Q4 2023 Ferroglobe PLC Earnings Call
Yeah.
Operator: Good morning, ladies and gentlemen, and welcome to Ferroglobe's fourth quarter and full year 2023 earnings call. At this time, all participants are in a listen-only mode.
Speaker Change: Good morning, ladies and gentlemen, and welcome to server groups fourth quarter and full year 2023 earnings call. At this time, all participants are in a listen only mode.
Operator: Later we will conduct a question and answer session, and instructions will be given at that time. As a reminder, this conference call may be recorded. I would now like to turn the call over to Alex Rotenand, Ferroglobe's Vice President of Investor Relations. You may begin. Thank you, Heidi.
Speaker Change: We will conduct a question and answer session and instructions will be given at that time as a reminder, this conference call maybe recorded.
Speaker Change: I would now like to turn the call over to Alex well to them.
Alex: I have a clubs vice president of Investor Relations you may begin.
Alex: Thank you Heidi.
Alex Rotenand: Good morning, everyone, and thank you for joining Ferroglobe's fourth quarter and full year 2023 conference call. Joining me today are Marco Levy, our Chief Executive Officer, and Beatriz Garcia-Cas, our Chief Financial Officer. Before we get started with our prepared remarks, I'm going to read a brief statement; please turn to slide two at this time. Statements made by management during this conference call that are forward-looking are based on current expectations. Factors that could cause actual results to differ materially from these forward-looking statements can be found in Ferroglobe's most recent SEC filings and exhibits to those filings, which are available on our webpage at ferroglobe.com. In addition, this discussion includes reference to Ibiram and Justice Yves Vidal, a job that grows fat, net debt, and adjusted diluted earnings per share, among other non-IFRS Reconciliation of non-IFRS measures may be found in our most recent SEC filing. At this time, I would like to turn the call over to Marco Levy, our Chief Executive Officer. Thank you, Alex, and good morning, good day, and good evening to everyone.
Alex: Good morning, everyone and thank you for joining Sarah Gold's fourth quarter and full year 2023 conference call.
Alex: Joining me today are Michael Levine, our Chief Executive Officer.
Alex: Garcia Casas, our Chief Financial Officer.
Speaker Change: Before we get started with our prepared remarks I'm going to read a brief statement. Please turn to slide two at this time.
Speaker Change: Statements made by management. During this conference call are forward looking are based on current expectations factors that could cause actual results to differ materially from these forward looking statements can be found in <unk>. Most recent S E C filings and exited exhibits to those five.
Speaker Change: Those which are available on our webpage at favorable dot com.
Speaker Change: In addition, this discussion includes reference to EBIT.
Speaker Change: That's EBITDA.
Speaker Change: Adjusted gross debt.
Speaker Change: Net debt.
Speaker Change: Adjusted diluted earnings per share among other non I O R. S measures.
Speaker Change: A reconciliation of non ifr as measures maybe found in our most recent SEC filings.
Speaker Change: At this time I would like to turn the call over to Mark Hurley, Our Chief Executive Officer.
Mark Hurley: Thank you Alex and good morning, Good day, and good evening to everyone. Thanks for joining us on the call today.
Marco Levy: Thanks for joining us on the call today. We appreciate your interest in Ferroglobe. We are very pleased with our strong execution in 2023, where we improved our operations, strengthened our balance sheet, and posted solid financial results of $315 million in adjusted dividends. While our end markets were extremely challenging in 2023, we focused on things that were within our control to position the company for the long term. I've discussed a couple of the highlights of our execution and strategy.
Mark Hurley: We appreciate your interest in Ferro Globe.
Mark Hurley: We are very pleased with our strong execution in 2023, where we improved our operations strengthen our balance sheet and posted solid financial results of $315 million of adjusted EBITDA.
Mark Hurley: While our end markets, whereas timely challenging in 2023, we focused on things that were within our control to position the company for the long term success.
Mark Hurley: I'll discuss a couple of the highlights of our execution and strategy.
Marco Levy: Then Beatriz will discuss the great strides we have made in improving our balance sheet a little later. Overall, operations performed at a high level in 2020. Our European plans set a new historical record for opening, and efficiency as measured by kilowatt hours per ton improved by more than three percent.
Mark Hurley: <unk> will discuss the great strides we have made in improving our balance sheet a little later.
Mark Hurley: Overall operations.
Mark Hurley: Operations performed.
Mark Hurley: In 2023.
Mark Hurley: L. P M plans set an historic high record for opening.
Mark Hurley: Efficiency as measured by kilowatt hours per ton improving by more than 3%.
Marco Levy: In the third quarter, we completed a strategic acquisition of a high quality quartz mine located in South Carolina, which will ensure access to quartz needed to produce high quality silicon metal in our U.S. based silicon metal production plant, aligning with our strategy to grow our advanced silicon metal business. We signed a term sheet for a global joint venture with a leading battery material company in Europe to develop advanced EV battery materials using silicon in the end. We also signed an MOU with a US-based advanced battery solutions company to push the next generation of silicon-rich battery technology. As part of this venture, we are currently testing a promising nanolayer coating technology that not only increases the performance and range of the DV battery but also lowers the cost of battery manufacturing.
Mark Hurley: In the third quarter, we completed the strategic acquisition of high quality quartz mine located in South Carolina.
Mark Hurley: Which will ensure access to courts needed to produce high quality silicon metal.
Mark Hurley: Our U S based silicon metal production plans.
Aligned with our strategy to grow our advanced silicon metal business, we signed the term sheet for a global joint venture.
Mark Hurley: We have a leading battery material company in Europe to develop advanced EV battery materials using silicon, Indiana.
Mark Hurley: We also signed an Mou with a U S based advanced battery solutions company.
Mark Hurley: <unk> the next generation of Silicon reach battery technology.
Mark Hurley: As part of this venture.
Mark Hurley: We are currently testing promising nano laser coating technology.
Mark Hurley: Not only increases the performance in the range of DB battery.
Mark Hurley: It's also lowers the cost of battery manufacturing.
Marco Levy: The silicon-based EV battery market is expected to grow to 150,000 tons globally by 2030. We will provide additional updates in the near term. In 2023, we also took action to protect our market. Working with U.S. legislators, we introduced a bipartisan bill in Congress that imposes a 35% tariff on ferro-silicon imports from Russia and Belarus.
The silicon based EV battery market is expected to grow to 150000 tonnes globally by 2030.
Mark Hurley: We'll provide additional updates in the near term.
Mark Hurley: In 2023, we also took action to protect our markets.
Mark Hurley: Working with you as legislators that we have to introduce a be part b part is a bill in Congress.
Mark Hurley: It's 35% tariff on ferrosilicon imports from Russia and Belarus.
Marco Levy: If not, this legislation is expected to have a positive impact on pricing, as Russia is the largest importer of ferrosilico to the U.S. We signed our first PPA in Spain during the year and have since added additional PPAs, which now comprise roughly 20% of our needs for 2024 and beyond. To enhance our ability to increase production in Spain, which has suffered from uncompetitive energy prices over the past couple of years, and increase the resilience and flexibility of our global footprint. In response to the spike in energy prices in 2022, we executed a multi-year energy agreement with a French energy company that enabled us to generate an incremental $186 million in EBITDA in 2023. This rebate was in exchange for optimizing our production in France to minimize our power consumption during the winter months.
Mark Hurley: If passed.
Mark Hurley: This legislation is expected to have a positive impact on pricing.
Mark Hurley: Russia is the larger import a fair cyclical into the U S.
