Slide 1: First Quarter 2016 Earnings Presentation
BEFESA BEFESA First Quarter 2016 Earnings Presentation 31st May 2016
Slide 2: Forward-looking Statement
BEFESA Forward-looking Statement This presentation contains forward-looking statements and information relating to Befesa and its affiliates that are based on the beliefs of its management as well as assumptions made and information currently available to Befesa and its affiliates. Such statements r
Slide 3: Introduction
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Rafael Pérez Head of Strategy & Investor Relations 3
Slide 4: Business Highlights
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Javier Molina Chief Executive Officer 4
Slide 5: Befesa 1Q 2016 Highlights
BEFESA Befesa 1Q 2016 Highlights 1Q revenues of €165 million, down 12% YoY. Lower metal prices, sulfur divestiture partially offset by Solarca acquisition. Consolidated 1Q EBITDA of €25 million, down 32% YoY with EBITDA% of Sales still at 15% … Managing through down cycle. Stable financing position.
Slide 6: Zinc Business Performance
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Asier Zarraonandia Managing Director of Zinc Business 6
Slide 7: Zinc Business Performance
BEFESA Zinc Business Performance Volume in crude steel in line with expectations and slightly below previous year Operational Performance EAF Throughput Highlights - 138.121 tons of crude steel dust treated in 1Q Crude steel dust deliveries in line with 2016 (-2,4% vs 1Q 2015 and -8,4% vs 4Q 201
Slide 8: Zinc Prices & Hedging
BEFESA Zinc Prices & Hedging After the downward trend seen during 2H 2015 in zinc prices … 2016 has started with a recovery ending 1Q 2016 around €1.570/t 2.200 € 2012: 2013: 1Q 2014: €1.703/t €1.700/t €1.550/t Zinc Prices 2.000 € During the 1Q 2016 zinc prices traded on average above 4Q 2015 (€1.
Slide 9: Non-Zinc Business Performance
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Javier Molina Chief Executive Officer 9
Slide 10: Aluminum Performance
BEFESA Aluminum Performance Performance mainly driven by stronger secondary aluminum volumes as well as salt slag volumes driven by new plant in Germany … But LME aluminum alloy prices and metal margin depressed Operational Performance Secondary Aluminum Alloys Highlights - 47.070 tons of alloys p
Slide 11: 2016 Growth Strategy – Aluminum and IES
BEFESA 2016 Growth Strategy – Aluminum and IES Bernburg ramp up completed. Acquisition and integration of Solarca into our IES segment completed. Gulf project progressing. Aluminum Growth New Secondary Alu Plant in Bernburg (Germany) 1Q ’16 run rate at ~60 kton per year … ramping up to 70 kton cap
Slide 12: Financials
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Wolf Lehmann Chief Financial Officer 12
Slide 13: Zinc Financial Highlights
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Zinc Financial Highlights 13
Slide 14: Crude Steel Financial Highlights
BEFESA Crude Steel Financial Highlights Crude steel segment EBITDA bottomed in 4Q’15 and up +50% or +€5 QoQ in 1Q’16 driven by zinc price recovery as well as favorable TCs Crude Steel Revenues (€m) Revenues Highlights 2015 2016 YoY 1Q’16 vs. ‘15 the revenues decreased by 7 million or 13,5% YoY mai
Slide 15: Stainless Steel Financial Highlights
BEFESA Stainless Steel Financial Highlights Challenging quarter for stainless steel mainly driven by decrease in volumes treated as well as lower nickel prices Stainless Revenues (€m) 2015 2016 Revenues Highlights Compared to 1Q’15, stainless steel segment revenues decreased by 9% mainly driven by
