Q4 2022 Ferroglobe PLC Earnings Call
Good morning, ladies and gentlemen, welcome to foreclose fourth quarter and full year 2022 earnings call. At this time I'll purchase your phones are in a listen only mode. Later, we will conduct a question question and answer session on instructions will be given at that time.
Sorry reminder, at this conference call May be recorded Oh, well now like to turn the call over to any thyroid the Walla for clothes, Vice President of Investor Relations on corporate strategy you may begin.
Thank you.
Good morning, everyone and thank you for joining.
Fourth quarter.
Yeah.
22 conference call.
Joining me today.
Our Chief Executive Officer.
Beatrice Garcia cough.
Financial Officer.
Before we get started with some prepared remarks.
I'm going to read a brief statement.
At least on the flight to at this time.
Statements made by management during this conference call that a 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 federal gloves, most recent SEC filings.
The exhibits to those filings.
Available on our webpage federal Globe Dot com.
In addition, these discussion includes references to EBITDA.
Adjusted EBITDA.
Gross debt.
Dead and.
Adjusted diluted earnings per share.
Among other non ifr S measures.
Reconciliation of non Ifr's measures may be found in our most recent SEC filings.
At this time I would now like to turn the call or to Mark will ever be achieved executive officer.
Next lately.
Thank you and good morning, and good afternoon whoever he wants.
Before turning two hours 2022 results I would like to recognize that where people.
It is true that hard work and commitment.
Able to achieve the best.
Four months.
Our 100 year history.
Despite the global volatility and its impact on many industries were being resilient and continue to deliver stronger results.
This is a testament to the strength of our business model.
It is also clear indication of the confidence that our customers. So heavy now our ability to navigate through these challenging times.
For a combination of favourable prices operation allergy Litty commercial excellence and cost disciplined fair Bluff generated stronger results in 2022 with revenue EBITDA and free cash flow offsetting record is for the company.
Our business fundamental are solid and devalue creation plan that was initiated a couple of years ago has made the company stronger and more competitive.
The market opportunity for us is there even by the growing trend thoughts on insuring.
The transition to greener energy sources.
As a leading producer of silicon metal, we're well positioned to capitalize on high demand in markets, such as solar and battery.
They are ensuring movement or even by initiatives like the inflation reduction act and the U S and similar initiatives in Europe are having a significant impact on the criticality of silicon metal in the solar value chain.
This solidifies our position in the market.
This is a clear indicator of the growing demand for renewable energy and the increased focus on local sourcing and production.
It presents a unique opportunity for a company like ours.
Well positioned to take advantage of the strengths and deliver a strong results.
We are committed to driving a competitive advantage in the solar industry.
Our state of the art Silicon metal technology.
Our focus on efficient fairly design maximizing energy efficiency and providing access to advanced technologies not only improves our operations, but also reduces project for.
For our customers.
In addition to solar we also see substantial growth opportunities in the coming years or even primarily from batteries used in electric vehicles.
In the battery market Silicle matter provide significant advantages over gratify. The current stabbed are used in the battery Arnold's.
Including a dramatic increase in battery capacity and their adoption and charging time.
As this technology improves.
The industry is expected to see her happy the adoption, they're having strong growth in silicon metal for the foreseeable future.
Over the past two years.
We are focused on improving our business efficiency through cost reductions and increased capital efficiency positioning us well for future growth.
The value creation plan that we Lounged in 2020 is a transformational effect on our company not just in terms of how we operate but also in our ability to generate strong you'll be there.
As of December 31st 2022.
The value creation plan is generate the approximately $150 million in cost savings and additionally, $40 million and commercial excellence on a run rate basis.
By the end of 2023, we expect to reach our increased target of $225 million.
By continually improving our balance sheet and optimizing our capital structure, we're ensuring that we have the resources and the flexibility we need to capitalize on opportunities and navigate any challenges that may arise.
