Dampskibsselskabet Norden A/s · OMXCOP:DNORD
Dampskibsselskabet Norden A/s — FY2023 Earnings Presentation
37 slides from Dampskibsselskabet Norden A/s's earnings presentation, Feb 8, 2024
Slide 1: Presentation of Annual Results 2023
PRESENTATION OF ANNUAL RESULTS 2023 Copenhagen, Denmark, 8 February 2024
Slide 2: Forward Looking Statements
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 2023 and subsequent years are subject to uncertainty, and NORDEN’s actual results may therefore differ
Slide 3: Key Statements and Highlights Full-Year and Fourth Quarter 2023
KEY STATEMENTS AND HIGHLIGHTS FULL-YEAR AND FOURTH QUARTER 2023 3 PRESENTATION OF FYLL-YEAR RESULTS 2023
Slide 4: Key Highlights Full-Year 2023 Solid Performance
EBITDA & Net Profit KEY HIGHLIGHTS FULL-YEAR 2023 ÚSD million 1,400 (2019 – 2023) SOLID PERFORMANCE 1,200 1,159 1,000 • After an exceptional year in 2022, NORDEN in 2023 delivered the fifth best result in 800 744 679 the history of the company with a net profit of USD 400 million and with a ROIC of
Slide 5: Financial Highlights for Q4 Stable Financials in a Volatile Market
FINANCIAL HIGHLIGHTS FOR Q4 EBITDA ROIC STABLE FINANCIALS IN A VOLATILE MARKET 119 USD million 14% USD million FY 2023: 679 FY 2023: 32 USD million per cent • Continued positive financial performance in line with expectations with a net profit of USD 43 million in Q4 23. • Both business units delive
Slide 6: Market Position Adding Dry Market Exposure
MARKET POSITION Dry Cargo Position - Group (by start February 2024) ADDING DRY MARKET EXPOSURE Vessels 70 323 124 71 64 27 22 21 19 50 14 12 11 9 6 4 5 4 30 45 39 40 43 40 39 41 41 40 33 39 35 35 28 • NORDEN keeps building deferred market exposure towards the dry cargo market, 10 24 driven by the st
Slide 7: Strategy Update A Year of Execution
STRATEGY UPDATE Strategic Scorecard Target next 5 years Rolling five years A YEAR OF EXECUTION Value creation Average of min. Return on Invested Capital (ROIC) - avg. 2019-2023 23% 12% per year • In 2023 NORDEN has made strong progress on the execution of the strategic priority to bring our customer
Slide 8: Highlights for 2023 ESG Update
HIGHLIGHTS FOR 2023 ESG UPDATE Our climate commitments Strong execution on the ESG agenda in 2023 Environmental: • Lowered emissions by reducing EEOI by 9% Y/Y driven by higher fuel efficiency related to lower average speed and fuel consumption per tonnage miles. Well on-track on our mid- term targe
Slide 9: Guidance and Final Remarks
GUIDANCE AND FINAL REMARKS 9 PRESENTATION OF FYLL-YEAR RESULTS 2023
Slide 10: Guidance Visibility from High Coverage
GUIDANCE VISIBILITY FROM HIGH COVERAGE • Based on the current market outlook, NORDEN expects a net profit for 2024 in the range of USD 150-250 million (FY 2023: USD 400 million). Our full-year guidance for 2024 includes gains on sale of vessels from already signed and agreed transactions of USD 59 m
Slide 11: Final Remarks Strongly Positioned for 2024
FINAL REMARKS STRONGLY POSITIONED FOR 2024 • Solid overall financial performance in 2023 and positive results and returns in the fourth quarter despite negatively impacted by higher charter cost • Expanding our market exposure in Dry cargo for 2024 and onwards due to structurally positive market out
Slide 12: 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.norden.com Connect with us 12 PRESENTATION OF FYLL-YEAR RESULTS 2023
Slide 13: Appendix
APPENDIX Consolidated financial information and fleet data for NORDEN Market development and outlook NORDEN at a glance Our strategy Business units Total shareholder returns and business unit valuation 13 PRESENTATION OF FYLL-YEAR RESULTS 2023
