Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — Investor Presentation (November 2022)
51 slides from Navigator Company Sa's investor presentation, November 2022
Slide 1: Investor Presentation November 2022
INVESTOR PRESENTATION November 2022
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.. Accordingly, no representation, undertaking or warranty, expressed or implied, is given by T
Slide 3: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY ON THE RIGHT SIDE OF THE FUTURE OUR PURPOSE PEOPLE, THEIR QUALITY OF LIFE, We want to share with society not AND THE PLANET'S only our results, but also our FUTURE ARE WHAT knowledge, experience and resources INSPIRE AND in the search for a better future MOVE US 3
Slide 4: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY << ON THE RIGHT SIDE OF THE FUTURE 01 A BIOINDUSTRY 02 03 04 05 ON THE RIGHT SIDE OF THE FUTURE Pulp l Paper Sustainability Performance, Solid & Resilient Expansion & & Tissue at the Core Market Update Business Model Diversification & Outlook 4
Slide 5: The Navigator Company: An Integrated Forest, Pulp, Paper, Packaging and Tissue Producer
THE NAVIGATOR COMPANY << Much more than a conventional pure pulp or graphical paper player EXCELLENT AND UNIQUE RAW MATERIAL AN INTEGRATED (Eucalyptus Globulus fiber) FOREST, PULP, PAPER, LARGE SCALE PRODUCTION UNITS PACKAGING AND TISSUE PRODUCER STATE-OF-THE-ART TECHNOLOGY EFFICIENT CASH COST STRUC
Slide 6: At the Heart of Everything We Do Is the Forest
AT THE HEART OF EVERYTHING WE DO IS THE FOREST a natural and renewable resource that provides excellent raw material Navigator has the largest certified forest nursery in Europe with capacity to produce 12 million plants/year BIODIVERSITY PROTECTION CERTIFICATION Forest management € 4.3 million inve
Slide 7: The Navigator Company: An Integrated Producer
THE NAVIGATOR COMPANY << AN INTEGRATED PRODUCER TISSUE 130,000 tonnes Reels R&D 120,000 tonnes Converting * Leader in Eucalyptus 55 65 globulus cloning 70 60 k tonnes PAPER FOREST 1.6 M tonness of UWF paper 104,673 ha of forest (under management) 790 775 k tonnes PULP ENERGY 1.6 M tonnes of BEKP pul
Slide 8: Based on Large Scale Production Mills
BASED ON LARGE SCALE PRODUCTION MILLS << WITH STATE-OF-THE-ART TECHNOLOGY With global capacity of: 1.6 Mt of Paper – 1.6 Mt of Pulp – 130 kt of Tissue Reels – 376 MW of Energy SETÚBAL AVEIRO FIGUEIRA DA FOZ VILA VELHA DE RODÃO • Pulp (Integrated) – 550,000 tAD • Pulp (Market) – 360,000 tAD • Pulp (I
Slide 9: Navigator Is the Leading Manufacturer of UWF Paper in Europe
NAVIGATOR IS THE LEADING MANUFACTURER << OF UWF PAPER IN EUROPE l YTD 2022 Nº1 in European UWF fine paper by capacity, with the largest and most modern mills European uncoated fine paper Uncoated Woodfree (UWF) Main players (Excluding Russian Mills and Specialties) European mills excluding Russian m
Slide 10: With a Very Efficient Cash Cost Structure
WITH A VERY EFFICIENT CASH COST STRUCTURE << Low prices and high costs are taking UWF capacity out of the market. Navigator is well equipped with efficient assets and strong products and brands to continue to be the global UWF benchmark. European UWF Cash Cost Curve - Q2 2022 vs Q2 2021 EUR/t, deliv
Slide 11: With a Total Energy Capacity of 376 MW
