• Q2 sales of $418.5 million, up 15.8% compared to $361.4 million in Q1 2021, and up 67.4% compared to $250.0 million in Q2 2020
• Adjusted EBITDA of $34.1 million, up 54.5% compared to $22.1 million in Q1 2021, and up 52.1% compared to $22.4 million in Q2 2020
• Q2 marks a return to positive net profit of $0.7 million compared to net loss of ($68.5) million in Q1 2021, and ($14.0) million in Q2 2020
• Positive operating cash flow of $37.8 million and a return to positive net cash flow of $21.6 million
• Working capital increase of marginally $0.6 million in Q2 2021; increased efficiency supporting flat level of working capital despite the ramp-up in activity
• Improved production costs mainly driven by higher fixed cost absorption, and focused initiatives targeting key technical metrics
• Completion and funding of financiang transactions (extension of bond maturity and issuance of the new super senior secured notes and equity) on July 30, 2021

LONDON, Aug. 23, 2021 (GLOBE NEWSWIRE) — Ferroglobe PLC (NASDAQ: GSM) (“Ferroglobe”, the “Company”, or the “Parent”), a leading producer globally of silicon metal, silicon-based and manganese-based specialty alloys, today announced results for the second quarter 2021.

Q2 2021 Earnings Highlights

In Q2 2021, Ferroglobe posted a net profit of $0.7 million, or $0.01 per share on a fully diluted basis. On an adjusted basis, the Q2 2021 net profit was $3.0 million, or $0.02 per share on a fully diluted basis.

Q2 2021 reported EBITDA was $31.9 million, up from ($18.9) million in the prior quarter. On an adjusted basis, Q2 2021 EBITDA was $34.1 million, up from adjusted EBITDA of $22.1 million in Q1 2021. The Company reported an adjusted EBITDA margin of 8.1% for Q2 2021, compared to 6.1% for Q1 2021.

	Quarter Ended				Quarter Ended				Quarter Ended				Year Ended				Year Ended
$,000 (unaudited)	June 30, 2021				March 31, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Sales	$	418,538			$	361,390			$	250,004			$	779,928			$	561,226
Net profit (loss)	$	730			$	(68,517	)		$	(14,035	)		$	(67,787	)		$	(63,093	)
Diluted EPS	$	0.01			$	(0.40	)		$	(0.07	)		$	(0.39	)		$	(0.35	)
Adjusted net income (loss) attributable to the parent	$	2,964			$	(18,172	)		$	(11,064	)		$	(15,208	)		$	(48,777	)
Adjusted diluted EPS	$	0.02			$	(0.12	)		$	(0.07	)		$	(0.10	)		$	(0.29	)
Adjusted EBITDA	$	34,088			$	22,069			$	22,413			$	56,157			$	4,796
Adjusted EBITDA margin		8.1	%			6.1	%			9.0	%			7.2	%			0.9	%

Marco Levi, Ferroglobe’s Chief Executive Officer, commented, “The second quarter results reflect a strong improvement in our overall performance and marks the return to profitability, an important goal for this year. Both the top line and bottom line continue to strengthen due to successful execution of the strategic plan, as well as the overall robustness across our all of our markets.” Dr. Levi added, “As we look towards the back half of the year, we will keep the momentum going on all fronts to capitalize on the market opportunities and successfully execute some critical initiatives underpinning the strategic plan. Collectively, these efforts support the focus on improving the core of our business and ensuring a stronger and more profitable Company.”

Cash Flow and Balance Sheet

Cash generated from operations during Q2 2021 was $37.8 million, and the Company returned to positive net cash flow of $21.6 million during the quarter.

Working capital only increased by $0.6 million, from $334.3 million as of June 30, 2021 to $333.7 million as of March 31, 2021. Increased emphasis on operational and financial efficiencies resulted in this relatively flat level of working capital despite the ramp-up in activity.

Net debt was $358 million as of June 30, 2021, up from $334 million as of March 31, 2021. This is primarily attributable to the initial $40 million tranche raised during the quarter, of an aggregate $60 million of the new super senior secured. The subsequent $20 million tranche was closed and funded in the third quarter.

