NVG.LSNVG.LSLIS
Loading
Operator: Good morning. We welcome you to The Navigator Company Full Year 2025 Results Presentation. [Operator Instructions]. I'll now hand the conference over to Ana Canha. Please go ahead.
Ana Canha: Ladies and gentlemen, welcome to The Navigator Company conference call and webcast for the fourth quarter and full year results. We are joined today by the following directors: Antonio Redondo, Fernando de Araujo, Nuno Santos, Joao Le, Dorival Almeida and Antonio Quirino Soares. As usual, we will start with a short presentation followed by a Q&A session. You can access the presentation through the links on our website, and you can also send your questions via the webcast platform. Antonio will begin by presenting the main highlights for the quarter. I will now hand over to Antonio.
Antonio Redondo: Thank you for joining us today. I am very pleased to be here once again and to share with you our fourth quarter and full year results. In the toughest market environment in decades, Navigator was able to maintain a strong market position, supported by its international footprint and the increasingly diversified business model, enabling volume growth and market share gains. Portfolio transformation remains a key driver of resilience. Vertical integration, operational flexibility, innovation and sustainability focus continue to underpin our competitive advantage as you'll see in today's presentation. I will begin with Slide 5 with an overview of the key highlights. 2025 was defined by persistent geopolitical tensions and rapidly shifting global landscape marked by high volatility, commercial defense barriers such as tariffs, weaker consumer confidence and very limited market visibility. In this environment, the pulp and paper sector faced particularly challenging conditions. From April onwards, pulp prices in China declined sharply with knock on effects in Europe. At the same time, uncoated woodfree consumption fell, growth in tissue and packaging slowed and in many products, operating rates reached unsustainably low levels across several regions. The industry also faced increased energy and chemical costs this year, further pressuring margins. Navigator's strategic diversification played a key role in protecting results, with tissue and packaging accounting for 29% of the turnover, but 32% of group's EBITDA. In tissue, we continue to successfully scale up operations and capture synergies. Turnover increased by 6% year-on-year, supported by the integration of Navigator Tissue UK in May 2024. Around 80% of sales are now international with U.K., Spain and France as our core markets. Packaging also delivered strong performance with turnover up 8% year-on-year, volumes in tons up 11% and paper area in square meters at 17% reflecting the growth of the Flexible Packaging segment with a shift to lower grammage products. The rebuild of PM3 in Setubal to further focus on low basis weight flexible packaging is progressing as planned. In printing and writing, we reinforced our competitive position with uncoated woodfree volumes up 6% year-on-year in a shrinking market and market share of European deliveries increasing to 26%. Looking ahead, we start 2026 with a positive final investment decision for the new tissue capacity in Aveiro, further strengthening our growth and resilience profile. Turning to Slide 6, we can clearly see the resilience of Navigator business model. The key strength of Navigator is its ability to generate strong cash flows, underpinned by our vertically integrated model, and leading cost positions in pulp, uncoated woodfree paper, tissue and Flexible Packaging in Europe. Over recent years, these cash flows have been strategically reinvested to strengthen our core business and diversify our portfolio, supporting long-term value creation. Since 2019, we have invested EUR 1.31 billion, including EUR 241 million in M&A and distributed a further EUR 1.32 billion in dividends. Our diversification strategy is clearly paying off. Recent international expansion and portfolio diversification have strengthened Navigator's results in tissue and packaging, providing more balanced and resilient earnings profile. This robust position enables Navigator to consistently outperform its peers as demonstrated once again this year, even in very challenging market conditions, underscoring its resilience and competitive edge. Strategic CapEx boosted by next-generation new funding and started in 2023 is phasing out in 2025 and will be fully completed by 2026. Last year, CapEx totaled EUR 210 million, with 60% classified as value-added sustainability investments, making a strong contribution to reducing future costs. While maintaining a strong financial position with net debt-to-EBITDA ratio at 1.87x. I will now hand it over to my colleagues, who will walk you through the results in more detail and share some insights on our different business areas we have been doing. Fernando will start by commenting on financial highlights. Fernando, please go ahead.
