global ports - 2014 interim results presentation
DESCRIPTION
2014 Interim Results PresentationTRANSCRIPT
Global Ports Investments PLC
2014 Interim Results Presentation
15 September 2014
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DISCLAIMER
Information contained in this presentation concerning Global Ports Investments PLC, a company organised and existing under the laws of Cyprus (the “Company”, and together
with its subsidiaries and joint ventures, “Global Ports” or the “Group”), is for general information purposes only. The opinions presented herein are based on general information
gathered at the time of writing and are subject to change without notice. The Company relies on information obtained from sources believed to be reliable but does not
guarantee its accuracy or completeness.
Concurrently Global Ports is publishing Unaudited Selected Illustrative Combined Financial Metrics for the six-months period ended 30 June 2013 (the “Illustrative Combined
Financial Metrics” or “Illustrative Combined”) of Global Ports Group, including NCC Group Limited and its consolidated subsidiaries (“NCC Group” or “NCC”), the “Enlarged
Group”) following the Group’s announcement on 27 December 2013 that it had completed the acquisition of 100% of the share capital of NCC Group (the “Transaction”). For the
purposes of this announcement, Global Ports is using the Illustrative Combined Financial Metrics as a comparator against the actual results of operations for the six-month
period ended 30 June 2014 in respect of (i) the Group’s results and (ii) the Russian Ports segment’s results. Where relevant, for reader’s reference, actual (reported) results of
operations for the six-month period ended 30 June 2013 are presented in separate columns in the tables presenting financial information.
The Illustrative Combined Financial Metrics represent information prepared based on estimates and assumptions deemed appropriate by the Group and is provided for
illustrative purposes only. They do not purport to represent what the actual results of the operations or cash flows of the Group would have been had the Transaction occurred
on 1 January 2013, nor are they necessarily indicative of the results or cash flows of the Group for any future periods. Because of their nature, the Illustrative Combined
Financial Metrics are based on a hypothetical situation and, therefore, do not represent the actual financial position or results of the operations and cash flows of the Group.
These materials may contain forward-looking statements regarding future events or the future financial performance of the Enlarged Group. You can identify forward looking
statements by terms such as “expect”, “believe”, “estimate”, “anticipate”, “intend”, “will”, “could”, “may”, or “might”, the negative of such terms or other similar expressions. These
forward-looking statements include matters that are not historical facts and statements regarding the Company’s and its shareholders’ intentions, beliefs or current expectations
concerning, among other things, the Enlarged Group’s results of operations, financial condition, liquidity, prospects, growth, strategies, and the industry in which the Company
operates. By their nature, forward-looking statements involve risks and uncertainties, because they relate to events and depend on circumstances that may or may not occur in
the future.
The Company cautions you that forward-looking statements are not guarantees of future performance and that the Enlarged Group’s actual results of operations, financial
condition, liquidity, prospects, growth, strategies and the development of the industry in which the Company operates may differ materially from those described in or suggested
by the forward-looking statements contained in these materials. In addition, even if the Company’s results of operations, financial condition, liquidity, prospects, growth,
strategies and the development of the industry in which the Company operates are consistent with the forward-looking statements contained in these materials, those results or
developments may not be indicative of results or developments in future periods.
The Company does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated
events. Many factors could cause the actual results to differ materially from those contained in forward-looking statements of the Company, including, among others, general
economic conditions, the competitive environment, risks associated with operating in Russia, market change in the Russian transportation industry or particularly in the ports
operation segment, as well as many other risks specifically related to the Company and its operations.
These materials do not constitute an offer or an advertisement of any securities in any jurisdiction.
2 Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
REFERENCE TO ACCOUNTS AND OPERATIONAL INFORMATION
Unless stated otherwise all financial information in this presentation is extracted from the Interim Condensed Consolidated Financial Information of the Company for the
six months period ended 30 June 2014 and prepared in accordance with International Financial Reporting Standards adopted by the European Union (“IFRS”) and the
requirements of Cyprus Companies Law, Cap. 113.
From 1 January 2014 the Group adopted IFRS 11, ‘Joint arrangements’ which has resulted in significant changes in the accounting policies applied by the Group. Prior
to 1 January 2014, the Group’s interests in jointly controlled entities (VEOS and MLT and CD groups) were accounted for by using the proportionate method of
consolidation. From 1 January 2014 jointly controlled entities are accounted for using the equity method of consolidation.
The Global Ports Group’s Interim Condensed Consolidated Financial Information for the six months period ended 30 June 2014 is available at the Global Ports Group’s
corporate website (www.globalports.com).
The financial information is presented in US dollars, which is also the functional currency of the Company and certain other entities in the Group. The functional currency
of the Group’s operating companies for the periods under review was (a) for the Russian Ports segment, the Russian rouble, (b) for Oil Products Terminal segment and
for the Finnish Ports segment, Euro.
Certain financial information which is derived from management accounts is marked in this presentation with an asterisk {*}.
In this presentation the Group has used certain non-IFRS financial information as supplemental measures of the Group’s operating performance.
Information (including non-IFRS financial measures) requiring additional explanation or defining is marked with initial capital letters and the explanations or definitions
are provided at the end of this presentation.
Rounding adjustments have been made in calculating some of the financial and operational information included in this presentation. As a result, numerical figures
shown as totals in some tables may not be exact arithmetic aggregations of the figures that precede them.
Market share data has been calculated using the information published by the Association of Sea Commercial Ports (“ASOP”), www.morport.com, ARGUS Nefte
Transport and Drewry Financial Research Services Ltd (“Drewry”).
