Meine Damen und Herren, herzlich willkommen zu unserer Bilanzpressekonferenz 2023, mit Vorstellung der Bilanz für das Geschäftsjahr 2022/23 und unserem Ausblick für das laufende Jahr. Wir freuen uns, dass Sie unserer Einladung gefolgt sind und hier im Saal oder virtuell teilnehmen. Mein Name ist Stefan Heimbach. Ich verantworte interimistisch die Konzernkommunikation von ThyssenKrupp. Kurz ein paar Hinweise: zunächst der obligatorische Sicherheitshinweis an alle hier im Saal. Im Falle eines Alarms verlassen Sie bitte zügig, aber ohne Hast, den Saal über die Notausgänge. Die befinden sich hier vorne zu Ihrer Rechten und hinten neben den Ausgängen zum Foyer. Warum nicht ins Foyer?
Please do not go into the lobby area, because the elevator may not work at that point of time. You leave the building, and we meet outside at Q4 on the water axis. This morning, you received the documents, as well as the link to our statements. All documents can also be found in the Internet. The event is being translated simultaneously into English, and Miguel Lopez and Mr. Kaisberg and Oliver Burkert will then give you an outlook onto the current financial year and provide their report. Afterwards, they will be available for your questions, and I will now pass on to Mr. Lopez. Good morning, ladies and gentlemen. Thank you very much, Mr. Heimbach.
I, too, would like to extend a warm welcome to you all, also on behalf of my executive board colleagues. Thank you very much for your interest in our annual press conference, which for me, is the first one as a CEO of ThyssenKrupp. I've now held this role for about six months. This has been a very intensive period. Of course, there have been many new things, a lot to do, and I've been traveling a great deal in the Rhine and Ruhr area, other parts in Germany and Europe, and also a few times in Asia, the States, and the Middle East. In short, everywhere that we call home. That, in fact, is everywhere in the world. With our technologies, our value added and our value creation, and especially our customers, our business partners, and our employees.
Everyone that I've spoken to, employees, customers, investors, suppliers, and politicians, have had a clear expectation of us. They want us to contribute to their future as a good and attractive employer, as a competent partner, and in the future, again, as a worthwhile investment. I've taken two takeaways from my conversations so far. First, ThyssenKrupp is a top-class global brand with extremely high recognition, value, and reach. We are associated with leading technologies and quality. This is a strong foundation on which we can continue to build. For example, did you know that our Polysius business equipped 35% of all cement factories worldwide? This is an enormous installed base, accounting for more than one-third of the global market.
The second takeaway, and one which we need to state just as clearly, is that our business's performance is not where it should be, and it hasn't been so for years. To put it bluntly, we are not making enough money. That is asking a lot of our shareholders and is weakening our ability to invest and grow. There are clear expectations to us: finally get a handle on the situation, meaning we have to drive ahead with our performance improvement and the transformation of ThyssenKrupp. More activity, greater intensity, a faster pace. This is also shown by the figures for the past fiscal year. We have made progress in cash generation, which is a step in the right direction. Operationally, however, it is nowhere near enough. Klaus Kaisberg will report on this in detail in a moment. Financial strength is the precondition for future viability.
That is why we are prioritizing making our business more successful. To this end, we have initiated a group-wide performance program we named Apex. I'll be discussing our approach and what we have already achieved in the first few weeks in a moment in part of my speech. Our transformation starts with performance, but also goes way beyond that. The key word here is decarbonization. The green transformation of industry harbors great opportunities for our businesses. ThyssenKrupp has technologies that can be used to eliminate large amounts of today's CO2 emissions. In the second part of my speech, I'll discuss how we will systematically leverage these opportunities to create profitable growth. The green transformation is playing a key role in the steel industry as well.
Securing German industry's supply of steel and of climate-friendly steel in the future is an entrepreneurial task of great significance to the economy, and it is a task that we will also be addressing with energy and speed. There'll be more on that in the third part of my speech. But now I'd like to hand over to Claus Kaisberg, who will explain our figures for the past fiscal year. Thank you very much, Mr. Lopez. The past fiscal year was characterized by further challenges: geopolitical tensions, high energy prices, and an uncertain interest rate environment. This was also reflected in our key financials. I would like to briefly discuss the main developments. As usual, you will find details in our annual report.
