Tallinna Sadam As · OMXTSE:TSM1T
Tallinna Sadam As — Investor Presentation (December 2019)
40 slides from Tallinna Sadam As's investor presentation, December 2019
Slide 1: Unique asset for investment
PORT OF & TALLINN Unique asset for investment
Slide 2: Index
Index 1. Introduction (3-11) 2. Competitive position and strategy (12-30) 3. Recent developments and financial results (31-39)
Slide 3: Presenters
Presenters Marko Raid Marju Zirel CFO/Member of the Management Board Head of Investor Relations 3
Slide 4: Resilient infrastructure business model
Resilient infrastructure business model DIVERSIFICATION PROFITABILITY CASH FLOW GENERATION 2018 Revenue 2018 Adjusted EBITDA Margin 2018 Cash Conversion(2) Peers Average(1) Peers Average(1) 7% 23% 38% €131m 81% 82% 57% 58% 63% 46% 49% 32% 11% Passenger H Cargo H Ferry Other Airports Ports Ferry Airp
Slide 5: Where we operate
Where we operate ESTONIA • Part of EU, eurozone, OECD and NATO • Currency EUR • Next door to Russia, Scandinavia, Baltics • Stable credit rating outlook A1 (Moody’s) and AA- (S&P) • Consistently lowest government debt level in EU 5
Slide 6: A Well Balanced Business Profile
A Well Balanced Business Profile Business segments Passenger Harbours Cargo Harbours Provision of infrastructure for vessels and Provision of infrastructure for vessels and cargo servicing of passengers and vehicles operators Old City Harbour (main) Liquid bulk, Ro-Ro, dry bulk, containers, general
Slide 7: Where we operate
Ice-breaker Where we operate Botnica FROM HARBOURS Tallinn TO VESSEL OPERATIONS Muuga Harbour Old City Harbour Old City Marina Paldiski South Harbour Ferry transfer to islands Saaremaa Harbour
Slide 8: Revenue Structure & Main Customers
Revenue Structure & Main Customers Revenue 2018 Cargo harbours Passenger harbours Regular lines Cruise Terminal operators Shipping lines 38% 32% 7% 23% (2) Adj. EBITDA 2018 Other Ferry Botnica Clients 32% 44% Republic of Estonia 18% Republic of Estonia 6% 8
Slide 9: Revenue model: Passenger harbours
Revenue model Passenger harbours 2018 Contribution Revenue 38% Rental Income 4% 3% • Fixed lease income from operators using PoT’s land premises 3% (commercial operators e.g. shops, restaurants) Adjusted EBITDA Cargo Charges 44% 34% • Pre-agreed tariffs for ro-ro cargo carried on ROPAX vessels Passe
Slide 10: Revenue model: Cargo harbours
Revenue model Cargo harbours 2018 Contribution Revenue 3% Sales of Electricity 32% • Calculated based on the readings of customers electricity meters 12% Adjusted EBITDA Rental Income 22% • Fixed lease income from operators using PoT’s land and facilities 32% Cargo Charges 14% • Pre-agreed tariff ba
Slide 11: Revenue model: Ferry business
Revenue model Ferry business 2018 Contribution Contract Means of Revenue Income Payments Voyage Fee 23% • Coverage of flexible cost, ~ 20% EUR/voyage • Indexed to fuel price (90%) ~ 40% Ticket Sales Adjusted EBITDA and CPI (10%) 18% ~ 30% Variable Fee • Coverage of fixed ope- rating cost, EUR/year b
Slide 12: Competitive position and strategy
Competitive position and strategy
Slide 13: 4th biggest passenger port in Northern Europe
4th biggest passenger port in Northen Europe Finland PAX: consecutive growth for 11 years Oslo Helsinki Norway Sweden St. Petersburg 10.6m Stockholm Tallinn 11 Estonia Millions 10 Russia 9 • 2h voyages to Helsinki 10-15x per day Latvia • Mini-cruises to Stockholm 8 Tallinn-Helsinki • Mini-cruises to
Slide 14: Cargo - change of business model
Cargo - Cargo volume and revenue change of 45 60 business 40 model 35 50 30 40 • Revenue resisting despite of volume mln tons Revenue mEUR 25 downturn in volumes 30 • Less addicted to Russian 20 transit 15 20 o 2007 – political conflict between Estonia and Russia 10 10 o 2012 – Ust-Luga port starts
Slide 15: Restart in cargo
