Annual General Meeting 13 June 2017
Agenda 1. Approval of the Annual Report of the financial year 2016 of AS Tallink Grupp 2. Proposal on distribution of profits 3. Extension of authorities of the members of the supervisory board 4. Appointment of an auditor for the financial year 2017 and the determination of the procedure of remuneration of an auditor 2
Tallink Grupp today Tallink Grupp today 16 ships 7 291 employees 11 in core passenger operations 2 dedicated for cargo service 3 chartered out 5 114 on the sea 552 in hotels 1 625 onshore organisation 9.5 million passengers 4.6 million 1.9 million 1.1 million 0.3 million 1.5 million other countries 48% passenger market share of the Northern Baltic Sea 3
Global position Our position in the global ferry market Operators by Gross Tons Operators by beds Rank Company Gross tons 1 Stena Line 909 412 2 Grimaldi Lines 477 667 3 Tallink Grupp 466 960 4 DFDS Seaways 412 722 5 P&O Ferries 409 659 Rank Company Beds 1 Tallink Grupp 18 963 2 Stena Line 16 847 3 Viking Line 14 026 4 Grandi Navi Veloci 13 328 5 Tirrenia 11 876 Operators by revenue (2016) Rank Company Revenue (meuro) 1 DFDS Group 1 852 2 Stena Line 1 330 3 Tallink Grupp 938 4 Viking Line 520 5 Finnlines 474 Source: ShipPax MARKET:16, company reports 4
Business environment Fundamentals for new growth Travel & leisure industry Growth from new markets globally Growth in Europe and Nordics Growth in domestic travel Demographics Ageing population more people have free time Disposable income Growth in all countries More spend devoted for free time Retail sales Modest inflation and continuous growth in total retail spending 5
External factors Land based competition New ways to spend free time New business concepts New restaurants shops etc. Direct competition Pricing Investments Geopolitical situation Free movement of travelers The number of passengers from Russia remains low The number of Asian passenges continues to grow Economy Economies recovering in the market area but unfavorable tax changes ahead 6
Strategy 7 The main goals of the strategy that is directed toward increasing Tallink s value and profitability: Increase the volumes and strengthen the market position in the region Strive for the highest level of customer satisfaction Develop a wide range of quality services for different customers and to pursue new growth opportunities Cost efficient operations Optimal debt level that allows sustainable dividends
Capital distribution Tallink Grupp has made total of EUR 121 million payments from equity to shareholders in period 2013-2016. Dividend policy The Management Board targets to distribute at least 50% of net profit, calculated over the long term, as dividends or capital repayment, taking however the Group s financial position into account. The management estimates that for the coming years the distribution per share will be at least EUR 0.02 or higher. 8
Tallink Grupp 2016 Higher passenger number and revenue Lower chartering revenues compared to last year Market share growth on routes Cruise ferry Silja Europa s return to Tallinn-Helsinki route A new logistics centre launched in Maardu, Harjumaa New passenger terminals in Stockholm and Helsinki Ships re-rerouted in December 2016 Group-wide ship renovation programme continued Tallink Grupp s passenger market share is 48% of the Northern Baltic Sea Construction of the new LNG fast ferry Megastar finalized Total of EUR 54 million distributions to shareholders 9
Results of the 2016 financial year Passengers (millions) Cargo units (thousands) +5.4% +6.5% 10
Results of the 2016 financial year Income statement 2015 2016 Revenue (EUR million) 945 938 Revenue (EUR million) -0.7% Gross profit (EUR million) 223 193 EBITDA (1) (EUR million) 181 149 Net profit/-loss (EUR million) 59 44 EPS 0.09 0.07 (1) EBITDA earnings before net financial items, share of profit of equity accounted investees, taxes, depreciaton and amortization. 11
Results of the 2016 financial year + - Revenue growth from route operations and Silja Europa returning to operations ~EUR 29 M Less fuel cost ~EUR 20 M Less financial cost ~EUR 7 M Less revenue from chartering of ships ~EUR 37 M Additional operating costs from more ships in operations and ships renovations ~EUR 32 M Superstar charter cost 12
Results of the 2016 financial year Cash flow statement (EUR million) 2015 2016 Cash flows from operating activities 192 147 Investments -44-68 Asset disposal 115 0 New loans 0 280 Redemption of loans -196-277 Dividends -13-54 Total net cash flow 17-3 Cash at the end of period 82 79 13
Results of the 2016 financial year Financial position 31.12.2015 31.12.2016 change 1500 Cash Other Liabilities Assets (EUR million) 1 539 1 539 0.0% Other Assets Intrest bearing liabilities (EUR million) 549 559 1.7% 1000 Shareholders Equity Shareholder s equity (EUR million) 824 814-1.3% 500 Ships Shareholder s equity per share (EUR) 1.23 1.21-1.3% Loans Equity ratio 54% 53% 0 Assets Liabilities & Equity 14