Jose de Araujo: Thank you, Antonio. Turning to Slide 7. We can look at our debt maturity profile. Over the past 2 years, we increased the average debt maturity to 5 years, maintaining a well-staggered repayment profile and strengthening the indexation of debt to sustainability indicators to 90% versus 65% in December 2024. Also, Navigator continues to enjoy ample liquidity, EUR 390 million as of 31 of December. At the end of 2025, 70% of the total debt issue was remunerated at a fixed rate, either directly or through interest rate hedging instruments. It should be noted that despite the general rise in market rates compared to the last financing cycle, the average cost of finance at the end of December remains low at around 2.7%, an increase of 0.3% -- 0.3 percentage point, sorry. Turning to Slide 8. We can take a closer look at the main impacts on EBITDA in a year-on-year comparison. EBITDA stood at EUR 375 million, down 30% year-on-year, with an EBITDA margin of 19%. It should also be noted that given its size, integration of U.K. tissue business converting only brings down the group's EBITDA margin by 1.2 percentage points, which without this additional operation would have been 20.3%. The downward trending in uncoated woodfree and pulp sales price was pressured by falling benchmark index. Changing our product and geographical mix also influenced our average sales price as Antonio will explain further. On a positive note, the paper packaging and tissue segments saw a significant increase in sales volume. In 2025, cash costs were impacted by a combination of simultaneously and longer than normal planning and unplanned maintenance stoppage in our pulp mills, Figueira da Foz, Aveiro and Setubal. This includes a temporary shutdown following a small fire in the bleaching area at Setubal in July. There were no injuries and operations were fully restored within 2 or 3 weeks. This maintenance stoppage reduced energy generation from biomass during the period and led to higher natural gas consumption. Cash costs were also affected by the U.S. customs tariffs and the resulting increase in antidumping duties. Despite these headwinds, cash costs ended the year below the level at the start of the year. Finally, the volatility of the EBITDA was mitigated by our financial risk management strategy, including the hedging for energy price and foreign exchange which offset negative impact of negative evolution of the U.S. dollar and the British pound. However, the energy hedging strategy implemented in 2025 delivered [indiscernible] effectiveness, particularly in the first quarter when its impact was most critical. Joao will speak about the key projects focused on operational efficiency and portfolio diversification. Mr. Joao, please go ahead.
João Cabete Gonçalves Lé: Thank you, Fernando. Turning to Slide 9, please. Navigator strategy is built on a responsible business model grounded in the belief that sustainability without performance has no impact and performance without sustainability has no future. This balance underpins responsibility, long-term growth and value creation. Drawing on decades of experiencing sustainable forest management, supported by science and technology, we have developed sector leading industrial assets and advanced R&D capabilities. Our R&D efforts span the full value chain from genetic improvement, pest and disease control, soil and climate characterization to support forestry management, industrial operations consumption efficiency and product development. At the same time, we continue to explore new long-term opportunities for product and business diversification, focused on adding value to Portuguese eucalyptus forests through new bioproducts, biomaterials and biochemicals. Despite challenging market conditions, we continue to invest in diversification and sustainable transformation. In 2025, we completed several key investments across all segments to strengthen business resilience. This includes the new chemical recovery boiler at Setubal, which will significantly enhance the mills operational and environmental performance. It will reduce malodorous emissions and marks a key milestone in our industrial decarbonization journey, cutting emissions by around 136,000 tons of CO2 per year, while enabling the capture in the incineration of noncondensable gases. And also, the oxygen delignification line in Setubal due to start up in April 2026, which will enable the plant to reduce consumption of chemicals at the pulp bleaching stage as well as improving the quality of the effluent from this industrial site. AI-driven control systems reduced process variability by around 20% and lowered bleaching chemical consumption by 55%. The reduction in variability reflects, for instance, an internally developed advanced process control applied to PCC incorporation and chemical savings resulting from APC projects implemented in pulp bleaching. We also scaled up Navigator hub, which generated EUR 300 million in online sales in 2025 and is now serving all business units, strengthening both our commercial reach and digital resilience. As already mentioned by Antonio, the evolution of our portfolio is a key pillar of our resilient business model. The tissue segment illustrates this shift growing from 5% to around 25% of revenues over the past decade through acquisitions and organic growth, supported by in-house R&D Alongside this development, sustainable packaging solutions designed and scaled up entirely on the basis of internal expertise, R&D and technology already account for 4% of sales, an important milestone in the fast-growing segment, achieved purely by repurposing existing uncoated woodfree assets without any significant investment. And of course, this enhances the operational flexibility of our assets, preserving the ability to produce uncoated woodfree grades while also enabling the production of a broad range of packaging grades. In 2025, we approved the rebuild of PM3 at Setubal to produce low grammage flexible packaging, equipping the machine with state-of-the-art technology to enhance flexibility, energy efficiency and product quality and to meet growing international demand. Our diversification has reduced our dependence on uncoated woodfree paper, which declined from 75% of revenues in 2017 to around 57% in 2025. Not due to lower turnover, but to growth in new segments, while uncoated woodfree revenues remained stable at EUR 1.2 billion. Uncoated woodfree remains a resilient core business, supported by highly competitive assets, world-class quality and strong new brands. This evolution reflects a disciplined integrated strategy focused on long-term value creation, innovation and responsible resource management. I will now hand over to my colleagues for a brief commentary on each of the business segments, starting with Quirino will comment on pulp and paper prices. Quirino, please?
