Company presentation April 2011 Tallink
Tallink is the leading European provider of leisure and business travel and sea transportation services in the Baltic Sea
Fleet of 19 vessels Operating five hotels
Revenues EUR 814 million EUR 1.9 billion asset base 6612 employees Over 8.4 million passengers annually 258 thousand cargo units annually Listed on Nasdaq OMX Baltic – TAL1T
Over 50 years of operating and cruising experience
2 Tallink business model
Product offering
1-2 overnight cruises & passenger transportation Conferences Revenue structure (Financial year 2009/10)
49,6% Other 7% 24,9% Cargo On-board Tax-Free Shopping City break 12%
Restaurant & shop sales 54%
Hotel & travel packages Cargo Transportation Ticket sales 27% 43,3% 12,4%
26,1%
3 Cruise ferry
927 cabins, 2800 passengers
Buffet Nightclub
Tango lounge
Conference
Sauna
Shops, pubs, restaurants Car deck Show bar 4 Tallink’s passenger market share is 46% of the Northern Baltic Sea
(814M)
Northern Baltic passenger market
18 18.2 million passengers Other 16 Eckerö line 14
12 Viking (8.4M) 10 line
8 8.4 million passengers
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4 Tallink 2
0 05/06 06/07 07/08 08/09 09/10 5 Market shares Passenger operations
Est - Fin / Tallinn - Helsinki 3% 6% 5% 6% 5% 6% 7% 7% 5% 7% 5% 4% 8% 7% 7% 14% 13% 13% 21% 19% 19% 10% 20% 20% 25% 19% 18% 13%
15% 15% 10% 10% 10% 25% 25% 12% 11% 14% 15% 12% 22% 19% 19% 23% 22% 22% 22% 20% 15% 15% 16% On Estonia-Sweden &
+3%* -12%* Latvia-Sweden routes +8%* 55% 57% 50% Tallink is the only provider 44% 45% 40% 42% 41% 39% 42% 42% 37% 38% of short cruises and daily Passenger transportation
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 201 0 Tallink Viking Line Eckerö Line SuperSeaCat Nordic Jetline Linda Line
FIN - SWE / Helsinki -Stockholm FIN - SWE / Turku - Stockholm
47% 47% 47% 46% 43% 43%
53% 53% 53% 54% 57% 57%
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2008 2009 2010 2008 2009 2010 Highlights and milestones
OPERATIONS Finland-Sweden Riga-Stockholm St. Petersburg Finland-Germany
Tallinn-Stockholm
Estonia-Finland
Hotel operations
Newbuilt vessels € 1020 m Silja Line Baltic Queen Acquisitions € 780 m Superfast ferries Baltic Princess Superstar IPO Private Placement Star Galaxy
Victoria I
Romantika
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
7 Tallink´s position in the global ferry market
The World's top 25 Duty free & Travel Retail Shops 2009 Ranking by actual and estimated retail sales in US$ millions. Ferry operator by gross tons Rank Company Gross tons Rank Location Remarks 1 Stena Line 759 748 Sales> US$ 1,000.0 million 2 Tallink 598 529 1 Dubai - Dubai International Airport, U.A.E. AIRPORT SHOPS 3 P&O Ferries 502 924 2 London - Heathrow Airport, UK AIRPORT SHOPS 4 Tirrenia 381 899 Sales> US$ 900.0 million 5 Grandi Navi Veloci 352 555 3 Seoul - Incheon Int'l Airport, South Korea AIRPORT SHOPS Sales> US$ 800.0 million 4 Singapore - Changi Airport AIRPORT SHOPS Ferry operator by beds Sales> US$ 600.0 million Rank Company Beds 5 Frankfurt - Frankfurt-Main Airport, Germany AIRPORT SHOPS 1 Tallink 26 581 Sales> US$ 500.0 million 2 Tirrenia 15 258 6 Tallink Silja Line FERRY SHOPS 3 Stena Line 15 010 7 Paris - Charles de Gaulle Airport, France AIRPORT SHOPS 4 Viking Line 13 754 8 Hong Kong - Hong Kong International Airport AIRPORT SHOPS 5 Grand Navi Veloci 12 160 9 Bangkok - Suvarnabhumi Airport, Thailand AIRPORT SHOPS Sales> US$ 400.0 million 10 Amsterdam - Schipol Airport, Netherlands AIRPORT SHOPS Ferry operator by revenues (mEUR) Sales> US$ 300.0 million Rank Company Revenue 11 Oslo - Gardermoen Airport, Norway AIRPORT SHOPS 1 P&O Ferries 1030* 12 London - Gatwick Airport, UK AIRPORT SHOPS 2 Stena Line 936 13 Sao Paulo - Guarulhos Int’l Airport, Brazil AIRPORT SHOPS 3 DFDS 881 14 Tel Aviv - Ben Gurion Int’l Airport, Israel AIRPORT SHOPS 4 Tallink 792 15 Manchester - Int’l Airport, UK AIRPORT SHOPS 5 Color Group 551
