Ence Energia Y Celulosa Sa · BME:ENC
Ence Energia Y Celulosa Sa — 9M15 Earnings Presentation
29 slides from Ence Energia Y Celulosa Sa's earnings presentation, Nov 12, 2015
Slide 1: Ence Energía y Celulosa 9M15 Results
Ence Energía y Celulosa 9M15 Results November 12th, 2015
Slide 2: Ence 3Q15: Main Highlights
Ence 3Q15: Main Highlights 1 9M15 Adjusted EBITDA of €141 M, €56 M in the quarter. On track to achieve €200 M Adjusted EBITDA target - Unleveraged Operating Cash Flow of €85 M 2 Successful financial restructuring of the Company and ring-fencing the two businesses: Pulp and Energy 3 Cash Cost during
Slide 3: 9M15 Consolidated Results (€M)
9M15 Consolidated Results (€M) 71 416 Forestry 11 Electricity 53 487 Pulp 352 346 11 141 130 141 130 48 84 81 46 35 35 Pulp Business Energy Business Total Sales Cost Adjusted Provisions and EBITDA Amortizations EBIT Interest and taxes Net other non and provisions EBITDA recurrent result • Sales reac
Slide 4: Strong Adjusted EBITDA level
Strong Adjusted EBITDA level Adjusted EBITDA 56 14 54 27 50 47,5 47 46 42 41 43 44 39 7 38 36 61 141 22 22 127 18 16 93 101 12 12 8 40 33 33 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 3Q13 4Q13 1Q14 Adjusted Sales USD Pulp prices Costs Biomass Adjusted EBITDA vol
Slide 5: Solid Cash flow generation
Solid Cash flow generation 130 3 Cash flow Evolution (€M) 33 32 3 85 16 11 4 2 27 21 57 97 5 23 58 34 EBITDA Change in working Maintenance and Provisions (b) Others Unleveraged Cash Interest expenses Payments related Leveraged Cash Flow 9M15 (a) capital environmental capex Flow from to Huelva closur
Slide 6: Successful Ring-fencing of Pulp and Energy Businesses
Successful Ring-fencing of Pulp and Energy Businesses Pulp business refinanced: issuing a new bond Increasing cash available in the Biomass €250 M at 5.375%, due end of 2022. business by €30 M Reduction of the financial cost: 187.5 bps in Reduction of the financial cost: 110 bps in the new bond and
Slide 7: Reduced average cash cost levels
Reduced average cash cost levels Cash Cost Evolution (€/t) Monthly Cash Cost Evolution (€/t) 409 23 29 38 365 390 27 376 387 370 103 28 354 363 39 319 74 216 197 9M14 9M15 Jul-15 Aug-15 Sep-15 3Q15 Wood Processing cost Personnel Commercial Corporate Costs Ence Navia Pontevedra Note: figures in €/t C
Slide 8: Production Delivered Cash Cost supply curve
Production Delivered Cash Cost (excludes overhead costs) BSKP and BHKP supply curve ( €/t), cif North Europe 500 450 400 €/t 350 Belgium/France Chile/Uruguay Other Europe 300 Sweden Sweden Finland Iberian Brazil 250 200 0 2 4 6 8 10 12 14 Sales to Europe (Mt) Hardwood producers Softwood producers So
Slide 9: Pulp sales benefits from exchange rate appreciation & higher prices
Pulp sales benefits from exchange rate appreciation & higher prices Pulp price evolution $/t €/t $/€ 900 1.60 814 794 804 810 800 789 770 1.367681.37751 1.37 1.33 749 780 1.32 1.31 1.33 727 734 703 723 722 1.40 700 623 1.25 663 1.20 Ence has implemented a hedging 597 597 1.13 600 567 561 548 547 588
Slide 10: Pulp prices continue their recovery, rising to 810$/t levels
Pulp prices continue their recovery, rising to 810$/t levels, due to strong demand and low inventories The new supply announced by Maranhao (1.5 Mt), Per-capita consumption of tissue 24 Montes del Plata (1.3 Mt) and Oji (0.4 Mt) will be offset (Kg/person) as demand is expected to maintain a growth t
Slide 11: Pulp prices are solidly supported by increasing demand
Pulp prices are solidly supported by increasing demand linked to consumption patterns of the Asian middle class population… Pulp Price Evolution Chinese Tissue Consuption will increase in 20% 2015 and 2016 between 0.5 - 1 Mt 10% +9 % 6,0 2016E ∆(14-16): 0% 5,5 2015E 0.5 – 1 Mt Kg tissue per capita (
Slide 12: …expecting to continue its growth trend
…expecting to continue its growth trend Income Distribution (‘000 USD) Population with income >5,000 USD (million people) China India 1,064 1,340 1,411 1,195 1,362 Population (mil. people) 218 1% 3% 3% 2% 13% 15% 1% 3% 10% 2% 15% +778 30% 95% 83% 84% 846 286 40% 58 228 2010 2020E 2010 2020E Low (<5)
Slide 13: Index
Index 1 9M15 Results 1.1 Pulp Business 1.2 Energy business 2 Cost Cutting Program on track 3 Solid Cash Flow generation and liquidity position Fuente: Ence 13
Slide 14: Index
