Befesa S.A. — Investor Presentation 2018

Jun 6, 2018

Befesa Business Update – June 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.

Befesa and its affiliates do not intend, and do not assume any obligations, to update these forward-looking statements.

Q1 2018 figures contained in this presentation have not been audited.

Since 2008

Rafael Pérez

Director of Investor Relations & Strategy

▪ Director of Investor Relations and Strategy of Befesa since 2008

BEFESA Key Highlights

Solid start of 2018 with €44.5m EBITDA / €37.2m EBIT in Q1 '18, both up +7% YoY… driven mainly by higher volumes and continued favorable price environment

Consecutive run rate growth … LTM(1) Q1 '18 revenue of €747m, Adj. EBITDA of €175m and Adj. EBIT of €146m

Stable capital structure and slightly reduced leverage(2) down to 2.3x (compared to 2.4x in YE 2017 or 3.5x at YE 2016)

Extended hedges to cover up to 1H 2021; Prices secured above €2,200/t … Improving visibility of earnings and cash flows for the next ~3 years

Distributed 2017 dividend at upper end of 40-50% target range of reported Net Profit … Equal to €0.73 per share

Free Float increased from approx. 47.5% to 56.3% due to funds advised by Triton selling approx. 3 million shares to institutional investors on March 20

Outlook 2018 confirmed

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

(1) LTM stands for Last Twelve Months;

(2) Leverage calculated as Net Debt / Adjusted EBITDA. Leverage at close Q1 2018 is calculated using Adjusted EBITDA of the Last Twelve Months (LTM) as of March 31, 2018.

BEFESA Mid-Term Growth Roadmap

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.

Befesa's share price has developed positively since the IPO outperforming DAX / SDAX indices … Free-float increased to 56.3%

Performance of Befesa Share vs. Market(1)

November 3, 2017 Over the course of the first

day of trading, the share price rose more than 13%, closing at €31.77

December 29, 2017

As of December 29, 2017, the share price amounted to €40.25. This is an increase of 43.8% since November 3, 2017, compared to the issue price

March 29, 2018

As of March 29, 2018, the share price amounted to €42.00. This represents an increase of 4.3% vs. YE '17 and 50% increase compared to the issue price in November 3, 2017

Key Highlights

• Befesa share developed positively, closing Q1 2018 at €42.00, up by +50% (vs. the issue price) … +4% (vs. price at YE '17) backed by strong operational performance
• Still significant share price upside potential to broker target price
• Strong broker consensus with all brokers giving a buy recommendation (7 in total)(2)
• Additional upside from extended hedging activity and new growth project
• Befesa shares outperformed the benchmark stock market indices DAX as well as SDAX since IPO

Ownership post IPO(3)

Hedging program in place covering up to and including mid 2021 … Improving visibility of earnings and cash flows for the next 3 years

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

no margin calls Source: London Metal Exchange (LME) Zinc daily cash settlement prices; Company data.

• Extended hedging period 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
1H 2021	€2,230	46,200

• Using the 2017 average LME market price (€2,572) for 2018 for the un-hedged expected volumes (~30%) … the blended average zinc price would translate to ~€2,207 per ton … 2017 blended avg. zinc price at €2,160 per ton
• Hedging without Befesa providing collateral /

Consolidated Net Debt / Leverage / Cash Flow / Capital Structure

Stable capital structure and slightly reduced leverage to 2.3x at close Q1 '18 …

Capital Structure

• Moody's and S&P credit ratings for Befesa S.A. of Ba3 / BB- … Unchanged from year end; Up from B2 / B, pre IPO
• €636m New Senior Facilities Agreement since Dec. 7, 2017:
• €526m Term Loan B – covenant lite; Euribor +2.75% / no floor; 5 year term; all bullet / no amortization;
• €75m RCF … Euribor +2.50% / no floor;
• €35m Guarantee Line; max 1.75%
• Variable to fix interest swap on 60% of the new Term Loan B

• Reduced annual run rate of interest costs and debt service by approx. 60% … to less than <€20 per year

• Cash flow performance in Q1 … After paying taxes of €4.8m, interests of €3.4m, funding maintenance, productivity and compliance capex of €7.5m …

• … cash on hand increased by +€25m / +26% YoY
• … €118m cash position at close Q1 '18
• Strong free cash flow generation run rate due to low maintenance requirements providing funds for growth

