Elkem Stock

9:00. So let's start today's presentation. Good morning, and welcome to the third quarter results presentation for Elkem and also the Capital Markets update. My name is Odd-Geir Lyngstad, and I am responsible for Investor Relations.

Today's event will be split into 2 sections. First, we will start with the third quarter results presentation, and then we will continue with the capital markets update. We will have one Q&A session after the third quarter presentation and then one after the capital markets update.

So to take us through today's presentations and start with the third quarter presentation, we have CEO, Dag Teigland; and CFO, Morten Viga.

For the capital markets update, we will also be joined by the Senior Vice Presidents for each of the 3 divisions. We have Luiz Simao, representing Elkem Silicon; Inge Grubben-Stroemnes from Elkem Foundry Alloys, and Izaias Entringer from Elkem Carbon. They will be introduced in more detail later.

So let's move on to the agenda items for the third quarter presentation. As usual, we will go through the highlights for the quarter and give a business update. This will be followed by a market update and the outlook for the fourth quarter. CEO, Dag Teigland, will take us through these agenda items. CFO, Morten Viga, will then take us through the third quarter results. As mentioned, we will open for Q&A after Dag and Morten's presentations.

We plan to continue with the third quarter presentation until around 9:45, and we will then take a short break and start the CMU at 10:00 sharp.

And with that, I will give the word to CEO, Dag Teigland.

Thank you, Odd-Geir, and good morning to everyone. I'm very happy to see such a great physical attendance today. In particular, since this is my first quarterly presentation for Elkem. It is really a privilege to take the helm at Elkem, not only because it's such a company with such a proud and long industrial history, but also because of a very motivated and highly competent organization. So I'm really looking forward to what we can accomplish together.

When it comes to the third quarter, I think the best way to characterize the quarter is robust financial performance amid challenging markets. Elkem Foundry Alloys and Elkem Carbon delivered solid financial results due to their strong market positions. The Foundry Alloys' performance improved slightly, both compared to the previous quarter and the corresponding quarter last year.

Carbon reported the best result since third quarter last year with certain regions showing signs of improvement. The Silicon division was impacted by continued weak markets and low sales prices for both silicon and ferrosilicon.

In September, Elkem finally received the 1.3 million additional free emission allowances from 2021 to 2025. For 2026 to 2030, our plants in Norway will receive allocations in line with the industry in Europe. This is very important to secure competitive and predictable framework conditions and a level playing field.

So let me start out with saying a few words about ESG. The safety of our people is the #1 priority in Elkem. We want every employee to have a safe and good working environment. We're not very happy with the injury rate level we are at for the moment, but the development is going in the right direction. We will continue to work systematically to improve our performance. The target is and always will be 0 injuries.

We also have clear and ambitious goals for reducing our CO2 emissions. Our efforts to reduce emissions starts from a very good level, as Elkem's CO2 footprint is less than 35% of the global average for silicon production. This is supported by renewable energy, energy recovery at several of our plants and the use of bio reductions.

As part of Elkem's strategic update, we concluded to retain our target of reducing CO2 emissions by 25% by 2030. Our long-term ambition is to reach net zero by 2050. However, these ambitions are challenging and will depend on the regulatory environment. The ambitions will also have to be financially sustainable.

In addition to reducing our own emissions, Elkem's products and solutions are important to help others reduce their CO2 emissions. We have many initiatives ongoing within this area. In third quarter, Elkem Carbon and Danieli Corus signed an agreement where the aim is to reduce greenhouse gas emissions from steel production. By developing solutions to increase the share of recycled steel in the production process, CO2 emissions could be reduced by up to 20%.

As announced in the third quarter, we are strengthening the long-term competitiveness at Elkem Rana by investing NOK 260 million to renew the furnace. The investment includes replacement of one of Elkem Rana's 2 furnaces and its off-gas equipment. The furnace is at the end of life and is already causing production issues. The upgraded furnace will incorporate the latest proven technology, enhancing operational reliability, process control and energy efficiency. This will secure continued safe and cost-efficient production at the plant.

The new furnace will also facilitate increased use of biocarbon and reduce fossil CO2 emissions in line with Elkem's climate ambition. The installation is scheduled to start in the first quarter of 2027 and will last 3 to 4 months. Elkem Rana's second furnace will operate as normal during the period.

In September, Elkem received the 1.3 million long-awaited additional free emission allowances under the EU's ETS scheme for the period 2021 and 2025. The allocation follows the Norwegian Ministry of Climate and Environment's conclusion in July '25 that Norwegian silicon, ferrosilicon and manganese producers were unequally treated compared to EU producers.

In addition, the plants in Norway have received confirmation that future allowances will be in line with comparable industry in the EU. This is very important to secure competitive and predictable framework conditions.

By the end of September 2026, Elkem had approximately 1.3 million allowances available for sale. The allowances are carried at 0 value, while the estimated fair value is around NOK 1.2 billion. The plan is to sell these allowances over time as a normal part of our operations.

Elkem Iceland was placed under strategic review in the second quarter of this year due to consistently weak financial performance caused by the extremely challenging markets and a structurally higher cost base than our Norwegian plant. Under this strategic review, all alternatives were evaluated to secure long-term profitable operations.

In October, Elkem Iceland entered into a new power purchase agreement. The contract will secure long-term electricity supply at competitive terms and increase the plant's operational flexibility. The agreement runs from 2026 to 2029 and covers a volume of 127 megawatts, which is approximately 1,035 gigawatt hours per year. The contract will significantly improve the plant's strategic attractiveness, but the strategic review will continue as additional measures will be required to restore profitability to an acceptable level. In addition to Iceland, the retained assets from the silicone divestment are classified as discontinued operations. We'll give you a very quick status of these assets.

So first of all, Elkem Silicon, which is the plant in Roussillon, France, remains under strategic review. The plant has a take-or-pay contract with Blue Star for 50,000 tonnes of siloxane per year until 2031. In addition, the plant has entered a strategic partnership with U.S.-based Milliken, which will position the plant for sales into the U.S. market. The plant is well positioned as one of only 2 remaining upstream silicon producers in the EU. The plant has a strong organization and currently a good operational performance with positive financial results.

In the middle, Silicones India. consists of a very small downstream plant. Also, this asset is well positioned with local customer base. The organization is strong and the operational performance is also good.

When it comes to Yongdeng Silicon in China, this plant was closed in 2025. We have a sales process ongoing for the remaining assets, and we expect to conclude the sale. The sales process will, however, be fairly modest, reflecting that the plant is already closed.

We continue our efforts to find the best possible solution for all of these assets, but cannot give an exact time frame for when this can be concluded. Until further notice, these assets will, therefore, remain under strategic review.

So we'll now continue with an update on the main markets that affect Elkem. The overall market conditions are challenging, but the development is somewhat mixed depending on the sector. There are signs that industrial momentum is improving, but construction certainly remains weak.

In Automotive, there are signs of stabilization, but with regional differences. EU is about to implement measures to limit Chinese hybrid imports. This could ease the competitive pressure and support a modestly improved outlook in Europe. In addition, rising European defense spending creates new opportunities across industrial and automotive supply chains.

When it comes to Construction, the activity remains weak. The Eurozone PMI stands at 43.4, which signals a continued contraction. Residential construction is particularly challenging, while AI and data center infrastructure are bright spots and remain key growth areas. The Manufacturing activity in Europe has shown some signs of improvement with Germany as the bright spot.

Steel and aluminum production are important demand drivers for Elkem silicon, ferrosilicon, foundry alloys and carbon products. Steel production in the third quarter reflected a normalized -- normal seasonal decline with volumes at the level with the same quarters in the previous years. Still, European and global steel production are well below the 2021 level, which has been used as the base in this graph. Steel production in the EU is expected to increase following the implementation of the Carbon Border Adjustment Mechanism from January '26 and stronger EU steel safeguards from July this year.

Aluminum production has shown a positive development in Europe despite relatively weak demand. The Middle East conflict is disrupting supply and logistics, reducing exports to Europe and global markets.

So let's take a look at the silicon and ferrosilicon markets. The overall picture is that silicon prices have increased modestly from historic low levels, while the safeguard for ferrosilicon in the EU has so far not had any significant impact on the prices. The reference prices for silicon, here illustrated by the 553 quality improved modestly in the EU in the third quarter. Prices have continued to rise marginally early in Q4, mainly because buyers in the EU increasingly prefer to source European material. Prices are, however, still at a very low level. In the U.S., on the other side, silicon prices have continued to rise due to tight supply and low inventories.

Ferrosilicon prices in the EU were marginally down in the third quarter. We have yet to see any material impact from the safeguard measures that the EU implemented last year. In the U.S., ferrosilicon prices remained stable in the third quarter and market conditions are expected to improve further.

The Chinese silicon market is also important as the persistent oversupply gives a continued downward pressure on reference prices in the EU. The silicon prices in China remain at record low levels as price recovery continues to be hampered by oversupply and high stock levels. So far, higher domestic coal prices and higher electricity prices after the wet season have not yet resulted in an increase in silicon prices.

Weak domestic demand in China puts pressure on exports and China's global silicon exports rose with 4% so far this year. The silicones market, here referred by the DMC prices is a key indicator as it is an important part of the silicon-based value chain. Also, this industry suffers from Chinese overcapacity.

During the third quarter, the DMC prices in China have shown significant fluctuations. First, a steep decline in the prices followed quickly by a recovery after very effective price management initiatives by the Chinese industry.

As already mentioned, the industry in the EU is suffering from competition from low-priced imports and unfair competition. Protective measures are therefore gaining momentum. This is important to Elkem as more than 75% of our sales from Norway and Iceland go to the EU. For silicon, the European Commission has now initiated an interim review of the anti-dumping duties on imports from China. The interim review will examine whether the current duties of 16.8% are sufficient as Chinese oversupply put the downward pressure on prices, which adversely affect European producers.

And now most recently, on October 23, the commission also implemented registration of silicon imports originating in China. This decision could have an immediate impact on our markets as importers may accrue potential liability if the ADD rate should be increased with retroactive effect. The investigation is expected to conclude within 12 months.

On ferrosilicon, the EU has reviewed the anti-dumping duties on imports from China and Russia for another 5 years due to risk of renewed dumping. Chinese producers face a general anti-dumping duty of 31.2%, while the rate for Russian producers is 22.7%. Other protective measures in the EU, which are relevant to our industry includes EU's Clean Industrial Deal and the Carbon Border Adjustment Mechanism, which aims to secure preferential treatment and a more level playing field for producers in Europe.

The new safeguards for steel are aimed at increasing European steel production and a new proposal to limit the number of hybrid electric vehicles imported from China to 350,000 cars per year, potentially cutting the Chinese market share in half.

So based on the recent market developments as presented, we will quickly go through the outlook for the fourth quarter. First of all, Elkem's cost reduction program will continue to contribute positively to the results going forward. We have seen a modest increase in silicon prices in the third quarter and prices have continued to rise marginally in the fourth quarter. This will not have much impact in the fourth quarter due to time length. The expectations for the fourth quarter results for Silicon remain stable, while further price normalization strengthened the outlook for 2027.

For Foundry Alloys, a stable result is anticipated with seasonally lower sales expected towards the end of the year. The signs of recovery for Carbon in certain markets point to a modest improvement in the fourth quarter. Going forward, the new protective measures in the EU are expected to improve market conditions ahead, although the exact timing and magnitude is uncertain.

So with this, Morten, I pass it to you.

So thank you very much, Dag, and good morning, everybody. I'm pleased to go through the results for the third quarter in more detail. And clearly, the markets are still challenging. But as you will see, we continue to deliver somewhat improved EBITDA compared to the previous quarter, and that's good.

We now report on 3 segments: Carbon and Foundry Alloys, which are the specialty business segments and deliver stable EBITDA margins at a good level, while clearly the Elkem Silicon EBITDA margin is still hampered by low silicon and ferrosilicon prices.

Please note that the Elkem Iceland and also our chemicals operations in Roussillon in France are classified as discontinued operations and are not included in the revenue and EBITDA numbers.

So Elkem's operating income for the quarter was NOK 3.6 billion, which was down 2% compared to the third quarter last year, and this is mainly explained by lower sales prices. The EBITDA amounted to NOK 554 million, which was down 14% from the third quarter last year. The EBITDA margin for the quarter was 15%, supported by good and stable margins in Foundry Alloys, Carbon and the Materials segment within -- or Materials business line within the Silicon division.

As always, we have provided a summary of main financial numbers and ratios. I will not go through everything in detail, but the main takeaways are, first of all, as I said, the EBITDA was NOK 554 million, and this include realized effects from the currency hedging programs of NOK 38 million due to a stronger NOK.

Other items amounted to NOK 111 million and consisted of gains on power and currency derivatives of NOK 169 million, currency losses of NOK 49 million and other items of minus NOK 9 million. The net finance income was NOK 225 million. This consists of net interest expenses of minus NOK 80 million, currency gains of NOK 314 million due to stronger NOK and net other financial items of minus NOK 8 million.

The income from tax was minus NOK 139 million, which represents an effective tax rate of minus -- or of 24%. Net profit for the period was NOK 319 million, which was an improvement from NOK 29 million in the third quarter last year.

So let's take a look at the divisions. As previously mentioned, Elkem has changed the reporting structure and split the former Silicon Products division into Elkem Silicon and Elkem Foundry Alloys. We will get back to more details in the CMU presentations. But generally, Silicon contains the commodity segments, silicon and ferrosilicon, while Foundry Alloys consist of a very specialized product offering.

Elkem Silicon continued to be very much impacted by low sales prices for silicon and ferrosilicon. This is, to some extent, mitigated by strong performance in the Materials segment, which includes our Microsilica products. We have very strong positions within the Materials and Microsilica product lines, and here, the prices are not linked to market reference prices, but based on more individual negotiations based on the CVM methodology.

Total operating income for Elkem Silicon for the quarter was NOK 2.142 million (sic) [ NOK 2,142 million ]. That was down 9% from the third quarter last year. This reduction is mainly driven by lower sales prices for silicon and ferrosilicon, but also by currency effects due to a stronger NOK. The EBITDA amounted to NOK 127 million, and this was down 43% from the third quarter last year, but it was an improvement from the previous quarters this year. The reduction from the third quarter last year is mainly due to lower commodity sales prices and negative currency effects. The effects from our previously announced cost reduction program has partly offset this negative impact.

And as previously mentioned, good results from Materials and Microsilica are contributing positively to the result for the quarter. The sales volume was generally in line with the third quarter last year. But please note that the reported sales volume is -- does not include Materials or Microsilica, it's silicon and ferrosilicon.

Elkem Foundry Alloys is a very good business segment, and it improved its financial performance despite challenging markets. In the third quarter, the division accounted for 26% of total income on the group and 43% of the group's EBITDA. Total operating income was NOK 1.056 billion, and this was up 5% from the third quarter last year. The increase in total operating income is mainly driven by positive volume and sales mix effects.

The EBITDA was NOK 235 million in the quarter, which was up 7% from the third quarter last year. And the improvement is explained by positive volume and sales mix effects. This is, however, partly offset by negative currency effects and also somewhat higher raw material prices. Foundry Alloys, as I said, has very strong market position, and this has enabled a high capacity utilization and stable and good sales volumes.

Our Carbon business is still experiencing challenging markets, but we see signs of improvement. The division now in Q3 accounted for 20% of the group's total income and 34% of the group's EBITDA. The reported operating income for the quarter was NOK 782 million, which was down 5% compared to the third quarter last year. And this is also mainly driven by lower average sales prices and negative currency effects.

The EBITDA amounted to NOK 183 million, which is down 21% from the third quarter last year, impacted by lower average sales prices and also somewhat higher raw material costs. The overall sales volume is in line with the third quarter last year.

So let's take a closer look at Elkem's key financial ratios. The EPS earnings per share amounted to NOK 0.87 plus in the third quarter of 2026, and the improvement is largely driven by currency gains in other items and financial items. However, it's also important to bear in mind that the weak performance that we reported in Q2 was mainly explained by losses in discontinued operations, which also included a fair value adjustment in our Yongdeng operations.

Our EPS year-to-date is minus NOK 1.18 per share, and this number is based on the current number of issued shares as we find this more relevant than the average number of shares, which include the Bluestar shares, which were canceled on the 30th of April.

Total equity as per end of Q3 amounted to NOK 13 billion, and this gives an equity ratio of 45%. The reduction in equity ratio after the first quarter is mainly a reflection of the cancellation of the Bluestar shares. However, we believe that 45% is a very solid equity ratio, and this underlines our very solid financial position.

As you know, we have raised new equity, and we have also refinanced a significant portion of our debt in the second quarter. And this has certainly provided Elkem with a very strong financing and liquidity position. By the end of the third quarter, we had net interest-bearing debt of NOK 6.5 billion, and this gives a leverage ratio of 3.3x last 12 months EBITDA at the end of third quarter. That is a slight increase from the 3.2 that we had by the end of Q3 just because of the fact that Q3 this year was somewhat weaker than the Q3 last year. A key priority going forward will certainly be to ensure a further reduction in net interest-bearing debt and the corresponding leverage ratio.

After the refinancing in the second quarter, we have a very attractive maturity profile on our debt with all major maturities coming in 2031 and onwards. In addition, we have a very strong cash balance amounting to NOK 5.5 billion, and this means that technically, we are able to handle all debt maturities until 2029 with the current cash position.

So needless to say, we are very comfortable with the financing position. And certainly, that gives us a very good opportunity for management to fully focus on strategic and operational matters.

Our cash flow has improved compared to 2025. In fact, all 3 quarters this year have been better than the corresponding quarters last year. And this has mainly been driven by a strong focus on capital allocation and capital improvements.

And in connection with the first quarter, we communicated a target to improve working capital this year by NOK 1 billion and also to limit investments to NOK 1 billion. And the purpose was clearly to improve cash generation and to reduce debt. I'm very happy to say that we are delivering on these targets.

The cash flow from operations this quarter was NOK 421 billion and year-to-date is NOK 1.4 billion. By the end of third quarter, Elkem has had realized working capital reductions of almost NOK 1 billion, for our continued operations. And also our investments, including the reduction that I talked about have been according to plan.

In the third quarter, total investments amounted to NOK 207 million with reinvestments of NOK 148 million and strategic investments of NOK 58 million. Investments year-to-date amount to NOK 510 million. And as I said, we're very pleased to have a good direction to deliver on the investment and working capital reduction targets for the year in total.

So let me wrap up this presentation by a couple of main takeaways. First of all, we are very happy to see that Elkem Foundry Alloys and Carbon divisions maintain good results and good margins even in a very challenging market sentiment. And we will certainly get back to the drivers for this in the upcoming CMU presentations

As I said, the Silicon division is clearly more exposed to commodity prices, and that is a tough place to be for the time being, but we have seen silicon pricing increasing modestly in the third quarter, and that's good. And we have also seen that prices have continued to rise moderately in the beginning of fourth quarter and the continued price normalization would certainly improve the outlook for 2027.

Foundry Alloys specialized business model certainly means that this segment is very well positioned to continue delivering good results and attractive margins. And the same basically applies to Carbon, where we have very strong market positions and a very good competitive edge.

I'm also happy to say that we have got clarity on the CO2 quota frame conditions in Norway and that we have received the outstanding emission allowances for the period 2021 to 2025, and that we now have a very good clarity on frame conditions going forward up until 2030. This provides predictability. And it also provides, let's say, fair competition frame conditions versus our European competitors.

We also clearly believe that the new protective measures in the EU give rise to optimism with regard to improved market conditions going forward in the EU as there is now clearly a willingness to take more actions, more specific action to protect European industries from unfair competition.

So that concludes this presentation, and I'm happy to give the word back to Odd-Geir, who will take us through the Q&A.

Thank you for that, Morten. So we will then, as I mentioned, open for some Q&A session now after the third quarter results. There is a good audience here today. So I would just like to check with the people here today if there are any questions. I expected that, Magnus, please.

Yes. You announced the cost cuts, obviously, earlier this year, I think NOK 600 million, mainly due to staff reductions, as I understand it. And those staff reductions were mostly completed in Q2 was my understanding at least. Can you share some light on what's the impact from that cost-cutting program in Q3 because we don't really see any significant EBITDA change and prices are slightly up. You also guide for flat results basically, it seems like in Q4. So yes.

I'm happy to say that we have delivered on those targets. As a matter of fact, we promised to take down [ manning ] by 300 full-time employees that was corresponding to 10% of the total manpower. We have reduced manpower by 400. So that's very good. That's basically done. We have also taken down total indirect cost by NOK 600 million, in line with our targets. You will see that already from Q3, but Q3 is a bit of, let's say, an extraordinary quarter as it is a vacation season, both in our own operations and also certainly among our customers. But from Q4, you should see this in our P&L.

But of course, this is also when it comes, for instance, to salary, it's -- there is, of course, an opposite effect by salary inflation.

Yes. So when you guide for stable quarter in Silicon, and stable results in Foundry Alloys, marginally higher results in Carbon for Q4, that is not including then the cost cuts or...

That is including everything that we see.

Okay.

Marcus, please.

Just touching upon the Carbon Solutions margin, which has declined materially over the last couple of years. Of course, steel production has come down and scale for you also come down, but is there any subsegments within Carbon Solutions or something with the product mix that has changed over the last year, which also seen margins come down so much? Or is there anything -- just to think about how we should see the recovery ahead? Is this predominantly a scale utilization thing? Or is there a change in products?

I think if I can start, you should think about this as a reflection of the very weak market that we have experienced and that we are experiencing. Our main markets are still in the Western world, in the EU and in Americas, and 80% of what we produce goes to customers, which then deliver into steel industry. And of course, steel industry has not been a good place to be in, in the Western world during the last 5 years, and that is clearly hampering demand for our products.

We maintain very high market shares. We have very strong products. I think we have a unique product offering, both offering top-notch qualities, quality products, but also technical support that no one else is able to offer. But of course, when you have lower volumes, then you also get a lower dilution of the fixed cost, and that's the main driver behind this. We expect that when we will see a normalization in market demand from steel, we should also gradually see a more normalized demand for our products and a gradually improved margin.

I think on a good spot, since you are mentioning also, let's say, good news, 20% of our carbon business goes as ramming paste to the aluminum industry. And here, we have certainly seen a very good progress. There is a good sentiment in the aluminum industry. We have some unique products that we will get back to later today. And we see that this has been very well received in the market. But also here, we see problems in logistics, et cetera. A big portion of our customers are in the Middle East, big aluminum smelters. And of course, it's not easy to sell products to the Middle East these days.

Any other questions from the audience? You have the chance now. If not, I'll take one question that has come in on the -- those following us on the webcast.

And it's a question on the impact of commodity inflation on profitability in the third quarter. What will the impact be?

On commodity?

Yes, it's -- I guess, it's on raw material and higher raw material prices, how that will affect the profitability in the third quarter?

Yes. I think the main question mark, of course, when it comes to profitability in ferrosilicon and silicon, which are our commodity segments, that's the development in finished good prices. And just to repeat it, today's prices are extremely low. We are for -- we are significantly, significantly lower than the prices that we saw from 2020 to 2025. And in real terms, we are at all-time low prices.

Then it's good to see that we observed some improvements in silicon, and that's highly needed. That's very encouraging. That can also lead to higher ferrosilicon prices because we know that ferrosilicon prices are also under extreme pressure, also due to the fact that there has been a substitution from ferrosilicon to silicon among steel customers. And when we see or if we see more normalized silicon prices, that can be reversed.

Of course, we also follow the raw material prices. But here, we are very well positioned. We have a fundamental competitive advantage on power cost, and that's the major input factor that remains. We have stable contracts in hydropower, while our competitors are facing higher prices. We have our own electrodes. We have our own quartz, and basically, the cost related to reduction agents that follows work market prices. So we're not too concerned about that.

There are some more questions on the webcast, which are more fitting into the strategy or CMU presentation. So I'll come back to that later. But one last question before we take a break.

There have been discussions on ADD and protective measures. And do we have any thoughts or ideas on what the new ADD rate on imports from China could be?

Well, I don't think we can speculate in that. The most important positive news for us right now is that the commission initiated this registration of old material imported from China. This is a very clear signal that the commission is also considering to introduce more quick reactions rather than waiting all the way until Q3 next year. So that's very positive.

But I think looking at -- and one example is the U.S., where the ADD rate is now 140%. So in the U.S., it's 140%, but we cannot speculate what it will end up with in Europe.

Okay. Thank you to Dag and Morten, and that concludes the presentation for the third quarter. We will then take a short break, approximately 15 minutes, and start here again at 10:00 sharp. So for those following us on the web, please stay tuned, and we will start again at 10:00 sharp. Thank you.

