May, 2020 Adani Ports and SEZ Limited Updated - May, 2020
Group Profile 04-07 Company Profile 09-11 APSEZ Credit Story 12-23 ESG 25-29 Annexures 31-46
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Transport & Logistics Energy & Utility Adani Adani Portfolio Portfolio • Philosophical shift fromB2B 63.3% 100% 75% 75% to B2C businesses – APSEZ SRCPL ATL AGEL • AGL – Gas distribution Port & Logistics Renewables Rail T&D network to serve key geographies across India 100% 75% 37.4% • AEML – Electricity AGL AAPT 75% distribution network APL IPP Gas DisCom Abbot Point that powers the AEL financial capital of India Incubator • Adani Airports – To operate, manage and develop six airports in the country 100% 100% 100% 100% AAHL ATrL AWL Data • Locked in Growth 2020 – Airports Roads Water Centre • Transport & Logistics - Airports and Roads ~USD 21 bn 1 • Energy & Utility – Water and Data Centre Combined Market Cap APSEZ, ATL, AGEL & AEML- only Private sector Infrastructure IG issuers in India 4 1. As on April 30, 2020, USD/INR – 75.10 | Note - Percentages denote promoterholding Light blue colour represent public traded listed verticals
Development Operations Post Operations Phase Origination Site Development Construction Operation Capital Mgmt Analysis & Life cycleO&M Redesigning the Site acquisition Engineering & market planning capital structure of design Concessions intelligence the asset Asset and regulatory Sourcing & Activity Management plan Operational phase Viability analysis agreements quality levels funding consistent Investment case Strategic value Equity & debt with asset life development funding at project Redefining the Envisaging Complex O&M optimisations Successfully placed 7 space e.g. evolution of sector developments on e.g. Solar plants issuances totalling Mundra Port e.g. Adani time & budget e.g. ~USD4Bn in FY20 Transmission APL All listed entities Performance maintain liquidity cover of 1.2x- 1.8x for FY21. Focus on liquidity planning ensures remaining stress free. Low capital cost, time bound & quality completion providing long term stable cashflow & enhancedRoE 5
Successfully applied across Infrastructure & utility platform Development at large scale & within time and budget India’s Largest Longest Private 648 MW Ultra Mega Largest Single Location Commercial Port HVDC Line in Asia Solar Power Plant Private Thermal IPP (at Mundra) (Mundra – Dehgam ) (at Kamuthi, TamilNadu) (at Mundra ) Key APSEZ ATL AGEL APL Business Excellence in O&M – Constructed and Highest Margin High Availability Highest benchmarked to Commissioned in among Peers in the Billed availability availability Model global standards 9 months World of 89% 5 among Peers EBITDA margin:90% 1,4 Attributes EBITDA margin:65% 1,2 EBITDA margin: 91% 1,3 Diverse financing sources – only Indian infrastructure portfolio with four (4) Investment Grade PSU 55% Private Banks 31% (IG) issuers Private Banks 31% Bonds 31% March September Bonds 14% PSU 38% 2016 2019 Note: 1 Data for FY19; 2 Excludes forex gains/losses; 3 EBITDA = PBT + Depreciation + Net Finance Costs – Other Income; 4 EBITDA 6 Margin represents EBITDA earned from power sales and exclude other items; 5 FY20 data for commercial availability declared under long term power purchase agreements; Include listed Group companies
Ports Logistics SEZ • Largest integrated logistics player • Nine operating Ports, ~410 MMT • Large scale ‘ready to setup’ in India. of augmented capacity in India. industrial land (SEZ) • Operating 60+ rakes, 5 IFTs and Development • Hinterland reach of 60%-70% • Land Bank of 10,000 ha. at 400,000 sq.ft. of warehouse • Targeting East and West Coast Mundra, Dhamra and Kattupalli space. Parity ESG Best in Class Efficiency Symbiotic Integration • Ports, SEZ and logistics • Embedded ESG Framework for • In Container 30 Moves/hour integrated service removes Operations enhanced value creation the distinction between Port • Port EBITDA margin ~70% and Customer gate. Capital Management Debt Capital Program Efficient Use of Capital • IG rated since FY16 Access to international markets: • ROCE greater than cost of Value Creation • Reduction in interest cost by capital. • ROCE, one of the highest ~150 bps. • Elongated Maturity among global Peers. • Pre-tax project IRR of 16% 7
