WILH. WILHELMSEN ASA Both main markets at cyclical low BUY TP: NOK50.0

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1 EQUITY RESEARCH Research report prepared by DNB Markets, a division of DNB Bank ASA Industrials Q4 results review WILH. WILHELMSEN ASA Both main markets at cyclical low We reiterate our BUY recommendation and have raised our target price to NOK50 (NOK47), having updating our estimates to reflect our view of postmerger earnings. We believe that both main markets are at a cyclical low and we calculate a pro forma postmerger market cap of USD2.0bn with the free float 2.6x the size of the company s historical average. Net profit raised by 67% for 2017e and 103% for 2018e, having updating our estimates to reflect post-merger Wallenius Wilhelmsen Logistics earnings. We had previously included synergies of USD100m in our estimates. Main markets look set to bottom out soon and pro forma free float set to be 2.6x the company s historical average. The Wallenius Wilhelmsen Logistics merger is set to close in early April, following which we expect WWASA to attract more international investors with its market cap set to quadruple from cusd0.5bn in June 2016 to a pro forma USD2.0bn at end-q We estimate the free float would be USD500m, or 2.6x ithe company s historical average of USD190m. Also, we believe the negative estimate revision cycle is set to come to an end with: 1) signs that mining-related sales might have bottomed out with higher commodity prices, which would benefit High & Heavy; and 2) our expectations of better margins in shipping with car carrier fleet growth of 0.7% in 2018e and 2019e and record-low new order intake looks to be a cyclical low, c40% below 2012 peak earnings. On 20 January WWASA released pro forma results for Wallenius Wilhelmsen Logistics ASA, based on which we calculate a doubling of WWASA s EBITDA post-merger, before synergies and net of non-recurring items looks to be a cyclical low for WWASA, with adj. EBITDA of USD295m, or USD590m pro forma. Our 2018e EBITDA of USD776m includes USD100m of synergies and USD86m from market improvements but still 30% below the 2012 peak (making equal comparisons with regards to merger synergies). BUY recommendation reiterated and target price raised to NOK50, based on a 2018e EV/EBITDA of 7.0x or P/E of c7.5x incorporating a first full year of operations of the merged entity and USD100m of merger synergies. The stock is trading at a 2018e EV/EBITDA of 6.3x and P/E of 6.0x. Our industrial shipping peer group is trading at a 2018e P/E of 11x on consensus (historical average 7.5x). Year-end Dec e 2018e 2019e Revenue (USDm) 2,522 2,591 2,277 1,927 3,194 3,718 3,774 EBITDA adj (USDm) EBIT adj (USDm) PTP (USDm) EPS rep (USD) EPS adj (USD) DPS (USD) Revenue growth (%) EBITDA growth adj (%) EPS growth adj (%) nm nm EBITDA margin adj (%) EV/Sales adj (x) EV/EBITDA adj (x) EV/EBIT adj (x) P/E adj (x) nm P/Book (x) ROE (%) nm Dividend yield (%) Source: Company (historical figures), DNB Markets (estimates) BUY TP: NOK50.0 WWASA versus OSEBX (12m) Feb Apr Jun Aug Oct Dec Feb Wilh. Wilhelmsen OSEBX (Rebased) Source: Factset SUMMARY Recommendation (prev.) BUY (BUY) Share price (NOK) 40.9 Target price (previous) (NOK) 50.0 (47.0) Upside/downside potential (%) 22 Tickers WWASA NO, WWASA.OL CAPITAL STRUCTURE No. of shares (m) No. of shares fully dil. (m) Market cap. (NOKm) 8,998 NIBD adj end-2017e (USDm) 3,437 Enterprise value adj (USDm) 4,517 Net debt/ebitda adj (x) 5.77 SHARE PRICE PERFORMANCE Abs. 1/3/12m (%) 12/59/37 Rel. 1/3/12m (%) 9/50/3 High/Low 12m (NOK) 45/19 Source: Company, DNB Markets (estimates) NEXT EVENT Q117 10/05/2017 ESTIMATE CHANGES (USD) Year-end Dec 2017e 2018e 2019e EPS (old) EPS (new) Change (%) nm Sales (old) 1,820 1,861 Sales (new) 3,194 3,718 3,774 Change (%) nm Source: DNB Markets, ANALYSTS Nicolay Dyvik nicolay.dyvik@dnb.no Petter Haugen petter.haugen@dnb.no Jørgen Lian jorgen.lian@dnb.no Please see the last two pages for important information. This research report was not produced in the US. Analysts employed by non-us affiliates are not registered/ qualified research analysts with FINRA in the United States.

