Quarterly Report • May 8, 2019
Quarterly Report
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Statement for the First Quarter 2019
(€ million, unless specified otherwise)
| Q1 2019 | Q1 2018 | Change | |
|---|---|---|---|
| Key operational data | |||
| Steel dust throughput (tonnes) | 168,968 | 187,822 | (10.0) % |
| Waelz oxide (WOX) sold (tonnes) | 53,189 | 62,947 | (15.5) % |
| Salt slags and Spent Pot Linings (SPL) recycled (tonnes) | 129,095 | 130,985 | (1.4) % |
| Secondary aluminium alloys produced (tonnes) | 47,965 | 49,609 | (3.3) % |
| LME zinc average price (€ / tonne) | 2,380 | 2,776 | (14.3) % |
| Blended zinc price (€ / tonne) | 2,373 | 2,299 | 3.2 % |
| Aluminium alloy average market price (€ / tonne) | 1,528 | 1,833 | (16.6) % |
| Key financial data | |||
| Revenue | 179.1 | 195.4 | (8.3) % |
| EBITDA | 43.0 | 44.5 | (3.4) % |
| EBITDA margin (% over revenue) | 24.0 % | 22.8 % | |
| EBIT | 34.6 | 37.2 | (7.2) % |
| EBIT margin (% over revenue) | 19.3 % | 19.1 % | |
| Financial result | (4.1) | (4.4) | (6.1) % |
| Profit before taxes and minority interests | 30.4 | 32.8 | (7.3) % |
| Net profit attributable to shareholders of Befesa S.A. | 22.1 | 21.7 | 1.9 % |
| EPS (in €) based on 34,066,705 shares | 0.65 | 0.64 | 1.9 % |
| Total assets (i) | 1,073.3 | 1,086.1 | (1.2) % |
| Capital expenditures | 12.9 | 6.7 | 92.7 % |
| Cash flow from operating activities | 17.6 | 9.9 | 77.8 % |
| Cash and cash equivalents at the end of the period | 154.8 | 118.2 | 30.9 % |
| Net debt (ii) | 383.0 | 407.1 | (5.9) % |
| Leverage (ii) | x 2.2 | x 2.3 | |
| Number of employees (as of end of the period) | 1,161 | 1,122 | 3.5 % |
(i) 2018 figure is as of 31 December
(ii) From 1 January 2019, implemented IFRS 16 amendment affecting accounting for renting & leasing results in €14 million higher debt or ~0.1 higher leverage compared to year-end 2018
In Q1 2019, consolidated revenue decreased by 8.3% to €179.1 million. The revenue decrease is mainly driven by reduced volumes in Steel Dust Recycling Services as expected due to the scheduled plant downtime in Turkey to expand its capacity, unfavourable zinc treatment charges, as well as lower aluminium alloys prices. The revenue decrease was partially offset by the recovery of Stainless operations as well as by the improved blended zinc prices thanks to hedges in place.
In Q1 2019, EBITDA decreased by 3.4% to €43.0 million. Similarly, EBIT declined by 7.2% to €34.6 million. Additionally to the drivers explained above, EBITDA & EBIT benefitted from the higher efficiency furnaces installed during H2 2018 in Aluminium Salt Slags Recycling Services.
In Q1 2019, the consolidated financial result amounted to €-4.1 million compared with €-4.4 million in Q1 2018 (+6.1%). Main factor driving this development was a reduction in financial expenses driven by lower interest rates (Euribor+250 bps in Q1 2019 vs. Euribor+275 bps in Q1 2018) due to the improved leverage ratio (Q1 2019: x2.2; Q1 2018: above x2.25 ratchet at x2.3).
Q1 2019 consolidated net profit attributable to the shareholders increased by 1.9% to €22.1 million (Q1 2018: €21.7 million).
Financial indebtedness compared to year-end 2018 increased by €10.4 million, to €537.9 million as of 31 March 2019 mainly due to a €14 million increase in non-current financial indebtedness after implementing the IFRS16 amendment affecting accounting for renting and leasing from 1 January 2019.
Compared to year-end 2018, net debt increased slightly in Q1 2019 by €6.3 million to €383.0 million.
The following table reconciles net debt to the relevant balance sheet line items:
| (€ million) |
|---|
| 31 March | 31 December | |
|---|---|---|
| 2019 | 2018 | |
| Non-current financial indebtedness | 531.9 | 520.2 |
| + Current financial indebtedness (i) | 6.0 | 7.3 |
| Financial indebtedness | 537.9 | 527.5 |
| - Cash and cash equivalents | (154.8) | (150.6) |
| - Other current financial assets (ii) | (0.1) | (0.1) |
| Net debt (iii) | 383.0 | 376.8 |
| EBITDA | 174.5 | 176.0 |
| Leverage ratio (iii) | x 2.2 | x 2.1 |
(i) €7.3 million at year-end 2018 mainly includes accrued bi-annual interests of term loan B paid in 9 January 2019
(ii) Other current financial assets adjusted by hedging valuation
(iii) From 1 January 2019, implemented IFRS 16 amendment affecting accounting for renting & leasing results in €14 million higher net debt or ~0.1 higher leverage compared to year-end 2018
Q1 2019 operating cash flow amounted to €17.6 million, up from €9.9 million Q1 2018, mainly driven by a lower increase in working capital and the payment of one-off IPO related cost in Q1 2018. Q1 2019 operating cash flow was mainly affected by €-13 million of change in working capital mainly due higher receivables based on seasonality of revenue loading between Q4 2018 and Q1 2019 and timing of collections.
Q1 2019 closed at a leverage of x2.2 EBITDA and Befesa continues to be compliant with all debt covenants.
Steel dust recycling volumes processed in Q1 2019 amounted to 168,968 tonnes, representing a decrease of 10.0 % compared to Q1 2018. This expected decrease is explained by the scheduled downtime of the plant in Turkey, since January 2019, to expand the plant capacity from 65,000 to 110,000 tonnes. The European plants as well as the plant in South Korea operated at high utilisation levels. With these volumes, steel dust recycling plants have been running at an average load factor of 87.8% in Q1 2019 (Q1 2018: 97.6%). As a result, the volume of Waelz oxide (WOX) sold decreased by 15.5%, to 53,189 tonnes in Q1 2019 (Q1 2018: 62,947 tonnes).
In Q1 2019, revenue decreased by -6.4% to €95.1 million. This was primarily due to mentioned 10% decrease in steel dust throughput mainly due to lower volumes in Turkey and higher zinc treatment charges referenced at around \$245 per tonne in 2019 (compared to \$147 per tonne in 2018). The revenue decrease was partially offset by average effective zinc prices (blended rate between hedged volume and nonhedged volume), which increased during Q1 by 3% yearon-year to €2,373 per tonne (Q1 2018: €2,299 per tonne).
EBITDA decreased by €2.2 million or 6.1%, to €33.9 million in Q1 2019 (Q1 2018: €36.1 million). Similarly, EBIT decreased by 9.2% to €29.6 million in Q1 2019 (Q1 2018: €32.6 million). Earnings in Q1 were impacted by the mentioned scheduled downtime in Turkey to increase the capacity as well as the unfavourable reference zinc treatment charges, partially offset by the improved performance of the Stainless operations and higher zinc hedged prices.
EBITDA margins in Q1 2019 remained flat at 36% and EBIT margins amounted to 31.1% (Q1 2018: 32.1%).
Salt slags and SPL recycled volumes in Q1 2019 amounted to 129,095 tonnes, a slight decrease of 1.4% compared to the same period in the previous year. Capacity utilisation levels remained very high at 99%.
