Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — H1 2019 Earnings Presentation
26 slides from Navigator Company Sa's earnings presentation, Jul 25, 2019
Slide 1: H1 2019/Q2 2019 Results Presentation
H1 2019/Q2 2019 Results Presentation July 25th 2019
Slide 2: Participation
PARTICIPATION << João Castello Branco António Redondo Executive Directors Fernando Araújo Nuno Santos João Paulo Oliveira Investor Relations Joana Appleton 1
Slide 3: H1 2019/Q2 2019 Results Presentation Agenda
H1 2019/Q2 2019 RESULTS << PRESENTATION 01 02 03 04 Main Group Market Outlook Highlights Performance 2
Slide 4: Main Quarter Highlights
<< MAIN QUARTER HIGHLIGHTS Turnover (M €) EBITDA (without pellets) (M €) 112 115 115 435 439 432 105 102 432 422 Q2 turnover flat QoQ, but increased 2.5% vs Q1 2019, on the back of higher paper volumes and stable paper prices Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 2018 2018 2018 2019 2019 2018 2018 2018 2019
Slide 5: H1 2019 Highlights
H1 2019 HIGHLIGHTS << In millions € H1 H1 %CHANGE Increase in turnover (+4.6%) due to 2019 2018 19/18 higher paper prices and higher volumes of pulp and tissue sold. Turnover 854.1 816.9 4.6% Recurrent EBITDA declined 2.8% YoY EBITDA(without 207.0 213.0 -2.8% pressured by higher production costs Pel
Slide 6: Market
H1 2019 RESULTS PRESENTATION << 01 02 03 04 Main Group Market Outlook Highlights Performance 5
Slide 7: Pulp Prices Corrected but Remain at a High Level
PULP PRICES CORRECTED BUT REMAIN AT A HIGH LEVEL << Pulp prices have been decreasing since the end of 2018, but average price in 2019 remains above the average of the last 5 years PIX Europe USD/ton €/ton 1100 1100 1000 Av. 2017: Av. 2018: 1000 826 USD/ton 1038 USD/ton Last PIX (W29/2019): 850 USD/t
Slide 8: Pulp Market in the Last 18 Months
PULP MARKET IN THE LAST 18 MONTHS << YoY days YoY Hardwood Pulp Shipments | Producer Stocks 600 70 Trade War starts Trade War 65 400 intensifies Producer Demand 60 & stocks 200 stocks sky- CN buyers rocket getting stock up 55 back to 0 normal 50 -200 45 -400 40 -600 35 CN refrain buying and force pr
Slide 9: Update on Paper Market
UPDATE ON PAPER MARKET << Global paper demand impacted by economics and destocking Total UWF CWF UME CME YTD May -5.7% -1.5% -9.7% -9.5% -10.1% Avg L5Y -2.3% -0.3% -3.1% -4.0% -5.6% • Recent decline of P&W demand well above trend, indicating not only the effects of economic cooldown but also an over
Slide 10: Paper Prices in Stable Trend
PAPER PRICES IN STABLE TREND << Average price in 2019 above average price in the last 10 years 950 EUROPEAN MARKET PAPER PRICE – A4 B-COPY Last PIX (W29 2019): 900 904 €/ton 850 Av. YTD 2019: 912 €/ton (+6.5%) 800 EUR / Ton Av. 2018: 873 €/ton Average A4 B-COPY Av. 2016: (+9.0%) price in YTD 2019: 8
Slide 11: UWF Market Conditions
UWF MARKET CONDITIONS << PULP Hardwood pulp prices remained at high levels even after recent price correction; PRICE Positive price outlook towards the end of 2019 and in 2020 Even though cut size woodfree registered a decline in Global demand of -1.5% YTD May DEMAND 2019, UWF continues to show the
Slide 12: Growth in the Tissue Market
GROWTH IN THE TISSUE MARKET << Portugal Spain 704 679 156 151 2017 Kton 2019e 2017 Kton 2019e • In tissue business, demand continues to present interesting growth rates: 3.3% in Portugal and 3.7% in Spain (between 2017 – 2019e), leading to new production capacity in the Iberian Peninsula • UK larges
Slide 13: Group Performance
H1 2019/Q2 2019 RESULTS << PRESENTATION 01 02 03 04 Main Group Market Oultook Highlights Performance 12
Slide 14: H1 2019 Recurring EBITDA
