Acerinox Aktie

Good morning, everyone, and welcome to the Acerinox First Quarter 2026 Results Presentation. As you well know, the global landscape is defined by numerous uncertainties, including regional conflicts and ongoing tariff wars. The results obtained in Q1 2026 confirmed that the situation is improving despite the continued uncertainty.

For this presentation, we have here with us, our Chief Corporate Officer, Miguel Ferrandis; our Chief Financial Officer, Esther Camos; and the IR Communication, Consolidation and Reporting Director, Carlos Lora-Tamayo, who will explain our Q1 results.

Before we start with our presentation, let me remind you that this conference call is being broadcast on our website, acerinox.com. And now I will hand you over to our Chief Corporate Officer, Miguel. Go ahead, please.

Thank you, Borja. Thank you all of you for attending this presentation. Just 10 weeks ago, we were presenting the year 2025 figures. We define year '25 as the year of uncertainty. And we were hoping that the year '26 should provide us a much more comfortable scenario. But having said that, the day after our results presentation started the conflict in Iran. So since that time, we are keeping the uncertainty. In addition, we have energy crisis and substantial higher volatility than the one we were experiencing at that time. So now the whole world is in tension. But having said that, we have been honoring our commitment, honoring our word, and we are bringing today an improvement in our quarter figures, improvement in sales of around 6%.

What's relevant is the improvement in the melting production that has been growing 22% quarter-on-quarter. And as a consequence of all of this also, improvement in the adjusted EBITDA growing to EUR 119 million, which is an 18% growth compared with that of the fourth quarter last year. The discipline that we are benefiting in the working capital allows us that even though this increase in volumes of 22%, the operating cash flow has been positive in this first quarter of the year because the working capital increase has been only EUR 47 million. So this area is also under control. And thanks to all of this, in this first quarter of higher volumes of dividend payment, as well as huge CapEx expenditures in the coming investments of EUR 73 million, but our net financial debt has only increased around EUR 100 million. So we are also satisfied about that.

It's not by coincidence that we have chosen today for the image, the Artemis II launching and leaving the ground. All the world has been excited following this in the last month of April. In our case, you know that we are growing and investing in the aerospace. Haynes has been present since the starting of the Apollo projects in every mission on NASA. And consequently, for us it is obviously part of our pride and part of our commitment, and also showing that we are in the process of taking off. So we are leaving the ground. The success, obviously, is not the launch of the rocket. The success is the completion of the mission, but we are on track, and this is the idea we want to give today. We are leaving the ground.

If we go market per market, let's start by the most relevant market for us and the best performer, which obviously is the stainless market in the States. The market remains solid and being solid, is a fact for being more than satisfied, keeping on mind that the demand year-on-year has going down 11%. So in the current environment, not a single customer now gets comforted in making investment decisions or expanding their activities and so on. So demand remains low. The demand is obviously affected by all these circumstances. But having said that, the market remains robust.

Fortunately, the effective American administration measures are in place. The Section 232 is protecting the local steel production. The tariffs remains at 50%. There are no quotas per country. There is no exclusion, and is being prioritized the melt and pour. So this is having its proper effect in the consistency in the market, which gives stability to customers, to producers, to distributors. And in addition of all of these, the imports are going down and the imports have get down in America 33% and currently represent a 21% of the total market. So the playing field is correct, even though the challenges and the uncertainties, but at least the playing field is correct in order that we can keep consistency performing in that market, which, as I said before, is a proper frame for all the stakeholders that participate in the stainless steel market industry.

When we go to Europe, the situation is improving, but still is different. The market sentiment now is better in Europe. The market, still the demand is down on a year-on-year basis, the demand is down at 7%, but there is a better market sentiment. At the end, after, after obviously all the commercial trade crisis that we are experiencing everywhere, finally, the European Union has taken effective measures. There are new more relevant measures coming on and shall be on place on the first of July with quotas per countries with increase of the duties from 25% to 50%, no country exclusions. And this shall finally provide probably more protection against unfair imports in the European market, and this shall be by far benefiting the industry. This is to be on place in the first of July.

Normally, the months prior to the entrance of these measures, are driven by the imports willing to land in Europe prior to the measures being implemented. But this, fortunately, is not taking place this year. Why? Because since the first of January, the CBAM is in place. And consequently, with the CBAM, we obtained the compensation for all the efforts in the carbonization that the European players are making. So with these measures on place since the very beginning of the year, we have obtained that the imports also have remained under control. And we have reached a current market share of the imports around 14%, which is still slightly above the level that the European Union want to establish for the imports, roughly speaking, around 13%.

So what at least we have is that with this more consistent and effective protection, we have also a proper playfield. Combined with the fact that the distributors or the stocks at the distributors are below the average. We have the proper playing field for whenever the demand reacts, we shall be in the better position for taking advantage of the market recovery. But still, this is to come because as we have seen before, still the demand in Europe is not reacting properly.

Although for a proper understanding of the differences between the market in Europe and America, we want to present this chart in which we are showing the effects in the prices of the stainless steel of the circumstance that we are mentioning. This is the summary of why we are trusting and investing more in the North American market than in European one. Historically, it's a consistent gap between prices in America and in Europe. Normally, prices in America are $300 to $400 above those prices that we experienced in the European market. But more relevant than that gap in final prices is the differences in the base price.

In the chart, you can realize how relevant is obviously, the extra alloy surcharge which is the green part of the chart, which is the pass-through of the nickel. This structure the of price divided in base price plus extra alloys is effectively working in the States, and is benefiting the market, but the situation in Europe is that after the rally of the imports in the last year reaching 30% or 35% of the European market. The pass-through has not been so effective. As a consequence of that, still certain part of our final products is more driven by effective transaction prices. So the extra alloy is not working so efficiently.

And then what's also more relevant is the effect in the [ base ] price. And in that regard, you can appreciate the difference in the stable frame we have in America, in which more or less is obviously with its ups and downs, but the situation is healthy by all the stakeholders, customers, distributors, producers. Combined with the rolling caster that we have in Europe in the year '23, in 4 months, we passed from the highest base prices ever achieved in Europe, to the lowest prices ever achieved in Europe also. It's very difficult to keep a consistent performance and positive profit margins in the market with these ups and downs. And still, 2 or 3 years later of that crisis, we have not recovered the average of the prices that has been the driver of this period of the last 10 years. So still, we are substantially below the average prices.

Consequently, it's not simple to become being yet optimistic regarding the prices with measures in place, we shall be able to increase prices in Europe, but for being substantially profitable, clearly, we also need a reactivation of demand.

Having said that, the differences between the American and the European are so obvious. And this is the reason why we are clearly expanding in North America in the first quarter of this year '26. We have put in place all the investment program in North American Stainless of EUR 249 million. And with this, we are growing our cold rolled capacities in America in terms of 20%. This is the reason why we are trusting and investing more in America than in Europe.

If we move to the high-performance alloys market, for us is also, the time to restress again that our main virtue and our main strategy is the diversification. For getting less exposed to a single market, we diversified in the stainless between America and in Europe, but also for not getting only exposed to the stainless, we have been in the last 5 years growing and investing more in the high-performance alloys. We start investing in the high-performance alloys, which also is a cyclical market but it's a complementary market to the traditional stainless one. But once we invested in growing in the HPA through VDM, mostly for having a relevant presence in sectors such as oil and gas or chemical process, we decide also to invest in America and especially investing in the aerospace.

How are now the cycles for the HPA? First of all, the recovery that we are seeing in the stainless, and we are seeing a lot of recovery, as mentioned, still is not there in the HPA. Probably, the valley of the cycle that we were commenting we pass through in the fourth quarter for the stainless, the tough part of the market in the HPA probably is the one in which we are currently involved, mostly the first quarter 2026. So the valley of the HPA is the one that has been taking place in this year because we have a combination of facts.

If we start by our European HPA, what we are seeing is that in the low part of the cycle of the oil and gas or of the chemical process industries. In addition, now we have the energy crisis and all the uncertainties that the tensions in Iran and the tensions are still not solved in Ukraine with additional tensions around Venezuela and so on. Always the tensions are taking place, and the hotspots now are in the markets more energy-related, which are all of this. And this is creating that there is now a single new decision of investing there taking place. So we have the low part of the cycle, combined with no signs yet of recovery because of the war on place and the tensions taking place there.

We are confident that any time in the future, whenever the situation is stabilized, there shall be more necessities to investing in the construction of all the facilities that have been damaged, but this still is not coming. This probably shall provide a better scope for our presence in the oil and gas industry for the coming 2 years, but this is going to be difficult to experience in this year. This is the main driver why the contribution of the HPA in Europe is being low at this part of the cycle.

But with the diversification, we also, as explained before, having willing to expand not only in other countries, mostly in America, but also in other sectors, such as the aerospace and the industrial gas turbine. The industrial gas turbine is doing fabulous performance. They're driven mostly by the data centers, but the lead times in -- for the industrial gas turbines have moved from 26 weeks to a level of 60 weeks. So this is a sector in which we have a guarantee for a proper performing in the future.

And then in the aerospace sector, where we are investing more for growing and especially for growing more in the long products, you know that Haynes is more focused on the flat products, and we are also with the new investments, with a rotary forge, with the VIM furnace, we are growing also in the long products. The recovery started earlier in the long products.

At the end for the aircraft engines construction, the first part is the rotating part, which is mostly covered by the long product players directly through the mill orders. And the shortage in the supply chain on that sector created there has been an anticipation of orders for warranty or taking warranty of all those components. So because of that, the recovery started some months ago. And finally, the recovery has come to the flat product, which is the second part in the construction of the aircraft engines, which is the case -- the engine cases. And this now is coming. We are -- at this regard, highly satisfied by the strong increase in the order book that came in the month of March.

And in the month of April, Haynes has experienced its best order book entries ever in its history. So this is a clear demonstration of the improvements in this sector. This is something due to the lead times that should materialize in higher profitability for the second part of the year because at the end, we are obviously contemplating lead times of 6 to 8 months. So the recovery is there. Our order book is full. The production figures are growing, and this shall materialize in better profits in the second semester.

Okay. Now let's move to the effects of the Iran conflict has on our business and also in the market. We think that the most important thing that we should highlight is that we haven't had any disruption in our supply chains. Thanks to our geographical situation, we are able to buy the raw material locally, both in the United States, in Europe and also in South Africa. Also, we diversified the origins of our consumables. And with this successful strategy, we haven't had any break in the supply chains. So we think that this is another demonstration of Acerinox operational resilience in such a difficult environment.

Saying this, no doubt that we have some direct impact mainly in the logistics and in our cost base. We quantify this impact in EUR 2 million for the first quarter, mainly related to increase in the gas price in Spain, and also in a less extent, due to the increase in the freight cost for the whole group.

On the other hand, we have some indirect impact in the market, mainly related to the behavior of our customers. At the end of the day, this conflict is creating more uncertainty in the market and delay the recovery in the demand. So we are seeing our customers still in a wait-and-see position.

Maybe the positive note is in the import situation. This logistics and cost impact that we are having also -- this is affecting the importers. At the end of the day, with longer delivery times with increasing the freight cost, all of this is putting more pressure to these imports. And as Miguel mentioned, also joined this with CBAM, imports are moving down in Europe and also in the U.S.

And now I'll give you the floor back to Miguel.

Well, the quarter evolution is a proper explanation of all the things we are mentioning. So we could just explain the huge improvement in the EBITDA figure, EUR 32 million fourth quarter to EUR 95 million. So multiplying per 3x, 200% increase. But what -- this should give us an unfair probably and also untransparent explanation of things that are taking place.

And probably for understanding better, the current situation, let's go to the adjustments in place. At the end of the last year due to the circumstances we mentioned, the valley on the stainless steel market, we make a strong adjustments at the year-end. And we made adjustments reaching the figure of EUR 60 million in inventory write-down.

The range of the adjustments have been substantially reduced. Still, there is necessity of some but substantially reduced. The situation are by far improving compared with that time. But still, we consider convenient to provide some adjustments. Why? We have mentioned it. We have some areas mostly the HPA in Europe in which still the situation is tough and that the demand is very tough and still that market is to recovery and is exposed, obviously, to the current oil and gas.

So the contribution and the margins in the HPA in this first half of the year is not high. So this justifies to make some correction in inventory. And also still the situation in Europe, even though prices are moving up, but still needs certain adjustments because prices are moving up. We have seen some increase in prices during the quarter of around EUR 200 to EUR 300 which is positive. But in the same time, in which also the nickel has been experiencing its rally as a consequence of the volatility in the current days. So nickel has been going up reaching levels of around $19,000 per ton at the London Metal Exchange.

As I said before, it's not so simple yet that the pass-through of the nickel is operative in Europe. Still there are certain orders which are under effective transaction prices or orders previously committed. And as a consequence of that, we also made some adjustments for covering the European sales -- on regarding the inventories that we are having in place for the European sales. The range of the adjustments is substantially below the one we made for the year-end. This is a good demonstration of the recovery of the market, still is necessary some part of it. We hope that gradually, this shall be disappearing. And we hope that we shall be in position in presenting the semester figures for not going to -- not experiencing the necessity of making any adjustments. We are in the track, but let's see what happens from now to the month of July when we shall release the second quarter figures.

So we are now just -- we are presenting our results for the consolidated group. As you have seen, we have presented and we present a higher EBITDA in this quarter despite the uncertainties and the difficult situations. What is true is that despite these geopolitical tensions, the uncertainties and the low demand, what we have been seeing during the quarter is an improvement month by month, and we even see better signs for the second quarter. These better signs are materialized in different factors.

First, there has been a strong reduction of imports, both in the U.S. market and in the European market. The new measures in place, CBAM started first of January. We expect new measures -- new protection measures also in Europe, which will positively -- we expect they positively impact our markets. We have seen an increase in the order books. The alloy surcharge is increasing, and this has a positive effect, especially in our main market, the United States. And we are seeing also some higher prices in Europe and in the United States.

Consequently, our margins have been increasing, and we expect it to increase further in the second quarter. We are also seeing some pockets of recovery in certain sectors, especially gas turbines and aerospace. And with all these, the adjusted EBITDA for this first quarter is EUR 119 million, and the margin in this adjusted EBITDA has increased to 9%. We have also achieved positive and better results in terms of operating result and also the result before taxes.

And one of the things we are more proud about is our operating cash flow. We continue being focused on cash generation. Despite the increase of activity, as you see, our melting production has increased by 22% despite that -- and despite the higher prices of the raw material, our operating cash flow remains positive. And this reflects our strong compromise in keeping the working capital under control. The net financial debt has increased by EUR 100 million, but this is after payment of dividends and the CapEx, as we will also explain later.

Going by divisions and going to the stainless, definitely, stainless has been the profit driver this quarter. The diversification of our business between stainless and high-performance alloys allows us to balance the cycles between these 2 divisions, and thereby achieving a more stable business model.

Production volumes have increased by 22% despite our production has been limited in Europe due to the fire that we have in one of our pickling lines. Now this is completely fixed, and we have again started production in April. The adjusted EBITDA has been of EUR 97 million. And with this adjusted EBITDA, we are returning to the 2 digits margin. We are proud of our operating cash flow positive in both divisions also in stainless and in high-performance alloys as we will see later, due to the strong control of our working capital.

And going to high-performance alloys. Again, we can see that the strategy of diversification in regions and in products within the high-performance alloy divisions has allowed us to compensate the contraction in demand in certain sectors like oil and gas or chemicals, which are most exposed to high investment projects. Two other sectors like aerospace or gas turbines, which are being in a better shape. As Miguel mentioned, the recovery in aerospace in those, in the flat products has been slower than long products, but we can say now that this has stabilized. The supply chain for the flat products has stabilized, and we are seeing a significant increase in the order book. And therefore, we expect this will materialize mostly in the second half of the year, but we will see also some recovery in the second quarter.

Both melting production and sales are higher in the fourth quarter, but fourth quarter is always affected by the seasonality and the adjusted EBITDA has been in this division of EUR 23 million and a reported of EUR 13 million, which has been affected by EUR 10 million of stock adjustment in this division due to the -- mainly in Europe, due to the difficult situation of certain sectors and the lack of demand. And again, I insist on the operating cash flow because this is one of the things we are more proud about, and we have a very strong focus on working capital control.

Let's give you now a bit of color on the cash generation. As we mentioned during this presentation, we are very proud of our operating cash flow. We achieved EUR 34 million of operating cash flow in Q1. Look, with increase in volumes of 22% quarter-on-quarter and with raw material prices going up, we think that is very remarkable that the operating working capital only increased in EUR 47 million. So this demonstrates that we have a very strict control of our working capital. As you may know, we have a 2 years plan, trying to reduce working capital. Last year, we released about EUR 400 million. And as we mentioned, this EUR 47 million of build in Q1 is another demonstration that we are doing things correctly in this sense.

We continue with our CapEx with our expansion programs. You know that we are investing intensively in the U.S., in Haynes, in NAS, and also in Europe in VDM and in a lesser extent in Acerinox Europa and Columbus. So we spent in this quarter EUR 73 million. Now it's not big differences with the previous quarters. And also in January, we paid EUR 77 million on dividends. With all of this, we only increased the net financial debt in EUR 106 million and the net debt started at EUR 1.3 billion.

Okay. And just for conclude the most relevant parts. First of all, we have honored our commitment, and we have demonstrated improvements in our results in a scenario with lack of demand and with high uncertainties and even with energy crisis. So we are proud of that. We are able to deliver our strategy, which each time gets more evident and justified. We have the financial strength. We are long-term runners, and we are able to keep our long-term strategic plan. We are seeing the advantages of bringing new capacity in the North American stainless market, and we are seeing also the evidences and relevance of growing more in the aerospace industry in America and especially in the long product sector.

In addition, we have our unique position. Our diversification of all our facilities all over the Western world allows us to have a strategic autonomy, not so be affected by the current difficulties in the market, especially, for example, by the energy crisis. So we are solving in some areas, the shortages that we are experiencing in the others, and this is obviously justified. And in addition of this, each time the program in place, the Beyond Excellence makes more sense. We are obtaining strong savings on that. And as has been -- as you remember, we explained in the last quarter presentation has been so successful that we have increased to EUR 120 million, the experience savings for the period '25 and '26.

For the next quarter, the outlook still is not so clear. The uncertainties are there. Still some of the conflicts have not been solved, but we can commit ourselves that we shall present better figures in the coming year. The sustained stable prices in America, combined with the gradual recovery in the European market shall allow us to present proper figures. And we consider that keeping this track shall not be necessary to provide relevant adjustments for the second quarter results.

So as a conclusion, we understand that the adjusted EBITDA for the coming quarter should be higher than the one we are presenting today. Thank you very much.

Thank you very much. Now we can start the Q&A session. Operator, please go ahead.

[Operator Instructions] Our first question comes from Francisco Riquel from Alantra.

I have two. My first is on capacity utilization. If you can update on the progression since the beginning of the year, and into this Q2. In Europe, in particular, you mentioned that imports are down 42% year-on-year. I understand safeguard measures will reduce quota volumes by 55%. So how we can uplift in capacity utilization shall we expect from Q2 levels before demand improves? And then my second question is on your comments this week about -- that you are considering a U.S. listing. So you can comment on this when and how?

I take the first question, Paco. Well, the capacity utilization is going up in the different plants of the group. In Spain, in the Spanish plan, keep in mind that what we mentioned during the call, that is our fire in one of our lines in the P4 that this will allow us to increase for the second quarter, the capacity utilization. In the first quarter, we were in the level of 70%, roughly speaking. And we expect to improve this capacity utilization for the second quarter.

In the states, we are in levels of about 80% without taking into account the new line that is already working. And in South Africa, that is where we are now below the rest of the plants. We are in levels of 60%, 65% capacity utilization.

Well, in regard of the U.S. listing, this has been taking place in all the press releases in this week as comments coming from our shareholders' meeting. This is mostly something that appear to be obvious, and this has been commented in the last years. We -- our best performance, obviously, is in the North American market. We are probably leaders of markets in which we have strong relevance. It's clearly the driver of our profitability. It's clearly the driver of our sales. More than 50% of our sales is coming in North America -- and is the market in which clearly the investors high appreciate the steel industry.

This is something that we always have in looking, let's say, jealous for being a European listed company, looking how our American peers are highly valued by the investment community in the States. So there is a consistent gap between the valuation metrics for the steel players in America compared with lower valuation multiples that the European companies are getting listed. So as a consequence of that, getting well better follow valued and understood where the market values more our sector niche is absolutely logical movement.

And as a consequence of that, what we are is obviously making all the analysis for how could it be. And in that basis, it's considered to be studying or starting all the preparation for what could be a potential listing of the American platform of the business. In this regard, when and how? Well, the one is difficult to precise. Obviously, there is a lot of issues involved. But thinking on the way of clearly preparing and combining our different companies for being in position of presenting an American platform to access the American stock market, it's something that has all the rationale, and we are working on that direction.

So this should mean mostly the possibility of making any time in the future, an IPO or partial of that part of the business, but more focused mostly on an IPO for business and obviously keeping and remaining keeping the majority participation of it, whenever it's come. But it's not decided yet when and on the process. Obviously, keep in mind that there is a certain integration of different companies to be done. So this is not something that is going to occur in the short term. But we are in the way of starting the work analysis, the preparation for deciding in a later stage, the convenience and the most convenient time for that.

Our next question comes from Tristan Gresser from BNP Paribas.

Yes. I have a couple. My first one is, can you explain very simplistically the inventory adjustment of EUR 25 million you made in Q1, how you calculate it and if it has a cash impact? I start there, but I have other questions.

Thank you, Tristan. Okay. The way we calculate the inventory is just by comparing the final inventories at the end of the quarter. We compare the cost versus the net realizable value, okay? So this adjustment that we are doing is for inventories that are in our stocks and not yet sold, and that are valued at a higher cost than what we can realize from those inventories. So obviously, there are always some obsoletes and some materials that can be spending.

The important thing there is it's been reduced a lot compared to the fourth quarter, but still, there are markets in which it is necessary to make this kind of adjustment. Of course, it's not a cash -- it doesn't impact the cash because it's only for material that has not been sold. Currently, the EUR 25 million of inventory adjustments that we have is divided between the high-performance alloy division and the stainless division more or less half and half, and is more focused in Europe. Of course, in Europe, as we have explained, the high performance alloy division is lacking of orders in the -- is more exposed to sectors like oil and gas and chemicals in which there is a lack of orders, and therefore, the prices are not in the best moment. So that's why we have needed to make an adjustment there.

And the other part of the adjustment is in the stainless, but as said, it's much less than what it was in the fourth quarter. It doesn't have any cash impact, and it is only to reflect the difference between the sale price and the cost price. The increase on the raw material has also an impact there, but it's much less than what it was.

Okay. That's clear. In the past, if I look like 2022, 2023, I mean, those inventory adjustments that were including in the EBITDA. And I think last year, you started to make them excluding of the EBITDA, but only at Q4. Now you're doing it in Q1. So what change in the reporting? And just trying to really understand what it is, if why is it treated as exceptional? If your cost of raw material increased more than your selling price, that's normally more source of margin squeeze and that's operational. So yes, I'm trying to understand what I'm missing there.

No, nothing is missed. The fact is providing us as much as transparency as possible. The current circumstances are not normal. The effects that are taking place in the market are also not normal. We are facing challenges in different markets as a consequence of 3 years of consecutive negative demand. This is a situation unique. What we tried is that it's better understood, more or less the performance of the market and the metrics of our business.

Consequently, for comparing figures -- for comparing figures quarter 1 with fourth quarter last year. If we were just presenting a 200% increase in EBITDA, we shall probably be creating confusion because the situation has not improved by 200%. The situation has improved around 19% and 20%. And because of that, we are giving some color, the HPA market in Europe for the oil and gas and for the CPI is in bad shape. And consequently, we are having low capacity utilization at our German plants. So obviously, this is having its effect on cost. Relevant sectors for the company are not doing well, and we are conveying the product mix to other sectors, which are not so profitable. And consequently, this also has its impact in margins.

So what we are presenting is more or less this issue as well as what we are presenting is the situation in Europe, which currently, as we explained before, the pass-through of the nickel is not properly working. And in the current situations that we are having in Europe, but still, there are some sectors driven by transaction prices in which the current nickel rally is not so easily to place. We also consider that this is an adjustment that justifies that we report it separately.

