Hamburger Hafen und Logistik : Präsentation (PDF, Englisch)

November 12, 2020 at 06:55 am EST

Analyst conference call on the interim results January to September 2020

Hamburg, 12 November 2020

Agenda

01 Remarks on 9M20

Angela Titzrath, CEO

02 Business development in 9M20

Angela Titzrath, CEO

03 Financial performance in 9M20

Dr. Roland Lappin, CFO

04 Business forecast for 2020

Angela Titzrath, CEO

05 Questions & answers

Angela Titzrath, CEO

Dr. Roland Lappin, CFO

12 November 2020 Analyst conference call on the interim results January to September 2020

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.

Europe and the USA showed a brief respite from the pandemic in 3Q20

Long-term effects on the economy of historic dimension

Outbreak evolution for the current 10 most affected countries

Source: Johns Hopkins University, October 2020

Historic drop in Germany's GDP development

Price-adjusted in %

Source: Destatis, October 2020

12 November 2020 Analyst conference call on the interim results January to September 2020

Estimated global GDP development for 2020 and 2021 different scenarios

Forecast given in June 2020	2020	2021
World Bank	upside	-5.2%	4.2%

	baseline	approx. 8 %	approx. 1 %
	downside	-3.0%	5.0%
OECD	baseline1	-6.0%	5.2%
	downside²	-7.6%	2.8%
IMF		-4.9%	5.4%
Forecast given in September 2020	2020	2021
OECD	baseline1	-4.5%	5.0%
		downside² n/a	2-3 %
			2-3%
IMF		-4.4%	5.2%

1 Sporadic local outbreaks will continue; targeted local intervention rather than national lockdowns 2 Stronger resurgence of the coronavirus pandemic or more stringent containment measures

Source: World Bank, OECD, IMF

Macroeconomic environment in the first nine months of 2020

Global economy facing recession as a result of the coronavirus pandemic

Trend in the first nine months 2020 y-o-y

GDP World	


GDP China	


GDP Russia	


World trade	

Estimates for Q3 2020

World throughput	- 2.2 %


Europe throughput	0.3 %

NW Europe throughput - 4.0 %

Scandinavia & Baltics - 7.0 %

Macroeconomic environment

Global economic activity shows signs of recovery in the third quarter
IMF expects that the impact in Q2 was even more negative than previously expected.1
China finally returns to growth path and reported growth of 0.7 % y-o-y for the first nine months 2020 (Q3: 4.9 % // Q2: 3.2 % // Q1: - 6.8 %) 2
Since COVID-19 has not yet been contained in Q3, Russian economy expected to be in recession (Q2: - 8.5 %; Q1: 1.6 %)3
Global trade picked up in Q3 as lockdowns were eased1

Sources: 1 International Monetary Fund (IMF) - World Economic Outlook, October 2020; 2 Press Release (19.10.2020); 3 Press releases (19.05.2020 and 11.08.2020)

Sector development

After a marked drop in global throughput, the decline in Q3 was less pronounced than recently feared (Q3: - 2.2 % // Q2: - 8.2 % // Q1: - 2.9 %)
Europe experienced a strong decline in Q2 but turned almost neutral in Q3 (Q3: 0.3 % // Q2: - 12.2 % // Q1: - 2.0 %)
While West Mediterranean as well as East Med & Black Sea turned positive in Q3 Northwest Europe as well as Scandinavia and the Baltic region still struggling
(NW: Q3: - 4.0 % // Q2: - 10.1 % // Q1: - 3.2 % /// S&B: Q3: - 7.0 % / Q2: - 9.7 % / Q1: - 2.5 %)

Source: Drewry Maritime Research, Container Forecaster, October 2020

12 November 2020

Analyst conference call on the interim results January to September 2020

At a glance

First nine months results 2020 burdened by challenging market environment

Revenue and EBIT declined sharply

Negative impact of the coronavirus pandemic on the macroeconomic environment weakened somewhat in Q3

High pressure on transport systems due to blank sailings and reduced utilisation

We are set to expand our network with a majority stake in a new multi-function terminal in the Adriatic port of Trieste and Metrans has already invested in two facilities in Germany

Liquidity sufficient to meet due payment obligations at all times, despite the pandemic-induced burdens

Guidance 2020: Throughput volumes expected to drop strongly while container transport will decline significantly; furthermore, a strong decline in revenue and EBIT is expected

