Earnings Release • Apr 28, 2021
Earnings Release
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Q1 2021 Statement
| Q1 2021 | Q1 2020 | Change | |
|---|---|---|---|
| Key operational data (tonnes, unless specified otherwise) | |||
| Electric arc furnace (EAF) steel dust throughput | 181,095 | 185,656 | (2.5) % |
| Waelz oxide (WOX) sold | 66,727 | 67,777 | (1.5) % |
| Salt slags and Spent Pot Linings (SPL) recycled | 104,430 | 124,697 | (16.3) % |
| Secondary aluminium alloys produced | 51,283 | 47,919 | 7.0 % |
| Zinc LME average price (€ / tonne) | 2,279 | 1,930 | 18.1 % |
| Zinc blended price (€ / tonne) | 2,237 | 2,114 | 5.8 % |
| Aluminium alloy FMB average price (€ / tonne) | 1,982 | 1,433 | 38.3 % |
| Key financial data (€ million, unless specified otherwise) | |||
| Revenue | 192.6 | 179.0 | 7.6 % |
| EBITDA | 48.8 | 33.6 | 45.6 % |
| EBITDA margin | 25.4 % | 18.7 % | 661 bps |
| EBIT | 39.4 | 24.1 | 63.6 % |
| EBIT margin | 20.5 % | 13.5 % | 700 bps |
| Financial result | (4.7) | (4.3) | 10.3 % |
| Profit before taxes and minority interests | 34.7 | 19.8 | 75.0 % |
| Net profit attributable to shareholders of Befesa S.A. | 24.8 | 14.7 | 68.7 % |
| EPS (in €) based on 34,066,705 shares | 0.73 | 0.43 | 68.7 % |
| Total assets1 | 1,159.7 | 1,100.4 | 5.4 % |
| Capital expenditures | 27.7 | 11.7 | > 100 % |
| Cash flow from operating activities | 26.5 | 8.4 | > 100 % |
| Cash and cash equivalents at the end of the period | 164.0 | 119.9 | 36.7 % |
| Net debt | 394.7 | 422.6 | (6.6) % |
| Leverage | x 2.77 | x 2.82 | -x 0.04 |
| Number of employees (as of end of the period) | 1,159 | 1,153 | 0.5 % |
1 2020 figure as of 31 December
up 46% yoy (Q1 2020: €33.6 million) and up 15% over Q4 2020 at €42.4 million;
Positive effects were partially offset by:
Total revenue increased by 7.6% yoy to €192.6 million in Q1 2021 (Q1 2020: €179.0 million). The development was primarily driven by the higher zinc and aluminium alloy market price environment, the favourable lower zinc TC reference, and higher volumes in Secondary Aluminium. These positive effects were partially offset by the lower volumes treated of salt slags/SPL, mainly driven by the UK plant, which is permanently closed since year-end 2020. Also, the unfavourable zinc hedging prices partially offset the positive effect from the zinc LME price increase yoy.
Total EBITDA in Q1 2021 increased by 45.6% yoy to €48.8 million (Q1 2020: €33.6 million). The main drivers of the €15 million Q1 EBITDA increase yoy were:
Total EBIT in Q1 increased by 63.6% yoy to €39.4 million (Q1 2020: €24.1 million), following the same drivers that impact the EBITDA development.
Hence, earnings margins in Q1 2021 recovered to pre-COVID-19 levels: EBITDA margin improved to 25.4% (Q1 2020: 18.7%); EBIT margin increased to 20.5% (Q1 2020: 13.5%).
Total net financial result in Q1 came in at -€4.7 million (Q1 2020: €-4.3 million). The development was primarily driven by the accounting for financial instruments per IFRS-9.
Total net profit attributable to the shareholders increased by 68.7% yoy to €24.8 million (Q1 2020: €14.7 million), primarily due to the positive drivers impacting EBITDA and EBIT. Earnings per share (EPS) in Q1 improved by 68.7% to €0.73 (Q1 2020: €0.43).
Net debt continued approximately stable with €394.7 million at Q1 closing (year-end 2020: €393.6 million). Net leverage decreased to x2.8 (year-end 2020: x3.1) due to the underlying improved last-twelve-months (LTM) EBITDA. On a last-six-months view, net leverage stands lower at x2.2. Befesa continues to be compliant with all debt covenants.
