Ferroglobe : 2023 ANNUAL REPORT AND ACCOUNTS

Ferroglobe PLC

Annual Report and Accounts 2023

Company Registration No. 09425113

Ferroglobe PLC

Annual Report and Accounts

Year ended 31 December 2023

Ferroglobe PLC
Annual Report and Accounts 2023
Contents	Page No.
Glossary and definitions	2
Officers and professional advisers	5
Introduction	6
Chairman's letter to shareholders	7
Strategic report (including section 172 statement)	9
Directors' report	24
The Board of Directors	29
Directors' remuneration report	35
Independent auditor's report to the members of Ferroglobe PLC	62
Consolidated financial statements	70
Notes to the consolidated financial statements	76
Parent company financial statements	143
Notes to the parent company financial statements	146
Appendix 1 - Non-IFRS financial metrics	153

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Ferroglobe PLC

GLOSSARY AND DEFINITIONS

Unless the context requires otherwise, the following definitions apply throughout this U.K. Annual Report and Accounts (including the Appendix, save as set out below):

"2023"	the financial year ended 31 December 2023;
"2022"	the financial year ended 31 December 2022;
"2024 AGM"	the Annual General Meeting of the Company, to be held in 2024;
"2023 Form 20-F"	the Company's Form 20-F for the fiscal year ended 31 December 2023;
"ABL RCF"	the Credit and Security Agreement for a new $100 million North American asset-
	based revolving credit facility dated as of 30 June 2022, entered into between
	Globe and QSIP Canada ULC, as borrowers, and Bank of Montreal., as lender;
"ABL Revolver"	credit available under the ABL RCF;
"Adjusted EBITDA"	earnings before interest, tax, depreciation and amortisation, adjusted in accordance
	with Company's adjustments announced as part of its earnings reports. Alternative
	Performance Measures are reconciled at Appendix 1;
"Alternative Performance Measures"..	the non-IFRS financial metrics reconciled at Appendix 1;
"Aon"	Aon Plc;
"ARA"	this annual report and accounts for the financial year ended 31 December 2023;
"Articles"	the Articles of Association of the Company, from time to time;
"Auditor"	KPMG LLP., the Company's independent U.K. statutory auditor;
"Board"	the Company's board of directors;
"Business Combination"	the business combination of Globe and FerroAtlántica as the Company's wholly
	owned subsidiaries on 23 December 2015;
"Business Combination Agreement"....	the definitive transaction agreement entered into on 23 February 2015 (as amended
	and restated on 5 May 2015) by, among others, the Company, Grupo VM,
	FerroAtlántica and Globe;
"Capital"	net debt plus total equity. Alternative Performance Measures are reconciled at
	Appendix 1;
"CEO", "Chief Executive Officer" or	the Chief Executive Officer of the Company, or where the context requires, of the
"Chief Executive"	relevant company or organization;
"Companies Act"	the U.K. Companies Act 2006;

