Aegean Marine Q1 2013 earnings presentation


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Aegean Marine Q1 2013 earnings presentation

  1. 1. AEGEAN MARINE PETROLEUM NETWORK INC. 2Cautionary StatementThis presentation contains forward-looking statements concerning plans, objectives, goals, strategies, future events or performance,and underlying assumptions and other statements, which are other than statements of historical facts. The Private SecuritiesLitigation Reform Act of 1995 provides safe harbor protections for forward-looking statements and we desire to take advantage ofsuch safe harbor legislation. The forward-looking statements in this report are based upon various assumptions, many of which arebased, in turn, upon further assumptions, including without limitation, managements examination of historical operating trends, datacontained in our records and other data available from third parties. Important assumptions relating to the forward-lookingstatements include, among other things, assumptions regarding demand for our products, the cost and availability of refined marinefuel from suppliers, pricing levels, the timing and cost of capital expenditures, competitive conditions, and general economicconditions. These assumptions could prove inaccurate. Although we believe that these assumptions were reasonable when made,because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible topredict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs orprojections.For a more comprehensive discussion of the risk factors affecting our business please see our Annual Report on Form 20-F and otherreports filed with the U.S. Securities and Exchange Commission, a copy of which can be found on our website required by law, we disclaim any obligation to update any forward-looking statements contained in this presentation, whetheras a result of new information, future events, a change in our views or expatiations, to conform them to actual results or otherwise.In addition, this presentation contains unaudited financial information related to our financial statements. The information providedis for indicative purposes only. Unless required by law, we undertake no obligation to update or revise any such information.Non-GAAP Financial MeasuresWithin this presentation, the Company makes reference to certain non-GAAP financial measures, which have directly comparableGAAP financial measures as identified in this presentation. These non-GAAP measures are provided because they are used asstandard metrics by the investment community. We believe these measures will assist the investment community in properlyassessing the underlying performance of the Company.
  2. 2. AEGEAN MARINE PETROLEUM NETWORK INC.HIGHLIGHTS• Sales Volumes decreased 3.8% to 2,367,077 in Q1 2013 comparedto Q1 2012.• Gross Profit decreased 7.4% to $70.7 million in Q1 2013 comparedto Q1 2012.• Recorded EBITDA of $21.0 million.• Net Income increased 19.7% to $7.2 million or $0.15 basic anddiluted earnings per share in Q1 2013 compared to Q1 2012.– Net Income adjusted for the sale of non-core assets was $6.3 million or$0.14 basic and diluted earnings per share.• Continued enhancement of operating expense structure throughsale of Aegean Tulip and Aeolos.• Signed agreement for Fujairah financing.• Sale of interest in Panama storage facility.3
  3. 3. AEGEAN MARINE PETROLEUM NETWORK INC.SELECTED FINANCIALS4Year-on-Year Comparison1q12 1q13 YoY %Sales Volumes (MT) 2,461,230 2,367,077 -3.8%Gross Profit $76,401 $70,723 -7.4%EBITDA $22,532 $20,115 -10.7%Operating Income $13,405 $12,426 -7.3%Net Income $6,005 $6,280 4.6%Quarter-on-Quarter Comparison4q12 1q13 QoQ %Sales Volumes (MT) 2,729,070 2,367,077 -13.3%Gross Profit $71,849 $70,723 -1.6%EBITDA $20,082 $20,115 0.2%Operating Income $13,037 $12,426 -4.7%Net Income $5,092 $6,280 23.3%(1) All amounts are in thousands of USD unless otherwise specified.(2) Gross Profit = Total Revenue – Total Cost of Sales(3) All figures adjusted for one-time loss/gain on sale of vessels, subsidiary(2)(2)(1) (3)
  4. 4. AEGEAN MARINE PETROLEUM NETWORK INC.EBITDA-10,00020,00030,00040,00050,00060,00070,00080,00090,000100,0002005 2006 2007 2008 2009 2010 2011 2012 TTM as of3/31/13$,0005Note: Figures are adjusted for one-time gain/loss on sale of assets, subsidiary
