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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934

For the Month of June, 2019

Commission File Number: 001-37668

FERROGLOBE PLC
(Name of Registrant)

2nd Floor West Wing, Lansdowne House
57 Berkeley Square
London, W1J 6ER
(Address of Principal Executive Office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F    ý

  Form 40-F    o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):    o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):    o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes    o

  No    ý

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

   


2019 Annual General Meeting of Ferroglobe PLC

        On June 4, 2019, Ferroglobe PLC ("Ferroglobe" or the "Company") released its Notice of 2019 Annual General Meeting ("2019 AGM") and Annual Report and Accounts for the fiscal year ended December 31, 2018. The 2019 AGM will be held at 10:00 a.m. British Summer Time (BST) on Friday June 28, 2019 at the Dorchester Collection Academy, Ground Floor, Lansdowne House, 57 Berkeley Square, Mayfair, London, W1J 6ER, United Kingdom.

Exhibits

        Reference is made to the Exhibit Index included hereto.



EXHIBIT INDEX

Exhibit
No.
  Description
  99.1   Notice of Annual General Meeting dated June 3, 2019

 

99.2

 

Ferroglobe PLC Annual Report and Accounts for the fiscal year ended December 31, 2018

 

99.3

 

Extracts from the 2018 Form 20-F

 

99.4

 

Form of Proxy Card for 2019 Annual General Meeting


SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: June 4, 2019

  FERROGLOBE PLC

 

By:

 

/s/ PEDRO LARREA PAGUAGA


      Name:   Pedro Larrea Paguaga

      Title:   Chief Executive Officer



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EXHIBIT INDEX
SIGNATURES

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Exhibit 99.1

LOGO

FERROGLOBE PLC

(a public limited company having its registered office at 5 Fleet Place, London, EC4M 7RD, United
Kingdom and incorporated in England and Wales with company number 9425113)

3 June 2019

Dear Shareholder

2019 Annual General Meeting of Shareholders of Ferroglobe Plc ("Ferroglobe" or the "Company")

I am pleased to invite you to attend Ferroglobe's annual general meeting of its shareholders (the "Annual General Meeting" or "AGM"), to be held at 10:00 a.m. (British Summer Time) on Friday, 28 June 2019 at the Dorchester Collection Academy, Ground Floor, Lansdowne House, Berkeley Square, London, W1J 6ER, United Kingdom. The accompanying notice of Annual General Meeting describes the meeting, the resolutions you will be asked to consider and vote upon and related matters.

Your vote is important, regardless of the number of shares you own. Whether or not you intend to attend the Annual General Meeting, please vote as soon as possible to make sure that your shares are represented. You may vote via the internet, by phone or by mail by signing, dating and returning your proxy card in the envelope provided.

Recommendation

We consider all resolutions proposed to shareholders at the Annual General Meeting to be standard business. You will find an explanation of each resolution within the Explanatory Notes on pages 3 to 7 of this pack. The Company's board of directors (the "Board") considers that all the resolutions to be put to the Annual General Meeting are in the best interests of the Company and its shareholders as a whole and are most likely to promote the success of the Company. The Board unanimously recommends that you vote in favour of each of the proposed resolutions, as the members of the Board intend to do in respect of their beneficial holdings.

Thank you for your continued support of Ferroglobe.

Yours sincerely,

Javier López Madrid
Executive Chairman


LOGO

FERROGLOBE PLC

(a public limited company having its registered office at 5 Fleet Place, London, EC4M 7RD, United
Kingdom and incorporated in England and Wales with company number 9425113)

NOTICE OF 2019 ANNUAL GENERAL MEETING OF SHAREHOLDERS

To the holders of ordinary shares of Ferroglobe Plc ("Ferroglobe" or the "Company"):

Notice is hereby given that Ferroglobe's Annual General Meeting of shareholders will be held on Friday, 28 June 2019 at 10:00 a.m. (British Summer Time), at the Dorchester Collection Academy, Ground Floor, Lansdowne House, Berkeley Square, London, W1J 6ER, United Kingdom ("U.K.").

The business of the Annual General Meeting will be to consider and, if thought fit, pass the resolutions below. All resolutions will be proposed as ordinary resolutions. Explanations of the resolutions are given in the explanatory notes on pages 3 to 7 of this Annual General Meeting notice and additional information for those entitled to attend the Annual General Meeting can be found on pages 8 to 11. All resolutions will be put to vote on a poll, where each shareholder has one vote for each share held.

Certain of the resolutions that shareholders of the Company will be asked to consider may not be familiar to them because, unlike many companies with shares traded on the NASDAQ Global Select Market ("NASDAQ"), the Company is incorporated under the laws of England and Wales and is therefore subject to the U.K. Companies Act 2006 (the "Companies Act"). The Companies Act obliges the Company to propose certain matters to shareholders for approval that would generally not be subject to periodic approval by shareholders of companies incorporated in the United States but would be considered routine items for approval by shareholders of companies incorporated in England and Wales.

ORDINARY RESOLUTIONS:

U.K. annual report and accounts 2018

1.
THAT the directors' and auditor's reports and the accounts of the Company for the financial year ended 31 December 2018 (the "U.K. Annual Report and Accounts") be received.

Directors' Remuneration

2.
THAT the directors' remuneration policy (the "Remuneration Policy"), as set out on pages 25 to 38 of the U.K. Annual Report and Accounts be approved.

1


3.
THAT the directors' annual report on remuneration for the year ended 31 December 2018 (excluding the Remuneration Policy), as set out on pages 23 and 24 and 39 to 53 of the U.K. Annual Report and Accounts be approved.

Directors' re-election

4.
THAT Javier López Madrid be re-elected as a director.

5.
THAT José María Alapont be re-elected as a director.

6.
THAT Donald G. Barger, Jr. be re-elected as a director.

7.
THAT Bruce L. Crockett be re-elected as a director.

8.
THAT Stuart E. Eizenstat be re-elected as a director.

9.
THAT Manuel Garrido y Ruano be re-elected as a director.

10.
THAT Greger Hamilton be re-elected as a director.

11.
THAT Pedro Larrea Paguaga be re-elected as a director.

12.
THAT Juan Villar-Mir de Fuentes be re-elected as a director.

Appointment of Auditor

13.
THAT Deloitte LLP be appointed as auditor of the Company to hold office from the conclusion of the Annual General Meeting until the conclusion of the next general meeting at which accounts are laid before the Company.

Remuneration of auditor

14.
THAT the Audit Committee of the Board be authorised to determine the auditor's remuneration.

Dorcas Murray
Company Secretary

3 June 2019

2


Explanatory notes to the resolutions

Resolution 1 (U.K. Annual Report and Accounts 2018)

The Board is required to present at the Annual General Meeting the U.K. Annual Report and Accounts for the financial year ended 31 December 2018, including the Directors' Report, the Auditor's Report on the U.K. Annual Report and Accounts and those parts of the Directors' Remuneration Report which have been audited.

Resolution 1 is an advisory vote and in accordance with its obligations under English law, the Company will provide shareholders at the Annual General Meeting with the opportunity to receive the U.K. Annual Report and Accounts and ask any relevant and appropriate questions of the Board and/or any representative of Deloitte LLP in attendance at the Annual General Meeting.

Resolutions 2 and 3 (directors' remuneration)

These resolutions deal with the remuneration of the directors and seek approval of the Remuneration Policy and of the remuneration of the Directors during the year under review.

Resolution 2 is a binding vote to approve the Company's proposed Remuneration Policy. Under English law, a company's directors' remuneration policy must be put to its shareholders for approval at least once every three years. The Company's current directors' remuneration policy was last approved by shareholders in 2016 and was subject to extensive review by the Company's Compensation Committee in 2018. As a result of this review, a new Remuneration Policy, largely unchanged from that approved in 2016, is now put to the shareholders for approval. If approved, it will take effect from immediately following the conclusion of the Annual General Meeting. There is more information on the Remuneration Policy, including on the minor changes it proposes to the policy approved in 2016, on pages 25 to 38 of the UK Annual Report and Accounts.

Resolution 3 is an advisory vote to approve the directors' annual remuneration report for the year ended December 31, 2018. The directors' remuneration report is set out on pages 23 and 24 and 39 to 53 of the U.K. Annual Report and Accounts. It provides information on the remuneration of the directors for 2018 and that proposed for 2019; it includes a statement by the Chairman of the Compensation Committee but excludes the Remuneration Policy proposed for approval in resolution 2.

Resolutions 4 to 12 (directors seeking re-election)

In line with best practice in corporate governance, all our directors retire annually and, if agreed with them that they will continue in office, they offer themselves for re-election by the shareholders.

The biographies of the directors standing for re-election at the Annual General Meeting are set out below to enable shareholders to make an informed decision on their re-election. The biographies give the date of appointment of each director to the Board or Committees of Ferroglobe, as appropriate. Several of our directors have also held roles at Grupo FerroAtlántica S.A.U. ("FerroAtlántica") or Globe Speciality Metals, Inc. ("Globe"). On 23 December 2015 FerroAtlántica merged with Globe through corporate transactions (the "Business Combination") to form the Ferroglobe group of companies under Ferroglobe's ownership.

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Javier López Madrid has been Executive Chairman of the Company since 31 December 2016 and Chairman of our Nominations Committee since 1 January 2018. He was first appointed to the Board on 5 February 2015 and was the Company's Executive Vice-Chairman from 23 December 2015 until 31 December 2016.

He has been Chief Executive Officer of Grupo Villar Mir S.A.U., our principal shareholder, since 2008, is a member of the World Economic Forum, Group of Fifty and a member of the board of several non profit organizations. He is the founder and largest shareholder of Financiera Siacapital and founded Tressis, Spain's largest independent private bank.

Mr. López Madrid holds a Master in Law and Business from ICADE University.

José María Alapont was appointed to our Board as a Non-Executive Director on 24 January 2018 and to our Audit and Compensation Committees on 16 May 2018. Mr. Alapont was appointed on 16 January 2019 as our Senior Independent Director and Chairman of our Corporate Governance Committee.

Mr. Alapont holds a number of other board appointments. He has been a member of the board of directors of Ashok Leyland and of its investment and technology committee since 2017 and a member of its nomination and remuneration committee since 2018. Mr Alapont has also been a board director of Navistar Inc. and a member of its finance committee since 2016 and Chair of its nomination and governance committee since 2018. He has been a member of the board of directors of Hinduja Investments and Project Services Ltd since 2016 and of Hinduja Automotive Ltd since 2014.

Mr. Alapont was formerly President and Chief Executive Officer of Federal-Mogul Corporation, the automotive powertrain and safety components supplier, from March 2005 to 2012, Chairman of its board from 2005 to 2007 and board director from 2005 to 2013. Prior to that, he was Chief Executive and a board director of Fiat Iveco, S.p.A., a leading global manufacturer of commercial trucks, buses, defence and other specialized vehicles from 2003 to 2005. Prior to 2003, he held executive, vice presidential and presidential positions for more than 30 years at other leading global vehicle manufacturers and suppliers, such as Ford Motor Company, Delphi Corporation and Valeo S.A. His non-executive experience includes being member of the board of directors of the Manitowoc Company Inc. from 2016 to 2018 and a board director of Mentor Graphics Corp. from 2011 to 2012. He was a member of the Davos World Economic Forum from 2000 to 2011.

Mr. Alapont holds an Industrial Engineering degree from the Technical School of Valencia and a Philology degree from the University of Valencia in Spain.

Donald G. Barger, Jr, was appointed to our Board as a Non-Executive Director on 23 December 2015. He has served as the Chairman of our Compensation Committee and a member of our Nominations Committee since 1 January 2018. From 23 December 2015 to 31 December 2017, he was the Chair of our Nominating and Corporate Governance Committee and a member of our Compensation Committee.

Mr Barger was a member of the board of directors of Globe from December 2008 until the closing of the Business Combination and Chairman of Globe's audit and compensation committees. He had a successful 36-year business career in manufacturing and services companies, including as Vice President and Chief Financial Officer of YRC Worldwide Inc. (formerly Yellow Roadway Corporation)

4


from 2000 to 2007 and as advisor to the CEO from 2007 until his retirement in 2008. He was Vice President and Chief Financial Officer of Hillenbrand Industries, a provider of services and products for the health care and funeral services industries, from 1998 to 2000. He was Vice President of Finance and Chief Financial Officer of Worthington Industries, Inc., a diversified steel processor, from 1993 to 1998 and a member of the board of directors of Gardner Denver, Inc. and a member of its audit committee for his entire 19-year tenure until the company's sale in July 2013, serving as chair of the audit committee for 17 of those years. He served on the board of directors of Quanex Building Products Corporation for sixteen years, retiring in February 2012. He served on its audit committee for 14 years and was its Chair for most of that time.

Mr. Barger has a Bachelor of Science degree from the U.S. Naval Academy and an MBA from the University of Pennsylvania.

Bruce L. Crockett was appointed to our Board as a Non-Executive Director on 23 December 2015. He has been a member of our Audit Committee from that date and has served on our Compensation Committee since 1 January 2018.

Mr. Crockett holds a number of other board and governance roles. He has been Chairman of the Invesco Mutual Funds Group board of directors and a member of its audit, investment and governance committees, serving on the board since 1991, as Chair since 2003 and on the board of predecessor companies from 1978. Since 2013, he has been a member of the board of directors and, since 2014, Chair of the audit committee of ALPS Property & Casualty Insurance Company. He has been Chairman of, and a private investor in, Crockett Technologies Associates since 1996. He is a life trustee of the University of Rochester.

Mr. Crockett was a member of the board of directors of Globe from April 2014 until the closing of the Business Combination, as well as a member of Globe's audit committee. He was formerly President and Chief Executive Officer of COMSAT Corporation from 1992 until 1996 and its President and Chief Operating Officer from 1991 to 1992, holding a number of other operational and financial positions at COMSAT from 1980, including that of Vice President and Chief Financial Officer. He was a member of the board of directors of Ace Limited from 1995 until 2012 and of Captaris, Inc. from 2001 until its acquisition in 2008 and its Chairman from 2003 to 2008.

Mr. Crockett holds an A.B. degree from the University of Rochester, B.S. degree from the University of Maryland, an MBA from Columbia University and an Honorary Doctor of Law degree from the University of Maryland.

Stuart E. Eizenstat was appointed to our Board as a Non-Executive Director on 23 December 2015. He has been a member of the Company's Corporate Governance Committee since 1 January 2018 and was appointed to our Nominations Committee on 16 May 2018.

Mr. Eizenstat is Senior Counsel at Covington & Burling LLP in Washington, D.C. and has co-headed its international practice since 2001. He has served as a member of the advisory boards of GML Ltd. since 2003 and of the Office of Cherifien de Phosphates since 2010. He was a trustee of BlackRock Funds from 2001 until 2018.

Mr. Eizenstat was a member of board of directors of Globe from 2008 until the closing of the Business Combination and Chair of its nominating committee. He was a member of the board of directors of

5


Alcatel-Lucent from 2008 to 2016 and of United Parcel Service from 2005 to 2015. He has had an illustrious political, legal and advisory career, including serving as Special Adviser to Secretary of State, Hillary Clinton, and Secretary of State, John Kerry, on Holocaust-Era Issues from 2009 to 2017 and Special Representative of the President and Secretary of State on Holocaust Issues during the Clinton administration from 1993 to 2001. He was Deputy Secretary of the United States Department of the Treasury from July 1999 to January 2001, Under Secretary of State for Economic, Business and Agricultural Affairs from 1997 to 1999, Under Secretary of Commerce for International Trade from 1996 to 1997, U.S. Ambassador to the European Union from 1993 to 1996 and Chief Domestic Policy Advisor in the White House to President Carter from 1977 to 1981. He is the author of "Imperfect Justice: Looted Assets, Slave Labor, and the Unfinished Business of World War II"; "The Future of the Jews: How Global Forces are Impacting the Jewish People, Israel, and its Relationship with the United States" and "President Carter: The White House Years". He has published articles on economic, trade, and foreign policy issues for a wide-range of publications, including among many others, The New York Times, Washington Post, Financial Times, Foreign Affairs Magazine, Foreign Policy Magazine, The Hill and Politico.

Mr. Eizenstat holds a B.A. in Political Science, cum laude and Phi Beta Kappa, from the University of North Carolina at Chapel Hill, a J.D. from Harvard Law School and nine honorary doctorate degrees and awards from the United States, French, German, Austrian, Belgian and Israeli governments.

Manuel Garrido y Ruano was appointed to our Board as a Non-Executive Director on 30 May 2017. He was a member of our Nominating and Corporate Governance Committee from 30 May 2017 until 31 December 2017, when he was appointed to our Corporate Governance Committee.

Mr. Garrido y Ruano has been Chief Financial Officer of Grupo Villar Mir S.A.U. since 2003 and a member of the board or on the steering committee of a number of its subsidiaries in the energy, financial, construction and real estate sectors. He is Professor of Communication and Leadership of the Graduate Management Program at CUNEF in Spain. Mr. Garrido y Ruano was a member of the steering committee of FerroAtlántica until 2015, having previously served as its Chief Financial Officer from 1996 to 2003. He worked with McKinsey & Company from 1991 to 1996, specializing in restructuring, business development and turnaround and cost efficiency projects globally.

Mr. Garrido y Ruano holds a Masters in Civil Engineering with honors from the Universidad Politecnica de Madrid and an MBA from INSEAD.

Greger Hamilton was appointed to our Board as a Non-Executive Director on 23 December 2015. He was a member of our Compensation Committee from that date until 31 December 2017. He has been Chairman of our Audit Committee since 23 December 2015 and a member of our Corporate Governance Committee since 1 January 2018.

Mr. Hamilton has been Managing Partner of Ovington Financial Partners Ltd since 2009. He is cofounder of the BrainHealth Club and has been a member of its board of directors since 2016. From 2009 to 2014, Mr. Hamilton was a partner at European Resolution Capital Partners, where he assisted in the restructuring of international banks in 16 countries and managing director at Goldman Sachs International from 1997 to 2008. He began his career at McKinsey and Company, where he worked from 1990 to 1997.

Mr. Hamilton holds a B.A. in Business Economics and International Commerce from Brown University.

6


Pedro Larrea Paguaga has been Chief Executive Officer of the Company since 23 December 2015 and a member of our Board of Directors since 28 June 2017.

