Adani Ports & Special Economic Zone Ltd · NSE:ADANIPORTS
Adani Ports & Special Economic Zone — Investor Presentation (September 2020)
56 slides from Adani Ports & Special Economic Zone's investor presentation, September 2020
Slide 1: Adani Ports and SEZ Limited, September 2020
September, 2020 Adani Ports and SEZ Limited Updated - September, 2020
Slide 2: Contents
04-07 Group Profile 09-17 Company Profile 19-27 Financial Profile 29-35 ESG 36-55 Annexures
Slide 3: Group Profile
adani Ports and Logistics Group Profile
Slide 4: Adani Group portfolio, ~USD 35 bn combined market cap
Adani Adani Transport & Logistics Energy & Utility Portfolio Portfolio • Marked shift from B2B to B2C businesses– 63.5% 100% 75% 75% • AGL – Gas distribution network to serve key APSEZ SRCPL ATL AGEL geographies across India Port & Logistics Rail T&D Renewables • AEML – Electricity 100% 75% 37.4% di
Slide 5: Infrastructure development lifecycle and capital management
Phase Development Operations Post Operations Origination Site Development Construction Operation Capital Mgmt Analysis & Site acquisition Engineering & Life cycle O&M Redesigning the market design planning capital structure of Activity intelligence Concessions Asset the asset and regulatory Sourcing
Slide 6: Successfully applied across infrastructure and utility platform
Successfully applied across Infrastructure & utility platform Development at large scale & within time and budget India’s Largest Longest Private HVDC 6 4 8 MW Ultra Mega Largest Single Location Commercial Port Line in Asia Solar Power Plant Private Thermal IPP (at Mundra) (Mundra – Dehgam) (at Kamu
Slide 7: Ports, Logistics and SEZ
Ports Logistics SEZ • Nine operating Ports, ~410 MMT • Largest integrated logistics player • Large scale ‘ready to setup’ of augmented capacity in India. in India. industrial land (SEZ) • Hinterland reach of 60%-70% • Operating 60+ rakes, 5 IFTs and • Land Bank of 10,000 ha. at • Targeting East and
Slide 8: Part I - APSEZ Company Profile
. adani Ports and Part | - APSEZ Company Profile
Slide 9: Logistics Platform
Tech enabled Ports Ports operations One Oneto toten tenin in twenty twentyyears years String of Ports Consumer facing yet Ports of Prosperity Ubiquitous to Consumer gate to ship customer trajectory SEZ SEZ philosophy creates an “Logistics Platform” 10k+* Ha of ~10k+ Ha of land interplay between Land
Slide 10: West and East Coast port capacity
1 West Coast East Coast Capacity Capacity FY20 1 327 MMT 99 MMT Port FY06 Dahej 14 MMT Kandla 14 Capacity 10 MMT MMT 426 MMT Assets^ $468 $8,251 Mundra 264 MMT Dhamra Hazira 45 MMT 30 MMT Vizag Mundra - 6 India’s Largest MMT Commercial 66% 63% Port by 22% FY20 Kattupalli 92% FY15 8% 78% Volume 18 MM
Slide 11: Volume growth consistently ahead of All India Ports
APSEZ Total Throughput All India Ports Total Cargo CAGR – 10% CAGR – 6% Container CAGR – 17% Container CAGR – 9% 1600 250 1400 1200 200 1000 150 800 223 1282 1339 100 208 600 1134 1208 180 1072 169 152 400 50 91 75 84 62 200 49 224 248 256 181 199 0 0 FY16 FY17 FY18 FY 19 FY 20 FY16 FY17 FY18 FY 19
Slide 12: New cargo added and cargo mix
New Cargo Added - Coal Container Crude Others 41% 41% 41% 41% 37% 32% 36% 33% 33% 32% Mundra LPG 16% 15% 15% 15% 14% 12% 12% 13% 11% 11% FY 16 FY 17 FY 18 FY 19 FY 20 Mundra LNG 12
Slide 13: Sticky cargo trend
Sticky Cargo Trend Sticky Cargo Constitutes ~60% of total cargo. 128 121 111 Increasing at a CAGR of ~10% 108 FY17 FY18 FY19 FY20 81% of sticky cargo at Mundra. Port, as other port mature share of Sticky Cargo Composition- Port wise & Cargo wise sticky cargo from other ports will 5% increase.
