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MARCH 2019 Presentation to investors

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Page 1: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/...and Nurseries: RAIZ, Caniceira Nurseries, Espirra Nurseries, Ferreiras Nurseries and Luá-Gurué Nurseries

M A R C H 2 0 1 9

Presentation to investors

Page 2: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/...and Nurseries: RAIZ, Caniceira Nurseries, Espirra Nurseries, Ferreiras Nurseries and Luá-Gurué Nurseries

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 The Navigator Company S.A. or any of its subsidiaries’ undertakings, affiliates, directors, officers, employees or advisors or any other person as to the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation or of the views given or implied or any other material discussion in connection with this presentation.

This presentation has been prepared by The Navigator Company S.A. for information purposes only. The Navigator Company S.A. or any of its affiliates, directors, officers, employees or advisers or any other person shall not have any liability whatsoever (including in case of omission, negligence or otherwise) for any losses, errors or omissions howsoever arising, directly or indirectly, from any use of this presentation or its contents or otherwise arising in connection therewith or with respect to their reliance upon the completeness and accuracy of any such information, as well as any damages resulting hereof.

DISCLAIMER

1

Page 3: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/...and Nurseries: RAIZ, Caniceira Nurseries, Espirra Nurseries, Ferreiras Nurseries and Luá-Gurué Nurseries

01

T A B L E O F C O N T E N T S

Appendix Key Data

02Market Update

03 04Overview Development

01 02 03 04

2

Page 4: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/...and Nurseries: RAIZ, Caniceira Nurseries, Espirra Nurseries, Ferreiras Nurseries and Luá-Gurué Nurseries

THE NAVIGATOR COMPANY an integrated producer

R & D

F O R E S T

P U L PE N E R G Y

P A P E R

T I S S U E

130,000 ton Reels;120,000 ton Converting*

1.6 M tonof UWF paper

2.5 TWhof electricity

Leader in Eucalyptus globulus cloning

112,000 ha of forest(under management)

1.6 M ton of BEKP pulp(0.3 M market pulp)

3

(*total nominal capacity including new tissue mill in Cacia)

Page 5: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/...and Nurseries: RAIZ, Caniceira Nurseries, Espirra Nurseries, Ferreiras Nurseries and Luá-Gurué Nurseries

Navigator has the largest certified forest nurseries in Europe with capacity to produce 12 million plants/year

AT THE HEART OF EVERYTHING IS THE FOREST, a natural and renewable resource

BIODIVERSITYForest management reconciles production with species conservation

RENOVATIONAround 3,000 ha are planted annually by Navigator

PROTECTION€ 3 million invested/year in the prevention and support in combating forest fires

CERTIFICATIONCertified forest under: Forest Stewardship Council (FSC®)

Programme for the Endorsement of Forest Certification (PEFC™)

4

Page 6: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/...and Nurseries: RAIZ, Caniceira Nurseries, Espirra Nurseries, Ferreiras Nurseries and Luá-Gurué Nurseries

AIMING TO BECOME ACARBON NEUTRAL COMPANY

Under the Paris Protocoland the National Roadmapfor Carbon Neutrality,The Navigator Company undertakes, until 2035,to implement changesin its production processesin order to minimizethe use of fossil fuels

GOAL 1100% of electrical energy production from renewable sources

GOAL 2Reduce fossil fuelCO2 emissionswith replacementof technologies

GOAL 3Reduce 15% of specificenergy consumption until 2025, with 2015 as reference year

GOAL 4Carbon offsettingfor unavoidablecarbon emissions

5

Page 7: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/...and Nurseries: RAIZ, Caniceira Nurseries, Espirra Nurseries, Ferreiras Nurseries and Luá-Gurué Nurseries

Reduce the use of fossil fuels:Photovoltaic Solar Plants

After ATF (largest photovoltaic solar plant in an industrial setting in Portugal) NVG installed a new solar plant in Espirra

Installed capacity: (ATF + Espirra)2.2 MW + 113kWSolar Photovoltaic Panels: 8800 + 352 Electricity cost avoidance (Year): 264,000 € + 20,000€CO2 avoidance (Year): (ATF)1140 tons of cO2 avoided year

