Slide 1: Advancing Materials Innovation Third Quarter 2016
Advancing Materials Innovation NASDAQ: GSM Third Quarter 2016
Slide 2: Forward-Looking Statement
Forward-Looking Statement 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 f
Slide 3: Table of contents
Table of contents Q3 overview Selected financial highlights
Slide 4: I. Q3 overview
I. Q3 overview
Slide 5: Challenging pricing environment persisted in Q3
Source: Company information Silicon metal price of $0.95 per pound, down 6% Silicon-based alloys price of $0.63 per pound, down 3% Manganese alloys price of $865/MT, up 11% Silicon metal (39% of sales): prices remained under pressure as a result of low-priced imports Silicon alloy (33% of sales): Sl
Slide 6: Pricing dynamics starting to improve over the last weeks
Pricing dynamics starting to improve over the last weeks Bulk ferroalloys (FeSi and Mn alloys) prices above levels one year ago Mn alloys rapidly following ore evolution, and signaling supply side constraints FeSi showing less volatility but gradually increasing prices Significant price decline thro
Slide 7: Positive market outlook for 2017
Positive market outlook for 2017 Signs of meaningful improvements – driven by: Market starting to adjust to increased production costs in importing countries due to increased energy costs and to exchange rates Rebalanced global inventories Increase in idle capacity Continued strong demand from our k
Slide 8: Strong progress on synergies: run-rate potential increased to $85m
Run-rate synergy potential updated: ~$85 million 33% above initial estimation of $65 M Fast implementation: 69% of total potential captured in first year 50% of total potential already captured Synergies captured through a variety of initiatives in the technical, purchasing and SG&A areas Current ex
Slide 9: Synergies have been achieved through specific initiatives
Synergies have been achieved through specific initiatives Technical synergies $8.9M - better performance (energy and raw materials efficiency) through benchmarking of European vs. American silicon plants $7.0M – sharing of casting technologies between Cee, Bridgeport and Laudun plants $4.0M – improv
Slide 10: Silicon metal: significantly reduced production cost profile enhances leverage to price recovery
Silicon metal: significantly reduced production cost profile enhances leverage to price recovery Made significant progress to further reduce costs in the silicon metal business Silicon production costs reduced by ~22% since January 2015 Key drivers of cost reduction: Leveraging diversified footprint
Slide 11: Ferroglobe's business is well leveraged to price and cost improvements
Ferroglobe´s business is well leveraged to price and cost improvements Relatively modest improvements in production costs or prices have a significant impact on financial results Cost improvements that have been achieved prepare Ferroglobe for fully benefiting from price recovery
Slide 12: Financial discipline
Reported EBITDA loss of $(3.2) million1 Adjusted EBITDA of $12.8 million for the quarter Generated $11.7 million of free cash flow2 in Q3 2016 Generated $136.5 million in working capital synergies year-to-date $40 million improvement in working capital in Q3 2016 $262.8 million in working capital im
Slide 13: Opportunities for long-term value creation
Opportunities for long-term value creation Strong balance sheet gives company ability to grow organically and inorganically Generating cash flow, even in down cycle and identifying non-core asset divestitures Strong market position and multiple levers to pull given diversified products, end markets
Slide 14: Selected financial highlights
Selected financial highlights
Slide 15: Q3 key performance indicators and overview
Q3 key performance indicators and overview 1 Free cash flow defined as “Net cash provided by operating activities” minus “Payments for property, plant and equipment”, calculated excluding the impact of the $32.5 million shareholder settlement paid during the quarter ended March 31, 2016. Source: Com
Slide 16: Sales volumes evolution (Q1 2015 thru Q3 2016)
Silicon metal sales (ton) FeSi sales (ton) Other Silicon Alloys sales (ton) Manganese Alloys sales (ton) Sales volumes evolution (ton) (Q1 2015 thru Q3 2016)
Slide 17: Monthly sales prices ($/ton)
Monthly sales prices ($/ton) Silicon Metal Ferrosilicon Other Silicon Alloys Manganese Alloys - -
Slide 18: Steadily lowering costs
Steadily lowering costs Cost evolution of Ferroglobe business – including all products Systematic and holistic approach to cost management Made significant improvements to cost profile of entire business 13% cost reduction achieved year-to-date Delivering on the benefits and cost rationalization pot
Slide 19: Balance sheet summary ($mm)
Balance sheet summary ($mm) Q3 20161 Q2 20161 12/31/2015 Total Assets 2,247 2,283 2,406 Net Debt2 430 413 393 Book Equity 1,171 1,220 1,295 Net Debt2 / Total Assets 19.5% 18.1% 16.3% Net Debt2 / Capital3 27.2% 25.3% 23.3% Financial results are unaudited Net Debt includes finance lease obligations Ca
Slide 20: Q&A
Q&A
Slide 21: Advancing Materials Innovation Third Quarter 2016
Advancing Materials Innovation NASDAQ: GSM Third Quarter 2016 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: November 13, 2016 FERROGLOBE PLC By