YTD13 & 3Q 2013 Performance Review. 30 October 2013

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Belinda Adams
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1 YTD13 & 3Q 2013 Performance Review 30 October 2013

2 Forward Looking Statements The following presentation includes forward-looking statements, which involve known and unknown risks and uncertainties, that could cause actual results or performance to differ. Forward looking information is based on current views and assumptions of management, including, but not limited to, prevailing economic and market conditions. Such statements are not, and should not be interpreted as a forecast or projection of future performance.

3 1. YTD13 & 3Q 2013 Results Highlights ht

4 NOL Group YTD13 Results Highlights Difficult market conditions continue Steep decline in YoY market freight rates from weak demand and industry overcapacity Liner & Logistics delivered improved results, Group Core EBIT loss reduced by 33% YoY or US$42m Group net profit of US$61m Operational & cost efficiencies drove Liner performance Core EBITDA improved 89% YoY to US$89m Core EBIT loss reduced by 23% YoY to US$130m Profitable growth from Logistics Emerging markets led growth, +17% in Asia/Middle East Business expansion & cost discipline improved Core EBIT +10% YoY to US$45m Page 4 30 October Q 2013 Performance Review

5 Tougher & volatile freight rate environment 1,500 1, Q13 vs 3Q12 index drops 1, % Jan Feb Mar Apr May Jun Jul Aug Sept Shanghai Containerized Freight Index (SCFI) Source: SCFI Page 5 30 October Q 2013 Performance Review

6 from weak demand & industry overcapacity across major trade lanes US$/TEU 1,500 Asia-Europe Freight Rate 1,491 US$/TEU 1,500 Asia-US West Coast Freight Rate 1,294 1,250 1,201 1,250 1,000 1, Q 12 3Q 13 3Q 12 3Q 13 Source: SCFI Page 6 30 October Q 2013 Performance Review

7 Operational & cost efficiencies continued to improve Group Core EBIT* 3,000 2,000 1,000 Revenue (US$m) 0 Revenue (US$m) (LHS) 2,378 2,333 2,302 (226) ,499 (61) Core EBIT (US$m) (RHS) 2,371 (76) YTD13 Revenue US$(516)m YoY 2,064 2,062 (31) YTD13 Core EBIT +US$42m YoY 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 22 Core EBIT (US$m) *With effect from 3Q13, in addition to interest expense, the definition of Core EBIT has changed to exclude other finance expense and income. Comparative numbers restated accordingly Page 7 30 October Q 2013 Performance Review

8 2. YTD13 & 3Q YTD13 & 3Q 2013 Financial Performance

Group Financial Highlights YTD13 Core EBITDA improved 49% to US$143m Revenue Core EBITDA* US$m 7,500

YTD13 % Better/ (Worse) % Better/ (Worse) % Better/ (Worse) % Better/ (Worse) (10) (7) (34) 49 (US$m)

3Q13, in addition to interest expense, the definition of Core EBITDA has changed to exclude other

9 Group Financial Highlights YTD13 Core EBITDA improved 49% to US$143m Revenue Core EBITDA* US$m 7,500 7,013 6, US$m , ,500 2,302 2, Q12 3Q13 YTD12 YTD13-3Q12 3Q13 YTD12 YTD13 % Better/ (Worse) % Better/ (Worse) % Better/ (Worse) % Better/ (Worse) (10) (7) (34) 49 (US$m) 3Q12 3Q13 YTD12 YTD13 Liner Logistics Total *With effect from 3Q13, in addition to interest expense, the definition of Core EBITDA has changed to exclude other finance expense and income. Comparative numbers restated accordingly Page 9 30 October Q 2013 Performance Review

