Danaos Corporation · NYSE:DAC
Danaos — Investor Presentation (February 2024)
53 slides from Danaos's investor presentation, February 2024
Slide 1: Investor Presentation February 2024
Investor Presentation February 2024
Slide 2: Disclaimer
Disclaimer This presentation contains certain statements that may be deemed to be “forward-looking statements” within the meaning of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, that address activities, events or developments that the Company expect
Slide 3: Business Highlights
Business Highlights Business Model Provides Strong & ✓ Stable Cash Flow Profile Leading Diverse & High ✓ Containership Owner ✓ Quality Fleet & Operator Pioneers in Demand & Supply Digitalisation & ✓ Side Dynamics ✓ Champion of ESG Robust Capital Principles Structure & ✓ Conservative Financial Strate
Slide 4: Key Business Highlights
Key Business Highlights • One of the largest publicly-listed owners of modern containerships with 50 year history in the shipping Leading Containership A Owner and Operator market • One of the most efficient operators in the industry with highly competitive breakeven levels • Charter backlog of $2.3
Slide 5: Danaos by the Numbers
Danaos by the Numbers $2.3bn $272mm Cash Contracted revenue through 2028(1) Cash and Cash Equivalents as of December 31, 2023 0.20x $609mm Net Debt / 2023 Adjusted EBITDA(2) Liquidity(3) as of December 31, 2023 $707mm ~$1.6bn 2023 Adjusted EBITDA Enterprise value(4) (1) Cash Contracted Revenue as of
Slide 6: Fourth Quarter 2023 Financial & Operational Summary
Fourth Quarter 2023 Financial & Operational Summary Three Months ended December 31, 2023 and December 31, 2022 per segment* (Express in thousands of United States dollars, except as otherwise stated) Three Months Ended Three Months Ended December 31, 2023 December 31, 2022 Container Dry Bulk Contain
Slide 7: FY 2023 Financial & Operational Summary
FY 2023 Financial & Operational Summary Year ended December 31, 2023 and December 31, 2022 per segment* (Express in thousands of United States dollars, except as otherwise stated) Year Ended Year Ended December 31, 2023 December 31, 2022 Container Dry Bulk Container Dry Bulk Financial & Operating Me
Slide 8: Fleet Summary & Strong Charter Coverage Profile
Fleet Summary & Strong Charter Coverage Profile Containership Fleet TEU Capacity(1) Number of vessels (1)(2) 550 Existing Fleet New Buildings 90 Containerships Drybulk vessels 500 91.4 450 46.4 9 400 70 350 436.6 423.7 421.3 71 69 68 300 250 50 2021 2022 2023 2021 2022 2023 Containership – Contracte
Slide 9: Fourth Quarter and FY 2023 Highlights
Fourth Quarter 2023 and FY 2023 Highlights Operating Revenues Adjusted EBITDA(1) USDm USDm $1,200.0 $1,200.0 $993.3 $851.2 ZIM Dividend $900.0 $973.6 $900.0 $704.0 $707.0 $600.0 $600.0 $300.0 $300.0 $252.5 $249.3 $176.4 $172.6 $0.0 $0.0 Three Months Ended December 31 Twelve Months Ended December 31
Slide 10: Fourth Quarter and FY 2023 Highlights – Segments
Fourth Quarter and FY 2023 Highlights – Segments Operating Revenues per Segment Time Charter Equivalent ($/per day)(1) per Segment USDm USD $1,200.0 $60,000 $973.6 $39,039 $39,592 $900.0 $963.2 $45,000 $600.0 $30,000 $300.0 $249.3 $15,000 $238.9 $11,706 $11,706 $10.4 $10.4 $0.0 $0 Three Months Ended
Slide 11: Substantial Containership Fleet Employment and Charter Coverage
