Ence Energia Y Celulosa Sa · BME:ENC
Ence Energia Y Celulosa Sa — FY2022 Earnings Presentation
38 slides from Ence Energia Y Celulosa Sa's earnings presentation, Mar 1, 2023
Slide 1: 2022 Results
2022 Results 18 1st March 2023 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: Today's presenters
Today’s presenters Ignacio de Colmenares Alfredo Avello Chairman & CEO CFO and Chief Forestry Officer Ence Energía y Celulosa Ence Energía y Celulosa 3
Slide 4: Highlights & Key Messages
Highlights & Key Messages Ence well positioned to capture growth opportunities following strong 2022 Strategic Highlights FY22 Financial Highlights 2023 Outlook & Developments The Supreme Court backs the legality of Pontevedra concession until 2073 Pontevedra´s biomill resumed its Revenue of €
Slide 5: The Supreme Court backs the legality of Pontevedra concession until 2073
The Supreme Court backs the legality of Pontevedra concession until 2073 Net Income of €247m after registering positive impact of €169m The Spanish Supreme Court has endorsed the legality of the Pontevedra concession´s extension until 2073 Concessions prior to the General Coastal Law of 1988 may
Slide 6: Agenda
Agenda 1. Strategic Highlights and Developments 2. FY22 Financial Highlights 3. 2023 Outlook 4. Q&A 6
Slide 7: Strategic Highlights and Developments
1. Strategic Highlights and Developments 7
Slide 8: Pontevedra resumed activity November 2022 after 4 months' downtime
Pontevedra resumed activity November 2022 – After 4 months’ downtime Combining the river sourcing with our innovative water recovery solution We have developed an innovative solution for drought situations at Pontevedra that will allow us to regenerate the water from the biomill´s effluent and tha
Slide 9: Differentiated & higher value-added products accounted for 18% of sales
Differentiated & higher value-added products accounted for 18% of sales 827,000 tons Pulp sold in 2022 Differentiated products Geographical sales breakdown Breakdown by end product % of pulp sales % of pulp sales % of pulp sales 18% 6% Other Europe 94% 31% Specialty vs. 16% in 2021 Tissue 47% papers
Slide 10: Navia Excelente investment plan
Navia Excelente investment plan Modular investments adaptable to the cycle with a targeted ROCE1 >12% DIFFERENTIATED PRODUCTS FLUFF DECARBONIZATION Improvement of the eco-efficiency and To diversify Navia product range into Use of lignin to replace natural gas in flexibility of the differentiated pu
Slide 11: As Pontes project
As Pontes project Growth and diversification opportunity without increasing the consumption of wood Ence continues to make progress on the project it is studying to launch in the town of As Pontes in Galicia. The first phase of the project consists of a line for the production of bleached mixed
Slide 12: MW under development in Ence Renewables
813 MW under development in Ence Renewables Biomass plants, PV projects and industrial heating opportunities Biomass Power Generation Industrial Heating PV Projects Developed 3 projects with a combined 373 MW PV projects sale, agreed in Biomass has a great potential to help capacity of 140 MW
Slide 13: Ence Biogas: a new business based on the circular bioeconomy
Ence Biogas: a new business based on the circular bioeconomy 9 projects now under development with a targeted ROCE1 >12% Ence has incorporated a new subsidiary in 2022, Ence Biogas, for the development and operation of biomethane Biomethane plants. This new business is based on the circular bioe
Slide 14: Ence's managed forests constitute an important carbon sink
Ence’s managed forests constitute an important carbon sink Offering additional growth opportunities in the voluntary CO2 markets Our managed forests not only produce pulp wood, but also remove over 600,000 tons of CO2 annually from the atmosphere and yield other environmental benefits such as biod
Slide 15: ENCE continues to lead the industry in sustainability
ENCE continues to lead the industry in sustainability Global ESG score: 2022 Achievements 91/100 Production cost reduction Leadership and differentiation License to operate Risk minimisation Safe & efficient Climate People & Sustainable operations action Values agroforestry Protecting Health and Saf
Slide 16: FY22 Financial Highlights
2. FY22 Financial Highlights 16
Slide 17: 2022 Financial Highlights
2022 Financial Highlights Strong pulp & energy prices drive outstanding EBITDA growth & FCF generation 23% Group revenue growth, boosted by continued high pulp & energy prices, drove a 1 material EBITDA rebound (€248m vs. €107m in 2021) 2 Pulp prices more than offset inflation in raw materials 3 Net
Slide 18: Strong Group EBITDA recovery, up to €248m
Strong Group EBITDA recovery, up to €248m Driven by solid pulp and energy prices Group Revenues (€ m) Group EBITDA (€ m) Attributable Net Income (€ m) +22% 1,003 x2 248 247 One-off energy Reversal of price hedges 169 Pontevedra effect 820 1 impairments One-off pulp and and provisions energy price 78
Slide 19: EBITDA performance drives outstanding Group FCF generation
EBITDA performance drives outstanding Group FCF generation WC figure includes pending payments to the electricity system amounting to €85m Short Cash Flow Statement 2022 (€m) 90 22 351 331 20 23 23 35 283 283 285 35 250 250 248 EBITDA Regulatory collar Operating cash Working Capital Lower factoring
Slide 20: Net cash position offers flexibility to seize multiple growth opportunities
Net cash position offers flexibility to seize multiple growth opportunities 60% of the convertible bond already repurchased at the end of the period Pulp business net debt as of 31 Dec. 2022 (€ m) Pulp business debt maturity schedule (€ m) €63m of convertible bonds €130m RCF – Fully undrawn €95m of
Slide 21: An exceptional interim dividend of €70m will be paid on 16 March 2023
An exceptional interim dividend of €70m will be paid on 16 March 2023 Based on strong FCF generation Dividend policy Dividend payment against FY2022 results (€m) Amount based on cash 160 0.29 €/sh. 140 available for distribution 120 Ensuring a leverage below: 100 70 Net Debt / EBITDA for the Pulp 2.
