Slide 1: Befesa Business Update – June 2018
BEFESA BEFESA Befesa Business Update – June 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: Key Highlights
BEFESA Key Highlights Solid start of 2018 with €44.5m EBITDA / €37.2m EBIT in Q1 ’18, both up +7% YoY… driven mainly by higher volumes and continued favorable price environment Consecutive run rate growth … LTM(1) Q1 ’18 revenue of €747m, Adj. EBITDA of €175m and Adj. EBIT of €146m Stable capital st
Slide 5: Mid-Term Growth Roadmap
BEFESA Mid-Term Growth Roadmap Accelerated top- and bottom-line growth through a well-defined strategy Q1 Results within Expectations … Maintaining 2018 Guidance 1 Utilization • 2017 to 2018 growing but rather single digit … • Increase plant utilization of prior New capacities coming online 2019 onw
Slide 6: Agenda
BEFESA Agenda 1 Update since IPO 2 Q1 2018 Update Befesa Overview 3 (Investment Highlights) 6
Slide 7: Share Performance / Ownership Overview
BEFESA Share Performance / Ownership Overview Befesa’s share price has developed positively since the IPO outperforming DAX / SDAX indices … Free-float increased to 56.3% Performance of Befesa Share vs. Market(1) Key Highlights ▪ Befesa share developed positively, 140 closing Q1 2018 at €42.00, up b
Slide 8: Hedging Strategy
BEFESA Hedging Strategy Hedging program in place covering up to and including mid 2021 … Improving visibility of earnings and cash flows for the next 3 years Market Zinc Price vs. Zinc Hedge ▪ Extended hedging period to cover (€/ton) up to mid 2021 ▪ Increased volume coverage … Higher volume of 7.7
Slide 9: Consolidated Net Debt / Leverage / Cash Flow / Capital Structure
Consolidated Net Debt / Leverage / BEFESA Cash Flow / Capital Structure Stable capital structure and slightly reduced leverage to 2.3x at close Q1 ’18 … Net Debt and Leverage Rate Evolution(1) Free Cash Flow(2) (€m) 526 118 (€m) 407 Cash 83% 77% 69% Conversion(3) Cash on hand stable Note: / +€1m vs.
Slide 10: 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 11: Agenda
BEFESA Agenda 1 Update since IPO 2 Q1 2018 Update Befesa Overview 3 (Investment Highlights) 11
Slide 12: Consolidated Key Financials
BEFESA Consolidated Key Financials Continued solid growth; Earnings Q1 YoY up +7% … Befesa LTM run rate at €747m Revenue, €175m Adj. EBITDA / €146m Adj. EBIT Revenue Highlights (€m) ▪ Q1 ‘18 revenue increased +€23m / +13% YoY … 195,4 724,8 747,4 primarily due to: 172,8 - higher volumes in both core
Slide 13: 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) 355,4 332,1 101,6 78,3 661,0 692
Slide 14: Aluminium Salt Slags Recycling Services
BEFESA Aluminium Salt Slags Recycling Services Alu Salt Slags approx. flat YoY … Moderate volume growth in Salt Slags partially offset in 2nd Alu Revenue(1) +€1m / +0% Volumes & Capacity Utilization (€m) +€1m / +1% (thousand tons, % of annual installed capacity) 395.7 396.8 93.5 94.5 Salt Slags & SP
Slide 15: Agenda
BEFESA Agenda 1 Update since IPO 2 Q1 2018 Update Befesa Overview 3 (Investment Highlights) 15
Slide 16: 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) Q1 2018 Sales: LTM(1) Q1 2018 Adj. EBIT: €747m(2) €146m Secondary Secondary Aluminium Salt Slags Aluminium Steel Dust 2% Recycling 45%
Slide 17: 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 18: 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 19: 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 20: 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 21: 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 22: 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 23: 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 24: 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 25: 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 26: 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 - Kore
Slide 27: 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