Ferroglobe Q4 2024 Earnings Report

Ferroglobe EPS Results

• Actual EPS: $0.03
• Consensus EPS: -$0.01
• Beat/Miss: Beat by +$0.04
• One Year Ago EPS: N/A

Ferroglobe Revenue Results

• Actual Revenue: $367.51 million
• Expected Revenue: $393.00 million
• Beat/Miss: Missed by -$25.49 million
• YoY Revenue Growth: N/A

Ferroglobe Announcement Details

• Quarter: Q4 2024
• Date: 2/19/2025
• Time: After Market Closes
• Conference Call Date: Thursday, February 20, 2025
• Conference Call Time: 8:30AM ET

Ferroglobe (NASDAQ:GSM) produces and sells silicon metal, and silicon and manganese-based ferroalloys in the United States, Europe, and internationally. It provides silicone chemicals that are used in a range of applications, including personal care items, construction-related products, health care products, and electronics; and silicon metal for primary and secondary aluminum producers. The company also offers silicomanganese, which is used as deoxidizing agent in the steel manufacturing process; and ferromanganese that is used as a deoxidizing, desulphurizing, and degassing agent in the removal of nitrogen and other harmful elements from steel. In addition, it offers ferrosilicon products that are used to produce stainless steel, carbon steel, and various other steel alloys, as well as to manufacture electrodes and aluminum; calcium silicon, which is used in the deoxidation and desulfurization of liquid steel, and production of coatings for cast iron pipes, as well as in the welding process of powder metal and in pyrotechnics; and nodularizers and inoculants, which are used in the production of iron. Further, the company provides silica fume, a by-product of the electrometallurgical process of silicon metal and ferrosilicon. Additionally, it operates quartz mines in South Africa, Spain, the United States, and Canada; and low-ash metallurgical coal mines in the United States; and a charcoal production facility in South Africa, as well as holds interests in hydroelectric power plant in France. The company serves silicone chemical producers; aluminum and steel manufacturers; auto companies and their suppliers; ductile iron foundries; manufacturers of photovoltaic solar cells and computer chips; and concrete producers. Ferroglobe PLC was formerly known as VeloNewco Limited and changed its name to Ferroglobe PLC in December 2015. The company was incorporated in 2015 and is headquartered in London, the United Kingdom.

Ferroglobe Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Good morning, ladies and gentlemen, and welcome to the Ferroglobe's Fourth Quarter and Full Year twenty twenty four Earnings Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will be given at that time. As a reminder, this conference call may be recorded. I would now like to turn the call over to Alex Rotonen, Ferroglobe's Vice President of Investor Relations.

[Operator]

You may begin.

[Alex Rotonen, Vice President, Investor Relations at Ferroglobe]

Thanks, Sonia. Good morning, everyone, and thank you for joining Ferroglobe's fourth quarter and full year twenty twenty four conference call. Joining me today are Marco Levy, our Chief Executive Officer and Beatriz Garcia Cas, our Chief Financial Officer. Before we get started with our prepared remarks, I'm going to read a brief statement. Please turn to Slide two at this time.

[Alex Rotonen, Vice President, Investor Relations at Ferroglobe]

Statements made by management during this conference call that are forward looking are based on current expectations. Factors that could cause actual results to differ materially from these forward looking statements can be found in Teragol's most recent SEC filings and the exhibits to those filings, which are available on our webpage at ferroglobe.com. In addition, this discussion includes references to EBITDA, adjusted EBITDA, adjusted gross debt, adjusted net debt and adjusted diluted earnings per share among other non IFRS measures. Reconciliations of these non IFRS measures may be found in our most recent SEC filings. Before I turn the call over to Marco Levy, our CEO, I want to announce that we'll be participating in the BMO Global Market Metals, Mining and Critical Minerals Conference in Florida on February.

[Alex Rotonen, Vice President, Investor Relations at Ferroglobe]

We hope to see you there. Marco?

[Marco Levi, CEO & Executive Director at Ferroglobe]

Thank you, Alex. Thanks for joining us on the call today. We appreciate your interest in Ferroglobe. Before I provide a recap of our 2024 accomplishments, I want to thank all Ferroglobe employees for a successful year. We posted revenue of 1,600,000,000 and adjusted EBITDA of $154,000,000 and free cash flow of $164,000,000 We used our strong cash flow generation to repay the remaining senior secured notes.