Revenue in the Salt Slags subsegment increased slightly by 1.9% corresponding to €22.3 million in Q1 2019 and was primarily driven by the better treatment fees which compensated the 16.6% decrease in prices for aluminium alloys (Q1 2019: €1,528 per tonne; Q1 2018: €1,833 per tonne).
EBITDA in the Salt Slags subsegment slightly decreased by 2.4%, to €6.4 million in Q1 2019 (Q1 2018: €6.6 million). Similarly, EBIT in Q1 2019 slightly declined by €0.4 million, to €4.3 million (Q1 2018: €4.7 million).
Aluminium alloy production volumes in Q1 2019 decreased by 3.3% to 47,965 tonnes.
In Q1 2019, revenue decreased by 14.0% to €71.6 million (Q1 2018: €83.2 million), primarily driven by lower aluminium alloy average prices.
EBITDA in the Secondary Aluminium subsegment grew to €2.5 million in Q1 2019 compared with €1.6 million for the same period in 2018, representing an increase of €0.9 million. Similarly, EBIT increased in Q1 2019 by €0.7 million to €0.8 million. The increase in earnings was primarily driven by higher margins due to the upgraded more efficient furnaces which are delivering results as well as aluminium metal margins recovering. These improvements offset the slightly reduced volumes of aluminium alloys produced and salt slags & SPL recycled and the lower prices for aluminium alloys.
A key element of Befesa's business model is its hedging strategy to manage the zinc price volatility and increase the visibility of its earnings and cash flow going forward.
The hedging currently in place provides Befesa with improved pricing visibility through 2019, 2020 and the first half of 2021. The average hedged prices and volumes for each of the periods are as follows:
| Period | Average hedged price (€ / tonne) |
Zinc content hedged (tonnes) |
|---|---|---|
| 2017 | €1,876 | 73,200 |
| 2018 | €2,051 | 92,400 |
| 2019 | €2,325 | 92,400 |
| 2020 | €2,260 | 92,400 |
| H1 2021 | €2,230 | 46,200 |
Befesa will continue its hedging strategy, targeting stability even if foregoing short-term upside from higher zinc prices. Opportunities are constantly being monitored and re-evaluated when closing existing hedges in light of the current zinc market environment. Befesa's strategy is to hedge 60% to 75% of the volume of zinc contained in the Waelz oxide (WOX) for a period of one to four years going forward.
Befesa has hedged for the last 15 years and its hedging strategy has proven to be a key element in improving earnings stability and visibility across different moments in the economic cycle.
Befesa continues to execute its organic growth project roadmap, which will enable the Company to maintain its leadership position in Europe and to expand operations in Turkey, South Korea as well as enter China.
In the Steel Dust Recycling Services business, Befesa is investing in two organic growth projects in Turkey and South Korea during 2019, both of which are on track to be completed within the envisioned timeline. Firstly, Befesa is increasing the capacity of its Turkish plant from 65,000 tonnes per year at present to 110,000 tonnes per year, building on the increased demand for steel dust recycling services. Secondly, Befesa is building a washing plant in South Korea to offer washed WOX to its customers, similar to its European operations. The construction phase for the expansion project in Turkey started in January 2019 with the ramp-up of operations scheduled to start during Q3 2019. The construction of the new WOX washing plant in South Korea started at the end of 2018 with the ramp-up expected to start during Q4 2019.
In the Secondary Aluminium subsegment of the Aluminium Salt Slags Services business, Befesa is executing an operational excellence project to apply the best-in-class furnace technology proven at Befesa's Bernburg plant to its other secondary aluminium production plants in Spain (close to Bilbao and Barcelona). These projects will result in higher efficiencies and unlock capacity to meet additional demand for external salt slags services. The project in Bilbao was successfully completed in H2 2018 delivering positive results in 2019. Regarding the furnace upgrade at the plant in Barcelona, the first phase of this project was concluded in 2018, whereas the second and final phase is scheduled to ramp up during Q3 2019.
