Challenges and opportunities facing the maritime and ... - Finnlines

GRIMALDI GROUP
Metsäteollisuus ry Logistiikkaseminaari Helsinki 21 st August 2012

GRIMALDI GROUP
Grimaldi Group and Finnlines in short
Markets
Forest Industry transports
Challenges and opportunities
Over aged tonnage
Balancing flows
Market Volatility and Networking
Oil price incidence - efficiency
Coping with new Regulations
Shipping Competitiveness in SECA area

GRIMALDI GROUP
Grimaldi Group and
Finnlines in short
Forest industry and
transport markets
Challenges and
opportunities facing
the shipping sector
in Northern Europe
Over aged tonnage
Balancing flows
Volatility and networking
Oil price incidence-efficiency
Oncoming regulations
– NOx
– SOx
– CO 2
– Ballast Water
Shipping Competitiveness
in SECA areas
THE GROUP’S HISTORY
� Began its shipping activity in the late 40’ operating through the years in
different sectors: passengers, bulk, general cargo, tank, containers, cars
and ro/ro.
� After developing in the 60’s its maritime services within the Mediterranean,
the Group expanded into other areas of the world and further developed
the ro/ro concept with increasingly sophisticated and flexible ro/ro
multipurpose vessels.
� From 1996 to 2012, over 4 billion Euro have been invested in new
vessels, logistics platforms, logistics companies, hardware, software. This
strategy significantly increases the own Group’s logistics framework.
� 3 shipping co. acquired and controlled in a network expanding:
� Presence in the Baltic sea through acquisition in 2006

GRIMALDI GROUP
Grimaldi Group and
Finnlines in short
Forest industry and
transport markets
Challenges and
opportunities facing
the shipping sector
in Northern Europe
Over aged tonnage
Balancing flows
Volatility and networking
Oil price incidence-efficiency
Oncoming regulations
– NOx
– SOx
– CO 2
– Ballast Water
Shipping Competitiveness
in SECA areas
The Group today
Referred to the world maritime sector, Grimaldi Group is:
� The 1st operator for heavy ro/ro capacity, the 6th for cars, the 25th for
container transport
� 103 vessels owned and managed:
• Ro/ro,
• pure car&truck carriers,
• ro/pax & cruise ferries
� Units transported:
• 3.068.000 Car Equivalent Units
• 1.562.000 trailers/containers (FEU)
• 2.802.000 passengers
Main awards obtained:
� From 2003 to 2011 GM Supplier of the year
� 2003 Fiat Quality Award; Fiat Brazil Best Supplier of the year 2006
� Land Rover Best Supplier of the year 2003
� 2009 – Best “Cruise & Ferry” company, Lloyd’s List Global Award
� Other Stock Markets, Shipping, Journalism awards etc..

GRIMALDI GROUP
Grimaldi Group and
Finnlines in short
Forest industry and
transport markets
Challenges and
opportunities facing
the shipping sector
in Northern Europe
Over aged tonnage
Balancing flows
Volatility and networking
Oil price incidence-efficiency
Oncoming regulations
– NOx
– SOx
– CO 2
– Ballast Water
Shipping Competitiveness
in SECA areas
Key Figures Grimaldi / Finnlines Group
GRIMALDI Finnlines
Group Turnover (2011; in million EUR) 2 548 (605,2)
Approx. Number of people employed 10 264 (2 076)
• Number of employees ashore 4 264 (1 072)
• Number of people at sea 6 000 (1 004)
Fleet
• Average number of vessels operated 105 (26)
• Number of owned vessels 100 (25)
• Average age of own fleet (years) 10,5 (10)
• Total capacity of the fleet in GT 3 932 300 (709 740)
Cargo volumes transported (2011):
• Ro-Ro/Containers (FEU) 1 561 625 (715 633)
• Cars (CEU) 3 067 861 (176 000)
• Passengers
2 802 180 (635 000)
Terminals operated: 18 (3)

