Cosco Shipping Ports Limited · HKEX:1199
Cosco Shipping Ports — FY2020 Earnings Presentation
44 slides from Cosco Shipping Ports's earnings presentation, Mar 30, 2021
Slide 1: FY2020 Results Presentation
FY2020 Results Presentation Capturing Strategic Development Opportunities Continuing to Enhance Lean Operations March 30, 2021
Slide 2: Agenda
Agenda 1 Recovery & Stable Dividend Policy 2 Financial Highlights 3 Operational Review 4 Strategy & Outlook 5 Appendix
Slide 3: Agenda
Agenda 1 Recovery & Stable Dividend Policy 2 Financial Highlights 3 Operational Review 4 Strategy & Outlook 5 Appendix
Slide 4: Outstanding Performance in 4Q with Strong YoY Growth
Outstanding Performance in 4Q with Strong YoY Growth ➢ The overall equity throughput 4Q20 was up 4.1% YoY to 10.1million TEU, maintaining the recovery momentum. Equity throughput in 2020 was about flat at 38.4 million TEU, despite difficult operating environment induced by COVID-19 in 1H2020 ➢ Termi
Slide 5: Strong Cash Flow to Maintain Dividend Policy
Strong Cash Flow to Maintain Dividend Policy Increasing cash flow ➢ Cash and cash equivalents reached USD 1,310M at the end of FY2020, an increase of 41.3% YoY mainly due to the strong operating cash inflow of USD 326.2m and cash of USD 251.2m received from disposal of Yangzhou Terminal and Zhangjia
Slide 6: Sustainable High Dividend Yield and Long-term Investment Value
Sustainable High Dividend Yield and Long-term Investment Value ➢ Amid economic uncertainty, Dividend Yield (1) some companies have cut 1199 Peers Average or even cancelled their dividend; however, we have 5.2% confidence of maintaining 4.8% our dividend policy 4.3% 5.0% 4.2% 5.2% ➢ We have confidenc
Slide 7: Agenda
Agenda 1 Recovery & Stable Dividend Policy 2 Financial Highlights 3 Operational Review 4 Strategy & Outlook 5 Appendix
Slide 8: Financial Highlights – Profit Growth Momentum in 4Q2020
Financial Highlights – Profit Growth Momentum in 4Q2020 Reported Adjusted (1) (US$ million, unless stated otherwise) 4Q2019 4Q2020 YoY Change 4Q2019 4Q2020 YoY Change Revenue 255.1 277.9 +9.0% 243.0 277.9 +14.4% Cost of sales 202.3 214.9 +6.2% 194.6 214.9 +10.5% Gross profit 52.8 63.0 +19.4% 48.4 63
Slide 9: Financial Highlights – Satisfactory Full Year Result Despite Difficult Environment in 1H2020
Financial Highlights – Satisfactory Full Year Result Despite Difficult Environment in 1H2020 Reported Adjusted (1) (US$ million, unless stated otherwise) 2019 2020 YoY Change 2019 2020 YoY Change Revenue 1,027.7 1,000.6 -2.6% 978.2 1,000.6 +2.3% Cost of sales 754.9 768.0 +1.7% 724.2 768.0 +6.0% Gros
Slide 10: Revenue & Costs – Solid Revenue Growth & Improving Cost Control in 4Q2020
Revenue & Costs (1) – Solid Revenue Growth & Improving Cost Control in Greater China Region in 4Q2020 Revenue (US$ million) Costs (US$ million) 277.9 2.0% 214.9 243.0 3.0% 194.6 4.0% 2.3% 3.5% CSP Abu Dhabi 6.1% 3.3% 1.6% 2.6% 26.8% 2.1% 4.1% Nantong 26.4% 4.0% 34.4% CSP Zeebrugge 28.6% 17.7% 17.6%
Slide 11: Terminals Profit – Strong Terminal Profit Growth in 4Q2020
