Ence Energia Y Celulosa Sa · BME:ENC
Ence Energia Y Celulosa Sa — Q1 2017 Earnings Presentation
27 slides from Ence Energia Y Celulosa Sa's earnings presentation, Apr 26, 2017
Slide 1: 1Q 2017 Results
FTSE4Good “MM 26 April 2017 yence ENERGIA & CELULOSA
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
Highlights 3
Slide 4: Highlights
Highlights 22% EBITDA growth and 73% Net Income growth despite 9% lower pulp prices 32 €/t cash cost reduction vs.1Q16 to 343.6 €/t in the quarter Strong recurrent free cash flow generation which allows 5% Net Debt reduction, keeping a low leverage position (1.6x Net Debt / EBITDA) Continued growing
Slide 5: Resilient Business Model
Resilient Business Model Strong EBITDA and Net Income despite lower pulp prices in the quarter Average pulp price (€/t) Group EBITDA (€ Mn) Group Net Income (€ Mn) -9% +22.3% +72.9% 40.8 13.7 695 33.4 633 7.9 1Q 2016 1Q 2017 1Q 2016 1Q 2017 1Q 2016 1Q 2017 Market Pulp Price evolution: EBITDA growth
Slide 6: Cash cost evolution
Cash cost evolution Focus on reducing cash cost to achieve strategic plan targets Cash Cost Evolution in 1Q 2017 Cash Cost on track to achieve strategic plan - 8.5% 375.4 STRATEGIC 343,6 30.6 340.9 375.4 PLAN 28.1 20.7 22.2 362.7 29.3 29.4 351 340.9 343.6 123.2 339 101.7 101.8 325 193.5 189.3 190.2
Slide 7: 51% higher Energy volume sold vs 1Q16
51% higher Energy volume sold vs 1Q16 Following 32 Mw acquisition in December 2016 Energy volume (MWh) EBITDA (€ Mn) December 2016 Acquisitions +38.6% +51.2% 211,045 10.7 139,590 7.7 1Q16 1Q17 1Q16 1Q17 +51% Energy volume +39% EBITDA increase driven by: increase Higher pool price Higher producti
Slide 8: Strong Free Cash Flow generation
Strong Free Cash Flow generation Net debt reduction, maintaining a lower leverage than peers FCF (€ Mn) Net debt reduction in 1Q17 Low leverage below peers +216.8% -4.7% x 2.3 14.4 3.7 218.3 208 1.6 4.5 1Q 2016 1Q 2017 Dec. 2016 Mar. 2017 Peers1 Strong Free Cash Flow despite Net debt reduction thank
Slide 9: Growing demand for Eucalyptus pulp
Growing demand for Eucalyptus pulp China demand growth fueled by the tissue consumption mega-trend Global Demand for Eucalyptus Pulp (growth rate) +8.5% global eucalyptus pulp demand 8.6% 8.5% 7.5% 7.7% growth in 1Q 2017 5.3% Above 2012 – 2016 CAGR of 7.3% 2013 2014 2015 2016 1Q 2017 Chinese Demand
Slide 10: Favorable demand and supply balance expected
Favorable demand and supply balance expected Outperforming industry analysts initial expectations Expected Annual Increase for Market BHKP Pulp Supply and Demand (Mn t) Mn t 2017 2018 2019 2017 - 2019 ESTIMATED BHKP DEMAND INCREASE 1.5 1.5 1.4 4.4 Favorable supply and demand balance for China 1.0 1.
