Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — Iberian Forum ODDO BHF 2024
53 slides from Navigator Company Sa's conference presentation, October 2024
Slide 1: Iberian Forum ODDO BHF
IBERIAN FORUM ODDO BHF OCTOBER 2024 1
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 01-Solid & Resilient Business Model 02-Paper l Pulp l Energy & Tissue 03-New Business Opportunities 04-Sustainability at the Core 05-Financial Performance 3
Slide 4: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY ON THE RIGHT SIDE OF THE FUTURE OUR PURPOSE Innovation By expanding our knowledge and creative potential, together we can achieve the impossible The balance between the Economic, Environmental and Social pillars of Sustainability Sustainability is the foundation of our business model P
Slide 5: The Navigator Company
THE NAVIGATOR COMPANY Solid Core. Increasingly diversified A BIOINDUSTRY ON THE RIGHT An integrated producer of forestry, pulp, paper, tissue, sustainable packaging solutions and bioenergy, based on unique raw material SIDE OF THE FUTURE (Eucalyptus Globulus), continuous R&D and state-of-the-art fac
Slide 6: The Navigator Company
THE NAVIGATOR COMPANY An integrated producer of forest-based bioproducts R&D FOREST Leader in Eucalyptus Energy 9% Packaging 2% 109,086 ha of forest under management 4 globulus cloning (vs. 10%) (vs. 4%) 356 Kha Land Use Rights in Mozambique TISSUE PULP #1 Portugal, #2 Iberia, #1 Europe, #7 World #4
Slide 7: Agile Business Model
AGILE BUSINESS MODEL Proving Resilience in a Cyclical Market Navigator stability and consistency in delivering results: ✓ operational flexibility; ✓ resilient business model, anchored in a solid diversification strategy, with differentiated products and a focus on the premium segment and own brands;
Slide 8: With the Forest at the Heart of Everything We Do
WITH THE FOREST AT THE HEART OF EVERYTHING WE DO A Natural and Renewable Resource 1,057 Species of 6.2 Million t CO eq Flora 253 Species of 2 Fauna > 8 Million Plants produced at Portuguese Nurseries RAIZ Forest and Paper Research Institute Improve forestry management Increase 109,086 ha 9.6 Million
Slide 9: World Class Production Units
WORLD CLASS 10 PRODUCTION UNITS Based in 3 countries, with state-of-the-art technology Goods sold to 130 countries, across all 5 continents 3,927 EMPLOYEES With global capacity of: ZARAGOZA 38 Nationalities ▪ 1.6 Mt of Paper • Tissue – 35,000 t reels 60,000 t converting 1 ▪ 1.6 Mt of Pulp ▪ 165 kt o
Slide 10: 1st Place in the Sustainalytics ESG Ranking
A BIOINDUSTRY ON THE RIGHT SIDE OF THE FUTURE 1st place in the Sustainalytics ESG Ranking - Paper & Forestry and Paper & Pulp ▪ Sustainalytics' ESG Risk Rating 2024: Navigator at the top of the Paper & Forestry and Paper & Pulp clusters, on the lower fringe of the "low" risk level, with the vast maj
Slide 11: Solid & Resilient Business Model
A BIOINDUSTRY ON THE RIGHT SIDE OF THE FUTURE 01-Solid & Resilient Business Model 02-Paper l Pulp l Energy & Tissue 03-New Business Opportunities 04-Sustainability at the Core 05-Financial Performance 11
Slide 12: UWF Is Universal and Versatile
UWF IS UNIVERSAL AND VERSATILE Everywhere to everyone, addressing multiple applications RESILIENT & SOCIAL & GEOGRAPHIC BRANDING & GROWING CULTURAL OPPORTUNITIES PRODUCT APPLICATIONS DIFFERENTIATION Wider range of applications Important role for Population growth & Navigator: Top-Selling and less de
Slide 13: Resilient Paper Grade (UWF)
RESILIENT PAPER GRADE (UWF) Less Exposed to Digitalization Global Printing & Writing Demand 2% UWF resilience comes from its 11% Uncoated Woodfree Universality | available for purchase Versatility | end use options 9% by many different customer are wide Coated Woodfree segments, from both B2B and B2
Slide 14: Leading Manufacturer in Europe
LEADING MANUFACTURER IN EUROPE Uncoated Printing and Writing Papers (UWF) #1 in Europe #6 in the World by capacity, with the largest and most modern mills European uncoated woodfree (UWF) Main players (Excluding Russian Mills and Specialties) MT % 1 NVG (PT) 1.6 28% Figueira da Foz Setubal 2 Sylvamo
