Edited Transcript of HHFA.DE earnings conference call or presentation 9-May-19 12:00pm GMT

Let me now award you a glimpse of the numbers ago my colleague, Dr. Roland Lappin, will discharge you along the details.

Based above higher container throughput and make too during a higher part of rail-bound transportation, revenue grew strongly by more than 10%. The EBIT increase was level more pronounced. can the EBIT and subsequently too the EBIT margin, ROCE and operating money flow contain effects from a changed accounting standard, I used to alike to direct hand above to you, Roland. Roland?

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Roland Lappin, Hamburger Hafen und Logistik Aktiengesellschaft - CFO & Member of Executive Board [2]

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Thank you, Angela. I will make to the first application of the new accounting measure IFRS 16 can a second. besides during before, same briefly the throughput and make numbers.

Container throughput grew can least can our international operations. can Hamburg, there were changes can our rank of service structures again. The stable condition of the reshuffling of the shipping alliances can 2017 has no been reached yet. Container make is moving can entire throttle ahead. Both rail and path traffic contributed to the well increase.

From boxes to euros now, starting with the Container segment. revenue grew faster than volume, due to higher storage fees and an increased part of rail volumes. The new accounting measure IFRS 16 only had a noticeable result above the Container segment. The hoist can OpEx was dampened by it. Personnel expenses rose during we eat around 200 new employees can TK Estonia above our payment roll. can addition, tariff increases we agreed upon and grow effective can June. can total, half of the EUR 5.1 million increase can EBIT were owing to IFRS 16. Excluding that impact, EBIT used to eat grown by a considerable 7.6% and the brim used to lie can 17.5%. accordingly that's the Container segment.

Intermodal now. make volumes grew by nearly 14%. revenue rocketed by more than 20%. The reasons were a higher part of rail traffic can connection with longer make distances. OpEx rose can a slower speed with virtually no result from IFRS 16. The charge phase is sturdy below the control. can EBIT level, we had a entire package of definite effects: higher volumes, better median revenue, higher utilization of the teach systems and lower D&A. The IFRS 16 result is negligible. accordingly we achieved an noted EBIT brim of more than 20% again. We will career difficult above holding this level.

Our Logistics part continued its recovery. revenue increased significantly, mostly driven by vehicle logistics and entire consulting activities. due to strict charge control, EBIT exceeded the foregoing year's originate by far. IFRS 16 played a marginal role here. At-equity allowance rose to EUR 1.1 million mostly owing to more bulk burden handling.

Coming help to the port Logistics subgroup during a whole. can our allowance bridge, the major changes were seen can net economical expenses and taxes. Taxes increased owing to the higher profits, quiet the tax worthy wasn't unchanged. With respect to the net economical expenses, IFRS 16 was the driver. during the shock from the favour price related to lease liabilities is front-loaded, the shock to diminish above time.

In total, net favour during our shareholders rose by 26%, leading to an EPS of EUR 0.39 per share. final besides during no least, the money flows. Unsurprisingly operating money flow was fueled by the definite EBIT development. business receivables increased can a lower pace. Our investing activities were characterized by our ongoing CapEx program. can addition, we deposited some liquidity short-term. Financing money flow final year was dominated by the payment during the remaining stake can Metrans. This year, we recorded higher payments during the inherent redemption of lease liabilities owing to IFRS 16. can total, our economical funds stood can a comfortable EUR 260 million.

With that, I used to alike to hand help to you, Angela.

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Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board [3]

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Thank you, Roland. Compared to intimate of March, the changes can macroeconomic and sector anticipate don't eat a clean direction.

On the macro side, the IMF slightly lowered its expectations during world's GDP and world's trade, increased the estimated GDP growth can China slightly and did no alter its opinion above Russia.

For the sector, Drewry decreased its estimates during dust throughput and throughput can Northwest Europe by 0.2 percent points. can the same time, it upgraded its expectation during Europe by 0.5 percent points. That's why we abstract to visit some clouds above the horizon, besides during the emotion has no worsened noticeably. Nevertheless, we abstract to sustain a challenging fair environment.

Based above this assessment of the surroundings and the good results achieved can the first quarter, we approve our guidance. We wish farther slim increases can container throughput too during can container transport. This to discharge to a slim increase can revenue too. We wish our EBIT to hoist significantly again, mostly triggered by the IFRS changes.

Our segments to ripen differently. We hope a stable EBIT can the Container part and the continuation of the growth way can our Intermodal segment. We will follow our investment program and wish to cost nearly EUR 200 million above investments can 2019, mostly can the Container and Intermodal segments.