Mark Hurley: We signed our first PPA in Spain during the year and they have since added additional ppas.
Mark Hurley: Which now comprise roughly 20% of our needs for 2024 and beyond.
Mark Hurley: We announced our ability to increase production in Spain.
Mark Hurley: It suffered from uncompetitive energy prices over the past couple of years, increasing resilience and flexibility of our global footprint.
Mark Hurley: In response to the Spike in energy prices in 2022.
Mark Hurley: It's acute at a multiyear energy agreement with French energy company that enable us to generate an incremental $186 million in EBITDA in 2023.
Mark Hurley: These are rebate worthiness change for optimization for optimizing our production in France to minimize our power consumption during the winter months.
Mark Hurley: While the market in 2023 was very challenging.
Mark Hurley: We are seeing some signs that provide us.
Mark Hurley: Optimism for 2024.
Mark Hurley: There's still a lot of uncertainty in the market, but we are seeing some improvements in pricing.
Mark Hurley: You asked silicon metal prices appear to have bottomed in December and have actually increased in late January.
Marco Levy: While the market in 2023 was very challenged, we are seeing subtle signs that give us optimism for 2024. There's still a lot of uncertainty in the market, but we are seeing some improvements in price. U.S. silicon metal prices appear to have bottomed in December and have actually increased in late January. The U.S. Silicon Metal Price Index increased from its recent low in early December of $140 per pound to $149 in early February, or up approximately six percent.
Mark Hurley: Silicon metal price index increase we're mid <unk> and low in early December $140 per pound to 149 in early February.
Mark Hurley: Or up approximately 6%.
Mark Hurley: European price movements were even more pronounced.
Mark Hurley: Increasing from the low $2049 per ton in late September.
Mark Hurley: Approximately $2360 per ton in November two 2909 in early February an increase of 23% in three months.
Mark Hurley: We believe that European prices increased in part due to supply constraints as a result of a fire at a major silicon plant in Norway and shipping disruptions in their etsy.
Marco Levy: European price movements were even more pronounced, increasing from the low $2,049 per ton in late September to approximately $2,360 per ton in November and to $2,909 in early February, an increase of 23% in three months. We believe that European prices increased in part due to supply constraints as a result of a fire at a major silicon plant in Norway and shipping disruptions in the Red Sea. Looking at market pricing and associated production costs during those tough periods, it appears that the industry was operating at break-even at best, which is unsustainable. We believe marginal producers were operating at a loss, leading them to reduce capacity, thus improving the supply-demand dynamics, ultimately driving higher prices. There are signs of a cycle, as it relates to solar energy.
Mark Hurley: Looking at market pricing and associated production costs during the trough periods.
Mark Hurley: Appears that the industry was operating at breakeven at best which is sustainable.
Mark Hurley: We believe margin of producers were operating at a loss leading them to reduce capacity, thus improving the supply demand dynamics ultimately driving higher prices.
Mark Hurley: There are signs of a cycle trough.
Mark Hurley: As it relates to solar.
Mark Hurley: We continue to position the company to take advantage of onshoring trends that are becoming a bigger focus on governments in the U S and Europe.
Mark Hurley: Fair Globe is leading worldwide producer of silicon metal is setup to be a significant beneficiary of these trends.
Mark Hurley: As an example of our market leadership, we recently signed a long term supply agreement with longyi the world leader in the solar value chain to supply them with traceable silicon metal that can be sold in the U S to its growing solar market within the confines of yoga wear.
Mark Hurley: Forced Labor Prevention Act.
Mark Hurley: FX Chinese SaaS to the U S. The.
Mark Hurley: The main region of silicon metal in polysilicon production in China in China has seen Yang where many of <unk> people reside.
Mark Hurley: According to <unk> estimates the <unk> area accounts for approximately 40% of Chinese silicon metal production.
Mark Hurley: Our significant advantage is that we can provide price at a level not seen Yang silicon metal to China, and Asia, which can then be imported into the U S.
Marco Levy: We continue to position the company to take advantage of onshoring trends that are becoming a bigger focus of governments in the U.S. and Europe. Ferroglobe, as a leading worldwide producer of silicon metal, is set up to be a significant beneficiary of this triangle. As an example of our market leadership, we recently signed a long-term supply agreement with Longy, the world leader in the solar value chain, to supply them with traceable silicon metal that can be sold in the U.S. to its growing solar market within the confines of the U.S. We also signed the U.S.-Ugur Forced Labor Prevention Act that affects Chinese access to the United States The main region of silicon metal and polysilicon production in China is Xinyang, where many Uyghur people reside.
Mark Hurley: A verified product.
Mark Hurley: The U F L P.
Mark Hurley: While we are cautious about 2024, we are very bullish about 2025 and beyond due to secular trends in the solar and EV battery market.
Mark Hurley: We believe we have significant long term growth opportunities.
Mark Hurley: Give you a sense of the scale of these growth markets. According to <unk> the worldwide demand for silicon metal for the solar MLR running segment.
Mark Hurley: When it comes to grow by approximately 70% to 30 million tonnes between 2023 and 2028.
Mark Hurley: Within our primary markets the U S and Europe the demand for silicon metal is expected to grow by roughly 40% to 947000 tons. During the same period, representing a huge upside for us as the larger western producer of silicon metal.
Marco Levy: According to CRU estimates, the Sinian area accounts for approximately 40% of Chinese silicon metal products. Our significant advantage is that we can provide tracer bubble non-xinyang silicon metal to China and Asia, which can then be imported into the U.S. as a verified product under the UFLPA. While we are cautious about 2024, we are very bullish about 2025 and beyond, due to secular trends in the solar and EV battery markets, where we believe we have significant long-term growth opportunities. To give you a sense of the scale of these growth markets, according to CRU, the worldwide demand for silicon metal for the solar and electronic segment is forecast to grow by approximately 70% to 3 million tons between 2023 and 2028.
Mark Hurley: We are introducing 2024 guidance recognizing the exceptionally uncertain and volatile times in our end markets elevated geopolitical risks.
Mark Hurley: Ranging elections around the globe and elevated interest rates among other factors.
Mark Hurley: Given the unpredictable environment, we are initiating our 2020 guidance with a range of $100 million to $170 million of EBITDA.
Mark Hurley: The decline in our 2024 guidance relative to 2023 results is primarily driven by our French energy agreement, which we expect to decrease materially in 2024.
Mark Hurley: 2024 guidance is also impacted by substantial price declines over the past several quarters.
Mark Hurley: Indexes for most of our products declined by a third to half from December 2020 to December 2023.
Mark Hurley: With demand continuing to continuing to be soft in the early part of 2024.
Mark Hurley: It is important to note our sensitive our results are to price fluctuations for example.
Mark Hurley: A 5% change in annual price for silicon metal.
Mark Hurley: $35 million impact on expected EBITDA, all else being equal.
Marco Levy: Within our primary markets, the US and Europe, the demand for silicon metal is expected to grow by roughly 40% to 947,000 tons during the same period, representing a huge upside for us as the larger western producer of silicon. We are introducing 2024 guidance, recognizing the exceptionally uncertain and volatile times in our end markets, elevated geopolitical risk, wide-ranging elections around the globe, and elevated interest rates, among other factors. Given the unpredictable environment, we are initiating our 2024 guidance with a range of $100 million to $170 million of EBITDA. The decline in our 2024 guidance relative to 2023 results is primarily driven by our French energy agreement, which we expect to decrease materially in 2023. The 2024 guidance is also impacted by substantial price declines over the past several quarters; indexes for most of our products declined by 30 to half from December 2022 to December 2023, with demand continuing to be soft in the early part of 2020. It is important to note how sensitive our results are to price fluctuations.