So what we want to give is more transparency on Europe, how is the evolution of the business, but also which is the part that we are adjusting in inventories on a quarterly basis. We hope, as I said before, that this should be not needed in the second quarter results presentation because the momentum should be better and the prices also should be moving up. But on the current -- at the current month of March, April, it appeared that this still was convenient. So it's not that change in the policy. It's just to providing you some color of what's taking place in each of our areas and in the market basis.

Okay. All right. Maybe if I can ask a last question on the outlook. I think we were expecting maybe better ASP, so sales divided by melt shop production. I think you mentioned in your prepared remarks, you expect higher ASP in the U.S., but then in the press release, it's stable. So how should we think about the price appreciation in both Europe and the U.S.? And what's the implication then in terms of margins as well into Q2, given you have some cost element there?

We think that we are confident on keeping a stable best price in America. So this is out of question. So the sustained business in America shall remain healthy. We gradually are considering that the situation should be improving on Europe. In addition, we are now solving the fire that we experienced in the European plant last year. So the annealing and pickling line #4 now is on place. So this shall also provide more stability. We had to took over that at certain level, bringing material from South Africa, but this created obviously some overdues and so on. So now the situation is getting normalized.

As I said before, we are seeing improvement in the volumes. And this is more or less the most clear fact that we have for the coming future. The volumes are improving. We are being able in markets driven by the uncertainty and the low demand for taking market share from the imports because now the imports are under control. So this gives to the industry and the local industry possibilities of increasing volumes. That increase in volume should give logical effect on certain increases on prices. But for having an effective increase in prices and trying to get close of the normalized level of prices, what we need is a reactivation of demand. But just with the increase in volumes, the situation should be improved.

So it's going to be improved, but not yet radical. For a radical improve, we need reactivation of demand. After 3 years of contraction, the playing field is well prepared for whenever the demand reactivates, we shall have a quick effect and a proper rally. But still, the demand is not there.

Our next question comes from Bastian Synagowitz from Deutsche Bank.

My first one is also coming back on the inventory impact. And sorry to come back to that. But Miguel, from what you said, there were transaction prices, which had been committed earlier as metal prices went up, which suggests you are barely running with open metal price exposure. Can you confirm that we understood that correctly? And if so, have you now hedged this exposure to manage the risk?

And then also maybe related again to the inventory effect, now again, when we look at the market, a large part of the products you're selling, they have increased significantly in price. Austenitic [indiscernible] 304 has been up as much as 20%. In the normal environment, that's actually been a positive on your inventories and the valuations and some of your peers have also confirmed that they had similar positive effects, which is what you would expect. So can you confirm is the EUR 25 million impact the net impact, which you have incurred? Those are my first questions. So I have 2 more, please. But maybe I'll stop there.

Yes. For the business in Europe, as I said, we have been experiencing certain overdues. We are in the way of reducing our orders which are taking on term basis and this was taking on effective transaction prices. And gradually, we consider that the scope should allow us to be less dependent on effective transaction prices and more focused on more or less the -- going back to the normal formula of the base price plus extra alloys.

But still in the material that actually we are still pending to supply in the second quarter. That still are -- were certain orders that were covered on effective transaction prices that was that one that at the end of last year, more or less were the basis that were to be discussed with the customers. As far as the situation is improving, as far as the volumes are growing, there is obviously better sentiment that we explained that there is in the market, this shall be gradually reduced.

And of course, what you are saying, Bastian about the effect of the increase of the raw materials and in prices, it's a fact in the States, okay? The pass-through in the States is working perfectly and of course, it's bringing us some benefits, but it is not really the same in Europe. This EUR 25 million that we are talking -- that we have been talking about is in Europe, and is it -- and this is the total adjustment that we have done to the inventories that we are holding in stock. As said, this is not really a cash effect. And it is the total of the adjustments that we are doing to the inventories, both in HPA and in Stainless, but it's all focused in Europe.

Okay. Understood. And then just briefly also in Europe, maybe zooming in a little bit on the performance of that business. You obviously had the fire but I guess looking at your production numbers, it does suggest that things are obviously improving here and you confirm that. So any color on when you think you'll be back to breakeven? Do you think maybe breakeven is possible in the course of the second quarter, maybe not for the full quarter, but in the course of it, possibly?

And then also just on your outlook, and you're obviously guiding for a better second quarter, and you said volumes will be improving. Clearly, European prices should be improving. I guess, maybe from what I understood, some improvements in the mix in the U.S. as well. So putting all of this together, do you at least feel broadly comfortable with market expectations, which are around, say, around EUR 150 million EBITDA for the second quarter?

Well, the situation in Europe, as you say, is improving. We remain confident that we shall be reaching breakeven in the year '26. I don't think it's something that is going to probably take place in the second quarter because the prices are going up. But mostly is the final prices, those that were going up. We -- it's good that the nickel increase as much as possible has been passed through the customers when possible. There are some part in which, as we mentioned, has not been so simple. But having said that, still, if you look at the base prices, still, we are seeing base prices of EUR 450, EUR 500 base price. So this level is ridiculous.

We are able to reach the breakeven substantially below the level of base prices that we have before for getting breakeven, but still this is not there. So consequently, I don't think we are going to reach that level in the second quarter, but we think that we may reach it in the third quarter. So gradually, just with the volumes increasing with the measures on place, we are getting closer to it. Maybe we are able to match it maybe for the third quarter, but I don't think it's coming in the second quarter. So I think we probably need to wait a bit more.

And on your guidance?

Yes. Well, the guidance is -- for us, in the levels we are -- I think we give a clear color that we are going to be better performing in the second quarter. What is good demonstration of comfort with all the issues taking place. So in the energy crisis we are in with all the uncertainties that are all over the market, cyclical company, giving indications of improvement. We think it's a good sign of trust on our recovery. I am not uncomfortable with this level you are giving. We may be there, let's see what happens, let's see when the situation is solved, but now we are seeing all the contingency plans that all the industries, all the countries are having with absolute uncertainties of how it's going to be the energy situation. So it's difficult to be more precise in giving an exact number, but we are comfortable with the improvement.

If the field where we are now is the EUR 120 million, I have no problems on you keeping that figure, but I cannot be more precise, but purely because still a lot of issues are in place and who knows what may come in, but I'm not uncomfortable with that figure.

Our next question comes from Dominic O'Kane from JPMorgan.

I have three short questions. So just maybe on the commentary around the pricing structure for Europe and the base plus transaction. Could you maybe just clarify what percentage of your order book currently is on a base plus transaction basis. And as you said, your comments are that you're looking to change the structure so that it's more skewed back towards base. Just if you could just help us think about the structure of your order book currently?

Yes. In a market where the imports having reduced at levels of 14% is much more simple now that in the new negotiation for future deliveries, the European structure of the base price plus extra is respected. So the point is clear in the orders that we're taking in the second half of last year when everything was tough and still the imports order that was much more difficult nowadays it's more simple. So gradually, we understand that we are going to be reached there.

So this is something that clearly is improving because as we have said before, the feeling, the sensation is positive in the market. And with the new volumes in place with the reduce of competition from imports, this is much more simple now.

Okay. I mean if I estimate, is it less than 30%? Or is it around 30%? Is it possible to quantify it?

I don't have the figures. I don't think we have the figures currently. We are on that mood. So let's say that we are there, but we cannot quantify yet.

So I just have 2 other questions. You made the comment around that the Middle East impact at EUR 2 million in March, arguably, the backdrop has maybe improved since March, given low gas prices. Is that the same type of number we should maybe expect for April and May?

Yes. Well, yes, we think that for your numbers, you can estimate between mid-single-digit to high single digit for the whole quarter.

Excellent. And then final question on -- just on the outlook, specifically digging into high-performance alloys. So the Q1 EUR 13 million headline EBITDA was maybe a little bit weak. As we think about the outlook for Q2 and for the remainder of 2026, do we think we can return to the same level of reported performance of maybe Q4 or Q1 2025. So in the range of EUR 30 million to EUR 40 million. Should we think about that being kind of a realistic run rate for the next couple of quarters?

Gradually, yes, maybe for the second half of the year, yes, in transitioning for the second quarter. So the contribution in HPA in the last year was highly covered by the European HPA, lower contribution from the American one. This year is going to be just a contrary. So the European more exposed to the oil and gas is contributing less. And gradually, the American contribution is going to be higher. So it's going to improve.

As we said, the top of the cycle probably has been the first quarter. It shall be improvement in the second quarter and reaching equivalent figures to the ones you are mentioning for the second semester.

Our next question comes from Maxime Kogge from ODDO BHF.

Two questions on my side. The first about the Middle East conflict and its implication on the oil and gas end market within HPA. Since the conflict is driving higher oil and gas prices, it will also trigger reconstruction needs in the Middle East. So do you expect HPA to potentially benefit from that? And when if that's the case?

Okay. Well, I would say the Middle East contract -- conflict is very uncertain. So it's very uncertain when it will end. And still, these are -- all these projects on oil and gas are long-term projects. We are not yet really seeing a recovery on the oil and gas, all with regards to investments, I think it's in a wait and see, okay? Of course, when it comes the end of the conflict and all of these needs to restore we expect the benefit from that, but we cannot say now that we are yet seeing it. Of course, it will come, but not at this moment.

Okay. That's clear. And just a second and last one is on CapEx. So I think the Q1 numbers still included a big last payment for the NAS expansion line. So from now on, should we expect CapEx to step down from Q2 onwards given that this big project is now behind?

Well, really, the CapEx because of all the CapEx that we have in place right now with the combination also of Haynes starting the buildings and constructions, more or less the figure that we expect for the second quarter will be more or less similar. We -- as we said, we are in a strong phase of CapEx. Last year, we did EUR 311 million. This year, we will be maybe a little bit lower than the EUR 300 million, but that's more or less stable. And we will be moving some of the CapEx that now has been focused on NAS and is finishing in NAS. We will be moving to our high investments that we have in Haynes with the starting of the buildings and structures. So we don't expect the CapEx to reduce a lot for the second quarter.

I would now like to hand back to Borja for any written questions.

Thank you very much. Most of the questions coming from the website were answered during the presentation and the Q&A session. So with all this, I just want to thank all of you for coming and joining us on this call. And as a final note, also taking into account that our Q2 results presentation will be on July 24. Have a good day, and thank you very much.

Thank you.

Good morning, ladies and gentlemen, dear shareholders, on behalf of the Board of Directors, which I have the honor of chairing and on my own behalf, I'd like to thank you for your attendance, both to those of you who are physically present in this room and also to those that are joining us remotely. I would like to welcome you to this Ordinary General Shareholders' Meeting -- the meeting will be available on the company's website for a period of 1 month following the General Shareholders' Meeting.

Next, and in accordance with the provisions of the Acerinox General Meetings regulations, it is necessary first to verify compliance with the legal and statutory requirements for the valid convening of the meeting. To that end, I give the floor to the Secretary of the Board of Directors.

Thank you, Mr. Chair, and good day, ladies and gentlemen, shareholders. As the Chairman has stated, it is necessary to verify that the legal and statutory requirements for the valid convening of the meeting have been met. This general meeting is being held on second call as an ordinary meeting as established in Article 15 of the bylaws and Article 10 of the general meeting regulations. This meeting is chaired by the Chairman of the company's Board of Directors, Mr. Carlos Ortega Arias-Paz, assisted by the Secretary of the Board of Directors, who is speaking to you now. And in addition, we have the Chairman and the Secretary, the Presiding Committee and the Chief Executive Officer, Mr. Bernardo Velazquez Herreros and the following directors: Ms. Rosa María García Piñeiro, Mr. Francisco Javier García Sanz, Mr. Tomás Hevia Armengol, Ms. Leticia Iglesias Herraiz, Ms. Marta Martínez Alonso, Ms. Ana María García Fau, Mr. Santos Martínez-Conde Gutiérrez-Barquín and Mr. Pedro Sainz de Baranda Riva. The mentioned Board members are attending this general meeting and are present in the room.

The call for this General Shareholders' Meeting was approved by the Board of Directors at the meeting held on March 25, 2026. And the notice of the meeting was published on March 27, 2026, on the website of the Spanish Securities Markets Commission, the CNMV, under other relevant information in the official gazette of the Mercantile Registry #60 and the newspaper Expansión and on the company's website. The agenda for this meeting is included in the notice of the meeting. And given that it is extensive and known to all of you, it is deemed to have been read unless anyone wishes to manifest our opinion against it. The recommendation relating to this general meeting has been available to the shareholders at the company's registered office and on the company's website without interruption since the publication of the notice of the meeting in accordance with the provision of Article 518 of the Capital Companies Act and Article 5 of the General Meeting regulations.

Likewise, shareholders have been able to request that the documentation be sent to them free of charge under the terms provided by the law. It is hereby noted that no supplements to the notice of this Ordinary General Meeting nor any alternative resolutions to those approved by the Board of Directors regarding the items of the agenda have been submitted by the shareholders. Therefore, the Board of Directors in accordance with the provisions of Article 203 of the Capital Companies Act and Article 10.3c of the General Meeting regulations has agreed to request the presence of Ms. Ana López-Monís Gallego, a notary public of the National Notarial Association, who is present in the room to draw up the minutes of the general meeting. Next, on behalf of the Chairman, I will report on the provisional attendance figures for the purpose of verifying the valid constitution of this general meeting. Pending the counting of all attendance cards, we have a provisional quorum that is sufficient to commence this general shareholders' meeting.

I will now read the data to Scott. We have in this meeting connected online and physically in the room, 583 shareholders, holders of 68,146,342 shares that amount to 27.3% of the share capital and represented 1,546 shareholders that hold 88,207,803 shares that equal 35.3% of the share capital. In accordance with the above-mentioned data, the share capital represented with voting rights is [ 39,855,225 ], representing [ 156,000 ] shares, more than 156,000 shares representing 70% of the share capital. Therefore, we are compliant with the requirements of Article 198 of the Capital Companies Act for the valid convening of the General Shareholders' Meeting on second call. Nonetheless, we will provide the final attendance figures for the general meeting before proceeding to read the proposed resolutions related to the agenda, which will subsequently be put to vote.

Thank you, Mr. Chair -- Mr. Secretary. In view of the fact that based on the data presented by the Secretary, there is sufficient representation of the share capital present, I hereby declare this general meeting convened on second call to be validly constituted to deliberate and resolve on all items of the agenda that are put to a vote. In compliance with the provisions of the commercial registry regulations, now the notary will ask the meeting whether there are any reservations or objections regarding the statements concerning the number of attending shareholders and the capital present. In compliance with the provisions of Article 101 of the Commercial Registry regulations and Article 11.3 of the general meeting regulations, I hereby state that I have been called to attend the General Shareholders' Meeting and to draw the minutes of the meeting. I have assessed the capacity of their request and verify that the meeting has been convened in accordance with the legal and statutory requirements.

It is my duty to ask whether any shareholders who wishes to raise any reservations or objections regarding the statements concerning the number of shareholders present and the share capital represented. Should there be any shareholder representative that wishes to record any reservation or objection regarding the valid constitution of the meeting or the overall data and the attendance list, please state so in the case of attendees present in this room or in the case of attendees participating online via the link available on the remote attendance platform on the website in order to submit their reservation or objection in writing, thereby having it included in the minutes.

Thank you, Ms. Notary. I will now give the floor to the Secretary.

Thank you, Mr. Chair. In accordance with the provisions of the general meeting regulations, ladies and gentlemen, shareholders or the representatives attending online who wish to speak where applicable, request information or clarification regarding any items on the agenda or the publicly available information that the company has provided to the CNMV since the last general meeting and the auditor's report or simply to submit proposals in cases permitted by law, they were able to do so today via the remote participation platform available on the website from the time of their connection and until 11:45 a.m. today. Likewise, if there are any shareholders or representatives present in the room who wish to speak, they may request to do so from this moment until the Q&A session begins by proceeding to the right side of the theater from the entrance where the lectern is located.

To ensure that their statements are recorded in the minutes, please present your national identity card to the staff managing the speaking order indicating the number of shares that you hold and whether you are the shareholder or acting as a representative. Further to that, if any of the shareholders or representatives present in the room wish for the remarks to be recorded literally verbatim in the minutes of the meeting, they may submit them in writing at the time of requesting their turn so that they may be verified when the shareholder speaks. Please be advised that all statements made will be answered either verbally during this general meeting or in writing within 7 days following the meeting in compliance with Article 197.2 of the Capital Companies Act.

Furthermore, please note that since the proposed resolutions submitted by the Board of Directors have been made available to you and published on the company's website, online attendees wishing to cast their vote on any of the resolutions pertaining to the items on the agenda may continue to do so via the link to the remote attendance platform provided for this purpose on the corporate website until following the reading of the summary of the proposed resolutions, the Chairman declares the conclusion of the voting period for the proposed resolutions as stated in the notice of the meeting. In turn, any shareholders or representatives present in the room who wish to vote against or abstain from any voting on any of the proposals on the agenda may do so at this time by notifying the notary's desk, providing proper identification and indicating their status as a shareholder or representative for inclusion in the minutes. Next, we will give the floor to Mr. Carlos Ortega Arias-Paz, who will be delivering his remarks in his capacity as Chairman of the Board of Directors.

Thank you, Secretary. Dear shareholders, ladies and gentlemen, it is an honor to address you at this 2026 General Shareholders' Meeting. Thank you for joining us today, whether in person or remotely. Your continued trust and commitment to Acerinox are once again the best endorsement of our strategy and long-term industrial project. I am here today to report on the fiscal year 2025, a year that once again tested the strength of our business model and the company's ability to adapt. It was undoubtedly a demanding year, but it also confirms that Acerinox is a stronger and more resilient company today, better prepared to face the future. The international context in which we operated in 2025 was marked by high geopolitical and macroeconomic volatility. The conflicts in Ukraine and the Middle East, in addition to the human tragedy they represent have continued to affect trade flows, supply chains and energy markets.

These issues have been exacerbated by new international tensions and a shift in political landscape on both sides of the Atlantic. These developments have reinforced long anticipated trends, increased regionalization of trade, the pursuit of strategic autonomy by major economies and heightened regulatory sensitivity to supply chain security and sustainability. In this new global framework, the stainless steel and high-performance alloys industry plays an essential role once again. Against this backdrop, Acerinox has acted with foresight and strategic vision, relying on a strategy that combines geographic diversification, financial discipline and a clear focus on higher value-added products. This strategy enables us to navigate economic cycles with greater resilience and transform structural changes in the environment into growth opportunities.

Today, we can confidently say that Acerinox is aligned with major industrial trends and poised to capture more value when economic activity returns to normal. The United States has solidified its role as the primary driver of growth and value creation for our group. It has a dynamic economy with a solid industrial base and policies that favor local production and long-term investment. The country protects itself, its producers by increasing import taxes on steel. Our long-standing commitment to producing in the United States through North American stainless, NAS, provides us with a competitive advantage that is difficult to replicate. Adding to the strength is the full integration of Haynes International, which experienced its first full year within the group in 2025. The incorporation of Haynes has elevated our industrial profile. It has decisively strengthened our global leadership in high-performance alloys and enabled us to expand our presence in strategic high-growth sectors such as aerospace, energy and advanced chemicals. Beyond operational and commercial synergies, this operation has transformed the group's DNA and protected our future growth.

Today, the combination of NAS, Haynes and VDM's assets in the country makes us an industry benchmark in North America, offering a unique product portfolio. In Europe, the 2025 financial year was marked by contained demand, still, and the need for more decisive regulatory progress. In this regard, positive signs are beginning to emerge. In January of this year, the carbon border adjustment mechanism, the CBAM, took effect and further measures are anticipated in July. These measures are expected to limit steel inputs to half of current levels, imposing tariffs of 50% on excess import. All this represents a significant step toward a fair and more balanced environment for European producers. These measures are essential for correcting distortions caused by imports that do not adhere to the same environmental and social standards. Acerinox anticipated this scenario by establishing a robust industrial model in Europe and the United States.

This balanced implementation will enable us to maximize returns and improve profitability as industrial demand rebounds. In this challenging context, the group has shown remarkable adaptability. We closed the 2025 financial year with revenues of EUR 5.8 billion, a 7% increase year-on-year. Also an adjusted EBITDA of EUR 422 million, reflecting our ability to maintain profitability despite pricing and demand pressures. I would especially like to highlight the strength of our operating cash flow generation. Throughout the year, we managed working capital very carefully, improving it by EUR 406 million and achieving a historic reduction in inventories in stocks. This cash generation strengthens our finances and provides us with the flexibility to continue investing and creating value. Acerinox's share performance in 2025 reflects the strengthening of the group -- after several years of moving within a limited range between approximately EUR 9 and EUR 11 per share, the share price closed the year at EUR 12.66 per share with an annual revaluation of 34%.

This positive trend continued in 2026, demonstrating an enhancement of our strategic strengths. The market seems to be recognizing our leadership in the United States and our unique position in high-performance alloys more clearly as well as the prospects for regulatory improvement in Europe. Currently, 78% of analysts' recommendations are to buy our stock, revealing the confidence in the group's ability to generate recurring long-term value. As you may recall, at this time last year, I told you that we were trading at around EUR 10 per share, a price that did not reflect our intrinsic strengths. Yesterday, the share price closed at the maximum compared to the last 10 years. But I consider that still the market price has a long way to go before fully reflecting our value. The group's strong financial performance is supported by a solid and demanding corporate governance framework.

As you may recall, several amendments to the company's Articles of Association were approved at the 2025 General Shareholders' Meeting as well as the corresponding updates to the regulations of the General Shareholders' Meeting and the regulations of the Board. If I were to highlight 2 of those approved modifications, I would mention the reduction of the directors' terms of office to 2 years in accordance with the best international corporate governance practices and the reorganization of the Board committees to improve operational efficiency and transparency. The suggestions of the CNMV's technical guidelines have also been included, in particular, those pertaining to the Audit Committee.

I would also like to mention that Acerinox did not wait for the publication of the Equal Representation Act in order to have a balanced and legally compliant gender representation on the Board. The Board has also approved a new wording for the code of conduct and the corporate policy of the whistleblowing channel. All this has helped us to improve our internal governance with the standards expected by the market and our shareholders. These reforms allow us to align fully with the international best practices, strengthening diversity, transparency and oversight of financial and nonfinancial risks. Acerinox already operates under the new European frameworks for cybersecurity, due diligence and artificial intelligence. The Board directly oversees climate and sustainability risks. In 2026, the Board has also launched a review process for some corporate policies as well as the preparation of new ones, especially in the fields of cybersecurity and artificial intelligence.

The Board is expected to begin updating the internal rules of conduct for the securities markets in the coming months. We will report on all these developments at next year's meeting. Our sustainability road map continues to make steady progress. We continue to apply ESG criteria to the compensation of our management team and our CEO. We continue to promote an industrial model based on decarbonization, circular economy and operational excellence. Our historic presence at the prestigious Stainless Steel Industry Award 2025 was indeed historic and demonstrates our leadership capacity in all business areas and in our various factories. We obtained gold, silver and bronze medals in innovation and market, cutting-edge technology, sustainability and operational safety. As a testament to our commitment to sustainability, I am honored to announce that Acerinox has been included in the S&P's Global Sustainability Yearbook 2026.

After being evaluated under their rigorous standards, we can proudly say today that we are among the elite of the world's steel industry. Out of over 9,000 companies analyzed, Acerinox stood out for its integrity and operational excellence, achieving the historic milestone of receiving the highest score in transparency and reporting. This result reflects our unwavering commitment to flawless accountability and long-term value creation. Creating shareholder value remains an ongoing priority for Acerinox. In 2025, we distributed EUR 155 million in dividends, equivalent to EUR 0.62 per share. Our dividend policy is a tangible demonstration of the group's financial strength and commitment to sustainable shareholder returns.

