Befesa Sa · XETR:BFSA

Befesa Sa — Q1 2017 Earnings Presentation

40 slides from Befesa Sa's earnings presentation, May 30, 2017

  1. Slide 1: First Quarter 2017 Earnings Presentation

    BEFESA BEFESA First Quarter 2017 Earnings Presentation 30th May 2017

  2. Slide 2: Agenda: Introduction, Highlights

    BEFESA Business Steel Dust Aluminium Salt Business Introduction Financials Q&A Appendix Highlights Recycling Services Slags Services Outlook Wolf Lehmann Chief Financial Officer 2

  3. Slide 3: 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

  4. Slide 4: Agenda: Business Highlights

    BEFESA Business Steel Dust Aluminium Salt Business Introduction Financials Q&A Appendix Highlights Recycling Services Slags Services Outlook Javier Molina Chief Executive Officer 4

  5. Slide 5: Befesa 1Q 2017 Highlights

    BEFESA Befesa 1Q 2017 Highlights Strong revenues of €173m / +19% YoY and Earnings Growing to Adj EBITDA of €42m / +76% as well as Adj EBIT of €35m / +114% … Continued Run Rate Growth … LTM(*) 1Q’17 Revenue of €640m, Adj. EBITDA of €151m and Adj. EBIT of €122m Strong core business volume Alu metal ma

  6. Slide 6: Befesa Business at a Glance

    BEFESA Befesa Business at a Glance Befesa is the market leader in providing hazardous waste recycling services to the steel and aluminium recycling industries LTM 1Q ‘17 Revenues: €640m LTM 1Q ‘17 Adj. EBIT: €122m LTM 1Q ‘17 Adj. EBITDA: €151m Salt Slags 2nd Alu 2nd Alu 15% 4% Salt Slags 7% 2nd Alu

  7. Slide 7: Agenda: Steel Dust Recycling Services

    BEFESA Business Steel Dust Aluminium Salt Business Introduction Financials Q&A Appendix Highlights Recycling Services Slags Services Outlook Asier Zarraonandia Managing Director of Steel Dust Recycling Services 7

  8. Slide 8: Consolidated Steel Dust Services – Financial Highlights

    BEFESA Consolidated Steel Dust Services – Financial Highlights YoY increase in revenues and earnings driven by higher volumes as well as higher prices and operational excellence on track … Steel Dust Services – Revenues Revenues Highlights  YoY 1Q ’17 vs. ‘16 revenues increased by €20 281,1 301,4 m

  9. Slide 9: Steel Dust Recycling Services – Operational Performance

    BEFESA Steel Dust Recycling Services – Operational Performance Strong crude steel and WOX volumes; Growth initiatives on track … Growing +13% / +12% YoY respectively Volumes & Capacity Utilization (K tons)  EAF Dust Throughput Highlights  Solid 1Q EAF dust throughput up +13% YoY 588,8 607,3 global

  10. Slide 10: Zinc Prices & Hedging

    BEFESA Zinc Prices & Hedging Blended zinc prices incl. hedging up to €2171 in Q1 … ~Same level as 4Q´16 Zinc Prices  During 1Q ‘17 LME zinc prices traded on avg $1.101/t above 1Q ’16 2H ‘16: 1H ‘17: €2.038/t €1.896/t ($2.780/t vs $1.679/t), and approx. $263/t above 4Q ‘16 avg level. 5.000 € 2013: 2

  11. Slide 11: Agenda: Aluminium Salt Slags Services

    BEFESA Business Steel Dust Aluminium Salt Business Introduction Financials Q&A Appendix Highlights Recycling Services Slags Services Outlook Javier Molina Chief Executive Officer 11

  12. Slide 12: Consolidated Alu Salt Slags Services – Financial Highlights

    BEFESA Consolidated Alu Salt Slags Services – Financial Highlights Growth in revenues driven by strong volumes and recovery in alu alloy prices … Alu metal margin still room to improve further Alu. Salt Slags Services Revenues(*) Revenues Highlights  1Q ‘17 revenues grew 10% YoY mainly due to: 324,

