Ferroglobe Plc · NASDAQ:GSM
Ferroglobe — FY2019 Earnings Presentation
25 slides from Ferroglobe's earnings presentation, Mar 3, 2020
Slide 1: Advancing Materials Innovation: Fourth Quarter and Full Year 2019
Advancing Materials Innovation NASDAQ: GSM Fourth Quarter and Full Year 2019
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 Full Year 2019 Business review Q4 and Full Year 2019 Financial review Appendix — supplemental information
Slide 4: Opening remarks
Opening remarks Q4 marked the ending to a dismal 2019 — pressure across all products lingering into early 2020 Successful execution of cash flow generation initiatives partially offset business pressures in Q4 New strategic plan under development — focus on returning to profitability
Slide 5: I. Q4 and Full Year 2019 Business Review
I. Q4 and Full Year 2019 Business Review
Slide 6: Key highlights
Key highlights Full Year 2019 results: Sales of $1.60 billion, compared to $2.24 billion in 2018 Net loss of $(288.1) million, including a goodwill impairment charge of $174 million, compared to a net profit of $24.6 million in 2018 Adjusted EBITDA of $(37.0) million compared to $230.1 million in 20
Slide 7: Product category snapshot — silicon metal
Volume trends Sequential quarters EBITDA evolution ($m) Commentary Pricing trends ($/mt) Product category snapshot — silicon metal Avg. realized price of $2,175/ton in Q4-19, flat with Q3-19 Prices remained low going into negotiation season at year end Volumes increase driven by inventory reduction
Slide 8: Product category snapshot — silicon-based alloys
Volume trends Commentary Sequential quarters EBITDA evolution ($m) Product category snapshot — silicon-based alloys Pricing trends ($/mt) Avg. realized price of $1,424/ton in Q4-19 vs $1,490/ton in Q3-19 Avg. price higher than index due to product mix (specialty) Healthy FeSi volumes considering slo
Slide 9: Product category snapshot — manganese-based alloys
Volume trends Commentary Sequential quarters EBITDA evolution ($m) Product category snapshot — manganese-based alloys Pricing trends ($/mt) Avg. realized price of $1,054/ton in Q4-19 vs $1,140/ton in Q3-19 Higher volumes of FeMn resulting in lower prices and lower costs Pricing pressure as global st
Slide 10: KTM program
KTM program Corporate Overheads Focus areas 2019 Target savings $10m $15m Savings 2019 Actual savings $6.7m $14.9m Consolidation of corporate offices (London HQ moving to Madrid) Reduction in personnel costs Reduction in use of third party consultants and services Reduction in audit fees, accounting
Slide 11: II. Q4 and Full Year 2019 Financial Review
II. Q4 and Full Year 2019 Financial Review
Slide 12: Income statement summary — Q4-19 and FY 2019
Income statement summary — Q4-19 and FY 2019 Lower sequential quarterly sales driven by a 3.5% decrease in average selling prices and 1.2% decline in shipments Q4-19 increase in cost of sales attributable to (i) expenses linked to the planned shutdown of plants totaling $8.5 million, (ii) higher vol
Slide 13: Adjusted EBITDA bridge — Q4-19 vs. Q3-19
* Adjusted EBITDA bridge — Q4-19 vs. Q3-19 ($m) Q4-19 average selling price decreased by 3.5% versus previous quarter Annual employment benefit valuation adjustment was registered in Q4-19 amounting $3.5 million, inventory write down increased by $2 million, and expenses related to idling plants inc
Slide 14: Adjusted EBITDA bridge — FY 2019 vs. FY 2018
* Adjusted EBITDA bridge – FY 2019 vs. FY 2018 ($m) Price declines across all major products in 2019: -14.8% in silicon metals, -16.2% in silicon-based alloys and -8.4% in mn-based alloys Volumes deterioration mainly attributable to silicon metals which was down 32.4% in 2019. Silicon-based alloys a
Slide 15: Balance sheet summary
Balance sheet summary Balance sheet 3/31/20181 6/30/20181 9/30/20181 12/31/2018 3/31/20191 6/30/20191 9/30/20191 12/31/20191,2,4 Cash and Restricted Cash ($m) 197.7 156.0 131.7 216.6 216.6 187.7 188.0 127.6 Total Assets ($m) 2,301.1 2,225.7 2,180.3 2,123.8 2,083.8 2,109.2 1,961.3 1,722.2 Gross Debt2
Slide 16: Cash flow summary — Q4-19 and FY 2019
Cash flow summary — Q4-19 and FY 2019 Q4-2019 cash flow from operating activities improved as result of working capital reduction, mainly driven by the decrease in inventories Q4-2019 cash flow from financing activities reflects the refinancing of bank borrowings in October and the A/R securitizatio
Slide 17: Working capital and cash trends
280 389 Working capital trends ($m) Cash1 trends ($m) Working capital decreased due to inventory reduction, while cash decreased due to refinancings Consolidation of A/R securitization facility The reduction in working capital by $97 million is mainly drive by the inventory reduction of $120 million
Slide 18: Debt Evolution and gross and net debt summary
Debt Evolution ($m) Gross and net debt summary ($m) Gross debt decreased by $75 million in Q4-19 primarily as a result of the new ABL financing in October Former RCF balance repayment with smaller ABL and cash on hand, as well as additional cash used to fund a portion of the N.A. accounts receivable
Slide 19: Successful refinancings closed in Q4-19
Successful refinancings closed in Q4-19 New North American Asset Based Revolving (“ABL Revolver”) credit facility closed on October 11, 2019 New $100 million facility; $70 million drawn at close 5-year facility bearing interest of L+3%, versus L+3.5% for the existing revolving credit facility (“RCF”
Slide 20: Q&A
Q&A
Slide 21: III. Appendix: supplemental information
III. Appendix: supplemental information
Slide 22: Quarter sales and adjusted EBITDA
Quarterly trend – revenue contribution per family of products ($m) Quarterly trend – adjusted EBITDA ($m) Quarter sales and adjusted EBITDA Note: The amounts for prior periods have been restated to show the results of the Company’s Spanish hydroelectric plants within (Loss) profit for the period fro
Slide 23: Adjusted EBITDA reconciliation
Adjusted EBITDA reconciliation ($m) Note: 1 The amounts for prior periods have been re-presented to show the results of Spanish hydroelectric plants within (Loss) profit for the period from discontinued operations. ( Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Silicon metal 43.5 41.5 32.3 20.6 8
Slide 24: Gross debt at December 31, 2019
Gross debt at December 31, 2019 ($,000) Current Non-current Total balance sheet Less operating leases 1 Less AR securitization debt 2 Gross debt Bank borrowings 14,611 144,388 158,999 - (100,070) 58,929 Lease liabilities 8,900 16,972 25,872 (24,872) - 1,000 Debt instruments 10,937 344,014 354,951 -
Slide 25: Advancing Materials Innovation: Fourth Quarter and Full Year 2019
Advancing Materials Innovation NASDAQ: GSM Fourth Quarter and Full Year 2019