Investors

MARKET FORECAST

FY 2025 was a distinctive year for steelmakers: some of them were still penalized by the cost of energy in Europe, while others in the USA were supported by favorable pricing policies. However, a downturn in margins and volumes was gradually absorbed at the end of the year, and the first six months of 2026 were more positive for all, with the expectation of closing the year with less geopolitical uncertainty and better demand.

Exceptions to this were India and North Africa, which maintained significant volumes in steel consumption in those regions with a stable economic growth over time.

The market is affected by uncertainties generated by the global geopolitical situation, where the conflicts between Russia and Ukraine and in the Middle East are leading to considerable trade restrictions. However, expectations for a gradual normalisation could generate a recovery in demand and consumption in the coming months.

DANIELI PLANT MAKING

Thanks to their strong balance sheets and good results of the past few years, our customers have continued to invest in new plants in order to reduce CO₂ emissions and improve the quality and competitiveness of operations to prepare for a less unfavorable economic cycle. Our order book therefore remains satisfactory as regards quantity and well diversified in terms of plant types.

Moreover, the innovative technologies offered by Danieli - such as the Digimelter, which is progressively replacing conventional EAF power feeding systems, and the direct casting-rolling mills for flat (QSP-DUE) and long (QLP MI.DA.) products - continue to have growing success on the international market, so much so that our competitors are attempting to offer products similar to ours, abandoning their own solutions and belatedly following our endless technologies in the segment of flat and long products.

We strengthened our presence on the Indian market, and, during the period, we were awarded a major order for green steel by the Korean company Hunday. Also, we are now finalizing the Project Finance for the Piombino plant with Metinvest Adria, which confirms the interest in Danieli’s technological solutions in the field of quality products.

The success of the QSP-DUE and QLP MI.DA. direct casting-rolling mills is tied to the competitiveness of their total cost per ton: CapEx + OpEx + CO₂ tax.

With the Energiron Direct Reduction Process technology we have had and will have excellent opportunities for projects aimed at replacing the existing coal-based blast furnaces with green plants ready to utilize hydrogen when available in a competitive way.

On the other hand, blast furnaces will continue to be installed in India and in China, where not enough gas is available to replace coal, although utilizing many innovative technologies that can significantly reduce CO₂ emissions.

In conclusion, the order backlog is satisfactory thanks not only to the positive trend of the steel market over the last few years but also to the innovative and sophisticated digital technologies that Danieli is making available to steelmakers.

DANIELI STEEL MAKING (ABS – ACCIAIERIE BERTOLI SAFAU)

In line with market trends, 2025-2026 was a challenging year for ABS, which maintained good volumes despite experiencing a contraction in margins. The financial year closed with improving key indicators, despite a slightly negative economic result.

During the financial year, construction work on the new Hybrid Digital Green Plant line was concretely initiated, with ramp up expected in 2028. The new plant will increase production capacity by approximately 700,000 tons of liquid steel to serve ABS rolling mills, delivering significant improvements in energy efficiency, noise impact, waste reduction, and water recovery, as well as introducing a new steel production model based on the synergistic integration of sustainability, circularity, and high efficiency of processes.

ABS continues to invest in product innovation at its ACM research center in Metz, developing technological solutions for new steels with projects aimed at enhancing product characteristics, improving production efficiency, and reducing the carbon footprint throughout the value chain.

The company remains committed to reducing Scope 1 and 2 emissions by 30% within 2030 and collaborates with several Italian and European universities, integrating academic and industrial research in order to actively contribute to improving the sustainability of the steel-making industry.

The market of special steels is showing signs of improvement compared to the previous period, creating the conditions for a progressive strengthening of results and a positive consolidation during 2027, supported by a corporate value proposition based on the integration of metallurgical expertise, technologies, knowledge of the supply chains, and customer service, where innovation represents a strategic and distinctive lever.

GROUP VISION

We have managed the Group’s operations with care and prudence, carrying on the spiritual legacy of our predecessors, the President Benedetti and Mrs. Cecilia Danieli, with the aim of keeping the company competitive and resilient in the years to come.

In this phase, the market is demanding quotations for highly complex large-scale plants, where whether or not an order is positively closed is the result of very different management decisions and choices.

The negotiations currently being finalized point to a good order intake also for the financial year 2026-2027, which will enable the company to maintain a high order portfolio.

Our commitment to innovation remains our top priority, with the aim of reducing plant OpEx and achieving net-zero carbon emissions to maintain a front-runner position in both plant making and steel making sectors.

Based on these considerations, the forecast for the 2026-27 financial year is:

• Revenues Euro 3,900 – 4,200 million
• EBITDA Euro 430 - 450 million
• Net cash (Adjusted) Euro 1,000 - 1,100 million
• Order backlog Euro 5,800 – 6,000 million

During this period, we remain committed to investing approximately 300-350 million euro to develop new initiatives in the steel sector and participate in joint ventures with some of our customers, making strategic investments also in Italy to improve the country’s competitiveness.

We believe that the emission reduction target promoted at COP30 in Belem should be a goal to aim for, thanks to the innovations developed today, but that it should also be accompanied by consistent and coordinated political strategies among states, allowing for a reasonable economic balance.

The Danieli Group excels not only in technology but also in its respect for the ESG (Environmental, Social and Governance) principles, which must be transformed into levers of sustainable competitiveness for us and our customers along a path that will lead them to produce steel with zero emissions.

SOCIAL ASPECTS, EDUCATION / EMPLOYMENT

Danieli aims at a sustainable development of all its businesses and also continues with its social commitment to support the local community:

• The Educational Hub Zerotredici continues its activity that is appreciated by students and families both for the high quality of education and for its focus on soft skills and teamwork.
• The ITS (Higher Technical Institute) has obtained excellent results in preparing its students, thus establishing itself as one of the top Italian national higher technical institutes.
• We inaugurated in Udine the new multifunctional center Corte Villalta (former Dormisch) that is housing the new modern premises of ITS with its state-of-the-art laboratories. The first part of the new sports complex of the Corte delle Fucine Hotel at Buttrio was completed, while the final stage of the investment, including both indoor and outdoor swimming pools, is about to commence. Our target is to complete these investments by the end of 2027.
• We have carried out several solidarity and charity actions in Italy, India, China and Thailand to address situations of need and hardship. Furthermore, we support sports, cultural and social associations in the territories where we operate.
• It is with great satisfaction that we continue to sponsor the Italian Paralympic Swimming Team which remains one of the best in the world, thanks to its commitment, value and results.
• The Group’s focus also extends to arts promotion, aiming to safeguard and enhance the regional cultural heritage.

Before concluding, we wish to thank our shareholders who continue to invest more than 85% of our profits back into the company as self-financing. This is perceived as an expression of the shareholders’ trust and esteem for the Danieli Team, which we intend to honor with our commitment and to the best of our abilities.

On behalf of the Board of Directors and of the shareholders, special thanks go to the Danieli Group Team who, with passion and professionalism, are strongly committed to achieving the agreed objectives for our company’s continuing improvement, honoring the motto “Danieli, the reliable and innovative partner to be a step ahead in CapEx and OpEx”, for the satisfaction of our customers and business partners. And last, but not least, we express thanks for their efforts in bringing about the cultural change that today’s technological and social trends call for, which is essential to maintaining competitiveness and market shares in a highly complex and constantly evolving global economy.

Alessandro Brussi