Altri, SGPS, S.A. · EURONEXT:ALTR
Altri, SGPS — Altri — Investor Presentation (August 2010)
24 slides from Altri, SGPS's investor presentation, August 2010
Slide 1: Pulp and forest: Presentation on Altri 2010
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 – Export 95% of production • One of the most efficient pulp producers worldwide – 2Q10: 35.6% EBITDA margin • Expansion program to produce around 900K tones/year in 2010 – 3 hardwood mills in Portugal • 82K ha of forest under management in
Slide 5: Business development
Altri’s overview Business development Growth strategy Appendix 5 5
Slide 6: 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 6
Slide 7: Forest management
Forest management 82K ha under management in Portugal – 30% self sufficiency rate in 2010 – Mainly focused on eucalyptus globulus Strategic location – High yield locations – 10/12 years growing age – 10 m3 per ha per year Focus on R&D – Over 40 years of experience – Genetic improvements obtained thr
Slide 8: 3 pulp mills in Portugal
3 pulp mills in Portugal Celbi – Bleached Eucalyptus Kaft Pulp – Learning curve concluded – 600K tones/year operational in YE10 Caima – Bleached Eucalyptus Sulphite Pulp – 120K tones/year of market pulp – TCF pulp suitable for tissue production Celtejo – Bleached Eucalyptus Kaft Pulp – 150K tone/yea
Slide 9: 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 – Small exposure to the Chinese market 6% Main end uses – Tissue Europe – Printing and writing 86% – Specialties Other 12%
Slide 10: 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 11: 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 12: Growth strategy
Altri’s overview Business development Growth strategy Appendix 12 12
Slide 13: Increasing cash flow generation
Increasing cash flow generation Global pulp market – BEKP list price at high levels (870 USD/ton in Europe) Altri Increased its pulp production capacity – Around 900K tones per year in 2010 – Top 10 BEKP worldwide in 2010 Altri is Increasing operating efficiency – Reduce cash cost per ton with the u
Slide 14: BEKP list price in Europe
BEKP list price in Europe (€) Aug 10 685€/ton Jun 09 352€/ton 800,00 700,00 600,00 Price (Euros) 500,00 400,00 300,00 200,00 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Source: www.foex.fi 14
Slide 15: Inventories in European ports
Inventories in European ports Inventories sistematically below 700K tons vs historical avg of 1.3 million tons – Maximum reached in Feb 2009: 1.76 million tones – Average 2004/09: 1.334 million tones of inventories – November 2009: 0.651 million tones – historical min – July 2010: 0.686 million tone
Slide 16: Increasing pulp production capacity
Increasing pulp production capacity Doubling capacity in Celbi – Doubling capacity to 600K ton of BEKP – Total investment of 350M€ – Start operation in 2H09 – Reduce cash cast per ton with the undergoing expansion plans – New cogen turbine with 75MW – Fixed cost dilution Increasing capacity in Celte
Slide 17: 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 17
Slide 18: Increasing pulp production efficiency
Increasing pulp production efficiency Cash costs CIF per ton 2009 (Hawkins Wright April 2010) Euro per ton of pulp (EUR/USD exchange rate of 1.33) 500 450 400 350 300 250 200 150 100 50 0 Brazil Chile Indonesia World Iberia & China Sweden Finland USA France / Japan Canada weighted Norway Belgium ave
Slide 19: Conclusion
Conclusion Pulp market in a very tight situation – Inventories at very low levels in Europe – Significant new demand from China • 2009/11 will be open 6 million tones of new paper mills – Material new capacity only foreseeable from 2013/2014 Altri is fully prepared to take the full advantage – Expan
Slide 20: Appendix
Altri’s overview Business development Growth strategy Appendix 20 20
Slide 21: Business structure and shareholders
Business structure and shareholders 100% 99.58% 100% 50%* Celbi Celtejo Caima EDP Bioeléctrica Pulp mill Pulp mill Pulp mill Biomass * Joint venture with EDP Free-Float Major shareholders 58% 102.566 million shares Management 42% 21
Slide 22: Global pulp industry overview
Global pulp industry overview Global pulp demand 1997/2009 Var % 1999 2006 2007 2008 2009 08/09 Bleached softwood 18 472 21 540 21 985 21 225 20 240 - 9% Bleached hardwood 15 808 21 840 22 873 23 625 24 435 + 3% BEKP 7 001 10 300 11 945 13 195 15 480 + 17% Other hardwood 8 807 11 540 10 928 10 430 8
Slide 23: Global pulp industry overview
Global pulp industry overview Global pulp supply 2009 West East Canada USA Nordic Europe Europe LatAm Oceania Japan Asia/Africa TOTAL Bleached softwood 6 010 6 505 4 970 1 855 1 025 2 515 395 150 235 23 560 Bleached hardwood 1 320 2 180 965 2 860 820 12 925 50 620 6 430 28 170 BEKP - - 175 2 410 - 1
Slide 24: 2Q10 main indicators
2Q10 main indicators 2Q10/1Q10 Var 2Q10/2Q09 2Q 10 2Q 09 1Q 10 % Var% Operating income 135.549 78.744 108.666 24.7% 72.1% Cost of sales 41.400 34.839 37.655 9.9% 18.8% External supplies and services 31.391 29.419 29.686 5.7% 6.7% Payroll expenses 8.109 8.999 7.125 13.8% -9.9% Provisions and impairme