Net debt (€ million)
| 31 March | 31 December | |
|---|---|---|
| 2021 | 2020 | |
| Non-current financial indebtedness | 544.8 | 531.5 |
| + Current financial indebtedness | 13.9 | 16.8 |
| Financial indebtedness | 558.7 | 548.2 |
| – Cash and cash equivalents | (164.0) | (154.6) |
| – Other current financial assets1 | (0.1) | (0.1) |
| Net debt | 394.7 | 393.6 |
| EBITDA LTM | 142.2 | 127.0 |
| Leverage ratio | x 2.77 | x 3.10 |
1 Other current financial assets adjusted by hedging valuation
Operating cash flow in Q1 2021 amounted to €26.5 million, up €18.1 million yoy (Q1 2020: €8.4 million). This development was mainly driven by the earnings increase, partially offset by €13 million seasonal effect in working capital. The latter is primarily driven by increased receivables, including adjusting for the lower favourable zinc TC reference at \$159 per tonne in April for the full 2021 year.
Interests paid in Q1 2021 reduced by 33% yoy to €6.3 million (Q1 2020: €9.5 million) as a result of the repricing of the capital structure in February 2020.
Income tax paid in Q1 2021 reduced by 40% yoy to €3.4 million (Q1 2020: €5.6 million).
On a LTM basis, the operating cash flow amounted to €110.7 million, above pre-COVID levels (2018 at €103.8 million; 2019 at €102.5 million).
In Q1 2021, Befesa invested €28.0 million to fund regular maintenance capex and growth investments (China), of which €11 million were funded through Chinese local loans related to the first two plants in China.
As a result, Befesa generated €9.4 million of cash in Q1 2021, closing the quarter with €164.0 million of cash on hand (€154.6 million at year-end 2020). This, together with the entirely undrawn RCF of €75.0m, provides c. €240 million liquidity.
Volumes of EAF steel dust recycled in Q1 2021 amounted to 181,095 tonnes, a minor 2.5% decrease yoy (Q1 2020: 185,656 tonnes). With these volumes, Befesa's EAF steel dust recycling plants ran in Q1 at an average load factor of 89.0% of the installed annual recycling capacity of 825 thousand tonnes (Q1 2020: 90.2%). The volume of WOX sold in Q1 amounted to 66,727 tonnes, down slightly by 1.5% yoy (Q1 2020: 67,777 tonnes).
Revenue in the Steel Dust business remained stable in Q1 2021 at €100.9 million (Q1 2020: €101.2 million).
EBITDA in Q1 2021 increased by 40.7% yoy to €36.5 million (Q1 2020: €26.0 million) primarily driven by the favourable market price environment and lower zinc TC. Zinc LME prices averaged at €2,279 per tonne in Q1, up 18% yoy (Q1 2020: €1,930 per tonne), and zinc TC was referenced at \$159 per tonne for the full year 2021 (2020: \$300 per tonne). Combined, the net price effect (LME and TC) was 41% yoy in Q1. Zinc hedging average prices in Q1 were slightly lower yoy (Q1 2021: €2,201 per tonne; Q1 2020: €2,244 per tonne) as well as compared to spot average prices in Q1 2021. Combined, the zinc effective average prices (blended rate between hedged volume and non-hedged volume) amounted to €2,237 per tonne in Q1 2021, up €123 per tonne or 6% yoy (Q1 2020: €2,114 per tonne).
Similarly, EBIT came in at €31.6 million in Q1 2021, up 51.5% yoy (Q1 2020: €20.9 million), following the same drivers explained referring to the EBITDA development.
Consequently, earnings margins in Q1 2021 recovered to pre-COVID-19 levels: EBITDA margin increased to 36.2% (Q1 2020: 25.6%); EBIT margin improved to 31.3% (Q1 2020: 20.6%).
Salt slags and SPL recycled volumes in Q1 2021 decreased by 16.3% yoy to 104,430 tonnes (Q1 2020: 124,697 tonnes). This development was primarily due to the plant in the UK, which contributed during 2020 and was permanently shut down in Q4 2020.
