Earnings call transcript: Acerinox Q3 2025 sees mixed results amid market challenges

Acerinox reported its Q3 2025 financial results, revealing a mixed performance with an EBITDA of €108 million. The company’s stock experienced a decline of 3% following the announcement, reflecting investor concerns over increased net financial debt and ongoing market pressures. Despite challenges, Acerinox continues to focus on cost-saving measures and strategic investments.

Key Takeaways

• Acerinox’s Q3 EBITDA reached €108 million, contributing to a nine-month total of €321 million.
• The company’s net financial debt increased significantly to €1.2 billion compared to €453 million in Q3 2024.
• Acerinox’s stock fell by 3% in pre-market trading following the earnings announcement.
• The company is expanding its North American Stainless capacity and integrating Haynes International.
• Acerinox anticipates a market recovery in 2026, with potential positive impacts from new EU trade measures.

Company Performance

Acerinox’s performance in the third quarter of 2025 was marked by a mix of achievements and challenges. The company reported an EBITDA of €108 million for the quarter, contributing to a cumulative nine-month EBITDA of €321 million. However, the stainless steel division faced a 10% reduction in production and an 8% reduction in sales, reflecting broader market challenges. Despite these hurdles, the company remains competitive, leveraging its diversified geographical presence and product lines.

Financial Highlights

• Revenue: Not disclosed for Q3 2025.
• EBITDA: €108 million for Q3 2025.
• Operating cash flow: €152 million in Q3 2025.
• Net financial debt: Increased to €1.2 billion from €453 million in Q3 2024.

Market Reaction

Acerinox’s stock price fell by 3% in pre-market trading, reflecting investor concerns over the company’s increased net financial debt and ongoing market challenges. The stock’s decline places it closer to its 52-week low of €8.3, compared to its 52-week high of €12.62. This movement aligns with broader market trends, where the stainless steel sector faces flat demand and increased import pressures in Europe.

Outlook & Guidance

Looking ahead, Acerinox anticipates a weaker performance in Q4 2025 due to seasonal factors but remains optimistic about a market recovery in 2026. The company is positive about new European Union trade measures, although the impact of the Carbon Border Adjustment Mechanism (CBAM) remains uncertain. Acerinox continues to focus on strategic investments, such as the expansion of its North American Stainless capacity and the integration of Haynes International.

Executive Commentary

• "A strong decarbonized steel sector is vital for the European Union’s competitiveness, economic security, and strategic autonomy," stated Ursula von der Leyen, European Commission President.
• Miguel Ferrandis Torres, Chief Corporate Officer, remarked, "We are sailing in troubled waters, this is clear, but we are taking advantage of the green shoots appearing."
• CEO Bernardo Velázquez Herreros commented, "In the short term, we are living in this uncertain market scenario, where the demand is still weak, has been weak for three consecutive years."

Risks and Challenges

• Continued weak demand for stainless steel in Europe and the United States.
• Increased import pressure in the European market, with imports of semi-finished products up 36%.
• Growing inventories in Europe, posing challenges for pricing and sales.
• Uncertainty surrounding the impact of new EU trade measures, including CBAM.
• High net financial debt, which could affect future investment and growth opportunities.

Q&A

During the earnings call, analysts inquired about the potential for European import quotas and tariffs, ongoing contract negotiations in the U.S. market, and challenges in the high-performance alloys sector. Executives also detailed strategies for managing working capital and costs, emphasizing the importance of the "Beyond Excellent" cost-saving plan and efforts to diversify production in South Africa.

Full transcript - Acerinox (ACX) Q3 2025:

Carlos, Moderator/Presenter, Acerinox: Good morning to you all, and welcome to Acerinox third quarter 2025 results presentation. As you well know, the geopolitical uncertainties, regional conflicts, and tariff wars continue to affect world markets. Consequently, the third quarter has been another challenging quarter. However, as a group, we have demonstrated our resilience in the light of the difficult market situation. As we will explain in this presentation, we continue to focus on working capital reduction and solid cash generation. During this call, we will hear from our CEO, Bernardo Velázquez Herreros, our Chief Corporate Officer, Miguel Ferrandis Torres, and also Esther Camós, our CFO, who will explain our third quarter results and provide outlook for Q4. Before we start the presentation, let me remind you that this conference call is being broadcast on our website, acerinox.com. Now I’ll hand you over to our CEO. Bernardo, please go ahead.

Bernardo Velázquez Herreros, CEO, Acerinox: Thank you, Carlos. Good morning, everyone, and thank you for attending this presentation. We have released this set of results in the lowest part of a long cycle that is basically defined by the geopolitical conflicts, tariffs, tariff negotiations, and uncertainty. If something can define this part of the cycle, it is uncertainty and confusion. How can you prepare a budget for next year? How can you organize your commercial strategy if you don’t know whether you will have tariffs with certain countries or not? You will be able to export or not? Everybody is just working on a daily basis, which is what we call from hand to mouth. From hand to mouth means that our customers are only buying when it’s strictly necessary for them to replace materials. In this situation, logically, the consumption is quiet and everything has been postponed.

The recovery that we expected has been postponed. We have no doubts that this recovery finally will come and that the new trade measures will help the even stronger recovery of Acerinox. We have new trade measures in the EU, or expect to have very soon new trade measures in the EU. We have the Section 232 and other tariffs in the United States, and we are also negotiating some tariffs in South Africa. In the meanwhile, we need to concentrate our efforts in the short term, and that means that we need to concentrate on cost-cutting and cash generation. With uncertainty and with the current situation, as everybody is preparing for the end of the year, quarter four cannot be much better.

It will be more or less the same rhythm as Q3, but with a shorter period because seasonality is very strong in the United States and in Germany, and finally, December is half a month. This is what we are releasing, this outlook that we expect Q4 to be lower than Q3, and it’s basically because of seasonality. Miguel.