We are progressing we've hour could meet with the mandatory leaves working capita we are at least $55 million in the fourth quarter and we anticipate additional working capital rallies over the next two quarters. This earliest combined with BB that generation should lead us to become net cash positive during 2000.
2003.
While there is some uncertainty in the short term.
Our long term story is a robust.
We're confident in our ability to navigate these challenges eyrie main focus on delivering stronger results for our investors.
In the first quarter demand for our products decreased to the closed due to closures in European steel and aluminium sectors. As a result of higher energy prices, which caused our customers to lower their inventory levels.
We're seeing early signs of improvement, particularly in the automotive includes sections sectors, and we expect inventory levels to normalize in the near future driving demand for our products.
I would like to take a moment to light the exceptional work of our management team and successfully optimizing our energy costs.
True proactive communication with governments regulators energy providers and customers were being able to take advantage of opportunities in France to generate the revenues pro of compensation agreement with energy provider in queue for.
In addition, we have secured an extremely favorable energy content, providing low cost energy for our assets in France for the coming years.
We have a management team that is not only focus on delivering strong results, but also on finding innovative ways to improve our operations and we made a heads up.
The curve next slide please.
Let's focus on Silicon metal revenue was 140 $84 million in queue for down from $264 million in queue 30, a decline of 30%.
Adjusted EBITDA for this segment decline from $113 million in Q3 $289 million in queue for down 21%.
We have successfully achieved strong margin service over 30%.
Despite declining prices and production and notable improvement compared to historical levels.
This demonstrates our ability to control costs and respond to market demand the Wildcats serving margins.
Our silicon metal business was down due to a challenging market environment impacting both price and volume.
Volume declined 22%.
Surely in queue for to approximately 39500 metric tons.
Our average realized prize for silicon metal safe, because 11% compared to the previous quarter, resulting in a negative impact on EBITDA of $16 million.
Costs improved by $23 million relative to the per year quarter, primarily due to the energy compensation agreement in France and sealed to compensation. However.
However, this was partially offset by the increasing energy costs and raw materials.
During the fourth quarter various aluminum manufacturers in Europe shutdown due to high energy prices, resulting in decreased demand for civic overnight, though however, we are seeing some encouraging signs of demand for aluminium from the automotive sector.
Concern surround the economic outlook in queue for lead to low demand for our customers and the chemicals sector. We expect this week.
Persist until the late Q1.
Early cute too.
However.
We anticipate there are bound for silicon metal due to increased demand for a cynical in electronics medical cosmetics and consumer goods sled.
Slide six please.
Moving to Silicon base alloys revenue was $127 million in queue for down 29% of the per year quarter. Adjusted EBITDA for Q4 was $37 million down 38% from the third quarter.
Sales volumes declined 19% of the per year quarter.
Meg actively impacting EBITDA by $9 million, while average realized passing was down 13% over the same period negatively impacting EBITDA by $22 million.
Cost of the square tolerable relative to the per year quarter, mainly due to energy compensation, France of $8 million.
Two compensation of $2 million, which was partially offset by iron core price in Europe , which amounted to $2 million.
The demand for our silicon beta Lois as decrease due to ongoing weakness in the markets.
Particularly steel used in construction. Additionally, the rising energy prices in Europe as a result of the ink continued shutdowns of capacity among steel producers.
Europe as a significant change in the supply of federal silicon due to Slovakia being down in Russia being out of the market.
We see a lot of materials coming from <unk> in China negatively impacting the prize of non spatial degrades our strategy to focus on higher margin specialty and founder products has enabled us to improve margins compared to commodity grade silicon alloys.
Moving to slide seven let's move to manganese Aloys manga.
<unk> based eloisa revenue was $91 million, Singapore down 7% over the per year quarter ajar.
Adjusted EBITDA for Q4 was $20 million up 34% from the third quarter.
Adjusted EBITDA margins showed improvement in the fourth quarter, indicating positive momentum after adjusting from now provisions.
Sales volumes were opposite lightly over the per year quarter, having a negligible impact on adjusted EBITDA, while average realized passing was down 7% over the same period, which are negatively impacted EBITDA by $11 million.
