TKAMY - thyssenkrupp AG (TYEKF) Q3 2023 Earnings Call Transcript

2023-08-10 17:39:04 ET

thyssenkrupp AG (TYEKF)

Q3 2023 Earnings Conference Call

August 10, 2023 05:00 AM ET

Company Participants

Claus Ehrenbeck - Head of Investor Relations

Miguel López - Chief Financial Officer

Klaus Keysberg - Chief Financial Officer

Conference Call Participants

Jason Fairclough - Bank of America

Bastian Synagowitz - Deutsche Bank

Alain Gabriel - Morgan Stanley

Christian Obst - Baader Bank

Presentation

Operator

Hello, and welcome to the Interim Report Nine Months 2022-2023 Call. [Operator Instructions] Please note, this call is being recorded.

Now, I hand over to Claus Ehrenbeck. Please begin your meeting.

Claus Ehrenbeck

Yes. Thank you, very much operator. And yes, hello everyone and a warm welcome also on behalf of the entire team. The conference call today will be hosted by our two Board members here typically available in our conference call. It will be Klaus Keysberg, the CFO; and it will be our new CEO, Miguel López, whom we welcome very orderly here in this session. All the documents for this call have been made available already early this morning. They are on the IR section of our website.

And with that, I finish my housekeeping remarks, and I'll hand over to the two gentlemen. Miguel, please take over.

Miguel López

Thank you very much, Claus. A warm welcome also from my side to today's Q3 conference call. Actually my first conference call as CEO of thyssenkrupp since my start in June. After the reason, our listening roadshows when I got to meet some of our analysts and investors, it is very important for me to participate in this event, as I would like to stay in close contact with you, the capital market going forward. That's why, I would like to take this opportunity together with Klaus to highlight our management priorities and to classify the Q3 highlights and financials.

For now, please let me start with my observations of thyssenkrupp to date, as well as some capital market feedback that I have thankfully received within the last weeks to make it short. thyssenkrupp has a strong foundation that we can build on, but there are also clear challenges we need to tackle and that we are very well aware of.

With regard to the strength, thyssenkrupp is a world-famous brand, with leading technology positions, a long-standing customer base and a highly-motivated workforce. In my view, thyssenkrupp definitely is an industrial icon, as well as one Germany's most recognized brands. As you all know, thyssenkrupp is an enabler of the green transformation for several industries, a topic that is really gaining momentum and where we will take an enhanced leading positions. On top of that, thyssenkrupp nowadays is in a solid financial position which found the basis for transformation and provides flexibility to capture opportunities.

On the other side, we have a complex portfolio with many moving parts in combination with low execution in the past and a partial lack of transparency on segment level that makes financial modeling challenging for you. We have to overcome our cash generation legacy and close the gap to our financial targets. This impacted our shareholders as well, because the returns we generated have not been sufficient enough.

These observations bring me to the next page our management priorities. The following topics are, first on mine, our management's agenda portfolio, performance and green transformation. Please note that the details of an overall holistic concept for the group are in progress and thus are yet to come. We are working on this with full efforts.

For portfolio, we will continue to streamline and to derisk the group, for instance, as current focus with regard to the evaluation of stand-alone options for Steel Europe and Marine Systems. But also in terms of the exit of our nonstrategic businesses, at multi-track such as springs and stabilizers and automation engineering, and we will increase our efforts to speed up decision-making as well as execution.

For performance, we are aiming for an overall step-up and a sustainable positive free cash flow before M&A. It is our ambition to get there by continuing to leverage the strong USPs of our businesses, which are based on decades of experience and engineering know-how, and the corresponding rise in margins to benchmark levels, but also by improving our net working capital. This also means, that we are doing hard work to turn surplus net working capital levels into cash. With such an enhanced performance, we will then be in the position to reward shareholders. And of course, this includes reliable dividend payments going forward, as a clear target for us.

