Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — Neptune Orient Lines — Q3 2012 Earnings Presentation
36 slides from Singapore Exchange's earnings presentation, Oct 25, 2012
Slide 1: 3Q 2012 Performance Review
3Q 2012 Performance Review 25 October 2012
Slide 2: Forward Looking Statements
Forward Looking Statements The following presentation includes forward-looking statements, which involve known and unknown risks and uncertainties, that could cause actual results or performance to differ. Forward looking information is based on current views and assumptions of management, including
Slide 3: 1. 3Q 2012 Results Highlights
1. 3Q 2012 Results Highlights
Slide 4: Group achieves US$50 million net profit from cost efficiencies, stable rates & volume growth
Group achieves US$50 million net profit from cost efficiencies, stable rates & volume growth • Core EBIT of US$74m for 3Q 2012 • Net profit of US$50m for 3Q 2012 • Improved results across Liner & Logistics Efficiency program on track: • US$135m savings in 3Q 2012 • US$360m savings YTD 2012 Slot cost
Slide 5: Third improved quarter turns Group to net profit
Third improved quarter turns Group to net profit US$m US$m Revenue (LHS) Net profit (RHS) Core EBIT (RHS) 3,000 400 300 2,500 2,302 200 2,000 74 100 1,500 50 - 1,000 (100) 500 (200) - (300) 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Note: 1Q and 4Q are normalised to 1
Slide 6: Liner cost & efficiency focus improves results
Liner cost & efficiency focus improves results Volume Core EBIT ('000s FEU) (US$m) 1,000 150 824 791 764 692 699 720 707 7 55 500 -8 -53 -88 0 -246 -297 -500 -350 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Volume (FEU) (LHS) Liner Core EBIT (US$m) (RHS) Fleet Renewal is Lowering Slot Cost Cost & Efficiency
Slide 7: ELP & Organizational streamlining going to plan
ELP & Organizational streamlining going to plan Efficiency Leadership Program (ELP) delivers results: • US$135m cost savings in 3Q12 • US$360m cost savings YTD12 Network- • On track for US$500m full year target related 22% Bunker- related 44% Organizational streamlining Terminals -related improving
Slide 8: Logistics sustains organic growth, expands China footprint
Logistics sustains organic growth, expands China footprint Double digit revenue growth, Core EBIT of US$19m in 3Q 2012 Acquisition of APLL-Zhiqin will expand nationwide network to nearly 80 locations to grow domestic logistics business US$m 3Q Logistics Revenue US$m YTD Logistics Revenue 1,200 4
Slide 9: 2. 3Q 2012 Financial Performance
2. 3Q 2012 Financial Performance
Slide 10: Group Financial Highlights
Group Financial Highlights Core EBIT US$74 million, Net profit US$50m in 3Q12 US$m YTD12 YTD11 %▲ 3Q12 3Q11 %▲ Revenue 7,013 6,808 3 2,302 2,213 4 Core EBITDA 86 111 (23) 146 (5) n.m. • Depreciation & Amortisation (229) (211) 8 (72) (67) 7 Core EBIT (before non- (143) (100) 43 74 (72) n.m. recurring
Slide 11: Financial Highlights by Business Segment
Financial Highlights by Business Segment Improved Liner performance from cost & efficiency focus, Logistics maintains profitable growth Revenue (US$m) YTD12 YTD11 %▲ 3Q12 3Q11 %▲ Liner 5,965 5,868 2 1,961 1,904 3 Logistics 1,120 1,015 10 365 333 10 Elimination (72) (75) (4) (24) (24) - Total Revenue
Slide 12: Group Financial Profile
Group Financial Profile Resilient financial position Shareholders’ funds of US$2.4 billion Net current assets of US$330 million The Group also has sizeable committed long term credit facilities from large reputable financial institutions to meet its commitments as well as to repay any debts as
