Q1 Presentation May 10 th 2017 Craig Jasienski (President & CEO) - - PowerPoint PPT Presentation

Q1 Presentation

May 10th 2017

Craig Jasienski (President & CEO) Rebekka Glasser Herlofsen (CFO)

Today’s Presenters

2

Craig Jasienski President & CEO

• Number of years in industry: >30 years
• Born: 1969
• Key Experience:

– CEO, Eukor Car Carriers – CEO, United European Car Carriers (UECC) – Various leadership positions in WWL AS

Rebekka Glasser Herlofsen CFO

• Number of years in industry: >20 years
• Born: 1970
• Key Experience:

– CFO, The Torvald Klaveness Group – Director, Business Development, Bergesen d.y. ASA – Board Member, Statoil ASA & DNVGL – Chair of the Board, Cermaq

Agenda

3

Financial Performance Market and Business Outlook Business Update Summary and Q&A

BUSINESS UPDATE

by Craig Jasienski

4

Business update Q1 at a glance…

5

Business Update Financial Performance Market and Business Outlook Summary and Q&A

Total fleet increased to 128 vessels, with one delivery in Q1 Continued positive developments for the landbased segment Volume and cargo mix shows positive development Main trades show positive development out of Asia Merger moving ahead as per plan

WWL ASA lis listed on Oslo lo Børs April il 5th

th 2017

6

• Merger received final regulatory approval on 1 April, and

WWL ASA started trading on Oslo Stock Exchange April 5th

• Organizational restructuring well underway, target to have

new organisation fully established before summer

• New structure will allow up towards USD 100 million in

cost synergies and provide revenue growth opportunities with full effect from 2019

• Free float market cap of more than USD 0.5 billion,

representing more than 70% increase

Business Update Financial Performance Market and Business Outlook Summary and Q&A

A new and more efficient structure in place…

7

Business Update Financial Performance Market and Business Outlook Summary and Q&A

Wilh. Wilhelmsen Holding ASA

Wallenius Wilhelmsen Logistics EUKOR ARC

WW ASA Wallenius

50% 50% 73%

Soya Group Wallenius’ fleet

100% 40% 40% 50% 50%

WW ASA’s fleet

100% 100% 27%

Public minority

38% 38%

Wilh. Wilhelmsen Holding ASA Public minority

24%

WWL ASA Wallenius

From a structure of jointly controlled entities... ...to an integrated and more efficient WWL structure

HMG

20%

Ocean1 Landbased

Integrated Structure: from 5 to 1 Executive Management Team and organization → stronger co-operation, speed up decision-making and significant GSA synergies From 3 stand-alone operating companies to 1 integrated structure → increase fleet utilization and flexibility Management Team: all entities structured under WWL ASA → increase transparency, both internally and externally

  

1) Hyundai Motor Group will continue to own 20% of EUKOR Note: ARC retains a separate and independent management structure

Strong Top Management Team wit ith average +20 years exp xperience

8

Business Update Financial Performance Market and Business Outlook Summary and Q&A

WWL ASA Craig Jasienski President & CEO Rebekka Glasser Herlofsen CFO Jan Dahm-Simonsen1 Organizational development & HR Christer Nygren Business Planning & Marine Ari Marjamaa Business Transformation & IT

WWL ASA Senior Management Team

Erik Noeklebye CEO Mike Hynekamp COO Ray Fitzgerald COO EUKOR WWL Ocean WWL Landbased

1) Appointed April 2017

Volume and cargo mix ix shows positive develo lopment

9

Co Comments

• Ocean transported volumes down 2% q-o-q

mainly due to seasonality, but increased 3% y-o-y, primarily driven by:

• Increased volumes exported from Asia to both

Europe and South America

• Export from Asia to North Americas declined
• Increased import to Oceania from Europe
• Cargo mix
• Improvement in cargo mix from 21% to 23% HH

(High & Heavy) share of total volumes q-o-q

• Stable development in cargo mix y-o-y

Volu

• lume and

and Car Cargo

• Mix

Mix de develo lopment

Million CBM and %

Business Update Financial Performance Market and Business Outlook Summary and Q&A 5 10 15 20 25 30 35 20 8 18 16 14 12 10 6 4 2 22 25% Million CBM Q1’17 15.9 Q4’16 Q1’15 18.2 Q4’14 19.6 Q1’16 15.5 Q2’16 16.7

• 2%

3% % 20% 16.2 Q3’16 15.2 Q3’14 18.7 Q2’14 20.5 Q4’15 18.3 Q3’15 23% 23% 25% 22% 24% 24% 24% 24% 24% 21% 18.0 Q2’15 19.4 HH share of volumes Volume