Acerinox is a stronger, more diversified and better prepared company today than ever before. We have a unique industrial platform, clear leadership in the United States, global leadership in high-performance alloys and more favorable regulatory outlook in Europe and a strong focus on high value-added products. I would like to end by thanking everyone who makes this project possible, our employees for their commitment and professionalism. Thank you. Our customers and suppliers for the trust, thank you. And most especially you, our shareholders, for your constant support. Many thanks. We have the right strategy to take full advantage of the upcoming industrial recovery. Let us continue to move forward with determination, responsibility and confidence in the future. Thank you very much.

Next, Mr. Bernardo Velazquez Herreros will deliver his remarks in his capacity as Chief Executive Officer of the company.

Shareholders, ladies and gentlemen, good morning. It is an honor to have the opportunity once again to address you and report on Acerinox activities and results in 2025 as well as to explain how the international conflict has affected our operations. In describing the past year, one must use terms as turbulent, volatile and uncertain. Not only have the conflicts in Ukraine and Gaza continued, but major repercussions have arisen from other conflicts such as the intervention of American forces in Venezuela and the tensions that led to the confrontation between Israel and Iran supported by the United States and which has already led to more tensions in 2026. Considering that almost all of these conflicts involved energy producing countries, the impact on the economy has been and continues to be significant, affecting businesses closely linked to the cycle, such as those in the stainless steel and high-performance alloys industries.

Additionally, the U.S. administration's decision to impose new tariffs in April 2025, the reciprocal tariffs sparked a global response in the form of other tariffs further exacerbating trade unions. These tensions remain unresolved and are subject to continuous negotiation and review between countries and within the United States. The circumstances that I have attempted to summarize here have only added to the uncertainty and volatility of the market, preventing the stability and positive outlook necessary to promote investments and stimulate industrial production and hindering the expected recovery. In our sector, apparent stainless steel consumption in the United States and Europe has remained flat for 3 consecutive years, well below pre-pandemic levels.

Apparent consumption in the United States in 2025 was 0.7% lower than in 2024 and 18% lower than in 2019, the year before the pandemic. Consumption in Europe was 2.8% higher than in 2024, but yet still 13% lower than in 2019. In an increasingly turbulent world with unstable relations between traditional partner countries and a clear loss of influence by international organizations, the fragility of constantly reformulated supply chain is evident. It is meant to diversify and shorten supply chains. We cannot rely solely on suppliers far away, even it means sailing around Southern Africa. In the circumstances, we must reflect on the importance of strategic autonomy and the need for a domestic industry, which is key to reduce dependence.

During the pandemic, we saw how masks were in short supply, how European industry dependent on Ukraine cables and how the lack of Russian oil affected it. Conflicts, sanctions and other circumstances have complicated the lives of companies committed overly to globalization. It's important to note that, like steel -- stainless steel like steel in general, stainless steel has been identified as a strategic material in both the United States and Europe. Not only have the tariff on steel imports under Section 232 been challenged in the United States, but the current administration during Trump second term has also doubled the tariffs to 50%, eliminating country and production exemptions and extending it to downstream products made of steel where steel constitutes a significant portion of the costs.

In Europe, the response is slower, but just as forceful as these works are [indiscernible] new trade measures affecting steel imports have been approved and the European Commission's proposal is expected to be implemented on July 1. First, the objective is to limit imports to half of current levels and to impose 50% tariffs on surplus imports. Additionally, the carbon border adjustment mechanism has been enforced since January 1, 2026, which is essential for decarbonization and compensates European manufacturers for their efforts to reduce CO2 emissions. We hope this awareness among governments and societies on the urgent need for strategic autonomy will show the importance of local industry and ensuring these strategic supplies and generating wealth and quality employment. At least, this is the direction in which Europe seems to be moving, having been sensitized by the Letta report and the European Commission's publication of the report entitled Steel and Metals Action Plan, which aligns with the claims of our sector.

We also hope that this new flow will promote industrial activity spreading downstream to other sectors and favoring greater consumption of our products. This will limit the unfair competition that we have suffered for too long. As I mentioned before, due to a lack of visibility, all stainless steel consumers were placed on hold in 2025 and remain so until the situation becomes clearer. They are only buying the strictly necessary volumes and new industrial projects are being postponed with the exemption of the aerospace and defense industries and energy investments to power data centers. Under these circumstances, our melting shops have not been able to operate at full capacity. In 2025, melting shop production was 1.9 million metric tons, was 6% higher than the previous year, but well below the 2.6 million metric tons achieved in 2021. Broken down by markets where consumption behavior is similar, the United States have maintained stable prices, thanks to the tariffs.

However, Europe, the world's largest steel market has suffered from 25% increase in imports within the safeguard measure quotas, which have largely proven ineffective. Consequently, the prices of our products have remained low, reducing our profits in the region. The performance of the high performance alloy sector has been mixed. Our German factories have reduced activity due to lower purchases in the chemical and fossil fuel sectors. In contrast, our U.S. factories have improved due to the better situation in the aerospace and power generation turbine sectors. In any case, this demonstrates the wisdom of our diversification strategy in terms of both geography and product. And we evolved towards more sophisticated higher-value materials. It is also important to note that we have adapted our supplies of raw materials and consumables to changing circumstances with agility, ensuring that our supply chains have not been disrupted.

Sales in 2025 were EUR 5.8 billion, a 7% increase from the previous year. This increase was partly due to the contribution of Haynes International, which joined our accounts for the first full year adjusted EBITDA was EUR 422 million, a 5% decrease from 2024. The Stainless Steel division adjusted EBITDA was EUR 276 million, which is 13% lower than in 2024. Meanwhile, the high Performance Alloys division adjusted EBITDA was EUR 146 million, which is 15% higher. We reduced working capital by EUR 406 million, primarily through inventory reduction, which kept net financial debt at EUR 1.2 billion, only 6% higher than at the end of 2024 despite our ambitious investment plan for which we allocated EUR 311 million in the year. Over the years, we have learned to generate cash during low points in the cycle to ensure our financial strength. In 2025, our operating cash flow was EUR 455 million, 55% higher than the previous year.

It is also relevant to mention that we have returned to normal operations at Acerinox Europe's Campo de Gibraltar factory, where a strike lasting almost 5 months due to the negotiation of the collective bargaining agreement occurred in 2024. We are recovering the confidence of our clients in spite of the fire that affected our hot material pickling and pre-clean lines at the end of 2025. It is important to talk about the flexibility of this factory that allows us to adapt to the market, but also to melt our steel in low-cost energy periods. The markets require agility and speed in adapting our businesses to rapidly changing cycles and situations. For these reasons, we have sought to become more flexible in an industry traditionally characterized by great inertia and to diversify our products ranging from carbon steel to the most sophisticated nickel alloys.

What distinguishes us within the sector is our clearly defined long-term strategy, which we updated at the end of 2025, insisting on our 4 pillars: operational excellence, production of high value-added materials, commitment to sustainability and financial strength. In this regard, we continue to pursue our organic growth strategy. Investments in our stainless steel factory in the United States, North American stainless amounting up to EUR 249 million have already started in early 2026 and will allow us to increase our output by 20%. This increase is due to greater productivity in the melting shop and hot rolling using digital techniques as well as a new cold rolling mill, which is currently undergoing testing.

This project aims to maintain our leadership in the North American market, provide the best quality service to our customers and promote growth and greater autonomy in this region. Our investment in Haynes International, a company with a long-standing presence in the U.S. high-performance alloys market and our focus on manufacturing alloys for the aerospace sector and turbines for electric power generations also aligns with this goal. After the first year of integration, we have achieved synergies of USD 12 million, in line with initial estimates. Additionally, we are investing in a new rotary retort, a vacuum furnace and finishing lines to expand our production capacity and access the volume market of long products made of high-performance alloys through the combination of Haynes and NAS equipment.

The investment amounts up to EUR 154 million. The other major projects worth EUR 67 million in equipment for the German factories will increase VDM's supply capacity by 15%. It's already the world leader in high-performance alloy production. Some of the equipment is already operational and the rest is progressing according to schedule. Finally, we remain committed to the Acerinox Europa factory in Campo de Gibraltar, in which we have EUR 22 million investments underway to support our strategic plans. We also are investing EUR 13 million in the Columbus stainless factory in South Africa, mainly in a coating line that will allow us to access the electrical steel market. This will make us the only company in Africa capable of producing stainless steel and electrical steel factory will undoubtedly be the most versatile in the world. These projects will provide the group with around EUR 300 million in EBITDA growth potential per year.

We are also continuing to work on another one of our pillars, operational excellence, our Beyond Excellence project has enabled us in the first 2 years to achieve recurrent savings of EUR 83 million out of the planned EUR 100 million with 1 year of implementation still to go. This has encouraged us to increase our savings target to EUR 120 million by the end of 2026. Almost all projects in this initiative focus on improving productivity and efficiency often through greater process control using data and digital tools. These projects of organic growth, taking advantage of synergies and operational excellence provide a total growth potential of EUR 500 million at the EBITDA level.

This guarantees Acerinox future success, especially in the new international framework with the search for strategic autonomy, bringing supply chains close together and the renewed commitment to industry and local manufacturing. We, of course, remain committed to sustainability with a very pragmatic approach, focusing on process efficiency and the use of recycled materials. Our investments provide a reasonable returns, and we aspire to valorize our waste.

We are committed to becoming the paradigm of the circular economy by manufacturing recyclable raw materials, minimizing emissions throughout the product life cycle. In our annual report, you have a lot of metrics related to our progress in this area. But as an example, we have reduced our Scope 1 and 2 emissions intensity by 13% compared to 2024. In addition, we have successfully developed our premium EcoAcerinox steel for which we guarantee as certified by an independent accredited body that it is produced using more than 90% recycled material, renewable energy and with CO2 emissions that are 50% lower than those of the [indiscernible] production. We collaborate with customers to ensure their products are recognized as examples of responsible low-emission production, thanks in large part to our EcoAcerinox as evidenced in the stainless steel chimneys on the Jeremias Group, a leading company in this sector.

We have also reduced the rate of lost time accidents by 15%, while maintaining the target of 0 accidents as the only acceptable goal. In 2025, we hired 901 people, 314 of whom were in Spain. Of those, 424 were under 30 years of age, 141 of whom were in Spain. Additionally, 172 were women, 62 of whom were in Spain. In other words, we generate employment for young people in the regions in which we operate. Little by little, we are also attracting a greater number of women to our industry, which has traditionally been off limits or unattractive to them. We provide appropriate training for our business and encourage more women to join our group, which is a significant challenge, but we are trying to collaborate with universities and vocational training centers.

I am delighted to say that the Acerinox Foundation founded to help companies play a more relevant role in society chose us to represent the industry in our pilot program. The program will verify our social work, find metrics to quantify our efforts and serve as a guide for other companies that wish to participate. Finally, I would like to thank you all once again for this opportunity to address you, our shareholders. I would like to thank you for your continued support, and we promise you will not be disappointed. I want to thank all our customers and suppliers for trusting our project and the Acerinox personnel, more than 9,000 people who work in this group for their daily energy and enthusiasm in our thriving sector. It is an honor to work with you. Thank you very much.

Thank you very much, Bernardo. The period for requesting the floor is now closed, and we will now open the floor to the shareholders. To that end, I give the floor to the Secretary.

Thank you, Mr. Chairman. We haven't received any remote comments online. Therefore, we will now give the floor to any shareholders who would like to take the floor here in the room. Shareholders or representatives who wish to make statements should approach the podium located on the right side of the theater as you enter. Preparing these remarks takes some time. We invite you to watch the company's new corporate video in the meantime.

Imagine a world that is possibly evolving a world in which every step forward is worthwhile evolution and the capacity to go further. This is a story that Acerinox has built for more than half a century. It's not just about manufacturing stainless steel and high-performance alloys. We transform raw materials into solutions that push industries forward that connect people and build infrastructures that last from the pioneering ideas of our founders to the advanced plants that are today designing the future. Our trajectory is defined by commitment, excellence and the capacity to anticipate challenges that come with the times. Our stainless steels and high-performance alloys -- they reinvent themselves in a planet that demands that we become increasingly more responsible. We manufacture materials that because of their very nature, they stand out as lasting and 100% recyclable materials, materials of the future because for Acerinox, sustainability is not a bonus, but rather the heart of our identity. It's our DNA. We were the pioneers in circular economy way before it became a trend.

We recycle, we optimize and we reinvent every single process, not because of obligations, but rather because we fully believe that every decision that we make today will have an impact tomorrow. And from this commitment arises EcoAcerinox, our even more sustainable stainless steel, a milestone that makes our efforts make sense and that shows that true sustainability stems from every action that we implement today will result in a better future. It's present in the quality of your cooking, in the elevator that takes you to your home and bridges that unite pathways, stainless steel and our alloys are way more than materials. They are trust, security and lasting durability designed to endure the passing of generations. We don't just produce. We design.

We create added value solutions that push strategic industries from the engines that help us travel to enjoy new experiences, the power that lights up our homes and even the rockets that help us explore further. We work to respond to the needs of today, and we innovate to anticipate the demands of tomorrow. Our story is written in every single corner of the world with factories in 3 continents and presence in more than 80 countries. We are a global company with a local vision.

This network allows us to be closer to be more agile and to respond more efficiently to the demands of the different markets and of each customer. We're connected to the heartbeat of the industry anywhere in the world. Innovation is an essential part of our culture. We invest in R&D, technology and digitization in order to elevate quality to reinforce security and improve every process. Now we introduce AI to improve control, efficiency and decision-making because why stop when there's so much to do. We innovate not just to make progress, but also to transform and to open the door to new possibilities. We keep an eye on the future with a clear ambition. We want to lead an industry that grows smarter, more efficiently -- and more efficient and sustainable because at Acerinox, we go beyond materials. We build a more resistant connected world prepared for tomorrow's challenges, Acerinox, supporting a more resistant, efficient and sustainable future.

Chairman, I have been told that no requests to speak from the shareholders and representatives have been placed by those present in the room. I would like to, therefore, report on the attendance -- the final attendance data. They are as follows: we have 650 shareholders present in the room, representing [indiscernible] of the share capital represented in the General Shareholders' Meeting, we have 1,586 shareholders amounting to 35.45% of the share capital. And therefore, the quorum amounts to 66.96% of the share capital. Figures that are very similar to the ones that we shared in the beginning of this meeting. So we can therefore -- sorry, apologies. Next, the Secretary will inform you of the voting procedure for the proposed resolutions submitted for your approval.

Thank you, Mr. Chairman. We hereby inform you that the tallying of votes on the resolutions proposed by the Board of Directors regarding the items on the agenda will be conducted using a negative deduction system. For this purpose, votes in favor will be considered to be those corresponding to all shares present and represented at this meeting minus the votes corresponding to shares whose holders or representatives indicate that they are voting against the resolution or abstaining. Votes corresponding to shares whose holders have voted against or have stated their abstention prior to this meeting through the remote communication means made available to shareholders and votes corresponding to shares whose holders or representatives have left the meeting prior to the vote on the proposed resolution in question and that have made their expressed intention to leave the meeting known either through the link on the telematic attendance platform provided for this purpose on the website or in the case of shareholders present in this room before the notary public and the staff assisting her.

Likewise, it is hereby noted that the conflicts of interest involving certain directors in relation to some of the items on the agenda that have been taken into account in accordance with the provisions of the Capital Companies Act. Given that the proposed resolutions submitted to this meeting are known to all and in view of their length in accordance with the provisions of Article 11.5 of the general meeting regulations, I dispense with a full reading and proceed to a summary reading of their essential elements. You may recall that under the first item on the agenda, the approval of the annual financial statements of management report for Acerinox S.A. and its consolidated group, all corresponding to fiscal year ended December 31, 2025, is submitted to the meeting. Under the second item on the agenda, the Board is asked to approve the consolidated nonfinancial information statement of sustainability information for the fiscal year ended on December 31, 2025.

Under the third item on the agenda, the meeting is asked to approve the proposed appropriation of earnings of Acerinox S.A. for the fiscal year ended December 31, 2025. And the net income for the fiscal year was EUR 202,307,452. For dividend distribution, we have EUR 154,587,930 and to voluntary reserves of EUR 47,719,522. The proposal includes the payment of supplementary dividend for the 2025 fiscal year in the amount of EUR 0.31 gross per share to be paid on July 17, 2026. Under Item 4 of the agenda, the Board's management for the fiscal year ending December 31, 2025, is submitted to the meeting for approval. Under Item 5 of the agenda, the meeting is asked to approve the reelection of the auditors for both Acerinox S.A. and its consolidated group for the 2026 fiscal year.

Under Item 6 of the agenda, the reelection of the auditors for both Acerinox S.A. and its consolidated group for the fiscal year 2027, 2028 and 2029 is submitted to the meeting for approval. Under Item 7 of the agenda, we will summarize this. The meeting is asked to approve the authorization to increase the share capital through cash contributions of 60% and the current capital and with delegation to the Board of Directors of the power to exclude the right of refusal if the company's interest require with respect to a maximum of 10% of the company's share capital. And this authorization, by the way, supersedes the delegation granted in the previous Ordinary General Shareholders Meeting.

Under Item 8 of the agenda, the meeting is asked to approve the authorization for a period of 2 years of the company's Board of Directors to acquire treasury shares up to 10% of those issued. And once again, this authorization supersedes the one granted under Item 10 in the previous General Shareholders' Meeting. Under Item 9 of the agenda, the meeting is asked to approve the delegation to the company's Board of Directors for a period of 5 years of the authority to issue securities convertible and exchangeable into shares of the company as well as warrants or other similar securities that may entitle the holder directly or indirectly until up to a total of EUR 1 billion as well as the authority to increase the share capital by the amount necessary.

And by the way, this delegation does not include the authority of the Board of Directors to exclude the right of first refusal. Under Item -- of the agenda, the meeting is asked to approve a multiyear compensation plan. And this is broken down into 10 points. 10 points, first has the fourth -- 653,943 shares intended for the payment of the second multiyear compensation plan or long-term incentive plan for executive personnel of the Acerinox Group for the period 2024 to 2028. Under item -- we submit to the vote the annual report on the remuneration of the directors of Acerinox S.A. for the fiscal year ended December 31, 2025. Under Item 12 of the agenda, the meeting is asked to approve the delegation of authority to the Board of Directors for the implementation, rectification and formalization of the resolutions adopted at the Ordinary General Shareholders Meeting. Having read and believe me in summary the proposed resolutions, I hereby declare the voting period on the proposals relating to the items on the agenda closed. And now I give the floor back to the Secretary.

Thank you, Mr. Chairman. Given that the meeting has been validly convened on second call with a quorum of attendance exceeding by far the percentage of subscribed share capital with voting rights required by law. For the items on the agenda is sufficient for the proposed resolutions put to a vote to be approved by a simple majority of the votes, except for the proposed resolutions relating to items 7 and 9 of the agenda, which are taken into account. Given that the quorum exceeds 50% of the capital present or represented exceeds 50%, the absolute majority is required for their approval. After counting the different votes cast in relation to each of the proposed resolutions regarding the items on the agenda taken into account for this purpose.

The votes cast prior to this meeting via remote communication means those cast by attendees present in the room as well as the votes cast via the telematic attendance platform as recorded by the Board of this meeting in accordance with the votes cast and tallied, the shareholders are hereby informed that the required number of affirmative votes has been reached for the approval of each and every one of the proposed resolutions regarding the various agenda items put to a vote at this general meeting.

The foregoing also applies to the 11th item on the agenda, but as mentioned before, this is a consultative point. In accordance with the data on record with the Board of the meeting, I hereby declare all resolutions put to a vote to be validly approved. As I mentioned, I didn't read in full the different items. Nonetheless, detailed information regarding the specific number of votes in favor, against and abstentions cast in relation to each of the resolutions put to vote at this Ordinary General Meeting in accordance with Article 525 of the Capital Companies Act.

These results will be published on the corporate website within the next 5 days and will be included in the minutes drawn up by the notary, which shall be deemed the minutes of the meetings and the resolutions contained therein and may be implemented as of the date of their closing And this will be made public on the company's website within the next 5 days. Ladies and gentlemen, shareholders, on behalf of the Board of Directors and on my own behalf, I would like to conclude by once again thanking all of you for attending this general meeting and for your commitment to the company. And I hereby formally declare the session closed. Thank you very much.

Hello. Good morning, good morning, everyone, and welcome to Acerinox Fourth Quarter and Fiscal Year 2025 Results Presentation. As you well know, '25 has been a challenging year marked by a complex macroeconomic environment, low global demand and ongoing tariff tensions. However, despite these headwinds, the group has maintained a solid financial situation, demonstrating the strength of our diversified business model and a strategic position in the United States, Europe and South Africa.

In many ways, '25 has been the year for setting the foundations for industrial reactivation in both the U.S. and Europe with the improvement of Section 232 in the U.S. and the Steel and Metals Action plan in the European Union. Looking ahead and although final demand remains low, we maintain a positive outlook for 2026 based on a solid strategy and supported by the different trade defense measures.

Acerinox, thanks to its geographical diversification, is best positioned to benefit from this new environment. During this call, we will hear from our Chairman, Carlos Ortega; our CEO, Bernardo Velazquez; our Chief Corporate Officer, Miguel Ferrandis; and our CFO, Esther Camos. They will explain our full year results, our corporate strategy, and they will also provide us with an outlook of the upcoming year.

Before we start the presentation, let me remind you that this conference call is being broadcast on our website, acerinox.com, where you can also find all of our year-end documentation, including the annual accounts and the management report. And now I'll hand you over to our Chairman, Carlos. Please go ahead.

Thank you, Carlos. Good morning, everyone. As Carlos said, this has been a very challenging environment, very difficult year, full of geopolitical tension, macro issues, low demand in all the markets that we have. But having said that, we believe in our strategy, and we believe we have done well within our strategy. And what we see is a very bright future in the medium term for Acerinox in particular.

With that in mind, for '25, we have recorded an increase in net sales of 7%, EUR 5.78 billion, which incorporates Haynes, the acquisition we had last year. And in the level of EBITDA -- adjusted EBITDA, we are 5% below last year at EUR 420 million. But one of the key aspects of the results this year has been the generation -- the cash flow generation. The operating cash flow you see is EUR 455 million, which is more than 50% higher than last year. This has allowed us to follow up with our very significant CapEx program, investment program at the low part of the cycle, over EUR 300 million invested.

We have paid taxes, almost EUR 100 million in taxes. And we allowed us also to pay our stable dividend policy with EUR 155 million this year paid as well. With all of that, plus, unfortunately, foreign exchange impact, the depreciation of the dollar versus euro, that has impacted our net debt has increased our net debt by EUR 68 million to EUR 1.189 billion net debt. Again, that increase -- slight increase in net debt is based on the investments we've made, the dividends and the FX differences. We have -- we stick to our strategy, as you saw the 4 pillars of our strategy, the excellence in our operations, in particular, Beyond Excellence program that is doing far better than expected.

As you know, we had earmarked EUR 100 million savings in 3 years by 2026. We're doing better than expected, and we have increased our target to EUR 120 million because we believe we can do better. We are investing in the low part of the cycle, EUR 311 million this year. That adds to our increasing value added in the industry and in our strategy, as you know, is HPA is a very important part.

We incorporated Haynes into our perimeter, and we believe we are going to higher value products for our customers. Sustainability continues to be a key part of our strategy. As you may know, we have been included in the S&P Sustainability report for 2026, which is the first time and the only stainless steel, the only steel producer in the industry that has that recognition. All of this allows us to continue with our financial strength, and that provides us the ability to continue with our stable dividend policy which is, again, EUR 155 million this year, EUR 0.62 that we continue, we want to keep doing for the years to come. So all in all, we believe it's a good year despite the headwinds that we have suffered in Europe, in particular, with the low prices, in the U.S. with low demand. But with all of that, we have generated a lot of -- a significant amount of cash flow that allow us to continue with our investments and dividend policy. With that in mind, I leave you to Bernardo, our CEO.

Thank you, Carlos. Good morning, everyone. Yes, our Chairman said, 2025 has been a challenging year. And if there is a word that can define the market situation is uncertainty. Everybody is speaking about uncertainty. So how can you make a budget if you don't know if you're going to have tariffs in your markets or tariff in the export markets? And how can you define what's going to be your competitors? If you don't know anything about tariffs and you have all these geopolitical tensions.