Mr. Larrea was Chairman of FerroAtlántica from 2012 to 2015, and Chief Executive Officer of FerroAtlántica from 2011 to 2015. From 1996 to 2009, he held various executive roles at Endesa, the biggest power company in Spain and Latin America, including as Chairman and CEO of Endesa Latinoamérica. He was a board director of Enersis from 2007 to 2009 and of Endesa Chile from 1999 to 2002 and from 2006 to 2007, both being Chilean companies listed on the NYSE. In 2010 and 2011, he held management consulting roles with PwC, where he led the energy sector practice in Spain, and from 1989 to 1995 he worked for McKinsey & Company in Spain, Latin America and the United States.

Mr. Larrea holds a Mining Engineering degree (MSc equivalent) from Universidad Politécnica de Madrid, from where he graduated with honors and an MBA from INSEAD, where he was awarded the Henry Ford II award for academic excellence.

Juan Villar-Mir de Fuentes was appointed to our Board as a Non-Executive Director on 23 December 2015.

Mr. Villar-Mir de Fuentes has been Vice Chairman of Inmobiliaria Espacio, S.A since 1996 and Vice Chairman of Grupo Villar Mir, S.A.U. since 1999. He has been a member of the board of directors of Obrascon Huarte Lain, S.A. since 1996, a member of the audit committee and, later, its compensation committee and its Chairman since 2016. He was a board director and member of the compensation committee of Inmobiliaria Colonial, S.A from June 2014 to May 2017. He also was a member of the board of directors and of the compensation committee of Abertis Infraestructuras, S.A. between 2013 and 2016.

Mr. Villar-Mir de Fuentes is Patron and member of the Patronage Council of Fundación Nantik Lum and Fundación Princesa de Gerona

Mr. Villar-Mir holds a Bachelor's Degree in Business Administration and Economics and Business Management.

Resolution 13 (appointment of auditor)

At each general meeting at which accounts are laid before the shareholders, the Company is required to appoint an auditor to serve until the next such meeting. Deloitte LLP has served as the Company's U.K. statutory auditor since 3 February 2016.

If this resolution does not receive the affirmative vote of a majority of the shares entitled to vote and present in person or represented by proxy at the Annual General Meeting, the Board may appoint an auditor to fill the vacancy.

Resolution 14 (remuneration of auditor)

Under the Companies Act, the remuneration of the Company's U.K. statutory auditor must be fixed in a general meeting or in such manner as may be determined in a general meeting. The Company asks its shareholders to authorise the Audit Committee to determine the remuneration of Deloitte LLP in its capacity as the Company's U.K. statutory auditor under the Companies Act.

7


Further notes:

1.
Some of the resolutions are items that are required to be approved by shareholders periodically under the Companies Act and generally do not have an analogous requirement under United States laws and regulations. As such, while these resolutions may be familiar and routine to shareholders accustomed to being shareholders of companies incorporated in England and Wales, other shareholders may be less familiar with these routine resolutions and should review and consider each resolution carefully.

2.
In accordance with the Articles, all resolutions will be taken on a poll. Voting on a poll will mean that each Ordinary Share represented in person or by proxy will be counted in the vote.

3.
All resolutions will be proposed as ordinary resolutions, which means that such resolutions must be passed by a simple majority of the total voting rights of shareholders who vote on such resolutions, whether in person or by proxy. The results of the shareholders' vote on resolutions 1 and 3 regarding receipt of the U.K. Annual Report and Accounts and approval of the Directors' Remuneration Report will not require the Board or any Committee thereof to take (or refrain from taking) any action. The Board values the opinion of shareholders as expressed through such resolutions and will carefully consider the outcome of the votes on resolutions 1 and 3.

4.
"Shareholders of record" are those persons registered in the register of members of the Company in respect of Ordinary Shares at 10:00 a.m. (British Summer Time) on 3 May 2019. If, however, Ordinary Shares are held for you in a stock brokerage account or by a broker, bank or other nominee, you are considered the "beneficial owner" of those Ordinary Shares.

5.
Beneficial owners of Ordinary Shares as at 10:00 a.m. (British Summer Time) on 3 May 2019 have the right to direct their broker or other agent on how to vote the Ordinary Shares in their account and are also invited to attend the Annual General Meeting. However, as beneficial owners are not Shareholders of record of the relevant Ordinary Shares, they may not vote their Ordinary Shares at the Annual General Meeting unless they request and obtain a legal proxy from their broker or agent.

6.
Any Shareholder of record attending the Annual General Meeting has the right to ask questions. The Company must cause to be answered any questions put by a Shareholder of record attending the meeting relating to the business being dealt with at the Annual General Meeting unless to do so would interfere unduly with the business of the meeting, be undesirable in the interests of the Company or the good order of the meeting, involve the disclosure of confidential information or if the information has already been given on the Company's website.

7.
In accordance with the provisions of the Companies Act, and in accordance with the Articles, a Shareholder of record who is entitled to attend and vote at the Annual General Meeting is entitled to appoint another person as his or her proxy to exercise all or any of his or her rights to attend and to speak and vote at the Annual General Meeting and to appoint more than one proxy in relation to the Annual General Meeting (provided that each proxy is appointed to exercise the rights attached to different Ordinary Shares). Such proxies need not be Shareholders of record, but must attend the Annual General Meeting and vote as the

8


8.
Pursuant to section 527 of the Companies Act 2006, shareholders meeting the threshold requirements set out in that section have the right to require the Company to publish on a website a statement setting out any matter relating to:

(a)
the audit of the Company's accounts (including the auditor's report and the conduct of the audit) that are to be laid before the AGM; or

(b)
any circumstance connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual accounts and reports were laid in accordance with section 437 of the Companies Act 2006.

The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with sections 527 or 528 of the Companies Act 2006. Where the Company is required to place a statement on a website under section 527 of the Companies Act 2006, it must forward the statement to the Company's auditor no later than the time when it makes the statement available on the website. The business which may be dealt with at the AGM includes any statement that the Company has been required under section 527 of the Companies Act 2006 to publish on a website.

9.
The results of the polls taken on the resolutions at the Annual General Meeting and any other information required by the Companies Act will be made available on the Company's website as soon as reasonably practicable following the AGM and for a period of two years thereafter.

10.
A copy of this Annual General Meeting notice can be found at the Company's website, www.ferroglobe.com.

11.
Recipients of this notice and the accompanying materials may not use any electronic address provided in this notice or such materials to communicate with the Company for any purposes other than those expressly stated.

12.
To be admitted to the Annual General Meeting, please bring the Admission Ticket that you will have received through the post. You will need to be able to provide your photo identification at the registration desk.

13.
On arrival at the Annual General Meeting venue, all those entitled to vote will be required to register and collect a poll card. In order to facilitate these arrangements, please arrive at the Annual General Meeting venue in good time. You will be given instructions on how to complete your poll card at the Annual General Meeting.

9


VOTING PROCESS AND REVOCATION OF PROXIES

If you are a Shareholder of record, there are three ways to vote by proxy:

Telephone and Internet voting facilities for Shareholders of record will be available 24 hours a day and will close at 10:01 a.m. (British Summer Time) on Wednesday, 26 June 2019. Submitting your proxy by any of these methods will not affect your ability to attend the Annual General Meeting in-person and vote at the Annual General Meeting.

If your shares are held in "street name", meaning you are a beneficial owner with your shares held through a bank or brokerage firm, you will receive instructions from your bank or brokerage firm, which is the Shareholder of record of your shares. You must follow the instructions of the Shareholder of record in order for your shares to be voted. Telephone and Internet voting may also be offered to shareholders owning shares through certain banks and brokers, according to their individual policies.

The Company has retained Computershare to receive and tabulate the proxies.

If you submit proxy voting instructions and direct how your shares will be voted, the individuals named as proxies must vote your shares in the manner you indicate.

A shareholder who has given a proxy may revoke it at any time before it is exercised at the Annual General Meeting by:

10


You should send any written notice or new proxy card to Proxy Services, c/o Computershare Investor Services, PO Box 30202 College Station, TX 77842-9909, USA.

If you are a registered shareholder you may request a new proxy card by calling Computershare at 1-866-490-6057 if calling from the United States, or +1-781-575-2780 from outside the United States, or you may also send a request via email to web.queries@computershare.com.

ANY SHAREHOLDER OWNING SHARES IN STREET NAME MAY CHANGE OR REVOKE PREVIOUSLY GIVEN VOTING INSTRUCTIONS BY CONTACTING THE BANK OR BROKERAGE FIRM HOLDING THE SHARES OR BY OBTAINING A LEGAL PROXY FROM SUCH BANK OR BROKERAGE FIRM AND VOTING IN PERSON AT THE ANNUAL GENERAL MEETING. YOUR LAST VOTE, PRIOR TO OR AT THE ANNUAL GENERAL MEETING, IS THE VOTE THAT WILL BE COUNTED.


Location of Annual General Meeting:

GRAPHIC

DOCUMENTS AVAILABLE FOR INSPECTION

Forms of appointment of the non-executive directors, as well as a memorandum setting out the terms of the executive director's contracts, will be available for inspection at the Company's registered office during normal business hours and at the place of the Annual General Meeting from at least 15 minutes prior to the start of the meeting until the end of the Annual General Meeting.

By order of the Board,

Dorcas Murray
Company Secretary

3 June 2019

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QuickLinks

Location of Annual General Meeting

Table of Contents


Exhibit 99.2

LOGO


Ferroglobe PLC

Annual Report and Accounts 2018


Table of Contents


Company Registration No. 9425113

Ferroglobe PLC

Report and Financial Statements

Period ended 31 December 2018


Ferroglobe PLC

Report and financial statements 2018

Contents

    Page No.
 

Glossary and definitions

    1  

Officers and professional advisers

   
4
 

Introduction

   
5
 

Chairman's letter to shareholders

   
6
 

Strategic report

   
9
 

Directors' report

   
12
 

The Board of Directors

   
18
 

Directors' remuneration report

   
23
 

Independent auditor's report to the members of Ferroglobe PLC

   
54
 

Consolidated financial statements

   
64
 

Notes to the consolidated financial statements

   
70
 

Parent company financial statements

   
178
 

Notes to the parent company financial statements

   
180
 

Appendix 1 — Non-IFRS financial metrics

   
187
 

Table of Contents


Ferroglobe PLC

GLOSSARY AND DEFINITIONS

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

"2018"

  the financial year ended 31 December 2018;

"2017"

 

the financial year ended 31 December 2017;

"2019 AGM"

 

the Annual General Meeting of the Company, to be held on 28 June 2019;

"2018 Form 20-F"

 

the Company's Form 20-F for the fiscal year ended 31 December 2018;

"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;

"Articles"

 

The Articles of Association of the Company, from time to time;

"Auditor"

 

Deloitte LLP, the Company's independent U.K. statutory auditor;

"Aurinka"

 

Aurinka Photovoltaic Group, S.L.;

"Blue Power"

 

Blue Power Corporation, S.L.;

"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 "Chief Executive"

 

The Chief Executive Officer of the Company, or where the context requires, of the relevant company or organization;

"Companies Act"

 

the U.K. Companies Act 2006;

"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;

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"Consolidated Financial Statements"

 

(save in the supplemental attachment when it will have the meaning given below) these consolidated financial statements for the year ended December 31, 2018

"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;

"FerroAtlántica" or "Grupo FerroAtlántica" or "Predecessor"

 

Grupo FerroAtlántica, S.A.U. a joint stock 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;

"Globe" or "GSM"

 

Globe Specialty Metals, Inc., a Delaware corporation, 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;

"Indenture"

 

the indenture, dated as of 15 February 2017, among Ferroglobe and Globe as co-issuers, certain subsidiaries of Ferroglobe as guarantors, and Wilmington Trust, National Association as trustee, registrar, transfer agent and paying agent;

"KPI"

 

key performance indicator;

"NASDAQ"

 

the NASDAQ Global Select Market;

"NASDAQ Rules"

 

the NASDAQ Stock Market Rules;

"Net debt"

 

bank borrowings, debt instruments, obligations under finance leases, and other financial liabilities, less cash and cash equivalents. Alternative Performance Measures are reconciled at Appendix 1;

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"Non-Executive Directors" or "NEDs"

 

the non-executive directors of the Company;

"Notes"

 

$350,000,000 aggregate principal amount of Senior Notes due 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;

"Revolving Credit Facility Agreement" or "RCF"

 

the credit agreement, dated 27 February 2018, as amended on or about 31 October 2018 and 22 February 2019 among Ferroglobe PLC, as Borrower, certain subsidiaries of Ferroglobe PLC from time to time party thereto as guarantors, the financial institutions from time to time party thereto as lenders, PNC Bank, National Association, as administrative agent, issuing lender and swing loan lender, PNC Capital Markets LLC, Citizens Bank, National Association and BMO Capital Markets Corp., as joint legal arrangers and bookrunners, Citizens Bank, National Association, as syndication agent, and BMO Capital Markets Corp., as documentation agent, as amended 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;

"SEC"

 

the U.S. Securities and Exchange Commission;

"SOX"

 

the U.S. Sarbanes-Oxley Act of 2002;

"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), 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 2018, 2017 and 2016 and for each of the years ended 31 December 2018, 2017, and 2016, including the related notes thereto, prepared in accordance with IFRS as issued by the IASB, as filed on the 2018 Form 20-F.

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Ferroglobe PLC

Report and financial statements 2018
Officers and professional advisers

 
   
Directors    
J López Madrid    
J M Alapont   (appointed 24 January 2018)
D G Barger    
B L Crockett    
S E Eizenstat    
M Garrido y Ruano    
G Hamilton    
P Larrea Paguaga    
J Monzón   (resigned 13 May 2019)
P Vareille   (resigned 14 May 2019)
J Villar-Mir de Fuentes    

Company Secretary

 

 
Dorcas Murray   (appointed 31 January 2018)

Registered Address

 

 
5 Fleet Place    
London    
EC4M 7RD    

Auditor

 

 
Deloitte LLP    
Statutory Auditor    
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: 9425113. Headquartered in London, U.K., Ferroglobe (encompassing its subsidiaries Globe and FerroAtlántica) is one of the world's largest producers globally of silicon metals and silicon and manganese based alloys, with an expanded geographical reach building on Globe's footprint in North America and FerroAtlántica's footprint in Europe.

          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 2018 and ending 31 December 2018), which together comprise our U.K. annual reports and accounts for the period ended 31 December 2018 (the "U.K. Annual Report").

          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 2018 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 the SOX, as well as related rules subsequently 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 extracts from the 2018 Form 20-F to assist shareholders in assessing the Group's strategies. This attachment does not form part of the financial statements. Investors may obtain the full 2018 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 capitalised terms used throughout the U.K. Annual Report 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 shareholders

          2018 was a mixed year for the Company. Our financial results for the year were the strongest that Ferroglobe has reported, with EBITDA up 105.6% and Adjusted EBITDA up 37.1% from the prior year. We welcomed a new and valued independent board member, applauded the favourable determination in the sunset review of the U.S. antidumping duty order on silicon metal from China, continued the integration of our new manganese alloy plants and announced a number of commercial and technological successes in our development projects. While the outcome of the U.S. antidumping and countervailing duty action against silicon metal imports from Australia, Brazil, Kazakhstan and Norway was disappointing, we remain confident that our actions were rightly taken to ensure a level playing field for all market participants in the industry.

          The first half of the year was particularly positive; in the second half we began to see signs of market deterioration. In response to the downturn, we focused on the generation of cash-flow, disposing of non-core assets and suspending, switching or reducing production across our global platform. Nonetheless our financial performance suffered in the final two quarters.

Health and Safety

          Improving our performance on health and safety remains a top priority for all of management. Throughout 2018, we saw clear evidence of continuous improvements across a number of our sites as we shared best practice throughout the Group. We continue to strive to meet the highest industry standards and to incentivise management to achieve ever lower injury rates. Although our performance on health and safety improved during the year, we were not satisfied with our results in 2018 and, therefore, in 2019, improvements in health and safety remain an underpin to the annual bonus for Executives.

Financial Performance in 2018 and into 2019

          We started the year on the back of a buoyant end to 2017. The combination of a return to a stable market and our ability to optimize our production platform enabled us to post Adjusted EBITDA of $89.6 million in the first and $86.3 million in the second quarter of 2018. Our Adjusted EBITDA for 2018 was $253.1 million, up 37.1% on the prior year and our revenues increased by 30.6% over 2017.

          It was a year of two halves. In the first half we saw positive momentum across all of our product groups. Silicon metal prices rose and, following positive signals, we ramped up production across all of our plants in anticipation of a favourable outcome in the silicon trade metals case in the U.S. and Canada. The acquisition in February 2018 of manganese alloy plants at Mo i Rana in Norway and Dunkirk in France made us one of the world's largest producer of manganese alloys. The favourable pricing environment in silicon metals also encouraged our competitors to increase production and, as we moved into the second half of the year, over-supply contributed to a slowdown in demand and a retraction in pricing. Demand shrinkage began to affect our other products, albeit from near unprecedented highs. The integration of the manganese asset plants in Norway and France temporarily drove up our working capital and higher manganese ore prices contributed to an increase in net debt.

          As we approached the last quarter of 2018, reduction in finished inventory and cash-flow generation became key. We idled less profitable plants, cut cost and drove non-core asset divestitures. As a result, we ended 2018 with net debt at $429 million and working capital down $84 million on the prior quarter — at levels close to those of the fourth quarter of 2017, excluding the impact of our two new plants.

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          While we achieved and exceeded the targets set for our cash-generating initiatives for the second half of 2018, we recognize the need to approach 2019 with caution. The outlook across our portfolio remains uncertain in the near-term. Accordingly, we have secured amendments to our financial covenants to focus on secured net leverage and liquidity in the period to March 2020 and reduced our revolving credit facility by $50 million to $200 million.

          We are committed to de-leveraging our balance sheet and have established further cash-flow generating priorities for 2019, including reducing capital expenditure, managing overhead costs and divesting non-core assets, as we re-shape the business and the organization to be leaner and increasing agile, both in its structure, its management and its decision-making processes. We will continue to optimize of our flexible production base to idle less competitive facilities and employ process improvements and changes to our raw materials mix to increase productivity.

          On 3 June 2019 we announced the sale of our hydropower plants in Galicia to investment vehicles affiliated with TPG Sixth Street Partners for a consideration of €170m, subject to adjustments. The divestiture includes our smelting plant at Cee Dumbria, in relation to which, on completion, we will enter into a long-term tolling arrangement under which we will be the exclusive off-taker of the finished goods produced at the plant and supplier of its key raw materials. This transaction represents an important step in the streamlining of our business and in strengthening our balance sheet, improving our financial profile while maintaining our presence in the ferroalloys market. Completion is conditional on anti-trust clearance and authorization to the early termination of the finance lease, among other things, and is expected to take place in the third quarter of 2019. The net proceeds received will either be retained to increase liquidity on our balance sheet or used to reduce our debt.

