Earnings Call Transcript
Ferroglobe PLC (GSM)
Earnings Call Transcript - GSM Q4 2025
Operator, Operator
Good morning, ladies and gentlemen, and welcome to Ferroglobe's Fourth Quarter and Full Year 2025 Earnings Call. As a reminder, this conference call may be recorded. I would now like to turn the call over to Alex Rotonen, Ferroglobe's Vice President of Investor Relations. You may begin.
Alex Rotonen, Vice President of Investor Relations
Good morning, everyone, and thank you for joining Ferroglobe's Fourth Quarter and Full Year 2025 Conference Call. Joining me today are Marco Levi, our Chief Executive Officer; and Beatriz Garcia-Cos, our Chief Financial Officer. Before we get started with some prepared remarks, I'm going to read a brief statement. Please turn to Slide 2 at this time. Statements made by management during this conference call that are forward-looking are based on current expectations. Factors that could cause actual results to differ materially from these forward-looking statements can be found on Ferroglobe's most recent SEC filings and the exhibits to those filings, which are available on our website at ferroglobe.com. In addition, this discussion includes references to EBITDA, adjusted EBITDA, adjusted gross debt, adjusted net debt and adjusted diluted earnings per share, among other non-IFRS measures. Reconciliations of those non-IFRS measures may be found in our most recent SEC filings. We'll be participating in the BMO Metals, Mining and Critical Materials Conference in Hollywood, Florida, on February 23 and 24. We hope to see you there. With that, I'll turn the call over to Marco.
Marco Levi, CEO
Thank you, Alex, and thank you all for joining us today. We appreciate your continued interest in Ferroglobe. While 2025 presented significant external challenges, including muted demand, tariff uncertainty, delayed trade measures, and elevated levels of predatory imports, it was a year in which Ferroglobe made important strategic progress and substantially strengthened its position for future growth. Most importantly, we achieved significant and impactful trade measures in both the European Union and the United States. In Europe, the European Commission voted to protect the Ferroglobe industry by implementing safeguards targeting a 25% reduction in imports relative to the baseline of average imports by country and product from 2022 through 2024. During those years, imports of ferrosilicon averaged approximately 450,000 tons, and manganese imports averaged approximately 900,000 tons. These safeguards create substantial opportunity for domestic producers, including Ferroglobe, to gain market share under a more balanced competitive framework while ensuring security of EU supply chains for critical and strategic materials. We are encouraged by the European Commission's advocacy to support and strengthen the long-term sustainability of the local industry. To further enhance the new manufacturing base and drive economic growth, the main Europe pledge was signed by more than 1,000 business leaders. This is similar to the Buy American pledge, encouraging increased use of products with domestic content. In the United States, the International Trade Commission ruled in favor of imposing antidumping and countervailing duties on ferrosilicon imports from Brazil, Kazakhstan, and Malaysia after having ruled similarly against Russia in 2024. These decisions meaningfully improve the long-term outlook for the U.S. ferrosilicon market. To capitalize on improving production economics, we have converted three furnaces from silicon metal to ferrosilicon; one in the U.S. and two in Europe. This highlights the benefits of our diversified global footprint, which enables us to optimize production in response to market dynamics and geopolitical factors. With respect to silicon metal in the U.S., the case was delayed due to the government shutdown. Prior to the shutdown, the preliminary decision in September indicated strong measures against Angola, Australia, Laos, Norway, and Thailand. The preliminary combined antidumping and countervailing duties range from 21% for Norway to 334% for the others. We now expect the final decision on ongoing measures in Thailand later today, with Australia and Norway anticipated in June. Operationally, we executed with discipline and focus. Through proactive cost control measures, including a hiring freeze and reduced discretionary and capital expenditures, we successfully navigated through weaker demand and lower pricing while maintaining a solid balance sheet. After the safeguard announcement on November 18, ferrosilicon index prices in Europe jumped approximately 20%. While the pricing of pharmaceuticals has retreated some in recent weeks, it is still up more than 10% since the safeguard announcement. Our outlook for silicon metal remains more measured due to its exclusion from new safeguards and continued aggressive imports from China and increasingly from Angola. In the U.S., the silicon market is expected to grow modestly according to CRU. We are actively assessing longer-term opportunities associated with our idled operations in Venezuela. This site includes three large furnaces and a manganese alloy furnace, originally designed to produce silicon metal, which can be converted back to silicon metal. In addition, the facility includes a Soderberg-based plant that could be used to produce electrodes. While it is too early to determine the timing and conditions of the infrastructure and operations, the asset base represents a potential opportunity for the future. Given Venezuela's proximity to the U.S. market, this opportunity could become strategically meaningful over time. We also took important steps to enhance our long-term cost structure and operating flexibility by signing a new competitive 10-year energy agreement in France effective January 1, 