Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — CaixaBank Iberian Conference 2023
57 slides from Navigator Company Sa's conference presentation, September 2023
Slide 1: CaixaBank Iberian Conference
CaixaBank Iberian Conference September 2023 Madrid
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 OUR PURPOSE PEOPLE, THEIR QUALITY OF LIFE, We want to share with society not AND THE PLANET'S only our results, but also our FUTURE ARE WHAT knowledge, experience and resources INSPIRE AND in the search for a better future MOVE US 3
Slide 4: The Navigator Company
THE NAVIGATOR COMPANY << “MUCH MORE THAN A CONVENTIONAL PURE PULP OR GRAPHICAL PAPER PLAYER” ▪ An integrated producer of forest, pulp, paper, tissue, sustainable packaging solutions, and bioenergy; ▪ With a unique business model based on: ▪ state-of-the-art factories on a worldwide scale, with cutti
Slide 5: Agile Business Model and Diversification Strategy
AGILE BUSINESS MODEL AND << DIVERSIFICATION STRATEGY Proving resilience in different market cycles Energy Packaging 9% 2% EBITDA (M€) & EBITDA margin 736 Tissue 1 455 14% 400 385 385 390 397 404 372 350 328 355 UWF Paper 29% 286 30% 253 26% 26% 23% 21% 24% 25% 25% 27% 22% 21% 22% €980M 62% 26% Pulp
Slide 6: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY << ON THE RIGHT SIDE OF THE FUTURE 01 A BIOINDUSTRY 02 03 04 05 ON THE RIGHT SIDE OF THE FUTURE Solid & Resilient Pulp l Paper Expansion & Sustainability Business Model & Tissue at the Core Performance Diversification 6
Slide 7: The Navigator Company: An Integrated Producer
THE NAVIGATOR COMPANY << AN INTEGRATED PRODUCER R&D FOREST Leader in Eucalyptus globulus cloning 105,733 ha of forest (under management) TISSUE PULP 165,000 tons Reels 180,000 tons Converting * 1.6 M tons of BEKP pulp 55 65 60 6551 5551 70 60 k tons 3902 35 k tAD PAPER ENERGY 1.6 M tons of UWF paper
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 A NATURAL AND RENEWABLE RESOURCE that provides excellent raw material Navigator has the largest certified forest nursery in Europe with capacity to produce 12 million plants/year BIODIVERSITY PROTECTION CERTIFICATIO
Slide 9: Based on Large Scale Production Mills
BASED ON LARGE SCALE PRODUCTION MILLS << WITH STATE-OF-THE-ART TECHNOLOGY With global capacity of: 1.6 Mt of Paper – 1.6 Mt of Pulp – 165 kt of Tissue Reels – 381 MW of Energy AVEIRO FIGUEIRA DA FOZ VILA VELHA DE RODÃO SETÚBAL ZARAGOZA • Pulp (Market) – 390,000 tAD • Pulp (Integrated) – • Pulp (Inte
Slide 10: Leading Manufacturer of UWF Paper in Europe
LEADING MANUFACTURER << OF UWF PAPER IN EUROPE l 2023 Nº1 in European UWF fine paper by capacity, with the largest and most modern mills Uncoated Woodfree (UWF) European uncoated fine paper European mills excluding Russian mills and Specialties Main players (Excluding Russian Mills and Specialties)
Slide 11: 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 2023 EUR UWF Cash Cost Curve, excl. Russia €/t, delivered in Paris 1 800,00 1 600,00 1 400,00 1 200,00 1 000,00 800,00 600,00 400,00
Slide 12: With a Total Energy Capacity of 381 MW
WITH A TOTAL ENERGY CAPACITY OF 381 MW << MORE THAN 60% OF ELECTRICITY GENERATION FROM RENEWABLE SOURCES By 2024 Navigator will triple its solar energy capacity, in a self consumption regime, from 12MWp to 38MWp. Cogeneration Biomass Solar Photovoltaic (Biomass+Natural Gas) 344 MW 25 MW 12 MWp ▪ 6 h
