Good morning, everyone, and welcome to the Acerinox Q1 results 2024. My name is Chad and I'll be the coordinator for your call today. During the presentation, you can register to ask a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two. And now I'd like to hand over to Carlos Lora-Tamayo, Chief Investor Relations and Communication Officer, to begin. Carlos, please go ahead. Thank you. Good morning, everybody, and welcome to the Acerinox earnings conference call for the first quarter 2024. Our CFO, Miguel Ferrandis, will host the call, and we will be accompanied, as in other occasions, by the investor relations team. He will start with a short presentation, and then we will continue with the Q&A session. Before getting started, let me remind you that this conference call is being broadcast on our website, acerinox.com. Please, Miguel, go ahead. Thank you. Good morning. Thank you for your interest in attending this presentation. We have released, this morning, a detailed results report, which we consider itself explanatory, so we shall concentrate this webcast of today in just explaining the key message from our side and, obviously, attending your questions, as Carlos has stated. First of all, you know we try to be predictable, and we are not willing to provide you unsurprises, so the first issue to remark is that we have obtained an EBITDA of EUR 111 million that we consider is satisfactory, especially in view of the actual challenging conditions. The challenging conditions this time is not only still the poor performance on the stainless market in Europe, but in our case, this also has been strongly influenced by the strike we are suffering at our plant in the south of Spain, and this is having its relevance. The result for us is satisfactory, as I have been expressing, keeping in mind that it's in line with the market consensus. When we presented the year results, we announced that the first quarter figure should be slightly better, and we explained that the word "slightly" was because of the strike. On normal situation, the first quarter result should be better, but we preferred to say at that time that it shall be slightly better, and the slightly is a consequence of the strike we are facing. We shall talk later about it, but even though, on that circumstances, the fact that we have obtained this quarterly EBITDA for us is a strong fact for being satisfied. It's relevant and a strong performance in our cash generation in this period, so we have made a cash generation of EUR 188 million, mostly supported by the strong discipline on inventory reduction of EUR 89 million, especially in the high-performance alloys area, but also in the stainless ones. So this is also one of the key facts we want to reinforce as a strong satisfaction with the performance we have achieved in this first quarter. As a consequence of the strong cash generation, our net debt goes down more than 30% compared with that at the end of December. So we are presenting today a net financial debt of EUR 234 million, which is the lowest of the last 24, 25 years. The outlook we are mentioning today is that the Q2 shall be slightly higher. We should have preferred to talk that it should be higher according to market conditions, but we must keep in mind that still, during April, our plant in Spain is keeps suffering the strike, and as a consequence of that, our commitment for the Q2 results is that it shall be better, better, but slightly better, keeping in mind that still, today, ending April, the plant remains on strike. So these are the key messages that we now shall try to explain a bit more in detail. When we move to slide number three, when we move to the circular economy and sustainable development, we have strong achievements that reinforce the awards we are obtaining. We have renewed our platinum award by EcoVadis, as you know, and it's clear that we have a lot of areas to be proud about. We are extremely efficient in recycling, in waste reduction, in water withdrawal. We are moving ahead also in diversity. In terms of the emission, we have provided 80%-88% reduction in emissions, and this is as a consequence of all the electrification we are actually implementing as well as increasing the renewable electricity in our plants. So these are also strong facts to reinforce. In terms of the safety, the reduction of 3% has been lower than the ambition we have for this year, but this gradually should be improving during the year. The area that still we need to improve, but we are conditioned by the strike effect, obviously, in Algeciras, is more regarding to the energy. You know that the energy in our case, especially the plant in the south of Spain, is the plant that where we are using more renewable energy as much as it's not in operations. Because of that, the track is a bit worse than the achievements we are having in other areas, but as soon as the strike stops and we normalize activity and production in our plant in Spain, this shall obviously also improve. When we go to the main issues affecting the markets, obviously, the chart remains, as has been the case for the last almost two years, the ongoing comparative prices evolution, the prices are absolutely depressed in the Asian market. In Europe, we are seeing some recovery in prices, but still prices are below the historical average, and still the base prices have more room to improve even though the poor market conditions, but the trend has started of some gradual increase of prices in Europe, and the prices in America remain robust. So on comparative performance, it's clear that the prices are higher in America than in the other areas. Obviously, as America is our main market, this is one of the reasons why we are keeping a strong profitability at North American Stainless. In the States, the market is not booming, but it's a solid market. The apparent demand has increased this year around 8%. It's true that still there are some uncertainties, and consequently, the level of inventories still are low. There has been some domestic tightening of supply of some of the other domestic players, but even though that, more or less, the situation we consider that it's solid in the States. Imports have increased a bit in the States, but we must keep in mind that the States is a net importer market. The local production is not enough for covering the necessities, and consequently, the issue that imports take a 25% market share actually in the States. It's not an issue that we should be concerned about. In addition, the American North American administration is also implementing trade measures that are going to come soon. So on this basis, as difference of what historically we were concerned, regarding Europe in America, this market share of 25% of imports is something that is normal, keeping in mind that there are only three players in the stainless, two of them integrated, but just three players which are not enough for covering the demand of the American market. The situation in Europe is not as good. Apparent demand still shows negative figures. It is down 4% in this period. Still, the inventories are low. It's not an issue that it's a fact that stockists are keeping a high level of inventories and the stocking. It's just the contrary. It's true that it's not confidence still in the market. It's not visibility. With all the uncertainties in place in Europe, still, the market remains a bit depressed. In these circumstances, there are some positive