Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — H1 2023 Earnings Presentation
26 slides from Navigator Company Sa's earnings presentation, Jul 25, 2023
Slide 1: Q2/H1 2023 Results Presentation
Q2/H1 2023 Results Presentation July 25th 2023
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.. This presentation has been prepared by The Navigator Company S.A. for information purposes o
Slide 3: Participation
PARTICIPATION << António Redondo Dorival Almeida Executive Directors Fernando Araújo João Lé Nuno Santos Investor Relations Ana Canha 2
Slide 4: Main Highlights
Q2/H1 2023 RESULTS << PRESENTATION 01 02 03 Market & Main Group Outlook Highlights Performance 33
Slide 5: Q2/H1 2023 | Solid Results Despite Challenging Market Conditions
Q2/H1 2023 | SOLID RESULTS DESPITE << CHALLENGING MARKET CONDITIONS ▪ Second best result for a first half: Extremely difficult market with pulp prices falling and UWF and Packaging market-driven weak apparent demand; ▪ Tissue segment with strong demand for finished goods with price resilience and ha
Slide 6: Q2/H1 Financial Highlights
Q2/H1 FINANCIAL << HIGHLIGHTS Second all-time high results for a 1st half with EBITDA of € 253 million and an EBITDA margin of 25.8%. Solid financial position: net debt/EBITDA ratio at 0.89x In millions € H1 2023 H1 2022 YoY Q2 2023 Q1 2023 QoQ Turnover 979.5 1142.1 -14.2% 478.3 501.2 -4.6% EBITDA 2
Slide 7: Main Quarter Highlights
MAIN QUARTER HIGHLIGHTS << Significant decrease of UWF paper and packaging volumes, partially compensated by higher pulp volumes (more availability of pulp for sale due to lower paper and packaging integration) and strong performance on tissue finished goods. Turnover (M €) EBITDA (M €) Operational
Slide 8: EBITDA YoY Analysis
EBITDA YoY Analysis << Downward trend on Pulp market price, offset by UWF and Tissue above 2022 price levels. Decrease in UWF volumes partially compensated by higher pulp sales. -92 (-27%) 345 11 M€ 12 -36 0 253 -68 -12 R22 Price Volume Logistics Costs FX Other R23 A B C Downward trend on Pulp marke
Slide 9: EBITDA QoQ Analysis
EBITDA QoQ Analysis << Downward trend on market prices across all segments, led by PIX BHKP deterioration. Significate reduction of cash costs in all segments. -8 (-6%) M€ 131 34 4 0 122 4 2 -52 R23 Q1 Price Volume Logistics Costs FX Other R23 Q2 A B C Downward trend on market Decrease in UWF volume
Slide 10: EBITDA Q2 2022 vs Q2 2023
EBITDA Q2 2022 vs Q2 2023 << Downward trend on market prices, with Tissue presenting price resilience. Cash costs trending to Q2 2022 levels. -101 (-45%) 223 M€ -51 9 -29 -9 -2 122 -19 R22 Q2 Price Volume Logistics Costs FX Other R23 Q2 A B C Downward trend on market Decrease in UWF volumes (-36%) F
Slide 11: Market & Group Performance
Q2/H1 2023 RESULTS << PRESENTATION 01 02 03 Market & Main Group Outlook Highlights Performance 10 10
Slide 12: Pulp & Paper Prices
PULP & PAPER PRICES << BHKP pulp price index in Europe down 26% to 942 USD/ton by the end of the quarter, currently at 852 USD/ton1. A4 B-copy prices down 8% to 1,204 EUR/ton by the end of the quarter, currently at 1,181 EUR/ton1. European market paper price – A4 B-Copy and BHKP (€) 1460 A4 B-copy B
Slide 13: Update on the Pulp Market
UPDATE ON THE PULP MARKET << ▪ BHKP in Europe | 942 USD/t1 (-32% vs start of the year). PRICE ▪ BHKP in China | 506 USD/t1 (-38% vs start of the year). ▪ H1 2023 European BHKP average prices (EUR/t) 0.5% higher YoY. ▪ Global demand fell in the quarter (YoY): -3.0% bleached chemical pulp (BCP), -1.5%
Slide 14: UWF Market Conditions
