Ladies and gentlemen, welcome to the first Alpine AG publication, first half of the Business Year 2026-2027 Conference Call. I am Moira, the Chorus Call Operator. I would like to remind you that all participants will be in this and only mode, and the conference has been recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. Operator Assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Dino Malkic, Head of IR. Please go ahead.

Welcome ladies and gentlemen, here is Dino Malkic, Head of Investor Relations of Stalpine AG. Thank you very much for participating today. We are here to give you an update about the figures of the first half of business year 2026-27 and the management will also provide you with an updated outlook. After the management remarks, you will be able to ask your questions. And with me today is Herbert Eibensteiner, our CEO, and Gerald Mayer, our CFO. And I want to hand over to you, Herbert. The stage is yours.

Thank you Dino. Good afternoon ladies and gentlemen. We are pleased to present our results for the first half of our financial year. I just jump directly to the executive summary Yes, when we start on the left-hand side, despite this challenging market condition, we were able to achieve a solid result. Turnover remained virtually unchanged compared with the same period last year. EBIT and EBITDA were above prior year's figures. When we look at our positive parts of our portfolio as the last time railway systems, very good aerospace and power industries, is still strong with very good order book and also warehouse and rack solutions is still very solid long order book far into next year. When you look at the steel market update, we think that the EU safeguard measures and CBAM turned out positive as a trade measure and on the The negative side especially with our tubes and section business was this additional US duties which were impacting this business most recently. When we look at our reorganization activities, high performance metals is well on track and all these measures almost completed. So we see this first positive results out of that. and also the reorganization in automotive body parts is on track. There are some activities to do till the end of the year and we will come after that also that we see that some additional measures we will have to implement it. Green Textile. It's it's as as last time everything is on time on budget then we will ramp up this first two electro arc furnaces in the first half of 2027 and we have adjusted Our guidance due to increased energy and logistic costs as well as additional tariffs in tubulars as I mentioned before. We had some logistic problems in steel and we have lowered the upper limit of the outlook whilst leaving the lower limit unchanged. So what is the macro view on our markets? I'll start with Europe. I mentioned before these logistic costs and in particular high energy costs. Since August, we see low water levels around our factories. and we have received these new tariffs and additional duties in tubulars. And the positive thing in Europe is that we have these new safeguard measures in place with all the positive effects around it. On the left hand side, second biggest market, North America. Thank you very much. Thank you very much. You know that stable growth is mostly supported by exports all over the world, but with a weaker domestic economy. And when you look at Brazil, it's, I would say, very low growth rates, high interest rates. and also deliveries from South America to the US are difficult. They have the same tariff regime as we in Europe and the economy is impacted by Chinese imports. Green Textile, again, on time, on budget. Everything is so far prepared for start-up. Just to remind you, we will have this commissioning of the electric arc furnace In Linz and in Donovitz it's an investment of 1.5 billion and we are more or less on track and at the end of this next year we will deliver green steel, greener steel to our customers. Let's jump to our divisions. Strong performance in steel division. We had some costs, inflations, energy costs, logistic costs driven by this Middle East conflict. For us it's mostly gas which has influenced our results and these higher logistic costs and from August onwards we had these difficulties with low water levels and some constraints in outbound logistics. The outlook is for Steel Division is that we see these higher costs and when it comes to heavy plates, further postponement of energy projects in the Middle East, safeguards, CPM is positive, this price trend. is supported by these activities and we have a positive outlook in prices. Why we see a normalization of inventories, European inventories in the next weeks and months to come and we have positive signals for the negotiations in January 2027. High-performance metals, it's a, you know, tooling business is a worldwide business. It's more or less mixed development across the region, but improving. We have a very robust demand in food and beverage and medtech and mining, which are smaller parts of this business. And we have this very positive trend The Outlook is and many more. Metal engineering railway system, very good. Strong order book also for next years. Again, these US duties were impacting especially our OCTG business in Austria. and the outlook is that all those duties will remain and affecting this tubulous business. We have reacted with a reduction of shifts and 150 less FTEs till March. and also wire is confronted with a very weak demand in automotive business and railway will stay very, very well. We've promised you that we look a bit closer to railway system. You know, we have, it's the largest segment in railway is turnout. And again, we see a lot of positive development across regions in EU Germany, in US class one, but also new activity. In Canada and also in China, we are in discussion for new high-speed projects. Most of you know that the basis or the core of our business model there is replace and maintenance. This is good, this is the basics, but there are some projects In the future for us as well and especially our signaling segment is very strong. Signaling is all these sensors and digitalization we do around the turnout system and axle counting and the detection of problems of the This is a growing business for us and as I mentioned before, the book is good and China and the US will also be improving in the future. Metal forming, difficult, I have to say. We are in the middle of the reorganization of automotive components. It's good, on track, on plan, with positive effects, but there is a way to go. We have to reduce another 150 FTAs till the end of the business year. This was the plan. Everything is so far on plan, but due to the Even lower than expected demand, we plan an additional project with another 500 people till 2028 to make redundant and then we think we can achieve this 4-5% EBIT in that area. Thank you very much. Some complaints around new activities of new projects. But warehouse and rack, very good, good performance, good results, high return on capital employed, and good order book. And when you look at the outlook, so we stick to this reorganization measures in We have measures in place. Now I would like to hand over to Gerald for his presentation.

