Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — FY2017 Earnings Presentation
31 slides from Navigator Company Sa's earnings presentation, Feb 8, 2018
Slide 1: Q4/FY 2017 Results Presentation
The Navigator Company Q4/FY 2017 Results Presentation February 8th 2018
Slide 2: Participation
Participation Diogo da Silveira – CEO Fernando Araújo – CFO António Redondo – CCO Nuno Santos João Paulo Oliveira Joana Appleton – IR 1
Slide 3: Q4/FY 2017 Results presentation
Q4/FY 2017 Results presentation • Main highlights • Market outlook • Group performance • Update on new projects 2
Slide 4: FY 2017 – Key Highlights
Significant turnover growth and diversification over the last years FY 2017 – Key Highlights P&P Market • Strong performance for pulp, with steep 2017 increase in prices • Improvement in UWF demand and gradual price recovery Volumes • Sales of UWF: 1 578 kton (-0.5%) • BEKP sales totalled 311 kton (
Slide 5: Strong market for pulp prices in 2017
Strong market for pulp prices in 2017 2017 BHKP in USD: +51% and BHKP in Euros: +33% 2017 YoY average BHKP in USD: +19% and BHKP in Euros: +16% Prices in 2017 : Week 1/Week 52 PIX Europe (Dec. 31) USD EUR 1000 1100 BHKP (Usd/Ton) BHKP (Eur/Ton) +330 USD/ton (+51%) 1000 982 USD 900 900 800 +203 €/ton
Slide 6: Pulp market in 2017
Pulp market in 2017 N NANIGATOR COMPANY BHKP mtap SUPPLY 2017 DEMAND Capacity Increase Demand Growth
Slide 7: Upward trend in paper prices
Upward trend in paper prices Paper Benchmark has been gradually improving but the average price for the paper benchmark is still down 1% YoY European Market Paper Price – A4 B-copy EUR 900 A4 B-copy (Eur) Last PIX Week 52: 835 €/ton 850 800 823 €/ton W1-52: +4.1% Av. YTw 52 815 €/ton Av. YTw 52 750
Slide 8: World paper market during 2017
World paper market during 2017 Global demand for paper increased 0.2% (YTD Nov) Asia/ USA EUR China Declining demand UWF: both in CS Growing demand UWF: in CS Growing demand UWF: (-6.9%) and FL&RL (-5.2%) YTD Nov (+0.8%) and FL (+2.4%) and +2.6% 2017e 2017 falling in RL (-2.8%) 2017e (imports Nov&De
Slide 9: EBITDA Performance in 2017
EBITDA Performance in 2017 YoY Positive performance in EBITDA due to price effect and cost reduction * Costs include reduction in wood costs and energy * Non recurring items include insurance indemnities, biological assets and negative EBITDA from Pellets 8
Slide 10: Solid paper performance in 2017
Solid paper performance in 2017 • Sales of 1 578 kton of UWF (-8.6 kton; -0.5%) • Navigator led 4 price increases in Europe and International markets in 2017, but average sales price remained almost in line with 2016 (-0.3% YoY) due to: + FX impact (USD and GBP) + Geographic market mix • Prices in E
Slide 11: FY 2017 Sales of 1 578 kton
Sales to over 122 countries with 84 new clients 1 578 kton 976 FY 2017 Sales kton Europe 62% 187 123 kton kton Middle USA East 8% 12% 226 kton 59 Africa kton 14% Latin 8 kton America Asia/ 4% Oceania 0.5% 10 Source: The Navigator Company
Slide 12: Strong contribution from pulp
Strong contribution from pulp • Pulp sales up 7% in volume to 311 thousand ton • Navigator’s price increased on average 12% YoY, but gained 35% from December 2016 to December 2017 • 8% Growth YoY in Decor and Special papers segments, high contribution segments (representing 61% of total sales) • Inc
Slide 13: Tissue business continues to increase
Tissue business continues to increase • Volume of tissue sold in converted products increases 9% YoY • Sales increased 10% to € 74 million (vs. € 67 million) • Average sales price in FY 2017 1.4% higher YoY due to improvement in product mix • Operating margin impacted by pulp price increase Tissue S
Slide 14: Industrial performance - Highlights
Increase efficiency and cost reduction iniciatives Industrial performance - Highlights • Positive evolution of safety indexes • Record pulp production in Cacia, with 354 ktAD (+13 ktAD vs. 2016) • Record pulp production in Figueira da Foz, with 593 ktAD (+7 ktAD vs. 2016) • Record paper production a
Slide 15: M2 program achieves excellent results
M2 program achieves excellent results • M2 cost reduction and efficiency programme continues with estimated impact on EBITDA in FY 2017 of € 27 million • Of a total of 126 projects with successful initiatives, the following stand- out: + Wood: € 5.5 million + Chemicals: € 3.8 million + Energy purcha
