Acerinox Sa

Good morning, everyone, and welcome to the Acerinox first quarter 2026 results presentation. As you well know, the global landscape is defined by numerous uncertainties, including regional conflicts and ongoing tariff wars. The results obtained in Q1 2026 confirm that the situation is improving, despite the continued uncertainty. For this presentation, we have here with us our Chief Corporate Officer, Miguel Ferrandis, our Chief Financial Officer, Esther Camos, and the IR Communication, Consolidation and Reporting Director, Carlos Lora Tamayo, who will explain our Q1 results. Before we start with our presentation, let me remind you that this conference call is being broadcast on our website, atherinox.com. And now I will hand you over to our Chief Corporate Officer, Miguel. Go ahead, please.

Thank you, Borja. Thank you, all of you, for attending this presentation. Just 10 weeks ago, we were presenting the year 2025 figures. We defined year 2025 as the year of uncertainty, and we were hoping that the year 2026 should provide us a much more comfortable scenario. But having said that, the day after our results presentation started the conflict at Iran, So since that time, we are keeping the uncertainty. In a nation, we have an energy crisis and a substantial higher volatility than the one we were experiencing at that time. So now the whole world is in tension. But having said that, we have been honoring our commitment, honoring our word, and we are bringing today an improvement in our quarter figures. improvement in sales of around 6%. What's relevant is improvement in the melting production that has been growing 22% quarter-on-quarter. And as a consequence of all of this also, an improvement in the adjusted EBITDA growing to €119 million, which is an 18% growth compared with that of the fourth quarter last year. The discipline that we are benefiting in the working capital allows us that even though this increase in volumes of 22 percent, the. Operating cash flow has been positive in this first quarter of the year because the working capital increase has been only 47 million euros. So this area is also under control. And thanks to all of this, in this first quarter of higher volumes of dividend payment, as well as huge CapEx expenditures in the coming investments of 73 million euros, But our net financial debt has only increased around 100 million euros. So we are also satisfied about that. It's not by coincidence that we have chosen today for the image the Artemis II launching and leaving the ground. All the world has been excited following this in the last month of April. In our case, you know that we are growing and investing in aerospace. Hanes has been present since the starting of the Apollo projects in every mission on the NASA. And consequently, for us, it's obviously part of our proud and part of our commitment and also showing that we are in the process of taking off. So we are leaving the ground. The success, obviously, is not the launch of the rocket. The success is the completion of the mission. But we are on track, and this is the idea we want to give today. We are leaving the ground. If we go market per market, let's start by the most relevant market for us and the best performer, which obviously is the stainless market in the States. The market remains solid. And being solid is a fact for being more than satisfied, keeping in mind that the demand year on year is going down 11%. So in the current environment, no single customer now gets – comforted in making investment decisions or expanding their activities and so on. So the demand remains low. The demand is obviously affected by all these circumstances. But having said that, the market remains robust. Fortunately, The effective American administration measures are in place. The Section 232 is protecting the local steel production. The tariff remains at 50%. There are no quotas per country. There is no exclusion. And it's being prioritized the melted and poor. So this is having its proper effect in the consistency on the market, which gives stability. to customers, to producers, to distributors. And in addition of all of this, the imports are going down and the imports have get down in America 33% and currently represent a 21% of the total market. So the play field is correct, even though the the challenges and the uncertainties, but at least the play field is correct in order that we can keep consistency performing in that market, which, as I said before, is a proper frame for all the stakeholders that participate in the stainless steel market industry. When we go to Europe, the situation is improving, but still is different. The market sentiment now is better in Europe. The market still, the demand is down, and year-on-year basis, the demand is down 7%, but there is a better market sentiment. At the end, after obviously all the commercial trade crisis that we are experiencing everywhere, finally the European Union has taken effective measures. There are new... more relevant measures coming on and shall be in place on the 1st of July, with quotas per countries, with increase of the duties from 25% to 50%, no country exclusions, and this shall finally provide probably more protection against unfair imports in the European market, and this shall be by far benefiting the industry. This is to be in place on the 1st of July. Normally, the months prior to the entrance of these measures are driven by the imports willing to land in Europe prior to the measures being implemented. But this, fortunately, is not taking place this year. Why? Because since the 1st of January, the C-BAN is in place. And consequently, with the C-BAN, we obtain the compensation for all the efforts in the carbonization that the European players are making. So with these measures in place since the very beginning of the year, we have obtained that the imports also have remained under control. and we have reached current market share of the imports around 14%, which is still slightly above the level that the European Union wants to establish for the imports, roughly speaking around 13%. So what at least we have is that with this more consistent and effective protection, we have also a proper play field, combined with the fact that the distributors or the stocks at the distributors are below the average, we have the proper play field for whenever the demand reacts, we shall be in the better position for taking advantage of the market recovery. But still, this is to come because, as we have said before, still the demand in Europe is not reacting properly. For a proper understanding of the differences between the market in Europe and America, we want to present this chart in which we are showing the effects in the prices of the stainless steel of the circumstance that we are mentioning. This is the summary of why we are trusting and investing more in the North American market than in the European one. Historically, it's a consistent gap between prices in America and in Europe. Normally, prices in America are $300 to $400 above those prices that we experience in the European market. But more relevant than that gap in final prices is the differences in the base price. In the chart, you can realize how relevant this, obviously, the extra alloys will change, which is the green part of the chart, which is the pass-through of the nickel. This structure of the price divided in base price plus extra alloys is effectively working in the States. and is benefiting the market. But the situation in Europe is that after the rally of the imports in the last year, reaching 30% or 35% of the European market, the pass-through has not been so effective. As a consequence of that, still certain part of our final products is more driven by effective transaction prices. So the extra law is not working so efficiently. And then