Eimskipafelag Islands Hf. · OMXICE:EIM
Eimskipafelag Islands Hf — Q2 2018 Earnings Presentation
30 slides from Eimskipafelag Islands Hf's earnings presentation, Aug 31, 2018
Slide 1: Net Earnings EUR 4.6 Million in Q2 2018
NET EARNINGS EUR 4.6 MILLION IN Q2 2018 Financial Results – Q2 and 1H 2018 31 August 2018
Slide 2: Key Highlights for Q2 2018
KEY HIGHLIGHTS FOR Q2 2018 Net earnings EUR 4.6 million Revenue EBITDA Investment in the EUR 172.6 m EUR 14.9 m weekly sailing system up EUR 1.9 m down by EUR 1.8 m Growth in container liner Growth in forwarding Focus on segment but Norway liner segment but reefer Trans-Atlantic and spot was below f
Slide 3: Transported Volume in Q2 2014 to Q2 2018
TRANSPORTED VOLUME IN Q2 2014 TO Q2 2018 Container Liner volume up 6.3% | Growth in forwarding volume driven by dry cargo LINER SERVICES FORWARDING SERVICES 10% 160 40% 250 9% 140 35% 8% 30% 200 120 7% 25% 6% 100 150 20% 5% 80 15% 4% 60 100 10% 3% 40 5% 2% 50 13.2% 12.7% 39.6% 10.9% 1% 20 0% 7.0% 6.
Slide 4: Transported Volume in 6M 2018
TRANSPORTED VOLUME IN 6M 2018 Container Liner volume up 5.9% | Growth in forwarding volume driven by dry cargo LINER SERVICES FORWARDING SERVICES 10% 145 45% 250 9% 40% 140 8% 35% 200 7% 135 30% 6% 130 25% 150 5% 20% 4% 125 15% 100 3% 120 10% 2% 5% 50 115 15.6% 5.1% 4.8% 41.2% 10.5% 1% 0% 7.9% 4.2%
Slide 5: Liner Services Volume
LINER SERVICES VOLUME Increase in container liner services and Trans-Atlantic 6% 4% 12% 16% 12% 6M 2018 12% 6M 2017 70% 68% Iceland Faroe Islands Norway Trans-Atlantic Iceland Faroe Islands Norway Trans-Atlantic 5
Slide 6: Forwarding Services Volume
FORWARDING SERVICES VOLUME Continued growth in dry cargo 22% 29% 6M 2018 6M 2017 71% 78% Reefer Dry Reefer Dry 6
Slide 7: Financial Results
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Slide 8: Key Highlights for 2Q 2018
KEY HIGHLIGHTS FOR 2Q 2018 Growth in revenue and volume but lower earnings Affecting revenue Liner revenue EUR 117.5 m + Container liner volume Revenue + Dry cargo forwarding down 1.4% + Strong growth in TA EUR 172.6 m Forwarding revenue ÷ Car import to Iceland up EUR 1.9 m EUR 56.8 m ÷ Internationa
Slide 9: Revenue and EBITDA 2014 to 2018 by Quarter
REVENUE AND EBITDA 2014 TO 2018 BY QUARTER Continued top line growth | EBITDA affected by investment in the sailing system REVENUE EBITDA EUR million EUR million 180 20 160 18 140 16 14 120 12 100 * * 10 80 8 60 6 40 4 20 2 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016 2017 2018 2014 2015 2016 2017 201
Slide 10: Income Statement 1H 2018
INCOME STATEMENT 1H 2018 First half 2018 results affected by investment in sailing system and currency exchange rates Expenses EUR 306.0 m Revenue up 6.2% EBITDA EUR 328.2 m (excl. additional cost related to EUR 22.2 m up 4.4% container sailing system, up down 14.8% 4.5%) Depreciation and Net earnin
Slide 11: Revenue and Expenses by Currency
REVENUE AND EXPENSES BY CURRENCY Income statement relatively naturally hedged – long in USD and short in ISK EUR/USD Development 1.3 15% 8% 3%6% 9% 1.25 4% 5% 3% 1.2 39% 36% 22% Expenses 1.15 Revenue 1.1 27% 1.05 26% 20% 1 Q1 Q2 0.95 EUR & DKK USD EUR & DKK USD 0.9 1 3 5 7 9 11 13 15 17 19 21 23 25
Slide 12: Expense Bridge
EXPENSE BRIDGE Increase in total cost mainly due to increased activity 320 310 2.9 (0.9) (1.1) 3.0 300 0.5 2.2 3.9 7.3 290 306.0 280 288.2 270 260 12
Slide 13: China Forwarders Freight Index
CHINA FORWARDERS FREIGHT INDEX Average price decreased by 17% between Q2 2017 and Q2 2018 1000 -17% 800 600 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 400 11 Source: www.shippingchina.com
Slide 14: Bunker Price Development
BUNKER PRICE DEVELOPMENT Average bunker price 31% higher in 1H 2018 compared to 1H 2017 500 42% 450 400 21% 350 300 250 200 Bunker is largely hedged by 150 BAF and hedge agreements 100 Q1 Q2 50 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 2018 2017 Rotterdam heavy fuel
