Transcript Note

Wilson Sons
Mkt cap = US$ 493mn ou R$ 1,059bn
Net Debt = US$ 15.8mn
Revenues 09E = US$ 551.9mn
EBITDA 09E = US$ 119mn
Fernanda Torós
May 2009
The Port Industry
G ro w t h D r i v e r s f o r t h e B r a z i l i a n Po r t S e c t o r
•
Change in the transportation matrix to a more efficient mix:
away from road and towards cabotage and rails.
•
Increased globalization and openness to world trade.
•
Growth in container use, which is expected to facilitate trade.
•
Evolution in the size of container ships: the larger the ship, the
larger the efficiency over long distances, and the larger the
volume of cargo handled at the port for a given anchored ship.
Tr a n s p o r t a t i o n M a t r i x
•
For a country with 7,400 km of navigable coastline, cabotage shipping has excellent growth
potential, because it offers competitive advantages compared to the highways, with lower freight
charges per ton handled and higher safety and reliability.
P ro s p e c t s f o r c o n t i n u i n g g ro w t h i n C a b o t a g e
C o n t a i n e r H a n d l i n g G ro w t h R a t e s
Advantage of Containers
Advantages of containers over the transportation of goods as general cargo:
•
reduction in cargo losses, damage and theft;
•
faster transport and storage;
•
reduction in cargo-handling manpower;
•
facilitation of intermodal transport;
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possibility of storing goods in uncovered areas;
•
globally standardized packaging;
•
and better logistical capillarity in terms of ground distribution.
Evolution in the Size of Container Ships
Te n b i g g e s t c o n t a i n e r s h i p s
The Oil & Gas Industry
Supply-Demand Imbalance in the Oil Industr y
H i g h - Po t e n t i a l Po r t f o l i o i n a Po l i t i c a l l y S t a b l e
Country
Pe t ro b r a s P ro d u c t i o n P l a n s a r e e x p e c t e d t o b e n e f i t
t h e w h o l e s u p p l y c h a i n i n t h e o i l i n d u s t r y. . .
J u s t t h e P r e - s a l t O i l P ro d u c t i o n i s E x p e c t e d t o
Generate the Following...
Pe t ro b r a s i s a L e a d i n g O p e r a t o r i n F l o a t i n g
P ro d u c t i o n S y s t e m s – a n d t h i s m ay g ro w. . .
Note: FPSO stands for Floating Production, Storage and Offloading vessel.
Pe t ro b r a s i s E x p e c t e d t o C r e a t e O p p o r t u n i t i e s f o r
M a n y P l ay e r s A l o n g t h e S u p p l y C h a i n . . .
The Company
Wilson Sons- Over view
Divisional Summary
•
•
DIVISIONAL SUMMARY - 2008 - US$ mn
Net Revenues
Towage
147.1
Port Terminals
170.6
Logistics
89.3
Offshore
21.6
Agency
17.7
Other
52.3
Total
498.6
EBITDA EBITDA mg
54.5
37.0%
63.4
37.1%
6.6
7.4%
12.9
59.7%
3.3
18.8%
(18.0)
122.6
24.6%
DIVISIONAL SUMMARY - 2008 - %
Net Revenues
Towage
29%
Port Terminals
34%
Logistics
18%
Offshore
4%
Agency
4%
Other
10%
Total
100%
EBITDA
44%
52%
5%
11%
3%
100%
Note: Even though the company has announced its intentions to grow in the Offshore segment
by taking advantage of the future opportunities in the Oil&Gas industry, the valuation model is
conservative and does not include assumptions concerning an aggressive growth in the Offshore
segment. The relative importance of each segment in Net Revenues and EBITDA have not been
substantially changed.
Note: “Other” includes Shipyard and Dragaport.
Client Base and Synergy Among Segments
•
•
•
The client base is diversified. Note, however, that the
main clients are the shipowners (“armadores”).
Currently, there are more than 7,000 active clients in
their portfolio, many of whom make use of services
from more than one business segment, thus
confirming the synergy and complementary nature of
the Company’s operations.
