ARION BANK: CAPITAL MARKETS DAYS Gylfi Sigfússon, President and CEO of Eimskip 9 April 2015

Transcription

1 ARION BANK: CAPITAL MARKETS DAYS 2015 Gylfi Sigfússon, President and CEO of Eimskip 9 April 2015

2 BUSINESS SEGMENTS Liner services in the North Atlantic and international forwarding services Liner services The core of the company s operations Eimskip s home market includes: Maine USA, Nova Scotia, Newfoundland Labrador, Iceland, the Faroe Islands and Northern Norway 16 vessels in operation Port operations Chilled and cold storage facilities Warehousing Trucking and distribution Air-freight services Agency services Revenue by segment 2014 Geographical split of revenue 2014 Forwarding services Main focus on reefer forwarding and general cargo building up Efficient system based on a network of own offices in 19 countries Strong cooperation with the large deep-sea lines and 68 associates in 38 countries 2

3 EIMSKIP S HOME MARKET Niche market areas with rich natural resources Greenland 56,000 Iceland 330,000 Northern Norway 500,000 Murmansk, Russia 300,000 Maine, USA 1,300,000 Newfoundland Labrador and Nova Scotia 1,470,000 The Faroe Islands 50,000 3

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5 EIMSKIP S INTERNATIONAL OPERATIONS Contribute to 53% of the company s operating revenue 600 employees 36 offices in 18 countries in Europe, North America and Asia 4 container terminals 11 warehouses 7 chilled and cold storage facilities 349 trucks, vans and trailers 57 associates in 37 countries in Europe, North America, Asia, Africa and South America 5

6 PORTLAND, MAINE Population of the state of Maine is 1.3 million and inside 600 mile range from Portland is a market of 60 million people In March 2013 Eimskip moved its main hub on the US east coast to Portland, Maine - Replaced Norfolk VA and Everett MA Three offices and warehouses operated in the US - In Portland, New York and Norfolk Intentions of further investments in infrastructure in Portland - Terminal, warehouse, cold storage and rail connection Eimskip is currently the only container carrier serving the port of Portland offering direct connection to Europe and short sea services to and from Canada Worldwide dry and reefer forwarding services - Opening of a freight forwarding department Hub for import and distribution of frozen fish from the North Atlantic 6

7 NEWFOUNDLAND LABRADOR AND NOVA SCOTIA Eimskip began its regular services to Argentia in Newfoundland in 1989 and has operated its own office in St. John s since 1990 Main focus on seafood and industrial cargo Operation of own cold storage facilities - Harbour Grace with special focus on serving trawlers - St. Anthony with special focus on serving trawlers and containerizing cargo (acquired in 2015) Cargocan forwarding company, located in St. John s (acquired in 2015) Eimskip is the only container carrier offering direct services between - Newfoundland Labrador and Europe - Newfoundland Labrador and Nova Scotia to and from USA 7

8 FAROE ISLANDS The Faroe Islands play an important role in the North Atlantic network Faroe Ship has a strong position in the Faroese transportation market - Operates the Tórshavn container terminal and warehouses - Offers door-to-door transportations and logistics solutions - Operates chilled and cold storage facilities in Tórshavn and Klaksvík - Extensive services for the salmon industry Imports to the Faroe Islands embrace a wide range of commodities while exports consist mainly of seafood products Various construction projects in the works Tórshavn port authority is planning to expand the port considerably 1 1 8

9 NORWAY Eimskip operates in six locations along the Norwegian coast Operates six side-loaded reefer vessels Chilled and cold storage facilities in Kirkenes and Sortland The only container carrier connecting Northern Norway and North America Through extensive service network, Eimskip connects Murmansk in Russia, Norway, the Netherlands and the UK - Call on average 20 ports in Norway Through the northern liner route, Eimskip offers services for the oil industry Worldwide reefer forwarding services 9

10 EIMSKIP S OWN OFFICES IN EUROPE REYKJAVÍK TROMSØ SORTLAND KIRKENES MURMANSK TÓRSHAVN ÅLESUND FREDRIKSTAD ÅLBORG IMMINGHAM ÅRHUS HELSINGBORG GATWICK GDYNIA ROTTERDAM HAMBURG ANTWERPEN VIGO GENOA ÅRHUS DENMARK GENOA ITALY HAMBURG GERMANY GDYNIA POLAND HELSINGBORG SWEDEN IMMINGHAM UK 10

11 EIMSKIP S SERVICE NETWORK IN ASIA Eimskip celebrated its 10th anniversary in Asia in 2014 Seven own offices in Asia, offering reefer and dry forwarding services Operations in - China, since 2004, four offices today - Japan and Vietnam, since Thailand, since 2012 Numerous associates in Asia Cold storage operations in the port of Qingdao, China, in a joint venture with the port authority - New commodities and markets Volume growth in Intra-Asia trade 11

12 FORWARDING SERVICES 55 own offices and 68 associates in 46 countries 12

13 FLOW OF REEFER FORWARDING 2014 New commodities, markets and companies in forwarding services Europe > Asia 20% Intra-Europe 7% Asia > North America 9% Asia > Middle East 3% Intra-Asia 22% Asia > Europe 24% Asia > Africa 3% Europe > Middle East 1% Europe > South America 1% Europe > Africa 6% Asia > South America 4% Eimskip s reefer forwarding volume grew by 20% from 2012 to

