Befesa Sa · XETR:BFSA
Befesa Sa — Investor Presentation (September 2018)
28 slides from Befesa Sa's investor presentation, September 2018
Slide 1: Befesa Business Update – September 2018
BEFESA BEFESA Befesa Business Update – September 2018
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: Agenda
BEFESA Agenda 1 Recent Developments 2 Q2 2018 Update Befesa Overview 3 (Investment Highlights) 4
Slide 5: Executive Summary
BEFESA Executive Summary Achieved Good Results in H1 2018 with +7% Earnings Growth YoY; S-DAX Entry Extended Zinc Hedges until July 2021; Providing 3 Years of Improved Visibility Challenging Market Trends: US Tariffs; Turkish Lira Depreciation; Zinc Price Decrease ... Limited and Manageable Impact o
Slide 6: Key Highlights Q2
BEFESA Key Highlights Q2 Solid Q2 2018 with €44.3m EBITDA / €37.0m EBIT, up +7 / +8% YoY respectively driven mainly by higher volumes and continued favorable price environment Extended hedges to cover up to H1 2021; Prices secured above €2,200/t; Improving visibility of earnings and cash flows for t
Slide 7: Mid-Term Growth Roadmap
BEFESA Mid-Term Growth Roadmap Accelerated top- and bottom-line growth through a well-defined strategy 1 Utilization • Increase plant utilization of prior year growth investments mainly Steel Dust Korea 2 Organic Growth 5 2018 Focus: • Steel Dust: 4 - Expand Turkey +45kt Indicative Earnings - Korea
Slide 8: Transformational Growth - China
BEFESA 4 Transformational Growth - 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 has bee
Slide 9: Hedging Strategy
BEFESA Hedging Strategy Hedging program in place covering up to July 2021: improving visibility of earnings and cash flows for the next 3 years Market Zinc Price vs. Zinc Hedge ▪ Extended hedging to cover up to mid 2021 (€/ton) ▪ Increased volume coverage Higher volume of 7.7 kt/month or 92.4 kt/yea
Slide 10: Consolidated Net Debt / Leverage / Cash Flow / Ratings
Consolidated Net Debt / Leverage / BEFESA Cash Flow / Ratings Stable capital structure; Leverage of 2.4x at June 30, 2018 Net Debt and Leverage Rate Evolution(1) Free Cash Flow(3) (€m) (€m) 529 105 Cash 424 83% 77% 69% Conversion(4) … after distributing Note: €25m dividend in May 133 Temporary 110 1
Slide 11: Investor Relations
BEFESA Investor Relations Financial Calendar Meet Befesa … ✓ Monday, February 19, 2018: ✓ January 8-9, 2018 - Commerzbank Publication of Preliminary Earnings Full Year 2017 New York, German Investment Seminar ✓ March 8, 2018 - Citibank London, Global Resources Conference ✓ Thursday, March 15, 2018:
Slide 12: Agenda
BEFESA Agenda 1 Recent Developments 2 Q2 2018 Update Befesa Overview 3 (Investment Highlights) 12
Slide 13: Consolidated Key Financials
BEFESA Consolidated Key Financials Continued solid growth similar to Q1; H1 Earnings up +7% YoY Revenue Highlights (€m) ▪ Q2 ‘18 Revenue increased to €187.0m / +8.6% YoY on a Reported 374,4 382,4 normalized basis(1); decreased (7.3)% YoY on a reported basis Reported 201,6 187,0 primarily due to: Nor
Slide 14: Steel Dust Recycling Services
BEFESA Steel Dust Recycling Services YoY double-digit increase in revenues & earnings driven by higher EAFD throughput and continued favorable zinc price environment Revenue EAFD Throughput & Capacity Utilization (€m) (thousand tons, % of annual installed capacity) 195,1 157,0 93,5 360,8 78,7 315,5
Slide 15: Aluminium Salt Slags Recycling Services
BEFESA Aluminium Salt Slags Recycling Services YoY slight decrease in earnings driven by lower Aluminium Salt Slags volumes partially offset by higher prices Revenue(1) Volumes & Capacity Utilization (€m) Reported 215.1 (thousand tons, % of annual installed capacity) 189.2 Reported 121.6 Salt Slags
Slide 16: Agenda
BEFESA Agenda 1 Recent Developments 2 Q2 2018 Update Befesa Overview 3 (Investment Highlights) 16
