2017 Interim Results Presentation

Transcription

1 Global Ports Investments PLC 2017 Interim Results Presentation 5 September

2 DISCLAIMER Information contained in this presentation concerning Global Ports Investments PLC, a company organised and existing under the laws of Cyprus (the Company, and together with its subsidiaries and joint ventures, Global Ports or the Group ), is for general information purposes only. The opinions presented herein are based on general information gathered at the time of writing and are subject to change without notice. The Company relies on information obtained from sources believed to be reliable but does not guarantee its accuracy or completeness. These materials may contain forward-looking statements regarding future events or the future financial performance of the Group. You can identify forward looking statements by terms such as expect, believe, estimate, anticipate, intend, will, could, may, or might, the negative of such terms or other similar expressions. These forward-looking statements include matters that are not historical facts and statements regarding the Company s and its shareholders intentions, beliefs or current expectations concerning, among other things, the Group s results of operations, financial condition, liquidity, prospects, growth, strategies, and the industry in which the Company operates. By their nature, forward-looking statements involve risks and uncertainties, because they relate to events and depend on circumstances that may or may not occur in the future. The Company cautions you that forward-looking statements are not guarantees of future performance and that the Group s actual results of operations, financial condition, liquidity, prospects, growth, strategies and the development of the industry in which the Company operates may differ materially from those described in or suggested by the forward-looking statements contained in these materials. In addition, even if the Company s results of operations, financial condition, liquidity, prospects, growth, strategies and the development of the industry in which the Company operates are consistent with the forward-looking statements contained in these materials, those results or developments may not be indicative of results or developments in future periods. The Company does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in forward-looking statements of the Company, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia, market change in the Russian transportation industry or particularly in the ports operation segment, as well as many other risks specifically related to the Company and its operations. These materials do not constitute an offer or an advertisement of any securities in any jurisdiction. 2

3 REFERENCE TO ACCOUNTS AND OPERATIONAL INFORMATION Unless stated otherwise all financial information in this presentation is extracted from the Interim condensed consolidated financial information (unaudited) for the six month period ended 30 June 2017 which is prepared in accordance with International Financial Reporting Standards adopted by the European Union ( IFRS ) applicable to interim financial reporting (International Accounting Standard 34 Interim Financial Reporting ). The Global Ports Group s Interim condensed consolidated financial information (unaudited) for the six month period ended 30 June 2017 is available at the Global Ports Group s corporate website ( The financial information is presented in US dollars, which is also the functional currency of the Company and certain other entities in the Group. The functional currency of the Group s operating companies for the periods under review was (a) for the Russian Ports segment, the Russian rouble, (b) for the Oil Products Terminal segment and for the Finnish Ports segment, the Euro. In this presentation the Group has used certain non-ifrs financial information as supplemental measures of the Group s operating performance. Such information is marked in this presentation with an asterisk {*}. Information (including non-ifrs financial measures) requiring additional explanation or defining is marked with initial capital letters and the explanations or definitions are provided at the end of this presentation. Rounding adjustments have been made in calculating some of the financial and operational information included in this presentation. As a result, numerical figures shown as totals in some tables may not be exact arithmetic aggregations of the figures that precede them. Market share data has been calculated using the information published by the Association of Sea Commercial Ports ( ASOP ), Seabury Group LLC ( Seabury ) and Drewry Financial Research Services Ltd ( Drewry ). 3

4 CONTENTS PAGE I. Global Ports at a glance 5 II. Continued focus on cash flow and deleveraging 6 III. Container market recovery 7 IV. Containerized export continues to grow 8 V. 1H 2017 Operating highlights: container volumes start to recover 9 VI. 1H 2017 Operating highlights: efficiency, safety and capex optimisation 10 VII. 1H 2017 Financial highlights 11 VIII. On-going focus on deleveraging 12 IX. Industry outlook and strategic focus 13 Appendix #1: Global Ports Group 14 Appendix #2: Selected operational and financial information 21 4