Miguel Ferrandis Torres, Chief Corporate Officer, Acerinox: The main market highlights for 2025 clearly are driven by the uncertainty, as has been mentioned. We are a cyclical company, working in a cyclical business. We are in the low of the cycle, and most of the specialists are considering that probably we have reached the bottom, but we still are in the bottom of a cycle, so we must accept that. The demand has not recovered and is in the third consecutive year in the Western world of net recovery after such a strong correction that was experienced in the year 2023, in which both America, North America, and Europe corrected more than 20%. Still, we have not recovered that level, so still we are waiting, and the uncertainty is creating these unique circumstances that never in life, three years, three consecutive years with no recovery in the market.

As a consequence of that, obviously, there is a clear effect in prices, mostly in Europe as well as in Asia, and consequently, this is having also its effect with the slowdown in some of the Asian countries for moving more production into Europe, which clearly is not contributing. Our main advantage is clearly the diversification. Because of that, we try to explain it in a simple way in this slide, just showing where there are green shoots, we are in advantage. Clearly to take the most of these green shoots when appearing. We are sailing in troubled waters, this is clear, but we are taking advantage for the green shoots appearing, for example, in our main relevant market, which is the North American stainless steel. You can appreciate in these traffic lights that where there are more green shoots is in America. The inventories are below historical levels.

The imports have been going down. This is as a consequence of the probably commitment to the industry that is a driver of the American market. The administration, the American administration, always has been committed to the industry. The Buy American also is a clear characteristic that differentiates the American customers. We are taking advantage of that. The imports have been going down. In addition, we have new measures. The increases of the Section 232 obviously have been having its effect, and as a consequence, the prices in the states are having a positive evolution. This is clearly the market where we have appreciated a sooner improvement. In the high-performance alloys, this is bittersweet. It’s bitter because at the end, also, we are experiencing in this sector the. Absence of investment is characterized by the uncertainty.

All the relevant projects are being delayed, especially the chemical process industry is actually facing that, as well as oil and gas, in which these more or less relevant projects have been delayed. As a consequence of that, our European produced high-performance alloys are experiencing that the order book now is getting slower, but the strategy of diversification and moving to other sectors, which made our decision to invest in the States in Haynes and especially moving also to the aerospace, creates that now we are in a position of taking advantage of the better momentum that is coming from the aerospace industry. As a consequence of this, the recovery is coming. We have appreciated already the recovery in the long product nickel base. We are more based in the flat products, and this is now coming, and shells are coming because the supply chain is a bit different.

It looks that for 2026, clearly, this is a sector which is going to drive the profitability mostly of Haynes. This is the sweet part. Other sectors, like the industrial gas turbine, also are taking a good momentum, especially now driven by all the investment in data centers for artificial intelligence, as well as more or less all the necessary uses for all the hydrogen transition. This is the part that is positive and probably shall have a better momentum in the coming months and mostly in 2026. Where we are not seeing yet relevant green shoots is in the European stainless steel market, not in the conditions we have experienced up to now. Later on, Bernardo Velázquez Herreros explained the new reality.

Up to now, it could be considered that the increase in the upper demand of 10% is healthy, but clearly is not the case when it’s coming as a consequence of an increase in imports of 36%. The main effect of this, as I told before, still the Asian players are putting material in Europe, especially anticipating what could be the more commitment of the union to the industry. This is driving this increase in imports. 36% in the current market condition is huge. As a consequence of this, the inventories are growing, and the final effect is that still we have seen significant price pressures that have been characterizing the third quarter. This is more or less the global escape of what has been the situation up to now. Let’s analyze now what’s coming.

Bernardo Velázquez Herreros, CEO, Acerinox: For those of you following Acerinox for many years, you realize that it’s not new to listen to me speaking about trade measures. This time, finally, we can speak in a positive way. We are not claiming that we don’t have measures. We can say, and it’s the first time that we have the opportunity to disclose this to you, to explain this to you, that we are very close to have the protection that we were dreaming and asking for so many years. In March, after the tariffs or the new Section 232 in the United States, the European Commission released what was called the Steel and Metals Action Plan, in which we identified that most of our petitions were considered. Finally, on the 7th of October, the European Commission released these new trade measures still pending to be approved, but very, very positive.

I will read you some quotes just to see the importance of our industry. "A strong decarbonized steel sector is vital for the European Union’s competitiveness, economic security, and strategic autonomy." That was said by Ursula von der Leyen, President of the European Commission. "A strong future for Europe is impossible without a vibrant and resilient steel industry." That was said by Séjourné, Executive Vice President for Prosperity and Industrial Strategy. We have to be happy and we have to be positive because at the end, the European Union is moving. You know that this is a slow movement, but finally, they have accepted all our petitions, and we are moving in the right direction. These new measures will bring a more competitive and a healthier steel industry in Europe with a drastic reduction of quotas.

In the case of stainless steel, it can be at the level of 55% reduction in import market share. In steel in general, it’s at 47%. Materials above the quotas will have a 50% tariff, double than what we have today. Every anti-dumping, anti-subsidy, or anti-sink convention case will be added on top of these tariffs and will apply country by country without exemptions, and the quotas will not have a carryover to the next quarter. What is also important is melted and poured will be considered. Melted and poured, that is, the origin of the material will be the place where it has been melted and poured.

This is very important because we are suffering a sink convention, very rapid changes in the country of transforming the slabs or black coals coming from Indonesia or China, and we have been invaded by materials rerolled in Taiwan, in Vietnam, in Turkey, in other countries, and this new situation will stop this unfair competition. What is important now is that the EU will have to implement these measures as soon as possible. Still, we need the approval of the European Parliament. We think that we will succeed because there’s a strong support to these measures, and after that, the European Council will have to approve it. Generally, it’s very good news for the industry. It’s very good news, not for the next quarter, but it’s very good news because that would give us a level playing field.

