Slide 1: Fiscal Year 2013 Earnings Presentation
BEFESA BEFESA Fiscal Year 2013 Earnings Presentation 13th March 2014
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 Zinc Non-Zinc Business Consolidated Business Introduction Q&A Appendix Highlights Performance Financials Performance Financials Outlook Rafael Pérez Head of Strategy & Investor Relations 3
Slide 4: Highlights
BEFESA Business Zinc Business Zinc Non-Zinc Business Consolidated Business Introduction Q&A Appendix Highlights Performance Financials Performance Financials Outlook Javier Molina Chief Executive Officer 4
Slide 5: Befesa 2013 Highlights
BEFESA Befesa 2013 Highlights Good year in all Befesa segments with total consolidated revenues of €629 million Strong consolidated EBITDA of €121 million and EBITDA margins in line with previous years at 19% Difficult global economic context with challenging steel and aluminum market conditions and
Slide 6: Zinc Business Performance
BEFESA Business Zinc Business Zinc Non-Zinc Business Consolidated Business Introduction Q&A Appendix Highlights Performance Financials Performance Financials Outlook Asier Zarraonandia Managing Director of Zinc Business 6
Slide 7: Crude Steel Performance
BEFESA Crude Steel Performance We continue to deliver high margins in a challenging zinc commodity price environment. Total sales of €253m and EBITDA of €76m Operational Performance Throughput Highlights - 548.145 tons of crude steel dust treated in 2013 Steel dust deliveries in line with expectatio
Slide 8: Market Overview
BEFESA Market Overview Challenging steel market in Europe in 2013 with the end of the year showing some positive signs Crude Steel Production EU-27 Crude Steel Production Turkey Crude Steel Production S. Korea Crude Steel Production (million tons) 169,4 165,7 69,3 66,0 39,7 42,1 35,9 34,7 8,7 9,0 17
Slide 9: Zinc Prices & Hedging
BEFESA Zinc Prices & Hedging Zinc prices peaked up along the end of 2013, although they remained depressed for the majority of the year 2.000 2012: 2013: 1.703 €/t 1.700 €/t Zinc Prices 1.800 During the first quarter of 2013 zinc prices fluctuated above Q1 2014: Q2 2014: 2013 full year average… 1.55
Slide 10: Stainless Steel Performance
BEFESA Stainless Steel Performance Stainless steel business severely affected by weak market conditions and low nickel prices Operational Performance Throughput: 105.900 tons of stainless steel dust treated in 2013 (-14% vs 2012); 24.239 tons in 4Q 2013 (-21% YoY). Load Factor: 60,9% achieved in 201
Slide 11: 2013 Growth Strategy
BEFESA 2013 Growth Strategy Steel growth strategy focused on South Korea and Turkey projects will drive significant near-term growth Korea Plant commissioning started last March 2013 Full speed operations started in September Throughput in line with expectations. Oversupply of crude steel dust A €20
Slide 12: Zinc Business Financials
BEFESA Business Zinc Business Zinc Non-Zinc Business Consolidated Business Introduction Q&A Appendix Highlights Performance Financials Performance Financials Outlook Marta Deprit Financial Controller of Zinc Business 12
Slide 13: Crude Steel Key Financials
BEFESA Crude Steel Key Financials High and stable margin in steel dust despite a decline zinc LME prices Crude Steel Revenues (€m) FY Highlights 2012 2013 Crude steel dust segment revenues decreased by 0,8% in line with the EBITDA decrease due to the 185,4 183,9 following effects: 47,6 50,2 - A 1% i
Slide 14: Stainless Steel Key Financials
BEFESA Stainless Steel Key Financials Stainless steel heavily affected by depressed stainless market dynamics and weak commodity prices Stainless Revenues (€m) FY Highlights 2012 2013 Stainless steel dust segment revenues decreased by 12,6% and the EBITDA went to negative due to a 14% decrease in th
Slide 15: Cash Flow & Liquidity
BEFESA Cash Flow & Liquidity Cash flow generation influenced by the results of the operations Operating activities: During the year 2013 the net cash flows used in operating activities increased in €23,2 million and it reduced in €12,8 million compared to 2012 mainly due to the reduction in the cash
Slide 16: Non-Zinc Business Performance
BEFESA Business Zinc Business Zinc Non-Zinc Business Consolidated Business Introduction Q&A Appendix Highlights Performance Financials Performance Financials Outlook Javier Molina Chief Executive Officer 16