Slide 13: Group Balance Sheet Highlights
Group Balance Sheet Highlights US$m 21 Sep’ 12 30 Dec’ 11 Total Assets 7,922 6,962 Total Liabilities 5,552 4,310 Total Equity 2,370 2,652 Total Debt 3,530 2,354 Total Cash 709 228 Net Debt 2,821 2,126 Gearing (Gross) 1.49x 0.89x Gearing (Net) 1.19x 0.80x NAV per share (US$) 0.90 1.01 (S$) 1.10 1.31
Slide 14: Group Cash Flow Highlights
Group Cash Flow Highlights US$m YTD12 YTD11 Cash & Cash Equivalents - Beginning @ 1Q 228 977 Cash (Outflow)/Inflow Operating Activities (92) 22 Investing/Capex Activities (562) (1,222) Financing Activities 1,135 588 Cash & Cash Equivalents – Closing @ 3Q 709 365 Page 14 | 25 October 2012 | 3Q 2012 P
Slide 15: Group Capital Expenditure
Group Capital Expenditure US$m YTD12 YTD11 1. Vessels 550 992 2. Equipment / Facilities 65 112 3. Drydock 18 42 4. IT 22 42 5. Others 6 4 Total 661 1,192 Page 15 | 25 October 2012 | 3Q 2012 Performance Review
Slide 16: 3. Liner
3. Liner
Slide 17: Liner Results Highlights
Liner Results Highlights • Core EBIT profit of US$55m in 3Q12 • Core EBIT loss of US$184m in YTD12 • Continued gains in efficiency & cost savings • Stable freight rates & higher volume in 3Q12 Sustained efficiency & cost gains in YTD12: • Volume up 3%, fleet capacity down 7% and fuel consumption dow
Slide 18: Liner Results Summary
Liner Results Summary US$m YTD12 YTD11 %▲ 3Q12 3Q11 %▲ Revenue 5,965 5,868 2 1,961 1,904 3 Core EBITDA 37 55 (33) 124 (23) n.m. Core EBIT (184) (149) 23 55 (88) n.m. EBIT (293) (149) 97 56 (88) n.m. Core EBIT margin (%) (3.1) (2.5) 2.8 (4.6) Liner achieved YTD12 revenue of US$6 billion, a year-on-ye
Slide 19: Volume and Average Revenue/FEU Trend
Volume and Average Revenue/FEU Trend 3Q12 Average Revenue/FEU up 2% year-on-year '000 FEU/ US$/FEU Average Period Volume (RHS) Average Revenue per FEU (LHS) week 3,600 70 3Q11 Average 3Q12 Average Revenue/FEU Revenue/FEU US$2,539 US$2,601 60 3,200 50 2,800 40 2,400 30 2,000 20 1,600 10 1,200 - P8 P9
Slide 20: Operational Update
Operational Update Volume and Revenue/FEU growth in 3Q12 despite weak market Volume (‘000 FEUs) YTD12 YTD11 %▲ 3Q12 3Q11 %▲ Transpacific 624 623 - 207 203 2 Latin America 153 135 13 50 44 14 Asia-Europe 354 360 (2) 112 116 (3) Transatlantic 122 101 21 41 30 37 Intra-Asia 965 936 3 297 306 (3) Total
Slide 21: Improved utilization and trade balance drives empty repositioning YTD12 costs down 5%
Improved utilization and trade balance drives empty repositioning YTD12 costs down 5% Maintained improved trade balance despite seasonal dip in 3Q backhaul Headhaul utilization Backhaul utilization 100% 95% 95% 94% 94% 94% 92% 92% 91% 93% 90% 91% 91% 89% 85% 87% 86% 85% 80% Q1 Q2 Q3 Q4 Q1 Q2 Q3 2011
Slide 22: Fleet Renewal
Fleet Renewal Building a modern and cost-competitive fleet, seven 10,000 TEU vessels already delivered in 2012 8,100 TEU 9,000 TEU 10,000 TEU 14,000 TEU Total vessels TEUs 250,000 21 200,000 10 x 14,000 TEU 150,000 10 100,000 3 x 10,000 TEU 9 x 9,000 TEU 50,000 7 x 10,000 3 TEU vessels delivered 3 x
Slide 23: Fleet Renewal
Fleet Renewal Improving slot costs with more efficient newbuild ships APL Fleet APL Fleet Charters Start YTD 2012 Net capacity End 3Q 2012 expiring change 4Q 2012 to 149 vessels -43,000 TEU 132 vessels 2014 640,000 TEUs 597,000 TEUs +7 newbuild ships 29 vessels Average size -24 charter/own ships Ave
