Good morning, ladies and gentlemen and welcome to the Ferroglobe's Fourth Quarter Full Year 2024 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. You may begin.

Thanks, Sonia [ph]. Good morning, everyone and thank you for joining Ferroglobe's fourth quarter and full year 2024 conference call. Joining me today are Marco Levi, our Chief Executive Officer; and Beatriz García-Cos, our Chief Financial Officer. Before we get started with our prepared remarks, I'm going to read a brief statement. Please turn to Slide 2 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 the exhibits to those filings which are available on our web page 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 Levi, 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 24 and 25. We hope to see you there. Marco?

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 $1.6 billion and adjusted EBITDA of $154 million and free cash flow of $164 million. We used our strong cash flow generation to repay the remaining senior secured notes. Eliminating these notes saves us $32 million in annual interest. And in the first quarter of 2024, we became net cash positive for the first time in Ferroglobe's history and maintain our strong balance sheet throughout the year. This 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 2024 and are increasing it by approximately 8% in the first quarter of 2025. In addition, we began our share repurchase program in the third quarter which we will continue to execute selectively in 2025. We also intend to continue complementing our discretionary repurchases with a 10b5-1 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. It is clear that governments are taking these measures seriously. And this heightened 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…

Thank you, Beatriz. Moving to the key takeaways on Slide 16. Ferroglobe 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.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 FeSi price in Europe has picked up in recent weeks. We foresee broader improvement in the second half of 2025. Ferroglobe has positioned the company for long-term success by making strides in developing advanced uses for silicon, including a partnership with Coreshell and implementing S&OP tools to increase efficiency and lower working capital. Operator, we are ready for questions.

[Operator Instructions] And the first question comes from Nick Giles from B. Riley Securities.

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?

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. and in Europe. So let's say that first quarter, like Beatriz mentioned, is going to be particularly tough because we start from very low prices, extremely low volumes and the usual opportunity issue of having our French plant down in the first quarter, right? So -- and then for 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. So if you look at the low side of the guidance is a sort of conservative forecast based on today's situation. The higher end 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 towards the range that we have mentioned, $100 million, $170 million.

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: Yes. Hi Nick, this is Beatriz 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 million. This is the number that you have to keep in your mind, if this makes sense.

Got it. No, that's very helpful, Beatriz. 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? And alongside this, if you'd have any updates as it relates to the brownfield expansion?

Okay. So just to try to stay focused, we firmly believe in silicon penetrating much more substantially than 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 Coreshell but we work with a number of players, particularly in U.S. And I think that the level of progress is amazing. It's just 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. And for our business is impacted by the current investigation on the imports on solar cells and modules in U.S. that is expected to be concluded sometime in April this year 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. 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 production on cells and modules. 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 a few months. And then we expect to get the permit in a timeframe of 1.5 years 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.

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? I know, Beatriz, you mentioned a working capital release of $50 million, if I heard you correctly. Beatriz García-Cos: Thank you for the question. Nick, this is Beatriz speaking. So just to recap, so we bought in 2024, almost 600,000 shares. And up to now, we have been continuing on Q1 to buy some shares, right? I think we continue -- we plan to continue the opportunistic approach to the share buyback. And as we have been commenting on the previous quarters, Nick, there 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 opportunistic approach to the share buyback. So hopefully, this year as we release working capital, etcetera, as you said, we can do a little bit more.

And the next question comes from Martin Englert from Seaport Research Partners.

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 million low end of the guidance range?

We do expect that because there is also a 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. But anyway, even keeping the current conditions, we expect to achieve at least the bottom of the range that I have mentioned.

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

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

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

Okay. Can you walk me through the contribution of the quarterly French energy credit for 2024, just going through 1 through 4Q I believe you said earlier, it was $21 million for 4Q and what's targeted for 2025? Beatriz García-Cos: Hi Martin, this is Beatriz 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 million or $61 million. In the Q4, the impact -- the P&L impact is $24 million, right? And from a cash perspective, we got already in 2024 $32 million, south of $60 million of the rest in January 2025.

And what are you factoring into the guidance for the credit for 2025? Beatriz García-Cos: 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 -- starting 1st of January 2026 and we expect to get a very good contract.

And the next question comes from Kyle Mowery from GrizzlyRock Capital.

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 ton of your European production?

You mean you asked for price per ton impact. Is this your question?

The question is production cost per ton in Europe.

Okay. Well, the -- let me say that we don't know which measures EU 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 the EU is going to propose. But they mentioned safeguards in their announcement on December 19. 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. It is 14%, 15%, probably worse in first quarter. 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.

Yes, that makes sense. 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 '25?

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 FeSi and the reduction of FeSi price. Decisions on Kazakhstan, Malaysia and Brazil are pending with [indiscernible] department and they are expected, like I say, on March 21 this year. And when you put 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 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.S., we think that inventories are getting depleted pretty quickly. So we should see an impact on ferrosilicon demand. Our demand for ferrosilicon in U.S., talking about Ferroglobe is going up. We have signed two new contracts with customers who are not used to buy ferrosilicon from us. So this is another good sign.

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?

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 WACC and our cost of capital.

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

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.

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