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"Company" or "Ferroglobe"	Ferroglobe PLC, a company incorporated in England and Wales with registered
	number 09425113 and whose registered office is at 5 Fleet Place, London
	EC4M 7RD, United Kingdom or, where the context requires, the Group;
"Consolidated Financial Statements" ..	(save in the supplemental attachment when it will have the meaning given below)
	these consolidated financial statements for the year ended 31 December 2023;
"Compensation Committee"	the compensation committee of the Company;
"EBITDA"	earnings before interest, tax, depreciation and amortisation;
"EIP"	the Ferroglobe PLC Equity Incentive Plan, adopted by the Board on 29 May 2016
	and approved by shareholders on 29 June 2016;
"EU"	the European Union;
"Exchange Act"	the U.S. Securities Exchange Act of 1934 (as amended);
"Executive Chairman"	the executive chairman of the Company;
"Executive Directors" or "Executives"	the executive directors of the Company;
"Ferroglobe Spain Metals" or	Ferroglobe Spain Metals (formerly Grupo FerroAtlántica, S.A.U.) a joint stock
"Predecessor"	company organised under the laws of Spain, including (where the context so
	requires), its subsidiaries and subsidiary undertakings;
"Free cash-flow"	operating cash-flow less property, plant and equipment cash flows. Alternative
	Performance Measures are reconciled at Appendix 1;
"Ferroglobe USA" or "Globe" or	Ferroglobe USA (formerly Globe Specialty Metals, Inc.), a Delaware corporation,
"GSM"	including (whether the context requires) its subsidiaries and subsidiary
	undertakings;
"Group"	the Company and its subsidiaries;
"Grupo VM"	Grupo Villar Mir, S.A.U.;
"IASB"	International Accounting Standards Board;
"IFRS"	International Financial Reporting Standards;
"KPI"	key performance indicator;
"NASDAQ"	the NASDAQ Global Select Market;
"NASDAQ Rules"	the NASDAQ Stock Market Rules;
"Net debt"	bank borrowings (excluding factoring programs), debt instruments, and other
	financial liabilities, less cash and cash equivalents. Alternative Performance
	Measures are reconciled at Appendix 1;
"Non-Executive Directors" or "NEDs"	the non-executive directors of the Company;

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"Reinstated Senior Notes"	refer to the notes issued in exchange of 98.588% of the 9.375% Senior Notes due
	2022 issued by Ferroglobe Finance Company	PLC and Globe	due
	December 2025;
"Super Senior Notes"	refer to the 9% senior secured notes due 2025 issued by Ferroglobe Finance
	Company, PLC and redeemed in July 2022;
"Ordinary Shares"	the ordinary shares of $0.01 each in the capital of the Company;
"Policy"	the directors' remuneration policy in force from time to time;
"SHA"	the amended and restated shareholders agreement between Group VM and the
	Company dated 22 November 2017, as amended	on 23 January 2018,	13
	May 2021 and 29 July 2021;
"SEC"	the U.S. Securities and Exchange Commission;
"SOX"	the U.S. Sarbanes-Oxley Act of 2002;
"Subactivity"	incremental cost incurred at the plants in special circumstances, such as
	unscheduled shutdowns due to an unexpected breakdown that needs to be repaired,
	and idling facilities/mothball;
"U.K."	the United Kingdom of Great Britain and Northern Ireland;
"U.S."	the United States of America;
"Working capital"	inventories and trade and other receivables, less trade and other payables.
	Alternative Performance Measures are reconciled at Appendix 1;
"$"	U.S. dollars.

In the separate attachment hereto only (and for the avoidance of doubt, not in the remainder of this U.K. Annual Report and Accounts), the following phrase has the meaning given below:

"Consolidated Financial Statements" .. the audited consolidated financial statements of Ferroglobe and its subsidiaries as of 31 December 2023, 2022 and 2021 and for each of the years ended 31 December 2023, 2022 and 2021, including the related notes thereto, prepared in accordance with IFRS, as filed on SEC Form 20-F.

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Ferroglobe PLC

U.K Annual Report and Accounts 2023

Officers and professional advisers

Directors

Javier López Madrid

Marta Amusategui

Rafael Barrilero Yarnoz

Bruce Crockett

Stuart Eizenstat

Marco Levi

Nicolas de Santis

Manuel Garrido y Ruano

Belén Villalonga

Juan Villar-Mir de Fuentes

Silvia Villar-Mir de Fuentes

Company Secretary

Thomas Wiesner

Registered Address

5 Fleet Place

London

EC4M 7RD

Auditor

KPMG LLP

Statutory Auditor

15 Canada Square

E14 5GL London

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Ferroglobe PLC

Introduction

Ferroglobe PLC is a public limited company incorporated under the laws of England and Wales under Company Number: 09425113. Ferroglobe PLC and subsidiaries (the "Company" or "Ferroglobe") is among the world's largest producers of silicon metal and silicon-based alloys, important ingredients in a variety of industrial and consumer products. The Company's customers include major silicone chemical, aluminum and steel manufacturers, auto companies and their suppliers, ductile iron foundries, manufacturers of photovoltaic solar cells and computer chips, and concrete producers. Additionally, the Company was operating hydroelectric plants (hereinafter "energy business") in Spain until 2019 and is still operating in France.

