Befesa S.A. — Investor Presentation 2018

Mar 8, 2018

Preliminary Full Year 2017 Earnings & Roadshow

March, 2018

BEFESA Forward-looking Statement

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 does 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.

2017 are preliminary unaudited figures since Audit is still in process. No material changes are expected.

BEFESA Today's Presenters

CEO since 2000

Javier Molina

President and CEO

Wolf Lehmann CFO since 2014

CFO; including responsibilities for Operational Excellence and IT

Since 2008

Rafael Pérez Gómez

Director of Corporate Strategy and Investor Relations

▪ Became President of Abengoa's Environmental Services Division in 1994

• 20+ years in operational and finance leadership roles
• 50/50 General Electric / Private Equity
• Director of Corporate Strategy and Investor Relations of Befesa Group since 2008

BEFESA Key Highlights

Continued double-digit growth in revenue and earnings driven by strong volumes, favorable prices and operational excellence in both core businesses

Profitability improved to 20% Adjusted EBIT Margin (1) (compared to 17% in 2016A)

Strong cash generation and reduced leverage(2) further down to x2,4 (compared to x3,5 in YE 2016)

Hedging program extended through swaps to Jan 2021 improving visibility of earnings and cash flows for the next ~3 years

New capital structure(3) lowers interest costs and debt service by approx. 60% … improved credit ratings assigned to Befesa of Ba3 / BB- Moody`s / S&P

Focus on implementing the next set of organic growth initiatives to continue the company's successful development in 2019 & beyond

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

Utilization

• Increase plant utilization of prior year growth investments … mainly Steel Dust Korea
• 2 Organic Growth

2018 Focus:

• Steel Dust:
• Expand Turkey +45kt
• Korea Washing Plant
• Alu Salt Slags:
• Change to Tilting Furnaces
• Expand Hannover +40kt

3 Prices & Hedging

• 2018: 92.4kt at €2,051
• 2019: 92.4kt at €2,306
• 2020: 92.4kt at €2,245

4 New Geographies

• Monitoring growth opportunities and regulatory framework in new geographies, e.g. China, South East Asia, Russia

Befesa's share price has developed positively since the IPO with still significant value upside when comparing to peers

Key Highlights

• c. +50% share price increase since IPO 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

(1) Post exercise of Greenshoe option, as of YE 2017. (2) Citi, Goldman Sachs, JP Morgan, Berenberg, Commerzbank, Santander, Stifel. (3) Based on selected broker reports.

Source: Factset as of 06th of Mar 2018.

Befesa's strong service based business model results in superior financial performance closest to Premium Business Services and US Waste Manag. players

1. Defined as (Adj. EBITDA – Capex) / Adj. EBITDA. 2 . 2018E Margins used for Cleanharbors given ongoing restructuring. 3. Cash conversion = (Adj. EBITDA +/- WC change – maintenance capex – taxes)/ Adj. EBITDA . Source: Factset, as of 15-February-2018. Figures represent median of peers for each of the segments. The financial data presented with respect to other companies has been compiled by Factset from the publicly available information of the respective companies. Befesa has not independently verified the financial information of such other companies and these companies may calculate similarly titled financial measures differently than Befesa does. Befesa's presentation of such financial measures may therefore not be comparable to other companies' similarly titled measures and analysts should use caution when making such comparisons.

BEFESA

Hedging extended through swaps to cover full year 2020 … Improving visibility of earnings and cash flows for the next 3 years

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

Source: London Metal Exchange (LME) Zinc daily cash settlement prices; Company data.

▪ Extended hedging period to fully cover 2020

▪ Increased volume coverage … Higher volume of 7.7 kt/month or 92.4kt/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 and €2,245/t in 2020

Period	Swap average price €/t	Zinc content hedged
2017	€1,876	73,200 tons
2018	€2,051	92,400 tons
2019	€2,306	92,400 tons
2020	€2,245	92,400 tons

• 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 / no margin calls

BEFESA

Consolidated Net Debt / Leverage / Cash Position / New Capital Structure

Net debt of ~€406m … reduced leverage further down to x2.4 at '17 close … Continued Strong Cash Flow Generation of ~€56m … New capital structure resulting in ~60% lower financial costs

(1) Preliminary Unaudited figures as of Dec. 31, 2017; Leverage calculated as Net Debt / Adjusted EBITDA.