Thank you, Herbert. I would like to give you now some insight to our H4 performance and perhaps also add some guidance information So, revenue, as Herbert mentioned before, we are roughly at the level of prior year. Going into a little bit more detail, you see that, in particular, HBM division is strongly above prior year. The main reason there is that we had sharp increase in some alloying metals, which means raw material price increases drove, in particular, higher revenue, although the mix was positive. and in general I will talk about this perhaps not just now but repeat it so that we see some slight tailwinds there in HPM division in general. Metal forming was also good in particular in warehouse and rack solutions we see higher revenues. In steel we are slightly below prior year the main reason is less heavy plate projects You know, and we discussed about Middle East and energy projects there which are postponed. So this is what we are seeing there. On the other side, we saw positive impacts from CBAM and from safeguards. And of course, and this was also mentioned in the presentation of Herbert, We had dry weather here in Austria and the water level of the river of Danube was fairly low and so we have been suffering and are still suffering in terms of logistical challenges I would say regarding outbound logistics in particular for heavy plates. Profitability is fairly solid, 846 million plus 17%. Of course, this includes this one-off effect we reported in first quarter. It's unchanged, so roughly 100 million plus in our HPM division. And going into a little bit more detail, In terms of profitability, you see that the steel division is slightly above prior year level HPM. Also, on the one side we had this one-off effect, but there was additional operational positive elements there, so that we are Thank you very much. came up with 846 million. Free cash flow performance 24 million. Of course in Q2 it was negative. One main driver that it was negative in Q2 was again the River of Danube. So there are thousands of tons where we were not able to ship it to our customers. So this built up, they were produced, we built up stock there and this had a significant impact in our working capital. and so this is one of the reasons. On the other side we have these high investments in our green tax deal projects. We are totally on track there so we invested roughly or paid for the investment cash flow for CapEx was 530 million roughly in the first half. If you add this up multiplied by two you add roughly our guidance of 1.150 so this is still unchanged. So we are on track there. On the positive side, we had 150 cash in from the sale of Böhler Profil. Our guidance in free cash flow stays at 250. So we reiterate what we said three months ago. Of course, we have to do something and have to prove. But we have many good reasons there. And I'm optimistic that we will end up at this 250. On the one side, I talked about the river of Danube, 100, more than 100, perhaps million negative impact in the first half to our working capital. On the other side, we are in the middle of projects, reorganizational projects in HPM, so they reduced throughput times, for example. We have the tailwinds from the market where we are confident that we gain there. Again, ground. And in addition to that, we had a major maintenance activity in Donowitz from one of our blast furnaces. And we also had to build up stock during the year and we will consume the stock until the end of the year. So there are some good reasons there. But happy also to answer the questions if there's something left. in the Q&A session. Let's talk a little bit about the bridge. 722 was the prior year first half. Now we are at 846 million. Of course, we had higher price levels. I said in HBM it was driven in particular by higher raw material prices, but we also saw higher price levels in steel division. I also mentioned the reasons there. In raw materials we also had positive FX effects in there and so the gross margin in Greece was 100 million mainly referring to steel division and HPM division. Mix and volume is negative with 122 million. I would say roughly 70 million plus refers to a weaker mix the rest is lower volumes and the miscellaneous we have you see mainly two major effects one is the 100 million one-off and I also mentioned it here at the comments. On