Danaos Corporation · NYSE:DAC
Danaos — Investor Presentation (October 2019)
28 slides from Danaos's investor presentation, October 2019
Slide 1: World-Class Shipping, Leading-Edge Expertise
World-Class Shipping, Leading-Edge Expertise
Slide 2: Disclaimer
Disclaimer Danaos by the Numbers 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 t
Slide 3: Business Overview
Business Danaos byOverview the Numbers • One of the largest publicly-listed owners of modern containerships with long A LEADING track record in the shipping market CONTAINERSHIP OWNER AND • One of the most efficient operators in the industry with highly competitive breakeven levels OPERATOR • Manage
Slide 4: Danaos by the Numbers
Danaos by the Numbers $1.5bn 33.7% Contracted cash flow through 2028 Ownership through founder / management 4.7x $2.0bn Net debt to EBITDA Enterprise value ~$200mn 2x Annual operating cash flow Reduction in leverage from recent refinancing
Slide 5: Diverse, High-Quality Fleet Serving Blue-Chip Customers
Diverse, High-Quality Fleet Serving Blue-Chip Customers Fleet Overview1 Balanced Counterparty Concentration 11x By TEU 2,200 – 2,600 TEU 9x Others 8,500 – 9,600 TEU 12% 8x 7% 30% 3,400 TEU 3x 8% 10x 10,100 TEU 10% 4,300 – 5,500 TEU 5x 15% 18% 9x 13,100 TEU 6,400 – 6,500 TEU Market Share1, 2 Among To
Slide 6: Recent Refinancing Highly Beneficial
Recent Refinancing Highly Beneficial Significant Improvement of Financial Profile Key Provisions of Refinancing Agreements • Successfully concluded $2.2bn consensual debt refinancing with 2.0x support from key lender group Reduction in Net Leverage • Extension of significant maturities through Decem
Slide 7: Recent Refinancing Highly Beneficial
Recent Refinancing Highly Beneficial Net Debt and Adjusted EBITDA Multiple(1) 3,500 Significant reduction in leverage 7.3x 7.0x 3,000 3,167 7.2x 3,044 6.5x 2,893 2,500 2,703 6.9x 7.3x 2,431 2,000 2,263 4.9x 4.7x 1,500 1,545 1,498 1,000 500 0 2012 2013 2014 2015 2016 2017 2018 2Q 2019 LTM Net Debt Ad
Slide 8: Strong Charter Coverage through 2023
Strong Charter Coverage through 2023 Shorter charter durations limited to vessels in more liquid chartering markets Revenue-Weighted Charter Coverage(1) 97% 81% 72% 59% 41% 5% 2019 2020 2021 2022 2023 2024+ Contracted Revenue by Year mm $ by Asset Class $371 $340 $270 $203 $183 $119 2019 2020 2021 2
Slide 9: Experienced Senior Management
Experienced Senior Management Dr. John Coustas, President & CEO Iraklis Prokopakis, Senior Vice President, Treasurer & COO • CEO since 1987 • Joined Danaos in 1998 • Over 30 years of experience in the • Over 37 years of experience in the shipping shipping industry industry • Member of the board of d
Slide 10: Industry Overview
Industry Overview
Slide 11: Seaborne Containerized Trade Growth Remains Consistent
Seaborne Containerized Trade Growth Remains Consistent Global Seaborne Container Trade 250 20% 200 10% TEU mm 150 0% 100 50 (10%) 0 (20%) TEU % y-o-y Global Container Port Throughput 1,000 20% 800 10% TEU lifts, mm 600 0% 400 200 (10%) 0 (20%) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2
Slide 12: Containership Trade Routes
Containership Trade Routes Largest vessels primarily deployed on long trade routes • Units of 15,000+ TEU remain exclusively deployed on the Container Trade by Trade Lane 2018 Far East-Europe trade • Deployment of boxships sized 12-14,999 TEU continues Mainlane, to broaden notably onto the Transpaci
Slide 13: Geographic Deployment Favoring Certain Size Vessels
Geographic Deployment Favoring Certain Size Vessels Largest vessels primarily deployed on long trade routes Capacity Deployment By Route mm $ by Asset Class 100% 80% 60% 40% 20% 0% <3k TEU 3-6k TEU 6-8k TEU 8-12k TEU 12-15k TEU 15k+ TEU Mainlane E-W Non-Mainlane E-W North-South Intra-Regional Source
Slide 14: Supply Growth Primary in Largest Vessel Segments
