Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — Q3 2021 Earnings Presentation
28 slides from Navigator Company Sa's earnings presentation, Nov 3, 2021
Slide 1: 9M/Q3 2021 Results Presentation
9M /Q3 2021 Results Presentation November 3rd 2021
Slide 2: Disclaimer
DISCLAIMER This presentation is intended to provide a general overview of The Navigator Company S.A.’s business and does not purport to deal with all aspects and details regarding The Navigator Company S.A.. This presentation has been prepared by The Navigator Company S.A. for information purposes o
Slide 3: Participation
<< PARTICIPATION António Redondo Adriano Silveira Executive Directors Fernando Araújo João Lé João Paulo Oliveira Nuno Santos Investor Relations Ana Canha 2
Slide 4: 9M / Q3 2021 Results Presentation: Main Highlights
9M / Q3 2021 RESULTS << PRESENTATION 01 02 03 Market & Main Group Outlook Highlights Performance 33
Slide 5: Q3 2021 | Resilient Quarter Despite Challenging Environment
Q3 2021 | RESILIENT QUARTER << DESPITE CHALLENGING ENVIRONMENT • Focus on pricing and product-market strategies, cost control and working capital management helped to mitigate the increase in commodities' prices • Best quarter volume wise (since Q3 2018) with significant UWF price recovery QoQ • Sep
Slide 6: 9M Financial Highlights
9M FINANCIAL HIGHLIGHTS << Change 9M 9M Q3 Q2 Change Turnover recovered 7% to € 1 120 In millions € 9M’21- 2021 2020 2021 2021 QoQ million on the back of significant 9M’20 paper volumes Turnover 1.120 1.044 +7% 405 374 +8% EBITDA totalled € 246 million, and recovery on margin over sales to EBITDA 24
Slide 7: Main Quarter Highlights
MAIN QUARTER HIGHLIGHTS << Operational Cash Turnover (M €) EBITDA (M €) Flow (M €) Highest turnover since Q3 2018, totaling € 405 million in the quarter (+8% QoQ) 374 405 96 348 341 341 75 80 79 290 70 71 66 68 70 52 50 54 Paper volumes remained vigorous at 380 k tons in Q3, increasing about 13% YoY
Slide 8: EBITDA YoY Analysis
EBITDA YoY Analysis << M€ Sound topline performance across the board together with savings in variable costs sustained the positive evolution in EBITDA +36 (+17%) 55 13 26 246 -18 -13 210 -27 UWF (+39) UWF (-17) UWF (+38) Wood (-1) Pulp (+15) Pulp (-1) Pulp (-11) Energy (+17) Tissue (+1) Tissue (0)
Slide 9: EBITDA QoQ Analysis (1/2)
EBITDA QoQ Analysis (1/2) << M€ Record QoQ price improvement in Q3 offset the unfavorable evolution in the acquisition price of several variable cost items +16 (+20%) 27 3 4 96 -8 -3 80 -8 UWF (+23) UWF (-8) UWF (+2) Wood (-1) Pulp (+4) Pulp (0) Pulp (-5) Chemicals (-1) Tissue (+1) Tissue (0) Tissue
Slide 10: EBITDA QoQ Analysis (2/2)
EBITDA QoQ Analysis (2/2) << M€ Significant growth in EBITDA (+36%) as the positive price impact outpaced the recent pressure on variable costs +25 (+36%) 53 4 -14 0 96 -12 -6 70 UWF (+35) UWF (-13) UWF (+10) Wood (-4) Pulp (+16) Pulp (-1) Pulp (-5) Energy (+4) Tissue (+2) Tissue (0) Tissue (-1) Pac
Slide 11: Market & Group Performance
9M / Q3 2021 RESULTS << PRESENTATION 01 02 03 Market & Main Group Outlook Highlights Performance 10 10
Slide 12: Pulp & Paper Prices in 2021
PULP & PAPER PRICES IN 2021 << Pulp prices currently at the highest level since beggining of 2000, with September ending at ≈ 979 €/ton; recent weakening of the Euro against USD impacting this value. Average paper prices declined 2.6% YoY, although improving when compared with Q2 (+3%) and Q3 2020 (
Slide 13: Update on the Pulp Market
UPDATE ON THE PULP MARKET << • Very strong pulp price increases since the beginning of the year, with China adjusting in Q3: PRICE - BHPK in Europe (YTD September): 979 €/ton (+77%) - BHKP in China (YTD September): 600 USD/ton (+16%) • Global hardwood demand drop of 4.5% August YTD (YoY), hit by Chi
Slide 14: UWF Market Conditions
UWF MARKET CONDITIONS << PULP • All time record high BHKP price puts significant pressure on paper producers; BSKP is also at PRICE very high levels and other cost inputs such as energy, chemicals and logistics have registered strong increases • Global Printing and Writing demand recovered 1.7 M ton
Slide 15: Navigator Paper Performance
