Wilh. Wilhelmsen ASA Third quarter 2015 Wilh. Wilhelmsen ASA /// - - PowerPoint PPT Presentation

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Wilh. Wilhelmsen ASA Third quarter 2015 Wilh. Wilhelmsen ASA /// - - PowerPoint PPT Presentation

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> Wilh. Wilhelmsen ASA Third quarter 2015 Wilh. Wilhelmsen ASA /// 11 November 2015 Jan Eyvin Wang, President and CEO > Disclaimer This presentation contains forward-looking expectations which are subject to risk and uncertainties

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  • Wilh. Wilhelmsen ASA

Third quarter 2015

>

  • Wilh. Wilhelmsen ASA

/// 11 November 2015

Jan Eyvin Wang, President and CEO

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> Disclaimer

This presentation contains forward-looking expectations which are subject to risk and uncertainties related to economic and market conditions in relevant markets, oil prices, currency exchange fluctuations etc.

  • Wilh. Wilhelmsen ASA group undertake no liability and make no representation or

warranty for the information and expectations given in the presentation.

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>

  • Investigation of the global car carrying industry started in September 2012

in several jurisdictions related to incidents prior to September 2012

  • WWL and EUKOR have cooperated and are cooperating with respective
  • authorities. These processes are confidential.
  • Japanese and South African authorities have completed their

investigations

– WWL were fined USD 34 million in Japan and USD 8 million in South Africa (WWASA share USD 16.5 million and USD 4 million respectively)

  • Final outcome of the investigations is uncertain and will take time

– Some further clarifications expected in Q4 2015 and 2016

  • The USD 200 million provision represents WWASA’s share of the

exposure related to the ongoing investigations

Anti-trust investigation

WWASA makes USD 200 million provision in the third quarter

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22 14 20 18 16 12 2 4 6 8 10

  • 7%
  • 3%

Q2 15 Q1 15 Q4 14 Q3 14 Q4 12 Q3 12 Q1 10 Q2 11 Q1 11 Q4 10 Q1 12 Q2 10 Q3 10 Q3 11 Q4 11 Q2 12 Q2 14 Q1 14 Q4 13 Q3 13 Q2 13 Q1 13 Q1 09 Q4 08 Q4 09 Q3 09 Q2 09 Million Cbm Q3 15

Decline in group volumes

Down of 7% q-o-q and 3% y-o-y

Prorated ocean volumes – WW group (100%)

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Index

Fall in both cargo segments

High and Heavy

  • Decline in all main trades
  • Construction volumes to North America

remained strong, however weaker than first half of the year Auto

  • Oceania stronger and Europe slightly

better

  • Decline in all other trades

Unprorated ocean volumes – WWL and EUKOR (100%)

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> Renewal of Ocean Carrier Contract

  • EUKOR secured contract for 4 more

years

  • Volumes out of Korea;
  • 50% in 2016 and 2017
  • 40% in 2018 and 2019
  • In 2014, EUKOR transported

approximately 4.6 million units of which 1.7 million where on behalf of Hyundai and Kia

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>

145 147 145 146 145 147 146 147 143 140 139 110 115 120 125 130 135 140 145 150 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2013 2014 2015 2016 Group tonnage Newbuildings Secured flexible tonnage

Making use of the tonnage flexibility

* Base case - Secured capacity not including upside potential through possible charter-in’s ** Vessels recycled at 25 years and all TC vessels redelivered at end of ordinary contract period, newbuilding included Other reduction flexibility options include; Renegotiation of charter terms, sale of vessels, slow steaming

** *

127

# Vessels

137

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Region Q3 2015 Q2 2015 QoQ change Q3 2014 YoY change 2015 FY FC 2016 FY FC 2016/ 2015 N America 5,29 5,44