[Marco Levi, CEO & Executive Director at Ferroglobe]

Eliminating these notes saves us $32,000,000 in annual interest. And in the first quarter of twenty twenty four, we became net cash positive for the first time in Ferroglobe's history and maintain our strong balance sheet throughout the year. The strong balance sheet enables us to initiate a capital return program consisting of quarterly dividends and share buybacks. We paid our initial dividend in the first quarter of twenty twenty four and are increasing it by approximately 8% in the first quarter of twenty twenty five. In addition, we began our share repurchase program in the third quarter, which we will continue to execute selectively in 2025.

[Marco Levi, CEO & Executive Director at Ferroglobe]

We also intend to continue complementing our discretionary repurchases with a 10b5-one plan. While our share buybacks have been modest, we intend to get more aggressive as we gain visibility and see improvement in our end markets. Maintaining a strong balance sheet to ensure that we have the ability to navigate any downturn is our top priority. One of the most important developments taking place is changing global trade, including potential antidumping and countervailing duties, tariffs and safeguards. This creates uncertainty until they become better defined.

[Marco Levi, CEO & Executive Director at Ferroglobe]

It is clear that governments are taking these measures seriously. And this item focus is likely to make tariffs and safeguards more prevalent going forward. Some actions have already taken place and some are under consideration. These trade measures enacted by governments are expected to benefit domestic producers as the trade flows are altered across the globe. As the largest Western producer with significant local operations, which are back integrated in North America and Europe, we have historically been significantly impacted by an uneven playing field.

[Marco Levi, CEO & Executive Director at Ferroglobe]

Equally importantly, we serve customers who buy mostly local. With the recent government announcements in North America and Europe within the European community, we are optimistic that these actions will positively impact our market in the coming quarters, providing a tailwind for our business and driving future growth. While the trade uncertainty is difficult to handicap, we believe these trade measures are imperative and will transform our industry for the better. In The U. S, the International Trade Commission determined that Russia, Malaysia, Kazakhstan and Brazil unfairly priced ferro silicon adversely impacting local producer.

[Marco Levi, CEO & Executive Director at Ferroglobe]

As a result, combined anti dumping and counterbailing duties of more than 1000% were placed on Russia. Final anti dumping and countervailing duties against Malaysia, Kazakhstan and Brazil will be announced by the Department of Commerce on March 21. Combined, these four countries in 2023 imported approximately 140,000 tons of ferrocyclical into The U. S, accounting for approximately 65% of the market share. Overall, these measures are expected to benefit us significantly going forward.

[Marco Levi, CEO & Executive Director at Ferroglobe]

The European market has also been damaged by low priced imports, particularly from Eastern countries. In December 2024, European Commission initiated a safeguard investigation into silicon metal, silicon based alloys and manganese alloy imports. While the potential magnitude of these measures is yet to be determined, we expect the provisional decision in Q2 with the final determination anticipated in Q4. To put things into perspective, EU's total consumption of silicon metals, silicon alloys and manganese alloys declined approximately 12% or 300,000 tonnes between 2019 and 2024. Combined with an estimated seven percent point increase in the market share of imports from Eastern countries, this has had a material impact on European markets, which has reflected in price.

[Marco Levi, CEO & Executive Director at Ferroglobe]

Total imports have increased by 70,000 tonnes since 2019, accounting for 40% market share. As the largest domestic European producer, these measures, if enacted, are expected to positively impact the quality of the business and provide Ferro Global with a great opportunity to increase our market share. Moving to current market conditions. It has been a challenging environment in Europe and North America in the recent months. While we expect market conditions to persist to the first half of twenty twenty five, we are beginning to see signs of market bottom as indexes have stabilized and prices for phasing ferrosilicon in Europe and manganese alloys are trending higher.

[Marco Levi, CEO & Executive Director at Ferroglobe]

One key factor contributing to our more optimistic outlook is the consistent growth of European steel production over the past several months. The World Steel Association Forecast continued growth of 3.5% in 2025 with North American steel production expected to grow at the rate of 1.6% in 2025. In addition, the used steel safe burn measure of 2019 is currently under radio and the aluminum industry has requested a safeguard investigation into imports. A positive decision would encourage more steel and aluminum production in The EU, further ramping demand for all our products. Another encouraging sign is the improved manufacturing PMIs.

