Good day and welcome to Befesa third quarter results 2022. Today's conference is being recorded. I will now hand the call over to Rafael Pérez-Cáceres. Please go ahead. Good morning, and welcome to the third quarter 2022 results conference call of Befesa. I am Rafael Pérez-Cáceres, Head of Strategy and Investor Relations of Befesa. Today, we have with us Javier Molina, Executive Chair of Befesa. Asier Zarraonandia Ayo, CEO of Befesa, and Wolf Lehmann, CFO of the company. Javier will start with an executive summary of the first nine months of the year. After that, Asier will explain the business highlights of the period, covering steel dust and aluminum salt slag recycling. Wolf will review the financials in total and by business unit, as well as cash flow and an update on our hedging program. Javier will close this presentation, providing some thoughts about the outlook for the rest of the year and the five-year growth plan, which we will explain in detail in the upcoming Capital Markets Day on the eighth of November. Finally, we will open the lines for the Q&A session. Before getting started, let me remind you that this conference call is being webcast live. You can find the link to the webcast and the third quarter results presentation on our website, www.befesa.com. Now, let me turn this call over to our chairman. Javier, please. Thank you, Rafael. Good morning. During the third quarter, we have continued to deliver solid growth for Befesa in its challenging market environment. As anticipated, Q3 has been the weakest quarter in the year, driven by a combination of planned maintenance shutdowns in Europe, lower metal prices compared to the second quarter, and high overall inflation, especially energy prices. In the third quarter, we have achieved EUR 46 million of EBITDA, which is 8% higher than last year. As such, in the first nine months of the year, total EBITDA has been EUR 164 million or 20% growth year-on-year. Overall, despite the challenging macroeconomic environment and the volatility in the commodity prices, we have delivered another good quarter, supported by the contribution of the North American plants. In China, we expect to complete the commissioning of the second plant in Henan in the last quarter of this year. We continue to experience a challenging environment to operate, caused by the zero-COVID policy that the Chinese government is imposing. Later, our CEO will review the business performance during this quarter in more detail. Based on the results of the third quarter and our expectation for the last one, we are confirming the guidelines that we provide at the beginning of the year, towards the lower part of the range of EUR 220 million-EUR 270 million. We are living in a very challenging macroeconomic environment, which translates into high levels of volatility and uncertainty over the coming months, with concerns about an economic recession in Europe and globally. In September, we signed the acquisition of the remaining 93% stake in the US Zinc refining asset. Befesa already owned 7% of the assets as part of that acquisition of American Zinc Recycling deal. The current environment, dominated by the high inflation and energy prices, has provided us with the opportunity to renegotiate favorably the terms and conditions of the agreement, reducing the acquisition price by 65% to $47 million. The zinc refining business provides Befesa with a strategic vertical integration opportunity in the U.S., addressing the shortage of smelting capacity in the North American market. Furthermore, the refining facility is the only one of its kind in the world producing green zinc from 100% recycled raw materials. Next week, on November 3, we are celebrating our five-year anniversary on the Frankfurt Stock Exchange. In the past five years, we have developed Befesa from a leading European-focused company to a truly global market leader with a diversified and balanced footprint. We are excited about the next growth plan of Befesa for the next five years, in which we plan to invest between EUR 400 million-EUR 450 million to target double-digit earnings growth in a globally balanced expansion. Now, Asier Zarraonandia will explain the business performance in more detail. Thank you, Javier. I will provide an overview of the performance of the business during the third quarter and the first nine months of the year. Overall, the third quarter has been a good quarter. As we expected and found the same as previous years, planned maintenance shutdowns across our plants in Europe during the summer season have impacted volume in the third quarter. Metal prices have been lower in Q3 compared with Q2, while inflation in general, and especially energy prices, have remained high. As we already saw in the first half of the year, we keep being able to compensate the higher inflation with higher metal prices. In summary, overall good results in a challenging environment, which position us to achieve the lower part of the guidance. Going into the details and starting with the steel dust recycling business. In Q3, we have achieved 268,000 tons of throughput, up 20% compared to last year, mainly driven by the contribution from the US plant, supported by a strong performance in the rest of the markets. Similarly to previous years, Q3 is affected by planned maintenance shutdowns in our European plants. In Q3, the contribution from the US operation has been strong, while in China, we continue to be impacted by the zero-COVID policy of the Chinese government and the speed of the economic recovery. Total steel dust volume growth in the first nine months has been 60% compared to the previous year. Waelz oxide price, considering the weighted average of LME and hedging, has increased 17% in the quarter and 18% in the first nine months of the year. These positive efforts have been partially offset by higher inflation across the business in Q3, mainly in energy prices and more specifically in the coke, representing a negative impact. Total EBITDA in the steel dust business has been EUR 36 million in Q3, up 7% compared to the previous year. In the first nine months