Ence Energia Y Celulosa Sa · BME:ENC
Ence Energia Y Celulosa Sa — Q3 2016 Earnings Presentation
21 slides from Ence Energia Y Celulosa Sa's earnings presentation, Oct 27, 2016
Slide 1: 3Q 2016 Results
3Q 2016 Results 27 October 2016
Slide 2: Index
Index Highlights 3Q 2016 Results Summary Fuente: Ence 2
Slide 3: Highlights
Highlights Sustained strong worldwide demand for market pulp with a 2.8% growth in 9M16 vs. 9M15, with China 1 showing a 12.4% YOY growth Continued cash cost improvement in 3Q16, down to €354.8/t, following the successful implementation 2 of efficiency investments and capacity increase in Navia, in
Slide 4: Sustained strong market pulp demand growth in 9M16 (+2.8%)
Sustained strong market pulp demand growth in 9M16 (+2.8%) Led by eucalyptus pulp (+4.5%) Market pulp YOY demand evolution BEKP Chinese demand growth evolution 2.0 % 3.7 % 2.8 % 34.3% 33.5% 2.6 % 33.1 Mt 33.8 Mt 35.0 Mt 36.0 Mt 32.3 Mt 15.3% 12.0% 12.6% 12.2% 4.5% 5.8% 6.0% 10.9% 8.6% -2.0% -3.2% Ac
Slide 5: Continued cash cost improvement in 3Q16, down to €354.8/t
Continued cash cost improvement in 3Q16, down to €354.8/t €350/t cash cost expected for 4Q16 Cash cost breakdown analysis (€/t) 365.0 379.6 366.8 354.8 28.1 30.6 26.1 350 28.1 24.7 27.8 28.6 30.2 115.1 127.3 121.6 110.1 193.9 193.5 190.4 189.8 3Q15 1Q16 2Q16 3Q16 4Q16E Wood cost Conversion costs Com
Slide 6: Navia is already one of the most competitive pulp mills in Europe
Navia is already one of the most competitive pulp mills in Europe Downward trend in Pontevedra`s cash cost should follow as from 2017 Cash cost breakdown analysis by mill (€/t) 425.8 382.1 378.1 388.4 387.0 348.1 347.0 354.9 327.0 320.0 3Q15 1Q16 2Q16 3Q16 4Q16E Navia Pontevedra The 2016-2020 Strate
Slide 7: Strong operating performance of the Energy business in 3Q16
Strong operating performance of the Energy business in 3Q16 In line with Ence’s strategy to maximize the regulatory cap of 6,500h Energy business operating performance x2 € 9.3 M 1,816 h 42 € € 7.7 M 30 € 1,228 h 31 € 944 h € 4.3 M 1Q16 2Q16 3Q16 Average operating hours Average pool price €/MWh Adju
Slide 8: €7.7M Net Debt reduction vs. December 2015, down to €233.5M
€7.7M Net Debt reduction vs. 31 December 2015, down to €233.5M After dividend payment of €24.9M and €8.6M share buyback program Annual Net Debt reduction as of September 30th, 2016 5.9 8.6 24.9 47.1 241.2 233.5 Net debt as of Free cash flow Dividend Share buyback Accrued interest Net debt as of Dece
Slide 9: Asset divestments in 9M16 for a total amount of €38M
Asset divestments in 9M16 for a total amount of €38M €17.6M collected in 3Q16 Asset divestments book value breakdown (€M) In 9M16 Ence agreed the sale of 1,739 hectares for a total 78 amount of €38M with an 4 estimated capital gain of €16M. 39 2 50 20 €25M already collected in 6 24 9M16 and the rema
Slide 10: Index
Index Highlights 3Q 2016 Results Summary Fuente: Ence 10
Slide 11: Key Figures 3Q 2016
Key Figures 3Q 2016 Consolidated 3Q key figures (€M) 139.0 140.5 Adjusted EBITDA was up 26.1 32.7 25.1% quarter-over-quarter 5.9 20.1 12.9 in 3Q16 at €32.7m, fuelled -2.6 by both Pulp and Energy Total net Adjusted EBIT Net result businesses. revenues EBITDA 2Q16 3Q16 Consolidated 9M figures (€M) 486
