Conference 2012 Nomura Transport Conference London, March 21, 2012 - PowerPoint PPT Presentation

Nomura Transport Conference London, March 21, 2012 1 1 Panalpina Group London, March 21, 2012 Nomura Transport Conference 2012

Nomura Transport Conference London, March 21, 2012 2 2 Highlights 2011 Financial review Outlook

Nomura Transport Conference London, March 21, 2012 3 3 2011 – Strengthening of the corporate platform and focused growth  Strategy reviewed, clarified and refined  End-to-end Supply Chain Solutions  Air/Ocean Freight complemented by Supply Chain and Value-Added Logistics Services  Organic network expansion, particularly in emerging markets  New offices and logistics facilities in China, India and Brazil  Two acquisitions  Apollo Perth  Grieg Logistics  Product divisions strengthened  Key hires  Product innovations  Enhanced customer portfolio  Profitability restoration program  New contracts in all Industry Verticals

Nomura Transport Conference London, March 21, 2012 4 4 The organization has been refined, regional mgmt team completed Valid as of mid-2012 • Corporate Audit Board of Directors Chief Executive Officer • Area Sub-Saharan Africa Monika Ribar • Corp Communications • Corp Dev., Agent Relations • Corp Compliance Chief Operating Officer Chief Financial Officer Chief HR Officer Chief Legal Officer/Corp Sec. Karl Weyeneth Robert Erni Alastair Robertson Christoph Hess • Corporate Accounting • HR Processes & Projects • Corporate Legal Services • Air Freight • Ocean Freight • Corporate Taxes • International Compensation & • Government Affairs • Logistics • Corporate Controlling • Corporate Insurance Benefits • Investor Relations • Sales & Marketing • HR Operations Management • Indirect Purchasing • Capability Development & • Supply Chain Solutions/Industry • Strategic Finance & Projects Verticals Panalpina Academy • Business Processes & • Group Treasury • Corporate Information Quality Technology* Europe/Middle East Americas Asia Pacific Volker Böhringer Ferdinand Kurt Marco Gadola Areas Europe/Middle East Areas Americas Areas Asia Pacific Executive Committee = + Committee Members Executive Board (EB) *new CIO to be announced soon

Nomura Transport Conference London, March 21, 2012 5 5 A number of new product innovations have been introduced (1/3) Own controlled network: Upgrading to two latest generation Boeing 747-8Fs  More capacity (+16%)  More sustainability (-12% CO 2 emissions, -30% noise footprint)  More flexibility  More innovation (advanced temperature control features)  Meeting the needs especially in Healthcare, Hi-Tech, Automotive, Oil and Gas

Nomura Transport Conference London, March 21, 2012 6 6 A number of new product innovations have been introduced (2/3) End-to-end cold chain solutions  Panalpina became one of the world‟s biggest Qualified Envirotainer Providers  Master lease agreement for CSafe‟s active temperature controlled containers  Advanced temperature control features in new B747-8F  Meeting the specific needs in Healthcare

Nomura Transport Conference London, March 21, 2012 7 7 A number of new product innovations have been introduced (3/3) Product line in Logistics extended  New value-added services introduced, e.g.  inbound to manufacturing  aftermarket spare parts  service logistics  technical distribution  postponement services  Regional competence centers on three continents launched  Logistics centers opened in 18 countries, including the Huntsville Logistics Center next to Panalpina‟s Huntsville Hub (USA) Logistics Logistics Logistics Logistics Logistics Inbound Value Added Production Distribution Aftermarket Services Warehousing Services Services Services

Nomura Transport Conference London, March 21, 2012 8 8 Highlights 2011 Financial review Outlook

Nomura Transport Conference London, March 21, 2012 9 9 Focused execution leads to solid financial results 1. Strong organic business growth 2. Increase in profitability and margins 3. Strong cash flow generation Logistics +2% YTD y/y growth Ocean (Excl. FX: +15%) FY 2011 FY 2010 CHF Excl. FX Air Cash flow before changes in WC 161.7 150.2 -2.8% 9.4% 360 350 Changes in working capital 67.4 (75.0) Cash from operations 229.1 75.3 14.4% 14.1% -3.1% 8.6% 439 453 Interest and income taxes paid (35.6) (38.2) 212 208 Net cash from operating activities 193.5 37.0 Net cash from investing activities (151.6) (30.8) 5.6% 15.4% Free cash flow (FCF) 41.9 6.2 688 667 FCF adj. for money market 152.7 12.3 investments and acquisitions FY 2010 FY 2011 FY 2010 FY 2011 Underlying EBITDA Underlying EBITDA/GP margin Gross profit in CHF million EBITDA in CHF million Cash flow in CHF million • Strong organic gross profit growth in all segments  Group GP (excl. FX) up 12% y/y • EBITDA/GP margin rising from 14.1% (FY 2010) to 14.4% (FY 2011) • Adjusted free cash flow of CHF 153 million (FY 2010: CHF 12 million) • Proposed pay-out of CHF 3.90 per share (dividend CHF 2.00, capital reduction CHF 1.90)