Terminals Profit (1) – Strong Terminal Profit Growth in 4Q2020 • Benefiting from throughput improvement in 4Q2020 as well as cost reduction and revenue growth, overall terminals profit in 4Q2020 surged by 37.6% YoY Terminals Profit by Regions (US$ million) Top 10 Terminal Contributors 80.1 4Q2019 4Q
Slide 12: Financial Position – Continuous Strengthening Balance Sheet
Financial Position – Continuous Strengthening Balance Sheet As at the end of 2020, our balance sheet and cash position have continuously improved： • Cash and cash equivalents of USD$1,310M, up 41% YoY • Net gearing ratio of 26.8%, 7.2 percentage points lower than that at the end of FY2019 • Average
Slide 13: Capital Expenditure
Capital Expenditure Asset Investments CAPEX: CAPEX: CAPEX: Total – US$345m Total – US$634m Total – US$494m Investments – US$128m Investments – US$131m Investments – US$147m PP&E – US$214m PP&E – US$487m PP&E – US$366m Examples: Examples: Example: • QPI (Added equity interest) • Euromax • COSCO-PSA (
Slide 14: Agenda
Agenda 1 Recovery & Stable Dividend Policy 2 Financial Highlights 3 Operational Review 4 Strategy & Outlook 5 Appendix
Slide 15: Operational Results – Improving Throughput in 4Q2020
Operational Results (1) – Improving Throughput in 4Q2020 Total Throughput Equity Throughput YoY Change 4Q2019 4Q2020 YoY Change 4Q2019 4Q2020 ('000 TEU) ('000 TEU) - Subsidiaries 5,795 5,858 +1.1% - Subsidiaries 3,792 3,676 -3.1% - Non-subsidiaries 24,800 26,874 +8.4% - Non-subsidiaries 5,911 6,430
Slide 16: Global Footprint and Opportunities
Global Footprint and Opportunities Key Overseas Annual Designed Terminals Capacity (TEU) PCT (1) 6,200,000 CSP Spain Group (1) 5,100,000 CSP Abu Dhabi (1) 2,500,000 CSP Zeebrugge (1) 1,300,000 Chancay (1) 1,000,000 RSGT 5,200,000 Suez Canal 5,000,000 COSCO-PSA 4,850,000 Antwerp 3,700,000 • Strategic
Slide 17: Increasing Overseas Exposure
Increasing Overseas Exposure Equity Throughput by geographic location (%) Overseas Equity Throughput (TEU) 12.7 M 12.5 M 10.7 M 71.2% 68.1% 67.4% 79.3% 77.3% 7.4 M 6.1 M 28.8% 31.9% 32.6% 20.7% 22.7% 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Overseas Greater China Overseas 17
Slide 18: Enhance Synergy in Subsidiaries – Secured Demand with Shipping Alliances
Enhance Synergy in Subsidiaries– Secured Demand with Shipping Alliances (1) Throughput from COSCO SHIPPING Lines, OOCL, Evergreen + Growth in Throughput (2) CMA, 2M+THE Alliance and others as % of total throughput (2) (4Q2020 YoY Change) COSCO SHIPPING Lines OOCL Evergreen + CMA OCEAN Alliance 2M +
Slide 19: Promoting Value-Added Supply Chain Extension Projects
Promoting Value-Added Supply Chain Extension Projects CSP Abu Dhabi CFS CSP Zeebrugge CFS ACCELERATE THE EXTENSION OF SUPPLY CHAIN INCREASE NEW EARNINGS GROWTH DRIVER ➢ Develop the supply chain business and accelerate the construction of the extended supply chain platform ➢ Build up logistics networ
Slide 20: Technology Development to Facilitate Lean Operations
