Hapag-lloyd Ag · XETR:HLAG
Hapag-lloyd — Investor Day (November 2021)
60 slides from Hapag-lloyd's investor day presentation, Nov 17, 2021
Slide 1: Prepare for tomorrow – Virtual CMD 2021
Prepare for tomorrow Virtual CMD 2021 17 NOVEMBER 2021 | HAMBURG 1
Slide 2: Today's presenters
TODAY‘S presenters Rolf Habben Jansen CEO Mark Frese CFO 2
Slide 3: Agenda
AGENDA 1 | Strategy 2023 Recap 2 | Sustainability Strategy 10 min BREAK 3 | Prepare for Tomorrow – Simplify, Strengthen, Invest 4 | Wrap-up & Targets 3
Slide 4: Strategy 2023 Recap
€€ Hapag-Lloyd Strategy 2023 Recap
Slide 5: Starting point for Strategy 2023 back in 2018
Starting point for Strategy 2023 back in 2018 The industry has gone through a needed and unprecedented wave of consolidation 1 Hapag-Lloyd reached competitive scale and improved profitability through the 2 mergers with CSAV and UASC Going forward, the container shipping industry will no longer be so
Slide 6: Quality is at the heart of our Strategy 2023
Quality is at the heart of our “Strategy 2023” Deliver unparalleled quality, be customer-oriented, and Number create value for customers one for as well as for Hapag-Lloyd quality Insert picture Reinforce Be profitable strongholds, throughout Profit- Global Expand in key the cycle ability Player gro
Slide 7: Core elements to achieve the goals of our Strategy 2023
Core elements to achieve the goals of our Strategy 2023 Continuously earn and Mid and long-term differentiating strategy Sustainable keep the “right to play” Value Creation No. 1 Environmental Continuous Quality Carrier Responsibility Cost Management Superior Land Best-in-class Side Capabilities Web
Slide 8: We have achieved our financial targets earlier than expected
We have achieved our financial targets earlier than expected thanks to a prudent financial policy and the extraordinary market environment Equity ratio ROIC 45% IFRS 16 WACC IFRS 16 55% 59.6% 44% 10.6% 41% 41% 41% 6.1% 3.1% 3.7% 2017 2018 2019 2020 9M 2021 2017 2018 2019 2020 9M 2021 Liquidity Net L
Slide 9: We have launched the first quality promises
We have launched the first 8 quality promises and have made major progress on achieving our quality targets TIMELY & BOOKED & ACCURATE LOADED AS FAST ISSUE RELIABLE RESPONSIVE DOCUMENTATION AGREED RESOLUTION TRANSPORT SERVICE Timely and correct Bill Loaded as Booked Efficient Cargo Schedule … of Lad
Slide 10: More than 20% of our business is generated through Quick Quotes
More than 20% of our business is generated through Quick Quotes a channel that did not exist 3 years ago QUICK QUOTES VOLUME DEVELOPMENT SINCE LAUNCH BOOKINGS VIA QQ (MTEU) Volume +134% ‘000 TEUs 2,3 280 Immediate 1,4 1,0 booking 260 240 2019 2020 2021 YTD 220 24/7 200 Accessibility 180 160 QQ SHARE
Slide 11: We strengthened our position in attractive markets
We strengthened our position in attractive markets by acquiring NileDutch and expanding our liner services SERVICES NILEDUTCH Established new services to and from Africa, Acquisition of Africa specialist NileDutch Middle East, India and Asia OFFICES Opened new offices in growth markets like Ukraine,
Slide 12: We need to draw our conclusions!
