RHI Magnesita N.V.

Today's RHI Magnosita Q1 trading update. My name is Seb and I'll be the operator for your call today. If you'd like to ask a question during the Q&A session, please press star 1 on your telephone keypad. If you'd like to withdraw your question, please press star 2. You can also submit text questions via the webcast. I will now hand you over to Stefan Borges, CEO, to begin. Please go ahead.

Thank you very much. Good morning from Vienna. I'm Stefan, the Archive Minister CEO. I'm joined here in the room by Ian, both our CFO and our industrial relations team around Alex Aldos. Let me give you the highlights, the key messages for the last three months, or the first three months of the year, and then I give you a bit of more granularity around this, and Ian will give you some headline numbers. The four key messages. Unfortunately, demand for refractories across both of the big market segments, steel and industrial, was slightly weaker in the first quarter of 2026. than in the appropriate time period in 2025. Our own volumes into the steel market were more or less in line with prior year, with some pricing coming through, pricing benefits coming through, but our industrial project-related volumes remain subdued even compared to last year. First message. Really, still very such demand. Second message, our adjusted EBITDA increased meaningfully year on year, which was all related to the continued execution of our self-help initiatives that we have put in place and that we continue to accelerate. Some pricing actions to catch up with cost increases, actually. a lot of cross-discipline around our company, network optimization in our production network, and some targeted supply chain measures also supported this EBITDA growth. Additional activities around the geopolitical surprises that we experienced during the first quarter, really relying on our digital supply chain capabilities that we have now, that we have built in the last years, helped us to navigate through this difficulty around logistics problems around the street of Hormuz quite well. That's the second message. Very good EBITDA improvement. The third message is We can reconfirm our full year guidance for adjusted EBITDA of 435 million on a constant currency basis or 400 million around if we take today's view on foreign exchange rates into consideration. Same outlook that we had in the full year three months ago. And that's where... translate together with our strong cash generation that we show a leverage reduction towards about 2.6 times net debt to each time. Those are the three key messages. Very weak demand, really good progress on the profit development of the company and affirmation of the guidance both on cash flow as well as on profitability. Let me give you a bit more detail now about these topics. Demand remained weak. It's a challenging market in which we are, and it is made more challenging through the geopolitical tensions. Our own steel volumes were broadly in line with the first quarter last year, some moderate pricing benefits, but their regional performance is actually quite different. On the industrial project side, our volumes stay subdued. In the steel segments, price improvements helped to have a slightly positive trend on the top line, on the revenue line. This is an encouraging performance because the global steel production fell by 2.3% in the first quarter of this year. 2.3% lower steel production globally. just published by World Steel Association, compared to the first quarter of 2025, which wasn't exactly a banger. Our cost management measures, together with the pricing benefits, supported a recovery in the gross profits towards more normalized levels, with a clear improvement compared to the prior year, clearly. And based on our current visibility, we see early signs of a Possible gradual improvement in steel demand through the remainder of 2026, although some of the Western world steel reporting, the early ones from the first quarter, are not super encouraging on the volume side. In industrial markets, cement season was broadly normal, not super strong. earnings very similar level than the first quarter of 2025, but the industrial project-related volumes remain still very, very low. Non-ferrous metals were broadly flat versus last year, but glass volumes in the first quarter were even lower than 2025. Also here, our cost discipline, together with some pricing action, supported gross profit in positive gross profit so that we could at least keep it flat year over year despite lower volumes. The order book in industrial projects shows a good improvement, especially in non-ferrous metals, in other market segments less so. So we are carefully confident about the improvements, especially in the second quarter. That is very clearly there because we're already producing the materials against these orders. But also in the second half of the year, the order book looks slightly better than last year. I'd like to give you the regional perspective of this as well. North America, and not just the segment perspective, North America and Latin America continue to deliver strong earnings in Q1. In North America, the steel business performed well alongside quarterly steel production growth of 2.3% per year compared to last year, despite supply chain disruptions because of all the winter storms. That happens in the U.S., so nothing to worry about, and that equated each other out over time, not fully in the first quarter, but that will happen. In Latin America, our performance was more driven by the strength of the industrial business than by the steel business, because steel in Latin America is down. India, China, East Asia, and Middle East, And Africa performed broadly in line with our expectations, with a little bit stronger steel performance in those regions, offsetting weaker industrial demand pretty much everywhere in this part of the world. Europe and CIS underperformed across both steel and industrial in terms of volumes, reflecting a volume shift from the first quarter into the second quarter, especially on the industrial side. In Europe, the performance is expected to improve over the remainder of the year, especially driven by the cost reductions that are now coming into the P&L step by step and by a recovery of a slow in the industrial projects. Staying with Europe, we have to note that towards the end of the quarter, we announced a review of our production footprint in France, which includes the potential to close one plant there and to convert another one into a recycling hub because it's really well positioned there from a circular economy perspective in the middle of many, many customer sites. To advance this discussion, We are deeply engaged with the local works councils and we of course are totally committed to manage this transition responsibly together with them. The actions are part of the ongoing network optimization program that aims at improving our competitiveness, our operational efficiency, improve our customer service level and reduce our costs. The conflict in the Middle East had not had a material impact on the group's performance until now. Local customers in the Middle East clearly were affected. We had lower volumes to them because they produced less and they needed less. But our overall exposure to that region in the total context of RSI and Magnesita is relatively small, so we don't feel it in the total context very much. Yes. Important to be noticed, we are kind of proud that all shipments that were affected by this, you can imagine dozens and dozens of containers were affected when this incident happened some weeks ago. But all of them were successfully redirected via alternative routes. with a super fast reaction that started even on the day of the very first attack that happened in that region. On that very day, we already redirected some of the shipments. And that shows that the supply chain capabilities that we have built in the last three years enable now a really rapid response, service level for our customers that are not affected by such disruptions, although not, even not the service level in that region. And therefore, I think we have a really world-leading supply chain capability and delivery capability for our customers now. More broadly speaking, inflationary pressures that are linked to the energy costs and freight costs and now also related raw material costs are being actively managed. We are largely able to mitigate the impact on RHI Manzita through pricing measures, including surcharges for those activities. Customers are very cooperative. It doesn't affect them very much because it's such a small part of their total cost, so they work with us. It's a really good and open discussion with customers, and pricing is generally accepted here. The longer-term impact of the conflict remains uncertain. We can just not predict this. We will continue to monitor this closely, and if we can see structural changes, of course, we will let everybody know and talk about it. Against this backdrop, for local strategy and our modern, increasingly digitalized supply chain capabilities continue to support the service levels that we can offer to customers, and we can really be confident that we can deliver here, because we've just tested these capabilities. Let me head over to Ian, who will give you a bit more details on the numbers. Ian. Thank you, Stefan.

