Slide 1: Third Quarter 2021 Earnings Presentation
Third Quarter 2021 Earnings Presentation 28 October 2021
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements and information relating to Befesa and its affiliates that are based on the beliefs of its management, including assumptions, opinions and views of Befesa and its affiliates as well as information cited from third party sources. Such s
Slide 3: 01 Highlights
Electric arc furnace steel dust (EAFD) recycling plant at Asúa-Erandio, Spain 01 Highlights Javier Molina - CEO
Slide 4: 9M record EBITDA; AZR acquisition closed; MDAX
9M record EBITDA; AZR acquisition closed; ✓MDAX €136.8m €73.9m FY’21 guidance 9M’21 adjusted EBITDA 9M’21 Operating cash flow • FY adjusted EBITDA of around €195m, 62% up yoy (9M’20: €84.5m), €36.2m up yoy (9M’20: €37.8m) up +54% yoy 24% margin (vs. 19% in 9M’20) 17% or €20m up vs. 9M’19 €200.7m of
Slide 5: Financial results
Secondary aluminium production plant at Bernburg, Germany 02 Financial results Wolf Lehmann - CFO
Slide 6: Consolidated key financials
Consolidated key financials 9M adjusted EBITDA at €136.8m, all-time-high, driven by strong base metal prices and continued solid volumes with plant utilisation at pre-pandemic levels; Acquired Zinc US operations delivering as expected Adjusted EBITDA bridge 9M 2020 to 2021 (€m) +€52.3 / +61.8% 1) 13
Slide 7: Steel Dust Recycling Services
Steel Dust Recycling Services 9M adjusted EBITDA at €102.7m, performing at strongest earnings level with 34% margin, driven mainly by favourable zinc prices; Overall plant utilisation continued at pre-pandemic levels; Acquired US operations delivering as expected Adjusted EBITDA bridge 9M 2020 to 20
Slide 8: Aluminium Salt Slags Recycling Services
Aluminium Salt Slags Recycling Services 9M EBITDA at €34.1m, delivered record level results, up 90% yoy; Mainly driven by higher aluminium metal prices yoy; Overall plant utilisation continued at solid pre-pandemic levels ≥ 90% EBITDA bridge 9M 2020 to 2021 (€m) +€16.1 / +89.6% -3 35.1 19 Inflation
Slide 9: Cash flow, net debt & leverage
Cash flow, net debt & leverage Continued strong liquidity of more than €275m including record €201m cash on hand, post-dividend & acquisition funding; Net leverage of x2.33 at Q3’21 closing, improved vs. x3.10 at YE’20 and x3.31 at Q3’20 Adjusted EBITDA to total cash flow (€m) €22 China local loans
Slide 10: Zinc prices & hedging strategy
Zinc prices & hedging strategy Non-US operations fully hedged up to & incl. Oct’24, c. 3 years; US operations hedged up to & incl. Apr’24, c. 2.5 years; Improving earnings & cash flows visibility Zinc LME price vs. Befesa’s hedging prices (€/t) Zinc LME1) Befesa’s hedges2) Average blended €2,317 c.
Slide 11: Growth projects & outlook
Nanjing City, location of Befesa China’s HQ 03 Growth projects & outlook Javier Molina - CEO
Slide 12: Befesa closed AZR acquisition on 17 August
Befesa closed AZR acquisition on 17 August; Operations delivering as expected BEFESA #1 Europe (Steel Dust & Salt Slags) a US / North American leader (Steel Dust) #1 Asia1) (Steel Dust) Global leader1) in EAFD recycling EAFD recycling EAFD recycling Zinc refining EAFD annual installed recycling capa
Slide 13: China I and China II plants
China I Changzhou plant, Jiangsu province 1 Key facts of the plant: • 1st EAFD recycling plant in China • Capacity to recycle 110kt EAFD p.a. • Total investment: c. €42m • Location: Changzhou (Jiangsu province) Status update: Long-term financing closed Jul’20 Construction completed, on time & on bud
Slide 14: Befesa FY'21 EBITDA guidance & assumptions
Befesa FY’21 EBITDA guidance & assumptions FY’21 guidance range revised upwards to reflect records YTD earnings and c. 4 months of acquired Zinc US operations; Strong base metal prices offsetting higher inflation / energy cost trends around €195m Adjusted EBITDA (new record, up from previous €165-19
Slide 15: ESG at Befesa
EAFD recycling plant at Gyeongju, South Korea 04 ESG at Befesa Javier Molina - CEO
Slide 16: Sustainability at Befesa
Sustainability at Befesa Key player within the circular economy, with c. 2 million tonnes recycled and c. 1.5 million tonnes of valuable materials recovered annually, that contributes significantly to increase efficiency of raw material use in the metals industry and promotes the transition towards
Slide 17: Investor agenda & appendix
Waelz kiln at EAFD recycling plant in Gyeongju, South Korea 05 Investor agenda & appendix
Slide 18: Investor agenda
