HAMBURGER HAFEN UND LOGISTIK AG

Transcription

1 HAMBURGER HAFEN UND LOGISTIK AG Investor Presentation September 2018

2 Content and disclaimer Investment highlights and strategy p. 4 Financial performance H p. 15 Business forecast 2018 p. 24 Fact book p. 26 The facts and information contained herein are as up to date as is reasonably possible and are subject to revision in the future. Neither the Company nor any of its parent or subsidiary undertakings nor any of such person s directors, officers, employees or advisors nor any other person makes any representation or warranty, express or implied as to, and no reliance should be placed on, the accuracy or completeness of the information contained in this presentation. Neither the Company, nor any of its parents or subsidiary undertakings nor any of their directors, employees and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this presentation. The same applies to information contained in other material made available at the presentation. While all reasonable care has been taken to ensure that the facts stated herein are accurate and that the opinions contained herein are fair and reasonable, this document is selective in nature. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by the Company as being accurate. This presentation contains forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which the Company operates. These statements generally are identified by words such as believes, expects, predicts, intends, projects, plans, estimates, aims, foresees, anticipates, targets and similar expressions. The forward-looking statements, including but not limited to assumptions, opinions and views of the Company for information from third party sources, contained in this presentation are based on current plans, estimates, assumptions and projections and involve uncertainties and risks. Various factors could cause actual future results, performance or events to differ materially from those described in these statements. The Company does not represent or guarantee that the assumptions underlying such forward-looking statements are free from errors and the Company does not accept any responsibility for the future accuracy of the opinions expressed in this presentation. No obligation is assumed to update any forward-looking statements. By accepting this presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Company s business. This presentation is not a prospectus and does not constitute an offer or an invitation or solicitation to subscribe for, or purchase, any shares of the Company and neither this presentation nor anything contained herein shall form the basis of, or be relied on in connection with, any offer or commitment whatsoever. 2

3 Investment highlights Positioned for future challenges HHLA Port Logistics Group Port Logistics listed Class A shares Real Estate non-listed Class S shares Container segment Intermodal segment Logistics segment 1. THE logistical and digitally innovative hub 2. Favourable geographical location in a market with solid growth outlook 3. Well-invested asset base with state-of-the-art technology 4. Solid financial foundation with strong cash flows 5. Growth and efficiency as guiding principles 6. Environmental protection and sustainability The particular attractiveness of the portfolio in the Hamburger Speicherstadt and on the northern Elbufer / Fischereihafen areal is justified by the unique structure and the location. The in-house development and implementation know-how is aimed at balancing market-oriented tenant needs and heritage-friendly handling of buildings protected as world heritage. 4

4 1. THE logistical and digitally innovative hub HHLA Port Logistics strategic position HHLA Port Logistics HHLA Port Logistics is the logistical and digitally innovative hub along the new continental and maritime Silk Road Internationalisation will continue with HHLA opening up for new transport routes Digitisation will open up further opportunities and HHLA will benefit from new production processes HHLA is strengthening the existing core of its business; will exploit growth opportunities along the transport streams of the future; will improve efficiency and grow sustainably. 4

5 2. Local player connected to Europe and Asia Favourable geographical location in a market with solid growth outlook HHLA Port Logistics 9% CONT. EUROPE UK / IRELAND 10% SCANDINAVIA 10% BALTIC SEA 5% NORTH AMERICA 5% LATIN AMERICA 8% AFRICA / RoW 53% ASIA / FAR EAST HINTERLAND CONNECTIONS WITH CEE Oversea traffic Feeder services Hinterland transportation Source: Hafen Hamburg Marketing e.v. Growth perspectives GDP 2018e World % Germany % China % Russia % CEE % Rail network Asia-Europe Existing routes Planned or under construction Main links Source: Merics Germany s largest logistics hub Market leader in the Port of Hamburg Excellent hinterland Europe s largest railway port with a dense rail network Dense hub and railway network in the West of the new Silk Road Own fleet of railway waggons and traction Cross-border transport solutions Local player excellently positioned to capture potential from new transport routes 5

6 3. Well-invested asset base Operations with state-of-the-art technology HHLA Port Logistics State-of-the-art handling technology, innovative IT systems and a high level of automation Three fully equipped berths for the latest generation of mega carriers already in operation at the Container terminals Burchardkai (CTB) and Tollerort (CTT) Further rollout of additional automated block storage capacities at CTB On-dock railway stations at all facilities able to comply with future 740 m block trains Optimised traffic coordination for an improved cargo flow and terminal access In line with client needs: ready for mega carriers Self-funded investments in million 177,3 218,4 74,4 70,5 186,8 146,3 Operating cash flow Investing cash flow (without proceeds for short-term deposits) 218,7 101,8 258,9 124,

