Hapag-lloyd Ag · XETR:HLAG
Hapag-lloyd — Investor Day (November 2018)
94 slides from Hapag-lloyd's investor day presentation, Nov 21, 2018
Slide 1: Capital Markets Day
Capital Markets Day Hamburg, 21 November 2018
Slide 2: Corporate Development
Corporate Development CEO Rolf Habben Jansen
Slide 3: Hapag-Lloyd – 171 years young…
Hapag-Lloyd – 171 years young… Founding Merger Takeover of Hapag in of Hapag and NDL to by Albert Ballin Hamburg Hapag-Lloyd Consortium 1847 1970 2009 1857 2005 Profit slump in the course of the Founding Merger global economic crisis of Norddeutscher with CP Ships Lloyd (NDL) 3
Slide 4: … and we continue to further build the company
… and we continue to further build the company and help shape the future of the Industry… CSAV Merger Successful cash Hapag-Lloyd kicked off BCA the latest wave of with UASC capital increase signed of USD 413m sector consolidation CSAV Synergies Closing of the exceeded expectations UASC Merger 2014
Slide 5: …as illustrated by some key figures
…as illustrated by some key figures when looking back only a few years People Volume 12,660 11,700 TTEU 7,000 5,900 TTEU 2014 9M 2018 2014 LTM 9M 2018 Ø Vessel Size & Age Revenue 7,190 TEU USD 13,200 m 5,300 TEU USD 9,050 m 8.7 years 7.5 years 2014 9M 2018 2014 LTM 9M 2018 5 Note: Rounded figures, 2
Slide 6: Industry consolidation wave
The past years, the industry has gone through a needed and unprecedented wave of consolidation… Industry consolidation Global capacity share [%] Carrier capacity [TEU m] 2.5 2.3 Ranking end of 2013 Top 5 1.5 Top 6-10 Remaining 0.8 0.8 0.7 0.7 0.6 44% 0.6 0.5 0.5 0.5 0.5 0.4 0.4 0.3 0.3 0.3 0.3 0.3 6
Slide 7: Integration ability and synergies gained
…and we leveraged our ability to integrate efficiently, which allowed us to create significant value and achieve sustainable scale Timeline of major integration activities Synergies gained (in USDm) Initially estimated synergies 180 12 months CP Ships 218 integration 2005 Closing Integration complet
Slide 8: Renewed a major part of our fleet
In that process we have also renewed a major part of our fleet… Vessels & Total Capacity [#, TEUm] 1.6 TEUm 1.0 TEUm 0.8 TEUm 222 144 172 Pre-CSAV Pre-UASC Today 31 newbuilds were delivered from 2015 to 2017 while 26 vessels have been recycled since 2015 6 x 19,870 TEU 11 x 15,000 TEU 5 x 10,500 TEU
Slide 9: One of the youngest and most fuel efficient fleets
…resulting in one of the youngest and most fuel efficient fleets in the industry… Average fleet age [years]1) Average vessel size [TEU] Fleet ownership [%] 9.5 current chartered fleet Current own fleet3) 8.8 7,190 8.3 8.0 7.7 6,327 6,316 7.5 5,905 5,585 34% 35% 5,369 41% 51% 55% 66% 66% 65% 59% 49%
Slide 10: A well balanced network
…we have a well balanced network… Transport volume by trade 9M 2018 16% 16% 18% 22% 9% 13% 9% 9M 2014 5% 9M 2018 TTEU 23% TTEU 2,072 1,601 1,382 1,459 959 1,033 1,115 921 945 783 489 488 EMAO Transpacific Australasia Latin America Far East Far East Middle East Atlantic Atlantic Transpacific Intra As
Slide 11: Relevant global market share in all major trades
…a relevant global market share and a solid presence in all major trades… Hapag-Lloyd’s Global Market Share on selected trades by transport volume [%] Atlantic Far East Transpacific Middle East 10% 7% 22% 18% 146,235 Latin America 11,674 Intra-Asia 116,344 >9% 14% Market share Other Trades [excl. In
Slide 12: A core member of THE Alliance
…and are a core member of THE Alliance Alliance members THE Alliance 2M Ocean Alliance Capacity consolidation on key trades has improved substantially due to alliances Atlantic Transpacific Far East Others 2M Others 2M Others 2M 9% 41% 12% 20% 0% 40% 34% 16% 27% 42% 24% 36% THE Alliance Ocean THE Al
Slide 13: Container volume growth expectation remains healthy
Despite increasing geopolitical risks, container shipping volume growth expectation remains on a healthy level… Global Container Volume Growth & Real GDP Growth [%] 2000 = Indexed to 100 GDP multiplier 1.9x 1.0x 1.3x 300 250 Container Volume 200 Growth 150 Real GDP 100 2000 2001 2002 2003 2004 2005
Slide 14: Low orderbook improving supply/demand balance
