Slide 1: Investor Presentation Full Year 2019 Results
Investor Presentation Full Year 2019 Results Hamburg, 20 March 2020
Slide 2: Opening Remarks
Opening Remarks Personal health of all land based staff and seafarers is our priority number one 1 Current situation Impact on volume and cash flow is limited till today but we expect a negative impact from May onwards We are taking various additional measures to mitigate possible negative impacts o
Slide 3: Current situation: Corona Virus affecting shipping industry
1 Current situation The Corona Virus is affecting also the shipping industry in 2020 – magnitude is currently difficult to assess OUR ADDITIONAL OUR TEAM OUR BUSINESS MEASURES The safety of all of our employees is Overall impact on volume and cash- We on-hired equipment in Asia our number one
Slide 4: Low orderbook, limited new orders, steep increase in idle fleet
2 Market update Low orderbook, limited new orders, and a steep increase in idle fleet due to scrubber retrofits and additional void sailings… 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 0.8 38%
Slide 5: …will impact net available capacity in 2020
2 Market update …will impact net available capacity in 2020 Scheduled vessel deliveries Scrapping [TEUm] [% of world fleet] 1.7 3.3% 1.3 1.2 1.2 1.2 1.0 0.9 2.0% 1.5% 1.7% 1.1% 0.9% 0.6% 2015 2016 2017 2018 2019e 2020e 2021e 2015 2016 2017 2018 2019e 2020e 2021e Net capacity growth in 2020e 5.8% Acc
Slide 6: Container transport volume will be impacted, supply measures needed
2 Market update Container transport volume will be impacted, supply measures needed to curtail cost Supply / Demand Balance The fallout from the COVID-19 9 outbreak can strongly be felt in 2020e GDP & container volume growth rates Demand Supply 8.0% 8 The OECD recently lowered its GDP forecast by 0.
Slide 7: Key Performance Indicators 2019
3 Highlights 2019 Key Performance Indicators 2019 Transport volume Transport expenses per TEU1) Freight rate +1.4% -1.1% +2.7% FY 2019: TEU 12.0 million FY 2019: 1,012 USD/TEU FY 2019: 1,072 USD/TEU EBIT Group profit EBITDA USD 908 m USD 418 m USD 2,223 m 6.4% EBIT margin 6.1% ROIC 15.8% EBITDA marg
Slide 8: Dividend proposal of 1.10 EUR/share and adjusted dividend policy
3 Highlights 2019 Based on what we know today, we propose a dividend of 1.10 EUR/share and have adjusted our dividend policy accordingly Dividend proposal Adaption dividend policy EPS [EUR/share] 2.06 “Hapag-Lloyd intends to pay a dividend of at least 30% of the respective group net profit.” Our div
Slide 9: Strategy 2023: Moving ahead with good results in 2019
3 Highlights 2019 Strategy 2023: Moving ahead with good results in 2019 GLOBAL PLAYER BE PROFITABLE # 1 FOR QUALITY We have reinforced our market share We are on-track to deliver on We have made further progress and expanded in niche markets profitability and deleveraging targets in achieving our qu
Slide 10: Target savings for 2019 overachieved
3 Highlights 2019 Target savings for 2019 overachieved – Additional measures and savings ramp up currently under review Full run rate [USD m] Cost savings ramp up [USD m] Additional measures currently under review 350 – 4001) USD 350 - 400 m Actual savings Target savings Network Container Collaborat
Slide 11: Update on IMO 2020
3 Highlights 2019 Update on IMO 2020: Operational transition went smoothly, freight rates went up, but bunker prices have been very volatile Smooth transition period – Development of bunker price spread [USD/mt] Hapag-Lloyd is 100% compliant 600 Ø Q4 2019 + 200 Ø 2020 YTD Highly fluctuating bunker p
Slide 12: In 2019 we delivered on profitability goals and improved balance sheet
4 Financials 2019 In 2019, we have delivered on our profitability goals and have further improved our balance sheet Operational KPIs P&L effects Volume Growth of +1.4% YoY roughly in line with market, Costs Transport costs decreased by USD 459 m YoY, 12,037 but influenced by deliberate reduction of
Slide 13: Improved Q4 2019 results mainly due to lower bunker costs