5 GLOBAL PORTS AT A GLANCE The #1 container terminal operator in Russia (1) Strong presence in both key container gateways to Russia: Baltic and the Far Eastern basins 6 marine container terminals in the Baltic basin and 1 in Far East basin Efficient, well-invested terminals provide for low CAPEX requirements and high cash flow generation Listed on the main market of the London Stock Exchange, free float of 20.5% (2) APM Terminals and N-Trans (each with 30.75% of total share capital) are the core strategic shareholders Adherence to best-in-class corporate governance Board of Directors with strong track record and deep understanding of the industry MLT-Helsinki Vopak E.O.S. MLT-Kotka First Container Terminal Moby Dik Petrolesport Yanino Logistika-Terminal Ust-Luga Container Terminal BALTIC BASIN BLACK SEA BASIN FAR EASTERN BASIN Vostochnaya Stevedoring Company (1) Source: ASOP, based on 1H17 overall container throughput in the Russian Federation ports (2) Of total share capital. 5

6 CONTINUED FOCUS ON CASH FLOW AND DELEVERAGING Strong market recovery and growth in capacity utilisation rate Market volumes grew 16% in 1H17 y-o-y driven by 22% growth in laden import containers Exports remain strong with laden export growth of 9% Average annualised capacity utilisation improved to close to 60% in the end of 1H17 (1) Growth in container volumes and focus on additional revenue streams Consolidated Marine Container Throughput up 2.2% y-o-y in 1H17 with acceleration of growth in 2Q17 to 4.4% y-o-y Focus on additional revenue streams generating better yield from existing infrastructure: Bulk cargo throughput up 41.5% y-o-y, driven mainly by coal and scrap metal Pricing initiatives and FX negatively impact profitability Revenue declined slightly to USD million (-0.8% y-o-y); the decline in container revenue was largely offset by growth in non-container revenue Adjusted EBITDA of USD 97.3 million (-12.8% y-o-y), as Adjusted EBITDA margin decreased due to decline in Revenue per TEU (-9.2% y-o-y) and appreciation of the Russian rouble (2) Strong cash flow generation, deleveraging remains priority Strong cash conversion, FCF of USD 70.3 million, supported by low CAPEX of USD 7.9 million Net Debt (3) reduced by c. USD 32.3 million in 1H17 to USD 915 million Dividends remain suspended to prioritise further deleveraging (1) Capacity utilisation rate is defined as container throughput in the corresponding period divided by container handling capacity for the period. Capacity is based on public sources and company estimates (2) The average exchange rate of the Russian rouble appreciated against the US dollar by 21.4% in the first half of 2017 compared to the first half of 2016 (3) Including derivative financial instruments 6

7 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 CONTAINER MARKET RECOVERY Strong recovery of the Russian container market backed by improving macro and pent-up demand Market grew 16% y-o-y during 1H 2017 Growth more pronounced in Far East and South Basins with lagging recovery in Baltic Basin Recovery is largely driven by strong revival in imports Laden imports grew by 22% in 1H 2017 Capacity utilisation is improving Average annualised capacity utilisation was close to 60% in June 2017 against less than 50% in 2016 Russian container market kteu +16% 2,171 +7% 1, Total market Saint-Petersburg (1) area +30% Far East 1H16 1H17 +17% Black Sea Russian container market quarterly dynamics Laden imports % YoY mln TEU 20% -1% 3% 1% 1% 0.5% 7% 11% % -2% -6% -5% -23% -24% -29% -27% H16 1H17 Source: ASOP, Company estimates (1) Including terminals located in the Big Port of Saint Petersburg and Ust-Luga 7

