Slide 1: Second Quarter 2016 Earnings Presentation
BEFESA BEFESA Second Quarter 2016 Earnings Presentation 24th August 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 2Q 2016 Highlights
BEFESA Befesa 2Q 2016 Highlights Consolidated 2Q revenues of €182 million, down (11%) YoY. - Steel results improving but LME zinc prices still (15%) below 2Q’15. - Aluminum operational performance good but LME prices down (14%) YoY and metal margin still depressed. - IES in line with expectations. C
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 Operational Performance EAF Throughput Highlights - 138.167 tons of crude steel dust treated in 2Q Crude steel dust deliveries in line with 2016 (+0,9% vs 2Q 2015); 276.288 tons treated in expectations 1H 2016 (-0,8
Slide 8: Zinc Prices & Hedging
BEFESA Zinc Prices & Hedging Zinc prices during 2Q‘16 maintained the upward trend seen since begin of the year … 2Q average at €1.699 still down (15%) YoY Zinc Prices 2.200 € 2H ‘16: 2012: 2013: 1Q ‘14: €1.703/t €1.700/t €1.550/t €2.038/t During the 2Q ‘16 LME zinc prices traded on average $270/t
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 Good operational performance with stronger secondary alu volumes as well as salt slag volumes mainly driven by new plant in Germany … LME aluminum alloy prices and metal margin still depressed Operational Performance Salt Slag/SPLs Recycled Highlights - 132.538 tons of
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. Aluminum Growth New Secondary Aluminum Plant in Bernburg (Germany) 2Q 2016 annualized run rate above 90% of targeted capacity … continue focus during th
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 Decrease YoY of crude steel segment EBITDA mainly due to the lower zinc prices compared to the same period of 2015 Crude Steel Revenues (€m) Revenues Highlights YoY 2Q’16 vs. ‘15 the revenues decreased by €3,5 million or -6,5% mainly driven by: 104,5 - decre
Slide 15: Stainless Steel Financial Highlights
BEFESA Stainless Steel Financial Highlights Higher stainless volumes offset by significantly lower nickel prices Stainless Revenues (€m) Revenues Highlights The stainless steel segment revenues increased by +9% vs 2Q’15 and by +1% vs 1H’15 mainly driven by higher volumes of stainless steel 23,7 23
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 compared to same periods of 2015 … but consecutive quarter over quarter improvement since 4Q´15 Zinc Revenues (€m) 137,1 126,2 71,1 68,2 58,7 58,0 68
Slide 17: Zinc Cash Flow & Liquidity
BEFESA Zinc Cash Flow & Liquidity 1H’16 with positive cash flow driven by operating activities Operating activities: During 1H 2016 the net cash flows generated by operating activities amounted to €3,4 million (a €21m decrease vs 1H 2015), driven by EBITDA decrease during the first half of the yea
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 Good operational performance of the Aluminum business unit … LME aluminum alloy prices and metal margin still depressed Aluminum Revenues (€m) Revenues Highlights During 2Q 2016 revenues decreased 14% (compared to 191,6 169,4 2Q 2015) mainly driven by lower LME
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 down by approx. €1 million EBITDA vs 2Q‘15 including the acquisition and integration of Solarca IES Revenues (€m) Revenues Highlights During 2Q 2016 revenues decreased by 30% (compared 69,9 to 2Q 2015) to €29 million, mainly
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 Revenues and EBITDA in the non-zinc business impacted by weak LME alu alloy prices & margins … However, consecutive quarter over quarter EBITDA improvement (from €9,6m in 1Q’16 to €13,1m in 2Q’16) Non-Zinc Revenues (€m) 261,0 220,8 247,0 ex Sulfur 14
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 2Q’16 revenues down 14% and EBITDA down 20% vs. 2Q’15 … But quarter over quarter improved from 1Q at €25m to 2Q´16 at €35m Consolidated Revenues (€m) Highlights 398,1 M€ 211,2 M€ 346,9 M€ 2Q 2016 consolidated revenues at €182 181,9 M€ 18% 20% 15% million, -
Slide 26: Consolidated P&L
BEFESA Consolidated P&L 2Q’16 EBITDA down 20% or €9 million vs. 2Q’15 … Net income down 8% or €0,6 million. Consolidated P&L (‘000 euros) BEFESA Profit & Loss Statement ('000 euros) 2Q 2015 2Q 2016 Change 1H 2015 1H 2016 Change Revenue 211.196 181.942 (29.254) 398.149 346.937 (51.212) EBITDA 43.328
Slide 27: Consolidated Cash Flow Statement
BEFESA Consolidated Cash Flow Statement Operating activities: During 1H 2016 the net cash flows generated by operating activities amounted to €10,4 million (a €33,6 million decrease compared to 1H 2015), mainly due to lower metal LME prices and higher taxes paid compared to the first half of 2015.
