Wallenius Wilhelmsen Asa · OSL:WAWI
Wallenius Wilhelmsen Asa — Q3 2023 Earnings Presentation
35 slides from Wallenius Wilhelmsen Asa's earnings presentation, 2023
Slide 1: Wallenius Wilhelmsen ASA Q3 2023
Wallenius Wilhelmsen ASA Q3 2023
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking information and statements relating to the business, financial performance and results of the Group and/or industry and markets in which it operates. Forward-looking statements are statements that are not historical facts and may be identified by
Slide 3: Highlights – Q3 2023
Highlights – Q3 2023 Wallenius Wilhelmsen delivered another strong quarter with an EBITDA of USD 478m Shipping contributed with an EBITDA of USD 392m, supported by higher net rates Logistics segment EBITDA was USD 48m, on par with previous quarter Government segment posted the largest EBITDA gain Qo
Slide 4: Financial highlights – firm cash generation and return on capital employed
Financial highlights – firm cash generation and return on capital employed LTM1 adj. EBITDA LTM Return on Capital Employed3 USDm +37% +2% % +5 pp 2 000 18% 1 841 16.8% 15% 1 500 12% 11.7% 1 000 98% LTM 9% cash conversion2 6% 500 3% 0 0% Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 21 21 22 22 23 23 21 21 22
Slide 5: Logistics and Government showing good momentum
Logistics and Government showing good momentum Logistics – Adj. EBITDA Government – Adj. EBITDA EBITDA EBITDA EBITDA margin (%) EBITDA margin (%) +61% YoY +63% YoY 47 48 46 37 37 36 35 29 30 30 28 24 22 23 21 17% 18 17% 16% 14% 14% 16 15 50% 13% 13% 11% 12% 12 11 11% 10 41% 38% 9% 7 31% 31% 27% 23%
Slide 6: Agenda
Agenda 1. Market update 2. Shipping update 3. Logistics update 4. Sustainability update 5. Financial update 6. Prospects and Q&A 6
Slide 7: Deepsea light vehicles volumes return to pre-covid levels
Deepsea light vehicles volumes return to pre-covid levels while Chinese exports are driving a favorable change in trade patterns Seaborne light vehicles sales by exporting regions Distance sailed ex Asia by global fleet Million units Million nautical miles Others Japan North America South Korea Euro
Slide 8: Chinese deep-sea exports continue to provide compelling demand side fundamentals
Chinese deep-sea exports continue to provide compelling demand side fundamentals Seaborne Chinese export of vehicles by destination region Seaborne Chinese export of vehicles by origin of brand Thousand units Thousand units* Europe South Asia 595 Non-Chinese brands (mainly Western) 595 North America
Slide 9: High & Heavy exports solid in Q3, but order activity softening
High & Heavy exports solid in Q3, but order activity softening Construction Mining Agriculture Equipment producer sales outlook2 Billion USD +1% 162 164 145 122 YoY Q3-23 +16.7% 1 +22.2%1 +6.8% 1 111 112 97 growth of exported units • Residential construction • Metal prices remain well • Food prices
Slide 10: Recent ordering activity brings a fully utilized fleet back on long term growth trend
Recent ordering activity brings a fully utilized fleet back on long term growth trend Global RoRo fleet Indicative development of fleet1) Million CEU Million CEU Fleet capacity <30 years >30 years 6 +3 % Firm newbuild Regulatory speed reduction of 1 knot +7 % Non-confirmed newbuild 0% 5% 5 +3 % 0.2
Slide 11: 13% less waiting days QoQ, but port congestion remains a global challenge
13% less waiting days QoQ, but port congestion remains a global challenge Number of vessel equivalents idling and at port stay Congestion remains a challenge for the global RoRo fleet Vessel equivalents Idling Port stay 300 +22%1 • Congestion remains a challenge reducing overall capacity 250 Number
Slide 12: Agenda
Agenda 1. Market update 2. Shipping update 3. Logistics update 4. Sustainability update 5. Financial update 6. Prospects and Q&A 12
Slide 13: Shipping update
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Slide 14: Shipping volumes decreased 3% on regular seasonality and less laden voyages
Shipping volumes decreased 3% on regular seasonality and less laden voyages Shipping services volumes and cargo mix -2.7% +9.2% Million CBM -4% % 18 16.6 38 16 14.8 16.1 15.3 15.2 15.6 16.1 15.8 15.2 16.1 36 • Lower volumes on seasonality and less laden voyages 14.2 14.5 14 12.6 34 12 11.9 32 • Decr
Slide 15: Increase in net rate per CBM, but TC earnings/day remained relatively flat
Increase in net rate per CBM, but TC earnings/day remained relatively flat on negative effect from net fuel surcharges Estimated TCE earnings/day and Net freight rate per CBM Estimated TC earnings/day Net freight rate per CBM USD ‘000 USD -1% +5% 70 60 • Net freight increased to USD 52.4 per CBM, 65
Slide 16: Our efforts to reduce fuel consumption and emissions are bearing fruit
Our efforts to reduce fuel consumption and emissions are bearing fruit Fuel consumption in ‘000 tons -1% -10% 348 • The impact is starting to be visible in the fuel consumption over the 338 345 336 329 past two quarters. Contributing factors are: 322 312 • AI-enabled speed reduction and voyage optim
Slide 17: Stable fleet count, with exercise of two purchase options during the quarter