8 CONTAINERISED EXPORT CONTINUES TO GROW Laden exports up 13% in 2016 and 9% in 1H 2017 supported by ongoing containerisation Containerisation of export supply chains allows for reduction of cargo losses; more flexibility and ability to market small quantities (as little as one container) globally Growth in exports balances Russian container flows Need to import empty containers is expanding the overall market: import of empty containers was virtually nonexistent before rising to c. 6% of total imports in 2016 Export is potentially more stable compared to volatile imports Laden exports growth is balancing Russian container market Export growth is a sustained trend Laden export of Russia, mln TEU per annum +38% % H16 1H17 Laden exports growth drives empty containers import XX - Laden export/total export ratio in Saint-Petersburg area (1) XX - Imports of empty containers dynamics, kteu XX - Share of laden export in total market, % XX - Share of empty container import in total import (%) 14.8% 18.0% 24.8% 27.6% 26.7% 1.3% 0.8% 4.3% 6.2% 4.7% 0.7x 0.8x 0.7x x 0.5x H H17 Source: ASOP (1) Saint-Petersburg and Ust-Luga 8

9 1H 2017 OPERATING HIGHLIGHTS: CONTAINER VOLUMES START TO RECOVER Commercial incentives are gaining traction After initial lead time following price realignment in the beginning of 2017 container volume (1) growth has accelerated to 4% in 2Q17 Container volumes in July-August already up 17% y-o-y Container volumes (1), thousand TEUs 2% 4% H16 1H17 2Q16 2Q17 Marine Bulk (2), thousand tonnes Focus on additional revenue streams Record volumes of bulk cargo (2) reaching over 1.3 mln tons during 1H17 (+41% y-oy) driven by coal in VSC, scrap metal and other bulk export at PLP 61% growth in high and heavy Ro-Ro throughput 41% 928 1H16 Ro-Ro, thousand units 61% H17 Cars, thousand units -17% Attracted new export volumes of Russian cars from May H16 1H17 1H16 1H17 (1) Consolidated marine container throughput (defined as combined marine container throughput by consolidated marine terminals: PLP, VSC, FCT and ULCT) (2) Consolidated marine bulk throughput (defined as combined marine bulk by consolidated terminals: PLP, VSC, FCT and ULCT) 9

10 1H 2017 OPERATING HIGHLIGHTS: EFFICIENCY, SAFETY AND CAPEX OPTIMISATION Focus on efficiency and safety CAPEX in line with guidance Ongoing centralisation improves service quality and reduces costs further Commercial, procurement, IT and legal already centralised; finance to follow Further unification of IT platform and enhancement of IT solutions Head office of Russian Ports to be transferred to St. Petersburg in 4Q17 providing for cost savings Total Operating Cash Costs adjusted for FX up 4% in 1H17 reflecting growing throughput Ongoing safety focus with significant progress achieved in 2016: LTIF (2) reduced by 39% Increased our GMR (3) compliance to 95% across all terminals from 76% last year Total CAPEX of USD 8 million for 1H17 FY17 CAPEX is expected to be around mid-term annual guidance of USD million Cash CAPEX, mln USD 70.0 (1) % H17 Total Operating Cash Costs, mln USD 52* 1H16 +25% * 1H Total Operating Cash Costs adjusted for FX (4), mln USD +4% 52* 54* 1H16 1H17 (1) Illustrative combined basis (2) Lost-time injury frequency rates (3) Global Minimum Requirements (4) Management estimate, calculated as if effective USD/RUB exchange rate in 1H17 was the same as in 1H16 10

11 1H 2017 FINANCIAL HIGHLIGHTS Revenue Revenue remained broadly flat Container revenue down 7.1% to USD million* as growth in throughput was offset by 9.2%* decline of Revenue per TEU (1) Non-container revenue grew 30.5% to USD 36.2 million* and compensated for the decline in container revenue USD mln -1% H16 1H17 Adjusted EBITDA margin remained strong Adjusted EBITDA down 13% to USD 97.3 million* Adjusted EBITDA Margin, although affected by the decline in pricing and the appreciation in the Russian rouble, remained strong at 60% Adjusted EBITDA and Adjusted EBITDA margin USD mln 68%* 60%* -13% 112* 97* 1H16 1H17 Cash Conversion in 1H17 USD mln Strong Free Cash Flow generation due to: 97* High cash conversion Strong operating cash flows Low CAPEX requirements (25) 8 (8) (3) 70* Dividend flow from joint ventures Adjusted EBITDA Income tax CAPEX Dividends from JVs Other FCF (1) On consolidated basis 11

