Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — Pulp Week (November 2024)
54 slides from Navigator Company Sa's conference presentation, November 2024
Slide 1: Investor Presentation – Pulp Week
INVESTOR PRESENTATION Pulp Week NOVEMBER 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 01-Solid & Resilient Business Model 02-Paper l Pulp l Energy & Tissue 03-New Business Opportunities 04-Sustainability at the Core 05-Financial Performance 3
Slide 4: A Bioindustry on the Right Side of the Future: Purpose and Values
A BIOINDUSTRY ON THE RIGHT SIDE OF THE FUTURE OUR PURPOSE Innovation By expanding our knowledge and creative potential, together we can achieve the impossible The balance between the Economic, Environmental and Social pillars of Sustainability Sustainability is the foundation of our business model P
Slide 5: The Navigator Company
THE NAVIGATOR COMPANY Solid Core. Increasingly diversified A BIOINDUSTRY ON THE RIGHT An integrated producer of forestry, pulp, paper, tissue, sustainable packaging solutions and bioenergy, based on unique raw material SIDE OF THE FUTURE (Eucalyptus Globulus), continuous R&D and state-of-the-art fac
Slide 6: An integrated producer of forest-based bioproducts
THE NAVIGATOR COMPANY An integrated producer of forest-based bioproducts R&D FOREST Leader in Eucalyptus Energy 9% Packaging 2% 109,086 ha of forest under management 4 globulus cloning (vs. 10%) (vs. 4%) 356 Kha Land Use Rights in Mozambique TISSUE PULP #1 Portugal, #2 Iberia, #1 Europe, #7 World #4
Slide 7: Agile Business Model
AGILE BUSINESS MODEL Proving Resilience in a Cyclical Market Navigator stability and consistency in delivering results: ✓ operational flexibility; ✓ resilient business model, anchored in a solid diversification strategy, with differentiated products and a focus on the premium segment and own brands;
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: World Class Production Units
WORLD CLASS 10 PRODUCTION UNITS Based in 3 countries, with state-of-the-art technology Goods sold to 130 countries, across all 5 continents 3,927 EMPLOYEES With global capacity of: ZARAGOZA 38 Nationalities ▪ 1.6 Mt of Paper • Tissue – 35,000 t reels 60,000 t converting 1 ▪ 1.6 Mt of Pulp ▪ 165 kt o
Slide 10: Creating Sustainable Value
CREATING SUSTAINABLE VALUE “Create value and business opportunities with responsibility, applying ethical principles and demonstrating integrity and transparency in everything we do” RECOGNITION Sustainalytics' ESG Risk Rating 2024: Navigator at the top of the Paper & Forestry and Paper & Pulp clust
Slide 11: 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 11
Slide 12: UWF Is Universal and Versatile
UWF IS UNIVERSAL AND VERSATILE Everywhere to everyone, addressing multiple applications RESILIENT & SOCIAL & GEOGRAPHIC BRANDING & GROWING CULTURAL OPPORTUNITIES PRODUCT APPLICATIONS DIFFERENTIATION Wider range of applications Important role for Population growth & Navigator: Top-Selling and less de
Slide 13: Resilient Paper Grade (UWF)
RESILIENT PAPER GRADE (UWF) Less Exposed to Digitalization Global Printing & Writing Demand 8% UWF resilience comes from its 8% Uncoated Woodfree Universality | available for purchase Versatility | end use options Coated Woodfree by many different customer are wide segments, from both B2B and B2C 20
Slide 14: Leading Manufacturer in Europe: UWF
LEADING MANUFACTURER IN EUROPE Uncoated Printing and Writing Papers (UWF) #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 15: 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 Q1 2024 EUR UWF Cash Cost Curve, excl. Russia €/t, delivered in Paris 0% 25% 50% 75% 100% Cumulative capacity Source: RISI 15 Note: The gra
Slide 16: Leading Manufacturer: Best Sales Mix
LEADING MANUFACTURER Best sales mix in the world: circa 60% premium & 80% own brands 2023 Paper Sales Distribution 5% On average, for every 3 office 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 17: 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 18: 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 18
Slide 19: Leading Manufacturer in Europe: BHKP and BEKP Pulp
