EMC — Investor Presentation 2019

Jul 26, 2019

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Marine Corp.
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2019
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․ ․ Innovation Teamwork 1 Challenge

Legal Disclaimer

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• The information contained in this presentation, including all forward-looking information, is subject to change without notice, whether as a result of new information, further events or otherwise, and Evergreen Marine Corp. (the “Company”) undertakes no obligation to publicly update or revise the information contained in this presentation.

• Investor should not regard the above forward-looking information as legally binding but as information subject to change. No guarantees regarding the completeness, accuracy, and reliability of information contained are made explicitly or implicitly. They are not intended to represent complete statement of the company, industry or future development..

• of this document not be or for

• Any part may reproduced directly indirectly any purpose and distributed or transmitted to any other person (whether within or outside the company or company).

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Outline

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1. Company Overview

2. Financial Results 3. Container Shipping Outlook

4. Business Strategy

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1. Company Overview

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Evergreen Line Ranked
7 [th] in Capacity
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Intensive Service

Network

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Continuous Fleet Renovation

Evergreen Line currently ranked 7th in Capacity

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Source ： Alphaliner Monthly Monitor Report July 2019

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Intensive Service Network

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loops
2 loops Trans- Atlantic
80+ loops
loops
Intra-Asia, Persian
loops Gulf
3 loops
1 loop 8 loops
Asia - Australia
North America -South America 4 loops Asia- South America
Asia- Africa
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Continuous Fleet Renovation

On Order 63 vessels/ 383,384TEU

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Future
Delivery Plan
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Year 2019 (2nd Half)

• 、 、

• •2 x 2800TEU 3 x 20000TEU 3 x

• 1800TEU 。

Year 2020-2022

• 、 、

• •20 x 12000TEU 21 x 1800TEU

、 10 x 2500TEU 4 x 2500TEU

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Evergreen Group Capacity 207 vessels/ 1,277,133TEU (Up to 20190701)

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Group
Capacity to
be:
1.66MTEU
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2.Finacial Results

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Steady Growth in
Revenue
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Hovering Burden of Fuel
Cost
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Better YoY Profit Margin

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(2019Q1 VS. 2018Q1) Consolidated Operating Revenue Analysis

Volume : 2019Q1 1.6452 Million TEU 2018Q1 1.4662 Million TEU

 The Volume increased by 12.21%.

 Average O/F Rate (USD/ TEU) increased by 3.46%.

• Marine Freight Income increased by 21.90%.

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Consolidated Main Operating Costs Analysis

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NT $ 100 Million

• 2018Q1 V.S. 2019Q1

• ‾ The Volume increased by

12.21%.

‾ Port/ Terminal Charge increased by 7.49%.

• ‾ Connecting Expense (transshipment/ logistic) increased by 12.99%.

• ‾ Slottage Expense decreased by 21.21%.

• ‾ Fuel Cost increased by 27.38%.

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Consolidated Income Statement

Unit: NT$ Millions	Unit: NT$ Millions	Unit: NT$ Millions	Unit: NT$ Millions
Item	2018Q1	2019Q1	Growth %
Operating revenue	36,840.69	45,697.05	24%
Gross Profit (Loss)	909.15	3,424.76	277%
Operating Income (Loss)	(22.60)	1,303.08	5,866%
Net Income (Loss)	15.88	463.91	2,821%
Profit(Loss), attribute to owners of the parent	137.26	559.57	308%
EBITDA	2,341.55	6,869.42	193%
EPS	0.03	0.12

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457
368
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Unit: NT$ 100 Millions

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Consolidated operating income, gross profit margin and net income margin

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NT $ 100 Millions

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3. Container Outlook Shipping

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Moderate Growth in
World Economy
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Narrowing Gap between Supply and Demand

IMO2020 Low Sulfur Regulations

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Moderate Growth in World Economy

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Emerging Market and
World EconomyAdvanced economies
developing economies

Source ： 2019.07 IMF – World Economic Outlook

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IMF latest World
Economic Outlook:
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• World GDP growth Forecast: 2019 3.2% 2020 3.5%

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Forecast of economic
growth rate of the world's
leading economies:
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• U.S.A.: 2019 2.6%, 2020 1.9% Euro Area: 2019 1.3%, 2020 1.6% China: 2019 6.2%, 2020 6.0%

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Narrowing Gap between Supply and Demand

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Alphaliner forecasts 2019 market
volume growth slightly lower than
total capacity growth rate.
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Demand 2.5% vs Supply 3.1%

Estimated 2020 market volume growth will get closer to total capacity growth

Demand 3.1% vs Supply 3.5%

Source ： Alphaliner Monthly Monitor Report July 2019

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IMO2020 Low Sulfur Regulations

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IMO 2020 Regulations

From January 2020, the IMO will ban ships from using fuels with a sulfur content above 0.5%. (0.1% cap has been implemented in Emission Control Areas since July 2015.)

Shipping Lines’ 3 Options: Using alternative energy, such as Installing Sox Using 0.5% VLSFO Liquefied Natural scrubber Gas (LNG)

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4. Business Strategy

Steer Along the Trade War

Build Ships with Scale/Fuel Economy

Install Scrubber to Save Earth and Cost

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Enhance Cloud Shipping E-Service

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Steer Along the Trade War

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Far East to U.S.
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Although China
export volume to
US drops 5.22%,
the total market
volume slightly
increases 1.09%.
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China: volume drops SE Asia: volume adds
5.2%, share drops 4.3% 21.5%, share adds 3.4%
2014 – 2018 2018 (01-05) 2019 (01-05) 2014 – 2018 2018 (01-05) 2019 (01-05)
share: share: share: share: share: share:
68.97% 68.49% 64.21% 15.76% 16.98% 20.40%
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Source ： Datamyne July 2019
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Big volume growth in Vietnam, Thailand, and Malaysia.