Stable fleet count, with exercise of two purchase options during the quarter Fleet development* • Q3 market value of owned fleet ~USD 6.1bn** • Exercise of purchase options of Morning 131 131 129 128 128 Margareta and Morning Ninni during the quarter 126 126 • Difference between purchase price and a
Slide 18: Agenda
Agenda 1. Market update 2. Shipping update 3. Logistics update 4. Sustainability update 5. Financial update 6. Prospects and Q&A 18
Slide 19: Logistics update
Logistics update 19
Slide 20: Logistics revenues remain strong as Auto volumes grow
Logistics revenues remain strong as Auto volumes grow • Auto saw strong volume, accessorizing, and storage revenue • Terminals saw lower volume due to ongoing congestion and biosecurity seasonality • H&H lower overall volumes offset by strong storage revenue in the US • Inland volumes decreased in b
Slide 21: Still solid upside for North America Light Vehicle volume compared to pre-covid level
Still solid upside for North America Light Vehicle volume compared to pre-covid level North American vehicle processing throughput, WalWil figures North America BEV production and share of total NA sales Million units Thousand units BEV share of sales BEV prod +12% 5.1 4.5 36% 32% 3.7 3.7 3.8 27% 22
Slide 22: Agenda
Agenda 1. Market update 2. Shipping update 3. Logistics update 4. Sustainability update 5. Financial update 6. Prospects and Q&A 22
Slide 23: Committed to safe and sustainable operations
Committed to safe and sustainable operations No serious injuries in Q3 CO2 Continued positive trend of reduced CO2 intensity -11% Q2-23 Q3-23 35 32 1.8 30 30 30 30 1.6 CO2 grams per tonne km 30 27 26 1.4 25 LTIF Shipping Million tonnes 1.2 per million man-hours 0.00 0.67 20 1.20 1.14 1.14 1.15 1.1
Slide 24: Agenda
Agenda 1. Market update 2. Shipping update 3. Logistics update 4. Sustainability update 5. Financial update 6. Prospects and Q&A 24
Slide 25: Financial highlights Q3 2023
Financial highlights Q3 2023 (USDm, unless noted) Revenue Adj. EBITDA Q2-23 Q3-23 Financial targets * 1 356 1 302 1 311 477 478 434 ROCE > 8% Group Net profit 332 ➔ 328 +5.1 16.8% +0.3 1 079 987 976 379 402 392 Shipping Adj. EBITDA margin (%) 36.6% ➔ 36.5% Equity ratio > 35% 283 290 47 48 231 +6.8 3
Slide 26: EBITDA on par with a strong Q2, supported by a solid underlying performance in all segments
EBITDA on par with a strong Q2, supported by a solid underlying performance in all segments Shipping – Adj. EBITDA1 Logistics – Adj. EBITDA Government – Adj. EBITDA1 USDm USDm USDm -3% % % +52% % 427 +1% 450 379 402 392 60 60 60 60 60 341 47 48 50 50 50 50 46 50 300 40 40 37 37 40 40 36 40 30 28 30
Slide 27: EBITDA and revenues on par with the strong previous quarter
EBITDA and revenues on par with the strong previous quarter +9 • Revenue up USD 9m QoQ -2 -24 12 • Reduced shipping volumes offset by higher net 37 7 freight rates -23 USDm 1 311 • Lower fuel surcharges QoQ 1 302 • Higher volumes and revenues in logistics services and government services Revenue Vol
Slide 28: The reduction in fuel surcharges outpaced the drop in fuel expenses
The reduction in fuel surcharges outpaced the drop in fuel expenses, resulting in a negative change in the net fuel cost. Net fuel cost (USDm) QoQ change in net fuel cost (USDm)* Net fuel cost USDm Δ net fuel cost USDm Average fuel price (USD/ton) 128 68 123 122 118 49 104 79 +45% 14 11 5 53 48 37 -
Slide 29: Sizeable cash flow per share and continuing growth in cash flow from operations
Sizeable cash flow per share and continuing growth in cash flow from operations LTM1 operating cash flow and cash conversion2 LTM Free cash flow to equity per share3 LTM operating cash flow in million USD (lhs) Cash conversion in % (rhs) LTM free cash flow to equity per share in USD 2.58 115% 2.49 1
Slide 30: Cash on hand increased USD 232m in Q3, driven by solid operational performance
Cash on hand increased USD 232m in Q3, driven by solid operational performance Comments +232 (71) (2) 1 • USD 406m in operating cash flow (28) 17 (55) (97) 1 577 478 (21) 11 • Q3 cash conversion1 of around 85% 1 346 • Net CAPEX items include drydock, vessel maintenance and other investments • Other
Slide 31: Robust balance sheet and strong liquidity position
Robust balance sheet and strong liquidity position Balance Sheet per end Q3-23 Debt Maturity Profile Comments USD billion USD million 682 640 • Equity ratio at 45.5% Assets Equity & 138 607 Liabilities • Net debt declines to USD 2.17bn on 188 68 211 debt repayments and cash from ops 136 • Completed
Slide 32: Agenda
Agenda 1. Market update 2. Shipping update 3. Logistics update 4. Sustainability update 5. Financial update 6. Prospects and Q&A 32
Slide 33: Prospects
Prospects We see a tight market balance for the remainder of 2023 and expect H2-23 EBITDA to be at or above what we delivered in H1. Short-term market demand remains robust despite tightening financial conditions. We expect strong demand and high utilization in 2024, at or above 2023. This is confir
Slide 34: Q&A
Q&A 34
Slide 35: Thank you!
W Wallenius Wilhelmsen Thank you!