Earnings Release • Nov 10, 2021
Earnings Release
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Q3 2021 Statement
| 9M 2021 | 9M 2020 | Change | Q3 2021 | Q3 2020 | Change | |
|---|---|---|---|---|---|---|
| Key operational data (tonnes, unless specified otherwise) | ||||||
| Electric arc furnace steel dust (EAFD) throughput | 563,274 | 501,914 | 12.2 % | 222,606 | 160,676 | 38.5 % |
| Waelz oxide (WOX) sold | 192,569 | 182,410 | 5.6 % | 73,235 | 55,948 | 30.9 % |
| Salt slags and Spent Pot Linings (SPL) recycled | 302,988 | 333,008 | (9.0) % | 107,224 | 102,570 | 4.5 % |
| Secondary aluminium alloys produced | 142,353 | 123,699 | 15.1 % | 42,900 | 44,444 | (3.5) % |
| Zinc LME average price (€ / tonne) | 2,414 | 1,905 | 26.8 % | 2,538 | 1,997 | 27.1 % |
| Zinc blended price (€ / tonne) | 2,241 | 2,089 | 7.3 % | 2,220 | 2,214 | 0.3 % |
| Aluminium alloy FMB average price (€ / tonne) | 1,978 | 1,342 | 47.4 % | 2,008 | 1,312 | 53.1 % |
| Key financial data (€ million, unless specified otherwise) | ||||||
| Revenue | 574.2 | 446.4 | 28.6 % | 190.0 | 145.2 | 30.9 % |
| EBITDA | 128.7 | 84.5 | 52.2 % | 34.6 | 29.3 | 18.0 % |
| EBITDA margin | 22.4 % | 18.9 % | 347 bps | 18.2 % | 20.2 % | (198) bps |
| Adjusted EBITDA1 | 136.8 | 84.5 | 61.8 % | 42.7 | 29.3 | 45.7 % |
| Adjusted EBITDA margin1 | 23.8 % | 18.9 % | 488 bps | 22.5 % | 20.2 % | 229 bps |
| EBIT | 98.3 | 41.6 | > 100 % | 22.8 | 21.1 | 8.2 % |
| EBIT margin | 17.1 % | 9.3 % | 779 bps | 12.0 % | 14.5 % | (252) bps |
| Adjusted EBIT1,2 | 106.4 | 57.1 | 86.3 % | 30.9 | 21.0 | 47.1 % |
| Adjusted EBIT margin1,2 | 18.5 % | 12.8 % | 574 bps | 16.3 % | 14.5 % | 180 bps |
| Financial result | (7.9) | (0.1) | > 100 % | 2.3 | (6.2) | - |
| Profit before taxes and minority interests | 90.4 | 41.6 | > 100 % | 25.1 | 14.8 | 69.0 % |
| Net profit attributable to shareholders of Befesa S.A. | 61.5 | 31.4 | 95.8 % | 15.9 | 10.8 | 46.8 % |
| EPS (in €)3 | 1.69 | 0.92 | 83.4 % | 0.40 | 0.32 | 25.0 % |
| Total assets4 | 1,683.2 | 1,061.6 | 58.5 % | 1,683.2 | 1,061.6 | 58.5 % |
| Capital expenditures | 60.8 | 36.2 | 68.0 % | 16.8 | 11.9 | 41.9 % |
| Cash flow from operating activities | 73.9 | 37.8 | 95.7 % | 3.7 | 26.6 | (86.1) % |
| Cash and cash equivalents at the end of the period | 200.7 | 107.8 | 86.2 % | 200.7 | 107.8 | 86.2 % |
| Net debt | 482.1 | 420.3 | 14.7 % | 482.1 | 420.3 | 14.7 % |
| Net leverage | x 2.33 | x 3.31 | (x 0.98) | x 2.33 | x 3.31 | (x 0.98) |
| Number of employees (as of end of the period) | 1,537 | 1,156 | 33.0 % | 1,537 | 1,156 | 33.0 % |
1 9M/Q3 2021 EBITDA and EBIT adjusted for the €8.1m non-recurring AZR acquisition-related costs
2 9M 2020 EBIT adjusted for the impairment of the UK salt slags plant
EPS in 9M/Q3 2020 is based on 34,066,705 shares; 9M 2021 is based on 36,370,474 weighted average shares after the capital increase of 5,933,293 new shares;
Q3 2021 is based on 39,999,998 outstanding shares after the capital increase
4 2020 figure as of 31 December
Targeting full year 2021 adjusted EBITDA of c. €195 million, >50% up yoy; Updated (prior: €165-190m) to reflect record YTD earnings and c. 4 months of US operations
Befesa successfully closed the acquisition of American Zinc Recycling Corp. (AZR) and consolidated financials since 17 August 2021.
AZR was renamed to Befesa Zinc US and Mr. Rodrigo Daud was appointed CEO/President.
Q3 2021 adjusted EBITDA and adjusted EBIT have been adjusted for the non-recurring acquisition costs of €8.1 million.
