Ence Energia Y Celulosa Sa · BME:ENC
Ence Energia Y Celulosa Sa — Q1 2024 Earnings Presentation
30 slides from Ence Energia Y Celulosa Sa's earnings presentation, Apr 23, 2024
Slide 1: 1Q24 Results
1Q24 Results 18 23 April 2024 Global ESG score: 90/100
Slide 2: Disclaimer
Disclaimer The information contained in this presentation has been prepared by Ence Energía y Celulosa, S.A. (hereinafter, "Ence"). This presentation includes data relating to future forecasts. Any data included in this presentation which differ from other data based on historical information, inclu
Slide 3: Today's presenters
Today’s presenters Ignacio de Colmenares Alfredo Avello Chairman & CEO Chief Financial Officer Ence Energía y Celulosa Ence Energía y Celulosa 3
Slide 4: Results Summary
Results Summary Growth and 1Q24 Operating Highlights 1Q24 Financial Results 2Q24 Outlook Diversification Projects Pulp price recovery continued in 66% QoQ EBITDA growth in the European pulp prices currently at Ence Advanced pulp sales continue 1Q24 boosted by strong pulp Pulp business, up to
Slide 5: 1Q24 Operating Highlights
1. 1Q24 Operating Highlights 5
Slide 6: Pulp price recovery continued in 1Q24
Pulp price recovery continued in 1Q24 Boosted by strong pulp demand growth and supply constraints Avg. NET Pulp Price & Cash-Cost (€/t) 800 762 750 700 650 601 578 600 636 522 550 114 €/T 477 500 535 450 484 487 400 455 350 300 1Q23 2Q23 3Q23 4Q23 1Q24 Cash - Cost Avg. Net Pulp Price 15% improvement
Slide 7: Huelva 46 MW and Ciudad Real 50 MW back online in Feb. 2024
Huelva 46 MW and Ciudad Real 50 MW were back online in Feb. 2024 Boosting the renewable energy output in 1Q24 Renewable energy generation at Magnon (GWh) + 65% 232 141 4Q23 1Q24 Huelva 46 MW and Ciudad Real 50 MW biomass power plants were back online in Feb. 2024 following their extraordinary mainte
Slide 8: 2Q24 Outlook
2. 2Q24 Outlook 8
Slide 9: Pulp price improvement continues in 2Q24
Pulp price improvement continues in 2Q24 Cash cost reduction trend in the coming quarters Avg. NET Pulp Price & Cash-Cost (€/t) 800 762 750 700 650 601 578 600 636 522 550 477 500 535 450 484 487 400 455 350 300 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24e Cash - Cost Avg. Net Pulp Price European pulp prices curr
Slide 10: Expected change in the regulation for biomass plants in 2024
Expected change in the regulation for biomass plants in 2024 Will align cash generation with accounting EBITDA Biomass power regulated price and cash conversion Biomass power regulated price and cash conversion Current regulation (€ / MWh) Expected new regulation (€ / MWh) 120 120 120 Future cash co
Slide 11: 1Q24 Financial Results
3. 1Q24 Financial Results 11
Slide 12: 66% QoQ EBITDA growth in the pulp business
66% QoQ EBITDA growth in the pulp business Boosted by the improvement in pulp prices Avg. NET Sales price Cash Cost Pulp sales volume Pulp EBITDA (€/t) (€/t) (,000 t) (€m) + 15% + 7% - 11% + 66% 71 273 31 601 487 243 522 455 19 4Q23 1Q24 4Q23 1Q24 4Q23 1Q24 4Q23 1Q24 79 €/t avg. net pulp price 32 €/
Slide 13: Renewables EBITDA x2 QoQ
Renewables EBITDA x2 QoQ Huelva 46 MW and Ciudad Real 50 MW biomass power plants back online in Feb. 2024 Average revenue per MWh Net operating costs per MWh Energy volume sold Renewables EBITDA (€/MWh) (€/MWh) (GWh) (€m) - 22% - 27% + 65% x2 14 232 274 210 213 154 141 7 4Q23 1Q24 4Q23 1Q24 4Q23 1Q2
Slide 14: 78% QoQ consolidated EBITDA growth
78% QoQ consolidated EBITDA growth Driven by the pulp price improvement and higher renewable energy output Group Revenues (€ m) Group EBITDA (€ m) Attributable Net Income (€ m) + 7% + 78% x2 214 45 200 8 25 4 4Q23 1Q24 4Q23 1Q24 4Q23 1Q24 €14m consolidated revenue growth vs. 4Q23 €20m consolidated E
Slide 15: Positive FCF in 1Q24 before WC and the regulatory collar adjustment
Positive FCF in 1Q24 before WC and the regulatory collar adjustment WC outflow linked to pulp price improvement and higher pulp inventories ahead of Navia´s shutdown Cash Flow Statement 1Q24 (€m) Fluff diversification project Pulp price increase: €22m The difference between As Pontes enginee
Slide 16: Low leverage position vs. our average cycle EBITDA
