HAMBURGER HAFEN UND LOGISTIK AG Handelsbanken s 8 th Transport Seminar Copenhagen, 19 September 2013 Handelsbanken s Commerzbank Sector 8th Transport Conference Seminar Week August Hamburger 2013 Hafen Hamburger und Logistik Hafen AGund Logistik AG 1
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
Agenda Company profile and strategy Business development Financial performance Outlook 3
A leading port logistics company Company profile & strategy Container Intermodal Logistics - Container handling - Container transfer and storage - Value-added container services (e.g. repair, maintenance) - Rail- and road-bound transport services into the ports hinterland - Loading/Unloading of carriers - Operation of inland terminals - Special seaport handling of Bulk cargo, Fruit, RoRo, ConRo - Consulting & training - Warehousing and contract logistics - Handling of cruise ships Split 2012 (HHLA Group) By revenue 1,128.5 million By employees 4,915 Holding / Other / Real Estate 3 % Logistics 8 % Container 62 % Intermodal 27 % Holding / Other / Real Estate 13 % Logistics 6 % Container 60 % Intermodal 21 % 4
Business model Growth potential and value creation based on vertical integration Company profile & strategy 5
Connecting emerging markets Favourable geographical location as most easterly North sea port Company profile & strategy FAR EAST / ASIA Strong and long-standing trade relations BALTIC SEA / EASTERN EUROPE Dense feeder connections via the Kiel canal CENTRAL AND EASTERN EUROPE Extensive rail network with own block trains and inland terminals Hamburg: interface with network Links two of the most important emerging markets in the world economy: Asia and Eastern Europe Cost advantages due to central location deep inland Highly efficient infrastructure with excellent hinterland connections to Central and Eastern Europe Volume data Container throughput up 6.8 % to 3,757 TTEU outperforming the market trend in the North range Container transport of continued activities notably up 21.8 % 6
Split of seaborne container trade Seaborne container throughput 1HY2013 of HHLA by region Company profile & strategy Other countries 2 % Africa 2 % South America 5 % North America 7 % Rest of Europe 4 % Scandinavia 12 % Asia 52 % A leading port operator in Europe for Asia Asia traffic accounted for 52 % of total, up 7,6% The leading port in Europe for the Baltics Baltic Sea traffic achieved a volume share of 28 %, up 11,4% Eastern Europe (Baltic rim) 16 % 7
Agenda Company profile and strategy Business development Financial performance Outlook 8
Business environment January to June 2013 Main developments Global Economy Port Logistics HHLA Global economic output and world trade volume have stabilised on a low level GDP increase in China still remained comparatively flat in the second quarter Growth dynamics in CEE outperformed recessive eurozone, but underperformed year-on-year Slight upswing of German economy despite a loss in exports Global GDP and container throughput still developing only on 1:1 ratio Modest increase in worldwide container throughput despite slight decline in North range ports Still tense situation of shipping lines due to overcapacities Attractiveness of logistics location Hamburg burdened by continuing delayed dredging of the navigation channel of the river Elbe and temporary operation restrictions on Kiel canal Reorganisation of biggest facility in Hamburg Extra effort on increasing peak load conditions No scope for passing on cost inflation Successful expansion of Intermodal network enforced with start-up costs Negative impact of flooding in May and June on Intermodal activities 9
Main developments Growth in ship sizes Handling of ultra large container vessels (ULCV) require extra effort Ship size development at HHLA container terminals FY2010 Q2 2013 ULCV fleet worldwide and order book until 2015 in service on order Doubling of ULCV until 2016 59% 49% Tripling of ULCV within three years 254 +27 296 +4 300 34% 31% 162 +38 200 +54 21% 7% <6,000 TEU 6,000 to 10,000 TEU >10,000 TEU (ULCV) July 2013 2013 2014 2015 2016 Source: alphaliner 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 Expanding Feeder Logistics Centre (FLZ) to optimise and accelerate feeder handling Raising attractiveness of HHLA terminals by expanding hinterland network 10
Main developments Development of Container Terminal Burchardkai Modernisation and expansion of the biggest facility CTB in Hamburg Background Modernisation and expansion started 2004 Investment until June 2013 > 400 million Capacity raised by more than 50% Conversion during on-going operations State as of June 2013 Capital expenditure highly related to ship size development (e.g. new gantry cranes) Scalable roll-out of automated block storage area in line with growth For the time being parallel operation of conventional and semi-automated system Organisational adjustments in progress Target productivity not reached yet Current peak load conditions hamper cost structure, mainly personnel expenses 11
