Matson, Inc. · NYSE:MATX
Matson — Q4 2020 Earnings Presentation
22 slides from Matson's earnings presentation, Feb 23, 2021
Slide 1: Fourth Quarter 2020 Earnings Conference Call
1 Fourth Quarter 2020 Earnings Conference Call Fourth Quarter 2020 Earnings Conference Call February 23, 2021
Slide 2: Forward-Looking Statements
2 Fourth Quarter 2020 Earnings Conference Call Forward-Looking Statements Statements made during this presentation that set forth expectations, predictions, projections or are about future events are based on facts and situations that are known to us as of February 23, 2021. We believe that our expe
Slide 3: Opening Remarks
3 Fourth Quarter 2020 Earnings Conference Call Opening Remarks • Recap of Matson’s 4Q20 results: – Capped off a strong year with continued solid performance in Ocean Transportation and Logistics – Ocean Transportation: • China strength – CLX+ voyages and increased capacity in the CLX service • In ot
Slide 4: 2021 Priorities
4 Fourth Quarter 2020 Earnings Conference Call 2021 Priorities • Continue to safeguard the health and safety of our employees • Maximize the opportunity in our China service – Maintain CLX and CLX+ as the fastest services in the Transpacific – Continue to invest in new equipment to support growth •
Slide 5: Completed Hawaii Fleet Renewal in 4Q 2020
5 Fourth Quarter 2020 Earnings Conference Call Completed Hawaii Fleet Renewal in 4Q 2020 Lurline (Delivered 4Q 2019) Matsonia (Delivered 4Q 2020) Kaimana Hila (Delivered 1Q 2019) Daniel K. Inouye (Delivered 4Q 2018)
Slide 6: Hawaii Service Fourth Quarter 2020 Performance
6 Fourth Quarter 2020 Earnings Conference Call Hawaii Service Fourth Quarter 2020 Performance • Container volume increased 0.8% YoY – An additional westbound sailing – Higher demand for sustenance and home improvement goods – Continued negative impact from low tourism activity • Pre-travel testing p
Slide 7: Hawaii Service – Current Business Trends
7 Fourth Quarter 2020 Earnings Conference Call Hawaii Service – Current Business Trends • Hawaii economy remains in significant downturn – Tourism activity remains well below 2019 levels • Economic recovery trajectory remains highly uncertain as tourism-related businesses in difficult environment –
Slide 8: China Service Fourth Quarter 2020 Performance
8 Fourth Quarter 2020 Earnings Conference Call China Service Fourth Quarter 2020 Performance Container Volume (FEU Basis) 8,000 13,000 18,000 23,000 28,000 33,000 38,000 43,000 Q1 Q2 Q3 Q4 2019 2020 Note: 2Q 2020 volume figure includes volume related to seven CLX+ voyages. 3Q and 4Q 2020 volume figu
Slide 9: China Service – Current Business Trends
9 Fourth Quarter 2020 Earnings Conference Call China Service – Current Business Trends • January 2021 eastbound container volume increased 130.4% YoY – Supply and demand factors continued to remain favorable – Continued trend of inventory restocking and elevated consumption of goods • Very strong pr
Slide 10: Guam Service Fourth Quarter 2020 Performance
10 Fourth Quarter 2020 Earnings Conference Call Guam Service Fourth Quarter 2020 Performance Container Volume (FEU Basis) 3,000 3,500 4,000 4,500 5,000 5,500 Q1 Q2 Q3 Q4 2019 2020 4.2% • Container volume increased 4.2% YoY – Higher demand for sustenance and home improvement goods – Lower tourism act
Slide 11: Alaska Service Fourth Quarter 2020 Performance
