Adani Ports & Special Economic Zone Ltd · NSE:ADANIPORTS
Adani Ports & Special Economic Zone — Debt Investor Presentation (July 2020)
33 slides from Adani Ports & Special Economic Zone's debt investor presentation, July 2020
Slide 1: Adani Ports and SEZ Limited
July, 2020 Adani Ports and SEZ Limited Strictly Private & Confidential
Slide 2: Disclaimer
This document is not an offer of securities for sale into the United States or any other jurisdiction. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933 (the “Securities Act”), and may not be offered or sold in the United States, except
Slide 3: Offering Summary
Issuer Adani Ports and Special Economic Zone Limited (“APSEZ” or the “Company”) Issue Senior Notes Distribution Format Rule 144A / Regulation S Issuer Rating Moody’s: Baa3 (Negative); S&P: BBB- (Stable); Fitch: BBB- (Negative) Issue Rating Moody’s: Baa3 ; S&P: BBB- ; Fitch: BBB- Issue Size
Slide 4: Group Overview, Company Overview, ESG Initiatives, Investment Thesis
1 GROUP OVERVIEW 2 COMPANY OVERVIEW 3 ESG INITIATIVES 4 INVESTMENT THESIS 5 ANNEXURES
Slide 5: About Adani Group
ABOUT ADANI GROUP
Slide 6: Adani Group portfolio of listed businesses
ADANI Philosophical shift from B2B to B2C businesses Transport & Logistics Utility & Power • AGL – Gas distribution network to serve key geographies across 63.5% 1 100% 100% 75% 75% 75% 37.4% India • AEML – Electricity distribution network APSEZ3 AAPT3 SRCPL3 ATL3 APL3 AGEL3 AGL3 that powers the fin
Slide 7: Adani infrastructure development lifecycle
Phase Development Operations Post Operations Origination Site Development Construction Operation Capital Mgmt • Analysis & • Site acquisition • Engineering & • Life cycle • Redesigning the market design O&M planning capital structure intelligence • Concessions of the asset Activity and regulatory •
Slide 8: Successfully Applied Across Infrastructure & Utility Platform
Successfully Applied Across Infrastructure & Utility Platform Development at large scale & within time and budget India’s Largest Longest Private 64 8 MW Ultra Mega Largest Single Location Commercial Port HVDC Line in Asia Solar Power Plant Private Thermal IPP 6 (at Mundra) (Mundra – Dehgam) (at Kam
Slide 9: Company Overview: APSEZ
COMPANY OVERVIEW : APSEZ
Slide 10: Development, Operations, Value Creation
PORTS LOGISTICS SEZ • Nine operating ports, ~408 MMT • An integrated logistics player in • Large scale ‘ready to setup’ of augmented capacity in India India industrial land (SEZ) DEVELOPMENT • Covers most of India’s hinterland • Operating 56 rakes, 5 logistic parks • Land Bank(1) of ~10,000 ha. • Ta
Slide 11: Ports to Logistics Platform
Tech enabled A operations Ports One to nine in twenty years Consumer facing yet Ubiquitous to customer String of Ports trajectory Ports of Prosperity B Integrated Logistics (CTO to IWW and AFS(1) : an Network dominance, "Ports to Logistics Platform” organic evolution) Competitiveness is the moat C I
Slide 12: Evolution of APSEZ: West Coast Capacity
A Evolution of APSEZ West Coast East Coast FY20 Capacity Capacity FY06 1 320 MMT 88 MMT 1 Capacity 10 41x 415 MMT MMT Dahej 14 Assets MMT (US$ mn) $468 17x $8,251 Kandla Port 14 MMT Ports * Mundra 258 MMT Achieving 66% East- West 22% 63% 92% FY15 8% FY20 78% Dhamra Coast 45 Hazira Vizag MMT Parity 3
Slide 13: Technology driven multi-modal Logistic Solutions
B Technology driven multi-modal Particulars FY19 FY20 Logistic Solutions Rakes 20 56 Infrastructure Multi-Modal Rail Volume 150,942 325,067 (TEUs) Logistics Park Rail Logistics Parks 4 5 Grain Silos Terminal 400,000 500,000 Capacity (TEUs) Trucking Terminal Volume Warehouses 242,868 334,851 (TEUs) I
Slide 14: Developing Industrial Clusters
C Developing Industrial Clusters Total Land Bank ~10k+ Ha. West Coast (80%) East Coast (20%) Mundra SEZ • Kattupalli (~260 Ha) Mundra 8,481 ha ~ 8500 Ha 20% • Dhamra (~1650 Ha) 80% ~1650 Dhamra ha West Coast East Coast Kattupalli ~260 ha • Bringing customer inside Port gate. • Entrenching into custo
Slide 15: Diversified Cargo mix
Cargo Volumes (in MMT) Diversified APSEZCargo mixmix Cargo 250 200 223 208 150 180 15% 14% 16% 100 11% 41% 13% 41% 41% FY18 FY19 11% FY 20 50 91 75 84 0 33% 33% 32% FY18 FY 19 FY 20 APSEZ Cargo Volume APSEZ Container Volume Container Coal Crude Others Long Term Contracts (MMT): ~60% of Cargo 128 • S
Slide 16: APSEZ: ESG Initiatives
APSEZ: ESG Initiatives
Slide 17: Environment related factors that matter to our business model
Environment related factors that matter to our business model Climate Carbon Emission Resource Management Waste Management Awareness Avoided 15320 tCO2 in FY20 by Used 3,952 ML water in FY20; water 5,718 MT of waste was disposed 19MW of RE projects. consumption against revenue generated and 94
