A Year of Transformation Global Ports Annual Report 2013 1
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A YEAR OF TRANSFORMATION GLOBAL PORTS ANNUAL REPORT 2013 A YEAR OF TRANSFORMATION ANNUAL REPORT 2013 GLOBAL PORTS INVESTMENTS PLC www.globalports.com 1. ABOUT US ABOUT1. US APPENDIX 4: SHAREHOLDER INFORMATION AND KEY CONTACTS STRATEGIC2. REVIEW A TRANSFORMATIONAL YEAR see page 10 for more detail GLOBAL PORTS INVESTMENTS PLC LEGAL ADDRESS DEPOSITARY Omirou 20 J.P. Morgan Agios Nikolaos 1 Chase Manhattan Plaza, Floor 58 CY-3095 New York, NY 10005 BUSINESS REVIEW3. Limassol, Cyprus +1 (866) JPM-ADRS GLOBAL PORTS IS THE [email protected] POSTAL ADDRESS Kanika International Business Center, STOCK EXCHANGE Office 201,Profiti Ilia Street, 4, Germasogeia London Stock Exchange PLC LEADING CONTAINER Limassol P.C. 4046, Cyprus 10 Paternoster Square, London EC4M 7LS, UK Phone: +44 20 7797 1000 INVESTOR RELATIONS Website: www.londonstockexchange.com TERMINAL OPERATOR Michael Grigoriev CORPORATE GOVERNANCE4. Head of Investor Relations INDEPENDENT AUDITORS Phone: +357 25 503 163 PricewaterhouseCoopers Limited GSM: +7 (916) 991 73 96 City House, 6 Karaiskakis Street IN EASTERN EUROPE BY Tatyana Stepanova CY-3032, Limassol, Cyprus 1 Investor Relations Analyst Phone: +357 25 555 000 E-mail: [email protected] Fax: +357 25 555 001 CONTAINER THROUGHPUT MEDIA RELATIONS Russian Media 2013 WAS A TRANSFORMATIONAL YEAR FOR GLOBAL PORTS WITH THE Anna Vostrukhova ACQUISITION OF NCC GROUP, WHICH SECURED THE GROUP’S LEADERSHIP Head of Media Relations Phone: +357 25 503 163 POSITION IN THE RUSSIAN CONTAINER-HANDLING MARKET AND CREATED APPENDICES5. THE LEADING CONTAINER TERMINAL OPERATOR IN EASTERN EUROPE1 E-mail: [email protected] BY THROUGHPUT International Media Holloway & Associates Laura Gilbert, Zoe Watt Phone: +44 20 7240 2486 E-mail: [email protected] OWNERSHIP STRUCTURE2 TIHLTIHL FREE-FLOAT (LSE LISTING) APM TERMINALS POLOZIO ENTERPRIZES LTD3 ILIBRINIO ESTABLISHMENT LTD3 30.75% 20.5% 30.75% 9% 9% Transportation Investments Holding Limited (TIHL) is one of the APM Terminals B.V. (a member of A.P. Moller-Maersk Group, largest privately owned transportation groups in Russia, the CIS a leading oil and transportation conglomerate) is a Global Terminal and the Baltic Region with strategic interests in rail transportation Network of 65 port and terminal facilities and more than 160 Inland and port operations. TIHL carries on business under the brand Services operations, giving APM Terminals a global presence in name N-Trans. Nikita Mishin, Konstantin Nikolaev and Andrey 68 countries. Filatov jointly control TIHL. 1. Sou rce: Drewry, based on 2013 data, some 2013 numbers are estimated 2. As at 29 April 2014 3. Former owners of NCC Group Limited Created by Wardour 4. Russian Ports and Finnish Ports segments on an Illustrative Combined basis, as of 31 December 2013 5. Russian Ports segment of the Enlarged Group www.wardour.co.uk 6. Global Ports Group (excluding NCC Group) Global Ports Annual Report 2013 Printed by Newnorth 5 1. ABOUT US 1. 2. STRATEGIC2. REVIEW KEY DATA CONTENTS Illustrative Combined basis** 01 ABOUT US BUSINESS REVIEW3. 