Company presentation February 2010 Tallink in brief
Tallink is the leading European provider of leisure and business travel and sea transportation services in the Baltic Sea.
Fleet of 19 vessels Operating four hotels in Tallinn
Revenues EUR 792 million EUR 2 billion asset base 6,800 employees Over 8 million passengers annually 252 thousand cargo units annually Listed on OMX Tallinn – TAL1T
Over 50 years of operating and cruising experience
2 Tallink business model
Product offering
1-2 overnight cruises & passenger transportation Conferences Revenues structure (financial year 2008/09)
Other 49,6% 7% 24,9% Cargo On-board Tax-Free Shopping City break 14%
Restaurant & shops sales 54%
Hotel & travel packages Cargo Transportation Ticket sales 43,3% 25% 12,4%
26,1%
3 The market
Total market (passengers, millions) 18
16 9m 5m Aland-Sw e 14
12 Fin-Sw e
10 Sw e-Lat 8
1.5m 6 Sw e-Est
4 Fin-Est 2.6m 2
0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Revenues structure 9 Tallink’s passenger volume development (financial year 2008/09) 8
Other 7 Lat-Swe 6% 6 6% 5 Fin-Ger 5% 4 Fin-Swe 3 44% Est-Swe 2 11% Tallink revenue structure 1
0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
4 Est-Fin 27% Market shares Passenger operations
FIN - EST / Helsinki - Tallinn
Linda Line 5% 3% 6% 7% 5% 4% 7% 7% 8% 5% 7% 7% 14% Nordic Jetline 13% 10% 20% 20% 25% 19% 18% 13% SuperSeaCat 15% 15% 25% 12% 11% 14% 15% 12% 22% Eckerö Line 19% 19% 20% 15% 15% 22% 16% Viking Line
Tallink 55% On Estonia-Sweden & +3%* 50% -12%* +8%* 44% 45% 37% 39% 38% 42% 42% Latvia-Sweden routes Tallink is the only provider of short cruises and daily 2001 2002 2003 2004 2005 2006 2007 2008 2009 Passenger transportation
FIN - SWE /Helsinki -Stockholm FIN - SWE /Turku -Stockholm
47% 47% 47% 45% 46% 43%
Viking Line
Tallink Silja 53% 53% 53% 55% 54% 57%
5 2007 2008 2009 2007 2008 2009 Highlights and milestones
Revenues (m€)
800 Routes Finland-Sweden 700
Riga-Stockholm 600
500 St. Petersburg Finland-Germany Tallinn-Stockholm 400 300 Estonia-Finland 200
100 Newbuilt vessels – investment € 1020 mln Baltic Queen 0 04/05 05/06 06/07 07/08 08/09 Baltic Princess Superstar Star EBITDA (m€) Galaxy Victoria I 160 Romantika 140
120 Tallink Taxi Acquisitions - € 780 mln 100 IPO Silja Line Tallink Express Hotel 80 Superfast ferries 60 Pirita Top Spa Hotel Private Placement 40 Tallink Spa & Conference Hotel 20 Tallink City Hotel 0 04/05 05/06 06/07 07/08 08/09 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
6 Tallink´s position in the global ferry market
Operators by Gross Tons Operators by beds Rank Company Gross tons Rank Company Beds 1 Stena Line 760 715 1 Tallink 27 798 2 Tallink 600 995 2 Stena Line 14 374 3 P&O Ferries 502 924 3 Tirrenia 14 288 4 Tirrenia 386 967 4 Viking Line 13 754 5 ANEK lines 342 861 5 Grandi Navi Veloci 11 960
Operators by revenues (2008) Operators by no. of employees Rank Company Revenue (mEuro) Rank Company Staff 1 P&O Ferries 1 030,0 1 Tallink 6 093 2 Stena Line 945,8 2 Stena Line 5 700 3 Tallink 786,8 3 P&O Ferries 5 000 4 Finnlines 735,7 4 DFDS Seaways 4 215 5 Scandlines 584,0 5 Color Line 3 827
Data: Ro/pax / ferries above 1,000 GT Source: ShipPax MARKET:09
7 Tallink in the world
8 Source: Generation Research - www.generation.se Strategy
Fleet renewal investment program completed – focusing on core operations to realize past investments
Improve the profitability by optimal fleet deployment — chartering/selling old & non profitable vessels
Reduction of net debt
Maintain & improve the excellence in operations to broaden the customer base and strengthen the market position
Follow the customer expectations & changed trends to maximize revenues — flexible product offering - justified target group products and pricing combinations to meet the customer expectations