7 4. Solid financial foundation with strong cash flows Stable KPIs even through difficult waters HHLA Port Logistics Equity development / Equity ratio in million 572,9 37% 517,0 542,5 528,7 555,8 32% 34% 32% 34% Equity ratio Net debt in million ,6 436,7 409,2 453,5 2,4 2,3 2,4 2,4 248,0 199,8 222,4 Net debt Pension provisions 173, ,1 2,1 125,4 Net debt / EBITDA Cash flow in million 177,3 102,9 218,4 147,9 186,8 40,5 Operating cash flow Free cash flow (without proceeds for short-term deposits) 218,7 116,9 258,9 134, Ø Capital employed / ROCE in million 1.186, , , , ,3 11,8% 13,6% 12,4% 12,8% 13,6% ROCE Profit after tax and minorities / EPS in million / in 48,3 52,3 0,69 0,75 58,9 63,7 0,84 0,91 71,2 1,02 Earnings per share Dividend development in / in % 0,45 0,52 0,59 0,59 0,67 65% 70% 70% 65% 66% 2,5% 3,0% 4,2% 3,3% 2,8% Pay-out ratio Dividend yield per

8 5. Growth and efficiency as guiding principles Strategy will allow for sustained growth HHLA Port Logistics Mid-term targets to ensure growth and efficiency improvements: HHLA Port Logistics will invest ~ 800 million until 2022 to grow organically HHLA Port Logistics will fund investments from own funds and free cash flow HHLA Port Logistics will grow inorganically and achieve a positive value contribution HHLA Port Logistics will keep net debt/ebitda in investment grade territory HHLA Port Logistics will pursue its dividend policy and distribute % of net profit Long-term targets: Strong market position Smart investment and efficiency programmes New business fields EBIT in 2025 of 300* million * Based on current assumptions and estimates; assuming progress in Elbe dredging 8

9 5. Strategic approach to enhance growth and efficiency Two-tier approach along three action fields HHLA Port Logistics Action field Programme Investments 1 Strengthen the existing core business Innovations 2 Open up new growth potential along the transport streams of the future Mergers & acquisitions 9

10 5. 1 Strengthen the existing core business Investment programme to facilitate profitable growth HHLA Port Logistics Investments* Container: ~ 450 million Intermodal: ~ 350 million Challenge Increasing volume peaks due to growing ship sizes Consolidation amongst customers Demand for sustainable solutions Necessity for efficiency Bottlenecks in infrastructural capacities Sustain know-how- and efficiency-based price-performance-ratio Necessity for efficiency improvements Logistic solutions across borders and rail networks Growth 5 new gantry cranes for mega carriers at CTB until 2019 Preparation of another berth for mega carriers at CTT Substantial investments planned at METRANS for locomotives and waggons to renew and expand the company s own transportation and handling capacities Efficiency Implementation of a uniform terminal planning system and database Increase agility Reduce overhead costs Acquisition of remaining stake in METRANS Full integration of POLZUG in the METRANS group, make use of synergies Increase agility Reduce overhead costs * excluding M&A 10

11 5. 2 Open up new growth potential Along the transport streams of the future HHLA Port Logistics CONTAINER INTERMODAL LOGISTICS Organically Innovations and M&A Inorganically Growth from innovations IHATEC* Green port terminal Automation and digitisation of processes Bundling and processing of data Digitisation and automation of processes Structured terminal evaluation to identify and evaluate attractive investment options Focus on existing terminals in growth markets with a high proportion of gateways and efficiency potential Open up new potential by orienting on the existing intermodal network Expansion of regional focus Growth from M&A Efficiency increases Establish strategic partnerships Manage the inorganic growth, make use of synergies, reduce overhead costs Increase value creation from denser network Serve rising customer demands without proportionally rising costs Reduce overhead costs * Innovative Hafentechnologien (funding programme for innovative port technologies) 11

12 Transiidikeskuse: Biggest terminal operator in Estonia Recent news HHLA acquired 100 % of the shares of the Estonian port operator Transiidikeskuse AS (TK) in Muuga (Tallinn) TK is clear market leader in container handling in the Baltic country and operates a multipurpose terminal for break bulk, bulk and RoRo handling TK s Geographic position links the Northern European market with the New Silk Road Location is developing into a multimodal hub as a result of regional infrastructural projects (such as the Rail Baltica project) Container terminal currently with high utilisation of its capacity of around 300 TTEU; can be increased to approximately 800 TTEU HHLA expects to leverage synergies by further professionalising sales and operations and integrating the port operator into the HHLA network HHLA is expanding its regional diversification and confirming its goal of also achieving international growth 12