Supply Growth Primary in Largest Vessel Segments Orderbook is concentrated in 8,000+ TEU vessels where Danaos has the greatest charter coverage Containership Orderbook, By Scheduled Delivery Year TEU, mm 1.25 1.00 0.75 0.50 0.25 0.00 2019 2020 2021 2022 12,000+ TEU 8,000–11,999 TEU 3,000–7,999 TEU 1
Slide 15: Containership Charter Rate Improving from Recent Lows
Containership Charter Rate Improving from Recent Lows 9,000 TEU gls Containership 3-yr TC Rate1 6,800 TEU Containership 3-yr TC Rate $/day, thousands $/day, thousands 50 40 40 30 30 20 20 10 10 0 0 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-19 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-19 4,40
Slide 16: Containership Asset Values Improving from Recent Lows
Containership Asset Values Improving from Recent Lows 8,800 TEU Containership 5 Year Old Secondhand Price 6,600 TEU Containership 5 Year Old Secondhand Price mm $ mm $ 140 120 120 100 100 80 80 60 60 40 40 20 20 0 0 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-19 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17
Slide 17: Financial Overview
Financial Overview
Slide 18: Historical Financials
Historical Financials Summary of Results Adjusted EBITDA mm $ mm $ $589 $588 $568 $552 $498 $452 $459 $459 $434 $432 $418 $404 $351 $310 $318 $316 2012 2013 2014 2015 2016 2017 2018 LTM 2012 2013 2014 2015 2016 2017 2018 LTM Net Leverage Adjusted Net Income 7.3x 7.0x 7.2x 6.9x 7.3x $159 $141 $147 6.
Slide 19: Second Quarter 2019 Earnings
Second Quarter 2019 Earnings Summary of Results mm $, expect per share figures Three months ended June 30 L 12 2019 2018 % yoy Months Operating Revenue $112,319 $113,466 -1.0% $458,622 Adjusted EBITDA1 $75,581 $78,294 -3.5% $316,035 Adjusted Net Income $34,255 $29,178 17.4% $146,881 Adjusted Earning
Slide 20: Danaos Capital Structure as of June 30, 2019
Danaos Capital Structure as of June 30, 2019 Commentary Capitalization Actual June Refinancing Pro-forma for Actual June mm $ 30, 2018 Adjustments refinancing 30, 2019 • 7.1 mm new shares Cash $75 $10 $85 $79 Bank Debt: (47.5%) issued to certain Royal Bank of Scotland $655 (179) $476 $467 lenders in
Slide 21: Summary
Summary
Slide 22: Summary
Summary Danaos is a market leader in the container shipping industry Strong financial support from founder and largest shareholder Refinancing significantly increases financial flexibility and reduces interest expense Strong cash flow visibility from large, modern vessels employed on longest charter
Slide 23: Appendix
Appendix
Slide 24: Substantial Fleet Employment and Coverage
Substantial Fleet Employment and Coverage Total Charter Revenue Charterer Age1 Vessel Contribution 7.1 Hyundai Honour 37% 7.1 Hyundai Respect 6.9 Maersk Enping 5x 6.8 Maersk Exeter 13,100 TEU 6.8 MSC Ambition 5% 8.1 Express Berlin 8.0 Express Rome 7.9 Express Athens 3x 14.6 Europe 10,100 TEU 14.4 Am
Slide 25: Substantial Fleet Employment and Coverage
Substantial Fleet Employment and Coverage Total Charter Revenue Charterer Age1 Vessel Contribution 15.1 ANL Tongala 14.9 Derby D 4% 11.6 YM Seattle YM Vancouver 10x 11.3 Zim Rio Grande 4,300 – 5,500 TEU 10.7 10.5 Zim Sao Paolo 10.4 Zim Kingston 10.2 Zim Monaco 10.0 Zim Dalian 9.8 Zim Luanda 18.1 Dim
Slide 26: Adjusted EBITDA
Adjusted EBITDA Reconciliation of Net Income to EBITDA and Adjusted EBITDA June 30, 2019 Last Twelve Three Months Three Months Months ended ended ended ($ In thousands) June 30, 2019 June 30, 2018 June 30, 2019 Net income / (Loss) from Continuing Operations (unadjusted) $30,138 $5,838 9,815 Adjustme
Slide 27: Adjusted Net Income
Adjusted Net Income Reconciliation of Net Income to Adjusted Net Income and Adjusted Earnings per Share June 30, 2019 Last Twelve Three Months Three Months Months ended ended ended ($ In thousands, except per share items) June 30, 2019 June 30, 2018 June 30, 2019 Net income / (Loss) from Continuing
Slide 28: Slide 28