présentation powerpoint - derichebourg

1

PRESENTATION

MAY 20TH, 2021

HALF – YEAR RESULTS

2

DISCLAIMER

The material contained in this document presents Derichebourg’s current business activities as of May 20th, 2021. It is provided in summary form and does not purport to be complete. It should be read in conjunction with the Group’s periodic reporting, registration document, and other announcements lodged with the Autorité des Marchés Financiers. Additional information about factors which may impact Group’s results are contained in the registration document, which is available on www.derichebourg.com and which can also be requested from the company.

To the extent that this document may contain forward-looking statements, such statements are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control and which may cause actual results to differ materially from those expressed in the statements contained in this release.

This document is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation, or needs of any particular investor.

3

TABLE OF CONTENTS

1.Key Take-out message

2.Focus on H1 2020-2021 results

3.Outlook

4.Calendar – Next steps

5.ECORE ACQUISITION

4

KEY TAKE-OUT MESSAGE

5

KEY CONSIDERATIONS IN H1 2021

KEY TAKE-OUT MESSAGE H1 2020-2021 RESULTS OUTLOOK OUTLOOK ECORE ACQUISITION

Environmental Services – Recycling

Very strong financial performance in H1, due to :

- Higher volumes

- Higher margins

- Stable cost base

- Spain contribution beyond expectations

Services Activites :

Resilient and improving performance in services activities (Public Sector Services and Multiservices)

Deleveraging in H1 (-20 M€ net Debt), which should accelerate in H2

Signing of Ecore Acquisition

6

FOCUS ON H1 2020-2021 RESULTS

7

SIGNIFICANT IMPROVEMENT IN EBIT : + 176%

Source: Derichebourg

Consolidated financial statments Group

KEY TAKE-OUT MESSAGE H1 2020-2021 RESULTS OUTLOOK CALENDAR ECORE ACQUISITION

in millions of euros H1 2021 H1 2020 Var. Var.%

Turnover 1 649,9 1 302,3 + 348 + 27%

Current EBITDA 172,6 91,5 +81 +89%as a % to sales 10,5% 7,0%

Current EBIT 112,3 33,4 + 79 +237%as a % to sales 6,8% 2,6%

Turkey - Disposal subsidiary (0,3)

Spain - LYRSA restructuration (0,3)

France - Litigation with Veolia / Poly

Environnement3,7

Spain - Change of consolidation method /

Reyfra7,7

Italy - Result of disposal AEP MULTISERVIZI (2,3)

Cleaning – end of a litigation on social charges 2,9

others 0,3

EBIT 115,5 41,9 +74 +176%

Net income 74,7 23,1 +52 +224%

attributable to shareholders 73,6 22,4

attributable to minority interests 1,1 0,7

Comments

Environmental Services – Recycling

Ferrous scrap volumes have sharply increased driven by (i) a strong demand for ferrous scrap over the period, (ii) a strong use of EAF, in the context of some blast furnaces that have not reopened yet following Covid (EAF being more flexible), (iii) a strong demand from Turkey and (iv) a favourable comparison effect vs N-1 (that was hit by lower prices and 1st lockdown)

Non ferrous metals volumes recorded were even in Europe, due to suppliers focusing more on ferrous scrap, and decreasing in USA

Unit margins have improved significantly both for ferrous and non ferrous metals in a context of price increases

Derichebourg España was also an excellent contributor (€24m EBITDA over H1), testifying the group’s capacity to integrate targets

Opex: production expenses remained stable

Environmental Services – Services to Municipalities: have remained a recurring stream of revenues and profitability for the Group

Multiservices

Excellent dynamic for the Cleaning business (+18% in France, +16% in Spain-Portugal), driven by an organic growth and needs from clients in the Covid context

Decrease in revenue for the Temporary Work business (aero). Aero Services in France at breakeven point, which is very satisfactory in a challenging environment (-40% revenue)

8

ENVIRONMENTAL SERVICES : BENEFITED FROM RECOVERY IN WORLDWIDE ECONOMY


Recycling

+20,8% volumes in ferrous scrap sold (+14% at constant scope)

+8,2% volumes in non ferrous metals (-10% at constant scope, with +1% in Europe and – 30% in the USA)

Profitability was impacted by improvement of unit margins vs prior year : + 41,6 M€ (excl Spain)

Good performance of Aluminium post shredder activities (floating, refining)

Exit of lockdown and economic recovery created shortages in primary goods logistic chain which led to prices increases