the other side, you all know and you are aware that we have big reorganization measures. We reduced full-time equivalents, excluding now this Böhler Profil transaction of 850 people, roughly. And so, of course, this comes with a positive impact also there. The second bridge here, I would like to present to you the deviations from the individual, from our segments. you see again this 135 strong plus in HPM but you also see there is that we had in addition to this 135 million plus there so this is tailwind optimized cost structure of course with a significant impact there and so we are really doing well there I would say in steel division plus 10 million so at the level of our prior year and I mentioned these energy projects before which are not accessible for us at the moment with the war in Middle East. On the other side we had very positive developments also in our steel division and of course there's still this higher logistic cost which we are of course facing like all the other players I would say out there. Yeah, in metal engineering miners 15 million mainly driven this reduction by tubulars, the rest is plus-minus stable. In metal forming you see a slightly better profitability there. I have to say we expected a little bit more there but from there we were suffering a little bit in the US and Herbert mentioned it before. from the steel shortage situation. We had a weaker market when we talk about role forming business and we also have some internal issues in some projects. We were not, let's say, we had some issues which we had to solve. So yeah, and so this is how we end up at 846 million. I would like to share with you and some of you saw this slide or in a similar form during our capital markets day some weeks ago. So in HPM division, high performance metals division, We reduce the cost structure or optimize the cost structure substantially by 150 million. This is one of the reasons why we are doing better this year. We completed more or less this warehouse consolidation activity. So until end of this business year the bulk is done and we do not expect additional reorganization measures necessary. So we are very confident that we will end up 28, 29 at this means clean at this 400 million because this year will not be far away including this one off. In metal forming division you see a 70 million impact also a substantial cost reduction impact structural costs are dramatically down there. On the other side, of course, we all understand that the market and the situation for our customers is not easy. And this is also the reason why there's still something to do for us. And Herbert mentioned some 500 people roughly before in his presentation. Until end of this year, we expect 250. But this is the old plan, this ordinary plan that we anyhow We are still confident to have this 400 million by end of 28-29. My last slide is our cash flow or capital allocation bridge. Funds from operations were at 565 and then we had this negative impact from net working capital. I explained to you that I'm confident that we will improve that dramatically until year end for good reasons. One is the river of Danube. The others are these projects which are in place and where we walked the talk also in the last month. in HPM division in particular. We had this blast furnace relining in Donauwitz where we will reduce inventory. Then there is another important one, this is tubulus. As we started and went into this hibernation mode for tubulus in particular and with more power after this anti-dumping and CVD news for us, we also reduced their Inventory. So we are confident that we will end up and go back perhaps not to zero net working capital change until year end but nearly. So this again brings us then mainly to this 250 million. Maintenance capex to 60 I would say a normal level for us. Disposal 158. This was Böhler Profil sale in Q1. We had some growth capex. There are many small projects. In decarbonization, I mentioned that we are on time, on budget there. I expect 400 until year end in decarbonization projects and I reiterate this 1,150 for capital expenditures or investing cash flow, cash outs until year end. and so the free cash flow now is at 24 million plus and we expect around 250 million until year end. So this was it with my presentation and I hand over to Herbert for the outlook. Thank you.

