Results 3Q21

9M21 Results 18

October 27th, 2021

Global ESG score:

91/100

Disclaimer

The information contained in this presentation has been prepared by Ence Energía y Celulosa, S.A. (hereinafter, "Ence").

This presentation includes data relating to future forecasts. Any data included in this presentation which differ from other data based on historical information, including, in a merely expository manner, those which refer to the financial situation of Ence, its business strategy, estimated investments, management plans, and objectives related to future operations, as well as those which include the words "anticipate", "believe", "estimate", "consider", "expect" and other similar expressions, are data related to future situations and therefore have various inherent risks, both known and unknown, and possess an element of uncertainty, which can lead to the situation and results both of Ence and its sector differing significantly from those expressly or implicitly noted in said data relating to future forecasts.

The aforementioned data relating to future forecasts are based on numerous assumptions regarding the current and future business strategy of Ence and the environment in which it expects to be situated in the future. There is a series of important factors which could cause the situation and results of Ence to differ significantly from what is expounded in the data relating to future forecasts, including fluctuation in the price of wood pulp or wood, seasonal variations in business, regulatory changes to the electricity sector, fluctuation in exchange rates, financial risks, strikes or other kinds of action carried out by the employees of Ence, competition and environmental risks, as well as any other factors described in the document. The data relating to future forecasts solely refer to the date of this presentation without Ence being under any obligation to update or revise any of said data, any of the expectations of Ence, any modification to the conditions or circumstances on which the related data are based, or any other information or data included in this presentation.

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9M21 business highlights

Strong EBITDA recovery driven by pulp prices and cost control

Strong pulp price recovery is boosting the business operating margin in 2021

Cost savings and efficiencies offset inflation in raw materials during 9M21

Higher renewable energy sales from the two new biomass plants

+125% EBITDA growth before hedges in 9M21 up to €134m

€40m underlying net income, before one-off hedges and the impact of the ruling on the Pontevedra concession

€16m Net debt reduction despite lower factoring usage and carry-over payments

• Average gross BHKP price in Europe of US$1,140/t in 3Q21 and US$ 967/t in 9M21
• Temporary decoupling between Europe and China due to strong demand in Europe and logistic constraints
• Pulp production: + 2% in 9M21 to 759 Kt
• Cash cost maintained at €377/t in 9M21
• Renewable Energy sales: +6% in 9M21 (excluding Puertollano CSP)
• Huelva 50-MW biomass power plant restarted in mid October
• Pulp business EBITDA before hedges: x6 in 9M21 to €100m
• Renewable business EBITDA before hedges: +21% in 9M21 (excluding Puertollano CSP) to €34m
• Regulatory collar implied non-cash provisions of €11m in the Pulp business and €18m in the Energy business
• Hedges signed in 2020 had a negative impact of €28m in Pulp and €20m Energy in 9M21
• The National Court´s ruling on the Pontevedra concession had a non-cashnet impact of €196m in 2Q21
• €16m net debt reduction to €162m despite a €19m reduction in the usage of factoring facilities and €49m of carry over payments
• €375m of cash on the balance sheet
• Prepayment of €115m of gross debt in the Pulp business in 9M21
• €130m RCF and €80m bilateral loans refinanced in 3Q21

Ence is a leader in sustainability in the

global Pulp industry, according to	 Ence ranked as the world leader in sustainability in the pulp and paper sector by Sustainalytics, which lifted
Ence's overall ESG score to 91/100 in 2Q21
Sustainalytics

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Strong pulp price recovery

Boosting the Pulp business operating margin in 2021

GROSS BHKP Prices in Europe														ENCE NET average sales price
(US$ / t)																						(€/t)
																							+60%		+27%
1.200																					600		614		516
1.000
																				500
																					384		407
800																					400
600																					300
400																					200
200																					100
12												18								0
11	12	13	13	14	14	15	15	16	16	17	17	18	19	19	20	20	21	21
Sep-	Mar-	Sep-	Mar-	Sep-	Mar-	Sep-	Mar-	Sep-	Mar-	Sep-	Mar-	Sep-	Mar-	Sep-	Mar-	Sep-	Mar-	Sep-	Mar-	Sep-		3 Q 2 0	3 Q 2 1	9 M 2 0	9 M 2 1
Source: FOEX

	GROSS pulp prices in Europe at US$ 1,140/t in 3Q21 and US$ 967/t		Ence´s NET selling price improved by 60% in 3Q21 and by
	27% in 9M21
	in 9M21
	Temporary decoupling between Europe and China due to strong		Boosting the pulp business operating margin

demand in Europe and logistic constraints

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No mayor supply increases in 2021

Pulp demand set to outgrow supply over 2022-25

Key Expected Annual Changes in Global Market Pulp Demand and Supply (m t)1

Mn t		2022	2023	2022-23	2024	2022-24	2025	2022-25
EXPECTED ANNUAL MARKET PULP DEMAND GROWTH		1,9	1,9	3,8	1,9	5,7	1,9	7,6
EXPECTED ANNUAL MARKET PULP SUPPLY GROWTH (CONFIRMED)	0,5	1,7	2,2	1,8	4,0	1,3	5,3
SUZANO (Brasil)	BHKP				0,7	0,7	1,4	2,1
UPM (Uruguay)	BHKP		1,4	1,4	0,6	2,0		2,0
ARAUCO (Chile)	BHKP	0,7	0,5	1,2		1,2		1,2
BRACELL (Brasil)	BHKP	0,2	0,2	0,4		0,4		0,4
MET SA FIBER (Finland)	BSKP				0,6	0,6	0,3	0,9
CMPC (Brasil)	BHKP				0,3	0,3		0,3
NON COMPETITIVE CAPACITY AVERAGE ANNUAL CLOSURES		(0,4)	(0,4)	(0,8)	(0,4)	(1,2)	(0,4)	(1,6)
SURPLUS / (DEFICIT)		(1,4)	(0,2)	(1,6)	(0,1)	(1,7)	(0,6)	(2,3)

Source: ENCE estimates

1. Estimates correspond to the expected increase in supply and demand for market pulp for paper production. They therefore exclude the production of integrated pulp and other pulp grades such as Dissolving Pulp or Fluff.

We assume one of the two lines of the Bracell project in Sao Paulo will produce Dissolving Pulp for the Group´s internal use and the other line will by mostly destined to the expansion of the Group paper and cardboard capacity in China.

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