Napier Port Holdings Ltd · NZX:NPH
Napier Port — Investor Day (June 2021)
46 slides from Napier Port's investor day presentation, Jun 10, 2021
Slide 1: Building Future Connections
BUILDING FUTURE CONNECTIONS 10 June 2021
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER This presentation has been prepared by Napier Port Holdings Limited (together with Investors should be aware that certain financial data included in this presentation are Port of Napier Limited, "Napier Port"). This presentation is being provided to you on 'non-GAAP f
Slide 3: Recap on Basic Features/Capabilities
RECAP ON BASIC FEATURES/CAPABILITIES ⚬ Future proofed ⚬ Channel and berth pocket consented to -14.5m ⚬ Gantry crane ready ⚬ Series 8 MHC ready 3 * Courtesy of Crane.Market Copyright Terex MHPS GMBH
Slide 4: Recap on Resilience
RECAP ON RESILIENCE 1/2500 YEAR EARTHQUAKE DESIGNED AND CONSTRUCTED TO IMPORTANCE LEVEL 4, PROVIDES THE PORT AND THE REGION MAXIMUM RESILIENCE TO EARTHQUAKE 4
Slide 5: Recap on Project Development
RECAP ON PROJECT DEVELOPMENT ⚬ Resource Consent Process ⚬ Early Contractor Involvement (ECI) – HEB Construction working with Napier Port and Beca (designers) on detailed design, constructability and Value Engineering. ⚬ Contract development – Chapman Tripp ⚬ Resulted in Lump Sum Contract with clear
Slide 6: Progress – Piling and Deck
PROGRESS – PILING AND DECK ⚬ Deck Hardware ordered ⚬ Pile depth (NP Risk) largely as expected 380 OF 400 PILES COMPLETED 35% OF DECK CONSTRUCTED (32 POURS) 6
Slide 7: Progress – Dredging
PROGRESS – DREDGING ⚬ Dredging completion expected late 2021 ⚬ Material type largely as expected ⚬ No issues dredging harder rock 683,000 m3 OF 1.21 MILLION m3 COMPLETED 7
Slide 8: Progress – Others
PROGRESS – OTHERS ⚬ Ground improvements commenced ⚬ Pavement works commencing this week ⚬ 10 MoorMaster units ready for shipment from Italy ⚬ Electrical substation build progressing 8
Slide 9: Environmental
ENVIRONMENTAL 0 WATER QUALITY 15 FISHING SURVEYS 0 CONSENT EXCEEDANCES COMPLETED BREACHES FROM DREDGING EACH MONTH 195 2 PENGUINS CHICKS RELOCATED TO HATCHED SANCTUARY 2 ARTIFICIAL REEFS CREATED 9
Slide 10: Cultural Launch of the Marine Cultural Health Programme
CULTURAL LAUNCH OF THE marineculturalhealth.co.nz 10
Slide 11: Cultural
CULTURAL CLICK HERE TO WATCH THE MARINE CULTURAL HEALTH PROGRAMME VIDEO 11
Slide 12: Health & Safety
HEALTH & SAFETY ⚬ Number of incidents, LTIs, focus on major issues ⚬ Napier Port active in H&S ⚬ Two third-party audits completed 12
Slide 13: Governance
GOVERNANCE ⚬ Project Steering Group meets monthly ⚬ Weekly walkover by CEO and Chair ⚬ Third Party Project Management Audit conducted 13
Slide 14: Our Corporate Strategy
OUR CORPORATE STRATEGY 10 June 2021
Slide 15: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER This presentation has been prepared by Napier Port Holdings Limited (together with Investors should be aware that certain financial data included in this presentation are Port of Napier Limited, "Napier Port"). This presentation is being provided to you on 'non-GAAP f
Slide 16: Resetting Our Purpose to Redefine and Align Our Strategy
RESETTING OUR PURPOSE TO REDEFINE AND ALIGN OUR STRATEGY TO THE FUTURE ⚬ A need to understand our WHY – “Together, we build a thriving region by connecting our customers, people and community to the world” ⚬ Three years ago we put in place an ambitious roadmap for our business • Future regional grow
Slide 17: Continuing to Evolve Our Strategy
CONTINUING TO EVOLVE OUR STRATEGY BASED ON WHAT WE SEE NOW AND AHEAD ⚬ Achieved what we said we would, and more ⚬ 3-Year Strategy Refresh • The external environment has changed – customer expectations, competition, global challenges • We have changed internally – our ambition, customer focus, cultur
Slide 18: Embedding Sustainability in Everything We Do
EMBEDDING SUSTAINABILITY IN EVERYTHING WE DO ⚬ External and internal stakeholder consultation ⚬ Development of our Sustainability Framework ⚬ Establishing reporting goals ⚬ Sustainability Strategy launching in FY21 • Aligned to 14 of 17 UN SDGs • Work streams aligned to global, local and business go
Slide 19: Building on What We Started and Telling Our Story More Broadly
