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Befesa S.A. (DE:BFSA)
XETRA:BFSA
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Befesa S.A.
(XETRA:BFSA)
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Select Model
Rating:72Outperform
Price Target:
€33.00
▲(14.98% Upside)
Befesa S.A.'s overall stock score reflects strong financial performance and successful expansion projects, particularly in the U.S. market. The company's valuation is reasonable, and the earnings call provided positive guidance. However, operational challenges in Europe and China, along with a negative EBIT margin, temper the outlook.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong demand for Befesa's recycling services, supporting long-term business stability and expansion.
U.S. Market Expansion
Successful expansion in the U.S. enhances Befesa's market presence, providing a strategic advantage in a growing market for recycling services.
Cash Generation
Strong EBITDA margins reflect Befesa's ability to generate cash efficiently, ensuring financial flexibility and supporting future investments.
Negative Factors
Negative EBIT Margin
A negative EBIT margin suggests operational inefficiencies that could hinder profitability and require strategic adjustments to improve margins.
Challenges in Europe
Weak European steel production impacts Befesa's recycling operations, potentially reducing revenue from this key region and necessitating market adaptation.
Challenges in China
Continued low utilization in China reflects market weakness, limiting growth opportunities and affecting overall profitability in the region.
Befesa S.A. (BFSA) vs. iShares MSCI Germany ETF (EWG)
Market Cap
€1.15B
Dividend Yield2.19%
Average Volume (3M)62.78K
Price to Earnings (P/E)13.2
Beta (1Y)1.10
Revenue Growth2.80%
EPS Growth22.69%
CountryDE
Employees1,835
SectorIndustrials
Sector Strength72
IndustryWaste Management
Share Statistics
EPS (TTM)0.23
Shares Outstanding39,999,996
10 Day Avg. Volume72,927
30 Day Avg. Volume62,780
Financial Highlights & Ratios
PEG Ratio-1.32
Price to Book (P/B)1.00
Price to Sales (P/S)0.67
P/FCF Ratio7.33
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€36.30Price Target Upside26.48% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Befesa S.A. Business Overview & Revenue Model
Company DescriptionBefesa S.A. provides environmental recycling services to the steel and aluminum industries in European, Asian, and North American markets. It operates through two segments, Steel Dust Recycling Services and Aluminium Salt Slags Recycling Services. The Steel Dust Recycling Services segment collects and recycles steel dust and other steel residues generated in the production of crude, stainless, and galvanized steel. The Aluminium Salt Slags Recycling Services segment recycles salt slags; spent pot linings, a hazardous residue generated by primary aluminum producers; and recovers and sells salt, aluminum concentrate, and aluminum oxides. This segment also collects and recycles aluminum scrap and other aluminum residues, such as aluminum dross, shavings, and cuttings; and produces secondary aluminum alloys for automotive and construction industries. The company also offers logistics and waelz oxide treatment services; develops projects and technology; and operates as a marketing company. Befesa S.A. was founded in 1987 and is based in Luxembourg City, Luxembourg.
How the Company Makes MoneyBefesa generates revenue through multiple streams, primarily from its recycling services in the steel and aluminum sectors. The company earns money by processing and recycling steel dust and aluminum scrap, transforming these materials into high-quality secondary raw materials that can be sold back to the market. Key revenue streams include sales from recycled aluminum and steel products, service fees for waste management, and long-term contracts with major industrial clients. Additionally, Befesa benefits from partnerships with steel and aluminum producers, allowing them to secure a stable supply of recyclable materials. Factors contributing to its earnings include rising demand for sustainable materials, regulatory pressures on waste management, and the company's ability to innovate in the recycling processes to improve efficiency and cost-effectiveness.
Befesa S.A. Earnings Call Summary
Earnings Call Date:Oct 30, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 26, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted strong financial performance and successful project completions, particularly in the U.S. market. However, challenges remain in the secondary aluminum business and in China, with weak European steel production also noted. While the company is optimistic about the future, particularly with the Palmerton and Bernburg expansions, the current market conditions present significant challenges.Q3-2025 Updates
Positive Updates
Strong Financial Performance
Adjusted EBITDA for the first 9 months of 2025 reached EUR 174 million, up 15% year-on-year. EBITDA margin improved to 21.3% in Q3 2025 from 16.6% last year. EPS rose 143% year-on-year to EUR 1.52.
Successful Projects and Expansion
The Palmerton expansion project in the U.S. was successfully completed, and both kilns are now fully operational. The Bernburg expansion project is progressing with construction started in August 2025.
Strong U.S. Market Performance
In the U.S., steel production increased by 4% year-on-year in Q3, with the U.S. plants operating at an 80% load factor. The Palmerton plant is fully operational, expecting to capture growth in the U.S. EAF steel dust market.
Negative Updates
Challenges in Secondary Aluminium Business
The European secondary aluminum industry faces tight metal margins and limited production activity due to a weak automotive sector. EBITDA for the Aluminum Salt Slag segment decreased by 26% year-on-year.
Weak European Steel Production
European steel production in Q3 2025 was down 4% year-on-year due to weak manufacturing activity and soft demand in the automotive and construction sectors.
