Ferroglobe Plc · NASDAQ:GSM
Ferroglobe — Investor Day (July 2022)
112 slides from Ferroglobe's investor day presentation, Jul 12, 2022
Slide 1: Investor Day July 12th, 2022
Investor Day July 12th, 2022
Slide 2: Disclaimer
DISCLAIMER Forward Looking Statements This presentation contains forward looking statements These forward looking statements include, but are not limited to, all statements other than statements of historical facts contained in this presentation, including, without limitation, those regarding our fu
Slide 3: Today's Presenters
TODAY’S PRESENTERS Javier Lopez Madrid Executive Chairman Marco Levi Chief Executive Officer Beatriz Garcia-Cos Chief Financial Officer Benjamin Crespy Chief Operating Officer Craig Arnold Chief Commercial Officer Gaurav Mehta President, North America EVP – Investor Relations and Benoist Ollivier Ch
Slide 4: Today's Agenda
TODAY’S AGENDA Opening Remarks Javier Lopez Madrid Introduction to Ferroglobe Marco Levi Driving Change Marco Levi Dynamic Operating Model Benjamin Crespy Bolstering Competitiveness * Benoist Ollivier Customer Value Proposition Craig Arnold Financial Performance Beatriz Garcia-Cos Closing * Marco Le
Slide 5: Opening Remarks
OPENING REMARKS
Slide 6: Preview of Key Messages
PREVIEW OF KEY MESSAGES Sound business with a clear need for change in how we integrate and operate Current management writing a new and exciting story for the Company Structural change within the company and within the industry Emergence of a stronger and safer Ferroglobe which continues it
Slide 7: Introduction to Ferroglobe
INTRODUCTION TO FERROGLOBE
Slide 8: Ferroglobe Is a Leading Global Player for Advanced Materials
FERROGLOBE IS A LEADING GLOBAL PLAYER FOR ADVANCED MATERIALS Market leadership in an attractive industry 100+ year history with generations of technical know-how Servicing customers with our unique operational footprint 25 operating facilities across 5 continents Attractive and unique product
Slide 9: Unique Combination of Value-Added Metals and Ferroalloys
WE PRODUCE A UNIQUE COMBINATION OF VALUE-ADDED METALS AND FERROALLOYS Critical input for hundreds of industrial and consumer products Silicon metal on the critical materials list in the E.U. Silicon Metal No substitute for our products Mandatory to achieve certain properties Silicon Based Alloys
Slide 10: Front End of an Attractive Value Chain
WE ARE AT THE FRONT END OF AN ATTRACTIVE VALUE CHAIN ACROSS DIVERSIFIED END MARKETS Metals/Alloys/ By-Product End Products for Core Products 1 Raw Materials 2 Smelting 3 4 Market Segment 5 Extraction of raw materials through mining facilities across the world Owns and operates efficient furnaces eng
Slide 11: Exposure to Diverse End Markets and Applications
WE OFFER EXPOSURE TO AN ATTRACTIVE AND DIVERSE SET OF END MARKETS AND APPLICATIONS Energy Transition Computing Healthcare Personal Care Green Mobility s 11 Electronics/ TransportationCommunicationAgric Construction/ ultureHomebuildingMachineryOil and Ga
Slide 12: Silicon Metal Goes Into Hundreds of Essential Products
OUR SILICON METAL GOES INTO HUNDREDS OF ESSENTIAL CONSUMER AND INDUSTRIAL PRODUCTS Market Segment End-markets Aluminium (primary/ secondary producers) Transportation Consumer products Engine radiators Suspension parts Plane wings Engine cylinder blocks Automotive Plane seats Chemical (various e.g. r
Slide 13: Silicon-Based Alloys Irreplaceable in Steel and Foundry
SILICON-BASED ALLOYS ARE IRREPLACEABLE IN A NUMBER OF STEEL AND FOUNDRY END MARKETS Market Segment End-markets Ferrosilicon Steel (stainless, carbon, alloy, green steel) Transport Machinery Others Handrails Grills (stainless) Exhaust pipes (stainless) Medical equipment (e.g. dental, kidney dishes) A
Slide 14: Manganese-Based Alloys Vital Input for Steel
OUR MANGANESE-BASED ALLOYS ARE ALSO VITAL INPUT FOR VARIOUS STEEL APPLICATIONS Market Segment End-markets Domestic appliances Ferro-manganese Steel (Flat rolled) Construction Automotive Roofing & sheds Precision welded pipes Suspension systems Staircases Vehicle exterior sheets Silico-manganese Mach
Slide 15: Global Trends Support Robust Demand
