Hapag-Lloyd AG — Investor Presentation 2018

Nov 8, 2018

Investor Presentation 9M 2018 Result Presentation

Hamburg, 8 November 2018

Opening Remarks

01 Highlights	 Positive EBIT of USD 359 m in 9M 2018 in a tough market environment  Introduction of a new and transparent Marine Fuel Recovery Mechanism in light of IMO 2020
02 Sector Update	 Stable demand despite rising geopolitical risks  Sector fundamentals remain favourable in the mid-term
03 Financials	 EBITDA of USD 972 m in 9M 2018 (USD 809 m in 9M 2017)  Good operating cash flow of USD 872 m (USD 751 m in 9M 2017)
04 Way Forward	 Continue to deliver on synergies, improve profitability and deleverage over time  Presentation of our strategy at the Capital Markets Day on 21 November 2018

Financial Highlights 9M 2018

Transport volume	Transport expenses per TEU	Freight rate
+26.6%	-1.3%	-3.4%
9M 2018: TEU 8.9 m	9M 2018: 926 USD/TEU	9M 2018: 1,032 USD/TEU
EBIT	EBITDA	Group profit
USD 359 m	USD 972 m	USD 15 m
3.6% EBIT margin	9.7% EBITDA margin	3.2% ROIC
Equity	Liquidity reserve	Net debt
USD 7.2 bn	USD 1.2 bn	USD 6.5 bn

1 Highlights

Total synergies of USD 435 m p.a. from 2019 onwards confirmed – synergy realisation going as planned

Synergy potential

• Approximately 90% of full run rate expected to be realized in 2018
• Visibility of synergies in P&L in 9M 2018 is limited due to counter effects in other cost items

1 Highlights

We have publicly launched our new Web Channel, Quick Quotes, in August

24/7 access to the Quick Quotes tool whenever and wherever

Reception of rate in immediate response

Quotation with just a few clicks

Access for all customers regardless of size or location Start of booking process follows directly

Flexible access to Hapag-Lloyds extensive global network

1 Highlights

Hapag-Lloyd is introducing a Marine Fuel Recovery mechanism

Hapag-Lloyd is simplifying its rate structure and will replace all existing fuel charges with a new Marine Fuel Recovery (MFR) mechanism

• Marine Fuel Recovery Mechanism will be gradually implemented from 1 January 2019
• It is causal, transparent and easy-to-understand
• It helps our customers predict and plan the price increases for their trade routes
• The MFR aiming at recovering costs arising from stricter sulphur regulation (IMO 2020)
• The calculation is based on average market data

2 Sector Update

Container shipping volume expected to grow on a healthy level of 4% to 5% between 2018E and 2020E, but geopolitical risks rise

7

2 Sector Update

Despite recent new orders, the orderbook remains on a historical low, idle fleet increased recently but is still on a low level

2009

2010

2011

2012

[TEU m, %]

8

2017

2016

2015

2014

2013

2 Sector Update

Very low scrapping pushes supply in 2018E, but mid-term supply/demand balance is further improving

Comments

• Drewry has revised its forecast for net capacity growth in 2018 again. Market analysts now expects scrapping at a rate of 0.3% of the current world fleet. Slippage remained unchanged.
• For 2020e, up to TEU 0.8 m out of TEU 1.7 m scheduled deliveries are not yet reflected in the current order book of TEU 2.4 m. To be delivered in 2020, vessels will have to be ordered in Q4 2018 or beginning of Q1 2019 latest in order to arrive at Drewry delivery estimates.

Scrapping

9

Supply / Demand Balance

Source: Drewry (Forecaster 3Q18), IHS (October 2018), Transmodal (October 2018) 1) Slippage to following year has been subtracted from scheduled deliveries 2) Estimation; not yet reflected in global orderbook

10

Positive EBITDA of USD 972 m in the first nine months of 2018

Operational KPIs

	Q3 2018	Q3 2017	YoY	9M 2018	9M 2017	YoY
Transport volume [TTEU]	3,052	2,807	+9%	8,900	7,029	+27%
Freight rate1) [USD/TEU]	1,055	1,073	-2%	1,032	1,068	-3%
Bunker [USD/mt]	446	308	+45%	406	311	+31%
Exchange rate [USD/EUR]	1.16	1.17	n.m.	1.19	1.11	n.m.
Revenue [USD m]	3,542	3,268	+7%	10,072	8,168	+23%
EBITDA2) [USD m]	457	412	+11%	972	809	+20%
EBITDA margin2)	12.9%	12.6%	+0.3ppt	9.7%	9.9%	-0.2ppt
EBIT2) [USD m]	252	200	+26%	359	300	+20%
EBIT margin2)	7.1%	6.1%	+1.0ppt	3.6%	3.7%	-0.1ppt
Group profit2) [USD m]	137	53	+157%	15	9	+69%

Note: UASC's Ltd. and its subsidiaries have been included in the figures from the date control was transferred on 24 May 2017. The key figures used are therefore only comparable with the previous year to a limited extent. USD figures as stated in the Investor Report 9M 2018 1) For 2018, local revenues were included in the calculation of freight rates. Previous year's figures adjusted accordingly. 2) Due to retrospective application of the provisions for designated options, previous year's figures have been adjusted.

