Slide 1: Analyst's & Investor's Conference Call 9M 2019 Result Presentation
Analyst’s & Investor’s Conference Call 9M 2019 Result Presentation Hamburg, 14 November 2019
Slide 2: Opening Remarks
Opening Remarks Strategy 2023 well on track 1 Highlights Freight rate increased by +4.2% while transport volume increased by +1.2% YoY (excl. Intra Asia: +2.7%) Stable unit cost compared to prior year despite slightly higher bunker prices Despite weakening GDP expectations, trend of container volume
Slide 3: Financial Highlights 9M 2019
1 Highlights Financial Highlights 9M 2019 Transport volume Transport expenses per TEU1) Freight rate +1.2% +0.2% +4.2% 9M 2019: TEU 9.0 m 9M 2019: 1,017 USD/TEU 9M 2019: 1,075 USD/TEU EBIT Group profit EBITDA USD 722 m USD 333 m USD 1,697 m 6.8% EBIT margin 6.5% ROIC annualized 15.9% EBITDA margin E
Slide 4: Tangible steps made on Strategy 2023
1 Highlights Tangible steps made on Strategy 2023 GLOBAL PLAYER BE PROFITABLE # 1 FOR QUALITY We have reinforced our market share We are on-track to deliver on We have made further progress and expanded in niche markets profitability and deleveraging targets in achieving our quality targets Global
Slide 5: Cost management program continues to be well on track
1 Highlights Cost management program continues to be 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
Slide 6: Despite slowing market growth…
2 Market update Despite slowing market growth… Real GDP Growth vs. Global Container Volume Growth [%] GDP multiplier 1.4x 1.5x 1.2x 0.8x – 0.9x 5.8% 4.6% 4.3% 3.4% 3.4% 3.8% 3.6% 3.0% 3.2% 2.2% 2016 2017 2018 2019e 2020e Real GDP growth Container volume growth 6 Source: IMF WEO (October 2019), Clark
Slide 7: …the historically low orderbook of only 11%…
2 Market update …the historically low orderbook of only 11%… Orderbook-to-fleet Newly placed orders [TEU m, %] [TEU m, %] Vessels ordered after 30 September 2019 61% Orderbook 2.0 2.2 6.5 50% Vessels > 13,999 TEU 1.8 Share of world fleet 1.2 6.0 1.1 38% 0.8 0.4 0.4 0.2 5.0 27% 28% 21% 21% 2011 2012
Slide 8: …combined with an expected increase in scrapping,
2 Market update …combined with an expected increase in scrapping, further indicates a healthier outlook for the industry Scheduled vessel deliveries Scrapping [TEUm] [% of world fleet] 1.7 3.3% 1.3 1.2 1.2 1.1 1.0 0.9 2.0% 1.5% 1.7% 1.1% 0.9% 0.6% 2015 2016 2017 2018 2019e 2020e 2021e 2015 2016 2017
Slide 9: Results are substantially higher YoY…
3 Financials Results are substantially higher YoY… Operational KPIs Q3 2019 Q3 2018 YoY 9M 2019 9M 2018 YoY Transport volume [TTEU] 3,045 3,052 0% 9,011 8,900 +1% Freight rate [USD/TEU] 1,084 1,055 +3% 1,075 1,032 +4% Bunker [USD/mt] 416 446 -7% 425 406 +5% Exchange rate1) [USD/EUR] n/a n/a n/a 1.12
Slide 10: …also when correcting for IFRS 16 effects
3 Financials …also when correcting for IFRS 16 effects [USD m] 9M 2019 9M 2018 ∆ Thereof IFRS 16 ∆ ex. IFRS 16 Revenue 10,654 10,141 +513 0 +513 Operating expenses (before D&A) -8,957 -9,171 +214 +383 -169 EBITDA 1,697 970 +727 +383 +344 Depreciation & Amortization -975 -613 -362 -358 -4 EBIT 722 35
Slide 11: Transport volume increased by 1.2% YoY to 9,011 TTEU in 9M 2019
3 Financials Transport volume increased by 1.2% YoY to 9,011 TTEU in 9M 2019, excluding Intra-Asia transport volume grew by 2.7% YoY Transport volume by trade [TTEU] Atlantic Transpacific 9M 2018 1,382 1,459 1,711 1,071 2,072 430 776 8,900 Far East +1.2% Middle East Latin America 9M 2019 1,472 1,456
Slide 12: Average freight rate has increased by 4.2% YoY in 9M 2019
3 Financials Average freight rate has increased by 4.2% YoY in 9M 2019, while average bunker prices have increased by 4.7% YoY Freight rate [USD/TEU] vs. Bunker price development [USD/mt] Average freight rate 1,032 +4.2% 1,075 1,079 1,079 1,084 1,063 1,055 1,029 +2.8% 1,010 467 446 434 425 416 399 3
Slide 13: Transport expenses per unit remained almost flat YoY
3 Financials Transport expenses per unit remained almost flat YoY despite slightly higher bunker costs Transport expenses per unit [USD/TEU] 9M 2018 Slight YoY increase driven by higher (incl. D&A) 1,015 +2 / +0.2% “Bunker” costs. Decrease in “Handling and haulage” Bunker 4 as less profitable inland
Slide 14: Free cash flow generation of USD 1,483 m significantly stronger