12 November 2020

Analyst conference call on the interim results January to September 2020

Financial results of Port Logistics subgroup in the first nine months of 2020

Financial results strongly impacted by coronavirus pandemic

Revenue

937.4 million
- 8.1 %

Profit after tax and minorities

31.3 million
- 59.2 %

EBIT		EBIT margin
€ 96.6 million		10.3 %
‒ 40.7 %		‒ 5.6 pp

ROCE		Operating cash flow
6.8 %		€ 187.6 million
‒ 5.0 pp		‒ 23.9 %

12 November 2020

Analyst conference call on the interim results January to September 2020

Throughput and transport trend in the first nine months of 2020

Reduction in container transport less pronounced

Container throughput

in thousand TEUContainer transport in thousand TEU

	-11.2%		-4.6%
5,730
5,086	1,184	1,129

	1,796	1,549	1,741			378	340	411
9M19	1Q20	2Q20	3Q20	9M20	9M19	1Q20	2Q20	3Q20	9M20

Container throughput decreased strongly by 11.2 %, mainly due to blank sailings as a result of the coronavirus pandemic and the loss of a Far East service at the Hamburg container terminals
Feeder volumes down by 2.6 pp with a feeder ratio of 20.1 % (previous year: 22.7 %)
International terminals moderately down compared to previous year

Moderate decrease in transport volume driven by
- moderate decrease in rail transportation (‒ 3.7 % y-o-y) since traffic from the North German seaports recorded significant to strong declines that could not be compensated by favourable growth in continental traffic
- downward trend in road transportation weakened q-o-q
  (‒ 8.0 % y-o-y)

13.11.2019

Analyst conference call on the first nine months 2019

Container segment

Drop in volumes burdens revenue development, EBIT impacted by a disproportionate fall in opex

Revenue		■ 9M19	■ 9M20	OpEx		■ 9M19	■ 9M20
		-9.4%					-2.7%
605.5			548.4	492.9			479.7

		+2.0%					+9.6%
	105.7	107.8				86.0	94.3
€m	€/TEU	€/TEU	€m		€m	€/TEU	€/TEU	€m
EBIT		■ 9M19	■ 9M20	EBIT margin
		-39.0%					-6.1pp
112.6
				18.6%

			68.7			12.5%
		-31.3%
	19.7	13.5

€m	€/TEU	€/TEU	€m		9M19			9M20

Revenue significantly down as a result of lower volumes
Average revenue per TEU up by 2.0 % due to
- advantageous modal split with a high proportion of hinterland volumes
- temporary increase in storage fees as a result of longer dwell times brought about by weather-related delays and blank sailings caused by the pandemic
Opex decrease of 2.7 % supported by
- lower material costs and personnel expenses (resulted primarily from reduced use of external personnel)
- partly offset by higher maintenance and service costs
EBIT markedly down to € 68.7 million
EBIT margin of 12.5 %, still at acceptable level

12 November 2020

Analyst conference call on the interim results January to September 2020

Intermodal segment

EBIT affected by lower volumes and fall in utilisation of the rail systems, EBIT margin still at a sound level

Revenue in € million

	-5.2%
367.9	348.7

9M19	9M20

OpEx

in € million

	-1.9%
291.8	286.4
9M19	9M20

	Decline in revenue mainly volume-driven
	Despite a slight increase in rail share of
	total transportation volume from 78.5 % to
	79.3 %, average revenue per TEU
	decreased as a result of the
	disproportionately strong decrease in
	freight flows with longer transport
	distances
	Sharp drop in EBIT as a result of
	‒ decline in volumes and revenue

EBIT

in € million

	-18.0%
76.1	62.4

9M19	9M20

EBIT margin

	-2.8pp
20.7%	17.9%

9M19	9M20

‒ increased fluctuations in import and

export cargo loads led to a decrease

in capacity utilisation of rail systems

 EBIT margin deteriorated, but still at a

favourable level of 17.9 %

12 November 2020

Analyst conference call on the interim results January to September 2020

Logistics segment

Vehicle logistics, consulting activities, digital projects and participations

Revenue	EBIT
in € million	in € million

	-13.5%		Neg.
43.9	37.9	1.7

9M19	9M20		-3.6
		9M19	9M20

At-equity earnings in € million

-45.8%

3.1

1.7

9M19

9M20

12 November 2020 Analyst conference call on the interim results January to September 2020

Revenue strongly down due to
- strong decline in vehicle logistics
- consulting activities strongly below prior-year level
- first-timeconsolidation of additive manufacturing technologies in Q3 2019
EBIT impacted by expected start-up losses in the new growth areas and reduced vehicle logistics and consulting activities
At-equityearnings remained positive, but declined sharply compared to previous year

