Wallenius Wilhelmsen Asa · OSL:WAWI
Wallenius Wilhelmsen Asa — Q4 2018 Earnings Presentation
29 slides from Wallenius Wilhelmsen Asa's earnings presentation, Feb 12, 2019
Slide 1: Q4 2018 Quarterly presentation
February 12th 2019 Q4 2018 Quarterly presentation
Slide 2: 2018 in brief
2018 in brief Financial results weakened compared to 2017, largely driven by higher bunker prices Rates remained under pressure, but market fundamentals continued to improve New legal and funding structure consistent with the business unit structure was established and a large share of the groups de
Slide 3: Highlights fourth quarter 2018
Highlights fourth quarter 2018 Adjusted EBITDA of USD 168 million, a 10% improvement q-o-q, but down 8% y-o-y Underlying flat ocean volume development y-o-y Ocean result impacted by biosecurity challenges and weaker project shipments in Atlantic The landbased segment delivered stable performance Mor
Slide 4: Agenda
Agenda Business update Financial performance Market outlook Outlook and Q&A
Slide 5: Business update
Business update by Craig Jasienski
Slide 6: Underlying flat volume development in the quarter, but overall volumes pulled down by contractual changes
Business Update Financial Performance Market Outlook Outlook and Q&A Underlying flat volume development in the quarter, but overall volumes pulled down by contractual changes Volume and cargo mix development Comments Million CBM and % Auto High & heavy High & heavy share • The underlying ocean volum
Slide 7: Negative volume development for the foundation trades
Business Update Financial Performance Market Outlook Outlook and Q&A Negative volume development for the foundation trades – largely explained by a few contractual changes EU - ASIA Asia - EU Atlantic Shuttle -7% +9% -10% +9% 3.4 3.2 3.3 -8% -4% 2.9 3.0 2.7 3.4 3.3 3.1 Q4 ’17 Q3 ’18 Q4 ’18 Q4 ’17 Q3
Slide 8: Fleet capacity being tightly managed and voyage rationalization efforts helped to reduce the fleet size
Business Update Financial Performance Market Outlook Outlook and Q&A Fleet capacity being tightly managed and voyage rationalization efforts helped to reduce the fleet size further Fleet development Comments # of vessels Owned Chartered Short Term T/C In/Out • Wallenius Wilhelmsen controlled a fleet
Slide 9: Rates remain under pressure, but also some positive development experienced for certain liner business
Business Update Financial Performance Market Outlook Outlook and Q&A Rates remain under pressure, but also some positive development experienced for certain liner business Rate changes and impact for 2018 contract renewals Comments (Circle indicate size of contract in millions) Rate change New rates
Slide 10: The 2-year performance improvement program is off to a good start
Business Update Financial Performance Market Outlook Outlook and Q&A The 2-year performance improvement program is off to a good start Confirmed and realized improvements Comments USD million in annualized effect 100 • The performance improvement program saw improvements in contractual arrangements
Slide 11: Financial performance
Financial performance by Rebekka Herlofsen
Slide 12: Consolidated results – fourth quarter 2018
Business update Financial Performance Market Outlook Outlook and Q&A Consolidated results – fourth quarter 2018 Q4 2018 Q3 2018 Q4 2017 Comments Total income 1 022 1 031 1 033 • Total income was USD 1 022 million in the fourth Operating expenses (854) (879) (853) quarter, down 1% y-o-y due to lower
Slide 13: Ocean segment – fourth quarter 2018
Business update Financial Performance Market Outlook Outlook and Q&A Ocean segment – fourth quarter 2018 Total income and EBITDA ocean segment1 Comments USD million Total income EBITDA • Total income was USD 807 million, down 3% y-o-y driven by lower net freight which was partly offset by Extraordin
Slide 14: Higher bunker prices impacted results with USD 10 million y-o-y
Business update Financial Performance Market Outlook Outlook and Q&A Higher bunker prices impacted results with USD 10 million y-o-y Bunker price development in 2018 Net bunker cost increase y-o-y USD/ton HFO1 USD million 33 500 450 400 41 ~10 350 300 Jan Feb Mar Apr Mai Jun Jul Aug Sep Okt Nov Des
Slide 15: Landbased segment – fourth quarter 2018
