Slide 1: Investor Presentation – 1st Quarter Results 2015
Investor Presentation – 1st Quarter Results 2015 13 May 2015 1
Slide 2: Good Start to “Our Way Forward”
Good Start to “Our Way Forward” STRATEGIC HIGHLIGHTS Q1 2015 The integration process is on track, and a portion of the cost savings generated by these synergies has already been achieved in the first quarter of 2015 Project OCTAVE, which aims at improving efficiency and optimizing costs, showed
Slide 3: Delivering Financial Turnaround
Delivering Financial Turnaround FINANCIAL HIGHLIGHTS Q1 2015 Key return figures1) [USD m] In a challenging market environment, Q1 2014 Q1 2015 Hapag-Lloyd achieved initial cost synergies MARGIN and benefited from a clearly reduced bunker 12.3% 7.6% 7.0% price and consumption 0.2% -5.2% -4.1% On
Slide 4: Agenda
Agenda A. Good Start to “Our Way Forward” B. Competitive Market Environment C. Delivering Financial Turnaround 4
Slide 5: Our Way Forward: Short-term improvements under way, mid-term initiatives defined
Our Way Forward: Short-term improvements are already well under way, with mid-term initiatives clearly defined Short- and mid-term initiatives 1 Project CUATRO Integration well on track Close deal and integrate CSAV business SHORT-TERM 2 Project OCTAVE Fleet renewal progressing Short-term profit imp
Slide 6: Integration of CCS progressing according to plan
The integration of CCS1) is progressing according to plan – We expect to realize in full the USD 300 m net synergies Integration status Synergies of approx. USD 300 m p.a. PREPARATION New organization structure implemented ~300 Staff selected and successfully on-boarded TRAINING Familiarizatio
Slide 7: Current focus is on Voyage Cut-over
Current focus is on Voyage Cut-over – Transfer of operating business to conclude by mid 2015 Timeline Signature Start of Voyage Cut-over – Planned IPO/ of BCA Booking on HL systems 2nd Capital 16 April 2014 2 March 2015 Increase in 2015 Closing and Main Period for Trainings Signature start of for HL
Slide 8: Project OCTAVE will deliver further earnings improvements in 2015
Project OCTAVE will already deliver significant further earnings improvements in 2015 Hapag-Lloyd improvement areas Inland Pricing & Steering Procurement & Inland Bunker Procurement Fleet Renewal Targeted cost Fleet & savings: Fleet Refurbishment Network Low three- Service Structure digit USD millio
Slide 9: Hapag-Lloyd further optimized its competitive and flexible fleet
Hapag-Lloyd further optimized its competitive and flexible fleet Vessel fleet structure as of 31 March 2015 Owned1) Chartered Current Orderbook Fleet age [% of total capacity] fleet Average age 7.9 years3) Capacity [TEU] 131,674 131,674 52,945 3 MODERN >10,000 TEU Vessels 10 10 5 70% Capacity [TEU]
Slide 10: Fleet renewal of “Old Ladies” and delivery of 9,300 TEU ship orders
Fleet renewal of “Old Ladies” and delivery of remaining 9,300 TEU ship orders to be concluded until July 2015 1 Fleet renewal: 16x “Old Ladies” 2 Existing orders: 7x 9,300 TEU Hapag-Lloyd had identified a portfolio of 16 ships In Q1 2015 Hapag-Lloyd has taken delivery of (“Old Ladies”) to be dec
Slide 11: Further fleet optimization on the Latin America-Europe market
For the upcoming years, Hapag-Lloyd intends to further optimize its fleet on the Latin America-Europe market 3 New orders: 5x 10,500 TEU Transport volume by trade, 31 Mar 2015 New ships will optimize network and product • Bundle services / redesign cooperation • Participate in reefer growth 21% •
Slide 12: Structural improvements: New management set-up
Structural improvements: New management set-up with clear responsibilities Executive Committee Rolf Habben Jansen Anthony J. Firmin Nicolás Burr Chief Executive Officer Chief Operating Officer Chief Financial Officer (CEO) (COO) (CFO) North America South America Europe Asia (Piscataway) (Valparaíso)
Slide 13: Agenda
Agenda A. Good Start to “Our Way Forward” B. Competitive Market Environment C. Delivering Financial Turnaround 13