Governance, board and senior management changes

          We were delighted when José María Alapont joined our Board in January 2018 and our Audit and Compensation Committees in May 2019. He is a highly respected industry figure with considerable senior executive and board level experience across many countries. In January 2019, when Javier Monzón informed the Board of the need to step down from these roles and consider imminent retirement from the Board early in 2019 in order to meet other pressing commitments, José María Alapont agreed to step up to become our Senior Independent Director and Chair of our Corporate Governance Committee in his place.

          Javier Monzón resigned from the Board on 13 May 2019, having served with us since 2015 and been Chair of a number of our committees, as well as lead independent director, during that time. Pierre Vareille, who had joined the Board in October 2017, also stepped down on 14 May 2019. I would like to thank them both, personally and on behalf of the Board, for their invaluable commitment and contributions to the Board and the Company.

          We reviewed our corporate governance policy as it approached the end of its eighteen-month term in 2018 and re-affirmed our commitment to a majority independent board. Following the resignations of Javier Monzón and Pierre Vareille and commensurate with our other actions to re-shape the organization and reduce cost, the Board decided to reduce its size from eleven directors to nine. This is an appropriate measure, enabling us to maintain diversity of thought and experience, curb cost and enhance our flexibility and responsiveness, without prejudicing governance. Our remaining seven non-executive — of whom five are independent — and two executive directors will all stand for re-election at the Company's annual general meeting in June 2019.

          Phillip Murnane, the Company's Chief Financial Officer, gave notice of his intention to resign, effective 29 July 2019. During his tenure, he led a number of key projects, including embedding improvements to the Company's internal controls and reporting practices, as well as contributing to

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our cash generating initiatives. The search for his successor is underway. We concurrently announced a number of other senior management changes which reflect our ongoing commitment to consolidate roles and de-layer and simplify the organization.

Looking Ahead

          2019 offers challenges and opportunities to the Company. We expect it also to be a year of two halves. We have articulated a clear path to reduced cost and further deleveraging but we are conscious that the headwinds faced in the second half of 2018 continue to blow and the market is uncertain. Our focus remains on recovering value for shareholders: strengthening our balance sheet, continuing to drive down cost and generate cash, with firm belief in the underlying value of our business and asset base, the strength of our competitive position and the unique flexibility that our global production platform provides to take advantage of market recovery as it emerges. The cost reduction actions underway and systemic restructuring of our business will make it more agile and better able to weather the cyclicality of our industry.

          I would like to finish by expressing my thanks to our loyal and hard-working employees across the Group and to our customers, suppliers and other partners for their valued contribution. I would also like to thank you, our shareholders, for your continued support. Together with all my colleagues at Ferroglobe, I look forward to the challenge of 2019.

Javier López Madrid

Executive Chairman

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Strategic report

          This strategic report for the financial year to 31 December 2018 has been prepared in compliance with Section 414C of the Companies Act to provide an overview of the Group's business and strategy. It contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

          For a supplementary description of our business (including our model, strategy and competitive strengths), risks associated with our business and our results of operations, see the sections of the 2018 Form 20-F: Part I, Item 3, Section D, Risk factors; Item 4, Information on the Company; Item 5, Operating and Financial Review and Prospects; Item 7, Major Shareholders and Related Party Transactions and Item 11, Quantitative and Qualitative Disclosures About Market Risk. These sections are set out in a separate attachment to this U.K. Annual Report and do not form part of the financial statements.

Nature of the business

          Ferroglobe is a global leader in the growing silicon and specialty metals industry with an expansive geographical reach. It is one of the world's largest producers of silicon metal, silicon based alloys and manganese based alloys and has quartz mining activities, low-ash metallurgical quality coal mining activities and interests in hydroelectric power across the globe, with operating units in 9 countries across 5 continents.

          The Group sells its products to a diverse base of customers worldwide, including manufacturers of aluminium, silicone compounds used in the chemical industry, ductile iron, automotive parts, photovoltaic (solar) cells, electronic semiconductors and steel and are key elements in the manufacture of a wide range of industrial and consumer products. Supplies to customers are made from our production centres in North America, Europe, South America, Africa and Asia. The Group's manufacturing platform is flexible, enabling it to switch production between plants and products to enhance profitability and meet customer requirements. The Group's ownership of sources of critical raw materials also contributes to reduced operating costs. Ferroglobe recycles and sells most of the by-products generated in its production processes.

Business model and strategy

          We believe our vertically integrated business model and ownership of raw materials provides us with a cost advantage over our competitors. We are not reliant on any single supplier for our raw materials and currently own sources of these materials, which provides us with stable, long-term access to critical raw materials for our production processes and, therefore, enhances operational and financial stability.

          As part of the strategy for delivering the objectives of the Company, the Group develops new products or new specifications on a continual basis. As a consequence of these efforts, investments may be made in facilities that allow the production of new products, such as higher-grade silicon metal, solar grade silicon metal or new foundry products.

          The Group is continually pursuing growth opportunities by the acquisition of industrial facilities or companies that operate in the same sector and products and which are deemed to be potentially valuable for the Group.

          There is more information on the Group's business and organizational structure in Part I, Item 4, Information on the Company of the 2018 Form 20-F (as set out in the separate attachment

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to this U.K. Annual Report and not forming part of our financial statements). This, together with the information in this Strategic Report, and the Operating and Financial Review and Prospects section of the 2018 Form 20-F included in the separate attachment provides a fair review of the Company's business and its development and performance during 2018.

Key Performance Indicators ("KPIs")

          The Board considered that the most important KPIs during 2018 were those set out below. Certain of these KPIs will also be core during 2019.

          At the corporate level, the principal KPIs that we use for measuring the overall performance of our business are:

Adjusted EBITDA
Adjusted EBITDA margin
Working capital improvement
Free cash-flow
Net Debt to Adjusted EBITDA
Net Debt to Total Assets
Net Debt to Capital; and
Net Income.

          Some of these measures are also part of our compensation structure for the key executives, as follows:

          The following table sets out the Company's performance in respect of these financial measures in 2018.

  Adjusted
EBITDA
  Adjusted
EBITDA
Margin
  Working
Capital
Improvement
  Free Cash-
Flow
  ($m)       ($m)   ($m)
  253.0   11.1   (76.3)   (32.4)

 

  Net
Income
  Net Debt to
Adjusted
EBITDA
  Net Debt to
Total Assets
  Net Debt to
Capital
  ($m)            
  43.7   1.69x   20.2%   32.7%

          In addition to these financial KPIs, there are a number of non-financial performance measures which the Company uses to gauge its success. Some of these are reflected in the annual bonus objectives for senior management and are reviewed each year to ensure their continued relevance. In the financial year ended 31 December 2017, a number of these reflected the focus on strengthening the Company's balance sheet. In 2018, the non-financial KPIs included establishing and pursuing an aggressive growth plan and setting a long-term dividend and financial structure policy, as well as personal strategic objectives relevant to the Executive's role. There is more on these measures in the Directors' Remuneration Report. In 2019, the annual bonus plan is subject to

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an underpin related to improvements in the Group's health and safety performance and a further condition relating to financial performance. Details of the outcome for these measures will be reported in the Company's annual report and accounts for the year ending 31 December 2019.

          Details of the Group's anti-bribery and corruption and environmental policies are below and details of its employment policies and greenhouse gas emissions are set out below and in the Directors' Report.

Principal risks and uncertainties

          The Company is exposed to a number of operational risks which are monitored on an ongoing basis and which are summarised in the supplementary attachment. The key financial risks related to credit risk and liquidity risk are highlighted in Note 27.

Employees

          As at 31 December 2018, the Group had:

Environment and other social matters

          Ferroglobe is committed to conducting its business in compliance with all applicable laws and regulations in a manner that has the highest regard for human rights, the environment and the health and safety and well-being of employees and the general public. During the year under review the Group's employees were each asked to re-confirm in writing their commitment to the Company's revised and refreshed Code of Conduct which emphasizes the Group's commitment to the highest standards of integrity, ethical behavior, transparency, safety and corporate citizenship. The Code of Conduct incorporates the Group's key policies on matters including whistleblowing, anti-bribery and corruption, environmental impacts, health and safety and respect in the workplace and the conduct of national and international trade.

          The Strategic Report for the financial period ended 31 December 2018 has been reviewed and approved by the Board on 3 June 2019.

Pedro Larrea Paguaga

Director

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Directors' report

          The Directors present their report and the audited financial statements of the Group and Company for the year ended 31 December 2018.

          The Directors' Report comprises these pages (12 to 17) and the other sections and pages of the Annual Report cross-referred below which are incorporated by reference.

          As permitted by legislation, certain disclosures normally included in the Directors' Report have instead been integrated into the Strategic Report (pages 9 to 11). These disclosures include information relating to the Group's principal risks and uncertainties.

Directors

          The directors of the Company, who held office at any time during the year to 31 December 2018, were as follows:

Javier López Madrid   Director and Executive Chairman
José María Alapont   Non-Executive Director
Donald G. Barger, Jr.    Non-Executive Director
Bruce L. Crockett   Non-Executive Director
Stuart E. Eizenstat   Non-Executive Director
Manuel Garrido y Ruano   Non-Executive Director
Greger Hamilton   Non-Executive Director
Pedro Larrea Paguaga   Director and Chief Executive Officer
Javier Monzón   Non-Executive Director
Pierre Vareille   Non-Executive Director
Juan Villar-Mir de Fuentes   Non-Executive Director

          Mr José María Alapont was appointed on 24 January 2018. Messrs Javier Monzón and Pierre Vareille resigned from the Board on 13 and 14 May 2019, respectively.

          The biographies of the directors standing for re-election at the 2019 AGM are set out on pages 18 to 21.

Directors' indemnities

          As required by the Articles, each director is indemnified in connection with his role as a director, to the extent permitted by law. As permitted by the Articles, the Company has purchased and maintained throughout the year under review directors' and officers' liability insurance.

Share repurchases

          On 21 August 2018 the Company announced a programme to purchase up to $20 million of Ordinary Shares in the period ending 31 December 2018, as it did not consider the share price then prevailing to reflect the Company's long-term intrinsic value and considered the Ordinary Shares to offer an attractive investment opportunity. During 2018, the Company purchased 2,894,049 Ordinary Shares for a total consideration of $19,927,214.50 excluding fees, commission and stamp duty at an average price of $6.89 prior to fees, commission and stamp duty (2017: nil). Of the Ordinary Shares purchased, 1,741,091 are held in treasury and have been retained and 1,152,958 were cancelled. The Company's share capital as at 31 December 2018 was 169,122,682 Ordinary Shares excluding those held in treasury or 170,863,773 Ordinary Shares including those held in treasury. There is more information on the share repurchase programme at Note 13 in the Consolidated Financial Statements.

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Dividends

          On each of 21 May 2018 and 21 August 2018, the Board declared a dividend of $0.06 per Ordinary Share payable to shareholders of record at the close of business on 8 June and 5 September 2018 and payable on 29 June and 20 September 2018, respectively. No further dividends were declared in 2018 and the future declaration and payment of dividends to shareholders and the amount of any such dividend will be at the discretion of the Board.

Political donations

          During the year under review the Company has not made any political donations, incurred any political expenditure or made any contributions to an EU or non-EU political party.

Employee policies

          Ferroglobe has a culture of continuous improvement through investment in people at all levels within the organisation. Its Code of Conduct ("Code"), which applies to all directors and to employees of the Group, sets out Ferroglobe's commitment to protecting, respecting and supporting its workforce. The Code was revised in 2017 to bring together Ferroglobe's policies on key ethical, behavioural and compliance matters. Its roll-out across the Group globally was initiated in autumn 2017, supported by mandatory training for all employees. In 2018, Group personnel were requested to re-certify their knowledge of and continued compliance with the Code. The adoption and further promulgation of the Code is consistent with our evolution to an organization with an integrated approach to human relations policies across the five continents in which the Group operates.

          Those key policies include:

          Ferroglobe is committed to providing equal opportunities for all Group personnel and to creating an inclusive workforce by promoting employment equality. This includes pursuing equality and diversity in all its employment activities, including recruitment, training, career development and promotion and ensuring there is no bias or discrimination in the treatment of people. Ferroglobe opposes all forms of unlawful or unfair discrimination on the grounds of race, age, nationality, religion, ethnic or national origin, sexual orientation, gender or gender reassignment, marital status or disability. Wherever possible, vacancies are filled from within Ferroglobe and efforts are made to create opportunities for internal promotion.

Greenhouse gas emissions

          The UK Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013 requires UK-based quoted companies to report global greenhouse gas ("GHG") emissions data in the Annual Report and Accounts. Comparison year data for 2017 and 2018 is included in Table 2 in

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this report. As in 2017, the 2018 GHG inventory was prepared in accordance with the Ferroglobe PLC Greenhouse Gas Inventory Management Plan (2017), prepared in consultation with ERM Group, Inc. and its UK affiliate (the "IMP").

          The Company has selected the Operational Control approach and criteria as the basis for reporting GHG emissions data, defining "Operational Control" to encompass facilities the Group owns and operates, facilities it leases and operates, and joint venture facilities it operates. All facilities within Ferroglobe's Operational Control that are material to its Group-wide GHG emission inventory are included in reported figures. This approach means that the operations for which emissions are reported are substantially coextensive with operations comprised in Ferroglobe's consolidated financial reporting. The Company does not have responsibility for any emission sources that are not included in its financial reporting.

          Table 1 sets forth the Company's consolidated greenhouse gas emissions expressed in metric tonnes of carbon dioxide equivalent (CO2e). The figures reported below include all material direct (Scope 1) and indirect (Scope 2) emission sources for facilities within the Company's Operational Control. Principal sources of Scope 1 emissions from operations at, or Scope 2 emissions imputed to, Ferroglobe-controlled facilities include:

          Global GHG emissions data for period 1 January 2018 to 31 December 2018

Emissions from:

    Tonnes of CO2e
 

Combustion of fuel and operation of facilities

    3,248,196 *

Electricity, heat, steam and cooling purchased for own use

    2,479,290  

Company's chosen intensity measurement:

       

Emissions reported above normalized to per tonne of product output

    5.01  

*
In line with DEFRA Guidance, 1.5 million tonnes of CO2e are not included in the above table, due to being biogenic in nature.

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          Global GHG emissions data for periods 1 January to 31 December 2017 and 2018

Emissions from:

    2017
Tonnes of CO2e
    2018
Tonnes of CO2e
 

Combustion of fuel and operation of facilities

    2,810,610 *   3,248,196 **

Electricity, heat, steam and cooling purchased for own use          

    2,305,089     2,479,290  

Company's chosen intensity measurement:

             

Emissions reported above normalized to per tonne of product output

    5.6     5.01  

*
In line with DEFRA Guidance, 1.2 million tonnes of CO2e are not included in the above table, due to being biogenic in nature.

**
In line with DEFRA Guidance, 1.5 million tonnes of CO2e are not included in the above table, due to being biogenic in nature.

Methodology

          In preparing the IMP and this report, the Company has adhered to the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard — Revised Edition (2004) and the UK DEFRA's Environmental Reporting Guidelines: Including mandatory greenhouse gas emissions reporting guidance (June 2013) ("DEFRA Guidance"). The Company reports material emissions of three out of the six Kyoto GHGs, viz. carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O). A fourth, sulfur hexafluoride (SF6), is present in electrical breakers at some Company facilities, but no emission of SF6 of have been observed. The two remaining Kyoto gases, perfluorocarbons (PFCs) and hydroflurocarbons (HFCs), are not reported since Company facilities do not emit or use materials containing them.

Financial risk management objectives/policies and hedging arrangements

          Please see Part I, Item 11 (Quantitative and Qualitative Disclosures About Market Risk) of the 2018 Form 20-F (as set out in the separate attachment to this U.K. Annual Report) for information on Ferroglobe's financial risk management objectives/policies and hedging arrangements. The separate attachment does not form part of these financial statements.

Post year-end events

          On or about 22 February 2019, the Company obtained the consent of its lenders to an amendment to the Revolving Credit Facility Agreement to afford the Company additional flexibility under its financial maintenance covenants in 2019 and beyond. The amendment suspends the existing covenant to maintain a maximum total net leverage ratio during an interim period beginning with the first quarter of 2019 through the first quarter of 2020 and provides a new covenant to maintain a maximum secured net leverage ratio and a new covenant to maintain a minimum cash liquidity level. The new covenants will be in effect only during the interim period, after which the existing covenant to maintain a maximum total net leverage ratio will be reinstated. The amendment also reduced the aggregate commitments under the RCF from $250 million to $200 million.

          On 13 and 14 May 2019, respectively, Messrs. Javier Monzón and Pierre Vareille resigned from the Board. On 16 May 2019 the Company announced that its Chief Financial Officer, Phillip Murnane, would be leaving the Company on 29 July 2019.

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          On 2 June 2019 the Company entered into an agreement with Kehlen Industries Management, S.L., a wholly-owned subsidiary of TSSP Adjacent Opportunities Partners, L.P., for the sale of the entire share capital of FerroAtlántica, S.A.U ("FAT"), the owner and operator of the Group's hydropower assets in Galicia and its smelting facility at CEE Dumbria, for consideration of circa €170m (subject to adjustment) payable on closing. Completion of the divestiture is conditional on competition clearance from the Spanish anti-trust authorities and administrative authorization of the regional government to early termination of the finance lease of the hydro plants, among other things, and is expected to take place in the third quarter of 2019. Under the terms of the transaction, the Group will become exclusive off-taker of finished products produced at the smelting plant at Cee Dumbria and supplier of key raw materials to that facility pursuant to a tolling agreement expiring in 2060. All assets of FAT unrelated to the hydro assets or the smelting facility will be transferred out of FAT to other subsidiaries in the Group prior to completion.

Future developments

          As part of its strategy to serve customers better, the Group develops new products or new specifications on a continuous basis. As a consequence of these efforts, investments have been made in facilities that allow the production of new products, such as higher-grade silicon metal, solar grade silicon metal, electrodes for use in silicon metals furnaces, or new foundry products. Please see the details of the Elsa electrode, solar grade silicon and high-value powders projects at Part I, Item 4, Information on the Company of the 2018 Form 20-F as examples of the ways in which the Group has developed proprietary technologies and has pursued innovation in the development of new products.

          The Group is continually pursuing growth opportunities by the acquisition of industrial facilities or companies that operate in the same sector and products and which are deemed to be potentially valuable for the Group.

Research and development

          Please refer to Part I, Item 4, Information on the Company of the 2018 Form 20-F (as set out in the separate attachment to this U.K. Annual Report) for information on Ferroglobe's research and development activities and opportunities.

