Wallenius Wilhelmsen Asa · OSL:WAWI
Wallenius Wilhelmsen Asa — Investor Day (September 2024)
74 slides from Wallenius Wilhelmsen Asa's investor day presentation, Sep 25, 2024
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Slide 2: Capital Markets Day
Capital Markets Day Oslo 25 September 2024 09:00 – 13:00
Slide 3: Agenda
Agenda 09:00 – 09:03 Welcome and practical info with Anders 09:05 – 09:15 Ambitions and strategy with Lasse 09:15 – 10:00 Unlocking the value of terminals, processing and distribution with Mike 10:00 – 10:15 Coffee 10:15 – 10:45 The changing shape of fleet renewal with Morten & Lene 10:45 – 11:00 Ca
Slide 4: Ambitions and strategy
Ambitions and strategy Lasse Kristoffersen President and CEO
Slide 5: FY 2023 and 2024 EBITDA and dividends
FY 2023 EBITDA USD 1,807m Q1 24 EBITDA USD 438m Q2 24 EBITDA USD 507m Dividend 2023 - 1.14 USD Dividend H1 2024 - 0.61 USD Total amount to be paid to shareholders in 2024 - USD 738m
Slide 6: Two ways to approach fundamental changes in the industry
Two ways to approach fundamental changes in the industry ADAPT SHAPE
Slide 7: Integrated supply chain partner
Integrated supply chain partner
Slide 8: Market outlook with Hesnes Shipping
1 2 3 4 Market outlook 5 with Hesnes Shipping 6
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Slide 11: Unlocking the value of terminals, processing and distribution
Unlocking the value of terminals, processing and distribution Mike Hynekamp Chief Strategy & Corporate Development Officer
Slide 12: We provide a comprehensive global land-based logistics network
1.15 USD billion in revenues 8 Terminals handled We provide a 3 million units comprehensive global land- based logistics network 6.3% Logistics revenue CAGR 66 Centers handled 2019 - 2023 6.3 million vehicles 15% EBITDA margin 7687 Logistics employees 9.6% Of group EBITDA 28 Countries with WALWIL si
Slide 13: An integral part of customers' supply chains
An integral part of customers' supply chains 1. Factory 2. In-plant Processing Center 3. Inland Carrier 4. Terminal 5. Ocean Carrier 6. Terminal 7. In-terminal Processing Center 8. Inland Carrier 9. Dealer / Consumer
Slide 14: Logistics in numbers
Logistics in numbers1 Segment Revenue (USD m) EBITDA margin Share of Logistics EBITDA2 Auto 512 12% 36% Vehicle processing services H&H 143 22% 18% Equipment processing services Terminals 272 36% 56% Terminal and Cargo related services Inland 226 4% 5% Inland transportation and freight forwarding 1)
Slide 15: Our network and global footprint
Our network and global footprint Terminals Vehicle processing centers Equipment processing centers Trade routes
Slide 16: Why do we have landbased logistics?
