apm terminals invests in partnership with global ports · apm terminals invests in partnership with...
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APM Terminals invests in partnership
with Global Ports Investor presentation
September 10, 2012
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Disclaimer
Certain statements and/or other information included in these materials are not historical facts and are "forward looking" within the meaning
of Section 27A of the U.S. Securities Act of 1933 and 2(1)(e) of the U.S. Securities Exchange Act of 1934, as amended. The words
"believe", "expect", "anticipate", "intends", "plan", "estimate", "aim", "forecast", "project", "will", "may", "might", "should", "could" and similar
expressions (or their negative) identify certain of these forward-looking statements.
Forward looking statements include statements concerning the Company’s plans, expectations, projections, objectives, targets, goals,
strategies, future events, future revenues, operations or performance, capital expenditures, financing needs, plans or intentions relating to
acquisitions, its competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and
future operations and development, business strategy and the trends the Company anticipates in the industries and the political and legal
environment in which it operates and other information that is not historical information and the assumptions underlying these forward
looking statements. By their very nature, forward looking statements involve inherent risks, uncertainties and other important factors that
could cause the actual results, performance or achievements of the Company to be materially different from results, performance or
achievements expressed or implied by such forward-looking statements. The forward-looking statements in these materials are based on
numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will
operate in the future. Many of such assumptions are based, in turn, upon further assumptions, including without limitation, management’s
examination of historical operating trends, data contained in the Company’s records and other data available from third parties. These
assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond
its control and it may not achieve or accomplish these expectations, beliefs or projections. In addition, important factors that, in the view of
the Company, could cause actual results to differ materially from those discussed in the forward-looking statements include the
achievement of the anticipated levels of profitability, growth, cost and any recent acquisitions, the timely development of new projects, the
impact of competitive pricing, the ability to obtain necessary regulatory approvals, and the impact of general business and global economic
conditions. Past performance should not be taken as an indication or guarantee of future results, and no representation or warranty,
express or implied, is made regarding future performance. No statement in this presentation is intended to be a profit forecast. As a result,
you are cautioned not to place any undue reliance on such forward-looking statements.
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Page
I. Transaction summary 3
II. Long term partnership with fully aligned interests 4
III. Further strengthening GPI’s leading position 5
IV. Continued focus on growth 6
V. Key takeaways 7
VIII. Appendices 8
Overview of APM Terminals
Corporate governance and reclassification of shares
Abstracts from shareholder agreement
Contents
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Transaction summary
• APM Terminals B.V. becomes a major shareholder of Global Ports Investments PLC (GPI) and
strategic partner of Transportation Investments Holding Limited (TIHL, N-Trans)
• True partnership with N-Trans based on joint control and common vision
• APM Terminals is a global port, terminal and inland services network operator:
• 63.7 m TEU total global volumes, USD 4.7bn revenue; operating in 64 countries
• Subsidiary of leading oil and transportation conglomerate A.P. Møller - Mærsk A/S
• The transaction is the largest direct investment into the Russian transportation industry
• Reaffirms attractiveness of the fast-growing Russian container market after WTO entry
• The transaction underscores and underpins GPI’s leadership in Russian container industry
Leading international
and regional players
join forces
Key terms for the transaction
• APM Terminals to acquire 37.5% shareholding in GPI - half of TIHL’s current shareholding
• Voting rights of free-float shareholders will be increased from approximately 25% to
approximately 40% as half of partner’s shares will be converted to non-voting
• The transaction values GPI’s entire share capital at USD 2.3 billion1
1Enterprise value, to be adjusted for net debt.
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Long term partnership with fully aligned interests
Current
management
continues,
enhanced with
APM Terminal’s
managers
with significant
experience
GPI will become
a platform for
joint expansion
of APM
Terminals and
N-Trans in
Russia, CIS and
Baltic States
Both partners
have
longstanding
experience in
international
partnerships
Joint decision
making
Equal
representation
in BoD and its
committees
Shared strategy
based on
organic growth,
optimisation of
operations and
selective M&A
Joining forces of a leading international
and a leading regional player... ..in a true partnership.