António Soares: Thank you, Joao. Good afternoon. Moving to Slide 11, we have the evolution of pulp and paper prices. Between April and August, the pulp price index for pulp in China, BHKP sharply decreased, largely driven by overcapacity in the pulp and paper sector. This overcapacity resulted from a sudden and expressive increase in integrated pulp capacity in China, alongside the local wood available at competitive prices, lower than imported wood. This occurred amid the current situation of severe tensions in international freight and the reduction in demand in several paper segments across the different world regions. Although this downward cycle has been shorter than previous ones. It started from a significantly lower peak, reflecting a structurally weaker base than in previous cycles. Recovery gained momentum in the first quarter with a clear improvement in pricing in China. Even so 2025 was the weakest year for pulp pricing in nominal terms since 2016, excluding 2020. Average prices in China fell to around $540 per ton on average, which is down 16% year-on-year. In real terms and from the perspective of both Iberian and Brazilian producers, prices were even weaker than 2016 and 2020 once inflation and exchange rate effects are taken into account. Transforming 2025 real prices as the worst prices in decades. In Europe, prices followed the volatile path after falling to $1,000 per ton at the start of the year, benchmarks recovered in the spring. Weakened again through the summer and then rallied in the fourth quarter. The hardwood pulp benchmark ended the year at $1,100 per ton reflecting this late year recovery, although average prices remained 12% below 2024 levels. In 2025, the European benchmark for office paper, PIX A4-Copy B, averaged EUR 1,003 per ton, which is down 9% year-on-year. This decline was more moderate than in hardwood pulp, where European benchmarks fell by 15%. Importantly, despite these adjustments, uncoated woodfree price levels remained structurally strong, still around EUR 149 per ton or 17% above 2016 to 2019 average. As Fernando mentioned, Navigator's average sales prices in Europe broadly follow benchmark trends, supported by 2 complementary strategies. On the one hand, we increased penetration in both economic and standard segments to quickly capture additional volumes, which weighs on the average prices, given our traditional premium rich product mix. Simultaneously, we reinforced pricing discipline on higher value-added products, particularly under our flagship brands, which achieved an 80 percentage point increase in price premium during the year of 2025. In international markets, paper prices were affected by both the weaker dollar and more significantly by the sharp decline on the China pulp market index. This dual approach on pricing has helped us remain competitive and responsive to market dynamics, balancing volume growth with value retention. Moving please to Slide 12. We have summarized the main developments on the uncoated woodfree markets. Apparent global demand for printing and writing papers was down by 2.4% year-on-year. Uncoated woodfree remained the most resilient grade declining by just 1.5% compared with a drop of 4.8% on uncoated woodfree and 3.2% decline in mechanical papers. This resilience reflects the versatility of uncoated woodfree end users, which has constantly outperformed other grades over time. In Europe, however, apparent uncoated woodfree demand declined by 5% year-on-year, driven by weaker deliveries from European mills and a sharp reduction in imports. In fact, intra-European deliveries fell by 5%, while imports dropped by 10% year-on-year, confirming a significant slowdown in the effective demand across the region. Despite a significant increase in uncoated woodfree capacity in Asia of 4.3 million tons between '24 and 2025, which more than offset the capacity reduction of 1.5 million tons in Europe and the U.S. In the U.S., the decline was not as significant with consumption down by 3.8% year-on-year. At the same time, the closure of a major domestic mill increased the structural need for imports, which rose by 16%, partly also driven by anticipation of new tariffs last year. This tighter supply environment, combined with tariff impacts has supported higher price levels in the U.S. market, which are expected to remain elevated. Navigator's operating rate measured as deliveries over capacity stood at 87%, up by 8 percentage points year-on-year, whilst the rate for European industry recovered slightly from 79% to 81%, up by 2 percentage points. In 2025, Navigator increased its order intake by 13% year-on-year in volume, marking our strongest performance since 2021, and surpassing even the peak levels achieved in 2022, a particularly strong year for uncoated woodfree. Nuno will now give some more market context on the pulp business.
