Double Double in Ten I NVESTOR P RESENTATION A Strategic Review - - PowerPoint PPT Presentation

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A LGOMA C ENTRAL C ORPORATION Double Double in Ten I NVESTOR P RESENTATION A Strategic Review Algoma Central Corporation J ANUARY 2018 Board Of Directors Sept 9th, 2015 For orward rd Lo Look oking ng St Statem ements ents Certain

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SLIDE 1

Double Double in Ten

A Strategic Review

Algoma Central Corporation

Board Of Directors Sept 9th, 2015

ALGOMA CENTRAL CORPORATION INVESTOR PRESENTATION JANUARY 2018

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SLIDE 2

Short Sea Shipping is OUR BUSINESS

2

Certain statements in this document about our current and future plans, expectations and intentions, results, levels of activity, performance, goals or achievements or any other future events or developments constitute forward-looking statements. Forward-looking statements are based on estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate and reasonable in the circumstances, but there can be no assurance that such estimates and assumptions will prove to be correct. Many factors could cause our actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements. The purpose of the forward-looking statements is to provide the reader with a description of management's expectations regarding the Company's financial performance and may not be appropriate for other purposes; readers should not place undue reliance on forward-looking statements made herein, recognizing that all such forward looking information is based on assumptions about the future that may not ultimately be born out and are subject to many risks and uncertainties, including those listed above. Furthermore, unless otherwise stated, the forward-looking statements contained in this document are made as of the date of hereof (unless stated to be as of an earlier date), and we have no intention and undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement. Management approved the forward looking financial information as of January 5, 2018. Certain figures included herein are non-GAAP measures. Please see our MD&A for further discussion of Non-GAAP disclosures.

ALL AMOUN OUNTS IN C$ MILLION IONS EXC XCEPT EPT PER R SHARE RE AMOUN OUNTS, , UNLES ESS NOTED ED

For

  • rward

rd Lo Look

  • king

ng St Statem ements ents

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SLIDE 3

Short Sea Shipping is OUR BUSINESS

3

  • The largest owner and operator of dry and liquid bulk carriers on the Great Lakes

– St. Lawrence Waterway.

  • A Canadian shipowner since 1900 – 60 vessels globally
  • 2,000 employees
  • Trailing twelve months:
  • Revenue
  • $443 million
  • EBITDA - $105 million
  • Listed on TSX – ALC
  • Current quarters dividend – 9¢
  • Shares outstanding – 38,552,315
  • Insider interest – ~78%

Algom

  • ma

a Cent ntral ral Corpo

  • rpora

ration tion

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Short Sea Shipping is OUR BUSINESS

4

Growi wing g our po posit itio ion as t the e carri rier er of choice

  • ice for

r bul ulk k commo mmodi diti ties es in in the e Grea eat Lak akes es – St. Lawren ence ce Water erway y to bec ecom

  • me

e a lea eade der in in short t sea ea ship ippi ping gl g globall lly. Vision

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Short Sea Shipping is OUR BUSINESS

5

Cont ntinu inuati tion n of Great at Lakes es dry-bu bulk lk fl fleet eet renewal al prog rogram: ram:

  • 2 new vess

ssels s added d to opera rati tion

  • ns:

s:

  • Algoma Strongfield (Gearless Bulker)
  • Algoma Niagara (Belt Self-Unloader)
  • Took deliver

ery of the Algoma ma Innovator

  • r from the Uljani

nik k d.d.

  • d. shipya

yard d in Croati tia –will join domestic estic fleet t in March. ch.

  • Ac

Acquired ired four river-cla class ss vess ssels s from America ican Steamship mship Compa pany y at year end.

Hi Highl hligh ghts ts of

  • f 2017
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Short Sea Shipping is OUR BUSINESS

6

Expansion of Global Short Sea Shipping:

  • Ex

Expande nded d ceme ment nt fleet t opera erati ting ng un under der NovaAlgom aAlgoma Cemen ement t Carrier iers s (NACC CC)

− Fleet now at 11 operating and 2 under development − Includes vessels chartered to two Canadian producers

  • Acqui

uired red a 50% intere erest st in a comme mmercia cial l platform

  • rm and

d fleet t focused ed on sh shor

  • rt-sea mini

i bul ulker er mark rket t to creat ate e NovaAlgom goma Shor

  • rt-Se

Sea Carrier iers s (NASC ASC)

− Owned fleet of 15 vessels and overall fleet of 60 vessels

Hi Highligh ghts ts of 2017

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Short Sea Shipping is OUR BUSINESS

7

  • Sale proceeds of $104 million to date.
  • Station Mall in Sault Ste. Marie will be placed on

the market in the future.

  • Strengthens balance sheet and provides funds for

growth opportunities.

Dives vestiture titure of

  • f R

Real Estat ate

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SLIDE 8

Short Sea Shipping is OUR BUSINESS

8

Inves vestme tment nt The hesis

Leader in Our Markets – This is Sustainable History of Performance in a Variety of Markets Diversified, Dependable Customer Base Well Capitalized to Pursue Growth Strong History of Dividends Investing in Future Opportunities Internationally

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Short Sea Shipping is OUR BUSINESS

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Gro rowing wing Cash h Fl Flow w and nd Earnings rnings

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Short Sea Shipping is OUR BUSINESS

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Diver versif ified d Busines iness

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Short Sea Shipping is OUR BUSINESS

11 11

Gro rowing wing from rom a St Strong rong Fi Fina nancial ncial Base

Current Yield - 2.3%

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Short Sea Shipping is OUR BUSINESS