Slide 17: Befesa at a Glance
BEFESA Befesa at a Glance Befesa – European market leader in providing mission critical hazardous waste recycling services to the steel and aluminium industry LTM(1) Q2 2018 Sales: LTM(1) Q2 2018 Adj. EBIT: €733m(2) €149m Secondary Secondary Aluminium Salt Slags Aluminium 2% Steel Dust Recycling 42%
Slide 18: Befesa at a Glance
BEFESA Befesa at a Glance Befesa has grown successfully through organic initiatives and acquisitions Successful Greenfield Project Founded in Germany Acquisitions and Turnarounds Successful IPO (State of the Art Technology) 1987 2006 2007 2009 2014 2017 Metallgesellschaft, German Befesa acquires a A
Slide 19: Investment Highlights
BEFESA Investment Highlights 2 European Market Leader in Niche Recycling 1 3 Markets with Favourable Macro Competitive Critical and Mega Trends Advantage from Environmental Supporting Steel Plants Close to Regulated Services Dust and Clients to Long-term Aluminium Markets Clients 7 4 Experienced Alu
Slide 20: Favorable Macro and Mega Trends
BEFESA 1 Favorable Macro and Mega Trends Growing global middle class coupled with evident sustainability trends will further enhance the demand for steel and aluminium production and subsequent waste recovery globally Favorable Macro and …Driving Increasing …Combined with Favorable …Supported by Inc
Slide 21: Market Leader and Close Proximity to Clients
BEFESA 2 Market Leader and Close Proximity to Clients 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 Established Market Leader Proximity to Clients Provides Strong Competitive Advantage Steel Dust Rec
Slide 22: Critical Service – Highly Regulated
BEFESA 3 Critical Service – Highly Regulated Befesa offers a crucial service taking care of highly regulated hazardous waste in the value chain of secondary steel and aluminium producers Recycling Service Consequences of Hazardous Waste Non-Compliance Steel Dust Value Steel WOX • Major European stee
Slide 23: Highly Protected Service Business
BEFESA 4 Highly Protected Service Business Befesa’s services business is inherently protected by high barriers to entry New Entrants – High Barriers to Entry ▪ Technology and process know-how ▪ Capital intensity to build new plant ▪ Regionally the capacity is balanced Suppliers – Limited Bargaining
Slide 24: Highly Resilient Business
BEFESA 5 Highly Resilient Business Attractive growth track record with stable margins and strong cash generation Sales(1) Adj. EBIT Free Cash Flow(2) (€m) (€m) (€m) Margin Cash Conversion(3) 13% 18% 15% 17% 20% 72% 82% 83% 77% 725 144 4 631 20 133 612 554 103 535 332 95 110 97 3 101 254 281 7 9 18 8
Slide 25: Proven Resilience and Cash Flow Generation
BEFESA 5 Proven Resilience and Cash Flow Generation Proven margin stability despite volatile commodity prices – testament to successful service-focused business model and prudent hedging policy Adj. EBIT Margin / Zinc Price (in %, €/t) 3,500 72% 82% 83% 77% 3,000 Global melt down of automotive Sale
Slide 26: Resilience Underpinned by Service Business Model
BEFESA 5 Resilience Underpinned by Service Business Model Befesa is a service company managing and reducing exposure to commodity prices • Steel Dust Recycling Services and Aluminium Salt Slags Recycling Services with limited correlation Portfolio Mix • In 2015–2017 zinc and aluminium prices have sh
Slide 27: Mid-Term Growth Roadmap
BEFESA Mid-Term Growth Roadmap Accelerated top- and bottom-line growth through a well-defined strategy 1 Utilization • Increase plant utilization of prior year growth investments mainly Steel Dust Korea 2 Organic Growth 5 2018 Focus: • Steel Dust: 4 - Expand Turkey +45kt Indicative Earnings - Korea
Slide 28: Experienced Management Team
BEFESA 7 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; includi