We will compete with fair rules, with fair competition, and then we are sure that the situation in Europe will improve. On top of this, we have to add what can happen with the CBAM, the Carbon Border Adjustment Mechanism, that will start being implemented on the 1st of January, still with a lot of uncertainties, a lot of unclear rules, but will also prevent the lack of competitiveness of the European industry based on CO2 emissions, ambition, reduction, and some other measures. In general, I think that we have a better future. We are willing to receive the good news of having these new measures implemented. The safeguard measures will expire in summer 2026. We are pushing and trying to accelerate the process as much as we can.

Maybe it can be 1st of April, but as soon as possible because it’s urgent for the European industry to have this kind of measure in place. This is good news for our future. This is what we have been claiming for many, many years. You perfectly know that we have been always trying to ask and speaking with the European Commission to develop these kinds of measures, and finally, they listen to us, and we have succeeded, and we are happy to announce that that will be very good for the European stainless steel industry.

Miguel Ferrandis Torres, Chief Corporate Officer, Acerinox: If we move to the results, both of the third quarter as well as accumulated, in these circumstances and in these days of uncertainty, we are proud to be well understood. We are proud to be reliable as well as predictable. When we presented the second quarter results, we made an outlook for the third quarter that should be in line with that of the second quarter. We have been in line with that of the second quarter, slightly below, but obviously, when you put it in the equation, the depreciation of the dollar, which obviously is our most relevant currency, as well as the situation and the evolution of the prices in Europe, you understand that the results on this third quarter are clearly consistent.

Especially when you put them in the context of the results that other players in the industry are in these days presenting, it clearly demonstrates the success of the diversification and the strategy that we are facing in the last years. In addition, as a consequence of these weaknesses on the prices that we are announcing, we have made an inventory adjustment at the end of Q3 for €31 million, preparing ourselves clearly for the more or less realization of our stock, mostly in the fourth quarter and especially in Europe. On this basis, we are proud that at the end, if we analyze this €108 million EBITDA or the €321 million EBITDA of the nine months, at the end, we are in the bottom of the cycle. We are clearly obtaining the average profits and contribution that we are experiencing all during the whole last decade.

It clearly demonstrates that how we are now more resilient and we are able to keep this level of profitability. Also, in these days, it’s extremely relevant to put on value the cash flow generation. We have obtained an operating cash flow in the quarter of €152 million, which is almost €300 million, €299 million up to September. This is also one of the drivers. It’s clear that in the current circumstances, it’s difficult to increase profitability, but we are able to generate cash and cover our CapEx and our dividends with the cash that we are generating. This is also one of the main values and principles of the company, and we are clearly following that. In addition, what we have is this level of net financial debt at the end of the quarter of €1.2 billion.

When we compare, as appears in the chart, with that of the third quarter in 2024, it was €453 million. This brings, again, more or less what always has been our strategy, and we feel proud that we are able to invest in any part of the cycle and keep our strategy plan or even develop a strategy plan in any part of the cycle. Our financial strength allows us to do that. In these circumstances, in the current circumstances, we make such a relevant investment as the acquisition of Haynes. This is the main comparison with the net debt that we experienced one year ago, which fully makes sense. Clearly, our strategy goes there. At the end, this financial strength allows us that not only we are facing that, we are not experiencing any troubles regarding our leverage.

As you know, all our debt is covenant-free from every covenant related to profitability. For us, it’s obviously some KPI that follows our policy, but has no relevance in our debt. In addition, as always, we have had a high competitive debt that allows us that the finance charges are not killing in these days. The KPI of the debt to EBITDA this year obviously appears to be high, but this is something that clearly is as a consequence of the possibility of being able to make relevant investments even in the low part of the cycle. Low EBITDA and a relevant acquisition has this effect, but it shall be diluted gradually, and especially with the consistent and committed continuous cash flow generation.

Esther Camós, CFO, Acerinox: Going to the stainless division, I think there are several factors that are characterizing this quarter. Some of them have been presented along the presentation. First of all is seasonality in Europe. According to the collective bargaining agreement that we signed last year, we have closed production in Europe for 15 days in August. Second factor, I would say, is the weak demand. Weak demand has affected both Europe and the United States, but more significantly Europe. The third factor, I would say, is the input pressure, which has caused the prices to reduce even more in Europe. We are selling this quarter at the lowest prices in the year. On the positive side, we have the United States, which has a much better situation of prices despite the weak demand.

Also positive is the cash generation of €82 million in the quarter and €165 million, which is a demonstration of our projects of working capital reduction that we have been mentioning along the year. Going to the figures, the figures reflect exactly the factors that I’m mentioning. On one side, we have a 10% reduction comparing quarter over quarter in production. We have also an 8% reduction quarter over quarter in sales, which is lower than production because of the higher prices in the United States. The EBITDA is lower by €2 million. €2 million is exactly the effect that we have because of the depreciation of the U.S. dollar in this quarter. This is the effect that we have in the EBITDA. On the positive side, we have the increase of the margins.

We are increasing margins in this third quarter despite the lower sales, and margin is 8% instead of the 7% that we have in the second quarter. Going to HPA. In the HPA, due to our diversification to different sectors, we are being able to compensate the negative impacts experienced in sectors like oil and gas or chemicals, which our group VDM is more exposed to. We are compensating this with a gradual recovery of the aerospace that affects mostly Haynes. The EBITDA is lower by €2 million. We are achieving an EBITDA of €32 million and €103 million in the nine months, which is true that nine months is also contributed with Haynes this year. Again, the cash generation. We have an operating working cash flow of €70 million in the quarter, which is much better than the second quarter.