4 Financials 2019 Improved Q4 2019 results mainly due to lower bunker costs and continuous cost management Revenue [USD m] EBITDA [USD m] Q4 2019 revenue below previous - 3.5% year‘s level mainly due to lower Margin 10.5% 15.2% freight rates (-2.0% compared to a 3,585 + 40.2% 3,460 strong Q4 2018) a
Slide 14: Significantly improved FY 2019 results
4 Financials 2019 Significantly improved FY 2019 results due to active revenue management and further efficiency gains Revenue [USD m] EBITDA [USD m] Group revenue rose by USD 388.4 + 2.8% million to 14,114.5, representing an Margin 9.8% 15.8% increase of 2.8%, mainly driven by 14,115 + 65.2% increa
Slide 15: Transport volume increased by 1.4% YoY to 12,037 TTEU
4 Financials 2019 Transport volume increased by 1.4% YoY to 12,037 TTEU in 2019, excluding Intra-Asia transport volume grew by 2.8% YoY Q4 2019 Transport volume development by trade (excl. Intra-Asia) [TTEU] + 1.7% 3,026 2,974 + 2.9% 235 -260 2,791 2,713 22 5 34 13 15 -13 Q4 2018 Intra-Asia Q4 2018
Slide 16: Freight rates increased by 2.7% YoY to 1,072 USD/TEU
4 Financials 2019 Freight rates increased by 2.7% YoY to 1,072 USD/TEU in 2019, while average bunker price decreased by 1.2% YoY Freight rate [USD/TEU] vs. Bunker price development [USD/mt] Ø 2018 Ø 2019 Average freight rate 1,044 +2.7% 1,072 1,084 1,079 1,084 1,063 1,062 1,055 1,029 1,010 -2.0% 467
Slide 17: Transport expenses per unit decreased slightly YoY
4 Financials 2019 Transport expenses per unit decreased slightly YoY partly driven by lower bunker costs Transport expenses per unit [USD/TEU] Decrease in “Handling and 2018 haulage” by 3% as less profitable 1,023 (incl. D&A) inland business was actively reduced in light of Strategy 2023. Bunker -7
Slide 18: Free cash flow generation of USD 1,857 m
4 Financials 2019 Free cash flow generation of USD 1,857 m significantly stronger than last year Cash flow 2019 [USD m] Operating Investing Financing cash flow cash flow cash flow 2,270 -413 -2,035 47 2,223 1,035 27 20 523 -477 81 -17 -1,940 1,700 1,297 -467 1,159 -44 -45 545 -75 -511 -370 585 Free
Slide 19: We have continued deleveraging the company…
4 Financials 2019 We have continued deleveraging the company… Fixed assets [USD m] Equity base [USD m] Financial debt [USD m] 40.9% Equity ratio 40.9% 6,1313) Net debt 6,605 15,394 14,646 1,1571) 7,430 7,168 7,180 6,891 1,2702) 14,236 5,910 31 December 2018 31 December 2019 31 December 2018 31 Decem
Slide 20: …and surpassed our 2019 Net Debt / EBITDA target
4 Financials 2019 …and surpassed our 2019 Net Debt / EBITDA target of 3.5x clearly FY 2017 [USD m] FY 2018 [USD m] FY 2019 [USD m] Financial debt 7,596 6,891 7,180 Net debt / 5.7x EBITDA 6,812 4.6x 3.0x 6,131 6,605 1,270* 2,223 5,335 1,345 523* 1,199 1,700 EBITDA FY 2017 Net debt FY 2017 EBITDA FY 2
Slide 21: Conclusion and way forward
4 Financials 2019 Conclusion and way forward We substantially improved our operational results and fulfilled our profitability targets. 1 FY 2019 We reduced our financial debt load, kept adequate liquidity and achieved our leverage targets. We maintain our conservative Financial Policy, which is the
Slide 22: Earnings outlook subject to considerable uncertainty
5 Outlook 2020 Earnings outlook is subject to considerable uncertainty, particularly influenced by the coronavirus outbreak FY 20192018 Outlook 2020 Sensitivities for 20201) Transport volume 12,037 TTEU Increasing slightly +/- 100 TTEU < USD 0.1 bn Average freight rate 1,072 USD/TEU Increasing sligh
Slide 23: Our priorities in 2020 remain largely unchanged
5 Outlook 2020 Our priorities in 2020 remain largely unchanged Continuously proactively adjust to changing market conditions In the light of corona crisis, financial policy remains conservative with focus on cash Make sure to continue to pass on higher bunker costs driven by IMO 2020 Continue to imp
Slide 24: Appendix
Appendix Appendix
Slide 25: USD Numbers: equity ratio of 40.9% and gearing of 88.9%
A Appendix USD Numbers: Hapag-Lloyd with an equity ratio of 40.9% and a gearing of 88.9% Balance sheet [USD m] Financial position [USD m] million USD 31.12.2019 31.12.2018 million USD 31.12.2019 31.12.2018 Assets Financial debt and lease liabilities 7,179.6 6,891.1 Non-current assets 15,501.0 14,709