Nuno de Araújo Dos Santos: Thank you, Quirino. Turning to Slide 13. As Quirino just mentioned, in 2025, the pulp market came under severe pressure, most visibly through the sharp decline in pulp prices in China from April onwards with a clear spillover effects into Europe. This weak pricing environment was driven by several structural factors. First, global overcapacity increased significantly with major hardwood pulp expansions in both Latin America in '24 and China over the last 5 years as Chinese producers pursued upstream integrations. Second, China saw a rapid rise in the use of domestic wood by smaller and midsized mills, supported by very low cost CapEx, temporary availability of local wood diverted from the construction sector and strong state backing in areas such as financing, employment and energy. Third, overcapacity in paper production and weak domestic demand in China compressed paper prices and in turn pulp prices, with operating rates across many segments falling to and sustainably lower levels. At the same time, demand softened in Western markets, particularly in printing papers, contributing to a decline in European hardwood pulp consumption alongside slower growth in tissue and packaging. Finally, trade tensions, tariffs and geopolitical uncertainty increased volatility, shuffled trade volumes and accelerated the downward pressure on prices. Nevertheless, at the global level, demand for market hardwood pulp grew by 6% year-on-year. China remained the main growth engine with demand up 8% while the rest of the world grew by 7%. This contrasted with Europe where demand declined by 1% in line with weaker printing paper consumption. In United States, demand fell by 3% following heavy restocking in '24. The strongest mobile growth came from eucalyptus pulp, up 8% in '25 driven by a 10% increase in China, while Europe remained broadly stable. This trend continues to strengthen eucalyptus pulp share with the hardwood bleached chemical pulp market. Looking at tissue performance on Slide 14. European tissue demand grew by 1.2% following strong growth of 6.3% in '24. Navigator's tissue sale increased by 5% year-on-year, with turnover increasing by 6%. Our tissue business operates through 2 complementary models, an integrated Iberian operation, covering paper production and converting and the U.K. operation focused exclusively on converting while margins in the U.K. are structurally lower, this model enhances scale and market research. To strengthen our position as a leading paper tissue producer and enhance operational resilience, Navigator launched a strategic plan in '25 to consolidate its U.K. tissue rolls operations with completion planned for '26. Rolls and possibly wipe separations are being streamlined from 5 to 2 strategic hubs, the existing Leyland and the new site in Leicester, optimizing coverage of Northern and Southern England, improving proximity to key consumer markets and strengthening logistics efficiency. Operations at the new sites are expected to start in the first half of this year, and the main workforce transition has been successfully completed with an investment of approximately GBP 18 million, this project is expected to deliver cost efficiencies through the optimization of personnel expenses and operating costs, driven by the integration, centralization and increased scale of operations. These benefits are expected to be realized from '27 onwards, following the completion of the restructuring with an estimated improvement of 2 to 3 percentage points in converted EBITDA margins, positioning them above the industry average. Overall, acquisitions in Spain and the U.K. have improved our geographic balance and resilience with finished products accounting for 98% of tissue sales and a strong focus on the consumer segment, which now represents around 83% of volumes. Dorival will now comment on the main developments in packaging.
