Semapa : First quarter of 2020 results

RESULTS PRESENTATION

Q1 2020

SEMAPA - SOCIEDADE DE INVESTIMENTO E GESTÃO, SGPS, S.A.

PUBLIC LIMITED COMPANY

AV. FONTES PEREIRA DE MELO, Nº 14, 10º, 1050-121 LISBOA

COMPANY REGISTRATION AND CORPORATE

TAXPAYER NUMBER: 502 593 130

SHARE CAPITAL: EUR 81,270,000 ISIN: PTSEM0AM0004

LEI: 549300HNGOW85KIOH584

TICKER: BLOOMBERG (SEM PL); REUTERS (SEM.LS)

TRANSLATION FROM THE ORIGINAL TEXT IN PORTUGUESE

1. SEMAPA'S PERFORMANCE

• − In the first quarter of 2020 the Semapa Group recorded consolidated revenue of 524.0 million euros. Exports and foreign sales amounted to 382.1 million euros, accounting for 72.9% of revenue.

• − Particular focus on overall increase in sales volume of the Pulp and Paper business segment compared to the same period in the previous year: +4% in paper, +34% in pulp and +10% in tissue. However, performance was constrained by lower sales prices than in Q1 2019: the BHKP pulp index (in euros) fell 29% and the A4 paper index dropped 5.5%. Compared with the fourth quarter of 2019, the increase in the volume of paper sold was not enough to offset negative developments in sales prices in the first quarter of 2020.

• − EBITDA in the first quarter of 2020 amounted to 119.1 million euros, 88.4 million euros derived from Pulp and Paper, 28.5 million euros from Cement and 2.7 million euros from Environment. It should be highlighted the positive evolution in the Cement and Environment segments in relation to the same quarter of the previous year. Also noteworthy is the 25.6% growth in EBITDA vis-à-vis the fourth quarter of 2019 from 94.8 million euros to 119.1 million euros with the positive contribution from all business segments, around +16.6 million euros (Pulp and Paper), +7.8 million euros (Cement) and +0.2 million euros (Environment), respectively. The consolidated margin stood at 22.7%, +5.4 p.p. up from that recorded in the fourth quarter of 2019.

LEADING BUSINESS INDICATORS

Cash flow

Net profit for the period

IFRS - accrued amounts (million euros) Re ve nue

EBITDA

EBITDA margin (%)

Depreciation, amortisation and impairment losses Provisions

EBIT

EBIT margin (%)

Net financial results Profit before taxes Income taxes

Attributable to Semapa shareholders Attributable to non-controlling interests (NCI)

Q1 2019

Var.

551.3 132.6

-5.0% -10.1%

• 24.0% -1.3 p.p.

  (57.8)

• 13.6% -2.2 p.p.

• 0.1<-1000%

• 74.9 -20.2%

  (9.2) 65.7

  Q4 2019

  Var.

  545.7

  -4.0%

  • 94.8 25.6%

  17.4%

  -182.9% -48.7%

  1.2%

  5.4 p.p.

  • (77.8) 26.7%

  • (6.6) 64.9%

  10.4 475.4%

  9.5 p.p.

  • (18.8) -38.2%

  • (8.5) 498.6%

  111.3

  (12.1)

  53.6 39.7 13.9

  -54.9% -56.6% -49.9% -24.9%

  • 21.2%-159.5%

  • 7.6 219.7% 12.0 43.7% (4.4) 257.1% 92.0 -9.2%

NET DEBT

Pulp and paper

Cement

Environment

Holdings

Semapa

84.2

31/12/1931/03/20Net Debt + IFRS 16

At 31 March 2020, consolidated net debt stood at 1,540.7 million euros, representing a reduction of 5.2 million euros from the figure recorded at year-end 2019. Excluding the effect of IFRS 16, net debt would have been 1,465.9 million euros, 4.8 million euros below the figure at the end of 2019. Such changes are positively influenced by the generation of operating cash flow and:

• − Pulp and paper: +84.2 million euros, including investments of about 22.7 million euros and distribution of 99.1 million euros in reserves.

• − Cement: -25.7 million euros, including investments of approximately 8.9 million, the result of sale of financial investments of 9.5 million euros and also the positive effect of the exchange rate depreciation of the BRL (24.1

  million euros);

• − Environment: -1.5 million euros, in spite of the difficulty in collecting the amounts billed to the Government; and,

• − Holdings: -61.8 million euros, resulting namely from reserves received from Navigator (69.4 million euros).

At the end of the first quarter of 2020, total consolidated cash amounted to 685 million euros, in addition to 380 million euros in contracted and undrawn credit facilities for the Group, thus ensuring strong liquidity in this uncertain moment. At present, the liquidity position is comfortable and robust, as it is sufficient to meet maturities over the next 12 months. In addition, companies have concluded or are in the process of concluding additional financing contracts that allow them to extend the maturity of their debt and reinforce the Group position in case of more aggressive stress scenarios.

NET PROFIT

Net profit attributable to Semapa shareholders increased from 12.0 million euros to 17.2 million euros compared to the fourth quarter of 2019, 22.5 million euros less year-on-year, due essentially to the combined effect of the following factors:

• − Around 13.4 million reduction in total EBITDA; the positive evolution in EBITDA from the Cement and Environment segments was not sufficient to compensate for the reduction in Navigator. This evolution resulted from the significant drop in pulp and paper prices in the course of 2019, despite the positive volume and costs performance.

• − An increase in depreciation, amortisation, impairment losses and provisions of 1.7 million euros arising from year on year increase in net provision;

• − Deterioration of net financial results by 16.8 million euros vis-a-vis the same period of the previous year, as a result of the combined effect of a positive change in the net financing cost and a very unfavourable change (21.0

  million euros) in exchange rate differences, mainly due to the depreciation of the BRL against the Euro, of accounts receivable and payable in foreign currency for Secil intra-group loans;

• − Decrease of about 2.6 million euros in income taxes.