The last slide is the outlook. I think we have already presented everything around it. When you look at the positive factors, safeguards, CBAM, stock reduction is ongoing in the steel sector. We have these positive developments in railway. In the aerospace business, on the other hand, the self-help measures are more or less on plan. But we have also these negative aspects, higher energy prices, high logistic costs, bottlenecks in logistic and the waterway. It's not finally solved, I have to say. And also these additional tariffs working against it. We have now a revised forecast with this lower upper end of the guidance and we have left the lower limit unchanged. That's the guidance. Thank you for your attention and we are glad to answer your questions.

The first question comes from the line of Tristan Gresser from BNP Paribas. Please go ahead.

Yes, hi, thank you for taking my questions. The first one is on your cost performance within the steel division. If we look at your results, it looks pretty good. I mean, you had weaker shipments, negative mix effects, but you still managed to keep a bit up a ton stable quarter on quarter, despite the energy and logistical costs you flagged. So wondering if you could discuss that and Also, maybe it comes down to those energy and logistical costs not being really present in Q2 and more into Q3. So if you could also touch a bit on the bridge for the steel division into Q3, that would be helpful. I'll start there.

I think Tristan I try to give you perhaps a little bit more insight there. So I would say first quarter was excellent, second quarter in steel so we had a fantastic production level and unfortunately for us the issue, the main issue was shipments. I would say outbound logistics was really difficult so we tried to optimize that but it was still a strong Q2 if you would compare it to In Q3 I would say it will be, this is our take and it's normal as it is also the Christmas, for us the Christmas quarter, it should be weaker. The prices for natural gas started to increase sharply during Q2. and of course this has been an impact in the following quarter in particular. Our main, I would say, and this is unchanged, normally we have a very good ability to pass on a higher cost to our customers but always with a time lag and this is what you will see there and this is one of the reasons we have there that we are a little bit and perhaps below some of the expectations from you guys. So this is how it is and in Q4 we expect another solid and good quarter for our steel division. So in general I would say the demands from the markets are healthy and okay and so throughout everything which was Thank you very much.

No, that's really helpful, but I will just follow up on that. Would you say the energy and logistical additional costs you saw in Q2, was that already the full run rate and you expect those costs to be relatively steady or you had only 50% of that in Q2 and 100% we'll see that in Q3 just to calibrate? Would you accept shipments for the full fiscal year to be down for the steel division?

I would say the shipments I would expect, you know, always the assumption is that we have a positive development there regarding the water levels at the river of Danube. So this is very important for us now. It is still not good. And so given that, that we see a recovery there, we should have a better second half in terms of volume than first half in terms of volume. We should catch up a little bit from what we lost in the first half, so this is with regard to volume. In terms of cost, of course, we saw the costs sharply increasing, in particular in energy during the second quarter and so means that we have a higher impact than what we expect in Q3. and so this is simply the fact what we are facing at the moment. You all understand that we do some hedging, that we have a storage facility. This softens this effect a little bit, the storage facility for natural gas I mean. But we are still affected to some cost inflation there in particular for Q3. Perhaps one reason is also that our customers still had fairly high stock levels at the beginning of this quarter and of course things are normalizing there. This is also what we see. Things are improving but it takes some time. So this is how I would summarize everything.

Okay, that's clear. And my second question is on contracts. I think a year ago, it was a bit similar than today. There was some optimism initially, but when contracts eventually settled in December and January, They probably settled a bit lower than the initial expectation. Do you think the situation today is different from a year ago from that perspective? And would you say a triple digit increase in contracts is very ambitious or is doable?

I think that's a relevant question. Last January it was more or less driven by this expectation of CBAM and and safeguards, I would say. Now we see that the energy prices are higher and that the pressure from the market, the positive momentum is here, but the pressure on the market is maybe a bit less, so it's mixed. But when you look at the higher energy prices and there is a, A clear plan to enlarge the margin. Everybody has to go for these figures you mentioned.

Okay. That's clear. Thank you.

Sister, you know that's the plan. That's not the result so far.