Dorival de Almeida: Thank you, Nuno. Now turning to Slide 15. In 2025, the European market for machine glazed and machine finished kraft paper grew by 2.6%. Navigator's packaging business outperformed the market with sales of 8%, supported by 11% growth in tonnage and 17% increase in paper area sold, reflecting deeper penetration in light weight low grammage segments. The strongest performance came from flexible packaging, particularly low grammage, food and nonfood applications alongside release liners for family and hygiene and personal care. These priority segments benefit from the technical and cost advantages of eucalyptus fiber where Eucalyptus Globulus is a clear differentiator. This growth is fully driven by our own brand, kraft structured across 3 segments: bag, flex and box, where innovation based on eucalyptus fiber has been key to strong market acceptance and recognition. The packaging segment delivered a consistent performance over the year, supported by a gradual increase in sales. Today, 71% of our sales are in Europe, with the remaining 29% in overseas markets, mainly in the Americas and the MENA region. As part of this industrial transformation, we approved in 2025, the rebuild of #3 paper machine at the Setubal complex to produce low grammage flexible packaging. This EUR 30 million investment running from 2025 to 2027 equips the machine with state-of-the-art technology, enhancing flexibility, energy efficiency and product quality. The converted PM3 will produce around 90,000 to 100,000 tons per year, and it is expected to start up at the end of the third quarter of 2026 at a fraction of the cost, 5 to 7x lower than a greenfield project of approximately the same capacity. While we're still preserving our indusial flexibility to produce both uncoated woodfree and flexible packaging on the same machine. This conversion transforms PM3 from a mid-tier uncoated woodfree asset into a well-positioned first quartile competitive flexible packaging machine, leveraging our vertical integration and the cost advantages of eucalyptus fiber. As a result, Navigator will become the fourth largest producer of low grammage flexible packaging in Europe, strengthening our position in a market growing at 2.5% to 3% per year through 2035. Now I hand over to Antonio for a wrap-up of the full year results.
Antonio Redondo: Thank you, Dorival. Let's please turn to Slide 16. As we said today, 2025 was the toughest year in decades for our industry. Yet, Navigator has emerged better positioned for growth. Our international footprint and diversified business model enables to capture opportunities, deliver higher volumes and continue expanding market share even in a highly challenging environment. At the same time, we have repositioned the group for future growth. Key initiatives include the consolidation of our U.K. tissue operations, the investment decision for the PM3 rebuilding packaging and the investment decision for the new tissue machine in Aveiro, each reinforcing efficiency, scale and resilience. Our diversification strategy is clearly delivering results and help to capture the impact of sharply falling price in pulp and uncoated woodfree paper. In packaging, sales benefited from the increase of our flexible packaging portfolio initiated in 2023. In tissue, we continue to scale operations and capture long-term synergies. And an execution plan is underway to consolidate U.K. operations and enhance efficiency. Alongside this, we remain further focused on our core operations, business transformation and innovation, delivering a meaningful reduction in future cost intensity. These investments in efficiency and environmental improvement aim to ensure the longevity and continued exceptional margin generation of our world-scale high-tech mills. This transition reflects a commitment to leveraging our core expertise while expanding into adjacent markets with high growth potential. All of this has been achieved while maintaining disciplined and conservative financial policies with net debt to EBITDA at a solid 1.87x. A brief note on capital allocation, specifically regarding dividends. Considering Navigator's performance in 2025, the Board of Directors will propose to the General Meeting of Shareholders the distribution of dividends totaling EUR 80 million. I will now hand over to Nuno and Dorival, who will comment on the investment decision for a new tissue machine. I will now hand over to Nuno and Dorival, who will comment on the investment decision for a new tissue machine?
Nuno de Araújo Dos Santos: Thank you, Antonio. Let's move on to Slide 17. As part of our growth strategy in the tissue segment, we took an important step in '25 by launching a feasibility study for a new tissue paper machine. This project would add around 70,000 tons of annual capacity, specifically to support our U.K. operation acquired in '24. The U.K. business has strong converting capacity of around 130,000 tons per year, but currently relies entirely on external reels, making this investment a key enabler of integration, efficiency and resilience. The idea behind it is simple to create a more balanced vertically integrated operation. By producing our own reels, we reduced dependence on external suppliers, strengthening the sustainability of the process and improve overall efficiency. It also allows us to develop products that are even better aligned with the needs of our U.K. customers while leveraging the sustainability forestry base we have in Portugal. Dorival will now provide some color on the CapEx and investment details.
