SSAB Ab

CO2 allowances coming active in Q2. Also clearly higher cost for logistics, as already mentioned, and also some raw material costs were higher. The consumption cost is here taking into account and to remind that there is a lag in the purchase price and consumption cost. Ab Ab Ab Ab Ab Ab Fixed cost, typical seasonal development compared to quarters. And also here we have impact of salary index increase that we pay in Q2 onwards, but also retroactively for the first quarter. Of course, the summer workers also shown here to push up their fixed cost. And also the activity level was higher, so we had some higher IT and repair related cost. Ab Ab And then we have a look at the operating result this year compared to previous year. This year 2.7 and compared to previous year which was 2.1. Similar trend compared to previous year as was previous quarter. Positive impact from prices and volumes which were offsetting on total the variable and fixed cost increase and also positive from the higher activity level as capacity utilization is contributing positively Prices year-on-year on group level were 2% higher. And here we have opposite FX impact, so FX is impacting prices slightly negatively. But Europe division contributing 300, Americas 265, and Special Steel division plus 15. Ruki Construction in this analysis has a negative impact, but that's mainly due to a shifted business mix compared to previous year. Volumes, as already mentioned, 52 kilotons higher. Special steels contributing 220, Europe 120 and Americas 35. Ruki Construction also had higher volumes this year compared to previous year. Variable cost impact negative, but less than what it was quarter on quarter. In iron ore, the raw material consumption cost is actually lower this year compared to previous year. However, then the coal price is higher. Alloys already mentioned was higher. CO2 emission cost was higher and the logistic costs were also higher. Fixed cost higher than last year and here we have majority related to salary index increase. Only some higher manning and higher IT related activities. And capacity utilization positive 155. So improvement in operating result compared to previous year and previous quarter. Then continue with the cash flow analysis. Strong performance during Q2. If we compare with the previous year, we have higher EBITDA level contributing positively. We have also positive impact from change in working capital. But if we then look at the running rate, this is a typical first half of the year development. First half of the year tends to be negative, which is turning then towards more positive going forward. Maintenance capex, a really similar trend compared to last year. And then the other line, which is mainly related to CO2 emission allowance transactions. We had quite a few of them during Q2, and we will continue doing the hedging going forward. If we then jump to the strategic expenditures line here, we see that the trend was lower than last year and the running rate compared to last year, we see that it's on the same level. This will naturally pick up towards second half of the year. And the biggest deviation here is actually delayed payments that we have done in the Oxelösund project, but those are mainly related to vendor performance rather than any actual delays. Acquisition of shares. This is related to Ovako Metals transaction, Timnodit in Finland during Q2. And then the dividend payout just below 2 billion also took place in Q2. Really good performance and compared to previous year, the first half of the year was better and deviation mainly from earnings, lower dividends and good working capital performance. This will then lead to a net cash position, end of Q2, 8.6 billion. And as already mentioned, the dividend payout took place during Q2. The gearing ratio is still well in line with our financial targets, plus minus 20. End of Q2, it was minus 12. And we are really, really pleased also to mention that Moody's gave a credit rating for SSAB during this week. BAA2 investment grade with the outlook of stable. We have had good discussions with Moody's and they are understanding the steel industry really well. And they are supporting our strategy and trusting our financial capabilities. More information on that you can find on our website. Raw material already briefly discussed, but here we can see the development of iron ore price and this is purchase price. It has gone down compared to previous year and it was also contributing positively in the BRITS analysis. However, the cost of iron ore has increased quarter on quarter slightly. Coking coal prices we can see that have started to develop upwards already during Q1, continued during Q2. And to bear in mind that in the coking coal, the logistics also plays important element. And as they were going up, it will also impact the cost of consumption going forward. Scrap prices in US, as the graph is illustrating, they were higher than previous year during the second quarter. And as this is the purchase price, the consumption cost comes with the lag. And we saw minor increase in the scrap cost in Q2 compared to Q1. However, then the outlook is that Q3, the scrap cost consumption cost should be somewhat lower. We already mentioned also the alloys cost that has climbed up during this year and it was higher in Q2 also compared to Q1 and already mentioned higher logistics costs and also the cost related to CO2 emission allowances we have seen that is impacting the variable cost. Good to remember that Q3 we have a lot of maintenance activities starting and ongoing. All steel divisions will have maintenance activities and then the estimated total impact on the result is this around 800 million SEK. Fairly similar trend cost-wise, the full year cost-wise compared to previous year. CapEx guidance, no changes compared to what we have been informing previously. We are still sticking to this annual CapEx plan. Maintenance CapEx will be on a similar level as last year, around 3 billion. Ab Ab We have also indicated that the emission allowance related transactions that took place last year will be on the same level this year. So the estimated purchases is on around 700 million SEK as it was last year. And no changes either on the IT-related cost estimate. The biggest projects, of course, are related to Luleå Minimil investment and preparation for their ERP system. And the estimate for the full year operating expense compared to previous year is around 200 million higher. So this we have kept also the same. And I end my part here and give floor back to Jonny.

