Eimskipafelag Islands Hf. · OMXICE:EIM
Eimskipafelag Islands Hf — FY2019 Earnings Presentation
33 slides from Eimskipafelag Islands Hf's earnings presentation, February 2020
Slide 1: Presentation of 2019 and Q4 Results
PRESENTATION OF 2019 AND Q4 RESULTS Vilhelm Már Þorsteinsson, CEO
Slide 2: This is Eimskip
THIS IS EIMSKIP Eimskip is a leading transportation company in the North Atlantic with connections to international markets and is specialized in worldwide freight forwarding services, with the vision of providing excellence in transportation solutions and services ABOUT KEY FIGURES 2019 GEOGRAPHICA
Slide 3: Key Highlights for 2019
KEY HIGHLIGHTS FOR 2019 ▪ Cool down of Icelandic economy and reduced catch around Iceland affecting volume ▪ Continued growth in Trans-Atlantic services and improved results in Norway ▪ Improved results in forwarding despite lower volumes ▪ Streamlining and integration projects resulting in lower co
Slide 4: Eventful Year
EVENTFUL YEAR New simpler and more reliable container sailing Increased transparency Sale of five vessels, system implemented – lowering fixed cost and flow of information to for total EUR investors 14.2m Offices/locations reduced from Focus on streamlining measures Improved automation by applying r
Slide 5: Corporate Social Responsibility
CORPORATE SOCIAL RESPONSIBILITY Leading in environmental matters for 29 years • Eimskip became one of the first companies in Iceland to establish an environmental policy 29 years ago • An ambitious goal to reduce carbon footprint by 40% from 2015 to 2030 • In line with Eimskip’s aim to recycle and m
Slide 6: Simplified Organizational Structure
SIMPLIFIED ORGANIZATIONAL STRUCTURE Björn Einarsson new Executive Vice President of Iceland Sales and Business management MAIN CHANGES AND OBJECTIVES • An integration of the Liner division Sales & Services and the freight forwarder TVG-Zimsen • The objective is to; • Simplify and integrate Eimskip’s
Slide 7: Operating Activities
OPERATING OPERATING ACTIVITIES ACTIVITIES
Slide 8: Volume Development in Liner Services
VOLUME DEVELOPMENT IN LINER SERVICES Container liner volume down 3.3% YoY due to cooldown of Icelandic economy 2019 • Iceland import volume down by 10.7% in line with Statistics Iceland total import numbers • Capacity reduction in Norway resulted in lower volumes but improved results • Export from I
Slide 9: Geographical Split of Liner Volume
GEOGRAPHICAL SPLIT OF LINER VOLUME Increased share of Faroe Island and Trans-Atlantic VOLUME SPLIT 9
Slide 10: Volume Flow of Container Liner (1.8 Million Tons)
VOLUME FLOW OF CONTAINER LINER (1.8 MILLION TONS) Cargo delivered to and from Iceland and Faroe Islands all around the world IS/FO → 4% Scandinavia IS/FO → IS/FO → 4% Europe 33% Asia Short Sea 1% US/CA Scandinavia → IS/FO → IS/FO 15% Asia → 5% IS/FO 2% N. America Europe → Short Sea N. America → IS/F
Slide 11: Volume Development in Forwarding Services
VOLUME DEVELOPMENT IN FORWARDING SERVICES Improved result YoY despite lower volume 2019 • Reefer forwarding volume down 3.9% however results improved YoY • Volume drop of 14.7% in dry forwarding due to discontinued Q4 service in China with limited effect on results 9M Q4 • Forwarding volume down 3.9
Slide 12: Main Outbound Flow of Forwarding Volume
MAIN OUTBOUND FLOW OF FORWARDING VOLUME Three out of four containers is reefer cargo Europe → Europe → 2,1% Intra Asia 16,4% N-America Europe 13,8% Asia → Europe 28,1% Asia → N-America 5,2% N-America → Europe → Europe 3,1% Africa and 13,2% Europe → Middle East S-America 0,2% Asia → S-America 0,6% In
Slide 13: Vessel Newbuilding and Royal Arctic Line Co-operation
VESSEL NEWBUILDING AND ROYAL ARCTIC LINE CO-OPERATION COVID-19 affecting the project and causing further delay NEW BUILDINGS AND CO-OPERATION WITH ROYAL ARCTIC LINE • Dettifoss ▪ The shipyard is working on the vessel ▪ Uncertainty regarding the sea-trial due to the COVID-19 ▪ Estimated delivery to t
Slide 14: Financial Results
FINANCIAL RESULTS FINANCIAL FINANCIAL RESULTS RESULTS 14
Slide 15: Income Statement 2019
INCOME STATEMENT 2019 Operational improvements offset by volume decrease in container liner IFRS 16 2019 • Revenue decrease of EUR 9.6 million or EUR thousand 2019 Impact Adjust. 2018 Change % 1.4% Revenue 679,594 679,594 689,154 (9,560) (1.4%) • Salaries and related expenses decrease by EUR 5.9 mil
Slide 16: EBITDA Bridge 2019
