HAMBURGER HAFEN UND LOGISTIK AG Investor Presentation

Transcription

1 HAMBURGER HAFEN UND LOGISTIK AG Investor Presentation UniCredit / Kepler Cheuvreux 16 th

2 Disclaimer 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 Agenda Company Profile and Strategy Business Update and Financials 9M 2016 Outlook

4 A Leading Port and Transport Logistics Group Segments of the listed Port Logistics subgroup Company Profile and Strategy Integrated container handling, Intermodal and logistics services along the transport chain between the overseas port and its hinterland Container segment Container handling Container transfer and storage Value-added container services (e.g. repair, maintenance) Total revenue billion Share of revenue 675 million 61% Intermodal segment Rail- and road-bound transport services into the ports hinterland Loading/Unloading of carriers Operation of inland terminals Share of revenue 364 million 33% Logistics segment Special seaport handling of bulk cargo, fruit, RoRo, ConRo Consulting & training Warehousing & contract logistics Handling of cruise ships Share of revenue 65 million 6% 4

5 Reassessment of Geographical Location of Hamburg Still a hub for the major economies of Asia and CEE? Company Profile and Strategy Sea-bound container throughput 2015 of HHLA by region ASIA / FAR EAST 53% Asia 11% Baltic Sea 11% Scandinavia 8% North America 7% South America 5% Rest of Europe 3% Africa 2% Other countries BALTIC SEA / SCANDINAVIA CENTRAL AND EASTERN EUROPE Facts about the Port Germany s largest logistics hub Europe s largest railway port with dense rail network to CEE Cost advantages for shipping lines due to central location deep inland Attractive cargo mix: High share of local cargo due to populous and economically strong Hamburg region; well balanced import/export flows; dense feeder network to the Baltic Sea Current market position of the Port Delayed ruling on the highly needed Elbe waterway adjustment, poor volume development into the Baltic Sea (sanctions against Russia) and underutilized capacities in most North Range ports limit the market potential but Final hearing on the planning supplement decision in December 2016 in front of the Federal Admin Court Adjustment of the waterway enabling a higher load factor, extended time slots and more flexibility for handling of ULCV s Lifting of economic sanctions against Russia (at least gradually) possible 5

6 Advanced Terminal Technology High automation level with mega-ship berth in operation Company Profile and Strategy Market share of 73 % in Hamburg and 18 % in the North Range State-of-the-art handling technology, innovative IT systems and a high level of automation Modern handling facilities for the latest generation of ULCV s already in operation at CTB Further gantry cranes for handling of upcoming 20 TTEU ULCV ordered and assembled for facilities at CTB and CTT Further rollout of additional automated block storage capacities at CTB until 2017 Optimised traffic coordination for an improved cargo flow and terminal access 6

7 Investments for Higher Value Added Company Profile and Strategy 13 hinterland terminals, 52 locomotives and more than 2,000 wagons Hub and inland terminals in the hinterland Multi-system locomotives and shunting engines Light-weighted wagons with modern braking system Investments in million Approx. 190 million investment in own terminals and rolling stock since Total More than 53 % of subgroup investments in 2015 was spent on Intermodal segment 7

8 Intermodal Network Company Profile and Strategy High degree of own traction in the hinterland raises level of value added High-frequency shuttle train connections to all major economic centres in the ports hinterland 13 own well located inland hub terminals with innovative design and technology More than 2,000 own lightweighted wagons with modern braking system and more than 50 own locomotives to further enhance product quality and improve cost efficiency Own repair and maintenance facilities More than 450 regular connections per week, thereof the majority to CEE 8

9 Company Profile and Strategy Successfully Implemented Diversification Strategy Intermodal contributes significantly to earnings and stability of the subgroup Transport volume in TTEU 1,172 CAGR % 1,283 1,318 Revenue in million CAGR % EBIT and EBIT margin in million CAGR % 55.2 Segment assets and ROCE in million % 7.8 % 15.2% 7.8 % 8.7 % 15.7%

10 Challenges and Measures Taking opportunities in a changing market environment Company Profile and Strategy Current challenges Worldwide slowdown of growth in the economy, trade and container handling Structural changes in the Chinese economy Ongoing economic crises in Russia and Ukraine Intensified competition between ports in the North, Baltic and Mediterranean Sea Realignment of alliances between shipping liners Continued peak load conditions due to further delay of dredging the river Elbe and ship size growth Further continuing infrastructure deficits Measures Focusing on activities with high value added and profitability Ship size-related expansion of our container terminals Productivity gains by further automation and further optimisation of processes as well as improvement of transport coordination Continued growth in our Intermodal activities Increasing customer satisfaction by outstanding product quality and reliability Exploiting horizontal growth opportunities in dynamic markets and business areas 10

