Adani Ports & Special Economic Zone Ltd · NSE:ADANIPORTS
Adani Ports & Special Economic Zone — Debt Investor Presentation (May 2020)
46 slides from Adani Ports & Special Economic Zone's debt investor presentation, May 2020
Slide 1: Adani Ports and SEZ Limited, May 2020
May, 2020 Adani Ports and SEZ Limited Updated - May, 2020
Slide 2: Contents
04-07 Group Profile 09-11 Company Profile 12-23 APSEZ Credit Story 25-29 ESG 31-46 Annexures
Slide 3: Adani Group Profile
adani Ports and Logistics Adani Group Profile
Slide 4: Adani Portfolio
Transport & Logistics Energy & Utility Portfolio Adani Portfolio Adani • Philosophical shift fromB2B 63.3% 100% 75% 75% to B2C businesses– APSEZ SRCPL ATL AGEL • AGL – Gas distribution Port & Logistics Rail T&D Renewables network to serve key geographies across India 100% 75% 37.4% • AEML – Electric
Slide 5: Infrastructure development lifecycle
Development Operations Post Operations Phase Origination Site Development Construction Operation Capital Mgmt Analysis & Site acquisition Engineering & Life cycle O&M Redesigning the market design planning capital structure of intelligence Concessions the asset and regulatory Sourcing & Asset Activi
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 64 8 MW Ultra Mega Largest Single Location Commercial Port HVDC Line in Asia Solar Power Plant Private Thermal IPP (at Mundra) (Mundra – Dehgam) (at Kamut
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) Development • Hinterland reach of 60%-70% • Operating 60+ rakes, 5 IFTs and • Land Bank of 10,000 ha. at • Targeti
Slide 8: Part I - APSEZ Company Profile
Part | - APSEZ Company Profile Logistics
Slide 9: Ports to Platform
Tech enabled operations Ports One to ten in twenty years String of Ports Consumer facing yet Ports of Prosperity Ubiquitous to customer trajectory SEZ "Ports to Platform” ~10k+ Ha of land bank Network dominance, Competitiveness is the moat Integrated Logistics (CTO to IWW and Intimate connection AFS
Slide 10: Economic hinterland reach by region
Jammu Kashmir Himachal Pradesh Punjab Arunachal (In USD Billion) Uttaranchal Pradesh Haryana Region FY19 FY25 Sikkim West 1290 2520 Rajasthan Uttar Pradesh Assam Nagaland East 438 823 Bihar Meghalaya Manipur South 706 1359 Jharkhan Gujarat Madhya d West Mizoram Total 2434 4702 Pradesh Bengal Tripura
Slide 11: India's largest and diversified private rail operator
Rail Volume (lakh TEUs) Terminal Capacity (lakh TEUs) 3.3 2007 4.0 1.5 Terminal Volume (lakh TEUs) 4.0 Warehousing Capacity (lakh sqft.) 2019 4.0 2020 2007 3.3 2.4 5.0 2007 8 8 Barges Logistics Park 14 14 2018 2019 Silos 2020 4 5 2018 India’s largest and diversified private rail operator 2020 11
Slide 12: Part II - APSEZ Credit Story
Part Il - APSEZ Credit Story Logistics 12
Slide 13: Consistent investment grade rating and reduced cost of capital
Consistent investment grade Elongated debt maturity profile Liability Management- rating • Increased to 5 years. Natural Hedge • Since FY16, capped at sovereign. • We are moving towards • Debt mix - FX 68% and INR 32%. • Earnings growth and free cash unsecured debt (46% in • US dollar denominated in
Slide 14: APSEZ - Credit Matrix Move
APSEZ - Credit Matrix Move Logistics 14
Slide 15: 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 16: Long vs short term, FX vs INR, secured vs unsecured debt
FY16 Long vs. Short Term FY20 FY16 FX vs. INR Debt FY20 26% 5% 32% 32% Foreign Currency Long Term Indian Short Term Currency # 68% 68% 95% 74% FY16 Secured vs. Unsecured FY20 • Shift towards long term debt (95%), 29% This improves maturity and liquidity position. 54% 46% • Debt profile commensurate
Slide 17: FX revenue and debt maturity coverage
FX Revenue and Debt Maturity#, Coverage 3000 350% 2.9x 300% 2500 2.8x 2,652 2.7x 250% • Coverage of forex debt maturity# in terms of 2,163 2000 2,129 dollar earnings has increased from 0.7x in 1,978 1,888 200% FY16 to 2.9x in FY20. 1500 1.5x • Annual FX earnings provides natural hedge 150% to foreig
Slide 18: Presence in global debt capital market
Presence in global debt capital Marque names in investors base market Elongating Maturity Offering the entire yield curve to & the investors. Reducing spreads Debt Management Credit quality ensures higher subscriptions to issuances Highest Credit quality & Stable Rating Covenants to policy guideline
Slide 19: Rating ratios, ROCE and ROE
Rating Ratios 30.0% 6.0x 4.9x 4.8x 25.0% 4.5x 4.4x 27.6% 5.0x 25.1% 20.0% 22.4% 22.6% 22.6% 4.0x 3.1x 15.0% 17.0% 18.6% 18.6% 3.0x • Key rating ratios consistently within prescribed range. 10.0% 11.5% 2.0x 11.1% 5.0% 1.0x • Earnings growth and free cash flow generation to fortify coverage. 0.0% 0.0x
Slide 20: FY16 to FY25 capital employed, EBITDA and leverage
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 Rs.46 bn. 1.7x Rs.76 bn. 1.9x Rs.145bn. • EBITDA to double in 5 years with minimal further investment. Net Debt / EBIDTA 4.4x 160 bps 2.9x 3x • Maturing of