Order intake totaled $37.1 billion, sales amounted to $37.5 billion, and we achieved an adjusted average of €703 million. We were not surprised by the year-on-year declines. Our figures were negatively impacted by the drop of material prices at Material Services, in particular, as well as by lower revenues and high raw material and energy costs at Steel Europe. Overall, ThyssenKrupp posted a net loss of €2 billion in the past fiscal year. Alongside operational developments, this was due to the impairment losses on non-current assets recognized at Steel Europe, which totaled €2.1 billion. There were primarily two factors in these impairment losses. First, the higher cost of capital, and second, the gloomy economic situation and its impact on our earnings expectations. Looking ahead, we anticipate that the environment for the steel business will remain challenging.
Raw material and energy costs have risen sharply. Demand is low, especially due to the ongoing weakness of the automotive sector. At the same time, Chinese steel producers are pushing into Europe. This is affecting all the region's producers equally and has impacted our plans for Steel Europe. You probably saw a corresponding communication about steel in mid-October. At group level, we significantly increased free cash flow before M&A year on year. We latterly predicted a slightly positive figure for this target, which we actually achieved with a value of $363 million. If you look at the swing from minus $476 million a year earlier, to plus $363 million now, then you will see that we've made good progress operationally. However, the more important message is, we have arrived and we intend to stay.
In other words, we have the ambition and the expectation of remaining significantly in the positive range in the years ahead as well. On the basis of these figures, the executive board and supervisory board will propose a dividend of €0.15 per share to the annual general meeting in February 2024. This will ensure dividend continuity following the prior year distribution. The proposal reflects a significant improvement in free cash flow before M&A in particular. Let me now turn to the forecast. We expect the environment for our business to remain challenging in the current fiscal year. Due to global conflicts, high inflation, and rising interest rates, we anticipate volatile prices, especially for raw materials and energy. This may result in fluctuations in sales and earnings.
Put into figures, this means that we expect a slight increase in sales in the current fiscal year, with contributions from Decarbon Technologies and Marine Systems in particular. We assume that adjusted EBIT will increase to a figure in the high three-digit million euro range. Our Apex performance program will support the development of the businesses. We are forecasting a figure in the low three-digit million euro range for the free cash flow before M&A. Here, we are aware that this key financial could be greatly influenced by the environment of Steel Europe and prepayment to Marine Systems, especially. We expect net income to increase to a positive figure in the low to mid three-digit million euro range. In the medium term, we aim to achieve the financial targets communicated at our Capital Markets Day in December 2021.
Especially, we are seeking to achieve three targets: First, an adjusted EBIT margin of 4% to 6% at group level. Second, a significantly positive figure for free cash flow before M&A. And third, a reliable dividend payment for our shareholders. Thank you very much, Mr. Kaisberg. In order to achieve these targets quickly and sustainably, we have initiated Apex, our group-wide performance program. We must become better at leveraging the potential and strength of our businesses and close the gap to our competitors. Apex delivers the systematic approach for achieving this. The word Apex means peak, and stands for our ambition to translate our technological capability into economic strength and position our businesses at the forefront of our competitive field. It is primarily a question of profitable growth rather than costs, and above all, of achieving a lasting all-round improvement instead of just a flash in the pan.
Our businesses are applying APEX to meet their needs, and thus developing tailored measures. This also covers the further development of the business models, if this can lead to an improvement in the business's performance. We are establishing new ways of working and focusing on performance in everything we do. In the future, the remuneration of our managers will be closely tied to the attainment of financial targets. In recent weeks, the experts in our businesses have conducted many workshops covering five areas for action, especially in the two areas of material costs and net working capital. Additional measures to improve cash management and performance have already been identified. Work has begun to implement the measures in the segments. This is because speed, or drum beat, as we call it, is a core element of APEX.
I would like to briefly mention three examples that show we are on the right course. At Steel Europe and Material Service, we are using artificial intelligence to optimize our management of material inventories. Our pacemaker software forecasts demand, enabling us to plan sales volumes. In this way, we are increasing our efficiency and optimizing net working capital. The second example, APEX is not restricted to individual efficiency improvements, but examines entire business models. Our Uhde and Polysius businesses have developed a sustainable end-to-end solution for green cement. This example shows how performance and green transformation can go hand in hand. At the start of my speech, I already mentioned the enormous installed base. Thirty-five percent global market share is something that we can build on. The third example, we're also using APEX to address costs.
