Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — Q1 2018 Earnings Presentation
32 slides from Navigator Company Sa's earnings presentation, May 10, 2018
Slide 1: The Navigator Company Q1 2018 Results Presentation
The Navigator Company Q1 2018 Results Presentation May 10th 2018
Slide 2: Participation
Participation Diogo da Silveira – CEO Fernando Araújo – CFO António Redondo – CCO Nuno Santos João Paulo Oliveira Joana Appleton – IR 1
Slide 3: Q1 2018 results presentation
Q1 2018 results presentation • Main highlights • Market outlook • Group performance • Update on new projects 2
Slide 4: Q1 2018 – Key Highlights
Significant turnover growth and diversification over the last years Q1 2018 – Key Highlights P&P Market • Pulp market continued strong with additional increase in prices • Improvement in UWF prices Volumes • Overall decrease in volumes due to production stoppages, mainly in pulp Divestment • Conclus
Slide 5: 2018: Upward trend in pulp prices continues
2018: Upward trend in pulp prices continues YTD 2018 price increase in BHKP in USD: +3.8% and in Euros: +1.0% YoY average price increase in BHKP in USD: +48% and in Euros: +28% USD/ton PIX Europe €/ton 1100 USD/ton BHKP EUR/ton BHKP Av. YTw 13: 1100 1013 USD/ton (+3.8% YTD) Av. 2017: 1000 817 USD/to
Slide 6: Market balance estimated for 2018 depends on China effect
Market balance estimated for 2018 depends on China effect Conserv. Optim. 5
Slide 7: UWF continues one of the best performing grade in P&W papers
UWF continues one of the best performing grade in P&W papers Feb. 2018 14.0 6.8 3.6 1.8 1.9 M ton 200 YoY kton 150 100 50 +0.0% +0.1% 0 ‐50 ‐1.7% ‐100 ‐2.5% ‐0.8% ‐150 ‐200 Total Uncoated Coated Uncoated Coated 48 % Woodfree Woodfree Mechanical Inc. SuperCalendered Mechanical Share UWF On world P&W
Slide 8: World paper market in Q1 2018
World paper market in Q1 2018 Asia/ USA EUR China Declining demand UWF: both in CS Contracting demand UWF: in CS (- Major players announced in the last (-4.8%) and FL&RL (-0.7%) in Q1 5.5%), FL (-1.4%) and RL (-3.3%) months aggregated worldwide price 2018 YoY increases of more than +250 in Q1 2018 Y
Slide 9: European papermakers margin at minimum level
European papermakers margin at minimum level Index FOEX PIX (Europe) €/ton A4 – B Copy BHKP 2012 2013 2014 2015 2016 2017 2018 A4 – B Copy: index for uncotaed woodfree paper (80 g/m2) BHKP: index for bleached harwood kraft pulp (eucalyptus or birch) 8
Slide 10: Improvement in paper price benchmark in 2018
Improvement in paper price benchmark in 2018 Average price in Q1 improved +5.2% YoY (+2.2% YTD) European Market Paper Price – A4 B-copy €/ton 900 A4 B-copy Last PIX (W18): 860 €/ton 850 Av. YTw 13: 845 €/ton (+2.2% YTD) 800 Av. 2016: Av. 2017: 822 €/ton 819 €/ton (Var. W1-52: -3.5%) (Var. W1-52: +4.