[Marco Levi, CEO & Executive Director at Ferroglobe]

In January, global PMI posted its highest level in seven months with The U. S. Increasing to 51.2% representing solid growth, boosted by a thirty four month high in the expected production outlook. In addition, Europe's current contraction is expected to show improvement in the coming months. Next, I will discuss the outlook for 2025.

[Marco Levi, CEO & Executive Director at Ferroglobe]

On our last call, I mentioned sales and operation plannings or simply S and OP as another tool to drive incremental improvement across all facets of Ferroglobe. We are in the early innings of its implementation, but I've already seen benefits with reduced working capital in the fourth quarter. Once implemented across all our businesses, we expect to see material operation efficiency with improved cash flow, lower working capital and cost benefits. For a brief update on Core Share. We continue to see promising test results from this partnership.

[Marco Levi, CEO & Executive Director at Ferroglobe]

And as a result, we recently increased our investment. We look forward to continued collaboration as we drive innovation with this exciting technology. We are bullish about silicon metal overall as a disruptive breakthrough in EV batteries. And as a leader in silicon metal, we are well positioned to capitalize on industry shift from graphite to silicon rich anodes in EV batteries. This will significantly enhance the performance of EVs, including lower cost, longer ranges and shorter charging times.

[Marco Levi, CEO & Executive Director at Ferroglobe]

Next, I will provide a brief update on 2025 guidance. We are initiating adjusted EBITDA guidance of $100,000,000 to $170,000,000 The wider range of guidance is a result of uncertainty related to market conditions, timing of trade cases, potential tariffs and geopolitical issues. Beatrice will walk you through on our main assumptions related to guidance. Next slide, please. Our fourth quarter revenue declined compared to the third quarter due to lower volumes across all three segments.

[Marco Levi, CEO & Executive Director at Ferroglobe]

Adjusted EBITDA was $10,000,000 down from $60,000,000 impacted by lower prices, higher costs and softer volumes. Operating cash flow improved by $21,000,000 reaching $32,000,000 in the fourth quarter. Free cash flow increased to $14,000,000 an improvement of $24,000,000 over the prior year quarter. Next slide please. Let's talk about silicon metal.

[Marco Levi, CEO & Executive Director at Ferroglobe]

Silicone metal revenue declined 17% in Q4 to $161,000,000 down from $194,000,000 in the third quarter. Adjusted EBITDA declined to $17,000,000 in the fourth quarter due to higher costs, lower prices and reduced volumes. Realized prices declined 5% over the previous quarter. During the fourth quarter, index prices decreased approximately 16 in The U. S, while the European index was unchanged.

[Marco Levi, CEO & Executive Director at Ferroglobe]

Overall, volumes were down 12% with all regions shipments. European and U. S. Shipments declined 133% respectively. The outlook for silicon metal continues to be soft.

[Marco Levi, CEO & Executive Director at Ferroglobe]

The aluminum sector in Europe and U. S. Is expected to remain flat in the short term. A high level of imports is impacting the North American and European regions. In addition, uncertainties related to potential U.

[Marco Levi, CEO & Executive Director at Ferroglobe]

S. Tariffs have resulted in some of our solar customers postponing purchasing decisions. Despite these short term issues, we anticipate that the silicon market will improve once the destocking cycle is completed, which we expect to take a few months. As a result, we are optimistic that demand would pick up in the second half of twenty twenty five. Next slide, please.

[Marco Levi, CEO & Executive Director at Ferroglobe]

Our silicon based alloys segment adjusted EBITDA improved slightly to $3,000,000 in Q4, primarily driven by cost improvement. Average realized prices declined by 3% over the third quarter. Volumes were pressured by low demand and aggressively priced imports, especially in Europe, where shipments declined by 25% in the fourth quarter. The European Phase III standard index was down 7%, while The U. S.

[Marco Levi, CEO & Executive Director at Ferroglobe]

Index was down 6%. Looking ahead, we are encouraged by the recent 5% increase in European index price since the end of twenty twenty four. Combined with the various trade measures and forecasted growth in steel production, we expect demand and prices to improve in both Europe and U. S. As the year progresses.

[Marco Levi, CEO & Executive Director at Ferroglobe]

Turning now to Maganese Alloys. Next slide, please. Revenue declined 13% to $78,000,000 in Q4, driven by a 17% decrease in prices, partially offset by a 5% increase in shipments. Adjusted EBITDA decreased $9,000,000 primarily driven by tighter spreads and the impact of working through higher cost manganese ore inventory. The recent tightening of manganese ore supply is boosting prices, which have risen four months high.