Overseas branches

          The Company has no overseas branches.

Share capital structure and change of control provisions

          The Company's share capital comprises ordinary shares of $0.01 each, all of which bear the same rights and obligations. The Company's issued share capital at 31 December 2018 is set out at Note 13 to the Consolidated Financial Statements.

          The rights attaching to the Ordinary Shares are set out in the Articles, a copy of which can be obtained from the Company Secretary on request. Each Ordinary Share has one vote attaching to it for voting purposes and all holders of Ordinary Shares are entitled to receive notice of and attend and vote at the Company's general meetings. The Articles vest power in the directors to refuse to register transfers of Ordinary Shares in certain circumstances including where the instrument of transfer is not stamped or is in favour of more than 4 transferees. There are also restrictions in the Articles affecting the terms of tender offers and any scheme of arrangement, consolidation, merger or business combination designed to protect minority shareholders while Grupo VM and its associates hold ten percent or more of the Ordinary Shares. The SHA contains restrictions on the transfer of shares by Grupo VM.

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Significant agreements affected by a takeover

          There are no agreements between the Group and any of its employees or any director of the Company that provide for compensation to be paid to the employee or director for termination of employment or for loss of office as a consequence of a takeover of the Company, other than provisions that would apply on any termination of employment.

          The Notes and the RCF are subject to provisions allowing the lenders to terminate the facilities and demand repayment following a change of control, including the requirement to offer redemption of the Notes at 101% in the event of a change of control. Grupo VM, the Company's principal shareholder, has pledged its holding to secure its obligations to its lenders. The Company may experience a change of control and be required to offer redemption of the Notes in accordance with their terms were this pledge to be enforced and more than 35% of the Ordinary Shares were acquired by a beneficial owner (or group acting together as beneficial owner) in circumstances where Group VM held a lesser percentage.

Going concern

          The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future, as discussed in Note 3.1 to the Financial Statements, and have therefore prepared the Financial Statements on a going concern basis.

Statement of disclosure to the Company's U.K. statutory auditor

          In accordance with section 418 of the Companies Act, each director at the date of this Directors' Report confirms that:

          This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act. Deloitte LLP has indicated its willingness to continue in office, and a resolution that it be re-appointed will be proposed at the 2019 AGM.

By order of the Board on 3 June 2019

Pedro Larrea Paguaga

Director

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The Board of Directors

          The biographies of the members of the Board standing for re-election at the 2019 AGM are below.

          Javier López Madrid has been Executive Chairman of the Company since 31 December 2016 and Chairman of the Nominations Committee since 1 January 2018. He was first appointed to the Board on 5 February 2015 and was the Company's Executive Vice-Chairman from 23 December 2015 until 31 December 2016.

          He has been Chief Executive Officer of Grupo VM, the Company's principal shareholder, since 2008, is a member of the World Economic Forum, Group of Fifty and a member of the board of several non profit organizations. He is the founder and largest shareholder of Financiera Siacapital and founded Tressis, Spain's largest independent private bank.

          Mr. López Madrid holds a Master in Law and Business from ICADE University.

          José María Alapont was appointed to the Board as a Non-Executive Director on 24 January 2018 and to the Audit and Compensation Committees on 16 May 2018. Mr. Alapont was appointed on 16 January 2019 as Senior Independent Director and Chairman of the Corporate Governance Committee.

          Mr. Alapont holds a number of other board appointments. He has been a member of the board of directors of Ashok Leyland and of its investment and technology committee since 2017 and a member of its nomination and remuneration committee since 2018. Mr Alapont has also been a board director of Navistar Inc. and a member of its finance committee since 2016 and Chair of its nomination and governance committee since 2018. He has been a member of the board of directors of Hinduja Investments and Project Services Ltd since 2016 and of Hinduja Automotive Ltd since 2014.

          Mr. Alapont was formerly President and Chief Executive Officer of Federal-Mogul Corporation, the automotive powertrain and safety components supplier, from March 2005 to 2012, Chairman of its board from 2005 to 2007 and board director from 2005 to 2013. Prior to that, he was Chief Executive and a board director of Fiat Iveco, S.p.A., a leading global manufacturer of commercial trucks, buses, defence and other specialized vehicles from 2003 to 2005. Prior to 2003, he held executive, vice presidential and presidential positions for more than 30 years at other leading global vehicle manufacturers and suppliers, such as Ford Motor Company, Delphi Corporation and Valeo S.A. His non-executive experience includes being member of the board of directors of the Manitowoc Company Inc. from 2016 to 2018 and a board director of Mentor Graphics Corp. from 2011 to 2012. He was a member of the Davos World Economic Forum from 2000 to 2011.

          Mr. Alapont holds an Industrial Engineering degree from the Technical School of Valencia and a Philology degree from the University of Valencia in Spain.

          Donald G. Barger, Jr, was appointed to the Board as a Non-Executive Director on 23 December 2015. He has served as the Chairman of the Compensation Committee and a member of the Nominations Committee since 1 January 2018. From 23 December 2015 to 31 December 2017, he was the Chair of the Nominating and Corporate Governance Committee and a member of the Compensation Committee.

          Mr. Barger was a member of the board of directors of Globe from December 2008 until the closing of the Business Combination and Chairman of Globe's audit and compensation committees. He had a successful 36-year business career in manufacturing and services companies, including as Vice President and Chief Financial Officer of YRC Worldwide Inc. (formerly Yellow Roadway Corporation) from 2000 to 2007 and as advisor to the CEO from 2007 until his retirement in 2008. He was Vice President and Chief Financial Officer of Hillenbrand Industries, a provider of services

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and products for the health care and funeral services industries, from 1998 to 2000. He was Vice President of Finance and Chief Financial Officer of Worthington Industries, Inc., a diversified steel processor, from 1993 to 1998 and a member of the board of directors of Gardner Denver, Inc. and a member of its audit committee for his entire 19-year tenure until the company's sale in July 2013, serving as chair of the audit committee for 17 of those years. He served on the board of directors of Quanex Building Products Corporation for sixteen years, retiring in February 2012. He served on its audit committee for 14 years and was its Chair for most of that time.

          Mr. Barger has a Bachelor of Science degree from the U.S. Naval Academy and an MBA from the University of Pennsylvania.

          Bruce L. Crockett was appointed to the Board as a Non-Executive Director on 23 December 2015. He has been a member of the Audit Committee from that date and has served on the Compensation Committee since 1 January 2018.

          Mr. Crockett holds a number of other board and governance roles. He has been Chairman of the Invesco Mutual Funds Group board of directors and a member of its audit, investment and governance committees, serving on the board since 1991, as Chair since 2003 and on the board of predecessor companies from 1978. Since 2013, he has been a member of the board of directors and, since 2014, Chair of the audit committee of ALPS Property & Casualty Insurance Company. He has been Chairman of, and a private investor in, Crockett Technologies Associates since 1996. He is a life trustee of the University of Rochester.

          Mr. Crockett was a member of the board of directors of Globe from April 2014 until the closing of the Business Combination, as well as a member of Globe's audit committee. He was formerly President and Chief Executive Officer of COMSAT Corporation from 1992 until 1996 and its President and Chief Operating Officer from 1991 to 1992, holding a number of other operational and financial positions at COMSAT from 1980, including that of Vice President and Chief Financial Officer. He was a member of the board of directors of Ace Limited from 1995 until 2012 and of Captaris, Inc. from 2001 until its acquisition in 2008 and its Chairman from 2003 to 2008.

          Mr. Crockett holds an A.B. degree from the University of Rochester, B.S. degree from the University of Maryland, an MBA from Columbia University and an Honorary Doctor of Law degree from the University of Maryland.

          Stuart E. Eizenstat was appointed to the Board as a Non-Executive Director on 23 December 2015. He has been a member of the Company's Corporate Governance Committee since 1 January 2018 and was appointed to the Nominations Committee on 16 May 2018.

          Mr. Eizenstat is Senior Counsel at Covington & Burling LLP in Washington, D.C. and co-heads its international practice since 2001. He has served as a member of the advisory boards of GML Ltd. since 2003 and of the Office of Cherifien de Phosphates since 2010. He was a trustee of BlackRock Funds from 2001 until 2018.

          Mr. Eizenstat was a member of board of directors of Globe from 2008 until the closing of the Business Combination and Chair of its nominating committee. He was a member of the board of directors of Alcatel-Lucent from 2008 to 2016 and of United Parcel Service from 2005 to 2015. He has had an illustrious political, legal and advisory career, including serving in the Obama administration as Special Adviser to Secretary of State, Hillary Clinton, and Secretary of State, John Kerry, on Holocaust-Era Issues from 2009 to 2017 and Special Representative of the President and Secretary of State on Holocaust Issues during the Clinton administration from 1993 to 2001. He was Deputy Secretary of the United States Department of the Treasury from July 1999 to January 2001, Under Secretary of State for Economic, Business and Agricultural Affairs from 1997 to 1999, Under Secretary of Commerce for International Trade from 1996 to 1997, U.S. Ambassador to the European Union from 1993 to 1996 and Chief Domestic Policy Advisor in the White House to

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President Carter from 1977 to 1981. He is the author of "Imperfect Justice: Looted Assets, Slave Labor, and the Unfinished Business of World War II"; "The Future of the Jews: How Global Forces are Impacting the Jewish People, Israel, and its Relationship with the United States" and "President Carter: The White House Years". He has published articles on economic, trade, and foreign policy issues for a wide-range of publications, including, among many others, The New York Times, Washington Post, Financial Times, Foreign Affairs Magazine, Foreign Policy Magazine, The Hill and Politico.

          Mr. Eizenstat holds a B.A. in Political Science, cum laude and Phi Beta Kappa, from the University of North Carolina at Chapel Hill, a J.D. from Harvard Law School and nine honorary doctorate degrees and awards from the United States, French, German, Austrian, Belgian and Israeli governments.

          Manuel Garrido y Ruano was appointed to the Board as a Non-Executive Director on 30 May 2017. He was a member of the Nominating and Corporate Governance Committee from 30 May 2017 until 31 December 2017, when he was appointed to the Corporate Governance Committee.

          Mr. Garrido y Ruano has been Chief Financial Officer of Grupo VM since 2003 and a member of the board or on the steering committee of a number of its subsidiaries in the energy, financial, construction and real estate sectors. He is Professor of Communication and Leadership of the Graduate Management Program at CUNEF in Spain. Mr. Garrido y Ruano was a member of the steering committee of FerroAtlántica until 2015, having previously served as its Chief Financial Officer from 1996 to 2003. He worked with McKinsey & Company from 1991 to 1996, specializing in restructuring, business development and turnaround and cost efficiency projects globally.

          Mr. Garrido y Ruano holds a Masters in Civil Engineering with honors from the Universidad Politecnica de Madrid and an MBA from INSEAD.

          Greger Hamilton was appointed to the Board as a Non-Executive Director on 23 December 2015. He was a member of the Compensation Committee from that date until 31 December 2017. He has been Chairman of the Audit Committee since 23 December 2015 and a member of the Corporate Governance Committee since 1 January 2018.

          Mr. Hamilton has been Managing Partner of Ovington Financial Partners Ltd since 2009. He is cofounder of the BrainHealth Club and has been a member of its board of directors since 2016. From 2009 to 2014, Mr. Hamilton was a partner at European Resolution Capital Partners, where he assisted in the restructuring of international banks in 16 countries and managing director at Goldman Sachs International from 1997 to 2008. He began his career at McKinsey and Company, where he worked from 1990 to 1997.

          Mr. Hamilton holds a B.A. in Business Economics and International Commerce from Brown University.

          Pedro Larrea Paguaga has been Chief Executive Officer of the Company since 23 December 2015 and a member of the Board since 28 June 2017.

          Mr. Larrea was Chairman of FerroAtlántica from 2012 to 2015, and Chief Executive Officer of FerroAtlántica from 2011 to 2015. From 1996 to 2009, he held various executive roles at Endesa, the biggest power company in Spain and Latin America, including as Chairman and CEO of Endesa Latinoamérica. He was a board director of Enersis from 2007 to 2009 and of Endesa Chile from 1999 to 2002 and from 2006 to 2007, both being Chilean companies listed on the NYSE. In 2010 and 2011, he held management consulting roles with PwC, where he led the energy sector practice in Spain, and from 1989 to 1995 he worked for McKinsey & Company in Spain, Latin America and the United States.

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          Mr. Larrea holds a Mining Engineering degree (MSc equivalent) from Universidad Politécnica de Madrid, from where he graduated with honors and an MBA from INSEAD, where he was awarded the Henry Ford II award for academic excellence.

          Juan Villar-Mir de Fuentes was appointed to the Board as a Non-Executive Director on 23 December 2015.

          Mr. Villar-Mir de Fuentes has been Vice Chairman of Inmobiliaria Espacio, S.A since 1996 and Vice Chairman of Grupo VM since 1999. He has been a member of the board of directors of Obrascon Huarte Lain, S.A. since 1996, a member of the audit committee and, later, its compensation committee and its Chairman since 2016. He was a board director and member of the compensation committee of Inmobiliaria Colonial, S.A from June 2014 to May 2017. He also was a member of the board of directors and of the compensation committee of Abertis Infraestructuras, S.A. between 2013 and 2016.

          Mr. Villar-Mir de Fuentes is Patron and member of the Patronage Council of Fundación Nantik Lum and Fundación Princesa de Gerona

          Mr. Villar-Mir holds a Bachelor's Degree in Business Administration and Economics and Business Management.

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Directors' responsibilities

          The directors are responsible for preparing the Company's annual reports and financial statements in accordance with applicable law and regulations.

          Company law requires the directors to prepare financial statements for each financial period. Under that law the directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards ("IFRSs") as issued by the International Accounting Standards Board ("IASB") and have elected to prepare the parent company financial statements in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period. In preparing these financial statements, International Accounting Standard 1 requires that directors:

          The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements and the directors' remuneration report comply with the Companies Act. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

          The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website.

          Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' responsibility statement

          To the best of each directors' knowledge:

The responsibility statement was approved by the Board and signed on its behalf.

By order of the Board on 3 June 2019.

PEDRO LARREA PAGUAGA

Director

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Directors' Remuneration Report

Dear Shareholder

          As Chairman of the Compensation Committee (the "Committee"), and on behalf of the Board, I present the directors' remuneration report for the period ended 31 December 2018.

          This report sets out both the Company's annual report on remuneration (the "ARR") for 2018 and the directors' remuneration policy to be put to shareholders at the 2019 AGM (the "2019 Policy"). The ARR will be subject to an advisory vote and the 2019 Policy will be subject to a binding vote at the forthcoming Annual General Meeting in June. If approved, the 2019 Policy will come into immediate effect. The section in this report on remuneration in 2019 details proposed implementation of the 2019 Policy in the current year, assuming it is approved. As changes to the current Policy are limited, there are few aspects which will require revision if it is not approved. We hope to have your support for the 2019 Policy.

Policy Review

          The Company approved the current Policy in June 2016. Under English law, such policies require shareholder approval not less than once in every three years and the review of the Policy approved in 2016 was a major priority of the Committee in 2018. We considered a number of different remuneration approaches, reviewing potential alternatives to achieve our remuneration aims and promote the long-term success of the Company. As market conditions began to deteriorate in the second half of 2018, we concluded that, subject to some minor changes, the current structure would best serve to balance performance and reward and our 2019 Policy is largely unchanged from that approved in 2016. The 2019 Policy is the next item in this report after this statement.

Annual Bonus awards for 2018

          The annual bonus objectives for the Executives in 2018 included financial objectives applicable to 75% of the award, determined by reference to the Group's Adjusted EBITDA, Net Income and Free cash-flow. The remaining 25% was split among personal objectives, which for Javier López Madrid and Pedro Larrea Paguaga included aggressive growth planning and financial and dividend structuring, among others. The bonuses were also subject to an underpin requiring measurable improvement in the Group's health and safety record in 2018.

          Threshold performance was not achieved in respect of the financial objectives for 2018. The Executives were also dissatisfied with the Group's performance on health and safety notwithstanding improvements made in the year. The Executive Directors therefore put it to the Committee that, given the performance of the Company in respect of the chosen financial metrics and on health and safety, no annual bonus be paid to them for 2018. In the circumstances, the Committee agreed to this proposal. See the ARR for more on the 2018 annual bonus outturn.

LTIPs in 2018

          Save for legacy awards to former employees and directors of Globe detailed in the ARR, no long-term incentive awards (LTIPs) were scheduled to vest in 2018. Awards granted to our Executive Directors in 2016 under the EIP came to the end of their performance period on 31 December 2018. In the normal course, these awards will vest in November 2019 and the Committee has assessed their performance at 35.74% of target.

          In March 2018, awards were granted under the EIP to Javier López Madrid and to Pedro Larrea Paguaga, with target vesting at 230% and 200% of base salary respectively, and subject to performance conditions which are unchanged from 2017 and which the Committee considers

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stretching. The Committee reviewed the make-up of the comparator group in 2018 and several companies were removed as they had delisted or merged. See the ARR for more information.

Looking forward to 2019

          Given the headwinds experienced latterly in 2018 and, as we anticipate continued market challenges in early 2019, there have been no increases in Executive Directors' salaries in 2018 or 2019 to date and the additional ex pat allowance put in place in 2016 came to an end at the beginning of the current year, without renewal.

          Target annual bonus opportunity remained at 100% of salary for both Executive Directors, with a maximum opportunity of twice target. For 2019, financial metrics key to the Company's success and aligning the Executives' interests with those of shareholders make up 100% of the total bonus opportunity. Reflecting the focus on cash generation, the financial measures chosen are Free cash-flow and Adjusted EBITDA. In addition, the bonus is subject to a further financial performance condition which has the potential to reduce bonuses to zero if not met and an underpin for both Executives based on the Company's performance on health and safety.

          LTIPs granted to the Executives in early 2019 were discounted by 50% from their 'normal' target levels. This was an exceptional adjustment made in light of the significant fall in the Company's share price in 2018. There is also a cap on the number of shares which may vest under these LTIPs at eight times the number of shares awarded, to mitigate the risk of an unjustified gain arising solely from share price appreciation.

Non-Executives and their remuneration

          2018 was my first year as the Chairman of Ferroglobe's Compensation Committee, having served as a member of the Committee since 2015 and, before that, as Chairman of the Compensation Committee of Globe Specialty Metals, Inc. In January 2018, José María Alapont joined the Board and in May 2018 we were delighted to welcome him as a member of the Committee. His wealth of experience across industries and markets has been invaluable.

