Dampskibsselskabet Norden A/s · OMXCOP:DNORD
Dampskibsselskabet Norden A/s — Norden — FY2012 Earnings Presentation
31 slides from Dampskibsselskabet Norden A/s's earnings presentation, Mar 6, 2013
Slide 1: NORDEN Results: Full year results of 2012
NORDEN RESULTS Full year results of 2012 Hellerup, Denmark 6 March 2013 NORDEN Full year results of 2012 | 1 Our business is global tramp shipping
Slide 2: Agenda
AGENDA Group highlights Dry Cargo Financial highlights Market expectations Tankers Financial highlights Market expectations 2013 expectations Q & A NORDEN Full year results of 2012 | 2 Our business is global tramp shipping
Slide 3: Full Year Highlights
FULL YEAR HIGHLIGHTS EBITDA (USDm) Key messages 62 Better than expected finish to 50 the year - results in high end of 44 36 expectations 31 23 Group EBITDA of USD 148 mill. Return USD 52 mill. to shareholders Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Proposed dividend 3 DKK per share
Slide 4: Healthy Cash Flow and Financial Strength
HEALTHY CASH FLOW AND FINANCIAL STRENGTH Results above USDm 2010 2011 2012 Q4 2012 Y/Y % November guidance Contribution 289 239 198 57 -17% in both segments margin O/A Group -49 -53 -50 -13 -6% Group EBITDA: USD 148 mill. EBITDA Group 240 186 148 44 -21% Vessel sales 28 0 -24 -23 N/A Cash from
Slide 5: Net Asset Value – New Details on NORDENs Portfolio
NET ASSET VALUE – NEW DETAILS ON NORDENS PORTFOLIO Fleet values at 31 December 2012 Own fleet USD million Owned (active and newbuildings) Net cash Broker Other balance sheet items C arrying Market estimated amount/ value value Dry cargo Number cost Vessel CP Added value C apesize 3,0 80 68 13 2 Post
Slide 6: Dry Cargo: Very Challenging Market Environment
DRY CARGO: VERY CHALLENGING MARKET ENVIRONMENT Still healty tonnage demand – Panamax spot rate development 7.0% in 2012 20,000 The Dry Cargo market has been 15,000 much below last year 10,000 Baltic Dry Index 41% below 5,000 2011 0 Record number of deliveries in Jan Feb Mar Apr May Jun Jul A
Slide 7: Dry Financial Review 2012
DRY FINANCIAL REVIEW 2012 Dry Cargo performance above EBITDA – DRY CARGO (USDm) expectations 60 EBITDA 2012: USD 131 mill. 44 40 35 35 Operator profit on USD 22 mill. 32 30 26 despite declining markets Realised T/C earnings Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 33% above 1-year T/C market 2011 2012 54
Slide 8: Cargo Strategy
CARGO STRATEGY NORDEN Dry Cargo continued strengthening its market position in 2012 Transported volumes above target Contractually secured cargo volumes lower than target due to deselecting of contracts Transported volumes (Mt) Contractually secured cargo volumes (Mt) 64 60 66 118 57 102 50 89
Slide 9: Outlook: Declining Fleet Growth
OUTLOOK: DECLINING FLEET GROWTH Supply growth slowing down Deliveries slowing down – Dec.+Jan. deliveries down 40% from a year ago Record scrapping expected to continue – Dec.+Jan. scrapping up 20% from a year ago Dry cargo deliveries (Mill. dwt) 60 60% Expected net fleet growth: 4% - 7% 50 50
Slide 10: Continued Strong Demand Growth
CONTINUED STRONG DEMAND GROWTH Continued strong demand China dry cargo imports (Mt) in 2013 350 Iron ore trade up 6% to close to 1,200 mill. tonnes 300 Coal trade up 5% to close 250 to 1,000 mill. tonnes Strong grain season 200 expected China remains key growth 150 driver GDP growth stab
Slide 11: Iron Ore Expansion Plans
IRON ORE EXPANSION PLANS Big 5 miners expected to grow capacity by 9% annually The majority from Brazil (58 Mt) and Australia (256 Mt) Driven by record high China iron ore imports (745m tons in 2012) Top iron ore producers’ expansions plans (Mt) 58 116 45 306 237 95 175 33 60 48 Vale Rio Tinto
Slide 12: Dry Cargo – Near Term Risk Covered
DRY CARGO – NEAR TERM RISK COVERED NORDEN Full year results of 2012 | 12 Our business is global tramp shipping
Slide 13: Building Upside
BUILDING UPSIDE Over USD 150 million committed on core fleet Fleet additions: additions since Q3 • 2 x Kamsarmax newbuildings All are ECO vessels contracted at Japanese yards • 2x Kamsarmax 7+3 year TC with POP • Handymax 3+2 year TC with POP Continued investment focus in Dry Cargo • Handymax
Slide 14: Tankers: Strong Market in Q4
TANKERS: STRONG MARKET IN Q4 Increased rates following hurricane Sandy Refinery, pipeline and terminal shutdowns Strong imports to Indonesia and Australia MR: Fairly stable newbuilding prices, but 5-year old secondhand tonnage decreased roughly 18% MR West CPP (USD/day) MR East CPP (USD/day)
Slide 15: Tankers Financial Review
