Befesa S.A.

Ladies and gentlemen, welcome to the first quarter 2026 results conference call. I'm Lorenzo, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference will be recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Rafael Pérez, CFO. Please go ahead.

Good morning and welcome to the first quarter 2026 results conference calls of Befesa. I am Rafael Pérez, CFO of Befesa, and this morning I'm joined by our group CEO, Asier Zarraonandia. Asier will start with an executive summary of the period. Then I will cover the business highlights for the steel dust as well as aluminum salt slag recycling businesses. I will then review the first quarter financials by business. I will cover the evolution of commodity prices, our hedging program, and finally cash flow, net debt, leverage, and capital allocation. As here, we'll close the presentation providing an update on the outlook for 2026 and an update on our growth plan. Finally, we will open the line for a Q&A session. As always, this conference call is being webcapped live and you can find the link in our website. Now, let me turn the call over to our CEO. Sergio, please.

Good morning and welcome also from my side. Please move to page five with the financial and business highlights for the first quarter of 2026. We had a good start into the year despite a challenging macroeconomic environment. adjusted the BDA increased by 4% to $58 million, and the margin improved accordingly from 18% to 20%. This development was driven by both segments, steel, dust, and alu. Net income and earnings per share increased by a double digit rate, going up by 11% year over year. Both KPIs were driven by operational improvements as well as better financial results. At last year, Q1 was impacted by maintenance activities, resulting in overall steady steel dust volume against a volatile market backdrop. In aluminum, we are seeing signs of recovery, especially at the end of the first quarter, despite challenging business environment. Regarding 2026, we expect another year of earnings growth and we've adjusted the BDA ending the year between 250 and 270 million. We expect quarterly earnings to gain momentum as the year progresses, driven by lower maintenance and higher volume. I will comment on the outlook in more detail later. Moving on to page six, business highlights for the steel dust business. In Europe, total steel production remained on a declining trajectory in the first quarter. Production declined by 3% year over year, reflecting overall weaker demand. The EAF route was less affected by these pressures, and steel dust supplies remained stable, and deliveries continued at a solid pace in Europe. In the US, Steel production increased by 6% in the first quarter of 2026. Supported by overall solid demand, this trend is also reflected in the low factor, which rose to 63%. We are starting to process that for new EAF steel dust contracts gradually. In Asia, Turkey started the year with a soft steel production, while Korea sees business as usual with low factors almost similar to last year. Lastly, the situation in China has not changed. The market remains weak and low factors at low levels, remaining breakeven at PLN and cash flow. Moving on to page seven with the business highlights for the aluminum salt slag recycling business. Starting with salt slag, the year started softly, mainly due to lower secondary aluminum production in Europe resulting in an average capacity utilization of 82%. We have already started to see an improvement in business environment by the end of the first quarter going into the second quarter and are confident that capacity utilization will recover in the next quarters. Similarly, our secondary aluminum segment followed the broader European trend, resulting in a decline in volumes. However, Methods implemented in recent quarters, particularly a stronger focus on operational discipline and cost efficiency, enabled us to preserve profitability. Looking ahead, the Bermuda expansion will support further diversification of our customer base and market structure, starting already with the ramp-up in the third quarter. Now, Rafael will explain the financials in more detail.