          The Committee reviewed the structure of NED fees as part of its overall review of the Policy. In light of market conditions, the Committee decided not to recommend any changes to the level or principles underlying NED fees. Save where a Non-Executive Director takes on additional responsibilities (as José María Alapont has done in joining the Committee), fees are unchanged in 2018 and 2019.

          I would like to thank you, our shareholders, for your support. I hope that you will continue to be supportive of the implementation of the current Policy in 2018 and of the 2019 Policy at the 2019 AGM.

Signed on behalf of the Board.

Donald G. Barger, Jr

Chairman of the Compensation Committee

3 June 2019

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          This directors' remuneration report has been prepared in accordance with the provisions of the Companies Act and The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 (the "Regulations").

          The Policy in effect as at the date of this report (the "2016 Policy") was approved at the 2016 Annual General Meeting. A copy of it can be found in the Report and Financial Statements for the period ended 31 December 2016 and on the Company's website.

          As outlined in the Statement of the Chairman of the Committee in this report, the Committee reviewed the 2016 Policy in 2018 and proposes a limited number of changes and clarifications to it to ensure that it continues to meet the overall aims of the Company's remuneration strategy and supports the Company's strategic and operational goals. Shareholder approval of the revised policy set out below (the "2019 Policy") will be sought at the 2019 AGM. Subject to shareholder approval, the 2019 Policy will take effect from the date of the 2019 AGM.

          The key changes which the 2019 Policy proposes to the 2016 Policy are:

The 2019 Policy

          The following sections on pages 25 to 42 set out the directors' remuneration policy that the Company intends to apply subject to shareholder approval with effect from 28 June 2019. All statements of policy and practice are made on the assumption that the 2019 Policy is approved.

Aim of the 2019 Policy

          The overall aim of the Policy is to provide appropriate incentives that reflect the Company's high-performance culture and values to maximise returns for shareholders.

          In summary, our aim as regards Executive Directors is to provide remuneration which:

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          There are no material differences in the 2019 Policy for Executive Directors compared to that of senior management other than in terms of quantum and levels of participation in incentive plans reflecting the higher weighting to variable pay and ability to influence performance outcomes. For the wider employee population, the Company aims to provide remuneration structures and levels that reflect market norms for the location at which they are based.

Operation of the Policy

          Throughout the Policy, reference is made to the authority, powers and discretions vested in the Committee. It is the Committee's practice that, in relation to (i) any significant decision in relation to the compensation of the Company's Executive Directors or the second tier of executive management below them; or (ii) any significant decision on the compensation of the Non-Executive Directors, the Committee makes recommendations to the Board which determines the final decision of the Company on such matters.

          The following table summarizes the 2019 Policy as proposed to be applied to Executive Director remuneration:

Components of remuneration for Executive Directors

Element

  Purpose and link
to strategy
  Operation and maximum
opportunity
  Performance
framework and recovery

Salary

  A fixed salary commensurate with the individual's role, responsibilities and experience, having regard to broader market rates.   Reviewed annually, taking account of Group performance, individual performance, changes in responsibility, levels of increase for the broader employee population and market salary levels.   Not applicable.

Pension and retirement benefits

 

Attraction and retention of top talent; providing mechanism for the accumulation of retirement benefits.

 

Executive Directors may be paid a cash allowance in lieu of pension.

The maximum cash allowance is 20% of base salary. This includes contributions to the U.S. tax-qualified defined contribution 401(k) plan.

 

Not applicable.

Benefits

 

Attraction and retention of top talent.

 

Benefits may include but are not limited to medical cover, life assurance and income protection insurance.

 

Not applicable.

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Element

  Purpose and link
to strategy
  Operation and maximum
opportunity
  Performance
framework and recovery

     

Relocation allowances may take into account a housing allowance, school fees, adviser fees for assistance with tax affairs and an expatriate allowance to cover additional expenditure incurred as a result of the relocation. Payment of such relocation allowances will be reviewed by the Committee on an annual basis.

   

     

Benefits may include tax equalization provisions applicable if an Executive moves between jurisdictions with differing tax regimes at the Company's request. If the Executive moves to an area of higher taxation, the Company may agree to make an annual or other regular payment in cash to compensate him or her for any additional tax burden. Where the Executive moves to a jurisdiction where his or her effective tax burden is lower than that to which he or she was subject prior to such move, the Executive's compensation may be commensurately reduced to ensure that his or her net pay remains unaffected.

   

     

Benefits will be provided as the Committee deems necessary including to take into account perquisites or benefits received from a prior employer or as is customary in the country in which an executive resides or is relocated from.

   

     

Benefits provided by the Company are subject to market rates and therefore there is no prescribed monetary maximum. The Company and the Committee keep the cost of the benefits under review.

   

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Element

  Purpose and link
to strategy
  Operation and maximum
opportunity
  Performance
framework and recovery

     

The Company provides all Executive Directors with directors' and officers' liability insurance and will provide an indemnity to the fullest extent permitted by the Companies Act.

   

Annual and other bonuses

 

Short-term performance-based incentive to reward achievement of annual performance objectives.

 

The annual bonus plan and all payments and awards under it are at the discretion of the Committee. Subject as aforesaid, the Committee will determine an Executive Director's actual bonus amount, subject to the achievement of quantitative and qualitative performance criteria.

At least two-thirds of the bonus will be based on financial metrics with any balance based on non-financial metrics.

The maximum annual bonus opportunity that may be awarded to an Executive Director is normally 200% of salary. If the Committee provides higher annual bonus opportunities in any year its rationale will be clearly explained in the Annual Report on Remuneration for the relevant year. In these and other exceptional circumstances the limit will be 500% of salary.

No more than 25% of the maximum annual bonus payable for each performance condition will be payable for threshold performance.

 

The Committee will select the most appropriate performance measures for the annual bonus for each performance period and will set appropriately demanding targets.

Normally any bonus earned in excess of the target amount will be deferred for three years into shares in the Company. The Executive Director may be granted an additional long-term incentive award as described below of equal value (at maximum) to the amount of annual bonus deferred.

Recovery and recoupment will apply to all bonus awards for misstatement, error or gross misconduct.

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Element

  Purpose and link
to strategy
  Operation and maximum
opportunity
  Performance
framework and recovery

     

In addition or in place of an annual bonus, the Company may pay a retention bonus where it considers it necessary to retain key Executives in situations where the relevant Executive would otherwise leave the Company and his or her retention is critical to the Company's performance and/or the achievement of strategic goals or key projects. The grant, terms and payment of any retention bonus are at the discretion of the Committee.

   

     

A retention bonus may be payable in cash or in shares and subject to such conditions as the Committee sees fit, including the Executive remaining with the Company for a defined period of time and/or meeting set performance criteria. The Committee would normally count any retention bonus awarded towards the 500% of salary limit.

   

Long-term incentive awards

 

Focus Executive Directors' efforts on sustainable strong long-term performance of the Company as a whole, and to aid in retention with multi-year vesting provision. Improves alignment of Executive Directors' interests with those of the Company and shareholders.

 

Executive Directors are eligible for awards to be granted as decided by the Committee under the Company's long-term incentive plan. All awards are subject to performance targets as determined by the Committee for each grant, performance against which is normally measured over a three-year period. Awards usually vest three years from the date of their grant.

 

The Committee will select the most appropriate performance measures for long-term incentive awards for each performance period and will set appropriately demanding targets.

Recovery and recoupment will apply to all long-term incentive awards for misstatement, error or gross misconduct.

     

The annual target award limit will not normally be higher than 300% of salary (based on the face value of shares at date of grant).

   

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Element

  Purpose and link
to strategy
  Operation and maximum
opportunity
  Performance
framework and recovery

     

Maximum vesting is normally 200% of target (based on the face value of shares at date of grant).

   

     

There is an exceptional annual target award limit in recruitment, appointment and retention situations of 500% of salary.

   

Share ownership guidelines

 

Increases alignment between the Executive Directors and shareholders.

 

Executive Directors are strongly encouraged to hold a percentage of their salary in shares. This holding guideline could be achieved through the retention of shares on vesting/exercise of share awards and may also (but is not required to) be through the direct purchase of shares by the Executive Directors.

 

Not applicable.

Performance Criteria and Discretions

Selection of Criteria

          The Committee annually assesses at the beginning of the relevant performance period which corporate performance measures, or combination and weighting of performance measures, are most appropriate for both annual bonus and long-term incentive awards to reflect the Company's strategic initiatives for the performance period. The Committee has the discretion to change the performance measures for awards granted in future years based upon the strategic plans of the Company. The Committee sets demanding targets for variable pay in the context of the Company's trading environment and strategic objectives and taking into account the Company's internal financial planning and market forecasts. Any non-financial goals will be well defined and measurable.

Discretions retained by the Committee in operating its incentive plans

          The Committee operates the Group's various plans according to their respective rules. In administering these plans, the Committee may apply certain operational discretions. These include the following:

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          The Committee, acting fairly and reasonably, and after consulting plan participants, may adjust the targets and/or set different measures and alter weightings for the variable pay awards already granted (in a way that the alterations are intended to create an equivalent outcome for plan participants) only if (i) an unexpected event (whether a corporate or outside event) occurs which causes the Committee to reasonably consider that the performance conditions would not achieve their original purpose without alteration and (ii) the varied conditions are materially no more or less difficult to satisfy than the original conditions. Any changes and the rationale for those changes will be set out clearly in the Annual Report on Remuneration in respect of the year in which they are made.

Remuneration scenarios for the Executive Directors

          The charts below show the level of remuneration potentially payable to each of Javier López Madrid as Executive Chairman and Pedro Larrea Paguaga as CEO under different performance scenarios for the 2019 financial year and assuming that the 2019 Policy is approved:

          In respect of the remuneration of the Executive Chairman:

GRAPHIC

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          In respect of the remuneration of the CEO:

GRAPHIC

Assumptions

1.
Fixed pay comprises base salary for 2019, benefits at an estimated level (3.4% of base salary in the case of Javier López Madrid and 5.9% of base salary in the case of Pedro Larrea Paguaga), expatriate allowance of 20% of base salary and a pension contribution of 20% of base salary.

2.
On-target performance comprises fixed pay plus annual bonus of 100% of base salary and long-term incentives of 230% of base salary for the Executive Chairman and 200% for the CEO.

3.
Maximum performance comprises fixed pay plus annual bonus of 200% of target and long-term incentives of 200% of target.

4.
Maximum performance plus share price growth comprises the maximum performance scenario described above plus an assumed 50% share price growth over the performance period of the LTIP.

5.
As described in the Policy, an additional long-term incentive award may be granted if part of the annual bonus is deferred, with the maximum value of such award equal to the amount of bonus deferred. As at 31 December 2018 no such awards have been made to the Executive Directors and none is to be made in respect of 2018.

6.
The exchange rate used in these charts and throughout this report, save where stated otherwise, is the Group's average GBP: USD exchange rate for the year to 31 December 2018 of GBP1=USD1.3356.

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Approach to Recruitment Remuneration

          Subject to its approval by shareholders, the Committee expects any new Executive Directors to be engaged on terms that are consistent with the 2019 Policy as set out above.

          The Committee recognises that it cannot always predict accurately the circumstances in which any new directors may be recruited. The Committee may determine that it is in the interests of the Company and shareholders to secure the services of a particular individual which may require the Committee to take account of the terms of that individual's existing employment and/or their personal circumstances. Examples of circumstances in which the Committee expects it might need to do this are:

          In making any decision on any aspect of the remuneration package for a new recruit, the Committee would balance shareholder expectations, current best practice and the requirements of any new recruit and would strive not to pay more than is necessary to achieve the recruitment. The Committee would give full details of the terms of the package of any new recruit in the next remuneration report. Award levels under the Company's variable incentive plans would not exceed those set out in the policy table, but their proportions can be altered for the first three years of employment.

Executive Directors' Service Contracts and Policy on Cessation

          In order to motivate and retain the Executive Directors and other senior executives, most of whose backgrounds are in the United States and Europe, the Committee has taken account of market practices in those countries in formulating the 2019 Policy proposed to shareholders, including (a) determining the treatment of annual and retention bonuses and long-term incentive awards in case of termination of their employment by the Company without cause, (b) referencing past annual bonuses in calculating the amount of payment in lieu of notice, (c) determining the extent of vesting of long-term incentive awards in the event of a takeover or change of control and (d) determining that all long-term incentive awards granted to an executive in any financial year will be subject to achievement of performance targets.

Service contracts

          Subject to the Approach to Recruitment Remuneration above, all Executive Directors have rolling service contracts for an indefinite term but a fixed period of notice of termination which would normally be 12 months. With respect to newly appointed directors, the Committee may, if it

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considers it necessary, agree a notice period in excess of 12 months (but not exceeding 24 months), provided it reduces to 12 months within a specified transition period of not exceeding 36 months. The service contracts for Javier López Madrid and Pedro Larrea Paguaga are in accordance with this policy.

          An Executive Director's service contract may be terminated without notice and without further payment or compensation, except for sums accrued to the date of termination, for cause (as defined in the service contract). In other circumstances, the Company may terminate employment with immediate effect and make a payment in lieu of notice in the amount equivalent to the aggregate of (i) base salary, (ii) the average of annual bonuses in the last three years prior to termination, (iii) pension allowance plus (iv) cost of benefits, for the notice period (or if a notice has been served, for the unserved notice period). An Executive Director would be entitled to an equivalent payment in the event of his resignation for good reason (as defined in the service contract). Similar provisions may apply in the event that an Executive Director leaves following a change of control of the Company but no additional entitlements would be expected to be set out in the Executive Director's service contract beyond those described above. An Executive Director may also be entitled to certain amounts with respect to annual or retention bonuses and long-term incentive awards, as described below. "Cause" and "good reason" as defined in the service contract also apply in relation to annual bonus awards and long-term incentive awards as described below. Executive Directors' service contracts (or a memorandum of the terms where the contract is unwritten) are available for inspection at the Group's office at 2nd Floor West, Lansdowne House, 57 Berkeley Square, London, W1J 6ER during normal business hours and at the Annual General Meeting.

Generally

          As circumstances may require, the Committee may approve compensation payments in consideration of statutory entitlements, for a release of claims, enhanced post-termination restrictive covenants or transitional assistance, such as outplacement services and payment of legal fees in connection with termination, the costs of short term accommodation or leasing arrangements, home relocation expenses including tax related expenses and other ancillary payments thereto.

Annual bonus awards (including retention awards)

          In the event that an Executive Director's employment is terminated without cause, by resignation by the Executive Director for good reason, or by reason of death, injury, disability or his employing company or the business for which he works being sold out of the Group, the Company will pay an annual bonus amount in respect of the financial year in which termination occurs subject to performance conditions being met at the end of the period and with pro-rating of the award determined on the basis of the period of time served in employment during the normal vesting period but with the Committee retaining the discretion in exceptional circumstances to increase the level of vesting within the maximum annual bonus amount as determined by the performance conditions. The Committee may, if it considers it appropriate in exceptional circumstances, measure performance to the date of cessation. In other circumstances, payment will be at the Committee's discretion. The Committee will consider the period of the year worked and the performance of the Executive Director during that period when considering how to exercise its discretion.

          The terms of any retention bonus agreed to be paid to an Executive Director may provide for such bonus to be payable on that Executive Director's employment being terminated without cause, by resignation by the Executive Director for good reason, or by reason of death, injury, disability or his employing company or the business for which he works being sold out of the Group. In any such case, the retention bonus will become payable in such circumstances.

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Long-term incentive awards

          As a general rule, any unvested long-term incentive award (except deferred bonus awards see below) will lapse upon an Executive Director ceasing to be an employee or director in the case of voluntary resignation or dismissal for cause. However, if the cessation is without cause, by resignation by the Executive Director for good reason, or because of his death, injury, disability or his employing company or the business for which he works being sold out of the Group or in other circumstances at the discretion of the Committee, then the award will normally vest in full on the date when it would have ordinarily vested subject to the performance conditions being met. Where an award vests at the discretion of the Committee that award may be pro-rated taking into account the period of time served in employment during the normal vesting period of the award. The Committee can for any cessation measure performance up to the date of cessation and permit awards to vest early.

          Deferred bonus awards vest in full upon cessation, other than in case of voluntary resignation by an Executive Director without good reason or dismissal for cause. Vested but unexercised awards held on cessation will remain capable of exercise for a limited period save in the case of dismissal for cause.

          In the event of a takeover all awards will vest early to the extent that the performance conditions are determined as satisfied at that time on such basis as the Committee considers appropriate.

External appointments

          Executive Directors may retain fees paid for external director appointments. These appointments are subject to approval by the Board and must be compatible with their duties as Executive Directors.

Matters taken into consideration in determining policy and differences in the remuneration policy of the Executive Directors and employees

          It is not the Committee's practice to consult with employees on matters relating to executive pay. However, the Committee will consider pay structures, practices and principles across the Group on a regular basis and take these into account in any review of the Executive Directors' current Policy or implementation thereof.

          The Committee will consider feedback from shareholders and take into account the results of both advisory and binding votes concerning executive pay at the Annual General Meeting as well as ensuring it engages with shareholders on executive pay matters. The 2019 Policy has been formulated taking into account the Company's understanding of current shareholder views on the Company's remuneration policy and practices.

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Directors' Remuneration Policy for Non-Executive Directors

          The following table summarizes the 2019 Policy as proposed to be applied to Non-Executive Director remuneration, subject to its approval:

Element

  Purpose and link
to strategy
  Operation and maximum
opportunity
  Performance framework
and recovery

Non-Executive Directors fees including non-executive chairman

  To appropriately remunerate the Non-Executive Directors   The Non-Executive Directors are paid a basic fee. Supplemental fees may be paid for additional responsibilities and activities, such as for the committee chairmen and other members of the main Board committees (e.g. audit, compensation, nominations and corporate governance) and the Senior Independent Director, to reflect the additional responsibilities as well as travel fees to reflect additional time incurred in travelling to meetings.   Not applicable

     

These fee levels are reviewed periodically, with reference to time commitment, knowledge, experience and responsibilities of the role as well as market levels in comparable companies both in terms of size and sector.

   

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Element

  Purpose and link
to strategy
  Operation and maximum
opportunity
  Performance framework
and recovery

     

The Company does not currently have a non-executive Chairman. If one were appointed his fee would be set at a level with reference to time commitment, knowledge, experience and responsibilities of the role as well as market levels in comparable companies both in terms of size and sector.

   

     

There is no maximum fee level or prescribed annual increase.

   

Payment of expenses and benefits

 

To support the Non-Executive Directors in the fulfilment of their duties

 

Reasonable expenses incurred by the Non-Executive Directors in carrying out their duties may be reimbursed by the Company including any personal tax payable by the Non-Executive Directive as a result of reimbursement of those expenses. The Company may also pay an allowance in lieu of expenses and may arrange and pay for the provision of advice or assistance in relation to personal taxes for which the Non-Executive Director may be liable in connection with his or her appointment to the Board, if it deems this appropriate.

