Dampskibsselskabet Norden A/s · OMXCOP:DNORD
Dampskibsselskabet Norden A/s — FY2011 Earnings Presentation
33 slides from Dampskibsselskabet Norden A/s's earnings presentation, Mar 7, 2012
Slide 1: NORDEN Results: Full year results of 2011
NORDEN RESULTS Full year results of 2011 Hellerup, p, Denmark 7 March 2012 NORDEN Full year result of 2011 | 1 Our business is global tramp shipping
Slide 2: Agenda
AGENDA f Group highlights f Strategy f Financial highlights f Market expectations f Dry Cargo f Tanker f 2012 expectations f Q&A NORDEN Full year result of 2011 | 2 Our business is global tramp shipping
Slide 3: Full Year Highlights
FULL YEAR HIGHLIGHTS EBITDA (USDm) Key messages 62 f Results higher than November 48 guidance 39 40 36 f Q4 best quarter since Q3 2008 22 f Total 2011 EBITDA was USD 186m Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Cash and securities (USDm) f Added 9 new vessels to core fleet orderbook 763 f St
Slide 4: Executing on Strategy
EXECUTING ON STRATEGY Long term growth in challenging times Dry Cargo Tankers Joint Overall targets Growth in cargoes Tight cost control Growth in owned Higher shareholder carried of 15% on shore and at fleet to 25+ units return than peers p.a. sea Growth in contractually Daily earnings above market
Slide 5: Outperformance in 2011
OUTPERFORMANCE IN 2011 f TRS: Outperforming group of peers by 27% pts. f Beat the spot benchmarks by 24% in PMX and 40% in MR f Increased Dry Cargo market share: 40% volume growth vs. 6% market growth NORDEN 120 Peer group avg. avg 100 80 60 40 20 0 jan-2011 apr-2011 jul-2011 okt-2011 NORDEN PMX vs.
Slide 6: 2011 Financials
2011 FINANCIALS Comments USDm 2010 2011 Q4 2011 Y/Y % f Q4 by far the best CM II Group 289 239 74 -17% quarter in 2011 O/A Group -49 -53 -12 7% f Dry Cargo performance EBITDA 240 186 62 -22% Group better than expected p EBITDA 249 171 60 -31% f Tankers in line with Dry Cargo expectations EBITDA 0 26
Slide 7: Fleet Values
FLEET VALUES f Theoretical NAV of USD 1.9 bn. - DKK 258 per share f Net exposure to forward tanker market increased to ~ 40% of NAV f No need for impairment Value development (DKK per share) Total theoretical NAV (USDm) 183 1 851 1.851 313 308 40% of fleet 235 value 622 -195 275 74 249 258 1.249 246
Slide 8: Newbuilding Prices at Historical Lows
NEWBUILDING PRICES AT HISTORICAL LOWS f Yards are close to marginal cost - limited downside in newbuilding prices f Yard sector consolidation expected f Lower nominal prices in 1999 due to lower steel prices + lower currencies vs. USD Panamax and d MR newbuilding b ld price excl. l steell cost – loc
Slide 9: Dry Cargo Fleet Development
DRY CARGO FLEET DEVELOPMENT f Current orderbook approx. 30% of total dry cargo fleet f More than 2/3 of the orderbook has an expected p delivery y date in 2012 f Net fleet growth expected to be 11% in 2012 and decline significantly in coming years Dry Cargo supply Mill. dwt. 30 18% 16% 25 14% 20 12%
Slide 10: Iron Ore Expansion Plans
IRON ORE EXPANSION PLANS f Big 5 miners expected to grow capacity by 11% annually f The majority from Brazil (131 mtpa) and Australia (263 mtpa) f Driven by record high China iron ore imports (687m tons in 2011) f Additional expansions in Africa Other and Australia Other could increase growth to 18%
Slide 11: Coal Imports & Exports
COAL IMPORTS & EXPORTS f Record-high coal imports to Coal Imports China in 2011 (+10%) Mill. tons 200 f India coal imports grew less 150 than expected (+12%) 100 f US coal export increased by 50 23% in 2011, more than 0 offsetting the fall in Australian 2007 2008 Japan Japa 2009 China C a 2010 India