Slide 11: Favorable demand and supply balance expected
Favorable demand and supply balance expected Outperforming industry analysts initial expectations Expected Annual Increase for Market BSKP Pulp Supply and Demand (Mn t) Mn t 2017 2018 2019 2017 - 2019 ESTIMATED BSKP DEMAND INCREASE 0.6 0.6 0.6 1.8 China 0.5 0.5 0.5 1.5 Other Asia / Africa / Oceania
Slide 12: Pulp prices recovery to continue
Pulp prices recovery to continue Net BHKP prices in China still 60 $/t above those in Europe European Pulp Prices Net BHKP Prices China vs. Europe 1000 USD / t 900 + 60 $/t 800 700 610 600 550 500 400 300 200 100 0 2012 2013 2014 2015 2016 Europe China Prices as of April 25th BSKP ($/t) BHKP ($/t) B
Slide 13: Ongoing FX hedging program
Ongoing FX hedging program To mitigate FX volatility on the Pulp business Dollar/Euro Exchange Rate Evolution Current Hedges 1,4 1 - 6 months \ 65% revenues: 1,35 Avg. floor: $ 1.07 € Avg. cap: $ 1.15 € 1,3 6 - 12 months \ 61% revenues: 1,25 Avg. floor: $ 1.09 € 1,2 Avg. cap: $ 1.16 € $1.15/
Slide 14: 2016-2020 Strategic Plan
2016-2020 Strategic Plan Huelva 40 Mw power plant and 30,000 t capacity expansion in Pontevedra New Huelva 40 Mw biomass power plant 30,000 t capacity expansion in Pontevedra in 2018 New Huelva 40 Mw biomass power plant project During this quarter’s maintenance pause in Pontevedra, on track to start
Slide 15: 1Q 2017 Results
> 1Q 2017 Results 15
Slide 16: Consolidated Key Figures
Consolidated Key Figures 1Q17 Results confirm Ence´s resilience and Strategic Plan delivery P&L +22.3% EBITDA in 1Q17 vs 1Q 2016 fueled by both Pulp and Energy businesses € Mn 1Q17 1Q16 % Change Revenue 174.2 150.2 16.0% 9% pulp price decline in 1Q17 vs 1Q 2016 offset by: Pulp Business EBITDA 30.1 2
Slide 17: Pulp Business
Pulp Business Operating performance Average selling pulp price (€/t) Pulp sales volume (t) Cash cost (€/t) -9.1% +13.2% +4.3% -8.5% 375.4 512 466 EXPECTED 246,139 CASH COST 217,504 343.6 339 1Q16 1Q17 1Q16 1Q17 1Q16 1Q17 2017E 9.1% pulp price decline in 1Q17 vs 1Q16 partially offset by: EBITDA (€ Mn
Slide 18: Pulp Business
Pulp Business P&L 1Q17 P&L Bridge (€ Mn) 30.1 12.1 18.0 3.5 1,1 18.0 3.4 10.0 EBITDA Depreciation and other EBIT Financial expenses Other financial result Taxes Net profit results on fixed assets 18
Slide 19: Pulp Business
Pulp Business Cash Flow generation 2017 Cash Flow Bridge (€ Mn) €8.6 Mn of Strategic Plan 30.1 14.3 investments 4.7 0.5 3.0 7.2 0.0 11.6 1.4 6.0 EBITDA Change in Maintenance Insterest Taxes RECURRENT Other Expansion Environmental FCF 1Q17 working capital CAPEX collection FREE CASH Capex CAPEX FLOW 1
Slide 20: Pulp Business
Pulp Business Solid balance sheet and strong liquidity Leverage as of March 2017 (€ Mn) Debt maturity calendar (€ Mn) €250 Mn bond 25.4 Leverage: 320.9 126.8 1.9x €71.2 Mn bilateral loans 250 194.1 20.5 5.5 5.5 8.2 6.1 Gross debt Cash Net debt 2017 2018 2019 2020 2021 >2022 Pulp business leverage at
Slide 21: Energy Business
Energy Business Operating performance Average selling price (€/MWh) Energy volume (MWh) Revenues (€ Mn) +22.4% +51.2% +49.3% 114.8 211,045 33.6 93.8 139,590 22.5 1Q16 1Q17 1Q16 1Q17 1Q16 1Q17 +22.4% increase in average selling price mainly due to higher pool prices EBITDA (€ Mn) +51.2% energy produc
Slide 22: Energy Business
Energy Business P&L 1Q 2017 P&L Bridge (€ Mn) 10.7 3.7 7.0 1.4 1.4 0.5 4.2 3.7 EBITDA Depreciation and EBIT Financial result Taxes Net profit Minorities Net Profit others Attributable 22
Slide 23: Energy Business
Energy Business Cash Flow generation 2017 Cash Flow Evolution Bridge (€ Mn) 10.7 1.6 1.3 1.3 8.4 0.7 0.0 0,0 7.1 EBITDA 1Q17 Change in working Maintenance capex Interest payments Taxes RECURRENT Other FREE CASH capital FREE CASH FLOW FLOW 23
Slide 24: Energy Business
Energy Business Solid balance sheet and strong liquidity Leverage as of March 2017 (€ Mn) Debt maturity calendar (€ Mn) €107.7 Mn Outstanding Project Finance 2.3 39.8 €14.8 Mn Bilateral loans 121.4 107.5 Leverage: 0.4x 0.8 1.0 4.1 3.3 3.3 13.6 13.6 14.5 12.8 13.4 13.8 Gross debt Cash Net debt 2017 2
Slide 25: Closing Remarks
> Closing Remarks 25
Slide 26: Closing Remarks
Closing Remarks Strong business model with high EBITDA conversion Excellent results driven by cash cost reduction and higher volumes Continued focus on the delivery of the Strategic Plan Supporting industry fundamentals for the short and medium term Investment Plan on track to push ENCE´s organic gr
Slide 27: Delivering value, delivering commitments
Delivering value, delivering commitments
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