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Wilh. Wilhelmsen ASA
Third quarter 2016
>
Wilh. Wilhelmsen ASA 11th November 2016 Jan Eyvin Wang, President and CEO
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> Agenda
• Macro developments
• Volume developments
• Outlook
• Merger between WW and OW
Disclaimer
This presentation contains forward-looking expectations which are subject to risk and uncertainties related to economic and
market conditions in relevant markets, oil prices, currency exchange fluctuations etc.
Wilh. Wilhelmsen ASA group undertake no liability and make no representation or warranty for the information and
expectations given in the presentation.
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> Light vehicle sales in key markets – quarterlySoft quarter in key markets
Million units
Region Q3'16 Q2'16 QoQ change Q3'15 YoY change 2016 FY
N America 5.38 5.64 -5 % 5.29 2 % 20.90
Europe* 3.98 4.67 -15 % 3.80 5 % 17.00
Oceania 0.32 0.35 -9 % 0.32 0 % 1.30
BRICs 7.96 7.90 1 % 7.09 12 % 32.40
.....Brazil 0.52 0.49 6 % 0.62 -16 % 2.00
.....Russia 0.35 0.35 0 % 0.41 -15 % 1.40
.....India 0.85 0.78 9 % 0.76 12 % 3.40
.....China 6.24 6.28 -1 % 5.30 18 % 26.00
*) Excluding Russia and Turkey
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> Quarterly light vehicle exports (units)Weak Korean exports due to strike
0
200 000
400 000
600 000
800 000
1 000 000
1 200 000
1 400 000
Q1 Q2 Q3 Q4 Q1Q2 Q3 Q4 Q1Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2009 2010 2011 2012 2013 2014 2015 2016
Japan Korea
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> CAT resource industries sales (USD billion)Bottoming out?
0
1
2
3
4
5
6
7
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2010 2011 2012 2013 2014 2015 2016
Resource Industries
Resource Industries
Resource industries includes mainly mining and forestry related equipment
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> Group ocean volume developmentWeaker volumes; seasonality and strikes in KoreaStrike impact for EUKOR 70,000 units
Prorated ocean volumes – WW group (100%)
1 000 CBM
15 218
16 743
15 465
18 27118 034
19 385
18 230
19 56018 708
20 535
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
20 000
22 000 -9 %-16 %
2-14 3-14 4-14 1-15 2-15 3-15 4-15 1-16 2-16 3-16
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>
*) Unprorated ocean volumes – WWL and EUKOR (100 %)
Group ocean cargo segment developmentBoth Auto and High & Heavy volumes down in the third quarter
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> Outlook
• Continued soft fundamentals are exacerbated by political uncertainties
• Anti-trust provisions stands at USD 108 million
• IMO: 0.5 % global Sulphur content of fuel from 2020
• Creation of WWLASA on schedule for end Q1 approval
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> Sulphur content in fuel – today
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> Sulphur content in fuel – from 2020
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> Sulphur content – Three ways to comply
1. Purchase Sulphur compliant fuel
– Marine Gas Oil or Ultra Low Sulphur Fuel Oil – 0.1 %
– Low Sulphur Fuel Oil – 0.5 %
2. Install Scrubber technology and operate High Sulphur
Fuel Oil – 3.5 %
- Payback time 2-6 years
3. Install propulsion system based on LNG as fuel
Will become part of BAF recovery system
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>
WWH ASA
Wallenius Wilhelmsen
Logistics ASA
Wallenius
Lines AB
~ 40%
Highlights
• Enhancing our world-leading shipping and logistics platform
• Will be listed on Oslo Stock Exchange based on the Wilh. Wilhelmsen ASA structure
• Head office will be in Norway and Craig Jasienski will become CEO
• Balanced shareholder agreement
• Sub-optimal governance model in old structure
• Current market conditions require an agile and efficient business model
• Synergy potential of USD 50-100m
Rationale
Market
~ 20% ~ 40%
SHIPPING LOGISTICS
TERMINALS
INLAND
DISTRIBUTION
PROCESSING
CENTRES
WWL
100%
ARC
100%
EUKOR
80%
VESSELS
WWASA Group LOI signed with Wallenius
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> WWASA and OW merger Tentative timeline and key milestones
• Early / mid December: BoD resolution of merger plan and
summons to EGM
• Mid / end January: IM published and EGM held
• Mid/end March: Creditor periods expire
• End March: Expected clearance of anti trust filings
Completion of merger end March/early April, subject to above
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> Prospects
The board expects volume growth to remain weak going into 2017.
The current global political landscape adds further uncertainties.
