Dear ladies and gentlemen, welcome to the conference call of thyssenkrupp. At our customer's request, this conference will be recorded. As a reminder, all participants will be in listen-only mode. After the presentation, there will be an opportunity to ask questions. If any participant has specifically [audio distortion] the conference please press star key followed by [audio distortion] for operator assistance. May I now hand you over to Claus Ehrenbeck, who will lead you through this conference. Please go ahead.
Yeah. Thank you very much, operator. Hello, everybody. Also, on behalf of the entire team, I would like to welcome you to our conference call today. The conference call will be on Q4 numbers, fiscal year numbers, of course, the outlook for 2021. We will also have a section in our presentation in which we will go through the value levers that our businesses have identified to drive the structural improvements going forward. The presentation will be held and the conference call will be hosted, of course, by our CEO, Martina Merz, and our CFO, Klaus Keysberg. Both will share the presentation and all the documents for this conference call you can find on the IR section on our website. With that, I would like to hand over to Martina to start with the presentation. Martina.
Thanks, Claus. Hey, all. Martina speaking. First, thank you for your participation in the call today. We'll be leading you through the presentation, which is a rather long one today, and I'm looking very much forward to having a good discussion afterwards. First, with the presentation, we want to provide a recap what we've accomplished in the last 12 months. First and foremost, and by far the biggest step in the strategic realignment of the group, was at the beginning of the year, the sale of the Elevator Technology business, which we closed successfully on July 31st. This has, of course, transformed our balance sheet substantially and turned our net debt to a net cash position of EUR 5.1 billion. In addition, we significantly increased our equity up to more than EUR 10 billion. With this, we paved the path, the way, for more restructuring and business development going forward.
I can ensure you that we continue to focus all our energies on substantially improving the performance of our business. Moreover, realizing the best owner concept for our earmarked businesses is also progressing. As you are all aware of, we received non-binding offer from Liberty Steel for Steel Europe, which we are examining at the moment with an open mind, of course, and we are ensuring we achieve, at the end of this process, the best possible result for all stakeholders. That means we continue to explore options for an industry consolidation. We narrowed already the range of options, and at the end of the day, we believe that we can come to a final decision in spring 2021. For Plant Technology, we received indicative offers for different constellations. The due diligence is almost complete, particularly for mining and cement.
It's a bit different, I would say, it's different for the chemical business, as we've observed in the last month, very strong dynamics in the market for hydrogen technologies, which we have not seen before being this strong. Yes, now consequently, we are currently examining how we can strengthen our fundamentally strong starting position in this growing market through partnerships. I think I can go a step further by saying we believe that in the part of hydrogen technologies we are in, I think we have a very strong competitive position in large scale water electrolysis plants. For AST, our stainless steel operations in Italy, we have been approached by numerous parties. This does not come as a surprise to us because the business is well-positioned. Nevertheless, for AST, it is far too early to draw concrete conclusions.
Together with an investment bank, of course, we will thoroughly evaluate the expressions of interest received. On top of that, we are also making visible progress in restructuring of our business. Last year, throughout the entire organization, we reduced personnel by more than 5,700 FTEs. To cope with long-term market developments and the effect of the pandemic, we have accelerated our initiatives and thus ended our restructuring target now in the next step from 6,000 FTEs to 11,000 FTEs. Besides our restructuring and portfolio initiatives, enhancing performance is the essential part of our new group of company concepts. Together with our businesses, we defined value levers, which Klaus will later on lead you through in detail. Also, of course, we defined then together with the businesses, structural improvements, fiscal year going on and beyond.
We will provide you more details on that in the second half, as said in the presentation. All of this said pays into our performance in this fiscal year and beyond. It reflects a step up in our operational performance on the back of the execution of our value levers. Also, it reflects a slight, of course, a market recovery. Alongside, we will leverage our leading steelmaking expertise for ultimately working towards climate neutrality and green steel offerings with our strong concept, tkH2Steel , and water, and H2 electrolysis. On the next slide, it's a little bit complicated, but actually the slide you should see in front of you now, these four phases, this is actually our transformation plan, which we follow very stringently and disciplined.
With this plan, we have a plan how to make thyssenkrupp ready for the future. We use, of course, this plan constantly for internal and external communications. Let me illustrate now what this sideways U, as we call it, what this means in detail. We divided our transformation into four phases. In the first phase, which we called Fight, we dealt in particular with the impact of the coronavirus pandemic. We sold in a consequent, the Elevators business, as a prerequisite for everything to come. In the second phase, Focus, we are now restructuring our portfolio. We made fundamental decisions, as said before, with the announcement of our new target portfolio in May. We are on the way to implement this portfolio structure, which will make our company smaller but more profitable.
In addition, of course, with this focus, we can much more disciplined allocate our capital, to promising businesses generating value going forward. In the third phase, which we consider, we are on the way to this phase now. The third phase, Improve, will run in part in parallel now, which is about increasing competitiveness in all areas, regardless of whether we intend to develop the businesses as part of the group or not. The restructurings we have initiated and in part already implemented, as well as our value levers, are an example of this. Let me say a few things in more detail. Of course, leadership makes in such a turnaround, the difference. In this first part, of course, in a leadership approach, it means that we try and we are working on beating the odds. We uniquely and ambitiously reframe what it means to win.
We make multiples, we are making really multiple bold moves early and methodologically in this focus step. We reallocate constantly, frequently to focus our resources on priorities. Leadership, as said, is absolutely key in this phase we are in. After all, once we have achieved our path to competitiveness, of course, after that then, we can start about the process to scale the business up. That requires having competitive businesses, in order to achieve profitable growth again. Size in itself, is not a relevant measure for us. It's the profitability, of course, and the cash and value generation of the company.
As you can imagine, the phases mentioned will not necessarily run sequentially, as our businesses, our business segments are different and the phases they are in, of course, are different with that, too. One thing is clear, we will make further substantial progress along the curve over the next 12 months. We all know, let me mention this at this point, too. Of course, the question can be centered on the long-term "why" for thyssenkrupp. Everybody's asking for that. We believe, I believe, it's very important for the organization to clearly focus on delivering a positive free cash flow at this point in time and not using too much resources for thinking beyond.
That's our clear priority, and this is why you do not hear us talking constantly about this long-term "why." We want our people to understand that we have a clear priority at this moment in time. This is to optimize all that we are doing towards profitability and positive free cash flow. We really focus fundamentally and with all we can, our resources, on turning the company around. Once we are through this part of the process, of course, is that everybody in this market is well aware that thyssenkrupp has, from its technological capabilities, everything needed to scale up the businesses. At that moment, once we are there with our competitiveness, we are totally committed, of course, to making a positive big picture impact. Then we would prioritize, of course, our internal resources towards profitable growth again.
At this point in time, we believe it's about beating the odds. Now we can be a little bit quicker. You saw the documents talking about on the next page, in order to make a difference on the leadership of the company, of course, we formed below the executive board, an executive company to drive the transition from a centralized group to a powerful group of companies. I think you read it yourself. I will not lead you through the details. I think it speaks for itself. What's very important to us here is we, of course, have a comprehensive multi-year agenda. We want the CEOs of our units that they own the total company performance of their group company, and we expect an experience in transforming their business and a relentless focus on priorities in leading the company assets back to value generation.