2 2016 Shipping Logistics Others 2017e Shipping Logistics Others 2018e DNB Markets the company Investment case overview Share price performance, DNB Markets target price, bear- and bull-case scenarios 65.0 NOK61.0 (49%) 55.0 NOK50.0 (22%) 45.0 NOK NOK29.0 (-29%) Feb 2016 Jun 2016 Oct 2016 Feb 2017 Jun 2017 Oct 2017 Feb 2018 Historical Share Price Performance Price Target (Feb 18) Current Share Price Source: FactSet, DNB Markets Target price methodology Our target price is based on a 2018e EV/EBITDA of 7.0x or P/E of c7.5x incorporating a first full year of operations of the merged entity and USD100m of merger synergies. The stock is trading at a 2018e EV/EBITDA of 6.3x and P/E of 6.0x, which we view as conservative given the 10% ROCE the WW group of companies has achieved in the past 20 years, above the 6% average for general shipping. Our industrial shipping peer group is trading at a 2018e P/E of 11x on consensus (historical average 7.5x). Source: DNB Markets Downside risks to our investment case A weaker than expected pick-up in the mining industry, which would be negative for the company and its High & Heavy shipments. Further margin pressure in the Shipping division. Less optimal cargo mix, opening up for lower dividend payments and estimate downgrades. More provisions antitrust. being made for DNB Markets investment case and how we differ from consensus Comparisons between our estimates and consensus are not meaningful, as few consensus contributors include the new entity. We believe a trough in the High & Heavy market is approaching and that we should see a better market for mining sales with higher commodity prices. However, we see slow growth in the car shipping trade in the years ahead, with new regions accounting for more of the growth where competition is intensifying. Upside risks to our investment case Stronger than expected pick-up in the mining industry, which would benefit the company and its High & Heavy shipments. Lower share of transplant production leading to more shipments of cars. More optimal cargo mix, opening up for higher dividend payments and estimate upgrades. Lower than expected costs related to antitrust. Source: DNB Markets Source: DNB Markets Source: DNB Markets EBITDA bridge e (USDm) 1, , Source: Company (historical figures), DNB Markets (estimates) 2

3 E 2017E 2018E 2019E 2020E -3.4 % -0.3 % Fleet growth (%) 1.6 % 0.7 % 0.7 % 2.6 % 3.1 % 6.7 % 5.5 % 5.1 % 4.6 % 9.0 % 8.2 % 9.7 % Shipping adj. EBIT margin (%) 10.8 % 13.3 % 2017 EBITDA (USDm) USDm MAERSK GLNG WWASA - pro-forma GMLP GLOG EURN FRO WWASA - today STOLT HLNG DNORD STNG HMLP BWLPG GOGL LPG WWASA - June 2016 SBKL EGLE DHT Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 YTD Pro-forma USDm 2,595 2,045 1,590 1,279 1,233 1,144 1, USDm DNB Markets the company WWASA investment case in chart form Negative estimate revisions cycle set to come to an end WWASA, post-merger, should attract foreign investors with a market cap up c4.0x since June 2016 to pro forma end-q1e and as free float would rise by 72% pro forma and free float would be USD500m or 2.6x its historical average of USD190m 3,000 2,500 2,000 1, , Source: DNB Markets, Bloomberg Negative estimate revision cycle likely come to an end Source: DNB Markets, Bloomberg with positive signs that mining-related sales may have bottomed out with higher commodity prices 7,000 6,000 5,000 4,000 3,000 2,000 1, North America Latin America EAME Asia Pacific Source: Bloomberg..and as car carrier fleet growth at 0.7% in both 2018e and 2019e combined with record-low new order intake Source: Caterpillar...should contribute to a margin increase in WWASA s Shipping division (adj. EBIT margin %) 16.0 % 14.0 % 12.0 % 10.0 % 8.0 % 6.0 % 4.0 % 2.0 % 0.0 % -2.0 % -4.0 % -6.0 % 16% 14% 12% 10% 8% 6% 4% 2% 0% 4% 10% 11% 14% 11% 9% 12% 9% 10% 13% 13% 13% Source: DNB Markets (forecast), Clarksons (historical) Source: DNB Markets (forecast), Company (historical) 3

4 Wallenius Wilhelmsen Logistics ASA Creating world-leading transporter of car and Ro-Ro cargoes Wilh. Wilhelmsen ASA to create Wallenius Wilhelmsen Logistics ASA On 5 September 2016, Wilh. Wilhelmsen Holding ASA (WWH) and Wilh. Wilhelmsen ASA (WWASA) signed a letter of intent with Rederi AB Soya (Soya) and Wallenius Lines AB (WL), agreeing to establish a new ownership structure for their jointly owned investments (the LoI). The intention of the LoI is to merge ownership in the jointly owned entities Wallenius Wilhelmsen Logistics (WWL, jointly owned 100%), EUKOR Car Carriers (EUKOR, jointly owned 80%) and American Roll-on Roll-off Carrier (ARC, jointly owned 100%), in addition to the ownership of the parties vessels and other assets and liabilities. To facilitate for the proposed structure, WL and its subsidiaries are in the process of transferring by way of intragroup transfers and sales all relevant assets, rights and obligations to the wholly-owned Wallroll AB (Wallroll). Wilh.Wilhelmsen Holding and Wallroll would own 75.6% WWASA today has 220m outstanding shares, of which WWH owns 160m. On completion of the merger, WL would receive a total of 203m shares, taking Wallenius Wilhelmsen Logistics ASA s outstanding shares 423m. WL would hold 48% and WWH 37.8%, with the remaining 14.2% being held by current WWASA minority shareholders. As the merger is based on a 50:50 exchange ratio, WL would, following completion of the merger, reduce its shareholding by 43m shares to reach the same ownership level as WWH. Subject to certain conditions, at least 25% of WL share disposal would be sold within four weeks after completion of the merger, and the remainder would be sold no later than three weeks after the second quarterly report, scheduled in August. Company overview WWASA Wallroll AB Current share count: 220,000,000 WWI ownership: 73% Free float: 60,000,000 shares Currently a private company Shares in merger: 203,104,938 WWL 50% 50% ARC 50% 50% EUKOR 40% 20% (Hyundai) 40% Wallenuis Wilhelmsen Logistics ASA WWL 100% + ARC 100% + EUKOR 80% Post merger share count: 423,104,938 WWI ownership: 37.8% Wallroll target ownership: 37.8% Post merger free float: 103,104,938 shares Source: Company 4