  5. 5. AEGEAN MARINE PETROLEUM NETWORK INC.Built-in Fleet Capacity to Further Scale Business• Modern fleet consisting of 66 (57 owned and 9chartered) bunkering vessels including a specialtytanker and 3 owned floating storage vessels• Average age of fleet is 10 years, with 32 vessels lessthan 5 years old• Modern vessels equipped with:– Segregated cargo tanks allowing fortransportation of multiple grades of fuel– High-capacity fuel pumps6Aegean FleetCurrent Average Size Average Age % Double HullNumber of Vessels/Barges 66 5,000 dwt 10 years 87%0204060802006 2007 2008 2009 2010 2011 2012Fleet Size and Hull TypeDouble Hull Single Hull
  6. 6. AEGEAN MARINE PETROLEUM NETWORK INC.Continued Progress Marketing & DistributingMarine Lubricants-5,00010,00015,00020,00025,00030,0002007 2008 2009 2010 2011 2012 TTM asof3/31/13Lubricant Volume (mt)7• ALFA marine lubricants part of a comprehensivesolution for Aegean customers• Product availability in more that 550 ports worldwide• Estimated annual global market size of 2mm metrictons
  7. 7. AEGEAN MARINE PETROLEUM NETWORK INC.GROSS PROFIT DRIVERS$-$5$10$15$20$25$30$35-500,0001,000,0001,500,0002,000,0002,500,0003,000,000GrossSpreadperMetricTonSalesVolume(mt)Volumes Gross Spread8
  8. 8. AEGEAN MARINE PETROLEUM NETWORK INC.UTILIZATION30323436384042444601002003004005006001q10 2q10 3q10 4q10 1q11 2q11 3q11 4q11 1q12 2q12 3q12 4q12 1q13Volume(metrictonsdeliveredpervesselperday)Utilization Fleet9(1) Utilization is measured as volume (in metric tons) delivered per average number ofocean-going bunkering vessel per day. Utilization data does not include inland andestuary barge utilization figures(2) Figures adjusted to exclude non-operating (off-hire) days caused by both scheduledand unscheduled maintenance requirements and charter hire days(3) Fleet size for utilization calculation refers to ocean-going bunkering tankersexclusively(4) Assumes 360 operating work days per vessel per year, 38 ocean-going bunkeringvessels and a flat utilization run-rate for the trailing twelve month period on non-ocean going inland and estuary barge vessels(1)(3)(2)Volume Sensitivity AnalysisMT Delivered per Vessel per Day Total Annual Sales Volume (mt)400 9,200,000500 10,750,000600 11,950,000700 13,500,000800 15,200,000(4)
  9. 9. AEGEAN MARINE PETROLEUM NETWORK INC.PROFITABILITY0%5%10%15%20%25%30%35%40%45%$-$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,000$90,000Gross Profit EBITDA Margin10(1) EBITDA Margin is calculated as EBITDA divided by Gross Profit.(2) EBITDA figures are adjusted for gains/losses on sale of non-core assets(1,2,)
  10. 10. AEGEAN MARINE PETROLEUM NETWORK INC.WORKING CAPITAL051015202530351q10 2q10 3q10 4q10 1Q11 2Q11 3Q11 4q11 1q12 2q12 3q12 4q12 1q13DaysDIODSODPOCCC11(1) DIO= Days Inventory Outstanding, DSO= Days Sales Outstanding, DPO= Days Payable Outstanding, CCC= Cash Conversion Cycle
  11. 11. AEGEAN MARINE PETROLEUM NETWORK INC.Balanced Capital Allocation Strategy DrivesShareholder Value CreationKey Balance Sheet Data as of March 31, 2013Cash $ 61,716Trade Receivables (net) 479,250Inventory 174,474Other Current Assets 59,556Trade Payables (277,708)Trade Finance Debt (396,407)Fixed Asset Debt (205,948)Net Debt $ 105,067Fixed Assets $ 569,35712• Financial flexibility and balanced capital allocation strategy position Aegean to return value to shareholderswhile continuing to invest in growth• One million share repurchase plan in place• Built in fleet capacity allows for flexible, strategic market reactions• Solid financial foundation to manage commodity price fluctuations• $1.4 billion in working capital and supplier credit allows Aegean Marine to manage volatile marinefuel prices and procure large quantities of supply at a discount relative to competitors(1)(1) Net Debt = Total current assets – Trade Payables, Trade Credit Financing, Fixed Asset and Corporate Debt
  12. 12. AEGEAN MARINE PETROLEUM NETWORK INC.Financial Flexibility to Invest in Growth andReturn Capital to Shareholders13• Significant Financial Liquidity withover $1 Billion in Available Credit– Ability to better manage commodity pricefluctuations– Bulk purchases provide pricing powerrelative to competitors• Superior Financing Terms on NewbuildVessels– Reduces cost of capital and improvesprofitability• Strong Capital Structure– Net Debt of $105 million– Fixed asset debt to ttm EBITDA of 2.2x75300 320420706943 968883$-$200$400$600$800$1,000$1,200At IPO 2007 2008 2009 2010 2011 2012 1q13Working Capital Facilities (,000)
