Financial News

Hamburg, 28 September 2015

Hapag-Lloyd plans IPO in 2015

Fourth largest container liner shipping company worldwide aims for listing on the regulated market (Prime Standard) of Frankfurt Stock Exchange / Global pure play container line with well-balanced portfolio, modern fleet and strong platform / Core shareholders invest US$100 million / Attractive growth perspectives

Hapag-Lloyd AG, one of the world's leading container liner shipping companies, is preparing its initial public offering ("IPO"). The Company intends to list its shares on the regulated market (Prime Standard) of the Frankfurt Stock Exchange and on the regulated market of the Hamburg Stock Exchange in 2015.

Hapag-Lloyd expects total gross proceeds in the equivalent Euro amount of US$500 million from the IPO. US$400 million will stem from the sale of newly issued shares to institutional and retail investors. In addition the core shareholders Kühne Maritime ("Kühne") and Compañía Sud Americana de Vapores ("CSAV") are participating in the IPO with US$100 million by placing cornerstone orders of US$50 million each. Hapag-Lloyd intends to use the expected US$500 million IPO proceeds for further investments in ships and containers to further strengthen its capital structure, long-term growth and profitability. The offer will also comprise additional shares from TUI and a market standard greenshoe.

"The IPO is an important milestone in the history of Hapag-Lloyd", said Rolf Habben Jansen, Chief Executive Officer of Hapag-Lloyd. "This move will give us better access to the capital markets which will enable us to further invest in our business to become more competitive, which will be good for our customers, our people and our shareholders. We are especially pleased about the investment of our core shareholders which underlines once more their confidence in the future of Hapag-Lloyd."

Fourth largest carrier worldwide

Hapag-Lloyd is a leading container liner shipping company with a truly global footprint. The acquisition of the container liner shipping business of CSAV in 2014 and the successful integration of the business in the first half of 2015 made Hapag-Lloyd the fourth largest player worldwide by capacity. Hapag-Lloyd maintains a well-balanced portfolio of trades distributed among its main markets providing certain resilience to adverse market developments on any single trade lane. The fleet consists of 188 container ships with a total capacity of approximately 1 million TEU. By market share, the Company is among the leaders on the Atlantic and Latin American trades with a recognized presence on the Far-East and Transpacific trades. Its membership in the G6 Alliance, the second largest alliance globally by transport capacity, gives Hapag-Lloyd the necessary scale benefits in a fragmented global shipping market.

Attractive and growing market

The container trade sector is expected to continue growing highly correlated with global GDP growth. Shipping is the backbone of world trade: the estimated share of world trade via sea was 84% in 2014. The global container volume is expected to grow by a compound annual growth rate of 5.5% between 2014 and 2016. The fundamentals around supply and demand are expected to improve in the coming years, which would provide cyclical upside to the industry.

Highly competitive fleet and improvement of operational performance

Hapag-Lloyd operates a modern state-of-the-art fleet. Steady investments in vessels and containers have helped Hapag-Lloyd to build one of the youngest fleets worldwide, resulting in lower fuel consumption and decreasing transportation expenses. Seven new vessels with a capacity of 9,300 TEU each have been delivered between November 2014 and July 2015. Five 10,500 TEU container ships are scheduled for delivery between October 2016 and May 2017. In addition to that, Hapag-Lloyd is active in several profitable niche businesses - i.e. the transport of temperature sensitive goods.

Hapag-Lloyd is committed to operational excellence and continuously works on further strengthening its competitiveness. The Company has a best-in-class IT system which supports the business processes, enables cost control and yield management and facilitates effective network management.

Positive business development and synergies from CSAV

Transport volumes increased to around 3.7 million TEU in the first half of 2015, up 29.4% against the same period in 2014. Revenue increased by EUR 1.5 billion to approximately EUR 4.7 billion. This was mainly due to the contributions of project "CUATRO", the merger with the container business of CSAV. Complementary trades, economies of scale and cost reduction with a larger fleet and reduction of procurement costs make Hapag-Lloyd and CSAV a highly strategic fit. The Company targets annual net synergies of around US$400 million fully realised by 2017. This is US$100 million higher than originally targeted.

In 2014, Hapag-Lloyd also launched the profit improvement project "OCTAVE". This project targets annual cost savings of approximately US$200 million from 2016 onwards and is currently well on track, already delivering tangible results in the first half of 2015.

Both, "CUATRO" and "OCTAVE", already contributed to the profitability of Hapag-Lloyd. In the first half of 2015, Hapag-Lloyd achieved an EBITDA of EUR 493.3 million and an operating result (EBIT) of EUR 267.7 million. The Company recorded a profit of EUR 157.2 million.

Rolf Habben Jansen: "We have good momentum, our results have improved, and we have made up ground versus our competition. We owe this to our committed staff who have done a good job in a difficult environment. Thanks to the dedication of our whole crew we intend to capitalize on opportunities for growth in the sector and make our business model more profitable and resilient."

Dedicated long-term shareholders

A consortium company owned by Compañía Sud Americana de Vapores ("CSAV"), HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH ("HGV") and Kühne Maritime GmbH ("Kühne") holds a 78% majority stake in Hapag-Lloyd. CSAV, HGV and Kühne have agreed by way of a shareholders' agreement to hold a stake of at least 51% for 10 years, not sell any shares in the IPO and to pool their voting rights on all decisions relating to the Company's business, as they are supporting Hapag-Lloyd long-term. TUI AG holds a 14% share in Hapag-Lloyd through TUI-Hapag Beteiligungs GmbH and intends to sell shares in the IPO.