consequences. One is the correction of imports in Europe. The actual market share of imports in Europe is 15%, which is the lowest since several years ago. As much as also, it appears that there are more in this regard, more involvement on establishing trade barriers by the European Union. We think that this is a good starting point maybe for realizing the effectiveness of the new measures that are being decided these days in Brussels. We trust on that also for bringing some more positive performance for the European market. The clear demonstration that the market is still weak is that, for the four players we are running stainless production in Europe, two of them in the first quarter, we have been suffering a strike, not only in our case. It was also in Finland. But even though that, this has not been a concern of further tight supply in the market that has moved the stockists to start buying material again. So still, the market is weak, and therefore, we consider that even though prices are gradually improving for getting a normalized level, but still, the demand we consider that is weak and shall remain probably being weak also in the second quarter. So certain increases of prices, but still not enough. When we go to analyze the high-performance alloys, the market is also solid. The demand is strong relevant sector for us, as is the oil and gas, it's really booming these days. We are participating in new pipeline projects. In addition, the aerospace market, which actually, we have a presence there, but as you know, shall be increasing substantially as soon as we integrate Haynes on Acerinox is another sector that also is booming. So we are very confident, consequently, for increasing our presence covering that market. In the chemical process industry, which is also a relevant sector for VDM, the market, led by all the hydrogen sectors and covering their necessities also is keeping a solid performance. Electronics and engineering are coming back after a low demand that took place last year as a consequence of all the after COVID movements on the market. So we are having a solid year and a solid performance of our high-performance alloys, as we shall explain later in more detail. When we go to the group highlights, I think we have talked about that. The EBITDA figure of EUR 111 million is in line with the market consensus, so this shall not be a surprise, and it's 15% above the one that we experienced in the fourth quarter. So this is the slightly better that we mentioned at that time as a consequence of the fact that we have been mentioning. Cash generation has been strong, EUR 188 million in the first quarter. This is not very normal for our first quarter, with a strong reduction in inventories of EUR 89 million. With this, we reach a net financial debt of EUR 234 million. This is the minimum level of the last 24 years. We must go back to year 2001 to find equivalent levels of net financial debt at Acerinox Group, but we must keep in mind that at that time, we were just a stainless steel maker with only one fully integrated plant. So the comparison is obviously absolutely favorable of all the business of all the several plants that we are running actually and also our diversification through other alloys. So we are absolutely proud about these levels of net financial debt. In addition, as you know, we have plenty of liquidity that we shall also talk later. We have EUR 1.9 billion in liquidity at this time, which is also something to get absolutely comforted and demonstrate that we can cover our expansion, that actually has been explained purely with the cash that we have actually on hand. If we move to the stainless steel highlights on page seven, there are some things to reinforce here. EBITDA is EUR 80 million, which is a strong improvement compared with the EUR 50 million of the stainless units in the fourth quarter, but at the end, it has been affected, as we are having mentioning, by the situation in Spain. You know that normally, we, we disclose figures of the stainless steel business unit and the high-performance alloys business unit, so we, we normally prefer not to disclose figures among the different plants. But the, the abnormal situation we are facing actually, and obviously, for you to, to understand which are the consequences of the situation in Europe, we now are reporting a, a EBITDA loss of Acerinox Europa in the first quarter of EUR 31 million, which is more or less big figures, but 50/50. Half of it should be as a consequence of the strike, around EUR 16 million is the direct effect and consequences of the strike. The other still is the, the, the situation we are suffering in the European market that is still prices even though recovering, that prices are abnormally low, and, and, and this creates this effect. So the situation should have been substantially better in the stainless unit even though the actual market situation in Europe if it weren't for the strike in our plant. We hope that this issue should solve soon. In fact, we have been trying that our staff should vote in assembly on the mediation proposal that came from the regional authorities, but the union representatives have preferred to avoid the fact that our workforce should vote regarding the acceptance of the proposal coming from the regional mediation. So we hope that in the coming weeks the situation should solve, but still, we have no visibility for that. This means that the whole month of April, probably the effect of the strike shall remain, and let's see if in the coming weeks, we find a solution in order to bring normality to the operations in the Campo de Gibraltar plant. In addition, this is going to be more related to the second quarter, but gradually, we have reducing our production in our Bahru plant in Malaysia. In the actual situation of prices that is taking place in Asia, it's clear that for us, it doesn't make sense to keep our plant running, and consequently, during the second quarter, mostly in May, our production at the plant shall stop. We are actually still delivering material to our customers and keeping commercial activity, but the production shall stop in Bahru in this second quarter. As we have been announcing since the year-end results, we made the huge impairment of Bahru, and then writing down its book value, and now we are studying all the strategic measures that can take place there, contemplating every possibility. So we are contemplating sale of the business or sale of part of a partial sale of the lines or moving the lines to other plants. So all these issues are actually under study for finding the most effective one, but what we must clearly state now is that we are stopping production in the second quarter at Malaysia. Moving to the high-performance alloys, this is a sector that is having a strong performance. Also, this year, we are having a first quarter EBITDA of EUR 31 million compared with the EUR 29 million we had in the first quarter last year. As you remember, when we acquired VDM Metals, our figures and our projections were that this should provide additional EUR 80 million-EUR 90 million EBITDA per year to the group. Four years later, at the end, we are 40%-50% above that level. So annualized EBITDA keeping this quarter figure of 31 should be EUR 120 million-EUR 130 million, which is, as we always have been indicating, what we can expect of the normal speed cruise of the contribution at VDM. In addition, in the year 2023, there