9 Results quarterly seasonality breakdown
Passengers (millions) Revenue (EUR millions) EBITDA (EUR millions)
792 159 9 800 787 150 761 8,12 133 8 126 237 255 7,07 227 7 6,87 84 2,70 600 Q4 6 100 49 2,33 2,36 94 74
5 185 188 176 405 4,20 1,83 400 4 1,56 1,63 63 25 27 Q3 210 2,03 14 3 159 175 167 50 1,81 17 21 1,36 1,57 200 15 Q2 2 0,84 81 15 1 0,60 51 190 187 194 181 33 29 30 1,62 1,51 1,79 1,81 27 Q1 0,74 63 11 - 0 0 05/06 06/07 07/08 08/09 09/10 05/06 06/07 07/08 08/09 09/10 05/06 06/07 07/08 08/09 09/10
10 Consolidated Income Statement
(in € million) 2005/2006 2006/2007 2007/2008 2008/2009
Sales 405 761 786 792
Cost of sales (1) (288) (560) (622) (627)
Marketing, general & admin (1) (50) (114) (111) (101)
EBITDA 94 159 126 133
Margin (%) 23.2% 20.9% 16.0% 16.8%
Net Profit (2) 50 67 19 -8.2
EPS (2) 0.09 0.10 0.03 -0.01
Notes:
(1) Includes depreciation and amortization (2) 2005/2006 Net Profit adjusted with exclusion of negative goodwill
11 Financial year 2008/2009 results
840
820 +38
+7 800 +6 792 786 +7 -52 780 In addition the negative 760 Revenue changes impact of weak SEK/EUR 740 exchange rate was
720 approximately EUR 20 million. 700 EUR m Revenue 2007/08 Tickets Restaurant & Cargo Charter Other Revenue 2008/09 shops
180 -27 160 +44 133 +6 140 126 -7 -6 -3 120
100
80 60 EBITDA impact
40
20
0 EUR m EBITDA 07/08 Revenue change Fuel cost Cost of goodsps Shi opex Staff Other EBITDA 08/09
12 Dynamics of fuel oil price and EUR/SEK rate
FY 2006/07 FY 2007/08 FY 2008/09 FY2009/10 12,0 600
11,5 500
11,0 400
10,5 300 EUR SEK EUR Fuel oil in EUR in oil Fuel 10,0 200
9,5 100
9,0 0 01.09.2006 01.09.2007 01.09.2008 01.09.2009
EURSEK Fuel Oil 1% FOB NWE Cargoes
13 Passenger traffic
Passenger number quarterly development 3,0
2,70
Millions 2,5
2,33 2,36 2,0
1,79 1,81 1,83 1,81 Passengers FY 08/09 FY 0708 change 1,5 1,62 1,63 1,56 1,51 1,57 Fin-Swe 3,17 2,86 10,8% 1,36 Est-Fin 3,49 2,93 18,8% 1,0 Est-Swe 0,85 0,77 10,0% 0,5 Lat-Swe 0,52 0,36 45,6% Fin-Ger 0,10 0,14 -31,6% 0,0 Totalmillions 8,12 7,07 14,9% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 06/07 06/07 06/07 06/07 07/08 Passenger07/08 07/08 revenues07/08 08/09 08/09 08/09 08/09 09/10 250 100 90
200 212 80 70 182 184 150 60 150 144 140 137 137 50 130 133 131 132 100 112 40
Revenues in EUR millions. EUR Revenuesin 30 Revenue perpassenger Revenue EUR. 50 20 10 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 06/07 06/07 06/07 06/07 07/08 07/08 07/08 07/08 08/09 08/09 08/09 08/09 09/10 14 Total ticket, restaurants & shops revenues Ticket, restaurants & shops revenues per passenger Consumer Confidence Index
FY 2005/06 FY 2006/07 FY 2007/08 FY 2008/09 30 90
20 80
10 70
0 60
-10 50
-20 40
-30 30
-40 20 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09
Estonia Finland Sweden Euro-area Spending per passenger (€, 3-months rolling average, right scale)
CCI indicates the difference between the percentages of respondents assessing the next 12-months-period outlook “better” and the respondents assessing it “worse”. Source: Statistic Boards of the respective countries
15 Cargo traffic
FY 2007/08 FY 2008/09 change Cargo units 331 151 252 035 -23,9% Finland - Sweden 102 949 87 625 -14,9% Estonia - Finland 118 526 94 321 -20,4% Estonia - Sweden 44 353 31 271 -29,5% Latvia - Sweden 13 262 13 587 2,5% Finland - Germany 52 061 25 231 -51,5%
Cargo units & revenues 100 100
93 95 92 80 89 80 83 85 79 75 76 60 68 60 60 57 59 40 40 44
Nr. units in thousands in Nr. units 40 39 40 40 39 35 37 35 20 28 20 23 25 24
0 0 millions. EUR revenue Cargo in Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 06/07 06/07 06/07 06/07 07/08 07/08 07/08 07/08 08/09 08/09 08/09 08/09 09/10 Cargo units Cargo revenues