Berenberg, Deutsche Bank and Goldman Sachs International will act as Joint Global Coordinators and Joint Bookrunners. Citigroup, Credit Suisse, HSBC and UniCredit have been mandated as additional Joint Bookrunners. DZ BANK, ING and M.M. Warburg & CO will act as Co-Lead Managers.

About Hapag-Lloyd

With a fleet of 188 modern container ships, Hapag-Lloyd is one of the world's leading container liner shipping companies. The Company has approx. 10,000 employees at 349 sites in 116 countries. Since the merger with CSAV's container business in December 2014, the Hapag-Lloyd fleet has offered a total transport capacity of around one million standard containers (TEU) as well as a container fleet of 1.6 million TEU - including one of the world's largest and state-of-the-art reefer fleets. 128 liner services worldwide ensure fast, reliable connections between all the continents. Hapag-Lloyd is a founding member of the G6 Alliance, one of the largest shipping alliances worldwide. Hapag-Lloyd is one of the leading operators in the Atlantic and Latin America trades.

ANNEX: FURTHER INFORMATION ABOUT HAPAG-LLOYD AG

Hapag-Lloyd is a leading global container liner shipping company. Measured by the capacity of its fleet, Hapag-Lloyd is the largest container liner shipping company based in Germany and one of the largest in the world (source: MDS Transmodal, July 2015). Hapag-Lloyd offers its customers a comprehensive range of services through an extensive network with 128 liner services worldwide, combined with the support of strong local presences with around 349 sales offices (including agents) in 116 countries. Hapag-Lloyd offers both complete worldwide door-to-door container shipment services and port-to-port services, as well as a variety of possible combinations which are tailored to meet its customers' transport service requirements.

Hapag-Lloyd maintains a well-balanced portfolio of trades distributed among its main markets. The Company has a strong presence in the high-volume Far East trade (Europe-Asia) as well as the Atlantic (Europe-North America) and Transpacific (Asia-North America) trades. With the acquisition of the container liner shipping activities of CSAV in December 2014, Hapag-Lloyd has especially strengthened its market position in the Latin America trade and in the Atlantic trade, where it intends to seize opportunities for further profitable growth. The acquisition not only significantly enhanced Hapag-Lloyd's global reach and the network the Company is able to offer to its customers, but also enables it to harness extensive synergies. In addition, the Europe-Mediterranean-African-Oceania trade as well as the Intra-Asia trade contribute to Hapag-Lloyd's overall transport volume.

Hapag-Lloyd's extended service network ensures that it is well positioned to benefit from an increase in trade flows around the globe. Hapag-Lloyd has a strong position both in the high-volume East-West trade, which accounted for approximately 56% of its total transport volume in the six months ended June 30, 2015, as well as in the North-South trades, which accounted for approximately 44% of its total transport volume in the six months ended June 30, 2015. In the financial year 2014 and in the six months ended June 30, 2015, these trades contributed to Hapag-Lloyd's total transport volumes as follows: Latin America (19.6% and 30.9%, respectively), Atlantic (24.5% and 20.8%, respectively), Far East (19.2% and 17.7%, respectively), Transpacific (22.3% and 18.3%, respectively), Intra-Asia (8.3% and 7.5%, respectively) and EMAO (6.1% and 4.9%, respectively).

Hapag-Lloyd's fleet is one of the largest container ship fleets globally (source: MDS Transmodal, July 2015). As of June 30, 2015, the Company had a fleet of 188 container ships with a total transport capacity of 989,177 TEU, of which it owned 66, chartered 117 and finance leased five container ships. Of the 188 container vessels, the Company has chartered out two ships with a capacity of 8,400 TEU and 3,426 TEU, respectively. As of June 30, 2015, Hapag-Lloyd managed a fleet of 1,000,415 containers with a total transport capacity of 1,607,197 TEU, approximately 35% of which it owned with the remainder being leased or rented. As of June 30, 2015, Hapag-Lloyd's order book comprised five new vessels each with a capacity of 10,500 TEU scheduled for delivery between October 2016 and May 2017 as well as one vessel ordered by CSAV with a capacity of 9,300 TEU, which was delivered in July 2015. Following the Offering, the Company considers to order six ultra-large container vessels. In addition, it invested in 27,400 containers as of June 30, 2015. As a result of these investments, the Company's ownership ratio in vessels and containers is expected to increase.

Hapag-Lloyd is one of the founding members of the G6 Alliance (whose other members are American President Lines Ltd. (APL), Hyundai Merchant Marine Co., Ltd. (HMM), Mitsui O.S.K. Lines (MOL), Nippon Yusen Kaisha Lines (NYK) and Orient Overseas Container Line Limited (OOCL)), one of the world's largest operating container liner shipping alliances with a total combined capacity of approximately 3.6 million TEU, representing a 17.8% share of the global transport capacity as of June 30, 2015 (source: MDS Transmodal, July 2015). In addition, Hapag-Lloyd maintains cooperation arrangements with other carriers. Furthermore, Hapag-Lloyd is one of the founding members of the Grand Alliance, which also includes OOCL and NYK, of which the majority of services were merged with those of the New World Alliance to form the G6 Alliance. Such arrangements allow it to optimize fleet utilization by sharing capacity and to provide a range and geographic scope of network services that would not be possible if Hapag-Lloyd relied solely on its own fleet of vessels. Hapag-Lloyd's ability to coordinate its route planning with its partners enables it to use capacity more efficiently and benefit from cost savings and lower capital expenditures. For the six months ended June 30, 2015, approximately 50% of Hapag-Lloyd's total transport volume was carried on either its owned or chartered vessels contributed to the G6 Alliance and the Grand Alliance, or vessels made available to Hapag-Lloyd through the G6 Alliance and Grand Alliance. In addition, the Company has entered into a cooperation arrangement with CMA CGM, Hamburg Süd and other shipping companies, offering new products between Asia and the Western and Eastern coasts of Latin America. This reflects its ongoing efforts to further strengthen its global coverage of trades, expand its product offering (e.g., reefer products) between Asia and the West and the East coast of Latin America and enhance Hapag-Lloyd's cost and operational efficiency.

