Acerinox S A : Q1 2024 Results Presentation

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Q1 2024

Results Presentation

Q1 2024 RESULTS PRESENTATION

2

Disclaimer

This document may contain forward looking information and statements about ACERINOX, S.A., its subsidiaries and/or its management, including but not limited to financial projections and estimates and their underlying assumptions, and statements regarding the intent, belief or current expectations or forecasts of ACERINOX, S.A. and/or its management, as well as statements regarding future performance, plans, objectives, operations, business, strategy, capital expenditures, results of operations, markets and products.

This communication also includes certain disclosures which contain "forward-looking statements". These forward-looking statements generally include statements related to the proposed transaction, including financial estimates and statements as to the expected timing, completion and effects of the proposed transaction. These forward looking statements also include financial projections and estimates and their underlying assumptions, and statements regarding the intent, belief or current expectations or forecasts of ACERINOX, S.A. and/or its management, as well as statements regarding future performance, plans, objectives, operations, business, strategy, capital expenditures, results of operations, markets and products. In most cases, words or phrases such as "anticipates," "believes," "confident," "could," "estimates," "expects," "intends," "target," "potential," "may," "will," "might," "plans," "path," "should," "approximately," "our planning assumptions," "forecast", "outlook" and variations or the negative of these terms and similar expressions identify forward-looking statements. These forward-looking statements, including statements regarding the proposed transaction and financial projections and estimates, are based largely on information currently available to ACERINOX's management and ACERINOX's management's current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results to differ materially from historical results or those expressed or implied by such forward-looking statements. These forward looking statements or forecasts may also include assumptions regarding future economic and other conditions, such as future nickel or chrome prices and, in general, are subject to risks, uncertainties and variables beyond ACERINOX's control that can adversely affect them. Although ACERINOX, S.A. believes its expectations are based on reasonable estimates and assumptions, they are not guarantees of performance, prices, results of operations, benefits or dividend payout policies. There is no assurance that ACERINOX's expectations will occur or that our estimates or assumptions will be correct, and ACERINOX, S.A. cautions investors and all others not to place undue reliance on such forward-looking statements.

Important factors, risks and uncertainties that could cause actual results to differ materially from such plans, estimates or expectations include but are not limited to: (i) the completion of the proposed transaction on the anticipated terms and timing, including obtaining required shareholder and regulatory approvals, and the satisfaction of other conditions to the completion of the proposed transaction; (ii) the risk that disruptions from the proposed transaction (including the ability of certain customers to terminate or amend contracts upon a change of control) can harm the business of the parties involved, including current plans and operations, including during the pendency of the proposed transaction;

1. potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed transaction; (iv) unpredictability and severity of catastrophic events, including but not limited to acts of terrorism, outbreaks of war or hostilities or the COVID-19 pandemic, as well as management's response to any of the aforementioned factors; (v) the possibility that the proposed transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (vi) the occurrence of any event, change or other circumstance that could give rise to the termination of the proposed transaction; and (vii) those risks and uncertainties set forth in ACERINOX's most recent annual report, as such risk factors may be amended, supplemented or superseded from time to time by other reports filed by ACERINOX, S.A. with the Spanish National Securities Market Commission (the "CNMV") from time to time, which are available via the CNMV's website at https://www.cnmv.es.

These risks, as well as other risks associated with the proposed transaction, will be more fully discussed in the proxy statement that will be filed with the SEC in connection with the proposed transaction. There can be no assurance that the proposed transaction will be completed, or if it is completed, that it will close within the anticipated time period. These factors should not be construed as exhaustive and should be read in conjunction with the other forward-looking statements. The forward-looking statements relate only to events as of the date on which the statements are made. Except as required by applicable law, ACERINOX, S.A. does not undertake any obligation to publicly update or revise any forward looking statements and information, even in the event of new information being published or new events occurring. If one or more of these or other risks or uncertainties materialize, or if ACERINOX's underlying assumptions prove to be incorrect, ACERINOX's actual results may vary materially from what ACERINOX may have expressed or implied by these forward-looking statements. ACERINOX cautions that you should not place undue reliance on any of its forward-looking statements. All subsequent oral or written forward looking statements or information attributable to ACERINOX, S.A. or any of its members, directors, officers, employees or any persons acting on its behalf are expressly qualified in their entirety by this cautionary statement. You should specifically consider the factors identified in this communication that could cause actual results to differ. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for ACERINOX to predict those events or how they may affect ACERINOX.

