Befesa Sa · XETR:BFSA
Befesa Sa — Q1 2021 Earnings Presentation
30 slides from Befesa Sa's earnings presentation, June 2021
Slide 1: Business Update 2021 Post Q1 Results
Business Update 2021 Post Q1 Results June 2021
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: 01 Business update
EAF steel dust recycling plant at Asúa-Erandio, Spain 01 Business update
Slide 4: Executive summary
Executive summary €48.8m €26.5m Q1 EBITDA Operating cash flow strongest quarter in history €18.1m up yoy (Q1 2020: €8.4m) 46% up yoy (Q1’20: €33.6m), 15% up over Q4’20 at €42.4m €164.0m of cash on hand, €9.4m up vs. YE’20 at €154.6m Plant utilisation recovered to pre-COVID levels at ≥ 90% Leverage x
Slide 5: Mid-term growth roadmap: indicative earnings
Mid-term growth roadmap Executing well defined growth roadmap even during COVID-19; Focus 2021: Ramping up operations at the first two EAF steel dust recycling plants in China 1 HEDGING • 2020: 92.4kt @ €2,239/t • 2021: 92.4kt @ c. €2,150/t • 2022: 92.4kt @ c. €2,200/t • 2023: 92.4kt @ c. €2,300/t •
Slide 6: Zinc prices & hedging strategy
Zinc prices & hedging strategy Hedges fully extended up to and including July 2024; Improved earnings & cash flows visibility Zinc LME price vs. hedges (€/t) € 3,500 Zinc LME Forwards Average blended € 2,500 €2,317 c. €2,300 c. €2,325 €2,239 c. €2,200 c. €2,150 €2,280 €2,136 € 1,500 2019 2020 2021 2
Slide 7: EAF steel production & Befesa's steel portfolio growth & diversification
EAF steel production -&- Befesa’s steel portfolio growth & diversification China is the largest and growing EAF steel producer worldwide; Befesa growing and diversifying its portfolio to capture China addressable market EAF steel production: EU-27 vs. China (MT) Befesa’s EAF steel dust recycling cap
Slide 8: China I
China I Changzhou plant, Jiangsu province Key facts of the plant: • 1st EAF steel dust recycling plant in China • Capacity to recycle 110kt EAF steel dust p.a. • Total investment: c. €42m • Location: Changzhou (Jiangsu province) Status update: Long-term financing closed July 2020 Construction comple
Slide 9: China II
China II Xuchang plant, Henan province Key facts of the plant: • 2nd EAF steel dust recycling plant in China • Capacity to recycle 110kt EAF steel dust p.a. • Total investment: c. €42m • Location: Xuchang (Henan province) Status update: Long-term financing closed December 2020 Construction progressi
Slide 10: Sustainability at Befesa
Sustainability at Befesa Key player within the circular economy, with c. 1.5 million tonnes recycled and c. 1.3 million tonnes of valuable materials recovered annually, that contributes significantly to increase efficiency of raw material use in the metals industry and promotes the transition toward
Slide 11: FY 2021 Guidance
FY 2021 Guidance Lower-end: €165m EBITDA Upper-end: €190m EBITDA (above 2019 of €160m) (new record) Volume / • Moderate recovery from COVID-19 • Strong recovery from COVID-19 Capacity utilisation • China ramping up & delivering commercial • China ramping up & delivering commercial output in H2 on sc
Slide 12: Q1 2021 results
Nanjing City, Location of Befesa China’s HQ 02 Q1 2021 results
Slide 13: Consolidated key financials
Consolidated key financials Q1 EBITDA at €48.8m, a new record level, benefited from favourable market prices; Volumes returned to pre-COVID levels with strong plant utilisation levels at ≥ 90% EBITDA bridge Q1 2020 to 2021 (€m) +€15.3 / +45.6% 48.8 - Operational excellence 16.6 Inflation 33.6 -1.3 F
Slide 14: Steel Dust Recycling Services
Steel Dust Recycling Services Q1 EBITDA at €36.5m; Favourable zinc LME prices and TC, partially offset by lower zinc hedging prices; Overall plant utilisation back to pre-COVID levels at around 90% EBITDA bridge Q1 2020 to 2021 (€m) +€10.6 / +40.7% 36.5 - 11.1 Operational excellence 26.0 Inflation -
Slide 15: Aluminium Salt Slags Recycling Services
Aluminium Salt Slags Recycling Services Q1 EBITDA at €12.3m; Higher aluminium alloy FMB prices partially offset by lower salt slags & SPL treated (UK closure); Overall plant utilisation recovered to pre-COVID-19 levels at above 90% EBITDA bridge Q1 2020 to 2021 (€m) +€3.7 / +43.0% 12.3 - 8.6 4.5 -0.