Investor agenda Financial calendar Next investor conferences 2022 Q4 2021 Q1 2022 Prelim. YE Results 2021 & Conf. Call London – Global Natural Resources ODDO BHF Forum 25th Edition (virtual) Thursday, 24 February 2022 Conference 2021 6 & 7 January 2022 – ODDO BHF 11 November 2021 – Goldman Sachs Ann
Slide 19: Q3 2021/20 – Key financials
Q3 2021/20 – Key financials (€m, unless otherwise stated) Steel Salt Secondary Corporate & Total Dust Slags Aluminium eliminations Befesa Revenue1) €108.7 €20.0 €72.0 -€10.8 €190.0 yoy change +€27.0 / +33.0% +€3.6 / +22.1% +€18.0 / +33.3% -€3.8 / - +€44.8 / +30.9% Reported EBITDA €29.9 €4.8 €4.5 -€4
Slide 20: 9M 2021/20 – Key financials
9M 2021/20 – Key financials (€m, unless otherwise stated) Steel Salt Secondary Corporate & Total Dust Slags Aluminium eliminations Befesa Revenue1) €304.1 €57.3 €244.3 -€31.5 €574.2 yoy change +€46.8 / +18.2% +€3.0 / +5.6% +€85.1 / +53.4% -€7.1 / - +€127.8 / +28.6% Reported EBITDA €99.2 €15.9 €18.2
Slide 21: Multi-year trend – Key financials
Multi-year trend – Key financials1) (€m, unless otherwise stated) 2017 2018 2019 2020 Revenue €667.42) €720.1 €647.9 €604.3 Reported EBITDA €153.0 €176.0 €159.6 €123.5 Reported EBITDA 22.9%2) 24.4% 24.6% 20.4% margin Adjusted EBITDA €172.43) €176.0 €159.6 €127.04) Adjusted EBITDA 25.8%2) 24.4% 24.6%
Slide 22: Q3 2021/20 – Operational data – Steel Dust Recycling Services
Q3 2021/20 – Operational data – Steel Dust Recycling Services Q3 2020 Q3 20211) yoy change EAFD 160.7 222.6 +61.9 / +38.5% throughput (kt) EAFD average 77.5% 77.7% +28 bps capacity utilisation (%) Waelz oxide 55.9 73.2 +17.3 / +30.9% (WOX) sold (kt) Zinc LME price €1,997 €2,538 +€541 / +27.1% (€/t)
Slide 23: 9M 2021/20 – Operational data – Steel Dust Recycling Services
9M 2021/20 – Operational data – Steel Dust Recycling Services 9M 2020 9M 20211) yoy change EAFD 501.9 563.3 +61.4 / +12.2% throughput (kt) EAFD average 81.2% 81.0% -26 bps capacity utilisation (%) Waelz oxide 182.4 192.6 +10.2 / +5.6% (WOX) sold (kt) Zinc LME price €1,905 €2,414 +€509 / +26.8% (€/t)
Slide 24: Q3 2021/20 – Operational data – Aluminium Salt Slags Recycling Services
Q3 2021/20 – Operational data – Aluminium Salt Slags Recycling Services Q3 20201) Q3 2021 yoy change Salt Slags & 102.6 107.2 +4.7 / +4.5% SPL treated (kt) Salt Slags & 77.0% 94.5% +1,754 bps SPL avg. cap. utilisation (%) Aluminium 44.4 42.9 -1.5 / -3.5% alloys produced (kt) Secondary Alu 86.2% 83.0
Slide 25: 9M 2021/20 – Operational data – Aluminium Salt Slags Recycling Services
9M 2021/20 – Operational data – Aluminium Salt Slags Recycling Services 9M 20201) 9M 2021 yoy change Salt Slags & 333.0 303.0 -30.0 / -9.0% SPL treated (kt) Salt Slags & 83.9% 90.0% +609 bps SPL avg. cap. utilisation (%) Aluminium 123.7 142.4 +18.7 / +15.1% alloys produced (kt) Secondary Alu 80.6% 9
Slide 26: Multi-year trend – Operational data
Multi-year trend – Operational data 2017 2018 2019 2020 EAFD throughput (kt) 661.0 717.1 665.8 687.0 EAFD average capacity 84.7% 92.0% 80.7% / 90.1%1) 83.0% utilisation (%) Waelz oxide (WOX) sold 217.8 240.9 217.6 239.2 (kt) Zinc LME price (€/t) €2,572 €2,468 €2,276 €1,979 Zinc hedging €1,876 €2,051
Slide 27: Consolidated key financials
Consolidated key financials Q3 adjusted EBITDA at €42.7m, up 46% yoy, mainly driven by strong metal prices; Contribution from acquired Zinc US operations (six weeks of Q3); Volumes continued solid with plant utilisation at pre-pandemic levels; EBITDA above pre-pandemic levels (up 15% vs. Q3’19) Adju
Slide 28: Steel Dust Recycling Services
Steel Dust Recycling Services Q3 adjusted EBITDA at €33.5m; Favourable zinc LME prices & TC, partially offset by lower zinc hedging prices; Contribution from acquired US operations (c. 6 weeks of Q3); EBITDA above pre-pandemic levels (up 11% vs. Q3’19) Adjusted EBITDA bridge Q3 2020 to 2021 (€m) +€9
Slide 29: Aluminium Salt Slags Recycling Services
Aluminium Salt Slags Recycling Services Q3 EBITDA at €9.2m, up 61% yoy, mainly driven by strong aluminium metal prices yoy; Better salt slags & SPL partially offset by lower alu alloys; EBITDA above pre-pandemic levels (up 52% vs. Q3’19) EBITDA bridge Q3 2020 to 2021 (€m) +€3.5 / +60.8% -3 9.2 6 5.7
Slide 30: Cash flow, net debt & leverage
Cash flow, net debt & leverage Continued strong liquidity of more than €275m including record €201m cash on hand, post-dividend & acquisition funding; Net leverage of x2.33 at Q3’21 closing, improved vs. x3.10 at YE’20 and x3.31 at Q3’20 €4 China local loans Adjusted EBITDA to total cash flow (€m) -