SSAB Ab

Good morning, ladies and gentlemen, to this presentation of the SSAB Q4 report. My name is Per Hillström. I'm head of IR at SSAB. And presenting today, we have our president and CEO, Jonny Sjöström, and CFO, Lena Kralius. And if we look at the agenda, Jonny will start with an overview of the year and the quarter. Then Lena will cover the financials more in detail. And then Johnny at closing with the outlook and the summary. And at the end, we will have good time for questions. So by that, the floor is yours, Johnny.

Thank you very much, Per. And good morning to all of you. I will start by going through the summary of 2025. First of all, if you look at our safety performance during 2025, we can see that we had, again, an improvement in our lost time injury frequencies. We came down to the level of 0.56, which is, according to me, a good achievement. I think also I want to point out that the total recordable also reduced, and that's also a a work that we've been focusing on for quite some time. Now, going over to the revenues, the revenues were slightly lower than they were Last year, if we look at the full year outcome, then again, the market has been weak. So it's understandable. There's been a lot of turbulence related to the geopolitical situation, tariffs, et cetera, that has created a lot of uncertainties. Hence, one of the reasons why we ended up on a slightly lower revenue level. Then if you look at the operating result, we came out on 6.1%. billion Swedish kronor for the full year. I think that even though the market has been very weak, first of all, we have a very strong geographical diversification with significant production in the United States as well as Europe. But also I think that our premium strategy, selling unique products, generating unique customer value, is supporting us when times are a little bit tougher than they usually are. And then, of course, I think that especially the SSAB Europe worked on the cost side and were able to improve their financial performance slightly. We also came out, the net cash position for the end of the year ended up on 11.6 billion. I think that's also a good achievement based on the fact that we have a lot of investments ongoing. We have a very strong balance sheet. I think also I'm very happy with the financing package that Lena was able to put together to strengthen our situation and our position. um then also the board has proposed that we should have a two kroner dividend per share that will be decided in the agm meeting further on this year um yeah speaking of premium strategy and direction we're heading um there are a few things that i want to point out um continuously we develop new grades uh for certain applications or environments. One of the grades that we have developed recently is a grade called Harlock's High ACE. It is designed for wear resistance in application where you have sort of a corrosive environment targeting the stainless steel grades. It comes with a superior hardness, but also a superior wear resistance in aggressive environments. And it's very, very cost competitive because it's much leaner compared to stainless steel. I also want to point out the investment ongoing in Mobil to increase our capacity of unique grades. Not long ago, we extended the Q6 furnace, giving us more capacity, but we are also currently investing in what we call a tempering loop to be able to produce more of the advanced seed grades. Even though we had some turbulence last year when it comes to tariffs and, you know, the challenge to import material from Sweden into the United States, we were still on a higher level when it comes to advanced high-strength steel to the automotive segment. So I think we came out pretty much on the same level as 2014. We haven't seen much of the reduction of volumes being sold in the United States so far. I think also that one of the things that I want to point out is that we have developed tailor-made a steel grade for the automotive segment, which is the dockhole high edge, which comes with a high edge ductility. So when it's stamped or processed, we have edges which are much, much more leaner and you don't have those kind of shipments you can get for advanced high strength steel. So tailor-made for certain applications in the automotive industry, highly appreciated by the market. And then also we launched a new complex phase deal. It's a corporation together with Gestamp. I think what's unique in this case is that we're sort of targeting to increase the strength in the chassis, which is quite new actually. So the chassis will then have a higher strength. And with the high strength, you can actually reduce the thickness of the sheet material, making the car lighter, but also you consume less material, which is also good for the environment, but also good from a cost perspective. And then last but not least, I want to point out, that we have for our color-coded side produced by ssav but then further processed and sold by rookie construction that we are now continue to develop our sort of environmental offer to the market and here we were able to uh produce a coating using sort of what we call a rapeseed oil, which is quite unique. And it makes it very, very bio, very much environmental friendly, which is also an area we are continuously working on. So very pleased about that. So there has been a lot of talks about the tariffs and the turbulence we have related to it. um it creates a lot of uncertainties on the markets uh of course but once again i just want to highlight that we have uh significant production in united states and we have significant production in europe and that makes us less vulnerable to these kind of initiatives i also want to point out that CBAM was implemented in Europe from the 1st of January. That will have