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Good morning, ladies and gentlemen. Welcome to Ferroglobe's first quarter 2026 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 that time. As a reminder, this conference call may be recorded. I would now like to turn the call over to Alex Rotonen, Ferroglobe's Vice President of Investor Relations. You may begin.

Good morning, everyone, and thank you for joining Ferroglobe's first quarter 2026 conference call. Joining me today are Marco Levi, our Chief Executive Officer, and Beatriz García-Cos, our Chief Financial Officer. Before we get started with 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 the exhibits to those filings, which are available at ferroglobe.com. In addition, this discussion includes references to EBITDA, adjusted EBITDA, adjusted gross debt, adjusted net debt, and adjusted diluted earnings per share, among other non-IFRS measures. Reconciliations of non-IFRS measures may be found in our most recent SEC filings.

We'll be participating in the B. Riley Annual Investor Conference in Los Angeles on May 20th. We hope to see you there. With that, I'll turn the call over to Marco.

Thank you, Alex, and thank you all for joining us today. We appreciate your continued interest in Ferroglobe. Overall, market conditions for ferroalloys have become more favorable, highlighted by our first quarter silicon-based alloys volumes, which grew 18 sequentially to the highest level in nearly five years. This segment was driven by growth in ferrosilicon in both Europe and North America. Our manganese-based segment was also strong, with volumes increasing 6%. The improvement in Europe was helped by recently implemented safeguards. Anti-dumping and countervailing duties, tariffs, and rising steel production have all strengthened demand for ferrosilicon in the U.S. This creates a more supportive silicon-based alloys market environment across our core regions. While the silicon metal market in Europe remains under continuous attack from China and its proxy, Angola, we are encouraged by recent comments.

European Trade Commissioner Maroš Šefčovič has reaffirmed a commitment to protecting the silicon metal industry and is actively evaluating measures addressing imports from China and Angola. In the U.S., the silicon metal cases covering Angola and Laos are now final, with anti-dumping and anti-circumvention duties of 78.5% and 173.5% respectively, including the general tariff of 10%. The Department of Commerce is expected to set the final rates for Australia and Norway in late June, with the U.S. ITC expected to announce its final decision in late July. These measures are critical to ensuring a level playing field and supporting the long-term health of our industry. Given recent events in Venezuela, we see a compelling opportunity to reopen our operations there. These assets offer strategic proximity to the U.S. market, along with access to low-cost energy, raw materials, and attractive logistics.

We are actively pursuing a potential restart of our operation in Venezuela to take advantage of its geographic proximity to the U.S. At the same time, we are evaluating CapEx requirements, energy availability, and cost structure to determine the viability of restarting. As a reminder, we have three large ferrosilicon furnaces with a combined capacity of 90,000 tons and the flexibility to convert them to silicon metal when market conditions dictate. There is also a 30,000 ton manganese alloy furnace originally built as a silicon metal furnace. We are strategically positioning Ferroglobe to scale our platform to increase our capacity utilization. Our core capabilities, large-scale electric furnace operations, advantage access to raw materials, and decades of proprietary process expertise are directly applicable to a broader range of critical materials and alloys. This is why we are actively pursuing expansion beyond our traditional portfolio.

We are building on a proven base, not starting from scratch. Our history of producing materials such as magnesium and ferrochrome combined with deep expertise in high-temperature reduction and related processes give us a strong technical and operational foundation. This is a natural evolution of our business. The same industrial platform that supports our leadership in silicon metal and ferroalloys can be redeployed to address growing supply gaps in other strategically important materials. As demand accelerates and supply chains realign, this optionality materially extends Ferroglobe growth runway. Our Western asset footprint is a clear competitive advantage. It places us at the center of rising demand fueled by higher defense spending, AI adoption, the energy transition, and the need for secure domestically anchored supply chains. Recent U.S.-EU agreements on critical materials reinforce a clear message: trusted local production is now a requirement, not a preference.

