Befesa (BFSA) Q2 2024 earnings summary

Executive summary

• H1 2024 revenue was €621 million, with adjusted EBITDA up 8.8–9% year-on-year to €103 million, driven by zinc hedging, cost reductions, and favorable treatment charges despite lower zinc prices.

• Q2 2024 revenue rose 10% year-on-year to €323 million, and adjusted EBITDA increased 22–23% to €55 million, reflecting improved hedging and market conditions.

• Operating cash flow in H1 2024 reached €70 million, up 27% year-on-year, supported by higher earnings and normalized working capital.

• Strategic actions included extending debt maturity to July 2029, acquiring the remaining 50% of Recytech for €40 million, and publishing the 2023 ESG report.

• Net profit attributable to shareholders was €20.0 million, nearly unchanged from H1 2023.

Financial highlights

• Adjusted EBITDA for H1 2024 was €103.1 million, up 8.8–9% year-on-year, with Q2 adjusted EBITDA at €54.5–55 million, up 22–23% year-on-year.

• Net debt at the end of H1 2024 was €645.6 million, up 13.9–14% year-on-year, with a net leverage ratio of 3.39x.

• Operating cash flow in H1 2024 was €70–70.4 million, up 27% year-on-year.

• Cash on hand at H1 2024 was €107.9–108 million; total liquidity at €168 million.

• Capex for H1 2024 totaled €49.1–79 million, including maintenance, growth, and the Recytech acquisition.

Outlook and guidance

• 2024 adjusted EBITDA guidance narrowed to €205–235 million, reflecting strong Q2 and expected H2 improvement.

• Capex guidance for 2024 set at €115–125 million, with growth focused on Recytech and Palmerton projects.

• Net leverage expected to fall to ~3.0x by year-end 2024 and ~2.5x mid-term.

• 2025 outlook anticipates further earnings growth from better hedging, volume growth, and improved U.S. operations.

• Working capital reversal anticipated in Q4 2024.