5 EBITDA (USDm) DNB Markets the company Post-merger the controlled fleet would number 130 vessels Today WWASA controls (has above 50% ownership of vessels or charters) 31 vessels, of which 24 are owned and seven are on charter, while Wallroll controls 31 vessels, 25 owned and six chartered. Post-merger the controlled fleet would number 130 vessels, an increase in the previous entities combined control fleet of 68 vessels due to the new majority in EUKOR s fleet of 72 vessels. The 865k CEU capacity of the fleet would equate to more than 22% of the current pure car carrier fleet (PCC, excluding Clarksons Ro-Ro capacity); additionally the merged company would take delivery of six newbuilds totalling a further 47k CEUs, or 13% of the current PCC order book, during e. The ocean transportation activities are supported by a variety of advanced shore-based logistics services. The logistics activities are conducted by WWL and the ARC group. In 2016, Logistics adj. EBITDA (also for Glovis contribution) accounted for c15% of WWASA EBITDA. In WWL, the logistics activities are organised in four business areas; terminal services, technical services, inland distribution and supply-chain management. These four business areas offer cargo-handling, vehicle repair and outfitting, quality control, inland transportation management and supply-chain management from factory to dealer. A large part of the WWASA group s logistics activities take place through WWL s services, inside or close to ocean terminals. The terminal function is the link between the ocean transport and the road, rail and short-sea activities. The terminal services provided by WWL are vessel, rail, truck and barge loading and discharge, storage, survey and customs documentation. Merged controlled fleet post-merger (number of vessels) Merged controlled fleet post-merger (vessel CEU capacity) 2016 adj. EBITDA (also for Glovis contribution with divisional split vessels 52 53% % ,000 CEUs % 50 0 WWL ARC EUKOR WWL ARC EUKOR Source: Company, DNB Markets Source: Company, DNB Markets Source: Company, DNB Markets Post-merger EBITDA set to double before synergies Conservative estimates, with 2018e EBITDA 30% below the 2012 peak On 20 January WWASA released pro forma results for Wallenius Wilhelmsen Logistics ASA for Q1 Q3 2016, which on our calculations show, net of one-offs and Glovis Q contribution, that WWASA s EBITDA would double post-merger before merger synergies. We focus on EBITDA over net profit as the new entity is likely to be refinanced and as private versus public companies might have adopted different accounting with regards to depreciation of assets. According to WWASA, the merger is expected to enable substantial run-rate synergies at the high end of the previously announced range of USD50m 100m by combining the assets and realising economies of scale, including more optimal tonnage planning, and administrative, commercial and operational efficiencies between the entities. 2016e was a cyclical low for WWASA, with adj. EBITDA of USD295m (excluding Glovis Q contribution). Below we show our e EBITDA bridge from WWASA to Wallenius Wilhelmsen Logistics ASA, and how we arrive at our EBITDA forecast of USD768m 5

6 EBITDA adj. (USDm) Adj. EBITDA (USDm) DNB Markets the company by 2018, including USD100m in synergies and USD86m market improvements (car carrier, logistics, High & Heavy). In our view USD776m is conservative, as it would be 30% below the 2012 peak (making equal comparisons with regards to synergies) EBITDA adj. bridge from WWASA to 2018e pro forma (USDm) WWASA 2016 adj. EBITDA DNB est. for Wallenius 2.0x WWASA DNB pro-forma 2016 Synergies Market improvement 2018e pro-forma Source: DNB Markets (forecast), Company (historical) Pro forma Q1 Q adj. EBITDA is 2.0x WWASA s adj. EBITDA (USDm) Wilh.Wilhelmsen ASA Pro-forma USDm Q Q Q m m 2016 Operating revenue ,301 2,782 Share of profits from associates Gain on sale of assets Total income ,769 3,253 Total income adj ,301 2,782 Voyage expenses ,209 Vessel expenses Charter expenses Employee benefits Other expenses Total expenses ,085-2, x EBITDA EBITDA adj WWASA adj. EBITDA (also adjusted for Glovis, USDm) Shipping Logistics Holding WWASA Source: Company (historical) Source: Company (historical) 6

