Tallink . Tallink is the leading European provider of leisure and business travel and sea transportation services in the Baltic Sea region . Fleet of 19 vessels . Operating five hotels . Revenue EUR 944 million . EUR 1.7 billion asset base . 6 799 employees . Over 9 million passengers annually . Over 280 thousand cargo units annually . Listed on Nasdaq OMX Baltic – TAL1T Over 50 years of operating and cruising experience 2 Tallink’s business model Product offering 1-2 overnight cruises & passenger transportation Conferences Revenue structure 2012 Other 49,6% 9% Cargo 24,9% 11% On-board Tax-Free Shopping City break Restaurant & shop sales 54% Ticket sales Hotel & travel packages Cargo Transportation 26% 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 position in the global ferry market The World's top Duty free & Travel Retail Shops 2011 Ranking by actual and estimated retail sales in US$ millions. Rank Company Gross tons 1 Stena Line 752 081 Rank Location Remarks 2 Grimaldi Lines 740 934 Sales> US$ 1,000.0 million 3 Tallink 512 078 1 Seoul - Incheon Int'l Airport, South Korea AIRPORT SHOPS 4 P&O Ferries 436 092 2 Dubai - Dubai International Airport, U.A.E. AIRPORT SHOPS 5 Scandlines 363 341 3 Singapore - Changi Airport AIRPORT SHOPS 4 London - Heathrow Airport, UK AIRPORT SHOPS Sales> US$ 600.0 million Rank Company Beds 5 Hong Kong - Hong Kong International Airport AIRPORT SHOPS 1 Tallink 24 262 6 Bangkok - Suvarnabhumi Airport, Thailand AIRPORT SHOPS 2 Stena Line 16 502 7 Frankfurt – Frankfurt-Main Airport, Germany AIRPORT SHOPS 3 Viking Line 16 192 Sales> US$ 500.0 million 4 Grimaldi 15 867 8 Paris - Charles de Gaulle Airport, France AIRPORT SHOPS 5 Tirrenia 13 338 9 Tallink FERRY SHOPS 10 Beijing – Capital Airport, China P.R. AIRPORT SHOPS mEUR 11 Amsterdam - Schipol Airport, Netherlands AIRPORT SHOPS Rank Company Revenue 12 Sao Paulo - Guarulhos Int’l Airport, Brazil AIRPORT SHOPS 1 DFDS Group 1 561 Sales> US$ 300.0 million AIRPORT SHOPS 2 Stena Line 1 084 13 Oslo - Gardermoen Airport, Norway AIRPORT SHOPS 3 Tallink 908 14 Taipei - Taoyuan International Airport, Taiwan AIRPORT SHOPS 4 Scandlines 611 15 London - Gatwick Airport, UK AIRPORT SHOPS 5 Finnlines 605 16 Tel Aviv – Ben Gurion Int’l Airport, Israel AIRPORT SHOPS 17 Shanghai – Pudong Airport, China P.R. AIRPORT SHOPS Source: Generation Research 2012 Data: Ro/pax / ferries above 1,000 GT Source: ShipPax MARKET:12 5 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 - Manage the 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 6 Tallink’s passenger market share is 49% of the Northern Baltic Sea Revenue by routes 2012 Other 11% Lat-Swe 7% Fin-Swe 38% Est-Swe 12% Est-Fin 32% (944 MEUR) Passengers 2012 RUS Other LIT 4% 7% 3% LAT 4% Swedish Finnish 14% 47% Estonian Northern Baltic passenger market – 19 million passengers 21% (9.3M) 7 We are targeting new customers from a wider country base More than 10% of our passengers come from outside of our home markets 8 Market shares Passenger operations Tallinn - Helsinki Helsinki - Stockholm 5% 7% 8% 5% 7% 4% 7% 14% 13% 13% 12% 13% 10% 25% 19% 18% 13% 47% 47% 47% 47% 46% 45% 15% 15% 24% 25% 25% 24% 14% 15% 12% 22% 19% 19% 15% 15% 16% 58% 59% 50% 55% 57% 53% 53% 53% 53% 54% 55% 38% 42% 42% 44% 45% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 Tallink Viking Line Eckerö Line SuperSeaCat Nordic Jetline Linda Line Turku - Stockholm Riga - Stockholm Tallinn - Stockholm 47% 48% 46% 43% 43% 42% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 53% 52% 54% 57% 57% 58% 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 9 Highlights and milestones OPERATIONS Finland-Sweden Riga-Stockholm St. Petersburg Finland-Germany Estonia-Sweden Estonia-Finland Hotel operations Newbuilt vessels € 1020 m Silja Line Baltic Queen Acquisitions € 780 m Superfast ferries Baltic Princess Rights issue Superstar IPO Private Placement Star Galaxy Victoria I Romantika 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 10 Tallink’s performance after the management buyout € passengersmillon million million 1000 10 944 908 900 9 814 800 786 792 761 8 700 7 600 500 6 405 400 5 300 260 218 4 191 200 178 153 130 107 117 3 100 0 2 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Revenue EBITDA Passengers 11 Unrivalled