With this, we come to the implementation of our initiatives. This is then, Klaus, your part of the story.
Okay.
Thank you.
Thank you, Martina. Let's have a closer look at the milestones that we have achieved and the restructuring completed or initiated in the past fiscal year. When we started the transformation, we said that we will turn around every single stone in our company, and as you can see with the numerous initiatives across all segments, we kept our word. About a year ago, we initiated restructuring at System Engineering, involving 550 FTEs. With the market situation in Automotive System Engineering remaining extremely challenging, further restructuring was needed. We recently commenced the operational realignment, splitting the businesses into two independent companies for body and powertrain and bringing structures and administrative costs in both parts businesses in line with market levels, resulting in additional restructuring of around 800 jobs in the current fiscal year.
Moreover, with the presentation of the Steel Strategy 20-30 in March, we announced cost reductions and job cuts of 3,000 jobs, and of which 1,000 will already be achieved until the end of 2020. This was followed by an extensive restructuring plan for the German springs and stabilizer sites. Under the plan, around 400 jobs will be impacted by closure of Olpe by the end of 2021 and streamlining of the Hagen site in Hagen. At corporate headquarters, restructuring also progressed as planned. As of April 1st, around 200 FTEs decided to join a transfer company or leave directly, bringing us closer to our target of a lean holding. One of the last announcements in August affected adjustments in our cement business, including the reduction of 460 FTEs worldwide.
Despite the substantial programs that are finished, underway, or announced, all of our businesses will have to accelerate their initiatives going forward. Consequently, we increased the previously announced target of 6,000 FTEs to 11,000 FTEs to be accomplished by fiscal year 2022/23. Another important step was the introduction of our group of companies concept in May, sharpening our target portfolio with a clear focus on industrial logic, competitive profitability, and cash flow. We also announced the newly created Multi Tracks segment, including businesses for which we see no substantial future prospects within the group, who might do better in partnerships, or for which closure might be the best solution. Multi Tracks will also be an entity for managing our investments in businesses such as our stake in our former Elevator Technology.
Last but not least, a big step was the termination of our disproportionate balance sheet, debt-driven net working capital measures towards an ongoing continuous management, which is an essential contribution to turn around our cash flow. As already said, we only accept targets from our businesses if there is a consistent and solid concept behind. In the past 12 months, we already cut some 3,600 jobs in the previous fiscal year in our existing restructuring framework. There are roughly 1,600 jobs in Germany and around 2,000 jobs in the rest of the world. In fact, we have actually gone further as of September 30th, a total of 5,700 employees are no longer on our payroll compared to the previous year. In simple math, we will have to cut another 7,400 more jobs over the next three years to reach our new target of 11,000 FTEs by 2022/2023.
With the majority, of course, specifically 5,200 FTEs in Germany and the remaining 2,100 in the rest of the world. While at first we have to incur the cost of payouts, this will ultimately support our performance through sustainable savings, ramping up from a high two-digit million euro amount in the past year to a low to mid-three digit euro amount in the current fiscal year and in the total a mid to high three-digit million euro until fiscal year 2020. Again, let me be clear. The target of 11,000 employees is only a snapshot from today's perspective, heavily depending on our further course of businesses. Hence, this figure can also change upwards. This is the largest restructuring process and the largest planned reduction in the number of employees since thyssenkrupp was founded. We will work permanently on further measures and also add them during the year if necessary.
Coming to the financials for recent fiscal year of our continued operations. Unsurprisingly, the pandemic had a clear impact on the top line, especially pronounced in absolute terms at our Materials Services as well as on our Automotive Technology business. However, we see indications for an ongoing demand recovery, especially from the automotive side, giving us reasons to be cautiously confident. Q4 already showed sequential improvements at almost all businesses, which is very likely to continue in fiscal Q1. Unfortunately, this is not reflected in last year's bottom line, with EBIT adjusted significantly weaker year-on-year despite extensive measures to reduce costs and safeguard our business, including short-term working. With slower development prevalent in the Materials Services and Automotive Technology businesses and the beginning of the fiscal year, the impact of the pandemic on demand and capacity utilization additionally burdened. Added to this were the structural changes in the steel sector.
To quantify this, Steel Europe ex Heavy Plate accounted for EUR 820 million EBIT adjusted loss in fiscal year 2019/2020, while the new created Multi Tracks segment added a further EUR 593 million EBIT adjusted losses. Consequently, free cash flow before M&A was sharply down year-on-year. Besides the operating performance, the normalization of the net working capital up to EUR 3 billion, as well as the cartel fine at Steel Europe, weighed down.
Steel Europe and Multi Tracks were the largest drags, with together EUR 2.5 billion negative business cash flow in the past 12 months. Here you can see where our problems lie. With that, let us have a look at the development of our balance sheet that experienced a strong push by the realized value of proceeds of the elevator sale by far outweighing the loss incurred by our continuing operations. Thus, net income for the full group jumped to EUR 9.6 billion.
The continuing operations were, besides the operating performance, heavily influenced by provisions for restructuring. In addition, we took risk out of our balance sheet through asset and goodwill impairments amounting to roughly EUR 3 billion, especially pronounced at Steel Europe and Automotive Technology, considering a potentially slower than so far anticipated development in the auto sector. At year-end, our equity stood at more than EUR 10 billion, which now is more than ever important, resulting in an equity ratio of 28%, up from 6% 12 months earlier. At the same time, the cash inflow from the transaction turned our net debt to a net cash position of EUR 5.1 billion, providing us a decent safety cushion and will be an enabler for our operational and portfolio restructuring, aiming at returning thyssenkrupp to sustainable positive financials KPIs. Looking at our operational performance in more detail, especially in Q4.
As the automotive production was restarted in many countries towards the end of third quarter, the fourth quarter saw sharp quarter-on-quarter growth in order volumes, thanks partly to state stimulus packages and other initiatives and other incentives. Consequently, EBIT adjusted the Automotive Technology marked a gradual improvement quarter-on-quarter at almost all businesses. We also saw some one-timer, which negatively impacted the results of Automotive Technology. However, springs and stabilizers and System Engineering were still significantly negative. Industrial Components delivered a positive earnings contribution, yet lower quarter-on-quarter. While components for heavy-duty engines increased their EBIT adjusted significantly by recovering sales, earnings and Bearings were temporarily slightly low, but on a high level. EBIT adjusted and Plant Technology came in stable quarter-on-quarter, remaining negative on the back of lower utilization and ongoing construction site costs that couldn't be charged to customers.
We see improvement year-over-year since the robust service business and stringent G&A cost reductions are bearing fruit. Marine Systems came in positive and up year-over-year as well as quarter-on-quarter, as efficiency measures and cost reduction in project execution continued to take effect. Earnings continued to be held back by low margins on older projects built. In line with recovering markets, Materials Services saw an increase in its main product groups quarter-on-quarter, with significant higher warehousing shipments, especially at auto-related service centers in both regions, Europe and North America. Utilization at the mix remained below prior year level, with respective effect on margin. At Steel Europe, we saw stabilizing market prices the fourth quarter, while shipments were significantly higher quarter-on-quarter on the back of an improved utilization and better product mix.