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 have moved the Group’s product mix to the high-end market, allowing up to 11% price premium advantage (in Europe) in 2022 NVG market share in Western Eu
Slide 14: Producing a Resilient Paper Grade (UWF)
PRODUCING A RESILIENT PAPER GRADE (UWF) << AND LESS EXPOSED TO DIGITALIZATION 2022 Global Printing & Writing Demand Distribution Woodfree Mechanical Coated Mechanical 9% Coated Uncoated Coated Uncoated Uncoated Mechanical High-end magazines & Magazines & Trade books, 9% Communication materials commu
Slide 15: And Innovating for Growth: From Fossil to Forest
AND INNOVATING FOR GROWTH << FROM FOSSIL TO FOREST Innovation Innovation Innovative through through products & tissue packaging technologies NEW BUSINESS OPPORTUNITIES New opportunities for forest-based New line of packaging products and promising scientific and Sophistication and products, designed
Slide 16: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY ON THE RIGHT SIDE OF THE << FUTURE ENVIRONMENT SOCIAL GOVERNANCE Climate Action Workforce Board & Ethics Recognized & Biodiversity o 1,857 Employees under Occ. Health o Executive Compensation Disclosure Leader in o Science-based targets approved by SBTi o 2022: 185.2 M€ Employee pay an
Slide 17: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY << ON THE RIGHT SIDE OF THE FUTURE 01 A BIOINDUSTRY 02 03 04 05 ON THE RIGHT SIDE OF THE FUTURE Solid & Resilient Paper l Pulp Expansion & Sustainability & Tissue at the Core Performance Business Model Diversification 17
Slide 18: UWF Market Demand Drivers
UWF MARKET DEMAND DRIVERS << UWF is Universal (everywhere to everybody) and Versatile (addressing multiple applications) Education External Science Production Communications Emp. in Services Industrial Activity Letter & Agreements (esp. Knowledge sector) Reading habits Direct Mail Population growth
Slide 19: UWF Paper Demand
UWF PAPER DEMAND << MATURE MARKETS vs. DEVELOPING WORLD Mt World 47.2 48.2 51.3 53.7 53.4 53.3 53.7 53.3 52.6 52.7 46.8 47.4 2000-2010 2010-2022 CAGR CAGR World 1.2% -1.0% 40.0 RoW 4.1% 0.0% 39.1 39.3 39.2 North America -4.1% -3.8% 37.1 36.9 37.1 Western Europe -1.6% -3.5% 35.0 33.2 30.0 Demand Outl
Slide 20: European UWF Demand Decline Followed by Capacity Reduction
EUROPEAN UWF DEMAND DECLINE << FOLLOWED BY CAPACITY REDUCTION -3.0 Mt >50% UWF demand destruction in XXI century occured in the 2007-09 crisis, less harmful to OP than Graphic UWF (more dependant on Invoicing, Advert. and Postal services). Between 2010-12, the economic contraction effects of the eur
Slide 21: Leading Market Player in UWF Segment
LEADING MARKET PLAYER IN UWF SEGMENT << 2022 Paper Sales Distribution 4% For every 3 office paper reams 9% exported from Europe* Europe 7% Africa Middle East 1 15% North America 65% Latin America 1 Includes Turkey, Asia and Oceania 2 are made by Navigator NVG Share of European Exports * (exc. RU) NV
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 1
Slide 23: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY << ON THE RIGHT SIDE OF THE FUTURE 01 A BIOINDUSTRY 02 03 04 05 ON THE RIGHT SIDE OF THE FUTURE Solid & Resilient Paper l Pulp Expansion & Sustainability & Tissue at the Core Performance Business Model Diversification 23