Thank you, Asir. Moving on to page 9, the financial results for the steel dust segment. Adjusted EBITDA in the first quarter of 26 was 58 million, representing 4% year-on-year improvement. Higher volumes of work sold compensated for unfavorable FX movements in the quarter. EBITDA margin improved from 25% to 28% in the period. At group level, utilization in steel dust remained unchanged year-over-year at 65%. primarily impacted by maintenance shutdowns. On a regional breakdown, the U.S. and Europe increased utilization, which was offset by Asian markets. During the quarter, SIM pricing U.S. dollars increased by 14% to an average of $3,243. However, the unfavorable euro-dollar exchange rate caused that the increase in SIM pricing euros was just 3%. Considering the same price and the hedging, the blended price in the quarter was 2,615 euros, pretty much in line with the previous year. Coke and electricity costs were slightly down year on year. I will provide more details on our energy costs in some minutes. Moving on to page 10, financial results for our aluminum segment. Aluminum sold large segment delivered 9 million euros of EBITDA in the first quarter of the year. which represents a 10% year-on-year increase compared to the same period of 2025, even in a challenging environment. The year-on-year €1 million positive EBITDA development was mainly due to higher collection fees in salt slag, as well as overall lower energy and operating costs. This positive development was partially offset by lower volumes in both segments, as well as slightly lower metal margin in the quarter. We operated our plants at a solid utilization rate of about 8-7% in salt slag and 66% in secondary aluminum. As explained by a share, we're seeing a recovery in the secondary aluminum business already in the second quarter and are confident about the development of the rest of the year. Moving on to page 11, same price and treatment charges. Regarding seeing LME prices during the first quarter of 2026, SYNC traded in the range of $3,000 to $3,487 per ton, showing a particular positive trend in the first month of the year. The average SYNC LME price in the first quarter of 2026 has been $3,243 or 2,770 euros per ton. On the right-hand side of the slide, on treatment charges, Treatment charges for zinc have been settled in April at $85 per ton for the full year 2026, compared to $80 of last year, 6% higher compared to 2025, which was all-time low record level. This factor confirms that the supply zinc concentrate market is still very tight, with the spot treatment charges below the current annual benchmark. Turning to page 12 on hedging, As explained in the previous call, we have taken the opportunity of the recent rally in the SIM price to be very active on our hedging program. Our hedging book has been extended to and including July 2028 at an all-time high level of $3,100 per ton. For 2027, the hedge is set at $3,000 per ton. This provides stability and visibility over the coming quarters. Turning to page 13. Befesa energy prices. The page shows the evolution of the three main energy sources that we have in Befesa, coke, natural gas, and electricity. With regards to coke prices, which today represents roughly 50% of the total energy bill, the normalization that started in 2023 continues throughout 2026. Average coke price in the first quarter was around 147 euros per ton, consolidating its downward trend compared to the previous quarter. Regarding electricity, which today accounts for 40% of the total energy expense, prices are at a similar level than in the fourth quarter of last year, around 111 euros per megawatt hour, after a significant correction in the second quarter of 2025. Gas prices saw a slight increase in the first quarter of 26, to 51 euros per megawatt hour. We remain cautious regarding the impact that the situation in the Middle East may have on the development of energy prices and general inflation for the rest of the year. Turn to page 14, the cash flow results. Operating cash flow in the first quarter of the year reached 38 million euros, which represents an increase of 12% compared to the same period of the last year. On the EBITDA to cash flow bridge, starting with 58 million euros at the end of EBITDA and going to the right, working capital consumption amounted to 17 million euros in the first quarter. As in previous years, the first quarter working capital is typically impacted by seasonality. This will be recovered throughout the year, especially in the last quarter, as we have already seen in the last years. Taxes paid in the first quarter came in at 3 million euros compared to 7 million in the same period of last year, resulting in operating cash flow of 38 million euros in Q1, up 12%. On capex, in the first quarter we have invested 15 million euros in regular maintenance capex across the company, 11 million euros in growth capex related to the Benburg expansion project in Germany. In summary, total capex of 26 million euros in the quarter. Total capex for the full year is expected to be around 70 million, which is expected to be fronted loaded with the second half of the year reducing the level of investment. Total interest rate amounted to 9 million euros, reaching 10 million euros with other minor items. In summary, final cash flow amounted to 2 million in the first quarter. Cash on hand stood at 145 million euros, which together with our 100 million euros and drawn revolving credit line provides Befesa with more than 245 million euros of liquidity. Net debt was greatly reduced by 10% to 550 million euros. resulting in a net leverage of 2.25 at closing of the quarter, a strong improvement compared to 2.78 at March 2025. Turning to page 15, debt structure and leverage. Befeso today has a long-term efficient capital structure with optimized financial cost. Net leverage improved significantly to 2.25 at the end of March, marking the eighth consecutive quarter of leverage reduction. For 2026, net leverage is targeted around two times, and below two times onwards, reflecting the FESA's continuous commitment to discipline capital management. We will prioritize the growth capex on these projects that will deliver immediate cash flow upon completion, like the approved project of Benburg and other market opportunities that may appear. Also, we will keep the annual regular maintenance capex around the level of 45 million euros over the coming years. On dividend, we are committed to maintain our dividend policy to pay between 40 to 50% of the net income to shareholders. For 2026, the Board of Directors will propose the EGM to pay a dividend of 40 million euros, equivalent to one euro per share, or 50% of the net income. This dividend is 37% higher than the dividend pay last year. Moving on to page 16. EFESA is entering into a new cycle of low capex and high earnings, resulting in a strong free cash flow generation and shareholder value creation. In the last years, we have gone through a high capex cycle, which has allowed the company to expand our operations globally into the U.S. and China. Now that this cycle is completed, we are entering into a new cycle of limited total capex, below 80 million per year, along with high earnings, resulting in a strong free cash flow. For total cash flow after three years of negative cash flow, 2025 has marked an inflation point, delivering strong financial cash flow. Total cash flow is expected to follow a positive trajectory, reflecting the company's improvement and stronger underlying cash generation. Finally, as I already mentioned, leverage is expected to be kept below two times over the coming years, allowing greater optionality in future capital allocation decisions. Now back to us here on outlook and growth.