EBIT adjusted improved quarter-on-quarter, yet remained negative and lower year-on-year. Last but not least, costs of the corporate headquarter were stable quarter-on-quarter, but with significant improvement year-on-year, mainly due to lower G&A costs. With the pandemic still dominating and implications and durations of the second wave still uncertain, forecasts for global economic growth and the impact on our business, particularly materials and components for cars and trucks, are still subject to major uncertainties. For fiscal year 2021, we expect sales growth in the low to mid-single-digit percentage range, well below the pre-pandemic level. Our expectations are, of course, dependent on the recovery of the global automotive market. To make it clear, with this level we anticipate for 2021, we are more than 10% below pre-corona level.
EBIT adjusted is expected to improve significantly, with structural advances being by far the biggest driver, additionally supported by sales growth on the back of the recovering markets, and as I explained before, with the assumptions I just made before regarding the top-line development. All businesses are expected to contribute positively, with the exception of Steel Europe and Multi Tracks keeping the group's EBIT adjusted in the mid three-digit million euro range negative.
Across all of our businesses, the strongest driver for the envisaged upside for 2021 and beyond are the value levers that the leadership teams of our businesses developed and committed to. These value levers are aiming at pushing bottom line as well as top line, in addition to the expected recovery of our markets. A summary of these levers are exhibited on the right side of the slide. We will walk you through each segment in a minute.
Before that, I would like to touch free cash flow before M&A, which is expected to be significantly better, but still negative in a range around EUR 1.5 billion. Determined, of course, by the step-up in operational performance in all segments and the elimination of the burden from normalization of working capital as well as the fine in the antitrust proceedings, ongoing payments for restructuring, and depending on the payment profile from incoming orders as well as milestone achievement in the project at Marine Systems and Plant Technology, and considering higher payouts for restructuring, as already shown before. Important to mention here also is that as of October 1st, we tightened our guideline for the recognition of special items by aligning it more closely with IFRS rules, it will be more conservative split to make here adjustments to the EBIT.
Now, let us have a closer look together at our segments and how they will drive the upside going forward. Here on this slide, just for your reference, you can see how we transitioned our portfolio into the new group of company structure, which will also be our reporting structure for the current fiscal year start. Let's start with Materials Services, which will return to positive territory in the current fiscal year. For the segment, excluding AST and some other small companies, infrastructure, we expect EBIT adjusted to improve to a mid to low two-digit million euro range on the back of tailwinds from market, meaning higher volumes, albeit from a low level and not yet returning to the pre-corona crisis. To be more precise, Auto Materials Services with this assumption of top line will be more than 10% below pre-corona level. The largest contribution will come from structural improvements.
For example, we will drive G&A efficiency along the value chain by optimization of our footprint and logistic concept. In addition, we want to further reduce complexity by streamlining our portfolio and closure of sites. In order to push the top line, we will roll out sales initiatives with materials processing offerings, aiming at becoming a more service-focused business. Especially our new growth strategy, Materials as a Service, will provide us with additional revenue streams bearing higher margins and lower volatility. That's why we also target small-scale M&A activities in the North, the attractive North American market where customers clearly recognize and appreciate the extra value from our processing or supply chain management offerings. Nevertheless, our traditional materials warehousing and distribution activities will always be a substantial element of our business model.
Overall, having all these measures in place makes us very confident for the new fiscal year. As always, if market turns more dynamic, we will see what happens. Industrial Components. At Industrial Components, we want to foster our leading market positions on the back of an efficient cost base on the one hand, and with the support of a robust growth for our markets. For the current fiscal year, we expect a slight increase in earnings, coming mainly from the significant improvement of our Forged Technologies business and also from the stable and high contribution of our Bearings business. Industrial Components is expected to grow slowly but steadily, mainly driven by three markets. First, the wind energy sector, which shows promising growth potential longer term. We will see a temporary slowdown in 2021 as a result of pull-forward effects in China from expiring subsidies.
Second, the auto market, which is expected to recover significantly, however, not yet back to pre-pandemic levels. Last but not least, the market for construction machinery, which probably remains stable globally. The only exception being China expected to grow. Besides the potential from the, by nature, uncontrollable market, Industrial Components will work on the controllable internal drivers such as offering an improved product mix and new products and services. For instance, at Bearings, by extending our existing production lines mainly in low and best-cost countries, and continually improving our products together with our customers and at our Forged business by catching additional market share with the introduction of new services line for undercarriage components or with our new and powertrain-independent products for trucks, the front axle.
Industrial Components leadership teams are fully committed to continue their path of constant and consequent cost control over the next years by improving everyone's productivity and therefore reducing personal costs, which also includes restructuring programs, optimizing production costs and operations with a deep bottlenecking or reducing purchasing cost by securing flexibility via multiple suppliers. Let's turn to our Automotive Components business, Automotive Technology, which is now operating in a new setup, excluding the springs and stabilizers, as well as the powertrain and battery solution businesses from the former System Engineering business, which moved to the Multi Tracks segment beginning October 1st. Automotive Technology was hit hard by the pandemic and will therefore do everything in their power to return to profitability supported by stricter cost control and comprehensive effective measures.
If we take a closer look on our expectations for the current fiscal year, you will see that we are targeting a mid to high two-digit million euro earnings contribution, which represents a significant recovery from last year. As fiscal year 2019/2020 was severely affected by the significantly lower demand from customers, we had to reflect these new market circumstances in our business plan, leading the revaluations and impairments not all being adjusted and thus included in our EBIT-adjusted figure, as I said before. We therefore expect earnings also to improve by the omission of these non-recurring effects. In line of the currently highly uncertain environment, also in the global automotive market, we are cautious about the upside from the market recovery at the moment.
To also give you an indication, the top line we estimate for the current fiscal year will be more 20% or in the direction of 20% below pre-coronavirus. Therefore concentrate more on the levers as we actually can influence the further ramp-up of our new projects and plants, mainly at Steering and continuous and consequent cost control by improving personal productivity, for example, via restructuring. Here we are planning to reduce about 800 FTEs in the next or current fiscal year, and with that target annual savings in a low two-digit million euro range, and also by enhancing the operational excellence, for instance, by reducing production costs while improving the quality or by carefully choosing the best quality but also best cost suppliers. Marine Systems.
We are quite positive on the operating perspective also on the back of Q4 order intake with frigates for the Brazilian Navy, as you already heard, giving us top-line growth over the execution time of this order. Moreover, a further perspective will open from the submarine program for the Norwegian and German Navy and as a subcontractor to the Italian shipyard, Fincantieri, where we are also part of a promising bidding process for an Italian submarine program. We expect to receive both orders in the current fiscal year. In order to safeguard our margin, we run an even more diligent calculation and strict cost control over the construction time of each and every new order. In addition to that, we implemented a number of efficiency measures addressing, among others, performance in naval electronic systems, push performance in service, excellence in procurement, utilize efficiency gains from integrated product teams.
