Ladies and gentlemen, welcome to the Aperam First Quarter 2026 Results conference call. I'm Vicky, 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 then 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. Hi. Good afternoon. Thank you very much for joining our conference call today. All our comments were contained in the podcast that we published this morning, which, you know, supports our quarterly financial reporting, and where applicable, our disclosure of regulated information. We hope we can also save more time, you can ask pertinent questions during this call. Together with my colleague, Nicolas Changeur, I'm looking forward to this dialogue with you. Let's start right away with the Q&A. Operator, can you please open the lines? Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. If you wish to remove yourself from the question queue, you may press star and two. We will take the first question from Tristan Gresser, BNP Paribas. Please go ahead. Yes. Hi. Thank you for taking my questions. The first one is on Stainless Europe. We've seen U.S. stainless price rising close to EUR 600 per ton since Q4. Scrap prices are also up, maybe EUR 400 per ton. It looks like you have a solid spread expansion year to date. In your guidance, I've been surprised you don't mention any price cost effects into Q2. Maybe can you discuss the other elements of your cost base and if we should expect a positive cost effect in Q2 for Stainless & Electrical Steel? Hey, Tristan, let me start with, then Nicolas can answer the spread question, right? The one thing you do see is obviously these two factors, but the second thing is obviously what we have clearly guided to, which is also valuation effects, right? You have to understand that we do talk about the root cause of this, rather than the effects. The root cause, we have clearly mentioned in our podcast and everywhere else, is the utilization improvement in the European business, right? We clearly guide to that, and in the past, we have always been very explicit on the fact, what happens when utilization goes up. We thought it was obvious, but Nicolas, go ahead. Tristan, first, of course, price and raw material are increasing, as you know, we benefit especially from our Services & Solutions division, in which we have a short order book, and we are able to get benefits in terms of price versus cost in our account. The second point maybe I can tell you is about the valuation. We expect a low double-digit valuation effect in Q2, and we have the same in Q1. Second question is a bit on, on the market situation again, in Europe. I think you talked pretty positively about the import situation and also inventories being low and some restocking actually taking place. Do you see any risk of an import surge before the July quota implementation? I think you mentioned short-term demand effects for your distribution arm. Just wanted to clarify that because I would have thought that market share gains versus imports would be more structural, or was that just a near-term restocking? There are two equations, right, Tristan? One's the fact that we do have to keep in mind that we cannot treat Q1 isolated. Remember the above average surge in imports in Q4. Also trying to avoid CBAM which came in, right? This stock is in the inventory. The second thing is we also are very clear that there's no underlying demand improvement, and that's the reason we see this short-term demand improvement in our distribution business. That's, we typically tend to qualify structural demand as a improvement in underlying demand. However, the imports being reduced, and we've seen the Q1 run rates have increased more opportunities for supply for us. Yes, there is a clear increase in utilization, at the stainless mills in Europe because of this improvement in supply opportunities just because imports are already at the run rate post-safeguard. Your first question about, is there any risk in the next two and a half months? Let's say traditionally, supply chain-wise, we have needed at least three and a half to four months for imports to come from Asia to Europe. Since we are within that timeframe, I think we can say with some comfort that additional imports during this timeframe, we do not see much of that happening. All right. That's very clear. Thank you. The next question from Adahna Ekoku, Morgan Stanley. Please go ahead. Hi Sud and Nicolas. Thank you for taking my questions. I've got two on alloys. First, on the whole business, we saw a quarter-over-quarter margin improvement. Should we expect another step up here from this kind of 10% level, looking ahead, given the maintenance costs in Q1, or is there anything on the mixed flag? Second, on Universal, I think you guided previously that the year one synergy should start showing from 2026. I believe these are EUR 9 million for this year. Could you just give a quick update on how this is progressing so far? On quarter-on-quarter, I think we are at the mix which we expect for H1, Adahna. For Q2, there should not be a significant mix difference, so to speak. The maintenance charges falling away may have, I would say, a very low single-digit million EUR impact, but that's not going to be material in the Aperam scheme of things for alloys from Q1 to Q2. The margin improvement you see from Q4 to Q1 indeed is because of mix improving into Q1. Going forward, that should be the mix until we see a Boeing structural parts demand pickup, which we expect probably towards the second half of this year at this point in time. On your second question, which was about our synergies, yes, they are ramping up as planned, and that is included in our guidance. The way we look at it is that we have guided to $30 million and about this EUR 9 million pickup that should happen through the course of this year. Perfect. That's super clear. Thank you. The next question from Maxime Kogge, ODDO BHF. Please go ahead. Good afternoon. First question is on Recycling & Renewables. I was wondering how sensitive the division was to higher scrap prices. Is the division set mostly to gain from higher volumes in the quarters ahead? Is it also exposed to higher prices? In my understanding, it was set to generate a relatively fixed EBITDA