Befesa (BFSA) Q1 2025 earnings summary

Executive summary

• Q1 2025 adjusted EBITDA rose 15% year-over-year to €56 million, with net income and EPS up 97%, driven by higher zinc prices and cost controls, despite lower volumes from maintenance and weaker aluminium performance.

• Revenue reached €308 million, a 3% increase year-over-year, and operating cash flow surged 134% to €34 million.

• Leverage improved to 2.78x, with a target below 2.5x by year-end 2025, and a continued focus on deleveraging and disciplined capital allocation.

• Palmerton and Bernburg expansions are progressing as planned, while China expansion is paused due to market conditions.

Financial highlights

• Steel dust segment achieved €49.2 million adjusted EBITDA, up 37% year-over-year, with margin rising to 25%.

• Aluminum salt slag EBITDA was €7 million, down 29% year-over-year, mainly due to lower metal margins and higher energy costs; utilization at 93%.

• Secondary aluminum EBITDA fell 43% to €1.6 million, impacted by weak auto demand and higher energy costs.

• Cash on hand at quarter-end was €105 million, with total liquidity exceeding €200 million.

• Capex for Q1 2025 was €15.8–18.1 million, down 8.7% year-over-year.

Outlook and guidance

• Full-year 2025 EBITDA expected between €240 million and €265 million, representing 13–24% growth year-over-year.

• EPS for 2025 expected to exceed €1.8, with strong free cash flow generation.

• Net leverage targeted below 2.5x by year-end; total CapEx for 2025 to remain below €100 million.

• Growth CapEx focused on Palmerton and Bernburg projects; China expansion paused.

• Earnings to benefit from lower zinc treatment charges and improved hedging.