In the Salt Slags subsegment of the Aluminium Salt Slags Services business, Befesa is working on expanding the capacity of its existing salt slags recycling plant in Hannover (Germany) by 40,000 tonnes during 2019 and 2020. The improved capacity will help to meet the increase in existing and new customer demand.
In April 2019, Befesa broke ground at the first EAF steel dust recycling plant in China, in the province of Jiangsu. The ramp-up of operations is expected for H2 2020.
Additionally, Befesa signed an agreement with the Changge Dazhou Industrial Cluster in XuChang City in April to develop the first EAF steel dust recycling plant in the Chinese province of Henan. This facility will represent Befesa's second EAF steel dust recycling plant in the country.
Similar to Befesa's first development in the province of Jiangsu, the plant under development in the province of Henan is designed to recycle 110,000 tonnes of EAF steel dust per year. The ground breaking is scheduled for Q4 2019, with the ramp-up of operations expected during H1 2021.
2019 is expected to be a successful year for Befesa with 3% to 5% EBITDA growth to €182 - €185 million (2018 at €176 million), organically funding Befesa's top growth projects including China while keeping the leverage approximately stable at current levels.
Befesa's earnings growth is mainly driven by expected continued high utilisation levels in both core businesses, better hedged zinc prices, the recovery of the Stainless operations as well as the contribution of some of the organic growth projects like the high efficiency aluminium furnaces. The increase in earnings will be partially offset by the increase in zinc treatment charges in 2019 (reference in 2019 of up to around \$245 per tonne; 2018: \$147 per tonne). Befesa expects to keep similar volume levels as in 2018 for the two business units and thus continues its very high utilisation levels.
H2 2019 is expected to be stronger than the first half, mainly due to the plant in Turkey back in operations with increased capacity from Q3 onwards and the continued recovery of the Stainless operations.
Looking at price developments, Befesa expects LME zinc prices to remain at current levels of around \$2,900 per tonne (~average price in April) for the rest of 2019. Considering the actual average prices during Q1 of \$2,700 per tonne, this would translate into around \$2850 per tonne average LME zinc price for the full year 2019.
2019 will also be a key year for the execution and delivery of growth projects across all business units and main geographies in which Befesa operates. The right execution of these projects will secure additional earnings and volume growth for 2020 and beyond.
Combined, all growth initiatives including China translate into a total expansion capex of around €60 million in 2019 which, together with the recurrent maintenance capex of around €25 million, represent a total capex of approximately €85 million in 2019. The high run rate of operating cash flow will fund Befesa's capex and dividend. Befesa expects a balanced total cash flow and leverage ratio similar to current levels for the full year 2019.
(€ thousand)
| 31 March 2019 | 31 December 2018 | |
|---|---|---|
| Goodwill and intangible assets | 422,268 | 422,668 |
| Property, plant and equipment, net | 280,931 | 261,514 |
| Other non-current assets | 3,032 | 46,518 |
| Deferred tax assets | 69,620 | 57,399 |
| Inventories | 46,011 | 46,049 |
| Trade receivables and other current financial assets | 96,677 | 101,325 |
| Cash and cash equivalents | 154,774 | 150,648 |
| Total assets | 1,073,313 | 1,086,121 |
(€ thousand)