With regard to the green transformation, I would like to start with Steel Europe. Here we will continue to execute the tkH Steel strategy, with our first Tier I plant as the key element of our decarbonization journey. And we will capitalize, on our enabling businesses, with their leading green technology positions, which include for example, our bearings business with the mission-critical components for the wind industry, nucera as technology leader in industrial scale hydrogen electrolysis plants, ammonia plants removed for the hydrogen economy and infrastructure, and also policies as a pathfinder for the cement industry to reduce carbon emissions, by the carbon capture and usage technology named oxyfuel.

With that having said, let us now take a look on our Q3 highlights. Overall, in Q3, we clearly delivered on our management priorities. Let us start with portfolio. Here, we managed the successful IPO of thyssenkrupp Group, nucera after an intense marketing process within -- with the first day of trading at beginning of July. And please let me remind you, this has been one of the largest IPOs in Europe in 2023, so far with an initial market cap of around €2.5 billion and total proceeds of €605 million, including the greenshoe options.

I can proudly say, that this is quite a success story of which thyssenkrupp Group, will retain a stake of more than 50%, going forward. Looking at performance, I'm happy to say that our Q3 financials are fully in line with our guidance, despite softening macro conditions, such as a reduced GDP growth assumption for Germany. Nonetheless, please note, that our Q3 performance includes as promised a positive free cash flow before M&A, and being more precise free cash flow pro forma M&A came in at €347 million.

Moreover ,we are now in a position to confirm and with regard to EBIT adjusted even more specify our financial outlook for the fiscal year. And we also pushed ahead with our green transformation-related activities.

And let's start again with Steel Europe. We finally received the long-awaited approval by the German government for the funding of a tkH4 Steel decarbonization project of around €2 billion. This not being just a milestone for us. It is also a very important contribution to achieving the climate targets in Germany and Europe and it secures numerous jobs in the region.

On top of that, we signed further MOUs for the supply of CO2 reduced steel with Mercedes Benz and BENTELER. This really is a strong proof point for us that our CO2 reduced products are well-perceived by our customers and that there is a corresponding demand in the market.

And let me also give some further examples. Nucera was able to sign another reservation agreement with a North American customer for electrolyzer production capacity in the high 3-digit megawatt range for green hydrogen. And Uhde announced a cooperation with BASF for our proprietary and NOx technology, the catalytic reduction of extremely climate harmful anal emissions, and this will enable their customers to reduce greenhouse gas emissions even more effectively.

And with that, I would now like to hand over to Klaus to give you more details on our Q3 financials. Klaus?

Klaus Keysberg

Yes. Thank you, Miguel and also a warm welcome from my side to today's conference call. So, I must say I'm very pleased to say that today we can present a very solid set of numbers to you including a positive free cash flow before M&A. And I think we will mention this in the upcoming minute several times, but I think this is clear.

With the quarterly achievements, the year-to-date performance is fully in line with and strongly towards our fiscal year 2022-2023 financial targets. And to sum it up, Q3 was another confirming quarter for us. We are on our way.

Now, let us have a closer look at our financial highlights. On the topline, we saw increasing sales. This development of course is mainly driven by the Materials businesses, while the Industrial businesses on the other hand recorded an ongoing robust or even growing topline.

For nine months, sales came in at €28.7 billion with minus 6% slightly below last year, which is also true for Q3 that came in lower year-on-year at €9.6 billion. Before coming to earnings, I would like to remind you as explained already in the last conference call of our change in the special items guidelines, FX from the valuation of two certificates are treated as a special item and are thus not included in EBITDA adjusted or EBIT adjusted.

Overall, and as expected, EBITDA adjusted and EBIT adjusted were again considerably lower year-on-year, mainly by the ongoing price normalization affecting our materials businesses namely Materials Services and Steel Europe.

On the positive side, year-on-year we saw improved contributions at Industrial Components, Automotive Technology, as well as Marine Systems. With regard to cash flow, as Miguel has already highlighted, free cash flow before M&A came in at €347 million, an improvement of €758 million year-on-year.

