Ferroglobe (GSM) 16 Nov 222022 Q3 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to Ferroglobe's Third Quarter 2022 Earnings Call. [Operator Instructions].

As a reminder, this conference call is being recorded. I would now like to turn the call over to Anis Barodawalla, Ferroglobe's Vice President of Investor Relations and Corporate Strategy.

You may begin.

you. Thank and joining everyone, XXXX Third you Call. Conference thank morning, Ferroglobe's for Quarter Good

as here not López Arnold, Executive Crespy, the is Chairman; today Deputy our Chief me Joining Javier Chief Officer Innovation Commercial be our Officer; Ollivier, but he and Financial call Officer; Technology Operating Levi, and Beatriz and has Madrid, on Chief Officer; Chief laryngitis. Chief Officer, Benjamin Craig speaking is our CEO; Benoist will our our García-Cos, Executive our Marco

from started we going forward-looking time. are this most can Before found X ferroglobe.com. filings, turn web expectations. Risk prepared factors to during read SEC that recent which could with our cause that this get some exhibits forward-looking to are materially are remarks, based a Statements at in be these Please to Ferroglobe's actual page, and differ management call I'm filings made on the results by on those available brief statements current statement. conference Slide to

I recent call these SEC to like Slide be please. López addition, to of Chairman. our working includes non-IFRS profit share, Reconciliation EBITDA, X, are adjusted to found net this debt, Madrid, time, non-IFRS Javier diluted adjusted measures references the in would over filings. may adjusted most and debt, now which EBITDA, At discussion adjusted gross turn margin, earnings capital, our measures. EBITDA per adjusted In this net Executive

good we environment. despite or market afternoon, a a -- quarter, QX reported morning Good in second After a results second after everyone. solid record challenging

levels product continue in costs our each and in persist. record Europe quarter, the from volatile During market Higher the third for declined energy of prices previous to quarter. groups

Polokwane other the we month, global new higher-cost margins, Higher strategy, budget. announced up an by Last actively will restart and our too. we which our geographies. up up quarter, operations to will tons give raw in in and XX,XXX Spain and asset South third our XXXX plant on line Africa, in of footprint to reallocating costs annualized This material facility is in the affected on plan of our volumes the to and negatively During metal regions produced us like supply high-quality reducing flexibility managed out be it globally. basis, start ramping XX,XXX provide which capacity of November will in and cost-competitive silicon according to tons with

the During the we third to balance financial execute quarter, our deleveraging objectives on continued primary by sheet.

the $XX secured super redeemed quarter, due our X% million, senior notes we During XXXX.

and expect million, rate plan $XXX revenues company. with resilient of in declined by to adjusted declined the We continue $XXX objective our stronger a run million, XX% to $XXX million. quarter, third levels enabling to Specific EBITDA our to which by on to XX% QX XXXX, more transformation incremental and record EBITDA progress us we to be from our achieve our

Our in margin adjusted quarter. the EBITDA of QX compared to record margin was XX% in prior XX%

our strategic history, than implementing the Our EBITDA X margin This direct was plan the in higher EBITDA highest over prior was significantly is the result of years. a years. and company's in adjusted our any third successfully last

with was that we quarter. share $X.XX compared last per earnings Our delivered $X.XX per share

cash Our $XX million was from reverse quarter. senior the cash driven quarter down $XXX the of third was end repayment million decline million the the balance $XXX The at last by in super of notes. primarily

million, execute undrawn to ample our facilities, giving with of our flexibility total combined balance, cash $XXX us plan. business provides liquidity total Our

environment. and in is Overall, third of Our the recent very $XXX challenging quarter the a lowest perform in our quarter, the history. net company's prior level versus highlights the flat debt ability was volatile million market which to

details update, we actively to manage taken footprint. part our on addition, of specific our operational being corporate as will In provide actions

from revenues the was Slide to please. ahead down metal XX% Silicon prior million quarter. QX, Moving X, $XXX in

quarter. business metal to million. XX% down a XX,XXX of approximately challenging the as was tons, our metric which $XX prior EBITDA impact volume, primarily had down result from declined a silicon environment, Our This market impacting negative of on

strongest seen XX% causing have a we due by negatively sector producers aluminum quarter, energy third adversely demand metal production be prices impacting market unsustainable by price. European to curtailing decline silicon to for the continues The weaker our aluminum During and the in resulting our impacted EBITDA continue of demand. a to silicon In $XX.X silicon negative in price down average impact of metal contrast, to over our auto sale specialty contributor realized prior grades quarter, be The portfolio. was to million. the X.X%