2026. In addition to competitive energy prices, this agreement provides greater flexibility, enabling us to produce up to twelve months a year in France. Combined with the implementation of safeguards, this flexibility meaningfully improves the earnings potential of our business by allowing higher volumes to leverage our fixed operating costs. Beyond our core operations, we continued to invest in long-term opportunities, increasing our total investment in technology development to $10 million in 2025, reflecting strong technological progress in the development of advanced silicon-rich EV batteries. In addition to ongoing collaboration with automotive OEMs, Corcel is expected to begin initial shipments to defense and robotics customers in the first quarter of this year. Furthermore, we are in the process of finalizing a multiyear supply agreement with a partner. For those who are new to the Ferroglobe story, silicon-based batteries offer lower-cost options with increased capacity, longer driving range, faster charging, and perhaps most importantly, reduced reliance on graphite, of which more than 90% is produced in China. We believe this technology has the potential to become increasingly strategic over time. Alongside these trade developments and operational enhancements, we continue to execute on shareholder-friendly capital allocation. We increased our first quarter 2025 dividend by 8% and we are increasing it again by 7% to $0.015 per share starting in the first quarter of 2026. In addition, during the early part of 2025, we selectively executed discretionary share repurchases, acquiring 1.2 million shares at an average price of $3.55 per share. Looking forward to 2026, Ferroglobe is well positioned to benefit from the cumulative impact of the trade actions. We expect most of our segments to post considerable growth in 2026, and we anticipate revenues improving to a range of $1.5 billion to $1.7 billion, an increase of 20% at the midpoint over 2025. This expectation is driven primarily by strong volume growth in the ferroalloys and manganese-based alloys segments. Our shipments increased by 13% to 165,000 tons on the strength of silicon-based and manganese-based alloys, resulting in a 6% increase in quarterly revenue to $329 million. Our adjusted EBITDA declined slightly to $15 million while our free cash flow was negative $19 million. Beatriz will provide more detailed comments in your section. Next slide, please. I'll update on our segments, starting with silicon metal on Slide 5. This may sound like a repeat of last quarter, but the situation remains essentially unchanged. Demand is still weak across our regions, and Europe is still plagued by unabated predatory imports from China, which roughly doubled in 2025, as well as by rising imports from Angola, which are up nearly fourfold, driving prices to unsustainable levels. As a critical and strategic material, the European Commission should ensure sufficient production to meet basic demand. Overall, volumes and revenues declined by approximately 3% due to an 8% decline in U.S. shipments, partially offset by a 5% increase in shipments year-over-year. It is important to note that the shipments in the fourth quarter were up from a very weak third quarter. We idled our EU silicon metal plants in the fourth quarter due to extremely low unprofitable prices. Within the silicon metal segment, the chemical sector is performing better in relative terms, as highlighted by the recent recovery in aluminum prices compared to the weak polysilicon sector. The U.S. index prices rose a modest 2% in the fourth quarter over the third quarter. EU prices declined by 7%, primarily due to imports. For the year, European prices are down by one-third, while U.S. index is up less than 2%. In the U.S., we expect the volumes to improve in the second half of 2026 as the antidumping and anti-circumvention measures are expected to be finalized in February and June. The story is quite different in our other product segments. Globally, silicon-based alloys had a very strong fourth quarter. Total volumes increased by 19% to 51,000 tonnes, with EU and North America increasing by 25% and 14%, respectively. Pricing trends were mixed in the fourth quarter. The EU ferrosilicon index rebounded strongly in the quarter, rising 22% to EUR 1,495 from Q3, driven by the implementation of safeguards in November. In the U.S., the ferrosilicon index retreated a modest 4% during the quarter. For the full year, the European index gained 12%. The U.S. index is down less than 2% for the year. Overall, we are optimistic that 2026 will be a stronger year for total silicon-based alloy sales for Ferroglobe. We have already booked incremental business for 2026 in Europe and the U.S. An additional catalyst for the second half of the year is expected from enhanced EU steel safeguards with a proposal to reduce import quotas by 50% and double tariffs to 50% for exceeding the quotas. It is anticipated that domestic production will be ramped up as a result. Next slide, please. Our manganese segment reported another strong quarter with a 16% volume increase to 81,000 tonnes, up from 70,000 tons in the third quarter. We benefit from a larger customer base as well as safeguards. EU sales, which account for more than 90% of our manganese volumes, grew 18%. Manganese alloy index prices improved substantially in the fourth quarter with ferromanganese and silicomanganese increasing 16% and 21%, respectively. The combination of solid demand from our European steel customers, whose business is expected to grow by 3% in 2026, should propel a robust volume increase in 2026. Accordingly, we are optimistic about the European market opportunity for manganese this year. I would now like to turn the call over to Beatriz Garcia-Cos, our Chief Financial Officer, to review the financial results in more detail.
