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Investor presentationOctober 2006 Riga
2
Financial Year 2005/2006
KEY EVENTS
Successful IPO and listing on the Tallinn Stock Exchange in December 2005;
Ordering of a new cruise ferry, a sister vessel of M/S Galaxy;
The delivery of M/S Galaxy;
Starting operations between Riga and Stockholm;
The acquisition of Superfast vessels and the launch of Finland - Germany service;
The sale of M/S Autoexpress;
M/S Fantaasia chartered to Mediterranean from;
Acquisition of Silja ferry business;
Rights Issue to the shareholders.
3
Financial year 2005/2006 9 months Key Figures
(in € million) 01.09.2005-31.05.2006
‘ 01.09.2004-31.05.2005
Change %
Net sales 194.9 181.5 7.4Net profit for the period 8.4 11.9 -29.1Net profit margin (%) 4.3 6.5EBITDA 31.1 32.7 -4.9EBITDA margin (%) 15.9 18.0Depreciation 14.7 12.9 13.9Capital Expenditure 480.4 20.0 2,300.0
Number of passengers (millions) 2.2 2.2 -3.0Cargo units (thousands) 116.8 96.5 21.0Average number of employees (thousands) 2.8 2.7 2.5
31.05.2006 31.08.2005 Change %Total assets 970.3 442.7 119.2Total liabilities 660.9 273.0 142.1Interest-bearing liabilities 615.2 245.2 150.9Total equity 309.4 169.7 82.3Equity/assets ratio (%) 31.9 38.3 -16.7Weighted average number of shares outstanding 126,987,179 110,000,000 15.4Shareholder’s equity per share 2.44 1.54 57.9
4
Tallink’s vesselsHigh-quality, flexible fleet
Romantika Victoria I
Regal Star
Kapella
AutoExpress 2
AutoExpress 4
Meloodia I Regina Baltica Vana Tallinn Fantaasia
Cruise Ferries
High-speedFerries
Ro-ro Cargo Ferries
As a result of its ongoing investment and fleet renewal program, Tallink deploys some of the most advanced cruise ferries in the region.
AutoExpress 3
Galaxy
Fast Ro-pax
Superfast VII , Superfast VIII , Superfast IX
5
Silja’s vesselsHigh-quality, flexible fleet
Silja SerenadeCruise Ferries
As a result of its ongoing investment and fleet renewal program, Tallink deploys some of the most advanced cruise ferries in the region.
Ro-paxFerries
Silja Europa
Silja Symphony
Silja Festival
Sky Wind
Sea Wind
6
Share price December 2005 – September 2006
3.0
3.5
4.0
4.5
5.0
5.5
6.0
300
350
400
450
500
550
600Tallink
Baltix
March May July
€
January September
Since listed on the Tallinn Stock Exchange, a large proportion of turnover is derived directly from trading Tallink’s shares
— 34.9% of Tallinn Stock Exchange share turnover (09.12.05 – 18.09.06)
— 20.0% of Total Baltic Market share turnover (09.12.05 – 18.09.06)
Source: Tallinn Stock Exchange
December February April June August
7
Tallink in brief
Tallink is the biggest ferry operator in Northern Baltic Sea offering mini-cruise, passenger transportation and ro-ro cargo transportation services.
21 vessels linking 10 ports on seven routes between:— Finland and Estonia;
— Finland and Sweden;
— Sweden and Estonia;
— Sweden and Latvia;
— Finland and Germany.
350 room hotel operation in the center of Tallinn
Annual revenue base over 620 million euro * Over 6,000 employees More than 6.5 million passengers annually *
* Combined with the 12 months pro forma figures of the acquired Silja Line ferry business
8
Tallink: The strongest in the Baltic Sea
Outstanding macro fundamentals
Strong market position
High-quality, flexible fleet
Broad product offering
Strong brands
Competitive cost base
Experienced management team
“The biggest Northern Baltic shipping group providing
high-quality mini-cruise and passenger transport services, as well as a
leading provider of ro-ro cargo services on selected
routes”
9
Tallink business model
Product Offering Success Story and Growth Drivers
Mini-cruise, Hotel and Travel Packages
High-speed, Passenger and Cargo Traffic
Broad transportation, leisure and retail product: complete mini-cruise and overnight hotel & spa packages, city-break day trips, high-speed ferry and cargo
Highly popular mini-cruise product across Scandinavia and the Baltics with extensive onboard retail and entertainment facilities
Our destinations are attractive and lucrative for tourism and shopping destination
Significant demand from business customers, tourism and cargo traffic boosted by EU accession
10
0
500
1 000
1 500
2 000
2 500
3 000
3 500
Passengers
(in
'000)Tallink passenger growthStrong passenger growth over the past decade
Total Tallink Passenger Volumes
Over the past decade, Tallink has outperformed a fast-
growing home market and is set to capitalise further on
Tallinn’s growing attractiveness as a tourist
destination.
