Dampskibsselskabet Norden A/s · OMXCOP:DNORD
Dampskibsselskabet Norden A/s — Q2 2024 Earnings Presentation
37 slides from Dampskibsselskabet Norden A/s's earnings presentation, August 2024
Slide 1: Presentation of Second Quarter Results 2024
PRESENTATION OF SECOND QUARTER RESULTS 2024 Copenhagen, Denmark, 2024
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains certain forward-looking statements reflecting the management’s present judgment of future events and financial results. Statements relating to 2024 and subsequent years are subject to uncertainty, and NORDEN’s actual results may therefore differ
Slide 3: Key Statements and Highlights Second Quarter 2024
KEY STATEMENTS AND HIGHLIGHTS SECOND QUARTER 2024 3 PRESENTATION OF SECOND QUARTER RESULTS 2024
Slide 4: Second Quarter 2024 Business Highlights
SECOND QUARTER 2024 BUSINESS HIGHLIGHTS • Second quarter performance in line with expectations in market conditions characterised by continued volatility and uncertainties related to macroeconomics and geopolitical events, particularly around Middle East and Red Sea • Financial results impacted by t
Slide 5: Second Quarter 2024 Financial Highlights
HIGHLIGHTS SECOND QUARTER 2024 Profit for the FINANCIAL HIGHLIGHTS period EBIT 46 USD million 54 USD million • Net profit of USD 46 million and a ROIC of 21% (LTM) overall in line with expectations H1 2024: 108 H1 2024: 127 USD million USD million • Freight Services & Trading: Net profit of USD -18
Slide 6: Assets & Logistics Contributes with Stable Margins
ASSETS & LOGISTICS CONTRIBUTES WITH STABLE MARGINS Margins in Freight Services & Trading are currently negatively impacted by high time-charter rates, while the Assets & Logistics business through high coverage contributes to stable high margins. Quarterly contribution margin per business unit 500 U
Slide 7: Market Position: Building Market Exposure
MARKET POSITION Dry Cargo Position - Group BUILDING MARKET EXPOSURE Vessels (by early August 2024) 301 100 40 80 70 60 28 17 13 11 10 6 4 • NORDEN continues building deferred market exposure, driven by a structurally positive 50 27 24 40 outlook on both the dry cargo and tanker market. Our extensive
Slide 8: Strategy Update: Executing on Our Long-Term Targets
Strategic Scorecard STRATEGY UPDATE Target Target EXECUTING ON OUR LONG-TERM TARGETS Value creation Return on Invested Capital (ROIC) Rolling five years Average of min. 12% - avg. Q3 2019 – Q2 2024 • Delivering on long-term strategic objectives, confirming our focus on delivering long-term value 24%
Slide 9: Guidance and Final Remarks
GUIDANCE AND FINAL REMARKS 9 PRESENTATION OF SECOND QUARTER RESULTS 2024
Slide 10: Guidance Full-Year 2024
GUIDANCE FULL-YEAR 2024 • Based on a first half-year performance overall in line with expectations, NORDEN narrows the full- year guidance of a net profit in the range of USD 160-240 million (previously: USD 150-250 million) • The full-year guidance for 2024 includes gains on sale of vessels from al
Slide 11: Final Remarks: A Quarter in Line with Expectations
FINAL REMARKS A QUARTER IN LINE WITH EXPECTATIONS • Result for Q2 in line with expectations and with positive contribution from tanker activities and high earnings coverage in dry cargo in Assets & Logistics and temporarily negative margins in Freight Services & Trading • NORDEN strongly positioned
Slide 12: Thank You for Your Attention
THANK YOU FOR YOUR ATTENTION Dampskibsselskabet NORDEN A/S 52, Strandvejen DK-2900 Hellerup Denmark Phone: +45 3315 0451 www.norden.com Connect with us 12 PRESENTATION OF SECOND QUARTER RESULTS 2024