Slide 11: Navigator paper performance in Q1 2018
Navigator paper performance in Q1 2018 • UWF sales volume of 361 kton (-10.3 kton YoY) and product mix improvement: + Premium products share up to 55% (+5.8 pp YoY; +16 kton YoY) + Mill brands up to 68% (+8.3 pp YoY; +9 kton YoY) • In Q1 2018 Navigator led 2 pulp price increases in Europe (January a
Slide 12: Pulp turnover impacted by reduction in volume
Pulp turnover impacted by reduction in volume • Pulp sales in volume of 53 kton, 37 kton less YoY due to decreased availability of pulp: + Maintenance stoppage at Setúbal pulp mill + Stock build up at Figueira da Foz (for planned maintenance + pulp capacity increase project) • Navigator’s net price
Slide 13: Tissue business impacted by pulp price
Tissue business impacted by pulp price • Volume of tissue sold in converted products increased 13% YoY • Sales increased 4% to € 19 million (vs. € 18 million) • Average sales price 9% higher YoY due to improvement in product mix (decreased weight of reels) • Operating margin impacted by pulp price i
Slide 14: EBITDA Performance in Q1
EBITDA Performance in Q1 Positive performance in EBITDA due to price effect and pellets sale 12 111 17 2 90 -11 M€ EBITDA R17 Volume Price Effect Costs Pellets EBITDA R18 Effect & Other Delta Pellets: + € 9.4 million of capital gain + € 2.3 million of pellets losses in 2017 + Other 13
Slide 15: M2 cost reduction and efficiency programme continues
M2 cost reduction and efficiency programme continues • Estimated impact YoY on EBITDA in Q1 2018 of € 3.8 million, mainly due to: + Fibre consumption: € 1.3 million + Chemicals: € 0.8 million • Savings in energy contracts renegotiation estimated at € 7.3 million 14
Slide 16: Free Cash Flow at € 134 million
Free Cash Flow at € 134 million Free Cash Flow positively impacted by cash from pellets sale and VAT reimbursement Free Cash Flow M€ 92 134 86 -29 -14 -2 Operating CAPEX Change in Change in Suppliers and Free Cash Cash Flow Inventories Accounts Others* Flow Receivables *Others includes: • Cash from
Slide 17: Significant reduction in net debt
Significant reduction in net debt Net debt & Net debt/EBITDA 738 742 693 641 617 M€ 559 1,8 1,9 1,7 1,6 1,6 1,3 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Net debt Net debt/EBITDA 16
Slide 18: Q1 2018 – Financial results
New credit facilities and extension of maturity reduce cost of debt Q1 2018 – Financial results Q1 2017 Q1 2018 Financial results decreased from - € 3.9 to - € 5.5 million: • Negative impact of € 3.3 million, related to advance recognition of the difference between the nominal and -3,9 current value
Slide 19: CAPEX of € 29 million (vs. € 14 million)
CAPEX of € 29 million (vs. € 14 million) CAPEX M€ 11,4 28,6 Main YoB Projects 1,9 11,0 4,2 Pulp Tissue Cacia Tissue Rodão Pulp, Paper CAPEX Figueira and Others 18
Slide 20: Outlook for 2018
Outlook for 2016 Outlook for 2018 Pulp: positive momentum should continue as demand as been absorbing new capacities Tissue: high pressure on margins; rise in pulp price needs to be offset by an increase in tissue price Paper: order book remains strong and new price increases are being announced in
Slide 21: Update on New Projects – Pulp F. Foz
Update on New Projects – Pulp F. Foz Optimization Project 3 – Ecoefficiency: Total CAPEX of € 81.5 million Main Goals: • Increase the annual pulp production from 580,000 to 650,000 tAD • Increase the efficiency of pulp process • Reduce wood and chemicals specific consumption • Implementation of BAT
Slide 22: Update on Cacia tissue project
Update on Cacia tissue project • Integrated tissue mill with capacity to produce 70 kton of reels and converted products • Project on time and on budget: - paper machine to start up in Q3 2018 - converting lines starting in May - Estimated capex kept at € 121 million • Book-building of new clients i
Slide 23: Current view of Cacia tissue project
Current view of Cacia tissue project 22
Slide 24: Cacia tissue project: first converting line to start 3rd week of May
Cacia tissue project: first converting line to start 3rd week of May 23
Slide 25: Cacia tissue project: first converting line to start 3rd week of May
Cacia tissue project: first converting line to start 3rd week of May 24
Slide 26: Cacia tissue project: first toilet paper and pallet produced
Cacia tissue project: first toilet paper and pallet produced (current week) 25
Slide 27: Navigator – #2 player in tissue in Iberia after expansion project
Navigator – #2 player in tissue in Iberia after expansion project Estimated tissue production capacity in Iberian Peninsula (kton) Paper production Finished product production (converting) Finished product production (converting) Paper production Others 26
Slide 28: 2018 Dividend proposal
2018 Dividend proposal Dividend proposal - AGM to be held on May 23th 2018: + Navigator Board of Directors proposes dividend of € 170 million to be paid in June (0.2371 €/share) + Main Shareholder proposes distribution of reserves of € 30 million to be paid in July (0.04184 €/share) + Implicit divid
Slide 29: Back-up slides – Financials
Back-up slides – Financials 28
Slide 30: Quarterly figures – YoY evolution
Quarterly Financials 2015 Quarterly figures – YoY evolution Turnover (M €) EBITDA (M €) Net Earnings (M €) 108 102 104 111 420 427 90 61 62 393 397 385 50 53 36 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2017 2017 2017 2017 2018 2017 2017 2017 2017 2018 2017 2017 2017 2017 2018 EBITDA/Sales (%) RO
Slide 31: 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
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The Navigator Company — Q1 2018 Earnings Presentation on 6ix