Ence Energia Y Celulosa Sa · BME:ENC
Ence Energia Y Celulosa Sa — FY2015 Earnings Presentation
30 slides from Ence Energia Y Celulosa Sa's earnings presentation, Feb 12, 2016
Slide 1: Ence Energía y Celulosa 2015 Results
Ence Energía y Celulosa 2015 Results February 12th, 2016
Slide 2: Index
Index ENCE 2015 Results: DELIVERING VALUE, DELIVERING COMMITMENTS Business Results 2016-2020 Strategic Plan: Launched & On-track Conclusions Fuente: Ence 2
Slide 3: Delivering Value, Delivering Commitments
Ence 2015 Results DELIVERING VALUE, DELIVERING COMMITMENTS 1 Delivery: Pontevedra concession extension granted and 40MW biomass power plant awarded 2 Adjusted EBITDA target delivered: €200 M 3 Recurrent Free Cash Flow totalled: €110 M 4 Cash cost down from €406/t in 2014 to €355/t in 4Q15 Successful
Slide 4: Pontevedra concession extension approved and 40MW biomass power plant awarded
Delivery Pontevedra concession extension approved and 40MW biomass power plant awarded The Ministry of Agriculture and Environment has granted Ence the extension of the concession of its pulp mill in Pontevedra. The extension is granted for 60 years with an investment commitment for €61M at the faci
Slide 5: Adjusted EBITDA target delivered: €200 M
ENCE 2015 Results Adjusted EBITDA target delivered: €200 M Adjusted EBITDA 17 59 43 56 46 93 39 200 183 16 18 140 12 12 11 58 48 48 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Adjusted Sales Price Costs Biomass Adjusted 1Q14 EBITDA 2014 volumes reduction EBITDA 2015 4Q15 Adjusted EBITDA of €59 M, €200 M for
Slide 6: Recurrent Free Cash flow totalled €110 M
ENCE 2015 Results Recurrent Free Cash flow totalled €110 M High conversion of €200 M Adjusted EBITDA into €110 M of Recurrent Free Cash Flow Allowing for: € 29 M expansion capex, mainly in efficiency gains and pulp capacity increases according to the announced restructuring plan € 36 M dividend paym
Slide 7: Reducing cash cost from €406/t down to €355/t in 4Q15
ENCE 2015 Results Reducing cash cost quarter on quarter from €406/t down to €355/t in 4Q15 €355/t Cash Cost in 4Q15 Cash Cost Evolution (€/t) 406 24 Cash cost continues its reduction, once 29 39 investments on efficiency gains and 359 capacity increases are completed. 23 101 28 355 38 24 Technical s
Slide 8: Pulp prices remain strong fuelled by solid demand
Pulp environment Pulp prices remain strong fuelled by solid demand… Stability of Pulp price vs other Commodities 110 CrudeCrude (INDEX) Oil (Brent $/bbl) Oil (Brent ICE Near Term $/bbl) - Total Return 100 Cooper (INDEX) (LME Copper Cash (LME Cash$/t) $/t) - Total Return 90 Iron Ore (INDEX) Iron (NYM
Slide 9: …benefiting from a favorable exchange rate…
Pulp environment …benefiting from a favorable exchange rate… Pulp Price Evolution: USD & EUR $/t €/t $/€ 900 1.60 814 794 804 803 800 789 770 1.367681.37751 1.37 1.33 749 780 766 1.32 1.31 1.33 727 734 723 730 1.40 703 694 1.25 663 700 623 1.13 1.11 1.20 Ence has implemented a hedging 597 597 588 1,
Slide 10: …and a balanced supply – demand market structure
Pulp environment …and a balanced supply – demand market structure Per-capita consumption of tissue (Kg/person) The new supply mainly announced by Latam 24 players will be offset as demand is expected to maintain a growth trend above 2% in line with last 15 15 5 years. 11 Strong Chinese BEKP demand i
Slide 11: Industry players estimated average cash cost
Pulp environment Industry players estimated average cash cost European Pulp Market share and delivered cash costs BSKP: 500 8.3 Mt 450 €434/t 400 Market: 350 €350/t Nordics 16 Mt Iberian 300 €263/t 8.3 Mt 2.0 Mt BHKP: 250 Latam 5.5 Mt 7.5 Mt 200 0 2 4 6 8 10 12 14 16 (*) Exchange rate R/$: 4.05, $/€
Slide 12: Successful financial restructuring and business ring-fencing accomplished
Debt Structure Successful financial restructuring and business ring-fencing accomplished New bond €250 at 5.375%, due end of 2022 Increasing cash available in the Biomass Reduction of the financial cost: 187.5 bps in the new business by €30 M bond and 175 bps on the RCF Reduction of the financial co
Slide 13: Attractive shareholder remuneration
Dividend Policy Attractive shareholder remuneration Maximizing shareholder remuneration Annual accrued dividends (€M) Maintaining the debt position down to conservative consolidated leverage levels of €0.15/share 1.2x Net Debt/Adjusted EBITDA at the end of €0.14/share 2015 €0.13/share Value creation
Slide 14: Index
Index ENCE 2015 Results: DELIVERING VALUE, DELIVERING COMMITMENTS Business Results 2016-2020 Strategic Plan: Launched & On-track Conclusions Fuente: Ence 14
Slide 15: 2015 Consolidated Results (€M)