Total revenue increased by 28.6% yoy to €574.2 million in 9M 2021 (9M 2020: €446.4 million) and by 30.9% to €190.0 million in Q3 (Q3 2020: €145.2 million). The development was primarily driven by the stronger zinc and aluminium alloy market prices, the favourable lower zinc treatment charge (TC) reference, the higher volumes in Steel Dust and Secondary Aluminium, and the contribution from the acquired US operations. These positive effects were partially offset by the lower Stainless operations as well as the lower volumes treated of salt slags and SPL. Also, the unfavourable zinc hedging prices partially offset the positive effect from the zinc LME price increase yoy.
Total adjusted EBITDA in 9M 2021 increased by 61.8% yoy to €136.8 million (9M 2020: €84.5 million) and by 45.7% to €42.7 million in Q3 (Q3 2020: €29.3 million).
The €52.3 million adjusted EBITDA improvement yoy in 9M was mainly driven by strong base metal prices and good volume performance; the main components being the following:
Higher volumes: EAFD throughput and contribution from the acquired US operations (€5 million); higher aluminium alloys partially offset by lower salt slags and SPL volumes (€1 million)
Higher inflation including energy and China expansion costs partially offset by operational excellence (-€4 million)
Total adjusted EBIT increased by 86.3% yoy to €106.4 million in 9M (9M 2020: €57.1 million) and by 47.1% yoy to €30.9 million in Q3 (Q3 2020: €21.0 million), following the same drivers explained referring to the EBITDA development.
Earnings margins in 9M and Q3 further recovered yoy and are at or above pre-pandemic levels: adjusted EBITDA margin improved to 23.8% in 9M (9M 2020: 18.9%) and to 22.5% in Q3 (Q3 2020: 20.2%); adjusted EBIT margin increased to 18.5% in 9M (9M 2020: 12.8%) and to 16.3% in Q3 (Q3 2020: 14.5%).
Total net financial result in 9M 2021 came in at -€7.9 million (9M 2020: -€0.1 million). 9M 2020 was primarily driven by the c. €15 million one-time positive impact from the Term Loan B (TLB) repricing in February 2020. 9M 2021 was mainly driven by the c. €10 million positive impact from the contingent foreign exchange hedging in relation with the \$460 million AZR acquisition in August 2021.
Total net profit attributable to the shareholders in 9M 2021 increased by 95.8% yoy to €61.5 million (9M 2020: €31.4 million). This improvement was primarily due to the positive drivers impacting EBITDA and EBIT.
Correspondingly, earnings per share (EPS) in 9M also improved yoy to €1.69 (9M 2020: €0.92) despite the fact that the number of shares increased by 17.4% to 39,999,998.
Net debt increased to €482.1 million at Q3 closing (Q2 2021: €371.4 million; year-end 2020: €393.6 million) mainly due to the €100 million add-on raised to partly fund the AZR acquisition.
The last-twelve-months (LTM) EBITDA amounted to €207.2 million at Q3, which incorporates full-twelve-rolling months of the US operations and is adjusted for the €8.1m non-recurring AZR acquisition-related costs.
Q3 closed at x2.33 net leverage, improved from x3.31 at Q3 2020 and x3.10 at year-end 2020.
| 30 September 2021 |
31 December 2020 |
|
|---|---|---|
| Non-current financial indebtedness | 663.4 | 531.5 |
| + Current financial indebtedness | 19.4 | 16.8 |
| Financial indebtedness | 682.8 | 548.2 |
| – Cash and cash equivalents | (200.7) | (154.6) |
| – Other current financial assets1 | (0.1) | (0.1) |
| Net debt | 482.1 | 393.6 |
| LTM adjusted EBITDA2 | 207.2 | 127.0 |
| Net leverage ratio | x 2.33 | x 3.10 |
1 Other current financial assets adjusted by hedging valuation
2 LTM EBITDA of €207.2 million is adjusted for €8.1 million non-recurring
AZR acquisition-related costs and includes c. €30 million LTM EBITDA from AZR
Operating cash flow in 9M 2021 amounted to €73.9 million, doubling yoy (9M 2020: €37.8 million). This improvement was mainly driven by the earnings increase explained. Working capital was up by €27 million yoy, including c. €10m working capital impact from the acquired US operations; remaining is mainly explained by higher receivables driven by higher revenue yoy. Interests paid in 9M 2021 reduced by 3.9% yoy to €15.0 million (9M 2020: €15.6 million) mainly as a result of the repricing of the capital structure in February 2020.
In 9M 2021, Befesa invested €57.2 million (9M 2020: €39.5 million) to fund growth investments – mainly related to the first two plants in China partly funded through local loans as well as to fund regular maintenance capex.
