Slide 1: Investor Presentation 9M 2020 Results
Investor Presentation 9M 2020 Results Hamburg, 13 November 2020
Slide 2: Opening Remarks
Opening Remarks Performance of container shipping market and Hapag-Lloyd in Q3 better than anticipated 1 Current situation Idle fleet continues to decline from record high in May as capacity is coming back into the market Performance Safeguarding Program running successfully In spite of COVID-19, we
Slide 3: Global volumes have gradually recovered in Q3 2020
1 Current situation Global volumes have gradually recovered in Q3 2020, mainly driven by exports from Asia – available capacity have adjusted accordingly Development of global transport volume [TEUm] Development of weekly capacity in 20201) 2019 2020 120% Transpacific Far East 9M 2019 9M 2020 110% T
Slide 4: Spot freight rates increased in Q3 2020 while bunker rates remained stable
1 Current situation In light of rising demand, spot freight rates have increased in Q3 2020 while bunker rates remained fairly stable Weekly CCFI development Bunker price development 1,150 600 1,100 550 1,050 500 1,000 450 950 400 900 350 850 300 800 250 750 200 700 150 650 100 600 50 2020 RTM VLSFO
Slide 5: COVID-19 uncertainties remain – but we stay focused
1 Current situation While we are currently seeing a gradual market recovery, COVID-19 uncertainties remain – but we stay focused OUR TEAM OUR BUSINESS OUR FOCUS We continue to actively track Volumes recovered somewhat in Q3 Performance Safeguarding Program worldwide business continuity risk bu
Slide 6: Improved profitability and strengthened balance sheet in first 9 months of 2020
2 Financials We were able to improve profitability and to strengthen our balance sheet in the first 9 months of 2020 Operational KPIs P&L effects Volume declined by 3.5% YoY due to COVID-19 9M revenue decreased slightly (-1.2% YoY) due to lower Volume 8,696 Revenue 10,525 impact on almost all trades
Slide 7: Earnings increased on the back of strict cost management
2 Financials Earnings increased on the back of strict cost management driven by our PSP program and lower bunker expenses Revenue [USD m] EBITDA [USD m] -1.2% +20.4% 10,654 10,525 2,044 1,697 +22.5% -2.4% 756 3,608 3,519 617 17.1% 21.5% Margin 15.9% 19.4% Q3 2019 Q3 2020 9M 2019 9M 2020 Q3 2019 Q3 2
Slide 8: Transport volume development by trade
2 Financials Volumes bottomed out in Q2 and gained momentum in Q3, 9M 2020 volumes declined in-line with market trend by 3.5% YoY Transport volume development by trade Q1 2019 – Q3 2020 [TTEU] 9M 2019 9M 2020 9,011 - 3.5 % 8,696 - 3.4 % 3,038 3,045 3,026 3,053 2,929 2,942 513 489 489 481 2,701 470 4
Slide 9: Freight rates fairly stable despite volatile bunker price trend
2 Financials Freight rates were fairly stable throughout the first 9 months despite very volatile bunker price trend Freight rate [USD/TEU] vs. Bunker price development [USD/mt] 9M 2019 9M 2020 Average freight rate 1,075 + 2.0% 1,097 +/- 0.0% 1,114 1,094 1,079 1,084 1,084 1,063 1,062 523 434 425 416
Slide 10: Unit cost were flat, PSP savings offset by higher D&A
2 Financials Unit cost were flat, PSP savings and lower bunker cost were offset by higher D&A expenses Transport expenses per unit [USD/TEU] 9M 2019 1,017 PSP measures have helped to reduce ex bunker unit cost in spite of lower Bunker -8 volumes In addition, costs for “Vessel and Handling -9 voyage”
Slide 11: Free cash flow of USD 1,866 m in 9M 2020
2 Financials Good earnings development and prudent investment strategy boosted free cash flow to USD 1,866 m in 9M 2020 Cash flow 9M 2020 [USD m] Operating Investing Financing cash flow cash flow cash flow 2,166.4 -300.4 -1.479.1 1,455 -1,963 123 -361 29 31 -439 1,546 2,044 1,159 -229 -29 585 -277 5
Slide 12: Net debt substantially reduced, leverage ratio down to 2.3x
2 Financials Net debt substantially reduced, leverage ratio down to 2.3x Equity base [USD m] Net debt [USD m] 40.9% Equity ratio 42.0% 7,180 Financial Debt 6,980 3.0 Net Debt / EBITDA 2.3x 7,430 7,784 6,605 6,019 31 December 2019 30 September 2020 31 December 2019 30 September 2020 Liquidity reserve
Slide 13: S&P and Moody's upgraded our rating
2 Financials S&P and Moody‘s upgraded our rating to highest level ever based on Hapag-Lloyd’s performance over the last couple of years Historical Ratings and Outlook Ba3 / positive BB- / positive Moody’s S&P Ba3 / stable BB- / stable Moody’s rating scale Ba3 / negative BB- / negative S&P rating sca
Slide 14: Container volumes affected by COVID-19, recovery faster than expected
3 Market update Container transport volumes are significantly affected by COVID-19, but the impact has been less severe – recovery faster than expected GDP vs. global container volume growth [%] GDP Container volume growth 5.5% 4.7% 5.2% 4.1% 3.3% 2.8% 3.8% 3.5% 1.7% 2.0% -3.0% -4.4% 2016 2017 2018
Slide 15: Idle fleet at minimum, orderbook below TEU 2 m
3 Market update As demand picks up gradually, idle fleet has decreased to an absolute minimum – Orderbook down to below TEU 2 m and 8% of global fleet 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
Slide 16: Flexible operational measures necessary to ensure adequate supply
3 Market update Flexible operational measures continue to be necessary 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 Available capacity growth -0.9% 8.0% 3.1% 6.3% 5.6% 5.5% -1.0% 4.7% 3.9% 3.
