Ence Energia Y Celulosa Sa · BME:ENC
Ence Energia Y Celulosa Sa — 9M22 Earnings Presentation
24 slides from Ence Energia Y Celulosa Sa's earnings presentation, Oct 28, 2022
Slide 1: 9M22 Results
9M22 Results 18 28th October, 2022 Global ESG score: 91/100
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: 9M22 Business Highlights
9M22 Business Highlights Strong Free Cash Flow generation continues Strong EBITDA growth (up to €208m) and FCF generation (€245m) driven by strong pulp and energy prices LTM ROCE1 improves to 17% New dividend policy allows for a 100% pay-out ratio, equivalent to €67m Pontevedra biomill is ex
Slide 4: Strong consolidated FCF generation and deleveraging continues
Strong consolidated FCF generation and deleveraging continues Driven by strong pulp and energy prices Short Cash Flow Statement 9M22 (€m) 82 17 306 291 15 18 4 269 33 241 241 245 24 245 208 EBITDA Regulatory collar Operating cash Working Capital Lower factoring Maintenance capex Net interest Tax pay
Slide 5: Increased shareholder remuneration
Increased shareholder remuneration The new dividend policy allows for a 100% pay-out ratio Amount based on cash 3 Annual Payments available for distribution Ensuring a leverage below: 1. First interim dividend of gross 0.054 euros per share was paid in May €13m 2.5 x Net Debt / EBITDA for the Pulp b
Slide 6: Temporary downtime at Pontevedra's biomill due to low water levels
Temporary downtime at Pontevedra´s biomill due to low water levels Mitigated by higher pulp prices and FX improvement in 2H22 We expect that Pontevedra biomill will be able to initiate its ramp-up process around the second week of November combining an innovative solution that we are testing for dro
Slide 7: Tight supply continues to support strong pulp prices
Tight supply continues to support strong pulp prices Alongside €/USD FX improvement Avg. annual Pulp Prices Europe Avg. annual BHKP Price Europe Consensus US$/t as of September 2022, in US$/t Sources: - Annual average FOEX gross price in Europe Source: RISI, Hawkins Wright, Brian McClay and Norexeco
Slide 8: 676,000 tons sold in 9M22
676,000 tons sold in 9M22 Differentiated and higher value-added products accounted for 18% of sales Geographical sales breakdown Breakdown by end product Differentiated products % of pulp sales % of pulp sales % of pulp sales 6% Other 18% Europe 94% 30% Specialty Tissue 49% papers vs. 15% in 9M21 vs
Slide 9: Higher operating margins in the Pulp business
Higher operating margins in the Pulp business Despite the widespread inflation in raw materials Net pulp price, cash cost and operating margin (€/t) 800 732 €/t 700 Operating 214 €/t 600 Margin 516 €/t 15 €/t The temporary downtime at Pontevedra´s 500 139 €/t biomill since July 20 due to the low r
Slide 10: Enhanced operating cash inflow in the Renewable business
Enhanced operating cash inflow in the Renewable business Underpinned by higher output and energy prices Pool price + Return on the operations (Ro) Energy Sales Operating cash inflow (€/MWh) (GWh) (€m) + 45% +19% X2 Regulatory Collar 189 EBITDA 111 71 3 71 1,190 15 130 1,002 52 47 186 96 18 83 1 34 9
Slide 11: Strong EBITDA growth, up to €208m
Strong EBITDA growth, up to €208m Boosted by strong pulp and energy prices Pulp Business EBITDA (€ m) Renewable Business EBITDA (€ m) Attributable Net Income (€ m) 67 +56% 111 x7 96 Regulatory 40 collar provision 71 1 reversal 56 14 1 1 (193) 9M21 9M22 9M21 9M22 9M21 9M22 1) 9M21 figures includes th
Slide 12: Our net cash position provides full flexibility to seize growth opportunities
Our net cash position provides full flexibility to seize growth opportunities 52% of the convertible bond already repurchased at the end of the period Pulp business net debt as of 30 Sep. 2022 (€ m) Pulp business debt maturity schedule (€ m) €77m of convertible bonds 97 243 Lease contracts €95m of b