13 6. Environmental protection and sustainability Sustainable management anchored in business model HHLA Port Logistics Ecological and highly efficient transport chain connects port and the hinterland Since 2008 CO 2 emissions have been reduced by 28.9 % Investment of more than 4 million per year in education and training of employees Value creation for the economy: more than 600 million per year Intention to develop and market a green port product at CTA which is unique in Europe: Refining the electricity obtained from the power barge by buying biogas Continue to cover the remaining electricity demand from renewable sources Convert the AGV fleet completely to B-AGV by 2021/22 Test a potential use of care diesel (CO 2 neutral and lower emissions) and make it available for customers if suitable LNG PowerPac as external power generation on board Continuous improvements in Intermodal business: Two hybrid locomotives used for heavy-duty shunting on a permanent basis Use of container flat waggons which are 30 % lighter than the normal equipment 13

14 HHLA Port Logistics THE logistical and digitally innovative hub HHLA Port Logistics Connection of transport streams and data streams Cross-borders, crosscountries, cross-languages, cross-infrastructure Port of Hamburg is Germany s largest logistics hub Dense hub and railway network in the West of the new Silk Road 14

15 Summary of major achievements in the first half of 2018 Improvement of business results Summary Half-year result fully in line with expectations for 2018 financial year HHLA Port Logistics with slight increases in revenue and operating result Strategically important acquisition of biggest terminal operator in Estonia Transiidikeskuse (TK) closed and integration started Cash flow from investing activities affected by payment for M&A activities Cash flow from financing activities reduced by payment for the acquisition of all remaining minority shares in METRANS, corresponding to approx. 10 % Guidance confirmed: For 2018 HHLA expects a stable business development with a significant increase in operating result 15

16 Business environment in 1H18 Business update and financials Slight slowdown in economic growth; rise in container throughput in Q2 after model update by Drewry Expectations for FY 2018 GDP World % World trade % Macroeconomic environment Global economy with a slight slowdown over the course of 1H18 (Q1: %); but climate indicators keep assuming a strong stimulation for the financial year China: GDP growth on a stable level (Q2: 6.7 % / Q1: 6.8 %) 2 Russia: Upward trend continues at a less dynamic level 1 GDP China % GDP Russia % Ukraine: Recovery burdened by sluggish reform projects 3 World trade slightly below previous years level and market expectations 1 Sources: 1 IMF World Economic Outlook, Update July 2018; 2 National Bureau of Statistics of China Press Release ( ); 3 World Bank Ukraine Economic Update April 2018 Expectations for Q Sector development World throughput % NW Europe % China throughput % Scan. & Baltics % The significant rise in Q2 container throughput development is based partly on the revised Drewry survey model for container handling. Drewry does not calculate impacts from global trade tensions. Global container throughput turned out surprisingly strong (Q2: 6.5 % / Q1: 6.1 %) China still an important driver but in Q2 slightly below expectation (Q2: 4.8 % / Q1: 5.3 %) North West European ports with strong upward trend in Q2 (Q2: 6.1 % / Q1: 3.3 %) Scandinavia & Baltics outperformed European shipping regions (Q2: 12.9 % / Q1: 14.3 %) with a double-digit growth rate and especially good performance in the Russian Baltic ports Source: Drewry Maritime Research Container Forecaster 2Q 2018, June

17 Financial highlights 1H18 of Port Logistics subgroup Revenue and EBIT increased slightly compared to the very good previous year Business update and financials Revenue million % EBIT 91.4 million % EBIT margin 14.8 % -0.1 pp Profit after tax and minorities 47.3 million -1.6 % ROCE 15.3 % -0.3 pp Operating cash flow 87.4 million % 17

18 Throughput and transport development Container throughput slightly rising while container transport is declining as expected Business update and financials Container throughput in thousand TEU % % % 1H17 2H17 1H18 Slight increase in container throughput mainly driven by Far East volumes rising by 4.1 % Decrease in lower-margin feeder volumes by 4.8 %; feeder ratio 23.6 % (-1.4 pp) HHLA terminals in Hamburg recorded a rise of 0.9 % HHLA terminal in Odessa strongly up by 8.3 % Container transport in thousand TEU % % % Container transport temporarily affected by the planned realignment of polish rail traffic as expected Rail transportation slightly down by 1.7 % to 558 thousand TEU Road-bound transportation fell by 12.0 % to 155 thousand TEU affected by less transfers in the Hamburg area 1H17 2H17 1H18 18