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Tech enabled operations Ports One to ten in twenty years String of Ports Consumer facing yet Ubiquitous to Ports of Prosperity customer trajectory SEZ "Ports to Platform” ~10k+ Ha of land bank Network dominance, Competitiveness is the moat Integrated Logistics Intimate connection (CTO to IWW and AFS an organic to customer supply evolution) chain 9
Jammu Kashmir Himachal Pradesh (In USD Billion) Arunachal Punjab Pradesh Uttaranchal Region FY19 FY25 Haryana West 1290 2520 Sikkim Rajasthan Uttar East 438 823 Assam Nagaland Pradesh Meghalaya Bihar South 706 1359 Manipur Jharkhan Total 2434 4702 Mizoram Gujarat West Madhya d Bengal Pradesh Tripura Chattisgarh Orissa • Maharashtra Agility of logistics business brings flexibility in port business, improves stickiness of cargo. Andhra Pradesh & Telangana Karnataka • Covering 70% of India’s economic hinterland. West Region • Economic hinterland reach in South Region GDP terms will increase 2x. Tamil Nadu Kerala East Region 10 *Source : Internal Estimates
Rail Volume (lakh TEUs) Terminal Capacity (lakh TEUs) 2007 3.3 4.0 1.5 Terminal Volume (lakh TEUs) 4.0 Warehousing Capacity (lakh sqft.) 2019 4.0 2020 2007 3.3 5.0 2.4 2007 8 8 Barges 2018 14 14 Logistics Park 2019 2020 Silos 4 5 2018 India’s largest and diversified private rail operator 2020 11
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Consistent investment grade Elongated debt maturity profile Liability Management- rating Natural Hedge • Increased to 5 years. • • Since FY16, capped at sovereign. Debt mix - FX 68% andINR 32%. • We are moving towards • • unsecured debt (46% in US dollar denominated income of Earnings growth and free cash flow generation to fortify FY16 to 71% in FY20). $430mn per annum provides naturalhedge with 2.9x coverage. coverages. Robust capital allocation policy Optimized Capital Structure Reduce Cost of Capital • Pre tax project IRR of >16%. Desired level: Net Debt/EBITDA • Cost of Debt is at 6.4% per 3.0x - 3.5x. Currently at 2.9x. annum, • Rationalization of assets for improving ROCE. • Timely and quality disclosure and active guidance policy to • Economic value add enshrined increase predictability. into all capital deployment. 13
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Gross Debt, Net Debt & Net Debt to EBTIDA Product Mix 35 8.0x Thousands 7.0 4% 1% 29 7.0x 14% 30 6.4 6.3 9% 27 3% 5.7 7% 6.0x 5.4 25 22 22 21 21 17% 21 20 5.0x 19 20 18 47% 4.0x 4.4x 15 3.0x 3.4x 2.9x 2.9x 10 61% 17% 2.5x 2.0x 5 1.0x 20% - 0.0x FY16 FY17 FY18 FY19 FY20 Mar-16 Mar -20 Gross Debt Net Debt Net Debt to EBITDA Interest (%) USD Bond Rupee Bond ECA/ECB RTL CP PCFC&STL Buyers Credit • Net debt maintained at similar levels. • Increased EBITDA resulted in improved leverage ratio from 4.4x in FY16 to 2.9x in FY20. • Net Debt to EBITDA at 2.9x, maintained below our desired level of 3x-3.5x. • US Dollar bond increased from 20% to 61%, of debt portfolio, commensurate with increase in FX revenue. 15 * EBITDA excludes forex
Long vs. Short Term FX vs. INR Debt FY16 FY20 FY16 FY20 26% 5% 32% 32% Foreign Currency Long Term Indian Short Term Currency 68% 68% 95% # 74% Secured vs. Unsecured FY20 FY16 • Shift towards long term debt (95%), 29% This improves maturity and liquidity position. 54% • Debt profile commensurate with asset profile 46% Secured • Unsecured debt increased from 46% to 71%. Unsecured • FX to INR debt maintained at 68% 71% 16
FX Revenue and Debt Maturity # , Coverage 3000 350% 2.9x 300% 2.8x 2,652 2500 2.7x Coverage of forex debt maturity # in terms of • 250% 2,163 dollar earnings has increased from 0.7x in 2,129 2000 1,978 FY16 to 2.9x in FY20. 1,888 200% 1500 • 1.5x Annual FX earnings provides natural hedge 150% to foreign currency maturity. 1000 100% 0.7x 430 410 500 371 330 50% 273 218 391 151 150 134 19% 17% 17% 16% 14% 0 0% FY16 FY17 FY18 FY19 FY20 FX Revenue Annual FX Debt Maturity Total FX Debt FX Rev/Total FX Debt FX Maturity Coverage 17 #Payouts of Annual Debt maturity are net of refinance * EBITDA excludes forex
Marque names in investors base Presence in global debt capital market Elongating Maturity & Offering the entire yield curve to Reducing spreads the investors. Debt Management Credit quality ensures higher subscriptions to issuances Highest Credit quality & Stable Rating Covenants to policy guidelines 18
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