 

Not applicable

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Element

  Purpose and link
to strategy
  Operation and maximum
opportunity
  Performance framework
and recovery

     

The Company provides Non-Executive Directors with directors' and officers' liability insurance and an indemnity to the fullest extent permitted by the Companies Act.

   

Legacy Arrangements with Certain Non-Executive Directors

          Prior to the Business Combination, in keeping with many other NASDAQ listed companies, Globe granted restricted stock units and share appreciation rights to its non-executive directors. Outstanding awards as at 31 December 2018 held by the Non-Executive Directors, who were previously Globe's non-executive directors, are set out in the ARR.

          It is noted that those Non-Executive Directors with restricted stock units and share appreciation rights may be regarded as not being independent by U.K. based proxy voting agencies although the Board considers them to be fully independent. It is a provision of this Policy that the Company may accelerate the vesting of or repurchase of these awards based on an independent valuation, if it deems it to be appropriate.

Letters of Appointment with Non-Executive Directors

          The Company does not enter into service contracts with its Non-Executive Directors, rather the Company enters into letters of appointment for a rolling period of 12 months with each annual renewal being subject to re-election at each annual general meeting of the Company. No compensation for loss of office is payable in the event a Non-Executive Director is not re-elected. The Company may request that Non-Executive Directors resign with immediate effect in certain circumstances (including material breach of their obligations) in which case their appointment would terminate without compensation to the Non-Executive Director for such termination but with accrued fees and expenses payable up to the date of termination.

Appointment of non-executive directors

          For the appointment of a non-executive chairman or other Non-Executive Directors, the fee arrangement would be in accordance with the approved Directors' Remuneration Policy in place at that time.

Minor amendments

          The Committee may make minor changes to the Policy, which do not have a material advantage or disadvantage overall to directors, to aid in its operation or implementation (including to take account of any change in legislative or regulatory requirements applicable to the Company) without seeking shareholder approval for a revised version of the Policy.

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Annual Report on Remuneration

Implementation of the Directors' Remuneration Policy for the year ending 31 December 2019

          This section sets out how the Committee intends to implement the Policy for the year ending 31 December 2019, subject to the approval of the 2019 Policy at the 2019 AGM, where appropriate.

Base salary

          Javier López Madrid was appointed as Executive Chairman with effect from 31 December 2016. Javier López Madrid's base salary was reviewed on his appointment and remains unchanged at £555,000 ($741,258) per annum.

          Pedro Larrea Paguaga was appointed as Chief Executive Officer with effect from 23 December 2015 and to the Board of Directors on 28 June 2017. Pedro Larrea Paguaga's base salary has remained unchanged since the date of his appointment as CEO at £475,000 ($634,410) per annum.

Pension and benefits

          In accordance with the Policy, both Executive Directors receive a pension contribution at the rate of 20% of base salary, payable as a cash allowance, benefits to the value of approximately 4% of salary for the Executive Chairman and 6% for the CEO and an expatriate benefits allowance. This expatriate benefits allowance will usually be equal to 20% of base salary. Executive Directors were entitled to an exceptional additional expatriate allowance of a further 20% of base salary for a period of up to three years until 1 January 2019: from appointment as an Executive Director, in the case of Javier López Madrid: and from appointment as CEO, in the case of Pedro Larrea Paguaga. This exceptional allowance recognized the particular circumstances of the relocation of the Ferroglobe business in this period of transition and ceased to be paid from 1 January 2019. Expatriate allowances are reviewed by the Committee on an annual basis.

          The Company provides directors' and officers' liability insurance and will provide an indemnity to the fullest extent permitted by the Companies Act.

Annual bonuses

          The target annual bonus opportunity for the Executive Directors will be 100% of base salary with a maximum opportunity of twice the target level.

          The performance measures for the annual bonus in 2019 will be based as to one-third on achieving a set level of Adjusted EBITDA and as to two-thirds on achieving Free cash-flow targets. The annual bonus targets are considered to be commercially sensitive and are not disclosed at this time. It is the Committee's intention to disclose the threshold, target and stretch figures for each of these measures in next year's report. The 2019 annual bonus outcome is also subject to an underpin based on improvement in the Group's health and safety performance whereby the overall amount payable will be reduced by 20% should certain key metrics be missed and a underpin under the terms of which no annual bonus may be payable if the Company fails to meet certain criteria related to its financial performance or condition.

          Any bonus earned in excess of 100% of the target will be deferred for three years into shares in the Company.

Long-term incentives

          In recognition of the significant decline in the Company's share price in 2018, the Committee and Executive Directors agreed that long-term incentive awards in 2019 would be discounted on an exceptional basis by 50% from the level of target award normally granted to the Executive Directors.

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In respect of 2019, the Committee determined that the Executive Chairman would be granted a long-term incentive award with a target level of vesting of 115% of base salary and maximum vesting of twice target and the CEO would be granted a long-term incentive award with a target level of vesting of 100% of base salary and maximum vesting of twice target. To mitigate against the risk of an unjustified gain solely as a result of share price appreciation, it was agreed that a cap will apply on the number of shares which vest. This cap is set at eight times the target number of shares at the share price at grant (which is equivalent to full vesting of the normal awards with a doubling of the share price). On 13 March 2019, the following awards were granted:

  Type of
award(1)
  Basis of
award
(at target)(2)
    Share price
at grant(3)
    Number of
shares
at target
 

Javier López Madrid

  Nil-cost option   115% of salary of $728,715   $ 2.448     342,329  

Pedro Larrea Paguaga

  Nil-cost option   100% of salary of $623,675   $ 2.448     254,769  

Notes:

(1)
No price is normally payable on the exercise of the nil-cost option although the Company reserves the right to require the payment of the nominal cost of the shares as a condition of exercise if required to enable the issue or transfer of the shares.

(2)
Converted at GBP 1: USD 1.313 being the exchange rate on the day of grant.

(3)
This figure represents the average closing share price for the five days prior to the date of grant.

          Vesting of 60% of each award will be determined by Ferroglobe's Total Shareholder Return ("TSR") performance. 50% of the TSR part of the award is calculated relative to a bespoke group of peers, and the other 50% relative to the S&P Global 1200 Metals and Mining Index in line with last year's award. Performance will be measured over three years with vesting as set out below.

          The bespoke peer group comprises the following companies1:

Commercial Metals Company   Boliden
Allegheny Technologies, Inc.   Morgan Advanced Material
Materion Corporation   Minerals Technologies
Steel Dynamics   Kaiser Aluminium
Antofagasta plc   Vallourec
Schnitzer Steel Industries   Worthington Industries
Eramet   Salzgitter AG
    Norsk Hydro
    AMG Advanced Metallurgical Group

   


1
Carpenter Technologies and Vedanta Resources were included in the comparator group for awards in 2018 and prior years. As a result of complexities arising from their financial reporting arrangements, both companies were removed from the comparator group in 2019.

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Vesting schedule for TSR relative to the bespoke peer group

TSR Performance
  Vesting scale  

Less than median (50th percentile)

  No vesting of awards

Between the 50th and 75th percentile

  Proportionate vesting of between target (100%) and 150% of target

Between 75th percentile and 90th percentile

  Proportionate vesting of between 150% and 200% of target

90th percentile

  200% of target

Vesting schedule for TSR relative to the S&P Global 1200 Metals and Mining Index

TSR Performance
  Vesting scale  
Less than Index TSR   No vesting of awards
Equal to Index TSR   Target (100%)
Equal to Index TSR + 15 percentage points   150% of target
Equal to Index TSR + 25 percentage points   200% of target

          With straight line vesting between Index TSR and Index TSR +15 percentage points and between Index TSR+15 percentage points and Index TSR +25 percentage points.

          Vesting of 40% of each award is dependent upon the achievement of strategic measures with predetermined targets to be achieved creating a range between threshold, target and stretch that will determine the proportion of the award that will vest between 50% and 200% of the target amount. The measures relate to the Company's return on invested capital ("ROIC") over the three-year period as compared with the bespoke comparator group of the Company's peers set out above using a quarterly average for the calculation of Invested Capital and the Company's net operating profit after tax ("NOPAT") growth as compared to the same bespoke comparator group of the Company's peers. Performance is measured over three years with vesting as set out below.

ROIC over the performance period
  Vesting scale    

Below percentile 25

    0 %

Percentile 25

    50 %

Median

    100 %

Percentile 75 and above

    200 %

 

NOPAT growth over the Performance Period
  Vesting scale    

Below percentile 25

    0 %

Percentile 25

    50 %

Median

    100 %

Percentile 75 and above

    200 %

          No portion of the ROIC component will vest unless the Company's ROIC over the performance period is at least equal to the percentile 25 average ROIC for the members of the Comparator Group over the performance period. No portion of the NOPAT component will vest unless the ratio between the Company's NOPAT for the 12 month period ending 31 December 2021 against the Company's NOPAT for the 12 month period ending 31 December 2018 is at least equal to the Lower Quartile NOPAT growth ratio for the members of the Comparator Group over the same period. There is straight line vesting between each vesting point (percentile 25, median and percentile 75).

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Non-Executive Director share ownership guidelines

          The Non-Executive Directors have voluntarily agreed to apply on a cumulative basis at least a quarter of their normal annual gross fees to acquire Ordinary Shares under arrangements designed to ensure that Ordinary Shares can be purchased on a regular basis over a period of eight years. In 2018 the Directors reviewed the Non-Executive shareholding guidelines and agreed several points of clarification in relation to them, to take effect from 1 January 2018, as follows:

          The holdings for Executive and Non-Executive Directors as at 31 December 2018 are set out below.

Fees for the Non-Executive Directors

          The fee structure and levels were set following the Business Combination. Fees are set and payable in Pounds sterling and are reviewed — but not necessarily increased — annually, with changes normally effective from 1 January in each year. The fees for 2018 were as below and remain unchanged for 2019:

Non-Executive Director base fee

  £70,000 ($93,492)

Senior Independent Director

  £35,000 ($46,746)

Member of Audit Committee

  £17,500 ($23,373)

Member of Compensation Committee

  £15,500 ($20,702)

Member of Corporate Governance Committee

  £12,000 ($16,027)

Member of Nominations Committee

  £1,500 ($2,003) per meeting, subject to an annual cap of £10,000 ($13,356)(1)

Committee Chairman

  Two times membership fee

Travel fee (per meeting)

   

Intercontinental travel

  £3,500 ($4,675)

Continental travel

  £1,500 ($2,003)

Notes:

(1)
No fees are payable to the Chair of the Nominations Committee while the individual in that role is also an Executive Director

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Remuneration paid in respect of the year to 31 December 2018

Single Figure of Remuneration for the period — Audited

          The table below shows the aggregate emoluments earned by the Executive Directors of the Company who served at any point in 2018 for the years ended 31 December 2018 and 31 December 2017. The emoluments shown for 2018 have been converted to USD at the Group's average rate for year to 31 December 2018 of GBP1: USD1.3356. Those for 2017 were converted at the rate of GBP1: USD1.2886 in accordance with the 2017 U.K. Annual Report.

    Salary(1)
(USD 000s)
    Benefits(2)
(USD 000s)
    Pension(3)
(USD 000s)
    Annual
Bonus(4)
(USD 000s)
    Long-term
incentives(5)
(USD 000s)
    Total
(USD 000s)
 

Executive Director

    2018     2017     2018     2017     2018     2017     2018     2017     2018     2017     2018     2017
 

Javier López Madrid

    741     716     329     314     148     143         937     117         1,335     2,110  

Pedro Larrea Paguaga(5)

    634     314     298     151     127     63         412     87         1,146     940  

Notes:

(1)
No change in salary has been made year on year, any difference resulting in changes in the GBP: USD exchange rate.

(2)
For Javier López Madrid, benefits include an expatriate allowance of 40% of salary (£222,000 ($296,503) in 2018), and medical insurance and life assurance coverage.

For Pedro Larrea Paguaga, benefits include an expatriate allowance of 40% of salary (£190,000 ($253,764) in 2018), and medical insurance and life assurance coverage.

(3)
For 2018 the pension for Javier López Madrid and Pedro Larrea Paguaga is 20% of base salary payable as a cash supplement.

(4)
No annual bonus was awarded in respect of 2018 and no amounts were deferred into shares.

(5)
The performance period of the 2016 long-term incentive awards ended on 31 December 2018. As outlined below 35.74% of the award will vest in November 2019. The value shown in the table is an estimate using the average share price over the last three months of the financial year 2018. There were no long-term incentives with performance periods ending in the year 31 December 2017 and, save for the deferred share bonus awards the value of which was disclosed in the single figure table for 2017 and which are detailed below, no awards granted with time-based vesting only.

(6)
Pedro Larrea Paguaga was appointed to the Board on 28 June 2017. The figures given in respect of Pedro Larrea Paguaga's remuneration for 2017 are pro-rated to reflect the period from the date of his appointment to the Board to 31 December 2017.

          The table below shows the aggregate emoluments earned by the Non-Executive Directors of the Company who served at any time during 2018 for the years ended 31 December 2018 and 31 December 2017. The emoluments shown for 2018 have been converted to USD at the Group's

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average yearly rate of GBP1: USD1.3356. Those for 2017 were converted at the rate of GBP1: USD1.2886 in accordance with the 2017 U.K. Annual Report.

    Fees
(US$'000)
    Benefits
(US$'000)(1)
    Total
(US$'000)
 

Non-Executive Directors

    2018     2017     2018     2017     2018     2017
 

José María Alapont(2)

    128.8         8.0         136.8      

Donald G Barger Jr

    140.9     141.1     18.7     18.0     159.6     159.1  

Bruce L Crockett

    137.5     112.7     28.0     22.5     165.6     135.2  

Stuart E Eizenstat

    109.5     105.6     16.0     13.5     125.5     119.1  

Manuel Garrido y Ruano(3)

    109.5     61.6     12.0     8.4     121.5     70.0  

Greger Hamilton

    156.3     155.3     0.0     4.5     156.3     159.8  

Javier Monzón

    178.3     160.7     14.0     14.2     192.3     174.9  

Pierre Vareille(4)

    137.6     16.2     12.0     1.9     149.6     18.1  

Juan Villar Mir de Fuentes

    93.5     90.2     8.0     8.4     101.5     98.6  

(1)
Benefits comprise travel allowances.

(2)
José María Alapont was appointed to the Board on 24 January 2018 and his fees and benefits for 2018 reflect the period from his appointment to 31 December 2018.

(3)
Manuel Garrido y Ruano joined the Board on 30 May 2017 and his fees and benefits for 2017 reflect the period from his appointment to 31 December 2017.

(4)
Pierre Vareille joined the Board on 26 October 2017 and his fees and benefits for 2017 reflect the period from his appointment to 31 December 2017.

Annual bonus for the financial year to 31 December 2018 for the Executive Directors  — audited

          The target annual bonus opportunity for the Executive Chairman was 100% of salary, with a maximum opportunity of two times target. The target annual bonus opportunity for the CEO was 100% of salary, with a maximum opportunity of two times target. The performance measures for 2018 for each of the Executive Directors are detailed in the tables below. In addition to these measures, the annual bonus in 2018 was subject to an underpin based on a 10% improvement in the Group's lost time injury rate compared with 2017 and there being no fatal accidents resulting from the Company's acts or omissions during the year under review.

          Threshold performance was not achieved in respect of the financial performance metrics for 2018. The Executive Directors were also dissatisfied with the Group's performance on health and safety notwithstanding improvements made. The Executive Directors therefore proposed to the Committee that no annual bonus be payable to the Executive Directors in respect of 2018, irrespective of the relevant Executive's performance in respect of the objectives specific to his role. The Committee agreed to this proposal.

          The objectives specific to each director and their weightings — together with weightings and outcome in respect of the financial targets — for the annual bonus for 2018 are given below for each of the Executive Directors.

