Hapag-lloyd Ag · XETR:HLAG
Hapag-lloyd — H1 2020 Earnings Presentation
30 slides from Hapag-lloyd's earnings presentation, Aug 14, 2020
Slide 1: Investor Presentation H1 2020 Results
Investor Presentation H1 2020 Results 14 August 2020
Slide 2: Opening Remarks
Opening Remarks COVID-19 pandemic led to substantially declining global transport volumes in Q2 2020 In response to the decline in demand, we implemented an extensive blank sailings program to adjust our cost 1 Current situation base accordingly In addition, we have launched our Performance Safeguar
Slide 3: COVID-19 has weakened global transport volumes in Q2 2020, requiring capacity adjustments
1 Current situation COVID-19 pandemic has weakened global transport volumes in Q2 2020, which required carriers to adjust capacity to save cost… Development of global transport volume Global carrier capacity measures [% of total capacity] 2019 2020 9% 100% Q2 2019 Q2 2020 12% 16% 15% 12% TEU 43.3 m
Slide 4: Sudden drop of the oil price resulted in significantly lower bunker cost in Q2
1 Current situation …and the sudden drop of the oil price resulted in significantly lower bunker cost in Q2 Weekly CCFI development Bunker price development 1,000 600 550 950 500 450 900 400 350 850 300 250 800 200 150 750 100 50 2020 RTM VLSFO 0.5% 2019 RTM HSFO 3.5% 2020 2019 2020 RTM HSFO 3.5% 70
Slide 5: Well positioned and focused on Strategy 2023 and the PSP program
1 Current situation We are well positioned and remain focused on the implementation of our Strategy 2023 and the PSP program OUR TEAM OUR BUSINESS OUR FOCUS Situation worldwide is being closely Volumes dropped by a low double- Performance Safeguarding Program monitored and we will steadily dig
Slide 6: Very solid result in the first half year 2020 despite volume decline
2 Financials In spite of COVID-19 related volume decline, we recorded a very solid result in the first half year 2020 Operational KPIs P&L effects Volume declined by -3.5% YoY due to COVID-19 H1 revenue was almost stable (-0.6% YoY), Volume 5,755 Revenue 7,005 impact on almost all trades, but mainly
Slide 7: PSP measures and higher freight rates significantly improved earnings YoY
2 Financials As a result of our PSP measures and slightly higher freight rates, we were able to significantly improve our earnings YoY Revenue [USD m] EBITDA [USD m] - 0.6 % + 19.2 % 7,047 7,005 1,287 + 46.8 % 1,080 - 6.9 % 770 524 3,569 3,321 14.7% 23.2% Margin 15.3% 18.4% Q2 2019 Q2 2020 H1 2019 H
Slide 8: Volumes declined by 3.5% YoY in H1 2020
2 Financials Volumes declined by 3.5% YoY in H1 2020, mainly impacted by a sharp global decline in transport volume in Q2 due to COVID-19 Transport volume development by trade Q1 2019 – Q2 2020 [TTEU] H1 2019 H1 2020 5,966 - 3.5 % 5,755 - 11.1 % 3,038 3,045 3,026 3,053 2,929 513 489 489 481 2,701 47
Slide 9: Freight rates increased by 3.1% YoY in H1 2020
2 Financials Freight rates increased by 3.1% YoY in H1 2020, the sharp drop in bunker prices end Q1 / early Q2 will reduce bunker surcharges in Q3 Freight rate [USD/TEU] vs. Bunker price development [USD/mt] H1 2019 H1 2020 Average freight rate 1,071 + 3.1% 1,104 + 4.8% 1,114 1,094 1,079 1,084 1,063
Slide 10: Bunker expenses per unit rose by 6% YoY
2 Financials Bunker expenses per unit rose by 6% YoY mainly due to the switch to more expensive low-sulphur fuel in H1 2020… Bunker expenses per TEU [USD/TEU] Bunker price development + 6.0% 600 H1 2019 H1 2020 550 156 214 165 158 21* 153 500 109 193 450 130 -21* 400 Q1 2019 Q2 2019 Q1 2020 Q2 2020
Slide 11: Ex-bunker unit cost in line with previous year
2 Financials …whereas ex-bunker unit cost were in line with previous year Transport expenses per unit [USD/TEU] H1 2019 1,021 Costs for “Vessel and voyage” decreased due to network Bunker 9 optimization (blank sailings) and higher share of charter vessels considered as Right of Use (RoU) Handling -3
Slide 12: Interest burden clearly reduced; valuation effects weigh on financial result
2 Financials Interest burden clearly reduced – extraordinary valuation effects weigh on financial result Extraordinary interest result items [USD m] HLAG Bond trading 110 -5 pp 105 H1 2019 interest result -254 100 95 90 Rate & volume reduction 56 85 80 Bond option valuation -16 Comments On the back
Slide 13: Strong free cash flow generation of USD 1,177 m in H1 2020
2 Financials Good earnings development and prudent investment strategy resulting in strong free cash flow generation of USD 1,177 m in H1 2020 Cash flow H1 2020 [USD m] Operating Investing Financing cash flow cash flow cash flow 1,329 -152 -60 -597 1,263 -287 -226 1,876 42 -164 -27 20 -9 -180 185 -7
Slide 14: Net debt further reduced and leverage ratio improved to 2.6x
2 Financials We have further reduced our net debt and substantially improved our leverage ratio to 2.6x Equity base [USD m] Net debt [USD m] 40.9% Equity ratio 39.2% 7,180 Financial Debt 8,058 3.0 Net Debt / EBITDA 2.6x 7,430 7,500 6,605 6,367 31 December 2019 30 June 2020 31 December 2019 30 June 2
