Ladies and gentlemen, we'd like to welcome you to our final press conference here at thyssenkrupp AG. I'd like to welcome you here at our conference center at Essen, and we're very happy that you found your way to Essen, either live or virtually, and this press conference, we are allowed to transmit via livestream, so all of the journalists who are here or watching us online can ask their questions, and I'd like to also welcome our colleagues at thyssenkrupp, who are also watching us on livestream. On the stage, we have the management, Mr. López, Ilse Henne, Axel Hamann, right next to me for HR, Winfried von Hahn, and prior to beginning, a few service announcements. We have about 90 minutes for this press conference. Conference language is German, and for those listening who cannot speak German, we have a simultaneous translation for you.
Therefore, you can ask your questions in German or in English, whatever you prefer. We will answer in German, but that will then be simultaneously translated into English. At the beginning, Miguel López and our CFO, Axel Hamann, are going to be speaking about our business year of 2024-25, and they will give us an outlook on the current financial year. And then after that, the entire management team will be here to answer your questions. I'd like to pass the floor to Miguel López.
Thank you very much, Frank. Good morning, ladies and gentlemen. Welcome to those of you here in Essen and to all those attending via livestream. I'm pleased to welcome you on behalf of the entire executive board and to today's annual press conference of thyssenkrupp AG for the fiscal year 2024-25.
We look back at a fiscal year that was once again overshadowed by difficult geopolitical and economic public conditions, policy conditions. The war in Ukraine continues to keep the world on tenterhooks, and threat scenarios are edging closer, ranging from government control disinformation to targeted acts of sabotage against critical infrastructure. The fragile situation in the Middle East has persisted, and in the U.S., the economic and foreign policy orientation is shifting. Protectionism is on the rise in North America under President Trump, while climate policy is receding further into the background, and China is selectively playing to its powers over trade and commodities. Europe is searching for its own way in this conflict situation. Brussels has ambitious plans: greater economic competitiveness, greater geostrategic independence, greater climate protection, and all of that at the same time.
One year after the publication of the prestigious Draghi Report, the author himself has drawn a sobering conclusion. In many areas, Europe's position is worse than in 2024. Implementation of the proposals from the Draghi Report has stalled. Many reforms are struggling to get off the ground. The connection between growth and climate change mitigation is not yet gaining traction. The process is often dominated by national interest rather than resolute joint steps. Germany and Europe are wrestling with the question of how they can exist and get their economies to grow again between the two major powers, China and the U.S. Many of our customer industries are under considerable pressure, from engineering through the chemical industry down to the construction sector. The automotive industry, in particular, is currently immersed in a massive crisis. Sales volumes are stagnating. Production in Europe persists at a low level.
High investment costs and technological upheavals are placing a huge burden on companies. Add to that the uncertainty over the ban on combustion engines, which makes it difficult to plan ahead. Tariffs are exacerbating the situation. As anything that fails to make it through America's tariff wall is looking for new sales markets, especially in Europe. This leads to rising import volumes, growing competition, and even greater pressure. All these developments are shifting the goalposts for countries, for companies, for industries, for consumers, and for entire regions. Ladies and gentlemen, it's high time that we in Europe and Germany recognize that the entire playing field is rearranging itself and that we are right in the middle of this process. And yet it seems to me that policymakers in some parts of society are still finding it difficult to accept this reality.
Instead, many people are clutching to a world of outdated ideas shaped by the prosperity and success of previous decades. Change is not the problem. The problem is hesitant action in addressing it. What we need is a change of view. We have to look forward rather than back, be more open to innovation, and be prepared not to preserve traditional ways for their own sake, but think in new ways, even if it is painful. This is the ambition we pursue at thyssenkrupp. We embrace change and are making it the starting point of our own transformation. In a time of global upheaval, we focus on renewal, responsibility, and future viability. We want to be part of the solution, not the problem. As an industrial and technology group with creative drive, future strength, and readiness to change.
