Navios South American Logistics Inc - Company Presentation February 2016
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Navios South American Logistics Inc.
Company Presentation
February 2016
Forward Looking Statements
This presentation contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and Navios
South American Logistics Inc.’s (“Navios Logistics”, “NSAL”, or the “Company”) growth strategy and measures to
implement such strategy; including expected vessel acquisitions and entering into further time charters or other client
contracts. Words such as “may,” “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and
variations of such words and similar expressions are intended to identify forward-looking statements. Such statements
include comments regarding expected revenues and client contracts. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such
expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a
number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many
of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by
such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited
to changes in the supply and demand for barges, pushboats, product tanker vessels and transshipment services;
competitive factors in the market in which the Company operates; the loss of any customer or contract; the price of
commodities we handle; weather-related risks; risks associated with operations outside the United States; and other
factors listed from time to time in the Company’s filings with the Securities and Exchange Commission including its
Forms 20-F and Forms 6-K. The Company expressly disclaims any obligations or undertaking to release publicly any
updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s
expectations with respect thereto or any change in events, conditions or circumstances on which any statement is
based. For the selected financial data presented herein, Navios Logistics compiled consolidated statements of operation
and selected balance sheets for the relevant periods.
EBITDA represents Net Income/(Loss) attributable to Navios Logistics’ stockholders before interest, taxes, depreciation
and amortization. Adjusted EBITDA represents EBITDA excluding certain items as described under “Earnings
Highlights”. EBITDA is presented because it is used by certain investors to measure a company's operating
performance. EBITDA and Adjusted EBITDA are “non-GAAP financial measures” and should not be considered a
substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared
in accordance with accounting principles generally accepted in the United States or as a measure of profitability or
liquidity. While EBITDA is frequently used as a measure of operating performance, the definition of EBITDA used here
may not be comparable to that used by other companies due to differences in methods of calculation.
2
Navios Logistics Overview
3
Navios Group Structure
Navios Maritime Holdings Inc .
(NYSE: NM)
• Controls 63-vessel dry bulk fleet; 40 owned and 23 long term chartered-in vessels.
• Global brand; Flexible business model
• Stable cash flow from charter out contracts and distributions from subsidiaries
• 2015 EBITDA: $133.4 million
• Share price: $0.95; per share value of investment in public subsidiaries = $1.51
20.1% 46.6% 63.8%
Navios Maritime Partners L.P. Navios Maritime Acquisition Navios South American
(NYSE: NMM) Corp. Logistics
(NYSE: NNA) • Logistics operator in Hidrovia
• MLP - 31 vessels • 38 vessels - 26 product tankers, 8 VLCCs, 4 • Core operations: Port Terminal
• 8 Capesize, 12 Panamax, 3 Ultra chemical tankers facilities, barging & cabotage
Handymax & 8 Containers • leading company in tanker sector • 2015 EBITDA: $80.4 million
• 2015 EBITDA:$153.3 million • 2015 EBITDA: $220.8 million • 2015 Net Income: $22.2 million
• 2015 Net Income: $41.8 million • 2015 Net Income: $89.7 million 20-year contract with Vale for port
• NM ownership: $19.9 million market value • NM ownership: $146.7 million market value services – expected $35 million
• Annual dividend: $0.20; 10.0% yield annual minimum EBITDA
60.85%
Navios Maritime Midstream Partners L.P
(NYSE: NAP)
• MLP - 6 VLCCs
• Long-term charters in tanker midstream sector
• Options on 5 VLCC dropdowns provide built-in fleet & distribution growth
• 2015 EBITDA: $62.2 million
• 2015 Net Income: $27.1 million
• Market value of NNA ownership: $123.9 million
• Annual dividend: $1.69; 17.2% yield
All stock prices and yields as of February 17, 2016
4
Navios Logistics Ownership Structure
Navios Maritime Holdings Inc.
Peers Business Inc.
NYSE: NM
63.8% Ownership 36.2% Ownership
Navios South American Logistics Inc.