Slide 17: Aluminium Performance
BEFESA Aluminium Performance Weak aluminium performance driven by lower salt slag volumes and sluggish automotive industry performance over 2013 Operational Performance Salt Slag/SPLs Recycled: 437.053 tons of salt slag/SPL recycled in 2013 (-6,5% vs 2012); 102.268 tons in 4Q 2013 (-10,7% YoY) Load
Slide 18: Aluminium Financial Highlights
BEFESA Aluminium Financial Highlights Key financial metrics in Aluminum reflects the weaker performance in volumes as well as a decrease in aluminum prices and metal margins Aluminium Revenues (€m) FY Highlights 2012 2013 The 5,5% decrease in revenues of the aluminium waste business compared to 2012
Slide 19: Industrial Waste Performance
BEFESA Industrial Waste Performance Very good year for the Industrial Waste business with strong volumes in Latin America and Sulphur plant running at full speed. Operational Performance Industrial waste managed in Spain: 647.658 tons in 2013 (-8,7% vs 2012); 150.088 tons in 4Q 2013 (-9,6% YoY) Indu
Slide 20: Industrial Waste Financial Highlights
BEFESA Industrial Waste Financial Highlights Strong Ebitda growth and margin improvement driven by better margin in Spain and stronger volumes in Latin America and Sulfur Industrial Waste Revenues (€m) FY Highlights 2012 2013 The 8% increase in revenue was principally due to a 2% increase in industr
Slide 21: 2013 Growth Strategy
BEFESA 2013 Growth Strategy Important steps achieved in Germany and Persian Gulf, the biggest European and Middle East aluminium waste supplying markets Bernburg After getting building and environmental permits, the construction of the plant started last September and is fully on time and on budget
Slide 22: Consolidated Financials
BEFESA Business Zinc Business Zinc Non-Zinc Business Consolidated Business Introduction Q&A Appendix Highlights Performance Financials Performance Financials Outlook Rafael Pérez Head of Strategy & Investor Relations 22
Slide 23: Revenue and EBITDA
BEFESA Revenue and EBITDA 2013 was a stable year in line with 2012 and with similar levels of revenues, EBITDA and with profitability above 19% Revenues (€m) Highlights Steel Aluminium Ind. Waste 2013 consolidated revenues amounted to € 642,4 M€ 628,7 M€ 629 million, a 2% decrease over 2012 16% 17%
Slide 24: Consolidated P&L
BEFESA Consolidated P&L Good operating result in 2013 in line with 2012. Bottom line affected by goodwill impairments Consolidated P&L (€m) BEFESA Year ended Dec 31st, Profit & Loss Statement (€ million) 2012 2013 % Change Net revenues 642,4 628,7 -2,1% EBITDA 122,2 120,6 -1,3% Depreciations, amorti
Slide 25: Consolidated Cash Flow Statement
BEFESA Consolidated Cash Flow Statement Operating activities: During the year 2013 the net cash flows generated in operating activities decreased in €86,0 million which represents a difference of €107,9 million compared to the previous year due to a strong working capital outflow of €119m derived fr
Slide 26: Debt Structure & Net Debt Position 2013 YE
BEFESA Debt Structure & Net Debt Position 2013 YE Solid and stable financing position at 3 levels (Zinc, Non-Zinc and Corporate) with total leverage at x4,7 Net Debt / FY Vendor Note 48 M€ Total Net 2013 EBITDA PIK Note 152 M€ Debt* 572 M€ 4,7x** Befesa Medio Ambiente Ring fence structure Zinc Non Z
Slide 27: Outlook
BEFESA Business Zinc Business Zinc Non-Zinc Business Consolidated Business Introduction Q&A Appendix Highlights Performance Financials Performance Financials Outlook Javier Molina Chief Executive Officer 27
Slide 28: 2014 Business focus
BEFESA 2014 Business focus Main priorities for 2014 • Focus on operational excellence in order to achieve the cost savings target for 2014 in a sustainable manner • Good execution of the Bernburg project on time and on budget • Consolidation of Befesa Zinc in South Korea • Grow in Turkey as a key ma
Slide 29: Strategy
BEFESA Strategy The growth strategy of Befesa is being defined within the frame: Recycling - Waste – Metals Recycling has to be the main activity that is present in all Befesa’s business lines and that is supported by global macro trends in favor of recycling Recycling Metals are an important source