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Wilh. Wilhelmsen ASA
Third quarter 2016
>
Wilh.Wilhelmsen ASA 11th November 2016 Benedicte B. Agerup, CFO
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> WWASA Group – Key financialsUnderlying income and profitability declined q-o-q
• Total income reported - 49% q-o-q, - 20% y-o-y
• EBIT reported - 92% q-o-q
• Substantial positive non recurring item in Q2 2016 caused by demerger of NAL
• Ocean transported volumes fell by 9%
• Stable contribution from logistics segment q-o-q
800
600
400
200
0
100
900
300
500
700
Q1
USD million -49%
Q4Q3Q2
522 508
418
827
559525
571
500
400
300
200
100
0
-100
-200
-92%
Q4Q3
USD million
Q2Q1
98
-134
32
126
417
73 66
20162015Total income Total EBIT
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>
USD million 2016 Q3 2016 Q2 2016 YTD 2015 YTD 2015 Q3 2015 FY
Operating income 418 452 1 301 1 591 511 2 095
Gain on sale of assets 375 455 26 29
Share of profits from JV's and associates 13 35 12 36
Total income 418 827 1 769 1 652 522 2 159
EBITDA 69 455 685 155 (94) 262
Depreciation and impairments (37) (38) (110) (118) (41) (160)
EBIT 32 417 575 36 (134) 103
Financial income/(ex pense) 0 (21) (36) (115) (73) (128)
Profit/(loss) before tax 32 396 539 (78) (207) (25)
1 1 1 1 1 Net profit
1) 25 392 521 (86) (213) (4)
Earnings per share (USD) 0.11 1.78 2.37 -0.39 -0.97 -0.02
1) after minority interest
WWASA Group – Profit and Loss Q3 2016Proportionate method
• Total income adjusted -8% q-o-q and - 20% y-o-y
• Total EBIT adjusted -27% q-o-q and -53% y-o-y
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> WWASA Shipping – Key financialsLower transported volumes, partly seasonal
• Total income reported - 9% q-o-q, - 23% y-o-y
• EBIT reported - 31% q-o-q
• Drop in ocean transported volumes, both auto and H/H
• Strike at manufacturing plants in Korea, affecting EUKOR volumes negatively
• Mitigating actions towards surplus tonnage situation
• Continued pressure on rates combined with unfavourable cargo and trade mix
600
500
400
300
200
100
0
USD million
-9%
Q4Q3Q2Q1
437
372
470
357
460433
337
100
50
0
-50
-100
-150
Q1
USD million
-31%
Q4Q3Q2
59 62
28
5838
-150
26
20162015
Shipping income Shipping EBIT
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> WWASA Shipping – EBIT marginWeak EBIT margin
+ Lower G&A cost base - Suboptimal cargo and trade mix
+ Reduced OPEX - Reduced volumes
- Rate pressure
*) Q3 2015 EBIT margin -34.4%, large negative non-recurring item
*)
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> WWASA Logistics – Key financialsResults on par q-o-q
• Total income reported stable q-o-q, - 5% y-o-y
• EBIT reported stable q-o-q, - 56% y-o-y. Hyundai / Glovis included in Q3 2015.
• Underlying result on par with previous quarter
• Restatement of pass-through revenue/cost within inland distribution
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0
180
160
140
120
100
80
60
40
Q2
8896
Q1
175
117
Q4
83
Q3
8993
USD million
0%
20
0
120
100
80
60
40
Q2
818
Q3
818
+3%
Q4
6
USD million
Q1
100
40
20162015
Logistics income Logistics EBIT
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> WWASANewbuilding program ended Q2 2016
• Capex program finalized Q2 2016 with
delivery of 2 post panamax vessels in April
and June
• Normal dry-docking of MUSD 10-15 MUSD
on an annual basis only planned capex
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> WWASA Group – Financial income/(expense) *)
Decline in net financial expenses q-o-q
• Unrealised gain on hedging contracts
• Positive return from investment portfolio, mainly as a result of narrowing
credit spreads
*) Proportionate figures
USD million 2016 Q3 2016 Q2 2015 Q3 2015 FY
Net financia l i tems 5.2 5.0 (15.9) (6.3)
Net interes t expenses (24.7) (26.1) (22.0) (91.4)
Interest rate derivatives - unrea l ised 10.6 (1.1) (15.3) 24.3
Net financia l - currency 8.9 (3.2) (15.2) (48.7)
Net financia l deri vati ves bunkers (0.1) 4.3 (4.2) (6.3)
Financial income/(expense) 0.0 (20.9) (72.6) (128.3)
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> WWASA Group – Balance Sheet*)
Continued strong balance sheet
*) Equity
USD million
Assets
N on current assets 2 779 87 % 2 925 89 %
C urrent assets (ex cl liquid funds) 17 1 % 24 1 %
Liquid funds 412 13 % 349 11 %
Total assets 3 207 100 % 3 299 100 %
Equity & liabilities
Equity 1 455 45 % 1 655 50 %
N on current interest-bearing debt 1 259 39 % 1 135 34 %
Other non current liabilities 193 6 % 225 7 %
C urrent liabilities 301 9 % 285 9 %
Total equity and liabilities 3 207 100 % 3 299 100 %
30.09.2016 31.12.2015
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>
0
50
100
150
200
250
300
350
400
450
500
550
USD million
84
2019
314
2018
298
2017
115
2016
106
2021 ->
524
2020
WWASA Group – interest bearing debtRefinancing of balloons in 2018/2019
Export financing
Financial lease
Banks
Bonds
• Ordinary installments of approx USD 25 million in Q3.
• Bond maturity in November 2016 of approx. USD 70 million to be financed from cash position.
• Two vessels refinanced in August/September, reducing 2019 balloons.
• Process of refinancing the 2018/2019 balloons continuing.
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> WWASA Group – Liquidity developmentPositive contribution from operations
45
4
5
21
33
440
420
405
435
425
0
410
5
450
455
445
465
460
415
430
400
Liquidity Q3 2016
411
OtherInterest and
derivatives
Liquidity Q2 2016
USD million
EBITDA*) CapexNet financing
3
Dividend received
from JV’s
0
JVs
416
*) Equity
Thank you!>
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