EBITDA BRIDGE 2019 Operational improvements and streamlining offset by negative volume development in Container liner system • Various streamlining measures delivered positively • Operational streamlining of Norway • Improvements in freight forwarding operation • Organizational changes and integrati
Slide 17: EBITDA Bridge 2019
EBITDA BRIDGE 2019 Operational improvements and streamlining offset by negative volume development in Container liner system Further analyzed on next slide 17
Slide 18: Decrease in EBITDA YoY in Container Liner
DECREASE IN EBITDA YOY IN CONTAINER LINER Affected by adverse development in external environment BREAKDOWN OF YOY CHANGE IN CONTAINER LINER CONTRIBUTING FACTORS • Import to Iceland is the main driver of lower volume and reduced EBITDA in container liner • Export from Iceland mainly affected at end
Slide 19: Results by Business Segments for 2019 and Q4
RESULTS BY BUSINESS SEGMENTS FOR 2019 AND Q4 Improved forwarding operation offset by decline in Iceland liner IFRS 16 2019 EUR thousand 2019 2018 Change % Impact Adjust. Liner Services: Revenue 432.665 432.665 449.236 (16.571) (3,7%) Expenses 392.996 6.356 399.352 414.244 (14.892) (3,6%) EBITDA 39.6
Slide 20: Balance Sheet
BALANCE SHEET Balance sheet and equity ratio affected by new accounting standard IFRS 16 EUR thousand 31.12.2019 31.12.2018 Change % • Decrease in fixed assets mainly due to reclassification of vessels held for sale Non-current assets 355,712 335,172 20,540 6.1% • Total assets and liabilities mainly
Slide 21: Development in CAPEX
DEVELOPMENT IN CAPEX Vessel investments originally planned in 2019 delayed to 2020 • Maintenance CAPEX in 2019 at a different level than previous years and in line with budget • EUR 16.3 million compared to EUR 37.1 million in 2018 • Maintenance CAPEX items mostly relate to renewal of containers, tr
Slide 22: Cash Flow in 2019
CASH FLOW IN 2019 Substantial increase in cashflow before debt service continues • Management has had increased focus Million EUR 2019 2018 on cash generation which has improved year on year EBITDA 60.5 49.2 • Positive development in working capital Working capital changes & EBITDA adjustments (1.3)
Slide 23: Dividend and Share Capital Reduction Proposals to the AGM
DIVIDEND AND SHARE CAPITAL REDUCTION PROPOSALS TO THE AGM Moving towards target capital structure DIVIDEND POLICY TARGET CAPITAL STRUCTURE • The policy of Eimskip is to pay annual dividend that • Target equity ratio is ~40% equals an amount in the range of 10-65% of net profit after taxes • Target l
Slide 24: EBITDA Guidance
EBITDA GUIDANCE EBITDA in the range of EUR 51-58 million excluding IFRS 16 • General operating activities • Continued focus on operating cost and improving current business platform • Benefitting from recent streamlining measures • Cost related to FTE reduction will be expensed in Q1 • Successful im
Slide 25: Summary
SUMMARY 1 Cooldown of the Icelandic economy and lower catch affecting Iceland volume 2 Improved operational results of freight forwarding and in Norway Focus on operational efficiency and streamlining 3 measures compensating for decreased results of container liner 4 Delivery of new vessels and coop
Slide 26: Thank You
THANK YOU que
Slide 27: Appendix I
APPENDIX | que
Slide 28: Geographical Split of Revenue
GEOGRAPHICAL SPLIT OF REVENUE Iceland affected by lower import volume REVENUE SPLIT 15
Slide 29: China Forwarders Freight Index
CHINA FORWARDERS FREIGHT INDEX Average prices decreased by 6% between Q4 2018 and Q4 2019 -6% 11
Slide 30: Income Statement Q4
INCOME STATEMENT Q4 Lower volume in Iceland import and export affected Q4 results IFRS 16 Q4 2019 • EBITDA down EUR 1.5 million due to EUR thousand Q4 2019 Impact Adjust. Q4 2018 Change % considerable decrease in volume in last weeks of the year Revenue 175,549 175,549 178,827 (3,278) (1.8%) • Catch
Slide 31: EBITDA Bridge Q4
EBITDA BRIDGE Q4 Lower volume in Iceland import and export affected Q4 results • EBITDA affected by decreased volume in container liner • Mainly import and export to and from Iceland • Lower admin and operating cost positively compensate for decreased results of container liner 31
Slide 32: Disclaimer
DISCLAIMER Information contained in this presentation is based on sources that Eimskipafélag Íslands hf. (“Eimskip“ or the ”Company“) considers reliable at each time. Its accuracy or completeness can however not be guaranteed. Copyright of information contained in this presentation is owned by Eimsk
Slide 33: Slide 33
Eimskipafélag Íslands hf. — FY2019 Earnings Presentation on 6ix