Slide 1: Third Quarter 2015 Earnings Presentation
BEFESA BEFESA Third Quarter 2015 Earnings Presentation 25th November 2015
Slide 2: Forward-looking Statement
BEFESA Forward-looking Statement This presentation contains forward-looking statements and information relating to Befesa and its affiliates that are based on the beliefs of its management as well as assumptions made and information currently available to Befesa and its affiliates. Such statements r
Slide 3: Introduction
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Rafael Pérez Head of Strategy & Investor Relations 3
Slide 4: Business Highlights
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Javier Molina Chief Executive Officer 4
Slide 5: Befesa 3Q 2015 Highlights
BEFESA Befesa 3Q 2015 Highlights Continued solid growth in all three units. 3Q revenues of €173m, up 9% YoY. Lower commodity prices, new Bernburg plant and Solarca acquisition. Strong consolidated 3Q EBITDA of €35 million, up 4% YoY. Margins at 20%. 9M 2015 EBITDA up 21% YoY. Solid and stable financ
Slide 6: Zinc Business Performance
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Asier Zarraonandia Managing Director of Zinc Business 6
Slide 7: Zinc Business Performance
BEFESA Zinc Business Performance Volume in crude steel in line with the expectations similar to the previous year Operational Performance EAF Throughput Highlights - 151.038 tons of crude steel dust treated in 3Q Crude steel dust deliveries in line with 2015 (-3,2% vs 3Q 2014); 429.490 tons trea
Slide 8: Zinc Prices & Hedging
BEFESA Zinc Prices & Hedging After the upward trend seen during 1H 2015 Zinc prices decreased during 3Q ending the quarter around 1.500 €/t 2.200 € 2012: €1.703/t 2013: 1Q 2014: €1.700/t €1.550/t Zinc Prices 2.000 € During the 3Q 2015 zinc prices traded on average below 3Q 2014 ($1.913/t vs $2.311
Slide 9: Non-Zinc Business Performance
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Javier Molina Chief Executive Officer 9
Slide 10: Aluminum Performance
BEFESA Aluminum Performance Good performance mainly driven by stronger secondary alu volumes as well as salt slag volumes mainly driven by new plant in Germany Operational Performance Salt Slag/SPLs Recycled Highlights - 102.372 tons of salt slag/SPL recycled in 3Q 2015 Strong secondary aluminum
Slide 11: 2015 Growth Strategy – Aluminum and IES
BEFESA 2015 Growth Strategy – Aluminum and IES Bernburg ramp up on track. Successful acquisition and integration of Solarca into our IES segment. Gulf Project Progressing Aluminum Growth New Secondary Aluminum Plant in Bernburg (Germany) Ramp up of the plant on track (75% capacity loaded in 2015)
Slide 12: Financials
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Wolf Lehmann Chief Financial Officer 12
Slide 13: Zinc Financial Highlights
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Zinc Financial Highlights 13
Slide 14: Crude Steel Financial Highlights
BEFESA Crude Steel Financial Highlights Crude steel segment EBITDA decreased YoY mainly due to lower zinc prices during 3Q Revenues Highlights Crude Steel Revenues (€m) 2014 2015 Crude steel dust segment 3Q revenues decreased by 10% y/y mainly driven by: - Zinc blended price decreased by 5% - 5% d
Slide 15: Stainless Steel Financial Highlights
BEFESA Stainless Steel Financial Highlights Weaker quarter for stainless steel mainly driven by lower volumes Stainless Revenues (€m) Revenues Highlights 2014 2015 During 3Q 2015 Stainless steel dust segment revenues decreased by 40% compared to the same period of 2014 mainly coming from lower vol
Slide 16: Consolidated Zinc Financial Highlights
BEFESA Consolidated Zinc Financial Highlights Strong growth in revenues and EBITDA in the Zinc business unit Zinc Revenues (€m) 187,2 195,1 67,8 58,0 3Q '15 vs '14 9M '15 vs '14 Zinc EBITDA (€m) 37% 31% 34% 35% 63,3 67,8 24,9 18,1 3Q '15 vs '14 9M '15 vs '14 % 2014 EBITDA margin % 2015 EBITDA margin
Slide 17: Zinc Cash Flow & Liquidity
BEFESA Zinc Cash Flow & Liquidity Good operating results drive cash flow generation Operating activities: During 9M 2015 the net cash flows generated by operating activities amounted to €37,4 million (a €6m increase vs 9M 2014), driving the EBITDA increase in the three quarters, and lower taxes pa
Slide 18: Aluminum Financial Highlights
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Aluminum Financial Highlights 18
Slide 19: Aluminum Financial Highlights
BEFESA Aluminum Financial Highlights Strong 3Q 2015 EBITDA of €10m (12% margin) driven mainly by Bernburg contribution and higher Alu prices Aluminum Revenues (€m) 2014 2015 Revenues Highlights During 3Q 2015 revenues increased 32% (compared to 278,1 3Q 2014) mainly driven by better secondary alum
Slide 20: IES Financial Highlights
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook IES Financial Highlights 20
Slide 21: IES Financial Highlights