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          For the Executive Chairman:

Measure

    Weighting
(target %
of award)
  Threshold
performance
(0% of target
paid)
  Target
performance
(100% of
target paid)
  Stretch
performance
(200% of
target paid)
  Actual
Performance
    Bonus
outcome
(as a
percentage
of target)
    Weighted
bonus
outcome
 

Adjusted EBITDA

    25 % $360 million   $420 million   $520 million   $253 million     0 %   0 %

Net Income

   
25

%

$130 million

 

$170 million

 

$230 million

 

$43.7 million

   
0

%
 
0

%

Free Cash-flow

   
25

%

$55 million

 

$95 million

 

$165 million

 

$(32.4) million

   
0

%
 
0

%

Long-term dividend and financial structure policy

   
10

%

Assessment by the Committee, taking account of the Board's approval of a target leverage or debt ratio and a dividend policy, duly communicated to the market and implemented

 

Aggressive growth plan

   
10

%

Assessment by the Committee, taking into account of the presentation of a long-term strategic plan to the Board, definition of the implementation of that plan in 2018 and 2019 and the execution of that plan in 2018

 

Assessment of chairmanship and governance

   
5

%

Assessment by the Committee, recognizing the leadership in driving the constitutional re-structuring of the Board and its Committees and the corporate governance policy

 

          For the CEO:

Measure

    Weighting
(target %
of award)
  Threshold
performance
(0% of target
paid)
  Target
performance
(100% of target
paid)
  Stretch
performance
(200% of target
paid)
  Actual
Performance
    Bonus
outcome
(as a percentage
of target)
    Weighted
bonus
outcome
 

Adjusted EBITDA

    25 % $360 million   $420 million   $520 million   $253million     0 %   0 %

Net Income

   
25

%

$130 million

 

$170 million

 

$230 million

 

$43.7 million

   
0

%
 
0

%

Free Cash-flow

   
25

%

$55 million

 

$95 million

 

$165 million

 

$(32.4) million

   
0

%
 
0

%

Production costs

   
5

%

A targeted level of average fully absorbed cost of production by tonnage of the Group's core products globally

 

Long-term dividend and financial structure policy

   
10

%

Assessment by the Committee, taking account of the Board's approval of a target leverage or debt ratio and a dividend policy, duly communicated to the market and implemented

 

Aggressive growth

   
10

%

Assessment by the Committee, taking into account of the presentation of a long-term strategic plan to the Board, definition of the implementation of that plan in 2018 and 2019 and the execution of that plan in 2018

 

Long term incentive awards for the financial year ended 31 December 2018 — Audited

Awards vesting/ performance period ending in financial year 2018

          The performance period of the 2016 LTIPs ended on 31 December 2018. 60% of each award was determined by Ferroglobe's Total Shareholder Return ("TSR") performance. 50% of the TSR part of the award was calculated relative to a bespoke group of peers, and the other 50% relative to the S&P Global 1200 Metals and Mining Index in line with last year's award. Vesting of the remaining 40% of each award related to the Company's return on invested capital ("ROIC") over the performance period as compared with the bespoke comparator group of the Company's peers and the Company's net operating profit after tax ("NOPAT") growth as compared to the same

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bespoke comparator group of the Company's peers. Vesting of these awards was calculated as follows:

    Weighting   Threshold (0%)   Target (100%)   Maximum (200%)   Actual     Vesting %
 

Total shareholder return relative to a bespoke group(1)

    30 % Less than median (50th percentile)   50th percentile   90th percentile   Below lowest ranked     0 %

TSR relative to the S&P 1200 Metals and Mining Index(2)

    30 % Less than Index TSR   Equal to Index TSR   Equal to Index TSR + 25 percentage points   –43.1%     0 %

Relative return on invested capital ("ROIC")(3)

    20 % Below percentile 25 (1.61%)   Median (2.53%)   Percentile 75 (4.27%) and above   0.15%     0 %

Relative net operating profit after tax ("NOPAT") growth(3)

    20 % Below percentile 25 (29.8%)   Median (143.9%)   Percentile 75 (230.3%) and above   186.1%     178.69 %

Weighted average (max 200%)

                          35.74 %

(1)
Between the 50th and 75th percentile, proportionate vesting of between target (100%) and 150% of target. Between 75th percentile and 90th percentile, proportionate vesting of between 150% and 200% of target

(2)
Equal to Index TSR + 15 percentage points, vesting of 150% of target. Straight line vesting between Index TSR and Index TSR +15 percentage points and between Index TSR+15 percentage points and Index TSR +25 percentage points

(3)
Percentile 25, vesting of 50% of target

          As a result and subject to the rules of the EIP, the following awards will vest to the Executive Directors in 2019:

  Type of
award
  Grant date   Vesting date     Number of
shares
awarded
    Percentage of
target award
vesting
(0% - 200%)
    Number of
shares to
vest(1)
    Estimated
value to
of award
to vest
(USD)(2)
 

Javier López Madrid

  LTIP Nil-cost option   24 November 2016   24 November 2019     68,541     35.74 %   24,497     117,241  

Pedro Larrea Paguaga

  LTIP Nil-cost option   24 November 2016   24 November 2019     51,010     35.74 %   18,231     87,253  

(1)
The number of shares shown excludes dividend equivalents to be awarded in the form of shares

(2)
The value shown in the table is an estimate using the average share price over the last three months of the financial year

Deferred share bonus awards granted in financial year 2018

          Under the terms of the Company's annual bonus plan, where the annual bonus payable in any year exceeds 100% of the relevant Executive's salary, the bonus is divided into 100% of salary paid in cash and the balance deferred into shares for a period of three years. In respect of the financial year ended 31 December 2017, the annual bonuses payable to Javier López Madrid and Pedro Larrea Paguaga totaled 131% of their salaries in each case, as disclosed in the Company's annual report and accounts for 2017. Accordingly, on 14 June 2018, a bonus amount equal to

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Table of Contents

100% of salary was paid in cash to each of the Executives and the balances equal to 31% of their respective annual salaries were deferred into shares under awards granted as follows:

  Type of
award(1)
    Total
bonus
payout(1)
    Cash
payout(1)
    Value of
deferred
award(1)
    Share price
at date of
grant
    Number of
shares
under
award
  Normal
vesting
date(2)

Javier López Madrid

  Nil-cost option   $ 976,639   $ 744,144   $ 232,495   $ 10.184     22,829   14 June 2021

Pedro Larrea Paguaga

  Nil-cost option   $ 835,861   $ 636,880   $ 198,981   $ 10.184     19,538   14 June 2021

Notes:

(1)
Converted at GBP1:USD1.34 being the exchange rate on the date of grant. The differences in total pay-out disclosed here and in the single figure table above arise (i) from differences in the GBP:USD exchange rate used in that table (reflecting the exchange rate used in the annual report and accounts for the financial year 2017) and that used here as at the date of grant; and (ii) in the case of Pedro Larrea Paguaga only, as the disclosures in the single figure table for the financial year for 2017 show his remuneration for the period from the date of his appointment to the Board to the financial year end only, while the numbers included here are for the full financial year.

(2)
In normal circumstances deferred share bonus awards vest three years from grant where the participant remains an employee or is a good leaver under the Plan rules at the point of vesting.

Long-term incentive awards granted in financial year 2018

          On 21 March 2018, Javier López Madrid and Pedro Larrea Paguaga were granted long-term incentive awards as follows:

  Type of
award(1)
  Basis of award
(at target)(2)
    Share price
at date of
grant(3)
    Number of
shares at
target
    Face value
of shares
at target(4)
    Face value
of shares at
maximum(5)
    Vesting at
threshold
  Performance
period(6)

Javier López Madrid

  Nil-cost option   230% of salary of $777,000   $ 15.798     113,121   $ 1,787,086   $ 3,574,171     40 % 3 years to 31 December 2020

Pedro Larrea Paguaga

  Nil-cost option   200% of salary of $665,000   $ 15.798     84,187   $ 1,329,986   $ 2,659,972     40 % 3 years to 31 December 2020

Notes:

(1)
No price is normally payable on the exercise of the nil-cost option although the Company reserves the right to require the payment of the nominal cost of the shares as a condition of exercise if required to enable the issue or transfer of the shares.

(2)
Converted at GBP1:USD1.4, being the exchange rate on the date of grant.

(3)
This figure represents the average closing share price for the five days prior to the date of grant.

(4)
The value shown in this column has been calculated by multiplying the number of shares that would vest at target by the average closing share price for the five days prior to the date of grant.

(5)
The value shown in this column has been calculated by multiplying the number of shares that would vest at maximum (being 200% of target) by the average closing share price for the five days prior to the date of grant.

(6)
See below for details of the performance conditions applicable to the awards.

          Vesting of 60% of the award will be determined by Ferroglobe's Total Shareholder Return ("TSR"). Performance will be measured over three years commencing January 1, 2018 with vesting

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as set out below. 50% of the TSR part of the award will be determined by Ferroglobe's TSR relative to the following bespoke group of peer companies:

Commercial Metals Company

  Boliden

Allegheny Technologies, Inc

  Morgan Advanced Material

Materion Corporation

  Minerals Technologies

Steel Dynamics Inc

  Kaiser Aluminium

Antofagasta plc

  Vallourec

Carpenter Technologies

  Worthington Industries

Schnitzer Steel Industries

  Salzgitter AG

Eramet

  Vedanta Resources

  Norsk Hydro

  AMG Advanced Metallurgical Group

 

TSR Performance
 
Vesting scale

Less than median (50th percentile)

  No vesting of awards

Between the 50th and 75th percentile

  Proportionate vesting of between target (100%) and 150% of target

Between 75th percentile and 90th percentile

  Proportionate vesting of between 150% and 200% of target

90th percentile

  200% of target

          The other 50% of the TSR part of the award will be determined by Ferroglobe's TSR relative to the S&P Global 1200 Metals and Mining Index.

TSR Performance
 
Vesting scale

Less than Index TSR

  No vesting of awards

Equal to Index TSR

  Target (100%)

Equal to Index TSR + 15 percentage points

  150% of target

Equal to Index TSR + 25 percentage points

  200% of target

          With straight line vesting between Index TSR and Index TSR +15 percentage points and between Index TSR+15 percentage points and Index TSR +25 percentage points.

          The Committee determined that the measures applicable to the long-term incentive awards granted in 2017 remained appropriate, comparing (i) the Company's return on invested capital ("ROIC") over the three-year period with that of a bespoke comparator group of the Company's peers using a quarterly average for the calculation of Invested Capital and (ii) the Company's net operating profit after tax ("NOPAT") growth with that of the same bespoke comparator group of the Company's peers set out above. Performance will be measured over three years with vesting as set out below.

ROIC over the performance period
   
Vesting scale
 

Below percentile 25

    0 %

Percentile 25

    50 %

Median

    100 %

Percentile 75 and above

    200 %

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NOPAT growth over the Performance Period
   
Vesting scale
 

Below percentile 25

    0 %

Percentile 25

    50 %

Median

    100 %

Percentile 75 and above

    200 %

          No portion of the ROIC component shall vest unless the Company's ROIC over the performance period is at least equal to the percentile 25 average ROIC for the members of the comparator group over the performance period. No portion of the NOPAT component shall vest unless the ratio between the Company's NOPAT for the twelve-month period ending 31 December 2020 against the Company's NOPAT for the twelve-month period ending 31 December 2017 is at least equal to the Lower Quartile NOPAT growth ratio for the members of the comparator group over the same period. There is straight line vesting between each vesting point (percentile 25, median and percentile 75).

Directors' shareholding and share interests — Audited

          The table below sets out the number of shares held or potentially held by directors (including their connected persons where relevant) as at 31 December 2018.

Director

    Beneficially
owned
shares
    Number of
shares under
long term
incentive
awards without
performance
conditions(1)
    Number of
shares under
long term
incentive
awards with
performance
conditions(2)
    Target
shareholding
guideline (as
a % of salary
or average
gross annual
fees as
applicable)
    Percentage
of Executive
Director's
salary held
as shares as at
31 December
2018(3)
 

Javier López Madrid

    42,500     22,829     336,365     200 %   9.11 %

Pedro Larrea Paguaga

    35,000     19,538     250,331     200 %   8.77 %

José María Alapont

    15,000                  

Donald G. Barger Jr

    20,636     27,270         200 %      

Bruce L. Crockett

    6,000     31,056         200 %      

Stuart E. Eizenstat

    11,548     3,529         200 %      

Manuel Garrido y Ruano

    870             200 %      

Greger Hamilton

    5,425             200 %      

Javier Monzón

    19,400             200 %      

Pierre Vareille

    20,000             200 %      

Juan Villar Mir de Fuentes

                200 %      

Notes:

(1)
See page 46 for details of the Executives' awards and page 50 for the NEDs' awards.

(2)
At target vesting. See page 50 for details.

(3)
Measured by reference to beneficially owned shares only and using the closing share price at 31 December 2018 of $1.59 and the annual salaries of the Executive Directors in USD as disclosed in this U.K. Annual Report and Accounts.

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          The Directors' outstanding share awards as at 31 December 2018 were as detailed below:

Director

  Award type   Grant
date
    Outstanding(1)   Subject to
performance
conditions(2)
    Exercisable
as of
31 December
2018
    Exercised
during the
year to
31 December
2018
    Future
vesting
    Vesting
date
 

Javier López Madrid

  LTIP Nil cost option   24.11.16     68,541   Yes             68,541     24.11.19  

  LTIP Nil cost option   01.06.17     154,703   Yes             154,703     01.06.20  

  LTIP Nil cost option   21.03.18     113,121   Yes             113,121     21.03.21  

  Deferred Bonus Award: Nil cost option   14.06.18     22,829   No             22,829     14.06.21  

Pedro Larrea Paguaga

  LTIP Nil cost option   24.11.16     51,010   Yes             51,010     24.11.19  

  LTIP Nil cost option   01.06.17     115,134   Yes             115,134     01.06.20  

  LTIP Nil cost option   21.03.18     84,187   Yes             84,187     21.03.21  

  Deferred Share Bonus Award   14.06.18     19,538   No             19,538     14.06.21  

Donald G. Barger(3)

  NQ   Various     26,226   No     Yes     4,990          

  RSU/C   Various     23,741   No     Yes              

  SAR   Various     2,303   No     Yes              

Bruce L. Crockett(3)

 

NQ

 

Various

   
26,226
 

No

   
Yes
   
             

  RSU/C   Various     2,527   No     Yes              

  SAR   Various     2,303   No     Yes              

Stuart E. Eizenstat(3)

 

NQ

 

Various

   
26,226
 

No

   
Yes
   
4,990
   
   
 

  SAR   Various     2,303   No     Yes              

Notes:

(1)
Awards granted to the Executive Directors shown at target.

(2)
Subject to performance conditions and continued employment in the case of awards to the Executive Directors. See pages 47 to 49 for performance conditions applicable to the awards granted in 2018. As outlined earlier in this ARR, 35.74% of the 2016 awards will normally vest on 24 November 201

(3)
These incentive awards are legacy awards which the Company is authorised to honour following shareholder approval of the Policy in June 2016.

Total pension entitlements — Audited

          Details of the value of pension contributions are provided in the Pensions column of the Single Figure of Remuneration table. Pension contributions are by way of a cash allowance or contribution to a 401(k) plan. There are therefore no specified retirement ages to disclose or consequences of early retirement.

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Performance graph

          The graph below illustrates the Company's TSR performance relative to the constituents of the S&P 1200 Metals & Mining index from the start of the first day of listing of Ferroglobe's shares on 24 December 2015 to 31 December 2018. The graph shows performance of a hypothetical $100 invested and its performance over that period. The index has been chosen for this table as the most appropriate comparator for the Company in this period as the Company is a constituent of this index and uses the constituents of this index for one of the TSR comparator groups for the long-term incentive awards.

Total shareholder return
Source: FactSet

GRAPHIC

This graph shows the value, by 31 December 2018, of $100 invested in Ferroglobe on 24 December 2015, compared with the value of $100 invested in the S&P Global 1200 Metals & Mining Index on a daily basis.

Executive Chairman remuneration table

  2018   2017(1)   2016(2)   2015(2)(3)

  Javier López Madrid   Javier López Madrid   Alan Kestenbaum   Alan Kestenbaum

Executive Chairman's remuneration(4)

  $1,336,250   $2,106,244   $1,870,120   $225,551

Annual variable pay (including as a % of maximum)(5)

  $0 (0%)   $935,423 (65.5%)   $738,886 (17.5%)   $201,783

LTIP awards where vesting is determined by performance in the relevant year(6)

  17.87%   N/A   N/A   N/A

Notes:

(1)
At the exchange rate of 1 GBP: 1.2886 USD used in the FY17 Report.

(2)
At the exchange rate of 1 GBP: 1.3507 USD used in the FY16 Report.

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(3)
Reflecting the formation of the Company on completion of the Business Combination, the figures for 2015 are in respect of the period from 23 December 2015 to 31 December 2015 only.

(4)
Remuneration comprises total remuneration as shown in the single figure table in the ARA for 2018 (with differences due to rounding), in the 2017 U.K. Annual Report and Accounts for 2017 and the 2016 U.K. Annual Report and Accounts for 2016 and 2015. Remuneration reported for 2015 is for the period from consummation of the BCA on 24 December 2015 to 31 December 2015.

(5)
Annual variable pay is the bonus amounts in respect of 2018 and 2017 shown in the single figure table on page 43 and, for each year, the percentage of maximum award it represents. Figures elsewhere in this report show bonus as a percentage of target.

(6)
The number of shares subject to long term incentive awards where final vesting is determined by reference to performance ending in the year under review is shown as a percentage of maximum opportunity. No long-term incentive awards awarded to the relevant Executive Chairman vested in 2017, 2016 or 2015, save for those vesting on Alan Kestenbaum's leaving the Company on 31 December 2016.

Percentage increase or reduction in the remuneration of the Executive Chairman

          The following table shows the percentage reduction in 2018 in the Executive Chairman's pay(1) compared with 2017 and the average percentage change in the same period in amounts paid to European employees of the Group as a whole. European employees have been chosen as an appropriate group against which to make the comparison as our Executive Chairman as at 31 December 2018 is based in Europe.

Executive Chairman's
pay(1)
 
  Average employee
pay(1)
 
2018 to 2017   2018 to 2017
(47.65%)   12.0%

    Notes:

(1)
The components of pay for these purposes includes salary, taxable benefits and annual variable pay.

Relative importance of the spend on pay

          The following table shows the Company's actual spend on pay for all employees compared to distributions to shareholders in the financial year.

    1 January 2018 to
31 December 2018
    1 January 2017 to
31 December 2017
 

Employee costs

  US$ 341,064,000   US$ 301,963,000  

Average number of employees

    4,471     4,018  

Distributions to shareholders

  US$ 40,569,322      

External directorships during financial year 2018

Javier López Madrid

          The Board was satisfied that under these arrangements the Executive Chairman had the necessary time to carry out his duties effectively during 2018.

          Under the Policy, Executive Directors may retain fees paid for external director appointments. These appointments are subject to approval by the Board and must be compatible with their duties as Executive Directors.

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Membership of the Committee

          During the year to 31 December 2018, the Committee comprised Donald G. Barger, Jr as chairman and members, Pierre Vareille and Bruce L. Crockett. José María Alapont was appointed to the Committee on 16 May 2018.

          The Executive Chairman, Chief Executive Officer and other members of the management team may be invited to attend meetings to assist the Committee. Other Non-Executive Directors are normally invited to attend meetings to assist the Committee in its deliberations as appropriate. No Executive, however, is present during any decision making in relation to their own remuneration.

External advisors

          Aon provides independent advice to the Committee and was appointed by the Committee in early 2016. The Committee seeks advice relating to remuneration for Executives and Non-Executive Directors and the wider senior management population from Aon. Aon also provided advice to management, to enable their support of the Committee, primarily in relation to remuneration reporting and the operation of incentive plans but does not provide any other services to the Company except for insurance broking services.

          The Committee is satisfied that the advice received from Aon in relation to executive remuneration matters is objective and independent. Aon is a member of the UK Remuneration Consultants Group and abides by the Remuneration Consultants Group Code of Conduct, which requires its advice to be objective and impartial. The fees paid to Aon for advice provided directly to the Committee in 2018 were £168,499 ($225,047) (2017: £140,024 $180,154) (excluding VAT).

Statement of shareholder voting

          The following table shows the results of:

    For     % of votes
cast
    Against     % of votes
cast
    Withheld
 

Directors' Remuneration Policy

    146,616,626     92.09     12,580,971     7.90     9,119  

Remuneration Report

    144,996,322     99.68     445,432     0.31     10,922  

Approval

          This Directors' Remuneration Report, including both the 2019 Policy and Annual Report on Remuneration has been approved by the Board.

Signed on behalf of the Board.

Chairman of the Compensation Committee

3 June 2019

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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FERROGLOBE PLC

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

In our opinion:

We have audited the financial statements of Ferroglobe plc (the 'parent company') and its subsidiaries (the 'group') which comprise:

The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and IFRSs as issued by the IASB. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards, including FRS 101 "Reduced Disclosure Framework" (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of our report.