In the middle of this complex situation, we have to focus on what is possible. No matter how challenging the environment, it offers new headroom and new opportunities at the same time for making strategic choices, for taking joint initiatives, for embracing forward-looking action. To take advantage of these opportunities, it is critical for all players to act as one: the economy, policymakers, and society. The exchange required to this end among all those involved here has become more intense, and I hope they're all coming around to recognizing that we need courageous reforms and massive investments to safeguard the competitiveness of European industry. The genuine Clean Industrial Deal at the European level would send an important signal. It has to be open to all types of technology, encourage innovation, drive decarbonization, and in this way, create the basis for sustainable growth.
The German government also intends to mobilize huge investments. The off-budget fund for the Bundeswehr is driving the expansion and modernization of the German armed forces. Even more ambitious is the planned off-budget fund for infrastructure and climate neutrality, which is intended to kickstart investments of around EUR 500 billion. Other European countries have similar initiatives. A clear signal that Europe is willing to set the course for a more resilient economy. But we will have to become faster, much faster, at getting from intention to action, and it must not waste any more time. Ladies and gentlemen, at the annual press conference 2024, a year ago, we proclaimed the year of decisions, and we have taken a great many. The presentation of our new strategic future model, ACES 2030, was a decisive step ahead. ACES 2030 was decisive.
It provides the clear operating framework for our transformation when we are already implementing with determination and at high speed. We successfully listed TKMS on the stock exchange. Other businesses are set to follow suit as soon as we have put them on a profitable position ready for the capital market. We're more recently with Jindal Steel about the potential sale of our steel business. This is based on the Industrial Future Concept developed by the Steel Executive Board, the roadmap for modern, competitive, and sustainable steel production at TKSE. The collective restructuring agreement entered into with the IG Metall Trade Union in the past week, and the relevant company regulations are creating the basis required to implement this concept step by step.
The milestones reached so far demonstrate that we are already in the middle of the year of implementation, and we are driving the transformation with all our energy. Before I show you where we are currently standing in this transformation, what progress we've already made despite the difficult decisions and how we are forging ahead, I want to hand the floor to our CFO, Axel Hamann, who will put thyssenkrupp's financial performance in the past fiscal year into context and also explain our financial forecast for the current fiscal year. Over to you, Axel. The floor is yours.
Yeah, thank you very much, Miguel. Good morning. Miguel López has already outlined the current market environment. Fiscal year 2024-25 was extremely challenging as uncertain markets and weaker demand noticeably curbed our business.
Against this backdrop, we have adjusted our sales forecast downward in the course of the fiscal year and consequently also firmed up the target for the adjusted EBIT to a figure at the lower end of the range between EUR 600 million and EUR 1 billion. But we held our ground in a persistently difficult market environment. We achieved all the targets for our key financial performance indicators as latterly adjusted in our nine-month report. Consolidated net sales in fiscal year 2024-25 amounted to EUR 32.8 billion, down 6% on the previous year. It was therefore all the more important for us to continue to systematically address the issues of improving efficiency and cutting costs in all segments. As a result, we not only cushioned the difficult market conditions but improved adjusted EBIT by EUR 72 million and EUR 640 million.
Our APEX performance program was a major contributor to this success. Our free cash flow before M&A, which stood at EUR 363 million, was in positive territory for the third year in succession, exceeding the prior year figure by EUR 253 million and above the range of between EUR 0 million and EUR 300 million we had communicated. Our net financial assets increased to EUR 4.9 billion. What is more, the repayment of the last outstanding bond in February 2025 made us largely free from bank and capital market debt. On the bottom line, we generated net income of EUR 352 million after two negative years. That is an increase of almost two billion euros compared to the prior year. Special items to be highlighted in the context are the reversal of impairment losses on the elevator investment and the sale of thyssenkrupp Electrical Steel India.