6

Page 8: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/...and Nurseries: RAIZ, Caniceira Nurseries, Espirra Nurseries, Ferreiras Nurseries and Luá-Gurué Nurseries

BASED ON LARGE SCALE PRODUCTION MILLS with state-of-the-art technology

FIGUEIRA DA FOZ

• Pulp (Integrated) – 650,000 tAD

• Paper – 790,000 ton

The Navigator Company operates 4 industrial units on an international scale, using sophisticated technology

VILA VELHA DE RÓDÃO

• Tissue – 60,000 ton reels;65,000 ton converting

SETÚBAL

• Pulp (Integrated) – 550,000 tAD

• Paper – 775,000 ton

CACIA

• Pulp (Market) – 350,000 tAD

• Tissue – 70,000 ton reels; 55,000 ton converting*

7(*total nominal capacity including new tissue mill in Cacia)

Page 9: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/...and Nurseries: RAIZ, Caniceira Nurseries, Espirra Nurseries, Ferreiras Nurseries and Luá-Gurué Nurseries

ONE OF PORTUGAL’S TRULY WORLD-CLASS COMPANIESwith a worldwide presence

Industrial Sites andEuropean Subsidiaries:

Amsterdam, Cacia, Cologne, Figueira da Foz, Geneva, Lisbon, London, Madrid, Moscow, Paris, Setúbal, Verona, Vila Velhado Rodão, Vienna, Warsawand Wavre North America: Capitola, Dallas, Mexico City and Norwalk Asia: Dubai and Istanbul Africa: Casablanca and Maputo

Business Areas:

Research & Development, Agro-Forestry, Pulp Production and Sales, Paper Production and Sales, Tissue Production and Sales and Energy

R&D Unitsand Nurseries:

RAIZ, Caniceira Nurseries, Espirra Nurseries, Ferreiras Nurseries and Luá-Gurué Nurseries

Subsidiaries

Sales Offices

Industrial Units

R&D and Nurseries

Capitola

Mexico City

Dallas

Norwalk

London

Casablanca

Luá-Gurué

Maputo

Dubai

Moscow

Warsaw

IstanbulMadrid

Wavre

Paris AmsterdamCologne

Verona

Vila Velha de RodãoCacia

FigueiraSetúbal

8

Page 10: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/...and Nurseries: RAIZ, Caniceira Nurseries, Espirra Nurseries, Ferreiras Nurseries and Luá-Gurué Nurseries

Revenues by division FY

2018*

Revenues by geography FY 2018**

*Other sales include Pellets & forest ; all energy sales are in Portugal **Revenues by geography of pulp, paper and tissue

The Group exports around 91% of pulp, paper and tissue sales

74% Paper

10% Pulp stand alone

5% Tissue

10% Energy

1% Other

56% Rest of Europe

13% Africa

8% Middle East

9% North America

5% Rest of the World

9% Portugal

WITH GLOBAL SALES TO 130 DIFFERENT COUNTRIESMarket pulp and paper sales accounted for over 83% of the Group’s

revenues, which are distributed to a diversified customer base

9

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NAVIGATOR IS THE LEADING MANUFACTURER of UWF paper in Europe

19%

16%

12%12%

10%

31%

Nº1 in European UWF fine paper by capacity, with the largest and most modern mills

European uncoated fine paper* Main players

Uncoated woodfree (UWF)European mills

Velsen-Noord

Stockstadt

Alizay

Hernani

Fabriano

Munkedals

Etival

Theresienthal

Kostrzyn

Nymolla

Figueira da Foz

Kymi

Others

Kostrzyn

Ruzomberok

Veitsiluoto

Setúbal

Nordland

Kwidzyn

Syktyvkar

0 200 400 600 800 1000 1200 1400 1600

SAPPI

Crown Van Gelder

Zicuñaga

Clairefontaine

Fedrigoni

Double A

Arctic Paper

UPM

International Paper

Stora Enso

Mondi

Capacity, 1000 ton/year

Saillat Svetogorsk

The Navigator Company

Mondi

IP

Stora Enso

UPM

Other

*Excluding value-added products (ex.: carbonless papers, termal papers,colorful papers, engineering papers, specialty papers, etc)

Integrated

Not Integrated

10

Others

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E S T I M A T E D C A S H P R O D U C T I O N C O S T S , D E L I V E R E D T O G E R M A N Y ( € / T O N )

AND HAS VERY EFFICIENT COST STRUCTURE IN PAPER

One of Europe’s most efficient paper producers, with cash cost per ton on the left side of the industry cost curve.