Okay. Then that's clear. Thank you.

The next question comes from the line of Dominic O'Kann from JP Morgan. Please go ahead.

Hello. Yeah, just two quick questions on my side. So, the first, just trying to differentiate between what is seasonal, cyclical and structural, specifically on the cost side. Given that we have seen this big step up in energy prices, in particular gas prices, in the last one month, can you just talk to us about how you are positioned in terms as we look into calendar 2027 for energy pricing? Are you required to start negotiating longer term energy contracts at current market prices or do you have flexibility to delay some of those conversations? And then my second question, just with regards to the working capital build and specifically heavy plate during the period, do you I notice you won't have a force majeure in place. Can you talk us through how you will clear the inventory as we look forward? Will you be selling at the market price or is there any risk to some lower revaluations as you look to clear those inventories in the next one to two quarters?

Hi Dominik. Regarding our energy, I think you said supply and regarding cost. And in energy supply, just to give you a rough number, for us it takes roughly a little bit more than 6 terawatt hours. Thank you very much. In pricing, our strategy is, number one, that we actually added price deviations to give it to our customers, number one, so we have some smaller contracts where we have Actually, energy prices are part of an element also of our sales contracts. The bulk in particularly here in Linz is that we normally manage, and this is historically proven, that we manage to hand over In addition to that, we have our gas storage facility as every megawatt hour, every kilowatt hour or cubic meter we use from and consume Thank you very much. Back to back, of course, is our preferred method anyhow. So this is something, of course, we do. Working capital built in heavy plates. So I think we sit roughly 80,000 tons more than expected in heavy plates here on our site in Linz. This is a rough number at the moment. Our clear target there is to reduce this down dramatically until year end and we do not expect negative impact there. It's not just Fürstalpine which is affected by this situation, also many of our competitors and market players there and market participants and so we of course in talks with our customers it's not funny because we are a well-accepted and well-known supplier where delivery performance is one of our top priorities so what we are actually doing at the moment not just at the moment we also did this in the past We try to have other routes available, other ways and means how to transport in particular this very heavy stuff to our customers. We can do it to a certain extent by train using specialty equipment there. But the pity is that at the same moment when the river was very dry or is very dry, also we have these construction sites in particular northbound through Germany at the moment for the main train tracks. We are working on that, but we do not expect, to make it short now, a major negative impact.

Just to ask on the gas storage, what's the current level of gas storage you have?

750 gigawatt hours, 0.75 terawatt. Okay.

Next question comes from the line of Christian Agarwal from Citigroup. Please go ahead.

Hi, thanks a lot for taking my question. A couple of them have been answered, but a follow-up question on the guidance cut. So is it a better way to understand that 150 million cut in the guidance from 1.85 to 1.7 at the upper end? That 50 million of incremental cost is already being seen into the Q2 of the business year, and then incremental 100 million cost actually comes into the December quarter. Would that be a fair assessment to look at the guidance cut?

I didn't think about it that way, but it does not look, for me at first glance, it doesn't look too wrong. A part of it is definitely also part of our first half, for sure the case, yes. I mentioned in my presentation that we expected, for example, more in metal forming and so on, and this is definitely the case there. So not too wrong.

I understand. Thanks a lot. And then does it mean that if the energy cost stays persistently high, then March quarter probably will also be impacted from those higher level of energy cost in addition to the guidance cut which you have taken?

I think, as we mentioned before, our business model is that we have to hand over higher energy cost to our customers. As significant contracts are renegotiated quarterly or yearly contracts, we do everything now to negotiate that into these contracts and we should not be affected perhaps a little bit and as long as prices are rising of course this always is tricky when they stay flat at this level as it is now I would say our clear target is that we have to hand this over to our customers.

But you know we have most of these negotiations in January and this is the time like what we have normally in that context.

Okay, thanks a lot. And then a quick follow-up on working capital. So you're saying there's a lot of plates and rent to be released in the Q3 and the Q4. So how should we look at the full-year working capital picture? Is it going to be a flat working capital or some kind of investment? And then consequently, does that change your free cash flow expectations for the business year 27?

