Q1 Presentation
May 10th 2017
Craig Jasienski (President & CEO)
Rebekka Glasser Herlofsen (CFO)
Today’s Presenters
Rebekka Glasser Herlofsen
CFO
Craig Jasienski
President & CEO
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•
•
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
•
•
•
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
2
Agenda
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
3
BUSINESS UPDATE
by Craig Jasienski
4
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
Business update Q1 at a glance…
Merger moving ahead as per plan
Volume and cargo mix shows positive development
Main trades show positive development out of Asia
Total fleet increased to 128 vessels, with one delivery in Q1
Continued positive developments for the landbased segment
5
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
WWL ASA listed on Oslo Børs April 5th 2017
- 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
6
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
A new and more efficient structure in place…
From a structure of jointly controlled entities...
27%
100%
100%
Wallenius’
fleet
Wilh.
Wilhelmsen
Holding ASA
Public
minority
Soya Group
73%
...to an integrated and more efficient WWL structure
38%
24%
WW ASA
Wallenius
40%
Wallenius
Wilhelmsen
Logistics
EUKOR
WW ASA’s
fleet
50%
ARC
Ocean1
Landbased
40%
20%
50%
38%
WWL ASA
100%
50%
Wilh.
Wilhelmsen
Holding ASA
Public
minority
Wallenius
50%
HMG
Management Team: all entities structured under WWL ASA
→ increase transparency, both internally and externally

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

1) Hyundai Motor Group will continue to own 20% of EUKOR
Note: ARC retains a separate and independent management structure
7
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
Strong Top Management Team with average +20 years experience
WWL ASA Senior Management Team
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
EUKOR
WWL Ocean
Erik Noeklebye
CEO
Mike Hynekamp
COO
1) Appointed April 2017
WWL Landbased
Ray Fitzgerald
COO
8
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
Volume and cargo mix shows positive development
Volume and Cargo Mix development
Comments
Million CBM and %
Volume
HH share of volumes
Million CBM
22
%
35
20.5
20
18.7
19.6
19.4
18.2
18.0
18
-2%
16.7
15.5
16
14
3%
18.3
25%
23%
24%
24%
25%
24%
16.2
15.2
24%
15.9
25
24%
22%
12
30
20
20%
10
15
8
6
4
- Increased import to Oceania from Europe
• Cargo mix
10
- Improvement in cargo mix from 21% to 23% HH
(High & Heavy) share of total volumes q-o-q
5
- Stable development in cargo mix y-o-y
2
0
- Increased volumes exported from Asia to both
Europe and South America
- Export from Asia to North Americas declined
23%
21%
• Ocean transported volumes down 2% q-o-q
mainly due to seasonality, but increased 3%
y-o-y, primarily driven by:
0
Q2’14
Q3’14
Q4’14
Q1’15
Q2’15
Q3’15
Q4’15
Q1’16
Q2’16
Q3’16
Q4’16
Q1’17
9
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
Positive development in export from Asia to Europe and NA q-o-q
EU - ASIA
Atlantic Shuttle
1%
2.8
Q1 ’16
-3%
3.0
Q4 ’16
-5%
Asia - EU
14%
-5%
2.9
2.9
2.8
Q1 ’16
Q4 ’16
Q1 ’17
6%
2.6
2.8
3.0
Q1 ’16
Q4 ’16
Q1 ’17
2.9
Q1 ’17
Asia - NA
EU/NA – Oceania1)
8%
1.0
-8%
3.5
-8%
1.2
1.1
Asia - SAWC
-9%
1.1
Q4 ’16
3.2
2.8
18%
Q1 ’16
14%
0.8
Q1 ’17
WWL trade routes
EUKOR trade routes
ARC trade routes
Q1 ’16
Note: All numbers given in million CBM per quarter
1) Including Cape sailings (South Africa)
Q4 ’16
1.0
Q1 ’16
Q4 ’16
Q1 ’17
Q1 ’17
10
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
Total fleet is 128 vessels, with one delivery in Q1
Fleet development
Comments
CEU, # of vessels
CEU ‘000
# of vessels
• One Eukor vessel delivered 30th March
180
1,000
913
929
800
924
146
934
147
140
917
143
900
897
886
873
889
865
865
873
160
140
140
139
137
133
134
125
130
127
128
120
• No further CAPEX planned past five post
Panamax newbuildings with expected delivery
between 2017 and 2019 (remaining CAPEX of
USD ~200 million)
600
100
80
400
20
• WWL ASA strives to have fleet flexibility
through combination of owned, long- and
short-term T/C tonnage
0
• Flexibility to redeliver 9 vessels by end of 2017
60
40
200
0
Q1’14
Q2’14
Q3’14
Q4’14
Q1’15
Q2’15
Q3’15
Q4’15
Q1’ 16
Q2’ 16
Q3’ 16
Q4’16
• Additional capacity need will be acquired in
the charter market
Q1’17
11
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
Continued positive developments for the landbased portfolio
Landbased segment business update
• 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
12
Financial Performance
by Rebekka Glasser Herlofsen
13
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
WWASA – Profit & Loss
WWASA Profit & Loss1
Comments
USD million
2017 Q1
2016 Q4
2016 Q1
FY 2016
Operating income
Gain on sale of assets
Share of profits from JV's and associates
439
9
450
432
80
13
1,751
455
13
Total income
448
450
525
2,219
79
43
161
728
(38)
(35)
(148)
4
126
580
(15)
(37)
EBITDA
Depreciation and impairments
EBIT
Financial income/(expense)
(38)
41
(11)
0
Profit/(loss) before tax
30
4
111
543
Net profit 2)
261
(21)
1041
5001
0.12
-0.09
0.47
2.27
Earnings per share (USD)