Slide 12: Dry Overview
DRY OVERVIEW f Market outlook f 2012 overall lower than last year f Current weakness could reverse with seasonality later in the year f Continued strong demand in emerging markets f Improving I i raw material t i l availability il bilit iin medium di tterm f Supply growth trails off in coming years
Slide 13: Product Tanker Rates Gradually Improving
PRODUCT TANKER RATES GRADUALLY IMPROVING f Increasing 19% and Three years of MR rates 10% Y/Y in 2010 and 2011 22.000 f 2011 avg. market T/C USD 14,947 /day of USD 10,600 10 600 per day USD 15,600 / day 17.000 f NORDEN avg. T/C of USD 14,900 14 900 per day – ay USD/da and expected for 2012 an avg. r
Slide 14: Declining Clean Tanker Fleet Growth
DECLINING CLEAN TANKER FLEET GROWTH f Total Handysize and MR tanker fleet growth of 4% in 2011 and forecasted 2.5 % p.a. for 2012-2014 f 2012-2014: Handysize fleet expected to decrease by 3% f In the same period MR tanker fleet expected to grow by 13% to 52m DWT Handysize and MR Tanker (kDWT) Clean
Slide 15: Refinery Outsourcing = More Vessel Demand
REFINERY OUTSOURCING = MORE VESSEL DEMAND f Refinery outsourcing leads to a growing share of global oil consumption being transported by sea f Net refinery capacity expected to increase 9.2 mb/d from 2012-2016 f Asia and Middle East contribute positively to tonne-mile increases Seaborne oil out of t
Slide 16: Tanker Overview
TANKER OVERVIEW f Market outlook f Refinery restructuring positive impact on ton-miles f Increasing share of seaborne products in global oil consumption f Manageable orderbook f NORDEN f Almost fully exposed to rising market f Continued look at ECO investments NORDEN Full year result of 2011 | 16 Ou
Slide 17: 2012 Expectations
2012 EXPECTATIONS Outlook Key assumptions USDm Dry Cargo Tanker Total f Guidance based on current EBITDA 85-125 25-45 110-150 capacity and coverage Profit from - vessel sales f Only known and confirmed vessell sales l are iincluded l d d iin EBIT 10-50 guidance CAPEX 140-160 f Open capacity in Tanke
Slide 18: Forward Looking Statements
This presentation contains certain forward-looking statements reflecting the management’s present judgment of future events and financial results. Statements relating to 2012 and subsequent years are subject to uncertainty, and NORDEN’s actual results may therefore differ from the projections. Facto
Slide 19: Thank You for Your Attention
THANK YOU OU FOR O YOUR OU ATTENTION O Dampskibsselskabet NORDEN A/S 52, Strandvejen DK-2900 Hellerup Denmark Phone: +45 3315 0451 www ds norden com www.ds-norden.com NORDEN Full year result of 2011 | 19 Our business is global tramp shipping
Slide 20: Back Up
BACK UP FORWARD LOOKING STATEMENTS NORDEN Full year result of 2011 | 20 Our business is global tramp shipping
Slide 21: A Leading Global Tramp Operator
A LEADING GLOBAL TRAMP OPERATOR Dry cargo Capesize Post-Panamax Panamax Handymax Handysize Total active fleet 195 43 Dry Cargo Tanker Tanker MR Handysize f One of the most modern fleets in our industry f Global network of offices and port captains f Pools in Dry Cargo (Handysize, Post Panamax) and T
Slide 22: Dry Cargo Outperforming Market
DRY CARGO OUTPERFORMING MARKET f NORDEN Dry Cargo increased market share in 2011 f 40% volume growth vs. 6% market growth f 2012 performance f will ill depend d d on availability il bilit off market k t opportunities t iti Transported volumes, Dry Cargo Mill. tons 70 60 50 40 30 20 10 0 1 3 5 7 9 11
Slide 23: Tanker - Long Term Out Performance