An estimated 25% of the industry capacity is non-integrated –excluding specialties capacity.

Source: RISI; The Navigator Company

11

0

200

400

600

800

1000

1200

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

ATFFF

SET

Partial/Non Integrated

PPI Reels Germany minuts 3% discount Mar. 2018 -810€/ton

Highly Pressured Mills

€/ton

CumulatedCap.

Specialties

Mondi East& IP East

Page 13: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/...and Nurseries: RAIZ, Caniceira Nurseries, Espirra Nurseries, Ferreiras Nurseries and Luá-Gurué Nurseries

WITH A PRODUCT DIFFERENTIATION STRATEGY based on the highest quality paper products and own brands

Product and brand differentiation strategy have skewed the Group’s product mix to the high end market, allowing up to 7% price premium advantage

The Navigator Company*

Europe industry average**

Premium products 54% 14%

Mill Brands 69% 20%

Sheets 75% 69%

Operating rates 100% 90%

* Navigator sales to all markets** Estimated industry average including Navigator

The Navigator Company market share in Western Europe* (amongs

europeans producers)

Source: The Navigator Company information 9M 2018; Euro-Graph; EMGE

12

19%

22%

21%

12%

~50%

Total

Cut-size

Folio

Reels

Premium

Page 14: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/...and Nurseries: RAIZ, Caniceira Nurseries, Espirra Nurseries, Ferreiras Nurseries and Luá-Gurué Nurseries

PERMANENTLY FOCUSED ON OPERATIONAL EXCELLENCEthrough cost reduction and efficiency - M2 program

13

Global 5 year target for 2016-2020: €100 million,

of which €64 million already achieved in 2016, 2017 & 2018

M2 program estimated impact

on EBITDA of € 20.8 million YOY

99 new initiatives of cost reduction since the beginning of the

year, with the following examples impacting EBITDA:

Reduction of softwood consumption (F.Foz): € 2.5 million

New pile chips management system (F.Foz): € 2 million

Overall logistics optimization (shipping/inland transportation): € 2.2 million

Page 15: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/...and Nurseries: RAIZ, Caniceira Nurseries, Espirra Nurseries, Ferreiras Nurseries and Luá-Gurué Nurseries

CREATING INNOVATIVE PRODUCTS & TECHNOLOGIES

A co-promotion R&D project between industry and academia.A step forward to a green, global, sustainable and competitive bioeconomic environment in Portugal, based on eucalyptus pulp and paper industry!

RAIZ & Inpactus project

180Researchers/Technicians

50Research grants

2Invited chairs

15.3M€Total budget

14

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24,0

%

13,5

% 17,6

%

13,3

%

13,5

%

16,0

%

25,2

%

11,8

% 15,3

%

15,9

%

13,5

%

14,7

%

24,7

%

11,0

%

17,1

%

16,3

%

15,8

%

16,5

%

26,9

%

13,1

% 18,0

%

17,4

0%

17,9

%

19,8

%

The NavigatorCompany

Competitor 1 Competitor 2 Competitor 3 Competitor 4 Competitor 5

2015 2016 2017 2018

COMPARING VERY FAVOURABLY WITH ITS PEERS

Source: The Navigator Company information H1 2018; Euro-Graph; EMGE* Average includes Navigator

