adani ports and special economic zone limited€¦ · fitch press release dated february 6, 2017....

Adani Ports and Special Economic Zone Limited

June 2017

Strictly Private & Confidential

2 2

This document is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933 (the “Securities Act”), and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering is being made in the United States. This document has been prepared solely for use at this presentation in connection with a proposed offer of senior notes (the “Securities”) of Adani Ports and Special Economic Zone Limited (“APSEZ”) and is being made available to you solely for your information and for use at such presentation. You must hold information included in this document and any oral information provided in connection with this document in strict confidence. The information contained in this document is strictly confidential and may not be reproduced in any form or distributed or passed on to any other person or published, in whole or in part, for any purpose. Failure to comply with this restriction may constitute a violation of applicable securities laws. This document and any materials provided in connection therewith will be collected after the presentation. The contents of this document are based, in part, on certain assumptions and information obtained from APSEZ, its management, employees, agents, affiliates and/or from other sources. All information included in this document and any oral information provided in connection herewith speaks as of the date of this presentation (or earlier, if so indicated) and is subject to change without notice. The information contained in this presentation has not been independently verified. The information in this presentation is in summary form and does not purport to be complete. No representation or warranty, express or implied, is made or given by APSEZ, the Joint Bookrunners or any of their respective directors, agents, employees, representatives or affiliates as to, and no reliance should be placed on the accuracy, reliability, fairness or completeness of the information presented or as to the reasonableness of any assumptions on which any of the same is based. APSEZ, the Joint Bookrunners and their respective directors, agents, employees, representatives and affiliates accept no responsibility, obligation (including, but not limited to, any obligation to update any information contained in this document) or liability (whether direct or indirect, in contract, tort or otherwise) for any losses arising from any information contained in this presentation or oral information provided in connection herewith. This presentation contains forward-looking statements and during the course of this presentation, APSEZ may make projections or other forward-looking statements regarding, among other things, APSEZ’s business outlook and investments, implementation of its strategies, competition, estimates of future performance, anticipated results, future revenues, cash flows or capital requirements that involve risks and uncertainties. All statements other than statements of historical facts are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. In some cases you can identify these statements by words such as “could,” “may,” “expects,” “anticipates,” “believes,” “intends,” “estimates,” or similar words. You should review the risk factors discussed in the offering circular to be prepared by APSEZ in connection with the contemplated transaction. In light of these risks and uncertainties and other factors not currently viewed as material, there is no assurance that the forward-looking statements made during this presentation will in fact be realized and actual results may differ materially from those described in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. These forward-looking statements speak only as at the date as of which they are made, and, except as otherwise required by applicable securities laws, APSEZ, the Joint Bookrunners and their respective directors, agents, employees, representatives and affiliates disclaim any intention or obligation to supplement, amend, update or revise any of these forward-looking statements. Accordingly, any reliance you place on such forward-looking statements will be at your sole risk. Unless otherwise stated, all financial information relating to APSEZ as at and for the financial years ended 31 March 2015 contained herein is stated in accordance with Indian GAAP and all financial information relating to APSEZ as at and for the financial years ended 31 March 2016 and 2017 is stated in accordance with Indian Accounting Standards ("IND AS"). All amounts included in this presentation are expressed in U.S. Dollars, unless otherwise indicated. This presentation includes measures of financial performance which are not measures of financial performance under Indian GAAP or IND AS, such as EBITDA, EBITDA Margin, EBIT and Funds from Operations. These measures are presented because APSEZ believes that they serve as useful indicators of its operating performance. In particular, APSEZ believes that EBITDA, EBITDA Margin, EBIT and Funds from Operations are measures commonly used by analysts, investors and peers in its industry. Accordingly, EBITDA, EBITDA Margin, EBIT and Funds from Operations is disclosed in this document to permit a more complete analysis of APSEZ’s operating performance. EBITDA, EBITDA Margin, EBIT and Funds from Operations however, should not be considered as an alternative to cash flows from operating activities, a measure of liquidity or an alternative to net income or indicators of APSEZ’s operating performance on any other measure of performance derived in accordance with Indian GAAP or IND AS. Because they are not Indian GAAP or IND AS measures, EBITDA, EBITDA Margin, EBIT and Funds from Operations or other measures derived from EBITDA, EBITDA Margin, EBIT and Funds from Operations may not be comparable to similarly titled measures presented by other companies. This presentation does not constitute or form part of an offer to sell or issue or a solicitation of an offer to buy or invitation to purchase or subscribe for any securities of APSEZ in any jurisdiction in which the making of such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction or would not otherwise be in compliance with the laws or regulations of such jurisdiction, and no part of this presentation shall form the basis of or be relied upon in connection with any contract or commitment or investment decision whatsoever. This presentation should not be construed as an advertisement, invitation or offer for sale of any securities, whether by way of private placement or to the public in India. Specifically, any investment decision should be made exclusively on the basis of the offering circular to be prepared by APSEZ in connection with the contemplated transaction. Investing in the Securities involves certain risks and potential investors should note that the value of the Securities may go down as well as up. Investors shall obtain and review the relevant information carefully before investing. The recipients of this document must conduct their own investigation and analysis of the contemplated transaction and the information and data contained herein should the recipient proceed. By attending this presentation and/or accepting this document, you agree to be bound by the foregoing limitations and conditions and, in particular, will be taken to have represented, warranted and undertaken that: (i) you have read and agree to comply with the contents of this notice including, without limitation, the obligation to keep this document and its contents confidential; (ii) you agree not to remove this document, or any materials provided in connection herewith, from the conference room where such documents are provided; and (iii) you are either (x) a qualified institutional buyer as defined in Rule 144A under the Securities Act or (y) outside the United States. Investment in securities contains certain risks. Investors are recommended to study related information before making an investment.

