GrafTech International Ltd. Q2 FY2025 earnings call

• Proactive strategic initiatives to increase sales volume, improve pricing, reduce costs, and strengthen financial foundation. - Strong safety momentum, aiming for 0 injuries. - Commercial efforts: actively shifted volume to the U.S., growing U.S. sales volume 38% Y/Y in Q2. - Cost reductions: cash COGS per metric ton down 13% Y/Y, exceeding initial guidance; leveraging R&D, technology investments, procurement strategy, and production scheduling to reduce costs. - Operational efficiency: optimized production scheduling, diversified supplier base, and lowered fixed costs while maintaining product quality and safety.

In the second quarter, GrafTech's sales volume was approximately 29,000 metric tons, a 12% year-over-year increase and the highest in 11 quarters. Capacity utilization rate was 65%, the highest in nearly 3 years. Cash COGS per metric ton declined 13% year-over-year. Year-to-date sales volume is up 7% compared to 2024, on track for a 10% full-year increase vs 2024, resulting in cumulative growth of ~25% since end-2023. U.S. sales volume grew 38% year-over-year in Q2, YTD up 32% in the U.S. region. Weighted average selling price in Q2 was ~$4,200 per metric ton, a ~8% increase from Q4 2024 non-LTA price and a 2% sequential increase from Q1.

• Full-year cash COGS per metric ton expected to decline 7%-9% Y/Y, midpoint ~$3,950. - Total liquidity at end of Q2 was $367 million, consisting of $159 million cash, $108 million availability under revolving credit facility, and $100 million under delayed draw term loan. - Bullish on structural tailwinds for EAF steelmaking, expecting growth in graphite electrode demand due to decarbonization efforts and EAF market share growth.

• Challenging pricing dynamics due to flat market demand and low-priced imports from China. - Impact of global trade policy, including U.S. tariffs and Chinese antidumping duties, with potential delayed impact on pricing as Western supply chains remain immature.

Q: Good to see share gains in the U.S. and about Chinese antidumping duties.

A: U.S. Americas represent a little more than 50% of overall revenue, with growth expected; Chinese duties support Western supply chain development but not immediate pricing impact.

Q: Congrats on EBITDA improvement, pricing environment, and needle coke.

A: Pricing environment challenging but seeing stability; needle coke flat; EBITDA expected to be at breakeven full year, with momentum building.

Q: About anode materials discussions.

A: Active discussions, well-positioned for potential government partnerships and Western supply chain development