10
11
The Baltic ferry sector in a global contextTallink: Positioned at the heart of an exciting growth market
Passenger Traffic – Global Passenger Traffic – Baltic and Scandinavia
Trailer Traffic – Global Trailer Traffic – Baltic and Scandinavia
*Note: Red Sea region excluded due to negligible volumes; North Sea includes Inland Lakes Europe; Domestic Baltic and Scandinavian markets excludedDK – Denmark; SE – Sweden; FI – Finland; D – Germany; E – Estonia; N – Norway; PL – Poland; DK-SE includes data from Oresund bridge crossingSource: ShipPax, 2004 & 1996 data;
15,0
9,48,5
1,3 0,9 0,7 0,6
2,6
4,16,2
0
2
4
6
8
10
12
14
16
DK-SE* FI-SE DK-D FI-E DK-N D-SE N-SE PL-SE SE-E D-N
(in m
illio
n)
-8%
-4%
0%
4%
8%
12%
16%
20%
CA
GR
1996-2004
0,8
0,6
0,4
0,2 0,2 0,10,1
0,04
0,03
0,3
0,0
0,2
0,4
0,6
0,8
1,0
D-SE DK-SE* DK-D FI-SE PL-SE FI-E DK-N SE-E D-N N-SE
(in m
illio
n)
-4%
0%
4%
8%
12%
16%
20%
CA
GR
1996-2004
10
77
4
0.41.0
0
2
4
6
8
10
12
North Sea Med Baltic Asia America Pacific
(in m
illio
n)
536
291
187166
133
24
0
100
200
300
400
500
600
Asia America Baltic Med North Sea Pacific
(in m
illio
n)
12
Tallink routes
Tallink operates between:— Helsinki and Tallinn;
— Stockholm and Tallinn;
— Paldiski and Kapellskär;
— Stockholm and Riga;
— Hanko and Rostock;
— Helsinki and Stockholm;
— Turku and Stockholm/Kapellskär.
Northern Baltic Sea region –17 million passenger market
13
Finland – EstoniaHelsinki – Tallinn
Helsinki – Tallinn— Revenues mainly from onboard and ticket sales
— Approximately 80% of the passengers are Finnish
— 3.5 hour trip with day ferry
— 1 hour 40 minute trip with high-speed ferry
— 22 hour over-night cruise with “Galaxy”
Investments— In 2002 and 2006 two brand new vessels
— In 2007 brand new Ro-pax ferry will be introduced
Sea Containers
18%
Viking Line
15%
43%
Nordic JetLine
7%
Eckerö Line
14%
Linda Line
3%
Market ShareCustomers and Products
Galaxy Meloodia Regal Star
Auto Express 2 Auto Express 3 Auto Express 4
Key Words
Developing passenger market Increased cargo demand
14
Finland – SwedenHelsinki – Stockholm; Turku – Stockholm/Kapellskär
Helsinki-Stockholm
56%
Viking Line44%
Turku-Stockholm
57%
Viking Line43%
Market ShareCustomers and Products
Helsinki – Stockholm— Revenues mainly from onboard and ticket sales
— Approximately 65% passengers are Finnish
— Over-night cruise
Turku – Stockholm/Kapellskär— Revenues mainly from cargo and ticket sales
— Majority of passengers are Finnish
— Over-night and day trips
Silja Europa
Silja Symphony
Silja Festival Sea Wind / Sky Wind
Silja Serenade
Key Words
Tax-free status (via Aland islands)
Strong brand – Silja Loyal passenger base Increased cargo demand
Overnight cruise City-break Hotel package sales
15
Sweden – EstoniaStockholm – Tallinn; Kapellskär – Paldiski
Market ShareCustomers and Products
Stockholm – Tallinn route— Revenues mainly from onboard and ticket sales
— Approximately 70% of passengers are Swedish
— Over-night cruise
Romantika Victoria
Paldiski – Kapellskär route— Revenues mainly from cargo and ticket sales
— Approximately 70% of passengers are Estonian
— 11,5 hour trip
Vana Tallinn Kapella
Tallink is the only provider of daily passenger and ro-ro cargo services on the routes between Sweden and Estonia
Key Words
Tax-free status (via Aland islands) High development potential Overnight cruises City-breaks Hotel package sales
16
Sweden – LatviaStockholm – Riga
Market ShareCustomers and Products
Stockholm – Riga route— Revenues mainly from onboard and ticket sales
