Ferroglobe Plc · NASDAQ:GSM
Ferroglobe — Debt Investor Presentation (February 2021)
29 slides from Ferroglobe's debt investor presentation, Feb 1, 2021
Slide 1: Investor Update
Investor Update February 1, 2021
Slide 2: Ferroglobe continues to drive operational improvement against a challenging backdrop
Ferroglobe continues to drive operational improvement against a challenging backdrop • For most of 2020, Ferroglobe PLC (“Ferroglobe” or the ”Company”) experienced a challenging operating backdrop; performance has been Cost cutting partially offset by the ongoing cost saving initiatives as well as o
Slide 3: A highly supportive transaction under discussion providing time and capital for the strategic plan
A highly supportive transaction under discussion that provides the necessary ingredients of both time and capital to pursue Ferroglobe’s strategic plan • Management has also been very focused on reviewing the current business profile in the context of the evolving competitive landscape to determine
Slide 4: Amended Notes: The stage is set for Ferroglobe's recovery
The stage is set for Ferroglobe’s recovery The transaction being discussed would consist of a maturity extension of the SUNs until December 2025 and $100m new money to support the implementation of the strategic plan Summary of key proposed terms Stakeholder “Wins” Item Agreed Terms Description Gi
Slide 5: Transaction provides time and capital to pursue the strategic plan
The transaction being discussed would provide Ferroglobe with the necessary ingredients of both time and capital to pursue the strategic plan Sources and uses of funds ($m) Sources Uses New Equity $40m Strategic plan and general corporate purposes $74m New Debt $60m Transaction-related costs $26m To
Slide 6: For further information please contact any of the advisors below
For further information please contact any of the advisors below Manuel Martinez-Fidalgo Rohan Choudhary Managing Director Managing Director Telephone: +44 20 7747 2763 Telephone: +44 20 7634 3660 MMartinez-Fidalgo@HL.com Rohan.Choudhary@moelis.com Arjun Malhotra Ted Afxentiou Vice President Vice Pr
Slide 7: I Current Environment
I CURRENT ENVIRONMENT
Slide 8: Impact of COVID-19 on 2020 performance
Impact of COVID-19 on 2020 performance Impact of COVID-19 COVID-19 mitigating actions 1 • Stage was set for a gradual recovery in 2020; COVID-19 has created a delay in this recovery • The Company assembled a crisis management team • Gradual decline in index prices throughout 2020 as the slowdown in
Slide 9: EBITDA bridge from 2019 to 2020
EBITDA bridge from 2019 to 2020 – Ferroglobe has managed to successfully navigate through 2020 and the COVID-19 crisis Adj. EBITDA bridge from FY19 to FY20 ($m) 2 3 1 1 Commentary • Reduction in shipment volumes from 926,077 metric tons in 2019 to ~657,760 metric tons in 2020 across silicon metal, s
Slide 10: EBITDA bridge from Q3 2020 to Q4 2020
EBITDA bridge from Q3 2020 to Q4 2020 – despite a challenging Q4, the Company remained EBITDA positive for the full year 2020 Adj. EBITDA bridge from Q3 to Q4 FY20 ($m) 3 2 Commentary • Increase in shipment volumes from c.147,644 metric tons in Q3 FY20A to c.179,486 across main products1 primarily d
Slide 11: Liquidity remained robust as a result of Management's actions
Liquidity remained robust as a result of Management’s actions Cash Balance Evolution ($m) Minimum Cash Covid-19 Headroom Total Cash Balance Restricted Cash Reduction mainly driven by the refinancing of the securitization program resulting in pro-forma net 153,22 debt of c.$391m as at Q4 2020 144,5 1
Slide 12: II Key Drivers for Value Recovery
II KEY DRIVERS FOR VALUE RECOVERY
Slide 13: Current market themes that underpin the anticipated recovery
Current market themes that underpin the anticipated recovery 1 • Inventory levels throughout the value chain appeared light prior to COVID‐19 − Recovery of EU and US auto manufacturing towards pre-COVID levels will help drive demand in the aluminum segment − The chemicals sector slowdown seen in 202
Slide 14: Business Plan Assumptions and Preparation
Business Plan Assumptions and Preparation • All financial information is presented in US Dollars ($) with a financial year end at 31 December • Projected financial information is based on the 5 year Business Plan (2020E – 2024E) • The 5 year Business Plan has been prepared with Management’s view on
Slide 15: Recovery in two phases: core volumes, then price recovery
The next stage in Ferroglobe’s recovery is in two phases: the return of core volumes (expected 2021), and ultimately price recovery (2022 onwards) 2021 business recovery initially relies on the return of core volumes which continue to be under pressure in the current macro environment. Price improve
