SSAB Aktie

Good morning, and welcome to this presentation of the SSAB Q2 report. My name is Per Hillström. I'm Head of Investor Relations at SSAB. And presenting today, we have Johnny Sjöström, President and CEO; and also Leena Craelius, CFO.

If we look at the agenda, Johnny will start with an overview of the quarter. Then Leena will present more details on the financials, and then Johnny will come back at the end with the outlook and a summary. And after that, we will have good time for Q&A.

So by that, please, Johnny, start the presentation.

Thank you very much, Per. And I will start by summarizing our Q2 report. And as always, we start with health and safety. I'm happy to see that the trend continues and that we improve our safety KPI and the safety culture is further implemented in our company. I think also it's worth highlighting that our total recordable, the TRIF is also on a lower level of 4.1, which is one of the lowest levels that we've had in the past. So a very positive sign and positive trend.

Now looking at our financial performance and the EBITDA, we can see that our Q2 result is better than Q1 and also better than Q2 last year. We could see that we have had higher shipments as well as higher prices. But I will be coming back to that. Some of these improvements were offset by higher variable costs, mainly related to transportation costs as well as energy costs and to some extent, alloys. We have a good net cash position, and we also strengthened our cash flow during Q2. It's also very positive.

And we have to remember now we did a dividend payment of almost SEK 2 billion or more than SEK 2 billion in Q2 as well. So having that in mind, I also want to emphasize that our strategic direction is firmly on track. The conversion of Oxelösund is continuing. We had some small issues with an appeal, but that has been taken care of now and the power line will be up and running sometime at the end of -- or sometime beginning of next year. So we will be in production a year from now that we will be in production in Oxelösund and that's really a big milestone for SSAB going forward.

The groundwork in Luleå for the mini-mill continues. We've had some smaller issues related to the work environment and safety is our key priority. So as soon as we find something, discover something, we will stop the production, look into what it is, make sure that we have the right procedures to continue the production, keeping the workers safe. I also want to highlight that this project is split into 3 pieces. One is engineering, one is procurement and one is construction. And right now, engineering is a big part of the project, and that continues even though the piling, which is just a small part of the construction is where it's been affected right now.

Also, we have approved some investments in Q2. And one of those investments is the quenching line in Oxelösund. This is a very important step for Special Steel, but also for SSAB and in line with our strategy to increase our volume of unique steel grades. We have seen an increased demand in the defense industry. We also have a very unique product, which is the Hardox 500 Tuf. The demand is very, very high. We've been fully utilized in the quenching line producing these grades in Oxelösund. With this investment, we will be able to produce significantly more of these unique grades. So important milestone for us and also a clear indication that we're fulfilling the strategy that we have going forward.

Some words about Special Steel. We had a good volume. I think the shipments in Q2 was good, much higher than Q2 last year, also slightly higher in Q1. But when we have this Middle East turbulence, it's affecting the freight cost. Special Steel exports most of what they produce. Hence, if the freight cost goes up, Special Steel will be affected by it. Special Steel was also, to some extent, affected by increased energy costs and also alloying costs. So even though the financial performance came in pretty much at the level where we forecasted it, we were sort of hoping for slightly more, but that was offset by increased variable cost.

Prices were up a little bit. I think we have sort of a lag in time and prices probably will continue to go up going forward. But it's still a very stable performance. So you have to remember that.

Now looking at SSAB Europe, shipments were also on a good and stable level, higher than it was Q1, but also much higher than it was Q2 last year. I think what I highlighted in the beginning was the record high level of advanced high-strength steel sold to the automotive. And that's sold into a segment where it's a little bit constrained right now, it shows that we have a product which is quite unique and is attractive to the market. And you were able to increase the profitability or their earnings compared to Q1 and significantly higher than it was Q2 last year. So still a good trend and prices are moving up.

And then we have SSAB Americas, where we can see volumes slightly lower than it was Q2 last year. We have had some transportation issues in the United States, difficulties finding railcars and so on. Hence, are slightly lower. The production levels has been on a good level. The demand is very, very high. It's just that the ability to get all the material out has been a little bit constrained -- being constrained because of railway issues.

Looking at the financial performance, prices went up almost 7% which is good, and they probably will continue to go up. But then again, here as well, they were suffering a little bit from higher transportation costs as well as higher energy costs and also alloying came in higher than we forecasted, but still a decent performance. And then we have the 2 subsidiaries, Tibnor and Ruukki, where Ruukki came in slightly lower than Q1, but pretty much in line at where it was Q2 last year.

And then looking at the financial performance, you can see that they ended up on almost twice as high level as it was last year and significantly higher than Q1, but some of it was also inventory gains, but they were also able to increase prices, and they have been working on increasing prices in areas where they can. And then we have the Ruukki Construction, where the Construction segment hasn't really come back to the level where it should be. We see that the revenues have increased, but that's pretty much in line with our expectations. And it was slightly higher than it was Q2 last year and also higher than Q1. But then looking at the earnings, we can see that the margins were somewhat lower. We have hopes for the future, and we hope that this is going to improve going forward.

With that, I leave the word over to Leena and financials.

Thank you, Johnny. Let's begin by looking at the overview and reflecting a bit to the historical performance. If we start with steel shipments. Performance Q2 was 1,760 kilotonnes. As already mentioned by Johnny, it was improvement compared to previous quarter by 24 kilotonnes and improvement compared to previous year by 52 kilotonnes. If we then move up to the earnings or the revenue, SEK 27.5 billion revenue in Q2, also improvement versus previous quarter by SEK 2.2 billion and versus previous year, SEK 1.9 billion. So good volume development as well as price development.

And if we shortly reflect back to what we guided for versus Q1, all the steel divisions shipment-wise, we were guiding to be stable. We were spot on in Special Steels and even slightly higher in Europe division and Americas. And then comparing the price guidance we gave, we were giving guidance that all steel divisions would be somewhat higher, which means up to 5%. So we were spot on with Special Steels and Europe and even exceeding that in SSAB Americas, where the price increase was 7%.

EBITDA performance, Q2, SEK 3.8 billion, as already mentioned, improvement compared to both Q1 and previous year, which both were SEK 3.2 billion. And in relative terms, we see also improvement when Q2 this year was 14% and last year, it was 12%.

Let's then move into more detailed analysis. And here, we are comparing operating result Q2 versus Q1. The operating result, Q2 was SEK 2.7 billion and Q1 was SEK 2.2 billion. And here, we can clearly see the positive impact from prices and volume, and they were offsetting the variable cost and fixed cost increase. And also, the activity level was higher during second quarter. Thus, we have a positive impact from capacity utilization.

As already mentioned, prices we guided to be somewhat higher. And on group level, average price was 6% higher quarter-on-quarter. Here, we have some positive FX impact supporting. However, the biggest positive impact came from Europe division with SEK 500 million, followed by Americas division, SEK 330 million and Specialties, SEK 235 million. Also positive impact from Ruukki Construction and Tibnor, as Johnny already mentioned as well.

Shipment volumes, 24 kilotonnes higher with positive impact of SEK 160 million. As already mentioned, Americas was increasing volumes by 12 kilotonnes, Europe by 11 kilotonnes and Special Steel was relatively flat quarter-on-quarter. And also Ruukki Construction, as you already saw, had seasonally higher volumes. The variable cost, total impact on EBIT of SEK 510 million. And here, we have a few different elements. We have higher cost of CO2 allowances coming active in Q2, also clearly higher cost for logistics, as already mentioned, and also some raw material costs were higher. The consumption cost is here taking into account and to remind that there is a lag in the purchase price and consumption cost.

Pretty much all raw material categories were higher in consumption during second quarter compared to first one, iron ore, coal, alloys and also slightly higher in scrap cost. Fixed cost, typical seasonal development compared to quarters. And also here, we have impact of salary index increase that we pay in Q2 onwards, but also retroactively for the first quarter. Of course, the summer workers also shown here to push up their fixed cost. And also the activity level was higher. So we had some higher IT and repair-related cost, also a bit higher travel and training costs. And the higher activity level is visible also in the capacity utilization, contributing positively quarter-on-quarter.

And then we have a look at the operating result this year compared to previous year. This year, SEK 2.7 billion and compared to previous year, which was SEK 2.1 billion. Similar trend compared to previous year as was previous quarter, positive impact from prices and volumes, which were offsetting on total, the variable and fixed cost increase and also positive from the higher activity level as capacity utilization is contributing positively. Prices year-on-year on group level were 2% higher.

And here, we have opposite FX impact. So FX is impacting prices slightly negatively. But Europe division contributing SEK 300 million; Americas, SEK 265 million and Special Steel division plus SEK 15 million. Tibnor plus SEK 30 million and Ruukki Construction in this analysis has a negative impact, but that's mainly due to a shifted business mix compared to previous year. Volumes, as already mentioned, 52 kilotonnes higher. Special Steels contributing 220 kilotonnes; Europe 120 and Americas 35 kilotonnes. Ruukki Construction also had higher volumes this year compared to previous year.

Variable cost impact negative, but less than what it was quarter-on-quarter. In the iron ore, the raw material consumption cost is actually lower this year compared to previous year. However, then the coal price is higher. Alloys already mentioned was higher. CO2 emission cost was higher and the logistic costs were also higher. Fixed costs higher than last year. And here, we have majority related to salary index increase, only some higher manning and higher IT-related activities, and capacity utilization, positive SEK 155 million. So improvement in operating result compared to previous year and previous quarter.

Then continuing with the cash flow analysis, strong performance during Q2. If we compare with the previous year, we have higher EBITDA level contributing positively. We have also positive impact from change in working capital. But if we then look at the running rate, this is sort of a typical first half of the year development. First half of the year tends to be negative, which is turning then towards more positive going forward. Maintenance CapEx, really similar trend compared to last year. And then the other line, which is mainly related to CO2 emission allowance transactions, we had quite a few of them during Q2, and we will continue doing the hedging going forward.

If we then jump to the strategic expenditures line, here, we see that the trend was lower than last year. And the running rate compared to last year, we see that it's on the same level. This will naturally pick up towards second half of the year. And the biggest deviation here is actually delayed payments that we have done in the Oxelösund project, but those are mainly related to vendor performance rather than any actual delays. Acquisition of shares. This is related to Ovako Metals transaction Tibnor did in Finland during Q2. And then the dividend payout just below SEK 2 billion also took place in Q2.

Really good performance and compared to previous year, the first half of the year was better and deviation mainly from earnings, lower dividends and good working capital performance. This will then lead to a net cash position end of Q2, SEK 8.6 billion. And as already mentioned, the dividend payout took place during Q2. The gearing ratio is still well in line with our financial targets, plus/minus 20%. End of Q2, it was minus 12%. And we are really, really pleased also to mention that Moody's gave a credit rating for SSAB during this week. Baa2 investment grade with the outlook of stable. We have had good discussions with Moody's, and they are understanding the steel industry really well, and they are supporting our strategy and trusting our financial capabilities. More information on that, you can find on our website.

Raw material already briefly discussed, but here, we can see the development of iron ore price, and this is purchase price. It has gone down compared to previous year, and it was also contributing positively in the bridge analysis. However, the cost of iron ore has increased quarter-on-quarter slightly. Coking coal prices, we can see that have started to develop upwards already during Q1, continued during Q2. And to bear in mind that in the coking coal, the logistics also plays important element. And as they were going up, it will also impact the cost of consumption going forward.

Scrap prices in U.S., as the graph is illustrating, they were higher than previous year during the second quarter. And as this is the purchase price, the consumption cost comes with the lag, and we saw a minor increase in the scrap cost in Q2 compared to Q1. However, then the outlook is that Q3, the scrap cost -- consumption cost should be somewhat lower. We already mentioned also the alloys cost that has climbed up during this year, and it was higher in Q2 also compared to Q1 and already mentioned higher logistics costs and also the cost related to CO2 emission allowances, we have seen that is impacting the variable cost.

Good to remember that Q3, we have a lot of maintenance activities starting and ongoing. All steel divisions will have maintenance activities and then the estimated total impact on the result is around SEK 800 million. Fairly similar trend cost-wise, the full year cost-wise compared to previous year. CapEx guidance, no changes compared to what we have been informing previously. We are still sticking to this annual CapEx plan. Maintenance CapEx will be on a similar level as last year, around SEK 3 billion. Strategic CapEx going up, both in Luleå and Oxelösund and then also other smaller strategic investments starting to take place end of this year.

We have also indicated that the emission allowance-related transactions that took place last year will be on the same level this year. So the estimated purchases is on around SEK 700 million as it was last year. And no changes either on the IT-related cost estimate. The biggest projects, of course, are related to Luleå mini-mill investment and preparation for their ERP system. And the estimate for the full year operating expense compared to previous year is around SEK 200 million higher. So this we have kept also the same.

And I end my part here and give the floor back to Johnny.

Thank you very much, Leena. So then we move on with some outlook and summary. Last time, we spoke about the regionalization that happens both in United States as well as in Europe. And I think it's worth mentioning that and also highlighting that. We see clear signals of the Section 232 impact on the market, which is strengthening our position. We have less imports coming into the United States. And as it is right now in the plate industry, there's a bigger demand than supply, hence, forcing customers to use sheet steel instead of maybe using plates. So it is beneficial.

And also, as I said last time, derivatives are included in this Section 232. That means even if you bring in a bucket, it's made of steel, that means it will be subjected to a tariff. When it comes to the trade measures in Europe, we have the safeguards implemented from the 1st of July. That was also sort of announced last time. We have seen prices moving up because of this, but we've also seen a lot of imports coming into Europe and then prices have dropped a little bit. And we believe that as soon as these inventories are gone, prices probably will be moving up again.

And on top of this, we have the CBAM. The CBAM was implemented from 1st of January, making it a little bit difficult to bring material into Europe for administrative reasons. The tax itself maybe is not as high, but the administrative things around it will make it more difficult. Then there was a new proposal from the European Commission on the ETS structure. We have to remember that the ETS structure we've had, it was implemented in 2005, and it's been there for quite some time, and now it's being revised. I think our position from the very beginning was that we don't want to make any changes. We have made sort of an investment plan for both Oxelösund and Luleå based on existing ETS system and now it's being revised.

I think that the proposal that came out, it looks fairly good. We understand it. It was also a little bit expected because we have to adjust the ETS system to where Europe is right now and also looking at the infrastructure and the availability of fossil-free electricity and so on. So I understand that this change was made and it's going to have a very little impact on SSAB. And then there were some highlights to it as well. I think one of the highlights was that the linking, the free allocation to the investments done in transforming your production into a more fossil-free production. And then also the ability or possibility to get financing from the European Investment Bank as well as also get some funding.

So I think this is a good step, and I think it's the right measures in that sense. Now when it comes to the outlook, we are -- just like Leena said, Q3 is the quarter where we do a lot of maintenance. Hence, we will not be able to ship out the volumes that we normally do like in Q2. So our ability to produce will be limited. But the demand is still there. I think prices will continue to move up, but our ability to ship as much as we did in Q2 will be lower. So the guidance in this case is that we will have significantly lower volumes coming from Special Steel in Europe and then some lower for Americas.

And then looking at the prices, it will continue to go up. We know that. And here, we're guiding for somewhat higher. It's between 0% to 5%, I guess, maybe it will be closer to 5%. But yes, it's remaining to be seen, but that's what we anticipate at least. I think that is all for the outlook. And just to summarize this presentation, we have to remember that we do have still a lot of geopolitical turbulence. The Middle East situation is not over yet. It has had a negative impact on our variable costs. We're hoping that this will be over, that it will be stabilized. But now things are as they are, makes it a little bit more difficult to predict.

I think also our transformation projects, they are on plan still, and I think they are very important for us. And we have to remember now that it's going to be almost impossible to have blast furnace production in Europe after 2040. So this is necessary, and I think it's a good plan that we have. We also made the decision to invest in another quenching line, which is in line with our strategy. I think that's also a very important step for us going forward. And we see profitability earnings improvements, both in Europe as well as in the Americas. And we also see prices are going up and will continue to go up. And then that our shipments will be somewhat lower in Q3 because of the maintenance that we have in Q3.

But all in all, I would say that it's a stable quarter. I think that we performed. We were sort of taken a little bit off guards with the higher variable costs, but still we came out on a decent level. I have high expectations going forward. I think that we are present in the most important segments, markets, and we have a good position for the future. But that pretty much summarizes it, Per, and I'll leave the word over to you now.

Yes. Thank you, Johnny. Thank you, Leena. Now we can prepare for the Q&A. And I would suggest initially in the first round that we limit to 2 questions to get as many people as possible the chance to ask a question. And as usual, please ask the questions one by one to give time to answer in between to make the process smoother. So by that, please, operator, present the instructions for the Q&A.

[Operator Instructions] And your first question today comes from the line of Andrew Jones from UBS.

So just firstly on the ETS, Europe's response to it was actually pretty negative, I guess. I mean you gave some initial thoughts on that. I'm curious where you can potentially benefit from this. Is there any scope for maybe some more CapEx support at the Luleå project? Or I guess that Raahe would qualify at this stage, is that possible?

And also on price hikes, I mean, as you noted, maybe it is a bit conservative here. And I guess there's lags that impact on the 3Q guidance, but I saw that Mittal was aggressively hiking HRC prices already in response to the quota cuts. I'm curious if you see potential for HRC to sort of get into the high 700s in the not-too-distant future? Or do you think the summer seasonality is going to negatively impact the ability to achieve those sort of price increases?

All right. So if we start with the ETS, I think that our initial stand is that we don't want any changes because we made our business case based on the existing ETS system and uncertainty is not good. Now when we've seen the proposal, and we have to remember, it's still a proposal, we don't think it's that bad. I think linking the free allocations to the investment ability, but also giving the market a chance to get funding both in the sense of loans as well as getting real grants, I think these are good things.

A lot of details need to be worked out. We also need to look at the timing. But I think there should be an opportunity for us to get some benefits from this. Otherwise, I would be surprised. So it's too early to draw any conclusions, but I think my -- our initial reaction is not a bad proposal as such. And then to your questions regarding the pricing, it is -- these safeguards implemented 1st of July will help the market and will help the prices to go up. We are certain of that. But then as I said before, we saw a lot of inventory coming into Europe. Inventories went up.

But we also believe we have a rough idea of what kind of volumes we're talking about here, and we have a rough idea of how much time it will take before these inventories are sold out. We think at the end of Q3, these stocks will be sold out and then prices will start moving up again. So what happens now is that we are negotiating quarterly contracts, half year contracts, et cetera. Here, we have a good idea of what the market is expecting. So hence, we know that prices will be moving up. But since -- the way we work now, we can't guide for any higher price increases because it's -- the model makes it such that it's a slow progress for us.

We're not selling so much spot on the spot market. I think the spot market prices will move up in the end of Q3. And to your question, is it going to be above 700? I guess your guess is as good as mine. But there is some likelihood that, that will be the case. But prices will be moving up. And you say that are we conservative? I'm saying like we said last time, it's -- we have a lag in the system. We are negotiating prices now and some of it is -- some of the contracts will be higher and somewhat it's just somewhat higher. But in average, maybe it will be 4% to 6% or something like that in average. It's hard to say, but in that frame, in that ballpark.

Yes. Okay. That's clear. And just one quick follow-up on the CapEx guidance. You've maintained it despite obviously having the safety stoppages in -- as a result of issues at Luleå. I mean, have you -- was the reason why that wasn't maybe deferred partly to next year because of the delays? So why was it maintained rather than cut?

As Johnny was referring, in Luleå project, we have different sort of streams. Engineering has continued and will continue and also the procurement stream has continued and will continue. The standstill was mainly related to the ground preparation work and then we are now sort of rescheduling that. But there is, of course, room to reschedule and catch up. And so far, we haven't updated our budget or schedule. So we are sticking to the CapEx guidance as we presented.

Your next question today comes from the line of Kaleb Solomon from SEB.

Maybe starting off with the inventory levels in Europe. They're still somewhat high, having sort of continued to build up ahead of the new quotas in July. But first, did I hear you right in saying that you expect that to be normalized by end of Q3? And sort of as a follow-up to that, have you -- or do you sort of expect to see any impact on the demand side as a result of the sort of positive price developments in Europe given the just general economic climate, especially if they, as you sort of said earlier, continue to move up after inventories normalize? So just interesting to hear your reasoning on that part.

Yes. I mean, the underlying demand is what it is. I don't think that's going to increase or improve in Europe in the second half of this year. It's just a rebalancing. That means of this 36 million tonnes of imports, half of that will be probably sold from European sources instead. So the demand for European steel will increase, and that's also going to make the prices go up. And to your initial comment, yes, our assumptions are that those inventories that was built up prior to 1st of July, looking at the volumes, it's likely that they will be sold out at the end of Q3. That's what we are anticipating at least.

Okay. That's clear. And just a second on Oxelösund. You're expecting to start production in Q2 next year. Can you give some color on roughly how long you expect that ramp-up to take before reaching some sort of satisfactory utilization level? And as a sort of second question, will you be providing any sort of guidance on what the ramp-up cost will be for that period as we get closer to that date?

Yes. So in Oxelösund, we are only replacing the blast furnace with electric arc furnace. The rest will be the same. So as long as you have the right chemistry from the primary production, you will have the same quality through the rest of the operations. We have a rather large product portfolio in Oxelösund, which means that each product needs to be sort of qualified in a way. So -- but this will probably go pretty fast. We have a very good experience from this. We've done it in the United States with electric arc furnace. And some of these operators will be moved over to Sweden during the ramp-up phase.

So we believe it's going to take less than 6 months and some of the grades will be available through the fossil-free route already after 2 months. Not the whole portfolio, but some of them will be available already after 2 months. And then we will continue the qualification. But 6 months is what we're anticipating. And then regarding the cost, Leena, could you help me out here?

Well, we haven't really calculated that. And of course, it's difficult to calculate. I would say that there is already some higher manning working with the project, and that will sort of continue, but then level out eventually. And then maybe to remind that we do have blast furnace functioning while we are doing the ramp-up. So we most likely see some higher slab inventories as a preparation for the start-up. So all in all, in big picture, the ramp-up impact should be rather modest, I would say. But we will get back to that when we have a bit better plans at the later stage.

Yes. I can second what you said. I think that those costs will be rather modest. And when I saw some figures myself, I was surprised that they were as low as they were actually.

Exactly. But we will get back to that a bit later.

Your next question today comes from the line of Alain Gabriel from Morgan Stanley.

A couple of questions from my side. First, on the U.S. plate or the Americas business, the typical one quarterly lag suggests a low teens ASP for Steel Americas as we head into Q3. Johnny, how do you explain the somewhat lower guide than the lag spot market would suggest? And more broadly, if we look past Q3, where do you see the most exciting end markets for the U.S. plate business? That's my first question.

Yes. So related to the price, I emphasized it last time, we have a lag in our system. It takes a little bit longer for us to implement price increases. But it is happening, and we see it happening. And we had a price increase of 7% in the second quarter. And we already now negotiate quarterly contracts, et cetera. We know prices are moving up, and we have also announced price increases.

And I know that there could be a deviation from what CRU is indicating and that we are a little bit behind. But we will have significant price increases in Q3. And I guess, looking at the guidance that we gave, we were higher than previous guidance, and it could be the case that we end up here this time as well. But from what we know right now, I think that we're between 4% to 6%, and that gives us a somewhat lower -- sorry, somewhat higher price increase, yes.

And which are looking the most attractive there in U.S.

Thank you for reminding me of that. I think it's very much similar to what I said last time -- last quarter. It is the industrial segments, everything which is related to energy, it's growing, transmission towers. And if you look at these server halls, that's being erected pretty much everywhere. We don't sell maybe so much steel into those service halls, but the transmission of electricity to those service halls, they need transmission towers, et cetera, there we sell a lot to.

And then you have wind power, we have oil and gas, we have pipes, tubes. We sell a lot into this, and that demand is still very, very strong. We see some also improvements in the railcars production. Crane business is also improving. We see Mexican capacity moving back to United States. That's just reallocating because we were still selling, let's say, John Deere as an example, we were selling most of what they consumed in Mexico, they will still consume even though they move their manufacturing to United States. But we see some improvements there as well. So -- but in general, those are the segments that we mainly are focusing on.

And a follow-up on that question is on the lead times for plate. Typically, you've always guided for a quarter lead time. The current stretch lead times, does it mean that the lags will hit your P&L much later than what they have done in the past? That's a follow-up on that question.

And my second question is on the costs which seem to have come through a bit higher than what you had initially thought when you've given your guidance for Q2, and you've singled out the logistics and alloy prices. How much visibility do you have into Q3? And how confident are you that your cost guidance on these aspects on logistics and alloys is in the right place today?

I guess maybe Leena, you can answer on the...

Maybe I'll start with the cost guidance. Of course, we know that the raw material consumption cost is -- I assume it's not going down. It's continuing on a stable level. As you saw, the U.S. scrap cost or the consumption cost, however, will be slightly lower during Q3 versus Q2. But all in all, all these much higher logistic costs, high alloys cost and also the elevated cost for CO2 emission allowances, that will be visible in our figures for Q3 and not to underestimate the cost related to the maintenance. So that's good to also bear in mind that cost -- we don't see a big drop. That's my view going forward, rather stable.

And I guess for the first question here, what's the lag between us and the market price. And I would say, it's at least a quarter because we negotiate -- majority of what we negotiate is quarterly contracts. And then we have half year contracts. And sometimes we have yearly contracts. That means that we should be half -- sorry, 1 quarter behind. And if you backtrack where we are now compared to the first quarter, you can see that we are 1 quarter behind. So it's likely that will be the case in Q3 as well.

Your next question today comes from the line of Tristan Gresser from BNP Paribas.

Just a quick follow-up on the Q3 guidance. You flagged that you have those higher prices offsetting higher costs. You guide for raw material costs, and you touched a little bit on energy, alloys and logistics. So you implied it relatively steady, not increasing, not falling. But when you say higher prices mitigate higher costs in Q3, that include both raw material and other costs, right? So is this kind of a neutral margin outlook for Q3? And is that valid for both Europe and Special Steel alike? Or there are differences by division?

So my assumption is that in the United States, the price increases will, for sure, cover for all the cost increases. For Europe, I think it's a little bit more uncertain, especially when we talk about energy as well as when we talk about transportation costs. But the way we see it, it will be covering the costs. I guess, Leena, if you have any other comments on that?

No. But then to remind that then we have the maintenance cost impacting the results. So in relative terms, yes, of course, we always try to compensate with the pricing. Now we had this sort of the lag and mix in Q2. But going forward, it should be sort of more compensating, but reminding the maintenance cost will definitely hit the Q3.

Just a final comment to that, and I think it's important maybe to say that. When it comes to Special Steels, they are much lower when it comes to price adjustments, both when it goes -- price goes down, but also when it goes up. So if some were surprised to see the lower price increase in Special Steel, this is the way it is. It takes time, significantly longer time than it takes for U.S. -- SSAB Americas or Europe. I guess it's even 2 quarters instead of 1 quarter.

Okay. No, that's clear. And maybe just a quick question on Luleå. So you started construction works again. Just to confirm, so there is no cost impact at all from some remediation, some work you need to solve the situation?

And if you are now referring to Q3, we see that there is very limited cost for that standstill that we have now started also in phases to get back to the construction site. The cost related to Q2 when we had also a pause in the construction work, that was also relatively small, ended up being around SEK 60 million that we had to took as OpEx and not capitalized. But in big picture, that's still a small amount all in all. But we don't foresee for Q3 as far as we know now that would have an impact on the cost base.

Your next question comes from the line of Dominic O'Kane from JPMorgan.

I have 2 questions. So I think the broad consensus view is as we get towards Q4 and we work through the inventories, we'll obviously start to see a tighter and higher pricing environment. So in the context of that, could you maybe just talk to us about what your order book currently looks like for Q4? Is it open yet? And how much is available to be filled for Q4 as we start to think about the trajectory into that higher pricing environment?

My second question is for Q2, the Middle East clearly looks like a drag on certain components. But as we look forward, does the Middle East become an opportunity for you in terms of new addressable markets and new sources of demand. So could you just maybe talk to us about if there are obvious opportunities that will potentially present themselves in the Middle East?

All right. We start with your first question regarding Q4 and our order book. So the way we do it now is that we -- for the American market, we open up month by month. And as soon as we open up a month, we're sold out within a day. It's filled up immediately. Customers are -- they really want to buy and they come to us, they contact us and then we sort of give them a rough idea of how much they can buy from us going forward for the rest of the year, and they are eager to buy even more.

So for the SSAB business, I'm not concerned. We can open up the order book tomorrow, and then we will fill it up. The reason why we only take it step by step is because we believe prices will move up even further. So we want to sort of utilize that opportunity, and that's why we take it step by step. When it comes to Europe then and the order book, Special Steels and Oxelösund has been sold out and will be sold out for the rest of the year. When it comes to SSAB Europe, they still have capacity left.

So for Q4, their order book hasn't been filled up, not near. I think it's just -- there's a lot of room still. So that's hard to guess right now how that's going to look like, but we're quite positive, mainly based on the fact that there will be limited re-imports coming into Europe. I think that demand is going to be there.

And then to your second question regarding the Middle East situation, if this could be a new opportunity for us. Yes, maybe, we're not so sure. I guess that would be related to the energy segment. There could be some potential there, but it's not super clear how that would bring a new market for us. It's quite a limited market as it is today. And we have to remember now that for Special Steel there, most of their capacity is sold out. For Americas, it's been sold out, especially for the United States. It's Europe where we still have some capacity left. And I'm pretty sure that we will be able to sell that in Europe. So right now, we don't really need a Middle East market to be fair. And I'm not so sure that's going to be an opportunity for us either going forward.

Your next question today comes from the line of Reinhardt van der Walt from Bank of America.

I just want to go back to the point around costs. Could you just break down for us to the extent you can, where you saw most cost inflation and kind of how we can translate that into a sort of SEK per tonne inflation figure or maybe percentage inflation figure? And if we can just understand how things like energy costs will maybe evolve into 3Q based on what you're seeing right now?

If we do the comparison now Q2 versus Q1, we can clearly see that the logistic cost is a big impact here and also the CO2 emission allowances went up. As you know, the system with CO2 allowances changed going forward from Q2. There is less free allocation and our forecast with the latest price is also slightly higher than in the previous periods. So that does have an impact and also it's based on our production forecast. So higher costs related to that.

And then in all the raw material categories, we saw the increase. And I don't have a percentage split to give you, but we saw increasing consumption cost, especially with coking coal. And here also the logistic import freight has an important role when it has gone up. Alloys, definitely, we see increase in nickel and formaldehyde. Compared to previous year, we also see that zinc and paint has gone up. So a lot of increase here and there.

The percentage split, unfortunately, I don't have to give. And the guidance for Q3 is also a bit uncertain. But as I said, the cost level will not go down, only exception perhaps the scrap consumption cost in U.S., but also there, the reduction is minor or modest. But different elements, definitely the biggest element, CO2, logistics and then the rest between different raw materials. So that's the most I can give you at this stage.

Okay. No, that's good. And I just want to check on Tibnor, there was a pretty big increase in earnings there, a large part being driven by inventories. Can you separate out for us maybe how much was inventory driven? And can you give us any comments around what's happening in the end markets for that business?

The inventory valuation in Tibnor's case is done based on the latest market price valuation. So they definitely have a positive impact. And I believe that versus Q1, the positive impact was around SEK 30 million. So that's sort of the scale that the impact was.

And what was the second question?

Just some commentary around the end markets in the Tibnor business and how conditions are?

Yes. So the end markets for Tibnor is very much related to construction as well as in the industry. They are a distributor covering a lot of different grades from stainless to our products, et cetera, one-stop shop concept. They're moving into doing more processing now and doing solutions for the customers. And I think what they've been working on now lately is to optimize their portfolio, sort of reducing the nonprofitable business and then also increasing prices in areas where they can -- when there is room to increase prices. And they have this Price Excellence Program running to optimize the portfolio and their profitability.

Your next question today comes from the line of Adrian Gilani from ABG Sundal Collier.

Yes. First of all, just a follow-up on the previous questions on Luleå. There have been several starts and stops recently to the construction. I guess how certain are you now that all the issues are resolved and that this won't be paused again?

So for us, safety is our key priority and the safety of the workers is extremely important. We're never going to jeopardize the health for the workers. When we now had -- we detected very, very small amounts of hydrogen cyanide. And due to that, we needed to update the routines. So the contractors had to send back to us how they would secure the safety of their workers with new routines and then we need to approve it and then we continue the production.

I guess now with everything that we've been through, we have now gas measurements all over the site. We also have a procedure for protecting the workers for most of what they can be subjected to when it comes to gases or dust or whatever. So it's more likely that we will not have any interference compared to how it was before. But I cannot guarantee, but it's more likely that we will not have any disturbances.

Okay. I understand that. The second one, you talked quite a bit about distributor levels in Europe or inventory levels in Europe. And can you just talk about what the similar situation is in the U.S. on the plate market? Do you think that part of the strong price trend we've seen recently is driven by some restocking? Or is it fully explained by improving market conditions?

No, I think it's more. The first thing is that the stock market is -- they're almost out of stock everywhere. And they're coming to us begging for more volumes, more capacity, which we can't give them. Hence, they're actually looking for imported material to replenish their stocks even though they're bought at much higher prices. And this is driving prices up. So I'm actually surprised that the stock market didn't foresee this, and it came as a shock to them because they don't have the sort of availability that they should have.

And now they have to buy from a market that doesn't have capacity available for them. Hence, they are now forced to look into increasing the imports at a much higher cost. So that's the situation. Then the question is for how long will this maintain, but it's not the underlying demand. It is more the availability among the distributors and the stockists.

I understand. And just as a follow-up, do you have any similar time projection as you do in Europe for when these inventory levels could become normalized?

