November 10, 2024
Piraeus Port Authority S.A. (ATSE:PPA)
Research & Presentation Materials – Investment Committee
The Complutense Finance Society Investment Fund
▪ Mauro Cancino (Secretary General)
▪ Rodrigo Ruiz (Vice-President)
Piraeus Port Authority
This document SA has been prepared by the Complutense Finance Society Investment Fund exclusively for the intended recipient and is not to be disseminated or used by any otherResearch
and its content & Presentationanything
party. Notwithstanding Materials
in this
Investment Committee
document to & Corporate
the contrary, Partners
CFS does not, through this document and its content, provide advice in any form. CFS’s stance on any proposals or proposal-oriented statements is limited solely to the objective of the proposals themselves
and does not offer any opinions on matters outside the frames of the proposal(s). Analyses herein are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these
analyses.
Executive Summary
Investment Thesis
Key terms Description
▪ One of the fastest growing terminals globally with gateway to the East Mediterranean
▪ Business Model ▪ Serves the largest shipping companies and has robust infrastructure capable of serving the largest container carriers
▪ Hub for transhipment in the Mediterranean and Black Sea
▪ Consolidated player within an industry with high entry barriers (geography, high initial investment) and expected to grow 5%
▪ Industry Opportunity annually
▪ Margins Expansion, NWC Efficiency improvements, higher growth rate than peers with superior return on incremental capital
▪ Financial Performance and strong and predictable cash flow generation
▪ Lower EV/EBITDA than average and median of industry (4.9x vs 11x), therefore showing a high upside potential
▪ Relative & Intrinsic Valuation ▪ Lower EV/FCF than average and median of industry (8.5x vs 17X), therefore showing a high upside potential
▪ Recent transactions show strategic buyers are paying a median of 11x EV/EBITDA for peers with worse financial
▪ Recent Transactions performance and with similar EV and geography
Source:
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Investment Committee & Corporate Partners
Business Model
Piraeus at a glance I
Revenue Breakdown Moats & Margins Expansion
Operating Margins 47%
43.70%
▪ Infrastructure High
Costs 32.60%
33.80% 33.80%
32.10%
▪ Strategic Location 22.90%
▪ Climate weather 11%
predictability 4.30%
0.90%
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Revenue Performance NWC Efficiency Improvements
14% CAGR Concession agreement Pier Accounts Receivables
II+III 35.13 Accounts Payables
Loading and Unloading
26.96
Others 24.42
16.56 17.75
Cruise services 16.39 16.83
11.16
Mooring 11.7 12.22
10.67
3.2 2.45 2.95 8.17 10.42
Other supporting services 7.09 7.13 7.86
3.69
2020 2021 2022 2023
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Source: Annual Report & Tikr
Piraeus Port Authority SA Research & Presentation Materials
Investment Committee & Corporate Partners
Business Model
Piraeus Shareholders and Management
Major Shareholders
▪ COSCO SHIPPING Co.: A wholly owned
7%
67% subsidiary and an important overseas regional
COSCO SHIPPING (Hong headquarters and conglomerate of China
Kong) Co.
COSCO SHIPPING Corporation Limited. It is
investing in Greece’s Port of Piraeus, Hainan
Harbor and Shipping Holding, and a marine
equipment leasing platform in North America.
Hellenic Republic Asset
Development Fund
▪ Hellenic Republic Asset Development Fund:
The Hellenic Republic Asset Development
Fund S.A. (HRADF) develops and leverages
the state private property assigned to it by
Investors
the Hellenic Republic, according to the
26%
country’s international obligations and the
Medium-Term Fiscal Strategy.
