Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — Investor Presentation (June 2024)
62 slides from Navigator Company Sa's investor presentation, Jun 19, 2024
Slide 1: Field Trip Figueira da Foz - JB Capital
FIELD TRIP Figueira da Foz JB CAPITAL June 19, 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: Creating Value, Planting the Future
CREATING VALUE, PLANTING THE FUTURE OUR PURPOSE Trust We believe in people, we welcome everyone’s contribution, we respect their identity, promoting development, cooperation and communication We are guided by principles of transparency, ethics and respect in our Integrity relationships amongst ourse
Slide 4: The Navigator Company
THE NAVIGATOR COMPANY “Much More Than A Conventional Pure Pulp Or Graphical Paper Player” An integrated producer of forestry, pulp, paper, tissue, sustainable packaging solutions and bioenergy, based on continuous R&D and state- of-the-art factories worldwide. Forest The company has a production cap
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: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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: An Integrated Producer
THE NAVIGATOR COMPANY An Integrated Producer R&D PULP Leader in Eucalyptus #1 Europe, #7 World globulus cloning 1.6 M tons of BEKP pulp TISSUE k tAD 6551 5551 3902 #1 Portugal, #2 Iberia, #4 Consumer Tissue in UK 165,000 tons Reels FOREST 310,000 tons Converting * 5 109,086 ha of forest 55 65 (under
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 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 res
Slide 9: Based on Large Scale Production Mills
BASED ON LARGE SCALE PRODUCTION MILLS 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 3 AVEIRO 5
Slide 10: Leading Manufacturer of Eucalyptus Pulp in Europe
LEADING MANUFACTURER Of Eucalyptus Pulp in Europe European BHKP 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 1.06 11% 1.06 0.82 4. Metsä Group 0.82 8% 0.76 0.63 0.58 5. UPM 0.76 0.42 0.38 8% 0.33 0.28 0.26 0.24 0.2
Slide 11: Leading Manufacturer of Uncoated Printing and Writing Papers
LEADING MANUFACTURER Of Uncoated Printing and Writing Papers (UWF) in Europe Nº1 in European UWF fine paper 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 Sy
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: With a Successful Differentiation Strategy
WITH A SUCCESSFUL DIFFERENTIATION STRATEGY Based on the highest quality paper products and own brands Product and brand differentiation strategy has moved the Group’s product mix to the high-end market, allowing NVG to have a price premium in cutsize of 2% in 2022 and 4% in 2023. NVG market share in
Slide 14: Sound Business Strategy
SOUND BUSINESS STRATEGY Reinforce 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 / Wind ▪ Personal c
Slide 15: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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% increase in
Slide 16: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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: Uncoated Printing and Writing Paper Market Demand Drivers
UNCOATED PRINTING AND WRITING PAPER MARKET DEMAND DRIVERS UWF is Universal (everywhere to everybody) and Versatile (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 Report
Slide 18: Producing a Resilient Paper Grade (UWF)
PRODUCING A RESILIENT PAPER GRADE (UWF) and Less Exposed to Digitalization 2023 Global Printing & Writing Demand for printing and writing paper (K tons) Demand Distribution 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% Coate
Slide 19: UWF Paper Demand
UWF PAPER DEMAND 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 Western Europe
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 WE crisis, less harmful to OP than Graphic 8.5 Capacity 8.3 8.1 UWF (more dependant on Invoicing, 7.6 7.6 7.1 Advert, and P
Slide 21: Leading Market Player in UWF Segment
LEADING MARKET PLAYER IN UWF SEGMENT 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 and Oceania NVG Share of European Exports NVG M
Slide 22: With a Strong Position in the UWF Market
WITH A 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
Slide 23: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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 23
Slide 24: Bleached Eucalyptus Kraft Pulp (BEKP)
BLEACHED EUCALYPTUS KRAFT PULP (BEKP) European Leader Focused on Value Added Segments Pulp Sales 350-400 k tons Decor & 25 % 70 % Specialities Of European Suppliers** In NVG mix 56% 70% European Sales*** Navigator European Industry Market Share*BEKP 24% 25% World Europe 15% 5% 5% 1.3 2.6 % % Tissue
Slide 25: Strong Pulp Demand
STRONG PULP DEMAND BEKP Leading Position World China M tAD 2006 2019 2023 M tAD 2006 2019 2023 L5Y (Mt/y) Global BEKP Demand Outlook SW 22.1 26.4 24.8 SW 2.8 9.2 9.2 0.3 CAGR 22-27 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 26: 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 ▪ BHKP pulp price index in Europe up 22% to 1380 1460 1380 1,242 USD/ton by the end of the quarter, 1300 1300 currently at 1,439 USD/ton1: 1220 1220 ▪ the