EBIT positively affected by an extraordinary income of USD 15 m

Comments

• Gain from the measurement of an investment at fair value as at 30 September 2018 led to an increase in EBITDA and EBIT of USD 15 m
• This measurement had a positive effect of USD 12 m on the other financial result
• Furthermore, an increase of USD 3 m was recognized in other operating income due to a release of provision related to the minority stake

12

Continuously good transport volume growth of 26.6% YoY due to UASC merger – pro-forma transport volume grew by 5.5% YoY

13

On a pro-forma basis freight rates have increased by 1.4% YoY, average bunker consumption price increased sharply by 30.5% YoY

Freight rate [USD/TEU] vs. Bunker price development [USD/mt]

Note: Due to the inclusion of UASC in the Hapag-Lloyd Group from the first-time consolidation date of 24 May 2017, figures provided can only be compared with those of the previous year to a limited extent. The figures for the first quarter of 2017 relate to Hapag-Lloyd only and do not include the UASC Group. For the financial year 2018, local revenues were included in the calculation of freight rates. The previous year's figures have been adjusted accordingly. 1) Assuming UASC Group has been included since 1 January 2016

14

Higher expenses for raw materials and supplies were offset by costcutting programs and synergies from the UASC integration

Transport expenses per TEU [USD/TEU]1)

Note: UASC's Ltd. and its subsidiaries have been included in the figures from the date control was transferred on 24 May 2017. The key figures used are therefore only comparable with the previous year to a limited extent. Rounding differences may occur. 1) Cost of purchased services 9M 2018: 766 USD/TEU 2) Mainly explained by currency effects

Good free cash flow of USD 650 m in 9M 2018 driven by a high cash conversion and limited investment needs

Cash flow 9M 2018 [USD m]

Unused credit lines Cash and cash equivalents

16

Stable equity base of USD 7.2 bn, solid liquidity reserve of USD 1.2 bn and reduced net debt of USD 6.5 bn

Equity base [USDm] Net debt [USDm]

• Equity ratio almost unchanged at 41.0% and equity of USD 7.2 bn
• Liquidity reserve totals USD 1.2 bn as at 30 September 2018
• Reduction of USD 323 m in financial debt since year-end 2017
• Gearing (net debt / equity) of 91.1% (31 December 2017: 93.8%)

4 Way Forward

Revised Outlook for 2018 confirmed and refined

	FY 2017	Initial Outlook 2018	Revised Outlook 2018	Sensitivities for 2018 1)
Transport volume	9,803 TTEU	Increasing clearly	Increasing clearly	+/- 100 TTEU	+/- USD <0.1 bn
Average freight rate	1,051 USD/TEU	On previous year's level	On previous year's level	+/- 40 USD/TEU	+/- USD ~0.5 bn
Average bunker price	318 USD/mt	Increasing clearly	Increasing clearly	+/- 50 USD/mt	+/- USD ~0.2 bn
EBITDA	EUR 1,055 m	Increasing clearly	EUR 900 m to EUR 1,150 m		Rather in the upper part
EBIT	EUR 411 m	Increasing clearly	EUR 200 m to EUR 450 m		of the guided ranges

Major targets:

Continue to deliver on synergies and deleverage the company over time

Continue to develop more digitalized solutions for the customer

Successfully implement the MFR mechanism

Presentation of our new strategy at the Capital Markets Day on 21 November

Hapag-Lloyd with positive EBITDA of USD 972 m in 9M 2018

	9M 2018	9M 2017	% change
Revenue	10,071.5	8,167.7	23%
Other operating income	84.0	143.4	-41%
Transport expenses	-8,245.3	-6,596.4	25%
Personnel expenses	-571.1	-577.5	-1%
Depreciation, amortization & impairment	-612.9	-509.1	20%
Other operating expenses	-405.8	-363.0	12%
Operating result	320.4	265.1	21%
Share of profit of equity-acc. investees	26.7	34.4	-22%
Other financial result	12.3	0.5	n.m.
Earnings before interest & tax (EBIT)	359.4	300.0	20%
EBITDA	972.3	809.1	20%
Interest result	-310.7	-271.2	15%
Income taxes	-33.8	-20.0	69%
Group profit / loss	14.9	8.8	69%

Income statement [USD m] Transport expenses [USD m]

	9M 2018	9M 2017	% change
Expenses for raw materials & supplies	1428.6	947.7	51%
Cost of purchased services	6,816.7	5,648.7	21%
Thereof Port, canal & terminal costs	3,573.8	2,761.9	29%
Chartering leases and container rentals	872.1	805.2	8%
Container transport costs	2,209.4	1,857.7	19%
Maintenance/ repair/ other	161.4	223.9	-28%
Transport expenses	8,245.3	6,596.4	25%
Transport expenses per TEU [USD m]
	9M 2018	9M 2017	% change
Expenses for raw materials & supplies	160.5	134.8	16%
Cost of purchased services	765.9	803.7	-5%
Thereof Port, canal & terminal costs	401.5	392.9	2%
Chartering leases and container rentals	98.0	114.6	-14%
Container transport costs	248.2	264.3	-6%
Maintenance/ repair/ other	18.1	31.9	-43%

20 Note: The previous year's figures have been adjusted due to the retrospective application of the rules for designation of option contracts. This improved the previous year's transport expenses by USD 1.1 million.

