Wilh. Wilhelmsen ASA
> Capital Markets Day Jan Eyvin Wang – President and CEO 17 September 2014, Lysaker
> Disclaimer This presentation contains forward-looking expectations which are subject to risk and uncertainties related to economic and market conditions in relevant markets, oil prices, currency exchange fluctuations etc. Wilh. Wilhelmsen ASA group undertake no liability and make no representation or warranty for the information and expectations given in the presentation.
Shaping the maritime industry
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> 1989 – Wilhelmsen Lines established Wilhelmsen Lines 1989 NAL/NOSAC 1995 OW 1999 EUKOR 2002 WW Group 2014
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Vessels Operating company Trades
Shaping the maritime industry
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> 1995 – NAL/NOSAC acquired and integrated Wilhelmsen Lines 1989 NAL/NOSAC 1995 OW 1999 EUKOR 2002 WW Group 2014
Shaping the maritime industry
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>
1999 – WL merges with OW – WWL and ASL established Wilhelmsen Lines 1989 NAL/NOSAC 1995 OW 1999 EUKOR 2002 WW Group 2014
Shaping the maritime industry
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> 2002 – EUKOR established Wilhelmsen Lines 1989 NAL/NOSAC 1995 OW 1999 EUKOR 2002 WW Group 2014
Shaping the maritime industry
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– WW Group > 2014 A Unique global presence WWL Ocean routes EUKOR Ocean routes ARC Ocean routes Terminals Technical Service Facilities
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Vessels Operating companies Trades Terminals Technical Service Facilities Shaping the maritime industry
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> We created a global footprint
Shaping the maritime industry
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carrying used to be simple… > Car PCTC trade pattern 2000
Shaping the maritime industry
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globalization has made it complex > But PCTC trade pattern 2014
Shaping the maritime industry
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> Our speakers Ari Marjamaa Vice President Head of Global Market Intelligence WWL
The global outlook for the automotive and RoRo markets
Chris Connor President & CEO WWL
Wallenius Wilhelmsen Logistics Leveraging a strong position in a changing marketplace
Ole-Andreas Torgersen Partner, Lawyer Selmer
Anti-trust A brief overview of the regulatory framework and the process
Shaping the maritime industry
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The global outlook for the automotive and RoRo markets Ari Marjamaa Vice President Head of Global Market Intelligence WWL Wilh.Wilhelmsen Capital Markets Day, 17 September 2014, Lysaker
Global economic environment
Challenging market environment Economic Growth has returned, but so has uncertainty
World economy is better, but not well: •
Global growth fragile
•
China still key to outlook
•
The acronyms are shifting
•
Geopolitical uncertainties
•
Major regions developing positively
Source: IHS Global Insight
13
Auto outlook
General outlook for auto markets positive Underlying global growth in seaborne shipments
Auto sales per region show growth in most markets Growth 2010-13 & 2013-16FC in %, size of circle indicates sales in 2013
Global auto sales Million units, 2007-2020FC FORECAST CAGR +3,1%
96
Growth 2013-16 98
101
103
50
93 89 83
86
40
80 73
70 66
76
30
Indian Subcontinent
64
Greater China Central Europe
20
ASEAN
Middle East/Africa
10
0
North America West Europe
Oceania
Japan/Korea
Source: IHS Automotive
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
-10
-20 -20
South America
-10
0
10
20
East Europe
30
40
50
Growth 2010-13
14
Japanese auto exports
Exports from Japan continue the decline The Japanese OEMs grow their exports from other countries
Decreasing Japanese exports, but increasing JP OEM exports from other regions grow Projected change in seaborne exports 2013-2020FC by production region, million units
5,2
5,1 0,7
0,7 0,1
3,4 Exports from Japan
4,0
1,8 JP OEMs’ production outside Japan
1,1
2013
Source: IHS Automotive
Reductions ex Japan
Growth ex Japan
Reductions in JP OEMs’ exports from locations outside JP
Growth in JP OEMs’ exports from locations outside JP
2020
15
Auto manufacturing - Mexico
New manufacturing hubs changing the landscape Majority of the world auto export growth from emerging locations
Mexico becoming a manufacturing powerhouse Exports by destination, million units, 2013-18FC
Diversified exports outside North America: 3,3
0,7
0,7
3,1 7%
CHINA
0,7 2,8 0,6
2,6
L AMERICA
0,5
2,4 2,3
0,5
Other W EUROPE
ARG/BRA
US/CAN Other
2013
2013
Note: Excluding domestic sales Source: IHS Automotive
2014
2015
2016
2017
2014
2015
2016
2017
2018
2018
16
Auto manufacturing - Thailand
New manufacturing hubs changing the landscape Majority of the world auto export growth from emerging locations
Thailand manufacturing output to serve SEA and OC growth, as well as beyond Exports by destination region in million units. Asian destined exports’ share of total in %, 2013-18FC
Thai exports, million units 1,8
Asian share of Thai exports, %
28
27 % 26 %
26 %
1,6
26 %
25 %
1,6
1,5 23 %
1,6 24 %
24 22 %
1,4
22
1,3 1,2
20
1,1 1,1
1,0
26
0,9
18
0,9
16 0,8
14 12
0,6
10 0,4
8 0,2
6 4
0,0 2013 W EUROPE
Note: Excluding domestic sales Source: IHS Automotive
2014 NAFTA