In our forged technologies business, we are using AI to identify alternative suppliers and integrate them into our supply chain. In this way, we are extending and diversifying our network. These measures are examples of what can be achieved with APEX. Overall, we have already defined measures with a volume of $1.2 billion and allocated them to levels of difficulty. We will be continuing this approach. The goal is for APEX to support the achievement of our midterm targets in fiscal year 2024-2025, with a contribution of as much as $2.0 billion to adjusted EBIT and to mitigate opposing market efforts.
We, the members of the executive board of thyssenkrupp AG, will be monitoring the progress of APEX on the basis of defined milestones in a very frequent review process, and we will be proposing adjustments and ensuring that the company achieves the targets that it has communicated.
APEX is therefore improving the performance of our businesses. Our other big focus in this company's strategic direction and positioning under the heading of thyssenkrupp, enabler of the green transformation. We have world-leading technologies that can reduce a large portion of today's CO2 emissions. To give full visibility to these capabilities and expertise, we established a new segment at the start of the current fiscal year. Decarbon Technologies, our green industry powerhouse. Decarbon Technologies comprises Rothe Erde, Uhde, Polysius, and thyssenkrupp Nucera. In other words, it consolidates our key technologies for the decarbonization of the industry. In this way, we are aiming to exploit the enormous potential of these businesses and translate it into value-enhancing growth. One example, in all the Decarbon Technologies units, we are seeking to repeat the successes we have already achieved at thyssenkrupp Nucera.
Thanks to a standardized and modular approach to alkaline water electrolysis, this business is able to produce large volumes at low costs. In this way, it enables its customers to efficiently produce large quantities of green hydrogen. Our aim is to build on this success. Decarbon Technologies is a key area of action and, above all, a growth driver for thyssenkrupp. For this reason, I have assumed responsibility for this segment myself. The Decarbon Technologies team is made up of around fifteen thousand employees based at the headquarters in Dortmund and at other locations worldwide. Going forward, for example, we are aiming to take a strong share in the developments in growth regions like the Middle East. At thyssenkrupp, technology is supporting the energy transition and decarbonization. We are not restricted to decarbon technologies. We are focusing the entire group on the green transformation and future areas.
For example, also automotive technology and material services. In its new structure, automotive technology is generating around 70% of its sales with products that can be used for all drive types. In the future, the business will continue to expand its activities in the e-mobility, making automotive technology the enabler of climate neutral mobility. With materials as a service, material services is positioned as a smart supply manager, shifting its role from a material supplier to a manager of sustainable material chains to become the enabler of a circular economy. Ladies and gentlemen, as the enabler of the green transformation, thyssenkrupp will be attending the world's largest climate conference, the COP 28, in Dubai, in a few weeks' time, and will play an active role in a number of events.
The decarbonization is a matter of global necessity, which is why platforms like COP twenty-eight are so important. thyssenkrupp aims to act quickly, courageously, and in an integrated manner. With our solutions, we are seeking to grow the business. We also want to contribute effectively to climate protection. This applies most particularly to the transformation of steel. As is well known, steel production based on fossil fuels is coupled with very high CO₂ emissions. We want to change this, and change is essential. Green steel is the future, and green steel will make a massive contribution to decarbonization, probably the largest possible single contribution at all. Viewed quite objectively, we are the greatest climate activist in Germany because we are enabling the transformation to green steel. There is a second reason why it is essential to protect the viability of steel production in Germany.
Steel is the starting point for many value chains. It is the primary industry material in the automotive industry, in machine, in plant engineering, and in construction. The German economy, more than hardly any other, is based on industrial value chains that process steel. Millions of jobs are tied to metal, metal processing industries. That is why a strong and competitive steel industry is extremely important to the economy as a whole. Steel is a local market. Almost all our major customers have their production facilities in a radius of several hundred kilometers from our furnaces. To put it quite clear, steel production, the automotive industry, and other industries forms are regional clusters. If one of them were to leave, it would be hard to retain the other in the long term. That is why steel is so essential to the industry policy in Germany.
There can be no resilience without domestic steel production. Resilience and the transformation to green steel are the key. Our customer industries want climate neutral steel. However, the path to achieve this is challenging, not least because Far East competitors are moving far more slowly, which is initially giving them a massive cost advantage that is to our detriment and the detriment of climate protection. Our path is ambitious, but it is a path we want to take. We are working hard to drive the transformation of steel in Europe and made significant progress in the past fiscal year. Already, at the start of 2023, even before we received the official funding decision, we began the construction of the first hydrogen-capable direct reduction plant with two melting units at our Duisburg site.
