Slide 1: Investor Presentation 9M 2018 Result Presentation
Investor Presentation 9M 2018 Result Presentation Hamburg, 8 November 2018
Slide 2: Opening Remarks
Opening Remarks 01 Highlights Positive EBIT of USD 359 m in 9M 2018 in a tough market environment Introduction of a new and transparent Marine Fuel Recovery Mechanism in light of IMO 2020 Stable demand despite rising geopolitical risks 02 Sector Update Sector fundamentals remain favourable i
Slide 3: Financial Highlights 9M 2018
1 Highlights Financial Highlights 9M 2018 Transport volume Transport expenses per TEU Freight rate +26.6% -1.3% -3.4% 9M 2018: TEU 8.9 m 9M 2018: 926 USD/TEU 9M 2018: 1,032 USD/TEU EBIT EBITDA Group profit USD 359 m USD 972 m USD 15 m 3.6% EBIT margin 9.7% EBITDA margin 3.2% ROIC Equity Liquidity re
Slide 4: Total synergies of USD 435 m p.a. from 2019 onwards confirmed
1 Highlights Total synergies of USD 435 m p.a. from 2019 onwards confirmed – synergy realisation going as planned Synergy potential Full run rate [USD m] Synergy ramp up [USD m] USD 435 m USD 435 m Synergies implemented for 2018 Network Overhead Other Total 2017 2018 Full run rate Approximately 90
Slide 5: We have publicly launched our new Web Channel, Quick Quotes, in August
1 Highlights We have publicly launched our new Web Channel, Quick Quotes, in August 24 24/7 access to the Quick Reception of rate in immediate Quotation with just a Quotes tool whenever and response few clicks wherever Access for all customers Start of booking process follows Flexible access to Hapa
Slide 6: Hapag-Lloyd is introducing a Marine Fuel Recovery mechanism
1 Highlights Hapag-Lloyd is introducing a Marine Fuel Recovery mechanism Hapag-Lloyd is simplifying its rate structure and will replace all existing fuel charges with a new Marine Fuel Recovery (MFR) mechanism Marine Fuel Recovery Mechanism will be gradually implemented from 1 January 2019 It is
Slide 7: Container shipping volume expected to grow on a healthy level of 4% to 5%
2 Sector Update Container shipping volume expected to grow on a healthy level of 4% to 5% between 2018E and 2020E, but geopolitical risks rise Global Container Volume Growth & Real GDP Growth [%] 2000 = Indexed to 100 GDP multiplier 1.9x 1.0x 1.3x 5.1% 300 4.9% 4.0% 250 3.7% 3.7% 3.7% Container Volu
Slide 8: Despite recent new orders, the orderbook remains on a historical low
2 Sector Update Despite recent new orders, the orderbook remains on a historical low, idle fleet increased recently but is still on a low level Orderbook-to-fleet Newly placed orders [TEU m, %] YTD 2018 3.2 61% 2.0 2.2 50% 1.8 6.5 1.2 1.1 1,0 6.0 0.8 38% 0.6 0.4 0.1 0.2 5.0 27% 28% 2007 2008 2009 20
Slide 9: Very low scrapping pushes supply in 2018E, but mid-term balance improving
2 Sector Update Very low scrapping pushes supply in 2018E, but mid-term supply/demand balance is further improving Scheduled vessel deliveries YTD Comments 2018 [TEU m] Drewry has revised its forecast for net capacity growth in 2018 1,7 1.72) again. Market analysts now expects scrapping at a rate
Slide 10: Positive EBITDA of USD 972 m in the first nine months of 2018
3 Financials Positive EBITDA of USD 972 m in the first nine months of 2018 Operational KPIs Q3 2018 Q3 2017 YoY 9M 2018 9M 2017 YoY Transport volume [TTEU] 3,052 2,807 +9% 8,900 7,029 +27% Freight rate1) [USD/TEU] 1,055 1,073 -2% 1,032 1,068 -3% Bunker [USD/mt] 446 308 +45% 406 311 +31% Exchange rat