  13. 13. AEGEAN MARINE PETROLEUM NETWORK INC.Creating Long Term Value by Entering New Markets,Diversifying Revenue and Enhancing Flexibility• Strategically expanding global footprint, driving business revenuesand increasing global market share• Scalable global network allows for increased asset utilization andflexibility as macro conditions improve• Strategically located storage capacity diversifies business byproviding opportunities to generate substantial income fromleasing storage space to third parties• Strengthening integrated marine fuel logistics chain via strategicexpansion and disposition of older non-core assets– 10 vessels sold to date yielding a savings of approximately $20m in annualoperating expense14
  14. 14. AEGEAN MARINE PETROLEUM NETWORK INC.Strategically Improving Geographic Mix15Start-Up AcquisitionsWest Africa 1Q 2008 Northern Europe – Bunkers at Sea 4Q 2007Patras 1Q 2009 United Kingdom – Portland 4Q 2007Tanger-Med 1Q 2009 Vancouver, Montreal, Mexico – ICS 3Q 2008Trinidad and Tobago 2Q 2009 Amsterdam, Rotterdam, Antwerp – Verbeke 1Q 2010Cape Verde 1Q 2011 Las Palmas 2Q 2010Panama 2Q 2011Tenerife 2Q 2011Hong Kong 3Q 2012Barcelona 2Q 20132004 2005 2006 2007 2008 2009 2010 2011 2012 20133 4 5 711141619 20 21Geographic Markets +
  15. 15. AEGEAN MARINE PETROLEUM NETWORK INC.Unique Offerings with Global Reach andDiverse Customer Base16TankersContainersBulkersCar CarriersCruise ShipsChemicalTankersReefersLPG/LNGOtherS a l e s b y C l i e n t S e c t o r• Aegean’s customers include commercial shipping companies, cruise lines, marine fuel traders and brokersas well as oil majors• Strong, diverse customer base, sophisticated credit management systems and a global footprint mitigatecounterparty and market risk and provide top-line predictability• No customer accounts for more than 10% of total revenuesPiraeus /PatrasGibraltarU.A.E.JamaicaSingaporeHong KongU.K.VancouverTrinidadMoroccoN.W.E.CanaryIslandsPanama1 Q 1 3 V o l u m e b y M a r k e t
  16. 16. AEGEAN MARINE PETROLEUM NETWORK INC.Streamlining Cost Structure and LeveragingFixed Costs• Successfully reduced operating expenses in threeconsecutive quarters• Sale of ten older, non-core vessels yields approximately$20m in annual operating savings• Movement from floating to land based storage capacitymitigates costly ongoing operating and maintenanceexpense while enhancing purchasing power and providingadditional revenue streams17
  17. 17. AEGEAN MARINE PETROLEUM NETWORK INC.Global Storage Capacity Enhances PurchasingPower and Product Availability18STORAGELocation Type CapacityFujairahExpected completion 4Q13Land 465,000 m3JamaicaAvailable development siteLand 80,000 m3Portland Land 40,000 m3Tanger-Med Land 218,000 m3Las Palmas Land 65,000 m3Barcelona Land 52,000 m3APPROXIMATE TOTAL Land 920,000 m3Fujairah Floating 83,890 dwtMediterranean Floating 19,894 dwtAmsterdam- Rotterdam-Antwerp Floating 2,500 dwtAPPROXIMATE TOTAL Floating 106,284 dwt• Enhanced, stable productavailability in key markets• Augmented buying power via bulkpurchases• Generate incremental incomethrough leasing of excess storagespace to third-parties
  18. 18. AEGEAN MARINE PETROLEUM NETWORK INC.Well-Positioned to Benefit from PositiveMacro Trends• Global GDP growth forecast of 3.3%and 4.0% in 2013 and 2014respectively• Emerging Markets GDP growth of 5.3%and 5.7% in 2013 and 2014respectively.• Global marine market to expand 5% to6% annually through 2015• Continued expansion of worldseaborne trade and world fleet drivingdemand for all grades of marine fuel19050,000100,000150,000200,000250,000300,000350,000-20,00040,00060,00080,000100,000120,000BunkerDemand(,000mt/year)GlobalGDP(USDTrillions)World GDP and Bunker DemandWorld GDP Bunker Demand(1) IMF “World Economic Update April 2013(2) IHS Global Insight(3) HSBC(1)Source: IEA, EPA, Company Estimates(2)(1)
  19. 19. AEGEAN MARINE PETROLEUM NETWORK INC.Uniquely Positioned to Drive Profitability• Well-positioned to capitalize on emerging trends• Poised for long-term, sustainable growth; immuneto many headwinds facing shipping industry• Diversified revenue streams, market leadership andoperational infrastructure create significant barriersto entry• Track record of strong financial results• Capital allocation strategy focused on drivingshareholder value• Creating long term value by entering new marketsand further diversifying revenue20