On average, plant capacity utilisation levels remained resilient at 94% of the latest installed annual recycling capacity of 450,000 tonnes.
Revenue in the Salt Slags subsegment came in at €19.8 million in Q1 2021, 10.3% lower yoy (Q1 2020: €22.1 million). This development was primarily driven by the volume decrease, partially compensated by the higher aluminium alloy FMB prices, which averaged €1,982 per tonne in Q1 or 38.3% up yoy (Q1 2020: €1,433 per tonne).
EBITDA and EBIT in Q1 2021 remained stable yoy at €5.9 million and €3.6 million, respectively. Both EBITDA and EBIT benefitted from the favourable aluminium alloy market prices in Q1 2021.
Therefore, earnings margins in the Salt Slags subsegment also recovered in Q1 2021 to pre-COVID-19 levels: EBITDA margin increased to 29.7% (Q1 2020: 26.5%); EBIT margin improved to 18.1% (Q1 2020: 16.2%).
Aluminium alloy production volumes in Q1 2021 increased by 7.0% yoy to 51,283 tonnes (Q1 2020: 47,919 tonnes) with plants running approximately at full capacity on average.
Revenue in the Secondary Aluminium subsegment amounted to €82.4 million in Q1 2021, a 26.0% increase yoy (Q1 2020: €65.4 million), following the volume increase and the favourable aluminium alloy FMB prices.
EBITDA in Q1 2021 increased by €3.7 million yoy to €6.4 million (Q1 2020: €2.7 million) primarily due to the improvement in volumes, the positive market price environment and recovered aluminium metal margins. Similarly, EBIT in Q1 2021 improved by €3.6 million yoy to €4.3 million (Q1 2020: €0.7 million), following the same drivers that impact the EBITDA development.
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 Q1 2021, Befesa continued its hedging rigor and extended its zinc hedge book up to and including January 2024. For the year 2023, 43,200 tonnes of zinc equivalent payable output were additionally locked in at €2,300 per tonne. These tonnages add up to the 30,600 tonnes that had been already hedged for the year 2023, resulting in 73,800 tonnes of zinc equivalent hedged or 80% of the annual 92,400 tonnes target.
The hedge book in place as of the date of this Q1 report provides Befesa with improved pricing visibility for the following c. 2.5 years, through 2021 (at c. €2,150 per tonne), 2022 (at c. €2,200 per tonne) and 80% of 2023 (at c. €2,300 per tonne).
The average hedged prices and volumes for each of the periods are:
| Average hedged | Zinc content in WOX | |
|---|---|---|
| Period | price (€ per tonne) | hedged (tonnes) |
| 2020 | €2,239 | 92,400 |
| 2021 | c. €2,150 | 92,400 |
| 2022 | c. €2,200 | 92,400 |
| 2023 | c. €2,300 | 73,8001) |
1) As of 31 December 2020, 30,600 tonnes of zinc equivalent were hedged for 2023 at c. €2,300 per tonne; subsequently, in Q1 2021, additional 43,200 tonnes of zinc equivalent were hedged for 2023 at c. €2,300 per tonne
During Q1 2021, the expansion of the Steel Dust Recycling Services operations into China continued progressing on schedule and budget in both provinces – Jiangsu and Henan.
summer of 2021, with the ramp-up planned during H2 2021.
The two plants in Jiangsu and Henan are designed to each recycle 110,000 tonnes of EAF steel dust per year and will represent Befesa's seventh and eighth EAF steel dust recycling sites globally, along with the existing sites in Europe, Turkey and South Korea.
ESG topics are crucial for Befesa as its business model has been based on sustainability and a circular-economy approach for more than three decades.
Updated information on sustainability at Befesa is presented in the 2020 ESG Progress Update, which was published on 27 April 2021 and is available at the Befesa's website (www.befesa.com).
As of 31 March 2021, four well-known international ESG rating agencies following Befesa have maintained their respective ESG ratings unchanged and as follows:
Looking ahead, Befesa expects to see continued recovery and growth in 2021, supported by the resilience of its business, robust cash management and executing its expansion projects.