Slide 30: Outlook
BEFESA Outlook Most recent forward looking steel and aluminium market indicators suggest a slightly more pronounced upturn in 2014 European Steel Market “The latest signals from key steel-using “Macroeconomic conditions in the Euro-zone “Real steel consumption is expected sectors such as automotive
Slide 31: Questions
BEFESA Business Zinc Business Zinc Non-Zinc Business Consolidated Business Introduction Q&A Appendix Highlights Performance Financials Performance Financials Outlook Questions 31
Slide 32: Appendix
BEFESA Business Zinc Business Zinc Non-Zinc Business Consolidated Business Introduction Q&A Appendix Highlights Performance Financials Performance Financials Outlook 32
Slide 33: Consolidated P&L
BEFESA Consolidated P&L BEFESA Year ended Dec 31st, Pro fi t & Lo s s Statemen t ('0 0 0 eu ro s ) 2012 2013 Change Continuing operations: Net revenues 642.400 628.655 (13.745) Variation in inventories of finished and work in progress goods 484 5.103 4.619 Procurements (307.334) (298.961) 8.373 Othe
Slide 34: Consolidated Balance Sheet
BEFESA Consolidated Balance Sheet BEFESA Consolidated Balance Sheet (‘000 euros) 34
Slide 35: Consolidated Cash Flow Statement
BEFESA Year ended Dec 31st, Consolidated Cash Flow Statement BEFESA Cas h Fl o w St atemen t ('0 0 0 eu r o s) 2012 2013 Change Cash generated from operations: Result before taxes 45.918 (6.542) (52.460) Adjustments from: Amortizations 29.942 36.547 6.605 Amortizations of discontinued operations 8.6
Slide 36: Zinc Detailed Balance Sheet
BEFESA Zinc Detailed Balance Sheet BEFESA ZINC Balance Sheet ('000 euros) Assets 31.12.2013 31.12.2012 Equity and Liabilities 31.12.2013 31.12.2012 Non-current assets: Equity: Intangible assets: Of the Parent: Goodwill 286.287 279.079 Share capital 25.010 25.010 Other intangible assets 8.818 9.555 U
Slide 37: Zinc Detailed P&L
BEFESA Zinc Detailed P&L BEFESA ZINC Year ended Dec 31st, Three-month ended Dec 31st, Profit & Loss Statement ('000 euros) 2012 2013 Change 2012 2013 Change Revenue 252.280 253.181 901 66.208 67.080 872 Cost of Sales (150.432) (159.036) (8.604) (38.709) (40.644) (1.935) Other operating income 4.809
Slide 38: Zinc Detailed Cash Flow
BEFESA Zinc Detailed Cash Flow BEFESA ZINC Year ended Dec 31st, Three-month ended Dec 31st, Cash Flow Statement ('000 euros) 2012 2013 Change 2012 2013 Change Cash Flows From Operating Activities Profit for the period before tax 40.436 10.683 (29.753) 8.010 (11.767) (19.777) Adjustments due to: Amor
Slide 39: Zinc Detailed Operational Data
BEFESA Zinc Detailed Operational Data Year ended December 31, Three-month period ended December 31, 2012 2013 Change 2012 2013 Change Crude steel waste recycling (tons) (%) (tons) (%) 1 Installed capacity (tons ) 560.300 670.300 110.000 19,6% 560.300 670.300 110.000 19,6% Crude steel waste processed
Slide 40: Aluminium Detailed Operational Data
BEFESA Aluminium Detailed Operational Data Year ended December 31, Three-month period ended December 31, 2012 2013 Change 2012 2013 Change Salt slags and SPLs recycling (tons) (%) (tons) (%) 6 Installed capacity (tons ) 630.000 630.000 0 0,0% 630.000 630.000 0 0,0% Salt slags recycled (tons) 438.400
Slide 41: Industrial Waste Detailed Operational Data
BEFESA Industrial Waste Detailed Operational Data Year ended December 31, Three-month period ended December 31, 2012 2013 Change 2012 2013 Change Industrial waste management (Spain) (tons) (%) (tons) (%) Industrial waste treated (tons): 709.744 647.658 (62.086) -8,7% 166.108 150.088 (16.020) -9,6% N
Slide 42: Consolidated Key Financials
BEFESA Consolidated Key Financials BEFESA Year ended December 31, Three-month period ended December 31, 2012 2013 Change 2012 2013 Change Revenue (€ million) (€m) (%) (€m) (%) Steel waste recycling 264,6 253,2 (11,4) -4,3% 66,2 67,1 0,9 1,3% Crude steel 201,5 197,9 (3,6) -1,8% 51,2 54,4 3,2 6,3% Sta
Slide 43: Net Debt Position: 2013 Year End
BEFESA Net Debt Position : 2013 Year End Total Net Debt Position As Of 2013 YE (Excl. Vendor Note and Factoring/Confirming) (€m) 4,7x** 64 152 6 6 10 140 150 20 5 636 572 300 325 BZ Bond Hankook Other Zinc Zinc Gross Non-Zinc Bernburg Other Non- Non-Zinc Public Entity PIK Note Total Gross Total Cash