So we roughly, let's say, added networking capital of 170 million or 250, I would say, I think it was Q2. From this one, so it should be, as I mentioned also before in my bridge, in my last slide in the bridge, we should go down to the direction zero so that it is flat again compared to start of the year. So this is our intention there with these projects and with these initiatives and simply with these facts I try to explain like normalizing water levels, which should support us there. So it should be perhaps slightly negative compared to 1st of April, but not too bad. The 60 expectation and free cash flow means this is one of the reasons why we are also confident that we will reach this 250 million performance for this business year. We also needed it, I think, two years ago, three years, one year ago, so we had this strong rebound then in second half. It's not unrealistic.

Okay, okay. I understand.

Thanks a lot. As a reminder, if you wish to register for a question, please press star and one on your telephone. Next question comes from the line of Bastian Sinagowicz from Deutsche Bank. Please go ahead.

Yes, good afternoon and thanks for taking my questions. A couple left, maybe firstly following up on energy cost, can I please follow up on the gas situation and maybe could you please give us a bit more detail on how the price level In that reserve compares to the current gas price and how much benefit from this, if anything, is reflected in the current guidance and updated guidance. And then the second question, just on restructuring where I think you follow, you're indicating that you are stepping up your efforts a little bit in seamless and also metal forming. So is there anything we should be budgeting for in terms of restructuring provisions in each 2027 and 28?

Regarding our natural gas reserve of 750 GWh, of course everything what we saw is also part of our guidance, so there is nothing as reserve left, otherwise it would be part of our guidance and so on. and how it works is actually normally we take out one kilowatt hour from the storage and on the other side we fill this new cubic meters into the storage so this is how it works and so we consume at an average price and this average price goes up in an increasing market and goes down step by step in a decreasing or falling market and the effect what we have there as I said before we have a little bit more than six terawatt hours we need annually for our operation 750 is in there so I would say roughly half a quarter is what we can do with our gas storage facility and this is also how we soften a little bit the impact for one quarter so yeah so this is how it works The reason that we have this gas storage is in particular secured supply. So we built it and we bought it during the time when the war in the Ukraine started. We have direct lines and supply via Ukraine to Austria. In order to be safe there, we decided to build a bigger gas storage facility. At this time, the pipe one was 1.5 terawatt in the past. And with the things developing there and getting and so on and so forth. This is the reason why we have it and how we do it. And it is in our guidance. Yeah, and restructuring was the second question you asked in metal forming. You know, there is 250 people, FTEs, left being reduced from our original projects. This brings us then from annual improved structural costs, 70 million to roughly 90 million. So this is number one. And what we added in this presentation that we assume that there will be something necessary in particular in addition to that because the need from our customers is even lower and so our expectation is that we have to further reduce step by step roughly up to 500 FTEs, it's an estimation, it's an estimate now, in the next two business years then, not this year, in the next two business years, step by step using fluctuation, pensions and so on, so no big extra Reinhard Nobaueru In addition to countervailing, for us it was clear that we have to do something there. And so we decided to reduce to exactly two shifts, minus 150 additional people until year end. Of course, we are negotiating there a plan with our employees. We started that. We have experienced the same situation one year ago where we took out, I think, 190 people roughly. and many others.

Thanks for that. Then maybe just staying on the topic of seamless tubes, and I appreciate I asked that question already in the last call, but I think with the tariffs now, you definitely face another layer of headwinds for your US exposure, and I think you've Thanks for this question.