Hapag-Lloyd has entered into contractual arrangements to use terminal facilities in each of the ports called by its fleet and has strategic shareholdings in a container terminal in Hamburg, Germany. The Company currently owns a 25.1% interest in HHLA Container Terminal Altenwerder GmbH in the Port of Hamburg, one of the most modern container terminal facilities in the world (source: HHLA Hamburger Hafen und Logistik AG, June, 2015).

Hapag-Lloyd is headquartered in Hamburg, Germany. As of June 30, 2015, it had 9,958 full-time equivalent employees worldwide. In the financial year 2014 and in the six months ended June 30, 2015, Hapag-Lloyd generated revenue of EUR 6,807.5 million and EUR 4,669.0 million, respectively, and EBITDA of EUR 98.9 million (including significant transaction and restructuring costs as well as one-off costs) and EUR 493.3 million, respectively.

HAPAG-LLOYD'S MAIN COMPETITIVE STRENGTHS ARE:

One of the market leaders with a strong global footprint and exposure to attractive niche businesses.

Demand for container liner shipping services has been, and will continue to be, positively correlated to the performance of the global economy and the development of global trade volumes. According to the IMF, July 2015, the volume of global trade, which is key to the demand for container liner shipping services, is forecast to increase by 4.1% in 2015 and growth of global trade is expected to accelerate to 4.4% in 2016 as economic growth in industrialized countries such as the USA and Japan and the industrialized Euro-zone is predicted to strengthen. With the world trading volume forecast to grow, demand for container liner shipping services is likewise expected to continue its growth trend. According to Clarkson (2Q 2015), the global container liner shipping volume has increased from 139.2 million TEU in 2010 to 171.2 million TEU in 2014 and is expected to reach approximately 179.8 million TEU in 2015. This would put the forecasted rise in worldwide transport volumes in container liner shipping for 2015 and 2016 above the forecasted rate of growth for global GDP growth. As a result, container liner shipping will continue to be a growth industry in the medium to long term. Over the last 14 years Hapag-Lloyd has more than doubled its share of global transport capacity in the container liner sector from 2.0% in 2000 to 4.8% as of June 30, 2015 (source: MDS Transmodal Feb. 2001 and July 2015). Hapag-Lloyd achieved this by expanding its service network and through successfully integrating the CCS Activities in 2014 and the CP Ships Ltd. acquisition in 2005. As one of the largest container liner shipping companies worldwide with an extensive network comprising 128 services worldwide, Hapag-Lloyd expects to benefit strongly from the predicted growth trend.

Hapag-Lloyd possesses a competitive position, evidenced by its market shares of approximately 15.5%, 23.1%, 6.4% and 4.9% on the Latin America, Atlantic, Trans-Pacific and Far East trades, respectively (these market shares are estimates based on TEU Hapag-Lloyd transported for its customers on each of the trades and container liner shipping transport volume data from CTS, July 2015). Based on weekly capacity employed, Alphaliner estimates Hapag-Lloyd's market share to be 28.1%, 5.2% and 4.3% on the Atlantic, Trans-Pacific and Far East trades, respectively (source: Monthly Monitor, August 2015). In particular, Hapag-Lloyd believes that it is well positioned to benefit from growth trends in the attractive niche businesses such as reefer, project cargo and dangerous goods businesses, where Hapag-Lloyd has a long-standing and well-recognized expertise. With its fleet of state-of-the-art reefers with a capacity of 141,600 TEU, to transport temperature-sensitive cargo such as fruit, vegetables, meat and fish as well as high value reefer cargo such as pharmaceuticals and healthcare products, Hapag-Lloyd possesses one of the largest reefer container fleets in the industry (source: Dynamar Reefer Report 2014). Hapag-Lloyd already owns 42% of its reefer fleet and has ordered additional reefer containers with a total capacity of 12,000 TEU in July 2015. Hapag-Lloyd's position in the reefer business will be further strengthened by the new 9,300 TEU vessels which it received over the past months as well as the new orders for five 10,500 TEU vessels that Hapag-Lloyd recently placed. Both vessel types possess a large number of reefer plugs (1,400 reefer plugs per vessel and 2,100 reefer plugs per vessel, respectively), enhancing Hapag-Lloyd's carriage capacities for temperature sensitive cargo.

In addition to its expertise in the reefer business, Hapag-Lloyd has a dedicated department for the organization and monitoring of oversized cargo with many years of expertise in handling the transport of out of gauge, Break-Bulk and project cargo, offering one-stop-shop service to its customers. Hapag-Lloyd's fleet of special containers allows for the carriage of oversized and especially heavy goods, catering to all kinds of cargo, even high value and sensitive cargo. In addition, Hapag-Lloyd is constantly developing and constructing its own Hapag-Lloyd equipment capabilities in the fields of security and stability. In the dangerous cargo business, Hapag-Lloyd believes to have a competitive edge, which is strongly supported by its dangerous goods department and dangerous goods experts located in all of its regional headquarters (Hamburg, Singapore, Piscataway and Valparaíso). Furthermore, its efficient specialist software ("Watchdog") enables Hapag-Lloyd to continuously and systematically scan all the bookings placed globally, using intelligently linked criteria, to identify dangerous goods which have been declared incorrectly or which have not been declared at all. These factors underscore Hapag-Lloyd's expertise and experience in the dangerous cargo business, which enables it to capitalize on the transportation of sensitive goods, whose transportation may not be open to other carriers due to strict certification requirements.