Slide 14: NORDEN Financials
NORDEN FINANCIALS 14 PRESENTATION OF FYLL-YEAR RESULTS 2023
Slide 15: Financial Highlights Consolidated Financial Information
FINANCIAL HIGHLIGHTS CONSOLIDATED FINANCIAL INFORMATION Income Statement - NORDEN Group 2021 2022 2023 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Revenue - services rendered, external 603.6 854.4 940.1 1,152.3 3,550.4 1,087.5 1,419.6 1,494.9 1,307.7 5,309.7 998.0 951.3 897.4 839.0 3,685.7 Revenue
Slide 16: Segment Information - Freight Services & Trading
FINANCIAL HIGHLIGHTS CONSOLIDATED FINANCIAL INFORMATION Segment information - Freight services & Trading 2022 2023 USD million Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Revenue - services rendered, external 1,049.3 1,359.5 1,439.3 1,246.1 5,094.2 934.8 875.4 818.7 776.9 3,405.8 Revenue - services rendered, inte
Slide 17: Segment Information - Assets & Logistics
FINANCIAL HIGHLIGHTS CONSOLIDATED FINANCIAL INFORMATION Segment information - Assets & Logistics 2022 2023 USD million Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Revenue - services rendered, external 38.2 60.1 55.6 61.6 215.5 63.2 75.9 78.7 62.1 279.9 Revenue - services rendered, internal 91.7 91.5 93.8 100.0 37
Slide 18: Assets & Logistics Fleet Overview
ASSETS & LOGISTICS FLEET OVERVIEW At 31 December 2023 Dry Cargo Vessels in operation Vessels to be delivered Capesize 4 1 Panamax 15 6 Supramax 20 8 Handysize 12 6 Total 51 18 - Of which own vessels Capesize 4 0 Panamax 3 0 Supramax 1 5 Handysize 0 0 Total 8 5 Tankers Vessels in operation Vessels to
Slide 19: Assets & Logistics Capacity and Coverage
ASSETS & LOGISTICS CAPACITY AND COVERAGE Assets & Logistics – Dry Cargo Assets & Logistics – Tankers At 31 December 2023 At 31 December 2023 2024 2025 2026 2024 2025 2026 2024 2025 2026 2024 2025 2026 Own vessels Vessel days Own vessels Vessel days Capesize 1,795 1,825 1,825 MR 2,911 2,699 2,699 Pan
Slide 20: Business Unit Performance
BUSINESS UNIT PERFORMANCE 20 PRESENTATION OF FYLL-YEAR RESULTS 2023
Slide 21: Freight Services & Trading Profitable Year
FREIGHT SERVICES & TRADING PROFITABLE YEAR RESULT PER VESSEL DAY USD / day • Freight services & Trading reported continued profitability in 2023 with a profit of USD 3,500 3,297 133 million compared to USD 550 million in FY 2022. 3,000 • Both market segments reported positive earnings, with Tanker g
Slide 22: Assets & Logistics Focus on Capturing Values
ASSETS & LOGISTICS FOCUS ON CAPTURING VALUES DKK NAV PER SHARE (END Q4) Pay-out of DKK 125 per share in dividends since August 2022 500 446 422 • Assets & Logistics reported another strong year with a with a net profit of USD 268 400 377 381 360 353 347 million in FY 2023, including profit from sale
Slide 23: Asset & Logistics Extensive Optionality in Volatile Environment
ASSET & LOGISTICS EXTENSIVE OPTIONALITY IN VOLATILE ENVIRONMENT • NORDEN’s extensive optionality provides potential value upside in an environment with increasing interest rates, increased new building prices and near-term lower visibility on freight rates due to the macro-economic uncertainties. •
Slide 24: Market Developments and Outlook
MARKET DEVELOPMENTS AND OUTLOOK 24 PRESENTATION OF FYLL-YEAR RESULTS 2023
Slide 25: Markets Dry and Tanker Market in 2023
MARKETS DRY AND TANKER MARKET IN 2023 5-year secondhand asset values (dry cargo & product tanker) USD million 60 Strong demand from China in 2023 in Dry cargo 50 • The global demand continued the strong development into Q4, with increasing demand 40 from China and RoW leading to longer distances and
