Ence Energia Y Celulosa Sa · BME:ENC
Ence Energia Y Celulosa Sa — Q3 2024 Earnings Presentation
34 slides from Ence Energia Y Celulosa Sa's earnings presentation, Oct 30, 2024
Slide 1: 3Q24 Results
3Q24 Results 18 30 October 2024 Global ESG score: 93/100
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 Chief Financial Officer Ence Energía y Celulosa Ence Energía y Celulosa 3
Slide 4: Results Summary
Results Summary Growth, Efficiency and 3Q24 Financial Results 3Q24 Operating Highlights 4Q24 Outlook Diversification Projects €51m FCF generation in 3Q24 Pulp price adjustment in 3Q24, from its Ence Advanced pulp sales to reach peak in July, driven by pulp destocking Hardwood pulp price has
Slide 5: 3Q24 Operating Highlights
1. 3Q24 Operating Highlights 5
Slide 6: Pulp price adjustment in 3Q24
Pulp price adjustment in 3Q24 Driven by pulp destocking in China and the start of new capacity additions Avg. NET Pulp Price & Cash-Cost (€/t) 800 762 728 750 679 700 650 601 578 600 190 €/T 636 522 550 477 500 535 450 489 484 487 474 400 455 350 300 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Cash - Cost Av
Slide 7: 36% pulp production increase in Pontevedra vs. 3Q23
36% pulp production increase in Pontevedra vs. 3Q23 Lower energy co-generation in Navia Water recovery solution in Pontevedra Lower energy co-generation in Navia 36% pulp production increase in Pontevedra vs. 3Q23, up to 93 Incident in Navia´s energy co-generation turbine in September Kt, despit
Slide 8: Ence Advanced pulp accounted for 22% of our pulp sales in 9M24
Ence Advanced pulp accounted for 22% of our pulp sales in 9M24 Adapted pulp with over 30 €/t higher operating margin than our standard pulp High strength pulp aiming to substitute softwood pulp % of total pulp sales in 9M24 Minimizes the energy consumption during the refining process + First u
Slide 9: Renewables business EBITDA x2 in 3Q24, up to €9m
Renewables business EBITDA x 2 in 3Q24, up to €9m Driven by a higher energy output and lower operating costs, as well as the higher regulated price Renewable business EBITDA (€m) x2 9 4 3Q23 3Q24 9
Slide 10: 4Q24 Outlook
2. 4Q24 Outlook 10
Slide 11: Pulp price already stabilizing in China
Pulp price already stabilizing in China Record price gap with other pulp grades should lend support to BHKP prices NET Pulp Prices in China (USD/t) 1.100 1.000 900 800 700 600 500 400 300 200 100 0 Jul-22 Jul-19 Jul-20 Jul-21 Jul-23 Jul-24 Oct-19 Jan-20 Apr-20 Oct-20 Jan-21 Apr-21 Oct-21 Jan-22 Apr-
Slide 12: Second interim dividend of €8m to be paid in November
Second interim dividend of €8m to be paid in November First interim dividend of €26m was paid in August Dividend policy Second interim dividend against 2024 results: Total gross amount €8m Amount based on cash available for distribution Equivalent to a gross € 0,033 /share Ensuring a leverage be
Slide 13: 3Q24 Financial Results
3. 3Q24 Financial Results 13
Slide 14: €42m Pulp business EBITDA in 3Q24
€42m Pulp business EBITDA in 3Q24 €132m accumulated EBITDA in the first nine months Avg. NET Sales price Cash Cost Pulp sales volume Pulp EBITDA (€/t) (€/t) (,000 t) (€m) +42% + 1% - 4% 71 42 679 484 489 244 234 477 -6 3Q23 3Q24 3Q23 3Q24 3Q23 3Q24 3Q23 3Q24 202 €/t avg. net pulp price 5 €/t cash co
Slide 15: €9m Renewable business EBITDA in 3Q24
€9m Renewable business EBITDA in 3Q24 €20m accumulated EBITDA in the first nine months Average revenue per MWh Net operating costs per MWh Energy volume sold Renewables EBITDA (€/MWh) (€/MWh) (GWh) (€m) + 10% - 13% + 23% + 115% 9,4 157 308 142 141 251 123 4,4 3Q23 3Q24 3Q23 3Q24 3Q23 3Q24 3Q23 3Q24
Slide 16: €52m consolidated EBITDA in 3Q24
€52m consolidated EBITDA in 3Q24 €152m accumulated in the first nine months Group Revenues (€ m) Group EBITDA (€ m) Attributable Net Income (€ m) + 29% 52 220 14 171 (24) -2 3Q23 3Q24 3Q23 3Q24 3Q23 3Q24 €49m consolidated revenue growth vs. 3Q23 €53m consolidated EBITDA growth vs. 3Q23 + €38m Attrib
Slide 17: €51m FCF in 3Q24
€51m FCF in 3Q24 Including a €43m reduction in the use of factoring lines in the Renewable business Cash Flow Statement 3Q24 (€m) €27m WC inflow in the Pulp business driven by the adjustment in pulp Fluff diversification project (excluding €6m leasing) prices Navia decarbonization project engi
Slide 18: Net debt down to €278m, following a €26m dividend
Net debt down to €278m, following a €26m dividend to shareholders In addition to a €43m reduction in the use of factoring lines in the Renewable business Net Debt Change in 3Q24 (€m) 279 51 11 278 26 5 7 NET DEBT FCF 3Q24 DIVIDEND to Distributions to Shareholders loan Change in leases NET DEBT JUN.