Cost impact was positively influenced by the energy compensation agreement in France, which amounted to $11 million and the seal to compensation of $2 million.
The demand outlook remains court shows.
Areas out of weakness in steel.
Going conflict between Russia, and Ukraine at placed upward pressure on energy costs and caused patch of these are the option to 1.1 million tons of Ukrainian source materials, but the market has since made up for these losses, leading to a decrease in prices.
The current spread between alloy and or is around $700 per metric tons about this story can leverage of $150 per method.
The Gabon landslide has led to a rise in mind, danny's or prices, which potentially could cause a lower price to increase.
Now I will like to turn the cold over two batteries Sci cause our chief financial officer to Arabia, the financial results in more detail.
Thank you thank you Michael.
Will begin.
Bolcom has fallen on a flight model.
He's taking full setup.
Market combined with the volume 12 months from our value creation plan.
Tell us.
And the company Okay.
<unk> of too.
And record adaptability of 850.
A million dollars.
Yes.
Revenue for the fourth quarter.
$49 million.
Wow. Thank you for this.
<unk>.
Blood tests.
These sequential decline in the fourth quarter with Raven, my lower volumes and pricing across the portfolio. Thank.
Thank you for.
Well what areas.
Flat.
The third quarter.
This whole thing.
I'll look it up from him.
I said doesn't that sound.
Okay.
Some 48.
Quartet.
We saw a significant.
The levels of course during the fourth quarter.
Monarch.
Use our flexible that type of thing.
Production to lower.
Say again.
Rally.
Well, we will see.
And therefore of tomorrow.
Profitability.
In the fourth quarter.
Cats are $44 million.
Related to what.
Governing.
Yeah, I'd like to find any spontaneous Paul.
Okay.
The result of high energy prices.
Four six.
To my way.
<unk>.
Four.
I guess it EBITDA margin.
So.
<unk>.
Down as lightly so that they want the headache.
Despite market conditions.
But.
The cost of raw materials and energy consumption as a present.
That's what I'm, saying.
Pills to 49%.
To 67.
Anyway.
Pilgrim decent pills ma'am.
And opening and a lemonade somehow flexible.
Net profit for the full year.
Saudi Mary.
<unk>.
Compare.
In the dining area of $150 million.
For the fourth quarter.
Lots of it left plenty.
Compare the mountain.
Million dollars in the third quarter.
Our adjusted Dilaudid profit.
Two zero point 42 cents.
Four.
Cedar point 64 cents.
Let's see.
Slightly.
Our.
In the fourth quarter last 130 million dollar down so $185 million.
A decline upset at this time.
Michael.
Solid.
Roughly in line with the kissing.
Across our portfolio decline.
By email understand spatial thing in a negative impact of $50 million.
Well.
Volume has declined by 60% over the tire quote.
So.
$41 million.
Cost.
Of $46 million.
To the editor compensation machine <unk>.
11 please.
Ah.
For the full year.
$60 million.
Is $179 million.
Jessica.
Margins improve the 30%.
In 2021.
Had the biggest impact.
When I went to.
D V D S.
Driven by an increase of 59%.
The portfolio in 2022.
Something in the benefit of approximately $1 billion.
Higher cost.
In fact.
For the year.
<unk>.
$4 million.
Even higher <unk>.
Hi, yes.
Tyson.
Partially offset by energy companies makes any sense.
Of $50 million.
Please.
Q for with a cash balance of $600 million.
$237 billion in the <unk>.
Of $86 million.
My working capital beliefs.
The tape declined some $194 million.
In the third quarter to $137 million at the end.
The lowest level in the company history.
However.
Is primarily the result of cash generated during the quarter.
By the workings advertisement.
We are focused on continuing to reduce our leverage.
The net cash positive doing 2000 fantasy.
Makes it lightly.
During 2022.
Record operating cash so.
$405 million in free cash flow of $343 million.
This represents a significant improvement over 2021.
Operating cash flows.
