Befesa Sa · XETR:BFSA
Befesa Sa — Befesa Zinc — Q3 2013 Earnings Presentation
26 slides from Befesa Sa's earnings presentation, Nov 14, 2013
Slide 1: Third Quarter 2013 Earnings Presentation
BEFESA ZINC BEFESA ZINC Third Quarter 2013 Earnings Presentation 14th November 2013
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 2013 Key Highlights
BEFESA ZINC 9M 2013 Key Highlights Business performance affected by low commodity prices Revenues EBITDA 186.1 M€ 54.3 M€ 0.0 % (186.1 M€ 9M 2012) 11.3 % (61.2 M€ 9M 2012) 9.8 42.6 186.1 133.7 (2.3) 0.6 56.1 54.3 Crude Stainless Others * Total Crude Stainless Others * Total 72% 23% 5% 100% 103% -4%
Slide 5: Agenda
BEFESA ZINC Agenda 1 3Q & 9M Business Highlights 2 3Q & 9M Financial Highlights 3 Outlook 4 Appendix 5
Slide 6: 9M 2013 Crude Steel
BEFESA ZINC 9M 2013 Crude Steel We continue to deliver high margins in a challenging zinc commodity price environment 133.7 M€ Revenues in 9M 2013, a decrease of 3.0% YoY 56.1 M€ EBITDA in 9M 2013, a decrease of 3.0% YoY 42.0 % Average EBITDA margin (vs. 42.0% 9M 2012) 92.2 % Average Load Factor (vs
Slide 7: 9M 2013 Stainless Steel
BEFESA ZINC 9M 2013 Stainless Steel Stainless steel business severely affected by weak market conditions and commodity prices 42.6 M€ Revenues in 9M 2013, an decrease of 11.7% YoY -2.4 M€ EBITDA in 9M 2013, a decrease of 170.0% YoY -5.5 % Average EBITDA margin (vs. 6.9% 9M 2012) 62.7 % Average Load
Slide 8: 9M 2013 Business Highlights
BEFESA ZINC 9M 2013 Business Highlights Good 9M in general, given the current macro economic turmoil 1 Similar throughput levels (-0.6% YoY) and slightly lower average load factor (92.2% vs. 94.5%) due to more planned maintenance shutdowns 2 WOX: Lower sales (-2.3% YoY) and lower production levels (
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 Slight margin deterioration on a YoY basis but still around 30% During the 3Q 2013 consolidated revenues slightly decreased by 1% YoY and the EBITDA decreased by 9% YoY mainly due to the stainless steel business 3Q 2013 EBITDA reached €18.2m, representing an average
Slide 11: Steel Dust Segment
BEFESA ZINC Steel Dust Segment High and stable margin in steel dust despite a decline zinc LME prices 3Q 2013 steel dust revenues increased by 8% and the EBITDA increased by 6% YoY mainly due to a 5% increase in the in the tons of WOX sold partly offset by a 7% reduction in the LME zinc prices and t
Slide 12: Stainless Steel Segment
BEFESA ZINC Stainless Steel Segment Stainless steel heavily affected by commodity prices 3Q 2013 stainless steel revenues decreased by 37% and the EBITDA fell significantly due to the weakness of the segment, as well as the 43% reduction of alloys sold and the nickel prices by 19% 9M 2013 stainless
Slide 13: Cash Flow & Liquidity
BEFESA ZINC Cash Flow & Liquidity Cash flow generation affected by the results of the operations Operating activities: During the year of 2013 the net cash flows used in operating activities increased in €20.7m and it reduced in €8.1m compared to 2012, mainly due to the reduction in the cash generat
Slide 14: Agenda
BEFESA ZINC Agenda 1 3Q & 9M Business Highlights 2 3Q & 9M Financial Highlights 3 Outlook 4 Appendix 14
Slide 15: Outlook
BEFESA ZINC Outlook We maintain a positive outlook for the rest of 2013 1 2013 load factor will not be affected at current levels of EAF production Steel Dust 2 Similar levels of EAF production expected for the rest of 2013 than for 2012 3 Strong demand for WOX from zinc smelters 1 No major changes
Slide 16: Outlook (cont'd)
BEFESA ZINC Outlook (cont’d) Growth strategy focused on South Korea and Turkey steel dust recycling projects 1 New 110,000 tons/year plant in Adana (near Iskenderun): Lands obtained and partially paid; permits and authorizations process currently ongoing 2 Financing for Adana approved by EBRD*. EAF
Slide 17: Turkey and South Korea
BEFESA ZINC Turkey and South Korea Growth strategy focused on South Korea and Turkey steel dust recycling projects Turkey South Korea 5th largest EAF steel producer 4th largest EAF steel producer EAF Steel Market 20-30% Zinc in EAF dust 20-30% Zinc in EAF dust Relatively strict and catching-up with
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 14 months 2.000 2012: 2013: 1,703 €/t 1,700 €/t 1.800 Q2 2014: 1,500 €/t 1.600 1,560 €/t 1.400 Q1 2014: 1,550 €/t 1.200 H2 2014: option floor @ 1,300 €/t 1.000 LME
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 30.09.2013 31.12.2012 Equity and Liabilities 30.09.2013 31.12.2012 Non-current assets: Equity: Intangible assets: of the Parent: Goodwill 299,425 279,079 Share capital 25,010 25,010 Other intangible assets 8,994 9,555 Unrealized Asset and L
Slide 21: Detailed Consolidated P&L
BEFESA ZINC Detailed Consolidated P&L Figures in € ‘000 9M 3Q 2013 2012 Variation 2013 2012 Variation Revenue 186,101 186,072 29 64,479 65,137 (658) Cost of sales (118,392) (111,723) (6,669) (40,719) (40,844) 125 Other operating income 4,050 3,881 169 802 1,415 (613) Gross Profit 71,759 78,230 (6,47
Slide 22: Detailed Cash Flow
BEFESA ZINC Detailed Cash Flow 9M 3Q Figures in € ‘000 2013 2012 Variation 2013 2012 Variation Cash Flows from Operating Activities Profit for the period before tax 22,450 32,426 (9,976) 7,239 10,245 (3,006) Adjustments due to: Amortization/ Depreciation 11,289 9,694 1,595 3,912 3,233 679 (Profit)/L
Slide 23: Detailed Segment Reporting
BEFESA ZINC Detailed Segment Reporting 9M 2013 3Q 2013 EBITDA EBITDA Figures in € ‘000 Revenue EBITDA Margin Revenue EBITDA Margin Steel Dust 133,712 56,131 42.0% 50,044 20,570 41.1% Stainless Steel 42,613 (2,346) -5.5% 11,743 (2,277) -19.4% Galvanization 9,776 551 5.6% 2,692 (50) -1.9% Total 186,10
Slide 24: Detailed Operational Data
BEFESA ZINC Detailed Operational Data Crude Steel Dust 9M 3Q 2013 2012 Variation 2013 2012 Variation (in Dry Metric Tons) Throughput Crude Steel Dust 394,807.5 397,387.2 -0.6% 137,587.6 134,755.4 +2.1% Average Load Factor 92.2% 94.5% 91.6% 95.4% Waelz Oxide Production 136,170.8 138,050.7 -1.4% 50,17
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 — QRA