BUILDING ON WHAT WE STARTED AND TELLING OUR STORY MORE BROADLY V 6
Slide 20: Culture of Care – Building Capability
CULTURE OF CARE – BUILDING CAPABILITY “Support our strong and resilient V culture which encourages care of our people, the local community and the environment” ⚬ Foundation of our strategy ⚬ 3-Year Health & Safety Road Map • ISO45001 alignment • Critical Risk Control Management • SAI360 launch ⚬ Map
Slide 21: Culture of Care – Growing in Partnership
CULTURE OF CARE – GROWING IN PARTNERSHIP ⚬ Social License to Operate is shifting towards a Social License to Grow • Marine Cultural Health Programme delivering on our 6 Wharf resource consent • Growing and strengthening iwi relationships • Partnering with and working alongside the wider community •
Slide 22: Grow Our Culture with Our People's Passion
GROW OUR CULTURE WITH OUR PEOPLE’S PASSION FOR THE PORT AND THE REGION “Make Napier Port an even better place to work with a highly engaged and caring workforce of owners, invested in their port and region” ⚬ Te Kāhui O Te Herenga Waka O Ahuriri – Te Ao Māori strategic plan ⚬ Equality, Diversity & I
Slide 23: Harnessing Data & Technology
HARNESSING DATA & TECHNOLOGY “Leverage intelligent data to create new value for our port and our customers” ⚬ In-house teams driving innovation and providing productivity and efficiency gains • Sharewater – Harbour Management System • Propel – Vehicle Booking System • Reefer power monitoring (intern
Slide 24: Collaborative Partnerships
COLLABORATIVE PARTNERSHIPS “Developing and building partnerships with like-minded organisations” ⚬ Investing in our community ⚬ Strong customer focus ⚬ Wide range of stakeholders, including • Technology partners – InPhySec • Contractors – HEB, Higgins • Government entities – Kiwirail and NZTA • Loca
Slide 25: Customer Connection
CUSTOMER CONNECTION “Create value by gaining rich insights V through deeper customer relationships” ⚬ Listening to what our customers say and designing and building solutions that deliver value ⚬ Working with our customers on new strategic initiatives, such as the debarker, mobile harbour cranes, ra
Slide 26: Connecting with Customers Outside of the Region
CONNECTING WITH CUSTOMERS OUTSIDE OF THE REGION NEW CUSTOMERS THAT VWE’RE BRINGING TO NAPIER PORT: NAPIER PORT LOGISTICS SERVICES 13
Slide 27: Networked Infrastructure
NETWORKED INFRASTRUCTURE “Support an evolving supply THAMES STREET DEPOTS chain with a resilient and agile infrastructure network” ⚬ Connecting into the supply chain for central and lower North Island ⚬ Maintenance of existing infrastructure WHAKATŪ INLAND PORT KIWIRAIL INTERMODIALFREIGHT HUB MANAWA
Slide 28: NZ Inc Approach with North Island Supply Chain Strategy
NZ INC APPROACH WITH NORTH ISLAND SUPPLY CHAIN STRATEGY ⚬ A national ports supply chain strategy is required • Good working relationship with Kiwirail and understanding of its future investments, including Bunnythorpe Hub • Eliminating waste from the supply chain • Improve resilience and reliability
Slide 29: Our Strategy Builds on a Strong Business
OUR STRATEGY BUILDS ON A STRONG BUSINESS A LONG-TERM ASSET ESSENTIAL TO THE HEALTH OF THE HAWKE’S BAY ECONOMY AN INFRASTRUCTURE ASSET ESSENTIAL TO THE HEALTH OF THE HAWKE’S BAY ECONOMY Napier Port is an essential regional infrastructure asset and, by connecting Hawke’s Bay and central New Zealand to
Slide 30: Financial Targets – FY25
FINANCIAL TARGETS – FY25 Napier Port EBITDA1 FY2016 - FY2020 (NZ$M) 10.2% CAGR +>50% growth $37.2 $40.5 $41.0 $35.3 $27.8 FY16 FY17 FY18 FY19 FY20 FY25 1 - Pro forma 17
Slide 31: Napier Port Log Supply Chain
NAPIER PORT LOG SUPPLY CHAIN 10 June 2021
Slide 32: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER This presentation has been prepared by Napier Port Holdings Limited (together with Investors should be aware that certain financial data included in this presentation are Port of Napier Limited, "Napier Port"). This presentation is being provided to you on 'non-GAAP f
Slide 33: The Wall of Wood
THE WALL OF WOOD ⚬ Map showing forestry blocks in all regions contestable to Napier Port. ⚬ The catchment totals approx. 420,000 hectares of radiata pine plantings. HAWKE’S BAY FORESTRY PLANTINGS * Map prepared in 2018 by Manawatu Aerial Photo Services and Forme Forest Industry Consultants 3