Slide 28: Debt Structure & Net Debt Position – June YTD 2016
BEFESA Debt Structure & Net Debt Position – June YTD 2016 Solid and stable financing position at 3 levels (Zinc, Non-Zinc and Corporate) with total leverage at x4,6 Net Debt / Total Net LTM June 2016 EBITDA PIK Note 162 M€ Debt(1) 560 M€ x4,6(2) Befesa Medio Ambiente Ring fence structure Zinc Non Zi
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 focused on parallel path of profitable growth for the next years and operational excellence Main priorities for 2016 on track • Sustain and improve our Health & Safety performance across the entire organization • Preserve the cash position by manag
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 2Q 1H 1Q 2Q 1H 2Q 2016 vs 2015 1H 2016 vs 2015 Change Change 2015 2015 2015 2016 2016 2016 (tons) (%) (tons) (%) Crude steel dust recycling Installed capacity1 tons 670.300 670.300 670.300 780.300 780.300 780.300 110.000 16,4% 110.000 16,4% Crude steel dust p
Slide 34: Aluminum Detailed Operational Data
BEFESA Aluminum Detailed Operational Data 1Q 2Q 1H 1Q 2Q 1H 2Q 2016 vs 2015 1H 2016 vs 2015 Change Change 2015 2015 2015 2016 2016 2016 (tons) (%) (tons) (%) Salt slags and SPLs recycling Installed capacity6 tons 609.000 609.000 609.000 609.000 609.000 609.000 0 0,0% 0 0,0% Salt slags recycled tons
Slide 35: Consolidated P&L
BEFESA Consolidated P&L BEFESA Profit & Loss Statement ('000 euros) 2Q 2015 2Q 2016 Change 1H 2015 1H 2016 Change From continuing operations: Revenue 211.196 181.942 (29.254) 398.149 346.937 (51.212) +/- Changes in inventories of finished goods and work in progress (38) (1.597) (1.559) (558) (2.911)
Slide 36: Consolidated Balance Sheet
BEFESA Consolidated Balance Sheet BEFESA Balance Sheet ('000 euros) Assets 30.06.16 31.12.15 Equity and liabilities 30.06.16 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 Consolidated Cash Flow Statement BEFESA Cash Flow Statement ('000) 2Q 2015 2Q 2016 Change 1H 2015 1H 2016 Change Cash flows from operating activities: Profit (loss) for the period before tax 13.356 12.172 (1.184) 30.173 15.483 (14.690) Adjustments due to: Depreciation and amortisation charge
Slide 38: Zinc Detailed Balance Sheet
BEFESA Zinc Detailed Balance Sheet BEFESA ZINC Balance Sheet ('000 Euros) Assets 30.06.2016 31.12.2015 Equity and Liabilities 30.06.2016 31.12.2015 Non-Current Assets: Equity: Intangible assets: Of the Parent: Goodwill 278.357 278.357 Share capital 25.010 25.010 Other intangible assets 3.373 4.038 U
Slide 39: Zinc Detailed P&L
BEFESA Zinc Detailed P&L BEFESA ZINC Profit & Loss Statement ('000 euros) 2Q 2015 2Q 2016 Change 1H 2015 1H 2016 Change Revenue 71.059 68.174 (2.885) 137.106 126.154 (10.952) Cost of sales (40.867) (41.715) (848) (76.988) (78.604) (1.616) Other operating income 521 854 333 1.215 1.313 98 Gross Profi
Slide 40: Zinc Detailed Cash Flow
BEFESA BEFESA ZINC Zinc Detailed Cash Flow Cash Flow Statement ('000 euros) 2Q 2015 2Q 2016 Change 1H 2015 1H 2016 Change Cash Flows From Operating Activities Profit for the period before tax 11.957 11.298 (659) 25.579 14.779 (9.800) Adjustments due to: Amortization/ Depreciation 4.374 4.363 (11) 8.