Slide 1: Earnings Presentation
Earnings Presentation 31 October 2024
Slide 2: Disclaimer
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. Such s
Slide 3: Today’s presenters
Today’s presenters Asier Zarraonandia Rafael Pérez CEO CFO >20 years with >15 years with Befesa Befesa 3 Q3 2024 Earnings Presentation
Slide 4: Business highlights
O71 / Business highlights
Slide 5: Strong Q3, up 16% YoY, despite challenging macroeconomic environment
Strong Q3, up 16% YoY, despite challenging macroeconomic environment Revenue Adjusted EBITDA Operating Cash Flow Q3: €294m 2% YoY Q3: €49m 16% YoY Q3: €48m 62% YoY 9M: €915m 1% YoY 9M: €152m 11% YoY 9M: €118m 39% YoY • Small revenue increase of 2% driven by higher Salt Slags activity • EBITDA margin
Slide 6: Steel Dust business highlights
Steel Dust business highlights Strong Steel dust recycling operations in Europe and US partially offset by zinc refining contribution EUROPE USA ASIA • Steel production in Europe at 5- • Good utilization levels in the steel • EAF dust volume throughput year low impacted by weak dust recycling plants
Slide 7: Aluminium business highlights
Aluminium business highlights Strong salt slags recycling performance partially offset by weak secondary aluminum metal margin Salt Slags recycling 2nd aluminum • Strong volume of salt slag recycled with plants • Very weak European automotive industry running at 90% capacity utilization impacting de
Slide 8: Financial results
@ ? Financial results
Slide 9: Steel Dust Recycling Services Financials
Steel Dust Recycling Services Financials Favourable blended price and TC together with lower coke and energy price, partially offset by zinc refining in the US YoY EBITDA 9M 2023 to 9M 2024 9m 2023 9m 2024 change (%) 19% Revenue €m 605.3 603.5 0% 8 Adjusted EBITDA €m 101.8 121.6 +19% -16 122 Adjuste
Slide 10: Aluminium Salt Slags Recycling Services Financials
Aluminium Salt Slags Recycling Services Financials EBITDA impacted by compressed aluminum metal margin, partially compensated by lower energy prices Salt slags volume growth. EBITDA 9M 2023 to 9M 2024 YoY 9m 2023 9m 2024 change (%) -14% 36 Revenue1 300.4 315.4 +5% 1 — Salt Slags €m 60.4 79.4 +31% —
Slide 11: Zinc LME price trading sideways after mini rally in May; Treatment Charge settled at $165/t
Zinc LME price trading sideways after mini rally in May; Treatment Charge settled at $165/t for full year 2024 (April ‘22) Peak: $300 4,485 (2008 & 2020) 320 (Feb ‘18) 300 3,590 280 (Sep‘24) 260 (March ‘08) 3,075 240 2,814 220 (May ‘15) 200 2,405 180 160 Contract TCs 2,224 140 $165 (May ‘23) 120 $14
Slide 12: Zinc price hedging extended until H1 2026 at all-time high level of €2,650
Zinc price hedging extended until H1 2026 at all-time high level of €2,650. Focus on H2 2026 with 50% already closed • Befesa’s hedging strategy unchanged Zinc LME1 • 1-3 years forward • 60% to 75% of zinc Befesa’s equivalent volume blended2 €2,627 • Befesa provides no €2,425 collateral Befesa’s c.