Slide 15: With an Efficient Cash Cost Structure
WITH AN EFFICIENT CASH COST STRUCTURE Navigator is well equipped with efficient assets and strong products and brands to continue to be the global UWF benchmark €/ton Q1 2024 EUR UWF Cash Cost Curve, excl. Russia €/t, delivered in Paris 1100 1000 900 800 700 600 500 400 300 0% 25% 50% 75% 100% Cumul
Slide 16: Leading Manufacturer
LEADING MANUFACTURER Best sales mix in the world: circa 60% premium & 80% own brands 2023 Paper Sales Distribution 5% On average, for every 3 office 3% Europe paper reams exported from Europe 1 14% Africa Middle East North America 16% Latin America 62% 2 are made by Navigator 1 Includes Turkey, Asia
Slide 17: Strong Position in the UWF Market
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 10-15%
Slide 18: Paper | Pulp | Energy & Tissue
A BIOINDUSTRY ON THE RIGHT SIDE OF THE FUTURE 01-Solid & Resilient Business Model 02-Paper l Pulp l Energy & Tissue 03-New Business Opportunities 04-Sustainability at the Core 05-Financial Performance 18
Slide 19: Leading Manufacturer in Europe: Pulp
LEADING MANUFACTURER IN EUROPE Bleached Hardwood (BHKP) & Bleached Eucalyptus (BEKP) Pulp #1 in Europe #7 in the World using the best cellulosic fiber in the world – Eucalyptus Globulus European BHKP (Navigator, ENCE, Altri, Iberpapel & Smurfit Kappa – purely BEKP) Main players (Excluding Russian Mi
Slide 20: Bleached Eucalyptus Kraft Pulp (BEKP)
BLEACHED EUCALYPTUS KRAFT PULP (BEKP) European Leader Focused on Value Added Segments Pulp Sales 350-400 Decor & 25 % 70 % kt Specialities Of European Suppliers** In NVG mix 56% 70% European Sales*** Navigator European Industry Market Share* 24% BEKP 15% 25% World Europe 5% 5% 1.3 2.6 % % Tissue Dec
Slide 21: Paper | Pulp | Energy & Tissue
A BIOINDUSTRY ON THE RIGHT SIDE OF THE FUTURE 01-Solid & Resilient Business Model 02-Paper l Pulp l Energy & Tissue 03-New Business Opportunities 04-Sustainability at the Core 05-Financial Performance 21
Slide 22: Total Energy Capacity of 381 MW
TOTAL ENERGY CAPACITY OF 381 MW 76% of electricity production from renewable sources New investments will boost capacity to 430 MW by the end of 2025 Production: circa 3% of total (Portugal); 4% of all RE and over 37% of biomass based COGENERATION 344 MW BIOMASS 25 MW PHOTOVOLTAIC 12 MWp BIOMASS BOI
Slide 23: Paper | Pulp | Energy & Tissue
A BIOINDUSTRY ON THE RIGHT SIDE OF THE FUTURE 01-Solid & Resilient Business Model 02-Paper l Pulp l Energy & Tissue 03-New Business Opportunities 04-Sustainability at the Core 05-Financial Performance 23
Slide 24: Tissue World Trends
TISSUE WORLD TRENDS Sustainable Market Demand Global Tissue Market Growth World Tissue Demand by Region – 2024e RoW 9% N. America 2008-2023 (CAGR) 2.9% Other Asia 20% 12% 2024e (YoY) 2.3% 2023-2028e (CAGR) 2.2% Europe China 21% 25% L. America Russia & Oth. EE 11% 2% Market Demand (Mt) European Marke
Slide 25: Leading Manufacturer in Portugal
LEADING MANUFACTURER IN PORTUGAL Tissue diversification - Strong strategic rational #1 P O R T U G A L #2 I B E R I A 1 #4 U K 2 #8 E U R O P E 3 DEVELOPMENT AXES OF NAVIGATOR'S COMMERCIAL STRATEGY TISSUE CAPACITY CONSUMER TISSUE IN UK 2 (M€) FOR THE TISSUE SECTOR: KT REELS CONVERTING UK - 1314 Vert
Slide 26: Tissue Business
TISSUE BUSINESS Sales soared 5.25x in just 8 years ▪ Two 1st places in Consumer Awards: Aquactive (kitchen towel with water-activated soap Market Share - 2022) & Air Sense (Tissue embedded with fragrance - 2023) Portugal UK 4 Spain France ▪ Innovation & Brand are gaining momentum: ▪ The focus on inn
Slide 27: New Business Opportunities
A BIOINDUSTRY ON THE RIGHT SIDE OF THE FUTURE 01-Solid & Resilient Business Model 02-Paper l Pulp l Energy & Tissue 03-New Business Opportunities 04-Sustainability at the Core 05-Financial Performance 27
Slide 28: Business Strategy | Diversification
