Industrial Production: Market Outlook2.17 MB - Abengoa
Innovative Technology Solutions for Sustainability
ABENGOA Industrial Production – Market Outlook
Javier Salgado Javier Molina
Analyst & Investor Day May 2012
Agenda
1
Bioenergy Market Outlook & Growth Strategy
2
Recycling Market Outlook & Growth Strategy
2
Market outlook: Brazil Long – term prospects remain solid Structural problems persist, Brazil short of ethanol, India & Thai sugar crops to partially balance shortage Short-term
Longer-term
2%+ world sugar demand
3%+ growth new car sales
Switch to E25 expected
Supply
470-510 Mt 12/13
Structural problems still not solved
No new greenfields expected
Tight balance 12/13 expected
Abengoa insight
Cogen facilities online
San Luiz expansion start up
Aggressive cane contracting plan towards 8MT
17
5 2011
Drivers
Ethanol demand (BGY)
Demand
2020e
Energy security
3
Market outlook: EU Stable outlook long term Ethanol market will remain short, market to be balanced through imports mainly from US
Demand
Low gasoline consumption, -8% y/y
Slow penetration of E10
Ne, Sw, Fi, Dn accelerating targets,
UK: aggressive ramp-up in 2013
Supply
E90 imports flooding market in H1, already banned:
Longer-term
Ethanol demand (BGY)
Short-term
positive for H2
2020e
Supply from EU source freeze
Abengoa insight
2 2011
Rotterdam facility: operations integrated in AB culture, full speed
CO2 negotiations
Buy/sells activity
Drivers
4
Legislation: RED (10% renewable energy in transportation by 2020)
Sustainability 4
Market outlook: US Short – term oversupply Better H2 economics expected, similar to 2011; Long term outlook is positive Short-term
Longer-term
Low gasoline consumption -5% y/y
High exports expected at 2011 levels Import duty & VEETC discontinued
Supply
Seasonal overcapacity
E15 roll-out to comply with RFS: Introduction to catch up 2013-2014
Ethanol demand (BGY)
Demand
36 14 2011
E11 & E12 penetration to substitute E10
2022e
Penetration to ramp up starting 2012, Midwest states likely to start
Abengoa insight
Buy/sells activity
Export opportunities
Drivers
2015 Market short 2.5 bgal if E10 only
Legislation: RFS (36 BGY in 2022)
Energy security 5
2012 US Ethanol S&D Q1
Q2e
Q3e
Q4e
Ethanol Supply MGY
14,583
14,583
14,583
14,583
97%
93%
94%
95%
3,526
3,360
3,433
3,482
14,185
13,513
13,659
13,854
Annualized Motor Fuel Demand
130,747
133,100
136,182
132,190
Ethanol motor fuel inclusion rate
9.7%
9.9%
9.9%
9.9%
Annualized installed capacity % installed capacity operating Ethanol production Annualized Ethanol production
Ethanol Demand
-Gasoline blending
3,164
3,240
3,389
3,299
-Industrial use
39
39
39
39
-Exports
219
168
171
267
Total Ethanol Demand
3,422
3,447
3,599
3,604
Annualized Ethanol Demand
13,772
13,868
14,319
14,339
24
22
20
70-75
75-80
Days Inventory
Crush Spread (c/gal)
25
45-50
50-55
Higher gasoline demand and ethanol gasoline blending will result in a demand-pulled market in H2 driving up crush margins 6
Big players are in…
7
…reshaping market structure Big players aim to control both technology and biomass access >1,000 M$
> 100 M$
>5,000 M$
>1,500 M$
>6,000 M$
>600 M$ >100 M$
8
Showcasing our model Hugoton biomass to ethanol commercial plant Milestones
Start-up forecasted end-2013 Construction started July 2011
Air Permit obtained DOE federal loan guarantee awarded (134 Musd) DOE Grant awarded (97 Musd)
9
9
Production Cost Our 2G biomass to ethanol technology will be competitive with ~70 $/bbl crude oil 2G Ethanol production cost ($/gal) Corn Ethanol 55
60
2010
2011
70
72
75
2012e
2013e
2014e
Cellulosic Ethanol
