Slide 1: Investor Presentation Preliminary Financials 2016
Investor Presentation Preliminary Financials 2016 Hamburg, 28 February 2017
Slide 2: 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 3: Opening remarks
Opening remarks We continued to progress on our strategic initiatives and achieved a profit in H2 2016 01 Deliverables (after a disappointing first half year with the low point in Q2) The industry fundamentals are showing continuous signs of improvement 02 Market Update The sector is consolida
Slide 4: We continued to progress on our initiatives in 2016
1 Deliverables We continued to progress on our initiatives in 2016 € € 2016 2017 January 2016 March 2016 August 2016 January / Compete to Win Inclusion in Annual General February 2017 roll-out SDAX Meeting approves Successful all agenda items bond issuance & debt refinancing April 2016 July 2016 Nov
Slide 5: The industry momentum is changing as guided by Hapag-Lloyd over the recent years
2 Market Update The industry momentum is changing as guided by Hapag-Lloyd over the recent years 2017 comments in public domain in line with 2015 / 16 HL guidance “The current wave of consolidation in the sector, with so far “…which will create urgently needed only 13 global carriers remaining - dow
Slide 6: Demand: Container shipping remains an industry with healthy growth and balanced trade dynamics
2 Market Update Demand: Container shipping remains an industry with healthy growth and balanced trade dynamics Container shipping volume and global GDP growth GDP 6 2000-2008 2010-2015 2016-2018E 2.1x 1.3x 1.2x multiplier +4.6% 300 +4.0% +4.7% +3.2% 250 +9.1% +3.7% +3.1% +3.4% 200 +3.5% Transport vo
Slide 7: Supply: Capacity growth is slowing
2 Market Update Supply: Capacity growth is slowing (as a result of decreasing benefits of ever larger vessels) 8 Orderbook-to-fleet [TEU m, %] Orders placed by year [TEU m] 61% 3.2 -91% 7 50% 2.2 2.0 1.8 6 38% 1.2 1.1 28% 0.6 27% 0.4 5 0.2 0.1 0.0 21% 21% 18% 19% 17% 2007 2008 2009 2010 2011 2012 20
Slide 8: Supply: Scrapping and idling help to further reduce effective supply growth
2 Market Update Supply: Scrapping and idling help to further reduce effective supply growth Highest scrapping level ever … … and idling remains high … [TTEU] [TTEU] Share of world fleet 6.6% 27 28 30 Especially in 24 23 23 23 1,480 1,359 1,441 1,324 19 18 Panamax segment +237% 809 779 650 595 444 38
Slide 9: Freight rates have started to recover ahead of CNY
2 Market Update Freight rates have started to recover ahead of CNY Shanghai – Europe (SCFI) Shanghai – USA (SCFI) 2,500 6,000 USWC (USD/FEU) USEC (USD/FEU) HL Transpacific* NEurope (USD/TEU) Mediter. (USD/TEU) HL Far East* 5,000 2,000 4,000 1,500 3,000 3,055 1,000 921 882 2,000 1,650 500 1,000 0 0 J
Slide 10: Gap between TOP and the rest is widening rapidly
2 Market Update Gap between TOP 6 and the rest is widening rapidly Current consolidation wave leads to higher concentrations Carrier capacity [TEU m] and global capacity share [%] Global capacity share [%] 14% 13% 8% 2.5 Ranking end of 2013 2.3 1.5 4% 4% 4% 4% 3% 3% 3% 3% 3% 2% 2% 2% 2% 2% 2% 2% 1%
Slide 11: On the back of consolidation, alliances have been re-shaped
2 Market Update On the back of consolidation, alliances have been re-shaped with start of operations in April 2017 Strong partners in THE Alliance Strong partners in THE Alliance THE Alliance covers all East-West trades 5% 2M1) Comprehensive network of 32 services will connect more than 75 major p
Slide 12: Strategic projects to enhance profitable growth
3 HL Performance We delivered on our defined initiatives Tangible results and further upside CUATRO synergies: Initial target: USD 300 m Strategic projects to enhance profitable growth Compete Revised target: USD 400 m to Win Successful Improvement of implementation Close the revenue quality OCT
Slide 13: Transport volume in line with expectations, freight rates decreased and unit costs further optimized
3 HL Performance Transport volume in line with expectations, freight rates decreased and unit costs further optimized Transport volume [TEU m] Freight rate [USD/TEU] 1,700 2014 2015 2016 +25.3% +2.7% 1,600 1,427 1,225 1,036 7.6 1,500 7.4 1,400 -15.4% 5.9 1,300 1,200 1,100 1,000 900 2014 2015 2016 Q1
Slide 14: Overall we achieved an operating profit in 2016
3 HL Performance Overall we achieved an operating profit in 2016 Hapag-Lloyd Preliminary Financials 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2016 FY 2016 FY 2015 ∆% Transport volume [TTEU] 1,811 1,892 1,947 1,949 7,599 7,401 +3% Freight rate [USD/TEU] 1,067 1,019 1,027 1,033 1,036 1,225 -15% Bunker price [US
Slide 15: The effects of our further cost savings are clearly visible when looking at the relative performance