Beatriz García-Cos, Ferroglobe’s Chief Financial Officer, commented, “This marks an important quarter for the Company. The return to positive net income and positive net cash flow validates the on-going efforts to turnaround our financial performance. However, we remain far from reaching the full potential of this business. Our top line is not fully benefiting from the current market prices across our product portfolio as we have fixed price contracts which begin to roll off during the back half of the year. Furthermore, we had a number of one-off, non-recurring expenses which also adversely impacted our margins. We remain extremely focused on cost management, particularly to off-set inflationary pressures on energy pricing, mainly in Europe. These factors will collectively drive an acceleration in our performance and cash generation during the remainder of the year.” Ms. García-Cos added, “The comprehensive financing we completed in July now provides the financial support to execute on important elements of the transformation plan and ensures a capital structure that provides the operational flexibility to capitalize on this strong market backdrop.”

COVID-19

COVID-19 has been and continues to be a complex and evolving situation, with governments, public institutions and other organizations imposing or recommending, and businesses and individuals implementing, at various times and to varying degrees, restrictions on various activities or other actions to combat its spread, such as restrictions and bans on travel or transportation; limitations on the size of in-person gatherings, restrictions on freight transportations, closures of, or occupancy or other operating limitations on work facilities, and quarantines and lock-downs.

As a result of this pandemic and the strict confinement and other public health measures taken around the world, the demand for our products in the second and third quarters of 2020 was reduced significantly compared with the first and fourth quarters of the year. During the fourth quarter of 2020, demand level for our products increased to levels similar to those prior to the outbreak. In first and second quarter of 2021, demand for our products has increased even further than in the fourth quarter of 2020. However, COVID-19 has negatively impacted, and will in the future negatively impact to an extent we are unable to predict, our revenues.

Subsequent events

On July 30, 2021, the Company announces the occurrence of “Transaction Effective Date” under Lock-up agreement dated March 27, 2021 and completion of the financing transactions. The financing consisted of:

(i)      Extension of the maturity date of the Notes from March 31, 2022 to December 31, 2025

(ii)     Issuance of $60 million of new senior secured notes, and

(iii)     $40 million of equity issuance

Discussion of Second Quarter 2021 Results

The financial results presented for the second quarter are unaudited.

Sales

Sales for Q2 2021 were $418.5 million, an increase of 15.8% compared to $361.4 million in Q1 2021.

		Quarter Ended			Quarter Ended						Quarter Ended						Six months Ended			Six months Ended
		June 30, 2021			March 31, 2021			Change			June 30, 2020			Change			June 30, 2021			June 30, 2020			Change
Shipments in metric tons:
Silicon Metal			67,322			61,275		9.9	%			47,884		40.6	%			128,597			101,205		27.1	%
Silicon-based Alloys			65,222			61,604		5.9	%			39,479		65.2	%			126,826			100,411		26.3	%
Manganese-based Alloys			68,323			72,609		(5.9	)%			55,290		23.6	%			140,932			129,014		9.2	%
Total shipments*			200,867			195,488		2.8	%			142,653		40.8	%			396,355			330,630		19.9	%
Average selling price ($/MT):
Silicon Metal		$	2,347		$	2,285		2.7	%		$	2,215		5.9	%		$	2,317		$	2,213		4.7	%
Silicon-based Alloys		$	1,830		$	1,665		9.9	%		$	1,537		19.0	%		$	1,750		$	1,499		16.7	%
Manganese-based Alloys		$	1,414		$	1,174		20.5	%		$	1,088		30.0	%		$	1,290		$	1,022		26.2	%
Total*		$	1,862		$	1,677		11.0	%		$	1,591		17.0	%		$	1,770		$	1,531		15.6	%
Average selling price ($/lb.):
Silicon Metal		$	1.06		$	1.04		2.4	%		$	1.00		5.9	%		$	1.05		$	1.00		4.7	%
Silicon-based Alloys		$	0.83		$	0.76		9.2	%		$	0.70		19.0	%		$	0.79		$	0.68		16.7	%
Manganese-based Alloys		$	0.64		$	0.53		21.0	%		$	0.49		30.0	%		$	0.59		$	0.46		26.2	%
Total*		$	0.84		$	0.76		11.0	%		$	0.72		17.0	%		$	0.80		$	0.69		15.6	%

__________________

* Excludes by-products and other

Sales Prices & Volumes By Product

During Q2 2021, the average selling prices across our product portfolio increased by 11.0% versus Q1 2021. During the quarter, the average selling prices of silicon metal increased 2.7%, silicon-based alloys prices increased 9.9%, and manganese-based alloys prices increased 20.5%.