In the last 2 years the world has changed more than anyone could have imagined We need to draw our conclusions! Spot rates have skyrocketed as demand has bounced back much faster than originally expected The sharp rise in demand and supply chain bottlenecks led to an upward pressure on transport cos
Slide 13: Spot rates have skyrocketed as demand has bounced back
Spot rates have skyrocketed as demand has bounced back much faster than originally expected but transport cost are also rising significantly Spot freight rate development Hapag-Lloyd bunker consumption price (SCFI in USD/TEU) (in USD/t) 5.000 4.536 600 IMO 2020 related 514 4.000 500 3.000 400 2.000
Slide 14: Changed consumption patterns from services to physical goods
Changed consumption patterns from services to physical goods outlined the vulnerability and dependencies of global supply chains US consumption expenditures Global schedule reliability 120% 100% 115% 80% 110% 105% 60% 100% 40% 95% 90% 20% 85% Goods Services 80% 0% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Jan 20 Apr
Slide 15: Our Strategy 2023 targets remain valid, but focus on Quality and Sustainability
Our Strategy 2023 targets remain valid, but we need to focus even more on Quality and Sustainability Be profitable Global Player #1 for Quality Sustainability We reached our financial and We are a global player, but high We made good progress to We have met our environmental profitability targets ea
Slide 16: Sustainability Strategy
— €€ Hapag-Lloyd Sustainability Strategy
Slide 17: Sustainability has been in our DNA for many years
Sustainability has been in our DNA for many years … 1992 Implementation of Quality Management 1994 New Certification according 1st Hapag-Lloyd Dual-fuel conversion Green Financing for Sustainability to ISO quality standards Sustainability Report “Brussels Express” 12 dual-fuel ULCV’s Strategy 1996 B
Slide 18: … and we have already achieved a lot
… and we have already achieved a lot Significantly reduced Measures taken consumption and emissions Dual-fuel propulsion Biofuel use -58% Bunker Optimized bulbous bows and propellers consumption (mt/slot) vs. 2009 Digital based biofouling management Fitting of vessels with onshore power equipment -4
Slide 19: We need to do more to serve our stakeholders
But we need to do more by setting new and further targets to continue sustainably serving our stakeholders … Regulatory Customers requirements requirements Capital market Other stakeholder requirements requirements 19
Slide 20: … and to achieve the targets of the Paris Agreement
… and to achieve the targets of the Paris Agreement Climate change is the biggest problem of modern age Shipping is one of the world‘s most carbon efficient modes of transport … … but is collectively responsible for 3% of all CO2 emissions We need to further minimize the environmental impact
Slide 21: Our comprehensive sustainability strategy for the next 10 years
With our comprehensive sustainability strategy, we will set our course for the next 10 years Clean shipping & future- Diversity & Compliance & proof propulsion society responsibility Greenhouse Resource Diversity Gases Conservation Corporate Clean Air Transport Care Citizenship Sustainable Biodivers
Slide 22: Pursuing decarbonization with determination
Pursuing decarbonization with determination We have set ourselves ambitious targets to reduce emissions & advance propulsion technologies. Reduction of CO2 intensity Targets Reduce CO2 intensity of the entire fleet by 30% by 2030 EEOI vs. 2019; in line with reduction of 60% AER1 vs. 2008 -30% of t
Slide 23: Measures to achieve our GHG reduction targets
Measures to achieve our GHG reduction targets Operational efficiency improvements will be accompanied by long-term Fleet & Fuel related measures Fleet Portfolio Fuels New vessels Transition from fossil 10 new fuel efficient 13k TEU vessels fuels to bio-/e-fuels 12 new dual-fuel 23k TEU vessels
Slide 24: The future of the shipping industry
The future of the shipping industry Will be shaped by the transition from fossil fuel to low/zero carbon bio- and electro fuels Past Today 2030+ Fossil fuel pathway Biofuel pathway Electro fuel pathway Currently default option – Short-term available solution but Only true CO2-neutral Types of fuel w
Slide 25: Creating demand signals for alternative fuels with partners
We are already creating concrete demand signals for alternative fuels together with many partners Hapag-Lloyd is member of the … Ambition & resources Getting to Zero Coalition Alliance of more than 150 companies within the Committed to getting commercially viable deep sea zero emission maritime, e
Slide 26: Continuously reduce emissions of air pollutants
Continuously reduce emissions of air pollutants Hapag-Lloyd made good progress in … Targets Measures protecting human health & the environment Continuous reduction of emissions of air Creating transparency regarding pollutants, such as sulphur and nitrogen land transports oxides Hapag-Lloyd su
