Q1 2024 Ferroglobe PLC Earnings Call
[music].
Okay.
Speaker Change: Good morning, ladies and gentlemen, and welcome to foundry club's first quarter 'twenty to 'twenty four earnings call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will be given at the time as a reminder, this conference call maybe recorded.
I would now like to turn the call over to Alex We'll tell you then for clubs Vice President of Investor Relations you may begin.
Sure.
Good morning, everyone and thank you for joining comparable to first quarter 2024 earnings conference call.
Joining me today are Mark <unk>, our Chief Executive Officer, and Beatrice Garcia Casas, our Chief Financial Officer.
Before we get started with some 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 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 paragould <unk> most recent SEC filings.
Exhibits to those filings, which are available on our website at favorable dot com.
Speaker Change: In addition, this discussion includes reference to EBITDA adjusted EBIT.
Adjusted gross debt net debt and adjusted diluted earnings per share among other non <unk> measures reconciliation of non <unk> measures may be found in our most recent SEC filings.
Speaker Change: Before I turn the call over to Marco Levi, Our Chief Executive Officer, excuse me I want to announce that we'll be participating b Riley's 24th annual Investor Conference in Los Angeles.
Marco Levi: On may 22nd and May 23rd we hope to see you there Marco.
Marco Levi: Thank you Alex and good morning, Good day, and good evening wherever you want them. Thanks.
Thanks for joining us on the call today, we appreciate your interest in capital.
Let me start from operations.
First we successfully restarted operations in problems.
Perfect Alright.
I appreciate it.
In addition to France, where correctly youre running all three silicon metal furnaces in Sao Paulo.
Marco Levi: And in addition.
In fairness in bulk.
Marco Levi: Basic demand that your prices in Spain.
Speaker Change: <unk> from strong and Joe Paul Energy generation.
As you recall last October we acquired high quality quartz mine in South Carolina to secure.
So by source or forced to support our expected to increase production of high quality PC nickel metal.
We are on track to begin mining in the third quarter.
This was a strategic purchase that will provide a competitive advantage as demand begins to materialize.
Okay.
To further support our growth plans.
We're in the process of applying for permits.
Our silicon metal production in North America.
Speaker Change: The additional capacity will be a brownfield expansion.
Requiring a significantly smaller investment vessels, a green field and faster to the network.
This investment will allow us to meet the significant growth opportunity.
In solar.
And EV batteries.
Strategically we continue to position the company to take advantage of peak cyclical trends occurring in the market.
Solar.
Speaker Change: And batteries for electric vehicles are in larger markets that will drive strong growth for the foreseeable future.
As the leading producer of high quality silicon metal in the west.
<unk> is well positioned to be a significant beneficiary of this.
Tom.
In March.
Speaker Change: We announced the signing of an Mou with caution.
Base cutbacks barcode solution company.
Speaker Change: Our cost.
Speaker Change: All driving battery costs for transformation in the electric vehicle market.
These are relationship but.
Enable us to advance the display application.
All right.
Probably graphite to silicon metal.
You will see various benefits, including lower cost longer range and faster charging times.
For the past several months, we have been testing at our lab core share level coatings technology.
Using silicon Ulrich notes with very promising results.
As a result of this early success and to further solidify our commitment to this effort. We recently made a strategic investment in core shale.
Speaker Change: Improving the characteristics of battery performance <unk> is an important endeavor.
Speaker Change: And it will accelerate.
Speaker Change: Adoption and we want to be at the forefront of these technological innovation.
Speaker Change: Turning to markets.
The index is across all our businesses are up from the lows.
Speaker Change: Demand trends beginning to diverge between Europe and the U S.
Speaker Change: We are encouraged by the sustained increase in silicon metal prices, especially in North America.
Speaker Change: Some of the factors contributing to the recent strikes training.
Thanks.
Right.
While supply related factors.
However.
So seeing signs of incremental project in U S demand while demand in the European market remains stagnant.
European price increases have lagged behind the U S market, which has seen an improvement in demand, especially if you have a million.
Speaker Change: I'm also pleased to announce that.
Speaker Change: Hey, Ted.
International Trade Commission.
Speaker Change: Voted in our favor in the trade case against viral silicon imports from Russia.
Speaker Change: Malaysia and Brazil.
The commission preliminarily determined that these ferrosilicon imports are causing material injury to the U S industry.
Here is some background on this trade action on.
