Ence Energia Y Celulosa Sa · BME:ENC
Ence Energia Y Celulosa Sa — FY2020 Earnings Presentation
22 slides from Ence Energia Y Celulosa Sa's earnings presentation, Feb 24, 2021
Slide 1: 2020 Results
2020 Results 18 February 24th, 2021 Global ESG score: 82/100
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: Highlights 2020: Ready for the new growth cycle
Highlights 2020 Ready for the new growth cycle Pulp prices started to recover at the end of 2020 after a year at their minimum, driven by strong demand growth in China Rapid pulp price recovery European BHKP Pulp prices currently at 780 $/t vs. 680 $/t flat in 2020 underway Main BHKP pulp prod
Slide 4: Rapid pulp price recovery underway
Rapid pulp price recovery underway Boosted by 1.9 Mn tons pulp demand growth in 2020, driven by China NET BHKP Prices in China GROSS BHKP Prices in Europe $/t $/t 900 850 1.100 800 1.050 10 year average equivalent GROSS price: 940 US$/t 10 year average NET price: 620 US$/t 1.000 Using an average ind
Slide 5: No new capacity additions in 2021
No new capacity additions in 2021 Pulp demand set to outgrow supply over 2021-25 Expected Annual Increase in Global Market Pulp Supply and Demand (Mn t)1 Mn t 2021 2022 2021-22 2023 2021-23 2024 2021-24 2025 2021-25 ESTIMATED ANNUAL MARKET PULP DEMAND CHANGE 1.9 1.9 3.8 1.9 5.7 1.9 7.6 1.9 9.5 ESTIM
Slide 6: Operating improvement in the Pulp business
Operating improvement in the Pulp business Following Navia´s capacity expansion in 4Q19 Pulp Production (t) +10.4% Pontevedra biomill 1,007,280 912,028 < 4% production vs. 2019 25 days annual shutdown in 3Q20 +42.9% (vs. 10 days in 1Q19) Next annual shutdown in 1Q21 264,860 185,404 Navia biomi
Slide 7: +12% higher pulp sales in 2020
+12% higher pulp sales in 2020 Increasing the value of the European market and ENCE’s differentiated products Geographical distribution of sales Breakdown by end product Differentiated products % of pulp sales % of pulp sales % of pulp sales 8% Other 9% Europe 92% Tissue 59% 26% Specialties vs. 6% i
Slide 8: +36% renewable energy sales and +15% EBITDA growth in 2020
+36% renewable energy sales and +15% EBITDA growth in 2020 Following the commissioning of two new biomass plants in 1Q20 New Biomass Plant CIUDAD REAL 50 MW 266 MW 31st MARCH Installed capacity after the sale of the 50 MW CSP Plant MÉRIDA 20 MW HUELVA 50 MW HUELVA 41 MW CIUDAD REAL 50 MW New Biomass
Slide 9: Renewables pipeline: 505 MW with grid access
Renewables pipeline: 505 MW with grid access 405 MW expected to be ready to build by the end of 2021 CIUDAD REAL 50 MW Auctions Scheme Spanish Royal Biomass CIUDAD REAL 25 MW Decree-Law 23/2020 RTB in 3Q21 Biomass Hybridization RTB in 4Q21 Specific by technology Price mechanism: Pay as bid HUELV
Slide 10: Value crystallization in the Renewables business
Value crystallization in the Renewables business With the sale of a minority stake and Puertollano 50 MW CSP plant Potential EV implied in the transactions up to €1 Bn € 305 Mn cashed in December 2020 Mn€ Up to € 134 Mn earn-out linked to the development of the 140 MW biomass pipeline with the f
Slide 11: €335 Mn Net Debt reduction in 2020
€ 335 Mn Net Debt reduction in 2020 Including divestments in the Renewables business Normalized FCF1 (€ Mn) Strategic Plan payments (€ Mn) Net Debt (€ Mn) -39% -69% -65% 137 263 513 84 81 178 Lease contracts €46Mn 2019 2020 2019 2020 2019 2020 Renewable Energy Pulp Renewable Energy Pulp Renewable En
Slide 12: 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 31 Dec. 2020 (€ Mn) Pulp business Debt Maturity Calendar (€ Mn) €147 Mn Convertible bond 500 243 Lease €244 Mn Bilateral loans contracts 45 Leverage: 2 457 8 3.1
Slide 13: 2020 Financial Results
2020 Financial Results Driven by lower pulp and energy prices Pulp Business EBITDA (€ Mn) Renewable Energy Business EBITDA (€ Mn) Group Net Income (€ Mn) -82% +15% 75 60 9 52 14 -26 2019 2020 2019 2020 2019 2020 €14 Mn EBITDA in the Pulp business: €60 Mn EBITDA in the Renewable business: Net consoli
Slide 14: Current hedges
Current hedges To mitigate the volatility in the Pulp and Energy businesses Dollar/Euro FX Pulp Price Energy Price Q1 2021: USD 77 Mn Q1 2021: 55,500 t Q1 2021: 127,381 Avg. cap: 1.17 $ /€ Avg. price: 772 $/t Avg. price: 43.4 €/MWh Avg. floor: 1.09 $ /€ Q2 2021: USD 71 Mn Q2 2021: 55,500 t Q
Slide 15: Pontevedra's biomill legal status
Pontevedra’s biomill legal status The first resolution of the National Court is expected in the coming months In January 2016 the National Directorate of The 1958 biomill's original concession was extended for 60 years (starting November 8 th 2013) by the National Directorate of Coasts granted an
Slide 16: Pending diversification projects in the pulp business
Pending diversification projects in the pulp business On hold until higher visibility Pulp business diversification projects € Mn Adaptation to Fluff at Navia New Swing line at Navia Flexible production €40 - 50 Mn €450 Mn Process adaptation to produce Up to 200,000 t or Up to 340,000 t up to 120,00
Slide 17: We continue operating safely despite COVID-19
We continue operating safely despite COVID-19 All our activities have been declared essential PEOPLE OPERATIONS LIQUIDITY COVID-19 Prevention Protocol Implementation of Ence´s COVID-19 € 88 Mn in long-term back-up credit Entrance and exit temperature Prevention Protocol throughout the facili
Slide 18: Amongst the leaders in sustainability
Amongst the leaders in sustainability Global ESG score: Highlights 2020 82/100 Production cost reduction Leadership and differentiation License to operate Risk minimization Safe & ecologically Climate People & Sustainable efficient operations Action values agroforestry Contribution to circular econo
Slide 19: Closing Remarks
Closing Remarks Ready for the new growth cycle We have crystallized value and reinforced our balance sheet with the sale of a minority stake in the Renewables business and the Puertollano CSP plant Pulp prices are rapidly recovering in 2021 Pulp business operating improvement should continue i
Slide 20: 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 21: 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 22: Delivering value, delivering commitments
Global ESG score: 82/100 Delivering value Delivering commitments
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