SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

 

For the Month of August, 2021

 

Commission File Number: 001-37668

 

FERROGLOBE PLC

(Name of Registrant)

5 Fleet Place

London, EC4M7RD

(Address of Principal Executive Office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F 

Form 40-F 

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):     

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):     

 

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes 

No  

 

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):  N/A

 



This Form 6-K consists of the following materials, which appear immediately following this page:

Press release dated August 23, 2021 announcing results for the quarter ended June 30, 2021
Second quarter 2021 earnings call presentation


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

Date: August 23, 2021

  

FERROGLOBE PLC

 

 

 

 

by

/s/ Marco Levi

 

 

Name: Marco Levi

 

 

Title: Chief Executive Officer (Principal Executive Officer)


Ferroglobe Reports Results for the Second Quarter 2021

Sales of $418.5 million, Adjusted EBITDA of $34.1 million, and return to positive net income


Q2 sales of $418.5 million, up 15.8% compared to $361.4 million in Q1 2021, and up 67.4% compared to $250.0 million in Q2 2020
Adjusted EBITDA of $34.1 million, up 54.5% compared to $22.1 million in Q1 2021, and up 52.1% compared to $22.4 million in Q2 2020
Q2 marks a return to positive net profit of $0.7 million compared to net loss of ($68.5) million in Q1 2021, and ($14.0) million in Q2 2020
Positive operating cash flow of  $37.8 million and a return to positive net cash flow of $21.6 million
Working capital increase of marginally $0.6 million in Q2 2021; increased efficiency supporting flat level of working capital despite the ramp-up in activity
Improved production costs mainly driven by higher fixed cost absorption, and focused initiatives targeting key technical metrics
Completion and funding of financiang transactions (extension of bond maturity and issuance of the new super senior secured notes and equity) on July 30, 2021

LONDON, August 23, 2021 (GLOBE NEWSWIRE) – Ferroglobe PLC (NASDAQ: GSM) (“Ferroglobe”, the “Company”, or the “Parent”), a leading producer globally of silicon metal, silicon-based and manganese-based specialty alloys, today announced results for the second quarter 2021.

Q2 2021 Earnings Highlights

In Q2 2021, Ferroglobe posted a net profit of $0.7 million, or $0.01 per share on a fully diluted basis. On an adjusted basis, the Q2 2021 net profit was $3.0 million, or $0.02 per share on a fully diluted basis.

Q2 2021 reported EBITDA was $31.9 million, up from ($18.9) million in the prior quarter. On an adjusted basis, Q2 2021 EBITDA was $34.1 million, up from adjusted EBITDA of $22.1 million in Q1 2021. The Company reported an adjusted EBITDA margin of 8.1% for Q2 2021, compared to 6.1% for Q1 2021.

    

Quarter Ended

    

Quarter Ended

Quarter Ended

Year Ended

Year Ended

    

$,000 (unaudited)

June 30, 2021

March 31, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Sales

$

418,538

$

361,390

$

250,004

$

779,928

$

561,226

Net profit (loss)

$

730

$

(68,517)

$

(14,035)

$

(67,787)

$

(63,093)

Diluted EPS

$

0.01

$

(0.40)

$

(0.07)

$

(0.39)

$

(0.35)

Adjusted net income (loss) attributable to the parent

$

2,964

$

(18,172)

$

(11,064)

$

(15,208)

$

(48,777)

Adjusted diluted EPS

$

0.02

$

(0.12)

$

(0.07)

$

(0.10)

$

(0.29)

Adjusted EBITDA

$

34,088

$

22,069

$

22,413

$

56,157

$

4,796

Adjusted EBITDA margin

8.1%

6.1%

9.0%

7.2%

0.9%

Marco Levi, Ferroglobe’s Chief Executive Officer, commented, “The second quarter results reflect a strong improvement in our overall performance and marks the return to profitability, an important goal for this year.  Both the top line and bottom line continue to strengthen due to successful execution of the strategic plan, as well as the overall robustness across our all of our markets.”  Dr. Levi added, “As we look towards the back half of the year, we will keep the momentum going on all fronts to capitalize on the market opportunities and successfully execute some critical initiatives underpinning the strategic plan.  Collectively, these efforts support the focus on improving the core of our business and ensuring a stronger and more profitable Company.”


Cash Flow and Balance Sheet

Cash generated from operations during Q2 2021 was $37.8 million, and the Company returned to positive net cash flow of $21.6 million during the quarter.

Working capital only increased by $0.6 million, from $334.3 million as of June 30, 2021 to $333.7 million as of March 31, 2021. Increased emphasis on operational and financial efficiencies resulted in this relatively flat level of working capital despite the ramp-up in activity.