For the current fiscal year, we will see a first slight uptick in EBIT adjusted for Marine Systems from both kinds of levers, top as well bottom line, which will become more dynamic going forward. Steel Europe. Steel Europe will also show a significant improvement in the current fiscal year. They remain negative. With Heavy Plate now being part of Multi Tracks, we expect EBIT adjusted to be negative low three-digit million euro figure. Main drivers will be the expected market recovery, leading to about 10% increase in shipments year on year. Of course, being far behind the pre-COVID. With a clear ramp-up, of course, for also more high-margin focused products for the auto sector. Despite a substantial recovery in volumes, pre-crisis levels will be far not yet be reached, as I said before.
This, in turn, will result in a better utilization of aggregates with a significantly improved cost base in up- and downstream operations, as well as an improved raw material consumption. The still high level of the iron ore prices could be likely potential push for steel prices. In addition to market tailwind, we expect already sizable effects from our Steel Strategy 20-30, with priority on accelerating of restructuring, leading to a saving in mid-two digit million range this fiscal year. We identified additional efficiency measures with additional savings potential on top of already identified measures related towards Steel Strategy 20-30. Much more important, all these levers will provide substantial upside also after 2021. Alongside, of course, we will work towards climate neutral neutrality with strong concepts like our, in German, [audio distortion]. Talking about new concepts.
We see ourselves well-positioned to capture opportunities arising from the green transformation, as we are competing and partly leading in attractive future markets and areas. Our Bearings business, for instance, is technology leading in fluid bearings used in wind energy turbines. By this, we contribute to the energy transition. In addition, we intend to make full use of the enormous greenhouse gas reduction potential of hydrogen in steelmaking processes to be able to offer green steel to our customers. In order to transform towards a climate neutral steel production, we plan to use hydrogen in direct reduction plants and electric melters. Also, our powercore non-grain-oriented electrical steel is a high-tech core material used throughout the entire energy value chain, from generators to electrical engines for e-mobility, thus offering us attractive growth opportunities.
We are pioneering not only the use of hydrogen, but also play a leading role in its production process, as Martina said earlier. Our joint venture, Uhde Chlorine Engineers, is technology and market leader for high efficient electrolysis plants and specialized on hydrogen production via alkaline water electrolysis. We intend to profit from the expected expansion of production capacities. In this year alone, project announcements for our hydrogen technology have doubled. In light of these facts, we are currently evaluating the continuation of the business with one or several partners. From detail's perspective, we believe this to be a valuable option. Before we jump into the Q&A, let's wrap up and see what lies ahead. In the current financial year, we have three strategic priorities.
First, Steel Europe, where we explore all options for industry consolidation and secure financing to carbon neutral steel production transformation. This is flagged by our restructuring initiatives, securing and pushing fundamental value. Restructuring and enhancing performance is not limited to Steel Europe, but applies to the entire organization, our second priority. We will stringently improve performance across all businesses into high performant group of companies, supported by the defined value levers that are to be consistently backed up by concrete action plans. We will work towards realization of best owner concept for our Multi Tracks businesses, as Martina already explained, and towards climate neutrality, including our hydrogen-based steel climate strategy, while exploring financial options. To sum it up, we cannot drive the market, but we can drive our own performance. That's what we focus on. With that, we are ready to take your questions.
Thank you very much.
Thank you very much, Klaus. Thank you very much, Martina. With that, we want to go over to the Q&A session. For this, operator, please take over for the moderation.
Thank you very much. Ladies and gentlemen, we will now begin our question and answer session. If you have a question for our speakers please dial zero one nine on your telephone keypad to join the queue. [audio distortion]. If you find your question is answered [audio distortion] you can dial star two zero to cancel to your question. If you are using speaker equipment today please [audio distortion] the handset before making your selection. A moment please for the first question. And the first question is from Ingo Schachel, Commerzbank. Your line is now open.
Yeah, thanks for taking my question. The first one would be on the next steps that we should expect for the Steel Europe business. I think on the press call, you were saying that you expect clarity on the way forward by spring next year. I just wanted to understand what that means in case of a standalone solution where you would decide, yeah, to develop the business on your own.
If that's the way forward, would that imply that by spring next year, you would give us a more comprehensive announcement on your green steel strategy, including an exact price tag and size of investments and source of financing and explanation whether potentially the state would inject equity or silent participation or guarantee more debt? Would it rather be that in spring you would announce that you keep it and then develop a new standalone strategy on the back of that?
Yeah. Well, thank you, Mr. Schachel for the question. I think let me start with answering your question. It is a big one.
It's a long question.
It's a big one.
Comprehensive one.
As I said before, as we said this morning, you know that we are in the process of examining what kind of industrial concepts would fit best to our Steel. We have this, of course, the standalone strategy. To be honest, we have the Steel Strategy 20-30, which we think is a good one. We, of course, believe in it. Of course, with the COVID going forward, or let's say having COVID in place, we have to face with strategy, maybe with lower volumes. At least for a certain period of time. This is something we have to work on. This is the one thing. The other thing is, of course, we always said that we are looking for the best concept to create value. This is, of course, the reason why we are talking also to other producers for potential cooperation.
This is the status where we are in, and we think that we cannot do this too long because we have to have clarity for capital market, for ourselves, for our employees. Therefore, we decided that we have at least in spring next year, that we know in which direction to go. The precise question you asked, whether we are then able to give you a number, what kind of subsidies or what kind of money you get from state to finance the transformation. This is not what we intended to say when we said we will be ready at spring 2020. It's more to give you a direction and a decision which direction it will go.
Thanks, Klaus. Maybe, Mr. Schachel, two more comments to avoid misunderstandings. In order to focus our teams, we consider it being two steps for the time being. Step number one is to restructure the steel business as is in today's environment, more or less. Step number two is to transform our steel plants to green steel production. For step one, of course, as Klaus mentioned, we have to realize that the capacities required in the market might not be the same after COVID, as they've been before. This will lead from today's perspective in a standalone approach, to a questioning of our today's capacities installed. Which you can imagine is a kind of holy cow discussion. In this holy cow, or as we called it this morning, no taboos anymore. Of course, the steel team is evaluating such options now, which they have not done before.
With such an approach, of course, we compare external offers for our steel business. Then at the end of the day, by March, we can come to a conclusion whether we believe a thyssenkrupp-focused standalone restructuring is more promising than another one. As we always said, we consider thyssenkrupp as a very valuable asset. Of course, to generate the value which can be expected from such an asset, we will decide then, do we, in the dual tracks approach, will we follow the external approach or will we follow the internal approach? That should be delivered by March, including then, of course, a kind of rough business plan. That covers the restructuring phase, not the green transformation, as Klaus mentioned. This is the step one approach. The transformation to green steel will then follow.
