Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — Q1 2017 Earnings Presentation
29 slides from Navigator Company Sa's earnings presentation, May 4, 2017
Slide 1: The Navigator Company Q1 2017 Results Presentation
The Navigator Company Q1 2017 Results Presentation 4 May 2017
Slide 2: Speakers
Speakers Diogo da Silveira – CEO Fernando Araújo– CFO Joana Appleton - IR 1
Slide 3: Q1 2017 – Strong volumes and cost reduction
Significant turnover growth and diversification over the last years Q1 2017 – Strong volumes and cost reduction • Negative impact of pulp and paper prices mitigated by cost reduction and increased sales volume • Sales improved 2.1% sustained by good operating performance; very strong volumes QoQ: +
Slide 4: Cash flow remains strong during Q1 2017
Cash flow remains strong during Q1 2017 (million euros) Q1 2017 Q1 2016 % Total Sales 392.7 384.5 +2.1% EBITDA 90.2 93.5 -3.6% EBITDA/Sales (%) 23.0% 24.3% -1.3 pp Net Income 35.6 44.7 -20.5% Free Cash Flow 24.2 18 +33.9% Net Debt 616.6 636.4 -3.1% Net Debt / EBITDA 1.6 1.6 - ROCE 11.1% 12.0% -0.9 p
Slide 5: Pulp prices: upward trend in spite of lower pulp prices in Q1
Pulp prices: upward trend in spite of lower pulp prices in Q1 Average prices for BHKP in Euros during Q1 2017 were 6% below Q1 2016, (9% below in USD), but 6% above Q4 2016 (5% in USD) 1000 900 NBSK USD 840 800 BHKP USD 745 702 700 BHKP EUR 600 500 400 2012 2013 2014 2015 2016 2017 Sales to other ma
Slide 6: BEKP - Market conditions improvement continues
BEKP - Market conditions improvement continues • BHKP market continues to improve and upward pulp price momentum remains + Very strong demand in both Europe and China – high level confidence that prices continue to rise in May + Some major suppliers are shifting sales volume from European customers
Slide 7: Paper Market impacted by several events (I)
Paper Market impacted by several events (I) World USA ASIA ADD attracted European Capacity Changes volumes e.g. Bilt -600 kt (India/Malaysia) European producers placing Polution Controlling capacity more volumes in USA shut in China (unknown volume) Growing Demand (China) Pipeline stocks depleted (C
Slide 8: Paper Market impacted by several events (II)
Paper Market impacted by several events (II) Europe • The valuation of USD against the Euro have made prices in Asia and Latin America more interesting than in Europe • Operating rates during Q1 2017 improved significantly to 97%, with shipments increasing throughout the quarter + European deliverie
Slide 9: Benchmark price evolution for paper
Benchmark price evolution for paper The average price for paper lost 4.0% QoQ (803 vs. 836 €/ton), but shows signs of improvement, with last price for March at 808 €/ton 1000 European Market Prices Evolution 950 A4 B-copy NVG announced 900 2 price increases 836 €/ton for Feb. 850 and April Eur/Ton (
Slide 10: NVG Paper sales - Main Highlights
NVG Paper sales - Main Highlights 371K ton Premium 50% YTD Mar Sales 255 Kt Europe Standard 37% 69% Eco 27 Kt 13% USA 8% 33 Kt Africa 9% Mill Brands 60% 51 Kt 173 Kt Intern. 14% 153 Kt Certified Sales 9 Source: The Navigator Company
Slide 11: Paper performance in Q1 2017
Paper performance in Q1 2017 • Sales of 371 thousand tons of UWF – second best first quarter registered • Decrease in average sales price YoY (-3.2%), but improvement from December 2016 until March 2017 (+2.6%) • NVG announced price increase in overseas markets (Jan.) and Europe (Feb.) • Recovery in
Slide 12: Pulp and tissue business performance
Pulp and tissue business performance Pulp • Pulp sales increased 40% in volume to 90 thousand tons (record volume sold since 2009), sustained by capacity increase in Cacia mill • 13% Growth YoY in Décor and Special papers segments, high contribution segments • Average sales price decreased 11% Q1 20
Slide 13: Focus on cost reducing measures continues
Focus on cost reducing measures continues • M2 cost reduction programme continues with estimated impact on EBITDA in Q1 2017 of € 6 million • Main areas contributing to this impact: + Chemicals and packaging: € 1.9 million + Extra volumes: € 0.9 million + Purchase of natural gas: € 0.7 million + Woo
Slide 14: Main cost reducing measures in 2017
Main cost reducing measures in 2017 Ambitious Forecast for 2017: Other fixed costs Almost 150 initiatives Personnel with Paper volume estimated impact on Maintenance EBITDA of +/- 20 Wood costs Pulp Volume Logistics Fuels Energy Pulp & Paper Chemicals Other variable Costs * 103 € 0 1000 2000 3000 40
Slide 15: EBITDA - Negative impact of prices offset by cost reduction and volumes