Net debt was $358 million as of June 30, 2021, up from $334 million as of March 31, 2021. This is primarily attributable to the initial $40 million tranche raised during the quarter, of an aggregate $60 million of the new super senior secured.  The subsequent $20 million tranche was closed and funded in the third quarter.

Beatriz García-Cos, Ferroglobe’s Chief Financial Officer, commented, “This marks an important quarter for the Company.  The return to positive net income and positive net cash flow validates the on-going efforts to turnaround our financial performance.  However, we remain far from reaching the full potential of this business.  Our top line is not fully benefiting from the current market prices across our product portfolio as we have fixed price contracts which begin to roll off during the back half of the year.  Furthermore, we had a number of one-off, non-recurring expenses which also adversely impacted our margins.  We remain extremely focused on cost management, particularly to off-set inflationary pressures on energy pricing, mainly in Europe.  These factors will collectively drive an acceleration in our performance and cash generation during the remainder of the year.”  Ms. García-Cos added, “The comprehensive financing we completed in July now provides the financial support to execute on important elements of the transformation plan and ensures a capital structure that provides the operational flexibility to capitalize on this strong market backdrop.”

COVID-19


COVID-19 has been and continues to be a complex and evolving situation, with governments, public institutions and other organizations imposing or recommending, and businesses and individuals implementing, at various times and to varying degrees, restrictions on various activities or other actions to combat its spread, such as restrictions and bans on travel or transportation; limitations on the size of in-person gatherings, restrictions on freight transportations, closures of, or occupancy or other operating limitations on work facilities, and quarantines and lock-downs.

As a result of this pandemic and the strict confinement and other public health measures taken around the world, the demand for our products in the second and third quarters of 2020 was reduced significantly compared with the first and fourth quarters of the year. During the fourth quarter of 2020, demand level for our products increased to levels similar to those prior to the outbreak. In first and second quarter of 2021, demand for our products has increased even further than in the fourth quarter of 2020. However, COVID-19 has negatively impacted, and will in the future negatively impact to an extent we are unable to predict, our revenues.

Subsequent events

On July 30, 2021, the Company announces the occurrence of “Transaction Effective Date” under Lock-up agreement dated March 27, 2021 and completion of the financing transactions.  The financing consisted of:

(i) Extension of the maturity date of the Notes from March 31, 2022 to December 31, 2025

(ii) Issuance of $60 million of new senior secured notes, and

(iii) $40 million of equity issuance

Discussion of Second Quarter 2021 Results


The financial results presented for the second quarter are unaudited.

Sales

Sales for Q2 2021 were $418.5 million, an increase of 15.8% compared to $361.4 million in Q1 2021.

    

Quarter Ended

    

Quarter Ended

    

Quarter Ended

Six months Ended

Six months Ended

    

June 30, 2021

March 31, 2021

Change

June 30, 2020

Change

June 30, 2021

June 30, 2020

Change

Shipments in metric tons:

Silicon Metal

67,322

61,275

9.9%

47,884

40.6%

128,597

101,205

27.1%

Silicon-based Alloys

65,222

61,604

5.9%

39,479

65.2%

126,826

100,411

26.3%

Manganese-based Alloys

68,323

72,609

(5.9)%

55,290

23.6%

140,932

129,014

9.2%

Total shipments*

200,867

195,488

2.8%

142,653

40.8%

396,355

330,630

19.9%

Average selling price ($/MT):

Silicon Metal

$

2,347

$

2,285

2.7%

$

2,215

5.9%

$

2,317

$

2,213

4.7%

Silicon-based Alloys

$

1,830

$

1,665

9.9%

$

1,537

19.0%

$

1,750

$

1,499

16.7%

Manganese-based Alloys

$

1,414

$

1,174

20.5%

$

1,088

30.0%

$

1,290

$

1,022

26.2%

Total*

$

1,862

$

1,677

11.0%

$

1,591

17.0%

$

1,770

$

1,531

15.6%

Average selling price ($/lb.):

Silicon Metal

$

1.06

$

1.04

2.4%

$

1.00

5.9%

$

1.05

$

1.00

4.7%

Silicon-based Alloys

$

0.83

$

0.76

9.2%

$

0.70

19.0%

$

0.79

$

0.68

16.7%

Manganese-based Alloys

$

0.64

$

0.53

21.0%

$

0.49

30.0%

$

0.59

$

0.46

26.2%

Total*

$

0.84

$

0.76

11.0%

$

0.72

17.0%

$

0.80

$

0.69

15.6%


* Excludes by-products and other

Sales Prices & Volumes By Product

During Q2 2021, the average selling prices across our product portfolio increased by 11.0% versus Q1 2021. During the quarter,  the average selling prices of silicon metal increased 2.7%, silicon-based alloys prices increased 9.9%, and manganese-based alloys prices increased 20.5%.