12 12

  • Continuat

ntinuation ion of Great at Lakes es dry-bulk ulk fleet t rene newal l progr gram am

  • Ex

Expansion nsion into

  • globa

bal l shor

  • rt

t sea shipping ing

202 025 5 St Strat rategic gic Vision

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Short Sea Shipping is OUR BUSINESS

13 13

Buildi lding ng a You

  • ung

nger, Mor

  • re Effi

ficie cient nt Fl Fleet et

5 10 15 20 25 30 35 40 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

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Short Sea Shipping is OUR BUSINESS

14 14

  • Trip times

es

− Shorter than international trips with less time in open waters

  • Load / Un

Unload ad

− More material to overall voyage duration − Port delays can have significant impact on voyage P&L − Integration with customers' supply chains

  • Feeder

er service ice for export t – bound nd products cts

  • Trans-ship

ippi ping ng

The he Gre reat t La Lakes Sho hort-Sea Sea Shi hippi pping ng Com

  • mpa

pany

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Short Sea Shipping is OUR BUSINESS

15 15

Grow w into

  • interna

ernati tion

  • nal

al shor

  • rt-se

sea mark rkets ts where ere we can add value. ue.

Our r St Stra rategy egy Goi

  • ing

ng For

  • rward

rd

Target t Mark rket t Fea eature tures: s:

  • Opportunities for self-unloader or specialized applications to serve as

feeder services between shallow draft ports and major seaports.

  • Opportunities to consolidate small regional operators.
  • Significant economic growth combined with growth in urbanization and

infrastructure development.

  • Acceptable legal, regulatory, financial and labour market frameworks for

local investments and foreign control.

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SLIDE 16

Short Sea Shipping is OUR BUSINESS

16 16

World Trade – Global Marine Trends 2030 Set etting ing the he Sc Scene ne

10 10 Billion ion Tonnes es 20 20 Billion ion Tonnes es

Global Trade will at least double in the next 20 Years

2010 2030

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Short Sea Shipping is OUR BUSINESS

17 17

Main n Drivers:

  • Demograph

aphy (Growing Population, Urbanization)

  • Rise

se of Trade de Blocks ks (EU, NAFTA, ASEAN, UNASUR)

  • Geograph

phy y (Europe, Oceania, S.E. Asia)

  • Lack of Infrastructur

frastructure (India, Indonesia, Philippines, S.America, Africa)

  • Envi

vironm

  • nment

ent (“Green” Transport) in Developed Economies

  • Techno

nology gy (unmanned ships, faster cargo handling, improved security)

Sho hort Sea Shi hippi pping ng to Gro

  • Grow

w Faster

Total

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Short Sea Shipping is OUR BUSINESS

18 18

Gro rowing wing Thro hrough ugh Par Partner tnership hip

NovaAlgom Algoma Cement ment Carrier rriers s (NACC CC):

  • Pneumat

matic ic cemen ment t carriers s servicing cing glob

  • bal manuf

ufact acturers ers

  • Typicall

cally time e charter er based sed and under long term contracts tracts to suppo port t singl gle e market et

NovaAlgoma Algoma Shor

  • rt-Sea

ea Carrier rriers (NASC SC):

  • Leverage client relationships
  • Leverage existing business

contacts /partnerships

  • Leverage access to capital
  • Establish presence in growth

markets

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Short Sea Shipping is OUR BUSINESS

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  • Total cement carrier fleet (>2,000dwt): 320 vessel
  • Average fleet age: 25 year
  • Average age of scrapping: 33 years

Aging ng Globa bal Cement Fl Fleet et

Illustrative Vessel in Global Fleet NACC Star in Nice, France

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SLIDE 20

20 20

NA NACC is No Now # w #2 Globa ball lly

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21 21

Strong

  • ng Global

bal Footp tprin int

NACC QUEBEC NACC PANAREA NACC STAR NACC VIVARA NACC PROCIDA NACC VEGA NACC TORONTO NACC POROS NACC CAPRI NACC ITACA NACC ALICUDI NACC NAPOLI NACC VALBELLA

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Short Sea Shipping is OUR BUSINESS

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Gro rowing wing Throug rough Par Partner tnership ip

NovaAlgom Algoma Cement ment Carrier rriers s (NACC CC):

  • Pneumat

matic ic cemen ment t carriers s servicing cing glob

  • bal manuf

ufact acturers ers

  • Typicall

cally time e charter er based sed and under long term contracts tracts to suppo port t singl gle e market et

NovaAlgoma Algoma Shor

  • rt-Sea

ea Carrier rriers (NASC SC):

  • Leverage

age clien ent t relati tionshi

  • nships

ps

  • Leverage

age existin sting g busi sine ness ss conta tacts cts /partn tner ershi ships ps

  • Leverage

age access cess to capit ital al

  • Estab

ablish ish presen ence ce in growth th markets ts

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SLIDE 23

23 23

Growi wing ng Global bal Footpri tprint nt

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Short Sea Shipping is OUR BUSINESS

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  • Algoma and Nova Marine will focus attention on

growing the organizations’ strengths and capabilities

  • Establish dedicated staff and offices to lead market

development

  • Short-term, the focus for NASC is the Caribbean and

for NACC it is North and South America.

  • An Asian market plan is being developed jointly.

No NovaAlgo lgoma ma - The Ne Next Two Years

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Short Sea Shipping is OUR BUSINESS

25 25

Ana nalyst lyst Cover verage age

  • David

d Tyerman, erman, Corma rmark k Securi riti ties es Inc. c.

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Double Double in Ten

A Strategic Review

Algoma Central Corporation

Board Of Directors Sept 9th, 2015

QUESTIONS?