[Marco Levi, CEO & Executive Director at Ferroglobe]

We are optimistic about the manganese segment outlook for 2025, supported by improvements in pricing and higher spreads. The recent uptick in demand is encouraging, and we expect the trend to continue in the coming quarters. I would now like to turn the call over to Beatriz Garcia Kos, our CFO, to review the financial results and guidance in more detail. Beatriz?

[Beatriz García-Cos Muntañola, CFO, IT & Principal Accounting Officer at Ferroglobe]

Thank you, Marco. Please turn to Slide 10 for a review of the income statement. Sales decreased 18% sequentially in the fourth quarter to $368,000,000 driven by a 13% decrease in volumes for both silicon metal and silicon alloys and lower prices in all segments ranging from 4% for silicon alloys to 17% for manganese alloys. Manganese alloys volumes grew 5% quarter over quarter. For the full year, sales were flat versus 2023 with growth in the manganese alloys segment, offsetting declines in ferrosilicon sales.

[Beatriz García-Cos Muntañola, CFO, IT & Principal Accounting Officer at Ferroglobe]

Silicobetal sales were up slightly for the full year. In the fourth quarter, raw material and energy consumption for production increased to 69% of sales versus 58% in the prior quarter, primarily driven by lower production, higher energy costs and increased manganese ore prices. For the full year, raw material and energy increased nine percentage points to 62% of sales due to lower prices and higher energy cost in France. Adjusted EBITDA in the fourth quarter was $10,000,000 down from $60,000,000 in the prior quarter. The full year 2024 adjusted EBITDA was $154,000,000 compared to $315,000,000 in 2023, attributable mainly to higher energy costs in France and lower realized prices.

[Beatriz García-Cos Muntañola, CFO, IT & Principal Accounting Officer at Ferroglobe]

Next slide please. Approximately 60% of the EBITDA decline is attributable to lower pricing with realized prices down by 5%, three % and seventeen % in silicon metal, silicon based alloys and manganese alloys respectively. Lower index prices in the third quarter adversely impact the fourth quarter sales prices due to a two to three month lag between indexes and realized prices. Cost increases, primarily due to higher energy costs, ironing in France and elevated manganese ore cost reduced our EBITDA by approximately $11,000,000,000 Lower volumes impacted our adjusted EBITDA by $3,000,000 mainly due to soft demand across silicon metal and silicon based alloys, which experienced volume declines of 1213% respectively. This was partially offset by a 5% increase in volumes in the manganese alloys segment.

[Beatriz García-Cos Muntañola, CFO, IT & Principal Accounting Officer at Ferroglobe]

Head office and non core business reduced 4% adjusted EBITDA by $6,000,000 Slide 12 please. Adjusted EBITDA for the full year was $154,000,000 versus $315,000,000 in 2023 and EBITDA margin was 9% down from 19% in 2023. While the stronger volumes contributed $29,000,000 to adjusted EBITDA, average selling prices had the biggest impact on our 2024 adjusted EBITDA, reducing it by approximately $128,000,000 Higher cost impacted EBITDA for the year by $83,000,000 mostly related to higher energy expenses in Europe. Head office and non core business contribute to 2024 adjusted EBITDA driven by lower head office related costs and improved mining operations. Next slide please.

[Beatriz García-Cos Muntañola, CFO, IT & Principal Accounting Officer at Ferroglobe]

During the fourth quarter, we recognized a $61,000,000 noncash impairment and goodwill write off related to our operations. Our operating cash flow was $32,000,000 benefiting from a $23,000,000 release of working capital. Our decision to idle our French operations earlier combined with effective energy management resulted in an energy rebate of $21,000,000 in the fourth quarter. The remaining $34,000,000 was collected in January 2025. CapEx in the fourth quarter was $18,000,000 down from $21,000,000 in the third quarter.

[Beatriz García-Cos Muntañola, CFO, IT & Principal Accounting Officer at Ferroglobe]

For the full year, we generated $243,000,000 of operating cash flow and spent $79,000,000 in CapEx, resulting in $164,000,000 of free cash flow. We used $150,000,000 of this cash flow to redeem the remaining senior secured notes. We paid $2,400,000 or a $0.013 per share dividend on December 27 and we are declaring the first quarter twenty twenty five dividend of 0.014 per share, representing an 8% increase. The dividend will be paid on February 26 for shareholders on record on February 20. Next slide please.

