market folly

We're posting up notes from the Sohn London conference 2017.  Next up is Beltran de la Lastra of Bestinver who pitched a long of Belfesa.


Beltran de la Lastra's Sohn London Presentation

A reasonably easily understood and overlooked company that has been recently IPOed. Market cap: $1bn euro.

Belfesa recycles steel and aluminium. Ninety-two per cent of their revenues come from the selling the of recycled materials, particularly zinc. Revenues tend to get blown around with the price of zinc, so they hedge the zinc price.

The company is difficult to classify by sector and by country. In its previous listing it was listed in Spain (1993) and this time it has been listed in Germany (2017). Triton bought it in 2013 and they sold half of their holding at the IPO, one month ago.

In most of the countries where they operate the market share is close 100%. It’s a consolidated industry. The replacement costs are high – 67m euro per factory. Regulation is getting stronger and is forcing the steel and aluminium manufacturers to recycle. The customer relationships tend to be long term.

They’ve hedged 70% of their zinc sales out until 2020. Ninety percent of volume is pre-sold for the next 3 years.


Be sure to check out the rest of the presentations from Sohn London 2017.