Navigator Company Sa · EURONEXT:NVG
Navigator Company Sa — The Navigator Company — Investor Presentation (March 2023)
56 slides from Navigator Company Sa's investor presentation, March 2023
Slide 1: Investor Presentation March 2023
INVESTOR PRESENTATION March 2023
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: 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 5
Slide 6: An Integrated Producer
THE NAVIGATOR COMPANY << AN INTEGRATED PRODUCER TISSUE 165,000 tons Reels R&D 180,000 tons Converting * Leader in Eucalyptus 55 65 globulus cloning 60 70 60 35 k tons PAPER FOREST 1.6 M tons of UWF paper 105,733 ha of forest (under management) 800 800 k tons PULP ENERGY 1.6 M tons of BEKP pulp 1.74
Slide 7: 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 8: 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 9: Leading Manufacturer of UWF Paper in Europe
LEADING MANUFACTURER << OF UWF PAPER IN EUROPE l 2022 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 10: With an Efficient Cash Cost Structure
WITH AN EFFICIENT CASH COST STRUCTURE << Low prices and high costs are taking UWF capacity out of the market. Navigator is well equipped with efficient assets and strong products and brands to continue to be the global UWF benchmark. European UWF Cash Cost Curve - Q4 2022 vs Q4 2021 EUR/t, delivered
Slide 11: 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 The Navigator Company is responsible for 3% of the total electricity generation in Portugal Cogeneration Biomass Solar Photovoltaic (Biomass+Natural Gas) 344 MW 25 MW 12 MW ▪ 6 high efficiency co
Slide 12: 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 13: 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 14: 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 Sophistication and products, designed to
Slide 15: 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 15
Slide 16: 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 17: 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 18: 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 19: 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 20: 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 21: 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 21
Slide 22: 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 23: 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*** 5.8% MS in Europe 65% Market Share BEKP* 34% Industry 30% 32% Navigator World Europe 22% 14% 1.0 % 3.6 % 3% Tissue Decor Fine
Slide 24: With Pulp & Paper Prices at Historical Levels
WITH PULP & PAPER PRICES << AT HISTORICAL LEVELS BHKP pulp price index in Europe up 21% to 1,380 USD/ton by the end of the year, currently at 1,187 USD/ton1. A4 B-copy prices up 30% (YoY) to 1,331 EUR/ton by the end of the year, currently at 1,308 EUR/ton1. European market paper price – A4 B-Copy an
Slide 25: 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 25
Slide 26: Tissue World Trends
TISSUE WORLD TRENDS << SUSTAINABLE MARKET DEMAND Market Growth Mt Market Demand 50 40 2008-2021 (CAGR) 3.0% 30 20 2022e YoY 2.9% 10 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 North America Europe RoW China Tissue Demand per capita – 2021 and 2026e World Tissue Demand by
Slide 27: Tissue Business
TISSUE BUSINESS << SOLID TISSUE PERFORMANCE NVG SALES 2022 (vs 12M 2021) Type Segment2 Geography2 Finished 81% Portugal 46% Goods At Home 65% (47%) (77%) (63%) Reels 19% Spain 37% Away from Home 35% (36%) (23%) (37%) Extra Iberia 17% (17%) NVG TOTAL SALES (thousands euros) 250 000 200 000 150 000 10
Slide 28: GC Consumer Business Acquisition in Spain
GC Consumer business acquisition in Spain << With the GC Consumer acquisition, part of an ambitious plan for diversification, Navigator strengthen its position as the 2nd largest GC capacity Iberian producer of tissue, with an annual production capacity that MP: 35 kton now stands at 165,000 tons. C
Slide 29: 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 29
Slide 30: From Fossil to Forest
FROM FOSSIL TO FOREST << FORMED FIBER FLEXIBLE PACKAGING BAGS CORRUGATED & SOLID BOARD (packs, pouches, food take-away, envelopes, release liners etc.) (retail, food & filling industries, etc.) (boxes and trays for agriculture, industry, • New product line of formed fiber retail, take-away, e-commer