H1 2019 Recurring EBITDA << Positive impact of paper prices in EBITDA offsets increase in costs (Energy, Wood and Fibres) -6,0 (-3%) 33 -4 -29 A B C 213 -6 207 Adj. R18 Price Volume Costs Other R19 (include bio assets and land sales) Strong positive contribution Positive volumes for pulp and tissue
Slide 15: Navigator Paper & Pulp Performance
NAVIGATOR PAPER & PULP PERFORMANCE << PAPER PERFOMANCE • UWF sales volume decreased 5% H1 2019 vs H1 2018, but increased to 4% in Q2 vs Q1. • UWF production impacted by price / volume trade-off as well as slower ramp-up of heavyweights production and the strike at PM4 in Setúbal. • Average price for
Slide 16: External Cost Factors
EXTERNAL COST FACTORS • Electricity unit cost + 15% • Natural Gas unit cost + 23% • CO2 Licenses: H1 2018: 12€/ton vs H1 2019: 24€/ton • Chemicals: • OBA (Optical Brightness Agent) – DAS price increase + 300% • Extra Iberian wood: ∆%YoY +18% • External Fiber - NBSK (€/ton): ∆%YoY +5% • EUR/USD: H1 2
Slide 17: Growth in the Tissue Business
GROWTH IN THE TISSUE BUSINESS << 45% Away-from-Home 41% Portugal Revenue by +C&C Revenue by segment geography 38% Consumer 29% Spain (2019) (2019) 17% Parent Reels 30% Extra-Iberia • Global volume of tissue sold increased to 47.2 kton (66% YoY), sustained by new capacity in Aveiro; sales volume was
Slide 18: Continuous Focus on Cost Efficiency
CONTINUOUS FOCUS ON COST EFICIENCY << M2 program estimated impact on EBITDA of € 8.1 million in H1 2019 Global 5 year target for 2016-2020: €100 million, of which €64 million already achieved in 2016, 2017 & 2018 83 new initiatives of cost reduction since the beginning of the year, with the followin
Slide 19: Capex of €68.2 Million (vs €77.2 Million)
<< CAPEX OF € 68.2 MILLION (VS 77.2 € MILLION) CAPEX M€ 68.2 50.3 8.6 6.2 3.1 CAPEX Maintenance & recurring Regulatory Capex Expansion/Development Other capex Capex* * Includes Po3 + Tissue Cacia + Heavy Weights 18
Slide 20: Free Cash Improvement
FREE CASH IMPROVEMENT << Free Cash Flow negatively impacted by capex, inventories and state reimbursements (VAT & Income tax) but improved in terms of working capital Free Cash Flow M€ 167,8 -68.2 -31.2 7.5 100.8 14.5 21.7 -11.4 Operating CAPEX Inventories Clients State & Suppliers & Other Free Cash
Slide 21: Net Debt Increased to €796 Million
NET DEBT INCREASED TO € 796 MILLION << Remunerated net debt increased € 113.4 million vs year-end 2018, after paying € 200M in dividends and acquiring € 14.2M in own shares. M€ 796 738 742 740 732 693 683 677 641 617 559 1.8 1.9 1.8 1.7 1.7 1.6 1.6 1.6 1.5 1.5 1.3 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4
Slide 22: Extension of Debt Maturity
EXTENSION OF DEBT MATURITY During H1 2019, Navigator renegotiated all debt maturing in 2020, extending average tenure above 4 years at the same average cost of debt Debt maturity profile Current Average Cost of Debt (June 2019): Total debt: € 915 million Average maturity: 4.1 years 1.60% 293.3 226.5
Slide 23: Outlook
H1 2019/Q2 2019 RESULTS << PRESENTATION 01 02 03 04 Main Group Market Outlook Highlights Performance 22
Slide 24: Outlook & Challenges for H2 2019
Geopolitical instability and trade tensions, Outlook & hampering economic growth remain a concern; exogenous costs factors also Challenges for remain a concern H2 2019 Focus on cost efficiency measures – M2 continues and launch of New ZBB, focused on fixed costs to be implemented in 2020 PULP PAPER
Slide 25: 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 26: H1 2019/Q2 2019 Results Presentation
H1 2019/Q2 2019 Results Presentation July 25th 2019
The Navigator Company — H1 2019 Earnings Presentation on 6ix