Following the €46.8 million dividend distribution, the funding of the China expansion and the AZR acquisition, total cash flow generated in 9M 2021 amounted to €26.8 million. Together with the €19.3 million cash and cash equivalents incorporated from AZR, Befesa's cash on hand improved to €200.7 million from €154.6 million at year-end 2020. The €200.7 million cash balance together with the €75.0 million RCF, entirely undrawn, provides Befesa with more than €275 million liquidity.
Volumes of EAFD recycled in 9M 2021 increased 12.2% yoy to 563,274 tonnes (9M 2020: 501,914 tonnes). In Q3 2021, 222,606 tonnes of EAFD were recycled, up 38.5% yoy (Q3 2020: 160,676 tonnes). The positive volume developments were driven mainly by the contribution from the acquired US recycling plants but also by the better performance of existing operations yoy. With these volumes, Befesa's EAFD recycling plants ran at average load factors of around 80% of the installed annual recycling capacity of c. 1,555,300 tonnes, including c. 620,000 tonnes from the acquired US recycling plants.
The volume of Waelz oxide (WOX) sold increased by 5.6% yoy to 192,569 tonnes in 9M (9M 2020: 182,410 tonnes) and by 30.9% yoy to 73,235 tonnes in Q3 (Q3 2020: 55,948 tonnes). The yoy increase of WOX sold was lower relative to the EAFD throughput increase mainly explained by building inventory to manage the scheduled plant overhauls including the US operations.
Revenue in the Steel Dust business increased by 18.2% yoy to €304.1 million in 9M 2021 (9M 2020: €257.3 million) and by 33.0% yoy to €108.8 million in Q3 2021 (Q3 2020: €81.8 million).
Adjusted EBITDA increased by 48.6% yoy to €102.7 million in 9M 2021 (9M 2020: €69.1 million) and by 37.4% yoy to €33.5 million in Q3 2021 (Q3 2020: €24.4 million). These yoy increases are primarily driven by the higher market prices and favourable zinc TC. So far in 2021, zinc LME prices were stronger yoy and averaged at €2,414 per tonne in 9M and at €2,538 per tonne in Q3, yoy up 26.8% and 27.1%, respectively. Zinc TC was referenced at \$159 per tonne for the full year 2021 (2020: \$300 per tonne). Combined, the net price effect (zinc LME and TC) was up 51% yoy in 9M and up 48% yoy in Q3. Zinc hedging average prices in both 9M and Q3 were lower yoy as well as compared to spot average prices in the respective periods. Combined, the zinc effective average prices (blended rate between hedged volume and non-hedged volume) amounted to €2,241 per tonne in 9M 2021, up 7.3% yoy (9M 2020: €2,089 per tonne), and to €2,220 per tonne in Q3 2021, stable yoy (Q3 2020: €2,214 per tonne). In addition, the yoy EBITDA increases were also driven by higher EAFD throughput and the positive contribution from the acquired US operations, partially offset by lower Stainless operations.
Adjusted EBIT came in at €85.5 million in 9M 2021, up 56.3% yoy (9M 2020: €54.7 million), and at €26.0 million in Q3 2021, up 28.6% yoy (Q3 2020: €20.2 million), following the same drivers explained referring to the EBITDA development.
Consequently, earnings margins in 2021 recovered yoy to pre-pandemic levels: adjusted EBITDA margin increased to 33.8% in 9M (9M 2020: 26.9%) and to 30.8% in Q3 (Q3 2020: 29.8%); adjusted EBIT margin improved to 28.1% in 9M (9M 2020: 21.3%) and to 23.9% in Q3 (Q3 2020: 24.7%).
Salt slags and SPL recycled volumes in 9M 2021 decreased by 9.0% yoy to 302,988 tonnes (9M 2020: 333,008 tonnes), due to the plant in the UK, which was permanently closed at year-end 2020. Volumes recycled in Q3 amounted to 107,224 tonnes, up 4.5% yoy (Q3 2020: 102,570 tonnes).
On average, salt slags recycling plants continued to operate at solid pre-pandemic levels with utilisation rates at 90% and 95% in 9M and Q3, respectively, of the latest installed annual recycling capacity of 450,000 tonnes.
Revenue in the Salt Slags subsegment came in at €57.3 million in 9M 2021, up 5.6% yoy (9M 2020: €54.3 million). In Q3 2021, revenue improved by 22.1% yoy to €20.0 million (Q3 2020: €16.4 million).
EBITDA increased by 38.6% yoy to €15.9 million in 9M (9M 2020: €11.5 million) and by 79.9% yoy to €4.8 million in Q3 (Q3 2020: €2.6 million). The yoy earnings increase was primarily driven by the higher aluminium alloy FMB prices, which averaged €1,978 per tonne in 9M, up 47.4% yoy (9M 2020: €1,342 per tonne), and €2,008 per tonne in Q3, up 53.1% yoy (Q3 2020: €1,312 per tonne). This positive development was partially offset by the volume decrease.
EBIT increased by 89.2% yoy to €9.0 million in 9M 2021 (9M 2020: €4.8 million) and by more than four times yoy to €2.5 million in Q3 2021 (Q3 2020: €0.6 million), following the same drivers explained referring to the EBITDA development.
