Befesa Sa · XETR:BFSA
Befesa Sa — H1 2022 Earnings Presentation
34 slides from Befesa Sa's earnings presentation, Jul 28, 2022
Slide 1: First Half 2022 Earnings Presentation
First Half 2022 Earnings Presentation 28 July 2022
Slide 2: Disclaimer
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. Such s
Slide 3: Today's Presenters
Today’s Presenters Javier Asier Wolf Molina Zarraonandia Lehmann Executive CEO CFO Chair Leading Befesa for >20 years 20+ years with Befesa Befesa’s CFO since 2014 3 First Half 2022 Earnings Presentation
Slide 4: Highlights
Electric arc furnace steel dust (EAFD) recycling plant at Asúa-Erandio, Spain 01 Highlights
Slide 5: Executive summary
Executive summary • Continuing 25% yoy EBITDA growth … Q2’22 at €57m EBITDA, +26% yoy like Q1; H1 at €118m +25% or +€24m yoy • Metal prices decreased recently with recessionary & lower China market sentiment – although – energy inflation continues at high levels • ESG: - CO2 holistic approach highli
Slide 6: Business highlights
Business highlights Steel Dust Alu Salt Slags • EAFD throughput: • Salt slags volumes: 630kt H1, +85% yoy; 173kt H1, -12% yoy; 292kt Q2, +83% yoy 85kt Q2, -6% yoy • Around 80% plant utilisation • 2nd aluminium alloys: 85kt H1, -15% yoy; • WOX sold: 42kt Q2, -12% yoy 217kt H1, +82% yoy; 114kt Q2, +11
Slide 7: China I, China II, working on new projects
China I 1 Changzhou plant, Jiangsu province Key facts of the plant: • 1st EAFD recycling plant in China, 110kt EAFD p.a. • Total investment: c.€42m Status update: Construction completed on budget In commercial production & selling WOX Contracted for >80% EAFD volumes from customers, but COVID constr
Slide 8: Financial results
Secondary aluminium production plant at Bernburg, Germany 02 Financial results
Slide 9: Consolidated key financials
Consolidated key financials H1 adjusted EBITDA at €118.0m, +25% yoy, driven mainly by US zinc operations delivering as planned; yoy higher base metal prices offsetting energy inflation & unfavourable Zinc TC Adjusted EBITDA bridge H1 2021 to H1 2022 (€m) +€23.8 / +25.3% 36 1) -36 118.0 94.1 24 +26 Z
Slide 10: Steel Dust Recycling Services
Steel Dust Recycling Services H1 EBITDA at €95.0m, +37% yoy, driven mainly by US operations delivering as planned; yoy higher zinc market prices offsetting energy inflation & unfavourable TC EBITDA bridge H1 2021 to H1 2022 (€m) +€25.8 / +37.2% 21 -21 95.0 25 +26 Zinc LME Inflation incl. energy, 69.
Slide 11: Aluminium Salt Slags Recycling Services
Aluminium Salt Slags Recycling Services H1 EBITDA at €23.6m, -5% yoy; Energy inflation and some volume pressure mostly mitigated with higher aluminium metal prices; Overall plant utilisation at around 80% EBITDA bridge H1 2021 to H1 2022 (€m) -€1.2 / -4.8% 24.8 14 -14 23.6 -1 Lower aluminium alloys
Slide 12: Cash flow, net debt & leverage
Cash flow, net debt & leverage Continued strong liquidity of >€300m including record €239m cash on hand; Net leverage of x2.09 at Q2’22, improved vs. x2.16 at YE’21 H1 adjusted EBITDA to total cash flow (€m) 118.0 -26.2 -11.9 Total capex = €57.5m Seasonality / timing -15.9 64.0 -36.8 Mainly China Ma