19 Container segment Revenue exceeds container throughput growth EBIT in line with previous year Business update and financials Revenue 1H17 1H % 372,3 380,3 103,8 104,7 m /TEU /TEU m EBIT 1H17 1H % 68,2 68,2 19,0 18,8 m /TEU /TEU m OpEx 1H17 H % 304,1 312,1 84,8 86,0 m /TEU /TEU m EBIT margin 1H17 1H pp 18,3% 17,9% Revenue increase slightly stronger than rise in throughput, impacted by increase of rail-related cargo, decrease in lower-margin feeder volumes and slightly lower storage fees as a result of improved schedule reliability of overseas services OpEx rise as a result of Fluctuating and uneven capacity utilisation within the Hamburg operating facilities due to ship delays and resulting necessary use of additional resources EBIT on previous year s level EBIT margin almost on previous year s level 19

20 Intermodal segment Revenue stable on previous year s level EBIT with double-digit growth Business update and financials Revenue 1H17 1H % 206,2 208,0 m m EBIT 1H17 1H % 38,6 34,9 OpEx 1H17 H % 171,4 169,4 m m EBIT margin 1H17 1H pp 16,9% 18,6% Revenue almost in line with previous year and significantly better than transport volume as a result of slightly increased share of rail transportation and longer transport distances Strong EBIT increase due to declining material costs positive change in the mix of transport relations efficiency gains in the network due to the terminal in Budapest Outstanding EBIT margin level sustained m m 20

21 Logistics segment Business update and financials Positive EBIT development Revenue 1H17 1H % 24,7 25,2 EBIT % 1H17 H118 Revenue growth mainly driven by strong volume development in vehicle logistics 0,7 1,0 Positive EBIT contribution increased, especially attributable to vehicle logistics m m m m At-equity earnings: affected by a challenging market environment but earnings contribution remained positive At-equity earnings 1H17 1H % 2,6 2,3 m m 21

22 Earnings bridge Net profit almost on the very high level of 1H17 minorities down due to increased METRANS stake in million, figures of Port Logistics subgroup (change vs. 1H17 in million) Business update and financials 91,4 2,7 9,0 (- 0.3) (+ 2.1) 21,4 EPS ,4 (+ 0.4) 47,3 (- 1.3) Net financial expenses increased due to lower interest income Effective tax rate at 25.1 % almost on previous year s level and in line with expectations Minorities decreased after acquisition of remaining minority shares of METRANS % -1.6 % EBIT At-equity earnings Net financial expenses Tax Minorities Net profit after minorities 22

23 Cash flow Financial funds sufficient to finance ongoing business Business update and financials Cash flow from operating activities 1H17 1H18 Cash flow from investing activities 1H17 1H18 Cash flow from financing activities 1H17 1H18 139,2 m m m m 87,4-54,1-86,1 m m -78,9-132,7 Significant decline in operating cash flow primarily due to increased trade receivables and higher other financial receivables Main impact: settlement of TK acquisition M&A activities: settlement for remaining minority stake in METRANS (Q1 2018) Organic capex: outflow partly offset by debt funding Financial funds as of 30 June 2018: million (30 June 2017: million) 23

24 Macroeconomic and sector outlook Business forecast 2018 Macroeconomic forecast remains stable throughput expectation for 2018 with positive dynamics GDP World % GDP China % World trade % GDP Russia % Macroeconomic outlook 2018 Global GDP is supposed to continue on a stable and sound level World trade assumed to grow slightly slower than lastly expected in April (forecast down by 0.3 pp) IMF confirms estimates for Chinese GDP development at 6.6 % Subdued development leads to downgrade for Euro area by 0.2 pp to 2.2 % Russian economy is still expected to stabilise on previous year s level Source: IMF World Economic Outlook, July 2018 World throughput % NW Europe % China throughput % Scan. & Baltics % Sector outlook 2018 The significantly more optimistic outlook is based partly on the revised Drewry survey model for container handling. Drewry does not calculate impacts from global trade tensions. Drewry raised the global throughput estimates by 2.0 pp to 6.5 % Slowdown of Chinese volumes expected; downgrade by 0.6 pp to 5.2 % North West Europe supposed to grow stronger than initially expected; forecast revised upwards by 1.4 pp to 4.6 % Scandinavia & Baltics exceeded expectations; forecast doubled from 6.0 % to 12.3 % Source: Drewry Maritime Research Container Forecaster 2Q 2018, June

25 Outlook 2018 confirmed Port Logistics subgroup Business forecast Guidance 2018 Container throughput 7,196 thousand TEU in the region of previous year Container transport 1,480 thousand TEU in the region of previous year Revenues 1,220.3 million in the region of previous year EBIT million significant increase on previous year Capital expenditure million in the range of 200 million * * mainly attributable to the Port Logistics subgroup 25