UWF MARKET CONDITIONS << • Index price for A4 paper at 1,204 EUR/t1 (-10% vs beginning of the year) PRICE • Average prices during H1 2023 up to 1,252 EUR/t (+15% vs H1 2022) • At a global level sharp drop in apparent demand (-10%), UWF paper continues to be the most resilient (-5%), CWF paper (-17%)
Slide 15: Navigator Paper Performance
NAVIGATOR PAPER PERFORMANCE << ▪ Navigator´s market-share among its European competitors reached high levels in 2022. In the 1st half of 2023, despite challenging market conditions, Navigator was able to maintain the excellent levels of 2022: in Europe (+0.4 pp, YoY) and worldwide (-0.3 pp). ▪ Opera
Slide 16: Tissue Business
TISSUE BUSINESS << Demand for finished products remained strong. Successful integration of the new tissue mill, now Navigator Tissue Ejea, in Q2, has diversified the customer base and expanded its geographic market, beyond the Iberian Peninsula. SALES1 2 H1 2023 (vs H1 2022) Type Segment2 Geography3
Slide 17: From Fossil to Forest
FROM FOSSIL TO FOREST << The exploration of opportunities in Packaging continues to evolve. gKRAFT™ brand has won market recognition, with more than 230 active clients, in 30 countries, since starting up in 2021. The new eucalyptus- based molded pulp products project, designed to substitute single u
Slide 18: Capex
CAPEX << Strong capex investment, of which 62%, approximately € 69 million, classified as environmental or sustainability investment. CAPEX M€ 113 72 41 CAPEX YtD 23 ESG & Maintenance & Expansion recurring capex 17
Slide 19: Free Cash Flow
FREE CASH FLOW << The approximately 10 million of free cash flow reflects the impact of the tissue acquisition, the capex acceleration, the additional payment of € 74 million in corporate tax and productivity bonuses (owing to the exceptional 2022 results). -193.1 (-95%) M€ 202.8 87.2 9.7 -10.8 -197
Slide 20: Net Debt
NET DEBT << Net debt stands at € 573 million, reflecting tissue acquisition in the 1st quarter, the distribution of € 200 million in dividends in the 2nd quarter and the additional tax outflows. The ratio of Net Debt/EBITDA ratio stood at 0.89x, further consolidating the financial strength of the co
Slide 21: Maturity and Liquidity
MATURITY AND LIQUIDITY << Well-balanced debt maturities, 94% of total debt issued on a fixed-rate basis and close to 40% of total debt issued on a sustainability basis. Debt maturity profile Total debt: € 670 million Average Interest Rate Average Maturity: 3 years (Jun-23) 243 1.9% 262 Interest Rate
Slide 22: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY ON THE RIGHT SIDE OF THE << FUTURE ENVIRONMENT SOCIAL GOVERNANCE Climate Action Workforce Board & Ethics Recognized & Biodiversity ▪ 1,857 Employees under Occupational Health ▪ Executive Compensation Leader in ▪ Science-based targets approved by SBTi ▪ 185.2 M€ Employee pay and benefit
Slide 23: Takeaways
<< TAKEAWAYS ▪ Solid results despite challenging market conditions ▪ Successfully managing market volatility with flexibility, product mix and reinforced cost control measures ▪ Significant reduction in managed cash costs: QoQ and H1 23 vs H2 22; ▪ Delivering on our diversification plan: ▪ Tissue –
Slide 24: Outlook
Q2/H1 2023 RESULTS << PRESENTATION 01 02 03 Market & Main Group Outlook Highlights Performance 23 23
Slide 25: Outlook
<< OUTLOOK The persisting challenging market conditions and lack of visibility will require agility. The Company's commercial strategies and focus on cost control measures, as well as its financial robustness and new business areas, will continue to prove the resilience of Navigator's business model
Slide 26: Q2/H1 2023 Results Presentation
Q2/H1 2023 Results Presentation July 25th 2023
The Navigator Company — H1 2023 Earnings Presentation on 6ix