Slide 14: Increasing hinterland reach through organic and inorganic path
Jammu Kashmir (In USD Billion) Himachal Pradesh Punjab Arunachal Pradesh Region FY19 FY25 Uttaranchal Haryana West 1290 2520 Sikkim East 438 823 Rajasthan Uttar Pradesh Assam Nagaland South 706 1359 Bihar Meghalaya Manipur Total 2434 4702 Jharkhand Gujarat Madhya West Mizoram Pradesh Bengal Tripura
Slide 15: The Journey
The Journey 2020 2020 8 4.0 1.5 3.3 8 Rail Volume (lakh TEUs) 4.0 14 14 Terminal Capacity (lakh 2019 2019 TEUs) 4 Warehousing Capacity (lakh 4.0 5 sqft.) 5.0 Barges Logistics Park Silos 15
Slide 16: Bringing customer inside Port gate
West Coast (80%) East Coast (20%) Mundra SEZ • Kattupalli (~260 Ha) Mundra 8,481 ha ~ 8500 Ha 20% • Dhamra (~1650 Ha) 80% ~1650 Dhamra ha West Coast East Coast Kattupalli ~260 ha • Bringing customer inside Port gate • Entrenching into customer’s supply chain – Higher Consumer Interface • Providing M
Slide 17: Faster growth than peers
Revenue Growth (3 yr CAGR) EBITDA Margin % 22.0% 64.0% Faster Growth than peers 46.7% 12.0% 42.8% 42.7% Name Credit Rating ESG Rating 39.0% APSEZ** Baa3/BBB-/BBB- CCC 4.8% 28.3% 3.7% 3.5% Peer 1 Baa1/A-/- BB Peer 2 Baa3/-/BBB BB Peer 2 APSEZ Peer 5 Peer 3 Peer 4 Peer 1 APSEZ Peer 1 Peer 3 Peer 4 Pee
Slide 18: Part II - APSEZ Financial Profile
. adani Ports and Part Il - APSEZ Financial Profile
Slide 19: Consistent investment grade rating, reducing cost of capital
Consistent investment grade Elongated debt maturity profile Liability Management- rating • Increased to 5 years. Natural Hedge • Since FY16, capped at sovereign. • Shift towards long term • Debt mix - FX 68% and INR 32%. • Earnings growth and free cash debt (74% in FY16 to 95% • US dollar denominate
Slide 20: Gross debt, net debt and product mix
Gross Debt, Net Debt & Net Debt to EBTIDA Product Mix 35 8.0x Thousands 7.0 29 1% 4% 30 6.4 7.0x 14% 6.3 9% 27 3% 5.7 7% 5.4 6.0x 25 22 21 21 22 20 21 17% 5.0x 20 19 18 47% 4.4x 4.0x 15 3.4x 3.0x 10 2.9x 2.9x 61% 2.5x 2.0x 17% 5 1.0x 20% - 0.0x FY16 FY17 FY18 FY19 FY20 Mar-16 Mar -20 Gross Debt Net
Slide 21: Improved maturity profile and interest cost
Improving Interest cost Shrinking APSEZ Spread 2.4% 2.38% 7.50% 6.97% 2.15% 7.00% 2.2% 1.95% 54% 1.95% 6.40% 6.50% 6.29% 2.0% 47% 1.50% 6.00% 1.8% 5.50% 5.70% 1.6% 34% 5.42% 5.00% 1.4% 24% 4.50% 22% 1.2% 4.00% 3.50% 1.0% Jul-15 Jan-17 Jun-17 Jul-19 Jul-19 6% 6% 3.00% 5% FY16 FY17 FY18 FY19 FY20 5 Ye
Slide 22: FX vs INR, secured vs unsecured, long vs short term debt
FY16 FX vs. INR Debt FY20 • FX to INR debt maintained at 68% 32% 32% • Unsecured debt increased from 46% to 71%. Foreign Currency • Shift towards long term debt (95%), Indian This improves maturity and liquidity position. Currency • Debt profile commensurate with asset profile 68% 68% FY16 Secured v
Slide 23: Rating ratios and FX coverage
Rating Ratios 30.0% 6.0x 25.0% 4.5x 4.9x 4.8x 5.0x • Net debt to EBITDA* maintained at 2.9x 4.4x 4.4x which is below our desired level of 3x-3.5x. 20.0% 4.0x 3.1x 15.0% 3.4x 3.0x • All key rating ratios continue to be in the 2.9x 2.9x prescribed range. 2.5x 10.0% 2.0x 5.0% 1.0x • Earnings growth and
Slide 24: ROCE and ROE
