Financial Data and Key Metrics Changes - Total shipments in Q4 2025 were 3.8 million tons, slightly lower than Q3 due to seasonal impacts, with expectations for Q1 2026 to improve back to 4 million tons [15] - Q4 price realization was $993 per net ton, down by approximately $40 per net ton, but a substantial improvement in realized prices is expected starting in Q1 2026, with an anticipated increase of about $60 per ton [16][30] - Unit costs decreased by $40 per ton in 2025, marking the third consecutive year of reductions, with further expectations of a $10 per ton decrease in 2026 [16][17] Business Line Data and Key Metrics Changes - The company has shifted melting capacity from low-margin slabs to higher-margin flat-rolled products, anticipating continued demand for domestically produced slabs [5] - Multi-year fixed-price contracts with major automotive OEMs have been signed, increasing market share and securing high-margin business for 2026 [7][9] Market Data and Key Metrics Changes - The Canadian government has implemented restrictions on imported steel, positively impacting the Canadian subsidiary Stelco and improving pricing and shipments [4][12] - The U.S. market is benefiting from Section 232 tariffs at 50%, driving demand for domestically produced steel and reducing import competition [4][20] Company Strategy and Development Direction - The company is focused on leveraging existing production capacity without the need for new plants, positioning itself to benefit from the anticipated increase in domestic vehicle production [8][10] - The strategic partnership with POSCO aims to enhance collaboration and meet U.S. trade requirements, with a definitive agreement targeted for the first half of 2026 [13][52] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the improving business environment, citing a solid order book, rising prices, and declining costs as key factors for profitability in 2026 [20][21] - The company is committed to maximizing profitability through operational efficiency and strategic partnerships, with a focus on the automotive sector [20][21] Other Important Information - The company achieved its lowest total recordable incident rate in 2025, reflecting significant improvements in safety performance [14] - Capital expenditures in 2025 were a record low at $561 million, with projections for 2026 to be around $700 million, reflecting normalized maintenance capital [18] Q&A Session Summary Question: Expected benefits from the cancellation of the slab contract - Management expects an EBITDA improvement of approximately $500 million from the cancellation of the slab contract, with benefits starting in Q1 but more pronounced in Q2 and Q3 [26][30] Question: CapEx expectations beyond 2026 - CapEx for 2026 is projected at $700 million, with expectations to rise to $900 million in 2027 due to a blast furnace reline, then returning to $700 million in 2028 [34] Question: Open capacity and potential EBITDA sensitivity - The company has significant downstream capacity available, with the need for increased domestic automotive production to fully utilize this capacity [39] Question: Outlook for Q1 and pricing expectations - Shipments are expected to return to 4 million tons in Q1, with ASP anticipated to increase by $60 per ton, driven by improved demand and pricing dynamics [43][44] Question: Impact of Stelco on earnings and market dynamics - Stelco's performance in 2025 was disappointing due to market conditions, but improvements are expected in 2026 as Canadian pricing stabilizes [60][64]

Financial Data and Key Metrics Changes - Second quarter EBITDA increased to $135 per ton, indicating structural improvements and higher margins due to asset optimization and growth strategy [5][10] - Compared to the 2024 base, future normalized EBITDA is expected to be $2.1 billion, with one-third of this to be captured in the current financial year [6] Business Line Data and Key Metrics Changes - Calvert achieved a new shipment record in the second quarter, 10% higher than the first quarter and 10% above the same period last year [7] - Liberia posted record volume in the second quarter, with guidance for 10 million tonnes of shipments for the year [30] Market Data and Key Metrics Changes - The North American segment is expected to see marginally higher tariff costs, but this will be offset by the impacts of Calvert consolidation [18] - In Europe, the market is transitioning to a more favorable structure with the promise of trade defense mechanisms and carbon border adjustments [9][10] Company Strategy and Development Direction - Full ownership of Calvert is viewed as a positive development, enhancing the North American franchise [7] - The company is investing in a new world-class non-grain oriented electrical steel facility in Alabama, with a billion-dollar investment expected over the next few years [8] - The company aims to maintain growth momentum through strategic projects and an optimized asset portfolio [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining growth momentum and highlighted the importance of strategic projects in supporting EBITDA [6][10] - The company is optimistic about the European market's potential, contingent on the European Commission's actions regarding trade defense mechanisms [9][10] Other Important Information - The company has bought back 38% of its equity over the past four and a half years, enhancing shareholder value [11] - The company is focused on returning capital to shareholders while continuing to invest in growth [122] Q&A Session Summary Question: Can you walk us through the different moving parts for EBITDA in Q3 2025? - Management discussed operational issues in Mexico impacting production, resulting in $40 million losses in Q2, but expected stable shipments moving forward [14][15][17] Question: How do you plan to mitigate the risk of tariffs on slab imports? - Management highlighted a new slab supply agreement with US Steel and indicated that tariff impacts have been largely captured in Q2 results [20][21] Question: What is the expected contribution margin from Liberia's increased shipments? - Management confirmed guidance for Liberia at 10 million tonnes for the year, with expected profitability increases as new products are introduced [30][31] Question: What is the company's strategy regarding M&A in the US? - Management stated that the US remains a key market, with ongoing plans for growth, but did not comment on specific M&A targets [65] Question: How does the company view the potential for capacity restructuring in China? - Management acknowledged the need for capacity reform in China and expressed cautious optimism based on recent statements from Chinese authorities [100][101] Question: What are the expectations for the European market regarding safeguards? - Management indicated that the industry is advocating for limits on imports to boost domestic utilization rates and investments [54][56]