Pkp Cargo Spolka Akcyjna · GPW:PKP

Pkp Cargo Spolka Akcyjna — PKP Cargo — Investor Presentation (June 2018)

53 slides from Pkp Cargo Spolka Akcyjna's investor presentation, June 2018

  1. Slide 1: PKP CARGO Group Corporate presentation

    PKP CARGO Group Corporate presentation Corporate presentation June 2018 March 2018 © Copyright PKP CARGO S.A.

  2. Slide 2: PKP CARGO Group’s 2017 & Q1 2018 results

    PKP CARGO Group’s 2017 & Q1 2018 results* ✓ ✓ ✓ MARKET SHARE EBITDA CAPEX 12M 51.6% PLN 702 million PLN 562 million measured by freight turnover (+0.1 p.p. profitability of 14.8% yoy) Q1 48.5% PLN 200 million PLN 133 million measured by freight turnover (-3.7 p.p. profitability of 16.5% yoy) REVENUE

  3. Slide 3: Agenda

    AGENDA ‖ PKP CARGO at a glance ‖ Market overviev ‖ Financial overview ‖ Key accomplishments © Copyright PKP CARGO S.A.

  4. Slide 4: PKP CARGO – leading player in the EU, Poland and the Czech Republic

    PKP CARGO – leading player in the EU, Poland and the Czech Republic PKP CARGO is the fourth largest rail freight company in the EU… …Operating on the second largest rail freight market, located Main EU rail freight operators by freight turnover (2016) at the crossroads of European rail networks Bn t

  5. Slide 5: PKP CARGO Group’s international potential

    PKP CARGO Group’s international potential in international transport services in the transport corridor network Main streams for container transport in Leveraging the potential the CEE for modernizing the key Location of Cooperation PKP CARGO CONNECT intermodal terminals transport corridors with Swe

  6. Slide 6: Steady development of collaboration with China

    Steady development of collaboration with China Fruitful development of collaboration Mix of launched connections with China freight turnover data for 2016 2016 data change yoy Suzhou – Warszawa Praga 9% 13% Chengdu – Łódź Olechów 1% +34% trains 22% Zhengzhou – Hamburg Billwerder Zhengzhou/Erlian – H

  7. Slide 7: PKP CARGO – multi-purpose logistic operator

    PKP CARGO – multi-purpose logistic operator – comprehensive product offer CARGO GROUPS RAIL FREIGHT ANCILLIARY SERVICES Forwarding – rail, road, water transport, storage, transshipment, Coal customs duty Aggregates Terminals – conventional and intermodal Metals Rolling stock – maintenance, rapair, r

  8. Slide 8: PKP CARGO’s business model

    PKP CARGO’s business model Rolling stock Terminals Human capital RESOURCES Rail infrastructure Diesel fuel Traction energy KEY Key suppliers of fuels Key suppliers of the energy SUPPLIERS on the Polish market on the Polish market Regulated prices Market prices Market prices Power plants Coal mines S

  9. Slide 9: Agenda

    AGENDA ‖ PKP CARGO at a glance ‖ Market overviev ‖ Financial overview ‖ Key accomplishments © Copyright PKP CARGO S.A.

  10. Slide 10: Position of the PKP CARGO Group – strengthening our leading market position

    Position of the PKP CARGO Group – strengthening our leading market position PKP CARGO Group’s share of the Polish market PKP CARGO Group’s share of the Polish market freight turnover data for 2017 freight volume data for 2017 +0.1 +0,6 p.p. p.p. 51.5% 51.6% 44.2% 44.8% 2016 2017 2016 2017 PKP CARGO

  11. Slide 11: Rail transport market in Poland in 2013-2017

    Rail transport market in Poland in 2013-2017 Principal reasons for the strong growth in rail Rail transport market in Poland transport in Poland in 2017: by freight volume in million tons (Office of Rail Transport) ► Intensification of infrastructural investments, +7.9% and consequently greater dema

