Matson, Inc. · NYSE:MATX
Matson — Investor Presentation (May 2017)
21 slides from Matson's investor presentation, May 9, 2017
Slide 1: Forward Looking Statements
Forward Looking Statements Statements made during this presentation that set forth expectations, predictions, projections or are about future events are based on facts and information that is known to us as of May 9, 2017. We believe that our expectations and assumptions are reasonable. Actual resul
Slide 2: Matson Today: Connecting the Pacific
Matson Today: Connecting the Pacific
Slide 3: Investment Highlights
Investment Highlights Leveraging the Matson brand and network into growth opportunities Well maintained fleet with leading on-time vessel arrivals and dedicated reserve vessels Fastest transit and cargo availability creates competitive advantage and premium rates for China service Dedicated Hawaii N
Slide 4: Market and Service Leader to Hawaii
Matson is the leading carrier into Oahu and Neighbor Islands, providing “just-in-time” supply lifeline 5 weekly USWC departures 11-ship fleet deployment offering most frequent and reliable service Only containership service from Pacific Northwest and only direct containership service from Oakland Ma
Slide 5: Hawaii Economic Indicators
Hawaii Economic Indicators Indicator (% Change YOY) 2014 2015 2016 2017F 2018F Real Gross Domestic Product 1.1 3.9 2.3 1.4 1.3 Visitor Arrivals 2.4 4.5 3.1 1.9 1.1 Construction Jobs 3.5 8.8 8.2 0.9 0.6 Unemployment Rate (%) 4.4 3.6 3.0 2.8 2.9 Residential Building Permits (9.8) 59.3 (13.9) 4.6 3.5 N
Slide 6: Hawaii Fleet Renewal Program
Hawaii Fleet Renewal Program Aloha Class Kanaloa Class November 2013, ordered two 3600 TEU dual fuel, LNG capable “Aloha Class” containerships from Philly Shipyard Delivery 3Q-18 and 1Q-19 Average contract price $209 million per vessel August 2016, ordered two 3500 TEU platform, dual fuel, LNG capab
Slide 7: Matson's Hawaii Fleet Renewal
Matson’s Hawaii Fleet Renewal MATSON'S HAWAII FLEET Today 2019 (Post delivery of Aloha Class) 2020 (Post delivery of Kanaloa Class) # of Diesel Powered Vessels 8 8 5 # of Dual-fuel Capable Vessels 0 2 4 # of Steamships 3 0 0 # of Vessels Deployed 11 10 9 Total Capacity (TEU) Deployed 24,600 26,200 2
Slide 8: Unique Expedited China Service (CLX)
Utilization of Jones Act ships in round trip dual head-haul revenue model Weekly 5 ship string connecting 2 ports in China to LA / Long Beach Matson’s expedited service results in competitive service advantage and premium rates Matson’s service advantage results from several factors, including indus
Slide 9: Alaska Service
Similarities with Hawaii market Remote, non-contiguous economy dependent on reliable container service as part of vital supply lifeline A market that values premium service Loyal customer base; ~80% overlap with Matson’s Hawaii customers Long-term stable revenue profile Northbound volume represents
Slide 10: SSAT Joint Venture Terminals
Matson’s 35% interest in leading U.S. West Coast terminal operator Contributed assets and terminal leases to JV in 1999 Terminals remain dedicated to Matson Services Vessel stevedoring, terminal services, container equipment maintenance, chassis pools, on-dock rail Reduced Matson’s capital investmen
Slide 11: Strategic Benefits of Dedicated Terminals
Strategic Benefits of Dedicated Terminals Guaranteed berth/cranes Work on arrival Quick turn of vessel Maintain vessel schedule Fast truck turns Customer satisfaction Considered best in class Wheeled operations Immediate cargo availability Quick yard turns Own chassis Late freight receiving Customer
Slide 12: Matson Logistics
Matson Logistics A National network of integrated services Leverages Matson brand Scalable model with high ROIC Improving results Acquired Span Alaska – the market leader in Less-than-Container Load (“LCL”) freight consolidation and forwarding services to the Alaska market Warehouse operating improv
Slide 13: Span Alaska Overview
Span Alaska Overview Market leader providing Less-than-Container Load (“LCL”) freight consolidation and forwarding services to the Alaska market Asset-light logistics business that aggregates LCL freight in Auburn, WA for consolidation and shipment to Alaska Moves freight through a network of termin
Slide 14: Span Alaska's Core Services
Span Alaska’s Core Services LCL FREIGHT 80% of goods transported to the Auburn terminal by customer-owned vehicles Handles general cargo, keep-from-freezing, freeze & chill, and hazardous material handling for LCL shipments TRUCK SERVICES Complements core LCL services Drayage services to/from the Po
Slide 15: Illustrative Fleet Renewal Benefits 2020 vs. 2017 Comparison
Upon completion of new vessel construction program: Expect annual cash operating efficiencies of approximately $40-45 million Operating two fewer vessels (9 ship deployment vs. 11 ships deployed today) Lower repair & maintenance, port costs, auto/rolling stock efficiencies, consumables, etc. Expect
Slide 16: Capital Expenditures and Vessel Dry-docking
Capital Expenditures and Vessel Dry-docking Evaluating additional investments to upgrade cranes in Honolulu to better accommodate the Aloha Class and Kanaloa Class vessels Expect substantial reduction in vessel dry-docking spending and amortization after retirement of Matson’s steamships
Slide 17: Cash Generation and Uses of Cash
Cash Generation and Uses of Cash Does not include $3.8 million in other uses of cash Net of cash acquired (2) (1)
Slide 18: 2017 Outlook (as of May 3, 2017)
2017 Outlook (as of May 3, 2017) Ocean Transportation operating income for 2017 is expected to be lower than the $141.3 million achieved in 2016 Primarily due to heightened competitive environment in Guam Logistics operating income for full year 2017 expected to be approximately $20 million Deprecia
Slide 19: 2017 Outlook (as of May 3, 2017)
2017 Outlook (as of May 3, 2017) Ocean Transportation operating income for 2017 is expected to be lower than the $141.3 million achieved in 2016 — Primarily due to heightened competitive environment in Guam Logistics operating income for full year 2017 expected to be approximately $20 million Deprec
Slide 20: Addendum – Non-GAAP Measures
Addendum – Non-GAAP Measures Matson reports financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company also considers other non-GAAP measures to evaluate performance, make day-to-day operating decisions, help investors understand our ability to incur and
Slide 21: Addendum — Non-GAAP Measures
Addendum — Non-GAAP Measures “Matson reports financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company also considers other non-GAAP measures to evaluate performance, make day-to-day operating decisions, help investors understand our ability to incur an