Slide 1: Investor Presentation H1 2018 Results
Investor Presentation H1 2018 Results Hamburg, 10 August 2018
Slide 2: Opening Remarks
Opening Remarks 01 Highlights Positive EBIT of USD 107 m in tough market environment UASC synergies on track Stable demand despite rising geopolitical risks 02 Sector Update Sector fundamentals remain favourable in the midterm Positive EBITDA of USD 515 m in H1 2018 (USD 397 m in H1 2017)
Slide 3: Financial Highlights H1 2018
1 Highlights Financial Highlights H1 2018: Half-year results driven by challenging market environment Transport volume Transport expenses per TEU Freight rate +38.5% -2.2% -4.2% H1 2018: TEU 5.8 m H1 2018: 934 USD/TEU H1 2018: 1,020 USD/TEU EBIT EBITDA Group loss USD 107 m USD 515 m USD 122 m 1.6% E
Slide 4: Total synergies of USD 435 m p.a. from 2019 onwards confirmed
1 Highlights Total synergies of USD 435 m p.a. from 2019 onwards confirmed – Synergy realisation going as planned Synergy potential Full run rate [USD m] Synergy ramp up USD 435 m USD 435 m Synergies implemented for 2018 Network Overhead Other Total 2017 2018 Full run rate Up to 90% of full run ra
Slide 5: Container shipping growth on a healthy and normalized level
2 Sector Update Container shipping growth on a healthy and normalized level driven by a solid global economic growth… Global Container Volume Growth & Real GDP Growth [%] 2000 = Indexed to 100 GDP multiplier 1.9x 1.0x 1.3x 5.3% 300 5.4% 4.9% 250 3.8% 3.9% 3.9% 200 Container Volume Growth 150 Real GD
Slide 6: Geopolitical risk rises mainly due to conflicts between major economic players
2 Sector Update …but geopolitical risk rises mainly due to conflicts between major economic players Volume Development of Main Trade Lanes [mTEU in 2018e; in brackets: ø growth rate1) 2018e – 2023e] From EU to US From US to China 3.1 (3.8%) 3.2 (5.5%) From US to EU From China to US 1.9 (3.6%) 10.1 (
Slide 7: Supply: Orderbook remains relatively low, very low idle fleet
2 Sector Update Supply: Orderbook remains relatively low with new orders on a reasonable level and very low idle fleet Orderbook-to-fleet Orders placed [TEU m, %] [TEU m] YTD 2018 3.2 61% 2.0 2.2 50% 1.8 6.5 1.2 1.1 6.0 0.8 38% 0.6 0.4 0.5 0.1 0.2 5.0 27% 28% 21% 21% 2007 2008 2009 2010 2011 2012 20
Slide 8: Mid-term supply/demand balance further improving
2 Sector Update Even though, short term supply pressure will most likely persist, mid-term supply/demand balance further improving Net Capacity Growth 2018e Scheduled vessel deliveries YTD 2018 [in % of worldfleet] [TEU m] 1.7 1.5 1.5 1.1% 1.4 1.3 0.5% 1.2 1.3 1.21) 1.2 1.2 1.1 0.9 7.0% 5.4% 0.8 Gro
Slide 9: Operational costs peaked in Q2, freight rates rather flat
2 Sector Update Operational costs peaked in Q2, while freight rate development is rather flat Freight rates [USD/TEU] Bunker price HSFO [USD/t] Charter rate index [USD/day] 1.000 450 70.000 900 800 400 60.000 700 350 600 50.000 +2% / -15%1) +30%1) +25%1) 500 300 400 40.000 300 CCFI Comprehensive Ind
Slide 10: Positive EBITDA of USD 515 m in the first six months of 2018
3 Financials Positive EBITDA of USD 515 m in the first six months of 2018 Operational KPIs Q2 2018 Q2 2017 YoY H1 2018 H1 2017 YoY Transport volume [TTEU] 2,987 2,287 +31% 5,848 4,221 +39% Freight rate1) [USD/TEU] 1,010 1,072 -6% 1,020 1,065 -4% Bunker [USD/mt] 399 312 +28% 385 312 +23% Exchange rat
Slide 11: Solid transport volume growth of 38.5% YoY due to UASC merger
3 Financials Solid transport volume growth of 38.5% YoY due to UASC merger – Pro-forma transport volume grew by 3.9%YoY Transport volume [TEU m] Reported Pro-forma1) +38.5% +3.9% 5,848 5,848 5,631 914 914 861 4,221 939 939 952 818 1,044 1,044 1,012 789 754 754 537 787 326 524 524 338 535 1,352 1,201
Slide 12: Pro-forma freight rates up 3.0% YoY, reported down 4.2%
3 Financials On a Pro-Forma basis rates have increased by 3.0% YoY, Reported rates were down by 4.2% YoY Freight rate [USD/TEU] vs. Bunker price development [USD/mt] Ø H1 2017 Ø H1 2018 Freight rate, 1,065 -4.2% 1,020 reported Freight rate, 990 +3.0% 1,020 pro forma Ø bunker consumption 312 +23.4% 3