3 Financials Free cash flow generation of USD 1,483 m significantly stronger than last year, notwithstanding IFRS 16 effects of USD 399 m Cash flow 9M 2019 [USD m] Operating Investing Financing cash flow cash flow cash flow 1,727 -244 -1,600 -354 Including full 927 redemption of EUR 1,697 30 450 m s
Slide 15: We have continued deleveraging the company…
3 Financials We have continued deleveraging 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) 40.2% Equity ratio 40.9% 6,744 Net debt 6,1311) 15,454 1,184 14,646 Liabilities from newly reco
Slide 16: …and have already surpassed our 2019 Net Debt / EBITDA target
3 Financials …and have already surpassed our 2019 Net Debt / EBITDA target (excl. IFRS 16) of 3.5x FY 2017 [USD m] FY 2018 [USD m] LTM 9M 2019 [USD m] (excl. IFRS 16) Financial debt 7,596 6,891 6,084 Net debt / 5.7x EBITDA 4.6x 6,812 3.2x 6,131 5,448 1,686 1,199 1,345 9M 2019 1,314 Q4 2018 372 EBITD
Slide 17: Earnings outlook for 2019 substantiated
4 Way forward Earnings outlook for 2019 substantiated: EBITDA and EBIT now expected to be in the upper part of the guided ranges FY 20182018 Outlook 2019 Sensitivities for 20191) (incl. IFRS 16) Transport volume 11,874 TTEU On previous years level +/- 300 TTEU +/- USD ~0.2 bn Average freight rate 1,
Slide 18: Major targets for 2019 and beyond continue to remain unchanged
4 Way forward Major targets for 2019 and beyond continue to remain unchanged Continue to increase profitability and further deleverage our company Continuously proactively adjust to changing market conditions Prepare for IMO 2020 Continue to implement our “Strategy 2023” and create more value for ou
Slide 19: Appendix
Appendix Appendix
Slide 20: Hapag-Lloyd with an equity ratio of 40.2% and a gearing of 92.0%
Appendix Hapag-Lloyd with an equity ratio of 40.2% and a gearing of 92.0% Balance sheet [USD m] Financial position [USD m] million USD 30.9.2019 31.12.2018 million USD 30.9.2019 31.12.2018 30.9.2018 Assets Financial debt 7,379.2 6,891.0 7,272.1 Non-current assets 15,524.2 14,709.1 Cash and cash equi
Slide 21: Hapag-Lloyd with positive EBIT of USD 722.2 m in 9M 2019
Appendix Hapag-Lloyd with positive EBIT of USD 722.2 m in 9M 2019 Income statement [USD m] QoQ YoY million USD1 Q3 2019 Q2 2019 Q3 2018 Change change 9M 2019 9M 2018 Change Revenue 3,607.5 3,569.0 3,564.6 1% 1% 10,654.1 10,141.3 5% Transport expenses –2,736.7 –2,790.5 –2,899.6 –2% –6% –8,187.4 –8,41
Slide 22: Overview of IFRS 16 effects on cash flow statement
Appendix Overview of IFRS 16 effects on cash flow statement [USD m] 9M 2019 9M 2018 ∆ Thereof IFRS 16 ∆ ex. IFRS 16 EBIT 722 357 +365 +26 +339 Depreciation / Amortization 975 613 +362 +359 +3 EBITDA 1,697 970 +727 +383 +344 Working Capital and other effects 30 -98 +128 +16 +112 Cash flow from operat
Slide 23: 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 September 20191), [USD m] 2,502 Facility 30 September 2019 [USD m] Vessel Financings 3,460 Container Financings 1,202 Total Vessel & Container 4,663 1.600 1,559 EUR Bond
Slide 24: Bunker price increased by 4.7% YoY to 425 USD/mt in 9M 2019
Appendix Bunker price increased by 4.7% YoY to 425 USD/mt in 9M 2019, which drove up bunker expenses per unit to 155 USD/TEU Bunker consumption & expenses per TEU Bunker consumption price [mt/TEU; USD] [USD/mt] 0,37 0,36 700 +4 / +3% 664 643 151 155 613 600 599 594 600 553 9M 2018 9M 2019 MDO 9M 201
Slide 25: Hapag-Lloyd's shareholder structure as of 30 September 2019
Appendix Hapag-Lloyd`s shareholder structure as of 30 September 2019 Shareholders‘ agreement/ Controlling shareholders 4.5% Kühne Maritime GmbH / Kühne Holding AG CSAV Germany Container Holding GmbH 10.2% HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH 29.2% Qatar Holding Ge
Slide 26: Share price development
Appendix Share price development Performance since 1 January 2018 Indexed Price Frankfurt Stock Exchange / 220 Stock Exchange Hamburg Stock Exchange 210 200 190 Regulated market 180 Market segment (Prime Standard) 170 160 150 140 ISIN / WKN DE000HLAG475 / HLAG47 130 120 110 Ticker Symbol HLAG 100 90
Slide 27: Bond trading
Appendix Bond trading 110 105 105,1 100 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 28: 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 28
Slide 29: 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 30: 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 30