Total equity rose to EUR 10.6 billion, taking the group's equity ratio to 37%, reflecting a balance sheet that has remained robust overall. We will propose to the AGM on January 30, 2026, that an unchanged dividend of EUR 0.15 per share be paid for the past fiscal year. In doing so, we aim to achieve dividend continuity compared to our prior years and reliability for our shareholders. Our share price also performed well. During the reporting period, the price of thyssenkrupp stock increased by about 240%, significantly better than the relevant benchmark indices. Our ongoing transformation, aimed at finding standalone solutions for our businesses, has strengthened the trust of the capital market, with the share price reaching a high of EUR 11.81 for the reporting period at the end of September 2025.
thyssenkrupp shares have continued their positive performance in the current fiscal year and held up well in view of the spin-off of 49% to TKMS. Looking ahead at the current fiscal year 2025-2026, we continue to expect an extremely uncertain market environment. Trends in the global economy remain unpredictable. The challenges in our core industries, especially in the steel and automotive sectors, will continue to demand our attention and possibly worsen further. Against this background, we anticipate the change in sales to be in the range of between -2% and +1% compared year on year. For Materials Services and Steel Europe, we expect increases in response to a rise in demand, while we anticipate a decline for Automotive Technology and Decarbon Technologies. We expect adjusted EBIT of between 500-900 million EUR.
Here, we continue to benefit from the restructuring measures we have already initiated, as well as the actions under the APEX performance program. We expect free cash flow before M&A to be between EUR -600 million and EUR -300 million. It should be taken into account in this context that cash outflows of around EUR 350 million are expected for restructuring, in particular at Steel Europe and Automotive Technology. In addition, the payment profiles in the project business, especially advanced payments and Marine Systems, have a major influence on the forecast development. As for net income for the year, we anticipate an amount of between EUR -800 million and EUR -400 million. This includes considerable provisions for restructuring, particularly at Steel Europe. Our forecast takes account of both external challenges and internal measures. The expected sales performance is a direct consequence of the difficult market environment.
At the same time, our adjusted EBIT shows that we can hold our own operationally, a clear sign of the effectiveness of the efficiency and restructuring measures we have already initiated. The free cash flow and net income forecast clearly shows that 2025-2026 will be a year of implementation, restructuring, and strategic adjustments, such as the reduction of production capacity for steel, are impacting on the figures but are creating the basis for sustainable improvements. In the medium term, we therefore remain committed to our financial targets. We are still seeking to achieve an adjusted EBIT margin of 4%-6% at group level, a significantly positive value for free cash flow before M&A, and reliable dividend payments for our shareholders. Finally, I want to note that the decisive implementation of our efficiency and cost-cutting programs in all segments has been and continues to be crucial to the performance of our businesses.
It is now a matter of holding this course and remaining consistent in implementing our measures. Transformation is a good point to hand back to Miguel.
Axel, thanks. Ladies and gentlemen, we have a clear goal for the future. We are realigning the group. The long-term goal is a stepwise transition of all businesses to standalone solutions that are open to third-party investment. We are jointly transforming thyssenkrupp into a financial holding company with strong independent entities under the shared umbrella of the thyssenkrupp AG. Standalone solutions for the segments will massively strengthen their entrepreneurial freedom, offering them new growth prospects for decision-making powers, more decision-making powers, greater flexibility to make investment and marketing decisions, and individual access to the capital market. At the same time, the new structure gives the independent companies increased accountability and more transparency. Taken together, these are a significant lever for improving performance sustainably.
In the process, we are also realigning the corporate functions. Headquarters will, in the future, focus on the financial management of the entire portfolio. This realignment is a process planned to take several years, which we approach with determination and clear objectives, as well as with the appropriate sense of proportion. This is because it is important to us to implement changes responsibly together with all involved parties. We build standalone structures for our segments subject to their capital market readiness. This compromise is not only a forward-looking strategy but also convincing results as structures for independent action. This is the foundation needed to create the basis for the next step. In those businesses where a standalone solution is not yet possible, we will simultaneously provide targeted support to boost performance and competitiveness. This is a pragmatic approach, reliable and based on growing value.