Mark Hurley: We expect the weak pricing to be partially offset by strong volume growth, particularly in Asia.
Mark Hurley: To counteract the weak demand.
Mark Hurley: Their pricing, we remain vigilant in managing costs and looking for incremental productivity gains across all areas of the company.
Mark Hurley: As discussed previously.
Mark Hurley: We are introducing our capital return program with an initial quarterly dividend of <unk>.
Mark Hurley: One three per share and.
Mark Hurley: And plan to request, our board of directors and shareholders as required to a proof of our share buyback program to be executed at the discretion of the management team.
Mark Hurley: Okay.
Mark Hurley: The capital return program is part of our overall capital allocation strategy.
Mark Hurley: Our priority is ensuring that our plants are well capitalized to run optimally as we seek to maximize our return on invested capital.
Speaker Change: <unk> will provide more details on that.
Speaker Change: Next slide please.
Speaker Change: Silicon metal revenue in Q4 was $168 million a.
Speaker Change: A decrease of 16% from the third quarter adjusted.
Speaker Change: Adjusted EBITDA was $22 million.
Speaker Change: A decline of 733% over the prior year quarter.
Speaker Change: Our average realized price for silicon metal decreased by 3% in Europe, and 6% in the Americas compared to the previous quarter.
Speaker Change: Index prices increased 26% in Europe and decreased 8% in U S. During the fourth quarter.
Speaker Change: There is typically a lag we've realized prices trailing indexes by approximately.
Speaker Change: 13 months for the portion of our counter that expect to an index silicon metal prices have shown strength since year end, we prices, increasing 13% in Europe and 6% in the Americas.
Speaker Change: As far as silicon metal outlook. It appears that the market is showing incremental improvement with U S prices bottoming in December and increasing since mid January.
Speaker Change: European prices after a strong increase in the fourth quarter.
Marco Levy: For example, a 5% change in annual price for silicon metal has a $35 million impact on expected EBDI, all else being equal. However, we expect the weak pricing to be partially offset by strong volume growth, particularly in Asia. To counteract the weak demand and lackluster pricing, we remain vigilant in managing costs and looking for incremental productivity gains across all areas of the company, as discussed previously. We are introducing our capital return program with an initial quarterly dividend of 1.3 cents per share and plan to request our board of directors and shareholders, as required, to approve a share-buy-back program to be executed at the discretion of the management. The capital return program is part of our overall capital allocation strategy. Our priority is ensuring that our plans are well capitalized to run optimally as we seek to maximize our return on invested capital. Beatrz will provide more details on that.
Speaker Change: Continued strength in 2024 and up 38% increase from the bottom at the end of Q3.
Speaker Change: The improvement in prices benefited from supply disruptions production curtailments by some of our competitors and restocking.
Speaker Change: While the mind remains log leash, we are encouraged by the recent price improvements, but there remains a lot of uncertainty in the market.
Marco Levy: Next slide, please. Silica metal revenue in Q4 was $168 million, a decrease of 16% from the third quarter; adjusted EBITDA was $22 million, a decline of 73% over the pre-accident. Our average realized price for silicon metal decreased by 3% in Europe and 6% in the Americas compared to the previous quarter. Index prices increased 26% in Europe and decreased 8% in the US during the fourth quarter.
Speaker Change: Moving towards like seven please.
Speaker Change: Turning now to manganese beta Lois.
Speaker Change: Manganese beta Loayza revenues were $60 million in queue for up 3% over the per year quarter.
Speaker Change: In Europe index price appear to have bottomed in late September and have increased approximately 13% sincere and adding to the 6% gain in the fourth quarter.
Speaker Change: The end market, primarily still remain under pressure, we expect an incremental improvement throughout 2024.
Speaker Change: I would now like to turn the call over to <unk>, Our Chief Financial Officer to review the financial results in more detail Beatrix.
Beatrix: Thank you Michael.
Beatrix: Police gently slide nine for a review of the Inca Miss Haden.
Beatrix: Sales declined 10% in the fourth quarter does.
Beatrix: $376 million from $417 million in the prior quarter.
Marco Levy: There is typically a lag with realized prices trailing indexes by approximately three months for the portion of our contract that is pegged to an interest. Silicometer prices have shown strength since year-end, with prices increasing 13% in Europe and 6% in the Americas. As for Silicon Meta Laundry, it appears that the market is showing incremental improvement, with U.S. prices bottoming in December and increasing since mid-January. European prices, after a strong increase in the fourth quarter, continued their strength in 2024, an up 38% increase from their bottom at the end of Q3. The improvement in prices benefited from supply disruptions, production curtailments by some of our competitors, and restocking. While we remain cautious about the demand environment, these improvements provide some optimism for 2024. Next slide, please. I just said he'd be there for Q4 for silicon-based alloys was $35 million, up 38% over the prior quarter. Relative to the third quarter, overall average realized pricing was down 7%, with prices in Europe declining 10% and America's declining 2%. The silicon alloy segment was adversely affected by weak demand primarily in construction and automotive.
Beatrix: Annual sales declining 56% to $1.7 billion, mainly due to lower pricing and secondarily <unk> volumes.
Beatrix: Materials and energy consumption increased as a percentage of shakes from.
Beatrix: 47% to 53%.
Beatrix: Thank you for and from 49% to 53% for the year.
Beatrix: Despite declining prices, we post solid <unk> in the fourth quarter of $60 million for the year.
Beatrix: For the year, our <unk> $50 million compared with our guidance rate of 272 $300 million.
Beatrix: Excluding the impact of different energy contract good practically salt in 2000, the D. C. A beta of approximately $129 million versus our 2034 guidance of $100 million to $170 million in there.
Beatrix: The fourth quarter.
Beatrix: Recognize impairment of $24 million, which was primarily related to our operations in the U S.
Beatrix: Net finance expenses for the year decline, 50% to $29 million due to the passion redemption of the senior secured notes in July.
Beatrix: Threw up of accrue interest and extension of government loans material.
Speaker Change: Next slide please.
Speaker Change: Our <unk> in the fourth quarter was $60 million.
Speaker Change: $104 million in the third quarter a.
Speaker Change: A desperate terbia margin decline from 25% in the play your quota to 16% in the fourth quarter.
Speaker Change: Previous shipment and lower realized prices contribute roughly equally to know every detail.
Speaker Change: Prices in the fourth quarter.
Speaker Change: Across the board with the overall average realized price declining 9%.
Speaker Change: We can market with pricing pressure across our three segments result in a negative impact of $22 million on our tested evita.
Marco Levy: While the environment continues to be challenging, we expect improvement in the second half of this year. Regarding the outlook for silicon-based alloys, prices have strengthened since year-end, with index prices increasing 7% in Europe and the Americas. While demand remains weak, we are encouraged by the recent price improvements, but there remains a lot of uncertainty in the market. Moving to slide seven, please. Turning now to manganese-based alloys. Manganese-based alloy revenues were $60 million in Q4, up 3% over the pre-year quarter. In Europe, index prices appeared to have bottomed in late September and have increased approximately 13% since year-end, adding to the 6% gain in the fourth quarter.
Speaker Change: While volume had a negative impact of approximately $19 million or the queue for AVP cost had little impact on a video.
Speaker Change: If light 11 please.
Speaker Change: Adjusted EBITDA for the full year was $315 million that was $860 million Hey, 2022.