4.15
Yield (gal/dt biomass)
3.10 2.45
2.20
2.20 1.85
185 95
2010
2.00
2011
0.95
60
40
30
2012
2012e
2013e
2014e
(6.5 $/bu)
Enzyme cost (c/gal Ethanol)
2010
Corn Ethanol production Cost
2011
0.60
0.40
0.30
2012e
2013e
2014e
Cellulosic Ethanol production Cost
Share of Enzymes in total production cost
10
Agenda
1
Bioenergy Market Outlook & Growth Strategy
2
Recycling Market Outlook & Growth Strategy
11
11
Steel in the World: 2011 Abengoa enjoys a leading position (~45% market share) in Europe, the main steel dust market worldwide Crude Steel Production by region 2011
Mini-Mill Steel Production (EAF) by country – Top 20
% Total = 1,414 Million tons
Total 2011= 410.9 Million tons
Europe (Ex-EU) Latam 3%
CIS
NAFTA
EU-27 EU-27
Other
2% 3%
7%
China
8% 46%
EU-27
12%
19%
Asia (Ex-China)
Source: World Steel Association
USA Turkey South Korea Japan Russia Italy Germany Spain Iran Taiwan Saudi Arabia Brazil France Egypt Canada Poland Malaysia Indonesia Thailand Venezuela Source: CRU
68.9 50.8 24.0 23.7 20.1 18.3 17.4 12.1 11.3 10.4 9.3 7.2 6.0 6.0 5.9 5.5 4.4 4.2 3.7 3.5 3.3
Abengoa operates 7 recycling plants in Europe with a total capacity of more than 700 Kt of steel dust
12
EAF Steel dynamics in Europe Steel production in Europe expected to grow slowly to pre-crisis levels European Steel production follows real GDP growth Forecast 250
9% (EU real GDP growth)
(million tons)
Crude Steel
0%
Real GDP Growth
100
-9%
Mini-mill technology (EAF) gains share vs. integrated furnace (BOF) Forecast
(million tons)
150
BOF 35%
8%
EAF
0 xx%
Gap between EAF and BOF
Source: Zinc Market Outlook, Quarterly – October 2011; CRU Group International Ltd.; Eurostat; Company data
13
EAF Steel dynamics in EU-27 At current levels of mini-mills production in EU-27, Abengoa steel recycling generates strong stable cash flows, given high utilization rates Utilization of Abengoa’s plants follows mini-mills (EAF) production 100 (million tons)
Utilization rate 87%
93%
76
92%
97%*
97%
100% (ABG’s Utilization rate)
80%
74
EAF steel production
69**
69
65 55
* Q1 2012 real ** FY Estimate
50%
50 2007
2008
2009
2010
2011
2012e
Stable growth expected in steel production Forecast
(million tons)
250
0
69
Total BOF EAF
1997 1999 2001 2003 2005 2007 2009 2011 2013e 2015e
73
75
77
19.6
20.3
21.0
Rest EU-27
18.7
UK France Spain
3.5 6.2
3.9 6.6
4.0 6.9
4.2 7.1
11.0
11.6
12.0
12.4
Italy
17.3
17.9
18.0
18.5
Germany
12.5
13.0
13.2
13.4
2012e
2013e
2014e
2015e
14 Source: Zinc Market Outlook, Quarterly – October 2011; CRU Group International Ltd.; Eurostat; Company data
Vehicle production in the World Abengoa Aluminum recycling business depends on EU automobile industry, the 2nd largest market worldwide Vehicle production by region in 2011 (% Total = 80.3 million units) CEI Europe (Ex-UE) 3%1%
EU-27
22%
1% 5%
Others Latam
NAFTA
17%
China
23%
27%
Asia (Ex-China)
27%
-17%
74.2
(million units)
4.2 3.8 15.8
77.6
11.6
3.4 3.2
13.9
17.6
14.1
13.5
16.5
17.2
18.3
18.4
14.9
11.6
21,1
21.0
2007
2008
Asia China) Asia (Ex (ex-China)
4.6 4.2
63.1 11.6
17.8
4.1 4.1
71.8 4.4 3.3
China China
79.9
13.8 16.3 2009
UE-27 UE-27
NAFTA NAFTA
20.6
22.1
2010
2011
Latam Ibereoamérica
Vehicle production by region – Top 20
Vehicle production by region 2011 – Top 20 (Total = 80.3 million units) (Total 2011= 80.3 million units)
China EU-27 USA Japan Germany South Korea India Brazil Mexico Spain France Canada Russia Iran Thailandia UK Czech Rep Turkey Indonesia Poland Argentina
CEI; Other EU-27) Otros (CEI, (ex Europa Ex UE)
Source: Organisation Internationale Constructeurs d’Automobiles, OICA; J.D. Power Automotive Forecasting
