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Befesa S.A.: Befesa sees beginning of moderate recovery in Q3 2020

DGAP-News: Befesa S.A. / Key word(s): Quarter Results Befesa S.A.: Befesa sees beginning of moderate recovery in Q3 2020 29.10.2020 / 08:30 The issuer is solely responsible for the content of this announcement. PRESS AND INVESTOR ANNOUNCEMENT

Third quarter 2020 results

Befesa sees beginning of moderate recovery in Q3 2020

• Q3 2020 EBITDA at €29m, slightly above market expectations; 9M 2020 EBITDA at €85m
• Continued quarter-on-quarter (QoQ) recovery following COVID-19 induced low of €22m EBITDA in Q2; zinc and aluminium price up
• Q4 results expected to be better than Q3, indicating around mid-point of FY EBITDA guidance range of €100m to €135m
• Hedge book extended to April 2022, providing increased earnings and cash flow visibility
• Continued strong liquidity at €183m including stable €108m cash on hand
• China expansion progressing as planned; Construction of the first plant in the Jiangsu province expected to be completed in Q1 2021 and the second plant in the Henan province after the summer of 2021

Luxembourg, 29 October 2020 - Befesa S.A. ("Befesa"), the European market leader for steel dust and aluminium salt slags recycling services, has started to see a moderate recovery in Q3 2020, with EBITDA reaching €29m, slightly above market expectations. While 21% lower than in the prior year period, this represents a QoQ improvement of 35%, showing a recovery trend. For the 9M 2020 period, Befesa's EBITDA came in at €85m, down 28% YoY primarily due to the COVID-19 related pressure on metal prices.

Main operational highlights in Q3:

• Q3 steel dust throughput of 161 kt, down 6% YoY due to COVID-19 constraints; Aluminium Salt Slags & SPL volume of 103 kt, down 9%; Secondary Aluminium at 44 kt up +14% YoY driven by the recovery of the automotive sector and the upgraded furnace at the Barcelona plant
• Resilient plant utilization of around 80% in both core businesses, Steel Dust and Salt Slags
• Zinc market prices averaged at €1,997/t in Q3 (down 5% YoY), aluminium alloy prices at €1,312/t (down 3% YoY)

Befesa's expansion works in China continued to progress on schedule in Q3, with the construction of the first two state-of-the-art EAF steel dust recycling plants expected to be completed during the first quarter of 2021 and after the summer of 2021, respectively.