Earnings bridge of the Port Logistics subgroup

Net profit showed strong decline

in € million / absolute change 9M20 vs. 9M19

96.6	- 2.0	+ 1.2

			EPS
	1.7

25.2	€ 0.45

	+ 14.0
	21.8

‒40.7 %	Effective tax rate
	at 29.8%

- 7.6

20.0

31.3

‒ 59.2 %

EBIT	At-equity	Net financial	Tax	Minorities	Net profit
	earnings	expenses			after
					minorities
12 November 2020	Analyst conference call on the interim results January to September 2020			© Hamburger Hafen und Logistik AG	11

Cash flow development of the Port Logistics subgroup in the first nine months

In line with business development

Cash flow from operating activities in € million

	-23.9%
246.4
	187.6
9M19	9M20

Cash flow from investing activities in € million

	-27.5%
	-81.5
-112.4
9M19	9M20

Cash flow from financing activities in € million

	-18.8%
-134.5	-109.2

9M19	9M20

Lower EBIT due to volume drop
Increase in trade receivables and other assets
Lower increase in trade payables and other liabilities
Counteracted by lower tax payments

Ongoing capex programme
Higher payments for investments in property, plant and equipment compared to the previous year
Incoming payments for short-term deposits

Strong change against previous year mainly due to a lower cash dividend payment compared to the previous year

Available liquidity as of 30 September 2020: € 201.8 million (31 December 2019: € 232.2 million)

12 November 2020

Analyst conference call on the interim results January to September 2020

Financial stability with focus on cash flows

Liquidity remains primary focus for management

Net debt Port Logistics

in € million

1,395 1,374

496 523

631	636		706

576

409			442	773		740
453
442

222	183	134	264
126	111


2015	2016	2017	2018	2019	30.09.20

Available liquidity

- 201.8 m
Pension provisions
Lease obligations*
Net financial debt

Focus on cash flow control
Dividend policy to strengthen financial stability:
- reduction of dividend to € 0.70 per listed class A share (previous year: € 0.80)
- pay-outratio of 52 %
- distribution of ~ € 49 million of 2019 net profit
- thereof ~ € 25 million as scrip dividend to provide additional financial scope to develop HHLA successfully
- postponement and revision of investments

2019:
Change in lease
accounting	* Lease obligations according to IFRS 16

12 November 2020 Analyst conference call on the interim results January to September 2020

Expected macroeconomic and sector development for 2020

Updated forecasts factor in a larger hit to activity in H1 and a slower path to recovery in H2

GDP World	‒ 4.4 %


GDP China	+ 1.9 %


GDP Russia	‒ 4.1 %


GDP CEE	‒ 4.6 %


World trade	‒ 10.4 %


World throughput	‒ 3.3 %


Europe throughput	‒ 3.6 %

NW Europe throughput ‒ 4.2 % Scandinavia & Baltics ‒ 6.2 %

Expected macroeconomic environment 2020

Global economic downturn less negative than expected ( 0.8 pp), outlook still subdued
Economists assume that this year China will be the only major economy to end the year with positive growth ( 0.9 pp)
Russian GDP will shrink markedly, but decrease will be less than formerly feared ( 2.5 pp)
Pre-pandemicgrowth dynamics in CEE already massively interrupted ( 1.2 pp)
World trade development estimates show a dramatic double-digit decline ( 1.5 pp)

Source: 1 International Monetary Fund (IMF) - World Economic Outlook, October 2020

Expected sector development 2020

World throughput expected to register a smaller decline than envisaged in Q2 ( 4.0 pp)
European volumes declining, but forecast was noticeably raised ( 6.1 pp)
North West Europe volumes down y-o-y, but a slightly positive Q4 expected ( 3.5 pp)
Scandinavia & Baltics with the highest impact in Europe, despite a strong upgrade forecast ( 11.0 pp)

Source: Drewry Maritime Research, Container Forecaster, October 2020

12 November 2020

Analyst conference call on the interim results January to September 2020

Forecast for Port Logistics subgroup unchanged except for transport volumes

Decline in transport less pronounced than recently expected; still a sharp decline in all other areas

Container throughput

Container transport

Revenue

EBIT

Capital expenditure

2019

7,577 thousand TEU

1,565 thousand TEU

1,350.0 million
- 204.4 million
- 214.9 million

Guidance 2020

Strongdecrease on previous year

Significantdecrease on previous year

(previously: strong decrease)