Overall sales volumes in Q2 increased  by 2.8% versus the prior quarter. During the quarter, the shipmentsof silicon metal increased 9.9%, silicon-based alloys shipments increased 5.9%, and manganese-based alloys shipments decreased 5.9% versus Q1 2021.

Cost of Sales

Cost of sales was $267.9 million in Q2 2021, an increase from $250.2 million in the prior quarter. Cost of sales as a percentage of sales decreased to 64.0% in Q2 2021 versus 69.2% for Q1 2021. This improvement is primarily attributable to higher sales  and a reclassification from this account to Other operating expenses to conform the group presentation.

Other Operating Expenses

Other operating expenses amounted to $57.6 million in Q2 2021, an increase from $36.8 million in the prior quarter. The increase in these expenses was mainly due to the impact of the European free CO2 rights for 2021. The free allowance of these CO2 rights are recognized in Other Operating Income.

Net Loss Attributable to the Parent

In Q2 2021, net profit attributable to the Parent was $1.9 million, or $0.01 per diluted share, compared to a net loss attributable to the Parent of $67.4 million million, or ($0.40) per diluted share in Q1 2021.


Adjusted EBITDA

In Q2 2021, adjusted EBITDA was $34.1 million, or 8.1% of sales, up 54.5% compared to adjusted EBITDA of $22.1 million, or 6.1% of sales in Q1 2021. The increase in the Q2 2021 Adjusted EBITDA is primarily driven by the improvement in average realized prices across the product portfolio.

Conference Call

Ferroglobe management will review the first quarter during a conference call at 9:00 a.m. Eastern Time on August 24, 2021.

The dial-in number for participants in the United States is + 1 877-293-5491 (conference ID: 7458760). International callers should dial + 1 914-495-8526 (conference ID: 7458760). Please dial in at least five minutes prior to the call to register. The call may also be accessed via an audio webcast available at https://edge.media-server.com/mmc/p/hqshmr5i

About Ferroglobe

Ferroglobe is one of the world’s leading suppliers of silicon metal, silicon-based and manganese-based specialty alloys and ferroalloys, serving a customer base across the globe in dynamic and fast-growing end markets, such as solar, automotive, consumer products, construction and energy. The Company is based in London. For more information, visit http://investor.ferroglobe.com.

Forward-Looking Statements

This release contains “forward-looking statements” within the meaning of U.S. securities laws. Forward-looking statements are not historical facts but are based on certain assumptions of management and describe the Company’s future plans, strategies and expectations. Forward-looking statements often use forward-looking terminology, including words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “forecast”, “guidance”, “intends”, “likely”, “may”, “plan”, “potential”, “predicts”, “seek”, “target”, “will” and words of similar meaning or the negative thereof.

Forward-looking statements contained in this press release are based on information currently available to the Company and assumptions that management believe to be reasonable, but are inherently uncertain. As a result, Ferroglobe’s actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements, which are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company’s control.

Forward-looking financial information and other metrics presented herein represent the Company’s goals and are not intended as guidance or projections for the periods referenced herein or any future periods.

All information in this press release is as of the date of its release. Ferroglobe does not undertake any obligation to update publicly any of the forward-looking statements contained herein to reflect new information, events or circumstances arising after the date of this press release. You should not place undue reliance on any forward-looking statements, which are made only as of the date of this press release.

Non-IFRS Measures

Adjusted EBITDA, adjusted EBITDA margin, adjusted net profit, adjusted profit per share, working capital and net debt, are non-IFRS financial metrics that, we believe, are pertinent measures of Ferroglobe’s success. Ferroglobe has included these financial metrics to provide supplemental measures of its performance. The Company believes these metrics are important because they eliminate items that have less bearing on the Company’s current and future operating performance and highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures.


INVESTOR CONTACT:

Gaurav Mehta
Executive Vice President – Investor Relations 
Email:   
investor.relations@ferroglobe.com

MEDIA CONTACT:

Cristina Feliu Roig

Executive Director – Communications & Public Affairs

Email:   corporate.comms@ferroglobe.com


Ferroglobe PLC and Subsidiaries

Unaudited Condensed Consolidated Income Statement

(in thousands of U.S. dollars, except per share amounts)

Quarter Ended

Quarter Ended

    

Quarter Ended

    

Year Ended

Year Ended

    

June 30, 2021

    

March 31, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Sales

  

$

418,538

  

$

361,390

$

250,004

$

779,928

$

561,226

Cost of sales

  

(267,939)

  

(250,165)

(153,291)

(518,104)

(396,651)

Other operating income

  

