Befesa (BFSA) Q3 2024 earnings summary

Executive summary

• Q3 2024 adjusted EBITDA rose 16% year-over-year to €49 million, with nine-month adjusted EBITDA at €152 million, up 11% year-over-year, and operating cash flow up 39% to €118 million.

• Steel Dust and Salt Slags segments performed strongly in Europe and the US, offsetting weak secondary aluminium margins and challenging steel and auto sectors.

• Strategic focus on deleveraging, with leverage targeted at x3.0 by end-2024 and x2.5 by end-2025, and growth projects prioritized in the US and Germany; China expansion halted.

• Zinc price hedging extended to H1 2026 at favorable levels, supporting earnings visibility and incremental EBITDA in 2025.

• Net profit for 9M 2024 was €25 million, down 9.3% year-over-year, impacted by higher interest costs and one-time refinancing expenses.

Financial highlights

• Q3 2024 revenue was €294 million (+2% YoY); 9M 2024 revenue reached €915 million (+1% YoY).

• 9M 2024 adjusted EBITDA was €152 million (+11% YoY); Q3 adjusted EBITDA €49 million (+16% YoY); operating cash flow for 9M was €118 million (+39% YoY).

• Net leverage at Q3 2024 was x3.36, with net debt at €662 million.

• Dividend of €29 million (€0.73/share) paid in Q3 2024.

• Cash on hand at period end was €86 million; total liquidity over €166 million including undrawn RCF.

Outlook and guidance

• FY2024 adjusted EBITDA is guided at €210–215 million, representing 15–18% year-over-year growth, with Q4 expected to be the strongest quarter.

• 2025 is expected to deliver strong double-digit EBITDA growth, driven by improved zinc hedging, higher US volumes, and cost reductions.

• Leverage targeted to reduce to around x3.0 by year-end 2024 and x2.5 by end of 2025.

• Growth capex focused on Palmerton (US) and Bernburg (Germany) projects; China expansion paused.