We have obtained support from the German government and the state of North Rhine-Westphalia. They are providing funding of around €2 billion to offset the higher cost of climate neutral steel production during the start-up phase. The preparatory work has already started, and the project is on track. However, many questions are still unanswered. The main one of these is where we will get the giant amounts of green energy we need for the climate neutral operations of our plants. Just to give you an idea of the scale, the start-up of the first direct reduction plant requires the construction of more than 800 new offshore and onshore wind turbines just for our Duisburg site. As well as availability, price is a critical factor. We need green energy to come at competitive and predictable conditions.
It is inconceivable that we should be tied to the volatility that we are currently seeing in the prices of green energy. This is because in the future, energy costs will account for as much as half of the total cost of steel production. To ensure the supply of sufficient green electricity at competitive prices, we are in discussion with potential partners, also outside the steel industry. For example, on a recent trip to Nigeria with German Chancellor Scholz, I had talks about how that country could support us with the supply of hydrogen and liquid natural gas. We also see great potential in partnerships with energy industry players that would benefit both partners equally. In the foreseeable future, Steel Europe will be one of the biggest users of green electricity and green hydrogen.
That means that long-term supply relationships will enable us to ensure that producers have the necessary planning certainty to invest strongly in expanding renewable and establishing a hydrogen infrastructure. In turn, this will give the steel industry planning certainty in respect to competitive prices and long-term access to substantial amounts of green electricity and hydrogen. For this reason, we are in constructive and open-ended negotiation with the energy company IPH. The topic of this discussion is a potential joint venture with Steel Europe, in which we could merge our steel expertise with the energy expertise of IPH to achieve significant competitive advantages in the green transformation. The specific form of such a joint venture is the focus of the current negotiations.
We are seeking a good solution for steel, for the people who work in steel, for the customers for steel, and thus for the future and success of Germany as an industrial base. This requires the involvement of all stakeholders. For this reason, we are in an intensive dialogue with the government, and of course, we are closely involving the employees' representatives at thyssenkrupp. Oliver Burkhard is responsible for this at thyssenkrupp AG. He will now give you an outline and an update on other HR issues and the marine business. So thank you, dear Michael. As you know, codetermination democracy within the company is standard practice at thyssenkrupp, and this begins at an early stage. At present, the employee representatives are closely involved in the work of the support commissions for the spin-offs of the steel and marine businesses.
We always inform the employee representatives in as much detail as permitted by the current status of negotiations, and we do not intend to change this approach. As a potential steel joint venture is a material M&A transaction, it requires the approval of the supervisory board of thyssenkrupp AG. Of course, the executive committee and the SFI committee are updated continuously about the spin-off processes. Moreover, we will honor our agreement with the IG Metall trade union to conclude a best and fair owner agreement for any transaction. This applies to the sale of material business interest and thus to any potential joint venture. The impact on employees would be limited. Steel Europe would have a second shareholder alongside thyssenkrupp. This would not affect the existing collective bargaining agreements, all agreements on safeguarding employment and location, as well as all other agreements based on codetermination.
This approach is also supported by the IPH. The CEO, Daniel Krywinski, has also taken directly with the employee representative on this subject. As you can see, we are negotiating in confidence, but also involving the employees' representative, and we keep you informed. We are not only supporting the transformation of the business on Steel and Europe, but also in all other areas of thyssenkrupp, especially... Well, and about the marine systems, especially since the start of the wars in Ukraine and Middle East, improving resilience has been a major focus in the defense industry. So as... It is taking... it is a central role. Expanding global demand and increasing defense budget have additional growth opportunity for our marine system segments.
To ensure that this business has the best means of exploiting these growth opportunities and continuing its development, we are still seeking to place it on a standalone basis. We are currently reviewing the best way to re-leverage the potential of marine systems, and which is the most value-enhancing option for the future of our company and our customers. Potential from marine systems?
So we're now looking at the possibilities of leveraging this potential of Marine Systems, which is, of course, the value-enhancing option for the future. Looking at this review, it's not yet available, but I can assure you, ladies and gentlemen, that stand-alone for TKMS is good news. It's good news for TKMS, for the Federal Republic of Germany, but also for potential new owners. The spin-off of Marine Systems is an essential starting point for a German and European consolidation process, which of course, is absolutely necessary. That's part of the narrative of the marine sector. Under German management, that's what we want, of course. Our strength lies in the construction of both submarines and surface vessels, and Marine Systems is the only company that combines both, including the electronics. That's our unique selling point.
