Ferroglobe PLC (GSM) Earnings

Management highlights

### Strategic Direction and Shareholder Value Drivers - Grow a scalable Western critical material platform leveraging existing furnace infrastructure, metallurgical expertise, and existing customer relationships to minimize greenfield capital expenditure and accelerate time-to-market - Lower overall cost structure via footprint optimization, concentrating production at the most competitive assets and repurposing underutilized sites for new production - Restart low-cost 120,000 ton annual capacity operations in Venezuela, with flexible production capability for silicon metal, ferro-silicon, and manganese alloys, to add footprint flexibility and enable higher value production at U.S. facilities - Strengthen core businesses through trade protection measures to counter unfair dumping, aligning with ongoing supply chain realignment in the U.S. and Europe ### Critical Materials Expansion Progress - Successfully completed industrial-scale test production of ferromolybdenum in an existing furnace; the North American ferromolybdenum market is ~8,000 tons per annum, representing a >$300 million annual market opportunity - Successfully demonstrated magnesium production at existing facilities; North American annual magnesium demand is ~60,000 tons, representing a $450 million annual market opportunity, with Western markets currently heavily dependent on Chinese imports - Evaluating additional production opportunities for other high-value critical materials including ferrovanadium, antimony, silver, and gallium, with additional industrial-scale testing planned for later in 2026; initial commercial activity is targeted before the end of 2026 - Constructive, advancing discussions with U.S. government agencies (Department of Energy and Department of Defense) to support domestic critical material capacity development ### Operational Segment Updates - Silicon metal shipments grew 34% QoQ, with 70% growth in Europe and 80% growth in North America; prices improved 5% QoQ in the U.S. and 6% QoQ in Europe, though volumes remain below 2024 levels due to low-priced imports from China and Angola - Silicon-based alloy volumes hit a five-year high, with 31% EU growth offset by an 11% North American volume decline due to increased imports from third countries; European safeguards have not been effective due to substitution of dumped silicon metal for ferro-silicon - Manganese alloys have outperformed, with Q2 index prices up 10% QoQ and up 25% since November 2025 safeguards implementation, with upside potential from new enhanced steel safeguards effective July 1, 2026 ### Financial and Operational Highlights - CapEx hit $17 million in Q2 (driven by a charcoal plant investment in Spain), which management expects to be the peak quarterly CapEx for 2026 - Net debt declined $17 million QoQ, with adjusted gross debt down $20 million; the company maintained its quarterly 1.5 cent per share dividend

Guidance

- Management expects Q2 2026 to be the peak quarter for full-year 2026 capital expenditure - Working capital is expected to see a net release of approximately $15 million in the second half of 2026 - Initial commercial activity for new critical material products is targeted before the end of 2026, with clear competitive positioning for new ferroalloys expected by year-end - A U.S. permit decision for restarting Venezuelan operations is expected by the end of Q3 2026 - Improved silicon metal prices and demand in the U.S. are expected in the second half of 2026 following finalized U.S. trade measures

Segment performance

1. Silicon Metal: Revenue increased 26% quarter-over-quarter (QoQ) to $106 million, contributing 27.97% of total Q2 2026 revenue. Shipments grew 34% QoQ to 41,000 tons, while average selling price (ASP) declined 6% QoQ to $2,592 per ton. Adjusted EBITDA was a loss of $2.7 million, compared to a $2.3 million loss in Q1 2026. 2. Silicon-based Alloys: Revenue increased 2% QoQ to $125 million, contributing 32.98% of total Q2 2026 revenue. Shipments rose 4% QoQ to 63,000 tons (the highest level in five years), with ASP declining 1.5% QoQ to $1,986 per ton. Adjusted EBITDA increased to $15 million from $7 million in Q1 2026. 3. Manganese Alloys: Revenue was unchanged QoQ at $108 million, contributing 28.50% of total Q2 2026 revenue. Shipment volumes were marginally down QoQ, offset by a 2% QoQ increase in ASP. Adjusted EBITDA increased to $30 million from $27 million in Q1 2026, with positive price momentum driven by effective trade safeguards. Total company revenue grew 9% QoQ to $379 million, with adjusted EBITDA up $10 million QoQ to $13 million and free cash flow improving to $20 million from negative $16 million QoQ.

Risks & headwinds

- Persistent unfair dumping of low-priced silicon metal from China and Angola has kept prices and volumes below 2024 levels in Europe, and continues to exert downward pricing pressure - Increased imports of silicon-based alloys from non-traditional suppliers (Angola, Azerbaijan, Bhutan, Uzbekistan) have negatively impacted North American pricing and volumes - Existing European trade safeguards for ferro-silicon have not delivered expected benefits due to substitution of dumped lower-priced silicon metal, keeping the European market challenged - Uncertainty around the timeline and outcome of the European Commission anti-dumping investigation into Chinese and Angolan silicon metal imports, which will dictate European supply conditions - The proposed magnesium production expansion requires $180-$200 million in capital expenditure before government subsidies, creating capital allocation pressure - Share buybacks are currently paused as the company prioritizes capital for critical materials expansion, with no timeline for resumption provided

Analyst Q&A

• Q: How advanced are discussions with U.S. government agencies for critical material support, and when will the market get more details on product targets and economics?

  A: Discussions with the Department of Energy and Department of Defense are progressing rapidly, following formal agency processes with detailed proposals submitted. Specific target products (magnesium, ferromolybdenum, silver, gallium, other critical ferroalloys) have already been publicly disclosed. Most new ferroalloys can be produced with minimal capex using existing infrastructure, and industrial testing is complete for ferromolybdenum, with additional tests planned by year-end; clearer cost and competitive details will be shared by end of 2026.

• Q: How will the White House's new polysilicon price floor policy benefit Ferroglobe?

  A: The policy protects the remaining domestic U.S. polysilicon producers, who are cost-disadvantaged vs. Chinese producers due to energy costs. If set at an appropriate level, it will support domestic polysilicon capacity expansion, which will in turn increase demand for Ferroglobe's U.S.-produced silicon metal.

• Q: What is the scope of the company's ongoing cost reduction and footprint optimization programs?

  A: Management is still revisiting the full asset portfolio to concentrate production at the most cost-competitive assets, and repurpose other sites for new critical material production. Exact dollar targets for cost savings will be shared later this year once the transformation plan is finalized.

• Q: Is further upside expected for silicon-based alloy volumes, and what is the outlook for share buybacks?

  A: European ferro-silicon volumes have already reached the sustained level expected for H2 2026 under existing quotas; U.S. volumes have modest growth potential linked to higher steel capacity utilization, but pricing remains pressured by new import sources. Share buybacks are currently paused to prioritize capital for critical materials investments, but management re-evaluates the opportunity on an ongoing basis.