Given that, it is crucial to understand what happened to critical materials production in the West, and how it lost its advantage. It was not as access to mines and critical minerals was lost. Rather, China became the dominant processor of these materials into critical materials. The market structure shifted to favor price over all other factors, rendering Western production unprofitable. All that is changing now to favor the reliability of a trusted supply chain. Taken together, this positions Ferroglobe to play a larger role in the next phase of industrial and geopolitical realignment, leveraging assets we already own, capabilities we already have, and markets that are moving decisively in our favor. Moving to Coreshell. We continue to develop our partnership to advance the use of silicon in lightweight, high capacity, and fast charging batteries for EVs and drones.

In March, we co-led a Series B round with a $7 million investment, increasing our total to $70 million and representing an ownership stake of approximately 10%. Coreshell started production from its current 60 ampere plant, marking an important milestone, and has already begun selling batteries to robotics and defense customers. In addition, Coreshell has signed multi-year sampling and qualification agreements with automotive OEM customers, positioning it to participate in the emerging growth area in critical materials. In March, we signed a binding term sheet for a multi-year silicon metal supply agreement with Coreshell. Overall, we are operating in an improving environment for ferroalloys, executing on our strategic priorities and positioning the company for sustainable growth across both our core and emerging businesses. Next slide, please.

Strong ferroalloy volume growth in the first quarter drove shipments up 7% to 177,000 tons, primarily due to an 18% increase in silicon-based alloys. This resulted in a 6% increase in quarterly revenue to $348 million. Adjusted EBITDA declined to $3 million, and free cash flow was a negative $60 million. Beatriz will provide more detailed comments in her section. Next slide, please. I will start updating our segments from silicon metal. The silicon metals market remains under pressure due to continued aggressive pricing by imports, mainly from China and Angola. These dynamics primarily impacted Europe, as silicon metal was excluded from recent safeguard protections. As a result, total volumes declined 6% from the fourth quarter, and we decided not to participate at uneconomic prices.

We partially mitigated this by converting three silicon metal furnaces to ferrosilicon, allowing us to capitalize on better market conditions in this segment. Two of the furnaces were in Europe and one in the U.S. was converted last year. This strategic shift underscores the value of Ferroglobe's flexible operating model and our ability to respond dynamically to evolving market conditions. Silicon metal volumes declined 2,000 tons to approximately 31,000 tons in the first quarter. North American volumes grew a solid 15%, while EU volumes continue to face predatory import competition, resulting in a 23% decline. In addition to China and Angola, low price imports in Q1 came from Malaysia, Kazakhstan and Laos. Norway is the largest importer of silicon metal to the EU, accounting for more than 60% of total imports.

The polysilicon market remains weak, with silicon prices reflecting soft demand and oversupply. The aluminum segment, on the other hand, is showing initial signs of improvement as some Middle Eastern production is offline due to the Iran conflict. The chemical sector remains soft due to Chinese imports of siloxanes and silicones into Europe and in the U.S. U.S. index prices declined 3% in the first quarter compared to the fourth quarter, while EU prices declined by 6%. Although we remain cautious about the pace of recovery in Europe pending more decisive trade actions from the European Commission, recent comments from the Trade Commissioner regarding protecting the EU market are encouraging. In the U.S., we expect the market conditions to improve in the second half of 2026, bolstered by antidumping and countervailing measures.

In the medium term, there is a significant growth opportunity for silicon metal in the U.S. as Tesla aims to build a large, vertically integrated supply chain to produce 100 GW of solar capacity by the end of 2028. Next slide, please. Silicon-based alloys volumes reached their highest levels since the second quarter of 2021, with total shipments increasing 18% to 61,000 tons, driven by 21% growth in Europe, despite a contraction in steel production in the first quarter. The North American growth was equally strong at 20%. After a 22% price jump from late October to early December, following the safeguard announcement, EU ferrosilicon index prices declined 9% in the first quarter. The reason for the recent price decline is two-fold. First, import volumes were high prior to November safeguards, leading to elevated inventory levels.