of the year, total EBITDA in the steel dust business has been EUR 131 million, up 28% over last year. In the U.S., the integration is developing well across all fronts. The team is working well, and we are delivering the volume and the result that we expected. Also, in the U.S., as explained by Javier, we have now full ownership of the steel refining assets. The refining facility is the only one in the world producing green steel, green steel from 100% recycled raw materials, and will be fed with the waste that we produce in the U.S. in our recycling facilities. In China, the zero-COVID strategy that the Chinese government is implementing to fight against the still present COVID-19 pandemic has created a very challenging environment to operate as the recovery is going very slow. In Jiangsu Province, we have been operating the plant since the beginning of the year. The plant is technically operating well, and we have contracted more than 80% of the volume. However, the situation during the nine months of the year has been quite challenging. The zero-COVID strategy and the slow recovery speed. The Chinese economy has impacted the steel production and our utilization rate. Our second plant in the province of Henan is completed, and we are finishing the commissioning of the plant, which will be completed over the coming weeks. In the traditional business of Befesa, we are achieving strong volumes supported by a strong EAF steel production from our customers. Despite all the news about the steel production declines in Europe, the delivery of deliveries from our customers continues to be close to normal levels. Moving now to our aluminum salt slag and secondary aluminum business. Our aluminum business has delivered a good quarter in a very challenging microeconomic environment. During the third quarter, we have recycled 67,000 tons of salt slag, representing a 9% decrease compared to last year. The production of secondary aluminum alloy has been 37,000 tons, a decrease of 13% over the last year. These volume decreases are explained by normal planned maintenance shutdowns over the summer season, both in the salt slag as well as secondary aluminum plants. The aluminum price has increased 16% in the period, which has more than offset the high inflation in the business during the period. In this business, we have been able to pass most of the cost inflation to our customers via increase of price, fee, and margin. As a result, we have achieved EUR 11 million of EBITDA in this segment, which represent a 14% growth over last year. All in all, another good quarter in a challenging environment. As explained, Q3 has been the weakest quarter, driven by maintenance shutdowns, driving down volume and high inflation levels. We expect Q4 to be a strong quarter with all our plants operating as normal. A final word about China. As I mentioned, the situation during the last quarters has been very challenging and difficult to operate. So far, we have not started to see some relief in the measures and economy recovery speed. Despite the short-term challenge in China, the opportunity to grow remains strong. The environmental authorities are committed to enforcing and fulfilling the environmental regulations, with the steelmakers saying recycling is a real solution. We are working on several new projects to build a new plant that could materialize in the near future as soon as the negotiation with authorities and steelmakers reach to an agreement. We will explain more about this in the upcoming Capital Markets Day. Now, Wolf Lehmann will explain the financials in more detail. Thank you, Asier. Please turn to page nine, the nine months 2022 consolidated financial highlights. As mentioned by Javier, Befesa continued to deliver solid growth with EBITDA up 20% year-over-year in the first nine months of 2022. EUR 163.9 million adjusted EBITDA, up EUR 27.1 million year-over-year, versus the nine months 2021 at EUR 136.8 million. Overall, our growth initiatives, including US Zinc, are delivering results. Even in the current volatile environment, we are able to offset inflationary pressures, mainly energy, through higher pricing. Reviewing the main drivers of the year-over-year EUR 27 million EBITDA improvement in more detail. On volume. Overall, approximately EUR 26 million net positive volume year-over-year impact. +EUR 13 million from the higher steel dust throughput, including the positive contribution from the US Zinc operations, more than offsetting slightly slower EU due to seasonal plant maintenance overhauls. - EUR 4 million, which is a minor EUR 4 million impact from lower aluminum volumes, mainly driven by the lower activity of the European automotive and aluminum industries. On price. The overall approximately EUR 51 million positive price impact, about half, or EUR 26 million, is from steel dust business, and the other half, around EUR 25 million, from our aluminum salt slag business. I will explain in more detail on the following pages. On other costs, the approximately - EUR 50 million effect reflects mainly the higher inflation, primarily energy costs, which is in balance with the higher prices achieved. In summary, adjusted EBITDA is at an all-time high of EUR 164 million, which is a solid 19% adjusted EBITDA margin, even during these high inflationary times, and while the US Zinc integration is ongoing. Net profit increased by EUR 26 million or 42% year-over-year to EUR 87.2 million in the first nine months of 2022, equal to EUR 2.18 earnings per share. Both the net profit and the EPS are positively impacted by the successful acquisition of the US Zinc refining business, especially due to the renegotiated lower purchase price. Cash stands at EUR 139 million, and leverage temporarily increased to 2.56 x, which I will explain later together with the net debt and the net leverage performance on page 12. This is after paying out EUR 50 million dividends as well as funding $47 million for the acquisitions. Note, as always, in the appendix of this presentation, you'll find, as usual, various financial and operational data tables with quarterly, annual, and multiyear