Finnlines Plc Annual General Meeting Tom Pippingsköld, CFO

Transcription

1 Finnlines Plc Annual General Meeting Tom Pippingsköld, CFO 1

2 Global Shipping Segments 1 Jan 2015 Source: 2

3 General trends in shipping are also in the core of Finnlines Safety Safety at sea Crime prevention Training of personnel Environment Development of vessel technology Questioning traditional transport chain models Environmental factors also influence customers choices Customers Tailor-made solutions From industry-specific to locally arranged transportation solutions Development of information systems and data transfer Ever growing importance of reliability and accuracy 3

4 Breaking records against all odds 4

5 Finnlines Group Result in 2015 by Quarter In 2015 the best ever operative result in the company history and record breaking quarters throughout the year Finnlines Group Result for the Reporting Period, Quarterly MEUR Q1 Q2 Q3 Q

6 Finnlines Group Consolidated Income Statement, IFRS, EUR 1, Revenue 120, , , ,889 Other income from operations 558 3,719 1,810 6,776 Materials and services -34,803-42, , ,445 Personnel expenses -21,517-21,268-84,186-88,418 Depreciation, amortisation and impairment losses -14,835-13,459-56,590-56,843 Other operating expenses -33,000-35, , ,396 Total operating expenses -104, , , ,102 Result before interest and taxes (EBIT) 17,298 10,451 70,284 58,563 Financial income Financial expenses -4,099-5,231-18,064-22,412 Result before taxes (EBT) 13,586 5,361 53,153 36,634 Income taxes 2,146 3,169 3,675 5,079 Result for the reporting period 15,732 8,530 56,829 41,713 6

7 Finnlines Group Balance Sheet, IFRS 31 Dec 2015 EUR 1, Dec Dec 2014 ASSETS Non-current assets Property, plant and equipment 997, ,183 Goodwill 105, ,644 Intangible assets 3,758 5,500 Other financial assets 4,576 4,576 Receivables 1,258 1,434 Deferred tax assets 5,792 5,353 1,118,645 1,105,688 Current assets Inventories 4,333 5,926 Accounts receivable and other receivables 86,019 75,884 Income tax receivables Cash and cash equivalents 6,468 2,680 97,359 84,490 Non current assets held for sale 15,121 20,297 Total assets 1,231,125 1,210,475 7

8 Finnlines Group Balance Sheet 31 Dec 2015 EQUITY Equity attributable to parent company shareholders Share capital 103, ,006 Share premium account 24,525 24,525 Translation differences Fund for invested unrestricted equity 40,016 40,016 Retained earnings 393, , , ,601 Non-controlling interests Total equity 561, ,907 LIABILITIES Long-term liabilities Deferred tax liabilities 52,712 56,102 Other long-term liabilities Pension liabilities 3,919 4,705 Provisions 1,810 1,844 Loans from financial institutions 367, , , ,536 Current liabilities Accounts payable and other liabilities 59,191 71,565 Current tax liabilities Provisions Loans from financial institutions 176, , , ,685 Total liabilities 662, ,220 Liabilities related to long-term assets held for sale 7,476 8,348 Total equity and liabilities 1,231,125 1,210,475 8

9 Finnlines Group: Facts and Figures Group Revenue (EUR million) Average number of employees 1,597 1,701 1,861 2,023 Average number of employees on shore Average number of employees at sea ,066 Fleet Average number of vessels operated Number of Finnlines owned vessels Average age of Finnlines own fleet (years) Total capacity of the fleet in lane meters 73,200* 75,400 75,400 80,000 Cargo volumes transported Units 624, , , ,000 Cars (not including cars of passengers) 156,000 99,000 66,000 72,000 Tons of freight not possible to measure in units 2,032,000 2,319,000 2,248,000 2,102,000 Passengers transported 575, , , ,000 * Including the lane meters of Finncarrier and Finnmaster as of

10 Finnlines Group Result Before Interest and Taxes (EBIT) Total and Per Segment MEUR Shipping and Sea Transport Services Port Operations 10

11 EUR 100 million Environmental Technology Investment Programme 11

12 New era of environmental investments By the end of 2013, new ambitious challenges appeared on the horizon for marine operators. Sulphur Emission Control Areas (SECA) were established by international authorities in the North Sea and the Baltic, obliging all shipping operators to reduce sulphur emissions down to 0.10% from the beginning of All options for emission reductions came with a risk of failure. Despite poor data regarding both fuel price trends and technology, the decision had to be taken by the beginning of 2014 in order not to miss the supply windows dictated by the marine technology market. In order to reduce the risks of opting for an unproven technology, the CEO teamed up with the world s three biggest scrubber manufacturers, diversifying the supply risk and shortening the leadtime for the delivery of equipment. All in all, the green plan amounted to a EUR 100 million investment. This was unprecedented in Finnlines and was a clear signal within the competitive Baltic shipping market. The green campaign was achieved without neglecting the company turnaround initiated in

13 EUR 100 million Environmental Technology Investment Programme In 2014: order for exhaust gas cleaning systems (scrubbers) for 10 ro-ro vessels and 4 ro-pax vessels plus propulsion upgrading to 6 vessels Retrofits were finalised during winter/spring 2015 In March 2015: order for one additional scrubber for MS Finnmerchant The installation was finalised in September 2015 In July 2015: additional orders for exhaust gas cleaning systems for 2 more ro-ro vessels and 3 more ro-pax vessels Installations are expected to be finalised in beginning of May 2016 In August 2015: order for new propeller blades for 3 ro-pax vessels and special foul release coating (silicon paint) for 2 ro-pax vessels deployed on Sweden-Germany route The hull treatment of the ro-pax vessels was finalised in beginning of October