WWL trade routes EUKOR trade routes ARC trade routes

10

Business Update Financial Performance Market and Business Outlook Summary and Q&A

Positive development in in exp xport from Asia ia to Europe and NA q-o-q

Atlantic Shuttle

2.8 3.0 2.9 Q4 ’16 Q1 ’16 1% Q1 ’17

• 3%

EU/NA – Oceania1)

Q1 ’16 1.0

• 8%

Q4 ’16 Q1 ’17 1.2 8% 1.1

EU - ASIA

• 5%

2.8

• 5%

Q1 ’17 2.9 Q1 ’16 2.9 Q4 ’16

Asia - EU

2.6 Q4 ’16 Q1 ’17 3.0 6% 14% 2.8 Q1 ’16

Asia - NA

3.2 14% Q1 ’17

• 8%

3.5 Q4 ’16 Q1 ’16 2.8

Asia - SAWC

0.8 Q1 ’16 Q4 ’16 1.1

• 9%

18% 1.0 Q1 ’17

Note: All numbers given in million CBM per quarter 1) Including Cape sailings (South Africa)

Total fle leet is is 128 vessels ls, wit ith one deliv livery in in Q1

11

Fl Flee eet de develo lopment

CEU, # of vessels

Co Comments

• One Eukor vessel delivered 30th March
• No further CAPEX planned past five post

Panamax newbuildings with expected delivery between 2017 and 2019 (remaining CAPEX of USD ~200 million)

• Additional capacity need will be acquired in

the charter market

• WWL ASA strives to have fleet flexibility

through combination of owned, long- and short-term T/C tonnage

• Flexibility to redeliver 9 vessels by end of 2017

130 134 137 139 140 143 147 125 140 128 127 133 20 40 60 80 100 120 140 160 180 400 200 800 600 1,000 Q1’14 Q2’14 929 146 873 Q3’15 Q2’15 Q1’ 16 Q4’15 897 886 CEU ‘000 Q3’ 16 Q2’ 16 865 889 865 873 Q1’17 Q4’16 # of vessels Q4’14 924 934 Q3’14 900 917 Q1’15 913

Business Update Financial Performance Market and Business Outlook Summary and Q&A

• Continued strong performance for

technical services supported by stable volumes and high content value adding services for VSA

• Build-up of auto inventories in the US

during Q1 2017

• Terminals show stable performance in

line with overall ocean volumes, but pulled back by planned intermediate low volumes during start-up of MIRRAT in Australia, which is expected to come in with full effect from 2018

Contin inued positiv ive develo lopments for the la landbased portfoli lio

12

Landbased segment business update

Business Update Financial Performance Market and Business Outlook Summary and Q&A

13

Financial Performance

by Rebekka Glasser Herlofsen

WWASA – Profit & Loss

14

WWAS ASA A Profi

• fit &

& Los Loss1

USD million

• Total operating income adjusted for non

recurring items and “Treasure ASA” slightly down q-o-q and slightly up y-o-y

• EBITDA adjusted for non recurring items and

“Treasure ASA” declined 12% q-o-q and 2% y-

• -y mainly driven by weaker performance in

the ocean segment

• Net financial expenses impacted by market

movements in USD interest rates and appreciation of USD vs our major currencies

Business Update Financial Performance Market and Business Outlook Summary and Q&A

1) Reported figures (non adjusted) 2)

• Incl. minority interests

2017 Q1 2016 Q4 2016 Q1 FY 2016 Operating income 439 450 432 1,751 Gain on sale of assets 9 80 455 Share of profits from JV's and associates 13 13 Total income 448 450 525 2,219 EBITDA 79 43 161 728 Depreciation and impairments (38) (38) (35) (148) EBIT 41 4 126 580 Financial income/(expense) (11) 0 (15) (37) Profit/(loss) before tax 30 4 111 543 1 1 1 Net profit 2) 26 (21) 104 500 Earnings per share (USD) 0.12 -0.09 0.47 2.27

Co Comments

WWASA – Ocean segment

15

Tot

• tal inc

ncome and and EBIT EBITDA oce

• cean segm

egment1

USD million

Co Comments

Business Update Financial Performance Market and Business Outlook Summary and Q&A

• Ocean income adjusted for non recurring

items declined 3% q-o-q, but stable y-o-y

• EBITDA adjusted for non recurring items

declined 15% and 5% y-o-y respectively (USD 9 million gain on sale of vessel to group company in Q1 ’17 as non recurring)