  13. Slide 13: Aluminium Salt Slags Services – Operational Performance

    BEFESA Aluminium Salt Slags Services – Operational Performance Strong volume in both Salt Slags & 2nd Alu; Growth initiatives on track … Bernburg fully loaded … alu metal margin still room to recover Volumes & Capacity Utilization (K tons)  Salt Slags Recycled Highlights  1Q with solid volume grow

  14. Slide 14: Agenda: Financials

    BEFESA Business Steel Dust Aluminium Salt Business Introduction Financials Q&A Appendix Highlights Recycling Services Slags Services Outlook Wolf Lehmann Chief Financial Officer 14

  15. Slide 15: Befesa Consolidated Financial Highlights

    BEFESA Befesa Consolidated Financial Highlights Strong growth in Sales & Earnings YoY … LTM run rate growth on track Befesa Consolidated Revenues Highlights 611,7 639,7 144,8 172,8  1Q ‘17 consolidated revenues at €173 million, +19% or €28 million YoY growth … mainly driven by +12% higher steel dus

  16. Slide 16: Befesa Consolidated P&L

    BEFESA Befesa Consolidated P&L 1Q Total Revenue up +19%/+€28 YoY; Growth Initiatives Delivering … Total EBITDA up +55%/+€13 YoY … Total EBIT up +90%/+€13 YoY Consolidated P&L (‘000 euros) Reported Reported BEFESA Profit & Loss Statement ('000 euros) 1Q 2016 1Q 2017 Change 4Q 2016 1Q 2017 Change Reve

  17. Slide 17: Befesa Consolidated Cash Flow Statement

    BEFESA Befesa Consolidated Cash Flow Statement Strong Cash Generation … Cash Up €38 YoY from €55 to €93 after (€7) Taxes, (€3) Maintenance & Productivity CapEx … Consolidated Cash Flow (‘000 euros) BEFESA Reported Reported Cash Flow Statement ('000) 1Q 2016 1Q 2017 Change 4Q 2016 1Q 2017 Change Cash

  18. Slide 18: Debt Structure & Net Debt Position – March YTD 2017

    BEFESA Debt Structure & Net Debt Position – March YTD 2017 Leverage reduction to x3.0 on track after non-core divestitures … Net Debt / PIK Note 166 M€ Total Net LTM March ‘17 Adj EBITDA Debt(1)(5) 460 M€ x3,0(2) Befesa Medio Ambiente Ring fence structure Steel Dust Recycling Services Aluminium Salt

  19. Slide 19: Benchmarking – Business Model / Characteristics

    BEFESA Benchmarking – Business Model / Characteristics Befesa shows the key characteristics of a premium services and waste management company Premium Metal Standard Biz. Services / Recyclers Biz. Services Waste Mgmt. Stability of earnings     Delivering “mission critical” services     High

  20. Slide 20: Benchmarking – Financial Comparison

    BEFESA Benchmarking – Financial Comparison Befesa's financial performance is closest to Business Services companies and US Waste players … 2017 2017 Cash Revenue Growth EBIT Margin Flow Conversion1 (13-16A CAGR) 19% 72% 4.6% Greater (1Q17 LTM) (2016) Similarity Business 12% 75% 5.0% Services Hazardo

  21. Slide 21: Agenda: Outlook

    BEFESA Business Steel Dust Aluminium Salt Business Introduction Financials Q&A Appendix Highlights Recycling Services Slags Services Outlook Javier Molina Chief Executive Officer 21

  22. Slide 22: 2017 Main Priorities & Overview

    BEFESA 2017 Main Priorities & Overview Main Priorities for 2017 Business & Market Overview Focus on profitable growth in core 2017 expected to be another good markets (Steel Dust & Alu Salt Slags) year for Befesa based on current … Continuing operational excellence market trends …  Maintain a leadi