Hapag-Lloyd with a stable equity ratio of 41% and a reduced gearing of 91%

	30.09.2018	31.12.2017
Assets
Non-current assets	14,775.6	15,146.1
of which fixed assets	14,689.7	15,071.1
Current assets	2,711.8	2,630.8
of which cash and cash equivalents	694.4	725.2
Total assets	17,487.4	17,776.9
Equity and liabilities
Equity	7,171.3	7,263.3
Borrowed capital	10,316.1	10,513.6
of which non-current liabilities	6,724.2	7,197.8
of which current liabilities	3,591.9	3,315.8
of which financial debt	7,272.1	7,595.5
thereof Non-current financial debt	6,310.0	6,750.6
Current financial debt Total equity and liabilities	962.1 17,487.4	844.9 17,776.9

Balance sheet [USD m] Financial position [USD m]

	30.09.2018	31.12.2017
Cash and cash equivalents	694.4	725.2
Financial debt	7,272.1	7,595.5
Restricted Cash	42.6	58.6
Net debt	6,535.1	6,811.7
Unused credit lines	470.0	545.0
Liquidity reserve	1,164.4	1,270.2
Equity	7,171.3	7,263.3
Gearing (net debt / equity) (%)	91.1%	93.8%
Equity ratio (%)	41.0%	40.9%

9M 2018 generated one-off costs of USD 5 m related to the merger

Transaction & integration related one-off costs [USD m]

Hapag-Lloyd benefits from optimized bunker consumption, but substantial increase in bunker price harms P&L

Bunker consumption price [USD/mt] Bunker consumption & expenses per TEU

Solid long-term and diversified financing portfolio

Appendix A

Geopolitical risk rises mainly due to conflicts between major economic players

Volume Development of Main Trade Lanes

Atlantic Trade:

• US imposed tariffs on steel and aluminium less than 3% of total container trade from EU to US is affected2)
• Retaliatory tariffs from the EU less than 6% of total container trade from US to EU is affected2)
• Ongoing negotiations between US and EU

Transpacific Trade:

• US imposed tariffs on USD 250 bn of Chinese products1) up to 70% of total container trade from CN to US affected2)
• Retaliatory tariffs from China worth USD 110 bn up to 87% of total container trade from US to CN affected2)
• Negotiations are continuing between China and US

Currently around 7% of total world container trade (TEU 146m in 2018e) currently affected by tariffs – going forward remains to be seen

Freight rates are recovering slowly

Comprehensive Index (CCFI/SCFI)

Shanghai – USA (SCFI)

Shanghai – North Europe (SCFI)

Shanghai – Latin America (SCFI)

Convincing equity story resulted in higher share price…

Share trading

Stock Exchange	Frankfurt Stock Exchange / Hamburg Stock Exchange
Market segment / Index	Regulated market (Prime Standard) / SDAX
ISIN / WKN	DE000HLAG475 / HLAG47
Ticker Symbol	HLAG
Primary listing	6 November 2015
Number of shares	175,760,293

…and lower bond yields

Preliminary Financial Calendar 2019

February 2019	Preliminary Financials 2018
March 2019	Annual Report 2018
May 2019	Quarterly Financial Report Q1 2019
August 2019	Half-year Financial Report 2019
November 2019	Quarterly Financial Report 9M 2019

Disclaimer

Forward-looking statements

This presentation contains forward-looking statements that involve a number of risks and uncertainties. Such statements are based on a number of assumptions, estimates, projections or plans that are inherently subject to significant risks, as well as uncertainties and contingencies that are subject to change. Actual results can differ materially from those anticipated in the Company's forward-looking statements as a result of a variety of factors, many of which are beyond the control of the Company, including those set forth from time to time in the Company's press releases and reports and those set forth from time to time in the Company's analyst calls and discussions. We do not assume any obligation to update the forward-looking statements contained in this presentation.

This presentation does not constitute an offer to sell or a solicitation or offer to buy any securities of the Company, and no part of this presentation shall form the basis of or may be relied upon in connection with any offer or commitment whatsoever. This presentation is being presented solely for your information and is subject to change without notice.

UASC's Ltd. and its subsidiaries have been included in the figures from the date control was transferred on 24 May 2017.The key figures used are therefore only comparable with the previous year to a limited extent.

Hapag-Lloyd Investor Relations

Ballindamm 25 20095 Hamburg Tel: +49(40) 3001-2896 ir@hlag.com https://www.hapag-lloyd.com/en/ir.html