GrafTech International Ltd.

Good morning, ladies and gentlemen, and welcome to Gravtech's second quarter 2025 earnings conference call and webcast. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If anyone has any difficulties hearing the conference, please press star zero for operator assistance at any time. I would now like to turn the conference call over to Mike Dillon. Vice President, Investor Relations, and Treasurer. Please go ahead.

Thank you, Jenny. Good morning, and welcome to Graf Tech International's second quarter 2025 earnings call. On with me today are Tim Flanagan, Chief Executive Officer, Jeremy Halford, Chief Operating Officer, and Rory O'Donnell, Chief Financial Officer. Tim will begin with opening comments. Jeremy will then discuss safety, the commercial environment, sales, and operational matters. Rory will review our quarterly results and other financial details, and Tim will close with additional comments on our outlook. We will then open the call to questions. Turning to our next slide. As a reminder, some of the matters discussed on this call may include forward-looking statements regarding, among other things, performance, trends, and strategies. These statements are based on current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from those indicated by forward-looking statements are shown here. We will also discuss certain non-GAAP financial measures, and these slides include the relevant non-GAAP reconciliations. You can find these slides in the investor relations section of our website at www.graftech.com. A replay of the call will also be available on our website. I'll now turn the call over to Tim.

Good morning, and thank you for joining Graftech's second quarter's earning call. Today we'll provide an overview of our second quarter performance, share key operational and commercial updates, and discuss our outlook for the remainder of 2025 and beyond. But before we dive into the details, I'd like to begin with an update on the proactive steps we are taking as it relates to the evolving industry dynamics and heightened macro uncertainty. We have outlined a series of strategic initiatives to meet our key commercial, operational, and financial objectives. Our objectives are clear and include increasing sales volume and regaining market share, improving our average pricing through a combination of price increases and shifting the geographic mix of our volume to higher-priced regions, reducing costs and working capital requirements, and ultimately to improve our liquidity and strengthen our overall financial foundation. Our initiatives have been designed to strengthen our competitive positioning, enhance our resiliency, and ensure we remain well-positioned to generate strong returns as the market recovers. The team is delivering on all fronts and the results have been impressive. Allow me to highlight a few examples from our second quarter performance. We grew sales volume by 12% year over year in the second quarter and 16% sequentially compared to the first quarter. In fact, our sales volume in the second quarter was our highest level since the third quarter of 2022. Likewise, our capacity utilization rate increased to 65%, also the highest level in nearly three years. We achieved a 13% year-over-year decline in our cash COGS per metric ton, and we expect to exceed our initial cost reduction guidance for the full year. We generated positive EBITDA for the first time since the second quarter of last year. And lastly, our cash flow performance and quarter end liquidity position exceeded our expectations. Overall, we're very pleased with these second quarter results. However, I want to be clear. That doesn't mean we're satisfied with the current level of performance. However, we do view these results as a positive step in the right direction. These are signs of progress and momentum, providing a solid platform to build upon for continued improvement. As market conditions recover, we will remain well positioned to accelerate our path back to normalized levels of profitability. With that introduction, let me expand on our initiatives and performance in a few of these areas, starting with the commercial efforts. We are actively leveraging our strong customer value proposition and capitalizing on the commercial momentum we have built to expand our market share and drive continued volume growth. With the second quarter performance I referenced earlier, our year-to-date sales volume is up 7% compared to 2024. Further, we remain on track to increase our sales volume by approximately 10% on a full year basis for 2025 compared to last year. This will result in cumulative sales volume growth of approximately 25% since the end of 2023. This is impressive growth in any market, but is particularly noteworthy given the graphite electrode demand has remained relatively flat for the past two years. It's a clear indication that our strategy is working and that we're outperforming the broader market. However, we continue to face challenging pricing dynamics in nearly all of our regions. While this is partially attributable to the flat market demand, it further reflects the increased level of low-price graphite electrode exports from China and others that we've spoken to previously, which has resulted in excess electrode capacity in the rest of the world. To navigate these headwinds, we are closely monitoring market developments and remain focused on disciplined execution across all areas within our control. To that end, we have taken and will continue to take decisive actions to improve our overall financial performance. These efforts include ongoing actions to strategically shift the geographic mix of our sales volume towards regions where we see opportunities to capture higher selling prices. In some cases, this means making deliberate decision to walk away from volume opportunities where margins are unacceptably low and we're not being compensated to the value proposition we provide. This is consistent with our commitment to a disciplined, value-focused growth, not volume for volume's