So the word that we are using in all the market with other customers is uncertainty, what can happen. And this is the third consecutive year under this situation. We have -- we are showing in the stainless steel business in the left part of this slide, the parallelism between Europe and United States because the general situation is more or less the same. PME has been below 50 in both markets for 10 months of the year. So this is very representative of the sentiment, the market sentiment. Apparent consumption has been flat.

It's minus 1.5% in the United States, plus 2.8% in Europe. So that is flat for the third consecutive year. Inventories in both markets are below the historical average. So the situation is more or less the same. And what makes the difference. In United States, we have a very effective Section 232 that, by the way, nobody is questioning.

Nobody is questioning even if there was some rumors about the end of this tariff, but nobody is questioning and the Vice President of the United States said that it was a fake news. So no problem with this. But with this effective tariffs, imports have decreased by 17%, and we keep very healthy market conditions with stable and reasonable prices.

In the case of Europe, it is very clear as we are demanding year-by-year that the saver measures are not effective are not effective and imports are increasing. Imports increased 25%, the opposite than in the United States. And under this situation with a flat market, a depressed market plus increase of imports of 25%, that means that especially if these imports are coming from countries with -- that are not playing this game with the same rules than we are, prices are going down.

And we are in a critical situation of prices in Europe, probably the lowest in the history. Fortunately, we have a very clear strategy, and we are following this, and this help us with -- to compensate the good places, the bad places. We are in the United States, but you're in Europe, but we are also in high-performance alloys. And this is a different market, and this diversification is giving us more stability. I think that our volatility through the cycles is being reduced, thanks to this diversification.

In the case of Europe, HPA is also affected because that's not because there are no projects or projects have been canceled. It's because under this uncertainty, many companies are postponing this investment. So this is why oil and gas sector and chemical industry is going down and that is affecting VDM. But on the other side, we have Haynes in the United States. And Haynes is more focused in aerospace and focus in turbines for the industrial gas power stations. And this is also booming now in the United States, especially because of the data centers and these data centers need a lot of electricity, so they need to build more power plants and they are using turbine gas and that turbines are made with our nickel alloys in Haynes.

So in a challenging situation, in a difficult environment, we are demonstrating that we are -- we have the right strategy that we are resilient and that we are ready for what can happen in the future that we think will be better.

Now if we go to the figures, today, we are not only presenting our year-end results, we have also published in our web page, the consolidated management report audited by PYC. We are well recognized for the transparency and the detailed financial statements. I strongly recommend you to go through it. Most of the questions or the basis for understanding the year 2025 are perfectly explained in our financial statements. Having said that, let's -- I want just to give 3, 4 ideas. You have the figures in the chart.

Let's start by the EBITDA. The EBITDA of the year has been EUR 354 million. By itself, it could be considered it's not a remarkable amount, but we need to put the context of what's taking place in the market. First of all, it's probably the worst market condition ever achieved. The demand collapsed 20% in America and in Europe, in the Western world 3 years ago and still have remained flat. So we are playing in that environment for putting it on place, you can realize that more or less every time our distance from our competitors is getting bigger.

So no one is getting even close to the figures we are reporting. So EUR 350 million in this environment is really relevant, but especially keeping in mind what has been taking place mostly at the year-end with that strong adjustment we have done for EUR 69 million. We have made 2 very relevant adjustments. One is taking place the rejuvenation plan in Acerinox Europa by EUR 9 million, but the most relevant is the EUR 60 million inventory adjustment. Why? What's taking place there?

There are 2 issues, both very relevant in 2025. During the year, we have been experiencing a price decline, mostly in Europe, also in South Africa, but especially worse in the fourth quarter. It could be considered that the prices could not deteriorate more. But what in Europe took place in the fourth quarter is a clear reduction of prices as a consequence also for increase in imports in Europe, anticipating the new measures in place for the year 2026.

So this has its effect. So consequently, at the year-end, we have made a huge analysis of the realizable value of our inventories, keeping also in mind that at the starting of the year, the nickel has been moving up. But in the actual market conditions, mostly in Europe, it's not so simple to believe that it's going to be a pass-through of the nickel cost.

So as a consequence of that, in a very prudent exercise, we have preferred to make a strong inventory adjustments by this side. And in the other, in the huge strategic exercise of working capital reduction, we have also analyzed which material we were keeping enhance in our inventories and plants that in the current market conditions is not easy to sell and has not been rotated and material that for more than 1 year, we have keep it in our books and it's not so easy to consider that we are going to probably sell it in the short term in the current market conditions.

We have preferred to scrap that. This shall be obviously benefiting our raw material purchases expenses in the beginning of the year because we shall use our own generated scrap. It's not going to be taking place a reversal on higher profits because of that, but we have just adjusted that to put it according to the scrap prices. So these 2 effects at the end has this EUR 69 million.

We prefer for not making during the year. We never talk about adjusted and so on. We normally take about EBITDA at the year-end when there are some relevant issues taking place, we normally mention EBITDA and adjusted. For example, last year, the adjusted corrected the EBITDA we were reporting because it appeared the sale of value, which obviously was not a recurring part of the business.

This year, the effect of the adjustment has been in the contrary because at the end, what has been taking place is this fact. It should not have been by this fact, the fourth quarter EBITDA should have been, as appears in the chart, EUR 101 million and EUR 422 million adjusted EBITDA for the tough environment experienced in the year 2025.

We are proud about the figure that we have achieved. If we analyze also the bottom of the chart, we see the net financial debt. Net financial debt, EUR 1.2 billion is also, again, a consequence of our financial strength. It's a consequence that we have enough financial strength for making strategic acquisitions in the low part of the cycle, for moving forward, for making an aggressive expansion plan.

And this is showing this figure. Keep in mind that just in the last year, the acquisition of Haynes, the AAA investment decision, America Alloys and Aerospace increase our net debt almost EUR 900 million. In addition, that 4 years ago also in our strategy of moving forward to the HPA, we also acquired VDM.

So at the end, if not were for our strategy moving to the HPA by acquisitions and integration, we should be in a cash position only by our stainless business. So for us, it's relevant that our financial strength allows us to invest in every part of the cycle, even in such difficult times as today on. But we are not getting just comforted with that. In any case, what we are concentrating is also in generating cash and trying to compensate this increase of debt by a strong cash flow generation, which has been also remarkable in the way of EUR 455 million.

We are keeping our strategy programs. We are keeping our investments. But we are generating cash also for minimizing the effects in our debt. Even though that, I always -- as I always remember, keep in mind that we have now a single covenant in our debt since the year 2009 related to results of EBITDA.

So for us, it's an indicator, it's a KPI that's an internal indicator for us. But none of our leverage contracts is related to any specific debt-to-EBITDA ratio. And then having said that, I also want to remark one issue. 2, 3 years ago, we explained in our Investor Day presentations, our through the cycle, and we were more or less explaining. We consider currently after the big investments done in the past, we are in a through-the-cycle EBITDA of about EUR 700 million.

If we analyze what has taken place after the COVID, we have 2 magnificent years and then 2 years of strong correction. And this year, which has been the worst. If we consider this to be a cycle because the valley and the bottom clearly has been achieved in the year '25, what appears is the average EBITDA of this period has been EUR 764 million, the average. But the average operating cash flow has been EUR 432 million.

So we are generating cash in every part of the cycle. And the range from these horrible years to the remarkable year has been a range from EUR 294 million to EUR 544 million. Some years, the cash flow generation is driven by the profits. Some years, the cash flow generation is driven by the strong exercise of reducing working capital, and we are able to face every water in this condition.

So 2025 has been the valley. We consider that we have reached the bottom. Any case, let me make some quotes. My favorite piece of music is from Handels, every valley shall be exalted. Exhaled in 2025 means we have generated EUR 455 million. We have reduced inventories in EUR 400 million. We have overperformed in sustainability. We have overperformed in the Beyond Excellence plan.

We are keeping a strong organic growth plan at the same time that we are keeping a strong inorganic growth plan. All of these issues should appear in Esther's presentation now for all the financial details. But keep in mind that this year 2025, this valley shall be exalted.

Okay. Thank you, Miguel. Let me now explain you the results by divisions, okay? And I will start by stainless. And let me summarize the main drivers of the quarter. Most of them has been mentioned either by Bernardo or Miguel, but I will centralize what's been the main drivers of the quarter.

First of all, the quarter has been marked by the weak demand, weak demand in both markets, both Europe and the United States. Secondly, the seasonality, especially in our main markets, United States with a decrease in the quarter of around 10% in volumes.

There's been a consolidation price increase in the United States as we announced, and we have the opposite side in Europe. In Europe, Europe has been affected this quarter by the higher volumes prior to the approval of the CBAM. I think this was one of the reasons why fourth quarter was affected by higher inputs and consequently, a higher price pressure, which has led us to lower prices in Europe.

And with all this, we have had extraordinary adjustments in this quarter that Miguel has already mentioned. In the case of stainless, the extraordinary adjustments have been the restructuring provision of EUR 9 million for Acerinox Europa and also an inventory adjustment of EUR 48 million in the case of this division. Out of this EUR 48 million, EUR 21 million is what's been the scrapping materials that Miguel has already explained.

With all of this, our adjusted EBITDA in this division in the quarter has been of EUR 58 million, which compares to the EUR 56 million that we had last year. We are very proud of our successful working capital reduction plan. This has been launched throughout all the group divisions, and this has allowed us to generate EUR 104 million in the stainless division in this quarter.

If I move to the year, and if I -- if we compare to 2024, we have grown 7% in productions in volumes, okay? That's not only affected by the strike that we had last year in Europe, but we have also grown in the United States. In the United States, we have grown around 6%, mostly not because of the demand, but mostly because of the reduction of the imports in that market.

In the opposite side, we have Europe. Europe has been affected by the higher imports this year and consequently, the lower prices. And also to mention in the year is the negative impact in our results of the devaluation of the U.S. dollar. As you know, we consolidate in Europe. We have a lot of results in U.S. dollars. And this has -- this devaluation in the year has impacted more or less around EUR 20 million.

With this, the adjusted EBITDA for the year in the stainless division has been EUR 226 and proud of our cash flow generation, mainly driven by the working capital plan. We have generated in this division EUR 269 million, which is more or less the figure of EBITDA that we are reporting in the year.

Going to HPA, okay? If we go to HPA, I think the strategy of diversification that has been followed by the group, not only in diversifying in high value-added products with high-performance alloy, but also diversifying in the regions where we are really having higher profitability in this time. We have achieved in this division 40% of the EBITDA of the year, okay, with EUR 146 million adjusted EBITDA.

The situation in HPA has been different on one side. We have had a gradual recovery of the aerospace sector, okay? And on the other side -- well, on the other side, sectors like oil and gas or chemicals have been progressively going down due to the uncertainties that Bernardo mentioned, okay, that is postponing investments, especially in big projects. That's what we have -- and even in this situation, thanks to our strategy, we have been able to balance these 2 different positions.

In comparison, year-over-year, it was to mention also that last year, as we mentioned also, we had positive impacts of the nickel. We have tailwinds on nickel of around EUR 30 million. We are not having this year, okay? And the inventory adjustment, we also are releasing an adjusted inventory.

The inventory adjustments in this division have been of EUR 12 million at year-end. The cash generation has been constant in both divisions, both stainless and high-performance alloys and mainly driven by working capital reduction. And this working capital reduction has been especially focused on reduction on inventories. The cash generation in this division in the year has been EUR 186 million.

And if we go to the cash flow, and we start by the fourth quarter, again, the strategy, and you can see there, even the strategy of reducing working capital has allowed us in this quarter to reduce the net financial debt in EUR 55 million despite the high payment of taxes and the high investments in this quarter. The high payments of taxes was already announced. There was an extension in United States because of the floods in the state of Kentucky, and most of the payments of the year have been concentrated in this quarter, okay?

That's the reason for the EUR 97 million. And out of the EUR 240 million reduction of working capital that we have had in the quarter, EUR 200 million is coming from inventories, okay? So really, it's been a high success of the working capital reduction, especially on inventories. And then moving to the year, as Miguel mentioned, we generate cash even in the lower part of the cycle and even increasing activity, okay?

We have generated in the year the same cash flow as in year 2023 when we earn double EBITDA, okay? So even in the low moments of the cycle and even increasing the activity, we have been controlling our debt and generating cash of EUR 455 million, I think you are seeing, and now you have there the year. We are generating EUR 455 million of operating cash flow, almost, again, the reduction coming from reduction of inventories and working capital reduction.

We pay a lot of taxes. Yes, we pay a lot of taxes, mainly in the United States because of our profitability in that market. But this year also, we are paying taxes in Germany and the taxes that we are paid in Germany come from 2023 from the results we had in 2023, which was the best result of VDM in that year, the most highly profitable.

In the side of the interest payments, you see that even with a debt of USD 1.2 billion, we are paying $47 million of interest, which shows the competitive cost of our debt. Under the others, which we have EUR 64 million, it's true that we have also a conversion difference because of the devaluation of the U.S. dollar and part of this conversion difference affect also the -- has had an impact on the reduction of the working capital.

The strong CapEx. We are having a CapEx of EUR 311 million, which is EUR 100 million higher than last year. All the projects that we have for generating higher EBITDA are also invested in the -- in our CapEx, okay? And we maintain a consistent return to shareholders of EUR 155 million.

And with all this, we have increased a bit of our debt, but we have also an impact because of the devaluation and the conversion of the U.S. dollar. okay, the conversion of the U.S. dollar exchange rate has been applied to our cash in U.S. dollar and has -- and this has had an impact in the conversion of EUR 126 million, negative impact of EUR 126 million, which has made our debt to slightly increase from last year. But we are controlling our debt even in moments when we are doing investment and having lower EBITDA, which I think is a great success of the year and the thing that we can be more proud of is this cash generation.

So the main driver for the operating cash flow has been the strong working capital reduction. We made a very ambitious program for years '25 and '26 of working capital reduction. We have, by far, overperformed.

What is also relevant to remark is that it has been done through the whole organization. So this working capital reduction of EUR 406 million for your understanding, EUR 202 million has been taking place in stainless and EUR 204 million in HPA. So it's almost equal, keeping in mind any case that HPA is very few tonnage compared with those of stainless, but in its value is substantially higher and also the maturity of the process is substantially longer.

But it has been done through the whole organization, half on stainless and half on HPA. And also what's relevant is that this is not window dressing. So we have not been focusing on making factoring contracts regarding customers, reverse factoring for suppliers. We have mostly focused on inventories, and we have been extremely active and aggressive in our inventories in hand.

The driver from this EUR 406 million is the EUR 383 million in inventories. And again, I insist half in stainless, half in HPA, EUR 194 million in stainless and EUR 189 million. So it's a global program, and the whole group is absolutely focused and committed on this basis. So this is -- for us, is some of the most remarkable issues we must be proud in this by year of 2025.

As our Chairman mentioned at the beginning of the presentation, we have a very clear strategy. I think it's something that is remarkable and most of our analysts, most of the people that are following realize they have the clearest strategy in the sector. And this is very important for us, and we are keeping since 2020, more or less the same basis, we adapting the strategy we have released this year, a new plan '26 2030, but following the same 4 pillars that we always speak about.

Excellence because we are a commodity maker. We are focusing in making new stainless steel grades, new HPA, but we cannot forget that stainless steel is a commodity. In a commodity, you have to be very competitive and to be competitive today is not enough being good. You have to be excellent. And this is why we are focusing in this. This is productivity. This is efficiency, and this is the way of doing things aligned and through all the organization. We are focusing in added value. we call added value to the HPA, nickel alloys and also the special stainless steel grades that we are developing, and we have been successful in this is trying to fill the pyramid of material that we have presented several years that -- so we are making the base of the pyramid that is stainless steel commodity and then tailor-made grades for our customers and users.

Then we have the top of the pyramid with HPA, very special materials, but we are filling the gap in between with very special stainless steel and grades that are developed tailor-made for our customers. Not it's just a standard grade, but adapted to the necessities to the machinery of our customers. So this is very important, and we can say today that we have the widest portfolio of products in our industry.

And some of our competitors are following this strategy, but they are late. We can before, and we are playing with the best components of this market. Sustainability and speaking about sustainability, always from, of course, social, environment point of view, but very related with our efficiency and with our social action. I mean, efficiency, we are speaking about reducing the emissions of CO2.

This is very important, but it's important because we are more clean than before, but it's also important because we are consuming less gas and less electricity than before. And this is cost. This is efficiency and this is excellence as well. And this is what we are doing, focusing in efficiency, reducing water consumption, reducing electricity, reducing natural gas in our furnaces and trying to put in value what we are doing in our communities because as you know, we have big plants that are normally out of the big cities.

We are in rural areas and other areas where we have to develop the community. We have developed the skills of the people that they don't have when we arrive to these places. And we are cooperating with diversity, with women and minorities inclusion. We are cooperating with developing dual colleges and universities, and we are very proud of this.

So this is why this is not, as Miguel mentioned, for other reasons, but it's not window. This is not greenwashing. This is reality. we are sustainable. And our financial strength that we have spoken a lot about this, but this is the base of all this strategy. So this is what we are doing, delivering through the cycle value creation. And this is the base of our strategy.

If we move to sustainability, at the end, you know because it's public that we have very ambitious targets for 2030, mostly with a continuous effort on reducing 10% the accident rate, but also a 45% reduction on carbon emission for 2030 and -- as much as 90% of recycled waste utilization.

When we analyze the parameters of the 2025, it has been a great success. First of all, by its relevance, we have reduced the lost time injury frequency rate at 15.2%. In addition, we have reduced the carbon emissions, Scope 1 plus 2, almost more than 13%, 13.4% and in recycled waste utilization of more than 79%. So we clearly are on the track.

We are confident that we are more than fulfilling all these ambitious targets. But also what is more relevant as far as I also mentioned that we are well recognized by the quality of our financial statements. We are also well recognized every day more in the sustainability ratings. Apart of the -- all those that we normally mentioned, only in last week, we received 3 new awards. We can only explain today too, by some licenses issues and so on.

But last week, we have been awarded in 2 extraordinary relevant sustainability ratings. One is the Clean 200. So analyzing the largest publicly traded companies in the world of every sector, analyzing 8,300 companies. We are in the list of the 200. We are in the 122 position by the more sustainable revenues.

And then this is revenue sustainable due to our products and our solution. This is absolutely remarkable. And in addition, last week also, we were notified that the Standard & Poor includes in the Sustainability Yearbook of 2026 because of an achievement in 2025. This is an analysis of every sector in all the world of the listed traded companies of 9,200 companies and they are only selecting less than 9%, 850 companies, we are there.

We have obtained the maximum qualification, 100 over 100 in transparency and reporting. And we are above 90% in business ethics, in product management and in health and safety. So also now all the rating agencies are realizing and putting on value and certifying all the works we are doing in this area.

In addition, if we move to the efficiency plan, we are doing on continuous and recurring savings. We launched last year the Beyond Excellence plan for creating EUR 100 million in savings in 3 years. At the conclusion of the second year, we have overperformed and now we have achieved EUR 83 million. So this and the more knowledge we have been developing through all our internal benchmarking on the group and the participation of all our teams, we have realized that we can be again more ambitious and reaching for the coming year '26, the new target of the EUR 120 million. You have the split of which is more or less including in that by order of importance or relevance in this split.

Obviously, the first chapter is customer-centric. This obviously means quality. We are talking mostly about predictive quality, big achievements over there. Big achievements also in efficiency and efficiency in our sector is critical, mostly efficiency in raw materials as well as in variable costs.

We are also overperforming there as well as in research and development. And obviously, in this regard, once again, we need to mention the nodes. We are launching and with great success the EAO, which is produced with 100% renewable energy, which is produced with 90% of recycled material and with a 50% reduction in emissions. So in all these areas, we are clearly overperforming.

Sorry, in regard of the synergies that we are obtaining in the integration of our high-performance alloys in the group, we have achieved the targets, slightly above the target for year 2025. We have obtained in the first year, $12 million. We are confident that we are reaching in 2026, at least the $23 million. Obviously, this year is more concentrating in cost synergies. Gradually also the revenue synergies shall appear as a consequence of cross-selling and so on. And the biggest contribution is coming from now and mostly in the year '28 and '29 when in addition, we shall be running the new equipments in place.

And if we go now to the projects actually in place, the organic growth, you can realize that the end currently in the current years, in this period, we have organic growth investments. If we aggregate all the CapExes appear here, we reached EUR 505 million. Clearly, we are prioritizing for CapEx, the areas where we are -- where there is more warranty return.

Obviously, the first in this warranty return is no other than North American stainless. You know the big expansion we are accomplishing there since year 2023. Actually, it's coming on place in 2026. The crane was installed last year. We announced it as well as the cold roll that has started its trials in 2026 as well as the AP2, the skin pass now shall be starting on the month of April.

So this is mostly now coming during the year 2026. In addition, in Haynes, a part of the acquisition, we are also investing for taking advantage of the excellent momentum coming, not only in aerospace, but also in the gas turbine, we are growing also in VDM in Europe with EUR 63 million. And in those companies where still there is no such a warranty return, but we are doing our best for improve and transform the business.

We are diversifying even more Columbus with the introduction of electrical steel. So now Columbus is able to cover the necessities of the South African and the African market. as well as sporting, but mostly having the most diversified portfolio, which is stainless, it's carbon steel, it's electric. It's allowed also to transform HPA. And in the case of Acerinox Europa, we're also involved in the turning around and also is a relevant part of our programs actually in place. With this, we are clearly in position for the coming years to increase our EBITDA more than EUR 300 million.

So this is a beautiful summary of what Miguel has been mentioning. We started in 2020 with this strategy. We have been not even with the bad years, we suffered COVID, we suffered all the tensions, geopolitical tensions, the disruptions of the supply chain and all the geopolitical situation that we are facing, the tariffs, whatever uncertainty, everything, but we are going ahead with our strategy.

We are going ahead, and we are revising the strategy, but insisting in the same simple and beautiful. You can put the starting point whatever you want in the average through the cycle EBITDA last year, whatever, but we have a potential upside potential of EUR 500 million EBITDA with the organic growth that Miguel has been explaining.

That is including also the possibility that is exciting. It's a fantastic project that we are going with the new investments in Haynes with the new forks and the new furnace. We will have an excess of production of that we will be able to process in North American stainless to make long products. Haynes is focused in flat products. And as we have both flats and long.

So we will start making HPA long products in North American stainless. So making a very boutique project in a commodity factory. That's going to be a game changer. Synergies, EUR 68 million, with the next year, EUR 120 million in total. We believe that we have a potential of EUR 500 million EBITDA in our future. So our future can only be better than our present. And we have a new environment, and this is the thing that is going to change. That's why we think that we have already touched the lowest part of the cycle.

We have a new environment, and we are actively participating in the creation of this new environment. We are actively participating in Washington in Brussels to explain and demonstrate the administrations that the industry is totally essential for our future that we need industry and we need basic industry and we need stainless steel.

We are defining this landscape and prioritizing strategic autonomy. You have seen how the European Commission is changing the wording now. Until a few years ago, it was impossible to speak in these terms. Now strategic autonomy is very common and everybody knows what it is, and everybody knows what are we referring to. But in the last weeks, Ursula von der Leyen, the President of the Commission is strengthening this message.

It's not speaking about the strategic autonomy. It's speaking about independency, the need of independency for Europe, for the European industry. And something unbelievable before that the commissioner of the European community is speaking about a by European program that we need to local purchases, especially for public purchasing called responsible purchases, but also for products or projects that are subsidized or receive any kind of help from the European Commission. This is very important.

Europe is waking up and Europe is realizing that there's no future without industry. And this is the picture that we have here. We have United States, already a protected market with this Section 232 that nobody is questioning. This is applying to every country. It's with a 50% tariff that is not under consideration with no exclusions per country, with no exclusions per product and also extended to downstream product that is very important.

So our best customers are also protected by this Section 232 because tube makers, since makers, screws, all these kind of things that are -- where stainless steel is a big portion of the cost of the product are also included here. So our customers are also included. And of course, the that is avoiding the possibility to do convention between countries to avoid the tariffs.

The other tariffs, who knows? This is today's uncertainty. We have the reciprocal tariffs that has been canceled by the Supreme Court in the United States. Now they are applying Section 122, that is 10% duty and it's a general duty for every country, every product except what is included in Section 232. Let's see it can be increased to 15% because still there's nothing published officially.

