Financial Data and Key Metrics Changes - Adjusted EBITDA for 2025 was $256.7 million, with a margin of 13.7%, marking a new high for Koppers [5][6] - Operating profit reached $167.8 million, and adjusted earnings per share were $4.07, the sixth consecutive year above $4 [6] - Operating cash flow was $122.5 million, maintaining over $100 million for the seventh straight year [6] - Capital expenditures were normalized to $55 million, with $38.2 million allocated for share repurchases and $6.4 million for dividends [6][21] Business Line Data and Key Metrics Changes - RUPS sales for 2025 totaled $927 million, a 2% decrease from the previous year; PC sales were $544 million, down 17%; CMMC sales were $409 million, down 18% [14][16] - Adjusted EBITDA for RUPS was $108 million with a 12% margin, PC delivered $103 million with a 19% margin, and CMMC reported $46 million with an 11% margin [16] - Fourth quarter sales for RUPS were $209 million, down from $216 million; PC sales were $128 million, down from $148 million; CMMC sales were $96 million, down from $114 million [14][18][19] Market Data and Key Metrics Changes - Market sentiment for Performance Chemicals is neutral to slightly positive for 2026, with expectations of flat market demand [26] - Existing home sales in 2025 were flat compared to 2024, with a disappointing 8% month-over-month decline in January 2026 [27] - The utility and industrial products market sentiment remains bullish due to increasing electrical demand related to AI infrastructure and other sectors [30][31] Company Strategy and Development Direction - The company launched a transformation process named Catalyst, which delivered $46 million in benefits during 2025 and aims for double-digit adjusted EPS growth over the next three years [7][8] - The company is focusing on growing its share of the PC and RUPS segments to 85% of total sales, which would also reflect in EBITDA contributions [65][66] - Koppers is actively evaluating its business portfolio for potential divestitures or consolidations to improve overall performance [80] Management's Comments on Operating Environment and Future Outlook - Management noted that the recent Supreme Court ruling on tariffs could positively impact the business, although uncertainty remains regarding future tariffs [24][25] - The company expects a top-line increase of approximately 11% in 2026 for Performance Chemicals, driven by market share expansion [26] - Management anticipates challenges in the railroad products and services business due to reduced capital spending by customers and ongoing market consolidation [34] Other Important Information - Koppers was recognized in Newsweek's listing of America's Most Responsible Companies for the sixth consecutive year, reflecting its commitment to sustainability [10] - The board declared a quarterly cash dividend of $0.09 per share, a 13% increase from 2025 [22][23] Q&A Session Summary Question: Market share recovery in Performance Chemicals - Management acknowledged a market share hit in 2025 but indicated success in recapturing some business in 2026, primarily from existing customers [52][53][57] Question: Catalyst benefits in 2026 - Management targets Catalyst benefits of $20 million to $40 million in 2026, primarily impacting COGS [58][96] Question: Rationale for retaining CMMC business - Management explained that CMMC is a significant component of the supply chain, and while divestiture is considered, it presents complexities [68][79] Question: Increase in depreciation and amortization (DNA) - Management noted that the increase in DNA is due to timing related to capital projects and asset retirement obligations, with expectations for a decrease in 2026 [86][94] Question: Margin improvement sustainability in Performance Chemicals - Management expressed optimism about maintaining improved margins but noted that fluctuations are expected due to various market factors [108]

Core Insights - The company experienced a significant improvement in customer activity starting in August, leading to a notable increase in net sales to 7.8 MSEK in Q3 from 4.6 MSEK in Q2 [3] - The uncertainty surrounding potential tariffs had a detrimental effect on the industry, causing delays in procurement cycles and tender awards during the first half of the year [4] - A positive trend in order intake has been observed since August, indicating stronger performance in the second half of 2025 compared to the first half [5] Financial Performance - For Q3, net sales amounted to 7,765 KSEK, an increase from 3,392 KSEK in the previous year [8] - EBITDA for Q3 was -4,283 KSEK, an improvement from -6,657 KSEK in the same quarter last year [8] - Cash flow from operating activities in Q3 was -7,783 KSEK, compared to -3,623 KSEK in the previous year [8] Operational Developments - The company has completed its recruitment for the year, doubling its sales organization from four to eight members, which is expected to enhance lead generation and partner onboarding [6] - In-house production commenced in Lund, successfully manufacturing the first five instruments, contributing to improved product quality and cost efficiency [7] - The establishment of local assembly capabilities in key markets is anticipated to provide strategic advantages in the future [7] Market Outlook - With a fully staffed organization and operational capabilities in place, the company is positioned for renewed and sustainable growth, entering the final quarter of the year with strong momentum [8] - The normalization of the market since August is expected to lead to increased tender issuance and improved order intake [5]