Ferroglobe Plc · NASDAQ:GSM
Ferroglobe — Q4 2017 Earnings Presentation
28 slides from Ferroglobe's earnings presentation, Feb 26, 2018
Slide 1: Advancing Materials Innovation Q4 and CY 2017
Advancing Materials Innovation NASDAQ: GSM Q4 and CY 2017
Slide 2: Forward-Looking Statements and non-IFRS Financial Metrics
Forward-Looking Statements and non-IFRS Financial Metrics 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
Slide 3: Table of Contents
Table of Contents Q4 and CY 2017 OverviewSelected Financial HighlightsPositive Outlook for 2018
Slide 4: Opening Remarks
Opening Remarks Q4 confirms the positive fundamentals of our business 2017 represents the successful turnaround of Ferroglobe Acceleration of free cash flow in 2018 provides the ability to grow the business
Slide 5: Q4 and CY 2017 Overview
I. Q4 and CY 2017 Overview Pedro Larrea, Chief Executive Officer
Slide 6: Q4 2017 Positive Results
Q4 2017 Positive Results Continued volumes recovery in most core products (Volume change vs Q3 2017)Si Metal +0.4%Si alloys +5.3%Mn alloys -1.7% Disciplined execution of commercial strategy (ASP change vs Q3 2017)Si Metal +4.7%Si alloys +5.8%Mn alloys -0.2% Normalized business platform Revenue +3.7%
Slide 7: Diversified Portfolio Uniquely Positions Us To Benefit From Market Fluctuations
Diversified Portfolio Uniquely Positions Us To Benefit From Market Fluctuations Qtr / Qtr Revenue Growth by Product Other Strong sales performance in Silicon Metal and Silicon-based alloys more than offset a modest volume adjustment in Manganese-based alloys Revenue Contribution by Product and Marke
Slide 8: Q4 2017 Revenues Up 3.7% vs Previous Quarter
Q4 2017 Revenues Up 3.7% vs Previous Quarter Silicon metal and silicon-based alloys prices were the key drivers in the quarter
Slide 9: Silicon Metal Snapshot
Silicon Metal Snapshot Volume Trends Sequential Quarter Product EBITDA Contribution ($m) Commentary Improving Silicon Metal prices in the 4th quarter strengthened operational performance.Strong volume demand resulting in near full capacity utilization. Increased costs reflect annual overhauls at sev
Slide 10: Silicon-Based Alloys Snapshot
Silicon-Based Alloys Snapshot Volume Trends Commentary Prices for Silicon-based alloys continue to remain strong. European prices were 12% higher this quarter following increase in Chinese pricing.Strong demand worldwide tightened the supply-demand balance in all markets.Increased costs reflect annu
Slide 11: Manganese-Based Alloys Snapshot
Manganese-Based Alloys Snapshot Commentary Manganese-based alloys prices and volumes have stabilized.Product margin affected by increasing Manganese ore prices and higher energy costs. Manganese ore continues to trend upward, which will reflect in future Manganese-based alloys prices. Volume Trends
Slide 12: Quarterly Performance Affected By Seasonal Factors
Quarterly Performance Affected By Seasonal Factors Commercial strategy proves to be right, capturing the continued recovery of the market Continue to optimize business platform: Optimizing production facilities: minimizing the impact of idled facilities: streamlining production plans to increase uti
Slide 13: CY 2017 Results Represent A Turnaround
CY 2017 Results Represent A Turnaround Optimization of Product Mix (Volume change vs 2016)Si Metal -4.5%Si alloys -4.9%Mn alloys +1.4% Disciplined execution of commercial strategy (ASP increase vs 2016)Si Metal +3.1%Si alloys +14.9%Mn alloys +60.7% Global business platform Revenue +10.5% vs 2016 Adj
Slide 14: Adjusted EBITDA Bridge 2017 vs 2016
Adjusted EBITDA Bridge 2017 vs 2016 ($m) * ”Other” include Mines, Energy, R&D and Overheads * Includes $65.9m of Mn ore price increase
Slide 15: Management Remains Focused On Operational Excellence
Management Remains Focused On Operational Excellence Improvement in DSO through different parts of the cycle Sales, $k DSO Operational fixed costs (Staff and Other operating expenses) reduced from 2015 -$142m
Slide 16: Selected Financial Highlights
Selected Financial Highlights Joe Ragan, Chief Financial Officer
Slide 17: Q4 and CY 2017 Key Performance Indicators and Overview
Q4 and CY 2017 Key Performance Indicators and Overview 1 Free cash flow defined as “Net cash provided by operating activities” minus “Payments for property, plant and equipment.”2 Excludes Accounts Receivable Securitization program for comparison purposes Source: Company information Key Performance
Slide 18: Balance Sheet Summary
Balance Sheet Summary ($m) 12/31/20171 Q3 20171 12/31/2016 Total Assets 2,027.0 2,162.9 2,019.3 Net Debt2 386.9 394.33 405.0 Book Equity 970.8 915.8 892.0 Net Debt2 / Adjusted EBITDA 2.08x 3.01x 5.76x Net Debt2 / Total Assets 19.1% 18.2% 20.1% Net Debt2 / Capital4 28.5% 30.1% 31.2% Notes
Slide 19: Debt Evolution
Debt Evolution ($m) Quarterly Debt Evolution
Slide 20: Working Capital Evolution
Working Capital Evolution ($m) Quarterly WC Evolution Reduced WC significantly while sales have increased by 10.5% over 2017
Slide 21: Conservative capital structure — positioned to pursue growth opportunities
Conservative capital structure — company positioned to pursue growth opportunitiesFocus on deleveraging the balance sheetLeverage target of below 2xSuccessful refinancing has simplified the debt structure and improved the solvency with regard to covenantsBond => STABILITY across the cycleSecuritizat
Slide 22: Positive Outlook for 2018
Positive Outlook for 2018 Pedro Larrea, Chief Executive Officer
Slide 23: End Market Dynamics: Stronger for Longer
End Market Dynamics: Stronger for Longer 7 Recent Trends:Favorable impact from Chinese shutdown in capacity; more to comeWorld steel capacity utilization remains at healthy and stable levelsInventory levels remain at 5 year lowsGrowth in North America stands to benefit from an new infrastructure spe
Slide 24: Trends Fueling Growth for Ferroglobe Products
Trends Fueling Growth for Ferroglobe Products 7 Ongoing Trends Emerging Trends Population Growth Global Climate Action Globalization Fourth Industrial Revolution Urbanization Industrialization Motorization Growing need for new advanced materials… Renewable Power Energy Efficiency Environmental Impac
Slide 25: New Plants Expand the Breadth and Depth of Manganese-Alloys Operations
New Plants Expand the Breadth and Depthof Manganese-Alloys Operations Ferroglobe and Glencore Europe production in 2017 (kt). * * * * * * * * * * * * * D C E B A Acquired facilities Existing facilities Over 1 million tonnes of manganese ore will be consumed annually by the combined operation 199 * *
Slide 26: Concluding Remarks
Concluding Remarks Operational and financial discipline have turned around Ferroglobe Solid fundamentals and momentum across our industry and end markets Acceleration of free cash flow in 2018 provides for exciting opportunities
Slide 27: Q&A
Q&A
Slide 28: Advancing Materials Innovation Q4 and CY 2017
Advancing Materials Innovation NASDAQ: GSM Q4 and CY 2017