10 Group Financial Highlights Net profit of US$20m in 3Q13, US$61m for YTD13 Core EBIT 1 EBIT 2 Net Profit / (Loss) 3 US$m US$m US$m (100) (90) (180) (85) (127) 3Q12 3Q13 YTD12 YTD13 (150) (300) (238) 3Q12 3Q13 YTD12 YTD13 (200) (300) (400) (321) 3Q12 3Q13 YTD12 YTD13 % % % % % % Better/ Better/ Better/ Better/ Better/ Better/ (Worse) (Worse) (Worse) (Worse) (Worse) (Worse) (73) 33 (75) n.m. (60) n.m. With effect from 3Q13, in addition to interest expense, the definition of Core EBIT and EBIT has changed to exclude other finance expense and income. Comparative numbers restated accordingly 1) Core EBIT excludes non-recurring items. 2) EBIT includes non-recurring items. YTD13 includes NOL building sale gain of US$200m 3) 3Q13 and YTD13 includes realised foreign exchange gain of US$34 million arising from repayment of Singapore-dollar loan to the Company by a subsidiary whose functional currency is Singapore dollar Page October Q 2013 Performance Review

11 Financial Highlights by Business Segment Revenue by Business Segments Core EBIT* by Business Segments US$m 8,000 US$m ,120 1, , (25) (100) (175) 3 (168) (130) - 1,961 1,712 5,965 5,407 3Q12 3Q13 YTD12 YTD13 (250) 3Q12 3Q13 YTD12 YTD13 3Q12 3Q13 YTD12 YTD13 Revenue 2,326 2,083 7,085 6,559 Elimination (24) (21) (72) (62) Total Revenue * With effect from 3Q13, in addition to interest t expense, the definition iti of Core EBIT has changed to exclude other finance expense and income. Comparative numbers restated accordingly 2,302 2,062 7,013 6,497 Total (127) (85) Page October Q 2013 Performance Review

12 Group Balance Sheet Highlights US$m 20 Sep Dec 12 (Restated) 1 Total Assets 8,808 8,219 Total Liabilities 6,581 6,026 Total Equity 2,227 2,193 Total Debt 4,521 3,976 Total Cash Net Debt 3,665 3,079 Gearing (Gross) 2.03x 1.81x Gearing (Net) 1.65x 1.40x NAV per share (US$) (S$) s results is restated for comparative purposes due to retrospective application of Amendments to FRS 19: Employee Benefit (Revised), which is effective from financial year Page October Q 2013 Performance Review

13 Group Cash Flow Highlights US$m YTD13 YTD12 Cash & Cash Equivalents Q Cash Inflow / (Outflow) Operating Activities 91 (92) Investing/Capex Activities (695) (562) Financing Activities 563 1,135 Cash & Cash Equivalents Q Page October Q 2013 Performance Review

14 Group Capital Expenditure US$m YTD13 YTD12 1. Vessels Equipment / Facilities Drydock IT Others 4 6 Total 1, Page October Q 2013 Performance Review

15 3. Liner

16 Liner YTD13 Results Highlights Improved results despite difficult market conditions Revenue down 9% or US$558m YoY, mainly from -7% Rev/FEU Positive Core EBITDA of US$89m, up 89% YoY Core EBIT loss narrowed by 23% YoY to US$130m Continued operational & cost efficiencies Cost of sales/feu reduced by 7% YoY Bunker consumption dropped by 15% YoY (326k MT) 14 new ships* replaced 7 older/smaller ships sold/scrapped & 4 charter ships returned Yield & capacity management Fleet capacity increased but capacity management & reconfigured service network better align APL with lower demand levels Headhaul utilisation >90% * Includes 3 x 14,000 TEU new ships chartered out to MOL Page October Q 2013 Performance Review