Source: Annual Report
Piraeus Port Authority SA Research & Presentation Materials
Investment Committee & Corporate Partners
Industry Overview
Port Services Industry
Drivers Top Players in Europe
▪ Global Trade Expansion: As international commerce & e-commerce continues 5% 5% PSA International
to increase, there is a growing demand for efficient port services to handle the 5%
42% Hutchison Ports
movement of goods between countries. Approximately 80% of the world's trade 8% APM Terminals
volume is transported by sea and managed in ports globally
▪ Technological Advancements: Automation and digitalization are transforming DP World
port operations, enabling faster and more cost-effective services. Technologies
10% China Cosco Shipping
like automated cranes, smart ports, IoT devices, artificial intelligence, and Terminal Investment Ltd
blockchain for supply chain transparency enhance port efficiency and 10% CMA CGM
competitiveness. Other
15%
Projections ($Bn) Key Risks
Ris k Mitigants
Global Trade Volatility: Port services industry is highly Diversification of services: Ports can offer a
dependent on global trade volumes, which can be broader range of services beyond cargo handling,
impacted by economic downturns, geopolitical tensions, such as value-added logistics, warehousing, and
101.0 105.7 110.7 121.0 changes in trade policies…
88.0 92.1 96.5 intermodal transport options to diversify revenue
Inf ras tructure Capacity and Congestion : Operational efficiency: Use technology like
Por t congestion and inadeq uate in fra structure Terminal Operating Systems (TOS), IoT
2023 2024 2025 2026 2027 2028 2029 can lead to d elays, incr eased costs, and a loss sensors, and predictive analytics to optimize
cargo flow
of compe titiveness
Source: Mordor Intelligence
Piraeus Port Authority SA Research & Presentation Materials
Investment Committee & Corporate Partners
Financial Analysis
KPIs benchmark
EBITDA CAGR 2018A-2023A FCF Margin LTM ROIC LTM
15.8% Median: 13,89% Median: 3,90%
66.0%
21.4%
5.0%
31.4%
13.9% 5.1% 3.9%
7.6%
-5.0% -8.4%
-2.6% 1.2% 1.0% 2.4%
LTM EV/EBITDA LTM EV/FCF LTM P/E
Median: 11,24x Median: 17,20x Median: 10,47x
17.7x 35.7x 51.0x
11.2x 12.3x 22.6x
17.2x 22.5x
6.5x 12.8x
4.9x 8.5x 10.4x 10.5x 7.7x
Source: Own Research. TIKR
Piraeus Port Authority SA Research & Presentation Materials
Investment Committee & Corporate Partners
Valuation
Discounted Cash Flow
DCF
Growth Rate EV/EBITDA Exit Multiple
Discount Rate
Discount Rate
Source: Own Research. TIKR
Piraeus Port Authority SA Research & Presentation Materials
Investment Committee & Corporate Partners
Valuation
LBO Model
Assumptions IRR Sensitivity Analysis
Sources Uses Exit EV/EBITDA Multiple
Premium paid
Base Case Scenario
Entry Exit
(20% premium paid)
4.18x MOIC
20% IRR
8x EBITDA
Source:
Piraeus Port Authority SA Research & Presentation Materials
Investment Committee & Corporate Partners
Precedent Transactions
Multiples benchmark
Private Transactions & Median Premia Paid
Deal Description Implied EV EBITDA Implied EV/EBITDA Premium (%)
▪ Grimaldi acquires 67% stake in
Heraklion Port Authority S.A. for €119 million €4.19 million 28x -
€80 million
▪ CMA CGM acquires 47.6% stake in
Santos Brazil Participações S/A for $2.3 billion €230 million 10x 12%
1.1$bn
▪ MSC acquires 49.9% stake in
HHLA for 1.28$bn
$2.56 billion €229 million 11.1x 35%
▪ MSC acquires 42% of Clasquin at
142€/share €351 million €25.04 million 14x 13%
▪ DP World acquires 100% stake in
Puertos y Logistica S/A for €502 €502 million €44 million 11.4x 156%
million
Source: Own Research. TIKR Median: 11.1x Median: 25%
Piraeus Port Authority SA Research & Presentation Materials
Investment Committee & Corporate Partners
Illustrative Valuation for PPA
Valuation Summary
Illustrative Share Price Comments
Current Share Price: 27€ Fair Share Price: 42€
▪ 7% Revenue Growth, 7-8% Discount
Financial Analyses
Discounted Cash Flows 48€ 56€
Rate, 2-2,25% Perpetual Growth Rate
▪ EBITDA Margin 50%
Precedent Transactions 52€ 70€ ▪ 10-14x EV/EBITDA Industry Median
42€ 56€
▪ 8-11x EV/EBITDA
Reference Info.
Public Comps
▪ 8-12x P/E
22,7€ 34€
52 Week Trading Range
29,1€
▪ Min: 20,95€
20,9€
▪ Max: 29,10€
Source:
Piraeus Port Authority SA Research & Presentation Materials
Investment Committee & Corporate Partners
