Wallenius Wilhelmsen Asa · OSL:WAWI
Wallenius Wilhelmsen Asa — Q3 2024 Earnings Presentation
28 slides from Wallenius Wilhelmsen Asa's earnings presentation, Oct 30, 2024
Slide 1: Wallenius Wilhelmsen ASA Q3 2024
Wallenius Wilhelmsen ASA Q3 2024
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking information and statements relating to the business, financial performance and results of the Group, and/or the industry and markets in which it operates. Forward-looking statements are statements that are not historical facts and may be identifi
Slide 3: Wallenius Wilhelmsen – highlights Q3 2024
Wallenius Wilhelmsen – highlights Q3 2024 Wallenius Wilhelmsen delivers another strong quarter with Q3 adjusted EBITDA of USD 503m Shipping and Government segments adjusted EBITDA improved QoQ and YoY Logistics declined QoQ mainly due to seasonal effects on volumes and product mix Solid progress in
Slide 4: All three segments continue to deliver in Q3
All three segments continue to deliver in Q3 Shipping Logistics Government 1.0 USD billion in revenues 416 USDm of Adj. EBITDA 294 USD million in revenues 47 USDm of Adj. EBITDA 117 USD million in revenues 49 USDm of Adj. EBITDA Market leader with unrivaled Customers’ preferred partner for Dedicated
Slide 5: Trend of strong cash flow generation and high cash conversion continues
Trend of strong cash flow generation and high cash conversion continues LTM1 operating cash flow and cash conversion2 LTM operating cash flow in million USD Cash conversion in % 97% 98% 99% 98% 92% 93% 92% 85% 1 866 80% 1 810 1 788 78% 1 736 1 721 1 718 75% 73% 72% 72% 1 495 1 297 985 809 819 623 51
Slide 6: Auto production is realigned with demand, still below 2019 levels
After a year of inventory build-up, auto production is realigned with demand which is still below 2019-levels Global LV sales, production and surplus/deficit in supply sales production surplus/deficit 94 93.3 92 91.4 92.6 90 89.3 89.0 88.1 90.8 88 86.6 88.6 85.5 86 87.1 87.0 84 81.6 82 Million units
Slide 7: Deep-sea volumes continue to grow despite softening sentiment in the auto segment
Deep-sea volumes continue to grow despite softening sentiment in the auto segment Deepsea volumes X% YoY growth Regional volumes 2023 2024 2025 2026 CAGR +2.7% 2023-2026 91 +2.8% 89 +1.3% 2019 88 volume: 87 86 25.0 23.8 23.9 23.0 23.0 21.7 21.2 21.3 21.4 21.8 21.9 21.8 21.7 17% 4% 21.2 18% 17% 19.7
Slide 8: QoQ growth in Chinese exports to all regions except South America
QoQ growth in Chinese exports to all regions except South America Chinese LV exports split by destination excluding Russia 000’ units +27.1% 7% 1 210 1 201 QoQ YoY Europe 1 122 growth growth 1 100 Other Asia 1 070 North America1 348 990 971 South America and Caribbean 945 324 884 273 8% 39% Others O
Slide 9: Agenda
Agenda 1. Shipping update 2. Logistics update 3. Sustainability update 4. Financial update 5. Prospects & Q&A 9
Slide 10: Continued improvement in rates and earnings on stable volumes
Continued improvement in rates and earnings on stable volumes Shipping services volume and cargo mix Estimated net TCE earning/day1 and net freight rate/CBM 28 % 60 61 25 % 25 % 23 % 59 57 57 55 56 57 54 55 54 51 53 57 +2% QoQ -6.7 % YoY 55 56 46 53 53 53 15.3 15.0 52 15.1 15.1 14.9 50 14.4 14.2 14.