Okay. It's 10:00. I promise those following us on the webcast that we will start at 10 sharp. So thank you very much for being back in time. So welcome back. We will now continue with the Capital Markets update.

So let me quickly go through the agenda. We will start with the presentation from CEO, Dag Teigland, who will give us an update on Elkem's strategy. We will then continue with the presentations of each of the divisions. Senior Vice President, Luiz Simao, will present Elkem Silicon; Senior Vice President, Inge Grubben-Stroemnes, will present Elkem Foundry Alloys; and Izaias Entringer will present Elkem Carbon. CFO, Morten Viga, will then be presenting Elkem's new financial targets. Dag Teigland will then give a quick wrap-up of the capital markets update before we open for Q&A.

We expect to finish here by 12:00, and then we have a good time afterwards to talk and discuss and have a coffee outside.

So with that, I'll give the word to Dag.

Thank you, Odd-Geir. And now we are -- or I am, together with the full management team, very much looking forward to give you an update on how we see the future, Elkem's next chapter. And we will try to explain to you how we intend to improve profitability and grow the business.

So 2026 has been a year of decisive change for Elkem. First of all, we completed the sale of the silicones business to Bluestar. And now Elkem is a much more focused company with an optimized portfolio with a clear focus on silicon-based and carbon materials.

Second, this transaction also transitioned Elkem into a company with a strong Western shareholder base. This is extremely important for our position as a Western independent supplier of critical materials in the current geopolitical context.

Thirdly, we strengthened the balance sheet. We raised NOK 1.8 billion in new equity, and we refinanced NOK 1 billion -- EUR 1 billion for bank facilities with 10 relationship banks. This has given Elkem a strong financial and liquidity position. Together with targeted improvement measures, this has contributed to a significant reduction in net debt and an improvement in the leverage ratio from 4.3 in Q1 to 3.3x now.

We've also taken firm action on costs. The program initiated in the first quarter includes a reduction of close to 400 full-time positions and expected to generate annual savings of more than NOK 600 million. We are also reducing working capital. Our target is NOK 1 billion, and we have already received -- achieved more than NOK 800 million, compared to the end of last year. To preserve cash and support further deleveraging, we have also kept CapEx this year at NOK 1 billion.

Finally, we have reorganized Elkem into a leaner structure with 3 divisions, and you will hear from the head of each division today. So the key message is that all the major structural changes are behind us, and we are now very well positioned to capture profitable growth going forward.

So I'm happy to present the corporate management team that will lead Elkem going forward. It's a strong international team with an extensive industrial and commercial experience. Several members have been with Elkem for many years. They know our operations, our technologies, our customers and not at least our culture. At the same time, the team brings complementary experience in finance, business, M&A and from other industries. This combination is important. We need deep operational knowledge, but also a clear external perspective as we build the new Elkem. You will today hear from the divisional leaders outlined in red, let's see. Red.

Our 2 Brazilian colleagues, Luiz, will go through Elkem Silicon; Izaias, Head of Elkem Carbon; and then Inge will explain the Foundry Alloys business to you. And lastly, Morten will finally give you an update on the targets -- financial targets going forward.

Following the divestment of Silicones, Elkem consists of 3 specialized divisions: Silicon, Foundry Alloys and Carbon. Silicon is our largest division. It produces silicon, ferrosilicon, Microsilica, Silgrain and quartz. Silicon and ferrosilicon are exposed to commodity cycles, while our Materials business, which is based on our own Microsilica, provides a more specialized product portfolio with more pricing power and stable margins.

Luiz will explain more about this business later. And I think it's important for you to understand that the Material business in Elkem Silicon represents roughly 25% of turnover this year. This is moving based on how we optimize the furnaces at any particular time due to market prices. But anyway, Materials has become a significant part of the Elkem Silicon division.

Foundry Alloy is the global leader in cast iron metal treatment. The strong position is based on close collaboration with our customers, combined with very high metallurgical expertise, tailored products and technical customer support. Carbon is the leading supplier of electrode paste and specialty carbon products with a global production footprint and strong local positions with long-term customer relationships.

Together, these 3 divisions give Elkem a differentiated earnings profile. Materials, Foundry Alloys and Carbon provide resilience through specialized products, customer intimacy and robust margins. Both silicon and ferrosilicon represents substantial recovery potential when the markets normalize.

As you can see, our operations are truly global. We have approximately 3,000 employees across the world. We have 4 R&D centers also spread around the world. We have a global production footprint and customer reach basically all over the world, while Norway is still the center of gravity.

So even though Elkem has gone through a lot of changes in 2026, Everything we do is still based on the same values: respect, involvement, transition and continuous improvement. These are not only words. These are important in Elkem. Our entire operating model and not at least our Elkem Business System or EBS, as we call it, is based on these 4 principles.

And on this operating model, we are to deliver on our purpose to provide the essential materials that modern society depends on. So while we're organized in 3 different divisions, we still have one common purpose, one common mission. We have one operating model, and we share one set of values.

So I'd also like to take the opportunity to say a few words about Elkem Business System because it's so central to everything we do at Elkem. So if someone were to ask me, what is the secret sauce for the very successful development of Elkem over so many years in one of the most cut-throat competitive global industries. My answer would be EBS. So EBS is really about people. It's about developing and empowering all our people to identify problems where they are, solve them at the source and continuously improve the business across 4 dimensions: HSE, quality, value and time.

It's built on 4 principles. Again, first of all, the center of everything we do is to empower people to make the decisions where decisions are to be made. Principles are everything we do, it has to make to use. It has to be based on eliminate waste, so simplify everything, cut everything you don't have to do, eliminate waste. And then we need to have as much control as possible on all our processes. These are the basic principles of what we do.

So EBS is really at the heart of Elkem's culture. It's our way of working, driving operational excellence and continuous improvement. It may sound easy. And for some people, it may even sound naive, but it's not. It is hard and disciplined work every day. The good thing about this is that it's not easy to replicate. In my mind, I think this is maybe one of the strongest competitive advantages of Elkem.

So now let's have a look outside of the company and what's going on in the world around us. So structural pressures are clearly reshaping our markets. The external environment remains challenging, marked by high uncertainty and low visibility. But at the same time, this also represents opportunities for Elkem.

After many years of manufacturing shifting towards China, the politicians in the Western world now realize that it's not in our own interest to be completely dependent on China for strategic supply chains of critical materials.

National security, strategic autonomy and resilient supply chains have now become more important than the lowest cost sourcing. The U.S. administration has taken a lot of active measures to stimulate local manufacturing and the U.S. is -- the EU is following suit. Markets are getting more fragmented and regional trade patterns are developing.

At the same time, Chinese state-supported industrial overcapacity has driven a surge of low-priced exports into Europe, causing a substantial trade deficit with China. This places significant pressure on European industrial production.

Energy is another structural challenge. Industrial electricity in the European Union are roughly double -- or industrial prices for industrial electricity is basically the double of what we can see in the U.S. and in China. This represents a major structural challenge to European manufacturing.

In addition, transmission and distribution networks struggle to keep pace with the rapid development of renewable energy and electrification. Data centers are adding further pressure to the system. So these pressures are challenging, but they also increase the strategic value of regional production, secure supply chains and not at least competitive renewable energy.

Against this backdrop, there's a lot of focus on strategic and critical supply chains these days. Silicon is classified as a critical and strategic raw material, both in the U.S., both in the EU and in the U.S. because it's fundamental to modern economies to clean energy transition, defense and national security. Yet today, it represents high supply chain concentration and disruption risk.

In Europe, silicon metal is included among the strategic raw materials under the Critical Raw Materials Act. This act sets specific objectives for 2030 for European production of strategic materials and limiting dependency on any single third country.

The EU is now finally moving from targets to implementation. The U.S. is moving in much the same direction, although faster and with even stronger focus on national security and trade policy dimension. So both Europe and the U.S. are moving towards the same new industrial policy model, produce more domestically, diversify external supply, build strategic reserves and protect viable domestic supply chains.

Elkem is very well positioned in this environment. We are one of a relatively small number of established Western producers of silicon and silicon-based materials with a strong cost position. This gives us a strategically important position in the new geopolitical context.

So looking beyond the current market cycles, there are structural megatrends supporting long-term demand for Elkem's materials. First is digitalization and AI. Semiconductors, data centers and digital infrastructure all depend on advanced materials and substantial new physical infrastructure. Second, energy transition, electrification, renewable energy, grid expansion and more energy-efficient industrial systems require increasing volumes of high-performance materials. The third is security and strategic autonomy, like we have already talked about. Governments and customers are placing greater value on supply chain resilience, regional production and access to critical materials.

So Elkem is positioned right in the middle of these 3 trends through European production of critical materials and an integrated supply chain. This supports our confidence in the long-term demand fundamentals and reinforces the strategic value of our positioning.

A few words about energy as well, as it is one of the major cost elements in our smelting operations. Secure access to power at competitive and predictable terms is fundamental to our cost position, operating stability and our ability to make long-term customer commitments. Elkem has power positions in Norway, Iceland, Canada and Paraguay. This includes long-term contracts, captive hydropower and industrial tariffs.

In Norway, we have a hedging ratio right now of about 84% -- 85% in the short to medium term, and with some contracts extending until 2037, all in attractive cost locations. We are continuously managing actively our power contract portfolio to optimize our position. So these power positions reduce our exposure to short-term volatility, and it supports our competitiveness.

Of course, we cannot have a presentation without mentioning AI. We believe we also have a competitive advantage here. So earlier this year, Elkem received a recognition from Norsk Industri for the most smartest industrial company. And we were recognized for systematic digitalization, technology deployment and measurable industrial use cases. We are proud of this. However, we have just started.

Our core processes are extremely data driven. Elkem possesses deep process expertise, and we have decades of industrial data. A key strategic priority for us going forward will be to extract even more value from our proprietary data sets by applying our scalable AI platform. Largest impact is expected in optimizing our very complex plant operations and raw materials, as well as logistics, sales and market operations. In particular, where we can use our own data sets collected over years to improve the production of our customers.

Applications also include predictive maintenance, demand forecasting, product mix optimization, dynamic pricing and customer retention management. Combined with our proprietary data sets, we are in pole position to use AI to create further competitive advantage compared to our competitors.

A lot of factors are competing for our attention in our dynamic environment. Sustainability is currently struggling to reach top of mind of many. However, we believe our position as one of the silicon producers in the world with the lowest CO2 footprint is an important competitive advantage.

Our climate strategy is built around 4 elements: emission reductions, low-carbon products, circularity and climate resilience. We keep our target of 25% reduction in Scope 1 and Scope 2 emissions by 2030, and we keep the carbon neutrality as an ambition for 2050. We realize this is a demanding ambition, which will be dependent on the right framework conditions, supporting profitable investments in emission cuts.

We will also continue to do our share by decarbonize our operations and maintain our position as a producer positioned on the lower end of the emission curve relative to our global competitors. We're expanding our offering of low-carbon products based on renewable power and where technically possible, higher use of biocarbon reductants. We also continue our work to convert byproducts and waste into value and to improve material and energy efficiency.

Finally, climate risk is integrated into our investment decisions and long-term planning. The standard is basically the same as elsewhere in our business. Initiatives must improve competitiveness, reduce risk or generate sustainable financial return. Capital discipline applies equally to climate-related investments.

So our updated strategic direction is based on 3 priorities in order of importance. Point number one, develop and protect our business. Number two, we are to grow from the positions where we are already world leading. And 3, we believe there is room to leverage Elkem core competencies to create additional shareholder value.

So first priority to strengthen the competitiveness and resilience of our existing business. We will continue to drive cost and productivity improvements through EBS and operational excellence. We will engage proactively on trade and industrial quality to maintain market access and address unfair competition. We will also continue to optimize product mix, pricing and margin management with a clear focus on the value we create for our customers. We will also evaluate other opportunities that can improve our resilience and increase returns. So this is basically about extracting more value from the assets and the capabilities we already possess.

Priority #2, grow where we already have leading positions. This means the businesses where we have successfully demonstrated the ability to leverage the close relationship with our customers to create added value through technical service, product development and specialization. Basically, where we, over time, have succeeded with differentiating our products or our product offering from pure commodities. This being materials, foundry alloys and carbon.

We will continue to deepen our customer relationships through close technical service and co-development. We will continue to innovate and increase the share of specialized products that provide clear performance benefits to customers. We will also strengthen the commercial excellence through what we call value-based pricing, product mix optimization and active margin management. Any capacity expansion will be targeted and selective bolt-on acquisitions may be considered where they strengthen an existing market position or add complementary products, technology or geographical reach.

Lastly, Elkem must also be open to explore opportunities to create additional values based on our industrial competencies. We have distinctive leading capabilities in industrial production, process technology, raw material management, circularity and commercial optimization. We are well positioned as a leading provider of industrial materials in the new geopolitical context, and the growing strategic importance of secure, regional and resilient critical material supply chains may create new opportunities, where these capabilities are relevant.

So this is not about pursuing major acquisitions or diversifications for its own sake. Our starting capital is capital discipline. We will remain highly selective, prioritize opportunities close to our core competencies and apply a high threshold for strategic fit and financial return.

Where attractive opportunities may emerge, we will consider the most appropriate way to participate. This could include partnerships or other capital-light models that will allow us to contribute our industrial expertise, while limiting investment and risk.

In short, we will build from what Elkem already does well, respond selectively to emerging strategic opportunities and deploy capital only where we see a clear path to attractive long-term shareholder value.

The strategy can be summarized in 3 words: protect, grow and explore. Restoring profitability, strengthening cash generation and reducing leverage come first. Selective growth opportunities will be assessed against strategic fit, returns and balance sheet impact.

So let me summarize. Elkem has a leading Western production platform supplying critical materials into markets driven by global megatrends and increasing demand for supply chain security. We have world-leading positions in foundry alloys, carbon and materials with specialized offering, pricing power and attractive margins. In silicon and ferrosilicon, we have strong cost positions and significant earnings potential once markets normalize. We have a low-carbon platform based on competitive renewable energy, biocarbon and circularity. All of this is underpinned by disciplined capital spending and commitment to maintaining investment-grade financial profile.

So all-in-all, we have a clear path to stronger financial returns based on continuous improvement, active margin management, growth in our high-margin segments and market recovery for silicon and ferrosilicon. So the major transformation is behind us. We now have a solid foundation for growth and higher returns.

So this concludes the group level introduction, and I will now hand the word over to Luiz, who will tell you more about the Silicon division and its market position and business.

Good morning. I am Luiz Simao, and I will introduce Elkem Silicon. Elkem Silicon is a leading Western silicon and ferrosilicon producer. It represents more or less 55% of the revenues in 2025, 33% of EBITDA. We have 8 main production sites and a little bit more than 1,000 employees. And these are not considering the 2 sites that we have in Iceland and France.

I think it is also quite important to start with the competitive advantages that we identify for -- that we highlight for Elkem Silicon that we are a vertically integrated value chain. We have a leading cost position with long-term power supply in favorable areas and #1 position in Microsilica. And try to keep this on the back of your head because that will be basically what we will talk during this presentation.

In terms of global production footprint, it is quite interesting what you can see here in terms of understanding this vertical integration. We produce more or less 1.5 million tonnes of quartz in our own facilities. We have mines in Norway and in France and in Spain. And those are the 2 main ones, in Tana and Erimsa with a little bit more than 110 employees. And then there's other smaller operations, smaller mines in those 2 countries.

In terms of silicon metal production, we have 2 facilities in Thamshavn and Salten. And here, I think it is also important to understand that when we are producing those metals, silicon and ferrosilicon, we have another production at the same time that is the Microsilica. And that is something that we have to understand the impact in the business overall because we do have a sort of control on the amount we can produce between metal and Microsilica in a way that we can try to react to index prices in a way to maximize the results of the business.

We also have Bremanger producing silicon. It's a quite special kind of unique production where we produce through chemical reaction with a very high purity and allow us to have some specialties that is quite unique in the world and with interesting applications.

And then we have 2 ferrosilicon plants, Rana and Iceland that also produce Microsilica. And here it's quite interesting to understand. I will talk more about this in terms of product lines that silicon and ferrosilicon are not all the same, and that is what we are trying to explore.

And then we have a chemical plant in France, we call it Roussillon. This you can describe as the downstream part of the silicon value chain or the upstream part of the silicones value chain. It is not -- we don't produce silicones, but we have a chemical plant that consume close to 25,000 metric tons of silicon, and this gives us a stability in terms of production flow.

And then now I would like to spend a little bit of time in the main production lines that we have, starting with silicon, where we are transforming quartz into critical materials. I think it is interesting to understand the main raw materials in this specific segment because we have quartz, coke and coal, biocarbon and electricity. And the reason it is so important is because we have a very strong positions in all of them. We have our own mines that we sell to ourselves and also to -- and we also have external customers for quartz. And that is very important because then we can select the kind of quartz that we need in terms of balancing costs or quality ourselves. It is our decision and we decide how we want to produce the metals that we can do it -- we want to do it.

We have very long contracts for coal and coke with different sources around the world that allow us to balance also variations in price and at least have a little bit of stability before we are faced with direct cost increase. And we have long-term contracts for electricity.

In terms of products, we produce silicon metal and we produce also Silgrain that is a kind of a special product with a very high purity of silicon with different applications. And I think it is interesting to understand that not all silicon are the same.

In terms of how the material is used, we have -- we can use it in semiconductors and electronic production. But the most volumes are for the standard material for aluminum industry. And then we also sell to the chemical industry, especially for silicones and polysilicon. And that is quite interesting when you have a long value chain because -- and a good relationship with your customers, producing and preparing the product close to them because then you can also in the idea of increasing the value to the customer, you can discuss specific -- very narrow specifications for the customer and specific levels of purity because when you are able to do that, when you are able to add additional value to the customer, you can enjoy a premium over the index price. And that is an important part of this business.

But this is a commodity business. And then being a commodity business, the prices are mostly affected by index prices and both silicon and ferrosilicon are linked to a specific index. With that, we need to work in cost reduction measures to assure that we are well positioned in this value chain to be able to promote profitability through costs because you have a lower impact in the index. And you can see that in terms of silicon production, and this is where we have a common data that we can use, we are very well positioned in the Western world as the most cost competitive in 2025.

In terms of the key enablers for low-cost position, we have, as I mentioned, long-term power contracts. This is probably the most important element in terms of producing those metals that you have that you are positioned in the right place, and you have a long-term contract to have stability in a way that you have low cost and stable cost in your operation. We have integrated value chain based in captive quartz mines and electrodes from Elkem Carbon, meaning that we can play not only in terms of cost, but also in terms of quality in a way that we can take advantage of some niche specialties for silicon.

We have economies of scales and operational excellence, long-term relationship and broad supplier base and proximity to key markets. I didn't spend too much time, but we do have -- our productions are mostly located in Norway with some operations in France and Spain. We also have in Iceland. But we do have small processing facilities all over the world and sales offices in -- closer to the customers that we supply special products. And I can mention a few of them like Japan, Korea, China. We also have a large office in India. We have a very strong operation in the Middle East and Brazil and U.S. Those are the largest one. I'm not mentioning Europe because then the list will be quite long.

And then ferrosilicon, we produce high-quality products for specialty steel. Raw materials are pretty much the same, of course, with the addition of iron. And then what we produce, and I have to emphasize this again, ferrosilicon is not -- not all ferrosilicon are born the same. We can also produce high quality or high purity ferrosilicon and refine ferrosilicon in a way that we can move a little bit that we can enjoy a little bit of a premium on top of the index prices. Of course, you continue to be affected, but you have a small addition in terms of profitability.

In a way that the most standard products are offered directly to the steel industry, but we are aiming especially to offer alloy agent to obtain specific properties in electrical and specialty steel that are growing quite a lot and requiring special specifications with a higher grade of purity from some elements. And when we are able to do that and we have the competence and the technology to do it, then we can enjoy a premium over the price.

I think it is very interesting to understand that in this division, we have 3 main product lines and the third one is Materials. It basically comes from the use or using core competence to create solid returns from a wide range of specialty applications. We take the Microsilica out of our operations. We also purchased Microsilica in the market. But on top of that, learning how to use this silica fume from internal and external silicon and ferrosilicon furnaces. We learn how to use it through a very long process of R&D. We learn how to use it in some areas, construction, refractories and oil and gas.

With that knowledge, we also start using other different materials like manganese oxide and titanium oxide in a way that we are trying to broad our applications and the offering to the market. And today, it represents close to 25% of the revenues of the Elkem Silicon. And in 2026, because of the lowest -- the historical low prices for the silicon and ferrosilicon, a major part of the profitability of Elkem Silicon division comes from Materials.

What we are trying to do is to take advantage of opportunities that we see in this area in terms of setting new purpose-made grades and complementary specialty products, extending applications. And usually, for example, in construction, we can have additives to the cement that make them much more resilient to temperatures and pressure and give them a quite special position in the construction industry.

We also want to take advantage of a geographic expansion, growing in markets such as India. India is a market that is still growing quite a lot in terms of construction, requiring now a quite specialized kind of cement, meaning that we can enjoy a quite substantial margins on very specific applications even in the construction.

And then bolt-on acquisitions to widen product offering beyond Microsilica-based products. As I mentioned to you, Microsilica is still today the largest amount of material that we have, but we have started using other different materials. And what we have realized is that because of the knowledge we have developed on how to use the product, we can expand this quite beyond what we have today in a way that we can create some sort of compensation for the variations on the index prices.

Here, in terms of financial performance, I think there are 2 things to consider, or at least 2 perspectives. One of them is quite obvious, and I don't want to spend my time explaining to you the direction of this curve. But I would like to mention the second one. This is a cyclical market affected by index prices for silicon and ferrosilicon. Low prices that is mainly due to overcapacity in China is spilling over to Europe. We have attractive cost position relative to Western producers and weaker results from silicon and ferrosilicon, partially compensated by materials product line.

And then I think what the message I want to show in this slide beyond the first one that you have already laughed about it, is the significant potential for margin recovery when markets improve. We are at a historical low in these index prices. Despite of that, we still managed to keep a certain profitability. You can imagine what can happen or the potential could happen when the market recover.

With that, it comes our strategy, expand and evaluate M&A opportunities in the Materials segment. But the first thing we have to protect what we have, and we are promoting trade defense measures to limit dumping from Chinese producers. Dag has mentioned some actions that is already happening. We believe that that is the direction that Europe is the only direction that is left to Europe, because you cannot rely everything you produce in some external player that can be or not in favorable of your own politics.

And then we want to increase product specialization to reduce exposure to index prices. What we are trying to mention here is that even if we will continue to produce silicon and ferrosilicon, there are some niches where if we find the right position and offer to the customer a value that they recognize, we can get a premium on top of the index prices. But then we need to grow. And we want to expand sales of Materials and Microsilica because they give us a very attractive margins even in this very weak margin -- I'm sorry, very weak market. And you can imagine what can happen when the market starts to grow again.

And then we want to explore a broader product portfolio based on core competence and geographical diversification because the world they don't -- the world is growing, but it's not growing at the same speed everywhere. We need to be closer to where the customers are demanding those special products. Some parts of the world, they already need them, but they don't know. We need to go there and tell them how they can add value in their own industries, and that is what we have been doing in Europe. We can also do it in, for example, as I mentioned, in India.

We are a leading Western player across the silicon value chain, low-cost production based on EBS, operational excellence, vertical integration and long-term competitive renewable energy power contracts. We have brand recognition and a strong market position in the special niches. Clear strategy for maintaining leading cost position, optimizing product mix and growing the materials product line. We are well positioned to profit from market recovery from silicon and ferrosilicon, and we are exploring broadening product portfolio based on core competence and geographical expansion.

That is basically what I have for Elkem Silicon.

Good morning, and welcome to the spice shop or Elkem Foundry Alloys, which we also call it. We are the global leader in cast iron metal treatment. Serving customers all over the world, wherever there is an iron foundry with tailored-made foundry alloys that the customer carefully selects together with us through close cooperation to meet the individual need of that specific customer. That's a long sentence to remember. But it actually summarizes what we do and the characteristics of our business in a quite good way.

The division makes up about 25% of Elkem revenues. We serve more than 1,300 customers with more than 1,000 different products. And volume is not the most important in our business, but we do have production capacity to produce around 190,000 tonnes per year. A more important number is that among our 800 people, 80 of them are working together with customers every day in sales, technical customer support and R&D.

We know our customers very well because we have been working with them for a long time. We offer technical services based on deep understanding, of course, about our production process, but even more importantly, the customers' production process. And this enabled us to continuously to work on our offering to develop new products that perform even better in the customers' process.

And with a global setup, efficient production, integrated supply chain and a leading cost position, our customers know that no matter how uncertain the world is, they can count on us to deliver to their needs. And in an increasingly uncertain world, the value of a global footprint is increasing.

