RUMO ALL Earnings
Disclaimer This presentation includes estimates and forward-looking statements regarding our strategy and future growth opportunities. This information is based mainly on our current expectations and estimates or projections of future events and trends that affect or could affect our business and operating results. Although we believe these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to various risks and uncertainties and are made based on the information currently available to us. Our estimates and forward-looking statements may be influenced by the following factors, among others: (1) general economic, political, demographic and business conditions in Brazil and specifically in the geographic markets we serve; (2) inflation, depreciation and local-currency depreciation; (3) competitive developments in the ethanol and sugar industries; (4) our ability to implement our capital expenditure plan, including our ability to obtain funds when required and on reasonable terms; (5) our ability to compete and conduct our businesses in the future; (6) changes in consumer demand; (7) changes in our businesses; (8) government interventions resulting in changes in the economy, taxes, fees or regulatory environment; and (9) other factors that could affect our financial condition, liquidity and operating results. The words believe," can," should," estimate," continue," project," plan," expect and similar words are intended to identify said estimates and forward-looking statements. Estimates and forward-looking statements refer only to the date on which they were made and we undertake no liability to update or revise any estimates and/or forward-looking statements due to newly information, future events or other factors. Estimates and forward-looking statements involve risks and uncertainties and are not guarantees of future performance. Our future results may differ materially from those expressed in said estimates and forward-looking statements. In view of the risks and uncertainties described above, the estimates and forward-looking statements discussed in this presentation may not occur and our future results and performance may differ materially from that expressed in said forward-looking statements due to, but not limited to, the factors mentioned above. In view of these uncertainties, investors are cautioned not to make any investment decision based on these estimates and forward-looking statements.
Rumo ALL Business Units Rumo ALL North Operations South Operations Container Operations North Network Paulista Network Port of Santos Terminals West Network South Network Brado Logística Other results from the container operation
Consolidated Results Operations Growth of 6% in total transported volume, while volume of lifting decreased 12.3% from Transported Volume and Yield (MM TKU and R$/TKU x 1000) 561 90,9 10.648 91,5 3.733 3.709 6.354 6.968 2T14 +5,7% North Op Containers Op 11.252 2T15 574 South Op Average yield Volume of Loading (MM tons) 2.226 1.952 2T14-12,3% Volume Loaded volume Elevado 2T15 Transportation The increase of 9.6% in the volume transported of agricultural products (soybean, corn and sugar) offset the decrease of 6.9% in the volume transported of industrial products, mainly due to the interruption of service on some routes of the West Network. Loading Lower sugar volumes shipped due to an unfavorable scenario of export prices, partially offset by grain handling
Consolidated Results Financial Net revenue in grew 6% and EBITDA reached R$587 million, due to the implementation of operational improvements. Net Revenue +5,8% 1.153 1.220 EBITDA and EBITDA Margin 46,8% 48,1% +8,8% 539 587 Net revenue growth due to higher volumes and average transportation yield in rail operations, partially offset by the weaker performance of port loading activity Net Income EBITDA Indebtness EBITDA Margin Increase of 9% in EBITDA and margin expansion due to efforts to reduce costs and implementation of operational improvements 52-36,4% 33 8300,00 6300,00 4300,00 2300,00 300,00 4,93x 4,97x +3,5% 6.848 7.091 1Q15 Net Debt Leverage 005x 004x 003x 002x 001x Net income of R$33 million in and net bank debt of R$7.1 billion, equivalent to leverage of 4.97x