Slide 19: Successful Magnon corporate refinancing in July
Successful Magnon corporate refinancing in July Strong liquidity, long term maturities, and no covenants in Pulp Pulp business net debt as of 30 Sep. 2024 (€ m) Pulp business debt maturity schedule (€ m) €279m of bilateral loans €130m RCF – Fully available 440 1 Lease contracts €37m of public sector
Slide 20: ENCE: industry leader in sustainability
ENCE: industry leader in sustainability Global ESG score: Highlights Q3 2024 93/100 Safe and Eco- Bioproducts & Responsible Positive social efficient operations ecosystem services supply chain impact Potential for topline To become preferred To grant business For operational cost improvement supplie
Slide 21: Growth, efficiency and diversification projects
4. Growth, efficiency and diversification projects 21
Slide 22: Diversification projects in the Pulp business
Diversification projects in the Pulp business Without increasing the consumption of wood Status: On track Status: On track Status: Engineering and permitting ROCE1 target: >15% ROCE1 target: >15% ENCE ADVANCED PULP FLUFF RENEWABLE PACKAGING SOLUTIONS To diversify Navia’s production into Fluff pulp T
Slide 23: Efficiency and growth projects in the Pulp business
Efficiency and growth projects in the Pulp business Without increasing the consumption of wood Status: Engineering and permitting Status: Engineering and permitting Status: Engineering and permitting ROCE1 target: >15% ROCE1 target: >12% ROCE1 target: >12% NAVIA DECARBONIZATION PONTEVEDRA AVANZA AS
Slide 24: Biomethane pipeline status
Growth and diversification projects in Renewables 14 biomethane plants on their engineering and permitting phase with a required ROCE1 >12% BIOMETHANE BUSINESS Working on 37 biomethane projects in Spain Biomethane generation from the recycling of local agricultural and livestock biomass, including t
Slide 25: Renewable thermal energy pipeline status
Growth and diversification projects in Renewables 4 renewable thermal plants on their engineering and permitting phase with a required ROCE1 >11% RENEWABLE THERMAL ENERGY 1 renewable thermal energy contract in operation and 14 projects under negotiation RENEWABLE THERMAL ENERGY PIPELINE STATUS Devel
Slide 26: Closing Remarks
Closing Remarks Strong operating margin and free cash flow generation in 3Q24 despite softening pulp prices Pulp prices have already stabilized in China. We expect the price of hardwood pulp to recover from here, supported by its current price advantage vs. other pulp grades and by the announced
Slide 27: Appendix
5. Appendix 27
Slide 28: Group Financial Review P&L
Group Financial Review P&L 9M24 9M23 Figures in € m Pulp Renewables Adjustments Consolidated Pulp Renewables Adjustments Consolidated Total revenue 530,6 140,3 (2,8) 668,1 462,3 169,6 (2,2) 629,6 Other income 16,1 3,3 (0,9) 18,5 21,9 4,1 (0,9) 25,1 Foreign exchange hedging operations results 0,5 - -
Slide 29: Group Financial Review Cash Flow Statement
Group Financial Review Cash Flow Statement 9M24 9M23 Figures in € m Pulp Renewables Adjustments Consolidated Pulp Renewables Adjustments Consolidated Consolidated profit/(loss) for the period before tax 63,0 (17,5) 1,2 46,7 (37,6) (2,0) 1,2 (38,5) Depreciation and amortisation 50,9 25,4 (1,2) 75,1 4
Slide 30: Group Financial Review Balance Sheet
Group Financial Review Balance Sheet Sep-24 Dec-23 Figures in € m Pulp Renewables Adjustments Consolidated Pulp Renewables Adjustments Consolidated Intangible assets 18,6 33,7 (11,7) 40,7 17,7 33,7 (12,1) 39,3 Property, plant and equipment 606,2 365,5 (6,7) 965,1 617,5 379,0 (7,5) 989,0 Biological a
Slide 31: 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 32: Alternative Performance Measures (APMs) Pg.2
Alternative Performance Measures (APMs) Pg.2 It provides a comparable measure of the business’s profitability and is measured as the difference between the average sales price per tonne, calculated by dividing revenue from the sale of pulp by the number of tonnes sold, and the cash cost. NET FINANCE
Slide 33: Alternative Performance Measures (APMs) Pg.3
Alternative Performance Measures (APMs) Pg.3 NORMALISED FREE CASH FLOW Normalised FCF is the sum of EBITDA, the change in working capital, maintenance capex, net interest payments and income tax payments. It provides a proxy for the cash generated by the Company's operating activities before collect
Slide 34: Delivering value Delivering commitments
Global ESG score: 93/100 Delivering value Delivering commitments
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