Warm welcome to Elkem's second quarter results presentation. My name is Odd-Geir Lyngstad, I am responsible for investor relations in Elkem.

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 market update and outlook for the third quarter.

Morten will then present the result for the second quarter. We are pleased to welcome Elkem's next CEO, Dag Teigland, today.

Helge will shortly introduce Dag, and he will give a short introduction. We will then open for Q&A after Helge and Morten's presentation.

With that, I hand over to CEO Helge Aasen.

Thank you, Odd-Geir, and welcome and good morning. I am doing this without a suit today.

It is quite warm in here. It is actually my last quarterly presentation, before handing over the CEO role to Dag.

It has been a privilege to lead Elkem. I have had this role almost continuously for 17 years.

I am quite proud of what this organization has accomplished. I am 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 Board.

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.

Combined with other measures to improve the balance sheet, we have achieved a significant net debt reduction. Have improved the leverage ratio from 5x, in the first quarter, now down to 3.2x 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 Iceland, which has suffered from weak results actually since 2024, has been reclassified as a discontinued operation. In addition to that, we are also looking into two 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 Salten facilities. Carbon Solutions has sustained good performance despite low demand, soft markets.

As Odd-Geir mentioned, Dag Teigland has been appointed new CEO of Elkem, and he will take over on August 3rd. I really look forward to work closely with Dag.

I have known him since 1998. Dag is here today, and I would like to give the word to him to briefly introduce himself.

Please, Dag, the floor is yours.

Thank you, Helge. 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 Helge in particular, for the confidence of taking over as CEO of Elkem. 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 thereafter in a shipping company. Developed some new business opportunities within distribution and trading.

Transitioning back to Europe, I stopped by in Spain, got my MBA degree at IESE Business School. Then, two-year strategy consultant in Norway before I joined Elkem.

I have to say, I was very privileged to work with some of the most, let's say, projects of most strategic importance for Elkem at that time. Working with business development and moving into more operational positions.

I actually took over the responsibilities of Helge Aasen when Helge moved on as the Commercial Director in the biggest division of Elkem at the sales, marketing, and raw material sourcing. This is not the first time I take over the responsibilities from Helge.

We sold the manganese business to Eramet. I took over the full profit and loss responsibility for the chrome business of Elkem, consisting of mining operations in Brazil and the smelter in Mo i Rana.

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 Tinfos. Tinfos Group, at that time, was like a mini Elkem, with the manufacturing of ferrosilicon, titanium dioxide, high-purity pig iron, and energy.

That company was basically acquired by Eramet. I joined the main shareholder of Tinfos to build up and develop an investment company.

As the CEO, I spent most of my time on industrial holdings, working actively on developing value with this portfolio. Many of these assets were in the metal industry, both in Europe and the U.S.

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. After 12 years, I left Holta Invest.

The last few years, I have been working together with investors on several engagements, in particular within metals and advanced materials. 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 investor point of view, understanding investors and shareholders.

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 a strong culture of continuous improvement, innovation, 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. 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.

Yeah. Thank you, Dag.

As you rounded off strategic opportunities, I think we will touch briefly on that in today's presentation, but of course, more details will follow later on. Next time, Dag will talk to you about that.

Let's get back to the business update. A 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 zero 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.

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 hydropower, but also energy recovery at several of our sites, and the increasing use of bioreductants.

In addition to that, strong operational performance with high yield, both on energy and material consumption, are important contributors. 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, Ferrosilicon Leap.

It's a low-carbon ferrosilicon that helps customer reduce scope 3 emissions while retaining the high performance, which is guaranteed from our materials. In June, EcoVadis awarded us a gold rating, also for 2026, which puts us among the top 5% of the companies they rate.

The overall score improved compared to 2025, which puts us in the 97th percentile of their portfolio. 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. Coming to our financial position.

As I mentioned initially, we did complete the NOK 1.8 billion equity raise. NOK 1.5 billion was placed on May 6th through a book building process, a well-received process.

This was then followed by a NOK 0.3 billion repair issue on May 29th, and this rights offering was significantly oversubscribed. In March, before this, we initiated a refinancing of EUR 1 billion of bank facilities, and in April, we presented a fully underwritten financing solution supported by Danske Bank, DNB, Nordea and SEB.

On June 22nd, this new EUR 1 billion facility was signed with 10 relationship banks. The agreement comprises a EUR 600 million long-term or term loan and a EUR 400 million revolving credit facility, both with five-year tenors.

