Welcome to this year's annual press conference of the Thyssenkrupp AG. I'd like to welcome you here to our conference center here in Essen, and I'm very pleased that you have been able to get here today. My name is Frank Radoske, and I am responsible for communications for Thyssenkrupp AG. This is going to be transmitted on live stream, and all journalists who have connected on board online, you had a chance to ask your questions. I'd like to welcome my colleagues from Thyssenkrupp, who will be following this on live stream on the stage.
I'd like to introduce the entire executive board: Ilse Henne, Mr. López, and Schulte, Oliver Burkhard, and Volkmar Dinstuhl. Before we start, I'd just like to point out some security issues. In the case of an alarm, please leave the room carefully and calmly using the exits, emergency exits on the side of the building here and at the front entrance. Please then leave the building and go to the collection point, and that is on the opposite side of the water. So, a few couple of organizational issues. For the press conference, we've planned around about an hour. We will be doing the conference in German.
For any of you who do not understand German, we will be organizing a simultaneous translation. Your questions can be made in your own language, and we can then give you a chance in German, and that answer will then be translated. Our Chief Financial Officer and our CEO, Mr. López and Mr. Schulte, will be talking a little about our business year and giving you an outlook on the rest of the year. Then you will be able to answer, ask any questions to the entire management team. Before we start, I would like to kick off with a short film.
We make our world a better place, safer, and more sustainable for future generations. We must stop climate change urgently, but this poses the greatest challenge the global industry has ever faced: the green transformation. Our solution? Pioneering technologies and bold innovations, creating new markets and unlocking our potential. The slewing bearings from thyssenkrupp Rothe Erde are driving wind power forward worldwide. Green energy is the key to our future, and we make it possible because we need it for the production of green hydrogen.
Hydrogen is generated in the electrolysis plant of a leading provider in this field, thyssenkrupp nucera. Environmentally friendly, emission-free, and on an industrial gigawatt scale. This is good because our world needs hydrogen as both a storage solution and a generator of electricity for industry. Thanks to thyssenkrupp Uhde, hydrogen reaches where it's needed. By using green ammonia as a transport medium, we enable large-scale decarbonization, or as we say, power to ammonia. With the transformation into a climate-neutral steel producer, thyssenkrupp Steel is once again making industrial history.
Using renewable energy and hydrogen, one of Germany's largest CO2 emitters is becoming a leader in the sustainable industry of tomorrow. But our mission doesn't stop there. Currently, the cement industry accounts for around 7% of global CO2 emissions. For now, thanks to the innovative technologies from thyssenkrupp Polysius, we can reduce these emissions almost entirely. And that's not all. At thyssenkrupp Materials Services, we reduce CO2 emissions across the entire supply chain. Our digital innovations and sustainable products promote the circular economy. They ensure the efficient use of resources and help our customers to decarbonize their production. For a more climate-neutral future and the mobility of tomorrow, we are already shaping it today.
With Thyssenkrupp Automotive Technology, we are driving e-mobility forward. We develop innovative technologies and products that set electric vehicles in motion. Change is our mission for an emission-free and clean industry. Thyssenkrupp, engineering tomorrow together.
Ja, und damit übergebe ich das Wort.
Sure, and I'd like to hand over to Mr. López.
Guten Morgen, meine sehr geehrten Damen und Herren.
Good morning, ladies and gentlemen, and from me as well, a very warm welcome to those of you here in Essen and for those watching online. Thank you for your interest in Thyssenkrupp AG. If you don't want to change anything, you will also lose what you want to preserve. This is a quote from Gustav Heinemann, a former president of Germany and also once mayor of Essen. And although it was many decades ago, it could not be more appropriate to our situation today. And it also applies to our wonderful company, Thyssenkrupp. The world is changing at breathtaking speed.
There are geopolitical tensions, armed conflicts, uncertainty as to the role and course to be taken by the United States, and many open questions with respect to the German government's greatly restricted ability to act following the end of the coalition. The stability of Germany's economic system, as we have known it for many decades, is crumbling. The deindustrialization of our country has already started, and there is bad news every day from many areas of the economy. There is a sense of alarm within the German automotive industry and among many of its suppliers.
Energy costs in production are way above the levels in other countries. The gulf between personnel costs and productivity continues to widen at a rapid pace. Corporation tax, excessive bureaucracy, and the worrying state of Germany's infrastructure are among the other serious problems. As an industrial location, Germany is creaking under the pressure. The auspices for the green transformation and the associated schedule are worsening daily. We must take action because industry has always been the strength behind Germany's economy and the foundation for our country's performance, capability, stability, and prosperity.
There is no doubting the need to act now. This also applies to our proud company. We want to change Thyssenkrupp and make it successful again. We want to restore the company to that which it was for decades: an icon of German industry, a world-leading technology enterprise, and the epitome of German inventiveness with our steel production, our industrial businesses, and our shipbuilding activities. The many projects we have initiated in those segments are evidence that we are picking up the pace and making progress. But more about that later.
Even though right now many other things might seem more important, the fight against climate change is and remains the biggest challenge for all of us, as evidenced again recently by the terrible severe weather in Spain. It's about a transformation for the good of all mankind. This is a massive global task, a task that we can only achieve by working together with determination to transform the economy and society across all borders. We are ringing in the end of the fossil era, especially in industry, and this is not only a gigantic challenge, but above all, an enormous opportunity.
That film has just shown this again very clearly. However, what is still fiction today must become reality, and that's what we need to talk about every day, day after day. It's all about transformation. Our generation, which now holds responsibility, and is our task. We at thyssenkrupp firmly believe in the business opportunities offered by the green transformation of industry. We also firmly believe that focusing on the green transformation will enable us to also overcome the crisis that has beset thyssenkrupp for many years and to take the group forward into a successful and profitable future.
Three reasons speak for this belief. First, we know how to do it. thyssenkrupp has world-leading technologies that can be used to cut a large amount of today's CO2 emissions, and we're already applying these technologies on a very large scale for our customers. Secondly, at thyssenkrupp, we have the right people, pioneers who want to shape the green transformation. They don't want to be driven by a rapidly changing world, but they want to be the drivers of the change towards a better, sustainable future. They are the innovators, the ones with the courage to make change and be pioneers through their determination and flexibility.