Most of it is coming by the reduction of inventories, and it’s €134 million going to the nine months. Capital allocation. We continue generating cash through our working capital reduction plans, which are resulting to be very successful, and we are proud of it. In the quarter, we are reducing our working capital by €85 million, and we have been able to generate an operating cash flow of €152 million. We have had stronger CapEx this quarter of €88 million, as we already announced. We already announced that we were making down payments in this quarter of some of the investments. For hands, the free cash flow is €64 million, and we have made the payment of dividends to our shareholders of €77 million, which in the end has made us to increase debt only by €21 million.

We are maintaining the debt despite the stronger CapEx and also despite the payment of dividends. Going to the nine months, which is also very significant, the cash generation through working capital, it is true that in the nine months, it’s partially impacted by the U.S. dollar depreciation, which you see also reflected in the bridge. It allows us to, the operating cash flow in these nine months has been of €299 million. We have had CapEx of €212 million, and the figure that I like the most is the free cash flow. Free cash flow achieved in these nine months has been €155 million, which is exactly the amount of dividends that we are paying, which means that our debt would have remained flat in these circumstances if it wouldn’t have been by the depreciation of the U.S.

dollar and the effect that it has in our cash in U.S. dollar. In this case, we have increased our debt in €123 million, which is exactly the effect that we had in the conversion to euros of our cash in U.S. dollars.

In this regard, we are able to keep on focus on our clear strategy. As you know well, our clear strategy, if we start from the top to the bottom, we are clearly making relevant investments on growth, especially where we have a warranty return. This means clearly, in the case of North American Stainless, as you know, we are increasing our capacity at 20%. The new equipment shall be in place from the next year. This is an investment that we are taking place for the last three years. In addition, also, as we have a warranty return, we are investing in increasing also production and efficiency in VDM by 15%.

In those areas where we actually are more exposed to the current circumstances of the market, which is Acerinox Europe and Columbus, we are also making a huge effort, not with so relevant investments, but at the end, we are making virtue out of necessity for transforming the business, for being prepared for the current circumstances, and especially for taking advantage of the market recovery when it comes. With not relevant investment, because still this return is not so guaranteed, that is not only depending from ourselves, but also from market conditions. In any case, we transform the business model of Acerinox Europe. This is already prepared and working, as well as Columbus has demonstrated its ability to become the most diversified steel plant in the world, making not only stainless steel as well as carbon steel, as well as now moving to the electrical steel.

In addition, it’s obviously prepared for processing high-performance alloys. This is more or less what we have been doing most in these two areas. In addition, going to the bottom, we are not only successfully integrating Haynes, our strategy of moving to this triple-A investment. We always mention America, alloys, aerospace. The integration is successfully more or less being done and accomplished. In addition, we have already precised the additional investments to take place in Haynes for the coming future, as has been mentioned. This has also been fixed. As a global consequence, but also keeping our driver of absolute control of the working capital, as well as continuous cash generation.

Bernardo Velázquez Herreros, CEO, Acerinox: Okay. Everything has been said. In the short term, we are living in this uncertain market, uncertain scenario, where the demand is still weak, has been weak for three consecutive years. If this is happening with stainless steel, it’s also happening with projects in oil and gas and in the chemical processing industry, because this lack of visibility moves to postpone investment, as has been mentioned. In the short term, it will be still weak. We’ll have a fourth quarter, basically the same rhythm as Q3, but with the seasonality that we mentioned. I’m very optimistic in the future.

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

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

Operator: Thank you. If you would like to ask a question, please press Star 1 on your telephone keypad. If you would like to withdraw your question, please press Star 2. Our first question is from Tristan Gresser at BNP Paribas Exane. Please go ahead.

Various Analysts, Analyst, Multiple (BNP Paribas, Morgan Stanley, Barclays, Deutsche Bank): Yes, hi. Thank you for taking my questions. I have two. The first one is on the U.S. market. If you can comment a little bit on the weakness you’re seeing, we’re seeing that cold roll production for the group is down 5% year on year. Does that reflect the demand decline you’re witnessing in the U.S. and any differences between flats and longs? If I’m not mistaken, you should see in Q4 a greater positive pricing impact. Will that be enough to offset the lower volumes?

Bernardo Velázquez Herreros, CEO, Acerinox: The situation in the United States is more or less the same as in Europe, of course, with a better price level. The situation in the market is more or less the same. In 2022, the demand went down by 5%. In 2023, it was minus 20%. It still is flat in 2024 and will be flat in 2025. The situation is more or less the same in both long and flat. We expect a recovery while the situation is more clear. Normally, in consumer goods materials, in the case of flat products, but we are also waiting for the reactivation of oil and gas that can help the long products, bars for drilling, and also can help all the infrastructure programs in the United States with our stainless steel rebars for bridges.

The situation is more or less the same, flat demand, but with a better level of prices and waiting for the recovery. In Q4, prices have been the consequence of what we announced at the end of the second quarter results. We announced a price increase. We have been negotiating with our customers a price increase, and we have been able to get this price increase in the customers on which we don’t have a longer-term agreement. In some cases, we have six-month contracts or we have quarterly contracts. We have been postponing these negotiations until the contract is finished. Q3 has been the result of this price increase. Q4 will be more or less the same, the same level. We expect a further recovery, a further increase in Q1 2026. Thank you, Tristan.

Various Analysts, Analyst, Multiple (BNP Paribas, Morgan Stanley, Barclays, Deutsche Bank): No, that’s very clear. Thank you. If you have that pretty severe seasonality into Q4, if I look at group EBITDA for Q4, does it mean it could be lower on a year-on-year basis?