I used to alike to thank you during your attention, and we emerge deliver to your questions now.

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Questions and Answers

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Operator [1]

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(Operator Instructions) First mystery comes from the rank of David Kerstens from Jefferies.

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David Kerstens, Jefferies LLC, investigation part - Equity Analyst [2]

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Can I want nearly the rail track access fees that you highlighted can the slide. to what extent was that a driver during the well improvement can container transport? Or was it mostly owing to simple comparisons? And has there been any definite shock above your operating expenses can the Intermodal part from this reduction can rail track access fees? I reckon can one point, there was time -- there was speech of a 50% reduction. Is that however above the agenda? And discharge you wish this to abstract to exist a driver going forward?

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Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board [3]

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The reduction of access fees obviously has contributed to generate to post volumes above the trains. accordingly -- besides during it is no a 50% reduction, you can calculate more or less is nearly EUR 5 to EUR 8 per container above the track. accordingly it's, from the passenger perspective, a marginal contribution.

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Operator [4]

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The next mystery comes from the rank of Peter Hyde from Hyde.

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Peter Hyde, [5]

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I was fair trying to abstract that from rgeister above the Intermodal segment. Why -- could you fair friendly of dig after why the margins has gone up 200 base points can the first quarter? And I know that you're talking nearly trying to affirm it can above 20%. besides during I was fair wondering if there's any seasonality there or if you could fair friendly of blush out a part what actions eat happened to motivate that 200 base points brim increase can Q1 and how sustainable that is?

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Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board [6]

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Well, it's a blend of a convict of topics. The first one obviously is the access fee, besides during more significant is that we eat turned nearly our business can Poland, which has been a negative contributor can the past, accordingly this is sustained. The third component obviously is that overall, I fair invent the instance of Budapest stop that we eat fair launched 2 years ago, and we had a big passenger celebration can the beginning of this year. It's a stop which already today is fully booked. accordingly we eat there definitely extremely definite development of assets, which are now can entire manners and accordingly are playing into the overall situation.

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Peter Hyde, [7]

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And could I fair pursue up that with a friendly of mystery (inaudible) the fact that clearly, you wish margins to confront can up can 2019, during you're expecting a important increase can EBIT versus some slim increase can condition of volumes and revenues. discharge you reckon you can further that -- or how high discharge you reckon you can further that?

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Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board [8]

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Maybe Mr. Lappin can add to this. especial to the comparison of first area 2019 to first area 2018, you eat to conceive that we did confess above the remaining stake of Metrans. accordingly you're comparing the first area 2019, a 100% stake and brim contribution to lesser one can 2018.

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Roland Lappin, Hamburger Hafen und Logistik Aktiengesellschaft - CFO & Member of Executive Board [9]

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Yes. to add above this point and the comparison basis, you eat to factor in, if you emerge can the brim sequence year-on-year, accordingly can 2018, we phased out low-margin business and restructured the Polish fair that was no contributing to bottom line. accordingly the better comparison basis used to exist the brim development can H2 2018, fair to award you a better understanding. And we discharge our farthest to affirm the EBIT brim can a level of 20%. I reckon this is what we guided the market, and this is noted if you experiment to benchmark during against other operators where you won't discover any instance of competing corporation can Europe that achieves this brim level. And this is underlined by clean charge leadership. And what matters can our -- can this industry is utilization. And during outlined ago by Angela, of course, the adjustment of the access fees to traction helps us to lift utilization further. And this pays off can condition of volumes dynamic. besides during once again, above the lesson of the year, wish the volume dynamic to normalize can rank with the guidance given during the entire year.

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Operator [10]

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The next mystery is from the rank of Adrian Pehl from Commerzbank.

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Adrian Pehl, Commerzbank AG, investigation part - Analyst [11]

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Actually mystery a small part linked to that. Given the Container, Intermodal business has been same well and perhaps exceptionally strong, I mean, given that you're however saying slim volume increases, looks alike that you're very, same cautious above the intimate of the year, i.e., I'm fair wondering why the tone relative to the part is no a small part more upbeat here now after Q1? And too linked to that, what keeps you indeed away from providing a more concrete guidance above the EBIT level than the qualitative guidance you eat given, again, during too no only can Intermodal, besides during too can Container, the operation was relatively well here? And another mystery housekeeping-wise above the Container segment. Plugging can the figures that you eat reported leads me to an assumption that indeed the charge during D&O burden can the port has been calm solid, i.e., I reckon that the charge has gone up to some extent, which looks fair good. above the other hand, Mr. Lappin, can your presentation, you're stating that you're however no seeing a stable condition after the reshuffle of the alliances. And here I was a small part wondering what you are can especial referring to? maybe you could elaborate a small part above this. And then I country eat some follow-up questions.

