ENCE Energía y Celulosa S A : Results 3Q25

About this update from Ence Energia Y Celulosa Sa

3Q25 Results 29 October 2025 Today's presenters Ignacio de Colmenares Chairman & CEO Ence Energía y Celulosa Alfredo Avello Chief Financial Officer Ence Energía y Celulosa 3 Results Summary 2025 Outlook BHKP prices hit lows in 3Q25. Two price increase announcements were made for a total of gross 130 $/t in Europe of which c. +60 $/tn are already reflected in the PIX pulp as well as c. +30 $/tn net in China. Tariff redemptions for pulp imports into the US as well as maintenance shutdowns by major LatAm players in 4Q'25 (c. 0,5m tn), should sustain the positive trend trough year-end. Our FX hedging policy provides a cap at 1.09 USD/EUR. Considering an average exchange rate of 1.16, this would represent approximately €3 million of EBITDA in 4Q 2025. Expected Cash cost of 466 €/t in 2H25, in line with 2025 guidance. Start-up of our 125 kt fluff pulp (c.+60€/tn extra margin). On product homologation phase. 3Q higher energy production and lower operating costs to continue in 4Q25 Energy Savings Certificates 3Q25 Operating Highlights 29 €/t cash cost reduction vs. 2Q25 and 30€/t vs. 3Q24, down to 459 €/t Special pulp products accounted for 29% of total pulp volumes sold in 9M25 (+7 p.p. vs. 9M24), with 33€/t higher margin (vs. 29 €/t in 9M24). Pulp sales of 263 kt, +13% vs 3Q24 (+8% QoQ). Despite Pontevedra annual maintenance shutdown (water effluent recovery system successfully operating for the third summer season with limited water availability). ▪ +4% QoQ growth in energy generation, up to 315 GWh (+2% YoY vs. 3Q24). La Galera quarterly production should permit to increase by c. 20% its yearly production compared to 2024. This improvement has been achieved through applying Ence's best industrial practices, including odour reduction. 3Q25 Financial Results Pulp EBITDA of €4m in 3Q25 vs €20m in 2Q25, both including CAEs 1 and/or insurance collections. EBITDA dropped vs 3Q'24 mainly due to weaker FX and pulp prices. Renewables EBITDA of €8m in 3Q25, vs €4m in 2Q25 backed by lower production costs and higher selling prices. EBITDA decreased vs. 3Q24 due to lower selling prices partially offset through operating costs reduction. FCF before growth capex amounted to €12m despite low pulp prices in 3Q25 vs. -€13m in 2Q25. 3Q cash generation of €18m through WC improvement fully neutralizes 1H25 WC increase. €17m growth and efficiency capex in 3Q25 Net Debt of €367m at the end of Sep.25 with €264m cash in balance. Growth, Efficiency and Diversification Projects 2028 Ence's Special Pulp Centered Business to increase the average across-the-cycle EBITDA by 1,5x: Top line: (i) Higher-margin special pulp sales to exceed 62% of 2028 volumes, delivering incremental EBITDA of €22m, (ii) As Pontes environmental license granted in 3Q25, (iii) Renewable packaging solutions to start up in 2H26. Cash Cost: (i) Efficiency & Competitiveness Plan to capture average annual savings of 22 €/t cash cost from 2027, (ii) Navia decarbonization and cost reduction project (c. 8 €/t savings) launched in 1Q25, (iii) Pontevedra Avanza (20€/t). Largest Iberian biomass backboned Renewable Energy Platform, on track to almost triple its EBITDA by 2030 through: Biomass to Biomethane: >1TWh | >€60m EBITDA Biomass to Renewable Industrial Heating: 2TWh| >€40m EBITDA 4 1. 3Q25 Highlights 5 European BHKP price hit the lows in 3Q25 Gross BHKP prices bottomed at 1,000 $/t by late August, price increases announced by main producers for 4Q'25 Gross Pulp Prices in Europe ( USD/t ) 1.700 1.600 1.500 1.400 1.300 1.200 1.100 1.000 900 800 700 600 500 sep.-20 dic.-20 mar.-21 jun.-21 sep.-21 dic.-21 jun.-22 dic.