Ladies and gentlemen, welcome to the Aperam fourth quarter 2025 results conference call. I'm Lorenzo, 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 Sud Sivaji, CEO. Please go ahead, sir. Thank you very much for joining our conference call today. All our comments were contained in the podcast that we published this morning, which supports our quarterly financial reporting and, where applicable, our disclosure of regulated information. We also save more time for your pertinent questions during this call. Good afternoon to everyone joining this call. Together with my colleague Nicolas Changeur, we're looking forward to answering your questions. So let's start straight away with Q&A. Thank you. Operator, if you could 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 phone or telephone. You will hear a turn to confirm that you have entered in the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants on the phone are requested to disable the loudspeaker mode 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 Gresser, Tristan from BNP Paribas. Please go ahead, sir. Hi. Thank you for taking my questions. I have two. The first, could you help us understand a bit the current situation in Europe? If your order books are improving at the moment or not, are more buyers of stainless steel turning domestic? Are buyers of stainless steel still importing like nothing has changed? You also flagged that inventory has decreased but imports have surged in Q4, so I'm also trying to square that one out and see how much of an overhang there is on the market in Q1, Q2. That's my first question. Interesting. Thanks. So the discussion about the market in Europe currently is that our order books are recovering from Q4, but it's purely a seasonal recovery. Q1 is typically Europe comes back from its Christmas holidays, and this is a seasonal recovery. So we don't see anything special, additional, like we said in the podcast. So it's seasonality purely. The second question you had was, are importers turning to domestics? No, we don't see that specific activity. Typical buying patterns, both apparent consumption and real consumption, which drives our production, is at seasonal, normal levels. In terms of the inventories being low, distributor supply chain, the statistics were at the end of Q3. And as you marked correctly from our podcast, import surge was there at the end of Q4, probably as some distributors were trying to cover for CBAM discussions. So this will have, like we said in our podcast as well, some overhang in H1, but it's, I believe, a temporary overhang because, as you know, of the three bodies of the European Commission, two, the INTA, which is the association, and the European Council have both come out and said 1st of July is the start of the new quota period for the safeguard duties. So we do believe that that window is closing. So it's an overhang because of these imports end of Q4, but this overhang probably is going to affect the first half of the year a bit, and that's the reason we gave the guidance we gave. Okay. No, that's very clear. And just following up on that, I think in your prepared remarks, you talked about the impact of CBAM depending on the behaviors of importers, basically if they decide to take the risk or not to use actual default value. To what you're seeing so far, given that CBAM has been implemented now for more than a month, are they taking the risk, or how would you see that behavior being at the moment from importers? At this point in time, we don't see anything abnormal, Tristan, but I'll also be very clear. Like you just remarked, it's just one month in, right? So you cannot make a pattern out of what's happening in the first month, so to speak. So that's why we said we'll have to probably wait for two, three months and see that if they are. But what is absolutely clear is that if they take the risk, sometimes it will look like in 2026 they don't have anything to pay, but that is just because of the plan that has been put in that all payments would be retroactive in 2027. So we know that there is a lot of noise out there, and that's the reason Tim and I recorded a video separately as well, just to be very clear, showing that the default values are the standard values. If somebody has to go for a real value, they have to actually show and accredit themselves to nationally accredited authorities in Europe. Yep. Okay. No, that's very clear. And my second question is on the nickel situation. What's your view on the situation in Indonesia? Do you think the rally in nickel prices can be sustained? And I think we've seen higher stainless steel prices in the region already in Indonesia, China. I mean, if imports are still coming in, that should definitely help to have those Asian prices at a higher level. Yep. Any help there to understand the situation would be great. So yes, the prices in Asia have gone up by the raw material price go up. So it's primarily a shift up compared to raw material prices, right? So I think that development is completely independent of what we have said trade defense led because in that case, there is a reduction of imports in H2. So it should be an add-on, so to speak, rather