Wallenius Wilhelmsen — Earnings Release 2020

Feb 9, 2021

COVID19 – Staying true to our purpose and our values

OUR PRINCIPLES

• o Take social responsibility for employees and the community
• o Be financially prudent for shareholders
• o Maintain operational stability for customers
• o Protect long-term operational capabilities to be ready to meet the future

2020 in brief

• o COVID19 caused challenging market conditions throughout the year
• o Early decisions helped support earnings and strengthen liquidity
• o Ocean and landbased volumes declined 23% and 27% from 2019, respectively
• o Close customer cooperation ensured good returns on operated voyages and steady operations across landbased facilities
• o General volume rebound in H2, but sales patterns still unstable

o Adjusted EBITDA of USD 536 million, down 36% vs. FY 2019

Keeping COVID19 vaccine supply chains running smoothly

Highlights fourth quarter 2020

○Solid development in ocean volumes, up 23% QoQ and down only 4% YoY ○ Margin pressure QoQ on cargo mix, activity ramp-up costs, and market inefficiencies

○Landbased adjusted EBITDA up 23% YoY on increased high-margin volumes

○USD 150m adjusted EBITDA, in line with previous quarter ○USD 980m of total liquidity, up USD 98m QoQ

Agenda

Business update

Craig Jasienski CEO

Ocean volumes decline 4% YoY, up 23% QoQ

Recovery in volumes spearheaded by un-prorated Auto volumes, increasing 15% QoQ

1) Total volume based on prorated volume (WW Ocean, EUKOR, ARC and Armacup), i.e. volumes are split between months based on the sailing period onboard the vessel

Volume development diverged between main trades Upward trend QoQ

Note: Prorated volumes on operational trade basis in CBM 1) Including Cape sailings (South Africa)

8

Rate pressure continued in Q4

Rate changes and impact from 2020 contract renewals

(Circle indicates size of contract in millions)

Annualised revenue impact (USDm)

• 98% of contracted revenue to expire in 2020 renewed
• Lost contracts had an est. USD 11m negative impact on revenue
• Offset by new contracts with est. USD 77m positive impact
• Contract renewals in 2021 represent approx. 20% of shipping revenues

Short-term charter increase to cover Q4 volumes

Exploiting short-term charter market to meet demand, up to 9 vessels to be reactivated in H1 2021

NEWBUILD DELIVERY

○ Tannhauser started operations 13 October

RECYCLING

○ 2 vessels recycled in 2020

COLD LAYUP

• 16 vessels in cold lay-up as of YE2020
• Planned reactivation of 9 vessels in H1 2021
• 7 remaining vessels under consideration for reactivation

REDELIVERY

• 2020: 7 vessels redelivered, 4 extended
• 2021: 3 redelivery candidates
• 2022: 4 redelivery candidates

Includes 16 vessels in cold lay-up

²20 vessels have been reclassified from leased assets to owned assets effective from 01/01/2020

Fleet development1,2

of vessels

Financial performance

Torbjørn Wist CFO

Financial highlights – Q4 2020

1) Return on capital employed: annualised EBIT divided by capital employed 2) Net interest bearing debt divided by last twelve months adjusted EBITDA

Group EBITDA flat QoQ despite 18% higher revenue

General volume increase and solid landbased EBITDA offset by ocean margin pressure

USDm	Q4 2020	Q3 2020	% change QoQ	Q4 2019	% change YoY
Total revenue	822	697	18%	932	(12%)
Operating expenses	(672)	(545)	23%	(771)	(13%)
EBITDA	150	152	(1%)	162	(7%)
EBITDA adjusted	150	152	(1%)	194	(23%)
EBIT	53	40	30%	81	(35%)
Financial income/(expense)	(3)	(36)	(90%)	(22)	(83%)
Tax income/(expense)	(3)	0	n/a	(19)	(43%)
Profit for the period	47	4	958%	41	14%
EPS	0.11	0.01	849%	0.10	15%

Ocean EBITDA down 5% QoQ due to margin pressure from activity ramp-up

Revenue up 16% QoQ as volume recovery continues

Ocean – EBITDA (adjusted)¹

Adjusted

Extraordinary items

• Revenue

• Down 16% YoY on volumes, surcharge and trade mix
• Up 16% QoQ on volume recovery
• QoQ adj. EBITDA margin under pressure from
  • Cargo mix
  • Ramp-up costs
  • Market inefficiencies
  • Fuel price increase

Landbased revenue up 23% QoQ and flat YoY

Adjusted EBITDA 13% up YoY on increase in high margin activities

Extraordinary items

EBITDA

• Revenue

• Up 2% YoY on returning volumes and high-value activities
• Up 23% QoQ
• EBITDA
  • Up 13% YoY, and 17% QoQ
  • YoY Increase in high margin activity
  • QoQ rise in auto volumes

