Tallinna Sadam As · OMXTSE:TSM1T
Tallinna Sadam As — Auerbach Grayson Emerging and Frontier Markets Conference New York 2020
36 slides from Tallinna Sadam As's conference presentation, Oct 26, 2020
Slide 1: Unique asset for investment
PORT OF & TALLINN Unique asset for investment
Slide 2: Index
Index 1. Business model (3-10) 2. Competitive position and strategy (11-29) 3. Volumes and financial results (30-35)
Slide 3: Resilient infrastructure business model
Resilient infrastructure business model DIVERSIFICATION PROFITABILITY CASH FLOW GENERATION 2019 Revenue 2019 Adjusted EBITDA Margin 2019 Cash Conversion Peers Average Peers Average 7% 24% 38% €131m 57% 58% 82% 46% 60% 63% 49% 11% 31% Passenger H Cargo H Ferry Other Ferry Airports Ports Airports Port
Slide 4: 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 4
Slide 5: A Well Balanced Business Profile
A Well Balanced Business Profile Business segments Passenger Harbours Cargo Harbours International ferry lines, cruise, ro-ro Liquid bulk, Ro-Ro, dry bulk, containers, general cargo, industrial parks, PAX with vehicles Old City Harbour (main) Saaremaa Harbour Muuga Harbour Paldiski South Harbour Oth
Slide 6: 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 7: Revenue Structure & Main Customers
Revenue Structure & Main Customers Revenue 2019 Cargo harbours Passenger harbours Regular lines Cruise Terminal operators Shipping lines 31% 38% 7% 24% (2) Adj. EBITDA 2019 Other Ferry Botnica 30% Clients 44% Republic of Estonia 19% Republic of Estonia 7% 7
Slide 8: Revenue model: Passenger harbours
Revenue model Passenger harbours 2019 Contribution Revenue 38% Rental Income 4% 4% • 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 9: Revenue model: Cargo harbours
Revenue model Cargo harbours 2019 Contribution Revenue 31% 3% Sales of Electricity • Calculated based on the readings of customers electricity meters 12% Adjusted EBITDA Rental Income 23% • Fixed lease income from operators using PoT’s land and facilities 30% Cargo Charges 14% • Pre-agreed tariff ba
Slide 10: Revenue model: Ferry business
Revenue model Ferry business 2019 Contribution Contract Means of Voyage Fee (per each voyage) Revenue Income Payments • Coverage of variable ope- 24% rating cost (mostly fuel) ~ 20% • Indexed quarterly to fuel price (90%) and annually to ~ 38% Ticket Sales Adjusted EBITDA CPI (10%) 19% ~ 30% Indexed
Slide 11: Competitive position and strategy
Competitive position and strategy
Slide 12: 4th biggest passenger port in Northern Europe
4th biggest passenger port in Northen Europe Finland PAX: consecutive growth for 12 years Oslo Helsinki Norway Sweden 10.64m Stockholm Tallinn St. Petersburg 11 60 Estonia Million PAX 10 0,7 Russia 1 50 Other • 2h voyages to Helsinki 10-15x per day Latvia 9 • Mini-cruises to Stockholm 8 Cruise (trad
Slide 13: Cargo - change of business model
Cargo - Cargo volume and revenue change of 45 60 business 40 50 model 35 30 40 volume mln tons Revenue mEUR • Revenue resilient despite 25 decrease in volumes 30 20 • Less dependency on Russian transit cargo 15 20 o 2007 – political conflict between 10 Estonia and Russia 10 o 2012 – Russian Ust-Luga
Slide 14: Cargo logistics chain developments
Cargo logistics chain developments Rail Baltica 2026 • A shift from East-West to North- http://www.railbaltica.org/ South cargo flows • New operators/owners and business models • Cooperation with Helsinki and other ports • EU TEN-T network connection • China Belt and Road connection • Digitalisation
Slide 15: Muuga Harbour
New: MPG AgroProduction Vopak E.O.S.→ (oil seed complex), Liwathon E.O.S. New: Bulk&Tank in progress (liquid bulk) (dry bulk, break bulk), in progress Oiltanking→ Olerex New: PK Terminal (liquid bulk) (dry bulk, break bulk) Transiidikeskus → HHLA TK (containers) Stivis→ Baltic Maritime Rail Baltica
Slide 16: Ferry business
Ferry business Growing volumes (mln) 3 35 mln EUR 2,5 30 • Subsidiary TS Laevad 2,3 2,4 25 2 2,2 2,0 2,1 2,1 20 1,5 • Operating 5 vessels on 2 routes 1,0 1,0 15 0,8 0,9 1,0 1 0,9 10 0,5 • Agreement with the State until 5 0,4 0,2 0 0 Sept 2026 PAX (TS) veichles (TS) PAX (other) veichles (other) Ferry
Slide 17: MPSV Botnica
MPSV Botnica charter 14 300 MPSV Botnica 12 250 Revenue mln EUR 10 200 Charter days 8 150 6 100 4 • Subsidiary TS Shipping 2 50 0 0 • Agreement with the State for 2013 2014 2015 2016 2017 2018 2019 Charter days Revenue icebreaking in winter until Apr 2022 • Summer charters (May-Nov): o 2018-2022: Ba
Slide 18: Green solutions
Green solutions • Dues discount for vessels based on ESI index • 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 labe
Slide 19: COVID-19 main impacts