Slide 13: Higher raw material expenses offset by cost-cutting and synergies
3 Financials Higher expenses for raw materials and supplies were offset by cost- cutting programmes and synergies from the UASC integration Transport expenses per TEU [USD/TEU] -21 (-2%) 955 19 16 934 -16 -25 -152) -40 (-5%) H1 2017 Expenses for raw Port, canal and Chartering, leases Container Maint
Slide 14: Good free cash flow of USD 443 m in H1 2018
3 Financials Good free cash flow of USD 443 m in H1 2018 driven by a solid operating result (EBITDA) and limited investment needs Cash flow H1 2018 [USD m] Operating Investing Financing cash flow cash flow cash flow 498 -55 -525 1,270 198 -17 1,163 -125 40 31 -577 545 515 520 -183 40 12 -15 Free cas
Slide 15: Stable equity base of USD 7.2 bn, solid liquidity reserve of USD 1.2 bn
3 Financials Stable equity base of USD 7.2 bn, solid liquidity reserve of USD 1.2 bn and further reduced financial debt in H1 2018 Equity base [USDm] Net debt [USDm] Financial Debt 7,182 7,596 7,155 7,263 Cash 643 725 1) 6,492 6,812 1) Net Debt 30 June 2018 31 December 2017 30 June 2018 31 December
Slide 16: Revised Outlook for 2018
4 Way Forward Revised Outlook for 2018 2018 Outlook for Revised FY 2017 Sensitivities for 2018 2018 Outlook 2018 Increasing Increasing +/- USD <0.1 Transport volume 9,803 TTEU +/- 100 TTEU clearly clearly bn 1,051 On previous On previous +/- 40 +/- USD ~0.5 Average freight rate USD/TEU year‘s level
Slide 17: Major targets for H2 and beyond
4 Way Forward Major targets for H2 and beyond: Continue to deliver on synergies and deleverage the company over time Develop and offer more digitalized solutions to the customer Successful overcome regulatory changes, such as the IMO regulations Finalization of our new strategy, after 3 years of suc
Slide 18: Appendix
A Appendix 18
Slide 19: Hapag-Lloyd with equity ratio of 41%
A Appendix Hapag-Lloyd with equity ratio of 41% Balance sheet [USD m] Financial position [USD m] 30.06.2018 31.12.2017 30.06.2018 31.12.2017 Assets Cash and cash equivalents 643.0 725.2 Non-current assets 14,818.4 15,146.1 Financial debt 7,182.2 7,595.5 of which fixed assets 14,756.4 15,071.1 Restri
Slide 20: Hapag-Lloyd with positive EBITDA of USD 514.9 m
A Appendix Hapag-Lloyd with positive EBITDA of USD 514.9 m Income statement [USD m] Transport expenses [USD m] H1 2018 H1 2017 % change H1 2018 H1 2017 % change Expenses for raw materials & supplies 918.0 583.3 57% Revenue 6,568.7 4,899.7 34% Cost of purchased services 4,545.3 3,448.3 32% Other oper
Slide 21: H1 2018 one-off costs of USD 4 m related to the merger
3 Financials H1 2018 generated one-off costs of USD 4 m related to the merger Transaction & integration related one-off costs [USD m] 4 ~110 4 86 17 2016 2017 H1 2018 H2 2018 Total Note: Rounding differences may occur 21
Slide 22: Optimized bunker consumption, but bunker price increase harms P&L
A Appendix Hapag-Lloyd benefits from optimized bunker consumption, but substantial increase in bunker price harms P&L Bunker consumption price [USD/mt] Bunker consumption & expenses 650 0.41 Bunker 600 consumption per TEU 0.37 550 [mt/TEU] 500 157 138 450 400 350 Bunker expenses 300 per TEU [USD] 25
Slide 23: Solid long-term and diversified financing portfolio
A Appendix Solid long-term and diversified financing portfolio Financial debt profile [USD m] 2,535 1,520 1,707 1,147 930 845 448 716 429 524 724 602 614 524 16 374 44 20 16 288 38 18 77 77 87 49 17 Q3-Q4 2019 2020 2021 2022 ≥ 2023 2018 Liabilities to banks Bonds Liabilities from finance lease contr
Slide 24: Financial Calendar 2018
Financial Calendar 2018 February 28th, 2018 Preliminary Financials 2017 March 28th, 2018 Annual Report 2017 May 14th, 2018 Quarterly Financial Report Q1 2018 July 10th, 2018 Annual General Meeting 2018 August 10th, 2018 Halfyear Financial Report 2018 November 8th, 2018 Quarterly Financial Report 9M
Slide 25: 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 26: Hapag-Lloyd Investor Relations
Hapag-Lloyd Investor Relations Ballindamm 25 20095 Hamburg Tel: +49(40) 3001-2896 ir@hlag.com https://www.hapag-lloyd.com/en/ir.html 26