Index 1 9M15 Results 1.1 Pulp Business 1.2 Energy business 2 Cost Cutting Program on track 3 Solid Cash Flow generation and liquidity position Fuente: Ence 14
Slide 15: Pulp mills increased sales due to higher pulp prices
Pulp mills increased sales due to higher pulp prices … Pulp, Forestry and Electricity sales at pulp mills (€M) Our current Northern mills sales increased by 19% from €350 M in 9M14 up to €416 M in 9M15, mainly due to higher pulp prices and a more favourable exchange rate 485 as well as better produc
Slide 16: … also increasing its Adjusted EBITDA contribution and margin
… also increasing its Adjusted EBITDA contribution and margin. Pulp Business Adjusted EBITDA (€M) 116 (*) 29 9M14 9M15 (*) includes a positive adjustment of €8M related to the cost of the boiler and other ancilliary equipment supporting the operating of Huelva 41MW (hold by the energy business) and
Slide 17: Index
Index 1 9M15 Results 1.1 Pulp Business 1.2 Energy business 2 Cost Cutting Program on track 3 Solid Cash Flow generation and liquidity position Fuente: Ence 17
Slide 18: Energy business continues to significantly increase sales
Energy business continues to significantly increase sales after additions of new biomass power plants and higher energy prices… Energy sales (MWh) Energy Sales (€M) 71 41 458,879 290,316 9M14 9M15 9M14 9M15 Energy sales in MWh increased by 58% from 9M14 to 9M15 due to the contribution of the Average
Slide 19: …also reflecting a higher EBITDA contribution
…also reflecting a higher EBITDA contribution Energy EBITDA (€M) 25 (*) 11 9M14 9M15 (*) includes a negative adjustment of €8M related to the cost of the boiler and other ancilliary equipment supporting the operating of Huelva 41MW (hold by the energy business) and that will be transfered to the ene
Slide 20: Index
Index 1 9M15 Results 1.1 Pulp Business 1.2 Energy business 2 Cost Cutting Program on track 3 Solid Cash Flow generation and liquidity position Fuente: Ence 20
Slide 21: Successful execution of efficiency investments and capacity increase in Navia
Successful execution of efficiency investments and capacity increase in Navia… Pulp Mills Investment Program (M€) Annual Expected Savings (M€) (b) 1.7 €10.5/t 10.0 €8.6/t 13.5 3.7 2.8 13.1 21.2 16.1 5.9 6.8 3.9 6.0 3.0 (a) 9M15 4Q15 2016 2017 2016 2017 Navia (Efficiency) Navia (Capacity increase) Na
Slide 22: …within a two year timeframe
…within a two year timeframe. 3.6 5.1 3.6 358 5.9 354 349 1.9 345 339 339 4.8 338 333 333 Current Run Rate Efficiency Efficiency Dilution from Improvement in Running Rate Efficiency Dilution from Running Rate (*) investments investments to capacity process Cash Cost June investments to capacity Cash
Slide 23: Index
Index 1 9M15 Results 1.1 Pulp Business 1.2 Energy business 2 Cost Cutting Program on track 3 Solid Cash Flow generation and liquidity position Fuente: Ence 23
Slide 24: Net Debt and Liquidity
Net Debt and Liquidity Net debt evolution (€M) Liquidity position (€M) 284 257 106 102 90 138 138 178 32 228 178 155 106 155 155 2014 9M15 9M15 Cash RCF Total Liquidity Net corporate debt Net non-recourse debt Pulp Business Energy Business • Reducing its net debt position by €28 M during 9M15, after
Slide 25: Benefitting from the Asset Disposal Program
Benefitting from the Asset Disposal Program Asset Disposal Program (€M) Ence has sold 562 hectares of former irrigated energy crops for €14.1 M and has signed promissory contracts for additional 620 irrigated hectares for a 50 total consideration of €14.4 M, having received in 79 18 advance €1.7M of
Slide 26: Summary (I) …
Summary (I) … 1 Strong quarterly Adjusted EBITDA, increasing the cumulative figure up to €141 M and approaching the €200 M target. €85 M of Unleveraged Operating Cash Flow, increasing liquidity up to 2 €218 M and Net Debt to Adjusted annualized EBITDA down to 1.0x in the pulp business and 3.0x in th
Slide 27: Summary (II) …
Summary (II) … 5 Currency Hedging Program being enlarged up to 18 months on a 50% basis ensuring the benefit of additional strengthening of the USD dollar. 6 Successful financial restructuring of the Company and ring-fencing of the businesses, having refinanced the energy business increasing availab
Slide 28: 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 29: Fuente: Ence
ence ENERGIA & CELULOSA 29