Slide 1: Investor Presentation – 1st Quarter Results 2016
Investor Presentation – 1st Quarter Results 2016 13 May 2016 1
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 Our deliverables We are on track and achieved operational break-even result in Q1 Our industry Difficult market but we remain cautiously optimistic for second half Our position We are working hard to further strengthen our competitive position Our track record We achieved a s
Slide 4: Strategic highlights: We made good progress on our objectives 2016
Our deliverables Our industry Our position Strategic highlights: Our track record We made good progress on our objectives 2016… Our objectives OCTAVE project further intensified and expanded in Q1 2016 – OCTAVE high double-digit USD million result improvements targeted CLOSE THE We took in 2 mod
Slide 5: Financial highlights: ...and remained profitable despite record low rates
Our deliverables Our industry Our position Financial highlights: Our track record ...and remained profitable despite record low rates Our objectives Transport volume Freight rate Transport expenses +2.1% -19.8% -17.0% Q1 2016: 1.8 TEU m Q1 2016: 1,067 USD/TEU Q1 2016: 970 USD/TEU EBITDA EBIT Group p
Slide 6: World container volume
Our deliverables Our industry Our position Difficult Initial signs market of an – Freight uptick –rates freight arerates on record increased, low Our track record volumeand levels rose carrier by 2.8% results as compared remain under to prior pressure year Our objectives Global volumes pick up sligh
Slide 7: Capacity measures are being taken esp. Asia-Europe & Asia-Latin America
Our deliverables Our industry Our position Capacity measures are being taken esp. Asia-Europe Our track record & Asia-Latin America – Yet, potentially more to come Our objectives Asia – Europe [weekly capacity] Asia – North America [weekly capacity] TTEU -7.7% TTEU +6.2% 403 405 392 396 395 396 398
Slide 8: Some signs to expect a sequential recovery over coming months of 2016
Our deliverables Our industry Our position There are some signs to expect a sequential Our track record recovery over the coming months of 2016 Our objectives Orders for newbuilds normalized… …and ship deliveries in Q1 slowed down TEU m Share of world fleet Deliveries per quarter [TTEU] 8 56% -52% …
Slide 9: Industry is changing – Alliances reshaped and leading players consolidating
Our deliverables Our industry Our position Going forward the industry is changing – Alliances are Our track record being reshaped and leading players are consolidating Our objectives The industry is changing Carrier capacity [TEU m] 2M THE Alliance OCEAN Alliance We had communicated the following ob
Slide 10: Hapag-Lloyd will be a leading partner in THE Alliance starting April 2017
Our deliverables Our industry Our position Hapag-Lloyd will be a leading partner in a strong Our track record and integrated alliance to start in April 2017 Our objectives Six leading players create THE Alliance Competitive position on East-West trades1) UASC 11% 1) 1% 2M Atlantic 41% Ocean 29% 2 TH
Slide 11: Industry consolidation – Talks between Hapag-Lloyd and UASC ongoing
Our deliverables Our industry Our position Industry consolidation – Talks between Hapag-Lloyd Our track record and United Arab Shipping Company ongoing Our objectives Forms of cooperation being discussed / No binding results yet Hapag-Lloyd AG (HL) and United Arab Shipping Company SAG (UASC) are c
Slide 12: Our fleet remains competitive – We will not invest further at this time
Our deliverables Our industry Our position Our fleet remains competitive – Our track record We will not invest further at this time Our objectives Vessel fleet as of 31 March 2016 Owned1) Chartered4) Current Current fleet orderbook Fleet age [% of total capacity] Capacity [TEU] 131,674 131,674 52,94
Slide 13: OCTAVE project gained further traction in Q1 2016
Our deliverables Our industry Our position Our track record OCTAVE 2 project gained further traction in Q1 2016 Our objectives OCTAVE project Existing OCTAVE initiatives G6 Enhancement – create integrated alliance Procure- Procurement – reduction of expenses ment New OCTAVE initiatives Further cost