COVID-19 main impacts • PASSENGER H: strong downturn from March 2020, no cruise calls. Temporary restrictions for passenger movement, ro-ro cargo keeps ROPAX vessels moving • CARGO H: volume growth in 9M, possible downturn in some cargos depending on overall economy; temporary lines in Paldiski • FE
Slide 20: Maritime and logistics sector
Maritime and logistics sector MEGATRENDS VISION Environmentally Unmanned vessels friendly vessels Fully automated terminals and Cost efficiency multimodality Digital data exchange Digitalisation and automation Sustainable port Environmental Client experience requirements 20
Slide 21: Growth opportunities: Passengers
Growth opportunities Passengers • Line traffic development – Muuga-Vuosaari line also for passengers • Passenger terminals renovation • 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) • Green energy and container goods market growth • Increased cooperation and further digitalization of the logistics chain • Available existing capacity for grow
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 - Prime Real Estate in Tallinn City Centre
Growth opportunities - Prime Real Estate in Tallinn City Centre Real estate Tallinn Old City Harbour development plan Masterplan 2030+ Plot 2 Old City Harbour • Detail planning process ongoing Plot 1 with 5 areas • Total build up area of 240 000 m2 Plot 3 gross area + extension possibility by Plot 5
Slide 25: Tallinn Old City Harbour Masterplan 2030+
Tallinn Old City Harbour „Masterplan 2030+“ Future vision by Zaha Hadid Architects 25
Slide 26: Trading of the share
Trading Share price (EUR) of the share 2,40 1500 2,20 1000 2,00 Listed on Nasdaq Baltic Main list 1,80 1,60 500 1,40 0 • In TOP3 most traded shares in the Baltics TSM1T (L) OMXBBGI (R) • Stable shareholder structure • Market capitalisation EUR 447 mln (20.10.2020) EST PF&IF 8% (6%) BALTIC funds (LV,
Slide 27: Experienced Management and a Supportive Governance Framework
Experienced Management and a Supportive Governance Framework Management Board Main objectives of the State as majority shareholder: To function as the maritime vehicle and the Strategic driver of strategic initiatives in the Estonian logistics sector To operate efficiently and profitably in order Fi
Slide 28: Substantial Cash Flow Generation
Substantial Cash Flow Generation …with Major Investments Strong Margins… Completed in Recent Years Adjusted EBITDA(1) & Margin Capex €65m €74m €74m €43m €63m €66m €67m €36m €29m 67% €14m 64% 55% 57% 57% 2015 2016 2017 2018 2019 Ferries Other investments 2015 2016 2017 2018 2019 ✓ 4 newbuild ferries,
Slide 29: Dividend stock
Dividend stock Dividends paid Equity story 120 450% 105 400% 100 • Expectations of the State as the 350% majority shareholder for continuous 80 300% stable dividends % of last year profit Dividend mEUR 250% 60 48 200% DIVIDEND POLICY 40 35 35 150% 31 30 • Min EUR 30M annually in 2019 and 2020 100% •
Slide 30: Volumes & financial results
PORT OF @ TALLINN Volumes & financial results
Slide 31: Volumes
Volumes Passengers Cargo 12000 25 10 619 10 639 638 660 20.6 19.9 10000 20 1009 933 8297 1,9 1,8 8000 641 15.5 Thousand PAX 3,9 15 4,5 14.3 Million tons 715 1,4 1,4 6000 3,1 5,4 5,4 3,2 10 8797 8798 3703 4,1 4000 6747 4,0 138 5 8,8 2000 3401 7,6 6,6 5,2 0 0 2018 2019 2019 9M 2020 9M 2018 2019 2019 9
Slide 32: Results of the Group (1/2)
Results of the Group (1/2) In thousand EUR 2018 2019 6M 2019 6M 2020 Revenue 130 635 130 536 61 350 50 289 Operating profit 52 075 51 679 24 731 15 113 Adjusted EBITDA 74 380 74 292 35 706 26 394 Depreciation, amortisation and -22 345 -23 037 -11 193 -11 912 impairment Income tax -26 199 -5 764 -5 7
Slide 33: Results of the Group (2/2)
Results of the Group (2/2) In thousand EUR 2018 2019 6M 2019 6M 2020 Operating profit/revenue 39.9% 39.6% 40.3% 30.1% Adjusted EBITDA/revenue 56.9% 56.9% 58.2% 52.5% Profit for the period/revenue 18.7% 34.0% 29.7% 18.2% EPS: Profit for the period/weighted average number 0.11 0.17 0.07 0.03 of shares
Slide 34: Cash Flow and Financial Position
Cash Flow and Financial Position Financial position Cash Flow statement 700 In thousands 2018 2019 6M 2019 6M 2020 600 Cash from operating 57 113 63 419 31 484 26 610 500 activities 356 377 Cash used in investing 400 -12 325 -28 244 -10 159 -13 257 activities 579 584 300 Free cash flow (FCF) 44 788
Slide 35: Revenue generation by segments
Revenue generation by segments 140 8,9 9,8 120 4,6 30,1 30,8 100 27,1 80 mEUR 41,7 4,8 5,3 Other 39,8 40,1 1,5 60 8,4 13,0 13,9 Ferry 4,3 14,8 Cargo harbours 4,6 23,3 24,1 22,2 40 14,4 Passenger harbours 20,0 2,2 6,7 1,8 49,9 49,9 49,8 18,7 20 11,9 6,7 33,3 32,4 32,8 22,3 12,0 12,5 14,9 0 5,9 2017 2
Slide 36: Thank You!
Thank You! PORT OF @ TALLINN www.ts.ee