New Capital Structure

• Moody's and S&P assigned improved credit ratings for Befesa S.A. of Ba3 / BB- … both 2 notches up from B2 / B
• €636m New Senior Facilities Agreement in place since December 7, 2017:
• €526m Term Loan B – covenant lite; 3M 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 (€316m of €526m)
• Reduced annual run rate of interest costs and debt service by approx. 60%

BEFESA Investor Relations

Financial Calendar Meet Befesa …

✓ 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

Friday, July 27, 2018: Publication of Interim Report H1 2018 & Analyst Call

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

✓ January 8-9, 2018 - Commerzbank New York, German Investment Seminar

March 8, 2018 - Citibank London, Global Resources Conference

March 16, 2018 - Citibank London, Pan-European Business Services Conference

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

June 11-13, 2018 - Stifel Boston, 2018 Cross Sector Insight Conference

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

Sept 24-26, 2018 - Berenberg & Goldman Sachs Munich, German Corporate Conference

2 Preliminary FY 2017 Trading Update

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BEFESA Consolidated Key Financials

Continued solid growth in revenue, earnings and profitability driven by strong volumes, favorable prices and operational excellence

Highlights

• Preliminary FY '17 Revenue increased +€113m / +18% YoY … primarily due to:
• higher volumes in both core segments +12% steel dust throughput /+4% salt slags & SPL recycled
• higher prices for both zinc (blended zinc price increased 11% YoY) and aluminium alloys (average market prices +9% YoY)
• Preliminary FY '17 Earnings increased to €172m / +30% YoY Adjusted EBITDA (24% of revenue) … €144m / +39% YoY Adjusted EBIT (20% of revenue) …

… driven by strong volumes in both core segments, favorable zinc and aluminium prices and cost efficiencies from operational excellence initiatives

(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 increase in revenues & earnings driven by higher EAFD throughput, Waelz oxide volumes, favorable zinc price and operational excellence

Prices

	Q4 2016	Q4 2017	% Var.	FY 2016	FY 2017	% Var.
Befesa blended (*)zinc price (€/t)	2,162	2,210	+2%	1,939	2,160	+11%
LME avg price (€/t)	2,338	2,723	+16%	1,893	2,572	+36%

(*) 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.

Growth in revenues & earnings driven by good volumes, increasing alu alloy prices, and operational excellence

Volumes & Capacity Utilization

Salt Slags & SPL Treated (kt) Alu Alloys Produced (kt)

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Prices

	Q4	Q4	%	FY	FY	%
	2016	2017	Var.	2016	2017	Var.
Alu alloy avg. price (*) (€/t)	1,591	1,753	+10%	1,618	1,766	+9%

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

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) margin is calculated as the ratio of Adjusted EBIT(DA) to Revenue.

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 Services2		Aluminium Salt Slags Recycling Services
#1	Position in Europe (c.45–50% Market Share) and Asia4	Position in Europe in Salt Slags (c.45–50% Market #1 Share)
36%	Adj. EBIT Margin (Prelim. FY 2017)2	24% Adj. EBIT Margin in Salt Slags (Prelim. FY 2017)3
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.

17 (1) Excluding internal sales; sales split is calculated on revenues including internal revenues. (2) Including stainless steel. (3) Including recycling of Spent Pot Linings (SPLs) which is a hazardous waste generated in primary aluminium production. (4) Excluding China.

BEFESA Befesa at a Glance

Befesa has grown successfully through organic initiatives and acquisitions

(1) Befesa subsequently acquired 100%.

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

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 = Adj. EBIT + Adj. DA +/- WC change – maintenance capex - taxes. (3) Cash conversion = FCF / (Adj. EBIT +Adj. D&A).

BEFESA

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

Utilization

6

• Increase plant utilization of prior year growth investments … mainly Steel Dust Korea
• 2 Organic Growth

2018 Focus:

• Steel Dust:
• Expand Turkey +45kt
• Korea Washing Plant
• Alu Salt Slags:
• Change to Tilting Furnaces
• Expand Hannover +40kt

3 Prices & Hedging

• 2018: 92.4kt at €2,051
• 2019: 92.4kt at €2,306
• 2020: 92.4kt at €2,245

4 New Geographies

• Monitoring growth opportunities and regulatory framework in new geographies, e.g. China, South East Asia

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

Javier Molina President and CEO

CEO since 2000

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

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 operational and finance 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)