Slide 1: Full Year 2019 Preliminary Earnings Presentation
BEFESA Full Year 2019 Preliminary Earnings Presentation 20 February 2020
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: 2019 Highlights
BEFESA 2019 Highlights ▪ Steel Dust throughput 666kt (-7% YoY): Turkey upgrade Good operational performance & ▪ Salt Slags & SPL recycled at 493kt (-5% YoY) plant utilisation, considering downtimes ▪ Core businesses normalised at ~90% utilisation rates for plant upgrades: ▪ Aluminium alloys produced
Slide 5: Consolidated Key Financials
BEFESA Consolidated Key Financials EBITDA €160m (-9% YoY) as expected: Lower volume due to Turkey upgrade; Unfavourable TC & metal prices; Partially offset by higher hedges, recovering Stainless operations and 2nd Alu efficiencies; Strong 25% EBITDA margin Revenue ▪ 2019 revenue at €647.9m (€-72 / -
Slide 6: Steel Dust Recycling Services
BEFESA Steel Dust Recycling Services EBITDA at €125m (-9% YoY), driven by lower volume in Turkey -&- unfavourable zinc LME prices & TC; Partly offset by improved hedges & Stainless operations Revenue EAFD throughput & capacity utilisation (€m) (thousand tonnes, % of annual installed capacity) 380.9
Slide 7: Aluminium Salt Slags Recycling Services
BEFESA Aluminium Salt Slags Recycling Services EBITDA at €33m (-11% YoY) mainly driven by lower aluminium alloy prices; Plant utilisations >90% normalised for furnace upgrades Revenue(1) Volumes & capacity utilisation (€m) 342.9 (thousand tonnes, % of annual installed capacity) 292.4 Salt Slags & SP
Slide 8: Consolidated Net Debt / Leverage / Cash Flow / Capital Structure
Consolidated Net Debt / Leverage / BEFESA Cash Flow / Capital Structure Solid operating cash flow: Funding record €80m capex -&- €45m dividend; YE´19 cash on hand of €126m, Leverage at moderate x2.6; Reduced interest rate of long-term capital structure by 50 bps in Feb 2020 Net debt & leverage rate
Slide 9: Zinc Prices & Hedging Strategy
BEFESA Zinc Prices & Hedging Strategy Hedging up to Oct ´21 improves earnings & cash flows visibility for 2020 & 2021 € 3,000 Market zinc price vs. zinc hedges (€/tonne) € 2,500 ~€2,310 ~€2,250 €2,168 9M ’21: €2,280 €2,160 ~€2,200 € 2,000 €2,051 Closed ~half of Q3 ’21 €1,939 €1,876 targeted hedge vo
Slide 10: Mid-Term Growth Roadmap
BEFESA Mid-Term Growth Roadmap Accelerating growth through well defined roadmap: Hedging in place; Organic growth on track; Building two EAF steel dust recycling plants in China 1 Hedging ▪ 2019: 92.4kt @ ~€2,310/t ▪ 2020: 92.4kt @ ~€2,250/t ▪ 9M 2021: 57.3kt @ ~€2,200/t Indicative earnings 2 Organi
Slide 11: Organic Projects in Turkey, Korea & Barcelona Completed
Organic Projects in Turkey, Korea & Barcelona Completed BEFESA 2 on Time & Budget … Supporting Growth in 2020+ Turkey 65kt to 110kt capacity expansion completed on time & budget ✓ Electric Arc Furnace (EAF) dust recycling plant “brownfield” capacity expansion from 65kt to 110kt ✓ On time and budget;
Slide 12: China Plant #1: Jiangsu – Construction Progressing
BEFESA 3 China Plant #1: Jiangsu – Construction Progressing Changzhou (Jiangsu) plant construction progressing; Completion of construction expected by ~end of 2020 1 Plant #1 in Changzhou (Jiangsu province) Structural works – Plant buildings Key facts of the plant ▪ 1st EAF steel dust recycling plan
Slide 13: China Plant #2: Henan – Preparing Site for Construction
BEFESA 3 China Plant #2: Henan – Preparing Site for Construction XuChang (Henan) ground breaking ceremony held on 13 November; Preparing site for construction; Completion of construction expected by ~mid ‘21 2 Plant #2 in XuChang (Henan province) Ground breaking ceremony, 13 Nov 2019 Key facts of th
Slide 14: 2020 – Preliminary View
BEFESA 2020 – Preliminary View Completed organic growth projects of 2019 (Turkey, Korea, Barcelona) driving volume & earnings growth in 2020; Expecting record high plant utilisation levels in both core segments: Steel Dust >90% and Salt Slags >95% 2020 Prelim. view: Operational growth partially offs
Slide 15: Sustainability at Befesa
BEFESA Sustainability at Befesa Befesa is a vital player in the circular economy providing sustainable solutions • Befesa recycles annually around 1.5 million tonnes of hazardous residues, avoiding landfilling and recovering and reintroducing around 1.2 million tonnes of valuable new materials • Bef
Slide 16: Investor Agenda
BEFESA Investor Agenda Financial calendar Meet Befesa … Thursday, 20 February 2020: ✓ 20-22 January 2020 – UniCredit / Kepler Cheuvreux Preliminary Year-End Results 2019 & Analyst Call Frankfurt, 19th German Corporate Conference (GCC) 2020 ✓ 04-05 February 2020 – HSBC Frankfurt, 15th ESG Conference