Slide 27: Ensuring standards along the entire transport chain
Ensuring standards along the entire transport chain Hapag-Lloyd upholds … Targets Measures social, economic, ecological and quality Developing a sustainable supply chain path Expanding existing supplier database, documenting duty of care as well as standards data on emissions of suppliers Adapti
Slide 28: Continuing to become more diverse
Continuing to become more diverse Hapag-Lloyd is embracing diversity by focusing on … Targets gender diversity & cultural diversity Increase gender diversity Increase the share of female employees across the entire group in management trainee programs to 50% by 2023 Increase cultural diversity
Slide 29: We will continue to strengthen our local engagement
We will continue to strengthen our local engagement Hapag-Lloyd bears responsibility … Targets Measures for social and environmental issues Boosting engagement in social activities “Hapag-Lloyd cares” Framework to specifically engage in local Focusing on initiatives Partners & Projects Educa
Slide 30: Conserving resources within circular economy
Conserving resources within circular economy Hapag-Lloyd is a founding member … Targets Measures of the Ship Recycling Transparency Initiative Hapag-Lloyd is committed to Boost the share of containers recycling 100% of its own ships with steel floors through in a sustainable way long-term asset
Slide 31: Safety and well-being of crews, cargo and environment
Focusing on the safety and well-being of our crews, cargo and the environment Hapag-Lloyd is thriving to … Targets Measures permanently enhance services Focusing on transport safety by ensuring Establishing a central monitoring system the safety and well-being of crew, cargo Increase transparenc
Slide 32: We want to protect the oceans and marine wildlife
We want to protect the oceans and marine wildlife Hapag-Lloyd is actively working on … Targets Measures preserving the health of oceans Within the own fleet Analyze the environmental data of our fleet Zero breaches of regulations related Make sure that ballast water treatment to ballast water
Slide 33: Sustainability Council as a sparring partner
We have established a Sustainability Council as a strong sparring partner for our sustainability actions Hapag-Lloyd is actively responding to … Purpose Composition feedback from external members from the science, Establishment of an expert panel 6 external, well-known sustainability politics, U
Slide 34: Wrap-up: Climate change is one of the biggest challenges
Climate change is one of the biggest challenges of our time We will do more WRAP to find solutions to reach our ambitious targets up Ambitious and comprehensive Sustainability Strategy developed We have elevated Sustainability as an integral part of our path to quality leadership in our industry Foc
Slide 35: Questions & Answers
QUESTIONS & ANSWERS 35
Slide 36: Prepare for tomorrow
Prepare for tomorrow
Slide 37: Recap: Strategy 2023 targets remain valid
Recap: Our Strategy 2023 targets remain valid, but we need to focus even more on Quality and Sustainability Be profitable Global Player #1 for Quality Sustainability We reached our financial and We are a global player, but high We made good progress to We have met our environmental profitability tar
Slide 38: In the last 2 years the world has changed
In the last 2 years the world has changed more than anyone could have imagined COVID-19 PANDEMIC The pandemic shifted consumer spend to physical goods with severe impact on supply chains DIGITIZATION & INNOVATION The pace of digitization was boosted and we experienced strong growth in our online bus
Slide 39: Three pillars: Simplify, Strengthen, Invest
To prepare for tomorrow and to achieve our strategic targets we have refined our priorities for the coming 2 years along 3 pillars 1 2 3 SIMPLIFY STRENGTHEN INVEST Simplify customer segmentation & Double-down on our ambition Invest in our people, sustainable experience and reduce internal to become
Slide 40: 1 | Simplify
1 | Simplify We will deliberately simplify the customer experience, improve the ease of doing business with us and reduce internal complexity Improve customer experience and reduce complexity. SEGMENTS & NETWORK & EXPERIENCE FLEET Design differentiated E2E customer journeys by segment Simplify N
Slide 41: E2E customer experience
E2E customer experience Improved customer experience and productivity expected from digitization and automation initiatives CUSTOMER CUSTOMER E2E GLOBAL & QUALITY SEGMENTATION JOURNEYS AUTOMATION SERVICES CENTERS Simple and clear customer Well designed customer Customer self-service & digital
Slide 42: Network and fleet
Network and fleet Simplification and rationalization of our network will help drive down complexity and slot cost The complexity of our network has Focus on fewer and larger vessels historically grown Some trades have a high Reduce network complexity to number of services with long improve opera
