Ladies and gentlemen, welcome to the Aperam Second Quarter 2025 Results Conference Call. I am [Mathilde] the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Timoteo Di Maulo, CEO. Please go ahead. Hello everybody, and thank you for joining our conference call today. All our comments were contained in the podcast that we published this morning, so please, let's start straight away with the Q&A. Operator, please open the lines. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only headsets while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Tristan Gresser from BNP Paribas Exane. Please go ahead. Yes, hi, thank you for taking my questions. I have two. The first one, could you discuss a little bit what happened in the Alloys Division? Has the problem been solved, and which facility was impacted? If you can maybe quantify the cost impact into Q2 and into Q3, and let's say there were not any type of effect into Q3, would you still have seen some softness in the Alloys Division? Maybe if you can talk a bit about the demand environment. I'll start there. Okay, thank you for the question, Tristan. We have had indeed a failure in one of the plants. We are not disclosing too much of the detail, as you can understand, but it is something in the range of EUR 10 million, and half of it is repair and half of it is the loss of production, and this will show up in Q3. Now, concerning the global market in alloys, there is a part of the market which is still extremely strong, a part of the market which has been impacted, slightly impacted by a stocking phase, in particular, some aerospace. It is what we see, but also we see that the ramp-up of the production in aerospace is happening, and the stocking will soon end with better volumes for us. All right, that's clear. To add on to that, Tristan, for the second part of the question, when you were asking about a color on the Q3 numbers for alloys, Tim has explained the impact of the repair and maintenance, right? None of this is coming in Q2. This will be coming in mostly in Q3, and some of it going into Q4. In alloys, in terms of numbers, the colors you've asked, the Q3 is not a weakness per se in EBITDA, but more the typical seasonality, because as you know, in our alloys, we are in a growth phase, and we are producing at quite a high rate. The annual maintenance requires that we deliberately take down a certain seasonality during summer. That's the reason for the projection of alloys, which we give in our podcast. Yeah, and just to be very clear. Yeah, that's very clear, and thank you for that. My second question is on Brazil. I mean, the U.S. has hiked the tariffs from 10%- 50%. There is some exclusion. Can you discuss a bit broadly of any impact for you? I know directly there might not be too much, but indirectly, this could have a broader economic impact. If you can touch on that, and would you expect Brazil to improve half on half into H2? Thank you. As you have correctly said, there is no impact for us because we have focused Brazil on Brazil and on Mercosur. It is not the United States which will impact directly our result in Brazil. What we see is that Brazil continues with a strong order book and with the level of price, which are the international price, very low, and continue to perform very well also because they are very cost-competitive. Now, concerning the global economy, at this moment, it is difficult to say, but Brazil is not, let's say, the growth of Brazil in this moment, from what we see, is mostly domestic demand, not so much with the export. They export a lot of raw materials. I think the raw material, whatever happens in the duties, will be exported, especially because they are going to China or Asia. Also, with the food, all the agricultural products, I think they will always find the market. I am not an expert of the macroeconomy and the impact of that on Brazil, but we are not expecting so much. Also, it is really, really early to see if this duty will become a reality, will be only a negotiation, let's say, tactic, as it is for everywhere. The next question comes from Tom Zhang from Barclays. Please go ahead. Hi, good afternoon. Thanks for taking our questions. Two from me as well. Just following on from Brazil, you talked a little bit about some pricing risk into Q3 and then volumes. I think you said flat despite usually better seasonality. Could you just give a little bit more color around both of those points? Is there anything around mix? Is there anything around import pressure that we should be aware of there? The second question, if I can give it now, is just in Europe, whether you are getting to a point where you would start thinking about taking any capacity out meaningfully in Europe, because I guess the demand situation still feels very difficult. Pricing pressure, you say, continues into Q3. How far away are we from the level where you would sort of, yeah, look to actively take out capacity, as I think some of your peers have talked about? Thank you. Brazil, let's say, I don't see the question of volume so much. I mean, volumes were good in the second quarter. We remain Brazil, we remain at full load in Q3. The seasonality of Brazil will start in Q4, and the low season will be in Q1, as you know. It's a bit different from Europe. Prices also, you remember that the way prices are built in Brazil is in function of the international prices. We have had for long today very low international prices, and then you apply the premium and continue to add the typical internalization, and this is the price in Brazil. We don't see a major change in this pattern in Brazil. Now, if we are going to Europe, you are staying structural. Europe is already at a level of low volumes. This is due to the fact that we have had during the last, let's say, several quarters now, a decrease of the demand and the level of imports, which has always been important. Europe has the good part that we are based on electrical furnaces, and we can adapt, switching on and switching off our electrical furnaces. We can adapt the level of production. On top, we have always said that part of the leadership journey has been to develop a model in which we have increased a lot the flexibility of the downstream. On top of this level of variabilization of the cost, which grants us the strong cost