LEADING MANUFACTURER IN EUROPE Bleached Hardwood (BHKP) & Bleached Eucalyptus (BEKP) Pulp #1 in Europe #7 in the World using the best cellulosic fiber in the world – Eucalyptus Globulus European BHKP (Navigator, ENCE, Altri, Iberpapel & Lecta– purely BEKP) Main players (Excluding Russian Mills and S
Slide 20: Bleached Eucalyptus Kraft Pulp (BEKP)
BLEACHED EUCALYPTUS KRAFT PULP (BEKP) European Leader Focused on Value Added Segments Pulp Sales 350-400 Decor & 25 % 70 % kt 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 Dec
Slide 21: 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 21
Slide 22: Total Energy Capacity of 381 MW
TOTAL ENERGY CAPACITY OF 381 MW 76% of electricity production from renewable sources New investments will boost capacity to 430 MW by the end of 2025 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 BOI
Slide 23: 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 23
Slide 24: Tissue World Trends
TISSUE WORLD TRENDS Sustainable Market Demand Global Tissue Market Growth World Tissue Demand by Region – 2024e RoW 9% N. America 2008-2023 (CAGR) 2.9% Other Asia 20% 12% 2024e (YoY) 2.3% 2023-2028e (CAGR) 2.2% Europe China 21% 25% L. America Russia & Oth. EE 11% 2% Market Demand (Mt) European Marke
Slide 25: Leading Manufacturer in Portugal: Tissue Diversification
LEADING MANUFACTURER IN PORTUGAL Tissue diversification - Strong strategic rational #1 P O R T U G A L #2 I B E R I A 1 #4 U K 2 #8 E U R O P E 3 DEVELOPMENT AXES OF NAVIGATOR'S COMMERCIAL STRATEGY TISSUE CAPACITY CONSUMER TISSUE IN UK 2 (M€) FOR THE TISSUE SECTOR: KT REELS CONVERTING UK - 1314 Vert
Slide 26: Tissue Business
TISSUE BUSINESS Sales soared 5.25x in just 8 years ▪ Two 1st places in Consumer Awards: Aquactive (kitchen towel with water-activated soap - Market Share 2022) & Air Sense (Tissue embedded with fragrance - 2023) Portugal UK 4 Spain France ▪ Innovation & Brand are gaining momentum: ▪ Navigator streng
Slide 27: 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 27
Slide 28: Business Strategy: Diversification
BUSINESS STRATEGY l 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 ✓ Solar / W
Slide 29: 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 applicatio
Slide 30: Tissue Business Strategic Roadmap
TISSUE BUSINESS STRATEGIC ROADMAP Consolidation and growth in other geographies 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 Stren
Slide 31: Tissue – Accrol Acquisition
TISSUE – ACCROL ACQUISITION In H1 2024, Navigator launched an Offer and completed the acquisition of Accrol, Blackburn Site Ejea Mills a leading independent converter in the UK's Consumer Tissue market Aveiro Mills Strategic Location Vila Velha de Ródão Mills ▪ Reinforcing our presence in the Wester
Slide 32: 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 started the construction of the new self-consumption photovoltaic plants at the Figueira da Foz, Aveiro and Vila Velha de Ródão industrial sites, which will increase the total i
Slide 33: Packaging - From Fossil to Forest
PACKAGING - From Fossil to Forest Fighting single-use plastic with forest-based renewable biomaterials Innovative use of Eucalyptus Globulus fibre for pulp and packaging production ▪ After a strong H1, Q3 confirmed the trend with robust and consistent demand ▪ ▪ gKRAFT brand - has won market recogni
Slide 34: Packaging – Moulded Pulp
PACKAGING – MOULDED PULP Focus on Sustainability, Innovation and Business Transformation AVEIRO SITE gKRAFT Bioshield designed to replace single use plastic and aluminum packaging: ❖ World’s largest integrated plant using eucalyptus fibre ❖ Market with high potential and growth ❖ 1st pieces hit the
Slide 35: Eucalyptus Based Biofuels & e-Fuels
EUCALYPTUS BASED BIOFUELS & e-FUELS Portugal may become a synthetic fuels powerhouse based on P&P industry BioFUELS With a medium-long term view, Navigator is looking into investing in green fuels, both biofuels (medium term) and Potential Potential e-fuels or synthetic fuels (medium-long term). bio
Slide 36: 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, Cellulose-based thermoplastic biocomposites currently under techno- › plastics industry, automotive industry, packaging, text
Slide 37: Mozambique Project