Furthermore, Hapag-Lloyd is actively exploring further value adding market niches - Hapag-Lloyd is one of only three carriers worldwide being certified to carry U.S. governmental cargo with five of its vessels sailing under U.S. flag. In addition, Hapag-Lloyd has a strong position in the flag-protected cabotage services on the trade routes Chile-Brazil, intra-Chile and intra-Peru, which represent attractive niche businesses as due to flag restrictions, other carriers are not able to offer these services.

Hapag-Lloyd believes that these businesses combined with its specialist knowledge and expertise position it well to exploit opportunities for further growth.

Well-balanced route mix and exposure to attractive markets strongly supported by Hapag-Lloyd's membership in the G6 Alliance and through several cooperation agreements.

As of June 30, 2015, Hapag-Lloyd had 128 liner services, linking 204 ports in 116 countries, which is supported by its cooperation within the G6 Alliance and arrangements with several other carriers. As a result, Hapag-Lloyd maintains a portfolio of trades (a trade combines liner services between two land masses) which Hapag-Lloyd believes to be more balanced than that of any other liner, covering all major markets and regions. Hapag-Lloyd is one of the few leading carriers with an almost equal exposure both to the high-volume East-West trades as well to the attractive North-South trades (source: Clarkson Research, Container Intelligence Quarterly, 2Q 2015). Each of the Latin-America, Atlantic, Far-East and Transpacific contributed 30.9%, 20.8%, 17.6%, and 18.3%, respectively, to Hapag-Lloyd's total container liner shipping transport volume of 3,719 TEU in the six months ended June 30, 2015. In addition, the Intra-Asia and the EMAO (Europe-Mediterranean-Africa-Oceania) trades made a substantial contribution of 7.5% and 4.9%, respectively, to its overall transport volume in the six months ended June 30, 2015. With the acquisition of the CCS Activities in December 2014, Hapag-Lloyd has strengthened its market position especially in the attractive North and South America trades. Together with its G6 partners as well as with its other cooperation partners Hapag-Lloyd is joint market leader in terms of capacity in two of the three East-West trades (Atlantic and the Transpacific trades) as well as by volume in the Latin-America trade (source: Alphaliner Monthly Monitor, August 2015; CTS July 2015). Hapag-Lloyd's enhanced service network ensures that it is well positioned to benefit from an increase in trade flows around the globe while its balanced trade lane portfolio enables Hapag-Lloyd to be more resilient to adverse market developments on any one trade lane.

In addition, through its membership in the G6 Alliance and several cooperation agreements Hapag-Lloyd shares capacity with other carriers on the major East-West trades as well as the North-South trades which enable it to maintain favorable utilization rates of its vessel and container fleet, consistently extend the range as well as the geographic scope of its services, and offer its customers improved services, shorter transit times, more frequent sailings and more direct port calls which will further benefit Hapag-Lloyd's perception and position in the market. Hapag-Lloyd's ability to coordinate its services with other alliance members also allows it to use capacity more efficiently, entailing cost savings and lower capital expenditures. In addition, Hapag-Lloyd's use of cooperation arrangements facilitates its entrance into new markets by lowering entry costs through, for example, allowing it to use its partners' vessels. Together with its G6 partners Hapag-Lloyd is a joint market leader in terms of capacity provided both on the Transpacific trade as well as on the Atlantic trade according to MDS Transmodal (July 2015).

Competitive and modern fleet with a balanced ownership structure providing operational flexibility through the cycle.

The composition of Hapag-Lloyd's fleet provides it with a significant degree of flexibility in its operations. Hapag-Lloyd is able to swiftly deploy its vessels on its different trade lanes and actively manage and control the optimal use of the vessels depending on the respective demand and slot allocation. As of June 30, 2015, Hapag-Lloyd's fleet comprises 188 container vessels (including two vessels which Hapag-Lloyd has chartered out), of which Hapag-Lloyd owned 66, chartered 117 and finance leased five. In line with its market position on high-volume trades, approximately 53% of Hapag-Lloyd's capacity consists of vessels with a capacity in excess of 6,000 TEU while approximately 44% of its total fleet has a capacity in excess of 8,000 TEU as of June 30, 2015. Hapag-Lloyd focuses on owning larger vessels, resulting in the average size of its entire vessel fleet being approximately 5,262 TEU compared to an industry average of 3,199 TEU and an average among the top 20 carriers of 4,876 TEU (source: MDS Transmodal, July, 2015). As of June 30, 2015, the average age of Hapag-Lloyd's fleet is 7.3 years, of which 73% comprises vessels less than ten years of age, compared to an industry average of 8.4 years (source: MDS Transmodal, July 2015). All of its latest newbuilt vessels as well as the vessels on order are equipped with an increased number of reefer slots to take advantage of the increasing demand, for example, for the transport of foodstuff especially on the North-South trade. Foodstuff represented about 13% and 15% of its transport volume in 2014 and in the six months ended June 30, 2015, respectively. All of its latest newbuilt vessels and the vessels on order are also designed with a wide-beam vessel shape which allows the use of harbors with shallow waters and, therefore, enables flexible deployments on various services. Together with its G6 partners and its other cooperation partners, Hapag-Lloyd is able to allocate ships to services which best fit the specific needs of each service.