• Ocean transported volumes fell 2% q-o-q, but

increased 3% y-o-y

• Earnings negatively impacted by increased

bunker costs due to time lag in BAF clauses

• Continued pressure on ocean rates

Total income EBITDA

1) Adjusted for non recurring items

365 337 372 357

• 3%
• 1%

Q1’17 354 Q2’16 Q1’16

• 9

Q4’16 Q3’16

• 9

31 61 Q2’16 73 62 Q4’16 73 Q1’16 65 Q1’17

• 15%
• 5%

Q3’16 4 2 Non recurring items

WWASA – Landbased segment

16

Tot

• tal inc

ncome and and EBIT EBITDA lan andbased seg egment1

USD million

Co Comments

Business Update Financial Performance Market and Business Outlook Summary and Q&A

• Landbased income adjusted for non recurring

items and “Treasure ASA” was stable q-o-q, but increased 14% y-o-y

• EBITDA adjusted for non recurring items and

“Treasure ASA” stable q-o-q , but increased with 32% y-o-y

• Continued strong performance for technical

services supported by stable volumes and high content value adding services for VSA

• Terminals show stable performance in line with
• verall ocean volumes, but pulled back by

planned intermediate low volumes during start- up of MIRRAT in Australia

1) Adjusted for non recurring items and “Treasure ASA”

175

• 93

93 92 89 88 +1% Q1’17 +14% Q4’16 Q2’16 Q3’16 82 Q1’16 102

• 93

11 11 11 Q2’16 9 Q1’16 11 Q3’16 2 +1% +32% Q1’17 Q4’16 9 Non recurring items

Total income EBITDA

ASSETS EQUITY & LIABILITIES

WWL ASA pro-forma bala lance sheet year-end 2016

17

Una naudit ited Pro-for

• rma Bala

Balance Sh Shee eet WWL L AS ASA A IFR FRS, S, 20161

USD billion

Co Comments

• Net interest bearing debt per 31.12.2016 of

~3.1bn USD, of which cash and cash equivalents and financial investments of ~0.7bn USD

• Opening balance for WWL ASA will be

reported as part of Q2 reporting where fair value of assets and liabilities will be recognized at the date of the merger (except for 100% owned WW ASA entities)

• USD ~310M in provisions remain2 to cover

potential extraordinary costs in jurisdictions with ongoing anti-trust investigations

Business Update Financial Performance Market and Business Outlook Summary and Q&A

1. Overview sets out the unaudited pro forma balance sheet information for WWL ASA as of 31th December 2016 2. Provisions made are based on detailed bottom-up assessment in all operating entities (WW ASA provision increased with 31 MUSD and OW provisions taken in full)

Non current assets 1.3 7.3 Current assets 6.1 0.9 Equity Non current liabilities 4.1 Current liabilities 2.3 7.3

WWL ASA debt overview year-end 2016

18

WWL L AS ASA A gr grou

• up interest be

bearin ing g deb debt 20162)

2)

USD billion

Co Comments

• Bank loans are the “base funding” of the WWL

ASA fleet

• Wilhelmsen Lines AS, Wallenius Lines AB or the

respective ship-owning company are the borrowers with no parent (WWL ASA) guarantee

• Investments and operations funded from

several capital sources, including the commercial bank market (incl. export credit agencies), through financial lease structures and from the Norwegian bond market

Business Update Financial Performance Market and Business Outlook Summary and Q&A

3.9 Net Debt 3.1 Cash and Cash Equivalents1 Total Debt Bonds Financial Lease Commercial Banks

1. Includes financial investments 2. Per 31.12.2016

New div ivid idend polic licy was approved by y the Board May 9th

th

19

DIVIDEND POLICY “Wallenius Wilhelmsen Logistics ASA’s (“WWL ASA”) objective is to provide shareholders with a competitive return over time through a combination of rising value for the WWL ASA share and payment of dividend to the shareholders. The Board targets a dividend which over time shall constitute between 30 and 50% of the company’s profit after tax. When deciding the size of the dividend, the Board will consider future capital requirements to ensure the implementation of its growth strategy as well as the need to ensure that the Group’s financial standing remains warrantable at all times. Dividends will be declared in USD and paid out semi-annually” FINANCIAL TARGETS

Key ratios Target

Equity ratio >35% Return on capital employed («ROCE») >8%

Business Update Financial Performance Market and Business Outlook Summary and Q&A

WWL ASA – What can you exp xpect for Q2 reporting?