We believe that a shift towards more demand in recycled materials is currently taking place, and that demand for recycled materials will remain high in the future as recycling contributes to mitigate climate warming compared to use of raw materials : even BOF want to increase their input of ferrous scrap into converters in order to reduce greenhouse gas emissions

Services to municipalities

Stable revenue. At constant scope, increase by 8%

Financial profitability remains best in class in France, and improves significantly in Canada in the context of contracts renewals

Environmental Services



Turnover 1 220,3 857,6 +363 +42%

Current EBITDA 153,3 70,7 +83 +117%as a % to sales 12,6% 8,2%

Current EBIT 107,1 26,6 +80 +302%as a % to sales 8,8% 3,1%

Spain - LYRSA restructuration (0,3)

France - Litigation with Veolia / Poly

Environnement3,7

Spain - Change of consolidation method /

Reyfra7,7

Italy - Result of disposal AEP MULTISERVIZI (2,3)

Others 0,9

EBIT 108,0 35,4 +73 +205%

Comments

9

DYNAMIC METAL RECYCLING MARKET DRIVEN BY STRONG STRUCTURAL AND REGULATORY TRENDS

Environmental Services - Recycling


1864

1273 1144

627 1056

~1900 Mt~2200 Mt

2020 2030 - EIA 2050 - EIA

Primary Recycling

Demand for Steel has been increasing…(1)

+18%

EAF – the main technology in steel recycling

(1) Source: Carbon 4 (2) Source: IEA 2°C Scenario (3) Source: Accenture – 2017 forecast

… and it is expected to continue (2)

25% 29% 33% 36% 39%

75% 70% 67% 64% 61%

2015 2020 2025 2030 2035

EAF BOF

EAF share in global production will continue to increase(3)

Electric Arc Furnace (EAF) is the modern methodology of steelproduction that relies on recycled scrap metal as its primaryfeedstock and uses graphite electrodes in the furnace

Basic Oxygen Furnace (BOF) is the traditional technology ofsteel production using the raw materials (Iron ore and coke.BOF still remains the preferred technology for high-quality steel

EAF share in the global steel production is increasing given itscompetitive advantages including high efficiency andflexibility as well as reducing the CO2 emission by up to 75%

880 1083 1220 1212 1246 1331 1327357

454 429 407 484 538 52812371537 1649 1619 1730 1869 1864

2009 2011 2013 2015 2017 2019 2020Other than EAF EAF

10

COMMODITY PRICES



Steel and Aluminum prices increase significantly in the first months of 2021

Copper closes to 2011 record price

$ 4 000

$ 4 500

$ 5 000

$ 5 500

$ 6 000

$ 6 500

$ 7 000

$ 7 500

$ 8 000

Fe

b

Ma

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2018 2019 2020 2021

Copper LME Settlement ($) Copper (€)

1200

1400

1600

1800

2000

2200

2400

Feb

-18

Ma

r-1

8

Ap

r-1

8

Ma

y-1

8

Jun

-18

Jul-1

8

Au

g-1

8

Se

p-1

8

Oc

t-1

8

No

v-1

8

De

c-1

8

Jan

-19

Feb

-19

Ma

r-1

9

Ap

r-1

9

Ma

y-1

9

Jun

-19

Jul-1

9

Au

g-1

9

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p-1

9

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t-1

9

No

v-1

9

De

c-1

9

Jan

-20

Feb

-20

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r-2

0

Ap

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0

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y-2

0

Jun

-20

Jul-2

0

Au

g-2

0

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Oc

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0

No

v-2

0

De

c-2

0

Jan

-21

Feb

-21

Ma

r-2

1

Aluminium LME Settlement ($/ton) Aluminium Metal Bulletin (€/ton)

$ 8 000$ 9 000

$ 10 000$ 11 000$ 12 000$ 13 000$ 14 000$ 15 000$ 16 000$ 17 000$ 18 000$ 19 000

Feb

Ma

r

Ap

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Ma

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Jun

Jul

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Jul

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Se

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No

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De

c

Jan

Feb

Ma

r

2018 2019 2020 2021

Nickel LME Settlement ($) Nickel (€)

130 €

180 €

230 €

280 €

330 €

Feb

ma

r

Ap

r

Ma

y

Jun

Jul

Au

g

Se

p

oc

t

no

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De

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jan

Feb

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Jul

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Feb

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jan

Feb

ma

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2018 2019 2020 2021

E40 ex 33 (Shredding Product) - €

11

COMBINED INCREASE IN VOLUMES IN FERROUS SCRAP AND IN NON FERROUS METALS



Volume (in

thousands of

tons)

