> Wilh. Wilhelmsen ASA First quarter 2016 Wilh. Wilhelmsen ASA /// May 2016 Jan Eyvin Wang, President and CEO
> 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. 2
> Agenda • Market development • Volume development • Prospects 3
> Global light vehicle sales 4 Source: WWL
> Caterpillar – Resource Industries* sales quarterly Remaining soft USD billion *CAT Resource Industries: Customers using machinery primarily in mining, quarry, waste and material handling applications. 5 Source: CAT
> Group ocean volume development Sharp decline in Q1 Million Cbm 22 -14% -15% 20 18 16 14 12 10 8 6 4 2 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15 16 6 Prorated ocean volumes – WW group (100%)
> Group ocean cargo segment development Auto High and heavy • • Seasonality Slight pick up in volumes • • Reduced volumes in most main trades Increased exports from Asia • • New EUKOR OCC Overall volumes remain at a low level 7 Unprorated ocean volumes – WWL and EUKOR (100%)
> Japanese auto exports in a downward trend Units 8 Source: JAMA and KAMA
> Auto deep sea market: Increasing fragmentation 1990 – mainly a Japanese-US/German affair Million units 9 Source: WWL
> Auto deep sea market: Increasing fragmentation 2020 – much more fragmented and complex Million units 10 Source: WWL
> Market outlook • Soft auto market expected to continue – Earthquake in Japan only to have limited impact • No pick-up in high and heavy volumes – Mining activity to remain sluggish – Construction and agriculture flat • Growth in logistics activities – Positive trend to continue 11
> Our response Adjusting group tonnage to reduced volumes 137 vessels 132 vessels 147 vessels • Five group vessels taken out in Q1, of which three were recycled by WWASA • Two newbuildings to be delivered to WWASA in Q2 12
> Prospects The board expects volume growth to remain weak over the next period, with continued pressure on margins. The approved demerger of Den Norske Amerikalinje AS will reduce the future contribution from the logistics segment. 13
> Wilh. Wilhelmsen ASA First quarter 2016 Wilh.Wilhelmsen ASA May 2016 Benedicte B. Agerup, CFO
> WWASA Group – Key financials Non recurring gain lifted operating profit • Total income reported +12% q-o-q, stable y-o-y • EBIT reported +90% q-o-q, +29% y-o-y • Non recurring gain of USD 80 million in the logistics segment • Sharp decline in ocean transported volumes • Three vessels recycled for WWASA’s account Total income Total EBIT 2015 2016 +90% USD mill USD mill +12% 700 150 126 609 608 596 98 600 558 545 100 73 66 500 50 400 0 300 -50 200 -100 100 0 -150 -134 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 15
> WWASA Group – Profit and Loss Q1 2016 Proportionate method 2016 Q1 2015 Q4 2015 Q1 2015 FY USD mill Operating income 515 541 573 2 243 Gain on sale of assets 80 26 29 Share of profits from JV's and associates 13 2 9 36 Total income 608 545 609 2 308 EBITDA 161 108 136 262 Depreciation and impairments (35) (41) (38) (160) EBIT 126 66 98 103 Financial income/(expense) (15) (13) (46) (128) Profit/(loss) before tax 111 53 52 (25) 1 1 1 104 82 56 (4) Net profit 1) Earnings per share (USD) 0.47 0.37 0.26 -0.02 1) after minority interest Q1 2016 includes non recurring net gain of USD 76.5 million - Gain of USD 80 million in logistics segment and loss of USD 3.5 million in shipping segment 16
> WWASA Shipping – Key financials Sharp decline in auto volumes, H/H stable at a low level • Total income reported - 18% q-o-q, - 22% y-o-y • EBIT reported - 55% q-o-q, - 53% y-o-y. • Lower fleet utilisation caused by sharp decline in cargo volumes • Pressure on freight rates continued • Non recurring loss of USD 3.5 million related to recycling of three vessels 2015 2016 Shipping income Shipping EBIT USD mill USD mill -55% 600 100 -18% 62 59 58 470 500 460 437 50 433 28 400 357 0 300 -50 200 -100 100 0 -150 -150 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 17