The top 100 largest clients, for ex, are served by at
least two business segments. Of these, 66 are served
by 3 segments, and 28 of them by 4 service areas.
Locations of its services
•
Terminals:
•
Brasco
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Tecon Salvador
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Tecon Rio Grande
Po r t Te r m i n a l s S e g m e n t
Te c o n R i o G r a n d e
Te c o n S a l v a d o r
B r a s c o Te r m i n a l – N i t e r ó i , R J
•
•
Brasco’s activities include the
storage of materials, supplies,
and equipment for offshore oil
platforms, such as drilling mud,
cement and chemical products.
Brasco provides other types of
services as well, such as waste
management and container
rental.
To w a g e S e g m e n t
Services:
•
Harbor Towage: Ship Maneuvering, Berthing, and Un-berthing
•
Special Operations: Oceanic Towage, Support to Salvage, and Offloading
Main asset: Tugboats (31 w/ Azimuth propulsion)
Highlights:
•
Largest Tugboat Fleet in South America, with 67 Vessels; 54% Market Share in Brazil
•
Regulatory Protection Ensures Exclusivity to Brazilian Flag Vessels
•
Friendly funding available from FMM (Fundo da Marinha Mercante)
Scale as a Barrier to Entry:
•
•
Demand for tugboats is spread alongside the Brazilian coast, benefiting towage companies with
nationwide coverage
Ability to attend unscheduled demand (spot rates)
Offshore Segment
Main Service:
•
Support to Offshore Oil & Natural Gas Exploration and Production Platforms
Main Asset: Fleet of 5 PSVs
Highlights:
•
Friendly funding available from FMM
•
2 PSVs to be delivered until 2010
•
4 PSVs to be delivered to 3rd parties until 2011
•
US$ 100 million in annual investments over the next 5 years
Competitive Advantage from having its own Shipyard:
•
Control of construction costs, maintenance costs, and delivery schedule
•
Lack of Space Capacity in Brazilian Shipyards
“Bonus” not included in the valuation:
•
Petrobras Capex (2008E –2012E): US$ 112.4 bn. This would benefit Port Terminals and
Offshore segments.
Logistics and Shipping Agency
Logistics
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Main Services: Transport, Handling, Storage, and Distribution
•
Asset light Business, providing Integrated Logistics Solutions
Shipping Agency
•
•
Main Services: Agent and Attorney-In-Fact to Ship-owners, Documentation Services, Control of
Containers, Equipment and Demurrage Control, Services to Vessels while in the Ports (Vessel
Calls), and Sales Offices
Asset Light Business, Intelligence center
Corporate Governance
•
•
•
•
BDR listing at BOVESPA in 2007 (Bermuda-based company)
Wilson Sons has been controlled by Ocean Wilsons Holdings Ltd., a company listed
on the London Stock Exchange for more than 100 years.
100% tag-along to minority shareholders is stated in the Company’s bye-laws – but
may not be enforceable.
Board of Directors: 7 members (1 independent)
Board of Directors
Name
Francisco Gros
William Henry Salomon
José Francisco Gouvêa Vieira
Augusto Cezar Tavares Baião
Felipe Gutterres
Claudio Marote
Paulo Fernando Fleury
Position
Chairman
Member
Member
Member
Member
Member
Independent Member
WSON 11 – Stock Price
Debt
Va l u a t i o n – M a i n A s s u m p t i o n s
(1) Towage
•
•
Tug Mkt growing by 20% above GDP. WS's mkt share decreases over time by 0.5 p.p.
6 new tugs from 2008-2011; Slow migration to more efficient Azimuth (retire less efficient,
conventional).
•
Manuevers: guidance is for volume to fall by 5-10% in 2009, then growing close to GDP.
•
Prices: guidance is for price increases over time by 5-10%; choice was more conservative 4%.
•
•
WS's guidance is for Special Operations to reach 14% share in revenue in the future, but 7.5% is
a better (and more conservative) assumption (following recent trend).