| 31 March 2019 | 31 December 2018 | |
|---|---|---|
| Equity of the Parent Company | 285,674 | 333,203 |
| Non-controlling interests | 9,985 | 9,426 |
| Total Equity | 295,659 | 342,629 |
| Provisions | 7,503 | 6,653 |
| Borrowings | 537,883 | 527,498 |
| Trade and other accounts payable | 125,028 | 116,690 |
| Deferred tax liabilities | 50,145 | 65,991 |
| Other liabilities | 57,095 | 26,660 |
| Total liabilities | 777,654 | 743,492 |
| Total equity and liabilities | 1,073,313 | 1,086,121 |
| (€ thousand) | Q1 2019 | Q1 2018 | Change |
|---|---|---|---|
| Revenue | 179,135 | 195,418 | (8.3) % |
| +/- Changes in stocks of finished products and work in progress | 1,903 | (608) | - |
| Procurements | (82,309) | (97,685) | (15.7) % |
| Other operating income | 1,027 | 1,118 | (8.1) % |
| Staff costs | (20,300) | (18,541) | 9.5 % |
| Other operating expenses | (36,446) | (35,160) | 3.7 % |
| Amortisation/depreciation, impairment and provisions | (8,436) | (7,302) | 15.5 % |
| Operating profit (EBIT) | 34,574 | 37,240 | (7.2) % |
| Financial income | 89 | 19 | > 100 % |
| Financial expenses | (4,506) | (5,005) | (10.0) % |
| Net exchange differences | 279 | 578 | (51.7) % |
| Finance income/(loss) | (4,138) | (4,408) | (6.1) % |
| Profit/(loss) before tax | 30,436 | 32,832 | (7.3) % |
| Corporate income tax | (7,472) | (9,702) | (23.0) % |
| Profit/(loss) for the period | 22,964 | 23,130 | (0.7) % |
| Attributable to: | |||
| Shareholders of Befesa S.A. | 22,100 | 21,695 | 1.9 % |
| Non-controlling interests | 864 | 1,435 | (39.8) % |
| Earnings/(losses) per share attributable to shareholders of Befesa S.A. | |||
| (expressed in € per share) | |||
| Basic earnings per share | 0.65 | 0.64 | 1.9 % |
| (€ thousand) | Q1 2019 | Q1 2018 |
|---|---|---|
| Cash flow from operating activities | ||
| Profit / (loss) for the period before tax | 30,436 | 32,832 |
| Adjustments due to: | 13,217 | 11,436 |
| Depreciation and amortisation charge | 8,436 | 7,302 |
| Changes in provisions | 841 | - |
| Interest income | (89) | (19) |
| Finance costs | 4,506 | 5,005 |
| Other profit / (loss) | (198) | (274) |
| Exchange differences | (279) | (578) |
| Change in working capital | (12,932) | (20,798) |
| Trade receivables and other current assets | (14,983) | (24,500) |
| Inventories | 38 | 3,542 |
| Trade payables | 2,013 | 160 |
| Other cash flows from operating activities | (13,101) | (13,559) |
| Interest paid | (8,063) | (3,368) |
| Other payments | - | (5,400) |
| Taxes paid | (5,038) | (4,791) |
| Net cash flows from operating activities (I) | 17,620 | 9,911 |
| Cash flows from investing activities | ||
| Investments in intangible assets | (317) | (697) |
| Investments in property, plant and equipment | (12,800) | (7,138) |
| Collections from disposal of Group and associated companies, net of cash | 14 | - |
| Investments in other current financial assets | (87) | (25) |
| Interests received Net cash flows from investing activities (II) |
- (13,190) |
- (7,860) |
| Cash flows from financing activities | ||
| Cash bank inflows from bank borrowings and other liabilities | - | - |
| Cash bank outflows from bank borrowings and other liabilities | (15) | (511) |
| Dividends paid | - | - |
| Net cash flows from financing activities (III) | (15) | (511) |
| Effect of foreign exchange rate changes on cash and cash equivalents (IV) | (289) | (897) |
| Net increase in cash and cash equivalents (I+II+III+IV) | 4,126 | 643 |
| Cash and cash equivalents at the beginning of the period | 150,648 | 117,582 |
| Cash and cash equivalents at the end of period | 154,774 | 118,225 |
STEEL DUST RECYCLING SERVICES