were strong tailwinds that VDM took good advantage of and ran, more or less taking advantage of that tailwinds, mostly related to the metal effects that were increasing its margins especially by the nickel evolution and by the relation and the differences between the nickel transform that we were selling in VDM compared with the nickel average at our stocks. And this created a metal gain that has been, especially in the second part of last year, improving strongly the margins of VDM. This year, we are not contemplating, or at least, you know, with the visibility that we have now, that an equivalent tailwind is taking place, but even though that the business as usual in the actual good momentum of the high-performance alloys is creating for us that we are obtaining this EBITDA figures of EUR 31 million in just the first quarter. Another fact that is relevant for VDM is the operating working capital decrease by EUR 52 million, so mostly related to our reduction in inventories. So in the last year, for accompanying the market reaction after the COVID, it's true that working capital increased substantially in VDM also as a consequence of all the distortions that have been taking place in the nickel market and in the nickel supply. But once this situation is normalized, VDM since last quarter of 2023, and especially in this first quarter, is making a remarkable effort on reducing its inventories, and as a consequence of that, the operating cash flow has been EUR 76 million of our high-performance alloys division. When we move in page number nine to the capital allocation chart of the group, it's a strong fact for being proud about. So as a consequence of our EBITDA figure and as a consequence, obviously, of decreasing working capital, we have obtained an operating cash flow of EUR 188 million. Then at the end, even though keeping on plan all the CapEx program, but also the dividend paid at the start of the year, but we have reached this figure at the end of the quarter of our reduction in net debt of EUR 107 million. Moving to, obviously, the hot topic today in our world, which is the Haynes acquisition, this is something that is going as scheduled and as we announced you on the 5th of February when we explained the deal. So all the procedures are taking place, and we already have obtained the antitrust of the American administration. Last year, we obtained also the unanimous approval of the shareholders' meeting taking place at Haynes. We are just waiting for the pending regulatory approvals, and consequently, we assume that this shall be gradually obtained during this second quarter. So we hope that we shall be closing the deal early at the starting of the third quarter, so more or less as we anticipated that was going to be the probable scenario. But all the necessary steps are moving in accordance, and consequently, we are very excited with the idea that early starting in the third quarter, we shall also integrate and incorporate Haynes to the consolidated group and the consolidated results. When we have been explaining, Haynes, we always have mentioned that for us, it's a AAA investment grade, and the fact that we put that AAA, you know, it's as a consequence of alloys, as a consequence of America, and as a consequence of aeros pace. It's not a casualty that the areas that we have mentioned are the ones keeping a more strong performance. Obviously, one is the alloys in the solid market that we have explained we are experiencing. Another is America, and on comparing basis, it's clear that the American market is the better performing market and with better prospects for the coming years. In addition, we also mentioned before that the oil space is keeping a booming performance as well as the oil and gas in all the world of alloys in these days. So clearly, our strategy of the AAA is also reinforced by the fact that they are the best comparative performance areas that we can place actually. And then just the conclusions, I think most of the topics have been already explained. EBITDA, we must consider that it is satisfactory. The strong cash generation we have done, and especially the strong discipline in reducing working capital, and especially inventories, has proven to be successful. You know, in our strategy of capital allocation, the relevance, obviously, is working capital, but also the relevance on investments. This year is a year with a strong and consistent investment plan with special investment phase taking place in North American Stainless as well as in VDM. So we are satisfied that we are generating cash for covering the expansions that are taking place as well as increasing the retribution as has been the case in the last year, and then consolidated that increase and with further increase in dividend yield this year, achieving a 6% dividend yield that we consider that is extremely healthy. Thinking about the markets, as I said before, we are contemplating that the consistency of the high-performance alloys shall remain. In America, we are also confident on the evolution. We are not seeing further pressures on the market side. Still, the supply, the continuous supply, the proximity to our customers, the uncertainties in our customers and in the American distributors for not bringing imports, considering that it should be risking the way of increasing imports, is clearly in our favor as we become the closest supplier to most of our customers. And therefore, we think that the situation in North America is also remaining very robust for the remainder of the year. Haynes acquisition is taking, obviously, a lot of our interest still until we obtain all the necessary approvals with certain distance. Clearly, we are not interfering now on Haynes business evolution. We shall start interest after the integration, but clearly, everything now is in well position, but not in too many months from now, we shall be integrating Haynes in our group. In view of all these situations, Q2 is going to be better, but with the uncertainties that come from when the strike issue is going to solve in Spain, we only can say that it shall be slightly better. We know that at the end in the second quarter, at least the whole month of April is going to be, obviously, spoiled by the strike, but we still have no visibility on when the normality is coming back. As a consequence of that, up to now, what we can say is that it shall be better, but slightly better. Thank you for listening to my explanations, and now let's go to the Q&A. Carlos shall also support me in the Q&A session. Thank you. If you'd like to ask a question, please press star followed by one on your telephone keypad now. If you change your minds, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. We'll pause here briefly as questions are registered. Our first question today comes from Krishan Agarwal from Citibank. Please go ahead. Hi, Miguel. Hi, Carlos. Thanks a lot for taking my question. I have three. The first is in the guidance for the Q2, when you say the slightly higher EBITDA, can you spell out what are the volume expectations you have baked into the guidance, between U.S. and Europe? Well, thank you, Krishan, for your question. We expect some volume increase mainly in the States, no? In Europe, it's much more difficult for us given the certainty with the strike, no? So this EBITDA increase, it's mainly driven to higher volumes in the U.S. and also better behavior in South Africa, in the stainless sides of the