Rumo Sa · BMFBOVESPA:RAIL3
Rumo Sa — Investor Presentation (August 2016)
22 slides from Rumo Sa's investor presentation, August 2016
Slide 1: Institutional Presentation 2016
Institutional Presentation 2016 Caixa para descrição.
Slide 2: Disclaimer
Disclaimer This presentation contains estimates and forward-looking statements regarding our strategy and opportunities for future growth. Such information is mainly based on our current expectations and estimates or projections of future events and trends, which affect or may affect our business an
Slide 3: Agenda
Agenda 1 Rumo Overview 2 Strong Business Case 3 Turnaround Strategy in Place 4 Financial and Operational Update 5 Closing Remarks 3/23
Slide 4: Timeline
Timeline 2008 2009 Rumo creation Rumo & ALL agreement 2010 Rumo private placement by TPG and Gávea 2014 Rumo & ALL merger proposal 2015 Rumo ALL merger conclusion 1999 2004 2008 ALL creation ALL IPO Rondonópolis project 2016 Rumo’s capital increase 2013 Conclusion of Rondonópolis project 2010 1996-1
Slide 5: Business Model Logics
Business Model Logics Nonreplicable Footprint Rumo is the largest independent Soybean Sugar cane railroad operator in Brazil Corn Covers the 3 main exporting corridors of agricultural commodities Santos Paranaguá São Francisco Rio Grande GDP Growth: 2010-2013 (Accumulated %) 21,9% 17,0% 10,2% 8,6% 9
Slide 6: Shareholders Structure
Shareholders Structure 72.23% Members of Shareholders Agreement Others Free Float 28.27% 3.65% 8.02% 7.12% 52.95% North South Containers Operation Operation Operation Source: Rumo 08.12.2016 Note: Rumo’s business units not representing individual companies 6/23
Slide 7: Agenda
Agenda 1 Rumo Overview 2 Strong Business Case 3 Turnaround Strategy in Place 4 Financial and Operational Update 5 Closing Remarks 7/23
Slide 8: Strong Business Case
Strong Business Case Nonreplicable Business Model Extremely low demand risk Huge entry barriers Most competitive logistics option for the region Large cost reduction opportunities with capacity increase Company funding fully addressed until 2018 8/23
Slide 9: Extremely Low Demand Risk
Extremely Low Demand Risk Unserved demand and a growing market assure large growth potential Key Markets Brazil Grain Production Mato Grosso Grain Production Paraná and Mato Grosso do Sul Grain Production ‘000 tons ‘000 tons ‘000 tons +107% +129% +112% 181 48 50 125 37 Santos 27 87 Paranaguá 21 23 S
Slide 10: Extremely Low Demand Risk (Cont'd)
Extremely Low Demand Risk (Cont’d) 80% of Rumo’s demand is grounded on the Brazilian agricultural exports, which keep on growing regardless of macro conditions Grains Sugar Fertilizer (Soybean and Corn) (Sugar) (Brazilian imports) (in million tons) (in million tons) (in million tons) 9.1% 8.8% 2.0%
Slide 11: Huge Entry Barriers
Huge Entry Barriers Asset Base 70% 90% 4 concessions to explore with exclusivity the rail transportation in the region Volumes Net Of the exported Of the sugar is Network Extension Concession (RTK Revenues grains uses exported through the Maturity mm) (R$ mm) the South and Santos and North 754 km 20
Slide 12: Large Cost Reduction Opportunities With Capacity Increase
Large Cost Reduction Opportunities With Capacity Increase Most competitive logistics option for the region… PRE MERGER TRAIN CURRENT TRAIN STATE OF THE ART TRAIN Example: Rondonópolis to Santos Port 73 railcars 80 railcars 120 railcars ~2.0x Volume per train 5,375 6,400 10,800 trip (tons) # Trips pe
Slide 13: Company funding fully addressed until 2018
Company funding fully addressed until 2018 Funding will be used to enhance Rumo’s balance sheet and support its long term investment plan Capital Increase Debt Restructuring BNDES Credit Reinforce company’s capital structure Reschedule debt maturity of next 3-years Access to new credit lines Post Mo
Slide 14: Agenda
Agenda 1 Rumo Overview 2 Strong Business Case 3 Turnaround Strategy in Place 4 Financial and Operational Update 5 Closing Remarks 14/23
Slide 15: New management …new mindset
New management …new mindset Experienced team with a proven track record already reflecting better results New Management KPIs Improvement in 2015 vs. 2014 Julio Fontana | Chief Executive Officer ► Bachelor’s degree in mechanical engineering and in business administration from Mackenzie and a master’
Slide 16: New commercial approach and solid client portfolio
New commercial approach and solid client portfolio The new commercial approach, combined with a strong portfolio of clients, ensure revenues and predictable cash flows New Commercial Approach Strong and Diversified Client Base Narrowing the relationship with the current base of clients Grains Suga
Slide 17: 9-Months On Track
9-Months On Track Less than a year after the merger the turnaround is already yielding results Operational Figures Financial Figures Transported Volume (RTK¹ mln) Net Revenues (R$ mm) 14% 5% 4,802 44,910 4,217 42,958 2014 2015 2014 2015 Loading Volume at Santos Port (tons mm) EBITDA and EBITDA Margi
Slide 18: Agenda
Agenda 1 Rumo Overview 2 Strong Business Case 3 Turnaround Strategy in Place 4 Financial and Operational Update 5 Closing Remarks 18/23
Slide 19: Consolidated Results | Operations
Consolidated Results | Operations Transported Volume (mm RTK) Transported Volume Breakdown +3.1% Others 25.0 00 20,285 20,910 Sugar 4.0% 8.3% 20.0 00 Industrial 4,551 3,647 16.4% 15.0 00 10.0 00 Containers 15,734 17,263 5.00 0 5.5% d 6M15 - 6M15 6M16 Gains Agricultural products Industrial products 6
Slide 20: Financial Update 1Q16
Financial Update 1Q16 Net Revenue (R$ mm) Gross Profit (R$ mm) and Gross Margin (%) 2,562 33.0% +17% 30.6% 2,190 1000 35,0% 30,0% 800 +9% 25,0% 600 20,0% 783 722 400 15,0% 10,0% 200 5,0% 0 0,0% 6M15 6M16 6M15 6M16 EBITDA (R$ mm) and EBITDA Margin (%) EBITDA – Recurring CAPEX (R$ mm) 1800 50,0% 693 4
Slide 21: Agenda
Agenda 1 Rumo Overview 2 Strong Business Case 3 Turnaround Strategy in Place 4 Financial and Operational Update 5 Closing Remarks 22/23
Slide 22: Investment Highlights
Investment Highlights Rumo has all the elements to support its business model and leverage its market position Presence in the most important grain producing regions in Brazil Client base focused in exports: natural hedge against domestic Extremely low demand issue volatility from agribusiness