what's also more relevant is the effect in the vice press. And in that regard, you can appreciate the difference in the stable frame we have in America, in which more or less is obviously with its ups and downs, but the situation is healthy by all the stakeholders, customers, distributors, producers. conveying with the rolling caster that we have in Europe. In the year 23, in four months, we passed from the highest base prices ever achieved in Europe to the lowest prices ever achieved in Europe also. It's very difficult to keep a consistent performance and positive profit margins in a market with these ups and downs. And still... two or three years later of that crisis, we have not recovered the average of the prices that has been the driver of this period of the last 10 years. So still we are substantially below the average prices. Consequently, it's not simple to become being yet optimistic regarding the prices with the measures in place, we shall be able to increase prices in Europe, but for being substantially profitable, clearly, we also need a reactivation of demand. Having said that, the differences between the American and the European are so obvious, and this is the reason why we are clearly expanding in North America. In the first quarter of this year, 26, we have put on place all the investment program in North American stainless of 249 million euros. And with this, we are growing our core role capacities in America in terms of a 20%. This is the reason why we are trusting and investing more in America than in Europe. If we move to the high-performance alloys market, For us, it's also the time to restress again that our main virtue and our main strategy is the diversification. For getting less exposed to a single market, we diversified in the stainless between America and in Europe. But also for not getting only exposed to the stainless, we have been in the last five years growing and investing more in the high-performance alloys. We started investing in the high-performance alloys which also is a cyclical market, but it's a complementary market to the traditional stainless one. But once we invested in growing in the HPA... through BDM, mostly for having a relevant presence in sectors such as oil and gas or chemical process. We decide also to invest in America and especially investing in the aerospace. How are now the cycles for the HPA? First of all, The recovery that we are seeing in the stainless and we are seeing a lot of recovery, as mentioned, still is not there in the HPA. Probably the ballet of the cycle that we were commenting, we passed through in the fourth quarter for the stainless, the tough part of the market in the HPA probably is the one in which we are currently involved, mostly the first quarter, 2026. So the ballet of the HPA is the one that has been taking place in this year. because we have a combination of facts. If we start by our European HPA, what we are seeing is that in the low part of the cycle of the oil and gas or of the chemical process industries. In addition, now we have the energy crisis and all the uncertainties that the tensions in Iran and the tensions are still not solved in Ukraine with the additional tensions around Venezuela and so on. Always the tensions are taking place and the hotspots now are in the markets more active. energy related which are all of these and this is creating that there is now a single new decision of investment investing there taking place so we have the low part of the cycle combined with the known science yet of recovery because of the war on place and the tensions taking place there we are confident that anytime in the future whenever the situation is stabilized There shall be more necessities to investing in the reconstruction of all the facilities that have been damaged, but this still is not coming. This probably shall provide a better scope for our presence in the oil and gas industry for the coming two years, but this is going to be difficult to experience in this year. This is the main driver why the contribution of the HPA in Europe is being low at this part of the cycle. But with the diversification, we also, as explained before, have been willing to expand not only in other countries, mostly in America, but also in other sectors. such as the aerospace and the industrial gas turbine. The industrial gas turbine is doing a fabulous performance, driven mostly by the data centers, but the lead times for the industrial gas turbines have moved from 26 weeks to a level of 60 weeks. So this is a sector in which we have a guarantee for a proper performing in the future. And then in the aerospace sector, where we are investing more For growing, and especially for growing more in the long products, you know that Heinz is more focused on the flat products, and we are also, with the new investments, with the rotary forge, with the BIM furnace, we are growing also in the long products. The recovery started earlier in the long products. At the end, for the aircraft engines construction, the first part is the rotating part, which is mostly covered by the long product players directly through the mill orders. And the shortage in the supply chain on that sector increases. create that there has been an anticipation of orders for taking warranty of all those components. So because of that, the recovery starts some months ago, and finally the recovery has come to the flag product, which is the second part in the construction of the aircraft engines, which is the case, the engine cases. And this now is coming. We are... At this regard, highly satisfied by the strong increase in the order book that came in the month of March. And in the month of April, Heinz has experienced its best order book entrance ever in its history. So this is a clear demonstration of the improvements in this sector. this is something due to the lead times that should materialize in higher profitability for the second part of the year because at the end we are obviously contemplating lead times of six to eight months so so the recovery is there our order book is full the production figures are growing and this shall materialize in better profits in the second semester

Okay, now let's move to the effects of the Iran conflict having in our business and also in the market. We think that the most important thing that we should highlight is that we haven't had any disruption in our supply chains. Thanks to our geographical situation, we are able to buy the raw material locally, both in the United States, in Europe, and also in South Africa. Also, we diversify the origins of our consumables. And with this successful strategy, we haven't had any break in the supply chains. So we think that this is another demonstration of Atherinox operational resilience in such a difficult environment. Saying this, no doubt that we have some direct impact, mainly in the logistics and in our cost base. We quantify this impact in 2 million euros for the first quarter. mainly related to increasing in the gas price in Spain and also in a less extent due to the increase in the freight costs for the whole group. On the other hand, we have some indirect impact in the market mainly related to the behavior of our customers. At the end of the day, this conflict is creating more uncertainty in the market and delays the recovery in the demand. So we are seeing our customers still in a wait-and-see position. Maybe the positive note is in the import situation. This logistic and cost impact that we are having also, this is affecting the importers at the end of the day. With longer delivery time, with increasing the freight cost, all of this is putting more pressure to these imports. And as Miguel mentioned, also join this with C-BAN. Imports are moving down in Europe and also in the U.S. And now I'll give you the floor back, Miguel. Thank you.