H1 2021 H1 2020

Yards Trading Total Yards Trading Total

Ferrous scrap 1 851,0 147,3 1 998,3 1 492,5 162,3 1 654,8

Non ferrous 317,0 5,0 322,1 290,1 7,6 297,7

Total volume 2 168,0 152,4 2 320,4 1 782,6 169,9 1 952,5

Revenue (in €M)

H1 2021 H1 2020


Ferrous scrap 538,3 40,5 578,7 326,3 34,4 361,0

Non ferrous 505,6 0,0 505,6 368,6 0,0 368,7

Services 135,9 0,0 135,9 128,0 0,0 128,0

Total 1 117,8 40,5 1 220,3 822,9 34,4 857,6

1 493

162

1 655

290

8

298

1 851

147

1 998

317

5

322


Ferrous scrap Non ferrous

YTD20 YTD21

+24% -9% +21% +9% -34% +8%

12

SATISFACTORY DEVELOPMENTS IN HOUSEHOLD WASTECOLLECTION SERVICES ACTIVITY

150 M€ yearly revenue, mostly in France, and in Canada

Canada : Renewal of the legacy contracts of the company in Montreal, with improved financial conditions

Gain of new contracts in Normandy (starting April 1st, 2021) with a yearly revenue of 10 M€, with a high level of innovation: natural gas and hybrid devices

From a financial standpoint, best half-year ever in this activity : benefits from its selective strategy in tendering only on contracts which prize technical innovation, quality of services, and not only price



Key figures and locations

16 sites 1.2k trucks 1,500 kT

1.7k FTEs 60 contracts5-7 year contracts

Comments

13

DEVELOPMENTS IN SERVICES ACTIVITY

Increase by 45% in RecylingGross income.

Increase by 10% in Recylingexpenses.

Increase by 347% in recycling EBITDA.

1

2

3



1

2

3


In €MH1 2021 H1 2020 Var.

*Rec. PSS Total Env. Rec. PSS Total Env. Rec. PSS Total Env.

Gross margin ferrous & NFM

241,1 0,0 241,1 155,5 0,0 155,5 85,6 0,0 85,6

Gross margin others 1,5 0,0 1,5 (0,6) 0,0 (0,6) 2,1 0,0 2,1

Services 63,2 72,7 135,9 56,2 71,7 128,0 7,0 1,0 7,0

Gross income 305,7 72,7 378,4 211,1 71,7 282,8 94,7 1,0 95,7

Expenses (166,8) (58,4) (225,2) (151,9) (60,2) (212,1) (14,9) 1,8 (13,1)

Current EBITDA 138,9 14,3 153,3 59,2 11,5 70,7 79,8 2,8 82,6

Amortization (38,7) (7,4) (46,1) (36,8) (7,3) (44,1) (1,9) (0,1) (2,0)

Current EBIT 100,2 6,9 107,1 22,4 4,2 26,6 77,9 2,7 80,6

- Rec : Recycling - PSS : Public Sector Services - HWC: House Waste Collection

Comments

Lyrsa (Derichebourg España is accounted for 3 months in 2020 and 6 months in 2021)

14

ENVIRONMENTAL SERVICES EBITDA BRIDGE




Gross Margin = + 61 M€ (excl. Dbg España)

RECYCLING activity HWC activity

15

H1 2021 - FINANCIAL HIGHLIGHTS MULTISERVICES


Multiservices



Turnover 429,2 444,4 (15,2) (3,4%)

Current EBITDA 24,0 22,3 1,7 +7,7%as a % to sales 5,6% 5,0%

Current EBIT 11,6 9,7 1,9 +19,1%as a % to sales 2,7% 2,2%

Turkey - Disposal subsidiary (0,3)

EBIT 11,6 9,4 2,2 +22,8%

Breakdown of revenue

5%

73%

10%

12%

TERTIARY INDUSTRY

HR & INTERIMURBAN AREA

Breakdown of EBITDA

8%

85%

6%

1%

TERTIARY INDUSTRY

HR & INTERIMURBAN AREA

16

H1 2021 FINANCIAL HIGHLIGHTS MULTISERVICES : INCREASE IN CLEANING, AND DECREASE IN MOST OF OTHER BUSINESSES

Multiservices


Change in revenue

Change in EBITDA

Tertiary solutions : Improvement by 25% in EBITDA, linked to

revenue increase in Cleaning services, mainly in France

Industry : EBITDA is positive, and stands by 1,6 M€, which is

a good performance in this context. Long-term partial

activity makes it possible to adapt to all in turnover

Sourcing RH : Decrease in EBITDA is due to Aeronautics

Temporary work, whose size has become below critical.

