Ence Energia y Celulosa S.A.

Investor Presentation • Mar 17, 2022

Capital Markets Day

17 March 2022

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.

The information contained in this document has not been verified by independent experts and, therefore, Ence neither implicitly nor explicitly gives any guarantee on the impartiality, precision, completeness or accuracy of the information, opinions and statements expressed herein.

This document does not constitute an offer or invitation to acquire or subscribe to shares, in accordance with the provisions of Royal Legislative Decree 4/2015, of 23 October, approving the consolidated text of the Securities Market Act. Furthermore, this document does not constitute a purchase, sale or swap offer, nor a request for a purchase, sale or swap offer for securities, or a request for any vote or approval in any other jurisdiction.

The use by ENCE ENERGIA Y CELULOSA, S.A. of any MSCI ESG RESEARCH LLC or its affiliates ("MSCI") data, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of ENCE ENERGIA Y CELULOSA, S.A by MSCI. MSCI Services and data are the property of MSCI or its information providers, and are provided "as-is" and without warranty. MSCI names and logos are trademarks or service marks of MSCI.

Today's Presenters

Ignacio de Colmenares

Chairman & CEO Ence Energía y Celulosa

• Ignacio has had a long professional career in the steel, energy and pulp industry. Before joining Ence in December 2010, in 1996 he joined TYCSA as CEO, a producer of steel and aluminium ropes, and optical power ground wire. In 2001, he served Global Steel Wire as CEO after merging with TYCSA.
• Before joining Ence, in 2008 he held the position of CEO of Isofoton, a company that promotes PV plants and produces PV panels and solar cells .
• He was member of the board of CEPI (Pulp and Paper European Association). Currently, he is a member of the steering committee of the Spanish Association of Pulp, Paper and Paperboard producers (ASPAPEL). For five years, he has been member of the investment Committee of Artá Capital, and currently serves as board member or Corporación Financiera Alba, where he also seats at the investment committee of the board. He chairs Ence´s Board of Directors and its Executive Committee
• He has a degree in Law and an MBA by IESE business school.

Alfredo Avello

CFO and Chief Forestry Officer Ence Energía y Celulosa

• Since his incorporation to ENCE in 2013 Alfredo has carried out his activities as Director of Corporate Development and Strategy and was appointed CFO of the Group in November 2014.
• Alfredo is also responsible for the Forestry Business of the Company. Before joining ENCE, he was CFO and Head of Corporate Development at Foresta Capital and Grupo Multitel. Previously he served as Treasurer and Financial Director at Atlantic Copper (Freeport McMoRan Copper & Gold).
• He has a degree in Law from the San Pablo CEU University, a Master in International Business Transactions (LL.M.) from the University of London and a PADE from IESE Business School.

Today's Presenters

Jordi Aguiló

CEO of the Pulp business

• Jordi was CEO of the ENCE Energy Business after successfully developed it and consolidated the operations during 6 years until 2018 when he was appointed CEO of the Pulp Business.
• Before joining ENCE in 2012, he held various management positions in the infrastructure and energy sectors (grupo ACS, COMSA) where he lead the project developing, EPC Construction and manage assets as an IPP. He was also involved in R&D projects in Germany with RWE and in a Spanish Technological Center.
• Since 2017, Jordi is the President of APPA Biomasa which is the leading business association of the sector in Spain and the interlocutor with the different administrations (European and national) on key regulations for the sector. He was also member of the CEPI Energy Committee and actively participates in the steering committee of ASPAPEL.
• He is an industrial Engineer from Universitat Politècnica de Catalunya (UPC), he has also a Bachelor's degree in Physics from Universitat de Barcelona (UB), and holds an Executive MBA from IESE.

Marc Gómez

CEO of the Energy business

• Marc joined Ence group from ABB Spain, a company of which he had been President & CEO since 2018 and in which he had developed his career for the last 26 years. In ABB he held various leadership positions with local, regional or global responsibilities, combining a very strong local and international experience.
• In 2010, he was appointed as local divisional manager of the robotics and motion business of ABB in Spain and Portugal and in 2013 he became regional Mediterranean manager of the same business. From 2015 to 2017, previously to serve as Chairman and first executive director of the company in Spain and Portugal, Marc was global managing director of solar business within ABB Group.
• He is an industrial engineer from the Universitat Politècnica de Catalunya and holds an Executive MBA from EADA and SLDP from IMD.

