Befesa S.A.

Investor Presentation • Sep 24, 2018

Befesa Business Update – October 2018

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. 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 our plants; insufficient insurance coverage and increases in insurance cost; loss of senior management and key personnel; unauthorized use of our intellectual property and claims of infringement by us of others intellectual property; our ability to generate cash to service our indebtedness changes in business strategy and various other factors. Should one or more of these risks or uncertainties materialize, 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 presentation 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 presentation nor anything contained therein shall form the basis of, or be relied upon in connection with, any commitment or contract whatsoever. This presentation may not, at any time, be reproduced, distributed or published (in whole or in part) without prior written consent of Befesa.

Q2 and H1 2018 figures contained in this presentation have not been audited or reviewed by external auditors.

This presentation includes Alternative Performance Measures (APMs), including EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, EBIT, 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). 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 our results of operations or liquidity derived in accordance with IFRS. We include APMs in this presentation because we believe that they are useful measures of our performance and liquidity. Other companies, including those in our industry, may calculate similarly titled financial measures differently than we do. Because all companies do not calculate these financial measures in the same manner, our presentation of such financial measures may not be comparable to other similarly titled measures of other companies. These APMs are not audited. All amounts are stated in million euros (€ million) unless otherwise indicated.

BEFESA Today's Presenters

Since 2008

Rafael Pérez

Director of Investor Relations & Strategy

▪ Director of Investor Relations and Strategy of Befesa since 2008

Achieved Good Results in H1 2018 with +7% Earnings Growth YoY; S-DAX Entry

Extended Zinc Hedges until July 2021; Providing 3 Years of Improved Visibility

Challenging Market Trends: US Tariffs; Turkish Lira Depreciation; Zinc Price Decrease ... Limited and Manageable Impact on Befesa

2018: Befesa Committed to Single Digit Growth … Even at Zinc Levels of ~€2,100/t

2019 & Mid-Term: Double Digit Growth Based on Hedges & Growth Projects

China Expansion: Developing 1st Steel Dust Recycling Plant at Jiangsu Province; Purchasing Land Use Right; Expecting Ramp Up of Operations in 2H 2020

BEFESA Key Highlights Q2

Solid Q2 2018 with €44.3m EBITDA / €37.0m EBIT, up +7 / +8% YoY respectively driven mainly by higher volumes and continued favorable price environment

Extended hedges to cover up to H1 2021; Prices secured above €2,200/t; Improving visibility of earnings and cash flows for the next ~3 years

Distributed 2017 dividend on May 3 at upper end of 40-50% target range of reported Net Profit, equal to €0.73 per share

Net Profit(1) of €44.8m in H1'18, a +€24.8m increase YoY

Stable capital structure; Leverage(2) of 2.4x (vs. 2.4x at YE 2017 / 3.5x at YE 2016)

Implementation of the next set of organic growth initiatives on track; Continuing to fund the company's successful development in 2019 & beyond

Befesa will be trading on the SDAX index starting on 24 September 2018

(1) Net profit from continuing operations attributable to Parent company owners

(2) Leverage calculated as Net Debt / Adjusted EBITDA. Leverage at June 30, 2018 is calculated using Adjusted EBITDA of the Last Twelve Months (LTM) as of June 30, '18

Accelerated top- and bottom-line growth through a well-defined strategy

Note: Chart is purely illustrative and size of respective arrows in the chart is not indicative to the underlying growth potential

Signed Agreement with Jiangsu Changzhou Economic Development Zone and Purchasing Land Use Right; Developing 1st Steel Dust Recycling Plant …

• ✓ Chinese Government Continues to Strengthen Environmental Regulations
• ✓ Steel Dust has been Classified as Hazardous Waste
• ➢ Steel Production from Electric Arc Furnaces Growing and Estimated to Reach 200 mm Tons by 2030

… Befesa Investing in Proven State of the Art 110,000t Facility; Expecting to Complete Ramp Up of Operations in 2nd Half 2020

Hedging program in place covering up to July 2021: improving visibility of earnings and cash flows for the next 3 years

Market Zinc Price vs. Zinc Hedge (€/ton)

▪ Extended hedging to cover up to mid 2021

▪ Increased volume coverage Higher volume of 7.7 kt/month or 92.4 kt/year (vs previous 6.1 kt/month or 73.2 kt/year) approx. 70% of zinc equivalent payable output

