Q2/26 preview - A continuation of Q1/26

Research evidence excerpt

Q2/26 preview - A continuation of Q1/26

2 July 2026

Befesa

We envisage Befesa’s Q2/26E performance to have been comparable to Q1/26

and forecast group revenue to be flat yoy (+2% qoq). Adjusted EBITDA could rise

by 6% yoy or 3% qoq (adj. EBITDA margin 20.4%, +122bps yoy / +13bps qoq),

with profitability benefiting from a better business mix in the Steel division.

Outlook

We estimate each USD10/t zinc TC variation impacts FY26 EBITDA by EUR 2.0-

2.3m/year (excluding the US where the impact is neutral), hence, implying a

negligible EUR ~1m headwind in total. Spot zinc TC has recently been on a very

low level, driven by a lack of zinc concentrates in the market, and are only

recovering slowly.

In our view, zinc hedges, which have been extended well into 2028, should also

continue to provide sequential EBITDA improvement. The hedge level of 2,990

USD/t for 2026 is ~USD 70/t higher than in 2025 (a USD ~5m tailwind in total)

and for the unhedged position each USD100/t change in the zinc LME price leads

to a USD 7-8m impact on FY EBITDA. For FY26 Befesa is hedged in euro for

European volumes and in US dollar for its US volumes. For FY27 Befesa is hedged

at 3,000 USD/t and for H1/28 it secured an all-time-high level of 3,100 USD/t.

Befesa aims for FY26E EBITDA of EUR 250-270m (+7% yoy at midpoint / DBe

adj. EBITDA EUR 259m, +7% yoy), primarily driven by higher US Electric Arc

Furnace (EAF) steel dust volumes supported by new steelmaker contracts. The

company estimates US EAF steel capacity is projected to increase ~26% or +21mt

by 2028; this would be equivalent to >300kt of steel dust, compares to Befesa’s

installed capacity of 650kt, and should help Befesa reach its FY28 target of ~90%

utilisation after <70% in 2025. Additionally, Befesa hopes for a recovery in the