Slide 1: Presentation of Q3 Results
PRESENTATION OF Q3 RESULTS Vilhelm Már Thorsteinsson, CEO Egill Örn Petersen, CFO
Slide 2: This is Eimskip
•THIS IS EIMSKIP Eimskip is a leading transportation company in the North Atlantic providing container and reefer liner services with connections to international markets and is specialized in worldwide freight forwarding services with focus on frozen and chilled commodities ABOUT SUSTAINABILITY KPI
Slide 3: Key Highlights for Q3 2020
KEY HIGHLIGHTS FOR Q3 2020 1 Solid EBITDA performance in Q3 • Good volume in liner and reefer forwarding services • Benefitting from streamlining measures 2 Improved profitability of container liner services • Good volume in export from Iceland and Faroe Islands • Leveraging on a more cost-efficient
Slide 4: Operating Activities
OPERATING ACTIVITIES
Slide 5: Sustainability at Eimskip
SUSTAINABILITY AT EIMSKIP Eimskip has for over a century offered reliable transportation services and the company’s vision is to reach excellence in transportation solutions and services. Eimskip focuses on creating shared value for its shareholders, customers, employees, society and other stakehold
Slide 6: Sustainability is an On-going Journey
SUSTAINABILITY IS AN ON-GOING JOURNEY Recent incident a harsh reminder of the importance of thorough ESG risk assessment ON-GOING SUSTAINABILITY JOURNEY ESG RISK PROFILE* SUSTAINABILITY GOVERNANCE STRUCTURE RECENT ACTIONS EXAMPLES OF PROJECTS ON THE ACTION PLAN • Additional resources applied to the
Slide 7: Environmental KPI's – QoQ Development
ENVIRONMENTAL KPI‘S – QoQ DEVELOPMENT Continued progress towards less environmental impact TOTAL ENERGY CONSUMPTION TOTAL WASTE GENERATED 270.000.000 350.000 300.000 260.000.000 -18.6% 250.000 250.000.000 200.000 kWh KG -9.8% 240.000.000 150.000 100.000 230.000.000 50.000 220.000.000 - Q3 2019 Q3 20
Slide 8: Container Sailing System
CONTAINER SAILING SYSTEM Vessel sharing agreement with Royal Arctic Line (RAL) in full operation The new 2150 TEUs vessels and Co-operation with RAL • Brúarfoss, the second of the two newbuildings, into service on November 17th • Net inflow from financing of EUR 7.3m upon delivery of the vessel in O
Slide 9: Financial Results
FINANCIAL RESULTS
Slide 10: Development in Liner Services
DEVELOPMENT IN LINER SERVICES Increased volume and cost reduction key drivers of performance in Q3 Volume (tons ‘000) VOLUME IN Q3 • Import to Iceland down by 11.1% YoY, gradually KOMIN picked up towards the end of the quarter • Export from Iceland increased by 13.5% YoY, which is above expectations
Slide 11: Development in Forwarding Services
DEVELOPMENT IN FORWARDING SERVICES Streamlining measures driving performance in Q3 Volume (Teus ‘000) VOLUME IN Q3 • Reefer forwarding volume in line with last year • Increase in outbound cargo handling by 4.3%, which is higher margin volume than inbound cargo Q3 -5.3% • Dry forwarding volume down 2
Slide 12: Expense Bridge
EXPENSE BRIDGE Streamlining measures positively affecting salaries and admin expenses EXPENSE BRIDGE Q3 Q3 • Price increases in international forwarding markets affecting 3rd party expenses • Capacity reduction and price increases by the big carriers (Deep sea lines) • Offset by higher revenues in e
Slide 13: Income Statement Q3
INCOME STATEMENT Q3 Profitability improves with realization of streamlining measures Q3 EUR thousand Q3 2020 Q3 2019 Change % • Revenue decrease by 1.2% • Volume and forwarding rates positively affecting revenue Revenue 170,378 172,522 (2,144) (1.2%) • Decrease in BAF due to lower bunker prices Expe
Slide 14: EBITDA Bridge Q3
EBITDA BRIDGE Q3 COVID-19 effect on cruise agency and ferry operation in high season EBITDA BRIDGE BY BUSINESS ACTIVITY EBITDA BRIDGE BY OPERATING ITEMS 14
Slide 15: Balance Sheet
BALANCE SHEET Dettifoss increasing fixed assets but offset by delivery of sold vessels EUR thousand 30.9.2020 31.12.2019 Change % 9M Non-current assets 385,467 355,712 29,755 8.4% • Fixed assets increased with delivery of Dettifoss to Eimskip Fixed assets 297,585 292,470 5,115 1.7% • Brúarfoss will
Slide 16: Development of Loans and Borrowings
DEVELOPMENT OF LOANS AND BORROWINGS Strong cash flow used for down payments on revolver facilities 9M • New borrowing mainly related to the financing of new vessel Dettifoss or EUR 23.4m • Positive cash flow from operation, sale of assets and finalization of Dettifoss funding used to pay down revolv
Slide 17: Lease Liabilities (IFRS 16)
LEASE LIABILITIES (IFRS 16) Change in lease liabilities mainly due to new logistics center Tromsøterminalen in Norway IFRS 16 LEASE LIABILITIES BRIDGE ANALYSIS 9M • Leases of buildings account for majority of lease liabilities • Mostly long-term contracts • Tromsøterminalen accounting for almost all