Slide 13: Coke price continued further normalisation in YTD; Gas & electricity prices stabilised
Coke price continued further normalisation in YTD; Gas & electricity prices stabilised around 2021 levels Befesa’s energy price evolution by source Coke 2019/20 2021 2022 2023 YTD 2024 • Befesa’s coke price continued further normalisation in Q3’24 to levels below the 2022 and 2023 average 250 250 •
Slide 14: EBITDA to Cash Flow
EBITDA to Cash Flow Operating Cash Flow in 9M at €118m, up 39% YoY. Cash on hand at 9M 2024 amounted to €86m. Adjusted EBITDA to Total cash flow in 9M 2024 (€ million) 152 -37 Total capex = €105m 118 4 -42 -23 -40 -5 -29 -21 Adj EBITDA WC Change Taxes Operating CF Maintenance Growth Capex Recytech B
Slide 15: Leverage reduction as a top priority. Focus on disciplined capital allocation
Leverage reduction as a top priority. Focus on disciplined capital allocation Capital structure Net debt / EBITDA Historical average x2.7 • TLB of €650m x3.4 Maturity in July 2029 x3.3 E +275 bps (25 bps reduction when leverage Target x2.0 – 2.5 < x3.0 and x2.5) x2.1 Covenant-lite terms • RCF
Slide 16: Outlook & growth
@ 3 / Outlook & growth
Slide 17: FY 2024 guidance narrowed to €210-215m
FY 2024 guidance narrowed to €210-215m • Expecting FY24 EBITDA of €210-215m, or 15% - 18% YoY, within the previous guidance range of €205-235m - Expecting strong Q4, supported by strong volume in Europe, despite weak steel sector - China at break even with no contribution; Jiangsu positive offset by
Slide 18: Business plan and capital allocation to focus on de-leveraging and ongoing approved capex projects
Business plan and capital allocation to focus on de- leveraging and ongoing approved capex projects - Keeping leverage between x2.0 and x2.5 over the investment period - China expansion plan stop due to current market conditions - Growth capex to focus on Palmerton and Bernburg: low execution risk p
Slide 19: Palmerton refurbishment on track
Palmerton refurbishment on track 1st kiln hot commissioning carried out. 2nd kiln in 1H 2025 Plant overview Palmerton, Pennsylvania • 2 kilns with c. 163 kt 220 kt (post-refurbishment) EAF steel dust recycling capacity • Producing WOX as a marketable product Indicative timing and status Q3 2025 Ot
Slide 20: Bernburg expansion: Moving forward with permits and commercial contracts
Bernburg expansion: Moving forward with permits and commercial contracts Plant overview • Expand alu alloy production capacity at existing Other Befesa 2nd Alu Bernburg plant from current 75 kt to 135 kt (+60 kt) locations in Europe • 2 rotary furnaces (and 2 holding furnaces) • Total 2nd Alu capaci
Slide 21: Appendix & Investor’s agenda
Appendix & Investor’s agenda
Slide 22: Key financials 9M and Q3 2024
Key financials 9M and Q3 2024 9M 2024 9M 2023 Change Q3 2024 Q3 2023 Change Key operational data (tonnes, unless specified otherwise) Electric arc furnace (EAF) steel dust throughput 889,038 889,724 (0.1) % 279,506 297,389 (6.0) % Waelz oxide (WOX) sold 292,341 301,048 (2.9) % 92,283 103,815 (11.1)
Slide 23: Steel Dust at a glance
Steel Dust at a glance 9M 2024 9M 2023 Change Q3 2024 Q3 2023 Change Key operational data (tonnes, unless specified otherwise) EAF steel dust throughput 889,038 889,724 (0.1) % 279,506 297,389 (6.0) % WOX sold 292,341 301,048 (2.9) % 92,283 103,815 (11.1) % Zinc blended price (€ / tonne) 2,495 2,448
Slide 24: Aluminium Salt Slags Recycling Services at a glance
Aluminium Salt Slags Recycling Services at a glance 9M 2024 9M 2023 Change Q3 2024 Q3 2023 Change Key operational data (tonnes, unless specified otherwise) Salt slags and SPL recycled 317,726 257,817 23.2 % 97,079 86,741 11.9 % Total installed capacity 470,000 470,000 - 470,000 470,000 - Utilisation
Slide 25: Secondary Aluminium subsegment at a glance
Secondary Aluminium subsegment at a glance 9M 2024 9M 2023 Change Q3 2024 Q3 2023 Change Key operational data (tonnes, unless specified otherwise) Secondary aluminium alloys produced 127,970 125,770 1.7 % 37,417 38,619 (3.1) % Aluminium alloy FMB price (€ / tonne) 2,326 2,186 6.4 % 2,327 2,074 12.2
Slide 26: Investor’s agenda
Investor’s agenda Remaining Investor Investor conferences Financial calendar Q1 2025 conferences 2024 Preliminary Year-End Results London – Goldman Sachs 5th Annual Lyon – 28th ODDO BHF FORUM 2025. 2023 & Conference Call Carbonomics Conference. 09 - 10 Jan – ODDO 29 February 2024 12 Nov – Goldman
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