Befesa S.A.

Ladies and gentlemen, welcome to the BFESA third quarter 2025 results conference call. I am Yota, the call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and one on your telephone. For 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 Rafael Perez, CFO of the company. Please go ahead.

Good morning and welcome to the third quarter 2025 results conference call of Befesa. I am Rafael Perez, CFO of Befesa. This morning, I am joined by a group CEO, Asier Zarraonandia. Asier will start with an executive summary of the period and then he will cover the business highlights of the steel dust as well as aluminum salts like recycling businesses. I will then review the third quarter financials by business, and we'll cover the evolution of commodity prices, of hedging program, and finally cash flow, net debt, leverage, and capital allocation. As here we'll close this presentation, providing an update to the outlook of the rest of 2025, as well as an update on our growth plan. Finally, we will open the lines for the Q&A session. For getting started, let me remind you that this conference call is being webcast live. You can find the link to the webcast of the third quarter 2025 results presentation on our website, www.defesa.com. Now, let me turn the call over to our CEO. Asir, please.

Thank you, Rafa. Good morning. So moving to page five of the business highlights. Defesa has delivered strong third quarter results, continuing the solid trend seen in the first half of the year. Our performance demonstrates once again the resilience of our business model and the benefits of our diversified operations. Adjusted EBITDA for the first nine months of 2025 reached 174 million, up 15% year-on-year. EBITDA margin improvement significantly to 21.3% in Q3 2025, compared to 16.6% in the same quarter last year, reflecting a strong operational efficiency and discipline cost management. Financial leverage was further reduced to 2.6 times in September 2025, compared to 3.0 times a year ago, highlighting our continued focus on the leverage. Net income and earnings per share also increased subtly. EPS rose 143% year-on-year to 1.52, reflecting strong profitability and improved financial performance. In our steel dust business, we achieved a strong recovery in Q3 volumes following the maintenance shutdowns carried out in the first half of the year. Performance was further supported by lower ZIN treatment charges and favorable ZIN prices. Our secondary aluminum business continues to be impacted by a persistently challenging environment, driven mainly by weak automotive market in Europe, as well as the usual summer period maintenance activities in the auto industry. The Palmerton expansion project is developing as expected, with the second kit successfully hot commissioned in July 2025. Looking ahead, we confer our full year 2025 ABDA guidance in the lower part of the initial range of 240 to 265 million, as we already commented in July. We expect a strong Q4 driven by higher EAF task volumes across all markets. Our financial leverage is expected to fall below 2.5 times by year-end, supported by solid cash generation and disciplined capital allocation. Growth capex will continue to focus on the Berbun project. following the substantial completion of the permanent door expansion. I will comment on the outlook in more detail later. Going to the page six, steel dust business highlights. In Europe, steel production in the third quarter of 2025 remained depressed, down 4% year on year, mainly due to the weak manufacturing activity and soft demand in the automotive and construction sectors. Despite this, our steel dust deliveries from EAI steel customers continued to align with the 2024 average and solid levels. Operationally, the European plants performed strongly, achieving a 94% low factor in the quarter. We expect strong volumes to continue into Q4, supported by healthy inventory levels and no major maintenance stoppage planned. In the US, steel production increased by 4% year-on-year in the third quarter, driven by infrastructure spending and tariff supporting domestic steel demand. Our U.S. plants operated at an 80% low factor in Q3, the highest level since the acquisition and reflecting a gradual improvement. The two new kilns in Palmerton have been fully operational since July 2025. A new AF EAS steel supply contracts are ramping up progressively through the Q4 following some initial startup delays. At the same time, cost reduction measures of the U.S. zinc refining plant continue to deliver expected improvements in asset profitability. In Asia, volumes in Turkey increased by 40% year-on-year in Q3, recovering strongly after a week's second quarter affected by maintenance shutdowns. In Korea, the low factor reached 77% in the first nine months of the year, up 11 percentage points year-on-year, given by higher domestic deliveries and strong operational evolution. In China, operations continue at low utilization levels, with earnings around break-even reflecting ongoing market weakness. Moving on to page 7, business highlights for the aluminum sold as life-restricting business. In our aluminum business, performance has remained mixed in the third quarter. Starting with the salt slag recycling business, operations have continued to perform strongly, running in line with previous quarters. Utilization levels remain around 90% for the first nine months, demonstrating the robustness and efficiency of our assets. As in the previous years, we carried out a scheduled maintenance stoppage during the summer months in Q3, and we expect a stronger operational performance in Q4 driven by higher volumes. In our secondary aluminum segments, the market environment continues to be very challenged. The European secondary aluminum industry remains under pressure with tight metal margins and limited production activity, largely as a consequence of the ongoing weakness in the automotive sector. Q3 is typically a softer period due to seasonal maintenance shutdowns in the industry and this year was not the exception. Despite these headwinds, we continue to focus on operational discipline, cost efficiency, and customer diversification to preserve profitability and position the business for recovery once market conditions improve. Now, Rafael will explain the financials in more detail.