Adani Ports & Special Economic Zone Ltd · NSE:ADANIPORTS

Adani Ports & Special Economic Zone — Investor Presentation (December 2020)

60 slides from Adani Ports & Special Economic Zone's investor presentation, Dec 4, 2020

  1. Slide 1: Cover letter to stock exchanges: Presentation - Analysts / Investor Meeting

    Ref No: APSEZL/SECT/2020-21/140 December 4, 2020 BSE Limited National Stock Exchange of India Limited Floor 25, P J Towers, Exchange Plaza, Dalal Street, Bandra Kurla Complex, Mumbai – 400 001 Bandra (E), Mumbai – 400 051 Scrip Code: 532921 Scrip Code: ADANIPORTS Sub: Presentation - Analysts / Inves

  2. Slide 2: Spotlight on Krishnapatnam Port

    Spotlight on Krishnapatnam Port Adani Ports and SEZ Ltd., December 2020.

  3. Slide 3: Contents

    Contents A Group profile B Company profile C Krishnapatnam port (KPCL) the transformative asset D KPCL assets – Marine, Terminal and Evacuation Infrastructure E KPCL operational efficiency post agreement F KPCL future outlook G ESG, CSR H Annexure 2

  4. Slide 4: Adani Group: A world class infrastructure & utility portfolio

    Adani Group: A world class infrastructure & utility portfolio Energy & Utility Adani Transport & Logistics 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 Ra

  5. Slide 5: Adani Group: Decades long track record of industry best growth rates across sectors

    Adani Group: Decades long track record of industry best growth rates across sectors Port Cargo Throughput (MT) Renewable Capacity (GW) Transmission Network (ckm) CGD7 (GAs8 covered) 161% 45% 12% 21% 2.5x 6x 3x 30% 1.5x 5% 7% 25% Industry Adani APSEZ Industry AGEL Adani Industry ATL Industry AGL 2014

  6. Slide 6: Adani Group: Repeatable, robust & proven transformative model of investment

    Adani Group: Repeatable, robust & proven transformative model of investment Phase Development Operations Post Operations Origination Site Development Construction Operation Capital Mgmt Activity • Site acquisition • Engineering & design • Redesigning the • Analysis & market • Life cycle O&M capital

  7. Slide 7: Company Profile

    adani Ports and Logistics Company Profile

  8. Slide 8: APSEZ: A transport utility with string of ports and integrated logistics network

    APSEZ: A transport utility with string of ports and integrated logistics network String of Ports • Twelve Ports ~490 MMT of augmented capacity. • Setting benchmark in turnaround time across 66% 54% 67% industry. 92% FY15 8% Capacity 490 MMT FY20 33% • Single window service & excellence in operations

  9. Slide 9: APSEZ: Largest private transport utility

    APSEZ : Largest private transport utility APSEZ – Dhamra Port Ports Ports One Oneto totwelve ten in in Import - Export - Steel twenty twentyyears years Coking coal (HRC/CRC) 2x Port income String of Ports Ports of Prosperity Port gate to 2x Warehousing Warehousing SEZ customer gate Warehousing SEZ i

  10. Slide 10: Largest network of ports in India

    APSEZ : Largest network of ports in India West Coast East Coast Capacity 327 MMT Capacity 163 MMT FY06 FY21 Dahej 14 MMT Tuna Moga Kotkapura Patli Kanech Kilaraipur Dhamora 1 Port 12 * 14 Kannauj MMT Kishangarh Samastipur and Darbhanga 10 MMT Capacity 490 MMT Mundra Vidisha Katihar Harda 264 MMT Hos

  11. Slide 11: APSEZ: Financial discipline and prudent policy creates value

    APSEZ: Financial discipline and prudent policy creates value Capital Management 250 5 221 204 207 4.5 • Investment Grade rated since FY16 200 186 179 4 4.4 3.5 • Improve leverage ratio (from 4.4x to 2.9x) 150 3 Net Debt (INR Bn) 3.4 Net Debt/EBITDA 2.5 • Incremental earnings deployed for growth (EBI