GLOBAL TRENDS SUPPORT ROBUST DEMAND; WE ARE WELL POSITIONED TO CAPITALIZE Global trends boosting need for new advanced materials Ferroglobe’s key products benefiting from increased demand IMPLICATIONS FERROGLOBE END CUSTOMER PRODUCTS ONGOING TRENDS NEW TRENDS Silicones: healthcare, cosmetics, packag
Slide 16: Unique Operational Footprint
UNIQUE OPERATIONAL FOOTPRINT PERFECTLY SUITED FOR CURRENT TRENDS Operating /temporarily idled plant Long term Idled plant Coal Quartz Electrode Paste Electricity Carbon electrodes Charcoal 16 F/X Hedge Favorable logistics Proximity to captive supply Proximity to Customers Modularity Agility Optional
Slide 17: History and Track Record of Strategic Growth
SHORT HISTORY AS FERROGLOBE, BUT LONG HISTORY AND TRACK RECORD OF STRATEGIC GROWTH 1992 1996 1998 2000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2014 2015 2018 2019 2021 2022 ger between FerroAtlántica Alloys Silicon Metal Quartz Coal Electrodes FeSi Silica Fume Power Other 17 Hydropower assets s
Slide 18: Strategic Rationale for Creating Ferroglobe Still Holds
STRATEGIC RATIONALE FOR CREATING FERROGLOBE STILL HOLDS TODAY AND WILL PROVE TO BE VALUABLE… capacity (restarts with minimal investment and time relative to brownfields / 18 Operating footprint optionality and flexibility Uniquely positioned to take advantage of current market conditions with idle
Slide 19: Clear Need for Change Evidenced by Historical Performance
…HOWEVER, THERE WAS A CLEAR NEED FOR CHANGE EVIDENCED BY THE HISTORICAL PERFORMANCE Sales ($mm) & Year/Year Growth (%) Value leakage due to gaps in process and capabilities -23% 11% 29% -28% $2,242 Creating a unified culture Rightsizing the asset footprint $2,037 $1,732 $1,561 Rethinking commercial
Slide 20: Initial Focus Areas for Transforming Our Company
INITIAL FOCUS AREAS AIMED AT TRANSFORMING OUR COMPANY Leadership changes Critical hires to bolster capabilities; consolidation of roles P Identifying/executing value creation areas Developing a clear turnaround plan P Increased transparency and communication Educating workforce in the need for chang
Slide 21: Driving Change
DRIVING CHANGE
Slide 22: New Management Team Leading the Turnaround
A NEW MANAGEMENT TEAM THAT HAS BEEN THE LEADING FORCE BEHIND FERROGLOBE’S TURNAROUND AND OTHER EVOLVING PRIORITIES Marco Levi Chief Executive Officer Cristina Feliu Roig Global Head of Communications, Benoist Ollivier Benjamin Crespy Beatriz García-Cos Craig Arnold Thomas Wiesner Gaurav Mehta David
Slide 23: Creating One Ferroglobe Culture
CREATING “ONE OUR PEOPLE FERROGLOBE” CULTURE BY FOCUSING ON Increased transparency throughout organization Creating a new culture — “One Ferroglobe” mindset People & Culture Communication & Branding Proving platform for two-way communication Establishing new corporate values Alignment on goals and t
Slide 24: Near-Term Strategy Stabilizing and Strengthening the Core
THE NEAR-TERM STRATEGY HAS CENTERED ON STABLIZING THE BUSINESS AND STRENGTHENING THE CORE • From 2021-2024: Initial Targets – – Increase baseline Adj. EBITDA by $180M Improve cash position through working capital improvement by $70M Markets Leverage strong market penetration in Europe and North Amer
Slide 25: Key Value Creation Areas
A COMPREHENSIVE ASSESSMENT IN 2020 LED US TO IDENTIFY KEY VALUE CREATION AREAS 25 Maximizing top line aCommercial Excellence Optimizing cost and capital management aFootprint and Product Optimization bContinuous Operational Improvement cCentralized Procurement dWorking Capital Organization to drive
Slide 26: Key Value Creation Area: Commercial Excellence
KEY VALUE CREATION AREA COMMERCIAL EXCELLENCE Value creation drivers and goals 26 Note: 1 Run-rate impact on Adjusted EBITDA Initial TargetRevised Target (2023): (2023) $40mm1 $50mm1 Redefining market strategy – focusing on margins over prices Deepening customer relationships and areas of collaborat
Slide 27: Redesigning the Approach to Optimize Each Opportunity
REDESIGNING THE APPROACH TO OPTIMIZE EACH OPPORTUITY 1 2 3 Redesigning the organization Account management transformation New robust pricing operating model Reallocation of sales reps • Allocate accounts by level of priority and value at risk • Ensure sufficient geographic coverage Reconstruction of
Slide 28: Key Value Creation Area: Footprint Optimization
