Befesa Sa · XETR:BFSA
Befesa Sa — 23rd ODDO BHF Forum 2020
27 slides from Befesa Sa's conference presentation, Jan 9, 2020
Slide 1: Befesa Presentation, 23rd ODDO BHF Forum
BEFESA BEFESA Befesa Presentation 23rd ODDO BHF Forum Lyon, 9 – 10 January 2020
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: Agenda
BEFESA Agenda 1 Recent Developments & Q3 2019 Update 2 Befesa Overview 3
Slide 4: 9M Highlights
BEFESA 9M Highlights • Steel Dust throughput 489kt (-9% YoY): Turkey upgrade • Salt Slags ~flat at 366kt in 9M (-3% YoY) Operational performance as expected, • Core businesses normalised at high >90% utilisation with Turkey back in production in Aug • Aluminium alloys at 133kt in 9M (+5% YoY): Furna
Slide 5: Consolidated Key Financials
BEFESA Consolidated Key Financials Q3 EBITDA at €37.0m (€-3.0m / -7.5% YoY): Lower volume due to Turkey upgrade; Unfavourable TC & market prices; Partially offset by higher hedges, recovering Stainless operations and ´18 Aluminium furnace upgrade delivering Revenue (€m) ▪ Q3 revenue down 5.8% YoY to
Slide 6: Steel Dust Recycling Services
BEFESA Steel Dust Recycling Services Q3 EBITDA at €30.2m, (€-1.3m YoY); driven by lower volume in Turkey -&- unfavourable TC; Mostly offset by improved hedges & Stainless operations Revenue EAF dust throughput & capacity utilisation (€m) €-9.0m / -3.2% (thousand tonnes, % of annual installed capacit
Slide 7: Aluminium Salt Slags Recycling Services
BEFESA Aluminium Salt Slags Recycling Services Q3 EBITDA at €6.1m (€-1.9m YoY) mainly driven by lower aluminium alloy prices; Plant utilisation >90% normalised for furnace upgrades Revenue(1) Volumes & capacity utilisation (€m) 258.1 (thousand tonnes, % of annual installed capacity) 224.2 Salt Slags
Slide 8: Consolidated Net Debt / Leverage
Consolidated Net Debt / Leverage BEFESA / Cash Flow / Capital Structure Paid €45m dividend in July; Closed Q3 with €101m cash and x2.7 leverage; Capital structure with long 7-year tenor up to 2026 at attractive interest rates Net debt 9M’19 EBITDA to total cash flow – main drivers (€m, as of 30 Sept
Slide 9: Zinc Prices & Hedging Strategy
BEFESA Zinc Prices & Hedging Strategy Hedging up to Oct ´21 improves earnings & cash flows visibility for next ~2 yrs € 3.000 Market zinc price vs. zinc hedges (€/tonne) € 2.500 ~€2,310 ~€2,250 €2,168 9M ’21: €2,160 ~€2,200 € 2.000 €2,051 Closed ~half of Q3 ’21 €1,939 €1,876 targeted hedge volume €
Slide 10: Summary / Outlook
BEFESA Summary / Outlook Expecting higher volumes in Q4 • Steel dust higher throughput mainly due to Turkey back online in both core businesses with • Aluminium Salt Slags higher volumes mainly driven by utilisation rates at >90% on average, upgraded higher efficiency furnace in Barcelona in line wi
Slide 11: Mid-Term Growth Roadmap
BEFESA Mid-Term Growth Roadmap Accelerating growth through well defined business plan; Hedging in place and executing top 5 growth projects + China 1 Hedging • 2019: 92.4kt at ~€2,310/t • 2020: 92.4kt at ~€2,250/t • 9M 2021: 57.3kt at ~€2,200/t 2 Organic growth 2019/20 focus – top 5 projects: Indica
Slide 12: Turkey – Plant Upgrade Completed
BEFESA 2 Turkey – Plant Upgrade Completed ✓ Turkey 65kt to 110kt capacity expansion completed on time & budget Iskenderun, Turkey – Steel dust recycling annual capacity expanded from 65kt to 110kt View of the plant View of the plant and the Waelz kiln ✓ Electric Arc Furnace (EAF) dust recycling plan
Slide 13: Korea – WOX Washing Plant Completed
BEFESA 2 Korea – WOX Washing Plant Completed ✓ Completed on time and budget; Finalized commissioning & ramp-up in Dec Pohang, South Korea – Status of construction of WOX Washing plant Thickener tank Outside plant view ✓ “Greenfield” investment in the 1st WOX washing plant of Befesa at Asia ✓ Complet
