Ferroglobe (GSM) FY Conference Summary Company Overview - Ferroglobe plc is a major producer of metallurgical products including silicon metal, ferrosilicon, and manganese alloys, with a market cap of approximately $800 million and 3,300 employees globally [2][4] - The company was formed in 2015 through a merger between Ferro Atlantica in Spain and Globe Specialty Materials in the U.S. [4] Financial Performance - Ferroglobe reported $1.6 billion in sales [4] - The company has significantly reduced its debt from $550 million in 2021 to about $100 million currently, indicating a strong balance sheet [5][24] - The company has a net cash position and began paying dividends in Q1 2024, increasing the dividend by 8% in 2025 [9][28] Revenue Breakdown - Revenue sources: - Silicon metal: ~50% - Ferrosilicon and silicon-based alloys: ~25% each [6][7] - Geographic revenue distribution: - North America: 35% - Europe: 40% - Rest of the world: 25% [7] Market Dynamics - The company faces challenges in the solar market due to a lack of subsidies and trade turmoil, but sees long-term opportunities in electric vehicles (EVs) [8][9] - Ferroglobe is involved in a partnership with CorShell to enhance silicon use in EV battery anodes, which offers significant advantages over graphite [8][15] - The company is the largest producer of silicon metal in Europe and the U.S., and is vertically integrated in quartz mining [10][40] Trade and Regulatory Environment - The company is affected by Chinese dumping of silicon metal into Europe, which has driven prices down by approximately 30% in the last six months [42] - Trade measures are being implemented in the U.S. and EU to protect domestic producers, with preliminary decisions expected in September and November 2025 [19][22] - The EU's internal production market share has decreased from 40% to 15% over the last five years, with a goal to return to 40% [21] Operational Efficiency - Ferroglobe has focused on operational excellence and working capital management, with a significant reduction in working capital planned [12][34] - The company has a hiring freeze in place and is focused on maintaining efficiency without sacrificing sales opportunities [56][59] Future Outlook - The company anticipates growth in the U.S. market for silicon, while Europe is expected to remain stagnant [23] - Ferroglobe is optimistic about the impact of trade measures on market share and economic metrics [38][39] - The company is positioned to benefit from the long-term growth in solar and EV markets despite current challenges [39][40] Additional Insights - Ferroglobe has invested $10 million in CorShell and $60 million in maintenance CapEx annually [29][30] - The company has flexibility in production, allowing it to switch between silicon and ferrosilicon based on market conditions [27] - The company is actively managing energy costs, with contracts covering 75% of energy needs in most countries, except Spain [12][13]

Financial Data and Key Metrics Changes - The company reported a 26% increase in sales for Q2, reaching $387 million, while raw material costs only increased by 6%, leading to improved margins with raw material costs as a percentage of sales declining from 78% to 66% [25] - Adjusted EBITDA for Q2 improved significantly to $22 million from a loss of $27 million in Q1, marking an improvement of $48 million [25][26] - The company maintained a net cash positive position at the end of the quarter with a balance of $10 million, down from $19 million at the end of Q1 [32] Business Line Data and Key Metrics Changes - Silicon metal revenue increased by 24% to $130 million, driven by a 23% increase in shipments [26][27] - Silicon-based alloys revenue rose 23% to $112 million, supported by a 24% increase in shipments, while pricing slightly decreased by 1% [29] - Manganese-based alloys saw the strongest improvement with revenue up 43% to $106 million, driven by a 31% increase in volumes and a 9% increase in average selling prices [30][24] Market Data and Key Metrics Changes - European silicon metal prices declined by approximately 20% in the past month due to a substantial increase in imports from China, which pressured the market and reduced EU producers' market share from 40% to about 15% [9] - The U.S. market experienced a significant increase in ferrosilicon sales, with the highest volume recorded in the past eight quarters, supported by trade actions against imports from Russia, Kazakhstan, Brazil, and Malaysia [12][35] Company Strategy and Development Direction - The company is focusing on operational efficiency and cost control while navigating a challenging market environment, with plans to optimize production by switching furnaces from silicon metal to ferrosilicon [10][15] - The company aims to leverage its vertical supply chain integration to benefit from trade restrictions in the U.S. and Europe, enhancing its competitive position [16] - The company is optimistic about 2026, expecting improvements from trade decisions and supply curtailments, which should enhance the operating environment [35] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the elevated uncertainty in global trade policies and tariffs, leading to the withdrawal of the 2025 guidance [5][34] - The company is optimistic about the potential benefits from EU safeguard measures and U.S. trade actions, which are expected to improve market dynamics [11][35] - Management highlighted the importance of NATO's increased defense spending, which is anticipated to bolster the steel and aluminum industries, benefiting the company [14] Other Important Information - The company repurchased 600,000 shares for $2 million during the quarter and paid $2.6 million in dividends [10][32] - The company joined the Russell 2000 and 3000 indexes, increasing visibility among institutional investors [16] Q&A Session Summary Question: Why was the annual EBITDA guidance withdrawn? - Management indicated that the extreme uncertainty in global trade tariffs and the significant import of silicon metal from China at low prices made it difficult to project future volumes and prices, leading to the decision to withdraw guidance [39][41] Question: Is there a risk that EBITDA could revert negative before the end of the year? - Management stated that while they cannot predict the exact amount of EBITDA, they have been able to deliver positive EBITDA despite the current uncertainties [42] Question: Can you discuss the exposure to U.S. tariffs and implications for the supply chain? - Management confirmed that there are currently no impacts on the Becancour facility from U.S. tariffs, and they have secured supply for critical raw materials [44] Question: What is the expected impact of EU safeguards on volumes? - Management noted that they are engaged with the European community regarding safeguards and expect a preliminary decision in August and a final decision in November, but they refrained from speculating on the specific impacts at this stage [51][52] Question: What is the volume impact of switching furnaces from silicon metal to ferrosilicon? - Management confirmed that the switch was made due to increased demand for ferrosilicon in the U.S., positively impacting EBITDA [56] Question: Any updates on the Coorshell investment? - Management highlighted that the new pilot plant for Coorshell has started operating smoothly, with promising results in cycle efficiency, and they are in the process of assembling cells for major OEMs [60]

Financial Performance - Q2 2025 sales increased by 26% to $386.9 million compared to $307.2 million in Q1 2025[34] - Adjusted EBITDA improved significantly from $(26.8) million in Q1 2025 to $21.6 million in Q2 2025[34] - Adjusted EBITDA margin increased from (9)% in Q1 2025 to 6% in Q2 2025[34] - Adjusted diluted EPS improved from $(0.20) in Q1 2025 to $(0.08) in Q2 2025[34] - The company generated positive operating cash flow of $15.6 million in Q2 2025 compared to $19.4 million in Q1 2025[44] Market and Operations - The company withdrew guidance due to uncertainty and limited visibility in the market[12, 50] - Silicon metal revenue increased 24% to $130 million in Q2 2025[38] - Silicon-based alloys revenue increased 23% to $112 million in Q2 2025[41] - Manganese-based alloys revenue increased 43% to $106 million in Q2 2025[43] Strategic Outlook - The company expects EU safeguards and the U S silicon metal trade cases to improve 2026 results[12]