EBITDA Margin - Paper Peers (2015-2018) Average for 2015-2018*: 17%

15

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0

1

2

3

4

5

6

7

jan‐13

fev‐13

mar‐13

abr‐13

mai‐13

jun‐13

jul‐1

3ago‐13

set‐13

out‐13

nov‐13

dez‐13

jan‐14

fev‐14

mar‐14

abr‐14

mai‐14

jun‐14

jul‐1

4ago‐14

set‐14

out‐14

nov‐14

dez‐14

jan‐15

fev‐15

mar‐15

abr‐15

mai‐15

jun‐15

jul‐1

5ago‐15

set‐15

out‐15

nov‐15

dez‐15

jan‐16

fev‐16

mar‐16

abr‐16

mai‐16

jun‐16

jul‐1

6ago‐16

set‐16

out‐16

nov‐16

dez‐16

jan‐17

fev‐17

mar‐17

abr‐17

mai‐17

jun‐17

jul‐1

7ago‐17

set‐17

out‐17

nov‐17

dez‐17

jan‐18

fev‐18

mar‐18

abr‐18

mai‐18

jun‐18

jul‐1

8ago ‐18

set‐18

out‐18

nov‐18

dez‐18

jan‐19

fev‐19

Close

2013: 201.4 M€

2014: 200.8 M€

2015: 440.5 M€

2016: 170.0 M€

2017: 250.0 M€

2018: 200.0 M€

€/sh

are

HISTORICAL DIVIDEND PAYMENT AND SHARE PRICE EVOLUTION

Year (payment) Ajusted dividend yield Total amount paid (million euros)2013 12.3% 201.4

2014 12.3% 200.8

2015 14% 440.5

2016 11.6% 170.0

2017 10.7% 250.0

2018 6.6% 200.0

16

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AND A STABLE SHAREHOLDER BASE

17

69% Semapa Group

22% Institutional Investors

9% Retail Investors and Other Unidentified

30% Portugal

18% USA + Canada

5% Norway

11% Rest of Europe

7% United Kingdom

14% Spain

5% Germany

1% Rest of the World

S H A R E H O L D E R D I S T R I B U T I O N

G E O G R A P H I C A L D I S T R I B U T I O N O F I N S T I T U T I O N A L S H A R E H O L D E R S ( F r e e

F l o a t )

S E M A P AS E M A P A F R E E F L O ATF R E E F L O AT

69% 31%

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01

T A B L E O F C O N T E N T S

Appendix Key Data

02Market Update

03 04Overview Development

01 02 03 04

18

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PIX Europe

19

<<PULP PRICES REMAIN AT A HIGH LEVEL

YoY 2018 average price increase in

BHKP:

+26% in USD

+21% in Euros

Pulp prices have been softening since the end of 2018, remaining at high levels

Week

Last PIX (W9/2019):986 USD/ton

Last PIX (W9/2019):866 €/ton

400

500

600

700

800

900

1000

1100

400

500

600

700

800

900

1000

1100

Week10 20 30 40 50 8 18 28 38 48 6 16 26 36 46 3 13 23 33 43 1 11 21 31 41 51 9 19 29 39 49 7

USD/ton BHKP EUR/ton BHKP

USD/ton €/ton

Av. 2016:626 €/ton

Av. 2017:729 €/ton

Av. 2018:880 €/ton

Last PIX (W52):897 €/ton

Av. 2016:693 USD/ton

Av. 2017:826 USD/ton

Av. 2018:1038 USD/ton

Last PIX (W52):1024 USD/ton

Page 21: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/...and Nurseries: RAIZ, Caniceira Nurseries, Espirra Nurseries, Ferreiras Nurseries and Luá-Gurué Nurseries

20

C h i n e s e m a r k e t

Supply:

• During 2018, the increase in pulp supply came from the ramp-up of new capacity (built in previous years); there are currently no significant new pulp capacity planned for 2019 and 2020

• Supply was restricted by planned and unplanned production stoppages throughout the year

Demand:

• Demand was strong during most of 2018, namely for BHKP (+2.5% Est.), cooling down in Q4, mainly driven by slow down in China (downtimes from paper and board producers and destocking effect from end-users)

• This led to lower pulp prices at the end of 2018

• Recently, actions from pulp producers such as production curtailments and domestic stock increases contributed to a re-balance of pulp prices; specifically, actions taken by the current world pulp production leader, Suzano, have contributed to improve market stability