Full year 2021 EBITDA is expected to come in between €165 million and €190 million, equal to 30% to 50% yoy growth (2020: €127.0 million).
The position within the range primarily depends on whether the recovery from COVID-19 follows a moderate or strong pattern, and whether the strong metal market price levels seen in Q1 continue throughout the rest of 2021 or slow down in H2 2021.
China expansion is expected to be completed on schedule and on budget, with the first plant delivering commercial output and the second plant ramping up in H2 2021.
With regards to capex, Befesa targets to spend €75 to €90 million in 2021, of which: €25 to €30 million will be used for regular maintenance, compliance, operational excellence, and IT investments, to maintain Befesa's assets at their high-performance operational levels. The remaining €50 to €60 million will be invested to mainly continue the expansion into China, of which the majority is funded through local loans.
With regards to dividend distribution for the financial year 2020, a €40 million (€1.17 per share) will be proposed at the AGM (30 June 2021). This dividend distribution equals to 84% of the €47.6 million net profit in 2020.
On a two-year basis, this proposal equals to distributing net profit at 50%, the upper-end of Befesa's dividend policy: €64.9 million dividend (€24.9 million distributed for 2019, plus €40.0 million proposed for 2020) over €130.3 million net profit (€82.7 million in 2019, plus €47.6 million in 2020).
Consequently, a positive cash flow of €25 to €45 million is expected to be generated in 2021, which would result in a cash position of €180 to €200 million by year-end 2021. Net debt/EBITDA leverage is expected to reduce to x2.1 to x2.5 in 2021 (compared to x3.1 at year-end 2020).
An overview of the lower- and upper- end guidance framework for the full year 2021 is summarised on the following table (page 9).
In 2021, Befesa is excited to go live with its first two stateof-the-art EAF steel dust recycling plants in China. Befesa is pleased to support the environmental protection efforts through its environmental services in the Chinese market and actively contributing to a more sustainable world.
| A m EBITD m) (above 2019 of €160 wer-end: €165 Lo |
A m EBITD w record) Upper-end: €190 (ne |
|
|---|---|---|
| Capacity utilisation me / Volu |
mercial % Overall capacity utilisation at c. 85–90 D-19 m mping up & delivering co OVI m C output in H2 on schedule Moderate recovery fro China ra • • • |
mercial % Overall cap. utilisation at c. 90–95 m mping up & delivering co D-19 OVI output in H2 on schedule m C Strong recovery fro China ra • • • |
| Metal prices | wing market prices slo wn in H2 (vs. strong Q1'21 level) referenced at \$159/t m miniu Zinc & alu TC do • • |
MB) alloy F ME; c. €2,000 alu maintaining Q1'21 levels for 2021 referenced at \$159/t market prices (c. \$2,750/t zinc L strong Metal TC • • |
| Capex | maintenance / IT / co Continuing to fund China expansion m: wth (China), Total capex of c. €75–90 m regular m gro c. €50–60 c. €25–30 • • |
ments mpliance / operational excellence invest majority funded through China local loans; |
| Dividend | m net profit in FY'20; equal to 2.3 % on a t m (€1.17 / share) dividend distribution, equal to: m dividend = €64.9 m + FY'20 €47.6 Distributing net profit at upper-end of 50 m + FY'20 €40.0 % of FY'19 €82.7 % of €47.6 Distributing 84 FY'19 €24.9 equal to 50 €40 • • |
% yield (vs. €51.70 YE'20 closing price) m w: m net profit = €130 wo-year vie m, |
| cash position & net leverage w, Cash flo |
w 2019 of x2.6) Net leverage at c. x2.5 (belo m Cash position c. €180 m +€25 c. • • • |