…which, combined with the historically low orderbook, will lead to a further improving supply/demand balance in the years to come Orderbook-to-fleet Newly placed orders [TEU m, %] [TEU m, %] YTD 2018 3.2 Orderbook 61% Vessels > 14,000 TEU 2.0 2.2 Share of World Fleet 1.8 6.5 50% 1.2 1.1 1.0 6.0 0.8
Slide 15: Financial Development
Financial Development CFO Nicolás Burr
Slide 16: Opening Remarks
Opening Remarks 01 Scale Substantial volume and revenue growth 02 Cost Continuous reduction of unit costs 03 Profitability Consistently above industry average 04 Balance Sheet Strengthening through capital market measures 16
Slide 17: Transport volume and revenue growth after two mergers
On the back of two mergers, Hapag-Lloyd was able to significantly increase transport volume and revenues Volume and Revenue Development Q1 2014 – Q3 2018 Capacity 1,009 966 963 1,573 1,596 year end [TTEU] 3,542 3,352 3,268 3,217 Transport Volume [TTEU] 3,119 3,052 Revenue [USDm] 2,987 2,861 2,807 2,
Slide 18: Continuously reduced transport expenses
We continuously reduced transport expenses … Unit cost development Q1 2014 – Q3 2018 Hapag-Lloyd HL + CSAV as of HL + UASC as of standalone 2nd December 2014 24th May 2017 Synergies CSAV Synergies UASC 1,363 1,089 1,057 925 921 926 Unit cost [USD] 929 Unit cost ex bunker [USD] -7.3% 825 785 765 2014
Slide 19: Improvements in every cost category
…and realised substantial improvements in every single cost category Total cost per TEU development 2014 – 2018 2014 -2018 Transport- volume TTEU 5,907 7,401 7,599 9,803 8,900 [USD] 1,562 -47% 306 1,232 160 1,067 1,074 1,059 -28% 100 136 161 1,057 929 -30% 825 785 765 91 78 73 72 64 -36% 108 70 70 7
Slide 20: Bunker prices up, freight rates stable
While bunker prices increased since 2016, freight rates have remained stable Freight Rate vs. Bunker Price Q1 2014 – Q3 2018 Freight Rate [USD] Bunker Price [USD/mt] 1,422 1,426 1,448 1,412 1,331 -1.1% 1,264 1,189 1,116 1,067 1,072 1,019 1,027 1,033 1,056 1,065 1,030 1,029 1,055 1,010 +150.4% 592 58
Slide 21: Results improve consistently since Q2 2016
Results improve consistently since Q2 2016 despite a challenging industry environment EBITDA and EBIT Development Q1 2014 – Q3 2018 EBITDA margin 1.4% 9.4% 7.9% 10.6% 9.6% EBIT margin -5.5% 4.1% 1.6% 4.2% 3.6% EBITDA USDm EBIT USDm 457 415 390 319 247 253 270 245 231 219 206 196 202 252 +453 150 152
Slide 22: Profitability consistently above industry average
Hapag-Lloyd’s profitability has been consistently above industry average for the past 4 years EBIT Margin Development Q1 2014 – Q3 2018 Hapag-Lloyd EBIT margin Average industry EBIT margin 7.6% 7.1% 8 6.1% 4.9% 5.1% 5.4% 6 3.9% 3.8% 3.4% 3.5% 4 5.0% 2.1% 2.4% 0.9% 1.4% 1.4% 1.2% 2 0.8% 0.2% 0.4% 0.6
Slide 23: 2009 freight rate and bunker price on 2018 cost structure
Our efforts to reduce costs become obvious when applying the 2009 freight rate and bunker price to our 2018 cost structure 2009 freight and bunker price impact on 2018 results (indicative) Key takeaways ▪ Results in 2009 show disappointing cost Market 2009 9M 2018 Indicative 20181) management Freigh
Slide 24: Strengthened equity base and optimized debt structure
We have also strengthened our equity base while at the same time optimizing our debt capital structure … Capital Market Projects Capital Increases Bond Issuances Issuance of two new bonds with a total value of EUR 900 m Takeover container activities ~ USD 1.5 bn The proceeds were used to proac
Slide 25: Financial debt profile as at 30 September 2018
…and reduced financing Capital increase II costs as well as improved the maturity structure of financial liabilities Financial Debt Profile as at 30 September 2018 Contractual Repayment Profile as per 30 September 20181), [USDm] 2,801 Liabilities to banks Liabilities from finance lease contracts Bon
Slide 26: Reduced CAPEX and positive operating cash flow
Reduced CAPEX and substantial positive operating cash flow generation help to increase FCF and to deleverage the company CAPEX 2014-2018 [USD m] Cash flow 2014-2018 [USD m] Operating Cash Flow Other Containers Vessels Free Cash Flow 159 -38 109 1,048 651 925 1,020 105 872 279 635 521 449 11 433 501
Slide 27: Equity base, liquidity reserve and net debt
