Zim Integrated Shipping Services Ltd. · NYSE:ZIM
Zim Integrated Shipping Services — Q3 2022 Earnings Presentation
18 slides from Zim Integrated Shipping Services's earnings presentation, Nov 16, 2022
Slide 1: Q3 2022 Financial Results
Q3 2022 FINANCIAL RESULTS November 16, 2022
Slide 2: Disclaimer
Disclaimer | Forward-Looking Statements | | Adjusted EBITDA | This presentation contains or may be deemed to contain forward-looking statements (as defined in the U.S. Private Net income (loss) adjusted to exclude financial expenses (income), net, income Securities Litigation Reform Act of 1995 and
Slide 3: Q3 2022 highlights
Q3 2022 highlights Financial highlights 2022 guidance Market developments Summary Q3 2022 highlights Q3 2022 dividend Revised 2022 full year guidance* Commitment to returning capital to shareholders $2.95/share Adjusted EBITDA $7.4 – 7.7 billion (~$354 million) Adjusted EBIT $6.0 – 6.3 billion ~30%
Slide 4: 9M & Q3 2022 – financial results remain strong through normalization
Q3 2022 highlights Financial highlights 2022 guidance Market developments Summary 9M & Q3 2022 – financial results remain strong through normalization YoY Prior period Revenues $10.4 Bn +43% Adjusted EBITDA $6.6 Bn +55% Adjusted EBITDA 9M.2022 and EBIT margins 58% and 51% Net income $4.2 Bn +43% 6
Slide 5: Preparing for the "new normal": building commercial and operational resilience
Q3 2022 highlights Financial highlights 2022 guidance Market developments Summary Preparing for the “new normal”: building commercial and operational resilience Diversification Operational excellence Commercial differentiation Flexibility Growth drivers New markets, new services, and ecommerce Adapt
Slide 6: Strong results across key operational and financial indicators
Q3 2022 highlights Financial highlights 2022 guidance Market developments Summary Strong results across key operational and financial indicators* Operational Q3-22 9M-22 Cash flow Q3-22 9M-22 Balance Sheet 30-9-22 Carried volume 842 2,557 Free cash flow 1,626 4,748 Total debt** 4,700 (K TEUs) (-5%)
Slide 7: Strong earnings and low leverage ratio
Q3 2022 highlights Financial highlights 2022 guidance Market developments Summary Strong earnings and low leverage ratio $9,075 $8,930 $8,310 $6,597 $4,767 $2,949 3.4x $1,759 $1,036 $414 $465 $620 0.0x Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 LTM Adj. EBITDA ($ Mn) Net Lever
Slide 8: Solid execution support strong results and profitability; record 9M results
Q3 2022 highlights Financial highlights 2022 guidance Market developments Summary Solid execution support strong results and profitability; record 9M results +43% XX% - margin +55% +3% -7% 58% 63% Adjusted 66% 60% Revenue 3,136 3,228 7,262 10,373 EBITDA 2,080 1,934 4,236 6,568 ($Mn) ($Mn) +50% +43%
Slide 9: Volume breakdown by geographic trade zone (K TEU)
Q2 2022 highlights Financial highlights 2022 guidance Market developments Summary Volume breakdown by geographic trade zone (K TEU) 2,623 2,557 145 179 688 807 456 388 261 314 884 48 842 61 243 Latin America 265 144 1,073 Intra-Asia 109 869 87 Atlantic 113 Cross-Suez 362 294 Pacific Q3.2021 Q3.2022
Slide 10: Continued significant cash generation
Q3 2022 highlights Financial highlights 2022 guidance Market developments Summary Continued significant cash generation -2,949 5,041 4,748 -1,123 59 -101 634 -293 Cash Flow from CAPEX, Net Free Cash Dividend Debt Service Financing Net Change Net Change in Operations* Flow Initiatives in ST Loans Tot
Slide 11: Revised 2022 full-year guidance
Q2 2022 highlights Financial highlights 2022 guidance Market developments Summary Revised 2022 full-year guidance Adjusted Adjusted $7.4 – 7.7 Bn $6.0 – 6.3 Bn EBITDA EBIT Steeper decline in spot freight rates Flat volume compared Slightly better charter Contract rates adjusted to 2021 rates Softer
Slide 12: Supply/demand balance and falling freight rates create challenging outlook
Q2 2022 highlights Financial highlights 2022 guidance Market developments Summary Supply/demand balance and falling freight rates create challenging outlook; effective capacity will be key Supply/Demand Balance SCFI Comprehensive Index (2019-2022) 30M 20% 8.6% 20M 7.6% 8.1% 6.3% 6.7% 10% 4,536 5.8%
Slide 13: Charter market also normalizing – rates and duration drop
Q2 2022 highlights Financial highlights 2022 guidance Market developments Summary Charter market also normalizing – rates and duration drop Charter Hire Rates Charter activity Charter period # of deals Source: Alphaliner, October 27, 2022 Source: Clarkson’s Platou, November 4 ,2022 13
Slide 14: New industry dynamics may impact effective supply growth vs. orderbook
Q2 2022 highlights Financial highlights 2022 guidance Market developments Summary New industry dynamics may impact effective supply growth vs. orderbook Traditional view New dynamics Lacking IMO 2023 – Actual newbuild Port congestion landside slow infrastructure steaming deliveries vs. economic grow
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Slide 16: Build commercial and operational resilience for "new normal"
Q3 2022 highlights Financial highlights 2022 guidance Market developments Summary Build commercial and operational resilience for “new normal” Identify growth engines Secure competitive & cost Diversify effective commercial newbuild presence capacity Maintain strong balance sheet while share profits
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Slide 18: Reconciliation of net income to Adjusted EBITDA and Adjusted EBIT
Reconciliation of net income to Adjusted EBITDA and Adjusted EBIT ($ in Mn) Q3’22 Q3’21 Q3’20 RECONCILIATION OF NET INCOME TO ADJUSTED EBIT Net income 1,166 1,463 144 Financial expenses, net 30 38 41 Income taxes 348 358 4 Operating income (EBIT) 1,544 1,859 189 Non-cash charter hire expenses (1)(2)
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