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1. Company Snapshot

1.a. Company Description

The Navigator Company, S.A. manufactures and markets pulp and paper products.The company operates through Market Pulp, UWF Paper, Tissue Paper, and Energy segments.It produces bleached eucalyptus kraft pulp, uncoated writing and printing thin paper, and domestic consumption paper under the Navigator, Multioffice, Discovery, explorer, Inacopia, Target, Pioneer, SOPORSET, INASET, and target plus brands for professional and home use.


The company also operates cogeneration units and two independent thermoelectric power plants.It operates in approximately 130 countries worldwide.The company was formerly known as Portucel, S.A. and changed its name to The Navigator Company, S.A. in February 2016.


The Navigator Company, S.A. was founded in 1953 and is headquartered in Setúbal, Portugal.The Navigator Company, S.A. is a subsidiary of Semapa - Sociedade de Investimento e Gestão, SGPS, S.A.

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1.b. Last Insights on NVG

The Navigator Company, S.A. faces challenges amid market volatility and economic pressures. The company's recent earnings call highlighted its resilience and strategic expansion efforts. However, investors are closely watching the stock's valuation, seeking clarity on its long-term prospects. With no major announcements driving the recent price action, the market is recalibrating expectations. The company's ability to navigate market challenges and deliver growth will be crucial in determining its future valuation.

1.c. Company Highlights

2. The Navigator Company's Q3 Results: Resilience Amidst Volatility

The Navigator Company reported a turnover of EUR 1,489 million for the first nine months of 2025, with an EBITDA of EUR 300 million and an EBITDA margin of 20.2%. Earnings per share (EPS) came in at EUR 0.05, below analyst estimates of EUR 0.08. Despite the challenging market conditions, the company maintained its competitive position in Europe and grew its sales volumes in all paper segments. As Antonio Redondo stated, "Navigator adapted quickly to challenging market conditions while maintaining its competitive position in Europe."

Publication Date: Nov -14

📋 Highlights
  • Financial Performance:: Q3 2025 turnover reached EUR 1,489M with an EBITDA of EUR 300M (20.2% margin), driven by cost optimization and diversification.
  • Cost Efficiency Gains:: Pulp/tissue cash costs fell to mid-2021 lows, while paper cash costs hit a two-year low, reducing production expenses by 20% between September 2024–January 2025.
  • Segment Growth:: Packaging and tissue contributed 32% of EBITDA and 29% of turnover, with tissue sales volumes up 14% (17,000 tonnes) and gKRAFT segment attracting 15% new customers.
  • Market Resilience:: Navigator increased European market share by 1.2% (26% total deliveries) and achieved 87% operating rates despite global pulp price volatility and European demand declines.
  • Sustainable Investments:: EUR 160M in CapEx allocated to ESG projects (61% sustainable), including biomass kilns at Aveiro and Setúbal, advancing decarbonization by 2026.

Financial Performance

The company's revenue growth was impacted by lower sales prices and rising cash costs. However, Navigator implemented cost-saving initiatives, resulting in a downward trend in production costs. Pulp and tissue cash costs dropped to near the lowest since mid-2021, while paper cash costs reached a two-year low. The successful execution of Navigator's diversification strategy helped offset the impact of subdued pulp and paper prices.

Segment Performance

Navigator's packaging and tissue businesses delivered solid year-on-year growth, accounting for 32% of EBITDA and 29% of turnover. The tissue sales volume grew to 177,000 tonnes, a 14% increase compared to the same period last year. The company's gKRAFT sustainable packaging segment saw a 15% growth in new customers, with a presence in over 40 countries.

Valuation Metrics

With a P/E Ratio of 10.13, P/B Ratio of 1.59, and EV/EBITDA of 6.17, the market appears to be pricing in a moderate growth outlook for Navigator. The Dividend Yield stands at 8.09%, indicating an attractive income proposition for investors. Analysts estimate next year's revenue growth at 5.1%, which may be achievable given the company's focus on diversification and cost management.

Outlook

Navigator is cautiously optimistic about the coming months, expecting conditions to improve in the pulp, tissue, and packaging segments. The company's Operational Excellence Initiatives 2025, 2026, are aimed at optimizing variable costs, streamlining operations, and improving efficiency. With a strong financial position and a net debt-to-EBITDA ratio of 1.85x, Navigator is well-positioned to navigate the challenging market environment.