Slide 15: Geographical Split of Revenue
GEOGRAPHICAL SPLIT OF REVENUE Minor changes in geographical split of revenue 5% 4% 6% 6% 25% 25% 48% 48% 6M 2018 6M 2017 8% 9% 8% 8% Iceland Faroe Islands Iceland Faroe Islands Norway Europe Norway Europe Asia Other Asia Other 15
Slide 16: Revenue and EBITDA by Business Segment
REVENUE AND EBITDA BY BUSINESS SEGMENT Similar split between business segments between periods Revenue EBITDA Revenue EBITDA 34% 35% 33% 35% 6M 2018 6M 2018 6M 2017 6M 2017 66% 65% 67% 65% Liner services Forwarding services Liner services Forwarding services Liner services Forwarding services Liner
Slide 17: Financial Ratios 2014 to Q2 2018
FINANCIAL RATIOS 2014 TO Q2 2018 Increased leverage but strong financial position NET DEBT / LTM-EBITDA NET DEBT AND EQUITY RATIO EUR million 2.2 120 100% Net debt 2.0 110 90% Equity ratio 1.8 100 80% 1.6 90 70% 1.4 80 70 60% 1.2 60 50% 1.0 50 40% 0.8 40 0.6 30% 30 0.4 20% 20 0.2 10 10% 0.65 0.78 0.
Slide 18: Cash Flow Bridge
CASH FLOW BRIDGE Investments have led to increase in borrowings 40 30 (6.4) 10.0 (11.0) 0.6 20 23.4 (18.3) 23.2 21.5 10 0 19
Slide 19: Capex 2014 to 2018
CAPEX 2014 TO 2018 Included in 2018 budget is payment of vessel and new port crane in Sundahöfn EUR million 60 50 40 30 20 10 0 2014 2015 2016 2017 2018 2017 6M 2018 6M Budget Operation Vessel dockings Investments 20
Slide 20: Development of the Sailing System and Other Projects
DEVELOPMENT OF THE SAILING SYSTEM AND OTHER PROJECTS 21
Slide 21: Eimskip's Weekly Sailing System
EIMSKIP’S WEEKLY SAILING SYSTEM Six sailing routes in the North Atlantic Increased cost of the container sailing system amounted to EUR 4.7 m in 1H 2018 14
Slide 22: The Company Invested in a New Weekly Sailing System
THE COMPANY INVESTED IN A NEW WEEKLY SAILING SYSTEM Transformation period for the company – Container liner growth 6.3% 6M 2018 compared to 6M 2017 The new sailing system is an investment for the future On the Gray route adding volume from Húsavík On the Gray route adding new volume from the U
Slide 23: Other Projects
OTHER PROJECTS Recent developments Investment in Coldstore in Tromsö, Norway 51% ownership in the operational company Tromso Terminalen 49% ownership in the real estate company Sæferðir has signed a new 5 year contract for the operation of Baldur The company’s investment in ELB Feeder, an
Slide 24: Global Shipping Market
GLOBAL SHIPPING MARKET 2015-2017 the years of mega consolidation and alliances The last three years M&A and bankruptcies in Global Shipping Alliances The 2M 486 Vessels 3.3 Million TEU July March 2016 January 2016 The Ocean Alliance December 2016 2014 350 Vessels 3.5 Million TEU April July 2018 Dece
Slide 25: Market Comparison
MARKET COMPARISON Eimskip versus Samskip in the period 2015-2017 Increase in revenues over the period EIM 32.9% vs. SAM 6.9% Average EBITDA EIM EUR 52.0 m vs. SAM EUR 20.5 m EBITDA ratio EIM 9.3% vs. SAM 3.2% Total net results over the period EIM EUR 56.5 m vs. SAM EUR 18.3 m Source:
Slide 26: Short-Term Initiatives
SHORT-TERM INITIATIVES The company expects to realize gains from a number of short- term initiatives to improve the operation and its profitability Off-hire of one vessel in Norway Lowering of operational container cost Fine-tuning of the container sailing system Increased synergies between
Slide 27: EBITDA Guidance for 2018
EBITDA GUIDANCE FOR 2018 EBITDA in the range of EUR 57-63 m and according to current assumptions the results will be in the lower to mid-range of 57-63 m EUR million 70 Liner services 57-63 Volume in the container liner services expected to continue to grow 60 Volume in the Faroe Islands with
Slide 28: Questions
QUESTIONS 30
Slide 29: 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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Eimskipafélag Íslands hf. — Q2 2018 Earnings Presentation on 6ix