Speaker Change: On May 28, together, we see metals and alloys, we filed a petition with the U S Department of Commerce and the International Trade Commission.
Asking them to investigate unfairly traded imports of ferrosilicon from Russia.
Malaysia and Brazil.
These imports are receiving.
Speaker Change: Difficult self cities from their government.
Without putting in predatory pricing practices, which has forced American pharmaceutical producers to idle some of their operations negatively impacting American domestic production and employment.
The Commerce Department will continue its investigations to decide whether further action is needed.
It is expected that the preliminary countervailing duty determination could take place in June and Dr. Bing does that mean.
Dr. Bing: In September.
We expect a positive outcome.
At the same time.
We continue to work with both houses of Congress.
Two parts to that with <unk>.
Dr. Bing: Freezing America silica production backed.
Which was introduced in September of last year.
If passed this bill would adapt if 35% tariff on imports of action.
Sure Charles.
Yes.
As mentioned in our previous call related to Q4.
We redeemed the remainder of the senior secured notes in February and ended the quarter with a stronger financial position in the company's history.
For the first time, a very fair globe is net cash positive.
Last quarter, we initiated our first dividend in the amount go up for three cents per share which was paid on March 28.
We are declaring our second quarterly dividend of $1.03 per share payable on June 27.
In an effort to casino with labor being our capital allocation policy, our board of directors as approved share buyback program, which would be included in the notice of the June annual General meeting.
Dr. Bing: Once approved by the shareholders as required.
We will begin to execute opportunistic buyback.
Dr. Bing: The authorization request is to repurchase up to two other many of the owners of shares over five years period.
Using both discretionary and non discretionary metals.
While we're still cautious about end market demand, we are adjusting our guidance to reflect a stronger pricing environment accordingly.
We are raising the low end of our guidance from 100 to one.
We have done this right.
Yeah Yeah.
One is that $70 million next slide please.
Yes.
Let's start from Silicon metal revenue in Q1 was $168 million.
Versus the fourth quarter.
Dr. Bing: Adjusted EBITDA declined $6 million to $16 billion, reflecting 8% decline over the previous quarter.
Dr. Bing: The decline in EBITDA was primarily driven by lower realized prices, which were down 6% in the quarter.
Our average realized price for silicon metal increased by 2% in Europe and decreased 12% in the Americas compared to the full year.
Yeah.
Dr. Bing: During the first quarter index prices increased approximately 17%.
The difference between the index and our realized price was the result of the three months lag on price.
<unk> four contracted volumes.
We expect to bed.
Sorry, we expect to benefit in the second quarter from the higher index prices in Q1.
Dr. Bing: Overall volumes shipped were up 7% driven by Europe, which was up 30% from the fourth quarter.
The silicon metal outlook.
Is quite different in North America, compared to Europe, where demand remains quite weak with prices being impacted by incremental imports from China and easy supply tightness.
The U S markets.
Continue to be firm with prices increasing into the second quarter.
Demand for our products remains solid as we are shipping twice at both high quality silicon metal to the solar segment in China and Korea next.
Next slide please.
Our silicon based alloy segment.
Dr. Bing: Adjusted EBITDA for Q1 was $40 million down from $35 million in the fourth quarter.
This was mainly due to higher costs, driven primarily by lower energy compensation and problems relative to the prior year quarter.
Well, they all average realized prices were down 5% versus the prior quarter due to weakness in the Americas, which continued to dealer.
Pricing of inputs from Russia, Kazakhstan, Malaysia, and Brazil.
As most of the case you see the difference between the index.
Price was the result of the two month lag on price realization for our contracted volumes.
Okay.
Dr. Bing: Again, the U S market is showing more strength with prices increasing.
I do think that the activity in Europe is more muted.
In its latest April short range outlook.
Work till association cuts.
EU steel production forecast growth by up to two 9%.
Dr. Bing: With the Americas remaining essentially flat with the October forecast at one 4%.
We expect Europe to be more challenging while the U S market is expected to basically potential antidumping action and stronger economic outlook next.
Slide please.
Okay.
Turning now to manganese based alloys.
Dr. Bing: Revenue increased 10% to $66 million in Q1, driven by increased prices and volumes up eight 2% respectively over the prior year quarter.
Dr. Bing: Volumes in North America increased by 446% However, as volumes are off a low base and therefore not meaningful.
What prices in Europe are up 13% CN CRM they have stagnated over the past 30 months due to weak steel production.