  12. Slide 12: Krishnapatnam port (KPCL) the transformative asset

    Krishnapatnam port (KPCL) the transformative asset

  13. Slide 13: APSEZ: Krishnapatnam port – Location of the asset

    APSEZ : Krishnapatnam port – Location of the asset • Located on east coast of India in Nellore Visakhapatnam Port district of Andhra Pradesh. (~180 km Gangavaram Port north of the Chennai Port) Telangana Kakinada Port • Largest private port on the east coast & the 2nd largest private port in the cou

  14. Slide 14: APSEZ: Krishnapatnam port the value accretive acquisition

    APSEZ : Krishnapatnam port the value accretive acquisition Continuing APSEZ – 75% Promoter - 25% APSEZ trades @ EV / EBITDA KPCL multiple of ~17x Enterprise Value of INR 12,000 cr. and expected EBITDA for FY 21 to be KPCL acquisition around INR 1,200 cr. resulting in acquisition EV/ EBITDA multiple

  15. Slide 15: Infrastructure

    APSEZ : Krishnapatnam port - Infrastructure • Master plan has an approved capacity of 300 MMT pa. • Current capacity of 64 MMT pa. • Waterfront of 20 km. under the concession with deep draught of 18.5 meters • Port land of 3,064 acre developed out of 6,800 acre of available land • Adequate waterfron

  16. Slide 16: KPCL - Salient features of concession

    APSEZ : KPCL - Salient features of concession Concession is for 30 years from COD with automatic extension of 2 blocks of 10 years each Concession started from March 2009 / March 2059 Year % of Gross Revenue March 2009 to February 2039 2.6% March 2040 to February 2049 5.2% March 2050 to February 205

  17. Slide 17: Krishnapatnam port – Hinterland reach

    APSEZ : Krishnapatnam port – Hinterland reach • Central & Southern Andhra Pradesh, Telangana and Eastern Karnataka • Port caters to thermal power, cement plants & edible oil refinery cluster • Attracts export commodities like Agri, cement, minerals, fish products (reefer), etc. through container car

  18. Slide 18: Krishnapatnam port - Inter and intra connectivity

    APSEZ : Krishnapatnam port - Inter and intra connectivity • Internal road network of 55 Kms • Connected by 25 kms long dedicated four-lane road with four lane NH-5 Chennai Kolkata corridor • Upgradation of the 4 lane to 6 lane road is in progress with ROW of 60 m 17

  19. Slide 19: Krishnapatnam port - Inter and intra connectivity (rail)

    APSEZ : Krishnapatnam port - Inter and intra connectivity • Krishnapatnam Rail Co. Ltd. (KRCL) – SPV formed for rail connectivity to Port • Works Executed by SPV: • Double Rail Line from Venkatachalam to Port. (15 Km) with ROW of 30 m • Single Rail Line from Venkatachalam to Obulavaripalle (91 Km) •

  20. Slide 20: KPCL assets – Marine, Terminal and Evacuation Infrastructure

    KPCL assets – Marine, Terminal and Evacuation Infrastructure

  21. Slide 21: Krishnapatnam port - Infrastructure

    APSEZ : Krishnapatnam port - Infrastructure 20

  22. Slide 22: Krishnapatnam port – Details of Terminal Infrastructure

    APSEZ : Krishnapatnam port – Details of Terminal Infrastructure Quay Length Capacity Terminal No Cargo type (m) (MT) • Container Terminal -1 1200 21 • General Dry Cargo Terminal -2 600 14 • General Dry Cargo Terminal -3 600 16 • Coal (Mechanized) • General Dry Cargo Terminal -4 600 8 • Vegetable Oil

  23. Slide 23: Marine infrastructure - Terminal 1

    APSEZ : Krishnapatnam port - Marine infrastructure - Terminal -1 Terminal-1 Capacity : 21 MMT Quay length : 1200 Mt. Cargo Type : Containers & General Cargo 22

  24. Slide 24: Marine infrastructure - Terminal 2

    APSEZ : Krishnapatnam port - Marine infrastructure - Terminal -2 Terminal-2 Capacity : 14MMT Quay length : 600 Mt. Cargo Type : General Cargo 23

  25. Slide 25: Marine infrastructure - Terminal 3

    APSEZ : Krishnapatnam port - Marine infrastructure - Terminal -3 Terminal-3 Capacity : 16 MMT Quay length : 600 Mt. Cargo Type : Coal (Mechanized) 24

