The episode with Patrick Buchmann was recorded before the military escalation in Ukraine and therefore makes no references to the current situation.

Thies Eisele: Dear colleagues, welcome to another episode of It's good to have you watching again. At my side today, in accordance with Corona safety measures, is Patrick Buchmann, who leads Forged Technologies as CEO. Hello Mr Buchmann, nice to have you with us.

Patrick Buchmann: Hello Mr Eisele. I am pleased to be here today.

Thies Eisele: Mr Buchmann, you have been CEO of Forged Technologies since summer 2021. So perhaps a personal question to start with: How have the past months been for you? How have you experienced them and what are you most intensively occupied with at the moment?

Patrick Buchmann: I already knew both areas, the automotive forging sector and the industrial sector, from my time at the former Business Area Components Technology. That certainly helped to get to grips with the topics. But I was still very surprised at how much has happened since the integration of the two business units into Forged Technologies in 2017. So first of all, I would like to express my great appreciation and praise to the team for what they have achieved over the last few years. I was well received by the team at the start. It certainly helped that I knew quite a few of my colleagues from my previous jobs. In the meantime, I have managed to visit our locations in Germany, Italy, the USA and Brazil and meet the teams there on site. And the other locations in Mexico, China and India are to follow as soon as possible. For me, the personal interaction with the teams and the personal impression, also the direct impression of the conditions on site, is essential to understand the business, the current challenges and thus to be able to shape the common path for the future. These are also the topics that occupy us most at the moment. On the one hand, coping with the current challenges in a market environment that is currently very difficult to predict and very volatile, further improving our profitability in order to counteract the cost pressure, and then, in the medium to long term, adapting our product portfolio to the changing market requirements. Hence, as a keyword, the technology change in the drivetrain of vehicles towards electro mobility.

Thies Eisele: For many in the thyssenkrupp cosmos, Forged Technologies is rather unknown territory. Not everyone is aware of what Forged does and what it achieves. Would you like to give us a little insight?

Patrick Buchmann: Of course, with pleasure. With Forged Technologies, we are the world market leader in the field of forging steel. Our customers are all the major manufacturers of trucks and cars, as well as the leading suppliers of construction and mining machinery. We manufacture high-quality, mission-critical components and systems for them that are used in engines, chassis andundercarraiges. And we have been doing all this for more than a hundred years. There is a lot of tradition, also in both areas. With about 6400 employees at 15 locations, we achieved a turnover of about 1.2 billion in the last business year. Worldwide we operate more than 50 forging lines, more than 200 machining and assembly lines and many of them are highly automated. 90% of our employees work outside Germany. With the international network we have and the large machine park, we are unique in the industry, and what's more, with the combined know-how from both the automotive and industrial sectors, it is easier for us to open up new markets. The trust we have gained from our long-standing customer relationships helps us to enter new product fields.

Thies Eisele: If we take a closer look at Forged Technologies, we notice that you have quite a broad product portfolio. Would you like to go into a little more detail?

Patrick Buchmann: With pleasure. In the automotive sector, we supply our customers - Daimler, Volvo, DAF, BMW, VW and Cummins, to name but a few - with machined or forged and machined components for engines, for transmissions and other applications. The most recent additions are chassis components for trucks. As you can imagine, these components, so our products, are subject to enormous stress during use. That's why they have to meet the highest demands in terms of quality, but also in terms of resilience. And in order to produce them, special production facilities are needed. If you take one of our core products as an example, the crankshaft, i.e. a crankshaft for passenger cars, we need forging lines with a pressing force of 4000 to 8000 tons. You have to get used to that order of magnitude. If we then think about the larger crankshafts for trucks, which are also much larger and weigh up to 100 kilos, then we even need forging lines with a pressing force of up to 16,000 tones. And we need similar or exactly such forging lines for the new products, for the front axles for trucks, which have similar dimensions. In the industrial sector, we manufacture components for undercarriages or even complete undercarriage systems. This is mainly used in excavators and dozers, in the construction industry, in mining, but also in agriculture. Undercarriages are used in large machines that weigh up to several 100 tons. If you imagine a mining excavator, it has one of our undercarriages, which alone is about two and a half meters high. So the dimensions of our products are enormous.

Thies Eisele: The topic of individual customer requirements: The automotive sector, like the industry as a whole, is undergoing major changes, driven above all by the transformation to electro mobility. How does this influence your business at Forged? And how are you prepared for these changes?