suite of competitive advantages 1 Modern fleet 7 2 Extensive Sales Network • 11 core vessels have an average Extensive route network age of 9.5 years • 21 own sales offices • Ice class vessels • Variety of short cruises between key cities • Network of >1,800 travel agents and • Luxurious on-board experience, e.g. tour operators worldwide spacious shopping areas • Optimised schedules with frequent • Growing online presence and call and reliable departures all year centres • Established relationships with port authorities 6 3 Comprehensive offer 1 Strong quality brands • Varied on-board experience • Silja Line and Tallink are the most • Travel packages and excursions recognised cruise brands in the • Addressing all budget ranges and Northern Baltic Sea Region customer preferences 1 1 1 Sweden Estonia Finland 49% Market share of the Northern Baltic • They are associated with a quality Sea Region passenger market customer experience 5 4 Loyal customer base High safety and environmental standards • 9m passengers in 2012 • We proactively seek compliance • 1.5 million Club One card holders with the highest standards growing at 11% in 2012 • In 2012, only 1 of the over 9000 • Every third passenger is a club one scheduled trips was cancelled for member. technical reasons 12 Today’s focus - Initiatives driving on-board revenue Customer Experience Active Improve Shop/ Communication On-Board Advertising Bar Display of Price Differentials On-board Campaigns Investment in in Conjunction with On-board Events Facilities Suppliers Employees Mystery Shopping/ Performance Bonus On-going Customer [Picture] Training Satisfaction for Service Crew Measurement Small Details Count 13 Today’s focus - New consumer web Booking entry points 14 Today’s focus - New booking engine 15 Today’s focus - Mobile platform development 16 Results quarterly seasonality breakdown Passengers (millions) Cargo (th. units) 10,0 350 9.1 9.3 9,0 8.4 300 8.1 2,1 2,1 283 284 8,0 Q4 252 258 2,8 250 7,0 2,7 71 70 59 67 6,0 2,8 2,7 200 Q3 5,0 70 69 1,8 2,2 60 69 4,0 150 2,3 2,4 3,0 72 Q2 1,8 1,6 100 57 54 76 2,0 2,0 2,0 50 1,0 1,8 1,8 1,9 76 68 67 73 67 Q1 0,0 0 08/09 09/10 2011 2012 2013 08/09 09/10 2011 2012 2013 Revenue (EUR millions) EBITDA (EUR millions) 944 908 163 166 160 814 223 800 792 214 145 31 32 Q4 133 255 272 120 600 Q3 272 282 78 74 78 77 176 202 80 400 Q2 238 245 167 158 14 30 200 40 15 10 42 46 Q1 194 194 191 181 183 30 27 11 0 0 10 7 17 08/09 09/10 2011 2012 2013 08/09 09/10 2011 2012 2013 Change of the financial year period. The dynamics of high seasonality on the profit level Net result by quarters 60 2011 net profit 38M 2012 net profit 56M 2013 50 EUR EUR million 40 30 50 20 40 10 20 14 1 6 0 -10 -17 -19 -18 -20 -30 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Typical to the Tallink business model is that most of the result is made in the summer, the high season. 18 Consolidated Income Statement (in EUR million) 2011(2) 2012 2012 Q1 2013 Q1 Sales 891 944 194 191 Cost of sales (1) (691) (743) (175) (174) Marketing, general & admin (1) (100) (109) (27) (27) EBITDA 163 166 10 7 Margin (%) 17.9% 17.5% 5.3% 3.7% Net Profit 38 56 (19) (18) EPS 0.06 0.08 (0.03) (0.03) Notes: (1) Includes depreciation and amortization (2) Pro forma, due to the change of the financial year period. 19 Costs breakdown 2012 Jan-Dec share % Depreciation Net finance cost Cost of goods 24% 213 671 and 5% amortisation Other costs 8% Fuel cost 16% 143 934 2% Staff costs 15% 131 583 Ship operating Cost of goods Marketing & Admin (1) 11% 101 865 expenses 24% 7% Port & stevedoring 10% 93 073 Port & Ship operating expenses 8% 65 944 stevedoring Fuel 10% 16% Other costs 3% 31 091 Total costs from operations 86% 781 160 Marketing & Staff costs Admin 15% 11% Depreciation and amortisation 8% 70 996 Net finance cost 5% 40 980 Total costs 100% 893 137 1) Amortisation and depreciation excluded 20 Consolidated Cash Flow Statement (in EUR million) 2011(1) 2012 2012 Q1 2013 Q1 Operating cash flow 160 163 8 6 Capital expenditure (9) (9) 0 (3) Asset disposal 0 0 0 0 Free cash flow 151 154 8 3 Debt financing (76) (119) (24) 23 Interests & other financial items (44) (45) (10) (8) Change in cash 31 (10) (26) 18 In July 2013 Tallink will pay a dividend of EUR 33.5 million, EUR 0.05 per share.