Adani Ports and Special Economic Zone Limited. November 2016

Transcription

1 Adani Ports and Special Economic Zone Limited November 2016

2 The Adani Group : Significant Presence In Logistic, Resources and Energy Space Adani Ports and Special Economic Zone Adani Enterprises Adani Power Adani Transmission An integrated logistics and port operator company in India 10 strategically located ports Handling 15 % of India s Cargo Mundra - A Multi product port based SEZ Integrated logistics service provider with 18 operating Rail Rakes Renewables: Commenced worlds one of the largest single location solar power plant Coal Trading & MDO Edible Oil: Fortune Amongst leading brand of Edible Oil in India Others : Agro Commodities & city gas distribution India s largest private thermal Power Producer with capacity of 11,040 MW Largest Sea Water based Flue Gas De-Sulfurization Plant in India Ranked among 100 great places to work in India India s largest electricity transmission company Capacity: 5,051 ckt kms India s only Private 1000 km HVDC transmission system for efficient transmission of power to the state of Haryana Investment grade rating Investment grade rating 2

3 APSEZ - String Of Ports With Logistics Connectivity Providing End To End Service String Of Ports Multipurpose Terminals Bulk Terminals Container Terminals Inland Container Depot (ICDs) Mundra SEZ Patli Kishangarh Mundra Kandla Dahej Hazira Dhamra Logistics Vizag Mormugao Kattupalli (1) Ennore (2) Vizhinjam (2) Tugs Cargo Handling Storage Connectivity 3

4 Integrated Business Model Presence Across Value Chain Ports Logistics SEZ Concession assets in a supportive regulatory environment with commercially negotiated free pricing Weighted average concession period of 30 years Handling multi & Complex cargo Provides container rail operations across all Indian ports; 20 years license 2 Inland Container Depots providing warehousing Enhancing connectivity between ports & origin / destination of cargo Land bank of over 8,000 hectares Provide services through a blend of land bank and port facilities Focus on developing industry cluster in a transportation and logistics hub Revenue from upfront premium and recurring, annual lease rentals And. Having Unique Operating Model Marine Port Development Handling Storage Logistics 17 Dredgers 21 Tugs 11.5 km quay length 42 berths 17 terminals 21 cranes 35 RTGS 102 KM Conveyors 11 Silos 2.9 mn sq mtrs Bulk Storage 0.9 mn Kl Tankages 36.5k container ground slots 311 km rail length 13 locomotives 2 ICDs 18 rakes Integrated Ports, Logistics and SEZ Business to provide End to End Solutions to Customers 4

5 Strategically Located Ports With Hinterland Connectivity Close Proximity to Key Trade Routes Adani Ports India s Destination Ports Rail Road Pipeline Multi-Modal Hinterland Connectivity Connectivity to the national railway grid connectivity Developed > 300 KM of Private rail lines Incremental Rail lines developed under JVs with Indian railway Developed private road network Direct connectivity to national and state highways Link between Mundra and inland refineries GAIL to construct 2,539 km Jagdishpur - Haidia and Bokaro - Dhamra Gas Pipeline 1 Further Enhanced through Proximity to DMIC / DFC DMIC Influence Area Dedicated Freight Corridor (DFC) Mundra / Dhamra New Delhi Well Positioned to Connect India to Global Trade 5

6 Continuous Evolution With Strong Customer Base Diverse Cargo Mix Bulk & Break Bulk Crude Oil Containers LNG / LPG Automobiles Geographical Advantage Hinterland access Across Indian Coastline: West: Mundra, Kandla, Dahej, Hazira, Goa East: Dhamra, Vizag, South: Ennore, Vizhinjam, Kattupalli Incremental volume growth drivers Containers, Trans-shipment Coastal shipping Bulk Diversifying Customers & Location Crude Long-term Off-takers Container Partnership Model Rising coking coal imports Global Leaders - Our Partners: Exclusive contracts for crude oil Power Mundra Port CT 1 Mundra Port CT 3 At Hazira Port Agri Products, Timber, fertilizers, steel, iron ore etc 6