Well, they are not restocking at the pace that they were hoping for. We know that for a fact. And hence, the reason why they're starting to import. Because the cost of imported material is much higher, they're only importing small quantities to have some availability. So I think -- and this is just a guess. I think it's going to take longer for them to replenish the stocks, maybe up to half a year, depending on what happens to the market.

Yes, operator, sorry to break in, but time is running. We have time now for one more question.

We will now take your final question. And your final question for today comes from the line of Boris Bourdet from Kepler Cheuvreux.

It's a strategic question on Europe. It seems like now Europe is a better place to be for steelmakers. And at the same time, there is an increased support from authorities to protect the industry. Do you think this provides some recipe for some consolidation in the sector?

Yes. I think most companies are looking into it all the time. It is likely that there will be some consolidations going forward. But that's all I can say. I mean it's hard to guess who's going to look into what company and so on. But I wouldn't be surprised if something will be announced within the next half year.

Okay. Very good. And maybe a very quick technical one, but you seem to be a bit behind budget in terms of the cost in the other segments, like you've guided for SEK 1.4 billion, I think, for the full year, and you're running slightly short of SEK 0.6 billion. So is this guidance still valid? Or do you see some upside here, some downside?

The guidance is still very much valid. Of course, we have a bit of a sort of a timing issue with invoices. And also in the other, we do have this internal inventory elimination, which is going up and down. So that is deviating depending on the quarter, but the guidance is definitely still valid.

That was our final question for today. I will now hand the call back for closing remarks.

Okay. Thank you. Thank you, Johnny and Leena. Thank you for good questions. We know that there was a few more waiting to ask questions, but you are much welcome to contact us here during the day. We will try to get back to you. So by that, we conclude today's conference. Thank you for listening.

Thank you. Thank you very much.

Thank you.

Good morning, ladies and gentlemen, and welcome to this presentation of the first quarter of the year for SSAB. My name is Per Hillstrom. I'm Head of Investor Relations at SSAB. And presenting today, we have our President and CEO, Johnny Sjostrom; and also our CFO, Leena Craelius. And if we look at the agenda, we have the usual agenda here with Johnny starting with the first quarter in brief, Leena will then present more details on the financials, and then Johnny will come back with the outlook. And then we will also have good time for questions at the end. So by that, Johnny, the floor is yours.

Thank you very much, Per, and good morning to all of you. I will start, like I always do, to go through the safety. We still have a rather good safety trend within SSAB. Our lost time injury frequency, which is a rolling 12 months is at 0.49. But if you're looking at the year 2026, we have quite a good start actually. So a really good performance, I think, from the whole organization and the focus on the safety is our main priority.

And I will come back to the Lulea discussions at the end of this presentation. Now looking at our financial performance measured now is the EBITDA. We ended Q1 at SEK 3.2 billion. It is a good and stable earnings. And what I'm happy about is the improvement, both in Europe and Americas, and we'll get back to that in the next coming slides.

And of course, Special Steel is still continue to present a solid performance. And our net cash position, we have some seasonality, and I think that Leena might say something about that in her presentation, but we are at SEK 9.6 billion right now. And like I said, normally in the first quarter, we have higher amounts of cash out than normal. But we have a strong balance sheet, and there is a proposal now to the Board -- from the Board that we should have a dividend of SEK 2 per share. Now the transformation update and sort of the -- I will cover more about the illness in this discussion. But first of all, the conversion of Oxelosund is progressing quite well. We were there in the beginning of this week with the whole Board that was actually yesterday.

And we are -- we can see how it's taking place, how it's progressing, and it's on time and it's on budget. So I think so far, a good performance by the whole project team, and we're looking forward to the start-up that we're planning to have in the beginning of 2027. When it comes to the Lulea transformation project, the construction site has been paused now.

And I just want to emphasize that the most important thing for us and our main priority is the safety of the workers on the construction site. There has been some reports on illness, and we took that very seriously. We were the ones that initiated a construction stop because we wanted to understand more, and we've done enormous amount of measurements. And I think I have more information about that later on. And so far, we haven't seen or found anything that is deviating or which is above the threshold, which makes it a little bit puzzled, but we continue to work on this. And right now, up until now, the additional cost or the stoppage is not material.

It will not have an impact on our overall time plan and the cost is not significant at this point. But we still have a stable production in our production site in Lulea. So the steel work is still continuing according to our plan and our expectations. Now moving into the divisional performance. And first, SSAB Special Steels. We came out on a fairly good level when it comes to shipments, a level of 356,000 tonnes. It's a rather high amount of shipments higher than we were at last year and higher than the year before for the first quarter. I'm very pleased about that.

And also the financial performance was on a stable and high level. I'm happy to see that Special Steel is continuing to deliver on a high level and are quite stable at that level. Then moving into SSAB Europe. The financial performance for Q4 was significantly lower than Q1 2026. I think that what makes me most happy is that they had a record high level of sales of advanced steels, which is according to our strategy and sort of the direction that we have set. And also it's the foundation -- one of the foundations for the Lulea investment where we add more capacity to be able to sell more of the advanced high-strength steels. And they were also able to increase their shipments by 18% compared to Q4 2025. And it was also significantly higher than Q1 2025. So I'm also pleased about that. And then moving into SSAB Americas, stable performance there as well. Prices have increased. And if you compare Q1 2026 with Q1 2025, it's a significant improvement. Prices have moved up and they are continuing to move up.

We had some scrap price increases in the beginning of the quarter that sort of reduced the spread, but those scrap prices are on its way down and it's helping us to improve the profitability even more going forward. The shipments were stable and Americas has been stable when it comes to production and output. And hopefully, that will remain. Then we have the 2 subsidiaries, Tibnor and Ruukki Construction. And then we start with Tibnor, we can see that the shipments were, of course, higher than Q4, but pretty much on the same level as Q1 2025.

And looking at their financial performance, we can see that they came in much higher than Q4, but also much higher than Q1 2025, which was a little bit expected. Now we see that they have a positive inventory effect while Q1, they actually had a loss in the inventory. So that's a positive effect. And then looking at Ruukki Construction, unfortunately, the winter season was a little bit longer than normally is. So it was actually delayed by 1 month. That had a big impact on the order intake and also on Ruukki's financial performance. But since then, we have seen that order intake has been very, very strong. I think that they will be able to compensate for the lower performance in Q1 in Q2. Now moving into financials. I'm leaving the word over to Leena.

Thank you, Johnny. Then we will have a bit more group-level view. And if we start the revision of financial figures by actually looking at the steel shipments, this is now the total of Steel division shipments. Performance in Q1 was 1,736 kilotonnes which compared to Q4 was a 15% improvement in the shipments performance, of course, to bear in mind the seasonality in Q1, also the fact that we didn't have any maintenances taking place during Q1 like we did during Q4.

Market remained cautious, as Johnny already referred, but also the production performance was supporting this good performance in the shipments. If we compare the performance to the outlook we gave for Q1 compared to Q4, we were spot on in Special Steels and Americas and even slightly higher in Europe division with 18% improvement in shipment volumes.

And then compared to previous year, the increase in shipment was 4%. If we then move to revenue, Q1 was SEK 25.3 billion, also improvement by 15% compared to Q4. And if we similar way compare the prices outcome compared to the outlook we gave, all the divisions were in line and Special Steels even slightly better than the outlook we gave. And then compared to previous year, the revenue reduction was minor. It was 1% reduction. And here, actually, the biggest impact is coming through the FX, while volumes and prices were somewhat higher. But I will talk about that more detail in coming slides. EBITDA performance already mentioned SEK 3.2 billion in relative terms, 13%. Of course, clear improvement compared to Q4, which was SEK 1.8 billion and 8%. But to bear in mind that Q4 had the impact of annual maintenance outages around SEK 1 billion. And then compared to previous year, we do see improvement in the EBITDA performance on a total level as well as per delivered tonne level. And I will dive into details more in the bridge analysis.

First, comparing Q1 versus Q4. And here, we have operating result. Operating result in Q1 was SEK 2.2 billion, which is improvement by SEK 1.4 billion compared to Q4. And as the graph is illustrating, the biggest impact to this improvement is coming through the shipment volumes, which were 15% higher. Prices, as already mentioned, somewhat higher in all Steel division, which has offset negative impact of FX. However, this is actually offset in the variable cost with a positive impact of FX. The iron ore and coking coal, they were somewhat higher in Q1 compared to previous quarter as was the cost of scrap, as Johnny already was referring to.

And of course, somewhat lower variable costs, which were related to maintenance outage, also impacting positively the fixed cost in Q1. And of course, to bear in mind that we do still continue the strict cost control that we have had during last year as well. The capacity utilization positive impact over SEK 300 million, and majority of this is coming through the Special Steel division who had the maintenance outages during Q4 as did Europe division. So both of them are contributing positively to this element. And if we then continue comparing Q1 versus previous year Q1, the improvement in operating result is SEK 850 million.

And as the graph is well illustrating, the biggest positive impact is coming through the variable cost, also supported by higher shipments and better production performance. If we start with prices, prices on average being 5% lower than last year. And here, we also have the impact through the stronger Swedish crown. So FX is offsetting this minor positive impact in underlying prices. However, again, compensated by this positive impact in the variable cost. To point out that iron ore and coking coal, those were lower compared to last year, while scrap cost was higher compared to previous year Q1.

Volumes, they were 60 kilotonnes higher in Q1 this year compared to previous year. Both Special Steel division and Europe division had higher shipments than last year. And the capacity utilization there, the biggest contribution is actually coming through Europe division, followed by Special Steel division. So in -- just to point out that in Q1, big improvement in the European division mills.

Cash flow analysis. Q1 this year compared to previous year, as the table is well illustrating very similar trend, both years, and this is representing sort of the seasonality that Johnny was already referring to when it comes to change in working capital. Q4, we tend to have a positive impact. And during Q1, we have this negative impact. That is mainly related to the fact that during Q4, we are building raw material inventories and these large invoices we are paying out during Q1. Also, the accounts receivable is going up during Q1 with higher sales.

Inventories were somewhat lower during Q1 compared to previous quarter. But the outlook for Q2 is that the change in working capital will be less negative as we will have a lower build in the working capital. Maintenance CapEx, fairly similar level as previous year. The other line here tends to be related to CO2 emission allowance transactions. And the strategic expenditures almost double compared to previous year. And of course, this is now through Oxelosund-Lulea transactions. And we have actually added more information on the strategic spend in our external report. No dividend paid out in Q1. But to bear in mind that during Q2, there will be dividend payout if the AGM later today will approve the proposal by the Board of SEK 2 per share, which is then just below SEK 2 billion payout during Q2.

This cash flow is leading to net cash position of SEK 9.6 billion and the gearing minus 14%. End of last year level was SEK 11.6 billion, with gearing minus 17%. And of course, the biggest reason behind this drop is actually the strategic investment close to SEK 1.5 billion. And on top of that, we add this FX impact related to currency-related assets and liabilities, which was around SEK 400 million.

Raw material, this slide, we have updated. We have drawn this iron ore and coking coal price development as indexed. We start from Q4 '24. And as the graph is illustrating, Q1 this year, the cost of iron ore and coking coal was slightly higher compared to Q4, however, lower compared to previous year. So that was giving the positive impact in the Nordic mills and Special Steel division and Europe division.

The outlook for Q2 is that the prices will be somewhat higher or the cost of raw material consumption actually slightly higher than Q1. To remind that the lag in the impact in iron ore is 1 quarter and in coking coal, a bit longer, 1.5 quarter. And then on the right-hand side, we have the scrap price in U.S. And as the graph is illustrating, during Q1 '26, we had higher cost compared to Q4 last year and also slightly higher cost than Q1 last year. The outlook, however, is that the prices have stabilized and then the cost will be more stable for Q2 compared to Q1.

And the lag in scrap cost is around 1 month. Maintenance cost, this table, we have not updated. So this is exactly the same that we were showing last time. To remind Q1, Q2, we don't have major planned maintenance outages. Most of them will take place in Q3 and Q4. And the full year spend in maintenance cost is fairly well in line with the previous year on a similar level. The CapEx guidance, this we have not updated either. So we are sticking to this year view that the maintenance CapEx is remaining on the same level as last year. Strategic CapEx last year was SEK 7.2 billion. This year, it will be around SEK 10 billion and of course, related to transformation projects, Oxelosund and Lulea, where we are picking up the pace in investments. We were also guiding the impact in cash flow when it comes to CO2 emission allowances, and we have kept the estimate on the same level during '26, that will be on a similar level as '25, which was just above SEK 700 million.

And also, we were telling about our IT projects that we have started during last year, biggest one focusing on this mini-mill of ERP environment build. So these projects will continue also during '26. and this will be reported as operational expenses, and we are following this in the other division. So impact of these activities on annual level estimated to be SEK 200 million.

With this, I give it back to Johnny.

Thank you very much, Leena. And I will give a short summary and outlook. And normally, I will go through the different segments. But I think what's important here is not really what's happening with the underlying demand. It's actually what's happening with the supply and demand and the supply and demand situation and the regionalization that we can see on the market. And as you all know, this Made in America policy with the Section 232, they have implemented a more-stricter condition with the melt and pour and they did that 2024. And then 2025, we added up to 50% import tax for steel coming into United States, but they have also added sort of these derivatives that they need to be paying an import tax on that as well. For us, we can clearly see that the import level into the United States have reduced significantly, decreased to less than 2%. That means that there is sort of a higher demand than supply, especially if you talk about these industrial segments, we see a very high demand.

And that is, of course, benefiting SSAB since most of we sell in the United States are actually produced in the United States. We are one of the few plate producers in the United States. And now we see similar things are happening in Europe. Now the CBAM was implemented 1st of January that immediately meant a price increase.

But now it seems as if the European Commission will take the decision to implement the safeguard from 1st of July. That means that roughly 18 million tonnes will be subjected to an import tax of 50%. Here, this will, of course, change the supply and demand situation. Now just like we could see in November, December that the import into Europe increased just before the CBAM, we see similar behaviors now that distributors are increasing their inventory just before the new sort of tariffs will take place from 1st of July.

Hence, there might be a temporary hampering of the price increase. But as soon as these inventories are going down, it's very likely that prices will go up due to supply and demand situation. I think that's probably the biggest impact on the steel market in Europe and United States, where we are mostly active. Hence, the sort of what's happening in the segments are of less importance. So the guidance we've made, they look pretty much the same for the all 3 divisions, shipments stable and prices somewhat higher.

And I guess there will be some questions on the prices going forward. And I think I will save my answer to those questions because I can understand that there are questions on that. But let's wait with that until we have open up for questions. To summarize, we see financial improvements in SSAB Europe and SSAB Americas. I'm very happy and pleased with that. And I'm happy with the whole organization and the way they have managed the production, the production output and the shipments.

We continue to see a very good and stable earnings in SSAB Special Steels and their shipments were also higher than it has been for a long period of time. I'm very pleased about that. And also, I'm very happy to see the progress of the Oxelosund conversion from a blast furnace to an electric arc furnace is progressing according to plan, and it's very close to being finalized. I'm also very pleased about that.

So with that, Per, I think I'm done with my summary.

Thank you, Johnny, and thank you, Leena. Then we can prepare for the Q&A. And in order now for -- let as many people as possible ask questions, I suggest we limit to 2 question each in the first round. We also have our AGM today, so we will need to close at around 11:00 this conference, but this will be good time now. So it shouldn't be a problem. So then I would please ask the operator to present the instructions.

[Operator Instructions] And our first question comes from the line of Kaleb Solomon of SEB.

You touched on this briefly a bit earlier, Johnny. But regarding the illness reports in Lulea, some sort of toxicology experts from Karolinska have been in the paper suggesting that one possible explanation could be vanadium containing slag, sort of the airborne dust. And I appreciate it's too early to draw any conclusions and that you're still conducting tests. But if that turns out to be the case, what would it mean for the sort of restart time line construction? And I guess, how fast could that be resolved? And could it have any implications for the environmental permit?

Yes. So just like you said, we don't want to speculate. You're absolutely right about that, and we want to have facts on the table. But if -- let's say, if this would be the case, this would not mean the whole area will be for -- because we have done 170 ground testing. We know pretty much what's in the ground. If we would have vanadium in some area, it's from the [ Eldslagg, ] that will be a smaller part of that industrial area. And of course, we will handle that according to the guidelines that we have.

There are clear guidelines of how that will be dealt with. And it would come, of course, we would then need to remove that soil and how much time and how much cost that will mean, it's hard to speculate. But having in mind, we have already moved 3 million tonnes of material from that area over a period of 3 years without any sort of illnesses or incidents being reported.

So all of this is a surprise, and we're very puzzled. And having said that, we've done more than 150,000 gas readings without any reading close to the threshold or above the threshold. So it's hard. It's difficult to understand, and we will continue to measure this. And the vanadium theory is one among a lot of theories. And of course, we've looked into it and we talked to [ Swerim, ] we talked to a lot of others to get better understanding of this.

Okay. That's very helpful. And just as a follow-up to that, if this drags on for, let's say, another month or 2, because I noticed you keep your CapEx guidance of SEK 13.5 billion of strategic CapEx this year. At what point does some of that get pushed into next year, I guess, if this takes a while?

You have to remember, if you look at the time line, the whole project was delayed with 1 year because of this power station. That was announced, was it a year ago or something like that, a long time ago. And because of this, we have actually more time for these kind of events. So from a time perspective, we don't believe that even you said 3 months, even if it's 3 months, we don't believe it's going to have any big impact.

And from a cost perspective, it's not going to hurt us. So it's -- we only have small amounts of additional cost because of this. That is not our biggest concern. Our biggest concern is the safety of the operators and the workers at the site. That is a priority. And we will do everything we can to understand what's causing this. That is our main priority.

Okay. That's clear. And just lastly, you mentioned seeing some inventory buildup ahead of the new tariffs as you sort of did for CBAM but the inventory levels, as you described it in the report, are still somewhat high, which seems to be unchanged, I guess, since last quarter. So just to clarify, did you start seeing it in the past 2 weeks? Or do you sort of more expect to -- for inventory levels to stay unchanged?

So we can see it now at the end of April because the safeguard has been -- hasn't been clear, but it was an announcement not so long ago. And after that announcement, we've seen more activities in this regard. And we expect now that also the inventory levels in Europe to increase. And hence, the reason why when we do sort of pricing guidance, we believe that this is going to have some effect on the spot prices on the spot market. That means there will be an increased amount of material coming into Europe.

Our next question comes from the line of Alain Gabriel of Morgan Stanley.

I have a couple. Firstly, on the Oxelosund ramp-up. Johnny, when would you be in a position to give a guide on the ramp-up costs from an OpEx perspective, given that you'll be running both the blast furnace and the EAF simultaneously? That's one. And two is on the plate markets in the U.S. You've given some market color about the strength of the end markets. However, the lead times have increased quite sharply in the last few weeks. What explains this dynamic? And what you are hearing from your commercial teams in the U.S.? What has changed in the last few weeks to support the sharp increase in lead times? Those are my questions.

So maybe Leena can start with the first question, then I will cover the U.S.A.

The Oxelosund ramp-up cost, we can get back to that in the coming webcast. We have some estimates at the moment. The impact in the operational cost will actually be rather marginal. We have succeeded to keep the cost on a good level. Of course, existing organization is working with the EAF and some sort of support coming from Americas division or actually from Mobile and Montpelier mills, but those costs are rather marginal. But when we have more details, we will get back to this topic.

And to your question regarding the plate market in the United States, we've recently learned that a lot of distributors and stockholders are running out of stock. And they have been passing plates to each other just to survive. But now they all realize that they need to start destocking or restocking. And so the demand has increased quite fast.

Hence, the reason for an increased lead time. So -- and which is positive news for us because that means that they need to start building up their stock again. I think that they have been hoping for prices to come down, but it seems as if it's not going to come down. And now with the increased demand, prices are going to go the other way around. It's going to be higher. So that is the word from our marketing team, our market team in the United States.

We will now take our next question from the line of Tom Zhang of Barclays.

Two for me as well. First, just a follow-up actually on the U.S., please. So you just mentioned inventories are actually now really low. It feels like pricing could get quite tight. Can you talk a bit about the 0% to 5% pricing guide into Q2? Because I recognize there are some lags, but spot prices have been really strong on U.S. plate, especially in April. I know in Q1, FX was a bit of a headwind, but that looks like it's normalized a little bit into April as well. Is there anything else negative on the U.S. pricing front that we should know in Q2, either from mix or further negative FX impact that you're baking in, why the pricing guide is a bit more conservative than we might have otherwise guessed.

Well, we've already seen and we know that we have price increases because of the order book, we know exactly what kind of price increase we have in the order book. I think here, it's a little bit difficult to guide because it's just between sort of somewhat higher and higher. And so we got to be a little bit cautious here. And also there is a delay, there's a lag. I've said that before.

So when we have sort of half year contracts, quarterly contracts, those changes doesn't happen until next quarter, et cetera. And that's one effect. We can already see that plate prices are moving up, hot-rolled coil prices are moving up. And then I think there is a threshold where prices probably will not move up as much. But here, it is all about speculation. So what we can do right now is only look at what is our sort of order book average price level and try to do some guidance from that.

Okay. So it sounds like towards the top end of the somewhat higher range perhaps. Okay. And then in your comments also, Johnny, you sort of talked about the segments maybe don't matter as much. It's all about supply/demand and bigger picture. And I kind of hear you on the U.S. and it feels like part of the tightness has been because of that expansion to downstream applications. I guess we're seeing in Europe protectionism from the 1st of July on direct steel imports, but not yet the rollout of protections to downstream applications. Do you see that as much of a risk to your end markets, basically the shift of direct steel imports towards indirect steel imports and then basically demand destruction?

Yes. Long term, of course, there is that risk. I think that we have been watching the United States a lot and trying to learn from what they're going through. It's already -- we already have talks on adding the derivatives and so on because otherwise, we're afraid that a lot of manufacturing will move from Europe, and that's something we don't want to happen. But of course, it can't happen overnight. But if nothing is changed long term, this will have an impact. But like I said, the European Commission is on it. They were discussing it. The question is when will there be an implementation of adding sort of derivatives into the European safeguards.

And from your conversations, nothing on a kind of time line yet for when that could be implemented?

No, I think that would be very difficult to speculate on. The lead times are somewhat longer than you expect. I can't guess it's going to be impossible.

Our next question comes from the line of Tristan Gresser of BNP Paribas.

The first is a follow-up on Europe and your comment on the ASP guidance. I just wanted to make sure I understand it. So you do expect spot prices to fall in May and June because of this inventory overhang. And then on the cost guidance as well, if I look at iron ore, coking coal, they've been pretty steady. So why are you seeing the cost base moving higher? Is that due to carbon costs? I mean we've seen ETS benchmarks have been revised lower as expected. Any impact there? So that's the first question. And then the second question is on the ETS reform. I think you made a comment in the press release. I would be keen to hear what would be a good scenario for you when the commission comes in, in July and announce the change and the implication perhaps for your Lulea project and time line.

All right. I will try to -- if I remember, the first question about the pricing in Europe. And you asked whether I think prices will come down now in November and June. I mean your guess is as good as mine, but I don't think it's going to come down, maybe stabilize. That's just my speculation. And then to your question regarding the ETS, I know that the European Commission is looking at the ETS system. They want to try to balance it, but they want to keep it, that's clear.

So we've done a lot of sensitivity analysis and looked into how would this impact our investment in Lulea and also in Oxelosund. And we see that, let's say, for the sake of it, that the free allowance trajectory would be postponed until 2039 instead of 2034, we see that a very limited effect on our business case. And we also then did a simulation of what would happen if we took away the ETS. It would have a negative impact, but it will still -- we still have pretty good strong case both for Lulea and Oxelosund. So it won't be as good case, but it won't be detrimental. So it rests on other aspects than just sort of the ETS system, which makes it less vulnerable in that sense.

A question on the raw material guidance, Leena, could you -- why do we expect Europe to have slightly higher?

Slightly higher. As we have seen during Q4, the coking coal prices have been developing up and to some extent, also iron ore. So the lack of the purchase price impact in P&L will come with this quarter delay. So there will be somewhat higher impact now in the consumption cost of Europe division due to that reason.

And carbon cost, is that any impact with the lower ETS benchmark starting 2026? Or I've seen you, you kept your cash flow or carbon cost kind of guidance unchanged. So I'm just curious there.

Yes. We are forecasting a certain level of purchases of CO2 emission allowances on the market. And at the moment, the view is that on an annual level, it will be on a similar level as last year. So we don't see a big change in that.

We will now take our next question from Adrian Gilani of ABG Sundal Collier.

Just a follow-up question on you mentioning some inventory buildup among the European distributors ahead of the new safeguards. I guess after the safeguards are implemented, do you have any assessment on how long it will take them to destock before we start to see the full impact of higher market prices from this effect?

We have simulated it. We have a guess. Are we saying stuff like that? Or we...

You can maybe make a rough estimate because we -- of course, we -- like you said, Johnny, we can simulate but it's a fair degree of uncertainty, of course.

It is a fair degree of uncertainty. But towards the end of Q3, that inventory has come down to a level where prices again are going to start moving up. That's sort of our assessment.

Okay. That's helpful. And my second one, you got a question on the guidance in Americas being conservative. I'd like to push you on the guidance in Europe as well. Market prices seem to be up around 8% in Q1 on average. And I appreciate it's not a 1:1 ratio always. But to me, the somewhat higher pricing in Q2 sounds a bit conservative. So was that also a point where you were deciding between somewhat higher and higher?

Yes. I mean we are conservative. So yes.

You have the, yes, the annual and half year contracts. So those are making the quarter-on-quarter price development a bit more stiff. So that's also the reason.

Our next question comes from the line of Anders Akerblom of Nordea.

So I wanted to follow up on the most recent question and what you said about sort of the contract mix. Could you elaborate a bit on how that's changed in recent quarters and sort of how material sort of that impact is to sort of stickiness on prices?

The contract mix hasn't changed...

Yes, the contract mix hasn't really changed. And if we talk about Europe division, some 15% is annual contracts of the total volumes. And then we have half-year contracts around 25%, which is actually quite high level. And then the quarterly contracts are around 40%. So the spot pricing, purely spot pricing is around 20%. When it comes to Special Steels, they have around 60% quarterly contracts and then 30% on monthly pricing. So spot pricing in their division represents only like 5% to 2%. So that over time hasn't really that much changed. And the lagging is...

If you go back a few years, it has changed with the product mix a bit in Europe due to higher automotive growth but not recent quarters Anders...

So that's not a sort of dynamic in terms of why sort of guidance could be viewed as conservative vis-a-vis sort of the market price accretion then. Okay. And I wanted to ask a bit in terms of Americas. So as you mentioned, some scrap inflation impacting Q1. Kind of in your high-level view, could you share in a bit more detail maybe what you're seeing here? And what do you think about a representative level for 2026? So as you said, scrap prices have come down recently, but sort of how are you thinking about it for the full year in a general sense?

It's difficult to predict the full year because the scrap price is updated monthly and then the impact on the result is with a month lag. So the outlook we have is only on Q2. And there, we foresee that these prices would be a bit more stable. And then, of course, Americas division with somewhat higher prices and then less impact through the scrap cost, we could see some improvement in the margins during Q2.

But I guess moving a bit further out, my question may be more what are you seeing in terms of tightness in terms of the scrap market specifically? What are you sort of seeing in that end of the market?

In U.S. market, we haven't been sort of discussing anything related to the lack of scrap availability so -- or lack in scrap. But we foresee that it is relatively stable and secured market, at least in our business.

We will now take our next question from the line of Dominic O'Kane of JPMorgan.

I have 2 questions. So just the guidance and commentary on the outlook. Obviously, you've given us building blocks for Americas and Europe. But could you maybe just talk to what that looks like in terms of your current order book trajectory? I note in the comments, you do mention some emergence of more cautious customer behavior. Do you actually see any evidence of that building in your order book? And then my second question is just on cash flow. And so a strong cash flow performance in Q1. Could you just help us with the bridge for cash flow, particularly working capital into Q2?

So I'll answer the first question, then I'll let Leena take the other question quite naturally. But if we talk about the order book, and I can't go into details of it, but I think in the report, we mentioned the impact from the war in the Middle East. And I think what's causing a concern is that we've been hoping for the Construction segment, which is important for the sort of demand for steel in Europe, we've been hoping for that Construction segment to kick off, to have an increase. And we've been waiting for it. We've been expecting it, especially since the interest rates in Europe has been going down, we've been waiting for sort of the Construction segment to kick off again.

Now when we see an inflation, which is driven mainly by the energy costs, similar to what we saw when Russia attacked Ukraine, we now can see that Construction segment is more cautious again, afraid of increased interest rates and so on. So they are waiting -- they're in a wait-and-see mode with some of the investments. I think that's really what we referred to. But when it comes to the order book, the order intake has been very, very strong, both in the United States and in Europe. So there, we cannot see anything of that. But that's probably more driven and related to the supply and demand situation that we talked about before related to CBAM, safeguards, Section 232 and so on.

Yes. And then for the cash flow, we can say that you can have a look at the previous sort of years and historical performance with the working capital. So the seasonality will support the working capital to be sort of less impacting the cash flow. It will be more neutral. And of course, to bear in mind that the R&C investments will still continue and the strategic investments. And of course, the dividend payout depending on now the decision today, but that will take place also during Q2. So those are sort of the elements when we talk about cash flow in Q2.

And see any exceptional CO2 outflows?

Nothing exceptional. We had now Q1, we had the impact of SEK 44 million related to CO2 transactions. At the moment, I don't have any sort of a forecast or prediction for Q2 impact. I would say that it would be minor, if anything, in the big picture.

Our next question comes from the line of Reinhardt van der Walt of Bank of America.

First one, just on your comment around inventories that are building up now. I'm conscious that there's only 2 months left until the slated implementation date of the TRQ. Can you just give us a sense of what shipping times look like at the moment? And I guess, when that window of opportunity for orders is effectively going to close?

No. Yes. So here is an area where the lead times have actually -- if we talk about shipments from Asia to Europe, and that's usually the most normal stream that we see. Those lead times have increased now because of the situation in the Middle East. So the approximate lead times would be from 6 to 8 weeks. So that window is closing very, very fast.

And to your question, why haven't you seen much of that inventory buildup so far, but actually, it's about to happen because of the lead time. So it's happening as we speak. Now how much inventory they will be able to build up, that is remaining to be seen, but we have clear signals from the market that they're trying to do whatever they can to build up some inventory just before this new safeguards are implemented.

All right. That's very clear. And a question just about kind of when you look at the market balance in Europe, do you think that European steel producers can actually produce an extra 10 million tonnes of steel come 1st of July or 3Q this year? Because you did mention that you're seeing more capacity actually getting idled in Europe. Is there a risk here that we maybe actually see once we work through the inventories in 3Q that the market actually does get a little bit squeezed?

Yes. We know that there are at least 1 larger blast furnace being started up again, adding more capacity. And the utilization level in Europe right now is roughly 65% to 68%. I think that we could easily get up to 78% and that should give us roughly 10 million tonnes. So 10 million tonnes, I think Europe can do. But if we're talking about 18 million tonnes, that is a big question mark. That's a really big question mark. And then there could be a situation where there will be a sort of a shortage. And yes, maybe not on all products, but maybe on some products.

Our next question now comes from the line of [ Christian Kopfer of Arctic Securities. ]

Just a follow-up. Sorry for taking this one more round on the pricing guidance for Americas. But just looking at the spot prices are up roughly 20% year-to-date, even if you measure from the quarterly average of Q4, you're coming up to pretty much the same number. So on your guidance, 5%, 6% up or where you are, I don't know exactly. But I'm just wondering if you expect SSAB Americas to catch up with the current spot price, just assuming it will stay on current levels. Will it be in Q3 or will it be in Q4?

So we have been pushing and taking the lead in price increase and announcing price increases and all the price increases that we have announced have been accepted absorbed by the market, and we're quite pleased about that. And the minute that we have announced something, Nucor has actually announced something as well. So there seems to be a consensus in the market that price increases are accepted. But just like Leena explained earlier, we have this quarterly contracts, yearly contracts, et cetera. So some of them we're actually stuck with.

We know what our order book -- order intake order book average price level is at. And that is probably what was our standing point when we took that decision. We were just about to open up the orders for June, and that's going to fill up immediately because that's what we saw from May. It was just a matter of days and the order book was just filled up for that quarter. And normally, what we do is that we increase prices before we open up the order book. And we haven't really done a price adjustment in the middle of the month.

But we're looking into whether that's possible to do and how the reaction would be. But of course, we are -- and that's only related to the announcement. Of course, we can always negotiate higher prices. And to your question, when do you think we will catch up with the market? I would say that it's rather towards the end of Q3 than Q4, but there is a delay, and we're gradually catching up, and we have a strong order book as it is. And I think that was sort of the foundation for the guidance. And just like we alluded to before, it was a close call, and we decided to be conservative in this case.

All right. Excellent. And then finally from me on Oxelosund or sorry, Special Steels as a whole, you're coming up quite remarkably on volumes here quarter-over-quarter. The mix between the different grades, is that roughly the same from Q4 or still the bulk, a lot more than 50% out of 450 kilotonnes or -- I don't need an exact number, just to understand how you are succeeding to take your customers and specialties up to better grades.

So in general, we see an increased demand for grades such as the Hardox 500 Tuf that grade is growing really, really fast. I think we also had an increase of the nonbranded QT in the United States. And one of the reasons for that is because Algoma is not really shipping any material from Canada into United States anymore. So they left those volumes on the table, and we picked it up. I think that's probably where you see the biggest change.

All right. And how is it going from the defense industry, just to follow up on the grades. Are you able to ramp up Armox now for the upcoming quarters?

