Worthington Steel, Inc.

The following information supplements the risk factors described in “PART I – Item 1A. – Risk Factors” of the 2026 Form 10-K available at www.sec.gov or at www.worthingtonsteel.com and should be read in conjunction with the risk described in the 2026 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 2026 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 2026 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.

Risks Related to the Kloeckner Acquisition and Integration

Restrictions on our interactions with Kloeckner may delay or limit the implementation of our integration strategy and could adversely impact our results of operations. On June 3, 2026, we completed the Kloeckner Acquisition and held approximately 60.9% of Kloeckner’s outstanding share capital. Through subsequent transactions, including the Delisting Tender Offer completed in August 2026, we acquired additional Kloeckner shares and, as of August 31, 2026, held approximately 62.11% of Kloeckner’s outstanding share capital. As a result, there remain minority Kloeckner shareholders that did not tender their Kloeckner shares in connection with the original takeover offer. The acceptance period for the Delisting Tender Offer expired on August 12, 2026, and Kloeckner’s shares were delisted from the regulated market of the Frankfurt Stock Exchange effective that date.

Under German law, we are subject to certain restrictions in our interactions with Kloeckner while minority shareholders continue to hold more than 10% of outstanding Kloeckner shares and until and unless a DPLTA becomes effective. On September 8, 2026, Worthington Steel GmbH and Kloeckner executed the DPLTA. The DPLTA is not currently effective and remains subject to the required shareholder approvals and registration with the commercial register at Kloeckner’s registered seat. The DPLTA cannot become effective before January 1, 2027. While we are confident that we will secure the required majority at the general meeting of Kloeckner shareholders to approve the DPLTA, unless and until a DPLTA becomes effective, we may not have control over Kloeckner’s day-to-day operations, notwithstanding that we have a controlling financial interest for GAAP purposes. These restrictions could limit or delay implementation of our integration strategy and may adversely impact our results of operations. There can be no assurance that a DPLTA will become effective or as to the timing of its effectiveness.

If the DPLTA becomes effective, we will be subject to ongoing financial obligations to Kloeckner and its minority shareholders that could adversely affect our business, financial condition, results of operations or cash flows. Under the DPLTA, once effective, each remaining minority Kloeckner shareholder may elect either to receive recurring annual compensation of €0.67 per share on a gross basis for each full fiscal year of Kloeckner or to tender its shares for cash compensation of €11.00 per share. The adequacy of either form of compensation may be challenged in appraisal proceedings under German law, which could result in higher payments than currently contemplated.

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 otherwise be 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 and may be subject to appraisal proceedings that could result in higher payments than anticipated. There can be no assurance that, if a DPLTA becomes effective, the related obligations will not adversely affect our business, financial condition, results of operations or cash flows.

Failure to successfully integrate our business and Kloeckner’s business may adversely affect our future results. In January 2026, we entered into a business combination agreement (“BCA”) with Kloeckner and launched a voluntary public cash takeover offer with all outstanding Kloeckner shares at €11.00 per share. We entered into the BCA with the expectation that the Kloeckner 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. 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. Until the DPLTA becomes effective, applicable German law limits certain integration actions. As a result, integration may take longer or cost more than expected, and the timing and amount of anticipated synergies remain uncertain. If the companies are not successfully integrated, the anticipated benefits of the Kloeckner 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.

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 Kloeckner Acquisition and our post-closing integration efforts depends, 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 Kloeckner Acquisition are announced and executed. Some of those employees may decide not to remain with us or Kloeckner as a result of the Kloeckner 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 Kloeckner to hiring suitable replacements. The potential distractions related to the Kloeckner 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 could have a negative impact on our business and our financial results and operations.

The Kloeckner Acquisition has materially increased our indebtedness and interest expense and may limit our financial flexibility and increase our interest expense. We funded the consideration for the Kloeckner Acquisition and related transaction costs with both U.S. Dollars and Euros with a combination of cash on hand and new debt financing, including the net proceeds from our previously announced notes offering and borrowing under our term loan. In addition, as a result of the Kloeckner Acquisition, we assumed Kloeckner’s existing debt obligations, including the German RCF, the Swiss RCF, the ABL USA Facility and various other loans, which subject Kloeckner and its subsidiaries to additional financial covenants, borrowing base requirements and, in certain circumstances, mandatory prepayment obligations. The new debt financing and the assumed Kloeckner debt instruments 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. Elevated levels of debt driven by the new debt financing and the assumed Kloeckner debt may cause us to miss out on other opportunities to grow our business such as other acquisitions or capital projects. See “Risks Related to Our Business—Capital Structure” for more information on our debt financing and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Kloeckner Debt” for more information on the Kloeckner debt instruments.

Litigation or appraisal proceedings relating to the Kloeckner Acquisition and/or any DPLTA may result in management distraction, delayed integration activities or increase our financial exposure. Lawsuits may be filed against us, the Board, Kloeckner, or other parties to the BCA in connection with the Kloeckner Acquisition. In addition, because the DPLTA has been executed, minority shareholders may initiate appraisal proceedings concerning the adequacy of the compensation or exit consideration offered to them under the DPLTA if it becomes effective. While such appraisal proceedings would not affect the effectiveness of the DPLTA, they could result in higher payments than anticipated. The potential distractions and costs related to any such litigation or proceedings may divert management’s attention away from successfully integrating Kloeckner’s business with ours and could result in additional financial exposure.