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Building New Ships with Scale and Fuel Economy

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Evergreen C-Type Profile

Evergreen B-Type Profile

Evergreen O-Type Profile

• Number: 20 vessels

• •LOA/Beam: 211m/32.80m

• •Design Draft: 10.00m

• Container Intake: 2,800TEU

• •Vessel Feature: Advanced wide beam design; max ship speed up to 21.8 Knots.

• •Delivery Year: 2017 - 2019

• Number: 14 vessels

• •LOA/Beam: 194.90m/32.20m

• •Design Draft: 10.00m

• Container Intake: 2,500TEU

• •Vessel Feature: Advanced wide beam and shorter LOA design for shallower draft and length restricted ports in the intra-Asia trade；max ship speed up to 20 Knots.

• •Delivery Year: 2021 - 2022

• Number: 24 vessels

• •LOA/Beam: 171.90m/28.40m

• •Design Draft: 8.50m

• Container Intake: 1,900TEU

• •Vessel Intake: Bangkok-max design for shallower draft with better loadability；max ship speed up to 20 Knots.

• •Delivery Year: 2019 - 2022

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Building New Ships with Scale and Fuel Economy

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Sample CGI Source: SHI
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Evergreen G-Type Profile

Evergreen F-Type Profile

• Number: 20 vessels

• Number: 11 vessels

• •LOA/Beam: 333.90m/48.40m

• •LOA/Beam: 400.00m/58.80m

• •Design Draft: 13.00m

• •Design Draft: 14.50m

• Container Intake: 12,000TEU

• Container Intake: 20,000TEU

• •Vessel Feature: Ship hull design adopts a twin-island concept which enhances navigation visibility and loadability, and can pass through the Panama Canal; max ship speed up to 23 knots.

• •Vessel Feature: ship hull with optimized design that requires minimum ballast water to maximize loadability; max ship speed up to 22.8 Knots.

• •Delivery Year: 2018 - 2019

• •Delivery Year: 2020 - 2021

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Install Scrubber to Save Earth and Cost

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Open-looped scrubber is already scientifically certified of no adverse impacts on environment by “CSA(Clean Shipping Alliance)”, “Danish Ministry of the Environment” and “Japanese Ministry of Land, Infrastructure, Transportation and Tourism”.

To meet the requirement of upcoming 2020 Global Sulphur Cap, Evergreen will install approved exhaust gas cleaning scrubbers on major fleet ships to clean the emissions.

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Install Scrubber to Save Earth and Cost

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Evergreen’s Plan on Scrubber Installation

• Owned: incumbent x 60 + newbuild x 12

• Chartered: incumbent x 21 + newbuild x 46

• Totally 139 vessels(53 of which will be completed before January 1st, 2020.)

Other Liners also in Pursuit

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• Alphaliner: by end of May 2019, totally 844 container ships (8.09 mTEU) have or are about to install scrubbers, representing 16% of global container fleet or 35.7％ of its capacity.

• (MSC:200, CMA:100+, Maersk: 70+, HMM: 50+, PIL: 40+, COS:23, HPL: 22, YML: 20, ONE:10, WHL:8)

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Install Scrubber to Save Earth and Cost

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– Estimated average price gap ( during 2019 2024) between HSFO and 0.5%VLSFO could be $160/Ton, so vessels equipped with scrubbers can continue to use cheaper HSFO to save fuel cost.

Year	**Sing380 **	0.5 VLSFO	Diff.	300 350 400 450 500 550 600	5 Years Forward Curve	5 Years Forward Curve	5 Years Forward Curve	5 Years Forward Curve	5 Years Forward Curve	5 Years Forward Curve
2019	$373	$545	$172
2020	$330	$563	$233
					diff	diff	diff	diff	diff	diff
2021	$344	$540	$196
					USD17	2/mt USD233	/mt USD196/	mt USD153/	mt USD114/	mt USD94/mt
2022	$357	$510	$153
2023	$376	$490	$114
2024	$396	$490	$94
					2019 2020 2021 2022 2023 2024 Sing380 0.5 VLSFO
Avg.	$363	$523	$160
based on Brent USD65/barrel

Source ： World Fuel Service

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Enhance Cloud Shipping E-Service

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i-B/L

• i-B/L provides paperless BL transaction and alteration to streamline customer’s shipping process and efficiency.

• Through Evergreen’s own platform “ShipmentLink”, customers can generate iB/L certified by banks and insurance companies, to speed up transactions such as title of goods, payment, and cargo pickup.

i-Dispatch

• i-Dispatch facilitates documents like packing lists, commercial invoices, certificates of origin, licenses and inspection reports, etc., to be transferred in an encrypted form to keep commercial confidentiality.

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Enhance Cloud Shipping E-Service

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Digital Container Shipping Association (DCSA) is formed and participated by
9 major container shipping lines to set up standardization of international
container shipping by communicating with governments and authorities to
streamline the international shipping process and digitalization.

DCSA is approved by concerned authorities in EU, US, and China, to be
operated from July 2019, aiming to create common information technology
standards, such as port codes and B/L process for digital platforms, to
ensure interoperability through standardization and make the industry more
efficient for both customers and shipping lines.

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Evergreen Line as one of the 9 members of DCSA, is committed to creating
more convenient shipping environment and conditions for cargo owners.

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Thank You!

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http://www.evergreen-marine.com

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