Moving on to page 18, 2026 guidance. The start into the financial year 2026 has developed according to our expectations. We expect 2026 to be another year of earnings growth. On a BDL level, we expect to end the year between 250 and 270 million, which translates into a growth between 3% and 11%. After 4% EVDA growth in Q1, we expect growth to gain momentum as the year progresses. We expect total capex in the year to be around 70 million euros. This will enable us to further reduce leverage to around 2 from last year's level of 2.3. Moving on to page 19, going through the main elements. We expect steel dust volumes in Europe to grow only modestly, as we are already running at very high optimization. Volumes in the US will increase, even by new contracts with the steel makers. In the rest of the world, steel dust volumes are expected to develop broadly in line with last year. Salt slag operations are expected to maintain broadly stable volumes compared with 2025, enjoying higher collection fees. The metal margin for secondary aluminum is anticipated to improve gradually over the course of the year, particularly after bottoming out in the third quarter of 2025. We are already seeing an improvement in the greenhouse environment in April, which makes us confident. For energy costs, we expect a mixed development in 2026, with global coal prices slightly down to stable, but natural gas and electricity prices increasing in Europe. General inflation continues to impact maintenance, auxiliary materials, and personal costs across all regions, creating a negative pressure point in the cost structure. We should be aware that developments in the Middle East will influence energy prices and overall inflation for the rest of the year. As explained by Rafael, due to ongoing tightness in the zinc concentrate market, the benchmark treatment charge settled at $85 in 2026, just slightly up compared to last year's 80. Hedging activity foreseen remains stable, with the average 2026 hedge price set at approximately 2,990 per metric ton, consistent with 2025 levels, suggesting a neutral hedging position. Total capital for the year will be around 70 million, with around 45 million euros for regular maintenance and remaining for growth in the expansion of Vermont. We will continue following our disciplined capital allocation strategy and ongoing focus on free cash flow generation, and we therefore anticipate further deleveraging with net leverage declining to around two by year end. Moving on to page 20, our expansion project in Vermont, Germany. We are on track with our planning decision for expansion project and expect to start production the second half of 2026. This is another important milestone in Befesa's growth journey as we continue to strengthen our aluminum business and expand our recycling capacity in Europe. This project is an example of how we diversify our customer base and end market exposure toward less volatile business. Verbu will also contribute to our slightly H2 title earnings growth momentum in 2026. Moving on to page 21 about the European steel industry. Europe is accelerating its transition toward electric car furnace steelmaking, largely driven by decarbonization targets and supportive policy frameworks. Between 2026 and 2030, 30 new EAF projects have been announced to come online. This represents more than 22 million tons of new EAF capacity, which equates to 24 increase compared to the 1690 million tons of electric car furnace capacity in Europe. As a result, EAF penetration is expected to rise from the current 45% over the next 5 to 10 years, supported both by this new project and the progressive replacement of blast furnaces. Given our strong market position, established customer relationships, and ongoing business development efforts, BEFESA is strategically well-positioned to capture the significant volume growth expected from this structural shift. We are already engaged in advanced negotiations with key customers to support this expansion phase in the coming years. Moving on to page 22 about the U.S. steel industry. In the United States, electric car furnace steel capacity is projected to increase by more than 25% by 2028, equivalent to around 21 million tons of new steel-making capacity. This expansion translates into over 300,000 tons of additional steel dust, creating a substantial opportunity for the first recycled operation. With a total installed capacity of 650,000 tons across our EOS plants, We are now well-positioned to leverage this growth. Our goal is to progressively ramp up utilization to below 70% today to around 90% by 2028, as new electrical furnace capacity comes online. The combination of our modernized palmerton facility, longer customer relations, and a strategy geographical footprint near key steel producers ensures that Bepresa is ready to capture this next phase of growth in the US market. Thank you very much.