▪ Strong hedge price levels of €2,306/t in 2019, €2,245/t in 2020, and €2,230/t in H1 2021

Period	Average hedged price €/t	Zinc content hedged (tons)
2017	€1,876	73,200
2018	€2,051	92,400
2019	€2,306	92,400
2020	€2,245	92,400
H1 2021	€2,230	46,200

• Using recent Aug/Sept~€2100 LME market price also for the remaining months in 2018 for the unhedged expected volumes (~30%), the blended average zinc price would translate in 2018 to ~€2,150; vs. €2,160 in 2017.
• Hedging without Befesa providing collateral; no margin calls

Source: London Metal Exchange (LME) Zinc daily cash settlement prices

Consolidated Net Debt / Leverage / Cash Flow / Ratings

Stable capital structure; Leverage of 2.4x at June 30, 2018

Free Cash Flow(3)

• Cash flow performance in Q2: After paying taxes of €6.2m, interests of €1.0m, funding maintenance, productivity and compliance capex of €6.4m
• After distributing €25 million dividend, cash on hand increased by +€19.8m / +23% YoY; €104.4m cash position at June 30, 2018
• Solid free cash flow generation run rate due to low maintenance requirements providing funds for growth

(1) Leverage calculated as Net Debt / Adjusted EBITDA

(2) Cash&Equiv. of €105m includes €0.4m of Other current financial assets

(3) Free Cash Flow is based on management accounts and is calculated as EBIT + Depreciation & Amortization (D&A) +/- WC change – maintenance capex – taxes

(4) Cash conversion = FCF / (Reported Adjusted EBIT + Adjusted D&A) (5) Credit ratings assigned by Moody's and S&P on December 13, 2017

BEFESA Investor Relations

Note: Befesa's financial reports and statements are published at 7:30 AM German time

We cannot rule out changes of dates. We recommend checking them in the Investor Relations / Financial Calendar section of our website (www.befesa.com)

Continued solid growth similar to Q1; H1 Earnings up +7% YoY

Highlights

• Q2 '18 Revenue increased to €187.0m / +8.6% YoY on a normalized basis(1); decreased (7.3)% YoY on a reported basis primarily due to:
• a) Lower reported revenues in Aluminium Salt Slags services due to an amendment to IFRS 15 affecting the revenue recognition of non-operating sales(1)
• b) Lower volumes in Aluminium Salt Slags services
  • (6)% Secondary aluminium alloys produced (plant stoppage to implement new furnace / operational excellence project)
  • (4)% Salt Slags & SPL recycled
• c) Partially offset by:
  • higher volumes in Steel Dust services +9% steel dust throughput
  • higher prices for both zinc (Avg. blended +8% YoY); aluminium alloys (Avg. market prices +2% YoY)
• Q2 '18 earnings increased to €44.3m / +6.8% YoY Adjusted EBITDA (24% of revenue), and

to €37.0m / +7.9% YoY Adj. EBIT (20% of revenue)

driven by strong volumes in Steel services, favorable zinc & aluminium prices and aluminium metal margin recovering

▪ Consecutive LTM(3) run rate growth to €733m Revenue, €178m Adj. EBITDA, €149m Adj. EBIT

driven by higher run rate volumes and favorable prices

13

(1) As of January 1, 2018, Befesa applied the amendment to IFRS 15 – please see 2017 Annual Report (page 84) – affecting the revenue recognition of non-operating sales in the Secondary Aluminium sub-segment. In order to allow Like for Like comparisons between the periods 2018 and 2017, the reported sales in 2017 have been normalized by the non-operating sales (Q2'17: €29.4m; H1'17: €33.2m). The recognition of the corresponding margin is not impacted (2) Adjusted EBIT(DA) have been calculated based on the reported operating result adjusted for holding, restructuring and other one-time effects; Adjusted EBIT(DA) margin is calculated as the ratio of Adjusted EBIT(DA) to Revenue (3) LTM: Last Twelve Months as of June 30, 2018

YoY double-digit increase in revenues & earnings driven by higher EAFD throughput and continued favorable zinc price environment

Prices

(€ per ton)	Q2 2017	Q2 2018	% Var.	H1 2017	H1 2018	% Var.
Befesa blended (*)zinc price (€/t)	2,054	2,214	+8%	2,113	2,240	+6%
LME avg. price (€/t)	2,358	2,611	+11%	2,487	2,698	+8%

(*) Blended rate between hedged prices and average spot prices, weighted by the respective hedged and non-hedged volumes, reflecting the effective price to Befesa.