26 Fact book content Financial overview and history HHLA Port Logistics p. 27 Container segment p. 32 Intermodal segment p. 47 Logistics segment p. 58 Investor presentation August

27 Key figures Financial statement of the Port Logistics subgroup Fact book Overview in million Revenue 1, , , , ,220.3 EBIT Profit after tax and minorities Earnings per share ROCE in % Free cash flow (excl. proceeds from short term deposits) Capex (without Group internal transaction)

28 Outcome Container and Intermodal segments as main pillars, Logistics segment strategically relevant Fact book Overview Performance in 2017 in million Container Intermodal Logistics Share of revenue on subgroup level incl. Holding/Others 60% 33% 4% Revenue EBIT EBIT margin 14.7 % 16.9 % 5.0 % EBIT adjusted* EBIT margin adjusted* 18.0 % 16.9 % 5.0 % * For reorganization of the segment and for harmonization of the pension schemes 28

29 Key figures Balance sheet, assets and liabilities of the Port Logistics subgroup Fact book Overview in million Balance sheet total 1, , , , ,658.9 Non-current assets 1, , , , ,184.6 Current assets Equity ,8 Pension provisions Other non-current liabilities Current liabilities

30 Shareholder structure Listed class A shares Fact book Overview Shareholder structure Class A shares Class S shares 68,4% 31,6% Free and Hanseatic City of Hamburg Free float Free and Hanseatic City of Hamburg (FHH) holds 68.4 % of the listed class A shares Class A shares comprise Port Logistics subgroup (Container segment, Intermodal segment, Logistics segment) Non-listed class S shares comprise Real Estate subgroup Class S shares are not tradable and are held in total by the Free and Hanseatic City of Hamburg (FHH) Group Subgroups Port Logistics Real Estate Segments Container Intermodal Logistics Real estate Shareholder structure Listed Class A shares 31.6 % Free float 68.4 % Free and Hanseatic City of Hamburg (FHH) Non-listed Class S shares 100 % FHH 30

31 Milestones in HHLA Port Logistics' history From port logistics operator to integrated service provider Fact book Overview 1968 The American Lancer, the first full containership calls at the Port of Hamburg 1982 Opening of a HHLA container terminal at O'Swaldkai 1995 HHLA acquires first 25 % of shares in METRANS 2002 Opening of Container Terminal Altenwerder (CTA) 2012 Realignment of Intermodal shareholding 89% stake in METRANS Full control of Polzug 2018 Acquisition of largest container terminal in Estland, port of Muuga, Tallin 2018 et seqq. Investment programme Growth from innovations Growth from M&A 1976 HHLA is setting up HPC Hamburg Port Consulting 1992 HHLA s rail affiliate Polzug sets the first commercial container block train to Eastern Europe rolling 1996 HHLA acquires the container terminal at Tollerort 2007 Opening of a hub terminal in Dunajska Streda and further inland terminals 2018 Merger of METRANS and METRANS Polonia (former Polzug), acquisition of outstanding shares 31

32 Fact book Container segment Investor presentation August

33 Key figures Container segment Fact book Container segment in million Container throughput in thousand TEU 7,500 7,480 6,561 6,658 7,196 Revenues EBITDA EBITDA margin in % EBIT EBIT margin in % Segment assets

34 Growth of global container throughput and GDP Growth multiplier on GDP slowed down substantially since 2012 Fact book Container segment Upswing Dip Recovery New Normal Expectation 20% Ø multiple 2.8x 7.3x 2.5x 1.1x ~ 1.1x 15% 10% 5% 0% [F'cast] 2019 [F'cast] 2020 [F'cast] -5% -10% Global container throughput Global GDP Source: Drewry / IMF 34

35 Ports remain an attractive industry on a new normal level After above average growth dynamics a new momentum has established Fact book Container segment in TEU million Global thereof Asia thereof Northwest Europe Upswing Dip Recovery New Normal Expectation [F'cast] 2019 [F'cast] 2020 [F'cast] CAGR Global Asia NW Europe 12.3% -9.3% 11.8% 3.8% ~ 4 % 14.1% -7.9% 13.4% 4.2% ~ 5 % 9.7% -17.1% 6.4% 2.2% ~ 3 % Source: Drewry / HHLA 35