Slide 31: Navigator and P2X Europe
NAVIGATOR AND P2X EUROPE << Subject to the approval of the anti-trust authorities, this unique joint venture, P2X-Portugal, will produce Fischer-Tropsch waxes and liquids, based on green hydrogen and biogenic CO2, that can be transformed in e-SAFs, e-Naphtha and e-Diesel The project will contribute
Slide 32: 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 33: 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 34: 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 35: 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 36: 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 36 36
Slide 37: 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 38: 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 39: 2022 in Numbers
2022 IN NUMBERS << 90% Renewable raw materials 84% 6.1M of water returned t CO2 to the sequestred in 14.7% environment our forest Reduction in FOR CLIMATE Science-based specific water AND NATURE targets consumption (m3/t) approved by (baseline 2019) SBTi 185.2 M€ 71 ha 68 % Employee pay Area covered
Slide 40: 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 41: 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 42: 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 43: 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. Gomà-Camps Consumer (2023) 7,588 solar panels 5 MWp of installed
Slide 44: 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 45: Investing in People & Talent Management – Mozambique
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 46: Sustainability Leader
SUSTAINABILITY LEADER << A BIOINDUSTRY ON THE RIGHT A A- SIDE OF THE FUTURE / CLIMATE / FOREST Sustainalytics’ 2023 LEADERSHIP Top-Rated ESG Companies SBTi has approved targets Leader in Sustainable Finance FOR ~40% of total borrowing issued on a sustainable basis ▪ NVG’s Science-based SOCIETY GHG e
Slide 47: 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 47
Slide 48: Main Financial and Operational Highlights
MAIN FINANCIAL AND << OPERATIONAL HIGHLIGHTS Turnover (M€) EBITDA (M€) & EBITDA margin Operational Cash Flow (M€) 736 555 2 465 385 377 455 357 1 577 1 637 1 692 1 688 1 596 397 404 307 297 1 385 372 355 254 286 27% 22% 25% 25% 21% 22% 30% 2016 2017 2018 2019 2020 2021 2022 2016 2017 2018 2019 2020
Slide 49: Financial Indicators
FINANCIAL INDICATORS << Net Debt & Net Debt/EBITDA Free Cash Flow 2,38 1,92 1,72 1,68 1,61 1,5 715 0,52 363 640 692 683 680 595 211 234 235 184 198 186 382 2016 2017 2018 2019 2020 2021 2022 2016 2017 2018 2019 2020 2021 2022 ROCE ROE 35% 34% 14% 16% 14% 18% 17% 19% 16% 12% 13% 15% 8% 11% 2016 2017
Slide 50: FY 2022 Financial Highlights
FY 2022 FINANCIAL << HIGHLIGHTS The best FY Financial Performance ever with EBITDA of € 736 million (+108% YoY) and an annual EBITDA margin of 30%. FY FY Q4 Q3 In millions € FY’22-FY’21 QoQ 2022 2021 2022 2022 Turnover 2,465 1,596 54% 642 680 -5.6% ▪ Continuous focus on operational efficiency EBITDA
Slide 51: Solid Financial Position
SOLID FINANCIAL << POSITION Net Debt reduction to € 382 million, despite the € 100 million dividend payment in H1 and € 150 million reserves distribution by the end of the year. Net Debt/EBITDA ratio remains at low levels (0.52x), reflecting the Group’s solid financial position. M€ Without IFRS 16 5
Slide 52: Maturity and Liquidity
MATURITY AND LIQUIDITY << Well-balanced debt maturities, 94% of total debt issued on a fixed-rate basis, ensuring low financing costs in a scenario of sharply rising interest rates and close to 40% of total debt issued on a sustainability basis. Debt maturity profile (December 22) € 150M Sustainabil
Slide 53: 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 54: Our Brands
o NAVIGATOR: E =, s d za mark 3 GLOBULUS KRAFT PAPER OUR BRANDS 8 NANIGATOR cS ening] eine] eine] ove
Slide 55: Our Brands
OUR BRANDS OUR BRANDS << 55
Slide 56: Investor Presentation
INVESTOR PRESENTATION March 2023
The Navigator Company — Investor Presentation (March 2023) on 6ix