Befesa Sa · XETR:BFSA
Befesa Sa — Befesa Zinc — Q3 2012 Earnings Presentation
26 slides from Befesa Sa's earnings presentation, Nov 20, 2012
Slide 1: Third Quarter 2012 Earnings Presentation
BEFESA ZINC Innovative Technology Solutions for Sustainability BEFESA ZINC Third Quarter 2012 Earnings Presentation 20th November 2012
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 3Q & 9M Business Highlights 2 3Q & 9M Financial Highlights 3 Outlook 4 Appendix 3
Slide 4: 9M 2012 Key Highlights
BEFESA ZINC 9M 2012 Key Highlights Continued growth despite a continuously challenging environment Revenues EBITDA 186.1 M€ 61.2 M€ 9.2 % (170.4 M€ 9M 2011) 10.2 % (55.6 M€ 9M 2011) 5% 26% Crude Steel 186.1 M€ 61.2 M€ Stainless Steel 74% 95% Net Income Leverage 21.4 M€ 2.98x 3.0 % (22.0 M€ 9M 2011)
Slide 5: Agenda
BEFESA ZINC Agenda 1 3Q & 9M Business Highlights 2 3Q & 9M Financial Highlights 3 Outlook 4 Appendix 5
Slide 6: 9M 2012 Crude Steel
BEFESA ZINC 9M 2012 Crude Steel Solid results despite challenging environment 137.8 M€ Revenues in 9M 2012, an increase of 4 % Y-o-Y 57.9 M€ EBITDA in 9M 2012, an increase of 6 % Y-o-Y 42.0 % Average EBITDA margin (vs. 41.3 % 9M 2011) 94.5 % Average Load Factor (vs. 96.6 % 9M 2011) 139.0 Kt WOX sold
Slide 7: 9M 2012 Stainless Steel
BEFESA ZINC 9M 2012 Stainless Steel Strong performance in adverse market 48.2 M€ Revenues in 9M 2012, an increase of 28 % Y-o-Y 3.4 M€ EBITDA in 9M 2012, an increase of 311 % Y-o-Y 6.9 % Average EBITDA margin (vs. 2.2 % 9M 2011) 71.3 % Average Load Factor (vs. 52.6 % 9M 2011) 93.1 Kt Stainless steel
Slide 8: 9M 2012 Business Highlights
BEFESA ZINC 9M 2012 Business Highlights Solid performance of steel dust and strong improvement in stainless steel 1 Positive effect in revenues of increase in hedge from €1,560 to €1,703, partially offset by decrease in LME spot price (-6.9 %) 2 WOX: Higher sales (+2.7 % Y-o-Y); Production roughly i
Slide 9: Agenda
BEFESA ZINC Agenda 1 3Q & 9M Business Highlights 2 3Q & 9M Financial Highlights 3 Outlook 4 Appendix 9
Slide 10: Consolidated Figures
BEFESA ZINC Consolidated Figures Strong 9M 2012, benefiting from Turkey consolidation, and strong recovery in stainless steel 9M 2012 EBITDA reached 61.2 M€, representing an average EBITDA Margin of 33% Net Debt is 235.8 M€, representing a Net Debt / EBITDA ratio of 2.98x * Revenues (YTD and 3Q) Rev
Slide 11: Steel Dust Segment
BEFESA ZINC Steel Dust Segment Solid results in steel dust despite decline in EU mini-mill production and Turkey providing growth Throughput in 9M 2012 decreased by 1.9 % Y-o-Y due to more maintenance stops than in 2011 9M 2012 revenues increased by +3.8% vs. 9M 2011 due to higher volumes of WOX sol
Slide 12: Stainless Steel Segment
BEFESA ZINC Stainless Steel Segment Good 3Q confirms momentum shown during the first half of 2012 9M 2012 revenues increased 28.1% Y-o-Y, mainly due to the sharp increase in alloys sold during this period (+155%), and the increase by 36.1 % in the stainless steel throughput 9M 2012 load factor from
Slide 13: Cash Flow & Liquidity
BEFESA ZINC Cash Flow & Liquidity Stable cash flow generation and strong liquidity position Operating activities: During 9M 2012, cash generated from operating activities increased 3.7 M€ and taxes were 4.8 M€ lower, while interests paid increased mainly due to the bond interests (13.3 M€) Investing