per ton, irrespective of market conditions. Any color on these topics would be helpful. Maxime, there are two parts to Recycling & Renewables. You're absolutely right. Your memory serves you right. It is a fixed margin. However, there is a volume effect, and when scrap demand goes up, that volume effect plays in. Secondly, there's a valuation effect because, you know, most of our net debt is purely the networking capital of recycling. There is an impact on that as well. Today in the podcast, we've been very clear. I think Nicolas presented that recycling is an improvement between valuation effect and the volume effect. Yes, exactly. On top, we see that all the actions we are doing to improve structurally also our scrapyard is working. You see that in recycling benefits and also in the successful start of our Leadership Journey. Okay. Thanks. Second question is on working capital. There was a strong performance in that respect in Q1, despite the seasonal build-up. The guidance for Q2 looks also encouraging. I'm wondering if there could be a scenario where this year in 2026, you have a strong increase in volumes, in prices, and at the same time, a contained working cap outflow unlike previous upcycles. That would, of course, be very positive to free cash flow. You remember that we have significantly improved our working capital last year. This is a structural improvement based on all the synergies that we have and that we have developed inside our value chain. The seasonal, slight seasonal increase that you see in our working capital is a reflection of that. If your question is on the delivery edge, I can very much confirm to you that we are on track, and we will deliver the delivery as we have guided. Okay. Just the last one is on the guidance. Now you're guiding to EUR 700 million-EUR 800 million already for 2028. Can you clarify whether that includes already the benefits from the CapEx initiatives that you announced in the latest quarterly result? I think there are some initiatives also ongoing ramping up on Recycling & Renewables by the end of the decade. In other words, could we expect a further step up here when those initiatives kick in after 2028 to perhaps close to EUR 1 billion or above? Max, this is an important question, because we always invest for the next cycle. This is something which I want to make very clear, and we will talk about this in our roadshows and probably even in fall when we get together to talk about our performance. Aperam always invest for the next cycle. What that means is that all the Leadership Journey Phase 6: Gains, which we have planned and announced to the market, the EUR 150 million. A significant part of that, close to 90% of that, is coming from investments made in the previous cycle. The investments we are currently announcing, the ones we announced last quarter and the ones we are announcing right now, except when specifically mentioned, and Nicolas presented this morning two short-term investments which may come down on board much shorter. It's always for the next cycle. Like for like, they should lift the EBITDA of Aperam. You know our principle, the Leadership Journey Gains are like for like, same macro environment, same raw material prices and improvement to EBITDA. About this announced EUR 700 million-EUR 800 million EBITDA figure beyond 2028. Yes. All right. Thank you. As a reminder, if you wish to register for questions, please press star and one on your telephone. Star and one. The next question from Bastian Synagowitz, Deutsche Bank. Please go ahead. Yeah, good afternoon, and thanks for taking my question. I've got a couple, maybe firstly coming back on Tristan's question and particularly the spread side of things here. Could you let us know whether you think that we are now on track towards mid-cycle spreads in Europe already? And is there any timeframe which you think within which you think we will hit those? That would be my first question. Yes. Today what we see is that we have achieved, let's say, 20% to 25% of what we have guided in term of the potential margin improvement in Europe. We spoke about EUR 200 per ton spread, if you remember? Okay. 20%, 25% is achieved. There is still some potential. Understood. Okay. Next one would be on the situation around the Indonesian mining regulation and maybe also sulfuric acid. We've seen nickel prices going up, Chinese prices are going up. What does this mean for you in both stainless and the alloys business? For the alloys business, I'll start directly because there we have all our nickel requirements at, you know, pure nickel, so to speak, and even purer than battery nickel, if I can say that. There we are completely hedged. All these contracts are based on LME. In that case, it is a passthrough for us in terms of costs. These are high value materials. We are talking about average revenue or average cost of 1 ton of such materials above $50,000 for 1 ton. 20 x the price of stainless steel, right? When it comes to stainless, short term, there is a limited impact because we are talking about scrap, and that is raw material prices. Midterm, there is an impact because the raw material prices of our competitors go up, right? Which is Asian competitors who do look at all this Indonesian raw material, either in the form of slabs or NPI as their raw material, and that has an impact. If this continues, obviously it lifts up also the scrap prices everywhere. It is for us, you know, a shift, a delta shift. We have to monitor this carefully because the Indonesian government obviously is doing this based on quota system and based on needs. Underlying for us at this point in time, we do not see any paucity or scarcity of nickel. Okay. Understood. Got you. Very last question on volumes. Could you maybe give us some guidance on the quantum of the volume step up which you expect in the second quarter, even if just a range? Tristan, I think. Sorry, Bastian, I think, we have our SNS business, as Nicolas explained, and that is where we always see the upsides in short-term improvements. There, the order books, as you know, are 1 to 1.5 months. We cannot give a volume guidance directly on the impact for the entire European supply chain. What we can see is that