a positive impact. It increases prices, but also will change some of the trade flows, because it will be difficult for some of the countries to actually export to Europe. And then again, we also have on the table of the European Parliament to decide on the safeguards, and that will also, what we believe, have a positive impact on the European market. I also want to highlight the transformation projects that we have ongoing. What you see on the picture to the right is the transformation project in Oxelsund. Here we are replacing old blast furnaces with a new electric arc furnace. And the building you see to the right is actually the electric arc furnace building. It is developing really well. I think that we have done a good job when it comes to project completion. And we have planned a production startup in the beginning of 2027. And then if we look at the Luleå project, which is a larger project, it is also a way for us to reposition SSAB Europe to produce and sell more of the unique premium C grades, primarily for the automotive industry. So we have done the groundbreaking ceremony. We got the environmental permit. And we also continue with agreements with both customers as well as suppliers. One thing I want to point out is sort of the agreement to get our hands on high-quality scrap. And one of the things that we signed during 2025 is the Volvo Car Agreement, which is also seen as a highlight for both parties. For them, more the circularity, but for us, it's more getting our hands on the premium scrap material. Then going into the divisions, looking at special steels, we believe that the shipments, even though they were somewhat lower than Q3, then again, we had a very extensive maintenance outage during Q4 in special steels that had a big impact on our ability to ship out material. But still, I think that we delivered on a higher level than we did Q4 last year when we had the same situation. Special steel can also see some improvements in the activities on the European market. I think that's quite positive. The market has been on the low side for quite some time, and now gradually we see some positive signals on the European market, and that has been identified by special steels particularly. And of course, we have an increasing demand for protection steel because of the market situation. The operating result came in on expected level. Then again, I mean, if you have a maintenance outage, it comes with a cost and it comes also with higher unabsorption. So we, this was expected. So nothing strange. We also have to say that prices went down a little bit, but we also have some exchange rate effects on that. Lena will get back to that in her presentation. And then if we move into SSAB Europe, I think that, first of all, the market for SSAB Europe is weaker. They are more sensitive to the spot market and the hot rod coil prices than other divisions. But despite that, I think that delivered above our expectations when it comes to shipments, and they had higher shipments in Q4 compared to Q3. And we were a little bit concerned about the operating result, but they did a lot of measures, first of all, you know, cost-saving measures, but they also improved the capacity utilization, hence giving us, you know, a better performance than we expected. Looking at SSAB Americas. I think that also they came in, we had a maintenance period as well as SSAB Americas, and normally sort of the shipments goes down. But I think that they had a great achievement, especially in December, shipping out a lot of material. They've had a strong water intake, hence they were able to sort of fulfill the demand and ship out as much as they could. A great achievement by the whole team in Q4. And they ended up now on a on expected result level. And I think that they have been suffering from a weaker US dollar. If we translate this into Swedish kronor, otherwise the outcome would have been much better. And then for our two subsidiaries supporting the business plan for SSAB Europe, we can see that the shipments For Tibnor, we're slightly higher than Q3, but still, it's still a very weak market. And we also have a very strong seasonality in Tibnor, just like we do in rookie construction. And, of course, the operating result came out on a lower end. We were expecting the volumes to be higher, hence it has a negative impact on the result. And that's exactly the same situation for construction, where both the volumes and the lower volumes has a big impact on the operating result. And that's mainly due to the weak market conditions. But we have high hopes for 2026, where we hope and think that the construction segment is going to improve. So once again, I want to highlight our strategic direction and also the uniqueness of our grades. This is an application, not a big application, but it shows that our grades are unique. So this application is for a power booster to charge cars. And if you are on a sort of remote side, on the countryside where cars are, where the power lines are maybe not as strong, you're not able to actually charge the car very, very fast. But with this power booster, you can actually gradually use the power to transform it into kinetic energy, so you have a rotating part inside of this container. and it rotates extremely fast and with these loads and with this velocity you need material that has a very good fatigue strength and that's exactly what our material can offer hence the reason why they choose our material I think in this case it was pretty much the only material that they could use otherwise they would have fatigue cracks very very very fast But it shows that we are selling into unique applications, but also that our products are unique and create a lot of unique customer value. With that, I leave the word over to you, Lena.