And thirdly, there is no alternative to the green transformation. If we want to make sure our planet is habitable for future generations, the world has to act, but not sometime, but now. The years until 2050 are a foreseeable period of time. Here at thyssenkrupp, we are already acting, and the green markets will come, and that's something of which I am absolutely convinced. Let me give you a concrete example. A few weeks ago, Saudi Arabia announced its intention to become the world's largest producer of green hydrogen. This will be associated with enormous investments for the construction of production plants and transport infrastructure.
These are the kind of projects which thyssenkrupp can play a leading role in. As you know, we are already involved in NEOM. We are consistently focusing thyssenkrupp on this new future. With our businesses, we want to shape the green transformation and, as a result, build a good future for our company and its employees. In the past fiscal year alone, we invested around EUR 690 million in R&D. This is creating and opening our future. However, if we want to survive in the marketplace, we also need to have competitive cost structures. These are connected with the framework conditions that we expect from our government.
However, a great deal lies in our own hands. That is why performance is at the very top of our agenda. This, too, is creating our future, and we also want each of our businesses to evolve in the best way possible, irrespective of their ownership structures. In the case of those businesses which can develop better in other constellations, we are addressing portfolio issues with great determination. That is the third component in creating our future. These three strategic areas: performance, portfolio, and the green transformation define our framework for transforming Thyssenkrupp.
We have made great progress in all three areas in the past fiscal year, and we have made ambitious targets for all three areas for the current fiscal year and the years beyond. Our CFO, Jens Schulte, will now summarize our key financials for the past fiscal year and discuss the area of performance. I will then report on our strategic progress. Finally, we will provide an outlook of what you can expect from us in the current fiscal year, 2024, 2025, and beyond. Jens, it's all yours. Thanks, Miguel. Good morning, everybody. I have met several of you already earlier when I presented our quarterly figures in our Q3 call, so I'm particularly pleased to see you now in person.
Miguel López has already sketched the situation. Times are challenging. The macroeconomic environment is affected by geopolitical crises and uncertainties. The war in Ukraine is continuing. Conflicts are spreading in the Middle East. Growing tensions between democratic, industrialized nations and countries with autocratic regimes are curbing the global economy, and even though we are firmly convinced of the great potential of the markets for green technology, they're currently also characterized by uncertainty and restraint. Many major projects have been delayed.
Customers are holding back, and we are still waiting for the ramp-up. This is reflected in almost all of our customer industries, especially the automotive industry, engineering, and construction. Added to this, there are significant structural uncertainties and challenges in our customer industries, particularly the automotive industry. In this very challenging environment, thyssenkrupp's businesses have performed very well overall, and I would like to emphasize that. We were able to cushion most of the negative market effects, for example, through measures in our APEX performance program, which I'll discuss in more detail in a few moments.
After having to adjust our forecast as a result of the much weaker demand in July and following in the nine-month report, we then achieved the targets for sales and adjusted EBIT and even exceeded the target for free cash flow before M&A. In an environment in which many companies are publishing profit warnings, sales decreased by 7% to EUR 35 billion, which was in the middle of the range reported of negative 6% to 8%. Our adjusted EBIT was EUR 567 million, i.e., within the forecast range, and this figure included around EUR 80 million in negative one-time effects from costs recognized for legacy products in the cement engineering business at Decarbon Technologies.
Despite all this, we managed to keep at last year's level for our Adjusted EBIT, and that was a remarkable achievement, I think. Our cash flow before M&A was positive and above the originally forecast amount of EUR 100 million. We were also helped by early payments by Marine Systems customers, which was actually expected in the first quarter of the current fiscal year. However, even without this effect, we would have reliably achieved our forecast. The net loss of EUR 1.4 billion is larger than forecast. Two reasons apply to this. We had to recognize asset impairments totaling EUR 1.2 billion, and there was also further expenses of about EUR 270 million incurred in connection with the necessary restructuring of Automotive Technology, Decarbon Technologies, and Materials Services.
This development also reflects our determined transformation measures. To explain the impairment losses, they are in particular in the light of the economic situation. Added to this are the structural changes in the steel industry and the anticipated future investments for the green transformation of Steel Europe, and the expected economic effects of the DRI's ongoing construction are also having an impact. Because they will affect anticipated future income, we will have to recognize impairment losses also in automotive technology and Material Services.
Compared with last year's date, equity declined by EUR 2.3 billion. This was mainly caused by effects from the remeasurement of pensions due to the application of lower discount rates and by currency translation effects. The equity ratio remained at a very comfortable 35%. Our net financial assets for the third time in succession improved from EUR 3.6 billion on September 30 to EUR 4.4 billion on September 30, 2024. Cash and cash equivalents and undrawn committed credit lines totaling a total of EUR 7.1 billion, meaning we have a very good liquidity position despite redeeming a bond that was due in February 2024. It will be proposed at the AGM in January 31, 2025, that an unchanged dividend of EUR 0.15 is paid per share for the past fiscal year.
This means that following payouts for the past two years, Thyssenkrupp is ensuring dividend continuity, which is an important aspect for our shareholders. Are we entirely happy with the results? Of course not. We have been aiming much higher. We had hoped for a more favorable environment. However, against the backdrop of the massive market challenges, we believe we achieved a respectable result in 2023 to 2024. Further improving our performance remains our number one priority because high-performing businesses are the prerequisite for Thyssenkrupp's turnaround.
Our primary goal is to restore the group's free cash flow before M&A to a sustainable positive level and to achieve positive value added in the long term. In essence, this requires profitability at least at the lower end of our target range of 4% to 6% for Adjusted EBIT. There is still a lot to be done, and we are working hard to achieve this, and we are working on it step by step. To this end, we established the APEX performance program about a year ago on the basis of a systematic methodology. We identified over 2,500 measures with an earnings contribution of more than EUR 2 billion for fiscal years 2023 to 2024 and 2024 to 2025.
We have already implemented some of these measures and were thus able to cushion a large part of the negative market effects. However, this is not enough. For the transformation to succeed, we must further raise profitability to the competitive level. That is why we are continuing to develop the performance program. We are introducing APEX 2.0 with the goal of building on the first-year successes. There will be a stronger focus on structural issues and an even stronger focus on systematic implementation. The responsibility for this remains with the segments.