ROCE and ROE • Returns ratio continues to be robust. 24.9% • ROE is compressed in FY20 due to MTM 22.6% accounting for forex debt (normalized ROE at 21%). 19.0% 17.6% 14.9% • Capex program is validated through 14.4% 13.5% 12.6% stringent mechanism to achieve targeted 12.1% 11.0% returns (IRR) of >16
Slide 25: Rationale for Investment
adani Ports and Logistics Rationale for Investment
Slide 26: Capital employed, EBITDA, leverage and ROCE FY16-FY25
FY16 FY20 FY25 Capital Employed** Rs.341 bn. 1.4x Rs.480 bn. 1.05x Rs.505 bn. • Strict covenant management to maintain/improve IG rating. • EBITDA to double in 5 years EBITDA Rs.46 bn. 1.7x Rs.76 bn. 1.9x Rs.145bn. with minimal further investment. • Maturing of greenfield/ Net Debt / acquisition wil
Slide 27: Why invest with us? Medium term growth targets
Why Invest with us? APSEZ : Medium • The Logistics platform which enables and encapsulates the entire Term Growth Targets gamut of supply chain. • A transport & logistics utility that dominates the network. • Presence across coastline of India de-risks portfolio, working ~25% ~14% towards east coast
Slide 28: Part III - Environment Social & Governance
adani Ports and Logistics Part Ill - Environment Social & Governance
Slide 29: Adherence to global environment guidelines
Adherence to global environment guidelines like – Disclosure in CDP – Climate Change and Water Security, SBTi; Supporter of TCFD, Member of IUCN All port certified with Integrated Management System (ISO 9001, 14001 & 45001) and 4 ports with Energy Management System (ISO 50001). Focus on Employ
Slide 30: Environment related factors
Environment related Factors Climate Optimizing Carbon Intensity Resource and Bio-diversity Waste Management Awareness • Carbon foot-printing and disclosure • Energy Management • Waste Reduction (5R* ) • Improving Carbon Efficiency • Optimizing Input Consumption • Circular Economy Climate • Approachi
Slide 31: Offsetting carbon emission, conservation of resources, waste management
Offsetting Carbon Emission Conservation of Resource Waste Management Climate Awareness • Increase Renewable Energy share • Reduce freshwater withdrawal • Material Recovery Facility • Promote low carbon technology • Reuse, recycle and replenish water • Biogas Plant (Waste to Energy) Climate • Organic
Slide 32: Climate awareness
Business and future investment aligned to sustainable growth with focus on preserving environment Climate (Disclosure in public domain) Awareness • Carbon disclosure in Public domain. • ESG disclosures vide corporate sustainability assessment platform of DJSI-S&P Global Adhering to disclosure in CDP
Slide 33: Natural resource conservation targets
Target by FY 21 Target by FY 25 Energy Intensity – 40% Reduction Energy Intensity – 50% Reduction Natural Resource Conservation Water Neutrality Roadmap Alliance for Water Stewardship Water Intensity – 50% Reduction Water Intensity - 55% Reduction RE Installation – 20 MW RE Installation – 100 MW Car
Slide 34: Social targets by FY21 and FY25
Target by FY 21 Target by FY 25 Safety Mandatory Induction Training for BSC 5 Star Audit and Certification everyone entering Work area Employee Turnover < 6% Employee Turnover < 5% Employee Development and Employee Satisfaction Score - 4.2/5 Employee Satisfaction Score - 4.5/5 Welfare Average Traini