than one replacing the other. Okay. All right. Thank you very much. Thank you. The next question comes from the line of Dominic O'Kane from JP Morgan. Please go ahead. Thank you. So, I have two questions. The first question just moves on from the nickel question. Could you maybe just give us a sense of how the moves that we're seeing in the nickel price could impact your bridge over the next one to two quarters? I assume you are fully hedged for the next quarter, but can you just maybe give us some context around your exposure to the nickel price moves? Yes. So in fact, Nicolas Changeur speaking. Good afternoon. The nickel have a moderate impact on our pricing. As you know, we are using scrap, and so the relative move of the nickel are very limited. We are mainly using nickel only in our prime nickel, and so LME-related nickel with our alloys business where we are fully hedged. Okay. Excellent. Very clear. My second question is just around capacity utilization. So in a market where we may start to see demand in Europe coming back, can you just maybe give us a sense of what your capacity utilization currently is and if you have spare capacity that you could bring back into the market relatively quickly? Yeah. So Dominic, absolutely. So first things are current utilization depending on the player is between 65%-75%. And typically, we've said the safeguard measures, which is different from what you asked in terms of underlying demand picking up. The safeguard measure, we had guided from 7%-10%, there should be a utilization lift just by the replacement of imports, which will now be reduced, right? So in our case at Aperam, we have capacities available. As you know, we run electric arc furnaces, which can be switched on and off three times a day. And we have sufficient downstream capacity as well to match this utilization increase of 7%-10%. Super clear. Thank you. The next question comes from the line of Maxime Kogge from ODDO. Please go ahead. Yeah. Good afternoon. So first question is again on nickel. Sorry for that, but I mean, you're explaining to us that nickel does not really have any impact on the stainless business given that you procure most of your nickel needs from scrap. But if I look at the alloy surcharges that you publish and you and your peers, we see a big increase actually in February. So I guess that's still related to nickel. Is there anything I'm missing there? Yes. But the business that is related to the extra alloy is very limited, in fact, in Europe. So the impact is small. Maxime, we published the prices because there's still one or two customers who buy based on the alloy surcharge discussion, right? But as you know, in Europe, we moved to a fixed price discussion in 2019, and we have not looked back at all because the dumping of imports into Europe has contributed that we have all moved to a fixed price policy to compete with them. Okay. Okay. So those alloy surcharges are not really that relevant. Yeah. Fair enough. So regarding Brazil, there has been some announcements last week about higher duties for certain product categories. It affects stainless and electrical. So where duties are supposed to rise from 12.6%, I think, to 25%. So what's your take on that, and can you expect a positive impact in the coming quarters? Yes. We expect a positive impact, and we evaluate this impact at mid-single-digit EBITDA per quarter. As you know, we are already booked for Q1 and beginning of Q2. So basically, we see this picking up end of Q2 and beginning of Q3. Okay. And you expect those duties to remain in place permanently because at this stage, they're only valid for one year, if I'm right? They said that they're going to review this for a year, but we remain confident if the dumping from Asian countries continues. The Brazilian government has been very keen on ensuring that there is a fair trade policy in Brazil. So we look at it for the next year, as you have said, but this is something which we will work together all the time. Yes, we do. Yeah. Okay. And last one is on your guidance for recycling and renewable boards on the one hand and alloys and specialties on the other hand. So there was traditionally an EUR 80 million-EUR 85 million guidance for R&R. Is this figure still achievable despite the miss that we saw last year? Should we expect a first contribution there from the diversification activities like bio-oil, biochar? And regarding A&S, so there was a EUR 100 million EBITDA guidance. You add to that a EUR 60 million contribution from Universal, and then there's the first synergies flowing in of around EUR 9 million. So does this figure add up to lead to something above EUR 160 million? Yes. So basically, we expect this to be pretty much in line. There is a ramp-up over the year of 2026 with the alloys business. But overall, we expect by the end of the year to be basically at this level. In particular, as you know, oil and gas has been a little bit under pressure. There is also Boeing that is ramping back during 2026. So your numbers are fully right by the end of the year. For R&R also? R&R is at stable levels, Maxime. So alloys should reach that run rate, which you said, like Nicolas, for the last