No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. None of ACERINOX or any of its affiliates, advisors or representatives shall have any liability whatsoever for any loss arising from any use of this document, or its contents, or otherwise arising in connection with this document. Moreover, this document nor any part of it constitutes a contract, nor may it be used for incorporation into or interpretation of any contract or other type or agreement.

The points contained in this disclaimer must be taken fully into account by all persons or entities obliged to take decisions or to draw up or to publish opinions on securities issued by ACERINOX, S.A., in particular, by the analysts and investors reading this document. All the aforesaid persons are invited to consult the public documentation and information that ACERINOX, S.A. reports to or files with the bodies responsible for supervising the main securities market and, in particular, with the CNMV.

Q1 2024 RESULTS PRESENTATION	3
Q1 2024 at a glance

Satisfactory Q1 EBITDA of €111 million,

despite challenging conditions

Strong cash generation of €188 million,

supported by inventory reduction

Net debt at €234 million, 31% lower than that of Q4 2023

Outlook: We expect Q2 EBITDA to be slightly higher than in Q1

ACERINOX 2020 RESULTS PRESENTATION

Q1 2024 RESULTS PRESENTATION

Contribution to circular economy and sustainable development

4

2030 sustainability targets

360º Positive Impact Plan

Eco-efficiency

and

climate change

mitigation

GHG emissions (Scopes 1 & 2): 8%

reduction [2030 target: 20% intensity reduction from 2015 baseline]

Water withdrawal: 40% reduction

[2030 target: 20% intensity reduction from

2015 baseline]

Energy(*): 3% increase [2030 target: 7.5 % intensity reduction from 2015 baseline]

Engaged team,

culture, diversity,

and safety

Safety: 3% reduction from FY 2023

[target: 26% YoY reduction in TIR]

Diversity: 13.5% women [2030 target: women account for 15% of workforce]

Most significant

sustainability initiatives

in Q1 2024

Eco-efficiency and	●	Electrification: gas boilers, mobility
climate change
mitigation	●	devices, etc.
	Increased renewable electricity use
Circular economy and	●	Analyzed new applications of
sustainable products		neutralization sludge
Committed team,	●	Management by objectives (MBO)
culture, diversity,

Circular economy and
sustainable products	Recycling
	100% of:
	Grinders / Oily paper / Oil
	(decantation, flame-retardant
Waste reduction: 83% valorization	and hydraulic) / Process scrap
& metal recovered / Machined
[2030 target: 90% valorization]
electrodes /
	Paper / Plastic /
	Cardboard / Others

and safety	●	Implemented EHS tool for incident
	reporting
Supply chain and	●	ESG supplier risk procedure
impact in the	●	Provided accommodations for
community		refugees
Ethical, responsible,	●	Updated Compliance Policy
and transparent
governance

(*) Low capacity utilization impacted this KPI

Q1 2024 RESULTS PRESENTATION

Q1 2024: Market Highlights

USA

EUROPE

Sources: CRU, LME.