37,105

  

1,913

10,160

39,018

17,928

Staff costs

  

(63,197)

  

(95,267)

(48,912)

(158,464)

(104,009)

Other operating expense

  

(93,171)

  

(36,835)

(35,953)

(130,006)

(76,020)

Depreciation and amortization charges, operating allowances and write-downs

  

(23,523)

  

(25,285)

(27,459)

(48,808)

(56,127)

Other (loss) gain

608

66

86

674

(586)

Operating profit (loss)

8,421

(44,183)

(5,365)

(35,762)

(54,239)

Net finance expense

  

(11,178)

  

(15,864)

(16,693)

(27,042)

(33,177)

Financial derivatives gain

3,168

Exchange differences

  

3,237

  

(9,314)

2,634

(6,077)

5,069

Profit (loss) before tax

  

480

  

(69,361)

(19,425)

(68,881)

(79,179)

Income tax benefit

  

250

  

844

5,390

1,094

16,086

Profit (loss) for the period

730

(68,517)

(14,035)

(67,787)

(63,093)

Profit attributable to non-controlling interest

  

1,180

  

1,135

1,928

2,315

3,087

Profit (loss) attributable to the parent

  

$

1,910

  

$

(67,382)

$

(12,107)

$

(65,472)

$

(60,006)

  

  

EBITDA

$

31,944

$

(18,898)

$

22,094

$

13,046

$

1,888

Adjusted EBITDA

$

34,088

$

22,069

$

22,413

$

56,157

$

4,796

Weighted average shares outstanding

Basic

169,298

169,291

169,254

169,295

169,252

Diluted

169,298

169,291

169,254

169,295

169,252

Profit (loss) per ordinary share

Basic

$

0.01

$

(0.40)

$

(0.07)

$

(0.39)

$

(0.35)

Diluted

$

0.01

$

(0.40)

$

(0.07)

$

(0.39)

$

(0.35)


Ferroglobe PLC and Subsidiaries

Unaudited Condensed Consolidated Statement of Financial Position

(in thousands of U.S. dollars)

June 30,

March 31,

December 31

    

2021

    

2021

    

2020

ASSETS

Non-current assets

Goodwill

$

29,702

$

29,702

$

29,702

Other intangible assets

87,556

25,891

20,756

Property, plant and equipment

587,602

593,355

620,034

Other non-current financial assets

5,329

4,984

5,057

Deferred tax assets

62

620

Non-current receivables from related parties

2,377

2,345

2,454

Other non-current assets

13,960

11,765

11,904

Total non-current assets

726,588

668,662

689,907

Current assets

Inventories

239,750

228,145

246,549

Trade and other receivables

283,990

276,633

242,262

Current receivables from related parties

3,105

3,063

3,076

Current income tax assets

8,826

12,277

12,072

Other current financial assets

1,003

1,004

1,008

Other current assets

57,219

45,028

20,714

Current restricted cash and cash equivalents

6,149

6,069

28,843

Cash and cash equivalents

99,940

78,298

102,714

Total current assets

699,982

650,517

657,238

Total assets

$

1,426,570

$

1,319,179

$

1,347,145

EQUITY AND LIABILITIES

Equity

$

299,469

$

298,974

$

365,719

Non-current liabilities

Deferred income

37,570

2,733

620

Provisions

107,501

106,220

108,487

Bank borrowings

4,871

5,042

5,277

Lease liabilities

12,995

11,942

13,994

Debt instruments

386,060

347,310

346,620

Other financial liabilities

37,608

37,530

29,094

Other non-current liabilities

16,955

16,727

16,767

Deferred tax liabilities

23,956

26,834

27,781

Total non-current liabilities

627,516

554,338

548,640

Current liabilities

Provisions

102,269

97,521

55,296

Bank borrowings

85,015

73,965

102,330

Lease liabilities

8,709

7,596

8,542

Debt instruments

10,858

2,656

10,888

Other financial liabilities

23,732

24,983

34,802

Payables to related parties

6,131

5,042

3,196

Trade and other payables

189,449

171,052

149,201

Current income tax liabilities

513

3,947

2,538

Other current liabilities

72,909

79,105

65,993

Total current liabilities

499,585

465,867

432,786

Total equity and liabilities

$

1,426,570

$

1,319,179

$

1,347,145


Ferroglobe PLC and Subsidiaries

Unaudited Condensed Consolidated Statement of Cash Flows

(in thousands of U.S. dollars)

Quarter Ended

    

Quarter Ended

    

Quarter Ended

Year Ended

Year Ended

    

June 30, 2021

March 31, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Cash flows from operating activities:

Profit (loss) for the period

$

730

$

(68,517)

$

(14,035)

$

(67,787)

