Investor presentation Global LV sales expected to drop 12%, - - PowerPoint PPT Presentation

Investor presentation

April 2020

2

LV Sales, million units LV deep-sea volume, million units

COVID-19 status update Auto

IHS Markit assume 2020 global LV sales set at 78.8m for 2020, down 12% with downgrades across all major regions, and risk of further downgrade

LV Sales

IHS Markit assume deepsea volume to see decline from 14.9m in 2019 to 13.1m in 2020, equal to a drop of 12%, with risk of further downgrade

Deepsea trade

?

Temporary plant closures in all major regions e.g. Europe, NA, Korea and Japan, while Chinese

• perations appear to be recovering

Supply

Large uncertainty to how fast consumers will turn back to dealers, governmental stimulus such as tax brakes might contribute to rebound

Demand

IHS Markit Sales and Deepsea estimates 2020-2027

Global LV sales expected to drop 12%, downgrades across all major markets

Source: IHS Markit 17.2 18.0 19.0 98.6 8,1 24.3 2021 8,6 19.8 9,2 2020 2022 20.5 19.4 78.8 27.5 9,5 8,9 28.5 2024 7,6 9,9 27.5 26.1 19.6 20.7 20.7 29.5 2025 10,5 19.9 21.0 91.9 21.0 30.5 2026 11,0 20.1 2018 25.3 31.4 2027 8,3 19.5 20.3 2023 20.6 20.6 21.1 22.8 18.6 2019 18.8 93.7 89.7 83.8 88.3 94.3 96.2 100.6

• 4.2%
• 12.2%

+6.3% +5.4% +3.6% 1.1 2.5 1.1 2020 2.7 1.3 2.8 4.4 1.3 1.1 1.2 2.6 2022 4.4 4.8 1.1 1.3 1.3 2.9 3.3 4.7 1.4 1.3 4.7 3.2 2023 1.2 1.2 1.4 3.1 3.1 3.4 15.1 1.1 1.3 4.6 4.8 2024 1.2 1.5 1.3 3.3 1.3 16.5 2.6 2.8 2025 1.1 1.2 1.6 1.0 1.3 3.5 2.5 5.1 2026 3.3 1.2 1.6 2018 3.6 3.3 1.1 2.7 2027 2021 1.4 1.3 4.1 15.2 3.0 5.0 2019 14.9 13.1 13.9 14.5 15.7 15.9 16.3

• 1.0%
• 11.9%

+5.8% +3.3% S America ME/Africa Jp/Ko S Asia NA Europe G China

3

Construction Mining Agriculture

+17%

• 5%
• 8%

+2% 2020e Sales (YoY) 2018 2019 2021e

COVID-19 status update H&H

Mixed government responses, but H&H deemed «essential» in several key markets and exempt from shutdowns due to the coronavirus outbreak

Government policies

OEMs are withdrawing FY2020 guidance due to the uncertainty around the ultimate magnitude

• f COVID-19 on financial and operational results

Guidance withdrawals

?

Temporary plant closures in a number of affected regions e.g. Europe and Brazil, while Chinese

• perations appear to be recovering

Production suspension

Reduced capex spend and postponed investment decisions due to current global economic conditions and an uncertain outlook

Demand implications

Retail sales1,2 OEM sales estimates3

+21% +4%

• 7%

+4% 2021e 2020e 2018 Sales (YoY) 2019 +12%

• 1%
• 4%

+5% Sales (YoY) 2021e 2018 2020e 2019

• 15%
• 10%
• 5%

0% 5% 10% 01/19 05/19 03/19 07/19 09/19 11/19 01/20 Sales (YoY)

• 10%

0% 10% 20% 30% 01/19 07/19 03/19 05/19 09/19 11/19 01/20 Sales (YoY)

• 20%
• 10%

0% 10% 20% 03/19 05/19 01/19 07/19 09/19 11/19 01/20 Sales/Reg. (YoY)

1) Caterpillar | 3 month rolling retail sales (Units last 3 months y-o-y) 2) Tractor sales and registrations in key markets | US Large Tractors (2WD 100+HP & 4WD), Australia Large tractor (100+HP), Brazil (All), y (70KW+), UK (50+HP) 3) FactSet data and Analytics (30.03.20) | OEM Revenue Consensus Estimate (y-o-y). Construction: Volvo, Caterpillar, CNH, Komatsu, Hitachi, Terex. Mining: Sandvik, Caterpillar, , Epiroc. Agriculture: AGCO, CNH, Deere. Sales in construction/mining/agriculture equipment divisions only

4

Operations in Covid-19 epicentres are partially disrupted

Operational impact Overview of WalWil locations and status as of March 31st

▪ Adjusting trading patterns and schedules in response to fluctuation in demand in the

• cean business

▪ Terminals, though in many places congested, at this time remain open and

• perating

▪ Countries with strict lockdown rules, such as South Africa and India, forces closure of landbased sites ▪ Some sites in US and Mexico temporarily closed or disrupted due to little or no activity at some plants ▪ European sites remain open, but with some

• perational disruptions

▪ Other sites in Asia and Oceania are mostly

• pen, but with some disruptions, and some

closures

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Ocean segment drivers and preventive measures

Item Revenue Variable cost Fixed cost CAPEX Key characteristics Measures to adjust costs