Speaker Change: The shutdown in late March of about 30 tools Jericho manganese ore mining failure is.
Speaker Change: There's tight supply.
Speaker Change: Resulting in a meaningful increase ignored prices.
As a result, the bankruptcies alloy.
It also increased.
Given the weak steel production in Europe.
Yes, I mean, this is not improved as much as the U S.
We anticipate that the demand will improve in the second out of this year.
I would now like to turn the call over to Bill <unk>, Our Chief Financial Officer.
The financial results, there's nothing like it.
Thank you Michael.
Speaker Change: Please go.
Speaker Change: Check even though it sounds as home is not very good.
Speaker Change: Can be chip.
Thank you Michael.
Please centers nightstand.
You are welcome attainment.
Sales increased 4% in the first quarter to $692 million.
So $276 million in the prior quarter.
Speaker Change: Thank you Juan we saw increased volumes across all three segments, but we kept prices for silicon metal and silicon offset some of the volume gains.
Speaker Change: Unlucky, yet and then pick up some shelf production.
Please ask your question desktop space.
50% to 66% in Q1, primarily driven by lower equity compensation events and Seattle.
It's tough cost decreased by $9 million in the first quarter to $71 million driven mainly by profit sharing arrangements in Europe.
Adjusted EBITDA in the first quarter, less $36 million less or $60 million in the prior quarter.
During the quarter with approximately $8 million from our 2034.
M. A T M payment linked to boost our EBITDA by the same amount.
As a reminder, these benefits will be collected at least into fast identified.
Net income.
<unk> expenses for the core debt.
38% to $8 million due to the full redemption of the senior secured notes.
The benefit of the debt repayments when they are fully realized.
From the second quarter and onwards.
Next slide please.
I'm on slide 11.
Our adjusted EBITDA margin declined from 60% in the prior year quarter to 7% in the first quarter, primarily due to higher costs, which impact EBITDA by $59 million.
Relative to the fourth quarter.
The higher costs were driven by lower energy competition events and fears of compensation.
Speaker Change: Partially offset by lower raw material and energy prices in the spring.
Silicon metal and Silicon based alloys are also consider you to lower the death of India.
With prices declining six 5% respectively.
They own their lifestyle declined by 2% for the fourth quarter impacted adjusted EBITDA by roughly $9 million.
Speaker Change: Total volume increased by 6% with a small.
$2 million positive impact on EBITDA compared to the prior quarter.
Head office, and now called business contribute approximately $11 million.
And by himself performance of the mining of our mine operations in the first quarter and that's ethically and therefore forecast.
Speaker Change: Yes.
Slide 12 please.
Speaker Change: The first quarter, where you get it installed Tesla.
$180 million.
Driven by the $155 million rebate for Frank energy and $17 million swing in working capital.
And then leave you to $19 million reduction in inventory.
That has been partially offset by income speculative.
Capex I'll close in the first quarter were $18 million versus 26 million, though less than the prior quarter.
And they still cash inflow to pay off the remaining $150 million.
Speaker Change: Senior secured notes.
Speaker Change: The new way for us to regain our share buyback program once they can for their separately in the doing online for that and making.
In March we paid one per cent dividend this year, which we will obtain again on June 27.
Next slide please.
But as I said team.
Speaker Change: We ended the first quarter with a cash balance of $160 million.
So 138 million don't ask me the fourth quarter.
Our financial position and growth from net debt of $101 million to a net cash positive position $79 million, we said test gross debt declining to kind of a $59 million at the end of the fourth quarter to $81 million due to the.
The redemption of the remaining $150 million of senior secured notes.
At this time.
I will turn the call back over to Michael.
Thank you Brad next slide please.
Moving.
Speaker Change: Yes.
Good morning.
Okay.
Don.
Speaker Change: No.
Speaker Change: Yes.
Okay.
Thank you Beth is moving to the key takeaways on slide 15.
Speaker Change: Alright.
<unk> policy is entering a cycle plays as we wait for the shareholder vote to approve the share buybacks.
The first phase quarterly dividend was.
<unk> paid in March with the second quarterly dividend to $1.03 per share declared.
Barbara Blueprint design.
We are in the pole position to take full advantage of the exciting to be able to maintain the silicon reached EV battery market.
Speaker Change: Combined with our robust growth expected in the solar market.
I'm very pleased with our position as the leading western cyclical metal producer.
Speaker Change: <unk> thousand.
