Wallenius Wilhelmsen Asa · OSL:WAWI
Wallenius Wilhelmsen Asa — Q3 2018 Earnings Presentation
27 slides from Wallenius Wilhelmsen Asa's earnings presentation, Nov 7, 2018
Slide 1: Q3 2018 Quarterly presentation
7 November 2018 Q3 2018 Quarterly presentation
Slide 2: Highlights third quarter 2018
Highlights third quarter 2018 EBITDA of USD 152 million Continued positive ocean volume development due to increased high & heavy volumes Some weakening in volumes late in the quarter reflecting more volatile auto markets Ocean results continue to be negatively impacted by higher and rising bunker c
Slide 3: Agenda
Agenda Business update Financial performance Market outlook Outlook and Q&A
Slide 4: Business update
Business update by Craig Jasienski
Slide 5: Slightly weaker volume development than previous quarters due to slow volumes late in the quarter
Business Update Financial Performance Market Outlook Outlook and Q&A Slightly weaker volume development than previous quarters due to slow volumes late in the quarter Volume and cargo mix development Comments Million CBM and % Auto High & heavy High & heavy share • Volumes moved sideways in the quar
Slide 6: Mixed volume development for the foundation trades y-o-y
Business Update Financial Performance Market Outlook Outlook and Q&A Mixed volume development for the foundation trades y-o-y EU - ASIA Asia - EU Atlantic Shuttle 0% -3% -5% -20% +9% -11% 2.9 3.0 2.9 3.4 2.9 2.7 3.6 3.0 3.3 Q3 ’17 Q2 ’18 Q3 ’18 Q3 ’17 Q2 ’18 Q3 ’18 Q3 ’17 Q2 ’18 Q3 ’18 Asia - NA EU/
Slide 7: Capacity gradually reduced due to rationalization of voyages and weaker volumes
Business Update Financial Performance Market Outlook Outlook and Q&A Capacity gradually reduced due to rationalization of voyages and weaker volumes towards end of the quarter Fleet development Comments # of vessels Owned Short Term T/C In/Out Chartered • Wallenius Wilhelmsen At the start of the qua
Slide 8: Rates remain under pressure, but 2018 contract renewals expected to impact 2019 positively
Business Update Financial Performance Market Outlook Outlook and Q&A Rates remain under pressure, but outcome of 2018 contract renewals YTD expected to impact 2019 results positively Rate changes and impact for 2018YTD contract renewals Comments (Circle indicate size of contract in millions) Rate ch
Slide 9: About 50% of revenues for the Ocean business will be renewed by end 2019
Business Update Financial Performance Market Outlook Outlook and Q&A About 50% of revenues for the Ocean business will be renewed by end 2019 Contract maturity profile for WW Ocean and EUKOR Percent of revenues maturing by year Examples include Space Charter volumes, rate agreements without agreemen
Slide 10: USD 120 million synergy target confirmed ahead of schedule
Business Update Financial Performance Market Outlook Outlook and Q&A USD 120 million synergy target confirmed ahead of schedule Confirmed and realized synergy development Comments USD million 121 110 120 • At the end of the third quarter the USD 120 million synergy target was confirmed. 86 • During
Slide 11: USD 100 million to be targeted through a new 2-year Performance improvement program
Business Update Financial Performance Market Outlook Outlook and Q&A USD 100 million to be to be targeted through a new 2-year Performance improvement program – a few examples Centralized vessel and voyage Contractual improvements Voyage rationalization management • Review un-profitable business • T
Slide 12: Financial performance
Financial performance by Rebekka Herlofsen
Slide 13: Consolidated results – third quarter 2018
Business update Financial Performance Market Outlook Outlook and Q&A Consolidated results – third quarter 2018 Q3 2018 Q2 2018 Q3 2017 Comments Total income 1 031 1 044 955 • EBITDA adjusted of USD 152 million, down 21% y- Operating expenses (879) (888) (766) o-y and down 4% q-o-q mainly driven by t
Slide 14: Ocean segment – third quarter 2018
