ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS MAY 4, Short Sea Shipping is OUR BUSINESS

Transcription

1 ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS MAY 4,

2 THE YEAR IN REVIEW KEN BLOCH SOERENSEN, CEO 2

3 Forward Looking Statements 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. Forwardlooking 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 May 4, Certain figures included herein are non-gaap measures. Please see our MD&A for further discussion of Non-GAAP disclosures. ALL AMOUNTS IN C$ MILLIONS EXCEPT PER SHARE AMOUNTS, UNLESS NOTED 3

4 Strong Focus on Shareholder Value $17.00 $16.00 $15.00 $14.00 $13.00 $12.00 $11.00 $ % Increase 4

5 Outperformed TSX 140% 130% 120% 110% 100% ALC TSX 90% 80% 5

6 Analyst Coverage More Expected David Tyerman, Cormark Securities Inc Anoop Prihar, GMP Securities L.P. 6

7 Additional Tools - Dividends $0.12 $0.10 $0.08 $0.06 $0.04 $0.02 $- 43% Increase 01-Mar Jun Sep Dec Mar Jun-18 7

8 2017 Business Highlights EBITDA Adjusted EPS Revenue Managed Revenue 16% 44% 15% 32% 8

9 Crew Achieved Safest Year on Record 20 Lost Time Injuries

10 Safety First First In Safety 10

11 2017 Business Highlights Continued Revenue 16% 37% 4% 961% Domestic Dry-Bulk Product Tankers Ocean Self-Unloaders Global Short Sea Shipping 11

12 A Year of Continued Prosperity 12

13 So Far So Good & Expected to Stay Domestic Dry-Bulk ahead of plan despite weather conditions. Tanker revenue remains strong and well ahead of plan. Ocean Self-Unloaders ahead of last year. Global Short Sea Shipping growth continues. 13

14 Domestic Dry-Bulk Outlook Fleet is fully booked Export ore remains strong and grain forecasts remain positive Multi-year contracts signed Overall contract renewals are longer and at higher levels 14

15 NovaAlgoma Cement Carriers Outlook Global demand for cement expected to grow 5% per annum Global infrastructure spending to reach 3.2 trillion US$ by 2030 Demand expected to outstrip supply Asia will remain driver of growth North American growth expected to be higher than average 15

16 Cement Fleet Development

17 NovaAlgoma Short Sea Carriers Outlook The momentum from 2017 continues with rates up 19% year-over-year. Insignificant order book and aging fleet bodes well for improved supply/demand balance. Vessel values already appreciated from our entry 12 months ago. 17

18 Mini-bulker Fleet Development

19 Overall Algoma Fleet Development NOW 66 Vessels Vessels Vessels 19

20 Fleet Strategy Continue our quest to be a cost leader Domestic fleet renewal continues 1. Regulatory compliance 2. Manning levels 3. Fuel efficiency 4. Maintenance and repair cost 5. Lower than planned capital costs DDB daily operating costs down 22% since 2015 World Class Organisation Training Continued focus on safety 20

21 Bright Future Ahead 21

22 FINANCIAL REVIEW PETER D. WINKLEY, CFO 22

23 Strong Fiscal 2017 Consolidated Revenues $- $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 23

24 Domestic Dry-Bulk Up 14% Domestic Dry-Bulk Revenues $- $50 $100 $150 $200 $250 $300 24

25 Volumes up 10% Domestic Dry-Bulk Volumes ,000 10,000 15,000 20,000 25,000 25

26 Driven by Iron and Steel Customers Domestic Dry-Bulk Trades in 2017 Other Agriculture Salt Iron & Steel Construction 26

27 Fleet Utilization Rises to 98% 2016 Domestic Dry-Bulk Utilization Available Days 2017 Domestic Dry-Bulk Utilization Available Days Domestic Dry-Bulk Fleet Utilization Domestic Dry-Bulk Fleet Utilization 27

