Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — 9M 2016 Earnings Presentation
23 slides from Navigator Company Sa's earnings presentation, Oct 27, 2016
Slide 1: The Navigator Company 9M 2016 Results Presentation
The Navigator Company 9M 2016 Results Presentation October 27th, 2016
Slide 2: Speakers
Speakers Diogo da Silveira – CEO Fernando Araújo– CFO Joana Appleton - IR 1
Slide 3: 9M 2016 – Growth in a difficult environment
Significant turnover growth and diversification over the last years 9M 2016– Growth in a difficult environment • EBITDA increased by 2.6% to € 301.5million, with margin EBITDA / Sales up to 26.1 % + Another record in paper sales volume and turnover + Good volumes for pulp and tissue + Cost efficienc
Slide 4: UWF: market deteriorating during Q3 2016
UWF: market deteriorating during Q3 2016 • Market conditions in Europe worsened during Q3 2016, with estimated apparent consumption for UWF declining 6.1% and falling 4% YTD Jan-Sep 2016 • Imports into Europe increased up to 25%, essentially in office papers (+30%), with imports from Asia doubling o
Slide 5: Benchmark price evolution for pulp and paper
Benchmark price evolution for pulp and paper • The industry benchmark for paper gained 1.4% YoY (820€ vs 818 €/ton), but declined 3% since the beginning of the year. • Industry benchmark for pulp lost 9% YoY for both euros and USD; the index lost 15% since the beginning of the year in Euros and 18%
Slide 6: Paper, pulp and tissue business performance
Paper, pulp and tissue business performance • Highest volume sold in a 9 month period - 1 156 thousand tons of UWF (+2.2% YoY) and highest paper turnover (€ 890 million) • Record sales to international markets (+2,3% YoY) • Average sales price negatively affected by sales geography and product mix (
Slide 7: Strong EBITDA and EBITDA / Sales margin in Q2 and Q3
Strong EBITDA EBITDA of 390 M€ : highestand EBITDAEBITDA / Sales in the last 5 years margin in Q2 and Q3 EBITDA in Q3 2016 increased 4.4% versus Q2 2016, with improvement in EBITDA/Sales margin 120.0 30% 28% 100.0 26% 24% Values in million Euros 80.0 22% 60.0 20% 18% 40.0 16% 14% 20.0 12% 0.0 10% Q1
Slide 8: YoY growth in EBITDA sustained by higher volumes and cost improvements
YoY growth in EBITDA sustained by higher volumes and cost improvements (Mais info nos anexos) Excluding non recurrent positive impact of the revaluation of biological assets, higher volume and lower costs have compensated for the reduction in prices, yielding a recurrent EBITDA in line with EBITDA f
Slide 9: Navigator continues to generate strong operating cash flow
Navigator EBITDA of 390 M€continues to : highest EBITDA in thegenerate last 5 years strong operating cash flow Strong operating cash flow YTD 2016 of €258 million, comparing favorably to € 228 million YTD 2015 110 100 101 90 91 Values in million Euros 80 86 85 84 82 76 78 70 75 72 70 71 73 67 69 60
Slide 10: Significant improvement in Free Cash Flow
Good operating performance but limited free cash flow Significant improvement in Free Cash Flow In spite of higher inventories, working capital improved significantly during Q3 and FCF grew to € 69 million. Accumulated 9 months FCF totaled € 101 million 258 - 101 Maintenance 26 M€ Values in million
Slide 11: Balance sheet remains strong
Balance sheet remains strong Net debt increased mainly due to capital expenditure plan started in 2015 and dividend payment; Net Debt/Ebitda remains within conservative levels 700 Net Debt Net Debt / Ebitda 800 723 3.6 3.1 687 654 3.2 700 Values in million Euros 600 2.8 463 2.4 500 364 2.0 400 307 2
Slide 12: 9M 2016 - Significant improvement in financial results
New credit facilities and extension of maturity reduce cost of debt 9M 2016 - Significant improvement in financial results Financial Results Improved financial results mainly due to a significant reduction in interest costs following debt restructuring: 9M 2015 9M 2016 repayment of the € 350 mln Por
Slide 13: New credit facilities and extension of maturity reduce cost of debt
New credit facilities and extension of maturity reduce cost of debt 9M 2016: New debt issued • € 25 mln line from EIB with final maturity in 2028 • Additional € 215 mln financing, with 5 year maturity and all-in costs between 1.50% and 1.65%, through two new bond issues of € 100 mln and € 45 mln, an
Slide 14: Continuing cost reducing measures – M2 and Lean System
Continuing cost reducing measures – M2 and Lean System M2 Project - Enlarged scope and increased estimated impact 95 projects under development, with a revised estimated impact on EBITDA in 2016 of approximately € 15 million; projects under way include: + Improve efficiency in paper machines in Setu
Slide 15: Current share price - Strong upside?
Current share price - Strong upside ? Shares lost 29% YTD Sep2016, negatively pressured by Portuguese market performance and sector sentiment; improvement in average liquidity and sustainable dividend yield of 9% Shares (M) Average price & volume of traded Navigator shares from January 2015 to Septe
Slide 16: Capex of € 101 million (vs. € 154 million YoY)
Capex of € 101 million (vs.€ 154 million YoY) • Turbogenerators repair Pulp, paper Current and tissue: • Photovoltaic Central (Setubal paper business 26 M€ mill) • Recurrent capex Mozambique: • Plantations & Social development 7 M€ plan (+ € 5.5 million in biological assets) Future business Pellets
Slide 17: Start-up of Pellets Plant in the USA
Increase efficiency and cost reduction iniciatives Start-up of Pellets Plant in the USA • Colombo Energy Inc project in Greenwood, South Carolina, concluded and continuous operations started; first shipload to Europe during Q4 2016 • Initial tests point to a premium product with high calorific value
Slide 18: Update on Mozambique project
Increase efficiency and cost reduction iniciatives Update on Mozambique project • Political and economic situation remains unstable, slowing the pace of operations • Planting work continued during the first 9 months of 2016: around 4,400 ha planted in Zambézia, using sapplings supplied by the Forest
Slide 19: Update on Tissue & other growth projects
Increase efficiency and cost reduction iniciatives Update on Tissue & other growth projects • Cacia´s project to build new line for tissue paper and converting capacity, with 70 thousand tons per year, involving 120 million capex, still under revision • Navigator intends to continue developing its e
Slide 20: Outlook
Outlook for 2016 Outlook • Pulp market remains under pressure with significant growth in supply expected for 2016, 2017 and 2018; some positive effects may come: - delays in the coming of short and long fibre capacity in the market; - widening price differential between short fibre pulp and long fib
Slide 21: Summary
Outlook for 2016 Summary • Operating results for the first 9M 2016 were solid, supported by: + strong sales effort + focus on cost cutting measures • In this adverse context, the Group continues to work on the variables it is able to influence: + Pursue further cost reduction programs + diversifying
Slide 22: Disclaimer
Disclaimer This presentation does not constitute or form part of and should not be construed as any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities in any jurisdiction nor shall it or any part of it nor the fact of its distribution
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