So ramping up capacity to supply the defense industry is one of our priorities. That would mean with the capacity we have today that we have to turn down other orders and replace it with this because that's how constrained we are for some dimensions, especially in Oxelosund. Of course, we're looking into whether we can add more capacity, that's something that we're looking into as we speak. But for sure, we have extremely high margins on the defense material.

But there also -- there is a commitment for us to supply the market because we're one of the few that is qualified to supply. And that demand will continue to grow but like I mentioned before, but if there are orders coming in, let's say, there's tanks or any type of military vehicle, there's a lead time. So when they talk to us, it usually takes 2 years before we start to deliver. That's the normal lead time. We're very slow in Europe, I have to say, but that's the way it is.

Yes, operator, we have time now for one more question.

Certainly. Our final question for today comes from the line of Bastian Synagowitz of Deutsche Bank.

Just 2 very quick ones. Maybe first of all, on specialties, where I thought your volume performance was actually quite good also relative to last year's comps. Could you please help us to understand how far this is driven by the business basically getting back on the structural growth path, which you are aiming for? Or have there been some tailwinds from CBAM and the pending EU import policy as well? And then the second one is just on the cautious client behavior you're citing, and I think you gave a lot of good and helpful color here already. But just to make sure we have not missed anything, have you seen any hard warning signs such as order cancellations in any parts of your business?

All right. So first -- the answer to your first question is very much related to the question that we got from Christian Kopfer, what is this related to? And I guess that some of the volume increase is actually coming from Algoma not selling into the United States anymore. That gave us a big push. They left that -- those volumes on the table. But we have a steady growth on the strategic products for Special Steel, such as the 500 Tuf, the HiAce, the Armox. We have a steady growth for them, but the big jump is mainly coming from the non-branded QT that we picked up from Algoma sort of more or less. And then what was your second question?

The second one was just on the cautious client behavior. Just I wanted to understand, have there been any harder warning signs such as order cancellations, which are prompting you just to say...

We haven't seen any order cancellations. It's -- I mean, like I said before, the order intake has been very, very strong to us. But like I said, it's also more related to regionalization than it's related to segment improvements. And we have to have that in mind. But the order intake in Europe, United States has been very, very strong.

Okay. Thank you. That concludes today's conference. So we thank the audience for the attention and good questions. And thank you, Johnny and Leena.

Thank you, Per.

And we wish you a nice day.

Thank you.

Thank you.

Good morning, ladies and gentlemen, to this presentation of the SSAB Q4 report. My name is Per Hillström. I'm Head of IR at SSAB. And presenting today, we have our President and CEO, Johnny Sjöström; and CFO, Leena Craelius.

And if we look at the agenda, Johnny will start with an overview of the year and the quarter. Then Leena will cover the financials more in detail and then Johnny at closing with the outlook and the summary. And at the end, we will have good time for questions. So by that, the floor is yours, Johnny.

Thank you very much, Per, and good morning to all of you. I will start by going through the summary of 2025. First of all, if you look at our safety performance during 2025, we can see that we had, again, an improvement in our lost time injury frequency, so we came down to the level of 0.56 which is, according to me, a good achievement. I think also, I want to point out that the total recordable also reduced, and that's also a work that we've been focusing on for quite some time.

Now going over to the revenues. The revenues were slightly lower than they were last year, if we look at the full year outcome, then again, the market has been weak. So it's understandable. There's been a lot of turbulence related to the geopolitical situation, tariffs, et cetera, that has created a lot of uncertainties. Hence, one of the reasons why we ended up on a slightly lower revenue level.

Then if you look at the operating result, we came out on SEK 6.1 billion for the full year. I think that even though the market has been very weak, first of all, we have a very strong geographical diversification with significant production in United States as well as Europe. But also, I think that our premium strategy, selling unique products, generating unique customer value is supporting us when times are a little bit tougher than they usually are.

And then, of course, I think that especially the SSAB Europe worked on the cost side, and we're able to improve the financial performance slightly. We also came out the net cash position for the end of the year ended up on SEK 11.6 billion. I think that's also a good achievement based on the fact that we have a lot of investments ongoing. We have a very strong balance sheet. I think also I'm very happy with the financing package that Leena was able to put together that strengthened our situation and our position. Then also the Board has proposed that we should have a SEK 2 dividend per share that will be decided in the AGM meeting further on this year.

Speaking of premium strategy and the direction we're heading, there are a few things that I want to point out. Continuously, we develop new grades for certain applications or environments. One of the grades that we have developed recently is a grade called Hardox HiAce. It is designed for wear assistance in application where you have sort of a corrosive environment, targeting the stainless steel grades.

It comes with a superior hardness, but also a superior wear resistance in aggressive environment, and it's very, very cost competitive because it's much leaner compared to stainless steel.

I also want to point out the investment ongoing in Mobile to increase our capacity of unique grades. Not long ago, we extended the [indiscernible] furnace giving us more capacity, but we are also currently investing in what we call a tempering loop to be able to produce more of the advanced steel grades.

Even though we had some turbulence last year when it comes to tariffs and the challenge to import material from Sweden into United States, we were still on a higher level when it comes to advanced high-strength steel to the automotive segment. So I think we came out pretty much on the same level as 2024. We haven't seen much of the reduction of volumes being sold in the United States so far.

I think also that one of the things that I want to point out is that we have developed tailor-made steel grade for the automotive segment, which is the Docol high edge, which comes with a high edge ductility. So when it's stamped or processed, if we have edges, which are much, much more leaner and not -- we don't have those kind of shipments you can get for advanced high-strength steel.

So tailor-made for certain applications in the automotive industry, highly appreciated by the market. And then also, we launched a new complex phase deal. It's a collaboration together with Gestamp. I think what's unique in this case is that we're sort of targeting to increase the strength in the chassis, which is quite new, actually. So the chassis will then have a higher strength, and with the high strength, you can actually reduce the thickness of the sheet material, making the car lighter, but also you consume less material, which is also good for the environment, but also good from a cost perspective.

And then last, but least -- not least, I want to point out that we have for our color-coated side produced by SSAB, but then further processed and sold by Ruukki Construction that we are now continue to develop our sort of environmental offer to the market. And here, we were able to produce a coating using sort of what we call a rapeseed oil, which is quite unique, and it makes it very, very bio, very much environmental friendly, which is also an area we are continuously working on. So very pleased about that. So there has been a lot of talks about the tariffs and the turbulence we have related to it.

It creates a lot of uncertainties on the markets, of course. But once again, I just want to highlight that we have significant production in the United States, and we have significant production in Europe. And that makes us less vulnerable to these kind of initiatives. I also want to point out that CBAM was implemented in Europe from the 1st of January, that will have a positive impact. It increases prices, but also will change some of the trade flows because there will be difficult for some of the countries to actually export to Europe.

And then again, we also have on the table of the European Parliament to decide on the safeguards and that will also, what we believe have a positive impact on the European market. I also want to highlight the transformation projects that we have ongoing. What you see on the picture to the right is the transformation project in Oxelösund. Here, we are replacing old blast furnaces with a new electric arc furnace.

And the building you see to the right is actually the electric arc furnace building. It is developing really well. I think that we have done a good job when it comes to project completion. And we have planned a production start-up in the beginning of 2027. And then if we look at the Luleå project, which is a larger project, it is also a way for us to reposition SSAB Europe to produce and sell more of the unique premium steel grades, primarily for the automotive industry.

So we have done the groundbreaking ceremony. We got the environmental permit, and we also continue with agreements with both customers as well as suppliers. One thing I want to point out is the sort of the agreement to get our hands on high-quality scrap and one of the things that we signed during 2025 is the Volvo Car agreement, which is also seen as a highlight for both parties for them more the circularity, but for us, it's more getting our hands on the premium scrap material.

Then going into the divisions, looking at Special Steels, we believe that the shipments, even though they were somewhat lower in Q3, then again, we had a very extensive maintenance outage during Q4 in Special Steels that had a big impact on our ability [Technical Difficulty] material, but still, I think that we delivered on a higher level than we did Q4 last year when we had the same situation.

Special Steels can also see some improvements in the activities on the European market. I think that's quite positive. The market has been quite -- on the lower side for quite some time. And now gradually, we see some positive signals on sort of the European market, and that has been identified by Special Steels, particularly.

And of course, we have an increasing demand for protection steel because of the market situation. The operating result came in on an expected level. Then again, I mean, if you have a maintenance outage, it comes with a cost and it comes also with higher unabsorption. So we -- this was expected. So nothing strange. We also have to say that prices went down a little bit, but we also have some exchange rate effects on that. Leena will get back to that in her presentation.

And then if we move into SSAB Europe. I think that, first of all, they marketed for SSAB Europe is weaker. They are more sensitive to the spot market and the hot-rolled coil prices than other divisions. But despite that, I think they had delivered above our expectations when it comes to shipments, and they had higher shipments in Q4 compared to Q3.

And we were a little bit concerned about their operating results, but they did a lot of measures, first of all, cost saving measures, but they also improved the capacity utilization hence, giving us a better performance than we expected.

Looking at SSAB Americas. I think that also they came in -- we had a maintenance period as well as SSAB Americas and normally the sort of the shipments goes down. But I think that they had a great achievement, especially in December, shipping out a lot of material. They've had a strong order intake; hence, they were able to sort of fulfill the demand and ship out as much as they could, a great achievement by the whole team in Q4.

And they ended up now on expected result level. And I think that they have been suffering from a weaker U.S. dollar, if we translate this into Swedish krona; otherwise, the outcome would have been much better.

And then for our 2 subsidiaries, supporting the business plan for SSAB Europe. We can see that the shipments for Tibnor were slightly higher than Q3, but it's still a very weak market, and we also have a very strong seasonality into North, just like we do in Ruukki Construction. And of course, the operating result came out on a lower end.

We were expecting the volumes to be higher; hence, it has a negative impact on the result and that's exactly the same situation for Ruukki Construction, where both the volumes and the volume -- the lower volumes has a big impact on the operating result and that's mainly due to the weak market conditions. But we have high hopes for 2026, where we hope that and think that the construction segment is going to improve.

So once again, I want to highlight our strategic direction and also the uniqueness of our grades. This is an application, not a big application, but it shows that our grades are unique. So this application is for power booster to charge cars and if you are on a sort of remote side on the country side where the sort of power lines are maybe not as strong, you're not able to actually charge the car very, very fast.

But with this power booster, you can actually gradually use the power to transform it into kinetic energy. So you have a rotating part inside of this container. It rotates extremely fast. And with these loads and with this velocity, you need a material that has a very good fatigue strength, and that's exactly what our material can offer; hence, the reason why they choose our material. I think in this case, it was pretty much the only material that they can use; otherwise, they would have fatigue cracks very, very, very fast. But it shows that we are selling into unique applications, but also that our products are unique and creates a lot of unique customer value.

With that, I leave the word over to you, Leena.

Thank you, Johnny. On the fascinating product description to fascinating financials. Let us start by looking at the shipment volumes first.

Q4 performance was 1,515 kilotonnes, and it was actually improvement compared to Q3 as also illustrated by Johnny already. The improvement was 49 kilotonnes and 3%. And then comparing to previous year Q4 improvement was even further 67 kilotonnes and 5%.

And if we reflect against the guidance we gave for Q4, we were actually spot on with Special Steels and Europe division and even slightly better in SSAB Americas. If we then continue to analyze the revenues, the Q4 revenue performance, SEK 22.1 billion, compared to previous quarter, a reduction of 4% and compared to previous year Q4 reduction was 6%, and this is indicating that the prices have developed downwards. And I will dive into that more in detail shortly.

EBITDA performance. Q4 SEK 1.8 billion, a reduction compared to Q3, which was at SEK 2.9 billion. However, improvement compared to previous year Q4, which was SEK 1.6 billion. And in relative terms, this means that the Q4 '25 was 8% improvement compared to previous year level of 7%.

Let us walk through the analysis related to operating result, and this is now comparing Q4 with the previous quarter. Q4 operating result, SEK 756 million compared to SEK 1.9 billion during previous quarter. And here illustrated in the graph, we have a negative impact with the price development. On average, prices were 3% lower. And the biggest contribution here coming through Europe division, with just over SEK 0.5 billion negative impact, followed by Americas SEK 240 million and Special Steels SEK 165 million. Tibnor prices were flat and Ruukki Construction prices slightly lower.

And as already Johnny mentioned, here, we also have a slight impact with the FX and also with the product mix. But that's illustrating rather the seasonality during Q4. Volumes were 3% higher and positive impact, a net SEK 115 million. Europe division, 41 kilotonnes higher; Americas 10; and Special Steel volumes were flat quarter-on-quarter.

Variable cost positive impact. Raw material costs were lower. However, we have offsetting effect here with the maintenance outage cost. And also maintenance outage costs impacting the fixed cost. But to remind that these are also seasonally higher during Q4 compared to previous quarter, which was the vacation period. And also to highlight that, yes, we did have saving actions both in Q4 and Q3. So perhaps the year-over-year is illustrating better the savings performance. But here, the net effect is SEK 570 million negative impact on EBIT.

During Q4, the production activity was higher and thus the positive impact related to capacity utilization. And this is mainly now related to the Europe division rolling performance. Maybe to remind that during Q3, the maintenance outages were in Raahe, Borlänge and Luleå. And during Q4, the maintenance took place in Oxelösund, Mobile and Hämeenlinna and the cost of the maintenance was quite much higher during the fourth quarter.

Similar comparison, but now year-over-year. Q4 performance '25 over Q4 '24. Performance Q4 '24 was SEK 487 million. And the only negative impact coming through with the prices, while all the other elements having a positive impact. Prices were 8% lower. Europe division, Special Steel division, both contributing over SEK 600 million negative impact, while Americas had a positive impact. But as already mentioned, the FX did have a big significant negative impact in prices.

Total FX impact in this analysis is SEK 840 million negative, which, on the other hand, is having a positive impact in the variable cost side but on a lower level. Volumes already mentioned, 5% higher. And here, the biggest contribution coming through Special Steel division, 17 kilotonnes higher volumes followed by Europe division, 28 kilotonnes and Americas 12 kilotonnes. So all steel divisions performed better year-over-year.

Variable costs, positive, SEK 345 million; raw material costs were lower, but this partially offset by the maintenance cost. And this year, it was slightly higher than the previous year. And already mentioned the saving actions and here illustrated well that the fixed cost year-over-year were lower, SEK 430 million. We had the time banks in use and a lot of saving actions throughout the organization and the outcome illustrated here in this graph.

Production activity was higher and a positive impact with the capacity utilization and the revaluated balance sheet items also just below SEK 70 million positive impact.

Cash flow. If we firstly look at the quarterly performance over previous year Q4. EBITDA, as already described, slightly higher than last year. Very similar trend when it comes to working capital, a positive impact during both years. And here to remind that we have the seasonal impact, we have winter stocking taking place during Q4.

So rather large raw material invoices posted to Q4, which will be paid out in Q1, which will then lead that Q1 will be seasonally negative impact. R and C CapEx, maintenance CapEx, slightly higher but well in line with our guidance, just below SEK 3 billion the full year. The other line here is related to the CO2 emission allowance transactions. During Q4, it was a positive.

Financial items here. As you can see, during this year, we do have the cost related to Luleå financing, the prepayments and premiums being paid out. This has a cash flow negative impact. However, we are activating these to the balance sheet, so not the same effect in the P&L. And of course, also the cash position is slightly lower compared to previous year and to remind that the interest rates has also developed lower when it comes to interest rate on cash.

Strategic investments, significantly higher. And here, of course, the driver being the Luleå investment project. And on full year level, to remind that the dividend was during '25 lower and '25 Q1, we still had the share buyback program ongoing, which we didn't have during '25.

This leads to net cash position, SEK 11.6 billion at the end of '25. And this is still very well in line with our financial target when it comes to net debt equity ratio plus/minus 20% as the outcome is minus 17%. If we do a short bridge over previous year, end cash position versus the outcome this year, we start from the SEK 17.8 billion, and then we add the cash flow from current operations, SEK 6.5 billion and then we subtract the strategic investments, SEK 7.2 billion, the dividend SEK 2.6 billion, then we need to take into account the revaluation of U.S. dollar-related items.

As Johnny already mentioned, the Swedish crown has developed during '25 around 20% stronger versus U.S. dollar. So that does have an impact in the net cash position as well. And the proposed dividend is SEK 2 per share, and that will be proposed to the AGM and then paid out in Q2 '26.

Raw materials prices, market prices have been developing slightly downwards during second half of '25. And that is also illustrated in our savings in variable costs. We don't foresee that the prices would develop upwards, rather remain stable and our consumption cost as well or slightly even downwards. When it comes to iron ore, to remind that the lag in the cost impact is 1 quarter and with coal -- coking coal, it is slightly longer, it is 1.5 quarter.

It's a bit different view with the scrap prices. They have remained flat during the second half, but have started to increase towards the end of '25, and we have seen that they have continued to increase. So they will have an impact in the margins for the Q1.

Maintenance cost. This table is illustrating the plan for '26. The outcome '25 was SEK 1.410 billion and on the similar level planned to be '26. The difference with the '25 and '26 is the schedule when it comes to U.S. mills. During '25, we were maintaining Mobile mill; while during '26, the plan is to maintain Montpelier mill, thus a bit different spread over the quarters 3 and 4, but on a very similar level.

And then the guidance, CapEx guidance. This we have already presented during our Capital Market Day. The performance during '25 was just above SEK 10 billion. That was well in line with what we have been guiding for this year. Strategic CapEx landing on a level of SEK 7.2 billion and maintenance just below SEK 3 billion. Plan is to have similar maintenance CapEx for '26; however, increase the strategic CapEx, which will be SEK 10.5 billion for '26.

And if I split this SEK 10.5 billion to major strategic projects, just below SEK 3 billion belongs to Oxelösund, around SEK 6 billion to Luleå and just below SEK 2 billion to other strategic projects.

And also refer to the emission allowance plans for '26. Our estimate is that the cash flow impact will be very similar during '26 as it was during '25. The impact during '25 was this SEK 724 million and around SEK 740 million, we have estimated to be the impact on '26. And we also want to point out that we have started our digital renewal project to modernize our IT landscape.

Of course, this is needed. And also this is supporting the strategic investments, especially Luleå minimal investment. We started during '25 to do the design phase for these digital projects and now we are progressing with the build phase. And these projects will be followed under the Other division, and they will be posted as operating cost. We cannot capitalize all of it. And our estimate is that on annual level, the increase in the operating cost when it comes to Other division is around SEK 200 million. This is the annual estimated impact of these projects.

But with this, I give it back to Johnny.

Thank you very much, Leena. And I will try to give you a short outlook for 2026, and I will start by going through the customer segments. I think besides this, I think the largest impact on the European steel industry is going to be the safeguard decision done by the European Parliament as well as, of course, the CBAM, which is already implemented.

But besides that, I think for SSAB, we believe that the heavy transport segment is going to sort of remain neutral for us. We believe that there is some strong upside in the shipbuilding not only here in Europe, but also in the United States. So that is clearly a sign, but also we see the rail transport in the United States is stable or maybe a little bit stronger than stable, that's what we see.

And then we have the Automotive segment. We know that our advanced high strength steel sales are increasing. And now when we might need to move some of the sales that we do ship material from Europe to United States that might be moved to European customers as well. Since we have a limited capacity, we will be able to sell this to European customers, I'm not so concerned about that because there is an interest for advanced high-strength steel where they are able to make the cars much lighter, so there is sort of a demand for it. But of course, so the red part of it is uncertainty regarding the tariffs and the turbulence related to United States and the timing here.

And then we have the Construction Machinery. We see some improvements in North America. It's been also a very turbulent and production being moved from Mexico to United States and so on. And a lot of our customers are a little bit confused, but it's stabilizing right now. We see sort of increased demand, and that's also helping us.

I think material handling, which is mainly related to mining, that is a very strong segment, it has been strong for quite some time. It is a very important segment for us and also especially for Special Steel, where I think that maybe more than 50% of their sales is related to sort of mining in some -- one way or another. And that is -- and it's upgoing with the gold prices, the silver prices, rare earth metal prices going up, new mines are being opened up everywhere.

So even though it says neutral here, I think it's on a higher level. And then we have the Energy segment where we see a strong demand, especially United States, we see -- we've never had as much pipe orders as we have right now, mainly related to oil and gas. But we also have energy transmission, which is also very, very strong. And here in Europe, we have sort of the renewables, wind power, et cetera.

The Construction segment is on the lower side. We are carefully thinking that the segment will improve second half of 2026. But it's -- right now, we -- it's rather low activity. And then the service centers, they have a low inventory level in the United States. It's likely that they will be restocking, which is the seasonality that we see, the pattern that we see. And to some extent, the inventory levels in Europe are somewhat high. I think that a lot of service centers took opportunities to buy some extra material before the CBAM and potentially also the safeguards.

But of course, those inventories will not last forever. So what we're guiding for, for Q1 2026, and here, we have a very strong seasonality. So we're quite confident when we look at the shipments, same pattern as last year that the shipments will be significantly higher for Special Steels. It will be higher for SSAB Europe and then somewhat higher for Americas. And prices remain stable for Special Steels, but we expect the prices to somewhat increase a year for Q1 and then the same thing in the Americas. Remember that there are some lead times to order intake price and then when we actually get the invoiced price increase.

And then to conclude, we have a weak market situation, we had for some time, but we are mitigating it with our strategy, our very clear strategy to develop and sell more premium strategy, more focusing on generating unique customer value. But we also have a geographic diversification that supports us when there are tariffs, let's say, in the United States.

And we have done cost measures that resulted in a positive outcome. We have had a strong focus on safety and that also given results. And we had stable earnings, especially in SSAB Special Steels that continue to develop even if the market is sort of tough. Our strategic investments are according to plan. And then last, but not least, the Board are proposing a dividend level of SEK 2 per share.

So with that, that's my conclusion, my summary. Per, so I'll leave the word over to you.

Thank you, Johnny, and thank you, Leena. We can then prepare for the Q&A. [Operator Instructions] So by that, operator, please present the instructions for the Q&A.

[Operator Instructions] And now we're going to take our first question, and it comes the line of Kaleb Solomon from SEB.

First, maybe on your price guidance for Americas. It was somewhat higher for Q1 despite sort of a significant currency headwinds given that the dollar has continued to weaken this quarter. So can you just clarify, is that based on USD spot prices, meaning does that exclude translation effects?

In the price guidance, we don't speculate with the FX impact. So we are discussing in that aspect only, the underlying pricing activities. So no speculation on FX.

Okay. That's clear. And on Nucor's call yesterday, they sort of mentioned the EFA ramp-up costs totaling around $500 million for '25. And I know that's across a few projects, but can you give us any sort of indication of what that figure could look like for Oxelösund?

You mean a specific cost for the ramp-up phase, is that what you refer to?

Yes.

Yes, we've been talking about a little bit double manning, but we haven't specified...

We -- yes, we have a clear plan. We know exactly where the costs are going to be, but that's not something that we go out with public. It's a part of our sort of cost structure where we will have some double manning. We run the blast furnace as well as electric arc furnace for a period of time. So we have a clear plan for -- we also know exactly the impact of it that was taken into account when we did the budget for 2026. But we haven't really published any numbers related to it, and we prefer not to do it either.

Now we're going to take our next question, and the question comes from the line of Adrian Gilani from ABG Sundal Collier.

Yes. Just starting off with a follow-up question on the Oxelösund transition, not so much on the cost, but rather the time line. How long do you expect to actually -- for it to take to ramp up the electric arc? And how long do you plan to run the 2 furnaces in parallel?

No. I mean, I think the difference between other projects is that we're only replacing sort of the melting part, the primary part of the production. So it's replacing the blast furnace with electric arc furnace. Hence, the other processes doesn't need to be qualified. As long as the chemistry is right, the qualification period is going to go pretty fast. So we have -- it's -- can I say how much time we're planning for or is that something, we can...

Yes, yes, we can indicate...

So the plan we have is 6 months for the total qualification of the new grades. And for the grades that we are producing in Oxelösund, there are not a strict customer qualifications. So it's more what we can promise to the market. So it is easier than it normally is to other sort of segments and applications. So hence, the reason why we're very confident on the time frame here.

Okay. Understood. That's helpful. And then another one more short term on the Q1 guidance for Europe, where you guide for 0% to 5% higher prices. Just looking at the market indices and factoring in your typical lag effect, it doesn't seem like you're realizing the full uptick on the market price in -- at least in your guidance. Can you say a few words about why that's the case?

I think what you said as well is just the delay and the lag. So normally, when we enter Q1, most of the orders has already been planned for. We have already agreed with the customers. We have a lot of quarterly pricing and so on. So hence, the reason that the effect will be postponed, so we will rather see a bigger impact in Q2.

And as Johnny mentioned, we have these quarterly contracts and annual contracts, so those are not priced according to spot pricing. So not the full spot price development can be impacting the Europe division.

Now we're going to take our next question, and the question comes from the line of Alain Gabriel from Morgan Stanley.

Back to the Q1 guidance, on the Special Steel pricing, you're talking about flat Q-on-Q, which -- and I guess, which reflects also the weakened markets that you've touched on. But can you give a bit more color on why prices are not following the upward trends in European HRC? And is that a mix effect as we head into Q1? That's my first question.

Yes. I think for the Special Steel pricing, it doesn't really follow the hot or cold pattern at all. It's more related to what kind of segments you're planning to sell to and kind of geographies you're planning to sell to. Special Steels is different compared to the other 2 divisions because they have global sales and active in a lot more segments. And so I think that the indications that we've given now for Q1 is because we believe that we will be selling in sort of other geographies that we know that the average prices have been somewhat lower.

So that gives you some explanation. But we believe that we do have some potential to increase prices both in Europe and also in the United States going forward. But for Q1, we pretty much know what's going to happen.

Okay. And then my second question is on the Oxelösund start-up as well. I think the wording in your statement is heavily caveating the power connection and the appeal process. Should we interpret this as suggesting that you are less confident about the start-up date as compared to last quarter, for example?

I mean, first of all, I just want to address that the project is following and developing according to our time plan. And we're doing a great job with that. But we are dependent on getting the power to the site. We're depending on the company erecting this power line, which is 72 kilometers long. And we can only listen to what that company tells us. And they tells us that it's according to plan, and that's all we know for the time being.

We know also that there has been some appeals for the -- some of the permits, and that's also what we included in the report. The consequences and effect of that, we cannot really assess at this point. So we thought it was vital information, so we added it into our report.

Now we're going to take our next question and it comes from the line of Reinhardt van der Walt from Bank of America.

I just want to go back to your comments around inventories. So you mentioned that inventories are somewhat higher. Can you just give us any details around which specific grades and products you're seeing those elevated inventories in? And then can we also just get a read on what you're seeing in January so far? And whether the inventory build you think has been more CBAM related? Or is this maybe some kind of demand anticipation?

Our interpretation at least is that it's probably more CBAM related, especially in some areas and from some geographies, we can see that there was a massive pickup of inventory. One of the areas I want to point out is the color coated. We saw a significant amount of color coated material coming in from especially Korea to Europe because they knew that the CBAM would have a negative impact on the prices and so on. That's just one example, but we could also see that on hot-rolled coil, to some extent, cold-rolled as well, especially in Italy for some of the countries delivering where they will be concerned about what's around the corner.

But I guess that's all I can go into right now when it comes to details. Otherwise, it's going to take too much time. But like I said, the inventory will not last forever. So this is probably a quarterly effect or a quarterly consequence.

Yes. That's fair. And can I just check on construction. You mentioned a neutral outlook. We have seen some of the leading indicators in the construction industry pick up and in some cases, quite sharply. So is the neutral 1Q outlook just because of some lags, some delays in that activity coming through? Can you maybe just give us any sort of read on at least where you see the trajectory of construction activity maybe as the year goes on?

Now well -- especially for Q1, we have a hard time to see that there's going to be any great improvements for Q1. However, with the German infrastructure project and so on, there are a lot of things ongoing. There are a lot of things around the corner and things are about to pick up. And when I speak to the CEOs of big construction companies here in Sweden, they are more pointing at that it's very likely that things will start to happen more in the second half of this year and that is also what we are sort of hoping for or seeing as well when we're assessing the market. But for the time being, we don't think there's going to be any rather -- any pickup in Q1 at least. That's our take on it.

And the next question comes from line of Tom Zhang from Barclays.

So both on the U.S. The first one, just on your raw material cost guidance. And I guess you've guided 0% to 5% higher raw material costs, but we've seen scrap sort of add $50, $60 year-to-date basically. So is that 0% to 5% higher raw material costs already baking in spot scrap prices or was that set maybe a little bit earlier because I would have seen scrap up at least 10% already?

Yes. Sorry, Tom, there is no -- when it comes to the percentages that refers to the prices; when it comes to raw material, our commentary is a bit more loose and it's not related to these percentages. So just a start there, it can be a little bit deviation from what you see on the price guidance, which is much more stricter.

Okay. Okay. But still, you're saying cost of raw materials are expected to be somewhat higher compared to prior quarter and spot scrap is up 13%. I guess my question is, is somewhat higher raw material costs in Americas consistent with what you're seeing in spot scrap markets?

For the quarter, I would say yes. And what we do is we look at reports and make a lot of assumptions based on those reports. And then we have the seasonality. Typically, the scrap prices in United States goes down in Q4 and then it goes up again with the demand in Q1. The scrap market is very supply-and-demand sensitive like most of the business in the United States, and the demand is now increasing, hence, the reason why the prices are going up.

Okay. Fair enough. And then just on U.S. pricing and plate pricing. So you flagged a bit of demand now coming back in energy. You flagged low inventories in the U.S. I guess, imports have started to come off in Q4. So the pricing dynamics that we've seen, I guess, kind of makes sense to pay prices coming up. But then it looks like it's mostly just been offsetting these higher scrap prices so far. Do you see the room for actual plate spread expansion through the next couple of quarters? How quickly do you think that can come or do you think demand is still just a bit too muted?

No, I think there's room -- we have room to increase the spread. I think that when we announced our price increases we were not aware that the scrap prices were going to go up as they did. So I think that we're going to work on pricing going forward. I think there is room for us to sort of increase our spread. That's what we think at least.

And now we're going take our next question, and it comes from the line of Igor Tubic from DNB Carnegie.

I just wanted to ask you about Special Steels. In the Q3 guidance, you indicated that both prices and raw material costs would be somewhat lower, but given that volumes were relatively flat in Q4, margins still declined. So could you please elaborate a little bit around the drivers behind this and what we should expect going forward?

Yes. I think Special Steels is probably the division has the longest sort of lag between purchase price and consumption price. So it's extremely long. It's maybe -- sometimes it's 6 months, 7 months before we buy raw material and then the consumption price. So -- and it's -- when we do this kind of guidance, we're looking at sort of the purchase price compared to -- and I guess that's where it gets a little bit confusing, but that's really what it's related to.

Okay. And the other question is, have you seen any -- with regards to the CBAM, has there been any impact on volumes? or would you say that import levels remain broadly unchanged compared to before?

I think imports level now in the beginning, at least, have slightly being reduced. There's a lot of confusion on how to do it. And also, if you're qualified and get also the approval for sort of importing into Europe. Hence, the reason why the import level has reduced somewhat. I mean, eventually, of course, importers will learn and they will understand how it's done. But we also strongly believe that the import supply chains will change significantly, and there will be some countries that will go down to almost nothing. It's very, very likely.

So there will be a time now where supply will change -- the supply flows will change, also some time for importers to understand how it's done. And also, how do you pay for it at the end, when do you buy the certificates. A lot of confusion right now. And that's, I guess, beneficial for the European steel producers.

And now we're going to take our next question, and the question comes from the line of Anders Akerblom from Nordea.

So firstly, I wanted to ask just high level on EU safeguards. If we see the sort of reduction in the magnitude that might be expected, could you share anything in terms of what market share gains you expect to have versus competitors? And also, how quickly you can adjust production to sort of capture these volumes?

First of all, SSAB's utilization level has always been quite high. I think European utilization in general has been rather low. I think it is communicated to be around 60% to 65%. We are way much higher than that, which means that if, let's say, that this decision is made and the safeguards are in place, of course, we will be able to ramp up a little bit, but we already have a high utilization level.

I think the big impact will be the price changes and the supply and demand change. So there will be a period of time where the demand will be high and the supply will be limited because during the last 2, 3 years, blast furnace has been closed down, capacity has been closed; hence, there's going to be a gap between supply and demand in the beginning and hence, the reason why we believe that there's going to have an impact on prices. And that, of course, is going to be very beneficial for SSAB. I think -- did I cover all your questions there or your question?

Yes. Yes, you did. And with regards to a lot of tariff questions, but in the U.S. Section 232 tariffs, could you share anything on your sort of long-term plan for Docol AHSS exports to U.S. automotive? Will you continue sharing costs with customers, requalify with European OEMs, develop domestic U.S. capacity? So anything there would be interesting.

Yes. So we're looking at all of those options, of course. And first of all, when it comes to this continuous [indiscernible] that we have, where we can actually produce these unique products, it has been pretty much fully utilized for the last 4, 5 years. We have decided to sell this capacity into United States or some of this capacity into United States because the margins has been -- have been higher.

But it's not like we have to. There is a demand for it also in Europe. So there is a list of potential customers that we are now talking to and has -- we also been qualified to supply to them. So when there is a sort of lower demand from the United States, we will shift it over to supply to European customers instead, and that is sort of in the making as we speak.

And then, of course, there is still a demand for our products. So it's -- and we don't really understand where they're going to get these products from because you cannot produce it locally. So they either have to downgrade or, I don't know, some other solution. We are, of course, looking at all options, but the volumes are not big enough to do any large initiatives, especially if you can sell these capacities to someone else. Yes, we're looking into all options and see what we're going to do on that.

And now we're going to take our next question, and it comes from the line of Cole Hathorn from Jefferies.