Second, the use of low price silicon metal by steel producers to replace ferrosilicon is disrupting ferrosilicon market dynamics. They are still up 9% since the pre-safeguard announcement, and we expect pricing to be positively impacted in the second half due to safeguards as excess inventory is depleted. The U.S. ferrosilicon index was flat in the first quarter. As I mentioned earlier, we converted one silicon furnace in U.S. and two additional furnaces in Europe to ferrosilicon to take advantage of shifting demand. Overall, we're optimistic that 2026 will be a strong year for silicon-based alloy volumes for ferrosilicon. An additional catalyst for the second half of the year is anticipated from enhanced EU steel safeguards, which are expected to increase EU steel production by 12.5 million tons annually, representing approximately 10% growth.

These measures are expected to take effect on July 1st, 2026. Next slide, please. Our Q1 manganese shipments posted a strong quarter with a 6% volume increase to 86,000 tons, up from 81,000 tons in the prior quarter, helped by safeguards. Europe accounts for the majority of the manganese sales. Manganese alloy index price surged after safeguards were announced in November and are up 18% since pre-safeguards, with year-to-date levels roughly flat. We are constructive about the 2026 manganese outlook and expect to report strong volumes for the remainder of the year. Strengthen steel safeguards are another catalyst, as they are expected to be implemented in July and improve EU demand. I would now like to turn the call over to Beatriz García-Cos, our Chief Financial Officer, to review the financial results in more detail. Beatriz?

Thank you, Marco. Please turn to slide nine for a review of the first quarter income statement. Total Q1 sales increased by 6% to $348 million, driven by a 7% increase in total volumes, with ferroalloys being the primary driver. More specifically, silicon and manganese-based alloys volumes increased 18% and 6% respectively, while silicon metal shipments declined as we prioritize price discipline in Europe. Raw material and energy costs, after adjusting for the $5.5 million impact from power purchase agreement, declined to 66% of sales, down from 67% in the fourth quarter. As a reminder, the PPAs are marked to market using fair value, and we exclude them to better reflect comparable quarter-over-quarter performance. Despite a strong volume growth, adjusted EBITDA declined to $3 million.

Higher energy, transportation costs, and raw material inflation began to impact costs in March as a result of the conflict in Iran. Next slide, please. Silicon metal revenue declined 13% to $84 million. Due to a 6% reduction in volumes and a 7% fall in prices to $2,754 per ton. Adjusted EBITDA declined $3 million in the first quarter to an EBITDA loss of $2 million, resulting in a negative margin of 3%. The margin contraction was driven by lower realized prices, partially offset by improved cost in Canada and the restart of furnaces in Spain and France. Next slide, please. Silicon-based alloys revenue post another strong quarter with an 18% increase to $122 million, driven by an 18% sequential increase in volumes to 61,000 tons.

Realized prices were essentially flat with the fourth quarter at $2,016 per ton. Adjusted EBITDA decreased by $9 million to $6 million sequentially due to higher production cost in Spain, energy and raw material cost in Spain and the U.S. Margins declined 9 percentage points to 6%. Next slide, please. Manganese-based alloys revenue increased 16% to $107 million from $93 million in the prior quarter. The improvement was due to a 9% increase in realized prices to $1,250 per ton and a 6% increase in volumes to 86,000 tons. Adjusted EBITDA in the first quarter was $10 million, up from $9 million in the fourth quarter. Adjusted EBITDA margins remained solid at 9%.

Inflation in manganese ore, combined with higher transportation and energy costs, offset most of the price gains. While the Iran conflict continues to affect near-term logistics and raw material cost, we expect this cost to be temporary. Next slide, please. For the first quarter, our cash flow from operations was negative $6 million due to a $13 million investment in working capital as we built inventory and increased accounts receivable balance to support higher volumes. We reduced our CapEx by $3 million-$11 million in the fourth quarter. For the first quarter, our free cash flow was negative $16 million. Next slide, please. As announced previously, we increased Q1 dividend payout by 7% to $3 million, which was paid on March 30th.