Slide 16: Consolidated Zinc Financial Highlights
BEFESA Consolidated Zinc Financial Highlights YoY decrease in revenues and EBITDA in the zinc business unit driven by lower LME zinc and nickel prices … QoQ EBITDA up +29% in 1Q’16 after leaving bottom in 4Q’15 Zinc Revenues (€m) 66,0 58,7 58,0 58,0 1Q '15 vs '16 4Q '15 vs 1Q '16 Zinc EBITDA (€m) 38
Slide 17: Zinc Cash Flow & Liquidity
BEFESA Zinc Cash Flow & Liquidity 1Q’16 with positive cash flow driven by operating activities Operating activities: During 1Q 2016 the net cash flows generated by operating activities amounted to €3,9 million; a €11 million decrease vs 1Q 2015 and a €6 million increase vs. 4Q 2015. Investing ac
Slide 18: Aluminum Financial Highlights
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Aluminum Financial Highlights 18
Slide 19: Aluminum Financial Highlights
BEFESA Aluminum Financial Highlights 1Q 2016 EBITDA decreased to €7 million driven mainly by lower LME aluminum alloy prices and compressed metal margins Aluminum Revenues (€m) 2015 2016 Revenues Highlights During 1Q 2016 revenues decreased by 9% vs 1Q 2015 92,5 mainly driven by: 84,1 84,1 79,3 -
Slide 20: IES Financial Highlights
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook IES Financial Highlights 20
Slide 21: IES Financial Highlights
BEFESA IES Financial Highlights Normalized for the Sulfur divestiture IES up +24% or €0,5 million EBITDA vs 1Q ‘15 with acquisition and integration of Solarca … IES Revenues (€m) 2015 2016 Revenues Highlights During 1Q 2016 revenues decreased by 19% (compared to 1Q 2015) to €23 million, driven by
Slide 22: Consolidated Non-Zinc Financial Highlights
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Consolidated Non-Zinc Financial Highlights 22
Slide 23: Consolidated Non-Zinc Financial Highlights
BEFESA Consolidated Non-Zinc Financial Highlights Decrease in revenues and EBITDA in the non-zinc business mainly driven by lower LME aluminum alloy prices and metal margins Non-Zinc Revenues (€m) 120,9 113,5 107,0 107,0 114,3 ex Sulfur 105,9 ex Sulfur 1Q '15 vs '16 4Q '15 vs 1Q '16 Non-Zinc EBITDA
Slide 24: Consolidated Financial Highlights
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Consolidated Financial Highlights 24
Slide 25: Consolidated Financial Highlights
BEFESA Consolidated Financial Highlights 2016 revenues down 12% and EBITDA down 32% vs. 1Q 2015 Consolidated Revenues (€m) Highlights 187,0 M€ 1Q 2016 consolidated revenues amounted 165,0 M€ 172,2 M€ 165,0 M€ 15% 14% 19% 14% to €165 million, -12% or €22 million 49% 51% 46% 51% decrease compared to
Slide 26: Consolidated P&L
BEFESA Consolidated P&L Consolidated P&L (‘000 euros) BEFESA Profit & Loss Statement ('000 euros) 1Q 2015 1Q 2016 Change 4Q 2015 1Q 2016 Change Revenue 186.953 164.995 (21.958) 172.227 164.995 (7.232) EBITDA 37.278 25.363 (11.915) 28.753 25.363 (3.390) Depreciation, amortisation and impairment provi
Slide 27: Consolidated Cash Flow Statement
BEFESA Consolidated Cash Flow Statement Operating activities: During 1Q 2016 the net cash flows generated by operating activities amounted to €12,6 million (a €5,7 million decrease compared to 1Q 2015), due to the lower performance of the quarter. Investing activities: During 1Q 2016 the net cas
Slide 28: Debt Structure & Net Debt Position – Mar YTD 2016
