Eimskipafélag Íslands — Earnings Release 2013

Feb 28, 2014

28 February 2014

Financial results 2013 and fourth quarter results

Agenda

1. Highlights

• 1. Financial results 2013
• 1. Outlook
• 1. Q&A

Key highlightsQ4 and FY

i l lio EU R m ns	Q 4 2 0 1 3	Q 4 2 0 1 2	ha C ng e	2 0 1 3	2 0 1 2	ha C ng e
O i t p e r a n g r e v e n u e	1 0 6. 9	1 0 9 7.	( ) % 1. 0	4 3 3. 8	4 2 3. 7	% 2. 4
E B I T D A	7. 9	6. 3	2 3 % 5.	3 7. 1	3 6. 2	2. % 4
E B I T	2. 4	0. 2	-	1 5. 9	1 3. 7	1 5. 9 %
C A P E X	8 5.	0. 2 1	( % ) 4 3. 1	2 9. 3	0. 5 5	( % ) 4 2. 0
h f i i i i N t t t t e c a s r o m o p e r a n g a c v e s	2 7.	1 2. 7	( ) % 4 3. 7	2 0. 5	3 6. 9	( ) % 4 4. 3
l T t t o a a s s e s	3 1 4. 4	3 1 3. 3	0. 3 %	3 1 4. 4	3 1 3. 3	0. 3 %
i i E t t q u y r a o	% 6 5. 5	% 6 3. 7	2. 7 %	% 6 5. 5	% 6 3. 7	2. 7 %

Key highlights of 2013

• • Operational results in 2013 reflect the tough economic environment in Iceland
• Performance of Eimskip's operations in Iceland below expectations, but other areas in the home market performed better
• Downward trend in international sea freight prices affect the company's revenues
• Adverse weather conditions in the North Atlantic and mechanical issues with a few of our vessels in Q4 put our sailing schedule out of order and negatively impacted our results
• • Increase in transported volume from 2012
• North Atlantic liner services up by 3.4% and reefer forwarding up by 7.9%
• Total volume related to Iceland similar to previous year but growth in the Faroe Islands, Norway and in Transatlantic transport
• Transported volume in forwarding in Intra Europe and Intra Asia has increased

Key highlights of 2013

• • Substantial changes in Eimskip's sailing schedule in March 2013
• Increased capacity, increased fixed cost and good market reaction
• Adjustments made in February 2014 with a new sailing route, the Gray line, to increase flexibility and service reliability
• It takes time to grow revenues in a new and more powerful system
• • The two new container vessels
• Total negotiated reduction of the vessels' purchase price is USD 10.8 million due to estimated delay of delivery until Q2 and Q4 this year
• The delay will neither affect the sailing schedule nor services to Eimskip's customers
• • Opening of new offices
• Three new offices were opened during the year, in Murmansk in Russia, in Gdynia in Poland and in Portland, Maine in the US
• •Proposed dividend payment for the year 2013 represents 30.0% of net earnings of the year

Transported volume 2009 to 2013Changes from previous year

Transported volume in 2013 by quartersChanges from the same period 2012

• •Iceland related trade is slowly improving

• • Increased volume in the Faroe Islands, Norway and Transatlantic

• • Increased volume on shorter transit routes, i.e. Intra Europe and Intra Asia

• • Lower rates on shorter transit routes explain lower revenues

Operating revenue by segmentsLiner services and forwarding services

Operating profit, EBITDA, by segmentsLiner services and forwarding services

Geographical split of operating revenueLess than half of the operating revenue is related to Iceland

Freight index China - EuropeFluctuations in pricing from the deep sea carriers 2011 to 2014