1) Reported figures (non adjusted)
2) Incl. minority interests
• 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% yo-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
14
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
WWASA – Ocean segment
Total income and EBITDA ocean segment1
Comments
USD million
Total income
• Ocean income adjusted for non recurring
items declined 3% q-o-q, but stable y-o-y
EBITDA
Non recurring items
-1%
357
-3%
372
337
365
354
-5%
-15%
73
65
73
62
61
• Ocean transported volumes fell 2% q-o-q, but
increased 3% y-o-y
31
Q1’16
Q2’16
Q3’16
Q4’16
-9
4
2
Q1’17
Q1’16
Q2’16
-9
Q3’16
Q4’16
• 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)
Q1’17
• Earnings negatively impacted by increased
bunker costs due to time lag in BAF clauses
• Continued pressure on ocean rates
1) Adjusted for non recurring items
15
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
WWASA – Landbased segment
Total income and EBITDA landbased segment1
Comments
USD million
Total income
EBITDA
Non recurring items
+14%
+1%
+32%
82
175
• EBITDA adjusted for non recurring items and
“Treasure ASA” stable q-o-q , but increased with
32% y-o-y
+1%
9
88
89
92
93
102
11
11
11
2 9
11
-93
-93
Q1’16
Q2’16
Q3’16
Q4’16
Q1’17
Q1’16
Q2’16
Q3’16
Q4’16
• Landbased income adjusted for non recurring
items and “Treasure ASA” was stable q-o-q, but
increased 14% y-o-y
Q1’17
1) Adjusted for non recurring items and “Treasure ASA”
• 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
overall ocean volumes, but pulled back by
planned intermediate low volumes during startup of MIRRAT in Australia
16
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
WWL ASA pro-forma balance sheet year-end 2016
Unaudited Pro-forma Balance Sheet WWL ASA IFRS, 20161
Comments
USD billion
ASSETS
EQUITY & LIABILITIES
7.3
Non current assets
Current assets
7.3
Equity
2.3
Non current liabilities
4.1
6.1
1.3
Current liabilities
0.9
• 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
1. Overview sets out the unaudited pro forma balance sheet information for WWL ASA as of 31th December 2016
17
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)
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
WWL ASA debt overview year-end 2016
WWL ASA group interest bearing debt 20162)
Comments
USD billion
3.9
3.1
• 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
Commercial Financial Lease
Banks
Bonds
Total Debt
Cash and Cash
Equivalents1
1. Includes financial investments
2. Per 31.12.2016
Net Debt
18
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
New dividend policy was approved by the Board May 9th
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%
19
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
WWL ASA – What can you expect for Q2 reporting?
• 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
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”
20
Market and Business
Outlook
by Craig Jasienski
21
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
Total light vehicle sales in the first quarter increased by 4% y-o-y
Global auto sales development forecast
Global auto sales per main sales region1
Million units, 2016-2021E
CAGR 2016-2021, CAGR Q1’17 vs Q1’16
CAGR
EUR
CAGR ’16-21
APAC
ME AF
AM
10%
1,8%
9%
92,1
16,2
2.1%
Deepsea 14,6
East Europe
8%
India & Pakistan
7%
6%
ASEAN
5%
Middle East & Africa
4%
South America
Central Europe
3%
84,5
Domestic 77,5
1.7%
Greater China
2%
Oceania
1%
0%
West Europe
NAFTA
-1%
Japan/Korea
-2%
2016
2017E
2018E
2019E
2020E
2021E
Source: IHS
1) Size of circle indicates auto sales Q1 2017
-5%
0%
5%
10%
15%
20%
Q1’17 vs Q1’16
22
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
Positive outlook for all main High & Heavy segments
Improving outlook for mining shipments
Continued solid growth for construction
Down-cycle about to turn for Agriculture
000s, 2005-2020E1
2007-2020E2
CEMA business barometer3
5.8
6.0
5.4
5.5
5.0
4.3
4.0
3.7
3.5
3.0
2.5
4.2
2.9
3.6
3.2
3.7
3.2
Percentage growth (y/y)
4.5
3.1
2.9
2.2
2.4
2.0 2.0
2.0
1.5
Q2’11
Q3’17
1.0
0.5
0.0
’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17E ’18E ’19E ’20E
•
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)
1) Source: Parker Bay (Mining)
23
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
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
Moderate net fleet growth forecasted going forward
4% of fleet are recycling candidates…
..contributing to moderate net fleet growth
Fleet by year of build, 1000 CEU
Forecasted net fleet growth, % p.a.
45-50 firm
vessels
8-9% of
fleet CEU
16%
14%
12%
10%
8%
41 vessels
>25 years old
4% of fleet CEU
6%
4%
2%
0%
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
-2%
-4%
Net fleet growth, %
Source: SeaWeb and Llouds List Intelligence Unit
24
Business Update
Financial Performance
Market and Business Outlook
Summary and Q&A
Board view
Market outlook
«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.»
Business Outlook
«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.»
25
Q&A
by Craig Jasienski and Rebekka Glasser Herlofsen
26
Thank you!
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