Thank you, Asir. We will now open the lines for your questions.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered in the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to hold the headset while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Lars Steuben from Berenberg. Please go ahead.

Hi, good morning. I have a question just on the energy side of things. Could you provide the breakdown again, if possible? And I know you mentioned it briefly in the presentation, but just to get some more color and also just generally, I know you've given some detail around how you're thinking about this in the four-year guidance, but is there anything you've kind of changed from, I guess, 2022 in terms of your energy exposure and how you're thinking about sort of hedging some of the volatility? That would be the first question. And then the second question would be, could you confirm whether maintenance shutdowns took place again in the first quarter or if we should expect anything else in the European EAF, it seems like some of the projects are progressing quite well. Could you give a feeling on general timing on when you might make a decision regarding the expansion for SC Tech on your end of things? Thank you very much.

Thank you, Lasse, for the question. I will take the energy question. We didn't hear very well your second question, so you can repeat that. The French project. And that's the third. The third. Can you repeat the second question? Last time we didn't get that one.

Yeah, of course. The second question was just around whether you undertook maintenance shutdowns again in Q1 like you did last year, I think was the case.

Yeah, that's clear. Okay, on energy, basically our total energy bill today is around 100 million. Out of that, around 50% is coke. We are not seeing coke prices impacted by the current situation in the Middle East. 40% around that is electricity, and 10% is natural gas. Although we have seen some peaks throughout the first quarter, the average price in the first quarter of energies, as I explained, are pretty much in line with the previous year. Maybe natural gas is picking up slightly versus the previous quarter, but it's nothing super relevant, as you know. natural gas and electricity typically impact our secondary aluminum business. And although the first quarter in secondary aluminum business has not been very strong, we are seeing a strong business performance improvement in the second quarter already. So our ability to pass through this energy price increases to the customers in aluminum is pretty high. So we don't see that the situation is similar to the one that we saw in 2022, where the main impact was obviously on natural gas, but especially on coke, given by the fact that there was a lot of production of coke coming from Russia and Ukraine. On maintenance, Andres Citega will take.