14 EUR 100 million Environmental Technology Investment Programme 22 Scrubber Installations 14

15 EUR 100 million Environmental Technology Investment Programme 9 Ships re-bladed & 2 re-painted 15

16 Major investments yet excellent results 16

17 Finnlines Group Total Capital Expenditure MEUR

18 Going Against the Grain At the end of 2008 the health of the world economy took a nasty turn for the worse. The worst came to the worst in the winter of 2008/2009. By the end of March 2009, the value of Finnlines shares on the Helsinki stock exchange had plunged from EUR 17 to just above EUR 4, a record low. Stormy conditions compelled the company management to take action. The company was turned upside down: every stone was turned to find new ways to cut costs, gain volume and simplify corporate structures Plans laid down by the CEO were implemented, thereby consolidating the breakeven results and simplifying the Finnlines structure. This did not occur without friction. If doing the right thing sometimes means going against the grain, then managing Finnlines in those years was a case in point. 18

19 Turnaround Programme The prudent actions taken to reduce costs and increase efficiency: Every line, every vessel, every function and every cost item have been analysed whether there is room for further lowering of costs and therefore room for further improvement in efficiency. Certain vessels have been sold to cut overcapacity and changes in fleet/routes have increased capacity utilisation. Since 2008, the Finnlines fleet s fuel consumption has decreased by almost 35 per cent. Personnel in 2009 an average of 2,234 persons / in 2015 an average of 1,597 persons / end of the year ,588 persons. Higher cash-flow generation has enabled the reduction of interest-bearing debt from 2012 s EUR 879 million to EUR million at the end of

20 Optimisation Key to Operational Cost Reduction Targeted optimisation of the existing tonnage Cutting of the vessel overcapacity Optimising the speed of the ships and technological improvements Route and trade flows planning, thereby ensuring that the ships are completely full on both legs (NB-SB, EB-WB) Personnel adjustments Use of annual profit/cash flow for capex and for reduction of interest-bearing debt Cost controlling and cost cutting 20

21 ton fuel consumed Finnlines fuel consumption % % % 21

22 Finnlines Group Operating Expenses MEUR

23 Finnlines: a true success story during the sluggish EU growth 23

24 EBITDA and Equity Ratio MEUR % EBITDA Equity ratio

25 Finnlines Group Interest-bearing Liabilities* and Shareholders Equity MEUR Interest-bearing liabilities Shareholders equity attributable to equity holders of the parent * Excluding leasing liabilities 25

26 EUR million Net debt/ebitda Finnlines Group Net Debt/EBITDA Development Net debt Net debt/ebitda

27 Finnlines Group s Key Credit Strengths (2015) Strong majority owner with proven track record in shipping Higher cash flow generation to reduce debt High EBITDA percentage Strong market share Strengthened capital structure Most modern fleet with scrubbers (IMO compatible) Strong EBITDA : EUR (115.4 in 2014) million due to efficiency improvements Higher Equity ratio 45.7 (41.7)% Finnlines fleet is young and flexible: double ramps, high range ice class and varied access to decks mean we can compete for all types of cargo. Finnlines has invested in scrubbers, new propulsion systems and special paint. Young, efficient and environmentally safe ro-pax/ro-ro vessels in the Baltic Sea. Financially strong Grimaldi Group is the biggest shareholder of Finnlines Plc. Finnlines is powering ahead after a raft of vital changes and improvements. 27

28 Creating the best value by strategic decisions and optimised solutions 28

29 EUR 1 Billion Capex Programme Scrubbers & reblading & silicon-painting Finntide & Finnwave Finnsky & Finnsun Vuosaari Harbour Finnbreeze & Finnsea Finnmill, Finnpulp, Finnkraft, Finnhawk Finnlady, Europalink, Nordlink Finnstar & Finnmaid ro-pax vessels ordered in The total cost of investment some EUR 500 million. 6 ro-ro vessels ordered in The total cost approximately EUR 240 million. 4 ro-ro vessels bought in 2008 (all before under time-charter in Finnlines traffic). Total cost EUR 121 million. Cargo port operations in Helsinki were concentrated to the new Vuosaari Harbour in the end of November Finnlines invested on the project nearly EUR 100 million. EUR 100 million Environmental Technology Investment Programme

30 Finnlines Group has a Young Fleet: Average Age is about 12 Years The average age of fleet was about 12 years in Age of fleet Hansa-class & Clipper-class vessels New ro-ro vessels 1 5 years Star-class ro-pax vessels & older ro-ro vessels 6 15 years years 30

31 Finnlines Fleet Evolution: Long-Term Strategic Decision 50 FLEET Finnlines fleet evolution Average unit: 2,000 lm Average unit: 3,200 lm Owned Chartered in 31

32 Targets need to be reset for the future. 32

33 1 The largest in Europe in combined ropax and ro-ro segment 110 Owned vessels 50 Countries 33 CONNECTING THE WORLD

34 Generating long-term shareholder value 2015 was a historic year for Finnlines: Result for the reporting period EUR 56.8 (41.7) million Earnings per share (EPS) were EUR 1.10 (0.81) The Company s market capitalisation increased to EUR (824.1) million Already in 2014 the share price increased significantly, by over 113 percent and in 2015 it increased even further with 11 per cent. 34

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