Okay, that's very clear. Maybe just a shorter one on Steel Europe, and I'll skip the free cash flow questions for this time. On Steel Europe, I think you were saying you want to ramp up the shipments of focused products by 20%, and the way you said it sounded quite simple, but it's probably not. Can you explain a bit more? I guess you're trying to tell us that you are aiming to regain market share on automotive steels. Which drivers are behind that? Is it really specific client wins, quality initiatives, or a more aggressive marketing and pricing push? Our impression was probably that you lost market share in the last years, and now you seem quite confident to regain. Just wanted to understand what's changed or what is changing here.
In the first place, it is that we invest in our equipment and that we are able to go in the niches which customer asking us to do. So we will be one of not so much steel producers who can really produce then these kind of grades and these kind of products. That's the reason why our investment program goes into this direction. Also, of course, we see, this is one thing, if you look at the development of the last 50 years, the volume development, we had a big reduction. A very big reduction of more than 30%, roughly, in this area of products. I think the main reason why we now think that we can go in this direction is that we clearly only catch up more or less the volumes we lost last year.
Okay.
In the first case, I understood your question to go more in the midterm range. In the midterm, I think you know our strategy. Of course, we will also increase our, let's say, share in automotive special grades, and this is, of course, the reason why we do the investments here. This is not, of course, in the current fiscal year, this is going more midterm.
As you mentioned, Klaus, I think we are somewhat convinced in all the discussions, this was for sure mentioned probably in one of the previous calls, that the relative market positioning of thyssenkrupp in these high-strength steels required for electromobility going forward is a relatively good one. Stronger than, this is, let me say, this is our crown jewel, the market demand for this crown jewel is growing.
Compared to other competitors, we lost quite a lot of volumes and quite a lot of margin, it's because our automotive exposure. What we see now is coming back, if I look at the current situation in the current fiscal year, we can commit that we are on a good way here.
Okay, understood. Thanks very much.
The next question is from Bastian Synagowitz . Your line is now open.
Yes, good afternoon. I've got one question and just again, to follow up on the steel business. If I just try to keep track with the restructuring effort here, I guess relative to the size of the business, the amount of restructuring effort needed, I guess the restructuring provisions in the business still appear pretty low, just considering the headcount impact as well, which you had maybe from the COVID measures. I think there was not too much change on the employee side either. I guess for a business which is burning EUR 1.5 billion in cash and more than 50% of the company's market capitalization, the speed of restructuring here doesn't seem to be so high.
Is the reason for that that you're basically waiting for the possible strategic solution for the business, or is the union pushback which you're facing at the moment still just too strong and does not allow you to basically pick up speed?
I think if I would say no to your question, you would anyhow not believe it.
What is the answer?
I do not want to create unnecessary tensions. I think we feel normally, and this is the case, of course, we consider managing through a fundamental crisis like we are in, requires, in a certain way, a co-management between the key stakeholders. I think the path shown in the last year showed that we were able to go in relatively high speed through this entire program. On the steel community, we had to face, and I say it myself, because I was new with the company in a way. The steel guys, they went through this catastrophe of a five-year standstill almost in the negotiations with the Tata joint venture. This led to difficulties when we wanted to renegotiate the Steel 20-30.
We signed the contract directly after the sale of Elevators, we were all in the executive board, together with the steel board, totally convinced that in order to upgrade our steel production to a more valuable product portfolio to market and to, of course, to a much better operational efficiency in the plant, that that's the right thing to do. We did it with 11.5 million ton capacity. Of course, our guys in Duisburg, they try to protect this capacity. As I said before, we are now on the way to renegotiate these contracts, which we discussed yesterday with our board. This is a kind of breakthrough, yes. You could say, yes, we were in a way bound by these discussions about external options for steel.
We, the executive board, felt to investigate a consolidation in Europe makes sense as a first step before we decide what kind of capacity we would want to invest in finally. This might look now as if it was the union which led to this, let me say, to this time needed now. Actually, it was a matter of prioritization to say, "Okay, we have to accept that the capacities will not be needed anymore, maybe. It's valuable to investigate whether a consolidation creates more value than a standalone path." It was not the unions, it was also us. It was not so easy after the five-year standstill year. Maybe we could have been a month quicker, but not one month. We could have been one month quicker or two, but not five or six. Now we are there, it's now okay.
Okay, thank you. That is very good color. Thanks for the background. I have one more question on CapEx and capital allocation. If we just look at your financials on a high level, your depreciation line obviously now drops towards EUR 2 billion or EUR 1 billion post the write-downs, and your CapEx obviously rises to EUR 1.6 billion. I guess if we look at the situation overall, the spending above the depreciation level or significantly above the depreciation level, obviously lifts the bar for the businesses to generate any cash. Is there just any prospect as to how the CapEx line, and I'm talking about the current structure before any further portfolio reviews, is actually coming down in the next, say, two or three years rather than in the next 12 months?
Is just the EUR 1 billion depreciation level maybe slightly misleading in terms of what will be the sustainable requirements of CapEx spend for the next two to three years?
Yeah, this is a good question. First of all, of course, the EUR 1 billion in depreciation is after the write-down of the assets and so on. This is clear. What we see so far is the following. We've said we will divest the Elevator Technology business to enable the rest of the business, and not the whole bunch of the rest of the business, but the focus business we described. I think this is why we started so. We now see good investment opportunities, and this is what we, let's say, considered in our way forward in the plan. The number you said. There are some structural issues here. We have the IFRS 16 effect of EUR 100 million, and we have, let's say, other effects, so which of course leads to another view on it.
Of course, we also have in these numbers the additional investments coming out from Strategy 20-30, which we want to do. Other investments also, for instance, for Bearings, and we released recently quite huge amounts in investments for further, let's say, investments in China and other countries to really serve the growing market here. Of course, we know that this is, let's say, more or less critical in the situation where we are in, but this is the reason why we said we have the elevator view, and we are investing in this because most of the businesses in the past were under-invested. They were in the past under-invested, and they invested less than depreciation. Not for steel, but for the other business we are talking here. We come to the process. Our process, of course, there is a number now.
During the year, we will have a close look on this. If a business is not performing the cash ones and the cash plan, they will not receive this amount of money they are planning. This is very clear. We will be more strict to do so. In principle, we want to enable the businesses to do their logic strategic investments. The thing I want to make clear to you is that we will be very flexible in adjusting these numbers. What is the amount of investments, the normal amount of investments? Having in mind this investments for Steel Europe, you know that it is EUR 800 million in six years. You can imagine that this, if you divide it by six years, that this is, of course, an on-top investment.
If you, let's say, deduct this, we will come to a quite normal level of depreciation or a bit more also in other businesses.
Thank you. That is helpful. One more question on your hydrogen business or electrolyzer business, which I guess you started to talk about more just in the last couple of quarters, but generally it's obviously still a business which is probably not just underappreciated within your group, or I think certainly underappreciated in terms of valuation. If you look at a couple of the hydrogen companies out there, they are obviously trading at pretty crazy valuation levels. However, at this point, I guess it's still been falling very much below the radar when it comes to thyssenkrupp, and yet you're obviously world market leader in water electrolyzers by installed capacity. What are the options you're basically looking into to maybe create value for investors from this side? It is absolutely clear that there is a lot of value potential in that unit.