Looking at nine months, we even increased free cash flow before M&A by more than €1.8 billion year-on-year. This clearly confirms our ambition for the fiscal year to drive free cash flow before entering into positive territory.

Let us now continue with some further highlights on the next slide. Looking at our balance sheet, I can state that it continues to show a quite solid picture. And I assume this chart is quite familiar to you. That's why I would like to keep it short. But year-on-year, we gained €1.3 billion in net cash, resulting in a net cash position of €3.2 billion. We further improved our equity ratio to a very comfortable level of nearly 40%. And at the same time, pension liabilities were reduced by €0.3 billion to €5.7 billion.

Moreover, please let me remind you that we own some valuable assets such as our stake in TK Elevator and our stake in nucera, which really is a success story. By the way, please note that any effect from the thyssenkrupp nucera IPO are not yet reflected in our Q3 figures. You will see the effects for instance with regard to our net cash positions in our Q4 reporting.

Let us now jointly take a brief look into the group's Q3 performance. We experienced a decreasing top line year-on-year with sales at €9.6 billion. Again, this was more a function of lower prices at our materials businesses than demand. With regard to our auto-related businesses, we recorded ongoing robust demand driven by the order backlog of the auto OEMs.

EBITDA adjusted came in at €464 million while EBIT adjusted was down to €243 million. In accordance with the top line trend, the ongoing price normalization from last year's high levels kept dominating earnings development this quarter as well.

On the positive side, Industrial Components, automotive technology as well as Marine Systems could all enhance their performance from low levels in the previous year. Beside this the continuation of performance and restructuring initiatives supported the performance of all our businesses. So far, FTE reduction is at approximately 11,000 out of up to 13,000.

As already mentioned free cash flow before M&A came in at €347 million with encouraging uptick was supported by amongst others net working capital improvements on the back of inventory leases mainly at Materials Services and Steel Europe. And for all overall cash profile this also implies a more balanced free cash flow before M&A profile that is less back-ended loaded.

Let us now look at the Q3 earnings composition namely EBIT adjusted by segment. At Materials Services, the absence of record price levels from prior year weighed on margins and offset internal efforts to increase efficiency. As a result, EBIT adjusted came down to €50 million. On the volume side, we noticed total shipments being rather stable, supported by volume expansion in our direct-to-customer business.

Industrial components increased by €8 million year-on-year with improvements at both units bearings was supported by one, where positive one-time effect while competition especially in China keeps going on. Forged Technologies benefited from continuing strong demand from the trucks and industry customers. Both business, would face a higher cost base, which the counteractive to a large extent with the respective pass on, efficiency measures and cost cutting.

Automotive Technology recorded a solid increase of €30 million year-on-year. The favorable year-on-year development reflects higher customer demand, partial cost relief, for instance, for transport and materials as well as price and efficiency measures. On the other side, there were also some one-time effects as well as an overall increase in factor costs, which both had an offsetting effect on earnings.

At Steel Europe, EBIT adjusted came down considerably by €186 million year-on-year, because of a significant reduction in spot market prices versus last year. However, more important for us, we saw a substantial quarter-on-quarter increase for more than €200 million driven by higher volumes, as well as a favorable cost development with further tailwind from materials and energy price levels that resulted in a triple-digit EBITDA per ton figure again to be more precise EBITDA adjusted equals €100 per ton.

Marine Systems again could improve its performance with an increase of €30 million year-on-year. In that regard, the focus continued to be on performance improvements and project execution, and we could further stabilize the order and less profitable orders as well as benefit from the higher margin orders in the pipeline. Please also note that our order backlog stood at €12.5 billion at the end of Q3.

Multi Tracks was broadly stable year-on-year, although, the performance within the different businesses units was rather is heterogeneous. We saw a decline at Uhde and Automation Engineering that was more or less fully compensated by an upbeat development at Polysius and Springs & Stabilizers. And nucera recorded positive earnings of previous year's level.