Technology Development to Facilitate Lean Operations 2021 2020 Coming 3-4 years CSP Valencia Terminal and Application of Navis Nantong Terminal will N4 system to our implement Navis N4 system subsidiaries in the in 2021 coming 3-4 years ➢ Actively advocated 5G smart ports ➢ Demonstration port for 5G
Slide 21: Agenda
Agenda 1 Recovery & Stable Dividend Policy 2 Financial Highlights 3 Operational Review 4 Strategy & Outlook 5 Appendix
Slide 22: Global Layout and Lean Operations
Global Layout and Lean Operations Capitalize on ◼ Identifying potential projects and tapping into strategic subsidiaries and profitable non- global growth and subsidiaries amid global growth to enhance balanced global network optimize terminal portfolio ◼ Restructuring terminals through port resourc
Slide 23: Optimizing Terminal Assets Portfolio
Optimizing Terminal Assets Portfolio ACQUISITIONS DISPOSALS Beibu Gulf Terminal Yangzhou Yuanyang Terminal & is expected to share the benefits of economic growth in Zhangjiagang Terminal Southwest China and Southeast Asia disposal gain after tax of around USD$61M RSGT Jiangsu Petrochemical has a wid
Slide 24: Lean Operations – Cost Reduction
Lean Operations – Cost Reduction Cost Reduction ➢ Develop cost management system focusing on financial control and featuring “cost per TEU” to enhance terminal operations and management; incorporate “cost per TEU” in KPI to set Cost operating cost control targets for subsidiaries Reduction Lean ➢ Fa
Slide 25: Lean Operations – Revenue Growth and Headquarters’ Empowerment
Lean Operations – Revenue Growth and Headquarters’ Empowerment ➢ Develop customer analysis model to identify profit contribution from shipping companies and container types, allowing headquarters and terminals to engage customers and leverage on their competitive edges to enhance effective marketing
Slide 26: Lean Operations – Cost Control
Lean Operations – Cost Control Four measures to improve lean operations A series of cost control measures and cost control capabilities Innovatively set up ports operations management COE Actively promote and enhance automation in the Team terminal to improve efficiency and lower outsourcing cost Es
Slide 27: Lean Operations – Increase Revenue
Lean Operations – Increase Revenue Increase volume proportion from third-party customers (1) FY20 Actual proportion FY21 Target proportion ➢ Strengthen overall marketing activities, 70% 62.7% 64.1% 61.1% 63.6% formulate effective marketing and negotiation 54.4% 55.0% strategies to further tap custom
Slide 28: 5-Year Target Plan
5-Year Target Plan To achieve targets by the end of 2025 (1) Equity throughput 57 million TEU 5-year growth rate 48% (5-year CAGR of about 8.2%) Operational cost per TEU Decrease by 15~20% in 5 years (Annual average decline by 3~4% in 5 years) Notes: (1) Year 2021 - year 2025 28
Slide 29: Outlook
Outlook Challenges Opportunities ⚫ Negative impact to global economy due to COVID-19 ⚫ Long term opportunities for overseas terminals development ⚫ Sino-US trade tensions ⚫ Opportunities amid domestic terminals consolidation ⚫ Good prospect on the back of our effective Lean Operations strategy ➢ Glo
Slide 30: Q & A Session Thank you!