Legal Disclaimer

3 3

1 Overview

2 Delivering on Performance Metrics

3 Operational Highlights

APSEZ: Discussion Topics

4 Financial Highlights

5 Annexure

4 4

Issuer Adani Ports and Special Economic Zone Limited (“APSEZ” or the “Company”)

Issue Senior Notes

Distribution Format Rule 144A / Regulation S

Issuer Rating S&P: BBB- (Stable); Fitch: BBB- (Stable); Moody’s: Baa3 (Stable)

Expected Issue Rating S&P: BBB-; Fitch: BBB-; Moody’s: Baa3

Issue Size US$ Benchmark

Maturity 10 Years

Use of Proceeds Primarily for refinancing existing indebtedness of Company and/or its subsidiaries, associates or ventures in a

jointly controlled entity as permitted under the ECB Guidelines. Balance of the net proceeds may be used for capital expenditure requirements or otherwise as permitted under the ECB Guidelines

Key Covenants

Standard investment grade covenants

Limitation on indebtedness (Indebtedness to Tangible Net Worth ratio < 3.0x)

Restrictions on transactions with Sponsor Affiliates

Denominations US$200,000/US$1,000

Governing Law English Law

Joint Global Coordinators and Joint Bookrunners

Joint Bookrunners

Offering Summary

5

Overview

6 6

Highlights

–India’s largest commercial ports operator and pan-India integrated

logistics company

–Investment grade ratings (S&P: BBB- Stable / Fitch: BBB- Stable /

Moody’s: Baa3 Stable)(1)

–Best-in-class, India based infrastructure company

Note: (1)Source: S&P press release dated June 14, 2017. Moody’s press release dated June 19, 2017. Fitch press release dated February 6, 2017. Other than as set forth herein, the information in each such press release is not a part of this presentation or the offering circular. (2)Market Cap on June 16, 2017. Reserve Bank of India USD / INR exchange rate on June 16, 2017: 64.5883. (3)Revenue for the financial year ended March 31, 2017. Revenue refers to the total revenue from APSEZ operations minus other income. Average USD/INR exchange rate of 67.0896 used for Fiscal Year 2017. (4)Total Assets as on March 31, 2017.

Group Core Strengths

– Massive Scale across

Infrastructure verticals

– Proven Execution Capabilities

and track record

– Deep Management Experience in

regulated environments

– Operational Excellence with

productivity, low-cost operations

– Successful Track Record of

integrating acquisitions

Market Cap: US$11.6bn(2)

Revenue US$1.3bn(3)

Total Assets: US$6.5bn(4)

APSEZ: Leveraging Adani Group’s Core Strengths

7 7 Note: 1. In-principle agreement for acquisition entered into with L&T, APSEZ is currently acting as interim operator. Subject to

certain closing conditions by June 30, 2017. 2. Under construction.

APSEZ: Global Scale Infrastructure Player

Kandla

Dahej

Hazira

Mundra

Mormugao

Vizhinjam (2)

Kattupalli (1)

Ennore

Vizag

Dhamra

Patli

Kishangarh

Kilaraipur

Multipurpose ports

Bulk terminals

Container terminals

Inland container depot (ICDs)

Mundra is India’s largest

commercial port

India’s Largest Integrated Port and Logistics Player

– 10 strategically-located “string of ports” along Indian coastline

– Gateway to the world’s fastest growing large economy

– Global Scale: 300+ MMT capacity

– Integrated logistics and SEZ(3)

– Weighted average remaining concession period of 25 years(4)

APSEZ: India Cargo Share(5)

15% India Cargo: 837MMT

APSEZ Cargo: 126MMT

3. Special Economic Zone 4. Average residual concession period as on March 31, 2017. Does not include Kattupalli. 5. Data for 9M Fiscal Year 2017 (Source: Ministry of Shipping, Annual Report FY16-17)