views for your reference. Turning to page 10, the steel dust recycling services results. Steel dust recycling services continued to perform strongly and delivered EUR 131 million adjusted EBITDA in nine months 2022, up EUR 28.3 million or 27.5% year-over-year. Overall, the steel dust growth initiatives, including US operations, are delivering results, and we're able to offset most of the inflationary pressures, mainly energy, through higher prices. The volume lever was positive by around EUR 13 million EBITDA year-over-year. As explained, this includes the positive contribution from the US operations, more than offsetting the seasonal higher plant maintenance overhauls, especially in Europe this year. The net price lever was positive by about EUR 25 million, with main price components being +EUR 36 million from higher zinc LME prices, up 42% year-over-year to EUR 3,422 per ton. +EUR 2 million from higher zinc hedging prices. Those were EUR 2,363 per ton in nine months 2022 versus EUR 2,170 per ton in nine months 2021. Finally, a - EUR 12 million driven by the known higher annual zinc treatment charges, which were considered at $230 retroactively from first of January, versus $159 per ton in 2021. Overall, the approximately EUR 25 million impact from the price lever mostly offset the approximate EUR 27 million year-over-year impact from higher inflation, mainly energy costs, captured under the cost other lever. Going now to page 11, the results of our Aluminum Salt Slags Recycling Services segment. Aluminum salt slag recycling services delivered EUR 34.2 million EBITDA in nine months 2022. Stable compared to the EUR 34.1 million in nine months 2021. The year-over-year EBITDA development was mainly impacted by the lower market activity in the European automotive and aluminum industries and higher energy prices, which were successfully offset by the achieved higher prices. The volume lever was down by about EUR 4 million effect year-over-year. This was driven by 21% lower salt slags and spent pot lining treated, but normalized for Hannover, rather up 9% year-over-year. As well as 14% lower production of aluminum alloys driven by the current lower European automotive and aluminum industry environment. Nevertheless, even under the current volatile market environment, we managed to run our plants overall at around 80% utilization, especially if normalizing for Hannover. The price level was positive by about EUR 25 million, with aluminum alloy Metal Bulletin market prices showing a 25% year-over-year or a full EUR 500 per ton increase, as well as better aluminum metal margins. The cost lever, with around -EUR 21 million EBITDA effect year-over-year, was driven by the higher inflationary energy cost trends, with particularly high gas prices in Europe, thus offset most of the progress in price. Turning to page 12, the cash flow, net debt, and leverage results. On the EBITDA to cash flow bridge, starting with EUR 163.9 million adjusted EBITDA on the left and walking to the right. Working capital was up by about EUR 48 million year-over-year. The high working capital consumption was very much driven by the seasonality and timing impact similar to last year. Driven by an increase in sales and receivables, the majority of which is expected to reduce by the end of this year as usual. In addition, impact from the timing of the Hannover insurance recovery and impacts of the US Zinc refining acquisition. Similar to last year, we do expect a better working capital performance seasonally in Q4 towards year-end. Interest at EUR 70 million as expected, taxes at about EUR 20 million also as expected, resulting in an operating cash flow of EUR 78.3 million in the first nine months of 2022. CapEx-wise, in the first nine months, we spent EUR 50.9 million regular maintenance CapEx, as well as CapEx related to the operational excellence synergy projects in the US and to the recovery of our Hannover plant, where we partially got already and are getting the money back from the insurance. Also, EUR 69.8 million on growth, including, which is the majority, the around EUR 45 million-EUR 47 million for the acquisition of the US Zinc refining operations, as well as our new plant at Henan. Together, total CapEx of EUR 121 million, partially funded through approximately EUR 7 million China local loan for our Henan plant. Dividends of EUR 50 million or EUR 1.25 per share were distributed in July, equal to 50% of net profit of 2021 as promised. Total cash flow amounted to a negative EUR 85 million, and cash on hand stands at EUR 139 million, again, including the around EUR 100 million for dividends and the acquisition of the US Zinc refining asset. The cash on hand of EUR 139 million, together with our entirely undrawn EUR 75 million revolving credit line, provides Befesa with a strong liquidity of more than EUR 200 million. The EUR 225 million last twelve months rolling EBITDA incorporates full twelve months rolling of the US operations on a pro forma basis. The EUR 574 million net debt with the EUR 225 million last twelve months adjusted EBITDA result in a 2.56x net leverage at third quarter closing. Again, we expect a lower leverage at year-end 2022. Now turning to page 13 on hedging. Our zinc hedge book is up to and including January 2025. Thus, approximately 2.5 years of hedges on the books, our hedging strategy remains unchanged. Overall, considering the combined global hedge book, Europe, Korea, U.S. operations, the year 2022, this year, is hedged at around EUR 2,375 per ton, sold forward at fixed prices. The year 2023 is at around EUR 2,500 per ton, and the year 2024 at around EUR 2,600 per ton, which provides stability and growth for the next years. Summarizing the financial section before we turn to the growth, three points. Befesa delivered in the first nine months the highest earnings in the history of the company at EUR 164 million adjusted EBITDA, up 20% over last year despite the current volatile environment. Secondly, our financial backbone is strong. Our hedge book covers up to and including January 2025. Our capital structure is efficient and long-term. Even