Net leverage at c. x2.1 (back to 2018 level) m Cash position c. €200 m c. +€45 • • • |
| (€ thousand) | 31 March 2021 | 31 December 2020 |
|---|---|---|
| Non-current assets: | ||
| Intangible assets | ||
| Goodwill | 335,564 | 335,564 |
| Other intangible assets | 86,980 | 87,458 |
| 422,544 | 423,022 | |
| Right-of-use assets | 21,179 | 20,401 |
| Property, plant and equipment, net | 315,719 | 295,308 |
| Non-current financial assets | ||
| Investments in Group companies and associates | 118 | 118 |
| Other non-current financial assets | 2,136 | 2,546 |
| 2,254 | 2,664 | |
| Deferred tax assets | 87,885 | 81,369 |
| Total non-current assets | 849,581 | 822,764 |
| Current assets: | ||
| Inventories | 38,290 | 39,350 |
| Trade and other receivables | 78,158 | 54,222 |
| Trade receivables from related companies | 796 | 1,003 |
| Accounts receivables from public authorities | 12,101 | 9,621 |
| Other receivables | 16,665 | 18,817 |
| Other current financial assets | 121 | 64 |
| Cash and cash equivalents | 163,989 | 154,558 |
| Total current assets | 310,120 | 277,635 |
| Total assets | 1,159,701 | 1,100,399 |
| (€ thousand) | 31 March 2021 | 31 December 2020 |
|---|---|---|
| Equity: | ||
| Parent Company | ||
| Share capital | 94,576 | 94,576 |
| Share premium | 263,875 | 263,875 |
| Hedging reserves | (28,658) | (9,509) |
| Other reserves | (6,356) | (54,306) |
| Translation differences | (15,161) | (15,077) |
| Net profit/(loss) for the period | 24,780 | 47,608 |
| Interim dividend | (9,880) | (9,880) |
| Equity attributable to the owners of the Company | 323,176 | 317,287 |
| Non-controlling interests | 10,496 | 10,294 |
| Total equity | 333,672 | 327,581 |
| Non-current liabilities: | ||
| Long-term provisions | 9,228 | 9,968 |
| Loans and borrowings | 533,414 | 520,602 |
| Lease liabilities | 11,373 | 10,860 |
| Other non-current financial liabilities | 16,186 | 4,614 |
| Other non-current liabilities | 4,823 | 4,905 |
| Deferred tax liabilities | 69,393 | 68,293 |
| Total non-current liabilities | 644,417 | 619,242 |
| Current liabilities: | ||
| Loans and borrowings | 10,829 | 13,629 |
| Lease liabilities | 3,119 | 3,124 |
| Other current financial liabilities | 23,416 | 8,842 |
| Trade payables to related companies | 711 | 613 |
| Trade and other payables | 108,916 | 98,091 |
| Other payables | 18,614 | 11,432 |
| Accounts payable to public administrations | 18,614 | 11,432 |
| Other current liabilities | 16,007 | 17,845 |
| 34,621 | 29,277 | |
| Total current liabilities | 181,612 | 153,576 |
| Total equity and liabilities | 1,159,701 | 1,100,399 |
| (€ thousand) | Q1 2021 | Q1 2020 | Change |
|---|---|---|---|
| Revenue | 192,640 | 179,028 | 7.6 % |
| Changes in inventories of finished goods | |||
| and work-in-progress | (4,002) | (7,200) | (44.4) % |
| Procurements | (83,193) | (77,174) | 7.8 % |
| Other operating income | 1,478 | 638 | > 100 % |
| Personnel expenses | (21,066) | (21,066) | 0.0 % |
| Other operating expenses | (37,011) | (40,672) | (9.0) % |
| Amortisation/depreciation, impairment and provisions | (9,419) | (9,449) | (0.3) % |
| Operating profit (EBIT) | 39,427 | 24,105 | 63.6 % |
| Finance income | 24 | 43 | (44.2) % |
| Finance expenses | (5,289) | (4,291) | 23.3 % |
| Net exchange differences | 560 | (19) | - |
| Net finance income/(loss) | (4,705) | (4,267) | 10.3 % |
| Profit/(loss) before tax | 34,722 | 19,838 | 75.0 % |
| Corporate income tax | (9,197) | (5,982) | 53.7 % |
| Profit/(loss) for the period | 25,525 | 13,856 | 84.2 % |
| Attributable to: | |||
| Parent Company's owners | 24,780 | 14,690 | 68.7 % |