As recently stated by German Defense Minister Pistorius, the German government is also exploring a possible state participation. I was there when he was giving that speech in Kiel, and this, of course, could also help to stabilize the industry in Europe, and that will definitely be a positive contribution. I'd like to conclude my statements with a brief look at a few general developments in HR. Group head count in the past fiscal year remained stable to slightly positive, with net growth of 3.6%. That's slightly positive. Most of this growth was, of course, outside Germany, for example, even with Marine Systems opening a shipyard in Brazil with more than 800 employees.
As a result, the average age of our employees has fallen slightly for the first time in thirteen years. Maybe nobody noticed, but it was down by 0.2% to now 42.3 years. That's something that I would like to mention because we want to reach out to young people and to ask them to join us. We achieved our ambitious OSH targets with an accident frequency rate of 2.4. None of our own employees was the victim of any fatal accident last year. That's good news. Unfortunately, we did have three fatal accidents of suppliers. The main task of HR in the new fiscal year will be similar to last year's.
We'll have to address the global labor market challenges and continue to focus on recruiting and retention, meaning that we want to keep the ones who are already working for us. We're optimistic because of the results of our pulse check, which is a survey that we do with our employees, and most of our employees participated. The positive change on eNPS, an indicator of the degree in which ThyssenKrupp is recommended as an employer, show that things are moving in the right direction. This is a clear sign people want to stay with our company. It goes without saying that we must and will continue to work on this issue in order to be an attractive employer for our workforce.
That, of course, goes hand in hand with our initiatives to sustain and expand our performance culture of collaboration. Thank you very much, and back to you, dear Miguel. Thanks, Oliver. Ladies and gentlemen, ThyssenKrupp performed robustly in a challenging environment in the past fiscal year. We have made significant progress in our free cash flow before M&A. Our dividend proposal underscores our ambition to again be a reliable and worthwhile investment for our shareholders. With our Apex performance program, we are making our businesses fit to face the competition, and we're focusing the group systematically on future areas and implementing the green transformation of ThyssenKrupp with speed and intensity. We have created the best possible structure that enables us to optimally support our customers in the green transformation.
Through all of this, we are creating added value for our shareholders and positioning ThyssenKrupp as a good and attractive employer. Thank you very much for your attention. We're now looking forward to your questions. Thank you very much, Mr. Lopez, Mr. Burkhard and Oliver, thanks to you. I would like to ask you to raise your hand if you would like to ask a question. Please state the company you represent or the paper that you represent, and then I would also like you, people who are listening in the stream, to have a virtual hands up, and you can also ask your questions in English. The answers will be made in German. Mr. Finke, you are the first to ask a question. Good morning. Thank you very much.
I have a question regarding the $1.2 billion that Apex has already contributed. Was it mostly in the cost reduction program, or is it also a plus in sales? And another thing about the EBIT margin for the next year, we had $700 million last year, and is supposed to be again in the three-digit ballpark? Does it mean that 3% to 4% EBIT margin is not going to be achieved now? Mr. Kaisberg. Mr. Finke, thank you very much. I start off with Apex. Indeed, you're right. The dominant leverages that we could achieve so far were in sales, true. That means that we increase top line by passing on increased costs, and on the other hand, we also expect future sales because of new business fields. Thank you.
Your other questions were about the EBIT margin. Well, we have just given you the guidance for this year, so you know it, or you just received it, of course. Like we said, the measures that we have in Apex, we will continue developing, and there will be further measures which will then kick in, maybe not so much this year, but definitely next year, to help us attain the margin that we anticipate. Mr. Dierich from Die Welt, and then online to Mr. Seitz. Mr. Dierich. Good morning. You again focused on the importance of steel. Now, we had the finding in Karlsruhe at the German court. What kind of impact will that have on steel? Could it be that then the funding that has been approved may be in jeopardy now?
How safe is it that you can actually transform to green steel? Thank you very much, Mr. Dierich, for this question. The importance of the $2 billion for us, of course, is of utmost excellence. We already received that funding proposal in August. It is secured. So the investment in the first CO₂ reduction plant has already been initiated, even prior to getting the funding commitment. And with the funding commitment, we have, of course, a securing of this investment. But that's already done. How we continue with the green transformation, I don't know. But we, as a company, will continue our plan for 2030. That has been defined very clearly. And of course, in terms of what is currently happening, we are in direct contact and rapport with the ministries. Mr.