Slide 16: Strong Free Cash Flow at € 198 million
Strong Free Cash Flow at € 198 million With operating cash flow in line with FY2016, free cash flow gained € 14 million YoY, positively impacted by lower capex (- € 24 million) and evolution of working capital (mainly reduction in inventories) FREE CASH FLOW M€ 357 +20 +9 -115 198 -74 Operating CAPE
Slide 17: Financial results improve by € 13 million
Financial results improve by € 13 million M€ • Financial results improve by € 13 million sustained by lower borrowing costs and positive FX hedging • Interest paid were down € 4.9 million YoY • FX effects resulting from hedging operations of € 6 million 16
Slide 18: Interest expense significantly improved
Interest expense significantly improved Debt restructuring achieved over the last 2 years allowed to reduce interest expense, even in a scenario of higher gross debt 900 799 796 787 14% 800 769 706 700 661 12% Average Cost of Debt (%) Average debt (M €) 600 10% 500 8% 400 6% 300 4.1% 4.1% 3.5% 4% 20
Slide 19: Capex of € 115 million (vs. € 139 million)
Capex of € 115 million (vs. € 139 million) M€ 18
Slide 20: Positive outlook for 2018
Outlook for 2016 Positive outlook for 2018 Pulp – new increase in prices have been announced, continuing pulp momentum; pulp market should remain balanced throughout the year even with slower demand Tissue - high competition and pressure on margins due to rise in pulp price expected to continue Pape
Slide 21: Pellet business - Sale agreement to divest
Increase efficiency and cost reduction iniciatives Pellet business - Sale agreement to divest • Commercial start-up of the 500 kton mill in a difficult environment, with sales volume of 120 kton and turnover of € 15 million in 2017 • EBITDA for pellets remained negative throughout the year • Navigat
Slide 22: Mozambique project – Current status
Increase efficiency and cost reduction iniciatives Mozambique project – Current status • Scale down rhythm of investment and operations in 2017 • Company remains engaged and is negotiating necessary conditions to proceed with the project • Plans to build the Moatize-Macuse railway line and the port
Slide 23: Update on New Projects - Cacia Tissue
Increase efficiency and cost reduction iniciatives Update on New Projects - Cacia Tissue • Integrated tissue mill with capacity to produce 70 kton of reels and converting products with estimated capex of 120 million • Main equipment suppliers have been selected and 92% of capex already committed • 6
Slide 24: Update on New Projects – Pulp F. Foz
Update on New Projects – Pulp F. Foz Optimization Project 3 – Ecoefficiency Main Goals: • Increase the annual pulp production from 580,000 to 650,000 tAD • Increase the efficiency of Pulp process • Reduce wood and chemicals specific consumption • Implementation of BAT (ex: O2 delign) • Environmental
Slide 25: Navigator sustainability path
Navigator sustainability path • “Inpactus”, the new R&D project to create innovative products and technologies from Eucalyptus • Navigator participated for the 1st time in the CDP rating obtained score A- Leadership in the CDP – Climate Change 2017 • Navigator as “The Web Summit Carbon Offsetting Pa
Slide 26: Back-up slides - Financials
Back-up slides - Financials 25
Slide 27: Quarterly figures – YoY evolution
Quarterly Financials 2015 Quarterly figures – YoY evolution Turnover (M €) EBITDA (M €) Net Earnings (M €) 83 108 102 104 422 420 427 96 90 61 62 393 397 50 36 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2016 2017 2017 2017 2017 2016 2017 2017 2017 2017 2016 2017 2017 2017 2017 EBITDA/Sales (%) ROC
Slide 28: Group financial performance – quarterly figures
Group financial performance – quarterly figures CAPEX (M €) Net debt (M €) 60 738 742 41 693 38 641 617 21 14 Net debt/EBITDA 1,84 1,87 1,72 1,61 1,56 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 27
Slide 29: Historical dividend payment
Historical dividend payment In 2017, Navigator made 2 dividend payments on 6th June and 5th July, amounted to 250 million euros (gross value of 0.24 €/share) Dividend Share price Total amount paid 450 440,5 1 Year per share (year end) (million euros) 400 0,9 Dividend payment (M €) 0.1600 350 0,8 201
Slide 30: 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
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