Ferroglobe PLC

As a reminder, this conference call may be recorded. I would now like to turn the call over to Alex Sertonen, Ferroglobe's Vice President of Investor Relations. You may begin.

Thanks, Nadia. Good morning, everyone, and thank you for joining Ferroglobe's first quarter 2025 conference call. Joining me today are Marco Levy, our Chief Executive Officer, and Beatriz Garcia-Cos, 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 Fairglobe's most recent SEC filings and exhibits to those filings, which are available on our website at fairglobe.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 IFRS measures. Reconciliation of non-IFRS measures may be found in our most recent SEC filings. Before I turn the call over to Marco, our Chief Executive Officer, I want to announce that we'll be participating in the B. Reilly Securities Conference in California on May 21st and 22nd. We hope to see you there. Marco?

Thank you, Alex, and thank you all for joining us today. We really appreciate your continued interest in Ferroblo. As we noted during our fourth quarter call, Market conditions have remained challenging, significantly impacting our first quarter results. We saw continued declines in realized prices and weak demand across key segments. In particular, silicon metal, our largest segment, experienced a 27% drop in volume. Additionally, the U.S. silicon metal index pricing as of March 31st was 9% quarter over quarter and 22% from the third quarter. This was the primary driver of our first quarter negative adjusted EBITDA of $27 million. That said, we believe that we are at or near the bottom of the current cycle. Looking ahead, we anticipate a strong adjusted EBITDA recovery in the second quarter followed by continued momentum in Q3. We expect to deliver positive adjusted EBITDA in the second quarter. Accordingly, we are maintaining our full year 2025 guidance. Several regulatory trade measures are currently being introduced to curb the influx of low priced imports that have been disrupting market dynamics and suppressing prices negatively impacting our volumes. We expect these developments to stabilize the market and create a more constructive environment in the quarters ahead. Let me walk you through some of the key trade measures. In the U.S., The Department of Commerce announced its final determination in the anti-dumping and countervailing duty investigation of all ferro-silicon imports from Russia, Malaysia, Kazakhstan, and Brazil, cheating on fair pricing practices and subsidies that have harmed domestic producers. The newly imposed final duties are substantial, including the basic 10% tariff imposed on all countries, Russia's combined anti-dumping and countervailing duty are 1,042%, Kazakhstan range from 33% to 281%, Brazil from 14% to 73%, and Malaysia from 17% to 51%, all effective as of March 28. These actions are expected to significantly improve the U.S. ferro-silicon market in both the near and long term. Imports from these four countries accounted for approximately 140,000 tons in 2023, representing 71% of total U.S. imports. While all domestic producers will benefit from this shift, Ferroglobe is particularly well positioned as the largest producer with operations that are nearly 100% backwards integrated. That said, we expect a short lag as existing channel inventories are drawn down before demand begins to accelerate. Initial signs confirms this trend with U.S. phasing prices firming since the beginning of April. We believe this will result in a healthier and more balanced market. In Europe, progress has been made to counteract the impact of subsidized imports. On December 19, the European Commission launched a safeguard investigation into silicon metal, silicon-based alloys, and manganese alloys, which is expected to benefit all our product segments. The investigation is now completed with the European Commission working on its final recommendation. This will then be shared with the EU members, requiring approvals from at least 15 of the 27 countries representing 65% of the population. We believe this is a strong case, and we are optimistic that a favorable decision will be rendered. A provisional ruling is expected by the end of June, with any associated measures effective immediately. These trade actions and safeguards, both in the US and Europe, are expected to begin benefiting the industry by the third quarter and have a positive lasting impact on our business. In addition, the US silicon metal producers filed a new petition on April 24th to stop unfairly priced silicon imports from Angola Australia, Laos, Norway, and Thailand. This petition is seeking significant anti-dumping duties of up to 337% and additional countervailing duties. The Commerce Department is scheduled to initiate the investigation by May 14 with a preliminary ITC determination expected by June 9 of this year. Ferroglobe, as the largest producer in North America, would be a significant beneficiary of a positive rolling. As you know, there is a lot of uncertainty in various markets around the world as different