A million dollars.
Free cash flow was negative $25 million.
In the fourth quarter, we generate operating cash flow.
18 million dollar.
So $55 million, Tennessee.
324 with $94 million.
$40 million in the third quarter with a $55 million release of working capital.
From investing activity, so capex in 2022 less negative $62 million.
Negative $24 million.
Anyway.
Increase in castle from investing activities. He said take with the war two highest cabinet.
Which was three then.
Investment in our.
<unk>.
<unk> into detail.
Plan to expand our Capex program.
Maintenance and invest in growth.
<unk> business I Nancy.
And lastly.
Some financing activities for 2022.
<unk> $130 million.
This includes the repayment of our Super senior debt coupon payment.
The fourth quarter.
Some financing activities like negative $8 million that is negative.
A $9 million clinical.
Clinton.
Next is likely.
As part of our overall strategy to reduce debt repaid $80 million some.
One of our Spanish proverb unknown.
In February 2010 D C.
We are actively exploring different options related to always see me.
With yoga techniques to optimize our copy that has stood there at.
At this time.
The call back over to Mark.
Thank you.
Hurting now to the corporate update on slide 16.
Our ability to develop out <unk> silicon Paypal provides numerous opportunities that will drive growth for the company in the coming years.
The solar market is a large and growing market that these comprised primarily of <unk>, which is the most common semiconductor material using solar sails.
Approximately 95% of the solar modules.
<unk> also plays an important part in the advancement of battery technology for electric vehicles.
Replacing gratified that silicon Indiana's of batteries provide significant advantages that will drive rapid adoption has the technology is perfected.
Technology enables 5% to 10% of the gratified to be replaced by Silicon. This makes is expected to increase dramatically over the next five years.
We are partnering with battery developers to refine these technology and have made significant progress.
We have started production and we are in the early stages of commercialization.
We expect to be a leading provider as these technologies adopted.
We are excited about this opportunity as we expected to generate emerges and strong growth for the foreseeable future.
Onshoring trends provide an additional driver for growth, we've increasing demand for critical materials to be produced closer tool.
Our global footprint puts us in a unique position to benefit from this trend.
We are capitalizing on the growing demand for silicon metal by expanding our capacity and announcing our global footprint with minimum capital investment in 2022, we successfully added 22000 tons of capacity.
About our plans we are currently in the process of adding an additional 55000 tonnes at our planting Polokwane South Africa.
We successfully restarted the first squirt in a simple acquiring November and completed.
Start of the second fitness in January .
Demonstrate our commitment to meeting the increased demand for silicon made in a sustainable and low cost method.
These facilities.
Physically located in are an important part of our global asset footprint.
Low cost plan and are serving customers locally in Europe , the United States, the Middle East and Asia.
Data enable asked to shift production to otherwise volatility in the energy markets as we have experienced in Europe .
In 2022, we published our first global <unk> report.
Being a significant milestone that demonstrates our commitment to improving our environmental performance and contributing to the green pills they should.
Our plan includes several key initiatives, we're focused on improving our operational efficacy to reduce our cable footprints reduce waste and increase our energy efficiency.
We're also focus on increasing our uses Java innumerable energy and we work to transition to clean energy, which we believe is essential to create a sustainable future.
For the first time, we are providing.
Guidance to give investors additional insight into our business performance.
We project to generate adjusted EBITDA of approximately 272 two under two.
Million dollars in 2043.
Given the current.
Activity from our customers and overall and markets.
We expect the first quarter to be down from Q4.
And represents the bottom of the current cycle, we anticipate an acceleration beginning in the second quarter.
Projections show fled through slightly lower volume in 2023.
We were 1% change in volume affecting EBITDA by approximately $8 million.
With that update I will turn to the call too over to the operator and open the line for questions.
Thank you.
Okay.
As a reminder to ask a question. Please press star one on one on your telephone and wait for your name to be announced.
Do we still you're requesting please press one on one again.
Once again, please press start one and one if you wish to ask a question.