But that being said, we supply mainly regionally. So our plants in Norway, in Bremanger and Bjolvefossen mainly supply the European market. Chicoutimi in Canada mainly supply the North American market, Limpio in Paraguay, South America, Shizuishan in China, the Chinese market and Nagpur in India, the Indian market. But if there are problems in the supply chain or if there are new tariffs, then we have backup solutions and can supply our customers from other plants. And some of our most advanced products, they travel really well. What we make in Bremanger and Bjolvefossen, a significant part of that is actually sold in India, in China and in other Asian countries. And the same goes with inserts that we produce in Dronfield in the U.K.

Looking at the value chain, we have the same starting position as Luiz presented. We start with ferrosilicon, which we either produce ourselves or buy from others. Then we add various alloying elements, rare earth, magnesium, et cetera, to make 2 different kind of foundry alloys, FSM, ferrosilicon magnesium or inoculants, both of them being used to improve the graphite structure in cast iron to give the castings the right properties. And in order to achieve that, we offer a wide product portfolio with different chemical specification, different sizing and different packaging.

If you look at the supply in this market, the supply side is relatively concentrated. And in most markets, there is a handful of suppliers. This is the completely opposite of the customer side, where there are thousands of foundries. We are serving more than 1,300. The customer side is very fragmented. And iron foundry is often quite small with limited resources, meaning that they want and require a large extent of technical support.

Why did I welcome you to the spice shop? The reason for that is that an iron foundry uses our products as a spice. It's a very small share of the cost of the foundry. It's a very small share of the volume used in a foundry, but it is essential to get the performance of the casting right to reduce the scrap rate, to improve economics of the foundry. And because of that, you naturally take little risk when you are treating the metal and choosing which foundry alloys to use. So the entry barriers, the switching barriers in the customer are very high.

Just like when you pick your pepper when cooking a steak, you don't look too much on the cost of that pepper if you risk ruling the steak. The customers of our customers are OEMs, producers of big industrial equipment. About half of cast iron goes into automotive as engine blocks, exhaust systems, brake systems and other structures. Engineered goods goes into mining equipment, agriculture equipment, robotics. As infrastructure is developed, when population is growing and urbanization is increasing, we need more pipes, manhole covers, et cetera, which is starting to become a sizable part of the market.

And as Dog touched upon in his presentation, the growth in renewable energy is important for Elkem. For foundry alloys, it's very important since cast iron is an essential part of windmills. And this is maybe the most exciting part of cast iron. It's also the most difficult part of cast iron. When looking at the windmill, the rotor hub on top of it can be one single casting of up to 80 tonnes. That's a massive casting. Imagine the consequences for the foundry, if you have cracks in that casting, imagine the consequences of the surrounding if that casting fail and the rotors fall.

Cast iron is a mature market. Iron castings have been around for thousands of years. So you cannot really expect massive growth rates. If you look at mature markets, growth is modest. That's the case in Europe. It's the case in U.S. It's also the case in China. But then there are pockets of growth. India is becoming a more and more important market and the underlying growth in iron castings in India is between 7% and 8% per year. And then eventually, Ukraine will be rebuilt. And when that happens, it will be a massive boost to construction in Europe. That will also give growth opportunities for cast iron.

Electrification is reshaping transportation. And the challenge is that that is putting some pressure on the underlying demand for cast iron, simply from the fact that there is no engine block in an EV. But on the other hand, growth in plug-in hybrids, in heavy trucks, in train is to some extent, compensating for lost demand for cast iron from electrical vehicles. Then we see growing demand from more complex castings. I talked about windmill as an example of that. This is important for us because it increases the need for advanced alloys and technical support.

I also touched upon infrastructure renewal driven by population growth, increased urbanization, but also replacement of old infrastructure in the Western world, driving demand for pipes, manhole covers, et cetera. And as Dag also touched upon, trade policies is becoming more and more important in the markets we operate. And of course, the more uncertain things are, the higher the value of proximity and supply chain resilience is.

The key to our success is the success of our customers. It is that our customers create value. And we have to make sure that our customer is creating more value with our offering than with the offering of our competitors or the second best alternative, as we call it, when we talk about customer value management. Then we are helping the customer to create excess or extra value. And that is, of course, something we can share between us.

Our strength is a comprehensive value proposition, combining products and services. We offer tailor-made products. We have a wide range of products because we need to have products that fit the different needs of the different customers. We need to have high-quality products. We need to have low variation in our products. And even though I have to admit that the market is to a limited extent, willing to pay for low-carbon footprint, we also have low-carbon footprint products.

But for foundries, it's not only about the products. It's about how you use the products. It's about which products you add where in your process, how you add it and when you add it in the production process. This is something we help our customers with through our technical customer support people. And they are visiting their customers, in some cases, every month to sit down, go through the challenges, go through our proposals for solutions. That is a super important part of our value proposition. And that also enables us to continuously be ahead of competition, because we know so well what the problems of our customers are, and we can address that either through developing new products or new ways of using the products, which we do together with the customers, but also with other industry partners and with universities.

But having a good product and good technical support doesn't help if we cannot guarantee that the customer has the product when it is needed. And we have to be able to guarantee that to our customers. And we do that through our footprint. We do that through our supply chain, and we also do that through our leading cost position. And you might ask why do we talk about the leading cost position when we talk about such a specialty business where the value creation at the customer is the key. The point is that our customers, they need to know that they can trust us to be around. If our competitors have problems, they have to be able to know that we will be there for them. And when we create value for our customers, we create value for ourselves. And as Luiz showed, of course, when there is a general economic upturn and commodity markets are booming, it's raining on us as well.

But we provide a more stable financial situation. We have a top line over the last few years of around NOK 4 billion a year. We are delivering stable EBITDA margins typically above 20%. And this comes from the combination of price management based on customer value management and low cost. And on top of that, we have a less capital-intensive business model than the commodities. So we also provide good returns on capital employed.

If we look at our strategy, we follow the same framework as Dag presented related to protecting, growing and exploring. The fundament of our strategy is to continue doing exactly what we do every day, is to work together with our customers to help them create value. That is the basis. And that is so important that it cannot be repeated enough.

In the Western world, it's about managing margins. It's about managing prices, controlling cost and then continuously improve what we call product mix. Not always easy to understand what does that mean. What it means is that we sell more of products that are performing better at the customer and where we have higher margins. That is improving product mix.

But then there are growth opportunities. In Europe, I mentioned Ukraine, but there is also a shift in manufacturing in Europe from the core to more peripheral areas. And for us, it's essential to have feet on the ground in markets like Turkey, Morocco, where we see increased industrial production.

But there are also other markets where there is growth. I mentioned India with 7% to 8% growth per year. We are the largest producer and seller of foundry alloys in India. We have plans to expand that through organic -- through basically investments in more production capacity and more people.

In China, there's limited underlying demand growth, but we have a relatively low market share, which gives us opportunities to grow. The recipe is the same as in India. It is to increase production capacity and have more salespeople and more technical customer support people. And then if possible, we are also looking into opportunities to consolidate the market further through M&A.

So to summarize the spice shop, this is a very attractive industry structure. It has all the characteristics of that, consolidated supply side, fragmented customer side, the products can be combined with services, making up a very small share of customer cost, but essential to customer performance.

We are very modest. So that's why we say that we only have a superior value proposition. But we truly believe that we do. And through that, I think we are very well positioned to take our fair share of the growth opportunities that are in the spice business. Thank you.

Good morning, everybody. I'm happy to be here to share with you the current situation of Elkem Carbon division and highlight the main strategic actions we are put in place to better face the market competition and bring the business forward.

We are the global producer of specialized carbon products, representing 20% of Elkem revenue. We have approximately 500,000 tonnes capacity spread in 4 different continents. That is the main information we have, at least in my opinion, in the whole presentation. The 4 capabilities in the bottom of the slide explain why our position is difficult to be replicated.

First is the deep process expertise we have. Needless to say that the Soderberg electrode paste was invented by Elkem, but we are both producer and user of our paste. And that gives us firsthand information related to quality and how it works in the electrodes and consequently, how the furnace will perform with our best paste.

Second, the supply reliability and customer proximity. We manufacture close to the customers in the main producing regions, supported by a global network that we can provide backup to each other when necessary. And then we have the formulation. This is not simply a standardized commodity recipe. We change binders, we change dry aggregates. We change the formulation to adapt to the requirements of our customers' furnaces and give them the best performance and a stable operation.

And finally, the superior technical service we provide. Our technical specialists give support to customers from the beginning since the specification of the Soderberg electrode paste, up to the furnace is running stable, going all the way from the start up, adjusting parameters and helping them improving their own process. And that is based on more than 100 years knowledge accumulated by technical experts, providing support around the globe for many different types of furnaces and materials.

Our footprint is deliberately multi-local. We have 6 plants distributed in 5 different countries. And I start with Fiskaa in Kristiansand is the largest Soderberg producer in our system, but is closely linked to our core technology and our research and innovation competence.

And we have the 2 plants in Brazil. It's a different setup. We have the Carboindustrial that is a Soderberg paste producer and have more specialties in the portfolio such as ramming paste and prebaked electrode. But we have also Carboderivados that is a coal tar distillation plant, what gives us a fully integrated production chain in Latin America. This footprint improves customer proximity and transport economics, while also giving us flexibility. As I mentioned before, we can back up one another if commercially or technically necessary.

We -- this slide shows how we create value to our customers up to the end users. We provide specialized and essential consumables for high-temperature metallurgical processes, especially steel and aluminum production industry. In a simplified way, I will describe how these products work.

Soderberg electrode pastes and prebaked electrodes are used to transfer energy from transformers into the furnaces and create the conditions for having the chemical reactions and refine the ore inside the furnaces.

Ramming paste is used for sealing aluminum pot cells and create the possibility for them to achieve high temperatures to have the electrolysis. And finally, the cool tar pitch that is used as binder for Soderberg electrode production and also anode paste.

In all these 3 cases, a small deviation in the quality or something out of specification can end up in a big relevant loss for our customers. That is what triggers the importance to be present and give them technical support, because these products are application critical. That's why customer place a high value on consistency, reliable supply and technical support, even though the carbon product itself is a relatively small share of their total costs.

Health concerns, more demanding regulation and lower availability of coal tar pitch has challenged us to develop something new in the market. And our ELSEP G, that is the low emission, let's say, paste is our response to that challenge. It replaced coal tar pitch with an alternative binder that is both pitch-free and PAH-free, without compromising the stable performance of the furnace. It builds on Elkem's long-standing expertise in carbon materials, our close understanding of our customers' needs and our ability to innovate.

Our -- for us, the ELSEP G is a very good example of innovation in practice. Identify a real customer problem, use more than a century of electrode expertise to solve it and create a solution that helps our customer meet changing requirements. This is still a product that we are improving and scaling production, but the outcomes from the industrial scale trials we have done have demonstrated very promising results.

This is how we continue to create value to our customer since their needs evolve. And the demand for our products are connected with some specific factors. Basically, customer furnace activity, aluminum cell maintenance, and of course, regional dynamics can impact it as well.

For the ferroalloys and silicon demand, there is a very tight and direct correlation with electrode consumption. Since they are running, they are consuming Soderberg electrode paste or prebaked electrode, it depends on the technology. But the aluminum -- the primary aluminum demand is more recurring. That's more based on the 5 to 7 years relining of the pot cells, which makes the demand a little bit more flat.

And of course, the geography matters. Europe, Americas, and Africa are particularly important markets for us, supported by our strong local position and customer relationship. China is a large carbon market as well, but our exposure is preliminary, served through our local Chinese plants.

Our production model gives us more flexibility than the normal smelters when we refer to silicon and ferrosilicon. We produce to order, and we can adjust production campaigns and product mix to demand, rather than having to run continuously at maximum output. This helps us manage inventories and respond very quickly to regional changes.

The division financial track record demonstrates the quality and resilience of the business. Revenue peaked in 2023 before weaker utilization rates among ferroalloys and silicon producers reduced demand for our products, particularly Soderberg electrode paste. That increased competition and pushed price down.

Despite of what we see as a temporary reduction demand until industrial activity recovers, Elkem Carbon has maintained good margins. The reasons are structural. Leading market positions, a differentiated product portfolio, essential products with a lower share of the customer cost, long-standing relationship, local supply, and a variable production model that allows us to adapt output and mix when necessary.

And we also initiated, in 2003, the investment program to strengthen our competitiveness. We acquired and successfully integrated VUM in Slovakia, adding specialized paste capacity and a stronger position in Europe.

In Brazil, we expanded the production capacity of higher quality products and also improved significantly the product mix. And together, with continuous operational improvements, these investments increase our resilience and position us to revenue and margin recover when customer utilizations normalize.

Going forward, profitability will be supported by disciplined pricing and mix management. Operational excellence, of course, based on our EBS culture, also plays a very important role.

Our strategy derivates from the global strategy. We also will protect, grow, and explore with capital discipline running through all these 3 pillars. Protect means strengthening the existing business. Recover -- recovering volumes in developed markets, improving product mix, maintaining pricing discipline, managing working capital, and continuing operational excellence. The objective is to support normalized earnings and sustain an attractive return on capital.

And grow means scaling specialty and lower emission products. As I mentioned, our pitch-free paste and ramming paste, as we are already market leaders. And also, we are prepared, and that is valid for all production units. We are prepared to capture new demands that will be created by the direct reduction iron and molten oxide electrolysis that are technologies under development and will create a significant additional demand going forward.

And explore, focused on selective complementary acquisition. The emphasis is on bolt-on acquisitions that add a product capability, customer position, or geographic presence that fits our existing platform rather than larger transformational transactions. Any acquisition, of course, must have a clear industrial logic, manageable integration risk, and compelling returns. Organic improvements and disciplined capital allocation remain the foundation of our strategy.

Elkem Carbon is the global leader, and we aim to keep it that way. Our division combines global supply with a strong local presence and product quality stability. This will enable us to keep our leadership position in our key markets. Our products are essential for smelters to achieve stable operation performance despite offering a small share of their own cost. Thus, delivering reliability is the key to get premium price for demanding customers.

We provide them support with highly trained technical assistance, which speeds up their operations to reach high required performance and add value to their business.

As I mentioned in the beginning of this presentation, our global production footprint, combined with highly qualified technical support and customer long-standing relationship, shapes our business platform.

And to conclude, combining this business platform with disciplined capital allocation and cost control, we are ready to achieve the usual profitable levels again and secure successful business going forward.

Thank you very much. That is all from Carbon today. I give now the word to our CFO, Mr. Morten Viga.

Thank you, Izaias. So hello again. I am very pleased to present Elkem's revised financial targets, which are quantified and specific targets reflecting Elkem's revised strategy.

As addressed by Dag, Luiz, Izaias, and Inge, we believe we have a very solid and attractive strategy along 3 dimensions. We will protect our existing positions, we will grow our business based on #1 positions worldwide, and we will also leverage Elkem's core competencies to create additional shareholder value where possible. These elements are clearly underpinned by disciplined capital allocation, selective M&A growth projects, and a strong Elkem culture of continuous improvement, very much based on our Elkem Business System.

Our #1 strategic priority is a firm commitment to create long-term shareholder value, and there are basically 4 elements in this commitment. Number one, improve margins and stabilize margins at the higher level than previously. Number two, maintain a strong capital structure, clearly within investment grade category, enabling financial flexibility, both for attractive dividends, while also pursuing prioritized growth projects. Number three, pursue a disciplined capital spending with a clear long-term strategy on reinvestments and also a tight, proactive management of working capital. This will free up capital available for other growth or dividends to the shareholders. And number four, a clear and committed dividend target expressed as a payout ratio versus EPS.

So let's look at the specific targets. So firstly, we have raised our long-term EBITDA margin target from previously 15% to 20% through the cycle to a new revised target of being above 20% EBITDA margin throughout the cycle. And this revision is due to the fact that we believe our current business portfolio, excluding silicones, is better positioned than the previous portfolio, including silicones.

Having said that, we are very well aware of the fact that we are currently below 20%, but we believe that both, let's say, regarding internal improvements, more focused on high-margin segments, and also with a more normalized market sentiment in silicon, this is very, very realistic.

Secondly, our reinvestments should be at a level of around 100% of depreciation and amortization going forward. That's a bit higher than the previous target of 80% to 90% of depreciation and amortization. But this is also reflecting the fact that our current business portfolio is more capital light than the previous business portfolio, i.e., the starting baseline is lower than previously.

Our debt leverage should be below 2.5x last 12 months EBITDA at all time, which will preserve a very solid investment-grade rating. But it is also somewhat higher than the previous target of 1 to 2x EBITDA. And this is also a clear reflection of our conviction that our current business model is more resilient than the previous business model with #1 positions in all our 3 business segments. And last but not least, we have a -- or we repeat a clear dividend target of 30% to 50% of EPS, securing a predictable share of Elkem's future value generation to the shareholders.

So let's look at the revised targets versus historical performance, and we will start with the EBITDA margin. As mentioned, the revised target is to be below or be above 20% EBITDA margin. We believe that this is realistic. And if you look at our historical performance, we have, during the last 6 years, been at 22%. As a matter of fact, we have in 4 out of the last 6 years, we have been above 20%.

We clearly believe that the dip that we have seen in '25, and also so far in '26, is very much due to extraordinarily bad market sentiment for the time being. Achieving the new target, it clearly requires a more normalized market sentiment for Elkem Silicon. But in addition, we also have a set of very clear enablers, as presented by Dag and the divisional heads.

The most important are, of course, we will grow in high-margin segments, particularly in Foundry Alloys, Carbon and Materials, i.e., switch the portfolio to gradually to segments where we have higher and more stable margins. We will drive continuous cost improvements based on our Elkem Business System methodology. We will pursue improved pricing and margin management based on CVM. We will benefit from market normalization and higher volumes. And as we also talked about earlier today, we will capture upside from more expected EU trade defense measures, particularly within our Silicon division, and we are seeing encouraging signs of that.

So the revised target for reinvestments is 100% of depreciation and amortization. That equals approximately NOK 900 million per year. And you will see that this is very much in line with the historical level for the current business portfolio, where the average during the last 6 years has been 98%.

Our starting point is very good, with generally well-maintained assets, providing generally high operating time among the very best in this industry. And going forward, the main enablers will be to leverage on predictive maintenance systems, but also to do more with predictive AI tools. We will pursue standardized solutions, enabling economies of scale. And more and more important, we will leverage our global business model, enabling also low-cost sourcing from India, China, and other attractive locations.

On our capital structure, we have updated our leverage target, which is to have a net interest-bearing debt below 2x -- 2.5x last 12 months EBITDA at all time. We believe that this will clearly keep us well within an investment-grade profile, which is extremely important. You will see that historically, during the last few years, we have been higher than this. And this is very much due to the fact that these numbers, they show the numbers including silicones, where, of course, we had a weak profitability. You will also may -- you may also remember that we had a very capital-intensive growth project in silicones. As we do not have silicones in our portfolio anymore, of course, this will not be the case going forward.

Future focus areas and enablers to meet this target will be to improve profitability and cash generation from a better and more focused business portfolio. It will be to pursue a very disciplined capital allocation, and it will still be to maintain a strong and tight working capital management.

Our dividend target will continue to be 30% to 50% of EPS, in line with our previous target. As you are quite aware of, our historical EPS has been quite volatile, i.e., we have also had volatile dividends.

However, our payout ratio has been very predictable, pretty much spot on our midpoint target of 40%. And also the cumulative dividend payout has been quite good with almost NOK 8 billion or NOK 12.7 per share, since the IPO in '18 and '19. And the numbers also reflect an average dividend yield of 4.8%.

The main future enablers for securing an attractive and a predictable dividend will of course be to improve the underlying profitability and cash flow generation. Our new business portfolio, as I said, will be less, and is less capital intensive than the previous one, and that is enabling a higher dividend capacity. And as I also said, we will apply a very disciplined capital spending going forward, where we will balance the need between growth and direct return to the shareholders.

So to summarize, we are committed to provide long-term shareholder value through attractive margins and predictable dividends. And the main pillars will be, we will ensure a more stable and attractive EBITDA margin, above 20%. We are committed to a strong capital structure, solid within investment-grade, and with a future target of net interest-bearing debt versus EBITDA leverage ratio below 2.5.

We will pursue a disciplined capital spending through predictable reinvestments and a very tight and professional working capital management. And last but not least, our clear target is to secure attractive and predictable dividends within 30% to 50% of EPS, enabling both direct returns to the shareholders, while also maintaining financial capacity to invest in long-term profitable growth. Thank you very much.

Okay, just to wrap up, I hope this session has contributed to giving you a better understanding of the breadth of Elkem and what we are doing, and also what we can expect for the future.

When you leave, I hope there are 3 points you should take with you. One is, in the past, Elkem was perceived as a commodity producer. I hope what you've seen today is that we have successfully developed very interesting market positions within Materials, within Foundry Alloys, and within Carbon. This has happened with a combination of very strong technical competence of Elkem, combined with close relationship with customers. This is where we have higher stable margin because we have pricing power.

Point number two, we are still in commodities. We are in silicon and ferrosilicon. But here, as we have seen, we have very strong cost positions in the Western world. So we are very well-positioned for a recovery in these markets.

Point number three, the tide is turning, or I would say the tide has turned. After decades of manufacturing moving to China, Western world is now taking action. The U.S. administration has been moving very forcefully in this direction for a long time. Finally, Europe is also taking action, and with the Elkem portfolio, we are very well-positioned to benefit from this new geopolitical context. So thank you. That was it.

Okay. Thank you to Dag and all the others. We will now open for a Q&A. So from the audience, we'll start with you. Any questions? Magnus, please.

A couple of questions. Magnus Rasmussen, SEB. Firstly, on the CapEx side, just initially for as long as the market remains a bit soft, what could we expect in terms of CapEx beyond maintenance CapEx?

Quite limited. We have said that we will keep the CapEx very low this year. And of course, then we will monitor the situation going forward. We will be predictable when it comes to reinvestments, approximately NOK 900 million this or next year and the years thereafter.

And then growth CapEx beyond that will be dependent on 2 things. First of all, of course, on the opportunities, we will be very selective to choose the right projects, but also on our financial capacity.

And then hopefully when the market improves significantly in the future, you have to be, of course, disciplined on capital allocation now. What should we expect the next time we have high profits, and why do you have a cap on your payout ratio in your dividend target?

We will find the right balance. That's our target, and to be predictable, and find the right balance between, let's say, direct payback to the shareholders. We're also sure that there will be, and there are a lot of growth initiatives, and we will try to get the best of both worlds.

And of course, defining a target of 30% to 50%, it's not carved in stone. So if we have a fantastic year, I'm sure we can also see if there will be opportunities for even more dividend. But we don't talk about that now.

Okay. Any other questions? Yes.

Just to follow-up on the capital framework. I mean, it's -- that the payout ratio is lower than your comparable peers. There is no comments on extra distribution on if you have solid returns, and if the leverage is lower. If you just do the math on normalized cyclical or through-the-cycle margins, it implies significant cash accumulation on the balance sheets. This is quite weak commitment if you ask me, so why won't you commit to a stronger position on the capital framework and extra distributions?

No, I think we are very clear, and we are very predictive in our guiding. We're saying 30% to 50% dividend. We believe that is very attractive. I agree...

It's not compared to peers.

I agree with you. We believe that, let's say, the dividend capacity for Elkem, or for a company like Elkem with a normalized earning and compared to the previous portfolio, a rather capital light business model, then there should be a good dividend capacity.

But that's our thinking now, and that's our target going forward to, let's say, be predictive on solid dividends, but while also maintaining investment capacity.

Nils Foldal from Manara. Thank you for a very good presentation. It was really educational. Congratulations to the new CEO, too. Very [Foreign Language]. So -- but you say the turns have -- the tide has turned or whatever, right? So how can you actually say that in relation? Is that based on your discussions with the customers or partners? Or is it just hope and beliefs? And if so not, what kind of time frame do you see that the tide has turned?

Okay. So my comment regarding the tide has turned, clearly the development over the last decades, manufacturing has moved from the Western world to China. The first Trump administration said we have to do something about this. We are about to get completely dependent on China for a lot of very critical materials and industries.

And the U.S. administration has used the full toolbox to prevent imports from China to incentivize manufacturing in the U.S. Now we are starting to see results, because it takes some time before you can rebuild manufacturing capacity.

Now the U.S. -- now the EU has talked a lot about this, but also here we are starting to see now going from talk to action. And it's a very clearly communicated objective by the politicians. They still need to deliver to make sure that we keep whatever industry we have in Europe and hopefully pick up pace again. That's what I mean with the...

But still, you are not a part of the EU. And you speak as if you were a part of the EU.