Good morning. Adjusted EBITDA in the first quarter increased by approximately 15% year-on-year, or 46% on a constant currency basis. This improvement reflects sustained cost discipline and the ongoing benefits of self-help measures implemented in 2025 and in 26, supporting a recovery in profitability towards more normalized levels. Foreign exchange represented a significant headwind, as regarded, primarily due to the year-on-year depreciation of the US dollar and the Indian rupee. We confirm our full year guidance for adjusted EBIT A of $435 million on a constant currency basis or approximately $400 million after foreign exchange impacts. The improvement in earnings continues to be underpinned by four structural levers, most of which are progressing in line with our expectations. First, our network optimization program is on track. Second, SG&A reduction is delivering in line with expectations driven by digitalization, process standardization, and the continued expansion of our shared services model. Third, pricing discipline remains strong, supported by the ongoing expansion of our 4Pro offerings. And finally, we are seeing early signs of a gradual improvement in the industrial business, particularly as Stefan mentioned, in non-ferrous metals. These measures have already demonstrated their effectiveness in the second half of 2025, and we remain confident in their continued contribution to earnings improvement to 2026 and beyond. Turning to net debt, net debt increased in Q1 compared to the year end, 2025, with leverage remaining broadly in line with recent levels. The increase was driven by higher working capital, reflecting a planned build-up in inventories ahead of anticipated stronger sales in the second quarter, particularly in industrial projects. This build-up is consistent with normal seasonal patterns, and is expected to unwind over the remainder of the year. Cash conversion for the full year is expected to exceed 90%, supported by disciplined working capital management. Year-end working capital intensity is expected to be around 22%, in line with our earlier guidance, although it will be higher at the half-year, as is normal. We expect net debt to decline over the course of the year to around $1.4 billion, with leverage reducing to approximately 2.6 times by year-end. I'll now hand you back to Stefan for closing comments.