business. Understand. Thanks a lot. Then, Miguel has quantified the number, EUR 16 million loss due to the strike and the overall EUR 31 million loss in the Europe, stainless steel business. Is there any way you can quantify how much of the impact is likely to be from the strike in Q2? Obviously, still we have no certainty on when the strike should finish. The strike has been spoiling two months of the first quarter. Up to now, we know that it shall spoil one month of the second quarter, April. Some days ago, we were contemplating that maybe in May, the situation could be normalized. As I said, after having the proposal agreement by the regional mediation authorities, we consider that being that accepted by the workers' assembly, normality should come on May. But as I said before, the unions' representatives have not allowed that to be decided on an assembly, and consequently, we do not know how much time maybe in May this could be affecting. And this has, obviously, its consequence. In the first quarter, more or less, this is the rough figure that we estimate related with the direct impact on the plant. For the second quarter also, we must take into account that the effect of the strike in our plant is affecting other business of the group. So you know that, in the plant of Spain, we are supplying billet to Roldan, to our long product operations. We are also processing material for VDM. So at the end, the strike also is having that consequence. And so at this time, it's difficult to predict how much shall be the effect. So more or less, we have been talking about EUR 16 million as the effect in the first quarter, maybe a rough estimation of EUR 8 million-EUR 10 million per month. If it were sold and we should starting in May, that should be the figure. If it takes more, let's see. And let's see more or less what can be the consequent damage that other plants should experience for not receiving more or less the material that actually is produced or transformed in Acerinox Europa. So this is the fact that is for us is difficult to quantify. We hope that this situation should normalize, but at the end, still is pending to determine. But that figure or rough figure of EUR 8 million-EUR 10 million per month could be rational to keep in mind. Understood. Thanks a lot. Then, while the strike is going on, should we expect the continued release of the working capital as you optimize the shipments? Well, during the first quarter, clearly, with two months, with the plant being in stock, our commercial distribution has been keeping the business and reducing stock. So this is something that is clearly appreciated. Then as soon as we normalize activity, let's see when it comes. Obviously, we shall have its further effect. But in principle, we don't consider that the second quarter we should experience strong variations from what has been the case up to now. So at the end, we must normalize production, but as much as normalized production and there is no raw material to entry, obviously, this also shall more or less have its effect. So we don't consider that this is going to be a relevant negative impact on the second quarter. So at the end, we think that still we shall more or less keeping good control on the working capital. We must obviously process all the material that is work in process in our plants. And then the other plants that have been increasing its production, this already has been included in the first quarter. So we don't think that there shall be huge variation on the working capital for the second quarter and also probably not either in the net financial debt figure. Keep in mind, Krishan, that the main release in working capital in Q1 came from the HPA division, okay, not from Acerinox Europa in Spain. Understand. Then finally, if you can help us quantify the valuation impact from the inventory into the Q1. Yeah. It has been some inventory adjustment at the month of March still in view of the actual condition. It's more or less in the range of EUR 40 million. It's substantially below negative, yes. Sorry. It was -EUR 40 million around? Yeah. Okay. Thanks a lot. Thank you. The next question is from Tristan Gresser from BNP Paribas. Please go ahead. Yes. Hi. Good morning. And thank you for taking my questions. Maybe a follow-up on the strike situation. So if we read the press release, it seems there are no short-term resolution in sight. But could you walk us through a bit the scenarios? And notably, I think you mentioned some voluntary binding arbitration. If you could tell us what this would imply. And I think you also mentioned that you're analyzing and evaluating changes in the current five-shift production model, and that could maybe solve the conflict. So if you could provide some details there. And finally, well, if the situation worsen or doesn't improve, at which point would you decide to, you know, go for a more, let's say, drastic decision there? Well, the fact is, obviously, for us, it's an extreme, disappointing fact how this issue has been handled by the unions. We have been negotiating in the discussions for the wage agreement almost for one year when in the actual world, when you realize a plant is two to three months we still consider that April is going to be the case a three-month strike, obviously, the first impression of a normal person should say is, "Come on. This is because the plant is under a strong layoff or retrenchment program." This is not the case. This has never been introduced in the discussion with the representatives. Or it would be considered that is more or less the staff is asking for a strong compensation reduction, which also is not the case. So at the end, more or less, what is creating this conflict with the union representative is the fact that we are bringing some flexibility and establishing some more or less flexible decisions and moving, adopting the work in every line according to the mini-cycles we are experiencing in the market. So for this, we need certain flexibility instead of organizing the work, moving people from certain lines to others according to the order books entry, and establishing more of a program in which this should be the driver. So what we need is to flexibilize more the plant as a consequence of the mini-cycles that have driven our market in Europe in the last years and also in our actual strategy, design evolution for Acerinox Europa for being more specialized and reaching directly for final customers as well as in the fact that we want to concentrate more on a specialty stainless. This needs further flexibility to be on running our staff in the plant and with such mobility that we are missing. And this is what is actually in place. In fact, the union representative that attended our shareholders' meeting last Monday and expressed his opinion and made some speech at that time and some questions to our board. But his main explanation that what they were missing and the reason for the strike was more in terms of family conciliation. So this is the fact. And when we bring these new measures, the fact that we need is some more flexibility for adapting ourselves to these circumstances. And this is what creates the strike. From our point of view, it's clearly not understandable how these proposals motivate a strike that up to now is taking for three months. So we have appreciated the mediation coming from the regional authorities. We still that we shall find a way that at the end, our staff shall be able to vote any proposal. And we are keeping our willing to negotiate. But at certain level, we actually consider that it still is a bit out of our control. But we hope that some rationale should be coming. And we hope that shall be coming soon. But this is the fact. Okay. All right. That's, that's helpful. And maybe my second question on the U.S. market. Are, are you seeing any in terms of demand, some, some green shoots? I think you mentioned that inventories are now below average. So is it conceivable to get some restocking in May or June? And historically, when restocking takes place, we usually see some pricing momentum as well. So yeah, wanted to have your view there. And, you also mentioned, I think you talked positively about trade protection. So if you could develop it as well, that'd be great. Thank you. Well, thank you. Tristan, well, I think that still is a bit soon, no? to seeing these green shoots in the market. We probably—no, you mentioned, no?