Yes.

Secondly, you are in Canada where there is an ongoing trade war. I do not know exactly how that affects you, but I mean, you are still on the outside and not on the inside.

I agree. So that is a risk factor. We are within the European, what do you call it? Zone or trade.

Schengen.

Yes. And we have seen examples for the EU protecting their countries and keeping Norway out. But for most of the discussions, we are looked upon as being part.

And also from a strategic perspective for the European Union, we deliver -- Norway deliver about 40% of the silicon required in the European Union. So that's kind of the picture. So basically, I think it's clearly the development of manufacturing moving to China has stopped, and we are seeing signs that things are coming back.

Very good. Any more questions here from the audience? Yes.

Snorre Vevstad, Th Dahl AS. You have been emphasizing the focus on value add to your customers. And if you should give a percentage of how large part of your revenues is value add, and how large is the commodity part of your business today, and how do you foresee that? Or what's your plan, where to be on that ratio 2 years from now?

I think right now, with the low commodity prices, commodity is maybe around 40%. So all-in-all Materials, Foundry Alloys, and Carbon represents roughly, I would say, 60%. It's very difficult to answer your question because it depends so much on the pricing of the commodities. Because -- but clearly, our objective is that that's the part that is to grow. And in a few years ahead, that part should be significantly bigger than what it is today relative. Of course, if the commodity prices increase substantially, that will also affect the balance.

Okay. Any other questions? If not, the questions we have received on the webcast seem to be very much along capital allocation. So I think that has been well covered. But Elkem entered into a new power contract in Iceland, and that has been said to improve the strategic attractiveness of the plant. So could you please elaborate a bit on that, Dag? That's one of the questions.

Yes. Iceland also has very attractive prices for renewable energy. In spite of this, our Icelandic plant has not delivered financial performance to our expectation for the last 2 years because inflation has been high in Iceland and the other cost elements have increased above the Norwegian element. So we are looking for -- we are exploring all alternatives with Iceland.

Then we had a power contract that expired beginning of 2029, and we realized this was too short of a time horizon to find good strategic decisions. That's why we first wanted to secure competitive power for a longer period of time, because then our strategic options are more clear. Data center has been mentioned, and I think we are very clear we are not considering to close the plant and build a data center.

But we now have some flexibility to use some of the power maybe to strengthen the position of the ferrosilicon plant, maybe for a data center or maybe for something else. So this new contract gives us a lot of flexibility that will strengthen the plant at Iceland.

And building on that, we have 2 significant assets. Iceland is one, ferrosilicon plant is another, which are under strategic review. So when do you expect to conclude on those processes?

We cannot guide on the timing of these processes. These are, let's say, by nature, unpredictable. Right now the plant is operating very well. It is very well managed activity, and it has strategic importance for Europe. So I think in this setting, we will continue to work on alternative strategic solutions, but we cannot guide on the timing.

Okay. I think, if unless there are any more questions, I think that we conclude the meeting. There doesn't seem to be any more questions. I would like to thank all of you for participating. I would like to thank all of you for participating on the webcast. So thank you very much for that and have a nice day.

Warm welcome to Elkem's second quarter results presentation. My name is Odd-Geir Lyngstad. I'm responsible for Investor Relations in AGM. To take us through today's agenda, we have as usual, CEO, Helge Aasen and CFO, Morten Viga. Helge will cover the highlights and the business update, followed by a market update and outlook for the third quarter. Martin will then present the results for the second quarter. We are pleased to welcome Elkem'ss next CEO, Dag Teigland, today. He'll give will shortly introduce Dag, and he will give a short introduction. We will then open for Q&A after Helge Martin's presentation. And with that, I hand over to our CEO, Helge.

Yes. Thank you, and Welcome, and good morning. I'm doing this without is today. It's quite warm in here. It's actually my last quarterly presentation before handing over the CEO role to Dag. So it's been a privilege to lead Elkem. I've had this role almost continuously for 17 years. And I'm quite proud of what this organization has accomplished. I'm also confident that the company is well positioned now for continued value creation. And of course, looking forward to support Elkem going forward also in my new role as Chair of the morning. So going through the highlights this quarter. We continue to face quite challenging market conditions. And Elkem must continue to deliver on its continuous and various improvement initiatives. The organizational streamlining following the sale of the Silicones division, has been completed and the cost reductions, I would say, are on track and progressing as planned, actually, a little bit ahead of plan. We have also successfully raised NOK 1.8 billion in new equity and refinanced our main bank facilities and combined with other measures to improve the the balance sheet. We have achieved a significant net debt reduction and have improved the leverage ratio from 5 in the first quarter, now down to NOK 3.2 billion at the end of this quarter. In addition, we are actively assessing and pursuing strategic options. Of course, this is work that has just been kicked off with the new Board. Elkem's Iceland, which has suffered from weak results, actually, since 2024 has been reclassified as discontinued operation. And in addition to that, we're also looking into other opportunities to extract more value from our various assets. The Silicon Products division has improved its performance compared with the first quarter, and this is partly explained by resuming production at the Rana and Salto facilities. Carbon Solutions has sustained good performance despite low demand, soft markets. And as Odd-Geir mentioned, Dag Teigland has been appointed new CEO of Elkem's and he will take over on August 3. And I really look forward to work closely with Dag has known him since 1998. -- dog is here today. And I would like to give the word to him to briefly introduce himself. So please Dag, the floor is yours. .

Thank you. Good morning, everybody. I'm happy to be here. I hope to have the opportunity to spend more time with investors and analysts later after I start. I'm very appreciative by the trust of the Board of Directors and of Healthcare, in particular, for the confidence of taking over as CEO of -- take -- so I'll give a very quick introduction of myself. -- educated Bachelor of finance in the U.S., worked in the U.S. in Seattle for a few years, they're after shipping company. develop some new business opportunities within distribution and trading. Transitioning back to Europe. I stocked by in Spain, not my MBA degree in then a 2-year strategy consultant in Norway before I joined Elkem. And I have to say, I was very privileged to work with some of the most let's say, projects almost in strategic importance for Elkem at that time. So working with business development and then moving into more operational positions. And I actually took over the responsibilities of Helgason, when Helge moved on as a Commercial Director in the biggest division of Elkem at that time, manganese chrome being responsible for sales, marketing and raw material sourcing. So this is not the first time I take over the responsibilities from ever. Then we sold the manganese business to Eramet. I then took over the full profit and loss responsibility for the Chrome business of Auchan, consisting of mining operations in Brazil and the smelter in Morana. Eventually, we sold those businesses as well. I moved on outside of Elkem in a new CEO position. After a few years, I went back to the metal industry as CEO of Cintas. -- inforce group at that time was like Mini Elkem with manufacturing offer alloys, titanium dioxide, high-purity pig iron and energy. That company was basically acquired by Eramet. And then I joined the main shareholder of info to build up and develop an investment company. We -- as the CEO, I spent most of my time on industrial holdings, working actively on developing value this portfolio. Many of these assets were in the metal industry, both in Europe and the U.S. So I was trying to apply a lot of the principles I picked up from my time at Elkem, in particular, in the Elkem business system to develop the value of these assets. Then after 12 years, I left Homes. And the last few years, I have been working together with investors. -- on several engagement, in particular, within metals and advanced materials. So looking back, I've had the privilege of working both at an operational level where, let's say, the values are created. And at the strategic level, all the time trying to identify and implement the best structural solutions and also from an investment investor point of view, so understanding investors and shareholders. So Again, I'm very happy for this opportunity. I consider Elkem to be the most interesting opportunity in this industry right now. I think with the strong culture of continuous improvement, innovation, a strong position, a strong competitive position in the Western world. and with the most recent changes and not at least with the new ownership structure, I think there are a lot of strategic opportunities to be pursued. So looking very much forward to getting started at the beginning of August and working closely with Helge and the rest of the Board.

Thank you. .

Yes. Thank you, Dag. So as you grounded off strategic opportunities, I think that's going to be -- we'll touch briefly on that in today's presentation, but of course, more details will follow later on. And next time, Dag will talk to you about that. So let's get back to the business update. Few words on ESG performance. We continue to have strong performance across a number of ESG parameters. Safety is obviously a key priority for us. We are quite satisfied that the numbers are improving. The target is 0 injuries. At least it's an ambition, and we continue to strive for that in the way we operate. We also have clear ambitions on CO2 emission reduction targets. And much of the focus is on CO2, which I guess it should be. But I think it's also important to, from time to time, remind ourselves on where we are. And Elkem's CO2 footprint is actually more than 65% below the global average for silicon production -- this is obviously supported by renewable biopower, but also energy recovery at several of our sites and the use and increasing use of bio reductions. And in addition to that, strong operational performance with high yield, both on energy and material consumption are important contributors. So Elkem's materials are critical, classified as strategic critical raw materials, but also very critical to the green transition. And we continue to aim to be a leading company on sustainability parameters. We have now launched a new platform for low-carbon materials. It's called FeSi Leap. It's low carbon fersilicon that helps customers reduce Scope 3 emissions. -- while retaining the high performance, which is guaranteed from our materials. And in June, EcoVadis awarded us a gold rating also for 2026, which puts us among the top 5% of the companies they do -- or they rate. And the overall score improved compared to 2025, which puts us in the 97th percentile of their portfolio. So I think this is still going in the right direction, although I do expect that given the overall geopolitical scenario that both countries and companies probably will have to revise targets as we move along. .

Then coming to our financial position. As I mentioned initially, we did complete the NOK 1.8 billion equity raise. NOK 1.5 million was placed on the 6th of May through building process, well-received process. This was then followed by a NOK 0.3 billion repair issue on the 29th of May, and this rights offering was significantly oversubscribed. And in March before this, we initiated -- sorry, we initiated a refinancing of billion of bank facilities. And in April, we presented a fully underwritten financing solution, supported by Danske Bank, DNB, Nordea and SEB. And then on the 22nd of June, this new EUR 1 billion facility was signed with 10 relationship banks. The agreement comprises a EUR 600 million long-term our term loan and the EUR 400 million revolving credit facility, both with 5-year tenors. In previous agreements, Elkins had 2 financial covenants: equity ratio of minimum 30% and an interest cover ratio of at least 4x. We have changed the covenant structure now in this new facility. The new agreement still includes 2 covenants. The equity ratio of minimum 30% remains as before, but the interest cover ratio has been replaced with the leverage ratio. The leverage ratio shall not exceed 4.75x from the second quarter of 2026 to the first quarter of 2027. And then from then on and onwards, the leverage will not exceed 4.25x EBITDA. Elkem has also obtained a 10-year NOK 750 million lower from the Nordic Investment Bank on very attractive conditions, and this loan is expected to be disbursed in July. So combined, this transactions have materially strengthened Elkem's financial position.

Moving on to power and power contracts. As we have mentioned many times, access to Power at stable and competitive conditions is very important to secure Elkem's operations. Now we're talking about Norway. And in the second quarter, we signed a new long-term power purchase agreement with a cut -- this is for the period from 2031 to 2037 with a total contract volume of slightly above 1.5 terawatt hours. This will secure competitive and predictable electricity supply for Elkem's plant in Bjølvefossen, covering more than 60% of the plant's annual consumption. And as illustrated on this chart here on the right side of the slide, up to 80% of our consumption is covered with long-term contracts until 2030. And the cover is then around 65% until 2033. This new agreement is also a significant contribution to the extension of our portfolio beyond 2033. And we are continuously assessing opportunities to secure more.

Coming to the cost reduction program. I'm satisfied to be able to report that the program is on track and ahead of target. The initial target was to reduce the global workforce by approximately 300 FTEs full-time employees. This target has been exceeded as this process has been carried out. And once completed, we expect to reduce a reduction -- or to achieve a reduction of approximately 400 FTEs. The program will generate annual savings of more than NOK 600 million. In relation to this program, we also made a provision of NOK 125 million in the second quarter, which is you'll find included in other items. We are also targeting working capital reductions with a target of NOK 1 billion this year. And we have achieved by now NOK 841 million of improvements since year-end last year. Investment levels are capped this year at NOK 1 billion. And in order to preserve cash, obviously, and reduce debt. And by the end of June, the total investments amounted to around NOK 300 million, which means that we are well in line with the target, although I have to say that second half investments will be somewhat higher than in the first half.

Then coming to strategic options. The Iceland facility has had a weak performance since 2024. It's driven by a structurally higher cost base, a higher cost base than what we see, especially if we compare with the Norwegian sites. And in addition, the EU safeguard measures have reduced market access and limited tariff-free exports to what is Iceland's key market. So based on this development and situation, the Board has initiated a strategic review, which has been classified which results in classifying this plant as a discontinued operation. We have -- we are in discussions with national stakeholders in Iceland in order to evaluate opportunities for continued industrial and commercial development of the premises.

So this is early days. We'll come back with more details on this process in due course. But given the reclassification, I thought it was important to mention this.

And as part of a more broad strategic review, which we are also assessing opportunities for maximizing value across the Elkem portfolio, assessing opportunities for how to create and develop higher-value industrial ecosystems, looking at energy efficiency and sharing infrastructure, et cetera. The picture here is from Cisco and Christian Sam, I think, which is a good example. It's an industrial site where we already have invited 1 player, it's a hydrogen project under construction, and we're looking at other opportunities.

Data center developments are a hot topic these days. Obviously, this could also be an opportunity in order to strengthen industrial clusters, and support competitiveness and job creation. But as I say that, I strongly emphasize that new power supply must be developed alongside these expansions in order to to protect and enable -- to protect the existing industry and enable sustainable growth. So -- but we are open to partnerships. We're looking at various business models and of course, always trying to limit capital intensity and enable disciplined capital spending.

So again, we will come back and talk a lot more about this. We are planning a Capital Markets Day and won't at the date yet, but it's very likely to be in the second half of October. And I think that will be a very good time then to talk more about opportunities and definitely share more details with you.

So moving on to the market update and the outlook. Some of the key markets where products end up are listed here, very important demand drivers for Elkins materials and have remained -- all these markets have remained weak for a prolonged period if we compare with historical demand and activity level. In automotive, silicon metal is an essential material in electronics, batteries in all lightweight components. Light vehicle production is expected to reach 90.7 million units in 2026, which is down 2.6% compared with 2025. And this is mainly a result of lower output from China. There is an expectation that production will slightly recover in 2027. But due to weak domestic markets, China's auto exports continue to rise, this is pushing manufacturers to export excess capacity. Europe is a very available market for this, and other markets, of course, while the U.S. has put up a lot of market barriers for Chinese import.

Construction is another key market for Elkem and silicon-based products also go into high-performance concrete building materials into infrastructure. The activity here remains -- it's more a mixed picture in the U.S. The market is growing modestly. In Europe, the development remains more uneven. But there are infrastructure improvements. And also here, we see a lot of data center development driving higher demand or higher activity level. Germany's infrastructure rollout is behind schedule, 26 out of 107 milestones were reached by May. So this is also pushing expected positive demand more into 2027.

Purchase Managers Index, the PMI serves as an early indicator, as you know, changes in industrial and construction-related activities. In the Eurozone, the PMI has been above 50 for several consecutive months, which indicates that the manufacturing or services sector is expanding. U.S. manufacturing remains stronger, supported by more solid production. So that gives the big picture. -- then moving to regulatory issues, which, as you all know, has become increasingly important for everybody. The tariffs imposed by the U.S. are negative for Okay. and have created and continue to create uncertainty. In June, the final ADD CVD rates were resolved for silicon metal. The ADD rate ended up at 2.47%. -- that's the antidumping duty. It was slightly below the preliminary rate while the CVD rate countervailing duty rate which is very much linked to the CO2 scheme in the EU was slightly higher and then at 17.27%. Also in EU protective policies are building in order to support European demand and reassuring industrial value chains. -- this could have a positive impact for Elkem as the EU continue to be our main key market. EUs Industrial accelerator, active legislative proposal to strengthen the competitiveness and resilience and decarbon -- decarbonization of European industry. It is expected to gradually support the European demand and industrial activity. As a result, customers in the EU and U.S. are increasingly focused on supply chain resilience and strategic autonomy. And we see an increasing trend that there is a preference for known and trusted suppliers. So which obviously is a good thing for us. U.S. safeguards on Ferro Alloys was introduced in November 2025 and have less impact than expected. -- on price levels, so reflecting the weak underlying demand and continued substitution risk. So for silicon has been substituted with cheaper silicon metal. The effect is expected to improve and put it like that, as far alesupplytightens alongside a recovery in domestic steel production. As you know, there were significant reductions in the pre import or toll-free volumes of steel into the EU. Silicon was not included in EU safeguard for ferroalloys, silicon metal that is, but protective measures are under assessment. And finally, Alcon is eligible for 1.5 million CO2 quotas for the period 2021 to 2025. And -- we expect to receive those quarters in the second half of the year. We don't know exactly when yet. An increase in the EU steel production could have a positive impact for Elkem global steel demand appears to be bottoming out, if you look at the graphs here, but the growth is expected to be modest this year. EU steel production is showing signs of growth, which is positive as we see higher steel production in the EU as a potential demand driver also for our products. The carbon border adjustment mechanism, the so-called C-band effective from January 1 of this year. and the stronger EU steel safeguards on steel has now implemented from July 1 this year are expected also to support a higher production in the EU. And then hopefully having an impact on demand for our products. In Europe, the aluminum supply remains constrained by energy costs, while demand is subdued due to weakness in construction and broader manufacturing. European aluminium production currently receives less direct trade protection than steel with no equivalent safeguard regime in place. probably read Hydro's latest announcement that they are probably restarting in Slovakia, which I think is a sign that some activity is picking up again. The Middle East is a major exporter to Europe and global markets and very regional conflict there has disrupted regional smelters and logistics, which, as you know, has had quite a big impact on aluminum prices in general. If you look at -- a closer look at our specific markets for Elkem. -- silicon reference prices in the EU increased by around 6% by the end of this quarter. as buyers are reaching to European supply. In the U.S., the silicon prices also increased in the second quarter as higher freight costs and tariff uncertainty of a push replacement costs higher and limited imports. Per silicon prices in the EU were down in the second quarter despite the implementation of safeguard measures. Sales prices are expected to increase gradually as safeguard measures now talking about steel, gain the intended effect. In the U.S., ferrosilicon prices are impacted by tariff structures and demand is showing a more positive for here and further improvements in market conditions in the U.S. are expected.

Taking a look at China and what's going on there. As you know, our presence in China has been significantly reduced with the sale of the silicones division. But still China is by far the largest producer of silicon metal and also silicones. And silicones is an important -- is important for the silicon metal market. silicon being 1 of the main input factors and also important for Elkem's remaining operations in France. So it's therefore important to follow the Chinese market as Chinese silicon and DMC prices are having a big impact on global pricing. Silicon metal prices in China remain close to historical low levels due to over expansion over a long period of time and overcapacity then substantially and substantially lower demand from polysilicon continue to have a big impact on Chinese pricing. Soft domestic demand in China gives continued pressure on export markets and exports to Europe has increased quite significantly in 2025. And also that has continued into 2026. There are policy signals that indicate that China will introduce measures from next year to curb excess silicon capacity through more strict energy consumption standards. -- we're seeing these changes also before. But we remain -- yes, we are hoping that this can have a positive impact -- this uplift in DMC prices that you see here is largely explained by what is quite a new term for us, but it's called Entievolution actions. In China, aimed at reducing production. So they are basically taking an overall effort in order to cap production. Same thing has happened in aluminum, by the way.

Then I'll end this with the outlook for the third quarter. So trade regulations and protective measures are expected to continue to affect Elkem's markets. This could support a recovery in demand and prices in the EU if policy measures have the intended effect. Our cost reduction program will continue to contribute positively from the third quarter and onwards. The silicon products division is still experiencing challenging market conditions. -- the underlying profitability is improving. But the third quarter is expected to be impacted by seasonally lower activity levels. the Carbon Solutions division expect generally stable financial performance in the third quarter. And we would also like to remind you that from the third quarter we will report on the new divisional structure. And there's 3 new reporting areas are called Elkem Silicon, Elkem foundry alloys and Healthcare Carbon. And I think with this, I'll give the word to Morten, who will take us through the financials -- thank you very much, Helen.

And good morning, everybody. So I'm pleased to go through the results for the second quarter in more detail. And first of all, please note that Elkem Iceland has now been reclassified as discontinued operations, and hence, it's no longer included in revenues and EBITDA neither in the current nor in the historical numbers. The silicones plant in France is also classified as discontinued operations, together with our young Yang smelter in China and silicones India. So Elkem's operating income for the quarter was NOK 3.7 billion, which was 4% lower than the second quarter of last year on a comparable basis. This was mainly explained by lower sales prices, particularly for silicon metal, lower sales prices has, to some extent, been offset by higher sales volumes for silicon products. The EBITDA amounted to NOK 523 million, which was a reduction by 19% from the second quarter last year, but still up from the first quarter this year, particularly due to the fact that our Arana and salt plants in Northern Norway have resumed production in this quarter. And the EBITDA margin for the quarter amounted to 14%. As usual, we have provided an overview of some of the main financial numbers and ratio, I will not go through all of them. As mentioned, the EBITDA was NOK 523 million. and the realized derivative effects in segment Other was NOK 21 million in the quarter. Other items amounted to minus NOK 89 million consisting of losses on power and currency derivatives of NOK 50 million, currency gains of NOK 77 million restructuring expenses of NOK 188 -- sorry, NOK 118 million and other items of NOK 3 million. The net finance income was NOK 227 million, and this consisted of net interest expenses of NOK 86 million currency losses of NOK 121 million due to a weaker NOK in the quarter and not other financial items of minus NOK 20 million. The income tax was minus NOK 24 million, consisting of various smaller items. And we will get back to the financial ratios on the following slides.

So let's then take a look at the divisions, and we'll start with silicon products. Clearly, the silicon and ferrosilicon markets remain challenging with low prices for both these main products. Elkem has, however, had a strong operating performance in the quarter and in June, all furnaces are operating at full capacity with good productivity. This is thanks to Elkem's strong cost and market positions and also due to our strong operational excellence. As I mentioned, our operating income and EBITDA and also sales volumes do not include Elkem Iceland, which has been reclassified as discontinued operations. The total operating income amounted to NOK 2.946 billion, and this was a reduction of 4% compared to the second quarter last year. And the reduction in operating income is mainly due to lower sales prices for silicon, while this was partly countered by higher sales volumes. The EBITDA amounted to NOK 319 million, which was down 28% from the second quarter of last year. And the reduction is primarily due to lower sales prices for silicon. The sales volume was 9% higher than the second quarter last year last year with higher sales across all product lines, but the strongest increase was in silicon. The Carbon Solutions segment continued to report a stable performance in a very weak market environment. So the total operating income was 900 -- sorry, NOK 741 million, which was down 13% from the second quarter last year. The EBITDA was NOK 172 million, which was a reduction of 29% from the second quarter last year. The reduction in income and EBITDA is mainly explained by lower sales volumes and lower average sales prices. While our EBITDA has been then -- or the negative impact has been partly countered by cost improvements. Sales volume was down 4% compared to the second quarter last year. And as we have said, the market conditions remain challenging due to continued idle capacity and lower demand, particularly from ferro alloys customers in the Western world.

Let's then take a closer look at some of Elkem's key financial ratios. The earnings per share, the EPS amounted to minus NOK 2.09 per share in the second quarter 2026, this is clearly a weak number, but it's mainly explained by losses in discontinued operations, which also include a negative fair value adjustment. EPS for the continued operations was minus 0.15% in the quarter and NOK -- plus NOK 0.60 per share year-to-date. And the earnings per share is now calculated based on the current number of issues or issued shares. Total equity as at 30th of June amounted to NOK 12.6 billion, which gives an equity ratio of 44%. The equity ratio up to and including Q1 2026 are based on historic figures, which include silicones and the Blue Star shares. So the reduction in equity ratio is there for a reflection of the deconsolidation of silicones and also the cancellation of Bluestar previous shareholders. However, very important, the balance sheet remains very solid, also following new capital injections of NOK 1.8 billion during the second quarter. By the end of the second quarter, we had net interest-bearing debt of NOK 6.6 billion, and this is in line with our guiding a significant reduction from the previous quarter is driven by equity injections, but also targeted very disciplined working capital improvements. Elkem has also now fully refinanced its main bank facilities during the first -- or during the second quarter. There is a -- now a new term loan of EUR 600 million maturing in 2031 while the new revolving credit facility remains undrawn. The refinancing has significantly improved Elkem's maturity profile, as you can see from the graph. -- yearly maturities amounting to around NOK 1 billion has been moved over the next 4 years. And there is also a cash balance of close to NOK 4.9 billion by the end of second quarter. In addition, we have also obtained a new 10-year loan from NIB Nordic Investment Bank of NOK 750 million at very attractive conditions. And this loan will be disbursed in July, and it will further improve Elkem's financial position. The leverage ratio has been reduced from 5 by the end of the first quarter to now 3.2% based on last 12 months EBITDA of NOK 2 billion per end of second quarter. And this is very well within the new bank covenants, where leverage ratio can be up to 4.75 until the first quarter in 2027 and 425 there after. Part of LCM's improvement program is to reduce working capital and keep investments below NOK 1 billion in order to reduce debt and improve cash generation. Cash flow from operations was NOK 733 million in the second quarter of 2026. And this is a significant year-on-year improvement as I said, due to very disciplined working capital reductions and also lower reinvestments. The investments amounted to NOK 192 million in the second quarter with reinvestments of 171 million and very low strategic investments of NOK 21 million. Reinvestments amounted to 75% of depreciation and amortization. Both these items show that Elkem's program for working capital reductions and disciplined capital spending are delivering on target.