$

(63,093)

Adjustments to reconcile net (loss) profit
to net cash used by operating activities:

Income tax (benefit) expense

(250)

(844)

(5,390)

(1,094)

(16,086)

Depreciation and amortization charges,
operating allowances and write-downs

23,523

25,285

27,459

48,808

56,127

Net finance expense

11,178

15,864

16,693

27,042

33,177

Financial derivatives loss (gain)

(3,168)

Exchange differences

(3,237)

9,314

(2,634)

6,077

(5,069)

Net loss (gain) due to changes in the value of asset

(243)

(21)

(264)

Gain on disposal of non-current assets

(43)

(43)

Share-based compensation

673

213

704

886

1,426

Other adjustments

(366)

(2)

(85)

(368)

586

Changes in operating assets and liabilities

(Increase) decrease in inventories

(8,770)

11,446

(12,471)

2,676

39,106

(Increase) decrease in trade receivables

(8,625)

(41,692)

45,537

(50,317)

129,369

Increase (decrease) in trade payables

16,184

26,152

(4,875)

42,336

(30,379)

Other

8,214

41,179

(16,286)

49,393

(27,884)

Income taxes paid

(1,178)

(57)

3,522

(1,235)

13,641

Net cash provided (used) by operating activities

37,833

18,277

38,139

56,110

127,753

Cash flows from investing activities:

Interest and finance income received

128

35

85

163

339

Payments due to investments:

-

Acquisition of subsidiary

Other intangible assets

(40,997)

(3,486)

(44,483)

Property, plant and equipment

(3,245)

(5,683)

(5,056)

(8,928)

(9,662)

Other

Disposals:

Disposal of subsidiaries

Other non-current assets

543

543

Other

Net cash (used) provided by investing activities

(43,571)

(9,134)

(4,971)

(52,705)

(9,323)

Cash flows from financing activities:

Dividends paid

Payment for debt issuance costs

(11,093)

(6,598)

(279)

(17,691)

(1,855)

Repayment of hydro leases

Proceeds from debt issuance

40,000

40,000

Increase/(decrease) in bank borrowings:

Borrowings

149,945

127,690

277,635

Payments

(144,983)

(157,464)

(20,680)

(302,447)

(65,560)

Proceeds from stock option exercises

Amounts paid due to leases

(3,157)

(2,856)

(2,418)

(6,013)

(4,879)

Other amounts received/(paid) due to financing activities

3,608

Payments to acquire or redeem own shares

Interest paid

(3,333)

(17,015)

(1,131)

(20,348)

(19,955)

Net cash (used) provided by financing activities

27,379

(56,243)

(24,508)

(28,864)

(88,641)

Total net cash flows for the period

21,641

(47,100)

8,660

(25,459)

29,789

Beginning balance of cash and cash equivalents

84,367

131,557

144,489

131,557

123,175

Exchange differences on cash and
cash equivalents in foreign currencies

81

(90)

93

(9)

278

Ending balance of cash and cash equivalents

$

106,089

$

84,367

$

153,242

$

106,089

$

153,242

Cash from continuing operations

99,940

78,298

124,876

99,940

124,876

Current/Non-current restricted cash and cash equivalents

6,149

6,069

28,366

6,149

28,366

Cash and restricted cash in the statement of financial position

$

106,089

$

84,367

$

153,242

$

106,089

$

153,242


Adjusted EBITDA ($,000):

Quarter Ended

    

Quarter Ended

    

Quarter Ended

Year Ended

Year Ended

    

June 30, 2021

March 31, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Profit (loss) attributable to the parent

$

1,910

$

(67,382)

$

(12,107)

$

(65,472)

$

(60,006)

Profit (loss) attributable to non-controlling interest

(1,180)

(1,135)

(1,928)

(2,315)

(3,087)

Income tax (benefit) expense

(250)

(844)

(5,390)

(1,094)

(16,086)

Net finance expense

11,178

15,864

16,693

27,042

33,177

Financial derivatives loss (gain)

(3,168)

Exchange differences

(3,237)

9,314

(2,634)

6,077

(5,069)

Depreciation and amortization charges, operating allowances and write-downs

23,523

25,285

27,459

48,808

56,127

EBITDA

31,944

(18,898)

22,093

13,046

1,888

Restructuring and termination costs

2,144

40,967

43,111

Energy:  France

(55)

70

Staff Costs:  South Africa

155

Other Idling Costs

375

2,683

Adjusted EBITDA

$

34,088

$

22,069

$

22,413

$

56,157

$

4,796

Adjusted profit attributable to Ferroglobe ($,000):

Quarter Ended

    

Quarter Ended

    

Quarter Ended

Year Ended

Year Ended

    

