RESULTS PRESENTATION | H1 2023

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RESULTS PRESENTATION | H1 2023

1 HIGHLIGHTS

INVESTMENT OF 435 M€ IN THE FIRST HALF 2023 - NEW GEOGRAPHY AND NEW BUSINESS UNIT

  • The current political and economic context, marked by a slowdown in the economy, inflation, and the unending war in Ukraine, results in a continuing situation that is highly unpredictable and extremely volatile. The effectiveness of Europe's monetary and economic policies and the future developments in the geopolitical risk will play a determining role in clarifying the current uncertainties. The Semapa Group is managing these negative events with a strong commitment to increasing efficiency, boosting productivity, moderating the increase in variable costs by curbing specific consumption, with continued efforts to contain fixed costs.
  • In line with its strategy for Group diversification, on 31 March Navigator acquired Gomà-Camps Consumer in Spain for approximately 85 million euros, hereby seeking to reinforce its presence in the At Home segment. The integration of this new plant will position Navigator as the second largest Iberian producer of Tissue.
    At the end of the 2nd quarter, Semapa took another step in the new investment and diversification cycle; it purchased 100% of the shares of Triangle's Cycling Equipment in Portugal. As a result of its strong commitment to R&D, Triangle's is currently a world reference in the production of e-bike frames, with a customer portfolio composed of several of the industry's prestigious brands.
  • Investments in fixed assets in the first half of 2023 grew by about 70 million euros YoY, thus amounting to approximately 143.7 million euros. Emphasis on the Pulp and Paper segment with 112.6 million euros (in particular the new Recovery Boiler in Setúbal) and the Cement segment with 25.7 million euros (10.6 million euros related to the CCL - Clean Cement Line project at the Outão cement plant) reflecting the Group's commitment to gradual decarbonisation of its business units.
  • In the first half of 2023, the Semapa Group recorded consolidated revenue of 1 344.2 million euros (vs. 1 465.7 million euros in the first half of 2022). In the same period, 979.5 million euros were generated in Pulp and Paper/ Navigator (-14.2% year on year), 339.8 million euros in Cement/ Secil (+14.6%) and 24.9 million euros in Other Business (-8.1%). Exports and sales abroad for the same period amounted to 977.6 million euros, accounting for 72.7% of revenue.
    Following the extraordinary events of 2022, the normalisation of market conditions raised significant constraints in the pulp and paper industry in the first half of 2023, with the slow process of reducing accumulated stocks across the distribution chain continuing over the past year. This imbalance affected demand significantly in all paper segments, with the exception of the tissue segment, which pulled Navigator's revenue down. Cement revenue reflects mostly the favourable progress in Portugal, Tunisia and Lebanon.
  • EBITDA in H1 2023 totalled 331.3 million euros (vs. 425.1 million euros in the first half of 2022). In the same period, 253.0 million euros were generated in Pulp and Paper (-26.6% year on year), 71.5 million euros in Cement (+0.9%) and 7.1 million euros in Other Business (-27.8%). The consolidated EBITDA margin of 24.6% was -4.4 p.p. below that in the same period of 2022.

The reduction in EBITDA was mainly due to developments in the Pulp and Paper segment, where variable costs, namely logistics, energy and some raw materials dropped significantly in the 1st quarter and even more in the 2nd quarter, partially offsetting the reduction in paper sales volumes, together with the effort to maintain prices and enrich the product mix. EBITDA in the Cement segment increased slightly, as the improvement in Portugal more than offset the negative variation in other countries.

  • Net profit attributable to Semapa shareholders at the end of the first half of 2023 stood at 107.6 million euros (vs. 141.5 million euros in the same period in 2022).
  • At the end of H1 2023, consolidated interest-bearing net debt stood at 1 110.3 million euros, 316.1 million euros more than that at the end of 2022 despite the payment of dividends of 136 million euros and the investment amount of 435 million euros, which demonstrates the Group's ability to generate cash flow. As at 30 June 2023, the Group has a comfortable liquidity position backed up by cash and equivalents and a set of committed and undrawn credit lines.

1

LEADING BUSINESS INDICATORS

IFRS - accrued amounts

H1 2023

H1 2022

Var.

Q2 2023

Q2 2022

Var.

(million euros)

Revenue

1 344.2

1 465.7

-8.3%

669.1

823.9

-18.8%

EBITDA

331.3

425.1

-22.1%

164.5

270.4

-39.2%

EBITDA margin (%)

24.6%

29.0%

-4.4 p.p.

24.6%

32.8%

-8.2 p.p.

Depreciation, amortisation and impairment

(102.7)

(110.4)

7.0%

(53.5)

(60.8)

12.0%

losses

Provisions

(3.7)

1.4

-358.5%

(2.9)

1.3

-330.5%

EBIT

224.9

316.2

-28.9%

108.0

210.9

-48.8%

EBIT margin (%)

16.7%

21.6%

-4.8 p.p.

16.1%

25.6%

-9.4 p.p.