Slide 18: Social and community metrics, ESG rating
27 Adani Gensuite Safety Recordable Work Online reporting of safety related Injuries concerns Employee 4% 43,658 Development and Employee Turnover Training Manhours Welfare 70 % 97% Vendor Management Customers Rated Service as Local Procurement Good & above(2) Customer Centricity 137 9,876 Students
Slide 19: Governance: Policy, Board Members, Capital Structure
Recent Policy Initiatives Strict Adherence of Policy on “Related Party Transaction for Acquiring and Sale of Assets” Policy Capital Allocation policy Efficient use of capital to ensure higher return more than the cost of capital Dividend set at 20% to 25% of Profit After Tax (PAT) to be paid out as
Slide 20: Environmental initiatives and achievements
Environmental Initiatives Taken Achievements MITIGATION INITIAVES E-RTG Conversion of Diesel RTG to Electric RTG • Zero waste to landfill ENVIRONMENTAL Conveyor Belt Replaced mechanical operation of coal shifting with conveyor belt certification • Biogas generation – 13m3/day LED Replaced convention
Slide 21: APSEZ: Investment Thesis
APSEZ: INVESTMENT THESIS
Slide 22: Investment thesis
Strong Sponsorship of • A world class infrastructure & utility portfolio Adani Group • Combined market capitalization of ~ USD 29 billion • Transport & logistic utility that dominates the network Integrated Transport & • Unique operating model, embedded in the supply chain of customers resulting in
Slide 23: Annexures
ANNEXURES
Slide 24: COVID-19 impact on Indian economy and volumes
• May experience a decline in GDP before strengthening to 6.2% in FY22 Impact on Indian • Indian economy may revive in the short-term with the recent measures taken by the GOI such as Economic package to stimulate the Economy Indian economy & Progressive easing of lockdowns Impact on Our • Port oper
Slide 25: Consistent investment grade rating, reduce cost of capital
1 2 3 CONSISTENT INVESTMENT ELONGATED DEBT MATURITY LIABILITY MANAGEMENT: GRADE RATING PROFILE NATURAL HEDGE Since FY16, capped at Debt mix - FX 68% and INR sovereign rating Increased from 4.1 years in FY19 32% Earnings growth and free cash to 5 . 2 years in FY20 US dollar denominated flow
Slide 26: Debt, repayment profile and credit ratios
Repayment Profile Access to wide range of financing Debt (2) (in USD billion) 50 5.00 2.96 2.75 00 3.00 50 2.49 3.93 3.91 1.00 28% Rupee bond (1.00) 00 3.30 17% 2.99 2.94 (3.00) 50 2.76 (5.00) 16% 00 FY20 Foreign (7.00) FY20 50 currency (9.00) loan 7% 00 (11.00) 11% 45% 50 USD Bond (13.00) Rupee loa
Slide 27: Dhamra and Kattupalli port performance
Dhamra: Well Positioned to Emerge as Hub for East India Kattupalli: Successful Commissioning Cargo Volumes Cargo Volumes (MMT) (MMT) 29.7 10.9 7.5 8.9 14.25 FY14 FY20 FY18 FY19 FY 20 Acquired on June 2014 and turned around in the 1st year of Started as O&M operator for L&T in Nov 16 – Acquisitio
Slide 28: APSEZ Is Well Positioned To Leverage India's Macro Tailwinds
APSEZ Is Well Positioned To Leverage India’s Macro Tailwinds India Cargo Growth India GDP Growth India Total Expected 14% CAGR Government Focus on Ports expected CAGR of Import – Export Value over the FY20 to FY25 Stable Regulatory Environment 7.7% over 2018-2023(1) CAGR of 11.5% (2) from FY10-FY19
Slide 29: Cargo trends: coal and container
Cargo Coal Container Cargo India’s Port handling in last decade Cargo Coal Consumption to increase Cargo Containers handling (MTEUs) (Cargo Volume in MMT) 936MMT Coal account for 55% of India’s energy requirements 17 1,307 12 885 729 207 Domestic Imported FY15 FY20 FY20 FY11 FY20 Coal Imports contin
Slide 30: Income statement summary
(US$ mn) FY 20 FY19 FY18 Revenue from Operations 1,675 1,563 1,757 Revenue Growth, in US$ terms (%) 7.16% -11.03% 39.67% Operating Expenditure 608 552 648 (1) EBITDA 1,067 1,011 1,109 (1) EBITDA Margin (%) 63.7% 64.7% 63.1% Depreciation & Amortisation 237 197 184 (2) EBIT 830 815 925 Finance Costs 2
Slide 31: Key Ratios
(US$ mn) FY20 FY19 FY18 Gross Fixed Assets 3,842 3,942 3,535 Goodwill on consolidation 436 472 410 (1) Cash and Cash Equivalents 972 937 536 (2) Other Assets 3,001 2,821 2,803 Total Assets 8,251 8,172 7,284 (3) Shareholders Equity 3,428 3,578 3,262 Total Debt 3,908 3,931 3,295 (4) Other Liabilities
Slide 32: Cash flow summary
(US$ mn) FY20 FY19 FY18 Net cash inflow from operating activities 1,044 863 870 Net cash (outflow)/inflow investing activities (106) (633) (597) Net cash (outflow)/inflow from financing activities (600) 331 (293) Net (decrease)/increase in cash and cash equivalents 338 561 (20) Cash and cash equival
Slide 33: Growth with Goodness
Growth adani Goodness
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