Hapag-Lloyd AG — Investor Presentation 2016

Mar 2, 2016

Investor Presentation – Preliminary Financials FY 2015

1 2 March 2016

Hapag-Lloyd made material progress in 2015

STRATEGIC HIGHLIGHTS

• CUATRO: The integration is completed substantial portion of synergies already realized in FY 2015
• Net synergies of USD 400 m to be achieved in 2016
• OCTAVE: The additional cost saving program OCTAVE is on track and made a noticeable contribution
• In Q4, OCTAVE 2 has been launched 8 additional work streams to further improve profitability
• Close the Cost Gap: Further investments in the modernization and renewal of our fleet
• Acquisition of 5x 10,500 TEU vessels and 2x 3,500 TEU vessels particularly suited for the Latin America trade
• Compete to Win: Increase in revenue quality and better utilization of stronger market presence
• Improve customer service, raise percentage of highervalue cargo and increase customers' contribution margin
• IPO: In a challenging stock market environment, Hapag-Lloyd completed its IPO in November 2015

EBITDA increased to USD 922 m (margin: 9.4%)

• Hapag-Lloyd significantly increased its EBITDA to USD 922 m (margin: 9.4%) in 2015 – the EBIT reached USD 407 m (margin: 4.1%)
• Transport volume increased to 7.4 TEU m (2014: 5.9 TEU m), while freight rate decreased to USD 1,225/TEU (2014: USD 1,427/TEU)
• Next to reduced bunker prices, the significant result improvement stems from our strategic measures such as cost synergies due to the CCS1) integration and the OCTAVE program
• We plan to further improve our operating result by the full realization of synergies, further cost savings from our strategic initiatives, an expected volume growth and an improvement in revenue quality -509

1) CSAV container shipping activities

Agenda

A. Industry – Our Positioning

• B. Strategy Our "Way Forward"
• C. Financials Strong Earnings Growth

Since our IPO, some peer results have been under pressure especially due to freight rates and very low volume growth

Average carrier operating margins HL EBIT margin

Global freight rate [USD / TEU]

Comments

• In 2015 the total container transport volume increased by +1% compared to 2014
• Market freight rates decreased throughout 2015 and were down -25% in Q3 2015 vs. Q3 2014
• Average carrier operating margins are negative at c. -4% in Q4 2015 while HLAG maintained above average with an EBIT margin of 0.8% in Q4 2015

5 1) Includes Hapag-Lloyd, Maersk, K-Line, APL and OOCL 2) Includes financial statements of Hapag-Lloyd, Maersk, Hanjin, MOL, APL, NYK and K-Line Source: Company information, Alphaliner, CTS, Drewry Container Forecaster Q4 2015c

Global capacity management

6 Source: Alphaliner weekly newsletter; MDS Transmodal, various months; Clarksons; Drewry Hapag-Lloyd's balanced exposure to global trade puts us in a strong position to be successful in tough market conditions

Agenda

• A. Industry Our Positioning
• B. Strategy – Our "Way Forward"
• C. Financials Strong Earnings Growth

We have defined our "Way Forward" – Five key initiatives delivering significant contributions with further upside

Significantly grow the business and increase profitability

Project CUATRO: Integration completed – USD 400 m net synergies will be achieved in 2016

• company with global network
• 38 services worldwide

• Targeted net synergies of EUR218m in 2008

• Chilean container shipping company in Valparaíso

• 39 services worldwide
• Targeted net synergies of USD400m in 2017

Transfer of operating business completed

USD400m net synergies targeted

Project OCTAVE: USD 200 m cost improvements across all operation areas – Project OCTAVE 2 launched

Eight clear workstreams defined

Procurement & Inland	Inland Pricing & Steering
	Bunker Procurement
Fleet & Network	Fleet Renewal
	Fleet Refurbishment
	Service Structure
Sales & Product Portfolio	Utilisation
	Special Cargo
	Spot Market

USD200m cost improvements

OCTAVE 2 program launched in Q4

Improvement potential identified in 8 additional work streams	Transshipment Weight & Utilization Service Portfolio G6 Enhancements Procurement Stowage Ship Size Demurrage & Detention
---------------------------------------------------------------------------	-----------------------------------------------------------------------------------------------------------------------------------------------

Retiring of "Old Ladies" successfully completed

Decommission	Jan	Feb	Mar	Apr	May	Jun	Jul
Bonn Express
Paris Express
Hoechst Express
Atlanta Express
Kiel Express
Boston Express
Dresden Express
Portland Express
Livorno Express
Norfolk Express
Stuttgart Express
Sydney Express
Wellington Express
Canberra Express
Heidelberg Express
Fremantle Express