Overall sales volumes in Q2 increased by 2.8% versus the prior quarter. During the quarter, the shipmentsof silicon metal increased 9.9%, silicon-based alloys shipments increased 5.9%, and manganese-based alloys shipments decreased 5.9% versus Q1 2021.

Cost of Sales

Cost of sales was $267.9 million in Q2 2021, an increase from $250.2 million in the prior quarter. Cost of sales as a percentage of sales decreased to 64.0% in Q2 2021 versus 69.2% for Q1 2021. This improvement is primarily attributable to higher sales and a reclassification from this account to Other operating expenses to conform the group presentation.

Other Operating Expenses

Other operating expenses amounted to $57.6 million in Q2 2021, an increase from $36.8 million in the prior quarter. The increase in these expenses was mainly due to the impact of the European free CO2 rights for 2021. The free allowance of these CO2 rights are recognized in Other Operating Income.

Net Loss Attributable to the Parent

In Q2 2021, net profit attributable to the Parent was $1.9 million, or $0.01 per diluted share, compared to a net loss attributable to the Parent of $67.4 million million, or ($0.40) per diluted share in Q1 2021.

Adjusted EBITDA

In Q2 2021, adjusted EBITDA was $34.1 million, or 8.1% of sales, up 54.5% compared to adjusted EBITDA of $22.1 million, or 6.1% of sales in Q1 2021. The increase in the Q2 2021 Adjusted EBITDA is primarily driven by the improvement in average realized prices across the product portfolio.

Conference Call

Ferroglobe management will review the first quarter during a conference call at 9:00 a.m. Eastern Time on August 24, 2021.

The dial-in number for participants in the United States is +1-877-293-5491 (conference ID: 7458760). International callers should dial +1-914-495-8526 (conference ID: 7458760). Please dial in at least five minutes prior to the call to register. The call may also be accessed via an audio webcast available at

https://edge.media-server.com/mmc/p/hqshmr5i

About Ferroglobe

Ferroglobe is one of the world’s leading suppliers of silicon metal, silicon-based and manganese-based specialty alloys and ferroalloys, serving a customer base across the globe in dynamic and fast-growing end markets, such as solar, automotive, consumer products, construction and energy. The Company is based in London. For more information, visit

http://investor.ferroglobe.com

.

Forward-Looking Statements

This release contains “forward-looking statements” within the meaning of U.S. securities laws. Forward-looking statements are not historical facts but are based on certain assumptions of management and describe the Company’s future plans, strategies and expectations. Forward-looking statements often use forward-looking terminology, including words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “forecast”, “guidance”, “intends”, “likely”, “may”, “plan”, “potential”, “predicts”, “seek”, “target”, “will” and words of similar meaning or the negative thereof.

Forward-looking statements contained in this press release are based on information currently available to the Company and assumptions that management believe to be reasonable, but are inherently uncertain. As a result, Ferroglobe’s actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements, which are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company’s control.

Forward-looking financial information and other metrics presented herein represent the Company’s goals and are not intended as guidance or projections for the periods referenced herein or any future periods.

All information in this press release is as of the date of its release. Ferroglobe does not undertake any obligation to update publicly any of the forward-looking statements contained herein to reflect new information, events or circumstances arising after the date of this press release. You should not place undue reliance on any forward-looking statements, which are made only as of the date of this press release.

Non-IFRS Measures

Adjusted EBITDA, adjusted EBITDA margin, adjusted net profit, adjusted profit per share, working capital and net debt, are non-IFRS financial metrics that, we believe, are pertinent measures of Ferroglobe’s success. Ferroglobe has included these financial metrics to provide supplemental measures of its performance. The Company believes these metrics are important because they eliminate items that have less bearing on the Company’s current and future operating performance and highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures.