North Operations Market Scenario Market Projected growth of 11.6% in the 2014/15 grain crop according to CONAB, due to productivity gains in corn second crop. Brazilian exports of grains through the Port of Santos increased by approximately 7% from (MDIC and Aliceweb). Road freight in the spot market increased 7% in the Rondonópolis-Santos stretch, compared to (IMEA). Volume of Agricultural Products Soybean: volume growth reflecting improved conditions in the export market Corn: early second crop due to better international prices for soybean shipment Sugar: lower shipped volumes due to an unfavorable scenario of export prices and higher ship nomination at the Port of Paranaguá (South Operations) Volume of Industrial Products Increase in fuel volume due to the start-up of Raízen and Ipiranga plants in Rondonópolis (Mato Grosso)
North Operations EBITDA expansion on higher volumes and yields Transported Volume (MM TKU) Net Revenue 6.354 673 5.681 +9,7% 6.968 686 6.283 746 +9,6% 817 Increase in net revenue due to higher volumes transported of agricultural products and growth of 2.2% in the average transportation yield Agricultural Industrial Growth in transported volume due to improved conditions in the grain export market, early second-crop corn volume and start-up of the Raízen and Ipiranga fuel plants in Rondonópolis 55,1% 411 EBITDA and EBITDA Margin +19,6% 492 60,1% Growth of 19.6% in EBITDA due to higher transported volumes, higher average yield and operational improvements already implemented EBITDA EBITDA Margin
South Operations Market Scenario Market In, Brazilian grain exports through the ports where we operate in South Operations remained in line with (MDIC and Aliceweb) Volume of Agricultural Products Soybean: resumption of operations at a bulk terminal in the Port of Paranaguá (Paraná), resumption of relations with a major client in Paraná, and record grain crop in Rio Grande do Sul Sugar: migration of sugar shipments from the Port of Santos to the Port of Paranaguá Volume of Industrial Products Lower freight services in West Network, limited by operational safety issues Temporary shutdown of REFAP for approximately 30 days in May Lower demand for civil construction and steel products
South Operations EBITDA contraction on lower yields Transported Volume (MM TKU) 3.733-0,6% 3.709 1.286 1.086 2.447 2.624 Net Revenue -4,3% 335 320 Decrease in net revenue due to lower revenue from industrial volumes and lower average transportation yield Agricultural Industrial Transported volume in line with, due to lower industrial volumes in the West Network, partially offset by the resumption of operations at a bulk terminal in the Port of Paranaguá and resumption of relations with a major client in Paraná EBITDA and EBITDA Margin 36,9% 33,5% -13,1%. 124 107 EBITDA declined as a result of the drop in the transportation of industrial volumes, especially fuel, the lower average transportation yield and the temporary shutdown of REFAP
Container Operations EBITDA impacted by higher costs Transported volume and Average yield ( 0000 containers and R$ per 000 containers) EBITDA and EBITDA Margin (R$ MM ) 3,9 4,0 +12,1% 19 21 6,9% 5 Volume Average Yield -12-14,4% Higher volume of containers transported due to operational gains in the North and Central corridors of Paraná Negative EBITDA due to higher costs and expenses with consulting services, despite the growth in transported volume and average yield
Indebtness Total Indebtness 1Q15 Chg. % (Amounts in R$ MM) Combined Commercial Banks 539.7 544.8-0.9% NCE 832.1 434.1 91.7% BNDES 3,624.1 3,923.8-7.6% Debentures 2,970.0 2,856.2 4.0% Total Gross Bank Debt 7,965.8 7,759.0 2.7% Cash and Cash Equivalents and Secutities ¹ (874.8) (910.8) -4.0% Net Bank Debt 7,091.0 6,848.2 3.5% Leverage (Net debt / EBITDA ICVM 527) 4.97x 4.93x Debt Maturity Profile 43% 86% 57% 14% Main events in 1Q15 Short Term Long Term The funding of R$1.4 billion in private debentures and R$247.3 million from BNDES under the FINAME facility Early settlement of the 8th and 9th series of ALL debentures in the amount of R$1.3 billion, as well as other amortizations of FINEM contracts All debts of Rumo ALL are hedged against foreign exchange variation.