Therefore, earnings margins in the Salt Slags subsegment also recovered yoy to pre-pandemic levels: EBITDA margin improved to 27.7% in 9M (9M 2020: 21.1%) and to 23.8% in Q3 (Q3 2020: 16.1%); EBIT margin increased to 15.7% in 9M (9M 2020: 8.8%) and to 12.8% in Q3 (Q3 2020: 3.4%).
Aluminium alloy production volumes in 9M 2021 increased by 15.1% yoy to 142,353 tonnes (9M 2020: 123,699 tonnes), which represents an all-time-high. In Q3 2021, volumes decreased by 3.5% yoy to 42,900 tonnes (Q3 2020: 44,444 tonnes). On average, secondary aluminium production plants operated at 93% and 83% utilisation rates in 9M and Q3, respectively, demonstrating a recovery to pre-pandemic levels.
Revenue in the Secondary Aluminium subsegment amounted to €244.3 million in 9M 2021, up 53.4% yoy (9M
2020: €159.2 million). In Q3 2021, revenue increased 33.3% yoy to €72.0 million (Q3 2020: €54.0 million). The positive revenue development follows the volume increase and the favourable aluminium alloy FMB prices.
EBITDA more than doubled yoy to €18.2 million in 9M (9M 2020: €6.5 million) and increased by 44.6% yoy to €4.5 million in Q3 (Q3 2020: €3.1 million). This positive development is primarily due to the improvement in volumes, the strong market prices and aluminium metal margins.
EBIT improved yoy and reversed from the low levels in 2020, to €12.2 million in 9M 2021 (9M 2020: €0.5 million) and to €2.6 million in Q3 (Q3 2020: €1.2 million), following the same drivers that impacted the EBITDA development.
Hedging strategy Befesa's hedging strategy is unchanged and continues to be a key element of Befesa's business model to manage the zinc price volatility and therefore improve the stability and visibility of earnings and cash flow across the economic cycle. Further details are available in Befesa's Annual Report 2020 (page 33).
In Q3 2021, Befesa continued its hedging rigor and extended its zinc hedge book up to and including October 2024 for the non-US operations.
The acquired Zinc US operations came with a hedge book in place up to and including Q1 2023, at hedging prices of around \$2,500 per tonne for the remaining of 2021 and around \$2,750 per tonne for the full year 2022 and Q1 2023. Following the closing of the acquisition and under Befesa's more competitive hedging programme, Befesa extended the hedges for the US operations up to and including April 2024, locking in 15,000 tonnes of zinc equivalent output per quarter at \$2,925 per tonne for Q2 2023, \$2,950 per tonne for Q3 and Q4 2023, and \$2,975 per tonne for Q1 2024. Befesa continues to work on extending the hedge book for the US operations to be synchronised with that of the non-US operations, under Befesa's hedging strategy.
The combined global hedge book in place as of the date of this Q3 Statement Report provides Befesa with improved pricing visibility for the following three years, through 2021 (at c. €2,150 per tonne), 2022 (at c. €2,250 per tonne), 2023 (at c. €2,350 per tonne) and the first three quarters of 2024 (at c. €2,350 per tonne).
The average hedged prices and volumes for each of the periods are:
| Period | Average hedged price (€ per tonne) |
Zinc content in WOX hedged |
|---|---|---|
| 2020 | €2,239 | 92,400 |
| 2021 | c. €2,150 | 129,211 |
| 2022 | c. €2,250 | 146,620 |
| 2023 | c. €2,350 | 150,955 |
| Up to Oct 2024 | c. €2,350 | 84,300 |
During Q3 2021, the expansion of the Steel Dust Recycling Services operations into China continued progressing on schedule and budget in both provinces – Jiangsu and Henan.
The two plants in Jiangsu and Henan are designed to each recycle 110,000 tonnes of EAFD per year and will represent Befesa's eleventh and twelfth EAFD recycling sites globally, along with the existing sites in Europe, Turkey, South Korea and the US.
On 17 August 2021, Befesa closed the acquisition of 100% of American Zinc Recycling (AZR)'s recycling assets for a purchase price of \$450 million and a 6.9% minority stake in AZR's zinc refining subsidiary for \$10 million.
Befesa's US operations are delivering as expected and positively contributed during c. 6 weeks of Q3 following the closing of the acquisition. The positive impact demonstrates the benefits of the acquisition of one of the US market leaders in EAFD recycling services and the success of Befesa's strategy of accelerating the expansion of its global footprint.
Befesa renamed its acquired US operations to Befesa Zinc US and appointed Mr. Rodrigo Daud as CEO and President. Befesa is driving progress on the integration and the related synergies of its US operations.
Befesa Zinc US is a US market leader in providing EAFD recycling services with a processing capacity of c. 620,000 tonnes of EAFD per year offered through four recycling plants located in South Carolina, Tennessee, Illinois and Pennsylvania, near the major US electric arc furnace (EAF) steel mini-mills.