Speaker Change: <unk> four 2000 to a D C was 19% down from 33% in 2022.
Speaker Change: <unk> selling prices with decline, 29% on average from historical high in 2022 had the biggest impact on our 2030 C. Adjusted EBITDA.
Speaker Change: Reducing reducing it by approximately $722 million.
Speaker Change: Most positively impacted abd for the year by $244 million.
Speaker Change: <unk> Bye Flint energy agreements and C O two compensation in front with the energy agreement, helping by $186 million.
Speaker Change: Next slide please.
Speaker Change: We end forequarter with a cash balance of $138 million down from $166 million in the third quarter.
Marco Levy: The end market, primarily steel, remains under pressure. We expect an incremental improvement throughout 2020. I would now like to turn the call over to Beatriz Garcia-Cos, our Chief Financial Officer, to review the financial results in more detail. Thank you, Marco.
Speaker Change: That increase $30 million.
Speaker Change: Two $101 million, while our grossed depth remained flat with the prior quarter.
Speaker Change: Redemption of the senior secured notes our pro forma gross that is approximately $91 billion.
Speaker Change: Next slide please.
Beatrz Garca: Please turn to slide nine for a review of the income statement. Sales declined 10% in the fourth quarter to $376 million dollars from $417 million dollars in the prior quarter, with annual sales declining 36% to $1.7 billion dollars, mainly due to lower pricing and secondarily lowered volumes. Raw materials and energy consumption increased as a percentage of sales, from 47% to 53% in Q4 and from 49% to 53% for the year. Despite declining prices, we post Solitavitia in the fourth quarter of $60 million for the year. For the year, our EBITDA was $350 million compared with our guidance rate of $270 to $300 million, excluding the impact of the French energy contract, the group has resulted in 2023 EBITDA of approximately $129 million, versus our 2024 guidance of $100 to $170 million.
Speaker Change: During the fourth quarter cash provided by operations West $25 million.
Speaker Change: Capex outflows in the fourth quarter was $24 million versus $19 million in the prior quarter and $84 million for the year, we anticipate our 2024 capex to be similar to 2053 levels.
Speaker Change: As of January 31st hour, Cashwell and was nearly $600 million, including the full received of approximately $210 billion from the energy.
Speaker Change: French a conversation.
Speaker Change: Of which $56 million was received in December 2033, with the remaining $154 million received in January 2024.
Speaker Change: Cash balance excludes the redemption of our remaining senior secured notes.
Speaker Change: $152 million, including the premium and accrued interest.
Speaker Change: These notes will redeem of February 16th.
Speaker Change: This is this is a significant achievement in a dramatic improvement from 2018.
Speaker Change: We we had net debt of $430 million.
Speaker Change: Are solid catch position combined with our ability to generate is still cashflows enable us to declare a dividend we plan to ask our board and shareholders to approve.
Speaker Change: Share repurchase program.
Speaker Change: Which requires a shareholder both.
Speaker Change: We had a NASDAQ listed company domiciled in the UK.
Speaker Change: <unk> please.
Speaker Change: At this time I will turn the call back over to Michael.
Michael Levine: Thank you <unk> moving to the corporate update on slide 15.
Beatrz Garca: In the fourth quarter, we recognized impermanence of $24 million, which was primarily related to our operations in the U.S. Net finance expenses for the year declined 50% to $29 million due to the partial redemption of the senior secure notes in July, the through-up of accrued interest, and the extension of government loan maturity. Next slide, please. Our adjusted EBITDA in the fourth quarter was $16 million versus $104 million in the third quarter. Adjusted EBITDA margin declined from 25% in the prior quarter to 16% in the fourth quarter. Reduced shipments and lower realized prices contributed roughly equally to lower EBITDA. Prices in the fourth quarter were weak across the board, with the overall average realized price declining 9%.
Michael Levine: We made great strides in 2023 and those promised.
Michael Levine: We shifted our new capital allocation policy that we return capital to our shareholders.
Michael Levine: We initiated the quarterly rhythm of 1.3 cents and are currently working to implement a share repurchase program.
Michael Levine: Given the current uncertainty in the market, we're starting with a conservative <unk> with the intention of increasing it.
Michael Levine: The environment improves.
Michael Levine: We ended the year with the strongest balance sheet and they're used to refer globe and achieve the net positive cash position in January.
Michael Levine: This is where the remarks that improvement over be Ivy levered balance sheet with just a year ago.
Michael Levine: The farmers Sheep's, we've discussed earlier are an excellent way for us to take advantage of the tremendous opportunities in the advanced <unk> burglary market.
Michael Levine: Which is expected to grow to 150000.
Michael Levine: Thousand tonnes by 2013.
Michael Levine: This combined with the second cycle our clients in the solar market that we are now serving globally is expected to drive long term growth for four o'clock.
Beatrz Garca: Weekend markets with pricing pressure across our three segments resulted in a negative impact of $22 million on our adjusted EBITDA. While volume had a negative impact of approximately $19 million on the Q4 adjusted EBITDA, cost had a negligible impact on EBITDA. Slide 11, please. Adjusted EBITDA for the full year was $315 million versus $860 million in 2022. EBITDA margin for 2023 was 19%, down from 33% in 2022. Average selling prices, which declined 29% on average from their historical high in 2022, had the biggest impact on our 2023 adjusted EBITDA, reducing it by approximately $722 million. Cost positively impacted EBDR for the year by $244 million, driven by the French energy agreement and CO2 compensation in France, with the energy agreement helping by $186 million.
Speaker Change: Operator, we're ready for questions.
Speaker Change: Thank you.
Speaker Change: If you wish to ask a question please press.
Speaker Change: One one on your telephone.
Speaker Change: Your name to be announced to withdraw your question. Please press one.
Speaker Change: One again.
Speaker Change: Please stop by while we compile the Q&A laughter.
Speaker Change: As a reminder, if you do wish to ask a question. Please press.
Speaker Change: One one on you're satisfied.
Speaker Change: We will take our first question.
Speaker Change: So first question comes from the line a few cause pipes from <unk>. Please go ahead, you're lying his iPad.
Speaker Change: Thank you very much operator, good morning, everyone, Marco and team great great to see that Unlevered balance sheet at the commencement of of a dividend.
Speaker Change: My.
Speaker Change: My first question is is on the 2024 guidance four EBITDA hundred to $170 million.
Speaker Change: And mark or if I heard you right.
Speaker Change: 5% changing pricing is about $35 million.
Speaker Change: EBITDA sensitivity, so should we kind of think of the guidance.
Speaker Change: In the current price environment, you at 135, and the new maybe put like 5% sensitivity to the upside of to the downside to to to particulate that range or.
Speaker Change: They're more dynamics at work would appreciate how you how you think about how you think about that thank you.
Speaker Change: Thank you Lucas and thank you for the question I think is probably the most important question of of today.
Beatrz Garca: Next slide, please. We end Q4 with a cash balance of $138 million, down from $166 million in Q3. Net debt increased $13 billion to $101 million, while our gross debt remained flat with the prior quarter. Post-redemption of the senior CQ notes, our pro forma gross debt is approximately $91 million. Next slide, please. During the fourth quarter, cash provided by operations was $25 million. CAPEX outflows in the fourth quarter were $24 million versus $19 million in the prior quarter and $84 million for the year.
Speaker Change:
Speaker Change: First of all the 5%.
Speaker Change: 45 millions is related to silicon metal.