  12. Slide 12: Poland – Stable market based on bulk commodities

    Poland – Stable market based on bulk commodities Rail freight transport market by freight turnover PKP CARGO market share by commodity segments bn tkm by 2017 freight turnover 60 90% 51,6 54,0 49,1 50,9 50,1 50,6 50,6 54,8 48,8 66% 50 43,6 60% 55% 50% 50% 52% 40 30 26% 20 30% 10 0 0% Hard coal Aggre

  13. Slide 13: Czech Rep. – Stable volume growth since 2009

    Czech Rep. – Stable volume growth since 2009 Rail freight transport market by freight turnover AWT and PKP CARGO market shares bn tkm by 2017 freight turnover ČD Cargo, a. s. 20 15,5% 15.4 14.3 14.3 14.6 15,3 15,6 AWT a.s. 12.8 13.8 14.0 4,0% PKP CARGO S.A. 10 7,1% 63,5% 1,9% METRANS Rail s.r.o. 0 8

  14. Slide 14: Positive developments on major markets in 2017

    Positive developments on major markets in 2017 – diversification of transport servicesa Intermodal Aggregates and construction materials Liquid fuels freight turnover, billion tkm freight turnover, billion tkm freight turnover, billion tkm +30.8% +22.8% +26.9% 5.9 4.6 3,2 1,3 2,5 1,1 2016 2017 2016

  15. Slide 15: Positive developments on major markets in Q1 2018

    Positive developments on major markets in Q1 2018 – diversification of transport servicesa Solid fuels* Aggregates and construction materials Metals and ores freight turnover, billion tkm freight turnover, billion tkm freight turnover, billion tkm 3,11 -10,1% 2,79 +0,9% +104,3% 1,56 0,94 0,95 0,76 Q

  16. Slide 16: Intermodal – rapid growth of a promising market

    Intermodal – rapid growth of a promising market Key events in 2017 Intermodal freight turnover, billion tkm ► Rising transport in Poland – freight volume of containers climbed 21% yoy and freight turnover shot up 27% yoy including including AWT: 0.16 +30.8% AWT: 0.16 ► Rapid development of the New S

  17. Slide 17: Intermodal

    Intermodal Key events in Q1 2018 Intermodal freight turnover, billion tkm ► Rapid development of the New Silk Road. Growth in land transport from/to China by 57% yoy measured by container volume including AWT: including AWT: 0.01 +23.4% 0.08 ► The volume of containers transported by PKP CARGO to and

  18. Slide 18: PKP CARGO Group’s freight transport via Polish ports

    PKP CARGO Group’s freight transport via Polish ports – growing significance of intermodal transport Freight transport via Polish ports Share of freight transport via Polish ports million tons in the PKP CARGO Group’s freight transport in 2017 by freight volume 42% -3.1% 13,5 13,1 +10.4% Average 25%

  19. Slide 19: Aggregates and construction materials – significant growth in a competitive market

    Aggregates and construction materials – significant growth in a competitive market Key events in 2017 Aggregates and construction materials freight turnover, billion tkm ► The lift of the financial cap for the National Road Building Program in 2014-2020 including from PLN 107 billion to PLN 135 bill

  20. Slide 20: Aggregates and construction materials

    Aggregates and construction materials Key events in Q1 2018 Aggregates and construction materials freight turnover, billion tkm ► Execution of key infrastructural projects in 2018 under the present EU financial perspective including AWT: including AWT: 0.01 +104.3% 0.01 ► Construction and assembly p

  21. Slide 21: Metals and ores – favorable economic situation

    Metals and ores – favorable economic situation Key events in 2017 Metals and ores freight turnover, billion tkm ► Higher steel production: up 14.8% yoy (10.3 million tons) in Poland, up 4.1% yoy (168.7 million tons) in the EU and up including including 5.3% (1,691 million tons) across the globe AWT:

  22. Slide 22: Metals and ores

    Metals and ores Key events in Q1 2018 Metals and ores freight turnover, billion tkm ► Higher steel production: up 5.8% yoy (2.65 million tons) in Poland, including AWT: including AWT: up 0.9% yoy (43.07 million tons) in the EU and up 4.1% (426.55 million 0.02 +0.9% 0.01 tons) across the globe ► Glob

  23. Slide 23: Hard coal – lower output

    Hard coal – lower output Key events in 2017 Hard coal freight turnover, billion tkm ► Transport in Poland measured by freight volume up 0.9% yoy including including ► Increase in import carriage to Poland by 42% yoy and decrease in export AWT: 0.37 AWT: 0.20 carriage from Poland by 23% yoy 11,1 -8.3

  24. Slide 24: Hard coal

    Hard coal Key events in Q1 2018 Hard coal freight turnover, billion tkm ► Hard coal production down 0.8 million tons (-5.0% yoy) including accompanied by inventory shrinkage of 0.4 million tons (-21.3% yoy) and including AWT: AWT: 0.07 higher production 0.05 in commercial power plants fired by hard

  25. Slide 25: Agenda

    AGENDA ‖ PKP CARGO at a glance ‖ Market overviev ‖ Financial overview ‖ Key accomplishments 25© Copyright PKP CARGO S.A.

  26. Slide 26: Building the Group’s value – strong financial performance

    Building the Group’s value* – strong financial performance Operating revenue Operating expenses PLN million PLN million 7.4% 3.9% 4 739 4 411 4 611 4 437 2016 2017 2016 2017 EBITDA Net result PLN million PLN million 24.9% 702 +101 562 59 2016 2017 -41 2016 2017 * Adjusted in accordance with item 5.2

  27. Slide 27: Effects of strengthening our market position

    Effects of strengthening our market position Operating revenue Operating expenses PLN million PLN million 11% 5% 1,100 1,216 1,096 1,097 1,153 1,034 Q1 2016 Q1 2017 Q1 2018 Q1 2016 Q1 2017 Q1 2018 EBITDA Net profit/loss PLN million PLN million 36% 36 200 147 Q1 2016 Q1 2017 Q1 2018 81 -1 -66 Q1 2016

  28. Slide 28: Rigorous cost discipline – improved ratios

    Rigorous cost discipline – improved ratios EBITDA per employee Remuneration Energy and fuel Access to infrastructure (000s PLN/employee) (000s PLN/employee) (000s PLN/employee) (000s PLN/employee) 25.7% -3.0% -1.3% +6% 39,7 -7.5% 36,7 30.2 0.3% 20,1 19,5 23,4 23,1 20.0 2016 2017 2016 2017 2016 2017

  29. Slide 29: Costs under control coupled with rising freight transport

    Costs under control coupled with rising freight transport Freight revenues Payroll Energy and fuel Access to infrastructure (PLN/thousand tkm) 25% OPEX 14% OPEX 15% OPEX (PLN/thousand tkm) -2% (PLN/thousand tkm) (PLN/thousand tkm) 128,5 135,2 5% 38,3 1% 38,8 4% -1% +6% 0.3% 20,7 21,5 22,9 22,7 Q1 20

  30. Slide 30: Increasing cash flow on operating activity – safe financing structure

    Increasing cash flow on operating activity – safe financing structure Available funding sources Debt structure as at 31 December 2017, PLN million PLN million Cash* 31.12.2016 31.12.2017 Debt Other Long-term 1,416 1,404 771 1 PLN 940 69 EIB Short-term 376 298 million 100 PEKAO SA Total debt 1,792 1,

  31. Slide 31: Robust foundations for growth

    Robust foundations for growth Available funding sources Debt structure as at 31 March 2018 Cash* 31 March 31 March 2017 Debt 2018 69 EIB Long-term 1,404 1,348 100 PEKAO SA PLN 871 1 Short-term 298 288 PKO BP million 701 Total debt 1,702 1,635 Total debt ratio 0.50 0.49 Financial ratios Cash flow PLN

