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M a r c h 2 0 2 0
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
T A B L E O F C O N T E N T S
Performance, Market Update
& Outlook
Solid & Resilient Business Model
Expansion & Diversification
01 02 03 04
2
Efficiency & Cost reduction
05
Sustainability at the Core
3
NAVIGATOR IN BRIEF
A solid business model, with significant resilience in adverse market conditions
Expansion and diversification of business portfolio into the growing tissue segment,
with other growth options available
Focused on efficiency and committed to additional cost reduction programs
Sustainability at the core – investing in people, aiming to be a leader in sustainability
and delivering sustainable returns
12M Performance, Market update & Outlook
<<
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
4
Others
4
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*
5 (*total nominal capacity)
0
200
400
600
800
1000
1200
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
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 30% of the industry capacity is non-integrated – excluding specialties capacity.
Source: RISI; The Navigator Company
6
NVG ATF
NVG FF
NVG SET
Partial/Non Integrated
PPI Reels Germany minus 3% discount Oct. 2019 -834€/ton
Highly Pressured Mills
€/ton
Cumulated Cap.
Specialties
Mondi East & IP East
Revenues by division FY
2019
Revenues by geography FY 2019**
*Other includes forest **Revenues by geography of pulp, paper and tissue ***Includes all energy sales in Portugal
The Group exports around 83% of pulp, paper and tissue sales
71% Paper
10% Pulp stand alone
8% Tissue
10% Energy
1% Other*
50% Rest of Europe
11% Africa
11% North America
9% Rest of the World
19% Portugal***
WITH GLOBAL SALES TO 130 DIFFERENT COUNTRIES Market pulp and paper sales accounted for over 81% of the Group’s
revenues, which are distributed to a diversified customer base
7
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 51% 14%
Mill Brands 70% 20%
Sheets 75% 69%
Operating rates 100% 90%
* Estimated industry average including Navigator
The Navigator Company market share in Western Europe
(amongst Europeans producers)
Source: Euro-Graph; EMGE
8
20%
22%
21%
13%
~50%
Total
Cut-size
Folio
Reels
Premium
Source: Euro-Graph; EMGE; RISI
UWF capacity has been decreasing at a faster pace than consumption
CAGR for UWF consumption
from 2009-2019:
CAGR for UWF capacity
from 2009-2019:
9
8,7 8,5 8,5 8,0 8,1 8,1 8,2
7,7 7,5 7,5 7,5
7,2 7,6
7,3 7,0 7,0 7,0 6,9 6,7 6,6 6,4 6,1
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Mill
ions
of
tonnes
Capacity Apparent Consumption
Evolution of UWF European apparent consumption
PRODUCING UWF - ONE OF THE BEST PERFORMING GRADES IN PRINTING & WRITING PAPER
UWF PAPER VS PULP: REDUCED VOLATILITY & STABLE RETURNS
Index FOEX PIX (Europe) – Gross Prices
A4 – B Copy: index for uncoated woodfree paper (80 g/m2)
BHKP: index for bleached hardwood kraft pulp (eucalyptus or birch) – Gross Price 10
400
500
600
700
800
900
1000
1 11 21 31 41 51 9 19 29 39 49 6 16 26 36 46 4 14 24 34 44 2 12 22 32 42 52 10 20 30 40 50 8
Eur/
Ton
Week
A4 B-copy
BHKP
2014 2018 2019 2015 2016 2017
UWF resilience come from its
Universality: available for
purchase by all consumers
Versatility: end use options
are wide
11
Uncoated
Woodfree Mechanical
Coated High-end magazines &
Communication materials (flyers, brochures, posters…)
Uncoated Trade books, directories
Coated Magazines &
communication materials
Printing & Writing
Graphic Papers
UWF is much less dependent on media and advertising
There are different grades to different uses and UWF is less exposed to digitalization
T A B L E O F C O N T E N T S
Performance, Market Update
& Outlook
Expansion & Diversification
01 02 03 04
12
Efficiency & Cost reduction
05
Sustainability at the Core
Solid & Resilient Business Model
ORGANIC DEVELOPMENT AND DIVERSIFICATION IN THE LAST GROWTH CYCLE
New cycle includes: Tissue expansion, Pellets, Pulp expansion, Heavyweights paper:
13
€ 21 M € 18 M € 31 M
€ 84 M € 118 M
€ 84 M
€ 132 M € 40 M
0
50
100
150
200
250
300
2015 2016 2017 2018 2019
Capex (M€)
Current Business New Cycle
€120 M
€158 M
€131 M
€152 M €138 M €115 M
€216 M
- Tissue: 205 M€ - Pellets: 125 M€ - Pulp expansion: 120 M€ - Heavyweights: 12 M€