7 Successful Turnaround: A Testimony to APSEZ s Operational Skills Dhamra Port A Turnaround Story Acquired in 2014 from Tata Steel & Larsen & Toubro Ltd Integrated and turned around from a loss making entity to profit generation in first year Over all turn-around Enhanced operating efficiency by reducing operating costs and diversifying cargo mix.demonstrated Integrated Business Model Manufacturing Warehousing Transportation The Last Mile Export-Import Manufacturing facility in Manesar (North India) Cars handed over to APSEZ at its Patli ICD (North India) Cars transported by APSEZ s container rail to Mundra APSEZ s private rail link (Mundra) transports from national network to the port Cars exported; parts imported and sent back using the same chain 7

8 Mundra SEZ Growth Driver For EXIM Cargo Free Trade Warehousing Zone with Strong Competitive Advantages Presence of Diversified Industry Clusters Large Land Bank > 8000 hectares of contiguous land with all approvals Power availability: Mundra power plant Oil & Gas Automobile Assembly Agricultural Commodities One Stop Business Support Services Water treatment plant, de-salination plant Connectivity: Mundra port (proximity to global trade routes), connectivity to road and rail network, airport Social Infrastructure School, Hospital, Supermarkets, Others Enables development of industrial townships Chemicals Heavy Engineering Logistics Port led SEZ development: Proven Track Record of Execution with High Growth Visibility Preferred Port of Call and Container hub for global liners Diversified Revenues Upfront: Land lease premium, Sale of port assets Recurring : Lease rentals, Revenue Share, Marine, Handling and Evacuation Income Future Mundra Solar Technopark High Quality Client Base Visibility of Contracts Annuity Revenue Model with Predictable Cash Flows helping Port Revenues with Minimal Incremental Capex 8

9 Logistics An End to End Logistic Service Provider Two ICD s at Patli (Haryana)and Kishangarh (Rajasthan) Strategic partnership at Loni, Bawal and Wardha. ICD at Kila-Raipur (Punjab) will be commissioned in Jan ICD Patli - The largest private ICD in the country for Container Volume. ALL: In volume terms is India's largest private rail operator. Operating 18 Rail rakes. Expanded capabilities to offer Warehousing and End-to-End supply chain solutions to clients namely - Maruti Suzuki, Honda, Toyota Tsusho, Hanko, Hero Motors, Aditya Birla and many more. 9

10 Key Differentiators... Operating under Stable & supportive regulatory framework since last 25 years helps in creating Large infrastructure and allied projects Proven track record - Executed greenfield & brownfield expansions / acquisitions Adani Ports & Special Economic Zone Operating Efficiency: Mechanized operations, technologically integrated model leading to low-cost operations Mitigating risk through diversification of cargo, geographical expansion and multiple services to clients SEZ: Port Led SEZ development with high growth visibility Enhancing customer experience through logistics support 10

11 Leading To Higher Capacity, Faster Growth With High Profitability Port 1 Capacity Assets (Rs in cr) FY06 10 MMT 35x FY MMT x Ports From Single Ports In West to Multi Ports Cargo Volumes Rs in Crores FY06 Rs in Crores FY 16 Rs in Crores FY06 FY EBITDA 385 Revenue EBITDA 7256 Revenue 11

12 Outlook & Growth Strategy 12

13 Ports Sector Benefits From Strong Demand & Government Initiatives Growing Demand Policy Support Innovation Increasing Trade Activities in Container Traffic National Maritime Development Programme & National Maritime Agenda Expanding Development & distribution facilities in India Rising Demand for Agro & Other Bulk Commodities FDI of upto 100% under automatic route Use of Modern technology Growing Crude Imports by the Country Tariff at non-major and private ports are based on freemarket pricing Providing Support to Global Projects from India 13