INVESTOR CONTACT:

Gaurav Mehta

Executive Vice President – Investor Relations

Email:

[email protected]

MEDIA CONTACT:

Cristina Feliu Roig

Executive Director – Communications & Public Affairs

Email:

[email protected]

Ferroglobe PLC and Subsidiaries
Unaudited Condensed Consolidated Income Statement
(in thousands of U.S. dollars, except per share amounts)
	Quarter Ended				Quarter Ended				Quarter Ended				Year Ended				Year Ended
	June 30, 2021				March 31, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Sales	$	418,538			$	361,390			$	250,004			$	779,928			$	561,226
Cost of sales		(267,939	)			(250,165	)			(153,291	)			(518,104	)			(396,651	)
Other operating income		37,105				1,913				10,160				39,018				17,928
Staff costs		(63,197	)			(95,267	)			(48,912	)			(158,464	)			(104,009	)
Other operating expense		(93,171	)			(36,835	)			(35,953	)			(130,006	)			(76,020	)
Depreciation and amortization charges, operating allowances and write-downs		(23,523	)			(25,285	)			(27,459	)			(48,808	)			(56,127	)
Other (loss) gain		608				66				86				674				(586	)
Operating profit (loss)		8,421				(44,183	)			(5,365	)			(35,762	)			(54,239	)
Net finance expense		(11,178	)			(15,864	)			(16,693	)			(27,042	)			(33,177	)
Financial derivatives gain		—				—				—				—				3,168
Exchange differences		3,237				(9,314	)			2,634				(6,077	)			5,069
Profit (loss) before tax		480				(69,361	)			(19,425	)			(68,881	)			(79,179	)
Income tax benefit		250				844				5,390				1,094				16,086
Profit (loss) for the period		730				(68,517	)			(14,035	)			(67,787	)			(63,093	)
Profit attributable to non-controlling interest		1,180				1,135				1,928				2,315				3,087
Profit (loss) attributable to the parent	$	1,910			$	(67,382	)		$	(12,107	)		$	(65,472	)		$	(60,006	)
EBITDA	$	31,944			$	(18,898	)		$	22,094			$	13,046			$	1,888
Adjusted EBITDA	$	34,088			$	22,069			$	22,413			$	56,157			$	4,796
Weighted average shares outstanding
Basic		169,298				169,291				169,254				169,295				169,252
Diluted		169,298				169,291				169,254				169,295				169,252
Profit (loss) per ordinary share
Basic	$	0.01			$	(0.40	)		$	(0.07	)		$	(0.39	)		$	(0.35	)
Diluted	$	0.01			$	(0.40	)		$	(0.07	)		$	(0.39	)		$	(0.35	)

Ferroglobe PLC and Subsidiaries
Unaudited Condensed Consolidated Statement of Financial Position
(in thousands of U.S. dollars)
		June 30,			March 31,			December 31
		2021			2021			2020
ASSETS
Non-current assets
Goodwill		$	29,702		$	29,702		$	29,702
Other intangible assets			87,556			25,891			20,756
Property, plant and equipment			587,602			593,355			620,034
Other non-current financial assets			5,329			4,984			5,057
Deferred tax assets			62			620			—
Non-current receivables from related parties			2,377			2,345			2,454
Other non-current assets			13,960			11,765			11,904
Total non-current assets			726,588			668,662			689,907
Current assets
Inventories			239,750			228,145			246,549
Trade and other receivables			283,990			276,633			242,262
Current receivables from related parties			3,105			3,063			3,076
Current income tax assets			8,826			12,277			12,072
Other current financial assets			1,003			1,004			1,008
Other current assets			57,219			45,028			20,714
Current restricted cash and cash equivalents			6,149			6,069			28,843
Cash and cash equivalents			99,940			78,298			102,714
Total current assets			699,982			650,517			657,238
Total assets		$	1,426,570		$	1,319,179		$	1,347,145
EQUITY AND LIABILITIES
Equity		$	299,469		$	298,974		$	365,719
Non-current liabilities
Deferred income			37,570			2,733			620
Provisions			107,501			106,220			108,487
Bank borrowings			4,871			5,042			5,277
Lease liabilities			12,995			11,942			13,994
Debt instruments			386,060			347,310			346,620
Other financial liabilities			37,608			37,530			29,094
Other non-current liabilities			16,955			16,727			16,767
Deferred tax liabilities			23,956			26,834			27,781
Total non-current liabilities			627,516			554,338			548,640
Current liabilities
Provisions			102,269			97,521			55,296
Bank borrowings			85,015			73,965			102,330
Lease liabilities			8,709			7,596			8,542
Debt instruments			10,858			2,656			10,888
Other financial liabilities			23,732			24,983			34,802
Payables to related parties			6,131			5,042			3,196
Trade and other payables			189,449			171,052			149,201
Current income tax liabilities			513			3,947			2,538
Other current liabilities			72,909			79,105			65,993
Total current liabilities			499,585			465,867			432,786
Total equity and liabilities		$	1,426,570		$	1,319,179		$	1,347,145