G l o b a l M a r k e t S i t u a t i o n

PULP MARKET DURING Q4/FY 2018

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21

<<PULP TURNOVER IMPACTED BY REDUCTION IN VOLUME

• Pulp sales in volume of 253 kton, 58 kton less YoY due to decreased

availability of pulp:

+ Start of the year with no pulp stocks available

+ Extensive downtime for planned maintenance at Setúbal

pulp mill in Q1 and maintenance downtime and capacity

increase in Figueira da Foz in Q2, with the need to build up

inventory

+ Downtime due to Leslie hurricane in Figueira da Foz in Q4

• Navigator’s net price in 2018 increased +24% YoY

• Sales mix improvement: increase in the weight of Decor and Special paper

sales in Europe, high contribution segments, from 62% to 73% YOY

Page 23: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/...and Nurseries: RAIZ, Caniceira Nurseries, Espirra Nurseries, Ferreiras Nurseries and Luá-Gurué Nurseries

Source: PPPC; The Navigator Company

Share UWF On P&W global demand (exc. NP)

50%

Source: PPPC; The Navigator Company

22

YoY %

-3,6%

-0,8%

-4,5%

-5,2%TOTAL UNCOATED

WOODFREECOATED

WOODFREEUNCOATED

MECHANICALCOATED

MECHANICAL(Inc. SuperCalendered)

-7,4%

(M tons) 81.4 40.5 20.1 10.2 10.6

PAPER DEMAND IN 2018 UWF REMAINS ONE OF THE BEST PERFORMING GRADE IN P&W PAPERS

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Source: Euro-Graph; EMGE; RISI

Evolution of UWF Europeanapparent consumption

CAGR for UWF consumption

from 2009-2017:

CAGR forUWF capacity

from 2009-2017:

23

8,7 8,5 8,58,0 8,1 8,1 8,2 7,7 7,5 7,5

7,2 7,6 7,3 7,0 7,0 7,0 6,9 6,7 6,6 6,4

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Mill

ions

of

tonn

es

Capacity Apparent Consumption

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24

UWF MARKET CONDITIONS

D E M A N D

P U L P P R I C E

UWF demand in 2018 was stronger in the US than in Europe; in the second half, demand rebounded in Europe namely in Cut-Size

Hardwood pulp prices remained at high levels even after year-end softening; since the start of the year, pulp prices are showing signs of picking-up

North American producers continue to close capacity; recent announcement from GP will take out of the market 8% capacity in NA

Paper prices increase announced by all producers for beginning January in Europe and for March in the US

B A L A N C ES / D

P R I C EL E V E L

Order entry in the first month of January 2019 was 1.6% above 2018O R D E R B O O K

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Paper Benchmark has been gradually improving: 4 price increases during 2017, 4 price increases in 2018 and 1 price

increase for January 2019

Source: FOEX

EUROPEAN MARKET PAPER PRICE – A4 B-COPY

2014 20162015 2017 2018

UPWARD TREND IN PAPER PRICES IN 2017 AND 2018

A4 B Copy

25

600

650

700

750

800

850

900

950

1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89 93 97101105109113117121125129133137141145149153157161165169173177181185189193197201205209213217221225229233237241245249253257261265269

€/ton

Week

Last PIX (W9 2019):920 €/ton

Av. 2016:823 €/ton(Var. W1-52: -3.5%)

Av. 2017:815 €/ton(Var. W1-52: +4.1%)

Av. 2018:873 €/ton(+9.0%)

A4 B Copy

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26

<<NAVIGATOR PAPER PERFORMANCE IN FY 2018

• UWF sales volume of 1.513 kton (-65 kton YoY) with product mix

improvement:

+ Premium products share up to 54% (+5 pp YoY; +47 kton)

+ Mill brands up to 69% (+7 pp YoY; +47 kton)

• Navigator led 4 paper price increases in Europe (January, March,

July & October) and implemented several increases in International

markets and in the US

• Average sales price increased 8.5% YoY in spite of FX negative impact

(USD impacted ~30% of paper sales); with constant exchange rate

price increase would have been around 10%

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PULP AND PAPERDIFFERENT PRICE VOLATILITYIndex FOEX PIX (Europe)