Business update Financial Performance Market and Business Outlook Outlook and Q&A Landbased segment – fourth quarter 2018 Total income and EBITDA landbased segment Comments USD million Total income EBITDA • Total income was USD 235 million, up 8% y-o-y driven by increased revenues for VSA, the Melbo
Slide 16: Consolidated results – Full year 2018
Consolidated results – Full year 2018 Full year Full year 2017 Comments % change 2018 proforma Total income 4 065 3 849 6% • Total income was USD 4 065 million for the full year of 2018, an increase of 6% from last year with increased Operating expenses (3 463) (3 173) 9% revenues for both the ocean
Slide 17: Cash flow and liquidity development – fourth quarter 2018
Business update Financial Performance Market Outlook Outlook and Q&A Cash flow and liquidity development – fourth quarter 2018 Cash flow and liquidity development Comments USD million • CAPEX of USD 38 million includes 168 • Dry docking costs (USD 10 million) -38 • Scrubber instalments (USD 15 milli
Slide 18: Balance sheet review – fourth quarter 2018
Business update Financial Performance Market Outlook Outlook and Q&A Balance sheet review – fourth quarter 2018 Balance Sheet 31.12.2018 Comments USD billion Assets Equity & Liabilities • Total assets of USD 7.4 billion with equity ratio of 38.8%, up from 38.0% last quarter 7.4 7.4 • Net interest be
Slide 19: IFRS 16 – Impact for Wallenius Wilhelmsen
IFRS 16 – Impact for Wallenius Wilhelmsen Estimated impact of Change in Lease Accounting (IFRS 16) Comments USD million Effect on balance sheet Effect on income statement • All leases excluding short term and non-material leases to be ~900 ~900 recognized on the balance sheet from 1.1.2019 • Leases
Slide 20: Board proposes first dividend for Wallenius Wilhelmsen since the merger
Business update Financial Performance Market Outlook Outlook and Q&A Board proposes first dividend for Wallenius Wilhelmsen since the merger Dividend for 2018 - The Board has decided to propose an ordinary dividend of 6 cents per share to the Annual General Meeting in April 2019 - The board also pro
Slide 21: Market outlook
Market outlook by Craig Jasienski 21
Slide 22: Soft auto sales in the quarter, down 4.6% y-o-y
Business update Financial Performance Market Outlook Outlook and Q&A Soft auto sales in the quarter, down 4.6% y-o-y driven by slow sales in China and Europe Global light vehicle (LV) sales per quarter1) Regional LV sales per month1,2) Units Growth (y-o-y) -4.6% +6.4% USA (+0.6% YTD): +1% 24.9 0% -1
Slide 23: Auto exports strengthened 2.5% y-o-y in the fourth quarter
Business update Financial Performance Market Outlook Outlook and Q&A Auto exports strengthened 2.5% y-o-y in the fourth quarter Global LV export per quarter Regional LV import per quarter Units Growth (y-o-y) +7.4% +2.5% +3.6% North America (+2.8% YTD): +5.1% Imports increased 0.2% in the quarter (y
Slide 24: Market uncertainty has increased although auto analysts remain positive about medium-term growth
Business update Financial Performance Market Outlook Outlook and Q&A Market uncertainty has increased although auto analysts remain positive about medium-term growth prospects Global LV forecasts Units and growth (y-o-y) Global LV sales Several factors are fuelling uncertainty in the short and mediu
Slide 25: High & heavy trade remained solid, but momentum keeps softening
Business update Financial Performance Market Outlook Outlook and Q&A High & heavy trade remained solid, but momentum keeps softening Global construction and rolling mining equipment exports Global agriculture equipment exports Quantity L12M Growth L3M y-o-y % Quantity L12M Growth L3M y-o-y % 60k 40%
Slide 26: Further reductions in the order book
Business update Financial Performance Market Outlook Outlook and Q&A Further reductions in the order book Car Carrier Fleet Orderbook Fleet and demand growth # vessels equal or above 4000 CEU Percent 16 11 Growth y-o-y 4 3 2 1 4 0 2018 2019 2020 2021 1 Demand growth Net fleet growth Order book 2019
Slide 27: Outlook and Q&A
Outlook and Q&A by Craig Jasienski
Slide 28: Outlook
Business update Financial Performance Market Outlook Summary and Q&A Outlook Increased uncertainty around the volume outlook due to slightly softer macro picture Market rates remain at a low level, but tonnage balance gradually improving Lower bunker prices expected to support profitability in the n
Slide 29: Thank you!
W Wallen ius Wilhelmsen Thank you!