Substantial Containership Fleet Employment and Charter Coverage(1) Current charter Next Charter Charter Charter 2024 2025 2026 2027 2028 Vessel TEU 2 Charterer Rate Expiry Rate Expiry Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026 Q1 2027 Q2 2027 Q3 2
Slide 12: Substantial Containership Fleet Employment and Charter Coverage
Substantial Containership Fleet Employment and Charter Coverage(1) Current charter Next Charter Charter Charter 2024 2025 2026 2027 2028 Vessel TEU Age2 Charterer Rate Expiry Rate Expiry Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026 Q1 2027 Q2 2027 Q
Slide 13: Substantial Containership Fleet Employment and Charter Coverage
Substantial Containership Fleet Employment and Charter Coverage(1) Current charter Next Charter Charter Charter 2024 2025 2026 2027 2028 Vessel TEU 2 1 Rate Expiry Rate Expiry Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026 Q1 2027 Q2 2027 Q3 2027 Q4 2
Slide 14: Dry Bulk Fleet - Summary
Dry Bulk Fleet - Summary No. Vessel Type DWT Built Age(1) 1 Achievement Capesize 175,966 2011 13 2 Genius Capesize 175,580 2012 12 3 Ingenuity Capesize 176,022 2011 12 4 Integrity Capesize 175,966 2010 13 5 Peace Capesize 175,858 2010 14 6 W Trader Capesize 175,879 2009 14 7 E Trader Capesize 175.88
Slide 15: Experienced Senior Management
Experience Senior Management Dr. John Coustas, President & CEO Evangelos Chatzis, Chief Financial Officer • CEO since 1987 • Joined Danaos in 2005 • Over 30 years of experience in • Over 28 years of experience in corporate the shipping industry finance and the shipping industry • Vice Chairman of th
Slide 16: A. Leading Containership Owner and Operator
A. Leading Containership Owner and Operator
Slide 17: Legacy of Leadership in Container Shipping
50 Year Legacy of Leadership in Container Shipping 1987 2006 2018 2020 to 2023 Dr. John Coustas steps NYSE IPO Refinancing Strong Free Cash Flow into Chief Executive role Raised $200mn generation and Deleveraging 1972 2005 2010 2019 Founded by Dimitris Coustas Incorporation in Marshall $200mn equity
Slide 18: A Diverse & High-Quality Fleet
A Diverse & High-Quality Fleet Containership Fleet Overview(1) 12x NBs 6,000 – 8,200 TEU 5x 10x Remaining Charter Term : 3 years 13,100 TEU 2,200 – 2,600 TEU Average Age: 11.7 years Average Age: 25.4 years Remaining Charter Term: 3.3 years Remaining Charter Term: 1.0 years 11% 14% 8x 4% 3,300 - 3,40
Slide 19: Charter Backlog to Leading Container Operators
Charter Backlog to Leading Container Operators Containership Charter Backlog(1) (TEU-weighted remaining duration of charter backlog) Charter backlog of 13% $2.3 billion through 20% to 2028(1) 3% 4% 4% Average charter duration of 3.0 years 6% 18% (weighted by aggregate contracted charter hire) (1) 9%
Slide 20: Track Record of Operational Excellence
Track Record of Operational Excellence Danaos' Management Practice Performance(1) Relative to Peers As part of a benchmarking exercise conducted by a global management consulting firm, Management Practice Performance and Safety & Quality Performance was assessed across a number of metrics and benchm
Slide 21: Pioneers in Digitization Supporting Operational Excellence
Pioneers in Digitization Supporting Danaos’ Class Leading Operational Excellence Early innovator in utilising technology in optimising operations: 1995 2004 2015 International Safety Management Lloyd’s List Technical Innovation Award Lloyd’s List Intelligence Big Data Award Certification of its cont