Slide 35: Policy, board members and capital structure
Recent Policy Initiatives FY21 Targets Policy on “Related Party Transaction All CXOs level employees and KMPs for Acquiring and Sale of Assets”. compensation to be linked to safety. Policy Capital Allocation policy for all new Audit Committee and Nomination & Remuneration Committee consisting projec
Slide 36: Annexures contents
38-42 Q1 FY21 Results Highlights 44-46 Outlook 47 APSEZ – Credit Ratings 49-50 Technology and People 52-54 ESG – Achievements & Case Studies 55 Adani Group – Credit Portfolio
Slide 37: Q1 FY21 Highlights
. adani Ports and Q1 FY21 Highlights
Slide 38: Q1 FY21 cargo volume and mix
57 257 Coal Container Crude Others 41 199 41% 43% 41% 41% 47% 41% 37% 32% 29% 36% 33% 33% 32% 28% APSEZ All India 16% 19% Q1 FY20 Q1 FY21 Q1 FY20 Q1 FY21 14% 15% 15% 15% 14% 12% 12% 13% 10% 11% 11% 10% 22 64 18 FY15 FY 16 FY 17 FY 18 FY 19 FY 20 Q1 FY21 47 APSEZ All India Q1 FY20 Q1 FY21 Q1 FY20 Q1
Slide 39: Container volumes, acquisitions and operational highlights
• APSEZ handled 1.23 mn TEUs vs. 3.22 mn TEUs of all • Acquisition of KPCL is on track, CCI approval received, India container volume taking the market share to 38%. expected to be complete in Q2 FY21. • Cargo mix moves towards higher realization cargo. • Dighi Port Acquisition – Mumbai bench of NCL
Slide 40: Operating revenue lower on port volume decline
(YoY - Rs. in cr.) • Operating revenue lower by 18% due to 27% decline in port volume. Operating Revenue 2794 • Port revenue at Rs.1,904 cr. in Q1 FY21 vs Rs.2,425 cr. in Q1 FY20. 2293 • Port EBITDA* at Rs.1,324 cr. in Q1 FY21 vs Rs.1,709 cr. in Q1 FY20. • Port EBITDA margin maintained at 70%. • Log
Slide 41: Revenue and EBITDA by segment
(YoY - Rs. in cr.) 200 2425 181 • Decline in port revenue of 21% is 1904 lower than 27% decline in cargo 117 122 volume due to change in cargo mix. 58 59 • Logistics revenue increased on 13 7 account of additional rail capacity, new routes and addition Ports Logistics O&M Operations Others SEZ of B2
Slide 42: ESG performance and ratings
Y-o-Y Performance Initiatives till date Energy Intensity* Emission Intensity* Wind Energy # Solar Energy# 15 % ↑ 1%↓ 6 MW 13 MW 226 GJ/Revenue 25.12 tCO2e/Revenue Waste Management* Terrestrial Plantation Mangrove Water Intensity* 2889 Ha - Afforestation 6%↑ 91% 1.1 Million 2340 Ha - Conservation Was
Slide 43: Outlook
adani Ports and Logistics Outlook
Slide 44: GDP outlook and COVID-19 response
• GDP expected to contract significantly in FY21. • To bounce back from H2 FY21 due to measures taken by govt. to boost demand. • To recover in FY22 with a expected growth of 6-7%. • Port operation classified as an ‘essential service’ and all our ports are operating. • Cargo volume declined by 27% i
Slide 45: Economic outlook and operations outlook
Economic Outlook Operations Outlook • Cargo volume lower due to slow movement of road transport and supply bottlenecks. • Availability of manpower to be a challenge this will impact productivity in the short term. • Situation expected to improve progressively from 4th May as lockdown will be lifted
Slide 46: Liquidity management and cash conservation