Continued Challenges in China
Operations in China continued at low utilization levels with earnings around breakeven, reflecting ongoing market weakness.
Company Guidance
During the Befesa Third Quarter 2025 Results Conference Call, the company provided several key metrics and guidance for the rest of the year. Befesa achieved an adjusted EBITDA of EUR 174 million for the first nine months of 2025, marking a 15% increase year-on-year, with an EBITDA margin improvement to 21.3% in Q3 from 16.6% the previous year. Financial leverage was reduced to 2.6x by September 2025. The company confirmed its full-year EBITDA guidance in the lower part of the EUR 240 million to EUR 265 million range and expects financial leverage to fall below 2.5x by year-end. CapEx for the year is projected between EUR 80 million to EUR 90 million, with a focus on the Bernburg project following Palmerton's completion. Additionally, net income and EPS saw significant growth, with EPS rising by 143% year-on-year to EUR 1.52. The company plans to maintain its dividend policy, distributing 40% to 50% of net income to shareholders.Befesa S.A. Financial Statement Overview
Summary
Befesa S.A. demonstrates solid revenue growth and strong cash generation capabilities. However, operational challenges are evident with a negative EBIT margin in the TTM period. The balance sheet remains robust, providing a sound financial foundation, but the company should focus on improving operational efficiency to enhance EBIT margins.Income Statement
Befesa S.A. shows a healthy revenue growth trajectory, with revenue increasing consistently from 2020 to 2024. However, the TTM EBIT margin is negative, indicating operational challenges. The gross profit margin has decreased in the TTM period, but the net profit margin remains positive, suggesting some resilience. EBITDA margins are strong, highlighting efficient cash generation from operations.72
Positive
Balance Sheet
The balance sheet reflects a stable financial position with a moderate debt-to-equity ratio, though it increased slightly in the TTM period. Return on Equity (ROE) is reasonable but has decreased compared to prior years, indicating a decline in profitability relative to equity. The equity ratio remains solid, ensuring a strong asset base.68
Positive
Cash Flow
Cash flows show stability, with positive free cash flow in the TTM period despite a decrease from the previous year. The operating cash flow to net income ratio is strong, indicating effective cash conversion from profits. However, free cash flow growth is inconsistent, suggesting variability in cash generation.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.22B | 1.24B | 1.18B | 1.14B | 821.61M | 604.33M |
| Gross Profit | 212.81M | 514.17M | 456.20M | 569.11M | 465.10M | 350.58M |
| EBITDA | 218.99M | 195.66M | 178.39M | 223.15M | 188.54M | 117.22M |
| Net Income | 45.01M | 50.82M | 57.97M | 106.22M | 99.75M | 47.61M |
Balance Sheet | ||||||
| Total Assets | 1.92B | 1.98B | 1.95B | 1.98B | 1.80B | 1.10B |
| Cash, Cash Equivalents and Short-Term Investments | 96.50M | 102.52M | 106.69M | 161.75M | 224.09M | 154.56M |
| Total Debt | 697.59M | 721.48M | 710.77M | 710.77M | 694.73M | 548.22M |
| Total Liabilities | 1.08B | 1.13B | 1.07B | 1.16B | 1.16B | 772.82M |
| Stockholders Equity | 829.87M | 830.22M | 823.53M | 805.10M | 622.84M | 317.29M |
Cash Flow | ||||||
| Free Cash Flow | 40.68M | 113.25M | 12.51M | 30.68M | 40.22M | 37.72M |
| Operating Cash Flow | 151.69M | 191.82M | 117.32M | 137.33M | 117.90M | 92.54M |
| Investing Cash Flow | -62.35M | -78.57M | -90.85M | -151.40M | -449.47M | -53.88M |
| Financing Cash Flow | -76.28M | -117.27M | -80.24M | -46.89M | 401.77M | -9.16M |
Befesa S.A. Technical Analysis
Positive
28.70
Price Trends
28.60
Positive
27.91
Positive
25.97
Positive
Market Momentum
0.29
Positive
46.60
Neutral
41.39
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:BFSA, the sentiment is Positive. The current price of 28.7 is below the 20-day moving average (MA) of 30.02, above the 50-day MA of 28.60, and above the 200-day MA of 25.97, indicating a neutral trend. The MACD of 0.29 indicates Positive momentum. The RSI at 46.60 is Neutral, neither overbought nor oversold. The STOCH value of 41.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:BFSA.
Befesa S.A. Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | €1.16B | 14.94 | 7.86% | 1.94% | -2.59% | -3.21% | |
| ― | €1.56B | 13.21 | 11.18% | 3.01% | 4.20% | -20.71% | |
| ― | €1.61B | 13.91 | 11.18% | 2.83% | 4.20% | -20.71% | |
| ― | €1.15B | 13.24 | ― | 2.19% | 2.80% | 22.69% | |
| ― | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
| ― | €1.31B | 50.09 | 3.09% | 1.98% | 1.57% | -70.53% | |
| ― | €1.76B | -3.76 | -9.21% | 0.70% | -7.50% | -3837.01% |
* Industrials Sector Average
DE:BFSA
Befesa S.A.
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41.10%
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DE:SZG
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104.82%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.