WITH A TOTAL ENERGY CAPACITY OF 376 MW << 61% OF WHICH FROM RENEWABLE SOURCES The Navigator Company is responsible for 4% of the total electricity generation in Portugal Cogeneration Biomass Solar Photovoltaic (Biomass+Natural Gas) 344 MW 25 MW 7 MW ▪ 6 high efficiency cogeneration ▪ 2 biomass power
Slide 12: With a Successful Differentiation Strategy
WITH A SUCCESSFUL << DIFFERENTIATION STRATEGY BASED ON THE HIGHEST QUALITY PAPER PRODUCTS AND OWN BRANDS Product and brand differentiation strategy have moved the Group’s product mix to the high-end market, allowing up to 8% price premium advantage (in Europe) in H1 2022 NVG market share Europe in W
Slide 13: Producing a Resilient Paper Grade (UWF)
PRODUCING A RESILIENT PAPER GRADE (UWF) << AND LESS EXPOSED TO DIGITALIZATION Woodfree Mechanical 2021 Global Printing & Writing Demand Distribution Coated Uncoated Coated Uncoated Coated Trade books, High-end magazines & Magazines & Mechanical directories 11% Communication materials communication m
Slide 14: And Innovating for Growth from Fossil to Forest
AND INNOVATING FOR GROWTH FROM FOSSIL TO FOREST << Innovation Innovation Innovative through through products & tissue packaging technologies NEW BUSINESS OPPORTUNITIES New opportunities for forest-based New line of packaging products and promising scientific Sophistication and products, designed to
Slide 15: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY << ON THE RIGHT SIDE OF THE FUTURE 01 A BIOINDUSTRY 02 03 04 05 ON THE RIGHT SIDE OF THE FUTURE Pulp l Paper Sustainability Performance, Solid & Resilient Expansion & & Tissue at the Core Market Update Business Model Diversification & Outlook 15
Slide 16: UWF Market Demand Drivers
UWF MARKET DEMAND DRIVERS << UWF is Universal (everywhere to everybody) and Versatile (addressing multiple applications) Education External Science Production Communications Emp. in Services Industrial Activity Letter & Agreements (esp. Knowledge sector) Reading habits Direct Mail Population growth
Slide 17: Sustainable Growth of UWF Demand
SUSTAINABLE GROWTH OF UWF DEMAND << MATURE MARKETS vs. DEVELOPING WORLD Mt,World 49 49 54 51 54 53 53 481 39.1 40.0 39.0 37.6 China share of 35.3 RoW 33.2 38% 37% 37% 41% 2% CAGR L3Y 38% Rest of 28.4 26.4 34% Demand Outlook* through 2030 the World 32% NA -3%/y WE -2%/y 31% Financial Crisis OP more e
Slide 18: European UWF Demand Decline Followed by Capacity Reduction
EUROPEAN UWF DEMAND DECLINE << FOLLOWED BY CAPACITY REDUCTION Western European Focus Demand decline, capacity follows -2.9 Mt 2003-21 UWF capacity CAGR –2.3% / y 8.3 8.3 8.1 Capacity WE 7.6 7.1 Demand WE 7.5 7.5 7.2 6.5 -2.8 Mt 6.1 5.51 2003-21 UWF demand 6.2 CAGR -2.8% / y 5.7 5.6 5.1 4.4 2000 2003
Slide 19: Leading Market Player in UWF Segment
LEADING MARKET PLAYER IN UWF SEGMENT << H1 2022 Paper Sales Distribution 3% For every 3 office paper reams 9% exported from Europe* Europe 8% Africa Middle East 1 13% North America 67% Latin America 1 Includes Turkey, Asia and Oceania 2 are made by Navigator NVG Share of European Exports * (exc. RU)
Slide 20: With a Strong Position in the UWF Market
WITH A STRONG POSITION IN THE UWF MARKET The use of an excellent and unique raw material such as Eucalyptus globulus fiber, modern and efficient plants and an experienced workforce – allows the production of high-quality paper and the emphasis on premium products World Market (e) Navigator Premium 1
Slide 21: Strong Pulp Demand