| Non-controlling interests | 745 | (834) | - |
| Earnings/(losses) per share attributable to owners of the Parent (expressed in euros per share) |
0.73 | 0.43 | 68.7 % |
| (€ thousand) | Q1 2021 | Q1 2020 |
|---|---|---|
| Profit/(loss) for the period before tax | 34,722 | 19,838 |
| Adjustments due to: | 13,202 | 14,678 |
| Depreciation and amortisation | 9,419 | 9,449 |
| Changes in provisions | (740) | 1,222 |
| Interest income | (24) | (43) |
| Finance costs | 5,289 | 4,291 |
| Other profit/(loss) | (182) | (260) |
| Exchange differences | (560) | 19 |
| Changes in working capital: | (11,719) | (11,097) |
| Trade receivables and other current assets | (23,881) | (17,468) |
| Inventories | 1,060 | 3,832 |
| Trade payables | 11,102 | 2,539 |
| Other cash flows from/(used in) operating activities: | (9,702) | (15,042) |
| Interest paid | (6,347) | (9,482) |
| Taxes paid | (3,355) | (5,560) |
| Net cash flows from/(used in) operating activities (I) | 26,503 | 8,377 |
| Cash flows from/(used in) investing activities: | ||
| Investments in intangible assets | - | (96) |
| Investments in property, plant and equipment | (28,016) | (16,104) |
| Divestments in other current financial assets | 3 | - |
| Net cash flows from/(used in) investing activities (II) | (28,013) | (16,200) |
| Cash flows from/(used in) financing activities: | ||
| Cash inflows from bank borrowings and other liabilities | 11,613 | 3,648 |
| Cash outflows from bank borrowings and other liabilities | (1,025) | (1,034) |
| Net cash flows from/(used in) financing activities (III) | 10,588 | 2,614 |
| Effect of foreign exchange rate changes on cash and cash equivalents (IV) | 353 | (328) |
| Net increase/(decrease) in cash and cash equivalents (I+II+III+IV) | 9,431 | (5,537) |
| Cash and cash equivalents at the beginning of the period | 154,558 | 125,460 |
| Cash and cash equivalents at the end of the period | 163,989 | 119,923 |
| Q1 2021 | Q1 2020 | Change | |
|---|---|---|---|
| Key operational data (tonnes, unless specified otherwise) | |||
| EAF steel dust throughput1 | 181,095 | 185,656 | (2.5) % |
| WOX sold | 66,727 | 67,777 | (1.5) % |
| Zinc blended price (€ / tonne) | 2,237 | 2,114 | 5.8 % |
| Total installed capacity2 | 825,300 | 825,300 | - |
| Utilisation (%)2 | 89.0 % | 90.2 % | (124) bps |
| Key financial data (€ million, unless specified otherwise) | |||
| Revenue | 100.9 | 101.2 | (0.3) % |
| EBITDA | 36.5 | 26.0 | 40.7 % |
| EBITDA margin % | 36.2 % | 25.6 % | 1,056 bps |
| EBIT | 31.6 | 20.9 | 51.5 % |
| EBIT margin % | 31.3 % | 20.6 % | 1,072 bps |
| Change | ||
|---|---|---|
| (16.3) % | ||
| (15.1) % | ||
| 94.1 % | 94.4% | (25) bps |
| (10.3) % | ||
| 0.6 % | ||
| 29.7 % | 26.5 % | 323 bps |
| 3.6 | 3.6 | (0.3) % |
| 18.1 % | 16.2 % | 182 bps |
| Q1 2021 104,430 450,000 19.8 5.9 |
Q1 2020 124,697 530,000 22.1 5.9 |
| Q1 2021 | Q1 2020 | Change |
|---|---|---|
| 51,283 | 47,919 | 7.0 % |
| 1,982 | 1,433 | 38.3 % |
| 205,000 | 205,000 | - |
| 101.5 % | 93.8 % | 770 bps |
| 26.0 % | ||
| 6.4 | 2.7 | > 100 % |
| 7.8 % | 4.2 % | 358 bps |
| 4.3 | 0.7 | > 100 % |
| 5.3 % | 1.1 % | 415 bps |
| 82.4 | 65.4 |
| Wednesday, 30 June 2021 |
Annual General Meeting |
|---|---|
| Thursday, 29 July 2021 | H1 2021 Interim Report & Conference Call |
| Thursday, 28 October 2021 | Q3 2021 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
Rafael Pérez 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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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 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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