    

June 30, 2021

March 31, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Profit (loss) attributable to the parent

$

1,910

$

(67,382)

$

(12,107)

$

(65,472)

$

(60,006)

Tax rate adjustment

(404)

21,352

826

20,948

9,250

Impairment

Restructuring and termination costs

1,458

27,858

29,315

Energy:  France

(37)

48

Energy: South Africa

Staff Costs:  South Africa

105

Other Idling Costs

255

1,824

Tolling agreement

Adjusted profit (loss) attributable to the parent

$

2,964

$

(18,172)

$

(11,064)

$

(15,208)

$

(48,777)

Adjusted diluted profit per share:

Quarter Ended

    

Quarter Ended

    

Quarter Ended

Year Ended

Year Ended

    

    

June 30, 2021

March 31, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Diluted profit (loss) per ordinary share

$

0.01

$

(0.40)

$

(0.07)

$

(0.39)

$

(0.35)

Tax rate adjustment

(0.00)

0.12

0.00

0.12

0.05

Restructuring and termination costs

0.01

0.16

0.17

Energy:  France

(0.00)

0.00

Energy: South Africa

Staff Costs:  South Africa

0.00

Other Idling Costs

0.00

0.01

Tolling agreement

Adjusted diluted profit (loss) per ordinary share

$

0.02

$

(0.12)

$

(0.07)

$

(0.10)

$

(0.29)


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Advancing Materials Innovation NASDAQ: GSM Second Quarter 2021 Results August 24th 2021 1 ferroglobe


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Forward-Looking Statements and non-IFRS Financial Metrics 2 This presentation contains forward-looking statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. Forward-looking statements are not historical facts but are based on certain assumptions of management and describe our future plans, strategies and expectations. Forward-looking statements can generally be identified by the use of forward-looking terminology, including, but not limited to, "may," “could,” “seek,” “guidance,” “predict,” “potential,” “likely,” "believe," "will," "expect," "anticipate," "estimate," "plan," "intend," "forecast," “aim,” “target,” or variations of these terms and similar expressions, or the negative of these terms or similar expressions. Forward-looking statements contained in this presentation are based on information presently available to Ferroglobe PLC (“we,” “us,” “Ferroglobe,” the “Company” or the “Parent”) and assumptions that we believe to be reasonable, but are inherently uncertain. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements, which are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control. You are cautioned that all such statements involve risks and uncertainties, including without limitation, risks that Ferroglobe will not successfully integrate the businesses of Globe Specialty Metals, Inc. and Grupo FerroAtlántica SAU, that we will not realize estimated cost savings, value of certain tax assets, synergies and growth, and/or that such benefits may take longer to realize than expected. Important factors that may cause actual results to differ include, but are not limited to: (i) risks relating to unanticipated costs of integration, including operating costs, customer loss and business disruption being greater than expected; (ii) our organizational and governance structure; (iii) the ability to hire and retain key personnel; (iv) regional, national or global political, economic, business, competitive, market and regulatory conditions including, among others, changes in metals prices; (v) increases in the cost of raw materials or energy; (vi) competition in the metals and foundry industries; (vii) environmental and regulatory risks; (viii) ability to identify liabilities associated with acquired properties prior to their acquisition; (ix) ability to manage price and operational risks including industrial accidents and natural disasters; (x) ability to manage foreign operations; (xi) changes in technology; (xii) ability to acquire or renew permits and approvals; (xiii) changes in legislation or governmental regulations affecting Ferroglobe; (xiv) conditions in the credit markets; (xv) risks associated with assumptions made in connection with critical accounting estimates and legal proceedings; (xvi) Ferroglobe's international operations, which are subject to the risks of currency fluctuations and foreign exchange controls; and (xvii) the potential of international unrest, economic downturn or effects of currencies, tax assessments, tax adjustments, anticipated tax rates, raw material costs or availability or other regulatory compliance costs. The foregoing list is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect our business, including those described in the “Risk Factors” section of our Registration Statement on Form F-1, Annual Reports on Form 20-F, Current Reports on Form 6-K and other documents we file from time to time with the United States Securities and Exchange Commission. We do not give any assurance (1) that we will achieve our expectations or (2) concerning any result or the timing thereof, in each case, with respect to any regulatory action, administrative proceedings, government investigations, litigation, warning letters, consent decree, cost reductions, business strategies, earnings or revenue trends or future financial results. Forward- looking financial information and other metrics presented herein represent our key goals and are not intended as guidance or projections for the periods presented herein or any future periods. We do not undertake or assume any obligation to update publicly any of the forward-looking statements in this presentation to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. We caution you not to place undue reliance on any forward-looking statements, which are made only as of the date of this presentation. Adjusted EBITDA, adjusted EBITDA margin, adjusted net profit, adjusted profit per share, working capital and net debt, are non-IFRS financial metrics that, we believe, are pertinent measures of Ferroglobe’s success. The Company has included these financial metrics to provide supplemental measures of its performance. We believe these metrics are important because they eliminate items that have less bearing on the Company’s current and future operating performance and highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. For additional information, including a reconciliation of the differences between such non-IFRS financial measures and the comparable IFRS financial measures, refer to the press release dated August 23, 2021 accompanying this presentation, which is incorporated by reference herein. 2 Ferroglobe


