SSAB Ab

Good morning and welcome to the presentation of the SSAB Q2 report. My name is Per Hillström. I'm Head of Investor Relations at SSAB. Presenting today, we have our President and CEO, Jonny Sjöström, and also our CFO, Lena Krejelius. And the agenda is that Jonny will start with an overview of the quarter and also a little bit update on the transformation. Lena will then present some further details on the financials. And at the end, Jonny will come back with the outlook. And then finally, we will have time for questions. So by that, please, Jonny, the floor is yours.

Thank you very much, Per, and good morning. I will start by going through Q2 in brief. First of all, I just want to comment on our safety trend. We continue to show that we've implemented a new safety culture within SSAB and our safety performance shows that we have now implemented a new level of safety within the company. So I'm very, very pleased about that. And good job, all of you in the organization that's been working on this. Now, going over to the financial performance, we can see that our operating result was significantly higher than Q1 2025. So we ended up roughly 2.1 billion in EBIT for the quarter. I think one of the highlights is that we were able to sell more of the advanced high-strength steel to the automotive segment. It was a record level, primarily sold from SSAB Europe, so that is a good performance by them. As you know, the tariffs have been on everyone's lips and have been a topic for some time. I think it's worthwhile to remind us about our position in the United States. We have two large production facilities in the United States and we have a very good market position in the American plate market. We can produce roughly 2.4 million tons. Now, when the tariffs are at 50 percent, the prices become more regionalized, have become higher, which is benefiting SSAB at this point. Even though we're not happy about any type of trade barriers, we are dependent on exports and we promote free trade and fair trade. Short term, it still has a positive impact on us. Another highlight for the Q2 report is the special steel performance. Even though the revenues were slightly lower, we were still able to have a better profitability than we did in Q1. And operating margin was roughly 22%, which is quite impressive. Since this is the second quarter this year that we are able to supply a good profit in a very demanding market, it shows that we have a unique value that we sell to the market. And then having a look at SSAB Europe, I think the Europe region is probably the region where we have the most challenging market conditions right now. And also now the terrorists talking about that does have a negative impact on Europe. There's a lot of uncertainties, a lot of concerns, but also we see a spillover material that used to be sold into America is now being sold into Europe at prices which are extremely low. And that of course is impacting the prices of standard material in Europe. The Q2 standard prices went down more than we probably expected. And then we can also see now the operating result for Q2 ended up at around roughly 100 million. And of course, we are now planning to do some cost reduction measures in order to try to balance the weaker demand in the market, also the lower prices on standard materials in Europe. On the positive note, in America, the prices went up and we were able to ship a higher volume in Q2 than we did in Q1. I think the production has been above expectations in the United States and we are delivering above expectations as well. And with higher prices, of course, that generates a higher earning level. So I'm pleased to see the financial performance in Q2 by SSAB Americas. But of course, then a stronger krona and a weaker dollar, of course, gave some negative effect, but still it has a very good earning. I'd also like to mention that we were able to produce roughly 65,000 tons of SSAB0 in our Montpelier facility during Q2. I think that's also important for us in that our journey for zero or fossil-free production. Our two subsidiaries, Tibnor, they have been working hard on trying to establish a lower cost structure as well as try to optimize their pricing for the market. I think that the operating result was decent. It is a very challenging market right now. And I know that they're doing everything they can to improve the situation. Rookie Construction came in on 52 million. I think that's a good performance, even though the construction segment hasn't really developed as we were hoping for. I still think that Drukki Construction had a financial performance which was in line with our expectations. Transformation update, it was announced a few weeks ago that we are going to delay our startup in our Luleå Minimill and that is related to the announcement that came from Vattenfall to us but then from Svenska Kraftnät to Vattenfall that they need to rebuild the transformation station and transformation grid and hence that will have a negative impact on our electricity supply that we are planning to get. We do not see that this is going to have a negative impact on the overall cost. We stick to the forecast that we've given, the 4.5 billion euro. But it does have a negative impact on our time plan, of course, with one year. And we're doing everything we can to mitigate potential delay. I also want to highlight that the Oxelösund conversion is progressing according to plan. We see now that the building has been fully erected, the big crane is being erected as we speak, and in a few weeks also then the electric arc furnace itself is going to come in pieces and start to be erected. I'm also happy to announce the partnership agreement that we signed with Volvo Cars. It doesn't only mean that we will supply SSAB 0 to them but also that we will be able to collect their high quality scrap so we get a circularity part of that. But also, I'm very happy that Volvo Cars and others are still very interested in our cereal material. They're planning to put that into their platform of the electrical vehicles going forward. So it's a very positive signal for us, but also it shows that the market has a big interest of our cereal material. And we have other partners as well going in exactly the same direction. And we were also able to secure our financing package extended to roughly 2.7 billion. And that was signed in June. Gives us stability in that investment as such. With that, I move over to Lena and the financials, please.