Slide 24: 4. Logistics
4. Logistics
Slide 25: Logistics Results Highlights
Logistics Results Highlights • Core EBIT profit of US$19m in 3Q12 • Core EBIT profit of US$41m in YTD12 Continued business growth: • 10% revenue growth in 3Q 2012, 10% in YTD 2012 • Strong demand for rail and land-based logistics services Expanding growth platform in China: • Acquiring remaining sha
Slide 26: Logistics Results Highlights
Logistics Results Highlights US$m YTD12 YTD11 %▲ 3Q12 3Q11 %▲ Revenue 1,120 1,015 10 365 333 10 Core EBITDA 49 56 (13) 22 18 22 Core EBIT 41 49 (16) 19 16 19 EBIT 39 48 (19) 18 16 13 Core EBIT margin (%) 3.7 4.8 5.2 4.8 Logistics achieved YTD12 revenue of US$1.1 billion, growing 10% year-on-year (
Slide 27: Performance Breakdown
Performance Breakdown Growth across both business segments US$m YTD12 YTD11 %▲ 3Q12 3Q11 %▲ Revenue 1,120 1,015 10 365 333 10 • Contract Logistics 740 639 16 232 206 13 • International Services 380 376 1 133 127 5 Core EBIT 41 49 (16) 19 16 19 • Contract Logistics 21 20 5 9 6 50 • International Serv
Slide 28: Revenue and Core EBIT Margin Trend
Revenue and Core EBIT Margin Trend Record weekly revenue growth, 3Q12 margin recovery mainly from stronger demand and improved cost management Weekly Revenue Core EBIT (US$m) Margin (%) Weekly Revenue (US$m) (LHS) Core EBIT Margin (%) (RHS) 35 15.0% 30 10.0% 25 6.0% 5.7% 20 5.1% 5.3% 5.1% 5.2% 4.8%
Slide 29: Expanding APL Logistics China growth platform
Expanding APL Logistics China growth platform • Acquire remaining shares in APLL-Zhiqin, turning it into wholly-owned subsidiary • Expands nationwide network to nearly 80 offices & hub locations • Positioned to better serve international customers seeking to penetrate China’s fast-growing consumptio
Slide 30: Revenue Trend by Region
Revenue Trend by Region Revenue growth led by Americas which benefited from expansion into US intermodal and strong demand from automotive sector 24% (Asia/Middle 26% (Asia/Middle East) East) $273 $264 66% (Americas) 62% (Americas) $106 $120 $631 $741 10% (Europe) 12% (Europe) YTD12 Revenue Breakdow
Slide 31: 5. Group Outlook
5. Group Outlook
Slide 32: Group Outlook
Group Outlook The Group turned in an improved third quarter result due mainly to cost savings and improved business efficiencies. However, the macro-economic outlook remains weak and the container shipping industry continues to face overcapacity and high fuel prices. The Group posted weak first quar
Slide 33: Appendix
Appendix
Slide 34: Logistics - Revenue Trend by Customer Segment
Logistics - Revenue Trend by Customer Segment Greater demand for our auto-related logistics services increases Auto/Industrial segment share. 3% (Electronics/Hi tech) 3% (Electronics/Hi tech) 9% (Others) 10% (Others) 53% (Auto/Industrial) 41% (Auto/Industrial) 12% (Consumer) 12% (Consumer) 23% (Reta
Slide 35: Group Fuel and Currency Exposures
Group Fuel and Currency Exposures Bunker The Group continues to recover part of its fuel price increases from customers through bunker adjustment factors. The Group also maintains a policy of hedging its bunker exposures. Foreign exchange Major foreign currency exposures are in Euro, Singapore
Slide 36: End of Presentation Thank You
Neptune Orient Lines Ltd 456 Alexandra Road, NOL Building End of Presentation Singapore 119962 Tel: (65) 6278 9000 Thank You Fax: (65) 6278 4900 Company registration number : 196800632D Website: www.nol.com.sg