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] Equity ratio 41.3% 45.5% 44.6% 40.9% 41.0% LTM Net debt / Gearing 72.1% 66.1% 71.0% 93.8% 91.1% 27.9x 3.9x 5.7x 5.7x 4.8x EBITDA 7,595 7,272 7,263 7,171 783 7
Slide 28: Efforts recognized by the capital markets
Our continuous efforts have been recognized by the capital markets Share performance since 6 November 2015 Indexed Price 225 200 175 150 125 100 75 50 HLAG Maersk Evergreen OOIL SDAX DAX Global Shipping Bonds trading 110 105 103.4 100.9 100 95 HL EUR 6.75 % 2022 HL EUR 5.125% 2024 28 Source: Bloombe
Slide 29: Wrap-up
Wrap-up Key takeaways ▪ Hapag-Lloyd financials show clear positive development Scale ▪ Since 2014, Hapag-Lloyd has substantially grown transport volume and revenue ▪ At the same time, we were able to significantly reduce our unit costs ▪ In a challenging market environment, we were able to steadily
Slide 30: Strategy 2023
Strategy 2023 CEO Rolf Habben Jansen & CFO Nicolás Burr 30
Slide 31: Going forward, what do we assume?
Going forward, what do we assume? § Technology Market structure External restrictions opportunities ▪ Reasonable growth ▪ Increasing legislative ▪ Carriers build online channels and societal pressure on to target smaller customers ▪ Reasonably rational capacity environmental sustainability addition
Slide 32: Marginal returns from further scale have diminished
In our industry marginal returns from further scale have diminished significantly Hapag-Lloyd HL + CSAV as of HL + UASC as of Twice-the-scale standalone 2nd December 2014 24th May 2017 scenario -12% -11% -5% -3% -2% to -4% Unit cost ex bunker 2014 2015 2016 2017 9M 2018 32
Slide 33: Clear strengths to build on
Hapag-Lloyd has a number of clear strengths to build on Process quality In-house IT Strong brand Global blueprint data management Quality reputation Strong global Balanced trade shareholder base Pure play carrier portfolio Solid Balance Sheet Global player The best team from with a relevant Young an
Slide 34: Strategy 2023 has 3 overarching goals
Our Strategy 2023 has 3 overarching goals Number 1 Be profitable Profitability Deliver unparalleled for quality throughout the cycle quality, be customer-oriented, and create value for customers as well as capture value for Hapag-Lloyd Global Reinforce strongholds player Focus on customer Expand in
Slide 35: Core elements to achieve Strategy 2023 goals
Overview of core elements to achieve the goals of our Strategy 2023 Continuously earn and keep Mid and long-term differentiating strategy the “right to play” Environmental No. 1 quality carrier responsibility Continuous Cost Management Superior land side Best-in-class capabilities Web Channel Sustai
Slide 36: Continuously earn and keep the right to play
Continuously earn and keep the “right to play” 36
Slide 37: Remaining cost competitive is a pre-requisite
To enable our differentiation strategy, remaining cost competitive is a pre-requisite… From vendor to partner Continuous Cost Management Container Terminal Steering Partnering Improve cargo Increase quality steering Network Collaboration Optimize port-stay Container Procurement Fix unprofi
Slide 38: Cost management program with USD 350-400m savings
…and we launched a cost management program, structured in 5 modules with a savings run-rate of USD 350-400 million1) by 2021 350 – 4001) Cost savings, USDm Modules: Network Container Collaboration Terminal Procurement Total Steering Partnering 38 1) Compared to a FY 2017 cost base (incl. UASC busine
Slide 39: Initiatives in implementation phase
Many of the initiatives are currently already in the implementation phase, with more to come Example: Transshipment Advanced analytics tool developed Optimize share of transshipment and direct cargo Network Optimization of all shipsystems Managing surplus / demand Reduce empty moves Advanc
Slide 40: Revenue Management Excellence
Revenue Management Excellence is based on Product, Pricing and Uptake Management Decision on Decision on Booking Decision on Pricing Product/Contract Uptake ▪ Clearly defined products ▪ Analytics-based decision ▪ Better forecasting ▪ Improved contract adherence support for dynamic pricing capabiliti
Slide 41: Pricing & Revenue Management in three phases