▪ Auto contract duration typically 1-3 years, and 3-5 years for H&H ▪ Rates are fixed for the contract period, but no volume minimum ▪ Contracts representing 20% of revenue up for renewal in 2020 ▪ Approximately 70% of total costs are variable in ocean segment ▪ Variable costs consist of cargo, bunker and voyage expenses ▪ Approximately 30% of total costs are fixed in ocean segment ▪ Ship operating and charter expenses considered short term fixed, and will move in steps, dependent on number of vessels operated ▪ CAPEX primarily related to planned dry-dockings, including ballast water treatment systems installations ▪ Scrubber installation program for 16 vessels ▪ Two newbuildings expected in Q2 2020 and late 2020 ▪ Adjust speed, adjust sailing schedules and idling of vessels ▪ Tighter bunker inventory management ▪ Redelivery of chartered vessels: Average charter hire saved per day for redelivery candidates in range USD 18 000 – 20 000 ▪ Cold lay-up for 10 vessels (OPEX reduction per vessel per day in lay- up of USD 3000 – 4000) and defer drydocking ▪ Early recycling of up to four vessels, estimated positive cash impact

• f about USD 4 – 7 million per vessel

▪ Reduce capex to critical maintenance and dockings ▪ Cancellation of 4 scrubber installations, cash impact of USD 20m in total (of which USD 5 million was estimated for 2020)

6

Landbased and group drivers and preventive measures

Item Revenue Variable and fixed cost CAPEX Group fixed cost Other measures taken on group-wide level Key characteristics Measures to adjust costs

▪ Inland distribution and technical services typically depend on factory throughput, and terminals on ocean volumes ▪ The anti-cyclical storage business may experience higher volumes ▪ Approximately 75% of total costs are variable in landbased segment ▪ Approximately 25% of total costs are fixed in landbased segment ▪ Adjusting variable costs in line with customer activity and volumes ▪ Maintenance CAPEX related to equipment, sites and buildings ▪ Growth CAPEX related to expansions of existing sites and new site developments ▪ Reduce CAPEX to critical maintenance, delay growth CAPEX ▪ SG&A: Limit/ban travel and entertainment, pause/cancel projects, postpone/cancel salary increase ▪ Dividend: Dividend cancelled

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Limited capital expenditures going forward

Overview of main capital expenditures 2020 (USDm) Comments

▪ CAPEX reduced to a minimum, prioritizing safety and maintenance critical expenditures ▪ Landbased CAPEX estimated at ~USD 10m for rest

• f year mainly related to required maintenance

▪ Ocean CAPEX rest of year primarily related to:

• Drydocking and ballast-water treatment

systems estimated to ~USD 40m

• Scrubber installations estimated to about

USD 40m in 2020, for which we have committed financing of USD ~15m

• Two newbuildings remaining, with final

instalments amounting to ~USD 40m per

• vessel. Financing of ~USD 50m per vessel will

be drawn after delivery. Estimated delivery for the two newbuildings in May 2020 and around year-end 2020 10 170 20 40 50 20 40 50 15 40 15 40 Landbased

• 115

Ocean Group Total CAPEX Financing secured CAPEX net

• f funding

160 55

A B C D A B C D D C D D

Q2 Q3 Q4

8

Very little refinancing requirements near-term and a solid liquidity position

Liquidity position EoY 2019 (USDm) Debt maturity profile (USDm)

438 358 349 2021 90 52 47 2020 9 85 218 2022 1 137 1 190 70 2023-> Total 494 495 657 2 397 4 043 Total Installments (bank loans and leases) Balloons (bank loans and leases) Bonds Credit facilities (drawn) 398 775 377 Undrawn facilities Total Cash

A strong balance sheet coupled with distant debt maturities gives confidence in a global trough

9

Covenants are measured on business unit level rather than group level

Ocean

Minimum liquidity Current assets / current liabilities Loan to value clauses Fixed charge / interest coverage

Landbased

Net debt / EBITDA Equity ratio Minimum liquidity

Wallenius Wilhelmsen

Limitation on ability to pledge assets Unit / segment Typical covenants within the segment

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Preparing for post Covid-19 rebound

• 50%
• 40%
• 30%
• 20%
• 10%

0% 10% 20% 30% 40% 1,200 600 200 400 1,600 800 1,400 1,800 1,000 ’07 ’15 ’10 Shipments (1000 units) ’12 Growth y/y ’06 ’08 ’09 ’11 ’13 ’14 ’16 ’17 ’18

• 41%

+3.1% WW Ocean H&H shipments (CEU) EUKOR H&H shipments (CEU) Global growth y/y WW H&H growth y/y

• 40%
• 30%
• 20%
• 10%

0% 10% 20% 30% 40% 50% 00 500 00 00 Growth y/y ’12 hipments 000 units) ’07 ’08 ’09 ’10 ’14 ’11 ’13 ’15 ’16 ’17 ’18

• 38%

+0.4% WW Ocean LV growth y/y WW Ocean LV shipments Global growth y/y

H&H shipments in WW Ocean2 Auto shipments in WW Ocean1 RoRo shipping saw a significant rebound in the aftermath of the 2008/2009 financial crisis

ce: 1) IHS Markit | World (major exporters) LV Deepsea exports (Value > 8 kUSD). 2) IHS Markit | World (major exporters) construction & rolling mining equipment and agriculture equipment exports (Avg. pment value >20 kUSD). WW H&H shipments do not include Commercial vehicles such as Buses & Trucks

Q&A