The Company was incorporated in 2015 and its Ordinary Shares are listed for trading on the NASDAQ in U.S. dollars under the symbol "GSM".

The Company is subject to disclosure obligations in the U.S. and the U.K. While some of these disclosure requirements overlap or are otherwise similar, some differ and require distinct disclosures. Pursuant to the requirements of the Companies Act, this document includes our directors' strategic report, directors' report, remuneration report and required financial information (including our statutory accounts and statutory auditor's report for the reporting period commencing 1 January 2023 and ending 31 December 2023), which together comprise our U.K. annual reports and accounts for the period ended 31 December 2023 (the "U.K. Annual Report and Accounts").

We are also subject to the information and reporting requirements of the Exchange Act, regulations and other guidance issued by the SEC and the NASDAQ listing standards applicable to foreign private issuers. In accordance with the Exchange Act, we are required to file annual and periodic reports and other information with the SEC, including, without limitation, our 2023 Form 20-F. Certain other announcements made by the Company are furnished to the SEC on Form 6-K. Our status as a foreign private issuer requires the Company to comply with various corporate governance practices under SOX, as well as related rules implemented by the SEC. In addition, NASDAQ Rules permit foreign private issuers to follow home country practice in lieu of the NASDAQ corporate governance standards, subject to certain exemptions and except to the extent that such exemptions would be contrary to U.S. federal securities law.

We have provided as a separate attachment to the U.K. Annual Report and Accounts extracts from the 2023 Form 20- F to assist shareholders in assessing the Group's performance and results. Investors may obtain the full 2023 Form 20-F, without charge, from the SEC at the SEC's website at www.sec.gov or from our website at www.ferroglobe.com. Unless expressly stated otherwise, the information on our website is not part of this U.K. Annual Report and is not incorporated by reference herein.

The capitalized terms used throughout the U.K. Annual Report and Accounts are defined in the Glossary and Definitions section of this U.K. Annual Report unless otherwise indicated. In the following text, the terms "we," "our," "the Company", "our Company" and "us" may refer, as the context requires, to Ferroglobe or collectively to Ferroglobe and its subsidiaries. Throughout the U.K. Annual Report, rounding has been applied and numbers given and totals aggregated may differ in consequence.

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Chairman's Letter to Shareholders

Dear Fellow Shareholders,

First, I want to thank our most valuable asset, the employees, for their strong commitment and contribution to Ferroglobe. Your dedication has enabled the company to continue providing excellent service to our customers across the globe, and with your resilience, we have made significant progress as a company. Together, we are building a stronger, more efficient, competitive and sustainable Ferroglobe. I would be remiss if I didn't also thank our partners, suppliers and shareholders who have continued to support our journey over the past years.

Across the globe, 2023 was another year of significant uncertainties and challenges on multiple fronts, both geopolitical and economic. The war continued in Ukraine, a new conflict erupted in the Middle East, and inflation led central banks to increase interest rates with many countries experiencing slowing economic growth. In spite of these difficulties, we remain steadfast in our mission to drive innovation of critical materials essential to a sustainable future..

2023 PERFORMANCE

After the record-breaking performance in 2022, we had another successful year in 2023 despite declining prices throughout most of the year.

For the full year, consolidated revenue decreased 36%, from $2,598 million in 2022 to $1,650 million in 2023, adjusted EBITDA fell from $860 million in 2022 to $315 million in 2023, and consolidated operating profit of $660 million in 2022 contracted to $197 million in 2023 due to soft market conditions, which affected prices and volumes.