  23. Slide 23: Q&A

    BEFESA Business Steel Dust Aluminium Salt Business Introduction Financials Q&A Appendix Highlights Recycling Services Slags Services Outlook Q&A 23

  24. Slide 24: Appendix

    BEFESA Business Steel Dust Aluminium Salt Business Introduction Financials Q&A Appendix Highlights Recycling Services Slags Services Outlook Appendix 24

  25. Slide 25: Befesa New Financial Segmentation Reporting

    BEFESA Befesa New Financial Segmentation Reporting Financial Reporting by Segments adjusted to reflect new business perimeter after divestitures … Previous Financial Segmentation New Financial Segmentation  Zinc Business  Steel Dust Recycling Services(*) - Crude Steel - Stainless Steel  Non Zinc

  26. Slide 26: Steel Dust Recycling Services – Operational Data

    BEFESA Steel Dust Recycling Services – Operational Data 1Q 1Q 1Q 2017 vs 2016 Change 2016 2017 (tons) (%) Crude steel dust recycling Installed capacity1 tons 780.300 780.300 0 0,0% Crude steel dust processed tons 138.121 156.537 18.416 13,3% Waelz oxide produced tons 47.502 53.880 6.378 13,4% Waelz

  27. Slide 27: Aluminium Salt Slags Services – Operational Data

    BEFESA Aluminium Salt Slags Services – Operational Data 1Q 1Q 1Q 2017 vs 2016 Change 2016 2017 (tons) (%) Salt slags and SPLs recycling Installed capacity6 tons 609.000 609.000 0 0,0% Salt slags recycled tons 109.414 117.959 8.545 7,8% SPLs recycled tons 9.126 8.233 (893) -9,8% Aluminium concentrate

  28. Slide 28: Crude Steel – Financial Highlights

    BEFESA Crude Steel – Financial Highlights Higher EBITDA and EBIT YoY in our crude steel segment mainly due to recovering zinc prices and higher WOX volumes sold Crude Steel Revenues 263,9 238,0 74,2 48,2 1Q 2016 1Q 2017 FY 2016 LTM 1Q 17 Crude Steel Adj. EBITDA 98,0 115,0 16,0 33,0 1Q 2016 1Q 2017 F

  29. Slide 29: Stainless Steel – Financial Highlights

    BEFESA Stainless Steel – Financial Highlights Lower stainless steel volumes paired with margin in the sale of alloys still depressed … ScanDust shutdown resolved end of May Stainless Revenues 43,1 37,5 9,7 4,1 1Q 2016 1Q 2017 FY 2016 LTM 1Q 17 Stainless Adj. EBITDA 1,0 (0,0) (0,1) 1Q 2016 1Q 2017 FY

  30. Slide 30: Salt Slags – Financial Highlights

    BEFESA Salt Slags – Financial Highlights Good volumes of salt slags … Aluminium alloy LME prices recovering but still room to improve Salt Slags Revenues 78,9 80,0 19,6 20,7 1Q 2016 1Q 2017 FY 2016 LTM 1Q 17 Salt Slags Adj. EBITDA 24,4 24,0 6,1 5,8 1Q 2016 1Q 2017 FY 2016 LTM 1Q 17 31% 28% 31% 30% S

  31. Slide 31: Secondary Aluminium – Financial Highlights

    BEFESA Secondary Aluminium – Financial Highlights Record volumes of aluminium alloys produced and sold … But aluminium metal margin still room to improve further Sec. Aluminium Revenues 285,5 293,5 74,2 82,2 1Q 2016 1Q 2017 FY 2016 LTM 1Q 17 Sec. Aluminium Adj. EBITDA 9,0 10,4 1,0 2,4 1Q 2016 1Q 201

  32. Slide 32: Segmentation Overview – Key Metrics

    BEFESA Segmentation Overview – Key Metrics Steel Dust Recycling Services Operational data (Kt) 2013 2014 2015 2016 1Q 2016 1Q 2017 Financial data (M€) Crude Stainless Total Crude Stainless Total Crude Stainless Total Crude Stainless Total Crude Stainless Total Crude Stainless Total Steel dust treate