Slide 22: Leading Digitization Performance
Leading Digitization Performance Danaos utilises its leading management software capability, aiding in the optimal management of its fleet System Description Danaos Software Capability Manages maintenance jobs, schedules counter-based and condition- Planned based tasks, and automatically updates sto
Slide 23: Longstanding Champion of ESG Principles
Longstanding Champion of ESG Principles Danaos Management is keenly focused on maintaining a strong ESG framework for company operations Environmental Social Governance Last 3 Years Progress Advanced solutions to Code of ethics and ✓ Independent Board 72% decrease in the use of ✓ reduce emissions th
Slide 24: B. Robust Capital Structure and Conservative Financial Strategy
B. Robust Capital Structure and Conservative Financial Strategy
Slide 25: Financial Strategy
Financial Strategy Balanced Chartering Strategy • Continue to deploy assets on long-term charters to ensure cash flow visibility Supported by Continued Operational Excellence • Maintain high fleet utilization • Excess cash flow can be used for reducing leverage, for acquisition of young and modern f
Slide 26: Historical Financial Highlights
Historical Financial Highlights Revenues Adjusted EBITDA USDm USDm $1,200 $1,200 $993 $974 $1,000 $1,000 $851 $800 $800 $690 $707 $600 $600 $509 $452 $459 $447 $462 $400 $400 $318 $310 $318 $311 $200 $200 $0 $0 2017 2018 2019 2020 2021 2022 2023 2017 2018 2019 2020 2021 2022 2023 Net Income & Adjust
Slide 27: Focused on Maintaining Conservative Capital Structure
Focused on Maintaining Conservative Capital Structure De-leveraging Profile Cash and Cash Equivalents(2) and Undrawn Commitments Net Debt and 2023 Adjusted EBITDA Multiple(1) USDm Net Adjusted Debt Net Debt / Adjusted EBITDA (RH Axis) Cash and Cash Equivalents Undrawn Commitments $3,000 8.0x $800 De
Slide 28: Strong Free Cash Flow Visibility & Great Conversion to OCF
Strong Free Cash Flow Visibility & Great Conversion to OCF 2023 Free Cash Flow(1) Bridge USDm Drivers of FCF Uses of FCF Higher re-chartering Early repayment of debt and leases 2023 FCF High utilization Capex and Investments excludes CapEx Operational efficiency Dividends and one-time /
Slide 29: Financial Debt Maturity Profile
Financial Debt Maturity Profile Well-balanced repayment profile(1) USDm $300 $262.8 $200 $96.3 $100 $21.3 $15.1 $15.1 $0 2024 2025 2026 2027 2028 Credit Facilities Unsecured Notes Breakdown of Financial Debt $411m Credit position • CFR rating : BB+ (Stable) and Ba2 (Stable) and Senior unsecured Cred
Slide 30: C.1 Container Vessel Demand & Supply Side Dynamics
C.1 Container Vessel Demand & Supply Side Dynamics
Slide 31: Container Trade: Improving picture in H2 23
Container Trade: Improving picture in H2 23, Following weak H1 23 211 Mn Teu World Container Trade & GDP, 2000 – 2024F 2023(E) World Container Trade Mn TEU % yoy 275 17.5% 250 15.0% 225 12.5% -0.5% 200 10.0% 175 7.5% 2023(E) Trade yoy Growth 150 5.0% 125 2.5% 220 Mn Teu 100 0.0% 75 -2.5% 2024(F) Wor
Slide 32: Demand: US Consumer Spending Resilient, Import Volumes Up
Demand: US Consumer Spending Resilient, Import Volumes Up vs Q4 2022 + 11.1% US Containerised Imports from Far East, 2018-23 US Inflation-Adjusted Consumer Spending by Type US Far East TEU Imports, Q4 23 vs Q4 22 + 9.2% Mn TEU Index, 100=Jan 18 US Far East TEU Imports, 2.0 180 Q4 23 vs Q4 2019 1.8 1