Source: Generation Research 2010 Data: Ro/pax / ferries above 1,000 GT Source: ShipPax MARKET:10, 09* 8 Strategic plan
Tallink’s vision is to be the market pioneer in Europe by offering excellence in leisure and business travel and sea transportation services
Long term objectives toward increasing the company value and profitability: - Strive for the highest level of customer satisfaction - Increase volumes and strengthen the leading position on our home markets - Develop a wide range of quality services directed at different customers and pursue new growth opportunities - Reach a optimal debt level that will allow sustainable dividends
Current strategic cornerstones and competitive advantages:
Most modern Wide route Strong market share & High safety level & fleet network brand awareness environmental standards
9 Future actions
The Group’s focus is on the core operations to realize past investments. No significant investments are planned.
Aggressive sales and marketing activities are directed to the home markets. Strategic development towards key markets.
Follow and adjust according to the clients expectations and change of habits, to maximize profit.
Continuous innovation in product development. Flexible product offering, special offers and pricing to key customers – further development of the CRM system.
Improved revenue and capacity management of the ships. Further development of dynamic pricing to the cruise product, currently only in use on the Shuttle vessels.
Development of pro-active sales culture in the whole of the organization.
Continuous focus on cost efficiency.
10 Results quarterly seasonality breakdown
Passengers (millions) Cargo (th. units) Revenue (EUR millions) EBITDA (EUR millions)
360 792 814 9 350 787 159 8.43 331 800 761 150 145 8.12 8 89 133 300 126 6.87 7.07 75 237 255 272 227 7 2.84 258 2.70 252 600 84 250 Q4 78 6 2.36 49 2.33 95 59 67 100 85 74 200 188 5 185 176 202 1.83 2.16 400 60 4 1.63 150 69 1.56 25 27 Q3 83 79 189 3 2.00 159 175 167 14 30 64 158 50 1.81 1.62 100 57 1.36 1.57 54 17 21 2 200 15 18 Q2 10 50 93 92 190 194 203 1 1.79 1.81 1.99 76 68 77 187 181 33 30 1.62 1.51 29 27 28 Q1 0 0 0 0 06/07 07/08 08/09 09/10 10/11 06/07 07/08 08/09 09/10 10/11 06/07 07/08 08/09 09/10 10/11 06/07 07/08 08/09 09/10 10/11
11 The dynamics of high seasonality on the profit level
in EUR million Net profit/loss by quarters 50
Net loss 8M Net profit 22M Summer 40
30
42 20 32
10
1 0 Autumn Winter Spring -3 -2 -1 -9 -16 -10 -21 -17
-20
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 -30 08/09 09/10 10/11
Typical to the Tallink business model is that the result is made in Q4, the summer high season
12 Passenger traffic
Passenger number quarterly development
3.0 2.5 2.70 2.84 2.0 2.36
Millions 2.16 1.99 2.00 1.5 1.79 1.81 1.83 1.81 1.0 1.51 1.57 1.63 1.62 0.5 0.0
8 9 9 0 0 /08 /0 /0 /0 /1 1 7/08 8/09 9/ 0/11 07 0 08 0 0 1 Q1 07 Q2 Q3 Q4 07/08 Q1 08/09 Q2 08 PassengerQ3 Q4 Q1 revenues 09/10 Q2 09/10 Q3 09 Q4 Q2
250 100 200 225 80 150 212 60 184 165 150 144 160 152 100 133 131 137 132 137 125 40 50 20 0 0
