Ence Energia Y Celulosa Sa · BME:ENC
Ence Energia Y Celulosa Sa — Q2 2021 Earnings Presentation
18 slides from Ence Energia Y Celulosa Sa's earnings presentation, Sep 29, 2021
Slide 1: 1H21 Results
1H21 Results 18 September 29th, 2021 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: The National Court annuls the Pontevedra concession extension
The National Court annuls the Pontevedra concession extension Ence will appeal before the Supreme Court On 15 July 2021, the National Court issued a ruling that annuls the extension of the concession over the public domain lands on which the Pontevedra biomill is located, which was granted in 2016
Slide 4: 1H21 business highlights
1H21 business highlights Strong pulp and energy price recovery Strong pulp and energy price Average gross BHKP price in Europe of US$880/t in 1H21, recovery in 1H21 Gross BHKP price in Europe at US$1,140/t in 3Q21, up 68% from the low of 2020 Higher average prices expected in Average pool pric
Slide 5: Strong pulp price recovery in 1H21
Strong pulp price recovery in 1H21 Temporary decoupling between Europe and China due to logistic constraints NET BHKP Prices in China GROSS BHKP Prices in Europe $/t $/t 900 850 1.200 800 10 year average equivalent GROSS price: US$940/t 10 year average NET price: US$620/t 1.100 Using an average indu
Slide 6: No supply increases in 2021; pulp demand set to outgrow supply
No supply increases in 2021 Pulp demand set to outgrow supply over 2022-25 Key Expected Annual Changes in Global Market Pulp Demand and Supply (m t)1 Mn t 2022 2023 2022-23 2024 2022-24 2025 2022-25 EXPECTED ANNUAL MARKET PULP DEMAND GROWTH 1,9 1,9 3,8 1,9 5,7 1,9 7,6 EXPECTED ANNUAL MARKET PULP SUP
Slide 7: Positive operating performance at the Pulp business in 2Q21
Positive operating performance at the Pulp business in 2Q21 Higher production and cost savings offset inflation in raw materials Pulp Production (t) Navia biomill +4.1% +7% production vs. 2Q20 261.758 258.860 269.496 -1% production vs. 1H20 224.411 12 days’ maintenance shutdown in 1Q21 (vs. 7
Slide 8: Extra margin differentiated products account for 14% of pulp sales
Extra margin differentiated products account for 14% of pulp sales 4% reduction in pulp sales in 1H21 due to annual shutdowns in 1Q21 Geographical breakdown of sales Breakdown by end product Differentiated products % of pulp sales % of pulp sales % of pulp sales 7% Other 14% Europe 93% 28% Specialty
Slide 9: Higher renewable energy sales from the two new biomass plants
Higher renewable energy sales from the two new biomass plants Offset by CSP sale in 2020, Huelva 50-MW shutdown in 2Q and one-off hedges Remuneration for investment (€ m) Energy sales volumes (MWh) Average sale price (€/MWh) Puertollano +12% Ex-CSP Fixed price -35.5% +7.3% +2.1% CSP contracts 612,94
Slide 10: Renewables pipeline: MW with grid access and locations secured
Renewables pipeline: 513 MW with grid access and locations secured RTB expected during the coming quarters Auctions Scheme Spanish Royal CIUDAD REAL 50 MW CÓRDOBA 50 MW Decree-Law 23/2020 Biomass Biomass Expected RTB in 1Q22 Expected RTB in 4Q22 Specific by technology Price mechanism: Pay as bid
Slide 11: Strong EBITDA recovery driven by pulp prices
Strong EBITDA recovery driven by pulp prices Net profit includes Pontevedra-related impairments and provisions of €196m Pulp Business EBITDA (€ m) Renewable Energy Business EBITDA (€ m) Group Net Profit (€ m) x4 48.1 +162% ex- -1.1% +24% ex- Ex Pontevedra hedges 22.6 hedges related 7.1 1.9 provision
Slide 12: €176m net debt position maintained
€176m net debt position maintained After lower factoring usage, carry-over payments and Pontevedra concession lease write-off Normalized FCF1 (€ Mn) Strategic Plan payments (€ Mn) Net Debt (€ Mn) -39% -4% -1% 29 178 176 Lease 42 40 contracts 18 €17m 1H20 1H21 1H20 1H21 Dec. 2020 Jun. 2021 Renewable
Slide 13: 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 30 Jun. 2021 (€ m) Pulp business debt maturity schedule (€ m) €145m of convertible bonds 218 3 Lease 335 €125m of bilateral loans 8 contracts 62 16 €64m of publi
Slide 14: 2021 hedges
2021 hedges Pulp and Energy price hedges closed exceptionally in 2020 Dollar/Euro FX Pulp Prices Energy Prices 1Q21: USD77m 1Q21: 55,500 t 1Q21: 166,302 Avg. cap: $1.17/€ Avg. price: $772/t Avg. price: €43.9/MWh Avg. floor: $1.09/€ 2Q21: USD75m 2Q21: 55,500 t 2Q21: 157,248 Avg. cap: $1.19/
Slide 15: Amongst the leaders in sustainability
Amongst the leaders in sustainability Global ESG score: 1H21 Highlights 91/100 Production cost reduction Leadership and differentiation License to operate Risk minimisation Safe & ecologically Climate People & Sustainable efficient operations action Values agroforestry Protecting Health and Safety a
Slide 16: 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 17: 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 18: Delivering value, delivering commitments
Global ESG score: 91/100 Delivering value Delivering commitments
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