Our next dividend of $0.015 per share, in line with the previous quarter, is scheduled for June 29th, payable to shareholders on record as of June 22nd. We fund strategic investments such as Coreshell to support near-term operating needs and long-term growth opportunities and repurchase a modest 5,000 shares in the first quarter. Although our net debt position increased to $55 million in the first quarter, we remain in a solid financial position to support our growth objectives. At this time, I will turn the call back to Marco.

Thank you, Beatriz. Before opening the call to Q&A, I'd like to provide key takeaways from today's presentation on slide 15. We began to see the benefits of various trade measures in the first quarter, as evidenced by stronger volumes of silicon-based alloys and manganese alloys. Unfortunately, the prices still reflect an imbalanced market environment. We believe that the pricing will strengthen in the second half of the year, as we have said before. Ferroglobe is uniquely positioned to lead the next era of critical materials supply with the asset platform footprint and expertise to serve Western markets where trusted local production has become a global imperative. While geopolitical disruptions continue to create near-term volatility and pressure logistics and raw material costs, we believe these impacts are temporary.

The structural improvements underway in our markets, such as strengthened steel safeguards, CBAM, and onshoring, underpin our confidence in a stronger second half and longer-term value creation. Operator, we are ready for questions.

Thank you. If you wish to ask a question, you will need to press star, one, one on your telephone and wait for your name to be announced. To withdraw your question, please press star, one, one again. We will take our first question. The question comes from Martin Englert from Seaport Research Partners. Please go ahead. Your line is open.

Hello. Good day, everyone. I have a little question.

Hey, Martin.

Good to hear from you again. You had discussions with the U.S. and/or EU governments regarding potential grant opportunities for growth when it comes to critical materials. If you could just touch on what specific metals or alloys you're most strongly considering, maybe pursuing here.

Yeah, I mean, the different departments, government departments in U.S., we have been talking to. The recent agreement between U.S. and Europe on planning this critical material partnership confirmed the intent of governments to increase the independence from China on critical materials. Today we produce gold, silicon metal, and manganese-based alloys, which are critical. In the past, we have been producing other materials in our furnaces, in particular ferrosilicon chrome and ferrochrome. A long time ago, FerroAtlántica was producing magnesium in Europe. On top of that, we have technologies that can be applied to our furnaces to produce other critical materials for Europe, critical minerals for U.S.

At this stage, I cannot be disclosing which materials we're gonna produce. I can tell you that we went through a serious process where we started from more than 100 options, and now we are down to new 10 critical materials that we can produce either by in the current furnaces that we have or in slightly modified furnaces with minimum CapEx. In some cases, like magnesium, we will need to invest in a new plant. What we are doing right now, we are validating the market attractiveness of these 10 new materials. We plan to drive our conclusions in the next few weeks when we present to the board how we intend to start these critical minerals diversification at FerroAtlántica.

You touched on this, but the maybe goalposts for associated CapEx, correct me if I misheard you, but it sounds like several of the options for materials that you're considering might be very minimal, where the furnaces wouldn't need much. Others sound like they're fairly nominal investments with some furnace upgrades. I believe you said magnesium would require more substantial investment, and I believe you said a new plant. Just goalposts on if you would decide to go forward as something and single digits, millions of dollars at the low end to tens of millions. What would it look like on the high end with CapEx?

We are consolidating the numbers right now to go to the Board with some NPV estimates to select the most attractive opportunities. You got it right. Some of these materials really don't need further investment. Probably they need some new permits because we have not been producing these products for a while. We need to assess the reliability of raw material, new raw material sources. You are correct. For some of these materials, we don't need any additional CapEx. For other materials, we need a little bit of CapEx in the single digits million dollars. Of course, due to the pressure that we have from governments to start the production of these products, we will give priority to the easier and more profitable to produce critical materials or minerals.

