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M A R C H 2 0 1 9
Presentation to investors
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
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
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)
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
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
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
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)
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
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
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
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
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
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
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
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
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
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%
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
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
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
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
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
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
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
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
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%
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
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)
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
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
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)
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
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
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
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
<<
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
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
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
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
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
<<
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
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
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
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
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€
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
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
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
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
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2019 2020 2021 2022 2023 2024 2025-2028
Presentation to investors
M A R C H 2 0 1 9