Slide 14: Improved sales organization and better sales processes
Our deliverables Our industry Our position Improved sales organization and better sales processes Our track record with significant potential to improve revenues Our objectives COMPETE TO WIN Project Sales organization Sales process Employee training Global rollout Clearer roles in areas Better oppo
Slide 15: We achieved a break-even EBIT despite record low freight rates
Our deliverables Our industry Our position We achieved a break-even EBIT Our track record despite record low freight rates Our objectives Operational KPIs Q1 2016 Q4 2015 QoQ ∆/% Q1 2015 YoY ∆/% Transport volume [TTEU] 1,811 1,822 -11 / -0.6% 1,774 +37 / +2.1% Freight rate [USD/TEU] 1,067 1,116 -49
Slide 16: Transport volume increased by 2.1% while freight rates decreased 19.8%
Our deliverables Our industry Our position Transport volume increased by 2.1% Our track record while freight rates decreased 19.8% Our objectives Transport volume [TTEU] Freight rate [USD/TEU] FY 2014 2015 2016 1,500 1,422 Q1 -19.8% 7,401 1,400 1,331 5,907 1,300 +2.1% +26.8% 1,200 1,811 1,067 1,100
Slide 17: Active yield management decreased volumes on selected trades
Our deliverables Our industry Our position Due to active yield management, we decreased Our track record our volumes on selected trades (FE and LA) Our objectives Transport volume [TTEU] 2014 2015 Q1 2016 Transport 1,811 5,907 7,401 volume +25.3% +2.1% +7.5% [TTEU] Growth 5.5% 6.0% 5.9% 12.3% 26.8%
Slide 18: Freight rate dropped to 1,067 USD/TEU; bunker price decreased to 178 USD/t
Our deliverables Our industry Our position Freight rate dropped -264 USD/TEU to 1,067 USD/TEU – Our track record Our average bunker price decreased to 178 USD/t Our objectives Freight rate1) [USD/TEU] vs. bunker price2) [USD/t] 2014 2015 Q1 2016 Bunker cost / TEU as share 19.3% 10.1% 6.8% of freight
Slide 19: Hapag-Lloyd remains focused on unit cost reduction
Our deliverables Our industry Our position Our track record Hapag-Lloyd remains focused on unit cost reduction Our objectives Transport expenses per TEU [USD/TEU] 5 Compete -198 to Win (-17.0%) 1,168 -91 4 Close the -14 -16 Cost Gap -85 3 7 970 Structural Improvements -108 (-10.9%)1) 2 OCTAVE 1 CUAT
Slide 20: Equity base at USD 5.4 bn and liquidity at USD 0.9 bn
Our deliverables Our industry Our position Our track record Equity base at USD 5.4 bn and liquidity at USD 0.9 bn Our objectives Solid equity base [USD m] Reduced financial debt [USD m] Net Debt 3,653 3,631 3,688 5,068 5,497 5,424 Cash 865 625 519 4,518 4,256 4,207 Financial Debt 2014 2015 Q1 2016 2
Slide 21: Positive free cash flow of USD 37 m in Q1 2016
Our deliverables Our industry Our position Positive free cash flow of USD 37 m in Q1 2016 – Our track record Net repayment in financial debt of USD 93 m Our objectives Cash flow Q1 2016 [USD m] Operating Investing Financing cash flow cash flow cash flow 156 -119 -143 1,048 904 423 20 -122 136 385 13
Slide 22: Hapag-Lloyd stock in SDAX since March 2016
Our deliverables Our industry Our position Hapag-Lloyd stock in SDAX since March 2016 – Our track record Next change of redemption prices in October 2016 Our objectives Share trading Bonds trading 120 110 100 104.1 103.3 100 101.0 80 60 6-Nov 6-Dec 6-Jan 6-Feb 6-Mar 6-Apr 6-May 90 Hapag-Lloyd Maersk
Slide 23: We expect a moderate increase in EBITDA for 2016
Our deliverables Our industry Our position We expect a moderate increase in EBITDA for 2016 Our track record with focus in the second half of this year Our objectives Hapag-Lloyd guidance for FY 2016 Market forecasts for FY 2016 Transport Global economic growth +3.2% Increasing slightly volume Incre
Slide 24: Closing remarks
Closing remarks Our deliverables We are on track and achieved operational break-even result in Q1 Our industry Difficult market but we remain cautiously optimistic for second half Our position We are working hard to further strengthen our competitive position Our track record We achieved a s