Slide 12: Pulp business Operating performance
Pulp business Operating performance Average selling pulp price (€/t) Pulp sales volume (t) Cash cost (€/t) +1.8% 1Q16 one- 652,389 663,879 367 offs 540 +0.5% -12.1% 5.1 474 365 362 9M15 9M16 9M15 9M16 9M15 9M16 Adjusted EBITDA (€M) 109 €34M YOY reduction in Adjusted EBITDA following: 75 12.1% lower
Slide 13: Pulp business P&L
Pulp business P&L 9M 2016 P&L (€M) 9.5 8.5 4.0 74.5 2.8 66.0 34.7 36.8 10.7 6.7 22.3 Adjusted Non recurent EBITDA Capital gains Industrial Depreciation EBIT Financial Other financial Taxes Net profit EBITDA expenses assets expenses result reclassification €9.5M capital gains from the asset divestmen
Slide 14: Pulp business Cash Flow generation
Pulp business Cash Flow generation 9M 2016 Cash Flow (€M) 24.9 13.6 0.6 14.3 74.5 6.6 4.7 59.5 29.6 39.4 5.8 24.1 Adjusted EBITDA Change in Taxes Maintenance Interest RECURRENT Others Disposals FREE CASH Expansion capex Environmental FCF AFTER 9M16 working capital capex payments FREE CASH FLOW capex
Slide 15: Energy business Operating performance
Energy business Operating performance Average selling price (€/MWh) Energy volume (MWh) Revenues (€M) 104 -10.4% 458,879 -5.5% 72 -10.9% 433,523 64 93 9M15 9M15 9M16 9M16 9M15 9M16 9M15 9M16 Adjusted EBITDA (€M) 10.4% lower average selling price due to lower pool prices, 34 partially mitigated throu
Slide 16: Energy business P&L
Energy business P&L 9M 2016 P&L (€M) 3.9 21.3 17.4 10.4 7.0 2.0 4.2 0.8 Adjusted EBITDA Non recurent EBITDA Depreciation and EBIT Financial result Taxes Net profit expenses others €3.9M of non recurrent expenses include €2.9M one-off provision on HU 41 MW 46.1% higher depreciation charges following
Slide 17: Energy business Cash Flow generation
Energy business Cash Flow generation 9M 2016 Cash Flow (€M) 12.0 0.1 2.5 5.0 2.8 2,2 25.7 23.0 21.3 Adjusted EBITDA Change in working Taxes Maintenance capex Interest payments RECURRENT FREE Others FREE CASH FLOW 9M16 capital CASH FLOW Positive working capital after €18.7M collection of pending rece
Slide 18: Solid balance sheet and strong liquidity sustained
Solid balance sheet and strong liquidity sustained Group leverage at 1.5x Net Debt / Adjusted EBITDA as of 30/09/2016 Leverage (€M) Debt maturity calendar (€M) Leverage: 252.5 1.6x €250 M bond (5.375%) 75.0 €30 M bilateral loans (EUR +2.1%) Pulp 286.3 business 211.4 5.5 20.5 1.1 5.5 3.4 Gross debt C
Slide 19: Index
Index Highlights 3Q 2016 Results Summary Fuente: Ence 19
Slide 20: Summary
Summary Sustained strong worldwide demand for market pulp with a 2.8% growth in 9M16 vs. 9M15, with China 1 showing a 12.4% YOY growth Continued cash cost improvement in 3Q16, down to €354.8/t, following the successful implementation 2 of efficiency investments and capacity increase in Navia, in lin
Slide 21: Delivering value, delivering commitments THANK YOU
Delivering value, delivering commitments THANK YOU
Ence Energía y Celulosa — Q3 2016 Earnings Presentation on 6ix