Dearest members of POSCO group,

A new year has dawned upon us.

I would like to begin by thanking everyone for their tireless efforts made to generate output in an increasingly challenging business environment. My heartfelt gratitude is extended to our partners, customers, suppliers, and shareholders for their unwavering support.Looking back, we sailed on rough waters in 2025.

Free trade that served for decades as the engine of global economic growth began to lose steam. In its stead, the US-China rivalry and tariff wars have amassed a wild storm that made landfall on the world’s trade system.
Amidst the hurricane that has changed the face of the global economy and the domestic business landscape, three more cyclones have pummeled the steel industry: falling demand, oversupply and the mandate to decarbonize. Furthermore, the Energy Materials business had to contend with the slowdown of the EV market and the resulting raw materials price fluctuation and the imperiled supply chain.

Domestic and external uncertainties and extensive industry-wide changes notwithstanding, we have built a framework of sustainable growth anchored on the 2-Core Businesses. In Steel, the end-to-end localization strategy we implemented in high-growth, high-margin regions helped to identify growth opportunities in a new global order branded by trade protectionism. In the Energy Materials business, unhindered by the slowdown in demand, we are getting ahead of the market rebound by purchasing prominent lithium resources.

Meanwhile, in anticipation of the rise in energy demand, we built the second LNG terminal and introduced designated LNG carriers to fortify our midstream assets in the Infrastructure business. Furthermore, additional investment in the Indonesian palm farm has helped to diversify our sources of profit.

While we applaud these accomplishments, let us also acknowledge the series of safety accidents across our business group that have inflicted pain on victims and their families.
We cannot condone such incidents in the new year. On-site safety takes precedence above all other values, such as making and selling our products, on-schedule construction, on-time delivery, and even generating profit.

The new year augurs a brutal business environment.

Protectionism and geopolitical risk have fragmented global value chains, threatening all parts of our business, ranging from fuel and feedstock purchase to product sales. Moreover, AI and robots are shaking the foundation of how we do business. We must realize that absent disruptive innovation, any business can perish.

But a crisis to all is an opportunity for some. Hidden inside the entanglement of crisis and confusion is the key to launch pads for new flight and unexpected comebacks.

Rather than conforming to predefined conventions, why not leverage our unique strengths to rewrite the rules of the game. By demonstrating all that we are capable of, I have reason to believe that we can reclaim the glory days of POSCO group’s amazing success again and again.

To claim our stake, I would like to share six initiatives that we must commit to in the new year.

First, we wish to foster a culture in which ownership of workplace safety is granted to those who perform the work. This safety practice owned and managed by those who work on-site is what we intend to model as K-Safety. We will expand application of the exemplary processes to all of our manufacturing and construction sites in Korea and overseas.

Unless it is safe to work, no one should report to work. Only when all risk factors are thoroughly identified, analyzed, and removed across all work-sites can we commit to practicing zero-tolerance against occupational accidents.

Management must understand that slogans do little to transform a safety culture; actions speak much louder than words. Therefore, as managers of people and organization, we urge you to put your own boots on the ground to detect and eliminate factors that compromise safe work. Engaging and supporting such activities is what will directly impact enhanced safety management.

People on the ground know best their place of work; therefore, we authorize you to take full ownership to establish work spaces free of harm or unsafe practices. In tandem, the company will guarantee your right to take part in defining what constitutes worker safety and the safe workplace.

Additionally, we will take full advantage of the services of our safety solution provider, an affiliate company established last year, that will seek breakthrough platforms and processes to prevent incidents before they occur. The practical knowledge and know-how acquired through various projects will be cross-fertilized to our offshore subsidiaries and to other industries in Korea. This is how we intend to exercise our social responsibility to our community and to champion K-Safety to the world.

Second, technology is now a measure of business competency. Without missing a beat, we must shift gears to operate in the next industrial paradigm that includes AI transformation (AX).

A business that continues to grow has strong roots made of solid manufacturing skills and technological prowess. That is how they remain undisturbed by violent changes in business environment.
Seeking comfort in old ways and failing to put material distance between us and the competition is the surest way to jeopardize today’s survival and tomorrow’s growth.

In the manufacturing scene, we plan to create a safe and comfortable workplace. To do so, we will tap into the Intelligent Factory to enhance per capita productivity and the robot to automate high-risk manual workstations.

On the administrative front, AI will redefine the office and human-machine interaction and literacy, allowing people to delve into deeper insight, respond more attentively to market changes, and generate creative solutions for greater output.

Meanwhile, we have set the goal to reinforce our R&D infrastructure, exemplified by the Australia Critical Mineral R&D Laboratories and our R&D center in China, in order to expand our technological capacity to spearhead industrial advancement. These efforts will help to identify changing technology patterns and market needs in timely fashion and encourage close cooperation with outside professionals to stay ahead in the race to future solutions.