Speaker Change: You have different insulins pvp's for for the rest of the product mix, but I think he's a goober indicator.
Speaker Change: The 5%.
Speaker Change: We.
Speaker Change: We have decided on these guidance coming out.
Speaker Change: Fourth quarter.
Speaker Change: Demand was extremely low.
Speaker Change:
Speaker Change: We only started seeing some where some fries.
Speaker Change: Over recovery, so when we decided about the guy that was pretty much.
Speaker Change: Coming from our.
Speaker Change: Bottom up.
Speaker Change: Of of our budget.
Speaker Change: Uhm since them prices have shown.
Speaker Change: Samsoe spam shall improvement.
Speaker Change: They will materialize with the usual log two months for our lawyers in particular are among lawyers and 30 miles for silicon.
Beatrz Garca: We anticipate our 2024 CAPEX to be similar to 2023 levels. As of January 31st, our cash balance was nearly $600 million, including the full receipt of approximately $210 million from the Energy, French conversation, of which $56 million was received in December 2023 with the remaining $154 million received in January 2024. This cash balance excludes the redemption of our remaining senior secured notes of $152 million, including the cold premium and accrued interest. These notes were redeemed on February 16.
Speaker Change: Sustainability of this price level.
Speaker Change: Is is a question because on one side.
Speaker Change: We don't see any structural change in terms of demand.
Speaker Change: On the other side.
Speaker Change: Like I mentioned in my page.
Speaker Change: A lot of capacities are being curtailed.
Speaker Change: There are difficulties in the supply chain.
Speaker Change: And at the end customers need to restart the.
Speaker Change: Ah filling their their inventories.
Speaker Change: So we feel slightly.
Speaker Change: Optimistic.
Speaker Change: I'm more optimistic than than a couple of months ago.
Speaker Change: The guidance is is still valid.
Speaker Change: I I would say that.
Beatrz Garca: This is a significant achievement and a dramatic improvement from 2018, when we had a net debt of $430 million. Our solid cash position, combined with our ability to generate strong cash flows, enables us to declare a dividend. We plan to ask our board and shareholders to approve a share repurchase program which requires a shareholder vote as we are a NASDAQ-listed company domiciled in the UK. Next slide, please. At this time, I will turn the call back over to Margarita. Thank you, Beatrz.
Speaker Change: Based on the recent price moves.
Speaker Change: I I would be optimistic on the side of this guidance.
Speaker Change: The other <unk>.
Speaker Change: Uh-huh.
Speaker Change: But I can add on that.
Speaker Change: Hi, I mention that we drastically improve the performance of our operations by three per cent.
Speaker Change: In Europe this year.
Speaker Change: And we.
Speaker Change: I started a new program to make sure that we.
Speaker Change: We're gonna. The addition of GB the art of new initiatives that we plan to implement as we speak.
Speaker Change: It operational level initiatives that are gonna be.
Speaker Change: Totally under our control.
Speaker Change: That's that's helped very helpful. Marco and just just just to.
Marco Levy: Moving to the corporate update on slide 15, we made great strides in 2023 and, as promised, have initiated a new capital allocation policy that will return capital to our shareholders. We have initiated a quarterly dividend of 1.3 cents and are currently working to implement a share repurchase program.
Speaker Change: Make sure that I got this right so.
Marco: Yeah, the bottom soft budget.
Speaker Change: Budget, you did that some time ago.
Speaker Change: That.
Speaker Change: <unk> the.
Speaker Change: The range of 100 270.
Speaker Change: Since then the market.
Speaker Change: Improved and that's not really.
Speaker Change: So.
Speaker Change: That's not really reflected yet in that in that range is that correct is that right.
Speaker Change: Alright, Okay. That's that's very helpful.
Speaker Change: And then you you mentioned in the release that you expect to be free cash flow positive.
Marco Levy: Given the current uncertainty in the market, we are starting with a conservative dividend with the intention of increasing it as the environment warrants. We ended the year with the strongest balance sheet in the history of Ferroglobe and achieved a net positive cash position in January. This is a dramatic improvement over the highly levered balance sheet we had just two years ago. The partnerships we discussed earlier are an excellent way for us to take advantage of the tremendous opportunities in the advanced silicon EV battery market, which is expected to grow to 150,000 tons by 2020. These, combined with the secular trends in the solar market that we are now serving globally, are expected to drive long-term growth for Ferroglobe. Operator.
Speaker Change: The way I read the comment.
Speaker Change: It sounded to me like it any.
Speaker Change: At any point in your range that statement would be true, but I wondered if you could maybe elaborate on on that if that's the right conclusion, and what sort of cash items, you should be mindful of.
Speaker Change: From sustaining capital to to working capital taxes et cetera would appreciate the additional color. Thank you.
Speaker Change: Hi, Lucas.
Speaker Change: There are there is.
Lucas: This is <unk> speaking so in terms of casual for 2824, a couple of a couple of elements to mention.
Speaker Change: The first day.
Speaker Change: Sorry.
Speaker Change: The first element is the release of working capital that we're gonna be having 2028 2024.
Speaker Change: <unk> <unk> nine at Dave gross theft.
Operator: We're ready for questions. Thank you. As a reminder, if you wish to ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again.
Speaker Change: Below 100 billions site, so that the second element.
Speaker Change: And the element and is in queue, while we're already outperformer net cash positive 91 cents you see on the on the slide So we expect based on here from a <unk> a castle perspective.
Speaker Change: I know that maybe somebody <unk> <unk> has been explain it to the other side from a cash perspective, I've gotta be no I think they are.
Operator: Please stand by while we compile the Q&A roster. As a reminder, if you do wish to ask a question, please press star 1 and 1 on your telephone. We will take our fifth question. Your first question comes from the line of Lucas Pipes from Beaviney. Please go ahead, your line is open. Thank you very much, operator. Good morning, everyone.
Speaker Change: Significant yet deal that element that you need to factor here as the <unk> that we are saving.
Speaker Change: Significant <unk> for us.
Speaker Change: And then in terms of a cough.
Speaker Change: Capital Capex of course, we plan to continue to.
Speaker Change: To take care of the health of our operations in terms of Capex, and we expect more or less.
Speaker Change: Would I like to like Macy's versus 2024.
Speaker Change: I think I'd be in.
Speaker Change: We decided that one to go ahead with this capital allocation policy that includes a dividend payment.
Speaker Change: We confirm 1.3% 1.3 cents a share so it is going to be a mother's day.
Marco Levy: Marco and team, great great to see that unlevered balance sheet and the commencement of a dividend. My first question is on the 2024 guidance for EBITDA of $100 to $170 million. And, Marco, if I understand you right, a 5% change in pricing is about $35 million in EBITDA sensitivity. So, should we kind of think of the guidance as, In the current price environment, you're at $135,000, and then you maybe put like a 5% sensitivity to the upside and to the downside to articulate that range, or are there more dynamics at work? I would appreciate how you think about that. Thank you. Thank you, Lucas, and thank you for the question. I think it's probably the most important question of today. First of all, the 5% 35 million is related to silicon metal. You have different sensitivities for the rest of the product mix, but I think it is a good indicator.
Speaker Change: <unk> when the an impact and it shows.
Speaker Change: How the company has been performed or the or the last slice of <unk>, how it crystallized or the payment of the same <unk> that will be one to to increase as we as we go and.
Speaker Change: And then on the share buyback program, we plan to use <unk> buyback program in an opportunistic a basis, but to do that we need.
Speaker Change: We need to get the approval of February and.