— Approximately 70% of passengers are Swedish
— Over-night cruise
Regina Baltica
Tallink is the only provider of regular passenger and ro-ro cargo services on the route between Sweden and Latvia
Key Words
High growth potential Overnight cruise City-break Hotel package sales
17
Finland – GermanyHanko – Rostock
Freight Market Share in 2005Customers and Products
Hanko – Rostock route— Revenues mainly from cargo sales
— 24 hour trip
Key Words
Superfast VII Superfast VIII Superfast IX
The fastest link between Finland and Germany
High cargo space utilization Potential in passenger transportation
Finnlines46%
Transfennica21%
Power-line4%
29%
High quality fast ice-classed vessels
18
Proven strategyMarket leadership and investment for profitable growth
Continue to invest in our fleet— Central to maintaining market leadership and growing our business
— Enhanced efficiency and profitability
— Increased per-passenger spend from a wider demographic customer base
— Further strengthening of the Tallink & Silja brands
Build upon strong positions on existing routes— Strengthen overall market share and volumes
— Further increase strong brand recognition
— Broader customer base
— Enhanced mini-cruise experience and promotion of our different travel destinations
Pursue new growth opportunities in the North Europe region— Potential route expansion
— Travel-related products, services and packages
Maintain profitability through efficient and flexible management while seeking revenue growth
19
Year
High quality fleetSophisticated and modern vessels
Ferries Built for the Region
Cruise Ferries High-speed Ro-pax Ferries
Fleet renewal Higher quality of onboard facilities Increased passenger, cargo and retail capacity Increased profitability through lower cost per
passenger
Helsinki–Tallinn in less than 2 hours Increased passenger, cargo and retail capacity Expanded onboard consumption and retail
facilities Reduce seasonality through ice-class specification
*Note: Pure cruise vessel with no separate cargo or passenger car deck
Symphony
89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06
Cinderella
Europa
Romantika
Galaxy
Victoria I
Paradise*
Gabriella
07 08
High-speed ro-pax I
High-speed ro-pax II
Serenade
New Cruise Ferry II
Superfast IX
Superfast VII and VIII
20
*Note: Excludes revenue from cargo operationsEEK/€ pegged since 1999 (EEK15.6466 = €1)
192
218
260
0
50
100
150
200
250
300
02/03 03/04 04/05
(in
€ m
illi
on
)
Strong operational and financial track recordSignificant growth momentum across all key indicators
Passenger Growth Since 02/03 Revenue Growth Since 02/03 Cargo Growth Since 02/03
Profitable growth is key to Tallink’s success – this has been demonstrated over thepast three years and will remain central to its investment case going forward.
3 274
2 828
2 598
0
500
1 000
1 500
2 000
2 500
3 000
3 500
02/03 03/04 04/05
Pas
seng
ers
(in '0
00)
Car
go u
nits
(in
'000
)
131
10395
0
50
100
150
200
02/03 03/04 04/05
21
*Note:(1) ROE represents net profit / average equity for the period(2) Equity Asset ratio = shareholders equity / total assetsEEK/€ pegged since 1999 (EEK15.6466 = €1)
Group financial data
2002/2003 2003/2004 2004/2005(in € million)
Sales 191 218 260
EBITDA 51 46 58
Margin (%) 26.8% 21.1% 22.2%
Net Profit 24 20 30
Operating Cash Flow 54 51 57
Capital expenditure (40) (153) (23)
Total assets 291 442 443
Total liabilities 197 302 273
Shareholders equity 94 139 170
ROE (1) 30% 17% 20%
Equity assets ratio (2) 32% 31% 38%
Investor presentationOctober 2006 Riga