Slide 24: Strong Pulp Demand
STRONG PULP DEMAND << BEKP LEADING POSITION World China Global BEKP Demand Outlook M tAD 2006 2018 2022 M tAD 2006 2018 2022 L5Y (Mt/y) CAGR 21-26 SW 22.1 24.9 24.6 SW 2.8 7.7 7.3 -0.1 World 4.1% BEK 11.1 24.7 28.6 BEK 1.7 8.7 11.8 0.8 Other 14.9 11.7 12.3 Other 2.4 4.1 4.0 -0.0 Total 48.1 61.2 65.4
Slide 25: European Leader in BEKP Production
EUROPEAN LEADER IN BEKP PRODUCTION << FOCUS ON VALUE ADDED SEGMENTS IN EUROPE Pulp Sales 250 - 350 k tons Decor & 30 % 65 % Specialities Of European Suppliers* In NVG mix 65% 34% 30% Navigator Market Share BEKP Industry 22% 32% World Europe 14% 3% 1.0 % 2.7 % Tissue Decor Fine Others Tissue Fine Dec
Slide 26: Pulp & Paper Prices
PULP & PAPER PRICES << BHKP pulp price index in Europe currently at 803 USD/ton1 (740 EUR/ton). A4 B-copy prices down currently at 1,136 EUR/ton1. European market paper price – A4 B-Copy and BHKP (€) PIX A4 COPY-B PIX BHKP EUROPE EUR 1460 Average BHKP prices 1380 1300 2015-2020 2021 2022 H1’23 Europ
Slide 27: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY << ON THE RIGHT SIDE OF THE FUTURE 01 A BIOINDUSTRY 02 03 04 05 ON THE RIGHT SIDE OF THE FUTURE Solid & Resilient Paper l Pulp Expansion & Sustainability & Tissue at the Core Performance Business Model Diversification 27
Slide 28: Tissue World Trends
TISSUE WORLD TRENDS << SUSTAINABLE MARKET DEMAND Market Growth European Market Demand Mt 11 2008-2022 (CAGR) 2.9% 10 9 2022-2027 (CAGR) 2.1% 8 7 6 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2027 Tissue Demand per capita – 2022 and 2027e (kg per capita) World Tissue Demand by Region - 2022 RoW
Slide 29: Tissue Business
TISSUE BUSINESS << GC Consumer business acquisition in Spain Navigator strengthened its position as the 2nd largest Iberian producer of tissue, with an annual production capacity that now stands at 165,000 tons. Strong Strategic Rational Diversification of The Synergies with our Navigator Company’s
Slide 30: Tissue Business: Strong Tissue Performance
TISSUE BUSINESS << STRONG TISSUE PERFORMANCE Market Share Two 1st places in Consumer Awards : Aquactive (kitchen towel with water- Portugal Spain France activated soap - 2022) & Air Sense (Tissue embedded with fragrance - 2023) Innovation & Brand are gaining momentum: innovation sales have tripled i
Slide 31: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY << ON THE RIGHT SIDE OF THE FUTURE 01 A BIOINDUSTRY 02 03 04 05 ON THE RIGHT SIDE OF THE FUTURE Solid & Resilient Pulp l Paper Expansion & Sustainability & Tissue at the Core Performance Business Model Diversification 31
Slide 32: From Fossil to Forest
FROM FOSSIL TO FOREST << gKRAFT™ brand has won market recognition, with more than 230 active clients, in 30 countries, since starting up in 2021. The new eucalyptus-based molded pulp products project, designed to substitute single use plastic packaging, continues to progress with the production plan
Slide 33: Navigator eFuels
NAVIGATOR eFUELS << Navigator´s availability of biogenic CO2 allows the production of eFuels, such as eMethanol and eSAFs. These products will be an unavoidable reality in the aviation and maritime sectors, with the demand for eFuels expected to increase significantly by 2050. Potential ADVANTAGES O
Slide 34: Mozambique Project