Beatriz García-Cos Muntañola, CFO
Thank you, Marco. Please turn to Slide 9 for a review of the fourth quarter income statement. Fourth quarter sales grew 6% over the prior quarter to $329 million, while raw material costs increased 23%, excluding the $40 million impact of pricing and power purchase agreements. Fourth quarter raw materials and energy as a percentage of sales increased from 58% to 67%, primarily due to temporary pricing in France, again, excluding the prior pricing agreements. These agreements are mark-to-market using fair value, given the long-term nature of our EDF contract which accounts for the majority of the agreement impact. We will continue to strip out market-to-market volatility to provide a clearer view of our underlying operational performance. A strong silicon-based alloys and manganese-based alloys volume drove the increased sales with quarter-over-quarter volumes increasing by 19% and 16%, respectively. Silicon metal volumes declined by 3%. Volume improvements were partially offset by a 6% decline in the average selling price of silicon-based alloys and manganese-based alloys, with silicon metal prices essentially flat. Adjusted EBITDA declined 20% from the prior quarter to $15 million versus $18 million. Adjusted EBITDA margin declined to 4%, driven by lower prices and elevated costs as a result of pricing in France. Moving to Product segment adjusted EBITDA bridges, silicon metal revenue declined 3% sequentially to $96 million in Q4, driven by a 3% decrease in shipments to 33,000 tons. The average selling price was essentially flat at $2,157 per ton. Volumes remain constrained due to soft markets in the U.S. by Chinese and Angolan dumping of silicon metal in the European Union. Silicon metal adjusted EBITDA declined from $12 million to $1 million in Q4, with margins decreasing to 1%. The margin compression was primarily due to costs in France, slightly offset by improved costs in North America. Next slide, please. Silicon-based alloys revenue grew 12% to $104 million, driven by a 19% sequential increase in volumes to 51,000 tons, partially offset by a 6% decline in average selling prices to $2,020 per ton. Adjusted EBITDA increased to $60 million in the fourth quarter from $12 million in the third quarter. Margins expanded by 160 basis points to 15%. The improvement in adjusted EBITDA and margins results from lower costs in Spain, partially offset by early season costs in France. Manganese-based alloys revenue increased 10% to $93 million from $84 million in the prior quarter. Improvement was primarily due to a 16% increase in volumes to 81,000 tons. Fourth quarter average selling price declined 6% to $1,147, mainly due to a lag versus index prices. Adjusted EBITDA in the fourth quarter doubled to $9 million, while adjusted EBITDA margins increased from 5% to 9%. This margin expansion was primarily driven by improved performance in Norway and higher overall volumes. Next slide, please. Adjusted EBITDA for the full year was $28 million, down from $154 million in 2024, and the adjusted EBITDA margin declined to 2%. The price decline driven by weak demand and increased imports to Europe had a significant impact on adjusted EBITDA, accounting for more than 80% or $104 million of the decline. Reduced volumes accounted for another 16% of the EBITDA decline. Cost impact on adjusted EBITDA was negligible, while head office and non-core business detracted less than $3 million from adjusted EBITDA. There are lots of details on this slide. So I will just highlight a few of the most important items. For the full year, we generated $51 million in cash from operations, driven by a $48 million improvement in net working capital. We curtailed CapEx by $60 million to $63 million in 2025. For the year, our free cash flow was negative $12 million. During the fourth quarter, we consumed $4 million in operating cash flow due to weak EBITDA and an increase in net working capital of $8 million. For the year, we reduced our net working capital by $48 million, in line with our target of $50 million. The energy rebate was $7 million for the fourth quarter. As we operate under the new contract in France in 2026, we don't expect energy rebates going forward, which will help align our adjusted EBITDA generation more closely with our cash flow. Fourth quarter capital expenditures totaled $14 million, representing a $5 million reduction versus the third quarter. Despite the headwinds in 2025, our balance sheet remains strong. In total, we paid $10.5 million in dividends during the year, and we are again increasing our dividend starting in the first quarter of 2026. Our quarterly dividend will increase 7% to $0.15 per share, and it will be paid on March 30 to shareholders of record on March 23. While we did not repurchase any shares in the second half, we bought back 1.3 million shares in the first half. Our discretionary share repurchase plan remains in place. Our net debt position increased to $30 million in 2025, and we remain in a solid financial position to support growth in 2026. We reduced our 2025 CapEx by 20% to $63 million. At this time, I will turn the call back to Marco.