Slide 13: Appendix
APPENDIX Consolidated financial information and fleet data for NORDEN Market development and outlook NORDEN at a glance Our strategy Business units Total shareholder returns and business unit valuation 13 PRESENTATION OF SECOND QUARTER RESULTS 2024
Slide 14: NORDEN Financials
NORDEN FINANCIALS 14 PRESENTATION OF SECOND QUARTER RESULTS 2024
Slide 15: Financial Highlights: Consolidated Financial Information
FINANCIAL HIGHLIGHTS CONSOLIDATED FINANCIAL INFORMATION 15 PRESENTATION OF SECOND QUARTER RESULTS 2024
Slide 16: Financial Highlights: Consolidated Financial Information
FINANCIAL HIGHLIGHTS CONSOLIDATED FINANCIAL INFORMATION 16 PRESENTATION OF SECOND QUARTER RESULTS 2024
Slide 17: Financial Highlights: Consolidated Financial Information
FINANCIAL HIGHLIGHTS CONSOLIDATED FINANCIAL INFORMATION 17 PRESENTATION OF SECOND QUARTER RESULTS 2024
Slide 18: Assets & Logistics Fleet Overview
ASSETS & LOGISTICS FLEET OVERVIEW At 30 June 2024 Dry Cargo Vessels in operation Vessels to be delivered Capesize 7 5 Panamax 14 6 Supramax 18 9 Handysize 12 4 Total 51 24 - Of which own vessels Capesize 7 4 Panamax 2 0 Supramax 0 5 Handysize 0 0 Total 9 10 9 Tankers Vessels in operation Vessels to
Slide 19: Assets & Logistics Capacity and Coverage
ASSETS & LOGISTICS CAPACITY AND COVERAGE Assets & Logistics – Dry Cargo At 30 June 2024 Assets & Logistics – Tankers At 30 June 2024 2024 2025 2026 2024 2025 2026 Own vessels Vessel days 2024 2025 2026 2024 2025 2026 Capesize Own vessels Vessel days 1,457 2,920 2,920 Panamax MR 1,288 2,555 2,555 368
Slide 20: Business Unit Performance
BUSINESS UNIT PERFORMANCE 20 PRESENTATION OF SECOND QUARTER RESULTS 2024
Slide 21: Freight Services & Trading: Temporary Short-Term Headwinds
FREIGHT SERVICES & TRADING NET PROFIT PER VESSEL DAY TEMPORARY SHORT-TERM HEADWINDS USD / day 5,000 4,583 4,000 3,554 • Freight services & Trading reported result for the first quarter of USD -18 million 3,153 3,000 compared to USD 34 million in Q2 2023 2,054 1,916 1,858 1,856 2,000 1,672 • Result c
Slide 22: Assets & Logistics: Increasing Asset Values
ASSETS & LOGISTICS INCREASING ASSET VALUES Estimated NAV, DKK per share DKK • Assets & Logistics reported a result of USD 64 million in Q2 2024 (USD 74 million), including 500 446 451 422 profit from sale of vessels of USD 7 million and subleases of USD 27 million 400 377 381 372 347 360 353 • Conti
Slide 23: Assets & Logistics: Extensive Optionality in Volatile Environment
ASSET & LOGISTICS EXTENSIVE OPTIONALITY IN VOLATILE ENVIRONMENT • NORDEN’s extensive optionality generates potential for attractive upside to the portfolio in a market characterised by increasing new building prices and short-term lower visibility on freight rates due to the macroeconomic uncertaint
Slide 24: Market Developments and Outlook
MARKET DEVELOPMENTS AND OUTLOOK 24 PRESENTATION OF SECOND QUARTER RESULTS 2024
Slide 25: Market Developments: Dry and Tanker Market in Q2
MARKET DEVELOPMENTS 5-year secondhand asset values DRY AND TANKER MARKET IN Q2 USD million 70 60 Continued positive market in Dry Cargo in the second quarter 50 40 • Strong volume growth with dry cargo volumes growing 4% Y/Y and 7% in tonne miles driven by 30 strong import to China of iron ore and c
Slide 26: Market Developments: Dry Cargo Market Outlook
