Hapag-Lloyd AG — Investor Presentation 2022

Aug 11, 2022

Investor Presentation

H1 2022 Results

Hamburg, 11 August 2022

Opening Remarks

		Supply chain disruptions have further intensified during the first half of 2022
1	CURRENT SITUATION	Transport volumes are hampered by continuous congestion and softer backhaul trades
		Spot rates remain on a high level despite recent downturn
		H1 2022 earnings increased further above expectations
2	FINANCIALS	Transport expenses rose by 22%, but were offset by strong freight rate development
		Following the USD 6.6 bn dividend distribution in May, net liquidity position stands at USD 4.5 bn
	MARKET UPDATE	Effective capacity remains tight, which is reflected in low level of idle fleet and high chartering cost
3		Influx of ordered tonnage should ease the tight capacity situation from 2023 onwards
		Economic growth likely to soften as high inflation and geopolitical risks weigh on consumer spending
		FY 2022 outlook raised as H2 2022 performance should also exceed previous expectations
4	WAY FORWARD	Strong cash flow generation allows us to further execute on our Simplify, Strengthen & Invest

measures in line with Strategy 2023 strategic targets

1 Current Situation

Congestion remains on very high level – Situation in China, North Europe and NA EC offsetting improvement in NA WC ports

GLOBAL PORT CONGESTION INDEX

[TEU m, 7dma]

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2021 2022

2020

1 Current Situation

Global transport volume declined slightly – Spot freight rates weakened but still on a high level

GLOBAL TRANSPORT VOLUME DEVELOPMENT H1 2022 11.5 8.4 2.8 2.8 H1 2021 8.0 11.7 H1 2021 1.4 H1 2022 3.4 3.4 4.0 3.0 1.3 H1 2021 H1 2022 89.6 88.1 -1.7% TRANSPORT VOLUME ON SELECTED TRADES Head-haul Back-haul Transpacific Far East Atlantic +1.6% -4.7% -0.2% -11.6% -15.7% -6.5% [TEU m]

SHANGHAI CONTAINERIZED FREIGHT INDEX [USD/TEU]

1 Current Situation

We made further progress along our strategic goals and strengthened our market position in Africa

FLEET M&A

• Roll-out of Fleet Upgrade Program to increase fuel efficiency
• Active management of our charter vessel portfolio and purchase of 2nd hand vessels

• Started to equip 1.4 million dry containers with real-time tracking devices

• Update of THE Alliance network to ensure a comprehensive port coverage

• Launch of new services (CGX, TEX, MSW)

▪ Successful closing of the acquisition of Deutsche Afrika-Linien (DAL) on 1 June 2022

SERVICES HUMANITARIAN INITIATIVES

▪ Initiated further humanitarian programs in H1 2022, such as the clean water initiative in India, Support for Ukraine and other local initiatives supporting children

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Exceptional freight rate environment led to a strong earnings performance in the first six months of 2022

OPERATIONAL KPIs				P&L EFFECTS
6,012 Volume TTEU PY: 6,004		Transport volume remained at the previous year's level (0.1% YoY) as a result of the strained supply chains	Revenue USD m	18,562 PY: 10,551		Revenue increased by USD +8.0 bn,…
Rate 2,855 USD/TEU PY: 1,612		Average freight rate increased by 77% YoY due to good demand and tight capacity availability	EBITDA USD m	10,942 PY: 4,240		…EBITDA by USD +6.7 bn and …
Bunker 703 USD/mt PY: 421		Average bunker consumption price increased by 282 USD/mt due to higher bunker market prices	EAT USD m	9,466 PY: 3,284		…net profit by USD +6.2 bn mainly due to higher freight rates
BALANCE SHEET1)			FINANCIAL KPIs
Assets 33,040 USD m PY: 30,236		Total assets increased by USD 2.8 bn vs. 31 Dec 2021 due to higher investments (incl. RoU additions), more cash and higher receivables	FCF USD m	9,486 PY: 3,371		Free Cash Flow generation turned out significantly higher than in the first half of 2021
Fin. Debt 5,927 USD m PY: 6,222		Financial debt fell slightly as higher IFRS 16 lease liabilities were more than offset by redemption payments	Leverage	<0x PY: <0x		Net leverage remained unchanged due to strong result performance

On the back of a sharp rise in revenues, group profit increased significantly YoY

REVENUE [USD m] EBITDA [USD m]

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EBIT [USD m] GROUP PROFIT [USD m]

8

As a result of longer round voyage times, transport volume remained on previous year's level – despite good demand

