Finnlines Plc Annual General Meeting 14.4.2015 Tom Pippingskld, - PowerPoint PPT Presentation

Finnlines Plc Annual General Meeting 14.4.2015 Tom Pippingsköld, CFO 1

The economic value of the EU Shipping Industry 2

Grimaldi Group – Worldwide Shipping and Logistic With experience dating back to 1947, the Grimaldi Group is a multinational logistics Group specialised in the operation of roll-on/roll-off vessels, car carriers and ferries. It is a dedicated supplier of integrated logistics services based on maritime transport to the world’s major vehicle manufacturers. Through its maritime services, the Group transports cars, any type of rolling cargo, containers, palletised/unitised cargo and passengers. The Group’s main figures in 2014  120 ports served in 47 countries in 4 continents  18 car/container terminals, total 4,5 million m 2  4 owned logistic companies  65 worldwide branches  100 vessels  Number of employees: 10,000 employees 3

CONNECTING THE WORLD 47 100 1 countries vessels the largest in Europe in combined ro- pax and ro-ro segment 4

Finnlines Group  Finnlines is a leading shipping operator of ro- ro and ro-pax services in the Baltic Sea and the North Sea.  The Company is listed on the NASDAQ OMX Helsinki Ltd and is a part of the Grimaldi Group.  Grimaldi Group provides Finnlines with essential expertise and support. As a result of this strong affiliation, Finnlines is able to offer liner services to and from any destination in the Mediterranean and West Africa, as well as the Atlantic coast of North and South America.  In addition to providing sea transport services, Finnlines provides port services in Helsinki and Turku. 5

Finnlines and MARPOL Regulation The MARPOL 73/78 Convention contains regulations on the disposal of waste and sewage into sea, and on the prevention of air emissions. Finnlines operates mainly in the Emissions Control Areas, i.e. the Baltic Sea, North Sea and English Channel where the emission regulations are stricter than globally. MARPOL regulation, sulphur limits Date Area % In force Emissions Control Areas 0.1 (as of 1.1.2015) (Baltic, North Sea, English Channel) In force All EU ports 0.1 (when the ship is berthed for at least 2 hours) In force Globally 3.5 1.1.2020 * Globally 0.5 * The availability of low-sulphur fuel will be reassessed by 2018 and if the availability is poor, the entry-into-force of the 0.5% limit can be postponed until 2025. 6

EUR 1 Billion Capex Programme 2006 – 2015 Scrubbers & reblading Finntide & Finnwave Finnsky & Finnsun Finnbreeze & Finnsea Vuosaari Harbour Finnmill, Finnpulp, Finnkraft, Finnhawk Finnlady, Europalink, Nordlink Finnstar & Finnmaid 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 • 5 ro-pax vessels ordered in 2003 – 2004. The total cost of investment some EUR 500 million. • 6 ro-ro vessels ordered in 2007. 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 2008. Finnlines invested on the project nearly EUR 100 million. • Finnlines ordered scrubber system installations and propulsion systems in 2014. These investments will amount to EUR 65 million and an additional EUR 35 million is needed to complete the scrubber investments for the whole Finnlines fleet in 2015. 7

Finnlines Group has a Young Fleet: Average Age is 10 Years The average age of fleet was about 10 years in 2014. Age of fleet New ro-ro vessels 1−5 years Hansa-class ro-pax vessels & ro-ro vessels 6−10 years Star-class ro-pax 11−20 years vessels & ro-ro vessels World-wide ships age*: Ferries: 24.1 years / Cruise: 2.5 years * source: ShipPax Market:12 Statistics, 2012 8

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.  Fuel consumption has been reduced by over 16% in past three years  Personnel in 2009 an average of 2,234 persons / in 2014 an average of 1,701 persons / end of December 2014 1,635 persons. Higher cash-flow generation has enabled the reduction of interest- bearing debt from 2012’s EUR 879 million to EUR 553 million at 31 December 2014. 9

Optimisation – Key to Operational Cost Reduction  Targeted optimisation of the existing tonnage  Cutting of the vessel overcapacity by selling 5 vessels, and purchasing new more fitted to our operations  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 10

Finnlines Fleet Evolution: Long-Term Strategic Decision FLEET Finnlines fleet evolution 2008 – 2015 50 Average unit: 2,000 lm 40 30 Average unit: 3,200 lm Owned 20 Chartered in 10 0 2008 2015 11