8 8 8 9 9 9 0 0 0 1 1 /0 /0 /08 /0 /0 /0 /1 /1 /1 /1 7 7 9 9 0 0 0 0 09/10 2 Revenues in EUR m . m EUR Revenuesin
Q1 07 Q2 07 Q3 Q4 Q1 08/0 Q2 08/09 Q3 08 Q4 08 Q1 Q Q3 09/1 Q4 Q1 10 Q2 10 Revenueper. pax EUR
Total ticket, restaurants & shops revenues Ticket, restaurants & shops revenues per passenger
13 Cargo traffic
Cargo units & revenues 80 100 70
92 60 80 85 Units in th
79 Revenue in EUR m 75 76 77 50 68 69 60 67 64 44 60 59 40 40 39 57 54 40 37 35 30 30 25 28 26 20 23 24 25 23 20 20 10
0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 07/08 07/08 07/08 07/08 08/09 08/09 08/09 08/09 09/10 09/10 09/10 09/10 10/11 10/11
Cargo units Cargo revenues
14 Consolidated Income Statement
Full year September - August 6 months September - February
(in EUR million) 2008/2009 2009/2010 2009/2010 2010/2011
Sales 792 814 339 392
Cost of sales (1) (627) (646) (292) (332)
Marketing, general & admin (1) (101) (94) (46) (50)
EBITDA 133 145 37.4 45.7
Margin (%) 16.8% 17.8% 11.0% 11.65%
Net Profit (8.2) 22 (17.5) (8.3)
EPS (0.01) 0.03 (0.03) (0.01)
Notes:
(1) Includes depreciation and amortization
15 Costs breakdown
Structure Costs in EUR(th) 2008/2009 2009/2010 2008/2009 2009/2010 change Cost of goods 22% 21% -174 145 -169 981 -2%
Staff costs 15% 15% -119 029 -118 048 -1%
Marketing & Administrative expenses (1) 12% 11% -91 893 -86 012 -6%
Port & stevedoring costs 11% 12% -90 947 -91 546 1%
Fuel cost 11% 14% -90 576 -110 793 22%
Ship operating expenses 8% 8% -64 736 -61 527 -5%
Other costs 3% 4% -26 672 -29 178 9% Total costs from operations -657 998 -667 085 -2%
Depreciation and amortisation 9% 9% -69 939 -73 177 5%
Net finance cost 9% 6% -72 891 -47 423 -35%
(1) amortisation and depreciation excluded
16 Consolidated Cash Flow Statement
Full year September - August 6 months September - February (in EUR million) 2008/2009 2009/2010 2009/2010 2010/2011
Operating cash flow 146 164 45 44
Capital expenditure (163) (6) (4) (4)
Asset disposal 1 7 6 0
Free cash flow (16) 165 47 40
Debt financing 59 (107) (38) (36)
Equity financing 0 0 0 0
Interests & other financial items (60) (50) (25) (21)
Change in cash (17) 8 (16) (17)
17 Consolidated Statement of Financial Position
(in EUR million) 31.08.2008 31.08.2009 31.08.2010 28.02.2011
Total assets 1,898 1,947 1,871 1,822 Non-current assets 1,723 1,815 1,741 1,710 Current assets 175 132 130 112 - of which cash - 67 50 57 40 Total liabilities 1,247 1,304 1,203 1,163
Interest bearing liabilities 1,120 1,181 1,068 1,033 Other liabilities 127 123 135 130 Shareholders’ equity 651 643 668 658
Gearing (1) 63% 65% 62% 61% Equity/assets ratio 34% 33% 36% 36%
BVPS (2) (in EUR) 0.97 0.96 1.00 0.98
Note: (1) Gearing represents interest bearing liabilities / (interest bearing liabilities + shareholders’ equity) (2) Shareholders’ equity / number of shares outstanding 18 Tallink’s loan agreements have aggressive repayment schedules, the vessels useful life is however longer
Loan balance according to the current repayment schedules 1750 Fleet value MillionEUR 1500
1250
1000
750
500
250
0 Aug 31. AugAug 31. Aug 31. Aug 31. Aug 31. Aug 31. Aug 31. Aug 31. Aug 31. Aug 31. Aug 31. Aug 31. 2009 20102010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
19 The scheduled outstanding loan is displayed according to the agreements of the maturing loans and does not take into account future borrowings Age of fleet
Age of fleet by value (EUR m) Tallink Grupp ships age (value-weighted average): Tallink + Silja core fleet – 7.7 years Superfast fleet – 8.3 years 20+ years Ships out of core operations and 11-20 years cargo vessels – 23.5 years