Slide 14: Container shipping a growth, yet competitive industry; order book low
Container shipping has been and continues to be a growth, yet competitive industry – Order book currently on low levels Container volume and global GDP Global order book 2000 = 100 TEU m 8 300 +5.1% 7 56% 6 250 Transport +3.7% volume 5 +3.8% +8.1% 33% Q1 200 4 2015 +3.6% 3 +4.2% 16% 150 2 World GDP
Slide 15: Short-term freight rate pressures and volatilities will remain
Short-term freight rate pressures and volatilities will remain in the container shipping industry Shanghai – Europe (SCFI) Shanghai – USA (SCFI) 2,500 6,000 USWC (USD/FEU) USEC (USD/FEU) NEurope (USD/TEU) Mediter. (USD/TEU) 2,000 5,000 4,000 1,500 3,310 3,000 1,000 1,003 861 2,000 1,647 500 1,000 0
Slide 16: Capacity measures help to restore supply and demand balance
Capacity measures help to restore supply and demand balance Global capacity management Scrapping [TTEU] Idle fleet [TTEU] 27 28 average age scrappings 12% 1.5% 26 500 23 23 22 22 1,500 1,420 1,480 400 300 1,000 838 830 779 200 444 379 334 385 100 500 356 291 101 131 77 59 0 2008 2009 2010 2011 2012
Slide 17: East-West trades: Now consolidated in key alliances
East-West trades: Now consolidated in 4 key alliances Top 20 – Current fleet [TEU m]1) Transpacific (capacity share) Other Maersk 2.8 O3 MSC 2.5 4% 13% CKYHE CMA CGM 1.7 35% Hapag-Lloyd 1.0 Evergreen 0.9 2M 16% COSCO 0.9 CSCL 0.7 Hanjin 0.6 32% MOL 0.6 G6 Alliance APL 0.6 Hamburg Süd 0.5 Far East (c
Slide 18: North-South trades: Hapag-Lloyd joins forces in Latin America
North-South trades: Hapag-Lloyd joins forces in Latin America New cooperation in Latin America Compelling rationale Together with Hamburg Süd, CMA CGM and New product between Asia and Latin America with other shipping companies, Hapag-Lloyd will be reliable weekly services offering new products
Slide 19: Agenda
Agenda A. Good Start to “Our Way Forward” B. Competitive Market Environment C. Delivering Financial Turnaround 19
Slide 20: Significantly increased EBITDA to USD 319 m in Q1 2015
Hapag-Lloyd significantly increased its EBITDA to USD 319 m (EBITDA margin: 12.3%) in the first three months of 2015 Operational KPIs Revenue [USD m] Revenue . Q1 Q1 1,652 1,554 2,302 ∆ [EUR m] 2015 2014 Transport volume [TTEU] 1,774 1,399 375 2,593 2,181 2,130 Freight rate [USD/TEU] 1,331 1,422 -91
Slide 21: Transport volumes increased 26.8% due to the CCS integration
Transport volumes increased 26.8% due to the CCS integration Transport volume [TTEU] Breakdown by trade [TTEU] CCS1) EMAO +7.5% Intra Asia HL 7% Atlantic Latin America 8% 25% Q1 2014 5,907 32% 68% 5,496 18% north-south east-west trades 23% trades 20% Transpacific Far East ∑ = 1,399 TTEU +26.8% Intra
Slide 22: Average freight rate decreased by -91 USD/TEU
Average freight rate decreased by -91 USD/TEU mainly driven by the structurally lower CCS freight rate Freight rate1) [USD/TEU] vs. bunker price2) [USD/t] 2013 2014 Q1 2015 Bunker cost / TEU as share 20.9% 19.3% 11.3% of freight rate [%] 1,600 1,546 1,200 -91 (-6.4%) Freight rate 1,499 1,476 1,100 1
Slide 23: Transport expenses per TEU decreased by -207 USD/TEU
Transport expenses per TEU decreased by -207 USD/TEU driven by lower bunker costs and initial cost synergies Transport expenses [USD m] Transport expenses per TEU [USD/TEU] Transport expenses 1,490 1,404 1,840 [EUR m] Q1 2014 1,375 +5.0% Raw materials and supplies -150 8,053 7,669 Port, canal and te
Slide 24: Benefits from reduced bunker price and consumption
Benefits from a reduced bunker price and consumption – Change in bunker mix due to emission control areas Bunker price [Rotterdam; USD/mt] Bunker consumption [mt/slot; mt/TEU; k mt] 1,029 MFO -15% 922 Bunker cons. 4.09 822 MDO per slot1) 3.83 3.24 606 Bunker cons. 0.52 0.50 per TEU 0.46 644 602 462
Slide 25: Improved capital structure – Equity at USD 5.1 bn