7 P/E P/E DNB Markets the company Valuation BUY reiterated, target price raised to NOK50 (NOK47) We reiterate our BUY recommendation and have raised our target price to NOK50 (NOK47), having updating for the post-merger estimates of Wallenius Wilhelmsen Logistics, which is due to close in April Our target price is based on a 2018e EV/EBITDA of 7.0x or P/E of c7.5x incorporating a first full year of operations of the merged entity and USD100m of merger synergies. The stock is trading at a 2018e EV/EBITDA of 6.3x and P/E of 6.0x. Our industrial shipping peer group is trading at a 2018e P/E of 11x on consensus (historical average 7.5x). We believe WWASA post-merger would attract foreign investors, with its market cap set to quadruple from cusd0.5bn in June 2016 to a pro forma USD2.0bn at that date. We also estimate the value of the free float would be USD500m, or 2.6x its historical average of USD190m. We also believe the negative estimate revision cycle is set to come to an end with: 1) positive signs that mining-related sales may have bottomed out with higher commodity prices, which would benefit High & Heavy; and 2) we should see improved margins in shipping with car carrier fleet growth of 0.7% in both 2018e and 2019e combined with recordlow new order intake. EV/EBITDA (low/base/high case, x/usdm) EV/EBITDA Low case Base case High case 2018 EBITDA Multiple 7.0x 7.0x 7.0x Enterprise value 4,345 5,431 5,975 Net debt -2,863-2,863-2,863 Equity value 1,482 2,568 3,111 Shares USD/NOK NOK/share Source: DNB Markets P/E (low/base/high case, x/usdm) P/E Low case Base case High case 2018 net profit Multiple 6.0x 7.5x 8.5x Equity value 1,624 2,538 3,164 Shares USD/NOK NOK/share Source: DNB Markets Industrial shipping peer group 2-year forward P/E (x) year fwd P/E Historical average Source: DNB Markets, Bloomberg Wilh.Wilhelmsen ASA 2-year forward P/E (x) Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16 2 year fwd P/E Historical average Source: DNB Markets, Bloomberg 7

8 NOK/share DNB Markets the company WWASA share price (NOK/share) Nov 2016: Trump Wins Election - rotation into cyclicals & multiple expansion on new structure 5 Sept 2016: Wilhelmsen and Wallenius merger - world leading shipping/logistics platform 63% 10 Feb 2016: Glovis demerged from WWASA into Treasure % 27% Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 Source: Bloomberg Average ROCE earned by WW Group over 1997 H was 10%, above the 6% average for general shipping 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% H16 WW Group Average of commodity shipping sectors Source: DNB Markets 8

9 E 2017E 2018E 2019E E 2017E 2018E 2019E CMBm USD/CEU E 2017E 2018E 2019E E 2017E 2018E 2019E Shipping adj. EBIT margin (%) Adjusted EBIT (USDm) DNB Markets the company Key charts Shipping division High & heavy rebound a catalyst to a weak shipping market We forecast Shipping adj. EBIT margin (%) to see some improvement following merger synergies and High & Heavy improvement which would lift Shipping adj. EBIT (USDm) somewhat, despite a challenging car carrier market 16% 14% 14% 12% 13% 13% % 10% 8% 10% 11% 11% 9% 9% 10% % 4% 2% 4% % 0 Source: DNB Markets (estimates), Company (historical) Source: DNB Markets (estimates), Company (historical) We expect Shipping volumes (CBM) to be relatively flat in the years ahead, adj. additional volumes from the merger with some improvement in High & Heavy and further pressure on freight rates as competition is intensifying Source: DNB Markets (estimates), Company (historical) Source: DNB Markets (estimates), Company (historical) 9

10 % 0% 0% 0% 0% 1% 1% 78 1% 2% 1% 1% % 4% k CEU k CEU % Jan-96 Feb-97 Mar-98 Apr-99 May-00 Jun-01 Jul-02 Aug-03 Sep-04 Oct-05 Nov-06 Dec-07 Jan-09 Feb-10 Mar-11 Apr-12 May-13 Jun-14 Jul-15 Aug e 2017e 2018e 2019e -3% Fleet growth (%) 0% 1% 1% 2% 2% 2% 3% 3% 5% 5% 5% 5% 7% PCC orderbook/fleet 8% 9% 10% 11% 8% 13% DNB Markets the company Car carrier market Supply update The fleet actually declined by 0.3% in 2016, below our forecast of 1% growth. However, we have not made any significant changes to our future supply estimates for the PCC fleet; we have increased our fleet growth estimate marginally for 2017, from 4.1% to 4.6%, while we keep our estimate of 0.7% for 2018, which is held at the same level in The most important data point in 2016 was the all-time-low new ordering of only three vessels or 19k CEU. The previous low was six vessels in 2011, while the record-high was 105 vessels in Scrapping coming up to 3.8% of the fleet is also noteworthy, and we have increased our scrapping estimate for 2017 from 1.8% to 2.4%. The PCC (pure car carrier) order book now stands at 10% of the current fleet, and in that order book about 95% of the capacity is in the largest segment of vessels above 6500ceu. Fleet set to grow at low levels in 2016e-2019e and the order book to fleet ratio is coming down again 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% -6% 60% 50% 40% 30% 20% 10% 0% Annual fleet growth average growth Source: Clarksons (historical figures), DNB Markets (estimates) Source: Clarksons as new ordering in 2016 was an all-time-low... while scrapping in 2016 was at 8 years high % % 12.0% 10.0% % % 4.0% 2.0% % New orders placed, historical Scrapping as % of fleet start of year Source: Clarksons Source: Clarksons 10