Slide 26: USD Numbers: positive EBIT of USD 908.3 m in 2019
A Appendix USD Numbers: Hapag-Lloyd with positive EBIT of USD 908.3 m in 2019 Income statement [USD m] million USD1 Q4 2019 Q4 2018 Change FY 2019 FY 2018 Change Revenue 3,460.4 3,584.8 –3% 14,114.5 13,726.1 3% – – Transport expenses –2,679.6 –2,909.4 –8% 10,867.0 11,326.3 –4% Personnel expenses –19
Slide 27: EUR Numbers: equity ratio of 40.9% and gearing of 88.9%
A Appendix EUR Numbers: Hapag-Lloyd with an equity ratio of 40.9% and a gearing of 88.9% Balance sheet [EUR m] Financial position [EUR m] million EUR 31.12.2019 31.12.2018 million EUR 31.12.2019 31.12.2018 Assets Financial debt and lease liabilities 6,397.2 6,017.9 Non-current assets 13,811.8 12,845
Slide 28: EUR Numbers: positive EBIT of EUR 811.4 m in 2019
A Appendix EUR Numbers: Hapag-Lloyd with positive EBIT of EUR 811.4 m in 2019 Income statement [USD m] million EUR 1.1.-31.12.2019 1.1.-31.12.20181 Revenue 12,607.9 11,617.5 Transport expenses 9,707.0 9,586.4 Personnel expenses 682.5 645.0 Depreciation, amortisation and impairment 1,174.4 695.1 Othe
Slide 29: First time application of IFRS 16 impact on 2019 results
A Appendix The first time application of IFRS 16 has positively impacted the 2019 EBIT result by USD +34 m, but dampened the EAT result by USD -40 m [USD m] 2019 2018 ∆ Thereof IFRS 16 ∆ ex. IFRS 16 Revenue 14,115 13,726 +388 0 +388 Operating expenses (before D&A) -11,892 -12,381 +489 +523 -34 EBITD
Slide 30: Overview of IFRS 16 effects on cash flow statement
A Appendix Overview of IFRS 16 effects on cash flow statement [USD m] 2019 2018 ∆ Thereof IFRS 16 ∆ ex. IFRS 16 EBIT 908 524 +384 +34 +350 Depreciation / Amortization -1,315 -821 -493 -489 -4 EBITDA 2,223 1,345 +878 +523 +355 Working Capital and other effects 47 -78 +125 +20 +105 Cash flow from oper
Slide 31: Well balanced maturity structure of financial liabilities
A Appendix Well balanced maturity structure of financial liabilities Financial Debt Profile as per 31 December 20191), [USD m] Facility 31 December 2019 [USD m] 1,535 Vessel Financings 3,332 1,377 1,333 Container Financings 1,193 1222) Total Vessel & Container 4,525 1,062 1,058 EUR Bond 2024 505 753
Slide 32: Bunker price decreased by 1% YoY to 416 USD/mt
A Appendix Bunker price decreased by 1% YoY to 416 USD/mt in 2019, which drove down bunker expenses per unit to 151 USD/TEU Bunker consumption & expenses per TEU Bunker consumption price [mt/TEU; USD] [USD/mt] 0.37 0.36 700 -7 / -4% 664 643 158 151 613 600 599 594 593 600 553 2018 2019 2018 2019 MDO
Slide 33: SCFI & CCFI development since January 2015
A Appendix SCFI & CCFI development since January 2015 Comprehensive Index (CCFI/SCFI) Shanghai – North Europe (CCFI / SCFI) 1,200 CCFI Comprehensive Index SCFI Comprehensive Index 2,000 CCFI NEurope (USD/TEU) SCFI NEurope (USD/TEU) 1,000 912 1,500 898 800 1,062 1,000 827 600 500 400 0 JanApr Jul Oct
Slide 34: Hapag-Lloyd's shareholder structure
A Appendix Hapag-Lloyd`s shareholder structure Shareholders‘ agreement/ Controlling shareholders 4.0% Kühne Maritime GmbH / Kühne Holding AG CSAV Germany Container Holding GmbH 10.2% HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH 29.6% Qatar Holding Germany GmbH The Public
Slide 35: Share price development
A Appendix Share price development Performance since 1 January 2018 Indexed Price Frankfurt Stock Exchange / 240 Stock Exchange Hamburg Stock Exchange 230 220 210 200 Regulated market Market segment (Prime Standard) 190 180 170 160 150 ISIN / WKN DE000HLAG475 / HLAG47 140 130 120 110 Ticker Symbol H
Slide 36: Bond trading
A Appendix Bond trading 110 100 Impacted by general uncertainty in the 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 / A2E4V1
Slide 37: 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 Annual General Meeting 2020 14 August 2020 Half-year Financial Report 2020 13 November 2020 Quarterly Financial Report 9M 2020 37
Slide 38: 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 39: 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 39