20

• Opening balances as per April 5th 2017 and

Balance sheet as per Q2 2017

• Comparable pro-forma P&L for Q2 2016
• Ongoing process to review additional

information elements to be shared, whether at Quarterly presentations or Capital Markets Day

Business Update Financial Performance Market and Business Outlook Summary and Q&A

INVESTOR RELATIONS POLICY “Wallenius Wilhelmsen Logistics ASA (“WWL ASA”) strives to be available and to pursue a professional, transparent and active dialogue with investors and

• analysts. WWL ASA is committed to disclose and share

relevant information in a timely, reliable and accurate manner with all financial stakeholders in accordance with relevant legal requirements and sound corporate governance principles. The objective is to ensure equal treatment of all stakeholders and fair valuation of the WWL ASA share”

21

Market and Business Outlook

by Craig Jasienski

Total lig light vehic icle le sale les in in the fir irst quarter in increased by y 4% y-o-y

22

Business Update Financial Performance Market and Business Outlook Summary and Q&A

Global auto sales development forecast

Million units, 2016-2021E

2020E Deepsea

84,5 16,2

2019E 2021E

1,8%

Domestic

77,5

2018E 2017E

92,1 14,6

2016

Global auto sales per main sales region1

CAGR 2016-2021, CAGR Q1’17 vs Q1’16

Source: IHS 1) Size of circle indicates auto sales Q1 2017 2.1%

CAGR

1.7%

• 2%
• 1%

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

• 5%

0% 5% 10% 15% 20%

CAGR ’16-21

East Europe West Europe Central Europe Japan/Korea Greater China Middle East & Africa

Q1’17 vs Q1’16

South America ASEAN NAFTA India & Pakistan Oceania

ME AF EUR APAC AM

Positive outlook for all ll main in Hig igh & Heavy vy segments

23

Business Update Financial Performance Market and Business Outlook Summary and Q&A

Improving outlook for mining shipments

000s, 2005-2020E1

1) Source: Parker Bay (Mining) 2) Source: IHS Construction 3) CEMA (AG machinery association Europe) Business Barometer. Index = sum of 1) evaluation of the current business situation & 2) turnover expectation, scale from -100 to +100

4.5 5.5 3.5 2.5 3.0 5.0 6.0 4.0 1.5 2.0 1.0 0.5 0.0 ’09 ’10 ’08 2.9 ’13 ’16 ’14 ’15 3.2 ’12 ’11 2.0 5.8 2.2 2.0 ’06 ’07 3.7 2.9 3.6 3.2 4.3 ’05 3.1 ’17E 2.4 ’19E 5.4 ’20E 4.2 3.7 ’18E

Continued solid growth for construction

2007-2020E2

Down-cycle about to turn for Agriculture

CEMA business barometer3

Percentage growth (y/y)

• The global demand for mining equipment remained

low in the first quarter but the sentiment is improving backed by a further increase in commodity prices

• Global construction markets continued their overall

positive development into 2017

• Particularly Asia, Middle East and Africa see strong

growth going forward (>4% per year)

• Global demand for agriculture equipment continued

the weak trend in the first quarter, but early indications that the down-cycle in Agriculture might be about to turn (particularly in Europe)

Q3’17 Q2’11

Source: SeaWeb and Llouds List Intelligence Unit

Moderate net fle leet growth forecasted going forw rward

24

Business Update Financial Performance Market and Business Outlook Summary and Q&A

4% of fleet are recycling candidates…

Fleet by year of build, 1000 CEU

..contributing to moderate net fleet growth

Forecasted net fleet growth, % p.a.

• 4%
• 2%

0% 2% 4% 6% 8% 10% 12% 14% 16% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Net fleet growth, % 41 vessels >25 years old 4% of fleet CEU 45-50 firm vessels 8-9% of fleet CEU

Board vie iew

25

«In mature markets, auto sales are expected to be relatively flat while the outlook for the emerging markets are mixed. Overall, the expectations are slightly positive. Global construction, mining and agriculture equipment sales are forecasted to improve slightly from low levels.»

Bus Busin iness Ou Outlo look Mark arket ou

• utl

tlook

«The board expects that the merger will have positive impact on the group profitability. While the positive effects in 2017 to a large degree will be offset by restructuring costs, the synergies will be substantial in 2018 and have full effect in 2019 (estimated up towards USD 100 million on annual basis). However, continued rate pressure combined with some overcapacity in the market will continue to put pressure on the ocean segment.»

Business Update Financial Performance Market and Business Outlook Summary and Q&A

26

Q&A

by Craig Jasienski and Rebekka Glasser Herlofsen

27

Thank you!