Rumo Sa · BMFBOVESPA:RAIL3
Rumo Sa — Investor Presentation (November 2016)
25 slides from Rumo Sa's investor presentation, November 2016
Slide 1: Institutional Presentation
Institutional Presentation November 2016 Caixa para descrição.
Slide 2: Disclaimer
Disclaimer This presentation contains estimates and forward-looking statements regarding our strategy and opportunities for future growth. Such information is mainly based on our current expectations and estimates or projections of future events and trends, which affect or may affect our business an
Slide 3: Agenda
Agenda 1 Rumo Overview 2 Strong Business Case 3 Turnaround Strategy in Place 4 Financial and Operational Update 5 Closing Remarks 3/25
Slide 4: Timeline
Timeline 2008 2009 Rumo creation Rumo & ALL agreement 2010 Rumo private placement by TPG and Gávea 2014 Rumo & ALL merger proposal 2015 Rumo ALL merger conclusion 1999 2004 2008 ALL creation ALL IPO Rondonópolis project 2016 Rumo’s capital increase 2013 Conclusion of Rondonópolis project 2010 1996-1
Slide 5: Business Model Logics
Business Model Logics Nonreplicable Footprint Rumo is the largest independent Soybean Sugar cane railroad operator in Brazil Corn Covers the 3 main exporting corridors of agricultural commodities Santos Paranaguá São Francisco Rio Grande GDP Growth: 2010-2013 (Accumulated %) 21,9% 17,0% 10,2% 8,6% 9
Slide 6: Rumo at a glance
Rumo at a glance Huge Asset Base RAILWAY NETWORK ROLLING MATERIAL TERMINALS¹ 12,000 km of Railway Lines Locomotives and Railcars Inland and Port Terminals Port Terminals Static Capacity: 1.3 mln tons 1,000 Elevation Capacity: 29 mln tons locomotives Terminal 16 (SP) TGG (SP) Terminal 19 (SP) Termina
Slide 7: Shareholders Structure
Shareholders Structure 72.23% Members of Shareholders Agreement Others Free Float Arduini Family 28.37% 3.65% 8.02% 3.82% 56.14% North South Containers Operation Operation Operation Source: Rumo 11/03/2016 Note: Rumo’s business units not representing individual companies 7/25
Slide 8: Agenda
Agenda 1 Rumo Overview 2 Strong Business Case 3 Turnaround Strategy in Place 4 Financial and Operational Update 5 Closing Remarks 8/25
Slide 9: Strong Business Case
Strong Business Case Nonreplicable Business Model Huge entry barriers Low demand risk from agribusiness Most competitive logistics option for the region Large cost reduction opportunities with capacity increase Successful conclusion of capital increase and debt rescheduling transactions 9/25
Slide 10: Huge Entry Barriers
Huge Entry Barriers Asset Base 4 concessions to explore with exclusivity the rail transportation in the region 70% 90% Concession Volumes Net Revenues Network Extension Maturity (RTK mm) (R$ mm) Of the exported Of the sugar is North 754 km 2079 26.175 2.476 grains uses exported through the South and
Slide 11: Low demand risk from agribusiness
Low demand risk from agribusiness Unserved demand and a growing market assure large growth potential Key Markets Brazil Grain Production Mato Grosso Grain Production Paraná and Mato Grosso do Sul Grain Production ‘000 tons ‘000 tons ‘000 tons +107% +129% +112% 181 48 50 125 37 Santos 27 87 Paranaguá
Slide 12: Low demand risk from agribusiness (cont'd)
Low demand risk from agribusiness (cont’d) 80% of Rumo’s demand is grounded on the Brazilian agricultural exports, which keep on growing regardless of macro conditions Grains Sugar Fertilizer (Soybean and Corn) (Sugar) (Brazilian imports) (in million tons) (in million tons) (in million tons) 9.1% 8.