MARKET DEVELOPMENTS Global volumes transported (30-day moving average) DRY CARGO MARKET OUTLOOK 14.5 Million tonnes 13.5 12.5 • Dry cargo market expected to remain firm, supported by stable demand growth and low fleet growth and with longer distances adding to higher utilisation 11.5 • Continuing po
Slide 27: Market Developments: Tanker Market Outlook
MARKET DEVELOPMENTS Clean products and crude oil in transit (number of barrels in transit compared to January 2020 in %) TANKER MARKET OUTLOOK 125% 115% 105% 95% • Product tanker market expected to remain near-term attractive but with volatility 85% expected in freight rates from the overall geopoli
Slide 28: NORDEN at a Glance
NORDEN AT A GLANCE 28 PRESENTATION OF SECOND QUARTER RESULTS 2024
Slide 29: NORDEN at a Glance
NORDEN AT A GLANCE 2005: NORDEN establishes Norient 2021: Product Pool with pool-partner Interorient Navigation NORDEN celebrates 150 years of sailing the seven seas 1923: Company Ltd., Cyprus NORDEN’s first motor vessel, NORDBO is delivered 2013: 2023: 1871: 1973: NORDEN finalises its first NORDEN
Slide 30: We Enable Smarter Global Trade
WE ENABLE SMARTER GLOBAL TRADE More than Tonnes of cargo carried Data points processed daily We are 475 130 m 9.4 bn 52 vessels operated in 2023 to support decisions nationalities at NORDEN 30 PRESENTATION OF SECOND QUARTER RESULTS 2024
Slide 31: NORDEN Strategy
NORDEN STRATEGY Macrotrends affecting shipping NORDEN strategy Geopolitical complexity Customer-focused freight services, logistics and climate solutions Market volatility Asset-light business model Digitalisation High-performing organisation Data, analytics and risk management Decarbonisation 31 PR
Slide 32: Our Business Model
OUR BUSINESS MODEL Founded in 1871 and with 14 offices across 6 continents and close to 500 employees ashore, NORDEN is a global provider of ocean-based freight From shipper Freight Services and Port logistics To customer services for dry and liquid bulk and project cargo of all sizes. We integrate
Slide 33: Business Model: Agile Capacity Management Model
BUSINESS MODEL AGILE CAPACITY MANAGEMENT MODEL Selected customers and partners DRY CARGO TANKERS MULTIPURPOSE HANDYSIZE HANDYSIZE 10,000 - 30,000 DWT 28,000 - 39,000 DWT 36,000 - 40,000 DWT c SUPRAMAX PANAMAX MR 50,000 - 64,000 DWT 75,000 - 93,000 DWT 46,000 - 52,000 DWT CAPESIZE 150,000-210,000 DWT
Slide 34: Shareholder Returns and Valuation
SHAREHOLDER RETURNS AND VALUATION 34 PRESENTATION OF SECOND QUARTER RESULTS 2024
Slide 35: Shareholder Cash Distribution
HIGHLIGHTS FOR SECOND QUARTER 2024 SHAREHOLDER CASH DISTRIBUTION CASH DISTRIBUTED TO SHAREHOLDERS (USD million) incl. announced share buy-backs 800 75% • NORDEN will in connection with the second quarter 2024 results distribute USD 700 23 million to shareholders through an interim dividend of DKK 2
Slide 36: Share Price Performance: Annualised Total Shareholder Returns of 39%
SHARE PRICE PERFORMANCE ANNUALISED TOTAL SHAREHOLDER RETURNS OF 39% PER YEAR ~ USD 1.2 billion returned since 2019 (When including interim dividends and share buyback programme) Total shareholder return since Q2 2019 (As of 30 June 2024) 800 700 600 500 Index = 100 400 300 200 100 0 Dry peers Tanker
Slide 37: Share Price Valuation
SHARE PRICE VALUATION ASSETS & LOGISTICS FREIGHT SERVICES & TRADING NAV-based valuation Earnings-multiple based valuation Per 30/6/2024 USDm Market value of own vessels 1,370 TOTAL VALUE Market value of T/C & Cover portfolio 638 Expected avg. margin per day (USD) 500 OF NORDEN Net cash position 176
Dampskibsselskabet NORDEN — Q2 2024 Earnings Presentation on 6ix