Neo Performance Materials Inc.

Good morning and welcome everyone to the NEO Performance Materials Second Quarter 2026 Earnings Conference Call. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded. 2026. For opening remarks and introductions, let me turn the call over to Mr. Jim Fitzpatrick, SVP of Investor Relations and Communications. For NEO, Jim, please go ahead.

Thank you, operator, and good day, everyone. Today's call is being recorded. A replay will be available starting tomorrow in the Investor Center on our website at neomaterials.com. Our call will be accompanied by a live webcast presentation. If you're joining us online, the slides will advance automatically as we progress through the discussion. You can also download a copy of the presentation from our website to follow along or reference afterward. On today's call are Rahim Suleman, NEO's President and Chief Executive Officer, and Jonathan Baksh, NEO's Executive Vice President and Chief Financial Officer. Before we begin, I want to remind listeners that some of the information discussed today will include forward-looking statements within the meaning of applicable securities laws. These statements reflect current expectations but involve risks and uncertainties that may cause actual results to differ materially. We refer you to our filings on CDAR and the investor section of our website for discussion of these risks. Financial figures are presented in U.S. dollars unless otherwise stated and we will reference certain non-IFRS financial measures. Reconciliations are available in our financial statements and the MD&A. I'll now turn the call over to Rahim Suleman, President and CEO of NEO.