11 Strategic Focus of HHLA Company Profile and Strategy Further diversification to reduce one-sided dependencies and risks Maintenance and expansion of our market leadership in Hamburg Further network and terminal expansion of our Intermodal companies Accelerated horizontal growth by expanded regional and product strategy A leading port logistics operator in Europe turns into a leading European port and transport logistics Group 11

12 Agenda Company Profile and Strategy Business Update and Financials 9M 2016 Outlook

13 Business Update and Financials 9M16 Business Environment Subdued global growth continuing Macroeconomic development Global economy: Muted expectations for 3Q16 after a weaker than expected growth in 1H16 1 China: GDP growth on a stable level at 6.7 % y-o-y in 3Q16 2 Russia: Negative trend weakens further (2Q16: % y-o-y) 3 Ukraine: Recovery continues (2Q16: % y-o-y) 4 World trade: Still weak and well below expectations 1,5 Source: 1 IMF World Economic Outlook October Reuters, Press Release IfW Weltkonjunktur im Herbst September Weltbank Ukraine Economic Update September CPB World Trade Monitor July Drewry Maritime Research Container Forecaster Q3/2016 Sector development 6 Global container throughput: After a first half-year well below expectations, economic indicators show a volume upturn in 3Q16 of 2.1 % y-o-y China: Volume growth in 3Q16 stabilises at 2.8 % y-o-y North-West Europe: Recovery continues with an expected growth of 2.1 % y-o-y in 3Q16 Scandinavia/Baltic region: After a gentle recovery in 1Q16 volumes are slightly shrinking again (3Q16: % y-o-y) 13

14 Revenue and EBIT Slightly Above Previous Year Restructuring expenses largely compensated by a one-off gain in 3Q16 Key Figures 9M16 of the Port Logistics Subgroup Business Update and Financials 9M16 Revenue in million M % 9M16 EBIT in million M % 9M16 Slightly positive revenue growth mainly due to the volume-related revenue increase in the Intermodal segment EBIT-burdening restructuring expenses occurred in 2Q16 were largely offset by a one-off gain for the early termination of a contract for a leased area in 3Q16 EBIT-margin of 13.6 % above prior-year s figure (9M15: 13.1 %) Free Cash Flow * in million % 88.6 ROCE in % pp Free cash flow clearly above prior year mainly due to lower tax payments, an increase in trade liabilities and lower cash out for investments on the reporting date ROCE slightly above previous year and still on above-average level 9M15 9M16 * Without proceeds from short-term deposits 9M15 9M16 14

15 Throughput and Transport Development Upward trend in container throughput volumes in 3Q16 Business Update and Financials 9M16 Container throughput in TEU million 1,624 1,715 3Q % 3Q % 5,027 4,924 9M15 9M16 Container throughput still declining y-o-y, but with an upward trend in 3Q16 Slight recovery of Far East volumes in 3Q16, though cumulated still below previous year (9M16: % y-o-y) Recovery of Russian feeder volumes continues (9M16: % y-o-y) Ukraine: recovery continues (CTO 9M16: % y-o-y) Container transport in TEU thousand % % 1,055 Sustainable growth of container transport in a highly competitive market Mainly driven by growth in rail transportation of 7.3 % y-o-y to 818 thousand TEU Road transport volumes improved slightly to 237 thousand TEU (+ 1.3 % y-o-y) 3Q15 3Q16 9M15 9M16 15

16 Container Segment Business Update and Financials 9M16 EBIT up as a result of higher revenues per TEU and stable unit costs Revenue % M M16 Volume-related revenue decline Average revenue per TEU up by 0.9 % y-o-y despite a slight increase in feeder ratio of 23.5 % (9M15: 23.1 %) m /TEU /TEU m OpEx (incl. D&A) % M M16 OpEx could be reduced in line with volume decline Personnel cost per unit remain stable y-o-y, despite wage tariff increases m /TEU /TEU m EBIT % M M16 EBIT up as a result of higher revenue per TEU combined with stable unit costs EBIT margin up to 16.9 % correspondingly (9M15: 16.1 %) m /TEU /TEU m 16