EBITDA - Negative impact of prices offset by cost reduction and volumes (Mais info nos anexos) The negative impact of pulp and paper prices was reduced by higher volumes and cost reductions Prices -14.5 Costs Non rec. Other + 6.0 + 0.7 + 0.1 Volumes + 5.7 EBITDA EBITDA Q1 2016 Q1 2017 93.5 M€ 90.2 M
Slide 16: Q1 EBITDA of 90 M€ slightly lower than Q1 2016
Q1 EBITDA EBITDA of 390 M€ : and highest EBITDA/Sales EBITDA in the last 5 years slighlty lower than Q1 2016 EBITDA in Q1 2017 decreased 3.67% versus Q1 2016, but compares favorably with other Q1 120 30% 28% 100 26% Values in million Euros 24% 80 22% 60 20% 18% 40 16% 14% 20 12% 00 10% EBITDA EBITDA
Slide 17: Free Cash Flow at € 24 mln
Good operating performance but limited free cash flow Free Cash Flow at € 24 mln FCF was negatively impacted by working capital evolution, namely increase in inventories, a normal trend in first quarter, after the sales effort at year-end; working capital also affected by increase in wood inventorie
Slide 18: YoY Net debt reduced
YoY Net debt reduced by € 24 million • Net debt decreased € 24 million from year-end (€ 20 million QoQ) and Net Debt / Ebitda stood at 1.6 Net Debt Net Debt / Ebitda 3.1 800 3.2 687 654 700 641 617 2.8 Values in million Euros 600 700 2.4 500 463 2.0 400 364 1.6 1.7 307 1.7 274 1.6 1.6 300 1.2 200 1.
Slide 19: Continuous improvement in debt profile
Continuous improvement in debt profile + The successful restructuring of the Group´s debt in 2016 resulted in a longer maturity and lower cost of debt, as well as an increased diversification of counterparties. + In February, a new credit facility of USD 10 million was contracted in the US + At the
Slide 20: Q1 2017 - Financial results
New credit facilities and extension of maturity reduce cost of debt Q1 2017 - Financial results 1Q 2016 1Q 2017 Significant reduction in interest costs following 2016 debt restructuring: repayment of the € 350 mln Portucel Senior Notes 5.375% € -2,7 mln new debt issued with better conditions and
Slide 21: Capex of € 14.3 million
Capex of € 14.3 million (vs.€ 49 million) Pulp, paper and tissue: • Includes recurrent capex (2.2) 3.7 M€ Current business Figueira Foz Pulp capacity 8.9 M€ Tissue • Includes Capex in new converting 1.8 M€ lines at V.V. Rodao Future business Pellets 0.2M€ 20
Slide 22: Tough start of operations at Colombo Energy
Increase efficiency and cost reduction iniciatives Tough start of operations at Colombo Energy • First pellets sold from Colombo Energy Inc project in Greenwood, South Carolina during the quarter: 15.4 thousand tons • Mill in its start-up phase, still working on production and cost issues • Initial
Slide 23: Update on Mozambique project
Increase efficiency and cost reduction iniciatives Update on Mozambique project • Scale down rhythm of investment and operations due to political and economic situation, which remains unstable • Completion of experimental operation to export 2,000 tons woodchips from Zambézia via the port of Nacala,
Slide 24: Update on New Projects - Cacia tissue mill
Increase efficiency and cost reduction iniciatives Update on New Projects Cacia tissue mill • Project to build an integrated tissue production line and converting facilities developing as planned: + main equipment suppliers have already been selected + preliminary site preparation work is under way
Slide 25: Update on New Projects - Figueira da Foz pulp capacity
Increase efficiency and cost reduction iniciatives Update on New Projects Pulp Capacity in Figueira da Foz • Target to increase production efficiency and pulp capacity at Figueira da Foz, by 70 thousand tons, progressing: + Initial pile work started + Civil construction contract adjudicated + Main e
Slide 26: Outlook for 2017
Outlook for 2016 Outlook for 2017 • Positive momentum in the pulp market continues as new price increases are announced for Q2; but concerns still persist over the new capacity to come on stream in the second half of 2017 • Tissue will be constrained by more aggressive competition and increased pres
Slide 27: Subsequent Events
Outlook for 2016 Subsequent Events • AGM to be held on May 24th 2017 • Dividend proposal: + Navigator Board of Directors proposes dividend of € 170 million to be paid in June + Main shareholder proposes distribution of reserves: € 80 million to be paid in July + Implicit dividend yield of 9% 26
Slide 28: Disclaimer
Disclaimer This presentation does not constitute or form part of and should not be construed as any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities in any jurisdiction nor shall it or any part of it nor the fact of its distribution
Slide 29: as
as
The Navigator Company — Q1 2017 Earnings Presentation on 6ix