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Slide 31: Agenda
Agenda 1 Recovery & Stable Dividend Policy 2 Financial Highlights 3 Operational Review 4 Strategy & Outlook 5 Appendix
Slide 32: Terminal Profit Breakdown
Terminal Profit Breakdown 32
Slide 33: Terminal Profit Breakdown (Cont’d)
Terminal Profit Breakdown (Cont’d) Pearl River Delta 86,481 25.1% 90,877 29.4% 5.1% Yantian International Terminal 51,687 15.0% 48,070 15.5% -7.0% Nansha Stevedoring Terminal 5,037 1.5% 5,966 1.9% 18.4% *Guangzhou Oceangate Terminal 15,811 4.6% 19,065 6.2% 20.6% COSCO-HIT Terminal 8,335 2.4% 10,055
Slide 34: Revenue & Costs – Improving Full Year Performance Benefiting from 4Q2020
Revenue & Costs (1) – Improving Full Year Performance Benefiting from 4Q2020 Revenue (US$ million) Costs (US$ million) 1,000.6 978.2 768.0 2.5% 0.6% 724.2 4.93% 2.2% 3.0% CSP Abu Dhabi 1.63% 3.17% 2.0% 3.1% 2.53% 3.64% 28.5% 26.9% Nantong 3.37% 32.55% 31.73% CSP Zeebrugge 16.7% 17.2% CSP Spain 11.81
Slide 35: Terminals Profit – Improving FY Terminal Profit
Terminals Profit (1) – Improving FY Terminal Profit Due to Robust performance in 4Q2020 • Benefiting from cost reduction and revenue growth in 4Q2020, offsetting relatively weak performance in 1H2020, overall terminals profit showed signs of further improvement in 2020 Terminals Profit by Regions (U
Slide 36: Operational Results – Improving Full Year Throughput Benefiting from 2H2020
Operational Results (1) – Improving Full Year Throughput Benefiting from 2H2020 Total Throughput ('000 TEU) 2019 2020 Equity Throughput ('000 TEU) 2019 2020 - Subsidiaries 23,946 22,249 - Subsidiaries 15,443 14,219 - Non-subsidiaries 95,679 101,496 - Non-subsidiaries 23,130 24,195 Total throughput 1
Slide 37: Enhance Synergy in the Subsidiaries – Secured Demand with Shipping Alliances
Enhance Synergy in the Subsidiaries– Secured Demand with Shipping Alliances (1) Throughput from COSCO SHIPPING Lines, OOCL, Evergreen + Growth in Throughput (2) CMA, 2M+THE Alliance and others as % of total throughput (2) (FY2020 YoY Change) COSCO SHIPPING Lines OOCL Evergreen + CMA OCEAN Alliance 2
Slide 38: On Track to Achieve Our 5-Year Target
On Track to Achieve Our 5-Year Target 2016 2020 2021 Restructuring Where we were Vision ◆ As a pure port operator ◆ No. of subsidiaries increased Operations: to 14 (FY2016: 10) ◆ Global terminal network ◆ 3 core strategies ◆ Industry leader in terms of ◆ Linkage effects in costs, total container thr
Slide 39: Return On Equity (ROE) Improvement – Newly Acquired Terminals to Catch Up
Return On Equity (ROE) Improvement – Newly Acquired Terminals to Catch Up ROE 6.6 6.5 (3) (%) 6.3 4.8 (2) 3.5 (1) FY2016 FY2017 FY2018 FY2019 FY2020 Note: (1) Excluding one-off gain of FCHL transaction of US$59.0 m and three months of share profits of FCHL of US$7.1 m. (2) Excluding one-off gain of
Slide 40: Incentive Scheme – Aligning Shareholders’ Interests
Incentive Scheme – Aligning Shareholders’ Interests ◼ A total of about 53 million share options were granted to around 238 eligible employees under the share option scheme on 19 June 2018 ◼ Exercising criteria are in line with shareholders’ interests Batch No. of Percentage of Return on Growth Rate
Slide 41: Sustainability Framework
Sustainability Framework ◆ Providing a healthy and safe working environment ◆ Building an inclusive, diversified and sustainable workforce ◆ Transitioning to “Green Ports” ◆ Ensuring operational compliance ◆ Managing energy consumptions and ◆ Promoting inclusive development emission to respond to cl
Slide 42: Aligning Global Principles
Aligning Global Principles We support the Sustainable Development Goals (SDGs) of the United Nations and identify how these global sustainability challenges relate to our business and integrate them into our daily operations: Global Recognition and Advocacy: 42
Slide 43: Disclaimer
Disclaimer This presentation contains certain forward-looking statements with respect to the financial condition, results of operations and business of COSCO SHIPPING Ports Limited (“COSCO SHIPPING Ports”) and certain plans and prospects of the management of COSCO SHIPPING Ports. Such forward-lookin
Slide 44: Thank you!
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