Slide 1: Second Quarter 2015 Earnings Presentation
BEFESA BEFESA Second Quarter 2015 Earnings Presentation 27th August 2015
Slide 2: Forward-looking Statement
BEFESA Forward-looking Statement This presentation contains forward-looking statements and information relating to Befesa and its affiliates that are based on the beliefs of its management as well as assumptions made and information currently available to Befesa and its affiliates. Such statements r
Slide 3: Introduction – Rafael Pérez
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Rafael Pérez Head of Strategy & Investor Relations 3
Slide 4: Highlights – Javier Molina
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Javier Molina Chief Executive Officer 4
Slide 5: Befesa 2Q 2015 Highlights
BEFESA Befesa 2Q 2015 Highlights Continued solid growth in all three units. 2Q revenues of €211m, up 37% YoY. Higher commodity prices, new Bernburg plant and Solarca acquisition. Strong consolidated 2Q EBITDA of €43 million, up 28% YoY. Margins at 21%. 1H 2015 up 30% YoY. Solid and stable financing
Slide 6: Zinc Business Performance – Asier Zarraonandia
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Asier Zarraonandia Managing Director of Zinc Business 6
Slide 7: Zinc Business Performance
BEFESA Zinc Business Performance Volume in crude steel impacted by more plant standstills during the quarter vs. previous year Operational Performance EAF Throughput Highlights - 136.916 tons of crude steel dust treated in 2Q Crude steel dust deliveries in line with 2015 (+0,8% vs 2Q 2014); 278.452
Slide 8: Zinc Prices & Hedging
BEFESA Zinc Prices & Hedging Zinc prices during 2Q 2015 maintained the upward trend seen during 1Q 2015 ending the quarter around 1.800 €/t 2.200 € 2012: 2013: 1Q 2014: €1.703/t €1.700/t €1.550/t Zinc Prices 2.000 € During the 2Q 2015 zinc prices traded on average above 2Q 2014 ($2.190/t vs $2.073/t
Slide 9: Non-Zinc Business Performance – Javier Molina
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Javier Molina Chief Executive Officer 9
Slide 10: Aluminum Performance
BEFESA Aluminum Performance Good performance mainly driven by stronger secondary alu volumes as well as salt slag volumes mainly driven by new plant in Germany Operational Performance Salt Slag/SPLs Recycled Highlights - 124.588 tons of salt slag/SPL recycled in 2Q 2015 Strong secondary aluminum vol
Slide 11: 2015 Growth Strategy – Aluminum and IES
BEFESA 2015 Growth Strategy – Aluminum and IES Bernburg ramp up on track. Gulf Project Progressing … Successful acquisition and integration of Solarca into our IES segment Aluminum Growth New Secondary Aluminum Plant in Bernburg (Germany) Ramp up of the plant on track (75% capacity loaded in 2015) S
Slide 12: Financials – Wolf Lehmann
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Wolf Lehmann Chief Financial Officer 12
Slide 13: Zinc Financial Highlights
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Zinc Financial Highlights 13
Slide 14: Crude Steel Financial Highlights
BEFESA Crude Steel Financial Highlights Better YoY crude steel segment EBITDA mainly due to the increase in zinc prices and continued operational excellence Revenues Highlights Crude Steel Revenues (€m) 2014 2015 Crude steel dust segment 2Q revenues increased by 17% y/y mainly driven by: - Zinc blen
Slide 15: Stainless Steel Financial Highlights
BEFESA Stainless Steel Financial Highlights Positive stainless steel quarter mainly driven by higher volumes and cost saving measures Stainless Revenues (€m) Revenues Highlights 2014 2015 During 2Q 2015 Stainless steel dust segment revenues increased by 24% compared to the same period of 2014 mainly
Slide 16: Consolidated Zinc Financial Highlights
BEFESA Consolidated Zinc Financial Highlights Strong growth in revenues and EBITDA in the Zinc business unit Zinc Revenues (€m) 2014 2015 137,1 119,5 59,6 71,1 2Q '15 vs '14 1H '15 vs '14 Zinc EBITDA (€m) 2014 2015 33% 35% 32% 36% 49,7 38,5 19,8 24,9 2Q '15 vs '14 1H '15 vs '14 % 2014 EBITDA margin
Slide 17: Zinc Cash Flow & Liquidity
BEFESA Zinc Cash Flow & Liquidity Good operating results drive cash flow generation generation Operating activities: During 1H 2015 the net cash flows generated by operating activities amounted to €24,7 million (a €13m increase vs 1H 2014), driving the EBITDA increase in the two first quarters, and
Slide 18: Aluminum Financial Highlights
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Aluminum Financial Highlights 18
Slide 19: Aluminum Financial Highlights
BEFESA Aluminum Financial Highlights Strong 2Q 2015 EBITDA of €12m (12% margin) driven mainly by Bernburg contribution and higher Alu prices Aluminum Revenues (€m) 2014 2015 Revenues Highlights During 2Q 2015 revenues increased 49% (compared to 191,6 2Q 2014) mainly driven by better secondary alumin
Slide 20: IES Financial Highlights
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook IES Financial Highlights 20
Slide 21: IES Financial Highlights