To achieve our vision, we will transform Hapag-Lloyd’s Pricing & Revenue Management in three phases… Strengthen the basics Foundations of new Advanced Revenue Revenue Management Management excellence 2018-2019 2019-2020 Long-term aspiration (2020+) Dedicated change management along the journey 41
Slide 42: Contribution Boost
…which we started in 2018 with the “Contribution Boost” ▪ Focus on 10 short-term initiatives with Examples: Reduction of low no major system changes contributing business Strengthening the basics: ▪ Improve cargo mix steering and reduce Contribution Boost revenue leakages AT WB -63% ▪ Replacing leas
Slide 43: Mid- & long-term differentiating strategy
Mid- & long-term differentiating strategy 43
Slide 44: Six strategic pillars
Our strategy is based on our unique strengths and true differentiation through six strategic pillars I No. 1 quality carrier II Superior land side capabilities III Focus on selected attractive markets and segments Rationale: Proven willingness Rationale: Inland is a differentiator and Rationale: Shi
Slide 45: Proven quality matters to more than half the market
Market research reveals that PROVEN and CONSISTENT quality matters to more than half the market… "Price A seekers" 01 Capture willingness to pay Mainly from existing customers by cost-driven delivering the required quality selection levels Optimize customer mix by "Value 02 leveraging willingness to
Slide 46: Clearly articulated core product
…and we will deliver a clearly articulated core product to all customers and more for value and quality seekers Premium Product Diversified to target specific Improved service levels for customer needs customers who value not addressed by premium service level, base product as clearly differen- tiat
Slide 47: Future Quality Commitments
We have defined our future Quality Commitments – which will be an essential part of the “handshake” with our customers… Responsive service Commitment to volume and bookings Timely and accurate documentation Booked and loaded Provision of accurate as agreed information on time Reliable transport Paym
Slide 48: First steps on a multi-year quality journey
…and we have already taken the first steps on what we know is a multi-year journey to differentiate on quality… This will require us to reach deep down into our organizational structure and operational “engine room”, building on our proven track record of executing large scale projects. We have alre
Slide 49: Segments where customers pay for value
…and some of it is already in place today Some examples of segments where customers are willing to pay for value Web Channel Cherry Express Dangerous Goods Instant quotes Fast transit times Safety Immediate booking Direct port calls High quality documentation Direct confirmation Spec
Slide 50: More end-to-end business
Hapag-Lloyd intends to offer more end-to-end business, as we believe this can be beneficial for all parties Higher profitability by Increased differentiation Improved control over Improved cost through capturing some value through better E2E equipment flows and integrated procurement pools and feed
Slide 51: Expand niche segments and strongholds
We will expand our position in attractive niche segments, reinforce our strongholds and further build growth markets Attractive markets Niche segments ▪ High market growth Reefer ▪ Customers are prepared to pay for high quality & value ▪ The market offers Special untapped opportunities Cargo ▪ Ambit
Slide 52: Sustainable value creation
Sustainable value creation 52
Slide 53: Creating Shareholder Value through Strategy 2023
Creating Shareholder Value through Strategy 2023 To recap, we have described …and in financial terms our the 3 goals of our Strategy 2023… objectives are to: Number 1 Profitability Return more than for quality 01 our cost of capital Deliver on our Financial 02 and Non-Financial Global Targets player
Slide 54: Financial Targets to be achieved until 2023
Financial Targets to be achieved until 2023 Profitability ROIC (throughout the cycle) > WACC [This implies an EBITDA-margin of ~ 12%] Deleveraging Net Debt / EBITDA ≤ 3.0x Equity Equity ratio > 45% Liquidity Adequate liquidity reserve of ~ USD 1.1 bn 54 Note: All KPI’s subject to IFRS 16 adjustments