18.4 17.5 8.7 8.4 6.3 4.7 3.9 3.4 2.7
2.4 2.3 2.1 2.0 1.6 1.5 1.5 1.2 1.2 0.8 0.8 0.8
15
Vehicle production in EU-27 (I) European vehicle production industry shows slow recovering from 2009 lowest figures
19.9
-25%
15%
17.6 14.9
4.4 1.8 1.3
3.8 1.1 0.8 2.2
2.5
3.0
4.3
4.1
1.6 1.0
2.9
17.2
16.5
5.0
2.5
2.0
1.4 0.8
1.4 0.8 2.4
2.4
2.2
2.3
5.9
5.6
4.9
5.6
6.0
2007
2008
2009
2010
2011
Germany
France
Spain
Italy
United Kingdom
Rest EU-27
Signs of recovery although still far from pre-crisis 16 Source: Organisation Internationale Constructeurs d’Automobiles, OICA; J.D. Power Automotive Forecasting; Company data
Vehicle production in EU-27 (II) At current levels of vehicle production in Europe, Abengoa generates stable cash flows due to high utilization rates Plants’ utilization follows vehicle production trend 17.6
19.0
17.2
16.5
14.9 95%
91%
85%
75% 64%
2007
2008
2009
2010
Average Utilisation
2011
Vehicles EU-27
Slow recovery expected to reach pre-crisis levels Forecast
CAGR 4%
19.9 17.6 14.9
2007
2008
2009
16.5
17.2
2010
2011
15.8
16.1
2012e
2013e
17.3
2014e
18.2
18.9
2015e
2016e
Source: Organisation Internationale Constructeurs d’Automobiles, OICA; J.D. Power Automotive Forecasting; Company data
19.8
20.4
2017e
2018e
17
Our Vision
Abengoa aims at becoming a global leader in industrial waste recycling niches Today - top european player in steel dust and salt slags
Tomorrow – global leader in industrial waste recycling niches
Presence in 6 European
Presence in 10-11 countries of the
13 recycling plants ~900 kt treated annually
19-20 recycling plants ~1,600 kt treated annually
countries
world
Additional growth through recycling of other niche metal residues
18
Innovative Technology Solutions for Sustainability
ABENGOA
Thank you! Analyst & Investor Day May 2012
ABENGOA Industrial Production – Market Outlook
Javier Salgado Javier Molina
Analyst & Investor Day May 2012
Agenda
1
Bioenergy Market Outlook & Growth Strategy
2
Recycling Market Outlook & Growth Strategy
2
Market outlook: Brazil Long – term prospects remain solid Structural problems persist, Brazil short of ethanol, India & Thai sugar crops to partially balance shortage Short-term
Longer-term
2%+ world sugar demand
3%+ growth new car sales
Switch to E25 expected
Supply
470-510 Mt 12/13
Structural problems still not solved
No new greenfields expected
Tight balance 12/13 expected
Abengoa insight
Cogen facilities online
San Luiz expansion start up
Aggressive cane contracting plan towards 8MT
17
5 2011
Drivers
Ethanol demand (BGY)
Demand
2020e
Energy security
3
Market outlook: EU Stable outlook long term Ethanol market will remain short, market to be balanced through imports mainly from US
Demand
Low gasoline consumption, -8% y/y
Slow penetration of E10
Ne, Sw, Fi, Dn accelerating targets,
UK: aggressive ramp-up in 2013
Supply
E90 imports flooding market in H1, already banned:
Longer-term
Ethanol demand (BGY)
Short-term
positive for H2
2020e
Supply from EU source freeze
Abengoa insight
2 2011
Rotterdam facility: operations integrated in AB culture, full speed
CO2 negotiations
Buy/sells activity
Drivers
4
Legislation: RED (10% renewable energy in transportation by 2020)
Sustainability 4
Market outlook: US Short – term oversupply Better H2 economics expected, similar to 2011; Long term outlook is positive Short-term
Longer-term
Low gasoline consumption -5% y/y
High exports expected at 2011 levels Import duty & VEETC discontinued
Supply
Seasonal overcapacity
E15 roll-out to comply with RFS: Introduction to catch up 2013-2014