[Beatriz García-Cos Muntañola, CFO, IT & Principal Accounting Officer at Ferroglobe]

We ended the fourth quarter with a cash balance of $133,000,000 up from $121,000,000 at the end of the third quarter. Our positive net cash position improved to $39,000,000 up from $32,000,000 in the prior quarter, while our adjusted gross debt increased slightly ending the quarter at $94,000,000 as December '31. Before I turn the call over to Marco, I want to provide some more insights related to our 2025 outlook. We are targeting a working capital improvement of $50,000,000 in 2025 as we continue the implementation of the S and OP process. We expect our 2025 CapEx to be in the range of $60,000,000 60 5 million dollars and cash tax rate to be around 24%.

[Beatriz García-Cos Muntañola, CFO, IT & Principal Accounting Officer at Ferroglobe]

Our outstanding Spanish loan or SEBI loan with a principal balance of $36,000,000 is due in 2025. The first principal payment of $90,000,000 is due in March with remaining $17,000,000 due in June. As Marco mentioned earlier, we anticipate our 2025 adjusted EBITDA to range between $100,000,000 and $170,000,000 For the first quarter, we expect our adjusted EBITDA to be negative due to the impact of low prices, weak demand and idling operations in France. This is consistent with our budget. Our 2025 outlook reflects a partial benefit from trade measures and an expected improvement in market conditions during the second half of the year.

[Beatriz García-Cos Muntañola, CFO, IT & Principal Accounting Officer at Ferroglobe]

Next slide please. At this time, I will turn the call back to Marco.

[Marco Levi, CEO & Executive Director at Ferroglobe]

Thank you, Beatrice. Moving to the key takeaways on Slide 16. Paraglob had a successful 2024. Despite unfavorable market conditions, we posted solid adjusted EBITDA, which strengthened our balance sheet significantly, initiated quarterly dividends and a share buyback program, while focusing on innovation in advanced silicon metal as critical material for the energy transition. As evidence of the changing global trade environment, the U.

[Marco Levi, CEO & Executive Director at Ferroglobe]

S. Trade Commission and European Commission initiated broad trade measures to level the playing field against predatory trade practices. We expect to capitalize from these measures in the second half of this year. There are early signs that the demand environment might be bottoming. Manganese and fizzy price in Europe have ticked up in recent weeks.

[Marco Levi, CEO & Executive Director at Ferroglobe]

We foresee broader improvement in the second half of twenty twenty five. Fairglow has positioned the company for long term success by making strides in developing advanced uses for silicon, including a partnership with Core Shell and implementing the S and OP tools to increase efficiency and lower working capital. Operator, we are ready for questions.

[Operator]

Thank you. And the first question comes from Nick Giles from B. Riley Securities. Please go ahead. Your line is now open.

[Nick Giles, Senior Research Analyst at B.Riley Securities]

Thank you very much, operator, and good morning or good afternoon, everyone. I wanted to start with your annual guidance. This is a wider range, so I was hoping you could give us a sense for what's baked into the lower end versus the higher end, specifically as it relates to pricing and volume? And then how much of the high end could be determined by implications of trade measures versus improved demand? Thanks very much.

[Marco Levi, CEO & Executive Director at Ferroglobe]

Yes. Thank you, Nick. Let me start answering this question. By coincidence, we give the same guidance of last year, but the point is that we are facing an even more volatile environment, not only in terms of demand, but in terms of uncertainty on the trade measures that are going to be set by the authorities, both in U. S.

[Marco Levi, CEO & Executive Director at Ferroglobe]

And in Europe. So let's say that first quarter, like Vethys mentioned, is going to be particularly tough because we start from very low prices, extremely low volumes and the usual opportunity issue of adding our French plants down in the first quarter, right? So and then as of the second quarter, we see the environment improvement with some decisions that should be taken in U. S. And the third quarter, I think both geographic areas are going to be impacted by these decisions.

[Marco Levi, CEO & Executive Director at Ferroglobe]

So if you look at the low side of the guidance, it's a sort of conservative forecast based on today's situation. The IRN is based on, like we say, on a partial success of the government to impose duties. And we have estimated prices and volumes that drive toward the range that we have mentioned, 100,000,000 one hundred and 70 million dollars

[Nick Giles, Senior Research Analyst at B.Riley Securities]

Thank you very much, Marco. That's helpful. Maybe just a follow-up on that. Would there be any sort of sensitivity that you may be able to provide in terms of volumes or pricing and maybe anchoring near the midpoint?