12 ON-GOING FOCUS ON DELEVERAGING Net Debt (1) reduced by c. USD 32 million* in 1H 2017 Since NCC acquisition at the end of 2013: Consistent Net Debt (1) reduction USD mln Total Debt (1) reduced by c. USD 432 million* Net Debt (1) reduced by c. USD 435 million* As of 30 June 2017: Total Debt (1) was USD 1,031 million*, Net debt (1) was USD 915 million* 1350* 1208* 1048* 947* 915* Net Debt / Adjusted LTM EBITDA of 4.4x* Average interest rate of the debt portfolio is around 6.8% Share of public debt was around 90%*, share of fixed rate borrowings was 100%* H17 Debt maturity profile as of 30 June 2017 USD mln * 352* LTM Net cash from operating activity Cash & Equivalents 178* * 28* 27* 70* 163* H and after Source: Company data (1) Including derivative financial instruments 12

13 INDUSTRY OUTLOOK AND STRATEGIC FOCUS Industry outlook Rapid recovery in 1H17; cautious optimism for the rest of the year Russian container market remains fundamentally undercontainerised Utilisation of industry capacity is improving but competition remains strong Build on our strengths Efficient modern capacity available in right locations in key container gateways High level of service, focus on increasing service levels further Industry leader in IT solutions within the Russian container industry Continued focus on FCF and deleveraging Well invested terminals enable scale down of CAPEX to USD million per annum in the mid term Focus on cost control, preserve cash given capacity available across the portfolio Use strong Free Cash Flow for deleveraging 13

14 APPENDIX #1 Global Ports Group 14

15 STRONG POSITIONS IN KEY BASINS Baltic Basin Far East Basin RUSSIA FINLAND RUSSIA MLT Kotka MLT Helsinki Moby Dik GULF OF FINLAND BALTIC SEA VEOS ESTONIA Ust-Luga Container Terminal Petrolesport First Container Terminal St. Petersburg Moscow CHINA Vostochnaya Stevedoring Company SEA OF JAPAN 51% of Russia s container traffic Black Sea Basin 19% of Russia s container traffic Nakhodka 27% of Russia s container traffic Shanghai Baltic Basin Far East Basin Key entry gateway to Russia Excellent maritime access to key consumption areas, including St. Petersburg and Moscow The cheapest route to deliver cargo from China to European part of Russia (1) Supplying Russian Far East, CIS countries (Kazakhstan, Tajikistan, Uzbekistan) as well as central Russia (including Moscow) The fastest route to ship cargoes from China to Moscow: up to days faster than via the Baltic Basin (1) Source: Based on 1H 2017 market data by ASOP (1) Company estimate based on public sources 15

16 WELL INVESTED CONTAINER TERMINALS IN KEY GATEWAYS Baltic Sea Basin 51% of Russian market 1H17 throughput Far East Basin 27% of Russian market 1H17 throughput PLP Capacity: TEU Moby Dik Capacity: TEU Finland FCT Vladivostok Capacity: TEU Finnish transit Other terminals Capacity: TEU Baltic Sea Baltic countries transit BSC and Kaliningrad SCP Kaliningrad Region Lithuania Estonia Latvia Bronka St. Petersburg Region CT St-Petersburg Ust-Luga Russia Moscow Capacity (1) : TEU Capacity: TEU China Russia Okhotsk Sea Capacity: TEU Black Sea Basin 19% of Russian market 1H17 throughput Black Sea VMTP Novorossiysk Turkey Russia VSC Capacity: TEU NCSP Capacity: TEU NUTEP Capacity: TEU Capacity: TEU Capacity: TEU Source: Drewry, open sources, Company analysis Note: Gross container handling capacity with respect to container terminals of the Group as at 30 June 2017 (1) Source: Vedomosti as at