Finnlines Group Operating Expenses MEUR 700 600 591 587 551 500 540 481 400 300 200 100 0 2010 2011 2012 2013 2014 12

Finnlines Group Key Figures 2014 2013 2012 Group Revenue (EUR million) 532.9 563.6 609.3 Average number of employees 1,701 1,861 2,023 • Average number of employees on shore 759 918 957 • Average number of employees at sea 942 943 1,066 Fleet • Average number of vessels operated 24 24 24 • Number of Finnlines’ owned vessels 21 22 25 • Average age of Finnlines’ own fleet (years) 10 10 10 • Total capacity of the fleet in lane meters 75,400 75,400 80,000 Cargo volumes transported • Units 638,000 632,000 628,000 • Cars (not including cars of passengers) 99,000 66,000 72,000 • Tons of freight not possible 2,388,000 2,248,000 2,102,000 to measure in units Passengers transported 561,000 556,000 598,000 13

Finnlines Group Revenue (total and external sales of the segment) MEUR 609 700 605 564 533 561 34 600 43 25 15 48 575 562 500 539 517 513 400 300 200 100 0 2010 2011 2012 2013 2014 Shipping and sea transport services Port operations 14

Group Revenue and Group Result for the Reporting Period MEUR 650 609.3 605.2 563.6 561.1 532.9 550 450 350 250 150 41.7 6.0 50 2.2 -0.1 -2.5 -50 2010 2011 2012 2013 2014 Revenue Result for the reporting period 15

Finnlines Group Result Before Interest and Taxes (EBIT) Total and Per Segment MEUR 70 58.6 60 61.6 50 25.6 23.7 40 21.0 39.3 18.1 30 34.0 30.8 27.9 20 10 0 -9.8 -9.8 -3.1 -10.4 -13.7 -10 -20 2010 2011 2012 2013 2014 Shipping and Sea Transport Services Port Operations 16

Finnlines Group Result for the Reporting Period, Quarterly MEUR 20 18.1 14.7 15 9.9 8.5 10 6.1 5.7 5.3 4.0 5 1.2 0.9 0.3 0 -5 -3.1 -4.6 -5.3 -5.8 -10 -10.9 -15 2011 2012 2013 2014 Q1 Q2 Q3 Q4 17

Finnlines Group Total Capital Expenditure MEUR 90 80 82.2 70 67.1 60 64.4 50 40 36.6 30 20 10 10.1 0 2010 2011 2012 2013 2014 18

Finnlines Group Interest-bearing Liabilities* and Shareholders Equity MEUR 1000 879 853 855 900 800 671 700 553 600 504 463 500 430 429 428 400 300 200 100 0 2010 2011 2012 2013 2014 Interest-bearing liabilities Shareholders equity attributable to equity holders of the parent * Excluding leasing liabilities 19

Finnlines Group Equity Ratio, % % 45 40 41.7 35 35.7 30 29.1 29.1 29.1 25 20 15 10 5 0 2010 2011 2012 2013 2014 20

Finnlines Group Net Debt/EBITDA Development 1000 25 900 22.5 800 20 Net debt/EBITDA 700 EUR million 600 15 500 9.9 10.1 9.9 400 10 9.2 8.0 300 4.8 200 5 100 0 0 2008 2009 2010 2011 2012 2013 2014 Net debt Net debt/EBITDA 21

EBITDA and Equity Ratio MEUR % 140 45 41.7 40 120 35.7 35 115.4 100 29.4 29.1 29.1 29.1 30 89.8 80 85.9 25 84.5 83.7 EBITDA 20 60 Equity ratio 15 40 10 37.4 20 5 0 0 2009 2010 2011 2012 2013 2014 22

Shareholder Value Increased by 113 per cent 2014 was a historic year for Finnlines:  Result for the reporting period EUR 41.7 (6.0) million  Earnings per share (EPS) were EUR 0.81 (0.12)  Through the improved financial and operational performance Finnlines share price increased by over 113 per cent  The Company’s market capitalisation increased to EUR 824.1 (386.3) million 23

Finnlines Group Key Figures 2014 2013 EBITDA, MEUR 115.4 83.7 Result for the period, MEUR 41.7 6.0 EPS, EUR 0.81 0.12 Interest-bearing debt, MEUR 552.5 671.3 Equity ratio, % 41.7 35.7 Cash & Committed credit 123.1 65.9 lines, MEUR Assets total, MEUR 1,210.5 1,298.5 Market capitalisation at 31 Dec., MEUR 824.1 386.3 24

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