Restart in cargo Rail Baltica 2026 • A shift from East-West to North- http://www.railbaltica.org/ South direction • New operators and business models • Cooperation with Helsinki and other ports • EU TEN-T network connection • China Belt and Road connection • Digitalisation 15
Slide 16: Muuga Harbour
MPG AgroProduction Vopak E.O.S.→ (oil seed complex), Liwathon E.O.S. in progress Bulk&Tank (dry bulk, (liquid bulk) break bulk), in progress Oiltanking→ Olerex PK Terminal (liquid bulk) (dry bulk, break bulk) Transiidikeskus → HHLA TK (containers) Stivis→ Baltic Maritime Rail Baltica Logistics Group
Slide 17: Ferry business
Ferry business Growing service volumes (mln) 2,5 2,3 2,2 2,0 2,1 2,1 2 1,9 • Subsidiary TS Laevad 1,5 veichles (other) 0,9 1,0 PAX (other) 1 0,8 0,9 1,0 0,8 • Operating 5 vessels on 2 routes 0,5 veichles (TS) 0,4 PAX (TS) 0 0,2 • Agreement with the state until 2026 • Additional trips on summer peak-
Slide 18: MPSV Botnica
MPSV Botnica • Subsidiary TS Shipping • Agreement with the state for icebreaking in winter until 2022 • Summer charters (May-Nov): o 2018-2022: Baffinland Iron Mines. Ice management and escort service for iron ore shipments from Baffin island. o 2014: Karmorneftegaz (Rosneft+Exxon Mobile). Support o
Slide 19: Maritime and logistics sector
Maritime and logistics sector MEGATRENDS VISION Larger Unmanned vessels vessels Fully automated terminals and Cost efficiency multimodality Digital data exchange Digitalisation and automation Green port Environmental Client experience requirements 19
Slide 20: Green port
Green port • 93% of ship generated waste reused in the circular economy • Waste water reception via pipeline from PAX ships • On-shore Power Supply • Auto-mooring system • E-Nose system in Muuga • LNG bunkering for ROPAX ships • Silver quality label in CSR • ISO 14001, EBRD standards 20
Slide 21: Growth opportunities - Passengers
Growth opportunities - Passengers • Line traffic development – Muuga-Vuosaari line • Services for Asian clients • Passenger terminals renovation • Continuous growth in cruise - cruise terminal construction • Service speed and quality - Smart Port and traffic management systems, auto-mooring 21
Slide 22: Growth opportunities - Cargo
Growth opportunities - Cargo • Trade increase Scandinavia- Mediterranean (incl. Rail Baltica) • Belt and Road (e-trade, distribution center) • LNG and container goods market growth • Increased cooperation and further digitalization of the logistics chain • Available existing capacity for growth 22
Slide 23: Growth opportunities - Shipping
Growth opportunities - Shipping Ferry service: • 3rd ferry on Saaremaa line • Efficiency of operations • New routes Icebreaking/offshore: • MPSV Botnica summer charter (increasing demand) 23
Slide 24: Growth opportunities - Real estate
Growth opportunities - Prime Real Estate in the City Centre Real estate Old City Harbour development plan Masterplan 2030+ Plot 2 • MOU with Tallinn City, Old City Harbour detail plans in process Plot 1 • Total build-up area of 460,000 gross m2 above ground (including 160,000m2 extension Plot 3 poss
Slide 25: Old City Harbour Masterplan 2030+
Old City Harbour „Masterplan 2030+“ Future vision by Zaha Hadid Architects 25
Slide 26: IPO 2018 success story
IPO 2018 success story 12 500 shareholders • First large scale IPO in the Baltics in 18 years • Professional international team • IPO volume €147m • Oversubscribed more than 3X • IPO 2018 won several regional awards as the IPO of the year 26
Slide 27: Trading of the share
Trading Share price (EUR) of the share 2,20 1000 950 2,10 900 Listed on Nasdaq Baltic Main list 2,00 850 1,90 800 • In TOP3 most traded shares in the Baltics TSM1T (L) OMXBBGI (R) • Stable shareholder structure • Market capitalisation EUR 518 mln EST PF&IF 6% (6%) BALTIC funds (LV, LT) 2% (2%) • Fre
