Release Date: February 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Acerinox SA (ACRXF) reported a strong EBITDA of 500 million in 2024, despite challenging market conditions.
• The acquisition of Haines International is expected to bring significant synergies and expand the company's presence in the North American market.
• The company successfully implemented a new business model at Arinos Europa, which is expected to improve profitability in the long term.
• Acerinox SA (ACRXF) has maintained a solid balance sheet, allowing it to continue with strategic investments and expansion plans.
• The company is committed to sustainability, launching EcoAriknos, a product with over 90% recycled material and 100% renewable energy usage.

Negative Points

• Acerinox SA (ACRXF) faced a significant impact from a five-month strike at Arinos Europa, resulting in an 84 million loss.
• The company experienced a reduction in production and sales volumes due to lower demand and seasonal factors.
• The acquisition of Haines International increased the company's net financial debt to 1.1 billion, the highest since 2008.
• The European market remains challenging with depressed prices and low demand, affecting profitability.
• There are uncertainties surrounding the implementation of the Carbon Border Adjustment Mechanism (CBAM) and its impact on exports.

Q & A Highlights

• Warning! GuruFocus has detected 8 Warning Sign with ACRXF.

Q: Can you provide some insights into the Haynes aerospace business and your expectations for 2025? Is it more linked to Boeing or the supply chain? A: The aerospace sector is experiencing a supply chain collapse due to issues like strikes and failures at Boeing. Orders are there, but deliveries are postponed due to bottlenecks. We expect improvements as the supply chain issues are resolved. - CEO Bernardo Velazquez

Q: What is the expected net financial debt for 2025, considering the adjusted EBITDA and other factors? A: We anticipate a 20% increase in volumes due to the strike recovery, which will likely increase working capital. We aim to keep working capital stable despite increased activity. Expected CapEx for next year is between 300-350 million. The goal is to maintain debt levels, with the ratio expected to decrease over time. - CFO Esther Camos

Q: Have you seen any early signs of demand impact from US tariffs, and are there any changes in Section 232 exemptions? A: The Section 232 tariffs have led to a 15% reduction in imports that were previously exempt. This change is expected to benefit local suppliers, including us, as many foreign suppliers may not compete with the 25% tariff. Additionally, more sectors are now included under the tariffs, which should further support domestic industry. - CEO Bernardo Velazquez

Q: How should we think about Haynes' contribution for Q1 and across 2025? A: Haynes' business is expected to gradually improve, with more activity in the second half of the year as supply chain issues, particularly in aerospace, are resolved. The first half will see adjustments, but a better contribution is anticipated in the latter half of 2025. - CCO Miguel Fernandez

Q: Could you provide more details on the cash flow situation regarding the Baru sale and its impact on net debt? A: The Baru sale was for $95 million, with $18 million received this year and the remainder to be collected in Q2 2025. The sale was cash and debt-free, requiring us to settle outstanding liabilities before the transaction. The full amount will be realized by 2025. - CFO Esther Camos

For the complete transcript of the earnings call, please refer to the full earnings call transcript.