Yes. I think we took just recently the decision because you know that the water electrolysis business is part of our CPT business segment. We were, let me say, trying to find out what is the value we might get for that business. It is part of our Multi Tracks. Interestingly, I have to say, we were somewhat surprised by the offers we got, considering what value people see in this business. This all led us to the conclusion that we will not sell this business. Instead, we will develop this business with us remaining at least a significant shareholder, if not to say the biggest shareholder. We are going to investigate several options, how to develop the business, or possible ownership structures for the business.
As you said, this is definitely a tool, and we will come back with more details on this also, let me say, in the spring. We have projects running now to evaluate. Yes, we believe we have a significant value upside in this business. Our investigation tell us that this is far beyond the EUR 1 billion business value already now. We are asking ourselves in what direction we could lead this business to really get this value uplift to its maximum. To create a bit fantasy for all of you in this question for thyssenkrupp, the long-term why, thyssenkrupp, if we would form a green tech segment, we would already have a significant sales amount in a green tech segment. You can imagine that Klaus and I have this in mind.
We believe that we, at this point in time, have to focus our entire organization to the restructuring process, and push the organization through this painful process before we talk about a possible future in other segments. We really definitely believe that it's not a good time to share, let me say, our ideas. We want our organization to focus on the top priority, and that is free cash flow positive and competitive, and margins in the business we want to hold. Next year in May, we come back to you at latest with this long-term perspective. Yes, hydrogen is for us, is a value driver, yes. A significant one. Let me know if you would not share this decision that we should prioritize on performance and restructuring now.
Does this answer your question, Bastian? Okay. With that, I think then we can go over to the next one in the row. Operator.
Yes, sure. The next question is from Seth Rosenfeld, Exane BNP. Your line is now open.
Good afternoon. I think this is Seth Rosenfeld at Exane. If I can ask you a couple of questions on autos, please. Your commentary on demand conditions strikes me as being a bit more cautious than what we've heard from many of your peers, impacting both Auto Technology and then, of course, Steel Europe. You touched on earlier some of the challenges within steel, but for Auto Technology particular, can you walk us through what perhaps contributes to this relative caution? In particular, I think you said earlier you expected top line 20% below pre-COVID levels. If you can give us a bit more color on demand and your feedback from customers, that'd be a great place to start, please. I do have a follow-up. Thank you.
Oh.
If I start, this 20% below, I said in the direction, it's not 20%, it's a bit better. This is something like. We are below pre-corona level as indicated before. Do you want to say something about Automotive?
I think the automotive market, as Klaus mentioned, first, I think our overall positioning is a relatively good one with our business segments in the automotive market. We have a share of market in several regions. With this, we showed already, even in the last fiscal year, growth beyond the market growth. It's always difficult to provide the details compared with corona, because yes, we were below the previous year, but still better than corona figures indicated. We gained market share, actually. At the end, the growth of the business is satisfying. We believe, as Klaus mentioned, that for the time being, to plan with moderate growth for the future is necessary for us because our first and highest priority with you as our shareholders is we promise what we deliver.
We did not want to now, let me say, pump sales into our figures, which we would believe might be too high. We have a relatively cautious planning going forward, as promise and deliver. With that, regaining trust with our stakeholders is a high priority for us.
Yeah, when we made this planning, I think it was spring or summer or something like this. In that time we were, of course, like everybody, a bit cautious, and I think it was good that we were cautious. Now after the summer, these volumes developed better than expected. This is also a trend we actually see that it's a bit better than expected. I would say, really a but, we are now in the, let's say, last quarter of the calendar year, and we know incentives and things like this, but nobody of us really knows what will be the demand in next year. Therefore, we have to be cautious, still cautious, and that's the reason why we stick with these numbers.
Okay. One follow-up, please. Within Automotive Technology, I believe there is a quite large one-time charge recorded in Q4. My understanding, this might reflect some quality issues in the business. Can you give us a little bit more color on what drove that charge and how we should think about the ramp-up progress of various facilities that should ostensibly be something of a growth driver moving forward? Thank you.
This is the one times was an effect on percentage of completion. It was depreciation, and it was an R&D depreciation.
A provision for.
And a provision for.
Quality issues.
Quality issues, but this was a minor one.
Yeah. mainly the correction on the R&D.
Yeah.
Depreciation.
Which we did in the light of the, let's say, of the reflecting of the balance sheet items we saw at the last fiscal year end.
I think you all know that we had a very cleanup of our balance sheet, which was clear to us since we sold the Elevator business, that we used this once in a lifetime opportunity, to clean up all these extra items within our balance sheet, and one of these was this R&D depreciation Klaus mentioned. This was no surprise to us.
Nothing which should worry us in the future.
Yeah.
Okay. Thank you very much.
The next question from Carsten Riek, Credit Suisse. Your line is now open.
Thank you very much. Two questions from my side. The first one on the free cash flow outlook, around EUR 1.5 Billion for FY 2021. Looks rather cautious. Did you include any potential order from Marine, and the prepayment for it? Just a hint on the Norwegian submarine order. What step up in CapEx do we talk about in 2021 from chart 38? It suggests somewhere around EUR 200 million, but I might be actually wrong. That's the first one.
Yeah. First question, yes, potential payments are included in this number. There are also included in this number higher CapEx volumes than in the previous fiscal year. As I said before, this is something which we will have to develop over the way. This is something we, at the moment, plan, but let's see how it will develop. Your estimation was quite okay. It was quite good.
Thank you.
If it will be cautious or not, we will see at the end of the day.
That's fair. The second question was actually on the Electrolyzer business, the Uhde business. My original question was where you want to put it if you want to develop it yourself, but hearing now it could be a own segment. I'm just thinking whether it would be a wise decision to do the second step before the first step. I believe strategy-wise, you need to clean up the portfolio before you add. What the market needs to see is actually a turnaround in the cash flows, and that would be a nucleus, and it could be developed, but we don't know yet. Is it not too early to think about this, and do the second step before the first step? What is your view here?
I believe even if you get something for the business right now and for the other business, I think the market doesn't actually reflect anything in your share price for any of the disposals of the Multi Tracks businesses. I would say, executing on the Multi Tracks business should be, right now, the most important one. Then once this is done, we can think about what is left and do you develop it yourself or do you wind it down or whatever you do with this?
I think you're fully right. We are executing on the Multi Tracks businesses where we are looking for what we call the best owner concepts. The only exception are now two. One is the participation, our share in the Elevators business. The second one is the CPT business, means the water Electrolyzers business. These two businesses are not in the process to be prepared for a joint venture or sale. What we do exactly, as you said, with this Uhde business, we will see, but we are sure at this point in time that the value we can create possibly alone or together with somebody, as a minority or majority shareholder, has to be assessed.
Okay. Yeah. Perfect. I just jump back into the line. Thank you.
Of course, as you said, to push these businesses under the line is one of the top priorities for this year. You mean the Multi Tracks businesses to develop the M&A processes going on to a point that we push them below the line before the end of the fiscal year is, of course, one of our top priorities. It's a uphill battle with COVID, and we do not want to have files to do file saves.
Okay.
If there is no need for a file save.
Okay, understood. Thank you very much.