Hapag-Lloyd further improved its capital structure – Equity at USD 5.1 bn (equity ratio: 42%) Enhanced equity base Strengthened liquidity reserve Liquidity Equity [EUR m] 2,915 4,170 4,781 reserve1) 534 922 1,022 [EUR m] 5,068 5,136 1,120 1,098 4,013 735 Liquidity Equity 865 832 reserve1) 640 [USD m
Slide 26: Positive free cash flow in Q1 2015
Hapag-Lloyd generated a positive free cash flow in Q1 2015 Cash flow Q1 2015 [USD m] Operating Investing Financing cash flow cash flow cash flow 220 -202 -50 Free cash flow = USD 18 m 1,120 -13 1,098 -86 256 319 -247 174 -164 265 46 -59 0 865 832 Liquidity EBITDA Working Other effects Invest- Desinv
Slide 27: Expects significant improvement in profitability in 2015
On the basis of Q1 2015, Hapag-Lloyd expects a significant improvement in profitability in 2015 Guidance for 2015 Comments Guidance for 2015 based on pro-forma inclusion of Transport CCS for 2014 – however, one-off volume and rate Largely unchanged volume effects not taken into account in the guid
Slide 28: 28
28
Slide 29: Income statement of Hapag-Lloyd [USD m]
Income statement of Hapag-Lloyd [USD m] Income statement Transport expenses Q1 Q1 Q1 Q1 ∆ ∆ 2015 2014 2015 2014 1,774 1,399 375 Transport expenses 2,071.8 1,923.5 148.3 Transport volume [TTEU] Cost of raw materials, supplies and purchased goods 312.3 456.6 -144.3 Freight rate [USD/TEU] 1,331 1,422 -
Slide 30: Balance sheet of Hapag-Lloyd [USD m]
Balance sheet of Hapag-Lloyd [USD m] Assets Equity and liabilities 31.03.2015 31.12.2014 ∆ 31.03.2015 31.12.2014 ∆ Goodwill 1,672.1 1,672.0 0.0 Equity 5,136.0 5,068.1 67.8 Other intangible assets 1,571.1 1,591.9 -20.9 Provisions 937.0 981.3 -44.2 Property, plant and equipment 6,496.6 6,291.4 205.2 I
Slide 31: Solid long-term and diversified financing portfolio
Solid long-term and diversified financing portfolio Debt maturity profile [USD m] 1,166 813 816 2711) 633 322 1,026 607 1002) 322 274 395 428 304 385 248 268 61 23 49 36 37 38 36 79 19 23 26 28 29 -2 Q2 - Q4 2016 2017 2018 2019 ≥ 2020 2015 Liabilities to banks Bonds Liabilities from finance lease co
Slide 32: Hapag-Lloyd has issued three bonds on debt capital markets
Hapag-Lloyd has issued three bonds on debt capital markets EUR Bond 2019 EUR Bond 2018 USD Bond 2017 Issuer Hapag-Lloyd AG Hapag-Lloyd AG Hapag-Lloyd AG Volume EUR 250 m EUR 400 m USD 250 m Minimum order 100,000 EUR 100,000 EUR 150,000 USD Issue date November 20, 2014 September 20, 2013 October 01,
Slide 33: Hapag-Lloyd bonds continuously trade above par
Hapag-Lloyd bonds continuously trade above par Hapag-Lloyd bonds 110 105.5 104.8 103.9 100 90 80 Jan/ 13 Mai/ 13 Sep/ 13 Jan/ 14 Mai/ 14 Sep/ 14 Jan/ 15 Mai/ 15 HL USD 9.75% 2017 HL EUR 7.75% 2018 HL EUR 7.50% 2019 Hapag-Lloyd YTW 10% 8% 6.18% 6% 5.71% 4% 5.31% 2% 0% Jan/ 14 Feb/ 14 Mrz/ 14 Apr/ 14
Slide 34: Imbalances: Hapag-Lloyd outperforms the market
Imbalances: Hapag-Lloyd outperforms the market Number of full non-dominant leg containers Container Steering per 10 full dominant leg containers1) Dominant 10 Special Know-How/ IT leg Trans- 5.5 Advantageous customer pacific 6.2 portfolio Cost-efficient management of Trans- 7.0 equipment flows atlan
Slide 35: Long-standing and diversified customer base
Long-standing and diversified customer base of blue chip customers and a diversified base of goods transported Highly diversified customer base1) Strong relationship with blue chip customers 100% Top 50 Customers 32% (∑ = 35%) 23% 10% 9% 9% 16% TOP 10 TOP TOP TOP TOP > 500 Total Hapag-Lloyd has a hi
Slide 36: Investor Relations contact
Henrik Schilling Senior Director Investor Relations Tel +49 40 3001-2896 Fax +49 40 3001-72896 Henrik.Schilling@hlag.com http://www.hapag-lloyd.com/en/investor_relations/overview.html 36
Slide 37: Disclaimer
Disclaimer STRICTLY CONFIDENTIAL This presentation is provided to you on a confidential basis. Delivery of this information to any other person, the use of any third-party data or any reproduction of this information, in whole or in part, without the prior written consent of Hapag-Lloyd is prohibite