8 8

Logistics FY17 Revenue: US$ 96 mn (2)

(8% of total FY17 Revenue) (4)

–Container rail operations across all

Indian ports; 20 year license

–3 inland container depots for

warehousing

–Connectivity between ports and

origin / destination of cargo

–Concession assets in a supportive

regulatory environment

–Commercially negotiated tariff for

private ports

–Handling multi and complex cargo

Ports FY17 Revenue: US$ 1,104 mn (1)


–Land bank of over 8,000 hectares

–Integrated services with ports

–Industry clusters development

focus

–Revenue from upfront premium and

recurring, annual lease rentals

SEZ FY17 Revenue: US$ 54 mn (3)


APSEZ: Unique and Integrated Business Model

Note: Average USD / INR exchange rate of 67.0896 for Fiscal Year 2017. 1. Refers to Income from Port Operations (including related infrastructure). 2. Refers to income from Logistic Services. 3. Refers to income from Land Lease, Upfront Premium and Deferred Infrastructure Income and Utilities Services. 4. Total Revenue also includes US$4 mn of revenue from Aircraft Operation and Other operating income including construction, Infrastructure development support services and related income.

9 9

India: Strong Macro Fundamentals with a Stable Regulatory Environment

Supportive Regulatory Framework

Compelling Macro Opportunity

– India GDP growth expected to be 7.0%+ over FY18-20 (1)

– Cargo expected to double by FY25

– Government ports constrained

– Government focus on container trade, coastal shipping, ‘Make in India’

– Stable regulatory history of 25

years

– India primarily an Origin &

Destination cargo market

– Commercially negotiated pricing

drives volume and realization

– Very long concession period

providing stability

– Services flexibility through

unique landlord – operator model

– Proven track record of operating

own ports and terminals

1. Source: World Bank Press Release (May 2017). 2. Source: Sagarmala: National Perspective Plan (April 2016), Ministry of Shipping, Government of India. 3. The port development models include brownfield, greenfield and terminal developments. 4. Does not include Kattupalli for which In-principle agreement for acquisition entered into with L&T Shipbuilding Limited. APSEZ is currently acting as interim operator. Subject to certain closing conditions by June 30, 2017.

7.2% 7.7%

FY18 FY20

1,072 2,160

FY16 FY25

Public sector ports Terminals

Private ports Greenfield

Operators

Landlord, Developer(3)

– Revenue from

commercial

operations, leases

and royalties

– Development of

entire ports and

logistics ecosystem

– APSEZ: 5 ports (4)

– State government

concessions ;

managed by private

developers

– Commercially

negotiated tariff

– Government-owned

– Regulated tariff

– Terminal development

– APSEZ: 4 terminals

– Revenue on cost plus

model

India GDP Growth (1)

India Cargo Growth (2)

10 10

APSEZ: Delivering on Performance Metrics

11 11

1

– Cargo mix shifting from coal to

container

• CT 3, CT 4, Hazira and Kattupalli

contribute to rapid growth

– JV partnerships, arrangements

with shipping lines driving

container growth

– Coal and crude remain resilient

given long term contracts

– 10%+ growth in long-term cargo

Cargo Growth led by “Diversification Strategy”

Cargo Growth and Diversification

Long Term Contracts Provide Resilience in Cargo Volumes

Contribution to Cargo Volumes

(MMT, %)

FY15 FY17

APSEZ’s Cargo Volumes

(% Split Across Products)

CAGR: 8.1%

Cargo Growth Cargo Volumes CAGR (FY15-17)

(%)

85 104

59

65

FY15 FY17

144 169

25.0%

21.5%

9.7%

Other Bulk

Containers

Crude

Containers 29%

Coal 47%

Crude 12%

Bulk 12%

Containers 37%

Coal 36%

Crude 12%

Bulk 15%

(1) (1)

Note: (1) Represents Other Bulk (excluding coal).

APSEZ Total Cargo (MMT)

144

169

59% 62%

38%

41%

Long-Term Cargo Short-Term Contracts

CAGR: 10.7%

CAGR: 4.4%

12 12

Strategic Capex Driving Tangible Growth

Note: Financials for Fiscal Year 2015 are as per Indian GAAP and; for Fiscal Year 2016 and Fiscal Year 2017 as per IND-AS. Average exchange rate USD / INR of 61.1471, 65.4611 and 67.0896 for Fiscal Year 2015, Fiscal Year 2016 and Fiscal Year 2017 respectively. (1) Capital Expenditure = Cash used in purchase of plant, property and equipment. (2) In Fiscal Year 2016, cargo considered from the date of commencement of operations at Kattupalli Port, on an interim basis (i.e., from 1 November 2015). (3) In-principle agreement entered into for Kattupalli with L&T, APSEZ is currently acting as interim operator. Subject to certain closing conditions by June 30, 2017.

