could achieve a plus in our auto contracts.

Tristan Gresser: All right. That's very clear. And maybe a last question, if I can squeeze that in. The heavy plate business that's been really successful in fiscal 2026 on the energy side. You mentioned some delays. So should we expect the performance in fiscal 2027 to be not as good as what you've seen in 2026?

Herbert Eibensteiner: Yes. We are fully booked till the end of the year, more or less. And in the second half of this -- of 2027, we see some delays or postponing of projects into 2027. So this will be the difference between 2027 and 2026.

Tristan Gresser: Okay. So it's more of an issue of maybe volumes rather than the margins themselves?

Herbert Eibensteiner: No, it's no margin squeeze. So this is a project business and we -- either you get the project or it's postponed or not available. In this case, it's postponed into 2027. And we think it's not lost so far. This is the reason why we are for 2027 quite -- 2027-'28 quite optimistic.

Operator: We now have a question from the line of Dominic O'Kane from JPMorgan.

Dominic O'Kane: I have one question. So if I just think about the interplay between your EBITDA, your cash flow and your balance sheet. So as we enter calendar 2026, I think there's a runway over the next couple of years where it's reasonable we can start thinking about maybe a EUR 2 billion a year continuing EBITDA profile. And obviously, with the Capital Markets Day in October, you unveiled a new dividend policy and gave more details around your thoughts on the balance sheet. So -- my question is, given what you've reported this morning, we're now seeing a situation where you have 1x net debt EBITDA. Should we start to think about potential deleveraging of the balance sheet from this point forward? And therefore, how should we think about your use of the balance sheet as we look into 2026 and '27?

Gerald Mayer: Yes, let me take this question. I think what we said in our Capital Markets Day, nothing really changed. So we are on track to all we said. So we really try our best to deliver there, and I think we are well on track there. And talking about the next years, we'll see what really will come. So I think Herbert explained a little bit our view and our take there. And I think we have to wait and see a little bit how things actually are really developing. In terms of debt level in our balance sheet, I think, in particular, in times like that, where uncertainty is high, it's better to have a little bit more deleverage perhaps balance sheet, but we are more or less there where we should be. So -- and there is also some room for growth in there. This is also clear. And I think we also talked about the 3 areas where we want to grow, and we simply want to be also ready for that. So I think everything unchanged. Our policy in terms of capital allocation is as presented, including dividends, as presented during our Capital Markets Day. So no real change. We simply deliver what we promised. So this is our take there.

Dominic O'Kane: If I could just maybe just ask one additional question. So do you have -- you've provided us with kind of free cash flow projections for FY '26. Is it too early to say whether we could think about a similar number for 2027?

Gerald Mayer: What I can share here at the moment, we are right now preparing our business plan for the next year and our budget. But our take there is we -- next year, one thing is clear. We will have, I would say, in terms of CapEx or cash flow from investing, we will have a similar level of -- like we have this year, EUR 100 million, EUR 150 million is still our guidance for next year in terms of cash flow from investing activities. In addition to that, we know that we have to rely in the blast furnace, for example, and Donawitz in our plant. So there are some extraordinary things which lead to some cash out. But our clear plan is to deliver again a positive free cash flow. Will it be at the same level as this year? I would say it is a little bit more limited to optimize working capital in addition to what we did the last 18 months. I think we achieved a lot there. And we will not see the same magnitude again. This is not realistic in my opinion, but it should stay a positive free cash flow, in particular, driven by the 2 divisions, which did not contribute that much in the last year means this is in particular now Metal Forming and HPM division. And for the reasons I just mentioned for Metal Engineering, I expect here a little bit less contribution and also from Steel division here also we are peaking in terms of cash outs for our investing activities.

Operator: The next question comes from the line of Bastian Synagowitz from Deutsche Bank.

Bastian Synagowitz: Maybe I'll bring one question forward given that we are already on the topic of capital allocation. Maybe just following up on CapEx specifically. I guess, at the Capital Markets Day, you gave this guidance for EUR 1.15 billion CapEx, and you said that, that also is a good assumption for the midterm. But of course, there's the EUR 400 million decarb CapEx, which will start to fade over time. My understanding is that you may have sharpened your midterm plans on CapEx a little. So could you just please update us on what your CapEx thinking is once the decarb burden eases? And then briefly also on buybacks, I guess, given your balance sheet, given that you do expect another positive cash contribution next year as well, and I guess the outlook generally looks quite positive. Would you still consider buybacks as well if the time is right and balance sheet and cash flow do allow it?