Thank you, Jonny. Let us begin by looking at the steel shipments, the graph on the top right-hand side. The outcome in Q2 was 1,708 kilotons. And then compared to previous quarter, it was 32 kilotons higher. And then compared to previous year Q2, it was actually 62 kilotons higher. If we then reflect that back to our guidance that we gave for Q2, We were guiding that all the steel divisions would be somewhat higher in shipment volumes. And the actuals turned out to be that special steels was 3% lower. Europe divisions spot on to guidance with 1% increase, and America's actually slightly higher with 6% increase in shipments. As the graph is illustrating, Q2 seasonally tends to be the good shipment quarter within one year. Then we move to revenue graph. The outcome in Q2 was 25.6 billion, relatively flat with Q1, which was 25.5 billion, but 9% lower than the previous year revenue, which was 28.3. If we then also reflect a bit against the guidance we gave with the prices, we were guiding special steel to have stable prices, and the underlying prices were actually 2% higher. But when we take the FX into account, which was then 6% negative impact, the average price turned to negative. Europe division, we were guiding to be somewhat higher, and the underlying prices were 1% higher, but offset by the negative impact of FX by 3%. And in the case of Americas, we were guiding significantly higher prices, which means over 10% increase. And the underlying prices were 15% higher and again offset by FX with 12%. If we then look at the EBITDA graph on the bottom, Q2 EBITDA outcome 3.2 billion improvement compared to Q1, which was 2.4. But again, a bit lower than the previous year Q2, which was 4 billion. And in relative terms, Q2 was 12%, Q1 9% and last year was 14%. If we then dive into more details and firstly compare the operating result Q2 with the previous quarter, The operating result in Q2 was 2.1 billion and the previous quarter was 1.35. And as the graph is illustrating, there was a big positive impact with the variable cost. The raw material cost was lower in the Nordic mills, while in America the scrap cost went up quarter on quarter. But let's start from the price analysis. Overall, the prices on average were 4% higher, but as said already a few times, offset by the FX impact, which was then a negative 6%. To split this by divisions, the American division was still contributing positively, 470. And then negatively, the other divisions, Special Steel Division, 385, Europe, 190, and Tipno by minor 10. To point out that rookie construction also had a positive price impact of 40 million. Already mentioned that the volumes, they were higher. And here the biggest contribution definitely coming from America's division, which was 30 kilotons higher, Europe division 13 kilotons higher, and special steels was lower by 11 kilotons. Big positive impact by variable cost. This is now split between two Nordic divisions, Special Steel's 560 million positive, Europe 510, and America's having a negative impact, 120 million. Fixed cost in this quarterly comparison. Q2 has higher fixed costs and that is typical summer season impact. Higher cost related to summer workers and also the full effect of the salary index increase. Absorption variance volumes were higher during Q2 compared to Q1, thus the positive impact. And to mention that there were no maintenance outages during Q1 nor Q2. And the re-evaluated balance sheet items with the FX impact of negative 71. If we do the same comparison of the operating result with the previous year, Outcome this year was this 2.1 against the previous year level of 3 billion. And as the graph is well illustrating, the positive impact of variable cost is not fully compensating the negative impact with prices. Prices on average were 12% lower than previous year. And a big portion of this is coming through Europe division, 1.3 billion, followed by special steel division, 660 million, and then America's 450 million negative impact. Also, Tipno and Ruki construction had lower prices with a total impact of 85. Volumes 62 kilotons higher compared to last year. And here, Americas again giving the biggest contribution, 205, followed by Europe Division 75, while Special Steels had lower volumes with a negative impact of 70. Tipno also lower, 55, while Ruukki Construction actually had higher sales volumes this year than last year. Thus positive impact of 15 million. And already discussed the variable cost. They were lower this year. And this is now majority related to Europe division and Special Steel division. While in Americas the scrap cost was higher. Europe division contributing 1 billion, special steel division 435, and then America's having a negative impact of 90 million. Tipnoe and Ruukki construction also had lower cost, so they are contributing positive 130. Only very