Slide 17: Earnings guidance updated
4 Way forward Earnings guidance updated to reflect better than expected business development and strong Q4 volume outlook FY 20192018 Initial Guidance 2020 Updated Guidance 2020 Transport volume 12,037 TTEU Increasing slightly Decreasing slightly Average freight rate 1,072 USD/TEU Increasing slightl
Slide 18: Our priorities for the coming months
4 Way forward Our priorities for the coming months Ensure the safety and health of our employees Fully support our customers to safeguard uninterrupted supply chains and optimize our tradeflows Continue to follow a prudent financial policy with focus on cost and risk adequate liquidity steering Keep
Slide 19: Appendix
Appendix Appendix
Slide 20: Equity ratio of 42.0% and gearing of 77.3%
A Appendix Hapag-Lloyd with an equity ratio of 42.0% and a gearing of 77.3% Balance sheet [USD m] Financial position [USD m] million USD 30.9.2020 31.12.2019 million USD 30.9.2020 31.12.2019 Assets Financial debt and lease liabilities 6,980.4 7,179.6 Non-current assets 15,517.2 15,501.0 Cash and cas
Slide 21: Positive EBIT of USD 937.3 m in 9M 2020
A Appendix Hapag-Lloyd with positive EBIT of USD 937.3 m in 9M 2020 Income statement [USD m] QoQ YoY million USD Q3 2020 Q2 2020 Q3 2019 Change change 9M 2020 9M 2019 Change Revenue 3,519.4 3,321.2 3,607.5 6.0% –2.4% 10,524.6 10,654.1 –1.2% Transport expenses –2,486.1 –2,295.4 –2,736.7 8.3% –9.2% –7
Slide 22: Interest burden clearly reduced
A Appendix Interest burden clearly reduced – extraordinary valuation effects weigh on financial result Extraordinary interest result items [USD m] HLAG Bond trading 110 -3 pp 105 9M 2019 interest result -357 100 95 90 Rate & volume reduction 70 85 80 Bond option valuation -15 Comments On the back of
Slide 23: Bunker expenses per unit decreased by 5% YoY
A Appendix Bunker expenses per unit decreased by 5% YoY mainly due lower average bunker prices in 9M 2020 Bunker expenses per TEU [USD/TEU] Bunker price development - 5.4% 600 154 146 550 500 450 400 9M 2019 9M 2020 350 300 Total bunker consumption [k mt; %] 250 - 7.2% 3,287 200 3,049 6% 150 85% 100
Slide 24: Well balanced maturity structure of financial liabilities
A Appendix Well balanced maturity structure of financial liabilities Financial Debt Profile as per 30 September 20201), [USD m] 2,096 Facility 30 September 2020 [USD m] Vessel Financings 3,041 Container Financings 1,396 Total Vessel & Container 4,437 1,313 EUR Bond 2024 527 1,293 Total Bonds 527 1,1
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 110 102.7 100 Impacted by general 90 uncertainty in the 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 2021
Financial Calendar 2021 January 2021 Preliminary Financials 2020 March 2021 Annual Report 2020 May 2021 Quarterly Financial Report Q1 2021 May 2021 Annual General Meeting 2021 August 2021 Half-year Financial Report 2021 November 2021 Quarterly Financial Report 9M 2021 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