<unk> compiler Q&A Ross.
We will now take the first question.
It comes from the line of Martin <unk> from Sea Port Research part next. Please go ahead. Your line is open.
Hello, Good afternoon, everyone.
Good afternoon Martin.
For the typical.
Guidance the annual EBITDA guidance 200 to 300 million could you discuss maybe some of the price or average price.
Volume assumptions it costs that are underlying that.
These are the indications that they can give you I mean, the we aspect.
<unk> volumes in 2023 about about 6%.
Lower volume.
Late that to the fact that we we are not being arriving our plans and problems in the first quarter.
In terms of pricing, we see silicone.
Rather stable.
A year.
Cause you know the level of silly comprise if this drive is much higher than in the previous quarters and their previous years in the previous cycle sorry.
While for alloys, we see or.
<unk> some price for recovery.
As we speak so we assume that there will be some appreciation of our alloy pricing during the year, leading to the demand the recovery in particular in Europe .
Concerning cost.
Most of their own materials.
Are are becoming more affordable.
We've <unk>.
Some exceptions.
<unk> as I mentioned in light Beach.
Is growing up it mainly to related to the then the in Gabon.
All is extremely volatile at least there'll be the worst call that we buy for for our services. So we.
We we don't see short term is significant.
The reduction and called and called price.
And energy picture varies.
Depending on the country buffet as you know we are contracted everywhere.
That would cost.
For Spain, but in Spain, now energy prices more affordable and we have already started production that some of our services.
[noise], thank you for that.
And I apologize the dial in the call is breaking up a little bit and I missed some of your comments about the.
It was the next 50 million benefit in France, because of songs energy credits rebates could you quickly recap that.
Four Q.
Yeah.
Benefit.
Francis is related to the to the way the contract works between us and the energy supplier. So we were in the position to consume less energy.
In France in in quarter for and as a consequence, we got compensated.
Based on the combat.
Okay.
And is that the.
On a forward looking basis.
And I know you're not planning on running yes, that's in France, one Q, but.
Is there anything else there are any other benefit either <unk> or any other point anticipated or.
Really available in 2023.
We we are supposed to be.
Competitive out of our asses.
In terms of cost position.
During Q2 Q3 so.
So.
2003.
We haven't changed our plans.
Our classic friends.
Beginning of the second.
Okay, and it looks like it could one final one here working calf relative to sales I believe it was.
9% this quarter I understand.
During the first [noise].
23, but any other details that you can share on that is that correct.
12122.
Yeah, well what I can tell you is that we we have a <unk>.
<unk>.
Target.
Action of 55 minutes. Thank you for but we expect a reduction between 90 and 120 millions due to working capital in the first quarter and then we will proceed with further actioning in queue to basically getting back to two more affordable.
Those who are working capitals, where am I where business.
Okay, and again, the target is 21% or maybe a little bit.
Some of the magazines or maybe you could use a couple.
Once a bump in the back half of the year.
While you're you're you're right I mean.
Of course, the the 21%.
Later too.
Ideally inventory levels with high level of sales at night prices.
What we expect to.
Do is run the silicon in silicon alloy business.
In the range of 21, 23% working capital Y manga and as long as we have seen that.
Due to the length of the cycle in Iowa, and the lack of our back integration probably require an addition of two or three points for working capital.
We are fine too, we're sharpening our pencils to to get to the right to live L. A is a is a moving target, but this is where we're going.
Thank you for all the details.
Those results.
Thank you my opinion.
Thank you.
We will not take the next question.
It comes from the line of <unk>. Please go ahead. Your line is open.
Thank you very much operator, and good morning, everyone, great great job on the quarter.
My first question is on the additional savings and commercial excellent opportunities you outlined 225 million at the end of this year and I'm wondering if you could maybe expand a bit on where you are seeing the additional opportunities.
Previously identified.
Savings <unk>. Thank you very much yeah.
Yeah.
As you know we started this program.
In 2020.
In the wild.
You implement the initiatives.
You do not capture the full daily during every year so.