fundamentally, we said once the safeguards are implemented, depending on the player inside Europe, there should be a 7%-10% utilization lift. We are well on way to that. Mm-hmm. Okay. Understood. Thank you so much. This is H2, right? That's what we said. Yeah. Yeah, got you. Mm-hmm. Okay. Thank you. The next question from Krishan Agarwal, Citigroup. Please go ahead. Hi. Hi, Sud. My question is sort of a follow-up from what Bastian was asking on the volume uplift, and you sort of partially answered that. If I were to, you know, run some numbers around it, like potential sort of a 1 million ton of, you know, stainless volume improvement purely from a lower imports into Europe. How much of the market share gain, you probably are looking at over the next, say, two years and not on a quarterly basis. At this point in time, Krishan, firstly, we said the 17% reduction net, so to speak, for stainless. If you took a year, let's the average of the years before, about 900,000-920,000 tons of imports, hot rolled and cold rolled combined, there would be a reduction of 300,000-400,000 tons, is what we said. Just to be very clear, we're not talking 1 million tons. After that, there is the market share of every participant, and our base case is that every participant takes their market share. There's enough capacity in European Union, because we all operate electric arc furnaces, and in the past years, we have suffered close to a 20% utilization drop because of the poor demand. We can all absorb these volumes, and that's the reason I said, depending on where you are, what is your product base, there's a 7%-10% utilization lift, and that you can model for each and every player. Understand. I mean, you used to give a chart on the inventory, system inventory, which I don't find in the presentation this time around. You said that distributor restocking is starting. Is it fair to assume that, okay, the inventory deluge which we saw in the second half of last year has sort of been digested and then price increases are more sustainable? The restocking basically has started because in Q4, we've saw an extra inventory come in because of imports, right? Because you see Q1 import levels are already at the safeguard run rate, there is a need for slight restocking, and that's the reason we see that there is this slight restocking effect. Very clear. Thanks a lot. We have a follow-up question from Tristan Gresser, BNP. Please go ahead. Yes, hi. Just, yeah, now it's my turn to come back to Bastian. A question on the spread. When you said you've achieved 20%-25% of potential spread expansion in Europe, that's on reported Q1 or on spot? If it's not on spot, is it, what would it be on spot? No, it's on Q2 and forward on spot, not on Q1. Okay, that's clear. On energy costs, what was the energy cost in Q1, so we can bridge into Q2 when you provided guidance of high single-digit? No. There is zero impact in Q1 of any energy shock linked with the Iran War conflict. Okay. All right. That's clear. Which will come into next quarter. Okay. Last question now on CBAM. Now we have one quarter in, and previously you were a bit cautious on CBAM, but now imports have reset lower. You also mentioned the market is adjusted to already now to the new reality. Does that mean that you think it's everything is already kinda priced in terms of price effect, and it's just about volume into H2? If Q1, you already kinda have a good decent run rates of imports, does the melt and pour that I think previously was very much needed and discussed, is that that important? If you can discuss that as well. Thank you. Tristan, that's unfair because you've discussed four questions in one, but I will take that. It's an important discussion because we have to keep in mind, firstly, what we are saying is that we see the first signs of the uplift. Secondly, we see that the safeguard level imports have already started, meaning that Q1 already shows that importers are looking at safeguard levels. Third one, on CBAM, we have to see the net effect because, as you know, the registrations are starting this year, and there is a ramp up. We believe that the net effect is, and we have always been guiding to the market, the net effect is going to be more a midterm feature and not immediately in this year. That is how we see it even now. To your question, is all price effects priced in or volume effects priced in? There are two parts to the discussion. One is that to volumes, to Krishan's question, I've answered saying that on utilization we see the ramp up towards the utilization improvement. In H2 is when we will be hitting that utilization improvement fully on the missing imports. However, there is a single important factor to all these price and discussions on the different effects. That factor is this is happening in Europe where underlying demand is flat at a very low level. We are not talking flat in terms of past average. We are talking 20% below past average. As you've looked through and walked through each of our divisions, specifically if you look at Stainless Europe and SNS, there has been a clear message from Nicolas this morning saying that there is no demand trigger anywhere. That is something which we have to keep in mind because most of these discussions center around which is the highest marginal cost on import, and that will be tested only when demand picks up. Okay. What I'm saying is the current scenario is purely a supply side fair competition, and as a result, utilization going up. All right. That is clear. Thank you. This was the last question. I would like to turn the conference back over to Mr. Sivaji for any closing remarks. Thank you. Good afternoon again, and thank you for joining the call and asking your questions. Thank you for your participation and your continued support. For us, 2026 is already shaping up to be a watershed year for Aperam in our transformation. We look forward to talking to you over the next days and weeks, and as always, our investor relations team is available to connect with you and address any further inquiries. Please do not hesitate to reach out to us. Have a fantastic spring, and we hope to talk to you all soon. Take care. 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.