Befesa Sa · XETR:BFSA
Befesa Sa — Q1 2023 Earnings Presentation
28 slides from Befesa Sa's earnings presentation, May 4, 2023
Slide 1: First Quarter 2023 Earnings Presentation
First Quarter 2023 Earnings Presentation 4 May 2023
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 Wolf Lehmann Executive Chair CEO CFO Leading Befesa >20 years with Befesa Befesa’s CFO for >20 years since 2014 3 Q1 2023 Earnings Presentation
Slide 4: Highlights
01 Highlights
Slide 5: Executive summary
Executive summary - Revenue increased by 23% to €322m (Q1’22: €261m) driven by the US operations - Adj. EBITDA at €50.1m, approx. stable qoq (Q4’22: €50.7m); -18% yoy (Q1’22: €61.1m); lower zinc LME prices, unfavourable 19% higher TC and continued coke inflation - Operating cash flow at €13m (Q1’22:
Slide 6: Q1 business highlights
Q1 business highlights Steel Dust Alu Salt Slags • EAFD throughput: • Salt slags & SPL volumes: -19% yoy to 274 kt, -8% qoq, mainly due to -6% yoy to 82 kt, stable qoq Turkey operations impacted by earthquake (restarted in March), and the US • 2nd aluminium alloys: +3% yoy to 44 kt, +13% qoq • Plant
Slide 7: Financial results
02 Financial results
Slide 8: Consolidated key financials
Consolidated key financials Q1 adjusted EBITDA at €50.1m, approx. stable qoq with Q4’22 at €50.7m; -18% yoy, mainly due to lower zinc prices incl. unfavourable TC partially offset with stronger aluminium margins, and lower volumes incl. Turkey earthquake Adjusted EBITDA bridge Q1 2022 to Q1 2023 (€m
Slide 9: Steel Dust Recycling Services
Steel Dust Recycling Services Q1 EBITDA at €37.0m, approx. stable qoq with Q4’22 at €37.6m; -32% yoy, mainly due to lower zinc prices incl. unfavourable TC at $274/t (+19% yoy), continued record high coke prices (+6% qoq, +41% yoy) and lower EAFD volumes EBITDA bridge Q1 2022 to Q1 2023 (€m) -€17.8
Slide 10: Aluminium Salt Slags Recycling Services
Aluminium Salt Slags Recycling Services Q1 EBITDA at €13.8m, up €2m qoq from Q4’22 at €11.8m; up €6m or 82% yoy; mainly due to strong aluminium metal margins and lower gas and electricity prices EBITDA bridge Q1 2022 to Q1 2023 (€m) +€6.2 / +81.9% 13.8 2 7.6 5 Lower gas & -0.5 electricity prices Low
Slide 11: Cash flow, net debt & leverage
Cash flow, net debt & leverage Cash on hand at €143m providing >€200m liquidity; Net leverage of x2.81 Adjusted EBITDA to total cash flow (€m) Usual Q1 seasonality & timing; Remaining 50.1 Hanover insurance Total capex = €31.7m Incl. first of the -27.9 two bi-annual TLB interest payments Incl. c. €1
Slide 12: Zinc prices & hedging strategy
Zinc prices & hedging strategy Hedge book extended further up to July 2025, c. 2 years; Improving earnings & cash flows visibility Zinc LME vs. Befesa’s hedges & blended prices (€/t) Zinc LME1) Befesa’s hedges c. €2,650 c. €2,400 c. €2,500 €2,627 c. $2,9002) c. $2,6502) c. $2,7502) €2,317 €2,239 €2,
Slide 13: Outlook 2023
Outlook 2023 Lower-end: €200m Upper-end: €230m -€15m / -7% yoy +€15m / +7% yoy • Lower end: Continued c. €50m per quarter run-rate; Coke prices remain high; Zinc prices c. $2,800-2,900/t rest of the year EBITDA • Upper-end: Coke prices reducing to H1’22 levels; China momentum accelerates; Zinc price
Slide 14: Growth
03 Growth
Slide 15: SGGP indicative timeline; Befesa in control
SGGP indicative timeline; Befesa in control; Adjusting timing to macroeconomic developments €410-450m total capex requirement over the next five years Steel Dust Alu Salt Slags SGGP Timing EBITDA Pay- Capex €m IRR2) growth projects 2022 2027e run-rate €m back1) 1 Zinc refining Refurbishing / €110-12
Slide 16: US zinc refining asset acquired; integration progressing