Marco Levi, CEO
Thank you, Beatriz. Before opening the call to Q&A, I'd like to provide key takeaways from today's presentation on Slide 15. 2025 was a year of important progress for Ferroglobe. The trade measures secured in Europe and in the United States represent a clear positive shift in our markets, particularly in Ferroglobe. Europe safeguards and U.S. antidumping and countervailing duty rulings significantly improved competitive conditions, supported pricing, and gave us increased confidence in a much stronger market environment in 2026. At the same time, we continue to execute a disciplined shareholder-friendly capital allocation strategy. Despite the challenging macro backdrop, we increased our dividend during 2025, completed selective share repurchases, and have announced another dividend increase beginning in the first quarter of 2026. These actions underscore our confidence in the business and our focus on delivering consistent shareholder returns. We have also taken important steps to enhance the economics and flexibility of our operations. The new long-term energy agreement in France, combined with our ability to shift production from silicon metal to ferrosilicon, allows us to optimize volumes, leverage fixed costs better, and respond efficiently to changing market conditions across our global footprint. At the same time, we managed through a difficult demand and pricing environment in 2025 with discipline and focus. Proactive cost control, strong execution, and a solid balance sheet allowed us to navigate near-term headwinds while strengthening the foundation for future growth. Overall, we believe Ferroglobe is exceptionally well positioned for 2026 and beyond. With improving market fundamentals, increased confidence driven by trade actions, and a more flexible and efficient operating platform, we see a clear path to stronger performance and long-term value creation for our shareholders. Operator, we are ready for questions.
Operator, Operator
Our first question comes from Martin Englert from Seaport Research Partners.
Martin Englert, Analyst
Hello. Good day, everyone. Wanted to touch on volume expectations across the three businesses for 2026. And then also the plan for the EU silicon assets. I know you provided some detail about furnaces converting over to ferrosilicon, but what remains vital there? And is it to remain idle for the foreseeable future, but any type of goalpost for volumes on silicon metal in 2026, silicon-based alloys, and manganese-based alloys would be helpful.
Marco Levi, CEO
Yes. Thank you, Martin. Let me try to address your first question on volumes and then I move to the asset. Starting from Europe, the safeguard basically on ferrosilicon and certain products frees up 25% of imports that were 450,000 tons in 2025. So 25%, about 100,000, 110,000 tons of these products are now available for EU 27 producers. Well, for the imports, it was under 100,000 tons. So when you calculate 25% of that, you end up with 250,000 tons available for EU 27 producers. Of course, this pie will be shared among local producers. Assuming that safeguards are controlled and implemented in a proper way. When you go to the U.S., I think we are at the end of the period where inventories mainly of Russian products, but also other products have been weighing on volumes and also price recovery. So we expect some gains in ferrosilicon, and we see that already from our customer portfolio in the U.S. in the first quarter of 2026. In addition, I expect general trends will improve in Europe by about 3% across the year, mainly in the second part when the new safeguard measures imposed will apply with a further reduction of imports of 50% and an increase of tariffs to 50% for excess products. Aluminum is also expected to grow in Europe by a solid 3% next year. In the U.S., aluminum is expected to grow between 8% and 9%. And while steel is expected to start recovering, we have seen asset utilization in the U.S. recovering already in quarter 4 2025. These are the major indicators for volumes in ferroalloys. As for your second question, yes, we have converted one furnace in Beverly to ferrosilicon as of January and converted two furnaces in Europe, one in Salon and one in Loudon from silicon metal to ferrosilicon. Regarding the utilization of the other silicon metal furnaces in the U.S. and Canada, those are fully utilized, whereas in Europe, we are selectively restarting furnaces based on contracted demand.