Even though our profitability declined in 2023, we still posted a solid EBITDA and, more importantly, continued to deliver strong cash flow during the year with an operating cash flow of $178 million and free cash flow of $95 million. These strong results were made possible by the strategy we began executing in prior years to optimize our footprint, focus on continuous improvement, and embrace commercial excellence while rightsizing our cost structure.

There are more details on the Company's key performance indicators on page 153.

STRENGTHENING OUR BALANCE SHEET

Ferroglobe strengthened its financial position during the year by successfully executing its strategy to reduce debt. By redeeming $150 million of senior secured notes in July, we ended the year with $252 million of adjusted gross debt, representing a debt reduction of $207 million during 2023.

In February 2024, we reached a significant milestone by eliminating the remaining $148 million of these senior secured notes, reducing our adjusted gross debt to less than $100 million, while maintaining a comfortable cash position. Continued strong cash flow generation also allowed us to implement a quarterly dividend with an initial quarterly dividend of $0.013 per share, which was paid on March 2024.

Our liquidity is further bolstered by our $100 million asset-based revolving credit facility with the Bank of Montreal. This covenant-light credit facility is undrawn, providing the flexibility we need to execute our plan.

DELIVERING ON ESG

We are proud to announce that we published our second Global ESG Report in 2023. We are making great strides in our environmental, social and governance disclosure as we continue to enhance our approach and improve our reporting and tracking of key metrics. The report outlines our ESG strategy which is built upon four fundamental pillars:

• Strengthening our governance framework;

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• Promoting solid and honest engagement with our people and the communities where we operate;
• Reinforcing the role of sustainability through our value chain; and
• Improving our environmental footprint to enable sustainable development.

Our teams have made great progress over the last years on various important ESG initiatives to reduce Ferroglobe's greenhouse gas emissions and increase our usage of electricity from renewable sources, which is a critical part of our mission to be a responsible, sustainable corporate citizen. It is highly important in our value chain, from suppliers to our customers, to manage our carbon footprint to satisfy the needs of all our constituents. We are proud of the progress we have made in a short period of time.

CORPORATE GOVERNANCE IMPROVEMENTS

On 26 May 2023, the Board of Directors made important improvements to our corporate governance by eliminating the prior structure of the separate Nominations and Corporate Governance Committees, replacing them with a new combined Nominations and Governance Committee. This new committee consists of three independent directors: Nicolas De Santis (Chair), Belen Villalonga and Bruce Crockett. In addition, Silvia Villar-Mir de Fuentes resigned from the Compensation Committee, with Stuart Eizenstat joining that committee. As a result of these changes, all three standing committees of the Board are comprised exclusively of independent directors, reflecting best industry practices. We believe that these changes will strengthen our corporate governance framework and contribute to the long-term success of our company-.

LOOKING AHEAD

The markets remain challenging into 2024 with macroeconomic uncertainty still present. However, we have seen our customers restocking and some price recovery in the early part of the year. It's likely that some of the price recovery has been helped by supply disruptions due to a silicon plant fire in Norway and interruptions in normal shipping routes through the Suez Canal. We believe the European markets for our products reached the trough in September 2023 and have shown steady price improvement since that time. The US market was slower to recover with its trough likely occurring in December 2023 with modest price appreciation in the first part of 2024.

We are in an excellent position with our diversified footprint to take advantage of global demand growth in the coming years as an increasing number of countries accelerate their green transition through solar energy or electric vehicle adoption utilizing advanced silicon composite or silicon-rich battery technology. We believe this secular trend, with the support of governments' onshoring encouragement, will see significant long-term growth.

On behalf of our board of directors, I would like to express my sincere gratitude to all our stakeholders for your continued support, dedication and confidence in our company. We will remain agile and resilient, adjusting to the evolving market environment. Together, we will strive to create more value for all our shareholders, partners and employees.

Javier López Madrid

Executive Chairman

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