16 Costs breakdown
Structure Costs in EUR 2007/2008 2008/2009 2007/2008 2008/2009 change Cost of goods 20% 24% -147 079 -174 145 16%
Port & stevedoring costs 12% 12% -91 469 -90 947 -1%
Fuel cost 19% 12% -135 080 -90 576 -49%
Staff costs 23% 22% -163 856 -164 045 0%
Ship operating expenses 8% 10% -57 376 -64 736 11%
Depreciation and amortisation 8% 9% -61 078 -70 489 13%
Cost of package sales 2% 2% -13 194 -13 241 0%
Other costs (1) 2% 2% -11 879 -13 241 11%
Marketing & Administrative expenses 6% 7% -48 409 -49 938 3 %
(1) amortisation & staff costs excluded
17 Consolidated Cash Flow Statement
(in € million) 2005/2006 2006/2007 2007/2008 2008/2009
Operating cash flow 79 135 109 146
Capital expenditure (562) (141) (271) (163)
Asset disposal 12 44 29 1
Free cash flow (471) 38 (133) (16)
Debt financing 327 (9) 171 59
Equity financing 226 0 (4) 0
Interests & other financial items (12) (36) (51) (60)
Change in cash 69 (7) (17) (17)
18 Consolidated Balance Sheet
31.08.2007 31.08.2008 31.08.2009 30.11.2009 (in € million) Q1 unaudited
Total assets 1,698 1,898 1,947 1,909 Non-current assets 1,537 1,723 1,815 1,792 Current assets 161 175 132 117 - of which cash - 83 67 50 41 Total liabilities 1,050 1,247 1,304 1,267
Interest bearing liabilities 948 1,120 1,181 1,145 Other liabilities 102 127 123 122 Shareholders’ equity 648 651 643 642
Gearing (1) 59% 63% 65% 64% Equity/assets ratio 38% 34% 33% 34%
BVPS (2) (in EUR) 0.96 0.97 0.96 0.96
Note: (1) Gearing represents interest bearing liabilities / (interest bearing liabilities + shareholders’ equity) (2) Shareholders’ equity / number of shares outstanding 19 Loans
Scheduled loan balance (as of August 31st of the financial year) 1750 1 750
1500 1 500
1250 1 250
1000 1 000
750 750
500 500
250 250
0 0 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20
Loan balance Estimated fleet value @ -3% p.a
20 Tallink’s Fleet
Vessel Galaxy, Baltic Queen, Romantika, Star Superstar Silja Europa Superfast vessels Baltic Princess Victoria I SF VII, SF VIII, SF IX Built 2006-2009 2002-2004 2007 2008 1993 2001-2002 Passengers 2,800 2,500 1,900 2,080 3,123 717-728 Cabins 927 691-739 131 187 1,152 179-196 Lane meters 1,130 1,000 2,000 1,930 932 1,891 Speed (knots) 22-24.5 22 27.5 29 21.5 27.9 Length (meters) 212 193 185 175 202 203
Vessel Silja Serenade, Festival Sea Regal Regina Vana Kapella Silja Symphony Wind Star Baltica Tallinn Built 1990-1991 1986 1972 1999 1980 1974 1974 Passengers 2,852 2,023 260 80 1,500 800 36 Cabins 986-995 588 98 38 504 228 24 Lane meters 950 885 1,000 2,087 840 730 590 Speed (knots) 21 22 17.3 15.5 19 18 14.5 Length (meters) 203 171 155 157 145 154 110
21 Age of fleet
Age of fleet by value (EUR m) Tallink Grupp ships age (value-weighted average): Tallink + Silja core fleet – 6.7 years 20+ years Superfast fleet – 7.6 years 62 11-20 years Ships out of core operations and 344 cargo vessels – 21 years
1-5 years 895 World-wide ships age*: 6-10 years Passenger ships – 21.3 years 424 Cargo passenger - 23.3 years
* - source: Institute of Shipping Economics and Logistics, 2008
22 Ownership structure
Shareholders of AS Tallink Grupp Ten largest shareholders on 11.01.2010 %
Infortar 40.0% Nordea Bank Finland Plc / Non-resident legal entities 10.2% ING Luxembourg S.A. 10.1% Citigroup Venture Capital International Jersey Ltd 7.3% Infortar State Street Bank / Trust Omnibus Account A Fund No.OM01 3.3% 40% Skandinaviska Enskilda Banken AB Clients 2.8% 2.5% Infortar AS JP Morgan Chase Bank / London Client's account 39% Firebird Republics Fund Ltd 1.2% BNYM / ING BANK SLASKI AC LM AKCJI FIO 1.2% Firebird Avora Fund Ltd 1.1% Top 10 shareholders Institutional investors Retail investors
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