Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — JP Morgan Small/Mid Cap CEO Conference 2024
59 slides from Navigator Company Sa's conference presentation, Mar 13, 2024
Slide 1: Investor Presentation JP Morgan Small/Mid Cap CEO Conference
INVESTOR PRESENTATION JP MORGAN Small/Mid Cap CEO Conference March 13, 2024 L o n1d o n
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: Creating Value, Planting the Future
CREATING VALUE, PLANTING THE FUTURE OUR PURPOSE Trust We believe in people, we welcome everyone’s contribution, we respect their identity, promoting development, cooperation and communication We are guided by principles of transparency, ethics and respect in our dealings Integrity amongst ourselves
Slide 4: The Navigator Company
THE NAVIGATOR COMPANY “Much More Than A Conventional Pure Pulp Or Graphical Paper Player” An integrated producer of forestry, pulp, paper, tissue, sustainable packaging solutions and bioenergy, based on continuous R&D and state- of-the-art factories worldwide. Forest The company has a production cap
Slide 5: Agile Business Model
AGILE BUSINESS MODEL Proving Resilience in a Cyclical Market Energy 9% Packaging 2% (vs. 10%) (vs. 4%) Navigator stability and consistency in delivering results: ✓ operational flexibility; Tissue 15% (vs. 8%) ✓ resilient business model, anchored in a solid €1,953M diversification strategy, with diff
Slide 6: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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 & Outlook 6
Slide 7: The Navigator Company: An Integrated Producer
THE NAVIGATOR COMPANY An Integrated Producer R&D Leader in Eucalyptus PULP globulus cloning #1 Europe, #7 World 1.6 M tons of BEKP pulp TISSUE 6551 5551 k tAD 3902 #1 Portugal, #2 Iberia 165,000 tons Reels 180,000 tons Converting * FOREST 55 65 109,086 ha of forest 60 (under management) 4 70 60 k to
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 FOREST: ▪ In 2023, Navigator managed 109,086 ha of forest in Portugal and Spain1, an area in which it adopts responsible management and actively promotes the sharing of knowledge throughout the value chain, particularl
Slide 9: 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 AVEIRO • Pulp (Market) – 390,000 tAD ▪ 165 kt of Tissue Reels • Tissue – 70,000 tons reels; ▪ 180 kt of Tissue Converting 55,000 tons converting* ▪ 381 MW of Energy • En
Slide 10: Leading Manufacturer of Uncoated Printing and Writing Papers
LEADING MANUFACTURER Of Uncoated Printing and Writing Papers (UWF) in Europe Nº1 in European UWF fine paper 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 Sy
Slide 11: 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 Q4 2023 EUR UWF Cash Cost Curve, excl. Russia €/ton €/t, delivered in Paris 1100 1000 900 800 700 600 500 400 300 0% 25% 50% 75% 100% Cumul
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 has moved the Group’s product mix to the high-end market, allowing NVG to have a price premium in cutsize of 2% in 2022 and 4% in 2023. NVG market share in
Slide 13: Innovating for Growth from Fossil to Forest
AND INNOVATING FOR GROWTH FROM FOSSIL TO FOREST Packaging ▪ Flexible ▪ Cupstock ▪ Kraftliner ▪ Molded Pulp Biomaterials Tissue ▪ Hygiene ▪ M&A and/or Mozambique ▪ Personal care ▪ Organic ▪ Wood exports ▪ Cosmetics E-fuels ▪ Logs and/or chips ▪ Health Renewable Energy ▪ Biogenic CO2 and Efficiency Bi
Slide 14: Creating Value, Planting the Future
CREATING VALUE, PLANTING THE FUTURE ENVIRONMENTAL SOCIAL GOVERNANCE CLIMATE ACTION & BIODIVERSITY WORKFORCE BOARD & ETHICS ▪ 6.2Mt CO2 sequestered ▪ 30 nationalities, 24 based in Portugal ▪ Executive Compensation Disclosure ▪ 69% Certified wood ▪ 110% increase in women in top management ▪ Transparen
