Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — H1 2021 Earnings Presentation
28 slides from Navigator Company Sa's earnings presentation, Jul 29, 2021
Slide 1: H1/Q2 2021 Results Presentation
H1/Q2 2021 Results Presentation July 29th 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: H1/Q2 2021 Results Presentation: Main Highlights
H1/ Q2 2021 RESULTS << PRESENTATION 01 02 03 Market & Main Group Outlook Highlights Performance 3
Slide 5: Paper Market Recovering in Q2 2021
PAPER MARKET RECOVERING << IN Q2 2021 • Paper market conditions improved significantly during Q2, with paper demand in Europe increasing 29% YoY in Q2 2021 • Following the significant pulp rally registered in the first half of 2021, paper prices adjusted upwards during Q2; Navigator implemented pric
Slide 6: H1/Q2 2021 Financial Highlights
H1/Q2 2021 FINANCIAL HIGHLIGHTS << H1 H1 Change Q2 Q1 Change In millions € 2021 2020 HoH 2021 2021 QoQ Turnover recovered to € 715 million (+3% vs H1 2020), with the increase in paper Turnover 715 696 3% 374 341 10% volumes offsetting lower price levels EBITDA totalled € 150 million during H1 EBITDA
Slide 7: Main Quarter Highlights
MAIN QUARTER HIGHLIGHTS << Operational Cash Turnover (M €) EBITDA (M €) Flow (M €) Turnover rose 10% QoQ and 29% YoY to € 374 million, mainly due to 406 374 88 a recovery of paper volumes and 290 348 341 341 70 75 71 80 71 66 68 72 improvement in pulp prices 52 50 54 Paper volumes recovered nearly 9
Slide 8: EBITDA YoY Analysis
EBITDA YoY Analysis << Improvement in market conditions prompted the upsurge in Pulp prices and the recovery of UWF volumes, as cost efficiency efforts persist +10 (+7%) 25 150 140 -30 -8 23 UWF UWF Wood Fixed Costs Pulp Pulp Energy Tissue Tissue Chemicals Packaging External Fibers R20 Price Volume
Slide 9: EBITDA QoQ Analysis (1/2)
EBITDA QoQ Analysis (1/2) << Q2 EBITDA improvement as a result of UWF demand recovery and the positive trend in pulp market prices +9 (+13%) 5 0 14 80 -10 71 UWF UWF Wood Fixed Costs Pulp Pulp Chemicals Tissue Tissue Packaging External Fibers R21 Q1 Price Volume Costs Other R21 Q2 A B C Uptrend in P
Slide 10: EBITDA QoQ Analysis (2/2)
EBITDA QoQ Analysis (2/2) << Significant growth in EBITDA (+55%) as the pandemic effects hampered the group’s performance during last year Q2 +28 (+55%) 11 28 80 -15 4 52 UWF UWF Energy Pulp Pulp Chemicals Tissue Tissue External Fibers Fixed costs R20 Q2 Price Volume Costs Other R21 Q2 A B C Favorab
Slide 11: Market & Group Performance
H1/ Q2 2021 RESULTS << PRESENTATION 01 02 03 Market & Main Group Outlook Highlights Performance 10
Slide 12: Pulp & Paper Prices in H1 2021
PULP & PAPER PRICES IN H1 2021 << Strong recovery on pulp prices during the quarter (+31% QoQ; +51% YoY) Average paper prices declined 3% YoY, altough improving when compared to the beggining of the year (+1.3%) EUROPEAN MARKET PAPER PRICE – A4 B-COPY AND BHKP (IN €) 1000 A4 B‐copy BHKP Average BHKP
Slide 13: Update on the Pulp Market
UPDATE ON THE PULP MARKET << • Very strong pulp prices increase since the beginning of the year, reaching historical levels, first in China and then in the rest of the world: PRICE - BHPK in Europe (June): 938 €/ton (+69%) - BHKP in China (June) : 759 USD/ton (+52%) • In recent weeks, prices in Chin
Slide 14: UWF Market Conditions 1/2
UWF MARKET CONDITIONS 1/2 << PULP All time record high price BHKP puts significant pressure on paper producers; BSKP is also at very high PRICE levels and other cost inputs such as chemicals and logistics have registered strong increases • Global Printing and Writing demand increased 1% YTD May, wit
Slide 15: UWF Market Conditions 2/2
UWF MARKET CONDITIONS 2/2 << PAPER MARKET RECOVERING WITH UWF DEMAND GROWING 4% YTD MAY +4% +1% Global Demand (P&W) 0% YTD May -5% UNCOATED COATED TOTAL MECHANICAL WOODFREE WOODFREE Mt (tons) 0.3 0.6 0.0 -0.3 • Decline in UWF imports to Europe of 27% has supported sales of European producers to Euro
Slide 16: Navigator Paper & Pulp Performance