Martin Englert, Analyst
Thank you. I appreciate all the detail and context there. I wanted to inquire about the component of minimum prices with EU safeguards for ferroalloys. Do you ultimately expect that domestic prices will gravitate to these levels? Or is there a dynamic within the EU footprint where there's sufficient capacity out there, and that there isn't necessarily maybe the case that we see clarity with the minimum price levels embedded in the safeguards?
Marco Levi, CEO
Yes. Well, the key question is the market, which has not performed great yet in Europe and the U.S. The key question is how much demand is going to ramp up or the different products. There is definitely enough capacity in the EU to cover the safeguards for all products. If you look at what has happened until now in Europe, ferrosilicon prices have jumped up by 22% in iron after the safeguards were announced. But then due to stock at traders and others, the price index has been going back and today is only 10% higher than the previous safeguard announcement. Different trends apply to manganese; manganese products have jumped up around 20% on average in terms of index prices. The price is holding, but is not improving. This is why I say that demand is critical. Again, I expect a major improvement of steel demand in Europe in the second half of 2026.
Martin Englert, Analyst
Do you know if your cranes manganese alloys facilities are still producing and supplying just to keep the region overall?
Marco Levi, CEO
Yes, they are, but at a very small rate due to reasons related to the supply chain, but also the conditions of the assets. Of course, I do not have too many insights about the status of the assets, but considering the number of years of work and the location of the assets, I think that even when we sign the safeguards, it will take a while before they ramp up to the previous rate.
Martin Englert, Analyst
Understood. Are you able to explain a little bit and provide some context about how the EU carbon credits function, what's covered with your allocated carbon credits for 2026 volumes, and maybe discuss if you have to go back to the carbon credit market for incremental volume output that you may gain from market shares due to safeguards?
Marco Levi, CEO
This is a question that requires about one day of explanation, but let me try to be brief. First of all, at the moment, we are impacted only for carbon ferromanganese, not for the other products. The way that the system works basically looks at the imported products and assesses the emissions of CO2 per ton required to produce these products, applying the cost of CO2 in Europe per ton, deducting whatever the supplier has paid in their own country for its CO2 emissions. So the overall idea is to tax CO2 exporters to Europe to favor domestic producers who are producing with lower CO2 emissions. Now all of this would be beneficial if there was a proper calculation of CO2 emissions for every kind of producer in the exporting countries. Additionally, Europe is trying to reduce our CO2 credits without having all the necessary data, potentially penalizing more European producers than importers. The commission is aware of that and they are working on it. Steel is highly involved in that. We will see how the situation develops. Again, our impact at the moment is minor due to the fact that the system is only applied to ferromanganese.
Martin Englert, Analyst
Okay. I appreciate all the color and detail and good job on the cost performance, given the fundamental volume headwinds.
Marco Levi, CEO
Thank you, Martin.
Operator, Operator
The question comes from Nicholas Giles from B. Riley Securities.
Nick Giles, Analyst
Thanks, operator. Good morning, guys. My first question was maybe just back to silicon metals exclusion from EU safeguards. I just wanted to get your perspective on what the use appetite might be to revisit an inclusion of silicon metal in those safeguards, and maybe any background you can provide on what prevented them from being included in the first place.
Marco Levi, CEO
Yes. Well, as you know, we asked for safeguards for silicon metal in Europe. The reasons why the official reasons why Europe did not support us on this request are related to the fact that silicon metal has a much stronger energy footprint, meaning it requires much more energy to be produced compared to other products. The other key element from a competition perspective is related to the fact that imports did not increase in absolute terms. They have increased in relative terms for the period considered because imports gained an 85% market share in EU 27 territory. But in absolute terms, they did not. These were the main two reasons. The third reason was about our argument that silicon metal and ferrosilicon are interchangeable, which is a topic of dispute because we can convert our furnaces to produce either. Our customers in steel can switch from ferrosilicon to silicon metal. The fact that they ruled out changeability was quite surprising given the amount of time and the number of meetings we spent explaining our business. The top reason was a stronger position of the chemical industry to protect silicon metal and a lack of agreement from Germany on trade measures. There was a combination of technical, political, and legal aspects that led to silicon metal being excluded from the safeguards. This situation doesn't make much sense for two reasons. One is that without protecting silicon metal, you basically don't protect ferrosilicon either, as it’s easy for users to replace ferrosilicon with silicon metal when the price difference is not significant. Silicon metal should be much more expensive because of the energy required to produce it. Thus, this exclusion really compromises the integrity of our industry, which should have been obvious to European authorities. Regarding the first part of your question, yes, we are actively working on new measures for silicon metal in Europe. The commission has asked us to submit our data, which we submitted in mid-December. We are awaiting their response to this data. We expect to pursue anti-dumping against the major exporters in Europe. China is the biggest player, and we are still determining how to address Angola, which follows a similar pricing policy to China. Given the combined volume from these two countries, it is evident that the volume coming from China or its subsidiaries has significantly increased. In a market that is declining, this influx of cheaper imports is distorting prices.