tariff policies are being contemplated. While this poses a significant burden on exporters and importers, Ferroglobe benefits from its globally distributed facilities, which allow us to supply products locally and, in turn, avoid potential tariffs, giving Ferroglobe a competitive advantage over imported products. Besides the macro issues, we continue to focus on things that we can control. I will discuss a few of them. Sales and operational planning, SNOP, is a key initiative that will help us improve our demand forecasting and enhance our supply planning accuracy. This will enable us to manage working capital more effectively while improving our ability to deliver products more efficiently. We've made great progress on this front as evidenced by our strong inventory reduction in the first quarter. Our plan is to fully implement the S&OP by the end of 2025. Second, we are strengthening our commercial execution capabilities to make our sales organization more agile and effective. As part of this streamlining, we are optimizing our customer coverage to serve customers and segments better while breaking down silos and driving better collaboration across teams as one Ferroglobe. Our goal is to align our sales efforts with the S&OP process to capitalize on market opportunities as they arise. Finally, despite challenging market conditions in the first quarter, we successfully generated positive free cash flow by efficiently managing our working capital highlighting the resilience of our operating model. We use this free cash flow to pay our quarterly dividend, which was increased by 8% in our repurchase shares, which we believe remain significantly undervalued. Next slide, please. As communicated on our last call, we expected the first quarter to be difficult with weak demand and soft prices. resulting in a negative adjusted EBITDA. Lower overall shipments and prices drove a 16% decline in revenue. The actual first quarter adjusted EBITDA of negative $27 million is in line with our budget. Despite the poor performance, we were able to generate $5 million of free cash flow in the quarter. Next slide, please. Moving to our segment update, I will start with silicon metal on slide five. As expected, the first quarter was weak with silicon metal shipments declining 27 percent due to weak demand, idle operation in France, and uncertainty related to trade measures and tariffs. Another factor impacting our volumes was a significant increase in imports into the U.S. and Europe. Imports from Brazil, Australia, Malaysia, Norway, Thailand and Laos into the U.S. grew by 68,000 tons in 2024 over 2023. Europe also experienced a surge of silicon imports caused by a collapsing polysilicon market in Asia. We expect this headwind until the Asian polysilicon market recovers or safeguards become effective. Within the silicon segment, the chemical sector was also challenging as a result of increased low-priced imports to Europe. On the positive side, we are gaining traction in the aluminum market. We believe the first quarter marked the trough of this cycle and anticipate improved shipments in the second quarter with further volume pickup in the second half of the year. Increased imports also impacted pricing, which declined by 7% in Europe and 12% in the US. This makes the proposed anti-dumping and countervailing duty measure in the US against Angola, Australia, Laos, Norway, and Thailand, and use safeguards imperative for securing a robust domestic supply chain for critical industries. Next slide, please. The silicon-based alloys market is exhibiting positive trends with first quarter volumes up 9% over the fourth quarter. This improvement was driven by an increase of 38% in North America and 3% in Europe. Both of these regions experienced an uptick in steel production in March. While prices remained relatively flat during the first quarter, we see initial signs of the positive impact from the US phase A decision. Our dedicated effort to acquire new customers and regain past customers is paying off. Another positive sign is that the index prices have improved by 17% since the beginning of April. This bodes well with the coming quarter. We expect additional firming of prices and incremental volumes as the impact of the US-based case becomes more pronounced. The upcoming EU safeguard decision expected in June is anticipated to have a similar impact in Europe. Slide seven, please. Our manganese segment has been our strongest segment recently with solid demand continuing in the first quarter. Unfortunately, we were unable to meet this demand due to a delay in receiving manganese ore, which negatively impacted our volumes. As a result of these delays, we expect to make up for those lost tons in the second quarter with a substantial volume improvement. Overall, the manganese demand environment is quite constructive and potentially even stronger as we wait for the outcome of the EU Safeguard decision. Now, I would like to turn the call over to Beatriz Garcia-Cos, our Chief Financial Officer, to review the financial results in more detail. Beatriz.