minor impact from fixed cost, but I need to point out that here we also have the supporting factor from FX giving a positive impact. Somewhat higher processing cost, but then as Jonny already mentioned, we are having saving actions, so the SG&As were actually lower than last year. Capacity utilization, negative 50 million. On average level, slab and rolling production was higher than last year, but the mix between mills was different. So actually lower production in Nordic mills, while in America's production was higher. And then the cost of unused capacity is slightly higher in Nordic mills, thus the net impact is this negative 50 million. and a minor impact of the effects of revaluated balance sheet items. If we then continue to cash flow, just to point out a few items from Q2 cash flow, we did have a negative impact of the working capital as we were sort of anticipated. That's seasonally very typical. Inventory is developing in raw materials slightly up compared to Q1, but then the slab finished goods and work in progress were rather stable. The value in inventory has gone down with the lower raw material cost. Accounts receivables went up and accounts payable down. Maintenance expenditures slightly lower than last year. And then the other line here is reflecting the swapping of CO2 emissions that we did during Q2, indicating that the forward price was higher than the market price, thus the negative impact. Operating cash flow positive, almost 1.8 billion. If we continue to financial items, here we have one time effect of the fees that we were paying related to Luleå funding that Jonny already mentioned. So we had some upfront fees at a ranging cost that has a one time effect here. Income taxes, here we have a positive quarter and we have done some cumulative corrections for the prepaid taxes, thus the year-to-date figure here is on a more accurate level. Cash flow from current operations, still positive, 1.6. And then if we continue with the strategic expenditures, here we have, of course, majority related to Luleå and Oxelösund investments. And the small amount in the acquisition of shares is related to TIBNO acquisition done in Norway, as we have reported also in the report, and netted with some sales of assets in Poland. To remind that we did pay out the dividend during Q2, almost 2.6 billion, and thus the net cash flow 2.7 billion negative. This led to the net cash position at the end of Q2 close to 11 billion. And the net gearing ratio is still well within the financial targets, minus 16. And if we do a small bridge between the net cash position at the end of last year, 17.8 billion and the outcome in Q2, The big items, of course, being the dividend we pay out, 2.6 billion. Strategic investments, cumulative 2.4 billion. And to remind that here also the FX had a big impact. So the revaluation of cash position items, mainly now in US dollars, had a negative impact of close to 2 billion. So all of these together are sort of bridging the gap in between. Then if we move to raw material, we have changed the graph a bit. Here we have combined iron ore and coking coal raw material prices. And as the graph is well illustrating, the prices during Q2 were very stable, a bit more volatile during Q1 and then stabilizing during Q2. We don't foresee any big increase in our raw material consumption cost during Q3, as the lag with this impact of market prices is one quarter, and with the coking coal, quarter and a half. The price trend was a bit different in US, where the scrap price was increasing during Q1. but actually coming down during Q2 and being relatively stable throughout the quarter. And also in the case of scrap, we don't foresee big increases. We rather anticipate it to be stable. And to remind, the lag in scrap price impact is around one month. Maintenance cost table, this we haven't updated since the last time we showed it, so it's exactly the same. But good to remind that during Q3, we already have quite a substantial amount of maintenance happening in the Europe division. In Bolenge, Raahe and Tube Mills are having maintenance breaks. And in Special Steel Division, we are starting up the maintenance preparations in Oxelösund, but the majority of that will take place then during Q4. And in the case of Americas, there's no maintenance is taking place during Q3, more so in Q4. And the CAPEX guidance already mentioned that We are rescheduling the Luleå project, but it does not have impact in this year's CAPEX plan. We are still starting up the project as planned during this year. Thus, we have kept the same 10 billion CAPEX estimate for the full year. 3 million belonging to R&C investments. And then if we split the seven, we have just below three planned for Oxelösund and then the rest majority of which then planned for Luleå project. But with that, I give it back to Jonne.