Eimskipafelag Islands Hf. · OMXICE:EIM

Eimskipafelag Islands Hf — Q1 2018 Earnings Presentation

29 slides from Eimskipafelag Islands Hf's earnings presentation, May 18, 2018

  1. Slide 1: Growth in Revenue and Volume but Lower Earnings

    GROWTH IN REVENUE AND VOLUME BUT LOWER EARNINGS Financial Results - Q1 2018 18 May 2018

  2. Slide 2: Key Highlights for Q1 2018

    KEY HIGHLIGHTS FOR Q1 2018 Growth in revenue and volume but lower earnings Liner revenue Affecting revenue Revenue EUR 100.6 m + Volume growth up 9.3% EUR 155.5 m Forwarding revenue + New group companies ÷ International freight up EUR 12.0 m EUR 54.9 m rates up 6.7% ÷ Currency Affecting EBITDA Liner

  3. Slide 3: Transported Volume in Q1 2014 to Q1 2018

    TRANSPORTED VOLUME IN Q1 2014 TO Q1 2018 Growth in forwarding driven by dry cargo when reefer is down LINER SERVICES FORWARDING SERVICES 12% 160 30% 250 10% 140 25% 200 8% 120 20% 6% 100 150 4% 80 15% 2% 60 100 10% 11.0% 8.1% 3.0% 4.0% 0% 40 3.2% 50 5% -2% 20 20.6% 0.8% 5.9% 28.9% 10.0% -4% 0 0% 0 2

  4. Slide 4: Liner Services Volume

    LINER SERVICES VOLUME Increase in Trans-Atlantic volume by 28% 6% 14% 11% Q1 2018 69% Iceland Faroe Islands Norway Trans-Atlantic 4

  5. Slide 5: Forwarding Services Volume

    FORWARDING SERVICES VOLUME Growth in dry cargo 30% Q1 2018 70% Reefer Dry 5

  6. Slide 6: Revenue and EBITDA 2014 to 2018 by Quarter

    REVENUE AND EBITDA 2014 TO 2018 BY QUARTER Solid revenue growth but EBITDA affected by increased capacity in the sailing system and lower reefer cargo in forwarding 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 2

  7. Slide 7: Financial Results

    oy EMU A 469573 2 A 469 653 3 = a en ee . IMU. 469 056 0

  8. Slide 8: Income Statement Q1 2018

    INCOME STATEMENT Q1 2018 The first quarter is generally the slowest quarter of the year Revenue Expenses EBITDA EUR 155.5 m EUR 148.3 m EUR 7.3 m up 8.4% up 10.5% down 22.1% Depreciation and Net loss Net finance expense amortization EUR 1.6 m EUR 7.8 m EUR 1.1 m compared to compared to compared to n

  9. Slide 9: Expense Bridge

    EXPENSE BRIDGE Increase in total cost mainly due to increased activity 160 150 1,3 (0,9) 1,2 0.5 1,8 4,4 140 1,5 4,9 130 148,3 134,2 120 110 9

  10. Slide 10: China Forwarders Freight Index

    CHINA FORWARDERS FREIGHT INDEX Average price decreased by 15% between Q1 2017 and Q1 2018 1000 800 -15% 600 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 400 Source: www.shippingchina.com 11

  11. Slide 11: Bunker Price Development

    BUNKER PRICE DEVELOPMENT Average bunker price 21% higher in Q1 2018 compared to Q1 2017 450 400 350 21% 300 250 200 Bunker is largely hedged by 150 BAF and hedge agreements 100 50 Q1 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 price 13

  12. Slide 12: Geographical Split of Revenue

    GEOGRAPHICAL SPLIT OF REVENUE Minor changes in geographical split of revenue 4% 4% 7% 7% 47% 45% 26% 27% Q1 2018 Q1 2017 8% 8% 8% 9% Iceland Faroe Islands Iceland Faroe Islands Norway Europe Norway Europe Asia Other Asia Other 15

  13. Slide 13: Revenue by Business Segment

    REVENUE BY BUSINESS SEGMENT Similar split between segments 35% 36% Q1 2018 Q1 2017 65% 64% Liner services Forwarding services Liner services Forwarding services 16

