Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — Q1 2019 Earnings Presentation
24 slides from Navigator Company Sa's earnings presentation, May 10, 2019
Slide 1: Q1 2019 Results Presentation
Q1 2019 Results Presentation May 10th 2019
Slide 2: Participation
PARTICIPATION << João Castello Branco António Redondo Executive Directors Fernando Araújo João Paulo Oliveira Nuno Santos Investor Relations Joana Appleton 1
Slide 3: Main Highlights
Q1 2019 RESULTS PRESENTATION << 01 02 03 04 Main Group Market Outlook Highlights Performance 2
Slide 4: Q1 2019 Highlights
Q1 2019 HIGHLIGHTS << In millions € Q1 Q1 %CHANGE Increase in turnover (+9.6%) due to 2019 2018 19/18 higher prices and higher volumes of pulp and tissue sold. Turnover 421.8 384.9 9.6% EBITDA 104.9 110.9 -5,5% Recurrent EBITDA grows 3.3% YoY EBITDA(without 104.9 101.5 3.3% Group restructures debt,
Slide 5: Q1 2019 Recurring EBITDA
Q1 2019 Recurring EBITDA << Positive impact of pulp and paper prices in EBITDA more than offsets increase in costs (Energy, Wood and Fibres) +3,4 (+3%) 4 -23 23 105 102 Rec. R18 Price Volume Costs & Others Rec. R19 M€ 4
Slide 6: Market Outlook
Q1 2019 RESULTS PRESENTATION << 01 02 03 04 Main Group Market Outlook Highlights Performance 5
Slide 7: Pulp prices remain at a high level
PULP PRICES REMAIN AT A HIGH LEVEL << Pulp prices have been softening since the end of 2018, but remain at high levels PIX Europe USD/ton €/ton 1100 Av. 2018: 1100 1038 USD/ton 1000 Last PIX 1000 Av. 2017: (W52): 826 USD/ton 1024 USD/ton Last PIX (W16/2019): 953 USD/ton (-6.3% YTD) 2019 900 900 Last
Slide 8: Update on the pulp market
UPDATE ON THE PULP MARKET << • Global pulp shipments experienced a 0.5% fall in Q1 2019, with shipments to China decreasing 5.4% (BEKP – 10%) • Slower economic growth and cool down in demand from China and Europe experienced since H2 2018, have contributed to a downturn in prices for both softwood a
Slide 9: Paper demand in 2019: UWF remains one of the best performing grades
PAPER DEMAND IN 2019 UWF REMAINS ONE OF THE BEST PERFORMING GRADE IN << P&W PAPERS (M tons) 19.1 9.9 4.6 2.3 2.3 -2.0% -6.2% 52% Share UWF On P&W global demand (exc. NP) -9.8% -10.2% -11.4% Q1 2019 YoY % TOTAL UNCOATED COATED UNCOATED COATED WOODFREE WOODFREE MECHANICAL MECHANICAL (Inc. SuperCalende
Slide 10: Paper prices in stable upward trend since 2017
PAPER PRICES IN STABLE UPWARD << TREND SINCE 2017 EUROPEAN MARKET PAPER PRICE – A4 B-COPY A4 B-copy (Eur/Ton) Last PIX (W16 2019): 913 €/ton 950 900 850 Q1 2019 Average Av. 2018: EUR / Ton 800 873 €/ton price increase in Av. 2016: 823 €/ton Av. 2017: (+9.0%) A4 B-COPY: (Var. W1-52: -3.5%) 815 €/ton
Slide 11: UWF market conditions
UWF MARKET CONDITIONS << PULP Hardwood pulp prices remained at high levels even after year-end softening; since the PRICE start of the year, pulp prices are showing signs of picking-up, maintaining pressure on paper margins DEMAND UWF continues to show the highest resilience among the major graphic
Slide 12: Group Performance
Q1 2019 RESULTS PRESENTATION << 01 02 03 04 Main Group Market Oultook Highlights Performance 11
Slide 13: Navigator paper performance in Q1 2019
NAVIGATOR PAPER PERFORMANCE << IN Q1 2019 • UWF sales volume of 353 kton (-8 kton YoY) due to production issues (slower ramp-up of heavyweights production and the strike at PM4 in Setúbal) • Price improvement allowed a 6% increase in paper turnover • In 2019, Navigator increased paper price in Europ
Slide 14: Pulp turnover impacted by reduction in volume
PULP TURNOVER IMPACTED BY << REDUCTION IN VOLUME • Pulp production evolved positively YoY (+7%) with no maintenance stoppages affecting Q1 2019 • Pulp sales increased to 62 kton (+17% YoY) • Even though market pulp price evolved negatively in USD (-2.2%), pulp index gained 5.8% in Euros due to FX ev
Slide 15: Growth in the tissue business
GROWTH IN THE TISSUE BUSINESS << 44% Away-from-Home 52% Portugal Revenue by +C&C Revenue by segment geography 37% Consumer 35% Spain (2019) (2019) 19% Parent Reels 13% Extra-Iberia • Global volume of tissue sold increased to 23.7 kton (76% YoY), sustained by new capacity in Aveiro • Sales increased
Slide 16: Cost efficiency program M2 continues
<< COST EFFICIENCY PROGRAM M2 CONTINUES M2 program estimated impact on EBITDA of € 2.9 million in Q1 2019 Global 5 year target for 2016-2020: €100 million, of which €64 million already achieved in 2016, 2017 & 2018 82 new initiatives of cost reduction since the beginning of the year, with the follow
Slide 17: Capex of €32.5 million (vs €28.6 million)
<< CAPEX OF € 32.5 MILLION (VS € 28.6 MILLION) CAPEX M€ 32.5 19.2 8.6 4.7 CAPEX Maintenance & recurring Regulatory Capex Expansion/Development capex Capex* * Includes Po3 + Tissue Cacia + Heavy Weights 16
Slide 18: Free cash flow at €9.9 million
FREE CASH FLOW AT € 9.9 MILLION << Free Cash Flow negatively impacted by capex, inventories and state reimbursements (VAT & Income tax) Free Cash Flow M€ 88 -32.5 -27,4 5,3 27.4 9.9 Operating Cash CAPEX Inventories Clients Suppliers & Free Cash Flow Flow others 17
Slide 19: Net debt at €677 million
<< NET DEBT AT € 677 MILLION Remunerated net debt decreased € 6 million vs Q4 2018 Remunerated Net Debt / Ebitda of 1.5 remains at comfortable level M€ 738 742 740 732 693 683 677 641 617 559 1.8 1.9 1.7 1.7 1.6 1.6 1.6 1.5 1.5 1.3 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2
Slide 20: Debt restructuring
DEBT RESTRUCTURING << • New debt facilities in the total amount of € 455 million; Debt maturity profile Average maturity December 2018: 2,6 years • Extension of maturities : New debt facilities average life between 5 Average maturity as of today: 4,2 years to 7 years (vs an average maturity of 2,6 y
Slide 21: Outlook
Q1 2019 RESULTS PRESENTATION << 01 02 03 04 Main Group Market Outlook Highlights Performance 20
Slide 22: Outlook for 2019
Outlook for 2019 2019 PULP PAPER CHALLENGES Pulp demand expected to pick-up Navigator implemented another price Planned prolonged stoppages in Setúbal moderately in H2 2019, subject to increase in European markets in January and Aveiro pulp mills and in Setúbal and improvement in economic growth and
Slide 23: 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 24: Q1 2019 Results Presentation
Q1 2019 Results Presentation May 10th 2019
The Navigator Company — Q1 2019 Earnings Presentation on 6ix