In 2019, capex included mainly maintenance /efficiency , regulatory/environment and completion of expansion projects In 2020 capex will include maintenance /efficiency and regulatory/environment
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
14
TISSUE
0
50
100
150
200
250
300
NAVIGATOR
P 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
15
Fin
ish
ed
pro
du
ct
pro
du
cti
on
(co
nve
rtin
g)
250
120 120 105 100
60 50 50
7 10 10 20 29 35 36
40 48
0
AVEIRO (CACIA) TISSUE PROJECT RECAP
Capex of 120 M€
16
MAIN
HIGHLIGHTS
Successful book-building of new clients in Portugal, Spain, France and UK
Start-up of reels production in September 2018 – currently in ramp-up phase
4 converting lines: two Domestics, Industrial and Napkins
Navigator becomes the 3rd largest producer in Iberia with production capacity of 130 kton reels and 120 kton converting
<<
Growth opportunity driven by increased demand in Asia and worldwide supply limitations Attractive fundamentals of Mozambique: • High Forest productivity • Proximity to Asia • Very low cost of land Geographic diversification within a core business of The Navigator Company
17
MOZAMBIQUE PROJECT
P h a s e 1 : W o o d c h i p M i l l
Project Phases Strategic Rationale
P h a s e 2 : P u l p M i l l
Investment: USD 260 M (USD 100 M already invested)
Start-up in 2023
40 000 ha planted area
Investment: USD 2,5 B
Start-up in 2030
8000 new job opportunities
FOCUSED ON BUILDING THE FUTURE BIO-ECONOMY
RAIZ & Inpactus project
Plantation trees Forestry residues
Biorefinery
Biomass deconstruction & separation processes
1 ton wood Pulp
Fibers
Chemicals & energy recovery
(combustion) Pulping By-products
Biomass components
Paper
Tissue
Market pulp
Heat and electricity
Biochemicals Bioproducts Biomaterials
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
18
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
180 Researchers/Technicians
50 Research grants
2 Invited chairs
15.3M€ Total budget
19
T A B L E O F C O N T E N T S
Performance, Market Update
& Outlook
Expansion & Diversification
01 02 03 04
20
Efficiency & Cost reduction
05
Sustainability at the Core
Solid & Resilient Business Model
New Plan for cost optimization and operational efficiency be implemented in the second half of 2020 and
over the course of 2021 across the entire organization and all business operations, for variable and fixed
costs, bringing together the existing M2 and Corporate ZBB programs as well as a new project for Digital
Transformation in the Corporate Areas.
21
<<
FOCUS ON COST EFICIENCY
New Plan for cost optimization and operational efficiency:
-To be implemented in H2 of 2020 and over the course of 2021;
- Across the entire organization and all business operations, for variable and fixed costs, bringing together the existing M2 and Corporate ZBB programs as well as a new
project for Digital Transformation in the Corporate Areas.
M2: +100 new initiatives of cost reduction impacting EBITDA through the optimization and enhancement of: wood, logistics and chemicals prices
Zero Based Budget - reduction of fixed costs: running costs & overheads in non-industrial areas:
50 initiatives identified corresponding to 10M€ savings in 2020
T A B L E O F C O N T E N T S
Performance, Market Update
& Outlook
Expansion & Diversification
01 02 03 04
22
Efficiency & Cost reduction
05
Sustainability at the Core
Solid & Resilient Business Model
INVESTING IN PEOPLE & TALENT MANAGEMENT
23
G E N D E R D I V E R S I TY
3280 Employees in 2019
R E J U V E N AT I O N ( 2 0 1 3 - 2 0 1 9 )
T R A I N I N G &
L e a r n i n g C e n t e r
Middle and Senior management
70% - Male
30% - Female
Nº of Training sessions: 500
Management Courses: 117 courses/300 hours
Internal Training: 200 courses/165 hours
Reduction on average 6,5 years
Distribution by age: 11% < 30 years
56% between 30 – 50 years 33% > 50 years
Navigator is fully commited in preserving and improving forests
F O R E S T S
5.3 Million t CO2 eq
12 Million
Plants produced at Portuguese
Nurseries
108.269ha
Forest under management in Portugal
Million 3.3 Investment in protection
against forest fires
RAIZ Forest and Paper Research Institute
Improve foresty management
Increase eucalyptus Yields
24
80% Waste