Overall, the larger size vessels and the homogenous structure within the different classes of Hapag-Lloyd's fleet in terms of design and furnishings provide benefits, such as lower operating and voyage unit costs, fuel, port and canal fees as well as manning, repairs, insurance and ship management costs. For the six months ended June 30, 2015, Hapag-Lloyd reduced its cost base by approximately US$233 per TEU (17%) from US$1,372 per TEU in the six months ended June 30, 2014. Hapag-Lloyd also maintains a high degree of flexibility in its fleet to meet changing market demand by using a combination of short-term, mid-term and long-term vessel charters along with its owned and leased vessels. Short-term charters, mid-term charters and long-term charters are for a period of up to 12 months, up to 36 months and more than 36 months, respectively. Short-term and mid-term charters allow it to adjust its capacity and cost structure rapidly in response to changes in demand. In addition to Hapag-Lloyd's vessel fleet, its stock of a wide variety of containers, which enables it to cater towards its customers' needs and specifications, complements its flexible and competitive fleet structure.

Highly diversified and solid customer base with long-term and close customer relationships based on operational excellence and technological know-how that allows for better imbalance management.

Hapag-Lloyd has a track record of long-term and close relationships with a broad range of blue-chip customers. Its top customers include direct shippers, such as IKEA, ExxonMobil, General Motors, BASF, Ford and freight forwarders, such as Kühne+Nagel, DB Schenker, DHL, Panalpina and JF Hillebrand. Moreover, Hapag-Lloyd has been successful in acquiring and retaining key account customers. For example, 17 of its top 20 customers by volume in 2012 continued to count among its top 20 customers by volume through the six months ended June 30, 2015. Hapag-Lloyd believes that its close relationship with large direct customers gives it better visibility on future container liner shipping transport volumes while its relationships with large freight forwarders, which originate cargo in many locations worldwide, help Hapag-Lloyd to optimize its trade flows. Moreover, after gaining access to additional customers in the Latin American region through the Business Combination, Hapag-Lloyd further enhanced its geographical and customer diversification. In the six months ended June 30, 2015 Hapag-Lloyd provided its services to approximately 20,000 customers, diverse in both geography and industry, with no single customer representing more than 5% of its total transport volume. Hapag-Lloyd believes that its long-term and close customer relationships is supported by its industry-leading container liner shipping information management system. Hapag-Lloyd has developed and are continuously enhancing a globally integrated and self-developed IT system to support its business and operating processes. This allows the Company to maintain its high levels of efficiency and productivity throughout its global operations by reducing costs and increasing the speed, quality and reliability of operational information. Hapag-Lloyd's IT systems are highly scalable and a key enabler of its inorganic growth strategy, allowing it to efficiently integrate acquired operations. Hapag-Lloyd's operational excellence is linked to the quality of its system, including web-based graphical user interfaces, which has been in operation and running reliably for nearly 20 years. Hapag-Lloyd has also implemented a standardized organizational model that Hapag-Lloyd uses in its operations worldwide called Blueprint Organization and a "one-file-per-shipment" data structure throughout its operations and IT system architecture. Hapag-Lloyd's IT system runs on a standardized platform that links all of its regional headquarters, areas and offices. Hapag-Lloyd believes that the combination of its integrated IT system with Blueprint is an industry-leading innovation, which cannot be easily reproduced by its competitors. This system enables decentralized decision-making within Hapag-Lloyd's global network and provides it with significant advantages over its competitors as Hapag-Lloyd can continuously monitor and improve its productivity by comparing and benchmarking processes throughout the organization. In particular, its self-developed freight information system provides it with real-time information allowing it to assess at the point of sale the contribution levels that may be achieved by an individual transaction, after taking into account costs, such as the cost of associated relocations of empty containers and inland transportation costs.

In particular, Hapag-Lloyd's system particularly enables it to better manage structural imbalances in the container liner shipping business by optimizing container shipments, when compared to the market (source: Drewry Maritime Research, 2Q 2015, company information). Through its yield management, Hapag-Lloyd achieves a significantly higher share of full container moves on the non-dominant leg of a trade route compared to the overall industry, resulting in fewer empty containers requiring repositioning and thereby considerably reducing its repositioning costs. During 2014, for every ten full containers Hapag-Lloyd carried on the dominant legs of the Trans-Pacific, Atlantic and Far East-Europe trades, Hapag-Lloyd carried approximately 5.0, 7.4 and 5.9 full containers on the non-dominant legs of these trades, respectively, comparatively higher than the industry average of 4.4, 7.3 and 4.5 full containers, respectively (source: Drewry Maritime Research, 2Q 2015 (Hapag-Lloyd data adapted to Drewry trade definition)). This results in fewer empty containers requiring repositioning and considerably reduces Hapag-Lloyd's repositioning costs.

Proven track record on integration and well positioned to actively participate in consolidation trends in Hapag-Lloyd's industry.

One of Hapag-Lloyd's key strategies is to actively participate in the consolidation within the container liner shipping industry. Its operational structure is set up to efficiently pursue strategic acquisitions or further business combinations in a consolidation driven market environment. The integration of the CCS Activities proved that Hapag-Lloyd is capable and well experienced in executing a successful integration process and realizing the expected synergies and know-how gained through the successful integration of acquired businesses is firmly anchored in its organization. Through the Business Combination, Hapag-Lloyd became one of the largest container liner shipping companies globally. The scalability of its platform enables it to explore the possibility of opportunistic and accretive acquisitions to achieve further growth of its volumes and inorganic growth exceeding the industry growth rate. This is also supported by Hapag-Lloyd's uniform and scalable IT systems, which are globally integrated standardized systems that can be quickly enhanced to further users and locations.