There is a certain.
Our friend and we basically we have implemented all the initiatives and so while we have been able to capitalize in 2020 22 on the part of them, we expect to be able to implement the full program by 2000 2003.
And in particular.
Give you a little bit more granularity.
We we are factoring 75 millions throughout footprint optimization, we stopped production ish.
So part of our.
Production Monzo, we shutdown yoga a false all of these is given a 75 maintenance through their bottom line <unk>.
$70 million come from continuous plugged improvements.
I mentioned several time hour KTM programmer, which is about implementing technologies.
One of our furnace is to improve the yield an aromatase usage of each.
<unk>. So these are another $70 million $30 million.
Until now, but I think we will be able to to do much better.
From purchasing centralization as you know Lucas.
Lucas we have centralized most of our purchasing activities strategic grow materials services.
But basically energy.
So everything is centralized we get.
30 minutes south of that and we have calculated about $50 million coming from a commercial excellence and.
All of these initiatives if you sum up the numbers breaking into like 25 minutes.
That is very helpful. I really appreciate that at detail.
Going back to the annual 2023, EBITDA guidance range of 200, 7300, I believe you offer to sensitivity.
$8 million for a 1% change in volume wood.
Would you be able to offer.
Offer similar sensitivity on the pricing side.
Well, we we.
You put your finger in the in the right spot.
I mean, we we think that for 2023.
The key question.
He is.
Demand coming back like we aspect.
And as a consequence.
We are focused the sensitivity of an hour it'd be the more on volumes.
D C is.
The reason why we have given these these comments combine.
With the guidance of course.
Price, 1% on prices vary gives an impact which is bigger than the one in volumes on the other side based on my comments on pricing, we feel pretty comfortable.
About our pricing scenarios for 2023.
That is very helpful and I appreciate your confidence on that front, that's that's really good to hear.
I'll try to squeeze.
One last one and I'll go back into the queue on on the Silicon metal segment that in Q4 volumes declined margins expand it I I I assume that's related and mostly to the energy compensation you receive but anything.
Anything else you would add to that dynamic it's typically unusual to see in the sector. So appreciate and any tissue.
I mean.
I must say that.
Factories that.
What we told.
The investors.
<unk> of time.
All of our civic on makeup pricing.
Right I mean, we said.
Due to the the the the structure in the market.
Pricing is not gonna go back to the.
Prof of the previous cycles in D C.
The other element is the energy.
Compensation and then.
There were like we said in the presentation also have set the level of C O two compensation.
Impacting favorably the city called my test results.
In terms of in terms of cost input costs are still I like could commented before it mainly kohl's.
I appreciate all the color continue.
Thank you.
Thank you Lucas Thank you.
We will not take the next question.
It comes from the line of slow can kill Martina for Marina Capital. Please go ahead. Your line is open.
Hey, guys. Congrats my order.
You're just too positive cash position this year.
How should we think about the outlook for turning capital of the shareholders in terms of buybacks or dividends.
Any color on time.
Yeah.
Hey, no condition.
Speaking.
As you know our current indented, we don't have the ability to to pay a dividend, but that's weird executing on the on the radio.
Kind of.
Notes, we expect to have the ability.
To pay a dividend.
Right and then the company needs to define.
Policy to be able to to pay D. C D V dance and check my back.
Yeah.
Okay.
Thank you.
We will not take the next question.
It comes from the line of my column from 10 next. Please go ahead. Your line is open.
Yes. Good morning, two questions. The first one is I've been reading recent news from South Africa about widespread blackouts.
And lots of electricity shortages.
Is that is it a case, where where your plants are you're in an island sorta speak where your electricity grid is good.
There is.
The electricity grid outside of where your sourcing is where all the problems are.
Yeah, and thank you for the question.
Or shareware where morning during the situation.
In South Africa very closely.
Is also through that.
Today, we have not been suffering.
Any significant.
Issue.
So.
Energy tap.
Of course, when we add too.
Make the decision to restart polokwane.