Dorival de Almeida: Following this feasibility study, last week we moved ahead with the final investment decision. The new machine will be installed at our Aveiro industrial complex, which was designed from the beginning to accommodate a second tissue machine. This location brings several advantages, shared infrastructure, integrated pulp supply, lower drying and transportation costs and operational efficiency from being next to the first tissue machine, the TM1. To further strengthen efficiency and resilience, we are implementing a tailor-made logistics model at the port of [ Aveiro ] dedicated to shipping reels in mega containers, instead of breakbulk. This new model delivers significant logistics savings per ton driven by lower handling costs, fewer movements and reduced variable costs. Today, reels supply to our U.K. operations are shipped as breakbulk. Moving to this containerized solution will also bring qualitative benefits, including more efficient handling, lower loss rates and reduced environmental footprint through more efficient shipping. The investment totals around EUR 115 million spread across 2026, '27 and '28 with start-up planned for April 2028. The project will also benefit from support under the Portugal 2030 program. Antonio will now comment on the outlook.
Antonio Redondo: Thank you, Dorival. Let me share our view on the current market environment and within the very limited visibility, our outlook for the coming months. Globally, risks persist, particularly around geopolitical instability in different regions across the world, protectionism, economic fragmentation and financial vulnerabilities in major economies remain a concern. While the recession does not appear imminent, growth is still relatively subdued and ongoing uncertainty continues to weigh on investment and international trends. Even with limited visibility, we remain cautiously optimistic about near-term market development. Looking ahead, pulp prices are expected to strengthen in the first half of 2026, supported by improving momentum both in China and Europe. In the second half, our downside scenario points to price stability rather than any significant deterioration. Demand in 2026 is expected to be broadly in line with 2025 with growth in China offset by flat outlook in Europe. On the supply side, new capacity additions will be limited. In contrast with 2025, no significant new capacity is expected to come online this year, considering that most of the 2.7 million tons of capacity in projects announced for 2026, including 1.3 million in China and 1.4 in Indonesia is due to start up only in the final part of the year, and this impact will essentially be felt in 2027. The project in Indonesia involves 2 lines, each with a capacity of about 1.4 million tons, of which around half is intended for the market. But only the first of these lines is expected to start at the end of the year, joined by the second some months later with an impact essentially in 2028. Finally, recent natural disasters in Indonesia have been linked by local authorities to continuous deforestation, leading to the revocation of forestry license. The Indonesian government have linked the scale of the disaster to the high level of deforestation in the past 2 decades, laying the blame on local industry and canceling the forestry licenses of some 22 companies, which supply wood to Indonesian's major exporters of cellulose pulp and coated woodfree paper and tissue, covering an area of more than 1 million hectares. The tragedy in Sumatra highlights the structural challenges faced by the Chinese, Indonesian producers operating in the country, including their inability to certify forests and under internationally recognized systems. It should also reinforce concerns among European authorities regarding Indonesia's risk profile for wood and wood products under the EUDR framework. This has tightened wood supply and supported prices while reinforcing the strategic importance of certification and compliance with EUDR requirements. In the paper segment, the first quarter of this year began with renewed optimism. Navigator led the market by announcing paper price increases, which were subsequently followed by other key players. In December last year, we announced a price increase in Europe of 5% to 8% and in overseas markets of 5% to 11%. The increase in overseas was already followed by a second increase of $30 per ton in February this year. We also announced price increases of 5% to 8% in the United States, effective from next March onwards. The impact of these global price increases in printing and writing paper will be felt mainly in the second half of this quarter. And as a result, we expect average prices in the first quarter to be above fourth quarter last year, with further increases anticipated in second quarter, subject, of course, to the evolution of pulp price. Despite this positive price momentum, the global environment remains challenging. The sector continues to face a structural decline in consumption and economic stagnation across key regions, partially offset by recent capacity closures in Europe and North America. In the states, following the reduction of 350,000 tons of annual capacity by an Asian producer, another uncoated woodfree closure was announced early