14 Ports Sector National Maritime Agenda Focus on Increasing Capacity : To create a port capacity of around 3200 MT to handle the expected traffic of about 2500 MT by 2020 Increasing Investments : Proposed Investments in major ports(government Owned ) by 2020 are expected to total USD 18.6 billion, while those in non major ports(private sector) would be USD 28.5 billion Creating World Class Infrastructure : To implement full mechanism of cargo handling and movement of ports, thereby bringing Indian ports on par with best international ports in terms of performance & capacity 14

15 India s Cargo Volume Set To Accelerate Manifold Commodity wise CAGR ( ) (%) 11% 10% 2% 83 2, , , Containers Bulk Crude 2025 Our Capacities Ready to Capture incremental cargo growth Adani Ports & SEZ Capacities 6.7mn TEUs 201 MMT 50 MMT 4 container terminals at Mundra, one each at Hazira & Kattupalli Ennore & Vizhinjam under construction Mechanized coal handling All our Ports equipped to handle coal cargo 2 operational offshore single point mooring facilities Long Term Contracts with three petroleum / POL companies APSEZ has Strong Market Positioning and Diversified Asset Base to Leverage India s Growing Trade Note: 1. Sagarmala, National Perspective Plan (April 2016), Ministry of Shipping 15

16 APSEZ Focusing On Its Continued Outperformance. Major Ports Under Purview of Central Govt Non Major Ports Excluding Adani Ports Adani Ports 330 CAGR of 2% CAGR of 3% CAGR of 23% CAGR 0f 4% CAGR 0f 14% CAGR 0f 17% E E E Note: All Figures in Million Metric Ton(MMT) Major & Non Major Ports Estimates are based on Industry Analysis & CAGR of past 10 years 16

17 Economy of Indian Maritime Industry 1.6x rise in all India Cargo Traffic by 2021 Leading to 1.9x rise in 2000 APSEZ Cargo Handling (Mn MT) At 1.5x multiplier to GDP (pre-crisis 1.6x), all India cargo growth will clock 12.9% to 1760 Mn MT by FY15 FY16 FY17E FY18E FY19E FY20E FY21E On organic basis, APSEZ will handle 282 Mn MT Cargo by 2021 with 1.15x market share gains. Real GDP GDP multiplier Cargo growth APSEZ will meet its target of 330 Mn MT with diversifying cargo mix and addition of LPG/LNG products Note: 1. Numbers have been arrived at using weighted averages using bulk and container percentages and average turnaround time as per Maritime Agenda Numbers have been arrived at using weighted averages using bulk and container percentages and average pre berthing / waiting time as per Maritime Agenda

18 Strong Operating and Financial Performance Revenues CAGR of 15% Rs in Crores EBITDA 2919 CAGR of 17% 3903 Rs in Crores FY 14 FY 15 FY 16 0 FY 14 FY 15 FY PAT 1740 CAGR of 18% 2314 Rs in Crores EPS 9.8 CAGR of 12% INR FY 14 FY 15 FY 16 0 FY 14 FY 15 FY 16 18