STRONG PULP DEMAND << BEKP LEADING POSITION World China Global BEKP Demand Outlook M tAD 2000 2021 M tAD 2000 2021 L5Y (Mt/y) CAGR 21-26 SW 18.9 25.0 SW 1.4 8.2 0.0 World 4.3% BEK 6.6 26.3 BEK 0.3 9.9 0.3 Other 13.1 13.0 Other 0.7 5.3 0.4 Total 38.6 64.2 Total 2.4 23.3 0.7 Global Pulp Demand Outlook
Slide 22: Pulp: Navigator Positioning
PULP NAVIGATOR POSITIONING << EUROPEAN LEADER IN BEKP PRODUCTION Pulp Sales Focus on Value Added Segments in Europe 300 - 350 Decor & Specialities allows for a price premium over other segments: k tonnes 70 7.2% MS in Europe Decor & Specialities 21 % Of total demand in Europe* % In NVG mix** 70% Mar
Slide 23: Prices at Historical Levels
PRICES AT HISTORICAL LEVELS << Index FOEX PIX (Europe) – Gross Prices European market paper price – A4 B-copy and BHKP (in €) 1500 1450 A4 B-copy BHKP 1400 1350 1300 Average BHKP prices 1250 1200 2015-2020 2021 2022* 1150 Europe 812 1,023 1,269 1100 USD 1050 Europe 716 867 1,207 Eur/Ton EUR 1000 Chi
Slide 24: Tissue Business
TISSUE BUSINESS << Strong Strategic Rational #3 P L A Y E R I N T I S S U E I N I B E R I A PRODUCTION CAPACITY IN IBERIAN PENINSULA Diversification of Synergies with our 280 (KTON) 2021 The Navigator core business Company’s portfolio Representing currently 10% of Navigator’s sales, tissue Raw mater
Slide 25: Tissue World Trends
TISSUE WORLD TRENDS << Market Growth Sustainable Market Mt Demand 50 40 2008-2021 (CAGR) 3.0% 30 20 2022e YoY 2.9% 10 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 North America Europe RoW China Tissue Demand per capita – 2021 and 2026e World Tissue Demand by Region - 2021
Slide 26: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY << ON THE RIGHT SIDE OF THE FUTURE 01 A BIOINDUSTRY 02 03 04 05 ON THE RIGHT SIDE OF THE FUTURE Pulp l Paper Sustainability Performance, Solid & Resilient Expansion & & Tissue at the Core Market Update Business Model Diversification & Outlook 26
Slide 27: New Packaging Products
NEW PACKAGING PRODUCTS << BAGS CORRUGATED CARDBOARD FLEXIBLE PACKAGING (retail, food & filling industries, etc.) (agriculture, industry, retail, e-commerce, etc.) (packs, pouches, food take-away, envelopes, etc.) • Sales above € 70 million in the first 9 months of 2022 • More than 170 customers | Re
Slide 28: Navigator and P2X Europe
NAVIGATOR AND P2X EUROPE << Subject to the approval of the anti-trust authorities, this unique joint venture, P2X-Portugal, will produce e-SAFs (e- Sustainable Aviation Fuels) – carbon-neutral synthetic kerosene, based on green hydrogen and biogenic CO2 The project will contribute to the development
Slide 29: Mozambique Project
MOZAMBIQUE PROJECT << Phase 1 Phase 2 Strategic Rationale Woodchip Mill Pulp Mill Growth opportunity driven by increased demand Investment 2.5 B in Asia and worldwide supply limitations (USD) 150 M 1.5 Mtons/year BEKP Attractive fundamentals of Mozambique: Planted Area 40,000 120,000 ‐ High Forest p
Slide 30: Mozambique Project Update
MOZAMBIQUE PROJECT UPDATE << Since the MoU signed in 2018, the work with the Mozambican Government has continued focusing on Phase 1 (export of woodchips). Meanwhile, Thay Mozambique Logística obtained the financing for the construction of the Port of Macuse. The port’s construction would be a major
Slide 31: Focused on Building the Future Bio-Economy
