Ferroglobe PLC

Thanks, Marvie. Good morning, everyone, and thank you for joining FerroGlobe's third quarter 2024 conference call. I want to apologize for the delay. Our operator had technical issues with their phone line, so we apologize. Joining me today are Marco Levy, our chief executive officer, and Beatriz Garcia-Coss, our chief financial officer. Before we get started with some prepared remarks, I'm going to read a brief statement. Please turn to slide two at this time. 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 Ferroglobe's most recent SEC filings and exhibits to those filings, which are available on our website 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. Reconciliation of non-IFRS measures may be found on our most recent SEC filings. Marco.

Thank you, Alex. Thanks for joining us on the call today. We appreciate your interest in Ferroglobe. Q3 was another solid quarter. We reported adjusted EBITDA of $60 million, up from $58 million in the prior quarter, driven by higher realized pricing, improved spreads in manganese alloys, and lower energy costs. On contracted volumes, prices usually lag indexes by two or three months. depending on the product. However, end market demand remain muted and pricing continues to soften, which as discussed last quarter, will put pressure on our fourth quarter results. Given our results to date and current outlook, we are reaffirming 2024 guidance of 150 to $170 million. We expect to benefit from improved ferro-silicon volumes and prices in the US as a result of the ferro-silicon trade cases we initiated earlier this year. This favorable decision by the US Department of Commerce resulted in duties on all ferro-silicon imports from Russia, Kazakhstan, Malaysia, and Brazil. More specifically, in June, the U.S. imposed anti-dumping and countervailing duties of 283% and 748%, respectively, on all ferro-silicon imports from Russia. For Brazil, Kazakhstan, and Malaysia, preliminary anti-dumping duties up to 22%, 6%, and 9%, respectively, were announced on November These actions will greatly reduce the imports of artificially low-priced ferro-silicon and level the playing field, benefiting local producers such as FerroBlue. As a result of these new policies, we expect to see an improvement in the U.S. phasing market in early 2025 as inventory in the channel is cleared and new orders are placed. Our flexible footprint provides resilience, enabling us to manage the short-term environment effectively and adjust production to match current demand. Part of this adjustment includes curtailing production in France approximately one month early to maximize the rebate from our French energy agreement. As part of our continued effort to improve the company's performance, We recently started implementing a new SNOP process, so-called sales and operation planning process, which focuses on demand planning, optimizing raw material purchases, production, logistics, and sales. This will allow us to operate Forever Globe in a more integrated way with lower cost and lower working capital, enhancing our financial performance and cash We continue to move forward with our long-term brownfield expansion plans to increase our silicon metal capacity in the U.S. to capture the iron demand that we expect to materialize from solar and lead batteries in the coming years. This demand is forecasted by CRU to grow by nearly 140,000 tons to 365,000 tons by 2029. In addition to increased capacity, the state-of-the-art furnace is expected to be the most efficient and cost competitive in North America. The furnace will incorporate Ferroglobe's technological know-how and expertise accumulated over the decades as the leading silicon metal producer in the West. We are currently on track to file a permit application in the next few months. As a reminder, the approval process takes approximately 18 months, with construction taking an additional 24 months. We anticipate end markets improving in the second half of 2025, except US phasing market, which is expected to improve starting in the first half as a result of the mentioned trade case. According to the World steel organization, the global steel demand in 2025 is forecast to rebound by more than 3% excluding China. The aluminum market is also expected to see better conditions in the second half as interest rates continue to decline and now the construction industry should begin to grow. A Bloomberg analyst forecast a 3.3% increase in the global aluminum demand in 2025. We're also excited to report that we agreed to supply silicon metal to a new large customer in the Middle East for the renewable energy initiative, highlighting our strong market position and success in expanding our solar supply chain presence. This is a significant opportunity for us to accelerate growth going forward. In September, we paid our quarterly dividend of 1.3 cents per share in the third quarter. And we also executed a small portion of our stock buyback program and established a 10B5 share pre-purchase plan. Our soon to be issue third ESG report highlights our commitment and progress on multiple fronts. We commit to a decarbonization plan to reduce our combined Scope 1 and Scope 2 carbon emissions by at least 26% by 2030, compared with the 2020 baseline. Also, we are shifting to clean, cost-effective biocarbon at our Savon silicon plant to help achieve those carbon reduction goals. The new biocarbon production plant is expected to be operational by 2026 and funded with substantial assistance from the Spanish government. In addition, we have made significant progress in silico metal traceability, encompassing the entire value chain from raw material to final products.

Next slide, please.