this year, removing a further 320,000 tons of capacity. Combined with impact of import tariffs and U.S. markets heavy reliance on imports, we estimate the structural supply shortfall of approximately 1.2 million tons per year or about 25% of consumption. These import requirements will need to be met by the limited number of countries able to supply products that meet U.S. market specs, notably a small group of producers in Europe and Latin America. U.S. producers at the same time are likely to focus more on their domestic market, creating opportunities in their traditional export destinations. Looking ahead, the expected increases in pulp prices during 2026, should provide underlying support to paper prices. European import levels remain steady with no additional upward pressure on the market. While the sector continues to face a structural decline in consumption and a sharp economic slowdown across the regions, this has been partially offset by significant capacity closures, 430,000 tons in Europe last year and the combined close to 670,000 tons in North America across last year and this year. Within this context, the uncoated woodfree segment is showing renewed opportunities across different geographies, supported by supply discipline and Navigator's competitive position. In the tissue segment, demand continues at [ investment ] levels. The integration of Navigator's tissue chain is progressing well with stronger collaboration between local and Iberian teams driving cross-selling and a higher-margin portfolio. At the same time, we have launched an execution plan to consolidate U.K. operations in 2 core sites, Leyland and Leicester, integrated production and storage to boost efficiency, scalability and cost competitiveness, building on an already strong operational model. We have taken a final investment decision for a new tissue machine at Aveiro, a transformational project that will enhance efficiency and further strengthen the long-term resilience and competitors of our tissue segment. It's worth pointing out that we are now a quite different company from what we were. We boosted Europe's pulp and uncoated wood free business, which is a distinctive grade in printing and writing, in Europe at least. We globally can sell our pulp at low discounts with solid margins. Our tissue business outperforms, and we are building a diversified, innovative and growing packaging business. Packaging continues to perform strongly with growth in both volumes and price. At the same time, our PM3 conversion project is progressing as planned. Once completed, this investment will position Navigator as the fourth largest producer of low grammage flexible packaging in Europe, consolidating our presence in the segment with robust and growing demand. From late January this year, a set of raging storms, notably storm Kristin brought severe weather with strong winds and flash flooding to Portugal, particularly affecting the center of the country. Navigator responded proactively, working closely with impacted forestry producers and regions to support the sector's operational and economic recovery. The storm caused disruptions at Figueira da Foz and Vila Velha de Rodao Mills, due to external power and water outages and some impact on our forestry assets still under assessment. There was no material damage to essential mills equipment and production resumed normally within a few days once utilities were restored. All other industrial units kept operating as usual. However, adverse weather conditions associated with storms have disrupted forestry operations and hindered the transportation of wood to our mills. The relatively low stock levels at the start of the year, combined with the impact of the storms may require a temporary adjustment to sales volumes in the first quarter, which is still under assessment. Navigator's integrated business model, strong financial position and the ability to respond proactively across the value chain from forestry to a set of different finished products are enabling us to navigate current challenges with confidence. Ongoing diversification and continuous innovation in our core business will further strengthen Navigator's resilience and long-term value creation. Thank you.
Ana Canha: Thank you, Antonio. This ends our presentation. We are now open for the Q&A session.
Operator: [Operator Instructions]. The first question comes from Bruno Bessa from Caixa Bank.
Bruno Bessa: I would focus on the new plant that you announced in Aveiro. Could you share any numbers on this new plant, mainly in terms of your expectations for EBITDA margin or even EBITDA contribution once it starts up, will be appreciated. And also regarding the investment that you announced, the EUR 115 million investment. One question about this. Would it be reasonable to assume that 20% of this investment could be in the form of nonreimbursable subsidies. So this will be the second question. The third question, just a bit of a more technical one. If you could just explain the changes in the fair value of biological assets because I saw that in Q4, you had relevant movement of around EUR 5 million contribution in the EBITDA, positive contribution. If you could just explain what are the dynamics behind this? And what should we expect from this for 2026?