To meet the growing demand we are applying for a permit to spud our silicon metal production in the U S.
Erica we're ready for questions.
Thank you to all.
I'll ask a question you will need to press star one on one on your telephone Lake field name to be announced to withdraw your question. Please press star one on one again.
Speaker Change: We will now go to your first question.
Speaker Change: Oh, well ma'am please.
Yeah.
We will now go to your first question.
And your first question comes from the line of Martin Englert from Seaport Research Partners. Please go ahead.
Martin John Englert: Hello, Good afternoon, everyone, hey might be.
Lovely.
Could you provide.
It's available for more detail on these potential U S brownfield expansion, where it might be plan what facility what type of capacity timing the capex associated with it.
Speaker Change: Yeah at this stage he is pretty much monitor to provide.
More details.
And about there.
Of course.
Speaker Change: The first thing we're going to do.
To satisfy demand picked up in U S Isa.
To restart.
Our capacity some of that is ready to be restarted with two furnaces.
But as mentioned in the.
The previous calls.
We expect a significant growth.
Peter West for Silicon metal demand of about 200000, adults, meaning more and more silicon metal in the next five years.
Order to satisfy this addition of demand you would need.
To be.
Part of the suppliers and have enough capacity to satisfy this demand.
This is why we are but we are start when they.
Started the process.
To apply for a permit.
Got it.
<unk>.
In the United States of America.
If you're looking at.
Financing.
We already mentioned that we do not intend.
To go back being a company are very leveraged so we will look at all.
The option to finance.
This expansion whereby we're all cash.
We've subsidies targeting available in the United States and also exploiting some of the partnerships that we have already in place in the United States.
So when youre referencing.
Our partnerships are you referencing partnerships.
We agree that <unk> or more so some of the recent partnerships that you have been.
Speaker Change: Stablish.
Speaker Change: And the.
Kind of batteries market.
Well it all kind of all kinds of partnerships of course.
No secret that we have a partnership with Dow kidney call it towards our plan.
Speaker Change: And you know.
The overall growth in silicon metal using factoring boats, both Dow and unfavorable.
But then we are talking about partnerships that may mature in the solar supply chain or the battery supply chain too.
And there are as you know we have announced our partnership.
Of course shell, but.
As previously declared being the main player in the west.
We have been approached by also by other players.
Other players in the supply chain. So I think we have different.
Different opportunities.
Sure.
What are you mentioned.
The cost would be.
Speaker Change: Be significantly lower for brownfield expansion versus Greenfield, which intuitively makes sense, but Andy.
Any framework as to what I mean.
Speaker Change: Any framework or Gulf closer to what you think it would cost to build a.
Greenfield facility.
Speaker Change: Today in the U S or north American market and once that capacity might look like.
Well.
Let's say.
Our main aim for silicon metal plant.
We will then have a capacity of 50 <unk>.
Maximo legislate 60000 tons of silicon metal Green.
Green field that we estimate that it will require about $400 million or north of this number.
Speaker Change: When you'll be in a brownfield.
Speaker Change: You take a big fraction of this cost.
Speaker Change: Our two.
For the same for the same capacity.
Speaker Change: And I'll talk.
You can't get much faster.
And Youll know.
When you start and this is why we are applying towards the permit because then we can.
Wow.
Things materializing, the supply chain of new market that we were going to be much faster we think in executing.
Let's move on to execute.
Speaker Change: Okay.
You noted.
Speaker Change: Big fraction of the cost is taken out is that something like 25% of the cost versus.
Versus greenfield, 50% more than in the wild.
Sure.
Okay.
Okay. That's extremely helpful. Thank you for that.
Speaker Change: I wanted to pivot and talk about the raw materials energy costs increased 29% sequentially at the group level with $257 million.
Then there were some puts and takes on cash costs within the businesses within silicon metal cash cost per ton I think it was about 28 53 that was actually a bit lower by about $70 a ton silicon based alloys.
Desktop.
About 360, a ton sequentially question.
Speaker Change: Question is looking ahead to Q could you touch on unit cost expectations across the businesses based on how you see things transpired to date.
Yes.
Speaker Change: Did you say it would be to say it's stable.
Speaker Change: No.
Kathy.
In the second half of the year.
Speaker Change: Hey.
<unk> vessels.
After the amendment signed leases.
Speaker Change: Yes.
Lucky as a discussion of our candidate.
Yes right.