And we know that the administration and we are cooperating with that is looking for new tools or new tariffs or reviewing the American law and the American constitution to find out where they can put this protection that in some cases, we can complain because it's a political -- are using tariffs as a political instrument, but in other products or in other terms are necessary to keep a healthy industrial production in the country.

In the case of Europe, we have CBAM that is already in place since 1st of January. There is not a tax. This is not a protection. This is something that to compensate the efforts that we, the European industry are making in decarbonization. What we can say until today is that there's a lot of uncertainties yet. This is -- importers are applying the default values to calculate CBAM. This is very high today. It's going up to EUR 600 per tonne for several countries. The average is around EUR 400 per tonne.

So it's a lot -- in the future, these exporters will have to calculate their own values, and they have to evaluate these values and somebody will have to certify that these values are right. And this is part of the uncertainty that we have. But what is true is that already in January, imports have been low, have been decreased a lot. And in February, it looks like it's going to be more or less the same. So we hope that CBAM is going to compensate the effort that we are doing and will be a kind of filter for unfair or nonsustainable steel coming from other places.

In the case of the new trade measures that we are working hard on this. We have seen and we have during these years that the measures have not been effective, and we need something stronger. We need a strong support and demonstration of the European administration that we need the industry.

What I can say is that in the case of Spain, the Spanish administration is cooperating with us and is helping us a lot and is supporting all these activities in Europe. Of course, the industrialized countries in Europe are supporting our initiatives, but Europe is a complex mechanism. And there are some other countries with other interest. But today, it's clear that we will defend the industry.

With the new system, the target is reduce imports at the level of 15% market share. That means in the case of stainless steel that imports will have to reduce by 15%. So very helpful. If we have a market where imports are only 15%, of course, we will compete because we have enough capacity between the European producers.

But having more stability, having no dumping imports at the end, we'll have a more stable market and we'll have a healthier prices that will help us to generate EBITDA in Europe that will help us to keep on investing and paying dividends to our shareholders that is necessary to keep the industry alive.

Now the situation is improving, as I mentioned at the beginning, we have lower stocks in all the market. And what is positive, the PMI in the biggest economies are turning around. United States from December to January, the PMI went from 47.9% to 52.6%. This is a big change in the European Union from December to February, it moved from 48.8% to 50.8%. So we are -- in both areas, we are in the positive side now.

So we have a future with measures, a future with more industrial activity and a future in which we have developed a very strong and reliable strategy. So that takes us to the end of the presentation. So we consider that we have a good result in 2025, a very good EBITDA in the lowest point of the cycle.

But we are delivering our strategy and nobody is confusing us. So we are following the way that we have defined for Acerinox. And we have a clear strategy that is already in place and is being developed and it's going to be the base for our future success.

We have a better environment. We have a more positive environment for our future. So at the end, it can only be better. So we will start gradually recovering through the year. We will start gradually increasing our EBITDA through the year. And that take us to the -- especially in the second half of the year with the new commercial measures in Europe that will help us. And gradually, we will be increasing, and that's why we said prudently that our outlook for this first quarter 2026 that the adjusted EBITDA is going to be slightly higher than fourth quarter. That's all from the presentation.

Okay. Thank you. Thank you very much, Bernardo, and all the presenters. Let's start now with the Q&A session. We will start first here in the room and then we will move to the conference call. [Operator Instructions]

Congrats on the free cash flow. Just one. You have shown us today your long-term vision, but what should be the levers in terms of regional volumes and pricing that would lead to reach the EUR 500 million figure for EBITDA improve?

So when we calculate the potential of these new investments, all this strategy normally is calculated at historical average of the reasonable price. But still, we have to develop this CapEx program. We have to develop the new equipment. We have to do the ramp-up, and we'll have to, of course, to increase our production with this investment. But it's reasonable because it have been calculated with the actual prices.

Francisco Riquel from Alantra. I have two. The first one is on the U.S., which is your core market. I want to assess how NAS is holding up in the current environment, whether the short-term weakness in the group earnings is also applies to the NAS or it is also mainly related to Europe.

So if you can comment on volume and margin dynamics in the U.S. And also on the EUR 60 million of inventory write-downs, you mentioned EUR 12 million allocated to HPAs. So anything also for the U.S. or if that is mainly the rest to Europe? And my second question is about Europe. CBAM is already effective. So I wonder if you can update on what you are observing in the market since the beginning of the year in terms of import flows, your order book and utilization rates and pricing dynamics or whether you are still dealing with excess inventories in the system?

This is a short question that this is a very long answer. But thank you, Paco. United States, the situation is, as we mentioned, speaking about apparent consumption is still low. It's around 20% below what was normal because it was accumulated close to 30% reduction since 2022.

And the situation of NAS is very healthy. N, you have visited is a great factory. It's the best plant in the world, but at least in the Western world and is looking more or less at 85% of capacity utilization today, improving because our order book is increasing now in the beginning of the year, partly because of the seasonality of our business, but also because we see a very slight recovery.

Too soon to say that. We are finishing February, still we don't have too much information for this. But NAS is performing very well, making money with stable prices and stable costs and stable production at this level that I have mentioned. In the case of CBAM, there's nothing that we can say yet. January imports have been low, but we cannot conclude that that's going to happen for the rest of the year. Let's see how how it works in February, it looks that it's going to be similar than January, and let's see.

I think that I read in the magazine in one of our sector that prices were increasing in Europe because of CBAM. I don't think so. I think that prices are growing in Europe a little bit because nickel price is going up because the market is better and is accepting these price increases and CBAM maybe is giving this support to these activities. But we hope it will work well. But this is an experiment. There's no experience for this. To speak about inventories, Miguel, do you want to.

Yes. As we said before, inventory reduction has been taking place everywhere. The adjustment and the write-off has been done mostly in Europe.

Any other questions here in the room? So we can start now with the questions coming from the conference call. Please, operator, go ahead.

[Operator Instructions] Our first question comes from Dominic O'Kane with JPMorgan.

I have 2 questions. So the -- if I think about the outlook for 2026 and the guidance you've given us for Q1 on EBITDA to be slightly higher. Could you maybe just help us with the bridge about how we think about the cadence of the EBITDA growth coming through in 2026? Is it in your expectation, skewed to the second half? And is that going to be driven by price? Or can you talk to us maybe about specific volumes in the second half of the year that will drive significant improvement in the EBITDA? That's my first question.

Well, the -- sorry, for the year 2026, I think it should be a gradual recovery. More or less, we understand the situation. As Bernardo mentioned, we are in stable -- much more stable environment in America, even though, obviously, there is uncertainty. The uncertainty was the main driver for year '25, but still there is uncertainty on the starting of the 2026.

And we have seen more or less what has been taking place everywhere in the last 2 months. So still even for our customers, the situation is a bit unclear. And our customers are not in position of taking any strategy approach of grow or how to grow because still the rules of the game are not going to be clear.

We see now, for example, in the agreement, Europe and America and so on. So all of you know what we are facing. So it's not so simple. Having said that, when we say that gradually it's going to be moving up, the basis of our performance on the North American market is in stainless are very solid.

We think that the gradual recovery expected in Europe, mostly for the second semester, one since the 1st of July, the new measures taken by the European Union are on place, and this at least should allow us to improve the situation in Europe.

The situation in Europe, first of all, the new rules of the game appear to be favoring the industry and especially from the second semester. In our case, in the plan that we are putting on place and the turnaround plan in Acerinox Europa, we're also preparing everything for taking advantage in the coming future.

We have done the adjustments that we have done for preparing and having everything well prepared, but still what's not clear is when it's coming the reactivation of demand. It's unique. The situation we are experiencing in the last 2 years, it must come. But with the uncertainty, the demand still is a bit dormant. And this is the point which makes difficult to make predictions for the second half of the year. We are doing our best. We understand that gradually, we're going to improve.

We understand that we shall be in position for bringing gradually Europe breakeven maybe for the second half of the year because still at this level of prices in Europe, it's impossible to be profitable for the industry in general. So this is something that must change.

But we have better rules. We are in better condition, but still the demand in Europe has not been reactivated. In the case of the HPA, we are at the end, benefited by our diversification. So now it's coming a proper tailwind for -- especially for the aerospace and the gas turbine generation. This should be clearly benefiting Haynes. But VDM, which is more concentrated in the oil and gas, still that sector appears to be facing a tough challenging year for 2026.

So our strategy always has been diversification for trying to play the cycles and sometimes there are regional prices, sometimes there are by sector. Fortunately, we can grow in HPA, but the growth is going to be driven gradually from the aerospace that is more or less recovering and also the recovering is coming to the flat products and Haynes shall be there as well as to the gas turbine. These are going to be very relevant drivers for the HPA in America in the coming years. So we understand that we are probably moving up gradually during the year, but still there is uncertainties on place. So we cannot have a much more clear vision.

Our next question is from Adahna Ekoku from Morgan Stanley.

First, on Europe, is there any kind of indicative guidance you could give in terms of what uplift from the safeguard measures and CBAM that we've discussed on your profitability? Could we assume that at full run rate in maybe 2027, you could reach normalized volumes of around 600 kt and the normalized EBITDA, which I think sits at EUR 100 million to EUR 150 million? And then just second, on the NAS expansion, what proportion of the 200 kt volumes should we expect to see in 2026?

Thank you for your question. For the first one, there's not much that we can say. CBAM is already in place. And with the actual situation that the Parliament and the European Board plus has accepted what the European Commission proposed. Now they have to meet between the 3 parties. It's called the, and they are starting meetings. They started 23rd of February with the first meeting, and they are supposed to finish by first part of May.

So that means that even trying to push and go fast will be in place 1st of July. How is it going to affect the market and prices, but will depend on the situation when we start having these measures. But still it's difficult to predict. We don't have the crystal ball for this. So I think that the analysts have to make the calculations.

It's something that we cannot speak about prices. For the next expansion, we are already started. First coil was called roll last week. Now when you do the first coil, you have to fix many, many things and do the fine-tuning of the equipment and then we'll start with the ramp-up. So probably this new equipment will be in full production by June.

That means that in this year, we are going to contribute to the EBITDA of us. And of course, it will depend also in the market condition. Today, we are working at 85% of capacity utilization. If we increase our capacity utilization, then the new equipment will bring the 20% so the potential of 20% production increase that we are planning for this equipment.

Our next question is from Bastian Synagowitz from Deutsche Bank.

I've got 2. So my first one is just coming back on the European business. I think you mentioned that with current prices, it's impossible to be profitable in the current market. yet I think, I guess some of the European peers have been profitable in Q4. I guess, generally see some uptick in Q1. So I just wanted to just get back to that point. So is your view basically that you will not be able to get the business back to breakeven just stand-alone with the current market conditions you're seeing, I guess, given that prices have started to trend up a little, probably also taking currently a little bit of market share back from imports?

And do you really need the TDI to turn the business around? And then also, is there actually an earnings level and a return target for the European operations, which you basically have set to yourselves to keep allocating capital to the European operations? That is my first question.

I don't know what our competitors are doing, what our sector are doing in general in Europe. So we are all complaining that under this situation, even if you are a little bit profitable, this is not sustainable because of the level of prices in carbon steel and stainless steel.

We are more or less all in the same situation. Some of us are better or worse than others, but the situation is the same for everybody. We don't disclose results per unit. So we cannot speak about this. Of course, market share, we will increase our market share coming from imports. If we reduce import level from 24% that is today to a level of -- a target of 15%.

So that means there will be 9 points of market share that will be distributed between the European players. We can have from 10% to 15% of that market. So this is more or less what we will increase in our production if finally we have these measures and finally, these measures work as we believe.

Of course, the volumes are very important for our business. So with these new volumes, we think that we'll be able to be above breakeven point. This is the target with all the plans that we have, with the investments that we have, how we're improving with a small little CapEx in digitalization and things to debottleneck things and upgrade our lines, update with the electronics and best technology.

So the factory with these measures, I think, will be in a better position and able to contribute to the profits of the group. We're allocating CapEx to all the plants. This is compulsory. I mean, if you don't invest in a factory like ours, you have to close the factories very, very soon because you always need some investments in maintenance and trying to keep the equipment updated with the new technologies.

And in this case, we are not facing a big CapEx program in the place because even in a company like Acerinox, even being a Spanish company, we don't have an unlimited amount of money to invest. So we have to -- with -- according to our strategic plans, according to our budgets and predictions for the future.

So we have a certain amount of money that we dedicate to CapEx. Fortunately, we have a lot of ideas, and we have more ideas than money. So that means that we have to limit our CapEx program and to limit this CapEx program, we have to give priority to the places where the return is faster. The payback is faster. That especially investing in United States in Hayes and us and second in VDM in HPA in Europe. But we never stop investing because we have to.

If I may add to that, with the expectations in Europe, with the new trade measure, CBAM, it would be remiss will be -- I believe we'll have a problem if we were not to invest a bit on our EPM plants because the future is there. I believe the European plant will -- with these new measures, with the lowering of imports, demand, who knows.

But just with that, prices should go up a bit. And with that, we should be able to capture some of the profitability coming from the European side. As Bernardo said, we are investing heavily in the U.S. as we keep doing because that's where we believe the demand is there. The already protection measures work well and they are improved. So we believe the future is there, but also will be a problem if we were not to capitalize on the return on the turnaround of European business, thanks to these new tariffs that hopefully will be put in place in July.

The next question is from Maxime Kogge from ODDO BHF.

So 2 questions on my side, too. So the first is on CBAM. What's your initial takeaway of CBAM that has been now in place for 2 months? It seems to be driving a little bit of price uptick. Some default values have also been revised upwards. So it seems to be more efficient than it was originally meant to be.

So yes, any view on that would be helpful. And what are the remaining loopholes that you see need to be addressed for it to be fully effective? And the second question is on South Africa because basically, I mean, we've seen some measures taken in countries like Brazil or Mexico where your competitors operate. Could we hope for similar tariffs to be introduced in South Africa and thus address the risk of defection of Chinese imports, which cannot make their way now into the U.S. and soon into Europe?

Thank you, Maxime, for the first question. As I mentioned before, CBAM is very early yet to speak about the -- how it's going to affect our market, what I said. I don't think that prices are going up because of CBAM. Prices are going up because we have more activity in the market and because these raw materials are normally linked with this more activity.

And so -- and we have been able. But at the end, if we have been able to increase our prices to pass some of these raw material prices to the customers is because the market is in better conditions. Otherwise, we will not be able to do it. But I don't think that we can say that CBAM is provoking this price increase. I don't think so, but we will support the better market conditions for sure.

In the case of South Africa, -- you know that we are -- for South Africa, for Columbus, the second market is Europe. And still, we have -- we are exporting to Europe, and we have a lot of clients in Europe that need the South African material, especially ferrochrome. Columbus, as you know, so we have -- South Africa is a big producer of ferrochrome. We have a very competitive ferrochrome price in South Africa. And that means that we can be very competitive in ferritic grades, and we are exporting to some of the European customers, especially in the auto sector.

Having said this, we think that in the future, all these measures are going to be tougher for importers. We are trying to anticipate this in Columbus and trying to diversify in products through the flexibility of the plant.

We think that we have a very strong position in the African market. We have close to 50% market share in the whole continent. And most of that is in South Africa, but in some other countries. And what we're doing is trying to develop the African market because sooner or later, it is true that we have been saying this for many, many years, but sooner or later, Africa will have to wake up and we have that strong position there.

We are making stainless steel in South Africa. We are making carbon steel. We are already making electrical steel and with this new line that we are implementing, so we'll be able to coat this electrical steel to be able to send it to the market. This is the only electrical steel plant in Africa, the same that we have the only stainless steel plant in Africa. So situation is there. South African market is also depressed, but we are also working with the local administration with the South African government to increase tariffs. We had a 5% tariff in South Africa that we have incremented to 10%. And now we are negotiating a tariff increase to 50. That is the magic number that everybody is applying today. So South Africa is the best plant in Africa. It's the only plant there, and it's a very good position, but our market is smaller than Brazil or Mexico. It's not comparable. So that's why we are focusing in the whole continent.

The next question comes from Inigo Egusquiza from Kepler.

The first one is just a clarification on the regulation, Bernardo. On the U.S., you mentioned that nobody is questioning the new tariffs approved by the U.S. administration back in summer 2025, but there were some press comments that the U.S. was thinking on the possibility of changing this new system.

Can you confirm with the information that you have that this is not going to be the case? So this is the first question on the U.S. regulation. On Europe regulation from what you mentioned, Bernardo, the impression is that we are not going to see an anticipation on the new system, new tariffs ahead of July when the existing system expires. So this is the first question on regulation. And the second question is just on CapEx. Probably Miguel, a question for you. What is going to be the CapEx for 2026 going to be similar to the EUR 311 million invested in 2025?

Thank you, Inigo. For the first question, regulation, I don't know, sometimes you are surprised with what you read in the newspapers, but we are -- so we are not being informed of the regulation.

We are actively participating in this regulation. So we have firsthand news about this. And I can tell you that nobody is questioning the Section 232 in the United States. And even when there was that fake news, it was in a very serious media, there was Financial Times, but there was this fake news. So we -- the American steel industry, we call to the government for -- to clarify or not and very, very soon, the Vice President of the United States made declaration saying that was fake news, but there's nothing there.

So Section 232 nobody is questioning it. In case of Europe, yes, you're right. Everything goes slow in Europe, but at least it's moving. And we were optimism, thinking that maybe measures will be in place in around May of this. But with the new information saying that the final conclusion will be taken in by mid-May, it's going to be very difficult because after -- it is only that if they take the decision mid-May, they have to publish the -- they have to publish the law. Once it is published, they have to be translated to the 27 languages of the European Union. So it's going to be difficult to start before 1st of July.

Regarding the CapEx for 2026, the figure should not be far away from the figure of 2025. So probably slightly below as a combination of the starting up final payments on the expansion in NAS taking place at the same time that we are moving, and we have already made the adjudication of the equipments for the expansion also taking place in in Haynes and so on. The aggregated amount of all these figures shall be slightly below that of 2025.

We have no further questions in the queue. So I'll hand back to the management team to wrap up the call.

Okay. That concludes today's conference call. Thank you very much once again for joining us and for your continued support. Thank you very much.

Good morning to you all, and welcome to Acerinox Third Quarter 2025 Results Presentation. As you well know, the geopolitical uncertainties, regional conflicts and tariff wars continue to affect world markets. Consequently, the third quarter has been another challenging quarter. However, as a group, we have demonstrated our resilience in the light of the difficult market situation. As we will explain in this presentation, we continue to focus on working capital reduction and solid cash generation.

During this call, we will hear from our CEO, Bernardo Velazquez; our Chief Corporate Officer, Miguel Ferrandis; and also Esther Camos, our CFO, who will explain our third quarter results and provide outlook for Q4.

Before we start the presentation, let me remind you that this conference call is being broadcast on our website acerinox.com.

And now, I hand you over to our CEO. Bernardo, please go ahead.

Thank you, Carlos. Good morning, everyone, and thank you for attending this presentation. We have released the set of results in the lowest part of a long cycle that is basically defined by the geopolitical conflicts, tariffs, tariffs negotiations and uncertainty. If something can define this part of the cycle is uncertainty and confusion. As how can you prepare a budget for next year? How can you organize your commercial strategy? We don't know whether you will have tariffs with several countries or not, you will be able to export or not. And then everybody is just working in daily basis, is what we call from hand to mouth.

From hand to mouth means that our customers are only buying when it's strictly necessary for them to replace materials. So in this situation, logically, the consumption is quiet and everything has been postponed. The recovery that we expected has been postponed. We have no doubt that this recovery finally will come and that the new trade measures will help the even a stronger recovery of Acerinox.

We have new trade measures in EU or expected to have very soon new trade measures in the EU. We have the Section 232 and other tariffs in the United States, and we are also negotiating some tariffs in South Africa. But in the meanwhile, we need to concentrate our efforts in the short term, and that means that we need to concentrate in cost cutting and cash generation.

With uncertainty with the current situation, everybody preparing the end of the year. Quarter 4 cannot be much better, will be more or less the same reason than Q3, but with a shorter period because the seasonality is very strong in United States and in Germany, and finally, December is half a month. So this is what we are releasing this outlook that we expect Q4 to be lower than Q3, and it's basically because of seasonality. Miguel?

The market -- the main market highlights for 2025 clearly are driven by the uncertainty, as has been mentioned. We are a cyclical company working in a cyclical business. We are in the low of the cycle. And most of the specialists are considering that probably we have reached the bottom, but we still are in the bottom of a cycle. So we must accept that.

The demand has not recovered and is in the third consecutive year in the Western world of not recovery after such a strong correction that was experienced in the year 2023, in which both America and North America and Europe corrected more than 20%. Still we have not recovered that level. So still we are waiting, and the uncertainty is creating these unique circumstances that never in life 3 years -- 3 consecutive years with not recovery in the market.

And as a consequence of that, obviously, there is a clear effect in prices, mostly in Europe as well as in Asia. And consequently, this is having also its effect with a slowdown in some of the Asian countries for moving more production on to Europe, which clearly is not contributing.

Our main advantage is clearly the diversification. Because of that -- we try to explain it in a simple way. In this slide just showing where there are green shoots. We are in advantage clearly to take the most of these green shoots when appearing. So we are sailing in trouble waters, this is clear, but we are taking advantage for the green shoots appearing, for example, in the -- our main relevant market, which is the North American Stainless Steel.

You can appreciate in these traffic lights that where there are more green shoots is in America. The inventories are below historical levels. The imports have been going down. This is as a consequence of the probably commitment to the industry that is a driver of the American market. The administration -- the American administration always has been committed to the industry. The buy American also is a clear characteristic that differentiates the American customers. We are taking advantage of that.

The imports have been going down. In addition, we have new measures. The new -- the increases of the Section 232 obviously has been having its effect. And as a consequence, the prices in the States are having a positive evolution. So this is clearly the market where we have appreciated a sooner improvement.

In the high-performance alloys, this is a bitter sweet. It's bitter because at the end also we are experiencing in this sector the absence of investment that is characterized by the uncertainties. So all the relevant projects are being delayed. So especially the chemical process industry is actually facing that as well as the oil and gas, in which these more or less relevant projects have been delayed.

So as a consequence of that, our European produced high-performance alloys are experiencing -- the order book now is getting slower. But the strategy of diversification and moving to other sectors, which made our decision to invest in the States, invest in Haynes, and especially moving also to the aerospace, creates that now we are in position of taking advantage of the better momentum that is coming from the aerospace industry.

So as a consequence of this, the recovery is coming. We have appreciated already the recovery in the long product nickel base. We are more based in the flat products, and this is now coming and start coming because the supply chain is a bit different. But it looks that for the 2026, clearly, this is a sector which is going to drive the profitability mostly of Haynes. So this is the sweet part.

And then other sectors like the industrial gas turbine also is taking a good momentum, especially now driven by all the investment in data center for –- in artificial intelligence as well as the more or less all the necessary uses for all the hydrogen transition. So this is the part that is positive and probably shall have a better momentum in the coming months and mostly in the '26.

Where we are not seeing yet relevant green shoots is in the European stainless steel market, not in the conditions we have been experiencing up to now. Later on, Bernardo shall explain the new reality. But up to now -- it could be considered that the increase in the apparent demand of 10% is healthy, but clearly, it's not the case when it's coming as a consequence of an increase in imports of 36%.

So the main effect of this, as I told before, still the Asian players are putting material in Europe, especially anticipating what could be the more commitment of the union to the industry. So this is driving this increase in imports. 36% in the current market condition is huge. And as a consequence of this, the inventories are growing. And the final effect is that still we have seen significant price pressures that has been characterizing the third quarter.

So this is more or less the global scape of what has been the situation up to now. Let's analyze now what's coming.

Well, for those of you following Acerinox for many years, you will realize that it's not new to listen to me speaking about trade measures. But this time, finally, we can speak in a positive way. We are not claiming that we don't have measures. We can say -- and it's the first time that we have the opportunity to disclose this to you, to explain this to you that we are very close to have the protection that we were dreaming and asking for many years.

