Slide 1: Investor Presentation – Full Year Results 2015
Investor Presentation – Full Year Results 2015 23-24 March 2016 1
Slide 2: 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 3: Opening remarks
Opening remarks Our deliverables We made very good progress and delivered what we promised Our industry The market is tough, but there are some encouraging signs Our position Hapag-Lloyd is well positioned to be successful in the future Our track record Hapag-Lloyd achieved its ambitious ear
Slide 4: Hapag-Lloyd look back on 2015
Our deliverables Our industry Our position Our track record Hapag-Lloyd look back on 2015 Our objectives $ 2015 2016 March October 2015 2016 New CCO Inclusion (Thorsten in SDAX June 2015 Structural Haeser) February 2016 improvements Debt repricing 2 x wide-beam announced (interest ships acquired
Slide 5: Strategic highlights: We have achieved a lot in 2015
Our deliverables Our industry Our position Our track record Strategic highlights: We have achieved a lot in 2015… Our objectives Integration of CSAV1) completed in Q3 2015 CUATRO USD 400 m net synergies (run-rate) OCTAVE with USD 200 m result improvements OCTAVE OCTAVE 2 launched in Q4 2015
Slide 6: Financial highlights: …and delivered as promised
Our deliverables Our industry Our position Our track record Financial highlights: …and delivered as promised Our objectives Transport volume Freight rate Revenue 7.4 TEU m 1,225 USD/TEU USD 9,814 m 2014: 5.9 TEU m 2014: 1,427 USD/TEU 2014: USD 9,046 m +25.3% -14.2% +8.5% Transport expenses EBITDA Gr
Slide 7: Tough market – Q4 results unsustainable; freight rates expected to recover in 2016
Our deliverables Our industry Our position Tough market – Q4 results unsustainable Our track record Freight rates expected to recover in 2016 Our objectives CCFI composite index Carriers‘ operating margins Average carrier operating margins 7.6% 1,300 Hapag-Lloyd EBIT margin 1,250 1,200 5% 3.9% 3.8%
Slide 8: M&A and new alliances create more stability
Our deliverables Our industry Our position M&A and new alliances create more stability, but Our track record it will take some time before things settle down Our objectives Recent M&A activities Changing landscape in a fragmented market… 2M …including alliance dynamics + 2,880 2,677 G6 CKHYE Ocean T
Slide 9: Supply demand gap expected to decrease in 2016
Our deliverables Our industry Our position Our track record Supply demand gap expected to decrease in 2016 Our objectives Supply / demand development Net capacity growth Net capacity growth 18 Demand Supply 16.2% Postponements 16 2012 0.8 Scrapping 14 12 9.3% 2013 0.9 10 8.5% 8.3% 8 6.7% 6.1% 5.2% 5
Slide 10: Vessel sizes are reaching their economic maximum
Our deliverables Our industry Our position Vessel sizes are reaching their economic maximum, Our track record which will help reduce the orderbook going forward Our objectives Declining benefits of ever larger vessels Comments Economies of scale slow down with increasing vessel size 19,000 TEU s
Slide 11: Capacity measures being taken on multiple trades
Our deliverables Our industry Our position Capacity measures being taken on multiple trades, Our track record as response to supply demand imbalances Our objectives Asia – Europe [weekly capacity] Asia – North America [weekly capacity] 420 TTEU 2014 2015 460 TTEU 2014 2015 -9.0% 440 +4.9% 400 380 42
Slide 12: Step-change in results underlines our improved competitiveness
Our deliverables Our industry Our position Step-change in results underlines our improved Our track record competitiveness Our objectives Company H1 2015 EBIT [USD m] Company H2 2015 EBIT [USD m] Company FY 2015 EBIT [USD m] Maersk 1,266 10.1% CMA CGM 180 2.4% Maersk 1,431 6.0% CMA CGM 715 9.0% Maer
Slide 13: Well-balanced exposure to global trade with strong position in attractive markets
Our deliverables Our industry Our position Well-balanced exposure to global trade with strong Our track record position in attractive markets and niche businesses Our objectives Well-balanced global exposure Attractive market presence Strong niche businesses Transpacific Atlantic Far East Atlantic R
Slide 14: The right assets – We have a competitive fleet
Our deliverables Our industry Our position The right assets – We have a competitive fleet and Our track record the means to further invest where needed Our objectives Vessel fleet as of 31 December 2015 Owned1) Chartered4) Current Current fleet orderbook Fleet age [% of total capacity] Capacity [TEU