I wanted to add this in my presentation. Our clear target is that we are confident that we will end up this business here at the free cash flow level of around zero. So the clear target there is not to burn money. and we are confident doing that this year. How are we doing that? Of course operationally, simply looking at an EBIT number, EBITDA number, EBIT number. We are not positive at the moment. We expect a negative impact there. This is part of our guidance. On the other side, as we reduced also business there, We will reduce inventories and so on and we will have positive impact there and of course we cut every type of and question every type of investment to do there and so on the normal stuff you are doing in being a fire brigade but we are in a clear hibernation mode situation there and The pity is that the original plan for us this year was to shift more to other markets. But you know that the war situation in the Middle East, of course, is not really helpful for this strategy. We are super confident that there is a bright future there for us. There are big projects in front of the door, but this war has to end. No one knows when this ends. So the strategy now is reduce volumes, which OCTG volumes, which are shipped We are confident that we can achieve that. We are working hard. People were actually anyhow preparing themselves a little bit for this situation. The outcome was even more severe than we expected. This is what we have to say with this anti-dumping number.

And I suppose you have been really caught a little bit off guard and by surprise by, I guess, the magnitude of these tariffs. But I guess when you talk about a negative EBITDA run rate this year, assuming everything just stays as it is, no relief, continuation of war, how far can you cut that loss into next year just by containment measures and whatever is in your control?

No, we are confident. So this will definitely not be a negative EBITDA. For sure not.

Okay, thank you.

Next question comes from the line of Patrick Steiner from Adobe VHS. Please go ahead.

Good afternoon. Basically one question left from my side. You mentioned that the bulk of the reorganization are done by the end of the business year, if I understood this correctly. Should we then expect the full benefits to be reflected firstly in the first quarter of 27, 28?

I think it's normal that when you finish such a program and you have seen the figure of 150 million cost reduction, we will benefit from them. That's clear that this is coming gradually over the year. But yes, that's the case and that's the reason why we see so far good results from HPM. Otherwise, it would be loss-making.

Okay, perfect. Thank you very much.

The next question comes from the line of Dominic O'Kane from JP Morgan. Please go ahead.

Hello. I think my question has actually already been asked. I guess my question was on the OCGT and the tariffs. When you've spoken about this previously, you were guiding back in March with the Q4 release that the products exposed to tariffs represented about, I think, 5% of metal forming sales. So, I think from memory, that was around about Thank you. That's all. Thank you.

The next question comes from the line of Tristan Gressel from BNP Paribas. Please go ahead. Mr. Gressel, your line is open.

Sorry, I was on mute. Thank you for taking the follow-up. Just on the OCTG business, Would you expect, given the headwind, that the metal engineering division H2 would be better than H1?

I was now on mute. I don't think so. So that it's doing operationally better and in terms of results H2 than H1.

Sorry, H2 will be not as good as H1.

Not better than H1.

Okay. Okay, that's clear. And just on the... Not 5A, you would say, huh? Yes. Okay. No, that's clear. And on the heavy plate business, if we were to think of a best-case scenario, When this business could come back, and I guess the lead times are also maybe long, so I don't know, is that something you would contemplate at some point in fiscal 2028 to come back, or this could take longer? Any thought there?

These projects and, you know, heavy plate is normally, when it comes to energy business, It's a project business, so all those projects we know and we would have expected in the last year are still available. They are just postponed, they are frozen because of the situation in this Middle East area, so it's always a question of financing. But there is no change in this project as far as we know. So it's not that we have to wait one or two years. We do expect as soon as we see a solution of this situation, I think within In the course of a year, we can see a pickup in this scenario. I think that nothing has canceled. That's the good news in this bad situation.

OK, that's clear. And maybe last question on metal forming. It came a bit below, I think, what we had in Q2. You mentioned that the market has been weaker than anticipated, need for more restructuring. So if we look at the sequence into Q3 and Q4, we should still expect some gradual improvement quarter over quarter. or is there anything else to flag on the outlook for that division?

This is our expectation, so we expect some improvements here throughout the year for the rest of the year.

Normally we think that Q4 as always will be the best quarter, even for metal forming.

That's very clear, thank you.

Any further questions, please press star and 1 on your telephone. Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Dino Malkic for any closing remarks.

Thank you, ladies and gentlemen, for the questions and for the fruitful discussion. Should you have any further questions left, please feel free to contact us and have a nice day. Thank you very much.