note EUR we the were -- X.X%. referred while were index the ton, over to XX%, held EU important where index down QX, in XX% prior per prices have prices market of metric U.S. EU while the down U.S. Excluding It's Since index in ton, the In the Europe per X,XXX ton. QX and declined stabilized in prices further that spot have metric at respectively, per X,XXX GB to EUR declined per metric prices the outperformed X,XXX quarter. USD average U.S. end the over metric to shipments, USD ton. and X,XXX have prices

the price While a EBITDA robust over $XXX adjusted Adjusted XX% put declined we million. million negatively EBITDA by Adjusted revenue negative this it silicon-based XXXX margins in particularly of EBITDA driven before costs, margin implement plan $X.X segment average pricing the margin the QX coal prior prior energy, XX% quarter. quarter impacted for began raw driven same higher $XXX digits. million down XX% single quarter. EBITDA slight EBITDA metal by million, XX%. the level, and to and had which $X prior was silicon in adjusted contribution Slide EBITDA down for our quarter, for in Sales the perspective, second strong was -- million XXXX alloys remains for impacted QX. $X.X Adjusted realized from QX, in million at by EBITDA impact coal Silicon-based and were negatively last volume -- material from costs record 'XX adjusted $X.X over years. alloys Costs impacted in by and metal impacting were to Europe. silicon was silicon period, Costs $XX down compared please. metal of while for million, by the EBITDA down was million $XX was million, over was XX% by X, higher respectively. XX% negatively from $XX To

the demand While summer as by X markets, the as XXXX Lower weakness driven quarters, prior silicon-based from slowdown down than were end QX in third highest the was well significantly level. history alloys higher in and for construction. particularly company

to silicon higher in product, to alloys. was Benefiting of alloys. which driving was higher visibility there our margin enabled persists which Low to commodity Europe, specialty demand steel energy focus In our for and in and addition, on -- capacity various us a inventories. pushing closures demand margins strategy of silicon-based margin foundry compared decline customers is a were depleting among improve prices as steel result enabled producers, towards has

Moving response over On This we negatively we partially margin XX%, was $XX $XX end to us favorable purchased manganese quarter. second the $XX was quarter, one-off to to by with convert declined European shutdown high of which third prices. the our in was million related positive same the supply hold weakening Sales Late alloys a and slowed ore segment the volume and manganese-based down the significant to sales million. as impacted of EBITDA pricing and declined market impacting shortage EBITDA market impacted Slide X, million, of average focus a from manganese at the quarter adjusted and volumes market. due in among from for please. line XX% Cost demand. XX% XX%. we prior have this base second manganese quarter adjusted in various negatively declined on prior in to in our demand. XX% steel adjusted alloys. closure In quarter, million. longer prior quarter, EBITDA Manganese while down alloys mark-to-market securing conditions, the XX% in steel from provision the realized normally producers Europe sell producers, EBITDA in higher expect production, while changes period, quarter demand enable our decline over primarily revenues by impacting customers by negatively earnout the to Overall, $XX adjustment third Capacity was supply, to declined to reacting ore by down including in XX%

detail. this and our to Beatriz financial in actively market the I like production to Financial manage results monitor review continue now call more to the accordingly. Officer, Chief to would García-Cos, We over turn our

material the all. volume and prices the Javier, good quarter morning the XX% income increasing declines and from Raw good you, our was in as and the down second from due energy prior from quarter all afternoon, Revenue lower consumption on second the materials $XXX across for record Slide X% resulting prior turn product quarter, Please quarter XX% X. XX%. statement categories. percentage or million, in a levels Thank declined third of to to sales quarter and from raw energy to consumption the the

a QX, in fees, down years. XX% in operating the sales are credit as While from Adjusted up mark-to-market from the versus quarter. million. due to consulting to EBITDA improvement $XXX quarter. in consumption from alloys the the revenues prior quarter record $XXX was EBITDA materials expense of The product percentage prior versus XX%, second Other down and adjustment was XX% significantly EBITDA other prior earnout of XX% group. reported third for energy the declined XX% prior provision manganese-based from in to related and down million, Adjusted the raw expenses was the in operating quarter adjusted a the quarter margin of lower