Ferroglobe PLC and Subsidiaries
Unaudited Condensed Consolidated Statement of Cash Flows
(in thousands of U.S. dollars)
	Quarter Ended				Quarter Ended				Quarter Ended				Year Ended				Year Ended
	June 30, 2021				March 31, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Cash flows from operating activities:
Profit (loss) for the period	$	730			$	(68,517	)		$	(14,035	)		$	(67,787	)		$	(63,093	)
Adjustments to reconcile net (loss) profit to net cash used by operating activities:
Income tax (benefit) expense		(250	)			(844	)			(5,390	)			(1,094	)			(16,086	)
Depreciation and amortization charges, operating allowances and write-downs		23,523				25,285				27,459				48,808				56,127
Net finance expense		11,178				15,864				16,693				27,042				33,177
Financial derivatives loss (gain)		—				—				—				—				(3,168	)
Exchange differences		(3,237	)			9,314				(2,634	)			6,077				(5,069	)
Net loss (gain) due to changes in the value of asset		(243	)			(21	)			—				(264	)			—
Gain on disposal of non-current assets		—				(43	)			—				(43	)			—
Share-based compensation		673				213				704				886				1,426
Other adjustments		(366	)			(2	)			(85	)			(368	)			586
Changes in operating assets and liabilities														—				—
(Increase) decrease in inventories		(8,770	)			11,446				(12,471	)			2,676				39,106
(Increase) decrease in trade receivables		(8,625	)			(41,692	)			45,537				(50,317	)			129,369
Increase (decrease) in trade payables		16,184				26,152				(4,875	)			42,336				(30,379	)
Other		8,214				41,179				(16,286	)			49,393				(27,884	)
Income taxes paid		(1,178	)			(57	)			3,522				(1,235	)			13,641
Net cash provided (used) by operating activities		37,833				18,277				38,139				56,110				127,753
Cash flows from investing activities:
Interest and finance income received		128				35				85				163				339
Payments due to investments:														–
Acquisition of subsidiary		—				—				—				—				—
Other intangible assets		(40,997	)			(3,486	)			—				(44,483	)			—
Property, plant and equipment		(3,245	)			(5,683	)			(5,056	)			(8,928	)			(9,662	)
Other		—				—				—				—				—
Disposals:						—								—				—
Disposal of subsidiaries		—				—				—				—				—
Other non-current assets		543				—				—				543				—
Other		—				—				—				—				—
Net cash (used) provided by investing activities		(43,571	)			(9,134	)			(4,971	)			(52,705	)			(9,323	)
Cash flows from financing activities:
Dividends paid		—				—				—				—				—
Payment for debt issuance costs		(11,093	)			(6,598	)			(279	)			(17,691	)			(1,855	)
Repayment of hydro leases		—				—				—				—				—
Proceeds from debt issuance		40,000				—				—				40,000				—
Increase/(decrease) in bank borrowings:						—								—				—
Borrowings		149,945				127,690				—				277,635				—
Payments		(144,983	)			(157,464	)			(20,680	)			(302,447	)			(65,560	)
Proceeds from stock option exercises		—				—				—				—				—
Amounts paid due to leases		(3,157	)			(2,856	)			(2,418	)			(6,013	)			(4,879	)
Other amounts received/(paid) due to financing activities		—				—				—				—				3,608
Payments to acquire or redeem own shares		—				—				—				—				—
Interest paid		(3,333	)			(17,015	)			(1,131	)			(20,348	)			(19,955	)
Net cash (used) provided by financing activities		27,379				(56,243	)			(24,508	)			(28,864	)			(88,641	)
Total net cash flows for the period		21,641				(47,100	)			8,660				(25,459	)			29,789
Beginning balance of cash and cash equivalents		84,367				131,557				144,489				131,557				123,175
Exchange differences on cash and cash equivalents in foreign currencies		81				(90	)			93				(9	)			278
Ending balance of cash and cash equivalents	$	106,089			$	84,367			$	153,242			$	106,089			$	153,242
Cash from continuing operations		99,940				78,298				124,876				99,940				124,876
Current/Non-current restricted cash and cash equivalents		6,149				6,069				28,366				6,149				28,366
Cash and restricted cash in the statement of financial position	$	106,089			$	84,367			$	153,242			$	106,089			$	153,242