In previous agreements, Elkem has had two 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 two covenants. The equity ratio, minimum 30%, remains as before, but the interest cover ratio has been replaced with a leverage ratio.

The leverage ratio shall not exceed 4.75x from the second quarter of 2026 to the first quarter of 2027. From then on and onwards, the leverage shall not exceed 4.25x EBITDA.

Elkem has also obtained a 10-year, NOK 750 million loan from the Nordic Investment Bank on very attractive conditions, and this loan is expected to be disbursed in July. Combined, these 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 are talking about Norway. In the second quarter, we signed a new long-term power purchase agreement with Statkraft.

This is for the period from 2031-2037, with a total contract volume of slightly above 1.5 TWh. This will secure competitive and predictable electricity supply for Elkem's plant in Bjølvefossen, covering more than 60% of the plant's annual consumption.

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, the cover is then around 65% until 2033. This new agreement is also a significant contribution to the extension of the portfolio beyond 2033, we are continuously assessing opportunities to secure more.

Coming to the cost reduction program. I am 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 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 you will 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 in order to preserve cash, obviously, and reduce debt.

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.

Coming to strategic options. The Iceland facility has had a weak performance since 2024.

It is driven by a structurally higher cost base than what we see, especially if you compare with the Norwegian sites. In addition, the EU safeguard measures have reduced market access and limited tariff-free exports to what is Iceland's key market.

Based on this development and situation, the Board has initiated a strategic review. Which results in classifying this plant as a discontinued operation.

We are in discussions with national stakeholders in Iceland in order to evaluate the opportunities for continued industrial and commercial development at the premises. This is early days.

We will come back with more details on this process in due course, given the reclassification, I thought it was important to mention this. 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, etc. The picture here is from Fiskaa and Kristiansand, I think, which is a good example.

It's an industrial site where we already have invited one 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.

I strongly emphasize that new power supply must be developed alongside these expansions in order to protect existing industry and enable sustainable growth. 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. Again, we will come back and talk a lot more about this.

We're planning a Capital Markets Day in, we haven't set a date yet, but it's very likely to be in the second half of October. I think that will be a very good time then to talk more about opportunities and definitely share more details with you.

Moving on to the market update and the outlook. Some of the key markets where Elkem's products end up are listed here.

Very important demand drivers for Elkem's materials. All these markets have remained weak for a prolonged period if you 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.

This is mainly a result of lower output from China. There is an expectation that production will slightly recover in 2027.

Due to weak domestic markets, China's auto exports continue to rise, and 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 a higher demand or higher activity level. Germany's infrastructure rollout is behind schedule.

26 out of 107 milestones were reached by May. This is also pushing expected positive demand more into 2027.

Purchase Managers Index, the PMI, serves as an early indicator, as you know, of 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.

That gives the big picture. 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 Elkem, 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 anti-dumping 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 ended at 17.27%. Also in the EU, protective policies are building in order to support European demand and reshoring industrial value chains.

This could have a positive impact for Elkem as the EU continue to be our main and key market. EU's Industrial Accelerator Act is a legislative proposal to strengthen the competitiveness and resilience, and decarbonization of European industry.

It is expected to gradually support 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, we see an increasing trend that there is a preference for known and trusted suppliers, which obviously is a good thing for us. EU's safeguards on ferroalloys was introduced in November 2025 and have had less impact than expected on price levels, reflecting the weak underlying demand and continued substitution risk.

Ferrosilicon has been substituted with cheaper silicon metal. The effect is expected to improve, I put it like that, as ferroalloy supply tightens alongside a recovery in domestic steel production.

As you know, there were significant reductions in the free import or the toll-free volumes of steel into the EU. Silicon was not included in EU's safeguards for ferroalloys, silicon metal, that is, but protective measures are under assessment.

Finally, Elkem is eligible for 1.5 million CO2 quotas for the period 2021 to 2025. We expect to receive those quotas 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, 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 CBAM, effective from January 1st this year, the stronger EU steel safeguards on steel as now implemented from July 1st this year, are expected also to support a higher production in the EU 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 aluminum production currently receives less direct trade protection than steel, with no equivalent safeguard regime in place. You probably read Hydro's latest announcement that they are probably restarting in Slovalco, 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, the 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 switching to European supply.

In the U.S., silicon prices also increased in the second quarter as high freight costs and tariff uncertainty have pushed replacement cost higher and limited imports. Ferrosilicon 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 trajectory 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. Still, China is by far the largest producer of silicon metal and also silicones.