Strategic 1.Vision

Ignacio Colmenares CEO Ence Energía y Celulosa

Vision

"To be leaders in the sustainable use of natural resources to produce special pulp and renewable energy in competitive biofactories and plants integrated into their environment"

Purpose

"……to contribute to the development of society through the sustainable and responsible use of the natural resources available in our environment, offering pulp to replace polluting products and manageable green energy"

Most sustainable company in our industry According to Sustainalytics

Safe & ecoefficient operations

• ✓ 39% reduction in the Group's Injury frequency rate (vs 2020)
• ✓ 0 accidents with sick leave on the Energy Business
• ✓ Circular economy: <1% total waste sent to landfills
• ✓ 85% plants with ZERO WASTE certification
• ✓ -40% odor minutes in pulp bio-mills (vs 2020)
• ✓ 1,9 Mt biomass valorized

Reduced Production Costs

• ✓ -9% Scope 1 GHG Emissions (vs 2020)
• ✓ 500k tCO2 avoided
• ✓ 92k tCO2 absorbed

Sustainable products

• ✓ Specialty pulp products used as plastic substitutes
• ✓ Renewable energy
• ✓ 1 st Pulp EPD published: Encell TCF and Naturcell
• ✓ Industry leader in Sustainalytics

Leadership and Differentiation

✓ Great Place To Work

engagement

community engagement

✓ 45k beneficiaries of

✓ 19k jobs created

(vs 2020)

female

plants

People & values

✓ 90% permanent contracts

✓ 80% of new hires <30 are

✓ +3% female employees

✓ 95% of suppliers are local

• ✓ 85% of managed land certified
• ✓ 74% of supplied wood certified & 73% of biomass certified
• ✓ 99% wood & biomass suppliers homologated
• ✓ 100% plants SURE System Certified (sustainable biomass)
• ✓ 88% of wood acquisitions from small suppliers

Risk Minimization

Global ESG score: 91/100

Governance

• ✓ Transparency
• ✓ Best practices
• ✓ Virtual AGM with 100% of resolutions approved
• ✓ ~40% female members
• ✓ 60% independent female directors on Audit and Nomination and Remuneration Committees

Ensure Correct Decision Making

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Pulp & Renewable Energy

Two independent and complementary businesses

• Long-term financing without maintenance covenants and ample liquidity
• Reference Net Debt to EBITDA of 2.5x²

100% owned by Ence

Largest biomass operator in Spain with 266 MW of Renewable Energy installed capacity & 140 MW pipeline in biomass

Regulated Renewable Energy business provides stability and high

• Based on Ence`s over 60 years experience agroforestry biomass supply management
• Long-term financing and ample liquidity
• Reference Net Debt to EBITDA of 5.0x 2
• 51% owned by Ence (49% sold to Ancala Partners in Dec. 2020)

Pulp & RE are independently managed, financed and reported

¹2021 recurrent annual EBITDA split ex-hedge impact 2EBITDA calculated at mid cycle prices

Pulp competitive advantages Low cost pulp producer vs. Northern European countries

Pulp competitive advantages

Differentiated products aimed at softwood pulp and plastic substitution

High quality pulp and differentiated products with lower environmental footprint and enhanced technical properties

• Ence Advanced differentiated products offer lower environmental footprint and enhanced technical properties
• Differentiated products, which have higher margins, accounted for 16% of Ence's pulp sales in 2021 (c.150.000 t)

Just in time service (5-7 days delivery vs. 40 days for LatAm deliveries) Lower logistics costs vs LatAm Proximity offers protection against rising transport costs Contributes to reduce CO2 emissions by sourcing locally

Ence has a privileged access to the European market

Our strategy is to enhance Navia pulp bio-mill… Navia Excelente Project

Navia Excelente strategy to foster production of differentiated products, diversify into Fluff pulp and reduce its environmental footprint while improving cash costs with the valorisation of the lignin