Capital Expenditure (1)

(US$ mn)

Cargo Split Across Ports (%)

– Capex to improve asset utilization

and realization from customers

– Potential to grow cargo volumes

without adding new capacity

– “String of ports” from east to west

– Improved infrastructure helps

APSEZ to get embedded into

customer’s supply chain

– Develop assets and improve cargo

growth

• Share of ports other than

Mundra in total cargo growing

• E.g. Kattupalli cargo grew c. 5x

in FY17 post APSEZ

operations(2,3)

Capex: Asset Development, Diversification and Services

295 334

531

FY15 FY16 FY17

Diversification Focus

2

Yielding Volume Growth

77%

23%

67%

33%

FY15 FY17

Mundra Ports Other Ports

FY15 – FY17 CAGR

(%)

Kattupalli cargo increased; 0.9MMT in FY16 to 5.5MMT in FY17 (2,3)

374%

46%

41%

35%

Kandla

Hazira

Mormugao

Dhamra

Significant Room to Increase Capacity Utilization

4.2 MN TEUs 86

MMT 21 MMT

6.7 MN TEUs

189 MMT

50 MMT

Container Bulk Crude

APSEZ FY17 Volumes

APSEZ Capacity

(TEU, MMT)

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kalucharan.swain

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13 13

3

4.3x

3.3x

FY15 FY17

2,900 3,203

Note: Financials for Fiscal Year 2015 are as per Indian GAAP and; for Fiscal Year 2016 and Fiscal Year 2017 as per IND-AS. Average exchange rate USD / INR of 61.1471 and 67.0896 for Fiscal Year 2015 and Fiscal Year 2017 respectively. (1) Net Debt = Total Debt – (Cash and Bank Balances + Current Investments); Total debt excludes corporate guarantees (2) Total Cash = Cash and Bank Balances + Current Investments. (3) Excludes corporate guarantees. Does not include impact of the proposed transaction. USD / INR exchange rate used = 67.0896. (4) FCY = Foreign Currency, LC = Letter of Credit, CP = Commercial Paper, Others includes suppliers credit, Liability component of Compound financial instrument, customers’ bills discounted (5) Funds from Operations = EBITDA – Finance Costs – Taxation. (6) (Short term Borrowing + Current Maturities of Long Term Borrowings) / EBITDA: For Fiscal Year 2015, (214 + 421) / 638 = 1.0x; For Fiscal Year 2017, (378 + 143) / 848 = 0.6x.

Further Deleveraging Achieved Enhanced Debt Maturity Profile

Diversified Sources of Borrowing Strong Cash Flow Generation

Strengthened Financial Profile

137 430

Total Cash (2) (US$ mn)

Net Debt / EBITDA

Total Debt (US$ mn)

21.9% 16.3%

21.9% 20.0%

41.1% 48.1%

15.1% 15.7%

FY15 FY17

<1 year 1 – 2 years 3 – 5 years Due >5 years

Debt Split Across Maturity (%) (3)

Debt Split Across Products (%) (4) Funds from Operations (US$ mn) (5)

– Reduced leverage and enhanced

liquidity position

• Net Debt / EBITDA reduced from

4.3x in FY15 to 3.3x in FY17

– Enhanced debt maturity profile:

• Average residual maturity

increased

• Short term debt / EBITDA

reduced from 1.0x in FY15 to

0.6x in FY17 (6)

– Improved debt mix:

– Related party loans and advances

reduced to NIL

Net Debt / EBITDA (US$ mn, x) (1,2)

417

598

FY15 FY17

33.4% 44.9%

18.1%

22.1% 2.2%

23.4%

25.0%

3.2%

6.2%

6.4% 11.4%

3.7%

FY15 FY17

FCY Bonds FCY Loans Rupee Loans DebenturesFCY LC's CP's Others

14 14

• S&P and Moody’s ratings outlook upgraded to “Stable” on

June 14, 2017(3) and June 19, 2017(3) respectively

• S&P: BBB-; Fitch: BBB-; Moody’s: Baa3(3)

Ratings

Cargo Growth and Diversification

• Cargo growth led by “Diversification Strategy”

• Cargo mix shifting to containers

• JV partnerships, arrangements with shipping lines driving

container volume growth

• Crude, coal: Committed contracts keep volumes resilient

• Long term cargo contributed to c. 62% of cargo in FY17

Strategic Capex Driving Tangible

Growth

• Improved asset utilization and realization from customers

• Significant cargo growth potential without new capacity

• Develop assets and improve cargo growth (E.g. 5x cargo

growth at Kattupalli post APSEZ operations)(1)(2)

