1Q 2020 Investors’ Briefing May 7, 2020
Our Response to COVID-19: Four Areas of Focus § Protecting lives and livelihoods, our people remain our No.1 priority § Continuing to provide excellent services to our customers § Living by our values: providing support and care for our host communities § Implementing measures to ensure ICTSI’s continued agility and financial resilience Swift and significant action taken to protect our people and our business 2
COVID-19 UPDATE Swift action taken to protect our people and ensure A strong and resilient business business continuity Diverse Driving Focused on Development of Shift to online revenue operational gateway cargo safety protocols transactions streams efficiency Agility Strong Enhanced Sound capital Tactical capex government Opex rebase liquidity structure review relations management § ICTSI terminals around the world remain fully operational § Volumes reduced in March due to lower business activity and demand for non-essential goods; further weakness is expected § Certain ports have yet to feel the impact of COVID-19 related lockdowns 3
Highlights Financial and Operational Performance Net income attributable to Volume Revenues EBITDA equity holders +1% -2% -5% -18% EBITDA Margin 56% § Volume flattish due to decline in trade activities caused by the impact of COVID-19 pandemic on global trade § EBITDA and EBITDA Margin lower due to lower operating revenues § Net income down due to lower operating income, higher interest on concession rights payable with the acquisition of the new terminal in Rio De Janeiro, Brazil and COVID-19 related expenses 4
Agenda 01 Recent Financial Performance 02 Liquidity and Capital Resources 03 Other Matters 04 Questions and Answers 05 Appendix 5
01 Recent Financial Performance
Volume and Revenue Volume Revenue (in TEU) (in US$ ‘000) 2,325,540 2,478,672 2,508,986 325,380 383,784 375,776 18% -2% 7% 1% +27% -8% 196,248 (51%) 180,410 (48%) +5% -3% 1,264,641 (50%) 1,298,770 (52%) 1,241,309 (53%) 155,038 (48%) +8% +11% 120,446 (32%) 112,015 (29%) 787,947 (31%) +6% 745,615 (30%) +7% 101,364 (31%) 696,850 (30%) -1% +9% 75,521 (20%) 74,920 (20%) +5% 456,398 (18%) 68,978 (21%) 434,287 (18%) 387,381 (17%) +12% 1Q 2018 1Q 2019 1Q 2020 1Q 2018 1Q 2019 1Q 2020 Asia Americas EMEA Asia Americas EMEA 7
Consolidated P&L Highlights 1Q 2019 1Q 2020 % Change (In US$ 000, except Volume and EPS) Volume slightly increased 1% primarily due to contribution of ICTSI Rio, a new terminal in Rio de Janeiro in Brazil, and 2,478,6472 2,508,986 +1% Volume (in TEU) new services at certain terminals; tapered by decline in trade activities due to the impact of COVID-19 pandemic on global trade; Organically, volume decreased 1% Revenues were 2% lower as trade activities declined due to the impact of COVID-19 pandemic and lockdown 383,784 375,776 -2% Gross Revenues from Port Operations restrictions; and lower revenues from storage; partially tapered by the contribution of ICTSI Rio; tariff adjustments and new services at certain terminals; Organically, revenues were 5% lower Cash Opex 6% higher due to the cost contribution of ICTSI Rio; government-mandated and contracted salary rate adjustments at certain terminals; increase in information technology-related expenses and unfavorable translation 112,028 119,040 +6% Cash Operating Expenses impact of PHP; partially tapered by continuous cost optimization measures and favorable translation impact of BRL, AUD, MXN & PKR EBITDA 5% lower mainly due to lower operating revenues, partially tapered by positive contribution of ICTSI Rio; 222,543 212,153 -5% EBITDA EBITDA margin decreased to 56% from 58% 165,151 156,423 -5% EBIT Financing charges and other expenses increased 17% primarily due to COVID19-related expenses and the absence of 28,322 33,182 +17% Financing Charges and Other Expenses capitalized borrowing cost related to the Phase 2 expansion project in Basra, Iraq in 2019 Net income attributable to equity holders down 18% due to lower operating income, increase in interest on concession Net Income Attributable 72,403 59,597 -18% rights payable and COVID-19 related expense; partially tapered by decrease in equity in net loss of joint ventures and to Equity Holders an associate 0.028 0.023 -19% Fully Diluted EPS 8