  32. Slide 32: Capital expenditures in 2017 – in line with market needs

    Capital expenditures in 2017 – in line with market needs Group Group Change Capital expenditures PKP CARGO PKP CARGO Change yoy % yoy PLN million 2016 2017 Periodic repairs of rolling stock 231 359 128 55.5% 20 16 -4 -19.2% ICT development 3% 64% Mix 2017 6% Investment construction activity 19 32 13

  33. Slide 33: Rapid response to market demand

    Rapid response to market demand Group Group Change Capital expenditures PKP CARGO PKP CARGO Change yoy % yoy PLN million Q1 2017 Q1 2018 Rolling stock 77 126 49 64% 2 3 1 27% ICT development 2% Mix Q1 2018 2% 1% Investment construction 5 2 -3 -54% PLN 133 activity million 95% 2 3 -1 -26% Other 86 13

  34. Slide 34: Agenda

    AGENDA ‖ PKP CARGO at a glance ‖ Market overviev ‖ Financial overview ‖ Key accomplishments 34© Copyright PKP CARGO S.A.

  35. Slide 35: Key achievements in 2017 – harnessing the potential of an accelerating economy

    Key achievements in 2017 – harnessing the potential of an accelerating economy Taking ► Greater transport of aggregates for investments ✓ advantage of business ► Extension of key contracts for the transport of coal conditions ► Utilizing the upside potential for transport through Polish ports ► Cons

  36. Slide 36: Continued development of the pillars of success

    Continued development of the pillars of success STRENTHENING THE DEVELOPING LEADING POSITION INTERNATIONAL DYNAMIC DEVELOPMENT OF COOPERATION INTERMODAL TRANSPORT CONSTANT BUILDING OF SHAREHOLDER VALUE PKP CARGO – TRANSPARENT COMPANY OF THE YEAR 2016 OPTIMIZATION OF TANSPORT EXECUTION OF SPECIALIZED

  37. Slide 37: Outlook: key commercial areas

    Outlook: key commercial areas – foundations of the transport summit  Development of Polish ports  Terminal network expansion  Development of collaboration along the New Silk Road  Rising competitiveness following the oil price hike Intermodal  Accelerating execution of infrastructural investmen

  38. Slide 38: Outlook: key growth areas 2018

    Outlook: key growth areas 2018 ► Tapping into the synergy potential in the PKP CARGO Group Companies – appointment of Integration of the the Board of CEOs ✓ PKP CARGO ► Building competitive advantages in the North-South and East-West corridors Group ► The PKP CARGO Group as a professional logistics

  39. Slide 39: Appendix

    APPENDIX 39© Copyright PKP CARGO S.A.

  40. Slide 40: Freight results

    Freight results Freight turnover (million tkm) 2017 2016 Change % change Share in 2017 Share in 2016 solid fuels 11,514 12,542 -1,027 -8% 37% 44% including hard coal 10,154 11,070 -916 -8% 33% 39% aggregates and construction 5,882 4,636 1,246 27% 19% 16% materials metals and ores 3,986 3,401 585 17%

  41. Slide 41: Consolidated Statement of Comprehensive Income

    Consolidated Statement of Comprehensive Income PLN million 2017 2016 % change Revenue from sales of services 4,641 4,342 7% Revenue from sales of goods and materials 52 30 72% Other operating revenue 46 39 17% Total operating revenue 4,739 4,411 7% Depreciation and impairment losses 547 622 -12% Con

  42. Slide 42: Consolidated Statement of Financial Position

    Consolidated Statement of Financial Position ASSETS [PLN million] As at 31 Dec As at 31 Dec 2017 2016 Property, plant and equipment 4,688 4,701 Intangible assets 44 56 Investment property 1 1 Investments in entities accounted for under the equity method 54 58 Trade and other receivables 2 2 Other lo