• Share of ports other than Mundra in total cargo growing

Strengthened Financial Profile

• Reduced leverage and enhanced liquidity

• Extended debt maturity profile

• Diversified sources of borrowing

• Strong cash flow generation

• Related party loans and advances reduced to NIL

APSEZ’s underlying business further

strengthened in FY17 leading to significant

improvement in operational and financial metrics

APSEZ: Delivering on Performance Metrics

Note: (1) In Fiscal Year 2016, cargo considered from the date of commencement of operations at Kattupalli Port, on an interim basis (i.e., from 1 November 2015). (2) In-principle agreement entered into for Kattupalli with L&T, APSEZ is currently acting as interim operator. Subject to certain closing conditions by June 30, 2017. (3) S&P press release dated June 14, 2017. Moody’s press release dated June 19, 2017. Fitch press release dated February 6, 2017. Other than as set forth herein, the information in each such press release is not a part of this

presentation or the offering circular.

15 15

Operational Highlights

16 16

Delhi Mumbai Industrial Corridor influence area (DMIC)

Dedicated Freight Corridor (DFC)

Mundra/Dhamra – New Delhi

Rail

Road

Pipeline

Strategic Location with Hinterland Connectivity

– APSEZ ports well connected to India's hinterland, global trade routes

– >99% of APSEZ cargo is “Origin & Destination” in nature

– Proximity to DMIC and DFC offers enhanced benefits

– APSEZ ports well positioned to leverage coastal shipping trends 11

APSEZ: Strategically Located Ports with Superior Operations

1.4

4.0

Mundra Major Portsin Western

India

1.8

4.8

Dhamra Major Portsin Eastern

India

Handling Efficiencies

Average Turnaround Time (days) (1)

Operational Efficiency Average Pre-berthing Time (Days) (1)

0.3

1.6

Mundra Major Portsin Western

India

0.6

2.1

Dhamra Major Portsin Eastern

India

– Operating efficiencies Low cost operations Higher margins

– Deep draft: Only Indian port company in India to handle >14,000 TEU container vessels; capability to handle super capesize vessels

– Infrastructure: 37 Berths, 14 Terminals, 2 SPMs, 17 Dredgers, 21 Tugs

Operating Efficiencies Rewarded with Premium Pricing

Note: 1. Source: Update on Indian Port Sector 2015. 2. Major ports in Western India include Mumbai, JNPT, Kandla, Murmugao, New Mangalore and Cochin. Represents weighted average turnaround time and pre-berthing time by cargo handled in Fiscal Year 2015. 3. Major ports in Eastern India include Kolkata, Haldia, Paradip, Vizag, Chennai and V.O Chidambaranar. Represents weighted average turnaround time and pre-berthing time by cargo handled in Fiscal Year 2015.

(2) (3)

(2) (3)

17 17

Container: partnership model with global shipping lines

Growing volumes (Mn TEUs)

Coal: blue-chip and long-term contracts

Stable volumes (MMT)

Crude: long-term customer base

Growing volumes (MMT)

Bulk: (1)

greater diversification

Growing volumes (MMT)

Diversifying cargo mix:

New inland waterways, vibrant north-east petro-

chemicals hub, urbanization's immense need for materials,

will be good for ports

Wider geography:

APSEZ ports connected extensively to India’s

hinterland

Leverage logistics & SEZ:

Chain of port services, evacuation, transport and

industrial clusters

2.9

4.2

FY15 FY17

17

21

FY15 FY17

68 60

FY15 FY17

17

26

FY15 FY17

Global shipping lines: New quality and stable contracts: Strong customer base: Diverse cargo base:

Power NTECL

De-risking Business and Cargo

Note: (1) Represents Other Bulk (excluding coal). (2) Mediterranean Shipping Company

MSC (2)

18 18

Port – led SEZ Development

• 8,481 hectares of notified SEZ land adjacent to Mundra port

• Port of Call for global liners (MSC, CMA-CGM)

• Partial ownership model for APSEZ (50% stake in JVs)

• Diversified Revenues

Upfront: Land lease premium, sale of port assets

Recurring: Lease rentals; Revenue share; marine, handling and evacuation income

One Stop Business Support Services

• Large contiguous land bank: SEZ approvals and clearances in place

• Availability of power

• Connectivity: Mundra port (proximity to global trade routes), connectivity to roads, rail

network and airport

Development of Industry Clusters

• Oil and Gas

• Automobile assembly

• Agricultural commodities

• Textiles

• Heavy engineering

• Solar manufacturing

Development of India's Largest SEZ Increases Port Business

– Annuity-type revenues

– Predictable cash flows

– "Spillover port" revenues

– Minimal CAPEX

– Roster of Quality Clients:

– New and Repeat Customers

MSC (1)

MSC (1)

