Befesa Sa · XETR:BFSA
Befesa Sa — Befesa Zinc — H1 2013 Earnings Presentation
26 slides from Befesa Sa's earnings presentation, Sep 5, 2013
Slide 1: First Half 2013 Earnings Presentation
BEFESA ZINC BEFESA ZINC First Half 2013 Earnings Presentation 5th September 2013
Slide 2: Forward-looking Statement
BEFESA ZINC Forward-looking Statement This presentation contains forward-looking statements and information relating to Befesa Zinc that are based on the beliefs of its management as well as assumptions made and information currently available to Befesa Zinc. Such statements reflect the current view
Slide 3: Agenda
BEFESA ZINC Agenda 1 H1 Business Highlights 2 H1 Financial Highlights 3 Outlook 4 Appendix 3
Slide 4: H1 2013 Key Highlights
BEFESA ZINC H1 2013 Key Highlights Profitable growth despite a continuously challenging environment Revenues EBITDA 121.6 M€ 36.1 M€ 0.6 % (120.9 M€ H1 2012) 12.3 % (41.2 M€ H1 2012) 2% 6% Crude Steel 25% Stainless Steel €121.6m €36.1m 69% Others* 99% Net Income Leverage 10.1 M€ 3.04x** 31.9 % (14.9
Slide 5: Agenda
BEFESA ZINC Agenda 1 H1 Business Highlights 2 H1 Financial Highlights 3 Outlook 4 Appendix 5
Slide 6: H1 2013 Crude Steel
BEFESA ZINC H1 2013 Crude Steel We continue to deliver high profitable results in a continuous challenging macro environment in crude steel 83.7 M€ Revenues in H1 2013, a decrease of 8.5% YoY 35.6 M€ EBITDA in 1H 2013, a decrease of 7.6% YoY 42.5 % Average EBITDA margin (vs. 42.1% H1 2012) 92.6 % Av
Slide 7: H1 2013 Stainless Steel
BEFESA ZINC H1 2013 Stainless Steel Adverse market conditions and commodity prices are affecting our results in stainless steel 30.9 M€ Revenues in H1 2013, an increase of 4.5% YoY -0.1 M€ EBITDA in H1 2013, a decrease of 102.6% YoY -0.2 % Average EBITDA margin (vs. 9.2% H1 2012) 62.1 % Average Load
Slide 8: H1 2013 Business Highlights
BEFESA ZINC H1 2013 Business Highlights Good H1 in general, given the current macro economic turmoil 1 Slight decrease in throughput (-2.1% Y-o-Y) and lower average load factor (93% vs. 94%) due to more planned maintenance shutdowns 2 WOX: Lower sales (-6.4% Y-o-Y); Lower production levels (-4.8% Y-
Slide 9: Agenda
BEFESA ZINC Agenda 1 H1 Business Highlights 2 H1 Financial Highlights 3 Outlook 4 Appendix 9
Slide 10: Consolidated Figures
BEFESA ZINC Consolidated Figures Good first half of 2013, however affected by commodity prices H1 2013 EBITDA reached €36.1m, representing an average EBITDA Margin of 30% Net Debt is €237.7m, representing a Net Debt / EBITDA ratio of 3.0x * H1 Revenues (€m) Revenues by Quarter (€m) (€m) (€m) 66.2 64
Slide 11: Steel Dust Segment
BEFESA ZINC Steel Dust Segment High and stable margin in steel dust despite a decline in WOX sold Throughput in H1 2013 decreased by 2.1% Y-o-Y due to more maintenance stops than in H1 2012 H1 2013 revenues decreased by 8.5% Y-o-Y in line with the EBITDA decrease, mainly due to lower volumes of WOX
Slide 12: Stainless Steel Segment
BEFESA ZINC Stainless Steel Segment Stainless steel heavily affected by commodity prices H1 2013 revenues increased by 4.5% Y-o-Y and the EBITDA decreased to almost zero mainly due to the decrease of the throughput by 17%, the increase in alloys sold by 80% (partly offset by the nickel price reducti
Slide 13: Cash Flow & Liquidity
BEFESA ZINC Cash Flow & Liquidity Cash flow generation affected by the results of the operations Operating activities: During H1 2013 the net cash flows used in operating activities increased in €3.6m, which represents a €4.4m decrease compared to H1 2012 mainly due to the reduction in the cash gene
