Dampskibsselskabet Norden A/s · OMXCOP:DNORD
Dampskibsselskabet Norden A/s — Q3 2022 Earnings Presentation
29 slides from Dampskibsselskabet Norden A/s's earnings presentation, Nov 3, 2022
Slide 1: Presentation of Third Quarter 2022 Results
PRESENTATION OF THIRD QUARTER 2022 RESULTS Copenhagen, Denmark, 3 November 2022
Slide 2: Agenda for Today
AGENDA FOR TODAY 01. Third quarter 2022 highlights 02. Business unit performance • Assets & Logistics • Freight Services & Trading 03. Market development & outlook 04. Guidance for 2022 and sum-up 2 PRESENTATION OF THIRD QUARTER 2022
Slide 3: Third Quarter 2022 Highlights
01. THIRD QUARTER 2022 HIGHLIGHTS 3 PRESENTATION OF THIRD QUARTER 2022
Slide 4: Third Quarter 2022 Highlights: Business Update
01. THIRD QUARTER 2022 HIGHLIGHTS BUSINESS UPDATE GROUP PROFIT LAST FIVE QUARTERS PROFIT FOR Q3 2022: USD 243 MILLION 250 243 • Assets & Logistics (Q3 2022: Profit of USD 53 million) 200 179 • Freight Services & Trading (Q3 2022: Profit of USD 190 million) USD million 150 123 117 100 BUSINESS HIGHLI
Slide 5: Maintained High Tanker Exposure
01. THIRD QUARTER 2022 HIGHLIGHTS MAINTAINED HIGH TANKER EXPOSURE Relative segment exposure – entire NORDEN business 90% 80% 70% Summary of group exposure (both business units) Segment risk use in % • Maintained high tanker exposure towards strong market 60% • Neutralised dry cargo exposure for 2023
Slide 6: Paying Out Most of Earnings (2020-2022)
01. THIRD QUARTER 2022 HIGHLIGHTS PAYING OUT MOST OF EARNINGS (2020-2022) • Over USD 650 million returned since 2020 (when including recently announced dividend and share buyback programme on 3 Nov) • Net share count reduced by 9% since 2020 Shareholder cash distributions since 2020 USD million 2022
Slide 7: Business Unit Performance
02. BUSINESS UNIT PERFORMANCE 7 PRESENTATION OF THIRD QUARTER 2022
Slide 8: Tanker Portfolio Driving Up Net Asset Value
02. ASSET & LOGISTICS TANKER PORTFOLIO DRIVING UP NET ASSET VALUE NAV per share (end Q3) PROFIT FOR Q3 2022: USD 53 MILLION 500 446 • Large NAV increase driven by rising tanker asset prices and period rates 450 400 377 • Strong dry cargo earnings and downside protection 350 - Profitable dry cargo co
Slide 9: Extensive Optionality in Portfolio
02. ASSET & LOGISTICS EXTENSIVE OPTIONALITY IN PORTFOLIO • ~66,000 extension option days in total, corresponding to ~181 full-year extension options • Extension options: 85 options in total (58 options on dry cargo vessels and 27 on tanker vessels) • Purchase options: 83 options in total (56 in dry
Slide 10: Record Margins in Strong Trading Environment
02. FREIGHT SERVICES & TRADING RECORD MARGINS IN STRONG TRADING ENVIRONMENT RESULT PER VESSEL DAY PROFIT FOR Q3 2022: USD 190 MILLION 3.500 3.346 3.000 2.500 • Delivering strong performance in weakening dry cargo market USD/day 2.000 - Using short position to benefit from decreasing freight rates -
Slide 11: Business Units Valuation
02. BUSINESS UNITS VALUATION ASSETS & LOGISTICS FREIGHT SERVICES & TRADING Asset trading and active portfolio management of Global freight services and trading in the dry owned and leased vessels. Investments in port cargo and product tanker markets logistics aimed at optimising supply chains NAV-ba
Slide 12: Market Development and Outlook
03. MARKET DEVELOPMENT AND OUTLOOK 12 PRESENTATION OF THIRD QUARTER 2022
Slide 13: Dry and Tanker Market in Q3 2022
03. MARKETS DRY AND TANKER MARKET IN Q3 2022 Further dry cargo market declines Significant and volatile product tanker market • Lower congestion with reduced COVID-19 pressure on supply chains • Regional volatility and longer voyage distances leading to soaring rates • Commodity volumes grew less th
Slide 14: Market Outlook in Dry Cargo
03. MARKETS MARKET OUTLOOK IN DRY CARGO Further downside for dry cargo markets Vessel supply growth remains low • Slowdown in world economy expected • Low orderbook will mitigate downturn • Less support from congestion and container spillover • Expected global fleet growth of 2-2.5% for 2022-23 • Lo
Slide 15: Market Outlook in Tanker
03. MARKETS MARKET OUTLOOK IN TANKER Strong base case Low fleet growth supporting asset prices and period rates • Market expected to remain strong in 2022 moving into 2023 • Historically low orderbook of 5% • Driven by longer distances and ongoing regional volatility • Limited yard capacity on MR ta