Slide 26: Markets Dry Cargo Market
MARKETS DRY CARGO MARKET Million tonnes Global volumes transported (30-day moving average) 14 13.5 13 Strong demand from China – lower congestion led to decrease in rates 12.5 • Global volumes in 2023 increased by around 4% Y/Y driven by continued weak import 12 to RoW of –2% Y/Y and growth of 12% Y
Slide 27: Markets Tanker Market
MARKETS TANKER MARKET Clean products and crude oil in transit (number of barrels in transit compared to January 2020 in %) 130% 120% Positive tanker market expected in 2024, but with high volatility • The product tanker market is expected to stay attractive in 2024, supported by the 110% current mar
Slide 28: NORDEN at a Glance
NORDEN AT A GLANCE 28 PRESENTATION OF FYLL-YEAR RESULTS 2023
Slide 29: NORDEN at a Glance
NORDEN AT A GLANCE 2005: NORDEN establishes Norient 2021: Product Pool with pool-partner Interorient Navigation NORDEN celebrates 150 years of sailing the seven seas 1923: Company Ltd., Cyprus NORDEN’s first motor vessel, NORDBO is delivered 2013: 2023: 1871: 1973: NORDEN finalises its first NORDEN
Slide 30: We Enable Smarter Global Trade
WE ENABLE SMARTER GLOBAL TRADE More than Tonnes of cargo carried Data points processed daily We are 475 130 m 9.4 bn 52 vessels operated in 2023 to support decisions nationalities at NORDEN 30 PRESENTATION OF FYLL-YEAR RESULTS 2023
Slide 31: NORDEN Strategy
NORDEN STRATEGY Macrotrends affecting shipping NORDEN strategy Geopolitical complexity Customer-focused freight services, logistics and climate solutions Market volatility Asset-light business model Digitalisation High-performing organisation Data, analytics and risk management Decarbonisation 31 PR
Slide 32: Our Business Model
OUR BUSINESS MODEL Founded in 1871 and with 14 offices across 6 continents and close to 500 employees ashore, NORDEN is a global provider of ocean-based freight From shipper Freight Services and Port logistics To customer services for dry and liquid bulk and project cargo of all sizes. We integrate
Slide 33: Business Model Agile Capacity Management Model
BUSINESS MODEL AGILE CAPACITY MANAGEMENT MODEL SELECTED CUSTOMERS AND PARTNERS DRY CARGO PRODUCT TANKERS MULTIPURPOSE HANDYSIZE HANDYSIZE 36,000 - 40,000 DWT 10,000 - 30,000 DWT 28,000 - 39,000 DWT SUPRAMAX PANAMAX MR 46,000 - 52,000 DWT 50,000 - 64,000 DWT 75,000 - 93,000 DWT CAPESIZE 150,000-210,0
Slide 34: Shareholder Returns and Valuation
SHAREHOLDER RETURNS AND VALUATION 34 PRESENTATION OF FYLL-YEAR RESULTS 2023
Slide 35: Highlights for Full-Year 2023 Shareholder Cash Distribution
HIGHLIGHTS FOR FULL-YEAR 2023 SHAREHOLDER CASH DISTRIBUTION CASH DISTRIBUTED TO SHAREHOLDERS (USD million) incl. proposed dividends and announced share buy-backs USD million 800 • NORDEN for the full-year 2023 propose a final dividend of DKK 10 per share, which accumulated with the interim dividends
Slide 36: Share Price Performance Annualised Total Shareholder Returns
SHARE PRICE PERFORMANCE ANNUALISED TOTAL SHAREHOLDER RETURNS OF 40% PER YEAR ~ USD 1.1 billion returned since 2019 (When including interim dividends and share buyback programme) DKK 800 Total shareholder return since 2019 (As of 31 December 2023) 700 600 500 400 300 200 100 0 Jan-19 Jul-19 Jan-20 Ju
Slide 37: Share Price Valuation
SHARE PRICE VALUATION ASSETS & LOGISTICS FREIGHT SERVICES & TRADING NAV-based valuation Earnings-multiple based valuation Per 31/12/2023 USDm Market value of own vessels 992 TOTAL VALUE Market value of T/C & Cover portfolio 364 Avg. historical margin per day since 2019 683 OF NORDEN (excl. full-year
Dampskibsselskabet NORDEN — FY2023 Earnings Presentation on 6ix