36 Development of Alliances in Container Shipping Concentration in the shipping industry substantially increased Fact book Container segment 2016 Shipping Lines as of Consolidation since 2016 Q M O3 G6 Consolidation processes Maersk MSC Hamburg Süd* CSCL CMA CGM UASC APL* OOCL Hapag Lloyd MOL** Hyundai M. M. NYK** Slot charter agreement 2M Network OCEAN Alliance Share FE Europe 39% 35% Implications Re-shaping of alliances and cooperation to improve load factor and slot costs Consolidation process in the shipping industry is supposed to be continued Acquisition of OOCL by CSCL closed in August 2018 Perspectives Deployment of largest vessel sizes and focus on calls at gateway ports (hubs) C K Y H E ONE** Cosco Evergreen K Line** Yang Ming (Hanjin***) THE Alliance 25% *** Operating as independent brand *** Merger to Ocean Network Express (ONE) *** Insolvency in % 70.4 % Source: AXS Alphaliner Monthly Monitor, April 2018, HHLA 36

37 Competing ports of the north range Container throughput and market share development Fact book Container segment Container throughput in the North Range million TEU (+ 4.7 % y-o-y) Throughput and market share of HHLA in 2017 in TEU million 39,1 WILHELMSHAVEN 0.6 million TEU ( y-o-y) KIEL CANAL 14,9 8,8 6,9 18 % 46 % 78 % ROTTERDAM 13.7 million TEU ( % y-o-y) BREMEN PORTS 5.5 million TEU (+ 0.5 % y-o-y) HAMBURG 8.8 million TEU (- 1.0 % y-o-y) HHLA in Hamburg 6.9 million TEU (+ 8.3 % y-o-y) North Range German Bay Hamburg HHLA CAGR* 1.2% CAGR* -0.2% CAGR* -1.2% CAGR* +0.1% Throughput and market share of HHLA in 2008 in TEU million ANTWERP 10.5 million TEU (+ 4.1 % y-o-y) Current terminal capacity of North Range ports of ~ 60 million TEU p.a. 1 utilisation stands at ~ 65 % Source: Port Authorities / HHLA 1 Drewry estimates 34,6 15,2 9,7 6,9 20 % 45 % 70 % North Range German Bay Hamburg HHLA * CAGR: , ** North Range Ports (Antwerp, Rotterdam, Hamburg, Bremen Ports incl. Wilhelmshaven) 37

38 Favourable geographical location of Hamburg Still a hub for the major economies of Asia and CEE Fact book Container segment BALTIC SEA / SCANDINAVIA Sea-bound container throughput in Hamburg 2017 by region 53% Asia 10% Baltic Sea 10% Scandinavia 9% Rest of Europe 5% North Amerika 5% Latin Amerika 3% Africa 5% Other countries Source: Hamburg Hafen Marketing e.v. Port of Hamburg: Hub with network Germany s largest logistics hub Europe s largest railway port with dense rail network to CEE and dense feeder network to the Baltics Cost advantages for shipping lines due to central location deep inland Attractive cargo mix Well balanced import/export flows Challenges Potential ASIA / FAR EAST CENTRAL AND EASTERN EUROPE Start of the highly needed Elbe waterway adjustment Underutilized capacities in most North Range ports Planning approval for the Elbe dredging was confirmed by the Federal Administrative Court but needs to be revised Adjustment of the waterway enabling a higher load factor, extended time slots and more flexibility for handling of mega carriers Recovery of the Russian economy 38

39 Far East Transport Chain Hamburg s location offers cost benefits compared to other Nord Range ports Fact book Container segment 700 km = 0.05 per ipad Shanghai <> Hamburg (one-way: ~ 20,375 km) 60 % of costs for about 97 % of total distance No differentiation in freight rates between North Range ports 20 Container = 11,500 ipads Shanghai Hamburg* = 800,- Hamburg Prag* = 520,- 12 Cent per ipad per 21,000 km * as of Dec ,375 km = 0.07 per ipad Hamburg <> Prague (one-way: ~ 700 km) 40 % of costs for about 3 % of total distance Clear differentiation between North Range ports 39

40 Growth in ship sizes Handling of mega carriers (ultra large vessels (ULCV s)) require extra effort Fact book Container segment Ship size development at HHLA container terminals 45% 39% 39% 30% 26% 21% 16% 22% < 6,000 TEU 6,000 to 10,000 TEU 29% 36% 35% 34% 10,000 to 14,000 TEU ULCV calls more than tripled within three years 1% 4% 10% > 14,000 TEU 14% Implications Nautical restrictions tightened by increasing number of mega carriers because of more width and draught Peak load conditions due to narrower time windows require more staff and equipment Capex requirements (suitable quay walls, gantry cranes etc.) ULCV fleet worldwide and order book until 2020 Counteraction in service in order Source: Alphaliner Enhancing service quality by continuous investment in technology and efficiency Launching Feeder Logistics Centre (FLZ) and Nautical Terminal Coordination (NTK) to optimise ULCV and feeder vessel calls Raising attractiveness of HHLA terminals by expanding hinterland network 40