ESG Initiatives

Navigator is making progress in its decarbonization roadmap, with two biomass power lime kilns in operation at its Aveiro and Setúbal sites. The company's CapEx dedicated to decarbonization is expected to conclude by 2026, with most emission reductions achieved by then. As Antonio Redondo stated, the large majority of projects are behind schedule, and the expected CapEx will be above the average investment level.

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.77%)

6. Segments

Uncoated Woodfree Paper

Expected Growth: 5%

The 5% growth of Uncoated Woodfree Paper from The Navigator Company, S.A. is driven by increasing demand for sustainable packaging, rising e-commerce activities, and growing need for paper-based products in education and communication. Additionally, the company's focus on innovation, cost reduction, and strategic partnerships contribute to its growth momentum.

Tissue Paper

Expected Growth: 4%

The 4% growth of Tissue Paper from The Navigator Company, S.A. is driven by increasing demand for hygiene products, expansion into emerging markets, and rising consumer preference for sustainable and eco-friendly products. Additionally, investments in production capacity and efficiency improvements have enabled the company to meet growing demand and maintain its market share.

Market Pulp

Expected Growth: 3%

The 3% growth of Market Pulp from The Navigator Company, S.A. is driven by increasing demand for sustainable packaging, expansion into emerging markets, and investments in production efficiency. Additionally, the company's focus on product diversification, such as fluff pulp and specialty pulp, contributes to its growth.

Energy

Expected Growth: 7%

The Navigator Company's 7% energy segment growth is driven by increasing demand for renewable energy, government incentives for sustainable practices, and strategic investments in biomass and wind power. Additionally, the company's focus on energy efficiency and cost reduction measures have contributed to the growth.

7. Detailed Products

UWF (Uncoated Woodfree Paper)

High-quality paper for printing and writing, suitable for a wide range of applications, including books, magazines, and commercial printing.

WF (Woodfree Paper)

Premium paper for high-end printing applications, offering excellent printability and durability.

LWC (Light Weight Coated Paper)

Coated paper for high-quality printing, offering excellent printability and a smooth finish.

MWC (Medium Weight Coated Paper)

Coated paper for general printing applications, offering a balance between quality and affordability.

Tissue Products

A range of tissue products, including toilet paper, paper towels, and facial tissues.

Packaging Papers

Specialty papers for packaging applications, including bag paper, sack paper, and wrapping paper.

8. The Navigator Company, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The Navigator Company, S.A. faces moderate threat from substitutes due to the availability of alternative products in the market.

Bargaining Power Of Customers

The Navigator Company, S.A. has a large customer base, but customers have significant bargaining power due to the availability of alternative products.

Bargaining Power Of Suppliers

The Navigator Company, S.A. has a diversified supplier base, reducing the bargaining power of individual suppliers.

Threat Of New Entrants

The Navigator Company, S.A. operates in a moderately competitive industry, with some barriers to entry, but new entrants can still pose a threat.

Intensity Of Rivalry

The Navigator Company, S.A. operates in a highly competitive industry, with intense rivalry among existing players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 33.63%
Debt Cost 4.60%
Equity Weight 66.37%
Equity Cost 8.46%
WACC 7.16%
Leverage 50.67%

11. Quality Control: The Navigator Company, S.A. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Navigator

A-Score: 6.5/10

Value: 6.4

Growth: 4.8

Quality: 5.7

Yield: 10.0

Momentum: 2.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
BillerudKorsnäs

A-Score: 4.8/10

Value: 7.9

Growth: 4.9

Quality: 5.0

Yield: 5.6

Momentum: 0.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Holmen

A-Score: 4.6/10

Value: 4.1

Growth: 4.6

Quality: 6.2

Yield: 3.1

Momentum: 1.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Mondi

A-Score: 4.5/10

Value: 6.1

Growth: 2.0

Quality: 2.8

Yield: 10.0

Momentum: 1.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
SCA

A-Score: 4.2/10

Value: 3.6

Growth: 1.8

Quality: 6.6

Yield: 2.5

Momentum: 2.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Stora Enso

A-Score: 3.7/10

Value: 8.3

Growth: 1.3

Quality: 2.1

Yield: 6.2

Momentum: 1.5

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

0.03$

Current Price

0.03$

Potential

-0.00%

Expected Cash-Flows