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TABLE OF CONTENTS I. Q2 2021 Business Review II. Q2 2021 Financial Review III. Update on Strategic Plan IV. Appendix — Supplemental Information


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OPENING REMARKS 4 Q2 reflects an acceleration in our overall performance due to robust market conditions and execution of the strategic plan, contributing to a return to positive net profit Quarterly results adversely impacted by several one-off cost items, as well as higher energy costs Successful completion of the financing provides a strong foundation for continued execution of key strategic initiatives going into 2H 4 Ferroglobe


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I. Q2 2021 Business Review


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KEY HIGHLIGHTS 6 Q2-21 results: Sales of $418.5 million, compared to $361.4 million in Q1-21, and $250.0 million in Q2-20 Adjusted EBITDA of $34.1 million compared to $22.1 million in Q1-21, and $22.4 million in Q2-20 Return to positive net profit of $0.7 million, compared to net loss of $(68.5) million in Q1-21, and $(14.0) million in Q2-20 Positive operating cash flow of $37.8 million and return to positive net cash flow of $21.6 million Key drivers impacting quarterly results: Strong pricing across all product categories Pockets of inflationary cost pressures, mainly energy in Europe Working capital $334.3 million at end of Q2-21, an increase of $0.6 million, from the Q1-21 balance of $333.7 million Increased efficiency supporting flat level of working capital despite the ramp-up in activity Net debt increased by $23.7 million with a balance of $358.0 million as of Jun. 30, 2021 from the Mar. 31, 2021 balance of $334.3 million Issued an initial $40 million of an aggregate $60 million of the new super senior secured notes during Q2 Cash balance of $106.1 million in Q2-21, an increase of $22.1 million, from $84 million in the prior quarter 6 Ferroglobe


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PRODUCT CATEGORY SNAPSHOT Silicon Metal 7 Sequential quarters EBITDA evolution ($m) Commentary Volume trends Pricing trends ($/mt) Average realized price up 2.7% during the quarter Volumes increased by 9.9% based in capacity increase Cost increase driven by rising energy price in Spain, ($3.8mm) and higher raw materials (coal, coke and wood) prices in the U.S. ($0.9mm) million – partially offset by improved fixed cost absorption ($0.6 mm) and positive impact from local levy adjustment ($1.6 mm) Robust demand across chemicals and aluminum expected to continue for the remainder of 2021 54,084 60,225 63,113 53,321 47,884 51,215 54,912 61,275 67,322 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 1,500 1,700 1,900 2,100 2,300 2,500 2,700 2,900 3,100 3,300 3,500 US Index ($) EU Index ($) Ferroglobe Avg Price ($) 7 Ferroglobe 14.8 1.4 4.2 (2.5) 17.8 Q1-21 Volume Price Cost Q2-21 Sequential quarters EBITDA evolution ($m) Pricing trends ($/mt) Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 7 Ferroglobe


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PRODUCT CATEGORY SNAPSHOT Silicon-Based Alloys 8 Volume trends Pricing trends ($/mt) Sequential quarters EBITDA evolution ($m) Commentary Average realized selling price up 9.9% Volume increased by 5.9%, driven primarily by ferrosilicon (steel) followed by foundry (auto) Cost increase predominantly resulting from higher energy and raw material prices: Spanish facilities ($4.0mm), South African facility ($2.5mm), and Argentinian facility ($0.6mm) Lower fixed cost absorption due to an idled plant in France ($1.6mm) Solid steel demand fundamentals – infrastructure projects, automotive sector, industrial machinery etc. 79,264 69,879 64,485 60,932 39,479 42,449 57,351 61,604 65,222 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 900 1,400 1,900 2,400 2,900 FeSi US Index ($) Si Alloys FG Avg. Selling Price ($) FeSi EU Index ($) 10.1 0.8 11.3 (9.4) 12.8 Q1-21 Volume Price Cost Q2-21 Sequential quarters EBITDA evolution ($m) Pricing trends ($/mt) Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 8 Ferroglobe