19 Strong Operating Metrics Compared to Peers Revenue Growth (3yr CAGR) EBITDA Margin (LTM) Return on Assets (LTM) 1 Adjusted FCF Margin 2 (FY16) APSEZ (Baa3/BBB-/BBB-) 31.6% APSEZ (Baa3/BBB-/BBB-) 65.3% APSEZ (Baa3/BBB-/BBB-) 9.6% Hutchison PT (A3/A-/A-) 39.5% Pelindo II (Baa3/BB+/BBB-) 12.4% Hutchison PT (A3/A-/A-) 60.8% SIPG (A1/A+/-) 7.8% APSEZ (Baa3/BBB-/BBB-) 31.7% DP World (Baa2/-/BBB) 9.0% DP World (Baa2/-/BBB) 49.6% PSA International (Aa1/AA/-) 7.5% China Merchant (Baa1/BBB+/-) 20.1% Asciano (Baa3/BBB-/-) 3.6% PSA International (Aa1/AA/-) 45.9% DP World (Baa2/-/BBB) 5.7% Asciano (Baa3/BBB-/-) 16.9% SIPG (A1/A+/-) 1.5% China Merchant (Baa1/BBB+/-) 45.4% Pelindo II (Baa3/BB+/BBB-) 4.3% DP World (Baa2/-/BBB) 2.6% Hutchison PT (A3/A-/A-) 0.3% SIPG (A1/A+/-) 34.6% Asciano (Baa3/BBB-/-) 4.3% SIPG (A1/A+/-) (1.2%) PSA International (Aa1/AA/-) (0.02%) Pelindo II (Baa3/BB+/BBB-) 32.3% China Merchant (Baa1/BBB+/-) 3.6% PSA International (Aa1/AA/-) 0.0% China Merchant (Baa1/BBB+/-) (9.3%) Asciano (Baa3/BBB-/-) 27.0% Hutchison PT (A3/A-/A-) 2.8% Pelindo II (Baa3/BB+/BBB-) 0.0% Note: Financials for comparable companies are on Last Twelve Month (LTM) basis as on 30 th June 2016 for DP World, Hutchison PT and China Merchants and; 31 st December 2015 for SIPG, Asciano, Pelindo II and PSA International. LTM data for APSEZ as on 30 th Sept Source: Audited financials as per each of the above companies publicly available rating reports. Note: Ratings in the sequence of Moody s / S&P / Fitch. 1. ROA: Profit After Tax / Average Total Assets. Earnings Before Interest and Taxes = Revenue from Operations Total Expenses (excluding finance costs and tax expenses). 2. Adjusted FCF Margin = Adjusted FCF / Sales 19

20 Experienced Senior Management Team Experienced Leaders and Proven Senior Management Team Karan Adani CEO Joined APSEZ in 2009 Responsible for strategic development of the Group and overlooks day to day operations Sarthak Behuria Executive Director (CEO s office) (1) Joined APSEZ in 2016 Prior experience as Chairman in IOCL and BPCL Ennarusu Karunesan CEO (Mundra and Tuna) Joined APSEZ in 2015 Over 26 years of experience in managing ports and container terminals Santosh Kumar Mohapatra CEO (Vizhinjam) Joined APSEZ in 2014 Former IAS officer and served in senior positions in the Government and public sector B. Ravi CFO Joined APSEZ in 2009 Involved with accounting, business management, strategy and planning, M&A, debt restructuring, etc. Capt. Sandeep Mehta President (Business Development) Joined APSEZ in 2005 Responsible for business development Port Wise Management Team Subrat Tripathy CEO (Dhamra) Joined APSEZ in years of experience in operations of railway, port connectivity projects and port management Amit Uplenchwar President, SEZ Joined APSEZ in 2013 Over 16 years of international and cross functional experience Capt. Ummesh Abhyankar Joint President (CEO s Office) Joined APSEZ in 2005 Responsible for business reviews, analysis, innovation and excellence G. J. Rao Director (Ports) (1) Joined APSEZ in 2012 In-charge of port operations and maintenance, business development and marketing Capt. Anil Kishore Singh CEO (Hazira and Dahej) Joined APSEZ in 2010 Over 33 years of experience in marine operations and pilotage Anil Radhakrishnan CEO (Logistics) Joined APSEZ in 2014 Over 21 years of experience in senior management roles in shipping, logistics, supply chain and consumer Asset Level Leadership with Strong Technical and Managerial Expertise and Experience 18 Note: (1) Non-board position. 20