NAVIGATOR PAPER << PERFORMANCE Navigator closed Q3 with an order book of 61 days and a drop in its paper stocks over the first 9 months of the year, ending September with approximately 11 stock days, an all-time low record. Navigator has been able to increase its market share among European Competit
Slide 16: Navigator Paper & Pulp Performance
NAVIGATOR PAPER & PULP << PERFORMANCE PAPER PERFORMANCE in 9M/Q3 • UWF sales volume increased about 4% comparing with previous quarter to 380 ktons (highest since Q3 2018), and showed a clear recovery YoY (+16%) • Paper turnover reflects the improvement on paper demand seen during the year, increasi
Slide 17: Tissue Business Keeps Good Performance
TISSUE BUSINESS KEEPS << GOOD PERFORMANCE Stable performance during Q3 with Away-from-Home segment shading off 46% Portugal 77% Finished Products 73% Consumer and (43% 9M 2020) Revenue by Cash & Carry Revenue by (77% 9M 2020) Revenue by (69% 9M 2020) 36% Spain type segment geography (9M 2021) (9M 20
Slide 18: 9M 2021 Capex of € 52 Million
9M 2021 CAPEX OF € 52 MILLION << In 2020, in a context of uncertainty created by the pandemic, Navigator only executed, besides boiler investment, at Figueira da Foz, the projects considered necessary to maintain the production capacity, while postponing all other projects. With a better visibility
Slide 19: Strong Free Cash Flow Generation
STRONG FREE CASH FLOW << GENERATION Strong Free Cash Flow generation of € 183 million due to good operational performance, a still contained level of CAPEX and successful management of working capital which was reduced by € 31 million notwithstanding a substantial increase in activity. -20.8 (-10%)
Slide 20: Net Debt Reduction to € 597 Million
NET DEBT REDUCTION TO << € 597 MILLION Net debt reduced to € 597 million by the end of the quarter, a significant reduction of € 83 million when compared with year-end 2020, after the dividend payment of € 100 million to shareholders at the end of May. Since the beginning of 2021, Net debt / EBITDA
Slide 21: Extension of Debt Maturity
EXTENSION OF DEBT MATURITY << Navigator has done an extensive renegotiation of its debt, having diversified sources of funds and extended average tenure; negotiation of a € 100 million ESG linked bond, indexed to two ESG indicators: CO2 emissions reductions targets, consistent with the Company’s Roa
Slide 22: Creating Sustainable Value: New Packaging Products
CREATING SUSTAINABLE VALUE << NEW PACKAGING PRODUCTS Production and sales dynamic remain according to plan ▪ Reinforced the goal to reach 200 thousand tons production by 2025/2026 ▪ Estimated Capex of approximately € 10-12 million per year ▪ The PM1 and PM3 machines at Setúbal mill ensure supply on
Slide 23: gKRAFT from Fossil to Forest
gKRAFT from Fossil to Forest << T U R N I N G PA C K A G I N G I N TO A F O R C E F O R C H A N G E Navigator is elevating the concept of kraft paper and with it, the notion of sustainability. This is packaging with meaning. Navigator is striving to be a green force for good. The Company is accelera
Slide 24: Sustainability at the Center
SUSTAINABILITY AT THE CENTER << The Navigator Company is pleased to announce that it has joined Circular Bioeconomy Alliance (CBA) The purpose and vision of the 2030 Agenda align closely with the Circular Bioeconomy Alliance. We fully support the work of CBA in facilitating a Science-Based Dialogue.
Slide 25: Takeaways
<< TAKEAWAYS • Focus on pricing and product-market strategies, cost control and working capital management helped to mitigate the increase in commodities' prices and the very volatile environment • September ending with the largest paper order book ever registered • Positive evolution on prices • Ne
Slide 26: Outlook
9M / Q3 2021 RESULTS << PRESENTATION 01 02 03 Market & Main Group Outlook Highlights Performance 25 25
Slide 27: Outlook
OUTLOOK << With the global economic recovery, it is expected that conditions on pulp, paper and tissue segments remain globally positive, with strong cost pressure in the short-term PULP PAPER TISSUE • Prices in China mostly dependent • Regardless pulp price evolution, • Cost inflation expected to o
Slide 28: 9M/Q3 2021 Results Presentation
9M /Q3 2021 Results Presentation November 3rd 2021
The Navigator Company — Q3 2021 Earnings Presentation on 6ix