Slide 13: Mato Grosso market highlight
Mato Grosso market highlight Currently our most important volume is located in central Mato Grosso region of Mato Grosso ... Miritituba (PA) Grain Transported Volume 2015 MT EXPORTED RUMO RUMO REGION VOLUME VOLUME % TOTAL MKT SHARE (1) NORTE 3.151 - 0% 0% Sinop (2) CENTRAL 15,694 8,906 60% 57% Sorri
Slide 14: Large Cost Reduction Opportunities With Capacity Increase
Large Cost Reduction Opportunities With Capacity Increase Most competitive logistics option for the region… PRE MERGER TRAIN CURRENT TRAIN STATE OF THE ART TRAIN Example: Rondonópolis to Santos Port 73 railcars 80 railcars 120 railcars ~2.0x Volume per train 5,375 6,400 10,800 trip (tons) # Trips pe
Slide 15: Successful conclusion of capital increase and debt rescheduling transactions
Successful conclusion of capital increase and debt rescheduling transactions Funding will be used to enhance Rumo’s balance sheet and support its long term investment plan Capital Increase Debt Refinancing BNDES Credit Reinforce company’s capital structure Reschedule debt maturity of next 3-years Ac
Slide 16: Solid Regulatory Framework
Solid Regulatory Framework Railroad Port 4 railroad concessions 2 terminals concessions at Santos Port North Network (ending 2079) Terminal 16 (ending 2036) Paulista Network (ending 2028) Terminal 19 (ending 2036) South Network (ending 2027) West Network (ending 2026) Rumo also operates
Slide 17: Agenda
Agenda 1 Rumo Overview 2 Strong Business Case 3 Turnaround Strategy in Place 4 Financial and Operational Update 5 Closing Remarks 17/25
Slide 18: New commercial approach and solid client portfolio
New commercial approach and solid client portfolio The new commercial approach, combined with a strong portfolio of clients, ensure revenues and predictable cash flows New Commercial Approach Strong and Diversified Client Base Narrowing the relationship with the current base of clients Grains Suga
Slide 19: First turnaround-year achievements
First turnaround-year achievements Less than a year after the merger the turnaround is already yielding results Operational Figures Financial Figures Transported Volume (RTK¹ mln) Net Revenues (R$ mm) 14% 5% 4,802 44,910 4,217 42,958 2014 2015 2014 2015 Loading Volume at Santos Port (tons mm) EBITDA
Slide 20: Agenda
Agenda 1 Rumo Overview 2 Strong Business Case 3 Turnaround Strategy in Place 4 Financial and Operational Update 5 Closing Remarks 20/25
Slide 21: Consolidated Results | Operations 9M16
Consolidated Results | Operations 9M16 Transported Volume (mm RTK) Transported Volume Breakdown 40.0 00 +0.1% 33,778 Sugar 35.0 00 32,811 8.9% 30.0 00 6,804 5,748 Other 25.0 00 3.0% 20.0 00 Industrial 5.7% 15.0 00 27,062 Grains 25,974 Container 9M15 10.0 00 67.4% 5.00 0 5.0% - Fuels 9M15 9M16 10.1%
Slide 22: Financial Update 9M16
Financial Update 9M16 Net Revenue (R$ mm) Gross Profit (R$ mm) and Gross Margin (%) +13% 32,6% 35,0% 1400 32,1% 30,0% 4.000 1200 +11% 1.282 25,0% 3.548 1000 1.158 800 20,0% 600 15,0% 400 10,0% 200 5,0% 0 0,0% 9M15 9M16 9M15 9M16 EBITDA (R$ mm) and EBITDA Margin (%) EBITDA – Recurring CAPEX (R$ mm) 5
Slide 23: Total Indebtness
Total Indebtness TOTAL INDEBTNESS (AMOUNTS IN R$ MM) 3Q16 Debt by Creditor Commercial Banks 181.0 NCE 729.4 BNDES 3,734.8 Debentures 3,407.3 Total Bank Debt 8,052.5 Certificate of Real Estate Receivables 220.6 Leases 1,534.1 Total Gross Broad Debt 9,807.2 Cash and Cash Equivalents and Securities¹ -1
Slide 24: Agenda
Agenda 1 Rumo Overview 2 Strong Business Case 3 Turnaround Strategy in Place 4 Financial and Operational Update 5 Closing Remarks 24/25
Slide 25: Investment Highlights
Investment Highlights Rumo has all the elements to support its business model and leverage its market position Presence in the most important grain producing regions in Brazil Client base focused in exports: natural hedge against domestic Low demand risk from volatility agribusiness Favorabl