17 Liner Results Summary US$m 7,500 5,000 2,500-1,961 1,712 Revenue 5,965 5,407 US$m Core EBIT* Core EBIT Core EBIT margin (%) (200) 3Q12 3Q13 YTD12 YTD13 3Q12 3Q13 YTD12 YTD13 % Better/ (Worse) % Better/ (Worse) Core EBIT % Core EBIT % (13) (9) Better/ (Worse) Better/ (Worse) (95) 23 YTD13 Revenue decreased 9% or US$558m YoY, while Core EBIT improved 23% or US$38m YoY due to continued cost & yield focus. Weak demand conditions and industry oversupply dampened Average Revenue per FEU to US$2,355. Cost of sales per FEU was 7% lower YoY due to operational cost efficiencies and lower bunker prices. Bunker prices averaged US$615/MT or 9% lower YoY. * With effect from 3Q13, in addition to interest expense, the definition of Core EBIT has changed to exclude other finance expense and income. Comparative numbers restated accordingly Page October Q 2013 Performance Review (2.8) (168) (2.4) (130) % (2.0) (4.0)

Volume and Average Revenue/FEU Trend Volume ('000 FEUs) US$/FEU 1,500 1,200 2,598 2,615 2601 2,601 3Q Rev/FEU down 9% YoY 2,650 2,539 2,539 900 764 692 699 824 791 720 707 802 772 705 669 2,450 600

18 Volume and Average Revenue/FEU Trend Volume ('000 FEUs) US$/FEU 1,500 1,200 2,598 2, ,601 3Q Rev/FEU down 9% YoY 2,650 2,539 2, , ,420 2, ,342 2,376 2, ,315-1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 2,250 Total Volume (LHS) AverageRevenue/FEU (RHS) Page October Q 2013 Performance Review

19 Operational Update Volume ( 000 FEUs) YTD13 YTD12 % 3Q13 3Q12 % Transpacific (1) (3) Intra-Asia (2) (5) Asia-Europe (12) (11) Latin America (4) (6) Transatlantic (5) Total 2,146 2,218 (3) (5) Average Revenue/FEU (US$) YTD13 YTD12 % 3Q13 3Q12 % Transpacific 3,478 3,748 (7) 3,506 3,763 (7) Intra-Asia 1,412 1,583 (11) 1,348 1,591 (15) Asia-Europe 2,331 2,493 (6) 2,428 2,646 (8) Latin America 3,424 3,520 (3) 3,211 3,568 (10) Transatlantic 2,695 2,855 (6) 2,794 2,780 1 Total 2,355 2,541 (7) 2,372 2,601 (9) Note: Based on point of sailing and inclusive of headhaul and backhaul trade. Page October Q 2013 Performance Review

20 Fleet renewal program on track, 70% of vessels delivered TEUs 180, ,000 8,100 TEU 9,000 TEU 14,000 TEU 14 Total vessels 140, , ,000 6 x 14,000 TEU ,000 All delivered 1 4 x 14,000 TEU 2 60,000 40,000 20, x 9,000 TEU 6 x 9,000 TEU 2 x 8,100 TEU 2013 As at end-ytd Note: 1) The 24 delivered vessels as at end-ytd13 includes 10 x 10,000 TEU vessels delivered in ) 5 out of the 10 x 14,000 TEU vessels for delivery between 2013 and 2014 will be chartered out to MOL Page October Q 2013 Performance Review

21 Operating Fleet* Profile Change Owned capacity increased to 49% APL Fleet Start FY vessels 583,000 TEUs Owned:41% Chartered: 59% Net capacity change +60,000 TEU APL Fleet End 3Q vessels 643,000 TEUs Owned: 49% Chartered: 51% Charters expiring 4Q13 to vessels^ 124,000 TEUs Average size 4,550 TEU Average size 5,300 TEU 1 Jan Sept 2013 Current Future * Excludes APL capacity chartered out ^ Linehaul vessel charters only Note: Operating fleet capacity as at end-3q12 was 593,000 TEU Page October Q 2013 Performance Review