—that inventories are below average. And this is a very positive thing because as soon as the final demand, no? reactivate, we can see, no? this or some restocking into the market, no? But still, maybe for the second quarter, it's going to be soon, no? You know that our visibility is low as well. And this can change very quickly. But we are not seeing yet these green shoots in the market in the final demand, no? In any case, as we stated before, no? Due to the very low level of inventories, we expect some better volumes in Q2 compared to the first quarter. Okay. That's clear. Maybe a quick follow-up. I think in your prepared remarks, you mentioned some supply tightness in the market. Could you, I just want to make sure I understand correctly. Yeah. This is, I think, it has been appeared in the media. This is more or less has been affecting melting production at Outokumpu. All right. Thank you. Thank you. The next question that we have on the line is from Ioannis Masvoulas from Morgan Stanley. Please go ahead. Yes. Good morning. Thank you for the presentation. Three questions from my side. The first, going back to Spain, it seems that a labor deal there may take some time to materialize. If the strike were to continue, when do you expect to declare force majeure on deliveries? Or do you think you can make up for that via production in the other facilities? Thank you. Well, it's at the end, more or less, obviously, what in view of this situation, what we are trying is and we are keeping a constant dialogue with our customers and trying just to create as less damage as possible, no? So we are and we are involved in that. So this is more a legal decision. And then, obviously, has its effect on how the situation and discussions are taking place. So I prefer not to enter in this comment now because at the end, more or less, this is the declaration of force majeure and the impact that this provides us to as customers is different among who are the customers, how are the customers supplied. So consequently, in these days, our local legal team prefers not to give too much detail on these issues. But it's definitely something that obviously we are taking our time, and we are just trying to produce as less damage as possible to our customers. Okay. Understood. Thanks for that. Second question on Bahru. What's the cash burn now that the operations have ceased? And what's the estimated cash outflow in a scenario for permanent closure that would involve severance packages and other one-off costs? Well, first of all, as you know, what we did at the end of last year is a huge impairment of Bahru. So more or less, at the end, this is what shall make much more simple in view of that to decide, which is more or less the decision to be taken regarding Bahru. Keep in mind that Bahru is more or less obviously not only a modern plant in terms of the lines and in terms of the equipment, but at the end also we have the land. We have the value of the land according to more or less the real estate evolution in the area and for industrial projects, which also has its relevance. So on one side, we have the land and the value of the land, the possibility of selling the land in one lot or in several. In addition, we have the issue of the equipment. So we are open to discuss a sale of Bahru business as it is, a running business. But also, we are open to consider, and we are making also the studies of that several lines that could be either moved to other plants of the group or even could be sold to third parties. So depending on which is the choice that's finally decided, this shall have its cash effect. So on this basis, at the end, the activity in Bahru has been very low. So what we clearly can state is that Bahru is not having a relevance in the year figures in losses because the activity has been low. But also, it has not been destroying cash. On the contrary, no? So the driver for the Bahru process is not going to be a cash issue. It's more or less finding the time in which more or less the possible decisions on place can be taken. But this is still we are analyzing this. And because of that, what we have decided is to stop production. So we realized that this does not make sense to keep running production in the actual places in Asia. At the level of prices also, we can obtain a hot band for transforming. We shall stop production. But the other is still to be defined because there are different possibilities on place. Okay. Understood. Thanks for that. Last question on, on HPA. We saw the EBITDA margin moderating to 8% in Q1. Shall we assume a similar level for the rest of the year? Or, is there any upside, relative to the Q1 run rate? Well, more or less, as I said before, the market is robust, and the market is strong. The tailwinds that we experienced last year as the metal effect, this is something that this year is more neutralized. So because of that, we do not expect in this year the tailwind taking place. And then consequently, obviously, according to the order book, we may more or less keep trading at these levels. But I think, yeah, for us, it's a reasonable level. Analyzing these quarterly figures, we think it's a strong performance. We hope that also and we must be cautious that part of the material that is processed on total basis to VDM in our plant in Spain is or at the end, mostly for the second quarter, not able to be processed. And this also may have its consequences. But we understand that even though that at least VDM can keep its more or less actual profitability and contribution. Should we reach the two-digit figures, it shall depend on the evolution in the second semester. But in principle, this operating level for us is reasonable. What we do not expect is a correction from these levels. But maybe just keeping business on normal basis and not and we do not expect the nickel to provide further damage. We understand that this is the normal speed cruise that we can expect from VDM this year as was explained in our results presentation. So the normality of the VDM contribution is not EUR 170. This is when there is tailwinds that we are in good position for to take advantage of that. But if not, we shall be in that level. Okay. Very clear. Sorry, just a housekeeping question. Assuming the Haynes transaction closes, would you be reporting the HPA division combining the two operations? Or is there going to be a different segmental reporting? No, no. It shall be the high-performance alloys division, which shall