Their transformation officers will coordinate our programs and communicate with other segments as necessary. This program applies to all segments and to the group as a whole. It would take too long to go into detail about all five segments here. By the way, for example, let me just mention a few highlights among the measures that we have already initiated at Automotive Technology and Material Services. At Automotive Technology, we are relying on a mix of portfolio measures and necessary restructuring measures.
We are at the advanced stage of negotiations with potential buyers of the springs and stabilizers business unit at Automotive Engineering. We have halted the divestment process for the time being. Instead, we are planning to gradually shut down the powertrain activities in Bremen by 2026. For the body construction activities of Automotive Body Solutions, we are exploring a structural realignment in order to achieve a sustainable improvement in the business's competitiveness and profitability. On the basis of its market position and competitive strength, we still see good development potential for the Materials Services segment.
We have strengthened our investment in the future but have also worked on the organization's performance. To this end, we initiated a fundamental realignment of our materials business in Germany in the past fiscal year. That was due to the persistently difficult market situation as well as structural changes in the European industry. We are amending the business model at Thyssenkrupp accordingly to align even more consistently with the growing demand for materials-related services. We have also identified potential to improve the performance of corporate headquarters and have begun implementing the measures.
As you see, a lot is going on at Thyssenkrupp. We have embarked on the right course that I'm convinced will lead to economic success. I will now hand back to Miguel. Yeah, thank you, Jens. That wraps up the comments on the group's current KPIs and performance issues. Let's now look at the strategic progress. In the past fiscal year, there was a strong focus on portfolio issues, the creation of a powerful, profitable, and future-oriented steel company by developing standalone solutions for the steel segment and the marine business. We have made important progress at Steel Europe, especially.
In April 2024, we agreed with the EP Corporate Group that it would acquire a 20% interest in Steel Europe. This transaction has already been closed. The participation of EPCG combines thyssenkrupp's materials expertise with the energy expertise of a leading European energy company. I am certain that together, we will be able to significantly improve the competitiveness of thyssenkrupp Steel. The collaboration with our co-shareholder, EPCG, is highly constructive, as are the negotiations of expanding our partnership. The stated aim remains to establish an equal 50/50 joint venture.
However, in order to take the next steps towards a standalone solution, we first need clarity as to the future alignment of the steel business and the green transformation of steel. What volumes can be sold to the market? What prices can be achieved? How will costs evolve? What investment is necessary? And how can it all be financed? The key to answering these questions is the exit from the coal-based steel production. In other words, building and transitioning to a hydrogen infrastructure on the basis of a reliable schedule and competitive green electricity.
We are in intensive discussions with the government on this issue. It is clear that we need to greatly accelerate pipeline construction in Europe. However, it is the government that must establish the foundations for this, and we also need the commitment of our customers and, at the end of the day, the end users. What additional costs are people willing to pay for green products in the future? As things stand at present, there will be considerable delays. In turn, this will result in a lack of hydrogen availability, high prices, and significant uncertainties in connection with the green transformation.
In the meantime, this means that we will have to adapt to these uncertainties by considering various scenarios. All these questions relating to the structural realignment and the green transformation must be included in a viable and sustainable business plan for the decades ahead. This makes the task extremely complex, but it is essential to restoring the steel business to profitability and achieving full decarbonization in the future. This plan is being developed by the Steel Executive Board, headed by its new spokesman, Dennis Grimm.
In October, we announced a further important step in the realignment of Steel Europe: the sale of Thyssenkrupp Electrical Steel India to our local joint venture partners. The proceeds of EUR 440 million will increase the segment's capital resources, money that we urgently need for its realignment. Talking about capital resources, the struggle to find the best solution for Thyssenkrupp's steel business could not be unnoticed. As representatives of the media, you have been following events closely. The intensive discussions between all relevant stakeholders with their, in part, very different perspectives, interests, and passions are evidence that we are getting to the heart of the problem and making progress.
Ladies and gentlemen, let me state again, and I've done this since my inception here, business as usual simply is not an option. Like the quote from Gustav Heinemann I gave you at the start applies. Standing still would be the certain end. The steps that we have initiated are essential to ensuring the future viability of the steel business. We must act. Yet we cannot take a rudimentary approach that, within just a short time, puts us in a similar situation to the one we are in today. We have to take the long-term view for our entire steel business.
That is why we need a plan which, first, addresses the requirements for the coal exit and climate protection, enabling us, second, to adapt flexibly to the uncertainties of the customer markets, third, to define the necessary production capacity, fourth, to adapt our site and value creation structure, and fifth, to reduce the number of jobs accordingly over this period. We're doing this so that we can sustain our position in the steel market and continue the tradition of steel production in the Rhine and Ruhr region. All of us, management, works council, and trade union, are unanimous in working towards this target.
We have always emphasized that we take our social responsibility very seriously. We have already agreed that the employee representatives, that if possible, we will seek to restructure the steel business without the need for any compulsory redundancies. A multi-year schedule and demographic change will provide the framework for this. However, we're also doing this because it's the right thing to do for Germany. We are ensuring resilient, cost-efficient, and environmentally friendly steel production. In this way, we are making an important contribution to securing the supply of steel as a key raw material for German industry.
At present, most steel is gray, i.e., it is produced in conventional ways, but in the future, it will become increasingly green. In the CO2-intensive steel industry as well, there is no alternative to the green transformation. On the contrary, there are few industries other than the steel industry in which the levers to reduce emissions are as large. That is why Thyssenkrupp Steel has set out to be the pioneer of the green transformation. Just a few weeks ago, we signed a memorandum of understanding with the Volkswagen Group for the supply of low-carbon steel.
In Duisburg, we have begun the construction of an innovative direct reduction plant with generous support from the German government and the state of North Rhine-Westphalia. And a good year after the start of the project, things have developed in a way that we can never rule out in pioneering projects. The plant will likely be more expensive than initially expected. The Steel Executive Board has notified the Supervisory Board about this. We are currently assessing the situation, but we assume that the plan can be realized under the prevailing circumstances.
We remain committed to the green transformation and climate-neutral steel production. Marine Systems is a further focus of our portfolio development measures. In the past fiscal year, we established key prerequisites for a carve-out from thyssenkrupp. The rising demand of the core business of Marine Systems that is forecast for the next 10 years and long-term strategic developments will provide us with growth opportunities that we aim to use optimally in establishing a standalone solution. To our regret, the investment company Carlyle ha s withdrawn from the bidding process.
