Attached files
| file | filename |
|---|---|
| 8-K - 8-K - AMPAL-AMERICAN ISRAEL CORP | zk1110654.htm |
| EX-99.1 - EXHIBIT 99.1 - AMPAL-AMERICAN ISRAEL CORP | exhibit_99-1.htm |
November 2011
COMPANY
PRESENTATION
PRESENTATION
EXHIBIT 99.2
2
About Ampal:
Ampal-American Israel Corporation (“Ampal” or the “Company”) and its subsidiaries acquire interests primarily in businesses
located in the State of Israel or that are Israel-related. Ampal is seeking opportunistic situations in a variety of industries, with a
focus on energy, chemicals and related sectors. Ampal’s goal is to develop or acquire majority interests in businesses that are
profitable and generate significant free cash flow which Ampal can control. For more information about Ampal please visit our web
site at www.ampal.com.
located in the State of Israel or that are Israel-related. Ampal is seeking opportunistic situations in a variety of industries, with a
focus on energy, chemicals and related sectors. Ampal’s goal is to develop or acquire majority interests in businesses that are
profitable and generate significant free cash flow which Ampal can control. For more information about Ampal please visit our web
site at www.ampal.com.
Safe Harbor Statement on Forward-Looking Statements
Certain information in this presentation includes forward-looking statements (within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 , as amended) and information relating to Ampal
that are based on the beliefs of management of Ampal as well as assumptions made by and information currently available to the
management of Ampal. When used in this presentation, the words "anticipate," "believe," "estimate," "expect," "intend," "plan,"
and similar expressions as they relate to Ampal or Ampal's management, identify forward-looking statements. Such statements
reflect the current views of Ampal with respect to future events or future financial performance of Ampal, the outcome of which is
subject to certain risks and other factors which could cause actual results to differ materially from those anticipated by the forward-
looking statements, including among others, the economic and political conditions in Israel, the Middle East, including the situation
in Iraq and Egypt, and the global business and economic conditions in the different sectors and markets where Ampal's portfolio
companies operate. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual
results or outcomes may vary from those described herein as anticipated, believed, estimated, expected, intended or planned.
Subsequent written and oral forward-looking statements attributable to Ampal or persons acting on its behalf are expressly
qualified in their entirety by the cautionary statements in this paragraph. Please refer to Ampal's annual, quarterly and periodic
reports on file with the SEC for a more detailed discussion of these and other risks that could cause results to differ materially.
Ampal assumes no obligation to update or revise any forward-looking statements.
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 , as amended) and information relating to Ampal
that are based on the beliefs of management of Ampal as well as assumptions made by and information currently available to the
management of Ampal. When used in this presentation, the words "anticipate," "believe," "estimate," "expect," "intend," "plan,"
and similar expressions as they relate to Ampal or Ampal's management, identify forward-looking statements. Such statements
reflect the current views of Ampal with respect to future events or future financial performance of Ampal, the outcome of which is
subject to certain risks and other factors which could cause actual results to differ materially from those anticipated by the forward-
looking statements, including among others, the economic and political conditions in Israel, the Middle East, including the situation
in Iraq and Egypt, and the global business and economic conditions in the different sectors and markets where Ampal's portfolio
companies operate. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual
results or outcomes may vary from those described herein as anticipated, believed, estimated, expected, intended or planned.
Subsequent written and oral forward-looking statements attributable to Ampal or persons acting on its behalf are expressly
qualified in their entirety by the cautionary statements in this paragraph. Please refer to Ampal's annual, quarterly and periodic
reports on file with the SEC for a more detailed discussion of these and other risks that could cause results to differ materially.
Ampal assumes no obligation to update or revise any forward-looking statements.
Use of Non-GAAP Financial Measures
Ampal uses certain non-GAAP financial measures in this presentation. Ampal uses non-GAAP financial measures as supplemental
measures of performance and believes these measures provide useful information to investors in evaluating our operations, period
over period. However, non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation
or as a substitute for Ampal’s financial results prepared in accordance with GAAP. In addition, investors should note that any non-
GAAP financial measures Ampal uses may not be the same non-GAAP financial measures, and may not be calculated in the same
manner, as that of other companies. Reconciliations of our non-GAAP financial measures are included in this presentation.
measures of performance and believes these measures provide useful information to investors in evaluating our operations, period
over period. However, non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation
or as a substitute for Ampal’s financial results prepared in accordance with GAAP. In addition, investors should note that any non-
GAAP financial measures Ampal uses may not be the same non-GAAP financial measures, and may not be calculated in the same
manner, as that of other companies. Reconciliations of our non-GAAP financial measures are included in this presentation.