Slide 14: Agenda
BEFESA ZINC Agenda 1 H1 Business Highlights 2 H1 Financial Highlights 3 Outlook 4 Appendix 14
Slide 15: Outlook
BEFESA ZINC Outlook We maintain a positive outlook for the rest of 2013 1 2013 load factor will not be affected at current levels of EAF production Steel Dust 2 Similar levels of EAF production expected for the rest of 2013 than for 2012 3 Strong demand for WOX from zinc smelters 1 No major changes
Slide 16: Outlook (cont'd)
BEFESA ZINC Outlook (cont’d) Growth strategy focused on South Korea and Turkey steel dust recycling projects 1 New 110kt plant in Adana (near Iskenderun): Lands obtained and partially paid; permits and authorizations process currently ongoing 2 Financing for Adana approved by EBRD*. EAF dust supply
Slide 17: Turkey and South Korea
BEFESA ZINC Turkey and South Korea Growth strategy focused on South Korea and Turkey steel dust recycling projects Turkey South Korea 5th largest EAF steel producer 4th largest EAF steel producer EAF Steel Market 20-30% Zinc in EAF dust 20-30% Zinc in EAF dust Relatively strict and catching-up with
Slide 18: Zinc Prices
BEFESA ZINC Zinc Prices Hedging policy compensating for pressures in zinc prices and providing visibility to the cash flows for the next 16 months 2.000 2012: 2013: 1,703 €/t 1,700 €/t 1.800 Q2 2014: 1,500 €/t 1.600 1,560 €/t 1.400 Q1 2014: 1,550 €/t 1.200 H2 2014: option floor @ 1,300 €/t 1.000 LME
Slide 19: Agenda
BEFESA ZINC Agenda 1 H1 Business Highlights 2 H1 Financial Highlights 3 Outlook 4 Appendix 19
Slide 20: Detailed Balance Sheet
BEFESA ZINC Detailed Balance Sheet Figures in € ‘000 Assets 30.06.2013 31.12.2012 Equity and Liabilities 30.06.2013 31.12.2012 Non-current assets: Equity: Intangible assets: Of the Parent: Goodwill 279,079 279,079 Share capital 25,010 25,010 Other intangible assets 9,183 9,555 Unrealized Asset and L
Slide 21: Detailed Consolidated P&L
BEFESA ZINC Detailed Consolidated P&L Figures in € ‘000 H1 Q2 2013 2012 Variation 2013 2012 Variation Revenue 121,622 120,935 687 56,971 58,688 (1,717) Cost of sales (77,673) (70,879) (6,794) (38,594) (35,443) (3,151) Other operating income 3,248 2,466 782 949 1,200 (251) Gross Profit 47,197 52,522
Slide 22: Detailed Cash Flow
BEFESA ZINC Detailed Cash Flow H1 Q2 Figures in € ‘000 2013 2012 Variation 2013 2012 Variation Cash Flows from Operating Activities Profit for the period before tax 15,211 22,181 (6,970) 3,946 9,711 (5,765) Adjustments due to: Amortization/ Depreciation 7,377 6,461 916 3,168 3,029 139 (Profit)/Loss
Slide 23: Detailed Segment Reporting
BEFESA ZINC Detailed Segment Reporting H1 2013 Q2 2013 EBITDA EBITDA Figures in € ‘000 Revenue EBITDA Margin Revenue EBITDA Margin Steel Dust 83,668 35,561 42.5% 38,495 15,534 40.4% Stainless Steel 30,870 (69) -0.2% 14,716 (1,228) -8.3% Galvanization 7,084 601 8.5% 3,760 326 8.7% Total 121,622 36,09
Slide 24: Detailed Operational Data
BEFESA ZINC Detailed Operational Data Crude Steel Dust H1 Q2 2013 2012 Variation 2013 2012 Variation (in Dry Metric Tons) Throughput Crude Steel Dust 257,174.3 262,616.0 -2.1% 129,751.0 128,383.6 +1.1% Average Load Factor 92.6% 94.0% 92.9% 91.9% Waelz Oxide Production 85,991.4 90,370.5 -4.8% 43,950.
Slide 25: Glossary
BEFESA ZINC Glossary For a full understanding of this presentation and the Company’s activities, please see below a glossary of certain terms used Electric arc furnace A type of furnace used by mini-mills to melt recycled steel scrap to produce new steel Leaching A hydrometallurgical process that in
Slide 26: Q&A
BEFESA ZINC — QRA