QX share Our was per earnings QX. reported with compared in $X.XX $X.XX in

by due the to contributors the the materials EBITDA $XX EBITDA, the mainly $XX and earn-out price across $XXX raw adjusted offset in please. slide, partially Lower energy of million combined favorable were higher and second million price quarter declined adjusted by $XX Cost volumes $XXX Volume quarter. all was impact biggest impact million with million. declining X our from segments accrual, positive $XXX of from by to million third the in negatively costs Next million. to

was in of our Spain During QX, quarter-over-quarter, realized increased in average energy the approximately the by Spain cost impact million unit overall and energy $X.X unfavorable of XX%. prices

to to over million in million interest the on to to second in end in We $XXX we COX cash end. million Cash continue cope please. with our $XX reduce energy outstanding balance the primarily liquidity $XX prices. from was related our with Slide million manage down in million, layer was and down We used million global ABL, to volatility new expenses remaining balance If $XX quarter was $XXX quarter. debt. at of XX, actively $XXX factoring QX our used a The debt, undrawn pay purchases. footprint

was debt $XXX X% remains flat in at $XXX of super versus lowest debt from at prior net the million the the The notes. The the end point million million, down in the Our $XX reflects redemption $XXX senior million at prior the successful gross of QX, quarter. history decline quarter. of company

top priorities One further continues balance sheet. of deleverage to our be our to cash deploying the flow

at our equity Next and slide, totaled assets end book please. million. value The of QX, $X.X the value our $XXX of billion was

a percentage We sales target XX%. have capital for as of a working set at

During an we by driven XX%. raw this were at finished was and above the level above period. the third The our winter which plan materials increase will quarter, over support in goods, working capital

progressively expect XX, Slide over coming please. the months. decline on We time

quarter is in I $XX record It million million in During level the positive -- $XX fourth $XXX versus generated operating million of prior $X million the repeat, consecutive flow, cash quarter. flow. QX, cash of a we

cash working robust $XX by capital Our million. cash of offset operating for by consumption was around partially earnings, flow driven

in in the have quarter. During quarter, spent prior we the the in million spent million $XX CapEx. versus CapEx At we end $XX of $XX QX, million

impact impact. million, positive, flow the million. was balance be We of cash $XX our Please In around by expense debt the by expect CapEx year may from the million. keep CapEx for of in and that cash quarter third the continue during the sheet cash mainly capital to flow actual balance our investment. $XX the differ mind repayment Free $XX driven to on the the plan quarter, declined timing working

to remains the of across working goal cycle. around Our sales keep capital XX%

please, XX. Next Slide slide,

improving. for manage As and are and a doing past over to successfully corporate call improvements of cost third the quarter, execution quarter, Madrid This turn of back notes Lopez able the plan. capital, made demanding we up Through we is we the upgraded the to flows have we XXXX highlighting August, work generate few were sum to company Javier a this to X to company due At time, of through is strong mostly the over a updates testament lower our Moody's the years. will I BX. matters. structural our the the and cash the credit and X.XXX% quantum in profile debt our In of senior

Thank you, Beatriz.

positive specifically Slide please. want relating turning Now development in our XX, to for highlight France a to I to XXXX. energy costs,

in have XXXX. reduce to have favorable we markets. energy successfully rates France similar exposure to next volatile for competitive negotiated While energy contract This allow in prices to us we a year, compared get XXXX, to energy

contains idling during managed will such that by Ferroglobe which lower-cost contract prices plants. begun quarter, Becancour, our in Europe and global which be the higher from However, supply France the during have quarter and facilities production and in clients as Polokwane first

have result X prices we a and and making implementing business environment last global managing effectively to our our more to lower efficient the is been our in profitability. high is of we and the While . manage our optimize volatile maintain years business demand plan margins the overall. energy transformation Europe, successfully challenging cost, that are due for to This revenues

advantage moving application the developing the we company. with forward manage into silicon reduce materials to flow ahead of We're material the XX silicon years, and term, day, focused last more transition. we markets our respect, a metal we're of leverage. during critical solar even In drive of overall high-growth and that growth We taking to Longer continue believe specialized to we're metal advanced to as our for focus the using strengthen business business pack. growing expertise continuing and by our energy technological to are balance cash sheet on expanding the our our further capitalizing each

we're result, Puertollano ramping and our direct XN a industrial production of now As purity silicon liquid in up scale in XN Spain. facility

development carbon supply are green solutions for in tremendous Moreover, demand, entering providing will the number a lithium-ion key is particular, silicon about advanced excited solar, to advanced and we're that energy things engineering transition solutions growth future. energy silicon expected driven chain. into composite with opportunities. EV growth we in leading discussion in producer, across by materials us get and exponential again, with Silicon technology agreements to fast-growing joint be battery storage high-purity the electric and, Our value the of causes metal vehicle us on going to Once market.