Seitz from Reuters. Good morning from Frankfurt. I can see you. I think you can see us, too. Thank you very much. Mr. Lopez, decarbon technologies. Decarbon technologies, is that basically our story for the future? Because unfortunately, the sound is breaking off. But again, my question is, so decarbonization, green steel, is that the core of thyssenkrupp? Is that, like, your main selling proposition? And the second one is Mr. Kaiser, unfortunately, the question cannot be understood. We have some technical issues. Mr. Seitz, can you repeat the question? Your question was not coming in very clearly. The question to Mr. Kaisberg was... I'll try it again. What kind of commitments? I'm sorry, we couldn't hear it. The pension commitments. The pension commitments. The pension commitments, that's what the question is about.
The interpreter apologizes because the sound is awkward. The strategy of thysenkrupp is very clear-cut. We have the two spin-offs in steel and in marines, and on top of that, we have the importance improvement that we have already explained in detail. With that, we think we can achieve the 2024, 2025 objectives that we communicated at the Capital Market Day 2021, 2022. The segment of carbon technology is key. Absolutely, it's a very important element in our green transformation, and we then enter the market here because we want to drive forward this transformation. It is a very key aspect of the capital market story of thysenkrupp, no doubt about it. But that doesn't mean that other units will be referred to the second tier. That's not the case.
And to answer your question, where we're at when it comes to book value and our pension commitments, we're talking about $2.6 billion here. The value that we depreciated on was $3.6 million. You'll find that in our business report, in the financial report. Mr. Kohl, and then Mr. Müller-Arnold. First, it's Mr. Kohl. You have to press the button, sir.
Can you hear me now?
Yes, we can hear you. Christian Koer from Calon Steel. I have two questions as to the developments for the annual delivery programs for steel. You're now starting these negotiations, and as far as I'm concerned, the partners in these negotiations often refer to the prices of the previous year. I think that's a really strange way of looking at things. I mean, you should look at the current price and not the one from the past year. But I understand that the spot prices of right now are very similar to the ones that we had last year. Therefore, my question is this: Do you think that in the negotiations this year, we can achieve similar prices to the ones that we had last year? That was my first question.
The second one is: Are there perhaps any criteria that may take on a greater role? For example, perhaps our terms, I mean, the running time of the contract should be shorter, or that you have further clauses that would take into account the current developments.
Thank you for your question. Basically, it's this in steel, we have various points of times when we initiate negotiations. January, of course, is one, that's clear. That's when we discuss the contracts in the car, but also packaging steel. But then we have the first of April, and also the first of July is important dates. Now, when you look at the spot price development, I can tell you, well, you can understand that we definitely will not give you any statements as to our position right now. But not so much is it because of what happened last year, but because of the current situation. I mean, what is the spot price development? What is the expectations right now? Those are the things that we need to discuss in detail.
I can't tell you much about that, not about what prices we can achieve or not achieve. And of course, I cannot give you the state of the current discussions right now. I think that was basically my answer.
Señor Mr. Muller Arnold, three questions. First is referring to the negotiation with EPH. Which is your goal right now and your expectation? When will we close this negotiation? Second question, you mentioned that the supervisory board has to accept these measures. This means that you don't need a conclusion of the annual meeting. Mr. Lopez, the double role being the CEO and decarbonization leader, this will be a long-term agreement or will there be any changes? Thank you.
Thanks a lot, Mr. Muller Arnold. Concerning your first question about the obligation or in time, how to negotiate... We will negotiate with EPH, I cannot place any statement. The current situation at the market and a different market is known already, and we have to evaluate this carefully. I will not make any statement concerning this topic. About the annual meeting, we estimate that we don't need a decision from the annual meeting. And third question, we sought carbon technologies. We are developing this segment right now and the different markets, and on midterm, we will, of course, deal with this question that you highlighted here.
Next question from Mr. Meinke, and then again, online, Mrs. Honig. Okay, perfect. Thanks a lot. I would like to ask about Kretinsky E-EPH, about this negotiation. Sorry, the sound is breaking off. Do you want a sale without the acceptance of the employees? Or is this a line you would never cross? And then I would like to know, concerning steel, you have a high participation in steel with HKM. You want also a construct reduction plant installation there. And also about the logic selling steel, I would like to know the following: If you highlight that the leverage, major leverage is steel and you are protecting the climate, why do you want to reduce there? And another question, fifty-fifty deal is now a topic, or you maybe can consider a complete sale.