Slide 25: Hapag-Lloyd
€€ Hapag-Lloyd
Slide 26: Industry highly correlated with global growth – short term outlook
The industry stays highly correlated with global growth – Short term outlook at lower end of mid term 3-5% range Container shipping volume and global GDP growth 2000 = Indexed to 100 2000 – 2008 2010 – 2014 2015 – 2017e GDP 2x 1x 1x multiplier 300 +3.7% +5.1% +3.0% 250 +1.3% +3.5% +3.2% +8.1% +3.1%
Slide 27: Supply demand gap expected to decrease in 2016
Supply demand gap expected to decrease in 2016 Supply / demand development Net capacity growth Net capacity growth 18 Demand Supply 16.2% Postponements 16 2012 0.8 Scrapping 14 12 9.3% 2013 0.9 10 8.5% 8.0% 8 6.7% 6.1% 5.2% 5.5% 6 4.8% 5.1% 2014 1.0 4.3% 4 4.3% 4.3% 2 3.0% 1.4% 2.3% 1.3% 2015 1.6 0
Slide 28: Current spot rates reflect recent freight rate increases
Current spot rates reflect recent freight rate increases by various carriers Shanghai – Europe (SCFI) Shanghai – USA (SCFI) 2,500 6,000 USWC (USD/FEU) USEC (USD/FEU) HL Transpacific* NEurope (USD/TEU) Mediter. (USD/TEU) HL Far East* 5,000 2,000 4,000 1,500 3,000 1,000 873 2,000 636 1,683 500 1,000 8
Slide 29: Our Way Forward – Further improvements expected from existing initiatives
Our Way Forward – Further improvements expected from our existing initiatives Tangible results in 2015 and further upside Strategic projects to enhance profitable growth Compete to Win Improvement of Qualitatively Close the revenue quality enhanced Successful Cost Gap growth implementation Value-enh
Slide 30: Well-balanced exposure to global trade with strong position in attractive markets
Well-balanced exposure to global trade with strong position in attractive markets and niche businesses Well-balanced global exposure Attractive market presence Strong niche businesses Transpacific Atlantic Far East Atlantic Reefer 5 Other Services 22% 28% Globally Historical stronghold Consolidate
Slide 31: Imbalances: Hapag-Lloyd outperforms the market
Imbalances: Hapag-Lloyd outperforms the market Number of full non-dominant leg containers Container Steering per 10 full dominant leg containers1) Dominant 10 Special Know-How/ IT leg Trans- 7 Advantageous customer pacific 5 portfolio Cost-efficient management of Trans- 7 equipment flows atlantic 6
Slide 32: Benefits from a reduced bunker price and consumption
Benefits from a reduced bunker price and consumption Bunker price [Rotterdam; USD/mt] Bunker consumption [mt/slot; mt/TEU; k mt] 3.812) 1,200 1,029 MFO Bunker cons. 3.393) 3.42 1,000 922 MDO per slot1) 0.49 800 0.45 0.45 822 606 Bunker cons. 600 462 per TEU 602 408 400 572 408 2,924 3,351 MFO 200 35
Slide 33: Long-standing and diversified customer base of blue chip customers
Long-standing and diversified customer base of blue chip customers and a diversified base of goods transported Highly diversified customer base1) Strong relationship with blue chip customers 100% 30% Top 50 Customers (∑ = 36%) 23% 11% 9% 9% 18% TOP 10 TOP TOP TOP TOP > 500 Total Hapag-Lloyd has a hi
Slide 34: Hapag-Lloyd with positive EBIT of USD 5.3 m
Hapag-Lloyd with positive EBIT of USD 5.3 m Income statement [USD m] Transport expenses [USD m] % Q1 2016 Q1 2015 % change Q1 2016 Q1 2015 change Revenue 2,124.0 2,593.1 -18% Expenses for raw materials 154.7 312.3 -50% and supplies Other operating 24.8 112.1 -78% Cost of purchased services 1,601.3 1
Slide 35: Hapag-Lloyd with equity ratio of 45.3%
Hapag-Lloyd with equity ratio of 45.3% Balance sheet [USD m] Financial position [USD m] 31.03.2016 31.12.2015 31.03.2015 31.03.2016 31.12.2015 31.03.2015 Assets Cash and cash equivalents 518.8. 625.0. 832.4. Non-current assets 10,371.2 10,363.7 10,262.2 Financial debt 4,207.0 4,256.3 4,430.1 Of whic
Slide 36: Investor Relations contact
Henrik Schilling Senior Director Investor Relations Tel +49 40 3001-2896 Fax +49 40 3001-72896 Henrik.Schilling@hlag.com http://ir.hapag-lloyd.com/websites/hapaglloyd/English/0/ir-home.html 36