41 Deviations in ship calls per week Peak loads due to bigger ship sizes in a new normal environment Fact book Container segment Development of carrying container ship capacity Ship-size development at HHLA terminals 2007/ Carrying capacity of container ships roughly doubled since 2007/08 max. ~ 9,000 TEU max. 18,000-20,000 TEU 30% 22% 59% 7% 34% 14% 34% < 14,000 TEU 10,000 TEU 6,000 10,000 < 6,000 TEU Inside: 2010 Outside: 2017 Weekly path of HHLA throughput volumes Index (100 = Ø weekly) 130% 120% 110% 100% 90% 80% 70% Standard deviation 2007/08: 8.1 % 2017 : 15.9 % ( % vs. 2007/08) 48 % 26 % 2007/ Mo Tu Wed Thu Fr Sa Su High High weekly average Low Low In 2007/08 load conditions with homogeneous distribution of weekly throughput volumes Nowadays weekly peak load conditions as well as underutilisation has almost doubled Spread between highest and lowest utilization is nearly 85 % higher compared to 2007/08 41

42 Focus on client needs: Mega carrier ready Investments in terminal expansion and process optimisation continued Fact book Container segment HHLA Container Terminal Burchardkai (CTB) Roll-out of 4 automated storage blocks almost completed HHLA Container Terminal Tollerort (CTT) 5 Container gantry cranes for mega carriers Process optimisation Introduction of a trucking appointment system as part of the Fuhre 4.0 measure HVCC coordinates feeder vessels (FLZ), ocean-going vessels (NTK) and barges RaMoNa Coordination and cooperation in shunting operations within the port of Hamburg HHLA Container Terminal Altenwerder (CTA) Extension of the on-dock railway station from 7 to 9 tracks 42

43 Advanced terminal technology High automation level with mega-carrier berths in operation Fact book Container segment HHLA in the Port of Hamburg Market share of 78 % in Hamburg and 18 % in the North Range (2017) State-of-the-art handling technology, innovative IT systems and a high level of automation Three fully equipped berths for the latest generation of ULCV s already in operation at the Container terminals Burchardkai (CTB) and Tollerort (CTT) Further rollout of additional automated block storage capacities at CTB On-dock railway stations at all facilities able to comply with future 740 metre block trains Optimised traffic coordination for an improved cargo flow and terminal access 43

44 State-of-the-art container handling at CTA Maximum efficiency by high degree of automation and compact layout Fact book Container segment 44

45 Elbe waterway adjustment Administrative steps by the public authorities in charge Fact book Container segment Initiation and final plan approval Main hearings on legal objections Sep 2006 Apr 2012 July 2014 ECJ judgement on the EU Water Framework Directive 1 July 2015 Decision on the planning supplement 9 Feb 2017 Plan amendment concluded, objection period expired 27 September 2018 Preparatory work ongoing, call for tenders started Start of dredging March 2019 With today's plan supplement decision, we are creating construction rights for the waterway adjustment which makes the port of Hamburg internationally much more competitive. Dr Peter Tschentscher, Mayor of Hamburg, 23/08/2018 Federal Water and Shipping Authority Federal Administrative Court (FAC) Adjustment of navigation channel European Court of Justice (ECJ) Federal Administrative Court (FAC) Federal Water and Shipping Authority / Hamburg Port Authority Present depth So we have construction rights and begin in the next few days with ordnance exploration and preconstruction measures. All tenders for that have already been completed. The execution can now be assigned directly. Frank Horch, Senator for Economics in Hamburg, 23/08/2018 The plan supplement decisions are a milestone for the Elbe dredging. We can get started right away because we are well prepared. Enak Ferlemann, Parliamentary State Secretary of transport and digital infrastructure, 23/08/2017 Planned depth m tidal dependent / m tidal independent, widening boxes m tidal dependent / m tidal independent, widening boxes Enabling a higher load factor, extended time slots and more flexibility for mega carriers There is legal certainty. This means irrevocable: the adjustment of the navigation channel comes. Olaf Scholz, at this time Mayor of Hamburg, February

46 Elbe waterway adjustment Passing Box Fact book Container segment 46

47 Fact book Intermodal segment Investor presentation August

48 Key figures Intermodal segment Fact book Intermodal segment in million Container transport in thousand TEU 1,172 1,283 1,318 1,408 1,480 Revenues EBITDA EBITDA margin in % EBIT EBIT margin in % Segment assets