  43. Slide 43: Consolidated Statement of Financial Position

    Consolidated Statement of Financial Position As at 31 Dec As at 31 Dec EQUITY AND LIABILITIES [PLN million] 2017 2016 Share capital 2,239 2,239 Supplementary capital 619 619 Other items of equity 5 11 Exchange differences resulting from conversion of financial statements of foreign operations 60 60

  44. Slide 44: Consolidated Cash Flow Statement

    Consolidated Cash Flow Statement Cash flow from operating activities [PLN million] 2017 2016 Gross result for the financial year 116 -151 Adjustments: Depreciation of property, plant and equipment and amortization of intangible assets 574 596 Impairment of non-current assets -27 25 (Profit) / loss o

  45. Slide 45: Consolidated Cash Flow Statement

    Consolidated Cash Flow Statement Cash flow from investing activities [PLN million] 2017 2016 Expenditures to acquire property, plant and equipment and intangible assets -511 -588 Proceeds on the transfer of property, plant and equipment, intangible assets and non-current assets held for sale 9 14 Ex

  46. Slide 46: Freight results Q1 2018

    Freight results Q1 2018 Freight turnover (million tkm) Q1 2017 Q1 2018 Change Change % Share in Q1 2017 Share in Q1 2018 solid fuels 3 108 2 794 -314 -10,1% 44% 37% including hard coal 2 774 2 405 -369 -13,3% 39% 32% aggregates and construction 764 1 561 797 104,3% 11% 21% materials metals and ores

  47. Slide 47: Consolidated Statement of Comprehensive Income

    Consolidated Statement of Comprehensive Income PLN million Q1 2018 Q1 2017 zmiana % Revenue from sales of services 1 193 1 077 11% Revenue from sales of goods and materials 12 10 25% Other operating revenue 11 13 -14% Total operating revenue 1 216 1 100 11% Depreciation and impairment losses 137 144

  48. Slide 48: Consolidated Statement of Financial Position

    Consolidated Statement of Financial Position As at As at ASSETS [PLN million] 31/03/2018 31/12/2017 Property, plant and equipment 4 697 4 688 Intangible assets 41 44 Investment property 1 1 Investments in entities accounted for under the equity method 51 54 Trade and other receivables 1 2 Other long

  49. Slide 49: Consolidated Statement of Financial Position

    Consolidated Statement of Financial Position As at As at EQUITY AND LIABILITIES [PLN million] 31/03/2018 31/12/2017 Share capital 2 239 2 239 Supplementary capital 619 619 Other items of equity -14 5 Exchange differences resulting from conversion of financial statements of foreign operations 71 60 R

  50. Slide 50: Consolidated Cash Flow Statement

    Consolidated Cash Flow Statement Cash flow from operating activities [PLN million] Q1 2018 Q1 2017 Profit / (loss) before tax 50 0 Adjustments: Depreciation of property, plant and equipment and amortization of intangible assets 137 144 ((Gains) / losses on the sale and liquidation of property, plant

  51. Slide 51: Consolidated Cash Flow Statement

    Consolidated Cash Flow Statement Cash flow from investing activities [PLN million] Q1 2018 Q1 2017 Expenditures to acquire property, plant and equipment and intangible assets -193 -118 Proceeds on the transfer of property, plant and equipment, intangible assets and non-current assets held for sale 1

  52. Slide 52: Legal disclaimer

    Legal disclaimer This presentation has been prepared by PKP CARGO S.A. (“Company”, “PKP CARGO S.A.”) solely for information purposes. This presentation may not be copied, distributed or transmitted directly or indirectly to any person, for any purpose whatsoever without PKP CARGO’s knowledge and exp

  53. Slide 53: Investor Relations contact

    To obtain additional information about PKP CARGO, please contact ToRelations the Investor obtain additional information about PKP CARGO, please contact Department: the Investor Relations Section: PKP CARGO S.A., Investor Relations PKP CARGODepartment, S.A. Grójecka Street 17,Relations Section Invest

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