Slide 1: Investor Presentation Preliminary Financials 2017
Investor Presentation Preliminary Financials 2017 Hamburg, 28 February 2018
Slide 2: 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 3: Opening Remarks
Opening Remarks We continued to deliver on our initiatives (UASC integration, cash capital increase & continuous cost control) 01 Deliverables Operating result (EBIT) of USD 466 m in FY 2017 (+234% YoY) in line with market expectation Sector fundamentals remain favourable 02 Sector Update Or
Slide 4: Throughout the year, we have continued to deliver on our initiatives
1 Deliverables Throughout the year, we have continued to deliver on our initiatives… € € € € 2017 2018 January / March 2017 February 2017 FY 2016 closed with May 2017 August 2017 Successful positive operating Closing of the H1 results bond refinancing results merger with UASC significantly higher of
Slide 5: Strengthened position as one of the Top 5 global container carriers
1 Deliverables …and have further strengthened Hapag-Lloyd’s position as one of the Top 5 global container carriers At a glance Deal rationale 1) 1) Combined Entity4) Strengthened market position Well-balanced Corporate HQ Hamburg Dubai Hamburg trades G6 Ocean 3 The Alliance Alliance (until (until (s
Slide 6: Synergies
1 Deliverables Total synergies of USD 435 m p.a. to be achieved from 2019 onwards – Significant synergy ramp-up in 2018 expected Synergy potential, full run-rate [USD m] USD 435 m Network Overhead Other Expected synergies Total transaction and integration related one-off costs are expected to amount
Slide 7: Demand: Container shipping growth remains healthy and constant
2 Sector Update Demand: Container shipping growth remains on a healthy and constant level driven by a solid global economic growth Global Container Trade & Global GDP Growth [%] 2015-2017 2018E-2020E GDP multiplier 1.1x 1.3x 5.1% 125 Global Container Trade 5.1% 120 115 4.9% +3.7% 110 4.7% +3.9% 105
Slide 8: Supply: Orderbook remains at a historically low level
2 Sector Update Supply: Orderbook remains at a historically low level, while almost no idle capacity is available Orderbook-to-fleet Orders placed [TEU m, %] [TEU m] 8 3.2 61% 7 2.0 2.2 6.5 50% 1.8 6.0 1.2 1.1 6 38% 0.6 0.7 0.4 0.2 0.2 5.0 27% 28% 0.1 5 21% 21% 2007 2008 2009 2010 2011 2012 2013 201
Slide 9: Mid-term supply/demand gap is further closing
2 Sector Update Even though, short term supply pressure will most likely persist, mid-term supply/demand gap is further closing Vessel deliveries by year [TEU m] Supply / demand balance 1.7 13.7% 14 1.5 1.5 1.5 12 1.4 1.4 1.4 9.7% 1.3 10 1.3 8.0% 8.4% 0.3 1.2 0.8 8 6.8% 1.2 6.3% 7.8% 6.1% 0.7 5.5% 5
Slide 10: Contracted freight rates have shown continuous recovery
2 Sector Update Contracted freight rates have shown continuous recovery and slightly less volatility Comprehensive Index (CCFI) Shanghai – Europe (CCFI) 1,100 CCFI Comprehensive Index 2,500 NEurope (USD/TEU) Mediter. (USD/TEU) 1,000 2,000 900 848 1,500 800 1,078 1,000 1,121 700 600 500 500 0 Jan Apr
Slide 11: Current consolidation wave leads to higher concentration
2 Sector Update Current consolidation wave leads to higher concentration Carrier capacity [TEU m] and global capacity share [%] Global capacity share [%] Global capacity share [%] 14% 13% 8% Top 5 2.5 Ranking end of 2013 2.3 Top 6-10 Remaining 1.5 4% 4% 4% 4% 3% 3% 3% 3% 3% 2% 2% 2% 2% 2% 2% 2% 1% 4
Slide 12: Transport volume up 4.8% YoY, freight rates up 9.4%
3 Financials On a pro-forma basis: Transport volume was up by 4.8% YoY, while freight rates have exceeded previous year’s level by 9.4% Transport volume [TEU m] Freight rate [USD/TEU] 1,300 2016 2017 +4.8% 1,200 1.036 +1.4% 1,051 10,698 11,212 1,100 1,000 9,803 7,599 +29% 900 928 +9.4% 1,015 800 201