Nomura Transport Conference London, March 21, 2012 10 10 Further rise in Air Freight yields, record volumes in Ocean Freight Air Freight: tonnage vs. GP/ton development Ocean Freight: TEU vs. GP/TEU development Tonnage index (lhs), GP/ton index (rhs): 1Q10 = 100 TEU index (lhs), GP/TEU index (rhs): 1Q10 = 100 +9% -10% 120 160 120 160 100 100 140 140 80 80 120 120 60 60 100 100 40 40 80 80 20 20 0 60 0 60 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 Air freight tons (lhs) GP/ton (rhs) GP/ton excl. FX (rhs) Ocean freight TEUs (lhs) GP/TEU (rhs) GP/TEU excl. FX (rhs) Δ (%) Δ (%) 2011 2010 Excl. FX 2011 2010 Excl. FX (%) (%) Tons (‘000) TEUs (‘000) 1‟310 1„241 -5% +6% 848 892 GP/ton (CHF) GP/TEU (CHF) 811 748 +9% +21% 335 365 -8% +3% GP (CHF m) GP (CHF m) 688 667 +3% +15% 439 453 -3% +9% • Air Freight: volume growth affected by profitability restoration program. Yield focus leading to further increase in GP/ton in 4Q11 – up 8% yoy in CHF, up 20% net of FX • Ocean Freight: Growth in line with market leading to new volume record in 2011. GP/TEU in 4Q11 down 14% yoy in CHF, down 6% net of FX due to low level of rates and highly competitive environment

Nomura Transport Conference London, March 21, 2012 11 11 Highlights 2011 Financial review Outlook

Nomura Transport Conference London, March 21, 2012 12 12 The Logistics industry still offers many growth opportunities… Findings from a recent study* Total market size (global 3PL revenues 2010) % of respondents that use a 3PL (third-party logistics) provider $542 billion Europe Asia-Pacific North America 165 158 149 28 Latin America Other regions 0 200 400 600 Source: Armstrong & Associates, 2011  Logistics expenditures represent an average of 12% of sales revenues for shippers, of which 42% is spent on outsourcing  64% of shippers are increasing their use of 3PL services  58% are reducing/consolidating the number of 3PL providers they use  Fuel efficiency and carbon emissions are becoming more important decision factors for selecting 3PLs *Source : „The State of Logistics Outsourcing“ ( 16 th Annual Third-Party Logistics Study, October 2011)

Nomura Transport Conference London, March 21, 2012 13 13 …in a market which is highly fragmented Market share 2010 based on combined air/ocean freight turnover Market share Top 10 6% 5% 4% 3% 2% 1% Top 10 global forwarders (30%) 0% DB Schenker Agility DHL K+N Panalpina UPS SCS Expeditors Ceva DSV Sinotrans Rest (70%) Source: company reports, Panalpina estimates

Nomura Transport Conference London, March 21, 2012 14 14 “Sustainable, profitable growth” strategy 2014: status update 2010 2011 2014  14.1% *  14.4%  20% EBITDA/GP  25.9% *  24.4%  25% Tax rate  1.6%  1.1%  ≤2% NWC intensity (end of period)  0.6%  0.8%  0.8% Capex (% of NFR) Based on following assumptions: • Steady growth of core markets. Assumed market volume CAGR 2011-14:  Air Freight: 5%  Ocean Freight: 7%  Logistics: 5% • Panalpina to outperform market • On average, stable unit profitability (currency neutral) compared to 2010 * 2010 adjusted for non-recurring items

Nomura Transport Conference London, March 21, 2012 15 15 Contingency plans in place to address ongoing volatility Planning assumptions for 2012: Implications for strategy execution:  Economic environment remains volatile  Pre-defined scenarios with concrete simulations and corresponding action plans  Capacity growth outstripping growth in  Continued investments in Sales, Logistics demand, particularly in Ocean Freight and IT  Uneven demand growth by core market and  Group-wide cost-containing measures geography implemented during latter part of 2011  Soft expectations for near-term volumes with uptick in second half-year  Panalpina to outperform market  Targeted productivity increases • Low-visibility environment remains with expectations for soft near-term and rebound in H2 2012 • Working with scenarios allowing to react quickly to deviations from budget