Good afternoon, ladies, and gentlemen. Welcome to the ENCE First Quarter 2022 Results Presentation. I now hand over to Mr. Ignacio de Colmenares, Executive Chairman, and Alfredo Avello, CFO. Gentlemen, please go ahead. Good afternoon, ladies, and gentlemen. Thank you for joining ENCE's First Quarter 2022 Results Conference Call. Our CFO, Alfredo Avello, and our Head of IR, Alberto Valdés, are also here with me. After the presentation, we will be pleased to answer any questions you may have. Let's start with slide three, where we summarize the highlights of yet another quarter with strong free cash flow generation and net debt reduction. Operating cash flow increased to EUR 87 million, and free cash flow amounted to EUR 58 million, allowing for a 54% net debt reduction in the quarter, down to EUR 47 million. We have started 2022 with a net income of EUR 13 million in the first quarter, and we will distribute a first interim dividend for the same amount on May 11th. Pulp prices continued improving during the first quarter to $1,200, and main pulp producers have announced further price hikes up to $1,250 from April. These strong pulp prices have more than offset the inflation in raw materials and logistics, boosting the operating margin of the pulp business up to EUR 137 per ton, despite the three weeks transport strike in March. Our differentiated and higher value added products accounted for 18% of pulp sales, compared to 12% in the first quarter 2021. In all, the group EBITDA improved by 3 x compared to the same period last year, up to EUR 47 million. It is important to highlight that these results already include the estimated change in the remuneration parameters applicable to renewables in 2022, as well as the limited consequences of the transport strike in our expected annual pulp sales, with a net positive comparison with the cash flow guidance given in the Capital Markets Day. The Supreme Court has admitted two of the appeals we filed against the national court rulings, annulling the extension of the Pontevedra concession. This allows us to be more optimistic. Remember, we have launched the Navia Excelente project, which will give us the same EBITDA as Pontevedra. In any case, we have a very strong balance sheet with a net debt of just EUR 47 million and EUR 413 million cash imbalance, which provides full flexibility in any scenario. Let's move now to slide four, which shows our consolidated cash flow statement for the quarter. As you can see, EBITDA reached EUR 47 million as a result of strong pulp and energy prices. On top of that, the regulatory collar, which is the difference between the energy market price and its regulated price, which we collect but is not included in EBITDA, implied an extra cash inflow of EUR 40 million, lifting the consolidated operating cash flow to EUR 87 million. As a result, consolidated free cash flow reached EUR 58 million in the first quarter, despite a 24% reduction in the use of factoring lines and EUR 11 million growth and efficiency CapEx. As you can see in the following slide, number five, pulp prices have continued improving in 2022. Gross pulp prices in Europe have reached $1,200 per ton, and the main pulp producers have announced further price hikes in Europe up to EUR 1,250 per ton. Industry specialists are now forecasting an average price of close to $1,200 per ton for the full year. Let's move now to slide four, where you can see how these strong pulp prices have more than offset the inflation in raw materials and logistics, boosting the operating margin of the pulp business up to EUR 137 per ton, despite the effect of the three weeks transport strike in March. The cash cost of EUR 484 per ton is in line with the guidance given in the previous quarter. The 24% increase year-on-year is mainly due to non-recurrent wood imports and the rising chemical and logistics costs, together with a lower fixed cost dilution in this quarter due to the annual shutdowns and the three weeks transport strike in March. Note that the pulp volume unsold during the first quarter due to the transport strike will be partially recovered in the second quarter without any negative impact on the cash flow guidance given in our Capital Markets Day. The change in the remuneration parameters applicable to renewables in 2022 implied a EUR 30 per ton cash cost increase in the quarter. On top of the previous EUR 484 per ton, which is offset at the EBITDA level by a lower regulatory collar provision. This change has no negative cash impact on the guidance given in the Capital Markets Day, which already anticipated a similar change, assuming a market electricity price of EUR 48/ MWh as from April without any additional cash inflow from the regulatory collar. Let us look now at our pulp sales on slide seven. Our pulp sales in the quarter amounted to almost 200,000 tons, 19% less than in the same period last year, mainly due to the three week transport strike in March. As I have said, part of this volume will be recovered in the second quarter. Over 90% of these sales went to the European market, where our customers benefit from ENCE's unique wide portfolio of sustainable products and shorter delivery times. Our differentiated products accounted for 18% of our pulp sales, compared to 12% in the same quarter last year. These higher