Experienced management team and supportive anchor shareholders.

Hapag-Lloyd has a strong and experienced senior management team, which is comprised of its management board members and the heads of its regions (North America, South America, Europe and Asia) and central functions (global sales, trade management, network and operations) dedicated to further strengthening Hapag-Lloyd's competitive position as a leading container liner shipping group. On average, each senior management team member has 20 years of experience at Hapag-Lloyd and 50% of its senior management have an international background. Hapag-Lloyd believes the experience of its management team gives it a competitive advantage and positions it favorably for future growth and profitability: Over the last 14 years Hapag-Lloyd has more than doubled its share of global transport capacity in the container liner sector from 2.0% in 2000 to approximately 5% as of June 30, 2015 (source: MDS Transmodal, July 2001 and July 2015). This was achieved by expanding the service network as well as by the successful integration of the CCS Activities in 2014 and the Canadian container liner shipping company CP Ships Ltd. in 2005. Furthermore, its management team has continuously reduced transport expenses in recent years. From 2012 to 2014, Hapag-Lloyd's transport expenses per TEU were reduced by US$150 (10%). In the first six months ended June 30, 2015, transport expenses per TEU were reduced by a further US$224 per TEU to US$1,139 compared to the corresponding period in the previous year. In 2014, Hapag-Lloyd incorporated certain structural improvements, allowing for a closer steering of the business on management board level as the four regions now directly report to the CEO. Furthermore, steering of the business is based on a common set of core reports and key performance indicators, implementing a strong performance driven culture with regular performance dialogues passed down through the organization. Productivity measured in terms of TEU/FTE increased from 889 TEU/FTE in 2010 to 1,092 TEU/FTE in 2014.

In addition, Hapag-Lloyd has highly committed principal shareholders including the three anchor shareholders CSAV (34%), HGV (23%) and Kühne (21%). Due to their commitment to pool a large part of their voting rights for ten years, Hapag-Lloyd believes that Hapag-Lloyd is in a favorable position to focus on the mid to long term strategic development of the Company. In addition, the core shareholders Kühne and CSAV are participating in the IPO with US$100 million by placing two cornerstone orders of US$50 million each.

OVERVIEW OF HAPAG-LLOYD'S STRATEGY

Further encourage growth by capitalizing on dynamic growth trends in Hapag-Lloyd's industry and through acquisitions.

In order to continue achieving sustainable and profitable growth, Hapag-Lloyd pursues internal and external growth opportunities. According to Clarkson Research (July 2015), world container traffic will increase by 5.1% in 2015, indicating that world container traffic is expected to grow 1.0 percentage points stronger than global GDP growth in 2014 (source: IMF, July 2015). For 2015, the IMF expects global GDP to increase by 3.3%. Pursuing its sustainable and competitive business model, Hapag-Lloyd plans to pursue an internal growth strategy in which its container liner shipping transport volumes increase in line with industry growth. Hapag-Lloyd intends to achieve this goal by making further inroads into its existing customer base through its strong sales organization, its global account management team and its customer-oriented services. This includes defining coverage of top accounts and improving Hapag-Lloyd sales channel strategy for each market. Hapag-Lloyd is planning to capitalize on its market positions especially as a joint market leader in terms of capacity in the Atlantic, the Transpacific as well the North-South trades, in the individual trade lanes and to respond to their respective dynamics accordingly. Hapag-Lloyd's flexible network management enables it to continue to adapt to evolving customer needs. Hapag-Lloyd also plans to optimize its pricing strategy by improving its customer discount policy and, among other measures, managing the balance between the spot and contract business. Hapag-Lloyd will also focus on yield management for the near term, including the further development of its yield management team and the further advances to the proactive pricing and steering function. Hapag-Lloyd offers an attractive global service network combined with exceptional service quality and are looking to expand in the special cargo business, for example over seized cargo, and reefer transports. With its latest deliveries of seven 9,300 TEU vessels and the existing order book of five vessels, each with a capacity of 10,500 TEU Hapag-Lloyd will expand its reefer slot capacity by almost 21,000 slots by mid-2017. In addition, Hapag-Lloyd intends to continue pursuing external growth through selected add-on acquisitions if the right project is available and would be value enhancing.

Deliver significant synergies from the Business Combination.