  26. Slide 26: Marine infrastructure - Terminal 4

    APSEZ : Krishnapatnam port - Marine infrastructure - Terminal-4 Terminal-4 Capacity : 8 MMT Quay length : 600 Mt. Cargo Type : General Cargo & Veg Oil 25

  27. Slide 27: Marine infrastructure - Terminal 5

    APSEZ : Krishnapatnam port - Marine infrastructure - Terminal -5 Terminal-5 Capacity : 5 MMT Quay length : 300 Mt. Cargo Type : General Cargo 26

  28. Slide 28: Krishnapatnam port – Infrastructure

    APSEZ : Krishnapatnam port – Infrastructure Land owned Waterfront Water Depth Capacity Berths Quay Length Vessels per Ports (Kms) (Mts) (MMT) (Nos) (Mts) (Acre) annum (Nos) Krishnapatnam 3,064 20 18.5 64 12 3,300 1,400 Mundra 40,000 40 18.5 264 29 8,038 3,068 Dhamra 3,757 16 18.5 45 5 1,666 850 • We

  29. Slide 29: Krishnapatnam port – Infrastructure (equipment and storage)

    APSEZ : Krishnapatnam port – Infrastructure Ports Cranes Mobile Locos Ground Storage Storage (No) Equipments* (No) (No) Slot (No) Open (acre) Covered (Sq. mt) Krishnapatnam 22 312 6 5,000 608 2,06,000 Mundra 62 197 7 34,092 495 3,19,000 Dhamra 10 26 1 NA 95 33,750 Port has adequate modern implements

  30. Slide 30: KPCL operational efficiency post agreement

    KPCL operational efficiency post agreement

  31. Slide 31: Permanent EBITDA improvement post agreement

    APSEZ : Krishnapatnam Port – Post signing of agreement focused on improving EBITDA by business process re-engineering EBITDA margin expanded from 54% in Jan ‘20 to 70% in Oct ’20, • Operational process. Resulted in • Contracting process. permanent EBITDA a. Vendor process – Cash outflow improvement

  32. Slide 32: Improving EBITDA by Operation Process

    APSEZ : Krishnapatnam Port – Focusing on improving EBITDA by Operation Process  Pilot allocation optimized. 30% savings in fuel  Shore power for Tugs introduced. consumption  Tug movement in economy speed. Savings of Rs. 2 Cr p.a.  Increased eRTG utilization from 37% in Dec-19 to 86% in Nov-20.

  33. Slide 33: Total savings of Rs.80 cr. p.a. from existing assets

    APSEZ : Krishnapatnam Port – Focusing on improving EBITDA by Operation Process  Decrease in repair & maintenance & fuel expenses Savings of Rs. 20 Cr p.a. due to equipment rationalization  HPSV lamps to LED conversion - 912 nos of HPSV lamps converted to LED post Dec-19 Savings of Rs. 1 Cr p.a. 

  34. Slide 34: Improving EBITDA by Contracting - Vendor Process

    APSEZ : Krishnapatnam Port –Focusing on improving EBITDA by Contracting - Vendor Process Survey – 66% reduction Savings of Rs. 2.4 Cr p.a.  Activity based costing (Benchmarked with Custom clearance - 76% reduction other Adani Ports) Savings of Rs. 4.5 Cr p.a. Fertilizer handling - 30% reduction Sav

  35. Slide 35: Contracting - Vendor Process: savings of Rs.68 cr. p.a.

    APSEZ : Krishnapatnam Port –Focusing on improving EBITDA by Contracting - Vendor Process  Wholesale pricing of fuel - Rs. 3.4 /Litre saving Savings of Rs. 1 Cr p.a. by converting to wholesale pricing  Spares & Consumables Sourcing  Annual Rate Contracts Savings of Rs. 11.5 Cr p.a. Explored altern

  36. Slide 36: Contracting - Customer Process: revenue increase of Rs. 80 cr. p.a.

    APSEZ : Krishnapatnam Port –Focusing on improving EBITDA by Contracting - Customer Process. Rate in Current Dec-19 Rate Commodity (Rs. (Rs. PMT) PMT) Coal – 405 455 Customer A Coal – 265 295 Customer B Coal – 263 305 Customer C Granite – 110 160 Customer A  Mapping of entire customer’s supply chain