17 ST. PETERSBURG AND SURROUNDING AREA PLP Capacity: TEU Moby Dik Capacity: TEU FCT Capacity: TEU Bronka Capacity: TEU CT St-Petersburg Capacity: TEU Ust-Luga Capacity: TEU 17

18 LOGISTIKA-TERMINAL OVERVIEW In August 2017 Global Ports announced the sale of Logistika-Terminal, one of the Group s two inland terminals, to PJSC TransContainer (subject to approval by relevant authorities) A consideration of 1.9 billion Russian roubles to be paid upon completion of the transaction The Group intends to use the proceeds of the sale for further deleveraging, a key strategic priority Terminal layout and key data Location: Railway lines Indoor railroad overpass Class A storage Heated temporary warehouse Customs examination area Reefer containers Access road Class C storage (cold) Examination area for incoming containers Container terminal Unheated temporary warehouse Railway lines Service zone St. Petersburg, Russia Total area: 90 ha Capacity: Containers: 200 kteus Other cargo: 400,000 tons Throughput (2016): Containers: 174 kteus Bulk cargo: 320 thousand tons Moskovskoe highway St- Petersburg Throughput (1H 2017): Containers: 88 kteus Bulk cargo: 174 thousand tons 18

19 PRINCIPLES OF IFRS CONSOLIDATION 100% 100% 100% 80% 100% 75% 75% 75% 50% FCT PLP VSC ULCT LT Moby Dik Yanino Multi-Link Terminals VEOS Fully consolidated Key contributors are large terminals FCT, PLP and VSC 20% of ULCT owned by Eurogate GmbH, shown as noncontrolling interest in GPI s financial statements In August 2017 the Group signed an agreement to sell its 100% shares in LT. The transaction is subject to approval of relevant regulatory authorities. Accounted using equity method Vopak EOS is a JV with Royal Vopak (Netherlands), other JVs are with Container Finance (Finland) mln USD, 1H17 4.4x* - Net Debt / Adjusted LTM EBITDA mln USD, 1H17 0.6x* - Net Debt / Adjusted LTM EBITDA 97* 14* 70* 1* EBITDA Free Cash Flow EBITDA Free Cash Flow 19

20 OTHER SEGMENTS Due to mandatory adoption of IFRS 11 from January 1 st 2014, Vopak E.O.S., Finnish Ports segment (as well as Moby Dik and Yanino included in the Russian Ports segment) are consolidated using the equity method of accounting and their proportional share of net profit is reported below Adjusted EBITDA Vopak E.O.S. 1H16 1H17 Finnish Ports segment 1H16 1H17-25% 38-46% % %* 22.7%* 13* -48% % %* 15.6%* 1.5* -51% 6* 0.7* Throughput, mln tons Revenue, USDm Adjusted EBITDA (USDm) and Adjusted EBITDA margin (%) Throughput, thousand TEU Revenue, USDm Adjusted EBITDA (USDm) and Adjusted EBITDA margin (%) Focus on storage and accumulation of large shipments, utilising the unique features of the tank farm consisting of 78 tanks of different sizes Finnish Ports segment throughput decreased by 51% Revenues decreased by 46%, Adjusted EBITDA by 51% Market environment remains extremely challenging 20

21 APPENDIX #2 Selected operational and financial information 21

22 SELECTED OPERATIONAL INFORMATION (1) Gross throughput 1H16 1H17 1H16 1H17 Gross throughput Russian Ports segment Containerised cargo (thousand TEUs) FCT PLP VSC Finnish Ports segment Containerised cargo (thousand TEUs) Moby Dik Oil Products Terminal segment ULCT Total Russian Ports segment (2) Oil products Gross Throughput (million tonnes) Non-containerised cargo Ro-ro (thousand units) Cars (thousand units) Bulk cargo (thousand tonnes) 939 1,332 (1) Data is on a 100% basis. Source: Management accounts (2) Total throughput of Russian Ports excludes the throughput of Yanino which in 1H16 and 1H17 was 57 thousand TEUs and 56 thousand TEUs respectively and the throughput of LT which in 1H16 and 1H17 was 84 thousand TEUs and 88 thousand TEUs respectively 22