focused We as our be viewed a firm remain be evolves. goals value that plan. on open beginning and the questions. please operator have earnings lot it I'll to more to our value slow, that line recovery and was is purposeful left the a said to work time, done, of navigating At transformation, Today's of from the creation. be There's while a a going validation we and our picture and solid should macro steady journey team uncertainty committed for to this period the ask reaching as

line your first B. And comes of from Instructions]. from Lucas the Securities. [Operator Riley question Pipes

on My the first quarter. is the question inventory build third

here margins I on ahead would like bit little inventory build to tactical on elaborate some to in there the that. it the on is of also, maybe a declining It with If all then you through higher QX touched remarks. a of sign as were well, You appreciate sounds QX reasons you P&L? in like that prepared this winter. I could the that And flowing color. and costs would comment potentially

follows. Thank The consumption true for This capital increasing. is reasons main Beatriz. are been that your working question. has as you, it's Yes, Lucas,

our environment, curtail the as side, to European inventory in particular, side we ore the the manganese Spanish And operations. the of due the producers' on changes in well, response So built on shutdown. other macro up to steel on on

up we and in Polokwane, hedged some Russia consumption. well, winter you And as remember coal, ramping that capital our been to shutdown. response in we account volatile we position Ukraine, as as have our plant of France taking as environment result bid please and And from ferrosilicon this as right, in mentioned, this has and silicon electrodes some working of yes. well well the the are to winter in inventories well for a and had to our As stoppage,

very That's helpful.

expect Or already mentioned, XXXX? release terms the into to sizable inventory the think of of that normalize sales QX? in of returning ratio in QX Should that that, that? Beatriz, we So will timing ratio you do what's you

Thank Martin. you,

the our for of yes, naturally, winter -- the reasons stoppage, so to think inventory I particularly be is mentioned, depleting, because that that. going we

months. to in to go coming we So expect back the levels normalized

then That's helpful. And two...

they mean I have -- it's here. been Javier Lucas,

As you be the will say, we will it have And to yes, manganese ore be on depending of over manufactured that an months coming was tactical reacted reasons excess on market used, manganese, demand. demand. we

supply and ore manganese the on So stopped mentioned be coming Spain. electrodes products because the into as depending will alloys we we in there and in production is manganese demand sources: coal like transformed months finished our we the tactical and that X over of call,

Got it.

a assume high-end new way strategy maybe bit additional shed measured the the on the approval more a pursuing it's color market what in and and would On silicon color about appreciate on plan. products of strategy, but can you order really the I powders that Board-approved metal little that, entails? mostly

Lucas, thank great and product. respect, we're with value our is and is Benoist? we're you our mentioned. I we're of what he plan a trying strategic what which silicon color which color our would specialty going very is of much. can add of a in of doing, add just bit core what us -- Officer that metal maybe Chief Obviously, I high-added currently business, deep what to bit a think Together doing relies Technology into deal and Benoist, on yes,

Thank you.

intensity will for silicon accumulated increased in focused annum. be XXXX growth have is built silicon this the Europe have this currently to So high-purity gigafactories will And producing it, Canada capacity invest an being have in for take will the this the look a exponential last applications, that developed X lower when anticipated believe technology significant when in development metallurgical the batteries well raw And requiring the step and and silicon other batteries. dynamics. the solar, technology -- in rate route our strategy we place including alternative significant modularity market we advanced It in all growth for lower One ourselves the and map, to that has road of XX -- we of Ferro application have and any batteries. technology leverage U.S. attractive in is and for that quantities XX% and our annual continue for as ramp-up to main ready we on is materials. against CapEx advantages we advanced terms at our is as years we ramp-up. of per of much side faster cost, at

We The will next Englert take question. the Martin from of our Research comes Seaport line Partners. question from

next to wanted year. and think here volumes moving on the power how we I can touch contracts the -- maybe through specifically French to sequence in about

you way it? of seems winter then versus the kind ask go-forward significantly like follow if XXXX government or the the to it maybe production in remaining with during assets contract comparable on the So one. your demand differ? don't ramp quarters months of wherever the you're to price fixed free based think something Is And French does XQ that from about keep or market on the 'XX. is XXXX. that legacy And reduced energy your on Or framework, was they'll you produce the in

It's but EDF, different we Martin. it's Benjamin agreement. because add is agreement the slightly maybe fixed with can fixed you specifics have It to reached a a Yes. that

Yes. It's speaking. Benjamin Thank you, Martin.

