Slide 1: Presentation of FY 2018 and Q4 Results
PRESENTATION OF FY 2018 AND Q4 RESULTS VILHELM THORSTEINSSON CEO 1 March 2019
Slide 2: Key Highlights for the Year 2018
KEY HIGHLIGHTS FOR THE YEAR 2018 RESULTS REASONS ACTIONS Reefer liner services in Norway A reduction of two vessels in substantially under performing Norway and continued focus on improving operations Lower margin in forwarding services in Europe Volume & revenues in both liner Reduction of FTE’s an
Slide 3: Operating Activities
OPERATING ACTIVITIES
Slide 4: Liner Services Volume in 2018
LINER SERVICES VOLUME IN 2018 Container Liner volume up 7.0% but Reefer Liner services down 13.6% VOLUME DEVELOPMENT GEOGRAPHICAL SPLIT 10% 145 9% 140 8% 6% 5% 7% 135 11% 15% 6% 130 12% 5% 2018 12% 2017 125 4% 71% 68% 3% 120 2% 115 1% 7,9% 4,2% 5,9% 3,6% 4,2% Iceland Faroe Islands Norway Trans-Atlan
Slide 5: Forwarding Services Volume in 2018
FORWARDING SERVICES VOLUME IN 2018 Growth driven by dry cargo up 23.7% | Reefer forwarding volume down 1.9% VOLUME DEVELOPMENT REEFER VS DRY 45% 250 40% 35% 200 30% 24% 29% 25% 150 20% 2018 2017 15% 100 71% 10% 76% 5% 50 15,6% 5,1% 4,8% 41,2% 4,3% 0% Reefer Dry Reefer Dry -5% 0 2014 2015 2016 2017 2
Slide 6: Volume in Q4 2018
VOLUME IN Q4 2018 Strong volume growth in Container Liner up 10% | Dry Forwarding volume down 17% due to discontinued low margin service LINER SERVICES FORWARDING SERVICES 12% 160 50% 250 140 10% 40% 200 120 8% 30% 100 150 6% 80 20% 60 100 4% 10% 40 7,3% 8,8% 9,3% 44,0% 50 2% 0% 20 -5,9% 6,5% 10,2%
Slide 7: Financial Results
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Slide 8: Income Statement 2018
INCOME STATEMENT 2018 Continued revenue and volume growth year-on-year but disappointing operating result and profitability Revenue Expenses EBITDA EUR 689.2 m EUR 639.9 m EUR 49.2 m up 3.8% up 5.5% down 13.1% Depreciation and Net finance expense Net earnings amortization EUR 4.9 m EUR 7.4 m EUR 32.
Slide 9: Segment Performance
SEGMENT PERFORMANCE Liner affected by Norway reefer liner & cost of capacity increase in TA | Forwarding affected by challenging market conditions LINER Revenue Expenses EBITDA EUR 449.2 m EUR 399.1 m 35.0 m up EUR 10.8 m up 13.6 m down 4.5 m FORWARDING Revenue Expenses EBITDA EUR 239.9 m EUR 240.8
Slide 10: Geographical Split of Revenue
GEOGRAPHICAL SPLIT OF REVENUE Minor changes in geographical split of revenue | Norway and Europe decreasing 5% 4% 7% 7% 25% 48% 24% 48% 2018 2017 7% 9% 8% 8% Iceland Faroe Islands Iceland Faroe Islands Norway Europe Norway Europe Asia Other Asia Other 10
Slide 11: EBITDA Bridge
EBITDA BRIDGE Container liner system rebounded in Q4 EUR million 12M EUR million Q4 70 14 65 60 12 (1.2) 55 (1.4) 10 (3.5) (4.2) 1.6 (0.9) 50 (3.4) (0.7) 1.1 2.3 8 45 40 6 11.9 57.2 35 49.2 9.4 4 30 25 2 20 0 11
Slide 12: Capex 2014 - 2019
CAPEX 2014 - 2019 Considerable investments forecasted in 2019 │ Driven by long term investments in vessels and port facilities 80 70 Infrastructure and vessel investment amounting to 60 EUR 57.5m 50 Majority in the new vessels, Sundahöfn Terminal and a new gantry crane 40 Disposal of current D
Slide 13: Cash Flow Bridge
CASH FLOW BRIDGE Investments have led to increase in borrowings 60 50 (19,0) 40 29,0 30 (11,0) 20 1,0 (32,9) 31,6 10 23,2 21,9 0 13
Slide 14: Financial Ratios 2014 - 2018
FINANCIAL RATIOS 2014 - 2018 Increased leverage but strong financial position | Equity ratio 49.1% at year-end NET DEBT / EBITDA NET DEBT AND EQUITY RATIO EUR million 2.2 120 100% Net debt 2.0 110 90% Equity ratio 1.8 100 80% 1.6 90 70% 1.4 80 70 60% 1.2 60 50% 1.0 50 40% 0.8 40 0.6 30% 30 0.4 20% 2
Slide 15: Dividend Proposal
DIVIDEND PROPOSAL Proposed total payment of EUR 4.8 million DIVIDEND POLICY DIVIDEND PROPOSAL 2019 The policy of Eimskipafélag Íslands hf. is ISK 3.50 per share to pay annual dividend that equals an amount in the range of 10-65% of net profit after taxes. ISK 653.2 million total dividend payment Dec
Slide 16: Guidance and the Way Forward
GUIDANCE AND THE WAY FORWARD
Slide 17: This is Eimskip
THIS IS EIMSKIP Customer Requirements Inventory Distribution Management/ Domestic Distribution LINER CUSTOMERS Transport FORWARDING Inventory and Documentation Material Management Niche operator in the North Global reach in forwarding Atlantic market through own offices and partnerships Airport Hand
Slide 18: New Organizational Structure
NEW ORGANIZATIONAL STRUCTURE More holistic view and accountability of individual business divisions & Operations Affected by CEO structural Vilhelm Már Þorsteinsson changes in January Business Process General councel and Management & IT compliance officer Hilmar Karlsson Davíð Ingi Jónsson Finance I
Slide 19: Strategic Long Term Investments
STRATEGIC LONG TERM INVESTMENTS Long term financing secured Two new container vessels Sundahöfn Terminal and New Liebherr gantry crane Newbuilding of two 2.150 teus The Red Line planned to be extended All necessary construction work at Replacing 36 year old Jakinn which container vessels in
Slide 20: Estimated Effect of IFRS16
ESTIMATED EFFECT OF IFRS16 Eimskip will implement IFRS16 financial reporting standard on operational lease agreements at the start of 2019 10% Asset and liability increase: EUR 35 - 40 million 40% EBITDA effect EUR 18 million 31% Equity ratio decrease 49.1% -> 45.1% 19% Leverage ratio decrease 2.80
Slide 21: EBITDA Guidance for 2019
EBITDA GUIDANCE FOR 2019 EBITDA in the range of EUR 49 - 57 million* 2019 Guidance General operating activities Million EUR 2017 2018 Lower Upper Increased focus on operating cost and improving current business platform 57-63 Revenue & cost synergies between different Eimskip’s offices and sub
Slide 22: Questions
QUESTIONS
Slide 23: Disclaimer
DISCLAIMER Information contained in this presentation is based on sources that Eimskipafélag Íslands hf. (“Eimskip“ or the ”Company“) considers reliable at each time. Its accuracy or completeness can however not be guaranteed. Copyright of information contained in this presentation is owned by Eimsk
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