Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — Q3 2020 Earnings Presentation
27 slides from Navigator Company Sa's earnings presentation, Oct 29, 2020
Slide 1: Q3 2020 Results Presentation
Q3 2020 Results Presentation October 29th 2020
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
Q3 2020 RESULTS PRESENTATION << 01 02 03 Market & Covid-19 Main Group Impact & Highlights Performance Outlook 3
Slide 5: Q3 2020 - Recovery in paper volumes
Q3 2020 - Recovery in paper volumes << • Consumption of UWF paper improved during Q3 with the ease of lockdown measures and the gradual return of economic activity. Demand of UWF in Europe fell 10% in Q3 vs 28% in Q2 (and -5% in Q1) • With the pick-up in activity and a strong commercial effort which
Slide 6: 9M 2020 Financial Highlights
9M 2020 Financial Highlights << Performance in 2020 was negatively impacted by a severe decline in consumption of UWF In millions € 9M 9M Change Q3 Q2 Change across the world due to the Covid-19 pandemic 2020 2019 Q1-Q3 2020 2020 QoQ and the general lockdowns of economies 19/20 Turnover in the first
Slide 7: Main quarter highlights
Main quarter highlights << Operational Cash Turnover (M €) EBITDA (M €) Flow (M €) Paper volumes recovered 45% in Q3 and allowed to record strong 420 414 406 93 improvement in turnover 290 348 72 88 70 80 71 59 66 52 50 Pulp sales remained high and above 100 Ktons in Q3 and Tissue volumes were stron
Slide 8: EBITDA QoQ Analysis (1/2)
EBITDA QoQ Analysis (1/2) << After Q2 bottom, higher EBITDA on Q3 as a result of improving UWF sales volumes, and a steady effort on variable and fixed costs’ optimization +19 (+36%) 9 70 32 -6 52 -16 External fibers UWF UWF Wood Pulp Pulp Chemicals Tissue Tissue Packaging R20 Q2 Price Volume Costs
Slide 9: EBITDA QoQ Analysis (2/2)
EBITDA QoQ Analysis (2/2) << EBITDA falls comparing with last year Q3 as prices fall from historically high levels, despite significant cost savings -23 (-25%) 93 -46 7 70 25 -9 UWF UWF External fibers Chemicals Pulp Pulp Wood Fixed costs Tissue Tissue Energy R19 Q3 Price Volume Costs Other R20 Q3 A
Slide 10: 9M 2020 Recurring EBITDA
9M 2020 Recurring EBITDA << Sound performance in Pulp and Tissue businesses, as well as significant cost reduction efforts, eased the impact of an adverse outlook in UWF and Pulp market conditions -90 300 -129 (-30%) 68 2 210 -31 UWF UWF External fibers Pulp Pulp Wood Tissue Tissue Chemicals Packagi
Slide 11: Market & Covid-19 Impact
Q3 2020 RESULTS PRESENTATION << 01 02 03 Market & Covid-19 Main Group Impact & Highlights Performance Outlook 10
Slide 12: Pulp & Paper Prices in 9M 2020
PULP & PAPER PRICES IN 9M 2020 << With market discounts increasing, net pulp prices are currently at the lowest level since the begining of 2000 (and 2009); the recent devaluation of the USD vs the Euro impacted significantly European pulp producers margins. Paper prices reflect current market condi
Slide 13: Update on the Pulp Market
UPDATE ON THE PULP MARKET << • Worldwide pulp demand grew +10.6% YTD August 2020 with significant increase from China (+20%); despite the slow down in Europe and Africa /Asia (excluding China) during July and August, growth coming from North America and China allowed demand to maintain similar level
Slide 14: UWF Market Conditions
UWF MARKET CONDITIONS << PULP Gross hardwood pulp prices have stabilized, remaining flat at 680 USD/ton since January PRICE 2020 and currently stand at a minimum level in Euros • Global demand for P&W declined 18% YTD Aug., with UWF performing better than other grades: -15% vs -19% in coated and -22
Slide 15: UWF Market Conditions
UWF MARKET CONDITIONS << Order inflow entry in the European Industry in paper grades: UWF vs Other P&W - CWF, CMS (Coated Mechanical Sheets), CMR (Coated Mechanical Reels) and SC (Supercalendared) - as a % of same period in 2019 • UWF order inflow has been recovering clearly and consistenly from the