[Beatriz García-Cos Muntañola, CFO, IT & Principal Accounting Officer at Ferroglobe]

Yes. Hi, Nick, this is Mitrice speaking. Maybe I'm going to be sharing a data point that I think you have already, but let me go through. So for every 1% of variance in pricing, more or less this hits positively our EBITDA by $14,000,000 This is the number that you have to keep in your mind, if this makes sense.

[Nick Giles, Senior Research Analyst at B.Riley Securities]

Got it. No, that's very helpful Beatrice. I really appreciate that. Maybe my next question, Marco, I was wondering if you could speak to some of the key growth markets in silicon metal In the context of your desire for further expansion, solar markets do appear somewhat softer. So curious if this changes your appetite for expansion or potential timing?

[Nick Giles, Senior Research Analyst at B.Riley Securities]

And alongside this, if you'd have any updates as it relates to the brownfield expansion?

[Marco Levi, CEO & Executive Director at Ferroglobe]

Okay. So just to try to stay focused, we firmly believe in silicon penetrating much more substantially the battery business. And there are existing technologies, but also new technologies under development that move the graphite replacement from a 5% to even 100% graphite replacement to the anode. And we are working with several companies. Of course, we have announced our cooperation with Core Shell, but we work with a number of players, particularly in U.

[Marco Levi, CEO & Executive Director at Ferroglobe]

S. And I think that they are the level of progress is amazing. It shows that it takes time before a new technology is adopted in batteries. So we firmly believe in that and we are totally committed to that. When you talk about the solar business, well, the current business, existing business is mainly impacted by big structural overcapacity of polysilicon in China.

[Marco Levi, CEO & Executive Director at Ferroglobe]

And for our business is impacted by the current investigation on the imports on solar sales and modules in U. S. That is expected to be concluded sometime in April based on what we know. And this should reopen our sales opportunity in Asia. But talking in bigger terms, clearly the overcapacity of polysilicon has caused a crash of the price of polysilicon, I think mostly below cost for most of the players.

[Marco Levi, CEO & Executive Director at Ferroglobe]

And this has been slowing down some of the polysilicon projects, new polysilicon projects outside of China. So there is a time factor. I think that at least Europe is still quite interested in setting a solar supply chain, the same for other countries in The Middle East. In U. S, for sure, there is going to be more protection on sales and modules.

[Marco Levi, CEO & Executive Director at Ferroglobe]

So we expect the overall demand of silicon metal benefit to benefit out of these trends. Talking about The U. S. Expansion, we are working on the submission for the papers for the permit. And so it's a question of two months.

[Marco Levi, CEO & Executive Director at Ferroglobe]

And then we expect to get the permit in a timeframe of one year and up since we started the process. And then it will take about a couple of years to build the new plant in U. S. But the project is going on as aggressively as we can and we're going to make it.

[Nick Giles, Senior Research Analyst at B.Riley Securities]

Marco, I really appreciate all the color there. One more if I could. It's good to see some initial share repurchases. Obviously, you're waiting for more certainty in the market, but how should we think about magnitude of potential buybacks if markets were to turn? Is there a minimum cash balance in mind that would imply potential cash that could be set aside for capital returns?

[Nick Giles, Senior Research Analyst at B.Riley Securities]

I know, Beatrice, you mentioned working capital release of $50,000,000 if I heard you correctly.

[Beatriz García-Cos Muntañola, CFO, IT & Principal Accounting Officer at Ferroglobe]

Thank you for the question. Nick, this is Beatrice speaking. So just for to recap, so we bought in 2024 almost 600,000 shares. And up to now we have been continue on Q1 to buy some shares, right? I think we continue we plan to continue the opportunistic approach to the share buyback.

[Beatriz García-Cos Muntañola, CFO, IT & Principal Accounting Officer at Ferroglobe]

And as we have been commenting on the previous quarter, Nikke, is we don't plan to take additional debt to support the share buyback program, right? So and on the other side, you know more or less what is our liquidity needs for the company. So we will always go through an opportunity approach to the share buyback. So hopefully this year as we release working capital, etcetera, as you said, we can do a

[Beatriz García-Cos Muntañola, CFO, IT & Principal Accounting Officer at Ferroglobe]

little bit more.