Income from associates and joint ventures

1.2

1.6

-26.8%

(0.0)

1.2

-102.3%

Net financial results

(33.3)

(64.0)

48.0%

(20.4)

(53.4)

61.8%

Profit before taxes

192.8

253.8

-24.0%

87.6

158.7

-44.8%

Income taxes

(46.1)

(64.6)

28.6%

(18.6)

(26.9)

30.9%

Net profit for the period

146.6

189.2

-22.5%

69.1

131.8

-47.6%

Attributable to Semapa shareholders

107.6

141.5

-23.9%

50.6

99.4

-49.1%

Attributable to non-controlling interests (NCI)

39.0

47.7

-18.3%

18.4

32.3

-42.9%

Cash flow

253.1

298.1

-15.1%

125.5

191.3

-34.4%

Free Cash Flow

(162.5)

157.1

-203.5%

(194.2)

89.9

-316.0%

Jun23 vs.

Var.

30/06/2023

31/12/2022

Dec22

Equity (before NCI)

1 357.9

1 323.4

2.6%

Interest-bearing net debt

1 110.3

794.2

39.8%

Lease liabilities (IFRS 16)

103.9

101.2

2.6%

Total

1 214.2

895.4

35.6%

RESULTS PRESENTATION | H1 2023

2

2 PERFORMANCE OF THE SEMAPA GROUP BUSINESS UNITS

2.1. BREAKDOWN BY BUSINESS SEGMENTS

IFRS - accrued amounts

Pulp and Paper

Cement

Other business

Holdings

Consoli

(million euros)

Navigator

Secil

dated

H1 2023

23/22

H1 2023

23/22

H1 2023

23/22

H1 2023

23/22

H1 2023

Revenue

979.5

-14.2%

339.9

14.6%

24.9

-8.1%

(0.1)

43.1%

1 344.2

EBITDA

253.0

-26.6%

71.5

0.9%

7.1

-27.8%

(0.3)

-173.9%

331.3

EBITDA margin (%)

25.8%

-4.3 p.p.

21.0%

-2.8 p.p.

28.3%

-7.7 p.p.

-

-

24.6%

Depreciation, amortisation and

impairment losses

(71.7)

13.0%

(29.1)

-11.0%

(1.8)

-9.3%

(0.1)

-3.4%

(102.7)

Provisions

(1.3)

-140.9%

(2.4)

-42.0%

-

-

-

-100.0%

(3.7)

EBIT

180.0

-32.2%

40.0

-6.8%

5.3

-35.1%

(0.4)

-82.1%

224.9

EBIT margin (%)

18.4%

-4.9 p.p.

11.8%

-2.7 p.p.

21.3%

-8.9 p.p.

-

-

16.7%

Income from associates and joint

ventures

-

-

0.0

106.7%

-

-

1.2

-43.5%

1.2

Net financial results

(8.5)

81.2%

(22.4)

-35.5%

(0.0)

76.3%

(2.4)

-2.4%

(33.3)

Profit before taxes

171.5

-22.1%

17.6

-32.1%

5.3

-34.7%

(1.7)

-217.4%

192.8

Income taxes

(39.6)

38.1%

3.1

137.5%

(0.4)

74.6%

(9.2)

-200.6%

(46.1)

Net profit for the period

131.9

-15.6%

20.7

16.7%

4.9

-24.7%

(10.9)

-225.9%

146.6

Attributable to Semapa

shareholders

92.3

-15.6%

21.4

25.7%

4.8

-25.0%

(10.9)

-225.9%

107.6

Attributable to non-

controlling interests (NCI)

39.6

-15.6%

(0.7)

-193.5%

0.1

10.4%

-

-

39.0

Cash flow

204.9

-13.0%

52.3

14.4%

6.6

-17.9%

(10.7)

-222.8%

253.1

Free Cash Flow

9.7

-94.4%

32.6

286.6%

(0.7)

-115.1%

(204.2)

<-1000%

(162.5)

22/21

22/21

22/21

Interest-bearing net debt

572.5

277.4

3.9

256.5

1 110.3

Lease liabilities (IFRS 16)

65.2

37.0

1.3

0.4

103.9

Total

637.7

314.3

5.2

256.9

1 214.2

Note 1: Figures for business segment indicators may differ from those presented individually by each Group, as a result of consolidation adjustments.

Note 2: On 19 June 2023, Semapa, through its subsidiary Aphelion, acquired 100% of Triangle's shares. Semapa has initiated the necessary procedures for the recognition and measurement in the Consolidated Financial Statements of Goodwill and the purchased assets and liabilities. As at 30 June 2023, the Other Business includes Triangle's (balance sheet values) and ETSA's business.

RESULTS PRESENTATION | H1 2023

3

2.2. OVERVIEW OF NAVIGATOR ACTIVITY

totalconsolidated of% Revenue H1 2023

73%

% of consolidated total

EBITDA H1

2023

76%

HIGHLIGHTS IN 2023 (VS. 2022)

  • Revenue amounted to 979.5 million euros (-14.2% vs. H1 2022), pressed by lower sales volumes of UWF paper and energy.

REVENUE

1 142.1

979.5

Million Euros

H1 2022

-14.2%

H1 2023

REVENUE BREAKDOWN BY SEGMENT

Million Euros

133.8

126.5

629.1

90.1979.5

Δ% 23/22

H1

2022

RESULTS PRESENTATION | H1 2023

-22.7%

+17.4%

+50.0%

-31.3%

-14.2%

UWF Paper

BEKP Pulp

Tissue

Energy

H1 2023

814.0

107.8

89.2

131.1

1 142.1

4

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Semapa - Sociedade de Investimento e Gestão SGPS SA published this content on 28 July 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2023 19:10:08 UTC.