value-added products are more sustainable and are well adapted to replace plastic and softwood pulp. They also give higher margins. Moving on to slide number eight, I wish to make clear that ENCE has no direct exposure to the war in Ukraine. Firstly, all our facilities are located in Spain, and our commercial activities are mainly located in the Atlantic region. Secondly, the wood and biomass that we use are locally sourced. Chemicals are also locally sourced or imported from Western Europe. Thirdly, our pulp biomills are energy self-sufficient. They co-generate all the renewable energy required for the pulp production process, and they have no gas dependence. Turning now to slide number nine, let me give you an update about our Pontevedra concession. The admission of our appeals to the Supreme Court allows us to be more optimistic, although we must prudently wait for the final resolution, which is expected by year-end. In any case, the potential closure of the biomill was already provisioned in our accounts last year. It is important to highlight that the annual free cash flow contribution from Pontevedra would be more than offset by the Navia Excelente project and by either of the two alternatives available to expand Navia production. I will now invite Alfredo to review the financial figures in more detail. Thank you, Ignacio. As you can see in the following slide, number 10, ENCE shows another quarter with very strong operating results. Our Pulp business EBITDA improved by 2.5 x year-on-year, up to EUR 21 million, driven by the strong recovery in pulp prices, which has more than offset the lower sales volume due to the transport strike in March and the inflation in raw materials and logistics. Our renewable energy business EBITDA increased by 3 x year-on-year, driven by a 35% increase in energy sales and higher prices. On top of the consolidated EBITDA figure of EUR 47 million, and not included in it, we had a EUR 40 million cash inflow coming from the regulatory collar, which is fully free to be used without any restriction. As a result, the operating cash from the quarter increased up to EUR 87 million. With such strong operating results, our attributable net income reached EUR 13 million. A first interim dividend for the same amount, equivalent to EUR 0.054 per share, will be paid on May 11. Let me remind you that we have a new dividend policy based on cash flow available for distribution and subject to prudent leverage ratios per business. As a reference, we use 2.5x EBITDA in the pulp business and 5x in the energy business, using mid-cycle prices and considering existing commitments and investment plans. As you can see in the following slide, number 11, we closed the first quarter with a very strong financial position. Net debt was reduced by 54%, down to EUR 47 million, and we finished the quarter with EUR 430 million cash on balance. Our pulp business ended with a net cash position of EUR 14 million, including EUR 17 million related to lease contracts and a cash balance of EUR 297 million. During this quarter, we also prepaid EUR 24 million of several financial facilities. On the other hand, net debt in the renewable energy business amounted to EUR 61 million at the end of the quarter, with long-term maturities and a cash balance of EUR 134 million. Turning now to slide 12, let me summarize the main changes in the remuneration parameters applicable to renewables in 2022. These changes will be further developed by means of a ministerial order, and will be applicable as from January 1st, 2022. Our first quarter results already include them. Main impacts of the new regulation in the cash flow are three. Firstly, the new regulated electricity price for 2022 will be approximately EUR 122/MWh, compared with the previous EUR 48. Since the new regulated price is higher than the operating cost of our standard plant, the complementary remuneration related to the operation, what we call the RO, will not apply for this year. This cash flow adjustment amounts to EUR 108 million for both pulp and energy business. Secondly, the complementary remuneration related to the investment, what we call the RI, will be adjusted in advance in 2022 rather than in 2023. This adjustment amounts to EUR 15 million. Thirdly, the government has announced that it will cap the gas price at EUR 50/MWh, starting May this year, which implies a market pool price of approximately EUR 140-EUR 150/MWh from that date. Since the average market price until April has been EUR 220, assuming that such gas cap price is successfully implemented as from May, the resulting average market pool price for the year should be around 170 EUR/MWh. In the information given in our Capital Markets Day, we were already anticipating a change in the regulation. We were assuming no cash inflows above 48 EUR/MWh, which was the previous regulatory price. Therefore, the implementation of the new regulation with a pool price of 170 EUR/MWh will improve our cash flow by EUR 189 million. All in all, the estimated net positive impact of the new regulation when comparing with the cash flow guidance given in our Capital Markets Day will amount up to EUR 66 million. Let me please now return the lead of this presentation back to our Chairman for the final slides. Thank you, Alfredo. Moving now to slide number 13, I