The EAF is a prevailing steelmaking method in the US, representing more than 70% of the total steel produced. As such, the US has one of the largest and growing markets of EAF steelmakers globally driven by the decarbonisation trend.
This transaction represents a great step forward in executing Befesa's strategy and in accelerating its growth globally. Through the acquisition of AZR's recycling assets, Befesa becomes a global leader in EAFD recycling with a globally well-balanced footprint across Europe, Asia and the US with 12 facilities offering c. 1.7 million tonnes of EAFD processing capacity per year.
Targeting full year 2021 adjusted EBITDA of c. €195 million, above 50% yoy growth (2020: €127.0 million).
Outlook 2021 was updated (previous: €165-190 million) to reflect record YTD earnings and about four months of the acquired US operations, adjusted for the non-recurring acquisition-related costs.
as of 30 September 2021 (thousand of euros)
Assets
| (€ thousand) | 30 September 2021 | 31 December 2020 |
|---|---|---|
| Non-current assets: | ||
| Intangible assets | ||
| Goodwill | 612,138 | 335,564 |
| Other intangible assets | 86,291 | 87,458 |
| 698,429 | 423,022 | |
| Right-of-use assets | 28,131 | 20,401 |
| Property, plant and equipment, net | 460,086 | 295,308 |
| Non-current financial assets | ||
| Investments in Group companies and associates | 8,731 | 118 |
| Other non-current financial assets | 6,042 | 2,546 |
| 14,773 | 2,664 | |
| Deferred tax assets | 99,570 | 81,369 |
| Total non-current assets | 1,300,989 | 822,764 |
| Current assets: | ||
| Inventories | 58,122 | 39,350 |
| Trade and other receivables | 91,810 | 54,222 |
| Trade receivables from related companies | 1,059 | 1,003 |
| Accounts receivables from public authorities | 11,652 | 9,621 |
| Other receivables | 17,815 | 18,817 |
| Other current financial assets | 1,062 | 64 |
| Cash and cash equivalents | 200,667 | 154,558 |
| Total current assets | 382,187 | 277,635 |
| Total assets | 1,683,176 | 1,100,399 |
| Equity: Parent Company Share capital 111,048 94,576 Share premium 532,867 263,875 Hedging reserves (62,567) (9,509) Other reserves (17,803) (54,306) Translation differences (12,693) (15,077) Net profit/(loss) for the period 61,518 47,608 Interim dividend - (9,880) Equity attributable to the owners of the Company 612,370 317,287 Non-controlling interests 12,312 10,294 Total equity 624,682 327,581 Non-current liabilities: Long-term provisions 17,586 9,968 Loans and borrowings 648,344 520,602 Lease liabilities 15,024 10,860 Other non-current financial liabilities 28,370 4,614 Other non-current liabilities 5,039 4,905 Deferred tax liabilities 67,960 68,293 Total non-current liabilities 782,323 619,242 Current liabilities: Loans and borrowings 12,941 13,629 Lease liabilities 6,505 3,124 Other current financial liabilities 56,493 8,842 Trade payables to related companies 1,320 613 Trade and other payables 128,334 98,091 Other payables Accounts payable to public administrations 32,780 11,432 Other current liabilities 37,798 17,845 70,578 29,277 Total current liabilities 276,171 153,576 Total equity and liabilities 1,683,176 1,100,399 |
(€ thousand) | 30 September 2021 | 31 December 2020 |
|---|---|---|---|
| (€ thousand) | 9M 2021 | 9M 2020 | Change | Q3 2021 | Q3 2020 | Change |
|---|---|---|---|---|---|---|
| Revenue | 574,212 | 446,371 | 28.6 % | 189,976 | 145,176 | 30.9 % |
| Changes in inventories of finished goods and work-in-progress |
2,056 | (11,155) | - | 7,704 | (921) | - |
| Procurements | (257,744) | (179,806) | 43.3 % | (85,836) | (58,607) | 46.5 % |
| Other operating income | 4,490 | 3,287 | 36.6 % | 1,601 | 1,013 | 58.0 % |
| Personnel expenses | (71,722) | (61,526) | 16.6 % | (29,642) | (20,429) | 45.1 % |
| Other operating expenses | (122,592) | (112,628) | 8.8 % | (49,232) | (36,944) | 33.3 % |
| Amortisation/depreciation, impairment and provisions |
(30,393) | (42,910) | (29.2) % | (11,751) | (8,197) | 43.4 % |
| Operating profit (EBIT) | 98,307 | 41,633 | > 100 % | 22,820 | 21,091 | 8.2 % |
| Finance income | 71 | 15,623 | (99.5) % | 26 | 35 | (25.7) % |
| Finance expenses | (18,346) | (14,484) | 26.7 % | (8,325) | (5,468) | 52.2 % |
| Net exchange differences | 10,362 | (1,199) | - | 10,573 | (812) | - |
| Net finance income/(loss) | (7,913) | (60) | > 100 % | 2,274 | (6,245) | - |
| Profit/(loss) before tax | 90,394 | 41,573 | > 100 % | 25,094 | 14,846 | 69.0 % |
