Ence Energia Y Celulosa Sa · BME:ENC
Ence Energia Y Celulosa Sa — Q1 2021 Earnings Presentation
19 slides from Ence Energia Y Celulosa Sa's earnings presentation, Apr 28, 2021
Slide 1: 1Q21 Results
1Q21 Results 18 April 28th, 2021 Global ESG score: 82/100
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: Highlights of 1Q21
Highlights of 1Q21 Rapid pulp price recovery now underway NET BHKP pulp prices in China have recovered over 70% from their minimum in 2020 and is already at 780 US$/t Rapid pulp price recovery now underway amidst a tight supply GROSS BHKP pulp prices in Europe have already recovered 38% from the
Slide 4: Rapid pulp price recovery amidst a tight supply and demand balance
Rapid pulp price recovery amidst a tight supply and demand balance Additional price increases expected in Europe, to match current pulp prices in China NET BHKP Prices in China GROSS BHKP Prices in Europe $/t $/t 900 850 1.100 800 1.050 10 year average equivalent GROSS price: 940 US$/t 10 year avera
Slide 5: No new capacity additions in 2021; pulp demand set to outgrow supply over 2020-25
No new capacity additions in 2021 Pulp demand set to outgrow supply over 2020-25 Expected Annual Changes in Global Market Pulp Supply and Demand (Mn t)1 Mn t 2021 2022 2020-22 2023 2020-23 2024 2020-24 2025 2020-25 ESTIMATED ANNUAL MARKET PULP DEMAND CHANGE 1.9 1.9 3.8 1.9 5.7 1.9 7.6 1.9 9.5 ESTIMA
Slide 6: Annual maintenance shutdowns at both pulp biomills in 1Q21 vs. 3Q20
Annual maintenance shutdowns at both pulp biomills in 1Q21 vs. 3Q20 Resulted in lower pulp production and higher cash cost Pulp Production (t) Pontevedra biomill -14.3% -20% production vs. 1Q20 12 days maintenance shutdown in 261,758 1Q21 (vs. 25 days in 3Q20) 224,411 Next maintenance shutdown
Slide 7: 10% lower pulp sales with a better commercial mix
10% lower pulp sales with a better commercial mix Higher sales to the European market and of Ence´s differentiated products Geographical distribution of sales Breakdown by end product Differentiated products % of pulp sales % of pulp sales % of pulp sales 5% Other 12% Europe 95% Tissue 51% 32% Speci
Slide 8: Deconsolidation of Puertollano CSP plant
Deconsolidation of Puertollano CSP plant Partially offset by 29% higher Renewable Energy sales and better regulated sale price Return on Investment (Mn€) Energy Volume Sold (MWh) Average sale price (€/MWh) Puertollano CSP +29% Ex-CSP -35.9% +26.1% +6.4% 15.9 258,436 325,795 102.7 96.6 10.2 1Q20 1Q21
Slide 9: Renewables pipeline: 505 MW
Renewables pipeline: 505 MW To be progressively built as from 2022, subject to public auctions or PPA´s CIUDAD REAL 50 MW Auctions Scheme Spanish Royal Biomass CIUDAD REAL 25 MW Decree-Law 23/2020 RTB in 3Q21 Biomass Hybridization RTB in 4Q21 Specific by technology Price mechanism: Pay as bid HU
Slide 10: 1Q21 Financial Results
1Q21 Financial Results Driven by annual shutdowns and the Puertollano CSP plant deconsolidation Pulp Business EBITDA (€ Mn) Renewable Energy Business EBITDA (€ Mn) Group Net Income (€ Mn) +51% -25% +13% Ex. +18% Puertollano CSP 8.2 11.3 5.4 8.5 (9.6) (11.8) 1Q20 1Q21 1Q20 1Q21 1Q20 1Q21 €8.2 Mn EBIT
Slide 11: 1Q21 Free Cash Flow and Net Debt change
1Q21 Free Cash Flow and Net Debt change Driven by the reduction of factoring lines and carry over payments Normalized FCF1 (€ Mn) Strategic Plan payments (€ Mn) Net Debt (€ Mn) n.s -13% +28% 16 32 227 28 178 Lease contracts €46Mn (21) 1Q20 1Q21 1Q20 1Q21 Dec. 2020 Mar. 2021 Renewable Energy Pulp Ren
Slide 12: Strong balance sheet
Strong balance sheet Low leverage, high liquidity, long-term maturities and no covenants in the Pulp business Pulp business leverage as of 31 Mar. 2021 (€ Mn) Pulp business Debt Maturity Calendar (€ Mn) €144 Mn Convertible bond 482 241 Lease €228 Mn Bilateral loans contracts 45 Leverage: 2 8 4.5 x €
Slide 13: Current hedges
Current hedges To mitigate the volatility in the Pulp and Energy businesses Dollar/Euro FX Pulp Price Energy Price Q1 2021: USD 77 Mn Q1 2021: 55,500 t Q1 2021: 127,381 Avg. cap: 1.17 $ /€ Avg. price: 772 $/t Avg. price: 43.4 €/MWh Avg. floor: 1.09 $ /€ Q2 2021: USD 75 Mn Q2 2021: 55,500 t Q
Slide 14: Amongst the leaders in sustainability
Amongst the leaders in sustainability Global ESG score: Highlights 1Q21 82/100 Production cost reduction Leadership and differentiation License to operate Risk minimization Safe & ecologically Climate People & Sustainable efficient operations action Values agroforestry Protecting Health and Safety a
Slide 15: Legal status of Pontevedra's biomill
Legal status of Pontevedra’s biomill The first resolution of the National Court is expected in the coming months In January 2016 the National Directorate of The 1958 biomill's original concession was extended for 60 years (starting November 8 th 2013) by the National Directorate of Coasts granted
Slide 16: Closing Remarks
Closing Remarks Rapid pulp price recovery now underway Pulp prices are recovering rapidly in 2021 Additional pulp price increases are expected in Europe Pulp business operating improvements should continue in 2021 2021 Expected Pulp sales (t) 2021 Expected Cash Cost (€/t) 1,050,000 (+3% vs. 20
Slide 17: 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 18: Alternative Performance Measures (APMs) Pg.2
Alternative Performance Measures (APMs) Pg.2 Normalised free cash flow provides a proxy for the cash generated by the company's operating activities before collection of proceeds from asset sales; this cash represents the amount available for investments other than maintenance capex, for shareholder
Slide 19: Delivering value, delivering commitments
Global ESG score: 82/100 Delivering value Delivering commitments
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