quarter. That's our view currently looking at oil and gas and Boeing. And R&R is at the stable numbers you've mentioned. Okay. So I turn back. Thank you. The next question comes from the line of Inigo Castellanos from Kepler Cheuvreux. Please go ahead. Hello. Good afternoon. Thanks for taking my questions, guys. So I have three on my side. The first one is a clarification on the CapEx. You mentioned CapEx for 2026 is going to be around EUR 200 million. And then in the presentation and during your podcast, you are talking about some additional site upgrade CapEx of EUR 160 million over three years, if I am right. So can you explain a bit? I guess that this EUR 160 million in three years is included in the EUR 200 million figure for 2026. And can we assume that this is going to be, I mean, EUR 200 million in the following years as well? This is the first question. Thank you. Yes. So EUR 160 million are absolutely integrated in the EUR 200 million. As you know, our continuity CapEx is around, let's say, EUR 150 million. So after you have those EUR 160 million over the next three years, so plus minus in 2027, 2028, you can count around a similar level of CapEx if there are no new growth opportunities. Okay. Thank you. My second question is on the outlook you are giving for Q1 2026. You are mentioning in the press release that EBITDA in Q1 would be higher than in Q4. But also during the podcast, you gave some more indications regarding a EUR 100 million quarterly run rate EBITDA in the first semester. But I understood slowing in Q1 and accelerating in Q2. Can you please elaborate a bit on that sequential number? And also in addition to this, how do you see the consensus EBITDA number for 2026, which according to Bloomberg is around EUR 520 million EBITDA? Thank you. So Inigo, on the question, right, Q1, I think we have given a consensus it'll be higher. But we also said that we are confident enough based on our Leadership Journey contributions to give that for the first half of the year, it will be EUR 100 million run rate. And we said it will happen in two steps. So I think it gives you clearly a kind of an indication how these two steps happen because we said we'll start slowly, and we actually ramp up in the second quarter. So I think that gives enough guidance on how you plot these numbers from one quarter to another. On your question for the annual year, see, unfortunately, we have just discussed that there are so many variables also on H2. And our order books, as you know, are typically two and a half months long. Compared to other places in the industry, you have to consider that Aperam's stainless business in Europe's order book is considerably shorter because we run our own distribution division. As a result, we would like to give outlook only for Q1, right? The fact that we are doing for Q2 this time is primarily because we know that seasonally Brazil will come back, and we know the contribution of our Leadership Journey. And that's the reason we are giving some color on Q2. Sorry about not being able to guide for the year. No. No problem. Thank you. Very clear, the answer to the question. Thank you. And just a final question on my side. On the European Union trade defense protection measures, you are mentioning again that you expect the application to start July 2026. I don't know if you can elaborate a bit where do we stand? Why is taking, I would say, longer than expected, although you were pointing to that July as the application date. But where do we stand? Are we expecting for any European Parliament meeting to take a final decision? Any color would be much appreciated. Thank you. First of all, thank you, Inigo, for acknowledging that from the beginning, we have always said it's going to be most probably 1st of July. Our message hasn't changed. This application has to pass through three bodies. One is the European Council. The other one is the INTA. And the third one is the European Parliament. This is a process. Each of them make their own proposal, and they have to start a process to discuss among themselves to come to a common proposal. The good news is that everything is proceeding on plan for a 1st of July introduction, meaning the European Council and the INTA have made their proposal and have started discussions. We expect around the third week of February for the European Parliament also to start this discussion and see what their version of the proposal could be. And after that, it is going to take them time to talk among themselves. It is important to remember this whole process has been triggered because the previous safeguards expire on the 30th of June. So legally, the European Commission always pointed out that the earliest it could start or sorry, the latest it could start is 1st of July. And now I think they are going to respect that deadline. Cool. Thank you. Very clear. Thank you. Thanks. As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from the line of Adahna Ekoku from Morgan Stanley. Please go ahead. Hi. Good afternoon. Thank you for taking my questions. I've got one left. On the normalized EBITDA guidance, so this is EUR 700 million-EUR 800 million. I believe previously, this was EUR 800 million