Speaker Change: Shareholders on the a T M in into because we are in a British company listed in plastic.
Speaker Change: Thank you. Thank you very much and features I heard it right that that approval would come in each at the earliest in June.
Speaker Change: Right.
Speaker Change: So.
Speaker Change: Or it could make an approval sometime before then but then it it still takes the shareholder meeting in June to authenticate the of course, yeah of course yeah.
Speaker Change: And in terms of you just mentioned now on the on the buyback that you would be opportunistic.
Speaker Change: I appreciate that.
Speaker Change: <unk>.
Speaker Change: High level and it.
Speaker Change: Hi, hi level.
Speaker Change: What what what do you think would be.
Speaker Change: The allocation towards firebox versus versus a dividend.
Speaker Change: Is that the way you think about it at this time.
Speaker Change: Some some some other companies in the industry.
Speaker Change: They they have a certain.
Speaker Change: Certain percentage that we'd go towards buybacks curious how you. That's how you think about it or is it just maybe too early to comment on that.
Marco Levy: The 5% we decided on this guidance coming out of the fourth quarter, where demand was extremely low, and we only started seeing some price recovery. So when we decided on the guidance, it was pretty much coming from our bottom-up result of our budget. Since then, prices have shown some substantial improvement. They will materialize with the usual lag, two months for alloys, in particular manganese alloys, and three months for silicon.
Speaker Change: Mmm.
Speaker Change: Yeah I'll take a look at this is the first year since 2018 that <unk>.
Speaker Change: Paying a dividend right. So our intention is to return capital too they should call. This through ER payment of the dividend when it comes to this share buy back as as I mentioned, we feel that our <unk>. After the repayment of the senior notes et cetera. So if the share price continue to the <unk>.
Speaker Change: <unk> gonna be taking the opportunity for sure to do someone share buy back.
Speaker Change:
Speaker Change: We want no monitoring certain flexibility overall.
Speaker Change: Part of the discussion with our board.
Speaker Change: The discussion.
Speaker Change: In June.
Speaker Change: But like I said, we might be so we want to make sure that we keep on also financing our operations.
Marco Levy: Sustainability of this price level is a question because, on the one hand, we don't see any structural change in terms of demand. On the other hand, Like I mentioned in my pitch, a lot of capacities have been curtailed, there are difficulties in the supply chain, and, in the end, customers need to restart, filling their inventories. So we feel slightly optimistic, more optimistic than a couple of months ago. I think the guidance is still valid. I would say that, based on the recent prize mold. I would be optimistic on the eye side of this guy that...
Speaker Change: And keep our surroundings.
Speaker Change: At the appropriate right.
Speaker Change: Uh-huh.
Speaker Change: That's that's that's all very helpful. Thank thank you so much and.
Speaker Change: Trying to squeeze one quick one in on the on the.
Speaker Change: E V battery side, you mentioned, a term sheet and and and another initiatives.
Speaker Change: <unk> what is your <unk>.
Speaker Change: Contribution high level to these to these miniatures technique.
Speaker Change: Thank you <unk> well.
Speaker Change: We mentioned these two agreements because.
Speaker Change: They are exactly a line to our store.
Speaker Change: Strategy of attacking the opportunity in.
Speaker Change: In the growth of silicon maker for batteries in two ways.
Speaker Change: The joint venture that dimension.
Speaker Change: Is about silicon modified products.
Marco Levy: The other comment that I can add to that... I mentioned that we drastically improved the performance of our operations by three percent in Europe this year. And we started a new program to make sure that we, We're going to add additional EBITDA out of new initiatives that we plan to implement as we speak, at the operational level, initiatives that are going to be totally under our control. That's helpful. Very helpful, Marco. And just to make sure that I got this right. So, you have a kind of bottom-up budget. You did that some time ago.
Speaker Change: That will partially.
Speaker Change: He plays graphite.
Speaker Change: Indiana.
Speaker Change: We are targeting 30% today's around 10, 12% with other products.
Speaker Change: But but this is the market that we are targeting.
Speaker Change: The second.
Speaker Change: Second the Lions in partnership we we're an American company.
Speaker Change: Is related to our ambition.
Speaker Change: To supply <unk> four four silicon made.
Speaker Change: Donald.
Speaker Change: And and.
Speaker Change: And these these two so these two kind of alliances.
Speaker Change: Really confirm.
Speaker Change: The validity of of hours proposition.
Speaker Change: Margaret Thank you very much for all the color and to you and the team best of luck. Thank you so much.
Marco Levy: Herman, the range of 100 to 170, and since then, the market has improved, and that's not really so. That's not really reflected yet in that range. Is that right?
Speaker Change: Thank you Lucas and kill Lucas.
Speaker Change: Q what scan if you wish to ask a question. Please press star one and one on your telephone.
Speaker Change: We will take our next question and the question.
Speaker Change: Boston.
Speaker Change: Sea Port Research partners. Please go ahead, you're lying his iPad.
Speaker Change: Hello, Good morning, everyone.
Marco Levy: Correct. Okay. That's very helpful.
Speaker Change: Good morning Martin.
Speaker Change: Ah Martin.
Beatrz Garca: And then you mentioned in the release that you expect to be free cash flow positive. The way I read that comment, it sounded to me like at any point in your range, that statement would be true, but I wondered if you could maybe elaborate on that, if that's the right conclusion, and what sort of cash items we should be mindful of, from sustaining capital to working capital, taxes, etc. I would appreciate the additional color. Thank you.
Speaker Change: Good morning, everyone.
Speaker Change: <unk> back to the gardens and follow.
Speaker Change: Aw on some of these.
Speaker Change: These questions and the contracts.
Speaker Change: Mmm.
Speaker Change: At the time, you budgeted for the guide the market wants comparatively.
Speaker Change:
Speaker Change: Since then there's been priced improvements.
Speaker Change: And your comment about.
Speaker Change: Kind of taking into account market prices today.
Speaker Change: Would be to imply something towards the upper end of the EBITDA guidance range. So maybe if I look at the spot market prices for silicon mental an hour today.
Speaker Change: Now for the rest of the year would you anticipate approximating the hundred and 70 million and EBITDA.
Speaker Change: Or even better Martin or even better Martin I mean, we have.
Speaker Change: The question.
Speaker Change: Mentioned it when I answer to Lucas is.
Speaker Change: Or is this increases.
Beatrz Garca: Hi Lucas, this is Beatrz speaking. So in terms of cash flow for 2024, there are a couple of elements to mention. The first element is the release of working capital that we're going to be having in 2024. The second element to bear in mind is gross debt is below 100 million, so that's the second element.
Speaker Change: <unk> mainly to restore kingdom.
Speaker Change: Some production cost.
Speaker Change: <unk> and in the case of Europe. The crisis in the Red Sea, we'll have to see if this this level of fries.
Speaker Change: Will be maintained to be seen. This is this is my first call ma'am the other comment that I made.
Speaker Change: In parallel to pricing recovering we'd made a decision taken the decision to go very aggressively to further improve the cost of our operations already this year.
Beatrz Garca: And the third element is that in Q1 we already performed a net cash positive of 91 million, as you see on the slide. So we expect a very strong year from a net cash flow perspective. I know that maybe from an ABDI point of view, what Barco has been explaining, but on the other side, from a cash perspective, it's going to be, I think, a very, very significant year. The other element that you need to factor in is the 32 million dollars of interest that we are saving. That's a very significant item for us.
Speaker Change: And so I am today, I can say I'm, rather optimistic [laughter] doesn't lead to reach or maybe even.