  37. Slide 37: Rationalization of Overheads: savings of Rs. 98 cr. p.a.

    APSEZ : Krishnapatnam Port –Focusing on improving EBITDA by Rationalization of Overheads  Insurance premium Savings of Rs. 46 Cr p.a.  Rationalization of aircraft operation and travel Savings of Rs. 11 Cr p.a.  Rationalization of security expenses Savings of Rs. 6 Cr p.a.  Rationalization of ren

  38. Slide 38: Krishnapatnam port - Improvement in EBIDTA margin post agreement

    APSEZ : Krishnapatnam port - Improvement in EBIDTA margin post agreement 2.0% 78% 2.0% 3.0% 74% 3.5% 1.0% 70% 4.5% 4.0% 4.0% 54% EBIDTA Margin to expand further 78% by FY25– Build the Assets around the cargo type to be handled – Specialization Principle 37

  39. Slide 39: KPCL – future outlook

    KPCL – future outlook

  40. Slide 40: KPCL - Unlocking of potential – capacity break up and expansion

    APSEZ : KPCL - Unlocking of potential – capacity break up and expansion In MMT 2 6 12 18 Dry Bulk FY20 FY25 (64) Container (100) Liquid • The capacity will be ramped up by 50 76 adding new equipments to keep the pace with cargo volume growth; In MMT • About Rs. 750 crores will be spent for aforesaid

  41. Slide 41: KPCL - Creating long term value by growing and improving cargo diversity

    APSEZ : KPCL - Creating long term value by growing and improving cargo diversity Diversification of cargo basket 2 2 2 4 11 14 9 6 FY20 FY21 FY23 FY25 (48) (40) (70) (84) 37 32 66 57 aaaa 12 50 2 Dry Bulk Container Liquid Cargo in MMT Cargo diversification through : • Harnessing long term relationsh

  42. Slide 42: Krishnapatnam Port – Diversifying to handle POL products

    APSEZ : Krishnapatnam Port – Diversifying to handle POL products • Capacity: 6 MMT; Berth designed for 150,000 DWT tankers. • Expected COD: April 2022. • Long Term agreements entered with: BPCL Plot  BPCL – To handle High Speed Diesel Oil & Motor Spirit - 1 MMT annual MGT.  NGC – To handle Liquifi

  43. Slide 43: Creating near term value through effective capital management

    APSEZ : Creating near term value through effective capital management • Current debt refinanced and replaced by proceeds from APSEZ US$ Bond. Interest Saving • Saving of • Interest cost savings in constant rupee terms is ~6% p.a Rs.350 cr. p.a. • Interest cost saving on hedged basis 2% p.a. aggregat

  44. Slide 44: KPCL the transformative asset enabling east and west coast parity

    APSEZ : KPCL the transformative asset enabling east and west coast parity For APSEZ KPCL By FY25 • Diversification of cargo, coast and customer base ~1.8x Cargo • De-risks the portfolio of concentration and volatility 48 to 84 MMT • Hinterland reach increases to 90% • New routes for Adani Logistics

  45. Slide 45: ESG and CSR

    adani Ports and Logistics ESG and CSR

  46. Slide 46: Krishnapatnam port - Imbibing Adani Group ESG philosophy

    APSEZ : Krishnapatnam port - Imbibing Adani Group ESG philosophy  Adherence to global environment guidelines like – Disclosure in CDP – Climate Change and Water Security, SBTi; Supporter of TCFD, Member of IUCN .  Focus on Employee/ Contractor Worker’s Safety  Emphasis on Local procurement.  Ens

  47. Slide 47: Krishnapatnam port - ESG focus areas

    APSEZ : Krishnapatnam port - ESG focus areas • Efficient use of water and energy from cleaner sources: To reduce Water intensity by 55% & Energy Intensity by 50% and Waste Intensity by 30% by FY 25. • Reduction of emission levels – 60% Emission Intensity reduction and 25% Renewable Energy Share by F

  48. Slide 48: Krishnapatnam port - Imbibing Adani group CSR philosophy

    APSEZ : Krishnapatnam port - Imbibing Adani group CSR philosophy Adani Foundation: Core Areas of Service Adani Foundation Outreach: Education • 18 States • 2,315 Villages • 728,000 Families Health KPCL CSR Program: Sustainable Livelihood • 1 State (Andhra Pradesh) • 78 Villages • 17,950 Families Inf