Gerald Mayer: So we did not make our mind about buybacks and so on. It still stays, as I said, I simply would like to confirm what we said at our Capital Markets Day and let us start to present and to deliver something for the next year. In terms of midterm outlook, in terms of capital expenditure, very similar to what we said before EUR 100 million, EUR 150 million for next year is what we assume, EUR 1.1 billion for this year, as I think we also shared with you last time. And then I would expect it goes more to EUR 1 billion or a little bit below EUR 1 billion for the future. And this is then roughly at the level of our future depreciation when we start to depreciate also the new projects. So this is roughly how we see it at the moment. And of course, we need some room for perhaps some maneuvers in the future.

Bastian Synagowitz: Understood. Okay. No, absolutely understood. I think you should probably provision for a bit of flexibility. And then maybe just lastly on, I guess, the demand also in the rail business, which obviously is a business where people turned quite positive a year ago. Could you just go a bit more into detail what you're seeing there? I guess the last calendar quarter is always a bit weaker, but do you now start to see more activity coming through in the German market as well?

Herbert Eibensteiner: We got this frame -- again, a frame contract in Germany. And so it was a bit weaker in autumn, I would say, October, November, the management change and all those things, I guess, that was the result. And what we see now is that steadily, I would say, steadily new demand is coming into this frame contract. So I assume that the Deutsche Bahn is well aware that repair measures will also be very important in the future. So I think it will be a normal business year in Germany. And everybody who thinks that Deutsche Bahn has stopped repairing the railway infrastructure is for sure wrong. So we will get this project on stream, not immediately, with a certain time lag. And as I said, this infrastructure projects will then come more in the course of the year.

Operator: [Operator Instructions] We now have a question from the line of Tommaso Castello from Jefferies.

Tommaso Castello: I got one left. Maybe if you could spend a few words on your capacity utilization rate at your steel operations. And I'm referring especially to the capacity of displacing potential lack of volumes coming from imports should as the estimates say, the import level would be reduced by around 10 million tonnes given the new trade measures and CBAM into the future. Is that something that you are confident in?

Herbert Eibensteiner: I think this is a good figure. So we know that the cutoff of this quota regulations is around 12 million tonnes, which is 10% of the actual production in Europe roughly. I would say that would lead to this higher capacity rate in Europe and maybe we will see some -- or the expectation is that the prices are rising. I think that's a very strong trade measure safeguard and it's not finally decided, but we will see it in July. And in combination with CBAM and all the other topics I mentioned infrastructure, maybe the first defense spends, this will improve the economy in Europe. So all in all, in the next 2 years, I would say, very positive, especially 2027. And that -- and our utilization was relatively high. There is always room to -- for different capacity, but this will be around, I would say, 300,000 tonnes, which is always possible to produce more. And I think we will fill up our capacity in our steel mill relatively quickly.

Tommaso Castello: Okay. Sorry. So just to confirm, so you can add 300 kilotonnes to 400 kilotonnes per annum should the market demand that volumes?

Herbert Eibensteiner: Yes.

Operator: [Operator Instructions] We have a follow-up question from the line of Tristan Gresser from BNP Paribas.

Tristan Gresser: It's just on -- there's been a lot of news flows and news around the potential reform of the ETS system and potentially the extension of the free allocations for industrial players in Europe. I was wondering if you could share your position. It does seem that a year, 1.5 years ago, that was not even part of the debate and now it seems that there is strong momentum building around it. So how likely do you think this will be some sort of relief in terms of free allocation? What do you think could be the options that the commission is looking at? And eventually, if it comes to that and you receive more free allocation or for longer, will that change how you approach decarbonization spending? And can you spread out maybe your decarb project on a longer time period?

Herbert Eibensteiner: I think it's -- as I mentioned before, it was really a surprise that we started -- or the commission started this discussion. All over Europe, all the CO2 emitting companies, chemical industry, steel industry, we are fiercely asking the environmental ministers to ask the commission to prepare something how we can design this free allocation ETS system to a more pragmatic approach. And so this was the start of this discussion. I think this -- for us, it's positive. We are under allocated. And I think -- and I was always of the opinion that in the time we are investing in CO2 reduction, we cannot, in addition, pay for CO2 allowances. And I think that's true and it's considered from the commission, we will see how the options are. Is it then a 100% dedication to CO2 reduction or a certain percentage. I think this is -- everything is in discussion. But at the end, when it would be -- come into action, it would be a relief for our future capital expenditure or cash management.

Operator: Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Peter Fleischer for any closing remarks.

Peter Fleischer: Thank you very much for your time -- for spending the time with us and for this very interesting discussions. However, if there come up any questions or if you need any additional information, please feel free to drop either Gerald or myself a line, we will be happy to answer. Thank you very much, and have a good day.

Operator: Ladies and gentleman, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.