• 1. Highlights
• 2. Financial results 2013
• 1. Outlook
• 1. Q&A

Income statementComparison between years affected by one-off items in 2012

EUR tho nds usa	Q 4 2 01 3	Q 4 2 01 2	Cha nge	%	20 13	20 12	Cha nge	%
Op tin era g r ev en ue	10 6, 87 5	10 7, 92 8	(1,0 53)	(1.0 %)	43 3, 82 4	42 3, 65 3	10, 171	2.4 %
tin Op era g e xp en se s	98 99 6 ,	10 1, 64 1	(2,6 45)	(2.6 %)	39 6, 77 0	38 7, 48 5	9,2 85	2.4 %
EB ITD A	7, 87 9	6, 28 7	1,5 92	25. 3%	37 05 4 ,	36 16 8 ,	886	2.4 %
nd De cia tio iza tio ort pre n a am n	( ) 5, 48 7	( ) 6, 11 8	631	3% 10.	( ) 21 14 3 ,	( ) 22 43 6 ,	1,2 93	% 5.8
IT EB	2, 39 2	16 9	2,2 23	-	15 91 1 ,	13 73 2 ,	2,1 79	15. 9%
fin (ex ) Ne inc t an ce om e pe ns e	( ) 84 2	( ) 1, 04 9	207	19. 7%	( ) 3, 23 4	( ) 2, 98 3	(25 1)	(8.4 %)
ha f e f a d c S ing cia te re o arn s o sso om pa ny	2	0	2	-	2	0	2	-
nin be fo inc Ne t e e t ar gs re om ax	1, 2 55	( ) 88 0	2,4 32	-	12 67 9 ,	10 9 74 ,	1,9 30	18. 0%
Inc e t om ax	( ) 38 4	( ) 11 3	(27 1)	239 .8%	( ) 1, 86 2	1, 98 2	(3,8 44)	-
nin fo he rio d Ne t e r t ar gs pe	1, 16 8	( ) 99 3	2,1 61	-	10 81 7 ,	12 73 1 ,	(1,9 14)	(15 ) .0%

• Revenue affected by prices, cargo combination and currency exchange rates

•

•

•

• EBITDA dropped by 22.8% in Q4, taking into account one-off items related to the IPO and due to costs related to the share options forfeited by the executive management in Q4 2012
• EBITDA for the year affected by decreased import to Iceland, changed sailing schedule and operational incidents in Q4
• Reduction in depreciation since part of the company's vessels are depreciated to residual value
• • Higher net finance expense due to increased negative changes in currency exchange between years, but interest expense on long-term loans has decreased
• • Income tax benefit in 2012 due to EUR 3.6million recognized tax losses carried forward in a subsidiary

Operating revenue and EBITDA by quartersAdjusted for one-off items in 2011 and 2012

Balance sheet

Increase in non-current assets and net debt due to investments

ho nd EU R t usa s	3 1. 1 2. 2 0 1 3	3 1. 1 2. 2 0 1 2	ha C ng e	%
No t a ts n- cu rre n ss e	2 1 6, 0 9 6	2 0 9, 7 2 3	6, 37 3	% 3.0
Cu t a ts rre n ss e	9 8, 2 6 9	1 0 3, 8 5 5	( ) 5, 28 9	( ) 5.1 %
l a To ta ts ss e	3 1 4, 3 6 5	3 1 3, 2 8 1		0.3 %
l e To i ta ty q u	2 0 5, 7 7 1	1 9 9, 5 9 9	6, 17 2	3.1 %
l ia b i l i ies No t t n- cu rre n	4 4, 4 3 6	5 1, 0 8 8	( ) 6, 65 2	( ) 13 .0%
l b l Cu ia i i ies t t rre n	6 4, 1 5 8	6 2, 5 9 4	1, 56 4	% 2.5
l l b l ia i i ie To ta t s	1 0 8, 9 4 5	1 1 3, 6 8 2	( ) 5, 08 8	( ) 4.5 %
l e i d l ia b i l i ie To ta ty t q u a n s	3 1 4, 3 6 5	3 1 3, 2 8 1	1, 08 4	0.3 %