Slide 15: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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 & Outlook 15
Slide 16: Uncoated Printing and Writing Paper Market Demand Drivers
Uncoated Printing and Writing Paper Market Demand Drivers UWF is Universal (everywhere to everybody) and Versatile (addressing multiple applications) Paper as an alternative to Paper better promotes the Paper has competitive and plastic forest cognitive advantages over digital 16 Source: NVG Report
Slide 17: Producing a Resilient Paper Grade (UWF)
PRODUCING A RESILIENT PAPER GRADE (UWF) and Less Exposed to Digitalization 2023 Global Printing & Writing Demand for printing and writing paper (K tons) Demand Distribution 8% 49,9 49,7 49,7 49,5 49,8 49,6 48,6 8% Uncoated Woodfree 43,4 44,9 45,0 42,3 -2% Coated Woodfree CAGR 13-23 UWF 20% 64% Coate
Slide 18: UWF Paper Demand
UWF PAPER DEMAND Mature Markets VS Developing World Mt World 49.0 51.6 55.1 51.4 53.8 53.7 52.9 52.7 52.1 47.9 45.3 2003-2010 2010-2022 2023-2028 2023 YoY CAGR CAGR CAGR* World 1.2% -0.9% -5.6% -0.7% RoW 3.9% 0.1% -1.5% -0.1% North America -4.5% -3.8% -20.5% -1.8% 40.3 39.3 39.0 39.9 Western Europe
Slide 19: European UWF Demand Decline Followed by Capacity Reduction
EUROPEAN UWF DEMAND DECLINE FOLLOWED BY CAPACITY REDUCTION -3.2 Mt 2000-23 UWF capacity CAGR -2.2% ▪ >50% UWF demand destruction in XXI century occured in the 2007-09 WE crisis, less harmful to OP than Graphic 8.5 Capacity 8.3 8.1 UWF (more dependant on Invoicing, 7.6 7.6 7.1 Advert, and P
Slide 20: Leading Market Player in UWF Segment
LEADING MARKET PLAYER IN UWF SEGMENT 2023 Paper Sales Distribution On average, for every 3 office 5% 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 and Oceania NVG Share of European Exports NVG M
Slide 21: 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
Slide 22: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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 & Outlook 22
Slide 23: Bleached Eucalyptus Kraft Pulp (BEKP)
BLEACHED EUCALYPTUS KRAFT PULP (BEKP) European Leader Focused on Value Added Segments Pulp Sales 350-400 k tons Decor & 25 % 70 % Specialities Of European Suppliers** In NVG mix 56% 70% European Sales*** Navigator European Industry Market Share*BEKP 24% 25% World Europe 15% 5% 5% 1.3 2.6 % % Tissue
Slide 24: Strong Pulp Demand
STRONG PULP DEMAND BEKP Leading Position World China M tAD 2006 2019 2023 M tAD 2006 2019 2023 L5Y (Mt/y) Global BEKP Demand Outlook SW 22.1 26.4 24.8 SW 2.8 9.2 9.2 0.3 CAGR 22-27 BEK 11.1 25.5 30.5 BEK 1.7 10.3 13.9 1.0 World 3.1% Other 14.9 12.5 12.8 Other 2.4 4.5 5.8 0.4 Total 48.1 64.4 68.1 Tot
Slide 25: Pulp & Paper Prices
PULP & PAPER PRICES European market paper price – A4 B-Copy and BHKP (€) 1460 PIX A4 COPY-B PIX BHKP EUROPE EUR 1380 1300 1220 ▪ BHKP pulp price index in Europe down 27% to 1,008 1140 USD/ton by the end of the year, currently at 1,141 1060 USD/ton1. Eur/ton 980 ▪ Pulp price fell to their lowest leve
Slide 26: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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 & Outlook 26
Slide 27: With 76% of Electricity Generation from Renewable Sources
WITH 76% OF ELECTRICITY GENERATION FROM RENEWABLE SOURCES Total Capacity 381 MW Cogeneration Biomass Solar Photovoltaic (Biomass+Natural Gas) 344 MW 25 MW 12 MWp 4 large solar photovoltaic power plants in self consumption regime 6 high 2 biomass efficiency power + Herdade de cogeneration Espirra (11
Slide 28: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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 & Outlook 28
Slide 29: Tissue World Trends