§ Incorporated in New York
§ Invests in companies with a stable cash flow
§ Market Value (Million US$)** 24
§ Equity (Million US$) 133.1
3
Company Profile| AMPAL
General Data
Holding Structure
Proportion of Investments
(Holdings Book Value*)
* The Company’s Financial Statements are prepared in accordance with US GAAP (and not IFRS).
** Based on closing price on NASDAQ on November 10, 2011
• Ampal’s investment focus is principally on companies or ventures where
Ampal can exercise significant influence and use its management experience to
enhance those investments.
Ampal can exercise significant influence and use its management experience to
enhance those investments.
• In making its investment decisions Ampal considers among other things,
quality of management, potential return on investment, growth potential,
projected cash flow, investment size, financing and All of Ampal’s debts.
quality of management, potential return on investment, growth potential,
projected cash flow, investment size, financing and All of Ampal’s debts.
• Ampal seeks opportunistic situations in a variety of industries, with a focus on
energy, chemicals and related sectors.
energy, chemicals and related sectors.
• Ampal’s goal is to develop or acquire majority interests in businesses that are
profitable and generate significant free cash flow which Ampal can control.
profitable and generate significant free cash flow which Ampal can control.
• Ampal’s current policy is to apply retained earnings to finance its business
activities and to redeem or repay Ampal’s outstanding debt (including its
unsecured notes traded on the Tel Aviv Stock Exchange). The payment of cash
dividends in the future will depend upon Ampal’s operating results, cash flow,
working capital requirements, debt and other factors Ampal’s Board of
Directors will deem pertinent.
activities and to redeem or repay Ampal’s outstanding debt (including its
unsecured notes traded on the Tel Aviv Stock Exchange). The payment of cash
dividends in the future will depend upon Ampal’s operating results, cash flow,
working capital requirements, debt and other factors Ampal’s Board of
Directors will deem pertinent.
4
Strategy| AMPAL
5
Major Milestones| AMPAL
1400
1200
1000
800
800
600
400
200
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 Q3 2011
Total Assets (Million US$)
EMG
Purchase
012 Smile
Purchase
Gadot
Purchase
Registration
For trade on
TASE
012 Smile
Sale
Energy
7
EMG | East Mediterranean Gas - EMG Profile
§ EMG was established and registered in Egypt in
2000 and has constructed an off-shore gas pipeline
from El-Arish (Egypt) to Ashkelon (Israel) as well as
on-shore facilities.
2000 and has constructed an off-shore gas pipeline
from El-Arish (Egypt) to Ashkelon (Israel) as well as
on-shore facilities.
§ Egypt has undertaken to export up to 7 BCM of
natural gas annually for 20 years renewable to Israel
through EMG.
natural gas annually for 20 years renewable to Israel
through EMG.
§ EMG’s contracts with Israeli customers for Egyptian
natural gas may have terms of up to 20 years, with a
total of 140 BCM.
natural gas may have terms of up to 20 years, with a
total of 140 BCM.
§ The gas flow to Israel began in June 2008.
§ At the end of 2010 EMG provided gas to Israel
Electric Corporation and Mashav at an annual rate
of 2.5 BCM.
Electric Corporation and Mashav at an annual rate
of 2.5 BCM.
§ During 2011, several incidents interrupted EMG’s
gas flow, as detailed herein.
gas flow, as detailed herein.
§ Due to recent developments in Egypt, Ampal’s
valuations of EMG indicate a decrease of
approximately 35% in EMG’s value, compared to
December 31, 2010 (from US$2.9-3.3 billion, as of
December 31, 2010 to US$1.9-2.15 billion as of
September 30, 2011). Due to recent events, the
investment’s carrying amount (16.8%) was written
down to a value of approximately $311 million
(Representing a value of US$1.85 billion).
valuations of EMG indicate a decrease of
approximately 35% in EMG’s value, compared to
December 31, 2010 (from US$2.9-3.3 billion, as of
December 31, 2010 to US$1.9-2.15 billion as of
September 30, 2011). Due to recent events, the
investment’s carrying amount (16.8%) was written
down to a value of approximately $311 million
(Representing a value of US$1.85 billion).
