Stefan Ettwig: Welcome from the thyssenkrupp studio in Essen to a new episode of we.talk. My guest today has to have nerves of steel just because of his job. I would like to welcome Bernhard Osburg, CEO of thyssenkrupp Steel. It's great that you have time for us.
Bernhard Osburg: Thank you, I'm very pleased. Good morning.
Stefan Ettwig: Mr Osburg, we are used to challenges at thyssenkrupp, we know how to deal with them. The fact that there is now a war in Europe is new. How do you deal with it? What affects you there, privately and professionally?
Bernhard Osburg: Yes, I think first of all I would want to answer as a human being. I don't think any of us would have thought that this is possible here in Europe, just 1500 kilometres from Berlin. It's terrible, it's cruel, it does a lot to us as a company, but I think also as people – it triggers fears in many people. But there is also another side, when you see the solidarity we have. That's very special in the steel sector. You can see that steelworks have played a very sad role in this war. Finally, there is a lot of willingness to help, also from within the team, in terms of donations, in terms of support, in terms of language lessons. And for that, first of all, a big thank you to all the people, all the staff, who are helping to make this situation more or less bearable for the people who have come here to Germany.
Stefan Ettwig: Let's talk briefly about stand-alone status. thyssenkrupp is still convinced that a stand-alone status for your unit offers very good prospects for the future. However, the implementation is currently open. How do you deal with this reduced planning possibility?
Bernhard Osburg: I would say it is the way it is. The political situation has changed dramatically, that's absolutely clear, you can see the influence on the capital markets, on the stock markets. As you said, we actually have two major issues. The first big issue being: what is possible in which constellation in terms of the economic framework conditions? I think we are doing better than expected. Even in this war situation – with very reasonable figures. That's good, but what hovers over the whole issue is, of course, the topic of the green transformation that we have to achieve. This is a huge project, a huge challenge for our company, and here it is important that the political framework conditions are really so clear that they are readable and assessable on the figures side. Because otherwise it is difficult to take this route. One last remark: We are continuing to prepare ourselves unabated for the stand-alone topic within the company. We know that we still have to do our homework before we are ready for the capital market, and we will continue to work on this in all consistency.
Stefan Ettwig: You just mentioned the green transformation, which is one of many balls that are currently in the air. How heavy is this one ball for you?
Bernhard Osburg: To use [German soccer coach] Felix Magath's words, it's a big medicine ball. You could say it weighs a lot. All in all, I think it is still a great opportunity for our company to take this route. We have a good, clear, structured plan of how we're going to do it, but it's a huge challenge. And to understand that, in the transformation of the steel industry, in the transformation of our – Europe's largest – steel plant, it's not just a brutal technology change. That's what everybody knows and that one is getting out of coal and into hydrogen. Electricity and hydrogen will be the energy sources of the future. But the markets are also changing as a whole. The behaviour of competition is changing, and when this transformation is complete, the steel world in Germany and in Europe will have a different face than it does today. And of course we want to continue to have a leading position after this transformation. That is why the challenge is very huge. The dimension is very big. That's why it won't work without political support.
Stefan Ettwig: That was a lot of challenges, we have to talk about that, that's clear. But there are certainly also many things, especially for our viewers at the screens, that they are proud of. What milestones have been reached, what are you satisfied with?
Bernhard Osburg: Yes, absolutely. Two years ago, we started implementing the Strategy 20-30 with the entire team. We also got a budget, the special budget of over 800 million euros to accompany it. And basically there are two aspects. One aspect is a restructuring and cost-cutting aspect. The second aspect is where we invest in plant technology, how we shape our portfolio. The team in Duisburg has now managed, in the past two years, both in restructuring, in reducing staff, in generating cost potentials, in transforming Electrical Steel from negative to positive. And also for the Heavy Plate unit, which we closed with dignity in September last year, that was really not an easy thing to do. We have improved our results by well over 300 million euros from these measures. This helps us to regain a reasonable position in the market, and a big thank you to my team and my employees. Not everyone believed that we would be able to achieve this in time. It was a difficult time in the middle of the pandemic, but it went well. We have now been able to see this clearly in monetary terms in the recent quarterly results. We have not only continued to plan and develop the technology for the green transformation, but we also launched our first green product brand bluemint© in October last year. In the meantime, we have customers in many sectors – in the packaging industry and in the trafo sector – who are already buying these CO2-reduced products today, and want to buy more of them as well. In this respect, one can say that the course is well set – now it is a matter of continuing to consistently work looking ahead.
Stefan Ettwig: You need a lot of material and a lot of energy for steel. That costs a lot of money, and prices are going through the roof at the moment. This in turn has an impact on your finances, of course, but also on thyssenkrupp as a whole. How are you positioning yourself in your sector to remain competitive?
Bernhard Osburg: I think we have seen how energy costs have developed in the last few months, even when the Ukraine issue was looming. Electricity and gas in particular are completely different – by factors – than they were before. In addition, we have to bear considerable costs on the raw materials side due to the war starting February 24, from February 25 onwards. And that means for us that there are only two parallel paths. The first paths is that we have to be able to pass on to our customers, to the markets, the costs that are coming our way. That is not a popular move, that is absolutely clear, but there is no other way. That is path number one. Path number two: Today we have a lot of capital tied up in stocks because we have to buy material at a very high price. We would prefer to channel that into investments, that is absolutely clear. In this respect, the management of our stocks, our inventories, is of course also a discipline that is driven forward under high pressure. These are the two elements with which we are trying to build a bridge in these difficult times, forward into the coming business year, which we can then also approach differently again.
Stefan Ettwig: With Sigmar Gabriel, the former German Federal Minister of the Environment and Minister of Economics, you have a new Chairman of the Supervisory Board. Have you already had the opportunity to talk to him? About current developments, challenges, etc.?
Bernhard Osburg: Yes, Mr Gabriel has visited us several times in Duisburg. We have spent a lot of time together. We are also in regular exchange with each other. We are of course pleased to have someone who is a heavyweight on the overall political landscape. Especially in the important fields of economic policy and environmental policy, both of which he has played a major role in shaping. But he is also a great expert on the steel industry, from his position Minister-President of Lower Saxony. He knows all the issues, which he can sort out very sensibly and well, and is therefore naturally also someone who can challenge our business model and our performance with completely different ideas. And that is good for all of us. It's constructive and a lot of fun to work with.
Stefan Ettwig: To the last question, especially in the direction of our employees. How optimistic are you that Steel Europe and thyssenkrupp are on the right and good path?
Bernhard Osburg: I am very optimistic that this is the case, and as CEO I am not alone in this, but we believe this in the management team as a whole. There are two reasons for this: We still have one of the most successful steelworks in the right location in Duisburg on the Rhine, with customers all around us. That's a great starting position and I think the team has also proven in the past two and a half years, that when it has a straight course that doesn't change direction every year – but instead we can also take a longer-term view of a goal – that it is capable of implementing the things we have set out to do with a lot of verve and power. And we are way ahead in the implementation. That shows how much energy is in the team. Therefore, many thanks to the team! And with such an efficient team and an efficient location, we will be able to hold our own in the competition. Hence the confidence.Stefan Ettwig: That's the way, we'll leave it at that. Thank you very much, Mr Osburg, for your time.
Dear viewers, we will be back with we.talk, with exciting guests, very soon. Goodbye from Essen. Take care and stay healthy.