be, obviously, the combination of both VDM and Haynes. So we shall. Okay. Thanks so much. Okay. Thank you. Thank you. The next question is from Bastian Synagowitz from Deutsche Bank. Please go ahead. Yes. Good morning, all. I still have a few questions, actually, on Europe maybe, starting with the strike situation. So Miguel, you said your expectation is that the strike will likely drag on into maybe April, even May time. So is this what is discounted in your guidance? Or does your guidance actually discount the continuation throughout Q1 Q2? I guess, in other words, is there a risk where if the strike drags on, you just cannot keep your guidance of slightly improving EBITDA? That's my first question. We understand in the guidance that anytime during the quarter, it shall be normalized. Still with slightly better, we think that we cover, in any case, the impact that may achieve if this normality comes later in the quarter. So, in any case, we understand that anytime during May, we hope there should be some possibility of taking an agreement. But we still feel comfortable that with a slightly better up to now, we think that with this is enough. If the situation is not improving, let's see what more or less if it should be necessary to make some further explanation. But we understand that it shall be enough. Sorry, Miguel, I didn't entirely understand. So you're, you assume that it will actually start operation in your guidance? Or if it is offline in. Yes. We We understand that we shall start operations during the quarter. Yep. And that's within your guidance then? Yep? Yeah. Yeah. But in any case, no, we're sorry, Bastian. In any case, we should, we think, and we are confident, that we should meet our guidance, the slightly better EBITDA, no? independently of what has happened with the strike in Spain. Okay. I think that's a very different message, to be honest. And I think that's actually a very constructive one. Okay. Understood. And then, just on the U.S., I guess my question is, what are the actual dynamics you're seeing? I think when you communicated a few weeks ago, my impression was you were reasonably constructive. My impression is you turned at least a notch more cautious here. Is that impression correct? And if so, what's been driving it, please? Well, in the States, more or less, as previously Carlos said, there is no specific green shoots on any specific market. So we are recovering, after a correction of apparent consumption of 27% taking place last year. So it's clear that at the end, the market in certain areas is obviously adjusting above. Our sectors that are still the tractor, trailers, and vans is a sector which is healthy. The food service and handling equipment also remain at high level. It's still more or less this is a lot of a sector that, for us, also has its relevance. The U.S. auto also is providing further increases. So these sectors are doing relatively well. In the Pipe & T ube, this is more or less still we are waiting for that sector to appear. So there are several projects involving new construction on regard of this package of allowance that's provided by the American administration. But still, we have not seen more or less the real orders for supplying that project. This is something that still is to come. In addition, more or less, this is a situation up to now. But we are seeing more a spread recovery of most of the sectors as a consequence of the adjustment last year. But after this, the issue is, should we contemplate now to run the plant at full capacity? Probably not in the second quarter. But I think we are actually at levels of 89%. And more or less, it's 85%, sorry. This is what we contemplate for the second quarter. So we understand that in these times, there is no pressure on pricing. The market still values much more better the proximity and the constant supply and the short-term supply. This is highly appreciated by our customers. And in this basis, we feel comfortable with that. So we are not seeing further pressures. The imports have been stabilized at these levels. So on this basis, we understand that can be a robust year for North American Stainless. Still, we have no visibility to see for the third quarter. We should more or less increase capacity utilization. This is still to come. But I think we are probably handling well the actual situation in the States. As I say, our possibility of being in a constant supply for our customers replacing the material they are dispatching allow us to be running the plant as we are doing. And North American Stainless is highly profitable. So this is not a bad scenario for us to remain, even though we still are willing to increase capacity utilization when the market reacts and the distributors start being more active. Because up to now, the distributors are just more or less in that wait and see and replacing their deliveries. Mm-hmm. Okay. Perfect. Then last question, Miguel, please, on Haynes, where I think you seem to be very well on track. You got the shareholder approval, I think, most of the regulatory approvals. So what are the main action points now needed to get to closing? There are, yeah, some antitrust files pending. Not the American one, which obviously is the most relevant. But also as Haynes is present in several markets as well as we are. We have some other countries in which still we have present all the files. And we are waiting for more or less the acceptance on that. So this is a gradual process, affecting some countries and some of the countries which Haynes exports. And we understand that this shall be obtained as there is no real issue. But still, we need the official approvals. And there are countries in Spain, for example, among them. There are also other northern countries in Austria and other, and those are the ones that are expected to come gradually. But nothing makes us think or be concerned that we shall have problems on there. The one that was obviously more relevant is the North American one. And this is already in place. So as I said before, this is something that we understand. According to the processes and the times or considered at every jurisdiction, our advisors said that maybe during June or late June, everything shall be approved. And then we hope that we shall go through the acquisition early July. My understanding on this basis is that it probably shall not be taking place during the second quarter. So we understand that should be in the third quarter. So the figures that we shall present them for the first semester shall be the business as it is in Acerinox up to now in stainless and high-performance alloys. Probably from the third quarter, we shall include Haynes. Mm-hmm. Okay. Excellent. Thanks, Miguel. Thank you. The next question we have is from Óscar Rodríguez from Banco Sabadell. Please go ahead. Hi, Óscar Rodríguez, Banco Sabadell. Congrats for the results. Thank you for taking my questions, too, if I may. The first one is linked with the working capital evolution this year, how it should perform, considering the moving parts of nickel prices and Acerinox Europa back in business. The second one is about CapEx. Should we expect a steep CapEx increase in the second part of the year linked with Haynes? Or is something that will apply for 2025? Thank you. No. In CapEx, we keep the indication we gave. It's true that the CapEx, the cash out for CapEx in the first quarter has been lower. But gradually, this is going to be increased. So