So let me wrap up this presentation by summarizing the main takeaways from the quarter. First of all, Elkem's transformation continues to build momentum, and we are ahead of target on our delivered on our committed improvements. The organizational streamlining is completed. Cost and manning reductions are exceeding targets and deleveraging is well underway. Elkem has successfully raised NOK 1.8 billion in new equity during the second quarter, and we have fully refinanced all our main bank facilities. And these transactions have materially strengthened Elkem's financial position. Strategic options are being actively pursued across the portfolio with several initiatives ongoing. And as we said, Elkem Iceland has been reclassified as discontinued operations. Elkem's underlying profitability shows signs of improvement, but third quarter is expected to be impacted by seasonally lower activity due to summer vacation, particularly in Europe. Trade regulations and protective measures such as safeguards for ferro alloys and steel in the EU will likely support demand and price recovery in healthcare market when these measures become effective. So I think that rounds off the second quarter presentation, and then I will hand the word back to Odd-Geir to facilitate the Q&A session.

Thank you. Very good. Thank you, Martin, and thank you, Helge. We will now open for Q&A. We obviously have a couple of analysts present, so I'll start with the ones that are present here, but we have also a few questions on the webcast. So if we are not covered the will obviously take them as well. So Magnus, you seem to raise your hand.

Thank you -- congratulations with a high EBITDA figure. At least today, you beat consensus by roughly NOK 130 million. If I sum the 2 segments, there's a bit of around NOK 25 million, which means there's more than NOK 100 million beat on, let's call it, other EBITDA. Can you help us explain where everyone seems to be wrong and sort of is a one-off or

No, I think nobody is wrong, but I can shed a bit of light on that. First of all, we have a hedging -- FX hedging program. where we have a transaction hedging of the expected cash flow up to 12 months. Now we have seen a movement on NOK versus Europe. So we've had a a loss in the underlying FX positions in the divisions, while we've had a profit in the FX hedging program, which is accounted in the other segment. So those 2 balances each other, but it looks -- it makes the other look better than it actually is. Then secondly, we have had good and better-than-expected cost reductions from the cost improvement program also in the other segment. Thirdly, we have better results in smaller entities like our shipping and logistics entities. And there are also some revenues related to the Blue Star transaction, where we invoiced some of the support services to Blue Star. So there are good explanations for the improvement that we have seen in the other segment and -- no 1 is wrong on this. .

We don't mind being wrong by the way.

So you stated in the chart, I think that there's like a 20-something million derivative effect. I assume then that the FX. And if we subtract that, is that sort of a sensible level now going forward, given what's happening with the cost reductions and the Blue Star agreements, et cetera.

On other?

Yes.

Yes. Well, I will not give specific numbers, but you shouldn't expect better numbers in other going forward compared to the level that we have, for instance, 1 year ago. Yes. .

On the cost improvement program. Obviously, you've had -- you've taken some provision already. Some FTEs, I assume, have already left how much of sort of the NOK 600 million run rate by year-end should we start to see already now in H2?

You can take it .

Yes. No, you should basically now start to see the major part of that from Q3. Having said that, you will not necessarily see a similar quarter-on-quarter change from Q2 to Q3 first of all, because there is a salary adjustment in Norway and other countries effective from Q2 and also because of the fact that we have already taken out some of the costs already in Q2. But compared to what was our, let's say, baseline for this project, namely the planned budget 2026, we will see a quarterly NOK 600 million per year, i.e., NOK 150 million per quarter improvement from Q3, but not necessarily on a on quarter basis. .

And the FTE reduction increase from 300 million to 400 million, is that sort of in remain core? Or does that include the fact that you're selling Iceland?

No, it has nothing to do with Iceland.

And final question for me on Iceland. When we look at sort of the difference between EBITDA with and without Iceland, it seems like the loss that's been there has increased quite a lot in Q2. Have you done anything sort of differently in terms of selling product from Iceland. Obviously, it's a big plant in European context are really reducing volumes sort of to help market situations? Or are you running that as normal?

No, the mid there's not been any particular the optimizations that has hit the Iceland bottom line. .

Yes. So you're running Iceland as normal until sort of the strategic .

We are currently running Iceland at a bit reduced capacity level, and that's also, let's say, hitting our EBITDA for the time being. That would have been done anyway. .

Great -- so just to -- on markets, which I guess you can't have any firm answer on, but I will try. You talked about China in production out of China. We've seen them actually pushing aluminum production up coal prices and so on has come up. Have you seen any signs of them actually lowering silicon production as we speak? Or is it very much still 2027.

I don't have particular or specific numbers, but we definitely have seen planned start-ups during the wet season, which is not taking place this year, which you normally would have seen. But I think it illustrates a high inventory levels. and domestic demand is definitely depressed. And they're trying to place these volumes in other markets and there are not many workers to choose from Europe is an obvious target, of course. So we'll see there is a lot of discussions now with the EU commissions, of course, driven by Gala to see if it's possible to implement some stricter protective measures also on silicon metal. So we are joining those discussions, have a meeting myself on July 17 in that regard. So we'll see what happens, but there's more momentum now than we've seen before. to do something, which I hope can have a positive effect also for us, of course, assuming that we will be able to access the market. .

First hopeful hopefully Meetings as well. And also on cost measures, you stated up the sum will likely come in October. Will there be any firm it up to the targets on the long-term cost ambitions? And when you're looking at cost measures right now, are you looking beyond the FTE reductions? I guess there's plenty of things to do outside just the FTEs.

Definitely and the NOK 600 million that we have been talking about, it's not salary cost alone, that's maybe half of it approximately. But there is definitely additional potentials -- and I think procurement is something we're actively working on right now, which will think -- or we see definitely higher potential than what we have talked about so far. So -- there's more to come. .

We will definitely come back with more specific number of plants during the capital markets update, but I think it will be wrong to boat we are saying say, in October. -- do not expect that at all.

Just lastly, on the Carbon Solutions historically been closer to 30% EBITDA margin. that had a pretty significant drop in Q1, which I think you at least explain it being some product mix, adverse product mix. What happened in Q2? And can you try to add some color on if this being a very short-lived ASP drop, which you had to do to compensate to get the volumes out? Or is it more of a new normal with what you see in the segment?

No, I think this is primarily volume driven, but there is definitely a product mix impact. We have quite big variations, especially in supplies to the aluminum sector. where you typically have much higher margins. And then on some of the more commodity part of their business. So -- but the overall picture is demand is on a low level. Fair value production is down, and the main product for Elkem Carbon is electrode-based, prebaked electrodes and -- and that's directly correlated to production capacity utilization.

Very good. Thank you. We have a few questions also on the web. So I'll take them. There are a couple of questions related to Iceland, and 1 is if data center is an action not surprisingly.

Not an expected question. We are not in a process to establish a data center in Iceland say that we are discussing with vessels mentioned, National stakeholders solutions for Iceland. -- silicon and ferrosilicon are strategic value chains in Europe. So I think our goal is to find a way to continue operating Iceland and produce those critical materials. But obviously, we cannot just do nothing because the situation is not not sustainable with the current financial performance. So we are looking at all options. And when I say all options, it means all options. .

Then it's more related to the book values because discontinued operations into the book value of NOK 3.5 billion. And the question is how much of that is related to Iceland? And what should we think about the fair value of Iceland.

We have included a separate note to the quarterly report containing more details on the book value and also the value assessment of the discontinued operations and also in particular, related to Iceland, where we also have given a range of the potential value. So I think I will refer to that note, which is quite specific. .

Is also a question -- well, we touched up on discontinued operation. We have some silicon assets in Europe. And the question is, what will we do with that? Will they be sold or expanded? .

We have no expansion plans. We have contracts now for the Xiloxproduction out of OCO in France for the next 5 years. We are also ramping up production. So I think we have a good basis now to bring this up to capacity this year, but obviously not a strategic core business for Elkem necessarily. So we are going to evaluate and are evaluating possibilities. But, Yes. That's basically my answer at the moment.

Then a question on the CO2 quotas that we are expected to receive this year. Have they been taken into the account in the P&L for first quarter and second quarter.

that's the 1.5 million quotes that we have talked about.

No, we have not received those quotas, but we have been giving, let's say, clear feedback from the weakened government that we will receive those quotas when all formalities with the EU and ESA are in place. We do not capitalize these quotas, so they were not given immediate P&L effect once we receive them, we will rather use those quotas to buy less quotas in the future or even even sell quotas if we have surplus quotas.

More than signal, it's in writing.

Yes. stating Okay. We're soon running out of time. So take 1 question -- 1 last question related to outlook for the third quarter. And the question is if you have any further details on that and the expected mentioned seasonal effects for sales figures.

August is typicationmo. So we always see some variation in the wants -- I don't have any significant additional information on that. do you want to .

No, I think we have covered this. We believe that we are seeing at least indications of normalization and also a recovery in some segments, although I will not at all exaggerate that, but we are also very clear about the fact that particularly in Europe, there is always a seasonality factor in August when pretty much the entire component goes on summer vacations. But we should also have that in mind. But underlying things are at least moving in the right direction. .

Very good. Thank you very much for that. That completes our presentation here today. So for those present here and also those following us on the web. I would like to thank you very much for your attendance and wish you all a very nice and good summer. Thank you.

Okay. I think we're ready to start. Good morning, and welcome to Elkem's First Quarter Results Presentation. My name is Odd-Geir Lyngstad, and I'm responsible for Investor Relations here in Elkem.

To take us through today's agenda, we have CEO, Helge Aasen; and CFO, Morten Viga. Helge will go through the highlights for the quarter, the market update and the outlook for the second quarter. CFO, Morten Viga, will then present Elkem's first quarter results in more detail. We will open for Q&A after Helge and Morten's presentations.

So with that, I give the word to CEO, Helge Aasen.

Yes. Thank you, Odd-Geir, and good morning, everyone. Welcome. Yes, we are expecting to close the sale of the Silicones division to Bluestar today, 30th of April. This transformation will move Elkem towards a more pure-play metals and materials company.

Another goal and the motivation behind this is to sharpen our strategic focus, tighten capital allocation and improve earnings quality. We're also using this opportunity to streamline the organization and cut costs.

And following the transaction, we plan to raise new equity of NOK 1.5 billion through a publicly announced book building process and of course, in order then to strengthen the balance sheet. And this equity offering is guaranteed as previously communicated. In addition, we have secured an offer from our relationship banks for a fully underwritten debt refinancing of EUR 1 billion.

The operational performance in the quarter was hampered by challenging market conditions. Visibility is quite limited. We have to say that due to changing trade regulations and all the geopolitical uncertainty ongoing.

Silicon Products presented a weak result in the first quarter, mainly impacted by production curtailments at several plants in Norway, that's primarily affecting the Rana and Salten sites. These stops had an estimated EBITDA negative impact of approximately NOK 250 million for the quarter.

Carbon Solutions was also impacted by negative sales mix with lower share of specialties and negative impact from currency due to a weaker U.S. dollar. In addition, the division was impacted by lower sales internally to the Silicon Products division.

So the EBITDA for the first quarter ended at NOK 249 million, which gave an EBITDA margin of 6% for the company. These numbers do then not include silicones, and we have focused now on Elkem's continuing business throughout this presentation today.

So before we go into more detail on markets and results, I'd like to say a few words about ESG. The safety numbers on the right-hand side of the slide here are now excluding the Silicones division.

Total injury rate is higher than what we have previously announced, but the graph shows a positive development, reflecting our extensive focus on health and safety measures, which is a focus we've had over many, many years.

When it comes to environmental issues, the sale of the Silicones division will further improve Elkem's carbon footprint due to a significantly reduced operational footprint in China, where the energy mix is quite different from Norway.

We do, however, continue our efforts to reduce fossil CO2 emissions. And as part of this work, we have recently been granted NOK 87 million from Enova, and this is to test and scale up the use of biocarbon in the silicon and ferrosilicon production facilities in Norway.

In April, we signed a 5-year offtake agreement for biocarbon from CHAR Tech. It's part of the announced sale of the biocarbon pilot production facility that we have been working on in Canada. And we will update our climate strategy after the closing of the Silicones transaction. And the plan is to present this at the capital market update. We haven't set the date yet, but it will be in the third quarter.

And as you can see to the right, we continue to have strong ratings from CDP and EcoVadis as you know, 2 well-known leading ESG rating agencies.

Yes. The sale of the Silicones division has developed according to plan and is expected to close today. I got the last message very early this morning that now everything is in place and the papers are on the way to [indiscernible].

The transaction was approved by the minority shareholders on the EGM on March 9th, and Elkem has obtained approval then from necessary majority of its lenders. The creditor notice period expired on April 23rd, and Elkem obtained the last regulatory filing approval in France this week.

The sale of the Silicones division comprised all assets, excluding 3 sites, Yongdeng, it's the silicon metal -- idle silicon metal plant in China; Roussillon, the upstream siloxane production in France and a smaller downstream facility in India. So we will continue to evaluate strategic options for these plants together with the new Board of Directors.

Roussillon, the French operation has entered into a 5-year supply agreement with Bluestar. We've also secured additional offtake in the U.S. So this will ensure stable operations, and we will gradually ramp this up to capacity. We're also talking to other potential customers for products from this site. So I think this will be -- turn out to be a good solution.

We will also increase capacity utilization, as I mentioned. Yes, I already said that. The Yongdeng plant in China, which produces silicon metal was idle in 2025. We are currently in the sales process of this site.

India, which is a much smaller facility. It's located just outside Mumbai. This was not included due to a very extensive regulatory approval process in India, difficult for Chinese companies, especially state-owned entities to do anything in India. And we will then take care of this and divest this facility in due course. I don't think that's going to represent any major problem.

The sale of the Silicones division, as now well known, will be settled through a share redemption of all of Bluestar's shares in Elkem. Following that, we will conduct a NOK 1.5 billion equity offering. This will be done through a publicly announced book building process in order to strengthen the balance sheet.

And as we also previously announced, the offering is guaranteed by a consortium consisting of Folketrygdfondet, Must Invest, DNB Asset Management, Nordea Investment Management and Perestroika. There are plans for a subsequent repair offering of up to NOK 300 million, which will provide shareholders the opportunity to subscribe for new shares at the same subscription price.

Elkem's Board will be responsible for the allocation of the new shares. And -- of course, we have not had a chance to sit down with the new Board and talk about this, but we can assume that the Board will adhere to common market practices, which secure the interest of all shareholders. And in that, without going into too many details, current ownership will clearly be a key allocation criteria.

In addition to the equity offering, we have been working on the refinancing of our bank facilities. And as I mentioned initially, we have secured a fully underwritten offer for refinancing of EUR 1 billion from key relationship banks. This financing is also subject to final approval from the new Board of Directors.

In March, Scope resolved Elkem's rating status and affirmed an issuer rating of BBB- and assigned a negative outlook. Elkem is committed to maintain its investment-grade rating and will sustain robust financial metrics by further cost and debt reductions. We'll come a little bit back to that.

We are also reorganizing the company following the sale of the Silicones division into 3 new -- 3 divisions, Elkem Silicon, Elkem Foundry Alloys and Elkem Carbon. And this has been done in order to improve the transparency around the key value drivers in the company.

Financial reporting based on this new structure will begin from the third quarter this year. And we plan to present these new divisions and their management in a planned capital market update then after the third quarter presentation, I assume.

In the second quarter, we will conduct a review of our asset portfolio with the new Board. And as part of this process, we're going to assess some options, strategic options for our Iceland operation.

This is necessary due to a very weak profitability and negative EBITDA at Iceland since the fourth quarter of 2024. Some structural challenges at Iceland, which I'm sure we'll talk more about later, but that will be a key topic quite soon.

After closing of the Silicones transaction, Bluestar's representatives on the Board of Directors and on the Nomination Committee will resign and then with immediate effect. The Nomination Committee has proposed new shareholder-elected Board members to the Annual General Meeting, which will take place just after this presentation.

I have been proposed as the Chairman of the new Elkem Board of Directors, but will obviously then continue to serve as CEO until a successor has been appointed and is in place.

The other Board members, the Nomination Committee have proposed are Marianne Elisabeth Johnsen. She has been on the Elkem Board since 2019. She's actually the only one continuing from the old Board of Directors.

Then we have Christian Must, Co-owner and Director of Must Invest, one of our largest shareholders. Astrid Margrethe Hilde, she's the Chief Legal and Community Relations responsible in Glitre Nett; and Richard Olav Aa, now serving as CFO at Fred Olsen & Company.

Following the reorganization of the corporate structure, we have also appointed our new Senior Vice President. So we have Luiz Simao, previously running the Carbon division is now appointed SVP for Elkem Silicon, Brazilian by origin. Then we have Elkem Foundry Alloys, which will be led by Senior Vice President, Inge Grubben-Stromnes.

And then we have promoted Izaias Entringer, also Brazilian to the role as Senior Vice President of Elkem Carbon. And this team will be physically located here in Oslo. The SVPs will be presenting their respective divisions on the announced -- on the Capital Markets update that I mentioned previously.

We are also, as I alluded to, implementing a significant cost reduction program. It's developed -- developing according to plan, I have to say that. We have spent some time on the planning phase, but saw a kickoff a couple of months ago on this program, the estimated cost reductions amount to NOK 600 million. Approximately half of this will be realized by the year-end of 2026.

And an important part of this is the rightsizing of the organization and the global workforce will be reduced by approximately 300 full-time employees by year-end, and this then represents about a 10% reduction of the remaining organization after the sale of the Silicones division.

In addition, we are targeting working capital and capital expenditure improvements totaling NOK 1.3 billion. And the inventory reductions already completed amounted to approximately NOK 500 million, which is linked to the production curtailment I mentioned earlier in the presentation.

Investments will be kept -- reinvestments will be kept at the maximum of NOK 1 billion for the year. And this program is well underway. We had total investments of around NOK 100 million during the first quarter. So we'll make a provision for the cost reduction program in the second quarter, and we'll come back with details on that when we report the second quarter in July.

Then let's move on to the market update and the outlook. It continues, I would say, to be marked by high uncertainty, low visibility. And in addition to regulatory issues, we have -- or we have regulatory issues that could have a significant impact on prices and market development for our products.

Recently, the Middle East conflict dominated the news. This has limited direct impact on our business, but higher transportation and energy costs will likely impact sales prices in the EU. So this could have a positive effect, definitely short term. But of course, this may very well be countered by lower economic activity overall.

Implementation of safeguard measures for ferrosilicon and foundry alloys in the EU has had limited price impact in the first quarter. We think this is due to a combination of weak demand and quite significant stock building that took place ahead of the safeguard implementation.

Prices for ferrosilicon are expected to increase once stock levels normalize. The production at Rana and Salten was stopped during the first quarter and partly restarted in late March, and both plants are now back in full production from the end of April.

A positive factor for Elkem is that we have -- or we are eligible for 1.5 million CO2 quotas for the period 2021 to 2025 after the Ministry of Climate and Environment have approved our complaint case. So following this decision, we have not purchased quotas in 2025.

Adjusted for this, the net value of excess quotas amounts to approximately NOK 1 billion. And we expect to receive them -- these quotas in 2026. We have a constructive dialogue with the authorities on this matter, but I have to say that we do think this is taking far too long to conclude.

Silicon metal was not included in the safeguard measures in the EU when ferrosilicon measures were introduced. The silicon market in the EU clearly suffers from low-priced imports, particularly from China.

Protective measures are being assessed. We know that. In any case, if it's decided, it will take time, and we will come back to it as soon as we have more information on that potential measures.

On steel, a new safeguard regime will be implemented from 1st of July in the EU, which will limit imports into the EU of a maximum 18 million tonnes. The total consumption in the EU is around 150 million tonnes per year, and the import last year was 49 million tonnes. So any imports above this level will be taxed with a duty of 50%.

So this is expected to increase steel production and capacity utilization in the EU, which again, we think will have a positive impact on the demand for Elkem's products, namely ferrosilicon, foundry alloys and also electrode paste.

So moving on to the key market trends and indicators, automotive, as we talked about many times, is an important sector for Elkem, driving demand for many of our products. Silicon metal is an essential ingredient in electronics, batteries, lightweight materials.

The automotive production in Europe has declined and the outlook remains weak due to soft demand and significant import pressure from China. A new minimum price mechanism on EVs imported into the EU could offer some protection.

Construction is another key market for us and silicon-based products go into high-performance concrete, into building materials, into infrastructure. Europe is seeing some signs of a gradual recovery, but performance varies significantly across countries and segments. U.S. industrial activity is also relatively soft with the growth in sectors such as data centers, power infrastructure and also institutional-driven projects.

PMI numbers are normally a good indicator and for the economic sentiment and globally, the PMI indices are showing a mixed but at least stable picture. Manufacturing remains soft, but we do see signs of this downturn now it's starting to ease, and we see some mild expansion in the U.S. Picture in Europe is mixed and the German economy continues to contract. It remains to be seen then how this Middle East situation will impact the markets longer term.

If we look -- take a closer look at specific markets for Elkem and start with silicon. The markets are still challenging with continued price pressure. Silicon reference prices in the EU have declined in the first quarter and were influenced by continued weak demand and low import prices.

And it's quite remarkable when you look at the difference of price now in the U.S. and the European markets. In the U.S., prices increased slightly in the first quarter, mainly due to imposed tariff imports.

So I don't think I have ever seen prices in the U.S. being double the level of Europe. In China, silicon prices remained low, hampered by weak demand and significant overcapacity, also resulting in some stock buildup,

The ferrosilicon markets have many of the same underlying drivers as silicon. Markets are characterized by -- also here by weak demand, the new safeguard regime for steel in the EU is expected to increase production and have a positive impact on the ferroalloys in general.

Ferrosilicon prices in the EU have increased moderately after the implementation of safeguard measures. But as mentioned, the impact so far has been quite modest due to stock buildup prior to the implementation and which we think is still ongoing to normalize. In the U.S., ferrosilicon prices are impacted by tariff structures and the demand is showing a positive development and further improvement in market conditions are expected there.

The market for carbon products is similar -- sorry, the market for carbon products is much smaller than silicon and ferrosilicon. We don't have reference prices here, but -- and demand differs a lot by region and is influenced by steel, ferroalloys and aluminum industries.

Global crude steel production declined by 4% in the first quarter this year compared with last year, primarily driven by lower activity in China, where output decreased by 7%. The European production decreased by 4%, while North American production was on a stable level.

Steel and ferroalloy markets continue to face challenges. However, Carbon Solutions specialized product offering and also our wide geographic presence will provide resilience and stability in earnings.

And as mentioned, the new safeguard framework for steel in the EU is expected to support higher steel production and could definitely positively impact the markets for Carbon Solutions.

Then moving on to the outlook for the second quarter. The conflict in the Middle East, along with trade regulations and protective measures is expected to keep impacting Elkem's markets and leading to continued uncertainty. However, Elkem is well positioned due to our diversified geographic presence and also strong market and cost positions.

Silicon Products is still experiencing difficult market conditions, but the results are expected to improve gradually as production now returns to full capacity utilization. However, there will be an impact of costs related to restarting production and ramping it then up to full capacity.

Carbon Solutions anticipates a generally stable financial performance in the second quarter compared to the first quarter.

So I think with this, I'll give the word to Morten to take us through the financials.

Thank you very much, Helge, and good morning, everybody. So let's start with the overall numbers, and these numbers are excluding Elkem Silicones, where we expect to have the closing of the divestment later today.

Elkem's operating income for the remaining business amounted to NOK 4 billion for the quarter, which is down 7% compared to the first quarter last year. And the reduction was applicable both for Silicon Products and Carbon Solutions.

