Eimskipafelag Islands Hf. · OMXICE:EIM
Eimskipafelag Islands Hf — FY2017 Earnings Presentation
36 slides from Eimskipafelag Islands Hf's earnings presentation, Feb 23, 2018
Slide 1: 2017 was a year of growth for Eimskip
2017 WAS A YEAR OF GROWTH FOR EIMSKIP 2017 and Q4 - 23 February 2018 | EBITDA forecast for 2018 EUR 60 to 65 million
Slide 2: Highlights
HIGHLIGHTS 2
Slide 3: Key highlights for 2017
KEY HIGHLIGHTS FOR 2017 2017 compared to 2016 REVENUE AFFECTING REVENUE REVENUE Liner services + New companies EUR 664.0 m EUR 438.4 m, up 15.3% + Volume growth up 29.2% Forwarding services + International freight EUR 225.6 m, up 68.8% rates EBITDA AFFECTING EBITDA + New companies EBITDA Liner servi
Slide 4: Transported volume 2013 to 2017
TRANSPORTED VOLUME 2013 TO 2017 CAGR 5.4% for liner services and 15.8% for forwarding services LINER SERVICES FORWARDING SERVICES Volume index: 2010 volume at 100 * New acquisitions account for 29.2% and organic growth 12.0% 4
Slide 5: Key highlights for Q4 2017
KEY HIGHLIGHTS FOR Q4 2017 Q4 2017 compared to Q4 2016 REVENUE REVENUE Liner services AFFECTING REVENUE EUR 116.7 m, up 14.7% + New companies EUR 175.9 m + Volume growth up 25.2% Forwarding services EUR 59.2 m, up 52.7% EBITDA AFFECTING EBITDA EBITDA Liner services + Volume growth EUR 11.9 m EUR 8.8
Slide 6: Transported volume in Q4 2013 to 2017
TRANSPORTED VOLUME IN Q4 2013 TO 2017 CAGR 5.3% for liner services and 16.4% for forwarding services LINER SERVICES FORWARDING SERVICES Q4 Q4 Volume index: 2010 volume at 100 * New acquisitions account for 25.2% and organic growth 18.8% 6
Slide 7: Revenue and EBITDA 2013 to 2017 by quarter
REVENUE AND EBITDA 2013 TO 2017 BY QUARTER Revenue and EBITDA in 2017 outperform the previous years REVENUE EBITDA EUR million EUR million * Add-back of EUR 2.3 million non-recurring charges in Q1 2017 is offset by a EUR 2.5 million non-recurring revenue item in Q4 2017 7
Slide 8: China Forwarders Freight Index
CHINA FORWARDERS FREIGHT INDEX China - Europe 8
Slide 9: Bunker price development
BUNKER PRICE DEVELOPMENT Average fuel price in 2017 approximately 40% up from 2016 Rotterdam heavy fuel price in USD 9
Slide 10: Liner services volume
LINER SERVICES VOLUME Iceland, Faroe Islands, Norway and Trans-Atlantic 10
Slide 11: Forwarding services volume
FORWARDING SERVICES VOLUME Reefer and dry cargo forwarding 11
Slide 12: Financial results
FINANCIAL RESULTS 12
Slide 13: Income statement 2017
INCOME STATEMENT 2017 A year of growth, strike, imbalance challenges and investment in increased capacity Revenue Expenses EBITDA EUR 664.0 m EUR 606.8 m EUR 57.2 m up 29.2% up 31.8% up 7.0% Net finance expense Net earnings Depreciation and EUR 7.2 m EUR 16.8 m amortization compared to compared to E
Slide 14: Operating expenses bridge
OPERATING EXPENSES BRIDGE Increased expenses largely affected by new companies and increased capacity 14
Slide 15: Salary bridge 2017
SALARY BRIDGE 2017 Salaries and related expenses increased by 13.2%, thereof EUR 8.6 million due to strengthening of the ISK 15
Slide 16: Development of the segments EBITDA 2013 to 2017
DEVELOPMENT OF THE SEGMENTS EBITDA 2013 TO 2017 Substantial growth in forwarding increasing the proportion of asset-light EBITDA and generating higher return on equity 16
Slide 17: Geographical split of revenue
GEOGRAPHICAL SPLIT OF REVENUE Europe has grown due to new forwarding acquisitions 17
Slide 18: Revenue and expenses by currency 2017
REVENUE AND EXPENSES BY CURRENCY 2017 Income statement relatively naturally hedged – long in USD and short in ISK 18
Slide 19: Currency exchange gains and losses by quarter 2013 to 2017