Thanks, Mr. Meinke. Fifty-fifty is the model, and with that, we will continue. First question, we want, and we will—
involve all participant actors. Together, we will find a good solution. Concerning the question of HKM, it is a company where we participate, but also two other units or participants are there, and we have to discuss that with the other shareholders, and in the next time, and take a decision in the next time. These three companies participate in participation that participate in the HKM. So please switch the micro on. Yeah, the logic from the discussion about the discussion with the APR, we are convinced that it is absolutely necessary to establish a partnership on energy level.
As you mentioned before, around 50% of the costs of steel will be energy-related, and of course, we cannot manage that if the volatile development will participate with this high participation. That's why we believe in an energy partnership, and that's why we are talking with IPH, and it's very decisive and important. Yes, good. Now, Mrs. Hening, online. Thanks a lot. I hope you can hear me. I have three questions. First, APH, considering the supervisory board, you want to establish a pre-negotiation contract by the end of October. Will you do that on 2024 APEX? It will be $2 billion for the EBIT, and this will be impossible without the reduction of employees, especially considering AI. Of course, you will have got a reduction of staff.
About the current situation of the staff and staff reduction, where are you positioned right now, and what will be happening? We will start with APH, Mr. Lopez, and then Mr. Burkhardt. Thanks, Mrs. Hening. Considering APH, I want to highlight that the current situation is that we are discussing right now, and we cannot give you a timing, because we have an open-end discussion. As you know, we have got a very challenging market, high energy costs and fragile structure, and a lot of competitive out of Europe. That's why we have to position us, and this is the base for the current negotiations, and this will take some time. Thanks a lot.
Considering the effect on the staff about APEX, we have got final goals, financial goals, no hats, so that's considering material, supplier, and so on. Again, we are convinced it... We have no program to reduce a plant, to reduce staff. That's why I have no number. On the current situation about reduction the staff, we had 13,000 staff reduction. You see net development, because this is happening in foreign countries and for instance, on marine. There we have also a growth of personnel in North America. This is positive, and we want also that because of the high turnover. We have got this program finished up to 90%, and we want to finish this year with 100%. How many? We have 13,000. This was the goal, 90%, 12,000 approximately.
I can give you the numbers and details later on if you want. Thanks a lot. Mrs. Becker from the Bösen Zeitung. Sorry, happened again. Sorry, took some time. I have several questions. EPH, again, I would like to know, I understand that you want an alliance, an energy partnership, but why do you need a capital participation? Also, I'm asking myself, Mr. Katinsky has got coal plants in East Germany. I'm not sure if he has got green energy, and you want to deliver green, you want to have green power and maybe... All this also needs money. Maybe you can let us know further details. Still, Europe will be independent, will be a spin-off. This is a topic you have highlighted since years. When will this happening? And Mr. Kaisberg, a question to you...
How long will thyssenkrupp have enough reserve to serve all these needs? We will start with Mr. Kaisberg. Yes, we can start. So if you have a look at balance, the own capital is 28%, €8.9 billion cash, and we have a positive free cash flow, and we have achieved our goals. We want to stay there. I think we have got good balance sheet, and in this sense, we have a good position. I don't have to mention anything else about this topic. Mrs. Becker, thanks a lot. About the Apex costs, we consider that this program will be €2 million. And considering the question about the solution with EPH, if we don't find a solution, we have a plan B. Of course, I will not share it here.
The first question: why capital participation? Why do we need that? EPH is not only interested in offering the energy, also to be part of the steel business. Steel is a good business. As I mentioned before, it is the first material in Germany, especially in Germany, and EPH, of course, is interested in that. Thanks a lot. I've got... I have Mr. Gross and Mr. Böner, Mr. Meinke, and Mr. Dierig, and I think with that, we can close. No additional questions here. Mr. Gross. Mr. Gross? You didn't want to ask a question. Okay, then we follow with Mr. Böhmer, CPF. Again, I want to ask about the calls through the court in Karlsruhe. This will be gap of billions. What is thyssenkrupp considering?
Which project will be affected, and will the climate friendly restructuration be in danger? As mentioned, with this commitment of the government, we can fund the main project, the $2 billion we receive from the government and the land, Nordrhein-Westfalen. But we think that the transformation is needed to achieve the climate goals, and therefore, we need more negotiations to find a constructive solution, and we want to follow this path. We will be in touch directly with different state actors, and we have got relationships there.