MOZAMBIQUE PROJECT << Phase 1 Phase 2 Strategic Rationale Woodchip Mill Pulp Mill Growth opportunity driven by increased demand Investment 2.5 B in Asia and worldwide supply limitations (USD) 152 M 1.5 Mtons/year BEKP Attractive fundamentals of Mozambique: Planted Area 40,000 120,000 ‐ High Forest p
Slide 35: Mozambique Project Update
MOZAMBIQUE PROJECT UPDATE << 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
Slide 36: Focused on Building the Future Bio-economy
FOCUSED ON BUILDING THE RAIZ Forest and Paper FUTURE BIO-ECONOMY Research Institute Examples of possible bioproducts from biorefinery Paper Pulp Sustainable barrier for packaging solutions – molded cellulose products Fibers Tissue Cellulosic thermoplastic bio composites for fossil plastic substituti
Slide 37: Creating Innovative Products & Technologies
Researchers/Technicians >200 CREATING INNOVATIVE PRODUCTS & Research grants 50 TECHNOLOGIES RAIZ & Inpactus project 2018-2022 PhD Students 24 A co-promotion R&D project between industry and academia A step forward to a green, global, sustainable and Invited chairs 2 competitive bioeconomic environme
Slide 38: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY << ON THE RIGHT SIDE OF THE FUTURE 01 A BIOINDUSTRY 02 03 04 05 ON THE RIGHT SIDE OF THE FUTURE Pulp l Paper Sustainability Performance, Solid & Resilient Expansion & & Tissue at the Core Market Update Business Model Diversification & Outlook 38 38
Slide 39: 2030 Sustainability Agenda
2030 SUSTAINABILITY AGENDA << A responsible business agenda aligned with Navigator´s purpose OUR PURPOSE Creating sustainable value Apply ethical principles, demonstrate integrity and transparency in everything we do, manage risk, promote respect for human PEOPLE, THEIR rights and engage with our St
Slide 40: 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 MAIN GOALS FOR CLIMATE AND NATURE: ACT FOR SOCIETY: GROW Preserve and value the natural Invest in low carbon solutio
Slide 41: The Forest at the Heart of Everything We Do
For NATURE THE FOREST AT THE HEART OF EVERYTHING WE DO << a natural and renewable resource 6.1 Million t CO eq 900 Species 2 Flora of 252 Species of Fauna > 8 Million RAIZ Plants produced Forest and Paper at Portuguese Research Institute Nurseries Improve forestry management Increase eucalyptus Yiel
Slide 42: 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 ▪ Assessment of natural values and potential impacts of oper
Slide 43: Addressing Climate Change
ADDRESSING CLIMATE CHANGE << By becoming a carbon neutral company Decarbonization project - Industrial Sites GOAL 1 GOAL 2 GOAL 3 The Navigator Company is committed to To cut direct CO2 To use renewable energy Carbon offsetting for achieving Carbon Neutrality at its emissions from industrial represe
Slide 44: Energy – Solar Photovoltaic
For CLIMATE 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. Current solar energy capacity 28,868 solar panels 12 MWp 6,613 C
Slide 45: Energy – Solar Photovoltaic
For CLIMATE ENERGY – SOLAR PHOTOVOLTAIC << In 2023 and 2024 Navigator will triple its solar energy capacity, in a self consumption regime, and more than double the amount of CO2 emissions / year avoided. New additions: Navigator Tissue Rodão (2023) Navigator Tissue Aveiro (2023) Navigator Paper Figu
Slide 46: Investing in People & Talent Management