CURRENCY EXCHANGE GAINS AND LOSSES BY QUARTER 2013 TO 2017 Accumulated fluctuations 2013 to 2016 positive of EUR 7.7 million and 2017 negative of EUR 3.3 million 19
Slide 20: Revenue by business segment
REVENUE BY BUSINESS SEGMENT Liner services and forwarding services 20
Slide 21: EBITDA by business segment
EBITDA BY BUSINESS SEGMENT Liner services and forwarding services 21
Slide 22: Financial ratios 2013 to 2017
FINANCIAL RATIOS 2013 TO 2017 Increased leverage due to new acquisitions and other investments NET DEBT / LTM-EBITDA NET DEBT AND EQUITY RATIO EUR million EUR million 22
Slide 23: Cash flow bridge 2017
CASH FLOW BRIDGE 2017 Affected by M&A investments and vessel investments * Includes EUR 12.3 million on vessel building in China, EUR 6.0 million for the vessel Selfoss and EUR 4.1 million for harbor cranes 23
Slide 24: Capex 2013 to 2017
CAPEX 2013 TO 2017 Investments 2017 include EUR 12.3 million for vessel under construction and EUR 8.3 million for three buildings in Iceland 24
Slide 25: Dividend proposal 2018
DIVIDEND PROPOSAL 2018 Proposed total payment EUR 10.2 million DIVIDEND POLICY DIVIDEND PROPOSAL 2018 The policy of Eimskipafélag Íslands hf. is ISK 6.80 per share to pay annual dividend that equals an The same payment per share as last amount in the range of 10-65% of net year profit after taxes.
Slide 26: Ongoing projects and future development
ONGOING PROJECTS AND FUTURE DEVELOPMENT 26
Slide 27: Strategic priorities 2018
STRATEGIC PRIORITIES 2018 27
Slide 28: Eimskip's sailing system
EIMSKIP’S SAILING SYSTEM Six weekly sailing routes in the North Atlantic 28
Slide 29: Evolution of the sailing system
EVOLUTION OF THE SAILING SYSTEM Weekly services in all routes Eimskip has over the last three years added three vessels to its container liner system, increasing capacity by 35% At the same time the transported volume increased by 32% Adding a vessel to the system costs about EUR 5 million ann
Slide 30: Weekly services to North America
WEEKLY SERVICES TO NORTH AMERICA Focus on sales in Trans-Atlantic services A third vessel was added to the Green Line in November 2017 to provide weekly service Weekly service has been well received by the market Shorter transit time Only liner service that provides weekly connection between
Slide 31: Acquisitions
ACQUISITIONS Ongoing in 2018 Eimskip continues to work on strategic accretive acquisitions to increase shareholder value The company is currently working on potential acquisitions in its core markets 31
Slide 32: Eimskip and Royal Arctic Line
EIMSKIP AND ROYAL ARCTIC LINE The cooperation regarding the vessel sharing agreement estimated to begin in the middle of 2019 Eimskip has ordered two 2,150 TEU vessels at a cost of USD 32 million each, Eimskip has secured an attractive long-term financing with a German bank, for delivery from a
Slide 33: EBITDA forecast for 2018
EBITDA FORECAST FOR 2018 EBITDA in the range of EUR 60 to 65 million The outlook for liner services and forwarding for 2018 is positive Liner services Weekly services in all routes Growth expected in import and export volumes in Iceland Focus on Trans-Atlantic sales Operations in the Far
Slide 34: Questions
QUESTIONS 34
Slide 35: Disclaimer
DISCLAIMER Information contained in this presentation is based on sources that Eimskipafélag Íslands hf. (“Eimskip“ or the ”Company“) considers reliable at each time. Its accuracy or completeness can however not be guaranteed. Copyright of information contained in this presentation is owned by Eimsk
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