Financing Charges & Other Expenses 1Q 2019 1Q 2020 % Change (In US$’ 000) Increased primarily due to COVID19-related expenses and the absence of capitalized 28,322 33,182 +17% Financing Charges & Other Expenses borrowing cost related to the Phase 2 expansion project in Basra, Iraq in 2019 § Interest Expense on Loans/Bonds 24,664 24,711 +0.2% § Capitalized Borrowing Cost (665) - +100% § Amortization of Debt Issue Cost 1,764 1,800 +2% § Other Expenses 2,559 6,671 +161% Increased due to the US$300M term loan facility and US$110M 18-month loan of ICTSI 1,601,501 1,699,309 +6% Average Outstanding Debt Balance Global Finance B.V. tapered by the prepayment of the Euro-loan 4.7 yrs 4.3 yrs Average Remaining Tenor 4.4% p.a. 4.3% p.a. Average Cost of Debt (post CIT) 9
Proactive FX Risk Management ICTSI’s revenue and cash expenses are favourably matched, which provides a natural currency hedge that mitigates against volatility attributable to FX movements Revenue Currency by Subsidiary Cash Expense Currency by Subsidiary US$ Revenues from Port Operations (1Q 2020 Revenue Breakdown by Currency) Subsidiaries USD EUR Local Currency Subsidiaries USD EUR Local Currency MICT 41% 59% PHP MICT 30% 70% PHP PTMTS 100% IDR PTMTS 100% IDR Others EUR 8% 4% YICT 100% CNY YICT 100% CNY BRL OJA 68% 32% IDR OJA 18% 82% IDR 6% PICT 82% 18% PKR PICT 22% 78% PKR MXN 7% USD Gross Revenues SBITC/ISI 49% 51% PHP SBITC/ISI 27% 73% PHP 48% US$376M AUD SCIPSI 100% PHP SCIPSI 100% PHP Asia Asia 7% DIPSSCOR 100% PHP DIPSSCOR 100% PHP PHP HIPS 100% PHP HIPS 100% PHP 20% MICTSI 100% PHP MICTSI 100% PHP BIPI 100% PHP BIPI 4% 96% PHP LGICT 25% 75% PHP LGICT 100% PHP Expenses favourably Matching Revenues VICT 100% AUD VICT 100% AUD (1Q 2020 Revenue Breakdown by Currency) SPICTL/MITL 100% PGK SPICTL/MITL 100% PGK 1% BCT 65% 12% 23% PLN BCT 8% 91% PLN MICTSL 100% MICTSL 2% 40% 58% MGA Others EMEA EMEA 18% BICT 100% BICT 15% 85% GEL USD AGCT 79% 21% HRK AGCT 6% 94% HRK 33% IQD 4% BGT 80% 20% IQD BGT 19% 81% IQD MXN Cash Expenses 7% US$245M IDRC 100% IDRC 96% 4% CDF BRL 3% TSSA 100% BRL TSSA 97% BRL 9% AUD CGSA 100% CGSA 100% PHP Americas Americas 9% 20% OPC 100% OPC 53% 47% HNL CMSA 34% 66% MXN CMSA 5% 95% MXN TECPLATA 100% TECPLATA 5% 95% ARS Note RIO 34% 66% BRL RIO 2% 98% BRL Total Cash Expense includes Cash Opex, Port Fees, Realized FX losses, Interest Cost, Perp Distribution, IFRIC Interest, Other “cash” expenses and Income tax paid 10
FX Movement FX Movement since January 2015 and bottom line effect on ICTSI’s margins May-15 May-16 May-17 May-18 May-19 Mar-15 Sep-15 Nov-15 Mar-16 Sep-16 Nov-16 Mar-17 Sep-17 Nov-17 Mar-18 Sep-18 Nov-18 Mar-19 Sep-19 Nov-19 Mar-20 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 90 110 130 150 170 190 Currency BRL COP PKR AUD MXN RMB EUR PHP January-March 4.47 3,551.71 156.02 0.66 20.00 6.98 1.10 50.83 Ave1Q 2020 3.77 3,134.00 139.69 0.71 19.20 6.75 1.14 52.37 Ave1Q 2019 15.8% 11.8% 10.5% 8.2% 4.0% 3.4% 3.0% -3.0% Growth (%) 210 11 BRL COP PKR AUD MXN RMB EUR PHP
Yield/TEU and EBITDA Margin Yield/TEU Evolution 155 -1.82 2.23 150 3.81 149.77 145 145.55 140 Yield/TEU Dec 2019 Organic New Terminal Forex Yield/TEU Mar 2020 EBITDA Margin Evolution 57% -0.40% 0.12% 0.70% 56% 56.46% 56.04% 55% EBITDA Margin % Organic New Terminal Forex EBITDA Margin % Dec 2019 Mar 2020 12
Yield/TEU Comparison 1Q 2019 1Q 2020 % Change 2,479 2,509 +1% Volume (TEU ‘000) 384 376 -2% Revenues (US$ millions) 155 150 -3% Yield/TEU (US$) 223 212 -5% EBITDA (US$ millions) 58% 56% EBITA Margin FX: Negative impact of AUD, BRL, MXN, -2 tapered by positive impact of PHP -5 Lower revenues from storage and ancillary services, partially tapered by tariff adjustments at certain terminals -3 and contribution of new terminal ICTSI Rio 13
02 Liquidity and Capital Resources
Balance Sheet Summary Financial Ratios Dec 31, 2019 Mar 31, 2020 (In US$ millions)0 Intangible and Property and Equipment 3,590 3,373 Dec 31, 2019 Mar 31, 2020 Gearing: Debt/SHE 1.02 1.25 Lease Assets 576 483 Current Ratio: Current Assets/Current 0.72 0.80 Cash and Cash Equivalents 235 450 Liabilities Covenant Leverage Ratio: Other Current and Non-current Assets 1,351 1,326 2.10 2.36 Debt/EBITDA DSCR: EBITDA/ (Interest + Scheduled Total Assets 5,751 5,633 4.61 2.36 Principal Payments) Total Short-term and Long-term Debt 1,663 1,833 Concession Rights Payable 661 634 Lease Liabilities 1,189 1,006 Other Current and Non-current Liabilities 604 692 Total Liabilities 4,116 4,164 Total Equity 1,635 1,468 15
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