Just 2 my side. The first one is on the order books for your plate business in the Americas, and we had Nucor talking about a substantial improvement in the order books. I just love comments around what are you actually seeing in your order books there?

And then secondly, it's just a follow-up on how do you think the wider industry is going to adapt to the import quotas? I mean you've been quite clear that you've got higher operating rates versus the industry, and you're going to benefit from the pricing. But if we're going to need an incremental 10 million tonnes of domestic European production to displace imports over time, where do you think those 10 million tonnes of production is going to come from? Is Europe in a position where we can ramp up the volumes to meet that need?

Yes. And -- I mean, if you go back 10 years ago, for sure, we had that capacity in Europe. And then some of the factories and some of the blast furnaces have been idled. And I honestly don't know if they can be restarted again. It's likely they could. But I'm thinking that there will be a delay. There will be a gap. It's going to be hard to fill that you still need to import some volumes into Europe.

I don't -- I'm not so sure that we will be able to ever fill the full gap because of the time that we've had with limited prices or margins to support sort of some of the production in Europe that we've had, to answer that question. I think your first question was related to...

U.S. order book.

U.S. order book, okay. And for just to say, and maybe I'm revealing something that wasn't in the quarterly report, but we have been fully utilized in the United States in our 2 factories. And our utilization levels are extremely high. So of course, we are continuously working on operational excellence, we're working with AI to optimize our output and we have been quite successful during last year, enormously successful, I have to say, to get more material out from the factory that we are using.

I think the difference between us and Nucor is that they have a new factory where they have sort of a lower utilization. For them, this will sort of have make a difference. I think, again, coming back to what I said about Europe, I think what is the main driver for us is the price increase that we will see around the corner.

Now we're going to take our next question, and the next question comes from the line of Maxime Kogge from ODDO BHF.

So first question is on the cold weather conditions in the U.S. I was wondering what kind of impact it would have on your shipments and your scrap procurement in Q1? If all of that was already incorporated in your guidance?

No, I think that we learned a little bit last year where we had some impact from extreme weather that had an impact on transport of scrap to Montpelier. The consequence was only for a few days. But since we have sort of this lean concept and try to keep the inventory levels as low as possible, I think we learned from that and we built up a slab inventory that was much, much higher than it usually is. And that was a safeguard, just to be on the safe side, just in case something happened. So to answer your question, we are more prepared for this year than we were sort of last year.

Okay. Fair. And the second question is on the defense business. If we take stock of 2025, how are volumes compared to 2024? Are you perhaps going to increase transparency on the volumes the same way as you do on auto for this business because there's a lot of market expectations on this topic? And yes it's just related to your recent Rheinmetall contract, are you facing any limitations in terms of quality due to the use of green steel? That would be my second question.

Yes. We haven't decided yet whether we're going to reveal the volumes and be that transparent on it. And we also need to be a little bit cautious because we don't want to say to potential tariff or whatever, where we produce and how much we produce, it might have a negative impact. However, we know that companies like Rheinmetall, [ KDW, ] we also have Patria in Finland and Hägglunds in Sweden, they have tripled their capacity just to be able to supply what the market needs.

And even if they've done that, they still have very long lead times. This will have a positive impact on us going forward. But it's -- the delay and the lag here is much longer than you might think. It takes years until we actually start supplying to these kind of projects because they want to secure that they have cabling, semiconductors, computers, all of that before they start ordering the steel plates. And I think they've had some challenges in the past.

I think it's been resolved a little bit right now, but if you ask me in 2 years, the situation is going to look much, much better when it comes to deliveries and a major increase, I guess, in protection steel compared to now, but even though it's better than '24, we believe it's going to be much better in a couple of years.

Operator, just reminding of the time. We have time for 1 more question.

Yes, of course. And now we're going to take our final question for today, and the question comes from the line of Bastian Synagowitz from Deutsche Bank.

Just maybe a quick one on Specialties. Just from the demand you see in the customer conversations you have, would you be confident enough to say that 2026 will be the year when you will get back on the growth track you are aiming for the business? Or is it just too early to say? That would be my first question.

No. I mean, I've learned after Russia attacking Ukraine and after the pandemic and after the tariffs, I've learned, that's really, really hard to predict what's going to happen in the future. But if there aren't any geopolitical issues or topics then I'm very optimistic that we will have a growth. And this growth can come fast. It's just a stability on the market, then the growth will come fast.

Okay. Great. And then one more question on the FX side where we've seen significant volatility and maybe one for Leena. But from the presentation, it seems like we have not seen much of the effect in your results yet. But from [Technical Difficulty] you provide, I guess, this could be more than a SEK 1 billion impact given that it's mostly a dollar market, and there would obviously be some impact from translation.

So could you please help us to understand how far you are hedged short term? And how we shall expect the FX to flow through your numbers? Maybe also, can you help us to understand how your commercial approach works, particularly in the business like the Specialty Steels business where you're obviously doing a lot of, I guess, overseas business. So which percentage of your invoicing here is actually in dollars and euros versus krona? That would be very helpful.

I don't have the percentage to give you, but you're absolutely right that Special Steels sales currencies are sort of in U.S. dollars, euros and also other exotic currencies. And we do hedge the net cash position with accounts payable and receivables. So we are hedging, but we don't do, for example, equity hedging.

And as already mentioned, the benefit with the prices or the negative impact of FX in prices is to some extent then offset by the positive or negative impact in raw materials because we are purchasing a significant amount of raw materials in U.S. dollars. So the combination of all these then is sort of the hedging policy that we have.

And what is roughly the duration in these hedges? Is this the 6 months, is it a 12-month rolling or...

No, we do it on an ongoing basis.

And -- but how long, like for example, we have like obviously roughly an 8% move in the currency in the course of the fourth quarter. So how long would it typically take then until we see this coming through via the translation effect?

I don't have that kind of answer to give you.

I think what Leena also said in her statement is that, I think the biggest impact comes from the natural hedging, which is that we purchase so much in U.S. dollars, we purchased U.S. dollar for the European production if you talk about iron ore or coal or whatever it is, all of that is purchased in U.S. dollar. But then for Europe, we sell in euro. So we have a very strong natural hedging.

And the fact that you're guiding for stable input factor prices, I guess, dollarized or SEK terms for iron ore and coal, obviously, have been down 16% to 24%, so are you fully hedging the raw materials as well?

No. No, we don't. We have very small portion of commodity hedging, but that's very, very limited. So I would not even mention it.

Yes. And hedging comes at a cost as well. So yes.

But then why are you guiding for flat cost in Q1?

Because most of it we have already purchased and agreed on.

Yes. It is the consumption cost that we have for the inventory.

Exactly, Bastian, is the estimated consumption cost, you can say, slab cost now looking into Q1.

Yes.

Okay. Thank you. And that concludes today's conference. Thank you, Johnny. Thank you, Leena. Thank you, the participants. And we wish you a nice day.

Good morning, and welcome to SSAB's Capital Markets Day 2025. Very big welcome to all of you joining us here this morning in Oxelösund, and a big welcome to those joining us over the webcast. We're sorry about the small delay in getting started, combination of buses, traffic and rain created a small delay. But now we're here, and we're ready to start. My name is Helena Norrman. I'm Head of Communications for SSAB, and I'm very happy to be here today together with my colleagues to talk you through the coming 5 years and beyond of SSAB strategy and execution. It's also fantastic to be here in Oxelösund today.

It's been an important part of Swedish steelmaking history for more than a century. And now we're ready to take the next step with a moving from old technology to new technology that will happen soon and more about that during the day. Before we go into today's program, I would like to welcome Karin Palmqvist on stage. Karin is Site Manager and Head of Production here in Oxelösund. And she will talk us a little bit more about where we are and very importantly, safety instructions for the day.

Yes. Thank you, Helena. So my name is Karin Palmqvist. I am the Site Manager of Oxelösund, and I would like to welcome you all again to Oxelösund and SSAB. I will briefly instruct you of the safety. But first, just some words on where we are. You entered the area, and we're now in like the northern part of the site. And this is the part where we are like making the finishing of our plate products in Oxelösund.

In this building, we are storing semi-finished plates before quenching and finalizing. But the recent and newest equipment that we have is just nearby us here. It's a new production line where we are joining plates together by welding and then having them quenched to get the same properties as a non-welded plate. So this is a known patent production process that we're very proud of, and it's really new, and we're happy to have you in this building then. So the safety is really important to us at SSAB. [Audio Gap] is just by the blue containers. You saw the nice containers framing this area. So that's the assembly point. There will be first aid and defibrillator in the back of the -- this room by the technicians. And if there is an alarm, we have our own fighter brigade gate. So SSAB staff will call our own fighter brigade to make sure that we get assistance as necessary. So again, very welcome to you all to Oxelosund.

Thank you, Karin. A few more practical details for those of you especially in the room before we continue into the program. First of all, toilets are located out from the entrance you came in through on the left. It's a white mobile container. On the note of safety, when you exit, it's a rather steep step down. So be careful so we don't trip and fall. Smoking is only allowed on the left-hand side of the blue containers outside. Photography allowed in this building, in the building where we will have dinner. There are 2 selfie spots this afternoon. Apart from that, except for photographers with special permit that will get special instructions, photography is not permitted.

We'll come to how we do the Q&As later. We have an agenda for the day, and maybe I can actually show it here. So we have an agenda that will start from an overview of strategy and market by our CEO, then we will go through the different divisions and subsidiaries as a deep dive. We will have a coffee break. There will be a few Q&As. We will have lunch a little bit later than 12 because this was assuming that the buses would have arrived a little bit earlier, so around 12:20 maybe. And then we will come together again after lunch, CEO, CFO, final Q&A and final remarks by Johnny Sjöström. And that will take us up to around 2:00 p.m. Stockholm time or Swedish time. And then there will be a continued program for those of you that are here on site, but we'll come back to that later.

So let's continue into the program and introduce today's first speaker, Johnny Sjöström, long experience in the industry, Associate Professor in Materials Science. He joined SSAB in 2019 and has been running our Special Steels division until taking up the role as President and CEO, almost exactly a year ago. Johnny welcome the stage is yours.

Good morning, everyone, and welcome to SSAB's Capital Markets Day and also welcome to Oxelösund. Before I get started with my presentation, I just want to just emphasize what was saying that the investment we have here to the right is 1 of its kind, and it's a patent technology that we have. It's also -- I think it's a breakthrough when it comes to joining place together and then doing a quenching. We're the only 1 in the world that does it. And in the exhibition center, you will be able to see the result. And you're going to be amazed that you can actually -- you cannot see the well at all, not in the confection but not on the top either. So it's a very unique solution.

All right. So my name is Johnny Sjöström, I'm the President and CEO of SSAB. What you see on this picture here is the world's largest optical telescope. Scientists say that it takes around 8 minutes for the light to go from the sun to the planet earth. With this telescope, we can detect light has been traveling for 13 billion years. And they say that the big bang theory or the big bang happened 13.8 billion years ago. So with this telescope, you can see stars being born. You can also see black holes. You can also detect new stars and galaxies far away.

This telescope is in Chile, but it's owned by the European Southern Observatory and it's rather big. You see the size of these cars that gives you an idea of how big this is. And the total weight of the tower is 3,700 tonnes, and you can actually turn it in order to follow the stores that you want to have a look at. When they were designing this scope, they had a problem finding the gear tracks or the gear racks to move the whole telescope because of the forces that you put on the gear tracks. And the only material that they could approve for this application was an SSAB material called locks. This is a very typical example of applications that we sell to that no one knows about.

We are quite often the solution when no one else has the solution. When they need material for really extreme applications, we are the ones that come up with a solution because we have a unique production method of combining hardness and toughness. This, of course, have taken a lot of years. It didn't happen overnight. So our journey started, I guess, already in the 1970s when there was a crisis here in Europe. There was a shipyard called Kokum that went bankrupt. That was the #1 customer for Oxelösund site at that time. And Oxelösund had to do something different. So they decided to invest in a quenching line.

That was the first quenching line within SSAB. Of course, it took a lot of years until they grew that market, but that indicated that there was a milestone for this technology. And then after that, in year 2000 and further on, the internalization started gave us additional diversification. IPSCO was acquired around 2008 and then later, the -- there was a merger with Rautaruukki and also a lot of downstream activities started. 2015 and beyond, we started the specialization. And one example of this is the Docol 1700. The Docol is a unique grade. It offers a lot of safety to the market.

And I will give you examples later on in this presentation, what it's used for. And of course, the commercialization of the SSAB product also started. So what do we have ahead of us? I think that we have a good platform to stand on when it comes to diversification. But in a world of overcapacity, the only way to be successful is by being unique and create unique customer value. So our idea is that we're going to continue to accelerate our premium leadership that we already have on the market. And in fact, we have a very, very good platform to stand on. So this is showing sort of the market position for some of our divisions.

If we start with SSAB Special Steel, who is only working with premium steel grades, 100% of what we produced is advanced high-strength steel or premium grades. There is a technique called quenching and tempering and that's Q&T stands for. And in this case, it shows that we have roughly a global market share of 30%. But if you take a closer look, I would say that we have roughly 50% market share in North America. We have 50% market share in South America, almost about 50% market share in Europe. It's -- when we look at the whole world and include China into this, where our number goes down to 30%. But we have a very unique market position, and we are the preferred supplier when it comes to special secret sequential tempered.

If you look at SSAB Americas, we have been ranked as the #1 supplier for many, many years, and we have surveys that shows this. Number one, when it comes to quality; number one, when it comes to delivery performance and reliable partner. And if you look at the SSAB Europe, who quite often is linked to standard products, which is wrong. For the last 10 years, they have been working really hard to position themselves as also a unique supplier of advanced high-strength steel. And Tony will show that in his presentation, and I will also show that further on in my slides. And to support SSAB Europe with their sales, they also have Ruukki Construction and Tibnor to sell as an outlet of their products.

And then when I visited the Global Steel Forum in New York a couple of months ago, all companies there and POSCO was there, all global companies were there, and they were all saying we're going to go downstream because they are struggling to make money. And so what is your strategy now is we're going to go downstream. We're going to do a lot more value added. We have already done that journey. We acquired Tibnor, and we have Ruukki Construction, we had that for a long period of time. And on top of this, we have Abraservice and other outlets.

But with this, it gives us diversification both geographically. The 58% of what we produce and sell is in Europe, but we also have a significant footprint in the United States. And then we also have 12% -- are being exported. We sell roughly 55% as premium products. And I will define later on in this presentation, what we mean by premium, and we have a very strong financial position. We have a net cash position of roughly SEK 11 billion. If you look at our historical financial performance, we can see that we have an average been earning 14% EBITDA over a business cycle.

And if you compare that to our European peers, we have been outperforming them. Now we have to remember that the market situation for many years in Europe has been a little bit odd, a little bit strange because the market has been able to buy extremely cheap material coming from Asia, coming from China, material that has been subsidized, not even covering the cost of the variable cost, the raw material, and that is not sustainable. It's not realistic to think that this will continue, and we already see movements in this direction. But even during the time period where we've been struggling with cheap imports, we have been able to make 14% in average.

And if you compare that to American competitors, who has been benefiting from the Section 232 that was implemented 2018, we are pretty much on the same level. So under these circumstances, I would say there hasn't been a bad performance. So -- and what do we do with the earnings? Well, we are committed to our financial targets, and that is to have 40% divided of our net profit. That is something we have been doing. And the majority of our capital has been allocated to the shareholders in the shape of dividends. And of course, we always do maintenance CapEx.

But historically, and Leena will show that in her presentation, we haven't done that much strategic investments. But that needs to be changed now. We see an opportunity for us to reposition on the market to grab a stronger position in the market. And hence, we have a more aggressive strategic investment program ahead of us. Look at the total return, the last 5 years, it's roughly 200%, that including also the share price increase. So what I said in the beginning that we're going to strive for more premium and that's because we want to have less volatility. We want to be able to price leaders, and we want to be able to have good earnings.

Special Steel is one good example of that it actually works. Special Steel has only advanced high-strength steel in its portfolio. Hence, they're not sensitive to market conditions and market variations, and they continue to supply a unique customer value to the market. And their earnings has been -- continuously going up. If you compare that to SSAB Americas, you see a higher volatility. So Americas has a very unique position when it comes to cost leadership, and they're also a quality leader, but the portion of advanced high-strength steel is quite limited. Hence, they are still sensitive to market changes. However, they have a very unique position on the U.S.A. plate market.

Now with the tariffs, and looking at the competition and Chuck will present that in his presentation, we have a very unique position. And then if you look SSAB Europe, even though they have been performing better than their peers and they have increased their amount of advanced high-strength steel. They are still a little bit sensitive to the spot market prices for a high share of their portfolio. The idea is that we're going to walk away from that and be less dependent on the spot prices. So a lot of the investments that we're planning to do is going to be within SSAB Europe, which makes a sense that we're going to be able to reposition SSAB Europe to more of a premium supplier. And then, of course, we have the 2 outlets. Fredrik and Sami will tell more about that in their presentations.

But this is important for us. And a lot of our competitors are yellow that we already have these outlets and they supply a lot of added value to the market, and they have a very good market position. We believe that the construction segment is going to come back. And when it does, we have a very good footprint, and we're going to be able to increase our earnings in these areas. Roughly 400,000 tonnes of SSAB Europe's material is going through Tibnor and 130,000 to 150,000 tonnes of SSAB material is going through Ruukki Construction. We also have a very, very good operational platform to stand on. For years, we've been working on production stability. We have been working on improvements. We have a very good program on this. We have a very high capacity utilization, and Chuck is going to give you 1 example of that in his presentation.

And we have also increased our delivery performance. But one example I want to show you, which is a proof of our operational excellence is the improvement we've done in safety. And this is indicating the lost time injury frequency that continues to go down. It improves the safety of our workers, but it also indicates that we have good control of our production. So the market conditions are changing. We see that there's a bigger demand for advanced high-strength steel, and that is coming from a lot of different segments. And this is an area where we already now have a very good footprint. We are one of the largest advanced high-strength steel suppliers in the world, and we have the competence and the knowledge how to do it.

The global steel industry is suffering from overcapacity, mainly coming from Asia and specifically China, an industry that has been subsidized for years. This is, of course, changing the landscape and the competitive landscape. And we've already seen the tariffs being implemented in the United States. And now we already see that the Europe Commission is suggesting safeguards to save the European steel industry. And in my opinion, it's likely that we will see those safeguards being implemented sometime in the beginning of next year or sometimes in the spring next year. And that will completely change the landscape in Europe, but it's also necessary to save the European steel industry from cheap imports.

A lot of steel companies in Europe are struggling now financially, and we need to do something in order to save them. I think 1 of the things that we should remind ourselves is that we are still focusing on Fit for 55 in the European Union. We still have the ETS system. Sometimes, I think we tend to forget about that. And in a condition where most of our competitors are putting their investments on hold, we continue. The demand for low emission steel is still there. I think that we will have a perfect opportunity when our investments is up and running, and we can supply -- steel to the market because we're going to be one of the few that can actually do it.

And we also have around the corner, we have the CBAM starting 2026. We already see now that we have European customers securing supply from Europe because a lot of the companies exporting into Europe have a hard time to do the administration, to file the permit to export it into Europe now with the CBAM. Also CBAM is going to come at the cost of course. We monitor this, of course, and it's clear indications that the demand for advanced high-strength steel is increasing. And like I said in the beginning, we are in a perfect position for this. This market is quite limited as it is, but we have a very unique position in it.

The automotive industry is moving towards more lighter vehicles, especially the electrical vehicles, and here, we can offer extremely good solutions, not only offering safety but also more lighter cars. But we can also see that's happening in other transports, heavy transport. We can see that in buildings, skyscrapers that become taller, they need advanced is when the skyscrapers are bending in the wind and also that of mechanical equipment. So this is something we have identified, and this is going to happen. I touched upon this before, but we already know that the Section 232 was implemented 2018 that helped the American market. And since then, we have seen new investments in the United States.

We also see -- saw that Chinese material found new ways of entering the United States through Vietnam and other countries. And then now in 2025, they said less, we're going to put a blanket of 50% of all imported material. That has helped our position in the United States, and it's going to continue to support us in our proposition in the United States. Now we see that a similar thing is going to happen in the European Union. It's likely that this is going to be approved by European Union. That means that we're going to have a quotation system, and this is also okay, according to the World Trade Organization.

So there's almost 18 million tonnes of flat products that will be subjected to 50% tariff. And it's more likely that this supply is going to come from European companies than outside Europe. This is going to change the landscape in Europe. So 2026 is going to be a very interesting year for many, many reasons. So what do we mean by premium? We believe that anything that we can be paid an extra money for is a premium, but we have categorized this into 3 categories. One category is the advanced steel grades that we can offer to the market. And here, we have a unique position. This is also including the color coated, the metal coated but also the laser plus material as well as the advanced high-strength steel grades.

But we also believe that we can provide premium to the market a unique customer value by doing value-added operations. And in the exhibition booth, you will be able to see a lot of the value-added we already do to the market today. And I think that the first stage you will get to, you will see a 3D printed hood. It's a miniature of what we actually do. Today, we are actually well together -- you will cover this in your presentation, but we already do preassembly for the military industry, helping them out when they have a lack of capacity, and this is mainly for welding.

And we're also able to supply a decarbonized steel to the market, which is also very important for us, but that is a part of our premium. I just want to highlight, because I am a sort of a material scientist nerd. I really like microstructure and things like that that no 1 else likes. And I also like to be part of the development of new grades. I think that this Hardox HiAce is a very unique combination of wear resistant as well as corrosion resistant. Hardox is known for the rare assistant, but with the HiAce, we're also able to offer some corrosion resistance.

And this is extremely important when we have extremely aggressive environments like in the pulp and paper industry, where we can combine -- in the pulp and paper industry, there's a lot of sulfuric acids. And if you have only a wear resistant material, the corrosion will wear it down anyway. But if you combine wear resistant, the corrosion resistant, you will increase the service life considerably. And now for the Docol grade that I spoke about before. This is a 1,700 megapascal. It offers protection in cars in the site collision beams. It's really attractive, and we still export a lot of this into the United States because they can't find in a local supply. It also makes the car lighter.

We're actually able to offer a better solution than aluminum, but at the 50% of the cost. When it comes to Protective Steel, we have seen now from the war in Ukraine that you can't have heavy tanks. You have to have much lighter tanks. In order to have lighter trains, you need to have more advanced steel. We have a very advanced steel for protection it's called Armox. And if you use steel grade Armox, you can actually reduce the weight into production by 50%. And this is a market, of course, which is growing, and I think that we have a perfect position to capitalize on that.

When cost value added, we try to look at what is it the customer needs and how can we help the customer and how can we complement the markets. So LaserTool is a company that we acquired that does laser hardening, and the telescope we see -- saw in the beginning, that surface has actually been laser hardened. We also acquired called a company called Peristeel. Sami will tell more about that in his presentation, but we also offer a lot of safety solutions for roofing. Tibnor has a clear strategy to go for more processing. They used to be a clear distribution center, but now it's more of a processing center to add more value to the market and the customer. And last but not least, we believe that we have a perfect position to add 3D printing into the market.

Our objective is to sell powder for 3D printing, but also bring the technology into the market. It's developing slowly, but we understand that, that's usually the case with new technology, but we're very certain that this is going to grow. And we have a perfect position for this. I think we're the only company in the world that offers advanced high-strength steel powder to the market. And then we shouldn't forget about this. We still have a lot of customers. And this summer, I went to see a lot of our automotive industry customers, and they still confirm that they need this and they're willing to pay a premium for it.

I don't think that everything that we can produce using the electric arc furnace can be sold as a premium, but I do believe that there is a part of that that we can sell as a premium. So when we sell advanced high-strength steel, we're able to get much higher profits. So it's a clear indication. It's very, very clear from our sales experience. So the idea is that we continue to grow the value -- the more advanced high-strength steels to the market that gives us more earnings. And that's a clear part of our strategy. Same thing when it comes to the value added, we can also see that when we sell it as a value-added, we earn a lot more from it.

This is also why POSCO and other companies are going in this direction. And I touched upon that before. But according to our business forecast, we only think that it's around 50% -- 15% of what we're going to sell that we might get a sort of a 0 premium on it or a low emission steel premium on it. And what we see now is the indication is EUR 200 to EUR 300 per tonne. But like I said, we estimate it's going to be 15% now, but we have the ability to grow this business if we need to, and if the market wants to. So this is also showing what we're going to do in -- even in Special Steels, they were going to continue to go more for the niche products they have on the top of this pyramid. And we're going to go for more of solutions when it comes to value added.

And then, of course, we have the option to sell more of this fossil-free steel to the market if the customer wants it, but they have the option to choose what they want to. So the target we have is to reach 55% premium. 2024, we already have done that. And then to reach 65% in 2030. We have to remember now that the large investment we're doing, especially the one in Luleå, is going to add more capacity when it comes to premium production. That will not be in line online until end 2029, and it's going to take some ramp-up time. So it's not realistic to believe that it's going to be higher than 65%, but then we have higher ambitions going from 2030 to reach 75%.

To support our strategy, to support our sort of advanced our premium strategy, we have an aggressive investment program. You all know about this Luleå investment program. And in this case, the Luleå case has been split into 3 parts. This is the Luleå complex. This is actually where we're going to get more capacity for the metal coating. We're going to be able to provide a metal coating that only 1 other competitor can do on the market. We're also going to be able to do the Docol in higher volumes than we can today. It's going to be an additional capacity for it. And this is a key for our success going forward.

We're also going to replace the sort of outdated and old hot strip mill Borlange with 1 in Luleå, and that's going to lead to higher efficiency and lower fixed costs. And then, of course, we're going to move away from the blast furnace than using electric arc furnaces. And this transformation is being done both in Oxelösund as well as in Luleå. And then we're also planning and some of this hasn't been approved as some has, but we're planning to grow the quenched and tempered market, the area that Per is responsible for because that's where we see the biggest earnings and also where we see the biggest potential.

Our Nordic transformation is continuing according to our plan. And we still believe that the frame of EUR 4.5 billion for the mini-mill in Luleå is still valid. Carl will cover more about that in his presentation. And we also -- we are in line when it comes to the electric arc furnace investment in Oxelösund, and you will be able to see possible today and you get more information on that. And then when it comes to a Raahe. I think that initially, it was communicated that we were going to build a mini mill. We have decided it's not going to be a mine in Raahe. It doesn't make any sense. Raahe is going to be a site where we're going to have more flexibility.

I think it's extremely important that we have a large production site that doesn't have continuous production. We need to be able to cool down the slabs and then reheat them, when you have protected grades or when you have grades who are sensitive to hydrogen, et cetera. That flexibility will be built up in Raahe, and I think that's extremely important. So the plan is it's going to be an electric arc furnace, but it's going to be a similar type as we have here in Oxelosund. That means we're going to add it into the existing production. It's going to be a much more cost-efficient solution, but most important for me, it's going to be -- give us a more flexible solution and a good complement to the Luleå mini-mill. Yes. I think for me, this slide is quite important. This is an illustration of what we want to do. And to -- on the y-axis, you have the EBITDA per tonne. And then on the x-axis, you have the premium share.

And you can see that we're all planning to move in the direction to increase our premium share. I think the biggest movement is going to be in SSAB Europe because that's where we are a little bit more sensitive when it comes to market prices and spot prices. But the idea is that SSAB Europe is going to reposition themselves to become a more of a premium supplier. We also have the idea that we're going to continue to upgrade the portfolio we have within Special Steel and Per will talk more about that. But we have, for natural reasons seen how defense industry is growing, but we've also seen that grades that 500 turf is growing in demand, and we're going to capitalize on that.

And then we, of course, we have in the United States, we're going to try to capitalize on our -- first of all, our unique market position when it comes to cost leader, but the limited competition in the United States as well as working more with value-added going forward, and Chuck will explain more about that in his presentation. Then to summarize, I think that a lot of analysts, a lot of customers are today see as a world-leading steel company. We already today have the most advanced steel grades in the world. We offer unique solutions when there are no other options on the market. This is something we're going to capitalize on.

We see also that the market trends are moving in our direction, in our favor. Not only is there a more bigger advanced high-strength steel, but we also see that when others are pausing their green initiatives, we continue with this. That gives us an opportunity. We're not dependent on it, but we have the opportunity to capitalize on it when we get to that point. And it's very, very clear that in a world of overcapacity to go for premium and unique customer value proposition is really the right way to go. And that's really what we're going to target. And we have the investment program to support I think with that, I think that was my last slide, Helena.

Yes. Thank you, Johnny. So before we move forward, let's take a little and see if we have any questions from the audience. [Operator Instructions] so let's see, do we have any initial questions? Yes, let's start microphone coming here.

It's Tristan Gresser from BNP Paribas. And just maybe 1 question to start off with the rate investment you decided against to do a minimal. Can you explain the rationale behind it? And in terms of CapEx, if it's closer to what you spent at Oxelösund, which was SEK 6 billion. Is that a good reference point? And also lastly, you said that the CapEx will not overlays so in the presentation today, you shared some insight. So that does mean that we shouldn't see CapEx from until 2031 at the earliest.

The core of SSAB is the knowledge on how to produce real advanced high-strength steel. When you produce continuous production, you don't go through phase transformation. You shall stay at austenitic phase. That means you have limited abilities when it comes to controlling grain growth. You have limitation when it comes to handling protective steel grades. And you have also limitation when it comes to handling the hydrogen that could be very embrittling to the material. That means that we need to find a new way to produce that, and that needs to be in Raahe.

So the rationale behind it is that we're going to be standardizing and producing more volumes in Luleå, more base production, volume production with efficiency, but the grades who needs to producing a more advanced way will be done in Raahe because we need to have a slab, cool down and then reheat it again. And we might also be forced to do diffusion annealing before we start the production. So just the rationale behind it. We need that flexibility. And so clearly, our strategy is to be more of a premium supplier. Luleå mini-mill will do some of that. But for the advanced -- real advanced steel grades that will be in a sort of a coil format needs to be handled in Raahe through not a continuous production. So that's a sort of rationale. And it's strictly related to the portfolio that we want to produce in the future. I hope that answered your question. And then your second question was related to the size of the...

CapEx investment.

The CapEx investment. And it is clearly going to be much cheaper than minimal. I can assure you that, but it's going to be a larger investment than the one on Oxelösund because the Oxelösund furnace is slightly smaller than the one we're going to invest in Raahe. So we're going to have 2 electric arc furnace as well. Gives us additional flexibility as well.

Well, you're still going to plan to build electrical arc furnace at Raahe?

Sorry, come again?

You're still going to build new electric arc furnaces at Raahe?

In Raahe? That's our plan. Yes, it is. But the timing is another question. We need to make sure that we feel comfortable with the raw material supply. So not until we have a raw material supply that we feel comfortable with because we are in a situation now that in the beginning, we're going to have scrap production in Sweden, both in Oxelösund and also in Luleå and then we're going to have iron ore production in Finland. That gives us a very unique flexibility. We can supply pig iron from the Raahe mill into Ludo if we want to.

We can take virgin scrap from our mill in Raahe into Sweden, that gives us a flexibility that we can control within SSAB. I think that's extremely important. Of course, in the long run, we have ideas. We plan to get the Raahe from -- of course, we plan for it. But the initial -- in the beginning, it's only going to be 1.3 million tonnes. So that means that we need additional virgin material. And if you're going to convert Raahe, then we need to secure that we have a very material source to supply them. So for me right now, when you talk about risk, I feel very comfortable with having iron ore production in Finland and scrap production in Sweden, giving me a full flexibility on how I want to do the production.

More questions, yes, let's go microphone in the middle here.

Tom Zhang from Barclays. Maybe just following up on your point about pricing premium and your assumptions there. So you said maybe not all the product that you can produce from EAF, you can get a premium from but then you still talk to EUR 200 to EUR 300 a tonne from the SSAB 0 product. Can you talk us a little bit about the gap between those 2? Because I guess from a carbon footprint perspective, maybe not a massive difference between them.

Do you really think EUR 200 to EUR 300 is still possible, let's say, in 2030s, once a meaningful amount of production is also through EAF?

As of right now, the Eurofer is agreeing on a definition for the low emission steel. And it's very likely that we're going to follow sort of the less policy. So it's going to be graded. So based on the CO2 emissions, of course. So if the customer wants to have 0% CO2 emissions, we're going to be able to offer that. But if they want it, it comes with a premium because our cost will be higher. Hence, they will need to pay more. To your question is, do we have a demand for this? And the answer is yes. When we speak to a lot of automotive companies, they are more concerned they're not going to get the availability and they want to secure their volumes with us already now, and they're willing to pay this.

And these are quite often premium suppliers. They are the ones that are telling us that they are willing to pay EUR 200 to EUR 300 per tonne. But in our business plan for the Luleå mini-mill, we have used an extremely conservative figures because this is a very high uncertainty. We don't know what your is going to be like. We don't know what the market driver is going to be around the corner. But what we can tell you that today, there is a demand, especially for the automotive industry. And today, we know for certain that we can get to EUR 200 to EUR 300 per tonne for it.

Then the question is what's going to happen in 2023. It's really hard to say. It's hard to predict. And that's why we have been very conservative all along. That's also the reason why we only said 15% of what we produce, we believe they're going to get the premium from even though there's going to be a lot of electric arc furnace production.

Let's do 1 more question, and then we'll move on in the program, and Johnny will be back for more questions later. Yes.

Johnny, this is Alain Gabriel from Morgan Stanley. Your strategy used to be much more focused on the downstream where you see the biggest opportunity for expansion. What about the upstream? You seem to be migrating away from the upstream. And this is a key competitive advantage in entering your green feedstock. Is there room in your strategy for the upstream investments? And do you not worry that there's going to be value leakage through the cycle to the upstream green pig iron, for example?