… while defending the legality of Pontevedra concession The Supreme Court admits our appeal against the rulings of the National Court

On July 2021, the Spanish National Court has annulled the land concession on which our Pontevedra bio-mill is located

Supreme Court has admitted the appeal by Ence against the annulment of its concession. Final ruling expected by year end 2022

Update Materiality

Pontevedra pulp mill accounts for:

of the Pulp Business average cycle EBITDA

of the Group average cycle EBITDA => smaller/less efficient than Navia

PRUDENT FINANCIAL SCENARIO ADOPTED

• Potential closure already provisioned as of 2021
• Potential related cash outflow of ~€72 Mn

Largest biomass operator in Spain with 60 years experience A regulated business which provides stability and visibility to our P&L

Current Power Plants Portfolio

Biomass power plants 266 MW

Biomass Pipeline 140 MW

at the regulated price bands

Competitive advantages of Biomass Energy

A manageable renewable technology with room to grow in Spain

Abundant resource CO² neutral Fully manageable Rural development Biomass is neutral in carbon emissions and avoids diffuse emissions of forest and agricultural byproducts. It also reduces fire risk in our forests and the problem of biomass uncontrolled burning. Biomass provides a high socioeconomic value due to its environmental advantages and the important contribution to the rural employment generation and the industrialization of the rural economy, avoiding rural exodus. Biomass is a very abundant resource in Spain. We draw upon local agricultural and forest by-products, mitigating their environmental impact and reducing fire risk Biomass is the only renewable technology, together with hydraulics, which is totally manageable. It can operate 24 hours a day, 365 days a year and exceed 8,000 hours a year. Biomass acts as a backup for other renewable energies.

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Platform for growth Spain will double its renewable installed capacity by 2030

Spain expected renewable energy to double by 2030 Ence´s pipeline ¹

Biomass: 140 MW PV: 373 MW

Early-stage PV pipeline: 300 MW

Other growth opportunities

Spanish RES market expected to grow significantly in the upcoming years…

…and Ence has both the expertise and a proven track record to capitalise on that growth

Strong track record creating value

Through greenfield, M&A and selective asset rotation

Over €170 Mn capital gains through asset rotation

European leader operating in two long-term structural growth industries combined with long-term structural competitive advantages

Navia Excelente Strategy adopted to take advantage of current industry megatrends, develop Navia & defend the Pontevedra Concession

3

2

1

Shareholder returns further enhanced by multiple new projects (ROCE >> WACC)

Sustainable Forestry 2.Management

Alfredo Avello CFO & Chief Forestry Officer Ence Energía y Celulosa

We are the largest private forest manager in Spain

And the reference in responsible and sustainable forestry management

▪ Our plantations annually remove 600,000 tons of CO2 from the atmosphere

Our forestry activity

• Maintenance of direct and indirect environmental values (biodiversity, soil, air and water quality, etc.)
• 22% of hectares (c. 14.000 ha) dedicated to protecting and preserving ecosystems
• Reduction of fire impacts

• Prevents deforestation

• Clones and seedlines adapted to specific local soil and climate conditions

• Promotion of state of the art sustainable silviculture practices

• Development of the surrounding areas (job creation and income distribution, promotion of forestry sector, etc.)

• Fixing population in rural areas

Further growth opportunities Eucalyptus nurseries / R&D / Carbon sink

Eucalyptus nurseries Carbon sink

• 3 Eucalyptus nurseries in Spain
• 12 million improved clones and seedlings production per year

R&D

• Pioneers in the clonal reproduction of eucalyptus Globulus
• 3rd generation of improved clones

• Enhancing yields of eucalyptus plantations adapted to new climate change and plague local conditions

• Faster growth and higher density of eucalyptus vs. other wood species

• Our plantations annually remove 600.000 t of CO2 from the atmosphere
• Positive net balance of 92,000 t in 2021

Jordi Aguiló CEO of the Pulp Business

Global market pulp industry 66 Mn t in 2020

Europe and China are structural importers of BHKP due to the lack of local hardwood