It's not up to us to discuss the exact reasons for this decision. However, what we can say is that the decision was not based on commercial consideration nor on the financial performance of the marine business. On the contrary, the business is performing well, and the order books are full. Just in September, Thyssenkrupp Marine Systems and Naval Vessel Lürssen agreed to collaborate on the construction of new frigates for the German Navy. Prior to that, the Federal Office of Bundeswehr Equipment Information Technology and In-Service Support extended the support contract for the existing F125 class of frigates by a further five years.
The figures published this morning also show that Marine Systems is on a profitable and thus very good path for all main KPIs. The leadership team headed by CEO Oliver Burkhard and the segment's employees are doing an excellent job. Marine Systems holds a strong position vis-à-vis its global competitors and has a very good growth perspective. It would be better able to realize this and other potential in a new ownership structure. For this reason, discussions are continuing with the German government about possible state participation.
The Kreditanstalt für Wiederaufbau (KfW) has been commissioned to explore a participation in Thyssenkrupp Marine Systems. The primary analysis has been concluded, and the main analysis is ongoing. In parallel, we are now preparing a spin-off of Marine Systems, but we remain open to industrial partnerships about suitable opportunities arise. We remain committed to our chosen path of finding a standalone solution for our marine business. There have been positive portfolio developments at Automotive Technology as well. To be more precise, in our innovative undercarriage technologies.
Here, Thyssenkrupp Steering has entered into a development collaboration with the Chinese BWI Group, a global tier-one supplier to the automotive industry. We're pooling our specific expertise for the development of the innovative brake-by-wire technology. At Materials Services as well, we have made further progress in implementing our Materials-as-a-Service strategy. We are evolving increasingly from a traditional materials supplier to a supply chain manager. For example, we extended our long-standing partnership with one of the world's leading aircraft manufacturers to provide comprehensive supply chain services on a long-term basis.
In addition, we opened new service centers in the US and in Mexico, thus continuing our growth course because it specializes in providing exclusive services for the production of lightweight and electric vehicles. However, we are continuing to expand our digital business models, and with our pacemaker startup, we have added to a further AI-based solution to reduce the carbon footprint. Products. Our startup pacemaker, as I said, has been added with an AI-based solution to reduce our carbon footprint. Ladies and gentlemen, again, I'd like to come back to that quote from Gustav Heinemann.
If you don't want to change anything, you are going to lose that what you wish to preserve, and here at thyssenkrupp, we want to do so for a company and for the world in which our children and grandchildren will hopefully be able to live well. The opportunities to achieve this are there. We just need to grasp hold of them. Regarding our own climate targets that we define on an annual basis, we again significantly exceeded our targets for increasing energy efficiency and reducing emissions intensity. I already just spoke about emission-free steel production.
However, we are doing much more when it comes to the green transformation, also to enable our customers to achieve their climate targets. In the automotive sector, we are driving the green transformation with innovations for electromobility. Energy efficiency is crucial to increasing vehicle range. Our new refrigerating compressor represents a quantum leap in thermal management. The solution is not only efficient, but thanks to the use of natural refrigerants, significantly better for the environment. We have consolidated our innovative technologies with the establishment one year ago of the thyssenkrupp Decarbon Technologies, which is already the world's largest and most respected industrial supplier of cutting-edge technologies for the green transformation.
In the segment's first year, we took the initiative and introduced a large number of steps to enable us to focus on future-oriented production. Now it's about moving forward the innovative technologies towards a decarbonization technology, which is already the world's largest and most respected. So now it's a question of pressing ahead with the transformation of the carbon technologies business models, moving away from individually produced large-scale plants to greater modularization and standardization of the products and the expansion of the profitable service business.
This is especially true in the case of Polysius and Uhde. However, the measures cannot hide the fact that we are already well positioned. Polysius, for example, is supplying the key technology for the world's first carbon-neutral cement factory. Polysius will now construct two carbon capture plants for the Greek Titan Group. Our company was awarded the contract last month. From 2029, the plants are expected to cut carbon dioxide emissions by around 1.9 million tons a year. This is around 12% of industrial greenhouse gas emissions in all of Greece.
The innovative oxy-fuel technology will also be used in the construction of a new cement plant for Holcim in Lägerdorf, North Germany, in Schleswig-Holstein. The plant is scheduled to come on stream in 2028 and cut annual carbon dioxide emissions by around 1.2 million tons. Like I said, this is going to happen in 2028. Considering that global cement production accounts for around 7% of the world's CO2 emissions, you can see the enormous potential harbored by the carbon capture technology. This thyssenkrupp nucera, in which we hold a majority interest, is also developing in a very gratifying way.
The company's alkaline water electrolysis process is a proven and efficient solution for producing green hydrogen on an industrial scale. In order to continue expanding its market position as a technology leader, thyssenkrupp nucera has added the innovative solid oxide electrolyzer cell technology to its portfolio. Working in a strategic partnership with the Fraunhofer Institute, this highly efficient technology is to be developed to industrial maturity. The EU has just offered the prospect of funding up to 36 million EUR for this innovative project to produce green hydrogen.
Two weeks ago, thyssenkrupp nucera was also honored with a prestigious German sustainability award for its standardized 20-megawatt electrolysis module known as scalum. In May, energy company Cepsa, which will be renamed Moeve in the future, selected thyssenkrupp nucera as the preferred supplier for her 300-megawatt electrolysis plant for green hydrogen. Uhde is also well placed for the green transformation. The company is ready to satisfy the growing demand for clean ammonia, green methanol, sustainable aviation fuel, and carbon capture technologies. It is also developing carbon-free technologies such as ammonia cracking and biomass gasification.
Our bearings business, Rothe Erde, is currently facing a challenging wind power market in China. However, in the medium and long terms, we see great growth potential there. We are relying on innovation to enable us to grow our share of the pie in the future. For example, Rothe Erde is increasingly offering modular system solutions for the wind power industry, which help reduce the costs of constructing and transporting wind turbines and also cut the overall costs of the energy transition. As the CEO of thyssenkrupp Decarbon Technologies, I spend a lot of time traveling the world.