Slide 14: Agenda
BEFESA ZINC Agenda 1 3Q & 9M Business Highlights 2 3Q & 9M Financial Highlights 3 Outlook 4 Appendix 14
Slide 15: Attractiveness of Turkey and South Korea
BEFESA ZINC Turkey and South Korea Attractiveness of Turkey and South Korea Turkey EAF Steel Production: Sep YTD 2012 (Top-10) Total = 305.1 million tons EAF steel market EU - 27 59.3 4th largest EAF steel producer 20-30 % Zinc in EAF dust Izmir US 43.1 Regulation adjusting to meet EU Iskenderun Ada
Slide 16: Outlook
BEFESA ZINC Outlook We maintain a positive outlook for the rest of 2012 1 2012 load factor will not be affected at current levels of EAF production Steel Dust 2 Similar levels of EAF production expected for 2012 than for 2011 3 Strong demand for WOX from Zinc smelters The performance of the business
Slide 17: Outlook (cont'd)
BEFESA ZINC Outlook (cont’d) Growth strategy focused on Turkey, benefiting from flexible and uncommitted capex plan Attractiveness of the market and expansion constrains in existing facility 1 drives new growth strategy in Turkey New 110kt plant in Adana (near Iskenderun): Land already acquired, and
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 20 months 4.000 3.000 January 2012 January 2013 1,703 €/t 1,700 €/t 2.000 1,560 €/t 1.000 Q1 2014 Q2 2014 1,550 €/t 1,500 €/t 0 Daily Zinc Spot (€/ton) Hedging Pri
Slide 19: Agenda
BEFESA ZINC Agenda 1 3Q & 9M Business Highlights 2 3Q & 9M Financial Highlights 3 Outlook 4 Appendix 19
Slide 20: Detailed Balance Sheet
BEFESA ZINC Detailed Balance Sheet Figures in € ‘000 Assets 30.09.2012 31.12.2011 Equity and Liabilities 30.09.2012 31.12.2011 Non-current assets: Equity: Intangible assets: Of the Parent: Goodwill 283.618 279.162 Share capital 25.010 25.010 Other intangible assets 5.979 5.208 Unrealised Asset and L
Slide 21: Detailed Consolidated P&L
BEFESA ZINC Detailed Consolidated P&L Figures in € ‘000 9M 3Q 2012 2011 Variation 2012 2011 Variation Revenue 186,072 170,428 15,644 65,137 63,921 1,216 Cost of Sales (111,723) (101,858) (9,865) (40,844) (40,179) (665) Other operating income 3,881 2,870 1,011 1,415 772 643 Gross Profit 78,230 71,440
Slide 22: Detailed Cash Flow
BEFESA ZINC Detailed Cash Flow 9M 3Q Figures in € ‘000 2012 2011 Variation 2012 2011 Variation Cash Flows from Operating Activities Profit for the period before tax 32,426 34,024 (1,598) 10,245 10,915 (670) Adjustments due to: Amortization/ Depreciation 9,694 9,741 (47) 3,233 3,445 (212) (Profit)/Lo
Slide 23: Detailed Segment Reporting
BEFESA ZINC Detailed Segment Reporting 9M 2012 3Q 2012 EBITDA EBITDA Figures in € ‘000 Revenue EBITDA Margin Revenue EBITDA Margin Steel Dust 137,839 57,892 42.0 % 46,440 19,421 41.8 % Stainless Steel 48,233 3,351 6.9 % 18,697 646 3.5 % Total 186,072 61,243 32.9 % 65,137 20,067 30.8 % 9M 2011 3Q 201
Slide 24: Detailed Operational Data
BEFESA ZINC Detailed Operational Data Crude Steel Dust 9M 3Q 2012 2011 Variation 2012 2011 Variation (in Dry Metric Tons) Throughput Crude Steel Dust 397,387.2 404,957.3 -1.9 % 134,755.4 135,723.3 -0.7 % Average Load Factor 94.5 % 96.6 % 95.4 % 96.1 % Waelz Oxide Production 138,050.7 138,585.8 -0.4
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 Q&A 26