after funding around EUR 100 million for the US Zinc refining acquisition and EUR 50 million dividend combined, liquidity is more than EUR 200 million. Third, this financial backbone supports us very well to fund our growth roadmap. Our latest sustainable global growth plan, organically, which we'll talk in more detail about at our Capital Markets Day on the eighth of November. Now, let me turn it back over to Javier on outlook and growth. Thanks, Wolf. I would like to finish the call providing some more details and thoughts on the outlook for the rest of the year. As I said, despite all the volatility in the commodity prices and the concerns about the global economy that we are living, we expect 2022 to be another growth year for Befesa, mainly driven by the volume growth contribution of the North American operation, which will partially offset the high general inflation, especially in energy prices. We are confirming the full year guidance at a lower part of the range. From the volume point of view, we expect growth on the steel dust volume, driven by a full year of consolidation of our operation in the U.S. after the acquisition of American Zinc Recycling. The integration into Befesa is developing well across all fronts. For the rest of the year, we expect a good performance in our American operations. In Europe, there are general concerns about the economic situation during the rest of the year caused by the uncertainty in the energy market and how that could affect the overall industry, as well as concerns of demand coming from China. Despite that, we are confident to achieve high levels of capacity utilization overall. In China, as Asier has explained, the lockdown measures are making it very difficult to operate, and we expect almost no contribution from China in 2022. In aluminum salt slag and secondary aluminum business, which is a purely European business, despite the automotive industry continues to face a challenging situation in Europe and supply chain problems are added to the semiconductors shortage, we expect volume to be maintained until the end of the year. In the aluminum business, we are being able to pass a big part of the cost increase to our customers. We expect volatility in the prices of commodity to continue for the rest of the year, driven by instability at the macro level and uncertainties in the overall economy. Our hedging policy with around 70% of the volume of zinc hedged at good price will help us navigate this period of high volatility. In summary, although we see high levels of uncertainty, which is resulting in high volatility in commodity prices, in Befesa, we are facing this challenging environment with optimism. Befesa today is a much more diversified business than one year ago, with a significant part of our earnings coming from markets outside of Europe, mainly North America and Asia. We are confident about the business model of Befesa. Finally, on future growth, as you know, in two weeks, on the eighth of November, we will celebrate our first Capital Markets Day, where the focus will be the growth plan for the next five years. Despite the short-term challenging situation we are facing, we have a strong growth plan to invest between EUR 400 million-EUR 450 million over the next five years to grow earnings at a high rate. This growth plan is based on global mega trends, which are not going to go away. Decarbonization and electric vehicle will drive market growth where we operate. We will explain all the details on the eighth of November. Thank you very much. Thank you, Javier. We will now open the line for your questions. Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad. Our first question is coming from Ingo Schachel from BNP Paribas. Thanks for taking my question. I think the first one would be on your European electric arc furnace dust recycling activities. Wondering whether you could give us a bit more specific information around the utilization level in the third quarter. Maybe at least let us know whether the throughput in Europe was still around 100,000 tons or higher than in the U.S. For the fourth quarter, you seem to be optimistic that after the seasonal EAF electric arc furnace outages in Q3, volumes might be higher in Europe. Of course, from our perspective, it's still difficult to substantiate that. When we look at industry data, electric arc furnace production still seems to be down. Is there any evidence that you already have for this Q4 pickup? Did you see good inbound shipments in October, or is it based on the inventory levels you already have of stuff? Just, curious to understand a bit better what drives your, let's say, relative optimism regarding the fourth quarter electric arc furnace dust throughput. Asier, please. Thank you, Ingo. As always, long question and interesting question. Well, let me confirm something. Yes, we see the Q4 running at full capacity during the last three months in Europe, and we see the same level in U.S. and perhaps a better performance in China. This is what we have confirmed at this stage, because we are at the end of October and we have, despite the fact of the expansion or announcement of containment of production, we are delivering well. Yes, playing with the stocks, playing with the global stocks while we are stopped for maintenance in the Q3. We are growing the stocks, and we can navigate without no problems. Anyway, the deliveries we are seeing is more or less a normal level in Europe and as expected in U.S. and with a problem in China. Any specific, Q3 number you can give us for European throughput? No. Well, you know, Ingo, you make always that question and we answer the same. We don't make a separation of this because, obvious, you know, reasons for the competition and so. You have the data, global data, in the presentation. Okay. Sure. Maybe on the zinc refining asset that you acquired in the U.S. I think you've given us, I think with these 5x EBITDA purchase price indications of an indication where you see, I think that's mid-term EBITDA, I guess. But thinking about the CapEx for next year, what should we already expect in