  49. Slide 49: CSR Education Programs

    APSEZ : Krishnapatnam port - CSR Education Programs • Education, Books, Stationary, Uniform, Mid day Meals provided at free of cost. • International School facility provided at Krishnapatnam. • 779 Students belonging to Fishing and Other Backward Communities • Free Education for 1175 students in 32

  50. Slide 50: CSR Health Programs

    APSEZ : Krishnapatnam port - CSR Health Programs • Free Medical Treatment with medicines: 1. 705 patients treated monthly. 2. 4500 patients treated monthly. 3. 600 patients treated monthly including follow up cases. 4. 700 patients treated monthly including follow up cases. • Providing free health c

  51. Slide 51: CSR Sustainable Livelihood & Community Infrastructure

    APSEZ : Krishnapatnam Port - CSR Sustainable Livelihood & Community Infrastructure • Imparting Training to women in tailoring. Resulted in livelihood to 84 women belonging to Fishermen community. • Six installed for providing Drinking Water to 4000 families every day. • Garbage / Drains Clearance, S

  52. Slide 52: Annexures

    Annexures • Messaging on KPCL during interaction with stakeholders in Jan and Oct 2020

  53. Slide 53: Acquisition of KPCL a synergistic accretion to portfolio

    APSEZ: Acquisition of KPCL a synergistic accretion to portfolio  Second largest private port asset with residual concession life of 40 years  Enhances east coast west coast parity Transformational  Complements APSEZ’s existing network and consolidate customer base asset  East coast traffic to cr

  54. Slide 54: KPCL USPs

    APSEZ : KPCL USPs Port Infrastructure • All weather, deep draft port capable of handling all types of vessels including Capesize Vessels; Mechanized Handling • Mechanized coal handling system resulting in faster turnaround time of vessels; Extensive captive cargo • 5,490 MW of operational coal based

  55. Slide 55: Creating near term value through operational excellence at KPCL

    APSEZ : Creating near term value through operational excellence at KPCL Revenue upliftment • Benchmarking with other ports on tariff structure Bagging & dispatch • New contractor appointed at economical rates Tug hiring, • Rates renegotiated and benchmarked with other APSEZ O&M and ports on east coa

  56. Slide 56: Creating long term value by embedding APSEZ's operational excellence

    APSEZ : Creating long term value by embedding APSEZ’s operational excellence FY20 FY21 FY22 FY23 Focus areas for business improvement Steps in FY21 Steps in FY22 Steps in FY23 onwards Operational Efficiency Operational Efficiency Ongoing Value Addition • Debottlenecking • Mechanization • Marketing e

  57. Slide 57: KPCL's EBITDA to nearly double by FY23

    APSEZ : KPCL’s EBITDA to nearly double by FY23 FY20 FY21 FY23 Operational Business Evolution Execution Focus Cargo Growth Efficiency 627 436 Cargo Growth 2,243 Margin 1,180 Improvement FY20 MI* - 14% Cargo Increment FY23 Margin improvement locked in basis H1 FY21 performance 56 Messaging on KPCL dur

  58. Slide 58: Krishnapatnam Port – Key Customers

    APSEZ : Krishnapatnam Port – Key Customers Name Vol. in MMT Name Vol. in MMT Coal Edible Oil TPCIL/Sembcorp Energy 10.2 Emami Agrotech Ltd 0.4 JSW Group 4.1 South India Krishna Oil and Fats Pvt. Ltd 0.3 Karam Chand Thapar and Bros 2.6 Gemini Edibles Oil and Fats (I) Ltd 0.3 Swiss Singapore India Pvt

  59. Slide 59: KPCL land bank and expansion possibility

    APSEZ : KPCL land bank and expansion possibility Land Bank with Port Area in Acres Total Land in Possession 4,621 Additional land allotted by Govt. & to be acquired 2,169 Total Land for the Port 6,790 Capacity Expansion Possibilities MMPTA Existing Capacity 64 Debottlenecking plans and overhauling o

  60. Slide 60: Disclaimer

    Disclaimer 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 grow

Adani Ports and Special Economic Zone — Investor Presentation (December 2020) on 6ix