Combination of both companies in progress in order to

make savings

Urban Maintenance : protective contract in case of

decrease in revenue

Tertiary Solutions : increase by 14,3% (Cleaning France :

+18%, Cleaning Spain-Portugal : + 16%) : mix of organic

growth and additional services in the context of a need

for secure working environments for customers' employees.

Electricity & HVAC : +4%.

Industry Solutions: Decrease by 39% in Revenue, mainly

due to low activity in Aeronautics since March 2020.

Sourcing RH : Decrease by 32% in revenue : -4% for

Generalist Temporary work but -61% for Aeronautics

Temporary Work.

Urban Maintenance : revenues decrease by 12%. Less

billboard services but more street lighting services

in M

€


218,5 233,7 247,0 273,2 312,2

77,1 73,6 74,267,2

40,876,9 69,4 73,7 77,4 52,918,2 20,8 23,826,5 23,4

390,6 397,4 418,7 444,4 429,2

YTD17 YTD18 YTD19 YTD20 YTD21

TERTIARY INDUSTRY SOURCING HR URBAN

8,0 10,2 8,9

16,320,44,5 2,5 2,8

3,11,6

0,7 1,8 2,0

2,00,2

- 0,6

0,2

- 0,2

0,8 1,8

12,514,7 13,5

22,3 24,0

YTD17 YTD18 YTD19 YTD20 YTD21

TERTIARY INDUSTRY SOURCING HR URBAN


in M

€

17

H1 2021 FINANCIAL HIGHLIGHTS HOLDING


in millions of euros H1 2021 H1 2020 Var.

Turnover 0,4 0,4 0,1

Current EBITDA (4,6) (1,5) (3,1)

n.a n.a

Current EBIT (6,3) (3,0) (3,4)

n.a n.a

Cleaning – end of a litigation on social charges 2,9

Others (0,6)

EBIT (4,0) (3,0) (1,1)

Holding


18

A STRONG BALANCE SHEET

Source: Derichebourg Source: Derichebourg

Balance Sheet


in M€ 2021.03 2020.09 Var.

Non current assets 1010 994 16

Net deferred tax assets 10 8 2

Working capital requirement 11 (45) 57

Financ. Instr, assets held for sale, and others 0 0 0

Total assets 1031 957 740

Equity 600 524 75

Provisions for risks and charges 87 89 (1)

Net financial indebtedness 321 341 (21)

Financ. Instr, liabheld for sale, and others 1 2 (1)

Net tax position 23 1 22

Total liabilities 1 031 957 74

Goodwill 261 261 0

Right of use assets 203 190 13

Intangible assets 7 7 (1)

Tangible assets 497 499 (2)

Financial assets 42 38 4

Total non-current assets 1 010 994 16

524

600

0,65

0,53

-

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

5,0

-

100

200

300

400

500

600

700

800

900

1 000

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21

Equity, Net debt et Gearing

Equity (Book Value) Net financial debt Gearing (D/E)

19

DEBT FLOWS - CHANGE IN NET DEBT FROM SEPT20 TO MAR21


Leverage Debt/EBITDA : 1,22

March 2021

Bridge of net debt (€m)

Over H1 2021, EBITDA generationhad a strong positive impactpartially offset by WC variationand capex

The change in working capitaloutflows is explained by priceincreases and also someseasonality effect. Over H1 2021,the increase in prices had alimited impact, but it is to benoted that in H1, WCR is usuallycharacterized by higher levels(then normalized in August-September when the activity islower)

Capex + IFRS 16 represented c.44% of EBITDA, lower than theguidance in a context of strongdemand for metals (and highEBITDA)

Comments

Balance Sheet


Gearing debt /equity : 0,53

59

17,4

20

EBITDA REINVESTMENT RATE IS WELL BELOW 50% IN H1 2021

Over H1, the group meets its objective to have CAPEX below 50% from EBITDA

CAPEX amount is impacted by CAPEX froze during COVID lockdown last year

Completion of a new post-shredding line in Coulombiers

Spain : updating of assets to group standards

New trucks acquired in Canada

Focus on capex in €m Comments

Balance Sheet



172,6

EBITDA

59,0

CAPEX

36%44%

EBITDA & Capex (excl non-

recurring) relation

Excl. IFRS 16

17,4New leases (ifrs16)