Thank you, Jonny. From the fascinating product description to fascinating financials. Let us start by looking at the shipment volumes first. Q4 performance was 1,515 kilotons, and it was actually improvement compared to Q3, as also illustrated by Jonny already. The improvement was 49 kilotons and 3%, and then comparing to previous year Q4, improvement was even further, 67 kilotons and 5%. And if we reflect against the guidance we gave for Q4, we were actually spot on with Special Steels and Europe Division and even slightly better in SSAB Americas. If we then continue to analyze the revenues, the Q4 revenue performance, $22.1 billion. Compared to previous quarter, a reduction of 4%, and compared to previous year Q4, a reduction was 6%, and this is indicating that the prices have developed downwards. And I will dive into that more in detail shortly. EBITDA performance Q4, 1.8 billion, a reduction compared to Q3, which was a 2.9. However, improvement compared to previous year Q4, which was 1.6. And in relative terms, this means that the Q4-25 was 8% improvement compared to previous year level of 7%. Let us walk through the analysis related to operating result, and this is now comparing Q4 with the previous quarter. Q4 operating result, 756 million compared to 1.9 billion during previous quarter. And here illustrated in the graph, we have a negative impact with the price development. On average, prices were 3% lower. And the biggest contribution here coming through Europe division, with just over half a billion negative impact, followed by America's 240 and Special Steel's 165. TIPNO prices were flat and rookie construction prices slightly lower. And as already Jonny mentioned, here we also have a slight impact with the FX and also with the product mix. But that's illustrating rather the seasonality during Q4. Volumes were 3% higher and positive impact, a net 115 million sec. Europe division 41 kilotons higher, America's 10 and special steel volumes were flat quarter on quarter. Variable cost positive impact, raw material costs were lower. However, we have offsetting effect here with the maintenance audits cost. And also maintenance audits cost impacting the fixed cost. But to remind that these are also seasonally higher during Q4 compared to previous quarter, which was the vacation period. And also to highlight that, yes, we did have saving actions both in Q4 and Q3. So perhaps the year-over-year is illustrating better the savings performance. But here the net effect is 570 million SEK negative impact on EBIT. During Q4, the production activity was higher and thus the positive impact related to capacity utilization. And this is mainly now related to the Europe division rolling performance. Maybe to remind that during Q3, the maintenance outages were in Raahe, Bålänge and Luleå. And during Q4, the maintenance took place in Oksalösund, Mobil and Hämeenlinna. And the cost of the maintenance was quite much higher during the fourth quarter. Similar comparison, but now year over year, Q4 performance 25 over Q4 24. Performance Q4 24 was 487 million and the only negative impact coming through with the prices while all the other elements having a positive impact. Prices were 8% lower. Europe division, special steel division, both contributing over 600 million negative impact, while America's had a positive impact. But as already mentioned, the FX did have a big significant negative impact in prices. Total FX impact in this analysis is 840 million. which, on the other hand, is having a positive impact in the variable cost side, but on a lower level. Volumes, already mentioned, 5% higher. Here, the biggest contribution coming through special steel division, 17 kilotons higher volumes, followed by Europe division, 28 kilotons, and America's 12 kilotons. So all steel divisions performed better year over year. Variable cost, positive, 345. Raw material costs were lower, but this partially offset by the maintenance cost. And this year, it was slightly higher than the previous year. And already mentioned the saving actions, and here illustrated well that the fixed cost year over year were lower, 430 million. We had the time banks in use and a lot of saving actions throughout the organization and the outcome illustrated here in this graph. Production activity was higher and a positive impact with the capacity utilization and the re-evaluated balance sheet items also just below 70 million positive impact. Cash flow, if we firstly look at the quarterly performance over previous year Q4, EBITDA has already described slightly higher than last year. Very similar trend when it comes to working capital, a positive impact during both years. And here to remind that we have the seasonal