Slide 16: Navigator Paper & Pulp Performance
NAVIGATOR PAPER & PULP PERFORMANCE << PAPER PERFORMANCE • UWF sales volume increased 45% QoQ to 366 ktons, with strong performance in Europe; YTD Sep. volumes declined 13.8% YoY to 933 ktons; • Average selling price in Europe for Cut-Size evolved in line with the PIX Index, but average selling price
Slide 17: Record Performance in Tissue
RECORD PERFORMANCE IN TISSUE << Increased weight of Consumer Products 42% Portugal 40% Away-from-Home +C&C (vs. 37%) (vs.40% 9M2019) Revenue by Revenue by segment 44% Consumer (At-Home) geography 34% Spain (vs.28%) (9M 2020) (vs 35% 9M2019) (9M 2020) 16% Parent Reels 24% Extra-Iberia (vs.25% 9M2019)
Slide 18: 9M 2020 Capex of €70 Million
9M 2020 CAPEX OF € 70 Million << (VS € 119 Million*) Capex during Q3 included maintenance and environment, mainly the new biomass boiler in Figueira da Foz; Capex in terms of cash outflow stood at € 43 million CAPEX 9M 2020 M€ 70 47 Capex over the last 5 Quarters (M €) * 51 39 23 26 23 21 Q3 Q4 Q1 Q
Slide 19: First and Most Significant Step Towards Carbon Neutrality
FIRST AND MOST SIGNIFICANT STEP << TOWARDS CARBON NEUTRALITY NEW BIOMASS BOILER AT FIGUEIRA DA FOZ MILL • Steam generation capacity of 128 MWth, to supply paper machines 1 and 2 • Project is being finalized and testing began at the end of Q3; ramp-up will last from Q4 2020 and Q2 2021 • Reduction of
Slide 20: Continuing to Generate Strong Free Cash Flow
CONTINUING TO GENERATE STRONG FREE << CASH FLOW Strong generation of Free Cash Flow was maintained throughout Q3 (+56 M€) totaling € 170 million YTD September, comparing favorably with FCF of € 125.4 million in 9M2019; efficient management of working capital, with both strong cash conversion of clie
Slide 21: Net Debt Reduced to €644 Million
NET DEBT REDUCED TO € 644 MILLION << Net debt declined by € 71 M* vs year-end 2019 and € 132 M YoY, after the Group proceeded to the distribution of approximately € 100 million in reserves to shareholders 796 776 800 M€ 742 740 732 715 700 2,3 693 683 677 2,3 2,3 644 1,9 559 1,9 1,9 1,7 1,8 1,7 1,6
Slide 22: Conservative Debt Profile
Conservative Debt Profile << Short term liquidity increased to 345 M€ at the end of September During Q3, NVG has already refinanced 80% of its long-term financial debt maturing in 2021 Debt maturity profile Total debt: € 1,225 million Average maturity: 2.9 years Current Average Cost of Debt 430 292
Slide 23: Outlook
Q3 2020 RESULTS PRESENTATION << 01 02 03 Market & Covid-19 Main Group Impact & Highlights Performance Outlook 22
Slide 24: Q3 2020 Summary
<< Q3 2020 SUMMARY • Gradual reopening of economies and progressive recovery of paper demand during Q3 • Navigator registered significant improvement in paper volumes, with all its paper machines working at full capacity since July • Strong operating performance in pulp and tissue continued during Q
Slide 25: Responsive measures taken to secure business well being
Responsive Positive results measures << from measures taken to secure undertaken in response to Covid-19 business well being Efficiency and cost reduction programmes Capex Strong commitment to Significant capital reduce costs: Liquidity expenditure revision: Increase immediate cash Capex for 2020
Slide 26: Outlook for Q4 2020
OUTLOOK FOR Q4 2020 << Recovery of UWF business in Q4 expected to continue, albeit depending on the evolution of the pandemic situation and any further measures restricting economic activity Navigator will continue with its strong commercial effort, cost efficiency programs and effective management
Slide 27: Q3 2020 Results Presentation
Q3 2020 Results Presentation October 29th 2020
The Navigator Company — Q3 2020 Earnings Presentation on 6ix