performance and the leadership in Europe. On top of this, we have plans to continue, as it is part of the leadership journey, to continue to decrease structurally the cost. It is not because of temporary volumes. We continue to follow our philosophy of leadership journey and continue to focus on the most competitive footprint in Europe. Okay, that's clear. Thank you. Thanks. We now have a question from the line of Adahna Ekoku from Morgan Stanley. Please go ahead. Hi, thank you for taking my questions. First, just to follow up on this alloys kind of asset repair. Will this have any impact on reaching the EUR 100 million standalone EBITDA from the alloys division, excluding USAP? Maybe just a second on USAP, and if you could give any guide on the performance in the quarter, should we just extrapolate the two-month contribution from last quarter? Would that be a fair run rate for the rest of the year, or will we start to see tailwinds from synergies and maybe a bit of the aerospace recovery as well? Thank you. Hey, Adahna. Yeah, so in terms of alloys ex-USAP, yes, the performance continues to remain strong. We said about a run rate of close to EUR 100 million, and I think we should not see anything different from it, plus or minus EUR 5 million, depending on how, you know, orders move from one quarter to another, right? That's the high level of expectation, so to speak. In terms of USAP, I think the past run rate is a very good indicator. Tim's already given a good guidance based on how aerospace is looking up, and aerospace this year, and that was kind of Tim's message, and I'm repeating it, seems to be still slow. The expected pickup seems to be in the supply chain not happening, that continues to be. Thanks to synergies, but also the operational measures which we put in as Aperam, working together with the new colleagues, we do believe that the run rate of the previous quarters can be definitely secured. On the alloys front, I'd say that that's the summary. That's really clear. Thank you. We now have a question from the line of Maxime Kogge from ODDO BHF. Please go ahead. Good afternoon. First question on my side is regarding recycling and renewables. Actually, the division has made a quite soft start to the year. Are you still targeting a kind of normalized EBITDA rate of EUR 80 million- EUR 85 million as in previous years? Can you perhaps shed more light on the weakness? Is it only due to weak and less scrap markets in Europe and the U.S., or does it extend to Bioenergia and Recycle as well? First of all, it's not at all extending to Bioenergia. Bioenergia is really a very stable, let's say, business. Typically, Bioenergia has some seasonal effect at the end of the year. You see that typically, part of the results of Bioenergia are in the end of the year. What is happening in the scrap market is very clear. Scrap prices have declined sharply during the last six months due to the impact of the gap versus the raw material entering in Europe or being used by the Chinese. It is a business in which you have in-between inventory. You continue to buy at a certain level and to sell at a level which is below. This is a typical effect for this kind of business. On top, the offtake has been low in certain regions, in particular in the south, for what I said before, because other competitive raw material products have been imported in Europe. This explains the temporary situation of recycling. Okay, regarding the run rate of EUR 80 million- EUR 85 million for the year, perhaps Sud can provide some insight on that. Yeah, Maxime, the thing is that besides the two factors Tim has mentioned, what is actually happening? You remember last year, we did say that there was a sudden slowdown, and this has turned around. It's on the aerospace recycling side, which is our Utica business. On the year-on-a-run rate basis, I don't see anything which will deviate us from that around that EUR 80 million mark, which you're saying, again, give or take the plus or minus 5%, 10% on. There's no significant discussions on recycling and renewables. That's a good run rate to assume. Okay, that's clear. I'll ask one question on CBAM. You mentioned a potential start in 2026, but that would be step by step. I'm not sure I understand actually what you mean with a step-by-step approach. Does it mean that CBAM will only start very minimally, including just scope 1 emissions at the start, and gradually, we will have scope 3 emissions being included? I know this is quite crucial for you to have these scope 3 emissions included, or resource shuffling and downstream markets will perhaps also not be included initially, but will then be taken care of. What's your view and what's your expectations on that? Okay, so let's start from coming back to the story of CBAM. For us, CBAM is only a plus in the sense that CBAM is not for us something which is linked to the huge investments that have to be done to decarbonize, okay? Whatever CBAM will bring will be positive. This is the first concept for us to understand. The second concept is CBAM will start in January 2026. We'll have an impact in January 2026. Today, the CBAM has still some parameters to be defined by the commission. The commission has been probably very busy in this trade war with the United States and has not published yet what are the criteria of the CBAM. First, January 2026, it will start, okay? From January 2026, the counter of every ton which will come in Europe is started. For stainless steel, precursors are included. What is not only the scope one, but also the scope three? What will be progressive is the application because there are parameters to have a gradual abandoning of the EPS to the full, let's say, application of the CBAM. This is public, okay? It has been already published by the commission. You can find it. It will be a progressive ramp-up. We don't know the parameters. If we had all the parameters today, we can, let's say, have a good estimate. I repeat, whatever happens, it will be positive, okay? Some points like the capacity shuffling, etc., have to be solved. Yes, there are some loopholes, but this will not prevent us from having a CBAM which is favorable to the cleanest producers, which are the Europeans. Okay, that's clear. Thanks for all, and as you're back to the queue. I think we will have a