Ence Energia Y Celulosa Sa · BME:ENC
Ence Energia Y Celulosa Sa — Q2 2024 Earnings Presentation
31 slides from Ence Energia Y Celulosa Sa's earnings presentation, Jul 31, 2024
Slide 1: 2Q24 Results
2Q24 Results 18 31 July 2024 Global ESG score: 93/100
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 2Q24 Operating Highlights 2Q24 Financial Results 3Q24 Outlook Diversification Projects ▪ Ence Advanced pulp sales continue ▪ Pulp price improvement continued in ▪ European PIX pulp prices ▪ x7 YoY EBITDA growth in the Pulp to gain market share. Aim: to reach 2Q24 boosted b
Slide 5: 2Q24 Operating Highlights
1. 2Q24 Operating Highlights 5
Slide 6: 254 €/t operating margin in 2Q24
254 €/t operating margin in 2Q24 Boosted by the pulp price improvement and cash cost reduction Avg. NET Pulp Price & Cash-Cost (€/t) 800 762 728 750 700 650 601 578 600 254 €/T 636 522 550 477 500 535 450 484 487 474 400 455 350 300 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Cash - Cost Avg. Net Pulp Price ▪ 26%
Slide 7: New methodology to update quarterly the Ro cashed by biomass plants
New methodology to update quarterly the Ro cashed by biomass plants The former regulatory collar is eliminated, improving the cash generation profile Magnon regulated sales price (€/MWh) Accounting impact on 1Q24 consolidated results (Mn€) 120 100 33 (10) 80 Non cash 22 Cash in 60 1Q24 2Q24 40 20 0
Slide 8: 3Q24 Outlook
2. 3Q24 Outlook 8
Slide 9: Pulp price and cash cost flattening out in 3Q24
Pulp price and cash cost flattening out in 3Q24 Pointing to a strong operating margin and cash flow generation in 3Q24 Avg. NET Pulp Price & Cash-Cost (€/t) 800 762 750 728 700 650 601 578 600 636 522 550 477 500 535 450 484 487 474 400 455 350 300 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24e Cash - Cost Avg
Slide 10: First interim dividend of €26m against 2024 Results
First interim dividend of €26m against 2024 Results A second interim dividend to be decided by the end of October Dividend policy Firs interim dividend against 2024 results: Amount based on cash ▪ Total gross amount €26m available for distribution ▪ Equivalent to a gross € 0,107 /share Ensuring a le
Slide 11: 2Q24 Financial Results
3. 2Q24 Financial Results 11
Slide 12: x7 YoY EBITDA growth in the Pulp business
x7 YoY EBITDA growth in the Pulp business Boosted by the improvement in pulp prices and cash cost reduction Avg. NET Sales price Cash Cost Pulp sales volume Pulp EBITDA (€/t) (€/t) (,000 t) (€m) + 26% - 11% + 4% x7 71 61 728 534 256 474 245 578 8 2Q23 2Q24 2Q23 2Q24 2Q23 2Q24 2Q23 2Q24 150 €/t avg.