Close the Cost Gap: Investments done throughout the cycle – Further investments to come

Compete to Win: Significant potential to further optimize customer profiles and cargo mix

13 Source: Company information

Development Pilots and Deep Dives (DD) Global Roll-out

Agenda

• A. Industry Our Positioning
• B. Strategy Our "Way Forward"
• C. Financials – Strong Earnings Growth

Strong increase in transport volume (+25.3%) driven by integration of CSAV container shipping activities

Transport volume [TTEU]

1,000 1,300 1,200 1,100 1,600 1,500 1,400 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ø 1,482 Ø 1,427 Ø 1,225 2013 2014 2015 -14.1%

Freight rate [USD/TEU]

FX-rate (USD/EUR)

Bunker price [USD/mt]

Hapag-Lloyd significantly increased its EBITDA to USD 922 m (EBITDA margin: 9.4%) in the full-year 2015

Operational KPIs
	FY 2015	FY 2014	∆/%
Transport volume [TTEU]	7,401	5,907	+1,494 / +25.3%
Freight rate [USD/TEU]	1,225	1,427	-202 / -14.2%
Bunker price [USD/t]	312	574	-262 / -45.6%
Exchange rate [EUR/USD]	1.11	1.33	-0.22 / -16.5%
Revenue [USD m]	9,814	9,046	+768 / +8.5%
EBITDA [USD m]	922	131	+791 / +603.8%
EBITDA margin	9.4%	1.5%	+7.9 ppt
EBIT [USD m]	407	-509	+916 / n.a.
EBIT margin	4.1%	-5.6%	+9.7 ppt

Comments

■ 2015 first fiscal year with full reflection of CSAV transaction

Revenue

■ Transport volume increase and lower freight rate influenced by the CCS integration

EBITDA

• Step-change in FY 2015 due to significant synergies and cost savings from Project CUATRO & Project OCTAVE
• EBITDA margin at 9.4% for full-year 2015

EBIT

• EBIT at USD 407 m, up from USD -509 m in full-year 2014
• EBIT margin at 4.1%

Note: Hapag-Lloyd reports in EUR. EBIT for peer converted based on the respective average exchange rate for H1 2014, FY 2014, H1 2015 and FY 2015. For selected peers including terminals and other business if no liner figure available 1) H1 2014 excl. CCS and FY 2014 including 1M of CCS

17 Source: Company information; company reports

Optimization of capital structure and financial position with further tangible savings in 2015

Strong liquidity reserve [USDm] Successful financial measures

¹ Debt repricing

Reduced interest by USD 40 m (over remaining life)

² Bond optimization Saving of bond interest of USD 12 m p.a.

³ Rating upside

Positive outlook on the back of the IPO

Unused credit lines Cash and cash equivalents

18 Source: Company information

Hapag-Lloyd executed IPO in Q4 2015
	Basic data	Stock trading (since 6-Nov)
Stock exchange	Frankfurt Stock Exchange Hamburg Stock Exchange	120 100
Market segment	Regulated market (Prime Standard)	80
ISIN	DE000HLAG475	60
WKN	HLAG47	40 6-Nov 6-Dec 6-Jan 6-Feb Hapag-Lloyd Maersk Evergreen
Ticker Symbol	HLAG	NOL OOCL SDAX DAX Global Shipping
Primary listing	6. November 2015	Shareholder structure
Placement price	EUR 20	Free float
Number of shares	118,110,917	CSAV 15.5% 31.4%
Primary	USD 300 m	TUI 12.3%
Lock-up	4 May 2016	20.2% 20.6% HGV Kühne

19 Source: Company information, Bloomberg (26 February 2016)

Industry highly correlated with global growth – Short term outlook on the lower end of mid term 3-5% range

Volatility of spot rates will remain in the short term – Hapag-Lloyd rates are more stable than SCFI

Shanghai – Latin America (SCFI)

Comments

• Shanghai Containerized Freight Index (SCFI) only reflects Shanghai outbound rate development
• Freight rates especially on Asia / Europe trade remain volatile
• Freight rates on Transpacific trade tend to be less volatile while freight rates on Latin America show a downward trend
• Hapag-Lloyd freight rates with more stable development

Source: Company information, Shanghai Shipping Exchange (26 February 2016)