Slide 14: Barcelona – Furnace Upgrade Completed
BEFESA 2 Barcelona – Furnace Upgrade Completed ✓ Barcelona furnace upgrade completed on time and budget; Pouring ingots; Ramped up in December Barcelona, Spain – Refurbished 2nd Aluminium plant with high efficiency furnaces Tilting furnace – Pouring Ingots Salt slags handling Cooling Equipment Comme
Slide 15: China – Plant #1: Jiangsu – Construction Progressing
BEFESA 3 China – Plant #1: Jiangsu – Construction Progressing Changzhou plant construction progressing; Ramp-up scheduled by end of 2020 1 Plant #1 in Changzhou (Jiangsu province) Piling works – Plant buildings Key facts of the plant • 1st Electric Arc Furnace (EAF) dust recycling plant in China wit
Slide 16: China – Plant #2: Henan – Ground breaking Nov
BEFESA 3 China – Plant #2: Henan – Ground breaking 13 Nov Ground breaking ceremony held on 13 November; Preparing site for construction 2 Plant #2 in Xuchang (Henan province) Ground breaking ceremony, 13 Nov 2019 Key facts of the plant • 2nd EAF dust recycling plant in the country • Capacity to recy
Slide 17: Agenda
BEFESA Agenda 1 Recent Developments & Q3 2019 Update 2 Befesa Overview 17
Slide 18: Befesa at a Glance
BEFESA Befesa at a Glance Befesa a market leader in Europe & Asia in providing mission critical hazardous waste recycling services to the steel and aluminium industry LTM Q3 2019 Revenue: €678m(1) LTM Q3 2019 EBITDA: €164m 2nd 2nd Aluminium Aluminium 37% 8% Steel Dust 52% Salt Slags Steel Dust 13% 7
Slide 19: Befesa at a Glance: Growth History
BEFESA Befesa at a Glance Befesa has grown successfully through organic initiatives and acquisitions Successful greenfield Frankfurt Stock Exchange Founded in Germany Acquisitions & turnarounds (state-of-the-art technology) & SDAX 1987 2006 2009 2013 2014 2017 / 2018 Metallgesellschaft, German Befes
Slide 20: Investment Highlights
BEFESA Investment Highlights 2 European market leader in niche recycling 1 3 markets with Favourable macro competitive advantage from Critical and mega trends plants close to environmental supporting Steel clients regulated services Dust and to long-term clients Aluminium markets 7 4 Experienced Alu
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 Resilient Business
BEFESA 5 Highly Resilient Business Revenue(1) EBITDA and % margin(2) (€m) (€m) 22% 26% 24% 720 667 172 176 594 9 12 296 300 133 27 25 268 9 83 24 83 79 135 137 332 381 99 281 2016 A 2017 A 2018 A 2016 A 2017 A 2018 A EBIT and % margin(2) Operating cash flow(3) (€m) (€m) Incl. ~€30m one-off 17% 22% 2
Slide 24: Mid-Term Growth Roadmap
BEFESA 6 Mid-Term Growth Roadmap Accelerating growth through well defined business plan; Hedging in place and executing top 5 growth projects + China 1 Hedging • 2019: 92.4kt at ~€2,310/t • 2020: 92.4kt at ~€2,250/t • 9M 2021: 57.3kt at ~€2,200/t 2 Organic growth 2019/20 focus – top 5 projects: Indi
Slide 25: 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; inclu
Slide 26: Sustainability at Befesa
BEFESA Sustainability at Befesa Befesa has a strong commitment for a more sustainable world • Befesa recycles annually more than 1.5 million tonnes of hazardous residues, avoiding landfilling and recovering more than 600,000 tonnes of valuable materials • Befesa’s business model is vital part of the
Slide 27: Investor Agenda
BEFESA Investor Agenda Financial Calendar Meet Befesa … Thursday, 26 March 2020: ✓ 10-12 September 2019 – J.P. Morgan Annual Report 2019 & Analyst Call London, Small & Mid-Caps Conference 2019 ✓ 19-20 September 2019 – Citi London, SMID/Growth Conference 2019 ✓ 23-25 September 2019 – Goldman Sachs &