Patrick Buchmann: That's right. The automotive industry will change enormously in the next few years and decades and, especially in the drivetrain sector, the concepts for reducing or completely avoiding CO2 will change completely. We can assume that by 2030 every third vehicle produced worldwide will have a battery-electric drive. In addition, about one third of all vehicles produced worldwide will have a hybrid drive, i.e. they will have a conventional engine but also an electric motor. Even if this means that a good one in two vehicles will still be equipped with a crankshaft, we will of course feel a significant impact on our markets for engine components. And in Europe we assume that this development will take place even faster. If we now look at the truck sector, it will certainly take a little longer. But there, too, the trend is clearly towards batterie-electric and fuel cells. In addition, other drive concepts such as the hydrogen combustion engine are being investigated. But here, too, we assume that by 2030 every fifth truck will have an electric drive with battery or fuel cell. And here, too, development in Europe will certainly be faster than in other regions. For us, this means that we have to set the course today to adapt our product portfolio and reduce our dependence on the combustion engine. We have already begun to do this. We have just invested in the world's largest and most modern forging and machining line for truck front axles. There at the site, we will be in a position to completely compensate for the loss of sales, i.e. the decline in sales, in the area of passenger car engine components. And we already have projects underway for further chassis components in order to grow in this area as well. In addition, we see great growth potential in the field of undercarriages, i.e. at Berco, which is completely independent of the combustion engine. We want to significantly expand our market share worldwide in the original equipment business for the large manufacturers such as Liebherr or John Deere, but also in the aftermarket business, which has not been in the focus so far.

Thies Eisele: Looking beyond Forged, what contribution does Forged Technologies make to the overall performance of thyssenkrupp?

Patrick Buchmann: Forged Technologies is still quite young. We talked about the integration of the two business areas in 2017 and since then the performance has increased significantly. The introduction of automotive processes and standards alone has led to a significant increase in performance at Berco, and at the production site in Copparo in particular, we have made profound changes in the production layout, in the processes. You can say that Berco is much more efficient and profitable today. We have already taken a good step forward, but we have certainly not yet reached our goal. That doesn't just apply to Berco. It also applies to the automotive sector. There, too, we want to improve further. It is precisely with this performance orientation that we have managed to take leading positions in all our core markets in recent years. We have therefore been able to continuously increase our margins over the last few years and thus reliably contribute to the Group's results with EBIT and cash. And as we look ahead, we want to actively face the challenges there as well. I have said that we want to achieve the transformation under our own steam and thus continue to make a reliable contribution to the success of the Group.

Thies Eisele: On the other hand, where do you see advantages for Forged Technologies in being part of a Group of Companies?

Patrick Buchmann: Like many others, I think the first thing is the strong thyssenkrupp brand. The brand is a promise of performance and creates trust among our customers. It stands for performance, for technological leadership, for quality. These are precisely the attributes that are at the forefront for us at Forged Technologies. It is a very good fit for us. In addition, of course, being part of thyssenkrupp increases the attractiveness for our employees, for today's employees, but also for the future ones. thyssenkrupp has a high identification potential, but also enables each individual employee to develop personally beyond their own area, as well as to exchange ideas with colleagues outside their own business. For me, it is a great advantage to be a part of thyssenkrupp, because it enables us to cooperate with other business units and segments in areas where we can improve together or reduce costs. Overall, we feel that we are in good hands in the Group of Companies. And I must also say that thyssenkrupp has supported us in recent years with the necessary investments to start the transformation. We spoke earlier about the new forging line in Homburg. And in the future, our path is also being supported. We are working closely together on the implementation of development options to reduce our dependence on combustion engines and to open up new product fields.

Thies Eisele: With all that is going on, what is the mood like among your colleagues and what else can we expect from Forged in the future?

Patrick Buchmann: Well, we have talked about the current challenges. We have talked about electro mobility and the impact on our markets. There is certainly a lot that could dampen the mood or even cause uncertainty. But what I have experienced at Forged Technologies in recent months is different. Of course, our employees also see the challenges and take them seriously. I have experienced a lot of commitment, a lot of fighting spirit, a lot of willingness to change, and that is of course exactly what we need going forward. So based on that and on our customer relationships, on our particular strengths in engineering and production, we can open up new product fields and actively shape the transformation. I am quite sure that with the passion and commitment of our employees, we will also succeed. Together we can look to the future with great confidence.

Thies Eisele: Thank you very much, Mr Buchmann, for these closing words and for the interesting insights into Forged Technologies and your business. I think we have all learned a lot today. Dear colleagues, stay tuned in and stay healthy. See you next time at Goodbye and all the best.