Slide 21: 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 22: Rationale for Investment
adani Ports and Logistics Rationale for Investment
Slide 23: Why invest with us? Medium term growth targets
Why Invest with us? APSEZ : Medium • The Platform which enables and encapsulates the entire gamut of supply chain. Term Growth Targets • A transport & logistics utility that dominates the network. • Presence across coastline of India de-risks portfolio, working ~25% ~14% towards east coast and west
Slide 24: Part III - Environment Social & Governance
adani Ports and Logistics Part Ill - Environment Social & Governance
Slide 25: ESG performance and current rating
52 % ↓* 37 % ↓* 6 MW 13 MW Energy Intensity Emission Intensity Wind Turbine Solar Panel 9074 GJ/MMT 1407 tCO2/MMT 44 % ↓* 99% 10 Million 2889 Ha - Afforestation Waste Managed through 5R Trees Planted 2340 Ha - Conservation Water Intensity Waste Management Terrestrial Plantation Mangrove 20.2 ML / MM
Slide 26: Natural resource conservation targets
Target by FY 21 Target by FY 25 Energy Intensity - 55% Reduction Energy Intensity - 60% Reduction Natural Resource Conservation Water Neutrality Roadmap Alliance for Water Stewardship Water Intensity - 45% Reduction Water Intensity - 55% Reduction RE Installation - 26 MW RE Installation - 100 MW Car
Slide 27: Safety, employee, vendor and community targets
Target by FY 21 Target by FY 25 Safety Mandatory Induction Training for BSC 5 Star Audit and Certification of Ports everyone entering into APSEZ Premises Employee Turnover < 6% Employee Turnover < 5% Employee Development and Employee Satisfaction Score - 4.2/5 Employee Satisfaction Score - 4.5/5 Wel
Slide 28: Governance and policy initiatives
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 -Project pre Audit Committee and Nomination & Remuneration Committee consisting tax I
Slide 29: Community development initiatives
Education Community Health Free Education – Transportation Support – Medical Support – Support for Insurance cover – 137 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 30: Annexures contents
32-37 Company Profile 38-41 Outlook 42-43 Credit Rating 44-45 Technology and People 46 Case : Carbon Footprint Reduction
Slide 31: Evolution of APSEZ: 9 ports serving the hinterland
Evolution of APSEZ West Coast East Coast Capacity Capacity FY20 1 FY06 327 MMT 99 MMT 1 Capacity 10 41x 410 MMT MMT Dahej 14 Assets $471 17x $8,223 MMT (US$ mn) Port Kandla 14 MMT Ports* Mundra 264 MMT Achieving East Coast - West Coast Parity Dhamra FY20 Hazira 45 FY19 30 MMT Vizag MMT 20% Mundra -
Slide 32: Volume growth 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 33: 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 33
Slide 34: 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 35: Customer centric end to end logistics
Technology driven multi-modal Logistic Solutions Particulars FY19 FY20 Infrastructure Multi-Modal Rakes 20 60 Rail Volume Logistics Park 150,942 325,067 Rail (TEUs) Grain Silos Logistics Parks 4 5 Terminal Trucking 400,000 500,000 Warehouses Capacity (TEUs) Terminal Volume Cold-Storage 242,868 334,8
Slide 36: Value creation: developing industrial clusters
Developing Industrial Clusters: Total Land Bank ~10k+ Ha. • Mundra SEZ (8000 Ha.) West Coast East Coast 80% 20% Mundra 8,000 20% Proposed industrial development 80% • Kattupalli (150 Ha + 110* Ha) • Dhamra (1200 Ha + 450* Ha) West Coast East Coast Dhamra 1650 Value Creation: • Bringing customer insi
Slide 37: Outlook
adani Ports and Logistics Outlook 37
Slide 38: COVID-19 port operations
• Port operation is classified as an ‘essential service’ and as such all Ports are operating. • Announced Force Majeure to customers in order to mitigate the risks of under- performance due to bottlenecks. • Implementing operating procedures laid down by Govt. of India at all our Ports with safety o
Slide 39: Economic 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 40: 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 41: International and domestic credit ratings
APSEZ - International Rating Joint Ventures –Domestic Ratings Rating Agency Rating/ Outlook Remarks Rating Agency Rating/ Outlook Company Remarks AICTPL Fitch BBB-/Stable No change CARE AA/Stable Long Term (JV with as Facilities MSC) Moody’s Baa3/Stable compared Adani CMA (JV to India Rating A+/Stab
Slide 42: Group USD bond issuances
Company Company Issue date Issue Size (USDMn.) (USD Mn.) Coupon Average Maturity DTD Debt structure Ratings Jul,19 650 3.38% 5 5 Bullet BBB- (S&P, Fitch) / Baa3 (Moody's) APSEZ APSEZ Jun,19 750 4.38% 10 10 Bullet BBB- (S&P, Fitch) / Baa3 (Moody's) Jun,17 500 4.00% 10 10 Bullet BBB- (S&P, Fitch) / Ba
Slide 43: 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 44: 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 45: Carbon footprint reduction and 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 46: 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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