Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — Q4 2020 Earnings Presentation
29 slides from Navigator Company Sa's earnings presentation, Jan 28, 2021
Slide 1: Q4 2020 Results Presentation
Q4 2020 Results Presentation January 28th 2021
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 Adriano Silveira Executive Directors Fernando Araújo João Lé João Paulo Oliveira Nuno Santos Investor Relations Joana Appleton 2
Slide 4: Main Highlights
Q4 2020 RESULTS PRESENTATION << 01 02 03 Market & Main Group Outlook Highlights Performance 3
Slide 5: Q4 2020 – Positive trend continued
Q4 2020 – Positive trend continued << • Consumption of UWF paper continued to improve during Q4, in spite of the new lockdown measures implemented. Demand of UWF in Europe fell 7% in Q4 (vs 10% in Q3 & 28% in Q2). UWF performed better than other grades. • Since July, Navigator´s paper machines have
Slide 6: 2020 Financial Highlights
2020 Financial Highlights << In an extremely adverse year, Navigator was able to adjust quickly to market changes and took strong action to reduce costs, proving to have a flexible and resilient business model Turnover declined 18% as compared to the FY FY Change Q4 Q3 Change previous year, on the b
Slide 7: Main quarter highlights
Main quarter highlights << Operational Cash Turnover (M €) EBITDA (M €) After a strong start of the year, Flow (M €) Navigator adjusted quickly to the decline in UWF sales in Q2 with a 414 406 348 341 88 significant increase in pulp sales and 290 72 70 75 71 66 68 52 59 50 solid tissue volumes In Q3
Slide 8: EBITDA Analysis - Q4 2020 vs Q3 2020
EBITDA Analysis - Q42020 vs Q32020 << Q4 EBITDA sustains the upturn trend in demand outlook after Q2 bottom, despite current price pressure in UWF and a continuous effort on the cost side +5 (+7%) 20 75 70 -4 1 -12 UWF UWF External fibers Pulp Pulp Wood Tissue Tissue Energy Fixed costs R20 Q3 Price
Slide 9: EBITDA Analysis - Q4 2020 vs Q4 2019
EBITDA Analysis - Q42020 vs Q42019 << EBITDA also evolved positively comparing with last year Q4 as the impact of significant cost savings outpaced the downward trend on prices +3 (+4%) 52 75 72 -44 -1 -4 UWF UWF External fibers Chemicals Pulp Pulp Wood Fixed costs Tissue Tissue Energy R19 Q4 Price
Slide 10: EBITDA Analysis - 2020 vs 2019
EBITDA Analysis - 2020 vs 2019 << Strong effort on variable and fixed cost control has partially offset the exceptionally unfavorable context of Pulp and Paper markets this year -87 (-23%) 372 -170 13 286 107 -36 UWF UWF External fibers Pulp Pulp Wood Packaging Tissue Tissue Chemicals Fixed costs R1
Slide 11: Market & Group Performance
Q3 2020 RESULTS PRESENTATION << 01 02 03 Market & Main Group Outlook Highlights Performance 10
Slide 12: Pulp & Paper Prices in 2020
PULP & PAPER PRICES IN 2020 << Net pulp prices in 2020 reached the lowest point of this century, a consequence of the low levels of prices in USD, the increasing trend of contractual discounts and the devaluation of the USD vs the Euro which significantly impacted European pulp producers margins EUR
Slide 13: Update on the Pulp Market
UPDATE ON THE PULP MARKET • Global Hardwood pulp demand grew +8% YTD Nov. 2020 with significant increase from China (+16%) and in spite of a decline in Europe • Producers short fiber stocks further declined during 2020 (following the trend started at H2/2019) to reach a low level of 37 days at the e
Slide 14: UWF Market Conditions 1/2
UWF MARKET CONDITIONS 1/2 << • Global demand for P&W declined 16% YTD Nov., with UWF performing better than other grades: -13% vs -17% in coated and -21% in mechanical papers; DEMAND • UWF continued to recover in Q4 in Europe: decline of 7% in Q4 (vs -10% in Q3, -28% in Q2); in the US, demand recove
Slide 15: UWF Market Conditions 2/2
UWF MARKET CONDITIONS 2/2 << YoY evolution of European Mills Order Entry Source: Euro-Graph UWF Fine Papers CWF • Less severe impact from Covid 2nd wave on European Mills’ order entry vs 1st wave, allowing for mills to run at near normal levels; • The recovery of UWF demand in Europe continued throu
Slide 16: Navigator Paper & Pulp Performance