Slide 43: Hub and transshipment
Hub and transshipment Consolidate to reduce complexity and enhance quality REDUCE COMPLEXITY Networks that provide the highest quality are networks that are less complex Reduce number of hubs served INCREASE RELEVANCE Good access to terminals is critical for schedule reliability Gain more op
Slide 44: Imbalance & Depot
Imbalance & Depot Global steering and a smaller and more cost-optimal depot network will reduce our cost at increased quality HLAG DEPOT NETWORK DEPOT In some areas we have a high-density network that has historically grown For optimal cost we require a smaller depot landscape fully aligned with
Slide 45: 2 | Strengthen
2 | Strengthen Double-down on our efforts to become #1 for Quality Revenue Management Deliver Revenue Management Excellence Delivering Operational Quality Deliver Operational Quality Accelerate Digitization & Digitization and invest in innovation and Innovation future proof core IT Grow in A
Slide 46: Customer Quality
Customer Quality We want to improve customer quality and user experience by delivering operational excellence and accelerating IT innovation REVENUE OPERATIONAL DIGITIZATION MANAGEMENT QUALITY AND INNOVATION We aim to provide our customers with a Ensure vessels and boxes are on time, We will m
Slide 47: Attractive Markets
Attractive Markets By continuing the successful program we will further strengthen our position in important geographies AMBITION REGIONS Strengthen our presence in a variety of growth Build on our strength in stronghold markets and develop and markets around the world supporting our implement tailo
Slide 48: Inland
Inland We will increase the efforts to fulfill our ambition to become a true door-to-door carrier Quality product offering Premium Offer a standardized quality base product features Reliable physical transport through secured capacity and VAS Standardized Improved real-time tracking base produ
Slide 49: 3 | Invest
3 | Invest Safeguard long-term competitiveness through investments into people and strategic assets along our value chain Invest in our people, sustainable assets and PEOPLE AND ECO-FRIENDLY long-term competitiveness CAPABILITIES VESSELS Invest in people & capabilities Invest in eco-friendly ves
Slide 50: People, Vessels and Equipment
People, Vessels and Equipment We will invest in our people, sustainable assets and long-term competitiveness PEOPLE AND CAPABILITIES ECO-FRIENDLY VESSELS EQUIP. & CONTAINER INNOVATION Invest in a large scale capability building Add new dual-fuel vessels Equip our dry container fleet with IoT p
Slide 51: Selective M&A
Selective M&A In order to strengthen the core business we need consider selective investments in- and outside our current scope Terminal & Complementary Core Liner Infrastructure Services Target picture Strengthen the core and improve quality through equity investments and acquisitions 51
Slide 52: Recent investments and acquisitions
Recent investments and acquisitions We already started to execute on our investment targets JadeWeserPort 30% stake in Container Terminal Wilhelmshaven (CTW) and 50% stake in Rail Terminal Wilhelmshaven (RTW) Strengthens position of German ports and reinforces our competitiveness, especially in the
Slide 53: Wrap-up and targets
Wrap-up and targets
Slide 54: Priorities for the coming years until end 2023
Priorities for the coming 2 years until end 2023 1 2 3 SIMPLIFY STRENGTHEN INVEST Simplify customer segmentation & Double-down on our ambition Invest in our people, sustainable experience and reduce internal to become #1 in quality assets and long-term competitiveness complexity 54
Slide 55: Our overarching Strategy 2023 targets
Our overarching Strategy 2023 targets Be Profitable Global Player #1 for Quality Sustainability Accelerator Prove we can earn our cost of Keep our global market share Achieve best in class customer Drive decarbonization in the capital through the cycle of > 10% in all our key trades experience for o
Slide 56: Our long-term financial targets remain valid
Our long-term financial targets remain valid Profitability Net Leverage Liquidity ROIC > WACC ≤ 3.0x ~USD 1.1 bn throughout the cycle Net Debt/EBITDA liquidity reserve We want to earn our cost We strengthen resilience We will always retain of capital through the cycle with adequate leverage sustaina
Slide 57: We have updated our non-financial targets
We have updated our non-financial targets to reflect the even greater focus on quality and sustainability Net Promoter Score Schedule Reliability CO2 reduction Best in class Top 3rd -30% Net Promoter Score (NPS) in terms of schedule reliability CO2 reduction (EEOI) until 2030 vs. 2019 Superior Lands
Slide 58: Way forward
WAY FORWARD & Strategy 2023 Delivery 1 2 3 Refine initiatives and Continue to implement Start thinking about our investment opportunities Strategy 2023 strategy towards 2030 58
Slide 59: Questions & Answers
QUESTIONS & ANSWERS 59
Slide 60: Thank you!
Thank you! 60