Benteler Group (Benteler Automobiltechnik GmbH) Business Report FY ended Dec. 2023

Financial Overview

(in million EUR)

	FY ended Dec. 31, 2023	FY ended Dec. 31, 2022	Rate of change (%)	Factors
Overall
Net Sales	8,787	8,954	(1.9)	1)
-Automotive Division	7,331	7,138	2.7	2)
-Steel/Tube Division	1,514	1,882	(19.6)	3)

　
Factors
1) Net Sales
-Sales of the Company in the fiscal year ended December 31, 2023, decreased by 1.9% from the previous year's EUR 8,954 million to EUR 8,787 million. Sales in the Automotive division increased while the Steel/Tube division declined.

2) Automotive Division sales
-Sales in the Automotive division increased by 2.7% to 7,331 over the previous year. The increase was mainly a result of higher call-offs from customers. This was offset by the declining price of raw materials, particularly steel, aluminum, and precious metals, which are mainly contained in purchased catalytic converters. The negative foreign currency effects also reduced overall sales growth.

-The Module business had total sales of EUR 2,912 million in 2023, or an increase of 4.3% from 2022. The increased sales were driven by the closure of the Kaluga, Russia plant and the Cologne, Germany plant, together with the growth in sales at the plant in Spartanburg, USA, and Września, Poland.

-The Components business with the Chassis, Structures, Thermal & Tubular business units and the smaller Mechanical Engineering business unit generated total sales of EUR 4,419 million in 2023, or an increase of 1.7% higher than the previous year. The higher revenues resulted from higher call-offs in the first half of the year, while the second half was affected by weaker call-offs from a core customer.

3) Steel/Tube Division sales
-The Company's sales in the Steel/Tube division in the fiscal year ended December 31, 2023, decreased 19.6% to EUR 1,514 million from the previous year's EUR 1,882 million. The decline in sales was due to lower volumes in Europe and North America and the passing on of lower raw material prices, particularly for energy and steel, to end customers, which is margin neutral.

Joint Ventures

-In April 2023, Beijing Hainachuan Automotive Parts Co., Ltd. (BHAP) signed a joint venture cooperation agreement with Benteler Automotive (China) Investment Limited (Benteler) in the field of automobile chassis. Through this partnership, BHAP will focus on the development of future intelligent electric vehicles, expand the business of high-quality chassis suspension modules, and enhance its chassis production capacity. (From a press release dated April 13, 2023)

-The European Commission approved, under the EU Merger Regulation, the creation of two joint ventures by Benteler and BHAP, both of China. The newly created joint ventures will be active in the assembly and sale of chassis modules to automotive customers in China. The Commission concluded that the proposed transaction would raise no competition concerns, given that the joint ventures have no foreseen activities in the European Economic Area. The transaction was examined under the simplified merger review procedure. (Based on European Commission news letter of August 24, 2023)

Plant Closure

-The Company announced that the Steel/Tube division will proceed with the closure of its production site in Rothrist, Switzerland, by the end of 2023. The decision to close the plant was made after a consultation process failed to provide any viable alternatives for the site. The closure will impact on approximately 300 employees. The global welded tube market has been experiencing challenges for several years due to a range of factors, including export restrictions, high costs for energy, spare parts, and raw material, and a decrease in demand for powertrain components for vehicles with combustion engines. (From a press release dated April 5, 2023)

Business Partnership

Collaboration with ArcelorMittal on low carbon steel
-The Company signed a memorandum of understanding (MoU) with ArcelorMittal to work together on several sustainability projects to reduce CO2 emissions and use XCarb, ArcelorMittal’s low-carbon-emissions steel. They are testing the use of XCarb recycled and renewably produced steel in chassis and structural components. On a lifecycle basis, this product has a CO2 footprint that is up to 70% lower, compared with the same product made using the conventional blast furnace process. (Based on BENTELER press release on December 5, 2023)

Partnership with thyssenkrupp for CO2-reduced steel
-The Company signed a memorandum of understanding (MoU) to secure a long-term supply of climate-friendly bluemint Steel from thyssenkrupp Steel Europe for the production of vehicle components. The CO2 intensity of bluemint Steel is already significantly reduced. In the production of bluemint Steel, a proportion of the coking coal in the blast furnace process is replaced by pre-produced sponge iron or specially prepared scrap steel. Additionally, this cooperation will be intensified from 2026. The steel will then come from direct reduction plants in conjunction with meltdown units which, in the future, will use green hydrogen and green electricity. Benteler Steel/Tube itself produces “green steel” in an electric arc furnace at its Lingen steel works. However, the production volume is not sufficient to cover the needs of Benteler within the group. (From a press release dated March 20, 2023)

R&D Expenditure

(in million EUR)

	FY ended Dec. 31, 2023	FY ended Dec. 31, 2022	FY ended Dec. 31, 2021
Total	65	67	75

R&D Structure

-As of December 31, 2023, 664 employees worldwide work in the area of research and development.