BUSINESS STRATEGY l DIVERSIFICATION Reinforce the core business and focus on growth +++ Tissue ✓ M&A and /or Organic E-fuels ✓ Biogenic CO2 ✓ e-Methanol ✓ e-SAFs Packaging CAPEX ✓ Flexible ✓ Cupstock ✓ Kraftliner ✓ Molded Pulp Energy ✓ Efficiency Energy Biomaterials ✓ Batteries ✓ Hygiene ✓ Solar / W
Slide 29: Research and Innovation Strategy
RESEARCH AND INNOVATION STRATEGY New cellulosic bioproducts, biomaterials, biochemicals, biofuels and e-fuels RAIZ – Forest and Paper Research Institute, the R&D centre of The Navigator Company. 92 researchers, 24 with PhD. Trained 25 new PhDs in the last 5 years. National Top 10 on patent applicati
Slide 30: Tissue Business Strategic Roadmap
TISSUE BUSINESS STRATEGIC ROADMAP Consolidation and growth in other geographies 3rd PHASE 2nd PHASE 2024e -2025e 2022-23 ✓ ? Entry into other geographies 1st PHASE Consolidation and increased scale Reinforcement of M&A in Europe 2015-22 ✓ in the Iberian market with a view to leveraging the Stren
Slide 31: Tissue – Accrol Acquisition
TISSUE – ACCROL ACQUISITION In the 1st half of 2024, Navigator launched an Offer and completed the acquisition Blackburn Site Ejea Mills of Accrol, a leading independent converter in the UK's Consumer Tissue market Aveiro Mills Strategic Location Vila Velha de Ródão Mills ▪ Reinforcing our presence
Slide 32: Renewable Energy and Efficiency
RENEWABLE ENERGY AND EFFICIENCY By the end of 2024, leading player of solar PV capacity for self-consumption ▪ In 2023, we started the construction of the new self-consumption photovoltaic plants at the Figueira da Foz, Aveiro and Vila Velha de Ródão industrial sites, which will increase the total i
Slide 33: Packaging - From Fossil to Forest
PACKAGING - From Fossil to Forest Fighting single-use plastic with forest-based renewable biomaterials Innovative use of Eucalyptus Globulus fibre for pulp and packaging production ▪ gKRAFT brand has won market recognition and continues to evolve: ▪ +230 active clients ▪ 30 countries ▪ development o
Slide 34: Packaging – Moulded Pulp
PACKAGING – MOULDED PULP Focus on Sustainability, Innovation and Business Transformation AVEIRO SITE Navigator Mill gKRAFT Bioshield designed to substitute single use plastic and aluminum packaging: ❖ The largest in the world using eucalyptus globulus ❖ The first vertically integrated in the south o
Slide 35: Eucalyptus Based Biofuels & e-Fuels
EUCALYPTUS BASED BIOFUELS & e-FUELS Portugal may become a synthetic fuels powerhouse based on P&P industry BioFUELS With a medium-long term view, Navigator is looking into investing in green fuels, both biofuels (medium term) and Potential Potential e-fuels or synthetic fuels (medium-long term). bio
Slide 36: Other Bioproducts from Eucalyptus Globulus
OTHER BIOPRODUCTS FROM EUCALYPTUS GLOBULUS Alternatives to fossil-based products New Eucalyptus globulus based products on our New cellulosic bioproducts innovation pipeline, Cellulose-based thermoplastic biocomposites currently under techno- › plastics industry, automotive industry, packaging, text
Slide 37: Mozambique Project
MOZAMBIQUE PROJECT The work with the Mozambican government and the IFC is continuing, focusing on Phase 1 (export of wood chips). The construction of the 1st phase of the Port of Macuse would be a major step in the development of the project. In the meantime, in addition to the export of 285,000 m3
Slide 38: Sustainability at the Core
A BIOINDUSTRY ON THE RIGHT SIDE OF THE FUTURE 01-Solid & Resilient Business Model 02-Paper l Pulp l Energy & Tissue 03-New Business Opportunities 04-Sustainability at the Core 05-Financial Performance 38
Slide 39: A Responsible Business Agenda
A BIOINDUSTRY ON THE RIGHT SIDE OF THE FUTURE 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 For Climate ecological footprint and optimizing PEOPLE, THEIR ef
Slide 40: Our Impacts
OUR IMPACTS A BIOINDUSTRY ON THE RIGHT SIDE OF THE FUTURE ENVIRONMENTAL SOCIAL GOVERNANCE CLIMATE ACTION & BIODIVERSITY WORKFORCE BOARD & ETHICS 3 ▪ 6.2Mt CO2 accumulated stock in our forests ▪ 30,000 Direct, indirect and induced jobs ▪ Executive Compensation Disclosure ▪ 41% Reduction in direct CO2