In March, after the tariffs or the new Section 232 in the United States, the European Commission released what was called the Steel and Metals Action plan, in which we identified that most of our petitions were considered. And finally, in 7th of October, the European Commission released these new trade measures, still pending to be approved, but very, very positive.

Just to -- I will read you some quotes just to see the importance of our industry. "A strong decarbonized steel sector is vital for the European Union's competitiveness, economic security and strategic autonomy." That was said by Ursula von der Leyen, President of the European Commission. "And a strong future for Europe is impossible without a vibrant and resilient steel industry." That was said by Sejourne, Executive Vice President for Prosperity and Industrial Strategy.

So we have to be happy and we have to be positive, because at the end, the European Union is moving. You know that it is a slow movement, but finally, they have accepted all our petitions and we are moving in the right direction. These new measures will bring a more competitive and a healthier steel industry in Europe with a drastic reduction of quotas. In the case of stainless steel, can be at the level of 55% reduction in import market share, in steel, in general, is 47%.

Materials above the quotas will have a 50% tariff, double than what we have today. Every anti-dumping, anti-subsidy or anti-circumvention case will be added on top of these tariffs and will apply country by country without exemptions, and the quotas will not be -- will not have a carryover to the next quarter. And what is also important is melted and poured will be considered. Melted and poured, that is the origin of the material will be the place where it has been melted and poured.

This is very important because we are suffering circumvention, very rapid changes in country of transforming the slabs or black coil coming from Indonesia or China. And we are -- we have been invaded by materials rerolled in Taiwan, in Vietnam, in Turkey, in other countries. And this new situation will stop this unfair competition.

What is important now is that at EU we have to implement these measures as soon as possible. Still we have to -- we need the approval of the European Parliament. But we think that we will succeed because there's a strong support to these measures. And after that, the European Council will have to approve it. But generally, it's very good news for the industry. It's very good news not for the next quarter, but it's very good news because that will give us a level playing field. We will compete with fair rules, with fair competition, and then we are sure that the situation in Europe will improve.

In top of this, we have to add what can happen with the CBAM, Carbon Border Adjustment Mechanism, that will start being implemented in 1st of January, still with a lot of uncertainties, a lot of unclear rules, but will also prevent the lack of competitiveness of the European industry based on CO2 emissions, ambition reduction and some other measures.

So in general, I think that we have a better future. We are willing to receive the good news of having these new measures implemented. The safeguard measure will expire in summer '26. We are pushing or trying to accelerate the process as much as we can. Maybe it can be 1st of April or as soon as possible because it's urgent for the European industry to have this kind of measure in place.

So this is good news for our future. This is what we have been claiming for many, many years. You perfectly know that we have been always trying to ask and speaking with the European Commission to develop these kind of measures. And finally, they listened to us and we have succeeded, and we are happy to announce that, that will be very good for the European stainless steel industry.

If we move to the results, both of the third quarter as well as accumulated. In these circumstances and in these days of uncertainty, we are proud to be well understood, we are proud to be reliable as well as predictable. When we presented the second quarter results, we made an outlook for the third quarter that should be in line with that of the second quarter. We have been in line with that of the second quarter, slightly below.

But obviously, when you put it in the equation the depreciation of the dollar, which obviously is our most relevant currency, as well as the situation and the evolution of the prices in Europe, you understand that the results on this third quarter are clearly consistent. And especially, when you put them in the context of the results that other players in the industry are in these days presenting, it clearly demonstrates the success of the diversification and the strategy that we are facing in the last years.

In addition, as a consequence of these weaknesses on the prices that we are announcing, we have made an inventory adjustment at the end of the Q3 for EUR 31 million, preparing ourselves clearly for the more or less realization of our stock mostly in the fourth quarter and especially in Europe. So on this basis, we are proud that at the end if we analyze this EUR 108 million EBITDA or the EUR 321 million EBITDA of the 9 months, at the end, we are in the bottom of the cycle. We are clearly obtaining the average profits and contribution that we're experiencing all during the whole last decade. So it clearly demonstrates that how we – we are now more resilient and we are able to keep this level of profitability.

Also, in these days, it's extremely relevant to put on value the cash flow generation. We have obtained an operating cash flow in the quarter of EUR 152 million, which is almost EUR 300 million, EUR 299 million up to September. And this is also one of the drivers. It's clear that in the current circumstances, it's difficult to increase profitability, but we are able to generate cash and cover our CapExs and our dividends with the cash that we are generating. This is also one of the main values and principles of the company and we are clearly following that.

And then in addition what we have is this level of net financial debt at the end of the quarter of EUR 1.2 billion. When we compare, as appears in the chart, with that of the third quarter in 2024, it was EUR 453 million. So this brings, again, more or less what always has been our strategy, and we feel proud that we are able to invest in any part of the cycle and keep our strategy plan or even develop a strategic plan in any part of the cycle. Our financial strength allows us to do that.

So in these circumstances, in the current circumstances, we make such a relevant investment as the acquisition of Haynes. This is the main comparison with the net debt that we experienced 1 year ago, which fully takes sense. Clearly, our strategy goes there. And at the end, this financial strength allows us that not only we are facing that, we are not experiencing any troubles regarding our leverage. As you know, our -- all our debt is covenant free from every covenant related to profitability. So this is -- for us, it's obviously some KPI that follows our policy, but has no relevance in our debt.

And in addition, we have a -- as always, we have had a high competitive debt that allows us that the finance charges are not killing in these days. The KPI of the debt-to-EBITDA this year obviously appears to be high, but this is something that clearly as a consequence of the possibility of being able to make relevant investments even in the low part of the cycle. So low EBITDA and a relevant acquisition has this effect, but it shall be diluted gradually and especially with a consistent and committed continuous cash flow generation.

Going to the Stainless division. I think there are several factors that are characterizing this quarter. Some of them has been presented along the presentation. First of all is seasonality in Europe, okay? According to the collective bargaining agreement that we signed last year, we have closed production in Europe for 15 days in August. Second factor, I would say, is the weak demand, okay? Weak demand has affected both Europe and United States, but more significantly Europe. The third factor, I would say, it's the import pressure, okay, which has caused the prices to reduce even more in Europe. We are selling in this quarter at the lowest prices in the year.

And in the positive side, we have United States, which are much better situation of prices despite of the weak demand. Also positive is the cash generation of EUR 82 million in the quarter and EUR 165 million, which is a demonstration of our projects of working capital reduction that we have been mentioning along the year.

Going to the figures, the figures reflect exactly the factors that I'm mentioning. On one side, we have a 10% reduction comparing quarter-over-quarter in production. We have also an 8% reduction quarter-over-quarter in sales, which is lower than production because of the higher prices in the United States. The EBITDA is lower by EUR 2 million, but EUR 2 million is exactly the effect that we have because of the depreciation of the U.S. dollar in this quarter. This is the effect that we have in the EBITDA.

And a positive -- and in the positive side, we have the increase of the margins. We are increasing margins in this third quarter despite the lower sales, and margin is 8% instead of the 7% that we have in second quarter.

Going to HPA. In the HPA, due to our diversification to different sectors, we are being able to compensate the negative impacts experienced in sectors like oil and gas or chemicals, which is -- which our factory -- which our group VDM is more exposed to. We are compensating this with a gradual recovery of the aerospace, that affects mostly Haynes.

The EBITDA is lower by EUR 2 million. We are achieving an EBITDA of EUR 32 million and EUR 103 million in the 9 months, okay, which is true that 9 months is also -- has contributed with Haynes this year. And again, the cash generation, okay? We have an operating working cash flow of EUR 70 million in the quarter, which is much better than the second quarter. Most of it is coming by the reduction of inventories, and it's EUR 134 million going to the 9 months.

And capital allocation. We continue generating cash through our working capital reduction plans, which are resulting to be very successful and we are proud of it. In the quarter, we are reducing our working capital by EUR 85 million. And we have been able to generate an operating cash flow of EUR 152 million.

We have had stronger CapEx this quarter of EUR 88 million, as we already announced. We already announced that we were making down payments in this quarter of some of the investments for Haynes. The free cash flow is EUR 64 million. And we have paid -- we have made the payment of dividends to our shareholders of EUR 77 million, which, in the end, has made us to increase that only by EUR 21 million. So we are maintaining the debt despite of the stronger CapEx and also despite the payment of dividends.

Going to the 9 months, which is also very significant the cash generation through working capital. It is true that in the 9 months it's partially impacted by the U.S. dollar depreciation, okay, which is -- which you can -- you see also reflected in the bridge. Then it allows us to -- the operating cash flow in these 9 months has been of EUR 299 million.

We have had CapEx of EUR 212 million. And the figure that I like the most is the free cash flow. Free cash flow achieved in these 9 months has been EUR 155 million, which is exactly the amount of dividends that we are paying, which means that our debt would have remained flat in these circumstances if it wouldn't have been by the depreciation of the U.S. dollar and the effect that it has in our cash in U.S. dollar. In this case, we have increased our debt in EUR 123 million, which is exactly the effect that we had in the conversion to euros of our cash in U.S. dollars.

In this regard, we are able to keep on focus on our clear strategy. As you know well, our clear strategy, if we start from the top to the bottom, we are clearly making relevant investments on growth, especially where we have a warranty return. This means, clearly, in the case of North American Stainless, as you know, we are increasing our capacity at 20%. The new equipment shall be on place from the next year.

This is an investment that we are taking place for the last 3 years. In addition also, as we have a warranty return, we are increasing -- investing in increasing also production and efficiency in VDM by 15%. In those areas, we actually are more exposed to the current circumstances of the market, which is Acerinox Europa and Columbus. We are also making a huge effort not with so relevant investments, but at the end, we are making virtually out of necessity for transforming the business for being prepared for the current circumstances and especially for taking advantage of the market recovery when it comes, but with not relevant investment because still this return is not so warranted and it is not only depending from ourselves but also from market conditions.

But in any case, we transformed the business model of Acerinox Europa. This is already prepared and working. As well as Columbus has demonstrated its ability to become the most diversified steel plant in the world, making not only stainless steel, as well as carbon steel, as well as now moving to the electrical steel, and, in addition, is obviously prepared for processing HPA. So this is more or less what we have been doing most in these 2 areas.

In addition, going to the bottom, we are not only successfully integrating Haynes, our strategy of moving to this AAA investment. We always mention America Alloys Aerospace. The integration is successfully more or less being done and accomplished. And in addition, we have already precised the additional investments to take place in Haynes for the coming future. It has been mentioned. So this is already -- has also been fixed. And as a global consequence, but also keeping our driver of absolute control of the working capital as well as continuous cash generation.

Okay. So everything has been said. In the short term, we are living in this uncertain market, uncertain scenario, where the demand is still weak, has been weak for 3 consecutive years. And this is happening with stainless steel. It's also happening with projects in oil and gas and in the chemical processing industry because this lack of visibility moves to postpone investment, as have been mentioned. So in the short term, it will be still weak. We'll have a fourth quarter basically in the same rhythm like Q3, but with seasonality that we mentioned.

I'm very optimistic in the future, very optimistic, because all the situation of the group with the diversification in different countries and the different materials, the position that we have and all the projects that we are now facing will put us in a very good position to take advantage of the level playing field that is being created in Europe, United States and maybe, why not, in South Africa as well. So very optimistic for the future. Thank you very much.

Thank you for the presentation. Now we can start with the Q&A session. So please, operator, go ahead.

[Operator Instructions] Our first question is from Tristan Gresser at BNP Paribas.

I have 2. The first one is on the U.S. market. If you can comment a little bit on the weakness you're seeing. We're seeing that cold-rolled production for the group is down 5% year-on-year. Does that reflect the demand decline you're witnessing in the U.S.? And any differences between flats and longs? And if I'm not mistaken, you should see in Q4 a greater positive pricing impact. Will that be enough to offset the lower volumes?

The situation in the United States is more or less the same than in Europe, of course, with a better price level, but the situation in the market is more or less the same. In '22, the demand went down by 5%, in '23 it was minus 20%, still is flat in '24 and will be flat in '25. So the situation is more or less the same in both long and flat. We expect a recovery once the situation is more clear.

Normally, in consumer goods materials, in the case of flat products. But we are also waiting for the reactivation of oil and gas that can help the long products, bars for drilling, and also can help all the infrastructure programs in the United States with our stainless steel rebars for bridges. And the situation is more or less the same, flat demand, but with a better level of prices and waiting for the recovery.

In Q4, prices have been what we –- was the consequence of what we announced in Q -- at the end of the second quarter results, we announced a price increase. We have been negotiating with our customers a price increase. And that has been -- we have been able to get this price increase in the customers in which we don't have a longer-term agreement. In some cases, we have 6 months contracts, so we have quarterly contracts. So we have been postponing these negotiations until the contract is finished. So Q3 has been the result of this price increase. Q4 will be more or less the same level. We expect a further recovery, a further increase in Q1 '26.

No, that's very clear. Then if -- you have that pretty severe seasonality into Q4. If I look at group EBITDA for Q4, does it mean it could be lower on a year-on-year basis?

Well, the -- each time we are obviously more American driven. It's North American Stainless, it's Haynes. Also, in the HPA in Europe, normally, December is the slowdown. So as a consequence of that, we announced it's going to be lower. Basically, from the seasonality in America from Thanksgiving to Christmas, it's very low activity. So at the end -- the fourth quarter is not a quarter of 3 months normally in the States. It's substantially 3, 4 weeks shorter. And this is more or less what shall appear in our figures.

This is -- obviously, it still is too soon. We need to see more or less the evolution of the market. We need to see how effective and successful is our working capital reduction as planned, which shall be the effects, obviously, on this, on the inventory adjustment. So we feel comfortable stating that the Q4 shall be lower, and we feel comfortable saying that mostly due to seasonal slowdown. Then I invite you to take your conclusions on your model.

Yes. No. Yes, it's a bit early. And maybe just one last question, if I may. On the -- obviously, you talked positively about the import situation, well, not now, but the measures have been implemented in Europe. But in Europe, we've also seen a surge in stainless semi-finished products, and those are not being covered by the quotas. So do you believe that semi should be included, could be included? And how big is it of a risk if you have CBAM, if you have the quotas on CRC, HRC, but then all these slabs -- all those slabs are coming through. So we would love to have your view there.

Yes. No, for sure that we are asking for semi-finished products to be -- sorry, it's not semi-finished products. Semifinished products will not come to Europe because it will be affected by all the trade measures. What we expect is the measures to be extended also to product where stainless steel has a lot of influence in the cost, means tubes, sinks or this kind of products. But semifinished will be included, will be covered by the quotas. And also CBAM will help to avoid circumvention.

Our next question is from Adana Ekoku from Morgan Stanley.

I've got 2. So first, just to follow up on the U.S. prices. Could you give us a sense of how the contract negotiations are going for 2026, just given the kind of continued weak demand as well as the new volumes coming to market. And you mentioned you expect this to be higher kind of heading into Q1.

Apologies. The line is very unclear, Adana, so we weren't able to get your question. If you could kindly try dialing back in and then we can move on to you again.

In that case, we'll take the next question from Tom Zhang at Barclays.

Yes. Can you guys hear my line? Is that okay?

No, no, no. If I could understand, it's something about in the previous call. It's speaking about U.S. contract negotiations for '26. And we are busy in these negotiations today. There's nothing that we can add. Normally, these negotiations happen earlier, normally start happening in July. And many years in October, we have already finished the negotiations. With the uncertainty and lack of visibility, everything is being postponed. And we are now negotiating. And we expect that in November, December, we will close all these contracts.

It's difficult for our customers to predict volumes. So in most of the cases -- in this previous forecast, we are speaking about repeating volumes in '26. But no idea. That can change in months when the recovery start or once the rules will be more clear.

And sorry for the interruption. So we'll now move on to Tom Zhang at Barclays.

Great. First one for me, just -- you mentioned in the presentation sort of inventories growing now in Europe, and I guess maybe that's a little bit of prestocking ahead of measures. How much further do you think inventories can keep going in Europe? I guess I'm just trying to figure out how much more import prebuying we could see in the next couple of quarters before measures come in and the market normalizes a little bit? That's the first one.

But this is very difficult to predict. As Miguel mentioned, some of the importers can think that it's better to import now because next year will be more difficult, we have more protection or will be -- but it's going to be difficult to predict, which is going to be the effect of CBAM in 1st of January and if the new trade measures are going to be applied in April or in May or when the safeguard measures expire at the end of June. So it is difficult to predict what's going to happen.

If I were an importer, if I were a distributor, of course, I would keep my stocks in reasonable levels, not high because everything can change. The volatility is very high. And we don't think -- I don't think personally that it's a good time to increase your stock. But this is a -- I cannot answer your question.

Okay. Fair enough. And then could you just remind us about the kind of volumes that you send from South Africa? I think historically that was a very export-driven plant. I know you brought the export volumes down a lot in the last few years. I think the last we heard was it was about 50-50 between domestic and export shipments. I'm just wondering does that flow get affected at all by the European trade measures if you send any material from South Africa into Europe?

This is something that we predicted. And we have been working in South Africa in Columbus Stainless to change the situation, because we always thought that the future will be more regional and Columbus will not have the possibility to export big volumes to Europe or to any other region of the world. So that's why we are starting making mild steel in South Africa, and we are also prepared now to produce also electrical steel. So we are concentrating Columbus in the local market.

In the past, it was -- at the beginning, it was 70% export, 30% local. Now we are targeting to have more or less 60% local, 40% export. And in that case, all the volumes exported to the European Union will be into the quota. So we will not have to pay any extra tariff there because the material that will come to Europe will be included in the quota.

Okay. So sort of no change in terms of volumes going from South Africa into Europe. It's already well below the new quota level. And then maybe just a final one for me around NAS volumes, I guess, with the capacity expansion. I think you guys previously talked about first coil meant to come out by the end of the year. Do you have any visibility on that? And maybe any early targets on how long the ramp-up period will be, if any, for the sort of NAS expansion?

The NAS expansion is going very well. So we already installed the crane in the melting shop. But still, we don't have this capacity increase because we are repairing or revamping one of the other existing cranes. But everything is ready. Hot rolling mill is also ready. We will produce the first coil in the cold rolling mill at the end of January. The ramp-up will depend basically in the revamping of our AP #2, that is the annealing and pickling line that we are modifying to absorb the increase of capacity. But that will be ready also 1st of January or early January, and the ramp-up can take 3 or 4 months. So we will be ready for the recovery of the American market.

Our next question is from Bastian Synagowitz at Deutsche Bank.

Hopefully, the line is okay here. Maybe firstly, on Americas. Can I briefly ask, is the softness in the U.S. which you're seeing here in the fourth quarter any more than the usual seasonality, i.e., is this really very much in line with what you're usually seeing? Or is there anything more in it? That's my first question.

No, no, it's more or less -- as I mentioned before, it's the same, more or less the same consumption rhythm that we have had in second quarter and quarter 3. It's more or less the same. There's not additional weakness in the market. No, no, it's just seasonality.

Okay. Then maybe moving over to the HPA business. And I guess third quarter was actually pretty stable, but you still obviously seem to see a lot of softness in energy and also chemicals, as you're saying, I guess, mostly in the former VDM business. So do you think that we have already seen the trough here in HPA? And the contribution, i.e., should we -- sort of would you be comfortable to say that we'll be -- that we'll stay pretty close to these levels and then rebound from here? Is there any color you could give us, any conviction?

And then I guess, secondly, on your investment strategy here, where you have a reasonably big pipeline for investments. Are you confident that these investments still all make sense? Or have you taken at least any action to pace those down and maybe adjust for the current market also in the context of your net debt to EBITDA probably hitting around 3x. I guess you clearly have a lot of comfort on that and I think you express it, but are you still pacing on the CapEx side here? That's my question.

In regarding of the HPA, I think it's differentiated obviously by the areas. As we told before, the weakness of the chemical products industry, obviously, the maturity and the lead times for this sector as well as on the oil and gas are also driving lower order book than normal in the current days. So we clearly assume that the best semester of next year for these sectors are not going to be relevant.

So more or less what we also consider now. And this is – obviously, the consequence of our strategy is that the improvement in the aerospace could compensate. And obviously, when we talk about the aerospace, it shall be more reflected in the States through Haynes, should compensate this weakness that we are going to experience in the chemical process mostly and in the oil and gas.

In the oil and gas, there are some volumes more related to maintenance, but not for new projects. This is obviously for Haynes as well as for NAS, for example, for all the drilling. This end use still is not there. In maintenance, there are some issues. But still clearly, we must take in mind that VDM is mostly covering 2/3 of its production, covering these both areas. The other areas, the automotive shows certain improvement, the electronics remains there.

In the case of Haynes, we shall experience the growth and the clear recovery of the aerospace industry. And the gas generation also, as was expressed, is also doing well. So our understanding is on the global picture for next year, we think that probably shall be more or less compensated the correction or the effect in a global year of this weakness with the other strength. But probably in the first semester, especially for oil and gas and CPI, we do not see now any recovery. So if it comes, it should be more in the second semester.

In regarding of the investments, we are long-term driven. This sector is huge in investments and it's not for thinking on a short-term basis. The investment plan in Haynes and especially the areas where it's focused as well as also what we are investing in North American Stainless for process, HPA takes full sense. It's a growing sector. And also the main driver of the synergies and the future synergies is coming from that. So it's not more or less any type of questioning of the timing of the investments. As also the same circumstances takes place in VDM.

There are investments for increasing not only volume, but it's mostly for increasing efficiency as well as for avoiding dependence from 3 players and having the possibility of make the whole process as much as possible internally. And this is clearly -- the efficient also is coming through that. So it takes sense. So we -- as I said, we are obviously following our debt carefully and making the best in cash generation, but we should not reconsider these investments as they are because of the current level of debt.

As I told before, we are clearly investing on growth where we have a warranted return. And in these cases, it's evident.

Our next question is from Maxime Kogge at ODDO.

So first question is a follow-up on Tristan's one on semis. I think actually you are yourself sourcing some semis on the market, and that's quite recent, especially from Indonesia. So what has led you actually to adopt this strategy recently? And could you go further in that direction? And would there be a case for Europe actually to really focus on the hot rolling or even just cold rolling mill and source its slabs externally given that Europe's production is bound to remain quite uncompetitive compared to some other regions in the world at least in the hot side?

As we mentioned before, we are suffering of unfair competition, especially for materials that have been melted in Indonesia and roll in other countries and entering in Europe with other origins than Indonesian. So that's making -- not only in stainless steel, also in carbon steel, it's making our industry unsustainable. So we cannot live in these conditions. The European steel industry is in real danger, and that's why the Commission is now placing these set of measures that are going to be very important for us.

But still we don't have these measures. We have to do something. So that's why many players started to bring slabs from Indonesia. So we have to do things. So we defend the European industry, or then we close our melting shops and we start bringing material from Indonesia. In this case -- in our case, we only have made one trial. It's not a significant volume.

Okay. That's clear. And second and last question is on South Africa, because there, historically, you had a big competitive advantage because you had access to quite cheap ferrochrome. But now the industry, the local industry is in disarray, and there could be a future when the whole industry will have disappeared. So how do you see the situation there? How does it impact Columbus? What's your view potentially on the export tax on chrome as well that is being envisaged? That would be helpful, yes.

You know that very recently the production of ferrochrome in South Africa was suspended because of the high electricity price, basically because of high electricity price. And the ferrochrome producers were asking for better conditions, because otherwise, they are exporting, instead of producing in the country, they are exporting the chrome ore to China. And China with South African chrome ore has become the biggest ferrochrome producer in the world. They have around 56% or 60% of the world production. And that is why, because South Africa in the last years has lost competitiveness.

Now the situation is better in terms of availability of electricity. There are some negotiations between the ferrochrome producers -- we are included in these negotiations -- and the government asking for better electricity price for the electro-intensive industries as well as an export tax or export duty for the exports of chrome ore that are damaging the competitiveness of the country.

Having said this, we still have access to cheap chrome compared with the rest of the world. We can use it, as we have mentioned many times, in liquid, liquid form. We can use liquid ferrochrome because we have ferrochrome smelter as an enabler company less than 1 kilometer away from our plant. And this is a significant advantage because we don't need electricity to melt this ferrochrome because it's already liquid. And we also save a lot of money in refractories and in electrodes. So still very competitive. And basically, most of the materials that we are exporting to Europe from South Africa are ferritic, because it's our specialty and because we are more competitive.