Speaker Change: Do better than.
Speaker Change: The top.
Speaker Change: Level of.
Speaker Change: The guidance.
Speaker Change: [noise] okay.
Speaker Change: Would you.
Speaker Change: Last year.
Speaker Change: If there was any revisions to EBITDA guy, but what.
Speaker Change: What are you, saying pointed out it was progressively deteriorating from a fundamental perspective.
Speaker Change: And you still.
Speaker Change: <unk> and the gardens for the full year by quarter.
Speaker Change: Presumably.
Speaker Change: Against the backdrop of fundamental improvement.
Speaker Change: And or demand.
Speaker Change:
Speaker Change: Could potentially prompt upward revisions.
Speaker Change: <unk>.
Speaker Change: Assuming the.
Speaker Change: Bob price, where it is today or butter.
Speaker Change: Wow.
Speaker Change: To be in line to what I mentioned after a third quarter.
Beatrz Garca: And then, in terms of capex, of course, we plan to continue to take care of the health of our operations in terms of capex, and we expect more or less to invest on a like-to-like basis versus 2024. I think at the end, we decide as well to go ahead with this capital allocation policy that includes a dividend payment. We confirm 1.3 cents per share, so this is going to be a modest dividend. It will not have an impact on how the company has been performing in the last year, right? So for us, it's how it crystallized in the payment of this modest dividend that we want to increase as we go. And then on the share buyback program, we plan to use or implement this share buyback program on an opportunistic basis. But to do that, we need to get the approval of our... shareholders at the AGM in June. Why?
Speaker Change: In 2024.
Speaker Change: We had a big favorable impact from the energy pricing for us and like I explained.
Speaker Change: These impact was related mainly to the difference between.
Speaker Change: Between the energy market price in France enterprise that we had.
Speaker Change: Crocheted.
Speaker Change: This difference is much lower much lower.
Speaker Change: And this is why batteries.
Speaker Change: During our features mentioned the 186 millions.
Speaker Change: Benefit.
Speaker Change: On our EBITDA 315 millions.
Speaker Change: That basically brings the performance.
Of 2020, 321 number $29 million as mentioned by batteries. So this.
Speaker Change: <unk> 29 million C b.
Speaker Change: Really reflects the the market <unk> is pre-verbal energy impacting France in 2012.
Speaker Change: Twenty-three right now.
Beatrz Garca: Now this.
Beatrz Garca: This is starting from there we have created the guidance on 100 $170 million now in 2024, we're not gonna have the same impact from energy in France, we are still going to be very competitive with our energy cost in France.
Beatrz Garca: Because we are a British company listed in, Thank you. Thank you very much. And Beatriz, I heard it right that that approval would come in at the earliest in June. Bye.
Speaker Change: But fewer things to fall into place.
Beatrz Garca: Coverage of demand more sustainable pricing and our aggressive.
Beatrz Garca: Oprah S unit cost reduction program.
Beatrz Garca: So the board could make an approval sometime before then, but then it still takes the shareholder meeting in June to kind of get the... Of course, of course, yeah. And in terms of, you just mentioned now, the buyback, that it would be opportunistic. I appreciate that, high level. What do you think would be the allocation towards buybacks versus a dividend? Is that the way you think about it at this time? Some other companies in the industry have a certain percentage that would go towards buybacks. Curious how that's how you think about it or if it's maybe too early to comment on that.
Beatrz Garca: Within the maybe the lower bone.
Beatrz Garca: None of the annual fee for Dot guidance range for this year what is the assumption on the.
Beatrz Garca: Contribution from.
Beatrz Garca: Energy crisis.
Beatrz Garca:
Beatrz Garca: Yeah.
Beatrz Garca: Yeah.
Beatrz Garca: Yeah that would be.
Beatrz Garca: Yeah.
Beatrz Garca: I mean, when when we look at.
Beatrz Garca: D estimated energy fries in France during this year at market.
Beatrz Garca: The way, we learn from our office in France.
Beatrz Garca: We expect to get a.
Beatrz Garca: Benefit, which is gonna be lower than $40 million versus the 186 that we had in 2023.
Beatrz Garca: What is the spot.
Beatrz Garca: Thank you. Yeah, I think, Lucas. This is the first year since 2018 that Ferroglobe is paying dividends, right? So our intention is to return capital to the shareholders through a payment of dividends. When it comes to the share buyback, as I mentioned, we feel that our share is completely undervalued after the repayment of the senior loans, etc. So if the share price continues to be undervalued, we're going to be taking the opportunity for sure to do some share buyback. We want to maintain a certain flexibility.
Beatrz Garca: <unk> electricity prices.
Beatrz Garca: That assumption dollars per megawatt hour.
Beatrz Garca: Sorry can you repeat your question by the price per level sure I understand that the credits to work essentially one spot prices for energy and France or at a higher level based on the mechanism versus your contracted me, you'll get a bigger energy kroner swartwood.
Beatrz Garca: 186 million for last year.
Beatrz Garca: Right.
Beatrz Garca: 40 million my question is.
Beatrz Garca: Embedded in that 40 million what is the dollars per megawatt hour in France.
Beatrz Garca: <unk> you have to look at the it keeps on changing every week you have to look at the.
Beatrz Garca:
Beatrz Garca: Published energy market price in in France.
Beatrz Garca: And this is one reference point and he keeps on changing 40 see her every week, but you are approximately monthly between 70 and 80 euros per megawatt.
Beatrz Garca: Overall, we have started the discussion with our board. We hope to conclude the discussion in June. But like I said in my pitch, we want to make sure that we keep on also financing our operations and keep our assets running at the proper rate. Mm-hmm. That's all very helpful. Thank you so much. I'll try to squeeze one quick one in.
Beatrz Garca: And then you have to consider the way, we're going around our operations and our total consumption of energy in France. These are the two elements.
Beatrz Garca: Both variable.
Speaker Change: That can give you. The final estimate this is why I cannot give you a phone number but I tell you that.
Marco Levy: On the EV battery side, you mentioned a term sheet and another initiative. What is your... contribution to these ventures? Thank you very much.
Beatrz Garca: Is gonna be lower than 40 million compared to the 186 in 2023.
Marco Levy: So it's up to $40 million is up to Max community.
Marco Levy: Okay.
Marco Levy: Thank you, Lucas. Well, we mentioned these two agreements because they are exactly aligned with our strategy of attacking the opportunity in the growth of silicon metal for batteries in two ways. The joint venture that I mentioned is about silicon modified products that will partially replace graphite. Indiana, we are targeting 30%.
Marco Levy: Two.
Marco Levy: 40 million.
Marco Levy:
Marco Levy: Is there a sensitivity that you can provide on that I mean, I see year to date is like right in that range is my $76 a megawatt hour on the spot yeah like I said I haven't between 70 right [laughter], yes.
Speaker Change: Well, it's it's very difficult because like we explain in previous calls there are other factors that influence.
Marco Levy: The final prize like.
Marco Levy: Today, it is around 10-12% with other products. But this is the market that we attack. The second, The second alliance and partnership with an American company is related to our ambition to supply silicone metal for a full silicone made. Arnold, And so these two kinds of alliances really confirm the validity of our strategy. Marco, thank you very much for all the color and, to you and the team, best of luck. Thank you so much.
Marco Levy:
Marco Levy: [noise] interoperability.
Marco Levy: Like.
Marco Levy: Which times lots of the day, we used to run our assets.
Speaker Change: So is.
Marco Levy: Some things where he is very difficult to give you to give you further guidance.
