Slide 1: Investor Presentation – Half Year Results 2019
Investor Presentation – Half Year Results 2019 Hamburg, 7 August 2019
Slide 2: Opening Remarks
Opening Remarks Further progress on implemention of Strategy 2023 and significantly improved results 1 Our deliverables Positive freight rate development of +5%, while transport volume increased by +2% YoY in H1 2019 Slight YoY increase of unit cost driven by bunker; unit cost (ex. bunker) remained
Slide 3: Tangible steps made on Strategy 2023
1 Our deliverables Tangible steps made on Strategy 2023 Cost management Implementation of Investment in Bond program new services reefer containers redemption First savings accomplished Implementation of Investment in 13,420 Full redemption1) of 2 new services new reefer containers EUR 450 m senior
Slide 4: Cost management program well on track
1 Our deliverables Cost management program well on track Cost savings potential Full run rate [USD m] Cost savings ramp up [USD m] 350 – 4001) 350 – 4001) Savings implemented for 2019 Network Container Collaboration Terminal Procurement Total 2019 2020 2021 Steering Partnering Full savings run rate
Slide 5: Financial Highlights H1 2019
1 Our deliverables Financial Highlights H1 2019 Transport volume Transport expenses per TEU1) Freight rate +2.0% +0.8% +5.0% H1 2019: TEU 6.0 m H1 2019: 1,021 USD/TEU H1 2019: 1,071 USD/TEU EBIT Group profit EBITDA USD 440 m USD 165 m USD 1,080 m 6.2% EBIT margin 5.9% ROIC annualized 15.3% EBITDA ma
Slide 6: Despite slowing market growth…
2 Our market Despite slowing market growth… Real GDP Growth vs. Global Container Volume Growth [%] GDP multiplier 0.5x 1.1x 1.4x 1.1x 5.2% 2019e-2020e demand reflects Clarksons data 4.2% 3.8% 3.4% 3.8% 3.4% 3.6% 3.5% 3.2% 1.8% 2016 2017 2018 2019e 2020e Real GDP growth Container volume growth 6 Sour
Slide 7: …the historically low orderbook of only 10%…
2 Our market …the historically low orderbook of only 10%… Orderbook-to-fleet Newly placed orders [TEU m, %] [TEU m, %] 28% 2.0 2.2 21% 21% 1.8 4.3 18% 19% 1.2 16% 1.1 13% 0.8 3.8 12% 0.4 10% 0.2 0.2 3.6 3.4 3.3 2011 2012 2013 2014 2015 2016 2017 2018 YTD 3.2 July 2019 2.8 2.5 Idle fleet 2.4 [TTEU] S
Slide 8: …combined with an increase in scrapping, will lead to a further improved market environment
2 Our market …combined with an increase in scrapping, will lead to a further improved market environment Scheduled vessel deliveries Scrapping [TEUm] [% of world fleet] 1.7 3.3% 1.3 1.2 1.2 1.2 1.0 0.9 2.0% 1.9% H2 1.8% 2019 1.3% 1.1% H1 0.5% 2019 2015 2016 2017 2018 2019e 2020e 2021e 2015 2016 2017
Slide 9: Results are substantially higher YoY…
3 Our financials Results are substantially higher YoY… Operational KPIs Q2 2019 Q2 2018 YoY H1 2019 H1 2018 YoY Transport volume [TTEU] 3,038 2,987 +2% 5,966 5,848 +2% Freight rate [USD/TEU] 1,063 1,010 +5% 1,071 1,020 +5% Bunker [USD/mt] 434 399 +9% 429 385 +11% Exchange rate1) [USD/EUR] 1.12 1.19
Slide 10: …even correcting for IFRS 16 effects
3 Our financials …even correcting for IFRS 16 effects Overview of IFRS 16 effects on P&L accounts [USD m] H1 2019 H1 2018 ∆ Thereof IFRS 16 ∆ ex. IFRS 16 Revenue 7,047 6,577 +470 0 +470 Operating expenses (before D&A) -5,967 -6,060 +93 +245 -152 EBITDA 1,080 517 +563 +245 +318 Depreciation & Amortiz