Slide 55: Non-Financial Targets to be achieved until 2023
Non-Financial Targets to be achieved until 2023 Quality Achieve best in class Net Promoter Score (NPS) Measure and improve On Time Delivery Superior landside Increase share of door-to-door business to over 40% of total by 2023 Grow volume in selected attractive markets and achieve a market share Att
Slide 56: Wrap-up
Wrap-up Key takeaways ▪ Marginal returns from further scale have diminished significantly Industry ▪ We believe that the industry is at an inflection point and the future is about differentiation ▪ Hapag-Lloyd has a strong starting position to take the next step to become the number one for quality
Slide 57: Agile Organization
Agile Organization – Ongoing organizational improvements to implement Strategy 2023 CPO Joachim Schlotfeldt 57
Slide 58: Hapag-Lloyd became a truly global company
Hapag-Lloyd became a truly global company over the last couple of years… The "new Hapag-Lloyd"... … is younger in age… … and is more international [Average age] [Nationalities employed] 39.2 76 78 90 39.1 38.4 Pre-CSAV Pre-UASC Post-UASC Pre-CSAV Pre-UASC Post-UASC Hapag-Lloyd in numbers: ~12,600 em
Slide 59: Organization in a strong starting position
…and it’s organization is in a strong starting position to master future challenges Capabilities ▪ Strong and recognized IT & process quality Execution excellence ▪ Ability to successfully manage large-scale projects, e.g. CSAV and UASC integration Sales and ▪ Global Sales and Customer Service netwo
Slide 60: Modernize organization and improve agility
But to be able to execute Strategy 2023 successfully we need to modernize our organization and improve agility… Introduction to Agile Organization Our goal: Steps of the organizational transformation Increase the agility of the organization Core Processes Improve core processes, optimize / simplify
Slide 61: Streamlined processes, better tools, core focus
…which requires streamlined processes, better tools and a focus on core business functions Core Processes Business Admin Excellence: Voyage Control: Cargo Control: Streamline planning and Increase schedule Improve quality of steering processes reliability allocation management and ship planning Appr
Slide 62: Quality Service Centers
Establishing Quality Service Centers will increase consistency and quality… 1. Improve the consistency and quality of the service provided by Hapag-Lloyd in Areas 2. Make continuous improvement of processes easier 3. Make process and system roll-outs / updates much faster and more reliable Regiona
Slide 63: Automation to focus staff on higher value-added tasks
…while automation will allow staff to focus on tasks with higher value-added Robotics Focus staff on value-adding functions Natural language Increase quality and speed of work, generation reduce errors Cognitive agents Support further volume growth of HL Build on automation already in place Machine
Slide 64: Organization looking different in 2023
Our organization will look substantially different in 2023 with more analytically driven roles and reduced data entry & processing roles Resource shifts Illustrative Additional staff Regular Additional staff to support to cover productivity Long-term strategy, e.g. niche specialists, volume growth g
Slide 65: Procurement Focus
Continuously earn and keep the “right to play” – Procurement Focus CPO Joachim Schlotfeldt 65
Slide 66: Strengthen procurement and supplier management
We will significantly strengthen our procurement and supplier management capabilities and competence Transport+ initiative to reduce transport spend Bunker procurement Corporate procurement Terminal procurement ▪ Objective is to raise service levels and reduce cost – i.e., improve value for money, n
Slide 67: Procurement excellence program in transport
Procurement excellence program in transport aims at capturing the full potential by reducing costs and increasing service levels Standard procurement Individual levers Focused enablement to methods ensure savings capture ▪ Apply standard procurement ▪ Develop market specific levers ▪ Ensure successf
Slide 68: Procurement program focus on transport spend