Strongdecline on previous year

Adapted to current market environment

Liquidity

Liquidity sufficient to meet due payment obligations at all times, despite the pandemic-induced burdens

12 November 2020

Analyst conference call on the interim results January to September 2020

Financial calendar / IR contact

Financial calendar 2021

25 March 2021 Annual Report 2020 Analyst conference call

12 May 2021

Interim Statement January - March 2021

Analyst conference call

10 June 2021

Annual General Meeting (AGM)

12 August 2021

Half-year Financial Report January - June 2021

Analyst conference call

11 November 2021

Interim Statement January - September 2021

Analyst conference call

12 November 2020 Analyst conference call on the interim results January to September 2020

IR contact
Phone:	+49	40 3088 3100
Fax:	+49	40 3088 55 3100
E-mail:	investor-relations@hhla.de
Web:	www.hhla.de

Interim Statement 1-9 | 2020

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HHLA - Hamburger Hafen und Logistik AG published this content on 12 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 November 2020 11:54:02 UTC

Market Closed - Xetra Other stock markets 11:36:12 2024-04-25 am EDT			After market 03:24:48 pm
16.74 ^EUR	0.00%		16.75	+0.06%

Apr. 23	Hamburger Hafen und Logistik Aktiengesellschaft agreed to acquire 51% stake in Roland Spedition Gmbh.	CI
Mar. 21	HHLA expects cargo withdrawal from Hamburg - uncertain business outlook	DP

Hamburger Hafen und Logistik Aktiengesellschaft agreed to acquire 51% stake in Roland Spedition Gmbh.	Apr. 22	CI
HHLA expects cargo withdrawal from Hamburg - uncertain business outlook	Mar. 21	DP
HHLA expects business to stabilize in 2024	Mar. 21	DP
Port group HHLA presents figures for 2023	Mar. 21	DP
Hamburger Hafen und Logistik Aktiengesellschaft Provides Earnings Guidance for the Year 2024	Mar. 20	CI
Transcript : Hamburger Hafen und Logistik Aktiengesellschaft, 2023 Earnings Call, Mar 21, 2024	Mar. 20
Union criticizes port strategy of the traffic light	Mar. 20	DP
Wissing: Federal government accepts joint responsibility for ports	Mar. 20	DP
Seaports feel the effects of weak foreign trade	Mar. 11	DP
Hamburg: Experts have doubts about MSC's planned investment in HHLA	Mar. 06	DP
Hamburg: Experts partly skeptical about MSC's planned entry into HHLA	Mar. 06	DP
Expert hearing on the MSC deal in the parliament	Mar. 06	DP
Industry calls for more commitment to the Port of Hamburg	Mar. 04	DP
Tschentscher promotes MSC deal - Opposition against plans for HHLA	Feb. 28	DP
Tschentscher speaks to parliament in favor of MSC joining HHLA	Feb. 28	DP
Tschentscher makes government statement on MSC's entry into HHLA	Feb. 27	DP
Hamburg to develop EU's first test airspace for drone flights	Feb. 27	DP
Port of Hamburg achieves worst result in almost 15 years	Feb. 27	DP
Less cargo handled in the Port of Hamburg	Feb. 27	DP
Port of Hamburg presents throughput figures for 2023	Feb. 26	DP
Hamburger Hafen und Logistik Aktiengesellschaft Reports Earnings Results for the Full Year Ended December 31, 2023	Feb. 25	CI
Port workers protest loudly against MSC deal	Feb. 21	DP
Hundreds protest against MSC deal in the Port of Hamburg	Feb. 21	DP
Verdi to protest again against MSC deal	Feb. 21	DP
Verdi again calls for protests against MSC deal	Feb. 20	DP

	1st Jan change	Capi.
HAMBURGER HAFEN UND LOGISTIK AG	-0.12%	1.35B
ADANI PORTS & SPECIAL ECONOMIC ZONE LIMITED	+29.89%	34.23B
SHANGHAI INTERNATIONAL PORT (GROUP) CO., LTD.	+16.53%	18.22B
DP WORLD PLC	0.00%	13.47B
MISC	+8.37%	7.38B
ABU DHABI PORTS COMPANY	-18.18%	7.36B
QINGDAO PORT INTERNATIONAL CO., LTD.	+22.22%	6.94B
JSW INFRASTRUCTURE LIMITED	+21.08%	6.11B
CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED	-3.20%	5.45B
LIAONING PORT CO., LTD.	-4.84%	4.06B

Hamburger Hafen und Logistik AG

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Marine Port Services

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