Befesa SA · XETR:BFSA
Befesa SA — GS&Berenberg Eighth German Corporate Conference 2019
27 slides from Befesa SA's conference presentation, Sep 25, 2019
Slide 1: Befesa Presentation
BEFESA BEFESA Befesa Presentation GS&Berenberg Eighth German Corporate Conference Munich, 23 - 25 September 2019
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: Agenda
BEFESA Agenda 1 Recent Developments 2 H1 2019 Update Befesa Overview 3 (Investment Highlights) 4
Slide 5: Highlights
BEFESA Highlights H1 at €80m EBITDA; down -10%/€-9 YoY as anticipated per guidance & sensitivities: - Lower volume due to Turkey upgrade & Plant maintenance schedule H1>H2 - Unfavourable market prices: $245/t TC; €2,420 Avg. LME Zinc; €1,460 avg. Alu Alloy + Partially offset by higher hedges, recove
Slide 6: Consolidated Net Debt / Leverage
Consolidated Net Debt / Leverage BEFESA / Cash Flow / Capital Structure Successfully closed long-term capital structure with 7-year tenor up to 2026 at attractive interest rates; €170 cash and leverage ~stable at x2.2 in Q2’19 Net debt H1’19 EBITDA to total cash flow – main drivers (€m, as of 30 Jun
Slide 7: Zinc Prices & Hedging Strategy
BEFESA Zinc Prices & Hedging Strategy Hedging up to Oct. ´21 improves earnings & cash flows visibility for next 2+ yrs € 3,000 Market zinc price vs. zinc hedges (€/tonne) € 2,500 ~€2,310 ~€2,250 €2,168 9M ’21: €2,160 ~€2,200 € 2,000 €2,051 Closed ~half of €1,939 €1,876 Q3 ’21 targeted hedge volume €
Slide 8: Mid-Term Growth Roadmap
BEFESA Mid-Term Growth Roadmap Accelerating growth through well defined business plan; Hedging in place and executing top 5 growth projects + China 1 Hedging • 2019: 92.4kt at ~€2,310/t • 2020: 92.4kt at ~€2,250/t • 9M 2021: 56.7kt at ~€2,200/t 2 Organic growth 2019/20 focus – top 5 projects: • Stee
Slide 9: Turkey – Plant Upgrade Completed
BEFESA 2 Turkey – Plant Upgrade Completed Turkey upgrade completed on time and budget … Including “Hot Commissioning” & Ramp Up in August overall in 7 months New Ki Iskenderun, Turkey – Expanded 110k Tonnes Steel Dust Recycling Capacity Comments ✓ Electric Arc Furnace (EAF) dust recycling plant “bro
Slide 10: Korea – Zinc Oxide Washing Plant Status
BEFESA 2 Korea – Zinc Oxide Washing Plant Status To Date on Schedule … Targeting Ramp Up in Nov/Dec 2019 Pohang, South Korea – Status of Construction of Zinc Oxide Washing Plant New Ki Comments ➢ “Greenfield” investment in first Zinc Oxide washing plant of Befesa at Asia ➢ To date on time and budget
Slide 11: China – Plant #1: Jiangsu – Construction in Process
BEFESA 3 China – Plant #1: Jiangsu – Construction in Process Changzhou plant construction in process after breaking ground in April 2019; Ramp-up scheduled during H2 2020 1 Plant #1 in Changzhou (Jiangsu province) Key facts of the plant • 1st Electric Arc Furnace (EAF) dust recycling plant in China
Slide 12: China – Plant #2: Henan – Status Update
BEFESA 3 China – Plant #2: Henan – Status Update Signed development agreement on 8 April 2019; Ground breaking scheduled for Q4 2019 2 Plant #2 in Xuchang (Henan province) Henan background Key facts of the plant Henan is located in central China, with a population of 95 • 2nd EAF dust recycling plan
Slide 13: Agenda
BEFESA Agenda 1 Recent Developments 2 H1 2019 Update Befesa Overview 3 (Investment Highlights) 13
Slide 14: Consolidated Key Financials
BEFESA Consolidated Key Financials Q2 EBITDA at €37m (€-7m YoY): Lower volume due to Turkey upgrade & plant maintenance schedule; Unfavourable TC & market prices; Partially offset by higher hedges, recovering Stainless and Alu furnace upgrades Revenue Highlights (€m) ▪ Q2 revenue down 9.1% YoY to €1
Slide 15: Steel Dust Recycling Services
BEFESA Steel Dust Recycling Services Q2 EBITDA at €27.7m, (€-6.0m YoY); driven by lower volume in Turkey, scheduled maintenance & unfavourable TC; partially offset by improved hedges & Stainless Revenue EAF dust throughput & capacity utilisation (€m) (thousand tonnes, % of annual installed capacity)
Slide 16: Aluminium Salt Slags Recycling Services
BEFESA Aluminium Salt Slags Recycling Services H1 EBITDA at €18.7m (~flat YoY) mainly driven by furnace upgrades in 2018 showing results (2nd Aluminium) ~offset by lower aluminium alloy prices Revenue(1) Volumes & capacity utilisation (€m) (thousand tonnes, % of annual installed capacity) 189.2 163.