I meet customers, suppliers, and project partners. Almost all of them are facing the same challenges in connection with the transformation. thyssenkrupp is perceived as a reliable partner, as a technology group that delivers world-class solutions. Quite a few of my fellow CEOs envy me for Decarbon Technologies, a business with decades of experience combined with the technology leadership in relevant future-oriented areas and with technologies to make the world a better and more sustainable place. However, not everything at D ecarbon Technologies is running the way we would like.
We must significantly increase the profitability of our new segment as well, and we must bridge the gap caused by many customers still playing a waiting game. However, the market for green technologies will come, and then we will be there because we've done our homework. That is why we remain confident for Decarbon Technologies and will work as hard as we can to develop and strengthen the businesses. Performance portfolio and the green transformation, these make up the framework in the past fiscal year, and they will remain in place moving forward.
Fiscal year 2024 to 2025 will be a year of financial transition. In strategic terms, it will be the year of decisions. Let's look at the forecast. We cannot expect any tailwinds from the markets. The still difficult macroeconomic environment is shaping our outlook on the current fiscal year as well. We expect an increase in sales of between 0 and 3% and a stabilization in demand in the second half of the year. Adjusted EBIT, we are targeting an improvement of between EUR 600 million and EUR 1 billion. We are seeking to improve our net income to a figure of between EUR 100 million and EUR 500 million.
Free cash flow before M&A is likely to be in the range of negative EUR 400 million and negative EUR 200 million. The significant restructuring payments of around EUR 250 million that we have planned will also play a role here. This is what we mean by saying a year of transition. In the current fiscal year, we are facing a challenging market situation with increased payments for restructuring and investment. We are laying the foundation so that we can then move forward continuously towards a sustainable positive cash flow. APEX 2.0 will help us to achieve this.
With respect to our portfolio, we have initiated a year of decisions. We are preparing a spin-off for our marine business. At the same time, we are continuing our discussions with the German government about state participation. The Steel Executive Board will finalize its business plan. That is something we can build on. The next logical step would be a 50/50 joint venture with EPCG. We are also committed to focusing consistently on the opportunities presented by the green transformation. In addition to restructuring, we have already initiated.
We continue to invest consistently into thyssenkrupp Future with more than 3,900 employees in R&D. We are one of Germany's most research-focused technology companies. In the past fiscal year alone, we registered around 1,300 patents and utility models. That's 8% more than the year previously. Indeed, we have been honored for our work with the JUVE Award for the best in-house IP, beating a number of reputable competitors. Despite all the challenges, our spending on R&D in the past fiscal year was more or less level with the year before. We will not slacken in these efforts either.
Despite all the challenges and work in progress, we should not lose sight of the fact that there is a lot of future in thyssenkrupp. We have a very good technological basis and also a stable financial substance, and we have excellent employees. Let me close with an important message to our employees in particular. We in the Executive Board are very aware that we are demanding a great deal from the people at Thyssenkrupp with the transformation, not only in Steel Europe, but in all other segments as well. We greatly appreciate the commitmen t displayed by our colleagues.
And therefore, on behalf of the Executive Board, I would like to express my sincere thanks to all 98,000 employees worldwide for their hard work, for their great level of commitment, and the willingness to roll up their sleeves and help get Thyssenkrupp back on a sustainable and economically viable footing. As we all know, change requires dialogue if it is to be successful. Open and transparent communications with our employees is crucial in the committees with the employee representatives as a central element of our corporate culture and in the way we treat each other.
We are committed to what is standard practice here at Thyssenkrupp. Thank you, and we now look forward to your questions. Yeah, thank you, Mr. López, Mr. Schulte, for that which you have told us. Please, if you have a question, please raise your hand, and then I'll ask you to talk, speak, and so that everyone here can all hear you properly. Please activate the microphone, and when the microphone is green, you can activate it. And please remember to turn it off afterwards. I'd also ask you for a time reason to please keep your questions, number of questions just to two.
All journalists who are following this BPK on the live stream can also ask questions. Please also give a sign with your hand or on the chat, and that they will know. Please, those on the chat service, please also act accordingly. The first question, please, from Manager Magazin, Ms. Obiega. Thank you. Hello, everybody. A comment, first of all. I would be grateful if you didn't limit the number of questions per journalist, but I'll start with my first two questions. I'm sure we've got enough time for more questions.
The first question is, Mr. López, which businesses do you in particular intend to improve the sustainability of free cash flow in the future? And the second question, will you have a dividend again this year despite the annual net loss? So how do you intend to explain that next year when you have to shed staff and still spending money on dividends?
Thank you for the question. In terms of our goals, which we have for our individual businesses, it's also planned in the coming years how the cash flows develop. And we have also always ensured that all five segments can finance themselves independently and all have positive cash flows. They have to achieve their own cash flows. So our aim is to ensure that the strength of the segments is such that they can be self-financing and that they all have sustainable cash flows over time. Your second question on dividends, so why have we made this dividend proposal? There are two reasons for that. The shareholders are an important part of our stockholders.
They appreciate continuity, and that is why having the same dividend as last year is part of this continuity. Also, we want to send a signal of strength to the outside world, and we think we can afford this, and that is why we intend to pay out this dividend. The second part of your question, the main, can we do this? The free cash flow is important for us. We achieve more cash flows than in the past. On top of that, in order to pay out this dividend, this €0.15, we have over €100 million in free cash flow. I think we can afford this dividend.
The annual profit is very much affected by the transformation, but the main thing for the dividend is the free cash flow. Mr. Schulte has a question for Mr. López and a question for Mr. Schulte. You said that the green transformation is also happening in the steel industry, but you also said that hydrogen infrastructure is also stuttering. So maybe the cat is biting himself in the tail. Many people in the region are depending on you whether thyssenkrupp as a major buyer for hydrogen will actually fulfill that role. My question: you said in your talk that you intend to build this major plant and that you are in favor of the green transformation.
Do you also say that you will complete that first plant in Duisburg as planned? And the second question for Mr. Schulte, the reduction in value of steel. And you mentioned expected losses in terms of income. And also you mentioned the Trump election in the USA and that the tariffs will be built. And so are we expecting corrections in the next months and the time ahead? Yeah, thank you, Mr. Schulte, for your question. The green transformation is something which cannot be changed, not moved. And as I have emphasized, we are absolutely dedicated and behind this green transformation.