Slide 34: The Wall of Wood
THE WALL OF WOOD ADJUSTED HAWKE’S BAY FORESTRY PLANTINGS (time-adjusted for average harvest age of +29 years*) Significant plantings in Hawke's Bay in the 1990s are maturing. This is expected to translate to higher export volumes to at least 2030. NAPIER PORT LOG EXPORTS * Average harvest age of Rad
Slide 35: Markets
MARKETS EXPORT MARKETS: CURRENT LOG EXPORT PRICING IS STRONG: FY20 EXPORT LOG VOLUMES: EXPORT LOG PRICES BY DESTINATION (NZD per JAS) Source: Ministry for Primary Industries Manatû Ahu Matua China 93% India 5% South Korea 2% 5
Slide 36: Markets
MARKETS BULK SHIPPING RATES ARE ALSO HIGH: Note: Graph shows the Baltic Dry Index (BDI), a composite index. Most New Zealand log trade is shipped in handy size vessels, which is strongly influenced by the BDI. (Source: Trading Economics) OTHER MARKETS: NZD:USD CNY:USD 6
Slide 37: Understanding Cost and Opportunity to Influence
UNDERSTANDING COST AND OPPORTUNITY TO INFLUENCE APPROXIMATE LOG EXPORT SUPPLY CHAIN COSTS1: SHIPPING $30 PER TONNE vessel chartering, shipping and transiting logs to customer PORT COSTS $20 PER TONNE LOGS TO PORT storage, wharfage, stevedoring $60 PER TONNE and marine costs planting, growing and tra
Slide 38: Napier Port Log Exporters
NAPIER PORT LOG EXPORTERS ⚬ Napier Port focus on forest owners % FOREST OWNER vs AWG BUYER, FY ⚬ Napier Port has a mix of seven log exporters ⚬ Three forest owners • Pan Pac, AVA (Matariki + Hancock Forests), Ernslaw One ⚬ Four Traders, Agents, AWG (At Wharf Gate buyers) • Fortuna FP, Pacific FP, TP
Slide 39: Log Stevedores at Napier Port
LOG STEVEDORES AT NAPIER PORT ⚬ Two stevedore and marshalling companies – ISO Limited and C3 limited are contracted directly by exporters ⚬ At Napier Port, ISO currently have 60% share and C3 40% share 9
Slide 40: Stevedore Constraints
STEVEDORE CONSTRAINTS ⚬ Productivity • Vessels can work a maximum of four gangs per shift. At Napier Port, we are averaging 3.1 gangs deployed over the last three years • Productivity flat ⚬ Difficulty of stevedores to obtain and retain sufficient skilled labour – extremely high turnover per annum •
Slide 41: Space Is at a Premium on Port
SPACE IS AT A PREMIUM ON PORT ⚬ Limited storage land footprint on-port at 9.4 hectares currently (with some flexibility) ⚬ Fumigation (Methyl Bromide) space intensive ⚬ ISO have recently opened a site on Hyderabad Road (3 km from Napier Port) to add additional/overflow storage for their customers 11
Slide 42: Health and Safety
HEALTH AND SAFETY ⚬ Safety performance in managing volume ⚬ Licence to operate in place with both stevedore companies giving Napier Port a contractual connection ⚬ Regular health and safety meetings held with industry companies – stevedores, fumigators, and exporters ⚬ Pre-vessel meetings held with
Slide 43: Opportunities – Extend Reach
OPPORTUNITIES EXTEND REACH ⚬ Landside logistic services to attract more volume to Napier Port ⚬ Additional volume coming to Napier Port • Wairoa rail • Central North Island rail ⚬ Significant opportunity to expand these opportunities as constraints are addressed 13
Slide 44: Opportunities – Mobile Harbour Crane Log Loading Trial
OPPORTUNITIES MOBILE HARBOUR CRANE (MHC) LOG LOADING TRIAL ⚬ Trial for loading logs with MHCs scheduled for Q4 2021 ⚬ Three exporters and one stevedore supporting the trial ⚬ Productivity – vessel rate expected to improve from around 500 (approximately 160 tonnes per gang) to 900 tonnes per hour ⚬ L
Slide 45: Opportunities – Log Debarker
OPPORTUNITIES LOG DEBARKER ⚬ Mobile debarking unit to be situated on Napier Port ⚬ Alternative to Methyl Bromide for phytosanitary treatment (currently moratorium ends in November) • Approx. 600,000 JAS p.a. currently fumigated ⚬ Top deck cargo – Napier Port will remain a finishing port option • Vol
Slide 46: Opportunities – Wharf
OPPORTUNITIES 6 WHARF ⚬ Increases availability of both 4 and 5 wharves for log loading ⚬ 4 Wharf is currently very restricted for logs with wide beam container vessels on 5 Wharf ⚬ New berth is important in the context of cruise ships returning and congestion in harbour ⚬ Berth options will be less