Recovery Rate
90% Renewable
raw materials
Solar power plant
3,1 GWh/year
Saving
1.140 t CO2 /year
22.7M3/t
Products*
64% of paper is sold with FSC*, PEFC or Ecobel
seals of approval
More than
67% Primary energy used
from renewable sources (biomass)
0.246 t CO2 / t products*
I N D U S T R I A L O P E R A T I O N S
Fiber optimization
Bioproducts and biofuels research
*pulp and paper
25
Navigator puts in a lot of effort towards keeping carbon emissions at a minimum
Mozambique project
26
$120 Million
invested In the Social
Programe
200 employees 93% Mozambicans
25% female
Increase household
income Decreasing the poverty
rate between 2015 -2017 in the provinces of
Zambezi & Manica
5300 km of
new roads and rural tracks
Allowing better access to public transportation &
medical healthcare
Securing families well-
fare Securing food and
generating income to 7000 families
40 new water
holes
Securing access to potable water in the communities
2300 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
27
<<
ROADMAP TO A CARBON NEUTRAL COMPANY 2035
1st Company in Portugal committed to achieve Carbon Neutrality 15 years ahead of schedule
158 M € in planned investment towards
offseting carbon emissions
Forests managed by Navigator represent a carbon stock equivalent to 1.5 M cars driving the Earth’s circumference
Main investments: • New Biomass boiler at FF • Biomass in Lime Kilns • Combustion optimization
28
1.095
1.385
1.488 1.502 1.531 1.542 1.628
1.577 1.637
1.692 1.688
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
222
400 385 385
350 328
390 397 404
455
372
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
+54% +67%
Strong financial growth in the last 10 years
Turnover in Million € EBITDA in Million €
CONSISTENT SUSTAINABLE PERFORMANCE
24%
14%
18%
13%
13%
16%
25%
12%
15%
16%
14%
15%
24,7
%
11%
17%
16%
16%
16%
27%
13%
18%
17,
4%
18%
20%
22%
10%
17%
18%
15%
15%
The NavigatorCompany
Competitor 1 Competitor 2 Competitor 3 Competitor 4 Competitor 5
2015 2016 2017 2018 2019
COMPARING VERY FAVOURABLY WITH PEERS
Source:Euro-Graph; EMGE * Average includes Navigator
EBITDA Margin - Paper Peers (2015-2019)
Average for 2015-2019*: 17%
29
HISTORICAL DIVIDEND PAYMENT AND SHARE PRICE EVOLUTION
Year (payment) Ajusted dividend yield Total amount paid (million euros)
2014 12.3% 200.8
2015 14% 440.5
2016 11.6% 170.0
2017 10.7% 250.0
2018 6.6% 200.0
2019 7.0% 200.0
30
Jan 2014 – Feb 2020:
TSR: 63,7%
TSR annualized: 8,3%
€/share
0,0 €
1,0 €
2,0 €
3,0 €
4,0 €
5,0 €
6,0 €
7,0 €
T A B L E O F C O N T E N T S
Performance, Market Update
& Outlook
Expansion & Diversification
01 02 03 04
31
Efficiency & Cost reduction
05
Sustainability at the Core
Solid & Resilient Business Model
32
FY 2019 HIGHLIGHTS <<
Adverse market conditions with strong decline in pulp prices and weakening of European demand EBITDA declined 18.3% YoY pressured by lower pulp prices, lower paper volume and higher production costs Capex of € 158 million, mainly recurring & environment Free cash flow remained strong to € 186 million with lower capex and improvement in working capital Dividend payment of € 200 million in April and acquisition of owns shares totalling € 18 million
In millions € FY 2019
FY 2018
%CHANGE 19/18
Turnover 1 688 1 691 -0.2%
EBITDA 372 455 -18.3%
EBITDA /Sales 22% 26.9% -4.9 pp
CAPEX 158 216 -27%
Adjusted Free
Cash Flow
1
186 143 28%
Remunerated NetDebt/EBITDA
2
1.92 1.5 0.42
(1) FCF in 2018 adjusted from pellet receivables (2) IFRS impact: Net Debt / EBITDA 2019 = 2.05; Net Debt / EBITDA restated in 2018 = 1.6
33
<< 12M 2019 Recurring EBITDA
Increase in volumes is offset by decrease in prices and increase in costs (Energy, Wood and Chemicals)
A B C Pulp price fall offsetting paper price increase;
Positive volumes for pulp and tissue outbalance negative impact of paper volumes
Negative impact of variable costs: energy, wood, chemicals; improvement in external fibers and personnel costs
9
Volume
-45
Price
R18
-37
Costs Other
372
R19
455
-10
-83 (-18%)
A C B
UWF
Pulp
Tissue
UWF
Pulp
Tissue
Electricity unit cost
Natural gas unit cost
EURUSD
Fixed costs
External fibers
34
<<
NAVIGATOR PAPER & PULP PERFORMANCE
PAPER PERFORMANCE
• UWF sales volume decreased 4.4% FY 2019 vs FY 2018, and remained flat from Q3 to Q4.
