Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — 9M 2017 Earnings Presentation
28 slides from Navigator Company Sa's earnings presentation, Oct 26, 2017
Slide 1: The Navigator Company 9M 2017 Results Presentation
The Navigator Company 9M 2017 Results Presentation October 26th 2017
Slide 2: Participation
Participation Diogo da Silveira – CEO Fernando Araújo – CFO António Redondo Nuno Santos João Paulo Oliveira Joana Appleton – IR 1
Slide 3: 9M 2017 Results presentation
9M 2017 Results presentation • Main highlights • Key figures • Group performance • Market outlook • Update on new projects • Subsequent events 2
Slide 4: 9M 2017 – Key Highlights
Significant turnover growth and diversification over the last years 9M 2017 – Key Highlights P&P Market • Strong momentum for pulp, with prices YTD 2017 jumping to all time highs • Improvement in UWF demand and gradual price recovery, but average price remains lower YoY Volumes • Record sales of UWF
Slide 5: Pulp and Paper: different price behaviour
Pulp and Paper: different price behaviour Index FOEX PIX (Europe ) EUR 1.100 1.000 A4 – B Copy Max /Min 900 (€/ton): 1.046 /766 800 = 1,36 700 600 BHKP Max/Min (€/ton): 500 810 / 352 = 2,30 400 300 200 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 A4 – B C
Slide 6: EBITDA - Negative impact of paper price offset by cost reduction and volumes
EBITDA - Negative impact of paper price offset by cost reduction and volumes (Mais info nos anexos) The negative impact of paper price YoY was reduced by higher volumes and cost reductions -1.4 12.6 301.5 300.1 6.6 -11.1 -9.5 EBITDA Prices Volume Costs Non Rec. EBITDA 9M 2916 & Other 9M 2017 • Costs
Slide 7: Paper performance in 9M 2017
Paper performance in 9M 2017 • Sales of 1158 thousand tons of UWF – best first 9 Months registered • Although Navigator lead 4 price increases in Europe and International markets in 2017, average sales price decreased 1.9% YoY; from December 2016 until September 2017 prices have been improving • Pri
Slide 8: Record sales volume to diversified geographies
NVG registered record sales volume to diversified geographies 1 158 K ton YTD Sep Sales 727 Kt Europe 63% 89 Kt 143 Kt USA Middle East 8% 12% 149 Kt Africa 44 Kt 13% Latin America 6 Kt 4% Asia / Oceania 0.5% 7 Source: The Navigator Company
Slide 9: Navigator Pulp Performance – 9M2017
Navigator Pulp Performance – 9M2017 • Pulp sales increased 25% in volume to 252 thousand tons (record volume sold since 2009) • Navigator´s average price increased 6% YoY, but gained 22% from December 2016 to September 2017 • 11% Growth YoY in Décor and Special papers segments, high contribution seg
Slide 10: Tissue performance YTD 2017
Tissue performance YTD 2017 • Volume of tissue sold increases 11% YoY sustained by the 2015 capacity increase • Sales increased 11% to € 55 million (vs €50 million) • Average sales price in 9M2017 slightly higher YoY due to improvement in product mix Tissue Sales by market Tissue Sales by segment Ot
Slide 11: M2 program continues
M2 program continues • M2 cost reduction and efficiency programme continues with estimated impact on EBITDA in 9M 2017 of € 18 million • Of a total of 92 projects with successful initiatives, the following stand-out: + Wood logistics: € 3.1 million + Energy purchases: € 2.6 million + Packaging purch
Slide 12: Good operating performance but limited free cash flow
Good operating performance but limited free cash flow Free Cash Flow at € 149 mln With operating cash flow in line with 9M2016, free cash flow gained € 48 million YoY, positively impacted by lower capex (-€ 25 million) and evolution of working capital (mainly reduction in inventories) 260 33 Values
Slide 13: 9M 2017 - Financial results
New credit facilities and extension of maturity reduce cost of debt 9M 2017 - Financial results 9M2016 9M2017 - Financial results improved from -€ 16.6 to -€ 6.5 million - Financial costs in 2016 were negatively impacted by € 6 million €-6.5 mln due to the premium paid for the high yield call - Inte
Slide 14: Capex of € 76 million (vs. € 101 million)
Capex of € 76 million (vs.€ 101 million) • € 21 million for pulp, paper and others; includes recurrent capex of € 6.8 million • € 34 million for Figueira da Foz pulp capacity project • € 17 million for Cacia tissue mill • € 2 million in new converting lines at V.V. Rodão • € 2 million for others, in