Slide 11: Transport volume increased by 2.0% YoY to 5,966 TTEU in H1 2019
3 Our financials Transport volume increased by 2.0% YoY to 5,966 TTEU in H1 2019 mainly driven by Atlantic, Far East, Latin America and EMAO Transport volume by trade [TTEU] EMAO Latin America H1 2018 356 1,352 519 725 1,044 939 914 5,848 Intra Asia +2.0% Middle East Far East H1 2019 419 1,389 436 6
Slide 12: Average freight rate has increased by 5.0% YoY in H1 2019
3 Our financials Average freight rate has increased by 5.0% YoY in H1 2019, driven by a positive development in almost all trades Freight rate [USD/TEU] vs. Bunker price development [USD/mt] Average freight rate 1,020 +5.0% 1,071 1,079 1,079 1,063 1,055 1,029 1,010 467 446 434 425 399 372 Average bu
Slide 13: Transport expenses per unit (ex. bunker) remained almost flat YoY
3 Our financials Transport expenses per unit (ex. bunker) remained almost flat YoY Transport expenses per unit [USD/TEU] H1 2018 Slight YoY increase driven by higher (incl. D&A) 1,013 +8 / +0.8% “Bunker” costs. Decrease in “Handling and haulage” Bunker 12 as less profitable inland business was activ
Slide 14: Free cash flow generation significantly stronger than last year
3 Our financials Free cash flow generation significantly stronger than last year, notwithstanding IFRS 16 effects Cash flow H1 2019 [USD m] Operating Investing Financing cash flow cash flow cash flow 1,000 -133 -1,104 -220 Including full redemption of EUR 1,080 726 450 m senior note -92 12 due 2022
Slide 15: We have continued to deleverage the company…
3 Our financials We have continued to deleverage the company… Fixed assets [USD m] Equity base [USD m] Financial debt [USD m] Right of Use relating to newly recognized lease contracts / leased assets (IFRS 16) 39.4% Equity ratio 40.9% 7,090 Net debt 6,1311) 15,526 1,174 14,646 Liabilities from newly
Slide 16: …and have achieved our 2019 net debt / EBITDA target (excl. IFRS 16)
3 Our financials …and have achieved our 2019 net debt / EBITDA target (excl. IFRS 16) of 3.5x ahead of plan FY 2017 [USD m] FY 2018 [USD m] LTM H1 2019 [USD m] (excl. IFRS 16) Financial debt 7,596 6,891 6,318 Net debt / 5.7x EBITDA 4.6x 6,812 3.5x 6,131 5,803 1,664 1,199 1,345 H1 2019 835 H2 2018 82
Slide 17: Earnings outlook for 2019
4 Our way forward Earnings outlook for 2019 2018 FY 2018 Outlook 2019 Sensitivities for 20191) (incl. IFRS 16) Transport volume 11,874 TTEU Increasing slightly +/- 300 TTEU +/- USD ~0.2 bn Average freight rate 1,044 USD/TEU Increasing slightly +/- 50 USD/TEU +/- USD ~0.6 bn Average bunker price 421
Slide 18: HMM will join THE Alliance as a full member as of 1 April 2020
4 Our way forward HMM will join THE Alliance as a full member as of 1 April 2020, strengthening the alliance’s competitiveness especially on FE & TP THE Alliance members as from 1 April 2020 New cooperation with four members with a term until 2030 HMM‘s orderbook (12x 23,000 TEU and 8x 15,000 TEU) w
Slide 19: Major targets for 2019 and beyond
4 Our way forward Major targets for 2019 and beyond: Continue to increase profitability and further deleverage our company Prepare for IMO 2020 Continue to implement our “Strategy 2023” and create more value for our customers and shareholders as we strive to become number one for quality Further dev
Slide 20: Appendix
Appendix Appendix