KEY VALUE CREATION AREA FOOTPRINT OPTIMIZATION Value creation drivers and goals 28 Note: 1 Run-rate impact on Adjusted EBITDA Initial Target:Revised Target: (2023)(2023) $40mm1 $45mm1 Right-sized the global asset footprint to reduce overcapacities and shutter higher cost production Create “through t
Slide 29: Footprint Optimization Actions
KEY VALUE CREATION AREA FOOTPRINT OPTIMIZATION Action Geography Plant contemplated Labor reduction Opex reduction Final outcome / rationale Niagara Sale of facility Final outcome: Completed sale Monzón Furnace closure Final outcome: Closed 2 furnaces Final outcome: Plant operating Rationale: Change
Slide 30: Key Value Creation Area: Continuous Operational Improvement
KEY VALUE CREATION AREA CONTINUOUS OPERATIONAL IMPROVEMENT Value creation drivers and goals 30 Note: 1 Run-rate impact on Adjusted EBITDA Initial Target:Revised Target: (2024)(2024) $55mm1 $70mm1 Leverage our technical knowledge to improve manufacturing KPIs Develop a culture of continuous improveme
Slide 31: Sharing Best Practices Across Asset Footprint
BROAD ASSET FOOTPRINT PROVIDES A SIZEABLE OPPORTUNITY FOR EXTRACTING VALUE THROUGH THE SHARING OF BEST PRACTICES 25 Smelting & Mining Sites Efficiency (i.e., kWh/ton) Cost reduction Efficiency improvement 52 Operating Furnaces Productivity (i.e., stoppage rates) Carbon reduction 9 Countries Optimiza
Slide 32: Key Value Creation Area: Centralized Procurement
KEY VALUE CREATION AREA CENTRALIZED PROCUREMENT Value creation drivers and goals (2023): (2024): 32 Note: 1 Run-rate impact on Adjusted EBITDA Initial TargetRevised Target $15mm1 $30mm1 New operating model - centralized Developed strategic planning and key category management (e.g. mn ore, coal, ene
Slide 33: Spending Better and Buying Better
FOCUS ON “SPENDING BETTER” AND “BUYING BETTER” SUPPORTED BY NEW PROCESSES AND DISCIPLINES Centralization is playing a key role in the transformation Addressable spend: ~$250M ~$275M ~$450M Category Before After What has changed Raw materials Categories mgmt. centralized in Procurement Logistics Road
Slide 34: Key Value Creation Area: Working Capital
KEY VALUE CREATION AREA WORKING CAPITAL Value creation drivers and goals 34 Note: 1 Run-rate cash impact Initial Target:Revised Target: (2023)(2023) $70mm1 $90mm1 Identifying key metrics and setting targets for inventories, A/R and A/P Data driven decision making Collaboration with commercial and pr
Slide 35: Optimizing Working Capital Through the Cycle
IMPLEMENTING A FOUNDATION CAPITAL THORUGH THE CYCLE TO OPTIMIZE WORKING Working Capital Improvements Key Actions • Identified key metrics for raw material and finished goods inventory across the platform (2021) 30% 30% • Detailed account review in combination with commercial excellence workstream (2
Slide 36: Delivering Ahead of Plan
DELIVERING AHEAD OF PLAN WITH NEW POCKETS OF ENHANCEMENTS BEING DISCOVERED Value creation area Initial estimate: Adj. EBITDA Revised estimate: Adj. EBITDA 01 02 03 04 $40 million $50 million $70 million $75 million $55 million $70 million $15 million $30 million One-off liquidity event 05 36 Working
Slide 37: Resilient Business Model Enables Quick Execution
RESILIENT BUSINESS MODEL AND FLEXIBILITY ENABLE QUICK DECISION MAKING AND EXECUTION DURING UNCERTAIN TIMES 2019 during an already fragile time turnaround plan 37 Business Response Business Impact Covid (2020+) ~30 drop in demand Price drop across all products Lack of visibility into 2021 Str
Slide 38: Steady Improvement in Financial Performance
STRUCTURAL CHANGE WITHIN THE COMPANY, AND THE MARKET MORE BROADLY, RESULTING FINANCIAL PERFORMANCE IN STEADY IMPROVEMENT IN OUR Sales ($mm) $2,037 $1,561 2015 2016 2017 2018 2019 2020 2021 Q1-'22 Adjusted EBITDA ($mm) & EBITDA Margin (%) 14% $295 5% 11% 10% -2% 3% 10% 34% ($37) 2019 2015 2016 2017 2
Slide 39: Reshaping Ferroglobe With a Strong Foundation
RESHAPING FERROGLOBE BY ENSURING A STRONG FOUNDATION People & Culture Disciplines & Processes Capabilities & Tools 39
Slide 40: Dynamic Operating Model
DYNAMIC OPERATING MODEL
Slide 41: Commitment to Health & Safety
WE HAVE A FIRM COMMITMENT TO HEALTH & SAFETY PIECES IN PLACE TO IMPROVE OUR PERFORMANCE AND THE We will reinforce our H&S along three main pillars over the next 3 years: 100 90 80 70 60 50 40 30 20 16 14 01 02 03 Homogenize EH&S management system (ISO 45001 certification) 12 10 Reinforce and homogen