What we have to discuss today is how competitive prices are currently of the various molecules and how can we bridge the gap. We have to see that the DRI plant has to be profitable. And we have to. We're in intensive discussions with the BMWK in order to see how the next steps take place. Let me also tell you that last week I was with some partners in Spain, also one of the companies that is involved in one of the leading partners in producing the partner in H2Med. There's no positive news here that the five companies will be meeting soon and talks are taking place within regions.
Because what we need is a clear timeline for the production of pipelines. We can't. It's an uncertain future as to the pipelines. The pipelines are the key, the basis for an efficient transport of the hydrogen gas. And so we have to make sure that we have clarity for the sufficient transportation mode. And so if we have a timeline there, then we can act accordingly. All other transport routes are feasible, but don't offer the same industrial scale. So that is what we're working on right now, having efficient transport structures and infrastructure, which means we can also transport green hydrogen efficiently and effectively and economically.
And we intend to do that, but what we need right now are clear dates, a clear timeline when the individual elements are available, and then we can buy in our green hydrogen. We are definitely and absolutely dedicated to this and to this further evolution development, but we do need to have the details in place. Your second question about the steel impairment, I would like to look back by saying, how did the situation take place? First, the macroeconomic environment of the steel sector and the way it's developed, but also simply the business plan.
We need a public business plan, and so that has been part of the impairment. You mentioned Trump's election. That has nothing to do with that impairment as such, but the steel business does actually gain less than 10% of its turnover in the US states. It's not that crucial for that sector. The second part of your question, what do we expect in the future? Until the 30th of September, we'll have written off everything we can in steel. So as long as it's part of the group, we can do our write-downs. And so as of 30/9, there is no more potential in that, but we are still investing in the business.
And so it's still technically possible that an impairment might take place in the future, but that will probably be minor amounts.
Mrs. Becker from Börsen-Zeitung, you had a couple of questions. Yeah, you're here virtually with us. Thank you. Ich würde gerne anknüpfen an das Thema der Steuerung in der Stahlsektor aspect of writing off in the steel business. Well, you had value corrections to the tune of EUR 3 billion in the past. Now, on the 30th of September, book value EUR 3.6 billion. So I have to subtract the corrections from this book value. And then, Mr. López, you just confirmed the future, but you didn't say up until when. I thought it was to be for 2024, 2025, which according to your forecast is impossible at all anyhow.
So when do you actually think you will attain those midterm objectives? Thank you very much, Ms. Becker. I'll start off with the first question. Like you said, last year it was EUR 3.6 billion for steel, and this year's assumption is EUR 2.4 billion. So in fact, you can actually one to one, you can just simply subtract it from there. Now, as to the midterm objectives, okay, well, I'll start off with them just to put it in order. So what are these midterm forecasts? Well, we said three to five years.
Okay, lots of things have happened. You know, you have war in Ukraine, the problems in the Middle East, the transformation issues also here with us. So therefore, in the past fiscal year, we haven't really attained much progress. But if you look into the individual segments, marine systems, for example, it's their 4%. I mean, these 4%, you know, they're made up of the individual segments. So marine systems is on track, and for the beginning fiscal year, we are in good spirits that also materials services will reach that aim. If the other segments are able to reach that, we'll have to see and look to what extent they can perform properly.
We don't want to give you a real timeline now, but as you see, we're taking it step by step. So in the next couple of years, I think we should be here. Yeah, sorry, but I need to come back to that. The circumstances that you just mentioned, I mean, they have been around since 2021. I mean, when you started Apex, they were known at the time, were they not? Yet you decided on churning out this midterm forecast.
You're right. Well, there's a couple of other transformational aspects. Large client industries are basically suffering right now. They're hemorrhaging, especially the automotive industry and the AT segment. Their capital market goals cannot be reached. We're still pretty good benchmarking. If you look at other tier one suppliers, we're still faring quite well. But yet, you're right, we have not reached the original objective. But we didn't know that last year. With the other factors, you're right, that was true since 2021, but not the automotive downfall. Mr. Müller-Arnold from Spiegel.
You said apparently there's some audio issues. When it comes to hydrogen, you said that the pipeline is the only efficient way of transporting hydrogen. For the steel industry, there is still the other possibility that you say, let's just import the pre-product and then we will actually make this hydrogen here in Germany. Do you see that as a chance or is it actually that you want to have a pipeline and they simply want to import the finished product? Okay, at the moment, the DRI plants here in Germany, so that we need hydrogen. Hydrogen in a qualitatively very good form.
The other possibilities at the moment are not feasible. If we want to have a competitive business with hydrogen, we need the finished product, and the finished product has to get here by pipeline. There's no way around that, and we need clarity on that from the government. So I want to know when the pipeline is finished and when we can start to use it. Mrs. Bös, your question, please. Yeah, I would like to come back to the DRI plant. Can you tell me how many subsidies you got from the state? You mentioned them. And what the further development is, and what do you think is going to happen with the government now that the government in Berlin is basically finished?
Do you think that they will stick to their commitments? Well, I think the DRI plant, that's a question of organization. In the dialogue with BMWK, it was a question of what kind of gas we use at what point of time. And we need competitive options. Apart from that, there are no further discussions in this context with our plant there. Coming to the next one, the overall situation, well, we received EUR 700 million as a subsidy of the EUR 2 billion that in total were dished out. We got a chunk of EUR 700 million. Yes, I also want to come to that plant, the hydrogen plant.
You mentioned some risk of additional costs. Do you have an idea how expensive exactly it is going to be? And then will there be a second plant? I mean, that was initially the idea that you were going to build two plants of these back so that in 2030 we have the second one already finished. Is that still feasible? Can it be done from now until 2030? And you're talking about divesting the steel segment or sell it. I mean, what is the message that you can give to the employees? With HKM, we are driving the process of the construction of the plant. That's our first aim.
And we think that this is the best solution now as to the DRI plant. I think also in my presentation, it was fairly clear that this is a pioneering project. We are precursors here. So there has never been a plant of that nature in Germany and also in that dimension. And therefore, sure, we have to assess the investment and see how far we get with that. And there are obviously different views and deviations from those figures. But the more important aspect is the discussion of the OpEx, of the operational expenses, the current expenses, what I mentioned earlier, gas versus hydrogen, which, of course, needs to be seen in conjunction with competitive pricing.