21

SOURCES OF FINANCING – CREDIT LINES AS OF MARCH 31ST 2021 –VERY GOOD LIQUIDITY


Balance Sheet


210 210 210

100

100

130

130 130

300

296

47

114

104

104

10

146

146

146

58

58

58

141

-378 -378

520

1 204

570

321630

Outstanding as of March 2021 Used as of March 2021 Debt as of March 2021 Liquidity headroom as of March 2021

Term Loan March 2020 RCF March 2020 BEI loan Factoring Bilateral Term Loans Financial leases IFRS 16 Rights of use IFRS 16 vs IAS 17 Overdrafts (mostly uncommitted) Others Total

22

SOURCES OF FINANCING – MATURITY OF CREDIT LINES


Balance Sheet


Legal approach for :

Overdrafts : most of them are uncommited but have not been cancelled in the past

Term Loan 2020 and RCF 2020, whose 1+1 extension periodshave not been taken intoaccount

Comments

210 210 180 150 120

100 100100

100100

130 130117

10491

78 65

300 300300

114 100

75

53

23

14 9

146129

96

68

42

2311

5959

59

59

59

5959

141

1204

1031

931

537

439

178148

0

200

400

600

800

1000

1200

1400

Outstanding as ofMarch 2021

30/09/2021 30/09/2022 30/09/2023 30/09/2024 30/09/2025 30/09/2026

Term Loan March 2020 RCF March 2020 BEI loan

Factoring Bilateral Term Loans Financial leases IFRS 16

Rights of use IFRS 16 vs IAS 17 Overdrafts (mostly uncommitted) Others

Total

23

OUTLOOK

24

SHORT TERM OUTLOOK

Good market conditions should last over H2, with highcommodities prices

Strong Chinese steel demand going forward. Effective May 1st,2021 Chinese government removed duties on steel and scrapimports

CAPEX to launch at the end of H2 or beginning of 2022 :

Increase in WEEE treatment capacity

Additional lead ingots production

Continuous growth trend in Services (both Public Sector Servicesand Multiservices)


25

ECORE IS THE #2 IN FRANCE AND ACTIVE ACROSS THE ENTIRE VALUE CHAIN OF METAL RECYCLING


France #2 player with a global presence … … with a strong & diversified asset base

82 sites (68

collection)252 trucks 2.3 MT

1.3K FTEs 500+ clientsLong-term

relationships

6 shredders 46 shears 267 cranes

Anti Trust Process

2

France

Belgium(2 sites)

Netherlands(1 site)

Switzerland(1 site)

Hungary(4 sites)

Romania(2 sites)

Luxemburg(1 site)

The pre-notification file for the proposed acquisition of Ecore is currently being reviewed by the relevant merger control authorities.

26

Continue to provide non-relocatable jobs

Lower CAPEX

RECYCLING IS AN EASY PART OF THE TOOLS TO FIGHT AGAINST GLOBAL WARMING AS THE GLOBAL IRON AND STEEL INDUSTRY ACCOUNTS FOR APPROXIMATELY 5% OF

TOTAL GLOBAL CO2 EMISSIONS, MAINLY CAUSED BY BLAST FURNACES

The recycling industry has become an integral part of

our modern society for the social & economic impact it

generates and its essential role for the future of our planet.

The use of recycled materials results in:

Less natural resources used

Less energy consumption and CO2 emissions compared

to production processes using virgin materials


27

METAL RECYCLING GENERATES SIGNIFICANT ENERGY SAVINGS

48%of world steel production is made from scrap (excluding China)

58%reduction in CO2 emissions by producing steel from scrap

75%of aluminum produced since the 1880s is still in circulation today

22,5million tons

Concretely… by using recycled materials, how much do we save?

of equivalent CO2 avoided per year in

France thanks to recycling companies


28

CALENDAR – NEXT STEP

29

CALENDAR – NEXT STEP


Annual General Meeting of Shareholders

FY 20/21 – Results

January 27th , 2022

December 7th, 2021

30

PRESENTATION

MAY 20TH, 2021

HALF – YEAR RESULTS

présentation powerpoint - derichebourg

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