3 Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
CONTENTS
4 Definitions for terms marked in this presentation with capital letters are provided in the Appendices on pages 35-36
Page
I. Global Ports at a Glance 5
II. 1H 2014: Focus on efficiency and strong pricing 6
III. Russian container market 7
IV. High potential for further containerization across key industries 8
V. Operational and commercial developments 9
VI. Financial highlights: 1H 2014 10
Focus on operational efficiency 11
Other segments 12
Strong cash flow and low capex enable swift deleveraging 13
VII. Key takeaways 14
VIII. Appendices
Enlarged Global Ports 15
Selected operational and financial information 20
Terminals overview 26
The #1 container terminal operator in Russia(1)
● Market leadership reinforced by acquisition of Global Port’s largest competitor, NCC Group Limited(1) at the end of 2013
Russian container market is fundamentally attractive due to low levels of containerization across industries
● Global Ports has a strong presence and available capacity in both key basins: Baltic and the Far East
High cash flow generation and low CAPEX requirements
Listed on the main market of the London Stock Exchange, free float of 20.5%(2)
● APM Terminals and N-Trans (each with 30.75% of share capital) are the core strategic shareholders
● Adherence to best-in-class corporate governance, Board of Directors with strong track record and deep understanding
of the industry
GLOBAL PORTS AT A GLANCE
5
(1) Source: ASOP, based on 2013 and 1H 2014 overall Container Throughput in the Russian Federation ports without transit cargo volumes.
(2) As of 30.06.2014
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
BALTIC BASIN
BLACK SEA BASIN
FAR EAST BASIN
Vostochnaya
Stevedoring Company
MLT-Helsinki
MLT-Kotka
Vopak E.O.S. Ust-Luga
Container
Terminal
Moby Dik
First Container Terminal Petrolesport
Logistika-Terminal
Yanino
1H 2014: FOCUS ON EFFICIENCY AND STRONG PRICING
6
Successful commercial
campaign
Focus on operating improvements of the enlarged operation
● Operating cash costs(1) reduced 13%* y-o-y during 1H 14
● A number of further initiatives are being implemented
Integration of NCC completed, run rate of around USD 8 million* annual cost savings secured
Integration completed,
focus on operating
improvements
(1) Data based on an equity method accounting of joint ventures..
(2) Recommended by the Board of Directors, subject to EGM approval to be held on 22 October 2014. Payout ratio calculated as the sum of dividends recommended divided by Net profit attributable to the owners of the company. of 1H 14
High cash flow and
reduced CAPEX, focus
on deleveraging
Margin expansion,
Adjusted EBITDA
broadly flat
Adjusted EBITDA margin expanded c. 340 bps* to a record level of 66.3%*
Adjusted EBITDA broadly flat at USD 190 million*
● Cost reductions mitigated the 4.7%* revenue decline
Strong cash flow generation with net cash from operating activities of USD 158 million in 1H 14
CAPEX amounted to USD 13 million in 1H 14(1)
● CAPEX guidance for 2014 and next few years lowered to USD 35-45 million(1)
Net debt reduced by c. USD 70 million, Net Debt / LTM Adjusted EBITDA decreased from
3.7 to 3.5 times(1)
Dividend of USD 0.12* per GDR recommended (33%* dividend payout ratio)(2)
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
Revenue per TEU(2) up 4.6%* compared to the second half of 2013 reflecting the successful
2014 commercial campaign supported by our unparalleled network of terminals
Russia World Turkey NorthAmerica
Europe
1H 2013 1H 20141H 2013 1H 2014
Russian container market grew by 2% in 1H 14(1)
● Declining growth since 2Q bringing YTD growth to 1%*
Laden export grew 25%* y-o-y during 1H 14(2), positively
impacted by the depreciation of the Russian rouble and
ongoing containerization of exports
Impact of ban on food imports is likely to be muted:
● Only about 2-3%* of overall Russian container volumes affected
● Containerization levels of banned cargoes were relatively low
● Volumes may recover if these imports are replaced by deep sea
deliveries which usually have higher containerization levels
No known sizeable capacity additions in the Russian market
during the next 12 months
Containerisation level remains low in Russia:
42 TEU per thousand capita(3) in 2013
RUSSIAN CONTAINER MARKET
7
Container Throughput in Russia
mill
ion T
EU
Source: ASOP
(1) Source: ASOP, based on 1H 2014 overall container throughput in the Russian Federation ports without transit cargo volumes
(2) Source: ASOP, YTD data of January - August 2014.
(3) Source: Drewry; some 2013 numbers are estimated.
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
+25%*
+2%*
Container Throughput
Export laden
Containerization level, TEU per 1000 capita
mill
ion T
EU
2.55* 2.60*
Source: Drewry; 2013 data
90 95
134 135
42
0.37* 0.47*
57%98%
68%99% 86% 93%
Russia Brazil Turkey US EU Global
15%33%
60% 68% 65%47%
Russia Brazil Turkey US EU Global
53%71%
56%78% 80% 78%
Russia Brazil Turkey US EU Global
HIGH POTENTIAL FOR FURTHER CONTAINERIZATION ACROSS KEY INDUSTRIES1
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
8
Temperature or Climate Control (frozen food
and fish, perishable cargo etc.)
Chemicals & Products Foodstuffs & Beverages for human
consumption
Consumables
Plastics & rubbers
Consumer fashion, personal & household
goods
Manufactured metal & semi-manufactured
industrial consumables
Machinery parts. Components, supplies &
manufactures, n.e.s.