Thank you very much, Lena. So then we move on with some outlook and summary. Last time we spoke about the regionalization that happens both in the United States as well as in Europe. And I think it's worth mentioning that and also highlighting that. We see clear signals of the Section 232 impact on the market, which is strengthening our position. We have less imports coming into the United States. And as it is right now in the plate industry, there's a big problem. Bigger demand and supply, hence forcing customers to use sheet steel instead of maybe using plates. So it is beneficial. And also, as I said last time, derivatives are included in this section 232. That means even if you bring in a bucket, it's made of steel. That means it will be subjected to a tariff. When it comes to the trade measures in Europe, We have these safeguards implemented from the 1st of July. That was also sort of announced last time. We've seen prices moving up because of this, but we've also seen a lot of imports coming into Europe, and then prices have dropped a little bit. We believe that as soon as these inventories are gone, prices probably will be moving up again. On top of this, we have the CBAM. The CBAM was implemented from 1st of January, making it a little bit difficult to bring material into Europe for administrative reasons. The tax itself maybe is not as high, but the administrative things around it will make it more difficult. Then there was a new proposal from the European Commission on the ETS structure. You know, they remember that the ETS structure we've had, it was implemented 2005 and it's been there for quite some time and now it's being revised. Ab Ab Ab Ab Ab electricity and so on. So I understand that this change was made and it's going to have a very little impact on SSAB. And then there were some highlights to it as well. I think one of the highlights was that they're linking the free allocation to the investments done in transforming your production into more fossil free production. And then those are the ability or possibility to get the Ab Ab Ab Ab Now, when it comes to the outlook, we are just like Lena said, Q3 is the quarter where we do a lot of maintenance. Hence, we will not be able to ship out the volumes that we normally do like in Q2. So our ability to produce will be limited. But the demand is still there. I think prices will continue to move up. Ab Ab Ab Ab Ab Ab Ab And then looking at the prices, it will continue to go up. We know that. And here we're guiding for somewhat higher. It's between 0% to 5%, I guess. Maybe it will be closer to 5%. But yeah, it's remaining to be seen. But that's what we anticipate at least. I think that is all for the outlook. And just to summarize this presentation, we have to remember that we do have still a lot of geopolitical turbulence. The Middle East situation is not over yet. It hasn't had a negative impact on our variable costs. We're hoping that this will be over, that it will be stabilized. But now things are as they are, makes it a little bit more difficult to predict. I think also our transformation projects, they are on plan still, and I think they are very important for us. And we have to remember now that it's going to be almost impossible to have production in Europe after 2040. So this is necessary, and I think it's a good plan that we have. We also made the decision to invest in another quenching line, which is in line with our strategy. I think that's also a very important step for us going forward. And we see profitability earnings improvements both in Europe as well as in Americas. And we also see prices are going up and will continue to go up. And then that our shipments will be somewhat lower in Q3 because of the maintenance that we have in Q3. But all in all, I would say that it's a stable quarter. I think that we performed. We were sort of taking a little bit off guards with the higher variable costs, but still we came out on a decent level. I have high expectations going forward. I think that we are present in the most important Ab Ab Ab Ab Ab

Yes, thank you, John. Thank you, Lena. Now we can prepare for the Q&A. And I would suggest initially in the first round that we limit to two questions to get as many people as possible the chance to ask some questions. And as usual, please ask the questions one by one to give time to answer in between to make the process smoother. So by that, please operate the present instructions for the Q&A.