Ethanol demand (BGY)
Demand
36 14 2011
E11 & E12 penetration to substitute E10
2022e
Penetration to ramp up starting 2012, Midwest states likely to start
Abengoa insight
Buy/sells activity
Export opportunities
Drivers
2015 Market short 2.5 bgal if E10 only
Legislation: RFS (36 BGY in 2022)
Energy security 5
2012 US Ethanol S&D Q1
Q2e
Q3e
Q4e
Ethanol Supply MGY
14,583
14,583
14,583
14,583
97%
93%
94%
95%
3,526
3,360
3,433
3,482
14,185
13,513
13,659
13,854
Annualized Motor Fuel Demand
130,747
133,100
136,182
132,190
Ethanol motor fuel inclusion rate
9.7%
9.9%
9.9%
9.9%
Annualized installed capacity % installed capacity operating Ethanol production Annualized Ethanol production
Ethanol Demand
-Gasoline blending
3,164
3,240
3,389
3,299
-Industrial use
39
39
39
39
-Exports
219
168
171
267
Total Ethanol Demand
3,422
3,447
3,599
3,604
Annualized Ethanol Demand
13,772
13,868
14,319
14,339
24
22
20
70-75
75-80
Days Inventory
Crush Spread (c/gal)
25
45-50
50-55
Higher gasoline demand and ethanol gasoline blending will result in a demand-pulled market in H2 driving up crush margins 6
Big players are in…
7
…reshaping market structure Big players aim to control both technology and biomass access >1,000 M$
> 100 M$
>5,000 M$
>1,500 M$
>6,000 M$
>600 M$ >100 M$
8
Showcasing our model Hugoton biomass to ethanol commercial plant Milestones
Start-up forecasted end-2013 Construction started July 2011
Air Permit obtained DOE federal loan guarantee awarded (134 Musd) DOE Grant awarded (97 Musd)
9
9
Production Cost Our 2G biomass to ethanol technology will be competitive with ~70 $/bbl crude oil 2G Ethanol production cost ($/gal) Corn Ethanol 55
60
2010
2011
70
72
75
2012e
2013e
2014e
Cellulosic Ethanol
4.15
Yield (gal/dt biomass)
3.10 2.45
2.20
2.20 1.85
185 95
2010
2.00
2011
0.95
60
40
30
2012
2012e
2013e
2014e
(6.5 $/bu)
Enzyme cost (c/gal Ethanol)
2010
Corn Ethanol production Cost
2011
0.60
0.40
0.30
2012e
2013e
2014e
Cellulosic Ethanol production Cost
Share of Enzymes in total production cost
10
Agenda
1
Bioenergy Market Outlook & Growth Strategy
2
Recycling Market Outlook & Growth Strategy
11
11
Steel in the World: 2011 Abengoa enjoys a leading position (~45% market share) in Europe, the main steel dust market worldwide Crude Steel Production by region 2011
Mini-Mill Steel Production (EAF) by country – Top 20
% Total = 1,414 Million tons
Total 2011= 410.9 Million tons
Europe (Ex-EU) Latam 3%
CIS
NAFTA
EU-27 EU-27
Other
2% 3%
7%
China
8% 46%
EU-27
12%
19%
Asia (Ex-China)
Source: World Steel Association
USA Turkey South Korea Japan Russia Italy Germany Spain Iran Taiwan Saudi Arabia Brazil France Egypt Canada Poland Malaysia Indonesia Thailand Venezuela Source: CRU
68.9 50.8 24.0 23.7 20.1 18.3 17.4 12.1 11.3 10.4 9.3 7.2 6.0 6.0 5.9 5.5 4.4 4.2 3.7 3.5 3.3
Abengoa operates 7 recycling plants in Europe with a total capacity of more than 700 Kt of steel dust
12
EAF Steel dynamics in Europe Steel production in Europe expected to grow slowly to pre-crisis levels European Steel production follows real GDP growth Forecast 250
9% (EU real GDP growth)
(million tons)
Crude Steel
0%
Real GDP Growth
100
-9%
Mini-mill technology (EAF) gains share vs. integrated furnace (BOF) Forecast
(million tons)
150
BOF 35%
8%
EAF
0 xx%
Gap between EAF and BOF
Source: Zinc Market Outlook, Quarterly – October 2011; CRU Group International Ltd.; Eurostat; Company data
13
EAF Steel dynamics in EU-27 At current levels of mini-mills production in EU-27, Abengoa steel recycling generates strong stable cash flows, given high utilization rates Utilization of Abengoa’s plants follows mini-mills (EAF) production 100 (million tons)