TISSUE WORLD TRENDS Sustainable Market Demand Global Tissue Market Growth Mt European Market Demand 10 2008-2022 (CAGR) 2.9% 9 2022-2027 (CAGR) 2.1% 8 7 6 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2027 Tissue Demand per capita – 2022 and 2027e World Tissue Demand by Region - 2023e (kg per ca
Slide 30: Tissue Business
TISSUE BUSINESS << Strong Strategic Rational Navigator strengthened its position as the 2nd largest Iberian producer of tissue, with an annual production capacity that now stands at 165,000 tons. DEVELOPMENT AXES OF NAVIGATOR'S COMMERCIAL STRATEGY FOR THE TISSUE SECTOR: Ejea Capacity Vertical Integr
Slide 31: Tissue Business: Growth Strategy
TISSUE BUSINESS Growth Strategy ▪ Two 1st places in Consumer Awards : Aquactive (kitchen towel with water-activated soap - 2022) & Air Sense (Tissue embedded with fragrance - 2023) Market Share ▪ Innovation & Brand are gaining momentum: Spain France Portugal ▪ The focus on innovation and differentia
Slide 32: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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 & Outlook 32
Slide 33: Innovating for Growth from Fossil to Forest
INNOVATING FOR GROWTH FROM FOSSIL TO FOREST Packaging ▪ Flexible ▪ Cupstock ▪ Kraftliner ▪ Molded Pulp Biomaterials Tissue ▪ Hygiene ▪ M&A and/or Mozambique ▪ Personal care ▪ Organic ▪ Wood exports ▪ Cosmetics E-fuels ▪ Logs and/or chips ▪ Health Renewable Energy ▪ Biogenic CO2 and Efficiency Biofue
Slide 34: Renewable Energy and Efficiency
RENEWABLE ENERGY AND EFFICIENCY ▪ In 2023, we should start of construction of the new self- consumption photovoltaic plants at the Figueira da Foz, Aveiro and Vila Velha de Ródão industrial sites, which will triple the installed capacity at the Group's sites, from the current 12 MWp to around 38 MWp
Slide 35: Tissue Business Strategic Roadmap
TISSUE BUSINESS STRATEGIC ROADMAP 3rd PHASE 2024e -2025e 2nd PHASE 2022-23 Entry into other geographies ? 1st PHASE Consolidation and increased scale Reinforcement of M&A in 2015-22 ✓ in the Iberian market Europe with a view to leveraging the group's Entry into the tissue Strengthen market leade
Slide 36: Packaging - From Fossil to Forest
PACKAGING - From Fossil to Forest ▪ gKRAFT™ brand has won market recognition and continues to evolve: ▪ +230 active clients ▪ 30 countries ▪ development of new segments FLEXIBLE PACKAGING BAGS CORRUGATED & SOLID MOLDED PULP supported by 220 market trials with 100 (packs, pouches, food take-away, (re
Slide 37: Biofuels & eFuels
BIOFUELS & eFUELS 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). bioethanol SAF 20 kt/year Residual forest 25 kt/a biomass and 1. Biofuels, projects are bein
Slide 38: Mozambique Project
MOZAMBIQUE PROJECT Since the MoU signed in 2018, the work with the Mozambican Government has continued focusing on Phase 1 (export of woodchips). Meanwhile, Thai Mozambique Logística obtained the financing for the construction of the 1st phase Port of Macuse. The port’s construction would be a major
Slide 39: Research & Development
RESEARCH & DEVELOPMENT Focused on Building the Future Bio-economy Research combined with innovation and the ability to Paper industrialize knowledge , are essential elements of The Pulp Tissue Navigator Company's identity. Fibers Market pulp ▪ In 2023 RAIZ once again earned a prominent place on the
Slide 40: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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 & Outlook 40
Slide 41: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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 efficiency i
Slide 42: 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 Our contribution to UN’s Sustainable OUR IMPACTS Development Goals CORE: We generate a positive impact on these SDGs fr
Slide 43: The Forest at the Heart of Everything We Do
