Altri, Sgps, S.a. · EURONEXT:ALTR
Altri, Sgps — Altri — Investor Presentation (December 2012)
31 slides from Altri, Sgps's investor presentation, December 2012
Slide 1: Pulp and forest: Presentation on Altri 2012
Pulp and forest Presentation on Altri 2012
Slide 2: Disclaimer
Disclaimer All data contained in this presentation may contain confidential and/or privileged information, and it is exclusively intended for its addressees. Unauthorized copy, reproduction or distribution is strictly prohibited. This presentation is provided “as is” without any express or implied w
Slide 3: Altri's overview
Altri’s overview Business development Growth strategy Market info and data Appendix 3 3
Slide 4: Company profile
Company profile • Pulp and forest Portuguese listed company • Low exposure to Portugal (90% of pulp exported) • One of the most efficient European pulp producers • Ramp up to produce over 900K tones/year • 3 mills in Portugal • 84K ha of forest under management in Portugal – Full FSC and PEFC Certif
Slide 5: Altri's overview
Altri’s overview Business development Growth strategy Market info and data Appendix 5 5
Slide 6: Strategic approach: forest integration
Strategic approach: forest integration Pulp production process Biomass power production Bark, leafs & Wood fibres forest residues Cooked and bleached for pulp Burned to produce electrical power Lignin Burned to produce electrical energy from cogeneration 6
Slide 7: 3 pulp mills in Portugal
3 pulp mills in Portugal Celbi (acquired in 2006) – Bleached Eucalyptus Kraft Pulp – Learning curve concluded – 600K tones/year operational in 2011 Caima (acquired in 1998) – Bleached Eucalyptus Sulphite Pulp – 110K tones/year of market pulp – DP conversion underway Celtejo (acquired in 2005) – BEKP
Slide 8: Forest management
Forest management 84K ha under management in Portugal – 30% self sufficiency rate in 2010 – Mainly focused on eucalyptus globulus Strategic location – High yield locations – 10/12 years growing age – 10 m3 per ha per year Focus on R&D – Over 40 years of experience – Genetic improvements obtained thr
Slide 9: Pulp sales: main markets
Pulp sales: main markets World economy exposure Breakdown 2011 – 91% of total production exported Main markets – Strategic focus on Europe Asia; 7% • #1 market in demand • Lower freight cost Portugal; 9% – Small exposure to the Chinese market Main end uses – Tissue – Printing and writing Europe 84%
Slide 10: Cogen in the pulp mills
Cogen in the pulp mills Pulp mills are self sufficient in power Cogen scheme Wood Cogen involves burning the black liquor at the recovery boiler, generating electrical power Pulp Digester – Sold to the grid in their entirely at a “green” tariff Energy needs Black liquor – all the power needed is acq
Slide 11: Biomass power production
Biomass power production 50% joint venture with EDP Cabeceiras – 62 MW in operation 12.8 MW Mortágua 1 8.6 MW – #1 biomass player in Portugal In study In operation – Consolidated on Altri’s accounts Gondomar through equity method 27.9 MW In study Celtejo 12.8 MW Tariff Mortágua 2 In operation – 106€
Slide 12: Altri's overview
Altri’s overview Business development Growth strategy Market info and data Appendix 12 12
Slide 13: Increasing cash flow generation
Increasing cash flow generation Global pulp market – Sustainable BEKP price at high levels – Sustainable demand growth Altri: increasing capacity and efficiency – Over 900K tones per year in 2012E – High EBITDA margin: 29% in 3Q12 – Cost control and efficiency driven projects – Strategic focus on Eu
Slide 14: Global pulp market
Global pulp market Global hardwood demand grew 5% (CAGR) between 1990 – 2011 European hardwood demand grew 3% (CAGR) between 1990 – 2011 – From 4,8 Mton in 1990 to 9,4 Mton in 2011 (+4,5 Mton) – Mkt share decreased from 50% in 1990 to 35% in 2011 Chinese demand grew 18% (CAGR) between 2000 – 2011 –
Slide 15: Global pulp market: BEKP price
Global pulp market BEKP list price in Europe (1990 to date) 1000 900 800 700 600 Price 500 400 300 200 100 0 Euro USD Source: Hawkins Wright 15
Slide 16: Global pulp market: hardwood demand growth
Global pulp market Global historical hardwood demand growth (% year on year) 12% 10% 8% % 6% 4% 2% 0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Hawkins Wright 16
Slide 17: Global pulp market: European and Chinese demand growth
Global pulp market European and Chinese hardwood demand growth (% year on year) Million ton Western Europe China Source: Hawkins Wright 17
Slide 18: Global pulp market: supply
Global pulp market Supply increased 3,8% (CAGR) between 2005 – 2011 – Mainly LatAm (10% per year, on average) – Decrease in Northern Hemisphere – From High Cost location to Low Cost location Region 2005 2006 2007 2008 2009 2010 2011 2012E CARG Canada 1.750 1.765 1.770 1.680 1.500 1.270 1.235 1.025 -
Slide 19: Global pulp market: price reaction to new capacity
Global pulp market Price reaction to new hardwood capacity 2005 – 2011 2007: + 1.695K ton 2008: + 2.510K ton 2010: + 280K ton 2011: + 930K ton + 1.785 euca + 1,800 euca + 575 euca + 85 euca - 90 Asian hardwood + 710 Asian hardwood - 295 Asian hardwood + 845 Asian hardwood 2006: + 520K ton 2009: + 1.
