Slide 1: Befesa Business Update – December 2018
BEFESA BEFESA Befesa Business Update – December 2018
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 Q3 2018 Update Befesa Overview 3 (Investment Highlights) 4
Slide 5: Executive Summary
BEFESA Executive Summary Achieved good results 9M 2018 with +2% earnings growth YoY; S-DAX entry Zinc hedges in place until July 2021; Providing ~3 years of improved visibility Reduced leverage of x2.4 triggers decrease in interest rate by (25 bps) to E +250 bps; Moody’s upgraded Befesa’s rating by
Slide 6: Mid-Term Growth Roadmap
BEFESA Mid-Term Growth Roadmap Accelerated top- and bottom-line growth through a well-defined strategy 1 Utilization • Increase plant utilization of prior year growth investments mainly Steel Dust Korea 2 Organic Growth 5 2018 Focus: • Steel Dust: 4 - Expand Turkey +45kt Indicative Earnings - Korea
Slide 7: Transformational Growth - China
BEFESA 4 Transformational Growth - China Signed agreement with Jiangsu Changzhou Economic Development Zone and purchasing land use right; Developing 1st steel dust recycling plant … Changzhou Jiangsu province ✓ Chinese government continues to strengthen environmental regulations ✓ Steel dust has bee
Slide 8: Hedging Strategy
BEFESA Hedging Strategy Hedging program in place covering up to July 2021: improving visibility of earnings and cash flows for the next 3 years Market Zinc Price vs. Zinc Hedge ▪ Hedges in place up to and including July 2021 (€/ton) ▪ Increased volume coverage; Higher volume of 7.7 kt/month or 92.4
Slide 9: Consolidated Net Debt / Leverage / Cash Flow / Ratings
Consolidated Net Debt / Leverage / BEFESA Cash Flow / Ratings Leverage of 2.4x at Q3 2018 close Interest cost reducing by 25bps to Euribor+250bps by end of November Net Debt and Leverage Rate Evolution Free Cash Flow(2) (€m) (€m) 524 106 Cash Note: 417 83% 77% 66% €(22)m WC impact: Conversion(3) a
Slide 10: Agenda
BEFESA Agenda 1 Recent Developments 2 Q3 2018 Update Befesa Overview 3 (Investment Highlights) 10
Slide 11: Q3 2018 Key Highlights
BEFESA Q3 2018 Key Highlights 9M 2018: EBITDA €128.9m (+2%); Adj. EBIT: €107.9m (+2%) 9M 2018 with strong net profit of €62.9m (+81%) Guidance 2018 confirmed & concretized: EBITDA at €174-176m (2017: €172m); net profit significantly higher at €83-85m (2017: €49m) which would result in higher dividen
Slide 12: Consolidated Key Financials
BEFESA Consolidated Key Financials 9M Earnings +2%, in line with guidance & on track for €174-176m EBITDA 2018 Revenue(1) Highlights (€m) €(0.2)m / (0.1)% 498,1 539,1 ▪ 9M 2018: EBITDA at €129m (+2.1%); 156,9 156,7 Adj. EBIT at €108m (+1.8%) Q3 '17 Q3 '18 9M '17 9M '18 ▪ Q3 2018 revenue flat at €157
Slide 13: Steel Dust Recycling Services
BEFESA Steel Dust Recycling Services 9M 2018: +4% EBITDA / +6% EBIT, growth driven by higher EAFD throughput; Q3 earnings (-€4m) driven by zinc price decrease partially offset by volume Revenue EAFD Throughput & Capacity Utilization (€m) (thousand tons, % of annual installed capacity) 284,0 243,5 88
Slide 14: Aluminium Salt Slags Recycling Services
BEFESA Aluminium Salt Slags Recycling Services Q3 2018: EBITDA €7.9m (+10%); EBIT €5.5m (+22%) driven by improved metal margin in 2nd Aluminium partially offset by reduced aluminium alloy prices Revenue(1)(2) Volumes & Capacity Utilization (€m) (thousand tons, % of annual installed capacity) 256.8 2
Slide 15: Agenda
BEFESA Agenda 1 Recent Developments 2 Q3 2018 Update Befesa Overview 3 (Investment Highlights) 15
Slide 16: Befesa at a Glance
BEFESA Befesa at a Glance Befesa – European market leader in providing mission critical hazardous waste recycling services to the steel and aluminium industry LTM(1) Q3 2018 Sales: LTM(1) Q3 2018 Adj. €716m(2) EBITDA €175m Secondary Secondary Salt Slags Aluminium Aluminium Recycling 6% 40% Steel Dus
Slide 17: Befesa at a Glance
BEFESA Befesa at a Glance Befesa has grown successfully through organic initiatives and acquisitions Successful Greenfield Frankfurt Stock Founded in Germany Acquisitions & Turnarounds (State of the Art Technology) Exchange & S-DAX 1987 2006 2009 2013 2014 2017 / 2018 Metallgesellschaft, German Befe
Slide 18: Investment Highlights
BEFESA Investment Highlights 2 European Market Leader in Niche Recycling 1 3 Markets with Favourable Macro Competitive Critical and Mega Trends Advantage from Environmental Supporting Steel Plants Close to Regulated Services Dust and Clients to Long-term Aluminium Markets Clients 7 4 Experienced Alu
Slide 19: 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 20: 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 21: Highly Resilient Business
BEFESA 5 Highly Resilient Business Attractive growth track record with stable margins and strong cash generation Sales(1) Adj. EBIT Free Cash Flow(2) (€m) (€m) (€m) Margin Cash Conversion(3) 13% 18% 15% 17% 20% 72% 82% 83% 77% 725 144 4 631 20 133 612 554 103 535 332 95 110 97 3 101 254 281 7 9 18 8
Slide 22: Mid-Term Growth Roadmap
BEFESA 6 Mid-Term Growth Roadmap Accelerated top- and bottom-line growth through a well-defined strategy 1 Utilization • Increase plant utilization of prior year growth investments mainly Steel Dust Korea 2 Organic Growth 5 2018 Focus: • Steel Dust: 4 - Expand Turkey +45kt Indicative Earnings - Kore
Slide 23: 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; includi
Slide 24: Investor Relations
BEFESA Investor Relations Financial Calendar Meet Befesa … ✓ Thursday, November 22, 2018: ✓ October 1, 2018 - Berenberg Publication of Statement Q3 2018 & Analyst Call Milan, Berenberg Milan Seminar ✓ November 15, 2018 - Goldman Sachs Thursday, March 21, 2019: London, Global Natural Resources Confer