Marco Levy: Okay.
Marco Levy: When you say up to a 40 million dollar credit.
Speaker Change: Yes would that be.
Marco Levy: That'd be based on that 70 to 80 dollar range or not yet thoroughly.
Speaker Change: Yes, okay.
Marco Levy: Question on cost savings that were previously undertaken I think.
Marco Levy: There was initial program about targeting $180 million EBITDA improvement.
Marco Levy: Stuffed up I think on your Investor data to 25, or maybe just before that if you can remind me of the base year for that and then you spoke about seeking awesome incremental improvements and I just wanted to try to square that away with.
Marco Levy: Thank you, Lucas. Thank you, Lucas. Thank you.
Operator: Once again, if you wish to ask a question, please press star 1 and 1 on your telephone. We will take our next question, and the question comes from Martin Englert from Seaport Research Partners. Please go ahead; your line is open.
Martin John Englert: The EBITDA guide for this year as well.
Operator: Yeah.
Martin John Englert: I I I mean with the value creation program, we mention that we approximately $225 million, but there are many moving pieces as.
Operator:
Operator:
Martin John Englert: We are a very different organization versus 2020.
Operator: What makes the.
Operator: The reconciliation very yard.
Operator: The <unk>.
Martin John Englert: Being a tremendous change in certain critical inputs for example, and I mentioned in just a couple of things.
Martin John Englert: Hello, good morning, everyone. Good morning, Mark. Morning. Hi Mark. Good morning, everyone.
Martin John Englert: Input cost.
Marco Levy: Just to pivot back to the guidance and follow up on some of Lucas's questions and the context. It seemed like at the time you budgeted for the guide, the market was comparatively worse, namely price demand. Since then, there's been price improvements, and your comment about taking into account market prices today does better than the top level of the guidance, and you still exceeded the top end of the guidance for the full year. Presumably, it would be against a backdrop of fundamental improvement in price and or demand. This is, to be in line with what I mentioned after the third quarter.
Martin John Englert: Has increased more than 100 per cent between.
Marco Levy: 2019, and 2023, because it does increase to $472 per ton.
Marco Levy: And we use approximately half a million.
Marco Levy: Tom's of cold.
Marco Levy: This number is four 2023 in the past, we even use 600000 tons of called barrier.
Marco Levy:
Marco Levy: The roughly the rough increase of 240.
Marco Levy: Dollars per ton lean cool.
Marco Levy: Means a negative impact.
Marco Levy: Bottom line on $150 million in terms of incremental costs.
Marco Levy: If you make the same compares on energy if you exclude France, and you'll see the our energy cost for the rest of our asset footprint.
Marco Levy: In 2024, we had a big favorable impact from the energy price in France, and, like I explained, this impact was related mainly to the difference between the energy market price in France and the price that we had negotiated. This year, this difference is much lower, much lower, the market net of the favorable energy impact in France in 2023, right? Starting from there, we have created a guidance of 100, 170 million. Now, in 2024, we will not have the same impact on energy in France. We are still going to be very competitive with our energy costs in France, but a few things have to fall into place. What, within the, maybe the lower bound and upper bound of the annual guidance range for this year?
Marco Levy: When you compare 2019 to today, we have more more or less more than $35 million increments.
Marco Levy: Caused so when you just look at these two categories.
Marco Levy: These two categories of impact.
Marco Levy: Easily the bottom line by 100 and.
Marco Levy: $50 million and and you know the price of coal or the price of energy are things that are not.
Marco Levy: Control.
Marco Levy: Now this is just to give you the feeling of how difficult it is to reconcile our performance versus expectations.
Marco Levy: But you know like like whenever industrial company there is always.
Marco Levy: Always room for improvement and in their room for improvement in our case is India of inter.
Marco Levy: Integrated supply chain.
Marco Levy: And this is where we are focused this year.
Marco Levy: To reduce our overall operating costs.
Speaker Change: Yeah, you can <unk>.
Speaker Change: Sorry go ahead.
Marco Levy: And just one of each of our 0.2 building up a one mile Mark Convention. We also produce roughly once a day less in number of times. So this means an impact as well in a less.
Marco Levy: contribution from energy credits. Yeah, I mean, when we look at the estimated energy price in France during this year in March, which is going to be lower than $40 million versus the $186 million that we had in 2012, those two variables can give you the final estimate. This is why I cannot give you a full number, but I can tell you that it is going to be lower than $40 million compared to $186 million in 2020. All right, up to, you know, interoperability is like. So it's something where it's very difficult to give you further guidance when you pay up to a $40 million credit. Okay.
Marco Levy: Cost <unk> Sasha. So this has been an element.
Marco Levy: Place against this value creation plan as well.
Marco Levy: [noise] of the 500000 tons and 2023 that was your external purchases or consumption.
Marco Levy: Correct.
Marco Levy: Versus is North Dakota.
Marco Levy: The rest of our of our integrated.
Marco Levy: <unk>, Okay for Awhile then.
Speaker Change: Okay would you be able to provide any framework for now.
Marco Levy: Metallurgical silicon market prices, but your S. P in silicon metal kind of continues to outperform and I'm curious.
Speaker Change: For I understand the selling into chemicals and battery applications, probably doesn't occur a heck of a lot in the spot market price, but are you able to provide a range in recent history, where you'd see spot market prices for this higher value silicon and all that.
Marco Levy: It goes into Canada applications for batteries on a price per ton.
Marco Levy: Well first of all if you if you talk about.
Marco Levy: Silicon for batteries.
Marco Levy: We are a very different organization versus 2020. But you know, like, like, in every industrial company, there is always, always room for improvement. And the room for improvement, in our case, is in the area of the integrated supply chain. Sorry, go ahead, call from Alden, a higher value silicon metal that goes into chemical applications for batteries at a price per ton. So a completely different price range is decoupled from the index. So today, we have volumes of silicon metal that are sold at between $4,000 and $4,500 per metric ton, decoupled from the current market. Thank you, Martin. We started 2024 as a more robust company, as we are setting ourselves up toward our long-term goal.
Marco Levy: We are still relatively small volumes.
Alden: <unk> makes but we are talking depending on.
Marco Levy: On.
Alden: The customers between.
Alden: And $15 per kilo.
Marco Levy: So.
Alden: Completely different price range.
Alden: And and premium hop locations.
Alden: The price of <unk> is decoupled.
Marco Levy: Is the couple from the index, so today, where volumes in silicon metal that are sold for between 4000 and $4500 per metric ton.
Alden: Decoupled from from the current.
Speaker Change: Market price.
Marco Levy: Okay.
Speaker Change: Thank you I appreciate.
Alden: With all the detail very helpful.
Speaker Change: Thank you my opinion.
Speaker Change: Thank you once again, if you wish to ask a question. Please press star one on one on your telephone.
Speaker Change: That seems to be nice set of questions I would like to have back for closing remarks.
Speaker Change: Thank you I D.
Alden: Despite the near term Edwards federal globally, as well positioned for the economic upturn in the long term outlook remains intact.
Martin: Proving our resilience.
Marco Levy: We started 2024 is a more robust company.
Marco Levy: We're setting ourselves up toward our long term goal.
Speaker Change: That concludes our fourth quarter and full year 2023 earnings call.
Speaker Change: Thank you again for your participation we look forward to hearing from you on the next call have a great day.
Speaker Change: That does conclude our conference for today, Thank you for participating.
Marco Levy: Disconnect.
Marco Levy: Yeah.
Marco Levy: [music].