23 SELECTED OPERATIONAL INFORMATION (CONTINUED) Capacity (end of the period) 1H17 1H17 Russian Ports segment Russian Marine Container Terminal Capacity Annual container handling capacity (Thousand TEUs) Finnish Ports segment PLP (1) 1,000 MLT Kotka 270 VSC 650 MLT Helsinki 150 Moby Dik 400 Total 420 FCT 1,250 ULCT 440 Total Global Ports 3,740 Yanino, inland container terminal Annual container handling capacity (Thousand TEUs) Annual general cargo capacity (Thousand tonnes) 400 Oil Products Terminal Segment 200 LT, inland container terminal Storage Capacity (in thousand cbm) 1,052 Annual container handling capacity 200 (Thousand TEUs) Source: Management Accounts (1) As a result of the relocation of two STS cranes from PLP to VSC the capacity of PLP temporarily decreased to 750 thousand TEUs. It is expected to be restored to 1 mln TEUs in 2H

24 GLOBAL PORTS CONSOLIDATED INCOME STATEMENT Summary Income Statement USD million 1H16 1H17 Revenue Cost of sales (55.1) (79.9) Gross profit Administrative, selling and marketing expenses (19.4) (22.6) Share of profit/(loss) of joint ventures 2.2 (10.1) Other losses net (31.3) (35.8) Operating profit Finance income/(costs) net 92.6 (11.0) Profit before income tax Income tax expense (39.4) (14.9) Profit for the period (11.9) Profit attributable to: Owners of the Company (12.1) Adjusted EBITDA* Adjusted EBITDA Margin* 68.1% 59.9% Source: Global Ports consolidated financial statements 24

25 GLOBAL PORTS CONSOLIDATED BALANCE SHEET Summary Balance Sheet USD million 31-Dec Jun-17 PP&E (incl. prepayments) Intangible assets Derivative financial instruments (non-current assets) Other non-current assets Cash and equivalents Derivative financial instruments (current assets) Other current assets Total assets 1, ,663.5 Equity attributable to the owners of the Company Minority interest LT borrowings 1, ,019.6 Derivative financial instruments - - Other non-current liabilities ST borrowings Other current liabilities Total equity and liabilities 1, ,663.5 Source: Global Ports consolidated financial statements 25

26 GLOBAL PORTS CONSOLIDATED CASH FLOW STATEMENT Summary Cash Flow Statement USD million 1H16 1H17 Cash generated from operations Dividends received from joint ventures Tax paid (21.9) (24.7) Net cash from operating activities Cash flow from investing activities Purchases of intangible assets (0.1) (0.5) Purchases of property, plant and equipment (4.6) (7.9) Proceeds from sale of property, plant and equipment Loans granted to related parties (7.0) (7.5) Loans repayments received Other Net cash used in investing activities (10.5) (14.1) Cash flow from financing activities Net cash outflows from borrowings and financial leases (50.7) (22.6) Interest paid (33.5) (45.2) Net cash used in financing activities (84.2) (67.8) Source: Global Ports consolidated financial statements 26