(1) Source: Seabury, calculated as total containerized ocean trade in tonnes divided by total trade by country/region in tonnes
(2) Selected cargo groups represent more than 50% of Russian import measured in TEU’s
(3) Selected cargo groups represent around 45% of Russian export (excluding liquids) measured in tonnes
Chemicals & Products
Containerization of imports(2) Containerization of exports(3)
34%
65%
37%
71%51%
65%
Russia Brazil Turkey US EU Global
45%
86%
37%
83% 84% 75%
Russia Brazil Turkey US EU Global
4%
31% 31% 29%47%
36%
Russia Brazil Turkey US EU Global
25%30%
19%
31% 31% 36%
Russia Brazil Turkey US EU Global
8%25% 26%
66%
34% 35%
Russia Brazil Turkey US EU Global
8% 12%
67%
13%39% 32%
Russia Brazil Turkey US EU Global
1H 2013 2H 2013 FY 2013 1H 2014
OPERATIONAL AND COMMERCIAL DEVELOPMENTS
9
Revenue per TEU* (Russian Ports)(1)
mill
ion T
EU
Gross container throughput*(2)
1.27* 1.23*
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
(1) Data for 1H 2013, 2H 2013, and FY 2013 is based on an Illustrative Combined basis, including the results of NCC Group.
(2) Global Ports standalone gross container throughput includes 100% throughput in PLP, VSC, Moby Dik, and Finnish ports, NCC Group throughput includes 100% throughput of FCT and ULCT, Illustrative combined throughput
includes throughput of Global Ports standalone and NCC Group
US
D
Growth in revenue per TEU 1H 2014 vs FY 2013 due to a
successful pricing campaign supported by an unparalleled
network of container terminals in Russia
● Partially offset by continued trend in declining storage
time
Expansion of capacity at fast-growing VSC completed –
increased by 100 thousand TEU* to 650 thousand TEU*
Gross container throughput decreased 1.3%*. Active ramp-up
of ULCT (+146%*) and growth at VSC (+9%*) and the Finnish
Ports segment (+16%*) were offset by:
● High exposure to the Russian Baltic basin where market
decreased by 3%* y-o-y
● Loss of volumes in the Russian Baltic basin to low cost
competition due to “pricing over market share ” strategy
of Global Ports
Strong growth in cars (+21%*) and traditional Ro-Ro (+24%*)
0.12* 0.11*
1.37* 1.36*
Russian ports Finnish ports Total marine
container throughput
1H 2013
1H 2014
-1.3% -2.8%
+16% 210*
199*
208*
205*
+4.6%
+1.7%
1H 2013 1H 2014
1H 2013 1H 2014
1H 2013 1H 2014
1H 2013 1H 2014
1H 2013 1H 2014
1H 2013 1H 2014
FINANCIAL HIGHLIGHTS: 1H 2014(1)
10
Revenues reflected volume change
Margin expansion driven by
positive FX impact and cost control
Reduced CAPEX, dividend declared
287 301 mln
US
D
Revenue
-4.7%
mln
US
D 0.4%
Adjusted EBITDA and Adjusted EBITDA margin
-44%
CAPEX
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
mln
US
D
189* 190*
23
13
66.3%* 62.9%*
Group’s revenues decreased 4.7%* to USD 287
million y-o-y largely driven by a 3%* decrease in
container volumes in the Russian Ports segment and
slight decline in revenue per TEU y-o-y
Positive FX impact and cost control measures in Russian
Ports segment led to a 13% reduction in Group’s
Operating Cash Costs
Adjusted EBITDA margin up c. 340 bps* to record 66.3%*
Adjusted EBITDA was broadly flat at USD 190 million*
as cost reductions mitigated the 4.7%* revenue decline
Cash CAPEX was USD 13 million
● CAPEX guidance for 2014 and next few years cut to
USD 35-45 million(2)
Global Ports recommended a dividend of USD 23
million* (USD 0.12* per GDR)(3)
● Payout ratio of 33%* of Net profit
319 307
65.3%* 68.1%*
0.3%
208* 209*
-43%
24
14
Global Ports Russian Ports segment,
100% basis
-3.8%
Due to mandatory adoption of IFRS 11 from January 1st 2014, the Group’s joint ventures (VEOS, MD, YLP, Kotka, Helsinki) are consolidated
using the equity method of accounting and their proportional share of net profit is reported below EBITDA (see page 17 for further details)
(1) The results for 1H 2013 are provide on Illustrative Combined basis and include the results of NCC Group.
(2) Data based on an equity method accounting of joint ventures..
(3) Recommended by the Board of Directors, subject to EGM approval. Payout ratio calculated as the sum of dividends recommended divided by Net profit attributable to the owners of the company of 1H 14.
Staff costs
Transportation expenses
Fuel, electricity and gas
Repair and maintenance of PPE
Other
FOCUS ON OPERATIONAL EFFICIENCY(1)
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
Further measures to take effect in
2H 14 and 2015
Headcount: up to 5% reduction in operating staff of
Russian Ports segment by year end
Process optimisation: NCD operations eliminated(2)
Asset disposal: sale of captive trucking business signed
Maintenance: dismiss unutilised equipment
Centralisation of procurement
11
(1) The results for 1H 2013 are based on Illustrative Combined basis including the results of NCC Group.
