Altri, SGPS, S.A. · EURONEXT:ALTR
Altri, SGPS — Investor Presentation (April 2010)
25 slides from Altri, SGPS's investor presentation, April 2010
Slide 1: Pulp and forest: Presentation on Altri
Pulp and forest Presentation on Altri 2010
Slide 2: Disclaimer
Disclaimer All data contained in this presentation may contain confidential and/or privileged information, and it is exclusively intended for its addressees. Unauthorized copy, reproduction or distribution is strictly prohibited. This presentation is provided “as is” without any express or implied w
Slide 3: Altri's overview
Altri’s overview Business development Growth strategy Appendix 3 3
Slide 4: Company profile
Company profile • Pulp and forest Portuguese listed company – Started in 1Q05 with one pulp mill: 115K ton/year • 500K tones/year of pulp production in Portugal in 2008 – 3 mills (Celbi, Caima and Celtejo) • Expansion program to produce around 900K tones/year in 2010 – The most efficient European pl
Slide 5: Business areas
Business areas 100% 99.58% 100% 50%* Celbi Celtejo Caima EDP Bioeléctrica Pulp mill Pulp mill Pulp mill Biomass * Joint venture with EDP 5
Slide 6: Capital markets
Capital markets Major shareholders Stock price (€) 102.566 million shares Since beginning (Mar 05) 7€ Free-Float 6€ 53% 5€ 4€ Management 3€ 42% 2€ 1€ 0 UBS Mar 2005 2006 2007 2008 2009 5% 6
Slide 7: Business development
Altri’s overview Business development Growth strategy Appendix 7 7
Slide 8: Strategic approach: forest integration
Strategic approach: forest integration Pulp production process Biomass power production Bark, leafs & Wood fibres forest residues Cooked and bleached for pulp Burned to produce electrical power Lignin Burned to produce electrical energy from cogeneration 8
Slide 9: Forest management
Forest management 80K ha under management in Portugal – 30% self sufficiency rate in 2010 – Focus on eucalyptus globulus Strategic location – Close to the mills – Central and North of Portugal – 10 m3 per ha per year Focus on R&D – Over 40 years of experience – Genetic improvements obtained through
Slide 10: 3 pulp mills in Portugal
3 pulp mills in Portugal Celbi – Bleached Eucalyptus Kaft Pulp – Expansion project on the middle of the learning curve – 600K tones/year fully operational in 2Q10 Caima – Bleached Eucalyptus Sulphite Pulp – 120K tones/year of market pulp – TCF pulp suitable for tissue production Celtejo – Bleached E
Slide 11: Pulp sales: main markets
Pulp sales: main markets World economy exposure Breakdown 2009 – 91% of total production exported Main markets – Strategic focus on the European Other 6% Portugal 3% market Asia – Ongoing approach to the Chinese 6% market Main uses of Altri’s pulp Europe – Tissue 86% – Printing and writing – Special
Slide 12: Cogen in the pulp mills
Cogen in the pulp mills Pulp mills are self sufficient in power Cogen scheme Wood Cogen involves burning the black liquor at the recovery boiler, generating electrical power Pulp Digester – Sold to the grid in their entirely at a “green” tariff Energy needs Black liquor – all the power needed is acq
Slide 13: Biomass power production
Biomass power production 50% joint venture with EDP Cabeceiras – Over 120 MW under concession 12.8 MW Mortágua 1 8.6 MW Jul 2011E – #1 biomass player in Portugal In operation – Equity accounting Gondomar 27.9 MW Celtejo Tariff Jul 2011E 12.8 MW In operation – 106€/MWh updated yearly on Mortágua 2 re
Slide 14: Growth strategy
Altri’s overview Business development Growth strategy Appendix 14 14
Slide 15: Increasing cash flow generation
Increasing cash flow generation Optimism on the global pulp market – BEKP list price already increased from minimums (480 USD/ton) to 840 USD/ton Apr10 Increasing pulp production capacity – Around 900K tones per year in 2010 – Top 10 BEKP worldwide in 2010 Increasing operating efficiency – Reduce ca
Slide 16: Global pulp market overview
Global pulp market overview 2008 was a mixed year – Until 1H08 pulp price (as all other commodities) reached its max – From 1H08 until YE08 demand start to decrease – China pulp demand start to decrease sharply after the Olympics 2008 – European/USA demand was strongly affected by the economic crisi
Slide 17: BEKP list price in Europe
BEKP list price in Europe (€) Jun 2009: the turning point – From 3Q08 to 1H09 the eucalyptus (BEKP) pulp price down 41% – Since minimum (June09) BEKP pulp price up 63% – 2010 Ytd BEKP pulp price up 18% Jun 09 352€/ton 700,00 600,00 Price (Euros) 500,00 400,00 300,00 200,00 Jan-02 Jan-03 Jan-04 Jan-0
Slide 18: Inventories
Inventories Inventories at their lowest in European ports – Maximum reached in Feb 2009: 1.76 million tones – Average since 2004 of 1.21 million tones of inventories – December 2009 level: 0.76 million tones 2.000.000 2009 1.500.000 Tnnes 1.000.000 500.000 0 2004 2005 2006 2007 2008 J an-09 F ev -09
Slide 19: Increasing pulp production capacity
Increasing pulp production capacity Doubling capacity in Celbi – Doubling capacity to 600K ton of BEKP – Start operation in 2H09 – Total investment of 350M€ – Reduce cash cast per ton with the undergoing expansion plans – New cogen turbine with 75MW – Fixed cost dilution Increasing capacity in Celte
Slide 20: Increasing pulp production capacity
Increasing pulp production capacity Evolution of nominal pulp production capacity in Altri Thousand tones 930 870 620 560 600 315 255 150 190 115 140 140 115 115 115 120 120 2005 3ºT05 2007 2010 2011 Caima mill Celtejo mill Celbi mill 20
Slide 21: Increasing pulp production efficiency
Increasing pulp production efficiency Cash costs per ton 2Q09 (Hawkins Wright July 2009) Euro per ton 400 350 300 250 200 150 100 50 0 Brazil Indonesia Chile Iberia & China Sweden USA Finland Canada France World Norway and weighted Belgium average Altri 2010E Variable costs Fixed costs The most effi
Slide 22: Conclusion
Conclusion World pulp market cycle changed – Low inventories – Closure of inefficient capacity (Northern Europe, USA and Canada) – New capacity is only foreseeable from 2013/2014 – Price gap softwood/hardwood near max (+120USD/ton): substitution effect – BEKP supplying tissue market: huge growth opp
Slide 23: Appendix
Altri’s overview Business development Growth strategy Appendix 23 23
Slide 24: Global pulp industry overview
Global pulp industry overview Global pulp demand 1997/2009F Var % 1997 2006 2007 2008 2009F 07/08 Bleached softwood 16 789 21 540 21 985 21 212 21 075 - 1% Bleached hardwood 14 430 21 840 22 873 23 673 24 190 + 2% BEKP 5 578 10 300 11 945 13 241 15 085 + 14% Other hardwood 8 852 11 540 10 928 10 430
Slide 25: 2009 main indicators
2009 main indicators 1Q 09 2Q 09 3Q 09 4Q09 2009 2008 4Q09/3Q09 Var % 2009/2008 Var % k euros Total revenues 62,753 78,744 80,823 87,289 309,609 280,174 8,0% 10,5% Cost of sales 22,690 34,839 32,388 22,101 112,018 79,543 -31,8% 40,8% External supplies and services 22,204 29,419 28,255 29,135 109,012