27 DEFINITIONS Adjusted EBITDA (a non-ifrs financial measure) for Global Ports Group is defined as profit for the period before income tax expense, finance (income)/costs net, depreciation of property, plant and equipment, amortisation of intangible assets, share of profit/(loss) of joint ventures accounted for using the equity method, other gains/(losses) net and impairment of goodwill and property, plant and equipment and intangible assets; Adjusted EBITDA Margin (a non-ifrs financial measure) is calculated as Adjusted EBITDA divided by revenue, expressed as a percentage; Adjusted LTM EBITDA (a non-ifrs financial measure) is Adjusted EBITDA for the last twelve months, calculated as a sum of Adjusted EBITDA for the first half of 2017 and Adjusted EBITDA for the second half of 2016; Baltic Sea Basin is the geographic region of northwest Russia, Estonia and Finland surrounding the Gulf of Finland on the eastern Baltic Sea, including St. Petersburg, Tallinn, Helsinki and Kotka; Cash Costs of Sales (a non-ifrs financial measure) is defined as cost of sales, adjusted for depreciation and impairment of property, plant and equipment, amortisation and impairment of intangible assets; Cash Administrative, Selling and Marketing expenses (a non-ifrs financial measure) is defined as administrative, selling and marketing expenses, adjusted for depreciation and impairment of property, plant and equipment, amortisation of intangible assets; CD Holding group consists of Yanino Logistics Park (an inland terminal in the vicinity of St-Petersburg), CD Holding and some other entities. The results of CD Holding group are accounted in the Global Ports financial information using the equity method of accounting; Consolidated Marine Container Throughput is defined as combined marine container throughput by consolidated marine terminals: PLP, VSC, FCT and ULCT; Consolidated Marine Bulk Throughput is defined as combined marine bulk throughput by consolidated terminals: PLP, VSC, FCT and ULCT; Consolidated Inland Container Throughput is defined as combined container throughput by consolidated inland terminals: LT; Consolidated Inland Bulk Throughput is defined as combined bulk throughput by consolidated inland terminals: LT; Container Throughput in the Russian Federation Ports is defined as total container throughput of the ports located in the Russian Federation, excluding half of cabotage cargo volumes. Respective information is sourced from ASOP ( Association of Sea Commercial Ports, Far East Basin is the geographic region of southeast Russia, surrounding the Peter the Great Gulf, including Vladivostok and the Nakhodka Gulf, including Nakhodka on the Sea of Japan; First Container Terminal (FCT) is located in the St. Petersburg harbour, Russia s primary gateway for container cargo. The Global Ports Group owns a 100% effective ownership interest in FCT. The results of FCT are fully consolidated; Finnish Ports segment consists of two terminals in Finland, MLT Kotka and MLT Helsinki (in port of Vuosaari), in each of which Container Finance currently has a 25% effective ownership interest. The results of the Finnish Ports segment are accounted for in the Global Ports financial information using the equity method of accounting (proportionate share of net profit shown below EBITDA); Free Cash Flow (a non-ifrs financial measure) is calculated as Net cash from operating activities less Purchase of PPE; Functional Currency is defined as the currency of the primary economic environment in which the entity operates. The functional currency of the Company and certain other entities in the Global Ports Group is US dollars. The functional currency of the Global Ports Group s operating companies for the years under review was (a) for the Russian Ports segment, the Russian Rouble and (b) for the Oil Products Terminal segment, and for the Finnish Ports segment, the Euro; Gross Container Throughput represents total container throughput of a Group s terminal or a Group s operating segment shown on a 100% basis. For the Russian Ports segment it excludes the container throughput of the Group s inland container terminals, Yanino and Logistika Terminal; Logistika Terminal (LT) is an inland container terminal providing a comprehensive range of container freight station and dry port services at one location. The terminal is located to the side of the St. Petersburg - Moscow road, approximately 17 kilometres from FCT and operates in the Shushary industrial cluster. The Global Ports Group owns a 100% effective ownership interest in LT. The results of LT are fully consolidated (in August 2017 the Group signed an agreement to sell its 100% shares in LT, the transaction is subject to approval of relevant regulatory authorities); 27