11 -0.3 % 1.0 % 0.7 % 0.7 % 0.7 % 0.5 % 0.9 % 0.8 % 1.2 % 4.1 % 4.6 % 1.7 % 1.5 % 1.7 % USD/day 10,292 13,000 13,000 12,000 13,000 13,000 14, % 80 % 78 % 79 % 77 % 78 % 79 % DNB Markets the company Estimate revisions to the fundamental balance Below we show revisions to the main components in our fundamental model. We have lowered our rate expectations somewhat due to the lower rate levels though In general all our revisions are relatively undramatic; we still believe fleet growth will be around 4% in 2017, before slowing to just shy of 1% p.a. in Rate forecast revisions Fleet utilisation revisions 16, % 14,000 12,000 10, % 80 % 70 % 60 % 8, % 6,000 4,000 2, % 30 % 20 % 10 % e 2018e 2019e 0 % e 2018e 2019e PCC 4-6k ceu (USD/day), old PCC 4-6k ceu (USD/day), new Utilisation, old Utilisation, new Source: Clarksons (historical figures), DNB Markets (estimates) Source: Clarksons (historical figures), DNB Markets (estimates) Fleet growth revisions New ordering revisions 5% 1.8 % 4% 1.6 % 1.4 % 3% 1.2 % 1.0 % 2% 0.8 % 1% 0.6 % 0.4 % 0% -1% e 2018e 2019e 0.2 % 0.0 % e 2018e 2019e Conventional supply growth, old Conventional supply growth, new New ordering, old New ordering, new Source: Clarksons (historical figures), DNB Markets (estimates) Source: Clarksons (historical figures), DNB Markets (estimates) 11

12 12 Market balance Our shipping PCC model for supply SUPPLY e 2018e 2019e Fleet, start of year (k ceu) Historical deliveries (k ceu) Order book Assumed not delivered** Deliveries from current order book (k ceu) % not delivered of remaining OB -5 % 0 % 0 % New orders placed, historical New orders placed, future Total ordering (k ceu) Ordering as % of fleet start of year 16.5% 21.4% 14.3% 18.2% 21.9% 9.0% 2.5% 4.5% 0.9% 4.7% 9.2% 3.6% 7.6% 0.5% 0.8% 1.2% 1.7% Delivery of new orders placed, future Total deliveries (k ceu) Deliveries as % of fleet start of year 4.2% 7.0% 9.0% 9.7% 10.9% 14.0% 10.5% 9.5% 9.6% 5.7% 3.3% 3.9% 3.8% 3.5% 6.4% 2.3% 2.3% Historical scrapping (k ceu) Forecasted scrapping (k ceu) Total scrapping (k ceu) Scrapping as % of fleet start of year 0.4% 0.0% 0.0% 0.0% 0.2% 0.7% 13.7% 3.7% 1.4% 0.5% 1.7% 1.3% 0.8% 3.8% 2.4% 1.7% 1.5% Misc.(net additions) Fleet, end of year (k ceu) YoY growth 6.7 % 9.0 % 9.7 % 10.8 % 13.3 % -3.4 % 5.5 % 8.2 % 5.1 % 1.6 % 2.6 % 3.1 % -0.3 % 4.6 % 0.7 % 0.7 % Fleet average normal speed, laden (knot) Fleet potential transport capacity (trn ton-mile/year) Time used for normal port operations (%) 34 % 34 % 34 % 34 % 33 % 33 % 32 % 31 % 29 % 29 % 28 % 28 % 30 % 31 % 30 % 30 % 30 % Port operations (trn ton-mile/year) Congestion, share of fleet (%) 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% Congestion (trn ton-mile/year) Bunker price (USD/ton) Reported speed reduction (%)*** -3 % -7 % -15 % -16 % -17 % -19 % -21 % -21 % Optimal speed in open sea, laden (knot) Optimal speed in open sea, ballast (knot) Optimal speed, blended by size and L/B (knot) Speed reduction from normal to optimal speed (%) 0 % 4 % 4 % 2 % 1 % -7 % -12 % -17 % -19 % -19 % -18 % -15 % -4 % -2 % -7 % -8 % -11 % Share of market able to utilize optimal speed, historical (%) 29 % 28 % 38 % 70 % 74 % 83 % 97 % 100 % 100 % Share of market able to utilize optimal speed, future (%) 0 % 100 % 100 % 100 % Share of market able to utilize optimal speed, combined (%) 29 % 28 % 38 % 70 % 74 % 83 % 97 % 100 % 100 % 100 % 100 % 100 % Economic speed (trn ton-mile) Capacity taken out in slower speed -1 % -3 % -5 % -11 % -11 % -12 % -14 % -14 % -15 % -15 % -15 % -15 % Net transport capacity (trn ton-mile/year) YoY growth 5.3 % 8.8 % 10.0 % 10.0 % 12.3 % 0.9 % -0.4 % 0.7 % 7.0 % 1.3 % 0.5 % -1.9 % -1.0 % 2.6 % 3.1 % 0.3 % Source: UN Comtrade. LMCA, Clarksons, DNB Markets (all estimates)