Slide 18: Net Debt and Leverage Ratios
NET DEBT AND LEVERAGE RATIOS Operational leases increasing total debt 9M EUR million • Meaningful reduction in net debt excluding operational leases • Cash from operation and sale of assets used to pay down credit facilities • Leverage ratio above long-term target of 2-3x EBITDA due to recent invest
Slide 19: Cash Flow
CASH FLOW Strong cash flow generation during the third quarter Q3 • Meaningful change YoY in cash flow from operation Million EUR Q3 2020 Q3 2019 9M 2020 9M 2019 • Excess cash used to pay down revolver facilities EBITDA 21.4 20.3 46.7 49.4 • Current cash status is good • Net cash inflow of EUR 7.3m
Slide 20: Development in CAPEX
DEVELOPMENT IN CAPEX Investments in 2020 primarily related to vessel investments 9M • Maintenance CAPEX EUR 10.5m or lower than budget and last year • Approximately third of budgeted maintenance CAPEX, EUR 5.0m, were put on hold in Q2 due to COVID-19 • Full year maintenance CAPEX estimated at EUR 12
Slide 21: Outlook and Target CAPEX
OUTLOOK AND TARGET CAPEX 21
Slide 22: Development in Maintenance CAPEX Since 2015
DEVELOPMENT IN MAINTENANCE CAPEX SINCE 2015 Maintenance CAPEX at substantially lower level than between 2015 and 2019 MAINTAINANCE CAPEX • Estimated maintenance CAPEX 2020 at a substantially lower level than prior years • Main items mostly relate to renewal of containers, trucks, terminal and wareho
Slide 23: Three-Year Target Maintenance CAPEX Plan
THREE-YEAR TARGET MAINTENANCE CAPEX PLAN Maintenance CAPEX continues to be at a similar level throughout the next three years MAINTENANCE CAPEX TARGET • Maintenance CAPEX in the range of EUR 15 - 18 million • Main items include e.g. docking of vessels, renewal of containers, trucks, warehouse- and t
Slide 24: Development in Investment CAPEX Since 2015
DEVELOPMENT IN INVESTMENT CAPEX SINCE 2015 Annual investment level in the next three-years in the range of EUR 5 - 10 million INVESTMENT CAPEX • Annual investment CAPEX target for the next three years in the range of EUR 5 – 10 million • Infrastructure investments and renewal of vessel fleet have be
Slide 25: Management Assessment of Performance and Status
MANAGEMENT ASSESSMENT OF PERFORMANCE AND STATUS PUBLISHED QUARTER CURRENT QUARTER OUTLOOK • Generally strong results in a challenging • Export from Iceland has been relatively strong but • Solid results in October and on budget environment import still trailing last year – expecting some slow down f
Slide 26: Thank You
THANK YOU 26
Slide 27: Appendix I
APPENDIX I 27
Slide 28: Operating Results by Quarter
OPERATING RESULTS BY QUARTER OPERATING RESULTS Q3 2020 Q2 2020 Q1 2020 Q4 2019 Q3 2019 Revenue 170,378 160,615 161,670 175,549 172,522 Expenses 148,968 144,614 152,332 164,363 152,210 EBITDA 21,410 16,001 9,338 11,186 20,312 EBIT 10,446 5,035 (1,594) (3,319) 9,248 Net earnings (loss) earnings for th
Slide 29: Income Statement 9M
INCOME STATEMENT 9M Meaningful decrease in expenses following streamlining measures 9M EUR thousand 9M 2020 9M 2019 Change % • Revenue decrease by 2.3% which is acceptable giving external circumstances throughout the year Revenue 492,663 504,045 (11,382) (2.3%) • Main factors being less volume, bunk
Slide 30: EBITDA Bridge 9M
EBITDA BRIDGE 9M Lower contribution from liner services partially off-set by stronger forwarding services and streamlining measures EBITDA BRIDGE BY BUSINESS ACTIVITY EBITDA BRIDGE BY OPERATING ITEMS 30
Slide 31: Economic Indicators
ECONOMIC INDICATORS Relevant lead indicators PAYMENT CARD TURNOVER GALLUP CONFIDENCE INDEX LANDED CATCH – FAROE ISLANDS Source: Central bank of Iceland Source: Gallup Iceland Source: www.vorn.fo LANDED CATCH – ICELAND TOTAL IMPORT – EXPORT ICELAND excl. fuel & gas FUEL PRICE DEVELOPMENT PR. WEEK 31
Slide 32: Shareholders
SHAREHOLDERS PAYMENTS TO SHAREHOLDERS SHAREHOLDERS 16.11.2020 EUR ‘000 SHARE PRICE DEVELOPMENT FROM LISTING 32
Slide 33: Other Matters
OTHER MATTERS SHAREHOLDERS • Eimskip’s market capitalization was EUR 230.7 million or ISK 37.3 billion at the end of trading on 19 November 2020. • Closing price at year end 2019 was ISK 189.5 per share and the average closing price for the year 2019 was ISK 183.9 per share. The closing price on 19
Slide 34: Disclaimer
DISCLAIMER Information contained in this presentation is based on sources that Eimskipafélag Íslands hf. (“Eimskip“ or the ”Company“) considers reliable at each time. Its accuracy or completeness can however not be guaranteed. Copyright of information contained in this presentation is owned by Eimsk
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