17 Intermodal Segment Dynamic growth in volumes, revenue and EBIT Business Update and Financials 9M16 Revenue % M15 9M16 Revenue increase slightly above volume growth Mainly driven by a higher share of rail transportation of 77.5 % (9M15: 76.5 %) m m OpEx (incl. D&A) 9M % M16 Persistent cost development below volume trend Own traction and a higher train utilisation decisive for productivity gains m m EBIT 44.0 * 16.1% % 9M15 9M % EBIT margin Substantial EBIT increase mainly driven by volume growth, well balanced import and export cargo mix and a higher train utilisation EBIT margin up again to 17.3 % (+ 1.2 pp) m m * 9M15 positive affected by a one-off gain of 2.5 million (sale of a property) 17

18 Logistics Segment Business Update and Financials 9M16 Restructuring expenses largely compensated by a one-off gain in 3Q16 Revenue % M15 9M16 Revenue decline due to gradual reduction of project and contract logistic activities as well as project-related lower revenue of consulting activities m m EBIT 9M15 m m M16 Negative one-off expenses in 2Q16 caused by the almost completed restructuring were largely offset by a one-off gain for the early termination of a lease contract in 3Q16 neg Operating loss increased, mainly due to weak results of consulting and vehicle logistics Earnings from associates (using the equity method) % 3.0 9M15 9M16 At-equity companies showed an inconsistent performance However, earnings from associates went up 8.1 % to 3.0 million m m 18

19 Earnings Bridge Business Update and Financials 9M16 Net profit increased mainly due to higher EBIT and lower negative F/X effects in million; figures of the Port Logistics subgroup (change vs. 9M15) EPS % (+ 0.5) (+ 0.3) (+ 4.2) 22.4 (- 3.7) 53.8 (- 0.9) At-equity Net interest Considerably earnings slightly expense almost lower negative Effective tax rate % above previous year's level on previous year s level F/X effect ( % y-o-y) up by 1.5 pp to 25.1 % Minorities up by 4.0 % % EBIT Earnings from associates Net interest income F/X translation Tax Minorities Net profit 19

20 Outlook 2016 Adapted due to unplanned one-off gain and tightened at the top end Outlook 2016 Outlook 2015 Compared to previous year s level 2016e 11 August e 10 November 2016 Adaption vs. August Container throughput 6.6 million TEU Previous year s level Previous year s level Container transport 1.3 million TEU Slight increase Moderate increase Revenue 1.1 billion Previous year s level Previous year s level EBIT 141 million In a range between 100 and 130 million incl. one-off consolidation expenses of about 15 million In a range between 135 and 145 million incl. all one-off effects in the Logistics segment Investments 145 million In the region of 180m Almost all of which is allocated for the Port Logistics subgroup In the region of 180m Almost all of which is allocated for the Port Logistics subgroup 20

21 Appendix 21

22 Appendix Key Takeaways Vertical integration Location Business model of vertical integration with a high level of value added services enables optimisation of all processes along the logistics chain between the seaport and the European hinterland Strong natural catchment area due to favourable geographic location of Hamburg as most easterly North Sea port which makes it the ideal hub for the entire Baltic region and for hinterland traffic to and from CEE Technology High level of automation, advanced handling technology and innovative IT systems ensure operational excellence and data exchange with customers Intermodal strategy Financial stability Cost leadership in Intermodal rail services due to own assets and dominant market positions Solid financial fundament with capacity and productivity reserves to maintain our position as a leading port and transport logistics group and to achieve a sustainable growth in our enterprise value 22

23 Appendix Business Model Value creation based on vertical integration 23

24 Key Figures Financial statement of the Port Logistics subgroup Appendix in million Revenues 1, , , ,111.0 EBIT 172.8* Profit after tax and minority interests 66.4* Earnings per share in 0.95* ROCE in % Free Cash Flow Capex** Restated figures: 2012 from application of IAS 19 (revised 2011) / 2013 from application of IFRS 11 * incl. one-off gain of 17.6 million due to realignment of Intermodal segment ** without Group internal transaction 24

25 Key Figures Balance sheet, assets and liabilities of the Port Logistics subgroup Appendix in million Balance sheet total 1, , , ,576.4 Non-current assets 1, , , ,138.7 Current assets Equity Pension provisions Other non-current liabilities Current liabilities Restated figures: 2012 from application of IAS 19 (revised 2011) / 2013 from application of IFRS 11 25

26 Key Figures Container segment Appendix in million Container throughput in TTEU 7,183 7,500 7,480 6,561 Revenues EBITDA EBITDA margin in % EBIT EBIT margin in % Segment assets Restated figures: 2012 from application of IAS 19 (revised 2011) / 2013 from application of IFRS 11 26