We are independent of the group and the parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Summary of our audit approach

    Key audit matters       The key audit matters that we identified in the current year were:    

 

         

Impairment of goodwill;

   

 

         

Acquisition of Glencore's European Manganese business.

   

 

 

Materiality

 

 

 

The materiality that we used for the group financial statements was $18.5 million, which was determined using revenue as the basis.

 

 

 

 

Scoping

 

 

 

As in the prior year, we focused our Group audit scope primarily on the audit work at components in the following countries:

 

 

 

         

UK;

   

 

         

USA;

   

 

         

Canada;

   

 

         

France;

   

 

         

South Africa; and

   

 

         

Spain

 

 


 

 

 

 

 

 

The components subject either to full scope audits or audits of specified balances account for 92% of the Group's revenue. FerroPem SAS in France, Ferroatlantica SAU in Spain and the parent company in the UK were all subject to full scope audits.

 

 
    Significant changes in our approach       Our audit approach is broadly consistent with the previous year, however:
  

We identified a new key audit matter in relation to the acquisition of Glencore's European managanese business due to the significant judgments and assumptions made by management to estimate the fair values of the assets acquired and the liabilities assumed in the business combination.

   

 

         

Last year our audit report included a key audit matter in relation to revenue recognition which is not included in our report this year as there is no history of material error in this balance and the level of judgement applied by management is limited.

   

 

         

Last year our audit report included a key audit matter in relation to the accounting treatment of receivables in the securitisation programme which is not included in our report this year as there is no history of material error in this balance and no significant changes have been made to the terms of the programme which would alter the accounting judgements made.

   

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Conclusions relating to going concern


We are required by ISAs (UK) to report in respect of the following matters where:   We have nothing to report in respect of these matters.

the directors' use of the going concern basis of accounting in preparation of the financial statements is not appropriate; or

 

 

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's or the parent company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

 

 

Key audit matters


Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.

These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

    Impairment of goodwill    
    Key audit matter description

GRAPHIC

  Goodwill is a highly material balance in the Consolidated Statement of Financial Position and its recoverability is a significant judgement underpinned by a number of key assumptions and estimates.
  
The Company's evaluation of goodwill for impairment involves the comparison of the fair values of its US and Canadian Cash Generating Units ("CGUs") to their carrying values. The Company determines the fair value of its CGUs using the income approach (discounted cash flow model). The determination of the fair value using a discounted cash flow model requires management to make significant estimates and assumptions related to anticipated future sales price and volume, cost structure, discount rates (WACC) and long term growth rates, that are subject to change as business conditions change, and therefore could impact fair values in the future.
  
The goodwill balance was $203 million as of December 31, 2018 (2017: $205.3 million). The fair values of the US and Canadian CGUs exceeded their carrying values as of the measurement date and, therefore, no impairment was recognised at 2018 year-end.
  
More information on the impairment review performed by management can be found on note 7 to the financial statements. The Group's accounting policy on goodwill is included in note 4.1 in the "Accounting policies".
   

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How the scope of our audit responded to the key audit matter

GRAPHIC


 

Our audit procedures related to the forecasts of sales price and volume, cost structure, discount rates (WACC) and long term growth rates for the US and Canadian CGUs included the following, amongst others:
  

We evaluated the design and implementation and tested the operating effectiveness of relevant controls relating to impairment of goodwill, including those over the forecasts and the selection of the discount rates.
  

We evaluated the reasonableness of management's forecasts by performing an analysis of the volume and prices budgeted for 2019, comparing them to actual figures in 2018 and also by comparing management's forecast prices to benchmark prices based on independently sourced data.
  

We evaluated management's ability to accurately forecast future revenues and operating margins by performing a retrospective analysis comparing 2018 actual results to the 2018 forecast and challenging any potential bias in management's projections. We have also compared the methodology used by Management in comparison with previous years´ analysis.
  

We evaluated the volumes and prices projected for the period 2020-2023 using independent sources of information (such as analyst and industry reports or prices reports) and therefore considering information that could be potentially contradictory to management's forecasts.
  

We considered the impact of changes in the regulatory environment on management's forecasts.
  

With the assistance of our fair value specialists, we evaluated the discount rates (WACC) and long term growth rates, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the discount rates selected by management.
  

Management have engaged external specialists to support the core Discounted Cash Flow ("DCF") approach by using EBITDA multiple approach methodology. With the assistance of our fair value specialists, we evaluated the valuation method used by management's external expert. Our approach included testing the underlying source information, mathematical accuracy of the calculations, and comparing the EBITDA multiples used in management's valuation to those of other comparator companies identified by management's expert.
  

We have evaluated the sensitivity analysis disclosed by the Company by comparing it to outputs of the impairment test that arise by applying significant changes and modifications to the underlying key inputs such as the WACC and, the long-term growth rates.


 

 
    Key observations

GRAPHIC

  We are satisfied that no impairment of the group's goodwill balance is required and that the sensitivity disclosures in note 7 appropriately illustrate the impact of reasonably possible changes in the key assumptions used in the underlying cash flow forecasts.    

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    Acquisition of Glencore's European Manganese Business    
    Key audit matter description

GRAPHIC

  The Company completed the acquisition of Glencore's Manganese business (the "acquired business") located in Dunkirk (France) and Mo I Rana (Norway) on February 1, 2018. The acquisition price for the two facilities included an up-front payment on the transaction closing and an earn-out liability payable over eight and a half years up to maximum amount of $60 million, based on the annual performance of each of the acquired plants.
  
Additionally, simultaneously with the acquisition, the Company reached an agreement with Glencore, designating Glencore as the exclusive buying agent for manganese ore and marketing agent for the sale of manganese alloys, in both cases for a period of ten years, paying commissions on the transactions.
  
The Company accounted for the acquisition under the acquisition method of accounting for business combinations. The Company utilised the services of third-party valuation consultants, along with internal estimates and assumptions, to estimate the initial fair value of the assets acquired. The third-party valuation consultants utilised several appraisal methodologies including market and cost approaches to estimate the fair value of the identifiable net assets acquired.
  
As a consequence of the initial accounting, the Company has recorded all the assets acquired and the liabilities assumed at fair value, including a liability of $26.2 million related to the payment of the earn-out, resulting in the recording of a gain of $40.1 million from a bargain purchase in the income statement for the year. Management has concluded that the bargain purchase gain arose primarily because the production of manganese alloys was an ancillary business for the seller, coupled with previous weaker manganese alloy pricing in the marketplace.
  
We identified the fair value of the acquired business as a key audit matter because of the significant judgments and assumptions made by management to estimate the fair values of the assets acquired and the liabilities assumed, including the earn-out liability. This required a high degree of auditor judgment and an increased extent of effort.
  
This included the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management's estimates and assumptions related to the model used for the purpose of valuing the ongoing cash flows from the acquisition as well as the earn-out payments due to be paid to Glencore.
  
More information on the transaction and the Group's accounting policy on business combinations can be found in notes 5 and 9 of the consolidated financial statements.
   

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How the scope of our audit responded to the key audit matter

GRAPHIC


 

Our audit procedures related to the accounting treatment of the acquisition of Glencore´s manganese business included the following, among others:
  

We evaluated the design and implementation and tested the operating effectiveness of relevant controls over the transaction, including those controls over the assumptions and estimates applied by management.
  

We have performed procedures to obtain an understanding of the business purpose and economic substance of the transaction.
  

With the assistance of our fair value specialists, we evaluated the model used for the purpose of valuing the ongoing cash flows from the acquisition as well as the earn-out liability to be paid to Glencore, including testing the underlying source information, such as budgets, simulation and regression analysis, and the mathematical accuracy of the calculations.
  

With the assistance of our tax specialists, we have evaluated if the commissions to be paid to Glencore for future purchases of manganese ore and sales of manganese alloys have been determined to be at market value, in order to conclude if the related agreement has been recorded at fair value at the acquisition date, as well as in the estimate of future earn-out payments. We have also evaluated the tax impact of the acquisition.
  

We have challenged management's basis for the bargain purchase, in particular, their judgements that both facilities sold by Glencore were not part of their core business and that manganese alloy prices were low in the period prior to the deal. We evaluated the proper accounting of the acquired assets, the liabilities assumed, the recording of the earn-out liability and the gain from a bargain purchase.


 

 

 

 

Key observations

GRAPHIC


 

We are satisfied that the acquisition date fair values recorded by the company and the related bargain purchase gain are appropriate and that the methodology and assumptions applied in valuing the ongoing cash flows from the acquisition and the earn-out liability are reasonable.

 

 

Our application of materiality


We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work.

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Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

 
   
   
  Group financial statements
   
  Parent company financial statements
   
    Materiality       $18.5 million (2017: $13.9 million)       $13.9 million ($11.1 million)    

 

 

Basis for determining materiality

 

 

 

0.8% (2017: 0.8% million) of revenue

 

 

 

1% (2017: 1%) of total assets capped at 75% of group materiality (2017: 80%).

 

 

 

 

Rationale for the benchmark applied

 

 

 

We determined materiality using revenue as the benchmark as we considered this to be the most appropriate measure to assess the performance of the Group, particularly as it is more stable than profit before tax or other profit based measures such as EBITDA.

 

 

 

As the parent company is a non-trading entity and a cost centre, it is considered appropriate to use total assets as the basis for determining materiality.

 

 

We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of $0.9 million (2017: $0.7 million) for the group, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.

An overview of the scope of our audit


The Group's principal operations are in France and Spain and its head office is based in the UK. Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls, and assessing the risks of material misstatement at the Group level. Based on that assessment, as in the prior year, we focused our Group audit scope primarily on the audit work at components in the following countries:

These locations hold the principal business units within the Group's reportable segments. We identified each legal entity in the group as a component and full scope audits were performed on FerroPem SAS in France, Ferroatlantica SAU in Spain and the parent company in the UK. These components, along with other components in the group which were subject to audits of specified balances, account for 92% of the Group's revenue and 89% of the Group's total assets. Our audit work for the components was executed at levels of materiality ranging from $11.1 million to $3.7 million.

At the Group level we also tested the consolidation process and carried out analytical procedures to confirm our conclusion that there were no significant risks of material misstatement in the

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aggregated financial information of the remaining subsidiaries not subject to full audit or audit of specified account balances, class of transactions or disclosures.

The Group audit team held a Group wide planning meeting to discuss the risk assessment at the start of the audit and subsequently held regular update calls throughout the audit. The Senior Statutory Auditor or another senior member of the Group audit team participated in all of the close meetings, both at the interim and final visits, of the Group's components. The Senior Statutory Auditor or another senior member of the Group audit team carried out a review of the component auditor files.

Other information
   
The directors are responsible for the other information. The other information comprises the information included in the annual report including the Strategic Report other than the financial statements and our auditor's report thereon.   We have nothing to report in respect of these matters.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

 

 

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

 

 

If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

 

Responsibilities of directors


As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements


Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a

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guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

Opinions on other matters prescribed by the Companies Act 2006


In our opinion the part of the directors' remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

In the light of the knowledge and understanding of the group and or the parent company and their environment obtained in the course of the audit, we have not identified any material misstatements in the strategic report or the directors' report.

Matters on which we are required to report by exception


Adequacy of explanations received and accounting records

Under the Companies Act 2006 we are required to report to you if, in our opinion:   We have nothing to report in respect of these matters.

we have not received all the information and explanations we require for our audit; or

 

 

adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

 

 

the parent company financial statements are not in agreement with the accounting records and returns.

 

 

Directors' remuneration

Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors' remuneration have not been made or the part of the directors' remuneration report to be audited is not in agreement with the accounting records and returns.   We have nothing to report in respect of these matters.

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Use of our report


This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Paul Barnett (Senior statutory auditor)

For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
3 June 2019

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FERROGLOBE PLC

FINANCIAL STATEMENTS CONTENTS

Consolidated Statement of Financial Position as of December 31, 2018 and 2017

  65  

Consolidated Income Statement for the years ended December 31, 2018, 2017 and 2016

  66  

Consolidated Statement of Comprehensive Income (Loss) for the years ended December 31, 2018, 2017 and 2016

  67  

Consolidated Statement of Changes in Equity for the years ended December 31, 2018, 2017 and 2016

  68  

Consolidated Statement of Cash Flows for the years ended December 31, 2018, 2017 and 2016

  69  

Notes to the Consolidated Financial Statements

  70  

Parent Company Balance Sheet as of December 31, 2018 and 2017

  178  

Parent Company Statement of Changes in Equity for the years ended December 31, 2018 and 2017

  179  

Notes to the Parent Company Financial Statements

  180  

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FERROGLOBE PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2018 AND 2017

  Notes     2018
US$'000
    2017
US$'000
 

ASSETS

                 

Non-current assets

                 

Goodwill

  Note 7     202,848     205,287  

Other intangible assets

  Note 8     51,822     58,658  

Property, plant and equipment

  Note 9     888,862     917,974  

Other non-current financial assets

  Note 10     70,343     89,315  

Deferred tax assets

  Note 22     14,589     5,273  

Non-current receivables from related parties

  Note 23     2,288     2,400  

Other non-current assets

  Note 12     10,486     30,059  

Total non-current assets

        1,241,238     1,308,966  

Current assets

                 

Inventories

  Note 11     456,970     361,231  

Trade and other receivables

  Note 10     155,996     111,463  

Current receivables from related parties

  Note 23     14,226     4,572  

Current income tax assets

  Note 22     27,404     17,158  

Other current financial assets

  Note 10     2,523     2,469  

Other current assets

  Note 12     8,813     9,926  

Cash and cash equivalents

  Note 10     216,647     184,472  

Total current assets

        882,579     691,291  

Total assets

        2,123,817     2,000,257  

EQUITY AND LIABILITIES

                 

Equity

                 

Share capital

        1,784     1,796  

Reserves

        941,707     996,380  

Translation differences

        (207,366 )   (164,675 )

Valuation adjustments

        (11,559 )   (16,799 )

Result attributable to the Parent

        43,661     (678 )

Non-controlling interests

        116,145     121,734  

Total equity

  Note 13     884,372     937,758  

Non-current liabilities

                 

Deferred income

        1,434     3,172  

Provisions

  Note 15     75,787     82,397  

Bank borrowings

  Note 16     132,821      

Obligations under finance leases

  Note 17     53,472     69,713  

Debt instruments

  Note 18     341,657     339,332  

Other financial liabilities

  Note 19     32,788     49,011  

Other non-current liabilities

  Note 21     25,030     3,536  

Deferred tax liabilities

  Note 22     77,379     65,142  

Total non-current liabilities

        740,368     612,303  

Current liabilities

                 

Provisions

  Note 15     40,570     33,095  

Bank borrowings

  Note 16     8,191     1,003  

Obligations under finance leases

  Note 17     12,999     12,920  

Debt instruments

  Note 18     10,937     10,938  

Other financial liabilities

  Note 19     52,524     88,420  

Payables to related parties

  Note 23     11,128     12,973  

Trade and other payables

  Note 20     256,823     192,859  

Current income tax liabilities

  Note 22     2,335     7,419  

Other current liabilities

  Note 21     103,570     90,569  

Total current liabilities

        499,077     450,196  

Total equity and liabilities

        2,123,817     2,000,257  

Notes 1 to 30 are an integral part of the consolidated financial statements

          The financial statements were approved by the Board and authorized for issue on 3 June, 2019.

Signed on behalf of the Board.

Pedro Larrea Paguaga
Director

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FERROGLOBE PLC AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENT FOR 2018, 2017 AND 2016

 
  Notes
  2018
US$'000

  2017
US$'000

  2016(*)
US$'000

 

Sales

  Note 25.1     2,274,038     1,741,693     1,576,037  

Cost of sales

        (1,447,354 )   (1,043,395 )   (1,043,412 )

Other operating income

        46,037     18,199     26,215  

Staff costs

  Note 25.2     (341,064 )   (301,963 )   (296,399 )

Other operating expense

        (283,930 )   (239,926 )   (243,946 )

Depreciation and amortization charges, operating allowances and write-downs

  Note 25.3     (119,137 )   (104,529 )   (125,677 )

Impairment losses

  Note 25.5     (58,919 )   (30,957 )   (268,089 )

Net (loss) gain due to changes in the value of assets

  Note 25.5     (7,623 )   7,504     1,891  

Gain (loss) on disposal of non-current assets

  Note 25.6     14,564     (4,316 )   340  

Bargain purchase gain

  Note 5     40,142          

Other losses

  Note 29         (2,613 )   (40 )

Operating profit (loss)

        116,754     39,697     (373,080 )

Finance income

  Note 25.4     5,374     3,708     1,536  

Finance costs

  Note 25.4     (62,022 )   (65,412 )   (30,251 )

Financial derivative gain (loss)

  Note 19     2,838     (6,850 )    

Exchange differences

        (14,136 )   8,214     (3,513 )

Profit (loss) before tax

        48,808     (20,643 )   (405,308 )

Income tax (expense) benefit

  Note 22     (24,235 )   14,821     46,695  

Profit (loss) for the year

        24,573     (5,822 )   (358,613 )

Loss attributable to non-controlling interests

  Note 13     19,088     5,144     20,186  

Profit (loss) attributable to the Parent

        43,661     (678 )   (338,427 )

Earnings per share

                       

        2018     2017     2016(*)
 

Profit (loss) attributable to the Parent (US$'000)

        43,661     (678 )   (338,427 )

Weighted average basic shares outstanding

        171,406,272     171,949,128     171,838,153  

Basic earnings (loss) per ordinary share (US$)

  Note 14     0.25     (0.00 )   (1.97 )

Weighted average basic shares outstanding

        171,406,272     171,949,128     171,838,153  

Effect of dilutive securities

        123,340          

Weighted average dilutive shares outstanding

        171,529,612     171,949,128     171,838,153  

Diluted earnings (loss) per ordinary share (US$)

  Note 14     0.25     (0.00 )   (1.97 )

(*)
The amounts for 2016 have been re-presented to show the results of the Spanish energy business within profit (loss) from continuing operations, as described in Note 1 to the consolidated financial statements.

   

Notes 1 to 30 are an integral part of the consolidated financial statements

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FERROGLOBE PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
FOR 2018, 2017 AND 2016

    2018
US$'000
    2017
US$'000
    2016
US$'000
 

Net profit (loss)

    24,573     (5,822 )   (358,613 )

Items that will not be reclassified subsequently to income or loss:

   
 
   
 
   
 
 

Defined benefit obligation

    3,568     4,511     4,297  

Tax effect

    (296 )        

Total

    3,272     4,511     4,297  

Items that may be reclassified subsequently to income or loss:

   
 
   
 
   
 
 

Arising from cash flow hedges

    10,006     (24,171 )    

Translation differences

    (45,435 )