The procurement program will initially focus on transport spend and additional locally sourced spend categories… Key takeaways ▪ Transport spend fully in scope 2,882 ▪ Further increase due to general cost inflation cannot be ruled out Rail ▪ Additional locally sourced cost Container transport Barge
Slide 69: First results show ambition is feasible
…and the first results illustrate that this ambition is feasible and realistic First pilot in Area Benelux completed with positive results Next steps Cost savings of mid single digit USD million as well as process and quality ▪ Europe-wide rail improvements tender ▪ Currently addressing Partners
Slide 70: Wrap-up
Wrap-up Key takeaways Strong ▪ Hapag-Lloyd became a truly global company over the last couple of years… backbone ▪ …and can build on acknowledged core competencies ▪ To adapt faster than competition to changing business environment and to adapt Become successfully Strategy 2023 we need to further mo
Slide 71: Environmental Responsibility – IMO 2020
Environmental Responsibility – IMO 2020: Tackling regulatory challenges COO Anthony Firmin 71
Slide 72: Regulatory challenges in shipping
Regulatory challenges have always played a role in shipping Hapag-Lloyd has successfully adopted new regulations throughout its history Tier 3 IMO2020 24-hour rule SOX max 3.5% ISPS Shiprecycling Ballast water … 72
Slide 73: From 2020 ships must use 0.5% sulphur fuel
As of 2020, all ships will be required to use fuel with 0.5% sulphur content or less on all the world‘s oceans IMO 2020 Sulphur Regulation Bunker fuel Sulphur limit % Sulphur (by weight) 4.5 Global 4.0 ECA 3.5 3.0 Emission control All international 0.5% worldwide areas (ECAs3: bunkers outside 2.5 Eu
Slide 74: Three options to comply with IMO2020
There are three options to comply with IMO2020 but Low Sulphur Fuel Oil will be the key solution in the short term Options for ensuring compliance 1 2 3 Liquefied natural Exhaust gas Compliant gas (LNG) cleaning systems fuels Estimated containership fleet as at 2020E LNG powered newbuildings LNG pow
Slide 75: Liquefied Natural Gas (LNG)
Liquefied Natural Gas (LNG) Hapag-Lloyd believes LNG could be the mid-term fuel solution for the shipping industry Hapag-Lloyd’s position Regulatory certainty + Lower emissions 17 vessels LNG Future availability ready1) Refitting High capex one 15k – class vessel Bunkering network not yet
Slide 76: Exhaust Gas Cleaning Systems (EGCS)
Exhaust Gas Cleaning Systems (EGCS) The use of EGCS is economically attractive as a short- to mid-term solution Hapag-Lloyd’s position Lower capex than LNG + No issues with fuel (HSFO 3.5%) 10 retrofits Economically attractive planned for 2019/2020 Proven base technology Retrofits for 13k TE
Slide 77: Compliant Fuels
Compliant Fuels Compliant fuels are the key solution for ensuring compliance from 2020 onwards Hapag-Lloyd’s position No capex + Currently most environmentally Key solution friendly solution going into 2020 Confirmed availability1) ~90% of ships in – High price industry Higher opex Major
Slide 78: IMO2020 makes industry greener but at a price
The IMO2020 regulation will make the industry greener but it will come with a price Costs will go up as both compliant fuels and investments into new technologies will be expensive Estimated impact Estimated impact Estimated impact on entire on container on Hapag-Lloyd shipping industry shipping ind
Slide 79: Marine Fuel Recovery mechanism
To recover fuel related costs caused by the IMO2020, Hapag-Lloyd has developed a Marine Fuel Recovery (MFR) mechanism Marine Fuel Recovery Mechanism will be gradually implemented from beginning of 2019 – all customers will take part in this change Hapag-Lloyd will replace all existing fuel charg
Slide 80: New MFR mechanism is logical and transparent
The new MFR mechanism is logical, transparent and easy to understand MFR creates transparency and is based on market data and averages for market class vessels Helps our customers predict and plan price development Customer feedback on the MFR has been largely positive The MFR is based on mark
Slide 81: Welcoming the Carriage Ban
Governance is crucial – Hapag-Lloyd welcomes the Carriage Ban A robust enforcement regime is necessary for ensuring a level playing field The IMO itself has no authority for Each Flag and port state responsible governance for enforcing the regulation with sanctions and fines Carriage Ban as of March