Business update Financial Performance Market Outlook Outlook and Q&A Ocean segment – third quarter 2018 Total income and EBITDA ocean segment1 Comments USD million Total income EBITDA • Total income was USD 822 million, up 7% y-o-y due to a combination of increased net freight and increased fuel Ext
Slide 15: Net bunker costs increased with about USD 35 million y-o-y
Business update Financial Performance Market Outlook Outlook and Q&A Net bunker costs increased with about USD 35 million y-o-y Net bunker cost development y-o-y Comments 62 • Net bunker cost in the quarter increased by about USD 35 million y-o-y driven by increased bunker prices and higher 30 bunke
Slide 16: Landbased segment – third quarter 2018
Business update Financial Performance Market and Business Outlook Outlook and Q&A Landbased segment – third quarter 2018 Total income and EBITDA landbased segment Comments USD million Total income EBITDA • Total income was USD 225, up 11% y-o-y primarily driven by the Melbourne terminal and the acqu
Slide 17: Cash flow and liquidity development – third quarter 2018
Business update Financial Performance Market Outlook Outlook and Q&A Cash flow and liquidity development – third quarter 2018 Cash flow and liquidity development Comments USD million • CAPEX of USD 49 million includes 152 • Dry docking costs (about USD 10 million) -49 -6 546 • VPCs in Tacoma and Oxn
Slide 18: Balance sheet review – third quarter 2018
Business update Financial Performance Market Outlook Outlook and Q&A Balance sheet review – third quarter 2018 Balance Sheet 30.09.2018 Comments USD billion Assets Equity & Liabilities • Total assets of USD 7.5 billion with equity ratio of 38.0%, up from 37.4% last quarter 7.5 7.5 • Net interest bea
Slide 19: Market outlook
Market outlook by Craig Jasienski 19
Slide 20: Soft auto sales in the quarter (-2.2% y-o-y), driven by September headwind
Business update Financial Performance Market Outlook Outlook and Q&A Soft auto sales in the quarter (-2.2% y-o-y), driven by September headwind in several markets Global light vehicle (LV) sales per quarter1) Regional LV sales per month2) Units Growth (y-o-y) -2.2% -5.9% USA (+0.5% YTD): -3% +1% -5%
Slide 21: Auto exports strengthened 2.1% y-o-y in the third quarter
Business update Financial Performance Market Outlook Outlook and Q&A Auto exports strengthened 2.1% y-o-y in the third quarter, but growth moderated after two buoyant quarters Global LV export per quarter Regional LV import per quarter Units Growth (y-o-y) +7.4% +2.1% -2.0% North America (+3.6% YTD)
Slide 22: Auto analysts remain positive about medium and long-term growth prospects
Business update Financial Performance Market Outlook Outlook and Q&A Auto analysts remain positive about medium and long-term growth prospects, but market uncertainty has increased in the near-term Global LV forecasts Units and growth (y-o-y) Global LV sales Several factors are fuelling uncertainty
Slide 23: Global expansion in high & heavy end-markets continued in the third quarter
Business update Financial Performance Market Outlook Outlook and Q&A The global expansion in high & heavy end-markets continued in the third quarter, with exports growing 9% y-o-y1 H&H OEM analyst consensus sales estimates2 Comments Growth (y-o-y) 27% Construction • Construction equipment demand was
Slide 24: Order book remains low
Business update Financial Performance Market Outlook Outlook and Q&A Order book remains low Car Carrier Fleet Orderbook Open Vessels and Time Charter Rates # vessels equal or above 4000 CEU # of vessels and USD/day TC Rate, $/day Number of vessels 20 5 25 000 50 45 11 20 000 40 35 15 000 30 25 10 00
Slide 25: Outlook and Q&A
Outlook and Q&A by Craig Jasienski
Slide 26: Outlook
Business update Financial Performance Market Outlook Summary and Q&A Outlook Increased uncertainty around the auto outlook in light of weaker auto sales in certain markets towards the end of the third quarter and the potential risk of trade barriers The positive development for high & heavy volumes
Slide 27: Thank you!
W Wallen ius Wilhelmsen Thank you!