-22 jun.-23 dic.-23 jun.-24 dic.-24 400 Future Pulp Prices in Europe ( USD/t ) mar.-22 sep.-22 mar.-23 sep.-23 mar.-24 sep.-24 mar.-25 jun.-25 sep.-25 Oct-25 Jan-26 Apr-26 Jul-26 Oct-26 NBSK EU (gross) BHKP EU (gross) Gross BHKP prices reached 1,000 €/t by mid-August from April high of 1,218 €/t. Two price increases have been announced for a total of 130 $/t gross in Europe of which c. 60€/tn are already implemented. Demand fundamentals remain strong with +7% YoY growth to August (4% growth excl. China). The price gap with softwood pulp (NBSK), the redemption of US trade tariffs for pulp imports and the annual maintenance shutdown announced by large Latin- American producers for 4Q'25 (c. 0,5 Mt) should allow to consolidate recent price increases and sustain a positive trend. Source: FOEX, Hawkins Wright & Norexeco Mitigating the impact of a weaker dollar through our ongoing FX hedging policy Annual average cap of 1.09 dollars for almost 50% of our expected pulp sales in 2025 EUR / USD Exchange Rate 1,250 1,200 1,150 1,100 1,050 1,000 Sep-24 Dec-24 Mar-25 Jun-25 Sep-25 Dec-25 EUR/USD Average cap (USD / EUR) Average floor (USD / EUR) EUR / USD Hedges as of 30/09/25 FX Hedges 1Q25 2Q25 3Q25 4Q25 FY 2025 Nominal hedged (USD Mn) 97 73 73 57 300 Average cap (USD / EUR) 1,09 1,09 1,10 1,09 1,09 Average floor (USD / EUR) 1,06 1,07 1,07 1,06 1,06 Efficiency & Competitiveness Plan launched 200 M€ NPV of the Plan. Potential average annual savings of 22€/t from 2027 Reinforcing our commitment towards Efficiency and Competitiveness based on two pillars Artificial Intelligence solutions and process reengineering Operations Streamline Services contracts, Procurement, Maintenance and industrial operations, Forestry and logistics, Safety & Quality. Orderly reduction of FTEs as a result of operational efficiencies. Collective Redundancy Procedures (Proceso de Despido Colectivo) initiated. Negotiations with union representatives already underway. Estimated NPV > 200M€. Payback c. 1 year Potential annual savings of 22€/t in cash cost between both pillars Total amount of €23m to be disbursed between 2026 and 2027 The main goal is to strength Ence's competitive positioning while securing a stable and constructive employment relations framework Ence Advanced pulp substitute softwood pulp products Expected to account for over 50% of Ence's pulp sales volumes in 2028, up from 29% 9M25 High strength pulp aiming to substitute softwood pulp Process cost optimization ✓ ✓ + First unbleached hardwood pulp in the market Certified CO 2 footprint during the product life cycle Increases tissue softness Suitable for decor paper applications Narrow range of porosity Plastic alternative in packaging for food & beverage industry Low porosity material % of total pulp sales volume in 9M25 Standard BHKP 29% + Others such as , , and Ence Advanced products generate 33 €/t higher operating margin in 9M25 (vs. 29 €/t in 9M24). Run-rate margin to stabilized at c.30 €/t vs. standard BHKP across the cycle average prices Our first 125 kt fluff pulp line has started operations in 4Q25 Fluff pulp is expected to account for 12% sales in 2028. Currently on product homologation phase Fluff, Softwood and Hardwood gross pulp prices In Europe (USD/t) Expected % of total pulp sales volume in 2028 2.500 Standard BHKP 50% 12% 2.000 1.500 1.000 500 0 FLUFF NBSK EU (gross) BHKP EU (gross) Fluff Europe (gross) Fluff pulp, with c. 900€/t price gap with standard BHKP, is expected to generate an extra margin of c.+60 €/t Attention : This is an excerpt of the original content. To continue reading it, access the original document here .

View stock analysis, news, and events for Ence Energia Y Celulosa Sa