BEFESA IES Financial Highlights Strong quarter driven by contribution from Solarca –successfully acquired and integrated– and higher volumes in Sulfur IES Revenues (€m) 2014 2015 Revenues Highlights During 2Q 2015 revenues increased 45% (compared to 2Q 2014) mainly driven by the Solarca acquisition
Slide 22: Consolidated Non-Zinc Financial Highlights
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Consolidated Non-Zinc Financial Highlights 22
Slide 23: Consolidated Non-Zinc Financial Highlights
BEFESA Consolidated Non- Zinc Financial Highlights Strong growth in revenues and EBITDA in the non-Zinc business Non-Zinc Revenues (€m) 2014 2015 261,0 191,8 140,1 95,1 2Q '15 vs '14 1H '15 vs '14 Non-Zinc EBITDA (€m) 2014 2015 15% 13% 12% 12% 30,9 18,5 23,5 14,2 2Q '15 vs '14 1H '15 vs '14 % 2014 E
Slide 24: Consolidated Financial Highlights
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Consolidated Financial Highlights 24
Slide 25: Consolidated Financial Highlights
BEFESA Consolidated Financial Highlights 1H ’15 revenues up 28% and EBITDA up 30% vs. 1H ‘14 Revenues (€m) Highlights 398,1 M€ 211,2 M€ 311,2 M€ 18% 2Q 2015 consolidated revenues amounted 154,7 M€ 20% 18% to €211 million, +37% growth compared to 48% 18% 44% the same period of 2014, mainly driven by
Slide 26: Consolidated P&L
BEFESA Consolidated P&L 2Q 2015 EBITDA Up 28% or €9 million vs. 2Q 2014 … Net Income Up 34% or €2 million Consolidated P&L (‘000 euros) BEFESA Profit & Loss Statement ('000 euros) 2Q 2014 2Q 2015 Change 1H 2014 1H 2015 Change Revenue 154.657 211.196 56.539 311.226 398.149 86.923 EBITDA 33.946 43.328
Slide 27: Consolidated Cash Flow Statement
BEFESA Consolidated Cash Flow Statement Operating activities: During 1H 2015 the net cash flows generated by operating activities amounted to €44,0 million (a €39,7 million increase compared to 1H 2014), mainly due to the better performance of all the business units in 2015 and an unusual impact in
Slide 28: Debt Structure & Net Debt Position – June YTD 2015
BEFESA Debt Structure & Net Debt Position – June YTD 2015 Solid and stable financing position at 3 levels (Zinc, Non-Zinc and Corporate) with total leverage at x3,6 Net Debt / LTM Total Net Jun 2015 EBITDA PIK Note 162 M€ Debt(1) 574 M€ x3,6(2) Befesa Medio Ambiente Ring fence structure Zinc Non Zin
Slide 29: Outlook – Javier Molina
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Javier Molina Chief Executive Officer 29
Slide 30: 2015 Business Focus
BEFESA 2015 Business Focus Main priorities for 2015 focused on parallel path of operational excellence and profitable growth for the next years Main priorities for 2015 on track • Expand plant and maintain leadership position of Befesa Zinc in South Korea, a key market for Befesa • Deliver our new s
Slide 31: Questions
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Questions 31
Slide 32: Appendix
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook 32
Slide 33: Consolidated P&L
BEFESA Consolidated P&L BEFESA Profit & Loss Statement ('000 euros) 2Q 2014 2Q 2015 Change 1H 2014 1H 2015 Change From continuing operations: Revenue 154.657 211.196 56.539 311.226 398.149 86.923 +/- Changes in inventories of finished goods and work in progress (857) (38) 819 (548) (558) (10) Cost o
Slide 34: Consolidated Balance Sheet
BEFESA Consolidated Balance Sheet BEFESA Balance Sheet ('000 euros) Assets 30.06.15 31.12.14 Equity and liabilities 30.06.15 31.12.14 Equity: Non-current assets Attibutable to owners of the parent - Intangible assets Share capital 13 13 Goodwill 379.289 373.860 Reserve for valuation adjustments defe
Slide 35: Consolidated Cash Flow Statement
BEFESA Consolidated Cash Flow Statement BEFESA Cash Flow Statement ('000 euros) 2Q 2014 2Q 2015 Change 1H 2014 1H 2015 Change Cash flows from operating activities: Profit (loss) for the period before tax 10.631 13.356 2.725 15.181 30.173 14.992 Adjustments due to: Depreciation and amortisation charg
Slide 36: Zinc Detailed Balance Sheet
BEFESA Zinc Detailed Balance Sheet BEFESA ZINC Balance Sheet ('000 Euros) Assets 30.06.2015 31.12.2014 Equity and Liabilities 30.06.2015 31.12.2014 Non-Current Assets: Equity: Intangible assets: Of the Parent: Goodwill 286.287 286.287 Share capital 25.010 25.010 Unrealized Asset and Liability Revalu
Slide 37: Zinc Detailed P&L
BEFESA Zinc Detailed P&L BEFESA ZINC Profit & Loss Statement ('000 euros) 2Q 2014 2Q 2015 Change 1H 2014 1H 2015 Change Revenue 59.605 71.059 11.454 119.363 137.106 17.743 Cost of sales (38.575) (40.867) (2.292) (75.614) (76.988) (1.374) Other operating income 4.111 521 (3.590) 5.493 1.215 (4.278) G
Slide 38: Zinc Detailed Cash Flow
BEFESA Zinc Detailed Cash Flow BEFESA ZINC Cash Flow Statement ('000 euros) 2Q 2014 2Q 2015 Change 1H 2014 1H 2015 Change Cash Flows From Operating Activities Profit for the period before tax 7.159 11.957 4.798 13.561 24.579 11.018 Adjustments due to: Amortization/ Depreciation 4.115 4.374 259 8.168