For SOCIETY INVESTING IN PEOPLE & << TALENT MANAGEMENT Headcount 3,246* (2022) Average age of 43 years old WORKFORCE Distribution by age: Figueira da Foz REJUVENATION 12% < 30 years old 1 031 (2014-2022) 61% between 30 – 50 years old 27% > 50 years old Training Hours: Aveiro TRAINING & 41 h / employ
Slide 47: Investing in People & Talent Management: Mozambique Project
INVESTING IN PEOPLE & TALENT << MANAGEMENT > $7 Million >250 employees* Securing invested families In the Community 95% Mozambicans 30% women welfare Development Program Delivering food (since 2015) security and generating income to 7,000 families 35 new water 935,000 kg improved seeds boreholes Dis
Slide 48: A Bioindustry on the Right Side of the Future
A BIOINDUSTRY << ON THE RIGHT SIDE OF THE FUTURE 01 A BIOINDUSTRY 02 03 04 05 ON THE RIGHT SIDE OF THE FUTURE Solid & Resilient Pulp l Paper Expansion & Sustainability & Tissue at the Core Performance Business Model Diversification 48
Slide 49: Main Financial and Operational Highlights
MAIN FINANCIAL AND << OPERATIONAL HIGHLIGHTS Turnover (M€) EBITDA (M€) & EBITDA margin Operational Cash Flow (M€) 736 555 2 465 385 357 377 1 577 1 637 1 6921 688 1 596 455 1 385 397 404 372 307 297 355 254 979 286 203 25% 25% 27% 22% 30% 253 21% 22% 26% 2016 2017 2018 2019 2020 2021 2022 H1 2016 20
Slide 50: Financial Indicators
FINANCIAL INDICATORS << Net Debt & Net Debt/EBITDA Free Cash Flow 2,38 1,92 1,72 1,68 1,61 1,5 692 683 715 680 363 640 595 0,52 0,89 198 211 234 235 573 184 186 1 382 10 2016 2017 2018 2019 2020 2021 2022 H1 2016 2017 2018 2019 2020 2021 2022 H1 2023 2023 ROCE ROE 35% 34% 22% 16% 22% 16% 18% 17% 19%
Slide 51: H1 2023 Financial Highlights
H1 2023 FINANCIAL << HIGHLIGHTS Second all-time high results for a 1st half with EBITDA of € 253 million and an EBITDA margin of 26%. Solid financial position: net debt/EBITDA ratio at 0.89x. H1 H1 Q2 Q1 In millions € YoY QoQ 2023 2022 2023 2023 ▪ Continuous focus on operational efficiency Turnover
Slide 52: Solid Financial Position
SOLID FINANCIAL << POSITION Net debt stands at € 573 million, reflecting tissue acquisition in the 1st quarter, the distribution of € 200 million in dividends in the 2nd quarter and the additional tax outflows. The ratio of Net Debt/EBITDA ratio stood at 0.89x, further consolidating the financial st
Slide 53: Maturity and Liquidity
MATURITY AND LIQUIDITY << Well-balanced debt maturities, 94% of total debt issued on a fixed-rate basis and close to 40% of total debt issued on a sustainability basis. Debt maturity profile € 150M Sustainability Linked Bond Total debt: € 670 million 2022 – 2028 Average Maturity: 3 years KPIs: • CO2
Slide 54: Historical Dividend Payment and Share Price Evolution
HISTORICAL DIVIDEND PAYMENT AND SHARE PRICE EVOLUTION << €/share 6,0 € 5,0 € 4,0 € 3,0 € 2,0 € 1,0 € 08/17 08/18 08/19 02/20 02/21 02/22 12/16 02/17 04/17 06/17 10/17 12/17 02/18 04/18 06/18 10/18 12/18 02/19 04/19 06/19 10/19 12/19 04/20 06/20 08/20 10/20 12/20 04/21 06/21 08/21 10/21 12/21 04/22 0
Slide 55: Our Brands
o NAVIGATOR: E =, s d za mark 3 GLOBULUS KRAFT PAPER OUR BRANDS 8 NANIGATOR cS ening] eine] eine] ove
Slide 56: Our Brands
OUR BRANDS OUR BRANDS << 56
Slide 57: CaixaBank Iberian Conference
CaixaBank Iberian Conference September 2023 Madrid
The Navigator Company — CaixaBank Iberian Conference 2023 on 6ix