ENCE Energía y Celulosa, S.A. (ENC.MC) | Investment Case

1. Company Snapshot

1.a. Company Description

ENCE Energía y Celulosa, S.A., together with its subsidiaries, produces and sells eucalyptus pulp and renewable energy in Spain, Germany, Poland, Italy, France, the United Kingdom, Turkey, Sweden, Romania, Netherlands, Austria, and internationally.It offers bleached eucalyptus kraft pulp; and forest land management and forestry services, as well as produces renewable energy using forestry and agricultural biomass sources.The company also purchases and sells timber.

It manages 61,631 hectares of forest.The company was formerly known as Grupo Empresarial ENCE, S.A. and changed its name to ENCE Energía y Celulosa, S.A. in April 2012.ENCE Energía y Celulosa, S.A. was founded in 1957 and is headquartered in Madrid, Spain.

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1.b. Last Insights on ENC

ENCE Energía y Celulosa, S.A.'s recent performance was driven by strong growth in pulp sales, leading to significant EBITDA growth in Q4 2024. The company's strategic investments in renewable energy also contributed to its positive outlook. Despite facing temporary cost challenges, ENCE's efforts to diversify its energy mix and reduce carbon footprint are expected to yield long-term benefits. The company's focus on sustainability and growth initiatives should support its future performance.

1.c. Company Highlights

Last Price	2.35
Change Percentage	0.00%
Open	2.37
Previous Close	2.35
Market Cap ( Millions)	571
Volume	223932
Year High	3.58
Year Low	2.22
M A 50	2.58
M A 200	2.85

FCF Yield	-1.11%
Dividend Yield	0.00%
ROE	-0.32%
Debt / Equity	110.03%
Net Debt / EBIDTA	248.71%
Price To Book	1.08
Price Earnings Ratio	-314.59
Price To FCF	-90.18
Price To sales	0.71
EV / EBITDA	6.99

2. Transcript Summary

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3. NewsRoom

ENCE Energia y Celulosa SA (FRA:ENCA) Q3 2025 Earnings Call Highlights: Navigating Challenges ...

Oct -30

Source:

ENCE Energia y Celulosa SA (FRA:ENCA) Q1 2025 Earnings Call Highlights: Strong Market Recovery ...

May -01

Source:

ENCE Energia y Celulosa SA (FRA:ENCA) Q4 2024 Earnings Call Highlights: Strong Growth in Pulp ...

Mar -01

Source:

ENCE Energia y Celulosa SA (STU:ENCA) Q3 2024 Earnings Call Highlights: Strong Growth in Pulp ...

Oct -31

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.75%)

6. Segments

Pulp

Expected Growth: 5%

ENCE Energía y Celulosa's pulp segment growth is driven by increasing demand for sustainable packaging, rising eucalyptus wood availability, and strategic capacity expansions. Additionally, growing tissue and hygiene product demand, coupled with the company's focus on cost reduction and operational efficiency, contribute to the 5% growth rate.

Energy Business & Segment

Expected Growth: 4%

ENCE Energía y Celulosa's 4% growth in Energy Business & Segment is driven by increasing demand for renewable energy, favorable regulatory frameworks, and strategic investments in wind and hydroelectric power generation. Additionally, the company's focus on energy efficiency and cost reduction initiatives has improved profitability, while its diversified energy mix has mitigated risks.

Forest Assets & Other

Expected Growth: 3%

ENCE Energía y Celulosa's Forest Assets & Other segment growth is driven by increasing demand for sustainable forestry products, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on certified sustainable forestry practices and commitment to reducing carbon footprint contribute to its growth. Furthermore, the rising trend of eco-friendly products and government incentives for sustainable forestry also support the segment's 3% growth.

7. Detailed Products

Biomass

ENCE Energía y Celulosa, S.A. produces biomass from forestry waste, which is used as a renewable energy source for heat and power generation.

Pulp

ENCE Energía y Celulosa, S.A. manufactures pulp from wood chips, used in the production of paper, cardboard, and tissue products.

Paper

ENCE Energía y Celulosa, S.A. produces a range of paper products, including packaging paper, printing paper, and specialty papers.

Energy

ENCE Energía y Celulosa, S.A. generates electricity from biomass and other renewable sources, providing clean energy to the grid.

Biofuels

ENCE Energía y Celulosa, S.A. produces biofuels from biomass, providing a sustainable alternative to fossil fuels for transportation and industrial applications.

8. ENCE Energía y Celulosa, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

ENCE Energía y Celulosa, S.A. operates in the energy and cellulose industry, where substitutes are limited, but not impossible. The company's products have some level of differentiation, which reduces the threat of substitutes.

Bargaining Power Of Customers

The bargaining power of customers is low due to the specialized nature of ENCE Energía y Celulosa, S.A.'s products and the lack of alternative suppliers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate, as ENCE Energía y Celulosa, S.A. relies on a few key suppliers for raw materials, but has some flexibility to negotiate prices.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the energy and cellulose industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high in the energy and cellulose industry, with several established players competing for market share and limited opportunities for differentiation.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	52.51%
Debt Cost	9.47%
Equity Weight	47.49%
Equity Cost	9.47%
WACC	9.47%
Leverage	110.58%

11. Quality Control: ENCE Energía y Celulosa, S.A. passed 1 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Altri

A-Score: 6.0/10

Value: 5.6

Growth: 4.4

Quality: 5.4

Yield: 8.8

Momentum: 4.0

Volatility: 8.0

1-Year Total Return ->

Corticeira Amorim

A-Score: 5.7/10

Value: 6.4

Growth: 4.0

Quality: 6.1

Yield: 6.9

Momentum: 1.0

Volatility: 9.7

1-Year Total Return ->

ENCE Energía y Celulosa

A-Score: 5.5/10

Value: 8.1

Growth: 4.9

Quality: 2.3

Yield: 5.6

Momentum: 4.0

Volatility: 8.0

1-Year Total Return ->

Surteco

A-Score: 4.4/10

Value: 9.3

Growth: 3.1

Quality: 2.5

Yield: 5.0

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

STEICO

A-Score: 3.8/10

Value: 7.1

Growth: 4.4

Quality: 5.2

Yield: 0.6

Momentum: 4.0

Volatility: 1.3

1-Year Total Return ->

Norske Skog

A-Score: 2.5/10

Value: 9.6

Growth: 1.3

Quality: 2.7

Yield: 0.0

Momentum: 0.0

Volatility: 1.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

70.25%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.47%

ENCE Energía y Celulosa, S.A. - ES0130625512

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ENC

1.c. Company Highlights

Lower Growth

Lower Quality

Stable Momentum

Earnings Miss

Revenues Miss

Revenues Beats

Average Growth

Average Yield

Average Quality

Higher Yield

Fairly Valued

Medium Volatility

Less Volatile

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.75%)

6. Segments

Pulp

Expected Growth: 5%

Energy Business & Segment

Expected Growth: 4%

Forest Assets & Other

Expected Growth: 3%

7. Detailed Products

Biomass

Pulp

Paper

Energy

Biofuels

8. ENCE Energía y Celulosa, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: ENCE Energía y Celulosa, S.A. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.35$

Current Price

2.35$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA