Hapag-lloyd Ag · XETR:HLAG
Hapag-lloyd — Merger or Acquisition (July 2016)
24 slides from Hapag-lloyd's merger presentation, Jul 18, 2016
Slide 1: Investor Presentation – Signing of Business Combination Agreement
Investor Presentation – Signing of Business Combination Agreement 18 July 2016 1
Slide 2: Disclaimer
Disclaimer Forward-looking Statements This presentation contains forward-looking statements that involve a number of risks and uncertainties. Such statements are based on a number of assumptions, estimates, projections or plans that are inherently subject to significant risks, as well as uncertainti
Slide 3: Hapag-Lloyd and UASC sign Business Combination Agreement
Hapag-Lloyd and UASC sign Business Combination Agreement Opening remarks INDUSTRY CONTEXT The industry has at last started changing rapidly through long overdue consolidation and reshaping of alliances After the mergers with CP Ships and CSAV, Hapag-Lloyd and UASC take next step to consolidate t
Slide 4: The combination will create a top tier pure-play carrier
The combination will create a top tier pure-play carrier with one of the youngest and most fuel efficient fleets in the industry Combined Entity at a glance Combined Entity3) Ships1) [#] 175 62 237 Capacity1) [TEU m] 1.0 0.6 1.6 Volume2) [TEU m] 7.4 2.6 10.0 Revenue2) [USD bn] 9.8 2.1 12.0 EBITDA2)
Slide 5: The industry has at last started changing rapidly, through consolidation
Industry context Strategic rationale The industry has at last started changing rapidly, Deal structure through long overdue consolidation… Next steps Clear distinction of leading players versus smaller operators Carrier capacity [TEU m] 2014 2015 2016 + + + 1.0m TEU 0.6m TEU 2.3m TEU 2.9 2.8 2016 20
Slide 6: Concentration as TOP 5 in many cases will control ~70% of trades
Industry context Strategic rationale …which will create urgently needed concentration Deal structure as TOP 5 in many cases will control ~70% of trades Next steps Capacity share1) per trade and player Transatlantic Latin America Far East Transpacific ME / ISC Top 5: 82% Top 5: 78% Top 5: 70% Top 5:
Slide 7: Significant investments in new vessels have been made by various carriers
Industry context Strategic rationale Significant investments in new vessels Deal structure have been made by various carriers Next steps Hapag-Lloyd would have needed significant investment as well Announced orders >14k vessels since 2013 Ships Capacity1) Investment2) 20 384 k TEU US$3.1bn 20 342 k
Slide 8: New alliance with UASC's big ships able to compete with 2M and Ocean Alliances
Industry context Strategic rationale Hapag-Lloyd & our new alliance with UASC’s big ships Deal structure are able to compete with the 2M and Ocean Alliances Next steps Completely new alliance landscape (as of April 2017) Today Tomorrow 2M 2M 1) Ocean 3 Ocean Alliance G6 THE Alliance CKYHE 1) HMM ann
Slide 9: Freight rates have declined in recent years
Industry context Strategic rationale Freight rates have declined in recent years – Deal structure In Q2 2016 CCFI reached its lowest point Next steps China Containerized Freight Index Average since 2010: 1,024 Q2 July 15: 684 CCFI1) Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan
Slide 10: Hapag-Lloyd adjusts its outlook for 2016
Industry context Strategic rationale Hapag-Lloyd adjusts its outlook for 2016 as development Deal structure of freight rates is significantly weaker than expected Next steps Revised Outlook 2016 Ad-hoc Announcement (18 July 2016) Hapag-Lloyd adjusts its outlook for the financial Transport year 201
Slide 11: The combination has a strong strategic rationale
Industry context Strategic rationale Deal structure The combination has a strong strategic rationale Next steps Top 5 position globally and on key trades against the backdrop of Assuring top a consolidating market tier position Combination creates a scale pure-play investment opportunity Furth
Slide 12: The Combined Entity secures a sustainable 4-5 position globally
Industry context Strategic rationale The Combined Entity secures a sustainable 4-5 position Deal structure globally in the face of a consolidating market… Next steps Global container shipping companies [TEU m] Capacity 14.0% 13.1% 10.9% 7.4% 7.3% 4.6% 4.5% 3.0% 2.9% 2.9% 2.8% 2.6% 2.6% 2.4% 2.1% 1.9
Slide 13: …with a well balanced trade portfolio…
Industry context Strategic rationale Deal structure …with a well balanced trade portfolio… Next steps Transport volume by trade, 2015 (indicative) Hapag-Lloyd UASC Combined Entity 19% 21% 17% 8% 7% 32% 16% 17% 21% 30% 46% 23% 12% 4% 7% 5% 8% 1% 2% 3% Trade TEU m Trade2) TEU m Trade2) TEU m Atlantic
Slide 14: …and the right assets: one of the youngest and most efficient fleets
Industry context Strategic rationale ...and the right assets. Combined Entity to operate one of Deal structure the youngest and most efficient fleets in the industry… Next steps Vessel fleet as of 31 March 2016 Owned1) Chartered4) Current Current fleet orderbook Fleet age [% of total capacity] Capac
Slide 15: …without a need to further invest in the next years
Industry context Strategic rationale Deal structure …without a need to further invest in the next years Next steps Vessel delivery schedule 2015-2017 No further investments needed 2015 2016e 2017e VESSEL H1 H2 H1 H2 H1 In order to be competitive mid-term, 18,000 TEU Vessels Hapag-Lloyd would have
Slide 16: Synergies of at least USD 400 m expected
Industry context Strategic rationale Synergies of at least USD 400 m expected – Deal structure Mainly in network and overhead… Next steps Synergy potential, full run-rate [USD m] ~400m Comments 1 Network − Optimized new vessel deployment / network − Efficient use of new fleet 2 Overhead − Consolid
Slide 17: Hapag-Lloyd has a track record of delivering on synergies
Industry context Strategic rationale …and Hapag-Lloyd has a track record of delivering on Deal structure synergies (with CP and CSAV we did better than plan) Next steps (2005) (2014) Strong consolidation track record Canadian container shipping company with global Chilean container shipping comp
Slide 18: The Combined Entity will be a leading partner in THE Alliance
Industry context Strategic rationale The Combined Entity will be a leading partner in our Deal structure new integrated alliance with balanced capacity shares Next steps Six leading players create THE Alliance Competitive position on East-West trades1) 1) 10% 2M4) Atlantic Ocean 42% 31% 2 THE Allian
Slide 19: UASC to be contributed in-kind into Hapag-Lloyd for new shares
Industry context Strategic rationale UASC to be contributed in-kind into Hapag-Lloyd in Deal structure exchange for issuance of new shares by Hapag-Lloyd Next steps Transaction overview UASC shares contributed to Hapag-Lloyd Other Free QH1) PIF2) CSAV HGV Kühne TUI Minorities3) Float in exchange f
Slide 20: Business Combination Agreement key terms incl. 72/28 shareholdings
Industry context Strategic rationale Business Combination Agreement sets out the key Deal structure transaction terms incl. 72/28 relative shareholdings Next steps Cornerstones of the deal Hapag-Lloyd: 72% Ownership UASC: 28% Headquarters will remain in Hamburg Organization Integration will
Slide 21: Equity base and liquidity reserve clearly strengthened
Industry context Strategic rationale Equity base and liquidity reserve clearly strengthened – Deal structure Going forward main focus on deleveraging quickly Next steps Improving equity base Strong liquidity reserve Q1 2016 [USD bn] 1.4x Q1 2016 [USD m] 1.4x 7.4 7.8 1,942 1,542 400 5.4 385 385 Credi
Slide 22: Closing of the transaction expected by end of 2016
Industry context Strategic rationale Closing of the transaction expected by end of 2016 Deal structure (subject to necessary approvals) Next steps Indicative timeline Signing Hapag-Lloyd Closing1) of BCA AGM Pre-signing DD Preparation Implementation of Cash Capital of legal legal reorganization Incr
Slide 23: Financial Policy: focus on profitability and deleveraging
Industry context Strategic rationale Financial Policy: Going forward the main focus will be Deal structure on profitability and on deleveraging quickly Next steps Based on improved fleet ownership structure and synergy Profitability realization the EBITDA margin will increase significantly Investmen
Slide 24: Henrik Schilling, Senior Director Investor Relations
Henrik Schilling Senior Director Investor Relations Tel +49 40 3001-2896 Fax +49 40 3001-72896 Henrik.Schilling@hlag.com https://www.hapag-lloyd.com/en/ir.html 24