YoY slight decrease in earnings driven by lower Aluminium Salt Slags volumes partially offset by higher prices

Volumes & Capacity Utilization

European Metal Bulletin Free Market Duty paid delivered works

15

Salt Slags sub-segment

Secondary Aluminium sub-segment

(1) Total revenue after inter-segment eliminations

(2) As of January 1, 2018, Befesa applied the amendment to IFRS 15 – please see 2017 Annual Report (page 84) – affecting the revenue recognition of non-operating sales in the Secondary Aluminium sub-segment. In order to allow Like for Like comparisons between the periods 2018 and 2017, the reported sales in 2017 have been normalized by the non-operating sales (Q2'17: €29.4m; H1'17: €33.2m). The recognition of the corresponding margin is not impacted (3) Adjusted EBIT(DA) margins refer to the Salt Slags sub-segment

16

BEFESA Befesa at a Glance

Befesa – European market leader in providing mission critical hazardous waste recycling services to the steel and aluminium industry

More than 90% of EBIT generated from two core >20% EBIT margin operations with low capital intensity

Steel Dust Recycling Services(3)			Aluminium Salt Slags Recycling Services
#1	Position in Europe (c. 45–50% market share) and Asia(5)		Position in Europe in Salt Slags #1 (c. 45–50% market share)
35%	Adj. EBIT Margin (LTM(1) Q2 2018)(3)		23%	Adj. EBIT Margin in Salt Slags (LTM(1) (4) Q2 2018)
Relationships >15yrs			Relationships >15yrs

Source: Company information, International Consulting Firm based on i.a. World Steel Association's Steel Statistical Yearbooks, WBMS, industry research, expert Interviews.

(1) LTM stands for Last Twelve Months. (2) Excluding internal sales; sales split is calculated on revenues including internal revenues. (3) Including stainless steel.

(4) Including recycling of Spent Pot Linings (SPLs) which is a hazardous waste generated in primary aluminium production. (5) Excluding China.

BEFESA Befesa at a Glance

Befesa has grown successfully through organic initiatives and acquisitions

BEFESA Investment Highlights

Growing global middle class coupled with evident sustainability trends will further enhance the demand for steel and aluminium production and subsequent waste recovery globally

Source: International Consulting Firm based on i.a. OECD, scientific papers, Ducker Worldwide, EUROFER. (1) Excluding China.

Each Befesa plant usually collects waste from at least 10-15 client

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 Recycling Services

Source: Company information. (1) Excluding China.

Clients

Crude Steel Plants Salt Slags Plants

Befesa offers a crucial service taking care of highly regulated hazardous waste in the value chain of secondary steel and aluminium producers

• Befesa collects and recycles hazardous waste from steel producers and aluminium recyclers
• Recycling is mandatory for Befesa's clients due to environmental regulations
• Befesa takes off and effectively takes care of environmental liability for their clients
• Without timely and regulatory compliant offtake of hazardous waste clients face risk of complete shut-down of production as well as severe penalty payments
• Befesa therefore offers a critical element of its clients value chain

Consequences of Non-Compliance

• Major European steel producer struggles with large plant (producing 8% of European steel) due to breaching environmental regulations (contamination of environment)
• Court ordered to partly shut down the plant
• Owner prompted to invest \$3.8bn to bring the plant back to required standards
• In 2002 the owners of a metal foundry in Italy faced prison time for illegal transport and landfilling of hazardous waste
• In 2004 a big aluminium refinery in Italy abandoned 450kt of hazardous waste in the open air over half an hectare
• More than 10 years later the local administration is still collecting funds to proceed to the removal and cleaning of the area
• In 2011 a big producer of aluminium alloys in Spain was involved in the transport without authorisation and illegal landfilling of 1.5kt of salt slags on a vacant lot
• Befesa was ultimately contracted to treat the waste properly