28 DEFINITIONS MLT group consists of Moby Dik (a terminal in the vicinity of St-Petersburg) and Multi-Link Terminals Oy (terminal operator in Vuosaari (near Helsinki, Finland) and Kotka, Finland). The results of MLT group are accounted for in the Global Ports financial information using the equity method of accounting (proportionate share of net profit shown below EBITDA); Moby Dik (MD) is located in Kronshtadt on the St. Petersburg ring road, approximately 30 kilometers from St. Petersburg, at the entry point of the St. Petersburg channel. It is the only container terminal in Kronstadt. The Global Ports Group owns a 75% effective ownership interest in MD, Container Finance LTD currently has a 25% effective ownership interest. The results of MD are accounted for in the Global Ports financial information using the equity method of accounting (proportionate share of net profit shown below EBITDA); Net Debt (a non-ifrs financial measure) is defined as the sum of current borrowings, non-current borrowings and derivative financial instruments less cash and cash equivalents and bank deposits with maturity over 90 days; Oil Products Terminal segment consists of the Group s 50% ownership interest in Vopak E.O.S. (in which Royal Vopak currently has a 50% effective ownership interest). The results of the Oil Products Terminal segment are consolidated in the Global Ports financial information using the equity method of accounting (proportionate share of net profit shown below EBITDA); Petrolesport (PLP) is located in the St. Petersburg harbour, Russia s primary gateway for container cargo. The Group owns a 100% effective ownership interest in PLP. The results of PLP are fully consolidated; Ro-Ro, roll on-roll off is cargo that can be driven into the belly of a ship rather than lifted aboard. Includes cars, buses, trucks and other vehicle Russian Ports segment consists of the Global Ports Group s interests in PLP (100%), VSC (100%), FCT (100%), ULCT (80%) (in which Eurogate currently has a 20% effective ownership interest), Moby Dik (75%), Yanino (75%) (in each of Moby Dik and Yanino Container Finance currently has a 25% effective ownership interest), and Logistika Terminal (100%) and some other entities. The results of Moby Dik and Yanino are accounted for in the Global Ports condensed consolidated financial information using the equity method of accounting (proportionate share of net profit shown below EBITDA); TEU is defined as twenty-foot equivalent unit, which is the standard container used worldwide as the uniform measure of container capacity; a TEU is 20 feet (6.06 metres) long and eight feet (2.44 metres) wide and tall; Total Debt (a non-ifrs financial measure) is defined as a sum of current borrowings, non-current borrowings and derivative financial instruments. Total Operating Cash Costs (a non-ifrs financial measure) is defined as Global Ports Group s cost of sales, administrative, selling and marketing expenses, less depreciation and impairment of property, plant and equipment, less amortisation and impairment of intangible assets; Ust Luga Container Terminal (ULCT) is located in the large multi-purpose Ust-Luga port cluster on the Baltic Sea, approximately 100 kilometres westwards from St. Petersburg city ring road. ULCT began operations in December The Global Ports Group owns a 80% effective ownership interest in ULCT, Eurogate, the international container terminal operator, currently has a 20% effective ownership interest. The results of ULCT are fully consolidated; Vopak E.O.S. includes AS V.E.O.S. and various other entities (including an intermediate holding) that own and manage an oil products terminal in Muuga port near Tallinn, Estonia. The Group owns a 50% effective ownership interest in Vopak E.O.S.. The remaining 50% ownership interest is held by Royal Vopak. The results of Vopak E.O.S. are consolidated in the Global Ports financial information using the equity method of accounting (proportionate share of net profit shown below EBITDA); Vostochnaya Stevedoring Company (VSC) is located in the deep-water port of Vostochny near Nakhodka on the Russian Pacific coast, approximately eight kilometers from the Nakhodka- Vostochnaya railway station, which is connected to the Trans-Siberian Railway. The Group owns a 100% effective ownership interest in VSC. The results of VSC are fully consolidated; Weighted average effective interest rate is the average of interest rates weighted by the share of each loan in the total debt portfolio. Yanino Logistics Park (YLP) is the first terminal in the Group s inland terminal business and is one of only a few multi-purpose container logistics complexes in Russia providing a comprehensive range of container and logistics services at one location. It is located approximately 70 kilometres from the Moby Dik terminal in Kronstadt and approximately 50 kilometres from PLP. The Global Ports Group owns a 75% effective ownership interest in YLP, Container Finance LTD currently has a 25% effective ownership interest. The results of YLP are accounted for in the Global Ports financial information using the equity method of accounting. 28

29 INVESTOR RELATIONS Mikhail Grigoriev Phone: (ext. 1310) Mob: Yana Gabdrakhmanova Phone: (ext. 4197) Mob: Web: Definitions for terms marked in this presentation with capital letters are provided in the Appendices at pages