Slide 1: Earnings Presentation
Earnings Presentation 25 July 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 Javier Molina Asier Zarraonandia Rafael Pérez Executive Chair CEO CFO Leading Befesa >20 years with >15 years with for >20 years Befesa Befesa 3 H1 2024 Earnings Presentation
Slide 4: Highlights
— O71 / Highlights
Slide 5: Positive trend continues with quarterly improvement
Positive trend continues with quarterly improvement Strong Q2 results up 22% YoY and 3rd consecutive quarterly improvement driven by better market conditions Revenue Adjusted EBITDA Operating Cash Flow Q2: €323m 10% YoY Q2: €55m 22% YoY Q2: €56m 57% YoY H1: €621m 1% YoY H1: €103m 9% YoY H1: €70m 27%
Slide 6: Business & financial results
Business & financial results
Slide 7: Consolidated key financials
Consolidated key financials Adjusted EBITDA increased by 9% YoY to €103.1m in H1 2024, mainly due to better zinc hedging, lower TC, an increase in Alu volumes and a decrease in operating cost Adjusted EBITDA bridge H1 2023 to H1 2024 (€m) +8.8% / +€8.3m 16.6% 103.1 15.4% Better prices on coke 94.7 a
Slide 8: Steel Dust Recycling Services
Steel Dust Recycling Services Adjusted EBITDA at €80.9m in H1 2024, a YoY improvement of 20% Better hedging and lower TC and coke price as main drivers of growth over the period YoY EBITDA H1 2023 to H1 2024 H1 2023 H1 2024 change Revenue €m 403.0 404.7 +1.7 Adjusted EBITDA €m 67.2 80.9 +13.7 Better
Slide 9: Aluminium Salt Slags Recycling Services
Aluminium Salt Slags Recycling Services EBITDA at €22.4m in H1 2024, a YoY decrease of 18.9% Lower EBITDA impacted by weak aluminum metal margin, partially compensated by lower energy prices Salt slags volume growth due to the recovery of operations in Hanover EBITDA H1 2023 to H1 2024 H1 2023 H1 20
Slide 10: Key volume drivers & impact on Befesa: H1 2024
Key volume drivers & impact on Befesa: H1 2024 Key volume drivers Befesa’s volumes YoY variance • European Steel Dust plants at solid levels despite yoy flat crude steel production Crude steel production1 • Aluminium salt slags volumes grew yoy mainly driven by Hanover back in operation 5.3% 0.9% 0.
Slide 11: Zinc LME price trading sideways; 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 $4,530 (April ‘22) Zinc LME1 Zinc TC Peak: $300 $2,814 $2,467 (2008 & 2020) (March ‘08) (Jan ‘20) $2,405 Peak (May ‘15) $2,224 C902 (May ‘23) $1,774 $1,454 (March ‘20) Trough (Jan ‘16) $165
Slide 12: Zinc price hedging extended until Q1 2026 at all-time high level
Zinc price hedging extended until Q1 2026 at all- time high level of €2,650 • Befesa’s hedging strategy unchanged Zinc LME1 • 1-3 years forward • Targeting 60% to 75% of Befesa’s zinc equivalent volume blended2 €2,627 • Befesa providing no €2,425 collateral Befesa’s c. €2,650 hedges3 €2,379 c. €2,50
Slide 13: Coke price further normalisation; gas & electricity stabilised
Coke price continued further normalisation in H1; Gas & electricity prices stabilised around 2021 levels Befesa’s energy price evolution by source Coke 2019/20 2021 2022 2023 H1 2024 • Befesa’s coke price continued further normalisation in Q2’24 to levels below the 2022 average price (-27% yoy; -5%
Slide 14: EBITDA to Cash Flow
EBITDA to Cash Flow Cash on hand at H1 2024 amounted to €108m; Operating Cash Flow in the period arises until €70m; Recytech acquisition has been the main impact (€-40m) in the period. Adjusted EBITDA to Total cash flow in H1 2024 (€ million) Total capex = €79m Bank borrowings / FX / Interests H1 20
Slide 15: Debt maturity extended to 5 years; capital allocation and leverage
Debt maturity extended to 5 years. Focus on capital allocation and leverage management Refinancing successfully completed Net debt / EBITDA Historical average x2.7 – TLB of €650m with maturity in July 2029 (maturity of 5y) x3.4 x3.3 – RCF of €100m with maturity in July 2028 Target x2.5 – 3.0 – Lever
Slide 16: Outlook & growth
0 3 / Outlook & growth
Slide 17: FY 2024 guidance narrowed by increasing lower end of range