TRANSPORT VOLUME DEVELOPMENT BY TRADE [TTEU]

9

Average freight rate increased mainly driven by stronger long-term rates while spot rates started to decline since its peak in January

FREIGHT RATE [USD/TEU] VS. BUNKER PRICE DEVELOPMENT [USD/MT]

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Transport expenses continued to increase due to higher energy prices, congestion and higher vessel charter rates

TRANSPORT EXPENSES PER UNIT [USD/TEU]

• "Bunker" expenses (+71%) increased on the back of higher average bunker consumption prices
• "Handling and Haulage" (+13%) and "Equipment and Repositioning" (+15%) expenses were up due to higher storage and hinterland transportation costs
• "Vessels and voyage" expenses (+12%) increased due to rise in percentage of ships chartered in on a medium-term basis and the resulting operating expenses
• "Depreciation and amortization" expenses (+36%) were up primarily due to the rise in the percentage of vessels chartered in on a mediumterm basis at simultaneously higher charter rates and the resulting increase in right of use

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Strong cash generation in H1 2022, leading to a free cash flow of USD 9.5 bn – Liquidity reserve now at 11.1 USD bn

CASH FLOW H1 2022 [USD m]

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Despite the payment of a dividend of USD 6.6 bn in May 2022, net liquidity increased by USD 1.9 billion to USD 4.5 billion

LIQUIDITY RESERVE [USD m]

EQUITY [USD m] NET CASH [USD m]

COMMENTS

• Equity increased substantially due to high profitability level
• Equity ratio now at ~65%
• Financial debt was slightly reduced while net cash position increased clearly due to higher cash
• Volume of RCF increased and term prolonged

3 Market Update

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Order activity remains on a high level – Tight vessel availability is reflected in low level of idle fleet

NEWLY PLACED ORDERS

2018 2019 2020 2021

2022

3 Market Update

Slower expected demand growth and influx of additional tonnage from 2023 onwards should ease tight capacity situation

SUPPLY/DEMAND BALANCE

[TEU m, %]

Global Container Volume Growth [%] Global Fleet Supply Growth [%]

Note: Global Container Trade Growth: CTS data until 2021; Seabury for 2022e onwards.

14 Source: CTS (July 2022), Drewry (various issues), Seabury (June 2022)

Demand growth is expected to slow down to more sustainable levels

Capacity influx will increase from 2023 onwards to cater for higher demand

Sustainability efforts might accelerate scrapping

Demand/supply fundamentals expected to normalize in the years to come

4 Way Forward

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H2 earnings should exceed previous expectations – FY 2022 outlook raised on July 28, 2022

	FY 2021	FY 2022 Previous Outlook	FY 2022 Updated Outlook
Transport volume	11,872 TTEU	On previous year's level	Increasing slightly
Bunker con sumption price	475 USD/mt	Increasing clearly	Increasing clearly
Freight rate	2,003 USD/TEU	Increasing clearly	Increasing clearly
EBITDA	12,842 USD m	USD 14.5 – 16.5 bn EUR 13.6 – 15.5 bn	USD 19.5 – 21.5 bn EUR 18.2 – 20.1 bn
EBIT	11,111 USD m	USD 12.5 – 14.5 bn EUR 11.7 – 13.6 bn	USD 17.5 – 19.5 bn EUR 16.3 – 18.2 bn

• Strong operational performance above expectations recorded in H1
• Based on current business performance, the H2 2022 should also exceed previous expectations
• Against this background, the Executive Board of Hapag-Lloyd AG has raised its earnings outlook for the current financial year on July 28, 2022
• In view of the war in Ukraine, the continuing disruptions to global supply chains, and the effects of the COVID-19 pandemic, the forecast is subject to considerable uncertainty

Our focus for 2022 and beyond remains unchanged

Focus on service quality and customer satisfaction

Invest in fleet and competitive cost base

Seamless integration of Deutsche Afrika-Linien

Continue to follow a prudent financial policy

Strengthen efforts on Sustainability and Decarbonization

Take care of our people and invest in their capabilities

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A Appendix

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Hapag-Lloyd with an equity ratio of 64.6% and a gearing of below zero

million USD	30.6.2022	31.12.2021
Assets		–
Non-current assets	17,492.3	17,298.4
of which fixed assets	17,378.6	17,208.5
Current assets	15,547.3	12,937.1
of which cash and cash equivalents	10,393.9	8,741.4
Total assets	33,039.7	30,235.5
		–
Equity and liabilities		–
Equity	21,349.5	18,292.2
Borrowed capital	11,690.1	11,943.3
of which non-current liabilities	4,712.3	5,199.7
of which current liabilities	6,977.8	6,743.6
of which financial debt and lease liabilities	5,926.9	6,221.7
of which non-current financial debt and lease liabilities	4,387.8	4,684.0
of which current financial debt and lease liabilities	1,539.1	1,537.7
Total equity and liabilities	33,039.7	30,235.5