8
EMG | East Mediterranean Gas - 2011 Updates
• On November 10, 2011, there was an explosion on GASCO’s (the Egyptian gas transport company) pipeline
approximately 20 Kilometers west of El-Arish. The gas supply to EMG and its clients has been interrupted,
and as of the date of this presentation was published the expected gas resumption date is unknown.
approximately 20 Kilometers west of El-Arish. The gas supply to EMG and its clients has been interrupted,
and as of the date of this presentation was published the expected gas resumption date is unknown.
• From February 5, 2011 to July 30, 2011, there have been five alleged terror attacks on GASCO’s pipeline.
• On July 30, 2011, in the wake of violent incidents in El-Arish, Egypt, there was an attempt to cause damage
to the EMG site near El-Arish. The security forces on site returned fire, prevented any penetration of the
EMG site and repelled the attack.
to the EMG site near El-Arish. The security forces on site returned fire, prevented any penetration of the
EMG site and repelled the attack.
• Due to the alleged terror attacks, gas supply to EMG and its clients has been interrupted from February 5,
2011 to March 15, 2011, April 27, 2011 to June 9, 2011, July 4, 2011 to July 5, 2011, July 12, 2011 to
October 23, 2011 and from November 10, 2011.
2011 to March 15, 2011, April 27, 2011 to June 9, 2011, July 4, 2011 to July 5, 2011, July 12, 2011 to
October 23, 2011 and from November 10, 2011.
• As a result of the continued interruption of gas supply to EMG and the delivery of gas to EMG below
contracted quantities, the international shareholders of EMG, including Ampal, have commenced
procedures under applicable bilateral investment treaties between several countries and Egypt. Such
procedures may ultimately result in arbitration of claims under the various treaties, EMG’s gas supply
agreement or other agreements.
contracted quantities, the international shareholders of EMG, including Ampal, have commenced
procedures under applicable bilateral investment treaties between several countries and Egypt. Such
procedures may ultimately result in arbitration of claims under the various treaties, EMG’s gas supply
agreement or other agreements.
• In addition, Ampal has also been advised by EMG that EMG has initiated arbitration proceedings against
the government-owned Egyptian gas supplier alleging a breach of various provisions of its gas purchase
agreement. EMG seeks, in part, to enforce the undertakings included in the gas purchase agreement.
the government-owned Egyptian gas supplier alleging a breach of various provisions of its gas purchase
agreement. EMG seeks, in part, to enforce the undertakings included in the gas purchase agreement.
§ Demand for natural gas in
Israel continues to
increase both for
electricity generation and
industrial conversions.
Israel continues to
increase both for
electricity generation and
industrial conversions.
§ EMG is one of only two
gas suppliers in Israel.
gas suppliers in Israel.
§ EMG contracted the
supply of more than half
of the natural gas
consumed by the Israeli
market.
supply of more than half
of the natural gas
consumed by the Israeli
market.
§ Assuming a positive
resolution of the situation
in Egypt, EMG is currently
the only company that can
provide additional
quantities of gas to Israel
in the years 2011-2013.
resolution of the situation
in Egypt, EMG is currently
the only company that can
provide additional
quantities of gas to Israel
in the years 2011-2013.
9
EMG | East Mediterranean Gas
Natural Gas in Israel
§ EMG has access to Egyptian gas reserves
totaling in excess of 2,500 BCM from proven
diverse sources
totaling in excess of 2,500 BCM from proven
diverse sources
§ EMG has skilled and professional
management with decades of experience in
Egypt and its gas industry
management with decades of experience in
Egypt and its gas industry
§ EMG has already concluded several long-
term contracts for the sale of over 90 BCM
valued at over US$15 billion
term contracts for the sale of over 90 BCM
valued at over US$15 billion
§ EMG's estimated revenues (assuming
delivery of 7 BCM annually) - over US$1.0
billion
delivery of 7 BCM annually) - over US$1.0
billion
§ Estimated EBITDA (with provision of 7 BCM
annually) - over US$350 million
annually) - over US$350 million
§ Pipeline construction cost - approximately
US$460 million
US$460 million
§ Debt Balance - US$170 million
§ Due to current interruption in gas supply,
Ampal cannot determine the expected first
dividend from EMG
Ampal cannot determine the expected first
dividend from EMG
EMG
10
EMG | Signed Contracts & Options
BCM
11
Renewable Energy
§ GWE is owned equally by Clal and Ampal (50%/50%)
§ GWE focuses on the new development and acquisition of controlling interests in renewable
energy, including wind energy projects outside of Israel
energy, including wind energy projects outside of Israel
§ GWE currently has projects in Greece and Poland, which are in varying developmental
stages, with a total capacity of over 250 MW
stages, with a total capacity of over 250 MW
§ As of September 30, 2011, GWE has received a production license for 2 projects for a total
capacity of approximately 60MW wind farms, and 20MW photovoltaic projects, all in
Greece
capacity of approximately 60MW wind farms, and 20MW photovoltaic projects, all in
Greece
Global Wind Energy (“GWE”)
12
Renewable Energy
§ Production of Bio-Ethanol fuel from sugarcane.