Liquidity Management Focus on Cash Conservation • Focus on maintaining adequate liquidity to tide over • Rationalizing operating expenses : uncertainties and unpredictable scenarios. • Improving efficiency and optimizing cost. • Converting fixed cost to variable cost. • Fully covered in-terms of deb
Slide 47: APSEZ international and domestic credit ratings
APSEZ - International Rating Joint Ventures –Domestic Ratings Rating Agency Rating/ Outlook Remarks Rating Agency Rating/ Outlook Company Remarks Rating AICTPL Fitch BBB-/Negative CARE AA/Stable Long Term reaffirmed (JV with Facilities in spite of MSC) Moody’s Baa3/Negative COVID-19 Adani CMA (JV In
Slide 48: Technology & People
Technology & People
Slide 49: Building best-in-class technology
Design Bidding Automated Automated & Integrated Workflow Project Management Workflow & Platforms for Internal and External 1 Data Based Stakeholders – providing visibility Operations Collaboration Decision making & data based decision making Project Closeout Data Capturing Data and using Integrate 2
Slide 50: Leadership pipeline and capability development
Leadership pipeline Continuous Capability Talent development Development Management • Leadership readiness for new • Focused training approach. • Create Opportunities for business and international expansion. Internal Talent. • People in sync with changing needs. • Successor Identification, • Latera
Slide 51: ESG - Achievements & Case Studies
. adani Ports and ESG - Achievements & Case Studies
Slide 52: Environment related factors that matter to our business model
Environment related factors that matter to our business model Climate Carbon Emission Resource Management Waste Management Awareness Used 3952 ML water in FY20; avoided Avoided 15320 tCO2 in FY20 by 5718 MT of waste was disposed 74% water withdrawal from shared 19MW of RE projects. and 94% of
Slide 53: Community education, health and livelihood initiatives
Education Community Health Free Education – Transportation Support – Medical Support – Support for Insurance cover – 155 students 605 students 9876 persons 2566 persons Play School for – Turtle Conservation Trainings Senior Citizen Scheme Medical Financial Support in to Fishermen – (above 60 years)
Slide 54: Renewable energy and integrated waste management
Renewable Energy Initiatives Integrated Waste Management Energy Mix Waste Management through 5R Principle (Reduce, Reuse, Reprocess, Recycle, Recover) Renewable 6% Renewable 25% FY 2 0 Conventional FY 25 Conventional 75% 94% Initiatives Achievements E-RTG Conversion of D-RTG to E-RTG Replaced mechan
Slide 55: Adani Group credit portfolio and bond issuances
Issue Issue Size (USD Company Coupon Current Yield# Price# Maturity Date Debt Structure Rating Date Mn.) BBB- (S&P, Fitch) / Baa3 Aug,20 750 4.20% 4.10% 102.31 04-Aug-2027 Bullet (Moody's) BBB- (S&P, Fitch) / Baa3 Jul,19 650 3.38% 3.28% 102.58 24-Jul-2024 Bullet (Moody's) BBB- (S&P, Fitch) / Baa3 AP
Slide 56: Investor Relations Team
Certain statements made in this presentation may not be based on historical information or facts and may be “forward-looking statements,” including those relating to general business plans and strategy of Adani Ports and Special Economic Zone Limited (“APSEZL”),the future outlook and growth prospect
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