NAVIGATOR PAPER & PULP PERFORMANCE << PAPER PERFORMANCE • UWF sales volume increased 2.4% in Q4 from Q3 to 343 ktons, with strong performance in Europe; from Q2 to Q4 UWF volumes increased 148%; Full year sales totalled 1 276 kons -12% YoY. • In Europe, the average selling price for Cut-Size evolved
Slide 17: Record Performance in Tissue
RECORD PERFORMANCE IN TISSUE << Demand for tissue products was very resilient, going up 1.8% in Europe in spite of the economic downturn 44% Consumer (At-Home) 37% Portugal (vs. 37% FY 2019) (vs. 40% FY 2019) Revenue by Revenue by segment 39% Away-from-Home +C&C geography 29% Spain (vs. 40% FY 2019)
Slide 18: Capex of €81 Million in 2020
CAPEX OF € 81 MILLION IN 2020 << (VS € 158 Million in 2019) Capex during 2020 included maintenance and environment: 22M€ for the new biomass boiler in Figueira da Foz and around € 17 million on projects to recondition assets, with two projects at the Aveiro mill: the new chip pile and the revamping
Slide 19: Roadmap to Carbon Neutrality by 2035
ROADMAP TO CARBON NEUTRALITY BY 2035 << • 86% reduction of CO2 emissions, approximately 667 ktCO2/ from 2018 until 2035 ✔ 1st Step already complete • Global investment of 154 million € New Biomass Boiler at F. Foz Mill • Total Capex of € 55 million CO2 Expected Emissions • 30% reduction in CO2 86% e
Slide 20: Strong FCF Generation in Q4
STRONG FCF GENERATION IN Q4 << Strong generation of Free Cash Flow was maintained throughout Q4 (+63.1 M€) comparing favorably with FCF of € 56 million in Q3 2020 and € 61 million in Q4 2019; reduced capex and efficient management of working capital, namely strong reduction in inventories M€ -5,1 (-
Slide 21: €234 M of Free Cash Flow
234 M€ OF FREE CASH FLOW << Very strong Free Cash Flow of € 234 million, comparing favorably with FCF of € 186 million in 2019; efficient management of working capital, with both strong cash conversion of clients receivables and reduction of inventories M€ -20,8 (-8%) 254,3 29,9 22,5 233,5 41,1 -31,
Slide 22: Net Debt Reduced to €680 Million
NET DEBT REDUCED TO € 680 MILLION << (vs € 715 M in Dec.2019 ) Net debt declined by € 35 M* vs year-end 2019, after the Group proceeded to the distribution of approximately € 198 million in reserves to shareholders 796 776 800 M€ 740 732 700 644 680 693 715 683 677 2,4 2,3 2,3 2,3 559 1,9 1,9 1,7 1,
Slide 23: Strong Financial Activity in 2020
STRONG FINANCIAL ACTIVITY IN 2020 << After securing sufficient liquidity through short term facilities (210 M€) to face the uncertainties of the pandemic, the Group refinanced facilities maturing in 2021, issuing long term debt totaling € 222.5 million; in the final quarter, the Group partially rest
Slide 24: Outlook
Q3 2020 RESULTS PRESENTATION << 01 02 03 Market & Main Group Outlook Highlights Performance 23
Slide 25: Q4 2020 Summary
<< Q4 2020 SUMMARY • The recovery of UWF demand in Europe continued through Q4, in spite of partial lockdowns implemented; all mills running since middle of July and Navigator at full capacity • Navigator improved UWF sales volume and registered strong volumes for BEKP and Tissue sales • Paper price
Slide 26: Antidumping Recap
ANTIDUMPING RECAP << Process started in 2015, with US Authorities applying dumping rates to Navigator´s exports to the USA, after conducting reviews on NVG´s US and Portuguese sales and costs (using own guidelines and criteria) and in spite of Navigator´s belief that no dumping exists. After applyin
Slide 27: Outlook for 2021
OUTLOOK FOR 2021 << Strong start of the year in the recovery of pulp prices and of the UWF business. Still, the worsening of the pandemic situation and the additional measures restricting economic activity will impact Q1. With world scale state-of-the-art assets, strong industrial and commercial cap
Slide 28: Outlook for 2021
OUTLOOK FOR 2021 << Capex - Maintain conservative level in 2021 Capex for 2020 was revised downwards significantly and totalled 81 M€ For 2021, the Company estimates a recurrent capex level between 100-120 M€ mainly geared towards maintaining production capacity and reconditioning of assets, as
Slide 29: Q4 2020 Results Presentation
Q4 2020 Results Presentation January 28th 2021
The Navigator Company — Q4 2020 Earnings Presentation on 6ix