§ The Project includes the development of a 11,000 hectare sugar cane plantation
(Agricultural Project) and the design, construction and operation of an ethanol
production plant (Industrial Project). 10,000 hectares are already available for the
Project, including purchased and leased land.
(Agricultural Project) and the design, construction and operation of an ethanol
production plant (Industrial Project). 10,000 hectares are already available for the
Project, including purchased and leased land.
§ The Colombian government supports the development of the ethanol industry and,
since 2000, has adopted a series of measures to encourage the supply and demand for
ethanol and to create a regulatory framework to set prices, including the adoption of a
series of laws, decrees and resolutions to stimulate carburant alcohol production, sale
and consumption, and including the Colombian Law that stipulates mandatory 10%
blending of Ethanol for gasoline use in urban areas.
since 2000, has adopted a series of measures to encourage the supply and demand for
ethanol and to create a regulatory framework to set prices, including the adoption of a
series of laws, decrees and resolutions to stimulate carburant alcohol production, sale
and consumption, and including the Colombian Law that stipulates mandatory 10%
blending of Ethanol for gasoline use in urban areas.
§ Ampal holds a loan of approximately US$22 million convertible to 25% of the Project, to
be converted upon the first withdrawal from the financing bank.
be converted upon the first withdrawal from the financing bank.
Ethanol Project in Colombia
Chemicals
14
Gadot Chemicals Tankers & Terminals | Gadot
§ The leading Israeli company for chemical
supply and services to customers
throughout the supply chain of chemicals
from producer to end-user (mainly liquid
chemicals).
supply and services to customers
throughout the supply chain of chemicals
from producer to end-user (mainly liquid
chemicals).
Gadot Profile
Gadot Chemicals Tankers & Terminals | Gadot
§ Years of experience in storage, handling, packaging, transporting and
shipping hazardous materials.
shipping hazardous materials.
§ Provides services to the entire chemicals supply chain in Israel.
§ Geographic Areas of Activity: Israel, Western Europe, South and
Central America, USA.
Central America, USA.
§ Clients, including major Israeli companies:
Teva, Makhteshim, ICL, Palsan, HP and others.
Chemicals Field
16
Gadot Chemicals Tankers & Terminals | Gadot
Financial Highlights
|
US$ in Millions
|
Q3 2011
(unaudited)
|
Q3 2010
(unaudited)
|
2010
|
|
Revenues
|
139
|
122
|
497
|
|
Adjusted
EBITDA* |
8
|
6
|
26
|
*See EBITDA break-down on Appendix A
Financials
18
Condensed Solo* (unconsolidated) Balance Sheet (Pro-Forma) - September 30, 2011
* Including Gadot, Merhav Ampal Energy Holdings, LP and Country Club Kfar Saba on equity basis and not consolidated.
** Including a convertible loan of approximately US$22M to the project in Colombia.
|
Assets
|
|
Liabilities and
Shareholders’
Equity
|
||||
|
|
|
US$
(in Millions)
|
|
|
|
US$
(in Millions)
|
|
Cash, deposits and other
financial items**
|
|
108.1
|
|
Banks and Debentures
|
|
347.3
|
|
Investments
|
|
352.1
|
|
Accounts Payable and
Others
|
|
|
|
Fixed Assets
|
|
2.3
|
|
|
24.0
|
|
|
Other
|
|
42.4
|
|
Equity
|
|
133.6
|
|
|
|
|
|
|
|
|
|
Total
|
|
504.9
|
|
Total
|
|
504.9
|
19
Main Holdings - September 30, 2011
* Ampal’s Financial Statements reflect a 16.8% interest in the shares of EMG (approximately US$311M), which includes
the 8.6% interest in EMG held by Ampal’s joint venture with certain Israeli institutional investors, of which a 4.3%
interest in EMG (approximately US$80M) is attributable to the institutional investors.
the 8.6% interest in EMG held by Ampal’s joint venture with certain Israeli institutional investors, of which a 4.3%
interest in EMG (approximately US$80M) is attributable to the institutional investors.