1-5 years
World-wide ships age*: Ferries – 21.2 years
6-10 years Cruise – 16.2 years
* - source: ShipPax Market:10 Statistics, 2010
20 Tallink’s Fleet
Baltic Queen Victoria I Built: 2009 Built: 2004 Length 212.1m Length 193.8m Passengers: 2800 Passengers: 2500 Tallinn-Stockholm Lane meters: 1130 Tallinn-Stockholm Lane meters: 1000
Baltic Princess Superfast VII/VIII/IX Built: 2008 Built: 2001/2002 Length 212.1m Length 203.3m Passengers: 2800 Passengers: 717 Tallinn-Helsinki Lane meters: 1130 Rostock-Helsinki Lane meters: 1900
Silja Europa Galaxy Built: 1993 Built: 2006 Length 201.8m Length 212.1m Passengers: 3123 Passengers: 2800 Turku-Stockholm Lane meters: 932 Turku-Stockholm Lane meters: 1130
In the last 10 years Tallink has invested 1.3 billion EUR to create a modern fleet
21 Tallink’s Fleet
Superstar Star Built: 2008 Built: 2007 Length 175.1m Length 186m Passengers: 2080 Passengers: 1900 Tallinn-Helsinki Lane meters: 1930 Tallinn-Helsinki Lane meters: 2000
Silja Serenade Silja Symphony Built: 1990 Built: 1991 Length 202.9m Length 202.9m Passengers: 2852 Passengers: 2852 Helsinki-Stockholm Lane meters: 950 Helsinki-Stockholm Lane meters: 950
Romantika Silja Festival Built: 2002 Built: 1986 Length 193.8m Length 170.7m Passengers: 2500 Passengers: 2023 Riga-Stockholm Lane meters: 1000 Riga-Stockholm Lane meters: 885
In addition the Group has 2 ro-pax cargo vessels in operation and 3 older ferries which have been replaced and are available for charter or sale
22 Ownership structure
Shareholders of AS Tallink Grupp Ten largest shareholders inon the31.08.2010 end of Q2 Infortar 40% ING Luxemburg S.A 10% Nordea Bank Finland PLC / non-resident legal entities 10% Citigroup Venture Capital International Jersey Ltd 7% 3% Infortar Skandinaviska Enskilda Banken AB Clients (East Capital) JP Morgan Chase Bank / London Client’s account 3% 40% State Street Bank and Trust Omnibus fund 3% Firebird Republics Fund Ltd 1% Infortar AS BNYM / ING BankBANK Slaski SLASKI AC AC LM LM AKCJI AKCJI FIO FIO 1% 39% SkandinaviskaMellon Treaty Omnibus Enskilda Banken Finnish Clients 1%
EUR
Top 10 shareholders Institutional investors Retail investors
23 Safety, security and environmental protection are a high priority
Safety and Security Policy Environmental Policy
ISO 14001:2004 Environmental Certificate by Lloyds Register MARPOL Sewage Pollution Prevention Certificate MARPOL Air Pollution Prevention Certificate International Anti-Fouling System Certificate MARPOL Oil Pollution Prevention Certificate Document of Compliance for Anti-Fouling System MARPOL Garbage Pollution Prevention Attestation Passenger Ship Safety certificate International Ship Security Certificate Safety Management Certificate Document for Dangerous Goods
24 Contacts
Janek Stalmeister Andres Hunt Harri Hanschmidt CFO, Member of the Management Board Vice Chairman of the Management Board Advisor to the Management Board, AS Tallink Grupp AS Tallink Grupp Head of Investor Relations Sadama 5/7, 10111 Tallinn, Estonia Sadama 5/7, 10111 Tallinn, Estonia AS Tallink Grupp Sadama 5/7, 10111 Tallinn, Estonia Tel: +372 640 9800 Tel: +372 640 9800 Direct: +372 640 9851 Direct: +372 640 9904 Tel: +372 640 9800 Fax: +372 640 9810 Fax: +372 640 9810 Direct: +372 640 8981 E-mail [email protected] E-mail [email protected] GSM: +372 520 5758 Skype harri.hanschmidt E-mail [email protected]
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