Slide 15: Performance Safeguarding Program (PSP) launched to protect against COVID-19 downside risk
2 Financials Performance Safeguarding Program (PSP) launched to protect against downside risk of COVID-19 and to safeguard earnings and liquidity Cost savings Investment prioritization Substantial capacity measures taken in coordination with our THE Alliance partners to mitigate variable costs I
Slide 16: Container transport volume 2020e significantly affected by COVID-19
3 Market update Container transport volume 2020e is significantly affected by COVID-19 but not quite as severe as initially expected GDP vs. global container volume growth [%] GDP Container volume growth 6.8% 4.7% 5.4% 3.4% 4.1% 2.9% 3.9% 3.6% 1.7% 2.0% -4.9% -7.2% 2016 2017 2018 2019e 2020e 2021e 1
Slide 17: Idle fleet down from May peak; orderbook activity at historical low
3 Market update Idle fleet down from its peak in May to 5.1% as demand picks up slowly – Orderbook activity remains at historical low Orderbook-to-fleet Newly placed orders [TEU m, %] [TEU m] Orderbook 61% Vessels > 13,999 TEU 2.0 2.2 1.8 6.5 50% Share of world fleet 1.1 1.2 6.0 0.8 0.7 38% 0.4 0.2
Slide 18: Quick responses necessary in H2 to ensure adequate supply
3 Market update Focus and quick responses continue to be necessary in H2 to ensure adequate supply in a volatile and difficult to predict demand situation Net capacity growth in 2020e Supply / Demand balance 5.0% Demand Supply Potential active fleet growth -0.7% -1.7% 8.0% 6.3% 6.8% 2.6% 5.6% 4.7% 4
Slide 19: Earnings outlook confirmed, subject to considerable uncertainties
4 Way forward Earnings outlook confirmed – subject to considerable uncertainties due to COVID-19 pandemic FY 2019 2018 Outlook for 2020 EBITDA and EBIT outlook ranges confirmed; however, outlook is subject to significant uncertainties related to the Transport volume 12,037 TTEU COVID-19 pandemic Out
Slide 20: Our priorities for the coming months remain unchanged
4 Way forward Our priorities for the coming months remain unchanged Ensure the safety of our employees and fully support our customers to safeguard uninterrupted supply chains Focus on execution of the Performance Safeguarding Program and tracking of cost cutting measures Keep track on execution of
Slide 21: Appendix
Appendix Appendix
Slide 22: Equity ratio of 39.2% and gearing of 84.9%
A Appendix Hapag-Lloyd with an equity ratio of 39.2% and a gearing of 84.9% Balance sheet [USD m] Financial position [USD m] million USD 30.6.2020 31.12.2019 million USD 30.6.2020 31.12.2019 Assets Financial debt 8,058.1 7,179.6 Non-current assets 15,540.9 15,501.0 Cash and cash equivalents 1,691.2
Slide 23: Positive EBIT of USD 563.2 m in H1 2020
A Appendix Hapag-Lloyd with positive EBIT of USD 563.2 m in H1 2020 Income statement [USD m] million USD Q2 2020 Q2 2019 YoY change H1 2020 H1 2019 YoY change Revenue 3,321.2 3,569.0 –7% 7,005.2 7,046.6 –1% Transport expenses –2,295.4 –2,790.5 –18% –5,209.9 –5,450.7 –4% Personnel expenses –184.3 –18
Slide 24: Well balanced maturity structure of financial liabilities
A Appendix Well balanced maturity structure of financial liabilities Financial Debt Profile as per 30 June 20201), [USD m] 1,975 Facility 30 June 2020 [USD m] Vessel Financings 3,371 1,6022) Container Financings 1,312 Total Vessel & Container 4,683 282 EUR Bond 2024 504 1,279 1,285 1,173 Total Bonds
Slide 25: Hapag-Lloyd's shareholder structure
A Appendix Hapag-Lloyd`s shareholder structure Shareholders‘ agreement/ Controlling shareholders 3.6% Kühne Maritime GmbH / Kühne Holding AG 10.2% CSAV Germany Container Holding GmbH HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH 30.0% Qatar Holding Germany GmbH The Public
Slide 26: Share price development
A Appendix Share price development Performance since 1 January 2018 Indexed Price Frankfurt Stock Exchange / 600 Stock Exchange Hamburg Stock Exchange 500 Regulated market Market segment (Prime Standard) 400 ISIN / WKN DE000HLAG475 / HLAG47 300 Ticker Symbol HLAG 200 Nov/16 100 Primary listing 6 Nov
Slide 27: Bond trading
A Appendix Bond trading 110 100 100.9 Impacted by general uncertainty in the 90 financial markets 80 70 HL EUR 6.75 % 2022 HL EUR 5.125% 2024 EUR Bond 2024 EUR Bond 2022 Listing Open market of the Luxembourg Stock Exchange (Euro MTF) Volume EUR 450 m EUR 450 m ISIN / WKN XS1645113322 XS1555576641 /
Slide 28: Financial Calendar 2020
Financial Calendar 2020 19 February 2020 Preliminary Financials 2019 20 March 2020 Annual Report 2019 15 May 2020 Quarterly Financial Report Q1 2020 05 June 2020 Virtual Annual General Meeting 2020 14 August 2020 Half-year Financial Report 2020 13 November 2020 Quarterly Financial Report 9M 2020 28
Slide 29: 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 30: Hapag-Lloyd Investor Relations
Hapag-Lloyd Investor Relations Ballindamm 25 20095 Hamburg Tel: +49 (40) 3001-2896 ir@hlag.com All publication documents can be found here: https://www.hapag-lloyd.com/en/ir.html 30