• • Increase in non-current assets due to investments in vessels and other operating assets
• • Equity ratio was 65.5% at year-end compared to 63.7% at the end of 2012
• • Total interest-bearing debt amounted to EUR 59.4 million at year-end and is unchanged from 2012
• • Current interest-bearing debt has increased due to a EUR 7.6 million bridge loan taken to finance the vessel building project in China until the end of 2014 and the company has an agreement in place for long-term financing with ten year term
• • Net debt amounted to EUR 33.0 million at yearend compared to EUR 22.0 million at year-end 2012 and increased due to investments

Financial ratios

Net debt / EBITDA (adjusted)

Net debt and equity ratioEUR millions

Cash flowsDecreased cash due to investments

ho nds EU R t usa	Q 4 2 0 1 3	Q 4 2 0 1 2	Ch an ge	%	2 0 1 3	2 0 1 2	Ch an ge	%
h f low fro Ca io t s s m o p er a ns	7, 1 7 2	1 2, 7 4 9	( 7) 5, 57	( ) 43 .7%	2 0, 5 3 7	3 6, 8 7 2	( 5) 16 33 ,	( ) 44 .3%
ing iv i ies Inv t t t es a c	( ) 9 8 0 4,	( ) 8, 9 2 1	3, 21 2	39 .2%	( ) 2 6, 6 0 1	( ) 3 9, 8 8 1	12 58 7 ,	32 .1%
F in ing iv i ies t t an c a c	( ) 2, 0 4 9	3, 8 6 9	( 91 8) 5,	-	( ) 3, 5 5 8	( ) 4, 3 6 9	81 1	18 .6%
ha in h a d h e iv le C ts ng es ca s n ca s q u a n	1 4 3	8, 4 2 6	( 3) 8, 28	( ) 98 .3%	( ) 9, 6 2 2	( ) 6, 6 8 5	( 7) 2, 93	( ) 43 .9%
h a he be in ing f he io d Ca t t t s g n o p er	2 6, 6 7 6	2 8, 8 1 6	( 0) 2, 14	( %) 7.4	3 7, 3 0 4	4 3, 5 1 7	( 3) 6, 21	( ) 14 .3%
ha f luc Ex io te tu t c ng e ra a ns	( ) 4 4 9	6 2	( 1) 51	-	( ) 1, 3 1 2	4 7 2	( 4) 1, 78	-
h a he d f p io d Ca t t s e n o er	2 6, 3 7 0	3 7, 3 0 4	( 4) 10 93 ,	( ) 29 .3%	2 6, 3 7 0	3 7, 3 0 4	( 4) 10 93 ,	( ) 29 .3%

Cash flow bridge 2013EUR millions

CAPEX 2010 to 2013CAPEX affected by vessel investments

• 1. Highlights
• 1. Financial results 2013
• 3. Outlook
• 1. Q&A

Focus on optimizing Eimskip's sailing scheduleContinuous improvements

• • Adjustments were made in February 2014 to increase services and reliability
• • The main focus on liner services is promoting
• Iceland costal services, now connected to Immingham
• Services between the Faroe Islands and Scotland with a new route, the Gray line
• Northern Norway connected to US/Canada
• Transatlantic services
• Short sea services in Europe and US/Canada
• Bi-weekly sailings to and from US/Canada
• North Atlantic with Deep Sea Lines to Asia
• • The main focus in forwarding services is
• Europe to and from Asia
• Intra Asia
• Expanding commodity focus to fruit, vegetables and meat

The new vessel building project in ChinaEstimated delivery in second and fourth quarter 2014

In 2011 Eimskip and the shipyard Rongcheng Shenfei in China made an agreement of building two containervessels

•

• Each vessel is 875 TEU with container plugs for 230 reefer containers, deadweight is about 12 thousand tons and each vessel is 140.7 meters long and 23.2 meters wide
• • Eimskip has negotiated a total reduction of USD 10.8 million of the vessels' purchase price
• • Estimated delivery time of the first vessel is in the second quarter this year
• • A new amendment agreement for the second vessel has not been made but estimated delivery time is in the fourth quarter this year
• • Eimskip has already paid USD 28.6 million which equals about 78% of the altered purchase price of the vessels