Silicones is important for the silicon metal market, silicon being one of the main input factors, and also important for Elkem's remaining operations in France. 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 over capacity then. 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. 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've seen these changes also before.

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 anti-involution actions in China, aimed at reducing production.

They're basically taking an overall effort in order to cap production. Same thing has happened in aluminum, by the way.

I'll end this with the outlook for the third quarter. 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.

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.

We would also like to remind you that, from the third quarter 2026, we will report on a new divisional structure. The three new reporting areas are called Elkem Silicon, Elkem Foundry Alloys, and Elkem Carbon.

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

Thank you very much, Helge, and good morning, everybody. I'm pleased to go through the results for the second quarter in more detail.

First of all, please note that Elkem Iceland has now been reclassified as discontinued operations and hence is 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 Yongdeng smelter in China and Silicones India.

Elkem's operating income for the quarter was NOK 3.7 billion, which was 4% lower than the second quarter 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.

It's still up from the first quarter this year, particularly due to the fact that our Rana and Salten plants in Northern Norway have resumed production in this quarter. 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 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 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 other financial items of NOK -20 million. The income tax was NOK -24 million, consisting of various smaller items.

We will get back to the financial ratios on the following slides. 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 2,946,000,000, and this was a reduction of 4% compared to the second quarter last year. 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 last year.

The reduction is primarily due to lower sales prices for silicon. The sales volume was 9% higher than the second quarter 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. The total operating income was 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 than 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 ferroalloys customers in the Western world.

Let's take a closer look at some of Elkem's key financial ratios. The earnings per share, the EPS, amounted to 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 NOK -0.15 in the quarter, and NOK +0.60 per share year-to-date.

The earnings per share is now calculated based on the current number of issued shares. Total equity as at June 30th 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 Bluestar shares. The reduction in equity ratio is therefore a reflection of the deconsolidation of Silicones and also the cancellation of Bluestar's previous shareholdings.

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 second quarter. There is 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 four years.

There is also a cash balance of close to NOK 4.9 billion by the end of second quarter. 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 5x by the end of the first quarter to now 3.2x, based on last 12 months EBITDA of NOK 2 billion as per end of second quarter. This is very well within the new bank covenants, where leverage ratio can be up to 4.75x until the first quarter 2027 and 4.25x thereafter.

Part of Elkem'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 for operations was NOK 733 million in the second quarter 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 NOK 171 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. 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 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.

These transactions have materially strengthened Elkem's financial position. Strategic options are being actively pursued across the portfolio, with several initiatives ongoing.

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 the summer vacation, particularly in Europe.

Trade regulations and protective measures such as safeguards for ferroalloys and steel in the EU will likely support demand and price recovery in Elkem's market when these measures become effective. 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, Morten, 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 they are not covered, we'll obviously take them as well.

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 two segments, there's a beat 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 is this a one-off or what's going on?

I think nobody is wrong. I can shed a bit of light on that.

First of all, we have a FX hedging program, where we have a transaction hedging of the expected cash flow up to 12 months. We have seen a movement on NOK versus euro.

We've had 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. Those two balances each other, but it makes the other look better than it actually is.

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.

There are also some revenues related to the Bluestar transaction where we invoice some of the support services to Bluestar. There are good explanations for the improvements that we have seen in the other segment, and no one is wrong on this.

We don't mind being wrong, by the way. We are humans.

You state in the chart, I think that there's a NOK 20 something million derivative effect. I assume that's the FX.

If we subtract that, is that a sensible level now going forward given what's happening with the cost reductions and the Bluestar agreements, etc?

On other?

Yeah.

Well, I will not give specific numbers, but you should expect better numbers in other going forward compared to the level that we had, for instance, one year ago.

On the cost improvement program, obviously, you've taken some provision already. Some FTEs, I assume, have already left.

How much of the NOK 600 million run rate by year-end should we start to see already now in H2?

You take it.

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-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 cost already in Q2. 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.

Not necessarily on a quarter-on-quarter basis.

Yeah. The FTE reduction increase from 300-400, is that in remain core, or does that include the fact that you're selling Iceland?

No. No, it has nothing to do with Iceland.

Final question from me on Iceland. When we look at 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 the European context.

Are we reducing volumes to help the market situations, or are you running that as normal?

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

Yeah. You're running Iceland as normal until the strategic review.

We are currently running Iceland at-

It's reduced.