FOCUSED ON BUILDING THE RAIZ & Inpactus FUTURE BIO-ECONOMY project Examples of possible bioproducts from biorefinery Paper Pulp Essential oils and bioactive compounds for health and nutraceutics Fibers Tissue Bioethanol from forestry residues and primary sludges – biofuels Market pulp Pre-biotics fr
Slide 32: Creating Innovative Products & Technologies
Researchers/Technicians >200 CREATING INNOVATIVE PRODUCTS & Research grants 50 TECHNOLOGIES RAIZ & Inpactus project 2018-2022 PhD Students 24 A co-promotion R&D project between industry and academia A step forward to a green, global, sustainable and Invited chairs 2 competitive bioeconomic environme
Slide 33: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY << ON THE RIGHT SIDE OF THE FUTURE 01 A BIOINDUSTRY 02 03 04 05 ON THE RIGHT SIDE OF THE FUTURE Pulp l Paper Sustainability Performance, Solid & Resilient Expansion & & Tissue at the Core Market Update Business Model Diversification & Outlook 33 33
Slide 34: 2030 Sustainability Agenda
2030 SUSTAINABILITY AGENDA << A RESPONSIBLE BUSINESS AGENDA ALIGNED WITH NAVIGATOR´S PURPOSE OUR PURPOSE Preserve and value the natural capital, thus generating economic, environmental and social value by minimizing the ecological footprint and optimizing efficiency in the use of resources PEOPLE, T
Slide 35: 2030 Sustainability Agenda
2030 SUSTAINABILITY AGENDA << Create value and business opportunities with responsibility, applying ethical principles and demonstrating integrity and transparency in everything we do MAIN GOALS FOR NATURE FOR CLIMATE FOR SOCIETY Preserve and value the natural Invest in low carbon solutions Develop
Slide 36: Performance in 2021
PERFORMANCE IN 2021 << 90% raw materials from renewable 84% sources of water +7,000 returned to the families environment supported in For Mozambique NATURE For 71 % SOCIETY of total certified 1.6 M€ wood* 3,150 invested in the 88% employees** comunity of waste recycled 41 h/ and recovered employee t
Slide 37: Leader in Sustainability
Leader in Recognitions 3 81 sustainability PAPER & FORESTRY | R AT I N G * A- B LEADERSHIP MANAGEMENT | C L I M AT E 2021 First response | FOREST *NVG position in industry cluster SteerCo member of this Yale University based initiative Achievements & Other Initiatives focusing on forests and their r
Slide 38: For Nature: The Forest Is at the Heart of What We Do
For NATURE THE FOREST IS AT THE HEART OF WHAT WE DO << a natural and renewable resource 6.0 Million t CO eq >850 Species Flora of 2 245 Species of Fauna 12 Million RAIZ Plants produced Forest and Paper at Portuguese Research Institute Nurseries Improve forestry management Increase eucalyptus Yields
Slide 39: Biodiversity Conservation
For NATURE BIODIVERSITY CONSERVATION << as the key to environmentally responsible production and sustainable forestry management > 104 k Buffer zones and Flora hectares Habitat preservation (>850 species) Forest protection (biotic & abiotic) Fauna (>240 species) Our Impact Connectivity 100% (ecologi
Slide 40: Addressing Climate Change by Becoming a Carbon Neutral Company
For CLIMATE << ADDRESSING CLIMATE CHANGE BY BECOMING A CARBON NEUTRAL COMPANY The Navigator Company is GOAL 1 GOAL 2 committed to achieving Carbon To use renewable energy To cut direct CO2 emissions Neutrality at its industrial sites from industrial complexes by representing 80% of total by 2035, 15
Slide 41: Energy – Solar Photovoltaic