For us, of course, we have to have that overall discussion, but specifically the discussion on our operating expenses, because that has been much too high over decades in the past, and so the next plant, the second plant, I think I would like to have the first one finished and up and running before we speculate on building a further plant, and we're focused really on putting into practice the first one, the project of the first one. Mr. Finken, please. Yeah, thank you very much. What can it be? It's the DRI plant. I would like to know, if I understood it right, that you think that it's the pipeline, which is sort of the determining factor or critical point.
But you're not so worried as to the question if in Spain or in Sweden, up until then, we will have the electrolyzer built there so that we can carry out the process of electrolysis. So doing it ourselves here up until the end of this decade, I think that's a tough one. All right, but the second question is this: we discussed this with the Ministry of the Economy because we wanted to have the expenses right. Back then, it was the plan to completely convert to hydrogen. Can you give us a feeling as to what kind of switch in strategy there may be that instead of the green one, you may use the blue one, perhaps? And is it that the Ministry of the Economy is in a position to change any of this? Because most of that is actually headed out of Brussels, isn't it?
First of all, you're right. It is a collaboration between us, Berlin, and Brussels. That is true. Because these subsidies were agreed in talks between Brussels and Berlin. As to the point of time, well, it depends on when we have competitive prices for green hydrogen. And that again depends on the pipeline. We have to take that bit by bit, step by step. When we know that the pipeline is ready, that is the only efficient means of transportation. Then we look at the quantities: 140,000 tons per year is what we need every year. We need to buy that every year. And the very moment we have a date for the completion of the pipeline, we can then ask who can manufacture that, to what extent.
The manufacturers are waiting, are waiting for us to ask them about the quantities because they also need the certainty. Once we have the dates right, then the rest will be handled speedily, and we will be able to purchase the hydrogen that is required. Mr. Köckenhoff, did I see that right? You had raised your hand. Two questions. No, maybe only one. What do you think about the consolidation of the steel industry in Europe per se? Is that any of your options here? Yeah, I'll just take this. I think everybody knows that consolidating this industry is something that is overdue. We know that many of our competitors, in parts, or sometimes completely, are in the hands of their governments.
So we think that also with Berlin, we have to discuss a possible partnership with the government that they actually purchase a part of the steel branch. So we have to see that there. When I say steel consolidation, that is a very important and very big question for Europe. I can give you our view on it. Well, we think that we ourselves have to be profitable. We are the biggest manufacturer in Germany, and it is our strength that has to give us our profitability so that we remain the number one supplier of steel in Europe. And in the long term, we must be able to finance ourselves.
That is our way of doing it. And we don't think we have to take that detour through a partial or complete consolidation of the steel industry. We think that we can stand on our own feet. We want to be independent. That's our aim. This is Piediger. You asked a question. Yes. Talking about the plant now, the DRI plant, where are we at there exactly? Where are the discussions? You said that free cash flow this year is positive because some customers have made down payments, and therefore probably next year it's going to be negative. Did I get that right? Yeah, maybe I start off with a free cash flow question.
Free cash flow, indeed. We had churned out a guidance plus 100. The delta, if you take that out, the payment from marine systems, then you're right in your assumption that this is something that has simply moved from one year to the other. This was then part of the old fiscal year. That's why it looks so good. But it's actually the down payment in marine systems. We said that we assume free cash flows this year of minus EUR 400 million to minus EUR 200 million because of the restructuring payments of about EUR 270 million. And what is important here is when you look at the free cash flow after the M&A, this negative free cash flow is then compensated by the purchase of our Indian branch.
And so that's EUR 440 million there all in all. So the free cash flow after M&A will then come out to be positive. But right now, you're definitely right. It's still negative. Now, to your question, our cooperation with SMS, well, we're discussing things with them. We're having negotiations, and we want to build this plant together. And we will. And we will. Mr. Steitz, right? Yes. You're getting your microphone. Yeah, thank you. One question to you, Mr. López. US and Trump election. Maybe you can explain to us how you see the risk of additional import tariffs.
What would that mean for your strategy in the States? You have local activities in the US. I would like to know if you are planning ahead and perhaps have already adopted certain initiatives. And maybe you, Mr. Schulte, the APEX savings program, EUR 2.1 billion, apparently is not enough. Okay, so what is enough? What is enough? And maybe you can give me a key figure on that. I think it's a bit vague the way you answered that question. Figures, please. Give me numbers. Yeah, I'll start with APEX to explain the figures. I said we had undertaken measures with a volume affecting the result of EUR 1.2 billion. EUR 1.2 billion of those are due to last year's EUR 0.9 million through the current fiscal year.
In order to, if you bear that relationship in mind, we had to do these measures in order to balance the negative market effect in terms of sales, 7% down, absolute figures, EUR 2.5 billion. So that's also taken quite some figures out of the company. And cost increases have also taken place. And that's why we had to undertake the APEX measures. And that has the overall effect of stabilizing figures at last year's figures. During this fiscal year, EUR 0.9 billion over. And we think we will need that in order to balance the negative market effects. And what we're looking at now is to focus more on structural issues.
Structural measures obviously include restructuring, but also improving service aspects, pricing initiatives, those purchasing initiatives, etc. And so if you're talking about last year to this year, we're talking about the scale of about EUR 500 million. That's the kind of range we're looking at in order to achieve our targets for this year. So it's easy to understand, pretty simple to understand, and what the effects have been. And so we need a tiny little bit extra in order to develop as planned. As to your question about the impact of the American election, we had, of course, discussed this at an executive level, obviously, and determined, decided that we don't expect any major changes, either Harris or Trump.
We don't expect major different effects. With respect to individual businesses, automotive supply, we tend to be local for local. And so that means we have clear intentions to grow in the United States. And we're also active in Mexico as well, also in terms of suppliers to the US. And that is a standard business model, obviously. In terms of Materials Services in the US, we are very strong there. It is one of our core markets, and we intend to improve there as well and to continue with our local for local model. So that won't be highly impacted by any tariffs on imports.
And so we don't expect negative impacts from that. In terms of steel, there are few points of contact. Really, it's obviously nothing we can neglect. But the big picture of thyssenkrupp, but it can be in terms of Decarbon Technologies, I had the chance to discuss with lots of customers and partners in the last few weeks. What we see there is that many of the projects are coming alive, but some have been waiting for final provisions in Japan, for example, with the Energy Ministry or in Korea, and that any action will depend there how soon the clean technologies become profitable.