  • 3 %

5,08 4 % 20,30 20,60 1 % Europe* 3,74 4,22

  • 11 %

3,42 9 % 15,60 15,80 1 % Oceania 0,32 0,33

  • 3 %

0,31 4 % 1,30 1,30 0 % BRICs 7,02 7,55

  • 8 %

7,50

  • 7 %

31,40 33,30 6 % .....Brazil 0,62 0,63

  • 1 %

0,83

  • 26 %

2,50 2,40

  • 4 %

.....Russia 0,41 0,40 3 % 0,55

  • 25 %

1,60 1,60 0 % .....India 0,77 0,73 5 % 0,75 3 % 3,20 3,50 9 % .....China 5,22 5,79

  • 7 %

5,37

  • 3 %

24,10 25,80 7 %

Continued low commodity prices impact HH volumes

Lower growth in annual Chinese car sales

Light vehicle sales in key markets quarterly [M Units] CAT - Resource industries sales quarterly [MUSD]

1 2 3 4 5 6 7

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2010 2011 2012 2013 2014 2015 *excluding Russia and Turkey

Quarterly light vehicle exports [M Units] John Deere - Q3 2015 industry outlook

500 000 1 000 000 1 500 000 2 000 000

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2008 2009 2010 2011 2012 2013 2014 2015 Japan Korea *Agriculture and Turf Retail Sales

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> Outlook

Auto

  • Marginal growth in mature markets
  • Growth in China but at lower levels
  • Slow in other emerging markets

High and heavy

  • Construction to remain healthy
  • Mining and agricultural to remain weak

Tonnage

  • Using tonnage flexibility to remain

balanced

  • Increased focus on synergies and cost reductions in all companies
  • Continue to expand land based activities
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> Prospect

The shipping activities in WWASA are expected to remain challenging, with added pressure on margins. Logistics activities are expected to be on par with the 2015 levels. The board will ensure a continuous focus on operational efficiency and cost- reducing initiatives.

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  • Wilh. Wilhelmsen ASA

Third quarter 2015

>

Wilh.Wilhelmsen ASA 11 November 2015

Benedicte B. Agerup, CFO

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> WWASA Group – Key financials

Provision impact shipping segment negatively in Q3

  • Total income reported - 6% q-o-q, - 14% y-o-y
  • EBIT reported negative USD 134 million, EBIT adjusted for non-recurring items USD 68 million
  • Shipping segment negatively impacted by a provision of USD 200 million
  • Lower ocean profitability q-o-q, partly seasonal, logistics stable

700 600 200 100 500 300 400 USD million 558 650 Q2 596 682 Q1 609 637 624 Q4

  • 6%

Q3 100

  • 150
  • 100

50

  • 50

USD million Q1 54 98

  • 134
  • 284%

57 Q4 66 73 Q3 76 Q2 2015 2014

Total income Total EBIT

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WWASA Group - Profit and Loss 2015

Proportionate method

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> WWASA EBITDA adjusted for non-recurring items

Down 6% q-o-q, partly seasonal

106 114 110 106 102 116 91 121 118 120 104 120 150 154 135 50 100 150 200 Q3 2015 4%

  • 6%

Q2 2015 Q1 2015 Q4 2014 Q3 2014 USD million Q2 2014 Q1 2014 Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012

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> WWASA Shipping – Key financials

Significantly impacted by a provision in connection with anti-trust investigations

  • Total income reported - 7% q-o-q, - 15% y-o-y
  • EBIT reported negative USD 150, EBIT adjusted for non-recurring items USD 53 million
  • Transported volumes down 7%, decline of both autos and H/H cargo
  • Suboptimal cargo and trade mix
  • Margins under pressure

600 500 400 300 200 100 USD million 502

  • 7%

Q4 Q3 437 512 Q2 470 539 Q1 460 499 50

  • 150
  • 100
  • 50

100

  • 359%

Q4 Q3

  • 150

47 Q2 58 37 Q1 59 37 USD million 55 2015 2014

Shipping income Shipping EBIT

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> WWASA Shipping – EBIT margin

Underlying margins stable q-o-q

+ Lower G&A cost base

  • Reduced BAF surcharges
  • Suboptimal cargo and trade mix
  • Continued pressure on margins
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> WWASA Logistics – Key financials