Last but not least, our headquarter and others slightly decreased by €6 million year-on-year. Having talked about the past quarter, let's now have a look on our full year outlook with our earnings to cash flow bridge on the next slide as you also know this. Overall, we expect an EBIT adjusted in the range of a high three-digit million euro figure as we see progress in performance and transformation across all businesses.

With the fiscal year being well advanced, we decided to specify the EBIT adjusted guidance, in that regard please consider that Q4 is mainly for seasonality reasons expected to come in well below the Q3 level. If you consider effective depreciation of approximately €1 billion you can also conclude a sizable EBIT adjusted -- EBITDA adjusted figure for fiscal year 2023.

For free cash flow before M&A, we continue to strive for an increase to a slightly positive figure. Please let me emphasize like in our last conference call this target is our highest priority and I'm very confident that we will make our way into positive territory this year and will be there to stay.

Let us now look into the details between earnings and cash flow. We plan higher investments year-on-year including mainly non-cash IFRS 16 effects. Investments will be above depreciation as there are also strategic growth investments planned at all businesses. This for instance includes investments for the first direct reduction plant at Europe.

Overall, we are closely monitoring our CapEx spending and are steering with flexibility. Furthermore, we expect releases in net working capital especially in the second half, which we have successfully shown in Q3 already. Then there are payments for restructuring which will have an impact in the low three-digit million range, as you already know and other positions include taxes interest and pensions. All in all this leads to our target of an increase to slightly positive figure in free cash flow before M&A for this fiscal year.

The next slide also should look somewhat familiar to you. But in my opinion it is crucial to keep highlighting where we are coming from when looking at financial performance in the past year and which of course upside potentials are also ahead of us.

Our financial KPIs substantially improved on the back of performance and restructuring initiatives in the first nine months. Performance initiatives accounted for a positive effect in the range of mid-three-digit million euro amount. And in addition the largest headcount restructuring program ever at TK is further progressing showing a fulfillment level of more than 85%.

This all helped us to significantly improve both EBIT adjusted and free cash flow before M&A.

In this context, please let me remind you of our midterm targets, which include an EBIT adjusted margin in the range of 4% to 6% for the group as well as a significantly positive free cash flow before M&A.

Please consider that the midterm targets are just a milestone on our journey. Beyond the midterm there are upside potentials for instance through progress in our transformation also leading to much better operational performance, fixing on cash losses and multitrack over time further reducing restructuring cash out and normalized, but still above depreciation invest levels will support our cash flow generation in the longer term.

And with this, I would like to hand over to Miguel again remarks.

Miguel López

Thank you, Klaus. Please let me take this opportunity to emphasize the key highlights once more. First our Q3 financials are fully in line with our guidance and has promised free cash flow before M&A has turned sizable positive.

Second, we confirmed and with regard to EBIT adjusted even more specified our full year outlook towards the higher end of the guidance range despite softening macro conditions in Germany.

Third, we are fully on track with TK [indiscernible] for steel decarbonization strategy as we finally received the necessary approvals for funding of around €2 billion for our first DRI plant.

Fourth, with the successful nucera IPO even in a challenging market environment, we were able to further crystallize value.

And fifth, there's a clear commitment to step up performance explicitly aiming at a sustainable positive free cash flow before M&A, profitability on benchmark level for all of our businesses and reward shareholders with reliable dividend payments as a clear target.

This clear ambition will be underpinned by a comprehensive performance program to be implemented in the near future containing key elements such as further consequent optimization of net working capital levels more rigorous focus on benchmark performance for all of our businesses and the application of stricter return on investment and value-add criteria for our capital allocation decisions.

For us, however, performance is not just about specific measures it is also a cultural issue and a question of attitude. Going forward the performance program will be an important element of the holistic concept for the group, which is yet in elaboration. And with that we are at the end of our presentation. Thank you so far.

And now we are ready for your questions.

Claus Ehrenbeck

Thank you very much, Miguel. Klaus, thank you very much. And operator please take over for the Q&A session.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] The first question comes from the line of Jason Fairclough from Bank of America. Please go ahead.