300

400

500

600

700

800

900

1 11 21 31 41 51 61 71 81 91 101111121131141151161171181191201211221231241251261271281291301311321331341351361371381391401411421431441451461471481491501511521531541551561571581

2014 20162015 2017 20182009 20112010 2012 20132008

BHKP (Eur/Ton) A4 B-Copy (Eur/Ton)

A4 – B Copy: index for uncotaed woodfree paper (80 g/m2)

BHKP: index for bleached harwood kraft pulp (eucalyptus or birch) –Gross Price 27

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29

<<NON-INTEGRATED TISSUE BUSINESS IMPACTED BY PULP PRICE

• Overall tissue performance in 2018 impacted by the rise pulp prices (non-integrated capacity) and start-up of new tissuemill (which doubled the Group´s nominal tissue capacity)

• Global volume of tissue sold increased 14% YoY, while converted products grew by 27% already including converting salesfrom new mill

• Average sales price 7,5% higher YoY due to improvement in product mix (decreased weight of reels) and priceincrease; Sales increased 23% to € 91million (vs. € 74 million 2017)

39% Consumer

59% Away-from-Home

2% Parent Reels

51% Portugal

35% Spain

13% France & Others

Revenue by segment

(2018)

Revenue by geography

(2018)

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30

Ful l Year 2018 <<

2018: a record year for turnover, EBITDA and net profit

Lower volumes of pulp and UWF paper due to production stoppages

Average price for pulp, paper & tissue improved and offset production loss

Total Capex of 216 M€ with conclusion of expansion projects

Strong generation of FCF of € 211 million

In millions € YEAR2018

YEAR2017

%CHANGE 18/17

Turnover 1.692 1637 3.3%

EBITDA 455 403 12.7%

EBITDA/SALES 26.9% 24.7% 2.2 pp

ROCE 16.2% 13.6% 2.6 pp

CAPEX 216.5 114.7 101.8

Net Debt/EBITDA 1.50 1.72 -0.22

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31

1.132 1.095

1.3851.488 1.502 1.531 1.542

1.6281.577

1.6371.692

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

272

222

400 385 385350

328

390 397 404

455

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

+49% +68%

Showing consistent and strong financial growth in the last 10 years, Navigator recorded in 2018 record values for turnover and EBITDA

Turnover in Million €. EBITDA in Million €.

FINANCIAL PERFORMANCE IN 2018: A RECORD YEAR

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Note

135,7

32

<<

2018 – EBITDA of 455 M€

Positive impact of pulp and paper prices in EBITDA

Price effect includes 25 M€ negative impact of FX

Volume

403,8

R17 Price

-54,4

-27,2

Costs Pellets, Anti-Dumping

& Others*

455,2

R18

EBITDA

M €

-2,7

* Others include change in biological assets (namely Mozambique)

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Outlook for 2019

PULP PAPERStable outlook forUWF prices in 2019:

No foreseeable change in market conditions for pulp and paper in the near future and main concerns remain consequences of increasing trade tensions and impact on exchange rates

Prices should remain stable at a high level

Navigator implemented another price increase in European markets in January and announced another one in the US for March

Order book remains solid

2019 challenges: increase volumes available for sale; higher costs for energy and wood

TISSUENavigator successfully implemented a price increaseannounced for end 2018

OUTLOOK

33

<<

Ramp-up of integrated tissue mill will bring additional volumes

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01

T A B L E O F C O N T E N T S

Appendix Key Data

02Market Update

03 04Overview Development

01 02 03 04

34

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216,5

6,5

128,8

81

CAPEX Expansion/DevelopmentCapex*

Maintenance & recurringcapex

Regulatory Capex

37

<<CAPEX OF € 216 MILLION in 2018( V S . € 1 1 5 M I L L I O N )

M €

CAPEX

* Includes Po3 + Tissue Cacia + Heavy Weights

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ORGANIC DEVELOPMENT AND DIVERSIFICATION IN THE LAST GROWTH CYCLE

New cycle includes: Tissue expansion, Pellets, Pulp expansion, Heavyweights paper