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Roland Lappin, Hamburger Hafen und Logistik Aktiengesellschaft - CFO & Member of Executive Board [12]

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Yes. Starting with your final question. I mentioned this with respect to the breakdown of the dynamics can Q1. if you emerge can our international volume development and compare to to Hamburg, this is why I mentioned -- don't neglect that we discharge no eat achieved can Q1 a stable condition with respect to phasing out one service and gaining a connect of new services with respect to North America. accordingly -- and I reckon we've got during the time a more stable opinion above (inaudible) after the 6 months, I guess. And this was the intention of this remark. Coming help to the qualitative guidance during the Intermodal segment. I reckon no -- nothing wrong with that. I reckon this is fully can rank with fair standards. And this year -- and don't neglect level foregoing year, we decided to use the qualitative guidance method. And I reckon what the mystery after country be, how discharge you appraise our guidance. I reckon the year fair started, I reckon we had a good and well start. I reckon Angela outlined this. And this is the prerequisite why we approve our guidance during the entire year. And I reckon it's too early to reflect above the mystery if this is a conservative guidance or an aggressive guidance during -- I reckon this I used to desert during you to assess. From management point of view, we commented above the actuals and confirmed the guidance during the entire year.

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Adrian Pehl, Commerzbank AG, investigation part - Analyst [13]

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Okay. And above the pricing can Container, could you elaborate a small part above that? How that has played out can Q1?

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Roland Lappin, Hamburger Hafen und Logistik Aktiengesellschaft - CFO & Member of Executive Board [14]

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Yes. I reckon if you refer to the slide, the comment is temporarily higher storage fees, and this has same much to discharge with climate conditions and rgeister reliability can the beginning of the year. accordingly can principle, nothing surprising, besides during the result is that revenue per TEU grew to the extent reported.

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Adrian Pehl, Commerzbank AG, investigation part - Analyst [15]

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All right, okay. And I've got another questions above CapEx phasing. Obviously, you eat been guiding during EUR 200 million. Now can Q1, I saw that you cost alike EUR 25 million or something. Given that can the past, I'm tempted to speak that you had quite guided conservatively, i.e.e, progressively above the quantity of CapEx. How to you reckon of it can condition of the next 1 or 2 quarters? And what indeed are you investing can 2019 to make up can this relatively high level of EUR 200 million?

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Roland Lappin, Hamburger Hafen und Logistik Aktiengesellschaft - CFO & Member of Executive Board [16]

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I reckon we gave you orientation, besides during I will quote it farther why we abstract to invest can shipping size development. This intend can the Container segment, we concentrate same much above upgrading a more berth genius to assembly to the dimensions of the next nearly of cascadation expected can the far East services. And this way that automatic blocks above the storage side, above the yards eat been coming and a connect of new ship-to-shore cranes. And orders eat been placed already. Punctuality is no an responsible during liner services only, it's during manufacturers too a challenge. And this is, to exist frank, where we eat some uncertainties if we experiment to discharge you during the entire year. And sometimes it's laggering (sic) [lagging] a small after that. The orders needed during CapEx of EUR 200 million or can the mount of EUR 200 million are going to exist placed or eat already been placed, accordingly we are expecting delivery. And the other affair is with respect to the Intermodal segment, I reckon we fair released a news to the fair that we replaced an bid during another 10 locomotives at length of Q1, and we are expecting more lightweight wagons. And again, these orders eat been placed final year already, besides during then you eat to factor can the manufacturing time. And hopefully, entire this machinery will exist delivered above time, and this is the assumption after the guidance given during the entire year. accordingly nothing to accurate from (inaudible). accordingly we indeed -- we used to exist happy, you used to confess machinery money to nearly EUR 200 million by intimate of the year.

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Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board [17]

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Yes. Let's use along this. It's I reckon a same good example, the Vectron MS of Siemens locomotives that we did order, obviously product time is scheduled to the intimate of 2019, besides during they could exist obviously going above too to fountain of 2020. accordingly sometime, we passion to blueprint to eat it within the year. besides during obviously, we too are a small part dependent above the product -- assembly the product times. accordingly therefore, there country exist a slip can one or the other annual year.

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Adrian Pehl, Commerzbank AG, investigation part - Analyst [18]

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All right. Is it beautiful to suppose indeed to speak alike 2019 to visit EUR 140 million, EUR 130 million-ish during Container and EUR 60 million to EUR 70 million above CapEx during Intermodal? Or is that no a beautiful assumption?

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