TANKERS FINANCIAL REVIEW Tankers performance above EBITDA – TANKERS (USDm) expectations 12 12 12 EBITDA 2012: USD 28 mill. 7 Full year realised T/C earnings 4 4 3 5% above 1-year T/C market MR: 42% above spot market -1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 The freight market was very 2011 2012 strong
Slide 16: Tankers Outlook: Low Fleet Growth
TANKERS OUTLOOK: LOW FLEET GROWTH Expect gradual improvement in rates Improving demand, but higher MR N/B deliveries Global Handysize fleet continues reduction (2012-16) – -1% p.a. Global MR fleet expansion (2012-16) – 4% p.a. Global net fleet growth 10% 8% 6% 4% 2% 0% -2% -4% -6% 2010 2011
Slide 17: Refinery Outsourcing Continues to Support Vessel Demand
REFINERY OUTSOURCING CONTINUES TO SUPPORT VESSEL DEMAND Export refinery capacity continues to expand US now net exporter – expansion continues Key MEG refineries starting up end 2013 Capacity in India proceeding faster than local demand growth Continued strong import demand in Latin Americ
Slide 18: Tankers – High Spot Exposure
TANKERS – HIGH SPOT EXPOSURE NORDEN Full year results of 2012 | 18 Our business is global tramp shipping
Slide 19: 2013: Control Downside, Build Upside
2013: CONTROL DOWNSIDE, BUILD UPSIDE Outlook Key assumptions Dry Cargo Tankers Total Guidance based on current USDm EBITDA 0 25-45 15-45 capacity and coverage Profit from 3 Only known and confirmed vessel sales vessel sales are included in CAPEX 70-80 guidance Open capacity in Tankers employed
Slide 20: 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 2013 and subsequent years are subject to uncertainty, and NORDEN’s actual results may therefore differ from the projections. Facto
Slide 21: 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.ds-norden.com NORDEN Full year results of 2012 | 21 Our business is global tramp shipping
Slide 22: Back Up
BACK UP FORWARD LOOKING STATEMENTS NORDEN Full year results of 2012 | 22 Our business is global tramp shipping
Slide 23: Executing on Strategy
EXECUTING ON STRATEGY Long term growth in challenging times Dry Cargo Tankers Joint Overall targets Growth in cargoes Tight cost control Growth in owned Higher shareholder carried of 15% on shore and at fleet to 25+ units return than peers p.a. sea Growth in contractually Daily earnings above market
Slide 24: A Leading Global Tramp Operator
A LEADING GLOBAL TRAMP OPERATOR Dry cargo Capesize Post-Panamax Panamax Handymax Handysize Total active fleet 202 42 Dry Cargo Tankers Tankers MR Handysize One of the most modern fleets in our industry Global network of offices and port captains Pools in Dry Cargo (Handysize, Post-Panamax) and
Slide 25: Asset Light Business Model
ASSET LIGHT BUSINESS MODEL Active fleet can quickly be adjusted to demand and market conditions Fleet employment based on portfolio view Significant asset upside through purchase options Flexible fleet Coverage and customer focus Capacity Employment Sale and purchase Customer relations Con
Slide 26: Last 5 Years Performance
LAST 5 YEARS PERFORMANCE Earnings per share (USD) Return on equity 16.7 47.0% 5.2 5.8 2.1 12.4% 12.9% 4.4% -6.8 -15.1% 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Cash flows, operations and investments (USDm) Dividend yield 7.1% 541 7 298 160 120 122 -57 -80 4.0% -380 -355 3.3% 3.0% 1.8% 2008
Slide 27: Financial Strength = Future Growth
FINANCIAL STRENGTH = FUTURE GROWTH Strong capital structure Net committed cash Strong focus on cash flow USDm 2012 2011 generation Adjusted Net Interest Bearing 362 240 Assets* Cash in low-risk deposit T/C obligations** -1,646 -1,748 accounts and securities New building installments less -95 -19
Slide 28: Fleet Values and NAV
FLEET VALUES AND NAV NORDEN Full year results of 2012 | 28 Our business is global tramp shipping
Slide 29: Dry Cargo Fleet Overview
DRY CARGO FLEET OVERVIEW Post- Vessel type Capesize Panamax Handymax Handysize Total Panamax Vessel in operation Owned vessels 3.0 4.0 3.0 4.0 11.0 25.0 Chartered vessels with POP 1.0 4.0 12.0 17.0 10.0 44.0 Total active core fleet 4.0 8.0 15.0 21.0 21.0 69.0 Chartered vessels without POP 0.0 0.0 46
Slide 30: Tanker Fleet Overview
TANKER FLEET OVERVIEW Vessel type MR Handysize Total Vessel in operation Owned vessels 5.0 11.0 16.0 Chartered vessels with POP 9.0 0.0 9.0 Total active core fleet 14.0 11.0 25.0 Chartered vessels without POP 10.5 6.5 17.0 Total active fleet 24.5 17.5 42.0 Vessels to be delivered Owned vessels 4.0 2
Slide 31: The Share (DNORD)
THE SHARE (DNORD) Master data Composition of shareholders 16,297 registered shareholders Shareholder capital DKK 43,000,000 owning 91.4% Number of shares and 43,000,000 shares of Approx. 40% international denomination DKK 1 ownership Classes of shares 1 Voting and ownership restrictions None A/S