Slide 20: Altri: Increasing capacity & efficiency
Altri: Increasing capacity & efficiency Optimization underway in Celbi mill – Doubling capacity to 600K ton of BEKP concluded in 2H09 – Debottlenecking projects to increase capacity up to 700K ton with minor CAPEX (below 10 M€/year) – Strong focus on cost management – Reducing wood consumption per t
Slide 21: Altri: Increasing capacity & efficiency
Altri: Increasing capacity & efficiency BEKP focus in Celtejo mill – 141K ton produced in 2011 (swing between NBSK and BEKP) – Strategic focus on BEKP from 2012 onwards – Capacity increase through debottlenecking projects up to a technical limit of 200K ton – Low annual CAPEX needs (4M€/year) DP pro
Slide 22: Evolution of nominal pulp production capacity
Altri: Increasing capacity & efficiency Evolution of nominal pulp production capacity in Altri Thousand tones 847 787 560 540 599 315 255 133 141 115 140 140 115 115 115 114 107 2005 3ºT05 2007 2010 2011 Caima mill Celtejo mill Celbi mill 22
Slide 23: Cash costs CIF per ton
Altri: Increasing capacity & efficiency Cash costs CIF per ton Q1 2012 estimates USD per ton of pulp Celbi 2013E In line with lowest cost producers USD/ton Var costs Fixed costs Freights and marketing Source: Hawkins Wright & Altri 23
Slide 24: Conclusion
Conclusion Pulp market has proven resilient over the last 20 years – Average pulp price around 500€/ton, with a positive linear trend – Global demand around 5%, being China the driving force behind extra growth – Hardwood pulp has been gaining market share over softwood – Between 2005-2011 new 6,2 m
Slide 25: Altri's overview
Altri’s overview Business development Growth strategy Market info and data Appendix 25 25
Slide 26: Global pulp industry overview
Global pulp industry overview Source: PPPC Global pulp demand 2005/2010 Var % 2005 2006 2007 2008 2009 2010 2011 11/10 Bleached softwood 21 750 22 085 22 530 21 605 21 355 22 255 23 005 + 3,5% Bleached hardwood 21 070 22 400 23 555 24 500 24 800 25 130 26 715 + 6,3% Sulphite 1 245 1 220 1 185 1 050
Slide 27: Global pulp industry overview
Global pulp industry overview Source: PPPC Global pulp supply 2005/2010 Var % 2005 2006 2007 2008 2009 2010 2011 11/10 Bleached softwood 23 280 22 870 23 880 24 285 23 470 23 855 25 035 + 4,9% Bleached hardwood 22 730 23 590 25 960 28 600 28 115 28 540 29 810 + 4.4% Sulphite 1 345 1 300 1 245 1 145
Slide 28: Altri's overview
Altri’s overview Business development Growth strategy Market info and data Appendix 28 28
Slide 29: Business structure and shareholders
Business structure and shareholders 100% 99.58% 100% 50%* Celbi Celtejo Caima EDP Bioeléctrica Pulp mill Pulp mill Pulp mill Biomass * Joint venture with EDP Free-Float Major shareholders 58% 205.132 million shares Management 42% 29
Slide 30: 3Q12 quarter indicators
3Q12.quarter indicators —_— 3012/3011 3012/2012 3Q 2011 2Q 2012 thousand euros Varve Varve Sales 114.759 140.094 15.6% 5.3% Senices rendered 2.209 1.739 23,5% Other Income 1.831 1.364 9.0% 22.1% Total Revenues 118.799 143.197 14,9% AT% Costs of sales 46.812 57.115 9,3% -10,5% External supplies and s
Slide 31: 3Q12 balance sheet
3Q12.balance’sheet thousand euro 2011 Biological assets 103.339,5 Tangible assets 460.118,9 Goodw ill 265.531,4 Others 33.057,5 Total non current assets 862.047,3 Inventories 61.728,9 Customers 66.672,8 Cash and cash equivalentes 112.746,9 Others 24.527,9 Total current assets |__ 265.676,5 Total ass