13 13 Our shipping PCC model: demand, balance and rate forecasts DEMAND e 2018e 2019e Volumes per exporter (k tonne/year) Belgium 2,574 2,859 2,864 2,994 3,084 2,972 1,937 1,969 2,628 2,213 2,607 2,672 2,254 2,120 1,919 2,382 2,546 Canada 1,938 2,176 2,171 2,244 2,236 1,930 1,427 2,223 2,721 2,488 2,500 2,923 2,728 2,756 2,470 2,267 2,206 China France 3,064 3,249 3,142 3,194 3,185 1,873 1,696 1,860 2,236 1,954 1,540 1,570 1,711 1,644 1,819 1,882 1,857 Germany 6,012 6,166 6,586 6,777 7,472 7,220 5,691 7,094 7,836 7,786 7,796 8,160 8,559 8,724 8,642 8,604 8,624 India Japan 4,953 5,211 8,545 8,292 8,649 9,260 4,689 6,833 7,257 7,994 6,419 6,832 6,120 6,138 6,009 5,873 5,905 Mexico 1, ,172 1,617 1,515 1,740 1,196 1,957 2,427 2,635 2,614 2,849 2,648 2,785 3,132 3,533 3,793 Rep. of Korea 2,383 3,359 3,530 3,740 4,049 3,783 2,882 3,783 4,398 4,470 4,332 4,331 4,184 4,191 4,185 4,126 4,030 Spain 2,308 2,301 2,079 2,079 2,079 2,178 1,933 2,049 2,076 1,712 1,981 2,125 2,602 2,698 2,699 2,674 2,818 Thailand ,018 United Kingdom 1,570 1,703 1,791 1,701 1,854 1,774 1,205 1,583 1,873 2,006 2,081 2,091 2,172 2,282 2,369 2,334 2,425 USA 1,847 2,029 2,521 2,877 3,640 2,609 1,952 2,758 3,796 3,301 3,468 4,293 3,427 3,475 3,478 3,496 3,551 Others 5,648 6,442 7,274 8,654 9,797 9,256 7,917 8,808 10,072 9,755 10,089 9,563 10,141 10,560 11,173 11,877 12,602 Total seaborne trade 33,538 36,581 42,147 44,741 48,237 45,098 33,250 42,159 48,712 47,723 46,969 49,047 48,214 49,252 49,890 51,162 52,641 YoY growth 9 % 15 % 6 % 8 % -7 % -26 % 27 % 16 % -2 % -2 % 4 % -2 % 2 % 1 % 3 % 3 % Laden ton-mile demand (ton-mile/year, 10^9) Belgium Canada China France Germany India Japan Mexico Rep. of Korea Spain Thailand United Kingdom USA Others Total laden tonne-mile YoY growth 16 % 35 % 6 % 9 % 1 % -37 % 39 % 19 % 5 % -4 % 3 % -6 % 2 % 1 % 1 % 2 % Tonne-mile demand adjusted for ballasting Utilisation (adjusted for speed) (%) 71 % 78 % 97 % 93 % 92 % 83 % 52 % 73 % 86 % 84 % 80 % 81 % 78 % 80 % 79 % 78 % 79 % Conventional utilisation (not speed adjusted) (%) 71 % 78 % 97 % 93 % 92 % 83 % 49 % 68 % 75 % 73 % 67 % 68 % 63 % 65 % 64 % 63 % 65 % TC rates (USD/day) PCC 6500CEU (USD/day) 24,063 33,750 39,000 41,125 44,375 37,500 14,875 16,500 20,875 23,500 23,250 25,375 23,333 20,292 22,000 23,000 24,000 PCC 4500CEU (USD/day) 23,625 27,250 32,500 34,000 36,438 28,938 12,250 12,125 13,500 15,688 14,250 14,063 13,271 10,292 12,000 13,000 14,000 WWASA (car only) EBIT margin adj (%) 4 % 10 % 11 % 14 % 10 % 8 % 12 % *: for 2017 this is adjusted for expected future deliveres in the remainder of 2017 **: exclude all contracts placed before 2011 ***: YTD 2017 Source: UN Comtrade. LMCA, Clarksons, DNB Markets (all estimates)

14 Forecast changes P&L New Old Change (USDm) 2017e 2018e 2019e 2017e 2018e 2019e 2017e 2018e 2019e Revenues 3,194 3,718 3,774 1,820 1,861 1,374 1,857 Cost of sales -1,992-2,209-2,218-1,139-1, ,085 Gross profit 1,202 1,509 1, Operating expenses EBITDA EBITDA adj EBITDA margin (%) nm nm Depreciation EBITA Amortisation EBIT EBIT adj Associated companies Net interest FX gains Other financial items Net financial items Non-recurring items PBT Taxes Minorities Net profit Adjustments to net profit Net profit adj Per share data (USD) EPS EPS adj DPS Other key metrics (%) Revenue growth nm nm EBIT adj growth nm nm EPS adj growth nm nm Avg. number of shares (m) Capex OpFCF Working capital NIBD adj 3,437 2,969 2,418 1,467 1,217 1,970 1,752 Source: DNB Markets 14