would like to mention the highlights of our sustainability performance in the quarter. ENCE is already at the forefront in sustainable forestry, in the circular economy, in social commitment, in gender equality, and in corporate governance. Our best practices have been recognized by independent agencies such as MSCI, FTSE4Good, or Sustainalytics, which, in its latest study, ranked ENCE as the most sustainable player in the global pulp market. I would like to highlight the following achievements in the first quarter. Firstly, we have accomplished our zero accidents goal after one year without any accidents in our pulp business. Remember that we have zero accidents in the energy business in 2021. Those are major achievements in our industry and demonstrates a strong commitment to the safety of our operations. Secondly, we have continued to reduce the odor of both pulp biomills, which is already below one minute per day, having reached the lowest level in Navia's history during the first quarter. These results demonstrate our strong commitment to the communities and our environment. Finally, I would like to highlight the continuous reduction of our greenhouse gas emissions in 2021, in line with the targets of our sustainability plan, showing our strong commitment to mitigate climate change. To conclude this presentation, I would like to emphasize the following key messages. Strong pulp and energy prices are boosting the operating margin and cash flow of our businesses. I expect a strong pulp market in 2022. 2022 will be a year of strong operating results and even better free cash flow generation. The first interim dividend of EUR 13 million will be distributed in May, and two more will be announced at the end of July and October. The admission of our appeals by the Supreme Court allows us to be more optimistic about the continuity of Pontevedra. We have already launched the Navia Excelente project, which is independent of the Pontevedra outcome and will offset the impact of a potential closure of the biomill. Our strong balance sheet provides full flexibility in any scenario. Thank you. We would be pleased to hear any questions you may have. Ladies, and gentlemen, the Q&A session starts now. If you wish to ask a question, please press zero one on your telephone keypad. You will have the opportunity to ask all the questions that you may have. We kindly ask you to ask only one question at a time instead of stating multiple questions at the beginning to our speakers. Thank you. The first question comes from Gonzalo de Cueto from BNP Paribas Exane. Please go ahead. Hi. Good afternoon, Ignacio, Alfredo, Alberto, and thank you for taking my questions. So just two questions from my side. The first one would be regarding the lack of selling capacity and the eucalyptus situation in Galicia. I mean, have you seen any improvement at all in recent weeks and months? I mean, I've seen in your accounts that you have invested in new equipment during the quarter. I mean, could you give us any color on this, please? Yes, thank you for your question, Mr. de Cueto. Well, the wood market continued to be very tight in Europe and in Spain as well, in Iberia as well. The main reasons were the huge demand of furniture for housing due to the COVID in all Europe, and a strong demand of pine wood for producing this furniture. As I have explained to you different times, the capacity of harvesting is limited in the northwest of Spain, and then with extremely high prices of pine wood, well, this capacity is switching from eucalyptus to pine, and then we have difficulties to harvest all the eucalyptus available to be harvested. There is a second factor, increasing this strong demand of pine is the invasion of Russia in Ukraine. The flow of chips from Russia to Scandinavia and the flow of timber products from Russia to Europe has been canceled. There is an increase in demand of chips all around Europe and strong demand of timber products all around Europe. The prices of the pine are rocketing again in Spain. What are we doing in such circumstances? Well, we are increasing our capacities of retailing. You know we are buying 3 million m³ per year. Out of these 3 million m³ per year, we are buying directly to the owners, to the small forest owners, 1 million. We are buying 1 million tons through small harvesting companies, and we are buying 1 million tons through big traders. The market who is at risk, the segment who is at risk is this third one, the one controlled by the traders because the traders, well, they can sell to us or to third parties. We are increasing the volume we are buying directly, and we are investing in harvesting machinery, financing small companies to harvest more for us. We imported wood at the end of last year. We haven't imported wood till now this year, which is good. We will be forced to buy again from third countries, but due to the strike in transport. The strike in March has been three terrible weeks, where we haven't been able to get any single cubic meter of wood in the three weeks. The Pontevedra pulp mill has been operating at 100%. Sorry, the Navia mill, because of this lack of wood, we've been operating at 60%-50% only. We have low stocks of wood now. Then we are operating well on the Spanish market. We are recovering the stocks. We will send a bit