Financial Result and Cash Flow FINANCIAL RESULT 106 Growth of 3.0% due to: 319 +3,0% 329 213 154 Net Debt Interests 175 Other Charges Increase in the CDI interest rate between the periods and higher average net bank debt, in addition to lower yields of financial investments as a result of the lower average amount invested. Reduction in financial transactions involving suppliers and non-recurring banking expenses in 2014. CASH FLOW Indirect Cash Flows (Amounts in R$ MM) EBITDA 586.9 Non-Cash Effects 40.0 Working Capital Variation (132.8) Operating Financial Result 9.3 (a) (=) Operating Cash Flows 503.4 Total Capex (471.6) (b) Recurring (172.5) Expansion (299.2) (c) (=) Cash flows from investments (471.6) Funding 1,637.3 Amortization of principal/interest rates (1,799.3) Restricted cash and derivatives 94.3 (d) (=) Financial cash flows (67.7) (=) Generation (Consumption) total cash (35.9) (+) Cash and cash equivalents + marketable securities, opening balance Rumo ALL Combined 910.8 (=) Cash and cash equivalents + marketable securities, closing balance Rumo ALL Combined 874.9 Metrics (=) Cash generation after recurring Capex (a+ b) 331.0 (=) Cash generation after Total Capex (a+ c) 31.8 (=) Generation (Consumption) total cash (a+c+d) (35.9)
Opening Balance Sheet Purchase Price Allocation Opening Balance for Rumo ALL on April 1, 2015, to record at fair value of: (i) the price paid in the acquisition of ALL (in R$ million) Common shares acquired of ALL (681.995.165) R$ 3.97 R$ 2,707.5 Contract settlement Rumo R$ 29.8 Paid price R$ 2,737.4 (ii) assets acquired and liabilities taken Reduction on fair market value of PP&E of R$1.5 billion Revision of the estimate and fair value of lawsuits to R$268 million Intangible assets public concession rights of R$7.5 billion Other adjustments in accordance with the accounting practices These adjustments had no impact on the results of Rumo ALL, since they were made during the acquisition process The effects contributed to the formation of the intangible concession rights
Operational Improvements Rolling Stock Acquisition of new GE AC44 locomotives and Maxion HPT and HPE freight cars New renovation standard for locomotives and freight cars
Operational Improvements North Operations Port of Santos (SP) Record production in May of 2.6 billion RTK transported Fleet renewal: 24 GE AC44 locomotives already delivered from a total of 43 expected, and 355 HPT freight cars ordered, with delivery expected for the second half of 2015 New renovation standard for 32 C30 locomotives: 3 have been completed and are operational 9% reduction in transit time from Rondonópolis (Mato Grosso) to the Port of Santos (São Paulo) Improvements made to the rail structure, urban stretches and the Freight Car Maintenance Stations (PMV)
Operational Improvements South Operations Port of Paranaguá (PR) 8% reduction in transit time to the access to the ports of Paranaguá and São Francisco do Sul Investments in the rail structure, which include renovation for the addition of lines and replacement of tracks and sleepers Resumption of operations at a bulk terminal in the Port of Paranaguá, expected to finish renovation by the end of 2015 Acquisition of 377 HPE freight cars, expected to be delivered in the second half of the year. For 2016 and 2017, 47 locomotives were ordered for fleet renewal
Guidance 2015 Revised Projections Rumo ALL 2015 2015 Updated EBITDA 1.600 2.000 1.750 2.000 Total Capex 1.600 1.900 1.700 1.900 Capex Recurring 800 1.000 800 900 Capex Expansion 800 900 900 1.000 EBITDA: narrowing of the guidance range due to the performance seen in the first half and outlook for the second half of 2015 CAPEX: narrowing of the guidance range and revision of criteria for certain projects which were previously treated as recurring and are now treated as expansion, at approximately R$100 million
Jose Cezário Menezes de Barros Sobrinho Vice President of Finance and Investor Relations Guilherme Machado Investor Relations Manager Website ri.rumoall.com E-mail ir@rumoall.com Telephone +55 (11) 3897-9823 / (41) 2141-7459