Nick Giles, Analyst
I really appreciate all that background and your perspective on the situation. I guess my follow-up question to that is ultimately there's plenty of reason for optimism in ferro silicon when you look at that segment on its own, but do you think these dynamics within silicon metal could ultimately weigh on pricing and volume expectations in ferrosilicon?
Marco Levi, CEO
It all depends on demand and appetite for reformulating critical metals when knowing that medium-term, it doesn't make sense to have silicon metal priced at a loss in Europe. As of now, our order portfolio has started increasing in Q4 for ferrosilicon both in the U.S. and in Europe.
Nick Giles, Analyst
Understood. My next question would just be over the past couple of years, especially with the change in the administration in the U.S., I think end market exposure has shifted, and then you kind of layer on the conversion of some of your silicon metal capacity to ferrosilicon. Is that shifting things more towards the steel market? So I was just hoping you could provide a high-level breakdown of your ultimate end-market exposure. I think about solar as an area that comes to mind that might be less relevant today than it was in the past. So I appreciate any color you can provide there.
Unknown Executive, Unknown
Well, today, when you look at our total business, I would say that 70% to 80% of our business is protected, and only 20% is not, which is basically silicon in Europe. So the high-level perspective is not surprising; the United States, apart from government shutdowns, is very favorable to protect critical and strategic minerals. This is why we are pursuing antidumping measures and are seeing progress. However, things are changing slowly in Europe, perhaps not at the speed we would prefer. In terms of political support, I can assure you that our case is a top priority for all stakeholders involved in federal legislation regarding silicon metal. The shift has decided to protect the industry—this includes chemical and other industries. The problem lies in the lack of unity in Europe compared to the United States, which creates continuous changes in responsibilities between the central government, the commission, and individual states. The latest case last week involved state officials expressing concerns about delays in decision-making, indicating a tendency to push back significant decisions to the states. This dedicated situation is contributing to lower momentum and slower actions.
Nick Giles, Analyst
Very good. Maybe just one quick one, if I could, for Beatriz. I want to commend you on really managing the cash balance during this trough, I mean, you still have a pretty healthy net cash position. So can you just touch on anything we should be focused on from a working capital perspective? CapEx was down year-on-year. Should we kind of expect CapEx to be more flat this year? Anything on the miles out just from a cash flow or capital allocation perspective.
Beatriz García-Cos Muntañola, CFO
Yes. Thank you for the question, Nick. As you've seen from the data, we've ended the year with a strong cash position. Nevertheless, I have to say that this difficult year came primarily from the release of working capital. We released $48 million in working capital, contributing to our total positive operating cash flow for the year. Looking into 2026, I think one of the focus areas we are working on and already starting to see results is the additional release of working capital. Even as we plan to produce higher volumes and sell a greater number of tons, this typically creates consumption of working capital. However, due to our measures in place, we plan to continue releasing additional working capital. If you recall, we mentioned in 2024 that we aimed to run the company with 20% less working capital. We are close to our target of $400 million and expect to continue reducing our working capital. So that is one angle. On the other side, we have a net debt position at the end of the year and expect to slightly improve this position as we progress through the year, supported by the release of working capital and cost reductions as Marco mentioned.
Nick Giles, Analyst
And then just CapEx, you would expect CapEx to be pretty similar to 2025 levels?
Beatriz García-Cos Muntañola, CFO
Yes. So this year, we went to $63 million for CapEx, which is already a 20% reduction versus 2024. In 2026, we expect similar or slightly lower levels of CapEx. This is primarily related to maintenance CapEx to support the base of the company.
Nick Giles, Analyst
Got it. Understood. Well, guys, I appreciate the update as always and continued best of luck.
Operator, Operator
This concludes today's question-and-answer session. I'll now hand back for closing remarks.
Marco Levi, CEO
Thank you, Heidi. We are encouraged by our accomplishments and positioning the company for a more robust market environment and much stronger financial performance in 2026. Thank you again for your participation. We look forward to updating you on the next call in May. Have a great day.
Operator, Operator
This concludes today's conference call. Thank you for participating. You may now disconnect.