Jason Fairclough

Good morning, gentlemen. Thanks for the presentation. Just a couple of simple ones for me. Firstly, on nucera could you just talk about the reporting approach? So will you remove this from multitrack and reported separately from the next period?

Second question is one for our new CEO. Miguel you've jumped on to a moving horse right? So there's a plan. The company is executing it. Do you like the look of this plan, or should we possibly see some changes in strategy and the restructuring plans?

Klaus Keysberg

Yeah. Maybe if I can start with the reporting of nucera. This is not decided at the moment. So most likely we will do something, but this is too early to say to very specific ones.

Miguel López

Yeah. Thank you for your question. So the way I look to the first 70, I think one days of being here in thyssenkrupp, CEO is we have three clear buckets of action, which is first the portfolio and we will continue on the portfolio optimization around steel and marine systems.

Second, performance, in order to enhance performance and look for the fulfillment of the capital market communicated targets back in 2021, we need now to set up the performance program and we will and we are in preparation of doing so.

And the third one is the green transformation I referred to in my presentation already, which is basically one the transformation of the steel -- to the steel unit to a green steel unit, which has been initiated so far. And second to bring -- to shine all the elements in our portfolio -- technologies in our portfolio that help others to decarbonize their operations like what I have mentioned before nucera is about but also Uhde, Policius and of course bearings. So no change in strategy. It is to full speed implement what we have been defining for the group and with an even more clear focus on performance.

Jason Fairclough

Okay. Thank you very much. Very clear.

Operator

One moment please for the next question. The next question comes from the line of Bastian Synagowitz from Deutsche Bank. Please go ahead.

Bastian Synagowitz

Yes, good morning, and thanks for taking my question. My first questions go to Mr. López as well if that's okay, actually a follow-up on Jason's question. Just on the performance and restructuring program, which you have mentioned. What will be the time frame for the communication around this? And can we expect that even this year? That is my first question.

Miguel López

Thank you for the question. Yes, we are in preparation and we expect that in the next months to come, we will communicate details around the performance program.

Bastian Synagowitz

Okay. But that means that it could actually still be this year, maybe together with the full year numbers?

Miguel López

Definitely it will.

Bastian Synagowitz

Okay. That is a very clear message. Thank you. Then a brief follow-up to that as well, I guess, as someone who's looking at the company now with a fresh pair of eyes, where do you see the focus for the improvements? And do you in particular feel that steel has done enough with the recent margins, which are not too far away from previous mid-cycle levels, which thyssenkrupp used to achieve despite I guess most of the competitors which have delivered numbers probably well above mid-cycle.

Miguel López

I would like to ask you for your understanding that I would like to together with my colleagues communicate the details of the performance program in a very complete way. I would rather not go now into details if you allow, because we are developing this as we speak and we would like to give you the really overall picture rather than some details here and there if that's okay for you.

Bastian Synagowitz

Yes sir.

Klaus Keysberg

But maybe I can add something. You know of course the Strategy 2030 which includes headcount reduction which we are still in the progress to do. So it's not finished. And you also know the Strategy 2030 program which has to do with CapEx.

And here we are also not finished. So these two effects will let's say also contribute to performance. And you know that this is as planned not finished yet but it's going to come.

Bastian Synagowitz

Okay. Okay. That's fair. Thank you. Then very last question actually on cash flow which remains the issue of the company. I guess, you emphasized that a few times. I think delivered very well this quarter.

You simply be very committed also for the last quarter and even into next year. But how do you look at CapEx? Do you see the current levels as adequate for the near and midterm just in the context of still being around 60% above depreciation?

Klaus Keysberg

Yeah. First of all this year, yeah, I can confirm what you said. And regarding the CapEx levels for the coming years of course we are now in the process of doing our operational planning. And of course, everything will be reviewed, but we are too early to really say what kind of level we are going to expect here.