| Corporate income tax | (25,833) | (12,044) | > 100 % | (8,065) | (4,602) | 75.2 % |
| Profit/(loss) for the period | 64,561 | 29,529 | > 100 % | 17,029 | 10,244 | 66.2 % |
| Attributable to: | ||||||
| Parent Company's owners | 61,518 | 31,420 | 95.8 % | 15,924 | 10,846 | 46.8 % |
| Non-controlling interests | 3,043 | (1,891) | - | 1,105 | (602) | - |
| Earnings/(losses) per share attributable to owners of the Parent Company1 (expressed in euros per share) |
1.69 | 0.92 | 83.4 % | 0.40 | 0.32 | 25.0 % |
1 EPS in 9M/Q3 2020 is based on 34,066,705 shares; 9M 2021 is based on 36,370,474 weighted average shares
after the capital increase of 5,933,293 new shares; Q3 2021 is based on 39,999,998 outstanding shares after the capital increase
| (€ thousand) | 9M 2021 | 9M 2020 | Q3 2021 | Q3 2020 |
|---|---|---|---|---|
| Cash flows from operating activities: | ||||
| Profit/(loss) for the period before tax | 90,394 | 41,573 | 25,094 | 14,846 |
| Adjustments due to: | 37,936 | 40,644 | 8,773 | 15,104 |
| Depreciation and amortisation | 30,393 | 42,910 | 11,751 | 8,197 |
| Changes in provisions | 189 | (1,539) | (521) | 928 |
| Interest income | (71) | (15,623) | (26) | (35) |
| Finance costs | 18,346 | 14,484 | 8,325 | 5,468 |
| Other profit/(loss) | (559) | (787) | (183) | (266) |
| Exchange differences | (10,362) | 1,199 | (10,573) | 812 |
| Changes in working capital: | (26,835) | (14,013) | (19,508) | 6,517 |
| Trade receivables and other current assets | (33,932) | (16,606) | (11,264) | (1,790) |
| Inventories | (9,890) | 15,251 | (10,368) | 2,419 |
| Trade payables | 16,987 | (12,658) | 2,124 | 5,888 |
| Other cash flows from/(used in) operating activities: | (27,554) | (30,419) | (10,656) | (9,882) |
| Interest paid | (14,965) | (15,578) | (7,327) | (5,299) |
| Taxes paid | (12,589) | (14,841) | (3,329) | (4,583) |
| Net cash flows from/(used in) operating activities (I) | 73,941 | 37,785 | 3,703 | 26,585 |
| Cash flows from/(used in) investing activities: | ||||
| Investments in intangible assets | (154) | (446) | (4) | (321) |
| Investments in property, plant and equipment | (57,022) | (39,076) | (14,045) | (8,276) |
| Collections from financial assets | 1,880 | - | 1,880 | - |
| Acquisition/(Disposal) of new subsidiaries | (393,006) | - | (393,006) | - |
| Collections from sale of property, plant and equipment | - | 100 | - | 83 |
| Investments/(Divestments) in other current financial assets | (46) | 37 | (3) | 87 |
| Net cash flows from/(used in) investing activities (II) | (448,348) | (39,385) | (405,178) | (8,427) |
| Cash flows from/(used in) financing activities: | ||||
| Equity issuance | 330,603 | - | - | - |
| Cash inflows from bank borrowings and other liabilities | 122,071 | 2,985 | 104,037 | (643) |
| Cash outflows from bank borrowings and other liabilities | (4,341) | (3,344) | (1,278) | (1,085) |
| Transactions involving non-controlling interests | - | - | - | - |
| Dividends paid to shareholders | (46,800) | (15,000) | (46,800) | (15,000) |
| Net cash flows from/(used in) financing activities (III) | 401,533 | (15,359) | 55,959 | (16,728) |
| Effect of foreign exchange rate changes on cash and cash equivalents (IV) | (329) | (737) | (361) | (291) |
| Net increase/(decrease) in cash and cash equivalents (I+II+III+IV) | 26,797 | (17,696) | (345,877) | 1,139 |
| Cash and cash equivalents at the beginning of the period | 154,558 | 125,460 | 527,232 | 106,625 |
| Cash and cash equivalents - incorporation to the perimeter of Befesa Holding US Inc. | 19,312 | - | 19,312 | - |
| Cash and cash equivalents at the end of the period | 200,667 | 107,764 | 200,667 | 107,764 |
| 9M 2021 | 9M 2020 | Change | Q3 2021 | Q3 2020 | Change | |
|---|---|---|---|---|---|---|
| Key operational data (tonnes, unless specified otherwise) | ||||||
| EAFD throughput1 | 563,274 | 501,914 | 12.2 % | 222,606 | 160,676 | 38.5 % |
| WOX sold | 192,569 | 182,410 | 5.6 % | 73,235 | 55,948 | 30.9 % |
| Zinc blended price (€ / tonne) | 2,241 | 2,089 | 7.3 % | 2,220 | 2,214 | 0.3 % |
| Total installed capacity2 | 1,555,300 | 825,300 | 88.5 % | 1,555,300 | 825,300 | 88.5 % |
| Utilisation (%)2 | 81.0 % | 81.2 % | (26) bps | 77.7 % | 77.5 % | 28 bps |
| Key financial data (€ million, unless specified otherwise) | ||||||
| Revenue | 304.1 | 257.3 | 18.2 % | 108.8 | 81.8 | 33.0 % |
| EBITDA | 99.2 | 69.1 | 43.4 % | 29.9 | 24.4 | 22.7 % |