before Universal. So could you just run through what's changed here and if you could go through the kind of key building blocks of this bridge? That'll be really helpful. Thank you. Hi, Adahna. Sure. I think let's start with EUR 350 million for 2025. And then when we add the EUR 150 million new Leadership Journey guidance you have given, without any trade defense and CBAM support, this EUR 150 million includes the EUR 500 million just on Aperam's own first. Secondly, the synergies of Universal are included in the EUR 150 million as well. So this is something to keep in mind, right? From EUR 500 million, you see that we have announced new investments, and we do expect another EUR 50 million additional EBITDA improvement from the investments we have announced. But this should happen ramping up in 2028, but the full effect in 2029 visible, so to speak. So it's P ost-Leadership Journey 5. And the delta then from the EUR 550 million to the EUR 750 million is basically utilization improvement in Europe plus support from trade defense measures. What you are seeing now as a range from EUR 700 million-EUR 800 million to the previous EUR 800 million is the difference is basically if CBAM is going to be immediately effective or is there going to be a ramp-up. That is the delta of the EUR 50 million-EUR 75 million which you're looking at. Is that bridge clear, or should I? No, that was very clear. Thank you. The next question comes from the line of Tommaso Castello from Jefferies. Please go ahead. Hello. Good afternoon, and thanks for taking my questions. I have two left. The first one is on Brazil, which obviously performed better than last year at EUR 75 million EBITDA. Should we consider that as a normalized run rate also for 2026 onwards? Yes. It will be a normalized low cycle for Brazil for next year. Yes. Okay. And then the last one is on. And also just. Yes. I'm sorry. Just keep in mind that in 2024, it was exceptionally low because we had a hot strip mill investment. And as a result, there were, for the first half of the year, losses in EBITDA. So the 75 is at the low end of the cycle, like Nicolas said. Yeah. Yeah. No. Definitely. Thanks for that. Then the last one. I know it's probably hard to estimate, but for example, carbon steel, we have some estimates on the potential impact of the new trade measures, basically cutting around 10 million tons of steel from being imported into Europe. Now, the stainless-steel market is already smaller, but I was wondering if you had any estimates on how much the new trade measure could impact in terms of percentage of, yeah, the volumes basically being shipped to Europe. So this is what we said earlier also, which was that we expect a 7%-10% jump in utilization. So depending on what you take the stainless market and demand at, that gives you an estimate of the number. So it's a 7%-10% jump in utilization. Okay. Thank you very much. Yeah. The next question comes from the line of Lucian Cawthron from CapeView Capital. Please go ahead. Hi. Can you hear me? Yes, Lucian. Loud and clear. Hey, Sud. Congrats on the results. Just going back to Adahna's question. So if the normalized EBITDA was previously the target was EUR 800 million, you've got Universal on top, which should kind of add, let's say, EUR 90 million-EUR 100 million. So you get to EUR 900 million. So why is that now actually stepping back to EUR 700 million-EUR 800 million, especially considering safeguard measures that are going to be coming in, which should obviously be a further boost on top of that previous range? Absolutely. So Adrian, and I think we have to understand, in the past when we have discussed, we said that the margin in Europe in 2025, for example, thanks to imports or rather no thanks to imports and the dumping, is EUR 300 per ton below the previous average, right? And our assumption, and that's the reason I split out what we can do on our own. And if you say the entire EUR 300 per ton on the margin comes back, then we are back to that EUR 800 discussion. That is the reason I say EUR 500 on our own, EUR 50 million due to the investments announced. It's EUR 550. And then it's up to trade defense measures and CBAM. So the delta to the previous EUR 800 you're looking for is our 2025 margin being EUR 300 per ton below compared to previous averages. I think this is the official discussion we've had before as well, that the low cycle has been EUR 300. How much of this recovered? So it's not a change in the results. It's basically when we say EUR 500 on our own because of the different business model, EUR 50 million due to the additional investments. And then based on CBAM and trade defense, are we going to recover the entire EUR 300, or part of it is the delta to the number? Got it. So yeah, you're just setting the floor lower, which is good. Hopefully, there's upside to that. Exactly. So if you say that entire EUR 300 is coming, an additional trade defense, but those are theoretical discussions. And we wanted to just be clear what's our performance and what is expected from the market. Yeah. Perfect. Thank you very much. The next question comes from the line of Bastian Synagowitz from Deutsche Bank. Please go ahead. Yeah. Hi. Good