For our workforce of more than 93,000 employees throughout the world, this means that there is clear direction and a prospect for the future. As part of the group's comprehensive transformation, ensuring strong social protection for our employees remains a key priority. In early December, thyssenkrupp AG and IG Metall therefore agreed to extend the existing framework agreement. The shared objective is to enhance the competitiveness of the individual businesses while securing jobs and locations for the long term, wherever possible. We want to take this opportunity to emphasize that this transformation would not be possible without the outstanding commitment of our employees. They are the beating heart of our company. Their dedication and willingness to help shape changes make the difference. Their commitment breathes life into our ACES 2030 future model. On behalf of the entire executive board, I would like to express my thanks to them explicitly.
Let's now turn to our segments. First and foremost, the impressive stock market debut marking the completion of the standalone process for TKMS in October. The response of the corporate market was very encouraging. The shares started trading at EUR 60 on October 20 and closed the first day of trading at EUR 81. This meant that TKMS had reached a market capitalization of around EUR 5.2 billion, significantly higher than many analysts had predicted and the classic consolidation of value for our shareholders. This positive development was the result of hard work, careful preparation, and a convincing growth story. In the meantime, TKMS meets the Deutsche Börse criteria for inclusion in the MDAX and will be admitted to the second most important German index as of December 22.
By repositioning TKMS, we have combined the best of both worlds: the entrepreneurial freedom of an independent company and the stability of a strong anchor investor. Today, the company is Europe's only fully integrated system house for maritime defense. With around 8,600 employees and a record order backlog of EUR 18.2 billion as of the reporting date, TKMS is ideally positioned as a maritime powerhouse. In addition, new orders are in the preparatory phase. For example, the Norwegian government has announced plans to order two more submarines from TKMS. We have systematically improved performance in recent years while also making strategic investments. In Kiel alone, over EUR 250 million went into one of the world's most modern shipbuilding halls. Another three-digit million euro amount is planned for the Wismar site.
With its IPO completed, TKMS now has the necessary flexibility and access to the capital market to meet strong demand, grow further, and extend its technology leadership. We are therefore very much looking forward to accompanying TKMS on its onward path and shaping a successful future together. It is crystal clear to us that Germany and Europe need a strong steel production base and one that is environmentally compatible. But the boundary conditions continue to be challenging. Weak demand in key customer industries, in particular the automotive industry, is weighing on steel, and the prospect of supplies of green hydrogen for sustainable steel production still seems remote. At the same time, U.S. import tariffs are adding to the pressure.
It is all the more important now to take effective EU trade defense measures against unfair imports, in particular of low-priced goods from Asia, as well as competitive energy prices and more domestic value creation. Companies, including ours, are also required to play their part. We have to do our homework now to create the conditions to ensure that steel can continue to be produced in Duisburg in the future. It is to do just that that the Steel Executive Board has developed the Industrial Future Concept, the roadmap for a competitive, modern, and sustainable steel production. A significant milestone on this road was the signing of the collective restructuring agreement with IG Metall. It finally opens the path towards operational implementation of the Industrial Future Concept. It focuses on three points. Firstly, we continue to systematically drive the technology and quality leadership of our steel segment.
For this reason, we have realized major investments: the new continuous caster for the modernized hot strip mill, including two new walking beam furnaces and a fully automated slab logistics system. This gives thyssenkrupp Steel one of the most cutting-edge plant networks in the European steel industry, a decisive step in consolidating its technological leadership and meeting the growing requirements of our customers. Secondly, our future concept envisages a reduction in shipping capacity from around 11.5 million metric tons at present to a target level of roughly 8.7-9 metric tons per annum in order to adapt to actual market demand. What this means is targeted site consolidation, optimization in production and admin, and an adjustment to personnel expenses by an average of about 10% by 2030. These measures will systematically drive our realignment. Another key component relates to HKM.
On April 25, the executive board of Steel Europe resolved, with the approval of the supervisory board, to terminate the supply agreement with HKM as of December 31, 2032, ending the obligation to purchase around 2.5 million tons of steel every year. This is an important step towards adjusting capacity. Independently of that, we expect that all shareholders of HKM will act in joint responsibility to find a viable solution for the employees and the site. It is clear that the separation from HKM is a necessary step for thyssenkrupp Steel to achieve a sustainably competitive cost structure, safeguard our Duisburg site, and to put the steel business in a financially robust and future-proof position. And thirdly, we are committed to continuing the green transformation of the steel business. We are keeping to our plan of building a direct reduction plant in Duisburg.