Slide 42: Unique Operational Footprint
UNIQUE OPERATIONAL FOOTPRINT PERFECTLY SUITED FOR CURRENT TRENDS Operating /temporarily idled plant Long term Idled plant Coal Quartz Electrode Paste Electricity Carbon electrodes Charcoal 42 F/X Hedge Favorable logistics Proximity to captive supply Proximity to Customers Modularity Agility Optional
Slide 43: Market Leadership and Geographic Diversification
MARKET LEADERSHIP AND GEOGRAPHIC DIVERSIFICATION POSITION THE COMPANY FAVORABLY FOR THE FUTURE #2 in Europe Market position #1 merchant producer in the world (excluding China) #1 or #2 in North America and Europe Capacity by Geography1, 2, 3 As of June 30, 2022 Notes: (1) Includes currently operatin
Slide 44: Rightsizing Footprint and Creating Operational Flexibility
RIGHTSIZING THE FOOTPRINT AND CREATING OPERATIONAL FLEXILITY ARE CRITICAL FOR LONG TERM SUCCESS I M P R O V EC O S T C O M P E T I T I V E N E S S 1 + I N C R E A S E A D J U S TO P E R A T I N G C A P A C I T YT O M A R K E T D E M A N D M O D U L A R I T Y& F L E X I B I L I T Y T H R O U G HT H E
Slide 45: Footprint Optimization Results
RECENT FOOTPRINT OPTIMIZATION EFFORT RESULTED IN SIGNIFICANT IMPROVEMENTS ALONG KEY DIMENSIONS Right-sizing global utilization Resulting in significantly improved cost Plant Action performed Niagara Divested/scraped Like-for-like reduction in Silicon production cost (4% for Manganese Alloys) Increas
Slide 46: Low-Cost Vertically Integrated Value Chain
WE BENEFIT FROM A LOW-COST STRUCTURE VERTICALLY INTEGRATED VALUE CHAIN BUILT UPON A Example: Overview of Silicon Production Process 35% Power 6+ tons of Raw Materials 1 ton of Silicon Metal 0.4 ton of Silica Fume Percentage self-supplied xx% Percentage self-supplied Composite/Carbon electrodes 46 Co
Slide 47: Competitive Advantage in Energy
OUR COMPETITIVE ADVANTAGE IN ENERGY Plants located in competitive locations (cost and reliability) Benefiting from technical capabilities Favorable interruptibility tariff lowering global energy cost 100% ownership in hydro assets (France), minority ownership (Argentina) Technical performa
Slide 48: Managing Asset Footprint in the Energy Crisis
WE ARE ACTIVELY MANAGING OUR ASSET FOOTPRINT IN LIGHT OF THE ENERGY CRISIS 180 160 140 120 100 80 60 40 20 - FY16 FY17 FY18 FY19 FY20 FY21 Q122 Ferroglobe Weighted Avg (excl. Spain 2021-2022) Ferroglobe Weighted Avg. We are present in countries that have competitive energy sources with reliable infr
Slide 49: Competitive Advantage in Quartz and Ore
WE HAVE A COMPETITIVE ADVANTAGE IN QUARTZ AND ORE High purity Quartz (15 years of proven reserves; additional resources) Own quarries in Canada, U.S.A., Spain, and South Africa Integrated operations are located close to the plants and ports Cost advantage of 35-50% versus 3rd party purchas
Slide 50: Competitive Advantage in Carbon Sources
OUR COMPETITIVE ADVANTAGE IN CARBON SOURCES Coal Primarily two coal types in Western world used for silicon/ferrosilicon metal production We have captive source of one these types (Blue Gem) in the United States Historically supplied all facilities in the U.S. and Canada. Currently evaluatin
Slide 51: Competitive Advantage in Electrodes
OUR COMPETITIVE ADVANTAGE IN ELECTRODES Own technology on Composite electrodes 70% of pre-baked costs key component for larger furnace design, which drives productivity high thermal stress tolerance; enables interruptibility (income) Integrated in Prebaked electrodes Yonvey plant in Ni
Slide 52: Levers to Improve Efficiency and Reduce Costs
WE HAVE SEVERAL LEVERS TO IMPROVE EFFICIENCY, INCREASE PRODUCTIVITY AND REDUCE COSTS 52 Planning / Pilot Stage Automation/ Robotics Artificial Intelligence Data Analytics Industrial 4.0 Executing Now Off-grade reduction Debottlenecking of Furnaces Stoppage Rate Reduction Energy Optimization New Raw
Slide 53: Bolstering Competitiveness
BOLSTERING COMPETITIVENESS
Slide 54: Bolstering Competitiveness Through Various Means
WE ARE BOLSTERING OUR COMPETITIVENESS THROUGH VARIOUS MEANS 54 Developing and executing an ESG roadmap 3 Continuous focus on research and development/new product innovation 2 Key Technical Metrics Program (KTM) 1
Slide 55: Key Pillars of Key Technical Metrics Program