55% 20% 7 Mn t¹ 80% of global pulp demand generated by growth segments Driven by urban growth, global trade and plastic substitution Tissue & Hygiene Products Printing & Writing Packaging Specialties CAGR 2010 – 2020: +3.4%² CAGR 2009 – 2019: +2.1%³ CAGR 2009 – 2019: +1.1%³ CAGR 2010–2020: -4.0% (-16% 2020)² P&W secular decline driven by digitalization Tissue demand growth driven by: ✓ Urban population growth and ✓ Increasing living standards in emerging countries ✓ Post-pandemic consumption habits Iberian hardwood pulp best suited for Tissue 36 Mn t¹ 9 Mn t¹ 13 Mn t¹

Packaging growth driven by:

• ✓ Global trade
• ✓ E commerce
• ✓ Plastic products substitution

Specialties growth driven by:

• ✓ Industrial output
• ✓ Household consumption ✓ Plastic products substitution

2.9% annual market pulp demand growth in the last 10 years, equivalent to 1.6 Mn t per year

10%

15%

¹Source: Ence ²Source: PPPC ³ Source: RISI

Focus on Europe and on growing segments with differentiated products

Ence's differentiated products accounted for 16% of pulp sales (c,150.000 t) vs. 9% in 2020 These higher value-added products with higher margins are more environmentally friendly and well suited to replace softwood pulp

Ence's special products have almost x3 during the period 2019-21 (76% CAGR) and expected to be at 400,000 in 2027

Our strategy is to enhance Navia while defending Pontevedra Navia Excelente Project

DIFFERENTIATED PRODUCTS

• Improvement of the eco-efficiency and flexibility of the differentiated pulp production in Navia to substitute softwood and plastic products

Capex (€ Mn)	15	2023
Substitution of BHKP (t)	+250,0001	2022-27
Targeted incremental margin (€/t)	20	2022-27

FLUFF

• To diversify Navia product range into Fluff pulp production for the absorbent hygienic products industry in Europe, substituting imported Fluff

Capex (€ Mn)	30	2022-23
Substitution by Fluff (t)	100,000	2024-27
Targeted incremental margin (€/t)	40	2024-27

DECARBONIZATION

• Promotion of the circular bio-economy through the use of lignin to replace natural gas as fuel in lime kilns and its use in high value-added products. Reduction of up to 50.000 tons of CO2 emissions by 2027

Capex (€ Mn)	60	2022-24
Annual Pulp Production boost (t)	+30,000	2024-25
Navia cash-cost reduction (€/t)	5	2024-25

Renewable Energy 4.Business

Marc Gómez CEO of the Energy Business

Spain will double its renewable installed capacity by 2030 A unique growth opportunity

Spain expected renewable energy to double by 2030¹ MW

Technology (MW)	2020	2025E	2030E
Wind	28,033	40,633	50,333
Solar PV	9,071	21,713	39,181
Hydraulic	14,109	14,359	14,609
Pumping	6,024	6,899	9,524
Solar thermoelectric	2,303	4,803	7,303
Biomass	613	815	1,408
Biogas & Other RES	211	281	321
Total (MW)	60,364	89,503	122,679

Spain renewable electric energy share to rise >20pp by 2030¹ In % of total MW

A regulated business

Estimated annual EBITDA of €50 - 70 Mn at the regulated price bands

Regulated Revenues (€/MWh)

Energy market price + Return on the operations (Ro) + Regulatory Collar

Regulatory Collar Cap Regulatory Collar Floor

1. Annual return on investment of our power plants amounts to €41 Mn

2. Additional EBITDA of €10-30 Mn at the regulated sales price bands

• Additional cash inflow in 2021 from the difference between the electricity market price and its regulated price (regulatory collar)

State of the art, low cost biomass projects and an example of fair energy transition

• 20-year regulatory life
• 85% Pay as bid (€/MWh)
• 15% Energy market price

Sale agreement for 373 MW Solar PV asset portfolio

• €62 Mn sale price for 5 PV assets with combined capacity of 373 MW
• Estimated capital gain of over €50 Mn
• To be closed between 2022-24 upon RTB status being reached

Projects Timeline

Ence Energía has additional PV projects with a combined capacity of 300 MW at an early-stage of development

Energy management

• Biomass renewable energy is dispatchable by definition, what is a great support for the system
• Ence is already working in Secondary and Tertiary Regulation in all the Biomass plants

Energy storage

• Massive deployment of renewable energy into the Spanish mix will require storage solutions (2.5 GW by 2030 as per PNIEC) to stabilize the grid and store renewable energy produced at low pool (or zero) prices.
• Ence is analysing several alternatives (batteries, molten salts and gas/compressed air) to be deployed at our sites if economics are viable.