(2) See page 19 for further details
Operating improvements at the enlarged
operation launched
Comprehensive analysis of efficient use of available
capacity launched immediately after the NCC acquisition
● Distribution of container volumes in North West and
related headcount optimisation
● Adjustments to operating processes and practices as
a result of the above
● Equipment utilization and technical asset management
Operating Cash Costs of the Russian Ports segment
decreased by 11%* during 1H 14 y-o-y (broadly flat in
Rouble terms). Inflationary pressures largely mitigated by:
● Optimisation of repairs
● Decrease in transportation expenses via
optimisation of intra-terminal movements
● Thorough control over other expenses
1H 2013 1H 2014
Operating Cash Costs of Russian Ports segment
mln
US
D
-12.7
-11%
97.8* 110.5*
Breakdown of Operating Cash Costs of Russian
Ports segment (1H 14)
mln
US
D
28.7;
29%
6.5;
7%
8.4;
9%
47.2;
48%
7.0;
7%
OTHER SEGMENTS
12
Vopak E.O.S. continues to operate in a
challenging market environment
Finnish Ports segment - growth in volumes and
Adjusted EBITDA
Throughput, mln tons
5.6*
4.1*
-28%
114
68
-40%
50*
26*
-48%
1H 2013
1H 2014
105*
1.8*
11.3 122* 12.7
2.1*
16%
12%
21%
Throughput, mln TEU Revenue, USDm Adjusted EBITDA, USDm
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
Revenue, USDm Adjusted EBITDA
(USDm) and Adjusted
EBITDA margin (%)
Environment remains challenging as cargo owners
prefer to handle more product in Russia
● Revenue declined 40% y-o-y due to lower volumes and
increased share of lower-revenue generating seaborne
deliveries
● Restructuring and lower volumes resulted in a 35%*
reduction in the segment’s cash costs
● Adjusted EBITDA decreased 48%* to USD 26 million*
Adverse trends continued into the 2H 14
Finnish Ports segment throughput increased 16%* supported
by volumes from new clients acquired in 2013
Revenues increased 12% resulting in strong growth at
EBITDA level (+21%*)
1H 2013
1H 2014
Due to mandatory adoption of IFRS 11 from January 1st 2014, Vopak E.O.S. and Finnish Ports segment are consolidated
using the equity method of accounting and their proportional share of net profit is reported below EBITDA (see page 17 for further details)
44.3%* 38.8%*
as at 31.12.13 as at 30.06.14
STRONG CASH FLOW AND LOW CAPEX ENABLE SWIFT DELEVERAGING
13
Net debt to Adjusted EBITDA, interest rate Comfortable debt repayment schedule
Net cash flow from operating activities 1H 2014 annualised(2)
Cash and deposits(3) as at 30/06/14
Debt repayment schedule as at 30/06/14
315
116 88* 88*
150*
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
(1) Net debt to LTM Adjusted EBITDA
(2) Calculated as Net cash flow from operating activities for 6m 2014 multiplied by two.
(3) Including deposits with the maturity over 90 days
(4) Data based on an equity method accounting of joint ventures..
(5) Including cross-currency interest rate swap arrangement
Healthy net cash flow from operating activities of
USD 158 million in 1H 14
Comfortable debt repayment schedule
CAPEX guidance for the next few years lowered to
USD 35-45 million(4)
Net debt of USD 1,253 million* as of 30 June 2014, net debt to
LTM Adjusted EBITDA at 3.5 times*
● Net debt reduced by USD 70 million during 1H 14
Average interest rate of the debt portfolio decreased from 6.2%
to 5.4% % during 1H 2014
Around 100% of debt portfolio denominated in US dollars(5) as of
30.06.14 matching revenues mainly denominated in US dollars
1H 2014
annualised
Cash and
deposits 2H 2014 2015 2016 2017
198*
mln
US
D
1,323
1,253
3.5x(1) 3.7x Debt repayment in 2H 2014
as at 31.12.13 as at 30.06.14
Net debt, USD million
AVG interest rate, %
6.2% 5.4%
KEY TAKEAWAYS
14
Russian market is undercontainerized
Despite recent slowdown in growth rates, the Russian container market remains
fundamentally attractive due to low levels of containerization across industries
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
Global Ports is the market leader with a proven track record
Cost control and efficiency are priorities
Strategy of solid pricing over market share
Strong FCF and focus on deleveraging
Global Ports is the clear leader in the Russian container market with a proven track
record and a clear strategy in place
Successful commercial campaign and unparalleled network of container terminals
provided for strong pricing in 1H 14
Focus on efficiency and cost control led to a 13%* decrease of Operating cash
costs in 1H 14
Further measures are being implemented
Focus on FCF generation and deleveraging
● Lowered CAPEX guidance for the next few years to USD 35-45 million
● Structurally lower cost base due to efficiency improvements
15
APPENDIX #1
Enlarged Global Ports
POST TRANSACTION CORPORATE STRUCTURE1
16
Entity Partner Share Partner Profile
Vopak E.O.S. Royal Vopak 50%
• Global market leader in independent bulk liquid storage terminals
• 79 terminals with a combined storage capacity of more than 31 million cubic
meters in 29 countries1
Moby Dik, Finnish
Ports, Yanino
Container Finance
Ltd Oy
25% in
each
• Finnish investment company with extensive experience in transportation
• Shareholder of door-to-door European container transport company
Containerships
ULCT Eurogate 20%
• One of the largest and the most reputable European container-terminal groups,
operating ten sea terminals on the North Sea, in the Mediterranean region as
well as on the Atlantic
• Handled over 14.2 million TEUs in 2013
Global Ports
VSC PLP Moby Dik
75% 100% 100%
Yanino
75%
Finnish
Ports
75%
Vopak E.O.S.
50%
9%
Polozio
Enterprises Limited TIHL
30.75%
APM Terminals
9% 30.75%
FCT ULCT LT
100% 100% 80%
Ilibrinio
Establishment Limited
20.5%
Free Float
Source: Companies’ data.