49 EBIT more than tripled since realignment Strategic decision to invest in own assets is a prerequisite to boost utilization and efficiency Fact book Intermodal segment CAGR 2007* % CAGR % EBIT & EBIT margin in million % 17% 16% Realignment 13% 12% 8% % 27 8% % 17% 15% 14% Since realignment the operating result (EBIT) more than tripled compared to prior years and significantly outperformed volume and revenue growth Strategic decision to invest in own assets is a prerequisite to boost utilization and efficiency 2007* 2008* 2009* 2010* 2011* CAGR % 12% Subgroup EBIT 15% Subgroup EBIT * pro forma: applying the ownership structure end of % Subgroup EBIT Outlook 2018 Significant increase on previous year (2017: 70 million) 49

50 Intermodal network Coverage and high capacity utilisation matter as important prerequisite for growth going forward Fact book Intermodal segment Four hub terminals in the Czech Republic, Slovakia and Hungary Six inland terminals in the Czech Republic, Slovakia and Austria Around 450 regular train connections per week Independent services in the D-A-CH region since 2012 Projects 2018: Integration of METRANS Polonia (former POLZUG) Acquisition of remaining stake in METRANS Further targets: Increasing the frequency of existing connections / providing new profitable connections on demand 50

51 Focussed capex for higher value added Approx. 278 million investment in own assets since 2012 Fact book Intermodal segment >2,500 Hub and inland terminals in the hinterland Multi-system locomotives and shunting engines Own designed light-weighted waggons Investments in million 46,9 52,3 77,1 44,1 45,7 Focus of investments in 2017 on commissioning the inland terminal in Budapest as well as the purchase of locomotives and waggons in line with transport volume development 12,

52 The HHLA on-dock rail terminals Fact book Intermodal segment 9 sidings suitable for trains >700 m 4 RMGs (half-automated) Upgrading completed Biggest container rail terminal in Europe 8 sidings over 700 m long 4 RMGs Upgrading underway 5 sidings over 700 m long 3 RMGs Upgrading according to needs 52

53 Value drivers: Differentiating know-how Our know-how is your profit Fact book Intermodal segment Experienced management with entrepreneurial passion and incentive structures Engaged and locally well connected sales force Innovative design of transport system and terminal layout that is customized on the special needs of container transportation State-of-the-art equipment with added value as a result of own inventions and design 53

54 The hub and shuttle system Every port is linked with a network of hubs and inland terminals Fact book Intermodal segment System success derives from a transport design that involves hinterland hubs and shuttle trains plus comprehensive monitoring of the transport and logistics chain between the seaport and the hinterland customer 54

55 Value drivers: Service excellence Intelligent terminal layout Fact book Intermodal segment Highly efficient terminal layout, e.g. 12 trains can be handled at the same time in Prague terminal CEE terminals operate 24/7/365 Inland hub terminals offer high level of value added service like repair services for containers and on-site customs services Offices in the ports of Hamburg, Bremerhaven, Koper and Istanbul 55

56 Value drivers: Equipment Fact book Intermodal segment Own waggon design for customized container transportation Own locomotives enhance the production quality and improve cost efficiency Own shunting locomotives with state-of-the-art technology More than own 2,500 waggons Own design and development of light-weighted waggons with modern braking system Optimal distribution 92 containers fit on the standard maximum length of 610 m in CEE 108 containers fit on the standard maximum length of 720 m in WE Overall weight of the container flat waggon is approximately 30 % lighter than the normal equipment in Europe Metrans owns 30 TRAXX F140 MS locomotives from Bombardier Model boasts 7,616 hp and pulls trains weighing up to 2,200 tones Multi-system locomotive can be deployed in seven different electricity grids used all over Europe since it can be operated using both alternating and direct current No locomotive changes at each border saves time and costs and ensures a high degree of reliability Next innovation driver: shunting locomotives with hybrid technology Reduction of fuel consumption by up to 50 % 56

57 Key figures Logistics segment Fact book Logistics segment in million Revenues EBITDA EBITDA margin in % EBIT EBIT margin in % At-equity earnings Segment assets

58 Investor presentation August

59 Financial calendar / IR contact Financial calendar March 2018 Annual Report 2017 Analyst Conference IR contact Phone: Fax: investor-relations@hhla.de Web: 15 August 2018 Interim Statement January - March 2018 Analyst Conference Call 12 June 2018 Annual General Meeting (AGM) Online Annual Report 2017 HALF-YEAR FINANCIAL REPORT JANUARY TO JUNE August 2018 Half-Year Financial Report January - June 2018 Analyst Conference Call 13 November 2018 Interim Statement January - September 2018 Analyst Conference Call 59

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