38

€ 24 M € 38 M € 45 M€ 87 M

€ 70 M

€ 130 M

0

50

100

150

200

250

300

2015 2016 2017 2018Current Business New Cycle

€100 M

Net Debt/EBITDA <= 2.0

€128 M

For 2019, Capex will include maintenance, regulatory and start-up investments

€152 M€138 M

€115 M

€216 M

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<<

CACIA TISSUE PROJECT RECAP

Successful book-building of new clients in Portugal, Spain, France and UK

39

MAIN

HIGHLIGHTS

Converting line started in May

Start-up of reels production in September 2018 – currently inramp-up phase

4 converting lines already ongoing: two Domestics,Industrial and Napkins

Navigator becomes the 3rd largest producer in Iberia withproduction capacity of 130 kton reels and 120 kton converting

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Diversification of The Navigator Company’s

portfolio

(potential to grow up to 15-20% of the Navigator’s sales

in 2020-2025)

Synergies with our core business

(raw material Eucalyptus globulus)

Ability to develop a competitive advantage with pulp integration

(cost and quality advantage)

State-of-the-art technological

solution

(The Navigator Company’s DNA)

strong strategic rationale to double-down the business

40

TISSUE

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TISSUEMAJOR STEPS

2015

Acquisition of AMS(30 kton/year reels and 42 kton of converting)

2016Doubling of reels production capacity (reaching max. 60 kton/year) and increase converting capacity to 63 kton, improving contribution margin

2017

Decision to investin Cacia mill (70 kton/yearof reels and 55 kton of converting): € 120 million capex

2018Start-up of Caciamill in Q3 2018

The Navigator Company total capacity to reach130 kton/year of reels + 120 kton of converting

41

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THE NEXT GENERATION OF TISSUE IN CACIA

Configuration

42

Benefits Uniqueness

Capacity > 55 kton/y

2 Layer Headbox (2LH)

Shoe-press (SP)

Pulp Integrated

Only 28% of all tissue machines inEurope have a capacity > 55 ktons p.a.

Only 19% of all machines in Europehave a “Two Layer Headbox” (2LH)

In Europe, only 13 machines (5%)have a “Shoe Press” (SP)

Only 3 mills are fully integrated inEurope (one of them is our VVR mill)

Pulp Integrated + 2LH + SP + Capacity > 55 kton/y: Next generation Cacia formula

World-class state-of-the-art technology: better product at a lower cost

Cost competitiveness

Softness and higher % ofhardwood pulp

Bulk and energy savings

Cost competitiveness and better quality/softness

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0

50

100

150

200

250

300

NAVIGATORP LAY E R I N T I S S U E I N I B E R I A A F T E R E X PA N S I O N P R O J E C T#3

Estimated converting production capacity in Iberian Peninsula (kton) 2018

TOTAL CONVERTING CAPACITY 2018

43

Fini

shed

pro

duct

pro

duct

ion

(con

vert

ing)

250

120 120105 100

6050 50

71010202935364048

0

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<<

START-UP OF PULP EXPANSION AT F. FOZ

Optimization Project 3 Ecoefficiency:

Total CAPEX of € 82 million

Project completed and ramping-up

MAIN

GOALS

44

Increase the annual pulp production from 580,000 to650,000 tAD

Increase the efficiency of pulp process

Reduce wood and chemicals specific consumption

Implementation of BAT (ex: O2 delign)

Environmental advantage for flue gas and liquid effluentemissions

Collection and burning of diluted odorous gases

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Growth opportunity driven by increased demand in Asia and worldwide supply limitations

Attractive fundamentals of Mozambique:• High productivity • Proximity to Asia• Very low cost of land