Thank you for the questions. Yes, maintenance, and basically I think I used to tell you guys that normally it's very difficult to move the very far, the maintenance, because normally the yearly basis stoppage is how the kills run, normally. So, yes, Q1 was expected to be the lowest in the year, once again. Q2, Q3, higher than the Q1, of course, and probably higher, we do expect higher volumes than Q1 and for last year, and the highest, obviously, is the Q4. Q2, Q3 could be similar, but Q4 for sure will All in all, we expect, as we say, some growth in volumes treated, especially driven by US. But yes, the Q1 is the weaker. And how weaker are normally the Qs depends as well in the days that you need to do the maintenance periods and so. But at the end of the day, the importance for us is that we have the stocks, we have the deliveries, and we can run the furnace in a higher level in the Q2, Q3. Regarding the France, yes, you are right. projects ongoing and coming, you know, you have the Tata one in UK, you have the SSAB in Sweden, you have Sagittarius, you have Vestapen, you have as well, you know, ArcelorHijon has started already, well, starting to ramp up and so on. Well, our idea nowadays is probably during 27, 28, start with the project, but it's not still defined because again, The projects of the steelmakers are there, but are not running. I mean, running quick, I said. Probably they are slow and going very careful. So we want to keep more or less the idea of those years, but can move, I don't think, more than six months. So in the range of 28 and running 29 probably is our main idea now, to be confirmed, but not very different than that, unless... any issue coming with the steel dust, or steel, sorry, steel production projects from the steelmakers. We don't know hope already.

Understood. Thank you.

Thank you, Lasse.

The next question comes from the line of Shashi Shekhtar from Citi. Please go ahead.

Hi. Good morning, everyone, and thank you very much for this opportunity. I have a couple of questions. First, how much capacity utilization you are targeting in the steel dust business in US, Europe, Turkey, and Korea this year? And my second question, what zinc LME prices you have used to estimate your 2026 EBITDA estimates? That's it.

Thank you, Sashi. Ashi, I will take the first question, and I will take the one, Elimi.

Yes, I think the capacity utilization, probably you can get the reference for 25 in Europe and Korea and Asia in general. And the one what we do hope to increase this year is the US part. We do think that it's possible for us to increase to 73 to 75 capacity utilization this year based on the contract. This is coming from the, you know, high 60s in the last year. The rest is more or less the same because the capacity in Europe is very, you know, is almost fully, fully and the situation in Turkey, Korea, and China, we do hope that they are going to be more similar to 25. So all in all, we do hope to be in the levels of above or around 75% in the year, which is in the global of PECESA expectation.

And regarding the assumption on LME price on the upper and the lower ranges of the guidance, well, I think what we have said, Sachi, is that The guidance consider a number of moving parts. As you can see on page 19, there are certain elements which are well known, like the treatment charge and the hedging, but there are other elements which are not so well known. LME price is obviously uncertainty, but it is also energy prices, effects, and so on. So I cannot give you a precise number. What we do is we create a more optimistic scenario across a number of variables and a more pessimistic scenario across the same number of variables. And with that, we come out with the upper and with the lower part of the range. But I cannot give you a precise number because there are so many moving parts embedded in the upper and in the lower part of the guidance.

yeah got it thank you very much thank you sashi the next question comes from the line of oliver calve from ubs please go ahead yes hi uh good morning thanks uh for taking my questions um maybe just uh another one on energy impact um you know just trying there what what assumptions are you making on gas and electricity prices in your guidance. It sounds like you're calling sort of the pet coke level flattish for the rest of the year. Or sort of if you could give us a sense of the EBITDA impact of a change in, let's say, 10 euro per megawatt hour of electricity and gas, that would be helpful. Then a second question would be on secondary aluminum. I was just wondering if you could talk to us about the upside and downside scenario given the disruption we're seeing on the supply side, any impacts on metal margins. I think you talked at the last call of something like the 8 to 10 million EBITDA level as a level you're confident with, but is there any upside there? And then just on EEF volumes, So I think you talked about weak volumes in Turkey in Q1, but an expected improvement in the second quarter and second half. Can you just talk a bit about the impact of the European safeguard measures on your non-European footprint, please, given also the expert share of that market? And maybe I'll take the rest in a queue.

Thank you, Olivier. Well, on energy, basically, we are expecting coal prices to continue, as I said, the downward trend, not strongly, but gradual, a slightly positive result coming from slightly better prices across all regions. And you could say that that's like the middle part of the guidance range. On electricity and natural gas prices, I would say also that the average of last year is like the midpoint of the guidance range. As I said, first quarter, we are seeing very stable prices. Obviously, if the crisis in the Middle East continues, that may have an impact, but that is an uncertainty that we have. So that's what I can tell you, Olivier, regarding energy impact. On secondary, Alu, I think you can take it. Yes, thank you for the question, Olivier.