Energy management should lead into a €5 Mn EBITDA improvement in 2022 - 2025

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Financial 5.Outlook

Alfredo Avello CFO & Chief Forestry Officer Ence Energía y Celulosa

Strong financial position Prudent leverage policy per business

72

Gross debt Cash Net debt Lease contracts

1

121

101

29 27 34

2022 2023 2024 2025 2026<

16 -16 325 Gross debt Cash Net debt Lease contracts Pulp business net debt as of 31 Dec. 2021 (€ Mn) -20 305 126 6 13 ^{28 44 14 6} 8 9 9 4 27 3 1 2 6 2022 2023 2024 2025 2026< Pulp business debt maturity schedule (€ Mn) 16 Renewables business net debt as of 31 Dec. 2021 (€ Mn) Renewables business debt maturity schedule (€ Mn) 193 €20 Mn RCF – Fully available €208 Mn corporate financing €126 Mn of convertible bonds €105 Mn of bilateral loans €16 Mn IFRS16 €58 Mn of public sector financing €130 Mn RCF – Fully undrawn 150 38 54 47 For reference ND/EBITDA 2.5x¹ For reference ND/EBITDA 5.0x¹ Average cost of 1.5% as of Dec.21 Average cost of 4.2% as of Dec.21

€1 Mn IFRS 16

1

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Average net pulp price 2011-2021 of US\$605/t and expected to continue the trend for the period 2022-25

Financial projections based on last industry specialists' consensus which are expecting average net prices for the next years

We have prudently assumed in our projections a stable pool price of 48 €/MWh as from 2Q22

Implications for the Energy business

• 41 MW biomass power plant in Huelva 16 MW biomass power plant in Jaén
• 16 MW biomass power plant in Ciudad Real
• 14 MW biomass power plant in Cordoba
• 13 MW gas cogen plant in Cordoba
  • 50 MW biomass power plant in Huelva
• 20 MW biomass power plant in Mérida
• 46 MW biomass power plant in Huelva
• 50 MW biomass power plant in Ciudad Real

A pool price in excess of 48 €/MWh will imply additional cash inflows vs. our projections for Ciudad Real 50 MW and Huelva 46 MW plants as well as anticipated cash inflows for the rest of the plants

• 40 MW lignin power plant in Navia
• 35 MW lignin power plant in Pontevedra

37 MW biomass power plant in Navia

Our pulp bio-mills sell all their renewable energy at the market pool price plus a feed-in tariff of 28 €/MWh. At the same time, they purchase back approximately the same amount of energy at the same price (natural hedge). An average pool price in excess or below the assumption of 48 €/MWh wouldn't affect their margin or cash flow contribution.

A pool price in excess of 48 €/MWh will imply anticipated cash inflows vs. our projections

Our pulp business has a natural physical hedge in energy

Our core strategy is to implement Navia Excelente and maintain Pontevedra fully operational

Main PULP KPIs	2022E	2023E	2024E	2025E	2026E	2027E	Main ENERGY KPIs	2022E	2023E	2024E	2025E	2026E	2027E
BHKP price (\$/t)	1,107	926	930	936	945	945	Price (€/MWh)	100			483
Exchange rate (\$/€)			1.16				Energy sales (GWh)	1,600	1,600	1,600	1,600	1,825	2,200
Discount (%)			36%

¹FCF before new projects capex, financing and dividends. It does not include any potential regulatory collar cash-inflow in 2022 2 Includes Navia Excelente project and two Biomass plants

³48 €/MWh as from 2Q22 - within the regulatory collar bands

Even if we are obliged to close Pontevedra, we would continue to generate substantial free cash flow