Third, we have a paramount task to reinforce our native competence to offer the world’s best steel. Our growth strategy will be differentiated by each market to address the fragmented value chains. Finally, we will decarbonize to ensure a sustainable future.

Low-priced products from rival mills are flooding our markets while competition for high value-add product development is heating up. In response, we plan to fortify our market leadership and optimize our profit structure. First, the Cost Innovation 2030 (CI 2030) project will tap into technology solutions to improve cost structure. Second, our business portfolio will include 8 strategic products* deemed essential for future operations.
* Steel plates for wind power, STS for renewable energy, E-steel for power plants, PosMAC for solar power, Giga Steel, Hyper NO, high manganese steel, and electric furnace-produced premium steel

Furthermore, the K-Steel Act* that passed in 2025 offers additional impetus to follow through with the construction of the HyREX Demo Plant in Pohang and the electric arc furnace in Gwangyang, thereby building the infrastructure to respond to the carbon-reduced steel demand.
* Steel Industry Support Act is a 570 billion won support package that the Korean legislature passed in November 2025 to reinforce steel exports and to fund industry restructuring, i.e., plant modernization, capacity adjustment.

While local demand industries languish and trade protectionism intensifies, some markets, e.g., India, the U.S., promise growth potential. By offshoring our production base in collaboration with prominent local partners, we can generate substantive performance resulting from our end-to-end localization strategy.

The profits generated through our localization strategy will feed into mid-to-long term investments to decarbonize our domestic market. Once this virtuous loop is achieved, protectionism and carbon neutrality will no longer threaten our survival. Instead, they will become the keys that open the doors to divine opportunities.

Fourth, in the Energy Materials business, investment will be selective and next-generation R&D accelerated to secure future growth; additionally, by exploring new demands in promising markets, we will identify a steady basis for future business.

Despite slower-than-expected growth of the battery market, growing demand for entry-level EVs and ESS illustrate a structural pattern that compels an agile strategy.

By leveraging the non-China lithium supply chain that we built last year in Australia and Argentina, we will reinforce our marketing capacity and broaden our reach. For example, to meet our R&D goals to respond to customers’ needs, the CAM product mix will be diversified. Finally, we will acquire talent and dedicate professionals to support our customers’ growth roadmap.

In the face of intensifying competition, we seek to maintain a sustainable profit structure. Efforts including process optimization will help to dramatically shore up productivity to innovate production cost; development of next-generation technology will strengthen our high value-add product portfolio.

Fifth, the Energy business has the potential to reinvent itself as our Next Core business. To do so, each value chain operation must generate sufficient profit to assume a critical position in the group’s business portfolio.

Energy demand is rising sharply due to AI and electrification. As a result, countries are prioritizing the acquisition of sustainable power as a means to protect their industrial and national security. Simultaneously, leading global businesses are reassessing their inventory and readiness to preserve their market dominance.

In the race to build energy security, LNG has emerged as an alternative power source that offers stable supply and lower emissions.
As a result, the Alaska LNG Project is an opportunity to expand our energy assets in the Arctic region. Moreover, we will continue to pad our profit structure through new operations and investments. For example, in addition to the new function established in Singapore last year to trade LNG, we will continue our district power supply business and invest in overseas LNG power plants.

In our effort to make the long-term transition to renewable energy use, active collaboration should be sought to work with industry leaders. With the knowledge and experience gained in the partnership projects on domestic offshore wind farms as well as solar and ESS projects rolled out overseas, we can build native competencies to launch our own commercial business.

Finally, let us aim to leverage what we have learned in the Materials business. Crisis is no longer an aberration; uncertainty is a new constant. By applying the knowledge and know-how that we have accumulated to exploring prospective new business domains, we can define a new engine to drive future industries. I count on all of us to put our heads together to design an enhanced group portfolio that will resist any and all adversity.

Dear members of POSCO group,

What sets the current industrial shift apart is its far-reaching impact of the change and the speed at which we must adapt. The sheer velocity and complexity defy directional navigation.

However, adversity tests our strength and resolve. Confronted by industry-wide transformation, we face another grave test of our ability to remain calm, balanced, and on-course. This is when we get to prove once again that we will persevere to keep our stations and to seek practicable solutions.

The Chinese zodiac names 2026 as the year of the red horse. I cannot find a better year in which to take a meticulously designed plan to add value to the world and to implement it with remarkable speed and drive. Like the red horse, I invite all of us to forge ahead to unleash the passionate momentum in our quest to build global excellence.

When each of us flexes our powerful muscle to engage in the explosive acceleration into the future, I have no doubt that we will transcend barriers to cover new distances and discover unseen heights.

Finally, I wish you health and fulfillment in the new year, for your family and at your place of work.

Happy New Year.

Chang, In Hwa
CEO, POSCO HOLDINGS