The next question is from Rochus Brauneiser. Kepler Cheuvreux, your line is now open.
Yes. Thanks for taking my questions. I have a follow-up on steel. I guess you talked at length about the strategic evolution and the influence of the stakeholder in the further development of the steel business. What I'd like to understand is the relative preference for consolidation or standalone option in steel. You're saying you plan to have a decision by spring. What we have seen in the last couple of weeks and months in the European steel industry that there has been a growing dynamic in terms of consolidation. Obviously, some of the companies you talk to are talking to each other. How shall we think about the Liberty bid? If this is only being finally decided in spring, what is the risk that this offer is not there? Or would that point that in spring we would rather talk about a kind of a standalone concept?
The second question is on the guidance you're giving for this year. Is this given under the current scope of consolidation? Or are there any certain asset disposals already implicitly considered? Following the impairment this year, do we then need to consider further impairment risk for these Multi Tracks businesses or for Steel Europe?
Let me start with the risk. You know that these asset impairments, you know the system behind, and they are, let's say, evaluated by the current planning, and the auditors are in discussions with us whether it makes sense or not. We do not see a big risk to further here make write-offs or something like this. This is a very actual evaluation. This is how the numbers are at the moment. This is how it is. The other thing you asked, what is the preference? Yeah. What is the overall situation in steel? Of course, every European player, I guess, has his own option rule like we do, and everybody more or less is talking to everybody. This is how it works.
We also say that we really do not comment, and I think you will appreciate this, that we do not really comment or, let's say, make a comment on what kind of option is now the best one or which we prefer, because it really depends on how it develops. Of course, we have this liberty, but we have also other options here. At the end of the day, we also have a standalone option, and we will see during the time till spring next week, which kind of option will be the one who creates most value. Then we are going to decide. This is the plan. It's really too early to say so. This is everything I can say to this.
Okay. On this impairment question, I think I understand that when you do the planning for the next years and you have lower expectation, that has impact on the valuation of your assets. When you are in a disposal mode and many of these Multi Tracks are potentially up for sale. There could be still a difference between how you see business on a standalone, on a planning basis versus potential exit routes. I try to understand whether these impairments were closer to the next three years business planning or to what you currently see as a price tag in the market.
Yeah. The impairments are more on the, as every time impairments are made, are more on the three-year business plan models. At the end of the day, when we are talking about Multi Tracks divestitures, it's very open to say whether we will have a hit in equity or not. This is something we clearly cannot say at this point of time. Even again, nobody knows.
Okay. That makes sense. Maybe one final follow-up on these accelerated staff cuts to 11,000 and the incremental 7,400. Can you give us a rough split how this is impacting the dividends, or at least how Steel Europe is being affected by that?
The line was quite bad. Can you please repeat?
The impact on Steel.
Okay.
The impact on Steel.
The impact on Steel.
7,000.
Yeah. The 11,000 people. Out of the 11,000 FTEs, 3,000 are coming from Steel Europe. This is the number which is included there is the one we already identified or defined during the Strategy 20-30. This is the part of Steel Europe which is included in this number. Yeah.
Okay.
It's an old one. As we said before, we are in discussions. If you know, when we are in discussions, we are not talking too much about the potential outcome, but we can confirm that we are in discussions for further measures.
Okay. No, fair enough. Thank you very much.
The next question is from Luke Nelson, JP Morgan. Your line is now open.
Hi. Thanks for taking my question. Firstly, just on provisioning, you've guided to mid three digit million euro impact for this current financial year. Can you give an indication on the additional restructuring charges required out to FY 2023 to achieve your savings target?
Did I get you right? The question, but the line was not good. You asked how much restructuring cost we will have to bear in the next three years or in the this year?
Correct. To get to your FY 2023 savings target.
If you talk about expenses, it will be roughly a low to mid three-digit million euro number, starting this year. Yeah. Most will be this year and some of this also next and the following years.
You can see depicted on our slide that we showed in the presentation. It gives some kind of guidance what you can expect from us going forward. You see the number for 2021 and also you see then the numbers for the year thereafter.
The low to mid three-digit in FY 2021 should be thinking a similar quantum in the year or two out to 2023.
Yeah. The payouts in 2021 will be higher than last year. We paid out last year EUR 200 million. We're going to pay out in the current fiscal year for that something between EUR 300 million and EUR 400 million. The restructuring provisions for this headcount reduction is, let's say, it's EUR 200+ million from today's point of view. Of course, it can go up depending on what we are doing also going forward. If you know these numbers, you can make your guess for the numbers then going forward.
Okay, perfect. Second question is maybe one for Martina. You mentioned the new structure will make the business more profitable, and specifically talked about returning the business to being free cash flow positive. Just based on these FY 2023 sustainable savings that you've outlined and in the context of the CapEx remaining above D&A, do you think it is enough to return the business to being positive free cash flow on that time horizon without any market tailwinds helping the business from what you're expecting FY 2021?
Maybe I can start. First of all, free cash flow is, of course, also a matter how much COVID is going to impact us. You know that we are planning in certain scenarios. We have a scenario which for us is the leading one. We have the better scenario and the worst scenario. The one we actually have with the leading one is the one where we have, in 2023, a sales volume or top line, which is a bit more than pre-corona level. The big businesses, Steel, MX, and Forged Technologies, in this scenario, are not above pre-corona level in this scenario. Even in this market scenario, we will be able to earn positive free cash flow in this period of time. To be honest, we will be better and sooner. This is something we clearly have to work on.
This scenario is only reflected what we at the moment have in the light of the, let's say, the given market scenario and the top-line scenario and the restructure measures. In this scenario, there will be a positive cash flow. We clearly want to enhance it to be quicker and better.
As Klaus said, I think your question can be answered with a clear yes. As time is of the essence for us, as Klaus said, we call our current case the moderate case. We announced it this morning to our organization and yesterday to all our stakeholders, our current, what we call plan, shows what Klaus described and what you've heard from him. We feel it still takes too long, so we are working on an improved plan still. We do not want to make promises. We make our plan built on concrete actions, on concrete measures. We do not pump hot air in anymore. As we do not pump hot air in, we are planning until we reach our target.
We call this process we plan until we reach the target. This is why we have just started a next round of planning in all our segments, and we have committed ourselves yesterday to our supervisory board that we provide an updated planning in the spring next year. I think once we would lose momentum on this improvement path, we lose, of course then, a set of momentum. We want now really to stay resilient and, in a way, also very disciplined on this improvement path. We plan with concrete measures until this plan reaches the target set. As Klaus said, with this, we intend then to be better than what we have just recently announced as our plan.
We will not promise this to you today because we have this holy statement to us saying we promise what we deliver, and we only promise what's based on concrete measures bottom up in our organization.
Okay. Thank you. Maybe just one quick one if I may. Just if you can comment in any way around the headlines a week or two ago around a capital injection potentially from the German Economic Recovery Fund, maybe why that would be necessary given, obviously, the balance sheet has been repaired post elevators and your comments on free cash flow improving over the next two, three years.