We cover.
Our sales properly.
With the energy providers.
So.
At this stage.
Of course this equation is.
Particularly in Tennessee, South Africa, but at this stage we are include production.
14, and my last Saturday and.
<unk>.
Okay.
Does it are you continuing with the ramp up or because you'll be electric situation you might slow down the ramp up for now.
No.
We continue with the ramp up we are I'm picking up a full aquinas search fairness in April .
We have already contracted the volumes also for the third shortness so <unk>.
At the stages as pets.
Capacity sending.
Some time in the second quarter.
Okay, Alright, second actually I have I have two more quickly.
Second question is when I look at your sales volumes.
And not just Q for the Q3, clearly there's less demand clearly there's been destocking and also increased.
Imports from that you mentioned in China in Kazakhstan.
But when I look at.
[noise] volumes doubt so substantially.
Substantially.
And I look at the users.
Metals, there won't be down anywhere close to it I've been auto production is up.
In Europe and steel production is on the rise so.
What's your best guess as.
Two.
The percentage of the <unk> declined it simply from Destocking, because that will come back.
Right right and says why we we have you you have a perfect rebuilt.
The situation by the way.
My comment about Kazakh his son in China was related to federal Silicle not so cynical makeup.
But this is a detail.
<unk> outlook as to their supply chain is pretty empty.
And if you combine the supply chain, we've even named Margaret.
Thought of demand.
The effects should be that we should count on on solid.
Volumes. Thank you to in Q3 D sphere.
Okay.
And so I'm sorry.
Last question a follow up to an earlier question about dividends.
Not so much related to dividends itself, but you're sitting on a lot of cash now granted today.
You're earning a decent return on cash with interest rates, where they are what.
Look at the bonds, maybe not very recently bought it was trading at below the the buyout rate for the next anniversary.
Giving your cash is so large why not just get ahead of the bonds and just go on the market and just start buying some of it back because.
Save money, because one thing I notice is.
You know your interest expense.
Is quite high in queue for relative to a net debt and that's obviously because you're you're dead 9%.
You're already three per cent on cash.
Right. So you have a you have a mismatch of interest rate differential.
Why not try and close that a little bit more.
Taking some cats are we paying that.
You and I are line we are.
Q thing exactly this line.
We will update.
Investors as soon as we have we have made other significant progress.
We are.
Implementing this and you should be very soon.
Week.
Alright sounds good.
Thank you.
Okay. Thank you.
Thank you.
We will not take the next question.
It comes from the line of Brian They will be your phone by please go ahead. Your line is open.
Good afternoon, Marco and Beatrice.
Couple of quick questions few Marco.
As you look at 2023.
Sort of all the various puts and takes do you view that as more of a mid cycle result that you think the company can generate or is this more trough results in your opinion.
Wow.
I mentioned that we see Q1 being.
And then we Ah we expect the demand.
At least in Europe cautiously romping around picking up.
So.
This is the way we seat.
Our our guidance on on EBITDA gives you.
Good.
A good indicator of what we have been doing to to secure profitability of this company.
Also also during the trough of this vehicle.
Understood that's helpful.
<unk>, just as we think about longer term.
Two questions sort of at the best structure.
First you know.
If you do conductor refinancing where you're looking to have some prepayable that or you want something more fixed in place and how should we think about what your your target leverages over a cycle.
Yeah no. Thank you for the for the question, Sir Let me take one step back. So we say that we went totally.
Accurate us at that level of hair to kind of maintenance.
At the moment the majority <unk> right [laughter] <unk> 81 per cent of our depth into tennis.
Right right. The main parties see if he can.
At 9.6 75.
And as Michael less less and less.
So we have at the moment executing.
On the on the senior at note going far away, we need to see what is the best option.
For setup, Luckily, we want to run the company at least an approximate the level of the contaminant and then the type of debt instrument.
Will depend on how the market.
Or the next day Cortes beneath the sea.
Anthony Satanic bottom Eagle what is going on.