14 EXTERNAL FACTORS 14

15 THE EFFECT OF LOWER FUEL COST FOR EIMSKIP Decreased fuel prices have marginal effect on the company s results Bunker Adjustment Fee (BAF) is charged to customers which largely offsets the company s risk towards fluctuation in fuel prices Customers benefit from lower fuel prices through the Bunker Adjustment Fee Source: Bloomberg Eimskip s total fuel cost for 2014 was about EUR 36 million Fuel cost for the year 2014 with today s prices, the new SECA rules on lower sulfur emissions and the strengthening of USD towards EUR would have been 21% lower 15

16 EIMSKIP S SALES AND EXPENSES 2014 BY CURRENCY Natural currency hedge Sales Expenses 16

17 DEEP-SEA LINE RATES Considerable fluctuations in rates Eimskip s forwarding operation, both revenues and costs, is affected by fluctuations in DSL rates Eimskip is purchasing services from the DSL companies and is selling to its customers with a margin During the last few years, the DSL rates have fluctuated much and the fluctuations are affecting the company s operation It is interesting to compare fluctuations in DSL rates with the profit margin of the DSL companies which have shown similar fluctuations Source: Eimskip and Alphaliner 17

18 GROWTH GOING FORWARD 18

19 PLANNED LARGE SCALE PROJECTS IN ICELAND Volume increase in container traffic may increase by 30-35% in coming years 19

20 INFRASTRUCTURE INVESTMENTS IN ICELAND Transactions in 2015 Land in Grundartangi - Eimskip seeks to develop further in Grundartangi in relation to the current and future industries in good cooperation with companies in the area - The company has invested in 22,410 m 2 land in Grundartangi Two Gottwald harbor cranes - With the crane investment, the company will further strengthen its operations in Iceland and the Faroe Islands - Will be able to run the vessels on the Blue Line without vessel cranes Hafnarfjördur - Eimskip has started construction of a 10,000-ton cold storage facility in its location on the harbor site in Hafnarfjördur - An addition to the company s current 3,000-ton Fjardarfrost 20

21 GROWTH IN LINE WITH STRATEGY Through acquisitions and joint ventures Eimskip s plans for external growth are, in line with current strategy, to make accretive acquisitions that create synergies, strengthen the company s performance and increase shareholder value Reasonably sized acquisitions and joint venture projects 1 - Container liner operations - Reefer and dry vessel operations 1 - Terminal operations - Port located cold storages with strong connection to the seafood industry - Trucking to serve Eimskip s needs and third-party - Custom clearance / brokerage serving liner trade Reefer logistics worldwide - Freight forwarding companies - Continued focus on opening new offices supporting the existing network 21

22 MERGER AND ACQUISITIONS Transactions in 2015 Jac. Meisner - Eimskip has strengthened its position in worldwide reefer logistics services with the acquisition of the forwarding company Jac. Meisner in Rotterdam, the Netherlands Joint venture in ship management and trading - Eimskip and König & Cie. Holding have established a joint venture which will be specialized in ship management and trading and is located in Hamburg, Germany Warehouse operation in Århus - Eimskip has taken over a 15,500 m 2 warehouse operation from Damco in Århus, Denmark - Merged with the company s former warehouse operation in Århus, the total warehouse operation of 21,500 m 2 makes Eimskip the largest third-party logistics provider in Århus which is the second largest port in Scandinavia Companies in Newfoundland Labrador - In cooperation with Harbour Grace Shrimp Company Ltd. Eimskip has acquired the cold storage operation of St. Anthony Cold Storage Ltd. in St. Anthony - Eimskip has also acquired the forwarding company Cargocan Agency Ltd. in St. John s 22

23 SUITABLE INVESTMENTS CREATE SHAREHOLDER VALUE Eimskip s financial strength allows valuable transactions Important to be very selective on potential transactions with the following criteria in mind - In line with Eimskip s current strategy - Creates synergy - Creates shareholder value - Strong management Currently analyzing about 20 potential projects 23

24 DUAL LISTING Approval from the Central Bank of Iceland Shareholders approval to issue up to 100 million new shares The Central Bank of Iceland has approved Eimskip s application for dual listing with certain restrictions Influencing factors on the process - Eimskip s potential investments - Market conditions - Capital controls in Iceland - The investigation of the Icelandic Competition Authority on Eimskip OSLO Shipping Index April 2014 to April 2015 Source: 24

25 Q & A 25

26 DISCLAIMER Information contained in this presentation is based on sources that Eimskipafélag Íslands hf. ( Eimskip or the Company ) considers reliable at each time. Its accuracy or completeness can however not be guaranteed. Copyright of information contained in this presentation is owned by Eimskip. This presentation, including information contained therein, may not be copied, reproduced or distributed in any manner, neither wholly nor partly. This presentation is solely for information purposes and is not intended to form part of or be the basis of any decision making by its recipients. Nothing in this presentation should be construed as a promise or recommendation. Eimskip is not obliged to provide recipients of this presentation any further information on the Company or to make amendments or changes to this publication should inaccuracies or errors be discovered or opinions or information change. Any statement contained in this presentation that refers to the Company s estimated or anticipated future results or future activities are forwardlooking statements which reflect the Company s current analysis of existing trends, information and plans. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially depending on factors such as the availability of resources, the timing and effect of regulatory actions and other factors. Eimskip undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this presentation. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. All forward-looking statements are qualified in their entirety by this cautionary statement. By the receipt of this presentation the recipient acknowledges and accepts the aforesaid disclaimer and restrictions. 26

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