Slide 13: Significantly improved EBIT of USD 466 m while EBITDA almost doubled
3 Financials We have achieved a significantly improved EBIT of USD 466 m while EBITDA almost doubled to USD 1,198 m in 2017 Operational KPIs Q4 2017 Q4 2016 ∆% FY 2017 FY 2016 ∆% Transport volume [TTEU] 2,774 1,949 +42% 9,803 7,599 +29% Freight rate [USD/TEU] 1,030 1,033 0% 1,051 1,036 +1% Revenue [
Slide 14: Solid equity at USD 7.3 bn and strong liquidity reserve at USD 1.3 bn
3 Financials Solid equity at USD 7.3 bn and strong liquidity reserve at USD 1.3 bn as well as higher net debt as a result of the merger with UASC Equity base [USD bn] Net debt [USD bn] Financial Debt 4.4 7.6 7.3 Cash 0.6 0.7 5.3 1) 6.8 3.8 Net Debt 31.12.2016 31.12.2017 31.12.2016 31.12.2017 Liquidi
Slide 15: Hapag-Lloyd with clearly defined financial policy
4 Way Forward Hapag-Lloyd with clearly defined financial policy Profitability going forward supported by improved fleet ownership structure Profitability and synergy realization Investments No planned new vessel investments in next years – Maximize free cash flow Deleveraging Clear target to signifi
Slide 16: Appendix
Slide 17: Convincing equity story resulted in higher share price
A Appendix Convincing equity story resulted in higher share price… Share trading 210 200 Frankfurt Stock Exchange / 190 Stock Exchange Hamburg Stock Exchange 180 170 160 150 Market segment / Regulated market (Prime Standard) / Index SDAX 140 130 120 110 ISIN / WKN DE000HLAG475 / HLAG47 100 90 80 70
Slide 18: ...and lower bond yields
A Appendix …and lower bond yields Bonds trading 110 105 105.1 101.8 101.4 100 100.0 95 HL EUR 7.75% 2018 HL EUR 7.50% 2019 HL EUR 6.75% 2022 HL EUR 5.125% 2024 EUR Bond 2024 EUR Bond 2022 EUR Bond 2019 EUR Bond 2018 Listing Open market of the Luxembourg Stock Exchange (Euro MTF) Volume EUR 450 m EUR
Slide 19: Supply: Scrapping expected to stay at previous year's level
A Appendix Supply: Scrapping expected to stay at previous year’s level, while net capacity growth slightly exceeds last year’s growth Scrapping Average age [TTEU] Share of world fleet 2.0% 27 28 28 24 23 23 23 21 19 654 444 414 400 351 332 381 193 131 75 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 20: Scale: Top 5 players now make up more than 64% capacity share
A Appendix Scale: On important trades TOP 5 players now make up more than 64% capacity share TOP 5 concentration on individual trades (2013 versus 2018) Atlantic Latin America Far East Transpacific Middle East / Indian Subcontinent 81% 82% 79% 79% 73% 67% 64% 59% 41% 43% 2013 2018 (incl. announced m
Slide 21: Spot rates with continued recovery since historic low in Q2 2016
A Appendix Spot rates with continued recovery since historic low in Q2 2016 Comprehensive Index (SCFI) Shanghai – Europe (SCFI) 1,500 Comprehensive Index SCFI 2,500 NEurope (USD/TEU) Mediter. (USD/TEU) 2,000 1,000 854 1,500 1,000 916 500 797 500 0 0 Jan. Apr. Juli Okt. Jan. Apr. Juli Okt. Jan. Apr.
Slide 22: Capital increase successfully completed - key terms of the rights issue
A Appendix Capital increase successfully completed – Key terms of the rights issue 11,717,353 new shares (c. 7.1 % of current share Offer size capital), resulting in EUR 351.5 m of gross proceeds Shareholders‘ agreement/ Controlling shareholders Freefloat EUR 30 per share (17.8 % discount to XET
Slide 23: Hapag-Lloyd Investor Relations
Hapag-Lloyd Investor Relations Tel +49 40 3001-2896 Fax +49 40 3001-72896 ir@hlag.com https://www.hapag-lloyd.com/en/ir.html 23