THE FOREST AT THE HEART OF EVERYTHING WE DO A Natural and Renewable Resource 6.2 Million t CO eq 1,000 Species Flora of 253 Species of 2 Fauna > 8 Million RAIZ Plants produced at Forest and Paper Portuguese Research Institute Nurseries Improve forestry management Increase eucalyptus Yields 109.086 h
Slide 44: Addressing Climate Change
ADDRESSING CLIMATE CHANGE By becoming a carbon neutral company The Navigator Company is committed to achieving Carbon Neutrality at its industrial sites by 2035, 15 years ahead of EU schedule, by investing more than € 200 million. SBTi praised Navigator’s "ambitious targets", a contribution to achie
Slide 45: 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 107k hectares ▪ Assessment of natural values and potential impa
Slide 46: Energy – Solar Photovoltaic
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. In 2023 and 2024 Navigator will triple its solar energy capacity, in a self con
Slide 47: Circular Economy
CIRCULAR ECONOMY We position ourselves as a player in the transition to a circular low-carbon bioeconomy 35.6 k ton Initiatives to promote the circular economy: ❖ INVESTMENT IN BIOPRODUCTS ❖ Agenda From Fossil to Forest 2023: Reclaimed sand (by- ❖ PROCESS OPTIMIZATION AND IMPROVEMENT ❖ PRUA Project:
Slide 48: Investing in People & Talent Management
For SOCIETY INVESTING IN PEOPLE & TALENT MANAGEMENT WORKFORCE REJUVENATION (2014-2023) Headcount 3,466 Average age of 43 years old Figueira da Foz ✓ 13% < 30 years old 1 047 ✓ 62% between 30 – 50 years old ✓ 25% > 50 years old Aveiro 590 TRAINING & LEARNING CENTER (2023) Setúbal Training Hours: ✓ 78
Slide 49: 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 50: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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 & Outlook 50
Slide 51: FY 2023 Financial Highlights
FY 2023 FINANCIAL HIGHLIGHTS The second-best result in the company's history In millions € FY 2023 FY 2022 FY 23/FY 22 2018-22 FY 23/Avg L5Y ▪ Second-best EBITDA: € 502 million, 26% EBITDA margin. Turnover 1,953 2,465 -21% 1,765 +11% ▪ Second-best Turnover: €1,953 million. EBITDA 502 736 -32% 441 +1
Slide 52: Main Financial and Operational Highlights
MAIN 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
Slide 53: Financial Indicators
FINANCIAL INDICATORS << Capex M€ 187 Net Debt & Net Debt/EBITDA* ESG ▪ Value-added capex Structural, Expansion, Maintenance and Recurring 2.38 ▪ 57% ESG, aimed at decarbonization 106 113 1.92 1.68 targets and efficiency gains. 81 80 39 1.5 25 14 0.98 0.52 ▪ Net Debt/EBITDA below 1x, with: 66 74 81 5
Slide 54: Maturity and Liquidity
MATURITY AND LIQUIDITY ▪ Well-balanced debt maturities ▪ 46% of total debt is linked to sustainability target ▪ New long-term debt agreement with EIB: ▪ 115 million euros ▪ Maturities of up to 12 years ▪ Use of Proceeds: support the project to build and operate the high-efficiency recovery boiler, a
Slide 55: 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 share (payment) dividend yield (million euros) (€) January 2019 – December 2023 2019 6.6% 200.0 0.279 TSR*: 47.4% 2020 9.5% 198.2 0.279 TSR annualized: 8.1% 2021 6.5% 149.6 0.210 2022
Slide 56: Outlook
OUTLOOK OUTLOOK The current geopolitical tensions and the electoral super cycle increase volatility and reduce visibility PULP: PAPER: TISSUE: ▪ For Q1 2024, pulp market is expected to ▪ 2024 began with solid order books, a positive ▪ By 2024, demand is expected to grow by recover gradually (both pr
Slide 57: Our Brands: Paper
OUR BRANDS OUR BRANDS PAPER 57
Slide 58: Our Brands: Tissue
OUR BRANDS OUR BRANDS TISSUE 58
Slide 59: Investor Presentation JP Morgan
INVESTOR PRESENTATION JP MORGAN Small/Mid Cap CEO Conference March 13, 2024 L o n59d o n
The Navigator Company — JP Morgan Small/Mid Cap CEO Conference 2024 on 6ix