| Q1 2019 | Q1 2018 | Change | |
|---|---|---|---|
| Key operational data (tonnes, unless specified otherwise) | |||
| Steel dust throughput (i) | 168,968 | 187,822 | (10.0) % |
| Waelz oxide sold | 53,189 | 62,947 | (15.5) % |
| Blended zinc price (€ / tonne) | 2,373 | 2,299 | 3.2 % |
| Total installed capacity (ii) | 780,300 | 780,300 | 0.0 % |
| Utilisation (%) (iii) | 87.8 % | 97.6 % | (9.8) p.p. |
| Key financial data (€ million, unless specified otherwise) | |||
| Revenue | 95.1 | 101.6 | (6.4) % |
| EBITDA | 33.9 | 36.1 | (6.1) % |
| EBITDA margin % | 35.6 % | 35.5 % | 0.1 p.p. |
| EBIT | 29.6 | 32.6 | (9.2) % |
| EBIT margin % | 31.1 % | 32.1 % | (1.0) p.p. |
Salt Slags subsegment
| Q1 2019 | Q1 2018 | Change | |
|---|---|---|---|
| Key operational data (tonnes, unless specified otherwise) | |||
| Salt slags and SPL recycled | 129,095 | 130,985 | (1.4) % |
| Total installed capacity | 630,000 | 630,000 | 0.0 % |
| Utilisation (%) (iv) | 98.8 % | 100.2% | (1.4) p.p. |
| Key financial data (€ million, unless specified otherwise) | |||
| Revenue | 22.3 | 21.9 | 1.9 % |
| EBITDA | 6.4 | 6.6 | (2.4) % |
| EBITDA margin % | 28.7 % | 29.9 % | (1.2) p.p. |
| EBIT | 4.3 | 4.7 | (9.5) % |
| EBIT margin % | 19.1 % | 21.5 % | (2.4) p.p. |
Secondary Aluminium subsegment
| Q1 2019 | Q1 2018 | Change | |
|---|---|---|---|
| Key operational data (tonnes, unless specified otherwise) | |||
| Secondary aluminium alloys produced | 47,965 | 49,609 | (3.3) % |
| Aluminium alloy average market price (€ / tonne) (v) | 1,528 | 1,833 | (16.6) % |
| Total installed capacity | 205,000 | 205,000 | 0.0 % |
| Utilisation (%) (vi) | 94.9 % | 98.1 % | (3.3) p.p. |
| Key financial data (€ million, unless specified otherwise) | |||
| Revenue | 71.6 | 83.2 | (14.0) % |
| EBITDA | 2.5 | 1.6 | 57.3 % |
| EBITDA margin (% over revenue) | 3.5 % | 1.9 % | 1.6 p.p. |
| EBIT | 0.8 | 0.1 | 611.1 % |
| EBIT margin (% over revenue) | 1.1 % | 0.1 % | 0.9 p.p. |
(i) Steel dust throughput does not include stainless steel dust volumes
(ii) Total installed capacity in Steel does not include 174,000 tonnes per year of stainless steel dust recycling capacity
(iii) Utilisation represents crude steel dust processed against annual installed capacity
(iv) Utilisation represents the volume of salt slags and SPL recycled by Befesa's plants against annual installed capacity
(not including the 100,000 tonnes of capacity at Töging, Germany, currently idle)
(v) Aluminium Scrap and Foundry Ingots Aluminium pressure diecasting ingot DIN226/A380 European Metal Bulletin
Free Market Duty paid delivered works
(vi) Utilisation represents the volume of secondary aluminium produced against annual installed capacity
| Wednesday, 19 June 2019 | Annual General Meeting in Luxembourg |
|---|---|
| Thursday, 25 July 2019 |
Publication of H1 2019 interim report & analyst call |
| Thursday, 31 October 2019 | Publication of Q3 2019 statement & analyst 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 in the Investor Relations / Investor's Agenda section of its website www.befesa.com
Director of Investor Relations & Strategy
T: +49 (0) 2102 1001 340
You can find this and other publications online 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 2019 figures contained in this report have not been audited or reviewed by external auditors.
This report includes Alternative Performance Measures (APMs), including EBITDA, EBITDA margin, EBIT, 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 APMs 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 APMs 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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