Acerinox Sa

Hello all and welcome to Acerinox third quarter 2023 results presentation. My name is Lydia and I'll be your operator today. If you'd like to ask a question during the call, you can do so by pressing star followed by the number one on your telephone keypad. I'll now hand you over to Mr. Carlos Loretaneo, Chief Investor Relations and Communications Officer to begin.

Thank you very much. Good afternoon everybody. and welcome to the Acerinox Third Quarter 2023 Results Conference Call. Today, the call will be conducted by Hans Heldrich, CEO of the group, and Miguel Fernandez, CFO. After our prepared remarks, we will open the line for questions. Before getting started, let me remember you that this conference call is being broadcast on our website, acerinox.com. Now, I would like to give the word to Hans. Please, Hans, go ahead.

Thank you, Carlos. Good morning. Good afternoon, everyone. Let me start with a Q3 glance and what we had in this 2023 Q3. So we had a resilient Q3 EBITDA at 146 million euros despite challenging market conditions across the world. Our teams worked very hard to generate the strong cash of 298 million supported mainly by inventory reductions which led at the end as well to an EBIT reduction of $221 million that Miguel will explain in a second. And our outlook, which we will go a little bit more in detail afterwards, we expect to have a Q4 BDA slightly below what we deliver in Q3. So as I said, thanks to all our employees for the efforts done in this Q3 and the contribution to this good results. If we move into the ESG front, we see evidently the impact that we have been talking in the previous calls on volume in some of the key performance indicators. But let me focus my messages in some of those key elements that we had in this Q3 versus the previous ones. So we continue our focus in our scope one and two on the greenhouse emissions with a reduction of 2 percent versus what we were before. a strong effort in all and we consider, as we said before, that we are one of the leading in the industry in regards mainly to our scope one performance. In terms of waste reduction, we had an 80 percent valorization of all our procedures that we had in the different factories. And as you can see on the right-hand side, with the recycling of 100 percent of many of the elements that we have in our facilities. In terms of safety, I am very proud of the efforts done towards safety across all our facilities. Year over year we have a 19 percent reduction of our lost incident rate in our facilities, which I think demonstrates a very good effort from all our facilities in terms of the safety. Following our positive impact 360 plan, some of our most relevant initiatives that we had in terms of sustainability. Evidently, I have to recognize as well in the health and safety front the World Steel Excellence reward that was provided by this International Association of All Steel Manufacturers. We were recognized by the Excellence Award in Occupational Health and Safety for an effort done in our facility in Columbus in South Africa. Beyond that, we continue to be focused on water footprint usage and evidently in all of the rest of the fronts. And as you can see we had many initiatives in all the factories across the world and we will continue to develop our efforts in the sustainability front. If we go to the market situation and what we have seen in this third quarter, as I said before, a challenging environment across the world. Pressure on prices remains across the world. in all sectors and all industries. Clear impact of China being a non-market driven economy with record production with almost very little local demand. So that means exports of those materials are moving out of the country, but still we see that those exports in the rest of the world remain at lower levels than before. In the stainless steel business, The sustainability exacerbated the decrease in consumption in all the regions. North American prices remain stable. Particularly in the United States, these good base prices deliver good results for the region. Inventories remain at low levels. In general terms, all the inventories are in tonnage at historical lower levels, but consumption remains soft in the U.S. market. Imports dropped by 40% year-to-date to August, which is an important aspect to the local market. And the apparent demand decreased by 27% as well up to August of this year. If we move to Europe, prices remain at historical low levels, even if there were some increases at the end of the quarter, but remain very low. The U.S. is investigating anti-circumcision towards Taiwan, Turkey, Vietnam, which we consider a very positive element for the market. Inventories remain below normal as well in Europe, as I said before, as well in the United States. And import reduced by 56 percent year to date to September, which is significant evidently in the European market. The apparent demand had also decreased in this case by 26 percent year to date to September. Moving to the high performance alloys, here we have a completely different situation. The market maintained its strength. and good prospects, specifically in the aerospace, oil and gas, and chemical industry, where we have a strong presence from our group in BDM. We see a strong situation in the HPM market at this stage and going forward as well. Just to remind everyone that there has been a significant move in the nickel prices in the last month, which affected some of the pricings as well. With that, I would pass it over to Miguel.