BEFESA Investor Relations

✓ March 8, 2018 - Citibank

✓ March 16, 2018 - Citibank

June 6-8, 2018 - Deutsche Bank Berlin, dbAccess Berlin Conference

Sept 11-13, 2018 - JP Morgan London, Small and Mid Caps Europe

Dec 3-6, 2018 - Berenberg

Oct 1, 2018 - Berenberg

January 2019 - Commerzbank

Milan, Berenberg Milan Seminar

Feb 5-6, 2019 - HSBC

Q1 2019 - Santander

London, Global Resources Conference

✓ January 8-9, 2018 - Commerzbank

New York, German Investment Seminar

London, Pan-European Business Serv. Conference

Sept 24-26, 2018 - Berenberg & Goldman Sachs

Munich, German Corporate Conference

London, Pennyhill European Conference

New York, German Investment Seminar

Frankfurt, 14th ESG Investor Conference

Madrid, Annual Investor Conference

✓ Monday, February 19, 2018: Publication of Preliminary Earnings Full Year 2017

✓ Thursday, March 15, 2018: Publication of Report Full Year 2017 & Analyst Call

✓ Thursday, April 26, 2018: Annual General Meeting in Luxembourg

✓ Thursday, May 24, 2018: Publication of Statement Q1 2018 & Analyst Call

Thursday, August 30, 2018: Publication of Interim Report H1 2018 & Analyst Call

Thursday, Nov 22, 2018: Publication of Statement Q3 2018 & Analyst Call

IR Contact Rafael Pérez Director of Investor Relations & Strategy T: +49 (0) 2102 1001 340 E: irbefesa@befesa.com

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).

BEFESA Consolidated Key Financials

Continued solid growth; Earnings Q1 YoY up +7% … Befesa LTM run rate at €747m Revenue, €175m Adj. EBITDA / €146m Adj. EBIT

Highlights

• Q1 '18 revenue increased +€23m / +13% YoY … primarily due to:
• higher volumes in both core segments +20% steel dust throughput … +3% salt slags & SPL recycled
• higher prices for both zinc (blended zinc price increased +6% YoY) and aluminium alloys (average market prices +4% YoY)
• Q1 '18 earnings increased to €44.5m / +7% YoY Adjusted EBITDA (23% of revenue) … €37.2m / +7% YoY Adj. EBIT (19% of revenue)

… driven by strong volumes in both core segments, and favorable zinc & aluminium prices

• … partially offset by non-core activities:
• a) 2 nd Alu with lower metal margin, expected to recover over the coming quarters;
• b) temporary shutdown in Stainless plant in Sweden to implement an operational excellence improvement in Q1 '18
• LTM run rate growth to €747m Revenue, €175m Adjusted EBITDA and €146m Adjusted EBIT … driven by higher run rate volumes and favorable prices

(1) 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.

BEFESA Steel Dust Recycling Services

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

EAFD Throughput & Capacity Utilization

Prices

(€ per ton)	Q1 2017	Q1 2018	% Var.	FY 2017
Befesa blended (*)zinc price (€/t)	2,171	2,299	+6%	2,160
LME avg. price (€/t)	2,612	2,776	+6%	2,572

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

(1) 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.

Alu Salt Slags approx. flat YoY … Moderate volume growth in Salt Slags partially offset in 2nd Alu

19% 22% 24% 24%

Volumes & Capacity Utilization

(thousand tons, % of annual installed capacity)

(*) Aluminium Scrap and Foundry Ingots Aluminium pressure diecasting ingot DIN226/A380 European Metal Bulletin Free Market Duty paid delivered works.

14

Salt Slags sub-segment

Secondary Aluminium sub-segment

(1) Total revenue after inter-segment eliminations; (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) margins are calculated as the ratio of Adjusted EBIT(DA) to Revenue, and refer to Salt Slags sub-segment.

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)		#1	Position in Europe in Salt Slags (c. 45–50% market share)
35%	Adj. EBIT Margin (LTM(1) Q1 2018)(3)		24%	Adj. EBIT Margin in Salt Slags (LTM(1) (4) Q1 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

(€m)

Margin

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

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

Source: Company information

(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

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

CFO since 2014

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

Federico Barredo Vice President Aluminium Salt Slags Recycling Services

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)