Acerinox Sa

Good morning, everybody, and welcome to Atherinox earnings conference call for the second quarter 2024. The call will be hosted by Bernardo Velázquez, our CEO. Miguel Fernández, who you all know and was the CFO for the last 25 years, has been appointed chief corporate officer of the group. In addition to his current responsibilities, he will assume those of the indirect procurement information systems, corporate risk, sustainability, and cybersecurity. As you can see, we have also a new face here. It's my pleasure to introduce you, Esther Camoz, who will replace Miguel as CFO of the Acerinos Group. Esther has 30 years of experience in the company. And among other responsibilities, she was the Director of Consolidation, Budgeting, Tax, Financial Reporting, and Financial Planning. A huge congratulations to both of you. As in other occasions, we will start with a short presentation and then continue with a Q&A session. Before getting started, let me remind you that this conference call is being broadcast on our website, atherinos.com. where you can find also the financial statements and the management report for the first half of the year. And now, with any further ado, I would like to give the floor to Bernardo.

Please, Bernardo. Our business model, so we should make changes in our organization, also looking for this agility and this flexibility and this efficiency in decision-making and in the management team. So that's the reason of these changes. Moving to the first slide, we are happy to say that we are presenting a strong set of results in a very weak scenario in the stainless steel market and after a five-month strike in the Algeciras plant. After five months of negotiations, finally we reached a good agreement for everybody. We could explain, as we wanted, the necessity to change the business model in the Spanish plan to have more flexibility and to get adapted to the cycles of the economy much faster than today. In this scenario, we have a stronger generation. It's also based on the stock management and working capital management, and this led us to reduce our debt to 191 million euros. I think it's a very remarkable number. And as we will explain later with more details, we expect the Q3 EBITDA to be in line with Q2 more or less. Under these circumstances, we targeted to work in the capital reduction to do and manage what we can manage. I think we are in a very good situation with this low debt to be able to access and to have a higher target in the future.

We clearly keep committed on sustainable development, and we are extremely proud of our contribution to circular economy. In this regard, we are presenting as normally the targets and the key PAs we have for the organization. It's clear that we are overachieving in specific targets, and we are extremely proud. We are by far overachieving in water withdrawal. with already a 46% reduction from the baseline, substantially better than what was our target. We are also extremely proud, as I said before, in our contribution to circular economy, especially in waste reduction. So most of our, as appears in the cycle, we are recycling most of our spurs and consumables. We have obtained a 90% valorization of this waste, and in addition, even improving. We have closed in this first semester with the support of the regional government of Andalusia also another project for using slag as a concrete aggregate. So still we have room to improve on that. So clearly there are areas in which we are overperforming. We are absolutely on the right track on other areas, for example, in terms of diversity as appears here. We also are comfortable in safety. We have put the two colors on the safety. It's clear because even though the figures reported for the first semester are not fine yet, obviously we have been affected in this estimation by the disruptions in the first semester, has been also some minor incidents, but we keep also comfortable that during the second semester we shall be able to fill on the the targets established for the year. So in this regard, we are definitely proud. There are two areas which have been not under our control, and these are the areas which appear in red or in yellow. This is regarding, obviously, one is regarding the carbon footprint in terms of emissions, and the reason is very clear. The most intense and efficient in renewable energy of our plants is the plant of Afrinas Europa, And as you know, five of the six months of this semester, this plant has not been running. So consequently, we have not been able to take advantage of that use of renewable energy. In addition, also, another part which is not under our control yet is the fact of the energy intensity. This is a parameter which is obviously linked to the productivity. And again, we have in one of our plants, mostly as Africa and Europe are only running one month, but also we must keep in mind that in the actual market conditions, we are not running full in North American steelers, which traditionally we always have been running full. This is not the case. Still, the market is not allowing that. And also in Columbus, we are running at low capacity utilization. Still, we are consequently not favorable for this productivity to be fulfilling our targets. Any case, We are not only waiting for the market to improve because in addition, as shall be explained later, in our Beyond Excellence plan, there are a lot of areas in which we can improve. So we shall not only be depending on the activation of the market because we are also concentrating on that. We are also concentrated in the new decarbonization plan. This shall be published and released in the second semester. We have almost finished it and and we shall explain it in more detail in the future presentations. We have also included ourselves and participated in the United Nations Water Mandate Plan, led by the United Nations CEO. And in these facts, more or less, what we feel is, as I said before, comfortable. We are by far committed, and all the areas under our control, we are achieving more than our targets, and we feel comfortable that in the others it shall come soon.