Slide 27: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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 27
Slide 28: Total Energy Capacity of 381 MW
TOTAL ENERGY CAPACITY OF 381 MW More than 76% of electricity generation from renewable sources COGENERATION 344 MW BIOMASS 25 MW PHOTOVOLTAIC 12 MWp BIOMASS BOILER Self Consumption Descarbonizing Tissue New biomass boiler to replace natural gas in steam generation at Vila Velha Ródão Tissue mill BAT
Slide 29: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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 29
Slide 30: 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 31: Tissue Business: Strong Strategic Rational
TISSUE BUSINESS << Strong Strategic Rational 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 COMMERCIAL STRATEGY FOR THE TISSUE SECTOR: Ejea Capacity Reliability & Q
Slide 32: Tissue Business: Strong Tissue Performance
TISSUE BUSINESS Strong Tissue Performance ▪ 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 innovation and d
Slide 33: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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 33
Slide 34: Business Strategy
BUSINESS STRATEGY Reinforce 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 / Wind ▪ Personal care ▪
Slide 35: 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 36: Tissue - Accrol Acquisition
TISSUE – ACCROL ACQUISITION Blackburn Site In the 1st quarter of 2024, Navigator launched the Offer and in May 2024 Navigator Mills completed the acquisition of Accrol, a leading independent converter in the UK's Accrol Mills Consumer Tissue market Strong Strategic Rational Strategic Location ▪ Rein
Slide 37: Renewable Energy and Efficiency
RENEWABLE ENERGY AND EFFICIENCY ▪ In 2023, we should start of 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 installed capacity at the Group's sites, from the current 12 MWp to around 38 MWp
Slide 38: Packaging - From Fossil to Forest
PACKAGING - From Fossil to Forest ▪ gKRAFT brand has won market recognition and continues to evolve: ▪ +230 active clients ▪ 30 countries ▪ development of new segments FLEXIBLE PACKAGING BAGS CORRUGATED & SOLID MOULDED PULP supported by 220 market trials with 100 (packs, pouches, food take-away, (re
Slide 39: Biofuels & eFuels
BIOFUELS & eFUELS 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 (medium-long term). 20 kt/year Residual forest 25 kt/a biomass and eucalyptus bark 1. Biofuels, p
Slide 40: 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 41: Research & Development
RESEARCH & DEVELOPMENT Focused on Building the Future Bio-economy Research combined with innovation and the ability to Paper industrialize knowledge , are essential elements of The Pulp Tissue Navigator Company's identity. Fibers Market pulp ▪ In 2023 RAIZ once again earned a prominent place on the
Slide 42: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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 efficiency i
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 6.2 Million t CO eq 1,057 Species Flora of 253 Species of 2 Fauna > 8 Million RAIZ Plants produced at Forest and Paper Portuguese Research Institute Nurseries Improve forestry management Increase eucalyptus Yields 109,086 h
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 direct emissions (EU-ETS) from industrial complexes by 86% Invest in low carbon solutions leading to carbon neutrality ton GOAL 86% To cut direct CO
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 35.6 k ton Initiatives to promote the circular economy: ❖ INVESTMENT IN BIOPRODUCTS ❖ Agenda From Fossil to Forest 2023: Reclaimed sand (by- product) ❖ PROCESS OPTIMIZATION AND IMPROVEMENT ❖ ❖ PR
Slide 50: Investing in People & Talent Management
For SOCIETY INVESTING IN PEOPLE & TALENT MANAGEMENT Headcount 3,467 WORKFORCE REJUVENATION (2014-2023) Average age of 43 years old Figueira da Foz 1 047 ✓ 13% < 30 years old ✓ 62% between 30 – 50 years old ✓ 25% > 50 years old Aveiro 590 Setúbal TRAINING & LEARNING CENTER (2023) 1 088 Training Hours
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: Creating Value, Planting the Future
CREATING VALUE, PLANTING 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 Flow (M €) 650 680 642 223 207 171 492 501 478 481 493 536 184 151 151 ▪ Paper sales up by 10% QoQ and 131 122 124 125 133 103 100 97 110 100 122 83 29% YoY ▪ Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 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 share (payment) dividend yield (million euros) (€) January 2019 – December 2023 2019 6.6% 200.0 0.279 TSR*: 47.4% 2020 9.5% 198.2 0.279 TSR annualized: 8.1% 2021 6.5% 149.6 0.210 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: Field Trip Figueira da Foz - JB Capital
FIELD TRIP Figueira da Foz JB CAPITAL June 19, 2024 62
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