Slide 1: Full Year 2018 – Preliminary Earnings Presentation
BEFESA BEFESA Full Year 2018 – Preliminary Earnings Presentation February 26, 2019
Slide 2: Disclaimer
BEFESA 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.
Slide 3: Today's Presenters
BEFESA Today’s Presenters CEO since 2000 CFO since 2014 Since 2008 Javier Molina Wolf Lehmann Rafael Pérez CEO CFO; including Director of responsibilities Investor Relations for Operational & Strategy Excellence and IT ▪ Leading the company since 1994 ▪ 20+ years in finance and ▪ Director of Investo
Slide 4: 2018 Key Highlights
BEFESA 2018 Key Highlights Record volumes in both core segments: Steel dust throughput at 718kt (+8.6% YoY); Salt slags & SPL at 517kt (+1.4% YoY) Delivered earnings at upper end of latest guidance range: EBITDA +2.1% YoY to €176.0m; EBIT +2.1% YoY to €147.0m Strongly improved net profit to €90.2m,
Slide 5: Consolidated Key Financials
BEFESA Consolidated Key Financials EBITDA +2%, in line with latest guidance, to €176m EBITDA; Net profit up 83% to €90m YoY … Record volumes in both core businesses Revenue(1) Highlights (€m) 667.4 720.1 ▪ 2018 revenue up 8% YoY on a comparable basis to €720.1m 169.3 181.0 primarily due to: - Record
Slide 6: Steel Dust Recycling Services
BEFESA Steel Dust Recycling Services 2018 EBITDA growth +2% YoY driven by record throughput volumes, partially offset by Stainless Revenue EAFD throughput & capacity utilization (€m) (thousand tons, % of annual installed capacity) 380.9 332.1 717.7 88.6 96.9 661.0 172.8 180.9 Q4 '17 Q4 '18 2017 2018
Slide 7: Aluminium Salt Slags Recycling Services
BEFESA Aluminium Salt Slags Recycling Services Solid EBITDA at €37.2m (+2.1%) driven by improved metal margin in 2nd Aluminium partially offset by lower aluminium alloy volumes & prices Revenue(1)(2) Volumes & capacity utilization (€m) 338.4 342.9 (thousand tons, % of annual installed capacity) Salt
Slide 8: Consolidated Net Debt / Leverage / Cash Flow / Ratings
Consolidated Net Debt / Leverage / BEFESA Cash Flow / Ratings Leverage further reduced to x2.1 at YE’18 (x2.4 at YE’17) triggering additional 25 bps interest rate reduction to E +225 bps; Cash up €33m YoY to €151m Net debt & leverage rate evolution 2018 EBITDA to total cash flow – main drivers (€m)
Slide 9: Zinc Prices & Hedging Strategy
BEFESA Zinc Prices & Hedging Strategy Hedging up to July ´21 improves earnings & cash flows visibility for next 3 years € 3,000 Market zinc price vs. zinc hedges (€/ton) € 2,500 €2,325 €2,260 H1’21: €2,168 €2,230 €2,160 € 2,000 €2,051 €1,939 €1,876 € 1,500 2017 2018 2019 2020 H1 2021 € 1,000 LME Zin
Slide 10: 2019 – Preliminary Outlook
BEFESA 2019 – Preliminary Outlook Expecting to continue record high utilization levels in both core segments; Steel Dust >90% and Salt Slags >95%. Volume overall stable YoY Targeting continued EBITDA growth; Primarily driven by improved hedged zinc prices YoY, limited by higher treatment charges in
Slide 11: Mid-Term Growth Roadmap
BEFESA Mid-Term Growth Roadmap Accelerating growth through well defined business plan; Hedging in place and executing top 5 growth projects + China 1 Hedging • 2019: 92.4kt at €2,325/t • 2020: 92.4kt at €2,260/t • H1 2021: 46.2kt at €2,230/t Indicative earnings 3 2 Organic growth 2019/20 focus – Top
Slide 12: Greenfield in New Geographies – China
BEFESA 3 Greenfield in New Geographies – China Signed agreement with Jiangsu Changzhou Economic Development Zone and purchasing land use right; Developing 1st steel dust recycling plant … Changzhou Jiangsu province ✓ Chinese government continues to strengthen environmental regulations ✓ Steel dust h
Slide 13: Investor Agenda
BEFESA Investor Agenda Financial Calendar Meet Befesa … ✓ Tuesday, February 26, 2019: May 14, 2019 – Midcap Partners Preliminary Earnings Release 2018 & Analyst Call Paris, Annual Small & Midcap Conference May 21-23, 2019 – Berenberg Thursday, March 21, 2019: New York, US Conference 2019 Annual Repo
Slide 14: Appendix
BEFESA Appendix 14
Slide 15: Financial Trend
BEFESA Financial Trend Revenues(1) Adj. EBITDA and % margin(2) (€m) (€m) 22% 26% 24% 720 667 172 176 594 9 12 296 300 133 27 25 268 9 83 24 83 79 135 137 332 381 99 281 2016 A 2017 A 2018 A 2016 A 2017 A 2018 A Adj. EBIT and % margin(2) Operating cash flow(3) (€m) (€m) 17% 22% 20% 144 147 4 6 20 17