Adjusted EBITDA ($,000):
	Quarter Ended				Quarter Ended				Quarter Ended				Year Ended				Year Ended
	June 30, 2021				March 31, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Profit (loss) attributable to the parent	$	1,910			$	(67,382	)		$	(12,107	)		$	(65,472	)		$	(60,006	)
Profit (loss) attributable to non-controlling interest		(1,180	)			(1,135	)			(1,928	)			(2,315	)			(3,087	)
Income tax (benefit) expense		(250	)			(844	)			(5,390	)			(1,094	)			(16,086	)
Net finance expense		11,178				15,864				16,693				27,042				33,177
Financial derivatives loss (gain)		—				—				—				—				(3,168	)
Exchange differences		(3,237	)			9,314				(2,634	)			6,077				(5,069	)
Depreciation and amortization charges, operating allowances and write-downs		23,523				25,285				27,459				48,808				56,127
EBITDA		31,944				(18,898	)			22,093				13,046				1,888
Restructuring and termination costs		2,144				40,967				—				43,111				—
Energy:  France		—				—				(55	)			—				70
Staff Costs:  South Africa		—				—				—				—				155
Other Idling Costs		—				—				375				—				2,683
Adjusted EBITDA	$	34,088			$	22,069			$	22,413			$	56,157			$	4,796

Adjusted profit attributable to Ferroglobe ($,000):
	Quarter Ended				Quarter Ended				Quarter Ended				Year Ended				Year Ended
	June 30, 2021				March 31, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Profit (loss) attributable to the parent	$	1,910			$	(67,382	)		$	(12,107	)		$	(65,472	)		$	(60,006	)
Tax rate adjustment		(404	)			21,352				826				20,948				9,250
Impairment		—				—				—				—				—
Restructuring and termination costs		1,458				27,858				—				29,315				—
Energy:  France		—				—				(37	)			—				48
Energy: South Africa		—				—				—				—				—
Staff Costs:  South Africa		—				—				—				—				105
Other Idling Costs		—				—				255				—				1,824
Tolling agreement		—				—				—				—				—
Adjusted profit (loss) attributable to the parent	$	2,964			$	(18,172	)		$	(11,064	)		$	(15,208	)		$	(48,777	)

Adjusted diluted profit per share:
	Quarter Ended				Quarter Ended				Quarter Ended				Year Ended				Year Ended
	June 30, 2021				March 31, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Diluted profit (loss) per ordinary share	$	0.01			$	(0.40	)		$	(0.07	)		$	(0.39	)		$	(0.35	)
Tax rate adjustment		(0.00	)			0.12				0.00				0.12				0.05
Restructuring and termination costs		0.01				0.16				—				0.17				—
Energy:  France		—				—				(0.00	)			—				0.00
Energy: South Africa		—				—				—				—				—
Staff Costs:  South Africa		—				—				—				—				0.00
Other Idling Costs		—				—				0.00				—				0.01
Tolling agreement		—				—				—				—				—
Adjusted diluted profit (loss) per ordinary share	$	0.02			$	(0.12	)		$	(0.07	)		$	(0.10	)		$	(0.29	)