with generally provider, think, agreement, energy it XXXX. a so from is I looks we into X-year this contract entered and right, So -- like speaking,

in are winter And in will by one costs the mean, XXXX, to For France. have XXXX. in I we similar specifically, during we XXXX, achieve action we energy modulating during yes, winter, taking

the right? too we to it's and plant is our mind annual when way in we period for keep our QX, of volume, talk XXXX budgeting And said, talking volume. early I about impact that to in on and shutdown presently will one this exercise forecasting beneficial and performing that's shift about That XXXX. overall, I our given So think competitiveness, mitigating into should what contracting is we maintenance only are that think volumes our

and As that we global already to platform, particular, demand. mentioned production our and Becancour, will use we balance in Polokwane

during add, I on, mean, next So think, was what Africa will no that the we if you're to guess, and think I constant supposed before months. that, gain South given downtime the with for net there looking, [indiscernible] year. sense. announced might or I the what, winter that XX,XXX, about the restart we're sense tons and be volume But XX,XXX restart after from be some no

Craig? Maybe,

post you begin little basis, to later bit Maybe assets start-up X, and push saying, a what the the to the we was plant entire going the a it we On South with maintenance it's question able your modulating effect, franchise in net -- to on harder global forward remainder the roughly will with franchise. support bit and as how a anticipated will the your the just year-over-year quarter comments be little bringing year, was timed same the Polokwane as France. the actually Yes. this of some highlighted Benjamin well be because, of winter, earlier service the or to there the operate maintenance a in in -- French Africa of of throughout

Understood. Okay.

the of of based comparable for opportunity of the remainder perspective constant that's environment. kind volume year-on-year, more demand from So we'll year, on net a see gains when

the Okay. contract, to into with yes. assets, per going And level it the French thinking essentially legacy what the cost was megawatt about as a comparable

That's correct.

Okay. Understood.

on the the the euro a are evolve that we And probably will where move in discussed bit bit modulating split between France, in East Africa be going North And American 'XX. production and the more a as and we So to I imagine maybe volumes Middle maybe going, restart detail. South through market. based little market the a

might on It is I in our platform. the Polokwane It's commenting flexible most -- assets think start maybe that I can markets. fill Benjamin. any

flexible allocate manage where market the will Craig on we let as as the But Polokwane aspect, in comment of markets opportunity comes, volume the evolve is really geography think so the the but them. we can it's And a will -- and platform I I to that go most and the world.

looking the plan as with Pacific. high-performance the at of to idea area Polokwane to at quarters, Middle of Asia at polysilicon asset, Europe Yes. the we and we the X has originally over And Martin, U.S. operations how to as during target level planned go we'll East and particular the course, around quarters, on highlighted, global of little can't in I we be performance scale looking as that coming been -- But the of targeting assets up look give But updates market has and too detail restarted bit designed to more the since certainly, the the is a able looking furnace certainly course it much contracts. assets those markets. been looking coming service to those the of give a Asia, be on variety highlights regions. at a the

else -- think we facility. will about cost it sits helpful. once think of it accounting for of and kind a production has historically, is when been Is that the on bit gets a restarted? remain everything cost lower curve, That's And I where contracts understood. Okay, where it this

Yes, that's correct.

Understood.

in amount the annual metal not the restart a contract there but to it's business annual that contract at the XXXX? structure contracts Or lines minimis de in modeling that expect specifically anything coming is of -- pivot the expected given looking I'm other price South Just versus was discussing a away should and away XXXX. taking of so and to a silicon within mix where fairly pivot maybe XXXX back step from XXXX, remain we for a larger this prices silicon XXXX metal a and purposes Africa changing fixed from and in for that XXXX? there Is company is fixed from

are Yes. the Fixed moment. the Thanks the price thing for contracts of Martin. almost at a past question. Thanks,

and to fixed price So during price Certainly, it out into. are and any aspects because price price now trying related one not in in The a would have you're mechanism would we've and itself something going related today's embed volatility if market that we combination other a all right fixed there higher consumer that contract be at is single contracts. chosen a wise strategies a multiyear hardly have strategies fixed not that. into volatility between lock

So yes, have of we're fixed retired to price all our very happy contracts.

the going working Okay. to on target was back circle question, XX% I'm That's helpful. notably and exceeded. the capital

another or why, results that. are I the can to this happens we discussed of achieve component follow-up I of question, target? something had or But You is understand the XQ that as that in after to what's XX% and expect Is XQ? believe, the XQ when timing -- sales, reported

Yes. Thank you, Martin, for the question.

