Matson, Inc. · NYSE:MATX
Matson — Stephens Fall Investment Conference 2012
31 slides from Matson's conference presentation, Nov 14, 2012
Slide 1: Stephens Fall Investment Conference
1 Stephens Fall Investment Conference November 14, 2012
Slide 2: Forward-looking statements
2 Statements in this presentation that set forth expectations or predictions are based on facts and situations that are known to us as of the date of this filing. Actual results may differ materially, due to risks and uncertainties, such as those described on pages 19-29 of the Alexander & Baldwin,
Slide 3: Key Investment Highlights
Key Investment Highlights Matt Cox President and CEO Matson, Inc.
Slide 4: Key Investment Highlights
4 Key Investment Highlights Great brand equity Leading market share in core Hawaii and Guam shipping lanes Significant advantages in premium China service Superior asset quality and flexibility Experienced management team Strong balance sheet and cash flow generation Attractive cash dividend
Slide 5: The Matson Brand
5 The Matson Brand Premier Ocean Transportation and Logistics Provider Delivering Innovation Reliability Beyond the Norm Financial Stability Delivering Value to Our Customers 5
Slide 6: Matson Ocean Transportation: Connecting the Pacific Unlike Anyone Else
6 Matson Ocean Transportation: Connecting the Pacific Unlike Anyone Else Shanghai Ningbo Xiamen Guam Honolulu, Hawaii Long Beach Oakland Portland Seattle Micronesia
Slide 7: Hawaii Service
7 Hawaii Service Largest West Coast to Hawaii container and auto carrier Nine ships providing three arrivals per week into Honolulu Dedicated terminal operations Own and operate neighbor island barge network Principal carrier in the trade Nawiliwili Kahululi Hilo Kawaihae Honolulu Hawaii Neighbor Is
Slide 8: Hawaii Containers East & West Combined
8 Hawaii Containers East & West Combined Matson Hawaii Total TEU Volumes 1998 2000 2002 2004 2006 2008 2010 400,000 100,000 350,000 300,000 250,000 200,000 150,000 TEUs 1984 1986 1988 1990 1992 1994 1996 1974 1976 1978 1980 1982 Footprint of Official Recessions in the U.S. Source: Matson management
Slide 9: Hawaii: Poised for Growth
Hawaii: Poised for Growth Positive economic trends International tourism a growth opportunity Hawaii among the world’s most desirable vacation destinations Experience catering to growing demand from Asian tourists Infrastructure projects expected to support expansion of construction industry 0.6% 8.
Slide 10: Guam Service
10 Guam Service Matson has historically carried over one-half of U.S.-origin freight Currently serves entire market with the departure of the second carrier from the trade Easy connections from Oakland and Pacific Northwest to Guam via terminal in Honolulu Chartered Matson ship serves neighboring is
Slide 11: China Service
11 China Service Five ships connect Xiamen, Ningbo and Shanghai weekly to the Long Beach port Matson’s share in historically established Ningbo-Shanghai to Southern California is approximately 5-6% Fastest transit time from Shanghai: 10 days vs. 12-14 (current trade standard) 10-day transit together
Slide 12: Transpacific Eastbound Freight Rates
12 Transpacific Eastbound Freight Rates Source: Shanghai Containerized Freight Index Shanghai Containerized Freight Index - To U.S. West Coast Ports (Spot Rates) $1,424 $2,510 $2,730 $2,782 $2,739 $2,415 $1,992 $1,556 $1,000 $1,500 $2,000 $2,500 $3,000 9/30/11 12/30/11 3/30/12 6/30/12 9/30/12 $ per
Slide 13: The Next Target: Focus on Premium Freight with Delivery Precision
13 COST ($) COST (more $ = less value) Matson: 10x less costly 1x 10x 5x TIME (DAYS) TRANSIT TIME (more days = less value) Matson: 10 days vs. 5 days 2 20 10 TOTAL COST/TIME VALUE Matson: 5x the value of air freight = VALUE 0.5 5 The Next Target: Focus on Premium Freight with Delivery Precision Most
Slide 14: Superior Fleet Quality And Performance
14 Superior Fleet Quality And Performance Average age of current 9-ship active fleet is 19 years compared with 32 years for closest competitor Arrivals among best in the world: 75 - 85% arrivals on-time or within 59 minutes compared with Industry standard of 24 hours About half of the 15 – 25% late
Slide 15: SSA Terminals Joint Venture
15 SSA Terminals Joint Venture Formed July 1999 – SSA Marine (65%) and Matson (35%) Service U.S. West Coast Stevedoring/Terminal Operator Container Equipment Maintenance Chassis Pools On-Dock Rail Locations Terminals SSAT Total %SSAT* Lifts % SSAT* Long Beach/LA 2 14 14% 10-15% Oakland 2 8 25% 30-35
Slide 16: Strategic Benefits of Dedicated Terminals
16 Guaranteed berth/cranes Quick turn of vessels Maintain sailing schedules Fast cargo availability Quick truck turns Quick yard turns Flexibility to receive freight close to departure Increased customer satisfaction Strategic Benefits of Dedicated Terminals