| EBITDA margin | 32.6 % | 26.9 % | 574 bps | 27.5 % | 29.8 % | (231) bps |
| Adjusted EBITDA3 | 102.7 | 69.1 | 48.6 % | 33.5 | 24.4 | 37.4 % |
| Adjusted EBITDA margin3 | 33.8 % | 26.9 % | 692 bps | 30.8 % | 29.8 % | 98 bps |
| EBIT | 82.0 | 54.7 | 49.8 % | 22.4 | 20.2 | 10.8 % |
| EBIT margin | 27.0 % | 21.3 % | 568 bps | 20.6 % | 24.7 % | (412) bps |
| Adjusted EBIT3 | 85.5 | 54.7 | 56.3 % | 26.0 | 20.2 | 28.6 % |
| Adjusted EBIT margin3 | 28.1 % | 21.3 % | 686 bps | 23.9 % | 24.7 % | (82) bps |
Salt Slags subsegment
| 9M 2021 | 9M 2020 | Change | Q3 2021 | Q3 2020 | Change | |
|---|---|---|---|---|---|---|
| Key operational data (tonnes, unless specified otherwise) | ||||||
| Salt slags and SPL recycled | 302,988 | 333,008 | (9.0) % | 107,224 | 102,570 | 4.5 % |
| Total installed capacity | 450,000 | 530,000 | (15.1) % | 450,000 | 530,000 | (15.1) % |
| Utilisation (%)4 | 90.0 % | 83.9% | 609 bps | 94.5 % | 77.0% | 1,754 bps |
| Key financial data (€ million, unless specified otherwise) | ||||||
| Revenue | 57.3 | 54.3 | 5.6 % | 20.0 | 16.4 | 22.1 % |
| EBITDA | 15.9 | 11.5 | 38.6 % | 4.8 | 2.6 | 79.9 % |
| EBITDA margin | 27.7 % | 21.1 % | 660 bps | 23.8 % | 16.1 % | 763 bps |
| EBIT | 9.0 | (10.7) | - | 2.5 | 0.6 | > 100 % |
| EBIT margin | 15.7 % | (19.7) % | 3,547 bps | 12.8 % | 3.9 % | 882 bps |
| Adjusted EBIT5 | 9.0 | 4.8 | 89.2 % | 2.5 | 0.6 | > 100 % |
| Adjusted EBIT margin5 | 15.7 % | 8.8 % | 695 bps | 12.8 % | 3.4 % | 930 bps |
| 9M 2021 | 9M 2020 | Change | Q3 2021 | Q3 2020 | Change | |
|---|---|---|---|---|---|---|
| Key operational data (tonnes, unless specified otherwise) | ||||||
| Secondary aluminium alloys produced | 142,353 | 123,699 | 15.1 % | 42,900 | 44,444 | (3.5) % |
| Aluminium alloy FMB price (€ / tonne)6 | 1,978 | 1,342 | 47.4 % | 2,008 | 1,312 | 53.1 % |
| Total installed capacity7 | 205,000 | 205,000 | - | 205,000 | 205,000 | - |
| Utilisation (%)7 | 92.8 % | 80.6 % | 1,224 bps | 83.0 % | 86.2 % | (322) bps |
| Key financial data (€ million, unless specified otherwise) | ||||||
| Revenue | 244.3 | 159.2 | 53.4 % | 72.0 | 54.0 | 33.3 % |
| EBITDA | 18.2 | 6.5 | > 100 % | 4.5 | 3.1 | 44.6 % |
| EBITDA margin | 7.4 % | 4.1 % | 336 bps | 6.2 % | 5.7 % | 49 bps |
| EBIT | 12.2 | 0.5 | > 100 % | 2.6 | 1.2 | > 100 % |
| EBIT margin | 5.0 % | 0.3 % | 469 bps | 3.6 % | 2.2 % | 137 bps |
1 EAFD throughput does not include stainless steel dust treated volumes
2 Total installed capacity in Steel Dust does not include 174,000 tonnes per year of stainless-steel dust recycling operations;
The increase in annual installed capacity to 1,555,300 tonnes reflects the c. 620,000 tonnes added by the acquired US recycling plants
Utilisation represents EAFD processed against annual installed recycling capacity
3 9M/Q3 2021 EBITDA and EBIT adjusted for the non-recurring AZR acquisition-related costs
Total annual installed capacity figures do not include the 100,000 tonnes idled capacity at Töging, Germany 5 9M 2020 EBIT adjusted for the extraordinary impairment of the UK salt slags plant
6 Aluminium Scrap and Foundry Ingots Aluminium pressure diecasting ingot DIN226/A380 European Metal Bulletin Free Market Duty paid delivered works
7 Utilisation represents the volume of secondary aluminium alloys produced against annual installed production capacity
Wednesday, 30 March 2022 Annual Report 2021 Thursday, 16 June 2022 Annual General Meeting
Thursday, 24 February 2022 Preliminary Year-End Results 2021 & Conference Call Tuesday, 26 April 2022 Q1 2022 Statement & Conference Call Thursday, 28 July 2022 H1 2022 Interim Report & Conference Call Thursday, 27 October 2022 Q3 2022 Statement & Conference Call
Notes: Befesa's financial reports and statements are published at 7:30 am CEST Befesa cannot rule out changes of dates and recommends checking them at the Investor Relations / Investor's Agenda section of Befesa's website www.befesa.com
Director of Investor Relations & Strategy Phone: +49 (0) 2102 1001 0 email: [email protected]
All Befesa publications are available in the Investor Relations / Reports and Presentations section of Befesa's website www.befesa.com
