Worthington Steel, Inc.

The following information supplements the risk factors described in “PART I – Item 1A. – Risk Factors” of the 2025 Form 10-K available atwww.sec.gov or at www.worthingtonsteel.com and should be read in conjunction with the risk described in the 2025 Form 10-K. These risk factors should be read carefully when evaluating our business and investments in the common shares and in connection with the forward-looking statements and other information contained in this Form 10-Q. Any of the risks described in the 2025 Form 10-K and those described in this report or other SEC filings could materially affect our business, consolidated financial condition or future results and the actual outcome of matters as to which forward-looking statements are made. The risk factors described in the 2025 Form 10-K and those described in this report or other SEC filings are not the only risks we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, also may materially adversely affect our business, consolidated financial condition and/or future results.

Proposed Acquisition-Related Risks

The Proposed Acquisition is subject to a number of conditions, and the BCA may be terminated by Worthington Steel or Kloeckner under certain circumstances. If the Proposed Acquisition is not completed, the price of our common shares may be adversely affected.

The Offer Closing is subject to certain closing conditions as set forth in the Offer Document (the “Offer Conditions”), including, among other things, Worthington Steel obtaining the required merger and investment control clearances, foreign investment clearances, and EU foreign subsidies control clearance for the Offer (together, the “Regulatory Conditions”). The Offer Conditions, other than the Regulatory Conditions, were deemed satisfied upon the expiration of the initial acceptance period on March 26, 2026. The Regulatory Conditions must be satisfied on or prior to March 12, 2027.

The BCA may be terminated by either us or Kloeckner under certain circumstances, including, among others, if (i) the Offer lapses as a result of non-satisfaction of the Regulatory Condition, (ii) a competing transaction has been consummated or (iii) if we, on the one hand, or Kloeckner, on the other hand, has materially breached our obligations under the BCA and such breach remains uncured after seven business days.

If the Regulatory Conditions are not satisfied, or if termination rights are exercised, the BCA will terminate, and the Proposed Acquisition will not be completed. If the Proposed Acquisition is delayed or not completed, the price of our common shares may decline.

If the Proposed Acquisition is not completed, we will have incurred substantial costs that may adversely affect our financial results and operations and the market price of our common shares.

If the Proposed Acquisition is not completed, the price of our common shares may decline to the extent that the current market price of our common shares reflects a market assumption that the Proposed Acquisition will be completed. In addition, we have incurred and will continue to incur substantial costs in connection with the Proposed Acquisition. These costs are primarily associated with the fees of attorneys, accountants and our financial and other advisors, as well as committed financing fees. In addition, we have diverted significant management resources in an effort to complete the Proposed Acquisition. If the Proposed Acquisition is not completed, we will have received little or no benefit in respect of such costs incurred.

Further, if the Proposed Acquisition is not completed, we may experience negative reactions from the financial markets and from our suppliers, customers and employees. Each of these factors may adversely affect the trading price of our common shares and our financial results and operations.

As of the date of this filing, we have acquired approximately 8% of the outstanding share capital of Kloeckner outside of the Offer, and we have committed to purchase an additional 1,000,000 Kloeckner Shares at €11.00 per share from a single Kloeckner shareholder in connection with the transaction. If the Proposed Acquisition is not completed and the market price of Kloeckner's shares declines, we could incur significant losses on these share positions, which could adversely affect our financial condition and results of operations.

The Proposed Acquisition may limit our financial flexibility and increase our interest expense.

We intend to fund the consideration for the Offer and related transaction costs with a combination of cash on hand and new debt financing expected to consist of long-term senior secured indebtedness, which we expect to issue subject to market conditions and other factors.

The new debt financing is expected to contain covenants limiting or restricting our ability to take certain actions, such as incurring additional debt, or under certain situations, making capital expenditures or increasing dividends beyond current levels, which could limit our financial flexibility.

In addition, although we have obtained debt financing commitments to backstop the new debt financing, if we are not able to obtain permanent financing on favorable terms, we may be required to fund a portion of the consideration for the Offer and related transaction costs at interest rates higher than currently expected, which could significantly increase our long-term cost of capital.

Elevated levels of debt driven by the new debt financing may cause us to miss out on other opportunities to grow our business such as other acquisitions or capital projects.

Restrictions on Worthington Steel’s dealings with Kloeckner may delay the implementation of our integration strategy and could adversely impact our results of operations. We further intend to enter into a domination and profit and loss transfer agreement with Kloeckner that could be disadvantageous.

On March 31, 2026, we announced that we had achieved the minimum acceptance threshold of Kloeckner’s issued share capital. Following such announcement, an additional, statutory two-week acceptance period began on April 1, 2026, which will conclude on April 14, 2026, after which we will announce the final results of the Offer. Upon the Offer Closing, we expect to acquire all the tendered Kloeckner Shares, but we also expect that there will be remaining minority Kloeckner shareholders that did not tender their Kloeckner Shares in connection with the Offer. As a result, under German law we are subject to certain restrictions in our dealings with Kloeckner.

On March 27, 2026, we informed Kloeckner about our firm intention to enter into a DPLTA with Kloeckner immediately after Offer Closing, and Kloeckner published an ad hoc announcement to this effect on the same day. While we are confident that we will secure the required majority at the general meeting of Kloeckner shareholders to approve the establishment of a DPLTA, unless and until a DPLTA is established, we may not have control over the day-to-day operations of Kloeckner. These restrictions could delay the implementation of our strategy and may adversely impact our results of operations. There can be no assurance that a DPLTA will be established.