Slide 16: Cash flow, net debt & leverage
Cash flow, net debt & leverage Strong €239m liquidity (€164m cash balance + €75m RCF entirely undrawn) EBITDA to total cash flow (€m) 48.8 -12.6 -6.3 Mainly China Seasonal, -3.4 26.5 expansion AR incl. TC -4.6 China local loans -23.4 9.4 10.9 EBITDA WC change & Interests Taxes Operating cash Mainten
Slide 17: Befesa overview
Secondary aluminium production plant at Bernburg, Germany 03 Befesa overview
Slide 18: Befesa at a glance
Befesa at a glance Market leader in Europe & Asia in providing regulated critical hazardous waste recycling services to the steel and aluminium industries 3-year average (2018-2020) Steel Dust Recycling Aluminium Salt Slags Recycling €657m Revenue1) #1 #1 Position in Europe Position in Europe in sal
Slide 19: Key milestones
Key milestones Befesa has grown successfully through organic initiatives and acquisitions EAFD expansion China Developing first two EAF steel dust recycling plants in China: EAFD expansion Korea & Turkey Changzhou, Jiangsu: Secondary aluminium plant in Bernburg Construction completed in Doubled capa
Slide 20: Investment highlights
Investment highlights Environmental Favourable Market Strong solutions mega trends leader regulation in high demand supporting secondary steel in Europe & Asia, getting stricter and for the steel and and aluminium markets in niche recycling markets, expanding into aluminium industry e.g. CO2 reducti
Slide 21: Market leader in Europe & Asia
Market leader in Europe & Asia 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 EAF steel dust recycling plants Lünen Salt slags & SPL recycling plants Hannover Clients Duisburg Freiberg Jiangsu & Henan
Slide 22: Highly regulated & critical service model
Highly regulated & critical service model Befesa is the leading environmental services partner in the circular economy of the 2 nd steel and aluminium industry by recycling and avoiding the landfilling of c. 1.5 MT hazardous residues and recovering c. 1.3 MT of new valuable materials HAZARDOUS WASTE
Slide 23: Experienced management team
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; incl. responsi
Slide 24: 04 Investor agenda & appendix
Waelz kiln at EAF steel dust recycling plant in Gyeongju, South Korea 04 Investor agenda & appendix
Slide 25: Investor agenda
Investor agenda Financial calendar Next investor conferences Q2 2021 H2 2021 Annual General Meeting Berenberg UN Sustainable Development Frankfurt – Commerzbank Corporate Wednesday, 30 June 2021 Goals Conference 2021 Conference 2021 20 April 2021 – Berenberg 31 Aug – 2 Sep – Commerzbank Kepler Digit
Slide 26: Q1 2021/20 – Key financials
Q1 2021/20 – Key financials (€m, unless otherwise stated) Steel Salt Secondary Corporate & Total Dust Slags Aluminium eliminations Befesa Revenue1) €100.9 €19.8 €82.4 -€10.5 €192.6 yoy change -€0.3 / -0.3% -€2.3 / -10.3% +€17.0 / +26.0% -€0.8 / - +€13.6 / +7.6% EBITDA €36.5 €5.9 €6.4 €0.0 €48.8 yoy
Slide 27: Multi-year trend – Key financials
Multi-year trend – Key financials1) (€m, unless otherwise stated) 2017 2018 2019 2020 Revenue €667.42) €720.1 €647.9 €604.3 Reported EBITDA €153.0 €176.0 €159.6 €123.5 Reported EBITDA 22.9%2) 24.4% 24.6% 20.4% margin Adjusted EBITDA €172.43) €176.0 €159.6 €127.04) Adjusted EBITDA 25.8%2) 24.4% 24.6%
Slide 28: Q1 2021/20 – Operational data – Steel Dust Recycling Services
Q1 2021/20 – Operational data – Steel Dust Recycling Services Q1 2020 Q1 2021 yoy change EAF steel dust 185.7 181.1 -4.6 / -2.5% throughput (kt) EAF Steel dust 90.2% 89.0% -124 bps average capacity utilisation (%) Waelz oxide 67.8 66.7 -1.0 / -1.5% (WOX) sold (kt) Zinc LME price €1,930 €2,279 +€349
Slide 29: Q1 2021/20 – Operational data – Aluminium Salt Slags Recycling Services
Q1 2021/20 – Operational data – Aluminium Salt Slags Recycling Services Q1 20201) Q1 2021 yoy change Salt Slags & 124.7 104.4 -20.3 / -16.3% SPL treated (kt) Salt Slags & 94.4% 94.1% -25 bps SPL avg. cap. utilisation (%) Aluminium 47.9 51.3 +3.4 / +7.0% alloys produced (kt) Secondary Alu 93.8% 101.5
Slide 30: Multi-year trend – Operational data
Multi-year trend – Operational data 2017 2018 2019 2020 EAF steel dust 661.0 717.1 665.8 687.0 throughput (kt) EAF steel dust average 84.7% 92.0% 80.7% / 90.1%1) 83.0% capacity utilisation (%) Waelz oxide (WOX) 217.8 240.9 217.6 239.2 sold (kt) Zinc LME price (€/t) €2,572 €2,468 €2,276 €1,979 Zinc h