[Nick Giles, Senior Research Analyst at B.Riley Securities]

Beatrice, I really appreciate that. To you and the team, continue. Best of luck. Keep up the good work.

[Marco Levi, CEO & Executive Director at Ferroglobe]

Thank you.

[Beatriz García-Cos Muntañola, CFO, IT & Principal Accounting Officer at Ferroglobe]

Thank you so much.

[Operator]

Thank you. We will now go to our next question. Please stand by. And the next question comes from Martin Englert from Seaport Research Partners. Please go ahead.

[Operator]

Your line is now open.

[Martin Englert, Senior Equity Research Analyst - Metals & Mining at Seaport Research Partners]

Hello. Good day, everyone. Just circling back to the annual guidance, if spot prices for silicon and alloys remain unchanged from current levels, Do you still achieve the $100,000,000 well under the guidance range?

[Marco Levi, CEO & Executive Director at Ferroglobe]

We do expect that because it is also the question, Martin, of mix, right? The first quarter is particularly impacted not only by demand and low pricing, but also by the fact that all our French plants are down. And the other factor is that we expect to recover some business in the second half of the year, which is not there today, which is our business in Asia. So it's a question of mix. So but anyway, even keeping the current conditions, we expect to achieve at least the bottom of the range that I have mentioned.

[Alex Rotonen, Vice President, Investor Relations at Ferroglobe]

And I would add that the volume is also a factor.

[Martin Englert, Senior Equity Research Analyst - Metals & Mining at Seaport Research Partners]

What is factored in as far as volumes or a range with for the full year with $100,000,000 to $170,000,000 across your business units?

[Marco Levi, CEO & Executive Director at Ferroglobe]

Well, we are talking about volumes pretty much aligned to 2024.

[Martin Englert, Senior Equity Research Analyst - Metals & Mining at Seaport Research Partners]

Can you walk me through the contribution of the quarterly French energy credit for 2024, just going through one through 4Q, I believe you said earlier it was $21,000,000 for 4Q and what's targeted for 2025?

[Beatriz García-Cos Muntañola, CFO, IT & Principal Accounting Officer at Ferroglobe]

Yes. Hi, Martin, this is Mitrice speaking. So as you know, we have from 2023 to 2024, the compensation has been a little bit lower. So total for the year is $60,000,000 or $61,000,000 In the Q4, the impact the P and L impact is $24,000,000 right? And from a cash perspective, we've got already in 2024 to $32,000,000 out of the $60,000,000 and the rest in January 2025.

[Martin Englert, Senior Equity Research Analyst - Metals & Mining at Seaport Research Partners]

And what are you factoring into the guidance for the credit for 2025?

[Beatriz García-Cos Muntañola, CFO, IT & Principal Accounting Officer at Ferroglobe]

Well, this year is going to be lower than in 2024. I think the good news here is that we are negotiating already the contract for 2020 starting 01/01/2026, and we expect to get a very good contract.

[Martin Englert, Senior Equity Research Analyst - Metals & Mining at Seaport Research Partners]

All right. Thank you very much. Good luck.

[Marco Levi, CEO & Executive Director at Ferroglobe]

Thank you, Martin.

[Operator]

Thank you. We will now go to our next question. Please stand by. And the next question comes from Kyle Mowery from Grizzly Rock Capital. Please go ahead.

[Operator]

Your line is now open.

[Kyle Mowery, Founder & Portfolio Manager at Grizzlyrock Capital LLC]

Good day. Thank you for taking my question. So if the European quota system is finalized as proposed, your European production volume should increase. The question is, as the utilization level increases, how would this impact cost per tonne of your European production?

[Marco Levi, CEO & Executive Director at Ferroglobe]

You mean, you ask for price per tonne impact? Is this your question? Cost?

[Kyle Mowery, Founder & Portfolio Manager at Grizzlyrock Capital LLC]

The question is production cost per tonne in Europe.

[Marco Levi, CEO & Executive Director at Ferroglobe]

Okay. Well, the let me say that we don't know which measures you is going to adopt and if they get approved by the 27 countries, right? So we are in the process. We are still answering a lot of questions that come from suppliers, countries, states that have seen the document. We are in this phase, so I cannot anticipate what EU is going to propose.