Slide 13: A leader in sustainability
A leader in sustainability Global ESG score: 9M 2022 Highlights 91/100 Production cost reduction Leadership and differentiation License to operate Risk minimisation Safe & efficient Climate People & Sustainable operations action Values agroforestry Protecting Health and Safety Committed to mitigate
Slide 14: The Supreme Court delays its decision on Pontevedra concession
The Supreme Court delays its decision on Pontevedra concession Ruling expected in the coming months Update Significance 2 available alternatives On July 2021, the Spanish National Court has Pontevedra pulp mill accounts for: Navia 100 annulled the land concession on which our Pontevedra bio-mill is
Slide 15: Innovative solution for drought situations at Pontevedra
Innovative solution for drought situations at Pontevedra Regenerating the water from our effluent and the adjacent public WWTP We are testing an innovative solution for drought situations at Pontevedra that will allow us to regenerate the water from the biomill´s effluent and that from the adjacent
Slide 16: Pulp business investment plan
Pulp business investment plan Modular and adaptable investments with a targeted ROCE >12% Navia Excelente project As Pontes project Differentiated Diversification Diversification into Decarbonization Products into Fluff Recovered Fibers + + + First phase Targeted Startup: 2023 2024 2024 2026 Estimat
Slide 17: 813 MW renewable pipeline in progress and growing
813 MW renewable pipeline in progress and growing Strong track record in pipeline development and selective asset rotation Portfolio location Puertollano II 50 MW Andújar 100 MW Biomass PV Environmental Environmental √ permit √ permit 373 PV pipeline almost RTB Huelva 10 MW Córdoba 50 MW PV Biomass
Slide 18: Further growth opportunities for Magnon and Ence
Further growth opportunities for Magnon and Ence Biomass industrial services and biogas production from organic waste biomass industrial services biogas Biomass has a great potential to help decarbonize the We are analyzing the potential production of biogas from industry organic waste. Magnon
Slide 19: Appendix 1: P&L
Appendix 1: P&L 9M22 9M21 Figures in € m Pulp Energy Adjustments Consolidated Pulp Energy Adjustments Consolidated Total revenue 553,8 235,8 (2,5) 787,1 471,8 118,8 (2,1) 588,5 Other income 15,9 6,0 (0,8) 21,1 8,4 6,8 (1,2) 14,0 Foreign exchange hedging operations results (16,5) - - (16,5) (41,9) -
Slide 20: Appendix 2: Cash Flow
Appendix 2: Cash Flow 9M22 9M21 Figures in € m Pulp Energy Adjustments Consolidated Pulp Energy Adjustments Consolidated Consolidated profit/(loss) for the period before tax 68,9 11,1 1,3 81,3 (167,2) (22,0) 2,1 (187,1) Depreciation and amortisation 36,7 35,5 (0,6) 71,6 46,4 27,9 (2,1) 72,2 Changes
Slide 21: 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 22: Alternative Performance Measures (APMs) Pg.2
Alternative Performance Measures (APMs) Pg.2 OPERATING PROFIT PER TONNE OF PULP The operating profit is a yardstick for the operating profit generated by the Pulp business without taking into account asset depreciation and amortisation charges, impairment losses on non-current assets and gains or lo
Slide 23: Alternative Performance Measures (APMs) Pg.3
Alternative Performance Measures (APMs) Pg.3 FREE CASH FLOW Ence reports free cash flow as the sum of its net cash flows from operating activities and its net cash flows from investing activities. Free cash flow provides information about the cash generated by the Group's operating activities that i
Slide 24: Delivering value Delivering commitments
Global ESG score: 91/100 Delivering value Delivering commitments