more wood than expected from Huelva, and we probably will buy one or two more chip carriers in order to solve this problem. What I would like everybody to understand is that's an extraordinary situation. We are not going to have a war in Ukraine every year, and we are not going to have a three week strike every year. We are a company very proud to say that 100% of the wood we are using comes from radius of 80 km of our pulp mills. It is one of our most competitive advantage. Well, and maybe this year we are going to be forced to buy something between 100,000 m³ and 200,000 m³ from Huelva and from elsewhere in order to recover what we have lost on the strike. It is important to notice that the volume lost on the strike was also lost in the harvesting. As the bottleneck is harvesting, it is impossible to recover this volume. As a résumé, the situation is tougher than three weeks, three months ago because the war in Ukraine, because the three-week strike, and we are increasing the capacity of harvesting in northwestern, financing harvesting machines, and we are sending a bit more wood than expected from Huelva. But all that is extraordinary, and we think that in 2023 we will come to a normal situation. Thank you, Gonzalo. Okay. Very useful. Nothing. The second one, I mean, it's kind of a follow-up on this, on the first one, regarding the cash costs that you expect for this year. I mean, the latest number that I have in mind, it was EUR 450 per ton. I mean, do you still feel comfortable with this number? No, no. Today, we are thinking more on a cash cost, an average cash cost for the full year of EUR 485 per ton. It is very in line with what we said on the Capital Markets Day, EUR 485. You have to take into account that inside this number, we have the effect of the new renewables remuneration. Only that has an effect of EUR 30 per ton, and it is already included there, okay? It is neutral from an EBITDA point of view because we have an actual higher cash cost, but on the other side, we have a better EBITDA. The fact is that today we expect an average cash cost of EUR 485. We expect cash costs to be below EUR 500 in second quarter, yeah, to be around EUR 490. Then we expect cash costs on third and fourth quarter to be already around EUR 470. All that gives us Okay. -485. Okay. Understood. Many thanks. Thank you. Thank you. The next question comes from Álvaro Lenze, from Alantra Equities. Please go ahead. Hi. Thanks for taking my questions. The first one would be on your new dividend policy. I understand that it is now dependent on cash flow. I don't know if you can provide us with some kind of KPI or formula or calculation to estimate what the dividend would look like in different scenarios. I don't know if you're just taking the ceiling in terms of leverage and distributing everything that exceeds that ceiling, or is it based on 100% cash flow payout on the cash flow if the leverage allows for it. If you could provide more detail on the calculation. Thanks. Yes, Álvaro. Yeah. There is two limits. There is the limit of our dividend policy. I repeat that. What we have as a policy is that we, when we want to have a maximum debt on the pulp business of 2.5x the normal EBITDA and the normal, the recurrent EBITDA of our pulp business is EUR 140 million. Then we are talking roughly, we could have a maximum net debt of EUR 350 million in the pulp business. We have decided not to have a net debt of more than 5 x EBITDA in the energy business. As we have a recurrent EBITDA of something between EUR 60 million and EUR 80 million, that is EUR 300 million. That means we could have, at ENCE level, a maximum debt of EUR 650 million. Today, we have below EUR 50 million. We could give, according to this policy, up to EUR 600 million EBITDA. We also say on this policy that, well, we have to take into account the commitments we have in terms of investments. Well, we don't know what is going to happen with Pontevedra. We are very much optimistic today if you compare that with six months ago. We will know that at the end of the year. We have a good plan, Navia Excelente, to compensate the loss of the EBITDA from Pontevedra if we are obliged to shut down. We want to have full flexibility to do whatever we think we have to do once we will know what happens with Pontevedra. We will not give EUR 600 million of dividend this year. There is another limit with a legal limit. The legal limit in Spain is that on the interim dividends, you cannot pay more than your net profit. I would say that on the second quarter and on the third quarter, we will distribute as a maximum the net profit of the quarter. Okay. Okay. Understood. A second question would be on maybe on the industry in Iberia. Altri has announced to be exploring an investment in dissolving pulp in Galicia. How do you see potential competition, both on your future plans of entering the dissolving pulp and also whether this would imply any incremental competition for wood sourcing, and how do you see the potential impact? Well, I have to say several things to answer to your question. First, this project of Altri is at a very early stage. The CEO of Altri was saying one month ago that they will disclose the location of the mill soon. They did that yesterday. The decision was not going to be taken before the end of the year, and