Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — Portugal Capital Markets Day 2024
62 slides from Navigator Company Sa's conference presentation, Jun 27, 2024
Slide 1: Portugal Capital Markets Day 2024
PORTUGAL CAPITAL MARKETS DAY 2024 AEM l EURONEXT June 27, 2024 1
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: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY ON THE RIGHT SIDE OF THE FUTURE OUR PURPOSE Trust We believe in people, we accept everyone’s contribution, and we respect their identity. We are committed to development, cooperation and communication We are guided by principles of transparency, ethics and respect in our Integrity rela
Slide 4: The Navigator Company
THE NAVIGATOR COMPANY Solid Core. Increasingly diversified An integrated producer of forestry, pulp, paper, tissue, sustainable packaging solutions and bioenergy, based on unique raw material (Eucalyptus Globulus), continuous R&D and state-of-the-art factories worldwide. Forest Production capacity o
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: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY ON THE RIGHT SIDE OF 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
THE NAVIGATOR COMPANY Vertically integrated with a diversified business portfolio R&D FOREST Leader in Eucalyptus globulus cloning 109,086 ha of forest (under management) 4 356 Kha Land Use Rights TISSUE #1 Portugal, #2 Iberia, PULP #4 Consumer Tissue in UK 165,000 tons Reels #1 Europe, #7 World 310
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 1,057 Species of 6.2 Million t CO eq Flora 253 Species of 2 Fauna > 8 Million Plants produced at Portuguese Nurseries RAIZ Forest and Paper Research Institute Improve forestry management Increase 109,086 ha 9.6 Million
Slide 9: Based on World Scale Production Units
BASED ON WORLD SCALE PRODUCTION UNITS With state-of-the-art technology With global capacity of: ZARAGOZA ▪ 1.6 Mt of Paper ▪ 1.6 Mt of Pulp • Tissue – 35,000 tons reels 60,000 tons converting* ▪ 165 kt of Tissue Reels • Energy – 5 MWp ▪ 310 kt of Tissue Converting 4 2 1 ▪ 381 MW of Energy AVEIRO 3 5
Slide 10: Leading Manufacturer: UWF in Europe
LEADING MANUFACTURER Uncoated Printing and Writing Papers (UWF) in Europe #1 in Europe #6 in the World 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 Sylvamo
Slide 11: Leading Manufacturer: Best Sales Mix
LEADING MANUFACTURER Best sales mix in the world: circa 60% premium & 80% own brands 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
Slide 12: 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 13: Leading Manufacturer: BHKP and BEKP Pulp in Europe
LEADING MANUFACTURER Bleached Hardwood (BHKP) & Bleached Eucalyptus (BEKP) Pulp in Europe European BHKP (Navigator, ENCE, Altri, Iberpapel & Smurfit Kappa – purely BEKP) Main players (Excluding Russian Mills and Specialties) MT % 1. NVG 1.6 16% 1.6 Total Capacity 10 Mt 2. ENCE 1.21 12% 1.21 3. Altri
Slide 14: Business Strategy - Adjacent Diversification
BUSINESS STRATEGY - ADJACENT DIVERSIFICATION Reinforce the core business and focus on growth +++ Tissue ▪ M&A and /or Organic E-fuels ▪ Biogenic CO2 ▪ e-Methanol ▪ e-SAFs Packaging CAPEX ▪ Flexible ▪ Cupstock ▪ Kraftliner ▪ Molded Pulp Energy ▪ Efficiency Energy Biomaterials ▪ Batteries ▪ Hygiene ▪
Slide 15: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY ON THE RIGHT SIDE OF THE FUTURE ENVIRONMENTAL SOCIAL GOVERNANCE CLIMATE ACTION & BIODIVERSITY WORKFORCE BOARD & ETHICS ▪ 6.2Mt CO2 sequestered ▪ 30 nationalities, 24 based in Portugal ▪ Executive Compensation Disclosure ▪ 41% Reduction in direct CO2 Emissions (CELE)(vs. 2018) ▪ 110% in
Slide 16: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY ON THE RIGHT SIDE OF 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 16
Slide 17: UWF Is Universal and Versatile
UWF IS UNIVERSAL AND VERSATILE Everywhere to everyone, addressing multiple applications Paper as an alternative to Paper better promotes the Paper has competitive and plastic forest cognitive advantages over digital 17 Source: NVG Sustainability Report 2023
Slide 18: And a Resilient Paper Grade (UWF)
AND A RESILIENT PAPER GRADE (UWF) Less Exposed to Digitalization 2023 Global Printing & Writing Demand for printing and writing paper Demand Distribution (K tons) 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% Coated Mechanic
Slide 19: UWF Paper Demand
UWF PAPER DEMAND Declining in 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 We
Slide 20: 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 crisis, less WE harmful to OP than Graphic UWF (more Capacity 8.3 8.5 dependant on Invoicing, Advert, and Postal 8.1 7.6 7.6
Slide 21: Strong Position in the UWF Market
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 10-15%