Slide 17: Matson Logistics: A National Network of Integrated Services
17 Matson Logistics A National Network of Integrated Services Seattle Portland Houston Reno St Paul Chicago Birmingham Dallas Philadelphia Atlanta Savannah Jacksonville Akron Indianapolis Long Beach Phoenix Boston Columbus SF/Oakland Source: Matson management Warehousing & Distribution China Supply
Slide 18: Matson Logistics Priorities
18 Matson Logistics Priorities Achieve organic growth Highway and intermodal brokerage Distribution and warehouse services Increase coordinated cross-selling with Ocean Transportation Further develop the 53-foot intermodal domestic container pilot program Goal to return operating margins to historic
Slide 19: Seasoned Management Team
19 Seasoned Management Team Name Title Matson Years in Transportation Matthew J. Cox President & CEO 2001 23 Joel M. Wine SVP & CFO 2011 1 Ronald J. Forest SVP, Operations 1995 34 David L. Hoppes SVP, Ocean Services 1989 31 Kevin C. O’Rourke SVP, General Counsel 1992 34 Vic S. Angoco SVP, Pacific 19
Slide 20: Financial Highlights
Financial Highlights Joel Wine Senior Vice President and Chief Financial Officer
Slide 21: Key Investment Highlights
21 Key Investment Highlights Great brand equity Leading market share in core Hawaii and Guam shipping lanes Significant advantages in premium China service Superior asset quality and flexibility Experienced management team Strong balance sheet and cash flow generation Attractive cash dividend
Slide 22: Matson Financial Data
22 Matson Financial Data (2) 1 1 12002-2011 Revenue and operating income information extracted from previously filed Form10-Ks which include other income and intercompany income. TTM results shown for 2012. 22011 expenses included CLX2 costs of $7.1 million primarily related to container repositioni
Slide 23: Matson Financial Data: EBITDA and Capital Expenditures
23 EBITDA1 (Dollars in Millions) $10 $133 $129 $175 $219 $68 $38 $13 $71 $47 Matson Financial Data 1 EDITDA and capital expenditure information extracted from previously filed Form 10-Ks which include other income and exclude intercompany income. TTM EBITDA shown for 2012. 22011 expenses included CL
Slide 24: Ocean Transportation Operating Income
24 2010 and 2011 results from continuing operations; TTM shown for 2012 More detailed information is available in previously filed Form 10-Ks and 10-Qs Matson estimates additional administrative expenses of approximately $8 to $10 million annually, not included in the pro forma financial statements,
Slide 25: Pre-Tax Income (Loss) SSAT Investment
25 Pre-Tax Income (Loss) SSAT Investment $Millions TTM shown for 2012; More detailed information is available in previously filed Form 10-Ks and 10-Qs; Average Annual Pre-tax Income: $7.8 million $3.4 $4.7 $17.1 $13.3 $10.7 $5.2 $6.2 $12.8 $8.6 $4.9 -$1.1 -$5 $0 $5 $10 $15 $20 2002 2003 2004 2005 20
Slide 26: Logistics Operating Income
26 Logistics $Millions More detailed information is available in previously filed Form 10-Ks and 10-Qs TTM shown for 2012 Matson estimates additional administrative expenses of approximately $8 to $10 million annually, not included in the pro forma financial statements, will be incurred in future pe
Slide 27: Appendix
Appendix Matson.
Slide 28: Quarterly Unaudited Operating Income: Ocean Transportation
29 2011 expenses included CLX2 costs of $7.1 million primarily related to container repositioning that did not qualify for discontinued operations treatment As reported in Form 10-Qs and 10-Ks previously filed with the SEC Matson estimates additional administrative expenses of approximately $8 to $1
Slide 29: Quarterly Unaudited Operating Income: Logistics
30 Quarterly Unaudited Operating Income From Continuing Operations Logistics 2011 2009 2010 2012 2.2% 2.7% 1.5% 2.0% 0.3% 2.5% 1.6% 1.9% 2.1% 2.0% NM 1.4% 1.4% 1.7% NM = Not meaningful As reported in Form 10-Qs and 10-Ks previously filed with the SEC Matson estimates additional administrative expens
Slide 30: Selected Segment Data
31 Selected Segment Data More detailed information is available in previously filed Form 10-Ks and 10-Qs * YTD 3Q 2012 $73.8 $ 3.2 $70.6 $47.2 $ 3.0 -- $44.2 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012* Capital Expenditures Ocean Transportation $10.5 $133.2 $128.6 $173.9 $217.1 $65.8 $35.
Slide 31: GAAP to Non-GAAP Reconciliation (Net Debt, EBITDA and Adjusted EBITDA)
GAAP to Non-GAAP Reconciliation (Net Debt, EBITDA and Adjusted EBITDA) 165.5 70.8 7.7 35.3 1.1 52.8 2011 159.1 74.3 9.9 30.6 (12.3) 32.0 2012 Trailing Twelve Months 11.7 125.9 137.6 (2.2) 55.0 52.8 Adjusted EBITDA (net of separation/shutdown cost) 8.7 119.8 128.5 3.6 48.9 52.5 EBITDA 8.6 0.0 8.6 0.3