Forest Industry Exports from Finland since 1960’s
GRIMALDI GROUP
Grimaldi Group and
Finnlines in short
Forest industry and
transport markets
Challenges and
opportunities facing
the shipping sector
in Northern Europe
Over aged tonnage
Balancing flows
Volatility and networking
Oil price incidence-efficency
Oncoming regulations
– NOx
– SOx
– CO 2
– Ballast Water
Shipping Competitiveness
in SECA areas
16
14
12
10
8
6
4
2
Mln tonnes/m3
Paper & Board & Converted Products
Pulp
Sawn and planed goods
Wood-based panels
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
SOURCE: National Board of Customs

The main markets for Finnish forest industry products
GRIMALDI GROUP
Grimaldi Group and
Finnlines in short
Forest industry and
transport markets
Challenges and
opportunities facing
the shipping sector
in Northern Europe
Over aged tonnage
Balancing flows
Volatility and networking
Oil price incidence-efficiency
Oncoming regulations
– NOx
– SOx
– CO 2
– Ballast Water
Shipping Competitiveness
in SECA areas
30.3.2011
Total value of forest industry exports from Finland in 2011:
EUR 11.2 billion
Non-euro
EU country
21 %
Euro
countries
40 %
SOURCE: National Board of Customs. Furniture included.
Other
Europe
10%
Latin
Oceania America
2% 3%
Asia
15%
Africa
4%
North
America
5%
Main markets Share
Germany 18 %
UK 10 %
Russia 5 %
USA 5 %
France 4 %
China 4 %
Sweden 4 %

Lanemeter
80000
70000
60000
50000
40000
30000
20000
10000
GRIMALDI GROUP
0
SOURCE: Fearnleys
Over aged tonnage
�Over aged tonnage and thin orderbook: gaining back equilibrium
�Darwinian selection : after 2002 newbuildings mainly over 3000 lm vessels have been built.
> 25 years old
Finnlines fleet ’s
average age
Lanemeter
3000-
2500-3000
2000-2500
1500-2000
1000-1500
500-1000

GRIMALDI GROUP
Grimaldi Group and
Finnlines in short
Forest industry and
transport markets
Challenges and
opportunities facing
the shipping sector
in Northern Europe
Over aged tonnage
Balancing flows
Volatility and networking
Oil price incidence-efficiency
Oncoming regulations
– NOx
– SOx
– CO 2
– Ballast Water
Shipping Competitiveness
in SECA areas
Balancing export and import volumes and different commodity types
North
Bound
�Ships with optimal varied Cargo mix
South
Bound
� Diversified Commercial Contracts (paper, cars, trucks, containers…)
�Wide network (hub systems and connections to european/intercontinental
services)

GRIMALDI GROUP
SOURCE : WRTG Economics
Oil price incidence - Efficiency
OPEC
policies and
growing
FarEast
demand
Need for consumption savings:
�Technology investments (newbuildings/retrofitting
on young units)
�Hull maintenance and hydrodinamics
�Slow steaming,
New
green
technolo
gies
No certainity
over long
term
perspectives
�Departures reduction in accordance with
shippers, improved utilization
�Onboard procedures optimization (ballast,
trim, routing)

GRIMALDI GROUP
Grimaldi Group and
Finnlines in short
Forest industry and
transport markets
Challenges and
opportunities facing
the shipping sector
in Northern Europe
Imbalance
Volatility and networking
Oil price incidence-efficicency
Oncoming regulations
– NOx
– SOx
– CO 2
– Ballast Water
Shipping Competitiveness
in SECA areas
Environmental Requirements for Maritime Transports
2013 - ... 2025: Energy Efficiency Design Index (EEDI) for CO 2 reduction
– As from 1.1.2013 (not yet applied for roro and ropax vessels).
– Subsidy/penalty systems possible for low score ESI/CSI/EEDI units
2015 onward : Restriction of sulphur (SOx) emissions;
– 0,1 % Sulphur content in SECA Areas as from 1.1.2015
– Question of exemptions on specific routes and vessels is still open
2014 ... 2016: Ballast Water Convention (subject to ratification rate)
– Ratification/enforcement expected to be reached during 2013
– Treatment plants planned to become mandatory on existing
vessels after 2014 or 2016 (dependent on the size of the vessel);
for newbuildings from dec 2013.
– US additional restrictions possible
– Exceptions for transfers within closed sea under study
2016 or later: Restrictions on nitrogen oxide (Nox) emissions
– Tier II applies to vessels keel laid after 2011.
– Tier III : Baltic Sea as a special emission control area for Nox: for
new vessels keel laid 2016 or later NOx emissions reduced by 80%
2020 and later: Black Carbon, BC
– Technology not yet feasible, timetable and measures uncertain
Depending on IMO EEDI decision
and Authorities policies (e.g. ports)
Scrubber&retrofits: space, running &
maintenance + 2mln€/ship
or
Switch to gasoil: +50% fuel costs
•abt 0,6 mln€/ship +running
•US 0,8mln€/ship?
•Eventual exc. for close sea: 0€
Tier II :+ 3% fuel costs
Tier III:new engines
+……/ship
Depending on eventual IMO
decision