Slide 15: Our Way Forward – Further improvements from existing initiatives
Our deliverables Our industry Our position Our Way Forward – Further improvements expected Our track record from our existing initiatives Our objectives Tangible results in 2015 and further upside Strategic projects to enhance profitable growth Compete to Win Improvement of Qualitatively Close the r
Slide 16: OCTAVE 2 as additional optimization project
Our deliverables Our industry Our position OCTAVE 2 as additional optimization project – Our track record Further efficiency improvements targeted Our objectives OCTAVE 2 G6 TRANS- WEIGHT / STOWAGE ENHANCEMENT SHIPMENT UTILIZATION Explore potential further Improvement of Further improvement of
Slide 17: Hapag-Lloyd significantly increased its EBITDA to USD 922 m
Our deliverables Our industry Our position Hapag-Lloyd significantly increased its EBITDA Our track record to USD 922 m (margin: 9.4%) in full year 2015 Our objectives Operational KPIs Comments FY 2015 FY 2014 ∆/% ■ 2015 with full reflection of CSAV transaction Transport volume [TTEU] 7,401 5,907 +1
Slide 18: Transport volume increase due to CSAV integration – pressure on freight rates
Our deliverables Our industry Our position Transport volume increase due to CSAV integration – Our track record Strong pressure on freight rates esp. in H2 2015 Our objectives Transport volume [TTEU] Freight rate [USD/TEU] +25.3% 1,600 2013 2014 2015 +7.5% 1,500 7,401 5,496 5,907 1,400 1,300 1,200 -
Slide 19: 25.3% increase in transport volume driven by CSAV integration
Our deliverables Our industry Our position 25.3% increase in transport volume driven by CSAV Our track record integration – Balanced exposure to global trade Our objectives Transport volume [TTEU] 2013 2014 2015 Transport 7,401 5,496 5,907 volume +7.5% +25.3% +4.6% [TTEU] Growth 0.2% 2.3% 8.6% 7.5%
Slide 20: Freight rate dropped to 1,225 USD/TEU – bunker price decreased
Our deliverables Our industry Our position Freight rate dropped -202 USD/TEU to 1,225 USD/TEU – Our track record HLAG average bunker price decreased to 312 USD/t Our objectives Freight rate1) [USD/TEU] vs. bunker price2) [USD/t] 2013 2014 2015 Bunker cost / TEU as share 20.9% 19.3% 10.1% of freight
Slide 21: Hapag-Lloyd remains focused on unit cost reduction
Our deliverables Our industry Our position Our track record Hapag-Lloyd remains focused on unit cost reduction Our objectives Transport expenses per TEU [USD/TEU] -275 5 (-20.1%) Compete 1,363 -146 to Win Price 4 Consumption Close the Cost Gap -42 12 -92 3 Structural Improvements -6 1,089 2 -128 OCT
Slide 22: Optimization of capital structure and financial position
Our deliverables Our industry Our position Optimization of capital structure and financial position Our track record with further tangible savings in 2015 Our objectives Enhanced equity base [USDm] Improved leverage position [USDm] +8.5% EBITDA 517 131 922 +26.3% Net Debt/ 5,068 5,497 6.6x n.m. 3.9x
Slide 23: Hapag-Lloyd reduced its debt by USD 192 m in 2015
Our deliverables Our industry Our position Hapag-Lloyd reduced its debt by USD 192 m in 2015 Our track record and maintained an adequate liquidity reserve Our objectives Cash flow 2015 [USD m] Operating Investing Financing cash flow cash flow cash flow 635 -673 -201 -287 639 922 -831 1,121 -804 1,04
Slide 24: We expect a moderate increase in EBITDA for 2016
Our deliverables Our industry Our position Our track record We expect a moderate increase in EBITDA for 2016 Our objectives Hapag-Lloyd guidance for 2016 Market forecasts for 2016 Transport Global economic growth +3.4% Increasing slightly volume Increase in global trade +3.4% Bunker consumption Clea
Slide 25: Our objective is to assure our strong competitive position
Our deliverables Our industry Our position Our objective is to assure our strong competitive Our track record position as one of the top players in the industry Our objectives To deliver on our objectives we need to remain focused 2016 PLAN Deliver the planned benefits of the existing programs ALL
Slide 26: Summary remarks
Summary remarks Our deliverables We made very good progress and delivered what we promised Our industry The market is tough, but there are some encouraging signs Our position Hapag-Lloyd is well positioned to be successful in the future Our track record Hapag-Lloyd achieved its ambitious ear
Slide 27: Hapag-Lloyd
€€ Hapag-Lloyd
Slide 28: The industry stays highly correlated with global growth
