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: investor.relations@ferroglobe.com

MEDIA CONTACT:

Cristina Feliu Roig

Executive Director – Communications & Public Affairs

Email: corporate.comms@ferroglobe.com



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	)