02 Our performance 04 Our terminals 06 Key strengths NO. 07 STRATEGIC REVIEW 08 Growth of Global Ports container terminal1 10terminals including two inland marine7 container operator in facilities in Russia and oil terminals in Russia 10 NCC Group acquisition 1 12 Key milestones Eastern Europe products terminal in Estonia and Finland CORPORATE GOVERNANCE4. 14 Chairman’s statement 18 CEO’s review 21 BUSINESS REVIEW M M 22 Executive management team 24 Market review TEU TEU 26 Group performance 2.8 4 4 .1 36 Russian Ports segment the combined annual container total container throughput in 2013 handling capacity 4 39 Oil Products segment 40 Finnish Ports segment 41 CORPORATE GOVERNANCE APPENDICES 5. 42 Board of Directors M 53 Risk Management 56 Corporate Responsibility TEU 58 Definitions 9.1 5 60 Presentation of information the potential container handling capacity of terminals at the existing footprint APPENDICES 1 Directors’ report and consolidated FINANCIAL HIGHLIGHTS financial statements 2 Directors’ report and parent Illustrative Combined basis** company financial statements 3 Unaudited Selected Illustrative Combined Financial Metrics 4 Shareholder information $737M $420M and key contacts 2013 Revenue on an illustrative combined basis 2013 Adjusted EBITDA*** on an illustrative combined basis + 4.3 % 51 % Basic and diluted earnings per share 2013 dividend payout ratio6 increased 4.3% to $0.24 in 20136 ** Assuming the acquisition of NCC Group took place on 1 January 2013 Adjusted EBITDA (a non-IFRS financial measure) is defined as profit for the period before *** income tax expense, finance income/(costs), net, depreciation of property, plant and equipment, amortisation of intangible assets, other gains/(losses)-net, impairment charge Annual Report 2013 of property, plant and equipment and impairment charge of goodwill 1 1. ABOUT US OUR PERFORMANCE see page 26 for more detail A YEAR OF SOLID RESULTS AND STRONG CASH-FLOW GENERATION On an Illustrative Combined basis the key business of the Enlarged Group, the SEGMENTS’ CONTRIBUTION container business7, showed solid results, generating more than 90% of TO ADJUSTED EBITDA9 combined Adjusted EBITDA. Strong cash-flow generation and a healthy balance sheet enable the Group to pay respectable dividends to its shareholders. Enlarged Russian Ports segment Enlarged Russian Ports segment Adjusted EBITDA Margin8 Adjusted EBITDA 64.4 % $ 404M 2013 High margin level maintained Remained broadly flat compared to 2012 Earnings per share Capital Expenditure (CAPEX) RUSSIAN PORTS SEGMENT + % - % 90% 4.3 44 OIL PRODUCTS TERMINAL SEGMENT Basic and diluted earnings per share increased Decrease in 2013 cash CAPEX compared to initial 10% 4.3% to USD 0.2410 plan driven by NCC Acquisition (-10% versus 2012 consolidated CAPEX on cash basis).10 FINNISH PORTS SEGMENT < 1% Dividends $ M 58.5 The total dividend declared on 2013 profits brings payout ratio to 51% on Net Profit attributable to Owners of the Company10 7. Russian Ports segment of the Enlarged Group including Russian Ports segment of Global Ports and the entire NCC Group 8. Adjusted EBITDA Margin (a non-IFRS financial measure) is calculated as Adjusted EBITDA divided by revenue, expressed as a percentage 9. Shares of segment’s Adjusted EBITDA in the total Adjusted EBITDA of operating segments of the Enlarged Group, excluding Holdings 2 10. Global Ports Group (excluding NCC Group) Global Ports 1. ABOUT US 1. 