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

Finnlines Plc Annual General Meeting 14.4.2015 Tom Pippingsköld, CFO

The economic value of the EU Shipping Industry

The Group’s main figures in 2014  120 ports served in 47 countries in 4 continents  18 car/container terminals, total 4,5 million m2  4 owned logistic companies  65 worldwide branches  100 vessels  Number of employees: 10,000 employees

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.

47

countries

100

vessels

1

the largest in Europe in combined ro- pax and ro-ro segment

CONNECTING THE WORLD

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.

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. Date Area % In force (as of 1.1.2015) Emissions Control Areas (Baltic, North Sea, English Channel) 0.1 In force All EU ports (when the ship is berthed for at least 2 hours) 0.1 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.

MARPOL regulation, sulphur limits

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

EUR 1 Billion Capex Programme 2006–2015

• 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.

Finnlady, Europalink, Nordlink Scrubbers & reblading Finntide & Finnwave Finnsky & Finnsun Finnbreeze & Finnsea Vuosaari Harbour Finnstar & Finnmaid Finnmill, Finnpulp, Finnkraft, Finnhawk

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

1−5 years 6−10 years 11−20 years

World-wide ships age*: Ferries: 24.1 years / Cruise: 2.5 years

* source: ShipPax Market:12 Statistics, 2012

New ro-ro vessels Star-class ro-pax vessels & ro-ro vessels Hansa-class ro-pax vessels & ro-ro vessels

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.

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

Finnlines Fleet Evolution: Long-Term Strategic Decision

FLEET

10 20 30 40 50 2008 2015

Finnlines fleet evolution 2008–2015 Owned Chartered in

Average unit: 3,200 lm Average unit: 2,000 lm

Finnlines Group Operating Expenses

540 587 591 551 481 100 200 300 400 500 600 700 2010 2011 2012 2013 2014

MEUR

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

to measure in units 2,388,000 2,248,000 2,102,000

Passengers transported

561,000 556,000 598,000

Finnlines Group Revenue (total and external sales of the segment)

MEUR

513 562 575 539 517 48 43 34 25 15 100 200 300 400 500 600 700 2010 2011 2012 2013 2014

Shipping and sea transport services Port operations

561 609 564 605 533

Group Revenue and Group Result for the Reporting Period

561.1 605.2 609.3 563.6 532.9 2.2

• 2.5
• 0.1

6.0 41.7

• 50

50 150 250 350 450 550 650 2010 2011 2012 2013 2014 Revenue Result for the reporting period

MEUR

Finnlines Group Result Before Interest and Taxes (EBIT) Total and Per Segment

MEUR 39.3 30.8 34.0 27.9 61.6

• 13.7
• 9.8
• 10.4
• 9.8
• 3.1
• 20
• 10

10 20 30 40 50 60 70 2010 2011 2012 2013 2014

Shipping and Sea Transport Services Port Operations 21.0 23.7 18.1 25.6 58.6

Finnlines Group Result for the Reporting Period, Quarterly

• 4.6
• 5.8
• 10.9

0.3 1.2 5.7 0.9 14.7 4.0 5.3 6.1 18.1

• 3.1
• 5.3

9.9 8.5

• 15
• 10
• 5

5 10 15 20 2011 2012 2013 2014 Q1 Q2 Q3 Q4

MEUR

Finnlines Group Total Capital Expenditure

MEUR 82.2 64.4 67.1 10.1 36.6

10 20 30 40 50 60 70 80 90 2010 2011 2012 2013 2014

Finnlines Group Interest-bearing Liabilities* and Shareholders Equity

MEUR 853 855 879 671 553 429 428 430 463 504

100 200 300 400 500 600 700 800 900 1000 2010 2011 2012 2013 2014

Interest-bearing liabilities Shareholders equity attributable to equity holders of the parent * Excluding leasing liabilities

Finnlines Group Equity Ratio, %

%

29.1 29.1 29.1 35.7 41.7

5 10 15 20 25 30 35 40 45 2010 2011 2012 2013 2014

Finnlines Group Net Debt/EBITDA Development

Net debt/EBITDA

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

EUR million

EBITDA and Equity Ratio

37.4 85.9 84.5 89.8 83.7 115.4 29.4 29.1 29.1 29.1 35.7 41.7

5 10 15 20 25 30 35 40 45 20 40 60 80 100 120 140

2009 2010 2011 2012 2013 2014

EBITDA Equity ratio

MEUR %

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

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 lines, MEUR 123.1 65.9 Assets total, MEUR 1,210.5 1,298.5 Market capitalisation at 31 Dec., MEUR 824.1 386.3