Our next question is from Inigo Egusquiza from Kepler.

So I have 4 questions, if I may. And the first one would be on the European Union safe measures. If Bernardo, you can share with us what are your expectation in terms of calendaring implementation? I think you have mentioned April, May, but maybe we have to wait until June. If you can share with us what could be potential calendar. I know it's tough. This is the first question.

The second question would be on Haynes International integration. If you can also elaborate and share with us how is the integration going? How are the synergies, the number that you increased? How are things going on this front?

The third one would be on stainless steel. If you can also elaborate a bit how is the profitability of the U.S. versus Europe? I guess Europe is again making losses, but I don't know if they are bigger or smaller than a year ago. And what could be the implications of the new European Union's safe measures for the European business profitability? Can we expect this facility to reach breakeven if the new safe measures are implemented to reach breakeven by 2026?

And the final one, I'm sorry for being long, on the U.S. base prices that you have mentioned. If you can quantify a bit how large has been the base price increase that you implemented during the summer of 2025?

I cannot answer the first question because it's not in our hands. The existing safe measure will expire the 30th of June. So partly we are moving fast in this sense is because we need to finish the process. You know all the European process are long, safe, but long, and have to be ready for -- at the end of June. Of course, everybody is aware of the emergency that we have of these measures, and everybody, including the European Commission is making the best to accelerate the process. So this is -- nothing that I can add. And I have read that could be 1st of April. But we don't have any information on this. We cannot control this process.

Regarding the Haynes integration, we are there, we are satisfied. There has been a huge effort. The integration at the end is more or less with participation of relevant people, not only at VDM, also at NAS, also at Acerinox headquarters. So it's a global team who is accelerating the process of the integration. We are really satisfied of how the things are moving on.

Regarding the synergies, the estimation of the synergies, obviously, the -- we are in the year of the start of the process. The synergies fixed for this first year were EUR 11 million, and we are there. So we have accomplished what has been the analysis for the first stage, assuming that the synergies should gradually be increasing year after year. But those for the first year already we are there, and we are very comfortable with that.

Regarding stainless and the contribution of Europe, okay? We are following our strategy in Europe, which is resulting to be positive. All the KPIs that we are measuring, comparing, going higher value-added, going end customers versus distributors and so on, everything is making us to trust on that strategy that we are following. The problem in Europe is being, as said, is, first of all, demand, and second, import pressure in prices, okay? So this low level in prices, I think, is affecting all the industry.

So we are positive in the future. We are positive with the measures because we think that those measures -- we cannot predict what is going to happen with the prices, but we expect that with these measures in place, the market will be able to increase prices, and that definitely will help in our strategy. The contribution compared to last year is being better, okay? So it's a reflection of that. All our measures are going on the good directions, but still suffering from these price levels and demand.

Inigo, when we are speaking about prices, normally, we are speaking about the prices that are published in several magazines because we cannot speak about prices. We are very sensitive to this. So as Esther mentioned, everybody is speaking that prices in Europe today are very low, around EUR 100 per ton below the average of this cycle and probably below -- EUR 300 per ton below the average of the previous cycle. But we are not speaking about our prices. And in the case of United States, it's exactly the same.

So we are negotiating customer by customer, product by product. Everybody has a different price. And this is something that we cannot disclose. We have -- we announced that we are increasing prices, but this is not an official tariff. We are not publishing official tariffs and say this product will have this price for every customer or whatever. This is negotiations and will depend on everything, situation of the customer, situation of our plant, the need to have more or less orders in several products. So that depends very much. We cannot disclose our pricing situation very much.

Our next question is from Tommaso Castello at Jefferies.

Is the line clear? Can you hear me?

Yes, we hear you perfectly.

Okay. Yes. Sorry. Okay, fine. I was just checking. I have one last question. So you have highlighted cutting costs and cash generation through the management of working capital as key priorities for year-end. So given the ongoing market uncertainty, do you anticipate further opportunities to release working capital in Q4? And if you could remind us of your cost-cutting initiatives to date and if there is any target number and date there?

Well, we are pushing hard in terms of making the best of the working capital in the Q4, and this is a clear guideline that every division of the business is actually focusing. So this has been recurrently restated from the headquarters, and all the group is committed. So in this regard, we understand that this is going to be a strong and relevant effect coming in the Q4. You also can see that one of the Q3, for example, was substantially higher than the Q2. So in this regard, we are clearly focused.

Esther introduced it previously. With the cash generated up to now, we have covered the relevant CapExs up to now, but also the dividend for the whole year. There is no cash-out coming for dividend payment in the fourth quarter. But it's a strong tax cash-out that also is going to take part. So on that basis, we consider that we shall reduce probably the net debt. But a lot of the cash generated through the reduction of working capital also shall be for paying taxes.

So on that basis, it's not going to be -- even though we make our best and we are successful in the discipline of reduced working capital, we are not going to make or experience a huge reduction in net debt because of that, because the tax has to be paid in the fourth quarter according to the circumstances on the areas where we are profitable are clearly there.

In regarding of the other plan, we have now a clear public number of the cost reduction plan that we are involved, but also the plan remain on place. And we are healthy there. But obviously, as much as productivity is higher, as much as they are better appreciated. So sometimes even though we make a huge effort for reduced cost that can increase our profitability, in the current level of prices, not always it's so appreciated in the final P&L, because at the end, as has been previously stated, the magazines are reporting base prices now in these days of around EUR 450.

I remember in the old days, we considered that it was not possible for the industry to be profitable below EUR 900 or EUR 950. Then we developed for being profitable levels of EUR 700. Now we see this level of prices. So still the cost savings that we can obtain that are significant in our business and for our controls and benchmarks, but has less visibility when the market is so poor.

But anyway, remember that -- sometimes we have mentioned that with the volatility of the cycles in the last decade, we have learned to run our plants like the cars. We have the eco mode and we have the export mode. When we are full of orders, we go to export and we try to focus on productivity. When we are in the low part of the cycle, we are not fully at full capacity and then we go to the eco way, I mean, trying to focus on cost.

And this is what we are doing now, trying to be effective and very efficient in all the production, trying to save in everything, in electricity, trying to save in refractories, all the consumables. Trying not to make extra hours. Trying to take holidays when it is possible. And also focusing in our excellent program, our Beyond Excellence plan. That is seen. We published the numbers in quarter 2 for the first half of the year, and it's moving very well. So we are focused in all these projects that will help us to improve our profit and loss account.

Tomasso, regarding this Beyond Excellence plan, as Bernardo mentioned, we published twice a year in H1 and full year results. And in H1 -- well, the target for the year is EUR 45 million. And in H1, we achieved EUR 23 million. So it's -- we are going on track and we expect to be close -- very close to this target by the year-end.

Our next question is from Dominic O'Kane, JPMorgan.

Just one quick question. I just wanted to double check with the Q4 guidance for lower EBITDA quarter-on-quarter. Does that also include any assumption for an inventory revaluation?

No, no, no, the guidance is only including what can be considered adjusted EBITDA.

At this time, we currently have no further questions in the queue.

We have 2 questions from the webcast. The first one is coming from Adahna from Morgan Stanley, and it's as follows.

On HPA, conditions for VDM continue to be weak, which is getting partly offset by Haynes. Can you help us with a split of how these 2 businesses are doing? Or maybe how much lower VDM is tracking relative to its normalized EBITDA, which I think you previously said is around EUR 120 million?

Well, I think we already have explained that. Obviously, still it is a bit early. It shall depend on circumstances, and it still is too early for considering what may take place in the '26. We already have indicated that the order book appeared to be weak for the first half, but let's see what comes later. And on the other side, the recovery in the aerospace industry is coming. So this -- we understand that this shall compensate, but still it's too early to make any commitment in what shall be the profit contribution for that division. So we shall have more visibility probably at the year or when we make the year-end results presentation in February. It still it is too soon.

Thank you, Miguel. And the last question is coming from Marisa Hernandez from Times Square.

What are your expectations for CBAM impact on stainless prices in Europe?

Very difficult question. We still don't know what are the rules of steel. And we know the rules, but we still miss some information that is going to be necessary for this because still we don't know what is going to be the benchmark for the industry. So then we cannot compare prices or different CO2 emissions between importers and this benchmark. And still there's some uncertainties in the formula. So there's nothing that I can add here.

And I also cannot give you information from consultant companies or whatever because the range is so big that some people are speaking about EUR 100, some people are speaking about EUR 500. But this is not the price increase. It could be the effect for importers. So there's no visibility on this. I cannot help you.

Okay. Thank you. That concludes today's conference call. So thank you very much for all your questions and for joining us today. Have a good day.

Thank you.

Thank you.

Thank you.

Thank you.

Good morning, everyone, and welcome to our second quarter 2025 results presentation. The call will be hosted today by Bernardo Velazquez, our CEO, together with Miguel Ferrandis, CCO; and Esther Camós, CFO of the group.

As you all know, this has been a challenging second quarter and first half of the year, marked by significant geopolitical uncertainties, regional conflicts and of course, the tariff war. With no doubt, all of this have impacted the global landscape. During this call, we look forward to discussing the progress we have made in navigating this complex situation.

But before getting started, let me remind you that this conference call is being broadcast on our website at acerinox.com, where you can also find the financial statements and the management report for the first half of the year.

With that, I'll now give the floor to our CEO. Bernardo, please go ahead.

Thank you, Carlos. Good morning, everyone, and thank you for attending this presentation, and thank you, Carlos, for the introduction. .

It has really been an uncertain year. We expected the recovery for 2025. Remember, after 2 consecutive years with the PMI below 50 in the United States, we expected the situation to improve, and that's really improved in January and February, but then in March, we again went back to below 50, with all the uncertainties that are affecting all the markets all around the world.

And basically, we have a lot of uncertainties in our lives. But in this case, I think the tariff war is affecting strongly to our business. Imagine how difficult it is to organize your strategy if you don't know if your customers are going to grow or not based on the different tariffs, you don't know how your supplies are going to be affected by the tariffs, you don't know how your competitors and import competitors will be able to compete or will be feasible to sell in the market.

So all this situation is -- what is finally happening is that everybody is in the situation of wait and see; even in United States. It looks like the situation in the United States is better and it is. But all these uncertainties are also affecting this market.

Nobody is buying more than what is really needed, as we're seeing the market is from hand to mouth. We don't buy more than what is really needed, and many projects are being postponed. So the situation is also affecting to HPA.

So this is basically the general situation, and this is basically what has affected our results. We expected a better behavior in the year and a better behavior in Q2. But still, we haven't defined what is going to be the new rules of the game.

Still, we are waiting for negotiations between the different countries. We expect some agreement between United States and Europe, but still the situation is not coming. And this is what we are putting in our numbers and in our forecast. We are not predicting anything that cannot be predicted today.

We are based on today information, this is what we expect for Q3, where it's not bad taking into consideration that we are in the summer period and normally a slowdown of our markets.

Fortunately, U.S.A. is our major market. And also, we have been diversifying in the last years with VDM and Haynes in HPA and this diversification allow us to have a more standard results. Remember that one of the reasons to enter in HPA was because trying to avoid or trying to reduce the volatility and the cyclical condition of our business. And this is really, really happening today.

We believe that once the situation clarifies and once we have a clear picture of what are going to be the tariffs, the Section 232 tariffs, the reciprocal tariffs and all these things, market will find a way to work with the new rules of the game and the situation will come back to normal.

It is important to explain the situation, particularly of Acerinox Europe. In the last 6 years, we have lived and expected a different crisis. Remember, 2020, COVID; '21 and '22, we had a tremendous energy crisis in Spain and that our energy prices multiplied by time 4; '23 apparent consumption in United States and Europe went down by 20%; '24, we suffered a 5-month strike in Spain; and '25, we have this tariff crisis.

Five totally different origins. But at the end, we are living for 6 consecutive years in a low scenario. And according to the Spanish accounting principles, we have to consider crisis as the new normal. And in this situation, we have made an impairment on the tax credits in Spain that is affecting our results.

It's no cash related and is reversible, but we have to follow the accounting principles and trying to be prudent with our accounting numbers. Having said this, this is -- we're not entering the number because the later Esther and Miguel will explain in detail, just to consider the strong effect of the U.S. depreciation in our numbers.

And of course, again, insisting our geographical and product diversification is putting Acerinox in the best position, in the full position for the new economy and the new situation once the -- all these uncertainties clarifies. And with this, I will pass the floor to Miguel.

Thank you. The positive -- the next slide, sorry, is called More than Resilient. At the end of performance clearly, in the first semester has been much more than resilient. Resilience was probably one of the most used words in the COVID year in the previous low part of the cycle.

The word probably defines better the actual scenario is uncertainty. We have uncertainty everywhere, uncertainties not only in our sector, but uncertainties is also driving our customers. Nobody regarding the tariffs, nobody still knows in every of our sectors.

Any of our customers has yet a clear view of what's going to take place in terms of tariffs when they are going to be finally fully implemented, where -- who is going to be affected, how much is going to be. So as has been explained by Bernardo, no one is taking any specific position.

Everyone -- all of our customers is in a wait-and-see. So we need to face that in addition to 3 tragic wars in different parts of the world. So Europe is affected. This is clearly having its consequences in Europe. We have also the wars in the Middle East, which also provide uncertainties regarding oil and so on. So this is the year we are facing fully uncertain. In that basis, we have proven to be more than resilient.

We have increased our sales compared with the previous first year semester at 10%. We have achieved improvement, 10% improvement in the Q2 compared with the Q1 and we have obtained our first half semester EBITDA of EUR 214 million. This is a first half EBITDA in this environment.

Just analyzing it is you realize that not many years ago, this was our, even above our EBITDA through the cycle. So clearly, all the efforts done in the last years have proven to be effective. And once again, and this is relevant in our sector with a strong operating cash flow. In this environment, even we have been able to obtain EUR 148 million of operating cash flow.

So we are more than resilient to the actual uncertainty era, but in addition, we are keeping our program, we are keeping our strategy. We have devoted EUR 125 million to CapEx in the first half. The -- gradually, this shall have more relevance in the second half of the year because we are keeping our organic growth, we are developing our strong programs of investments in our Kentucky plant for stainless in NAS as well as we are doing our investment programs in VDM and in Haynes. So this is clearly our focus.

We are in position of keeping that. And we are obviously increasing our value added, not only in the plant of Spain, but also we are through this diversification, we go to the high part of the pyramid, as you know, of the added value contribution.

And this is clearly appreciated first with the acquisition of VDM and later on more recently with Haynes. In addition, we keep with our homework for improving all our operating expenses and we shall talk later on about our beyond excellence.

I'm not forgetting any case because it's also part of our DIN sustainability. We have launched -- we shall talk later on. We have launched the new Eco at Acerinox. We have more than 6 types developing in this EcoStainless. We keep being organized -- in terms of our sustainability merits, we keep the gold award by EcoVadis. We should have been in the platinum again if we're not by the social conflict we experienced last year. So this move down our platinum to gold and with a normalization coming for the next year, we are pretty confident that we shall be back again in the platinum.

And in health and safety also, we have obtained an improvement of 8% in addition to filling more or less all our targets in terms of carbon emission reduction. So we must be proud about keeping selling on the actual circumstances with a strong profitability being able to give our strategy and also maintaining our focus on sustainability.

Let me give you some highlights of how is the market today. The general explanation is what I already said, we were in the situation of wait-and-see. Nobody is investing, is postponing investments. This is affecting all the markets, and we -- all the markets are depressed.

The different conditions of the different markets show as I was going to mention, a big difference in results in the 2 groups. In the stainless steel, in the U.S.A., the situation is pretty much the same than in Europe. But with the low demand, remember that demand went down 21% in '23, was flat in '24, it's flat in '25 now.

But with the protection of Section 232, we can keep our prices stable in the area. Now with the new 232 that is not only going to 50% of tariffs, but also is protecting our biggest customers, protecting the customer like appliances, sinks, tubes and other products that we where stainless steel is a big portion of the cost.

Of course, we think that the demand finally will grow once we have more visibility and the situation stabilized, the demand will grow. If you add that the situation in the stock levels is low, we are now 18% below historical average. That means that once we have a more clear picture, the situation for sure will improve and United States is going to be the best market, it's the place to be.

In Europe, the market situation is more or less the same, but with a low demand and low prices, imports have been growing close to 75% in the year. And with this import growth, this material is going to stocks. Stocks are increasing. So basically, we have a lot of pressure in the market with low demand, high inventories, so prices are going down.

The same conditions, same market conditions, different situations and different behaviors of our companies in Spain and United States. So I would like to remember that we are waiting for the post safeguard measures and I hope that finally, the European Commission will take the necessary measures to protect the European market if we want to have our strategic autonomy.

In High Performance Alloys, it is pretty much the same. Oil and gas is projects, projects have been postponed. Chemical process industry is more of the same. Electronics and automotive are stable. And thanks to our last investment in Haynes, we are in aerospace. And aerospace is the best sector today in the economy.

Having said this, Miguel, could you explain our profit and loss account?

Yes. Let's go to the group figures. Later on, our CFO shall speak in detail by our business segments. In any case, relevant facts for the group. First of all, is we -- as we anticipated in our first quarter presentation, the result of the Q2 were going to be higher as they have been. They have been a 10% higher than that of the first quarter.

It could even have been bigger if the dollar-euro should maintain stable, so because of the dollar weakness which, for us, obviously, is a relevant fact, we have experienced an effect of around EUR 10 million. So it could have 20% improvement in a more stable scenario.

And also in addition, at the quarter end, what we have done is an inventory adjustment of EUR 28 million due to the absolutely poor situation of the European market. Still the prices has been talked by Bernardo, the prices are going down. There is -- the demand is extremely weak. -- increased imports of 80% are going through our distribution.

So in that basis, it has been appeared very prudent to make such inventory adjustment for preparing ourselves to the third quarter. So this has been at the end of the quarter in terms of this EUR 28 million.

When we compare with the first semester last year, there are 2 circumstances. One, obviously, is at that time, we have the strike in Spain. So most of the contribution was coming from our most profitable business. But also when we take our most profitable business, which is North America, we must keep in mind the product/mix, especially in the stainless steel.

We are more or less running clearly our mill, but in these uncertainty days, there are sectors which for us are high-margin sectors that are less active. So for example, in the long products or in the whole material, which for us are better margin sectors, there is no activity, there is no investment.

Everyone is waiting for taking a specific decision. We are concentrating our production more in the ferritic types, in the appliances and all these other sectors, which, at the end, the margin contribution is lower. This combined with the effect of a lower extra create this effect of the lower contribution and very good margins but lower contribution than the previous year by North American standards.

This is something that gradually as soon as more or less there is more visibility, the market normalizes, shall be improving. But this is also something that has been taking place during this first semester.

We have made the noncash tax impairment that Bernardo mentioned. So because of that, at the bottom of the P&L, it appeared some loss, which at the end is not a cash out, it's just a clear over prudent scenario for assuming difficult circumstances in Europe and also following the loss for being not only more than prudent, but also having a limit on all the recovery of the tax credits that can be done on an annual basis.

This obviously is an adjustment that should be reversed as soon as the conditions improve. We reached a net financial debt. You know that this for us is really not a headache when you compare at the bottom of the second file last -- 1 year ago, our net debt was EUR 191 million.

We should be probably on cash if we should have not decided to make the strategic investment of Haynes. As a consequence of that, we are showing this net debt of EUR 1,222 million. Obviously, it's also affected by the depreciation of the dollar against the euro, which has had around EUR 120 million impact. It's something that does not concern us.

As you know, we have no any structural problem regarding debt, regarding covenants. All our debt is covenant-free in terms of profitability. It's just more or less showing that at the end, we are in a position of making aggressive strategic investments and acquisitions in the low part of the cycle because of that, the debt appears to be high. But as I expressed before, this is not an issue. And we understand that with a normalization of the market and a higher contribution of the EBITDA, gradually, we shall be able, obviously, to reduce as a schedule.

Going to divisions, okay? If we focus on stainless, we are presenting a better EBITDA -- 20% better EBITDA than in first quarter, okay? And it would have been even better if we take out the effects of the conversion to the U.S. dollar and the depreciation of the conversion of our U.S. dollars into euros.

We continue with the comparison between quarters. We see that with similar production volumes, we are just reducing by 2%, we are getting these better margins. We are growing in margins from 6% to 7%. And this is basically due to the higher contribution from our U.S. markets. And we are progressively increasing the margins in United States.

Regarding Europe, the market situation, as they have explained, is weak. But the main effect in this quarter is the pressure of the imports. The pressure of imports in this quarter is affecting not only the volumes, but also the prices, okay? There is a strong price pressure in Europe, which is negatively contributing to our results.

In terms of operating cash flow, we remain with our program of reducing working capital. And we are maintaining an operating cash flow of -- on line of the EUR 40 million, same as we achieved in quarter 1 despite this challenging momentum.

In the -- when comparing with the figures with 2024, we cannot forget the effects of the strike. It is important to take into consideration that because of the strike in 2024, we were selling more in those markets with higher margins. That's the explanation of the reduction of margins compared to 2024. But as I said, we are increasing margins from first quarter to second quarter, and we expect to continue on that line.

And regarding cash flow, there is also an effect when comparing to 2024, and it is also caused by the strike because we were reducing inventories and selling from inventories because of the non-production in Europe.

If we go to high-performance alloys, in this section and in this division, the operating EBITDA really has been flat, okay? It's true that the reporting, we have EUR 3 million less compared to first quarter, but this is purely an accounting effect. We -- because of the purchase price allocation when acquiring NAS, we did a revaluation of inventories to fair value and now we are releasing that revaluation and it has affected in EUR 3 million.

So if we take out that effect, the result would have in the EBITDA would have been exactly the same as for first quarter. I think that it is important to remark the strategy. I think our strategy of diversification and growing in new markets and new sectors is -- with the acquisition of Haynes is really allowing us to compensating negative with positive effects.

On one side, we have the slowdown on oil and gas and chemicals, but in the other side, we can compensate that with the progressively growth on the aerospace. And the aerospace and the gas tubing, which is where we are more exposed now with -- in the United States. So this is really -- we are really proud of our strategy and how we are able to compensate.

Another effect to take into consideration, and that's especially when comparing to 2025 is the effect of the nickel. We cannot forget the nickel has strong impacts in these high-performance alloys for 2 reasons. One is the content of nickel of the material that we produce; and the second is the higher level of inventories.

And in that sense, we were still positively affected last year by the nickel tailwinds, while in this year, we are slightly on a headwind, so that's also a factor to take into consideration.

And lastly, on the operating cash flow, which has been reduced in this division from quarter 1. This is mainly impacted by the payment of taxes. We have had a payment of EUR 37 million of taxes in the second quarter and that relates to results that we had in 2023. So really was the best year in history of VDM and that is what is causing the cash flow in the second quarter to get up.

And now going into the capital allocation and our cash flow. We have generating an operating cash flow in this quarter of EUR 48 million. Starting with the EBITDA, we had an EBITDA, as mentioned, of EUR 112 million in this quarter.

We are continuing, as mentioned, with our plans to reduce working capital, and this has had a positive effect in this quarter of EUR 73 million. It is true that this EUR 73 million are also impacted by the depreciation of the U.S. dollar, which is what you see on the column Other.

Out of this, EUR 77 million, EUR 52 million is the conversion differences of the working capital, but still reducing our working capital in the quarter. We have paid taxes. And if you compare to last -- to the half, all of the taxes are paid in this quarter. We are paying EUR 47 million of taxes. And with all that, our operating cash flow of EUR 48 million in the quarter, EUR 148 million in the semester.

Going into CapEx. We are growing in CapEx. We have mentioned that we are in a strong year of CapEx, and it will be increasing along the year. This -- in this quarter, we have had EUR 68 million, which is compensated with the EUR 68 million that we have received from the sale of Veru.

Remember that we had a delayed payment in this quarter, and this has been received. So mostly, it is compensated. That is why our free cash flow is EUR 49 million, which is the same as the operating.