We have received subsidies for our companies. Cepsa, as you said, we're reading about that in the media. That is also positive. To conclude this response in Marine Systems, the US equips its own naval forces. We don't sell that much to the United States of America. The positive aspect is that the pressure on the European Union, on the member states of the EU, will increase because of the pressure acting on members. We're talking about 2% or 3% for defense spending in Europe and European companies. This increase will have an impact in Europe.
So I think it's time Europe has to go up, basically. So overall, we see not major changes between Harris or Trump. In individual businesses, we have a clear standing. And in Marine Systems, because of that we expect many changes there because of increased defense spending. There are three more questions. Good morning. thyssenkrupp Steel Europe is a big player in terms of long-term contracts with the automotive and other large industries. So my question would be, in the past, you've also talked about your share in long-term business.
What is that compared with spot contracts? Is it 50%? Is it more? Second question would be, could it be that the share won't be as high this year because automotive is no longer acting in the long-term with long-term contracts? Is that affecting you? And what about negotiations? Are they underway? How are they developing? Are they being concluded? Well, first of all, let me respond to your question. Yes, you are right. In terms of Steel Europe, automotive manufacturers, there are normally annual contracts. They now account for 40 to 50% of the automotive share of the volume in steel.
And they are normally subject to. They're normally negotiated early in the year. And so we would be approaching those kind of negotiations right now. In terms of volume development, there are issues which we are very much observing and also working together with customers. Talks are planned. Haven't taken place yet. We expect input from the manufacturers. And in the next weeks, months, that is what will be taking place. Ms. Henning also has a question. Good morning. I hope you can hear me. I've got three very small questions. Is that right? The dividend will be paid from your substance, HKM.
The decision is to take place by the end of the year. Will you manage that, or will you close by the end of early next year? In terms of saving and shedding jobs in steel, there are 10,000 jobs which IGM thinks you wish to get rid of. When will we have clarity in terms of steel? And when will those 10,000 jobs be referred to in the business plan? I'll start with your dividend question. The dividend will be financed from cash flow, not from substance. But you are right that the annual profit of the TKAG will not be sufficient for the dividend. But that is not so much dependent upon business development, but internal accounting. And so in terms of that, part of the profit provisions will have to be used for paying the dividend.
But the main point is in terms that we have a free cash flow which is sufficient to cover our dividend expenses. But that only because of this trick from one year to the next. But it's not a trick. We are happy that we have access to these figures. Yes, we discussed this quite often. The customer payment arrived because there was a prepayment because there was a it was paid because the milestone was reached early. And in accordance with the payment plan, that prepayment was made. If you look at the free cash flow, you will always see developments like this.
And in the end, it is the EBIT that is important. And I think we have been pretty profitable. So the prepayment was due to new contract, but would be because we haven't done anything. We ended up getting money for nothing. But we had achieved a milestone, and that's why the money was paid earlier. So it's not quite the picture you painted. So it's definitely not a trick. The money arrived, and it was due. And obviously, we can spend it. Yes. We are in negotiating with CCP in terms of HKM. And as I said, that is our preferred solution. I think it makes sense for all concerned.
And we assume that in the next couple of months, a decision will be reached in this connection. So you can also see that the business plan for steel. I reported that the new team is looking at the business plan for steel. And it won't take that long before that plan is reached. So we're talking one to two months, and then we'll have the plan there. And then we will have clarity in terms of steel too. And the 10,000 jobs, we will then see what the situation is. As soon as we have the plan, that is part of the plan, obviously. Thank you very much. Mr. Meinker said he had a question.
Question about steel, maybe. You talked about the location. The site structures has to be adjusted. How can that be seen? Does that mean sites are being considered for closure, or what do you mean? And is there a plan B for steel? Mr. Schulte mentioned or intimated something like that. What would plan B be? I think those are the main questions. Oh, and I did have one. In fact, lots have happened in terms of employees. There have been major meetings. There have been arguments.
Things have calmed down recently do you intend to contact the employees, or is this conflict still bubbling under, or is it unavoidable because at the moment, nothing else is possible? Let me talk about plan B for a second. I mentioned that once in an interview. Let's go back two steps. At the moment, talks are currently running well with EPC, so it won't be necessary to have a second plan for that. Even if that were necessary next year, something we don't anticipate right now. So there would be a number of options available. For example, Mr. Kretinsky could say as over 10% as a strong shareholder.
The important thing in all cases, and I think that what I meant with plan B, if steel does become self-reliant, then there would be various variations and options available that could, for example, be with other partners. That's what I meant. There's not a concrete plan B, a plan B. In terms of the business plan, obviously, all parameters will be looked at, obviously. So I am assuming that the optimization of all sites will be part of that plan, but I'm not aware of any intentions with respect to plant or site closures. As to your question about cooperation with employee representatives, I think we continue, as we have done in the past, in all the committees.
We work very closely with one another in a very trustworthy and trusting way, and we try and achieve solutions in all cases. So our cooperation is part of our daily business, and it's always been the case. And so I'm very optimistic that that will continue to be the case. I just want to say we are slowly coming to the end of our press conference. Ms. Birth also said she had a question. I've got a question about your business plan. You just said that you expect completion in the next one to two months. Does that also mean that results from restructuring reports you expected?
Does that mean that those expert opinions are expected first before results arrive? Or let me start a report that give you a timeline on those reports. There are two expert reports. One is over one to two years, and there's also a second one about future business plans. Currently, this first report is we're quite well advanced on that, and we expect to have that completed by the end of this calendar year. We are restructuring financial solutions for that to bring that to an end. In parallel to that, as Miguel said, there is work taking place on the business plan.
As soon as that plan is ready, then that's when the other export report will be prepared based on the business plan. That is the timeline we're talking about there. So since there are no more questions or hands raised, then let me move on and say, ladies and gentlemen, let us close this year's annual press conference. Thank you for taking part. Thank you for your questions. And also to the whole team at the executive board for your answers. You are kindly invited to take. There is some lunch available in the foyer, so please have a great day. Get home healthily, and thank you and goodbye from here in Hessen.