Low leverage position vs. our average cycle EBITDA Solid cash balance of €252m at 31 Mar. 2024 Pulp business net debt as of 31 Mar. 2024 (€ m) Pulp business debt maturity schedule (€ m) €289m of bilateral loans €130m RCF – Fully available 445 1 Lease contracts €40m of public sector financing €42m IF
Slide 17: Sustainability Master Plan 2024 - 2028
Sustainability Master Plan 2024 - 2028 Includes decarbonization and water resilience plans 1. Asegurar la sostenibilidad de la madera mediante la certificación 1. Health and safety 1. Ence Advanced pulp FSC/PEFC 1. Sustainable forestry 1. Equality, talent development and certification retention 2. S
Slide 18: Growth and diversification projects
4. Growth and diversification projects 18
Slide 19: Growth and diversification projects in the Pulp business
Growth and diversification projects in the Pulp business Without increasing the consumption of wood Status: On track Status: On track Status: Engineering and permitting phase ROCE target: >12% ROCE target: >12% ROCE target: >12% ENCE ADVANCED PULP FLUFF BLEACHED RECYCLED PULP To develop and sell our
Slide 20: Pontevedra Avanza
Pontevedra Avanza Project to boost the efficiency and flexibility of Pontevedra biomill Project to boost the efficiency and flexibility of Pontevedra biomill: Reduce its cash-cost by 50 €/ton Improve its flexibility to use different species of eucalyptus Continue moving from standard pulp to
Slide 21: Growth and diversification projects in Renewables
Growth and diversification projects in Renewables Biogas, renewable thermal energy, and green fuels Status: 8 plants in engineering and permitting Status: Final bidder in 5 contracts Status: Engineering and permitting +12 plants with location and feasibility + 15 contracts in progress to capture bio
Slide 22: Closing Remarks
Closing Remarks Growth and 1Q24 Operating Highlights 1Q24 Financial Results 2Q24 Outlook Diversification Projects Pulp price recovery continued in 66% QoQ EBITDA growth in the European pulp prices currently at Ence Advanced pulp sales continue 1Q24 boosted by strong pulp Pulp business, up to
Slide 23: Appendix
5. Appendix 23
Slide 24: Group Financial Review P&L
Group Financial Review P&L 1Q24 Proforma 1Q23* Figures in € m Pulp Renewables Adjustments Consolidated Pulp Renewables Adjustments Consolidated Total revenue 161,0 53,3 (0,8) 213,6 179,6 82,0 (1,4) 260,2 Other income 4,7 0,6 (0,3) 5,0 4,8 1,3 (0,3) 5,8 Foreign exchange hedging operations results 0,0
Slide 25: Group Financial Review Cash Flow Statement
Group Financial Review Cash Flow Statement 1Q24 Proforma 1Q23* Figures in € m Pulp Renewables Adjustments Consolidated Pulp Renewables Adjustments Consolidated Consolidated profit/(loss) for the period before tax 7,6 3,1 0,4 11,1 7,2 15,5 0,4 23,1 Depreciation and amortisation 17,9 8,2 (0,4) 25,7 15
Slide 26: Group Financial Review Balance Sheet
Group Financial Review Balance Sheet Mar-24 Dec-23 Figures in € m Pulp Renewables Adjustments Consolidated Pulp Renewables Adjustments Consolidated Intangible assets 17,9 33,3 (12,0) 39,2 17,7 33,7 (12,1) 39,3 Property, plant and equipment 610,2 375,0 (7,2) 978,0 617,5 379,0 (7,5) 989,0 Biological a
Slide 27: Alternative Performance Measures (APMs) Pg.1
Alternative Performance Measures (APMs) Pg.1 Ence presents its results in accordance with generally accepted accounting principles, specifically IFRS. In addition, its quarterly earnings report provides certain other complementary metrics that are not defined or specified in IFRS and are used by man
Slide 28: Alternative Performance Measures (APMs) Pg.2
Alternative Performance Measures (APMs) Pg.2 It provides a comparable measure of the business’s profitability and is measured as the difference between the average sales price per tonne, calculated by dividing revenue from the sale of pulp by the number of tonnes sold, and the cash cost. NET FINANCE
Slide 29: Alternative Performance Measures (APMs) Pg.3
Alternative Performance Measures (APMs) Pg.3 NORMALISED FREE CASH FLOW Normalised FCF is the sum of EBITDA, the change in working capital, maintenance capex, net interest payments and income tax payments. It provides a proxy for the cash generated by the Company's operating activities before collect
Slide 30: Delivering value Delivering commitments
Global ESG score: 90/100 Delivering value Delivering commitments
ENCE Energía y Celulosa — Q1 2024 Earnings Presentation on 6ix