afternoon. Thanks for taking my question. So a few quick ones maybe. Just getting back to the European market. So I guess just coming back to the point you said, so you're saying that you're not seeing any abnormal demand or nothing extraordinary in your order book. But then I guess when we look at the quarter drawdown, it has come down significantly in the first couple of weeks of 2026 as it should do as a result of CBAM. So just curious, do you read this as well as customers are currently really heavily absorbing their inventory? Is this what's currently happening? That's my first question. Look, customers are drawing down on the inventory not because of their regular inventory being drawn down, because in Q4, as you know, there's been a significant surge. So there's a lot of inventory in the system. Okay. But basically, your read is as well that if the, I guess, quarter drawdown is slower, demand doesn't really show up in your order book extraordinarily, then it must be a much more significant drawdown of that extra inventory, right? Because the market share from quarters. Sorry. You are correct. But fundamentally, there's two comments to that. One is the fact that realistically speaking, based on two weeks, you cannot estimate the entire quarter drawdown discussion. I hope you understand. And the second thing is that, yes, with the deliberate intention of consuming those inventories in this quarter is why importers have brought in all these inventories in Q4. So we do see that demand drawdown happening from inventories. Okay. Great. Thanks. Thanks, Sud. Then just also getting back on CBAM, so I'm wondering, where do you see the average CO2 footprint in the current import mix, the way you judge it, versus particularly also the most efficient CO2-efficient sources of supply which you now have on the import side? I'm pretty sure you've done the math. So maybe you could give us your views on how you see the battlefield there at the moment and how it's been impacted by CBAM. The battlefield is exactly as it's been defined by the Commission's default values. If you look at it, the Commission's default values on carbon dioxide emissions from different countries are basically at the levels which we expected them to be. The one thing is, of course, there is some circumvention because some of these countries probably using metal from Indonesia. That is something I'm sure that the Commission will continue to monitor. But the default values basically set the exact map of how we see the different carbon footprints of the different countries are. Okay. Great. And then maybe a very last question on the next chapter of your Leadership Journey and I guess the new investments, which from my understanding are mostly tech to Europe. And Europe for the last couple of years, obviously, has not been a great ROI place as maybe when it comes to different options. So are these investments still under the condition that I guess everything is really panning out the way we hope it to pan out, or are they basically no-regret moves, and you will go ahead with those independently from whatever is happening? I would say that fundamentally, you have to look at it in two different directions. One is that 2/3 of these investments are diversification into specialties in alloys and stainless specialties. And another one-third is into automation and putting in new lines with higher productivity and higher efficiency. So if you look at it, if the demand picks up and the cycle comes back, these lines will be used or the one with higher productivity will be used to serve the upside structurally. If the demand goes in low cycle - we are a cyclical business primarily in stainless - then we have the most efficient lines running. And you do know that we have a track record of variabilizing our costs depending on the demand. So that's the reason. In a sense, yes, these are measures which are required because we want to move primarily into specialties in stainless and alloys. But at the same time, we take the opportunity to put in modern lines. One primary principle of this, and we've mentioned this in the podcast, is that we want to push the technology to make sure we are best in class and do not fall prey to the same thing which some other industries in Europe have fallen prey to. We want to be out there competing with the most modern lines being built in Asia and to take productivity gains in low cycles and upsides in high cycles. Okay. Great. Thanks for clarifying. Ladies and gentlemen, that was the last question. I will now like to turn the conference back over to Sud Sivaji for any closing remarks. So thank you for joining the call, everyone. It was a pleasure answering your questions. As you know, Nicolas and I with the investor relations team will be on the road over the next couple of weeks meeting a lot of you. For us, a very eventful and exciting year has just begun. We look forward to talking to all of you in 2026. As we say in Düsseldorf, have a fantastic carnival season. We hope to talk to you soon. Thank you. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call. Thank you for participating in the conference. You may now disconnect your line. Goodbye.