2. STRATEGIC2. REVIEW CONSOLIDATED FINANCIAL AND OPERATING DATA USDm 2012 2013 Change % SELECTED IFRS FINANCIAL INFORMATION Income statement Revenue Illustrative Combined Financial Metrics (unaudited) 755.1 736.8 (2%) Global Ports Group (excluding NCC Group) 501.8 480.0 (4%) BUSINESS REVIEW3. NCC Group 253.3 256.9 1% Balance sheet11 Total assets 1,308.9 3,413.8 161% Net Debt 229.6 1,418.9 518% SELECTED NON-IFRS FINANCIAL INFORMATION (UNAUDITED) Illustrative Combined Financial Metrics Adjusted EBITDA 451.9 420.0 (7%) Adjusted EBITDA Margin, % 59.8% 57.0% 4. CORPORATE GOVERNANCE4. Global Ports Group (excluding NCC Group) Adjusted EBITDA 287.9 256.8 (11%) Adjusted EBITDA Margin, % 57.4% 53.5% NCC Group Adjusted EBITDA 164.0 163.2 (0%) Adjusted EBITDA Margin, % 64.7% 63.5% GLOBAL PORTS SEGMENTS DATA (UNAUDITED) USD m 2012 2013 Change % GLOBAL PORTS GROUP (EXCLUDING NCC GROUP) Russian Ports segment APPENDICES 5. Gross container throughput, 000s TEU 1,450 1,405 (3%) Revenue (audited) 377.5 370.7 (2%) Adjusted EBITDA 242.0 241.3 (0%) Adjusted EBITDA Margin, % 64.1% 65.1% Oil Products Terminal segment Average annual storage capacity, 000s m3 1,026 1,026 0% Oil Products Gross Throughput, million tonnes 10.4 9.7 (7%) Revenue, USDm (audited) 233.2 202.4 (13%) Adjusted EBITDA, USDm 113.8 86.7 (24%) Adjusted EBITDA Margin, % 48.8% 42.9% Finnish Ports segment Gross container throughput, 000s TEU 178 224 25% Revenue (audited) 23.5 23.6 0% Adjusted EBITDA 2.8 3.4 21% Adjusted EBITDA Margin, % 12.0% 14.3% NCC GROUP Gross container throughput, 000s TEU 1,069 1,145 7% Revenue (audited) 253.3 256.9 1% Adjusted EBITDA 164.0 163.2 (0%) Adjusted EBITDA Margin, % 64.7% 63.5% Illustrative Combined ILLUSTRATIVE COMBINED Russian Ports segment Gross container throughput, 000s TEU 2,519 2,551 1% Revenue 630.8 627.6 (1%) Adjusted EBITDA 406.0 404.4 (0%) Adjusted EBITDA Margin, % 64.4% 64.4% 11. Includes the balance sheet of NCC Group as at 31 December 2013 Annual Report 2013 3 1. ABOUT US OUR TERMINALS AN UNPARALLELED NETWORK OF CONTAINER TERMINALS FROM ST PETERSBURG TO THE FAR EAST, OUR TERMINALS GIVE US A STRONG POSITION IN THE RUSSIAN CONTAINER HANDLING MARKET 56% share of Baltic Basin terminals in the overall container throughput of BALTIC Russian terminals12 BASIN MOSCOW CARGO FLOW FROM CARGO FLOW FROM THE AMERICAS FAR EAST BASIN THE AMERICAS 27% share of Far East Basin terminals in the overall container throughput of Russian terminals12 3.49 M TEU 550,000 TEU BALTIC BASIN Global Ports terminal capacity13 FAR EAST BASIN Global Ports terminal capacity FINLAND OKHOTSK SEA RUSSIA 9 8 2 1 GULF OF FINLAND 5 6 7 CHINA 4 BALTIC SEA 10 36 ESTONIA RUSSIA SEA OF JAPAN The Group’s container terminals in the Baltic Sea The Group’s container terminal in the Far East Basin Basin offer direct access to the most populous is in an ice-free harbour with deep-water access and economically developed regions of the European and a direct link to the Trans-Siberian Railway. part of Russia, including Moscow and St Petersburg. 12. Source: ASOP. Container throughput in Baltic Sea Basin (56%), Far East Basin (26.8%), Black Sea Basin (14.7%), and North Russian Ports (2.5%) total container throughput of Russian terminals in 2013 4 13. Includes Russian Ports segment of Global Ports and the entire NCC Group Global Ports 1.