Yeah, they need with us at the D C now.
Before our explanation actually and we're discussing that with media.
At each of our core media right. So this could be.
David.
Is the gap quite in terms of cost.
Number one.
And then as well on the on the heel to they did at Scioto.
I think the second half of the a could that be a little bit higher.
Speaker Change: The compensation vessels.
H one so this could that be.
The offset on the other side and I'll, let the avs will be offsetting.
This increase of the of the M E T pricing services.
Nick Scott.
Speaker Change: This asset is going to depths of course.
Last but not least.
We're really sorry about that lately.
Linda deadly nature of these costs.
Speaker Change: We are working on ebay at the moment.
Speaker Change: And hopefully we can shall I say.
Towards the end of the year.
The nature of western unforeseen events.
Speaker Change: Now there is another element if you allow me to add.
Which is more short term because Martin was asking.
Speaker Change: About the second quarter the cost of.
Speaker Change: Manganese ore.
Growing up significantly as a consequence so.
The Australian shutdown.
This doesn't have a big impact on us in the second quarter that will start having a significant impact on Monday, when they use our lowest cost starting the third quarter.
Speaker Change: This is why we are reacting.
Increasing prices of other always as much as we can in order to.
Stablish.
Speaker Change: Delta two of manganese ore and five out of bundle is not only pricing.
Speaker Change: Okay. So several puts and takes moving through the course of the year.
Speaker Change: And his team.
Certainly year on year lower energy credit.
From the French power agreement and then it sounds like there is maybe some higher.
Raw materials in the back half forgetting magazines for a second but the.
Silicon based alloys and silicon.
Some elevated raw materials, but youre going to get some more favorable what essentially credits regarding C. O. Two so maybe.
Sure.
Correct to think of it as second half silicon metal.
And silicon based alloys unit cost, maybe see some relief and down marginally two modestly.
Well.
Yes, there is.
Speaker Change: There is.
Speaker Change: It's difficult to.
Speaker Change:
Speaker Change: To give you a picture here of late.
Let me pause for a cycle when when we look at.
<unk> situation.
We would expect.
Also some pressure from.
Energy market as you know we are going to we buy fuel most of our energy in Spain to market.
We expect to hear about.
Hi.
All of that.
Okay, and that's a cost.
In Spain in the second half of the year.
So this will impact mainly our operation.
Speaker Change: In suburban.
Uh huh.
Looking.
The other critical geographic areas.
For for Silicon metal.
Yes, thanks, Tara on there.
<unk>.
Speaker Change: As your cost.
So the first half.
Okay understood.
If I could one last one the silicon metal volumes were quite.
Quite strong for the quarter and you had called out strength in.
Yes.
Is that a contributing factor how do we think about the volume trend now given that it seems.
Incremental contribution when we proceed through the year do you even have any car.
Targeted goalposts for silicon metal volumes for the year or.
At a minimum and maybe what youre seeing with <unk>.
Speaker Change: Well be.
Clearly we are.
We have already started our plant plants in France.
In the second quarter.
And then.
Speaker Change: So we expect.
To sell more.
More iron volumes.
D.
The point is the following I would go back to the market dynamics.
U S.
The monthly is greatest.
Stronger.
Speaker Change: I would say because.
Speaker Change: Silicones demand of our customers is better.
Alumina demand from Gambro Wyndham players is better.
So U S.
Aspect to become more and more robust at this stage.
Well in Europe.
Well, we have our production up and running.
We don't see any improvement in demand of the commentary.
I was hoping the market seems to be.
Speaker Change: Given the weaker.
Then in the previous quarters.
So.
I would be very caution was off.
Volume and ASP.
They should.
In Europe.
Okay I appreciate all that detail.
Ill pass it along for others have their questions. Thanks, and good luck.
Thank you.
Speaker Change: We will now go to the next question.
Speaker Change: And your next question comes from the line of Lucas pipes from B Riley Securities. Please go ahead.
Thank you very much operator, good day everyone.
Marco I wanted to ask you kind of a higher level higher level question.
Kind of looking back over the last few years you view.
The operations improve the commercial side fixed the balance sheet.
And now obviously, you're in a net cash position.
Congratulations to your team on that accomplishment.
So it appears you have a lot more.
Opportunity strategically to make me do what you wanted to and I Wonder if you could maybe lay out the priorities for.
Speaker Change: For the company over.
Speaker Change: Over the next couple of years, Thank you very much.