Slide 15: Pulp prices have jumped since the beginning of 2017
Pulp prices have jumped since the beginning of 2017 YTD BHKP in USD: +35% and BHKP in Euros: + 22% YoY average BHKP in Euros and USD for 9M2017: +11% Prices: Week 1/ Week 39 950 900 PIX Europe BHKP (USD/Ton) BHKP (Eur/Ton) +245 USD/t (+35%) 900 850 850 BHKP USD 800 +138 EUR/t 800 (+22%) 750 750 700
Slide 16: Navigator has led price increases, paper prices haven't fully recovered
And although Navigator has led 4 prices increases, paper prices haven´t fully recovered Paper Benchmark has been gradually improving but the average price for the paper benchmark is still down 2.3% YoY European Market Price Evolution 900 Last Pix Week 39: 850 827 €/ton 800 829 €/ton Av. YTw39 810 €/
Slide 17: Global UWF Demand increased 0.9% YoY
Global UWF Demand increased 0.9% YoY Among graphic papers, only UWF registered an increase in demand of 0.9% YoY World Printing &Writing Demand Growth by Grade (8 months 2017 vs. 2016) 0,9% -1,0% -1,9% -3,4% Uncoated Uncoated Coated Woodfree Coated Mechanical Woodfree Mechanical Source:; PPPC; The N
Slide 18: Paper Market in Europe and US
Paper Market in Europe and US Europe • UWF consumption registered a slight decrease of 0.3% YoY, with cut size and folio performing better than reels • Although imports decreased 3.4% YoY, producers from Canada and Russia have been increasing their presence in Europe since the beginning of the year,
Slide 19: Price gap between paper and pulp is at a minimum level
And the price gap between paper and pulp is at a minimum level EUR/t Price Evolution in Europe +465 €/ton +107 +399 €/ton €/ton YTD 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* BHKP EUR 538 484 447 419 471 509 514 534 403 641 579 586 596 561 707 627 703 Copy
Slide 20: Positive market outlook
Outlook for 2016 Positive market outlook Pulp: strong performance continues, with significant reduction in market pulp due to maintenance/ strategic stoppages; however: + Current pace of demand growth difficult to sustain + Spread between short and long fibre at all-time lows Tissue: high competitio
Slide 21: Operations improve at Colombo Energy
Increase efficiency and cost reduction iniciatives Operations improve at Colombo Energy • During Q3 Group successfully solved production problems and operating stability was achieved ; • Ebitda for pellets still negative but with an improvement trend • Current quality of pellets produced is very goo
Slide 22: Mozambique project - Reminder
Increase efficiency and cost reduction iniciatives Mozambique project - Reminder • Scale down rhythm of investment and operations • Company remains engaged and is negotiating necessary conditions to proceed with the project • Plans to build the Moatize-Macuse railway line and the port of Macuse, due
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 thousand tons of reels and converting products with estimated capex of 120 million (78% of project commissioned) • Main equipment suppliers have been selected
Slide 24: Update on New Projects – Pulp F.Foz
Increase efficiency and cost reduction iniciatives Update on New Projects – Pulp F.Foz • Target to increase production efficiency and pulp capacity at Figueira da Foz, by 70 thousand tons • Capex of €85 million includes important environmental investments in reduction of odor, waste, air and liquid
Slide 25: Subsequent Events
Outlook for 2016 Subsequent Events • October fires: • Total area burned in Portugal increased to 520 thousand hectares • Approximately 6100 hectares related to the Group • Financial impact is still being assessed • Difficult to estimate the consequences of these fires for wood supplies in future yea
Slide 26: Fire impact by species
Fire impact by species Other Bush Pine Eucalyptus 100 90 23,2% 18,6% 19,2% In Portugal, 80 the burnt areas 70 evolution by 60 40,5% 49,0% occupation was 50 48,9% as follows: 40 30 8,6% 22,6% 20 15,4% 10 23,8% 17,7% 12,5% 0 2000-2015 2016 2017 25
Slide 27: 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 28: as
as
The Navigator Company — 9M 2017 Earnings Presentation on 6ix