Slide 1: Investor Presentation Q1 2020 Result Presentation
Investor Presentation Q1 2020 Result Presentation Hamburg, 15 May 2020
Slide 2: Opening Remarks
Opening Remarks Personal health of all land based staff and seafarers remains our number one priority 1 Current situation Q1 volumes and rates in line with expectation, but first clearer effects on volumes can already be seen in Q2 We have launched a Performance Safeguarding Program (PSP) including
Slide 3: Current situation
1 Current situation Good start to the year, but COVID-19 is increasingly affecting the shipping industry – magnitude and duration is difficult to assess OUR ADDITIONAL OUR TEAM OUR BUSINESS MEASURES The safety of all of our employees is Q1 closed with a solid operational Performance Safeguardi
Slide 4: Solid operational performance in Q1 with only minor COVID-19 related effects
2 Financials Solid operational performance in Q1 with only minor COVID-19 related effects – results negatively impacted by bunker volatility Operational KPIs P&L effects Volume Volume grew by 4.3% YoY compared to PY Revenue Revenue increased by +5,9% YoY based on higher 3,053 Weakening ex-Asia relat
Slide 5: Good revenue development driven by higher volumes and rates
2 Financials Good revenue development driven by higher volumes and rates – extraordinary charges weigh on Group profit Revenue [USD m] EBITDA [USD m] Q1 revenue above previous year’s + 5.9% level as a result of higher transport Margin 16.0% 14.0% volumes (+4.3%) and slightly higher 3,684 3,478 - 6.9
Slide 6: Transport volume increased by 4.3%
2 Financials Transport volume increased by 4.3% – Declining Far East trade more than offset by Latin America and Middle East trades Transport volume development by trade [TTEU] +4.3% Q1 2019 2,929 3,053 2,929 Atlantic 11 481 470 Transpacific 22 472 450 Far East -26 567 Middle East 41 594 Intra-Asia
Slide 7: Freight rates increased by 1.4% YoY; bunker price up 23.0%
2 Financials Freight rates increased by 1.4% YoY to 1,094 USD/TEU in Q1 2020, while average bunker price increased significantly by 23.0% YoY Freight rate [USD/TEU] vs. Bunker price development [USD/mt] Average freight rate 1,094 1,084 1,079 1,063 1,062 +1.4% 523 Average bunker price 434 425 416 390
Slide 8: Bunker expenses per unit rose by 40%
2 Financials Bunker expenses per unit rose by 40% driven by high bunker costs at the start of the year and a rapid price decline thereafter Bunker expenses per TEU Average Bunker price [USD/TEU] Bunker stock [USD/mt] +40.1% devaluation 21 USD/TEU 700 214 600 153 523 Ø HLAG bunker price 500 425 434 Q
Slide 9: Transport expenses per unit increased by 5.0% YoY
2 Financials Transport expenses per unit increased by 5.0% YoY, driven by higher bunker costs – ex bunker unit cost decreased by 1.2% YoY Transport expenses per unit [USD/TEU] “Handling and haulage” costs decreased due to less inland business Q1 2019 1,015 and positive FX effects Costs for “Equipmen
Slide 10: Interest burden clearly reduced – extraordinary valuation effects
2 Financials Interest burden clearly reduced – extraordinary valuation effects weigh on financial result Extraordinary interest result items [USD m] HLAG Bond trading 110 105 Q1 2019 interest result -121 -14 pp 100 95 90 Rate & debt volume reduction 20 85 80 Comments Bond option valuation -28 Embedd
Slide 11: Free cash flow clearly positive; liquidity reserve solid
2 Financials At USD 302 m, free cash flow was again clearly positive in Q1 2020 and liquidity reserve remained very solid at USD 1.2 bn Cash flow Q1 2020 [USD m] Operating Investing Financing cash flow cash flow cash flow 419 -118 154 552 152 -150 1,215 1,159 -140 -16 185 -98 400 -91 -3 -128 585 517
Slide 12: Net leverage unchanged at 3.0x
2 Financials Net leverage remains unchanged at 3.0x, while cash and gross financial debt increased due to a USD 400 m draw down of RCF Equity base [USD m] Net debt [USD m] 40.9% Equity ratio 40.1% 7,180 Financial Debt 7,584 3.0 Net Debt / EBITDA 3.0x 7,430 7,469 6,605 6,554 31 December 2019 31 March
Slide 13: Corona Virus heavily affecting the world's economy and container shipping
3 Market update The Corona Virus is heavily affecting the world‘s economy and therefore also the container shipping industry in 2020e World Trade Volume vs. Global Container Volume Growth [%] The fallout from the COVID-19 outbreak can strongly be felt in World trade volume Container volume growth 20
Slide 14: Differences to the 2008/2009 crisis: record low orderbook
3 Market update However, there are important differences to the 2008/2009 crisis – as we have today a record low orderbook and hardly any new orders… Orderbook-to-fleet Newly placed orders [TEU m, %] [TEU m] Orderbook 61% Vessels > 13,999 TEU 2.0 2.2 1.8 6.5 50% Share of world fleet 1.1 1.2 6.0 0.8
Slide 15: Adjusting capacity to the lower demand