1 KEY PILLARS OF OUR KEY TECHNICAL METRICS PROGRAM Knowledge sharing Higher efficiencies Raw material testing Increased competitiveness driven by Key Technical Metrics Program Increased Production Aligning on technical KPIs Improved environmental impact Plant level modifications Supported by technol
Slide 56: Leveraging Data Across the Platform
1 LEVERAGING DATA ACROSS THE PLATFORM TO CREATE VALUE Example: Energy Consumption (kWh/ton) Key Performance Indicators Broad asset footprint XX Strongest performance ~4% improvement in energy consumption for 4th quartile = $14mm 56 YY Weakest performance (Best in class) kWh/ton Stoppage rates Power
Slide 57: KTM Program Case Study: North American Operations
1 KTM PROGRAM POSITIVELY IMPACTS THE BOTTOM LINE: CASE STUDY RELATING TO NORTH AMERICAN OPERATIONS Success Factors E n e r g y e f f i c i e n c y i m p r o v e m e n t s One motivated team w/ aligned objectives and targets Continuous KTM trainings for capability uplift V a r i a b l e c o s t s i l
Slide 58: Holistic Cost and Volume Performance Management
1 HOLISTIC COST AND VOLUME PERFORMANCE MANAGEMENT AIMED AT DRIVING DOWN COSTS AND LIBERATING A “HIDDEN ASSET” KTM plant performance management K T M W a v e I I K T M W a v e I + ace analytics tool mi 58 Advanced furn Asset opti zation plan Optimization of volume output Off-grade reduction De-bottle
Slide 59: Long History of Innovative Technological Solutions
2 WE HAVE A LONG HISTORY OF LEADING THE INDUSTRY IN INNOVATIVE TECHNOLOGICAL SOLUTIONS finer particle size 59 Product improvement Process innovation Production process End-product development Raw Materials Silicon for silicones High performance foundry products High quality and bespoke products High
Slide 60: Innovation Contributing to Margin Expansion
2 INNOVATION WILL CONTRIBUTE TO THE EXPANSION MARGINS THROUGH THE CYCLE OF OUR Evolving product specifications to meet customer needs Sizing, consistency, purity requirements Innovation enabling emerging trends Energy transition, EV mobility, decarbonization, IoT Core R&D placed globally 100+
Slide 61: Innovation Supports Energy Transition
2 OUR INNOVATION SUPPORTS ENERGY TRANSITION CORE LEARNINGS (SIZING & PURITY) Optimized an industry-ready energy efficient purification processes Intimate knowledge of silicon; intimate purification chemistry Intellectual property protected technologies Proprietary technology to produce 6N purity sol
Slide 62: Silicon Metal Offers Solution to Lithium-Ion Batteries
2 SILICON METAL OFFERS A BREAK THROUGH SOLUTION TO LITHIUM ION BATTERIES + $/kWh Lower Anode Cost Increase Shorten Charging Times Anode Capacity 62 SILICON METAL HAS THE SOLUTION PROBLEM
Slide 63: Silicon in the Battery Anode
2 SILICON IN THE BATTERY ANODE: WELL POSITIONED TO EMERGE AS THE SOLUTION THAT ACCELERATES EV TRANSITION Silicon content % in battery anode Silicon for batteries demand¹ (kt per annum) New strategies and specific components to mitigate expansion issue Silicon Composite Target 25% 200 Silicon Rich Cu
Slide 64: Market Leader Driving Silicon Adoption in Batteries
2 WE ARE A MARKET LEADER DRIVING THE ADOPTION OF SILICON METAL INTO LITHIUM-ION BATTERIES Precision Advanced Silicon 64 Current revenue generating stream Silicon for advanced applications •High tech ceramics •Fillers for electronics •Silicon for gigapress aluminum alloys Present and growing opportun
Slide 65: Roadmap for ESG Initiatives
3 WE HAVE A ROADMAP AND ARE COMMITTED TO DELIVERING ON OUR ESG INITIATIVES 65
Slide 66: Scrutinizing the Value Chain to Drive Sustainability Targets
3 SCRUTINIZING THE VALUE CHAIN TO DRIVE ENVIRONMENTAL AND SUSTAINABILITY TARGETS AND EXECUTE OUR GOALS Scope 1-2-3 emissions Mitigation mapping Emissions Classification Scope 1 Scope 2 Scope 3 Lever Emissions type KTM energy efficiency KTM raw materials CO2 free PPAs Scope 2 Scope 1 Scope 2 Indirect
Slide 67: Four Primary Levers to Lower CO2 Emissions
3 FOUR PRIMARY LEVERS TO LOWER CO2 EMISSIONS CO2 free and renewable PPAs High potential to very efficiently decrease indirect emissions Solar, wind and nuclear PPAs are considered Charcoal consumption Capitalizing on our experience Supervising up to 100 ktpa charcoal production in Southern Africa Op
Slide 68: Q&A
Q&A
Slide 69: Customer Value Proposition
CUSTOMER VALUE PROPOSITION
Slide 70: Competitive Advantage in Serving Customers