Well, in the secondary aluminum, we really, despite the fact that the Q1 came at the beginning of the year, especially January, with some instances from the producers and so on, because the Christmas period, December, they started up of the year. Later, they are coming back to normal volumes, and the margins we can feel in March, and especially now in April, probably helped, but the high aluminum price, the margin are improving very clear. So, yes, we are optimistic with this, and probably the range that you say, the 8 to 10 million, probably we can see now with a little bit more comfortable, despite, as I said, the fact that the Q1 is still a little bit far from that. But, yes, we see the recovery is coming in that level. And in regards to the electric air furnace, it's a good question about the First, the measures that the European market is taking, with the CBN or even with the idea to put the quotas and less imports, well, this is still to see. Well, in any case, for us in the European market, it's difficult to grow under the current circumstances. So the steelmakers are all expecting to increase the production and as well the prices are going better in Europe. So this is a fact. How that affects to the rest, I think that the main affectation could be probably China that were, you know, having records of export last year and probably will be affected by. They can go to other ASEAN parts, and we will see. In the particular case of Turkey, I think they have their own circumstances, and the Q1 is more related to the, once again, starting of the year than normally they get for maintenance stoppages. So we don't see changes. And based on our deliveries on a daily basis is what is the best for us to understand how the things are going. So we do hope the year will be similar than last year in that case. The measures, we will see what happens.

Thanks. Maybe I'll just ask my last one on EPS. Just if I look at the delta between the low end of EBITDA guidance and the minimum EPS sort of guidance, that's around sort of 160-something million of below EBDA, I'd say, costs. Is that sort of the level we should be thinking about, or any risk this is higher? Just wondering about how we should think about the range at EPS level.

That makes sense. That assumption makes sense, Olivier.

Okay, thanks.

Thank you, Olivier.

As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from the line of Fabian Piazza from Jefferies. Please go ahead.

Hey, good morning, gentlemen. Thanks for taking my question. Some were already covered. A couple left. So first would be the target margin in secondary aluminium after the Bernburg expansion and adding beverages to that portfolio. Can you give us a flavor for that? Is that something where you were expecting to move more towards the mid single digits margin in 2026 already and then further in 2027 or how can we think about that? Second is on interest expense recovery from potentially improved margin ratchet. Could you quantify that? Are we looking at finance expense of more towards 30 million in 2026 or is that too early? And the third and last, could you maybe be more precise on your capital allocation strategy going forward? I guess M&A is not the biggest topic, but could we also expect buybacks for your capital allocation strategy? Thanks. Going back to the queue.

Thank you for the question, Fabian. I would say the aluminum one, the margins. Well, we really hope that the margins in aluminum, the increase in verbal will help because it's more secure, but I think that it's moving in the one single digit is the case. It's going to help because it's more stable than others because it's a tooling basis contract in this case and it's helping. But the margins really are more dependent on the situation of the market. So projecting in a... Me, though, in the top part of the single digit, I think that could be a good range to have a reference in the aluminum.

Regarding the interest spent that we expect for the year, Fabian, yeah, between 30 to 35 million euros is a very reasonable assumption. Okay. Let's say as the year moves on, we will find 20,000, but starting the year, I think that's a good reference. and about the capital allocation for the future. Capital allocation, yeah. I think we have said that we... I think it's a very important message for everybody to understand. We are entering into a new cycle. All the heavy investment is already behind us that has enabled us to expand our footprint globally to the US, which is a very attractive market, and to China. And, well, the capital allocation priorities are very clear. On the one hand, we need to spend 40 to 45 million euros on maintenance capex to keep our asset base running properly. Secondly, we have a commitment to pay a dividend to our shareholders of 40 to 50 percent of the net income. Then we want to keep the leverage below two times for the coming years. That is something that we are fully committed. And then obviously we have some projects like the one of Resitec that Asir explained around the corner, which is delivering a very super high attractive return for our shareholders. After that, all the cash excess will be delivered to the shareholders either via extradition or as a share buyback. I don't think M&A, Fabian is at the moment in the pipeline or in the radar. As you know, we are operating in a very niche environment, very niche industry. The big M&A opportunity was in the U.S. already. Part of our strategy is not to... is not to get into any other businesses other than our core businesses, and obviously, as we have already explained in the previous call, no share buybacks is something that, depending on the valuation of the company and the share price, we will definitely consider.