Strengthening of infrastructureNew facilities in Iceland in 2013

• • In September Eimskip took into operation a new and advanced workshop in Sundahöfn in Reykjavík
• The size of the new building is 768m² and it is an extension to the company's old workshop building from 1982
• The workshop serves as a repair facility for the company's specialized transportation equipment
• • The company opened in October a new distribution center in Reydarfjördur on the east coast of Iceland
• The building is 668m² and contains chilled and cold storage facilities
• The distribution center is an important step in improving the handling of cargo and the company's services in the area

TVG-ZimsenNorth Atlantic Agency

• • TVG-Zimsen, Eimskip's subsidiary, has established a new cooperation platform called North Atlantic Agency, NAA
• • NAA is an integrated system between TVG-Zimsen, Eimskip in Iceland, Faroe Ship, Eimskip Norway, Eimskip in Newfoundland and Royal Arctic Line in Greenland
• • NAA is an agency platform and a bridge between group companies and close partners in the North Atlantic in order to provide services needed towards various kinds of vessels in the area
• • Expected increase of sailings in the North Atlantic in the future
• –Oil, gas and metal production
• – Number of cruise vessels in the North Atlantic will grow by 15 to 18% per year
• – Increased number of research vessels and surveillance vessels in the area and growing demand for trawler services
• –Future Arctic sailings
• •NAA will strengthen Eimskip's position in the North Atlantic

Competition Authority's dawn raid

Declined access to Eimskip's requested information was rescinded in January 2014

• • On 10 September 2013 the Icelandic Competition Authority exercised a dawn raid at the premises of Eimskipafélag Íslands hf. and its subsidiaries, Eimskip Ísland ehf. and TVG-Zimsen ehf. based on a ruling from the Reykjavik District Court
• •The dawn raid was exercised due to alleged breach of Article 10 and 11 of the Icelandic Competition Act
• •The companies requested access to the information behind the Competition Authority's request for court ruling
• •Access was declined and therefore the companies submitted an appeal to the competent authorities
• • Eimskip appealed the decision to the Competition Appeals Committee, which did in January 2014 rule that the decision of the Icelandic Competition Authority, declining access to the requested information, was rescinded and the Committee also ruled that the case should go back to the Icelandic Competition Authority for further assessment and a new decision on Eimskip's request for access to the information
• • Eimskip assumes that in the light of this new ruling the company will be granted access to the requested information and that such access will explain the reason behind the dawn raid
• • The subject matter of the investigation is still not known and any elaboration on the potential outcome of the investigation is premature
• • The investigation neither affected the company's income statement for the year 2013 nor its statement of financial position as at 31 December 2013

EBITDA forecast for 2014In the range of EUR 37 to 41 million

Eimskip's 100th Anniversary17 January 2014

• • Eimskip celebrated its 100th anniversary with a reception and a concert in Harpa on 17 and 18 of January 2014
• • Books have been published on Eimskip's history, its art collection and vessels
• • A 90 minute documentary film was shown on TV in February
• • The anniversary will be celebrated in various ways throughout the year, both in Iceland and overseas

Q&A

Disclaimer

Information contained in this presentation is based on sources that Eimskipafélag Íslands hf. ("Eimskip" or the "Company") considers reliableat each time. Its accuracy or completeness can however not beguaranteed.

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 thispresentation any further information on the Company or to make amendments or changes to this publication should inaccuracies or errors bediscovered 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 forward-looking statements which reflect the Company's current analysis of existing trends, information and plans. These forward-lookingstatements are subject to ^a number of risks and uncertainties that could cause actual results to differ materially depending on factors such asthe 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-lookingstatements 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.