I mean, you know that we have some CapEx which we do into the green transformation. This is also very clear. We also have to do something with the Strategy 2030. But all in all we are not in the position to really let's say, give you precise numbers at that point of time.

Bastian Synagowitz

Okay. Thank you. I'll go back into the queue now. Thanks.

Klaus Keysberg

Yeah.

Operator

The next question comes from the line of Alain Gabriel from Morgan Stanley. Please go ahead.

Alain Gabriel

Yes. Good morning everyone. Just a couple of questions from my side, so firstly, on the Multi Tracks that the easy wins are now done. And I do appreciate you're still in the process of reviewing that portfolio, but I think you've sold what you could sold and you shut down what you could shut down easily.

From here onwards, are we stuck with the recurring loss for that business for the foreseeable future? How patient are you going to be with that business? And any imminent plans you can share with us at this stage? That's my first question.

Klaus Keysberg

Yeah. No. I mean, of course, we achieved something. This is very clear. We -- you know that we are also in the process of having talks to potential investors for Springs & Stabilizers business and Automation Engineering business. And with the rest of the business we are of course restructuring the business.

And I mean you see already progress if you look -- if you compare the figures to last year. So -- so here we are in this remaining business also in restructuring processes. And of course this is clearly the goal not to have loss-making companies here very quick.

Alain Gabriel

Thank you. And my second question is on the net working capital. Net working capital optimization appears key to your group free cash flow objectives, as you've just articulated. We can work out roughly how much you plan to release in Q4.

But thinking beyond fiscal 2023, how much more net working capital can be taken out of the business in your opinion, as I suspect it's a structured component of it and there is a cyclical component, the net working capital buildup over the last two years.

Klaus Keysberg

I mean if you can calculate what amount we will release in the Q4, I mean this will be something. This is very clear. It will be a high three-digit number in Q4. And of course, this is our – first of course is our – that we – with our let's say restructuring efforts we are doing at Miguel is talking about we will also have of course a closer look to net working capital. I mean if we look at the end of this fiscal year, I think we achieved already something. But of course this is a target to even improve maintain the level or even improve. And – but to be more precise, we have to let's say weight on the elaboration of the performance program as Miguel said before.

Alain Gabriel

Thank you.

Operator

[Operator Instructions] The next question comes from the line of Christian Obst from Baader Bank. Please go ahead.

Christian Obst

Yes, good morning. I have a question concerning personnel number of employees. So despite the fact that you talked about of restructuring and made a lot of restructuring over the last years. When I'm looking into the decisions, I see that almost every division added personnel over the last three years. Beside multitrack of course, can you give us some kind of an idea why you added this kind of personnel, despite all of that kind of restructuring and performance improvement targets?

Klaus Keysberg

So first of all this is not true. We can go line by line. This is true for some of the businesses. And if we would look at a closer look into the details. You know that we – let's say it this way, we reduced our headcount from 108,000 at the end of fiscal year 2019 to 97,000 all in all overall.

Christian Obst

Yes. Mainly by investments.

Klaus Keysberg

No not only non-investment here you can look at material service and other things. So this is multi-tree you are right, but in the other is not. So – and of course, if we look at the reduction of personnel, we are also looking at reduction of personal in high-cost countries. And of course, if we see for instance for marine business, if we let's say make further business in Brazil, of course, there is also let's say an increase in personnel. And then the goal is clearly to reduce in high cost countries. And if we see increase in headcount this has something to do with special orders with special growth initiatives in not high cost countries. We can go to this for one hour and I could explain it to you. So this is clearly effect.

Christian Obst

Okay. Then I have a question concerning the status of the current transformation process or how you call it in Marine Systems. Steel Europe and you do not mention automotive systems. There was the idea about the possible joint venture with the Japanese company that was canceled. And do you have also any idea for the future of the automotive business? What is the current status currently now at Marine Systems for the next step of Steel Europe. Can you describe those, please?