Slide 33: Container TC Rates: Recent Rebound as Chartering Needs Increase
Container TC Rates: Recent Rebound as Chartering Needs Increase 42% 1-Year Timecharter Market Rates, January 2017 – January 2024 $k/Day 8,500 TEU Charter Rate % Ch: Jan 24 vs. Avg 2010-19 200 180 160 30% 140 6,500 TEU Charter Rate % Ch: 120 Jan 24 vs. Avg 2010-19 100 80 87% 60 40 4,300 TEU Charter R
Slide 34: Orderbook Falling at 26.5% of Fleet, Sub-12,000 TEU Fleet Ageing
Orderbook Falling at 26.5% of Fleet, Sub-12,000 TEU Fleet Ageing 26.5% Containership Orderbook, End-December 2023 Age Profile of Fleet: Smaller Vessel Fleet Ageing Industry Orderbook-to-Fleet Ratio, End-December 23 Mn TEU % Share 6.0 100% 13.3% 5.0 80% Orderbook-to-Fleet Ratio: 4.0 Sub-12,000 TEU Fl
Slide 35: Supply: Net Fleet Growth Highly Elevated, Driven by 12k+ TEU Deliveries
Supply : Net Fleet Growth Highly Elevated, Driven by 12k+ TEU Deliveries 648 k TEU Containership Deliveries vs. Scrapping, 2014-23 20+ Year-Old Fleets vs. Segment Orderbooks Containership Deliveries, Q4 23 k TEU 30+ Year Fleet % k TEU 25-29 Year Fleet 700 1800 180% 296 k TEU 600 Containership Demoli
Slide 36: Idle Capacity: Recent Fall in Idling after Red Sea Escalation
Idle Capacity: Recent Fall in Idling after Red Sea Escalation The volume of Idle Containership Capacity: Liner Company Owned vs Tonnage Provider Owned idle capacity remains at Mn TEU % Share historical lows 3.0 80% 70% 2.5 1.0% 2016 71% NOO(1) 60% Owned Idle Fleet at End-Jan 24 2.0 vs. Peak of 12% i
Slide 37: Workhorses of Long-Distance Container Trades
2,200-13,200 TEU Fleet: Workhorses of Long-Distance Container Trades 16.4% Danaos Fleet Segment Share of Long-Distance Trade Development Orderbook-to-Fleet Ratio in Danaos Fleet Segment Danaos fleet segments provide 76% of capacity Transpacific 62% of long-haul container trade volumes 76% Transatlan
Slide 38: Industry to Remain Consolidated as Alliance Patterns Face Shake-Up in 2025
Industry to Remain Consolidated as Alliance Patterns Face Shake-Up in 2025 Recent wave Announced Changes to Alliance (Current Fleets of and Orderbooks consolidation between liner operators Consolidation between liner Mn TEU 8.0 1 companies provides more stable Orderbook Fleet set of counterparties 9
Slide 39: Environmental Regulations: Ships Accelerate Following Red Sea Escalation
Environmental Regulations: Ship Accelerate Following Red Sea Escalation CII: Estimated 2022 Performance vs. 2023 40% Benchmarks Containership Average Sailing Speeds Estimated Share of D-E CII Grades, Total Fleet 2022 Index, 100 = Average 2013-19 A rade B rade rade D rade rade 110 8+ k TEU 3-8 k TEU
Slide 40: C.2 Dry Bulk Vessel Demand & Supply Side Dynamics
C.2 Dry Bulk Vessel Demand & Supply Side Dynamics
Slide 41: Capesize: Market Above Longer-Term Averages
Capesize: Market Above Longer-Term Averages $20,137/Day Weekly Average Capesize Spot Rate Developments, 2021-2024 Baltic C5TC, Avg Wk1 – $ k/Day Range, 2015-20 2021 2022 2023 2024 Wk6, 2024 90 80 $7,780/Day 70 Baltic C5TC, Avg Wk1 – 60 Wk6, 2023 50 $13,998/Day 40 Baltic C5TC, Avg Wk1 – 30 Wk6, 2022
Slide 42: Capesize: Seasonal Slowdown in Chinese Steel Output