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Further strengthening GPI’s leading position
• Global knowledge of technological process optimisation and IT solutions
• More efficient development of new capacity due to global experience in terminal
planning, equipment specifications
• Employee training and rotation in APM Terminals’ global network
• Further focus on safety: APM Terminals is a Lloyds List’s Global Safety Award winner
Access to global
expertise
• Ability to offer joint solutions and develop new services to containerise Russian
cargos
• APM Terminals is an independent investor/operator of ports infrastructure
• Coordination with APM Terminals network strategic customer relationship managers –
over 60 shipping lines are its customers
Closer relationship
with a global port operator
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Continued focus on growth
Increased
competitive
strength allows for
capital structure
optimisation
• Growth remains a priority
• Establish target gearing ratio between 1.5-2 times Net Debt / Adjusted EBITDA
• Progressively reach target gearing ratio over the next few years balancing expansion
and dividend distribution
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Combine forces to pursue growth
opportunities
• Russia is one of the fastest growing container markets in the world
• Global Ports is to become the platform for expansion of APM Terminals and TIHL in
Russia, CIS and the Baltic States
• Targeting container, general cargo, liquid and non-liquid bulk cargo terminal
development
• Combination of global expertise and local knowledge strengthens the value
proposition enabling faster growth
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Key Takeaways
Aligned interests & further
improvement of governance
Increased competitiveness…
• Principle of joint control
• Commitment of both APM Terminals and N-Trans to current strategy
• Current management team will continue, strengthened by
APM Terminals managers and specialists
• Increased voting rights of free float
• Draw on extensive expertise of optimising operations and efficient
capacity development
• Closer relationship with one of world’s largest, independent port
operators to accelerate the containerization of Russian trade
Joint forces • Leading international player APM Terminals
• Russia’s leading infrastructure investment group N-Trans
…in the next phase of growth
• GPI will become a platform for joint expansion of APM
Terminals and N-Trans in the region, following Russia’s accession to
WTO
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8 Appendices
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Overview of APM Terminals
• APM Terminals is operating in 64 countries
• 56 port and terminal interests
• 155 inland services locations
• 24,000 employees
• APM Terminals is a leading global terminal operator, handling 63.7
million TEU in 2011
• Financial results (2011)
• Revenue USD 4.7bn
• Segment’s cash flow from operating activities of USD 912m
• Segment result of USD 649m
• Customer base of 60 shipping lines as well as leading importers
exporters
• APM Terminals is at the forefront in innovative research and
applications
• APM Terminals belongs to the leading oil and transportation
conglomerate A.P. Møller - Mærsk A/S
Global presence of APM Terminals
A.P. Møller - Mærsk A/S Group
• A leading Shipping, Transportation,
Energy and Retail conglomerate
• Headquartered in Copenhagen, Denmark
• 2011 Revenue: USD 60.2 billion
• 108,000 employees
• 130 countries
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• Meticulously defined corporate governance built on principles of joint
control between APM Terminals and TIHL
– All major decisions in BoD and subsidiaries are done jointly by APM
Terminals and TIHL
– 2 INEDs to chair Nomination, Remuneration, Audit and Risk
committees
– APM Terminals and TIHL have the right to nominate six directors
each for appointment by the AGM
– Team to be enhanced with APM Terminals’ nominated managers with
significant experience
• Conversion of part of shares to non-voting enables establishment of joint
control while preserving high free float and liquidity of GPI
– TIHL to convert approximately 50% of ordinary shares held by it into
ordinary non-voting shares. TIHL to transfer 50% of its share holding
in each class to APM Terminals.
– Both parties have sufficient shareholding for joint control
– Eventual sale of non-voting shares to the market (permitted after
two years only) will convert them to voting shares and increase free
float and liquidity
Corporate governance and reclassification of shares
Nomination rights of Board of Directors members
Implementation of reclassification of shares
Voting by General Meeting of Members
Board of Directors (14 directors)
APM Terminals
nominates
6 members
TIHL nominates
6 members 2 INEDs
1
2
3
4
T
T+7 d
T+36 d
T+36 d
Conversion offer sent to all shareholders
Responses to conversion offer
received (TIHL expected to convert)
EGM to decide on change of
classes of shares
Increased voting power of
free float effective
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Abstracts from shareholder agreement
Parties: TIHL and APM Terminals
Duration: As long as the parties (or their connected persons) hold shares or GDRs subject to termination by a party if the other party’s voting interest falls below
25% plus one share/GDR
Geography
and scope
Russia, CIS, Baltics, handling and storage of containers, general cargoes, liquid and non liquid bulk at seaports and inland terminals
Board Composition: A total of 14 directors, two of whom are independent, six of whom may be nominated, appointed, removed and replaced by TIHL and six of whom
may be nominated, appointed, removed and replaced by APM Terminals. Chairman rotates between TIHL and APM Terminals every two years,
nomination by TIHL for first term. Quorum: three, with one being a TIHL director, one an APM Terminals director and one independent. Certain key
matters at Company and subsidiary level to require the affirmative vote of at least one TIHL and one APM Terminals director.
Board Committees: Equal number of directors from both TIHL and APM Terminals and at least one independent. Chairman to be independent. Quorum requirement as
per the board regulations.
Shareholder
Reserved Matters:
Certain key matters require approval of both TIHL and APM Terminals.
Senior Management:
Rotation of senior management nomination right. During first three years TIHL will nominate the CEOs of the Company and the Operating
Companies, and APM Terminals will nominate the CFO of the Company and the Operating Companies and the COO of PLP
Management matters:
Funding and Minimum Gearing Ratio: TIHL and APM Terminals to procure that the Group maintains a target net debt to EBITDA ratio of 1.5 to 2
times, and satisfy its external funding needs with borrowings to the extent available on commercially reasonable terms
Dividend Policy Dividends to be determined in accordance with the Group's current Dividend Policy and, in addition to maintain a Target Gearing Ratio after taking
into account budgeted cash flows (including capex) and performance against budget as well as any debt financing to fund such dividend, subject in
any case to amounts legally available for distribution. TIHL and APM Terminals acknowledge that by setting up the target gearing ratio further
dividend distribution over and above the Group’s Dividend Policy might be possible.
Sales of interests: Transfer of securities are not permitted in the first lockup period (2 years). Further lockup period of 3 years, in which a party can transfer shares
provided the transfer does not result in either TIHL’s or APM Terminals’s holdings of ordinary shares to fall below 25% plus 1 share of the total voting
shares. Rights of first refusal, tag along rights, and standard pre-emption rights apply
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QUESTIONS & ANSWERS