Okay. Thank you for that detail. Be curious to learn more over the coming weeks or months as you have more to share. When it comes to the increased logistical expenses, are you implementing surcharges across your product offering to cover both the inbound and outbound inflation associated with this?

Yes, we are implementing surcharges both in Europe and in the U.S. We're implementing a surcharge of EUR 30 per ton in Europe and $40 per ton in the U.S. with different level of acceptance. There are businesses like chemicals who are doing that. They're more used to this practice. Other businesses like steel, which are much more resistant to that. I think that to anyway, in the next few weeks, we are gonna be forced to increase prices across our product mix as well, because the prices that we see today, particularly in Europe, particularly on silicon metal and ferrosilicon, are simply unacceptable for everybody. I think the market should move and there is a lot of cost pressure coming from freight.

Gas is influencing the energy cost. All the critical raw materials of our supply chain have gone up. We need to try to pass these increases through the supply chain.

When it comes to the pricing dynamic, I mean, within the silicon-based alloys business, there's been fairly favorable trade measures across your asset footprint. Underlying demand seems like it's pretty favorable or moving in a quite a bit better direction. What do you think is the inhibiting factor that hasn't allowed you to raise prices thus far in the EU and U.S. market for products like ferrosilicon?

Yeah. I would say that we have to consider different dynamics here. In Europe, before safeguards were announced, a lot of ferrosilicon has been moved by the usual countries, and inventories were pretty high. The second point is that Angola had been switching furnaces to ferrosilicon, dumping ferrosilicon in Europe. Angola is not subject to any kind of safeguard. The third element, due to the low price of silicon metal in Europe, we have seen significant ferrosilicon volumes being converted by the steel makers to silicon metal. We have seen imports in the first quarter from Malaysia and Kazakhstan going up.

These are the main factors that have prevented the consolidation of the price increase that happened immediately after the safeguards on ferrosilicon. In the U.S., I think is now is really a matter of time with the recovery of the steel consumption in the U.S. The first quarter numbers have showed growth in the U.S. in steel. We expect pricing to become more robust on ferrosilicon in the U.S. near term.

Okay. I appreciate the color. Thank you and good luck.

Thank you, Martin.

Thank you. Once again, if you wish to ask a question, please press star one on your telephone. We will take our next question. The question comes from the line of Nick Giles from B. Riley Securities. Please go ahead. Your line is open.

Hi, Nick.

Hey, Nick.

Yeah. Thank you, operator. Hi, everyone. Appreciate you updated this morning. I guess just following up on some of Martin's questions. You know, when we think about you pursuing new critical minerals, you know, with something like a price floor or government-related offtake or stockpiling efforts, would that be a part of the decision matrix, or is it really more a factor of kind of CapEx requirements and something more on the grant side? Just appreciate any color there.

Well, we are trying to be as fast as possible here. Clearly, we count on government support. Like I mentioned when I replied to Martin, Nick, we are looking at what we can control now and what we can control is which technologies are available to us, which technologies can be then implemented with minimum investment or zero investment, and current market attractiveness for these products. Clearly, I think pretty soon, deals like the critical material partnership between U.S. and Europe will have tremendous weight on our decisions and strategy implementation. When you look at this kind of deal, yes, you talk about potential decision on price floors for these critical minerals in U.S. and Europe.

They're talking about joint mapping, meaning identifying new resource deposits in our geographies. We talk about defense. prioritizing NATO on the rest. We talk about very interesting, about harmonized ESG, especially when you talk about E, this can be an harmonization of the environmental measures can be extremely interesting, especially for Europeans. A focus on recycling is another key element of the deal. We have to see how this kind of agreement gets translated into measures, being it either price levels or environmental limits or whatever else refers to what I just mentioned. For me, there is a fact that certain products that we can produce either in Europe or in the U.S. are not produced at all, like magnesium.

