Business Update

2022

Post Capital Markets Day

January 2023

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; 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 its 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 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.

Third quarter and first nine-month period 2022 figures contained in this presentation have not been audited or reviewed by external auditors.

This presentation includes Alternative Performance Measures (APM), 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 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.

2 Business Update - Post Capital Markets Day

Electric arc furnace steel dust (EAFD) recycling plant at Asúa-Erandio, Spain

01Business update

Executive summary

  • Continuing solid yoy EBITDA growth: Q3 +8%, 9M +20%
    • Q3 at €46m, +8% / +€3m yoy;
    • 9M at €164m +20% / +€27m yoy; LTM at €225m
  • Metal prices decreased QoQ with recessionary & lower China market sentiment
    - although - energy inflation continued at high levels;
    Q3 YTD inflation compensated with higher metal prices
  • FY'22 guidance: confirmed at lower end, ≥ €220m EBITDA, +11% yoy, due to higher energy prices & China Zero COVID policy
  • €50m or €1.25 per share dividend distributed; 50% of FY'21 net profit
  • US zinc refining asset acquired 30 Sep'22
    • Paid $47m in cash, c.5x adj. EBITDA multiple, for >$500m asset;
    • Opportunity to improve further, post current high inflation environment;
    • WOX + Solvent extraction = "Green zinc"
  • Sustainable Global Growth Plan (SGGP) for next 5 years presented in the CMD
    • Investing €410-450mto target double-digit earnings growth
    • Globally balanced expansion: 1/3 Asia/China, US & Europe

4 Business Update - Post Capital Markets Day

9M & Q3 2022 business highlights

Steel Dust

Alu Salt Slags

• EAFD throughput:

•

Salt slags volumes / normalised for Hanover:

898 kt 9M, +59% yoy;

240 kt 9M, -21% /+9% yoy;

268 kt Q3, +20% yoy

67 kt Q3, -38% /-9% yoy;

• Plant utilisation: 77% 9M, 68% Q3;

•

2nd aluminium alloys:

Lower EU volume

122 kt 9M, -14% yoy;

(seasonal maintenance overhauls)

37 kt Q3, -13% yoy

    • Plant utilisation: 71% 9M, 59% Q3 100%, 83% normalised
  • Zinc blended prices: 9M +18%, Q3 +17% • Hanover fully recovered & operational since Jan'23

• EBITDA at €131m 9M, +28% yoy;

•

Alu FMB prices: 9M +25%, Q3 +16%

€36m Q3, +7% yoy

•

EBITDA at €34m 9M, flat yoy;

€11m Q3, +14% yoy

US

  • Operations delivering as expected
  • Driving progress on integration
    and related synergies, incl. zinc refining asset acquired on 30 Sep
  • Preparing Palmerton plant refurbishment

China

  • Managing challenging continued COVID restrictions
  • Jiangsu: In commercial production; Contracted >80% volumes, but COVID constrained
  • Henan: Commissioning finalised in Q4
  • Working on new projects / further expansion

5 Business Update - Post Capital Markets Day

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Befesa SA published this content on 10 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 January 2023 09:40:01 UTC.