(1) As of September 2014.
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
OVERVIEW OF JV ACCOUNTING IMPLEMENTATION
17 Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
100% basis consolidation in IFRS
● Adjusted EBITDA of USD 190 million
Proportional share of Net Profit reported below EBITDA:
● Proportional share of net loss of USD 9 million
Previous amount of financial information on segments (100% basis)
available in IFRS statement’s segment note 7
Segment on a 100% basis
● EBITDA: USD 209 million
Segment on a 100%
basis
● EBITDA: USD 26 m
Segment on a 100%
basis
● EBITDA: USD 2 m
VSC PLP FCT ULCT Moby
Dik LT Yanino
Vopak
E.O.S.
Global Ports
Russian Ports segment Oil Products segment Finnish Ports segment
Finnish
Ports
WELL INVESTED TERMINALS IN KEY GATEWAYS
Source: Drewry, open sources, Company analysis Note: Gross container handling capacity with respect to container terminals of the Group as at 30 June 2014
Black Sea Basin 16% of Russian market 6m 2014 throughput
Russia
• Capacity: 440 ths. TEU
NCSP
Novorossiysk
Black
Sea
Turkey
• Capacity: 350 ths. TEU
NUTEP (Delo)
Baltic Sea Basin 55% of Russian market 6m 2014 throughput
Russia
Finnish transit
Baltic countries’ transit
• Capacity: 400 ths. TEU
Moby Dik
• Capacity: 1,000 ths. TEU
PLP
St. Petersburg
Region
Estonia
Latvia
Kaliningrad
Region
Baltic Sea
Lithuania
• Capacity: 440 ths. TEU
Ust-Luga
• Capacity: 510 ths. TEU
BSC (NCSP)
and Kaliningrad SCP
• Capacity: 1,250 ths. TEU
FCT
• Capacity: 500 ths. TEU
CT St-Petersburg (UCL
Holding)
Far East Basin 27% of Russian market 6m 2014 throughput
• Capacity: 650 ths. TEU
VSC
• Capacity: 650 ths. TEU
VMTP (FESCO)
Vladivostok
Okhotsk
Sea
Moscow
• Capacity: 200 ths. TEU
VSFP
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
Russia
China
Finland
Other terminals
• Capacity: 200 ths. TEU
18
OPTIMIZING OPERATIONS: NCD1 CASE STUDY
19 Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
FCT layout NCD
Empty containers dropped off by clients
at NCD
FCT delivers box to berth
Loading of empty box to vessel
Empty containers dropped off by clients directly at FCT or PLP
Loading of empty box to vessel
FCT operations pre-acquisition
New process of operations after optimization
NCD previous activity was eliminated, releasing land plot for
other revenue uses
Potential savings of more than USD 1 million per annum achieved
(1) National Container Depot
20
APPENDIX #2 Selected operational and financial information
SELECTED COMBINED OPERATIONAL INFORMATION1
21
Source: The management accounts
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
1H 2013 1H 2014
1H 2013 1H 2014
Gross throughput Gross throughput
Russian Ports segment Finnish Ports segment
Globalports containerized cargo (thousand TEUs)
PLP 371 338 Containerized cargo (thousand TEUs) 105 122
VSC 224 243
Moby Dik 112 114
FCT 540 487 Oil Products Terminal segment
ULCT 21 51
Total Russian Ports segment
1,268 1,233
Oil products Gross Throughput (million
tonnes) 5.6 4.1
Non-containerized cargo
Ro-ro (thousand units) 10 13
Cars (thousand units)
51 62
Bulk cargo (thousand tonnes) 478 429
(1) Global Ports standalone gross container throughput includes 100% throughput in PLP, VSC, and Finnish ports, NCC Group throughput includes 100% throughput of FCT and ULCT, Illustrative combined throughput includes
throughput of Global Ports standalone and NCC Group. The data is on a 100% basis.
(2) Total throughput of Russian Ports excludes the throughput of Yanino which, in 1H 2013 and 1H 2014 was 31 thousand TEUs and 42 thousand TEUs respectively and the throughput of LT which, in 1H 2013 and 1H 2014 was 49
thousand TEUs and 48 thousand TEUs respectively;
SELECTED COMBINED OPERATIONAL INFORMATION (continued)
22
Source: The management accounts
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
1H 2014 1H 2014
Capacity (end of the period)
Russian Ports segment Finnish Ports segment Russian Container Terminal Capacity (excluding
Yanino and LT inland)
Annual container handling capacity (Thousand TEUs)
PLP 1,000
VSC 650 MLT Kotka 150
Moby Dik 400 MLT Helsinki 270
FCT 1,250 Total 420
ULCT 440
Total Global Ports 3,740
Yanino, inland container terminal
Annual container handling capacity (Thousand TEUs) 200
Annual general cargo capacity (Thousand tonnes) 400 Oil Products Terminal
Segment
LT, inland container terminal Storage Capacity (in thousand cbm) 1,026
Annual container handling capacity (Thousand TEUs) 200
GLOBAL PORTS INCOME STATEMENT
23 Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
Source: Global Ports consolidated financial statements; all data is based on equity method of accounting of joint ventures
1) 1H 2013 data is based on Illustrative Combined basis, including the results of NCC Group
Summary Income Statement
'000 USD 1H 2013
Reported
1H 2013
Illustrative
Combined1
1H 2014
Reported
Revenue 168,767 300,568* 286,518
Cost of sales (69,959) (142,405)* (123,428)
Gross profit 98,808 158,163* 163,090
Selling, general and administrative expenses (18,312) (26,842)* (26,536)
Share of profit of joint ventures 6,311 6,311* (9,081)
Other gains/(losses) - net 2,893 6,256* (1,455)
Operating profit 89,700 143,888* 126,018
Finance income/(costs) - net (16,552) (29,977)
Profit before income tax 73,148 96,041
Income tax expense (19,433) (29,815)
Profit for the period 53,715 66,226
Profit attributable to:
Owners of the Company 53,742 69,910
Non-controlling interests (27) (3,684)
Adjusted EBITDA 104,334* 189,086* 189,926*
Adjusted EBITDA Margin 61.8%* 62.9%* 66.3%*
GLOBAL PORTS CONSOLIDATED BALANCE SHEET1
24
Source: Global Ports consolidated financial statements; all data is based on equity method of accounting of joint ventures
(1) Including bank deposits with maturity over 90 days
(2) Restated data as a result of applying an equity method accounting of the Group’s joint ventures, which were previously propor tionally consolidated
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
Summary Balance Sheet
'000 USD 31-Dec-132 30-Jun-14
PP&E (incl. prepayments) 1,337,318 1,269,552
Intangible assets 1,441,140 1,388,907
Other non-current assets 245,880 235,600
Cash and equivalents1 114,208 115,488
Other current assets 137,747 69,010
Total assets 3,276,293 3,078,557
Equity attributable to the owners of the Company 1,208,030 1,179,851
Minority interest (15,353) 38,350
LT borrowings 1,230,925 1,244,021
Other non-current liabilities 447,831 441,338
ST borrowings 206,388 124,151
Other current liabilities 198,472 50,846
Total equity and liabilities 3,276,293 3,078,557
GLOBAL PORTS CONSOLIDATED CASH FLOW STATEMENT
25 Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
Source: Global Ports consolidated financial statements; all data is based on equity method of accounting of joint ventures
1) 1H 2013 data is based on Illustrative Combined basis, including the results of NCC Group
Summary Cash Flow Statement
'000 USD 1H 2013
Reported
1H 2013
Illustrative
Combined1
1H 2014
Reported
Cash generated from operations 110,608 196,303* 173,421
Dividends received from joint ventures 63,653 63,653* 8,260
Tax paid (23,412) (28,146)* (23,978)
Net cash from operating activities 150,849 231,810* 157,703
Cash flow from investing activities
Acquisition of subsidiary under common control net of cash acquired 516*
Purchases of intangible assets (57) (57)* (63)
Purchases of property, plant and equipment (17,786) (23,056)* (13,013)
Proceeds from sale of property, plant and equipment 156 156* 379
Contingent consideration paid - -* (55,706)
Loans granted to related and third parties (15,299) (32,314)* (6,222)
Loans and finance lease repayments received 871 871* 730
Interest received 441 688* 632
Investment in bank deposits with maturity over 90 days - -* 989
Net cash used in investing activities (31,674) (53,196)* (72,274)
Net cash from/(used) in financing activities (119,612) (173,242)* (79,026)
Net increase/(decrease) in cash and cash equivalents (437) 5,372* 6,403
Cash and cash equivalents at the beginning of the year 77,935 114,906* 113,219
Exchange gains/(losses) on cash and cash equivalents (4,151) (4,789)* (4,134)
Cash and cash equivalents at the end of the year 73,347 115,489* 115,488
Terminals Overview
26
APPENDIX #3
27
PLP: TERMINAL LAYOUT(1)
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
(1) As of 30.06.2014
Main characteristics of the terminal:
• Total Area: 123 ha
• Number of berths: 13
• Quay length: 2,201 m
• Maximum ship draft: 11 m
• Railway track length: 6,037 m
Capacity
• Containers: 1,000,000 TEU
• Other bulk cargo: 900,000 tonnes
• Cars: 190,000 units
• Ro-Ro terminal capacity: 30,000 units
• Reefer sockets: 3,630
Western Speed Diameter
Tunnel
Ro-Ro
Terminal
Reefers
Loaded containers
28
(1) As of 30.06.2014
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
FCT: TERMINAL LAYOUT(1)
Main characteristics of the terminal:
• Total Area: 89 ha
• 4 operational berths of 780 m length, depth
alongside – 11.5 meters
• Railway track length: 3.3 km
Capacity
• Containers: 1,250,000 TEU
• Reefer sockets: 2,905
VSC: TERMINAL LAYOUT(1)
29
(1) As of 30.06.2014
Berths
Railway line Railway line
Coal
terminal
Reefers
Loaded containers
Empty containers
Main characteristics of the terminal:
• Total Area: 72 ha
• Number of berths: 4
• Total length of the quay line: 1,284 m
• Quay water depth: 13.5 m
• Railway infrastructure: 3 railway lines
• Container capacity: 650,000 TEU
• Reefer containers storage area: 225 plugs
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
MOBY DIK: TERMINAL LAYOUT(1)
30
(1) As of 30.06.2014
Container yard
City ring road
Reefer container yard
Container yard
Reefers
Loaded containers
Empty containers
Area for potential
development
Custom inspection zone
Main characteristics of the terminal:
• Total Area: 15.1 ha
• Two cargo quays able to accept container
vessels and Ro-Ro vessels
• Total quay length is 321 m
• Maximum vessel draft is 8.9 m
• Container capacity: 400,000 TEU
• Reefer stands with 504 sockets
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
Buffer area for
handling vessels
VEOS: TERMINAL LAYOUT(1)
31
(1) As of 30.06.2014
Area to be developed
Gulf of
Finland
Pakterminal
Trendgate terminal
Termoil terminal
Pipelines
18 m
Railway unloading
Railway unloading
Railway unloading
Main characteristics of the terminal:
• Area: 131.2 ha
• Berths: 7
• Access: Vessel, Barge, Rail, Truck
• Capacity: 1,026,000 cbm
• Tanks: 78
• Tank range: from 1,500 to 100,000 cbm
• 442 advanced rail unloading positions
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
ULCT: TERMINAL LAYOUT(1)
32 Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
(1) As of 30.06.2014
• Operations started in December 2011
Main characteristics of the terminal:
• Total Area: 39 ha
• Length of operational berths: 440 m, depth
alongside: up to 13.5 m
• 5 railway tracks of 525m length (25 rail wagons)
each
Capacity
• Containers: 440,000 TEU
• Reefer sockets: 420
Reefers
Containers
YANINO: TERMINAL LAYOUT(1)
33
(1) As of 30.06.2014
Temporary storage
warehouse (TSW)
Koltushskoe highway St.Petersburg
C class warehouse (cold)
General cargo area
Rail crossing
Ref. containers area
Railway lines
Container yard
Area to be
developed
Reefers
Loaded containers
Main characteristics of the terminal:
• Total Area: 51.3 ha
• Container Capacity: 200 000 TEU
• General cargo capacity: 400 000 tonnes
• Railway infrastructure: 2 railway lines with
4 km of overall length
• C class warehouse: 29 500 sqm
• № of el. plugs: 120
Custom zone for bulk cargo
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
LOGISTIKA TERMINAL: TERMINAL LAYOUT(1)
34
St.Petersburg Moskovskoe highway
A class warehouse
C class warehouse (cold)
Railway lines
(1) As of 30.06.2014
Reefers
Loaded containers
Container yard
Roofed rail flyover
Temporary storage
warehouse (TSW)
Definitions for terms marked in this presentation with capital letters provided in the Appendices at pages 35-36
Access road
Main characteristics of the terminal:
• Total Area: 92 ha
• Container Capacity: 200,000 TEU
• Heated warehouse: 10,500 sqm
• Unheated warehouse: 6,000 sqm
• № of el. plugs: 50
Custom zone for containers
DEFINITIONS
35
Adjusted EBITDA (a non-IFRS financial measure) for Global Ports Group is defined as profit for the period before income tax expense, finance income/(costs)-net, share of profit/losses of JVs accounted
for using equity method, depreciation of property, plant and equipment, amortisation of intangible assets, other gains/(losses)-net, impairment charge of property, plant and equipment, and impairment
charge of goodwill;
Adjusted EBITDA Margin (a non-IFRS financial measure) is calculated as Adjusted EBITDA divided by revenue, expressed as a percentage;
Average Storage Capacity is a storage capacity available at Vopak E.O.S. oil products terminals, averaged for the beginning and end of the year;
Baltic Sea Basin is the geographic region of northwest Russia, Estonia and Finland surrounding the Gulf of Finland on the eastern Baltic Sea, including St. Petersburg, Tallinn, Helsinki and Kotka;
Container Throughput in the Russian Federation Ports is defined as total container throughput of the ports located in the Russian Federation, excluding half of cabotage cargo volumes. Respective
information is sourced from ASOP (“Association of Sea Commercial Ports”, www.morport.com);
Cash Costs of Sales (a non-IFRS financial measure) are defined as cost of sales, adjusted for depreciation and impairment of property, plant and equipment, amortisation of intangible assets;
Cash Administrative, Selling and Marketing expenses (a non-IFRS financial measure) are defined as administrative, selling and marketing expenses, adjusted for depreciation and impairment of
property, plant and equipment, amortisation of intangible assets;
CD Holding group consists of Yanino Logistics Park (an inland terminal in the vicinity of St-Petersburg), CD Holding and some other entities. The results of CD Holding group are consolidated in the Global
Ports’ financial information using equity method of accounting (proportionate share of net profit shown below EBITDA);
Far East Basin is the geographic region of southeast Russia, surrounding the Peter the Great Gulf, including Vladivostok and the Nakhodka Gulf, including Nakhodka on the Sea of Japan;
First Container Terminal (FCT) is located in the St. Petersburg harbour, Russia’s primary gateway for container cargo and is one of the first specialised container terminals to be established in the USSR.
The Global Ports Group owns a 100% effective ownership interest in FCT. The results of FCT are fully consolidated;
Finnish Ports segment consists of two terminals in Finland, MLT Kotka and MLT Helsinki (in port of Vuosaari), in each of which Container Finance currently has a 25% effective ownership interest. The
results of the Finnish Ports segment are consolidated in the Global Ports’ financial information using equity method of accounting (proportionate share of net profit shown below EBITDA);
Fuel Oil Export Market is defined as the export of fuel oil from ports located in the Former Soviet Union countries;
Functional Currency is defined as the currency of the primary economic environment in which the entity operates. The functional currency of the Company and certain other entities in the Global Ports
Group is US dollars. The functional currency of the Global Ports Group’s operating companies for the years under review was (a) for the Russian Ports segment, the Russian rouble, (b) for Oil Products
Terminal segment, and for the Finnish Ports segment, the Euro;
Gross Container Throughput represents total container throughput of a Group’s terminal or a Group’s operating segment shown on a 100% basis. For the Russian Ports segment it excludes the
container throughput of the Group’s inland container terminals, Yanino and Logistika Terminal;
Logistika Terminal (LT) is an inland container terminal providing a comprehensive range of container freight station and dry port services at one location. The terminal is located to the side of the St.
