Slide 1: Fiscal Year 2016 Earnings Presentation
BEFESA BEFESA Fiscal Year 2016 Earnings Presentation 6th April 2017
Slide 2: Agenda: Introduction, Highlights
BEFESA Business Steel Dust Aluminium Salt Business Introduction Financials Q&A Appendix Highlights Recycling Services Slags Services Outlook Wolf Lehmann Chief Financial Officer 2
Slide 3: 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 4: Agenda: Business Highlights
BEFESA Business Steel Dust Aluminium Salt Business Introduction Financials Q&A Appendix Highlights Recycling Services Slags Services Outlook Javier Molina Chief Executive Officer 4
Slide 5: Befesa 2016 Highlights
BEFESA Befesa 2016 Highlights Stable revenues of €612m, Adj EBITDA of €133m / +7%, and Adj EBIT of €103m / +9% Consecutive quarter by quarter Low alu prices have negatively recovery in EBITDA & EBIT impacted alu earnings and salt slag profits Completed non core divestitures Capacity utilization in K
Slide 6: Divestiture of IES Completed
BEFESA Divestiture of IES Completed Successfully completed divestiture of non-core low margin businesses Divestiture highlights • 1.5 years management effort to divest 4 non-core operations • Signed and closed • Sulfuric acid business in 4Q 2015 … to Ineos • IES Spain in 4Q 2016 … to Ditecsa • Plast
Slide 7: Befesa New Financial Segmentation Reporting
BEFESA Befesa New Financial Segmentation Reporting Financial Reporting by Segments adjusted to reflect new business perimeter after divestitures … Previous Financial Segmentation New Financial Segmentation Zinc Business Steel Dust Recycling Services(*) - Crude Steel - Stainless Steel Non Zinc
Slide 8: New Befesa Business at a Glance
BEFESA New Befesa Business at a Glance Befesa is the market leader in providing hazardous waste recycling services to the steel production and aluminium recycling industries 2016A Revenues: €612m 2016A Adj. EBIT: €103m 2016A Adj. EBITDA: €133m Salt Slag 2nd Employees: c.1,250 Services Salt Slag Alum
Slide 9: Agenda: Steel Dust Recycling Services
BEFESA Business Steel Dust Aluminium Salt Business Introduction Financials Q&A Appendix Highlights Recycling Services Slags Services Outlook Asier Zarraonandia Managing Director of Steel Dust Recycling Services 9
Slide 10: Consolidated Steel Dust Services – Financial Highlights
BEFESA Consolidated Steel Dust Services – Financial Highlights YoY increase in revenues and earnings driven by higher zinc prices, higher volumes and operational excellence on track … Revenues Highlights Steel Dust Services – Revenues YoY 4Q ’16 vs. ‘15 the revenues increased by €23 million or +38
Slide 11: Steel Dust Recycling Services – Operational Performance
BEFESA Steel Dust Recycling Services – Operational Performance Crude steel volume in line with expectations and slightly up YoY … Volumes & Capacity Utilization (K tons) EAF Dust Throughput Highlights 580,3 588,8 Solid 4Q crude steel dust volume. 150,8 159,0 Total year slightly above 2015. Goo
Slide 12: Zinc Prices & Hedging
BEFESA Zinc Prices & Hedging 4Q‘16 zinc prices maintained upward trend seen since begin of 2016 … 4Q average at ~€2.340 or +60% higher YoY … ending at ~€2.430 Zinc Prices 2H ‘16: 1H ‘17: €2.038/t €1.896/t During 4Q ‘16 LME zinc prices traded on avg $904/t above 4Q’ 15 5.000 € 2013: 2Q ‘14: 2010 &
Slide 13: Agenda: Aluminium Salt Slags Services
BEFESA Business Steel Dust Aluminium Salt Business Introduction Financials Q&A Appendix Highlights Recycling Services Slags Services Outlook Javier Molina Chief Executive Officer 13
Slide 14: Consolidated Alu Salt Slags Services – Financial Highlights
BEFESA Consolidated Alu Salt Slags Services – Financial Highlights Revenues and adjusted earnings in the Aluminium Salt Slags Services Business mainly impacted by weak alu alloy prices Alu. Salt Slags Services Revenues(*) Revenues Highlights 4Q 2016 revenues in line with 4Q 2015 even 360,2 324,4 t
Slide 15: Aluminium Salt Slags Services – Operational Performance
BEFESA Aluminium Salt Slags Services – Operational Performance Aluminium with new record volume in both, Salt Slags & 2nd Alu … Bernburg ramp up completed … but aluminium prices YoY decreased Volumes & Capacity Utilization (K tons) Salt Slags Recycled Highlights Strong salt slag and SPLs YoY vol
Slide 16: Agenda: Financials
BEFESA Business Steel Dust Aluminium Salt Business Introduction Financials Q&A Appendix Highlights Recycling Services Slags Services Outlook Wolf Lehmann Chief Financial Officer 16