Intermodal network further expanded Systematic pursuit of Intermodal strategy Main Developments New hub terminal in Ceska Trebova Start-up phase in January, opening May 2013 Second Czech hub opens up new destinations in the South-East of Czech Republic, Slovakia, Hungary and Austria for German seaports Handling around 100 trains/week (capacity up to 150 trains/week) Storage capacity: 4,500 TEU Investment volume approx. 20 million Selective connections trains per week // one direction Hamburg Prague 59 Hamburg Ceska Trebova 29 Ceska Trebova Bremerhaven 13 Hamburg Munich 12 Hamburg Leipzig 14 Hamburg Poznan 22 Poznan Gdynia 6 Adriatic trains 34 Intermodal strategy Well located hub terminals to serve a network of destinations with enhanced productivity Direct and shuttle trains to boost the reliability of railway transportation Own assets of HHLA subsidiaries reduce costs and improve efficiency by controlling the complete organisation of the entire logistics chain 12
Agenda Company profile and strategy Business development Financial performance Outlook 13
Financial Performance Revenue base with double-digit margins Subgroup Port Logistics Revenue, EBIT (in million) and EBIT margin (in %) EBIT EBIT margin 12.7% -25.9% 8.4% 14.2% -7.5% 1,299.2 1,299.2 1,152.4 1,152.4 962.9 962.9 1.042.8 1.042.8 1,190.6 1,190.6 1,101.2 1,101.2 24.0% 24.0% 26.3% 26.3% 561.3 561.3 * EBIT 2012 including impact of realignment (restructuring and deconsolidation effects) 277.0 277.0 341.3 341.3 15.3% 15.3% 147.7 147.7 17.2% 17.2% 16.4% 16.4% 15.7% 15.7% 179.9 179.9 194.8 194.8 153.6* 153.6* 13.1% 13.1% 73.6 73.6 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 1H13 1H13 14
Key figures January to June 2013 Financial performance HHLA Group Subgroup Port Logistics in million 1-6 2013 Change 1-6 2013 Change Revenue 575.2 1.6 % 561.3 1.5 % EBIT 81.0-14.0 % 73.6-17.0 % EBIT margin in % 14.1-2.5 pp 13.1-2.9 pp Profit after tax and minorities 29.0-31.0 % 25.7-35.2 % Capital expenditure 56.9-30.5 % 52.5-31.5 % Employees as of 30.06. 4,937 3.4 % 4,901 3.5 % ROCE in % 11.8-2.2 pp 15
Operating expenses Financial performance Figures of listed subgroup Port Logistics Total operating expenses: + 2.3 % in million 498.9 510.3 186.5 187.7 66.3 58.4 1-6 2012-3.5 % + 7.7 % + 4.9 % + 0.8 % 180.0 201.8 69.9 58.9 1-6 2013 Cost of materials Personnel expenses Other operating expenses Depreciation and amortisation Throughput / transport growth: + 6.8 % / - 16.6 % Cost of materials Mainly variable expense items Adjusted for the Intermodal restructuring above volume development because of ramp-up costs for new rail connections and a new hub terminal Personnel expenses Rise due to collective wage agreement Additional work input caused by on-going reorganisation of CTB Peak load conditions required external staff Other operating expenses Slight increase in lease expenses Lower external maintenance expenses and consultancy fees for development projects Depreciation and amortisation Slight increase in property, plant and equipment In line with capex 16
Financial position Solid financial fundament Free cash flow Balance sheet as of 30 June 2013 Financial performance Figures of listed subgroup Port Logistics in million Operating cash flow down 14.8 million to 85.2 million on reduced earnings Cash capex down 9.6 million to 39.4 million Reported free cash up due transfer from short term deposits in liquid funds against payments in 1H2012 Property, plant and equipment 1,601.0 million 34 % 61 % 23 % Equity Pension provisions 51.1* 45.8* Other non-current assets 12 % 29 % Other non-current liabilities Current assets 27 % 14 % Current liabilities 1-6 12 1-6 13 adjusted for transfer of liquid funds to/from short-term deposits Assets Liabilities 17
Agenda Company profile and strategy Business development Financial performance Outlook 18