at the end, more or less, especially for the second quarter and especially in the second semester, shall be much cash out related to the CapEx. So this is very clear. So keep in mind that some of the projects were decided and announced at the end of the year, mostly related in the case of the high-performance alloys. And the ones in North American Stainless, there shall be also cash out as much as these equipments are receiving North American Stainless and being implemented and constructed. So, consequently, this shall be coming in the remainder of the year. The figure of the first quarter probably is going to be the lower one. Okay. Perfect. In regarding the working capital, I think it's, obviously, it shall be more or less depending on the normalization on our plants. But in any case, whenever it, the situation reactivates, we obviously have the material that now we have in process that is the one that should be transformed. In addition, we shall start also in the normality with receiving additional raw material. But as I said before, this is not going to be a driver for the second quarter cash generation. Okay. Perfect. Thank you. Thank you. The next question on the line is from Moses Ola from JP Morgan. Hi all. Thank you very much for taking my question. So just a couple a couple of questions from me. So firstly, on the U.S. stainless steel market, you've talked about apparent consumption up 8% year-on-year. Could you perhaps maybe give us a breakdown in terms of real demand versus inventories and restocking? It did seem that there was more restocking behavior towards the end of last year and start of this year. But how was real demand, in your view, responded to that? Yeah. As we commented before, no, we are not seeing a pickup in the real demand. A strong pickup, no? Yeah. It's slightly better than in the previous quarter. But not a big increase in the demand side, no? Imports are going up a little bit, compared to the same period last year. And a small, slight increase in stocks, no? But no more than that. What we are seeing, it's mainly stability in the market. And maybe reinforce that the worst is behind us, no? I think that the fourth quarter probably was the trough. And since this point, no, we expect, no? a progressive lean in improvement in the market. Thank you. Understood. And on VDM as well. So if I look in terms of realized prices on a unit basis, it does seem that there has been a noticeable reduction in realized pricing per ton of steel. So just really trying to understand here what the pricing power dynamics of VDM are? And why, you know, compared to last year, which was a really strong year in terms of your pricing power, if you expect that to change into this year? And what the drivers are for that? More than an issue on prices, it's an issue on costs, especially related with the raw materials. So the high-performance alloys and consequently, VDM is very sensitive to nickel evolution. The material that VDM was dispatching last year to its customers, it was a strong gap between the average of the nickel in hands by VDM and the selling price that contracted material was dispatched. And consequently, this created these tailwind effects. The situation after the nickel decline and the normalization of the nickel costs at the stocks of VDM now is much more reduced the gap. And consequently, because of that, we are not having this metal effect. This metal effect was a tailwind. We always stated last year that this was not the normality of VDM. But we were taking advantage of that metal effect. And this year, the effect is not expected to be relevant or at least not up to now. So this is mostly the effect. But it's not so related to a price issue. It's more related to the consequences in the cost of this fact that, you know, for the high-performance alloys is very intense on the nickel cost. But if I look at nickel pricing and the outlook just here, where we are today, Q2 versus Q1, just on nickel futures, it does point to perhaps more upside for nickel prices near- term. So perhaps that margin reduction that we saw in Q1 could that benefit or see an uplift into Q2 as nickel prices recover? Is that a short lag there? Well, for Q2, we have one effect is more or less regarding also with the nickel. Another effect is that one of the relevant customers at this time for VDM with strong good margins is a material that is pending to be processed in Spain. And consequently, this is something that there is a losing margin opportunities for VDM not being able to dispatch that material yet. So this may come later, maybe for a third quarter. But this is something that could spoil or affect the second quarter figure. But having said that, looking at the other areas involved, we understand that the second quarter for VDM should be in line with this first one. So keeping everything on mind, our forecast, as I said before, is that we could considering a normalization of the EUR 31 million of VDM contribution of VDM, the annualized version of that should be around 125. We feel comfortable with that. So on this basis, as I said before, this should be the most prudent projection at this time. And in addition, it's clear, as I said, that VDM historical record previous in 2019 was EUR 96 million. So now the fact that we are reaching figures of EUR 120 million-EUR 130 million is a remarkable result for VDM. But obviously, with some challenges. And one is this issue taking place. But we understand that everything should be normalized. And for us, this is a proper speed cruise. If there is possibilities regarding the nickel market evolution, that VDM obtains advantage for that, obviously, we shall be there. But this has not been a driver of the first quarter. And we do not expect it to be a driver for the second. Thank you. Very clear. And similarly, on Haynes, as you gain greater visibility on integrating the business, I think you talked in Q4 about starting with a more conservative annualized run rate of EUR 80 million-EUR 90 million in that business. Just based on the visibility you have now, is that guidance still valid? I must say that we have no news in that regard because we still are not interacting with Haynes. So until we receive all the approvals from all the different authorities and antitrust, we are keeping a certain distance. So what we are making is all our preparation work internally here for making the integration very expeditious as soon as we are approved to do. But we are not involved or not participating now with Haynes in any special issue. We are not talking about the markets or the prices. We are not thinking about the margins. So there are several areas in which our legal advisors prefer that we do not participate. So we are keeping certain distance and just making all the preparatory works so for whenever we are allowed to interact with them. Okay. Thank you. And just really finally, what is your current carrying value of Bahru, please? The current value for Bahru, I think, related with some of the land offers we receive, is in line of EUR 40 million. EUR 40 million. Thank you very much. Welcome. Thank you. As a reminder, if you'd like to ask a question, please press star followed by one on your telephone keypad now. Our next question is from José Suárez from CaixaBank. Please go ahead. Hi. Good morning. Thank you for taking my questions. Most of them have been solved, but I have a couple of them, if I may. First one is related with net debt