NAVIGATOR PAPER & PULP PERFORMANCE << PAPER PERFORMANCE in Q2/H1 • UWF sales volume increased approximately 17% in H1; Q2 volume registered a positive trend vs. the previous quarter (+9%) to 365 Ktons, reaching figures in line with 2019 levels • Solid improvement in paper turnover: +9% in H1 vs H1 2
Slide 17: Tissue Maintains Solid Performance
TISSUE MAINTAINS SOLID << PERFORMANCE High pulp prices are pressuring tissue producers and several price increases have been announced 46% Portugal (38% H1 2020) 76% Finish Products 60% Consumer (At Home) Revenue by Revenue by (78% H1 2020) (57% H1 2020) Revenue by type segment geography 37% Spain (
Slide 18: Capex of €33 Million in H1
CAPEX OF € 33 MILLION IN H1 << (VS € 49 Million in H1 2020) CAPEX is being executed according to plan, albeit with some delay due to the pandemic situation. Total of € 33 million in H1 including € 27 million directed at maintenance and efficiency improvements, € 4.5 million for the biomass boiler in
Slide 19: Creating Sustainable Value: New Packaging Products
CREATING SUSTAINABLE VALUE << NEW PACKAGING PRODUCTS Navigator has developed a new growth strategy aligned with its purpose to create sustainable value for its shareholders and for society at large, making a better planet to hand down to future generations through sustainable products and solutions
Slide 20: Creating Sustainable Value: New Packaging Products
CREATING SUSTAINABLE VALUE << NEW PACKAGING PRODUCTS SHOPPING BAGS • Increase significantly packaging volumes by year-end and enlarge offer by 2022 • By 2025/2026, produce up to 200 Ktons of the following packaging products: FOOD PACKAGING shopping bags (brown and white) Food packaging (brown an
Slide 21: €122 Million of FCF Generation in H1
€ 122 MILLION OF FCF GENERATION IN H1 << Strong Free Cash Flow generation of € 122 sustained by a careful management of suppliers and CAPEX reduction -2.7 (-2%) 45.2 124.2 121.5 M€ 33.6 -8.7 -32,8 -6.9 -33.2 Operating CAPEX Inventories Clients State & Suppliers Other Free Cash Cash Flow Public Flow
Slide 22: Net Debt of €658 Million
NET DEBT OF € 658 MILLION << Net Debt reduced to € 658 million at the end of June, a € 22 million reduction when compared with year-end 2020, after the dividend payment of € 100 million to shareholders at the end of May Navigator continues to deleverage, with Net Debt / EBITDA at 2.2 X 796 800 776 7
Slide 23: Extension of Debt Maturity
EXTENSION OF DEBT MATURITY << Navigator has been extensively renegotiating its debt, seeking to diversify sources of funds and extend average tenure; a new € 100 million sustainable linked bond as been contracted, anticipating the maturity in 2023 The average cots of debt remains low and weight of f
Slide 24: New ESG Linked Bond
NEW ESG LINKED BOND << • Navigator has contracted a sustainability linked bond in the amount of € 100 million, with a 5 year maturity (to be issued on August 5th 2021), anticipating the reimbursement of a € 100 million bond maturing in 2023 • The bond is linked to 2 ESG indicators which are very rel
Slide 25: Outlook
H1/ Q2 2021 RESULTS << PRESENTATION 01 02 03 Market & Main Group Outlook Highlights Performance 24 24
Slide 26: H1 2021 Summary
H1 2021 SUMMARY • After a start of the year marked by new Covid-19 waves and lockdown periods in some of Navigator’s key markets, Q2 2021 registered a gradual reopening of economies and a positive evolution for paper demand • Paper volumes recovered significantly, already at 2019 levels and Navigato
Slide 27: Outlook for 2021
OUTLOOK FOR 2021 << As vaccination plans progress and restrictions due to the pandemic ease, global economic conditions are expected to improve and provide support to paper, pulp and tissue business activities PULP PAPER TISSUE • Adjustment in pulp prices are • Positive perspectives for the paper •
Slide 28: H1/Q2 2021 Results Presentation
H1/Q2 2021 Results Presentation July 29th 2021
The Navigator Company — H1 2021 Earnings Presentation on 6ix