GRIMALDI GROUP
Grimaldi Group and
Finnlines in short
Forest industry and
transport markets
Challenges and
opportunities facing
the shipping sector
in Northern Europe
Balancing flows
Volatility and networking
Oil price incidence-efficiency
Oncoming regulations
– NOx
– SOx
– CO 2
– Ballast Water
Shipping Competitiveness
in SECA areas
0,1% SOx regulation: limits set by IMO Marpol Convention- Annex VI
Date
Sulfur Limit in Fuel (%
m/m)
SOx ECA Global
2000 1.5%
4.5%
2010.07
1.0%
2012
3.5%
2015
0.1%
2020 0.5%
For few units: possible
temp. exemptions to
IMO Marpol VI
regulations?
�Scrubbers
�LNG retrofit
�LNG new building
�HFO Desulphurisation
�MGO consumption
(awarding more efficient
tonnage)

O,1% SOx regulations: actions for reducing cost pressure on the industry
GRIMALDI GROUP
INSTITUTIONS
SHIPPERS
�Concentrate flows
ECA states
Shippers
Shipping
companies
�Select few big shipping partners with flexible/efficient tonnage
SHIPPING CO.
� Flexible tonnage for
changing flows
� Reducing fuel
incidence by optimizing
occupation rate
� Young/energy efficent
tonnage, tech
investments
� Operative fuel saving
measures (e.g. slow
steaming)
�Logistics i.e. avoiding need for express deliveries, scheduled slowsteaming etc.

GRIMALDI GROUP
Challenges and
opportunities
Over aged tonnage
Market Volatility &
networking
Flows Imbalance
Oil price incidence
Oncoming
Regulations
Finnlines 2012 vs 2009
Old charter tonnage redelivered
Connections to Antwerp&Wallhamn:
Grimaldi hubs to Africa, Atlantic, Med
Developed direct services from Uk, Swe,
Denm, Germ, Bel, Spa to Russia
More cargo mix, car contracts, truck co.,
Group wide agreements, more pax
Roro Investments, fuel saving measures,
less energy used per tkm
New hi-tech large multipurpose tonnage
Volumes
2011
Ant wer p
Wal l hamn
Commercial strenght, varied cargo mix
Young, numerous, flexible fleet

GRIMALDI GROUP
� Technological focus: hull
hydrodinamics, bulb, engines, rudders,
propellers (e.g. -12% consumption on
NB vs same type older vessel)
� Corporate Energy Saving Dept. with
specialized engineers (e.g. Systematic
consumption monitoring/improving)
� Economies of scope (e.g. car deck
design, ropax concept ..)
� Economies of scale (e.g.3/4000lm
units)
• Reinvesting profits in the Company
• Owned tonnage strategy gradual implementation
(e.g. from zero to 10 roro units owned)
� Efficient fleet management (e.g.
carrying +/- same cargo with 10 instead
of abt 20 ships)
� Yield management
� Commercial attitude and strong
partnerships (e,g, automotive, truck,
paper industry..)
� Sinergy with Mother Company and
Corporate approach (e.g. cooperation
with Grimaldi Sweden, ACL, Group hub
ports)

GRIMALDI GROUP