Befesa S.A.

Good morning and welcome to the first half of 2026 results conference call of BEFESA. I am Rafael Perez, CFO of BEFESA and 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 salt slag recycling businesses. I will then review the first half financials by business and cover the evolution of commodity prices, hedging program, and finally Cash Flow, Net Debt, Leverage and Capital Allocation. Asier will close the presentation providing an update of the outlook for the rest of 2026 and an update of our growth plan. Finally, we will open the line for the Q&A session. Before getting started, let me remind you that this conference call is being webcast live. You can find the link to the webcast on our website. Now, let me turn this call over to our CEO, Asier, please.

Thank you, Rafa. Good morning, all. Moving to page five of the financial and business highlights. The FESA has delivered strong second quarter results, resulting in a remarkable first half results with solid volume growth, especially from our operations in the U.S. Total adjusted BDA in this half has been Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs The deleveraging trend continued with financial leverage reduced to 2.18 in June 26 compared to 2.7 in June 2025. The increase in net income and EPS of 13 per share year on year reflects our improving profitability. In the steel dust business, we delivered a strong EVDA in the first half, driven mainly by higher sink spot prices and volume growth. Our secondary aluminum business remains operating in a challenging business environment. The continuous high scrap leakage in Europe with desperate volumes of alu scrap results being currently at a record height in a challenge for the interior sector and the supply side. Regarding the group outlook for the full year 2026, we confirmed our media guidance in the range of 250 million euros to 270 million euros. This outlook is mainly based on higher steel dust throughput, especially in the U.S. After a solid performance in the first half of the year, we remain optimistic for the second half of the year. Same prices at an elevated level, which is favorable for us. However, the macroeconomic and geopolitical framework remain volatile. We will continue to execute our selective growth projects with high returns. These results in a limited growth capacity requirement while at the same time laying on foundation for future growing growth and continuing reduction of our financial leverage. We continue strengthening our balance sheet further with a targeted leverage ratio below 2.0 by the end of the year. Moving now to page six with the business highlights for the steel dust business. European steel production continued at a five-year low level in H1, with a flat development year on year caused by weak end market demand. Despite this, the low factor increased by 6% to 91%, driven by strong bus deliveries, especially in the second quarter. Steel production grew DIP by 6% in the U.S. Consequently, our business in the U.S. benefited from this development through the higher-dust deliveries. The low-out factor increased by 11% to an average utilization of 75% in Q2. In Asia, volumes in Turkey were weak, and Korean operations remained at a similar level than last year, and we expect both markets, Turkey and Korea, to improve in the second half of the year. China. Utilization reminded to do it. Earnings, however, were still at break-even levels. Moving on to page seven, business guidelines for the aluminum salt slag recycling and secondary aluminum recycling business. On salt slags, volume were flat this year over year. In the second quarter, as volume have normalized. We expect normalized production for the rest of the year. In secondary aluminum recycling, volumes are still under pressure caused by challenging market environment, which is characterized by lack of scrap, as discussed earlier, and a continued weak demand for automotive customers. However, the metal margin improvement seen in the Q2 is a good sign that is expected to continue during the second part of the year. Now, I hand over to Rafa, who will explain the financials in more detail.

