Slide 1: 2023 Preliminary Earnings
2023 Preliminary Earnings 29 February 2024
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: Today's presenters
Today’s presenters Javier Molina Asier Zarraonandia Rafael Pérez Executive Chair CEO CFO Leading Befesa >20 years with Befesa >15 years with Befesa for >20 years 3 2023 Preliminary Earnings
Slide 4: Highlights of 2023
0 1 / Highlights of 2023
Slide 5: Executive summary
Executive summary Revenue Adjusted EBITDA Operating cash flow €1,181 million €182 million €117 million +4% yoy -15% yoy -15% yoy — Lower zinc and alu prices — Lower zinc and alu prices — Lower earnings + US zinc refining operations — Unfavourable zinc TC — Higher interest payments + Higher zinc hedg
Slide 6: Business & financial results
02 Business & financial results
Slide 7: EBITDA
EBITDA Total adjusted EBITDA decreased by 15% yoy to €182m in 2023, mainly due to lower zinc and alu prices, unfavourable TC, and higher coke price, partially offset by improved volumes, hedges and synergies Adjusted EBITDA1 2022 to 2023 Latest FY guidance: 214.6 13 “Around €180m” Overall solid volu
Slide 8: Steel Dust Recycling Services
Steel Dust Recycling Services Adjusted EBITDA decreased by 20% yoy to €134m in 2023, mainly due to lower zinc LME, unfavourable zinc TC and higher coke price, partially offset by improved volumes, hedges and synergies Adjusted EBITDA 2022 to 2023 yoy 2022 2023 change Revenue €m 730.3 785.6 +8% 168.6
Slide 9: Aluminium Salt Slags Recycling Services
Aluminium Salt Slags Recycling Services Adjusted EBITDA increased by 4% yoy to €48m in 2023; Lower cost (mainly lower energy prices) and improved volumes (Hanover) mostly offset by lower aluminium prices Adjusted EBITDA 2022 to 2023 yoy 2022 2023 change Revenue1 406.8 399.0 -2% — Salt Slags €m 77.3
Slide 10: Key volume drivers & impact on Befesa in 2023
Key volume drivers & impact on Befesa in 2023 Key volume drivers Befesa’s volumes % vs prior year • European Steel Dust plants at solid levels despite challenging steel production Crude steel production1 • Aluminium salt slags volumes grew yoy mainly driven by 0.2% 0.1% resumption of operations at H
Slide 11: The current decrease in zinc prices is one of the largest seen in the last 15 years
The current decrease in zinc prices is one of the largest seen in the last 15 years $4,530 (April ‘22) Peak $2,814 (March ‘08) $2,405 $2,467 Zinc LME1 (May ‘15) (Jan ‘20) $2,224 (May ‘23) C902 $1,774 $1,454 (March ‘20) (Jan ‘16) Trough $1,046 (Dec ‘08) Global financial Commodity COVID—19 2022 / cris
Slide 12: 2023 impacted by high TC in a very volatile zinc price environment
2023 impacted by high TC in a very volatile zinc price environment Zinc LME1 Zinc treatment charges (TC) Peak: $300 (2008 & 2020) $274 (2023) 2023 $2,649 L3y $3,046 L5y $2,791 Trough: $143 L10y $2,596 (2018) L15y $2,387 • Zinc LME decreased by 37% in 2023, • TC for 2023 was settled at $274/t, the se
Slide 13: Befesa's hedging strategy provides price visibility and lowers impact from zinc price volatility
Befesa’s hedging strategy provides price visibility and lowers impact from zinc price volatility • Befesa’s hedging strategy unchanged Zinc LME1 • 1—3 years forward • Targeting 60% to 75% of zinc equivalent volume • Befesa providing no collateral c. €2,650 • Befesa’s hedging strategy has Befesa’s c.