Austin. Thank you for the question look at Us.
Oh of course.
Stimulates my my ambition.
Hi.
I want to.
Underlying underpin that.
Most of our business has not changed we are still playing.
In Vermont.
And as a consequence, our performance short term.
He is traveling today still linked to the market dynamics that I commented before.
Speaker Change: Of course.
We are extremely bullish about the future because.
We are.
Involved.
And a lot of strategic discussions with different partners for batteries, particularly in U S. But also in Europe.
Speaker Change: We are sure will drive to a major uptick.
Silicon metal consumption.
Speaker Change: In the world.
I think we have never been so close to solve their framework swelling program amongst silicone may come for batteries and this is why.
We believe in what we're doing with core shale, we have invested in core shell.
And we think that we have.
The courseware solution win.
Speed up the introduction of a massive introduction of CV comito in batteries.
Speaker Change: Looking at solar.
Speaker Change: There are different so you will supply chains that are getting established from.
The traditional markets.
Speaker Change: China and southeast Asia.
Speaker Change: And.
Okay.
Alrighty.
To exploit to explore these opportunities.
So growth is for sure silicon metal now we need to look at profitable growth.
And why.
Key.
The momentum that we are looking at is the polysilicon market situations because.
There is if demand does excess of capacity of polysilicon into China.
Speaker Change: Hi.
There is.
The Chinese have been.
Difficult piece to place volumes and as a consequence polysilicon price in China has dropped further.
A little bit more than $6 per kilo 2012, 35, it's about one year one year enough ago.
And this is causing a lot of dynamics.
In the in China.
The polysilicon market outside of China is around steel around 'twenty, one 'twenty $2 per kilo.
We'll see.
Speaker Change: With the new supply chains setup for solar.
Mainly in the Middle East.
Our our position is very good because we have the assets at the right place.
Speaker Change: Uh huh.
Strongly back integrated with the right quality of CT.
Speaker Change: So.
My aspiration logos they used to dramatically grow this company.
Bye.
Growing the silica medco envelope.
Thank you.
Quick follow up on on course shell.
Speaker Change: Sorry, if I missed it but what what is approximately the.
The investment or what were the terms of the investment and.
What percentage of the company, which you are.
Maybe one today or eventually own.
And also.
Not familiar with with their specific.
Speaker Change: Technology, maybe you can comment quickly on on why you think this is.
The right horse to bet on.
In the battery market. Thank you very much yeah. Thank you Luca.
Investment is a few million dollars.
But we have the right to further invest in the next round of capital raise for the company.
The beauty of this thing at this stage is that at.
All our cash Lucas certainly promising.
And these tests that are being made on the on cell samples right.
Speaker Change: Reproducing the same test course show there is made they are all based on our silicon.
Do you see in Europe.
The key is to go through the <unk>.
<unk> discharging cycles and.
And basically the software CEO Terry.
Don't change this means that you can charge in the recharge of this voucher is faster.
Guarantee a longer tenure to the battery.
Speaker Change: The beauty.
I think this opportunity is that at the beginning of next year together with core shale.
We will send calls directly promoting industry, we've six P M per box.
And this basically.
Is it leapfrog.
No because you don't need to go through.
Battery element microfracture or battery manufacturer, we will.
The pilot plant that produces more quantities of batteries that will represent our technology.
Speaker Change: Based on our.
Speaker Change: Testament to of course show.
Speaker Change: Don't require any change.
In terms of layout of digital factories.
And we love the opportunity to be validated directly by the automotive Oems.
I I consider these breakthrough of course.
To be validated right.
You know that a new solution in battery takes time.
No.
We are talking about.
Significant growth.
Successful in that time range of three years from now.
But.
Speaker Change: At this stage everybody seems to be working fine and we are are nice and neat.
Making progress.
On this development in life.
Thank you thank you Marco.
Speaker Change: It's helpful.
Beatrice.
Speaker Change: So some quick quick.
Speaker Change: Quick one for you.
In terms of working capital anything major to be aware of for the balance of the year.
Though it can be lumpy. So if you could maybe flag anything that might stick out from a from a working capital perspective, I would appreciate that and then.
With the updated guidance range.
Speaker Change:
Speaker Change: What's been holding back.
Increasing the high end of the guidance obviously, good to see the low end of the guidance come in here, but.
Speaker Change: Would appreciate your comments as to why not the whole range shifted.