** Due to the impairment of Ampal’s investment in EMG, the investment’s carrying amount (16.8% of EMG) of
approximately US$361M (as of December 31, 2010) was written down to its fair value of approximately US$311M.
approximately US$361M (as of December 31, 2010) was written down to its fair value of approximately US$311M.
Ampal’s
ownership %
ownership %
12.5%
100%
EMG*
Gadot
Other
Total
Book Value (US$
in Millions)
in Millions)
231.2
112.7
8.2
352.1
Method of Book Value
Cost (after impairment)**
Consolidated
Current Liabilities (excluding banks and
debentures)
debentures)
Current Assets (excluding cash, deposits
and other financial items)
and other financial items)
20
Condensed Consolidated Balance Sheet - Septmber 30, 2011
Cash, deposits and other financial items*
Fixed Assets
Investments:
Other Investments
187.4
118.9
947.6
197.1
231.2
79.6
9.9
US$ (in
Millions)
Millions)
EMG (Ampal)
Gadot - Construction of Vessels
Capital Note - Institutional Investors in EMG
Other Liabilities (including minority rights)
92.0
947.6
49.5
98.7
12.0
US$ (in
Millions)
Millions)
Banks - Ampal
260.5
89.4
211.9
Debentures
Loans:
Equity
133.6
*Including a convertible loan of approximately US$22M to the project in Colombia
Other Non-Current Assets
42.9
Goodwill and Intangible Assets
80.6
Thank you!
8
2
6
5
1
6
22
Appendix A - EBITDA Break-Down for Gadot
Revenues
Expenses
Profit
Marketing, sales, General,
administrative and other expenses
administrative and other expenses
Depreciation and amortization
EBITDA
Non-recurring and stock
compensation expenses
compensation expenses
Adjusted EBITDA
497
(452)
45
(40)
17
22
4
26
Twelve Months Ended
December 31, 2009
December 31, 2009
139
122
(126)
(111)
13
11
(11)
(10)
4
4
Three Months
Ended
September 30,
2011
(Unaudited)
Ended
September 30,
2011
(Unaudited)
Three Months
Ended
September 30,
2010
(Unaudited)
Ended
September 30,
2010
(Unaudited)
23
Adjusted EBITDA is defined as earnings before interest, income tax provision,
depreciation and amortization, adjusted for non recurring expenses. Management
believes adjusted EBITDA for Gadot to be a meaningful indicator of its
performance that provides useful information to investors regarding its financial
condition and results of operations. Presentation of adjusted EBITDA is a non-
GAAP financial measure commonly used by management to measure operating
performance. While management considers adjusted EBITDA to be an important
measure of comparative operating performance, it should be considered in
addition to, but not as a substitute for, net income and other measures of financial
performance reported in accordance with Generally Accepted Accounting
Principles. Adjusted EBITDA does not reflect cash available to fund cash
requirements. Not all companies calculate adjusted EBITDA in the same manner,
and the measure as presented may not be comparable to similarly-titled measures
presented by other companies.
depreciation and amortization, adjusted for non recurring expenses. Management
believes adjusted EBITDA for Gadot to be a meaningful indicator of its
performance that provides useful information to investors regarding its financial
condition and results of operations. Presentation of adjusted EBITDA is a non-
GAAP financial measure commonly used by management to measure operating
performance. While management considers adjusted EBITDA to be an important
measure of comparative operating performance, it should be considered in
addition to, but not as a substitute for, net income and other measures of financial
performance reported in accordance with Generally Accepted Accounting
Principles. Adjusted EBITDA does not reflect cash available to fund cash
requirements. Not all companies calculate adjusted EBITDA in the same manner,
and the measure as presented may not be comparable to similarly-titled measures
presented by other companies.