Miguel López

Well, the plans for Steel Europe but also Marine Systems are there and we are taking now actions around how to make this happen. Obviously, I cannot talk about details here. But the work is done and is ongoing. It's a clear priority for the group. To me, the automotive unit is not on the plate. So we were not talking about this being on the plate in the past. And for me this is not on the plate right now. It is focused on the things that, I mentioned that we mentioned before in the portfolio area the two that we just were speaking about, and obviously very much in the performance and also in the green transformation.

Claus Ehrenbeck

Christian, when you refer to automotive I think you referred to the automotive businesses within Multi Tracks -- and I think…

Christian Obst

Not only.

Claus Ehrenbeck

Yeah. Okay. But just to say that, well Miguel commented on the automotive technology auto activities. And regarding the remaining ones that are in multi-track, we can say that the M&A processes there are really well advanced.

Christian Obst

Okay. Thank you, Claus for that. And Miguel Lopez, maybe last question is concerning you have a net cash position now €3 billion something will be -- will exceed or should exceed €4 billion at the end of this business year -- what can you position? Do you like to wait with that kind of net cash position until all of the more big transformation steps are done then with the Europe Marine System and so on, or do you have from other ideas how to use the cash also for shareholders? Thank you.

Miguel López

Yeah. I mean, you're right. So the net cash position is going to increase. This is clear. And I think, we discussed it several times. It is -- we do not have let's say an idea which is at the moment to communicate. So most likely we will of course let's say see what will be regarding portfolio coming up, and you should not expect some major things at the moment.

Christian Obst

Okay. Maybe a last one. The current -- what can you -- what would you add attentions to Steel Europe in the current integration?

Klaus Keysberg

These are the pensions which are let's say indicated to them. I think you know the numbers. So out of this is €2.7 billion.

Christian Obst

Okay. Thank you very much.

Operator

We have a follow-up question from the line of Bastian Synagowitz from Deutsche Bank. Please go ahead.

Bastian Synagowitz

Yes. Thanks for squeezing me in again. I've got two quick follow-up questions more on the business. And the first one is actually on bearings, if that's okay. So I was just wondering how your order dynamic has started in your fourth quarter. And also, whether you see any risk to be drawn into the Siemens Gamesa situation?

Miguel López

Well, we are not aware about our customer in regard to some claims are similar. So nothing received here. We are not aware of this. And of course, overall, the wind industry is in a quite interesting moment. So still challenging, but no specific items for Q4 so far.

Bastian Synagowitz

Okay. I mean if you turn this around, if you haven't received anything I guess just following from what Siemens Gamesa has said that they have cut off apparently one supplier shouldn't this potentially turn out to be even a positive for you?

Miguel López

Well, I would think that there is so far not positive not negative. So it's -- I would rather call it a mutual situation.

Bastian Synagowitz

Okay. Thank you. And then my last question is again coming back on your decarbonization plans. And first of all congrats for securing such a large number of funding support. It's quite remarkable. I understand that there are possibly some delays in the hydrogen project for one of your supply partners, I guess with STC. What is the situation here? And how may that impact you specifically? Could that impact the part of your funding support which is related to the use of green hydrogen. If you could maybe talk about that that will be helpful.

Klaus Keysberg

Definitely not. You know that we are in discussions with several let's say providers of green hydrogen. Of course, this is something we also know yes. But at the end of the day, we are talking to many potential hydrogen producers. And at the moment, we are very comfortable that this is not going to be an issue for us.

Bastian Synagowitz

Okay. Very good. Thank you.

Klaus Keysberg

For all the names here.

Operator

Thank you. As there are no further questions, I will return the conference back to you.

Claus Ehrenbeck

Yeah. Thank you very much operator. Well, we then also would like to thank you finally here for participating in this conference call for being interested and for contributing here with your questions. Of course, as always, we are looking forward to staying in contact with you and are available for any further questions you might have. And with that, we conclude the conference call and wish you a nice remainder of the day. Bye-bye.

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thyssenkrupp AG (TYEKF) Q3 2023 Earnings Call Transcript