BALANCE SHEET [USD M] FINANCIAL POSITION [USD M]

30.6.2022	31.12.2021	30.6.2021
5,926.9	6,221.7	6,296.1
10,393.9	8,741.4	2,391.5
–4,467.0	–2,519.7	3,904.6
725.0	585.0	585.0
11,118.9	9,326.4	2,976.5
21,349.5	18,292.2	10,805.9
-20.9	-13.8	36.1
10,941.6	12,841.9	4,239.7
<0	<0	0.6x
64.6	60.5	49.3

Hapag-Lloyd with strong net profit of USD 9,465.7 m in H1 2022

INCOME STATEMENT [USD M]

				QoQ	YoY
million USD	Q2 2022	Q1 2022	Q2 2021	Change	change	H1 2022	H1 2021	Change
Revenue	9 605 7 ,	8 956 1 ,	5 648 1 ,	7 3%	70 1%	18 561 8 ,	10 551 3 ,	75 9%
Transport expenses	–3 663 3 ,	–3 313 1 ,	–2 999 4 ,	10 6%	22 1%	–6 976 4 ,	–5 736 4 ,	21 6%
Personnel expenses	–231 3	–235 7	–232 6	–1 9%	–0 6%	–467 0	–430 7	8 4%
Depreciation , amor tisation and impair ment	–507 1	–516 0	–382 4	–1 7%	32 6%	–1 023 1 ,	–752 4	36 0%
Other operating re sult	–143 1	–113 3	–98 6	26 3%	45 2%	–256 5	–158 7	61 6%
Operating result	5 060 9 ,	4 778 0 ,	1 935 1 ,	5 9%	161 5%	9 838 9 ,	3 473 1 ,	183 3%
Share of profit of equity-accounted in vestees	62 6	12 9	12 8	387 0%	390 5%	75 5	14 3	428 6%
Result from invest ments	4 1	0 0	0 0	n.m.	n.m.	4 2	–0 0	n.m.
Earnings before in (EBIT) terest and tax	5 127 7 ,	4 790 9 ,	1 947 9 ,	7 0%	163 2%	9 918 5 ,	3 487 3 ,	184 4%
Interest result	–39 1	–53 9	–95 0	–27 5%	–58 8%	–92 9	–172 5	–46 1%
Other financial items	–284 2	–34 8	–4 4	n.m.	n.m.	–319 0	–2 2	n.m.
Income taxes	–22 2	–18 7	–15 3	19 1%	45 2%	–40 9	–28 6	43 0%
profit / Group loss	4 782 2 ,	4 683 5 ,	1 833 2 ,	2 1%	160 9%	9 465 7 ,	3 284 0 ,	188 2%

Well balanced maturity structure of financial liabilities

FINANCIAL DEBT PROFILE AS PER 30 JUNE 20221), [USD M]

Note: Rounding differences may occur

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Freight rate development

COMPREHENSIVE INDEX [USD/TEU]

SHANGHAI – USA WEST COAST [USD/FEU]

SHANGHAI – NORTH EUROPE [USD/TEU]

SHANGHAI – LATIN AMERICA [USD/TEU]

A Appendix

Share price development

Bond trading

	EUR Bond 2028	108
Listing	Open market of the Luxembourg Stock Exchange (Euro MTF)	105 102
Volume	EUR 300 m	99
ISIN / WKN	XS2326548562	96
Maturity Date	April 15, 2028	94.2 93 90
Redemption Price	as of 15 April 2024: 101.375% as of 15 April 2025: 100.688% as of 15 April 2026: 100%	87 HL EUR 2.500% 2028
Coupon	2.500%	84 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22

Shareholder structure

Kühne Maritime GmbH / Kühne Holding AG Qatar Holding Germany GmbH CSAV Germany Container Holding GmbH HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH The Public Investment Fund on behalf of the Kingdom of Saudi Arabia Free Float

Financial Calendar 2022

10 November 2022 Quarterly Financial Report 9M 2022

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.

Hapag-Lloyd Investor Relations Ballindamm 25 20095 Hamburg Tel: +49 (40) 3001-2896 ir@hlag.com All publication documents can be found here: https://www.hapag-lloyd.com/en/ir.html

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