TANKER - LONG TERM OUT PERFORMANCE f NORDEN Tankers/Norient Product Pool consistently beating 1-year T/C market f 2012+ Norient N i t continues ti tto ffocus on key k competitive titi parameters: t f Quality, safety and efficiency MR rates (USD per day) 35.000 Average premium: 30 000 30.000 17%/year
Slide 24: Asset Light Business Model
ASSET LIGHT BUSINESS MODEL f Active fleet can quickly be adjusted to demand and market conditions f Fleet employment based on portfolio view f Significant asset upside through purchase options Flexible fleet Coverage and customer focus Capacity Employment f Sale and purchase f Customer relations Con
Slide 25: Last 5 Years Performance
LAST 5 YEARS PERFORMANCE Earnings per share (USD) Return on equity 16,4 16,7 69,5% 47,0% 5,9 52 5,2 12,4% 12,9% 2,1 4,4% 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Cash flows, operations and investments (USDm) Dividend yield 7 1% 7,1% 6,2% 467 541 298 160 120 -5 -57 -80 4,0% -380 380 -355 355
Slide 26: Financial Strength = Future Growth
FINANCIAL STRENGTH = FUTURE GROWTH Strong capital structure Net committed cash f Strong focus on cash flow USDm 2011 2010 generation Adjusted Net Interest Bearing 240 542 Assets* f Cash in low-risk deposit T/C obligations** -1,748 -1,925 accounts and securities New building installments less proceed
Slide 27: Dry Cargo Fleet Overview
DRY CARGO FLEET OVERVIEW Capesize Post-Panamax Panamax Handymax Handysize 2011 Vessel type Size ((dwt.)) >120,000 , 85-120,000 , 65-85,000 , 40-65,000 , 20-40,000 , Length (meter) 289 245 225 190 170 Iron ore, coal, Cement, steel, Iron ore, coal, grain, bauxite, Main cargoes Iron ore, coal Iron ore,
Slide 28: Tanker Fleet Overview
TANKER FLEET OVERVIEW Vessel type LR1 MR Handysize 2011 Size (dwt.) 60-85,000 42-60,000 27-42,000 g ((meter)) Length 230 180 170 Fuel and heating Fuel and Fuel and heating oil, gasoline, heating oil, Main cargoes oil, gasoline, veg. diesel, jet fuel, gasoline, veg. oil, diesel naphtha oil, diesel Ve
Slide 29: Fleet Values and NAV
FLEET VALUES AND NAV Calculated value of charter parties with purchase and extension USD million Owned (active and newbuildings) option Carrying Purchase and Value of charter amount/ Market Charter extension party and purchase Dry Cargo Number cost value* Added value Number party option option p Cap
Slide 30: Coverage and Capacity – Dry Cargo
COVERAGE AND CAPACITY – DRY CARGO Capacity and coverage, Dry Cargo, at 31 December 2011 2012 2013 2014 2015+ 2012 2013 2014 2015+ Gross capacity Ship days Costs for gross capacity (USD per day) Capesize 1.464 1.460 1.460 10.548 8.974 8.974 8.974 6.878 Post-Panamax 2.787 2.920 2.920 31.897 11.461 11.
Slide 31: Coverage and Capacity – Tanker
COVERAGE AND CAPACITY – TANKER Capacity and coverage, Tankers, at 31 December 2011 2012 2013 2014 2015+ 2012 2013 2014 2015+ Gross capacity Ship days Costs for gross capacity (USD per day) LR 1 592 0 0 0 11.900 0 0 0 MR 7.135 7.540 7.046 64.249 12.669 11.620 11.148 7.780 Handysize 5.428 4.015 4.015
Slide 32: Capacity and Coverage
CAPACITY AND COVERAGE Comments Dry Cargo f Dry Cargo’s high coverage 40.000 35.000 11.600 11.400 offers ff a sound protection in 30.000 11.200 11.000 weak market conditions 25.000 USD/day 10.800 Days 20.000 10.600 15.000 10.400 f Tankers maintain high market 10.000 10 200 10.200 10.000 exposure as c
Slide 33: The Share (DNORD)
THE SHARE (DNORD) Master data Composition of shareholders f 17,492 registered shareholders Shareholder capital DKK 43 43,000,000 000 000 owning 89.2% Number of shares and 43,000,000 shares of f Approx. 35% international denomination DKK 1 ownership Classes of shares 1 Voting and ownership restrictio
Dampskibsselskabet NORDEN — FY2011 Earnings Presentation on 6ix