So it's a relevant question. We have partnered up with LKAB. And the idea is that this hydrogen reduced DRI, is going to be produced by LKAB. And that's still valid. I know that there's been a lot of articles in the paper, et cetera, but we have a close communication with LKAB. And I can confirm that they are strict on their plans to produce the DRI facility. I think that's a good starting point. Of course, we are all the time evaluate what our position is going to be when it comes to iron production -- pure iron production.

And of course, that's an assessment we're doing all the time, and we're also assessing the risk. But it's not a part of the package that we are announcing now. I think what's important is our premium story. And like I said in the beginning, in a world of overcapacity when you can buy steel at lower than variable costs. The only way to make money is by going for premium. And we have the best platform in the world to actually do that. And the demand is there. And of course, we want to capitalize on it, and that's what we want to do. But we haven't left sort of this hybrid technology for sure. That's still part of our strategy. But we have nothing to announce on it at this point.

Okay. Thank you so much for those questions. Thank you, Tony, for the presentation. You will be back later on in the program. But it's time to move over and take a closer look at the divisions and subsidiaries. And our first speaker is Per Elfgren, Head of SSAB Special Steels. Per has been with the company since 1996, in this role for about a year because you were previously responsible for market development and stepped up to this role when Johnny moved up to the CEO role. So welcome, Per and the stage is yours.

Thank you very much, Helena. So special steels. As a truly global business. We operate 2 sites, 1 in Mobile, Alabama and one in Oxelösund Sweden, where you are right now. So very much welcome here. We have a global presence with our sales, and we supply more than 15,000 customers, and they represent a wide variety of different segments. So whenever someone needs a strong light or durable solutions, we are there to support and also to deliver.

And with this, we have built actually a quite solid or very solid and resilient business model that is based on 100% premium high-strength steels, local presence, and our own distribution. So now for the next 20 minutes, I will take you through how we got to the position that we have today and how we intend to work in order to stay in the lead. It all starts with high-quality products. Hardox, our wear steel, I would argue, it's the most well-known brand in the steel industry. It is hard, tough and you use it when you want to increase payload or uptime. Strength, our structural steel. We say it fights gravity because you use it when you want to build something light and strong, for instance, to extend the reach of a crane or make a trailer a lot lighter.

Armox, protects people and property. We supply it both to civilian military equipment. It's bullet and blasting proof, and it's really good to have if they go and get tough. Toolox, our pre hardened tool steel is used when failure is not an option in applications like plastic molding, die and machine components. And then we have the partner that Johnny touched on as well, intended for 3D printing, and it's going to be a product that replies you can actually 3D print parts in our excellent steel qualities. So then the question is what kind of value does these products deliver to our customers and end users, and I have a couple of examples here.

Up to the left, you see a trailer. It's a trailer that was originally produced in high strength 700 material and the truck box in Hardox 450. So already there, an upgraded application, a good solution, I would say. But there was more to do to this solution. So by increasing the strength in the trailer from 700 to 960 and going from 450 wear material in the box to 500 tough, you can see that the customer saved another 300 kilos on this vehicle. By changing the solution, also the service life was extended to the double and over the lifetime, this vehicle will save around 5 cubic meters of fuel for the end user. So that's a good value for money.

Example number 2 is the Hardox HiAce. It's the very assistant steel combined with corrosion resistance. In this case, in this container, it was originally in the stainless steel material. Now with Hardox HiAce, the payload increased with 1.1 tonne, which is a lot in equipment like this. It was also cheaper to produce because we could remove a lot of welding, putting this box together. And you can see that the service life was almost tripled. So there's really good value for money, that is well. These things we do together with our customers. So it's our experts together with their designers coming together, working around these solutions to come up with this and save money.

And they know that they will save money, and we know that they will save money, and that's something that we can also get paid for when we do this. So talking about value and good values, another thing, good value is to stay on the safe side. And that's actually what you do if you use our protection steel, Armox. It comes in a very, very wide variety of different grades and thicknesses. So no matter if there is a challenge within the civil or military application, we are there to support. And you can see a few examples up here. You have the train. It's actually a day moving from Mozambique to South Africa that needs bullet protection to protect the engine and also the cabin where the driver is.

You see buildings where they put bullet-proof plates in the facades. And you see vehicles that needs to be both bulletproof, but also another value that Armox delivers is blasting proof, so you can withstand blasting, which is very important for these vehicles that moves around in hostile environments. And talking about different solutions and how we contribute to make things lighter and stronger. I think this is a good example from the real life. And you probably see this on the road every day. It's a regular tipper. And if you go back 25 years up to the very left, that's what a tipper look like in the '90s, very rigid stiff boxes, a lot of welding and a weight of typically 4.5 tonnes.

In the end of the '90s, we had a customer in Germany that came to us and we sat together and they said that they want to lighten up the tipper. And the solution is what we call -- completely different design without stiffeners, but still actually better lifetime and so on. And already at this point, you can see that we saved 1.5 tonnes in this solution. Over the years, the design has been refined. Materials has been developed and the solution today using the most modern technique weighs about half of what it did 25 years ago. So this means that the end user can haul payload instead of deadweight on the road.

And SSAB has been behind all of this development. It's our experts and salespeople going market by market, customer by customer, sitting together with the ones producing trailers, coming up with different solutions, and this is where we are today. So you can think about that when you're out driving now, look at the truck box. This is most certainly, the design you will see, and that's us behind that development. Now I will show you a movie, and it illustrates how we have been working in order to develop very concrete advices because you get questions when you sit down with a customer here. How do we design? What can we expect?

So we have developed a very applied way of testing. You will see how that relates to the everyday life of a tipper, and you will also see at the very end, a proud customer in Turkey, demonstrating in his workshop how Hardox can withstand really high impact. So here we go.

[Presentation]

So this last clip here was actually filmed in Turkey, a few months back, and he demonstrated for us how he takes his customers around in the workshop to prove the excellence of the truck boxes with Hardox 500 Tuf. So you can see it's a very harsh environment that these boxes are in, right? And we use this drop test to see what kind of dense and so forth you get. And based on this, we have also developed calculation models. So it's a lot quicker for us today to support customers on how to design. And it has also helped us to develop new materials with unmatched properties.

And if you look at this graph here, on the x-axis, you have the hardness of a material and actually, it's very simple to produce a hard deal. You only add carbon to the chemistry, you heat it up and you cool it down, and you will get a very hard material. The trick is to also make it tough because toughness is needed to withstand the impact that you saw in the movie. If you don't have impact happiness, it will immediately crack as soon as the rock lands in a box. And this is the core of what we do when we produce our quenched and tempered steels.

We can make our steels hard and tough to really excel in applications like truck boxes or buckets. And if we compare ourselves to competitors on the 450 level to start with, you can see that we were already ahead of the game, same hardness, but a lot tougher, which means longer lifetime. Now on the 500 level, we have launched the 500 Tuf, which is as tough as a 450 material, and that's unique. We are the only one who have this solution on the market. And this is something that we will really, really benefit from going forward now when we want to continue to stay in the lead on truck boxes and other equipment.

So then you can think this is enough then, I guess, to stay in the lead. Well, we don't think so. We need more than this. We have really good materials but we also have a very solid business model and address on a few different things. I said in the beginning that we supply quite a few segments. We supply the yellow goods industry, aggregates, lifting forestry, fishing, recycling, lifting and so on. And that's a very good thing because it creates stability. When one segment is down, another is up. We have a global presence, which is good and we supply from local stocks right where the customer is when they need it.

This also creates the ability because if 1 market is down, another one is up. We have also deliberately chosen to go with small and midsized customers. And this example is from Germany, just to illustrate what it looks like. A lot of small customers that we supply, so we are not dependent on a few large accounts, which also creates stability if 1 or 2 customers should leave us. We have our own sales and distribution and technical support globally, and that is absolutely needed. If you want to work close with customers, with upgrading and develop the truck box market like we did, there is no distribution distributor in the world who could take over that work from us, so we have to be there ourselves.

And then we have our brands. We want everybody out there who uses equipment with our steel in it to be aware of, which still that creates the value for him or her in the everyday life that creates the payload, the lifetime and so forth. So we have developed a couple or a few programs. Hardox wear parts is a chain of mechanical workshops producing spare parts for the wear and tear industry in a very local environment, more than 500 of these around the world. We have also the ingredient brand programs. So if you see a trailer or truck box with a sticker Hardox In My Body, for instance, it means that it is an approved design by us, and we have allowed the customer to use that sticker so they can tell the end user that it's made out of Hardox.

And the end user realizes this every day. So when they order a new tipper, if they are happy with this one, they will ask for another tipper produced out of Hardox. It creates a pull effect. And I think this business model over the years has proven itself. If we look at the financial figures, you can see something happened between '21 and '22, was a hike in the steel market. Prices went up and special steels role on that wave. But we also know that the steel market has been quite sluggish lately, but we have been able to stay on a very high level when it comes to prices. We have not fallen back.

And of course, this has also generated good profits over the years. And the reason why we could do this is because we work with the mix. We make sure that we move over to Hardox 500 Tuf go into protection areas where we are quite unique. And this, I think, leaves in a very good position now if the steel market takes off. We are already on a fairly high -- or on a high level actually. And if steel market takes up now, I think for us, it's going to be a possibility to go even higher. So what do you think about the market?

Will it grow? Well, if we look at 4 different segments that we supply to, raw material, hailing, have transport lifting and protection. There's an estimated growth. This is sort of the consensus from a lot of different sources, between 3% and 10% in these segments. But you can see raw material handling. They are looking for light-weighting, more durable solutions; heavy transport, also light-weighting every kilo saved in a trailer and a container like that is 1 kilo more payload, which means money for the end user at the end.

Lifting urbanization and so forth, we're building higher and higher. We need longer reach to build -- to get that, you need high strength steels, and that's exactly what we do. That's the only way to extend the reach of these booms and make them lighter so they can deliver material on high. And then protection, it is a very insecure world, both in civil and military environments. In a vehicle like this, for instance, you need bulletproof, blasting proof, but it also have to be light because it's moving in very rough train.

So the combination there is something that we can deliver with our Armox plates. And if we look a little bit deeper into the protection area, this is an estimated growth of plate and strip from 2025 up until 2030. So this is steel in general. The question tempered part of this where we have our Armox plate is only a small fraction of it. But you can see that there is an estimated growth in this segment or more than 10%. And that's not strange. I mean there's been a lot of programs launched lately where pretty much every country say that we need to improve our capabilities within this area within the defense sector.

So for us, of course, if the market increases, we can ride on that way, but we should also remember that the big part of that is ordinary steel, which means if we move in with Armox in this ordinary area, we can lighten up stuff as well. We call that upgrading. There is also a need for what we call Tier 1 supply, welded components, banded components and so on. And that's something that we do also, and we intend to increase that even further going forward. And when I say upgrading, I think that's pretty much described what we do in general. It's not only in Armox where we have this possibility.

To your left you see the market, 335 million tonnes. We operate in the quenched and tempered area, in this small part here right now. It's about 1% of the total market. But for us, it's not about growing within the red area. It's about moving in this direction because everything that is not produced in quenched and tempered steel, I see that as a potential because that's a way for us to go in and make stuff lighter, stronger. So that's really where we want to be. So how do we do this to succeed going forward? I spoke about the mix earlier, and that's going to be very important going forward as well.

Last year, we had a share of what we call products with the highest customer value of about 30%. 2030, of course, the total will be higher. We will grow, but the share will also be a lot higher. So we're aiming at 50% of the total sales with these special products. And if we do this, we think that we will remain #1 on the market. And I'm convinced we will be actually. And we're looking at the 5% annual growth year-over-year here. And that will deliver an EBITDA of more than 20%. And our business model, staying close to the customer, also opens up other opportunities.

Johnny touched on a few of these in his presentation, and I also mentioned the stocks that we run all over the world being very close to the need all the time. We will develop this further, and we're also right now developing an e-commerce channel, so it will be easier for everyone to access these plates. Abraservice, the chain of companies that we acquired from a competitor several years ago, it was a distribution company. Now we have turned that into a hardware part company producing spare parts for the aftermarket.

And then we have our shared centers, maybe a strange name, but it's shared because we sell both full plate from these centers, but also parts for the OEMs. So if an OEM wants to have full plate for their production, but they also need support with laser cutting or bending, we can deliver that from our own centers. And a little bit more areas to build capacities in additive manufacturing is a big thing that will come. We have started to produce powder. We will increase this capacity going forward, but it means that you can actually 3D print part in our excellent steel qualities and that's super good for certain applications where you have complicated geometries and so on. Laser hardening was also mentioned by Johnny.

We have acquired a company in Sweden that has a very interesting technique where you can make really, really high hardness on surfaces and parts of components. And that goes very well along with 3D printed parts, but also our Toolox, machine parts and so on. So that's a technique that will be developed. To be able to develop this, some investments are needed, of course, we will increase the heat treatment capacities. There are a few things ongoing. We have a tempering line in Mobile, Alabama that's being built as we speak. We will open up bottlenecks in production in order to increase capacity, but there will also be need -- there is also a need for completely new heat treatment lines down the line.

We have the conversion in Oxelösund, you will see later on today, the electric arc furnaces that opens up good possibilities for us. We will produce for our own fraction here in Oxelösund but the capacity will be higher. So we will be able to supply within the Nordic system for SSAB also slabs. And then a little bit further down the line, the Luleå mini-mill that will add more capacity actually in the strip format, but also supply, different formats going wider, which is a good thing, especially if you look at truck boxes and these things, they need thin and wide plates. So that opens up good possibilities for special steels.

So if we summarize, we have built a very resilient business model that stands strong even in volatile times. It is powered by high-strength steels, local presence and our own distribution. Our materials, they save money, they protect lives, and they enable stronger, lighter and more sustainable solutions. So all the way from Hardox. So to the 3D powder here that we showed, we will continue to push the boundaries in order to create customer value, of course, and also to make sure that we stay in the lead going forward. And we have been doing this for 50 years, and we are prepared for the next years to come as well, upgrade the market because the market calls for better solutions, and that is exactly our home turf. That's what we do.

And we're going to do it now, growing not only by taking market share from others. We're going to do it by growing the cake, if you remember the graph take from the ordinary steels, make it lighter and stronger. And this is the way we have been operating, and I think it has proven itself over the years that it is a profitable business. And I'm 100% sure we will be profitable also for the years to come. Thank you.

We will do a bigger Q&A with all the divisions at the end, but I will ask one question now. So the 5% growth that you're outlining, what makes you confident that you will be able to deliver that.

I think if you look at the need from the segments we supply, they call for light stronger solutions. So that's the growth in itself. The numbers I showed here was the consensus from a lot of different external sources. So there is a demand for this. We will, on top of this, also be able to upgrade, right, taking on the ordinary grade. So the 5%, I'm very confident with. We have historically grown more than that, to be honest. So I think it might be on the conservative side.

That said, it is a volatile well, right now. There are a lot of conflicts, tariffs and so on, but the 5%, I'm confident.

Thank you, Per. And with that, let's move forward to the next division in SSAB Europe, introducing Tony Harris, who has been in this role since earlier this year. Tony joined SSAB through the Rautaruukki merger in 2014 and has a broad international and operational experience from the industry. Tony, the stage is yours.

Than you, Helena. Good morning, everyone. Very kind, very hospitable people, the leads that they brought some English weather here for us this morning for my benefit. So very nice for them to do that. As Helena said, I've been working in this division for 16 years now. I've been part of the management team for the last 10 years since the merger with SSAB from Rautaruukki. And I took on the role of head of the division in January of this year. So a significant role change.

But I'm really happy with the progress that we've made during this year, but really happy with the progress we made over the 10 years. Previous one we work -- when I was working under Olive as the division head because we were on the right step because it's very easy sometimes for us to sit here, and we're like it's difficult to follow here because I know he's the golden charge and it's making 25% EBITDA margins and all of that, and I'm just the poor guy operating in the European steel industry, but imitation is the best form of flattery. And I think that what we've done over the last 10 years, we've made our business more resilient by working on upgrading our sales mix and moving to a more premium grade strategy.

And I think we've done a reasonably good job at it, and we're going to continue doing with it, and that's what I'll show you today. So a brief introduction to SSAB Europe. Nearly SEK 42 billion in turnover last year, nearly 7,000 employees. What I'm really happy about is the safety performance, Johnny touched upon it earlier from the corporate perspective. But from the vision, we've moved from 8.6% lost time injury frequency in 2016 to 0.4% during 2024 and 2025. So we're at our best safety performance ever, really happy with that development, really happy with what it said about the professionalism of our workforce.

In terms of production assets, we have Luleå, Borlänge, as you know, Raahe, Hämeenlinna and Tubular mills in Finland, plus then service centers in Italy, Netherlands and U.K. plus Arendal in Sweden. And then as we look at the segments, very balanced in what we sell, very balanced, not overdependent on any one segment, so we can handle construction slowdown by mitigating with automotive growth and so on, and also not overexposed by any single product group. So very balanced in terms of our product offer at this moment.

Perhaps just a little bit too much hot rolled. If you look at hot rolled, cuts to length, coils and plate, and Luleå transformation will address that. One key thing here, I think, really relevant as we come in 2026 is that 88% of SSAB Europe sales go into the continent of Europe. So as we position ourselves in the face of carbon border adjustment mechanisms and safeguarding actions as they come into force in 2026. We're very well positioned to exploit any opportunities that they present, but we're also not very well exposed or very highly exposed to retaliatory factors on export sales.

So current position, where are we? As we talked about earlier, imitation, upgrading, moving to advanced steel grades, developing our premium sales mix. We've moved from 2015 to 27% premium sales mix to 48% in 2024. I put some numbers and some color to that for you. 21% of our sales is 675,000 tonnes. Each tonne of premium grades on average, EUR 100 more margin than a standard. So this in itself is EUR 675 million -- EUR 67.5 million on the bottom line. Also very important to us that we retain our home market leadership, and we're going to build on it. So we work -- we took on Ruukki Construction, as we said. We've retained over this period a 45% home market share where we have a leading position, and we take price leadership very seriously.

Some of the product that we sell, we talk a lot about advanced steel grades, Martin CITIC deals, ultra-high-strength steels for automotive, where we've had a significant development. We've doubled our volumes. We come back to it later. GreenCoat products. We created a range of color-coated products called GreenCoat. They use bio-based technology, and we offer warranties of up to 50 years, creating more value for our customers. Piles, we have a great example that you'll be able to see in the exhibition later of where we add value to our piling products that supports infrastructure and foundation work for new buildings, but we create huge extra value for our customer with a unique application that you'll be able to see an example of in the exhibition, you'll see it later.

And then also, we have the opportunity to sell, first of all, decarbonize steel, SSAB zero. And then we do value creation internally at our mills. For example, in Raahe mill, where we have a plate processing center, which drills and bends and bevels and cuts at very, very high -- a very close dimensional tolerances, we add value. And this example here is the blue steel part is a base plate for a heat exchanger for alfa val made from decarbonize and fully produced in Raahe mill.

In terms of product development and automotive, I said that we've grown over this period by more than double in advanced high strength and ultra high-strength steels. And that's really development. And that's helped our resilience versus the standard market in Europe and reduced our exposure to unfairly cheaply imported products. And we've done it through constant innovation, constant upgrading, exactly as Per described with Hardox. We've done it with Docol. And what we're talking about here is really absolute niche of the niche. We talk about advanced high strength steels growing.

The benchmark for where advanced high-strength steels moves to ultra-high-strength steels, it's about 900 megapascals. We're talking with Docol being 1,700 and even 1,900 megapascals. So ultra-high-strength steels, niche of the niche. So as the market develops, we are developing at the richest end of that mix. And very interested in how we've done it with the customer base. In 2015, we accessed the market through -- we had a very small amount of OEM approvals. We access the market through service centers. Over this 10-year period, we've increased the number of OEM approvals by 430%. We now negotiate directly with the automotive companies.

We engage with them at the design phase rather than in the delivery phase. So they're freezing the model design and specifying our material on the application. Three examples here of how we create value for our customers. Two of them are light-weighting. The first one is steel for steel. So it's an upgrading, as described by Per similar concept, which then delivers a weight reduction of 20%, a cost reduction of 10% and a 20% CO2 reduction. As you all know, particularly automotive, very much still focused on their decarbonization journey and their decarbonization targets. So we have to find ways to create value for them with CO2 reduction as well.

The second one is a similar example, but it's an example where we use Docol 1500M product, and we substituted for aluminum. So in this case, the weight is pretty similar, we've managed to get a thin enough product, strong enough product that we can take aluminum on and be like-for-like in terms of weight, but then it's half the cost for the customer. We're reducing the cost by 50%. And therefore -- because we're using so much less material, we're reducing the CO2 emissions by 34%. And a third example to prove that we're not exclusively looking at automotive, this -- now I have to look at my finished colleagues, so I'm going to really try for you, but Hailuoto bridge in Oulu, Northern Finland, close to our Raahe mill.

Original product that we supplied the bridge with was an S355 material, but it was painted. So now we supply a weathering steel in a 460 ml. So it's substantially stronger material. We can use lighter, thinner material, but it's also a weathering material that doesn't corrode. So it no longer needs painting. So not only do we take weight out of the bridge, less material consumed, therefore, cost saving, but we reduced the life cycle cost, but no need to continuously paint the bridge year after year after year either. So we take life cycle cost down and then we deliver CO2 reduction.

And what that's given us over a period of time, as Johnny talked about earlier, we have, over the last decade, outperformed our European peers. So maybe not the performance that Per has delivered, maybe not the performance that Chuck has delivered either, but we're in a situation where in the market that we are playing, we put ourselves in a very strong position. And that's despite the fact that we still have some challenges to their cost structure, which the transformation of Luleå will address.

And so if we look a little bit further forward, what does the market look like for us at the moment. I think we expect to see -- I think we've had quite a lot of headwind in the last year or 2. It's not been an easy market to operate in steel industry in Europe, as you know. We've done okay. We've held our heads above water. We've been resilient. But I think that we're going to be in times for structural change now. From the 1st of January, we have implementation of the carbon border adjustment mechanism on imports.

The numbers aren't finalized yet, but the impact is likely to be for each imported tonne of steel between EUR 40 and EUR 60 additional cost. Thereafter, as Johnny touched on, we're going to go into this period of safeguarding where we have a reduction of around about 18 million tonnes or a halving of the tariff-free material that will come into Europe. And this, in all likelihood will drive prices substantially higher, and it will also drive utilization rates higher. We expect something like between a 5% and 10% increase in utilization as a result of safeguarding as we move forward. Not just safe guiding, but we also have the situation in Europe where I think 50 million tonnes of capacity has come out of the European steel industry in the last decade.

So European industry is not so resilient in terms of meeting the gap, the tariff -- the safeguarding actions will create. So I think we're really well placed high utilization, very lightly higher prices as well. And then also demand growth, construction, infrastructure, for example, the German government's 500 billion infrastructure bill. It's the green transition, all going to be helpful for creating demand for us as well as this migration towards lighter material requirements for automotive. So we're going to have some good demand drivers as well.

And then steel and metals action plan, very much see public procurement projects process being put in place, melt and pour being put in place. We expect to see some real beneficial elements to that to our business as we move forward. And in terms of the market, what does it look like? Now we're in a situation where we have a lot of legacy blast furnaces. There will be fewer blast furnaces in operation in the next 10 years. Some will still be there to be run for cash, but not all of them. We have a very small amount of electric arc furnaces in Europe at the moment. That will grow as well. In all likelihood, there will be some many mills in Europe.

SSAB will have one. There will probably be one or more other ones. And then imports will change because of CBAM, we'll have imports still. We'll have fewer of them, but we'll have a greener imports to circumvent the need for the carbon tax. So we see a reasonably good position for ourselves as we move forward in terms of supply. And then demand growth numbers are what they are. The automotive numbers and the heavy truck, we come back to that in a separate slide. Construction, we talked about urbanization. Infrastructure projects, they're going to drive demand.

We've also had a relatively weak construction market for the last 4 or 5 years. We expect some rebound coming in starting in 2026. But these are going to be long-term drivers for the products that we produce. Energy, this 20% is related to renewable energy, solar and wind investments, but both heavy consumers of steel products and steel products that we supply. And then shipbuilding, very important, particularly for Raahe, where we have the plate mill, we see very strong demand at the moment. Up in Finland, Myotoku built these icon series ships. They now have been awarded 7 of those. We supply many tens of thousands of tons to each 1 of those ships.

and then also icebreakers here as an example, you'll all be aware that the U.S. Coast Guard recently announced the procurement of 11 icebreakers, the first 4 of which will be built in Finland. And then the next will be built in Texas, but we work together with our colleagues in the U.S., how we can get product from -- unique product from Raahe mill into those applications that are built in Texas as well. And this is the example that I was talking about -- I come back to in automotive. In 2015, 26% of the average vehicle used -- 26% of the steel content of an average vehicle was advanced high-strength, ultra-high strength or press hardened steel.

By 2030, that number will grow to over 60%, and it will grow in the products that we want to produce. So as we move forward, ultra-high-strength steel grows substantially, and that is -- when we always talk about unique Docol products, that is ultra high-strength steel, and that's where our development will be at its greatest, but the challenge we got is that we are at a capacity constrained. And again, this is really important to understand why we are investing in additional capacity in Lulea so that we can meet the market needs here, it's not about producing more. It's about producing more of the right deal that the market wants. And of course, the drivers here, we touched on most of those already.

And as said, Lulea transformation is the cornerstone of SSAB Europe's strategy. I talk a little bit about the products and the cost position later. But the thing to focus on here, I think, is this number one. So additional premium capacity is very important. Overall, the Lulea transformation will increase our steel production by 500,000 tonnes. But our cold mill capacity, our cold-rolled continuous yield and metal coated capacity will go up by 1.2 million tonnes. That's 1.2 million tonnes of premium -- of capacity that we can produce premium products. And therefore, we will have a reduction in the standard sales of hot-rolled coil.

We will sell fewer standard commodity grades in the future than we do today, and we'll sell more special. And we need this investment to give us the capacity to do that because we're constrained at this point in time. Of course, also here, CO2 still massively important to our customers. There was a question earlier. Yes, we still have the request from our customers. They are still prepared to pay a premium. In fact, I'll come back to that in a second. In terms of the product offer, we have a lot of new grades available to us, a lot of new coatings available to us, and we have a wider dimensional capability in Luleå in the future than we had in the past.

And what it does is it takes us from having a sort of medium to high offer in the European Union, amongst our peers. We're very competitive at the moment. We've got good production assets. We've got good product offer. But we go best-in-class everywhere. We've got best-in-class dimensional offer and the qualities that we can offer and the coatings that we can offer. One example of which would be at this point in time, we can't supply metal coated for exposed products in automotive, so hoods, bonnets, ores. When Lulea is transport, we are able to do that.

And if you look on the right-hand side of the chart, what it means is that at the moment, we can only just about supply half of the material needs on a car. Post Lulea, if we choose to, we will have the capability to supply every ton of flat steel that, that vehicle needs. And I was just coming back to this, do we see a need from our customers for decarbonized. We are consistently signing new partners up. We now have more than 65 partners in our fossil free partnership network from mobility sector, predominantly there are the ones that are pushing the hardest, then also from construction and industrial and energy applications, 65 customers with a commitment to buy 2 million tonnes of steel from us.

65 customers with a commitment to buy 30% of that 2 million tonnes as fossil-free steel or SSAB steel. We have that demand in place. So when Johnny said, we look at 15%, we have a partner -- we have partner agreements that cover that 15% already. And then as we grow, yes, we're going to work on the premium grade. Yes, we're going to work on decarbonization, but we're going to continue to develop value added. And what we're looking for is 4% CAGR over the strategy period, driven by an increased use of our downstream service centers and expansion of those service centers and of their capabilities. We just made an investment in Ghedi Service Center in Italy, where they can now cut to length Hardox material, they couldn't do it before. So we add more value downstream.

More and more plate processing as we talked about and then more and more solution applications like the pile wall you'll see. It's very important to us as we do this that we work with our subsidiary divisions, Ruukki Construction and Tibnor to add that value and to create that additional value for our customers going forward. So I have one more summary slide, but this 1 that is almost a summary side. We go from 1.5 million tonnes of advanced steels to 2.4 million tonnes post Lulea transformation. You can probably work that out what I just said about how much a premium tonne is worth versus a standard tonne. Then we go to a product offer, which is 25% decarbonized, then the remaining amount is EAF production from Lulea, with some product from Oxelösund. And then we still have the conventional blast furnace production from Raahe. But we're giving the option and flexibility that Johnny described earlier to our customers in terms of product offer, but then also the decarbonization.

If they're prepared to pay for it, they can have it. If not, they don't have to. And then very important that we retain our home market position in Nordics as we will do, we will grow substantially through our subsidiaries, but also with the expanded product offer that Lulea gives us so that we're able to take more of the home market than we've previously been able to because of either capacity constraints or offer constraints.

And so in summary, where do we go from? We go from a 48% mix of advanced steel grades to a 56% mix post Lulea? In terms of decarbonize still, we reduce our CO2 output significantly with the electric arc furnace conversion. And we deliver at least 1 million tonnes of SSAB fossil-free steel or SSAB 0. Value-added services, we grew by 4% CAGR, and we changed our cost position. At the moment, with the way we're configured in Sweden, particularly, we're relatively small mill. We're not -- we don't have the economies of scale nor do we have a very cost-effective production route. As we move forward, we have a step change in our operating costs and our flexibility.

Ten seconds left. That's good timing.

Thank you, Tony. It was a very good timing. Before we go to coffee break, you talked about the changes in the European market. In light of the strategy you just presented, how does that sort of create the outlook for SSAB Europe going forward?

I think, mainly, I covered it. I think that what we have is we're going to have some demand recovery. There's no doubt about that. But we're going to have a lot of changes on the supply side. So CBAM is the first one. It comes in January. It's already having an impact on the volumes that are placed with importers to bring into the European Union. It will impact prices immediately in quarter 1. So prices are inevitably going to go up in the first half of next year. Then safeguarding will come afterwards. And then the supply situation is completely different.

Utilization rates up between 5% and 10%, and that is going to be a massive game changer for us. The whole industry in Europe has been operating at less than 70% utilization, and that is not sustainable -- certainly not sustainable at the price levels that we've had to work with in the recent years. So it's going to change a lot.

Thank you, Tony. This takes us to the end of the first session. So we will now have coffee, and we will have coffee for 15 minutes. That means that we will start again at 11 Swedish time also for those of you on the webcast. Coffee served at the back end of this room and see you back again soon.

[Break]

Okay. Welcome back, everyone, and welcome back everyone also on the webcast. So we will continue on the route through our divisions and then continuing with subsidiaries. Our next speaker, representing SSAB Americas and the longest serving member of the Executive Committee, Chuck Schmitt. He's been with the company since -- well, with IPSCO since 1990. IPSCO was acquired by SSAB in 2007, and you've been on the management team since 2011. Welcome, Chuck.

Thank you, Helena. Nothing like being introduced as old. So I come from our North America headquarters in Mobile, Alabama. I'm going to take you through kind of 3 focus areas for the Americas. Number one, our leadership position today, followed by a look at the North American plate market as we see it. And then in consideration of the first 2, how we move forward with a customer value proposition. But let me start with a quick snapshot of who we are. And I apologize for those who probably know a lot of this. AGA still making capacity of 2 million tonnes, coming from our Montpelier, Iowa facility as well as Mobile, Alabama operated by special steels, as Per described, and then supported downstream by 3 cut-to-length temper level lines in Houston, Texas, St. Paul, Minnesota and Toronto and Ontario.

Our shipments go to the segments listed here. Fairly large exposure to energy, both renewables such as wind where SSAB remains the leading supplier for wind tower plate, but also in the traditional oil and gas, which includes pipe as well as electrical transmission. It also includes heavy transport, which is shipbuilding, barge building railcar and then rounded out by heavy equipment and construction. At the same time, these same segments our service through a network of distributors and major service centers that make up in any given year, 45% to 55% of our shipments.

And speaking of customers and segments, as Johnny described very well, we are second to none in terms of quality and customer service. I'll get to that in a minute and how that is rated where that comes from and combined delivering a better-than-average margin performance for the past 5 years of 25%. So our leading position really starts with that point on quality and service. It's an elite customer experience that we deliver in combination with a low-cost operating model and to exemplify that if you look at this 5-year average, and the Jacobson is a third-party survey, doing this for over 30 years, every quarter for not only SSAB for a number of steel companies in North America.

And if you look at the 5-year average, and you can go back almost to year 30 that we have owned this position on being #1 in quality as well as the service and overall customer satisfaction. And then when you look at our operating model, which is really laser-focused on productivity in a low-cost model, in combination with efficiency delivered on a daily basis. One example there with our continuous improvement our Black Belt teams and in Six Sigma delivering a targeted amount of generous savings every year. More recently, in the last couple of years, we've been working with equipment manufacturers as well as data companies on advanced digitalization, specifically in our electric arc furnace and gearing towards reducing our power on time savings and reducing costs in the steelmaking area.

This -- the ability to drive the low-cost mill down and generate operating profitability throughout the entire cycle is drawn up here when you look at both our Mobile and Montpelier facilities, a very strong track record as Johnny described, of a utilization rate through that period, significantly higher than the other average -- the industry average that has been wandering around, 78% to 79%. And then on our decarbonization journey. You've heard a bit about this already from Europe as well and probably very familiar from our announcement a couple of years ago of introducing the world's first 0 emission steel coming out of our Montpelier facility, where we have 99% renewable energy, primarily coming from the Iowa wind farms.

And that's used in combination with biofuel substitutes that we introduced at the time and at this point, producing over 300,000 tonnes of that for customers, both in North America as well as Europe. More recently, just in the past couple of months. And hopefully, you have seen some of this that we achieved another major milestone, producing a very stringent and aspirational, quite frankly, IEA standard for low emissions using our hybrid pellets. And we accomplished this in combination with doing a prototype wind tower for GE Venova in the United States and a bit later in the exhibit hall, Katie Larson, Head of our Sustainability in Americas will be there, and she can give you the full journey and even the technical background with the ban at the table as well.