Slide 13: Zinc prices & hedging strategy
Zinc prices & hedging strategy Hedge book fully extended up to Jan’25, c.2.5 years; Improving earnings & cash flows visibility Zinc LME price vs. Befesa’s hedging prices (€/t) Zinc LME1) Befesa’s hedges2) c.€2,450 c.€2,500 €2,317 €2,239 c.€2,350 €2,275 €2,280 €2,136 €2,151 Avg. blended 2019 2020 202
Slide 14: Growth projects
Nanjing City, location of Befesa China’s HQ 03 Growth projects
Slide 15: Decarbonisation & EV trends supporting secondary steel and aluminium markets
Decarbonisation & EV trends supporting favourable secondary steel (EAF) & aluminium markets Global crude steel demand1) Global primary aluminium demand2) Global EV sales penetration4) (million tonnes) (million tonnes) (%) 82 87% 1,946 68 1,760 1,773 1,798 64 64 43% 2% 3% 7% 2019 2020 2021 2030E 2019
Slide 16: New 5-year Sustainable Global Growth Plan (SGGP)
New 5-year Sustainable Global Growth Plan (SGGP) Around €500m investment, the largest expansion programme after the acquisition of AZR in Aug’21 Targeting around double-digit earnings growth on average over the next 5 years – from 2022 to 2027 Globally balanced growth in Asia/China, US & Europe Orga
Slide 17: ESG at Befesa
EAFD recycling plant at Gyeongju, South Korea 04 ESG at Befesa
Slide 18: ESG at Befesa
ESG at Befesa Key player within the circular economy, with c.2 million tonnes recycled and c.1.5 million tonnes of valuable materials recovered annually, that contributes significantly to increase efficiency of raw material use in the metals industry and promotes the transition towards a more sustai
Slide 19: Environmental highlights
Environmental highlights Baseline 2030 commitment • Holistic CO2 impact analysis: -20% Befesa prevents emissions of >2.4 mtpa CO₂eq, plus, 0.56 additional environmental benefits of reduced landfill 0.06 0.45 0.50 0.45 • Committing to CO2 Reduction Plan: 2021 PF 2030E 20% CO2 emission intensity reduc
Slide 20: Investor agenda & appendix
Waelz kiln at EAFD recycling plant in Gyeongju, South Korea 05 Investor agenda & appendix
Slide 21: Investor's agenda
Investor’s agenda Financial calendar Next investor conferences 2022 Q3 2022 Q4 2022 Q3 2022 Statement & Conf. Call Frankfurt – Commerzbank & ODDO BHF BBVA Iberian Forum (virtual) Thursday, 27 October 2022 Corporate Conference 2022 6 & 7 Oct – BBVA 7 Sep – Commerzbank & ODDO BHF London – Citi Global
Slide 22: Q2 2022/21 – Key financials
Q2 2022/21 – Key financials (€m, unless otherwise stated) Steel Salt Secondary Corporate & Total Dust Slags Aluminium eliminations Befesa Revenue1) €197.9 €22.1 €119.8 -€28.7 €311.1 yoy change +€103.5 / +109.6% +€4.6 / +26.5% +€29.9 / +33.3% -€18.5 / - +€119.5 / +62.4% Reported EBITDA €40.2 €8.2 €7.
Slide 23: H1 2022/21 – Key financials
H1 2022/21 – Key financials (€m, unless otherwise stated) Steel Salt Secondary Corporate & Total Dust Slags Aluminium eliminations Befesa Revenue1) €353.8 €41.3 €217.7 -€40.3 €572.5 yoy change +€158.5 / +81.2% +€4.0 / +10.7% +€45.4 / +26.4% -€19.6 / - +€188.3 / +49.0% Reported EBITDA €95.0 €14.6 €9.