2015 MIDDLE EAST
2016 S E ASIA
2017 OCEANIA
2018 Other
2019
2020
SEA share of Thai exports
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H&H: Construction
Construction market key driver for heavy equipment European construction spending finally starting to show growth momentum
Source: IHS Construction, GMI
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H&H: Construction
US construction indices see positive development Severely hit in the beginning of 2014 by weather
US total construction spending 1000 USDbn
Housing Market Index Builder’s confidence index, seasonally adj. Index
1,2
Million units
Housing Market Index
Housing starts
Current sales conditions
0,70
0,55
US Housing starts and permits Seasonal adjusted rate
1,7
Housing permits
Future sales conditions (6m)
0,50
1,0
0,45
Total spend (1000 USDbn)
0,9
0,40
0,8 0,35 0,7 0,30 0,6 0,25 0,5 0,20 0,4 0,15
0,3
0,10
0,2 US total construction spending
0,1
0,05
Total private residential spending
Private residential and non residential spend split (1000 USDbn)
1,1
0,65
Traffic of prospective buyers
1,5
0,60
1,4
0,55
1,3
0,50
1,2
0,45
1,1
0,40
1,0 0,9
0,35
0,8
0,30
0,7 January’s significantly poor weather conditions is a major factor weighing on the index. Lower levels of buyer traffic translated into downgraded expectations for sales in February
0,25 0,20 0,15 0,10 0,05
Total private non residential spending
0,0
0,00 07
08
09
10
11
12
13
14
15
Source: Global Insight, Bureau of the Census, National Association of Home Builders , Wells Fargo, GMI
1,6
0,00 1/1/06
1/1/08
1/1/10
1/1/12
1/1/14
1/1/16
0,6 0,5 0,4 0,3 0,2
January starts suffered due to adverse weather conditions (the 15th coldest in 120 years, in terms of heating degree days)
0,1 0,0 1/1/06
1/1/08
1/1/10
1/1/12
1/1/14
1/1/16
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H&H: Agriculture
Large AG equipment have seen strong sales trend in the US, but has turned negative US sales of large AG equipment Large tractors (100hp+ and 4WD) and combine sales (units), 12m rolling sales growth (%) US sales of large AG equipment 12m rolling (units)
Large AG equipment (rolling 12m avg) Sales growth y/y rolling 12m (%)
Growth rate y/y rolling 12m
26%
5.000
24% 22% 20%
4.000
18% 16% 14% 3.000
12% 10% 8% 6%
2.000
4% 2% 0% 1.000
-2% -4% -6% -8%
0 1/2011
Source: AEM, GMI
3/2011
5/2011
7/2011
9/2011
11/2011
1/2012
3/2012
5/2012
7/2012
9/2012
11/2012
1/2013
3/2013
5/2013
7/2013
9/2013
11/2013
1/2014
3/2014
5/2014
8/2014
Mining
Light in muted mining markets again? Australian iron ore production at record high and still growing
• Miners have been hard at work • Australian production level record high
• Effects on Chinese steel production capacity • Australia to remain main iron ore location
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Summing up
Positive drivers for auto and heavy equipment •
Challenging market environment where economic growth has returned, but so has uncertainty
•
General outlook for auto markets positive with underlying global growth in seaborne shipments
•
Exports from Japan continue the decline, but the Japanese OEMs grow their exports from other countries
•
New manufacturing hubs changing the landscape, with the majority of the world auto manufacturing growth in emerging locations
•
Construction market key driver for heavy equipment with European construction spending finally starting to show growth momentum
•
Large AG equipment have seen strong sales trend in the US, but has turned negative
•
Light in muted mining markets again as Australian iron ore production hits record high and still growing 22
Wallenius Wilhelmsen Logistics Leveraging a strong position in a changing market place Chris Connor President & CEO WWL Wilh.Wilhelmsen Capital Markets Day, 17 September 2014, Lysaker
Agenda
01. A changing marketplace 02. Leveraging a strong position 03. Taking on the Challenge
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A Changing Marketplace
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A Changing Marketplace
An unprecedented pace of change
Market Fragmentation
Changing Customer Behaviour
New Environmental Legislation
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A Changing Marketplace
Market fragmentation by the numbers
Development of total deep sea auto export volumes, 2014-2018 Million units
Compound Annual Growth Rate 2014-2018
+9%
+14% 13.5 0.7 11.8 0.5 1.0
0%
14.7 0.7
Other
2.1
NA
3.7
EU
1.6
1.9
3.3
8.4
7.9
8.2
2008
2014
2018
~43%
~27%
~20%
6%
3%
AS
1%
Japan share of total deep sea export volumes
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A Changing Marketplace
Customers are increasing the pressure
Slow growth in recent years has increased cost focus Top Management is pushing hard on stretch targets for savings Build up of procurement departments, increased use of procurement consultants and driving a very price-focused discussion
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A Changing Marketplace
New Sulphur Regulations are here in a few months
ECAs
1.0%
• Today • Low Sulphur HFO
0.1%
• 2015 • Distillate fuels
Global
3.5%
•Today •Regular HFO
0.5%
•2020 in Europe, 2020 / 25 globally •Compliance solution?
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A Changing Marketplace
Sulphur regulation – A four stream approach
Distillate Fuels
SRC in place Other Energy Sources
Leveraging deep experience in low sulphur operation Strong will to find sustainable solutions