...reduced capacity level, that's also, let's say, hitting our EBITDA.

Yeah. For the time.

[crosstalk]

Yeah. Thank you.

Great. Yeah.

Just two on markets, which I guess you can't have any firm answers on, but I will try. You talked about China and production out of China.

We've seen them actually pushing aluminium 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 a 2027 thing?

I don't have particular or specific numbers, but we definitely have seen planned startups during the wet season, which has not taken place this year, which we normally would have seen.

Yeah.

I think it illustrates high inventory levels. Domestic demand is definitely depressed.

They're trying to place these volumes in other markets. There are not many markets to choose from.

Europe is an obvious target, of course. We'll see.

There is a lot of discussions now with the EU commissions, of course, driven by [Vale HBI], to see if it's possible to implement some stricter protective measures also on silicon metal. We are joining those discussions.

I have a meeting myself on July 17th in that regard. We'll see what happens.

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'll be able to access the market.

Yeah. Of course.

Hopefully.

Hopefully.

I have meetings as well. Also on cost measures, you stated that the CMD will likely come in October.

Will there be any firm, let's update targets on the long-term cost ambitions? 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. The NOK 600 million that we have been talking about is not salary cost alone.

Yeah.

That's maybe half of it, approximately. There is definitely additional potentials.

I think procurement is something we're actively working on right now, which we see definitely higher potentials than what we have talked about so far. There's more to come.

We will definitely come back with more specific numbers and plans during the Capital Markets update, I think it will be wrong to reveal now what we are going to say in October.

Yeah. Did not expect that at all.

Just lastly on the Carbon Solutions. Historically, being closer to 30% EBITDA margin.

That had a pretty significant drop in Q1, which I think you at least explained it being some product mix, adverse product mix. What happened in Q2?

Could you try to shed 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?

I think this is primarily volume-driven, but there is definitely a product mix impact. There are quite big variations, especially in supplies to the aluminum sector, where you typically have much higher margins than on some of the more commodity part of their business.

The overall picture is demand is on a low level. Ferroalloy production is down, and the main product for Elkem Carbon is electrode paste and pre-baked electrodes, and that's directly correlated to production capacity utilization.

Yeah. Yeah.

Okay, great. That's all for me.

Very good. Thank you.

We have a few questions also on the web. I'll take them.

There are a couple of questions related to Iceland. One is if data center is an option on Iceland.

Not surprisingly. Not an expected question.

We are not in a process to establish a data center on Iceland. Let me just say that we are discussing with, as I mentioned, national stakeholders, solutions for Iceland.

Silicon and ferrosilicon are strategic value chains in Europe. I think our goal is to find a way to continue operating Iceland and produce those critical materials.

Obviously we cannot just do nothing because the situation is not sustainable with the current financial performance. We are looking at all options, and when I say all options, it means all options.

It's more related to the book values because discontinued operations seem to have a book value of NOK 3.5 billion. 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. Also in particular related to Iceland, where we also have given a range of the potential value.

I think I will refer to that note, which is quite specific.

There is also a question while we touch upon discontinued operation. We have some Silicones assets in Europe and the question is, what will we do with that?

Will they be sold, kept or expanded?

We have no expansion plans. We have contracts now for the siloxanes production out of Roussillon in France for the next five years.

We are also ramping up production. 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.

We are going to evaluate and are evaluating possibilities. That's basically my answer at the moment.

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 quotas that we have talked about.

No, we have not received those quotas. We have been given a, let's say, clear feedback from the Norwegian government that we will receive those quotas when all formalities with the EU and ESA are in place.

We do not capitalize these quotas. They will not give an immediate P&L effect once we receive them.

We will rather use those quotas to buy less quotas in the future or even sell quotas if we have surplus quotas.

Actually, more than signals, it's in writing. Yeah.

It's a strong signal.

It's a strong signal.

Okay, we're soon running out of time. I will take one question, one last question related to outlook for the third quarter.

The question is if you have any further details on that and the expected mentioned seasonal effects for sales figures.

August is a typical vacation month. We always see some variation in demand.

I don't have any significant additional information on that. If you want to add something.

No, I think we have covered this. We believe that we are seeing at least indications of a normalization and also a recovery in some segments, although I will not at all exaggerate that.

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 continent goes on summer vacation. We should also have that in mind.

Underlying things are at least moving in the right direction.

Very good. Thank you very much for that.

That concludes our presentation here today. 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.