HOLON Mover

Debuting HOLON mover in Germany
-The Company announced that its autonomous HOLON mover has been presented in Germany for the first time at the Automuseum PROTOTYP in Hamburg's Hafencity, which will be showcased until the end of August 2023. This fully electric, autonomous vehicle for use on public roads followed HOLON and Hamburg-based HOCHBAHN AG’s collaboration announced in 2022 to develop autonomous shuttles in local public transport. The plan is to start operating several autonomous HOLON vehicles in Hamburg at the end of 2024 as a contribution to the "Hamburg-Takt" initiative. By 2030, every Hamburg resident should have access to a public mobility service within 5 minutes from morning to evening. (From a press release dated July 6, 2023)

Presenting HOLON mover at Vienna Motor Symposium
-The Company announced that the CEO of HOLON gave a keynote on the next generation of autonomous movers at the Vienna Motor Symposium at the end of April 2023. He said that interest and demand for this new type of mobility are great. HOLON intends to have the first vehicles on the road by 2024. HOLON was presented for the first time at CES in January 2023. (From a press release dated May 9, 2023)

Global debut HOLON mover at CES 2023
-The Company announced that its new brand, HOLON, has presented the autonomous, fully electric, and inclusive mover for the first time at the CES 2023 in Las Vegas. This world's first autonomous mover built to automotive standards claims a maximum speed of 60 km/h (37mph) and a travel range of around 290 km (180 miles). The vehicle serves both on-demand services, such as ride pooling and ride hailing, and normal scheduled services. It is designed with a generous spatial concept for up to 15 passengers. Its seating arrangement offers a sense of privacy while meeting all safety requirements. The SAE Level 4 mover based on Mobileye Drive also comes with electric double-wing doors with photo-electric sensors and an automatically extending ramp with lowering function as standard for barrier-free access. Information in Braille and an audiovisual guide provide additional support for visually impaired people during the journey. Its other features include an advanced sensing system that makes use of different redundant sensors, a mapping technology, and a formal model for driving policy. (From a press release dated January 5, 2023)

CliMore product brand

-The Company announced that with the introduction of the CliMore brand, the Steel/Tube Division will combine its CO2-reduced steels and steel tube products under this brand in the future. CliMore is a compound of the words for “climate” and “more” that unites the Company’s claim to sustainability and quality. It will offer CliMore products in 3 sustainability categories, which indicate how steels and tubes were produced and which energy sources were used for them. The CliMore label includes 3 levels: Advantage, Ambition, and Excellence. In each of the 3 levels, low-emission steel is produced from scrap using the electric arc furnace. This recycling reduces up to 75% CO2 emissions when compared with new steel produced from iron ore in a classic blast furnace. For the Ambition level, green electricity is used in the tube mills and for the operation of the electric arc furnace, saving up to 85% of CO2 emissions. The highest level (Excellence) will focus in the future on electrification of the plants or the use of green hydrogen as an energy source for process heat in the production of steel and its processing into tubes. This level will not be available at the launch of the new CliMore product brand. (From a press release dated September 26, 2023)

Patent

-In 2023, the Company applied for 38 priority patent applications.

Capital Expenditure

(in million EUR)

	FY ended Dec. 31, 2023	FY ended Dec. 31, 2022	FY ended Dec. 31, 2021
Automotive division	317	203	146
Steel/Tube division	38	38	25
Other	5	4	7
Total	360	244	177

-In FY 2023, the Automotive division invested EUR 317 million. The increase of EUR 114 million compared to the previous yearʼs figure was partly due to capitalized development costs of EUR 37 million relating to the ongoing development of the HOLON project.

Investment outside Austria

<South Africa>
-The Company has invested in the expansion of its plant in Port Elizabeth by over 9000 sqm, positioning it as the third hot-forming plant in South Africa. 50 skilled jobs will be created, increasing the workforce from 697 to 743. This development represents a significant milestone in South Africa's thriving automotive manufacturing industry, reaffirming the nation's growth trajectory and its status as a hub for automotive production, notably in the Eastern Cape Province. (Based on social media updates of the Department of Trade, Industry and Competition of South Africa on September 12, 2023)

<Brazil>
-The Company announced the inauguration of a new cold forming line at its Campinas plant in São Paulo, Brazil. The forming with loads of up to 3,200 tons and 30 strokes per minute for a wide range of sheet metals can now be performed. (From Benteler social media updates on August 15, 2023)

<Germany>
-The Company inaugurated a new production building with four bays at the Schwandorf site. Production will start as soon as the construction of all systems in the new halls is complete. The Company plans to deliver the first products from the new buildings to customers in September 2023. The plant belongs to its Automotive division. In addition to battery trays, this plant also produces structural and chassis components for German OEMs. The new halls offer more than 11,000 sqm of area. Around 120 people will be employed in the new production halls, supported by around 140 robots. Parallel to the construction of the new hall, the Company converted an existing factory hall into a training and education center. Employees will be trained here in various disciplines such as robot or welding technology. (From a press release dated May 8, 2023)

<Slovakia>
-The Company opened a new 5,000-sqm plant in Bratislava, Slovakia, which is only 1.5 km away from its customer sites. This strengthens its competitiveness in the European region. The plant has manufactured rear modules since October 2023. Around 90 employees will work there at full capacity.