MOZAMBIQUE PROJECT The work with the Mozambican government and the IFC continues, focusing on Phase 1 (wood chips) The construction of the 1st phase of the Port of Macuse would be a major step in the development of the project. In the meantime, in addition to the export of 285k m3 of roundwood since
Slide 38: 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 38
Slide 39: A Responsible Business Agenda
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 40: For Climate and Nature: Climate Change
FOR CLIMATE AND NATURE Climate change: we embrace an active role in the low-carbon economy, in line with current climate science CAPEX In 2026 more than 50% reduction of fossil CO2 emissions €340 million COMMITMENT 2035 (2019-2028) Invest in low carbon solutions leading to carbon neutrality Cut dire
Slide 41: For Climate and Nature: Biodiversity Conservation
FOR CLIMATE AND NATURE 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 v
Slide 42: For Climate and Nature: Resource Use and Circular Economy
FOR CLIMATE AND NATURE Resource use and circular economy: we position ourselves as a player in the transition to a circular low-carbon bioeconomy 7% <0.015% INITIATIVES TO PROMOTE THE CIRCULAR ECONOMY: ▪ INVESTMENT IN BIOPRODUCTS ▪ Agenda From Fossil to Forest Solid waste of the Hazardous waste of t
Slide 43: For Society: Investing in People and Talent Management
For SOCIETY FOR SOCIETY Investing in People and Talent Management WORKFORCE REJUVENATION (2014-2023) 38 different nationalities, 24 based in Portugal Average age of 43 years old The increased diversity of our teams reinforces ✓ 13% < 30 years old innovation, with new ways of thinking and interacting
Slide 44: For Society: Relation with Communities
FOR SOCIETY Relation with Communities Our policy respects and adapts to local culture and needs: in Mozambique we use local languages to engage with communities and ensure conditions for FPIC*, through Community Liaison Officers Securing > $7 Million invested family's welfare In the Community Delive
Slide 45: Business Contribution to the SDGs
BUSINESS CONTRIBUTION TO THE SDGs Actively participating in the achievement of the UN2030 Agenda We have not only mapped and aligned our contribution to the 17 SDGs, but we did the “extra mile” analyzing, as well, our contribution to the 169 targets Core SDGs Strategically relevant for the Group – t
Slide 46: Our Impacts
OUR IMPACTS A BIOINDUSTRY ON THE RIGHT SIDE OF THE FUTURE ENVIRONMENTAL SOCIAL GOVERNANCE CLIMATE ACTION & BIODIVERSITY WORKFORCE BOARD & ETHICS 3 ▪ 6.2Mt CO2 accumulated stock in our forests ▪ 30,000 Direct, indirect and induced jobs ▪ Executive Compensation Disclosure ▪ 41% Reduction in direct CO2
Slide 47: 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 47
Slide 48: Financial and Operational Highlights
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 2022
Slide 49: Q3/9M 2024 Financial Highlights
Q3/9M 2024 FINANCIAL HIGHLIGHTS Strong Financial Position After Strong CAPEX and M&A Millions € 9M 2024 9M 2023 YoY Q3 2024 Q2 2024 QoQ ▪ Net Profit of € 241 million, up 20% YoY Turnover 1 569 1 461 +7% 503 529 -5% ▪ Value-added capex of € 151 million ▪ 53% ESG investments EBITDA 431 377 +15% 133 16
Slide 50: Quarter Highlights
QUARTER HIGHLIGHTS Seasonal Slowdown in Q3 Was Stronger This Year, Yet Solid Results ▪ EBITDA: € 133 million (+7% vs Q3 Turnover (M €) EBITDA (M€) & EBITDA Operational Cash 2023, EBITDA margin of 26.3% (+ margin (%) Flow (M €) 536 529 503 165 0.7 pp on Q3 2023) 478 481 493 133 132 124 122 124 125 13
Slide 51: Debt Maturity and Liquidity
DEBT MATURITY AND LIQUIDITY New Long-Term Debt Ensures Adequate Profile and Ample Liquidity 533 M Total debt : € 709 million ▪ New long-term debt: Average Maturity : 3.7 years Sustainable ▪ 5, 6 and 7 years; ▪ €300 million; ▪ Financial conditions linked to three KPI´s 252 M 253 M present in our Sust
Slide 52: 9M Takeaways
9M TAKEAWAYS << ▪ Strong 9M results SUSTAINALYTICS’ ESG RISK RATING 2024 ❖ Operational flexibility, business-mix management Navigator at the Top of the Paper & ❖ Significant cash cost reduction: Pulp, UWF, Packaging and Tissue cash costs drop by 20 to 30% vs peak level in late 2022 Forestry and Pape
Slide 53: 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 54: Investor Presentation – Pulp Week
INVESTOR PRESENTATION Pulp Week NOVEMBER 2024 54