27 Key Figures Intermodal segment Appendix in million 2012* Container transport in TTEU 993** 1,172 1,283 1,318 Revenues EBITDA 59.5* EBITDA margin in % 19.8* EBIT 41.3* EBIT margin in % 13.8* Segment assets Restated figures: 2012 from application of IAS 19 (revised 2011) / 2013 from application of IFRS 11 * incl. one-off gain of 17.6 million due to realignment of Intermodal segment ** container transport from continued activities 27

28 Key Figures Logistics segment Appendix in million Revenues EBITDA EBITDA margin in % EBIT EBIT margin in % At-equity earnings Segment assets Restated figures: 2012 from application of IAS 19 (revised 2011) / 2013 from application of IFRS 11 28

29 Key Performance Indicators Solid financial fundament Appendix Equity development in million Equity Equity ratio Self-funded investments in million Operating cash flow Investing cash flow (without proceeds from short term deposits) % 31.7% 34.4% 29.9% M M16 Net debt excl. pensions in million Net debt without pensions Net debt / EBITDA Net debt incl. pensions in million Net debt Net debt / EBITDA x 1.9x 2.1x x 0.7x 0.3x 0.6x 0.8x M M16 29

30 Key Performance Indicators Solid financial fundament Appendix Profit after tax & minorities & EPS in million Profit after tax & minorities EPS Ø Capital employed & ROCE in million Ø capital employed ROCE , , , , % 13.6% 12.4% 13.3% M M16 Operating cash flow & OCF per share in million Operating cash flow OCF per share Dividend development in Dividend per A class share Dividend yield as of Payout ratio % 65 % % 70 % % 70 % M

31 Growth of Global Container Throughput and GDP Growth multiplier on GDP slowed down Appendix Upswing Dip Recovery New Normal Expectation 20% Ø multiple 2.8x 7.3x 2.5x 1.2x ~ 1.0x 15% 10% 5% 0% [F'cast] 2017 [F'cast] 2018 [F'cast] 2019 [F'cast] -5% -10% Global container throughput Global GDP Source: Drewry, IMF 31

32 CAGR Ports remain an attractive growth industry After above average growth dynamics a new momentum has established Appendix in TEU million 800 Global thereof Asia thereof Northwest Europe Source: Drewry, HHLA Upswing Dip Recovery New Normal Expectation [F'cast] 2017 [F'cast] 2018 [F'cast] Global 12.3% -9.3% 11.8% 4.0% 3 4 % Asia NW Europe 14.1% -7.9% 13.4% 4.4% 4 5 % 9.7% -17.1% 6.4% 1.5% 2 3 % 32

33 Deviations in ship calls per week Peak loads due to bigger ship sizes in a new normal environment Appendix 2007/ Carrying capacity of container ships roughly doubled since 2007/08 max. ~ 9,000 TEU max. ~ 18,000 TEU Weekly Path of HHLA Throughput Volumes Index (100 = Ø weekly) 120% 110% 100% 90% 80% 70% standard deviation: 2007/08: 8.1% 2015 : 13.3% (+ 64.1% vs. 2007/08) 37 % 26 % 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 roughly 50 % higher compared to 2007/ /08 33

34 Growth in Ship Sizes Handling of ultra large container vessels (ULCV) require extra effort Appendix Ship size development at HHLA container terminals % 39% 34% Fourfold increase of ULCV calls within five years 40% ULCV ULCV fleet fleet worldwide worldwide and and order order book book until until in service in service on on order order Unrestricted fleet growth continues % 7% < 6,000 TEU 6,000 to 10,000 TEU > 10,000 TEU Source: AXL Alphaliner, December 2016 Implications Nautical restrictions tightened by increasing number of ULCV 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.) Counteraction 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 34

35 Development of Alliances in Container Shipping Concentration in the shipping industry substantially increased Appendix Shipping Lines 2M O3 G6 C K Y H E Maersk MSC CSCL CMA CGM UASC APL OOCL Hapag Lloyd NYK / MOL Hyundai M. M. Cosco Evergreen K Line Yang Ming Hanjin* 2M Network Slot charter agreement subject to approval by the regulation authorities OCEAN Alliance subject to approval by the regulations authorities THE Alliance subject to approval by the regulations authorities Share FE Europe 37% 34% 22% Implications Consolidation process in the shipping industry is supposed to be continued Re-shaping of alliances and cooperation to improve load factor and slot costs Perspectives Deployment of largest vessel sizes and focus on calls at gateway ports (hubs) Consolidation processes * Under court receivership since 31 August 2016 Source: AXS Alphaliner Monthly Monitor, December 2016, HHLA 35