2015 Business Results 2015 Consolidated Results (€M) Consolidated P&L (€M) Includes €12 M capital Includes €38 M one-off gain from the Asset expenses related to the Disposal Program project and bond refinancing 664 464 8 9 200 192 67 133 66 17 50 Total Sales Cost Adjusted EBITDA Provisions and EBITD
Slide 16: 2015 Results by business (€M)
2015 Business Results 2015 Results by business (€M) Pulp Business P&L (€M) 570 400 12 6 170 158 56 108 42 16 49 Total Sales Cost Adjusted EBITDA Provisions and EBITDA Amortizations Result on disposal EBIT Financial result Taxes Net result other non recurrent of fixed assets Energy Business P&L (€M)
Slide 17: Pulp mills increased sales by 19%…
Pulp Business Pulp mills increased sales by 19%… 2015 revenues up to €570 M Pulp, Forestry and Electricity sales at pulp mills (€M) Our current Northern mills sales increased by 19% from €479 M in 2014 up to €570 M in 2015, mainly due to higher pulp prices and a more favourable 629 exchange rate as
Slide 18: … also increasing its Adjusted EBITDA contribution
Pulp Business … also increasing its Adjusted EBITDA contribution Adjusted EBITDA x5 up to €170 M Pulp Business Adjusted EBITDA (€M) Pulp Adjusted EBITDA strongly €170 M increased due to a positive execution of the Competitiveness Recovery Plan, strong exchange rate and strong worldwide demand €36 M
Slide 19: Continues to significantly increase sales by 66%…
Energy Business Continues to significantly increase sales by 66%… Energy production (MWh) Energy production sold in MWh increased by 615,397 39% from 2014 to 2015 due to the contribution of the new Mérida 20MW and Huelva 41 MW 441,461 plants 2014 2015 Energy revenues (€M) Revenues increased by 66% o
Slide 20: …also reflecting a higher EBITDA contribution
Energy Business …also reflecting a higher EBITDA contribution Adjusted EBITDA x1.4 up to €31 M Energy Business Adjusted EBITDA (€M) 31 Energy Business EBITDA increased after new plant additions compared to 2014, pushed by a 19% increase of the average income from 22 €132/MWh to €158/MWh 2014 2015 Fu
Slide 21: €43 M net debt reduction maintaining a strong liquidity
Debt Structure €43 M net debt reduction maintaining a strong liquidity Net debt evolution (€M) 284 241 Reducing its net debt position by €43 M 106 during 2015, after a €36 M dividend 60 payment 178 181 Increasing liquidity position up to €259M based on a strong free cash flow 2014 2015 Pulp business
Slide 22: €32 M cash from the Asset Disposal Program in 2015
Asset Disposal Program €32 M cash from the Asset Disposal Program in 2015 Asset Disposal Program (€M) Energy Crops Plantations (€M) 78 4 50 39 20 2 6 24 32 35 20 26 Initial Book Sold Reclassified Provisioned Final Book Value Value Sold Book Value Cash in Energy crops Huelva mill industrial assets Po
Slide 23: Index
Index ENCE 2015 Results: DELIVERING VALUE, DELIVERING COMMITMENTS Business Results 2016-2020 Strategic Plan: Launched & On-track Conclusions Fuente: Ence 23
Slide 24: Launched & on-track
ENCE 2016-2020 Strategic Plan Launched & on-track Scenario at $720/t and 1.25$/€ Scenario at $800/t and 1.05 $/€ 2015(1) 2016 2017 2018 2019 2020 2015(1) 2016 2017 2018 2019 2020 Cash Cost €/t(2) 362 192 111 344 111 339 111 337 329 329 362 192 111 344 111 339 111 337 329 329 EBITDA (M€) 111 132 145
Slide 25: Pulp Business Strategic Plan
ENCE 2016-2020 Strategic Plan Pulp Business Strategic Plan Pontevedra Concession extension granted Optionally 40 MW biomass power plant awarded NAVIA PONTEVEDRA € 33 M in process improvements and cost €12 M in process improvements and cost reductions reductions Pulp investments: € 131 M investment i
Slide 26: Energy Business Strategic Plan
ENCE 2016-2020 Strategic Plan Energy Business Strategic Plan Net debt / EBITDA ≤ 5 EPC + Project Finance Countries "investment grade" and high energy prices New Projects Spain IRR > 10% Energy New Projects Chile IRR > 15% Investments: €325 M New Projects Colombia IRR > 19.3% New Projects India IRR >
Slide 27: Index
Index ENCE 2015 Results: DELIVERING VALUE, DELIVERING COMMITMENTS Business Results 2016-2020 Strategic Plan: Launched & On-track Conclusions Fuente: Ence 27
Slide 28: Delivering Value, Delivering Commitments
Ence 2015 Results DELIVERING VALUE, DELIVERING COMMITMENTS 1 Delivery: Pontevedra concession extension granted and 40MW biomass power plant awarded 2 Adjusted EBITDA target delivered: €200 M 3 Recurrent Free Cash Flow totalled: €110 M 4 Cash cost down from €406/t in 2014 to €355/t in 4Q15 Successful
Slide 29: 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 30: Fuente: Ence
ence ENERGIA & CELULOSA 30
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