Slide 1: First Half 2021 Earnings Presentation
First Half 2021 Earnings Presentation 29 July 2021
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: Highlights
Electric arc furnace steel dust (EAFD) recycling plant at Asúa-Erandio, Spain 01 Highlights Javier Molina - CEO
Slide 4: Executive summary – H1 at record EBITDA & cash flow
Executive summary – H1 at record EBITDA & cash flow €94.1m €70.2m FY’21 guidance H1’21 EBITDA H1’21 Operating cash flow • FY EBITDA of €165 to €190m, 70% up yoy (H1’20: €55.3m), €59.0m up yoy (H1’20: €11.2m) +30% to +50% yoy 24% margin (vs. 18% in H1’20) 18% or €14m up vs. H1’19 €196.6m of cash on h
Slide 5: Financial results
Secondary aluminium production plant at Bernburg, Germany 02 Financial results Wolf Lehmann - CFO
Slide 6: Consolidated key financials
Consolidated key financials H1 EBITDA at €94.1m, all-time-high, driven by strong base metal prices as well as continued solid volumes with strong plant utilisation at pre-COVID levels EBITDA bridge H1 2020 to 2021 (€m) +€38.9 / +70.4% 94.1 - Operational excellence 39.3 Inflation 55.3 FX -0.5 Other +
Slide 7: Steel Dust Recycling Services
Steel Dust Recycling Services H1 EBITDA at €69.2m, performing at strongest earnings level at 35% margin, driven mainly by favourable zinc prices; Overall plant utilisation continued at pre-COVID levels EBITDA bridge H1 2020 to 2021 (€m) +€24.5 / +54.7% 69.2 - 25.0 Operational excellence 44.7 -0.5 In
Slide 8: Aluminium Salt Slags Recycling Services
Aluminium Salt Slags Recycling Services H1 EBITDA at €24.8m, delivered record level results, doubling yoy; Mainly driven by higher aluminium metal prices yoy; Overall plant utilisation continued at solid pre-COVID-19 levels ≥ 90% EBITDA bridge H1 2020 to 2021 (€m) +€12.6 / +103.1% 24.8 - 12.6 12.2 -
Slide 9: Cash flow, net debt & leverage
Cash flow, net debt & leverage Record cash balance at €197m & liquidity at €272m with €75m RCF entirely undrawn; Net leverage improved to x2.24 at Q2 closing, triggering next interest ratchet of 1.75% vs. 2.0% EBITDA to total cash flow (€m) 94.1 -7.0 -7.6 70.2 -9.3 -13.1 42.1 -30.0 15.0 Mainly China
Slide 10: Zinc prices & hedging strategy
Zinc prices & hedging strategy Hedges fully extended up to and including July 2024, improving earnings & cash flows visibility Zinc LME price vs. hedges (€/t) € 3,500 Zinc LME Forwards Average blended € 2,500 €2,317 c. €2,300 c. €2,325 €2,239 c. €2,200 c. €2,150 €2,280 €2,136 € 1,500 2019 2020 2021
Slide 11: Growth projects & outlook
Nanjing City, location of Befesa China’s HQ 03 Growth projects & outlook Javier Molina - CEO
Slide 12: Befesa signed AZR acquisition; creating a global EAFD recycling leader
Befesa signed AZR acquisition on 16 June; Expecting closing in Aug; Creating a global leader1) in EAFD recycling BEFESA #1 Europe (Steel Dust & Salt Slags) a US / North American leader (Steel Dust) #1 Asia1) (Steel Dust) EAFD recycling EAFD recycling Zinc refining EAFD annual installed recycling cap
Slide 13: China I and China II plants
China I Changzhou plant, Jiangsu province Key facts of the plant: • 1st EAFD recycling plant in China • Capacity to recycle 110kt EAFD p.a. • Total investment: c. €42m • Location: Changzhou (Jiangsu province) Status update: Long-term financing closed July 2020 Construction completed, on time and on
Slide 14: Befesa FY'21 EBITDA guidance & assumptions
Befesa FY’21 EBITDA guidance & assumptions H1 annualised and expected strong H2 indicating upper end of FY’21 guidance range; Targeting to update guidance after closing & consolidation of AZR acquisition, as part of the Q3 reporting cycle Lower-end: €165m EBITDA Upper-end: €190m EBITDA EBITDA (above
Slide 15: ESG at Befesa
EAFD recycling plant at Gyeongju, South Korea 04 ESG at Befesa Javier Molina - CEO
Slide 16: Sustainability at Befesa
Sustainability at Befesa Key player within the circular economy, with c. 1.5 million tonnes recycled and c. 1.3 million tonnes of valuable materials recovered annually, that contributes significantly to increase efficiency of raw material use in the metals industry and promotes the transition toward
Slide 17: Investor agenda & appendix
Waelz kiln at EAFD recycling plant in Gyeongju, South Korea 05 Investor agenda & appendix
Slide 18: Investor agenda