* Hapag-Lloyd trade definition

Current M&A deals Changing landscape in a fragmented market…

• All-cash acquisition (0.96x P/B)
• Closing expected by mid 2016
• APL to exit G6 earliest in 2017

+

• 2 state conglomerates merge
• COSCO to charter and operate CSCL's ships and containers
• Influences alliance composition

203 357 349 618 509 715 402 532 637 958 ^{397 493 575 558 544} 966 2,677 2,880 Wan Hai K-Line Hyundai ZIM PIL Hanjin Hamburg Süd CSCL 2,362 COSCO MOL APL 1,575 OOCL Maersk MSC CMA CGM Hapag-Lloyd Evergreen NYK UASC 544 1,818 860 715 Yang Ming …including alliance dynamics 2M Non-alliance carriers Ocean Three CKHYE G6 3,042 3,533 3,390 5,557 Ocean 3 Alliance CKYHE Alliance G6 Alliance 2M Alliance

					Vessel fleet structure as of 30 September 2015
		Owned1)	Chartered4)	Current fleet	Current orderbook	Fleet age [% of total capacity]
	Capacity [TEU]	131,674		131,674	52,945		Average age 7.2 years5)
>10,000 TEU	Vessels	10		10	5	MODERN
	Capacity [TEU]	243,614	68,036	311,650		74%	45% 26% 55%	0%
8,000 – 10,000 TEU	Vessels	28	8	36
	Capacity [TEU]	49,743	38,905	88,648		≤10 years	10-20 years	>20 years
6,000 – 8,000 TEU	Vessels	7	6	13			Fleet ownership [%]
	Capacity [TEU]	68,154	209,094	277,248		Owned 55%		Chartered 45%
4,000 – 6,000 TEU	Vessels	15	44	59			Average vessel size [TEU]
	Capacity [TEU]	26,784	76,141	102,925			+450	+2,161
2,300 – 4,000 TEU	Vessels	9	26	35		5,406	4,956
	Capacity [TEU]	3,918	29,952	33,870				3,245
<2,300 TEU	Vessels	2	20	22		HL	Top 20	World Fleet
	Capacity [TEU]	523,8872)	3) 422,128	946,015	52,945	Total container fleet
Total	Vessels	712)	1043)	175	5	1.6m TEU	Owned 40%	Leased 60%

1) Incl. 3 long-term finance leases 2) Incl. 2 chartered -out 3) Incl. 1 chartered-out 4) includes long-term (>3 years), mid-term (1-3 years) and short-term (<1 year) charters 5) Weighted average age by capacity

24 Source: Company information, MDS Transmodal October 2015

	EUR Bond 2019	EUR Bond 2018	USD Bond 2017
Issuer	Hapag-Lloyd AG	Hapag-Lloyd AG	Hapag-Lloyd AG
Volume	EUR 250 m	EUR 400 m	USD 125 m1)
Minimum order	100,000 EUR	100,000 EUR	150,000 USD
Issue date	November 20, 2014	September 20, 2013	October 01, 2010
Maturity date	October 15, 2019	October 01, 2018	October 15, 2017
Redemption prices	as of Oct 15, 2016: 103.750% as of Oct 15, 2017: 101.875% as of Oct 15, 2018: 100%	as of Oct 01, 2015: 103.875% as of Oct 01, 2016: 101.938% as of Oct 01, 2017: 100%	as of Oct 15, 2015: 102.4375% as of Oct 15, 2016: 100%
Coupon	7.50%	7.75%	9.75%
Coupon payment	April 15 and October 15	January 15 and July 15	April 15 and October 15
ISIN	XS1144214993	XS0974356262	USD33048AA36
WKN	A13SNX	A1X3QY	A1E8QB
Listing	Open market of the LxSE	Open market of the LxSE	Open market of the LxSE
Trustee	Deutsche Trustee Company Limited	Deutsche Trustee Company Limited	Deutsche Bank AG, London Branch

1) Partially redeemed by nominal USD 125 m on 30 Dec 2015

25 Source: Company information Long-standing and diversified customer base of blue chip customers and a diversified base of goods transported

Hapag-Lloyd has a highly diversified customer base: No customer has a share greater than 5% of HL's revenue

Balanced portfolio of goods transported2)… … in a diversified customer portfolio3)

Henrik Schilling

27

Senior Director Investor Relations

Tel +49 40 3001-2896

Fax +49 40 3001-72896

Henrik.Schilling@hlag.com

http://ir.hapag-lloyd.com/websites/hapaglloyd/English/0/ir-home.html

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