Slide 21: Hapag-Lloyd with an equity ratio of 39.4% and a gearing of 98.4%
Appendix Hapag-Lloyd with an equity ratio of 39.4% and a gearing of 98.4% Balance sheet [USD m] Financial position [USD m] million USD 30.6.2019 31.12.2018 million USD 30.6.2019 31.12.2018 Assets Financial debt and lease liabilities 7,605.0 6,891.1 Non-current assets 15,585.3 14,709.1 Cash and cash
Slide 22: Hapag-Lloyd with positive EBIT of USD 439.8 m in H1 2019
Appendix Hapag-Lloyd with positive EBIT of USD 439.8 m in H1 2019 Income statement [USD m] million USD Q2 2019 Q1 2019 Q2 2018 QoQ YoY H1 2019 H1 2018 YoY Revenue 3,569.0 3,477.6 3,356.0 3% 6% 7,046.6 6,576.7 7% Transport expenses1 –2,790.5 –2,660.2 –2,849.6 5% –2% –5,450.7 –5,517.3 –1% Personnel ex
Slide 23: Overview of IFRS 16 effects on cash flow statement
Appendix Overview of IFRS 16 effects on cash flow statement [USD m] H1 2019 H1 2018 ∆ Thereof IFRS 16 ∆ ex. IFRS 16 EBIT 440 110 +330 +15 +315 Depreciation / Amortization 640 407 +233 +230 +3 EBITDA 1,080 517 +563 +245 +318 Working Capital and other effects -80 -19 -61 +12 -73 Cash flow from operati
Slide 24: Reduced financing costs as well as improved maturity structure of financial liabilities
Appendix Reduced financing costs as well as improved maturity structure of financial liabilities Financial Debt Profile as per 30 June 20191), [USD m] 2,445 Facility 30 June 2019 [USD m] Vessel Financings 3,572 Container Financings 1,158 Total Vessel & Container 4,730 1,650 1,549 EUR Bond 2024 512 3
Slide 25: Bunker price increased by 11.4% YoY to 429 USD/mt in H1 2019
3 Our financials Bunker price increased by 11.4% YoY to 429 USD/mt in H1 2019, which drove up bunker expenses per unit to 156 USD/TEU Bunker consumption & expenses per TEU Bunker consumption price [mt/TEU; USD] [USD/mt] 0.38 0.38 700 +12 / +8% 664 643 144 156 613 600 599 600 553 H1 2018 H1 2019 MDO
Slide 26: Hapag-Lloyd's shareholder structure
Hapag-Lloyd`s shareholder structure Shareholders‘ agreement/ Controlling shareholders 7.8% CSAV Germany Container Holding GmbH Klaus Michael Kühne (incl. Kühne Holding AG and Kühne Maritime GmbH) HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH 10.2% 27.5% Qatar Holding Germa
Slide 27: Share price development
Appendix Share price development Share trading since November 2015 240 Frankfurt Stock Exchange / 220 Stock Exchange Hamburg Stock Exchange 200 180 Regulated market Market segment (Prime Standard) 160 140 ISIN / WKN DE000HLAG475 / HLAG47 120 100 80 Ticker Symbol HLAG 60 40 Primary listing 6 November
Slide 28: Bond trading
Appendix Bond trading 110 105 105.8 100 95 HL EUR 6.75 % 2022 HL EUR 5.125% 2024 EUR Bond 2024 EUR Bond 2022 Listing Open market of the Luxembourg Stock Exchange (Euro MTF) Volume EUR 450 m EUR 450 m ISIN / WKN XS1645113322 XS1555576641 / A2E4V1 Maturity Date Jul 15, 2024 Feb 1, 2022 as of July 15,
Slide 29: Financial Calendar 2019
Financial Calendar 2019 25 February 2019 Preliminary Financials 2018 22 March 2019 Annual Report 2018 09 May 2019 Quarterly Financial Report Q1 2019 12 June 2019 Annual General Meeting 2019 07 August 2019 Half-year Financial Report 2019 14 November 2019 Quarterly Financial Report 9M 2019 29
Slide 30: 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 31: 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 31