Semapa : Sociedade de Investimento e Gestão, SGPS, S.A. informa sobre as Contas do 1º Semestre de 2022 - versão em inglês

HALF‐YEARLY ACCOUNTS

PART 1 MANAGEMENT REPORT …………………………….……………...……......2

PART 2 DECLARATION REQUIRED UNDER ARTICLE 29 J.1 C) OF THE SECURITIES CODE …………………………………………….….…....…..…..29

PART 3 LIST OF QUALIFYING HOLDINGS AS REQUIRED BY SUB‐PARAS.

1. OF ARTICLE 9.1 OF REGULATION NO. 5/2008 OF THE SECURITIES CODE (CMVM)……………………..………...…….…….......31

PART 4 INTERIM CONSOLIDATED FINANCIAL STATEMENTS…….……....33

PART 5 LIMITED REVIEW REPORT ON THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS……...……………………………………..….…123

INTERIM REPORT | H1 2022

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PART 1

MANAGEMENT REPORT

INTERIM REPORT | H1 2022

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INTERIM REPORT | H1 2022

1 HIGHLIGHTS

• The recent conflict in Ukraine triggered by the Russian invasion, linked to the effects of the trade and financial sanctions imposed on Russia, and the way Covid 19 has been managed in China, have caused input prices to rise further, with emphasis on energy. Furthermore, such events have disrupted the supply of raw materials or logistics chains at the international level. 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.
• The value of investments in fixed assets in the first half of 2022 increased by 41.2% to approximately 74.5 million euros, against 52.7 million euros year on year. It should be noted the Pulp and Paper segment amounting to 34.3 million euros and the Cement segment to 37.1 million euros (20.5 million euros related to the CCL ‐ Clean Cement Line project in the Outão cement plant) which reflects the Group's commitment to the progressive decarbonization of its business units.
• At the end of the 2nd quarter, Semapa reinforced its investment in UTIS, a company dedicated to the development of sustainable projects linked to the use of hydrogen in continuous combustion optimization systems. This reinforcement of investment allowed UTIS to acquire the assets of Ultimate Power lda., adding to its business portfolio the manufacture of hydrogen production systems and the manufacture of internal combustion optimization systems. After the transaction, the Semapa Group and the Ultimate Cell Group maintain a 50% stake in the capital of UTIS, after the integration of the assets of Ultimate Power.
• At the end of H1 2022, consolidated interest‐bearing net debt stood at 934.2 million euros, 81.4 million euros below that at the end of 2021. As at 30 June 2022, the Group has a comfortable liquidity position ensured by cash and equivalents and a set of committed and undrawncredit lines.
• In the first half of 2022, the Semapa Group recorded consolidated revenue of 1,465.7 million euros (vs. 971.4 million euros in the first half of 2021). In the same period, 1,142.0 million euros were generated in Pulp and Paper/ Navigator (+59.8% year on year), 296.6 million euros in Cement/ Secil (+24.7%) and 27.1 million euros in Environment/ ETSA (+43.8%). Exports and foreign sales for the same period amounted to 1,091.2 million euros, accounting for 74.4% of revenue.
  Impacted by the pulp price index, overall increase in the cost of energy, logistics and raw materials, and also by very unbalanced supply vs. demand, the price index for UWF paper in Europe also increased significantly in the 1st half of 2022, driving growth in Navigator's revenue. Cement revenue reflects mostly the good progress in Portugal and Brazil.
• EBITDA in H1 2022 totalled 425.1 million euros (vs. 224.8 million euros in the first half of 2021). In the same period, 344.6 million euros were generated in Pulp and Paper (+129% year on year), 70.8 million euros in Cement (+5.5%) and 9.8 million euros in Environment (+35.5%). Consolidated EBITDA margin amounted to 29.0%, 5.9 p.p. above that in the same period of 2021.

The increase in EBITDA was driven by growth in the Pulp and Paper segment, benefiting from efforts to improve efficiency and consumption as well as the positive developments in UWF paper selling prices on international markets. EBITDA of the Cement segment increased 5.5%, resulting essentially from the improvement in Brazil operations, penalised by the negative effects of the increase in production costs, mainly energy costs and a decline in sales of surplus CO2 emission licences.

• Net profit attributable to Semapa shareholders at the end of the first half of 2022 stood at 141.5 million euros (vs. 73.1 million euros in 2021).
• With regard to Talent, it is worth mentioning the launch of the 1st Corporate Leadership Program, which involves all of the Group's top management, in partnership with a business school, an investment that reveals the Group commitment to the People and its development.

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LEADING BUSINESS INDICATORS

	IFRS ‐ accrued amounts			H1 2022			H1 2021		Var.			Q2 2022			Q2 2021		Var.
	(million euros)
	Revenue			1,465.7		971.4	50.9%			823.9		507.7	62.3%
	EBITDA			425.1		224.8	89.1%			270.4		117.3	130.5%
	EBITDA margin (%)			29.0%		23.1%		5.9 p.p.			32.8%		23.1%		9.7 p.p.
	Depreciation, amortisation and impairment			(110.4)		(93.3)		‐18.2%			(60.8)		(46.1)		‐31.8%
	losses
	Provisions			1.4		(2.3)	163.9%			1.3		(2.0)	163.5%
	EBIT			316.2		129.2	144.7%			210.9		69.2	204.9%
	EBIT margin (%)			21.6%		13.3%		8.3 p.p.			25.6%		13.6%		12.0 p.p.
	Net financial results			(62.4)		(24.0)		‐160.2%			(52.2)		(6.1)		‐757.8%
	Net monetary position			‐		(0.2)	100.0%			‐		(0.2)	100.0%
	Profit before taxes			253.8		105.0	141.8%			158.7		62.9	152.4%
	Income taxes			(64.6)		(14.7)		‐339.0%			(26.9)		(3.7)		‐633.5%
	Net profit for the period			189.2		90.3	109.6%			131.8		59.2	122.6%
	Attributable to Semapa shareholders			141.5		73.1	93.5%			99.4		47.7	108.5%
	Attributable to non‐controlling interests (NCI)			47.7		17.1	178.4%			32.3		11.5	181.1%
	Cash flow			298.1		185.9	60.4%			191.3		107.3	78.2%
	Free Cash Flow			158.0		155.1	1.8%			90.8		87.7	3.5%
				30/06/2022		31/12/2021		Jun22 vs.
						Dec21
	Equity (before NCI)			1,235.3		1,092.3	13.1%
	Interest‐bearing net debt			934.2		1,015.6		‐8.0%
	Lease liabilities (IFRS 16)			97.0		96.7	0.3%
	Total			1,031.1		1,112.3		‐7.3%

INTERIM REPORT | H1 2022

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