Utilization rate 87%
93%
76
92%
97%*
97%
100% (ABG’s Utilization rate)
80%
74
EAF steel production
69**
69
65 55
* Q1 2012 real ** FY Estimate
50%
50 2007
2008
2009
2010
2011
2012e
Stable growth expected in steel production Forecast
(million tons)
250
0
69
Total BOF EAF
1997 1999 2001 2003 2005 2007 2009 2011 2013e 2015e
73
75
77
19.6
20.3
21.0
Rest EU-27
18.7
UK France Spain
3.5 6.2
3.9 6.6
4.0 6.9
4.2 7.1
11.0
11.6
12.0
12.4
Italy
17.3
17.9
18.0
18.5
Germany
12.5
13.0
13.2
13.4
2012e
2013e
2014e
2015e
14 Source: Zinc Market Outlook, Quarterly – October 2011; CRU Group International Ltd.; Eurostat; Company data
Vehicle production in the World Abengoa Aluminum recycling business depends on EU automobile industry, the 2nd largest market worldwide Vehicle production by region in 2011 (% Total = 80.3 million units) CEI Europe (Ex-UE) 3%1%
EU-27
22%
1% 5%
Others Latam
NAFTA
17%
China
23%
27%
Asia (Ex-China)
27%
-17%
74.2
(million units)
4.2 3.8 15.8
77.6
11.6
3.4 3.2
13.9
17.6
14.1
13.5
16.5
17.2
18.3
18.4
14.9
11.6
21,1
21.0
2007
2008
Asia China) Asia (Ex (ex-China)
4.6 4.2
63.1 11.6
17.8
4.1 4.1
71.8 4.4 3.3
China China
79.9
13.8 16.3 2009
UE-27 UE-27
NAFTA NAFTA
20.6
22.1
2010
2011
Latam Ibereoamérica
Vehicle production by region – Top 20
Vehicle production by region 2011 – Top 20 (Total = 80.3 million units) (Total 2011= 80.3 million units)
China EU-27 USA Japan Germany South Korea India Brazil Mexico Spain France Canada Russia Iran Thailandia UK Czech Rep Turkey Indonesia Poland Argentina
CEI; Other EU-27) Otros (CEI, (ex Europa Ex UE)
Source: Organisation Internationale Constructeurs d’Automobiles, OICA; J.D. Power Automotive Forecasting
18.4 17.5 8.7 8.4 6.3 4.7 3.9 3.4 2.7
2.4 2.3 2.1 2.0 1.6 1.5 1.5 1.2 1.2 0.8 0.8 0.8
15
Vehicle production in EU-27 (I) European vehicle production industry shows slow recovering from 2009 lowest figures
19.9
-25%
15%
17.6 14.9
4.4 1.8 1.3
3.8 1.1 0.8 2.2
2.5
3.0
4.3
4.1
1.6 1.0
2.9
17.2
16.5
5.0
2.5
2.0
1.4 0.8
1.4 0.8 2.4
2.4
2.2
2.3
5.9
5.6
4.9
5.6
6.0
2007
2008
2009
2010
2011
Germany
France
Spain
Italy
United Kingdom
Rest EU-27
Signs of recovery although still far from pre-crisis 16 Source: Organisation Internationale Constructeurs d’Automobiles, OICA; J.D. Power Automotive Forecasting; Company data
Vehicle production in EU-27 (II) At current levels of vehicle production in Europe, Abengoa generates stable cash flows due to high utilization rates Plants’ utilization follows vehicle production trend 17.6
19.0
17.2
16.5
14.9 95%
91%
85%
75% 64%
2007
2008
2009
2010
Average Utilisation
2011
Vehicles EU-27
Slow recovery expected to reach pre-crisis levels Forecast
CAGR 4%
19.9 17.6 14.9
2007
2008
2009
16.5
17.2
2010
2011
15.8
16.1
2012e
2013e
17.3
2014e
18.2
18.9
2015e
2016e
Source: Organisation Internationale Constructeurs d’Automobiles, OICA; J.D. Power Automotive Forecasting; Company data
19.8
20.4
2017e
2018e
17
Our Vision
Abengoa aims at becoming a global leader in industrial waste recycling niches Today - top european player in steel dust and salt slags
Tomorrow – global leader in industrial waste recycling niches
Presence in 6 European
Presence in 10-11 countries of the
13 recycling plants ~900 kt treated annually
19-20 recycling plants ~1,600 kt treated annually
countries
world
Additional growth through recycling of other niche metal residues
18
Innovative Technology Solutions for Sustainability
ABENGOA
Thank you! Analyst & Investor Day May 2012