Capesize: Seasonal Slowdown in Chinese Steel Output Following Healthy Q3 23 China Daily Steel Output, 10-Day Average, Incremental Seaborne Iron Ore Imports, - 43.9 2021-24 2018-2024(F) Incremental Seaborne Iron Ore Imports, 2022 (MnT) MnT/Day MnT Western Europe Other % yoy Taiwan South Korea 3.0 150
Slide 43: Capesize: Incremental Ton-Mile to Maintain Expansion in 2024
Capesize: Incremental Ton-Mile to Maintain Expansion in 2024 Capesize Incremental Tonne-Mile Demand by Capesize Annual Employment by Cargo (Mn - 30.6 Cargo Dwt) Incremental Capesize Ton-Miles Coal 2022, BnTM BnTm 40% 2003 1000 Minor Bulks Grains Coal Iron Ore Total Iron Ore 800 60% 600 + 393.7 400 C
Slide 44: Capesize: Moderate Fleet Growth in 2023, Orderbook Historically Small
Capesize: Moderate Fleet Growth in 2023, Orderbook Historically Small 5.5% Capesize Orderbook as % of Fleet, 2000-23 Age Profile of Capesize Fleet Capesize Orderbook-to-Fleet Ratio, End-2023 % Share 25+ Years 20-24 Years 15-19 Years Mn Dwt Newbuild Contracting % 10-14 Years 5-9 Years 0-4 Years 100 O
Slide 45: D. Appendix
D. Appendix <i a EI Fa
Slide 46: Adjusted Net Income
Adjusted Net Income Reconciliation of Net Income to Adjusted Net Income USD thousands Three Months Ended December 31, Year Ended December 31, Reconciliation of Net Income / (Loss) to Adjusted Net Income 2023 2022 2023 2022 2021 2020 2019 2018 2017 in thousands of U.S. dollars Net Income / (Loss) $14
Slide 47: Adjusted Net Income per segment
Adjusted Net Income per segment Reconciliation of Net Income to Adjusted Net Income per segment USD thousands Three Months Ended Three Months Ended December 31, 2023 December 31, 2022 Container Dry Bulk Container Dry Bulk Reconciliation of Net Income / (Loss) to Adjusted Net Income Vessels Vessels O
Slide 48: Adjusted EBITDA
Adjusted EBITDA Reconciliation of Net Income to EBITDA and Adjusted EBITDA USD thousands Three Months Ended December 31, Year Ended December 31, Reconciliation of Net Income / (Loss) to EBITDA and Adjusted EBITDA 2023 2022 2023 2022 2021 2020 2019 2018 2017 in thousands of U.S. dollars Net Income /
Slide 49: Adjusted EBITDA per segment
Adjusted EBITDA per segment Reconciliation of Net Income to EBITDA and Adjusted EBITDA per segment USD thousands Three Months Ended Three Months Ended December 31, 2023 December 31, 2022 Container Dry Bulk Container Dry Bulk Reconciliation of Net Income to Adjusted EBITDA Vessels Vessels Other Total
Slide 50: Adjusted EBITDA per segment
Adjusted EBITDA per segment Reconciliation of Net Income to EBITDA and Adjusted EBITDA per segment USD thousands Year Ended Year Ended December 31, 2023 December 31, 2022 Container Dry Bulk Container Dry Bulk Reconciliation of Net Income to Adjusted EBITDA Vessels Vessels Other Total Vessels Vessels
Slide 51: Free Cash Flow
Free Cash Flow Reconciliation of Free Cash Flow to Net Increase / (Decrease) in Cash, cash equivalents and restricted cash USD thousands Three Months Ended December 31, Year Ended December 31, Reconciliation of Free Cash Flow 2023 2022 2023 2022 2021 2020 2019 in thousands of U.S. dollars Adjusted E
Slide 52: Stock Performance – Danaos vs. Peers
Stock Performance – Danaos vs. Peers Since July 1, 2020 3000% 2167% 2500% 2000% Stockholders' Return1 1500% 1000% 500% 0% -500% Jul 2020 Oct 2020 Jan 2021 Apr 2021 Jul 2021 Oct 2021 Jan 2022 Apr 2022 Jul 2022 Oct 2022 Jan 2023 Apr 2023 Jul 2023 Oct 2023 Jan 2024 Danaos Costamare GSL Source: NASDAQ (
Slide 53: Thank You
Thank You