Note: (1) Mediterranean Shipping Company

lizaline.maharana

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lizaline.maharana

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19 19

Financial Highlights

20 20

63% EBITDA Margin (%)

Revenue from Operations EBITDA (1)

Profit After Tax (2) Return on Capital Employed (3)

Note: Financials for Fiscal Year 2015 are as per Indian GAAP and; for Fiscal Year 2016 and Fiscal Year 2017 as per IND-AS. Average exchange rate USD / INR of 61.1471, 65.4611 and 67.0896 for Fiscal Year 2015, Fiscal Year 2016 and Fiscal Year 2017 respectively. (1) EBITDA = Revenue from Operations – Total Expenses + Depreciation and amortization expense + Finance Costs; EBITDA Margin = EBITDA / Revenue from Operations (2) Profit after Tax = Profit for the period; PAT Margin = Profit after Tax / Revenue from Operations (3) Return on Capital Employed = EBIT / Capital Employed; Capital Employed = Net Debt + Shareholder’s Equity; Net Debt = Total Debt – Cash and Cash Equivalents.

1,006

1,086

1,258

FY15 FY16 FY17

(US$ mn) (US$ mn)

(%) (US$ mn)

638

699

848

FY15 FY16 FY17

64% 67%

38%

PAT Margin (%)

40% 46%

380

436

582

FY15 FY16 FY17

Impressive Earnings and Return Metrics

10.7% 10.3%

12.5%

FY15 FY16 FY17

21 21

Strong Cash Flows and Improved Leverage

Funds from Operations (1) Net Debt / EBITDA (2)

(x) (US$ mn)

417

484

598

FY15 FY16 FY17

EBITDA / Finance Cost (4)

(x)

3.3x

4.1x 4.1x

FY15 FY16 FY17

Note: Financials for Fiscal Year 2015 are as per Indian GAAP and; for Fiscal Year 2016 and Fiscal Year 2017 as per IND-AS. Average exchange rate USD / INR of 61.1471, 65.4611 and 67.0896 for Fiscal Year 2015, Fiscal Year 2016 and Fiscal Year 2017 respectively. (1) Funds from Operations = EBITDA – Finance Costs – Taxation. (2) Net Debt = Total Debt – Cash and Cash Equivalents; Total Debt = Long Term Borrowings + Short Term Borrowings + Current Maturities of Long Term Debt; Cash and Cash Equivalents includes Current Investments. (3) Short Term Debt = Short Term (Current) Borrowings + Current Maturities of Long Term Borrowings. (4) Finance Cost = Gross Interest Expense.

Short Term Debt / EBITDA (3)

(x)

4.3x 4.5x

3.3x

FY15 FY16 FY17

1.0x

1.3x

0.6x

FY15 FY16 FY17

635

Short Term Debt (US$ mn)

920 521

22 22 Note: Ratings in the sequence of Moody’s / S&P / Fitch. Source: Audited financials as per each of the above companies’ publicly available rating reports. (1) Financials for comparable companies are on Last Twelve Month (LTM) basis as on 31st March 2015 for APSEZ (FY15); 31st December 2015 for SIPG; 31st December 2016 for China Merchants, DP World, PSA, Pelindo II; 31st March 2017 for Hutchison PT, APSEZ (FY17). (2) EBITDA = Revenue from Operations – Total Expenses + Depreciation and amortization expense + Finance Costs; EBITDA Margin = EBITDA / Revenue from Operations. (3) Return on Assets = Profit After Tax / Total Assets. (4) Adjusted Free Cash Flow (FCF) Margin = Adjusted FCF / Revenue from Operations. Adjusted FCF = EBITDA – Capex. Capex = Cash used in purchase of plant, property and equipment. (4) Net Debt / EBITDA = (Total Debt – Cash and Cash Equivalents) / EBITDA.

EBITDA Margin (LTM) (1,2) Return on Assets (FY17) (3) Revenue from Operations (3yr CAGR)

Strong Financial Metrics Compared to Peers

Net Debt / LTM EBITDA (4)

31.6%

20.5%

13.7%

11.3%

1.5%

0.9%

(0.4%)

(1.3%)

APSEZ (FY15)(Baa3/BBB-/BBB-)


Pelindo II(Baa3/BBB-/BBB-)

DP World(Baa2/-/BBB)

SIPG(A1/A+/-)

China Merchant(Baa1/BBB+/-)

PSA International(Aa1/AA/-)

Hutchison PT(Baa1/BBB+/-)

67.4%

63.4%

57.0%

51.9%

47.3%

45.2%

35.3%

34.6%








SIPG(A1/A+/-)

9.0%

7.6%

7.2%

6.4%

6.0%

5.6%

3.1%

2.3%


SIPG(A1/A+/-)







