Matson, Inc. · NYSE:MATX
Matson — Q4 2019 Earnings Presentation
22 slides from Matson's earnings presentation, Feb 25, 2020
Slide 1: Fourth Quarter 2019 Earnings Conference Call
1 Fourth Quarter 2019 Earnings Conference Call Fourth Quarter 2019 Earnings Conference Call February 25, 2020
Slide 2: Forward-Looking Statements
2 Fourth Quarter 2019 Earnings Conference Call Forward-Looking Statements Statements made during this presentation that set forth expectations, predictions, projections or are about future events are based on facts and situations that are known to us as of February 25, 2020. We believe that our expe
Slide 3: Opening Remarks
3 Fourth Quarter 2019 Earnings Conference Call Opening Remarks • In 4Q19, tradelanes performed as expected, but consolidated results came in below expectations: – CLX service outperformed a difficult comparison – Modest rebound in Hawaii tradelane – Logistics in line with expectations – SSAT contrib
Slide 4: Current Priorities
4 Fourth Quarter 2019 Earnings Conference Call Current Priorities Priority Commentary Complete Hawaii service fleet renewal • Lurline delivered in 4Q19 and in service; stepped down to 9-ship fleet • Matsonia scheduled delivery in 4Q20 Upgrade Sand Island terminal • Three existing cranes demolished;
Slide 5: Potential Impacts of COVID-19
5 Fourth Quarter 2019 Earnings Conference Call Potential Impacts of COVID-19 • Expected to negatively impact transpacific import volume from Asia – Elongation of post Lunar New Year period due to factory start-up delays and disruption in supply chain logistics – Expected to negatively impact SSAT an
Slide 6: Hawaii Service
6 Fourth Quarter 2019 Earnings Conference Call Hawaii Service Fourth Quarter 2019 Performance • Container volume increased 1.1% YoY – Positive container market growth Container Volume (FEU Basis) 30,000 32,000 34,000 36,000 38,000 40,000 Q1 Q2 Q3 Q4 2018 2019 Full Year 2020 Outlook • Expect volume t
Slide 7: Hawaii Economic Indicators
7 Fourth Quarter 2019 Earnings Conference Call Hawaii Economic Indicators Real GDP Growth Construction Jobs Growth Select Hawaii Economic Indicators Hawaii’s economy remains in a slowing trend, but conditions remain favorable for continued economic growth. Source: https://www.uhero.hawaii.edu/assets
Slide 8: China Expedited Service (CLX)
8 Fourth Quarter 2019 Earnings Conference Call China Expedited Service (CLX) Fourth Quarter 2019 Performance • Container volume increased 4.3% YoY – Deployed larger vessel capacity • Continued to realize a sizeable rate premium Container Volume (FEU Basis) Full Year 2020 Outlook • Expect 1H20 impact
Slide 9: Guam Service
9 Fourth Quarter 2019 Earnings Conference Call Guam Service Fourth Quarter 2019 Performance • Container volume decreased 7.7% YoY – Typhoon relief volume in 4Q18 Container Volume (FEU Basis) Full Year 2020 Outlook • Expect volume to approximate the 2019 level – Highly competitive environment remains
Slide 10: Alaska Service
10 Fourth Quarter 2019 Earnings Conference Call Alaska Service Fourth Quarter 2019 Performance • Container volume declined 0.7% YoY – Slightly lower NB volume – Modestly higher SB volume Container Volume (FEU Basis) 10,000 12,000 14,000 16,000 18,000 20,000 Q1 Q2 Q3 Q4 2018 2019 Full Year 2020 Outlo
Slide 11: Alaska Economic Indicators
11 Fourth Quarter 2019 Earnings Conference Call Alaska Economic Indicators Anchorage and Alaska Employment Growth(1)(2) Anchorage Population Growth(1) -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019E 2020P YoY Growth in Employment Anchorage (AE
Slide 12: SSAT Joint Venture
12 Fourth Quarter 2019 Earnings Conference Call SSAT Joint Venture Fourth Quarter 2019 Performance • Terminal joint venture contribution was $3.0 million, $5.0 million lower than last year – Higher terminal operating costs – Lower lift volume YoY Income from SSAT $ 0.0 $ 2.0 $ 4.0 $ 6.0 $ 8.0 $ 10.0
Slide 13: Matson Logistics
13 Fourth Quarter 2019 Earnings Conference Call Matson Logistics Fourth Quarter 2019 Performance • Operating income decreased $1.5 million YoY to $7.6 million – Lower contribution from transportation brokerage Operating Income Full Year 2020 Outlook • Expect operating income to be lower than the lev
Slide 14: Matson Logistics Operating Income and Margin
14 Fourth Quarter 2019 Earnings Conference Call Matson Logistics 0% 1% 2% 3% 4% 5% 6% 7% 8% $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 2012 2013 2014 2015 2016 2017 (1) 2018 2019 Operating Income Margin $ in millions Operating Income and Margin Operating Income Operating Income Margin (1) First full year
Slide 15: Financial Results – Summary Income Statement
15 Fourth Quarter 2019 Earnings Conference Call Financial Results – Summary Income Statement See the Addendum for a reconciliation of GAAP to non-GAAP Financial Metrics. (1) Includes a non-cash tax expense reversal of $2.9 million resulting from discrete adjustments in applying the provisions of the
Slide 16: Cash Generation and Uses of Cash
16 Fourth Quarter 2019 Earnings Conference Call Cash Generation and Uses of Cash $ 0.0 $ 50.0 $ 100.0 $ 150.0 $ 200.0 $ 250.0 $ 300.0 $ 350.0 $ 400.0 Cash Flow from Operations Net Borrowings Maint. Capex New Vessel Capex (1) Dividends Other Cash Flows Net increase in cash $ in millions Last Twelve M
Slide 17: Financial Results – Summary Balance Sheet
17 Fourth Quarter 2019 Earnings Conference Call Financial Results – Summary Balance Sheet • Total debt of $958.4 million • Net debt of $937.2 million • Net debt-to-LTM EBITDA of 3.5x • Continuing to look at capital structure optimization alternatives, including Title XI financing See the Addendum fo
Slide 18: New Vessel Payments and Percent of Completion
18 Fourth Quarter 2019 Earnings Conference Call New Vessel Payments and Percent of Completion Actual and Estimated Vessel Progress Payments(1) FY 2019 ($ in millions) 1Q 2Q 3Q 4Q FY Cash Capital Expenditures $ 16.2 $ 6.4 $ 74.6 $ 106.3 $ 203.5 Capitalized Interest 4.7 3.3 3.5 4.1 15.6 Capitalized Ve
Slide 19: 2020 Outlook
19 Fourth Quarter 2019 Earnings Conference Call 2020 Outlook FY 2020 Outlook Items Full Year First Quarter Operating income: Ocean Transportation To be higher than the $90.8 million achieved in 2019 To be approximately breakeven compared to $9.4 million achieved in the first quarter 2019 Logistics T
Slide 20: Appendix
20 Fourth Quarter 2019 Earnings Conference Call Appendix
Slide 21: Appendix – Non-GAAP Measures
21 Fourth Quarter 2019 Earnings Conference Call Appendix – Non-GAAP Measures Matson reports financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company also considers other non-GAAP measures to evaluate performance, make day-to-day operating decisions, he
Slide 22: Appendix – Forward Looking Statements
22 Fourth Quarter 2019 Earnings Conference Call Appendix – Forward Looking Statements Statements in this presentation that are not historical facts are “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation those stateme