Slide 41: Creating Sustainable Value
Creating Sustainable Value “Create value and business opportunities with responsibility, applying ethical principles and demonstrating integrity and transparency in everything we do” Our contribution to UN’s Sustainable RECOGNITION PARTNERSHIPS Development Goals Core Supportive Local 41
Slide 42: Climate Change
CLIMATE CHANGE We embrace an active role in the low-carbon economy in line with current climate science In 2026 more than 50% reduction of fossil CO2 emissions COMMITMENT 2035 Invest in low carbon solutions leading to carbon neutrality Cut direct CO2 emissions (EU-ETS) from industrial GOALS complexe
Slide 43: Biodiversity Conservation
BIODIVERSITY CONSERVATION as the key to environmentally responsible production and sustainable forest management Annual Field data Importance for Conservation Restoration monitoring collection conservation measures CONSERVATION STRATEGY 108k hectares ▪ Assessment of natural values and potential impa
Slide 44: Resource Use and Circular Economy
RESOURCE USE AND CIRCULAR ECONOMY We position ourselves as a player in the transition to a circular low-carbon bioeconomy INITIATIVES TO PROMOTE THE CIRCULAR ECONOMY: ▪ INVESTMENT IN BIOPRODUCTS 7% <0.015% ▪ Agenda From Fossil to Forest Solid waste of the Hazardous waste of the ▪ PROCESS OPTIMIZATIO
Slide 45: Investing in People & Talent Management
For SOCIETY INVESTING IN PEOPLE & TALENT MANAGEMENT 38 different nationalities, 24 based in WORKFORCE REJUVENATION (2014-2023) Portugal Average age of 43 years old The increased diversity of our teams reinforces innovation, with new ways of thinking and interacting ✓ 13% < 30 years old ✓ 62% between
Slide 46: Relations with Communities
RELATIONS WITH COMMUNITIES Securing > $7 Million invested family's welfare In the Community Delivering food security and Development Program generating income to around 7,000 (since 2015) families 38 new water boreholes >250 employees* And fixing some of the existing, making potable water available
Slide 47: Financial Performance
A BIOINDUSTRY ON THE RIGHT SIDE OF THE FUTURE 01-Solid & Resilient Business Model 02-Paper l Pulp l Energy & Tissue 03-New Business Opportunities 04-Sustainability at the Core 05-Financial Performance 47
Slide 48: Financial and Operational Highlights
FINANCIAL AND OPERATIONAL HIGHLIGHTS Turnover (M€) EBITDA (M€) EBITDA Margin (%) Operational Cash Flow (M€) 2 465 736 30% 555 1 953 502 27% 26% 410 1 692 1 688 455 1 385 1 596 372 355 22% 21% 22% 377 307 297 286 254 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022
Slide 49: Q2/H1 2024 Financial Highlights
Q2/H1 2024 FINANCIAL HIGHLIGHTS Strategic Growth and Market Leadership In millions € H1 2024 H1 2023 YoY Q2 2024 Q1 2024 QoQ ▪ Second highest 1st half results ever, Turnover 1 066 980 9% 529 536 -1% with EBITDA at € 299 million and an EBITDA margin of 28%. EBITDA 299 253 18% 165 133 24% ▪ Net Profit
Slide 50: Quarter Highlights
QUARTER HIGHLIGHTS Stable quarterly results Turnover (M €) EBITDA (M€) & EBITDA Operational Cash ▪ Positive price evolution across all margin (%) Flow (M €) 536 529 165 segments: Pulp, Paper, Packaging and 501 478 481 493 131 122 124 125 133 132 103 100 97 110 100 Tissue 31% 26% 26% 26% 25% 25% ▪ Pa
Slide 51: Maturity and Liquidity
MATURITY AND LIQUIDITY 93% of the debt is at a fixed rate, allowing for low financing costs in a context of rising interest rates Total debt : € 726 million Average Maturity : 3 years 530 M ▪ Well-balanced debt maturity Sustainable ▪ New long-term debt: ▪ 5, 6 and 7 years; 252 M 253 M ▪ €300 million
Slide 52: Historical Dividend Payment and Share Price Evolution
HISTORICAL DIVIDEND PAYMENT AND SHARE PRICE EVOLUTION 6€ 5€ 4€ 3€ 2€ 1€ Year Adjusted Total amount paid Dividend per (payment) dividend yield (million euros) share (€) January 2019 – December 2023 2019 6.6% 200.0 0.279 TSR*: 47.4% 2020 9.5% 198.2 0.279 2021 6.5% 149.6 0.210 TSR annualized: 8.1% 2022
Slide 53: Iberian Forum ODDO BHF
IBERIAN FORUM ODDO BHF OCTOBER 2024 53