21 Sustainability Report and CSR Activities Sustainability Corporate Governance Clear & effective Corporate governance mechanism Utmost importance to transparency Compliance Management System Well structured IT-enabled compliance management system Stakeholder Engagement Helps understand and address the concerns of stakeholders in a systematic & structured manner Sustainability Governance Established strong internal mechanism for implementation, monitoring and review Environmental Protection Energy and Emissions Water Management Waste Management Fostering of Environment Environment Economic Labour Practices Human Rights Society Product Responsibility Common Aspects Not Relevant CSR Activities Community Health Teaching sanitation in rural areas HIV / AIDS awareness campaign Mobile dispensary Immunization for kids Livelihood Development Vocational training Cattle vaccination and Animal Husbandry Skill gradation Rural Infrastructure Development Pond deepening Education Underprivileged Children Girl Child Education Training volunteers for teaching Adani Vidyamandir Check dam construction Village drainage system Roads, drinking water, power, etc 21

22 Legal 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 growth prospects, and future developments of the business and the competitive and regulatory environment, and statements which contain words or phrases such as will, expected to, etc., or similar expressions or variations of such expressions. Actual results may differ materially from these forward-looking statements due to a number of factors, including future changes or developments in their business, their competitive environment, their ability to implement their strategies and initiatives and respond to technological changes and political, economic, regulatory and social conditions in India. This presentation does not constitute a prospectus, offering circular or offering memorandum or an offer, or a solicitation of any offer, to purchase or sell, any shares and should not be considered as a recommendation that any investor should subscribe for or purchase any of APSEZL's shares. Neither this presentation nor any other documentation or information (or any part thereof) delivered or supplied under or in relation to the shares shall be deemed to constitute an offer of or an invitation by or on behalf of APSEZL. APSEZL, as such, makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information or opinions contained herein. The information contained in this presentation, unless otherwise specified is only current as of the date of this presentation. APSEZL assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent development, information or events, or otherwise. Unless otherwise stated in this document, the information contained herein is based on management information and estimates. The information contained herein is subject to change without notice and past performance is not indicative of future results. APSEZL may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revision or changes. No person is authorized to give any information or to make any representation not contained in and not consistent with this presentation and, if given or made, such information or representation must not be relied upon as having been authorized by or on behalf of APSEZL. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities in any jurisdiction, including the United States. No part of its should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. None of our securities may be offered or sold in the United States, without registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from registration therefrom. 22

23 Notes Twenty Equivalent Units (TEU) is a standard measure of containers which are 20 feet in length and 8 feet in width; the height can vary Cargo traffic includes both loading (export) and unloading (imports) of goods Draft is the vertical distance between waterline and the bottom of the ship. It determines the depth of water a ship or boat can safely navigate. Higher capacity ships will need higher draft, hence ports with higher natural draft will attract bigger Ships Waterfront availability is the length of the water line on the coast where ships can rest and the goods are unloaded. Longer waterfront lengths reduce waiting time and help raise capacity Quay Length : A structure of solid construction along a shore or bank that provides berthing and generally provides cargohandling facilities. A similar facility of open construction is called a wharf Terminals are certain sections of the ports where different types of cargo are unloaded A tug (tugboat) is a boat or ship that manoeuvres vessels by pushing or towing them. Dredging is an excavation activity usually carried out underwater, in shallow seas or freshwater areas with the purpose of gathering up bottom sediments and disposing of them at a different location. This technique is often used to keep waterways navigable A berth is a designated location in a port or harbour used for mooring vessels when they are not at sea. Terminals are certain sections of the ports where different types of cargo are unloaded Draft is the vertical distance between waterline and the bottom of the ship. It determines the depth of water a ship or boat can safely navigate. Higher capacity ships will need higher draft, hence ports with higher natural draft will attract bigger ships 23

24 Glossary DMIC: Delhi Mumbai Industrial Corridor DFC: Dedicated Freight Corridor ICD: Inland Container Depot ALL : Adani Logistics Ltd SEZ: Special Economic Zone USD : US Dollar MMT: Million Metric Tonnes CAGR: Compounded Annual Growth Rate MDO : Mine Developer Cum - Operator 24