For CLIMATE For CLIMATE ENERGY – SOLAR PHOTOVOLTAIC << The energy generation through renewable energy sources constitutes one of the company’s strategic axis. This is shown through relevant investments in solar plants in a self consumption regime Herdade de Espirra (2018) Navigator Paper Setúbal (20
Slide 42: Investing in People & Talent Management
For For SOCIETY SOCIETY INVESTING IN PEOPLE & << TALENT MANAGEMENT Headcount Average age of 43 years old 3,211* (H1 2022) WORKFORCE Distribution by age: Figueira da REJUVENATION 12% < 30 years old Foz (2014-2022) 1,014 61% between 30 – 50 years old 27% > 50 years old Setúbal 1,084 TRAINING Training
Slide 43: Mozambique Project: Community Development
For INVESTING IN PEOPLE & TALENT MANAGEMENT SOCIETY << > $6 Million >250 employees* Securing invested families In the Community 90% Mozambicans 30% women welfare Development Program Delivering food (since 2015) security and generating income to 7,000 families 58 new water 795,000 kg improved seeds b
Slide 44: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY << ON THE RIGHT SIDE OF THE FUTURE 01 A BIOINDUSTRY 02 03 04 05 ON THE RIGHT SIDE OF THE FUTURE Pulp l Paper Sustainability Performance, Solid & Resilient Expansion & & Tissue at the Core Market Update Business Model Diversification & Outlook 44
Slide 45: Main Financial and Operational Highlights
MAIN FINANCIAL AND << OPERATIONAL HIGHLIGHTS Turnover (M€) EBITDA (M€) & EBITDA margin Operational Cash Flow (M€) 1 822 552 1 692 1 688 1 577 1 637 1 596 1 385 455 385 377 384 404 357 397 372 355 307 297 286 254 27% 22% 25% 25% 21% 22% 30% 2016 2017 2018 2019 2020 2021 9M 2022 2016 2017 2018 2019 20
Slide 46: Financial Indicators
FINANCIAL INDICATORS << Net Debt & Net Debt/EBITDA Free Cash Flow 2,38 1,92 1,72 1,68 1,61 1,5 0,56 640 692 683 715 680 322 595 198 211 234 235 184 186 372 2016 2017 2018 2019 2020 2021 9M 2016 2017 2018 2019 2020 2021 9M 2022 2022 ROCE ROE 36% 31% 18% 17% 19% 16% 16% 15% 12% 14% 13% 14% 11% 8% 2016
Slide 47: Historical Dividend Payment and Share Price Evolution
HISTORICAL DIVIDEND PAYMENT << AND SHARE PRICE EVOLUTION €/share 6,0 € 5,0 € 4,0 € 3,0 € 2,0 € 1,0 € Year Ajusted Total amount paid Dividend per (payment) dividend yield (million euros) share (€) 2017 8.8% 250.0 0.349 January 2017 – December 2021 2018 4.8% 200.0 0.279 2019 6.6% 200.0 0.279 TSR*: 47.
Slide 48: 9M 2022 Financial Highlights
9M 2022 FINANCIAL << HIGHLIGHTS Strong performance, despite the persisting macroeconomic and geopolitical uncertainties. Turnover of € 1,822 million (+63%) and record high 9M EBITDA of € 552 million (+124%). 9M 9M Q3 Q2 In millions € 9M’22-9M’21 QoQ 2022 2021 2022 2022 Turnover 1,822 1,120 63% 680 6
Slide 49: Solid Financial Position
SOLID FINANCIAL << POSITION Net Debt significant reduction to € 372 million, despite the € 100 million dividend payment in June. Net Debt/EBITDA ratio remains at historically low levels of 0.56x. M€ * Without IFRS 16 49
Slide 50: Outlook
OUTLOOK << Q4 started with historically high prices and the European industry´s order books at high levels due to paper scarcity. Strong start though significant uncertainties for Q4 2022 ▪ Uncertain macroeconomic and geopolitical environment ▪ Strong inflationary pressure, rising interest rates and
Slide 51: Investor Presentation
INVESTOR PRESENTATION November 2022
The Navigator Company — Investor Presentation (November 2022) on 6ix