There is no active production of magnesium in the West at this stage. There are a few startups, but there is nothing. The current amount of products that are produced today are a minimal part of the demand. Being the intention of Europe and U.S. to be more back integrated on these materials, I think will provide us a tremendous opportunity to position Ferroglobe like one of the key suppliers of critical minerals in the West.

Marco, thanks a lot for all that detail. I really appreciate your perspective. Maybe switching gears, just, you know, you mentioned in your prepared remarks, Coreshell did another raise, and you obviously participated. Attached to that or alongside that, there is a multi-year silicon metal supply agreement. Can you just touch on maybe the overall progress for Coreshell, kind of, you know, what kind of customers are they signing and how you anticipate volumes within that supply agreement to ramp and what the margins look like there? I know that was a lot, but, I think you, I think you get where I'm going.

Yeah. I mean, the volumes are not gonna be significant until OEMs qualify the 16 Ah batteries that we estimate happening between the end of 2027 and 2028. There we expect to develop business by 2030, 2031 to a level of about 70,000 tons of silicon metal for batteries, just related to Coreshell. The volumes are already flowing now, they are minimal volumes for their sales to batteries and drones. I think I can share that the budget of these sales for Coreshell next year is north of $60 million, it's significant. The technology is validated.

Now we need the Series B, like I mentioned in the past, is related to building a bigger pilot plant that is gonna be used to sample 16 ampere-hour batteries for qualifications by the automotive OEMs who are, who have shown interest in this technology.

Understood. Appreciate that. Maybe just turning back to FeSi. I mean, volumes did improve pretty meaningfully in the 1st quarter. Can you just talk about what your volume expectations are in 2Q? What should we expect for manganese-based alloys as well?

Well, we mentioned when we communicated the previous quarter about our expectation for 2026 that were related to a significant growth in alloys driven by safeguards in Europe, by the new safeguards measures on steel who are kicking in as of July 1st, 2026, and a steel recovery in U.S. This is happening clearly on manganese. When you talk about safeguard, there is only one producer, I would say, of manganese alloys in the EU27 territory, which is Ferroglobe. One of our competitors is a small plant in France, we are the guys that from a volume point of view benefit the most out of safeguards of manganese. On ferrosilicon, I already described in detail to Martin what happened in Europe and in U.S.

I hope you were in the call, so I think I answered this question.

No, understood. That's helpful. Maybe just one more, if I could. Just on the ferrosilicon costs, you kind of went through, you know, you're looking to pass through some of the elevated costs within each segment. If we were to kind of isolate those, you know, cost pressures and just look at quarter-over-quarter, what kind of cost improvement would we expect to see in ferrosilicon specifically?

Maybe it's a point to notice, Nick, this is Beatriz speaking. In Q4 versus Q1, we have a huge one-off in Q4, a positive. Of course, in Q1 we don't have any longer this non-recurrent. This is why you notice an increase in cost in Q1 2036 versus Q1 versus Q4 2035. What I'm saying is that not a like to like when you compare the two quarters. Going forward, I can confirm that of course, we are improving our cost. The challenge could be more on the logistic side and transportation costs, as you know, due to the Iran War.

We expect this cost to potentially increase a little bit more in Q2 and then fade away on the second half of the year.

Thanks for that, Beatriz. Just to clarify, costs in silicon-based alloys would actually rise in 2Q?

Yes.

Before kind of declining in 3Q and 4Q. Okay.

Yes. You're right.

Okay. Guys, I appreciate the update this morning and continued best of luck.

Thank you.

Thank you. That concludes today's question and answer session. I'll now hand back for closing remarks.

Thank you. We are excited about the medium-term potential to grow and diversify our business through a broader mix of critical materials and an expanded geographic presence. Thank you again for your participation. We look forward to updating you on the next call in August. Have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.