Slide 22: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY ON THE RIGHT SIDE OF 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 Decor & 25 % 70 % k tons Specialities Of European Suppliers** In NVG mix 56% 70% European Sales*** Navigator European Industry Market Share* 24% BEKP 15% 25% World Europe 5% 5% 1.3 2.6 % % Tissue
Slide 24: Strong Pulp Demand
STRONG PULP DEMAND BEKP Leading Position World China Global BEKP Demand Outlook M tAD 2006 2019 2023 M tAD 2006 2019 2023 L5Y (Mt/y) CAGR 22-27 SW 22.1 26.4 24.8 SW 2.8 9.2 9.2 0.3 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 Pulp reaching historic highs European market paper price – A4 B-Copy (€) and BHKP (USD) 1460 1540 PIX A4 COPY-B PIX BHKP USD 1380 1460 ▪ BHKP pulp price index in Europe up 22% to 1300 1380 1,242 USD/ton by the end of the quarter, 1220 1300 currently at 1,440 USD/ton1: 1220 ▪ the
Slide 26: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY ON THE RIGHT SIDE OF 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: Total Energy Capacity of 381 MW
TOTAL ENERGY CAPACITY OF 381 MW Production: circa 3% of total (Portugal); 4% of all RE and over 37% of biomass based COGENERATION 344 MW BIOMASS 25 MW PHOTOVOLTAIC 12 MWp BIOMASS BOILER Self Consumption Decarbonizing Tissue New biomass boiler to replace natural gas in steam generation at Vila Velha
Slide 28: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY ON THE RIGHT SIDE OF 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 World Tissue Demand by Region - 2023 RoW 9% N. America 2012-2022 (CAGR) 2.9% Other Asia 21% 12% 2023 (YoY) 2.0% 2024e (YoY) 2.4% Europe 2025e-2028e (CAGR) 2.1% 20% China 25% L. America Russia & Oth. EE 11% 2% Market Demand (Mt
Slide 30: Tissue Business
TISSUE BUSINESS << Tissue diversification - strong strategic rational With the acquisition in Spain during 20203, 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 COM
Slide 31: Tissue Business: Sales Growth
TISSUE BUSINESS Sales soared 5.25x in just 8 years ▪ 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 innovat
Slide 32: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY ON THE RIGHT SIDE OF 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: Business Strategy - Adjacent Diversification
BUSINESS STRATEGY - ADJACENT DIVERSIFICATION Reinforce the core business and focus on growth +++ Tissue ▪ M&A and /or Organic E-fuels ▪ Biogenic CO2 ▪ e-Methanol ▪ e-SAFs Packaging CAPEX ▪ Flexible ▪ Cupstock ▪ Kraftliner ▪ Molded Pulp Energy ▪ Efficiency Energy Biomaterials ▪ Batteries ▪ Hygiene ▪
Slide 34: Tissue Business Strategic Roadmap
TISSUE BUSINESS STRATEGIC ROADMAP 3rd PHASE 2nd PHASE 2024e -2025e 2022-23 ✓ ? Entry into other geographies 1st PHASE Consolidation and increased scale Reinforcement of M&A in Europe 2015-22 ✓ in the Iberian market with a view to leveraging the Strengthen market leadership group's expertise and
Slide 35: Tissue – Accrol Acquisition
TISSUE – ACCROL ACQUISITION In the 1st quarter of 2024, Navigator launched the Offer and in May 2024 Blackburn Site Navigator Mills completed the acquisition of Accrol, a leading independent converter in the UK's Accrol Mills Consumer Tissue market Strategic Location ▪ Reinforcing our presence in th
Slide 36: Renewable Energy and Efficiency
RENEWABLE ENERGY AND EFFICIENCY By the end of 2024, leading player of solar PV capacity for self-consumption ▪ In 2023, we should start the 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 ins
Slide 37: Packaging - From Fossil to Forest
PACKAGING - From Fossil to Forest Fighting single-use plastic with forest-based renewable biomaterials ▪ gKRAFT brand has won market recognition and continues to evolve: ▪ +230 active clients ▪ 30 countries FLEXIBLE PACKAGING BAGS CORRUGATED & SOLID MOULDED PULP ▪ development of new segments (packs,
Slide 38: Research and Innovation Strategy
RESEARCH AND INNOVATION STRATEGY New cellulosic bioproducts, biomaterials, biochemicals, biofuels and e-fuels RAIZ – Forest and Paper Research Institute, the R&D centre of The Navigator Company. 92 researchers, 24 with PhD. Trained 25 new PhDs in the last 5 years. National Top 10 on patent applicati
Slide 39: Eucalyptus Based Biofuels & e-Fuels
EUCALYPTUS BASED BIOFUELS & e-FUELS Portugal might become a synthetic fuels’ powerhouse founded on P&P industry BioFUELS With a medium-long term view, Navigator is looking into Potential Potential investing in green fuels, both biofuels (medium term) and SAF bioethanol e-fuels or synthetic fuels (me
Slide 40: Other Bioproducts from Eucalyptus Globulus
OTHER BIOPRODUCTS FROM EUCALYPTUS GLOBULUS Alternatives to fossil-based products New Eucalyptus globulus based products on our New cellulosic bioproducts innovation pipeline, currently Cellulose-based thermoplastic biocomposites under techno-economic › plastics industry, automotive industry, packagi