• Several events impacted UWF volumes (slower ramp-up of heavyweights production, strikes in Setúbal and Figueira da Foz and unplanned stoppages) but production was also managed by Navigator to match current market situation.
• Average price for FY 2019 was slightly above FY 2018 and average Q4 vs Q3 price adjusted mainly due to product mix
• Navigator paper sales turnover down 4% FY 2019 vs FY 2018 to € 1,198 million and remained flat at 293 million in Q4 vs Q3 2019.
PULP PERFORMANCE
• Production impacted by prolonged maintenance stoppages and strikes
• Market sales in volume increased 24% FY2019 vs FY2018 and 9.5% in Q4 vs Q3 2019, sustained by increased availability of pulp due to lower paper integration and increase in capacity completed in 2018
• Higher volumes partially offset decrease in prices: pulp turnover decreased 1.2% YoY and was flat Q4oQ3 2019
PIX Europe
35
<< SIGNIFICANT CORRECTION IN PULP
PRICES THROUGHOUT 2019
Last PIX (14/04/2020): 680 USD/ton (0%) YTD 2020
Last PIX (14/04/2020): 627 €/ton (3.1%) YTD 2020
USD/ton BHKP EUR/ton BHKP
2016 2015 2014 2017 2018 2019
Average Pulp price in 2019:
- 855 $/ton 2019
- 762 €/ton 2019
Average Pulp price for 2014 - 2018 :
- 817 $/ton
- 701 €/ton 300
400
500
600
700
800
900
1000
1100
400
500
600
700
800
900
1000
1100
1 11 21 31 41 51 9 19 29 39 49 6 16 26 36 46 4 14 24 34 44 2 12 22 32 42 52 10 20 30 40 50 8
Eur
/ Ton
USD
/ T
on
Week
36
RECAP ON THE PULP MARKET
• During Q4 2018, market pulp demand experienced a significant decrease, falling 1.7 million tons YoY. China accounted for 91% of this reduction and Europe followed 2/3 months later. With Chinese buyers reducing pulp purchases, prices began to fall and producers stock started to build-up at Chinese (& European) ports
• From Q4 2018 to end Q1 2019, Chinese big pulp buyers reduced significantly their purchases, forcing a spiral of price reduction in pulp prices; producers stocks continued to increase while buyers used a significant part of their own inventories
• From Q2 onward, demand for hardwood in China picked up, increasing 8% YTD Nov
• With production cuts (maintenance and market driven) from major pulp suppliers in Latin America and Asia during Q3 and Q4 and stronger demand, stocks decreased significantly during H2 2019 (but still remained above normal levels)
• Demand in Europe remained weak at year end and prices continued to decrease during Q4 2019
• Bottom of price cycle has been reached; benchmark for prices in Europe has been stable for some weeks and prices in China have slightly increased since the beginning of the year.
<<
Source: PPPC; The Navigator Company
Source: PPPC; The Navigator Company; *The Navigator Company based on EMGE CS Index and Own Data – Indicative for sheeted products
37
UPDATE ON PAPER MARKET <<
YTD Nov 2019
UWF CWF UME CME
-2.6% -8.0% -11.5% -11.0%
Avg L5Y -0.3% -3.1% -4.0% -5.8%
Recent decline of P&W demand well above trend, indicating not only the effects of economic cooldown but also a destocking movement in key markets for Navigator, namely Europe and Middle East and North Africa.