Elkem's EBITDA for the first quarter amounted to NOK 249 million, and this was a reduction by 65% from the first quarter last year. The EBITDA was significantly impacted by the production stops at Elkem Rana and Elkem Salten, which was estimated to have a negative impact of NOK 250 million minus for the quarter. And this resulted then in an EBITDA margin of 6% for the quarter.

As usual, we have provided an overview of some of the main financial numbers and ratios. I will not go through all of them. And as closing of the Silicones transaction is expected today, we are focused on Elkem's figures for the quarter and what the key ratios will be for our continuing operations without silicones.

As I said, the EBITDA amounted to NOK 249 million, where there was realized derivative effects in segment Other of only NOK 1 million in the quarter. Other items amounted to NOK 18 million, and this consists of gains on power and currency derivatives of NOK 40 million, currency losses of NOK 24 million and other items of NOK 2 million.

The net finance income was NOK 366 million. This consisted of net interest expenses of minus NOK 102 million, currency gains of plus NOK 471 million, and this is due to a significantly stronger NOK, which is the functional currency versus euro, where we have the majority part of our loans. And net other financial items amounted to minus NOK 3 million. The income tax was minus NOK 63 million, giving a tax rate of 26% for the quarter.

Let's then take a look at the divisions and start with Silicon Products. The silicon and ferrosilicon markets remain difficult, and the results were significantly impacted by the reduced production at several plants, particularly Salten and Rana, where we had a full production stop at the part of the -- or during a part of the quarter.

Total operating income amounted to NOK 3.3 billion, and this was a reduction of 5% compared to the first quarter last year. The reduction in operating income was mainly due to lower sales prices for silicon, but this is partly countered by higher sales volume compared to the corresponding quarter last year.

The EBITDA was NOK 122 million, which was down 75% compared to the first quarter last year. And this reduction is primarily driven by the full and partly production stops at several plants, including Rana and Salten, but also at other plants in Norway, we had production curtailments for longer or shorter periods.

And as I said, the production stop had a negative EBITDA effect of approximately NOK 250 million in the quarter. Lower sales prices this quarter also impacted the EBITDA compared to last year's EBITDA.

Sales volume, however, was 14% higher this quarter compared to last year. and sales volumes were higher across all product lines, as we have focused a lot to increase sales in order to take down inventory and to reduce working capital.

The Carbon Solutions division presented a relatively weak quarter, but still generated an EBITDA margin of 23%. The first quarter was affected by negative sales mix, particularly lower share of specialty products.

Total operating income amounted to NOK 722 million, which was 16% down compared to the first quarter last year. And the EBITDA amounted to NOK 165 million, which is a reduction of 37% from the first quarter last year.

In addition to the negative sales mix effects, the operating income and EBITDA were also impacted by currency effects. The weakening of the U.S. dollar versus the NOK and Brazilian reais has had a negative impact on the results.

And the production curtailments in silicon products, which represent a major customer base for Carbon Solutions also had a negative effect for the Carbon Solutions results. We also experienced low demand in South America due to trade restrictions into the U.S.

Sales volumes were stable compared to the first quarter of last year, but market conditions remain challenging due to continued idle capacity and low demand from the ferroalloys industries.

So let's then take a look at some of Elkem's key financial ratios. The EPS amounted to NOK 0.56 per share for the first quarter of 2026. And this number is calculated excluding Bluestar shares, which will be redeemed in connection with the closing of the Silicones transaction later today. Having said that, we should also remind you that the number of shares will increase in connection with the equity offerings later in May.

Total equity for Elkem adjusted for the sale of the Silicones division amounted to NOK 11.6 billion as per the end of the quarter, and this gives an equity ratio of 42%.

Now if we adjust for the new equity offering of NOK 1.5 billion and the planned repair offering of NOK 0.3 billion, the pro forma equity ratio would be 46%. And this clearly means that the balance sheet remains solid also after the Silicones transaction and the redemption of the Bluestar shares.

By the end of the quarter, Elkem had net interest-bearing debt of NOK 9.3 billion, and this gives a leverage ratio of 5 based on the last 12 months EBITDA of NOK 1.9 billion. Adjusted for the already underwritten equity offering of NOK 1.5 billion and the planned repair offering estimated to NOK 300 million, the pro forma net interest-bearing debt was NOK 7.5 billion, and this then represents a leverage of 4x EBITDA.

Leverage is expected to be further reduced going forward by working capital improvements and effects of the cost reduction program, which will kick in from Q3 and onwards. And we're also targeting a well-distributed maturity profile.

And as Helge said, we have then entered or we have got an offer for a favorable refinancing package, where there will be a refinancing of EUR 1 billion, and we have secured a fully underwritten offer from 4 of our main relationship banks. The interest cover ratio amounts to 6x by the end of first quarter 2026.

As I said, it's a key priority to reduce working capital and also have a very disciplined program on CapEx in order to reduce debt and improve cash flow generation going forward. So cash flow from operations was NOK 169 million in the first quarter, and this was an improvement from the corresponding quarters despite lower EBITDA.

We have, during the quarter, reduced inventories by approximately NOK 500 million due to higher sales and lower production. And this reduction will then be converted into lower working capital and freed up cash during the next quarter.

The investments were very moderate and amounted only to NOK 122 million in the first quarter, where reinvestments amounted to NOK 111 million and strategic investments are basically at [ 0 ] or NOK 11 million.

The reinvestments amounts to 44% of depreciation and amortization. And this clearly is an indication that our program, our commitment to cap investments at maximum NOK 1 billion is progressing well, and we will definitely deliver on also on that target.

So -- we have not included silicones numbers in the previous slides, but of course, we still are the owner of silicones until closing later today. So this is a slide summarizing the silicones performance in Q1. As you know, the division has been classified in the accounts as assets held for sale and discontinued operations.

Overall, the division reported improved results compared to the corresponding quarter last year, mainly due to cost improvements. Total operating income was down 4% from Q1 2025, mainly driven by stronger NOK versus main business currencies.

EBITDA, however, was up 85% from Q1 2025, mainly explained by lower raw material costs, higher sales volumes and other internal cost improvements. Sales volume was up 10% from Q1 2025, driven by higher sales of commodities and specialty products in main regions.

DMC prices in China were stable in Q1, and there clearly is an effective problem to curb over production in China. And we see that anti-involutions, similar anti-involution measures are underway in a number of sectors in China. And the measures from silicones producers have so far been effective at curbing overproduction and increasing sales prices [ to ] price weak underlying demand.

So let me wrap up this presentation by summarizing the main headlines and takeaway for the quarter. First of all, we are streamlining the organization and implementing targeted cost measures to support a more focused business model. And the target is clearly to improve Elkem's profitability in a very challenging market situation. And of course, when market sentiment is improving, we will still have a great benefit for improving our cost position.

We're also clearly implementing measures to strengthen the balance sheet, and we will conduct a guaranteed NOK 1.5 billion equity offering and plan a subsequent repair offering after closing of the Silicones transaction.

And as I said, in addition, we have secured a refinancing of bank facilities of EUR 1 billion, NOK 11 billion, and this refinancing is underwritten by 4 main relationship banks. So following the guaranteed equity raise and the guaranteed refinancing, Elkem's financing position is considered to be very robust.

The first quarter was clearly weak, but the profitability is expected to improve in the second quarter as production gradually returns to full capacity. So far, we have not experienced any tailwind from improved market conditions.

Trade regulations and protective measures are likely to continue affecting Elkem's markets, and we expect that market conditions will gradually improve. We believe that we continue to be very well positioned due to strong market and cost positions when the markets improve.

So let me finish up there and hand the word back to Odd-Geir, who will then chair the Q&A session.

Thank you. Perhaps, we will then open for Q&A and I'd like to start with the people here in the audience and see if there are any questions, and I expected that to be among those. So please.

Yes. [indiscernible] microphone.

No, not needed.

Yes. So just wanted to touch on the silicon product figures because the volumes were very high despite some production cutbacks. Can you say a bit about the dynamic there? Are you back to normal or the desired levels in terms of tonnes of inventory? And is the quarter negatively impacted by you having to sell at a discount or something to get that much volume in a relatively weak market?

Yes, you can probably add Morten. But I think definitely, we see some positive signs on demand outlook. And otherwise, we could not have restarted production. So I think the underlying sentiment is good in terms of sales. And you're right, it did pick up during the quarter. So on inventory reduction, we can probably do more. We'll always have an attention to that. But what we intended with this curtailment has been achieved.

Yes. I think the answer is yes to your questions. Our sales was -- sales volume was high in Q1, but we had to sell deliberately also in marginal markets at low prices in markets that we usually do not sell big quantities into, but we did that in order to reduce inventories. So obviously, the EBITDA impact from that was not great, but we will reduce inventories and working capital, and that was needed.

Clearly, we also had a negative profitability impact from the sale of surplus power as we closed down the plants in Northern Norway and Rana and Salten. We had a major amount of surplus electric power. that needs to be sold in the market. At the beginning of the quarter, spot prices were quite high. But due to heavy precipitation, the power prices had a drastic decline. So we also had a loss on that impacting the quarter.

So going forward, I think the important thing is that we have now laid a basis for a significant reduction in inventories that will then cause a significant reduction in working capital [indiscernible].

Can you sort of quantify if you had normal production and you didn't have to sell those extra volumes at a bit of discount -- or in soft markets, like roughly how much higher EBITDA would be?

No, I think the number that we have announced of NOK 250 million, that represents the difference versus normal run rate given current market conditions.

And another question as well on the CO2 quotas that you are going to hopefully soon receive. Can you say a bit about what is -- what's the holdup? I mean, it's been almost a year since it seemed like it was sort of a done deal that you were getting this quotas. And is there any risk at all that it could be [indiscernible].

Not really. It has been confirmed in writing that we have support for our complaint. This is the second round time we do this. We also have a similar process in the round of allocation. So why the Norwegian government keeps creating problems like this, it's hard for us to say. But I cannot give any answer on bureaucratic processes that takes much time. No reason to believe that we should not get this.

There is also a formal, let's say, notification process with EU on such matters, and that's probably also a bit time consuming. But Helge is absolutely right. We have it in writing that we will get those quotas.

And then finally for me, it seems like you are sort of looking to potentially sell some of these units that you are left within silicones and also sort of looking into the Iceland units. Can you -- I don't know if you can give any indication of like what you can be looking at in terms of sales prices or how much they are worth or at least like how much book value is tied up in these units so we can have some sort of idea on the value.

I think it's very hard to start guessing on the value in potential transactions. I don't want to do that.

But you know, I guess, what you have in or thought.

I think we would like to, of course, first of all, initiate a discussion with the new Board to be elected later today. And I'm sure we will address these issues during Q2. I think it's a bit premature to start addressing this right now.

But we are very open about the fact that there are, of course, 3 silicones assets where we have plants. And we're also quite open about the fact that we have a challenge in Iceland that we will solve and we are pursuing, let's say, several options.

Other questions from the audience here before we go to questions on the web? If not, there are also some questions here on the web. And one question is regarding sales that you touched upon also with regards to what we're seeing now in the second quarter and the potential to reduce inventories further. Is it fair to say that selling at lower prices continue into the second quarter like in the first quarter?

No, that's not the intention.

[ Very sharp and clear ]. The question is also, could you provide some more color regarding the cost in the second quarter restating (sic) [ restarting ] the facilities, Rana and Salten in particular?

No. There will always be some start-up costs when you restart furnaces, not big amounts, but we have then fully restarted both Salten and Rana in April. So although capacity utilization will be higher in Q2 versus Q1. And as such, the profitability of these plants will be significantly better. We will not have a normal capacity utilization. So there is a potential for a further increase in Q3 and onwards.

There is a question also about Iceland that was mentioned in the presentation that we look at our asset portfolio. And the question is if you could elaborate on the structural challenges in Iceland.

I think Iceland has one competitive advantage that's hydropower or renewable power. Other costs are historically on a higher level than what we see in Norway, for instance, compared with Norway. And I think that has become even more difficult combined with safeguard measures and especially as very strong Icelandic currency have deteriorated the competitive position. So we need to look at all potential or all possible options for the future of Iceland.

I don't think it's right to speculate on who they are right now, but obviously, an important topic with the new Board and we will be -- we will definitely elaborate more on that in the second quarter presentation.

You mentioned safeguard and safeguard has been implemented for ferrosilicon. Why has the prices moved up further?

So I think the -- obviously, low demand is still there, but the destocking that's been going on is the main explanation for that. We do expect something -- we will see some improvement in price levels now going forward. And there are also some positive signs from steel in general, which I think can support ferrosilicon in general.

And with safeguard on ferrosilicon and steel being implemented, do we see similar measures for silicon metal going forward?

I think that's a more controversial issue in the EU to look at the exposure of different consumers. So I know that has been discussed for quite some time, but there doesn't seem to be any, say, consensus around how and when to implement such measures. but definitely needed because there is antidumping on silicon from China, but it's not enough to protect EU-based players. So as a consequence, very little capacity utilization is taking place in the EU right now.

Yes. Then there is a question about the refinancing package and if you can say anything about terms and conditions?

No, first of all, we're very happy to have this refinancing package in place. We believe it's a very good package. But it's up to the new Board to finally approve it, and the Board will be elected later today. So let's have the approval, and then we will disclose more details on the package.

And then the last question here before we wrap up. If we can see any further working capital release in the second quarter as compared to first quarter.

Definitely. We have made a commitment. We will take down working capital by NOK 1 billion during the year. I think a major part of that will be realized already during Q2. We have already laid a good foundation with the reduction in inventories. There will probably be even more reduction in inventories.

And then we are working on other measures also on credit terms, which in total should exceed the working capital reduction to more than NOK 1 billion for the year. And then the major part already in Q2.

Very good. That was the last question, and that concludes our presentation today. So I would like to thank people in the audience for attending and also those on the webcast following us there. Thank you very much, and have a nice day.

Thank you.

Thank you.

Good morning. My name is Dag Opedal, and I'm the Deputy Chairman of the Board of Directors of Elkem ASA. Before we start the official general meeting, I first wish to give you some practical information.

Our secretarial function today is managed by DNB registrar department. They will be in charge of registration and counting of shares represented in the meeting and in due course, the counting of the votes cast at the meeting. As you are aware, this meeting is conducted as a virtual meeting.

I assume that most shareholders present are well acquainted with the digital general meetings conducted by use of the Lumi platform. And for them, which this solution is new, you will find information under the home button.

Agenda item #1. I welcome you all to this extraordinary general meeting of Elkem ASA. Together with me are our CFO, Morten Viga; Senior Vice President for Business Development, Morten Magnus Voll; and Head of Investor Relations, Odd-Geir Lyngstad. Present is also Hans Cappelen Arnesen from the law firm, Thommessen.

I will now refer to the list of represented shares here today. 19,751,630 shares are represented by proxy. 131,375,379 shares are represented by advanced votes. 338,338,536 shares are represented by instructions to the Chairman or myself. For shareholders participating online and representing in aggregate 159,006 shares. In aggregate, this is 489,624,551 shares represented, which constitutes 77.2% of the share capital.

We now move on to Item #2 on the agenda, where the Board of Directors has proposed that Hans Cappelen Arnesen, partner with Thommessen, is elected to chair the meeting and Morten Viga, our CFO, is elected to co-sign the minutes together with the Chair of the meeting.

I will hereby kindly ask the shareholders to cast their votes on agenda #2.

[Voting]

The voting is now closed, and the count of votes shows that the proposals have been approved. I will then hereby hand over the management of the General Meeting to Hans Cappelen Arnesen.

Thank you, Dag. We will then move over to agenda Item 3, which is approval of the notice and agenda for this meeting. The Board of Directors has proposed that the notice and the agenda are approved by the general meeting. If there are no comments or questions to this agenda item, we will go to the voting over this item. So if you have not voted yet, please do so now because we will close for voting shortly.

[Voting]

The notice and the agenda have been approved by the general meeting. When it comes to the exact number of shares voted for and against or abstaining from each agenda item, that will be disclosed together with the minutes from this meeting. So I will not read the numbers under each agenda item.

We will then move on to agenda item #4, which is approval of the share purchase agreement that has been entered into with Bluestar. The background for this proposal is explained in the notice of the agenda and also in the statements from the Board referred to therein and the statement from PwC, which is also referred to in the agenda. Are there any comments or questions to the background for the proposal? And you will see the proposal and the proposed resolution on your screen.

There seems to be no comments or questions to this agenda item. So I suggest we move on to voting. So those of you who have not voted yet and would like to vote can do so now, and we will close for voting shortly. On this agenda item, Bluestar is not entitled to vote, so their shares will not be included in the counting.

[Voting]

The voting has now been closed, and the proposed resolution is approved by the general meeting. We then move on to agenda Item 5, which is a share capital decrease related to the share purchase agreement. The background for the proposal is explained in the notice of the general meeting. But if there are any comments or questions to the proposal, please let us know. Otherwise, we will move on to voting on this agenda item.

There seems to be no comments or questions to the proposal, and you can see the proposed resolution on your screen. So if you have not voted yet, please do so now if you would like to vote because we will close for voting shortly.

[Voting]

Thank you. We have now closed for voting and the proposed resolution has been adopted by the general meeting. And that was the last agenda item for today. So thank you all for participating, and the general meeting is now adjourned. Thank you.

Good morning, and welcome to Elkem's Fourth Quarter Results Presentation. My name is Odd-Geir Lyngstad, and I'm responsible for Investor Relations in Elkem. Today's presentation has been extended because Elkem has reached a significant milestone to sell the majority of its Silicones division to Bluestar. But before we present the details of that transaction, we will take you through the fourth quarter results.

As usual, we will go through the highlights for the quarter and give you an update on the markets and the first quarter outlook. CEO, Helge Aasen, will take us through the first part of this presentation before CFO, Morten Viga, will present Elkem's fourth quarter results in more detail. We will open for Q&A after the presentation of the sales of the Silicones division. So with that, I give the word to CEO, Helge Aasen.

Yes. Thank you, Odd-Geir, and good morning, and welcome, everyone. So as already indicated by Odd-Geir, we have the pleasure of announcing that we've entered into a sales agreement with China National Bluestar, our majority shareholder for a sale of most of the Silicones division. This transaction will be settled through a redemption of all of Bluestar's shares in Elkem. And as already mentioned, we will come back to the details later in the presentation about this transaction.

The result for the quarter was relatively strong given the current market conditions. And I think we can say that as most of our competitors in Europe have temporarily or permanently curtailed production, while we have, throughout the quarter, maintained close to full capacity utilization.

The EBITDA for the fourth quarter ended up at NOK 890 million, which gave an EBITDA margin of 12% for the group. And if you exclude Silicones, which is reclassified as assets held for sale and which will now be sold, the operating income was NOK 4 billion with an EBITDA of NOK 485 million, which is then also representing a margin of 12%. We have been able to partly mitigate low demand and declining sales prices with cost improvements, both on raw material costs and other operational costs. And that is, of course, still ongoing.

In the quarter, Silicon Products was impacted by lower sales prices. However, we do see higher ferrosilicon prices in the EU due to the safeguard measures restricting imports of ferroalloys into the EU. Carbon Solutions had lower sales in the fourth quarter due to continued idling of steel and ferroalloy capacity, which we have seen across many main operating regions.

In the quarter, Silicones delivered further profitability improvements, which is primarily due to higher sales prices towards the end of the year in Asia Pacific and generally strong performance on cost improvements. The share redemption in connection with the sales of the Silicones division will impact Elkem's equity. And due to that, the Board has proposed not to distribute a dividend for 2025.

So before we go on to present the market update and results, I'd like to say a few words about ESG. At the end of last year, it was unfortunately marked by a tragic accident at one of our plants in France. On the 22nd of December, an explosion occurred at an R&D facility in our Silicones facility in Sanfo, just outside Lyon. We had 4 colleagues injured and sadly, 2 of them later passed away from the injuries that were sustained.

Internal and external investigations are still not finally concluded. But of course, regardless of that, I can only say that this is a very tragic setback in our efforts on safety work. And obviously, such an event right now overshadow other achievements within our ESG work. But we continue to get good ratings on ESG assessments in general as is illustrated on this slide.

And moving on to trade barriers. This continues to impact markets and is also having an impact on Elkem, both directly and indirectly. EU's safeguard measures that came into effect in November last year, unfortunately, exempted Norway and Iceland. So we are outside of the EU safeguard measures. I think that's been broadly covered in the media. However, we have received country-specific quotas, which puts us in a rather beneficial position compared with most other countries.

Those quotas are approximately 70% to 75% of historic sales. And this has been combined with the pricing benchmark of EUR 2,400 as a reference when you calculate the tariffs for sales, which exceed the quotas. So far, ferrosilicon prices are up about 20% since this was implemented. And if these measures are effective, we will -- we expect to see further price increases.

Then moving on to the U.S., countervailing duties have been imposed on silicon, silicon metal, imported from several countries, including Norway. And the preliminary CVD rate is close to 17%. In addition, there are also antidumping duties announced, which is close to 4%. So that brings the total tariffs now that was 5%. Then we have the Trump tariff, 15%. And then we put this on top of that, we are now up to around 40% on silicon metal exported from Norway to the U.S.

So the basis for the CVD duty is based on CO2 compensation and the allocation of CO2 quotas, which Norwegian companies receive under the EU carbon scheme. Of course, our position is that EU's policies on CO2 quotas and CO2 compensation do not constitute countervailable subsidies, harming the U.S. domestic industry as there is no CO2 tax in the U.S.

So the case is expected to be finally decided in June this year. And so far, I think we can say that we've been fairly successful in navigating and adapting to unpredictable trade dynamics, while we are leveraging a global business model and strong -- with strong cost and market positions.

Here, we have included a summary of Elkem's performance over the past years and how that compared to our communicated financial targets. So if we look at the 3 last years, we have seen deteriorating market conditions due to lower economic activity, global overcapacity and a very, I would say, big reshaping of global trade. So despite these challenging conditions, Elkem has met the financial targets over the cycle, very much due to our diversified business model and strong operational execution. And of course, we have continuous cost focus.

So since 2020, we have delivered a compound annual growth of 5%, which is in line with our target. And the EBITDA margin during the same period was 16%, which is also within our target range. And if you exclude Silicones from these numbers, the performance is even better with a compound growth in operating income of 6% while the EBITDA margin was 21%, exceeding the target range.

Then we move on to the market update and the outlook. So let's have a look at some of the key markets and market trends and indications -- indicators, I mean, automotive is an important sector for Elkem, driving demand for many of our products as silicon is essential in electronics, in batteries and in aluminum, lightweight components.

Markets, particularly in Europe, have declined and the outlook remains weak. Soft demand combined with import pressure from China. A new minimum price mechanism in the EU on imported Chinese electrical vehicles could offer some protection; remains to be seen. In the U.S., the outlook for 2026 is also relatively soft due to the pressure on affordability and an overall weak demand for EVs.

Construction is another key market for Elkem, for Elkem silicon-based products, which go into high-performance concrete, building materials and other infrastructure. It seems that Europe is seeing a gradual recovery in the sector, but the performance is varying significantly across countries and different segments.

The U.S. industry is also relatively soft, but data centers, power infrastructure and institutional projects are showing growth. The PMI number is normally a good indicator for the economic sentiment and global PMIs show a mixed but stable picture. Manufacturing remains soft, but the downturn seems to be easing now. The U.S. stays in mild expansion, supported by improving output, though underlying demand and export orders remain soft. Europe is a mixed picture with the German economy continuing to contract, keeping the broader Eurozone picture rather subdued.

If we look at the specific markets for Elkem and start with the silicon. As illustrated on the graph, the silicon reference prices remained on a low level during the quarter. Year-to-date figures for November 2025 show that exports from China to Europe increased significantly compared with last year. And this, combined with, I say, generally weak demand have put quite significant pressure on prices in the EU.

In the U.S., silicon prices increased slightly in the fourth quarter, but also here, the demand is relatively low. Prices are, however, expected to rise in 2026 due to tariffs, antidumping duties and a tightening domestic supply. In China, silicon prices are affected by challenging market conditions. Power prices are increasing and sales prices for silicon remain on a low level. A little bit positive is that production curtailments are expected from several producers.

Moving on to ferrosilicon. As you know, we have many of the same underlying drivers as the silicon metal. The overall picture for Elkem is also here marked by weak demand. But as mentioned earlier, we've seen an increase in reference prices by around 20% following the implementation of the safeguard measures in the EU.

And in addition, the EU has announced a tightening on the safeguard measures for steel. The annual tariff-free import quotas will be reduced. And the out of quota duty will be doubled to 50%. So as these measures will take effect, it is expected that steel production in the EU will increase. I think Outokumpu reported a similar picture yesterday. This could also have a positive impact on the demand for ferroalloys and electrode materials supplied by our Carbon division.