22 Liner Network Capacity & Utilisation Fleet capacity expands but deployed capacity kept level, maintained utilisation >90% Average Capacity (weekly TEUs) Utilisation % 70,000 No YoY increase 130% 60, % 92% 91% 94% 92% 93% 94% 94% 92% 91% 90% 91% 90% 50,000 70% 40,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q % Note: Figures are based on the headhaul leg of main linehaul services The capacity figures takes into account winter program initiations Page October Q 2013 Performance Review

23 Liner business conditions Industry Low growth and volatile freight rate environment Cascading continues to impact all trades Bunker prices remain elevated at around US$600/MT APL Strengthened competitiveness from improved cost structure and operational efficiencies Capacity management, as needed, for low season Page October Q 2013 Performance Review

24 4. Logistics

25 Logistics YTD13 Results Highlights Improved YTD Revenue & Core EBIT Revenue of US$1.2b, +3% YoY Core EBIT of US$45m, +10% YoY Core EBIT margin improved to 3.9% Emerging markets continued to lead performance Emerging markets revenue +17% YYl YoY, led by Asia/Middle East International Services +12% YoY to US$426m on business expansion in consumer and retail segments Contract Logistics -2% YoY to US$726m mainly due to extended plant shutdown in North American auto segment Page October Q 2013 Performance Review

26 Logistics Results Highlights Revenue Core EBIT* US$m 1,250 1,120 1, US$m Core EBIT Core EBIT margin (%) % 6.0 1, Q12 3Q13 YTD12 YTD Q12 YTD12 YTD13 3Q13 - % Better/ (Worse) % Better/ (Worse) 2 3 Core EBIT % Core EBIT % Better/ (Worse) Better/ (Worse) - 10 Logistics achieved revenue of US$1.2b in YTD13, growing 3% year-on-year (YoY), led by emerging markets in Asia/Middle East. International Services achieved revenue of US$426m, a 12% increase YoY Contract Logistics achieved revenue of US$726m, a 2% YoY decrease Core EBIT of US$45m for YTD13, a 10% increase YoY * With effect from 3Q13, in addition to interest expense, the definition of Core EBIT has changed to exclude other finance expense and income. Comparative numbers restated accordingly Page October Q 2013 Performance Review

$106 $719 $741 66% (Americas) 10% (Europe) 10% (Europe) YTD13 Revenue Breakdown by Region

27 APL Logistics Revenue Trend by Region Growth led by Asia/Middle East +17% and Europe +8% 28% (Asia/Middle East) 24% (Asia/Middle East) $319 $273 $114 62% (Americas) $1,152 $1,120 $106 $719 $741 66% (Americas) 10% (Europe) 10% (Europe) YTD13 Revenue Breakdown by Region (US$m) YTD12 Revenue Breakdown by Region (US$m) Page October Q 2013 Performance Review

28 Performance Breakdown YTD13 Core EBIT +10% to US$45m on improved margins % % YTD13 YTD12 Better/ 3Q13 3Q12 Better/ (Worse) (Worse) Revenue (US$m) 1, , Contract Logistics (2) (2) International Services Core EBIT (US$m) Contract Logistics (10) 7 9 (22) International Services Core EBIT Margin (%) Contract Logistics International Services Page October Q 2013 Performance Review

29 Revenue and Core EBIT Margin Trend Weekly Revenue (US$m) 35 Weekly Revenue (US$m) (LHS) Core EBIT Margin (%) (RHS) Core EBIT Margin (%) 15.0% % % 3.8% 48% 4.8% 5.1% 5.2% 3.3% 2.5% 6.0% 3.7% 2.9% 5.1% 5.0% 10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 0.0% Page October Q 2013 Performance Review

30 Logistics business conditions Industry Slower industry growth from weak macroeconomic conditions, principally in developed end markets Domestic consumption continues to expand in emerging markets despite modest demand growth in developed markets Greater adoption of multi-channel retailing provides new supply chain management opportunities in emerging markets APL Logistics Positive contribution from US & China acquisitions Continuing business expansion in emerging markets & US Maintain efficiency and cost discipline focus Page October Q 2013 Performance Review