Each time we are obviously more American driven. It’s North American Stainless. It’s hands also in the high-performance alloys in Europe. Normally, December is the slowdown. As a consequence of that, we announced it’s going to be lower, basically from the seasonality. In America, from Thanksgiving to Christmas, it’s very low activity. At the end, the fourth quarter is not a quarter of three months. Normally, in the United States, it’s substantially three, four weeks shorter. This is more or less what shall appear in our figures. This is obviously still too soon. We need to see more or less the evolution of the market. We need to see how effective and successful is our working capital reduction as planned, which shall be the effect, obviously, on the inventory adjustment.

We feel comfortable stating that the Q4 shall be lower, and we feel comfortable saying that mostly due to seasonal slowdown. I invite you to take your conclusions on your model.

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

Bernardo Velázquez Herreros, CEO, Acerinox: Yes. For sure that we are asking for semi-finished products to be—sorry, it’s not semi-finished products. Semi-finished products will not come to Europe because they’ll be affected by all the trade measures. What we expect is the message to be extended also to products where stainless steel has a lot of influence in the cost, means tubes, sinks, or this kind of products. Semi-finished will be included, will be covered by the quotas. Also, the Carbon Border Adjustment Mechanism (CBAM) will help to avoid circumvention.

Various Analysts, Analyst, Multiple (BNP Paribas, Morgan Stanley, Barclays, Deutsche Bank): Okay. All right. Very clear. I jump back into queue. Thank you.

Operator: Our next question is from Adahna Ekoku from Morgan Stanley. Please go ahead.

Hi, Morgan. Thank you for taking my questions. I’ve got two. First, just to follow up on the U.S. prices, could you give us a sense of how the contract negotiations are going for 2026, just given the kind of continued weak demand as well as the new volumes coming to market? You mentioned your expectations to be higher heading into Q1.

Bernardo Velázquez Herreros, CEO, Acerinox: Apologies, the line is very unclear, Adahna, so we weren’t able to get your question. If you could kindly try dialing back in, and then we can move on to you again. In that case, we’ll take the next question from Tom Zhang at Barclays Bank PLC. Please go ahead.

Maybe if I could understand.

Hi, can you guys hear my line? Is that okay?

If I could understand something in the previous call, it’s speaking about U.S. contract negotiations for 2026. We are busy in these negotiations today. There’s nothing that we can add. Normally, these negotiations happen earlier. Normally, it starts happening in July. Many years in October, we have already finished the negotiations. With the uncertainty and lack of visibility, everything is being postponed. We are now negotiating, and we expect that in November, December, we will close all these contracts. It’s difficult for our customers to predict volumes. In most of the cases in this previous forecast, we’re speaking about repeating volumes with 2026, but it’s no idea. That can change in months when the recovery starts or once the rules will be more clear.

Operator: Thank you. Sorry for the interruption. We’ll now move on to Tom Zhang at Barclays. Tom, please go ahead.

Various Analysts, Analyst, Multiple (BNP Paribas, Morgan Stanley, Barclays, Deutsche Bank): Great. Thank you. Thanks for taking the questions. First one for me. You mentioned in the presentation sort of inventories growing now in Europe, and I guess maybe that’s a little bit of pre-stocking ahead of measures. How much further do you think inventories can keep going in Europe? I guess I’m just trying to figure out how much more import pre-buying we could see in the next couple of quarters before measures come in and the market normalizes a little bit. That’s the first one. Thanks.

Bernardo Velázquez Herreros, CEO, Acerinox: Thank you, Tom. This is very difficult to predict, as Miguel mentioned. Some of the importers can think that it’s better to import now because next year will be more difficult. We have more protection, or it’s going to be difficult to predict what is going to be the effect of CBAM on the first of January, and if the new trade messages are going to be applied in April or in May, or when the safeguard message expires at the end of June. It is difficult to predict what’s going to happen. If I were an importer, if I were a distributor, of course, I would keep my stocks at reasonable levels, not high because everything can change. The volatility is very high. I don’t think personally that it’s a good time to increase the stock, but I cannot answer your question.

Various Analysts, Analyst, Multiple (BNP Paribas, Morgan Stanley, Barclays, Deutsche Bank): Okay. Fair enough. Could you just remind us about the kind of volumes that you send from South Africa? I think historically, that was a very export-driven plant. I know you’ve brought the export volumes down a lot in the last few years. I think the last we heard was it was about 50-50 between domestic and export shipments. I’m just wondering, does that flow get affected at all by the European trade measures if you send any material from South Africa into Europe?

Bernardo Velázquez Herreros, CEO, Acerinox: This is something that we predicted, and we have been working in South Africa and Columbus Stainless to change the situation because we always thought that in the future we will be more regional, and Columbus will not have the possibility to export big volumes to Europe or to any other region of the world. That’s why we are starting making mild steel in South Africa, and we are also prepared now to produce also electrical steel. We are concentrating Columbus in the local market. In the past, at the beginning, it was 70% export, 30% local. Now we are targeting to have more or less 60% local, 40% export. In that case, all the volumes exported to the European Union will be into the quota. We will not have to pay any extra tariff there because the material that will come to Europe will be included in the quota.

Various Analysts, Analyst, Multiple (BNP Paribas, Morgan Stanley, Barclays, Deutsche Bank): Okay. No change in terms of volumes going from South Africa into Europe. It’s already well below the new quota level. Maybe just final one for me. Around NAS volumes, I guess, with the capacity expansion, I think you guys previously talked about first coil meant to come out by the end of the year. Do you have any visibility on that and maybe any early targets on how long the ramp-up period will be, if any, for the NAS expansion? Thanks.