evolution. You've seen a strong leverage in this quarter. And you've mentioned it that working capital shouldn't have a strong effect in the second quarter. But more focused on year-end, do you see feasible to end the year excluding the acquisition of Haynes? Do you see feasible to end the year with a net debt level below EUR 234 million you've seen in the first quarter? That will be my first question. And apart from this one, second one is related with the Haynes acquisition. You just mentioned right now that you're not talking with the company about markets and margins and overall. But in your conference call regarding the acquisition, you were mentioning that you would be generating around at least $66 million-$71 million in synergies. And I was wondering if you would need to apply or to implement to take some operational costs to reach this EUR 66 million in synergies, how much would be the operational cost implied in your next years to reach those synergies? In regard to the net financial debt, not contemplating Haynes, I think that still we have a room to reduce debt during the year. So, I do not expect big changes in the second quarter. But probably in the second half, some further debt reduction could be taking place. So in this regard, in a normalized Acerinox group prior to acquiring Haynes, this shall be the case. We are obviously extremely comfortable now of being reducing our debt because at the end, we must keep in mind that, as you know, the acquisition of Haynes stock is going to be in the range of $800 million. And in addition, we must take our debt. So as much as we reach in a fit position, obviously, that absorption should have less relevance on the final yearly figures. And this is what we are working at. And on this basis, we are making this strong commitment to reduce working capital. And as we said before, we have actually cash in hands of EUR 1.9 billion. And we have also facilities in place for additional EUR 700 million. So the liquidity already is there. It's not going to be an issue. But in our business, we should also keep on reducing debt during the year. But in any case, this shall be obviously neutralized by the fact that from the third quarter, probably our leverage should increase because of the acquisition and because of we shall be using our cash for that. So this is per one side. Regarding the synergies, when we gave the figure of EUR 71 million in synergies, this is after all the costs for implementing the synergies. And this is the figure that we prefer to maintain as it is. All the synergies are achievable and after having absorbed all the necessary costs for this implementation. At the end, obviously, it's clear that shall be gradual in the coming years. But we also keep the commitment and the idea that at the end, this CapEx to be done also in Haynes for the new forge for the new forges and so on shall be covered by the cash generated by Haynes. This is more or less the strategy that we shall fix when we start working all together and taking the proper decision. But these EUR 71 million is after the costs for implementing it. Just a clarification. So you're mentioning the 71 in an operational terms, in an EBITDA term, i.e. after operational costs, not referring to CapEx, just from operational. Yeah. It's after yeah. After operational costs. Yes. Okay. Okay. Thank you. We have no further questions on the line. So I'd like to hand back to Carlos for closing remarks. Okay. Before these closing remarks, we have several questions from the web. Most of them have been already answered. But let's try to move to the one that still are pending. The first one comes from Anindya Mohinta of Exodus Capital. And it's regarding the guidance, no? If in the guidance, we are included or not inventory gains or losses for the second quarter. We understand that shall be negligible increase of working capital but not relevant. So consequently, we think that it should not be a distortion in fact. But obviously, we understand that. And as I said, it's not going to be a driver of the cash generation on the second quarter. But it also should be depending on when we normalize operations in Spain. So this can be at the beginning of the quarter or of May or if it's in June, it may have its difference. But this shall not be a distortion. We consider that the working capital is not going to be a relevant issue for the second quarter. Maybe some slight increase. But not significant. Okay. The next question is coming from UBS, Miguel Fernandez. And it's regarding the European market, no? If even with the strikes that we have in Spain and also another one in Finland that is just ending, one would expect, no? A noticeable increase in prices, no? What do you think is the reason behind the prices in Europe? There is clearly an absolute lack of visibility. And at the end, they are actually facing challenges in Europe. Still, the market is not active. More or less, the trend of the prices slowly increasing even though not yet in satisfactory levels makes us some confidence that in the second semester, this could be the case, more or less following also whatever are the decision on the interest rates or the rhythm of more or less start to reducing interest rates, this could contribute. What we more or less realize is that everything is prepared. So the level of stocks, as we said, is very low. Sorry. The level of inputs. Market share of 14%-15%, we have not seen that for the last 10 years. Now, the union is much more active on establishing the proper barriers. So more or less, this can be a good starting point for when the market starts to react. But still, we are not touching it. And as you said, and it's correct, two of the four players not running operations. And this has had not an effect of accelerating the apparent consumptions and the others. The situation is really strange. We thought that gradually in the second quarter, the activity should normalize. Maybe we need to wait. And we need to wait. Let's see what takes place in the third quarter. Normally, it's not the stronger quarter in Europe because the seasonal slowdown. But let's see if there is some reaction comes could be at that way. But if not, maybe we should wait until the fourth quarter. So some of the observers of the market are confident of prices going up and normalization in the second semester. But still, we have not seen that. And obviously, especially in our case, keeping in mind that we are not now in position of taking new orders. But this is more or less what we can say up to now. Okay. Thank you, Miguel. There are also several questions regarding working capital that I think Miguel already answered all of them. And also, questions regarding prices moving forward in the U.S. that unfortunately, due to competitive reasons, we can't answer these ones, no? Just to finish, one clarification, no? from coming from Iñigo Recio, GVC Gaesco, regarding the inventory adjustment in Q1, no? It is EUR 40 million or EUR 14 million? And it's EUR 40 million. 40. 40. It's, yeah. Around EUR 40 million. In fact, has been 44. 44. The exact and precise figure is EUR 44 million. Okay. So this has been, no? Everything from our side. So thank you very much for joining us and for all your questions on this call. Our next report will be on July 8, 2024. So thank you very much again. Have a nice day. Thank you, everyone. This does conclude today's call. You may now disconnect your line and enjoy the rest of your day.