FerroGlobe Resources Group — Sensitivity Analysis & Scenario Planning
The sensitivity analysis and scenario planning — base, upside and downside cases across steel prices, volumes, margins and capital-deployment timing.
Section 16 · Business Plan
Sensitivity Analysis & Scenario Planning
The sensitivity analysis and scenario planning — base, upside and downside cases across steel prices, volumes, margins and capital-deployment timing.
16.1 Sensitivity Analysis
The base case has been stress-tested across eight key variables to
identify those with the largest leverage on Year 7 EBITDA. The tornado
chart below shows the ±1-standard-deviation impact of each variable,
holding others constant. The three highest-impact variables are trading
margin, volume achievement, and steel price — consistent with the
trading-led nature of the early-year P&L. Operational variables
(energy cost, capex) have meaningful but more contained impact.
16.2 Scenario Planning
Three scenarios — Base, Downside and Upside — have been modelled to
give investors a full distribution view of expected outcomes. Each
scenario combines a coherent set of macro and operating assumptions
(rather than independent one-variable sensitivities), allowing for
realistic correlation between drivers.
| Metric / Scenario | Downside | Base | Upside | Range |
|---|---|---|---|---|
| Revenue Y7 (USDb) | $3.0 | $4.3 | $5.4 | ±28% |
| EBITDA Y7 (USDm) | $510 | $870 | $1,180 | ±35% |
| EBITDA margin Y7 | 17.0% | 20.2% | 21.9% | ±10% |
| Net income Y7 (USDm) | $220 | $480 | $700 | ±50% |
| Equity IRR (7-yr) | 18.5% | 27.5% | 35.2% | ±28% |
| Project IRR (7-yr) | 13.8% | 19.8% | 25.6% | ±30% |
| Net debt / EBITDA Y7 | 1.1× | 0.4× | 0.0× | — |
| Payback (years) | 5.8 | 4.6 | 3.9 | ±20% |
16.3 Scenario Definitions
Downside scenario
Steel prices fall 15% below base; trading margin compresses to 3.0%
blended; volume achievement reaches 75% of base; ZAR/USD weakens to
22.0. Greenfield mill commissioning delayed 6 months. Equity IRR remains
positive at 18.5% — above target return for most institutional LPs.
Base scenario
Central planning case as described throughout this document. Equity
IRR 27.5%, project IRR 19.8%, payback 4.6 years.
Upside scenario
Steel prices 12% above base; trading margin reaches 6.5% blended;
volume achievement reaches 110% of base; greenfield mill commissioned on
schedule. Equity IRR 35.2%.
16.4 Stress Tests
Two specific stress tests have been applied to validate downside
resilience: (i) a “Severe Recession” test combining 25% steel-price
decline with 30% volume reduction for two years — the model retains
positive EBITDA and full debt-service coverage throughout; and (ii) a
“Greenfield Cancellation” test in which the Year 4–7 greenfield mill is
abandoned at decision-point — the trading + brownfield + service-centre
business alone delivers a still-attractive 17.5% equity IRR over 7
years.
Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of FerroGlobe Resources Group (Pty) Ltd.