Bernardo Velázquez Herreros, CEO, Acerinox: The NAS expansion is going very well. We already installed the crane in the melting shop, but still we don’t have this capacity increase because we are repairing or revamping one of the other existing cranes. Everything is ready. Hot rolling mill is also ready. We will produce the first coil in the cold rolling mill at the end of January. The ramp-up will depend basically on the revamping of our AP number two, that is the annealing and pickling line that we are modifying to absorb the increase of capacity. That will be ready also first of January or early January, and the ramp-up can take three or four months. We will be ready for the recovery of the American market.

Various Analysts, Analyst, Multiple (BNP Paribas, Morgan Stanley, Barclays, Deutsche Bank): Okay. Very clear. Thanks very much. Our next question is from Bastian Synagowitz at Deutsche Bank AG. Please go ahead.

Good morning, all, and thanks for taking my questions. Hopefully, the line is okay here. Maybe firstly on Americas, can I briefly ask, is the softness in the U.S., which you’re seeing here in the fourth quarter, any more than the usual seasonality? Is this really very much in line with what you’re usually seeing, or is there anything more in it? That’s my first question.

Bernardo Velázquez Herreros, CEO, Acerinox: No, no. It’s more or less, as I mentioned before, it’s the same, more or less the same consumption rhythm that they have had in the second quarter and quarter three. We’re more or less the same. There’s not additional weakness in the market. It’s just seasonality.

Various Analysts, Analyst, Multiple (BNP Paribas, Morgan Stanley, Barclays, Deutsche Bank): Okay. Thank you. Maybe moving over to the HPA business, I guess the third quarter was actually pretty stable, but you still obviously seem to see a lot of softness in energy and also chemicals, as you’re saying, mostly in the former VDM business. Do you think that we have already seen the trough here in HPA and the contribution? Should we sort of, would you be comfortable to say that we’ll stay pretty close to these levels and then rebound from here? Is there any color you could give us, any conviction?

Secondly, on your investment strategy here, where you have a reasonably big pipeline for investments, are you confident that these investments still all make sense, or have you taken at least any action to pace those down and maybe adjust for the current market, also in the context of your net debt to EBITDA obviously hitting around 3 times? You clearly have a lot of comfort on that, and I think you expressed that, but are you still pacing down the CapEx side here? That’s my question.

Miguel Ferrandis Torres, Chief Corporate Officer, Acerinox: Thank you. Bastian, regarding the HPA, I think it’s differentiated, obviously by the areas, as we told before. The weakness of the chemical process industry, the maturity and the lead times for this sector, as well as on the oil and gas, are also driving lower order book than normal in the current days. We clearly assume that the best semester of next year for these sectors is not going to be relevant. More or less what we also consider now, and this is obviously the consequence of our strategy, is that the improvement in the aerospace could compensate. Obviously, when we talk about the aerospace, it shall be more reflected in the United States through Haynes, should compensate this weakness that we are going to experience in the chemical process mostly and in the oil and gas.

In the oil and gas, there are some volumes more related to maintenance, but not for new projects. This is obviously for Haynes as well as for North American Stainless, for example, for all the drilling. This end-use still is not there. In maintenance, there are some issues, but still clearly we must take in mind that VDM is mostly covering, and two-thirds of its production covering both areas. The other areas, the automotive, show certain improvements. The electronics remains there. In the case of Haynes, we shall experience the growth and the clear recovery of the aerospace industry. The gas turbine generation, also as was expressed, is also doing well. Our understanding is on the global picture for next year, we think that probably shall be more or less compensated, the correction or the effect in a global year of this weakness with the other strength.

Probably in the first semester, especially for oil and gas and chemical process industry, we do not see now any recovery. If it comes, it should be more in the second semester. Regarding the investments, we are long-term driven. This sector is huge in investments, and it’s not for thinking on a short-term basis. The investment plan in Haynes and especially the areas where it’s focused, as well as also what we are investing in North American Stainless for process HPA, takes full sense. It’s a growing sector, and also the main driver of the synergies and the future synergies is coming from that. It’s not more or less any type of questioning of the timing of the investments, as also the same circumstances take place in VDM. There are investments for increasing not only.

Volume, but it’s mostly for increasing efficiency, as well as for avoiding dependence from three players and having the possibility of making the whole process as much as possible internally. This is clearly the efficient also is coming through that. It takes sense. As I said, we are obviously following our debt carefully and making the best in cash generation, but we should not reconsider these investments as they are because of the current level of debt. As I told before, we are clearly investing on growth where we have a warranty return, and in these cases, it’s evident.

Various Analysts, Analyst, Multiple (BNP Paribas, Morgan Stanley, Barclays, Deutsche Bank): Okay. Perfect. Thanks, Miguel. Our next question is from Maxime Kogge at ODDO BHF Corporate & Markets. Please go ahead.

Good morning. The first question is a follow-up on three stands one. On semis, I think actually you are yourself sourcing some semis on the market, and that’s quite recent, especially from Indonesia. What has led you actually to adopt this strategy recently? Could you go further in that direction? Would there be a case for Europe actually to really focus on the hot rolling or even just cold rolling mill and source its slabs externally, given that Europe’s production is bound to remain quite uncompetitive compared to some other regions in the world, at least in the hot phase?

Bernardo Velázquez Herreros, CEO, Acerinox: As we mentioned before, we are suffering from unfair competition, especially for materials that have been melted in Indonesia and rolled in other countries and entering in Europe with other origins than Indonesian. That’s making not only in stainless steel, also in carbon steel, the industry unsustainable. We cannot live in these conditions. The European steel industry is in real danger, and that’s why the Commission is now placing this set of measures that are going to be very important for us. Still, we don’t have these measures. We have to do something. That’s why many players started to bring slabs from Indonesia. We have to do two things. We defend the European industry, but then we close our melting shops, and we start bringing material from Indonesia. In our case, we only have made one trial. It’s not a significant volume.