And then lastly, in terms of benchmarking against our peers, Johnny has described this, so I won't spend a lot of time on it, but this is strictly from our plate peers in North America. And when you look at the top 4 producers, including SSAB through this period is #1 in volume that represent over 85% of the market supply and we've shown a consistent ability 7 out of the last 8 years to deliver on top financial performance. So what are we seeing going forward for the next 5 to 10 years and particularly no doubt you've been following in North America and what's happening in the tariff world that we operate in today, where are we going with green steel in light of changes on the emphasis of the current administration. There is no doubt that the new and existing state and federal policies in the U.S. are driving the U.S. industrial agenda.

That's really not the debatable. And you look at the impacts here not only has been identified earlier with 232 tariffs, you now have downstream derivative products under tariff and the expectation is that is going to stay in place in some form in some level going forward, was touched on the melted and port requirements made in America requirements with the local supply chains being developed now in the U.S., the reshoring of manufacturing driving a good deal of that. And if you go on the demand growth part of legislation here. It starts with what's already put in place is the bipartisan infrastructure mill. And when you look at particularly bridges and roads, they lean very, very heavily into steel plate.

More recently, legislation on the SHIPS Act to accelerate fabrication of military ships as well as commercial ships in the U.S. and even in the combination is -- Tony has described on the icebreakers. And then the energy dominance agenda, and I'll speak in a bit more detail on that, but the expansion for electrification in response to the boom in data centers as well as CHIPS Act and in AI, like a number of places around the world is just accelerating very, very rapidly. And that, in turn, is driving particularly key plate market segments. And you can see the growth rates below in construction, which has probably lagged most everything else, but expectations for nonresidential construction that is going to benefit from these onshoring activities as well as these investments, the SHIPS Act that I've already mentioned.

Wind, which has drawn a bit more of attention on the challenging side, but keeping in mind that the tax credits are going to run through the end of '27. And so the expectation is for the next several years to really move very, very quickly for installation and getting that tax credit and by the time we arrived at 2028, then we're also under a new election and to see what the next negotiations are. And then above all and 1 of the strongest markets we've seen and that we participated in transmission tower and recently announced that $1.1 trillion invested by utilities to rebuild and as well as recreate the transmission grid in the U.S.

So if you look at the supply-demand balance in the U.S. now specifically for plate. And let's -- and we assume that we have a growth rate of 2.9%, 3% for the numbers here. We quickly come to an imbalance between the supply side. And that calculates in even new investments, recent expansions at full capacity and that particularly becomes out of balance as we see the imports decline, which has already been happening this year. And so it's highly unlikely that sort of the Tier 2, Tier 3 suppliers would respond anywhere fast enough with old legacy mills, particularly up to new specifications here in order to fill that gap. So we have a leadership position and combined with a relatively strong market outlook. And so describe here how we leverage, how we advance that into to a customer proposition now of value targeting our customer segments as well as our products.

We intend to outperform our ability to maintain leadership on quality and service. Our team is quite proud of the recognition that we get from customers and surveys that providing the #1 quality plate in the U.S. at the same time with a full-service package. And then we look to target some of these key accounts, identifying growth here and then with a broader portfolio of products and services. And this is just 1 example of 3 of those with the targets we see for substantial growth to us because of positions that we have today that we feel we can leverage in those just a couple of things being mentioned there. The shipbuilding, which is -- you have a fair amount of the largest shipbuilders in the U.S. located down in that Gulf Coast area as well as the Southern West Coast that we participate in, and Tony mentioned the Texas operation.

Our Mobile operation here is extremely well suited to participate in that. And then when we look in transmission tower, we participated and been a top supplier in this through our downstream cut-to-length lines. These products now continue to advance in high strength and high toughness, and we have temper mills and added facilities to process that. Likewise, in the Midwest, our Montpelier facility is well suited there. And in addition to our R&D facility and in -- his group work very diligently with the local ag equipment, construction equipment, people all located in the Midwest on customer projects. And we certainly think we could leverage that as well.

And so the products we've talked about, Zero steel, it's been touched on. We continue to see the demand is real. We have key customers in very key segments such as wind and rail but still very much interested in our ability, short and long term to provide that product. Laser premium is becoming a much more attractive and necessary. It is a very high-growth area with the advances in burning, and cutting, requiring steel performance that's flatter than we've ever made it. Look-wise, they're expecting that performance and that flatness both post-processing and preprocessing as well. And then through our downstream operations as well as campus opportunities, providing OEMs with efficiencies in logistics, in handling and processing that we provide and becoming much more popular on a circularity for scrap for the bigger users that we deal with and how we collect that and return it back to our mills.

So I'll just summarize very quickly from a very strong starting position with market leadership and what we see is the market dynamics for supply demand definitely in the manufacturers or the producers favor. Our cost position certainly protects us in the trough of the market. But we certainly don't see that within the near term and then improving our offering for premium steel and services. And that's it. So thank you, and look forward to your questions.

Thank you, Chuck. So one question before we move forward. How do you see the competitive landscape developing in the North American market? And how do you defend the #1 position?

Well, a lot to be reported on there with expansions and some growth in capacity, but those numbers were all factored into the chart there. And for us, this combination of our customer experience. And I say with the matter of certainty that nobody is making high-quality steel plate at a lower cost than we are. So putting us in an exceptionally strong position for the preferred supplier plate. And so -- we'll probably have more people to the space, and we welcome the competition, but we've -- we're accustomed and very proud of having that #1 position and I think we're well suited to continue.

Thank you, Chuck. So with that, we have walked through the 3 divisions. It's time for the subsidiaries. We will start with Tibnor, which is a key part in our distribution and value-add capability. Happy to introduce Fredrik Haglund, President of Tibnor. Fredrik, the stage is yours.

Thank you very much. And good morning or maybe it's not good morning anymore, it's 20 past 11. So I will go through our current position, our starting point as well as the strategy going forward for higher profitability. Now Tibnor is the leading distributor of steel, metals as well as processing services in the Nordics. We have roughly 10,000 customers. So we're primarily targeting all small and medium-sized customers and companies buying steel and metals. We are in all customer segments. But I will say construction is primarily 40% and the general industry being the majority.

We have 150 employees, and we are close to our customers at roughly 40 locations. If we take into account our sales offices, our local stocks as well as our centralized processing sites. Now we have a strong operational performance. We were 0.0 LTIF rolling 12, so no accidents were lost time. And we have a high and stable delivery accuracy above 95%, very important in steel distribution. Now all in all, we are distributing roughly 800,000 tonnes of steel and metals. That's SEK 12 billion in last year's sales. Roughly half of our volume that's SSAB product and the other half being a full range of external products.

We have a Nordic market share of 23% in steel distribution, but that we are the clear #1. Now we have a leading offering already today. First of all, we have a wide assortment, a full range of product assortment including a debt within the SSAB premium segment as well as other external supplier premium products. Also, we have developed a leading low CO2 assortment across many of our categories. We also have a broad set of processing services. Now every product we are supplying to the market, we also can do processing of usually the first step before it goes into a customer operation.

And thirdly, we are very strong in more customized solutions for more complex OEMs and bigger subcontractors, offering digital integration and just-in-time deliveries into the customers' production site. And as a contrast to that, I would say, we also have the strongest offer for the smallest customers on the local markets where we have established, I would say, a quite unique setup over the last 5 years. And 1 example of that is Handelsstålsgruppen, which I will come back to within short as well. Now as I said, we have built a strong position. Steel Distribution typically is a low-margin business, but a high return on capital employed.

We have a rose 8% at the average over the last 10 years and EBITDA of 4%. We have been outperforming our peers over the last 10 years and especially over the last 2 years. We have been clearly outperforming our peer group. So I will say we have improved our silence as well as a low point profits in the cycle. Now besides the stand-alone value creation, we also offer a significant valuation to the SSAB Group since we are sourcing roughly 400,000 tonnes with a further long margin of a complete portfolio of SSAB products. Now to mention a few of our important structural changes over the years. In 2019, we acquired Sanistål steel-division in Denmark, making us a true Nordic player.

In '21, we created Handelsstålsgruppen as said. We have made 5 smaller acquisitions over the year of local outlets, and we have made 5 greenfields, investing in industry intense attractive areas. We have also done significant cost savings, productivity measures over the years, but also some very key strategic investments in new value add, which has been ramping up very well, and I'll come back to that as well. Now I said, we are having an important role in supporting SSAB on the Nordic core market, roughly 400,000 tonnes of a full assortment of products we delivered to customers, primarily from the Borlange, Raahe and Hembla mill, but also from the Oxelösund facility. The other half of our volume then comes from all other major European mills for non-SSAB products. So we can offer a full range of assortment.

And I would say more than 50% of our customers are buying more than 4 or 5 product categories. So there is a broad -- the customer value of offering a broad portfolio is important. Now we have successfully stagnation over the last, I would say, specifically in the last 5 years. We've been growing our market share roughly 1 percentage point per year, up to 23% last year. And we have a leading market position in all our Nordic markets. We're #1 and #2 in all countries. And if we only consider the internal products, there's a save products, then we are the #1 in all countries. And of course, on a Nordic scale, we are a clear number one.

Now the strategy towards higher profitability will be around growing in our 3 high-value areas, the premium steel products, processing and the local press sales. Now the premium steel products, we have had a strong track record of upgrading into SSAB Europe premium and also our low CO2 assortment. Processing, we have set some very important CapEx in place over the last 2, 3 years, which will drive growth going forward organically. And local presence, as I said, we have established a quite unique setup targeting all the small customers.

Now of course, being a distributor to strengthen the basics is always critical. I will say we have a leading cost position over the years. Also, capital efficiency over time has been fairly strong with a capital turnover above 3%. Pricing excellence, I would say we have been the clear leader in since we have a couple of million of transactions, 20,000 articles, more than 10,000 customers, pricing excellence is key, and we have seen a very good effect on gross margins the last couple of years, thanks to that. Now the 3 high-value areas, premium steel products, processing and local presence is twice as profitable compared to distributing a standard product.

And currently -- or in 2024, they were 45% of our sales. Now already this year, in Q3, we're up to 50%, consisting the high-value areas. And the plan is to continue to shift mix to get to at least 65% in 2030. And this will clearly drive profitability, but also clearly drive our customer offering into more value-add areas. Now let's deep dive into 1 of the areas within high value, the processing and solutions I would say we have a very strong footprint already now. We have 9 sites working on a primarily Nordic basis, offering a full scale of processing. Currently 21% of sales, but targeting 30% by growing organically primarily through the important CapEx already in place.

We are fairly unique, I would say, in the -- service center in Finland, where we can offer components primarily for midsized OEMs for laser cutting, bending, machining and babbling. Also, we have just recently, earlier this year, installed a new production line in Sweden -- for plasma drilling of long products for the construction industry, which has been ramping up very well. And actually, if September was the first month ever that we from that site sold more processing than stock products. And that is 1 of our bigger sites in Sweden.

So we have been seeing a good ramp up of the investments we have done. Now the other area in the high-value local presence. Now this is the local market, fragmented smaller customers. We have more than 5,000 customers within this channel served by roughly 20 local stocks. In Sweden, we have this organized under Handelsstålsgruppen, a separate company, where every company acts under its own brand. So for example, we have Stålshoppen in Örebro in Sweden, which we acquired a couple of years ago. They act on their own local market with our own brand, the old salespeople.

Roughly 50% of the customers are coming to the stock picking up the material themselves, both flat steel and long products. So the flexibility and the customer service to this segment is quite different compared to the midsized OEM or larger subcontractor segments. And obviously, we are creating a quite unique customer value here in the marketplace. And I said, we have done 5 smaller acquisitions over the last 5 years and 5 greenfields in areas where we want to grow and invest in industry intense areas.

We also have a wide offer in Norway and Denmark, particularly for the small customers. In Norway, we acquired a company on the West Coast earlier this year, offering primarily processing for the offshore industry. And we foresee a strong growth outlook primarily organically in this segment going forward. Now I said, continued strength in the basics will still be key for us. We have achieved significant cost improvements over the last 5 years. We expect to keep cost per tonne flat over the coming 5-year period, primarily thanks to digitalization of the value chain.

We are already now on a level of above 35% of all order roads going through -- are different e-commerce channels. But the other side, the capital efficiency and our capital turnover has been on a historical level of 3%, on the low point last year, 2.4% given the market conditions, but we see a clear improvement potential coming back to more normalized historical levels in the coming 1, 2 years. Also, we have done some significant improvements in our Nordic setup of purchasing as well as inventory steering. Now summarizing. I will say we are well positioned for taking the next steps for higher profitability. We are the clear market leader in the Nordics. We have shown a strong growth journey together with SSAB and with other key products, achieving a significant long margin for the group.

We have been achieving clearly better profitability than a peer group, especially in the low cycle, thanks to a strong cost position as well as being the leader in pricing excellence. Also, we have shown good track or in growing several of the high-value areas, for example, the local press cells as well as the premium steel products. And we have seen a very good ramp-up of the processing investments we have done recently. So the targets going forward now is an EBITDA in the short term, currently above 6% and a ROCE of 15% and a long-term EBITDA of 8%. That's all. Thank you.

Thank you, Fredrik. Before moving on, looking at from your customers' perspective, what does this shift to more value-added services and more premium mean?

I mean, primarily subcontractor OEMs can focus more on welding, the core areas of their processing, and we take over the first step of processing. Same way construction, where we can handle a very, very large components, hollow sections, beams and they can focus on assembly and the next steps in those operations.

Great. Thank you. That takes us to the end of this presentation, and it's time to move to the last presentation before the Q&A, and that is the second subsidiary, Ruukki Construction and President of that unit, Sami Eronen. Welcome on stage.

Thank you, Helena. I'm so pleased to introduce Ruukki Construction, the Nordic leader in roofing and building envelopes. Ruukki's vision is realizing future buildings already today. And I think that this picture is also telling the story a little bit. And I hope that this is my 2P plan to have a cottage in Norwegian mountains. Ruukki Construction today. So we are operating locally in 10 European countries where we have the local prisons. So meaning Sweden, Norway, Finland, 3 Baltic countries, Poland, Czech, Slovakia and also Ukraine. Then in addition to these countries, we have also export to other countries based on our factories in core market area.

We have 1,350 professionals working close to our customers every day and 14 specialized factories serving our customer needs on the daily basis. From sales and headcount point of few, biggest countries are Sweden, Finland and Poland, where we have also a majority of our production operations. We are running 2 businesses, namely roofing and building envelopes. Let's come back to those in the next slides. So we are using steel as our raw material and also other metals. We are not a steel producer, but our specialization is producing building products to roof and wall applications to our customers.

On the annual basis, we are serving more than 20,000 customers, big and small customers positively fragmented customer base means that we are not dependent on individual customers in our markets. Two businesses, roofing that is mainly for residential buildings, about 1/3 to new construction, about 2/3 the renovation applications, which is much more stable in these market circumstances. About 60% of our sales is going through different dealers, wholesalers while then remaining part of customers' direct deliveries to installation companies and construction companies.

What we deliver in roofing is roofing profiles, different accessories to deliver a complete solution to our customers. Then another business building envelopes, so meaning how do we cover the building with wall and roof solution, not only steel products, but also insulation solutions. So basically complete proof and wall structures to our customers. This is typically a new construction market, mainly to nonresidential applications and all the products that we manufacture here, we already know that who is the customer, what is the project. So very much make-to-order type of business in this field. Then our distinctive edge, we have 3 building blocks here.

It is very wide product offering so that we have widest product offering to the market in the field of roof and wall solutions. We have service. This is not only about products but very much services that are closely linked to our products and deliveries. And then the third top here is very powerful brands in the construction industry. From the product range point of view, high-quality raw materials, premium products and then also a very strong sustainability agenda as the market leader in the sustainability development.

When it comes to services, we want to offer to our customer a good digital experience, tracking the order to delivery performance but not only to buying customers, what is very important that we are active in the presales phase, working closely with architects, working closely with structural designers, making day life also easier with our design tools and solutions and technical support. In Construction business, we want to be also very close to our customers and the construction sites so that we have good logistics solutions. We have outlets covering our market areas and close to our customers.

We are running powerful brands, main brand Ruukki, but also Plan in the Scandinavian roofing market and what we are building on our brands is partner programs together with our customers, both increasing sales, increasing business size, but also building loyalty together with our customers. Shortly about our journey so far. So when we started this journey, we were the company having different kind of businesses in different geographies, not so much common nominators. Today, we are much more focused. We are a much more prioritized company focusing on roofing and building envelope business product businesses serving our customers.

We said at the beginning that we have 3 phases in our strategy. The first one, fixing the structure. So we divested it big part of our business in Russia in Building Systems, where we were operating product business, and we said that we want to be a product business player that we did successfully. In the second phase, focusing on the core, how we are able to create growth and higher profitability in our core businesses. We were delivering very solid performance in profitability, targeted EBITDA 10% 2019 until '22 when we saw a major slowdown in construction market.

This focus on the core phase was also supported by complementary acquisitions in geography, in product offering to have more premium offering, more complete solutions so five acquisitions completed in Nordic countries. And now we have been adjusting our operation, our cost structure, to slowdown in the construction market, which has basically come down about 40% in the Nordic main business is what we have been doing. Our decrease has been less than the construction market decrease. And we are not on the targeted profitability level, but we have adjusted and we are ready for the next phase, which is growth and especially market growth, no matter what is the market situation.

So how we make this growth to happen until 2030? And starting what is Ruukki's position as a part of SSAB Group. So we had 2 roles as we have heard already today earlier, starting from the so-called blue box. So we are consuming about 40% of color-coated output that SSAB Europe is delivering on the annual basis to the market. So this is important channel to market, but also building premium offering premium market in color coated and going forward to construction products. Then what is becoming even more important in so-called red box here that how we create additional value on the top of the market price steel raw material that we are using.

We have constantly been building our offering so that we have more value added. We have more differentiated portfolio. We have been doing that successfully. And in the next phase, we are able to speed up that even more. Then how the market looks at the moment. So we are very much in the bottom of the construction market cycle, which is, I would say, positive for the next steps. We have been doing our homework and we estimate that during the strategy period market is also going to support us in a positive way. If we take average estimates at the moment in residential, nonresidential business where we are operating, it's about 4% annual growth that is estimated for the coming years.

We have seen that this growth is more positive on the Central Eastern European market, but also Nordic, we expect to have a good outlook for the coming years. Then market outlook is also supported by structural changes in the construction market that we see more strict regulation from the authorities point of view, targeting to net 0 buildings. What is very important is also the life cycle efficiency in construction, meaning that energy efficiency is becoming even a bigger topic going forward. Then automate growth happen profitable growth through premium product offering, which is strongly the product focus. But then what is very important to us is also driving the higher share of wallet development at our customer base.

As I said earlier that we have about 20,000 customers annually, and they are doing roof, they are doing walls, and we want to make even wider portfolio and having higher share of wallet at our customers. So accelerating premium product development in all markets. Today, those are representing about EUR 100 million of total EUR 500 million net sales, what we have by the end of the strategy period, we believe that we are able to double this by developing our premium offering and then increasing the share of wallet. And still in these 10 countries where we're operating, we see good possibility for growth going forward with the existing portfolio, but also new development in R&D. And then we are opening also new markets outside of current home territory with the focus of premium product offering.

What kind of products then we do in practice? This is 1 example. This is a residential example from the roofing side and our history has been very strong in delivering roofing profiles made of steel covering the roof. During the past years, what we have been doing much more is to increase our so-called accessory part, adding comprehensive offering on rainwater systems on roof safety products, complete flashing packages, leadings and so on and so on. latest acquisition, what we have done in Sweden is a company called Designtak that is delivering ready-made entrance roofs to different kind of buildings.

This is the product view when the project takes place. But what is very important that about 60% to 70% of the life cycle emissions are generated during the life cycle of the building. And what we bring here resident application example here is solar PV solutions, that will generate energy to house owners. On building envelope side, we are able to have energy-efficient airtight envelopes, supported by solar solutions as also. So that is supporting the life cycle efficiency of the investor and the house owner.

As I said, that this business is not only about products, but we are very close to our customers. We want to deliver to them instant availability with higher -- with the premium portfolio. One example is 15 Ruukki outlets that we are running in 5 different countries. This portfolio, what is available every day here, it is very much focused on the premium portfolio and supported by customer service, technical applications, technical support to our customers. This is very much about on-site physical services. Then what we are doing also is that we constantly develop our digital channels we are generating, based on our very strong brands, more than 10,000 leads on the annual basis. And what we have recently established a so-called certified installation partner network, where we have roofing installers, companies that are partnering with us.

We are generating leads in the digital format and guiding this leads to our customers so that they are able to close ready installed roof deals with the consumer or professional customers. So this is obviously driving growth in the business, but what is very important also that it is driving loyalty with our customers. So we are able to steer leads to customers that are able to close deals with their clients and being loyal to us having a high share of wallet at the product side. From the production operations point of view, we have been investing during the past years. We can say that about EUR 50 million strategic investments on top of our regular R&C investment frame.

And all of these investments are to support occupational safety work on our side, our employees, but it is very much also about the premium portfolio expansion and also unit cost efficiency, so keeping basics in order. Couple of examples, our roofing factory in Finland, our roof safety factory, latest -- one of the latest acquisitions company called Piristeel expanding portfolio mainly to Scandinavia market and then our Sandwich manufactory in Sweden, that is in the commercialization phase at the moment, serving customers close to our markets, in Scandinavia going forward.

Then summarizing that what is our strategy in a nutshell. We say sustainable growth together with customers. We want to make this company even more customer focused. We have a growth strategy, and we strongly believe that sustainability is playing important role going forward. Two strategic objectives here, growth we are targeting EUR 700 million net sales by 2030 by widening our offering to premium to more complete geography growing in existing home market exporting more outside of this one. And then sales channel development, especially on roofing side, where we have about 60% through dealers, we want to have even higher share of direct sales going forward.

In Ruukki Construction, we have been driving a very decentralized model, having local accountability in our units that we will continue, but at the same time, we want to reach more scalability through more standard-sized processes and business models going to market. And at the end of the day, over the cycle, EBITDA target is 10% in this business. Final picture here. One example of our sustainability, low-carbon offering development. This is the first building ever built in the world based on fossil-free steel material, together with our customer -- investor field, we delivered roof and wall structures to industrial facility about 6,000 square meters in London in Sweden.

And this is giving a good example that having fossil-free portfolio. We are able to reduce 50% of emissions in the building envelope. That is when the construction process is ongoing. But then even more important that during the life cycle of the building with these solutions, we are able to reduce energy consumption by 30%. So very successful project and good cooperation together with our customers and also together with designers. So our customer promise is building your or that is for our customers, but also to other stakeholders in construction business and in SSAB. Thank you.

Thank you, Sami. So before we break for some lunch, let's bring back the divisions, heads and Fredrik up on stage for a short Q&A. Chunk, Tony, Per -- Tony and Per will get a microphone to share here because you're not miked up. And let's see if we have any questions to any of our speakers and we -- yes, if you move with the microphone first. And then we'll move to this side of the room.

Tristan Gresser from BNP Paribas Exanes. It's a question for Per. In the last Capital Market Day three years ago, you were targeting 2.2 million tonnes of shipments by 2030. If I apply the 5% volume growth you expect per year, you're going to get to 1.6 million tonnes by 2030. So what has changed over the past three years? Why on the volume side, you're a bit more cautious? And it seems the market has been growing. So how tough competition has been in Asia? Which is where I think you can maybe at last share. And yes, if the product is so good, why is it so hard in Asia? And do you have a risk of seeing Asian competitors moving into market in North America and Europe?

If you look at the past few years, it's been a quite rough market altogether. I mean, we have a lot of conflicts and stuff like that, then we have been forced to move out, of course, from Russia and so forth and that draw with it a lot of sales in Europe and so on. If we look at the competition or the competing situation in Asia that you asked about, yes, it is increasing. And that's why it's so important for us now to make sure that we continue to grow on the heart of 500 turf and the grades where we are unique because these grades are not available from any other competitor.

Yes, we have more questions on this side of the room. So let's... Yes.

Johannes [indiscernible] Markets. I have a question also for Per, and that's about your relative new products, the 3D printing material. I mean can you -- I mean what kind of volumes are we talking about and your base for now? I mean that must be very low? And can you maybe also touch upon necessary CapEx to sort of getting this into a more meaningful volume product?

If we look at the volumes today, it's on the research scale that we do here. You will actually see that facility later on today when you do the tour here. So it's on research scale. And when it comes to this, we talk about tonnes, not kilotons. That's sort of the level of volumes.

If we go forward, yes, we will increase the production. But the good thing with this is that you can take it shaft by shaft, you don't have to go for a wide variety and take all the volumes at one time. So you can build one shaft at a time like the ones you will see today are a little bit bigger. Exactly where it's going to end and how much capital we intend to spend on that.

We don't know yet because it's a start-up from the time being, and we will take it piece by piece. But we're 100% sure that this is something that will grow going forward. But the pace is hard to say at this moment in time. But piece by piece, we will get there.

Great. We had more questions. Yes, a lot of questions on this side. So let's take a couple more.

Anders Akerblom from Nordea. A question to Chuck. If we start on U.S. exports from Europe. Could you please remind us how large of a share that could be subject to sort of evolving tariff regimes, particularly for automotive, high strength steel?

Just to clarify, you're talking about exports from Europe to the U.S. in terms of total volumes for -- to be tariffed?

Potentially, yes.

Yes. It's probably more for Tony on automotive. Yes.

So we're talking about the division of SSAB Europe not in the continent of SSAB Europe?

Yes.

Okay. For us, it's around about between advanced high-strength steels that we supply into the automotive industry, purely in the U.S., not in North America. And then some of the hot rolled product that we supply from typically from Borlange, it's something less than 200,000 tonnes in total.

Adrian Gilani at ABG. A question for Tony as well. On the European steel safeguards, I mean I agree that's a very positive long-term for the market. But given that it's going to be implemented mid-2026, do you see any risks that distributors might sort of stock up on as much cheap Asian steel as they can between now and the implementation date?

Yes. Just to put some color on it now, I had a question in the break very similar. But there are -- it's like a 2-step -- a 2-step change to the sort of trade policy. The first one is CBAM. That comes on January 1 come what may. And it's not necessarily the absolute number that causes the problem. It's the uncertainty that causes the problem. So there's been a reluctance during quarter 4 to specify too much for quarter 1 already. And then because of the uncertainty around the application date for safeguarding, there's a reluctance now to buy further forward from importers in the first half of next year. So whilst I don't see a big bang impact, what I can say is that I expect fewer imports to come in, in the first half of 2026 that came in the first half of 2025 even if safeguards do not get applied until the first of July when the existing Safeguard rules come to an end.

All right. Christian Kopfer from Handelsbanken for Chuck. You've been in the industry for quite a while. And given that experience that you have with -- and all the latest development on tariffs, what's going on in the market with the competition and so on and so forth. Where do you think we are in the cycle right now in the Americas? We're close to trough? Or how do you see it developing into 2026?

Yes, I see the up-cycle for sure. It -- again, talking about the past administration, the current administration, quite serious about manufacturing investments and although on the energy scale that may have changed a bit. But we've already started or they've already started a pretty significant investment cycle. So I think the prospects are pretty good. I think for a good reason, capacity has been expanded in the U.S., both in the strip as we're seeing is plate. But if you look at the utilization rates for particularly our mills and mills in plate, it is it stands to grow. So I think, for sure, over the next 5-year period as these policies some of which have already kicked in, as I've described, our Bridge business and in others as well. The shipbuilding is attracting a lot of attention. There's just so many markets, and I didn't go into details if barge building a huge plate consumer is in the trough of its cycle. But replacements now, it's -- you just simply do the math right now. This replacement cycle is starting to come out of the trough. It won't be far, you have rail in the same position. So all of these are very heavy on plate. So I see it quite positive.

Thanks. And if I have -- can I have one question for Per as well. If you can -- if you compare the special steels market which you have in Americas and to the market that we have in Europe, is it a big difference on capacity utilization and end market demand? How you see it in -- developing into next year?

I think that -- I mean if you look in the past now, Americas has been better than Europe, but Europe is picking up, right, quite fast right now. So I think the pickup in Europe will be higher than Americas for us for the next year because we're coming from a lower level.

We take one more question. Yes.

Bastian Synagowitz from Deutsche Bank. I've got one for Per as well actually or two. So just on your volume capability, I guess you already did close to 1.5 million tonnes, but I guess you're also contributing a lot of the growth ambitions to SSAB so in the current setup and before investing, what is your actual volume capability before you really have to deeper bottleneck further. I guess that depends a lot on the product mix and you're selling. But I would say like at a desirable mix, how much volume can you actually do. It's the first one.

It's a good question. I mean if we look at the rolling capacity, we have a lot of capacity. We are operating the mill in Mobile, where we supply a lot to the Americas division as well. And now we are increasing the capacity in those mills with tamping and so forth. And that's, of course, to open up bottlenecks and also make sure that we can supply a more premium mix because the more the premium plate is the more production capacity it takes simply put, right? But when you look at the total capacity, we also have the strip mills in Borlange. So at the end of the day, I mean, I'm not going to say we have unlimited capacity. But if we grow across the full portfolio when it comes to strip and [ paid ] and so forth, we have a big potential and a lot of capacity.

Okay. So basically, it's more the market rather than your capacity layout at the moment, which is constraining you in that sense. Can you produce all grades with material, which comes from the mobile mill?

We can produce -- what simply put, today, we haven't developed all the grades out of the mobile plant because I mean we supply certain markets from mobile. And if the need hasn't been big enough for certain products on these markets, we have chosen to do it in [indiscernible] soon in order to have like a larger scale potential. Now tariff comes and all that, then we develop really fast to put more plates into mobile, so we can produce them locally. And we can produce pretty much everything. We have started to produce even protection plates in Mobile now, which is the toughest and most difficult grades we have.

Okay. And then lastly, on pricing. I guess you said that there is an opportunity to improve pricing if the cycle improves. I guess, especially there used to be very much a case where you really I guess, improved your margins via selling a solution to your customer and then capitalizing that. So hence, do you see further margin uplift potential as well from the new products you bring to the market?

Yes. I think the more we sell what we say, the products where you -- where we have the highest customer value, for sure, there is an improvement to increase. Because by the end of the day, we sell the solution, the 3x longer lifetime or the uptime or the payload [ one tonne ] and so forth. So yes, there is potential to do that for sure. And that's why we want to go into that area even further, of course.

Okay. Let's end this Q&A session here. We are ready for -- we have come up to the next agenda item, which is lunch. And lunch is served in the next [ ship ] here on the left-hand side. We will take a 45-minute break. That means that since we're rescheduling the agenda, we will be back again at 12:50 for those of you on the webcast and for those of you in the room, see you soon.

[Break]

So our next speaker is CTO and Head of Transformation Office, Carl Orrling. Carl has been with the company since 2003 and in this role since earlier this year.

Carl the stage is yours.

Thank you. So as Helena said, I'm Carl Orrling. And as of April 1, the new CEO of SSAB. In my presentation, I will cover how technology will transform SSAB. So in the steel industry, we have over the decades, seen how technology has driven improved productivity. It has driven lower cost and also allowed us to new steel grades. And we can take one example is that oxygen steelmaking in the 1960s, starting to replace the old [indiscernible] furnaces. They took steelmaking processing time down from 3 hours to 18 minutes or continuous casting that replaced the old ingot casting, improving yield from 80% to 95%.

At SSAB throughout our history, we are no stranger to transforming our operations by new technology. 50 years ago, this site was operating old [indiscernible] furnaces and ingot casting. And if we hadn't changed technology back then in 1970s and 1980s, I would assure you this mill would have been a museum today.

What we're seeing now in technology, development of the steel industry is big electric arc furnace mills reaching over 3.5 million tonnes, combined with sponge iron replacing old fossil-based blast furnace and coal plant mills.

At SSAB, we're now doing a significant technology and transformation development with the two projects. Here in [indiscernible], we're investing in a new electric arc furnace that will start up commercial production in 2027. And then as the movie showed, we're building a new mill in [indiscernible]. [indiscernible] conversion will give SSAB new capability and increase flexibility. What we're doing here is -- and you can see it in the background, we're closing down the world's oldest coking plant from 1952. We're closing down two, small from an economy of scale, inefficient blast furnaces, and we're replacing that with an electric arc furnace and we're also investing in a modern infrastructure.

What you can also see in this picture is the harbor. This harbor has the deepest part on the Baltic Sea. It's an excellent location to bring in raw materials, excellent location to bring out finished products. That's an advantage that SSAB has. What we will be able to do with this new electric arc furnace is to start already in 2027 produce SSAB zero. And as Johnny and also Tony has alluded to, that will come with a premium pricing. We will have a flexible steel production. We can virtually regulate steel production from, I would say, -- we say 1 million tonnes here. But I'm sure even with one shift per day, we could go down to 0.5 million tonnes up to 1.5 million tonnes. That will allow us to actually meet market demand and volume requirements in a much better way with the current system.

And then, of course, we can optimize the overall Nordic production system. We will have for the midterm period from 2027, we will have a base between coal, iron ore, electricity and scrap, and that will allow us then. And then as a result of this technology, we will eliminate 1.5 million tonnes of CO2 emission, which is equivalent to 3% of Swedish national emission levels.

There's a lot of talk, can you make advanced steel grades of electric arc furnace? Actually, that's been a talk of this industry since the first electric arc furnace was put in operations. We at SSAB, we have a strategic advantage by having already two electric arc furnace mills with close now to three years of decades of experience. And we have also integrated the U.S. operation into our specialty business. And we have already today proven that we can commercially supply Hardox 500 Tuf, Hardox [indiscernible], Hardox grade strength and also automotive grade Docol 1500M through the electric arc furnace based on slabs or production in the U.S. And actually, Docol 1500M produced by slabs from the U.S., we have already supplied that to our customers in Germany for the automotive industry.