terms of EBIT and cash contribution next year? Is it still going to be negative or do you already expect the asset to contribute next year? Also, in terms of cash flow, do you still see, let's say, beyond the EUR 47 million purchase price, a lot of need for net working capital investment or other upgrade investments in the assets to capture opportunities with regards to profitability improvements? Well, basically, as we have in the presentation, we acquired more or less at the level of 5x the EBITDA, considering the EBITDA in 2023. We believe we expect the range of EUR 8 million-EUR 10 million, which is now euros, for next year. Currently is doing in that level or even breakeven. The medium term, and even for 2024, 2025, we are not changing our mind as we explained it in the last year when we acquired the whole assets in US. We expect something in the middle of EUR 15 million-EUR 20 million, and being cash generator. I mean, the CapEx maintenance we need there is below this level, so we do hope that it's gonna contribute with cash in the future. Okay. Very clear. Thank you. Maybe just a quick housekeeping question on the steel dust revenues. I think you had very high revenues, almost at the Q2 level, even though zinc prices were a bit lower. Is there anything extraordinary in the revenues, or I suspect it's I mean, there's collection fee or logistics costs that have increased because of energy prices or just the normal quarterly volatility of revenues in that segment? No. Ingo, thank you. No, nothing special. Normal operations, and zinc prices might have been a little bit lower than second quarter, but at the end of the day, zinc prices are still high. We had good throughput, good sales, so that drives the results. Nothing special in there. No. Thank you. Okay. Thank you. We will now take the next question from Sandeep Chainani with Morgan Stanley. Good morning, gentlemen. I have a few questions. I'll take one at a time. Firstly, on the steel dust supply, you have clearly alluded to the fact that Q4 is expected to get nameplate capacity. If you can give us some guidance or thought process around 2023, what are your expectations for that year? Maybe some indications of what is the inventory level sitting in your mills, especially in Europe. Thank you. Well, I think it's a good question. As I said, well, Q4 is gonna be a normal level throughput quarter. We are in the middle, not in the middle, but almost in the middle of the quarter. We see that it's gonna be like that. Out of the Q3, it's gonna be in the level of the one over two. This is the normal rate that we have. For 2023 globally, well, I think it's a little bit early to say. I mean, why not we are gonna increase the throughput for, with regards to 2022, because we have China production probably coming back and so on. This is still a lot of uncertainties there. Well, difficult to us to answer now. I will tell you for modeling, I would put even higher than the 20-to-1. Yeah, we'll cover more in the Capital Markets Day. Sandeep, we'll cover more, give you a little bit more flavor at the Capital Markets Day, but it's a bit too early. Thank you. Okay. That's fine. Maybe moving on to the second question. Zinc smelters are closing in Europe due to elevated energy prices. Can you give us an update on the situation in context of WOX processing? Yeah. That's a real thing, and I know that is a question that come in over many times. The answer to make it easy and quick is not affecting us, and this is reality. There are some particular cases where we are allocating the WOX instead of on the plant to directly the port because the global players on the smelting side is they are moving their WOX that is on their coast. We have not been affected, but those containments. Let's see in the future, but in that case, probably it's because the WOX is just 5% or 10% of the portfolio of the raw material they are using, and they are more affecting to the concentrates. Whatever is the reason, we are not suffering this at the moment. We continue to be sold out, Sandeep. That's very good to know. Maybe one housekeeping note on cash flow. I look at Q3 numbers, and I noticed that there is other loss of EUR 40 million recorded as part of the operating cash flow. Can you give us some indication what that pertains to? Are you referring to page 12, cash flow to net debt WOX? Or which page are you referring to? I'm referring to the main report, page 11 of 13, where there is other loss of EUR 40.2 billion in Q3, and it's part of the operating cash flow. Okay. For me, a little bit easier, that's why we provide page twelve. Sandeep, I think you're looking at the same number. This is the WOX from EBITDA to operating cash flow. If you look at that, ultimately you have about EUR 48 million that impacts working capital. About half of that is seasonal working capital, which we're expecting to reverse in the fourth quarter. The other half of that relates to special impacts, which is Hannover, and then the impact of the acquisition of the U.S. Zinc refining. I remember, Sandeep, last call you had asked for collections around the Hannover insurance case. I can positively confirm that we've already collected EUR 20 million year-to- date, of which EUR 5 million was in the first half, and then EUR 15 million was actually in this quarter, in the third quarter. There's more to come until the rest of the year. That impacts as always, you know, when you have these insurance cases, you go in advance because you pay for the repairs and rebuilding, and then later on you get the funding from the insurance company. That is all in that EUR 48 million that we show here on the working capital, and I think that's also what you're referring to. Regarding Hannover and Sandeep, our expectation is to cover 100% of the rebuilding of the plant and a good portion or practically total the loss of profit of the shutdown. Yeah. Most importantly, we expect to be back in action in Hannover beginning of next year. Yes. Yeah. We're happy with progress there. Okay, thank you. Just one clarification on the investment program. Are you expecting double-digit growth