Geographic diversification within a core business of The Navigator Company

45

Mozambique Project

P h a s e 1 :W o o d c h i p M i l l

Project Phases Strategic RationaleP h a s e 2 :P u l p M i l l

Investment: USD 260 M

Start-up in 2023

40 000 ha planted area

Investment: USD 2,5 B

Start-up in 2030

8000 new job opportunities

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Mozambique project

46

40 Million investedIn the Social

Programe

160employees

90% Mozambicans

Increase household

income Decreasing the poverty rate between 2015 -

2017 in the provinces of Zambezi & Manica

2000 km of new roads and

rural tracksAllowing better access to public transportation &

medical healthcare

Securing families well-

fare Securing food and generating income to 5800 families

30 new water holes

Securing access to potable water in the communities

1000 families received solar lamps

Can also be used to charge devices, allowing children to study more hours

I m p a c t o f S o c i a l P r o g r a m

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FOCUSED ON BUILDING THE FUTURE BIO-ECONOMY

RAIZ & Inpactusproject

Plantation trees Forestry residues

Biorefinery

Biomass deconstruction & separation

processes

1 tonnewood Pulp

Fibers

Chemicals & energy recovery

(combustion)Pulping By-products

Biomass components

Paper

Tissue

Market pulp

Heat and electricity

BiochemicalsBioproductsBiomaterials

Examples of bioproducts from biorefinery

Essential oils

Sugars for bioethanol and bioplastics

Thermoplastic bio composites

Lignin-based foams for thermo insulation

Bacterial cellulose for biomedical applications

Nanocellulose for paper coating and food additives

47

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Eucalyptus essential oils project

48

Exploring new opportunities with natural resources

Eucalyptus’ leaves

Biorefinery

Oils extraction

Distribution andSales

547 M€ Market

8.7% CAGRForest

& Extraction Company

Expectedconclusion:

2019

Capex: 5M€

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Bio-etanol project

49

Contributing to alternative energy solutions

Advanced Bio-fuels from Eucalyptus

Biomass

16% CAGR Market

20 M€ Capex

Expected conclusion: 2020/2021

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01

T A B L E O F C O N T E N T S

Appendix Key Data

02Market Update

03 04Overview Development

01 02 03 04

50

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Million euros 2012 2013 2014 2015 2016 2017 2018

Total sales 1,501.6 1,530.6 1,542.3 1,628.0 1,577.4 1,636.8 1,691.6

EBITDA 385.4 350.5 328.4 390.0 397.4 403.8 455.2

Operating earnings (EBIT) 286.2 233.7 218.3 282.9 230.4 255.0 303.2

Financial earnings -16.3 -14.1 -34.2 -50.3 -20.8 -7.7 -22.5

Net Profit 211.2 210.0 181.5 196.4 217.5 207.8 225.1

Cash Flow 310.4 326.8 291.6 303.6 384.6 356.6 377.2

Investment 30.1 16.9 50.3 148.5 138.6 114.7 216.5

Net debt 363.6 307.1 273.6 654.5 640.7 692.7 683

Million euros 2012 2013 2014 2015 2016 2017 2018

EBITDA/Sales (%) 25.7% 22.9% 21.3% 24.0% 25.2% 24.7% 26.9%

ROS (%) 14.1% 13.7% 11.8% 12.1% 13.8% 12.7% 13.3%

ROE (%) 14.3% 14.2% 12.4% 14.7% 17.8% 17.2% 19.0%

ROCE (%) 15.1% 12.9% 12.4% 15.7% 12.3% 13.6% 16.2%

Equity to assets ratio (%) 54.4% 52.5% 53.7% 50.0% 51.2% 48.6% 46.5%

Net debt/EBITDA 0.9 0.9 0.8 1.7 1.6 1.7 1.50

FINANCIAL FIGURES AND RATIOS FOR 2012-2018

51

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Current Average Cost of Debt (December 2018):

1.60%

53

Debt Rate Profile(December 2018):

Fixed Variable

68% 32%

CONSERVATIVE DEBT PROFILETaking advantage of favorable market conditions, Navigator is renegotiating debt

maturing in 2020, seeking to diversify sources of funds and to extend average tenure.

Current Credit Profile

BB Ba2

Standard & Poors Moody´s

Debt maturity profileTotal debt: € 765 million

Average maturity: 2.6 years

112

187226

10

210

10 10

2019 2020 2021 2022 2023 2024 2025-2028

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Presentation to investors

M A R C H 2 0 1 9