impact, we have winter stocking taking place during Q4. So rather large raw material invoices posted to Q4, which will be paid out in Q1, which will then lead that Q1 will be seasonally impacted. negative impact. RNC capex, maintenance capex, slightly higher, but well in line with our guidance, just below 3 billion the full year. The other line here is related to the CO2 emission allowance transactions. During Q4, it was a positive. Financial items here, as you can see, during this year, we do have the cost related to LULA financing, the prepayments and premiums being paid out. This has a cash flow negative impact. However, we are activating these to the balance sheet, so not the same effect in the P&L. And of course, also the cash position is slightly lower compared to previous year. And to remind that the interest rates has also developed lower when it comes to interest rate on cash. Strategic investments are significantly higher. And here, of course, the driver being the Luleå investment project. And on full year level, to remind that the dividend was during 2025 lower. And 25 Q1, we still have the share buyback program ongoing, which we didn't have during 25. This leads to net cash position, 11.6 billion at the end of 25. And this is still very well in line with our financial target when it comes to net debt equity ratio, plus minus 20%, as the outcome is minus 17%. If we do a short bridge over previous year end cash position versus the outcome this year, we start from the 17.8 billion. And then we add the cash flow from current operation, 6.5 billion. And then we subtract the strategic investments, 7.2 billion, the dividend 2.6 billion. Then we need to take into account the revaluation of US dollar related items. As Jonny already mentioned, the Swedish crown has developed during the 25, around 20% stronger versus US dollar. So that does have an impact in the net cash position as well. And the proposed dividend is two crowns per share and that will be proposed to the AGM and then paid out in Q2 26. Raw materials prices, market prices have been developing slightly downwards during second half of 25 and that is also illustrated in our savings in variable cost. We don't foresee that the prices would develop upwards, rather remain stable, and our consumption cost as well, or slightly even downwards. When it comes to iron ore, to remind that the lag in the cost impact is one quarter, and with coking coal it is slightly longer, it is one and a half quarter. It's a bit different view with the scrap prices. They have remained flat during the second half but have started to increase towards the end of 2025 and we have seen that they have continued to increase. So they will have an impact in the margins for the Q1. Maintenance cost. This table is illustrating the plan for 26. The outcome 25 was 1 billion 410 million and on the similar level plan to be for 26. The difference with the 25 and 26 is the schedule when it comes to U.S. mills. During 25, we were maintaining mobile mill, while during 26, the plan is to maintain Montpellier mill. Thus, a bit different spread over the quarters three and four, but on very similar level. And then the guidance, CAPEX guidance, this we have already presented during our capital market day. The performance during 25 was just above 10 billion. That was well in line what we have been guided for this year. Strategic CAPEX landing on a level of 7.2 and maintenance just below three. Plan is to have similar maintenance capex for 26. However, increase the strategic capex, which will be 10.5 billion for 26. And if I split this, sorry, if I split this 10.5 to major strategic projects, just below three belongs to Oksala Sund, around six to Luleå, and just below two to other strategic projects. And also refer to the emission allowance plans for 26. Our estimate is that the cash flow impact will be very similar during 26 as it was during 25. The impact during 25 was the 724 million and around 740 we have estimated to be the impact on 26. And we also want to point out that we have started our digital renewal project to modernize our IT landscape. Of course, this is needed, and also this is supporting the strategic investments, especially Luleå Minimil investment. We started during 2025, do the design phase for these digital projects, and now we are progressing with the build phase. And these projects will be followed under the other division, and they will be posted as operating cost. We cannot capitalize all of it. And our estimate is that on annual level, the increase in the operating cost when it comes to other division is around 200 million SEK. This is the annual estimated impact of these projects. But with this, I give it back to Jonny.