[Marco Levi, CEO & Executive Director at Ferroglobe]

But they mentioned safeguards in their announcement on December 2019. And safeguards usually mean quotas for countries and specific producers in countries back to a certain year. And as a consequence, part of the demand is going to be freed up for the European suppliers. I remind you that it is the EU has already decided that for critical and strategic raw materials like the ones that we have in our portfolio, they want to have a back integration of 40%. And today, the market share of the EU producers is far below this level, is that 14%, fifteen %, probably worse in first quarter.

[Marco Levi, CEO & Executive Director at Ferroglobe]

So there is going to be a big impact on volume and capacity utilization. Now factoring at this stage how fast this demand is going to come to us is very difficult. And also because in the meantime, it's not clear if there are going to be some retroactive measures imposed to the different importers outside of the EU. I'm sorry for not being precise, but you have to assume that our capacity utilization in the second half of the year in Europe will go up and will go up favoring a much better cost absorption at all our plants.

[Kyle Mowery, Founder & Portfolio Manager at Grizzlyrock Capital LLC]

Yes, that makes sense. Thank you for the response. In terms of The United States with the ferrosilicon rulings, have you started to see the reduced imports flowing through now? And then how should we think about this, the cadence of pricing through 2025?

[Marco Levi, CEO & Executive Director at Ferroglobe]

Yes. Well, first of all, if you look at the import statistics of 2024, there is the expected dramatic reduction of imports from Russia. On the other side, there was a lot of inventory in U. S. Of Russian material based on our knowledge and understanding, which has impacted the overall pricing of phasing and the reduction of phasing price.

[Marco Levi, CEO & Executive Director at Ferroglobe]

Decisions on Kazakhstan, Malaysia and Brazil are pending with the Michelle department and they are expected, like I say, on March year. And when you put this the imports of these three countries together in 2023, they equalize to one third of the market. So there is uncertainty on these volumes. What is clear looking at the statistics is that in the last in September, the volumes of Kazakhstan, in particular as and Malaysia as well, have gone down almost to zero. So this is why we think that if you combine that with the weak steel production in the last months of the year in U.

[Marco Levi, CEO & Executive Director at Ferroglobe]

S, we think that inventories are getting depleted pretty quickly. So we should see an impact on ferro silicon demand. Our demand for ferro silicon in U. S, talking about ferroglove, is going up. We have signed two new contracts with customers who were not used to buy ferrosilicon from us.

[Marco Levi, CEO & Executive Director at Ferroglobe]

So this is another good sign.

[Kyle Mowery, Founder & Portfolio Manager at Grizzlyrock Capital LLC]

That's good to hear. Last question for me just since it came up on the potential new United States facility. What sort of rate of return would you want to see to go forward with that investment? What sort of is it a per ton type of an approach on pricing? I know you had talked about longer term volume contracts, but what sort of returns should shareholders expect should you choose to go forward with that investment?

[Marco Levi, CEO & Executive Director at Ferroglobe]

Yes. We would expect a much higher return than any previous investment that we have made in silicon metal. And the reason is that we think that we have the capabilities to build the most powerful in terms of performance, not in terms of energy consumption, the most powerful furnace that you can build in terms of output versus size versus energy consumption. But for sure, we are going to expect a return which is higher than our work and our cost of capital.

[Kyle Mowery, Founder & Portfolio Manager at Grizzlyrock Capital LLC]

Okay. Thank you very much.

[Operator]

Thank you. Due to time constraints, we will not be taking any further questions. And I would now like to hand back to Marco Levy for any closing remarks.

[Marco Levi, CEO & Executive Director at Ferroglobe]

Thank you. I want to emphasize Ferroglobe's resilience in being able to navigate successfully this uncertain market environment, while at the same time strengthening our balance sheet and positioning the company for growth. Thank you for participation. We look forward to hearing from you on our next call. Have a great day.

[Operator]

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

Participants

Executives

• Alex Rotonen, Vice President, Investor Relations
• Marco Levi, CEO & Executive Director
• Beatriz García-Cos Muntañola, CFO, IT & Principal Accounting Officer

Analysts

• Nick Giles, Senior Research Analyst at B.Riley Securities
• Martin Englert, Senior Equity Research Analyst - Metals & Mining at Seaport Research Partners
• Kyle Mowery, Founder & Portfolio Manager at Grizzlyrock Capital LLC