Great. Thanks, guys.

Thank you, Fabian.

The next question comes from the line of Jaime Escribano-Maitz from Banco Santander. Please go ahead.

Hi, good morning. Can you hear me?

We can hear you, Jaime.

Oh, okay. Yeah. Two questions from my side. One on sync prices and hedging strategy updates. So on sync prices, from your channel checks, if you can provide a little bit of outlook, how you see the supply-demand model, the demand of sync prices seems to be consistent above $3,000. So just to have your view there. And in terms of hedging strategy, if you can update us until when you have the hedges and if you think you can hedge a little bit more at current prices. And the second would be more in the interim. So the stock is down around 6% today, probably illiquidity. We know that it happened in the past. But what could you say in order to provide comfort to investors in order, so in terms of your visibility and in terms of the guidance in order to provide some assurance to the stock in the short run? Thank you.

Thank you, Jaime. On hedging, I think you have all the details on the presentation on the slide 12, and I have covered that. We are fully hedged until July 2028 at record high SIN price levels in dollars. We are continuing to monitor, obviously, the opportunities. There are two elements in here. One is the spot price, and then the other thing is the future core, whether that is in backwardation That means the future prices are lower than the current spot prices or the opposite, no? Yeah, we're monitoring. It is true that even in the current volatile environment, commodity prices, especially in prices, are holding up pretty well. And yeah, we will keep you posted.

On the stock, I see it has... Yeah, well, I think that talking about the stock is difficult for us because obviously we think that the stock is far from the point it should be if I were managing the market, right? Now, being serious, I think that no matter what happens today, because probably the reaction of one was expecting more, one was expecting less, I think we are in line with what we are telling. I mean, the next two, three years until we do the next investment in Europe are going to be growing years based on the U.S., basically, despite... because based on the U.S. and the volumes and the hedging we have. So we are on our way to 300 million EBITDA in three, four, five years, and very, very, you know, cash-generating company, reducing the leverage ratio probably in the next three years below 1.5. So, yes, I think we are going to have a very, you know, good financial and balanced situation. So I do hope that the share... deserves more prices. But obviously, the market is the real owner of those things and decisions and going forward. I think that today probably is a very short time But probably once you guys analyze the numbers and reaffirm that we are on our way to these 300 and growing EBITDA and cash generating, as Rafa explained, we can do more things with the retribution to the salesholders. And why not doing other things? But at the end of the day, I think that we are on path of that. And nothing strange has happened in this Q1. It's just the point moment of the Q1 because the maintenance, the rest of the year, we can do it. So we are positive and optimistic that we will reach very soon this 300 million, and then we will see the next four or five years.

Yeah, and from my side, nothing else to comment on top of us here. What I would say is that this is going to be the third consecutive year of EBITDA growth. We have been delivering the balance sheet over the eight consecutive quarters. EPS is going up. We are in the middle of a shift in the steel industry, both in the U.S. and in Europe. It is true that China is not delivering, but that's an option. We are not considering China for reaching the 300 million euros that Asir is mentioning. I think the company is in a very good shape. Thank you, Jaime.

Thank you.

The next question comes from the line of Anis Gaya from Oddo. Please go ahead.

Yes, thank you very much. Good morning. And my question, I have only one. So it's on the 26 Gaya. So it's roughly 18 million year on year improvement. And could you how this improvement is split between higher U.S. steel dust volumes and the recovery in secondary aluminum, including any contribution from Bernberg in half to 26. Thank you.