Let take me one step back.

the mentioned. second for third course, volatility side, So you Spanish the shutting to are winter ore the is and point the Then France think we coal, in one response of have And And -- in mentioned some we this of change you ramping in going our the course, a curtailing buy Russia -- the in Polokwane, operations, is, of to down we and that producers macro we Ukrainian, mind back up to speaking. to of are are increase the point bear in stoppage, of course, caused additional steel that, the result And as yes. in then environment conflict as reasons I we our and as as European percentage, know, manganese well top, between buildup electrodes due and all operations. the right, we right? as the on the

capital working that. invest we -- this on So

the soon, provided is season months, progressively so the working -- very and said -- this next question. coming starting if next level that, being this winter we of capital answers see So coming on the your on

of part last capital just very the you expected level you of said, repeat working could sorry, I'm that you kind to... this

Yes.

Sorry, next on months. the coming

coming months. Next

I thinking something that's in X-month -- my think or framework? that? in wrong So Or within am a I mind, less

on We're the between going to maybe target, be QX sure. for yes, and QX hitting

Okay.

Okay.

I you Let out and on U.S. quarter thoughts me silicon since wanted pivot. to get in the broke greenfield in for that the called your projects ground the metal last that recent silicon metal U.S. your business. It But the thoughts there? new from may yes, like a high-level the entrant targeting be growth forward there for any press release in your perspective pushing looks

you question. the much I in guess for I that Martin, announced. greenfield, the Yes, it the metal going think referring first validates bullish a thank projects to silicon and you're think greenfield positive have because very have Well, we case I Well, forward. for been and reaction [indiscernible] others

expressed high And of years. have that, being in years announcements we and western there I expect sector. coming take impact silicone very some -- we so growth that new result which think are in market the transitionally energy a reshoring in And -- to should as made, world dynamics, I bit positively we demand our -- will that production positive. side, of a was the on we of million. don't bit is a haven't the know know but what -- Phase we $XXX were read million surprised the -- we capacity. but don't Again, numbers, heard $XXX I were tons a what we -- And or from to $XXX positively or $XXX capacity tons it for XX,XXX about X numbers. of sizable was we to XX,XXX but the million surprised, investment million around --

certainly give project global in capacity with to I But a potential. Ferroglobe, asset add can said. a which global metal on bit a just perspective managing you maybe excess maybe, brownfield might of what own -- perspective of you footprint, of color we in should give valuation Benjamin, bit add assets, a to greenfield and to Just perspective, our which silicon XXX,XXX flexible tons have

Javier, the question. Yes, Martin, you, for thank and

of through think routes, those can options supply the And intensity multiple right? expanding silicon be different. is very I So CapEx

that company, an of of very That's cost cost now as greenfield, And maybe doing. assets, have shrinkable earlier of XXx conversion, you or intensity to reactivating what doing all And greenfield. the doing in less capacity, capacity we the furnace that's talk plant those we quickly that's reactivation, I the are we've is have think If about what integrated Polokwane been this options Selma. and are brownfield we and a by able been different. year are CapEx in what

critical market. electrodes. and critical is top significant those think advantage And source a quartz, if that -- that's is like to -- I I to providing when easy. competitive is a global integrated I think a of And on that, supply those access of of proximity think footprint nuclear, secure the coal inputs not inputs our you are advantage, another

Okay. years the exited, cycle has notable facility exited. over some believe, market and That's so, worth remains that some I or reductions one had capacity I within Dow guess, or been And helpful. there down. XX American facility there has that you had -- probably a -- been last that North that highlighting the

to seems on share the high-purity maybe Can maybe net-net, silicon you in wildly aren't And you more away, leveraging as gain were it but with went expansion. a that even from So an know-how some market you're the the greenfield upgraded of turned Any details Spain? about to touch you things previously that market? on that metallurgical any that take then like leveraging that comments to you're trying today. product ramping different prior down, kind of

a Absolutely. And Benoist, bit. you can maybe add

slightly which to the that plants of is mostly. silicon makes The cost high-purity -- bit. I adapting the extremely targeting add can it's we're than process solar, because Yes, into on the are basically we purity first steps efficient lower a