BEFESA IES Financial Highlights Strong quarter driven by contribution from Solarca –successfully acquired and integrated– and higher volumes in Sulfur IES Revenues (€m) 2014 2015 Revenues Highlights During 3Q 2015 revenues increased 15% (compared to 3Q 2014) mainly driven by the Solarca acquisitio
Slide 22: Consolidated Non-Zinc Financial Highlights
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Consolidated Non-Zinc Financial Highlights 22
Slide 23: Consolidated Non-Zinc Financial Highlights
BEFESA Consolidated Non-Zinc Financial Highlights Strong growth in revenues and EBITDA in the non-Zinc business Non-Zinc Revenues (€m) 376,2 279,1 115,1 87,4 3Q '15 vs '14 9M '15 vs '14 Non-Zinc EBITDA (€m) 9% 14% 11% 13% 47,6 31,8 16,7 8,2 3Q '15 vs '14 9M '15 vs '14 % 2014 EBITDA margin % 2015 EBI
Slide 24: Consolidated Financial Highlights
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Consolidated Financial Highlights 24
Slide 25: Consolidated Financial Highlights
BEFESA Consolidated Financial Highlights 9M ’15 revenues up 22% and EBITDA up 21% vs. 9M ‘14 Revenues (€m) Highlights 469,6 M€ 571,3 M€ 17% 3Q 2015 consolidated revenues amounted 17% to €173 million, +9% growth compared to 49% 158,4 M€ 173,1 M€ 43% the same period of 2014, mainly driven by 16% 41%
Slide 26: Consolidated P&L
BEFESA Consolidated P&L 3Q 2015 EBITDA Up 4% or €1,3 million vs. 9M 2014 Consolidated P&L (‘000 euros) BEFESA Profit & Loss Statement ('000 euros) 3Q 2014 3Q 2015 Change 9M 2014 9M 2015 Change Revenue 158.405 173.128 14.723 469.631 571.277 101.646 EBITDA 33.509 34.824 1.315 95.573 115.430 19.857 Dep
Slide 27: Consolidated Cash Flow Statement
BEFESA Consolidated Cash Flow Statement Operating activities: During 9M 2015 the net cash flows generated by operating activities amounted to €55,4 million (a €27,4 million increase compared to 9M 2014), mainly due to the better performance of all the business units in 2015 and an unusual impact i
Slide 28: Debt Structure & Net Debt Position – Sep YTD 2015
BEFESA Debt Structure & Net Debt Position – Sep YTD 2015 Solid and stable financing position at 3 levels (Zinc, Non-Zinc and Corporate) with total leverage at x3,6 Net Debt / LTM Total Net Sep 2015 EBITDA PIK Note 166 M€ Debt(1) 584 M€ x3,6(2) Befesa Medio Ambiente Ring fence structure Zinc Non Zinc
Slide 29: Business Outlook
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Javier Molina Chief Executive Officer 29
Slide 30: 2015 Business Focus
BEFESA 2015 Business Focus Main priorities for 2015 focused on parallel path of operational excellence and profitable growth for the next years Main priorities for 2015 on track • Expand plant and maintain leadership position of Befesa Zinc in South Korea, a key market for Befesa • Deliver our new s
Slide 31: Questions
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Questions 31
Slide 32: Appendix
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook 32
Slide 33: Consolidated P&L
BEFESA Consolidated P&L BEFESA Profit & Loss Statement ('000 euros) 3Q 2014 3Q 2015 Change 9M 2014 9M 2015 Change From continuing operations: Revenue 158.405 173.128 14.723 469.631 571.277 101.646 +/- Changes in inventories of finished goods and work in progress (1.928) (1.053) 875 (2.476) (1.611) 8
Slide 34: Consolidated Balance Sheet
BEFESA Consolidated Balance Sheet BEFESA Balance Sheet ('000 euros) Assets 30.09.15 31.12.14 Equity and liabilities 30.09.15 31.12.14 Equity: Non-current assets Attibutable to owners of the parent - Intangible assets Share capital 13 13 Goodwill 379.559 373.860 Reserve for valuation adjustments defe
Slide 35: Consolidated Cash Flow Statement
BEFESA Consolidated Cash Flow Statement BEFESA Cash Flow Statement ('000) 3Q 2014 3Q 2015 Change 9M 2014 9M 2015 Change Cash flows from operating activities: Profit (loss) for the period before tax 2.906 4.880 1.974 18.088 35.053 16.965 Adjustments due to: Depreciation and amortisation charge 16.689
Slide 36: Zinc Detailed Balance Sheet
BEFESA Zinc Detailed Balance Sheet BEFESA ZINC Balance Sheet ('000 Euros) Assets 30.09.2015 31.12.2014 Equity and Liabilities 30.09.2015 31.12.2014 Non-Current Assets: Equity: Intangible assets: Of the Parent: Goodwill 286.287 286.287 Share capital 25.010 25.010 Unrealized Asset and Liability Revalu
Slide 37: Zinc Detailed P&L
BEFESA Zinc Detailed P&L BEFESA ZINC Profit & Loss Statement ('000 euros) 3Q 2014 3Q 2015 Change 9M 2014 9M 2015 Change Revenue 67.822 58.021 (9.801) 187.185 195.127 7.942 Cost of sales (37.948) (35.706) 2.242 (113.562) (112.694) 868 Other operating income 579 2.703 2.124 6.072 3.918 (2.154) Gross P
Slide 38: Zinc Detailed Cash Flow
BEFESA Zinc Detailed Cash Flow BEFESA ZINC Cash Flow Statement ('000 euros) 3Q 2014 3Q 2015 Change 9M 2014 9M 2015 Change Cash Flows From Operating Activities Profit for the period before tax 12.544 6.231 (6.313) 26.105 30.810 4.705 Adjustments due to: Amortization/ Depreciation 4.624 4.580 (44) 12.