Underlying EBIT flat q-o-q

  • Total income reported - 4% q-o-q, - 10% y-o-y
  • EBIT reported + 2% q-o-q, - 18% y-o-y
  • Contribution from WWL logistics was on par with previous quarter
  • Contribution from Hyundai Glovis stable in Q3, but will be substantialy lower in Q4 due to currency

effects based on their reported net profit in Q3.1)

  • Market value of 12.0% ownership in Hyundai Glovis was USD 853 million on 30 September 2015

160 140 120 100 80 60 40 20 USD million 126

  • 4%

Q4 Q3 129 143 Q2 134 147 Q1 155 144 5 10 45 40 35 30 25 20 15 Q1 22 18 Q2 22 18 Q3 Q4 +2% 14 40 20 USD million 2014 2015

Logistics income Logistics EBIT

1) Hyundai Glovis net result consolidated into WWASA accounts one quarter in arrears.

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> WWASA Group – Financial income (expense)

Unrealised losses on derivatives

  • Net financial items
  • Negative return on investment management
  • Termination fee of USD 9 million for the deferred tax inherent in UK tax leases
  • Stable net interest expenses
  • Unrealised losses on both interest rate- and currency derivatives, due to a stronger USD and lower

medium to long term USD interest rates

  • Net financial items

(15.9) (0.8) (8.8) 2.1 (2.4) (0.5) Net interest expenses (22.0) (23.3) (67.9) (68.1) (25.4) (91.2) Interest rate derivatives - unrealised (15.3) 18.5 4.6 (1.7) (6.4) (16.8) Net financial - currency (15.2) 8.6 (40.1) 12.3 3.5 (22.0) Net financial derivatives bunkers (4.2) 0.9 (2.6) (0.3) (0.1) (0.3) )%,*& %!0 & %0& %0 & %0& %0&

Proportionate

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WWASA Group – Balance Sheet

Continued strong balance sheet

Equity

Effect of provision of USD 200 million

  • Reduction in investment in joint ventures and associates
  • Reduction in equity
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> WWASA Group - Committed CAPEX, incl. dry-docking

297 145

  • 151
  • 200
  • 150
  • 100
  • 50

50 100 150 200 250 300 Paid capex 2015 USD million Acc 2015-2016 2016 FY

  • Capex in 2015 already paid
  • Capex in 2016 financed through sale / lease back with a positive cash effect
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> WWASA Group – Liquidity development

Continued high liquidity buffers

172 11 35 20 127 420 380 360 340 320 300 280 440 460 400 Other USD million Liquidity Q3 2015 378 408 Financial cost Capex Net financing 10 Dividend received from JV’s and ass. 1 JVs/ associates EBITDA*) Liquidity Q2 2015

*) Equity

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50 100 150 200 250 300 350 400 450 2015 31 USD million 2020 -> 411 2019 341 2018 281 2017 106 2016 188

WWASA Group – interest bearing debt

Sound maturity profile

Banks Bonds Export financing

  • Three vessels previously on UK

tax lease refinanced to ordinary bank debt in July.

  • Ordinary instalments of USD 23

million in Q3.

  • Revolving credit facility of USD

50 million renewed in July.

  • Bond maturity in March 2016 of
  • approx. USD 15 million will be

financed from cash position

  • Covenant waivers received from

main banks to cover Q3 provision

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> WWASA Group – Semi-annual dividend per share

Dividend of NOK 0.50 per share in H2 2015

  • Dividend payment of

NOK 1.00 per share in H1 2015

  • Dividend payment of

NOK 0.50 per share in H2 2015

  • Low dividend payment

a reflection of weaker earnings and the JV’s exposure in the anti- trust investigation

0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0 2014 NOK/share 2.00 1.50 2015 2013 4.75 2011 1.00 2012 1.65 2nd half 1st half

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Thank you!

>

www.wilhelmsenasa.com