28 Strong Tanker Demand Tankers Revenues $- $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 28

29 Charter Days Up Tanker Days in 2017 Chartered Days Fleet Days 29

30 Ocean Self-Unloaders Ocean Self-Unloaders $- $10 $20 $30 $40 $50 $60 $70 $80 $90 30

31 Ocean Trades Improving Ocean Trades in 2017 Gypsum 13% Other 6% Coal 32% Granite 13% Other Stone 15% Limestone 21% 31

32 Increasingly Diversified Revenues Managed Revenues: $465M 2016 $434M 2017 $575M % 12% 16% 65% 20% 15% % 2% 56% 3% 19% DDB Tankers 48% Ocean 15% Properties 15% GSS 32

33 EBITDA Growing and Diversifying $120 $100 Components of EBITDA $80 $60 $40 Global Short Sea EBITDA Real Estate EBITDA Ocean Self-Unloaders EBITDA Tankers EBITDA Domestic Dry-Bulk EBITDA $20 $

34 EBITDA Growing and Diversifying $120 $100 Components of EBITDA $80 $60 $40 Global Short Sea EBITDA Real Estate EBITDA Ocean Self-Unloaders EBITDA Tankers EBITDA Domestic Dry-Bulk EBITDA $20 $

35 EBITDA Growing and Diversifying $120 $100 Components of EBITDA $80 $60 $40 Global Short Sea EBITDA Real Estate EBITDA Ocean Self-Unloaders EBITDA Tankers EBITDA Domestic Dry-Bulk EBITDA $20 $

36 EBITDA Growing and Diversifying $120 $100 Components of EBITDA $80 $60 $40 Global Short Sea EBITDA Real Estate EBITDA Ocean Self-Unloaders EBITDA Tankers EBITDA Domestic Dry-Bulk EBITDA $20 $

37 EBITDA Growing and Diversifying $120 $100 Components of EBITDA $80 $60 $40 Global Short Sea EBITDA Real Estate EBITDA Ocean Self-Unloaders EBITDA Tankers EBITDA Domestic Dry-Bulk EBITDA $20 $

38 Profiting from Real Estate Properties Sold in Proceeds in Year - $54 million Gains in $24 million Cumulative Proceeds > $100 million 38

39 Station Mall Remains 39

40 Shoreside Restructuring Shoreside Headcount - 11 Cost - $2.5 million Annualized Savings - $3 million 40

41 2017 Earnings up 69% Net Earnings $- $10 $20 $30 $40 $50 $60 41

42 Giving Back to Shareholders $0.45 Dividends $0.40 $0.35 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $

43 Winter Season

44 Algowood - Goderich January 24 44

45 Uljanik Contracts Renegotiated 45

46 2018 First Quarter $- First Quarter Loss $(5) $(10) $(15) $(20) $(25) 46

47 Continued Strong Tanker Demand Tankers Dry-Bulk Revenues $- $5.0 $10.0 $15.0 $20.0 $

48 Tanker Earnings Recover Tankers Dry-Bulk EBITDA $(1.5) $(1.0) $(0.5) $- $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 48

49 Dry-Bulk Steady Domestic Dry-Bulk Revenues $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0 $

50 Weather-Related Costs Affect Results Domestic Dry-Bulk EBITDA $(17.5) $(15.5) $(13.5) $(11.5) $(9.5) $(7.5) $(5.5) $(3.5) $(1.5) 50

51 Ocean Self-Unloaders Up Slightly Ocean Self-Unloaders Revenues $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0 $

52 Ocean EBITDA Up Modestly Ocean Self-Unloaders EBITDA $- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 52

53 Global Short-Sea Shipping Revenues Global Short-Sea Revenues $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $

54 Short Sea Fleet Triples Owned Ships

55 Global Short-Sea EBITDA Global Short-Sea EBITDA $- $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 55

56 Algoma Innovator 56

57 Algoma Sault 57

58 Algoma Buffalo 58

59 Algoma Compass 59

60 Outlook Volumes Strong we are fully booked DDB rates improving contracting with improved earnings GSSS experiencing firmer rates and strong demand 60

61 Focused on Improving Returns 10.0% 9.0% Algoma's Return on Equity 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Algoma ROE Marine Money Industry ROE 61

62 62