Following the Offer Closing, we intend to enter into a DPLTA with Kloeckner. According to the applicable provisions of the German Stock Corporation Act, under a DPLTA, we would be obligated to compensate any annual net loss of Kloeckner. Furthermore, each remaining minority Kloeckner shareholder would have the option to either:

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Remain a Kloeckner shareholder and receive annual recurring compensation as stipulated by the German Stock Corporation Act; or,

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Receive adequate exit compensation in exchange for their Kloeckner Shares, in accordance with the provisions of the German Stock Corporation Act.

Kloeckner shareholders choosing the first option may later elect the second option. Our obligation to pay annual recurring compensation could result in a continuous payment obligation that may be higher than the minimum dividends that would be otherwise distributed. Our obligation to, upon shareholder demand, provide adequate exit compensation in exchange for Kloeckner Shares could require us to use significant cash or other financing resources. There can be no assurance that DPLTA will be established or that, if established, the related obligation will not adversely affect our business, financial condition, results of operations or cash flows.

Once the DPLTA is established, failure to successfully integrate our business and Kloeckner’s business in the expected timeframe may adversely affect our future results.

We entered into the BCA with the expectation that the Proposed Acquisition will result in various benefits, including certain cost savings, operational efficiencies or synergies, and an accretive effect on our earnings. To realize these anticipated benefits, our business and Kloeckner’s business must be successfully integrated. Historically, we and Kloeckner have been independent companies, and we will continue to be operated as such until the DPLTA is established. The integration may be complex and time-consuming and may require substantial resources and effort. Our management may face significant challenges in consolidating our operations and Kloeckner’s operations, integrating the two companies’ technologies, procedures, and policies, as well as addressing the different corporate cultures of the two companies. If the companies are not successfully integrated, the anticipated benefits of the Proposed Acquisition, including estimated cost, operations and commercial synergies and the timeline to realize such synergies, may not be realized fully or at all, or may take longer to realize than expected.

Additionally, our ability to realize anticipated benefits of the Proposed Acquisition could be affected by a number of other factors, including: the need for greater than expected cash or other financial resources or management time in order to integrate Kloeckner’s business; increases in other expenses related to the Proposed Acquisition, including restructuring costs; the timing and impact of purchase accounting adjustments; accounting for IFRS to GAAP adjustments; difficulties in employee or management integration; the impact of appraisal proceedings in connection with the DPLTA; adverse tax impacts related to delays in regulatory approval closing, implementation of the DPLTA, or other unanticipated factors; and unanticipated liabilities associated with the Proposed Acquisition. Any potential cost-saving opportunities may take several years following the Proposed Acquisition to implement, and any results of these actions may not be realized for several years thereafter, if at all.

We must continue to retain, recruit and motivate executives and other key employees, and failure to do so could negatively affect us.

The success of the Proposed Acquisition and our post-closing integration efforts depend, in part, on our ability to retain, recruit and motivate executives and other key employees for the benefits of the transaction to be fully realized. Our and Kloeckner’s employees may experience uncertainty about their future roles until, or even after, strategies regarding the Proposed Acquisition are announced and executed. Some of those employees may decide not to remain with us or Kloeckner as a result of the Proposed Acquisition. If key employees terminate their employment, or if an insufficient number of employees are retained to maintain effective operations, our business activities may be adversely affected, and management’s attention may be diverted from successfully integrating the Company and Kloeckner to hiring suitable replacements. The potential distractions related to the Proposed Acquisition may adversely affect our ability to keep executives and other key employees focused on business strategies and goals, to address other important personnel matters and to retain them at all. A failure by us or Kloeckner to attract, retain and motivate executives and other key employees during the period prior to or after the Offer Closing could have a negative impact on our business and our financial results and operations.

Litigation challenging the Proposed Acquisition, including under the BCA and/or any DPLTA, may prevent the Proposed Acquisition from being consummated within the expected timeframe or at all.

Lawsuits may be filed against us, our board of directors, Kloeckner, or other parties to the BCA, challenging the Proposed Acquisition and making other claims in connection therewith and/or any DPLTA. Such lawsuits may be brought by purported shareholders and seek, among other things, to enjoin consummation of the Proposed Acquisition. One of the conditions to the Offer Closing is that there is no order from any relevant court prohibiting the continuation or consummation of the Offer. While this condition was deemed satisfied upon the expiration of the initial acceptance period, if any subsequent action successfully delays or prohibits the Offer Closing, we may be unable to complete the Proposed Acquisition on a timely basis or at all. The potential distractions related to litigation challenging the Proposed Acquisition may divert management’s attention away from successfully integrating the Company and Kloeckner.

Risks Related to Our Company, Business and Operations

In February 2026, the United States and Israel launched coordinated military strikes against Iran, which retaliated with missile attacks across the region. Although we do not have material operations in the Middle East, the ongoing conflict and any further escalation, including additional military actions, retaliatory measures, sanctions, disruptions to trade or transportation routes, cyberattacks, or other governmental or market responses, has and could continue to lead to significant disruption of global energy supplies and increases in global energy prices, heighten inflationary pressures on our input costs and supply chain, adversely affect global supply chains, energy markets, commodity prices, currency exchange rates, interest rates, financial markets and overall macroeconomic conditions, increase the cost or reduce the availability of debt financing, and adversely impact customer spending patterns in markets in which we operate. While the impacts of conflict between the United States, Israel, and Iran may have an adverse effect on our business, financial condition and results of operations, we are unable to predict the extent or nature of these impacts at this time.