Well, I think if there are

The aluminum and the U.S. steel volumes are the drivers to go to the high part of the year, but together with the guidance, sorry, but together with many other assumptions about sink price and about the electricity and energy cost and the inflation, so everything is together. I mean, I don't think it's worthy to say what we are considering. I think it's like... Basically, we do hope that 10% still does volumes, you know, increase in U.S. to come into 75%, and the margins to aluminum to come to 8 to 10 millions. And this is more or less one of the considerations you have. But the zinc and the others, probably you guys have to do your model as well.

It has no sense to discuss about what to put there.

The next question comes from the line of Adana Ekoku from GoMorgan. Sally, please go ahead.

Morning. Thank you for taking my questions. I've got two left as well. So just to follow up again on the 2026 EBITDA guidance, last quarter you mentioned you were comfortable with consensus, which was at about 260 million for 2026. That's now the midpoint of the new guidance, but Since then, we've had a much more favorable zinc-TC settlement. So I just want to understand a bit more what's changed since then. Is it just the energy cost outlook? And second, just on volumes to confirm, do you have any maintenance left over for Q2? And on the U.S. steel dust volumes ramp up, is this more a second half-weighted trajectory or should we expect this to be more even?

Good questions about the comfort table, about 260. Yes, it's true that we're coming better than we were expecting in the last report, in the last call. Yes, we were expecting around 100, 110, and now it's 85. So it's not a very big difference at the end of the day, but obviously it's a difference. Positive, we are happy with that. And yes, it's still probably the 260, 65 difference. could be that it's a good figure for us to have in consideration. And more or less, the midpoint always that you discuss with you is the point that you get and the point that we are more or less comfortable. Obviously, they were not having the certainty three, four months ago about the situation in Iran in the Strait of Hormuz and so on. So it's difficult for us. So we have to put more things on the ideas and the framework to do the guidance. But yes, I think that the midpoint a little bit better, although depending on those things probably is a good reference for a nothing change, despite the fact that we have some millions better than the treatment charge. In terms of the volume, yes, Q2 and Q3 are going to come better and higher than the Q1. But again, there are still splits of maintenance in the two Qs, less than the Q1. And the year where we have less maintenance definitely is the Q4. So putting a growing from last year, I think probably last year is a good reference. And on top of this, the 10%, that 10, 12% that we hoped that we are going to have this year in total, probably is a good reference. And yes, the volumes in US are developing as expected at the end of the day. We do hope that second quarter will come even higher and stronger than the Q1 and Q3, probably Q4. I think it's growing. The worst in terms of lower production because the maintenance has over in the year.

Perfect. Thank you. Thank you, Adana.

We have a follow-up question from the line of Olivier Calvé from UBS. Please go ahead.

Yeah, I just wanted to quickly follow up on secondary aluminum metal margins. I'm just wondering if you can comment on the levels you're seeing right now, given the disruptions to production there. And then just a few comments, maybe, given higher electricity prices in the smelter, the U.S. smelter.

Yeah, well, I think that we are now in the current situation. Again, the Q1 is not a good example because it's everything affected. And to have an idea of the margin in aluminum, we need to hope this April, May, because it's affecting by higher energy prices, but higher price as well. Well, the margins are coming higher, but we need to hope, as I said before, in that range. But it's difficult to get the conclusions now. We are watching the increase in margins, but it's a matter of gradually. We do hope that we are going to be able to transfer the energy increases to the customers at the end of the day.

The mechanism for that is basically higher prices.

Yeah, yeah, higher prices, but you have to consider that we have higher prices in sales, but we have higher prices in purchase with the scrap as well. So that's why we talk about margins. And the high price helps because you have more price to calculate even the same margin. You get better profits, right? But at the end, it's depending on how you manage the purchase and sales and then the cost to be transferred to the customers.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Rafael Perez for any closing remarks.

Thank you all for your questions. You can also contact the Investor Relations Team of EFESA for any further clarification. We will now conclude the conference call and the Q&A session. Thank you very much to all of you and have a good day.

Ladies and gentlemen, the conference is now over. Thank you.