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

You know that very recently, production of ferrochrome in South Africa was suspended because of the high electricity price, basically because of high electricity price. The ferrochrome producers were asking for better conditions because otherwise they are exporting. Instead of producing in the country, they are exporting the chrome ore to China. China, with South African chrome ore, has become the biggest ferrochrome producer in the world. They have around 56% or 60% of the world production. That is why, because South Africa in the last years has lost competitiveness. Now the situation is better in terms of availability of electricity. There are some negotiations between the ferrochrome producers, we are included in these negotiations, and the government, asking for better electricity price for the electro-intensive industries, as well as an export tax or export duty for the exports of chrome ore that are damaging the competitiveness of the country.

Having said this, we still have access to cheap chrome compared with the rest of the world. We can use it, as we have mentioned many times, in liquid form. We can use liquid ferrochrome because we have a ferrochrome smelter just as a neighbor company, less than one kilometer away from our plant. This is a significant advantage because we don’t need electricity to melt this ferrochrome because it’s already liquid. We also save a lot of money in refractories and in electrodes. Still very competitive. Basically, most of the materials that we are exporting to Europe from South Africa are ferritics, because it’s our speciality and because we are more competitive.

Okay. Thank you for the comprehensive insight. I’ll jump back to the queue.

Carlos, Moderator/Presenter, Acerinox: Our next question is from Inigo Escaziza from Kepler. Please go ahead.

Good morning. Thank you for taking my question. Good morning, Bernardo, Miguel, Esteban, Carlos. I have four questions, if I may. The first one would be on the European Union’s safeguard measures. Fernando, can you share with us what are your expectations in terms of calendaring implementation? I think you have mentioned April, May, but maybe we have to wait until June. If you can share with us what could be a potential calendar, I know it’s tough. This is the first question. The second question would be on Haynes International integration. If you can also elaborate and share with us how is the integration going, how are the synergies, the number that you increased, how are things going on this front. The third one would be on stainless steel. If you can also elaborate a bit, how is the profitability of the U.S. versus Europe?

I guess Europe is, again, making losses, but I don’t know if they are bigger or smaller than a year ago. What could be the implications of the new European Union safeguard measures for the European business profitability? Can we expect this facility to reach break-even if the new safeguard measures are implemented, to reach break-even by 2026? The final one, I’m sorry for being long, on the U.S.-based prices that you have mentioned, if you can quantify a bit, how large has been the base price increase that you implemented during the summer of 2025? Thank you. Gracias.

Bernardo Velázquez Herreros, CEO, Acerinox: Thank you, Inigo. I cannot answer the first question because it’s not in our hands. The existing safe measures will expire the 30th of June. Apparently, if we are moving fast in this sense, it’s because we need to finish the process. All the European processes are long, safe, but long, and have to be ready at the end of June. Of course, everybody is aware of the emergency that we have in the end of these measures, and everybody, including the European Commission, is making their best to accelerate the process. This is nothing that I can add. I have read that it could be 1st of April, but we don’t have any information on this. We cannot control this process.

Miguel Ferrandis Torres, Chief Corporate Officer, Acerinox: Regarding the Haynes integration, we are there. We are satisfied. There has been a huge effort. The integration at the end is more or less with participation of relevant people, not only at VDM, also at North American Stainless, also at three North American Stainless headquarters. It is a global team who is accelerating the process of the integration. We are really satisfied with how things are moving on. Regarding the synergies, the estimation of the synergies, obviously we are in the year of the start of the process. The synergies fixed for this first year were €11 million, and we are there. We have accomplished what has been the analysis for the first stage, assuming that the synergies should gradually be increasing year after year. Those for the first year, already we are there, and we are very comfortable with that.

Esther Camós, CFO, Acerinox: Regarding stainless and the contribution of Europe, we are following our strategy in Europe, which is resulting to be positive. All the KPIs that we are measuring, comparing, going higher value-added, going end customers versus distributors and so on, everything is making us trust on that strategy that we are following. The problem in Europe is being, as said, is first of all, demand, and second, import pressure in prices. These low levels in prices, I think, are affecting all the industry. We are positive in the future. We are positive with the measures because we think that those measures, we cannot predict what is going to happen with the prices. We expect that with these measures in place, the market will be able to increase prices, and that definitely will help in our strategy. The contribution compared to last year is being better.

It’s a reflection of that all our measures are going in the good direction, but still suffering from these price levels and demand.

Bernardo Velázquez Herreros, CEO, Acerinox: Inigo, when we are speaking about prices, normally we are speaking about the prices that are published in several magazines. Because we cannot speak about prices, we are very sensitive to this. As I mentioned, everybody is speaking that the prices in Europe today are very low. They are around €100 per ton below the average of this cycle and probably below €300 per ton below the average of the previous cycle. We are not speaking about our prices. In the case of the United States, it’s exactly the same. We are negotiating customer by customer, product by product. Everybody has a different price, and this is something that we cannot disclose. We announced that we are increasing prices, but this is not an official tariff. We are not publishing official tariffs and say, "This product will have this price for every customer," or whatever.

This is negotiations, and it will depend on everything: the situation of the customers, the situation of our plant, the needs to have more or less orders in several products. That depends very much. We cannot disclose our pricing situation very much.

Okay, thank you, Bernardo. Gracias.

Carlos, Moderator/Presenter, Acerinox: Our next question is from Tommaso Castello at Jefferies. Please go ahead.

Tommaso Castello, Analyst, Jefferies: Yes. Good morning, and thanks for the presentation. Is the line clear? Can you hear me?

Miguel Ferrandis Torres, Chief Corporate Officer, Acerinox: Yes.