I would like to continue with this because it's a bit wishy-washy. Sorry, what you're saying right now when you talk about constructive talks and all that. So asking you concretely, what are the worries and what are the questions that you ask when you get into negotiations with the ministries? And where do you get the feeling that you need to perhaps make adjustments, and what do you think will be the effect on that? Not on steel, but on your decarbonization technology. I mean, there are also public orders. I mean, when you get government orders, what do you think you could not get because of the constraints due to the ruling by the court?
Well, you know, that is a global business, and we're not focused only on what is currently happening in one geography, but we look at the global clients. In other words, the limitations, because of this ruling by the Constitutional Court, this does not affect us so much. We are more committed to getting capacities high, to be able to meet the demands on a worldwide level. Now, as to the first remark you made, I think that the main point is, and that, I guess, is the main question: How is it that the hydrogen economy in Germany can be started up? That is the big question, because you know that in 2027, we want to start the DRI plant, and for that, we need hydrogen.
This is the central question right now that we are dealing with at this point of time.
Okay, I have two more questions here. Mrs. Warmke, digitally, and then Mr. Meinke, who is here. Let's hear Mr. Meinke first.
Yes, I'd like to ask you something personal, Mr. Kaisberg. You said that you were about to retire. Who is going to follow you? Do you know already who your successor is going to be, to make sure that the work will be continued properly? What's it look like? And Mr. Lopez, my question is this: So you've been on board now for six months, and what came as a bit of a surprise? Is it tougher than what you thought, or is it just like you expected it to be? And what do you do differently from your predecessors? Mr. Meinke, your first question. We are a stock company, so we go by the stock operation law. So it is actually the supervisory board that is responsible to appointing people.
And therefore, this is not the place where you should ask that kind of question. So much as to Mr. Kaisberg's last question, now, Mr. Lopez. That is a different question that unfortunately, the interpreter couldn't hear, but he's not going to answer that question either. But I feel happy here, and I'm still here. As long as I'm here, I work 100% for this company. But yes, time is limited. Mr. Lopez. Yeah, Mr. Meinke, thank you very much for that question. Surprised? No, I wasn't really surprised at anything I saw and I found what I knew I would see. A great brand, a fantastic brand. One hundred thousand staff, fully committed to their work, who work day and night for our customers, and a very strong base, very convinced clients.
On the other hand, of course, I see what I mentioned earlier in my speech, that, of course, financially, in our performance, we have to change. We have to get better. Therefore, the question, what do I do differently? It's not really the question. The question is, what do we do in the team, and what do you do in the leadership team and the overall management team? That's something that we need to work on. How from this technology strength and with a great customer base, how can we increase profitability? That is what we are focusing on with Apex. You heard that, and people like it, and this leads us to a good situation, and therefore, that's what we're looking at. This is our job. Thank you. One final question, Mrs.
Vanke, please, it's your turn.
Yeah.
Yes. To what extent will the ruling from Karlsruhe, the finding of the Constitutional Court, impact your discussions with Mr. Kosinski when it comes to future investments? No. No, no, no. No impact. It does not affect our discussions with Mr. Kosinski. Thank you. All right. And there's another last question now. I can't see your name, sorry. My name is Valerio Romano from RTL Germany, NTV. Two questions. As to the ruling from Karlsruhe, and I hear that, Mr. Lopez, it looks like it doesn't really affect you so much that now there has been the ruling that the budget has been constrained. But yet, we would like to know what could that eventually mean for the steel industry? 2024, of course, you want to be profitable again.
The ruling from the Constitutional Court, to what extent could that make life difficult for you? I believe that the effects, in an overarching sense, or in other words, beyond ThyssenKrupp, are there of course. Because not all companies in the steel industry have been receiving the kind of funding that we have received. But you're right, in the overall analysis, you have to take into account that there will be some participants in the market, and the surrounding industries, which will, of course, be affected. That needs to be analyzed. We have the teams doing that. We have the associations that will make statements on that, of course, that will be affected.
But I must insist, and I repeat, that we, with our plans since we received it in August, we already received the funding commitment in August. We were able to put it into action and implement this, but of course, in the overall economic field, the budget constraints will have an effect, but it's not to us to make a judgment on that. Thank you, ladies and gentlemen. No further questions here, no questions in the internet, and therefore, I would like to thank the board and all of you for your participation. At twelve o'clock, we have a phone conference for our analysts. Right now, we have a small luncheon prepared for you.
We have our meeting, the AGM, in Bochum, the first time now after four years, directly there, and we will then publish our figures for 2024, and that will be happening on February 17, 2024. Have a nice day. Thank you very much, and a safe trip home. Goodbye. This concludes our annual press conference. Thank you.