Slide 41: 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 42: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY ON THE RIGHT SIDE OF 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 42
Slide 43: A Responsible Business Agenda Aligned with Purpose
A BIOINDUSTRY ON THE RIGHT SIDE OF 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 ef
Slide 44: 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 1% 3% 2,033 M€ 1,848 M€ OUR of Portuguese exports of Direct economic value Direct economic value of national GDP 1 good
Slide 45: The Forest at the Heart of Everything We Do
THE FOREST AT THE HEART OF EVERYTHING WE DO A Natural and Renewable Resource FOREST: ▪ In 2023, Navigator managed 109,086 ha 1 of forest in Portugal and Spain. Of these, 107,871 ha are certified by the FSC® (FSC®-C010852) and PEFC (PEFC/13-23-001) in mainland Portugal. Every area managed is responsi
Slide 46: Climate Change and CO2 Sequestration
CLIMATE CHANGE AND CO2 SEQUESTRATION We embrace an active role in the low-carbon economy in line with current climate science COMMITMENT Cut direct CO2 emissions (EU-ETS) from industrial complexes by 86% Invest in low carbon solutions leading to carbon neutrality ton GOALS 86% To cut direct CO2 emis
Slide 47: 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 108k hectares ▪ Assessment of natural values and potential impa
Slide 48: 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 49: Circular Economy
CIRCULAR ECONOMY We position ourselves as a player in the transition to a circular low-carbon bioeconomy Initiatives to promote the circular economy: ❖ INVESTMENT IN BIOPRODUCTS 7% <0.015 % ❖ Agenda From Fossil to Forest Solid waste of the Hazardous waste of the total total materials used materials
Slide 50: Investing in People & Talent Management
For SOCIETY INVESTING IN PEOPLE & TALENT MANAGEMENT 30 different nationalities, 24 based in WORKFORCE REJUVENATION (2014-2023) Portugal Average age of 43 years old The increased diversity of our teams reinforces innovation, with new ways of thinking and interacting ✓ 13% < 30 years old ✓ 62% between
Slide 51: 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 52: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY ON THE RIGHT SIDE OF 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 52
Slide 53: 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 54: Q1 2024 Financial Highlights
Q1 2024 FINANCIAL HIGHLIGHTS Highest ever first quarter results In millions € Q1 2024 Q1 2023 YoY Q4 2023 QoQ Turnover 536.4 501.2 7% 492.7 9% ▪ Sales up by 9% QoQ and 7% YoY to €536 million – Highest ever first EBITDA 133.3 130.7 2% 125 7% quarter results Net Profit 64.1 71.7 -11% 74.2 -14% ▪ Value
Slide 55: Quarter Highlights
QUARTER HIGHLIGHTS Stable quarterly results Turnover (M €) EBITDA (M €) Operational Cash ▪ Paper sales up by 10% QoQ Flow (M €) 650 680 642 223 207 and 29% YoY 171 492 501 478 481 493 536 184 151 151 122 131 122 124 125 133 103 100 97 110 100 83 ▪ Pulp sales up by 20% QoQ and YoY Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 56: Financial Indicators
FINANCIAL INDICATORS Consistent conservative financial policies Capex M€ ▪ Value-added capex 32% ▪ 63% ESG & Expansion, aimed at decarbonization targets and 68% 71 efficiency gains. 42 44 41 30 ▪ Net Debt/EBITDA below 1x ESG EXPANSION, MAINTENANCE & Q1' 23 Q2' 23 Q3' 23 Q4' 23 Q1' 24 RECURRING CAPEX
Slide 57: Maturity and Liquidity
MATURITY AND LIQUIDITY 92% of the debt is at a fixed rate, allowing for low financing costs in a context of rising interest rates 458 Total debt : € 634 million ▪ Well-balanced debt maturity Average Maturity : 3 years ▪ 44% of total debt is linked to sustainability 252 ▪ After the disbursement resul
Slide 58: 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 (payment) dividend yield (million euros) share (€) January 2019 – December 2023 2019 6.6% 200.0 0.279 TSR*: 47.4% 2020 9.5% 198.2 0.279 2021 6.5% 149.6 0.210 TSR annualized: 8.1% 2022
Slide 59: Outlook
OUTLOOK << Forecasts for global economic growth are cautious for 2024. The current geopolitical tensions, which have created a highly complex situation in industrial and logistical operations, could lead to increased volatility in international markets reducing visibility PULP: PAPER: TISSUE: ▪ Dura
Slide 60: Our Brands: Paper
OUR BRANDS OUR BRANDS PAPER 60
Slide 61: Our Brands: Tissue
OUR BRANDS OUR BRANDS TISSUE 61
Slide 62: Portugal Capital Markets Day 2024
PORTUGAL CAPITAL MARKETS DAY 2024 AEM l EURONEXT June 27, 2024 62
The Navigator Company — Portugal Capital Markets Day 2024 on 6ix