5.0x

4.3x

4.0x

3.3x

2.9x

2.1x

1.3x

0.9x








SIPG(A1/A+/-)

APSEZ’s FY16 Net Debt / EBITDA was 4.5x

23 23

A Unique Infrastructure Investment Opportunity

Note: (1) Source: BSE, Bloomberg Generic as on June 16, 2017. (2) ATL refers to Adani Transmission Limited

World Class Infrastructure Asset

Geared to India Growth Story

Solid Track Record of Financial Performance

Professional, Experienced Management Team

Commitment to Maintain Investment Grade Ratings

Strong Execution Capabilities

Recent APSEZ Share Price and T Spread Performance (1)

(April 1, 2016 – YTD)

150

200

250

300

350

400

100

150

200

250

300

Apr-16 Jun-16 Aug-16 Nov-16 Jan-17 Mar-17 Jun-17

ADSEZ 2020 T Spread (bp) ADSEZ 2022 T Spread (bp)

ADSEZ Share Price (INR)

0

50

100

150

0

100

200

300

Apr-16 Jun-16 Aug-16 Nov-16 Jan-17 Mar-17 Jun-17

ADTIN 2026 T Spread (bp) ADTIN Share Price (INR)

May 19, 2017: Rating Outlook Downgrade by Moody’s

Oct 25, 2016: H1 FY17 Results

May 24, 2017: FY17 Results

June 14, 2017: Rating Outlook upgrade by S&P

Recent ATL Share Price and T Spread Performance (1)(2)

June 19, 2017: Rating Outlook upgrade by Moody’s

24 24

Appendix

25 25

(US$ mn) FY15 FY16 FY17

Revenue from Operations 1,006 1,086 1,258

Revenue Growth (%) 26% 8% 16%

Operating Expenditure (368) (387) (409)

EBITDA (1)

638 699 848

EBITDA Margin (%)(1)

63% 64% 67%

Depreciation & Amortisation (149) (162) (173)

EBIT (2)

489 536 676

Finance Costs (192) (172) (208)

Other Income (3)

112 112 155

Profit Before Tax 409 477 623

Tax Expense (29) (43) (43)

Add: Share from Associates, Minority Interest and Gain on sale from Discounted Operations 0 3 1

Profit After Tax 380 436 582

PAT Margin (%) (4)

38% 40% 46%

Note: Financials for Fiscal Year 2015 are as per Indian GAAP and; for Fiscal Year 2016 and Fiscal Year 2017 as per IND-AS. Average exchange rate USD / INR of 61.1471, 65.4611 and 67.0896 for Fiscal Year 2015, Fiscal Year 2016 and Fiscal Year 2017 respectively. (1) EBITDA = Revenue from Operations – Total Expenses + Depreciation and amortization expense + Finance Costs; EBITDA Margin = EBITDA / Revenue from Operations. (2) (EBIT = Revenue from Operations – Total Expenses + Finance Costs (3) Other Income includes interest income. (4) PAT margin = Profit after tax / Revenue from Operations.

Profit and Loss Summary

26 26


Gross Fixed Assets 3,140 3,087 3,413

Goodwill on consolidation 425 404 398

Cash and Equivalents(1)

137 216 430

Other Assets(2)

1,544 2,191 2,255

Total Assets 5,247 5,898 6,497

Shareholders Equity(3)

1,787 2,082 2,633

Total Debt 2,900 3,337 3,203

Other Liabilities(4)

560 479 661

Total Equity and Liabilities 5,247 5,898 6,497

Key Ratios FY15 FY16 FY17

EBITDA / Finance Costs 3.3x 4.1x 4.1x

Total Debt / Equity 1.6x 1.6x 1.2x

Net Debt / EBITDA

4.3x 4.5x 3.3x

Net Indebtedness / EBITDA (5)

4.5x 5.1x 3.5x

Note: Financials for Fiscal Year 2015 are as per Indian GAAP and; for Fiscal Year 2016 and Fiscal Year 2017 as per IND-AS. Average exchange rate USD / INR of 61.1471, 65.4611 and 67.0896 for Fiscal Year 2015, Fiscal Year 2016 and Fiscal Year 2017 respectively. (1) Includes current investments. (2) Includes Net Deferred Tax Assets. (3) Shareholders’ Equity includes Minority Interest. (4) Other Liabilities includes Net Deferred Tax Liabilities. (5) Net Indebtedness includes Corporate Guarantees and Bank Guarantees.

