Befesa S.A.

Good morning and welcome to the first quarter 2024 results conference call of VEFESA. I am Rafael Pérez, CFO of VEFESA, and today we have with us Javier Molina, Executive Chair of VEFESA, and Asier Zarraonandia, CEO of the company. Javier Molina will start with an executive summary of the first quarter. After that, Asier will explain the business highlights of the period, covering steel dust and aluminum salt slag recycling. I will then review the financials with a focus on prices, cash flow, net-bend, and our heading program. As here, we will close this presentation providing an update on the outlook for 2024, as well as our growth plan over the next five years. Finally, we will open the lines for the Q&A session. Before getting started, let me remind you that this conference call is being webcasted live. You can find the link to the webcast and the first quarter 2024 results presentation on our website, www.defesa.com. Now, let me turn this call over to our chairman. Javier, please.

Thank you, Rafael. During the first quarter of the year, we have continued the quarter-on-quarter improvement that we started in the third quarter of last year. The period has been characterized by solid volumes across all businesses and markets, despite a challenging macroeconomic environment. From the commodity Price point of view, the week average price in the first quarters has been partially compensated with better hedging level combined with a decrease in the thin treatment charge, as we anticipated. Total revenues in the first quarter have been almost 300 million euros and adjusted EBITDA 49 million euros, which represents an increase of 7% compared to previous quarter, showing a positive quarter-on-quarter trend. Comparing with the same quarter of last year, the results have been negatively impacted by the strong decrease in the average sink price in the period of 23%, resulting in a year-on-year decrease of 3%. Asier will explain later in more detail the performance of the steel and aluminum businesses during the first quarter. From the growth point of view, there are three main areas to watch, US, Europe, and China. During this year, our focus will be pretty much on the U.S. on various fronts. On one hand, we are focused on the integration of the U.S. recycling operations to capture the operational synergies, which we expect to consolidate along the year and contribute to increase earnings. Regarding the seam refining plant in North Carolina, we expect this year still to be a ramp-up year and to improve the performance gradually. The focus now is on reducing the cost base. Also in the U.S., we continue the refurbishment works of the plant in Palmerton, Pennsylvania, which will enable us to capture the growth that we are seeing in the U.S. on steel dust recycling over the next two years. In China, the first quarter has continued to suffer weak steel production from our customers. In this environment, regarding the third plant in the province of Guangdong, we continue to focus on getting steel dust supply agreements with local producers to have certainty of supply before starting the construction of the plant. In Europe, we are progressing on getting the permits and the commercial contracts for the expansion of the secondary aluminium plant in Berlin, Germany. With regard to the outlook for the full year 2024, we expect solid growth of EBITDA in the range of 195 million to €235 million, which represents between 7% to 29% year-on-year growth, compared to the 2023 level of €182 million. Asier will provide more details about how we see the guidance range and the different moving parts that drive our view for the year. We continue to be very optimistic about the mid-term outlook of BFESA over the coming years. We have a well-defined growth plan based on strong market fundamentals like the decarbonization megatrend, which represent a great market opportunity in our steel dust and aluminum recycling businesses. We have a growth plan which is well diversified across regions and markets, which provides us the flexibility to move at different speeds depending on the dynamics that we see in each market. As we explained in the past, we can module the speed of the investment depending on the different dynamics that we see in the different markets. As such, we are adopting the execution of our growth strategy to the current situation in China. Now, Asier will explain the business performance in more detail.

Thank you, Javier.