In the U.S., ferrosilicon prices were marginally down in the fourth quarter due to weaker demand. And in China, ferrosilicon prices remain on a low level despite further production cuts to address overcapacity. Then the market for carbon products, obviously much smaller than the market for silicon and ferrosilicon, and there are no available reference prices here. Demand for carbon products differ by region, influenced by steel primarily, which again drives consumption of ferroalloys and aluminum is also an important driver.

This was -- yes, global steel production actually declined by 3% in the fourth quarter compared to the year before, primarily driven by lower activity in China, where production actually decreased by 9%. In Europe, the production increased by 4%, while North America remained stable. So this means that the steel and ferroalloy markets continue to be challenging and affecting Carbon Solutions. The effects are partly mitigated by our specialized product offering in carbon and a diverse geographic presence, which gives us a natural hedge and creates quite a stable situation, which you have seen on historical financial figures.

Then lastly, Silicones. Anti-involution measures are underway in a number of sectors in China, also in silicones, so addressing overcapacity. The DMC price in China rose by about 23% from around RMB 11,000 per tonne by the end of the third quarter, up to RMB 13,600 by the end of the fourth quarter, primarily driven by various anti-involution measures, curbing over production and then leading to an increasing in sales prices. The demand still within China remains on a weak level, particularly due to the construction sector. In the EU and the U.S., demand for commodity silicones was low in the quarter, mainly impacted by shifting tariff policies.

So moving on to the outlook for the first quarter. As mentioned, trade regulations and protective measures are likely to continue to affect Elkem's markets and contributing to ongoing uncertainty. However, I think Elkem is well positioned due to our geographic presence and strong market and cost positions. Silicon products still facing subdued demand. We are temporarily reducing capacity in Norway to -- mainly to manage inventory levels. And the EBITDA effect of that is expected to be somewhat negative, but with a very positive cash flow effect.

Carbon Solutions is expecting a slight improvement in sales volumes. But again, due to already mentioned the situation in steel, et cetera, the overall demand remains on a relatively weak level. Silicones prices in China have increased due to the reduced supply, while the fundamental demand situation remains on a lower level than what we've seen historically. The division will, of course, benefit from higher sales prices anticipating that yes, that these actions will be maintained on production reduction.

So I think with this, I'll give the word to Morten to take you through the financials for the fourth quarter, and then we'll come back to the transaction afterwards.

Thank you very much, Helge, and good morning, everybody. It's certainly a pleasure to go through the results for the fourth quarter in more detail. Our operating income for the quarter was NOK 7.3 billion, which was down 14% compared to the fourth quarter last year. And we saw a reduction in all 3 divisions, and this is mainly explained by lower sales prices.

Elkem's EBITDA for the fourth quarter was NOK 890 million, and this was 24% lower than the fourth quarter last year, but slightly higher than in the previous 2 quarters. The reported group EBITDA margin was 12%, which is somewhat below our long-term target of 15% to 20%. However, it's clearly important to bear in mind that sales prices in key markets, particularly in silicon and ferrosilicon have been at or close to all-time low levels.

And as such, we believe that Elkem's EBITDA is clearly supported and held up by good operational performance and strong underlying cost positions. There were no particular one-offs affecting the EBITDA in this quarter.

As usual, we have provided an overview of some of the main financial numbers and ratios on this slide. I will certainly not go into detail on all of them, but it is important to note that the Silicones division has been reclassified as discontinued operations and assets held for sale. And as you know, now we are announcing this transaction. But Silicones has been a part of Elkem's structure during the quarter, and the division is affecting Elkem's key financial numbers. And for that reason, we will mainly focus on the financial numbers for the group, including Silicones.

In the table to the right, you can see comparable figures, however, for Elkem with and without Silicones. Including Silicones, the group EBITDA was NOK 890 million, and the realized effects from the currency hedging program was minus NOK 21 million reported in segment other. Other items amounted to minus NOK 68 million, and the main items were gains on power and currency derivatives of plus NOK 64 million and restructuring expenses of minus NOK 20 million and other items of minus NOK 111 million, mainly consisting of dismantling and environmental expenses.

Net finance expenses were minus NOK 192 million. The main items were net interest expenses of minus NOK 130 million and currency losses of minus NOK 48 million. We have been able to reduce the interest expenses from minus NOK 187 million in the same period in '24. Income tax was positive with NOK 6 million due to tax deductions and changes in the tax losses carried forward.

So let's then take a look at the divisions, and we start with Silicon Products. The silicon and ferrosilicon market clearly remain difficult with low sales prices, and this is also affecting the division's result in the fourth quarter. Total operating income amounted to NOK 3.2 billion for the quarter, which was a reduction of 14% from NOK 3.8 billion in the fourth quarter of '24. The reduction was largely due to lower sales prices, particularly for silicon and ferrosilicon.

The EBITDA amounted to NOK 294 million, which was a significant reduction of 53% from the fourth quarter last year. And the reduction is also here primarily driven by lower sales prices, but this is then partly balanced by lower raw material costs and higher sales volumes. The specialty segments, particularly foundry alloys and materials maintained strong performance also this quarter due to Elkem's very strong market positions. Sales volume was 8% higher compared to the fourth quarter last year, and we had a higher sales volumes across all product lines.

The Carbon Solutions division has presented extraordinary good results over a long period and continue to deliver good margins. However, this quarter was impacted by lower sales volumes. The operating income came in at NOK 735 million, which was down 20% from the fourth quarter last year. EBITDA amounted to NOK 174 million, which is a reduction of 38% from the corresponding quarter in '24. But the reduction in operating income and EBITDA can be explained by decline in sales volumes. We have also seen a reduction in sales prices, but this has been partly offset by extraordinary cost improvements. Sales volume was down 11% compared to fourth quarter last year.

The Silicones division, where the majority now is being sold to Bluestar has delivered improved results in the fourth quarter, mainly due to cost improvements. Total operating income was NOK 3.6 billion. That's down 14% from the fourth quarter of last year. And the decline is primarily due to lower commodity sales prices during the quarter.

EBITDA, on the other hand, improved by 6% from the corresponding quarter last year, and it reached almost NOK 400 million. The decline in sales prices and sales volumes was more than offset by good cost reductions and lower raw material costs. Sales volumes was down 3% compared to the fourth quarter last year, and this is mainly due to lower commodity sales across the geographical regions.

Let's now have a look at some of Elkem's key financial ratios. The earnings per share, EPS, was negative with NOK 0.21 per share in the fourth quarter, and that brings the EPS year-to-date to minus NOK 1.05 for the year. We are, of course, not satisfied with this, but clearly, the EPS has been negatively impacted by net losses from the Silicones division, which we are now selling. If we exclude Silicones from the '25 numbers, Elkem's EPS for the full year would have been plus NOK 0.61 per share. The balance sheet remains very solid and total equity amounted to NOK 24 billion by the end of '25, and that equals an equity ratio of 51%.

By the end of the fourth quarter, Elkem had a net interest-bearing debt of NOK 11.9 billion, and this gives a debt leverage ratio of 3.5x based on last 12 months EBITDA. The sale of the Silicones division will impact Elkem's equity and debt, and we will revert to that later. The equity will be reduced by share redemption and the net debt will also be reduced from NOK 11.9 billion to NOK 9.8 billion as Bluestar will take over NOK 2.1 billion of the debt.

This will then increase Elkem's leverage based on pro forma numbers. But the plan will be or is to raise additional equity and conduct a refinancing of the main bank facilities after closing of the Silicones transaction. As I said, we will get back to more details on this under the presentation of the Silicones transaction.

As mentioned in the previous quarters, Elkem's focus has been on cash generation and disciplined capital spending in response to the very challenging market conditions that we are experiencing now. And we have delivered on our promises. In the fourth quarter, the cash flow from operation was plus NOK 829 million, a clear improvement compared to previous quarters. And this is explained by lower CapEx and positive working capital changes.

In the fourth quarter, total investments were down to NOK 674 million. Reinvestments were down to NOK 530 million, which amounted to 75% of depreciation for the quarter. And for the full year, reinvestments amounted to NOK 1.5 billion, which equals 58% of depreciation. Strategic investments were moderate, NOK 145 million in the fourth quarter, taking the total number to NOK 328 million for the full year.

So let me wrap up this presentation by summarizing the main headlines and takeaway. First of all, trade regulations and protective measures are likely to continue affecting Elkem's markets. Elkem is, however, very well positioned due to strong market and cost positions and a diverse business model. Silicon Products is still facing weak demand, but the division is benefiting from cost improvements and higher ferrosilicon prices after the implemented EU safeguard measures.

Carbon Solutions benefits from good cost positions and a geographically diverse customer base. And clearly, the division is excellently positioned when there is a market recovery. Our Silicones business delivered further profitability improvements in the fourth quarter and is well positioned if current price levels are maintained. As I said, the Board has proposed not to distribute dividend for 2025, and this is due to the share redemption in connection with Elkem's sale of the Silicones division. So then I think that summarizes the Q4 presentation, and then I hand the word back to Odd-Geir. Thank you.

Okay. That concludes the presentation of the fourth quarter results. So thanks to Helge and Morten for taking us through the results and the presentation. We will now go on to present the divestment of the Silicones division and CEO, Helge Aasen and Morten Viga will then take us through the rationale for the transaction, the structure and the approval process for the contemplated divestment. And we will then open for Q&A after this part of the presentation. So with that, I'll give the word back to you, Helge.

Thank you. Yes, it's been a quite a long process. It's now about a year since we announced the strategic review to sell the Silicones division. And we are very satisfied to present to you today a transaction that we think will benefit all our stakeholders. So before going into the details of the transaction, I'd like to put this into a historic perspective.

I mean transformational changes are not new to Elkem. In the company's long history dating back to 1904, continuous portfolio optimization has been part of the course. And in order to adapt to new market environments, seize growth opportunities, consolidate the market or gain more financial room to maneuver, we have on this slide illustrated some of the major transactions that have shaped this company over the years and made it to what it is today.

The current chapter that we are about to close started in 2011 with Bluestar's acquisition of Elkem from Orkla. During Bluestar's ownership, Elkem has had a strong development in product diversification and not at least in revenue growth. I mean we have quadrupled the revenue in that period. We've strengthened our market positions. We have emerged as a more cost-effective company and -- than we were, back in 2011.

And we've also invested significantly in expanding and upgrading our facilities. Just in Norway alone, we have invested more than NOK 10 billion over the last 10 years, which makes us the European silicon major. And we play a critical role in strategic value chains.

It's been a very exciting journey. I've been part of it myself personally. Taking over Bluestar's global silicones business headquartered in France. We took the first part in 2015 and then the silicones business in China in connection with the IPO in 2018. And obviously, that's a particular highlight when Bluestar relisted Elkem on the Oslo Stock Exchange in 2018 after the Orkla takeover, where Elkem was delisted in 2005. And we had actually been listed since 1913, when Orkla delisted the company. So we have a long history here in Oslo on the stock exchange. And significant achievements have been made, and we are proud of that.

Today, Elkem is a fully integrated silicon-based manufacturer, all the way from quartz mining to high-end downstream applications in silicones. The company has global positions and each of the 3 divisions are major players within their respective industries and markets. Silicon Products being a global producer and provider of silicon, ferrosilicon and a number of specialty products derived from those -- from the starting point.

Carbon Solutions is a leading producer of electrode paste and specialty products for the metallurgical industry. And Silicones, which will now be sold to Bluestar is also a fully integrated silicones manufacturer with focus on specialties and strong global positions. So combined, our divisions have leading cost and market positions delivering and have delivered strong results over the cycle, with a geographically resilient and diverse business model.

And I think we should also underline that Elkem is a supplier of critical materials to the green and digital transitions with a strong focus on sustainability. And of course, these efforts will continue regardless of the transaction being announced today.

So with such a successful development, I guess the obvious question is why do we undergo such a significant transformation now. And I would say, first of all, it is related to growth potential, and the fact that the current structure and financial capacity of Elkem is not adequate to support the growth opportunities that we see for Elkem's business portfolio going forward.

We have #1 positions in carbon materials, in silicon, in foundry alloys, microsilica. And a sale of the Silicones division will now ensure a better capital allocation in order to accelerate organic growth and also enable us to pursue attractive M&A opportunities within these business areas. It will also leave Elkem with more resources for innovation and improve the prospects to strengthen our financial profile through reduced volatility and lower capital intensity. In short, we believe that this transaction will put us in a significantly stronger position to develop these 2 divisions.

The fact that Bluestar will take full ownership of Silicones through this transaction, we also think will significantly improve the future opportunities for the Silicones division. It will enable access to a significant investment capacity that would not have been possible in the Elkem structure. In addition, Silicones will benefit from deep strategic synergies within a global chemicals major with improved ability to innovate across the whole value chain.

Silicones will also be in a better position to adapt to local market dynamics and accelerate growth in specialty products and in key global markets. So in short, we are confident that this agreement with Bluestar delivers the most favorable outcome for Elkem's employees, shareholders and other stakeholders, while we position ourselves with the remaining metals and materials division and the Silicones division for future growth.

This is an overview of the transaction structure and the timeline. So Elkem will sell the majority of the Silicones division to Bluestar. The sale includes all Silicones' assets, excluding Yongdeng, it's a silicon metal plant in China; Ruossillon which is an upstream silox plant in France; and India, a small downstream facility in silicones.

The transaction will be settled through the redemption of all of Bluestar's 338 million shares in Elkem. There will be no cash payments by Elkem nor Bluestar. The minority investors, which today have 47.1% of the shares will then assume 100% control of the listed company, Elkem ASA. And through the contemplated transaction, Elkem and Bluestar will solve important long-term strategic goals regarding development and ownership.

The transaction is conditional upon shareholders' approval at an Extraordinary General Meeting, waivers and approvals from lenders and other customary approvals. We have obtained pre-commitment from Folketrygdfondet, Must Invest, AS, DNB Asset Management, Nordea Investment Management and Perestroika to vote in favor of the transaction. These investors have also underwritten NOK 1.5 billion equity capital raise.

Elkem will call for an EGM today. The EGM is expected to take place on the 9th of March, and we will seek lenders' approval of the transaction before the EGM. After a 6-week formal creditor process, the closing is then expected to take place by the end of April. We are planning to arrange a capital markets update after the summer to present our plans and strategy for the company going forward.

Where are we now? Is this -- are you taking over now? Or is it -- this is my last slide. I think, yes, this slide summarizes the outcome of the contemplated transaction. So upon completion, Bluestar will be the owner of all Silicones' assets, except the units that will be retained by Elkem. And since 2018, Silicones' share of EBITDA has been 32%, while the share of EBIT has been negative.

The divisions that will constitute Elkem going forward have since 2018 represented 68% of EBITDA of more than 100% of EBIT by offsetting the losses from Silicones. The performance since 2018 demonstrates the potential to strengthen Elkem's financial profile going forward through improved earnings.

Yes. I think, Morten, you can take the rest. Let's share the burden of this very nice presentation.

Share the pleasure I would say. Certainly, it's a magnificent day in the history of Elkem. So I'm very happy to continue. So the settlement of the transaction will be made through redemption of all Bluestar's share in Elkem ASA. The decision is subject to 2/3 vote by minority shareholders at the upcoming AGM on the 9th of March. And the minority shareholders will then effectively exchange the 47.1% they hold in the sold Silicones assets with Bluestar's 52.9% in the remaining Elkem.

Bluestar will not hold any shares or have any formal roles in Elkem after completion of this transaction. And a new Board of Directors will be elected in connection with the closing of the contemplated transaction.

So what is new Elkem all about? Well, after the transaction, Elkem will consist of Silicon Products and Carbon Solutions. And this will certainly then result in a much more focused pure-play metals and materials company. The Silicon Products division has 12 main production sites and has all around the world and has delivered an average EBITDA margin of 22% from 2018 to 2025. Carbon Solutions also has a global business model with 6 main production sites, which have delivered an average EBITDA margin of 27% over the same period.

So Elkem will remain a global player with plants all over the world and clearly with #1 positions within these 2 business areas and with very strong and resilient value chains. We will certainly continue to focus on innovation and customer support with strong R&D centers as an embedded part of our value chain. And we believe that this will be even more important going forward due to increased focus on supply chains and the secure supply of critical materials.

We also have very strong positions in terms of renewable energy and energy efficiency. And we also believe that this will be a strong competitive advantage going forward. In this transaction, we will keep 3 of the Silicones' plants, which will not be sold to Bluestar. The Roussillon upstream Silicones' plant in France will be a prolonged -- will serve as a prolonged part of the upstream silicon metal value chain. And as such, it will secure demand from -- for our production in Norway. For India, which is a very small business and for Yongdeng, which is a silicon smelter in China, but belonging to the Silicones division, we will explore other alternatives, and we will get back to that in due time.

This slide contains a profile of the new structure's historical financial performance. I will certainly not go into detail on all these numbers. But you will see that the historical performance has been volatile as the markets have been volatile, but we have delivered profitability, which is clearly above the average profitability of Elkem Group in the same history.

Since Elkem was IPO-ed back in 2018, the remaining business that we will keep has represented 55% of the group revenue, but it has also represented 67% of the EBITDA. And as a matter of fact, it has represented more than 100% of the historical group EBIT. So we believe that it is a very good part of the portfolio that we are bringing further. And that means that we will have a stronger and more profitable Elkem going forward, and we will certainly also focus a lot on cash flow generation based on very good underlying market and cost positions.

As mentioned previously in our presentation, we believe that Elkem's positioning will be significantly improved after the transaction. Going forward, the operational and business focus will be on our #1 positions in Silicon Products and Carbon Solutions. And these divisions have demonstrated a very strong ability to deliver solid profitability throughout the cycle with an EBITDA approaching 20% since 2018 and with a strong cash flow generation.

So where do we stand today? We, certainly, Elkem's remaining divisions, we have gone through a cyclical trough in terms of turnover, yet we have still delivered profitability and good cash flow throughout 2025. And we clearly believe that with the completion of this transaction, we are very well positioned to deliver increased turnover, higher earnings over time. From 2018 to 2025, Silicon Products and Carbon Solutions together have delivered on an average an EBITDA of around NOK 4 billion throughout the cycle, which is significantly higher than the 2025 numbers.

Compared to 2025, we expect a gradually improving market in 2026. And over time, we expect that we should at least be back in line with historical earnings at a minimum. Based on the current outlook, we anticipate an underlying top line growth of more than 10% in 2026 compared to 2025. This is driven by a better mix and higher volumes.

Our relative competitiveness versus competitors in our main markets is stronger than ever before, and we are confident that we will gain market shares with good profitability. Higher prices should certainly provide the company with strong operating leverage and also based on today's cost base.

Historically, rising revenues have led to increased margins, which is natural given higher volumes and prices. In addition, we have a long track record, and we will continue with that of achieving significant cost improvements in our core business model. And we plan to return to the market with specific cost-cutting measures over the coming quarters as we will streamline the new organization.

One of the important factors in the transaction is that we will also significantly reduce our capital intensity through the sale of Silicones, which has clearly been the most capital-intensive part of our portfolio. We expect for the new portfolio around NOK 1 billion in ongoing annual investments, and that is clearly significantly below the average level during the last 5 years. And this also should enable a higher return on capital employed going forward than the historical numbers.

In line with our strategy of being a well-capitalized company throughout the cycle, we have also decided to raise new equity from solid investors upon completion of the transaction. We're very happy to see the good support from current shareholders, and we believe that our new financial process has a -- would give a stronger resilience than the historical Elkem.

So even though the markets remain, for the time being, challenging and uncertain, we believe that we are in an excellent position to deliver profitable operations, good cash flow even under quite challenging conditions. And over time, as illustrated, we are also comfortable that we have a position that can deliver results at least in line with our historical performance.

I should be humble about timing. Normalization, full normalization will probably take some time and our markets will keep fluctuating. But as the markets will settle, we are very well positioned to deliver strong revenues and profitability. And as I said, we will certainly focus on maintaining a strong and efficient balance sheet over time. And we will also, in the future, get back to delivering attractive dividends to the shareholders when the time is right.

Finally, I think it's also worth mentioning that the transaction and the streamlining of Elkem in the coming years will enable profitable expansion and growth. And once the transaction is completed, as we said, we will also then after the summer vacation, get back with a capital markets update, elaborating more on our future financial targets and strategic priorities.

As we said, the sale of the Silicones division is settled by share redemption with no cash payments. We're planning also, as said, an equity issuance following the closes of the contemplated transaction to ensure a robust and efficient balance sheet. And a number of key current investors have already fully underwritten a NOK 1.5 billion equity capital increase. And with this capital increase, the new pro forma leverage will be 3.6x based on the last 12 months EBITDA.

The equity capital raise is subject to certain terms and conditions to be completed following the closes of the contemplated transaction. But what's important from the company's perspective is that there is no uncertainty related to the equity raise and to the financial position of the company going forward. We believe this will be a very strong structure. And certainly, our target is to maintain a strong credit position and a flexible balance sheet, qualifying for investment grade.

The transaction is conditional upon approval from certain Elkem lenders and the waiver and approval process is now being initiated. After transaction closing, we plan then to conduct a full refinancing of main credit and loan facilities, and we will get back with more information on that in due time.

So then a few words about the approval process from the minority shareholders. The contemplated transaction is conditional upon the approval by Elkem's General Meeting. We will then call for an Extraordinary General Meeting today to be held on the 9th of March to approve the contemplated transaction and the redemption of Bluestar's shares in Elkem.

Bluestar will not vote on the agenda items relating to approval of the contemplated transaction as they are part of the transaction. But Folketrygdfondet, Must Invest, DNB Asset Management, Nordea Investment Management and Perestroika have pre-committed to vote in favor of the share purchase agreement, and that is representing approximately 30% of the eligible voting capital for this matter. And as I also said, these investors have collectively underwritten NOK 1.5 billion in new equity capital, subject to market terms. The Board of Directors in Elkem will certainly also ensure to take into consideration of the minority shareholders in relation to the equity capital raise.

With respect to the share redemption, Bluestar is entitled to vote and has undertaken to vote in favor. Hence, shareholders holding 67% of the share capital eligible to vote on that item have undertaken to vote in favor of the share redemption at the EGM. And subject to being approved by -- or subject to approval by the EGM and other closing conditions, where there are really no major ones, the contemplated transaction is expected to close late April or early March this year -- May. Thank you, Helge.

Elkem's management and the independent Board have thoroughly assessed available options in a long time before entering into these -- or into exclusive negotiations with Bluestar, and we clearly believe that this is the best option, and it's a very good solution.

To safeguard the interests of the minority investors in Elkem, the Independent Board has also obtained a fairness opinion from DNB Carnegie, which has concluded that the contemplated transaction is fair from a financial point of view when considering the valuation from the perspective of the Independent Board and its shareholders.

So to summarize, we certainly believe that this transaction will be beneficial to all stakeholders, and it will position Elkem as a focused pure-play #1 metals and materials company. This will certainly allow us to pursue tailored strategies aligned with our division's unique strengths and market positions. Elkem, post the transaction, will hold leading positions within operations, technology, market, product technology, et cetera. We will continue to have attractive positions in all relevant geographies. And we clearly also see potential value-accretive M&A opportunities when the timing is right.

As a supplier of critical materials to the green and digital transformation, we have developed strong customer relations based on very capable in-house R&D resources, and we will continue to strengthen that going forward and make sure that it's sustainable, both from a financial and an environmental point of view.

As I said, Elkem's target is clearly to maintain a robust financial profile over the cycle with a very strong focus on solid cash conversion. And we believe that this will, over time, provide the necessary flexibility for growth and development of the company.

So I guess that concludes our presentation, and then I'm happy to leave the word back to Odd-Geir again, who will facilitate the Q&A session. Thank you very much.

Thank you for that, Morten. We will then open up for Q&A. We have received some questions on the webcast and including some on e-mail. But since there are a few people present here today, I would like to take the opportunity to see if there are any questions from the audience. And the best solution is probably if you just say the question and then I'll repeat for the webcast. So please feel free.

If there are no questions from the audience, we'll take a few of the questions that are on the webcast.

And the first question is related to the Roussillon and the part of the Silicones' assets that are not part of the transaction. And questions are if -- what is the EBITDA for the Silicones part that are not part of the transaction where obviously, the Roussillon plant is the main item. What was that in '25? And I mean, the part of EBITDA that we are not selling to Bluestar?

I don't think we have -- this has been an integrated part of the Silicones operations in France. Obviously, we have looked at what is going to look like going forward, but I don't think we have a specific number on 2025 EBITDA for this part.

No, you're absolutely right. This has been an integrated part of the Silicones business in France. So we don't have a precise number on that. We believe that we will have a -- how should I call it, a neutral to positive profitability going forward.