Slide 24: Multi-year trend – Key financials
Multi-year trend – Key financials1) (€m, unless otherwise stated) 2017 2018 2019 2020 2021 Revenue €667.42) €720.1 €647.9 €604.3 €821.6 Reported EBITDA €153.0 €176.0 €159.6 €123.5 €189.6 Reported EBITDA margin % 22.9%2) 24.4% 24.6% 20.4% 23.1% Adjusted EBITDA €172.43) €176.0 €159.6 €127.03) €197.63)
Slide 25: Q2 2022/21 – Operational data – Steel Dust Recycling Services
Q2 2022/21 – Operational data – Steel Dust Recycling Services Q2 2021 Q2 20221) yoy change EAFD 159.6 292.3 +132.7 / +83.2% throughput (kt) EAFD average 77.6% 75.4% -217 bps capacity utilisation (%) Waelz oxide 52.6 110.1 +57.5 / +109.2% (WOX) sold (kt) Zinc LME price €2,418 €3,683 +€1,265 / (€/t) +
Slide 26: H1 2022/21 – Operational data – Steel Dust Recycling Services
H1 2022/21 – Operational data – Steel Dust Recycling Services H1 2021 H1 20221) yoy change EAFD 340.7 629.7 +289.0 / +84.8% throughput (kt) EAFD average 83.2% 81.6% -160 bps capacity utilisation (%) Waelz oxide 119.3 213.8 +94.5 / +79.2% (WOX) sold (kt) Zinc LME price €2,349 €3,510 +€1,161 / (€/t) +
Slide 27: Q2 2022/21 – Operational data – Aluminium Salt Slags Recycling Services
Q2 2022/21 – Operational data – Aluminium Salt Slags Recycling Services Q2 2021 Q2 2022 yoy change Salt slags & SPL 91.3 85.5 -5.8 / -6.4% treated (kt) Salt slags & SPL 81.4% 76.2% -520 bps avg. capacity utilisation (%) Aluminium 48.2 42.4 -5.8 / -12.0% alloys produced (kt) Secondary alu 94.2% 83.0%
Slide 28: H1 2022/21 – Operational data – Aluminium Salt Slags Recycling Services
H1 2022/21 – Operational data – Aluminium Salt Slags Recycling Services H1 2021 H1 2022 yoy change Salt slags & SPL 195.8 172.9 -22.8 / -11.7% treated (kt) Salt slags & SPL 87.7% 77.5% -1,022 bps avg. capacity utilisation (%) Aluminium 99.5 84.6 -14.8 / -14.9% alloys produced (kt) Secondary alu 97.8
Slide 29: Multi-year trend – Operational data
Multi-year trend – Operational data 2017 2018 2019 2020 2021 EAFD throughput (kt) 661.0 717.1 665.8 687.0 885.7 EAFD average capacity 84.7% 92.0% 80.7% / 90.1%1) 83.2% 83.3%2) utilisation (%) Waelz oxide (WOX) sold (kt) 217.8 240.9 217.6 239.2 291.0 Zinc LME price (€/t) €2,572 €2,468 €2,276 €1,979 €
Slide 30: Consolidated key financials
Consolidated key financials Q2 adjusted EBITDA at €56.9m, +26% yoy, mainly driven by US zinc operations delivering as planned; yoy higher base metal prices offsetting energy inflation & unfavourable Zinc TC Adjusted EBITDA bridge Q2 2021 to Q2 2022 (€m) +€11.6 / +25.6% 20 -19 56.9 1) 45.3 10 +14 Zin
Slide 31: Steel Dust Recycling Services
Steel Dust Recycling Services Q2 EBITDA at €40.2m, +23% yoy, mainly driven by US operations delivering as planned; yoy higher zinc market prices mostly offsetting energy inflation & unfavourable TC EBITDA bridge Q2 2021 to Q2 2022 (€m) +€7.5 / +22.9% 10 -13 40.2 32.7 10 +14 Zinc LME Inflation incl.
Slide 32: Aluminium Salt Slags Recycling Services
Aluminium Salt Slags Recycling Services Q2 EBITDA at €16.1m, +28% yoy; Energy inflation and some volume pressure more than offset with higher aluminium metal prices; Overall plant utilisation at around 80% EBITDA bridge Q2 2021 to Q2 2022 (€m) +€3.5 / +28.1% -6 16.1 10 12.5 -0.5 Inflation incl. ener
Slide 33: Cash flow, net debt & leverage
Cash flow, net debt & leverage Continued strong liquidity of >€300m including record €239m cash on hand; Net leverage of x2.09 at Q2’22, improved vs. x2.16 at YE’21 Q2 adjusted EBITDA to total cash flow (€m) 56.9 -2.7 -4.6 Total capex = €31.7m Seasonality / timing -11.3 38.3 -27.4 Mainly China expan
Slide 34: FY 2022 guidance: confirmed
FY 2022 guidance: confirmed Global diversified footprint and expansion initiatives delivering between +11% to 37% yoy growth; Wider guidance range driven by energy & base metal price volatility and market (volume) Lower-end: €220m Upper-end: €270m +€22m / +11% yoy +€72m / +37% yoy EBITDA • H1’22 of