Slide 28: Experienced Management and a Supportive Governance Framework
Experienced Management and a Supportive Governance Framework Management Board Main objectives of the state as majority shareholder: Valdo Kalm Marko Raid Margus Vihman CEO CFO CCO To function as the maritime vehicle and the driver of strategic Joined: 2016 Joined: 1997 Joined: 2016 Strategic initiat
Slide 29: Substantial Cash Flow Generation
Substantial Cash Flow Generation …with Major Investments Strong Margins… Completed in Recent Years… Adjusted EBITDA(1) & Margin Capex €65m €74m €66 m €67 m €43m €63 m €36m 67% €14m 64% 55% 57% 2015 2016 2017 2018 Ferries Other investments 2015 2016 2017 2018 ✓ 4 newbuild ferries, 1 used ✓ Upgrade of
Slide 30: Dividend stock
Dividend stock Equity story Dividends paid (mEUR) 120 105 • Expectations of the State as the 100 majority shareholder for continuous stable dividends 80 DIVIDEND POLICY 60 48 • Min EUR 30M annually in 2019 and 2020 40 31 35 35 • starting 2021 at least 70% of net profit 20 • Dividend paid in 2019 EUR
Slide 31: Recent developments & financial results
Recent developments & financial results
Slide 32: Latest highlights
Latest highlights In 2019 • Vopak E.O.S. acquired by Liwathon • PAX vessels maintenance in Q1 decline in PAX, vessel calls and revenues • Additional ferry trips on Saaremaa line in summer • MPSV Botnica charter for summer in Baffin island • Dividend payment on 04.06.2019 (EUR 0.134 per share) • New
Slide 33: Volumes
Volumes Number of Passengers Cargo Volume by routes by cargo type 12000FY 2017-2018 25,0 FY 2017-2018 10 560 +0,6% 10 619 +7,4% 100 90 19,2 20,6 10000 566 638 Other 20,0 0,6 1013 83 1009 85 0,6 1,9 Thousand PAX 1,9 General cargo 8000 Cruise 3,9 Million tons 15,0 4,1 (traditional) Containers 6000 5,3
Slide 34: Volumes 9M
Volumes 9M Cargo Volume Number of Passengers by cargo type by routes 18,0 -8.3% 9000 -0.1% 15.6 8305 8297 16,0 14.3 8000 43 57 0,5 63 624 641 1,4 59 14,0 0,5 7000 793 27 715 78 1,4 12,0 2,8 6000 Thousand PAX Million tons 3,2 10,0 5000 4,0 8,0 4000 4,0 6,0 6756 6747 3000 4,0 6,9 2000 2,0 5,2 1000 0,0
Slide 35: Results of the Group
Results of the Group In thousands 2017 2018 +/- 6M 2018 6M 2019 +/- Revenue 121 295 130 635 7.7% 62 166 61 350 -1.3% Adjusted EBITDA 66 521 74 380 11.8% 35 695 35 706 0.0% Adjusted EBITDA margin 54.8% 56.9% 2.1 57.4% 58.2% 0.8 Operating profit 40 317 52 075 29.2% 24 950 24 731 -0.9% Income tax -11 9
Slide 36: Cash Flow and Financial Position
Cash Flow and Financial Position Financial position Cash Flow statement 700 In thousands 2018 6M 2019 600 500 Cash from operating activities 57 113 31 484 368 351 400 Cash used in investing activities -12 325 -10 159 573 572 300 Free cash flow (FCF) 44 788 21 325 42 48 200 Cash from/used in financin
Slide 37: Revenue generation by segments
Revenue generation by segments 140 8,9 120 4,6 30,1 100 27,1 80 mEUR 41,7 4,8 Other 39,8 1,5 60 8,4 13 Ferry 4,3 14,8 Cargo harbours 23,3 24,1 40 Passenger harbours 19,9 2,2 6,7 49,9 49,9 20 11,9 33,3 32,4 22,3 14,9 0 2017 2018 2019 - 6m 2017 2018 2019 - 6m Revenue EBITDA 37
Slide 38: Results of the Group
Results of the Group Unit 2018 2017 % Unit 2018 2017 % Revenue EUR ‘000 130 635 121 295 7.7% Total assets at period -end EUR ‘000 623 639 597 137 4.4% Operating profit EUR ‘000 52 075 40 317 29.2% Net debt at period -end EUR ‘000 171 049 228 646 -25.2% Adjusted EBITDA EUR ‘000 74 380 66 521 11.8% Eq
Slide 39: Group companies
Group companies AS Tallinna Sadam - Port services for passengers and cargo OÜ TS Laevad OÜ TS Shipping AS Green Marine 100% 100% 51% Ferry service to Saaremaa Icebreaker Botnica charter Waste management and Hiiumaa 39
Slide 40: Thank You!
Thank You! www.ts.ee • investor.ts.ee • portoftallinn
Tallinna Sadam (Port of Tallinn) — Investor Presentation (December 2019) on 6ix