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Page 1: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/original/... · PPI Reels Germany minus 3% discount Oct. 2019 -834€/ton Highly Pressured Mills €/ton

M a r c h 2 0 2 0

Presentation to investors

Page 2: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/original/... · PPI Reels Germany minus 3% discount Oct. 2019 -834€/ton Highly Pressured Mills €/ton

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

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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

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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

<<

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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

4

Others

4

Page 6: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/original/... · PPI Reels Germany minus 3% discount Oct. 2019 -834€/ton Highly Pressured Mills €/ton

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)

Page 7: Presentation to investorsen.thenavigatorcompany.com/var/ezdemo_site/storage/original/... · PPI Reels Germany minus 3% discount Oct. 2019 -834€/ton Highly Pressured Mills €/ton

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

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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

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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

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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

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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

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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

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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

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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

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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

14

TISSUE

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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

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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

<<

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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 €

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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

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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

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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

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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

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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

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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.

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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)

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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

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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

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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

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<< 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)

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<<

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

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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

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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

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Refocus on

the Core

Ensure a Growth Outlook

Reinforce the Sustainability

Agenda

<<

PRIORITIES FOR NAVIGATOR

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M a r c h 2 0 2 0

Presentation to investors