31 5. Group Outlook

32 Group Outlook General market conditions have not improved in the third quarter, resulting in a muted peak season. Volatile freight rates and over-capacity will continue. In spite of difficult conditions, NOL has delivered better year-to-date performance throughh its focus on operating efficiencies. i i The Group remains on track to deliver a better performance than in Page October Q 2013 Performance Review

33 Appendix

34 Group Financial Highlights US$m YTD13 YTD12 % Better/ (Worse) 3Q13 3Q12 % Better/ (Worse) Revenue 6,497 7,013 (7) 2,062 2,302 (10) Core EBITDA (34) Core EBIT (before NRI) (85) (127) (73) Non-recurring items (NRI) 198 (111) n.m. (2) - n.m. EBIT 113 (238) n.m (75) Net profit/(loss) to owners of the company* Net profit/(loss) to owners of the company (before NRI)* 61 (321) n.m (60) (137) (210) (56) *3Q13 and YTD13 includes realised foreign exchange gain of US$34 million arising i from repayment of Singapore-dollar loan to the Company by a subsidiary whose functional currency is Singapore dollar Note: With effect from 3Q13, in addition to interest expense, the definition of Core EBITDA, Core EBIT and EBIT has changed to exclude other finance expense and income. Comparative numbers restated accordingly Page October Q 2013 Performance Review

35 Financial Highlights by Business Segment Revenue (US$m) YTD13 YTD12 % Better/ (Worse) 3Q13 3Q12 % Better/ (Worse) Liner 5,407 5,965 (9) 1,712 1,961 (13) Logistics 1,152 1, Elimination (62) (72) 14 (21) (24) 13 Total Revenue 6,497 7,013 (7) 2,062 2,302 (10) % Core EBIT* (US$m) YTD13 YTD12 Better/ (Worse) % 3Q13 3Q12 Better/ (Worse) Liner (130) (168) (95) Logistics Total Core EBIT (85) (127) (73) * With effect from 3Q13, in addition to interest expense, the definition of Core EBIT has changed to exclude other finance expense and income. Comparative numbers restated accordingly Page October Q 2013 Performance Review

36 Liner Results Summary US$m YTD13 YTD12 % Better/ (Worse) 3Q13 3Q12 % Better/ (Worse) Revenue 5,407 5,965 (9) 1,712 1,961 (13) Core EBITDA* (40) Core EBIT* (130) (168) (95) EBIT* 40 (277) n.m (98) Core EBIT margin (%) (2.4) (2.8) * With effect from 3Q13, in addition to interest expense, the definition of Core EBITDA, Core EBIT and EBIT has changed to exclude other finance expense and income. Comparative numbers restated accordingly Page October Q 2013 Performance Review

37 Logistics Results Highlights US$m YTD13 YTD12 % Better/ (Worse) 3Q13 3Q12 % Better/ (Worse) Revenue 1,152 1, Core EBITDA* Core EBIT* EBIT* Core EBIT margin (%) * With effect from 3Q13, in addition to interest expense, the definition of Core EBITDA, Core EBIT and EBIT has changed to exclude other finance expense and income. Comparative numbers restated accordingly Page October Q 2013 Performance Review

38 Group Fuel and Currency Exposures Bunker The Group continues to recover part of its fuel price increases from customers through bunker adjustment factors. The Group also maintains a policy of hedging its bunker exposures. Foreign exchange Major foreign currency exposures are in Euro, Singapore Dollar, Canadian Dollar, Japanese Yen and Chinese Renminbi. The Group maintains a policy of hedging its foreign exchange exposures. Page October Q 2013 Performance Review

39 End of Presentation Thank You Neptune Orient Lines Ltd 456 Alexandra Road, NOL Building Singapore Tel: (65) Fax: (65) Company registration number : D Website:

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