Slide 16: 2022 Guidance and Sum-up
04. 2022 GUIDANCE AND SUM-UP 16 PRESENTATION OF THIRD QUARTER 2022
Slide 17: 2022 Guidance
04. GUIDANCE 2022 GUIDANCE NORDEN guidance for FY 2022 profit for the year: USD 650-730 million • Product tanker: High exposure towards substantially increased product tanker rates • Dry cargo: Very strong short-term positioning towards a weakening dry cargo market, high long-term dry cargo cover at
Slide 18: Outstanding Third Quarter
04. FINAL WORDS OUTSTANDING THIRD QUARTER • Profit of USD 243 million – Significant quarter in both business units • Strong trading profits in Freight Services & Trading across both markets • Increasing BU NAV by DKK 69 per share – now at DKK 446 • Substantial dry cargo earnings through short positi
Slide 19: Disclaimer: Forward Looking Statements
04. FINAL WORDS – DISCLAIMER FORWARD LOOKING STATEMENTS This presentation contains certain forward-looking statements reflecting the management’s present judgment of future events and financial results. Statements relating to 2022 and subsequent years are subject to uncertainty, and NORDEN’s actual
Slide 20: Thank You for Your Attention
THANK YOU FOR YOUR ATTENTION Dampskibsselskabet NORDEN A/S 52, Strandvejen DK-2900 Hellerup Denmark Phone: +45 3315 0451 www.ds-norden.com Connect with us 20 PRESENTATION OF THIRD QUARTER 2022
Slide 21: Appendix - About NORDEN
APPENDIX - ABOUT NORDEN 21 PRESENTATION OF THIRD QUARTER 2022
Slide 22: Enabling Smarter Global Trade
ENABLING SMARTER GLOBAL TRADE 150 YEARS OF HONOURING OUR COMMITMENTS People & Data Our values Industry leader 376 6.4 ~450 0 Employees Billion datapoints Reliability Flexibility Empathy Ambition Operated vessels Net zero carbon emissions daily 94% chartered / 6% owned by 2050 22 PRESENTATION OF THIR
Slide 23: Market trends: Increased focus on asset-light freight services and logistics
02. NORDEN STRATEGY Market trends: Increased focus on asset-light freight services and logistics Major trends affecting shipping NORDEN strategy Customer centric freight services Market across all continents volatility Digitalisation Optionality upside on leased vessels Geopolitical Tradable assets
Slide 24: Organisational structure: A customer, trading and data-driven NORDEN
Organisational structure: A customer, trading and data-driven NORDEN ASSETS & LOGISTICS FREIGHT SERVICES AND TRADING Asset Management Logistics & Climate solutions Asset-Light Freight Services Dry cargo Product tanker Port logistics Decarbonisation Construction Foods & oils Energy Industrial vessels
Slide 25: NORDEN at a glance
NORDEN at a glance 2008: NORDEN moves into its new 1973: domicile Bryghuset. 2021: NORDEN celebrates 150 The first of 5 dry cargo vessels is years of sailing the seven seas. delivered from Japan, and NORDEN enters what today is 1871: 1923: the core business of the Company. 2013: Mads C. Holm NORDEN’
Slide 26: Five external factors have driven NORDEN's climate strategy
Five external factors have driven NORDEN’s climate strategy Investor demand • Investors seek out sustainable companies as being more Climate crisis successful • The world faces an urgent carbon problem • 3% of carbon emissions are from shipping New regulations • An ambition to stay ahead of environm
Slide 27: Climate commitments to help customers decarbonise supply chains
Via 5 climate commitments, our ambition is to help our customers decarbonise their supply chains Our ENVIRONMENTAL targets: 2021 2022 2022- 2025- Before 2050 2030 2050 Provide our Greener competitive Annual reduction in Only order vessels Net-zero customers with shipping solutions to CO2 emissions f
Slide 28: Diverse and inclusive culture: social targets
We strive to continuously ensure a diverse and inclusive culture Our SOCIAL targets: 2022 2022- 2025 Ongoing Ongoing 2025 Female share of Female shares of Female share of Zero fatalities**** Lost Time Injury employees: At least managers: At least shareholder-elected Frequency below 40% in 2022* 36%
Slide 29: Measures to prevent any form of corruption
We take firm measures to prevent any form of corruption Our GOVERNANCE targets: Ongoing Ongoing Zero tolerance towards All eligible employees to take and bribery and refusal of pass NORDEN’s anti-corruption facilitation payments training as well as our sanctions and trading restrictions training Par
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