Why do we have landbased logistics? One-stop shop Flexibility Scale Scope Ability to provide integrated Ability to delay customization Facilities and expertise is often Shipping can rely on the support logistics offering and end-to-end and region-specific changes to shared by multiple OEMs and of a
Slide 17: Terminals VPCs & EPCs
Terminals VPCs & EPCs 17
Slide 18: Terminal network supporting the major auto and H&H hubs
Terminals VPCs & EPCs Terminal network supporting the major auto and H&H hubs Wallenius Wilhemsen terminal footprint1 Region Market position Import Export ‘000 units ‘000 units North 3 terminals, one of few leading players ~675 ~155 America Market leader in Europe with Zeebrugge, EMEA ~260 ~520 Sout
Slide 19: Terminal services and market drivers
Terminals VPCs & EPCs Terminal services and market drivers Cargo handling and stevedoring Infrastructure and storage Seasonal services In-terminal processing • Loading and offloading • Charging • Heat treatment • Quality inspections (stevedoring) • Periodic service programs (30 • Fumigation • Upfitt
Slide 20: Vehicle Processing Centers (VPCs)
Vehicle Processing Centers (VPCs)
Slide 21: Vehicle processing center (VPC) services and market drivers
Terminals VPCs & EPCs Vehicle processing center (VPC) services and market drivers Transportation + reception Maintenance and repair Customization Dispatching Transportation + storage • Transportation from • Warranty and body repairs • Painting • Pre-delivery inspection • Short and long-term storage
Slide 22: Equipment Processing Centers (EPCs)
Equipment Processing Centers (EPCs) 22
Slide 23: Equipment processing center services and market drivers
Terminals VPCs & EPCs Equipment processing center services and market drivers Transportation + reception Assembly + maintenance Customization Dispatching Transportation + storage • Transportation from • Assembly of semi-knocked • Modification and installment • Pre-delivery inspection • Short and lon
Slide 24: Highly specialized services in our EPCs
Terminals VPCs & EPCs Highly specialized services in our EPCs 1. Assembly & kitting operations 2. Mounting of cab 3. Reception inspection 4. Fluid check 5. Battery check 6. Washing and painting 7. Bucket assembly 8. Dispatching and transportation 24
Slide 25: Shipping and Logistics – Why 1+1 makes more than 2?
Shipping and Logistics – Why 1+1 makes more than 2? How we are unlocking the value chain With our top 50 biggest customers Added Shipping customer Logistics value • Longstanding and close Shipping relationships • Of the largest 50 customers, 70% purchase both Shipping and Logistics services1 • Under
Slide 26: From Land to Ocean – a customer journey
From Land to Ocean – a customer journey First service A dedicated Revenue development in 2005 shortsea vessel Indexed at 2005 Physical End of the line Distribution and Accessory Dispatch Rail Shipping 2,929% reception storage installations WAWI is currently the exclusive 3PL provider in North Americ
Slide 27: Future growth and value creation ambitions
Future growth and value creation ambitions Strengthen profitability Create added value for customers Grow our Logistics network • Utilizing a standardized, digitally • Through a robust, resilient, and • Target double-digit annual revenue enhanced, and efficient logistics network sustainable supply c
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Slide 29: Coffee
W Coffee Back in 15 minutes
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Slide 31: The changing shape of fleet renewal
The changing shape of fleet renewal Morten Skedsmo SVP Fleet Ownership Lene Bårli Wiederstrøm Senior CEO Advisor
Slide 32: Shaper Class Methanol dual fuel vessels ordered
Shaper Class 12 Methanol dual fuel vessels ordered Key Specifications Dual fuel methanol capable Ammonia ready 9,300 CEU capacity* 12 cargo decks 76,900 m2 Deck area 20,050 m2 H&H area Stern ramp capacity of 320 mt Length 228 m / Breadth 38 m * Key specs apply to the 8 x 9,300 CEU vessels
Slide 33: 4 x CEU
11700.