Following the completion of the Business Combination, Hapag-Lloyd initiated its project called "CUATRO" to facilitate the integration of the CCS Activities which is targeted to deliver significant net synergies of approximately US$400 million per year from 2017 onwards, when compared with the cost base of 2014. Through Project CUATRO Hapag-Lloyd aims to achieve operational synergies, in particular in the areas of network, personnel, equipment, land operation, overhead and revenue. As the Group has access to a larger pool of vessels, the deployment of vessels can be further improved resulting in lower slot costs on the basis of a larger fleet and through economies of scale by bundling volumes on fewer and more profitable services. With the combination of the Hapag-Lloyd and the CCS networks Hapag-Lloyd expects a significant synergy potential through the combination and potential upgrade of services, the termination of slot charter agreements and changes in port rotation. Hapag-Lloyd has selected and grouped comparable services along major trade lanes, which will reduce its total ship system and cargo-related costs. In addition, combining the headquarter offices and functions in the areas and regions of the combined container liner shipping operations is a further focus of the integration process to realize the targeted synergies. Therefore, a new organization structure has been implemented in the first half of the year 2015 by combining the two corporate headquarters in Hamburg and Chile to one in Hamburg and nine regional headquarter locations to four locations as well as by the consolidation of shared service centers. Office locations have been reviewed and selected in order to combine the office functions, and, thus, reduce costs. Furthermore, Hapag-Lloyd believes to achieve overhead synergies by improving its productivity through a higher organizational efficiency and a reduction of other overhead costs (i.e., rents, service providers, insurances) in combination with a reduction of personnel in the areas and regional headquarters. Moreover, Hapag-Lloyd intends to optimize its network of third-party agents by tendering and bundling transport volumes to the respective third-party agents. Hapag-Lloyd has identified ports, in particular in South America, where Hapag-Lloyd expects to achieve terminal synergies through matching of more beneficial contracts and economies of scale effects with terminal operators. In addition, Hapag-Lloyd plans to realize synergies within its inland business by re-negotiating vendor contracts as well as bundling transport volumes and optimizing logistics and operational processes. By combining the partly complementary trade flows of Hapag-Lloyd and the CCS Activities at certain defined locations and container types, Hapag-Lloyd also expects equipment synergies as a result of reduced imbalances thereby reducing empty container repositioning. Furthermore, CCS container leasing contracts were renegotiated to reduce container-per-diem costs. In particular in South America Hapag-Lloyd aims to achieve revenue synergies through the introduction of a revised tariff scheme for demurrage and detention collection for the combined container liner shipping operations. In addition, local charges within the individual areas are planned to be aligned to carry over more beneficial conditions.

Continuously implement efficiency and cost improvement measures to enhance overall profitability.

Hapag-Lloyd strives to enhance overall profitability by constantly focusing on improving its cost efficiency and revenue quality across all areas of operations. In 2014, Hapag-Lloyd introduced its cost and efficiency project called "OCTAVE" targeting short-term operational initiatives with immediate effects in the areas of: (i) inland cost and bunker procurement; (ii) its fleet and network; and (iii) its sales and product portfolio. Through these initiatives, Hapag-Lloyd expects to reap substantial revenue improvements and cost savings of approximately US$200 million a year from 2016 onwards. In 2015, Hapag-Lloyd expects to be able to achieve cost savings of approximately US$175 million, when compared with the cost base of 2014, as approximately 80% of the saving measures have already been implemented.

To achieve these objectives, eight workstreams from different operational fields with clear module head responsibility and a comprehensive reporting structure to monitor program development have been set up. Hapag-Lloyd's inland cost initiative targets at its inland full cargo and empty container flows, particular in the Region North America with the separation of the workstream into a commercial and an operational sub-module. In a commercial sub-module Hapag-Lloyd has identified ten locations with high container surpluses (blackspots) in order to actively manage volumes into these locations as well as to introduce dedicated export initiatives from these locations resulting in reduced empty container repositioning. Furthermore, a conscious pricing approach is now applied into these highly imbalanced hinterland locations to cover for incremental evacuation cost. The operational sub-module comprises a number of operational measures that have been implemented with the focus to further manage Hapag-Lloyd's empty costs regarding repositioning and depot storage. Hapag-Lloyd is improving its bunker procurement through a variety of measures, primarily enabling its vessels the bunkering at low-cost Russian ports. Hapag-Lloyd aims to achieve this by conducting ad-hoc calls in Russian bunker ports (with vessels rotating in/out of service, e.g. charter vessels on their repositioning voyage) and by structurally changing services to include this additional bunker call in order to benefit from more favorable bunker prices. Hapag-Lloyd is also including the testing of additives and high viscosity fuel. Furthermore, Hapag-Lloyd is optimizing its fleet and network through improvements, such as fleet renewal, fleet refurbishment and adjustments to its general service structure. In the fleet renewal area, Hapag-Lloyd has decommissioned, by scrapping or selling, 16 vessels ("Old Ladies") in the first half of 2015, which are largely replaced by cheaper and more efficient timecharter vessels. In the fleet refurbishment area, Hapag-Lloyd is enhancing its operational hull profile of ten 13,200 TEU and fourteen 8,750 TEU class vessels to operate under optimal conditions through the retro-fitting of its ships' bulbous noses and propellers in order to reduce bunker consumption. In addition, Hapag-Lloyd has implemented key improvement levers in its general G6 Alliance service structure, particularly on the Atlantic and Transpacific trade. These include primarily the shift of the obtained capacities from the G6 pool for a number of services, better matching its available allocations with its existing demand per service. Furthermore, selected G6 services are operationally optimized e.g. through the deployment of larger vessels at reduced slot cost.

In addition, Hapag-Lloyd has introduced a new Atlantic service to meet the demand from the strongly growing European export market. Its sales and product portfolio improvements aim at Hapag-Lloyd's utilization, special cargo and spot market areas. Hapag-Lloyd intends to increase utilization through an improved communication process between ship planners and trade slotcontrollers closely exchanging on available open space and cargo mix of laden boxes in time before vessel departure. On selected services the operational capacity has been re-declared based on ship planners' experience and is now used within the steering process and allocation management of the trade slotcontrollers. Hapag-Lloyd is strengthening its special cargo business through the renewal of its special equipment (e.g., flat racks, open tops, hard tops) as well as through an increase in volumes due to a higher container productivity resulting in increased market-share. In the spot market, Hapag-Lloyd intends to explore spot market opportunities in the Far East trade to reduce dependency and improve its cargo mix. To achieve this objective, Hapag-Lloyd intends to extend its scope of services and focus on FAK (freight all kind) customers which yield higher contributions per TEU.