Antonio Redondo: Thank you, Bruno, for your questions. I'm going to try to repeat them. The second I was completely unable to understand. I'm going to repeat first and third, and I will ask you to be so kind to repeat second. So first, we would like to try to understand better the EBITDA margin impact of Aveiro new tissue machine once it starts up, correct?
Bruno Bessa: Yes, that's correct.
Antonio Redondo: The third one is about fair value of biological assets. You would like to understand a bit more how we see things in 2025 and going forward.
Bruno Bessa: Yes. That's correct.
Antonio Redondo: And the second one, are you so kind to repeat it, please?
Bruno Bessa: Sure. The second one is about the EUR 115 million investment that you announced in Aveiro. You mentioned that this should have some subsidies from the government. My question here is, if it would be reasonable to assume that 20% of this investment could be then in the form of nonreimbursable subsidies?
Antonio Redondo: Okay. I will give some introductory comments on the questions. I will pass to Nuno, the first one and to Fernando the second and the third. So the impact of the tissue machine is going to bring the Tissue UK operation closer to what is the EBITDA margin of our Iberian operations. As we have heard, we believe that with the reshuffling of the converting operations we are doing in U.K., this will add to the existing conversion 2 to 3 points in margin improvement. It will be more or less the same range, the integration of tissue -- new tissue machine. Regarding the second question, obviously, we do not share any specifics on our discussions with the Portuguese government. But I would expect the levels not to differ from similar projects that we deal with the government, of course, outside the [ NextGen EU, Innovation ] funds in previous investments. So it's not going to be materially different from that percentage-wise. Nuno, can you add something more on the first question, please?
Nuno de Araújo Dos Santos: I can only comment and stress what you just said. I think overall, I think people attending the conference also have the benchmarks for what can be a tissue machine of this size. For us, we would expect on a long-term basis [indiscernible] that this should increase the EBITDA margin of tissue by 3%, something like that. And in fact, the EBITDA margin of Navigator by 1% because, as you know, tissue is already 1/3 of the EBITDA margin of the group.
Antonio Redondo: Fernando?
Jose de Araujo: Some mention related with the PM2 of tissue in Aveiro, the margin of support is around 20%. And we are talking about investment of EUR 115 million. In what concerns the biologic assets, it's -- we have an increase this year. It's mainly related with Mozambique. The way that we calculate the discount cash flow, it was on the basis that we will get and transport to Portugal. And fortunately, we found better ways to monetize these biologic assets in Mozambique. This means that we have less costs and we can have increase of return. For the near future, we are not expected to have huge amounts of variation on biologic assets, like we always do, we try to manage in a way that we do not foresee a big increase for the future. This particular year, it's because of this good news that we found ways to sell directly to local.
Bruno Bessa: And just a follow-up. Could you please elaborate a little bit more on those alternatives that you have now for the wood produced in Mozambique. Are you exporting to Asia, what are those alternatives?
Antonio Redondo: I will ask Joao to answer the question. Joao, please?
João Cabete Gonçalves Lé: Yes, it's a good question. We -- in the last 2 years, we found out that we could sell wood locally mostly for furniture purposes. And -- but we sell it locally for Chinese operators, mainly but also from India. And we expect that with that these local sales we can monetize almost all the stocks, the wood stock that we have in the near future.
Operator: The next question comes from Antonio Seladas from AS Independent Research. There are no further questions at this time at the conference call. Now we will go through the webcast. From the webcast, we have the first question. Thanks for the detailed presentation. Can you please provide us with some guidance on the possible margin uplift that the new tissue machine will bring now that you will become fully integrated in Tissue?
Antonio Redondo: I think that question was also already answered in a very complete way.
Operator: The next question comes from [ Michael Saido, ] a shareholder. What are the dividend relevant dates ex dividend and payment date as well as how much dividend will you propose to the AGM?
Ana Canha: The general meeting will be held on May 22. And regarding dividends, we already gave the answer, EUR 80 million is the proposal from.
Jose de Araujo: And normally, it's paid 8 days after the general assembly meeting.
Ana Canha: Okay. Thank you. This concludes our session. Thank you for your time. Should you require any further clarification, please feel free to reach out through our usual channels, wishing you all a pleasant evening.