The industry stays highly correlated with global growth – Short term outlook at lower end of mid term 3-5% range Container shipping volume and global GDP growth 2000 = Indexed to 100 2000 – 2008 2010 – 2014 2015 – 2017e GDP 2x 1x 1x multiplier 300 +3.7% +4.9% +3.5% 250 +1.0% +3.6% +3.4% +8.1% +3.1%
Slide 29: Current spot rates need to go up especially on Asia-Europe
Current spot rates need to go up especially on Asia-Europe Shanghai – Europe (SCFI) Shanghai – USA (SCFI) 2,500 6,000 USWC (USD/FEU) USEC (USD/FEU) HL Transpacific* NEurope (USD/TEU) Mediter. (USD/TEU) HL Far East* 5,000 2,000 4,000 1,500 3,000 1,000 2,000 1,659 500 1,000 205 761 0 195 0 Jan Apr Jul
Slide 30: Close the Cost Gap: Investments done throughout the cycle
Close the Cost Gap: Investments done throughout the cycle – Further investments to come Recent projects… … with more to come 10 x 13,200 TEU Investments in niche markets where and when needed Hamburg Delivered 2012 – 2014 Express Class Hapag-Lloyd has purchased Cost efficient growth Se
Slide 31: Compete to Win: optimize customer profiles and cargo mix
Compete to Win: Significant potential to further optimize customer profiles and cargo mix Improve profitability per customer (example) Improve cargo mix (example) Bubble size represents Increase share Decrease share Grow market volume in TEU Lane 5 Lane 3 Contribution Contribution Keep Lane 2 La
Slide 32: Benefits from a reduced bunker price and consumption
Benefits from a reduced bunker price and consumption Bunker price [Rotterdam; USD/mt] Bunker consumption [mt/slot; mt/TEU; k mt] -11% 1,200 4.09 1,029 MFO Bunker cons. 3.812) 1,000 922 MDO per slot1) 3.39 0.52 0.49 800 Bunker cons. 0.45 822 606 600 462 per TEU 602 408 400 572 2,860 2,924 3,351 340 M
Slide 33: Hapag-Lloyd with group profit of USD 126 m
Hapag-Lloyd with group profit of USD 126 m Income statement [USD m] Transport expenses [USD m] % FY 2015 FY 2014 % change FY 2015 FY 2014 change Revenue 9,814.4 9,045.8 8% Expenses for raw materials 1,185.3 1,810.2 -35% and supplies Other operating 215.0 155.2 39% Cost of purchased services 6,871.6
Slide 34: Hapag-Lloyd with equity ratio of 45.5%
Hapag-Lloyd with equity ratio of 45.5% Balance sheet [USD m] Financial position [USD m] GROUP NET ASSET POSITION GROUP NET ASSET POSITION 31.12.2015 30.09.2015 31.12.2014 31.12.2015 30.09.2015 31.12.2014 Assets Cash and cash equivalents 625.0. 542.8. 864.7. Non-current assets 10,363.7 10,442.8 10,09
Slide 35: Hapag-Lloyd was successfully listed on 6 Nov 2015
Hapag-Lloyd was successfully listed on 6 Nov 2015 Hapag-Lloyd executed IPO in Q4 2015 Basic data Stock trading (since 6-Nov) Frankfurt Stock Exchange 120 Stock exchange Hamburg Stock Exchange 100 Regulated market 80 Market segment (Prime Standard) 60 ISIN DE000HLAG475 40 6-Nov 6-Dec 6-Jan 6-Feb 6-Ma
Slide 36: Hapag-Lloyd has issued three bonds on debt capital markets
Hapag-Lloyd has issued three bonds on debt capital markets EUR Bond 2019 EUR Bond 2018 USD Bond 2017 Issuer Hapag-Lloyd AG Hapag-Lloyd AG Hapag-Lloyd AG Volume EUR 250 m EUR 400 m USD 125 m1) Minimum order 100,000 EUR 100,000 EUR 150,000 USD Issue date November 20, 2014 September 20, 2013 October 01
Slide 37: Hapag-Lloyd bonds continuously trade above par
Hapag-Lloyd bonds continuously trade above par Hapag-Lloyd bonds 110 101.9 101.8 100 101.3 90 Jan/14 May/14 Sep/14 Jan/15 May/15 Sep/15 Jan/16 HL USD 9.75% 2017 HL EUR 7.75% 2018 HL EUR 7.50% 2019 YTW Hapag-Lloyd bonds 9.75% 2017 7.75% 2018 7.50% 2019 Current Yield 7.4% 6.5% 6.7% Current Trading 101
Slide 38: Imbalances: Hapag-Lloyd outperforms the market
Imbalances: Hapag-Lloyd outperforms the market Number of full non-dominant leg containers Container Steering per 10 full dominant leg containers1) Dominant 10 Special Know-How/ IT leg Trans- 7 Advantageous customer pacific 5 portfolio Cost-efficient management of Trans- 7 equipment flows atlantic 6
Slide 39: Long-standing and diversified customer base of blue chip customers
Long-standing and diversified customer base of blue chip customers and a diversified base of goods transported Highly diversified customer base1) Strong relationship with blue chip customers 100% 31% Top 50 Customers (∑ = 36%) 22% 10% 9% 9% 18% TOP 10 TOP TOP TOP TOP > 500 Total Hapag-Lloyd has a hi
Slide 40: Henrik Schilling, Senior Director Investor Relations
Henrik Schilling Senior Director Investor Relations Tel +49 40 3001-2896 Fax +49 40 3001-72896 Henrik.Schilling@hlag.com http://ir.hapag-lloyd.com/websites/hapaglloyd/English/0/ir-home.html 40