they need one to confirm that the project is profitable and they are going to have the yield they expect. Altri is a very serious company, then I'm pretty sure they will not go on this project if everything is not clear and it may be a problem. Two, they require Next Generation Funds for this project. You know that we are talking a lot about Next Generation Funds in this country, but we don't know anything yet. I think that this project is on early stage. Regarding our dissolving pulp project in Navia, as we said on the Capital Markets Day, in case we lose in Pontevedra on the tribunals, we have two possibilities. One possibility is to expand Navia by only 100,000 tons with a limited investment of EUR 100,000, sorry, of EUR 100 million. The other possibility is to go on these 350,000 tons project with a swing mill, BHKP and dissolving pulp, who is fully permitted. We have already all the permits and all the land to do that in Navia, and the support of the local government and the local city of Navia. We will decide that, well, once we will know something about Pontevedra. Well, it will depend on the amount of cash we have in the company at this time, and it will also depend if we have Next Generation funds or not. I would say in résumé that we still don't know what we are going to do in Navia, and I think that Altri still don't know what they are going to do in Galicia. We have all projects and we have to wait to take the decision. Okay. Last question on my side would be if you could give us some indication on the progress on the Navia Excelente plan, and when should we see the first EUR 25 million investment you expected for this year? How things should ramp up over the coming years? Thanks. Yeah. Well, nothing has changed since we explained that on the Capital Markets Day. We are going to approve probably the investment before summer. We are finishing all the contracts with the EPC contractors. Today it is almost finished. Well, we are finishing all the detailed engineering for the civil works. Well, we are going to approve that in June or July, and we are starting. We see in fluff, if you remember, we see the EBITDA already starting to improve in 2024. We think that in 2024, we can already produce fluff in Navia. We are extremely optimistic because there is a very high demand and very high interest in all our customers. You know that the market of fluff in Europe is 1.6 million tons, and out of these 1.6 million tons, 1.2 million tons are coming from the States. The customers, they want to buy the pulp locally, and they are waiting our project. The second project is the decarbonization of Navia. At the same time, we substitute gas by lignin, and we save a lot of money. We debottleneck the recovery boiler, and we are able to produce 30,000 tons more at Navia, while we are on the engineering. As we said on the Capital Markets Day, we would like to sign the contract before summer next year. Then we expect to have EBITDA from this project also in 2024 in the second half of the year. Regarding the investments we are doing for increasing the differentiated products more sustainable and with higher margins in Navia, well, we are on the engineering. As I said, well, this EBITDA will start to increase already from next year. Because we can already increase some part of these differentiated products without any investments, because the investments are going to occur during 2023 and 2024. Nothing new and everything is going on. What is extremely important is that with all these new projects in Navia, well, we compensate almost all the EBITDA, the normal EBITDA of Pontevedra with a more competitive situation. We are optimistic regarding the Supreme Court, and we are optimistic regarding Navia Excelente. Okay. Thank you very much. Thank you, Álvaro. Thank you. The next question comes from Edward Bottomley from Berenberg. Please go ahead. Good afternoon. Thank you for taking my questions. The first one from me would be around your tax rate in the pulp business. It seems like you paid a tax rate of roughly 0%, which in the release, you attribute to the write-down of Pontevedra. How should we expect your tax rate through the year to develop? Should we be expecting you to pay no taxes in the pulp business through all of 2022? Sorry, yeah. There's two impacts here. Number one, at the end of the year, there will be no tax payment. The law in Spain is structured that you have to make advance payments. You will need to see some tax advance payments during this year that will be recouped within next year. At the end is yes. We're talking about. Sorry. I mean, you will have a cash out in tax this year, 2022, of around EUR 25 million. That will be recouped. It will be given back by the inland revenue next year. This is in pulp. Your P&L taxes would be zero. Am I correct in thinking that? Sorry if I might have misunderstood. No. Accounting speaking, you need to show the 25%. A different thing is cash flow. In your accounts, in our accounts, we will register the 25% tax. Regarding cash, we will make the advance payment of this 25%, and they will be recouped next year. In the net income, you will have the tax. I mean, those are the accounting rules. I mean, I'm not inventing any. Yep. Okay, thank you. My second question would be on FX. At the time of the CMD, you assumed