Slide 13: 10% YoY EBITDA growth in the Renewables business
10% YoY EBITDA growth in the Renewables business Driven by higher energy volumes and lower operating costs Average revenue per MWh Net operating costs per MWh Energy volume sold Renewables EBITDA (€/MWh) (€/MWh) (GWh) (€m) - 18% - 20% + 24% + 10% 4,6 4,2 173 152 311 142 121 250 2Q23 2Q24 2Q23 2Q24 2
Slide 14: x5 YoY consolidated EBITDA growth
x5 YoY consolidated EBITDA growth Boosted by the improvement in pulp prices and the reduction of operating costs Group Revenues (€ m) Group EBITDA (€ m) Attributable Net Income (€ m) + 23% x5 66 245 23 200 (17) 12 2Q23 2Q24 2Q23 2Q24 2Q23 2Q24 €45m consolidated revenue growth vs. 2Q23 €54m consolida
Slide 15: €24m FCF 2Q24
€24m FCF 2Q24 Including €12m WC outflow and €10m growth capex Cash Flow Statement 2Q24 (€m) ▪ €27m WC increase in the Pulp business driven by ▪ Fluff diversification project higher pulp prices ▪ Pontevedra Avanza engineering ▪ €15m WC reduction in the Renewable business, ▪ Biomethane plants engineer
Slide 16: Low leverage position vs. our average cycle EBITDA of €175m
Low leverage position vs. our average cycle EBITDA of €175m1 Net debt down to €279m with a solid cash balance of €281m at 30 Jun. 2024 Pulp business net debt as of 30 Jun. 2024 (€ m) Pulp business debt maturity schedule (€ m) €288m of bilateral loans €130m RCF – Fully available 446 1 Lease contracts
Slide 17: ENCE: industry leader in sustainability
ENCE: industry leader in sustainability Global ESG score: Highlights Q2 2024 93/100 Safe and Eco- Bioproducts & Responsible Positive social efficient operations ecosystem services supply chain impact Potential for topline To become preferred To grant business For operational cost improvement supplie
Slide 18: Growth and diversification projects
4. Growth and diversification projects 18
Slide 19: Diversification projects in the Pulp business
Diversification projects in the Pulp business Without increasing the consumption of wood Status: On track Status: On track ROCE target: >15% ENCE ADVANCED PULP FLUFF To diversify Navia’s product range into Fluff To develop and sell our Ence Advanced pulp for the absorbent hygienic products products,
Slide 20: Efficiency and diversification projects in the Pulp business
Efficiency and diversification projects in the Pulp business Without increasing the consumption of wood Status: Engineering and permitting Status: Engineering and permitting ROCE Status: Engineering and permitting ROCE target: >15% target: >12% ROCE target: >12% RENEWABLE PACKAGING PONTEVEDRA AVANZA
Slide 21: Biomethane pipeline status
Growth and diversification projects in Renewables 42 biomethane projects with a required ROCE >12% BIOMETHANE BUSINESS Working on 42 biomethane projects in Spain Biomethane generation from the recycling of local agricultural and livestock biomass, including the associated sustainability certificate
Slide 22: Renewable thermal energy pipeline status
Growth and diversification projects in Renewables 14 renewable thermal energy projects with a required ROCE >11% RENEWABLE THERMAL ENERGY 1 renewable thermal energy contract in operation and 14 projects under negotiation RENEWABLE THERMAL ENERGY PIPELINE STATUS Development and operation of comprehen
Slide 23: Closing Remarks
Closing Remarks ▪ We expect a strong pulp operating margin and cash flow generation in 3Q24 ▪ The new regulation for biomass plants improves our cash flow generation profile ▪ Biomass operating costs reduction should continue in 3Q24 ▪ A first interim dividend of €26m will be paid on 7 Aug. A second
Slide 24: Appendix
5. Appendix 24
Slide 25: Group Financial Review P&L
Group Financial Review P&L 1H24 1H23 Figures in € m Pulp Renewables Adjustments Consolidated Pulp Renewables Adjustments Consolidated Total revenue 358.9 91.4 (1.8) 448.5 335.1 125.7 (2.0) 458.8 Other income 10.9 2.6 (0.6) 12.9 14.8 3.3 (0.6) 17.5 Foreign exchange hedging operations results 0.3 - -
Slide 26: Group Financial Review Cash Flow Statement
Group Financial Review Cash Flow Statement 1H24 1H23 Figures in € m Pulp Renewables Adjustments Consolidated Pulp Renewables Adjustments Consolidated Consolidated profit/(loss) for the period before tax 44.2 (15.1) 0.8 29.9 (11.5) 7.9 0.8 (2.8) Depreciation and amortisation 35.0 16.4 (0.8) 50.6 31.3
Slide 27: Group Financial Review Balance Sheet
Group Financial Review Balance Sheet Jun-24 Dec-23 Figures in € m Pulp Renewables Adjustments Consolidated Pulp Renewables Adjustments Consolidated Intangible assets 18.4 33.7 (11.8) 40.2 17.7 33.7 (12.1) 39.3 Property, plant and equipment 611.0 371.5 (6.9) 975.5 617.5 379.0 (7.5) 989.0 Biological a
Slide 28: 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 29: 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 30: 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 31: Delivering value Delivering commitments
Global ESG score: 93/100 Delivering value Delivering commitments
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