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 up 11% to €152 million, and revenue up 1.2% to €915 million, despite weak steel and auto sectors.

• Operating cash flow increased 39% year-over-year to €118 million for 9M 2024, with Q3 up 62% to €48 million, driven by strong cash conversion.

• Steel dust and salt slag recycling segments performed strongly in Europe and the US, offsetting weak secondary aluminum margins.

• Strategic focus remains on deleveraging and growth projects, with leverage targeted at x3.0 by end-2024 and x2.5 by end-2025.

• Zinc price hedging extended to H1 2026 at favorable prices, enhancing earnings visibility.

Financial highlights

• Steel Dust segment delivered €122 million adjusted EBITDA in 9M 2024 (+19% YoY), with margin improvement to 20%.

• Salt Slags EBITDA was €25.4 million (+34% YoY), with 32% margin; secondary aluminum EBITDA fell 70% to €5.0 million due to weak auto sector.

• Net profit attributable to shareholders for 9M 2024 was €25 million (-9.3% YoY); Q3 net profit €5 million (-32.2% YoY).

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

• Total capex for 9M 2024 was €105 million; full-year capex expected at €120 million.

Outlook and guidance

• FY2024 adjusted EBITDA expected at €210–€215 million, representing 15–18% growth year-over-year, with strong Q4 anticipated.

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

• 2025 outlook anticipates strong double-digit EBITDA growth, driven by improved hedging, higher US volumes, and cost reductions.

• Growth capex focused on Palmerton (US) and Bernburg (Germany) projects; China expansion halted due to market conditions.