Consolidated results – Full year 2020

	Full year 2020	Full year 2019	% change y-o-y
Total income	2 958	3 909	(24%)
Operating expenses	(2 484)	(3 104)	(20%)
EBITDA	473	805	(41%)
EBITDA adjusted	536	837	(36%)
EBIT	(84)	358	n/a
Financial income/(expenses)	(223)	(247)	(10%)
Tax income/(expense)	4	(10)	n/a
Profit for the period	(302)	102	n/a
EPS	(0.68)	0.22	n/a
ROCE	-1.3%	5.0%	n/a

Cash

Cash and undrawn credit facilities up USD 98m QoQ

Supported by free cash flow of USD 71m, deferred loan payments, and new financing for Tannhauser

Stable net debt, equity ratio slightly up to 34.3%

• Equity ratio up to 34.3% from 34.0% in Q3
• Net debt stable at USD 3.4 billion
• 20 vessels reclassified from leased to owned
• Cash on hand available to cover USD 108m in 2021 maturities

Market update

Craig Jasienski CEO

19

Auto sales up on Chinese sales and global pent-up demand

• Total light vehicle (LV) sales in the fourth quarter decreased 0.8% compared to the corresponding period last year
• Up 10.0% from the previous quarter as incentives and pent-up demand after the coronavirus fueled auto sales.

Global light vehicle (LV) sales per quarter, units Global light vehicle (LV) export per quarter, units

• Total exports in Q4 were down 7.7% compared to the corresponding period last year, up 8.6% from the previous quarter.

Deep sea share stabile despite significant sales drop in 2020

Deepsea share Import Domestic

Global LV markets update

LV Sales

IHS Markit assume 2020 global LV sales set at 76.5m for 2020, down 15%. with downgrades across all major regions, forecasts up from July which expected 70.1m, -22%

Supply

Temporary plant closures took place globally. Recovery on track however stop-start rhythm prevents efficiency, slow bands and tricky new health protocols

Deepsea trade ?

IHS Markit assume deepsea volume to see decline from 14.8m in 2019 to 12.1m in 2020, equal to a drop of 18%, however recover quicker than domestic produced volume

Demand

Uncertainty to how fast consumers will turn back to dealers, governmental stimulus and pent-up demand might contribute to rebound

Solid LV sales and production rebound continuing in Q4

Global LV sales and production quarterly walk, 2020, 2021 and 2022 figures compared to 2019

Growth in global manufacturing activity close to decade highs

Buoyant output and order growth support continued trade expansion in the near term

Global machinery trade and manufacturing activity

• Machinery trade completed an impressive recovery as volumes again returned to growth in the quarter
• Broad-based improvement in demand, as trade and retail volumes continued to rebound across segments and geographies
• Global manufacturing activity growth close to decades highs supports continued near-term growth
• Manufacturing orders rose for the seventh consecutive month, while growth in export orders extended to five months, albeit marginal
• Supply chains were further stretched, as inventories fell further, and lead times again lengthened

Source: ¹ IHS Markit | PMI (diffusion index), business activity - direction of change compared to the previous month (50 = no change, >50 increasing activity, <50 decreasing activity). Cutoff: January 2021, ² IHS Markit | World (major exporters) construction & agriculture equipment exports (Avg. equipment value >20 kUSD ) (Units last 3 months, YoY), Cutoff: October 2020. November 2020 data is limited to countries (52%) that have reported customs data as per 03.02.2021

Continued machinery recovery from the trough

Improving momentum and outlook in all segments - less sluggish climb to pre-pandemic markets

Market status

Machinery sales consensus estimates¹

Source⁵ : Factset Data and Analytics (27.01.21) | OEM machinery sales consensus estimates per calendar year (USD). Constituents: Volvo, Caterpillar, CNH, Komatsu, Hitachi, Deere, Terex, Doosan, Sandvik, Epiroc and AGCO. Estimates include sales in construction/mining/agriculture equipment divisions only. Estimate weighting: 2/3 construction/mining and 1/3 agriculture.

Deep sea fleet adjusting to the market situation

Increase in recycling and lower share of fleet is idling/laid up

Vessel age distribution, # of vessels for seaborn LV and

• 5 vessels recycled in the quarter, 24 for 2020FY*
• No new orders, three deliveries and five vessels recycled in the quarter
• Orderbook at 8 vessels**

HH transport Fleet and demand development, fleet utilization rate, percent

• Deep-sea shipments declined significantly in 2020 before picking up
• Increased recycling/scrapping and low order activity leads to a reduction of fleet in 2020 and forward
• Currently less than 3% of fleet is idling / laid up
• Indicators of supply demand balance within 2023

Prospects and Q&A

Craig Jasienski CEO

Prospects

• Key markets improved from the low in Q2, but volumes remain below 2019 and sales patterns remain unstable
• The ongoing potential impact on production is hard to predict
• Supply-demand balance expected to improve in mid-term on global fleet reduction, low order book and expected volume rebound in 2021
• Stabilising markets will provide the group with more flexibility on dividends and investments
• We are well prepared to work through the unprecedented market situation, following early and decisive action

Thank you!