Just the way thank you for for any additional color there.
Maybe I'll start from the second part of your question.
Lucas if you don't mind on the guidance.
Okay.
The reality is that there are.
A number of.
Factors.
And there are opposite Fox stuffs, meaning we are where we are facing a sell out of different trends in our view at the moment.
As I mentioned.
Speaker Change: Let's start from Europe.
Yeah.
Demand is very weak.
Our prices.
Speaker Change: We have been stabilizing in the first quarter are trending down now.
Speaker Change: In the second quarter.
Sure.
Mainly too soon.
Speaker Change: Apparel silicon right.
And you asked them.
The opposite.
Trend.
<unk>.
Demand going up in silicon metal price are enforcing.
Aluminum.
This is Robert.
Our silicon is reinforcing our pricing view of what I mentioned before during my speech.
Then you have another element, which is money that is or the as I've mentioned before manganese ore prices skyrocketing and D. CS.
Speaker Change: Very difficult for us because.
We sell in Europe, where steel demand.
As I mentioned before it is.
As a reduced versus expectations. So.
Monday is not there in the oil prices going up.
As I mentioned before.
Speaker Change: <unk> market price in Europe in the second half of the year is expected to go up so.
Speaker Change: Yes, there is.
We have increased the bottom of our guidance because.
We see a slightly better price because we trust in our capabilities to reduce cost.
Thanks Mitchell.
Cost program.
There are also a lot of challenges, particularly in the in.
In Europe so.
<unk>.
This is why at the end we ended up increasing the bottom end so youre.
Speaker Change: This is where we feel comfortable.
Speaker Change: I think.
Then.
Maybe I'm jumping to the SME on the working capital.
Okay.
It means that there is not.
Okay.
Yes of course.
So for last year.
Got.
Speaker Change: Okay.
I mean I'll follow offline. Thank you Juan <unk>.
Our model is the one we started releasing working capital.
I've been.
Speaker Change: That does have some he's got such limited Q1 that we are seeing now.
So what's happening is I think more.
Okay.
Speaker Change: Right.
It will ramp up.
Speaker Change: That's more lumpy.
Our qualified plans someone's HMH labs.
Speaker Change: Oh.
Absolutely.
Thanks.
Yes.
In the southwest.
So it'd be L.
This ethylene along the west coast.
For the Isa.
Yes.
Speaker Change: Both have been anything with it.
Speaker Change: Great.
Thank you.
Speaker Change: Okay.
That makes sense.
Now for the for the rest of day.
And that doesn't work unless the bookshelf.
And my last one.
Thanks for the rest of the year.
Speaker Change: In the U S.
Over the space right.
So when we look at the other detail.
Speaker Change: With that I would say.
We should be expecting.
Let's see.
Yes, as you say, Paul look I think it's a little bumpy.
So I would expect there and maybe.
It's more like the chocolate chips in our portfolio.
And this will not be.
That's way.
<unk> was because of what mark relation on the manganese ore prices right. So the.
And the prices of the or question is increasing.
With that let me nothing going on there first of course.
Well, let's see.
So we see yes.
Okay.
Okay. Thank you very much for all the for all the color.
Mark go and continued best of luck.
Thank you.
Speaker Change: Thank you once again, if you would like to ask a question. Please press star one on one on your telephone keypad.
We will now go to my next question.
Speaker Change: And your next question comes from the line of John <unk> from <unk> Capital. Please go ahead.
Okay.
Hi, Good afternoon, most of my questions have been answered I did have one.
I noticed in the most recent 20-F.
Marco that got it.
Speaker Change: <unk> shares that you beneficially own as well as the number of shares that.
Mr Madrid owns.
Speaker Change: Increased substantially from the prior 20-F.
And I was just wondering is that due to grants or to open market purchases or some combination of both.
If you if you ask tobacco bulks.
Sorry, if Madrid, Mr. Madrid is also here as.
Due to both.
Okay great.
Great well, it's good to see thanks very much.
Thank you. Thank you.
Thank you.
Speaker Change: There are currently no further questions I will hand, the call back for closing remarks.
Thank you.
Let's go to the closing.
In a nutshell.
Speaker Change: I never really to say that we are excited about our prospects in solar in lithium ion battery market.
And are well positioned to take advantage of improving the fundamentals.
Pat that we expect in our core market I want to thank you all of you for your participation and we look forward to hearing from you on the next call have a great day.
Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.
Hum.
[music].