Also, we are working closely between our teams. We also have an advantage. We are -- we have grown a lot as a company, but we're still a small company where it's easy to collaborate. And we have sent operators from Sweden here in [indiscernible] to our facility in Mobile, learning how to operate an electric arc furnace. And we have had several experienced senior members of the U.S. operations to be part of the transformation project helping us setting the specification, making us set the right design requirements when we work with equipment suppliers.

Moving on to the Lulea minimill. This mill is an end-to-end solution filled with new advanced technology. Starting out with a highly efficient digital electric arc furnace, powerful secondary metallurgy, a high productivity caster, direct rolling, reducing electrical -- or sorry, energy consumption in the [indiscernible] mill by 75% and then a whole new coal mill complex designed only for advanced high-strength steel grades.

Also in Lulea, you can see we are very close to the hardware, and it will be 900 meters from the dock to the melt shop for bringing the scrap. And it will be roughly 1,100 meters from our dispatch down to the harbor, where we will have the [ coil hotel ]. No other site, I dare you, no other site in Europe has this infrastructure in place, and this will have some of the highest material turnover rates of all existing steel plants. This mill in 1.5 kilometer length will be able to produce 2.5 million tonnes of advanced high-strength steels in less than three hours. And of course, being on an existing site, we already have the infrastructure. We have a railway connection. We have a highway. And most important, we have a skilled workforce already in place that can go and they can transfer to this new operation.

Just want to show some of the technology highlights. We will have the most advanced electric arc furnace in the world. This furnace combines digital energy control with continuous scrap reheating and a fully automated operations. We call it no man on the floor. What will this give us? It will give us 10% less electricity consumption than conventional electric arc furnaces, less emission and improved steel quality. That means both lower cost than competitors, but also improved -- supporting our strategy to be advanced. And to give you a bit more flavor of this furnace, we have a short movie that will give you more insight to how this furnace will operate.

[Presentation]

I hope some of you recognize the tune. Our supplier, Daniel has also already provided us with a frequency for the Swedish National Anthem, but we'll save that for the inauguration of the new mill.

Another key component of the Lulea minimill which makes up a substantial part of the business case as the new advanced coal mill complex. This mill -- this part of the mill will feature first of its kind processing lines. They will be fully electrical heating. They are tailor-made for advanced high-strength steels and it will have a flexibility in coatings. We will actually be able to do three different types of coatings in this facility, and we have a combination of annealing and coating capacity.

What does this do in terms of benefits? Well, 15% less energy consumption compared to a natural gas operated furnace. It will also allow us to do product capabilities for the future and current. For example, in this facility, we will be able to make third-generation advanced high strength steel that is outside current capability. But also, we will be able to do press hardening steels and also exposed panels that SSAB is today unable to do. And because of the flexibility of this facility, we can switch between coatings and steel qualities depending on customer demands or on market cycle.

And to give you a bit more, we have a brand-new movie regarding the coal mill complex. So let's please go.

[Presentation]

So these two projects are progressing according to plan. You will today see the new electric arc furnace building going up. It's by -- with my experience of the steel industry, I've never seen a construction program or project proceeding as well as the one we are doing here in Lulea. And one of the things we've done to derisk our project is that we have spent, I would say, the last 8 years in close dialogue with the machine suppliers, refining the technical specifications.

And just to give you an example, I mean, the contract we have with [indiscernible] includes 165 individual documents on technical specifications, where buying equipment and contracts from well-established suppliers. We have [indiscernible] from Italy, German SMS. They are the best of what they do in this industry. We have also well-established contractors. We are working with [indiscernible], both here in [indiscernible] and also in Lulea. And in Lulea, we're also working with [indiscernible] that are, I would say, recognized as big construction company in Nordic. And then we have ABB for the electrical distribution.

We have today already signed the majority of all the equipment contracts at fixed cost and also with very strong performance guarantees and also in the CapEx that we have presented. We have a healthy contingency. But maybe the most important thing to derisk this project is the SSAB experience. We operate today electric arc furnace in the U.S. We have hot strip mills in [indiscernible] and Borlange with a lot of trained operators, and we have coal mill complex in [indiscernible] and Borlange. And all of these resources, they are part of the project team working today as we speak on making this happen.

And then compared to others, we don't need to invest in core infrastructure. We already have that in place. It's a proven chain. It's a proven, I would say, logistical solutions that we have in place. Of course, switching from one technology to another technology, in this case, from blast furnaces to electric arc furnaces means also switching raw material supply. So we will be going from coal and iron ore to scrap virgin iron and then, of course, electricity for the energy.

And we have multiple options that we are using now to secure our raw material needs. So today, we have internally falling scrap from both SSAB direct operations, but also from our subsidiary. And today, we actually sell a substantial part of this scrap to external customers. This we can in-source. We have also signed a strategic partnership, for example, with Volvo Cars, the biggest deal processor in Sweden for take-back agreements. So whatever they will sort of trim off from the coils, we will get back in our operations. And we also have a partnership with examples [indiscernible] recycling for post-consumer scraps and then we can access the spot market. Spot market in Europe is roughly 17 million tonnes, and we estimate that we need roughly between 5% to 6% of that spot market for our needs, which means that given, I would say, now the postponement of electric arc furnace in products in Europe, there's good availability for the midterm and long term when it comes to scrap.

But long term, we also need virgin iron units. Our main partner for this is, of course, LKAB. We have been tied together with LKAB for decades the supply chain, [indiscernible] is a strong one. It's a foundation of Swedish industry. But also, we can also -- in the midterm, we can utilize excess pig iron capacity from [indiscernible] for the Lulea and the [indiscernible] operation. Pig iron is an excellent feedstock for the electric arc furnaces.

And then, of course, there's a growing external HPI market. You can buy sponge iron on the external market, and there's quite a lot of seaborne capacity available to us. And then also, we're also pursuing some other options when it comes to direct reduction projects initiative over the world.

To conclude, the transformation is a key for our business strategy. We will be able to do more advanced steel grades. We will have volume growth that has now -- we don't have that opportunity. We will also have decarbonized steel meeting both, I would say, regulations but also customer demand. We will have substantial operational and financial benefits. The projects are proceeding according to plan. We can build on our extensive experience that we have today. And with the future setup, we will lower our fixed cost proportion by 50%. That means we can reduce or increase production without substantial increase to the fixed cost. And we will also have very flexible raw material sourcing for both [indiscernible] and Lulea.

But technology is only one side of the coin. The other side of the coin is operator. And to quote Maverick from the very famous movie Top Gun, "It's not about the plane, it's about the pilot". And we at SSAB, we are the best pilots in the steel industry.

Thank you, Carl. I was going to ask you a question, but nothing can top Top Gun. So we'll take it with the Q&A together with the rest of the group.

Thank you for sharing that presentation. We have -- it's starting -- we're coming towards the end, and it's time to start to sum this up and tie it all together. And first out to do that is our CFO, Leena Craelius. Leena has been with the company since 2005 in various finance roles in SSAB and [indiscernible] and as part of the Executive Committee since 2021.

Leena the floor is yours.

Thank you, Helena. Such a privilege to be here, and so nice to see so many familiar faces in the audience. It's so nice to be here at site. Soon, you will get to see EAF project in action. And yes, it's been a cold day, but soon, you will get some motion.

Good. I will talk about financials for obvious reasons. In my presentation, I will reflect a bit backwards, a few years back, how we have performed when it comes to our financial targets. Then we will do a short analysis over-the-cycle profitability performance we have today. Then I will do a short recap of the presentations you've heard today. all the division heads, Johnny, Carl, Fredrik and Sami presenting their strategy because that's the content. I will go through the figures but the content behind the figures is what you have heard today, the ambitious targets with the premium products and so forth. So I will consolidate that. And then we will have a look how we have performed, I think [indiscernible] you promised, I will show how much we have invested in strategic investments in the past. And then might be interesting to also see what this journey we have ahead of us means going forward, CapEx wise. So I will present that. Then we will simulate the cash flow how much money does it need? And I will walk you through that. And perhaps the sort of the -- the most interesting and important part of my presentation is that how we quantify and calculate the benefits on a group level after all these strategic investments have been finalized. Let's start.

Reflecting backwards. This is something [indiscernible] already touched upon earlier today. These are our financial targets. If we start from the profitability target, which we measure EBITDA margin compared to our peers, the list of peer group is at the bottom of the slide. So fairly solid previous 4 years. We've been #2. And of course, the goal remains to be #1. No doubt about that. Each and every division was hinting to that direction. That is the goal.

Capital structure, which we define as the plus/minus 20% net gearing. We became net debt free at the end of '21, and we have been net debt-free ever since. Good cash position and good starting point -- strong starting point for these investments. And of course, we just -- we target to sustain the rating that we have, BBB-. That's also important for us.

And then the dividend, 40% of the net profit we have been delivering. The two years in between due to COVID, those were canceled, but we have been delivering 40% of the dividend to our shareholders.

Then we have showed analysis of our EBITDA margin performance over the cycle. Just a quick walk through how we have done this. We have summarized years 2016 up until '24, which is pretty much the slide of the time period that was illustrated in the previous slide. We take the nominal average. We are on a level of 13%. Then we are adjusting with real values, '25, we add EUR 1.7 billion. And you have seen that the journey to grow in the premium mix. It has been steady, growing trend. And then we do a simulation with this structural change, we add EUR 1 billion. Currently, we are on a level of [ 55 ] when it comes to premium mix. And then as it says here, exceptional years, we have moderated a bit. We have taken a bit downwards the exceptional years that we had '21 and '23. So we subtract [ 1.7 ]. We land on a level of [ 14 ]. So that's a starting point.

But let's do the short recap. This you have also seen before. And I think one thing to remember from this day is that in the core of our strategy, is truly the accelerating premium leadership goal. Three focus areas. If we quantify volume value-wise, the box on the top advanced steel grades each and every division and subsidiaries, they've been talking about, and of course, now Carl also pointing out that all the investments are targeting to grow here, enabling us to grow even further. Par was telling about the 5% growth ambition annually. Tony was talking about the automotive premium growth still to continue upgrading every division have actions and activities around this program. value-add services and solutions, fascinating new innovations that will grow in future and then the decarbonized steel. And I think like [indiscernible] pointed out and then Carl that we will now increase our capability to grow the premium product portfolio. The investment is supporting to grow in that volume wise.

Now what have we spent in strategic investments in the past? Since 2015, which is right after the merger of Ruuki and SSAB, it has been fairly modest. It looks rather modest, doesn't it. Maybe to point out to 2019, we were investing in Q&T capacity in [indiscernible] Mobile with the ambition, of course, to grow the premium products and drive the special steel division strategy in U.S. And then '22, we started the [indiscernible] prephase and then [indiscernible] continued end of '23 and '24 and also this year. The EAF conversion phase of the project. Here, you can also see that the Lulea mini mill project, the planned CapEx for this year, EUR 4.5 billion. So we are picking up the pace. And then I will show you how does it look going forward.

But before I go there, just to point out that there has been this small portion, smaller portion of investments in Q&T capacity and value-add services, so that we continue to do also going forward. And this is how it looks like. Already mentioned [indiscernible] conversion to continue. And here, we have a cash out plan. We will continue to spend in [indiscernible] conversion '26, '27 and some portion will be also impacting '28. Lulea mini mill picking up, peaking '27, all the way up until 2030. This is the planned cash out for these investment projects. And as mentioned, this other premium expansion investments. Some of these already approved, planned, but some still to be approved by the Board.

We have done a lot of simulations, scenarios and planning. And all of these, including this plan, which we think that is the most realistic one at the moment, they do fit into our net gearing frame. And in all scenarios, we have also included the dividend for each and every year.

Let's then continue to look at the cash plan. What does it mean? As already mentioned, the starting point is very strong. Q3 net cash position was EUR 10.8 billion. And then we have modeled the cash flow. And here we are including years '25 up until 2030. We are taking over the cycle EBITDA performance, but we have moderated that. We have taken into account the consensus and also our own view and expectations. Then, as already mentioned here, we will continue R&C investments. Those will continue, so we need to take that into account. And then we subtracted tax around 20%. Then we have included the dividend payout.

And maybe just to sort of point out that the share buyback option. Ideally, we have that also going forward in our toolbox. We do have the mandate at the moment, and of course, depending on the AGM and the Board eventually. If it comes to that, we do have that option as well. But here, I have kept it neutral because we don't have a share buyback program actively ongoing at the moment.

If we summarize these columns together, we are on a level of EUR 50 billion. And if I now consolidate all the strategic plans presented today, including investment need, then we have a figure EUR 58 billion as a total. So that is the planned strategic CapEx for '26 up until '30. So based on these figures, of course, these are subject to changes, but it looks like that we can well afford it. But even more so, we have secured the Lulea financing. And even here in this room, we have many people who have been involved in arranging this fantastic financing package which is allowing us to have a smooth project implementation.

Export credit agencies, they have been giving us guarantees, [indiscernible] we have Nordic Investment Bank loaning us and the majority of our partnership banks are involved in this financing package. And the fantastic thing is that we use it when we need it. So it is also flexible.

If we then have a look at the targeted performance, profitability performance over-the-cycle target that we are trying to reach with all these investments. Starting point is the over-the-cycle performance today that we illustrated. And then we add up all the division actions when it comes to increase the premium products, advanced high-strength steels, upgrading the steel grades. We summarize Par, Tony, Chuck, and then we take subsidiaries even because everyone has a plan to support this. We sum it up, it sums up to SEK 5 billion, SEK 5 billion improvement.

You have been hearing about the value-added services and growth in subsidiaries. When those plans have been implemented, we add another SEK 1 billion. As a finance person, I want to be rather conservative. So I have kept my premium pricing premium modest. So here, I have only SEK 0.5 billion, SEK 1.5 billion, but the potential is here, like [ Jon ] was stating in his presentation. It could be higher, but we keep it modest because eventually, it might start to fade away, but it is still there. And very important thing that Carl was pointing out, the cost structure change that we will do. And majority of this SEK 2 billion saving is linked to the Lulea minimal transformation.

We will have a logistics setup, which is much more optimal, less fixed costs, as Carl mentioned, we have included here, of course, simulation of raw material base, energy and also some part -- small part of the CO2 emission. All these activities, strategic investments finalized, implemented, we will reach over-the-cycle EBITDA performance level of 23. So from relative terms, 14% up until 16%. So that will be our goal going forward.

Let us do a short recap the financial targets unchanged. As the header says, we do not see a need to change these. These are really well supporting our journey going forward. We still want to have the #1 position compared to our peers. That's important to us. So we are striving towards that. The net gearing, as I said, that we have done a lot of simulations, scenarios. We can fit it well within this frame, plus/minus 20%. So we don't see a need to change that either. And of course, we still commit to the dividend target, 40% of net profit to our shareholders. I promised to reflect a bit backwards our financial performance against our financial targets. Then we had a look at the over-the-cycle profitability performance. And then we did a short recap of the strategy that you have been hearing today. What does it mean CapEx-wise? Can we afford it? What -- how much cash do we need to have? And then what is actually the outcome in profitability after all these investments have been finalized.

So with that, I guess, we are open for questions.

Yes, exactly. So thank you, Leena. So now let's bring back on and also call on stage for a final Q&A. [Operator Instructions].

Kaleb Solomon from SEB. On the SEK 2 billion of cost savings you just went through, how much of that is sort of only reduction of fixed cost versus the cost avoidance of carbon allowances? And kind of as a follow-up to that, can you give some color on what assumptions you're making on how much will be covered by free allowances, the first 5 to 10 years? And what kind of price you're assuming for the carbon allowances?

From the cost saving point of view, majority is related to fixed costs. So it's a very small portion. We have been very conservative in our valuation of cost savings when it comes to CO2. So majority of that is related to fixed cost savings.

Alain Gabriel at Morgan Stanley. For your production -- future production at Oxelosund and Lulea, what percentage of your cost base would be energy, such as electricity and natural gas? And I guess, electricity would be quite an important component. What's your purchasing strategy there? Is it fixed cost BPAs? Or and how much would that lead into in terms of advantage over the Continental European competitors?

What am I about to say? Okay. Well, first of all, we can say we will buy very little natural gas. Just to give you a perspective that we will have capacity of 70 tonnes of storage for natural gas at the Lulea facility. And currently, if I compare it to what we have at dry, we have 600 tonnes. So it's -- natural gas is, I would say, minor cost. Electricity will make up with the modeling we've done on future electricity prices in Northern Sweden, roughly 7% of the total cost of goods. And the strategy, I think it will be a combination of, I would say, spot market, but also long-term contract and probably some hedging as well.

[indiscernible] to DNB Carnegie. Can you just give us some sort of rough number what -- how we should think about maintenance CapEx going forward?

It has been on a level of SEK 3 billion per year. And of course, eventually, it will start to go a bit lower downwards. But I would say in the next coming years, you could estimate to be just below SEK 3 billion.

[indiscernible]. Just one question for Leena. In the bridge with the model free cash flow for the coming 5 years. Is that just based on the current mid-cycle? Or do you assume any improvements before the [indiscernible] plant is operational as well?

In the cash flow generation, of course, we have been using over the cycle EBITDA performance, but we have adjusted it a bit downwards for next few years, taking into consideration the consensus view for the performance. But that's sort of the starting point and the basis for the analysis.

Yes, let's take [indiscernible]. Then we'll move to the side.

Anders Akerblom from Nordea again. So I was wondering a bit about your strategy for sort of securing high-quality scrap in the future. And you mentioned before good availability of scrap internally. Could you quantify perhaps a bit how large of your potential future demand is covered by that? And also sort of how you view the ability to transfer potential price increases in the scrap market to customers to sort of negate steel spread margin compression over time.

So we see a need for roughly 35% of, if I call it, higher quality scrap for the overall mix and it has to do with the residual levels in copper. That translates roughly to 300,000 maybe roughly 1.3 million tonnes, and we have today, I would say, secured at least 600,000 tonne of that.

Tristan from BNP Paribas Exane. In the presentation, you mentioned you expect more support to come from the Seal action plan, not the CBA or the safeguards, but other measures. What could it be? We've seen some funding coming through. Do you expect maybe more subsidies that are possible on the energy side of the equation? Any sort of support? And if you could share your view also on the allocation -- free reallocation of treatment, if you export outside the European market, if you could get something there as well.

Just to answer your first question, I don't think it's likely that it will push more subsidies into this direction or to energy production as what we've seen so far. But there are a lot of support coming from the European Union. When we speak about preferred markets. That's an initiative that they are now putting together where they are encouraged or forced municipalities and governments to actually buy fossil free or low CO2 emission steel. It's very likely that is going to go through. So that's what we call preferred markets. That's something we really, really support. I mean this EU fit for 55 initiative is for real. And the European Union is doing everything they can to support the industry in Europe to do this transformation and a physician.

We know for a fact that the Central Europe doesn't really have the infrastructure to do this transformation in a cost-efficient way for the time being. Hence, the reason why a lot of them are postponing their initiatives. I think that gives us a clear opportunity for the future. But having said that, to your second question, what do you think is going to happen to the ETS and the 3 year allocations. This is just on -- based on speculations. When -- and I go to Brussels quite a lot and a lot of the commissions that I meet, they are saying that we will defend this system that we have by any means. And then we have a few others who are saying that this is hurting the Central European industry. We need more time. So it's really hard to say, no matter what we have done a lot of simulations on what kind of impact that's going to have on SSAB. It's going to have very little impact on us. we have been very cautious and moderate in our models going forward. So we feel quite comfortable. And if there will be any change, I think that the only thing they would do is for extend it from for the 35 to 40 or something like that, but that's just based on speculations. And like I said, it will have very little effect on us.

Tom from Barclays. Just on the SEK 9 billion bridge, I guess we've heard the SEK 5 billion number before from Lulea, the new SEK 4 billion, I guess, mostly [indiscernible] and cost savings. Just wondering if it's possible to break out Oxelosund out of that? I mean, I guess it's maybe not as easy an exercise, have this level changes surprise, I suppose that it's not in any of those levers, I'd be interested in that. And then also, as part of that SEK 9 billion, are you making any kind of assumptions around e-protectionism, safeguard measures, what kind of steel price are you kind of baking into that number, I guess?

I don't have a breakout for you for specifically Oxelosund figures because you know that the special steel division is actually division that is sourced by other mills and that's sort of the combination of the result. But of course, the SEK 5 billion that we have been talking about earlier related to Lulea mini-mill, that's embedded in this 9, and then we need to add the other divisions on top to reach this total of SEK 9 billion. I'm not sure if I got to the other question.

Maybe just following up on that first, Oxelosund is not included within the SEK 9 billion?

It is. It is. All the strategic plans. Everything you've been hearing today. has been consolidated in that figure.

Okay. But it's not possible to kind of break out Oxelosund separately within the SEK 9 billion you mean?

Of course, it's possible, but we...

We fully don't have the figures to give out here now.

No worries. And then the second one was just around the other assumptions around policy for that SEK 9 billion bridge and getting to SEK 23 billion EBITDA. Are you assuming the safeguard has actually come in as anticipated? Are you assuming metal action plan? Or is this more sort of purely from self-help, there's a SEK 9 billion uplift if we get protection as omit could be more?

In that SEK 9 billion, we don't have any speculation about the policy changes. It is based on our view of the premium mix improvement, how we can reach the improved profitability and the cost saving actions there. So it is a rather simple model in that sense. So no speculation about policy included.

Yes. [ Lina ] from Danske Bank here. I have more of credit-related questions. And Leena, you mentioned your BBB- rating. I was just thinking if you could share any ongoing discussions you have with S&P and also like what's their view on your upcoming investments? Could that trigger anything with your ratings?

Of course, we have regular meetings with S&P, an ongoing discussion. There hasn't been any indication that the transformation investment would be impacting the rating as such. So we have all the chances to sustain that on the current level.

[ Jon Levy ] from Baker Steel Capital Managers. Just a few more questions on some of the assumptions and the CAGRs that we saw throughout the morning. So specifically, the 18% transmission CAGR, for example, I suppose, looking at some of the thematics in the U.S., but then over to Europe as well, data center build out some of the nuclear build-out with the recent Chemical Westinghouse deal, for example, how much of that is baked into these numbers. And I suppose if, for example, [indiscernible] and AI or data center build-out and growth was slower than anticipated. Is that massively impactful? Or are they not necessarily hugely calculated inside some of those assumed growth rates?

Are you looking at me? That must have been in either Americas presentation and the 18%. And I think it's based upon sort of what's happening in the United States and a lot of investments is ongoing in this field and when I speak to Chuck as well as per what the activities that's ongoing and transmission is a big thing. The transmission towers being built everywhere. Oil and gas is booming, et cetera. So it's based on sort of the forecast that we received from reports and that we've used in this material. Anything else you want to add to that, Chuck, because those are your numbers, I guess?

The data centers are certainly a strong component of that, but it's also calculated from the SEK 1.1 trillion that build a forecast as well.

And maybe it's good to point out that in our scenarios, we do use the external forecast data as a basis. So that's important that we keep it in that sense neutral.

I appreciate your answer, Carl. I would just like to kind of get a bit of a better sense into how you view the potential of cost inflation and steel margin compression as you transfer to more scrap-based inputs.

I guess, same thing here. We have used reports on all those reports, there is a cost increase of scrap because of demand. So we, of course, have used that analysis. So there's quite a significant cost increase from a raw material perspective. Yes. But then again, as well in this external figures that we get, we can also see that ETS cost is also increasing. But here, we've been quite moderate trying to have them on a lower end. So I think in general, we are quite conservative when it comes to the commercial benefits of the sort of our strategic initiatives.

I want to take it back to operational assets. With your last bonus, you're keeping to produce pig iron, is that a case of you're just going to take that last bend to the end of its life cycle? Or is it you keeping it a sort of backup plan? Like what do you see for the end of that last [indiscernible] and the cost involvement continuing to operate over those years?

Yes. So in RA, we have 2 blast furnaces as it is right now, and we are using both of them. And we will continue to use them until we transfer them to an electric arc furnace. And during that time, we will also produce on pig iron. But as soon as we have decided that we're going to invest in this electric arc furnace and roll them. Then of course, we will take down the 2 blast furnaces. We will not keep them. That is not our plan.

But as I said before, when do we think we're going to do the conversion or transformation. It all depends on our raw tera supply. There's a lot of questions about availability on scrap. There's a lot of questions on virgin material. Of course, this is our risk and the risk that we take into consideration. And in order to mitigate this risk, I feel very comfortable to have sort of iron ore-based production in Finland, which is significant. And first of all, that gives us a scrap, which is a 0% copper in it that we can use in the production in Sweden. But also we have the capacity to produce pig iron for our Swedish system. As a matter of fact, they've also had Swedish competitors asking if they can buy pig iron from us not so long ago, which we're not interested in, of course, but we have a good source of virgin material in-house, and that gives me comfort.

If that took longer than expected, would you reline those glass lenders as if it come down to it?

Yes. So of course, we have assessed this as well. And it's actually the drill hole area that we need to reline as a first step for the rest of the basins, we have more time before we actually have to do the relining of the whole. And to do this tap hole relining doesn't take too much time, and the cost is quite limited. So it's a very -- we do that every now and then. So that would be a big thing. It's more when we need to reline the whole blast furnaces.

But then again, I mean, we have to remember as long as we keep the best furnace, we will continue to emit a lot of CO2. And of course, we want to reduce as fast as we can. But like I said, it all depends on the raw material supply going forward.

Okay. Thank you. That takes us to the end of the Q&A. And we will leave it for tone to do some final remarks until we give the practical instructions for the rest of the day.

All right. So the journey that we've been telling today is more of a long-term journey, a journey that we're on. I think it's very clear to all of you that we will capitalize on the competence of producing and selling premium steel.

And I really enjoyed the discussion I had during the lunch time. One of my neighbors sitting next to me [indiscernible] and said that he knows someone producing tipper trails. And they say they only use as a saving material because we are superior to all our competitors. And that is the case when you walk around speaking to the market and to the customers, they will all confirm that we are quality-wise, superior to all our competitors. And sometimes, we are actually too good. That's the way it is. We are extremely good by what we do.

Of course, we want to grow this business in a world of overcapacity, and I said it before, we have roughly 650 million tonnes of ore capacity in the world. And as it is right now, Europe hasn't produced a low amount of steel as it is right now. I mean we used to be at 180 million tons back in 2018 and going backward, it's been around that level. We're down at 130 million tons right now in Europe. This is a very, very low level. And that's because of the large amount of imports that we get. It's putting a lot of pressure on the European seed industry. Even if that is the case, I think that we are handling it quite well, and that's mainly because we have these premium grades. We have these downstream activities and the downstream resources.

And what you do then going forward, we will continue to grow this part of our business. We continue to work with the value added. We continue to work with unique customer values that we can give. I think that from a European perspective, and I know that a lot of analysts have been questioning whether why should we do the Lulea transformation. Of course, we have looked at it many, many times, we look at the alternative, just close it down, will hurt the whole, Nordic balance. That's going to be very, very difficult, not only for SSAB Europe, but very difficult for special steel as well. Because just like [indiscernible] says, boring is producing a significant amount of them as well. So it's not as easy. We can't just shut down the [indiscernible] and Lulea part of the business because they will hurt the total amount of our business.

To invest in all technology, it's not an option either for a lot of reasons. I don't think we will get the environmental permit. I don't think we're going to get -- continue to have this production permit. So we decided to go for a new technology. So not only gives us the opportunity to reduce our CO2 footprint, but it also gives us added capacity when it comes to producing the premium seats that we want to produce, that we also know that we can get a premium for. So that comes down to repositioning SSAB Europe to a more premium supplier, becoming more like special steel in that sense.

And then, of course, when Per present in his presentation, he produces 100% advance [indiscernible] today. But what he's trying to communicate that there is a market demand for protection. There's a market demand for more than size and [indiscernible]. And what we're going to do is going to go further up in this matter, selling more of the armor, selling more of the [indiscernible] that we know that we are unique in the market where no one else comes even near. And then when we do that, we get even more premium. So the earnings will be higher and the unique customer value will be higher.

So then to the question on Americas, what are we doing in America. I think that when Chuck presented in his presentation, it was very, very clear that the U.S.A. plate market is quite limited. There are only a few competitors on the market. We recently announced that [indiscernible] closed down one of their plate mills. They're now looking at the one in Michigan. That leaves us pretty much with only 2 competitors on the market, us and another one. And if you ask me after this meeting, I would tell you who it is, but it's pretty easy to figure out who it is. [ Goma ] is pretty much out of the picture, that's a Canadian company. So that leaves us only with 2 competitors in the market. And the demand is going to be higher than the supply on a sort of an isolated market. And you, our analysts, you know this better than me if the supply is limited and the demand is high, then what helps to the price.

Yes. So I think from an Americas perspective as well, we are in a pretty good position. Of course, we also have the idea to go for more value added. I think that's really important. Of course, we are investigating other potential initiatives. But we also have to respect and understand that we have a quite intensive CapEx profile ahead of us. So if we're going to do more investments, it's going to be a really good investment. I don't think it's healthy for us to turn to more investments at this point right now.

I think the plan we have ahead of us is a very solid plan. I think it gives a really good return and repositions one of the more volatile divisions that we have, and it's going to generate a lot of value. I'm quite confident and I've said it to a few other people. My background, I'm a metallurgist, I'm a researcher. I'm a nerd when it comes to steel. I even collect sorts because I want to analyze what kind of micro structure they have in the old sorts as [indiscernible] I am. But one thing I do know is that the steel that we produce that SSAB is the best in the world. I think that gives us a very good platform to grow our business and make the return to the investors higher.

I think having said that, I also want to say -- I get a little bit hesitant. I don't know the schedule -- I kind of skip this one. But I want to thank, first of all, I want to -- is this time? No? Sorry. Sorry, I didn't read up on the scale, it's a good enough. I would say thank you for coming here and listening for all of you that has been here. We still have a few events ahead of us. We're going to go around on the tour, you're going to see the electric arc furnace. We're going to see the power optimizing facility. And as like Per said in the beginning, this is still on a sort of R&D base. We are investing to increase our capacity. We know that there's a big demand for it. I don't think Per told you, but there's a lot of interest from the defense industry, did 1, 2, 3 free spare parts out in the forest. They want to have advanced part, 3D printed.

And we see a great demand for this. I think it's a great potential for us because we are, as far as I understand, the only company producing power for the military sector at this point. I think it's going to be interesting for you to go and see it. This is sort of a future technology, and it's going to grow. And I think that we have a very good base to standout when it comes to this. The electric autos are going to see, and then you also have a chance to go around our rolling mill to see that. I think that's it.

And before that, there is an exhibition. Maybe you want to say something about the exhibition?

Yes. So what we try to put together -- I mean, we can't put everything there. But we would -- we try to put together a little bit of what we can actually offer to the market when it comes to value added. So I think the first boost, you will see is sort of the expo bucket that we have designed, and we have customer can actually buy a license to produce this export bucket. It's a very small idea and smart concept, you should ask more about this when you get there. You would also be able to see sort of the place that we have produced through this new equipment here, the unique patented technique that we are using to sort of widen the plates in a very unique way and then we do the crunching. You can't even see in the cross section that it has been welded. So it's very unique in that sale.

And then to the next , you will be able to go to SSAB Americas, you're going to see how we were able to fulfill this first mover coalition requirements when it comes to steel. I think that's a very enormously good achievement by SSAB Americas. It also shows how far ahead we are of our competitors, and you can ask more about that when you get there. And you can also see a little bit about the wind power mill and the focus we have and also for some of the value added that we're going to do there. Then you're going to go to the SSAB Europe, we're going to see the docket [indiscernible] beams that we can supply. And there are some color-coated materials that I really enter to see that as well.

And then you have Tibnor. You go through that, some of the processing that they can offer. It's a big boost, but very small component. So a lot of space if you need that. And then you're going to go to Rocket Construction. Here, you're going to have a lot more value added, where you can see some of the safety parts that we supply to the market as well and also the roofing solution. and unique that they can supply. So it takes time to do this and ask a lot of questions. I think it is important for you to understand that we offer a lot more than just steel. We are more than just a steel provider. And I think that's extremely important. And we are one step ahead of our competitors now looking into getting into the sort of value-added journey, and we have already done that, and we are establishing the markets with a very good position. And if the construction segment comes back, and we think it will, we have a very good position.

Now for years, both Fredrik and Sami has been working on reducing the cost structure and you have done your homework, you're now -- you can't brag about your profitability, but you reduce your costs. So if your construction segment comes back, I think you have a really good opportunity to make some real money. That is our expectations. Everyone in this room is reflecting that.

I think that's a very good summary of the exhibition also for our webcast participants that will unfortunately not be able to be part of the rest of the program. So it's time to say thank you for joining and goodbye to the webcast viewers. We have some very important practical information for those of you that are in the room. So please bear with me.

Good morning, and welcome to this presentation of the SSAB Q3 report. My name is Per Hillström. I'm responsible for Investor Relations. And presenting today, we have our President and CEO, Johnny Sjöström; and our CFO, Leena Craelius. And as you might notice, we have no video today. We are in a temporary office. So we don't have the normal studio. But again, that will be, as usual, Johnny will start with the quarter, and then a deep dive into the financials with Leena and then Johnny comes back with the outlook and a summary. And there will be time also, of course, for questions at the end.

So by that, please, Johnny, begin.

Good morning also from me. Start by summarizing the highlights from the Q3 report. I would like to emphasize the safety performance that we have within SSAB and also the safety culture that we've implemented. We continue to reduce the number of lost time injuries in the company in our journey to become the safest steel company in the world. I'm very proud of the level we are at right now, and we have ambitions to continue this development.

