GrafTech International Ltd. Q3 FY2025 earnings call

Performance - Achieved 9% year-over-year increase in sales volume, reaching nearly 29,000 metric tons. - U.S. sales volume grew 53% year-over-year in Q3. - Delivered a 10% year-over-year reduction in cash cost per metric ton for Q3. - Adjusted EBITDA was $13 million for Q3. ### Commercial Updates - Actively leveraging strong customer value proposition and capitalizing on commercial momentum to expand market share and drive volume growth. - Focus on optimizing geographic sales mix, particularly in the U.S. where sales volume grew 53% YOY in Q3. - Global steel industry outlook: Some regions show signs of rebound, e.g., U.S. projected 1.8% steel demand growth in 2026, EU projected 3.2% demand growth in 2026. ### Cost Management - Achieved 10% YOY cash cost reduction in Q3 and increased full-year cost savings guidance. - Annual maintenance activities at European manufacturing facilities occurred in Q3. ### Safety - Focus on zero injuries, maintained strong safety momentum, aiming for best safety performance in years.

In the third quarter, GrafTech's sales volume was approximately 29,000 metric tons, a 9% year-over-year increase, representing the highest sales volume in 12 quarters. U.S. sales volume grew 53% year-over-year in Q3. Cash cost per metric ton for the third quarter was $3,795, a 10% year-over-year decline. Adjusted EBITDA for the third quarter was $13 million compared to a negative $6 million in the prior year. The company had a net loss of $28 million or $1.10 per share in Q3, compared to a net loss of $36 million, $1.40 per share in the prior year. Cash provided by operating activities was $25 million and adjusted free cash flow was $18 million in Q3.

• Full-year 2025 sales volume expected to increase 8%-10%. - Cash COGS per metric ton expected to be down approximately 10% YOY for full-year 2025. - Positive cash flow in Q3, on track for favorable working capital in 2025. - Bullish on structural tailwinds for EAF steelmaking; U.S. and EU remain key strategic regions due to demand growth and trade protections.

• Challenging pricing dynamics due to flat market demand and excess electrode capacity from China. - Impact of global trade policy changes, including tariffs and export controls, on costs and market access.

Q: Do we should we expect any other kind of deferred revenue benefits? And comment on current price and volume environment?

A: This is Rory. You should not expect any further. Consider it one-time, relates to long since collected receivable. Tim says it's an oversupplied market currently, but seeing positive momentum in steel industry with potential for pricing improvement going forward.

Q: Congrats on the solid quarter. Thoughts on 50% tariffs on India material and new engagement on public-private partnership?

A: Timothy says confident of continuing gains in U.S. with focus on the market. Indian tariffs present opportunity. On public-private partnership, applauding government efforts on critical minerals and trade policy, uniquely positioned to support domestic supply chain.

Q: You mentioned your selling price on average is $4,200 per ton. Is U.S. pricing improved sequentially? And relevance of China graphite electrode pricing?

A: Rory says U.S. pricing is flat to slightly up compared to prior quarter. Timothy says China pricing serves as directional indicator but less impactful in U.S. and EU due to trade protections, as those regions have their own trade measures in place.