OUR COMPETITIVE ADVANTAGE SERVICE CUSTOMERS IS OUR UNRIVALLED ABILITY TO Providing local sourcing, security of supply & technical excellence are our top strengths Share of demand distribution among local production & imports 100% Proximity to market allowing for flexibility and localization of suppl
Slide 71: Silicon Metal
SILICON METAL
Slide 72: Market Leadership Position in Silicon Metal
WE HAVE A MARKET LEADERSHIP POSITION IN SILICON METAL Market position Performance acceleration Sales contribution (Q1-22) Global demand (ex. China): 1,692kt 2020 2021 Q1-22 Ferroglobe Capacity: ~275-350kt Shipments (Kmt) 207 254 56 #1 merchant producer, in the world (ex. China) Sales ($M) 462 638 31
Slide 73: Silicon Metal End Markets
SILICON METAL PROVIDES EXPOSURE ACROSS ATTRACTIVE DIVERSIFED END MARKETS ~15% ~48% ~35% ~1-2% 5% ~75% ~20% ~10% ~10% ~15% 100% Anode/ Energy storage xx% of material consumed Photovoltaics Electronics Medical & Cosmetics Automotive Construction Other SiMe Sales Breakdown by product 73 x% Polysilicon
Slide 74: Silicon Metal Production Footprint
OUR SILICON METAL PRODUCTION FOOTPRINT CAN UNIQUELY SERVICE CUSTOMERS GLOBALLY … Becancour SiMe Incl. JV1 Country with operating assets for other product families Country with operating assets for SiMe Operating plant Currently Idled plant Operating plant for other products Swingable Note: (1) Refle
Slide 75: Offering Customers Larger Options and Supply Security
… AND ENABLES US TO OFFER CUSTOMERS LARGER OPTIONS AND SUPPLY SECURITY C U S T O M E R N E E D S 75 Broad offering: grades, sizing, specification and purities across all ranges of applications Supply security: diverse asset portfolio, value chain integration, in-region production (proximity) Trusted
Slide 76: Continued Growth Supported by Strong Demand Fundamentals
CONTINUED GROWTH IS SUPPORTED BY STRONG DEMAND FUNDAMENTALS IN STRATEGIC VALUE CHAINS … SiMe - North America SiMe - Europe Anodes potential to reach Note: Approximate figures calculated based on Ferroglobe market assumptions and CRU estimates | Source: CRU 76 SEL potential, FeSi ↔ SiMe conversion Fe
Slide 77: Impact of Diminishing Chinese Exports
…WHILE THE GLOBAL MARKET BALANCED, IT IS EXPECTED TO BE IMPACTED BY DIMINISHING CHINESE EXPORTS Western world with less available Chinese material China consumption growth to reduce exports SiMe Evolution '16-'26e (ktns) SiMe Evolution '16-'26e (ktns) forecast forecast 3,000 3,000 2,500 2,500 2,000
Slide 78: New Pricing Environment for Silicon Metal
NEW PRICING ENVIRONMENT FOR SILICON METAL DRIVEN BY MEGATRENDS AND STRUCTURAL INDUSTRY CHANGES SiMe price ($/t) evolution per region Strong demand fundamentals worldwide: from siloxane and polysilicon, in Asia, to aluminum industry tailwinds, in Europe, driven by transition to EVs or to the use in
Slide 79: Silicon Based Alloys
SILICON BASED ALLOYS
Slide 80: Silicon Based Alloys Among Market Leaders
SILICON BASED ALLOYS OFFERING POSITIONS US AMONG MARKET LEADERS ACROSS PRODUCTS AND GEOGRAPHIES Market position Recent performance Capacity by region Global demand (ex. China): 3,163kt 2020 2021 Q1-22 Shipments (Kmt) Ferroglobe FeSi Capacity: ~345-455kt 200 243 58 #1 in North America and #2 in Europ
Slide 81: Silicon Based Alloys End Markets
SILICON BASED ALLOYS ARE PRIMARILY SOLD TO THE STEEL INDUSTRY, AND OFFER EXPOSURE TO ATTRACTIVE END MARKETS ~60% ~5% ~35% Steel Cast Iron Foundry 55% ~10% 25% 5% Including machinery, tubes, metal goods, etc. Automotive Agriculture Construction1 Oil and Gas Others xx% of material consumed Silicon Bas
Slide 82: Global Silicon Based Alloys Production Footprint
OUR GLOBAL SILICON BASED ALLOYS PRODUCTION PROVIDES OPTIONALITY AND FLEXIBLITY… FeSi Std / Foundry Country with operating assets for FeSi Country with operating assets for other product families Operating plant Currently Idled plant Swingable 14 PlantProduct MendozaFeSi Std, Foundry, CaSi PlantProdu
Slide 83: Delivering Across Customer Needs
… WHICH ALLOWS TO DELIVER ACROSS CUSTOMER NEEDS C U S T O M E R N E E D S 83 Tailored offering with track record for innovation with 300+ SKUs (FeSiMg, Inoculants & Other) Supply security: portfolio of assets with ability to pivot production, domestic in-region production Commitment to consistent im