Fair enough I appreciate the perfect. Thank you so much.
Yeah.
Thank you.
We will not take the next question.
It comes from the line is Andrey Colin from Green. Please go ahead. Your line is open.
Hi, Thanks for taking my question.
I was just going back to the presentation from February of 2021.
Where the estimate some $470 million or 2023.
Recently lower.
Metal prices at least my environment, and a lower cost savings expectations. I was just wondering if you guys could bridge.
That that meant a few delta between the guidance for 2023.
I'm doing the kinds of 2023 and why are you on that presentations.
And also.
Is there a hidden for inventory coming down in the in the first quarter.
Given that word decently above 21% sales kind of working capital right now.
Thanks.
Let me start from the second question because that.
Already answered the same questions.
Two two Martin from C fourth.
We.
February with youth working capita 50 $55 million in the quarter for we are expecting.
More significant reduction in Q1.
I I gave up.
Ainge.
India, a P $100 million.
And in Q1, and we'd go down during quarter too.
To to move store.
21, 23% working copies, how long the revenue for silicon in silicon.
Basil always can a couple of more of a lawyer.
On on on manganese due to the long cycle that we have been longer knees.
Ah regarding.
The bridge versus.
Versus the cleansing presentation.
I I think.
I don't have the.
I don't have it with me.
But.
Mmm.
They are the key elements is R. One.
We have over believers on our value creation plan because at the beginning of the value creation plan. The we aspect that one on the the creation of it by for $180 million they'd be that well, we are creating more than that whether $25 million.
And what we couldn't see at that time was devoted palace evolution in the market, which was related to getting out of the covered period.
Was.
Progress to wearing them.
Customers, who are looking for supply security and pricing has been has been evolving.
At at the iron level that what we could for a test.
Yeah.
Sort of my point.
Like the car payment and the pricing or or in your favor I, Nancy EBITDA guidance lower than.
But that Guy was so maybe I'm missing something.
Trying to.
Reconcile that kind of.
Why.
The.
The the better guy than states into account.
The effects, though divider creation plan. The fact that we have lower volumes in the first quarter.
Our assumption on on pricing.
Thank you.
We would not take the next question.
It comes from the line after Ms. Massey from audience <unk>. Please go ahead. Your line is open.
Good morning, just two quick questions. The first is.
What is the Capex outlook for 2023 and.
And the second has to do with the with the 93 age notes, which a lot of people who've reference but as.
As it relates to the 19th Regionalist features that I should notice off hand, I apologize I don't.
But do they restrict dividends does the notes restrict dividends down to the equity.
Yes.
Suddenly the current and dental content.
Dividend and as I was.
Before we are executing on the on our CD adults.
And this will allow us to have the ability to.
To pay a dividend of course and the company needs to define what is it.
Policy in terms of David and 10 and diabetes.
<unk>.
Referring to Capex.
We plan in 2023, the save my mental Capex.
For for maintenance and Es and tennis.
The level of 75 million statement month of Capex that we have.
Mm spent the last year.
As previously communicated we I've been starving our assets of Capex and so we are bringing them up to the level that we want with reimbursement program of 75 millions for three years on top I mentioned, the the the growth opportunities that.
We have so we are.
We are going to invest in.
More Capex D C. Here in a very judicious way, meaning that any kind of Grove Capex is gonna be.
Ah analyzed.
And and presented to the board.
For a clue about.
So we are staged gating.
The topics two <unk> 2023.
Thank you the rest of my questions have already been asked some thank you and have a great day.
Thanks.
Thank you I would now like to hand back over to the speakers will finally remarks.
Thank you that concludes our fourth quarter and full year 2022 earnings call.
I am proud of our performance counters out in 2022.
Have demonstrated that pharoah globe is able to perform whilst transforming.
I totally believe that there is significant value to be unlawful unlocked, making federal globe, a compelling investor proposition.
Thank you again for your participation we look forward to hearing from you on the next go have a great day.
That does conclude our conference for today. Thank you for participating you may own disconnect.
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