Investor Update

February 1, 2021

Ferroglobe continues to drive operational improvement against a challenging backdrop

Cost cutting

initiatives have

helped offset

recent financial

performance

impacted by the ongoing market volatility

A new senior

leadership team has taken swift action to navigate the current environment, focusing on greater operational flexibility and cost management

  • For most of 2020, Ferroglobe PLC ("Ferroglobe" or the "Company") experienced a challenging operating backdrop; performance has been partially offset by the ongoing cost saving initiatives as well as other operational measures
    • The business backdrop was, in part, "demand driven", with many customers proactively curtailing capacity due to uncertainty and changing purchasing behaviour caused by COVID-19
    • Despite prevailing market conditions, pricing across the key products improved on the back of: i) production adjustments across the industry outpacing demand declines; ii) positive contribution of index contracts; and iii) weakening of the US Dollar versus the Euro
    • Where possible, Ferroglobe attempted to balance production with the decrease in demand. However, contractual rigidities as well as other practical constraints meant that the Company continues to operate with a larger asset footprint than desired
  • Since Q4 2020 the market appears to have stabilised with key pricing levels slowly rising. In time, Ferroglobe hopes to benefit from the improving backdrop, but given the ongoing uncertainty, as well as the ordinary lag in repricing contracts the Company expects a more gradual recovery over the medium term
  • In response to the well known challenges since 2019, Ferroglobe strengthened its senior leadership in 2019/2020 to help reposition the business towards profitability
  • Since joining Ferroglobe, the new team has successfully navigated several immediate challenges presented early in their tenure:
    • Further right-sizing of the operational footprint (which remains ongoing) to match demand
    • Continued implementation of cost saving initiatives to support sustainable EBITDA recovery
    • COVID-19contingency planning and business continuity measures to preserve the business prospects in a unprecedented and uncertain environment
    • Normalization of working capital levels
    • Focus on cash generation and cash preservation
  • Despite the challenging backdrop, the Company has demonstrated a dramatic improvement in performance, and expects to deliver positive Adjusted EBITDA for FY2020

1

A highly supportive transaction under discussion that provides the necessary ingredients of both time and capital to pursue Ferroglobe's strategic plan

New strategic

plan will

accelerate a

return to

profitability and

ensures

competitiveness through the cycle

c.70% of

Ferroglobe's

unsecured

noteholders have

indicated their support for the strategic plan

  • Management has also been very focused on reviewing the current business profile in the context of the evolving competitive landscape to determine the best path to profitability and long term robust competitiveness through the cycle
    • A third-party consultant has been engaged throughout 2020 to facilitate a critical assessment of our markets and benchmark the competitiveness for Ferroglobe across its products and geographies
    • Collectively, Ferroglobe and its advisers have identified a number of operational, procedural, and financial value drivers across various functional areas which management expects will unlock significant value
    • The critical driver of profitability rests on the ability to improve Ferroglobe's operational footprint whilst retaining sufficient flexibility to increase production in response to favourable demand
    • In parallel, management will continue to drive organizational change through the adoption of best practices and a cohesive internal culture
  • At full realization of the strategic plan in 2024, the Company expects an incremental run-rate Adjusted EBITDA amounting to $180m (pages 17 - 18)
  • A meaningful investment is required to unlock the potential of Ferroglobe which would be included as part of the balance sheet strengthening described below. Notwithstanding the proposed new investment and recent encouraging performance, the global pandemic continues to create uncertainty for the business and management is satisfied that through the contemplated transaction operations will remain robust
  • The Company and an Ad Hoc Group of Ferroglobe's existing $350m Senior Unsecured Notes representing c.70% (the "SUNs" and the "Ad Hoc Group"), have had constructive discussions in relation to a transaction which, if implemented, is anticipated to include:
    • An extension of its $350m SUNs to December 2025 (from March 2022)
    • A major recapitalization of the business with $100m of additional liquidity (including a new equity issuance) which guarantees sufficient funding to implement the strategic plan
    • An equity allocation of 3.75% to all supporting holders of the SUNs1
  • The Company is negotiating with key stakeholders the injection of equity that is required to implement the proposed plan and is aiming to enter into a binding agreement with the Ad Hoc Noteholders and equity providers reflecting the outcome of the discussions as soon as possible
  • In parallel, management is delighted to announce that the Company has successfully completed the refinancing of its securitization program through a non-recourse / bankruptcy remote factoring program which will further enhance and normalize working capital within the business
  • Please refer to the Group's announcement "Ferroglobe Announces Discussions with Ad Hoc Group of Noteholders and Key Financial Partners" (the "Announcement") available on the Group's website, for further information and to the Disclaimer at the end of this presentation

2

Notes: (1) To the extent a scheme is used to implement the Transaction, the 3.75% equity fee would become payable to all SUN holders

The stage is set for Ferroglobe's recovery

The transaction being discussed would consist of a maturity extension of the SUNs until December 2025 and $100m new money to support the

implementation of the strategic plan

Amended Notes

Summary of key proposed terms

Item

Agreed Terms

Description

Total

SUNs exchanged for new secured

$350m

debt supported by a robust

Quantum

security package

Interest

9.375%

No incremental cost to the

Company

Maturity

3 year extension / 5 years to

2025

maturity providing runway for

Extension

recovery

Up to 1%

cash and

Fee payable to consenting SUN

Consent Fee

3.75% post-

holders1

Transaction

equity

Stakeholder "Wins"

  • Given the challenging (but improving) business environment persistent in the silicon- and manganese-based alloys markets since 2019, and further precipitated by the current COVID crisis, the proposed transaction would be structured to achieve a number of fundamental strategic aims:

Eliminate the near-term refinancing risk in 2022 by extending the debt to

2025

Provide $100m of aggregate new capital to support the implementation of

the strategic plan

Reaffirm Ad Hoc Group commitment to the long-term success of the

business

Improved security package to ensure minimal business disruption in any

New Capital

Total

Quantum

$100m

including:

1) New

$40m

Equity

2) New

$60m

Debt

  • To support current business needs and recovery post-COVID including reinvestment in the business
    • Fully backed rights or warrants issue (if implemented)
    • Open to all shareholders
    • Super senior debt raise
    • Backstopped by Ad Hoc Group
    • Open to all SUN holders

worst-than-expected downside scenario where a future restructuring is

required

Strengthened management team would have all the key ingredients (time,

capital and a validated strategic plan) to drive business success

Source: Company information, management forecasts.

3

Notes: (1) To the extent a scheme is used to implement the Transaction, the 3.75% equity fee would become payable to all SUN holders

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Ferroglobe plc published this content on 01 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 February 2021 14:07:00 UTC.