Now moving over to our operating results. I think that Q3 came out on a quite stable level. It has been a challenging market not only geopolitically, but also the market conditions in Europe have been quite challenging. And even so we still performed according to the expectations, and that's something I think that we should take some pride of. One -- I think the difference as compared to last year was that the Americas contributed with a higher profitability compared to Q3 2024.

Now looking at the cash flow improvement, we can see that the Q3 this year was a stable quarter also from a cash flow perspective, came in on a decent level. If you can see the picture to the right, you see a shovel with 2 signatures on it. One is my signature. The other is from one of our ministers -- Deputy and Prime Minister of Sweden, Ebba Busch, when we had the groundbreaking ceremony in Luleå. That was quite a successful event, also bringing all the stakeholders together so that's a starting point for the investment in Luleå.

Then moving over to our divisions and having a look at our Special Steel division. The shipments came out slightly lower than we expected. But even so, I think that the prices maintained or remained on a good level and the operating margin came out on a stable and decent level, 22%. And looking at the financial performance that even though there are -- sort of the shipments were slightly lower the financial result of roughly SEK 1.4 billion shows resilience in a very challenging market.

Looking at SSAB Europe, I have to remind you that we had a maintenance outage in major parts of the organization in Europe. Hence, pushing the profitability down. Also, the shipments were slightly lower mainly due to the fact that we did have the outage. But even though, I would say that comparably, it was a decent quarter and came out on expectations. Like I said, this situation would have been better if it wasn't for the outage. I think the positive is that we maintained prices slightly better than Q2. And if we can continue to do that, I think that's a very good performance by the SSAB Europe organization.

Looking at SSAB Americas, shipments here also came out on a slightly lower level. There has been some uncertainties now regarding the tariffs and what's going on the U.S.A. market. We -- I have to remind you that we are one of the largest plate producers on the U.S. market and the tariffs would limit sort of the competition, but we can also have a negative impact on the demand side.

Having said that, I have to say that the operating results for Q3 from our America division came out on a sort of expected level where also here the prices were maintained on a stable level. I also have to remind you that if you compare to Q3 last year, we had a maintenance outage in Montpelier Q3 last year that brought down the financial performance. Having said that, I still think that the Q3 performance this year was stable and according to expectations.

If we look at the 2 subsidiaries that we have, starting with Tibnor, I know that the market conditions in the Nordics are quite challenging. We haven't really seen the pickup as we were hoping for. The construction segment has maintained or remained on a lower level. We have seen some signals that the market might improve the construction segment, but that will more likely be in next year. So as you can see, the shipments came out lower than we expected and also lower than Q3 last year. The operating result also came out on a sort of a lower level. Of course, the shipments had a big impact on the operating result. Looking at Ruukki Construction, the revenue were slightly higher than they were at Q2 '25. And the operating results came out also on a sort of an expected level of roughly SEK 80 million for the quarter of Q3.

Yes. Another update I'd like to do. I think the picture you can see to the right is from Oxelösund. Here, we can see how the electric arc furnace, this is the building, how that's progressing. And the progress is really good. It's progressing according to our plan. Having said that, I just want to also highlight that the production start-up will be in Q1, early Q1 2027, which is a slight delay compared to what we have communicated in the past. That is only related to the power line and the power grid. So it has nothing to do with our own performance. It's more an external factor that we cannot impact.

One of the highlights regarding transformation also going in this green transformation journey, we became or SSAB became the first steel in the world to meet the International Energy Agency, a threshold for near-zero emissions and the First Movers Coalition's criteria. So this SSAB Zero product that we have actually met this criteria way before everyone actually could think it was possible. I think that's a good prestige for us. And these products were made partly by hydrogen-reduced sponge iron and also using scrap and also using the hybrid technology in the sponge iron that we produced. This product will be used in GE Vernova's onshore wind turbine towers. And last but not least, also the Luleå mini-mill project is proceeding according to plan, and I already mentioned sort of the groundbreaking ceremony. That was it from me now. Then moving over to you, Leena.

Thank you, Johnny. Let us start by looking at the steel shipments first. That's on the graph on the top right-hand side. The outcome Q4 -- or Q3 was 1,466 kilotons and compared to Q2, that is a reduction of 14%. But then compared to previous year third quarter, shipments were fairly stable, some 9-kilo tons higher this year compared to last year. And as the graph is illustrating Q3 and Q4 tend to be lower seasonally than the first and the second quarter.

And if we do a quick comparison versus the outlook we gave, Special Steel shipments, we were indicating to be lower, which means 5% to 10% lower and the outcome was just below that with 11%. Europe division, we were indicating to be significantly lower, and that's meaning over 10%, and the outcome was in line with 18% lower shipments. And then Americas, we were indicating to be somewhat lower, which means up to 5% reduction and the outcome was below that with 10%. And to keep in mind that we did have the maintenance outages in the Nordic mills during the quarter.

If we then move to revenue graph, you can see that the outcome Q3 was just below SEK 23 billion, compared to previous quarter, the reduction is SEK 2.7 billion and compared to previous year, Q3, the reduction is SEK 1.4 billion. And a similar comparison with the prices outlook we gave, we were indicating Special Steel division and Europe division to be stable in prices and they were actually slightly better, a 1% to 2% higher compared to previous quarter. And then in Americas, we were guiding higher prices, 5% to 10% and the outcome was below that with only 1% increase. And as Johnny already mentioned, the market conditions having impact on that.

EBITDA performance, Q3 at SEK 2.9 billion reduction versus previous quarter of SEK 3.2 billion but improvement compared to previous year Q3, which was SEK 2.3 billion. And in relative terms, if we do the comparison of Q3 versus previous year, last year, the margin was 9.5%, while this year, it was better on a level of 12.6%. So improvement. And if we continue with more detailed analysis of the quarters. Firstly, we compare the operating result, Q3 versus previous quarter outcome in Q3 was SEK 1.9 billion. The second quarter was SEK 2.1 billion. And here, we have a positive and negative impact.

If we start analyzing the prices, biggest contribution coming from Europe division, SEK 570 million, followed by Special Steel division, SEK 110 million. Both of these were supported with the good premium mix. And then Americas also positive impact of SEK 85 million. So the total impact on prices to the result is this SEK 765 million. To mention Tibnor and Ruukki Construction prices were flat quarter-on-quarter.

If we then continue to analyze the volume impact, total impact was this SEK 915 million. Already mentioned, the shipments were lower, 14% lower quarter-on-quarter. Biggest contribution here coming from Europe division, where volumes were 158 kilotons lower; Americas 47 and Special Steels 36 kilotons lower. And already shown previously in the graphs, Ruukki Construction had seasonally higher sales volumes and Tibnor had lower sales volumes.

Then if we have a look at the variable cost, the net impact on the result was a negative SEK 305 million. We know that the raw material costs did come down in iron ore, coking coal and scrap, but this is also including the change in inventory impact and previous quarter, we had higher positive impact than this quarter, thus the bridge analysis shows a negative trend here.

Fixed cost -- in the fixed cost, we were lower. This is typical seasonally lower fixed cost due to the summer period, but we also had some saving activities taking place during the quarter. Capacity utilization, a negative impact of SEK 390 million and the majority of this is related to the maintenance outages during Q3, we didn't have any during Q2.

If we do the comparison now against the previous year quarter outcome last year being SEK 1.2 billion compared to SEK 1.9 billion this year. Starting with prices, the total negative net impact, SEK 790 million. Prices were, on average, 7% lower than last year. Both Special Steel and Europe division having a negative impact, Special Steel division with SEK 490 million. Europe division SEK 470 million, while Americas had a positive impact here around SEK 200 million. To point out that here, we have a rather large impact of the FX, total negative impact of SEK 560 million. So the currency definitely had an impact in this analysis. However, that is compensated almost fully by the lower cost in variable cost and the FX impact there is a positive around SEK 0.5 billion.

On top of that, we have lower raw material costs. And if we split this variable cost positive impact per division, Special Steel division is contributing most with SEK 645 million, Europe SEK 510 million and Americas SEK 490 million. But majority of this SEK 490 million is actually related to the maintenance cost that took place last year that we didn't have during this year.

Fixed cost, slightly higher than last year. To mention that last year, we had the full profit sharing provision reversal done during Q3, which we didn't have this year, we only took a part of that reversal this year. And then the capacity utilization, we have a positive impact of SEK 105 million. Last year, we had more maintenance outages. We had outage in Montpelier mill and also Luleå had more extensive maintenance outage last year.

If we then continue to look at the cash flow, I already mentioned that we had a positive operating cash flow as well as net cash flow quarterly comparison year-over-year, EBITDA on a higher level. Change in working capital, both quarters this year and last year having a positive impact. Maintenance expenditure is a bit higher than last year. And to remind that the other line here is related to the CO2 emission swap transactions. We had also these transactions during the third quarter as we did last year.

And then if we look at further down the investments when it comes to strategic projects, we can see that a bit more than SEK 1 billion increase compared to last year, and majority of this is related to Luleå mini-mill and as Johnny mentioned, the construction phase has now started.

And this is leading to net cash position of SEK 10.8 billion. This is very stable compared to previous quarter, which was SEK 10.9 billion and thus, the net gearing on exactly same level last quarter as end of Q3 being within our financial targets and the outcome was minus 16%.

Raw material prices, as the graph is illustrating, they have come down compared to last year. Iron ore reduction quarter-over-quarter was 10% and even a bit more compared to previous year while the coking coal prices have been a bit more stable quarter-on-quarter. But when comparing last year level, it's more than 20% reduction in the prices. Scrap prices in U.S. have been more stable than the other raw materials quarter-on-quarter rather stable but slightly below previous year level. And the outlook is that the Nordic mills will still get some benefit from the lower raw material consumption cost during Q4 and we expect that the scrap prices would remain rather stable also during the coming quarter.

Maintenance table, this we have updated slightly since last time we showed this. Last time, it was SEK 1,570 million, while now it's SEK 1,530 million. And as the table is illustrating Q3, we had the maintenance impacting our production volumes and the cost and even more so during Q4 when we have more maintenance taking place during the quarter. And the CapEx guidance, we have not changed. We still plan to spend SEK 10 billion during the year, SEK 3 billion of that related to maintenance CapEx and SEK 7 billion related to the strategic CapEx.

And with this, I give it back to you, Johnny.

Thank you very much, Leena. So looking forward a little bit, the outlook. So if we have a segment approach to this, and we start by looking at heavy transport, the situation is still sort of on a lower level, but it's tend to remain low on a lower level -- or sorry, maintain neutral on a lower level. So we've heard announcement from several large heavy truck producers in Europe. They claim that it's slowing down. But on the other side, we also see that segments such as shipbuilding is strengthening, not only in Europe but also in United States and also rail transport. So that's sort of compensating a little bit for the lower demand for heavy trucks.

Looking at Automotive, there are mixed signals. We have seen Volkswagen announced that their sales have dropped in the United States and in China. But on the other hand, it's increased by 9% in Europe. So that is sort of a signal that Europe might be sort of have hit the lowest and now it's on its way up. So that's what we're hoping for going forward.

Looking at Construction Machinery, there's a soft demand in Europe. And I think that for Q4 is probably going to maintain soft according to the forecast that we have. Look at Material Handling, which is very much related to the mining industry has been sort of on a higher level, now driven by high gold prices, new mines are opening up, et cetera. So we see more activity in the mining. But for Q4, we believe it's going to maintain stable on a high level. Energy, we see that there's still a good demand for energy transmission. I would say that both in Europe and United States. We've had a lot of activities in the oil and gas in the United States. So we believe that's going to be between strong and neutral for the Energy segment.

Construction segment still is on a low level of activity. There are some signs and signals that things might change but it's too early to say, but hoping that, that will be the case. And then Service Centers, depending on where you are geographically, but in Europe, we believe that Service Centers are beginning to buy a little bit more especially now trying to be one step ahead of what's going to happen to CBAM and other protective mechanism that's going to happen in Europe. While we see, on the other hand, in the United States, it's actually more or less the other way around.

So the outlook that we have communicated is that the shipments of Special Steel is going to be slightly lower and that's typically a seasonal effect but prices are going to remain the same. If you look at SSAB Europe, now considering that they did have a maintenance outage in Q3 we believe that the volumes are going to be higher. We also have a maintenance outage in Special Steel, which is also consequently will give a negative impact on the shipments. And then for SSAB Americas, we also foresee that's going to be somewhat lower shipments as well as prices.

So to summarize, I think that we had a better result in cash flow compared to last year. We have a very strong focus on safety, and that consequently have also given us as a better lost time injury frequency. Stable earnings on a good level for Special Steels, which is very important for us and the journey that we have going into more special products. And the transformation projects are progressing according to plan and also that we have planned maintenance, both in North America as well as in Europe in Q4 that's going to have a negative impact on our financial performance for Q4.

I think that was it, Per. So maybe I'll leave it over to you then.

Yes. So sorry, we can just remind on the Capital Markets Day on the 4th of November, it's not too late to register. So you're much welcome to join full day in Oxelösund, and you will find more details in the registration form there. So by that, we can move into the Q&A. [Operator Instructions] So by that, operator, please present the instructions for the Q&A.

[Operator Instructions] And your first question today comes from the line of Kaleb Solomon from SEB.

To start off, maybe regarding the SEK 2 billion of CapEx related to the power line, I know you mentioned before that there will be a cost that sort of comes on top of the SEK 6 billion for the electric arc furnace, but I think this is the first time you put a figure on it. So could you just give us some color on how much of that SEK 2 billion is already baked into the CapEx figure for 2025? And how much of it will we see next year?

I can comment on the -- how much of that is now in the figures of '25. So far, we have paid around SEK 700 million of that total and the rest, of course, remains to be paid during coming years.

Okay. That's clear. And on SSAB Europe, can you maybe give us a rough figure of how much the sort of staffing and production-related cost measures contributed to Q3 results? And what sort of measures or impact, if any, should we expect in Q4?

We have started in Europe division, so-called flexible saving actions. We have had this time banks in use, both in Sweden and Finland. And to give a rough estimate, I would say that during Q3, there was around SEK 100 million of savings.

And would that be similar in Q4 or?

During Q4, of course, we are monitoring the market situation. And of course, we continue with this flexible man-hour activities if needed. However, we do have also a lot of maintenance activities that we need to implement. So difficult to give a figure for the saving targets. But the good thing is that we have the flexibility that we can utilize when we need it.

Your next question today comes from the line of Anders Akerblom from Nordea.

So firstly, just wondering about shipment growth in Europe now in Q4. I mean, obviously, this kind of breaks from the past few years sequential trend. So I guess should one interpret this as you becoming incrementally more positive also for 2026 with regards to these recent regulations? And it would be interesting to hear how you view this particularly from the perspective of prices as well, what your current kind of view and assessment is?

So Anders, this is Johnny. Yes, Europe has been under pressure with low imports for quite some time. We see some signals now that the CBAM would have an impact. We've also heard the European Commission communicating safeguards. I think sort of the analysts are forecasting that this will have a positive impact on the utilization of the European mills. It will most likely also have a positive impact on the prices. But that's pretty much all I can say for the time being.

Yes. Fair enough. I appreciate that it's difficult to assess today. And second question, just -- I mean, with regards to one of your competitors in green steel kind of looking to become insolvent in the coming months, if one is to trust the media reports at least. Do you see this presenting any interesting opportunities for SSAB in any regard?

I think our focus is mainly on our transformation that we're doing in Luleå and Oxelösund. That is where our main focus is. We're going to make sure that we will have added capacity to produce the unique products that we are really good at and continue our position on the market. And what's happening to [ steel grades ] is remaining to see. So that's all I can comment for the time being.

Your next question comes from the line of Tom Zhang from Barclays.

Two for me as well. First one, just on the European pricing guide, I mean, I recognize there's sort of lags in the contracts and spot pricing was weak through May to June, but I guess spot pricing has come up since then. Could you maybe give us a bit of color on why the guide is for lower pricing? I mean, is there much mix impact that's being baked in there? Yes, any color around that would be helpful, please.

Yes. So in this case, we're guiding for Q4. And most of the orders for Q4, we've already taken. And you're right, there is a mix effect, yes. That's all I can say about it.

Okay. Fair enough. And maybe just to follow up very quickly on that mix effect. I mean, is that a sort of Q4 specific thing? Is this just a normalization in mix? How do we think about that mix impact kind of going into 2026? Is Q4 sort of one-off?

Yes. I think that Q4 maybe is a little bit of a one-off, yes, like you said. But I think on the positive side, we have not taken any spot business this year or we are in a much more stable position than we have been in the past. We are optimistic for Q1. A lot of wins are going in our direction. So I think that goes for the whole steel industry. They're quite positive for Q1. So then you could draw your own conclusions.

Fair enough. And the second one, maybe, please, just on U.S. plate market. I guess you guided to slightly lower pricing, again from the sort of lag impact. I guess my question is really, what is the market reaction been to the price hikes that you and some of your peers have tried to push into November? Has there been enough import supply and domestic capacity reduction to get that through? Or is this really more a sort of stabilization in spot prices that we should be expecting?

Yes. So we have a very strong position on the U.S. plate market. And as you said, we communicated the price increase and that was also then followed by one of our larger competitors just after we announced it. I think some of it was actually absorbed and accepted by the market. I think in the recent weeks, we've seen demand go down on the U.S. market. There are concerns about the U.S. economy. There are concerns about banks failing, overinvested market. They're concerned about inflation because of tariffs. This is pushing the demand back. And this has been seen in the consumer steel business for quite some time. I'm referring to automotive, I'm referring to housing and things like that. But now we can also see some other projects, industry-related projects being postponed and that's something which is quite new. So hence, we are a little bit cautious regarding the pricing in Q4.

Your next question comes from the line of Tristan Gresser from BNP Paribas.

So I have 2. If I can ask a little bit more about the steel action plan, if you can share your view about the new quotas announced by the commission. More specifically, do you see any risk of dilution of the policy? And do you think the policy will only be implemented by July next year or it could come sooner? And if that does create some risk?

First of all, I think this policy is really important for the European steel industry. Without it, there's going to be a lot of capacity closed down and a lot of job opportunities that will disappear. I think it's necessary in the market conditions that we have where we have some actors not trading according to the World Trade Organization that doesn't have the fair trade policy that we have countries subsidizing the steel production and having a massive overcapacity.

I think that Europe needs to take action in order to sort of protect our interests. The suggestion that's been put on the table by the European Commission is sort of suggesting that was worked out primarily by Eurofer. And I think it's based on sort of the import levels that we had in 2013, where we're targeting sort of to get down to a 15% level for flat products. I think that's important. When the timing will be, it's hard to say, but it's not likely that it's going to happen in the beginning of Q1. I think it's more likely that it's going to take more time than that. So we'll see.

All right. That's clear. And just the potential direct impact for you. I mean, usually import penetration is a bit lower in the Nordics. So if you can confirm what pressure you're facing from imports in the regions you operate? And we've seen some price ticking higher in Europe of late. So do you believe you're already seeing more buyers turning to domestic producer? And lastly, in Europe, how much spare capacity do you have? I think -- yes, if you could comment on your utilization level at the moment and how much could you go further up?

Those were a lot of questions at the same time. But I'm trying to summarize a little bit what you were asking for. But we know that the imports have a very big impact on the price level. The imports that we get from China, Asia are on such a low level that it doesn't even cover contribution level or cover the variable costs. When the imports are reduced only with 5% prices goes up, we have seen that historically. And we believe that the safeguards will have a healthy impact of the pricing in Europe. So also going to have a healthy impact on the utilization. When it comes to SSAB, I think that we are in a better position than a lot of our competitors. Our utilization level has been quite good, quite decent. But I think the impact will be from the pricing. We haven't too much spare capacity in that regard, but we would hopefully see a price increase in the market going forward.

Okay. No, that's clear. And maybe if I can squeeze just a quick follow-up on that. Some steelmakers in Europe are pushing for a pushback of the free allocation phaseout. Are you pushing with them? And if not, can you explain why?

No, we're not pushing with them. We're actually working against them. I think that if the European Union has set up a policy or even a law regarding the ETS, we need to follow it. We can't just change our mind from one day to another. So -- and if I listen to what some of the people in Brussels are saying, it's -- they are supporting the concept that we're going to continue with the plan of the free allocations according to what we had before. But it remains to be seen the impact, I think that from our perspective, the journey that we have and the investments we're making is based on other financial reasonings than only the green transformation. We are well equipped for whatever changes that will happen. And we have did and done a lot of sensitivity analysis in that regard to be on the safe side. One of your questions before I think that was related to if we see -- if the market is picking up now because of the potential CBAM also the safeguards, and there are such signals on the market. So the answer is yes.

Your next question comes from the line of Alain Gabriel from Morgan Stanley.

I've got 2. The first one is on Oxelösund. Do you mind reminding us if you need to apply for new product certifications given the change in production route? And if there's "a race against time" to get these certifications in time for the plan to start production? That's my first question.

So when it comes to the major part of Special Steels products, then there are no such sort of demand requirements. However, if we are planning to supply the Borlänge mill, with 0 slabs or low emission slabs, then there will be a qualification needed. However, when we speak to the potential customer, they say that there will be a lighter version because the majority of the production line is already there. And if the chemistry is right, then there will be just a lighter certification period.

And my second question is on the Special Steel division. I guess, your profit margins for that division have remained very robust, beating all expectations for the last few quarters. I guess, your volume targets though have fallen a little bit behind your 2023 CMD targets for that division. Is that a conscious decision to go after value over volume? Or are there any other underlying challenges preventing you from lifting your shipments in that division to meet the targets you've set a couple of years ago?

First of all, value will always go over volume. That is our concept going forward. And I'm very happy with sort of the mix development we've seen in Special Steel working more with the strategic or the more advanced products within Special Steel products such as Hardox 500 Tuf, products such as Hardox HiACE, Armox, et cetera. Those are grades, which are very, very unique, and there's a high demand for it. And we are investing to be able to produce more of this because they require a different production process with tempering, and we're investing more capacity in Mobile, Alabama as we speak. We're looking into what we need in order to grow in Oxelösund as well in that regard.

So when it comes to the volumes, there has been a very challenging situation when it comes to geopolitical stability. There have been tariffs. There have been safeguards. There have been war. There are sanctions, even though if you look at just the Russia and the sanctions to Russia, but there have been sanctions also on neighboring countries, et cetera. So that has, of course, impact Special Steel and the volume growth as such. Having said that, I have to say that I'm really proud of the journey that they've taken, upgrading customers to more advanced steels, generating more value for the company and also for Special Steel.

Your next question comes from the line of Dominic O'Kane from JPMorgan.

I have 2. You've given us the guidance for shipments and prices into Q4. But given the announcements over the last couple of weeks from the European Commission and as we creep towards CBAM in Q1 2026, have you seen any change in behavior among your customers or order books for how customers are kind of reacting to the situation in Q1 into Q2?

We have seen sort of a slight change in behavior. We -- I think the interpretation we've done so far is a lot of the European customers now is looking for European suppliers. I think that a lot of our customers are concerned about not only the safeguards, but also the CBAM to some extent and the demonstration taken in order to apply for permit to export into Europe. Hence, there is sort of an uptick in the order intake from the European customers. I think that's going to have a positive impact on our Q1 performance. I think in Q4, the order book is pretty much full, then it will be more related to utilization of the mills, but most of the orders have already been set also the prices, so.

That's really helpful. And then my second question, just on U.S. tariffs. The statement that you make, I think, slightly leaves the door open for tariff impacts in the future. You've obviously stated for the last 2, 3 quarters that you have local production. But could you maybe just give a sense about how your U.S. and European supply chains maybe have changed at all since the announcement of U.S. tariffs and whether you think you can continue to be immune from tariffs in the next 1, 2 quarters based on how you've managed supply chains over the last 6 months?

Yes. So you're right. We have a significant production in the United States. That helps us, gives us comfort. We still have products that we export from the Nordic countries to United States, especially SSAB Europe with their automotive grades Docol going into side collision beams for cars. We have communicated with the customers that we cannot bear these tariffs on our own. We are sharing that cost but we also know that long-term some of our customers will look for domestic supplies instead not only for the cost issue but also for political reasons.

Up until now, we haven't been affected so much by it because it takes time to requalify a new supply. But long term, this will, of course, have -- will have a negative impact on our export from, let's say, Borlänge to United States. Having said that, we also know that we are working on European customers that is more than willing to buy that capacity instead. We have been fully utilized in the Continuous Annealing Line in Borlänge. We have chosen to sell it into the United States because that's where the margins and demand has been the highest but as we see it right now, we can shift that capacity over to European customers instead.

I mean are you able to at all quantify that Borlänge impact on a long-term basis?

Not really. No. It's -- I mean, as it is right now, the impact has been really minor. I mean, hardly an impact at all. But -- and if you talk long term, it's also -- I mean, can I say how much we export from Sweden to -- yes. So I think we're exporting 120,000 tonnes of this special steel grades from SSAB Europe.

It's also stated in our interim report actually how much Europe sells to the U.S. and these are those products. So you can follow it each quarter.

And it's been reduced maybe with 20,000 tonnes up until now. So -- and long term, I don't know, it's going to be a similar size maybe. So it's not -- I mean we're making this maybe to a bigger thing than what it is. It's -- you're not even going to see it in our profit statement or income statement, so.

Your next question comes from the line of Cole Hathorn from Jefferies.

I'd just like to follow up on the U.S. plate market and the moving parts that you're seeing in that segment at the moment. You talked about some softer demand trends, but I'm just wondering how you're seeing imports into the U.S. on the plate side. Have you seen a reduction from players like Algoma and on inventory levels in U.S. plate, have you seen that come down with those lower imports? I'm just wondering what your outlook is a little bit further on the U.S. plate segment?

I think when this tariff was announced and the 50% was announced, there were a few suppliers like Algoma that ship through the tariffs hoping and thinking that the tariffs between Canada and United States will be taken away. So they continue to deliver through the tariffs into the United States. As we have seen now during the fall, September, late September, that their exports into the United States have dropped significantly. We also have seen which has been public that they get a sort of loan from the Canadian government. Algoma is a little bit in the challenging situation. They can't afford to continue to take this cost. They can't continue to export into United States.

So that is sort of from our perspective, quite positive. We've also seen another competitor closing down their mill. It's a 300,000 tonnes plate mill that has been closed down. Am I allowed to say what company it is? Or? No. So sort of supply side is sort of shrinking in the U.S. market. So that's on the positive side. I think, as I said before, on the negative side, we see now all of a sudden, that demand is slowing down because of concerns what's happening in the market. I think in this case, it's more the financial market that's bringing a lot of concerns. Everyone remember what happened in 2008 in the Lehman Brothers. So I think there is now in a wait-and-see mode to see what's going to happen. But some of these larger projects has been put on hold. So we'll see what's going to happen to that going forward.

And then maybe just following up there on anything you can say on distributor inventory levels. So if demand was to come back, do you think the price reaction would be quite quick?

So the inventory level is medium to medium, high. So it's not -- you can continue to fill it up a little bit, but they still have enough inventory to be able not to buy anything for some time. So I would say medium, medium, high.

Your next question comes from the line of Andrew Jones from UBS.

I just have a question on Special Steel stuff. Obviously, the quota reductions are going to be massively supportive for the European business as they come through as planned. But obviously, given the Special Steel business is far more global, I'm wondering how you see the moving parts and the potential benefits, which products in particular will actually be helped by these quota reductions and maybe if you can do something to quantify that. I'm also curious secondly, about backlog and the impact of some of this higher defense spending. Are you seeing any of that in the back of Special Steel yet? Can you give us any steer as to the potential EBITDA benefits we might see from these higher defense spending we're seeing at the moment?

First, to the question of Special Steel and sort of the exports and your comments regarding the safeguards, if that could have a negative impact on Special Steel. I think one of the good things with...

I don't mean a negative impact. I mean, like are the products you're selling in Europe and Special Steel that are going to materially benefit or because it's global will it -- is it -- should we expect a pretty limited benefit from the quotas?

This question is basically, are we seeing a lot of imports impacting Special Steels at the moment that might ease, that make a more attractive market than when the safeguard comes for Special Steel products.

I think that what we sell in Europe are quite unique, and I don't think that there's any competition from outside Europe that's going to have a large impact. I think it's more important that sort of the construction segment comes back. If it does, we see a tipper market, a dumper market, an excavator market to come back, which are on a very low level. That has a bigger impact, I would say. There are businesses like the tooling business that is almost dead in Europe because of Chinese imports going through Italy. We have seen a lot of companies closed down because of this. Now there is a likelihood that there will be a sort of a shortage of supply in Europe and the prices will become quite high. This is a very small part of our business. I'm just stating the fact that if it's one area, maybe in Special Steel, it's only this area. And then to your sort of second question regarding protection. We know from history that every announced project takes time to get into the order books. There is a stable demand on a sort of somewhat higher level than we've had before, but we haven't seen the boom yet.

And do you have any expectation for when we might see that step up if the planned spending comes through as some of these announcements suggest?

So the planned spending has already -- I mean, we know for a fact that the Hägglunds in Sweden. They tripled their capacity. They're fully booked for the next 6, 7 years. Same thing with Rheinmetall. They also tripled their capacity. They're fully booked for the next, I would say, even up to 7 years. We see Patria in Finland, the same situation there. So all these defense companies, they can't produce more. I mean if they could, they would produce more. That will eventually reach us, but there's a lead time before we -- the orders will come to us, but we know it will.

But can you give any timing on what that lag is and maybe something around whether you expect the margin in the Special Steel group to materially improve with the improving mix as that starts to come through and how we should think about that?

So the timing, I cannot comment on. That's only speculation. It's really hard to actually predict. If it grows, it's going to have a very positive impact on Special Steel, but that's all I can say.

And the question comes from the line of Bastian Synagowitz from Deutsche Bank.

My first one is just a very quick -- a quick follow-up actually on the savings with regards to cost savings. And I think Leena, you mentioned that you had SEK 100 million cost saving in Q3. I wasn't sure, did this number refer to Europe only? Or was that including Special Steel? And the reason I'm asking is that from memory, the effect from overtime accounts was typically between SEK 200 million and SEK 300 million in a normal third quarter across Special Steel and Europe together. So if you could just clarify whether maybe SEK 200 million to SEK 300 million has been the total effect or whether it's been just SEK 100 million this year. That's my first one.

The SEK 100 million I was referring to Q3 and majority of that is related to Europe division, where they have implemented these flexible working hours. So that's sort of to specify the cost savings.

And then if you include Special Steel as well, is the number higher and closer to the SEK 200 million to SEK 300 million? Or will there be more in Q4 as well this time, while usually it's a bit more Q3?

Yes, I said that we will, of course, monitor the market and adjust then the cost base accordingly. Special Steel division hasn't done as much as Europe division when it comes to these flexible cost savings.

Okay. Very clear. Then my second one is actually on cash flow, and probably one for you as well. With regards to working capital, I guess, usually, we should see a release here, I guess, particularly in this environment as well where volumes are weak. So maybe can you please update us with the sharper numeric guidance for what you expect as a working capital release in Q4 and whether you think that in combination with your, I guess, operational performance, you will be able to keep net debt more or less stable. I guess, what are your expectations for net debt ultimately?

Yes, you mentioned that Q4 tends to be the quarter when we see a positive working capital behavior. And of course, this year, we target to have the same cash generation being in a strong focus all the time. And I would say that the net debt cash situation should be relatively similar during Q4 as it has been now during the past few quarters.

Understood. Okay. So basically stable versus Q3, is what you say?

Yes.

We will now take our final question for today. And our final question comes from the line of Boris Bourdet from Kepler Cheuvreux.

I would have just a follow-up on the European trade action. So I would be interested in getting your view on this announcement is really the best case scenario for steel makers 50% cut almost in quotas and 50% tariffs for out of quotas imports. How do you think -- what do you think are the chances for that to be adopted in this current state? I ask the question because we have some -- we hear some pushbacks from Germany. So what is your scenario for next year? And what could be -- you said that lower imports might mean a high impact on pricing. What would be the attached pricing impact that you would expect from removing 60 million tonnes of import from Europe?

So first, regarding the safeguards, what was the question? I was...

Do we believe that the suggestion in its current form will hold?

Yes. So we have, as a member of Eurofer, this is a very important question for us. We're pushing it. We have a close contact with all countries to make sure that they support us when it's going to be voted in the European Commission as well as when it's going through the European Parliament. There are a few actors in the market who is a little bit skeptical to this, and that's primarily the German automotive industry. We are in close connection with the MDs of these companies, having closed discussions with them. Then except for that, we also historically have had seen Sweden and also Finland, not really supporting initiatives like this because for them, it's been important with the free trade but as far as we understand, fair trade is also very important to these countries. So we are, from a our Eurofer perspective, optimistic. I guess that's all I can say for the time being.

Yes. And it was a question on pricing. You mentioned that a reduction of -- I was wondering whether you had made some math on that and you could point to a number we could have in mind.

No, I'm sorry, I can't do that.

We do have one more question. And the question is a follow-up from Tristan Gresser from BNP Paribas.

Just on CapEx now that you have more visibility on Oxelösund, Luleå, the power lines. Would you be able to give us a rough sense of what you expect for next year? Would that be a focus of the CMD? And also if you can just say a few words about the CMD, what would be the focus there? And what could be the message that you feel is important to pass on to investor?

Good that you mentioned CMD because there, we will definitely give more transparency of the CapEx plan for coming years. And of course, we will dive into also the division level strategies and strategy overall. So hope many of you will actually come and meet us there. So welcome.

There are no further questions. I will hand the call back to Per.

Yes. Thank you very much. Thank you for a lot of good questions. And this concludes basically today's conference. Thank you, Johnny. Thank you, Leena, and wish you a nice day.

Thank you very much.

Thank you all.

Thank you.