Slide 84: Focus on Higher Value-Added Specialty Products
GREATER FOCUS ON HIGHER VALUE-ADDED SPECIALTY PRODUCTS AND TAILORING TO MARKET DEMANDS 2 0 1 9 2 0 2 1 C o m m e n t s Shift to higher volumes in FeSi Specialties vs. Standard in 2021 to continue in 2022 Ferrosilicon FeSi Specialties 30%1 FeSi Standard 65%1 FeSi Specialties 35%1 FeSi Standard 70%1
Slide 85: Ferrosilicon Demand Expected Growing
FERROSILICON DEMAND EXPECTED GROWING IN THE MID TERM TO KEEP MARGINALLY Ferrosilicon forecasted demand evolution per region from FeSi ↔ SiMe North America Europe Note: Approximate figures calculated based on Ferroglobe market assumptions and CRU estimates | Source: CRU 85 Potential to switch capacit
Slide 86: Foundry Demand Outlook Expected Stable
WHILE OUTLOOK FOR FOUNDRY DEMAND IS EXPECTED STABLE Foundry forecasted demand evolution per region Foundry Potential to North America Europe Note: Approximate figures calculated based on Ferroglobe market assumptions and CRU estimates | Source: CRU 86 Potential to switch capacity from FeSi ↔ switch
Slide 87: Pricing Environment to Remain Above Historical Levels
PRICING ENVIRONMENT TO REMAIN ABOVE HISTORICAL LEVELS FeSi price ($/t) evolution per region Infrastructure investments driving steel demand and sustaining steel prices, enabling pass-through 6.000 5.000 Chinese reforms resulting in fewer steel exports drive rest of world steel production higher
Slide 88: Manganese Based Alloys
MANGANESE BASED ALLOYS
Slide 89: Manganese Alloys Division Among Market Leaders
MANGANESE ALLOYS DIVISION IS ALSO AMONG MARKET LEADERS Market position Performance acceleration Sales contribution (Q1-22) 2020 2021 Q1-22 Global Mn Alloys Production: 24,170kt Shipments (Ktn) 262 314 75 Ferroglobe Mn Alloys Capacity: ~600kt Sales ($M) 268 469 145 #2 in Europe Adj. EBITDA ($M) 13 70
Slide 90: Manganese Alloys End Markets
PRODUCT OFFERING SOLD INTO THE STEEL INDUSTRY OFFERS EXPOSURE TO ATTRACTIVE END MARKETS Steel Including machinery, tubes, metal goods, etc. xx% of material consumed Automotive Construction Others SiMe Sales Breakdown by product Source: Eurofem 90 x% ~40% ~10% ~50% HC Ferromanganese (FeMn) Ref. Ferro
Slide 91: Manganese Alloys Production Footprint in Europe
MANGANESE ALLOYS PRODUCTION FOOTPRINT IS CONCENTRATED IN EUROPE duct SiMn Plant Product nkirk HC FeMn Boo HC SiMn / LC FeMn MC-LC FeMn Country with operating assets for Mn Alloys Country with operating assets for other product families Operating plant Currently Idled plant PlantProduct Puerto Ordaz
Slide 92: Portfolio Ability to Serve Customer Needs
THE PORTFOLIO CUSTOMERS PROVIDES UNPARALLELLED ABILITY TO SERVE C U S T O M E R N E E D S 92 Supply security: portfolio of assets with ability to increase production, domestic in-region production Technical expertise supports broad grade offering Commitment to consistent improvement in decarbonizati
Slide 93: Manganese Alloys Demand Expected to Marginally Grow
MANGANESE BASED ALLOYS DEMAND EXPECTED TO MARGINALLY GROW IN THE NEAR TERM … SiMn Europe HC FeMn Europe MC FeMn Europe to increase capacity production Source: CRU estimates of market demand and imports 93 Available to increase Available capacity to increase production Available capacity production D
Slide 94: Product Spreads Expected Above Historical
… WITH PRODUCT SPREADS AVERAGE RANGE EXPECTED ABOVE HISTORICAL Mn Alloys spread ($/t) evolution per product in Europe Steel demand near-all time historical highs 4.000 Chinese reforms resulting in fewer steel exports drive rest of world steel production higher 3.000 Near-term (and potential lo
Slide 95: In Conclusion, Excellent Strategic Position
IN CONCLUSION, THE BUSINESS HAS AN EXCELLENT STRATEGIC POSITION FOR THE FUTURE We are a leading Silicon Metal & Ferroalloy producer with a global portfolio, and leadership, in each major geography Our actions reinforce the company’s ability to grow and succeed going forward, in a market context wh
Slide 96: Financial Performance
FINANCIAL PERFORMANCE
Slide 97: Historical Performance Reinforced the Case for Change
OUR HISTORICAL PERFORMANCE REFLECTED THE NEED TO ADDRESS VOLATILITY AND REINFORCED THE CASE FOR CHANGE Shipments (tons) Revenue ($M) Adjusted EBITDA ($M) and Margin (%) Net Cash Flow ($M) 4.5% 10.7% 10.3% -1.8% 97