Investor agenda Financial calendar Next investor conferences Q3 2021 Q4 2021 Q3 2021 Statement & Conf. Call Commerzbank Corporate Conference London – Global Natural Resources Thursday, 28 October 2021 2021 (virtual) Conference 2021 31 Aug – 2 Sep – Commerzbank 11 Nov – Goldman Sachs London – 2021 Cr
Slide 19: Q2 2021/20 – Key financials
Q2 2021/20 – Key financials (€m, unless otherwise stated) Steel Salt Secondary Corporate & Total Dust Slags Aluminium eliminations Befesa Revenue1) €94.4 €17.5 €89.8 -€10.2 €191.6 yoy change +€20.2 / +27.1% +€1.7 / +10.9% +€50.1 / +125.9% -€2.5 / - +€69.4 / +56.8% EBITDA €32.7 €5.2 €7.3 €0.0 €45.3 y
Slide 20: H1 2021/20 – Key financials
H1 2021/20 – Key financials (€m, unless otherwise stated) Steel Salt Secondary Corporate & Total Dust Slags Aluminium eliminations Befesa Revenue1) €195.3 €37.3 €172.3 -€20.7 €384.2 yoy change +€19.8 / +11.3% -€0.6 / -1.5% +€67.1 / +63.8% -€3.3 / - +€83.0 / +27.6% EBITDA €69.2 €11.1 €13.7 €0.1 €94.1
Slide 21: Multi-year trend – Key financials
Multi-year trend – Key financials1) (€m, unless otherwise stated) 2017 2018 2019 2020 Revenue €667.42) €720.1 €647.9 €604.3 Reported EBITDA €153.0 €176.0 €159.6 €123.5 Reported EBITDA 22.9%2) 24.4% 24.6% 20.4% margin Adjusted EBITDA €172.43) €176.0 €159.6 €127.04) Adjusted EBITDA 25.8%2) 24.4% 24.6%
Slide 22: Q2 2021/20 – Operational data – Steel Dust Recycling Services
Q2 2021/20 – Operational data – Steel Dust Recycling Services Q2 2020 Q2 2021 yoy change EAFD 155.6 159.6 +4.0 / +2.6% throughput (kt) EAFD average 75.8% 77.6% +173 bps capacity utilisation (%) Waelz oxide 58.7 52.6 -6.1 / -10.4% (WOX) sold (kt) Zinc LME price €1,780 €2,418 +€639 / +35.9% (€/t) Zinc
Slide 23: H1 2021/20 – Operational data – Steel Dust Recycling Services
H1 2021/20 – Operational data – Steel Dust Recycling Services H1 2020 H1 2021 yoy change EAFD 341.2 340.7 -0.6 / -0.2% throughput (kt) EAFD average 83.1% 83.2% +9 bps capacity utilisation (%) Waelz oxide 126.5 119.3 -7.1 / -5.6% (WOX) sold (kt) Zinc LME price €1,855 €2,349 +€494 / +26.7% (€/t) Zinc
Slide 24: Q2 2021/20 – Operational data – Aluminium Salt Slags Recycling Services
Q2 2021/20 – Operational data – Aluminium Salt Slags Recycling Services Q2 20201) Q2 2021 yoy change Salt Slags & 105.7 91.3 -14.4 / -13.6% SPL treated (kt) Salt Slags & 80.2% 81.4% +117 bps SPL avg. cap. utilisation (%) Aluminium 31.3 48.2 +16.8 / +53.7% alloys produced (kt) Secondary Alu 61.5% 94.
Slide 25: H1 2021/20 – Operational data – Aluminium Salt Slags Recycling Services
H1 2021/20 – Operational data – Aluminium Salt Slags Recycling Services H1 20201) H1 2021 yoy change Salt Slags & 230.4 195.8 -34.7 / -15.0% SPL treated (kt) Salt Slags & 87.4% 87.7% +29 bps SPL avg. cap. utilisation (%) Aluminium 79.3 99.5 +20.2 / +25.5% alloys produced (kt) Secondary Alu 77.7% 97.
Slide 26: Multi-year trend – Operational data
Multi-year trend – Operational data 2017 2018 2019 2020 EAFD throughput (kt) 661.0 717.1 665.8 687.0 EAFD average capacity 84.7% 92.0% 80.7% / 90.1%1) 83.0% utilisation (%) Waelz oxide (WOX) 217.8 240.9 217.6 239.2 sold (kt) Zinc LME price (€/t) €2,572 €2,468 €2,276 €1,979 Zinc hedging €1,876 €2,051
Slide 27: Consolidated key financials
Consolidated key financials Q2 EBITDA at €45.3m; benefited from favourable market prices; Volumes continued solid with plant utilisation at pre-COVID levels EBITDA bridge Q2 2020 to 2021 (€m) +€23.6 / +108.7% 45.3 - Operational excellence 21 Inflation FX 21.7 3 Other +1 Steel dust +7 Zinc LME +2 2nd
Slide 28: Steel Dust Recycling Services
Steel Dust Recycling Services Q2 EBITDA at €32.7m; Favourable zinc LME prices and TC, partially offset by slightly lower zinc hedging prices EBITDA bridge Q2 2020 to 2021 (€m) +€13.9 / +74.1% 32.7 - Operational excellence 13 18.8 Inflation 1 FX +7 Zinc LME Other -1 Hedges below LME +8 Favourable TC
Slide 29: Aluminium Salt Slags Recycling Services
Aluminium Salt Slags Recycling Services Q2 EBITDA at €12.5m, all-time-high, mainly driven by higher aluminium alloys & market prices partially offset by lower salt slags & SPL treated (UK closure) EBITDA bridge Q2 2020 to 2021 (€m) +€8.9 / +245.6% 12.5 7 - Operational excellence Inflation 3.6 2 Alu
Slide 30: Cash flow, net debt & leverage
Cash flow, net debt & leverage Record cash balance at €197m & liquidity at €272m with €75m RCF entirely undrawn; Net leverage improved to x2.24 at Q2 closing, triggering next interest ratchet of 1.75% vs. 2.0% EBITDA to total cash flow (€m) 45.3 5.6 -1.3 43.7 -5.9 -8.6 32.6 -6.6 4.1 Mainly China Mai