Main PULP KPIs	2022E	2023E	2024E	2025E	2026E	2027E	Main ENERGY KPIs	2022E	2023E	2024E	2025E	2026E	2027E
BHKP price (\$/t)	1,107	926	930	936	945	945	Price (€/MWh)	100			483
Exchange rate (\$/€)				1.16			Energy sales (GWh)	1,600	1,600	1,600	1,600	1,825	2,200
Discount (%)		36%			35%

¹FCF before new projects capex, financing and dividends. It does not include any potential regulatory collar cash-inflow in 2022 2 Includes Navia Excelente project and two Biomass plants

³48 €/MWh as from 2Q22 - within the regulatory collar bands

Moreover, if we are obliged to close Pontevedra, we will further expand Navia production

Navia 100

Build a new line at Navia mill with a capacity of 100,000 t of Hardwood Paper Grade Pulp (BHKP) using equipment from the potential dismantling of Pontevedra mill

Capacity increase (t)	+100,000	2026-27
Cash Cost reduction (€/t)	10	2026-27
Capex (€ Mn)	100	2024-25

Navia 340

Build a new swing line at Navia mill with a capacity of 340,000 t of Hardwood Paper Grade Pulp (BHKP) or alternatively up to 200,000 t of Dissolving Pulp for viscose fiber products

Capacity increase (t)	+340,000	2026-27
Cash Cost reduction (€/t)	15	2026-27
Capex (€ Mn)	450	2024-26

Annual FCF¹ contribution from Pontevedra would be more than offset by Navia Excelente and any of these two projects

Closing 6.Remarks

Ignacio Colmenares CEO Ence Energía y Celulosa

Russia only represents 3%¹ of the market pulp industry Over 60% of their pulp exports to China

Russia's hardwood exports breakdown

Wood industry

Market pulp industry

	Annual Imports	Annual Exports		Annual Imports	Annual Exports		Annual Exports
						'000 t	2021
'000 t	2021	2021	'000 t	2021	2021	Softwood	8,115
Softwood Pulp	208	1,217	Packaging	253	2,225	Hardwood	8,195
Hardwood Pulp	56	273	Newsprint	3	922	SW lumber	29,000
Other	14	665	P&W	833	455	Pellets	2,425
Total	279	2,156	Tissue Total	8 1,097	61 3,663	Total	47,735
imports breakdown 6% 10% Brazil 279 Mn t2	Others 9% Europe	exports breakdown 18% Others 2,156 Mn t2	imports breakdown Others 28% 1,097 Mn t2 China 10%	Others	exports breakdown 57% 25% Asia 3,663 Mn t2	exports breakdown Others 22% 8,115 Mn t	38% Others 8,195 Mn t
49% Europe	35% USA	73% Asia		62% Europe	10% Europe 8% Turkey	24% Finland	54% China

Paper industry

Source: Hawkins Wright Pulpwatch 28th volume (4 March 2022) 1 In 2020, Pulp global demand amounted to 66 Mn t

²Breakdown percentages are averages of the 2012-2021 period

62% Finland

Ence has no direct exposure to the Russian-Ukrainian conflict

Our pulp bio-mills & renewable energy plants are located in Spain Wood & biomass are locally sourced

Chemicals locally sourced or imported from Western Europe

Our pulp bio-mills are energy self-sufficient. They cogenerate all the renewable energy required for the pulp production process

No gas or fuel dependence from Russia

Our commercial activities are mainly located in the Atlantic region Eastern Europe served through the Atlantic coast

No direct exposure to the Russian-Ukrainian conflict Furthermore, Ence faces this situation with high liquidity and a strong financial position

New dividend policy

Based on free cash flow and subject to prudent leverage ratios per business

x3 Annual payments

• 1. First interim dividend agreed at the end of the first semester
• 1. Second interim dividend agreed at the end of the third quarter
• 1. A final dividend approved by the AGM

Amount based on cash available for distribution

Ensuring a reference leverage of:

Net Debt / EBITDA for the Pulp business, at average cycle prices 2.5x

Net Debt / EBITDA for the Energy business, at average cycle prices 5.0x

And considering capex plans and commitments

Alternative Performance Measures (APMs) Pg.1

Ence presents its results in accordance with generally accepted accounting principles, specifically IFRS. In addition, its quarterly earnings report provides certain other complementary metrics that are not defined or specified in IFRS and are used by management to track the company's performance. The alternative performance measures (APMs) used in this presentation are defined, reconciled and explained in the corresponding quarterly earnings report publicly available through the investor section of our web page www.ence.es.