Thank you, Asier. Moving on to page 9, the financial results for the steel dust segment. The adjusted EBITDA increased in the first half of the year by 8% to €104 million, and the according margin improvement by 260 basis points to 27%. The €8 million improvement adjusted EBITDA was driven by higher limit price, volume growth, as well as lower cork prices, and was partially offset by unfavorable effects and general inflation. Our global low factor improved by close to 4% year-over-year, providing better operational leverage. On price, SING LME increased strongly year-over-year and was the main contributor to profitability growth. Hedging was a slight headwind on Euro terms. The combination of LME price hedging and FX resulted in an increase in the blended SING price in Euro terms by more than 3% year-on-year. The increase in sin treatment charge from 80 to 85 US dollars per ton was a very minor headwind, which was almost negligible in the reporting period. The impact from FX movement, namely Euro to US dollar, was negative in the first half of the year, whereas the headwind was significantly less pronounced in the second quarter compared to the first quarter of the year. General inflation in contracts accelerated in the second quarter sequentially driven by fuel cost. Moving on to page 10, financial results of our aluminum segment. Aluminum solar slag grew revenues by to 61 million euros and EBITDA to 18 million euros. Both revenues and EBITDA improved year over year by 10%. While volumes declined by 4% and were a headwind to revenues, Price increased and compensated for the volume-related headwind in both top and bottom line. In secondary ALU, revenues and EBITDA were at the prior year's level. The decline in volume was compensated by higher aluminum prices. EBITDA was furthermore supported by better metal margins. Moving on to page 11, same price and treatment charges. The average LME SIM price during the first half of the year was $3,353 per ton, which is 22% above the same period of last year's average. The average of the second quarter of 2026 was $3,463 per ton, compared to $3,243 per ton in the first quarter. The euro-to-dollar exchange rate increased from 1.09 to 1.17, representing a headwind in the period. On the right-hand side of the slide, on treatment charges, nothing new. In 2025, treatment charges for zinc were at $80 per ton for the full year. This year, treatment charge was settled at $85 per ton, with the impact on profitability can almost be neglected. Turning to page 12, hedging. We have continued to take opportunities in the market to extend our SING hedging book until January 2029. Our hedging book today covers close to 30 months of hedges and does the entire fiscal year of 2027 and 2028. We have done this at record high levels of $3,100 for 2027 and 2028. We continue to monitor the market to close volumes for 2029. Now turning to page 13, BEFESA's energy prices. The page shows the evolution of the three energy sources that we have at BEFESA, coke, natural gas, and electricity. Regarding coke prices, which today represent around 50% of the total energy bill in the company, the normalization trend continued, and the war in the Middle East had, so far, no impact on prices of supply. Average coke price in the second quarter was around 144 euros per ton. which is roughly 10% lower than the same period in last year. Regarding electricity, which today accounts for around 40% of the total energy expense, prices were approximately on last year's level. Natural gas prices, however, were slightly upward slopping and were driven by the arising uncertainty resulting from the war damages on natural gas infrastructure in the Middle East. Turning to page 14, cash flow results. Operating cash flow in the first half reached 71 million, which represents an increase of 10% compared to last year. On the EBITDA to cash flow bridge, starting with 124 million euros of adjusted EBITDA and to the left, working capital related cash out amounted to 44 million euros in the first half of the year, about 12 million euros higher than in the first half of last year. The main reason for the increase in working capital in the first half was predominantly due to inventory buildup of works which I have addressed earlier. In the second half of the year, we expect a normalization of the working capital following a similar trend that in the previous years. Taxes paid in the first half of the year came in at 5 million euros compared to 12 million euros in the first half of last year. Operating cash flow was 71 million euros compared to 64 million euros the previous period. On CAPEX, in the first half of the year, we have invested 31 million euros in regular maintenance. Growth CAPEX this year is relatively front-end loaded and was 15 million euros. This is related to the expansion of our bamboo plant in Germany. In summary, total CAPEX was 46 million euros in the first half compared to 37 million euros in the same period of the last year. For the full year, we continue to expect total capex to be around 70 million euros. Total interest paid amounted to 15 million euros, and total bank borrowing amounted to 18 million euros in the first half of the year. For 2025, the EGM approved in June 2026 to pay a dividend of 40 million euros in July, equivalent to one euro per share, or 50% of 2025 net income. In summary, final cash flow amounted to minus 8 million euros in the first half. Cash on hand stood at 134 million euros, which, together with the 100 million euros fully undrawn revolving credit line, provides BEFESA with almost 240 million euros of liquidity. Gross debt at the end of June 2026 stood at 690 million euros, and net debt stood at 555 million euros, Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs Ayo B.Com. As a reminder, two years ago in June 2024, leverage stood at 3.4. This development underlines the strong cash generation capabilities of our business and the capital allocation discipline in the period. Following the refinancing back in July 2024 and the repricing in March of last year, BEFESA today has a strong long-term capital structure with optimized financial costs. We will continue reducing the leverage to a level or below two times by the end of the year. To do so, we limit the growth capex on these projects that will deliver immediate cash flow upon completion. Also, we will keep the annual regular maintenance capex around 45 million euros in the coming years. On dividend, we are committed to maintaining our dividend policy to pay between 40% to 50% of the net income to shareholders. Moving on to page 16, BEFESA has entered into a new cycle of low CAPEX and growing earnings, which results in a strong frequent flow generation growth and shareholder value creation. During the last years, we have improved our international exposure of the company to a truly global player, which did not come without the required investment. This step is now concluded, and we are now entering into a cycle of structurally lower CAPEX requirement, below 80 million euros per year. Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs As I already mentioned, we aim to keep leverage below two times for the coming years, enabling greater optionality in future capital allocation decisions. Now, back to Asier on outlook and growth.