Yeah. I could talk about what's going on in the media. It's true that you sometimes read there is potential capital injection. What is true so far is that we are in talks with the government, with Berlin, and also with Düsseldorf here. Of course, we are talking about several issues. We always said that, for instance, the financing of the transformation to green steel is something nobody can know, steel producer can pay by their own cash flow. Of course, in addition, our restructuring investments, this is a very costly one. Therefore, we are talking also to governmental places what kind of subsidies could be possible. By the way, other steel producers are doing this also because they can also not finance the green steel transformation. Therefore, we don't talk about capital injection if we talk to official places here.
We talk with the government and everything is open. Yeah. Everything is open. It has to be an, let's say, intelligent mix of finance aids, and we will see what at the end of the day will be done or not done. This is the story from our side.
Okay. Thanks a lot.
Okay.
The next question is from Alain Gabriel, Morgan Stanley. Your line is now open.
Yes. Good afternoon, everyone. Just two questions from my side. Firstly is on the Steel Europe business. How much pensions and provisions net of tax are attached to that business to be considered if you're looking to potentially sell it? Connected to that business, what are the CapEx requirements for that business in isolation for the next three to five years, including or excluding the green steel investments? That's my first question.
It was very quick and the line was not good. First question, how much pension is?
Related to steel.
Is related to steel is EUR 4 billion?
That's right. Okay. Is that net of taxes?
More or less. Yeah. This is EUR 4 billion net of taxes. The other question, can you repeat it?
It's what are the CapEx requirements of steel in isolation for the next three to five years? Just trying to get a sense of the cash needs of that business, including or excluding the green steel investments.
We have, of course, in the next year, we have a normal level of investment, which is roughly EUR 500 million. In addition, for the next six years, we have EUR 800 million of this investment, which are linked to the Strategy 20-30. Of this EUR 600 million, or let me make a guess how much is in the next three years, I think take 50% of it or let's say 40% of it.
Thank you.
the investment level. The investments in the transformation of steel, we do make investments in transformation, you know that we inject hydrogen into the blast furnaces and also this Carbon2Chem issues. In this three years period, we do not have considered an investment into a direct reduction machine technology. We will do so, and this will come, I think, 2024, 2025, something like this. Of course, we are going for state aid to finance it.
Okay. Thank you. My second question is on the Heavy Plate business. If you were to consider shutting down that business, what would be the cash outflows that would be linked to that? I presume this is not in your guidance for next year, is it?
Well, it is in the guidance. This is the first stage. It is in the guidance, and it is in the planning here. It will be, let's say, the question is, it is part of this in the guidance because we discussed it as a two-year effort, I think this is something like this. The number is. I don't want to be too precise at this point of time, so it is something you can count by yourself. This is order.
Okay. Thank you.
The next question is from Christian Georges, Société Générale. Your line is now open.
Thank you very much. Good afternoon. On your steel scenario, under your moderate case you're referring to, is it fair to assume that in the first fiscal half, you're having a higher level of operating loss? Is it possible that you may come to break even come the second half? Is that part of the possible scenario?
You mean for the whole group or for steel?
For Steel.
For steel.
Well, I think what shall I say?
Very much steel.
It is very.
Cost-driven business.
We do this calculation with numbers which are conservative, and we don't really want to give you so much of insight here at that point of time. If we talk about this moderate case, we will have, as I said before, a loss in the steel business, and whether it's possible at the end of the year to have a break even, we will see. Sorry, I cannot say more.
In the market, of course, such a fixed cost deal is very fixed cost business, high fixed cost relative to variable cost. It's extremely dependent on market developments. As Klaus normally says, here, it's difficult to provide precise forecast, actually.
If everything being equal, it would be fair to assume that come the second fiscal half of the year, some of the restructuring and the cost-cutting steps you're taking now would have an impact for second half.
It's not impossible.
Okay. My second question is on your Marine Systems division, because you mentioned some potential offers or interest on your stainless steel and other part of the business. Is it not an area where you're having also some discussions as possible M&A on the European scale?
You mean the AST?
No, the Marine Systems you mean?
The Marine Systems.
I saw the Marine Systems. Sorry.
Yes.
Yes, of course, in the thyssenkrupp Marine Systems, we are actually, from our point of view, there will be consolidation. There is actually, we do not consider the standalone case at this point in time being the one which with the highest probability. For the time being, we believe consolidation, and it's either consolidation within Germany or it's a European consolidation. I think it's mostly known who it is. In the German consolidation, of course, that would drive a better market position towards the biggest customer, which is Germany. While in the European consolidation, it's definitely a better synergy case. There, of course you have good synergies, but probably no improvement in market position. We are comparing both. There is not yet any preference visible. We are in a very intense discussions now with the players involved.
It's a political thing, of course.
Yeah.
We are quite self-confident that we think that we can drive the business by our own.
Sure.
If the political dynamics are in this way, as Martina said, a potential consolidation is quite likely. It always takes two to tango, and the timeline is difficult to predict.
Yeah.
Okay. My very last question is Sorry.
I just wanted to say, you might get the impression that we are cautious in everything. Actually, it's not that we are cautious. We are very cautious in not over-promising actually business results, considering the difficulties for preview with the COVID cases. With our strategic moves, it's sometimes difficult for us to indicate because, as Klaus said, it's always two or threes we are dancing with, and this has its own dynamics. Please remain and rest assured that we are avoiding cases where we become a victim of dynamics of others. We try to remain in a position that we are, let me say, ahead of the curve, and the curve is not turning in a way against us. This is why we are extremely cautious in sharing details about cases where we speak with others.
Yes, that's very clear. Thank you. My last question was going back to a previous question about all these articles in the German newspapers about participation and other cash injections. You're highlighting that you want to be intelligent on the mix of finance. Does this include the possibility of a stake from either Berlin or Düsseldorf? If this were the case, is it something that the board and your main shareholders would be comfortable with?
We believe in free markets, I would say, and I think, Klaus, I can speak for the two of us. To us, an equity state of Germany in a company is to me something where I would always say is not a good idea. I do not consider that in any way a kind of preference I have. To be very clear, we, of course, want to develop the business and create value, and if there would be a case where we see, let me say, a temporary something support might make sense in order to accelerate a transformation. Would create value because at this time nobody would finance what people call dirty steel.
Banks, if we go to a bank and ask for a loan, everybody would say, "Thanks, Martina. It was nice to see you again and goodbye. As we want to accelerate the transformation for cost reduction, it might make sense, but please rest assured, to me, such a situation is. Actually, it's not that I like state equity of Germany in whatever company. We might have a situation at the end of the day where we discuss this, but it is not our preference.
Great. Thank you for your very clear answer.
Please don't tell anybody.
I won't.
The rest of the participants also.
With that, I think we have come to the end of our call today. We would like to thank you very much for participating. We would like to thank you very much for your good questions and for contributing. We look forward to staying in touch with you. As always, for all the questions you might have after the call, the IR team is happy to be in contact with you. We look forward to speaking with you next time.
Yeah. Thank you very much to helping us lead the company through this very important phase. I think I can speak behalf of Klaus, of all our leadership team, not only you and myself. We know that's a tough time for you, being a thyssenkrupp shareholder.