Befesa's services business is inherently protected by high barriers to entry

Customers

• Steel and aluminium producers:
• Befesa has a strong position in servicing the steel and aluminium manufacturers with long-term relationships: often +15 years
• Zinc smelters, aluminium producers:
• Befesa provides commoditized but scarce products with an outlook of growing demand – Zinc Oxide sold out

New Entrants – High Barriers to Entry

• Technology and process know-how
• Capital intensity to build new plant
• Regionally the capacity is balanced
• New license difficult to get
• Vertical integration lacks economy of scale

Concentrated Market

Befesa is the clear leader in niche recycling industries with few players

Substitution Risk – Very Low

• Strictly enforced regulation in the European Union
• No viable alternative to recycling

Suppliers – Limited Bargaining Power

• Low differentiated product (e.g. utilities, water, basic materials)
• Low switching costs to another supplier

High Entry Barriers and Regulatory Certainty Around Recycling Services Provide a Highly Defendable Market Position for Befesa

Attractive growth track record with stable margins and strong cash generation

Adj. EBIT

Low capital intensity exemplified by low, stable D&A and high Adj. EBIT margin

Strong and stable free cash flow generation due to low maintenance requirements providing funds for growth

Robust sales growth underpinned by sustainable increase in volumes and acceleration in growth in 2017

(1) Totals excluding internal revenues. (2) Free Cash Flow = EBIT + Depreciation & Amortization +/- WC change – maintenance capex - taxes. (3) Cash conversion = FCF / (Adj. EBIT +Adj. D&A).

Proven margin stability despite volatile commodity prices – testament to successful service-focused business model and prudent hedging policy

Source: Company information, Bloomberg.

(1) FCF/(Adj. EBIT + Adj. D&A); FCF=Adj. EBIT + Adj. D&A -+ WC change – maintenance capex – taxes.

BEFESA Resilience Underpinned by Service Business Model 5

Befesa is a service company managing and reducing exposure to commodity prices

Portfolio Mix	Steel Dust Recycling Services and Aluminium Salt Slags Recycling Services with limited correlation • • In 2015–2017 zinc and aluminium prices have shown inverse margin trends
Collection Fee	• Steel dust collection fee (~10-20% revenues) influenced inversely by zinc prices • Salt slags collection fee (~40% revenues) uncorrelated to aluminium prices
Salt Slags	• Low to no commodity risk as recycled aluminium concentrates used for own production and only recycled salt sold externally (~20% of segment revenues)
Secondary Aluminium	• "Natural hedge" as aluminium is both an input (COGS) and an output (sales). Further, own secondary production highly complementary to salt slags business
Zinc Floor	• Marginal cost of mines has been steadily increasing as old low cost mines are shut down; floor price for zinc (reduces volatility) further supported by supply/demand shortages • Zinc price floor estimated to be around €2,000-2,100 per ton for next years
Hedging	Befesa reduces earnings variability by buying floors and swaps (24-48 months out) providing for minimum floor EBIT • with additional upside Zinc price volatility: Average inter annual swings of ~10-12% since 2008 •

Accelerated top- and bottom-line growth through a well-defined strategy

Note: Chart is purely illustrative and size of respective arrows in the chart is not indicative to the underlying growth potential

Senior management team delivering results through long standing industry expertise, entrepreneurial spirit and focus on operational excellence as well as governance and compliance processes

CEO since 2000

Has run Befesa for >15 Years Became President of Abengoa's Environmental Services Division in 1994

Javier Molina

CEO

Asier Zarraonandia Vice President Steel Dust Recycling Services

16 years with Befesa 25 years with Befesa

Has run the Steel Dust Recycling Services Business for >10 Years

Wolf Lehmann CFO; including responsibilities for Operational Excellence and IT

Federico Barredo Vice President

Aluminium Salt Slags Recycling Services

CFO since 2014

20+ years in finance and operational leadership roles 50/50 General Electric / Private Equity

Has run the Aluminium Salt Slags Recycling Service Business for >15 Years

Key Achievements/Track Record

Extensive experience in steel and aluminium recycling business

Strong performance results through focus on operational excellence

Building strong business foundation of ESG, compliance and health & safety processes

Successful international expansion

Track record of successful acquisitions and turnarounds (BUS, Agor, Alcasa, Hankook, Silvermet etc.)

Experience in developing greenfield projects (South Korea, Gravelines, Bernburg)