Tommaso Castello, Analyst, Jefferies: Okay. Thank you. I have one last question, and thanks for taking it. You have highlighted cutting costs and cash generation through the management of working capital as key priorities for year-end. Given the ongoing market uncertainty, do you anticipate further opportunities to release working capital in Q4? If you could remind us of your cost-cutting initiatives to date and if there is any target number and date there. Thank you.

Miguel Ferrandis Torres, Chief Corporate Officer, Acerinox: We are pushing hard in terms of making the best of the working capital in Q4, and this is a clear guideline that every division of the business is actually focusing on. This has been recurrently re-stated from the headquarters, and all the group is committed. In this regard, we understand that this is going to be a strong and relevant effect coming in Q4. You also can see that one of the Q3, for example, was substantially higher than Q2. In this regard, we are clearly focused. I started introducing it previously. With the cash generated up to now, we have covered the relevant CapEx up to now, but also the dividend for the whole year. There is no cash out coming for dividend payment in the fourth quarter, but it’s a strong tax cash out that also is going to take part.

On that basis, we consider that we shall reduce probably the net debt. A lot of the cash generated through the reduction of working capital also shall be for paying taxes. On that basis, it’s not going to be, even though we make our best and we are successful in the discipline of reduced working capital, we are not going to make or experience a huge reduction in the debt because of that. The taxes to be paid in the fourth quarter, according to the circumstances on the areas where we are profitable, are clearly there. Regarding the other plan, we have no clear public number of the cost reduction plan that we are involved, but also the plans remain in place, and we are healthy there. Obviously, as much as productivity is higher, as much as they are better appreciated.

Sometimes, even though we make a huge effort for reduced costs and that can increase our profitability in the current level of prices, not always it’s so appreciated in the final P&L because at the end, as has been previously stated, the magazines are reporting base prices now in these days of around €450. I remember in the old days we considered that it was not possible for the industry to be profitable below €900 or €950. Then we developed for be profitable at levels of €700. Now we see this level of prices. Still, the cost savings that we can obtain that are significant in our business and for our controls and benchmarks, but has less visibility when the market is so poor.

Bernardo Velázquez Herreros, CEO, Acerinox: Anyway, remember that sometimes we have mentioned that with the volatility of the cycles in the last decade, we have learned to run our plans like the cars. We have the eco mode, and we have the sport mode. When we

Carlos, Moderator/Presenter, Acerinox: We go to export, and we try to focus on productivity. Where we are in the low part of the cycle, we are not fully at full capacity, and then we go to the eco way. I mean, trying to focus on cost. This is what we are doing now: trying to be effective and very efficient in all the production, trying to save in everything, in electricity, trying to save in refractories, all the consumables. Trying not to make extra hours, trying to take holidays when it is possible, and also focusing on our excellent program, our Beyond Excellent plan. That is succeeding. We published the numbers in quarter two for the first half of the year, and it’s moving very well. We are focused on all these projects that will help us to improve our profit and loss account.

Bernardo Velázquez Herreros, CEO, Acerinox: That’s clear. Thank you very much. All the best and good luck.

Miguel Ferrandis Torres, Chief Corporate Officer, Acerinox: Tommaso, regarding this Beyond Excellent plan, as Bernardo mentioned, we publish twice a year in H1 and full year results. In H1, the target for the year is €45 million, and in H1 we achieved €23 million. We are going on track, and we expect to be very close to this target by the year-end.

Bernardo Velázquez Herreros, CEO, Acerinox: Thanks again. Have a nice day.

Esther Camós, CFO, Acerinox: Our next question is from Dominic O’Kane, JPMorgan Chase & Co. Please go ahead.

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

Carlos, Moderator/Presenter, Acerinox: No, the guidance is only including what can be considered adjusted EBITDA.

Bernardo Velázquez Herreros, CEO, Acerinox: Okay, thank you.

Esther Camós, CFO, Acerinox: At this time, we currently have no further questions in the queue.

Miguel Ferrandis Torres, Chief Corporate Officer, Acerinox: Okay. Thank you. We have two questions from the webcast. The first one is coming from Adahna, from Morgan Stanley, and it’s as follows. On high-performance alloys, conditions for VDM continue to be weak, which is getting partly offset by Haynes. Can you help us with a split of how these two businesses are doing, or maybe how much lower VDM is tracking relative to its normalized EBITDA, which I think you previously said is around €120 million?

Bernardo Velázquez Herreros, CEO, Acerinox: I think we already have explained that. Obviously, it still is a bit early. It shall depend on circumstances, and it still is too early for considering what may take place in 2026. We already have indicated that the order book appeared to be weak for the first half, but let’s see what comes later. On the other side, the recovery in the aerospace industry is coming. We understand that this shall compensate, but it still is too early to make any commitment in which shall be the profit contribution for that division. We shall have more visibility probably the year or when we make the year-end results presentation in February. It still is too soon.

Miguel Ferrandis Torres, Chief Corporate Officer, Acerinox: Thank you, Miguel. The last question is coming from Marisa Hernandez from Times Square. What are your expectations for CBAM impact on stainless prices in Europe?

Carlos, Moderator/Presenter, Acerinox: Very difficult question. We still don’t know what the rules are of CBAM. We know the rules, but we still miss some information that is going to be necessary for this. Because still, we don’t know what is going to be the benchmark for the industry. We cannot compare prices or different CO2 emissions between importers and this benchmark. There are some uncertainties in the formula. There is nothing that I can add here. I also cannot give you information from consultant companies or whatever because the range is so big that some people are speaking about €100, some people are speaking about €500. This is not the price increase. This could be the effect for importers. There is no visibility on this. I cannot help you.

Miguel Ferrandis Torres, Chief Corporate Officer, Acerinox: Okay. Thank you. That concludes today’s conference call. Thank you very much for all your questions and for joining us today. Have a good day.

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