on an average for next five years, i.e., at least 10% each year for next five years? I think Sandeep will tell you more about it at eighth of November at the Capital Markets Day. We're excited about it. Please remember, on the third of November is our five-year anniversary in the stock market, and on the eighth of November, we have our first ever Capital Markets Day. Leave us a little bit ammunition to celebrate the Capital Markets Day. Okay, thank you so much. Thank you. We will now take the next question from Michael Hall from Stifel. Hi, thank you very much, and good morning. I appreciate not giving by country or by region utilization, but you reported in total. What is your estimate for total utilization in steel dust for Q4? We just are in the right neighborhood given we're trying to figure out how China contributes in there if we're adding up all three regions on our own. Hi, Michael. I think as I said before, I think that you have to consider as a reference the Q1 as an example of the percentage of utilization for the Q4. For the ratio, again, I repeat myself, but it's better don't disclose that. Right. Okay. You reported about 88% utilization total company. That's the neighborhood we should be in for the fourth quarter. Right. Yep. Okay. All right, perfect. I appreciate the, you know, approximately EUR 15 million-EUR 20 million contribution for the new smelter. What do you think Q4's will be given it's just being brought in? Is that sort of take one quarter of that, kind of the midpoint of that? Take one quarter of that, or is it a little less? How do I factor that in? In this case, I would take this like a kind of break-even. It's not gonna be contribution from the smelter this quarter, basically because it's running a good run rate, but we have to make some adjustments and at the end, so the idea is that to start to contribute during 2023. Okay, Wolf, what was the contribution from stainless steel and other in the steel business for the quarter? For the quarter, let me get back to you, Michael. I don't know the total we had, but the usual single-digit EBITDA little. Yeah, it's not a big business for us. All right. What is your assumption for a blended price in zinc and then the aluminum alloy price in Q4 in order to get to support EUR 56 million? Because basically, it's pretty simple math. You've done EUR 164 million. To do the low end, you got to do EUR 56 million. I'm trying to figure out what you think price is. Michael, at the end, the question of prices is something that we always answer the same. If I will know what is gonna be the price of the same during the next three months, probably I'm not gonna explain here the results of the first half. We don't know. I mean, we have the hedge part for this quarter in place, and the rest is whatever comes in mind what happens. We have the reality of today, around the EUR 3,000, and this is. We'll see what is coming out in the next two months. We don't expect big change in the rest of the year. Probably not. Probably not. Mm-hmm. Okay. On the aluminum alloy side, what's it running in the fourth quarter to date then? Yeah, why not? I think in aluminum, we are able to pass through the higher inflation cost, and we are gonna keep like this probably until the last part of the year. Yes. Okay. Similar- Quarter to date, what are you running as a selling price for aluminum alloy? Let me just look. We had, I think, aluminum alloys. Give me one second here. I think I mentioned it. I think prices, what we went up, EUR 500 per ton, and we had. I'll send you the final price. It was up year-over-year, EUR 500 per ton. I'll send it to you, Michael. Okay. We expect similar prices. Just expect similar prices. Same as the thing. No reasons to change a lot there. Mm-hmm. Got it. That's what I just was trying to zero in on. Just to be clear, I'm not trying to take the thunder away from November eighth, but we shouldn't get too far ahead of our skis. You've got to invest this money before it drives growth. The investments might take a year or 18 months before the first real driver of new growth from that, just because you gotta go out and build things. It's the first year's not being driven by an above average growth because you're doing this investment. It will drive long-term, really strong growth, you know, incrementally, maybe another EUR 80 million-EUR 100 million of profitability when it's all done, but it's not gonna be 10% the first year. Michael, the first point, we have done the first investment of the plan, which has been the acquisition of the zinc smelter in the U.S. In the rest of the investment, we will adapt the speed of our investment to the market situation. We think that the second investment will be probably in the U.S., where we want to refurbish one of our biggest plants. In the rest of the areas, we will adapt the speed of our investment to the evolution of the market. Okay. All right. Thank you very much. Michael, just- Oops, go ahead. Sorry. Coming back to your pre-Metal Bulletin prices, Michael. The last 60 days we were trading at an average of about EUR 2,360 per ton. This is kind of also what we're expecting for the fourth quarter. Okay. EUR 2,360, EUR 2,350 per ton, FMB. Got it. All right. Great. See you, Michael. Thank you. Thank you. We will now take the next question from Oscar Val Mas from JPMorgan. Yes. Good morning, everyone. I have three questions. I'll take them one by one as well. The first one is really on energy costs. Could you just comment on, do they get worse in Q4 from Q3? And then also, what are your thoughts on 2023, specifically on gas? What have you hedged? What percentage is hedged for next year? Thanks, Oscar. First thing we need to understand is that we don't have an only energy source. As you know, we have coke as most important energy source in the steel dust business, and then gas and electricity. The trends of the different energies are not exactly the same. In terms of gas, electricity, the third quarter has been the peak quarter of the year. Now what we have seen is an important, very important decrease in the prices of gas and energy. We