Shareholders equity per share 1,30 1,25 1,20 1,15 1,10 1,05 1,00 0,95 0,90 0,85 0,80 1,23 1,21 1,14 1,15 1,16 1,05 1,00 0,96 0,97 0,96 0,86 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 15
Net debt Net debt/ebitda 12 11 10,9 10 9 8 8,3 8,7 8,5 8,5 8,8 7 7,6 1200 1100 1000 900 800 Net debt EUR thousand 6 5 4 3 2 7,0 6,8 6,5 6,7 700 5,8 5,4 5,5 5,1 4,9 4,9 4,7 4,7 4,8 4,9 4,6 4,8 5,1 600 4,5 4,1 500 3,4 3,0 2,9 3,1 3,2 2,6 2,7 400 1 300 2008/2009 Q1 2009/2010 Q1 2010/2011 Q1 2010/2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 Net debt Net debt/ebitda The net debt has decreased by over EUR 700 million from the peak in 2009 to EUR 480 million. 16
Agenda 1. Approval of the Annual Report of the financial year 2016 of AS Tallink Grupp 2. Proposal on distribution of profits 3. Extension of authorities of the members of the supervisory board 4. Appointment of an auditor for the financial year 2017 and the determination of the procedure of remuneration of an auditor 17
Agenda 1. Approval of the Annual Report of the financial year 2016 of AS Tallink Grupp 2. Proposal on distribution of profits 3. Extension of authorities of the members of the supervisory board 4. Appointment of an auditor for the financial year 2017 and the determination of the procedure of remuneration of an auditor 18
New LNG fast ferry Megastar Development of the Tallinn Helsinki route Specifications Built in Meyer Turku Shipyard Gross tonnage 49 000 Length 212 meters Capacity 2,800 passengers Dual fuel engine Service speed 27 knots Financing The vessel cost is over EUR 230 million 20% was paid during the construction period 80% was financed with long term OECD-term export credit bank loan New LNG powered fast ferry for the Tallinn Helsinki Shuttle service, start of operations on 29 January 2017. 19
New LNG fast ferry Megastar Safer ship with smaller ecological footprint Technical innovations deliver improved safety, high energy efficiency and environmental savings Safe Return to Port (SRtP) compliant ship Dual fuel ship uses environmentally friendly LNG as main fuel LNG produces 25% less CO2, 85% less NOx and almost zero SOx and particles Improved ship hull hydrodynamics enable very low hull resistance and high propulsion efficiency to further minimise fuel consumption and emissions Ships Green Passport - improved waste management and recycling 20 Megastar will comply with the current and known future emission regulations for the Emission Control Areas, including the Baltic Sea.
New LNG fast ferry Megastar Ship with new services and concepts Introducing new concepts and brands Traveller Superstore expanded to 2 800 sq.m Q-shopping self-service solution New garage concept with improved shop-to-car access for shop customers Seven restaurants, cafes and bars Leveraging own brands Introducing international premium brands Four different travel classes standard Star Class upgraded Comfort Class exclusive Business Lounge a new Sitting Lounge A playroom for the kids On Megastar there is a floating department store where modern solutions make shopping a pleasure. 21
I quarter results of the 2017 financial year 1 January 31 March 2017 Q1 2016 Q1 2017 Change Number of passengers (Thousand) 1 953 1 940-0.7% Cargo Units (Thousand) 77 84 8.4% Net Sales (EUR million) 193 192-0.7% EBITDA (EUR million) 16 5-67.7% Net profit/-loss (EUR million) -12-20 -69.0% 22
The dynamics of high seasonality on the profit level Net result by quarters 2014 2015 2016 2017 EUR million 50 40 30 20 10 36 29 45 43 0-10 -23 6 8-1 -13-12 10 4-20 -20-30 Q1 Q2 Q3 Q4 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. 23
I quarter results of the 2017 financial year 1 January 31 March 2017 Q1 2016 Q1 2017 Change Cash flows from operating activities (EUR million) 17-3 Investments (EUR million) 13 204 New long term loan (EUR million) 0 184 Redemption of loans (EUR million) 15 10 Cash at the end of period (EUR million) 92 72-21.7% Net debt (as of the end of the 1st quarter) (EUR million) 472 691 46.4% 24
Cash flow in 2017 + - Cashflow from operations Credit lines Capital expenditure and maintenance Scheduled loan re-payments EUR 75 M Interest Dividends EUR 20 M 25
Dividend Proposal on distribution of profits EUR 0,1 9,3% 0,09 dividends to the shareholders 0.03 euros per share, in the total amount of 20 096 000 euros 0,08 0,07 0,06 5,8% 0,05 0,06 0,04 0,03 0,02 0,01 0,05 3,4% 0,03 3,0% 0,02 0,02 3,3% 0.03* 0 2013 2014 2015 2016 2017 Dividend Profit per share Share capital reduction Dividend yield 26
Agenda 1. Approval of the Annual Report of the financial year 2016 of AS Tallink Grupp 2. Proposal on distribution of profits 3. Extension of authorities of the members of the supervisory board 4. Appointment of an auditor for the financial year 2017 and the determination of the procedure of remuneration of an auditor 27
Agenda 1. Approval of the Annual Report of the financial year 2016 of AS Tallink Grupp 2. Proposal on distribution of profits 3. Extension of authorities of the members of the supervisory board 4. Appointment of an auditor for the financial year 2017 and the determination of the procedure of remuneration of an auditor 28