Good morning, everyone, and starting from slide three. Coming off a strong first quarter, NEO delivered yet another record-breaking quarter in Q2, marked by strong operational performance, continued execution on our strategic priorities, and financial results that once again exceeded expectations. Adjusted EBITDA was $57 million, which is a new all-time quarterly high for the company, representing an increase of over 200% from the second quarter of 2025. Year to date, our adjusted EBITDA is $93 million, up 158% compared to the first half of 2025. This exceptional performance reflects continued strength in volumes across all of our segments, strong improvements in our conversion costs, and a sustained favorable pricing environment. MagnetQuench delivered its strongest quarterly adjusted EBITDA in four years, driven by a 35% year-over-year increase in bonded magnet shipments. Chemicals and Oxides also had a very strong quarter, delivering a 56% year-over-year increase in adjusted EBITDA, driven by strong performance in our emission catalyst business. And Rare Metals had a record performance, delivering $45 million of adjusted EBITDA Thank you for joining us. We increased our full-year adjusted EBITDA guidance to $140 to $150 million. Today, we reaffirm the top end of this range with potential for us to exceed this. This would represent approximately double our full-year 2025 adjusted EBITDA. Moving to slide four. Turning now from our near-term outlook to our mid-term growth strategy, specifically two areas of investment for NIO. Our European Magnet Operation and our Bonded Magnet Business. To help fund this growth, in May, we successfully completed a $115 million Canadian Treasury offering, a financing that reflects both the strength of investor confidence in NeoStrategy and the growth opportunities in front of us. This capital is largely earmarked for equipment for Phase 1B of our European Permanent Magnet Facility as well as for the expansion of our bonded magnet business. These investments position NEO to meet the accelerating demand that we are seeing across the rare earth permanent magnets and we intend to deploy this capital with the same discipline and strategic focus that has been our hallmark to date. Now, let's look at each of these in turn starting with our European permanent magnet facility. Moving to slide five. As you know, our European permanent magnet platform represents one of the first large-scale integrated rare earth magnet supply chains outside of China, supporting Europe's automotive, industrial, robotics, and clean energy segments. Combined with our European rare earth separation capabilities, we have the most vertically integrated platform in Europe, and that positions NEO to capture long-term growth in permanent magnet demand. As we promised, we built this facility in under two years on time and on budget. We have won multiple program awards from three different tier one motor manufacturers, including for traction motors. We have delivered qualifying samples to our customers for these programs made from this production equipment in Europe. And we continue to be on track to meet our commitment of launching two to three customer programs into commercial production by the end of this year. We also continue to advance our Phase 1B expansion activities, which are expected to increase production capacity in Europe from 2,000 tons to 5,000 tons. These activities include advanced equipment purchasing, supply chain planning, detailed designing of the facility as well as a layout for construction. And as I've shared on previous updates, our longer term roadmap for magnet production targets 20,000 tons annually through continued global expansion. We anticipate that this amounts to approximately 10 to 15% of the projected rare earth permanent magnet market outside of China. Moving to slide six. Now, while we have been focused recently on the future growth of our sintered magnet business, our bonded magnet business is sometimes overlooked, and it's an important existing business for NEO as well as an area of growth. The universe of rare earth magnets encompasses both bonded magnets and sintered magnets. Most of the new magnet projects you hear about today, including our project in Europe, are for sintered magnets. as it is the lion's share of the existing market for rare earth magnets. But bonded rare earth magnets are important too and are growing just as fast, if not even faster. The two types of rare earth magnets share the same underlying principles, the same concepts in physics, much of the same material composition and the same goal of stronger magnets that drive more powerful and more energy efficient to micro motors. The core technologies are generally the same The end markets are the same and the customers are the same. And importantly, the concerns around concentration risk are the same. China manufactures approximately 95% of the world's bonded magnetic powders and manufactures about 80% of the world's bonded magnets. Although bonded magnets tend to be less powerful than sintered magnets, they also do not use DY and TB. The heavy rare earths that are difficult to obtain outside of China. There is clearly growth in both types of rare earth permanent magnets. And as part of our long-standing leadership in rare earth magnetics, NIO has decades of experience in bonded powders and magnetics, including our factories in Thailand, the UK, and in China. We have about 8,000 tons of installed bonded magnetic capacity and we are the largest producer of bonded magnetic powders in the world. NIO produces the magnetic powder for the only heavy rare earth free traction motor magnet in the world for Honda. And we also shipped over 10 million bonded magnets for AI data centers last year. Moving to slide seven. More broadly, NIO's magnetics platform spanning both bonded and sintered magnets serves several large and growing end markets. With industrial and automotive applications, decades of proven performance in bonded magnets and deep customer relationships, NIO is an established and trusted supplier for rare earth magnets. In addition to the established areas for rare earth magnetic demand, there are several faster growing markets driving additional demand. These include the electrification of vehicles, Wind Farms, Robotics, Drones, and AI Data Centers. These applications rely on both bonded and sintered magnets, positioning NEO's full magnetics platform to benefit as these markets continue to scale. In fact, some of these drivers may create higher growth rates in bonded than sintered magnets. Let's spend a minute just talking about two of these markets, humanoid robots and consumer and commercial drones. I would note that these market forecasts reflect only humanoid robots and a segment of drones, not the full growing market for robotics and air mobility in general. Moving to slide 8. The first is humanoid robotics, where movement is enabled by electric motors and sensors located throughout the machine's joints and subsystems. The largest, highest torque joints often use sintered magnets, and bonded magnets play a key role in the precision encoders, position sensors and small actuators that give the robot smooth, accurate and responsive movement. Although estimates can vary widely, a single humanoid robot can contain between three kilograms and seven kilograms of rare earth magnets. The market for humanoid robots is expected to grow dramatically over the next 10 years with industry analysts suggesting over 52,000 metric tons of permanent magnets required. And while the current market share for bonded magnets is about 8% of the total permanent magnet market, some designs within humanoid robots may call for closer to 15% bonded magnets. Moving to slide nine. The second segment is the drone segment, where lightweight, high torque, energy efficient motors depend on magnets to deliver longer flight times and more stable control. Again, both sintered and bonded magnets will be required here. Sintered magnets generally are supporting propulsion and bonded magnets are supporting thermal stability and sensing. A single drone can contain up to 60 grams of rare earth magnets and the segmented magnet market for consumer and commercial drones is projected to be approximately 21,000 metric tons by 2035. Again, while drone designs call for predominantly sintered magnets, bonded magnets are also growing with increased volume and increased share. Stepping back, I think these trends bode very well for NEO in sintered magnets, in bonded magnets, and in our rare earth separation business. I expect to see further developments and growth opportunities in both sintered and bonded magnets in the coming quarters and of course in expanding our separation capabilities following our announcement earlier this year of the launch of our small-scale commercial production of heavy rare earths in Europe. With that I will turn the call over to Jonathan to walk through the financial results in more detail.