sake. A key element of this strategy is to grow our volume and market share in the United States, which remains our most profitable region. In the second quarter, we increased our sales volume in the United States by 38% year-over-year. This represents another step change in our U.S. market share and is providing significant support to our average selling price. For the second quarter, our weighted average price was approximately $4,200 per metric ton. Comparing this to the fourth quarter of 2024, where our average selling price for non-LTA volume was approximately $3,900 per metric ton, this represents an increase of nearly 8%. As overall market pricing has remained relatively flat over this period, the growth in our average selling price is attributable to the successful execution of this strategy. While optimizing the geographic mix of our sales volume is an important step towards improving the quality of our order book, the reality is the absolute level of pricing across the industry must increase to more accurately reflect the underlying costs, the value delivered, and the essential nature of graphite electrodes. Earlier this year, we informed our customers of our intention to increase prices by 15% on uncommitted volume for 2025. This increase is the first necessary step on the path to restoring pricing and therefore profitability to levels that will support our ability to invest in our business. Our customers recognize that graphite electrodes are a relatively small piece of their overall cost structure, but are just as important as the scrap they put in their mill or the electricity that powers their furnace. They appreciate the significant steps taken by Graphitech to improve the health of our business before coming to them with the price increase. While capturing higher pricing in a soft commercial environment is never easy, we're encouraged that we're starting to see price stability across many of our key regions. As we finalize customer negotiations related to volume for the balance of 2025 and head into discussions with our customers on their needs for 2026, we look forward to discussing the unmatched value we provide to our customers beyond just supplying electrodes of the highest quality. This includes the reliability of supply and our world-class technical services. all which support a higher price point. We are unwavering in our commitment to serve our customers with excellence and be the most trusted, value-added supplier of high-quality graphite electrodes consistent with our focus on nurturing long-term partnerships built on performance, reliability, and mutual success. Allow me to pivot to cost. I want to acknowledge the outstanding work our team has done to significantly improve our cost structure. from fixed and variable operating expenses to corporate overhead costs. Through disciplined execution and a relentless focus on efficiency, we've made remarkable progress in driving down costs and enhancing the overall agility of our operations. Further, our team continues to effectively manage the uncertainty caused by the evolving global trade-making policy and specifically the impact of US tariffs. As we've consistently noted, our integrated global network of production gives us flexibility around where we manufacture our products, allowing us to serve end markets efficiently and reliably. In addition, we maintain strategically positioned inventories across key geographies, allowing us to meet customer needs even in dynamic market conditions. As a result, we are well positioned to minimize the potential impacts of those imposed tariffs. As we noted in Q1, we expect the impact of the announced tariffs to have less than a 1% impact on our 2025 cash costs, which is reflected in our updated cash COGS guidance. The current trade announcements also present opportunities for our business. We're closely monitoring how various tariff scenarios could influence steel industry trends and shape the commercial environment for graphite electrodes. For example, With the expanded Section 232 tariffs that have been implemented on U.S. steel imports into the U.S., we continue to expect those tariffs will be stickier than the broader tariff programs that have continued to evolve. Further, we expect higher Section 232 tariffs will support an increase in steel production within the United States, and this presents a tremendous opportunity for Graphtec. Based on the latest statistics from the World Steel Association, Nearly 72% of the steel produced in the U.S. in 2024 was manufactured using the electric arc furnace steelmaking approach, an increase of approximately 350 basis points compared to 2023. And as we'll discuss later in our comments, we expect this positive mix shift will continue. Given our strong momentum in this key region, combined with increased tariffs impacting certain foreign graphite electrode competitors, we are well positioned to compete for incremental demand from our U.S. customers. Overall, given the fluid nature of global trade policy, we are continually assessing the range of potential tariff outcomes and taking proactive measures that seek to address the following, minimizing the risk for graph tech, capitalizing on emerging opportunities, and promoting fair trade in our key regions. Above all, our focus remains on meeting the needs of our customers, and we are confident in our ability to do so. Taking a step back regarding our second quarter performance, we're pleased that our efforts across all of the areas that I've discussed are beginning to translate into improved bottom line performance. This reflects signs of progress and momentum towards our objective of accelerating our path back to normalized levels of profitability. To that end, I want to sincerely thank our entire team around the world for the remarkable efforts, their resilience, and commitment during this pivotal time. Their dedication continues to drive our progress and position us for long-term success. With that, let me turn it over to Jeremy to provide more color on our operational and commercial performance.