15 Forecast changes By segment and assumptions New Old Change (USDm) 2017e 2018e 2019e 2017e 2018e 2019e 2017e 2018e 2019e Revenues Shipping 2,478 2,844 2,865 1,412 1,422 1,067 1,422 Logistics EBIT Shipping Logistics EBITDA Shipping Logistics Source: DNB Markets 15

16 Quarterly numbers (USDm) Q Q Q Q Q Q Q1 2017e Q2 2017e Q3 2017e Q4 2017e Q1 2018e Revenues Cost of sales Gross profit Operating expenses EBITDA Depreciation EBITA Amortisation EBIT Associated companies Net interest FX gains Other financial items Net financial items Non-recurring items PBT Taxes Minorities Net profit Adjustments to net profit Net profit adj Dividend paid Avg. number of shares (m) Per share data (USD) EPS EPS adj DPS Growth and margins (%) Revenues, QOQ growth Revenues, YOY growth EPS adj, YOY growth nm nm nm nm 79.9 Gross margin EBITDA adj margin nm Depreciation/revenues EBIT adj margin nm Net profit margin nm nm Source: Company (historical figures), DNB Markets (estimates) 16

17 Adjustments to quarterly numbers (USDm) Q Q Q Q Q Q Q1 2017e Q2 2017e Q3 2017e Q4 2017e Q1 2018e EBITDA Gains and losses EBITDA adj EBITA Gains and losses EBITA adj EBIT Gains and losses EBIT adj Net profit Gains and losses Net profit adj Source: Company (historical figures), DNB Markets (estimates) Quarterly numbers by segment and assumptions (USDm) Q Q Q Q Q Q Q1 2017e Q2 2017e Q3 2017e Q4 2017e Q1 2018e Revenues Shipping Logistics EBIT Shipping Logistics EBITDA Shipping Logistics Source: Company (historical figures), DNB Markets (estimates) 17

18 Annual P&L (USDm) e 2018e 2019e Revenues 1,958 2,422 2,816 2,522 2,591 2,277 1,927 3,194 3,718 3,774 Cost of sales -1,299-1,604-1,793-1,535-1,668-1,384-1,147-1,992-2,209-2,218 Gross profit , ,202 1,509 1,555 Operating expenses EBITDA Depreciation EBITA Amortisation EBIT Associated companies Net interest FX gains Other financial items Net financial items Non-recurring items PBT Taxes Effective tax rate (%) Minorities Net profit Adjustments to net profit Net profit adj Dividend paid Avg. number of shares Per share data (USD) EPS EPS adj DPS Growth and margins (%) Revenue growth EPS adj growth nm nm Gross margin EBITDA margin EBITDA adj margin Depreciation/revenues EBIT margin EBIT adj margin PBT margin nm Net profit margin nm Source: Company (historical figures), DNB Markets (estimates) 18

19 Adjustments to annual P&L (USDm) e 2018e 2019e EBITDA Gains and losses EBITDA adj EBITA Gains and losses EBITA adj EBIT Gains and losses EBIT adj Net profit Gains and losses Net profit adj Per share data (USD) EPS Recommended adjustment EPS adj Source: Company (historical figures), DNB Markets (estimates) Cash flow (USDm) e 2018e 2019e Net profit Depreciation and amortisation Other non-cash adjustments Change in net working capital Cash flow from operations (CFO) Capital expenditure Acquisitions/Investments Divestments Cash flow from investing (CFI) Free cash flow (FCF) Net change in debt Dividends paid Share issue (repurchase) Other Cash flow from financing (CFF) Total cash flow (CFO+CFI+CFF) FCFF calculation Free cash flow Less: net interest Less: acquisitions Less: divestments Growth (%) CFO CFI nm nm FCF CFF FCFF nm nm nm nm nm nm nm nm nm nm Source: Company (historical figures), DNB Markets (estimates) 19

20 Balance sheet (USDm) e 2018e 2019e Assets 2,776 3,048 3,410 3,388 3,353 3,299 3,013 7,087 6,971 6,888 Inventories Trade receivables Other receivables Cash and cash equivalents Current assets ,172 1,358 1,577 Property, plant and equipment 1,404 1,731 1,868 1,821 1,760 1,827 1,879 5,355 5,053 4,751 Other intangible assets Non-current financial assets ,126 1,164 1, Non-current assets 2,154 2,610 2,899 2,952 2,955 2,925 2,708 5,915 5,613 5,311 Total assets 2,776 3,048 3,410 3,388 3,353 3,299 3,013 7,087 6,971 6,888 Equity and liabilities 2,776 3,049 3,410 3,388 3,353 3,299 3,013 7,087 6,971 6,888 Total equity to the parent 1,107 1,207 1,552 1,632 1,707 1,654 1,435 2,204 2,408 2,644 Minority interests Total equity 1,107 1,207 1,552 1,632 1,707 1,654 1,435 2,204 2,408 2,644 Other payables and accruals Short-term debt Total current liabilities Long-term debt 1,281 1,484 1,628 1,416 1,445 1,318 1,333 3,651 3,331 3,011 Deferred tax liabilities Total non-current liabilities 1,381 1,537 1,697 1,527 1,501 1,360 1,373 3,920 3,600 3,280 Total liabilities 1,669 1,842 1,858 1,756 1,646 1,645 1,578 4,883 4,564 4,244 Total equity and liabilities 2,776 3,049 3,410 3,388 3,353 3,299 3,013 7,087 6,971 6,888 Key metrics Net interest bearing debt 1,421 1,762 1,630 1,725 1,630 1,656 1,743 3,437 2,969 2,418 Source: Company (historical figures), DNB Markets (estimates) 20