3 Market update …as we adjust capacity to the lower demand and… Carrier capacity measures on major trades Net capacity growth in 2020e Headhaul trade lane capacity & blank sailings on Far East 5.0% 100% 18.0% 26.0% 19.0% -1.5% -1.5% 1.9% April May June Headhaul trade lane capacity & blank sailings o
Slide 16: Ready to scale up again when demand returns
3 Market update …will be ready to scale up again quickly when demand returns Supply / Demand Balance 9.6% 8.0% 6.3% 5.6% 4.8% 3.9% 3.7% 1.4% 4.5% 3.8% 1.2% 0.8% -0.4% -10.6% 2014 2015 2016 2017 2018 2019e 2020e 2021e Demand Supply 16 Source: Drewry (Forecaster 1Q20), Seabury (December 2019), Clarkso
Slide 17: Performance Safeguarding Program (PSP) launched
4 Way forward Performance Safeguarding Program (PSP) launched to protect against downside risk of COVID-19 and to safeguard earnings and liquidity Cost savings Investment Financial Government prioritization contingency support Substantial capacity No commitments for vessel Draw-down of USD 400
Slide 18: Financial contingency measures – available liquidity of USD ~1.9 bn
4 Way forward Financial contingency measures – Increase of available liquidity to USD ~1.9 bn Available liquidity in May [USD m] On top of the reported liquidity ~1,900 of USD ~1.2 bn, we have additional liquidity available in ~275 the amount of USD ~700 m ~495 (ABS program, committed ~220 JOL, vess
Slide 19: Earnings outlook substantiated – considerable uncertainties
4 Way forward Earnings outlook substantiated – subject to considerable uncertainties due to COVID-19 pandemic Outlook is subject to considerable uncertainty due to Updated Outlook COVID-19 and based on the FY 2019 2018 premise that the pandemic will for 2020 peak in the second quarter and give way t
Slide 20: Our priorities for the coming months
4 Way forward Our priorities for the coming months Ensure the safety of our employees and fully support our customers to safeguard uninterrupted supply chains Focus on implementation and execution of the Performance Safeguarding Program and successfully implement necessary capacity and cost cutting
Slide 21: Appendix
Appendix Appendix
Slide 22: Equity ratio of 40.1% and gearing of 87.7%
A Appendix Hapag-Lloyd with an equity ratio of 40.1% and a gearing of 87.7% Balance sheet [USD m] Financial position [USD m] million USD 31.3.2020 31.12.2019 million USD 31.3.2020 31.12.2019 Assets Financial debt 7,584.2 7,179.6 Non-current assets 15,379.7 15,501.0 Cash and cash equivalents 1,030.1
Slide 23: Positive EBIT of USD 176.1 m in Q1 2020
A Appendix Hapag-Lloyd with positive EBIT of USD 176.1 m in Q1 2020 Income statement [USD m] YoY million USD Q1 2020 Q1 2019 change Revenue 3,684.0 3,477.6 6% Transport expenses –2,914.4 –2,660.2 10% Personnel expenses –190.5 –189.3 1% Depreciation, amortisation and impairment –341.1 –312.9 9% Other
Slide 24: Well balanced maturity structure of financial liabilities
A Appendix Well balanced maturity structure of financial liabilities Financial Debt Profile as per 31 March 20201), [USD m] 1,568 Facility 31 March 2020 [USD m] 1,499 1,436 Vessel Financings 3,264 2) 180 Container Financings 1,207 1,189 Total Vessel & Container 4,471 1,060 EUR Bond 2024 493 1,032 To
Slide 25: Hapag-Lloyd's shareholder structure
A Appendix Hapag-Lloyd`s shareholder structure Shareholders‘ agreement/ Controlling shareholders 3.6% Kühne Maritime GmbH / Kühne Holding AG 10.2% CSAV Germany Container Holding GmbH HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH 30.0% Qatar Holding Germany GmbH The Public
Slide 26: Share price development
A Appendix Share price development Performance since 1 January 2018 Indexed Price Frankfurt Stock Exchange / 600 Stock Exchange Hamburg Stock Exchange 500 Regulated market Market segment (Prime Standard) 400 ISIN / WKN DE000HLAG475 / HLAG47 300 Ticker Symbol HLAG 200 Nov/16 100 Primary listing 6 Nov
Slide 27: Bond trading
A Appendix Bond trading 110 100 Impacted by general uncertainty in the 95.4 90 financial markets 80 70 HL EUR 6.75 % 2022 HL EUR 5.125% 2024 EUR Bond 2024 EUR Bond 2022 Listing Open market of the Luxembourg Stock Exchange (Euro MTF) Volume EUR 450 m EUR 450 m ISIN / WKN XS1645113322 XS1555576641 / A
Slide 28: Financial Calendar 2020
Financial Calendar 2020 19 February 2020 Preliminary Financials 2019 20 March 2020 Annual Report 2019 15 May 2020 Quarterly Financial Report Q1 2020 05 June 2020 Virtual Annual General Meeting 2020 14 August 2020 Half-year Financial Report 2020 13 November 2020 Quarterly Financial Report 9M 2020 28
Slide 29: Disclaimer
Disclaimer Forward-looking statements This presentation contains forward-looking statements that involve a number of risks and uncertainties. Such statements are based on a number of assumptions, estimates, projections or plans that are inherently subject to significant risks, as well as uncertainti
Slide 30: Hapag-Lloyd Investor Relations
Hapag-Lloyd Investor Relations Ballindamm 25 20095 Hamburg Tel: +49 (40) 3001-2896 ir@hlag.com All publication documents can be found here: https://www.hapag-lloyd.com/en/ir.html 30