an FX rate of 1.16, if I'm correct. FX has moved quite favorably for you since then. How would updating your expectation here change the free cash flow estimates you shared at the CMD for 2022? Well, right now, what we are reviewing is all our hedging policy, and I will say that at this moment, there will not be very significant impacts differing from what we say in the CMD. I mean, everything in this year is almost done. I mean, we're now looking at 2023 for hedges. I think that Edward is asking about the free cash flow of the dollar being below 1.06 now instead of 1.11 at the Capital Markets Day. It has a significant impact of this 5% on the revenues, but I think, Edward, we have to wait a bit to understand why the dollar is so strong today. Because we don't know if the dollar is so strong today just because the war, or it is because the no increase of the interest rates in Europe. I think that well, this money is not yet in our books. We have to wait a bit, you know. Okay. Thank you for your time. Thank you. Thank you. The next question comes from Jaime Escribano from Banco Santander. Please go ahead. Hi, good afternoon. Three brief questions from my side. The first one, just to understand the commercial discount that has raised to 37% versus around 36% in Q4. Just to confirm, this is because of the lag effect of the prices increasing or if there is anything else there? This would be my first question. Yeah. No, it's you know that the way we have the contracts with ourselves and all the players in the industry you know that we are invoicing our customers. We have almost 50% of the customers are against the fixed and the most of them we charge the new price 30 days later. Then when the prices are going up, it appears that you have a higher discount than the contract discount. The contract discount is 36%, and we are in 36%, and it's stable. Yeah. Okay. Yeah. No, that's what I was suspecting. The second question would be regarding Pontevedra. You have announced that the Supreme Court has accepted two of the appeals. There is one left. One investor was asking me what's the difference between these appeals and, for example, what happen if they don't accept the third one. Would that be an issue? Or once they have accepted the two first ones, there is no much difference with the just to understand a little bit more how these three appeals work or what do they have to have in common. Yeah. Yeah. Yeah. It is very technical. The Supreme Court said already three weeks ago, four weeks ago, regarding the third appeal, they said that they want to decide quickly. They have no time to have a look to this third appeal. They will decide on the first and second appeal, and this jurisprudence will be valid also for the third appeal. What was good for us because well, it was showing an interest of the Supreme Court to decide quickly. Apparently their opinion was the same. Okay? The pursuant called APDR, they have appeal against this decision of the Supreme Court. The Supreme Court has said, "Well, okay, we are going to decide on this appeal." Well, I don't have the resolution, but normally they will say the same that they have said on the first and on the second appeal, because from a legal point of view, what is discussed on the first and on the second and the third judgments are the same things. I know this is difficult, but when you speak with your lawyers, when could we expect a resolution from the Supreme Court? Is something that could happen this year or is it more for 2023? We think any time between fall and winter. Yeah. Fall and winter. Okay. Yeah. Between September and December. That's what we think. Okay, perfect. A final question regarding the biomass auctions. Any news on that? Any visibility, on when could this take place? Yeah. Sorry to come back to the previous question. If the Supreme Court takes the same time that they took for these other case very similar to us in Murcia, it will be by November. You know? By November. Okay. Going to your last question. We think that the auctions will be just before summer holidays or just after summer holidays. We will have more auctions again next year, as you know, by law. We want to be extremely prudent today with all this inflation of raw materials. It is very difficult to get an offer from an EPC contractor who, one, is not putting 20% higher price in order to guarantee he doesn't have any problem. And secondly, if he may have problems, I don't know, he will respect the prices. Today we are going to be very prudent regarding these auctions this year, and most probably we will wait for the auctions next year. In the meanwhile, we are working on increasing the EBITDA from the energy management and we are very optimistic on that. It's going pretty well. Okay. It is not a big difference on bidding, let's say in September or bidding in March next year. I think that the world will be a bit more quiet next year, and it will be easier. Okay, perfect. Very good. Thank you very much. Thank you. Thank you. Ladies, and gentlemen, there are no further questions in the conference call. I give back the floor to Mr. Ignacio de Colmenares and Mr. Alfredo Avello. Thank you. Well, thank you very much, ladies, and gentlemen, for your interest, and we look forward to meeting you again in July. Thank you. Bye-bye. Thank you.