1 ✓ US Zinc refining asset acquired on 30 Sep 2022; Integration progressing, ramping up operations Rutherford County, NC • Acquired remaining 93% of zinc refining asset on 30 September 2022 for $47m cash transaction; 65% or $88m below original purchase option of $135m • Attractive multiple of around
Slide 17: Refurbishing Palmerton in 2023/24 to drive efficiencies
2 Refurbishing Palmerton in 2023/24 to drive efficiencies & increase capacity utilisation by 2026 EAFD recycling sites Palmerton refurbishment status update 1 Barnwell, SC 2 Rockwood, TN ➢ Engineering / design across 6 working areas (packages) in process ➢ Request For Quote with suppliers started; 1
Slide 18: Operating 2 plants in 2023; Preparing Guangdong
5 Operating 2 plants in 2023; Preparing 3rd province, Guangdong China II, Xuchang (Henan) China I, Changzhou (Jiangsu) ✓ Commissioning completed Dec 2022 ✓ Ramped up Q1 2022 ✓ Inaugurated on 23 February 2023 ➢ Ramping up operations China III, Yunfu (Guangdong) ✓ LOI signed in Q4 2022 Befesa’s EAFD r
Slide 19: Well defined growth roadmap driving EBITDA growth
Well defined growth roadmap driving +€125-155m EBITDA growth, 8-10% CAGR, globally balanced, c. 1/3 US/EU/Asia c. €340-370m c. 8-10% CAGR +€45-55m +€45-55m +€35-45m ✓ China I & II ➢ China III (✓LOI) €215m • New EAFD plant • China IV • WOX washing expansion • China V ✓ Zinc refining • 2nd Alu expansi
Slide 20: ESG
04 ESG
Slide 21: ESG highlights
ESG highlights Key player within the circular economy, with c. 1.8 Mt recycled and c. 1.5 Mt of valuable materials; LTIR further reduced by >30% yoy to new low of 0.55 Lost Time Injury Rate (LTIR)1) ESG Ratings2) • Reduced by -32% yoy 31 March 31 December 2023 2022 • Reduced by -90% vs. 2015 baselin
Slide 22: Investor agenda & appendix
05 Investor agenda & appendix
Slide 23: Investor's agenda
Investor’s agenda Financial calendar Next investor conferences 2023 Q2 2023 H2 2023 Annual General Meeting Paris – SMID Mega Trend Days Frankfurt – Commerzbank & ODDO BHF Thursday, 15 June 2023 10 May – Kepler Cheuvreux Corporate Conference 5 & 6 September – Commerzbank & ODDO Barcelona – BofA Secur
Slide 24: Q1 2023/22 – Key financials
Q1 2023/22 – Key financials (€m, unless otherwise stated) Steel Salt Secondary Corporate & Total Dust Slags Aluminium eliminations Befesa Revenue1) €216.3 €20.8 €95.9 -€11.0 €322.0 yoy change +€60.3 / +38.7% +€1.6 / +8.6% -€2.1 / -2.1% +€0.7 / - +€60.6 / +23.2% Reported EBITDA €37.0 €6.6 €7.2 -€1.5
Slide 25: Multi-year trend – Key financials
Multi-year trend – Key financials1) (€m, unless otherwise stated) 2017 2018 2019 2020 2021 2022 Revenue €667.42) €720.1 €647.9 €604.3 €821.6 €1,136.0 Reported EBITDA €153.0 €176.0 €159.6 €123.5 €189.6 €234.9 Reported EBITDA margin 22.9%2) 24.4% 24.6% 20.4% 23.1% 20.7% % Adjusted EBITDA €172.43) €176
Slide 26: Operational data – Steel Dust Recycling Services
Q1 2023/22 – Operational data – Steel Dust Recycling Services Q1 2022 Q1 2023 yoy change EAFD 337.4 273.8 -63.5 / -18.8% throughput (kt) EAFD average 88.0% 71.4% -1,657 bps capacity / 75.1%1) utilisation (%) Waelz oxide 103.7 99.8 -3.9 / -3.8% (WOX) sold (kt) Zinc LME price €3,337 €2,916 -€421 / -12
Slide 27: Operational data – Aluminium Salt Slags Recycling Services
Q1 2023/22 – Operational data – Aluminium Salt Slags Recycling Services Q1 2022 Q1 2023 yoy change Salt slags & SPL 87.5 82.3 -5.2 / -5.9% treated (kt) Salt slags & SPL 75.5% 71.0% -445 bps avg. capacity / 104.3%1) / 98.1%1) utilisation (%) Aluminium 42.2 43.7 +1.4 / +3.4% alloys produced (kt) Secon
Slide 28: Multi-year trend – Operational data
Multi-year trend – Operational data 2017 2018 2019 2020 2021 2022 EAFD throughput (kt) 661.0 717.1 665.8 687.0 885.7 1,193.8 EAFD average capacity 84.7% 92.0% 80.7% / 83.2% 83.3%2) 76.8% utilisation (%) 90.1%1) Waelz oxide (WOX) sold 217.8 240.9 217.6 239.2 291.0 407.4 (kt) Zinc LME price (€/t) €2,5