So the our integrated advantage. which high-purity main production is of of the silicon cost into plants, is one

the that metallurgical route. is will we second develop The

anodes it's easiest, into put anodes. CapEx-intensive earlier, SiO eventually, alternatives mentioned which when metal solid-state and route silicon want I the As targeting one batteries. the we -- most also SiOs And specifically believe the lithium are you markets in route, to silicon-rich engineered less carbon for composites this -- efficient the solution the be of silicon anodes, can the producers. the to for We're the

sorry, maybe is forward Benoist, for expected of... market the -- just what going type Martin, on growth, the that Maybe

in sales tons a technology and hundred negligible in had have advanced battery. few XXXX, we So

up prepared those the that's huge triple with will developments we these gigafactories year-on-year for challenge some one-step started and start as to ourselves marked be sales a step. big soon step of to expect We consuming. quite demand to one of to have as ourselves is the face for this is And time And we ready that why now, the have actually now and gigafactories. grading of

Okay.

the I is kind more consuming volumes and in this of right? more. change into XXXX. are that kind But anticipating step you So Western to the XXXX change producing you'll of gigafactories -- still mean, and ramping ramped when continue anticipated, year, more you're That's the bigger preparation, moving step are selling -- and of

Correct.

Okay.

then. until tripled It's

then. every triple year until We

sales will the We XXXX. volume XXXX in -- and triple then under until XXXX

we what from that segment do these high with it of business? What -- that this forward but does understand any margin, metal about at fairly more should of legacy looking of mix? it the high I margins margin silicon the of like this value. go-forward kind I a of we that silicon think margin metal do products to look think does this could with profile, framework are profile EBITDA And kind when in what guess XXXX

the these it mix course, a certainly Yes. favoring your way with of The mix mean specialties, our knock sector the of share metal will more a of earnings silicon transformation. shift going industry see greater to a electronics, an general going of a would Martin. the is and the with you But towards sector chemical market. the bit of Thanks, proportion towards aluminum take areas see portfolio higher recyclability tilting EVs. are profile these and photovoltaics, I'd I typically, take

a you earnings will pointed profile So profile, that tremendously, as without change doubt, out. that

all did a I but for you to the difficult American lesser and Thank North Congratulations. job as all detail right. degree. color. the that very maybe thought a All well as it's market, a I Europe think in Okay. tremendously you environment nice

the congratulations results. So on

Jemekk from We from the our comes Management. Capital the And will next of line Michael question. take Lam question

Yes.

-- I been production higher. mean, of has when go your terms products look and flat auto In at your going into, I demand end-use the that

much mentioned QX from with customer But less how you solar how ramp looks increased I'm familiar imports? was in volume like the destocking competition also like is. your it of production -- decline or Solar,

how production balance. When and supply Yes, severe supply or side, if with number energy variety at actually challenges actual just I COVID we from the or looked the been was situations was may. of pressures demand coming a inflationary we there that it Thanks, the has saw policy. meeting headwinds a the across number whether area, global different a regional matching the In Michael. zero just coming off QX, of or intervention was of taking place on

the quite becoming was balanced. effect, market in So

really the So of liquidity out. those balanced had sectors

the had a expressed number for the the pointed As the around have to they obviously customers economic and the decreasing who question concerns you currently To been hasn't seen or consumption preferring aluminum increased the for in [indiscernible] Martin earlier demand up term towards there had situation but short out we had in on of enough was starts make side, year-end. chemical that we industry. an that asking, seen we unfortunately, to drop premium also are as siloxanes

off you're -- -- but talking And to cost production the in forward, a energy. has be because chemical think [indiscernible] will future there's primarily additional I is in up. be high slowdown lengthy with the sector. to going in [indiscernible] mean, around generally, that's semiconductor production bit and auto is growth driving primarily we Started shortages, for the as and due in demand of yes, of the very of aluminum term it medium to the pick sector. been a Moving we going curtailments little auto to to robust the it what the Aluminum, sector solar going up batteries, grade

longer -- based but you of the higher go I've recycling as it forward, to have to general base transition relate uptake slower mentioned a least on going in a at a high the and can but -- rate to expected transition a earlier, growth And and aluminum EVs. at high to so we'll rate growth term, a in the

up And what is just then like estimated last question the cost ramping of Polokwane? is

-- Benjamin. -- yes, that's Yes

It's Benjamin speaking.