Slide 82: Effect on supply / demand balance
Will the new regulation affect the supply / demand balance in liner shipping? Disadvantage of inefficient vessels will become more apparent as older vessels need to use more expensive fuels Illustrative Fuel costs per day for an old +62,5% 4,000 TEU vessel 32.850 [USD/day] +$6,407 20.216 +$3,943 Cos
Slide 83: Wrap-up
Wrap-up Key takeaways IMO 2020 will effect the industry as a whole Regulation 2020 Three options are available to achive compliance (LNG, EGCS, Compliant Fuels) Majority of containerships will run on compliant fuel as of 2020 Hapag-Lloyd embraces new regulation as industry is becoming greene
Slide 84: Digital Transformation
Digital Transformation CEO Rolf Habben Jansen 84
Slide 85: Journey to digitization started in the early 90s
Hapag-Lloyd’s journey to digitization started in the early 90’s „Electrification“ Digitization 1990 Today Integration 93 00 10 CSAV & 18 UASC Advanced functions and process Advanced System standardization & coverage, EDI-connectivity, forecasting & integration for core processes automation, system a
Slide 86: Existing IT is the basis for digitization
Hapag-Lloyd’s existing IT is the basis for our digitization efforts… Compass Integration Single Version of Truth FIS Biz Analytics High Degree of Automation, i.e. Quality and Efficiency Customer Supplier SAP Connectivity EDI/API/Web/Mobile Communication CRM Marine Ops Analytics to manage global ne
Slide 87: Close alignment between Business and IT
…which can only be successful if there is close alignment between Business and IT HL IT Biz-IT Alignment Digital Excellence Integrated management of digital Tech Watch Unit development programme Digital Channel & e-Biz Unit Track >200 start-ups Commercial, Operations, BA, IT, Board Hapag-Lloyd
Slide 88: Monitoring developments and partnering with leading-edge companies
Hapag-Lloyd is actively monitoring digital developments and partnering with leading-edge companies… We are closely monitoring developments. Where sufficiently interesting we start discussions, leading to pilots, and eventually to partnerships TechWatch Objective Artificial Forecasting of empty conta
Slide 89: Technological innovations create better customer solutions
…as we know that technological innovations help to create new and better customer solutions… There are plenty of opportunities for carriers to differentiate, also with regard to digitization While the basic customer Customer service needs have not changed Physical services much, customers today
Slide 90: Digital Channel Incubation Unit (DCIU)
…and to accelerate this we set up the Digital Channel Incubation Unit (DCIU)… Hapag-Lloyd’s new Digital Channel Incubation Unit Customer (DCIU) drives digitization within the company Insights & Data Working with continuous real-time market & customer research, product development, marketing and IT t
Slide 91: Quick Quotes launched in 2018
…who in a joint effort with IT & Business launched Quick Quotes in 2018… 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 Hapag- regardless
Slide 92: Quick Quotes grown to around 6% of volume
…which in 10 months has grown to around 6% of global Hapag- Lloyd volume – a business of over USD 0.5 bn annualized revenue! Quick Quotes volume development Volume1 Quotations2 ‘000 TEUs ‘000 New product 15 Public launch of (Open Top) 100 Project Web Channel start (week 33) 12 80 New products 9 (e.g
Slide 93: Wrap-up
Wrap-up Key takeaways ▪ Hapag-Lloyd has always been at the forefront of IT developments Single ▪ Our global single operating system is an industry acclaimed competitive operating advantage… system ▪ …and a strong basis for further digital development Digitization ▪ Providing customer solutions by dr
Slide 94: Number One for Quality!
Number One for Quality! Actively drive change by building on our capabilities Continually earn and keep our right to play Deliver unparalleled quality Become a more agile organization Deal with regulatory changes in an environmentally friendly manner Create new and better customer solutions through