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STAINLESS STEEL

Apparent demand of flat products up 8% in 2024 through February Inventories below historical average

Imports of flat products market share: 25% in 2024 through February

Apparent demand of flat products down 4% through February

Inventories remain below historical average

Imports of flat products market share: 15% in February

Strikes in Acerinox Europa and Finland

Prices increased during Q1 but remain at low levels

HIGH-PERFORMANCE ALLOYS (HPAs)

HPA market driven by strong demand

Oil and gas (O&G) and aerospace markets in a solid situation with high order books

Demand in chemical process industry (CPI) market led by the hydrogen sector

Electronics and electrical engineering (E&E) market is coming back after

low demand last year.

favorable

challenging

Q1 2024 RESULTS PRESENTATION

Q1 2024: Consolidated group highlights				6
							Q1	Q1	% Q1 24 /	Q4	% Q1 24 /
							2024		2023	Q1 23	2023	Q4 23
						Melting production	461		534	-14%	486	-5%
						(thousands of metric tons)
			Q1 2024 EBITDA:	Net sales	1,481		1,782	-17%	1,529	-3%
EBITDA	111		226	-51%	96	15%
			€111 million
						EBITDA margin	7%		13%		6%
			Strong cash generation:	* Adjusted EBIT	71		182	-61%	52*	37%
Adjusted EBIT
			€188 million	5%		10%		3%
			margin
						EBIT	71		182	-61%	-105	-
			NFD of €234 million	EBIT margin	5%		10%		-7%
Results before taxes	71		179	-60%	-111	-
						and minorities
						Results after taxes	53		136	-61%	-119	-
						and minorities
			Adjusted LTM ROCE: 15%
Operating cash flow	188		-19	-	260	-28%
						(before investments)
						Net financial debt	234		605	-61%	341	-31%

* Adjusted EBIT: Stripping out €156 million of Bahru Stainless impairment in Q4 2023

Q1 2024 RESULTS PRESENTATION

Q1 2024: Stainless steel highlights

Million EUR	Q1	Q1	% Q1 24	Q4	% Q1 24
	2024	2023	/ Q1 23	2023	/ Q4 23
Melting production	440	515	-15%	468	-6%
(thousands of metric tons)
Net sales	1,109	1,476	-25%	1,166	-5%
EBITDA	80	197	-59%	50	59%
EBITDA margin	7%	13%		4%
Amortization and depreciation	-32	-35	-8%	-35	-8%
* Adjusted EBIT	49	161	-70%	15*	219%
Adjusted EBIT margin	4%	11%		1%
EBIT	49	161	-70%	-141	-
EBIT margin	4%	11%		-12%
Operating cash flow	112	113	-1%	179	-37%
(before investments)

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Q1 results impacted

by the strike at Acerinox Europa

Q1 EBITDA:€80 million

Acerinox Europa: €-31 million

Q1 operating cash flow:

€112 million

Efficient

working capital

management

* Adjusted EBIT: Stripping out €156 million of Bahru Stainless impairment in Q4 2023

Q1 2024 RESULTS PRESENTATION

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Q1 2024: High-performance-alloys highlights

Q1 EBITDA:

€31 million

Operating working capital

decreased by €52 million

Operating cash flow:

€76 million

Million EUR	Q1	Q1	% Q1 24 /	Q4	% Q1 24 /
	2024	2023	Q1 23	2023	Q4 23
Melting production	21	19	9%	18	14%
(thousands of metric tons)
Net sales	378	305	24%	366	3%
EBITDA	31	29	7%	46	-33%
EBITDA margin	8%	9%		13%
Amortization and depreciation	-7	-6	12%	-6	-10%
EBIT	25	23	8%	40	-38%
EBIT margin	7%	8%		11%
Operating cash flow
76	-132	-	81	-6%
(before investments)

Q1 2024 RESULTS PRESENTATION

Q1 2024: Capital allocation

Q1 Million EUR

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Q1 Highlights

Solid operating cash flow (OCF):

€188 million

Dividend payment in Q1:

€77 million

Strong debt reduction:

€107 million

Q1 2024 RESULTS PRESENTATION

Acerinox strategy: A new platform in the USA

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✓ USA antitrust: Approved

✓ Haynes special shareholders' meeting: Approved

Other regulatory approval: Pending

1	Strengthening leadership	Deal expected to close: Q3 2024
	in Alloys

Strengthening leadership

in America

Strengthening our

position in Aerospace

ACERINOX 2020 RESULTS PRESENTATION