  33. Slide 33: EBITDA & EBIT – Proforma / Adjusted Reconciliation

    BEFESA EBITDA & EBIT – Proforma / Adjusted Reconciliation (Figures in million euros) 2013 2014 2015 2016 1Q 16 1Q 17 LTM 1Q17 EBITDA Proforma-Adjusted Revenues 535,2 554,5 631,2 611,7 144,8 172,8 639,7 EBITDA Proforma 84,0 124,9 128,0 128,8 22,9 35,5 141,3 Adjustments to EBITDA: Steel Dust Recycling

  34. Slide 34: Consolidated Steel Dust Recycling Services – Detailed P&L

    BEFESA Consolidated Steel Dust Recycling Services – Detailed P&L BEFESA ZINC Profit & Loss Statement ('000 euros) 1Q 2016 1Q 2017 Change 4Q 2016 1Q 2017 Change Revenue 57.980 78.311 20.331 81.288 78.311 (2.977) Cost of sales (36.889) (45.772) (8.883) (44.956) (45.772) (816) Other operating income 45

  35. Slide 35: Consolidated Steel Dust Recycling Services – Detailed B/S

    BEFESA Consolidated Steel Dust Recycling Services – Detailed B/S BEFESA ZINC Balance Sheet ('000 Euros) Assets 31.03.2017 31.12.2016 Equity and liabilities 31.03.2017 31.12.2016 Non-current assets: Equity: Intangible assets: Of the Parent: Goodwill 278.357 278.357 Share capital 25.010 25.010 Other i

  36. Slide 36: Consolidated Steel Dust Services – Cash Flow & Liquidity

    BEFESA Consolidated Steel Dust Services – Cash Flow & Liquidity 1Q 2017 with positive cash flow driven by operating activities  Operating activities: During 1Q 2017 net cash flows generated by operating activities amounted to €16,3 million (a €12m increase vs 1Q 2016), driven by the EBITDA improvem

  37. Slide 37: Consolidated Steel Dust Recycling Services – Detailed CF

    BEFESA Consolidated Steel Dust Recycling Services – Detailed CF BEFESA ZINC Cash Flow Statement ('000 euros) 1Q 2016 1Q 2017 Change 4Q 2016 1Q 2017 Change Cash flows from operating activities Profit for the period before tax 3.481 16.376 12.895 12.741 16.376 3.635 Adjustments due to: Amortization /

  38. Slide 38: Befesa Consolidated – Detailed P&L

    BEFESA Befesa Consolidated – Detailed P&L BEFESA Profit & Loss Statement ('000 euros) 1Q 2016 1Q 2017 Change 4Q 2016 1Q 2017 Change From continuing operations: Revenue 144.758 172.790 28.032 161.916 172.790 10.874 +/- Changes in inventories of finished goods & work in progress (2.215) 741 2.956 (1.2

  39. Slide 39: Befesa Consolidated – Detailed Balance Sheet

    BEFESA Befesa Consolidated – Detailed Balance Sheet BEFESA Balance Sheet ('000 euros) Assets 31.03.17 31.12.16 Equity and liabilities 31.03.17 31.12.16 Equity: Non-current assets Attibutable to owners of the parent - Intangible assets Share capital 13 13 Goodwill 319.143 319.143 Reserve for valuatio

  40. Slide 40: Befesa Consolidated – Detailed Cash Flow Statement

    BEFESA Befesa Consolidated – Detailed Cash Flow Statement BEFESA Cash Flow Statement ('000) 1Q 2016 1Q 2017 Change 4Q 2016 1Q 2017 Change Cash flows from operating activities: Profit (loss) for the period before tax 3.311 21.271 17.960 (94.709) 21.271 115.980 From continuing operations: 4.691 17.359

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