Slide 98: Improved Performance Despite Pandemic and Energy Crisis
IMPROVED PERFORMANCE DESPITE THE CHALLENGES IMPOSED BY THE PANDEMIC AND ENERGY CRISIS Results • Improvement in 2020 vs. 2019 despite significant impact from the pandemic Full Year 2020 Full Year 2021 Full Year 2019 • 2021 adversely impacted by fixed price silicon metal contracts and high cost of ene
Slide 99: 2021 Results Constrained by One-Off Items
DESPITE THE IMPROVEMENT IN 2021, FINANCIAL RESULTS AND CASH WERE CONSTRAINED DUE TO ONE-OFF ITEMS 99 Cash impact ($mm) P&L impact ($mm) One-off factors CO2 OperationalRefinancingRefinancingOperationalEnergy costs restructuringrelatedequityrestarts/(Primarily costscostspayments disruptionsSpain) Tota
Slide 100: Step-Change in Performance Commencing Q1-2022
STEP-CHANGE IN PERFORMANCE COMMENCING Q1-2022 Q/Q Change Q/Q Change Q1-22 Q1-22 $715 +26% $151 201% $241 +182% $59 175% 34% +119% $343 -$55mm 100 Net Debt ($mm) Adj. EBITDA Margin (%) Net Cash Flow ($mm) Adj. EBITDA ($mm) Net Income ($mm) Sales ($mm)
Slide 101: Creating a More Resilient Ferroglobe
CREATING A MORE RESILIENT FERROGLOBE Volumes Costs Margins Right-sizing asset footprint Reduction of corporate and overhead costs • lowered by ~30% Commercial Excellence produce to order and avoid having to build inventory Shift production capacity towards higher margin products (7% in SiMe and 4%
Slide 102: Steady Operating Cost Improvement
STEADY OPERATING COST IMPROVEMENT 2016 Q1-22 ~75% ~70% Variable Costs Variable Costs: ~30% ~25% Fixed Costs • Currently elevated due to high energy costs and inflationary impact on raw materials Expected to ease in 2023 67% 72% Variable Costs • 33% 28% Fixed Costs Fixed Costs: • Increased fixed abso
Slide 103: Acceleration of Cash Flow Generation
ACCELERATION OF CASH FLOW GENERATION Key drivers Reset of silicon metal contracts in 2022 Positive pricing impact stemming from Russia/Ukraine conflict Capacity restarts (SiMe, Mn-Alloys) Shift towards specialty mix Strengthen balance sheet Continued execution of turnaround plan Inflationary pressur
Slide 104: Key Pillars of Our Financial Policy
KEY PILLARS OF OUR FINANCIAL POLICY Liquidity requirements of company to run business is $130 - $150 million given current operating footprint and inflationary cost environment Through the cycle average is $90 - $110 million Focus on gross debt reduction versus relative leverage ratios Targe
Slide 105: Capital Structure Priorities and Near-Term Cash
CAPITAL STRUCTURE PRIORITIES SUMMARY AND NEAR-TERM CASH • • • • Closed on June 30th, 2022 $100 million facility; $0 drawn at closing Pricing: SOFR + 150-175 bps Provides Incremental liquidity • • • Redeemable at par before Oct 2022 Launched redemption process on July 11th Expected redemption on July
Slide 106: Financial Targets Through the Cycle
FINANCAL TARGETS SET TO ENSURE STRONG FINANCIAL PROFILE THROUGH THE CYCLE Historical Range (2016-2021) Cycle Average Target -15% ─ +9% Disciplined commercial strategy coupled continuous cost cutting efforts to support higher margins through the cycle 20% 16% ─ 30% 21% Firm targets for inventory leve
Slide 107: Closing Remarks
CLOSING REMARKS
Slide 108: Structural Change in How We Operate
STRUCTURAL CHANGE IN HOW WE OPERATE Our products are essential and go into hundreds of consumer and industrial end markets Balanced portfolio providing exposure to stable growth end markets (household consumer products) and fast growing end markets (solar, batteries) Our products cannot be rep
Slide 109: Structural Change in Our Operating Landscape
STRUCTURAL CHANGE IN OUR OPERATING LANDSCAPE Structural change within China present attractive opportunity for Ferroglobe Supply-demand tightness to continue in the near-term supporting a new price floor High barriers to entry (costs, permits, access to cheap power and raw materials, technical
Slide 110: Clear Path Towards Value Creation
CLEAR PATH TOWARDS VALUE CREATION Structural change within the company unlocking significant value Focus on solidifying the core: stronger market penetration, expand position on specialty products and deepen customer relationships Turnaround plan delivering in all areas – revised Adjusted EBIT
Slide 111: Q&A
Q&A
Slide 112: Thank You
Ferroglobe MVIIIIGI'II;.......ULI III'I 11 2 THA NK