Slide 11: For 2025, more than 70% of volumes expected to be locked in
For 2025, more than 70% of volumes are expected to have been locked in at prevailing market rates Schedule of contract renewals as share of 2023 volumes Renewed in 2023 To be renewed in 2025 Renewed in 2024 To be renewed in 2026 85% 15% 75% 70% 15% • Finalizing the renewal of contracts for 2025. Exp
Slide 12: H&H volumes expected to improve from 2025 despite current softness
H&H volumes expected to improve from 2025 despite current softness Wallenius Wilhelmsen high and heavy volumes (CBM)1 -28% -18% • Volumes are at the lowest level since Q2 2020, but stronger rates offsets most of the negative effect from softer volumes • Weak demand from construction, sluggish econom
Slide 13: Only one PCC vessel added to the orderbook in Q3
Only one PCC vessel* was added to the orderbook in Q3 while significant yard capacity is reserved throughout 2028 by other segments Ordering activity in million CGT at PCC yards Compensated gross tonnage Container Gas Tanker Bulk PCC/RoRo Offshore Other 1.21 1.11 1.00 0.47 0.91 0.66 0.63 0.28 0.39 0
Slide 14: Agenda
Agenda 1. Shipping update 2. Logistics update 3. Sustainability update 4. Financial update 5. Prospects & Q&A 14
Slide 15: Slower pace in Logistics from seasonality, inventory increases and reduced biosecurity revenue
Slower pace in Logistics from seasonality, inventory increases and reduced biosecurity revenue US Auto and Terminals volumes Revenue & EBITDA margin Million units • Volume down 8% QoQ from 136 137 146 146 138 seasonality and OEM production cuts Auto 5.1 4.8 5.0 15% 15% +1% 14% 15% 12% • Inventories
Slide 16: Agenda
Agenda 1. Shipping update 2. Logistics update 3. Sustainability update 4. Financial update 5. Prospects & Q&A 16
Slide 17: Committed to safe and sustainable operations
Committed to safe and sustainable operations LTIF1 up QoQ in Logistics and Shipping Reduced CO2e emission intensity YoY and QoQ2 CO2e intensity target CO2 emitted per tonne kilometre in gram Q2-24 Q3-24 40 -14.8% LTIF Shipping -4.2% per million man-hours 0.21 1.12 exposed 30 20 LTIF Logistics 30.0
Slide 18: Agenda
Agenda 1. Shipping update 2. Logistics update 3. Sustainability update 4. Financial update 5. Prospects & Q&A 18
Slide 19: Financial highlights – Q3 2024
Financial highlights – Q3 2024 USDm, except per share, per cent and multiples Q2-24 Q3-24 Financial targets * ROCE > 8% Revenue 1 359 ➔ 1 353 +1.3 19.5% +0.6 Adj. EBITDA 507 ➔ 503 Equity ratio > 35% Operating cash flow 393 554 -3.8 34.4% -1.3 Cash 1 641 1 829** Leverage ratio < 3.5x -0.4 Net deb
Slide 20: Q3 Segment performance
Q3 Segment performance USDm, unless otherwise noted Revenue Adj. EBITDA Comments Adj. EBITDA EBITDA margin 1 311 1 281 1 255 1 359 1 353 478 507 503 • A stable quarter with no new major operational issues 454 438 Group • Revenue and adjusted EBITDA up YoY despite lower volumes 36% 35% 37% 37% 35% li
Slide 21: Revenue and adjusted EBITDA marginally down QoQ
Revenue and adjusted EBITDA marginally down QoQ -7 • Revenue down USD 7m QoQ 9 • Positive effects from rates and surcharges QoQ 7 -21 0 9 • Increased activity in Government services USDm 1 359 -10 1 353 • Lower Logistics activity pulled down • Adj. EBITDA1 marginally down QoQ Revenue Volume effect R
Slide 22: Cash on hand increased by USD 189m on solid operating cash flow
Cash on hand increased by USD 189m on solid operating cash flow ahead of October dividend payment Comments +15% (16) 0 98 (68) 21 (50) • Q3 operating cash flow of USD 554m, (148) representing cash conversion of ~110%1 471 (49) 1 829 (14) • Net CAPEX items include investments related to 1 641 newbuil
Slide 23: The group maintains a robust balance sheet and strong liquidity position
The group maintains a robust balance sheet and strong liquidity position Balance Sheet per end Q3-24 Debt Maturity Profile Comments USD billion USD million • Equity ratio stands at 34.4% 678 617 • Net debt down to USD 1.5bn on debt Assets Equity & 191 repayments and cash from operations Liabilities
Slide 24: Continuous focus on upstreaming cash to ASA for dividends and investments
Continuous focus on upstreaming cash to ASA for dividends and investments Wallenius Wilhelmsen ASA Bond debt: USD 405m (Unsecured) Group cash: USD 1.8bn / ASA cash: USD 574m Dividends paid on 10 October: USD 452m ARC EUKOR WW Ocean WW Solutions (100% owned) (80% owned) (100% owned) (100% owned) Debt
Slide 25: Agenda
Agenda 1. Shipping update 2. Logistics update 3. Sustainability update 4. Financial update 5. Prospects & Q&A 25
Slide 26: Prospects
Prospects 2024 market balance: The RoRo shipping market continues to remain tight despite the addition of new tonnage and softer demand for H&H cargoes. The key positive demand driver remains strong growth in auto exports out of Asia. Further, we see solid demand for Logistics and Government service
Slide 27: Q+A
Q+A 27
Slide 28: Thank you!
W Wallenius Wilhelmsen Thank you!