11 Fourth Quarter 2020 Earnings Conference Call Alaska Service Fourth Quarter 2020 Performance • Container volume increased 18.9% YoY – Higher northbound volume: • Two additional sailings • Higher demand for sustenance and home improvement goods – Modestly higher southbound volume Container Volume (
Slide 12: Alaska Service – Current Business Trends
12 Fourth Quarter 2020 Earnings Conference Call Alaska Service – Current Business Trends • Alaska economic recovery trajectory remains highly uncertain – Jobs market remains challenging in pandemic environment • Low oil price environment expected to continue to negatively impact oil exploration and
Slide 13: SSAT Joint Venture Fourth Quarter 2020 Performance
13 Fourth Quarter 2020 Earnings Conference Call SSAT Joint Venture Fourth Quarter 2020 Performance Equity in Income of Joint Venture Note: 2Q 2019 equity in income negatively impacted by the timing of lease accounting. $ 0.0 $ 2.0 $ 4.0 $ 6.0 $ 8.0 $ 10.0 $ 12.0 Q1 Q2 Q3 Q4 $ in millions 2019 2020 C
Slide 14: Matson Logistics Fourth Quarter 2020 Performance
14 Fourth Quarter 2020 Earnings Conference Call Matson Logistics Fourth Quarter 2020 Performance Operating Income $ 0.0 $ 2.0 $ 4.0 $ 6.0 $ 8.0 $ 10.0 $ 12.0 $ 14.0 Q1 Q2 Q3 Q4 $ in millions 2019 2020 • Operating income of $9.6 million; YoY increase of $2.0 million – Due primarily to higher contribu
Slide 15: Financial Results – Summary Income Statement
15 Fourth Quarter 2020 Earnings Conference Call Financial Results – Summary Income Statement See the Addendum for a reconciliation of GAAP to non-GAAP Financial Metrics. (1) Includes a non-cash tax benefit of $2.9 million resulting from discrete adjustments in applying the provisions of the Tax Cuts
Slide 16: Cash Generation and Uses of Cash
16 Fourth Quarter 2020 Earnings Conference Call Cash Generation and Uses of Cash ($ 50.0) $ 50.0 $ 150.0 $ 250.0 $ 350.0 $ 450.0 $ 550.0 Cash Flow from Operations Proceeds from Sale-Leasebacks Paydown of Borrowings, net Maint. Capex New Vessel Capex (1) Dividends Other Cash Flows (2) Net Decrease in
Slide 17: Financial Results – Summary Balance Sheet
17 Fourth Quarter 2020 Earnings Conference Call Financial Results – Summary Balance Sheet • Total Debt of $760.1 million(1) – $63.5 million of debt reduction in 4Q20 – Revolver balance of $71.8 million • Net Debt of $745.7 million(2) • Leverage ratio per amended debt agreements of approximately 1.7x
Slide 18: New Vessel Payments
18 Fourth Quarter 2020 Earnings Conference Call New Vessel Payments Actual Vessel Progress Payments(1) FY 2020 ($ in millions) 1Q 2Q 3Q 4Q FY Cash Capital Expenditures $ 7.2 $ 5.7 $ 39.3 $ 28.2 $ 80.4 Capitalized Interest 1.9 1.7 2.0 1.8 7.4 Capitalized Vessel Construction Expenditures $ 9.1 $ 7.4 $
Slide 19: Capital Expenditures Update
19 Fourth Quarter 2020 Earnings Conference Call Capital Expenditures Update • Overview of 2021 capital expenditures – Maintenance capex of $60-70 million • Includes most recent unit cost pricing on annual equipment replenishment – Scrubber installation payments of approximately $20 million • Include
Slide 20: Capital Allocation
20 Fourth Quarter 2020 Earnings Conference Call Capital Allocation • No change in capital allocation strategy • Uses of cash after funding our ordinary dividend and maintenance capex (in no particular order): – Organic growth – Reduce debt – Acquire businesses – Return capital to shareholders • In 2
Slide 21: Appendix
21 Fourth Quarter 2020 Earnings Conference Call Appendix
Slide 22: Appendix – Non-GAAP Measures
22 Fourth Quarter 2020 Earnings Conference Call Appendix – 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, he