Forecast 2013 Figures for listed subgroup Port Logistics Outlook Market environment 1 Subgroup Port Logistics development Global economy (GDP) +3.1 % World trade +3.1 % Global container throughput +4.0 % Northern Europe box throughput +0.2 % Business environment Subdued economic situation in key markets Uncertainties with regard to market behaviour and strategies of shipping companies Peak load conditions due to the continuing delay in dredging the river Elbe Modernisation in Container segment, expansion in Intermodal segment and restructuring in Logistics segment 1 IMF, Drewry, Federal Office for Freight Transport 2 Handelsbanken s Commerzbank based on new ownership Sector 8th Transport Conference structure in Seminar Intermodal Week Segment August Hamburger 2013 Hafen Hamburger und Logistik Hafen AGund Logistik AG 3 EBIT 2012 of 155.6 million after adjustment for one-off gain of 17.6 million (mainly on sale of stake in TFG Transfracht) Container volumes Slight single-digit growth of throughput (2012: 7.2 million TEU) Transport volume above market growth and above 1.1 million TEU (2012: 1.0 million TEU 2 ) Revenue Following the Group target range of 1.1 billion to 1.2 billion (2012: 1.1 billion), revenue of Real Estate subgroup to be subtracted (2012: 32 million) EBIT In a range of 142 million to 162 million (2012: adjusted EBIT of 156 million 3 ) Without major progress in the restructuring processes, the EBIT is expected to be at the low half of this range Capital expenditure Investments in the region of 140 million (2012: 186 million) 19
Summary Conclusion 1 Competitive business model 2 Leading market positions 3 Favourable geographic location 4 High-quality service and technology level 5 Strong financial track record 20
Appendix 21
HHLA in the Port of Hamburg Appendix HHLA CONTAINER TERMINAL BURCHARDKAI HHLA REAL ESTATE FISCHMARKT HHLA CONTAINER TERMINAL TOLLERORT HHLA REAL ESTATE SPEICHERSTADT HHLA LOGISTICS CRUISE CENTER HHLA LOGISTICS ÜBERSEE-ZENTRUM HHLA LOGISTICS O SWALDKAI HHLA LOGISTICS HANSAPORT HHLA LOGISTICS ALTENWERDER HHLA CONTAINER TERMINAL ALTENWERDER 22
Container Terminal Activities Illustrative process chain Container Terminal Altenwerder (CTA) Appendix Ship-to-shore crane Rail-mounted gantries Truck loading area Vessel Surface transport by AGV Container storage area On-dock rail facility 23
Elbe Waterway Adjustment Administrative steps by the public authorities in charge Appendix Initiation of plan approval process Sep 2006 Technical planning Environmental studies Public hearings EU statement on council directive Flora Fauna Habitat Final plan approval Dredging start subject to main proceeding on legal objections Nov 2011 Apr 2012 Proceeding officially announced for Q4 2013 Federal Water and Shipping Authority & City State of Hamburg European Commission Federal Water and Shipping Authority Federal Administrative Court Adjustment of navigation channel 14.50 m tidal dependent / 13.50 m tidal independent, widening boxes Enabling a higher load factor, extended time slots and more flexibility for mega carriers 24
Container segment Appendix in million 1-6 2013 1-6 2012 Change Container throughput 1 3,757 3,516 6.8 % Revenue 359,7 343.9 4.6 % EBITDA 113.0 112.2 0.7 % EBITDA margin 31.4 % 32.6 % - 1.2 pp EBIT 68.8 66.8 3.0 % EBIT margin 19.1 % 19.4 % - 0.3 pp Segment assets 940.0 910.7 3.2 % 1 In thousand TEU Throughput growth in Hamburg mainly driven by container traffic with Asia and transshipment volume to the Baltic Rim Further rise of volumes in Odessa by gaining new shipping services Dilutive effect on average revenue per box by additional growth in lower margin feeder volumes Declining trend in storage fees due to increasing feeder volumes High additional operating expenses and pressure on pricing power due to the continuing delay in dredging of the river Elbe EBIT burdened by CTB modernisation 25
Intermodal segment Appendix in million 1-6 2013 1-6 2012 1 Change Container transport 1 581 697-16.6 % Revenue 151.5 155.6-2.6 % EBITDA 22.3 36.4-38.7 % EBITDA margin 14.7 % 23.4 % - 8.7 pp EBIT 12.6 27.9-55.0 % EBIT margin 8.3 % 17.9 % - 9.6 pp Segment assets 294.6 265.4 11.0 % 1 In thousand TEU 2 No impact of Intermodal realignment on first quarter results 2012 Transport volume based on the new ownership structure increased significantly by 21.8 % New connections in Germany, Austria and Poland in combination with a new hub terminal in Czech Republic strengthened market position Earnings temporarily burdened by start-up costs, fierce competition and operational losses of Polzug Negative impact of Elbe and Danube flooding Obligations for purchased rail services to a former shareholder will last until the end of 2013 26
Logistics segment Appendix in million 1-6 2013 1-6 2012 Change Revenue 44.8 47.5-5.6 % EBITDA 5.7 5.4 5.3 % EBITDA margin 12.8 % 11.5 % 1.3 pp EBIT 4.2 3.7 13.9 % Revenue down mainly due to the weak European economic situation Rise in earnings includes a one-off gain for selling a property Most of this one-off gain was used for restructuring measures in project and contract logistics EBIT margin 9.3 % 7.7 % 1.6 pp Segment assets 40.2 51.9-22.4 % 27
Financial calendar IR contact 13 Nov 2013 Interim Report Jan-Sep 2013 Phone: +49 40 3088 3100 Fax: +49 40 3088 55 3100 E-mail: investor-relations@hhla.de Web: www.hhla.de 28