BEFESA Debt Structure & Net Debt Position – Mar YTD 2016 Solid and stable financing position at 3 levels (Zinc, Non-Zinc and Corporate) with total leverage at x4,3 Net Debt / Total Net LTM Mar 2016 EBITDA PIK Note 166 M€ Debt(1) 560 M€ x4,3(2) Befesa Medio Ambiente Ring fence structure Zinc Non Zinc
Slide 29: Business Outlook
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Javier Molina Chief Executive Officer 29
Slide 30: 2016 Business Focus
BEFESA 2016 Business Focus Main priorities for 2016 - focus on parallel path of profitable growth for the next years and operational excellence Main priorities for 2016 • Sustain and improve our Health & Safety performance across the entire organization • Preserve the cash position by managing prope
Slide 31: Questions
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Questions 31
Slide 32: Appendix
BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook 32
Slide 33: Zinc Detailed Operational Data
BEFESA Zinc Detailed Operational Data 1Q 1Q 1Q 2016 vs 2015 4Q 1Q 1Q 2016 vs 4Q 2015 Change Change 2015 2016 2015 2016 (tons) (%) (tons) (%) Crude steel dust recycling Installed capacity1 tons 670.300 780.300 110.000 16,4% 670.300 780.300 110.000 16,4% Crude steel dust processed tons 141.535 138.121
Slide 34: Aluminum Detailed Operational Data
BEFESA Aluminum Detailed Operational Data 1Q 1Q 1Q 2016 vs 2015 4Q 1Q 1Q 2016 vs 4Q 2015 Change Change 2015 2016 2015 2016 (tons) (%) (tons) (%) Salt slags and SPLs recycling Installed capacity6 tons 609.000 609.000 0 0,0% 609.000 609.000 0 0,0% Salt slags recycled tons 110.644 108.414 (2.230) -2,0%
Slide 35: Consolidated P&L
BEFESA Consolidated P&L BEFESA Profit & Loss Statement ('000 euros) 1Q 2015 1Q 2016 Change 4Q 2015 1Q 2016 Change From continuing operations: Revenue 186.953 164.995 (21.958) 172.227 164.995 (7.232) +/- Changes in inventories of finished goods and work in progress (520) (1.314) (794) 4.202 (1.314) (
Slide 36: Consolidated Balance Sheet
BEFESA Consolidated Balance Sheet BEFESA Balance Sheet ('000 euros) Assets 31.03.16 31.12.15 Equity and liabilities 31.03.16 31.12.15 Equity: Non-current assets Attibutable to owners of the parent - Intangible assets Share capital 13 13 Goodwill 379.990 379.990 Reserve for valuation adjustments defe
Slide 37: Consolidated Cash Flow Statement
BEFESA BEFESA Consolidated Cash Flow Statement Cash Flow Statement ('000) 1Q 2015 1Q 2016 Change 4Q 2015 1Q 2016 Change Cash flows from operating activities: Profit (loss) for the period before tax 16.817 3.311 (13.506) (55.647) 3.311 58.958 Adjustments due to: Depreciation and amortisation charge 9
Slide 38: Zinc Detailed Balance Sheet
BEFESA Zinc Detailed Balance Sheet BEFESA ZINC Balance Sheet ('000 Euros) Assets 31.03.2016 31.12.2015 Equity and Liabilities 31.03.2016 31.12.2015 Non-Current Assets: Equity: Intangible assets: Of the Parent: Goodwill 278.357 278.357 Share capital 25.010 25.010 Unrealized Asset and Liability Revalu
Slide 39: Zinc Detailed P&L
BEFESA Zinc Detailed P&L BEFESA ZINC Profit & Loss Statement ('000 euros) 1Q 2015 1Q 2016 Change 4Q 2015 1Q 2016 Change Revenue 66.047 57.980 (8.067) 58.738 57.980 (758) Cost of sales (36.121) (36.889) (768) (44.174) (36.889) 5.858 Other operating income 694 459 (235) 1.616 459 (1.157) Gross Profit
Slide 40: Zinc Detailed Cash Flow
BEFESA Zinc Detailed Cash Flow BEFESA ZINC Cash Flow Statement ('000 euros) 1Q 2015 1Q 2016 Change 4Q 2015 1Q 2016 Change Cash Flows From Operating Activities Profit for the period before tax 12.622 3.481 (9.141) (14.701) 3.481 18.182 Adjustments due to: Amortization/ Depreciation 4.072 4.354 282 5.