I should add that this -- to keep that asset obviously gives us a very stable outlet for silicon metal and value uplift on silicon metal into the European market. It's also very important for Bluestar to have a stable source of silox for their downstream operations. And we have entered into a long-term agreement that I think will be very beneficial for both parties.

And then we have a question related to debt and EBITDA and where do we see the net debt to EBITDA for the remaining Elkem after the NOK 1.5 billion equity raise?

Well, then we will be at a net interest-bearing debt of approximately NOK 8.3 billion. And as I said, we will be at approximately 3.6x EBITDA on a leverage. There will probably be an additional equity raise, which can change or lower that also somewhat. Our target is clearly to generate cash flow going forward, which enable a further deleverage of that number.

While we are into kind of equity raise, there is also a question about the agreed equity price issue or the conditions of the equity offering, if you're able to provide any further details on that?

More details on that will be provided later. I think the important issue today is that we have underwritten NOK 1.5 billion in new equity, very happy with the support from major shareholders, which clearly see this as a very good and attractive investment. And then we will provide more details on the structure and terms later in the process.

We have also received a question on the price exchange between Elkem and Bluestar and therefore, the implied EV of the sold assets.

Yes, that's a good question. I think we have provided all the relevant information. And of course, there are many ways to regard this. From our perspective, what's important is that we clearly believe that this is very attractive as seen from the minority interest and from the company's perspective. I think that has also been confirmed by opinions made by ABG and by DNB Carnegie. And as I also said, the important thing is that we now have secured a very, very good business structure for the future of Elkem and also a very good ownership structure.

Very good. Given the fact that we are seeking to enable the capital allocation to accelerate growth in Carbon Solutions and Silicon Products, are there any concrete opportunities that you are assessing?

Definitely, we have been looking at that for a long time. And I think that's a very good topic for the Capital Markets update that we will come back to in a few months. So let's get past this next milestones with the EGM and the closing of the deal. And then I think that will be a very, very interesting topic to discuss.

And also the last question goes more into kind of the future and the prospects for '26. We have guided on improved margins and results for '26. And the question is if you can elaborate a little bit on what is market related and what is cost efficiency related when it comes to that improvement.

I don't think we should go into those details on that now. But obviously, we are now reducing Elkem's organization and simplifying the business model. And it's a very good opportunity to streamline organization. So we have already been working on that for a while. So there we'll definitely be taking measures to reduce cost through efficiency improvement.

And then regarding the market, I think we're positive on the outlook. I think Q1, I mean, we have said there's still a lot of uncertainty. We don't guide beyond Q1. I think Q1, you can expect that to be in line with Q4, and then we are positive going forward.

Thank you very much. I don't have any further questions, and there doesn't seem to be any from the audience. So that concludes our presentations here today. So thank you very much for attending, and thank you to Helge, Morten for taking us through the 2 presentations.

Thank you.

Thank you.

Thank you.

Hello, and good morning, and a very warm welcome to Elkem's Third Quarter Results Presentation. My name is Odd-Geir Lyngstad, and I'm responsible for Investor Relations here in Elkem.

In today's presentation, we will go through the highlights for the quarter and give an update on the markets before we go through the outlook for the fourth quarter. CEO, Helge Aasen, will take us through this first part of the presentation before CFO, Morten Viga, will present the third quarter results in more detail. We will open for Q&A after Helge and Morten's presentations.

So with that, I give the word to CEO, Helge Aasen.

Thank you, Odd-Geir, and good morning, everyone. Very nice to see the turn up today. Yes, we seem to be repeating ourselves when it comes to describing the markets we operate in. The story about weak and challenging conditions doesn't seem to go away. And the market does actually remain much the same as it has been for a while now.

However, despite challenging macroeconomic environment, Elkem's results are relatively good, but of course, below our financial targets. The EBITDA for the third, I'm sorry, the EBITDA for the third quarter ended at NOK 829 million, which gave an EBITDA margin of 11% for the group. If you exclude silicones, the operating income ended at NOK 4.1 billion with an EBITDA of NOK 586 million, which then represents a margin of 14%. This result is to a great extent, explained by good operational performance and ongoing cost improvements.

Silicon Products was impacted by low silicon and ferrosilicon prices in the third quarter. But Specialty segment as Foundry alloys and Microsilica, which is a silica powder, delivered improved results. Carbon Solutions continued to deliver good margins, but the operating income and the following EBITDA is impacted by the lower sales. Silicones has improved on cost and market positions and delivered a higher EBITDA compared to the same period last year. The strategic review is ongoing. We gave an announcement some weeks ago, and I can just confirm that this is moving ahead as planned with an exclusive sales process, and we are still aiming for closing this transaction within the first half of next year.

So before we go on to the market update and the results, I'd like to say a few words about our ESG work. It's built on two main pillars: reduce CO2 emissions and to supply the green transition with critical materials. Our aim is to reduce and ultimately remove fossil CO2 emissions from the smelting processes.

Elkem supports the green transition through the supply of critical raw materials, and we work systematically to cut emissions and reduce waste throughout the entire value chain. Circularity is also playing an increasingly important role in this world. And we have introduced a new, actually a breakthrough method for recycling silicones through a mechanical recycling. And this then goes back into what used to be waste now is going back into new formulations.

Our efforts within ESG are also recognized with strong ratings from EcoVadis and CDP. And in the third quarter, we received a gold rating from EcoVadis, and this puts us among the top 5% of all the companies they are assessing globally. And over the past years, Elkem has consistently received either gold or platinum ratings from EcoVadis, which places us among the top of the companies they are rating.

Here, we show a couple of examples from Silicon Products and Carbon Solutions, illustrating some of our strong cost and market positions. I mentioned Microsilica initially. It's SiO2 silica powder, a byproduct from the ferrosilicon and silicon metal smelting processes. And over decades, we have developed this into a portfolio of specialty products, which go into quite a wide range of end applications. To mention some of them, construction, well drilling, cementing, refractories and also polymers.

Over the past years, this product area has consistently grown and shown stable high margins. And I think it's a very good excellent example of how we are able to specialize on the basis of commodity production capacity. We're also a leading producer of electrode paste, electrodes and refractory materials coming from Elkem Carbon. This goes into the metallurgical industry. And these products are probably not very familiar to you, but they are critical consumables and lining materials, which are very important for stable operations and lifetime in furnaces and electrolyser cells in the aluminum industry.

Also here, we are focusing on product development, and we have developed a more environmentally friendly product. With bio-based binders, which greatly improves working conditions. This solution has a proven performance record, and we have installed the product in more than 15,000 aluminum electrolytic cells. And we are gaining market share.

Competitive cost position can, of course, be explained by many factors, operational knowledge, operational excellence, economies of scale, upstream integration, et cetera. However, electric power is another, of course, very important cost factor in the production of most metals.

We have long-term supply agreements for renewable hydropower in Norway, Iceland, Canada, Paraguay. And access to long-term competitive energy contracts is a prerequisite for achieving competitiveness and also, of course, predictability in order to plan investments, et cetera. And renewable sourcing of energy also gives us a low carbon footprint, which clearly is, if not gaining or achieving premiums on end products, it gives us a preferential supplier status.

CRU, a global business intelligence company, have published their analysis of the 2025 cost curve, which is illustrated on the graph here. This is for silicon 99, silicon metal. And as you can see from the chart, this puts our Salten and Thamshavn plants in Norway among the lowest cost producers in the western part of the world.

Then coming to another important frame condition, which is trade barriers. That's affecting several markets and industries these days. And as you know, a highly dynamic and quite unpredictable environment. We are affected by this directly and indirectly. Two relevant examples are EU's ongoing safeguard assessment on silicon and on ferrosilicon and potentially silicon metal and also a U.S. countervailing duties assessment on silicon metal imports. EU safeguard measures could come into effect from November 19th. It's so far unclear how this is going to affect Elkem and how it will be structured.

The potential measures will be aimed at raising prices, obviously, and protecting internal production within the EU, but we don't know how Norway and Iceland will be positioned in it.

The regulations appear to focus on ferrosilicon and foundry alloys in this round, and there's no clear indication if silicon will be included. But most likely, silicon will be subject to another process at a later stage. The U.S. has imposed countervailing duties on silicon imported from several countries, including Norway with a preliminary rate of 16.87%.

The basis for these duties are the CO2 compensation and CO2 quotas that the Norwegian companies receive under EU's carbon schemes. And our position on this is that these policies are a compensation for CO2 tax and do not constitute countervailable subsidies harming the U.S. domestic industry. We have had similar cases in the past. And each time we have been able to document that there was no injury to U.S. industry.

So, we don't know the outcome of this round. It's now introduced as a preliminary measure, and then it will be followed by a permanent decision later on. Unclear when, partly because of the shutdown of the U.S. government at the moment.

A few more words on the strategic review process. It's underway, as I mentioned, and it is going according to plan. We cannot say much more about the process beyond the status update that we gave during the third quarter. We are in an exclusive sales process with a major industrial player with a significant presence in the global chemical industry.

The process is well aligned with the strategic review and represents an important milestone. And in a challenging market environment. But we are confident that the potential transaction will represent the best possible outcome for the silicones division in Elkem. And we're also confident that this process will be the best outcome for the rest of Elkem and as such, benefit to all stakeholders.Subject to further negotiations, final agreement and necessary approvals, the closing of the transaction is, as mentioned, expected to happen during the first half of next year.

Now let's have a look at the markets. Automotive continues to be an important sector for Elkem, driving demand for many of our products. The growth in this sector remains weak with the exception of China, where the production is up in 2025. This is mainly the case for electrical vehicles.

During the first half of 2025, the overall production in the EU is characterized by weak order intake and consequently low number of new registrations. Forward-looking forecasts have been revised upwards as markets adapt to ongoing trade and structural changes.

Europe's outlook is up, supported by improved expected demand in Germany, France, Austria and Turkey. China's forecast has increased due to incentives and export growth. But overcapacity and price competition clearly persist, especially for electrical vehicles. North America is also seeing upgrades driven by tariff relief and higher production. In South America, the gains are so far limited by very high import pressure. So, any improvement in the automotive sector will definitely have a positive impact for Elkem.

Several markets have been impacted by weak demand and various trade regulations and governmental initiatives. In the EU, the silicon reference price dropped by approximately 20% in late June. This was mainly due to low import prices from China, which suffer from, I would say, a severe oversupply.

Prices in the EU then recovered modestly again in September due to improved market balance. This was a result of capacity being taken out in Europe as well as higher prices in China. U.S. silicon prices have increased in the third quarter. This is expected to continue to rise due to trade regulations.

And in China, we have seen some price recovery from very low levels, mainly due to signals that the government will launch initiatives to curb overcapacity. Discussions are ongoing there regarding new energy consumption standards for the industry, which seems to be aimed at reducing overproduction.

The ferrosilicon markets have many of the same drivers as silicon. Also here, we have a market impacted by trade regulations and possible safeguard measures in the EU, which have resulted in price fluctuations. The market sentiment is still characterized by weak demand and downward price pressure.

However, based on the expected safeguard measures in the EU in August, we saw ferrosilicon prices jump up. This didn't last very long. It dropped back down again when it became clear that no preliminary measures would be announced. Prices in the U.S. increased towards the end of the third quarter. This was mainly driven by trade regulations.

And in China, we've also seen some recovery from very low levels, partly due to this government focus on reducing excess production capacity. It's also somewhat linked to higher raw material costs in China.

The market for carbon products is much smaller than silicon and ferrosilicon. We don't have reference prices to compare with here. Quite a big difference between regions when it comes to demand. But obviously, the underlying driver is the production of steel, which again triggers ferroalloy demand and then, of course, the aluminum industry.

Global steel production in the third quarter remained quite stable compared to the same quarter last year. Europe experienced a 3% decline, whereas North America saw a 3% increase, largely due to tariffs again.The steel and ferroalloys markets continue to face challenges. Carbon Solutions specialized product offering and wide geographic presence is, however, proving to be resilient and creating a stability in earnings.

Then moving on to silicones. Also like in silicon metal, overcapacity is significantly hampering any meaningful price recovery in the commodity part of the business. Producers are actively trying to increase the prices, and we've seen quite a lot of fluctuations in China, in particular, during the quarter.

DMC prices first rose from a level of around RMB 10,400 per tonne to up to RMB 12,250. This was a result of a fire at one of the bigger players. But due to the overcapacity, that was a very short-lived price uptick and prices subsequently lowered again because other producers are ready to fill the gap quite quickly. So, the current price level is around RMB 11,050 per tonne and quite sensitive to changes in raw material costs, where silicon metal obviously is one of the big input factors.

Demand in China continues to be weak, especially in construction. Demand for commodity silicones in the EU and the U.S. is also negatively impacted by changing tariff policies. But I would say, in general, there's quite good and stable demand for specialties.

So, coming to the outlook. Silicon Products are still going to face quite challenging conditions and low demand on a historical basis. But as mentioned in the presentation, our leading cost position and good performance in more specialized part of the business are mitigating the negative impact.

Carbon Solutions benefits from good cost positions and geographical diversity, and continued weak demand will have some impact on the results. Silicone producers are actively trying to increase prices. But as mentioned, the markets are still hampered by overcapacity. Potential trade regulations and protective measures are expected to impact our markets going forward. And of course, we are very eager to see the safeguard measures in the EU and how that's going to play out. It's not yet concluded, and very hard to say the overall impact on Elkem from this.

So I think with that, I'll give the word to you, Morten, and take us through the financials.

Thank you very much, Helge, and good morning, everybody. So it's a pleasure to go through the financial numbers for Q3. Our operating income for the quarter amounted to NOK 7.5 billion, and that's down 7% compared to the third quarter last year. All divisions had a decline in operating income this quarter, mainly explained by lower sales prices.

Elkem's EBITDA for the quarter was NOK 829 million. This was also well below the third quarter last year, but it's slightly higher than Q2 this year. The reported group EBITDA margin for the quarter amounted to 11%, which is somewhat below our long-term target of 15% to 20% EBITDA margin. Having said that, we should also emphasize that the EBITDA margin for the continuous operations, i.e., excluding silicone's was 14%.

And it is important to bear in mind that these margins are generated in a situation where sales prices in key markets are at or close to historical low levels. And as such, the EBITDA is not supported by market conditions, but it's held up by good operational performance and a very strong underlying cost position. There were no particular one-offs affecting the EBITDA in the third quarter.

As usual, we provide an overview of some of the main financial numbers and ratios. I will not go into detail on all of them, but it's important to note that the Silicones division has been reclassified as discontinued operations and assets held for sale. In this presentation, we mainly focus on the financial numbers, which include silicones. However, the regular financial statements, including the profit and loss statements, reflects Elkem's results excluding silicones. And in the table to the right, you can see the comparable figures for Elkem with and without silicones.

Including silicones, the group EBITDA amounted to NOK 829 million. The realized effects from the currency hedging program was minus NOK 16 million reported in the segment Other. Other items amounted to NOK 78 million and the main [Technical Difficulty] of minus NOK 17 million.

Net finance expenses were minus NOK 34 million. And here, the main items related to net interest expenses of minus NOK 114 million, which was largely offset by currency gains on NOK 96 million, mainly related to translation effects on our external loans.

The income tax was minus NOK 96 million, and this gives a very high effective tax rate of 65%. And the reason for that is that the Silicones division had a loss before income tax, which is rather high, and there is no tax in a major part of that division.

Let's then take a look at the divisions and start with the Silicon Products division. So, the silicon and ferrosilicon markets remained difficult, but the division's EBITDA for the third quarter was supported by good operating performance.

Total operating income amounted to NOK 3.4 billion, representing an 8% decrease compared to the same quarter in 2024. And the decline in operating income is mainly driven by lower sales prices for the commodity segments in silicon and ferrosilicon.

EBITDA amounted to NOK 389 million, representing an EBITDA margin of 12%. The EBITDA is higher than the previous quarter, but significantly lower than Q3 '24, and this is explained by significantly lower sales prices, particularly for silicon. This is partly countered by good and stable results from the specialty segments, particularly foundry alloys.

And as I said, in addition, the EBITDA is supported by strong operations and good cost improvements. Sales volume increased by 13% compared to the third quarter last year, mainly due to improved sales of specialty products.

So, if we look at the Carbon Solutions, this division is once again presenting a good margin, and it reached an EBITDA margin of 28% in the third quarter despite very challenging market conditions.

Total operating income amounted to NOK 822 million, which was down 7% from the third quarter last year. And this decline here is mainly explained by lower sales prices. The EBITDA was NOK 231 million, which represents an EBITDA margin of 28%. The EBITDA margin is in line with the previous quarter, but it's somewhat lower than Q3 '24, mainly explained by lower sales prices and somewhat higher raw material costs. The sales volume for the third quarter was in line with the previous quarter, but is negatively affected by low steel production, particularly in the EU.

As mentioned, and very well known, the Silicones division is under strategic review. The division has a good portfolio of specialty products, which provides to a large extent, stable sales and margins. But also, the division's exposure to the commodity market is still very significant. And particularly in China, we have seen strong price pressure hampering our margins. The division has, however, been able to compensate for lower commodity sales prices in the quarter through higher sales volumes and good cost improvements.

Total operating income amounted to NOK 3.6 billion, which was down 6% from the third quarter last year. Higher sales volume in the third quarter was more than offset by lower commodity sales prices. The EBITDA amounted to NOK 248 million, representing an EBITDA margin of 7%, and this is in line with the previous quarter, but it is significantly 23% higher than the third quarter last year, mainly driven by cost improvements and better sales volume.

Sales volume was up 10% compared to the third quarter last year, mainly due to higher sales volumes in the Asia Pacific region, where we also have introduced a new production line, higher capacity, and significantly stronger underlying cost position.

Let's now take a closer look at some of Elkem's key financial ratios. The earnings per share, EPS were quite low also in the third quarter with NOK 0.05 per share, and that brings the EPS year-to-date to minus NOK 0.77 per share.

And we are, of course, not satisfied with this, and we are working on further cost reductions and other improvements to mitigate the market situation. The EPS was also this quarter negatively impacted by net losses from the Silicones division, which is under strategic review. And if you exclude the Silicones division, the EPS for the third quarter would have been NOK 0.34 per share plus, and it would have been a positive NOK 0.40 per share year-to-date.The balance sheet remains very solid. Total equity amounts to NOK 24 billion by the end of third quarter, which equals an equity ratio of 50%, very stable level.

Elkem's financing position is well managed, and we have a very good and robust maturity profile. However, as you can see, the interest-bearing debt has continued to increase, and the current leverage is above our target level of 1 to 2x EBITDA last 12 months. By the end of the third quarter, our net interest-bearing debt amounted to NOK 11.7 billion, and that's up by NOK 0.3 billion from the previous quarter. And based on the last 12 months EBITDA, the debt leverage ratio is now 3.1.

Our target is clearly to bring down the leverage, and Elkem has a plan to deleverage the company after the strategic review process has been concluded, which we plan to achieve during the first half of next year. By the end of the third quarter, Elkem's interest coverage ratio was 6x, which is well within the covenant of 4x, which is the covenant in our loan agreements.

The cash flow from operation was NOK 526 million in the third quarter. We have a high emphasis on preserving and generating a good cash flow despite underlying market weaknesses. And this was a clear improvement from the previous quarters. It's explained by lower reinvestments and also positive working capital changes.

As already mentioned, the markets are weak, and we will definitely continue to focus on a very disciplined capital spending as long as the weak market conditions prevail. In the third quarter, total investments were down to NOK 312 million and reinvestments were NOK 244 million, which amounted to 39% of depreciation. Strategic investments are very much down and amounted only to NOK 68 million as we have completed all major strategic CapEx projects previously.

So let me take the opportunity to wrap up this presentation by summarizing the main headlines and takeaways from the quarter. We will continue to focus on cash generation and a very disciplined capital spending in response to the challenging market conditions.

We're very happy to see that Silicon Products has leading cost positions and strong performance within the specialty segments. And I think this is very important to bear in mind when the markets are really, really, really tough out there. Also, Carbon Solutions is in a very good position, and we benefit from good cost positions and a very geographically diverse customer base.

Silicones, also a very tough market, but we have improved our cost and market positions based on specialization and also based on new and more modern production lines, both in China and in France. The safeguard measures for ferrosilicon and ferroalloys in the EU and a new trade defense regime for steel in the EU could lead to improved market conditions if these measures are successfully supporting increased industry production in the EU, which is the intention.

The strategic review process is progressing as planned with an exclusive sales process ongoing. And as we said, we expect to have the transaction closed within the first half of 2026.

So I think that summarizes the presentation, and then I hand back the word toOdd-Geir for the Q&A session.

Thank you, Helge, and Thank you, Morten. We have a good audience here today. So I think we will start and see if there are any questions from the audience. There is Marcus?

Marcus Gavelli, Pareto Securities. So you talked about the safeguard measures, and clearly, we have no visibility right now. But could you try to provide some color on how you think about potentially worst-case scenario with higher tariffs and with Elkem potentially not being as competitive in the EU market. What sort of flexibility do you see having to redirect volumes and do other sort of measures to fight that?

I think if we are left on the outside of this and have to compete on the same basis as everybody else, EU is a big net importer of ferrosilicon. And I would claim that Norway and Iceland are among the best position to continue to supply that market. So I don't think we will have to redirect volumes. Obviously, we are very uncertain about how the price protection mechanism will be constructed or put together. But that could, of course, I would say, I don't see a big downside, but there is quite a significant upside if this is done in a way that favors us.

And also just to follow up on the, you mentioned the cost reductions that you're currently looking at. Could you also provide some color on what sort of measures that is? Is it, we've seen some ferrosilicon production now being curtailed? Is it more trying to optimize the production? Or is it actual larger reductions you're looking at?

This is a wide range of different measures. Obviously focusing on fixed cost reductions continuously, but it's also linked to a lot of optimization in production, producing campaigns where we have the best cost position in different plants and furnaces, and yield improvements. And yes, there's no one particular program that's yielding this, but a very big effort ongoing, and it's giving results over time.

Magnus Rasmussen, SEB. You have an improvement in the Silicon Products EBITDA Q-on-Q despite lower silicon metal prices, as you said in Q2. Our understanding is that after the decision that you were to be allocated more CO2 quotas, which you reported in early July, you have to purchase less CO2 quotas on a running basis to cover what was previously a deficit. Has that been a positive driver this quarter, and by how much?

Sounds like a CFO question.

Yes. You're absolutely right. We have got the ruling from the Norwegian Ministry, securing equal treatment with our European competitors. And that's very important. We have not yet received any additional quotas. Such things takes a bit of time, but we are very sure that we will receive a good amount of new quotas. And of course, that will put us in a much better position. There are no particular significant, let's say, CO2 quota P&L elements in our Q3 results.

When you, on a running basis, start to receive quotas on equal terms as your peers in Europe, then I assume you will not have to purchase quotas to cover that deficit as you've done in the past. Doesn't that imply that you will get a cost saving?

That is correct that in the future, there are 2 important things about this. First of all, equal treatment that's very important as a principle. And certainly, we will have significantly lower CO2 quota costs in the future when we receive those quotas, either late this year or early next year, we assume. So for our long-term competitiveness, it's good news, very good news.

And also, I see that your net interest-bearing debt in silicones is increasing by about NOK 375 million quarter-on-quarter. And it seems to me like more or less half of that is driven by you repaying what you label as bills payable in your balance sheet, and bills payable has come down by more than half over the past year. So, I'm just wondering why you are repaying that working capital financing ahead of the sale of the division?

No, that is kind of a working capital management done by the Chinese operation. So, I'm not able to give a precise answer to that. But they're managing this position. And as you rightly say, they have decided to repay some of that and reduce some of the bills outstanding.

Should we expect bills payable to be repaid ahead of the sale? And/or should we look at bills payable as interest-bearing debt when the sales price?

You should not look at bills payable as interest-bearing debt. So, it's part of the working capital management done locally in China.

Are there any further questions among the audience? If not, I think the questions are quite well covered from what I see here, but one additional question maybe that could, and that is how long you expect curtailments at Rana in Iceland to last, and also if any of our competitors are reducing capacity to the same extent?

Yes. We had an idle furnace in Rana, and we decided to postpone starting it up again. We are closely monitoring what's happening now. It's obviously inventory management, but it's also in anticipation of what will be the outcome of the safeguard decision in November. And then we have, we're going to stop one furnace in Iceland in mid-November, and that will be idle for 2 months, approximately, and what was the other part of the question?

Competition.

Yes, competition. Interestingly enough, Ferroglobe, which is our biggest competitor in silicon products in the conference, I think a couple of weeks ago, announced that they are now stopping all production in Europe. So, it says something about Elkem's competitive position.

Very good. Thank you very much. And that also concludes our presentation here today. So, thank you very much for attending.

Thank you.