Slide 1: Third Quarter 2018 Presentation
BEFESA BEFESA Third Quarter 2018 Presentation November 22, 2018
Slide 2: Disclaimer
BEFESA 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.
Slide 3: Today's Presenters
BEFESA Today’s Presenters CEO since 2000 CFO since 2014 Since 2008 Javier Molina Wolf Lehmann Rafael Pérez CEO CFO; including Director of responsibilities Investor Relations for Operational & Strategy Excellence and IT ▪ Leading the company since 1994 ▪ 20+ years in finance and ▪ Director of Investo
Slide 4: Key Highlights
BEFESA Key Highlights 9M 2018: EBITDA €128.9m (+2%); Adj. EBIT: €107.9m (+2%) Q3 2018: €40.0m EBITDA (-7%); Adj. EBIT: €33.6m (-9%); down €3m; Blended zinc price decrease of €180/t partially offset by volume growth 9M 2018 with strong net profit of €62.9m (+81%) Guidance 2018 confirmed & concretized
Slide 5: Consolidated Key Financials
BEFESA Consolidated Key Financials 9M Earnings +2%, in line with guidance & on track for €174-176m EBITDA 2018 Revenue(1) Highlights (€m) €(0.2)m / (0.1)% 498.1 539.1 ▪ 9M 2018: EBITDA at €129m (+2.1%); 156.9 156.7 Adj. EBIT at €108m (+1.8%) Q3 '17 Q3 '18 9M '17 9M '18 ▪ Q3 2018 revenue flat at €157
Slide 6: Steel Dust Recycling Services
BEFESA Steel Dust Recycling Services 9M 2018: +4% EBITDA / +6% EBIT, growth driven by higher EAFD throughput; Q3 earnings (-€4m) driven by zinc price decrease partially offset by volume Revenue EAFD Throughput & Capacity Utilization (€m) (thousand tons, % of annual installed capacity) 284.0 243.5 88
Slide 7: Aluminium Salt Slags Recycling Services
BEFESA Aluminium Salt Slags Recycling Services Q3 2018: EBITDA €7.9m (+10%); EBIT €5.5m (+22%) driven by improved metal margin in 2nd Aluminium partially offset by reduced aluminium alloy prices Revenue(1)(2) Volumes & Capacity Utilization (€m) (thousand tons, % of annual installed capacity) 256.8 2
Slide 8: Hedging Strategy
BEFESA Hedging Strategy Hedging program in place covering up to July 2021: improving visibility of earnings and cash flows for the next 3 years Market Zinc Price vs. Zinc Hedge ▪ Hedges in place up to and including July 2021 (€/ton) ▪ Increased volume coverage; Higher volume of 7.7 kt/month or 92.4
Slide 9: Consolidated Net Debt / Leverage / Cash Flow / Ratings
Consolidated Net Debt / Leverage / BEFESA Cash Flow / Ratings Leverage of 2.4x at Q3 2018 close Interest cost reducing by 25bps to Euribor+250bps by end of November Net Debt and Leverage Rate Evolution Free Cash Flow(2) (€m) (€m) 524 106 Cash Note: 417 83% 77% 66% €(22)m WC impact: Conversion(3) a
Slide 10: Mid-Term Growth Roadmap
BEFESA Mid-Term Growth Roadmap Accelerated top- and bottom-line growth through a well-defined strategy 1 Utilization • Increase plant utilization of prior year growth investments mainly Steel Dust Korea 2 Organic Growth 5 2018 Focus: • Steel Dust: 4 - Expand Turkey +45kt Indicative Earnings - Korea
Slide 11: Transformational Growth - China
BEFESA 4 Transformational Growth - China Signed agreement with Jiangsu Changzhou Economic Development Zone and purchasing land use right; Developing 1st steel dust recycling plant … Changzhou Jiangsu province ✓ Chinese government continues to strengthen environmental regulations ✓ Steel dust has bee
Slide 12: Investor Relations
BEFESA Investor Relations Financial Calendar Meet Befesa … ✓ Thursday, November 22, 2018: ✓ October 1, 2018 - Berenberg Publication of Statement Q3 2018 & Analyst Call Milan, Berenberg Milan Seminar ✓ November 15, 2018 - Goldman Sachs Thursday, March 21, 2019: London, Global Natural Resources Confer