Further exploit the benefits from Hapag-Lloyd's global alliances and cooperations.

Hapag-Lloyd plans to continue to focus on joint operations to strengthen its overall position. With Hapag-Lloyd AG as a founding member of the G6 Alliance and the Grand Alliance, Hapag-Lloyd is strongly positioned in the container liner shipping market. Through the joint operation of services, Hapag-Lloyd focuses on further providing a significantly larger network to its customers than as a single carrier. Hapag-Lloyd operates the major East-West trades as part of its participation in the G6 Alliance and the Grand Alliance and seek to remain among the market leaders on these trades. Hapag-Lloyd increased its coverage of the major North-South trades through the Business Combination and thus believes that it is well-positioned to further provide a comprehensive global offering of trades. This is supplemented by Hapag-Lloyd's cooperation with CMA CGM, Hamburg Süd and other shipping companies, offering new products (e.g., reefer products) between Asia and the West and the East coast of Latin America, benefitting from an extensive port coverage with short transit times to and from main Asian locations.

In addition, Hapag-Lloyd plans to continue to benefit from several cost efficiencies, such as an increased average vessels size, a better use of its capacity and vessels due to the more efficient vessel deployment and improved utilization as well as capacity absorption for the market. Together with its cooperation and alliances partners, Hapag-Lloyd will continue to improve and enhance the value gained from cooperation. If needed to strengthen and sustain its competitive position and in pursuit of its goal to become the best in class in its industry in terms of efficiency, Hapag-Lloyd is determined to invest in appropriate vessel capacity or update the technology of the existing vessels to further optimize its cost structure.

Leverage its market position and Hapag-Lloyd's strong reputation for quality, reliability and seamless execution to increase revenue and improve the quality of revenues.

Hapag-Lloyd strives to maintain its reputation for quality, reliability and the seamless execution of its services. Based on the segmentation of its customers according to volume and profitability criteria, Hapag-Lloyd plans to increase its sales efficiency by increasing the share of its customers that score best under segmentation criteria and by further improving its tender management. Hapag-Lloyd further intends to maintain a balanced customer mix of freight forwarders, who handle cargo globally and in all directions, and industrial and trade customers to maintain visibility on future container liner shipping transport volumes and to optimize overall equipment steering. Hapag-Lloyd also plans to capitalize on its strong brand and reputation and successful execution of bilateral Electronic Data Interchange solutions, which entails the transfer of structured data from one software application to another. By increasing the share of its customers that use bilateral EDI solutions, Hapag-Lloyd strengthens its customer relationships and protect future volume growth potential.

In March 2015, Hapag-Lloyd has launched the development of a comprehensive program called "Compete to Win" in order to enhance its commercial capabilities across its worldwide sales and customer service organization, which is aimed at improving Hapag-Lloyd's revenue quality and profitability. This initiative covers the sales planning and opportunity identification, pricing and yield management, sales execution and sales organization and aims at integrating sales and trade management, ensuring better access to information and a structured preparation process for Hapag-Lloyd's sales staff, improving the commercial planning and steering of the business and embedding a performance driven culture. Hapag-Lloyd has completed a comprehensive fact finding analysis in these areas in three regions (Asia, America and Europe) during the first half of 2015. A new sales planning and performance management tool has been developed and has been rolled out in September 2015. The first sales process in test markets in Asia shows improved quality of customer contacts resulting in improved revenue quality. The new sales approach aims to increase the share of higher contributing cargo on a customer per customer basis. The overall program design and testing will be completed by December 2015 and full global roll out is planned for January 2016. In addition, Hapag-Lloyd has optimized its commercial planning and steering tools and processes at trade, region and area level to become more agile and effective in its sales efforts, which will be combined with an enhanced systematic data driven approach to lead generation and campaign development and execution. Furthermore, Hapag-Lloyd intends to continuously and systematically enhance the capabilities of its front line sales force. Hapag-Lloyd is also streamlining its pricing process and developing the tools to drive active and agile pricing strategies. Hapag-Lloyd also strives to optimize its differentiated sales channels and service levels and streamline internal processes and communication to focus on time on customer sales and other higher value activities, such as rebalancing the responsibilities and capabilities for maintaining a consistent high quality and responsive customer service. This program is a multi-year effort to enhance revenue quality with first impact to be expected from 2017 onwards.

Disclaimer

These materials may not be published, distributed or transmitted in the United States, Canada, Australia or Japan. These materials do not constitute an offer of securities for sale or a solicitation of an offer to purchase securities (the "Shares") of Hapag-Lloyd AG (the "Company") in the United States, Germany or any other jurisdiction. The Shares of the Company may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the "Securities Act"). The Shares of the Company have not been, and will not be, registered under the Securities Act. Any sale in the United States of the securities mentioned in this communication will be made solely to "qualified institutional buyers" as defined in, and in reliance on, Rule 144A under the Securities Act.

This publication constitutes neither an offer to sell nor a solicitation to buy securities. The offer will be made solely by means of, and on the basis of, a securities prospectus which is to be published. An investment decision regarding the publicly offered securities of Hapag-Lloyd AG should only be made on the basis of the securities prospectus. The securities prospectus will be published promptly upon approval by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and will be available free of charge from Hapag-Lloyd AG, Ballindamm 25, 20095 Hamburg, Germany, or on the Hapag-Lloyd AG website.

In the United Kingdom, this document is only being distributed to and is only directed at persons who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or (ii) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.) (all such persons together being referred to as "Relevant Persons"). This document is directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this document relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.