3 HL Performance The effects of our further cost savings are clearly visible when looking at the relative performance FY 2015 EBIT [USD m] 9M 2016 EBIT [USD m] Q4 2016 EBIT [USD m] Maersk Line 1,431 6.0% Wan Hai 31 2.4% Hapag-Lloyd 111 5.1% CMA CGM 894 5.9% Hapag-Lloyd 29 0.5% NYK 36 2.6% Hapag-Lloy
Slide 16: Equity at USD 5.3 bn and liquidity reserve at USD 0.8 bn
3 HL Performance Equity at USD 5.3 bn and liquidity reserve at USD 0.8 bn – Capital increase of USD 400 m post Closing Strong equity base [USD m] Stable net debt [USD m] Financial Debt 4,256 4,415 5,497 5,342 Cash 625 602 3,631 3,7931) Net Debt 2015 2016 2015 2016 Solid liquidity position [USD m] UA
Slide 17: Hapag-Lloyd optimized its maturity profile via debt capital markets
3 HL Performance Hapag-Lloyd optimized its maturity profile via debt capital markets at more attractive pricing levels Bond coupon and maturity profile Coupon 9.75% 7.75% 7.50% 6.75% EUR 450 m On 18 Jan 2017 Hapag-Lloyd successfully priced a Yield to maturity new bond of EUR 250 m due 2022 – on 7
Slide 18: Hapag-Lloyd / UASC merger creates a top tier pure-play carrier
4 UASC Merger Hapag-Lloyd / UASC merger creates a top tier pure-play carrier At a glance Deal rationale Combined Combination assures a top 5 position globally and Entity1) Scale on key trades in a consolidating market Corporate Hamburg Dubai Hamburg HQ Further balancing of trade portfolio with leade
Slide 19: Scale: On important trades TOP 5 players now make up more than 70%
4 UASC Merger Scale: On important trades TOP 5 players now make up more than 70 % capacity share TOP 5 concentration on individual trades (2013 versus 2017) Atlantic Latin America Far East Transpacific Middle East / Indian Subcontinent 90% 79% 81% 73% 70% 67% 59% 53% 41% 43% 2013 2017 (incl. announc
Slide 20: Network: Balanced trade portfolio – More than any TOP 5 liner
4 UASC Merger Network: Balanced trade portfolio – More than any TOP 5 liner Transport volume by trade, FY 2016 (indicative) Hapag-Lloyd UASC1) Combined Entity1) 20% 20% 16% 13% 4% 54% 17% 16% 27% 30% 22% 22% 13% 3% 3% 9% 5% 5% Trade TEU m Trade2) TEU m Trade2) TEU m Atlantic 1.5 Atlantic 0.1 Atlanti
Slide 21: Fleet: Access to young and fuel-efficient fleet with large share of ULCVs
4 UASC Merger Fleet: Access to young and fuel-efficient fleet with large share of ULCVs with no planned need to invest in next years Average fleet age Fleet ownership [%] Average vessel size [TEU] Combined 6.3 Combined 66% 34% Combined 6,857 CMA CGM / COSCO / +1,057 APL 7.2 CSCL 63% 37% MSC 6,044 TE
Slide 22: Synergies of USD 435 m expected from 2019 onwards
4 UASC Merger Synergies: Synergies of USD 435 m expected from 2019 onwards – Mainly in network and overhead Synergy potential, full run-rate [USD m] Comments 435 1 Network − Optimized new vessel deployment / network − Slot cost advantages − Efficient use of new fleet 2 Overhead − Consolidation of
Slide 23: Partner: New core shareholders with strategic interest in the Combined Entity
4 UASC Merger Partner: New core shareholders with strategic interest in the Combined Entity Transaction overview Other Free UASC shares contributed to Hapag-Lloyd QH1) PIF2) CSAV HGV Kühne TUI Minorities3) Float in exchange for newly issued 51.3% 36.1% 12.6% 31.4% 20.6% 20.2% 12.3% 15.5% Hapag-Llo
Slide 24: Hapag-Lloyd with clearly defined financial policy
5 Way Forward Hapag-Lloyd with clearly defined financial policy Profitability going forward supported by improved fleet ownership structure Profitability and synergy realization Investments No planned new vessel investments in next years – Maximize free cash flow Deleveraging Clear target to signifi
Slide 25: i Te
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Slide 26: Hapag-Lloyd shares with supportive tradings in recent months
Hapag-Lloyd shares with supportive tradings in recent months Share trading 160 Frankfurt Stock Exchange / Stock Exchange Hamburg Stock Exchange 140 Market segment / Regulated market (Prime Standard) / 120 Index SDAX 100 ISIN / WKN / Ticker Symbol DE000HLAG475 / HLAG47 80 Ticker Symbol HLAG 60 Primar
Slide 27: Hapag-Lloyd bonds continuously trade above par
Hapag-Lloyd bonds continuously trade above par Bonds trading 110 105 105.1 103.5 102.3 100 95 HL EUR 7.75% 2018 HL EUR 7.50% 2019 HL EUR 6.75% 2022 EUR Bond 2022 EUR Bond 2019 EUR Bond 2018 Listing Open market of the Luxembourg Stock Exchange (Euro MTF) Volume EUR 450 m EUR 250 m EUR 200 m1) ISIN /
Slide 28: Henrik Schilling Senior Director Investor Relations
Henrik Schilling Senior Director Investor Relations Tel +49 40 3001-2896 Fax +49 40 3001-72896 Henrik.Schilling@hlag.com https://www.hapag-lloyd.com/en/ir.html 28