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Disclaimer This report 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 statements reflect the current views of Befesa and its affiliates or of such third parties with respect to future events and are subject to risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievements of Befesa and its affiliates to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others: changes in general economic, political, governmental and business conditions globally and in the countries in which Befesa and its affiliates do business; changes in interest rates; changes in inflation rates; changes in prices; changes to national and international laws and policies that support industrial waste recycling; legal challenges to regulations, subsidies and incentives that support industrial waste recycling; extensive governmental regulation in a number of different jurisdictions, including stringent environmental regulation; management of exposure to credit, interest rate, exchange rate and commodity price risks; acquisitions or investments in joint ventures with third parties; inability to obtain new sites and expand existing ones; failure to maintain safe work environments; effects of catastrophes, natural disasters, adverse weather conditions, unexpected geological or other physical conditions, or criminal or terrorist acts at one or more of Befesa's plants; insufficient insurance coverage and increases in insurance cost; loss of senior management and key personnel; unauthorised use of Befesa's intellectual property and claims of infringement by Befesa of others' intellectual property; Befesa's ability to generate cash to service indebtedness changes in business strategy and various other factors.
Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or targeted. Befesa and its affiliates do not assume any guarantee that the assumptions underlying forward-looking statements are free of errors nor do they accept any responsibility for the future accuracy of the opinions expressed herein or the actual occurrence of the forecasted developments. No representation (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein or otherwise resulting, directly or indirectly, from the use of this document.
This report is intended for information only and should not be treated as investment advice. It is not intended as an offer for sale, or as a solicitation of an offer to purchase or subscribe to, any securities in any jurisdiction. Neither this report nor anything contained therein shall form the basis of, or be relied upon in connection with, any commitment or contract whatsoever. This report may not, at any time, be reproduced, distributed or published (in whole or in part) without prior written consent of Befesa.
First nine-month period and third quarter 2021 figures contained in this report have not been audited or reviewed by external auditors.
This report includes Alternative Performance Measures (APM), including EBITDA, EBITDA margin, EBIT, EBIT margin, Adjusted EBIT, Adjusted EBIT margin, net debt and capital expenditures which are not measures of liquidity or financial performance under International Financial Reporting Standards (IFRS). EBITDA is defined as operating profit for the period (i.e. EBIT) before the impact of amortisation, depreciation, impairment and provisions. EBITDA margin is defined as EBITDA divided by revenue. EBIT is defined as Operating profit for the year. The Company uses EBIT to monitor its financial return after both operating expenses and a charge representing the cost of usage of both its property, plant and equipment and definite‑life intangible assets. EBIT margin is defined as EBIT as a percentage of revenue. These non-IFRS measures should not be considered in isolation or as an alternative to results from operating activities, cash flow from operating, investing or financing activities, or other financial measures of Befesa's results of operations or liquidity derived in accordance with IFRS. Befesa believes that the APM included in this report are useful measures of its performance and liquidity. Other companies, including those in the industry in which Befesa operates, may calculate similarly titled financial measures differently than Befesa does. Because all companies do not calculate these financial measures in the same manner, Befesa's presentation of such financial measures may not be comparable to other similarly titled measures of other companies. These APM are not audited.
Befesa S.A. 46, Boulevard Grande-Duchesse Charlotte L-1330 Luxembourg Grand Duchy of Luxembourg www.befesa.com
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