21 Valuation ratios (USDm) e 2018e 2019e Enterprise value Share price (USD) Number of shares (m) Market capitalisation 1,406 1,054 1,965 2,054 1, ,825 2,077 2,077 Net interest bearing debt 1,421 1,762 1,630 1,725 1,630 1,656 1,743 3,437 2,969 2,418 Adjustments to NIBD Net interest bearing debt adj 1,421 1,762 1,630 1,725 1,630 1,656 1,743 3,437 2,969 2,418 EV 2,827 2,816 3,595 3,779 2,996 2,536 2,607 5,262 5,045 4,494 EV adj 2,827 2,816 3,595 3,779 2,996 2,536 2,607 5,262 5,045 4,494 Valuation EPS EPS adj DPS P/E P/E adj P/B Average ROE 1.3% 12.3% 29.7% 17.1% 9.9% -0.2% 32.5% 11.2% 14.7% 14.7% Earnings yield adj 0.6% 13.5% 14.0% 13.2% 12.1% -3.7% 5.4% 11.2% 16.3% 17.9% Dividend yield 1.2% 3.8% 3.2% 8.9% 5.4% 4.6% 0.0% 6.9% 6.9% 6.9% EV/SALES EV/SALES adj EV/EBITDA EV/EBITDA adj EV/EBIT EV/EBIT adj EV/NOPLAT EV/OpFCF (taxed) Source: Company (historical figures), DNB Markets (estimates) 21

22 Key accounting ratios e 2018e 2019e Profitability (%) ROA Return on invested capital (%) Net PPE/revenues Working capital/revenues Cash flow ratios (%) FCF/revenues FCF/market capitalisation CFO/revenues CFO/market capitalisation CFO/capex CFO/current liabilities Cash conversion ratio Capex/revenues Capex/depreciation OpFCF margin Total payout ratio Leverage and solvency (x) Interest cover EBIT/interest payable EBITA adj/interest payable Cash coverage Net debt/ebitda Total debt/total capital (BV) LTD / (LTD + equity (MV)) Cash conversion cycle Inventory turnover days Receivables turnover days Source: Company (historical figures), DNB Markets (estimates) 22

23 Important Information Company: Wilh. Wilhelmsen ASA Coverage by Analyst: Nicolay Dyvik Date: 10/2/2017 This report has been prepared by DNB Markets, a division of DNB Bank ASA. DNB Bank ASA is a part of the DNB Group. This report is based on information obtained from public sources that DNB Markets believes to be reliable but which DNB Markets has not independently verified, and DNB Markets makes no guarantee, representation or warranty as to its accuracy or completeness. This report does not, and does not attempt to, contain everything material which there is to be said about the Company. Any opinions expressed herein reflect DNB Markets judgement at the time the report was prepared and are subject to change without notice. The report is planned updated minimum every quarter. Recommendation structure and risk classification DNB Markets recommendations are based on absolute performance: Buy Hold Sell - indicates an expected return greater than 10% within 12 months - indicates an expected return between 0 and 10% within 12 months - indicates an expected negative return within 12 months The return-requirement bands above may be applied with some degree of flexibility depending on the liquidity and volatility characteristics of the individual share. High risk Medium risk Low risk - Volatility over 40 percent. - Volatility from 25 percent to 40 percent. - Volatility under 25 percent. Current 6 months volatility rates this security as HIGH risk. Investing in any security is subject to substantial risk. Return on investment may vary greatly. Careful consideration for possible financial distress should be accounted for before investing in any security. Price targets are based on a combination of several valuation methods such as discounted cash flow, pricing based on earnings multiples, multiple on book value, net asset value and peer comparison. Substantial material sources for coverage of this company include historical financial figures and communication with the company, and relevant third party information. Recommendations and historical target prices below may not compile all recommendations by DNB Markets, for further information please contact DNB Markets. Price, Rating, and Price Target History Wilh. Wilhelmsen ASA (WWASA NO) as of B : B : B : B : B : B : Source: Factset Estimates (Prices) / DNB (ratings and target price) Conflict of interest DNB Markets/DNB Group may receive compensation for investment banking services or other products/services from Wilh. Wilhelmsen ASA. Share positions in the company: Analyst* Employees** DNB*** Update Number of shares /02/2017 *The analyst or any close associates. **Share positions does not include administration and section FX/Treasury. ***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included. Recommendation distribution and corporate clients for the last 12 months Buy Hold Sell No rec Total Number % of total 40% 38% 19% 4% DNB Markets client 14% 7% 3% 3% 61 23