-6.2%
Total
-2.3%
Global Printing & Writing Demand
100
125
65
Beginning 2018 Beginning 2019 End 2019
Level of Inventories - European Supply Chain*
(Index)
600
650
700
750
800
850
900
950
1 9 17 25 33 41 49 5 13 21 29 37 45 53 8 16 24 32 40 48 4 12 20 28 36 44 52 8 16 24 32 40 48 4 12 20 28 36 44 52
Eu
r/T
on
Week
2014 2018 2019 2015 2016 2017
Source: FOEX
EUROPEAN MARKET PAPER PRICE – A4 B-COPY
38
PAPER PRICES IN STABLE TREND
Last PIX (14/04/2020): 855 €/ton (-2.7 % YTD)
Average A4 B-COPY price in 2019:
- 903 €/ton 2019
Average A4 B-COPY price (2010-2019):
- 846 €/ton
Av. 2016: 823 €/ton (Var. W1-52: -3.5%)
Av. 2017: 815 €/ton (Var. W1-52: +4.1%)
Av. 2018: 873 €/ton (Var. W1-52:+9.0%)
<<
Av. 2019: 903 €/ton (Var. W1-52: -2.7%)
600
650
700
750
800
850
900
950
1 9 17 25 33 41 49 5 13 21 29 37 45 53 8 16 24 32 40 48 4 12 20 28 36 44 52 8 16 24 32 40 48 4 12 20 28 36 44 52 8
Eur/
Ton
Week
2014 2018 2019 2015 2016 2017
A v e r a g e p r i c e i n 2 0 1 9 a b o v e a v e r a g e p r i c e i n t h e l a s t 1 0 y e a r s
39
UWF MARKET CONDITIONS
D E M A N D
P U L P P R I C E
Paper demand falling above trend in 2019, facing a severe pipeline destocking; UWF continues to show the highest resilience among the major graphic papers;
Hardwood pulp prices seem to have stabilized in China and Europe
Several producers announced conversion / shutdowns of UWF in 2019 in Europe (-200 kton), US (-757 kton), partially offsetting new capacities entering the market; balance between new capacities and closures for 2018-2020 is estimated to be close to zero
Even though pix price avg. 2019 is still 3% above 2018 (903 € in 2019 vs 873 € in 2018), paper prices should remain under pressure (in the short term) especially in the USA and in some geographies and products in Europe
B A L A N C E S / D
P R I C E L E V E L
<<
40
<< GROWTH IN THE TISSUE BUSINESS
• Sales turnover increased to € 132 million, representing a growth of 45% in 2019 vs 2018;
• Global volume of tissue sold increased to 96 kton (52% YoY), sustained by new capacity in Aveiro;
• Sales of finished products increased 22% to 75 ktons and reels increased 11x to 21 ktons; even though prices for both finished products and reels increased YoY;
• Average tissue price reflects mix effect of higher percentage of reels in global sales
37% Consumer
2018: 39%
40% Away-from-Home +C&C
2018: 59%
23% Parent Reels
2018: 2%
40% Portugal
2018: 51%
30% Spain
2018: 35%
30% Extra-Iberia
2018: 13%
Revenue by segment
(2019)
Revenue by geography
(2019)
41
<<
CAPEX OF € 158 MILLION ( V S 216 € M I L L I O N)
M €
CAPEX
* Conclusion of Tissue Cacia + Heavy Weights + Pulp Capacity increase in Figueira da Foz
158 16
24
118
CAPEX FY19 Expansion/ otherCapex
Environment &Regulatory
Maintenance &recurring capex
Current Average Cost of Debt (March 2020):
1.50%
42
Debt Rate Profile (March 2020):
Fixed Variable
67% 33%
CONSERVATIVE DEBT PROFILE
Taking advantage of favorable market conditions, Navigator is renegotiating debt, seeking to diversify sources of funds and to extend average tenure.
Debt maturity profile
Total debt: € 1,055.2 million Average maturity: 3 years
118,19
286,53
52,54
298,54
100,26 75,70
123,40
2020 2021 2022 2023 2024 2025 2026-2028
PULP PAPER • Increase in global demand for pulp,
sustained by China and recovery in Europe
• Producers inventories corrected throughout H2 2019, but stocks at ports still high (+1.5 M tons vs “normal”)
• Recent price increases announced in Softwood (China, Europe & North America) and Hardwood (China & North America)
• Uncertainty remains over economic impact of Corona Virus and trade wars
TISSUE
• Demand continues to present interesting growth rates, even in a context of new capacity additions
• Group will further consolidate its new operations and increase in global sales as the industrial operations matures.
43
Adverse market conditions, operational issues and inflation in some key production cost factors have pressured results Additional cost efficiency measures planned for 2020 and 2021
• Low pulp prices continue to pressure paper price
• Pipeline stocks at key markets for Navigator at low levels at the beginning of the year
• Pulp and Paper mills in Finland stopped production for 15 days due to strikes, impacting UWF and pulp output
• Political instability in Middle East and market disruption via trade wars may impact negatively demand
Outlook & Challenges for 2020
<<
44
Refocus on
the Core
Ensure a Growth Outlook
Reinforce the Sustainability
Agenda
<<
PRIORITIES FOR NAVIGATOR
M a r c h 2 0 2 0
Presentation to investors