Slide 17: Summary
BEFESA Summary Volumes and growth projects as expected … Market prices volatile; Impacting earnings per sensitivity guidance H1 volumes ~stable in both core businesses normalizing for Turkey plant upgrade; Expecting higher volumes in H2 due to Turkey back in operations in August and fewer plant main
Slide 18: Agenda
BEFESA Agenda 1 Recent Developments 2 H1 2019 Update Befesa Overview 3 (Investment Highlights) 18
Slide 19: Befesa at a Glance
BEFESA Befesa at a Glance Befesa a market leader in Europe & Asia in providing mission critical hazardous waste recycling services to the steel and aluminium industry LTM Q2 2019 Revenue: €687m(1) LTM Q2 2019 EBITDA: €167m 2nd 2nd Aluminium Aluminium 38% 9% Steel Dust 51% Salt Slags Steel Dust 14% 7
Slide 20: Befesa at a Glance
BEFESA Befesa at a Glance Befesa has grown successfully through organic initiatives and acquisitions Successful greenfield Frankfurt Stock Exchange Founded in Germany Acquisitions & turnarounds (state-of-the-art technology) & SDAX 1987 2006 2009 2013 2014 2017 / 2018 Metallgesellschaft, German Befes
Slide 21: Investment Highlights
BEFESA Investment Highlights 2 European market leader in niche recycling 1 3 markets with Favourable macro competitive advantage from Critical and mega trends plants close to environmental supporting Steel clients regulated services Dust and to long-term clients Aluminium markets 7 4 Experienced Alu
Slide 22: Market Leader and Close Proximity to Clients
BEFESA 2 Market Leader and Close Proximity to Clients Befesa is the market leader in steel dust and salt slags recycling services with a competitive advantage due to its close proximity to key clients Established market leader Proximity to clients provides strong competitive advantage Steel Dust Rec
Slide 23: Critical Service – Highly Regulated
BEFESA 3 Critical Service – Highly Regulated Befesa offers a crucial service taking care of highly regulated hazardous waste in the value chain of secondary steel and aluminium producers Recycling service Consequences of Hazardous waste non-compliance Steel Dust value Steel WOX • Major European stee
Slide 24: Highly Resilient Business
BEFESA 5 Highly Resilient Business Revenue(1) EBITDA and % margin(2) (€m) (€m) 22% 26% 24% 720 667 172 176 594 9 12 296 300 133 27 25 268 9 83 24 83 79 135 137 332 381 99 281 2016 A 2017 A 2018 A 2016 A 2017 A 2018 A EBIT and % margin(2) Operating cash flow(3) (€m) (€m) Incl. ~€30m one-off 17% 22% 2
Slide 25: Mid-Term Growth Roadmap
BEFESA 6 Mid-Term Growth Roadmap Accelerating growth through well defined business plan; Hedging in place and executing top 5 growth projects + China 1 Hedging • 2019: 92.4kt at ~€2,310/t • 2020: 92.4kt at ~€2,250/t • 9M 2021: 56.7kt at ~€2,200/t 2 Organic growth 2019/20 focus – top 5 projects: • St
Slide 26: Experienced Management Team
BEFESA 7 Experienced Management Team Senior management team delivering results through long standing industry expertise, entrepreneurial spirit and focus on operational excellence as well as governance and compliance processes Javier Molina Wolf Lehmann Key achievements / track record CEO CFO; inclu
Slide 27: Investor Agenda
BEFESA Investor Agenda Financial Calendar Meet Befesa … ✓ Wednesday, 19 June 2019: ✓ 14 May 2019 – Midcap Partners Annual General Meeting in Luxembourg Paris, Annual Small & Midcap Conference ✓ 21-23 May 2019 – Berenberg New York, US Conference 2019 ✓ Thursday, 25 July 2019: ✓ 28 May 2019 – Mainfirs
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