Slide 11: EBIT positively affected by an extraordinary income of USD 15 m
3 Financials EBIT positively affected by an extraordinary income of USD 15 m Q3 2018 9M 2018 252 359 344 237 -15 -15 EBIT reported Extraordinary income EBIT adjusted EBIT reported Extraordinary income EBIT adjusted Comments Gain from the measurement of an investment at fair value as at 30 Septembe
Slide 12: UASC merger – pro-forma transport volume grew by 5.5% YoY
3 Financials Continuously good transport volume growth of 26.6% YoY due to UASC merger – pro-forma transport volume grew by 5.5% YoY Transport volume development by trade [TEU m] 8,900 91 260 186 9M 2017 397 1,812 597 675 1,040 1,254 1,254 7,029 440 561 +26.6% 7,029 205 128 9M 2018 488 2,072 783 1,1
Slide 13: On a pro-forma basis freight rates have increased by 1.4% YoY
3 Financials On a pro-forma basis freight rates have increased by 1.4% YoY, average bunker consumption price increased sharply by 30.5% YoY Freight rate [USD/TEU] vs. Bunker price development [USD/mt] Ø 9M 2017 Ø 9M 2018 Freight rate, 1,068 -3.4% 1,032 reported Freight rate, 1,017 +1.4% 1,032 pro fo
Slide 14: Higher expenses offset by cost-cutting programs and synergies
3 Financials Higher expenses for raw materials and supplies were offset by cost- cutting programs and synergies from the UASC integration Transport expenses per TEU [USD/TEU]1) -12 (-1%) 938 26 9 926 -17 -16 -142) -38 (-5%) 9M 2017 Expenses for raw Port, canal and Chartering, leases Container Mainte
Slide 15: Good free cash flow of USD 650 m in 9M 2018
3 Financials Good free cash flow of USD 650 m in 9M 2018 driven by a high cash conversion and limited investment needs Cash flow 9M 2018 [USD m] Operating Investing Financing cash flow cash flow cash flow 872 -221 -682 734 -101 -1,022 -304 1,270 43 40 972 1,164 545 -295 470 21 16 -136 Free cash flow
Slide 16: Stable equity base of USD 7.2 bn, solid liquidity reserve of USD 1.2 bn
3 Financials Stable equity base of USD 7.2 bn, solid liquidity reserve of USD 1.2 bn and reduced net debt of USD 6.5 bn Equity base [USDm] Net debt [USDm] Financial Debt 7,272 7,596 7.171 7.263 Cash 694 725 1) 6,535 6,812 1) Net Debt 30 September 2018 31 December 2017 30 September 2018 31 December 2
Slide 17: Revised Outlook for 2018 confirmed and refined
4 Way Forward Revised Outlook for 2018 confirmed and refined 2018 Initial Revised FY 2017 Sensitivities for 2018 1) Outlook 2018 Outlook 2018 Increasing Increasing +/- USD <0.1 Transport volume 9,803 TTEU +/- 100 TTEU clearly clearly bn 1,051 On previous On previous +/- 40 +/- USD ~0.5 Average freig
Slide 18: Major targets
4 Way Forward Major targets: Continue to deliver on synergies and deleverage the company over time Continue to develop more digitalized solutions for the customer Successfully implement the MFR mechanism Presentation of our new strategy at the Capital Markets Day on 21 November 18
Slide 19: Appendix
A Appendix 19
Slide 20: Hapag-Lloyd with positive EBITDA of USD 972 m in 9M 2018
A Appendix Hapag-Lloyd with positive EBITDA of USD 972 m in 9M 2018 Income statement [USD m] Transport expenses [USD m] 9M 2018 9M 2017 % change 9M 2018 9M 2017 % change Expenses for raw materials & supplies 1428.6 947.7 51% Revenue 10,071.5 8,167.7 23% Cost of purchased services 6,816.7 5,648.7 21%