> WWASA Shipping – EBIT margin Underlying margin falling q-o-q USD mill Operating revenue - Shipping EBIT margin EBIT margin adjusted 700 18.0 % 16.0 % 600 14.0 % 500 12.0 % 400 10.0 % 8.0 % 300 6.0 % 200 4.0 % 100 2.0 % - 0.0 % *) Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 *) Q3 2015 EBIT margin -34.4%, large negative non-recurring item + Lower G&A cost base - Reduced BAF surcharges + Reduced OPEX - Soft volumes - Suboptimal cargo and trade mix - Rate pressure 18
> WWASA Logistics – Key financials Non recurring gain of 80 million lifted operating profit • Total income reported + 116% q-o-q, + 67% y-o-y • EBIT adjusted +212% q-o-q, +43% y-o-y • USD 80 million gain related to WWL’s acquisitions in the US and South Africa and sale of entity in EU • Higher contribution from Hyundai Glovis and logistics entities in WWL q-o-q • Contribution from Hyundai Glovis discontinued 17 March 2016 following the demerger of NAL AS • Non recurring gain from demerger to be reported in Q2 2015 2016 Logistics income Logistics EBIT USD mill USD mill +116% +1 448% 300 120 259 100 250 100 200 80 155 134 150 60 129 120 40 100 40 18 18 50 20 6 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 19
> WWASA Committed CAPEX ending in Q2 2016 • CAPEX program finalized Q2 2016 with delivery of 2 post panamax vessels in April and June • Both vessels financed through sale leaseback • Positive cash effect in Q2 of USD ~ 35 million (at time of delivery) 20
> WWASA Group – Financial income/(expense) Stable net financial expenses q-o-q USD mill 2016 Q1 2015 Q4 2015 Q1 2015 FY Net financial items 1.0 2.5 7.8 (6.3) Net interest expenses (22.8) (23.5) (22.6) (91.4) Interest rate derivatives - unrealised (14.4) 19.7 1.4 24.3 Net financial - currency 20.1 (8.5) (33.4) (48.7) Net financial derivatives bunkers 0.7 (3.7) 0.7 (6.3) Financial income/(expense) (15.4) (13.5) (46.1) (128.3) Proportionate • Lower USD interest raters led to unrealized losses on interest derivatives • Gains on financial derivatives due to stronger USD and an increase in bunker prices 21
> WWASA Group – Balance Sheet Strong balance sheet USD mill 31.03.2016 31.12.2015 Assets Non current assets 2,628 78% 2,925 89% 349 n/a Financial assets held for distribution 10% 65 24 Current assets (excl liquid funds) 2% 1% 338 349 Liquid funds 10% 11% 3,380 3,299 Total assets 100% 100% Equity & liabilities 1,762 1,655 Equity 52% 50% 1,125 1,135 Non current interest-bearing debt 33% 34% Other non current liabilities 222 7% 225 7% Current liabilities 270 8% 285 9% Total equity and liabilities 3,380 100% 3,299 100% Equity Financial asset held for distribution related to demerger of NAL (Hyundai Glovis) 22
> WWASA Group – interest bearing debt Refinancing of balloons in 2018/2019 Bonds Banks Export financing USD million 346 343 350 • Ordinary instalments of approx. USD 20 million in Q1. 300 285 • Bond maturity in March of approx. 250 USD 15 million financed from cash position. 200 • Bond maturity in November 2016 of 152 approx. USD 70 million also to be 150 financed from cash position. 106 100 • Delivery of MV Theben in April, 67 financed through sale leaseback 50 0 2016 2017 2018 2019 2020 2021 -> 23
> WWASA Group – Liquidity development Continued high liquidity buffers USD mill 500 450 102 137 400 37 349 350 338 13 13 21 12 0 Liquidity EBITDA*) JVs/ Net Capex Proceeds Interest Other Liquidity Q4 2015 associates financing from sale Q1 2016 of vessels *) Equity 24
> WWASA Group – Semi-annual dividend per share NOK/share 4.00 4.00 • No dividend to be paid in Q2 2016 for the fiscal 3.50 year 2015 3.00 • Demerger of NAL 2.50 (Hyundai Glovis) to visualize values for 2.00 shareholders 1.50 • Substatial lift in share 1.00 1.00 1.00 1.00 1.00 price of WWASA 0.75 0.65 0.50 0.50 0.50 following announcement 0.50 of demerger 0.00 0 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 25
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