Slide 34: Purpose built with economies of scale and prepared for net-zero
Purpose built with economies of scale and prepared for net-zero Minimal fuel consumption1 Unmatched ramp strength2 Heavy-duty hoistable decks Significant savings of fuel and emissions Designed for our specific needs and trading Offers high flexibility to accommodate both compared to current fleet pa
Slide 35: End-to-end net-zero service launches
Net-Zero Service End-to-end net-zero 12 x service launches 2026 Q1 Q2 Q3 Q4 2027 Q1 Q2 Q3 Q4 2028 Q1 Q2 Q3 Q4 2029
Slide 36: Biofuels and the Reduced Carbon Service
Biofuels and the Reduced Carbon Service Sustainable biofuel blends are already an integrated part of our fuel mix and will be pivotal to reducing carbon emissions Biofuel blends in 2024 10% of total fuel consumption Customer support Majority of 2024 contract renewals include biofuel 36
Slide 37: Our customers will pay for the green fuels needed towards net-zero
Our customers will pay for the green fuels needed towards net-zero We are constantly working on Utilizing and securing green fuels is sourcing and introducing affordable needed over the next decade to and available green fuels reach net zero by 2040. And all customers will be part of this journey. W
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Slide 39: Capital Allocation
Capital Allocation Torbjørn Wist CFO
Slide 40: Capital allocation principles
Capital allocation principles Dividend Policy • The company targets a cash dividend that over time shall constitute 30-50% of net profit on an annual basis • Dividend will be declared and paid on a semi-annual basis • The board is authorized to consider extraordinary dividends and/or share buybacks
Slide 41: Strong commitment to dividends
Strong commitment to dividends ~$1.2bn of dividends +104% $738m +475% $362m $63m Paid in 2022 Paid in 2023 Paid in 20241 Payout Ratio2 36% 46% 50% 1) Includes dividend payment scheduled for 10 October 2024 41 2) Payout ratio for previous year, except amounts paid out in 2024 which is the total divid
Slide 42: Newbuild investments and financing
Newbuild investments and financing • Remaining capex commitment is ~USD 1.2bn Newbuilding capex schedule (USDm) linked to 12 Shaper class vessels on order Payments (lhs) Cumulative capex (rhs) • EUKOR - 6 newbuildings delivered in 2026 & 2027 USDm USDm 220 1,400 • Signed financing with six Korean an
Slide 43: Multiple purchase options for vessels under long-term leases
Multiple purchase options for vessels under long-term leases • We hold 14 purchase options/obligations linked to our Timing of vessels with purchase options charter-in fleet 2024 1 Vessel • The majority resides with EUKOR • Some charters may be extended prior to deciding upon the 2025 4 Vessels purc
Slide 44: Continuous focus on upstreaming cash to ASA
Continuous focus on upstreaming cash to ASA Wallenius Wilhelmsen ASA Bond debt: $537m (Unsecured) Near term cash commitments: • Dividends to be paid in October: $451m Group cash: $1.6bn / ASA cash: $534m • Bond repaid early September: $169m Market value shareholder’s equity: $5.5bn ARC EUKOR WW Ocea
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Slide 46: Coffee break
Coffee break Back in ten minutes
Slide 47: Partnering with customers
Partnering with customers Pia Synnerman EVP & COO Customer Growth
Slide 48: We support customers across their entire supply chain
We support customers 5.15 USD billion in revenues 59 Million CBM transported across their entire supply chain, all the way from the factory to 35% Group EBITDA margin 45% of 2023 volumes for renewal during 2024 the end-consumer 125 Vessels under operation 10% of 2023 fuel consumption was biofuel ble
Slide 49: Customers are supported by our scale, reach and flexibility
Customers are supported by our scale, reach and flexibility Terminals Vehicle Processing Centers Equipment Processing Centers Vessel voyages 2023 59 Million CBM transported 8 Terminals Handled 3 million units 66 Processing centers Handled 6.3 million vehicles* All figures from 2023. *Inc auto and H&
Slide 50: Our customer base is diverse and growing
Our customer base is diverse and growing Share of 2023 revenue Auto H&H Breakbulk 60% YTD 2024: 62% 32% YTD 2024: 30% 8% YTD 2024: 7% Auto1 High & heavy1 1) Selected customers 50