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PRODUCT CATEGORY SNAPSHOT Manganese-Based Alloys 9 Volume trends Pricing trends ($/mt) Sequential quarters EBITDA evolution ($m) Commentary Average realized selling price up 20.5% Volume decline of 5.9% driven by delays in shipping out finished goods Improved fixed cost absorption were offset by increasing costs, primarily energy in Spain ($5.8mm) and manganese ore and coal ($7.1mm) Overall spread levels remain above historical highs Positive near-term fundamentals supported by low inventory levels and high steel demand 99,555 93,996 95,235 73,724 55,290 53,980 78,611 72,609 68,323 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 900 1,100 1,300 1,500 1,700 1,900 FeMn EU HC 76% Mn EXW ($) SiMn EU 65% Mn DDP ($) Mn Alloys FG Avg. Selling Price ($) 10.0 (0.3) 16.5 (10.4) 15.7 Q1-21 Volume Price Cost Q2-21 Sequential quarters EBITDA evolution ($m) Pricing trends ($/mt) Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 9 Ferroglobe


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II. Q2 2021 Financial Review


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INCOME STATEMENT SUMMARY Q2-21 vs. Q1-21 11 Sales increase driven by higher average prices (10%) and increase in volumes (6%) Cost of sales as a % of sales was lower than previous quarter as a result of the improvement in sale prices and a reclassification from this account to Other operating expense Other operating income and Other operating expense includes the impact of the European free CO2 rights for 2021 Staff cost in Q1 included the restructuring cost for the Footprint Optimization initiative Net finance in Q1 included the finance expense related to the cancellation of the ABL FX gains of $3.2m in Q2-21 mainly driven by the strengthen of the EUR against the USD ($'000) Q2-21 Q1-21 vs Q Sales 418,538 361,390 16% Cost of sales (267,939) (250,165) (7)% Cost of sales % 64% 69% (8)% Other operating income 37,105 1,913 1840% Staff costs (63,197) (95,267) 34% Other operating expense (93,171) (36,835) (153)% Depreciation and amortization (23,523) (25,285) 7% Operating profit/(loss) before adjustments 7,813 (44,249) 118% Others 608 66 821% Operating profit/(loss) 8,421 (44,183) 119% Net finance expense (11,178) (15,864) 30% FX differences & other gains/losses 3,237 (9,314) 135% Profit/(loss) before tax 480 (69,361) 101% Income tax 250 844 (70)% Profit/(loss) 730 (68,517) 101% Profit/(loss) attributable to non-controlling interest 1,180 1,135 4% Profit/(loss) attributable to the parent 1,910 (67,382) 103% EBITDA 31,944 (18,898) 269% Adjusted EBITDA 34,087 22,069 54% Adjusted EBITDA % 8% 6% 33% 11 Ferroglobe


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ADJUSTED EBITDA BRIDGE Q1-21 to Q2-21 ($m) 12 Volume: 6% increase vs prior quarter, attributable to stronger silicon metal and silicon-based alloys demand, partially offset by manganese based alloys Price: Average realized selling price for the main products increased 11% vs prior quarter on the back of strong fundamentals across all key end markets Cost increased mainly driven by Spanish energy cost by $14m followed by raw material inflation and plant idling cost in France 22.1 2.7 36.4 (27.4) (0.4) 0.6 (0.1) 34.1 Q1-21 Volume Price Cost Head Offivers Non-case business Non recurrent Items Q2-21 12 Ferroglobe


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BALANCE SHEET SUMMARY 13 Unaudited Financial Statements Gross debt excludes bank borrowings on factoring program at Jun. 30 2021 and Dec. 31, 2020 , and on the A/R securitization at Jun. 30, 2020 Cash and restricted cash includes the following as at the respective period ends: Jun. 30, 2020 – Unrestricted cash of $86 million, and non-current restricted cash and cash equivalents of $28.3 million Mar. 31, 2021 – Unrestricted cash of $78.3 million, and current, non-current restricted cash and cash equivalents of $6.0 million Jun. 30, 2021 – Unrestricted cash of $99.9 million, and current, non-current restricted cash and cash equivalents of $6.0 million ($’000) Q2-211 Q1-211 Q2-201 Cash and Restricted Cash3 106,089 84,367 153,276 Total Assets 1,426,570 1,319,158 1,481,602 Gross Debt2 464,078 418,647 451,354 Net Debt 358,138 334,279 298,078 Book Equity 299,469 298,974 519,974 Total Working Capital 334,292 333,772 321,421 Net Debt / Adjusted EBITDA 2.6x 3.8x n.m Net Debt / Total Assets 25.1% 25.3% 20.1% Net Debt / Capital 54.5% 52.8% 36.4% 1. 2. 3. Ferroglobe


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CASH FLOW SUMMARY 14 Free cash flow is defined as