Slide 17: Befesa Consolidated Financial Highlights
BEFESA Befesa Consolidated Financial Highlights Consecutive quarter over quarter recovery in 2016 continues … 4Q16 financial results at solid earnings levels, in line with expectations Highlights Befesa Consolidated Revenues Recovery from lows in 4Q´15 & 1Q´16 611,7 continuing … Ending 2016 with s
Slide 18: Befesa Consolidated P&L
BEFESA Befesa Consolidated P&L 4Q revenue +6%/€9 or +11%/€17 Normalized for `15 Sulfur divestiture … Total 2016 revenue (7%)/(€49) or (3%)/(€20) Normalized; Slow 1H Consolidated P&L (‘000 euros) BEFESA Reported Reported Profit & Loss Statement ('000 euros) 4Q 2015 4Q 2016 Change 2015 2016 Change Rev
Slide 19: Befesa Consolidated Cash Flow Statement
BEFESA Befesa Consolidated Cash Flow Statement Strong Cash Generation … Cash Up €5 YoY after (€19) Taxes, (€56) Debt Service, (€33) CapEx and Korea Final 20% Share Acquisition … Consolidated Cash Flow (‘000 euros) BEFESA Cash Flow Statement ('000) 4Q 2015 4Q 2016 Change 2015 2016 Change Cash flows f
Slide 20: Debt Structure & Net Debt Position – Dec YE 2016
BEFESA Debt Structure & Net Debt Position – Dec YE 2016 Divestiture of non core IES businesses improve leverage to x3,6 Pro-Forma Year End ´16 … PF Net Debt / PIK Note 162 M€ Total PF Net LTM Dec 2016 EBITDA Debt(1) 471 M€ x3,6(*) Befesa Medio Ambiente Ring fence structure Steel Dust Recycling Servi
Slide 21: Agenda: Outlook
BEFESA Business Steel Dust Aluminium Salt Business Introduction Financials Q&A Appendix Highlights Recycling Services Slags Services Outlook Javier Molina Chief Executive Officer 21
Slide 22: 2017 Main Priorities & Overview
BEFESA 2017 Main Priorities & Overview Main Priorities for 2017 Business & Market Overview Focus on profitable growth in core 2017 expected to be another good markets (Steel Dust & Alu Salt Slags) year for Befesa based on current … Continuing operational excellence market trends … Maintain a leadi
Slide 23: Q&A
BEFESA Business Steel Dust Aluminium Salt Business Introduction Financials Q&A Appendix Highlights Recycling Services Slags Services Outlook Q&A 23
Slide 24: Appendix
BEFESA Business Steel Dust Aluminium Salt Business Introduction Financials Q&A Appendix Highlights Recycling Services Slags Services Outlook Appendix 24
Slide 25: Steel Dust Recycling Services – Operational Data
BEFESA Steel Dust Recycling Services – Operational Data 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY 4Q 2016 vs 2015 2016 vs 2015 Change Change 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 (tons) (%) (tons) (%) Crude steel dust recycling Installed capacity1 tons 670.300 670.300 670.300 670.300 670.300 780.300
Slide 26: Aluminium Slags Services – Operational Data
BEFESA Aluminium Slags Services – Operational Data 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY 4Q 2016 vs 2015 2016 vs 2015 Change Change 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 (tons) (%) (tons) (%) Salt slags and SPLs recycling Installed capacity6 tons 609.000 609.000 609.000 609.000 609.000 609.000 6
Slide 27: Consolidated Steel Dust Services – Financial Highlights
BEFESA Consolidated Steel Dust Services – Financial Highlights YoY increase in revenues and earnings driven by higher zinc prices, higher volumes and operational excellence on track … Steel Dust Services – Revenues 253,9 281,1 81,3 58,7 2015 2016 4Q 2015 4Q 2016 Steel Dust Services – EBITDA 96,6 98,
Slide 28: Crude Steel – Financial Highlights
BEFESA Crude Steel – Financial Highlights Higher EBITDA and EBIT YoY in our crude steel segment mainly due to recovering zinc prices and higher WOX volumes sold Revenues Highlights Crude Steel Revenues YoY 4Q’16 vs. ‘15 the revenues increased by 209,8 238,0 €26 million or +56% mainly driven by: -
Slide 29: Stainless Steel – Financial Highlights
BEFESA Stainless Steel – Financial Highlights Lower stainless steel volumes paired with LME nickel prices and margin in the sale of alloys still depressed Revenues Highlights Stainless Revenues The stainless steel segment revenues decreased by -24,5% vs 4Q’15 and by -2% vs FY’15 mainly 44,0 43,1 d
Slide 30: Consolidated Alu Salt Slags Services – Financial Highlights
BEFESA Consolidated Alu Salt Slags Services – Financial Highlights Revenues and earnings in the Aluminium Salt Slags Services Business mainly impacted by weak alu alloy prices Aluminium Salt Slags Services Revenues(*) 360,2 324,4 80,2 79,2 2015 2016 4Q 2015 4Q 2016 Aluminium Salt Slags Services EBIT