FY 2024 guidance narrowed by increasing lower end of the range Metric Guidance Narrowed guidance Comments • Strong EBITDA development QoQ EBITDA - €m 195 - 235 205 - 235 • Expecting H2 to be better than H1 • Considers LME zinc price environment remains at current levels Capex - €m 120 - 140 115 - 12
Slide 18: Remaining 50% of Recytech acquired in a highly-accretive deal
Remaining 50% of Recytech acquired in a highly-accretive deal, advancing strategic global growth plan in Europe Key facts about Recytech: 2 • Former 50/50 JV between Befesa and Recylex, Befesa’s EAF steel dust 1 3 recycling plants in Europe • Recycling of EAF steel dust, extracting zinc and 1 Fouqui
Slide 19: Palmerton plant refurbishment progressing well
Palmerton plant refurbishment progressing well to seize market growth in 2025 and beyond 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 Other
Slide 20: Bernburg expansion: moving forward with permits and 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: Well defined growth roadmap in execution
Well defined growth roadmap in execution • Market fundamentals remain strong and favourably support Befesa’s business model & growth plan Decarbonisation trend will drive increase of EAF steel production in the key markets where Befesa operates EV trend will drive demand for aluminium in Europe & th
Slide 22: Appendix & Investor's agenda
Appendix & Investor’s agenda
Slide 23: Key financials H1 2024 vs H1 2023
Key financials H1 2024 vs H1 2023 (€m, unless otherwise stated) Steel Salt Secondary Corporate & Total Dust Slags Aluminium eliminations Befesa Revenue1 404.7 54.0 192.4 -30.0 621.2 yoy change +1.7 / +0.4% +12.8 / +31.0% -2.8 / -1.4% -6.0 / - +5.7 / +0.9% Reported EBITDA 74.4 18.5 4.0 -0.3 96.5 yoy
Slide 24: Operational data H1 2024 vs 2023 – Steel Dust Recycling Services
Operational data H1 2024 vs 2023 – Steel Dust Recycling Services H1 2023 H1 2024 YoY change EAF steel dust 592 610 +18 / +2.9% throughput (kt) EAF steel dust 71 71 - avg. capacity utilisation (%) Waelz oxide 197 200 +3 / +1.4% (WOX) sold (kt) Zinc LME price 2,624 2,444 -180 / -6.8% (€/t) Zinc hedgin
Slide 25: Operational data H1 2024 vs 2023 – Aluminium Salt Slags Recycling Services
Operational data H1 2024 vs 2023 – Aluminium Salt Slags Recycling Services H1 2023 H1 2024 YoY change Salt slags & SPL 171 221 +50 / +29.0% treated (kt) - Salt slags & SPL 73 94 avg. capacity utilisation (%) Aluminium 87 91 +4 / +3.9% alloys produced (kt) Secondary alu 86 89 +3 / +3.5% avg. capacity
Slide 26: Key financials Q2 2024 vs Q2 2023
Key financials Q2 2024 vs Q2 2023 (€m, unless otherwise stated) Steel Salt Secondary Corporate & Total Dust Slags Aluminium eliminations Befesa Revenue 216.8 26.8 94.1 -14.9 322.8 yoy change +30.1 / +16.1% +6.4 / +31.3% -5.3 / -5.3% -1.8 / - +29.3 / +10.0% Reported EBITDA 41.6 8.6 1.1 -0.1 51.2 yoy
Slide 27: Operational data Q2 2024 vs 2023 – Steel Dust Recycling Services
Operational data Q2 2024 vs 2023 – Steel Dust Recycling Services Q2 2023 Q2 2024 YoY change EAF steel dust 305 306 +2 / +0.4% throughput (kt) EAF steel dust 72% 72% - avg. capacity utilisation (%) Waelz oxide 97 100 +3 / 2.7% (WOX) sold (kt) Zinc LME price 2,331 2,632 +301 / 12.9% (€/t) Zinc hedging
Slide 28: Operational data Q2 2024 vs 2023 – Aluminium Salt Slags Recycling Services
Operational data Q2 2024 vs 2023 – Aluminium Salt Slags Recycling Services Q2 2023 Q2 2024 YoY change Salt slags & SPL 89 109 +21 / +23.2% treated (kt) - Salt slags & SPL 76% 94% avg. capacity utilisation (%) Aluminium 43 46 +3 / +6.3% alloys produced (kt) Secondary alu 85% 91% - avg. capacity utili
Slide 29: Investor's agenda
Investor’s agenda Investor conferences Financial calendar Q3 2024 • Strong IR programme continues Frankfurt – Commerzbank & ODDO BHF 15th Preliminary Year-End Results 2023 & Corporate Conference 2024 Conference Call post H1 2024 earnings reporting 4 Sep – Commerzbank & ODDO BHF 29 February 2024 •
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