better view on CBAM during Q4. That's for the moment. Take in mind that this concept for us is a positive. As a reminder, if you wish to register for a question, please press star and one on your telephone. We now have a question from the line of Bastian Synagowitz from Deutsche Bank. Please go ahead. Yeah, hi, good afternoon. I've got a couple of questions, please. Maybe first, just a quick follow-up on the CBAM situation. Tim, you mentioned that you don't obviously at the moment have a perspective on the exact parameters. What are the precise parameters or key parameters which are missing, basically, in terms of the whole CBAM discussion? I.e., has the actual benchmark already been set? What are the other key parameters you're really waiting for? That's my first question. Fundamentally, what is the benchmark has not been established. Second, what will be the level of declaration, how they consider it? It will be country-based, product-based, it will be audited, etc., so all these parameters are not yet there. If you go to the website of the commission, you will see that it is a complex formula what they apply. The concept is extremely simple, but then there is a complex formula because you have grades, you have precursors which are different, for example, between ferritics or austenitics, etc. This is the part for carbon clean is much simpler. It is only the direct emission, and so there is no big calculation. Even for direct emission, this should be in favor of the European. Okay, thank you. Maybe at least related to that, listening to the podcast, I must say you sound very, very confident and positive on, I guess, the possible implications of the upcoming European Steel and Metal Action Plan. Maybe could you just spend maybe 30 minutes saying why are you that confident, and then also maybe share your views as to whether you think it's really realistic to see something on that front already kicking in in early 2026 rather than replacing the safeguards mid-2026? Is this really realistic given all of the stakeholders involved, I guess, the parliament approval, etc.? That would be helpful. Thank you. Why I'm confident is because so many years that we are working with the European Commission. It's the first time that the European Commission has fully understood the magnitude of the problem and the issues that are into the industry, the global industry of Europe. Now they have understood. Not only have they understood, but they have also engaged. They have never engaged before except in CBAM. CBAM, at the end, is common. They have never engaged at all in all the other parameters. You say you know that there are six parts of the action plan. All these action plans are exactly what this industry needs. Exactly. Now, what is the closest one for sure is CBAM and trade defense. On CBAM, I have already explained. On trade defense, what we are expecting is the renewal of the safeguard. The previous one has been ineffective, at least for us. The new one, and this has been supported by many important member states, has the potential to be really a game changer. When it will come, for sure it will come in 2026. We will not have an impact in 2025, but we will have for sure an impact in 2026. We hope that it will be at the beginning of 2026 as the member states are asking to the commission. Let's see. I'm confident that this will arrive. On top of this, we are working specifically for stainless steel on other files that are ongoing and that will address further the level playing field. I cannot promise anything on 2025 because nothing will happen on this part, but I am really confident in 2026. Okay, thank you. Very last question. I know it's very early, but just already thinking about the possible moving parts also into the very last quarter of this year, I guess you clearly highlighted the operational issues in Lowes. From my understanding, most of that should be fixed. There's European seasonality in your favor, I guess. There's probably Brazilian seasonality slightly against you. From perception, usually a lot of the other businesses were typically a little bit more back-end loaded, particularly Lowes, maybe also recycling. Are there any points we're missing? Are there any things where you would maybe correct us a little bit in terms of how things may be playing out this year, or anything which you would like to bring to our attention? Bastian, I think you've covered most of the issues. Stainless Europe, yes, the volumes may be slightly better. Typically, it's been 5% or something, right, from Q3 to Q4. I remember also that in Europe, for example, at least December is half a month not there, right? That's always been the reason for the slightly lower increase. Brazil seasonality, Tim's mentioned that. Alloys, there's positive seasonality, and hopefully, most of the effects of any one-time occurrences have gone away by then in Q4. Recycling and renewables, I've given a clear guidance to Maxime. I think we've covered all the bases. If the market persists like that, I think you have a good scenario to get out of, right? Okay, very clear. Thanks so much. Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Timoteo Di Maulo, CEO, for any closing remarks. Okay, thank you very much for your participation to this call just at the beginning of the holidays for many of the Europeans, at least. You know that there is a very persistent challenge, in particular in Europe, in the market, etc. We are really focused on continuing strengthening our footprint, continuing realizing the leadership journey gains that we have launched, this wave that we have launched nearly one and a half years ago. This grants us that our footprint will be competitive and ready for any rebound of the market. At the same time, we are happy with the development of our alloys business. We are happy with Brazil because it's not only a performing unit, but it's also in a market which can give a lot of, let's say, satisfactions and with the forest on top. We have a lot to be said, and we will meet a lot of you on roadshow during September and the conference also. I wish you good holidays for those who go, and please contact our investor relations department for any feedback or any need that you want. Thank you very much, and bye-bye. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.