(Marshall Islands)
Port Terminals Barge Business Cabotage Business
Storage and Transshipment • 362(1) barges and pushboats • Refined product transportation
• Bulk Terminal – Nueva transporting dry and liquid along the Argentinean coast
Palmira, Uruguay (tax free cargoes across the river system • Six ocean going product
zone) with 460,000 mt storage – Push boats tankers, two self-propelled
capacity – Dry barges barges and one bunker vessel
• Fuel Terminal – San Antonio, – Oil barges • Strategy to secure cash flows
Paraguay with 45,660 m3 – LPG barges with long term contracts
storage capacity • 1 floating dry dock • Awarded Brazilian Cabotage
contracts for six new building
20-year contract with Vale for port
services – expected $35 million annual vessels
minimum EBITDA
4
(1) Including three new building push boats to be delivered in Q1 2016
Navios Logistics Highlights
Largest independent dry terminal in Hidrovia
Leading Logistics One of the largest independent liquid terminals in Paraguay
Provider in the Hidrovia
Region of South America One of the largest, most versatile river barge fleets serving a diverse set of industries
One of the largest Argentinean product cabotage fleet with an average age of 7 years
New port infrastructure being constructed
Multiple Avenues of – 20-year contract with Vale for storage and transshipment of mineral commodities
Growth Increasing minerals and grain production and fuel demand create need for new convoys
Opportunity to expand in Brazilian cabotage
Favorable Market Robust growth in exports of grain and mineral commodities
Fundamental Hidrovia system and coastal cabotage are critical infrastructure for region
Scale and Strong Asset Economies of scale provide low costs per ton transported
Base Provide Operating Integrated terminal, barge and cabotage network offers substantial operating leverage
Efficiency
Strong Diverse group of large, high-quality counterparties
Counterparties ADM, Bunge, Cargill, Dreyfus, Vale, Vitol, YPF among others
Focus on Contracted Strategic positioning with fixed rate contracts and CoAs with minimum volume guarantees
Cash Flow Long-term relationships with high contract renewal rates
Seasoned Management Strategic relationships
Team with Strong Track Experienced management team
Record and Established
Brand Long operating history in region 5
Integrated Transportation and Storage Services
Port Terminals Barge Business Cabotage Business
Bulk transfer and storage port 291 dry barges 6 Product tankers
terminal in Nueva Palmira, 39 tank barges1 (8,974 – 17,508 dwt)
Uruguay 27 pushboats2 2 self-propelled barges
Asset Base Liquid port in San Antonio, 1 Bunker Vessel (1,693 dwt)
2 small inland oil tankers
Paraguay
3 LPG barges
1 floating dry dock
Dry cargo (cereals, soybeans, Dry cargo Refined oil products
iron ore, etc) Liquid cargo
Commodities Transported
or Stored Liquid cargo (primarily diesel Liquefied Petroleum Gas (LPG)
fuel and naphtha)
Long-term storage and Time charters and CoAs (1-6 Time charters
transshipment contracts years) (1-3 years average duration)
Typical Customer Contracts New 20-year storage and Spot market contracts Spot market contracts
transshipment contract with
Vale for mineral commodities
Strategic locations along the Hidrovia river system Argentinean coastal trade
Geographic Hidrovia river system Opportunity to expand into
Region Brazilian cabotage market
1. Including two barges currently being converted from dry to liquid expected to be delivered in Q1 2016 6
2. Including three new building push boats to be delivered in Q1 2016
Largest Independent Logistics Provider in Hidrovia
Ports Barge Business Cabotage
# Barges & Top 5 Players DWT Top 5 Argentinean Coastal Cabotage
Pushboats (‘000)
Players by Tonnage1
800 100
720
87
700 90
81
80
600
Largest Independent Dry Port 70 63
500
in the Hidrovia 60
400 362 2 50
41
279 38
300 271 40
243
30
200
20
100
10
0 0
One of the Largest Ultrapetrol NSAL Fluvialba Interbarge ADM National NSAL Antares Ultrapetrol Maruba
Independent Liquid Ports in Shipping
Paraguay
• Lower operating costs
Key Benefits of • Greater market presence
Large Scale • Higher quality charterers
• Strong strategic relationships (shipyards, commercial banks, etc.)
1. Includes vessels 5,000 – 29,000 DWT
2. Including three new building push boats to be delivered in Q1 2016 8
Sources: Drewry
Navios Logistics Presence Throughout Supply Chain
Brazil
Bolivia Paraguay Fuel Port Terminal
• Loading / Unloading
• 45,660 m3 storage capacity
Paraguay
Uruguay Bulk Port Terminal
• Loading / Unloading
Barge Transportation • 460,000 mt storage capacity
• 3621 barges and push boats • Drying & conditioning facility
• Dry and liquid cargos
Uruguay
Dry Port Exports
Liquid Port Argentina
Iron ore Cabotage Transportation
Grains • 6 ocean going tankers
• 2 self-propelled barges
Liquid cargo • 1 bunker vessel
• Distribution of oil products
9
1. Including three new building push boats to be delivered in Q1 2016
Market Overview
10Hidrovia: Agricultural Heartland of South America
• Runs over 4,500 kilometers across the agricultural heartland of South America
– Comparable in length to the Mississippi system
South America Hidrovia Region Mississippi Region