don't know very well what is going to happen next year. What we read every day and the information we get from the specialists, et cetera, is that 2023 couldn't be much higher than 2022 average. We don't have, as you can imagine, a clear view of that. Let's see what is going to happen. Regarding the coke, which is linked more to the coal than any other energy, now we are probably in the peak moment of the year, and we are starting to see some decrease in the evolution of the prices. Again, regarding 2023, we think that could be slightly higher than 2022. Again, we don't have the crystal ball to predict what is gonna happen, no? Okay. No hedges? No hedges, because it's in energies, it's quite impossible for us to hedge. We have Okay. resources of energy in seven different countries. Again, you cannot do a global hedging as we can do in the metal side, no? Okay. Very clear. The second question is just on the U.S. synergies. How far are we to the EUR 17 million? What's the run rate today of those synergies? Well, it's a difficult question as well. We are on the way to get more or less the EUR 20 million that always we are talking. The problem there is that sometimes you get the operational profit that are covered by the increase in inflation costs, especially by coke. It's difficult to answer that. What I can tell is that in the operational level, we are on the way to get and capture all the synergies probably within 2023. Okay. Then the final question is going back on what Ingo asked, just to clarify, do you have an EBIT number for the refining, the zinc refining assets? You talk about 5x EBITDA, but is there an EBIT multiple for next year we should think about or an EBIT number? Oscar, we'll get back to you on that one. Okay. I was just trying to see if it's more depreciation or not on the asset. Thank you. Thank you. We will now take the next question from Lasse Stüben from Berenberg. Hi. Hi, good morning. Just two additional follow-ups for me. I just want to follow up on what's happening in China with, you know, the congress we've had recently, and there doesn't seem to be much of a relaxation on, you know, the zero-COVID policy. So I'm just wondering sort of what sort of visibility you have or if you have any early insights, maybe from your own customers on what the plan is in China, as it sounds like you're a lot more confident on the operational, you know, operational aspects in Q4. So if you could give some insights there, please. Well, yes, we were following as well the Congress and the situation in China, very high expectations. The reality is that, actually has not many changes on the field. I mean, the recovery for the Chinese economy after the COVID lockdowns in the second quarter is being very slow, and there is not a clear path what is gonna come. On the field as well with the steel production is going in the very irregular way. They get up and down, and this is affecting to our production. We see basically that we are gonna have in the Q4 the same path on the rest of the year, some couple of probably the two months and a half running and then stopping, waiting for more gas. This is more or less what we have in mind. Okay. Does this change, like, you know, the pace of investment that you had maybe initially planned in China? You know, are you now more in a bit of a, I guess, wait and see mode with respect to, you know, additional plants or how does that change things? Not really change it, but I think that we have to monitor the timing for the investment. I mean, this is something that we are already doing. As Javier and Wolf say, we will explain more detail on the Capital Markets Day. I think that the growth plan, as I explained before, are on the table. Other thing is that the speed of this probably we have to manage. This is the idea. Yeah. Okay. I guess just related to that, I guess the slightly lower Q3 utilization in steel, does that also sort of capturing that, you know, I guess the weakness in China? I'm just looking at the, I think the number you gave was about 68% for Q3. So I'm just trying to, I understand there's maintenance shutdowns, but I guess does that also capture that China effect as well? Yeah, well, but basically because we are running the whole year like this, there is no difference among the quarters. This is a little bit affecting the whole year. Okay. We have had shutdowns in some big European plants. Okay. Understood. Then finally, just again on energy. You know, as you said, the costs have come down quite rapidly over the past couple of weeks. Is that, I guess, just to clarify, because you don't have any hedges in place at the moment, are you essentially getting that benefit pretty much instantly, or is there a bit of a delay? Is it possible to understand how that kind of feeds through into your cost base? Yes. In the case of gas and electricity, as we don't have hedge, we will get the benefit of this price decrease during this quarter. In the case of coke, it's not happening in the same line. Okay? Understood. Okay. No, that's helpful. Okay, great. Thanks so much. Thank you, Lasse Stüben. We will now take the next question from Anis Zgaya with ODDO BHF. Yes. Good morning. I have one question, one remaining question. Could you please explain more the EUR 90 million adjustment on Q3 EBITDA, I mean, between the reported and the adjusted EBITDA. Could you please say what would be the adjusted net profit? Thanks. Hey, good morning, Anis. Yeah. Correct. You see that the reported EBITDA is higher than the adjusted. Reported EBITDA is EUR 181 million, and the adjusted EBITDA is EUR 164 million. There's a EUR 17 million difference, and this is purely due to the fact that we were able to purchase the US Zinc refining asset at a very attractive price. This is the adjustment that relates to that. Yeah. Similarly, on net profit, you see that net profit is nicely up year-over-year. What I just explained on EBITDA, that falls through obviously to net profit, and the majority of the year-over-year increase is driven by that favorable adjustment for the acquisition of the US Zinc refining asset at an attractive