36 Competing Ports of the North Range Container throughput and market share development Appendix Container throughput million TEU (- 0.5 % y-o-y) NORTH SEA DENMARK 2015: Throughput and market share of HHLA in million TEU 36.7 BREMEN PORTS 5.6 million TEU (- 4.3 % y-o-y) KIEL CANAL 17.4 % % % 6.3 BELGIUM THE NETHERLANDS WILHELMSHAVEN 0.4 million TEU (pos. y-o-y) ROTTERDAM 12.2 million TEU (- 0.5 % y-o-y) ANTWERP 9.7 million TEU (+ 7.5 % y-o-y) GERMANY HAMBURG 8.8 million TEU (- 9.3 % y-o-y) HHLA in Hamburg 6.3 million TEU ( % y-o-y) Current terminal capacity of North Range ports** of ~ 55 million TEU p.a.*** utilisation stands at ~ 67 % *** CAGR: *** North Range Ports (Rotterdam, Hamburg, Bremen ports, Antwerp) incl. Wilhelmshaven *** Source: AXS Alphaliner, own estimates North Range German Bay Hamburg HHLA CAGR* 0.8% % CAGR* - 0.4% % CAGR* - 1.4% 2008: Throughput and market share of HHLA in million TEU % CAGR* - 1.0% 6.9 North Range German Bay Hamburg HHLA 36

37 Short Ways Less Costs Appendix Hamburg's location offers cost benefits compared to other Nord Range ports Shanghai <> Hamburg (one-way: ~20,375 ~20,375 ~ km) 20,375 km) km) ~70% ~70% + of costs of % costs of for costs for about about for 97% about 97% of total of 97 total % distance of distance total distance No No No differentiation in freight in freight in freight rates rates rates between between North North North Range Range ports ports Range ports Hamburg <> Prague Prague (one-way: ~690 ~ ~690 km) km) ~30% + ~30% % of costs of of costs for about for about 3% of 3% 3 total % of of total distance total distance Clear Clear differentiation between between North North Range Range ports ports ports 37

38 State-of-the-Art Container Handling at CTA Maximum efficiency by high degree of automation and compact layout Appendix 38

39 Strengthening Hinterland Network With Own Assets Well located inland hub terminals offer high level of value added services Appendix 39

40 HHLA in the Port of Hamburg Appendix HHLA REAL ESTATE FISCHMARKT HHLA REAL ESTATE SPEICHERSTADT HHLA CONTAINER TERMINAL BURCHARDKAI HHLA REAL ESTATE DRADENAU HHLA CONTAINER TERMINAL TOLLERORT HHLA REAL ESTATE Tollerort HHLA LOGISTICS O SWALDKAI HHLA REAL ESTATE SCHUPPEN 59 HHLA LOGISTICS HANSAPORT HHLA REAL ESTATE VOLLHÖFENER WEIDEN 2. GHL HHLA CONTAINER TERMINAL ALTENWERDER 40

41 Elbe Waterway Adjustment Administrative steps by the public authorities in charge Appendix Initiation of plan approval process Final plan approval Main hearings on legal objections Proceedings stayed pending a decision by the ECJ ECJ judgment on the EU Water Framework Directive Submission of planning supplement decision Final hearing on the planning supplement decision Final decision on the planning supplement Sep 2006 Apr 2012 July Oct July March Dec Feb 2017 Federal Water and Shipping Authority & City State of Hamburg Federal Water and Shipping Authority Federal Administrative Court (FAC) European Court of Justice (ECJ) Federal Water and Shipping Authority Federal Administrative Court (FAC) Adjustment of navigation channel m tidal dependent / m tidal independent, widening boxes Enabling a higher load factor, extended time slots and more flexibility for mega carriers 41

42 Appendix Elbe Waterway Adjustment Passing Box 42

43 Financial Calendar IR Contact Appendix 30 March 2017 Annual Report 2016 Press Conference, Analyst Conference Phone: Fax: May 2017 Interim Statement January - March 2017 Analyst Conference 21 June 2017 Annual General Meeting (AGM) 10 August 2017 Half-Year Financial Report January - June 2017 Analyst Conference 14 November 2017 Interim Statement January - September 2017 Analyst Conference Web: investor-relations@hhla.de 43

44 HAMBURGER HAFEN UND LOGISTIK AG Investor Presentation Annual Report Interim Statement January to September