Petersburg - Moscow road, approximately 17 kilometres from FCT and operates in the Shushary industrial cluster. The Global Ports Group owns a 100% effective ownership interest in LT. The results of LT
are fully consolidated;
LTM Adjusted EBITDA (a non-IFRS financial measure) represents Adjusted EBITDA for the last twelve months;
MLT group consists of Moby Dik (a terminal in the vicinity of St-Petersburg) and Multi-Link Terminals Oy (terminal operator in Vuosaari (near Helsinki, Finland) and Kotka, Finland). The results of MLT
group are consolidated in the Global Ports’ financial information using equity method of accounting (proportionate share of net profit shown below EBITDA);
Moby Dik (MD) is located on the St. Petersburg ring road, approximately 30 kilometers from St. Petersburg, at the entry point of the St. Petersburg channel. It is the only container terminal in Kronstadt.
The Global Ports Group owns a 75% effective ownership interest in MD, Container Finance LTD currently has a 25% effective ownership interest. The results of MD are consolidated in the Global Ports’
financial information using equity method of accounting (proportionate share of net profit shown below EBITDA);
DEFINITIONS
36
Net Debt (a non-IFRS financial measure) is defined as a sum of current borrowings and non-current borrowings, less cash and cash equivalents and bank deposits with maturity over 90 days;
Oil Products Terminal segment consists of the Group’s 50% ownership interest in Vopak E.O.S. (in which Royal Vopak currently has a 50% effective ownership interest). The results of the Oil Products
Terminal segment are consolidated in the Global Ports’ financial information using equity method of accounting (proportionate share of net profit shown below EBITDA);
Operating Cash Costs of Russian Ports are defined as total Russian Ports segment’s cost of sales and administrative, selling and marketing expenses, less segment’s less depreciation and
impairment of property, plant and equipment, less amortisation of intangible assets, a non-IFRS measure;
Petrolesport (PLP) is located in the St. Petersburg harbour, Russia’s primary gateway for container cargo. The Group owns a 100% effective ownership interest in PLP. The results of PLP are fully
consolidated;
Revenue per CBM of Storage is defined as the total revenue of Oil Products Terminal segment (Vopak E.O.S.) for a respective period divided by Average Storage Capacity during that period;
Revenue per Tonne of Throughput is defined as the total revenue of Oil Products Terminal segment for a respective period divided by Oil Products Terminal segment’s Gross Throughput in tonnes;
Ro-Ro, roll on-roll off is cargo that can be driven into the belly of a ship rather than lifted aboard. Includes cars, buses, trucks and other vehicles;
Russian Ports segment consists of the Global Ports Group’s interests in PLP (100%), VSC (100%), FCT (100%), ULCT (80%) (in which Eurogate currently has a 20% effective ownership interest),
Moby Dik (75%), Yanino (75%) (in each of Moby Dik and Yanino Container Finance currently has a 25% effective ownership interest), and Logistika Terminal (100%). The results of Moby Dik and Yanino
are consolidated in the Global Ports’ interim condensed consolidated financial information for first half of 2014 as well as to the Illustrative Combined Metrics of first half of 2013 financial information using
equity method of accounting (proportionate share of net profit shown below EBITDA);
TEU is defined as twenty-foot equivalent unit, which is the standard container used worldwide as the uniform measure of container capacity; a TEU is 20 feet (6.06 metres) long and eight feet (2.44
metres) wide and tall;
Total Operating Cash Costs (a non-IFRS financial measure) is defined as Global Ports Group’s cost of sales, administrative, selling and marketing expenses, less depreciation and impairment of
property, plant and equipment, less amortisation of intangible assets;
Transaction is the acquisition of 100% of the share capital of NCC Group Limited, announced on 2 September 2013 and completed on 27 December 2013;
Ust Luga Container Terminal (ULCT) is located in the large multi-purpose Ust-Luga port cluster on the Baltic Sea, approximately 100 kilometres westwards from St. Petersburg city ring road. ULCT
began operations in December 2011. The Global Ports Group owns a 80% effective ownership interest in ULCT, Eurogate, the international container terminal operator, currently has a 20% effective
ownership interest. The results of ULCT are fully consolidated;
Vopak E.O.S. includes AS V.E.O.S. and various other entities (including an intermediate holding) that own and manage an oil products terminal in Muuga port near Tallinn, Estonia. The Group owns a
50% effective ownership interest in Vopak E.O.S.. The remaining 50% ownership interest is held by Royal Vopak. The results of Vopak E.O.S. are consolidated in the Global Ports’ financial information
using equity method of accounting (proportionate share of net profit shown below EBITDA);
Vostochnaya Stevedoring Company (VSC) is located in the deep-water port of Vostochny near Nakhodka on the Russian Pacific coast, approximately eight kilometers from the Nakhodka-Vostochnaya
railway station, which is connected to the Trans-Siberian Railway. The Group owns a 100% effective ownership interest in VSC. The results of VSC are fully consolidated; and
Yanino Logistics Park (YLP) is the first terminal in the Group’s inland terminal business and is one of only a few multi-purpose container logistics complexes in Russia providing a comprehensive range
of container and logistics services at one location. It is located approximately 70 kilometres from the Moby Dik terminal in Kronstadt and approximately 50 kilometres from PLP. The Global Ports Group
owns a 75% effective ownership interest in YLP, Container Finance LTD currently has a 25% effective ownership interest. The results of YLP are consolidated in the Global Ports’ financial information
using equity method of accounting (proportionate share of net profit shown below EBITDA).
INVESTOR RELATIONS Mikhail Grigoriev
Tatyana Stepanova
Phone: +357 25 313 475 E-mail: [email protected] Web: www.globalports.com
37