This article first appeared on GuruFocus .
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Revenue (Q3):EUR8.8 billion, up 8% year-on-year.
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Revenue (9M):EUR24.4 billion, down 1% year-on-year (up 2% adjusted for portfolio and currency effects).
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EBIT adjusted (Q3):EUR183 million, up EUR28 million year-on-year.
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EBIT adjusted (9M):EUR591 million.
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Net Income (Q3):EUR34 million, supported by write-ups at Steel Europe.
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Net Income (9M):Minus EUR311 million, impacted by restructuring provisions in Q1.
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Free Cash Flow before M&A (Q3):Minus EUR114 million, improving by EUR140 million year-on-year.
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Free Cash Flow before M&A (9M):Minus EUR1.9 billion.
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Net Cash Position:Approximately EUR2.6 billion.
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Workforce Reduction:FTE down by approximately 3,500 year-to-date.
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Steel Europe Write-ups:Approximately EUR400 million related to the HKM exit.
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HKM Impairment Losses:EUR276 million from classifying HKM as a disposal group.
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Direct Reduction Plant Funding:EUR252 million received at Steel Europe.
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FY Guidance - Sales:Lowered to between minus 3% and minus 1% versus prior year.
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FY Guidance - EBIT adjusted:Narrowed to EUR600 million to EUR900 million.
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FY Guidance - Free Cash Flow before M&A:Confirmed at minus EUR600 million to minus EUR300 million.
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FY Guidance - Net Income:Expected between minus EUR700 million and minus EUR400 million.
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FY Guidance - CapEx:Lowered to EUR1.2 billion to EUR1.3 billion.
Release Date: August 13, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Group sales up 8% year-on-year in Q3, showing promising momentum.
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EBIT adjusted improved to EUR183 million in Q3, driven by restructuring benefits.
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tk accelis spinoff on track with strong standalone equity story and increased midterm targets.
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Steel Europe EBIT adjusted more than doubled year-to-date, supported by restructuring and lower raw material costs.
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Marine Systems (TKMS) continues to build a strong foundation with an order backlog exceeding EUR20 billion.
Negative Points
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Group sales guidance lowered for the full year due to limited macroeconomic visibility.
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Automotive Technology segment faces soft demand, with EBIT adjusted declining in Q3.
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Decarbon Technologies suffers from hesitant project environment and project-related additional costs.
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Free cash flow before M&A remains negative at minus EUR1.9 billion for the nine-month period.
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Uncertainty from energy prices, Rhine River levels, and upcoming maintenance at Steel Europe adds caution to Q4 outlook.
Q & A Highlights
Q: Should we view the upcoming Steel Capital Markets Day as a prelude to a spin-off similar to Marine Systems and Accelis, and is this the preferred route to unlock value in that business? A: Miguel Borrego (CEO) clarified that the CMD is intended to explain the impact of three major milestones: the restructuring plan agreement, the HKM exit, and the new EU tariffs and quotas. While the goal of driving Steel into independence is clear, the company is taking a step-by-step approach and will provide more details on the path forward after the CMD.
Q: The group's Steel Europe guidance implies a weaker Q4. Is this overly conservative, or are you signaling significant weakness? Also, is Steel Europe still profitable at the adjusted EBIT level for Q4? A: Axel Hamann (CFO) stated that the guidance reflects "more caution than weakness" due to uncertainties around energy prices, the Rhine River situation, and upcoming planned maintenance at the plant. The maintenance is expected to last for roughly two quarters, impacting Q4 and Q1.
Q: Can you provide color on how much of the profit uplift at Accelis (Materials Services) is due to inventory effects from selling materials at higher prices versus structural improvements? A: Axel Hamann (CFO) explained that the uplift is a mix of both volume and price increases, with the majority of the improvement based on volume.
Q: Can you confirm a potential profit uplift in Steel Europe from the labor restructuring of, say, EUR400 million to EUR450 million? A: Miguel Borrego (CEO) declined to provide specific numbers, stating that this is exactly what the company will be transparent about at the Capital Markets Day at the end of September. He emphasized that the CMD will detail the bottom-line impacts of the restructuring, HKM exit, and tariffs.
Q: Regarding the DRI plant, there are reports of potential renegotiations. What could be the upside here? A: Axel Hamann (CFO) clarified that there is no renegotiation on the financial terms or funding (EUR3 billion total CapEx with EUR2 billion in public funding). The talks are about the extent to which hydrogen needs to be used in the first instance, which is being negotiated successfully with the EU and national authorities.
Q: Now that HKM is being sold, can you give an order of magnitude of the impact of that business on Steel Europe's underlying EBIT? Also, if you were to sell your TK Elevator stake today, would you incur capital gains taxes? A: Axel Hamann (CFO) noted that the EUR400 million write-up at Steel Europe following the HKM exit provides a calibration of the positive impact of the sale. Regarding TK Elevator, he stated that capital gains tax would be "insignificant" from his perspective.
Q: You have lifted your EBIT guidance and cut CapEx, yet free cash flow guidance remains unchanged. Is this entirely due to changes in net working capital assumptions? A: Axel Hamann (CFO) confirmed the free cash flow guidance of minus EUR300 million to minus EUR600 million, stating the company is optimistic about reaching it. He did not specify changes in net working capital but reiterated the confirmation of the guidance.
Q: Can you update us on the provisions for any potential future payments to HKM? Will these sit in the Steel entity or the parent entity? A: Axel Hamann (CFO) clarified that a low to mid three-digit million euro amount for HKM will be paid off from the Steel entity over the next three years. He also confirmed that pension provisions were transferred to HKM, so nothing will sit with Steel or TKAG.
Q: Can you give us some color on the starting balance sheet you are aiming for Steel, particularly regarding the allocation of net cash and pensions? A: Axel Hamann (CFO) stated it is too early to discuss the capital structure, as the company will address this when the time comes. The focus for the upcoming CMD will be on the performance of the Steel business.
Q: How much of the EUR3 billion budget for the DRI plant has been paid so far, and what is still due? A: Axel Hamann (CFO) stated that around EUR1 billion of public funding has been received so far. The net payment after funding has cost the company approximately EUR300 million to date, implying a gross spend of around EUR1.3 billion.
Q: How much of the pension liability is leaving with HKM, and is it time to think about an attributable pension liability rather than a consolidated one? A: Axel Hamann (CFO) confirmed that total pension provisions are around EUR5.2 billion, with about half associated with Steel. The amount transferred to HKM is not significant (a low three-digit million euro number). He added that ideally, every business should be able to finance its own capital structure, including pensions, as was done with tk accelis.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