CASH COST

The production cost per tonne of pulp produced, or cash cost, is the key measure used by management to measure its efficiency as a pulp maker.

Cash cost includes all of the expenses incurred to produce pulp: timber, conversion costs, corporate overhead, sales and marketing expenses and logistics costs. It excludes fixedasset depreciation and forest depletion charges, impairment charges and gains/losses on non-current assets, finance costs/income, income tax and certain operating expenses which management deems to be non-recurring, such as ad-hoc consultancy projects, Ence's long-term remuneration plan, the termination benefits agreed with staff or certain social expenses.

As a result, the difference between the average sales price and the cash cost applied to the total sales volume in tonnes yields a figure that is a very close proxy for the EBITDA generated by the Pulp business, before hedges, which are also not included in the cash cost.

EBITDA

EBITDA is a measure of operating profit before depreciation, amortisation and forestry depletion charges, non-current asset impairment charges, gains or losses on non-current assets and specific non-ordinary income and expenses unrelated to the ordinary operating activities of the company, which alter their comparability in different periods.

EBITDA is a measure used by Ence's management to compare the ordinary results of the company over time. It provides an initial proxy for the cash generated by the company's ordinary operating activities, before interest and tax payments, and is a measure that is widely used in the capital markets to compare the earnings performances of different companies.

NORMALISED FREE CASH FLOW

Ence reports normalised free cash flow within the cash flow metrics for each of its two business units in its quarterly earnings report. Normalised FCF is the sum of EBITDA, the change in working capital, maintenance capital expenditure, net interest payments and income tax payments.

Alternative Performance Measures (APMs) Pg.2

Normalised free cash flow provides a proxy for the cash generated by the company's operating activities before collection of proceeds from asset sales; this cash represents the amount available for investments other than maintenance capex, for shareholder remuneration and for debt repayment.

MAINTENANCE, EFFICIENCY & GROWTH AND SUSTAINABILITY CAPEX

Ence provides the breakdown of its capital expenditure and related cash outflows for each of its business units in its quarterly earnings report, distinguishing between maintenance, efficiency & growth and sustainability capex.

Maintenance capex are recurring investments designed to maintain the capacity and productivity of the company's assets. Efficiency & growth capex, meanwhile, are investments designed to increase these assets' capacity and productivity. Lastly, sustainability capex covers investments made to enhance quality standards, occupational health and safety, to improve the environment and to prevent contamination.

Ence's 2019-2023 Business Plan includes a schedule of the amounts it expects to invest annually in efficiency & growth and sustainability capex in order to attain the strategic targets set. The disclosure of capex cash flows broken down by area of investment facilitates oversight of the execution of the published 2016-2020 Business Plan.

FREE CASH FLOW

Ence reports free cash flow as the sum of its net cash flows from operating activities and its net cash flows from the investing activities of its quarterly earnings report.

Free cash flow provides information about the cash generated by the Group's operating activities that is left over after its investing activities for the remuneration of shareholders and repayment of debt.

NET DEBT

The borrowings recognised on the balance sheet, as detailed in its quarterly earnings report, include bonds and other marketable securities, bank borrowings and other financial liabilities. They do not however include the measurement of financial derivatives as well as loans with Group companies and associates.

Net debt is calculated as the difference between current and non-current borrowings on the liability side of the balance sheet together with the sum of cash and cash equivalents, cash for financial debt coverage and short-term financial investments on the asset side.

Net debt provides a proxy for the company's indebtedness and is a metric that is widely used in the capital markets to compare the financial position of different companies.

Delivering value Delivering commitments

Investor Relations contact details:

Email: ir@ence.es Phone: (+34) 91 337 85 53

Global ESG score: 91/100