price. Okay. Thank you. It's just an accounting, you know? Yeah. It's not a cash impact. It's just an accounting impact. Yeah. Yeah. We follow the IFRS 3 for the accounting for the acquisition. Yeah. Yeah. Thank you. We will now take the next question from Jaime Escribano with Banco Santander. Hello, good morning. A few questions from my side. One that has been kind of made, but maybe in a different way, which is the following. In steel, that margin has been around 20% in Q3, very similar to Q2. I assume that the reason why this margin is at 20% is mainly on high inflation, as you pointed out in your presentation. I don't know if there is anything else also affecting this margin. The question would be if you are seeing some improvement in energy prices, where could we see this EBITDA margin for the steel and gas division in the following quarters. This would be the first question. Jaime, thank you for the question. Well, as I told before, we have started to see, as everybody, a decrease, a clear decrease in gas and electricity in this quarter, so that will benefit. As I have explained, we are in a peak moment in the coke price. So let's see how the coke price evolution. Based on that, we expect perhaps some improvement in the margin, but not very important based on the coke price situation in the short term. Okay. Very good. Regarding the treatment charge, I know it's very early, but I don't know if you can tell us what is the outlook right now. I remember the final negotiations are usually in March next year, but any development or any dynamic that you are seeing, going higher or going lower or staying stable for next year? The key question or part of one of the two or three key questions on our business, Jaime, you know very well. No clue. I mean, the only follow up we can see the spot markets, especially in China and the others, are in the range that we are currently now. If that means that it's gonna be a stabilization for next year or not, I don't know. Nothing very specific or not many changes even with the spot. It's more difficult to see what is gonna happen next year, for sure. Okay. Thank you. Just a final question. Even if you cannot tell us, region by region, how the volumes are evolving on a quantitative basis, but maybe on a qualitative basis, could you tell us Europe, Turkey, Korea and the US, how do you see Q4 and Q1 volumes evolving? Going up, stable or decreasing a bit? Just to have a sense of- Yeah. Yeah. on the dynamic in each region. Jaime, no problem to qualitatively answer this. I mean, as I said before, in Europe we are gonna run 100% of capacity. Well, 100%, I mean the typical 90-something%, but I think we are full capacity for the last part of the year. Less visibility for the first quarter of 2023, but there are not many reasons that we are gonna have a big change of that, so we see it stable, more or less. In the U.S., we see that we run more or less stable. I think that there are some announcements or temporary stops for steel makers, but it's not affecting a lot. We see it stable. The last quarter and the first quarter probably is gonna be the same as well. Turkey is running quite on the level stable for the year, despite the fact that the European steel makers signal evolution, but we are watching the expected tonnages for the Q4, and for sure for Q1, probably the same. Korea as well. We see a stability in the short term. I mean, short term could be for sure the fourth quarter and the first quarter probably could be in that line, but it's a little bit early to say. Well, more or less we can see these other things that probably gonna happen finally. Then the key question for us, what is gonna happen in China, no? If Q4, we see like the rest of the 2022 year, well, we'll see if there is a higher recovery rates for the steel production there and we can increase the production over the Q1, no? Okay. Yeah. Very clear. Thank you. Yes. We will take the last question from Mukesh Mehta with Permira Credit. Hi, guys. Just a quick housekeeping question. On your debt, do you hedge the floating rate? If so, can you just give us some details of the hedging? Sure. Thank you very much. Good question. You know that we have basically only one debt, which is our term loan B, which is outstanding and long-term until July 2026. That's EUR 626 million gross. Of that, half of that, we have swapped from variable to fixed. The interest rate increases that are being announced in the market really only apply to half of our gross debt, thus only to EUR 313 million of debt. Basically, 1% increase in the Euribor triggers basically EUR 3 million increase in interest per year. The other thing to consider is that for some time we didn't get any interest on our cash deposits. Those days are now also over. Remember that also, you know, right now we have EUR 140 million cash in the pocket, so obviously we're now getting on the majority of that also some interest. In my mind, you know, every 1% interest increase, EUR 3 million, but then we also get some deposits, so I'd rather put in deposit interest of, I don't know, EUR 2.5 million or something like that would be the impact. Yeah. Great. Hopefully that covers that. Yeah, that's really helpful. On the fixed component, just to clarify, where is that hedged at? Is that hedged all the way through to 2026? Yes, absolutely, for the full maturity. Okay. Thank you very much. You're welcome. There are no further questions, so I will hand back to your host to conclude today's conference. Thank you all for your questions. You can also contact the investor relations team of Befesa for any further clarification. Before concluding, I would like to remind to all of you that we will host the first Capital Markets Day of Befesa on the eighth of November. It will be a hybrid event combining in-person and virtual attendance. We will start at 10:00 A.M. UK time and finish around 1:30 P.M. UK time. You will find the details to access the webcast of the Capital Markets Day on our website, www.befesa.com. Thank you very much to all of you, and have a good day. Thank you for joining today's call. You may now disconnect.