Despite the complex environment and existing regulatory uncertainty, we are making an upfront investment in its construction and planned operation. We will thus create the foundation for using large quantities of green hydrogen in Germany and make an indispensable contribution to climate change mitigation. I will come back to this shortly. The fact is that this approach is a clear commitment in Germany as a business location and to our responsibility for the environment. On the basis of this process, we can now also explore new strategic options. As you know, Jindal Steel has submitted a non-binding indicative offer for the steel business. Against this background, we have ended the discussions with EP Group and received the 20% interest back from EPG. We are currently engaged in a constructive exchange with Jindal Steel, with the ongoing comprehensive due diligence at the center. It forms the basis for potential next steps.
Let's now talk about Material Services. This segment is transitioning from a traditional trader to a modern supply chain service provider. However, the market environment of Material Services is also going through a period of change. Global shifts in trading, new competitive conditions, increasing regulation, and economic uncertainty are creating greater complexity and reducing the ability to plan. Today's international players have to respond to these developments with flexibility through digital channels and with our customer proximity. And that is exactly the basis for our approach. We focus on expanding the supply chain business and AI-based digitization and on sustainability. Especially in times of global trade conflicts and disrupted supply chains, we see the kind of added value that Material Services can provide to customers in Europe and North America.
It is important to note that Materials Services has demonstrated for decades, including in challenging market phases, that it is able to generate reliable cash flows and solid returns. At the same time, the market offers opportunities for consolidation in both Europe and North America. We are on a clear course in this regard, prioritizing growth and further development in the USA. We are already among the top 20 warehousing providers, strong evidence of our successful growth path, and a basis for further expansion. By acquiring WAVES, a software provider for ESG sustainability data and reporting in Luxembourg, we have already boosted our portfolio of digital solutions. As mentioned earlier, the difficult situation of the automotive industry is also affecting our Automotive Technology segment.
The ongoing changes and massive crises in the global automotive industry, including structural market upheaval, technological transformation, and noticeable reluctance to engage in new business, are having an enormous impact on the segment. Our current structures make it difficult to keep up with international competition in a sustainable way. And as a response, the executive board of Automotive Technology has launched a global structure program that cuts costs, optimizes processes, and pools support functions. Costs are to be cut by around EUR 150 million in total. This also means that around 1,800 jobs will have to be cut primarily in the corporate functions and administrative areas. Alongside the global structure program, AT will also have to implement site-specific measures. This is because even though measures were initiated at an early stage, some steps are not enough to fully account for the structural changes.
Socially responsible solutions are being sought together with the employee representatives. The AT executive board is making sure that those affected receive individual offers of support to make the transition as smooth as possible. Another measure initiated by Automotive Technology is a comprehensive organizational realignment of the business. The segment will in future focus its portfolio clearly on four customers and technology-centered areas: chassis, components, aftermarket, and forging business. Four new business units have been created accordingly. Each of these units is to have the ability in future to further improve its operational efficiency, finance investments from its own resources, and generate sustainable, profitable growth by actively taking advantage of market opportunities, for example, as part of the transition to e-mobility, especially in the strategically important focus market of China.
The current business units, Automotive Body Solutions, Automation Engineering, and Springs and Stabilizers, are not part of the new structure and will be continued separately. New development prospects are being explored for these businesses, including in the form of partnerships of new owners. We initiated in this context the sale of Automation Engineering to the technology company Agile Robots in November. Subject to the usual regulatory approvals, we expect the transaction to be completed in the coming months. Although the market ramp-up of green technologies is advancing at a slower pace than many had hoped, there is no doubt about the long-term trend. The direction is clear. According to the latest report of the International Energy Agency, around $2.2 trillion were invested in renewable energies, power grids, storage units, and other clean technologies in 2025, twice the combined total spent on oil, gas, and coal.