Slide 14: Coke price moderated in H2 but is still high; Gas price stabilised
Coke price moderated in H2 but is still high; Gas price stabilised around levels of 2021 Befesa’s energy price evolution by source Coke 2019/20 2021 2022 2023 • After reaching an all-time-high level in Q1 2023, Befesa’s coke price moderated during the rest of 2023 around 10% 250 250 below the 2022 l
Slide 15: Cash flow, net debt & leverage
Cash flow, net debt & leverage Cash on hand at €107m providing >€180m liquidity; Net debt increased to €604m driven by lower earnings; Net leverage of x3.32 Adjusted EBITDA to Total cash flow 2023 Total capex = €105m Hanover 182.0 recovery and -18.0 US operating -30.1 117.3 excellence -16.6 Henan &
Slide 16: Outlook & growth
| \ e : ey. | : | 1 aaa —— 0 3 / Outlook & growth
Slide 17: Outlook for 2024
Outlook for 2024 Return to growth path expected in 2024 • External pressures faced in 2023 were temporary and should ease in 2024 • Detailed earnings guidance to be provided in Q1 reporting 2023 Zinc Zinc Coke US China 2024 once TC have been settled TC hedges Zinc TC, • Zinc TC expected to settle in
Slide 18: Positive mid-term outlook; balancing capex across markets with different dynamics
Positive mid-term outlook; balancing capex across markets with different dynamics Favourable decarbonisation and EV macrotrends: - Shift towards EAF steel mills will increase the generation of steel dust - Transition to EV will drive higher aluminium demand Globally balanced in core businesses €110—
Slide 19: Well defined growth roadmap in execution
Well defined growth roadmap in execution • Market fundamentals remain strong and favourably support Befesa’s business model & growth plan Decarbonisation trend will drive increase of EAF steel production over the coming years in the key markets where Befesa operates EV trend will drive demand for al
Slide 20: Palmerton plant refurbishment progressing well to seize market growth in 2025
2 Palmerton plant refurbishment progressing well to seize market growth in 2025 Plant overview Palmerton, Pennsylvania • 2 kilns with c. 163 kt → 220 kt (post-refurbishment) EAF steel dust recycling capacity • Producing WOX as a marketable product Indicative timing and status H1 2025 Other Befesa EP
Slide 21: Growth opportunity in China is attractive and Befesa's plan is being adapted
Growth opportunity in China is attractive and Befesa’s plan is being adapted to current market challenges Challenging market environment in the short term Steel Utilisation • Crude steel production in 2023 stable yoy production Mt BOF rate 100 100% • EAF mills running at 55—60% versus 80 80% BOF at
Slide 22: Appendix & Investor's agenda
04 Appendix & Investor’s agenda
Slide 23: Key financials 2023 vs 2022
Key financials 2023 vs 2022 (€m, unless otherwise stated) Steel Salt Secondary Corporate & Total Dust Slags Aluminium eliminations Befesa Revenue1 785.6 86.3 360.2 -51.5 1,180.6 yoy change +55.3 / +7.6% +9.0 / +11.6% -15.6 / -4.2% -4.1 / - +44.6 / +3.9% Reported EBITDA 142.2 24.7 21.6 0.2 188.8 yoy
Slide 24: Key financials Q4 2023 vs 2022
Key financials Q4 2023 vs 2022 (€m, unless otherwise stated) Steel Salt Secondary Corporate & Total Dust Slags Aluminium eliminations Befesa Revenue1 180.2 25.9 89.0 -18.8 276.4 yoy change -16.8 / -8.5% +5.9 / +29.6% -0.6 / -0.7% -7.6 / - -19.1 / -6.4% Reported EBITDA 47.7 5.8 5.1 4.7 63.3 yoy chang
Slide 25: Multi-year trend – Key financials
Multi-year trend – Key financials1 (€m, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 Revenue 667.42 720.1 647.9 604.3 821.6 1,136.0 1,180.6 Reported EBITDA 153.0 176.0 159.6 123.5 189.6 234.9 188.8 Reported EBITDA 22.9%2 24.4% 24.6% 20.4% 23.1% 20.7% 16.0% margin % Adjusted EBITDA3 17
Slide 26: Operational data 2023 vs 2022 – Steel Dust Recycling Services
Operational data Q4 2023 vs 2022 – Steel Dust Recycling Services 2022 2023 yoy change EAF steel dust 1,193.8 1,194.8 +1.0 / +0.1% throughput (kt) EAF steel dust 76.8% 69.5% -731 bps avg. capacity utilisation (%) Waelz oxide 407.4 399.1 -8.3 / -2.0% (WOX) sold (kt) Zinc LME price 3,302 2,450 -852 / -
Slide 27: Operational data Q4 2023 vs 2022 – Steel Dust Recycling Services
Operational data Q4 2023 vs 2022 – Steel Dust Recycling Services Q4 2022 Q4 2023 yoy change EAF steel dust 296.2 305.0 +8.8 / +3.0% throughput (kt) EAF steel dust 75.6% 70.4% -521 bps avg. capacity utilisation (%) Waelz oxide 96.1 98.1 +2.0 / +2.1% (WOX) sold (kt) Zinc LME price 2,944 2,322 -622 / -
Slide 28: Operational data 2023 vs 2022 – Aluminium Salt Slags Recycling Services
Operational data Q4 2023 vs 2022 – Aluminium Salt Slags Recycling Services 2022 2023 yoy change Salt slags & SPL 322.1 360.8 +38.7 / +12.0% treated (kt) Salt slags & SPL 68.5% 76.8% +823 bps avg. capacity utilisation (%) Aluminium 160.6 168.2 +7.6 / +4.7% alloys produced (kt) Secondary alu 78.4% 82.
