GrafTech International Ltd.

question, press star one again. Thank you. I would now like to turn the call over to Mike Dillon, Vice President, Investor Relations. Please go ahead.

Good morning and welcome to Graphic International's fourth quarter and full year 2025 earnings call. Thank you for joining us. Joining me on the call are Tim Flanagan, Chief Executive Officer, and Rory O'Donnell, Chief Financial Officer. Tim will begin with opening comments on our 2025 performance and an update on the commercial environment. Rory will then provide more details on our quarterly results and other financial matters. 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, our comments today 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.graptech.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 Graptech's fourth quarter earnings call. We are operating in one of the most challenging environments the graphite electrode industry has seen in almost a decade, marked by global overcapacity, aggressive competitor behavior, geopolitical uncertainty, and steel production trends that remain subdued in many regions. Despite these headwinds, our team continues to deliver for our customers, manage our cost structure aggressively, operate safely, and make meaningful progress on the priorities we laid out at the beginning of 2025. One of our primary objectives for the year was to continue to grow our volumes and market share and improve our geographic mix by shifting more business towards regions with stronger pricing fundamentals, particularly the United States. Our team executed this strategy effectively. On a full-year basis, we increased sales volume by 6%. As we have shared, our commercial strategy includes making deliberate decisions to walk away from volume opportunities that do not meet our margin requirements. This discipline is essential to protecting our long-term value, and we at Graphtec refuse to follow some of our competitors in the race to the bottom. While this meant that our full-year volume finished below our most recent guidance range, it was the right decision for our business and consistent with our commitment to value-focused growth, not volume for volume's sake. As it relates to our geographic mix shift, In the United States, our sales volume grew 48% for the full year, and in the fourth quarter alone, our U.S. volume was up 83% versus the prior year. The shift towards the U.S., which remains the highest-priced region globally, helped mitigate some of the pricing pressure we experience in other markets, as we'll speak to later. Cost management was another key area of focus for 2025, and we delivered meaningful results. without compromising our commitment to quality, safety, or the environment. For the full year, we achieved an 11% reduction in our cash cost of goods sold per metric ton. This brings the cumulative reduction since the end of 2023 to 31%, a remarkable achievement over a two-year period. Our ongoing cost management initiatives, including enhanced procurement strategies, energy efficiency improvements, and discipline production scheduling have been instrumental in driving these results. In addition, a key element of our strong cost performance in 2025 was the effective management of the impact of tariffs on our cost structure. Overall, our cost management efforts have created a more agile, more efficient manufacturing footprint that positions us well to control our production costs while navigating volatility in demand. These actions combined with the effective management of our working capital and capital expenditure levels resulted in full-year cash flow performance and a year-end liquidity position that exceeded our expectations. To that point, including cash on hand of $138 million, we ended 2025 with a liquidity position of $340 million, a level which enables us to maintain stability despite the persistence of industry-wide challenges. Lastly, we delivered on all of these objectives while achieving meaningful improvement in our safety performance. Turning to the next slide and building on this point. As you can see, our total recordable incident rate improved to .41 in 2025, representing our best safety performance on record. As we enter 2026, sustaining and building on this momentum must remain a critical focus. Our ultimate goal is zero injuries, and we will continue to work relentlessly towards that standard every single day. Looking back on all that was accomplished in 2025, I want to sincerely thank our entire team around the world for the remarkable efforts, resilience, and commitment during this pivotal time. Turning to the next slide, let me provide our current thoughts on steel industry trends as context for the rest of our discussion on our performance and outlook. Global steel production outside of China was 843 million tons in 2025, up less than 1% compared to the prior year, with global utilization rate of approximately 67% on a full year basis for 2025. Looking at some of our key commercial regions using data recently published by the World Steel Association, for North America, steel production was up 1% in 2025 compared to the prior year, driven by 3% year-over-year growth in the United States. Conversely, in the EU, steel output in 2025 decreased 3% compared to 2024, remaining well below historical levels of steel production and utilization for that region. In fact, with 126 million tons of steel production within the EU in 2025, this represented a decline of more than 15% compared to the historical high levels of EU steel production achieved in 2021. Further, we estimate that steel utilization rates within the EU averaged just over 60 well below the global average. Although the overall steel sector is still experiencing short-term challenges, as we've mentioned previously, there are indicators of rebound in the steel market have started to appear. Based on World Steel's most recent short-range outlook for steel demand, globally outside of China, World Steel is projecting 2026 steel demand to grow at 3.5% year-over-year. For the U.S., where the steel industry has experienced relative stability, world steel is projecting a 1.8% steel demand growth in 2026. Along with this demand growth, favorable trade policies are expected to further support US steel production. In Europe, where the steel industry has been more challenged, world steel is projecting a return of steel demand growth in the near term, forecasting demand growth of 3.2% for 2026. This reflects some of the demand drivers we've discussed in the past, including initiatives to increase infrastructure investments, defense spending representing some of the key steel-intensive industries. In addition, provisions within the carbon border adjustment mechanism for CBOM implemented at the beginning of 2026, as well as new carry protection measures that will be effective later this year, are expected to support higher levels of production in this key commercial region for graphitech. Against this backdrop, we estimate that globally outside of China, demand for graphite electrodes will increase slightly in 2026, with all major regions expected to contribute. That said, it's not the level of electrode demand that's the key factor holding back our industry today. It's the supply side imbalance and ultimately pricing. This supply imbalance is driven by the gross overcapacity that has been built in both China and India, with Indian manufacturers expressing plans to bring additional and unneeded capacity to the market. Combined, they are flooding the markets with cheaply priced exports, which continue to distort the competitive landscape and threaten to destabilize the entire supply chain. In response, pricing behavior of other competitors have become increasingly aggressive and arguably irrational. All of this has translated into realized prices for the graphite electrode industry that have declined significantly over the past few years. For some time, we've been clear that the pricing levels are unsustainably low and not aligned with the indispensable nature of an electrode, let alone the level of investment required to maintain a stable, reliable supply of graphite electrodes for the steel industry. Further, the level of capacity rationalizations that have been announced by ex-Chinese electrode producers to date has been inadequate to address the structural overcapacity issue within our industry. As a result, we saw a deterioration of competitor pricing discipline in the fourth This has happened even as steel makers in the US and Europe announced price increases for finished steel products, reinforcing the disconnect between value creation in the steel industry and the pricing environment for graphite electrodes, a mission-critical consumable. Ultimately, the current market dynamics endanger long-term viability of the graphite electrode industry. Given these realities, structural change on the supply side is long overdue, and a failure to change the current course of the electrode industry will undoubtedly result in equilibrium that will harm the steel industry for the long term. As the only pure plate graphite electrode producer outside of India and China, we remain committed to actively shifting this dynamic in order to support our customers who rely on us for quality and reliable products. To that end, let me send a clear message to all of our stakeholders. As a leader in the graphite electrode industry, Graphtec has and will continue to act decisively. In light of the prolonged downturn in the market environment, management, with the support of our board, continues the evaluation of a number of areas, including optimizing our manufacturing footprint, opportunities for trade or policymaking support on a number of fronts, as well as other potential strategic partnerships and sources of capital. The focus of these efforts is to identify opportunities to enhance efficiency preserve optionality, and position graph tech for long-term value creation. With that, I'm going to turn the call over to Rory, who will provide some more color on our commercial and financial performance for the fourth quarter. I'll then wrap up our prepared remarks with further comments on our outlook, after which we'll take your questions.