This is why we are pressing ahead with a focus on performance and future viability in our Decarbon Technologies segment. Uhde recently entered into a strategic partnership with Uniper to bring a large-scale ammonia cracker to industrial maturity. The aim of this partnership is to convert imported ammonia into hydrogen on an industrial scale and make it available for a wide range of industries such as energy, steel, and chemicals. Rothe Erde supplies bearings to the first German wind park for an industrial plant, our rolling mill in Hohenlimburg. This will ensure that the site is, for the most part, supplied with green and wind power. This is a pioneering step in industrial decarbonization. Polysius, on the other hand, supplies CO2 capture technology to the Titan Group in Greece for a large-scale project of the Kamari cement plant.
It uses oxy-fuel technology to capture most of the CO2 and prepare for long-term storage or industrial use. And thyssenkrupp nucera has successfully completed the acquisition of key technology assets from the Danish company Green Hydrogen Systems. By taking this step, the electrolysis specialist is expanding its technology portfolio by adding high-pressure electrolysis, a development that will boost the company's position in the global market for green hydrogen. And these examples demonstrate that Decarbon Technologies are sought after internationally as a partner for green transformation, especially in the global growth regions. The continued expansion of this segment is far more than an entrepreneurial decision. It's a key contribution to industrial resilience for thyssenkrupp and for Europe as a business location in general. This is why we are systematically honing Decarbon Technologies to be ready for when the markets for green technology are finally ready for takeoff too.
Therefore, it is important to have the right framework right now. I'm convinced that we will only be able to create the conditions for the long-term success of a sustainable European industry if policymakers, the economy, and society act as one. A key lever for this is a sovereign energy supply. Specifically, the energy supply has to meet these criteria. It must be reliably available around the clock, 365 days a year. It must be affordable, even against international competition. And it must be clean so that we can mitigate climate change and achieve our targets. And hydrogen is key in this process, as it is the only material that can create complete climate neutrality on an industrial scale. Three key requirements have to be met. First, we need to speed up the development of infrastructure.
We need a European hydrogen network that transports energy from the Iberian Peninsula or from Scandinavia to the heart of Europe's industry. Cross-border pipelines will be required. Moreover, import terminals and ammonia crackers must be planned and realized urgently. Slow approval processes must not hold back this expansion. The second thing we need is competitive hydrogen prices and volumes. At present, green hydrogen is still three to four times more expensive than fossil fuel alternatives. No company today is able to shoulder this green premium alone. Europe must, therefore, work more closely together on hydrogen procurement and pool demand in order to generate economies of scale and bring down prices. We want to be a pioneer in driving the necessary steps with the like-minded players, and third, we need a pragmatic approach during the current transition phase.
If we focus exclusively on green hydrogen, we will not be able to meet demand in the short and medium term. Low-carbon hydrogen, as well as natural gas, will temporarily have to be accepted as part of the solution. In this way, we will be able to get up to speed during the transformation and to finance the change to avoid permanent dependence on state subsidies. Ladies and gentlemen, a year of clear decisions is behind us, a year in which we bravely embarked on a new path and set the course for the future. We are developing thyssenkrupp AG into a financial holding company, thus strengthening the independence of our segments. This will increase their entrepreneurial freedom, encourage innovation, and unlock new growth prospects.
In the current fiscal year, we are already in the middle of the implementation phase, having reached initial milestones in the successful stock market listing of TKMS and the signing of the key collective restructuring agreement to TKSE. For the transformation of thyssenkrupp, we are pursuing an individual approach for each segment and ensure that we create the conditions for sustainable success, either by finding a standalone solution or initially by boosting competitiveness. At the same time, we are actively involved in shaping the major areas of the future: the decarbonization of industry, secure energy supplies at competitive costs. This is because a strong, resilient industry is indispensable for Europe's future and thus for the good of all of us.
Therefore, at thyssenkrupp, we will put all our energy into developing thyssenkrupp and strengthening the future of our company and the industry for our customers, for our employees, and for society. Thank you.