Slide 22: 2a. Pulp Financial Results
2a. Pulp Financial Results 22
Slide 23: Pulp business boosted by solid prices
Pulp business boosted by solid prices Gross price in 2022 was US$1,285/t vs. US$1,010/t in 2021 Avg. annual Europe Pulp price Pulp Sales Pulp EBITDA (US$/t) (€m) (€m) + 27% + 7% + 55% 71 71 1,285 Pulp price 138 713 hedges effect 1,010 668 1 89 2021 2022 2021 2022 2021 2022 1) 2021 figures includes t
Slide 24: Higher operating margins in the Pulp business
Higher operating margins in the Pulp business Despite Pontevedra´s downtime and raw material inflation Net pulp price, cash cost and operating margin (€/t) 800 757 €/t Net price 700 Operating 204 €/t Margin The temporary downtime at Pontevedra´s 600 547 €/t 34 €/t biomill and the extra-costs assoc
Slide 25: 2b. Renewables Financial Results
2b. Renewables Financial Results 25
Slide 26: Renewable business boosted by solid prices
Renewable business boosted by solid prices Regulated energy price above 200 €/MWh to drive EBITDA in 2023 Average selling price Renewables Sales Renewables EBITDA (€/MWh) (€m) (€m) x2 + 90% x6 71 170 71 294 110 155 Energy price hedges effect Energy price 1 hedges effect 81 1 18 2021 2022 2021 2022 2
Slide 27: 373 MW PV projects sale will be closed in 2023-24 for ~€62m
373 MW PV projects sale will be closed in 2023-24 for ~€62m Providing a one-off boost to our renewable business EBITDA of over €50m over 2023-24 Portfolio location Andújar 100 MW Environmental √ permit Huelva 10 MW Environmental √ permit Atarfe 133 MW Lepe 40 MW Environmental √ permit Environmental
Slide 28: 3. 2023 Outlook
3. 2023 Outlook 28
Slide 29: 2023 Outlook
2023 Outlook 1 Pulp production expected to normalize above 1 million tons 2 Solid energy prices expected to continue with a regulated price >200 €/MWh The difference between the regulated and market energy prices in 2023 generates future cash 3 collection rights PV projects sold in 2021 and achievin
Slide 30: Highlights & Key Messages
Highlights & Key Messages Ence well positioned to capture growth opportunities following strong 2022 Strategic Highlights FY22 Financial Highlights 2023 Outlook & Developments The Supreme Court backs the legality of Pontevedra concession until 2073 Pontevedra´s biomill resumed its Revenue of €
Slide 31: 4. Q&A
4. Q&A 31
Slide 32: Group Financial Review: P&L
Group Financial Review P&L 2022 2021 Figures in € m Pulp Renewables Adjustments Consolidated Pulp Renewables Adjustments Consolidated Total revenue 712,9 294,3 (3,8) 1.003,4 667,6 154,9 (2,8) 819,7 Other income 20,5 4,3 (1,2) 23,6 14,8 19,3 (1,4) 32,6 Foreign exchange hedging operations results (20,
Slide 33: Group Financial Review: Cash Flow
Group Financial Review Cash Flow 2022 2021 Figures in € m Pulp Renewables Adjustments Consolidated Pulp Renewables Adjustments Consolidated Consolidated profit/(loss) for the period before tax 239,8 12,2 1,6 253,6 (164,3) (30,9) 2,7 (192,5) Depreciation and amortisation 59,0 40,3 (0,9) 98,4 59,3 36,
Slide 34: Group Financial Review: Balance Sheet
Group Financial Review Balance Sheet Dec - 22 Dic. - 21 Figures in € m Pulp Renewables Adjustments Consolidated Pulp Renewables Adjustments Consolidated Intangible assets 15,6 35,0 (12,7) 37,9 13,2 38,1 (13,3) 37,9 Property, plant and equipment 603,4 389,0 (8,5) 983,9 436,9 456,3 (9,6) 883,6 Biologi
Slide 35: 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 36: Alternative Performance Measures (APMs) Pg.2
Alternative Performance Measures (APMs) Pg.2 OPERATING PROFIT PER TONNE OF PULP The operating profit is a yardstick for the operating profit generated by the Pulp business without taking into account asset depreciation and amortisation charges, impairment losses on non-current assets and gains or lo
Slide 37: Alternative Performance Measures (APMs) Pg.3
Alternative Performance Measures (APMs) Pg.3 FREE CASH FLOW Ence reports free cash flow as the sum of its net cash flows from operating activities and its net cash flows from investing activities. Free cash flow provides information about the cash generated by the Group's operating activities that i
Slide 38: Delivering value, delivering commitments
Global ESG score: 91/100 Delivering value Delivering commitments
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