Slide 51: We serve both large and small customers
We serve both large and small customers Share of Shipping 2023 revenues Share of Logistics 2023 revenues1 Auto H&H (incl. Breakbulk) Auto H&H (incl. Breakbulk) 100% 100% 91% 84% 76% 78% 67% 60% 64% 57% 78% 55% 50% 49% 57% 58% 48% 36% 34% 50% 40% 40% 26% 40% 30% 34% 34% 19% 20% 21% 22% 10% 10% 14% 9%
Slide 52: Breakbulk and H&H volumes being replaced by increasing auto
…with breakbulk and H&H volumes being replaced by increasing auto Shipping, share of net freight (%) Shipping, share of volume (%) Shipping, average net freight2 Auto H&H Breakbulk Net freight rate Rates in 2020-2022 were boosted by BB 60 55 56 50 51 2020 2021 2022 2023 2024 YTD1 2020 2021 2022 2023
Slide 53: Prevailing trends within auto
Prevailing trends within auto New competition Powertrain uncertainty Regulations and Geopolitics • Highly competitive auto entrants • Non-linear transition to EVs • Regional regulations • Lower barriers to entry • Lagging rollout of infrastructure • Elections in half the world • Technology now the d
Slide 54: Shifting customer expectations set the foundation for positive negotiations
Shifting customer expectations set the foundation for positive negotiations Customer needs Our offering and expectations • Optimized operations • Commit to expand service scope and interconnectivity • Reliable supply chains with the right capacity • Ensure sustainable rates through the cycle • A par
Slide 55: The current contract renewal pipeline
The current contract renewal pipeline Distribution of shipping contract portfolio across time and as share of 2023 volumes Effective contract period. X% indicates Year of negotiation X% share of 2023 volumes 100% 15% 80% 15% 60% 45% Options Assume 3-year duration to extend? 40% 20% 25% Options Weigh
Slide 56: Increasing the share of wallet
Increasing the share of wallet 70% of our 50 largest customers purchase both Shipping and Logistics services1 1) Customers here are counted if they spend at least 5% on Logistics in addition to Shipping 56
Slide 57: Ambitions
Ambitions Significantly grow logistics business • Organic growth and M&A • Increase share of wallet with largest customers • Increase integrated and digital solutions Net-zero end-to-end service • Limited to selected trade routes • In-demand for leading auto OEM • A unique market differentiator 57
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Slide 59: Hesnes Shipping AS
HESNES SHIPPING AS SEPT 2024
Slide 60: The order book, the bottleneck, supply & demand
The order book The bottleneck Supply & demand
Slide 61: The Fleet
THE FLEET 193 1.543.000 27% 36% of existing of existing
Slide 62: The Order Book
THE ORDER BOOK World Fleet (capacity) YARD COUNTRIES 600 000 500 000 400 000 a 58 ~~” 40 JAPAN, 12% 200 000 _ ® 2 KOREA, 5 % 0 2024 2025 2026 2027 2028
Slide 63: Yard Efficiency
YARD EFFICENCY Keel -> deliv Water - > deliv 2023 – 338 2023 – 165 2024 - 290 2024 - 119
Slide 64: Why all time high? Fleet growth
WHY ALL TIME HIGH? DELIVERIES 2014-2023 No of vessels 138 FLEET GROWTH Capacity 940.000 No of vessels RECYCLING 2% No of vessels 123 Capacity Capacity 600.000 6,1%
Slide 65: Why all time high? – Bottleneck effect
WHY ALL TIME HIGH? – BOTTLENECK EFFECT 2014-2023 EXPORT (%) Bottleneck EXPORT JAPAN -100.000 (- 1%) IN % KOREA +47% -300.000 (- 10%) IN UNITS CHINA +4.200.000 (+ 615 %) +3,8 mill 13,4 m
Slide 66: Bottleneck -> 2024
BOTTLENECK - > 2024 +26% +4.900.000 from 2024 From 2024 +4% +300.000
Slide 67: Threats – US/EU
THREATS – US/EU - 13% to N-AM/C-AM 60.000 to US – 50% BEV - 37% to EUROPE 400.000 to EU – 50% BEV
Slide 68: Where do we go from here? 2024-2029
WHERE DO WE GO FROM HERE? 2024-2029 General growth: +2m seagoing volumes = 70 ships CHINA «leakage» 1,5m units = 60 ships Demolition candidates unitil 2028 = 70 ships ORDER BOOK 193 VESSELS
Slide 69: Thank you
HESNES SHIPPING AS THANK YOU
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Slide 71: The way forward
The way forward Lasse Kristoffersen President and CEO
Slide 72: 1+1 makes more than 2
if {5 oe Bae revert fose 2S a I Ne SI OS
Slide 73: Q+A
Q+A
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