Number of barges: ~ 3,000 Number of barges: ~ 29,000
Source: Drewry
Significant Capacity for Growth
11Favorable Market Fundamentals of Hidrovia
VENEZUELA
• Growing exports of grain and mineral commodities
GUYANA
SURINAME - Region accounts for ~54% of global soybean
COLOMBIA FRENCH GUIANA
production
ECUADOR
- Significant expansion in iron ore production
BRAZIL - Significant exporter to emerging market
PERU economies, such as China
•
BOLIVIA
Stable growth in oil demand
Navios
- 69% of Argentina’s refining capacity is located
PARAGUAY
Oil near the Hidrovia and in the River Plate
Products
Terminal - Paraguay does not produce any crude oil and
Hidrovia
URUGUAY River relies on imports from larger refineries in Argentina
CHILE
System
• Reliance on waterborne transportation
ARGENTINA
- Shortage of highway or rail infrastructure
Navios
Dry Port alternatives
Terminal
Coastal - River system provides access to Atlantic Ocean
Cabotage
Trade and global export markets
- River barges and coastal tankers are the most
cost-efficient method of transportation
12
Source: Drewry, USDA February 2016New Jumbo Barges: Even More Efficient Design
One Jumbo Barge: One Mississippi Barge: Jumbo Hopper Car: Large Semi:
2,875 Tons 1,500 Tons 112 Tons 26 Tons
~2x ~26x ~111x
One 16-Mississippi Barge ~2.1x 100-Car unit Train ~920x Large Semis (Trucks)
Convoy = 24,000 dwt
= =
One 20-Mississippi Barge ~2.7x 100-Car unit Train ~1,150x Large Semis (Trucks)
Convoy = 30,000 dwt
= =
One 12-Jumbo Barge ~3.1x 100-Car unit Train ~1,330x Large Semis (Trucks)
Convoy = 34,500 dwt
= =
13
Source: IOWA Department of TransportationStrategically Positioned to Serve the Soybean
Production…
Hidrovia Region Soybean Production Uruguay Soybean Production
200.0 60% 4.0
180.0 3.5
Million Metric Tons
160.0
55% 3.0
Region % of World
Million Metric Tons
140.0
2.5
120.0
100.0 50% 2.0
80.0 1.5
60.0
45% 1.0
40.0
0.5
20.0
0.0 40% 0.0
14/15P
15/16E
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
11/12
12/13
13/14
14/15P
15/16E
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
11/12
12/13
13/14
Soybean Production Region % of World Uruguay Soybean Production
Hidrovia accounts for ~54% of Uruguay is the fastest growing soybean
world soybean production producer in the region
Note: Crop years for Soybean Production according to USDA definition, P = Preliminary, E = Estimate
Source: Drewry, USDA February 2016 14…and the Corumba Region Iron-Ore Production
Million Metric Tons Corumba Iron Ore Production
9
8
7
6
5
4 7.8
7.1 7.0
3 6.0 5.8
4.4 4.6 4.5
2 4.2
3.5
1 1.9 2.3
1.6 1.8
1.1
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: Drewry, Vale 15Fresh Water Availability vs. Population:
Grain Exports = Virtual Water Trade
Water requirement equivalent of main
food products
Europe Asia
North &
Equivalent water
Central America Product Unit in m3 per unit
Fresh beef kg 15
8% 13%
Fresh lamb kg 10
8% 36%
15% Fresh poultry kg 6
60%
Cereals kg 1.5
South Africa
Citrus fruits kg 1
America
Australia Palm oil kg 2
& Oceania
Puls, roots and tubers kg 1
11% 13%
6%
26%
This table gives examples of water required per unit of
5%Q4 & FY 2015 Financial Highlights
17Navios Logistics Q4 & FY 2015 Earnings Highlights
Three months Three months
ended ended P-O-P FY ended FY ended Y-O-Y
(in $ ‘000) Dec 31, 2015 Dec 31, 2014 Variance Dec 31, 2015 Dec 31, 2014 Variance
Revenue 52,419 74,072 (29%) 251,048 268,774 (7%)
Navios Adjusted EBITDA 15,942 15,255 4% 80,449 68,771 (1) 17%
Logistics Net income/(loss) 1,358 1,836 (26%) 22,238 (16,704) n/a
Adjusted net income 1,358 1,836 (26%) 22,238 10,577 (1) 110%
Port Revenue 13,497 33,380 (60%) 81,729 99,954 (18%)
Terminals Adjusted EBITDA 4,548 6,097 (25%) 29,907 28,662 4%
Barge Revenue 26,782 28,810 (7%) 105,974 109,100 (3%)
Business Adjusted EBITDA 10,530 6,833 54% 38,186 21,303 (1) 79%
Cabotage Revenue 12,140 11,882 2% 63,345 59,720 6%
Business Adjusted EBITDA 864 2,325 (63%) 12,356 18,806 (1) (34%)
Revenue ($ million) EBITDA ($ million)
6%
CAGR
20%
268.8 251.0 (1) 80.4
234.7 247.0 237.1 CAGR
68.8
188.0 56.8
48.1
32.5 39.0
2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015
(1) EBITDA and Net Income for the year ended December 31, 2014 have been adjusted to exclude $27.3 million loss on bond extinguishment 18Navios Logistics 2015 Balance Sheet
Selected Balance Sheet Data
(in $'000)
December 31, 2015 December 31, 2014
Cash & cash equivalents 81,507 71,931
Accounts Receivable 26,097 29,317
Deposits for vessels, port terminals and other fixed assets, net 44,254 23,225
Vessels port terminal and other fixed assets, net 427,860 443,625
Total Assets 785,619 786,133
Senior notes, net of deferred financing costs 367,178 366,250
Current portion of long term debt 69 69
Long term debt, net of current portion 321 390
Current portion of capital lease obligations 2,929 1,449
Capital lease obligations, net of current portion 17,720 20,911
Stockholders Equity 336,013 313,775
Book Capitalization 724,230 702,844
Net Debt / Book Capitalization 42% 45%
$42.0 million undrawn export financing facility
to finance the construction of the iron ore port
19www.navioslogistics.com
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