the we talking we previous respect. we think and it's answer mentioned that think XXx less much we on project. a be of cannot than than I What cheaper greenfield, -- too I a course, are precise greenfield So much that earlier in

the be are level to to want going that we that's able to So be respect. We in be of precise don't into. detail so

that allows mean, cheaply. world in us and market, actually that's I and the And a the deglobalizing we're more cheap valuable world France. We we did stopped production for in to I very -- one becoming we've is facilities -- -- global we react can stopping that's it is production done In footprint And But very Polokwane. a live is Alabama. movements as we're and in Last Spain, in and agile reverse, can is and of in things more a in. in quickly to the that of way. restart year, much mean why -- -- and are very production the our anticipate terms that -- for we in tremendous that Selma stopping One, market months we've we more we've advantage bit. X

question our Riley comes line of The from question. B. take will We Lucas from next Pipes Securities. the

your fourth How a on there. volumes I the I wanted in we're to for uncertainty quarter ask volume the holding so through your would expectations up the appreciate bit color front? quarter. for macro -- halfway on of the far? are are What light

market marketplace favorably X. coming summer but That There is slight see highlighted number into in correction out playing there's right through to most are that expectations. thanks, is factors bit playing cautious out have on according yet -- We and supply of the earlier, slowdown. Yes, little seen But it of I still demand. the order a our quarter Lucas. a now, this load of and we're general, a in we've

right Now is lot current the quarter. we successfully real for on at driving a for how the and comment commit of now posture next too But of course, purchasing remaining looking but area fourth our that we much how of the that's year. at cannot we're I negotiations part further sitting conclude that,

can segments? expect expectations modest you today, that a reasonable? in Is increase that? the elaborate the Or we X volumes for on across And Okay.

made we've the Spain. curtailments Well, in

Argentina operating So continues successful essentially, also just the start-up be on assets focused franchise. the Africa. with a assets, part U.S. of good we We Spanish French Norwegian assets. that South our our to to and assets, the of are provider

for picture have And a makers western have of but aluminum bigger helpful. the aluminum That's a then been been the LME, -- makers ban Okay. for on question, Russian example. aluminum lobbying

consumer? as with take the material ultimately well? bit better. you Russian example, material come compete trying to continues from the So the market on fabricators for -- blends dynamics you Or Just material and your to does LME, that directly the produce a that of understand the the around demand the do for And side aluminum impact in. then alloys equation GSM? end little of aluminum is Do what and demanded

Yes.

aluminum specifically is if around question understood the your your U.S., question, right? sector I into So the

U.S., Europe the just Not -- as Europe well.

Yes.

alloys alloys the you -- with Europe Russian from meet do they does customer with production already if inputs in And still specifications? material come the alloys? in if to buy the Europe of aluminum specified vis-a-vis grades U.S. that the Or of aluminum interplay Russian effectively, buys Europe, Russian those aluminum, make

Yes.

us. the They coming our is coming into no, contracted our No, it is are demand it it necessary working Russian have currently the downstream aluminum impact mean and into Europe, So customers. and does going that adjustments, no I replace we'll for currently if Europe, But we aluminum? imported into we with operate made are accordingly. direct doesn't.

the from from take Capital. line Thomas question. Murphy question will And final our We Odeon the comes of

me? hear you Can

Yes.

Loud and clear.

And a to if QX achieve time, recognizing changed is $XXX like environment over My yes, the that since to time debt Is you'd a the though, that, Beatriz get that Beatriz. a very very target? what bit and would ideally, Great. you ideally, still, question quarter, quarter. had on probably all, you statement directed my has to it? first QX. That's gross congratulations on the down made question. a [indiscernible] hope frame QX good million, towards of over still strong Well,

your for Thomas, you, Thank question.

to the rate That's that our true of the than first could your we're answer the to of that debt. we is something is to part -- be reconfirm cheap gross of just $XXX we And we that think million I continue target keep it moment have to yes, have doing, is, the target. think interest that we so debt. million of are have debt target said our said. debt and what question as we that, from remind, in at we build gross that results, to to yes, this this to is all the But would is saw $XXX to we some cash, we doing the evaluating options me balance I be changing. the sooner you what reduce continued later going this the are say, sheet. of gross let environment reach And Being

loans quarter to to Of know, to and the course, right? keep we get of before government we plan going be debt, have, maybe as we're that some expensive Well, you working very rid was so recognize it that the I of now developments working are not on we maybe expensive, on or the one right? But be is next expensive. that. And the -- could so.

Thank you. I remarks. closing would for the back like to to hand speakers

positive call. concludes we through strong a our generate In That QX, earnings quarter third challenging maintaining demonstrated operating markets still to ability flow you. Thank cash our to balance sheet. and manage

great on focus a the our to our have participation and continue for earnings again and generating support day. Thanks and remain will rolling We your and improving efficiency strong throughout profitability focused operation our reduce cycle. on leverage. We

today's concludes call. This you conference participating. Thank for

You disconnect. may Speakers, standby. now please