  14. Slide 14: EBITDA by Business Segment

    EBITDA BY BUSINESS SEGMENT Liner segment affected by fishermen strike in 2017 | In 2018, the liner segment affected by increased capacity 43% 43% Q1 2018 Q1 2017 57% 57% Liner services Forwarding services Liner services Forwarding services 17

  15. Slide 15: Financial Ratios 2014 to Q1 2018

    FINANCIAL RATIOS 2014 TO Q1 2018 Increased leverage but strong financial position NET DEBT / LTM-EBITDA NET DEBT AND EQUITY RATIO EUR million EUR million 2,2 120 100% 2,0 Net debt 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%

  16. Slide 16: Cash Flow Bridge

    CASH FLOW BRIDGE Affected by CAPEX 30 2,0 (6,4) (0,7) 20 10,9 (7,4) 23,2 21,6 10 0 19

  17. Slide 17: 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 Q1 2018 Q1 Budget Operation Vessel dockings Investments 20

  18. Slide 18: Ongoing Projects and Future Development

    ONGOING PROJECTS AND FUTURE DEVELOPMENT 21

  19. Slide 19: Eimskip's Weekly Sailing System

    EIMSKIP’S WEEKLY SAILING SYSTEM Six sailing routes in the North Atlantic 14

  20. Slide 20: Investment in Additional Capacity on Container Routes

    INVESTMENT IN ADDITIONAL CAPACITY ON CONTAINER ROUTES Weekly service and increased capacity Own vessel Chartered vessel BLUE LINE RED LINE GODAFOSS DETTIFOSS POLLUX PERSEUS Built 1995 Built 1995 Built 2009 Built 2010 TEU 1,457 TEU 1,457 TEU 1,025 TEU 1,025 GT 14,664 GT 14,664 GT 11,550 GT 11,550 YEL

  21. Slide 21: Weekly Services on the Coastal Route

    WEEKLY SERVICES ON THE COASTAL ROUTE Connecting Iceland, Faroe Islands, Scotland and England  Weekly service on the coastal route  One additional vessel added to the Gray route  The annual cost of an additional vessel is around EUR 5 million  Growth in volume between Q1 2017 and Q1 2018 of 22% 

  22. Slide 22: Trans-Atlantic Trade

    TRANS-ATLANTIC TRADE 28% growth in TA volume between Q1 2017 and Q1 2018  Weekly service in Trans-Atlantic trade  One additional vessel added to the Green route  The annual cost of an additional vessel is around EUR 5 million  Volume increase is in line with expectations  Growth in volume betwe

  23. Slide 23: Strategic Priorities 2018

    STRATEGIC PRIORITIES 2018 Emphasis on continuous improvements Short-term initiatives to improve the operation and its profitability Strategic priorities for 2018  Strengthening of sailing system and infrastructure  Fine-tuning the sailing system  Improved IT solutions and IT innovation  Agreemen

  24. Slide 24: Investments

    INVESTMENTS Acquisitions and Joint Ventures  Eimskip continues to work on organic growth and strategic accretive acquisitions to increase shareholder value  The company is currently working on potential acquisitions in its core business  Evaluation of vessel investments will continue on an ongoin

  25. Slide 25: Eimskip and Royal Arctic Line

    EIMSKIP AND ROYAL ARCTIC LINE Building of vessels in China on schedule  Eimskip and Royal Arctic Line intend to share capacity on three vessels  Eimskip is building two 2,150 TEU ice class Polar Code container vessels in China  Built to the highest environmental standards  Contract price of each

  26. Slide 26: EBITDA Guidance for 2018

    EBITDA GUIDANCE FOR 2018 EBITDA in the range of EUR 57 to 63 million EUR million 70  The first quarter was challenging and below the company’s expectations 57-63  Investment in increased capacity in the sailing system 60  Reefer forwarding down due to trade tension in Africa region 50  Re-delive

  27. Slide 27: Questions

    QUESTIONS 30

  28. Slide 28: 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. — Q1 2018 Earnings Presentation on 6ix