Slide 31: Salt Slags – Financial Highlights
BEFESA Salt Slags – Financial Highlights Record volumes of salt slags … But aluminium alloy prices still depressed Revenues Highlights Salt Slags Revenues 4Q 2016 revenues in line with 4Q 2015 even though lower aluminium alloy average selling 84,0 78,9 prices (-2% or approx. -€30/t decrease … from
Slide 32: Secondary Aluminium – Financial Highlights
BEFESA Secondary Aluminium – Financial Highlights Record volumes of aluminium alloys produced and sold … But aluminium alloy prices still depressed Revenues Highlights Sec. Aluminium Revenues 4Q 2016 revenues in line with same period of 320,7 2015 even though lower aluminium alloy 285,5 average se
Slide 33: Befesa Consolidated Financial Highlights
BEFESA Befesa Consolidated Financial Highlights Consecutive quarter over quarter recovery in 2016 continues … 4Q16 financial results at solid earnings levels, in line with expectations Highlights Befesa Consolidated Revenues Recovery from lows in 4Q´15 & 1Q´16 661,1 631,2 611,7 continuing … Ending
Slide 34: Segmentation Overview – Key Metrics 2013 to 2016
BEFESA Segmentation Overview – Key Metrics 2013 to 2016 Steel Dust Recycling Services Operational data (Kt) 2013 2014 2015 2016 Financial data (M€) Crude Stainless Total Crude Stainless Total Crude Stainless Total Crude Stainless Total Steel dust treated 548 106 654 606 89 695 580 94 674 589 92 680
Slide 35: EBITDA & EBIT – Reported / Adjusted Reconciliation
BEFESA EBITDA & EBIT – Reported / Adjusted Reconciliation (Figures in million euros) 2013 2014 2015 2016 EBITDA Proforma-Adjusted Revenues 535,2 554,5 631,2 611,7 EBITDA (Bilbao Midco) 45,7 140,1 143,9 135,1 1H '13 Befesa EBITDA (1st Consolidation in Bilbao Midco) 55,2 IES divestitures - EBITDA impa
Slide 36: Consolidated Steel Dust Recycling Services – Detailed P&L
BEFESA Consolidated Steel Dust Recycling Services – Detailed P&L BEFESA ZINC Profit & Loss Statement ('000 euros) 4Q 2015 4Q 2016 Change FY 2015 FY 2016 Change Revenue 58.738 81.288 22.550 253.865 281.081 27.216 Cost of sales (42.747) (44.956) (2.209) (156.868) (162.794) (5.926) Other operating inco
Slide 37: Consolidated Steel Dust Recycling Services – Detailed B/S
BEFESA Consolidated Steel Dust Recycling Services – Detailed B/S BEFESA ZINC Balance Sheet ('000 Euros) Assets 31.12.2016 31.12.2015 Equity and liabilities 31.12.2016 31.12.2015 Non-current assets: Equity: Intangible assets: Of the Parent: Goodwill 278.357 278.357 Share capital 25.010 25.010 Other i
Slide 38: Consolidated Steel Dust Services – Cash Flow & Liquidity
BEFESA Consolidated Steel Dust Services – Cash Flow & Liquidity 2016 with positive cash flow driven by operating activities Operating activities: During the year 2016 the net cash flows generated by operating activities amounted to €48,9 million (a €14m increase vs 2015), driven by the EBITDA impr
Slide 39: Consolidated Steel Dust Recycling Services – Detailed CF
BEFESA Consolidated Steel Dust Recycling Services – Detailed CF BEFESA ZINC Cash Flow Statement ('000 euros) 4Q 2015 4Q 2016 Change FY 2015 FY 2016 Change Cash flows from operating activities Profit for the period before tax (14.701) 12.741 27.442 16.109 45.548 29.439 Adjustments due to: Amortizatio
Slide 40: Befesa Consolidated – Detailed P&L
BEFESA Befesa Consolidated – Detailed P&L BEFESA Profit & Loss Statement ('000 euros) 4Q 2015 4Q 2016 Change 2015 2016 Change From continuing operations: Revenue 152.900 161.916 9.016 661.082 611.687 (49.395) +/- Changes in inventories of finished goods and work in progress 2.019 (1.269) (3.288) (1.
Slide 41: Befesa Consolidated – Detailed Balance Sheet
BEFESA Befesa Consolidated – Detailed Balance Sheet BEFESA Balance Sheet ('000 euros) Assets 31.12.16 31.12.15 Equity and liabilities 31.12.16 31.12.15 Equity: Non-current assets Attibutable to owners of the parent - Intangible assets Share capital 13 13 Goodwill 319.143 379.990 Reserve for valuatio
Slide 42: Befesa Consolidated – Detailed Cash Flow Statement
BEFESA BEFESA Befesa Consolidated – Detailed Cash Flow Statement Cash Flow Statement ('000) 4Q 2015 4Q 2016 Change 2015 2016 Change Cash flows from operating activities: Profit (loss) for the period before tax (55.647) (94.709) (39.062) (20.594) (71.000) (50.406) From continuing operations: (54.322)