Balance Sheet Summary

27 27


Operating Profit Before Working Capital Changes 645 692 896

Working Capital Changes (Trade Receivable / Trade Payable / Inventory) (12) (27) 10

Other Working Capital Changes and Taxes Paid (133) (301) (310)

Cash flow from Operating Activities (A) 500 364 597

Capital Expenditure

(1) (295) (325) (565)

Other investing activities (net) (112) (310) 181

Cash flow from Investing (B) (406) (634) (384)

Interest Expenditure (196) (188) (162)

Change in Debt 209 654 (11)

Other financing activities (net) (51) (134) (24)

Cash flow from Financing (C) (39) 332 (197)

Change in Cash and Cash Equivalents (A+B+C) 55 61 15

Opening Cash and Cash Equivalents 25 68 126

Closing Cash and Cash Equivalents 79 129 142 (2)

Note: Financials for Fiscal Year 2015 are as per Indian GAAP and; for Fiscal Year16 and Fiscal Year 2017 as per IND-AS. Average exchange rate USD / INR of 61.1471, 65.4611 and 67.0896 for Fiscal Year 2015, Fiscal Year 2016 and Fiscal Year 2017 respectively. (1) Capital Expenditure = Cash used in purchase of plant, property and equipment. (2) Includes cash and cash equivalents of US$2mm pursuant to acquisition of subsidiary.

Cash Flow Summary

28 28


Revenue from operations 1,006 1,086 1,258

Less: Total Expenses 709 721 790

Add: Depreciation and Amortisation 149 162 173

Add: Finance Costs 192 172 208

EBITDA 638 699 848

Less: Depreciation and Amortisation 149 162 173

EBIT 489 536 676


EBITDA 638 699 848

Less: Finance Costs 192 172 208

Less: Income Tax Expenses 29 43 43

Funds from Operations 417 484 598


Long Term Borrowings 2,265 2,417 2,682

Short Term Borrowings 214 479 378

Current Maturities of Long Term Debt 421 441 143

Total Debt 2,900 3,337 3,203

Less: Cash and Bank Balances 104 195 295

Less: Current Investments 33 21 135

Net Debt 2,763 3,120 2,772

Net Debt Reconciliation

Funds from Operations Reconciliation

EBITDA and EBIT Reconciliation

Note: Financials for Fiscal Year 2015 are as per Indian GAAP and; for Fiscal Year 2016 and Fiscal Year 2017 as per IND-AS. Average exchange rate USD / INR of 61.1471, 65.4611 and 67.0896 for Fiscal Year 2015, Fiscal Year 2016 and Fiscal Year 2017 respectively.

Reconciliation of GAAP Financials to Non-GAAP Items

29 29

Reconciliation of Ind AS Financials to Indian GAAP Financials

Profit and Loss Summary (FY16) (US$ mn) Indian GAAP Adjustments Ind-AS

Revenue from operations 1,108 (22) 1,086

Operating Expenditure 398 (11) 387

EBITDA (1)

710 (12) 699

EBITDA Margin (%)(1)

64% 64%

Depreciation & Amortisation 165 (3) 162

EBIT (2)

546 (9) 536

Finance Costs 168 4 172

Other Income (3)

105 7 112

Profit before tax 482 (6) 477

Tax Expense 50 (7) 43

Add: Share of Profit / (Loss) from Associates and Joint Ventures (1) 4 3

Profit after tax 432 5 436

PAT Margin (%) (4)

39% 40%

Balance Sheet Summary (FY16) (US$ mn) Indian GAAP Adjustments Ind-AS

Gross Fixed Assets 3,183 (97) 3,087

Goodwill on consolidation 397 7 404

Cash and Equivalents(5)

218 (2) 216

Other Assets(6)

2,215 (24) 2,191

Total Assets 6,013 (116) 5,898

Shareholders Equity(7)

2,042 40 2,082

Long Term Borrowings 2,491 (74) 2,417

Current Borrowings 488 (9) 479

Other Liabilities (including current maturities of long term borrowings)(8)

993 (73) 920

Total Equity and Liabilities 6,013 (116) 5,898

Note: (1) EBITDA = Revenue from Operations – Total Expenses + Depreciation and amortization expense + Finance Costs; EBITDA Margin = EBITDA / Revenue from Operations.(2) EBIT = Revenue from Operations – Total Expenses + Finance Costs (3) Other Income includes interest income. (4) PAT margin = Profit after tax / Revenue from Operations. (5) Includes current investments. (6) Includes Net Deferred Tax Assets. (7) Shareholders’ Equity includes Minority Interest. (8) Other Liabilities includes Net Deferred Tax Liabilities.

30 30

Sustainability

1. APSEZ released its first report in October 2016

2. APSEZ conducted Carbon Foot print Assessment – At Mundra & Hazira.

3. APSEZ initiated stakeholder engagement – Perception study

4. APSEZ enters into renewable energy projects to reduce thermal energy use

• Windmill project at Rajmol District, Jasdan Gujarat for captive consumption of Dahej, Hazira and Kandla ports

adani ports and special economic zone limited€¦ · fitch press release dated february 6, 2017....

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