And then it comes the effect of the depreciation of the U.S. dollar. Because of our strong position in cash in U.S. dollar, which remains solid, remains strong, we have an effect when converting into euros, and that's the EUR 76 million that we are showing in the last column and which makes our debt to be increasing EUR 27 million in the quarter and achieved a figure of EUR 1.2 billion.

If we go to the half of the year, the effect is even stronger. We have had a negative effect on the debt of EUR 116 million because of that conversion factor and that has been EUR 116 million, okay? So out of the EUR 102 million of increase of net financial debt, EUR 116 million is cost because of this conversion difference.

In sustainability. Once again, we are proud about our safety improvement of 8%. Remember, last year, we committed that reducing all those minor injuries that were taking place as a consequence of the continuous interruption in production, we have achieved that.

In terms of our targets on waste reduction, we are fully committed to the circular economy, and we are getting close to our target of valorization of 90% of our waste. We are already almost in 80%. So we still have more 5 years for filling that target. So we are sure we are going to be there earlier than expected.

In terms of the emissions, we have reduced 25% intensity of our reduction from the base year of 2021. And also in terms of water footprint, we have overperformed our aggressive initial targets. And this motivates us to establish even more ambitious targets. And now we are making in terms of water footprint specific targets for each of the plants according to the local circumstances. So this is a program that we are actually developing and shall be in place in the second semester of the year.

At the end also, we are proud about the great success of the EcoAcerinox. We have gone through more than 6 types of stainless now done in this basis with 100% renewable energy use and with more than 90% recycled material from its source. So with this, we are able to commit and verify and certify to our customers also a 50% reduction in the CO2 intensity. So it has been a great success. We are developing. It's getting well introduced to our customers, and this is something that clearly deserves our recognition to our team for developing and putting it in place.

Going to the Beyond Excellent plan. It's important to say that despite all the organic growth that we are facing and despite of all the new investments, we know very clearly how important is to keep our cost under control in our business.

And this is the origin of the Beyond Excellence plan. In this case, we predicted EUR 100 million saving starting in '24 and '26. The target for '25 is EUR 45 million. And in the first half of the year, we have achieved EUR 23 million, that is 50% of the target.

Just to remember with this how are we following this plan? This is based on individual projects in all the mills. All these projects are not repeated between the mills because when we succeed in one of the mills is extended to the rest of the units and is based in 6 pillars: Efficiency, that is basically optimization of raw materials and consumables, trying to find all the time the cheapest raw material for our basket to produce stainless steel and high-performance alloys; productivity, that is basically working time, and we are playing the new maintenance technologies; customer centric, there's quality and service adapted to customers; and R&D, there is new grades that we are developing adapted to the necessities of the market; supply chain, that is purchasing and store optimization and decarbonization that is the way that we are following our targets in decarbonization with the improvement of our efficiencies, reducing energy consumption, gas and electricity to reduce our CO2 footprint.

Of course, all these things is not only based on our experience and our benchmark between the units as we did in the past. We are applying all our knowledge, and we are playing all the new technologies in digitalization, artificial intelligence to take the right decision, anticipate problems to have the kind of predictive maintenance, but also predictive quality control. And we are happy to say that this new methodology for our residence plans is performing really well. And it's a way to implement a culture of continuous improvement in the company, and I will keep on reporting what is happening in this field.

In regarding of the controllables, we have demonstrated that we are properly selling in these troubled waters of the uncertainties in this year. But in addition, we are clearly focusing on our strategy. And then when you see the main chapters, it's easy to understand. If we go to the upper line, we are investing and we are making relevant investments in that part of the business where we are obtaining higher results, higher margins.

And consequently, where the return is warranted to be achieved quickly. This is in the case of North American stainless, we are increasing production capacity by 20%, probably starting from the end of this year. So in an excellent time according to the expected conditions on the American market, especially with more visibility that is gradually coming during the second semester.

So the timing is adequate for NAS. In addition, we are also expanding and investing in VDM Metals, as has been announced, increasing its capacity almost for 10%. So we are concentrating our relevant CapEx in these areas with highest warranty returns.

In the areas which are facing more difficult conditions and more market uncertainties, we are making virtue out of necessity. In the case of Acerinox Europe, as you know, we have been developing a new business model in which with no huge investments, we are able to increase the value added of our production approach directly more final customers and so on.

It has taken a bit more time than expected. And obviously, we need to pass through the strike last year in order for having the implementation in the wage agreement of all the measures that were necessary, finally the other. And in the case of Columbus also what we have been is focusing our strategy on diversifying its range of products and making it the most flexible plants in the group and mainly in the world for creating not only stainless, but also creating carbon steel, producing also electrical steel and now covering the whole range, which is probably the best position for Columbus for not being exposed to exports and also being focusing on covering the necessities on different type of steels at the local market.

And then in addition, at the same time, we are doing that, we are clearly excited and extremely satisfied of the integration process of Haynes. There is a great success on the 22 work streams that have been around the whole group working together in that integration.

We have confirmed that more or less even the initial synergies figure established at 71 probably can be -- and were recognized in the last results presentation that we are now focusing on 75 and maybe it shall be more and they are actually in place. We have been very agile also in the allocations of the investments to be done, and most of the equipments already are in the final process or already have been allocated and in that regard has been very satisfactory working together on integration of the local team at Haynes with the expertise in expansions and investments of our people in Kentucky in NAS with -- obviously, with the know-how and expertise in that segment by the VDM team in Germany.

So the combination and the integration is running fabulously, and consequently, we are going to be broadly obtaining earlier success even than expected. In addition, an area that is obviously our key focus, as we assume the level where we are, the debt that we have incurred for making this strategic approach, and we are focusing in controlling the working capital, which is in our sector and especially for the cash generation is one of our drivers. And as has been appeared in the slides, we are also, in the circumstances, obtaining a great cash flow generation.

Coming to the end, just to remark that we insist that we are controlling the controllables, are going ahead with our strategy. Under this situation, I think the results that we are delivering the best that we can do and that will improve because we are doing our homework. I think this is -- having been in this position as CEO of Acerinox for the last 15 years, together with this team, I think that we have already demonstrated that we know how to surf in these waves.

It's not the first time that we have to go back to our tranches and try to control -- our working capital delivered a good cost reduction and at the same time, trying to improve and do our best to take advantage of our diversification, our localizations and what is happening in the new economy, adapting to the cycles and adapting to the new economy.

And in this sense, the expansion in the United States with organic growth in NAS and with HPA in Haynes, is really -- was a really good decision and we are proud to -- of our strategy. Of course, this is something that we cannot do, if we don't have our traditional financial strength.

And it's also, I think, very important to say that we are investing in the low part of the cycle. And so in the low part of the cycle, with the lowest results, we are capable to afford all these shareholder remuneration and all the CapEx that we have mentioned before.

So we think that we are in a very good situation. We're in the pull position for the new good cycle. And in stainless steel, we are sure that, of course, the conditions in the American market are going to mitigate our exposure to the European market, but also will improve.

In HPA, we have a weak order book, especially in Europe, but we are compensated with a better situation in aerospace. With this low visibility, with this all these uncertainties and trying to considering the facts that we can -- we have today, and we are calculating our forecast. We don't have a crystal ball, but according to today's conditions, we expect Q3 to be in line with the EBITDA of Q2 despite the seasonability of this period.

Of course, the situation changes, the situation improves, we believe that once the tariff situation is stabilized. And once we have a clear picture of what are going to be the new rules of the game, the markets will restart again and the situation is going to be better.

And in this sense, with being in the United States, being in Europe, being South Africa, our 3 strong markets and also being diversified in HPA and all the sectors of HPA from chemical to aerospace, we are in the best position. I think our strategy is the best in the market, and we have a more clear future. So thank you very much.

Okay. Thank you Esther, Bernardo, Miguel, for the presentation. So let's move now to the Q&A session. So please, operator, go ahead.

[Operator Instructions]. The first question is from Adahna Ekoku from Morgan Stanley.

Just on the guidance, as you mentioned at the end, could you help us with the building blocks? Are you assuming kind of broadly stable volumes and prices across Europe and the U.S.? Or is there any kind of price recovery assumed in the U.S. and maybe some lower volumes given seasonality?

We are forecasting a stable situation for Q3. Prices in Europe are low. We don't expect a recovery or I cannot go down more in Europe during the summer season. United States, we are trying to increase our prices, but it's not easy under the current circumstances, but we are working on that, but also considering a stable scenario, more or less considering the seasonability of our business more in July in the United States, more in August in South of Europe. We are considering a stable market, and that's why we are forecasting that Q3 is going to be very much in line with Q2.

The next question is from Tom Zhang of Barclays.

Two questions from me, please. So the first one, just a follow-up around the U.S. So we understand you've been trying to push price increases. We've seen some pretty hefty attempted hikes, I think, north of $300 a tonne on base price. I guess, just any color around how much of that you're baking in into your Q3 guidance? I mean are you being still quite prudent or -- yes, just sort of any color around what we could see in Q3?

And then the other question, just around a potential U.S. listing, I mean, you've been probably a little bit more open about talking around looking at options for the first time. Could you just talk about how far along you are in terms of those considerations? And controlling the controllables, how high a U.S. listing might rank in your list of priorities, please?

You know that price is a very sensitive issue, and we cannot speak in general about prices. The concept of market price is something that I always insist that doesn't exist. I mean prices are negotiated customer by customer, grade by grade, other by other. And in this sense, we see the good condition, we will try to push prices up also defending our customers.

We cannot abuse of our customers, but we are trying to always to get the better price for the condition in which we are working. We are now trying to -- if we identify that there's an opportunity in the United States to increase some prices, not all the market, and we are working on that. But this is basically what I can say about this.

Regarding the U.S. listing, of course, we have to study every possibility if that is creating value for our shareholders. In this case, now we are involved in the Haynes integration. It's our most important topic. And hence, it must be integrated and the best way to have a good integration processes when you own 100% of the company. In this sense, we have the next 2 years, 3 years, there will be focused and 100% focused in the integration of Haynes.

Once we finish with this integration, maybe we can consider the possibility to be listed in the United States. We don't trust very much in the dual-listing. So we are thinking maybe in listing some of our business -- part of our business, especially the American part in the United States, but this is something that still we don't have on the table.

Our next question is from Tristan Gresser from BNP Paribas Exane.

I have 2 as well. The first one, maybe if you can discuss a little bit the free cash flow outlook, if you can confirm if there's been any change to the CapEx for the year what would you expect in terms of working capital into Q3 or Q4? And I think previously, you had expected to decrease net debt by year-end. Is it still the plan? Or are you going to be able to bring it down on a year-on-year basis?

And the second question is just going back to the U.S. I was wondering, I think one of your competitor in Ohio was ramping up a bright annealing line, notably targeting the appliance market. So I was wondering if you're seeing any impact of that, what are your expectations around that? And regarding the tariffs, more generally speaking, on the downstream products, we've seen some reshoring announcement as well. So I'm just wondering if you could comment a little bit on the demand picture there and the potential impact on reshoring?

Okay. Thank you, Tristan. Regarding free cash flow and net financial debt, okay? As we announced and we continue with -- on that line, we are on an expansion phase, and we think that our CapEx is going to grow also in the second half. We expect in the year to be in the range of the EUR 300 million, which is what we have several -- we have announced over the quarters.

We are almost closing and some of them has already been closed the contracts for the investments in Haynes. And that will be payments that will be raised in the second half of the year. So we continue with our expansion in the CapEx and increasing from in the second half probably more than in the first half.

So about net financial debt, we do not expect many changes on the debt. We will try to keep on with similar levels as where we are now and using our working capital to really compensate those increases on the CapEx. And for the second half, we also expect higher tax payments. We had some postponements on the tax on the U.S.

So because of the flows in Kentucky state, so most of the tax payment will come also on the second half of the year. So in the end, of course, we have factors that we cannot control, which is the U.S. dollars and things like that. But at similar levels of U.S. dollars, what we are now, we expect to keep the net financial debt in the level where we are now.

Regarding your question about the competition in bright annealed material in the United States. What I can say is that BA in the United States is a good business. That's why we invested in BA line there. We came first. But it's a good moment. I think there's room for the 2 of us.

Appliances is a sector that is growing in United States. With the current tariffs to appliances with the different countries, plus being included appliances in Section 232, it is normal to think that imports will go down in the future and that the American consumption will increase. So in this sense, most probably, Cleveland Cliffs, they will take a portion of imports of BA material and there's room for everybody. We are fully booked in BA material and probably market needs some more American production.

Our next question comes from Krishan Agarwal from Citi.

One question on Europe. So the markets have been weaker and the prices have been lower. So can you confirm as in what level of profitability the Europe is operating? Is it breaking even or is it loss-making at current price cost spread dynamics? And then are you looking for any kind of a cost optimization into the second half, particularly in Europe?

Thank you, Krishan. I'm sorry, but I can't speak about prices and also, we do not disclose the profitability per company. So we cannot answer the first 2 question. Cost optimization, of course, we have a very strong program of cost optimization in Europe, in Acerinox Europe. And not only cost reduction, but also increasing in the top of the profit balance accounting, improving and increasing our sales or our turnover, looking for more end users, looking for more difficult sector, looking for new stainless steel grades and special stainless steel that can give us with high added value and a better margin. We are working hard on this. And this is what I can say.

Our next question comes from Dominic O'Kane of JPMorgan.

I've got 2 questions. If I could ask the previous question in a slightly different way, are you considering capacity curtailments or closures in Europe at the moment?

And then my second question, if I just go back to recent comments and the comments you made on the U.S. listing. If I understand correctly, are you also considering rather than a straight change of the primary listing an option to demerge your U.S. steel assets, so a separation and the demerger of the U.S. assets only?

No, asking the second question. Still, we are not considering anything. Still, we are busy with the integration of Haynes. If there's different possibilities to be listed in the United States and that can give us more value for our shareholders, we will think in the different possibilities. Remember that multiples in the past were more or less the same in Europe and the United States is since 2018 when multiples started to grow in United States and to go down in Europe. I remember that traditionally, our EBITDA multiple of Acerinox was 8x or 9x. Now we are probably in 5x and some of our American competitors are above 10x. But this is something that came after 2018.

Who knows in a couple of years, how it's going to be the situation. There are different possibilities. We think that for the size of the market, and this is just first impression because we haven't analyzed and studied this issue in depth. But having a dual listing for a medium company as Acerinox is, I think we can lose the liquidity. Moving to United States is a difficult operation, but we can be -- we can make an IPO of the American assets in United States, probably this will be easier, but still it's very preliminary. Still there's nothing decided, and we are not studying seriously this issue.

I forgot to answer the first question is capacity in Europe. The situation in Europe is not of capacity. Of course, if the imports are not limited and doesn't change, we have to establish some capacity reductions or some consolidation, I don't know, but until now have this possibility has not been considered in the European Commission.

And remember that the last time that one of the European player wanted to acquire another one, it was not allowed -- or they were forced to as a remedy to sell one of the assets. This is not easy. I think what we have to -- Europe is a good market and Europe has a good stainless steel producers. We don't have a clear overcapacity in the business. What we have is an excess of low price imports in the area.

Our next question is from Tommaso Castello at Jefferies.

Maybe as a follow-up to last -- to Bernardo's last comment on imports. I was wondering whether like from a macro standpoint, I mean, in carbon steel, we are hearing about rumors regarding China cutting overcapacity by, I don't know, like 50 million tons potentially towards the end of the year. Is there any similar discussion happening for stainless as well? And if you could again give some color on where are like imports mostly coming from?

I remember that it was more than 10 years ago when the WTO implemented the group to discuss the excess of capacity, the overcapacity in the steel sector. Since that time, China started promising to reduce capacity. They are closing some of the old plants but they are building new plants. So what I think is that we have to consider that we have to protect our markets. China in case of stainless steel China plus the Chinese players in Indonesia are now responsible of 72% of the production of our sector. So somebody has to put a limit if China doesn't want to tackle this point, I think that with the markets, the different markets we have to protect. I don't believe that there's a serious discussion in carbon.

And I hope that it really happens, but still is not a reality, and I don't think that is going to happen in stainless yet. What I expect is a reaction in the European Union, strengthening conditions for -- to try to import unfair competition from imports. The main source is basically today is basically Indonesian material that is rolled in other areas as can be Vietnam or basically Taiwan. But this is Chinese or Indonesian materials and origin. That's why we also want to change the rules of origin in Europe and moving to this met and p because if you produce slabs in Indonesia and China and you hot roll these slabs in other country, the origin changes to the new country. So we cannot control the anti-subsidies that were implemented in the EU against Indonesia, for example.

Our next question is from Maxime Kogge from ODDO BHF.

So 2 questions on my side. So the first is regarding the new cold rolling mill in the U.S. So you have hit certain milestones and the start-up is getting there. So I was wondering if you could speak about the ramp-up profile of this new unit. Do you need to go through some certification process with the clients? Or I mean, can it be relatively fast? And can we bank on the something like 20% increase in cold-rolled output already next year?

And the second is -- question is about the tariffs in the U.S. So it seems that the activity is held back by the fact that everyone is counting on the tariffs to go down possibly to 25% What's your view on that? Do you think that the government will stay firm in maintaining this 50% of tariffs? Or will it make some concessions like it has already done with the U.K.?

Okay. The -- so we are going ahead with our CapEx in the United States. We are now -- we finished the foundations of the new cold-rolling mill, and we expect that we'll start the first coil in December at the end of the year. When we made our plan for this CapEx, we are considering a normal growth of the American market of around 2% that basically will -- with this new cold-rolling mill, so we will keep our market share.

So this is going ahead. Not really -- we don't really need special certifications for the new material. Most of the customers has already certify the plant in all the assets and the new cold-rolling mill, in this case, maybe some of the very special end users would like to have a special certification, but it's something that is not going to take a long time to be done. And regarding tariff in the United States, what I can tell you is that this is totally -- today it is totally unpredictable.

So I cannot say what's going to happen. I know that the negotiations -- apparently negotiations between European Commission and United States are very close. Apparently, they are going to put a general 15% tariff for all the European goods. No idea how can this affect to Section 232. What we think is that it's important that we don't have any exemption into 32 and we don't have quotas. So only with these 2 things, it's going to -- the American market is going to be very well protected.

50% is already too much for the Europeans to pay in the United States. So I don't mind if it's 25%, 40% or it's 50%. We are happy the way it is. For the rest of the items, of course, if we protect the rest of the industry, we will protect our customers. So there's no way that we have a protection in the steel industry and then our customers cannot compete with imports of their products. So in this sense, I think that the United States is moving in the right direction.

Our next question is from Bastian Synagowitz from Deutsche Bank.

Just my first one is coming back on your guidance actually for the third quarter and the building blocks there. And again, just focusing on the, I guess, the EUR 28 million negative impact from metal charges in the second quarter. And then I guess also the very big price increases, which you have announced in the U.S., those are two pretty big tailwinds in theory, at least, assuming that those are unwinding and please correct me if the assumption is no longer valid. But from memory, I think you have like 1/3 of your U.S. business in spot and then another 30% in quarterly contracts.

So principally, you should get pretty decent translation from the higher prices as long as these are at least being accepted. So just from your guidance for flat EBITDA in the third quarter, can we assume that your base case basically assumes that the EUR 28 million metal headwind will pretty much continue in the third quarter and that the U.S. prices are not really sticking or impacting in the third quarter?

Or is there anything which goes meaningfully worse against you or which is basically absorbing these two effects, I guess you said that European prices are pretty much stable and I guess, with current low profitability, I don't think that the volume, which you're losing because of the third quarter seasonality in Europe can weigh that much, but it would be great to get a bit more color on that? That's my first question.

Thank you, Bastian. Obviously, the -- as we are saying, there are several uncertainties. We are giving this guidance at the 24th of July. So there is not probably a big room to changes from the info we have today. So as normally, let's say, in the summer season is normally not the common season for thinking on price increases. So in a business as usual or in a business as where usual, once upon a time in Europe, normally, the improvements in prices September. So in the actual circumstances, it's very difficult to see. .

That is going to be a change in the filling and in the business climate to accelerate the reaction of our customers and accelerate the order improvement. So we are not considering relevant prices taking place during the third quarter. As a consequence of that, we have made an inventory adjustment because we understand that with all the pressure on prices, the situation is not going to change.

And because of that, we have made that inventory adjustment for putting our inventory in the realizable value at the actual basis. And this covers probably the reality for August and September. At the end of September, we shall see. If there is more visibility, you finally, if appears that this is an agreement between European and States. If there is more clarity of what takes place in the Russia and Ukrainian war, all these facts may contribute.

So maybe when we present the results of the third quarter, we can give some color for the fourth quarter in Europe. But on the actual basis, we cannot expect any changes. If the market remains as it is, we are more or less to be considered to be in line. If the market shall improve, shall be for the fourth quarter. And also, if still there is a huge deterioration of the circumstances in Europe, which we hope not to be the case, maybe we need to make another inventory adjustment at the end of September. But in principal with this, we are okay.

In regarding the States, at the end everything is as expressed consequence of the same. Still, we are lacking from our customers' visibility on investing on going through projects. This sector is, as I said before, it is a high-margin sector. So we are running a mill with types, which at the end are enough for running a mill enough for having good profits. And as has been indicated, the discussion on prices is customer per customer. We appreciate that we are well based in a market in which the local supply is appreciated. So the Buy American works.

And obviously, this is our advantage. And fortunately, we do not need to compete with the commodities because this is the part that is covered by imports and also imports have raised in the states. So we have our niche, and we are running properly in our niche. But actually, we think that more or less the discussion per customer that may be moving to move prices up shall be gradually during the second semester, but not necessarily for August or September being in changes. So on that basis, the most clear picture we can say is that the third quarter shall be in line with the second quarter. We hope that in the results presentation of the third quarter, we can give a more positive color.

Next question is a follow-up from Tom Zhang of Barclays.

Just one quick one for me. So you're obviously putting a lot of CapEx now into the U.S., I guess, EUR 240 million or so into NAS and then the EUR 200 million into Haynes. Do you know if any of that investment is eligible for 100% expensing or deductibility under the big beautiful bill? And could that be a sort of tax tailwind that we might see this year or next year?

Thank you, Tom. Yes, of course, we are searching for any tax benefit from those expenses. And of course, most of them will qualify, okay? And this will help us just to make the 100% deductibility and extend the payments. So for sure, a lot of it might qualify for the deduction.

So this now concludes the Q&A session. I will hand back to Carlos for any closing remarks.

Okay. Thank you. We have one question from the webcast. The question is coming from Robert Jackson from Santander and it's as follows. Could you give an overview of Columbus in the current environment? Once CapEx plans in VDM and U.S. are coming to a completion, any plans for Columbus considering you invest in the low part of the cycle?

Columbus is following our strategy that is, in this case, focused on the African market and diversification. In this sense, this year, stainless steel market is not in the best situation as is happening in the rest of the world. I think apparent consumption is down by 4%. And we are going ahead with our diversification plan. So we are in carbon steel selling to some South African customers this year with some pressure coming from imports and trying to find to specialize in ferritics and other special grades. -- this is the idea to reduce the dependency on exports.

And in this sense, Columbus is more or less having a good margin and good profitability in South Africa and suffering a little bit because of the conditions of the European market and some other markets. But this is -- everything is going ahead and Columbus is in a good position. I mean we have a very strong position in the African market and today it is not cash burning. I mean, it's okay. Second question is CapEx plans. First of all, Robert, we have to finish our CapEx plans. And every CapEx or every expansion of our plants is a project itself.

So we need to -- we are used to have to be always successful with our investments, but every investment is a challenge, and we have to finish the CapEx -- the growing CapEx in VDM, the organic growth in the United States, the new investments in Haynes to modernize the plant to increase capacity and increase also the quality of the equipment and of the product. We have to work with that to align with North American stainless to combine the assets of the 2 mills trying to enter in new products, trying to spread our portfolio. So we have many things to do. Colombo, we have some plans. We have some CapEx that we are considering, but still this is not -- they are not mature enough to be announced.

Okay. Thank you, Bernardo, Miguel and Esther. As there are no further questions, that concludes today's conference call. Thank you very much again for joining us. And well, we hope that you enjoy your summer holidays, and have a nice day. Thank you.