EBITDA margin decreases by 1 p.p./year and stabilizes at 34%.
Va l u a t i o n – M a i n A s s u m p t i o n s
(2) Port Terminals
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- Capacity expansion at Rio Grande in 2008 and no further expansion thereafter.
•
- Volume grows by GDP from 2010-2013, and then by GDP if utilization < 95%.
•
- Price grows by average annual US CPI over last 5 years (3.2%).
•
- Project Container Handling; warehousing and other grow in line with it.
•
- After 2010, assume EBITDA margin growing by 1.5 p.p./year, but cannot surpass 40%.
Va l u a t i o n – M a i n A s s u m p t i o n s
(3) Logistics
•
Growth rates of 2xGDP for 2010/13, and GDP for 2014/18.
•
EBITDA margin growing at 1 p.p./year, with cap of 12%
(4) Offshore
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# of PSVs as given by WS (6 in 2009, 8 in 2010, retire 1 in 2011, stabilize then).
•
Price growing by average US CPI for last 5 years (3.2%).
•
EBITDA margin at 44%.
Va l u a t i o n – M a i n A s s u m p t i o n s
(5) Agency
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- Volume given by # of vessel calls (assuming 0% growth)
•
- Tariff per vessel call growing at 2% p.a.
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- EBITDA margin at 16.5%
Notes:
•
Net Debt is US$ 15.8mn only. Net Debt/EBITDA = 0.13x. Mkt Cap: US$ 493mn
•
FEX: R$2.15/US$ (Locked in range 2.15 - 2.40)
•
Tax Rate: 34% (following assumption by UBS)
•
Capex: Maintenance of US$30 mn/year; replacement of 37 conventional tugs for azimuth tugs at
a cost of US$ 8mn/each (period of 4 years). So, from 2010 to 2013 capex of US$ 104mn/year,
then capex stabilizing at US$30 mn/year.
Va l u a t i o n
VALUATION
In US$ mn, except otherwise noted.
Wilson Sons
2009E
2010E
2011E
2012E
2013E
2014E
2015E
2016E
2017E
2018E
EBITDA
119
128
142
161
178
193
207
221
237
254
(Taxes)
-31
-33
-36
-41
-45
-51
-56
-61
-67
-73
(Capex)
-127
-104
-104
-104
-104
-30
-30
-30
-30
-30
(Change in WC)
12
-1
-1
-2
-2
-3
-2
-2
-3
-3
FCFF
-27
-9
1
14
26
109
118
128
138
148
1,236
398
NPV @ Discount Rate of...
12%
-24
-7
0
9
15
55
54
52
50
48
NPV
649
1
2
3
4
5
6
7
8
9
10
(Debt) or Cash
-16
633
fa i r va l ue / s tock (US$)
fa i r va l ue / s tock (R$)
8.90
19.14
28%
In US$ mn, except otherwise noted.
Wilson Sons
2009E
2010E
2011E
2012E
2013E
2014E
2015E
2016E
2017E
2018E
EBITDA
119
128
142
161
178
193
207
221
237
254
(Taxes)
-31
-33
-36
-41
-45
-51
-56
-61
-67
-73
(Capex)
-127
-104
-104
-104
-104
-30
-30
-30
-30
-30
(Change in WC)
12
-1
-1
-2
-2
-3
-2
-2
-3
-3
FCFF
-27
-9
1
14
26
109
118
128
138
148
Interest (1-t)
FCFE
0
0
0
0
0
0
0
0
0
0
-27
-9
1
14
26
109
118
128
138
148
1,236
398
NPV @ Discount Rate of...
12%
-24
-7
1
9
15
55
54
52
50
48
NPV
649
1
2
3
4
5
6
7
8
9
10
fa i r va l ue / s tock (US$)
fa i r va l ue / s tock (R$)
9.12
19.62
32%
Tu g s a t Wo r k . . .
Tu g b o a t s R a c e ! ! !