Slide 29: Operational data Q4 2023 vs 2022 – Aluminium Salt Slags Recycling Services
Operational data Q4 2023 vs 2022 – Aluminium Salt Slags Recycling Services Q4 2022 Q4 2023 yoy change Salt slags & SPL 82.2 103.0 +20.7 / +25.2% treated (kt) Salt slags & SPL 69.4% 86.9% +1,748 bps avg. capacity utilisation (%) Aluminium 38.7 42.4 +3.8 / +9.7% alloys produced (kt) Secondary alu 74.9
Slide 30: Multi-year trend – Operational data
Multi-year trend – Operational data 2017 2018 2019 2020 2021 2022 2023 EAF steel dust throughput 661.0 717.1 665.8 687.0 885.7 1,193.8 1,194.8 (kt) EAF steel dust average 84.7% 92.0% 80.7% / 83.2% 83.3%2 76.8% 69.5% capacity utilisation (%) 90.1%1 Waelz oxide (WOX) sold 217.8 240.9 217.6 239.2 291.0
Slide 31: Consolidated key financials
Consolidated key financials Adjusted EBITDA decreased by 11% yoy to €45m in Q4 2023; Lower zinc & alu prices, unfavourable zinc TC, partially offset by improved volumes, better hedges and lower energy prices Adjusted EBITDA1 Q4 2022 to Q4 2023 Q4 Q4 yoy 2022 2023 change Revenue €m 295.5 276.4 -6% 50
Slide 32: Steel Dust Recycling Services
Steel Dust Recycling Services Adjusted EBITDA decreased by 14% yoy to €32m in Q4 2023, mainly due to lower zinc prices and unfavourable zinc TC, partially offset by improved volumes, hedges and lower coke price Adjusted EBITDA Q4 2022 to Q4 2023 Q4 Q4 yoy 2022 2023 change Revenue €m 197.0 180.2 -9%
Slide 33: Aluminium Salt Slags Recycling Services
Aluminium Salt Slags Recycling Services Adjusted EBITDA increased by 3% yoy to €12m in Q4 2023; Lower energy prices mostly offset by lower aluminium prices Adjusted EBITDA Q4 2022 to Q4 2023 Q4 Q4 yoy 2022 2023 change Revenue1 98.7 98.6 flat — Salt Slags €m 20.0 25.9 +30% — Secondary Alu 89.6 89.0 -
Slide 34: Cash flow, net debt & leverage
Cash flow, net debt & leverage Cash on hand at €107m providing >€180m liquidity; Positive cash flow generation of €26m in Q4 2023 Adjusted EBITDA to Total cash flow Q4 2023 53.6 Total capex = €21m -8.9 45.2 18.2 -0.9 -20.6 -0.2 -6.9 25.9 -15 Maintenance -5 Productivity / Compliance Adjusted WC chang
Slide 35: Investor's agenda
Investor’s agenda Financial calendar Next investor conferences March 2024 Q2/Q3 2024 Annual Report 2023 London – Berenberg EU Opportunities Miami – BofA Global Metals, Mining and 21 March 2024 Conference 2024 Steel Conference 7 March – Berenberg 13-17 May – Bank of America Q1 2024 Statement & Conf.