Slide 21: Stable equity ratio of 41% and reduced gearing of 91%
A Appendix Hapag-Lloyd with a stable equity ratio of 41% and a reduced gearing of 91% Balance sheet [USD m] Financial position [USD m] 30.09.2018 31.12.2017 30.09.2018 31.12.2017 Assets Cash and cash equivalents 694.4 725.2 Non-current assets 14,775.6 15,146.1 Financial debt 7,272.1 7,595.5 of which
Slide 22: 9M 2018 one-off costs of USD 5 m related to the merger
A Appendix 9M 2018 generated one-off costs of USD 5 m related to the merger Transaction & integration related one-off costs [USD m] 5 0 ~110 86 17 2016 2017 9M 2018 Q4 208 Total 22 Note: Rounding differences may occur
Slide 23: Optimized bunker consumption, but bunker price increase harms P&L
A Appendix Hapag-Lloyd benefits from optimized bunker consumption, but substantial increase in bunker price harms P&L Bunker consumption price [USD/mt] Bunker consumption & expenses per TEU 650 Bunker consumption 0,40 600 per TEU [mt/TEU] 0,37 550 Bunker 500 expenses 126 151 per TEU [USD] 450 9M 201
Slide 24: Solid long-term and diversified financing portfolio
A Appendix Solid long-term and diversified financing portfolio Financial debt profile [USD m]1) 2,801 1.970 1,496 1,162 847 908 4592) 722 725 521 265 605 619 521 16 237 20 295 9 78 44 78 20 87 16 50 17 Q4 2019 2020 2021 2022 ≥ 2023 Liabilities to banks Liabilities from finance lease contracts Bonds
Slide 25: Geopolitical risk rises mainly due to conflicts between major economic players
A Appendix Geopolitical risk rises mainly due to conflicts between major economic players Volume Development of Main Trade Lanes From EU to US From US to China TEU 3.1m in 2018e TEU 3.2m in 2018e From US to EU From China to US TEU 1.9m in 2018e TEU 10.1m in 2018e Atlantic Trade: Transpacific Trade:
Slide 26: Freight rates are recovering slowly
A Appendix Freight rates are recovering slowly Comprehensive Index (CCFI/SCFI) Shanghai – North Europe (SCFI) 1.200 CCFI Comprehensive Index SCFI Comprehensive Index 1.500 SCFI NEurope (USD/TEU) 1.000 977 1.000 845 800 752 500 600 400 0 2015 2016 2017 2018 2015 2016 2017 2018 Shanghai – USA (SCFI) S
Slide 27: Convincing equity story resulted in higher share price
A Appendix Convincing equity story resulted in higher share price… Share trading 230 220 Frankfurt Stock Exchange / 210 Stock Exchange Hamburg Stock Exchange 200 190 180 170 Market segment / Regulated market (Prime Standard) / 160 Index SDAX 150 140 130 120 ISIN / WKN DE000HLAG475 / HLAG47 110 100 9
Slide 28: …and lower bond yields
A Appendix …and lower bond yields Bonds trading 110 105 103,1 100 100,6 95 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 / A2E4V1 Maturity Date Jul 15,
Slide 29: Preliminary Financial Calendar 2019
Preliminary Financial Calendar 2019 February 2019 Preliminary Financials 2018 March 2019 Annual Report 2018 May 2019 Quarterly Financial Report Q1 2019 August 2019 Half-year Financial Report 2019 November 2019 Quarterly Financial Report 9M 2019 29
Slide 30: 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 31: Hapag-Lloyd Investor Relations
Hapag-Lloyd Investor Relations Ballindamm 25 20095 Hamburg Tel: +49(40) 3001-2896 ir@hlag.com https://www.hapag-lloyd.com/en/ir.html 31