Slide 16: Profitability expected to benefit from increasing revenue and improving cost structure
Profitability expected to benefit from increasing revenue due to gradual pricing and volume recovery and improving cost structure Total Revenue ($m) Commentary In Q1’18 Ferroglobe completed the acquisition of CAGR Revenues Gencore’s manganese alloys plants in Moi I Rana 2.242 ’19-’24 • Gradual recov
Slide 17: Capex expected to recover to sustainable levels
Capex is expected to recover to sustainable levels, and working capital should remain in line with prior years Capex spending the past few years has been focused on critical maintenance, and safety and environmental requirements without any deterioration to asset level performance. The Company plan
Slide 18: Strategic plan to be implemented with the consultants' support
Strategic plan to be implemented with the consultants’ support The global reference point in silicon metal and ferroalloys production, with world-class operational Corporate capabilities and customer relationships driving resiliency, competitiveness through the cycle Vision Accelerate the return
Slide 19: Identified initiatives to deliver up to c.$180m incremental EBITDA
Identified initiatives to deliver up to c.$180m incremental EBITDA New management has worked closely with the third-party consultant and identified a number of operational enhancement opportunities that could release significant value over the Business Plan horizon. The bulk of the investment relate
Slide 20: Market recovery and strategic plan enable solid operating cash generation
The combination of market recovery and strategic plan implementation will enable solid operating cash generation as the business grows 2020-2024 Cash Flow Forecast ($m) Commentary 2020 2021 2022 2023 2024 2020 • EBITDA recovery is supported by reduced corporate overhead costs, which continue to decr
Slide 21: Recovery expected for 2021 despite operational headwinds
Recovery expected for 2021 despite projected operational headwinds Adj. EBITDA bridge from FY20E to FY21E ($m) Initial business recovery driven by core volume improvement Strategic plan foresees $101m of implementation costs to be incurred in 2021 and $55m EBITDA benefit expected to be achieved in t
Slide 22: Liquidity profile through 2021
Liquidity profile through 2021 – Company expects to maintain a stable liquidity position through FY 2021 Cash Balance Evolution ($m) Minimum Cash Covid-19 Headroom Total Cash Balance Restricted Cash Assumes $60m net proceeds less transaction costs Assumes $40m new 199,8 money contribution 184,5 2 17
Slide 23: Liquidity profile through 2021 – quarterly cash flow forecast
Liquidity profile through 2021 – gradual recovery in operating cashflows expected on the back of market improvement and launch of strategic plan 2021 Quarterly Cash Flow Forecast ($m) Commentary Q1 2021 Q2 2021 Q3 2021 Q4 2021 • Increased demand in the silicon metal end markets, mainly chemicals and
Slide 24: Ferroglobe targets c.60% net cash flow conversion once fully ramped up
Ferroglobe targets c.60% net cash flow conversion once fully ramped up Adjusted EBITDA ($m) Adj. EBITDA 2.8% 8.6% 20.4% 25.4% 25.2% Margin Base Case EBITDA (non-Adjusted) Net Impact of Strategic Plan Transaction Costs Non-Recurring Items Related to Strategic Plan Adjusted EBITDA equal to: $127m non-
Slide 25: Appendix
APPENDIX
Slide 26: Proposed terms of Amended Notes
Proposed terms of Amended Notes The table below exhibits the proposed terms of the Amended Notes that are still subject to final negotiations Terms Description New Equity Quantum • $40m Reinstated Quantum • $350m (0% haircut) Maturity • 31-Dec-2025 Interest • 9.375% cash Fees • 1.00% consent fee Equ
Slide 27: Proposed terms of New Debt
Proposed terms of New Debt The table below exhibits the proposed terms of the New Debt that are still subject to final negotiations Terms Description Quantum • $60m bonds Maturity • 30-Jun-2025 Interest • 9.0% cash Backstop Fee • 4.00% cash Call Schedule • 15 months at par / 9 months NC / 104.5 / 10
Slide 28: Disclaimers
Disclaimers This presentation is not an offer to sell or a solicitation of an offer to buy or exchange or acquire securities in the United States or in any other jurisdiction. The securities referenced in this presentation may not be offered, sold, exchanged or delivered in the United States absent
Slide 29: Ferroglobe
Ferroglobe icing Materials Innovatio!
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