Danaos Corporation · NYSE:DAC
Danaos — Investor Presentation (November 2023)
46 slides from Danaos's investor presentation, November 2023
Slide 1: Investor Presentation November 2023
Investor Presentation November 2023
Slide 2: Disclaimer
Disclaimer This presentation contains certain statements that may be deemed to be “forward-looking statements” within the meaning of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, that address activities, events or developments that the Company expect
Slide 3: Business Highlights
Business Highlights Business Model Provides Strong & ✓ Stable Cash Flow Profile Leading Diverse & High ✓ Containership Owner ✓ Quality Fleet & Operator Pioneers in Demand & Supply Digitalisation & ✓ Side Dynamics ✓ Champion of ESG Robust Capital Principles Structure & ✓ Conservative Financial Strate
Slide 4: Key Business Highlights
Key Business Highlights • One of the largest publicly-listed owners of modern containerships with 50 year history in the shipping Leading Containership A Owner and Operator market • One of the most efficient operators in the industry with highly competitive breakeven levels • Charter backlog of $2.5
Slide 5: Danaos by the Numbers
Danaos by the Numbers $2.5bn $306mn Cash Contracted revenue through 2028(1) Cash and Cash Equivalents as of September 30, 2023 0.16x $349mn Net Debt / LTM Q3 2023 Adjusted EBITDA(2) Undrawn Credit Commitment as of September 30, 2023 $711mn ~$1.3bn LTM Q3 2023 Adjusted EBITDA Enterprise value(3) (1)
Slide 6: Fleet Summary & Strong Charter Coverage Profile
Fleet Summary & Strong Charter Coverage Profile Containership Fleet TEU Capacity(1) Containership – Contracted Revenue & Contracted Days Coverage(3) 550 USDm Existing Fleet New Buildings Cash Contracted Revenue Non-cash Component of Contracted Revenue Contracted days coverage 500 100% 74.9 $1,000 90
Slide 7: Third Quarter and Nine Months 2023 Highlights
Third Quarter and Nine Months 2023 Highlights Operating Revenue Adjusted EBITDA(1) USDm USDm $1,000.0 $800.0 $674.7 ZIM Dividend, $750.0 $600.0 net $740.9 $724.3 $527.6 $534.4 $500.0 $400.0 $213.1 $250.0 $200.0 $260.0 $239.2 $178.0 $189.9 $0.0 $0.0 Three Months Ended September 30 Nine Months Ended S
Slide 8: Substantial Containership Fleet Employment and Charter Coverage
Substantial Containership Fleet Employment and Charter Coverage(1) Current charter Next Charter Charter Charter 2023 2024 2025 2026 2027 2028 Vessel TEU 2 1 Rate Expiry Rate Expiry Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026 Q1 2027 Q2 2027
Slide 9: Substantial Containership Fleet Employment and Charter Coverage
Substantial Containership Fleet Employment and Charter Coverage(1) Current charter Next Charter Charter Charter 2023 2024 2025 2026 2027 2028 Vessel TEU 2 1 Rate Expiry Rate Expiry Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026 Q1 2027 Q2 2027
Slide 10: Substantial Containership Fleet Employment and Charter Coverage
Substantial Containership Fleet Employment and Charter Coverage(1) Current charter Next Charter Charter Charter 2023 2024 2025 2026 2027 2028 Vessel TEU Age2 Charterer 1 Rate Expiry Rate Expiry Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026 Q1
Slide 11: Experienced Senior Management
Experience Senior Management Dr. John Coustas, President & CEO Evangelos Chatzis, Chief Financial Officer • CEO since 1987 • Joined Danaos in 2005 • Over 30 years of experience in • Over 28 years of experience in corporate the shipping industry finance and the shipping industry • Vice Chairman of th
Slide 12: A. Leading Containership Owner and Operator
A. Leading Containership Owner and Operator
Slide 13: Legacy of Leadership in Container Shipping
50 Year Legacy of Leadership in Container Shipping 1987 2006 2018 2020 to 2023 Dr. John Coustas steps NYSE IPO Refinancing Strong Free Cash Flow into Chief Executive role Raised $200mn generation and Deleveraging 1972 2005 2010 2019 Founded by Dimitris Coustas Incorporation in Marshall $200mn equity
Slide 14: A Diverse & High-Quality Fleet
A Diverse & High-Quality Fleet Containership Fleet Overview(1) 10x NBs 6,000 – 8,200 TEU 5x 10x Remaining Charter Term : 3 years 13,100 TEU 2,200 – 2,600 TEU Average Age: 11.4 years Average Age: 25.1 years Remaining Charter Term: 3.5 years Remaining Charter Term: 1.3 years 10% 14% 8x 5% 3,300 - 3,40
Slide 15: Charter Backlog to Leading Container Operators
Charter Backlog to Leading Container Operators Containership Charter Backlog(1) (TEU-weighted remaining duration of charter backlog) Charter backlog of 14% $2.5 billion through 20% to 2028(1) 4% 4% Average charter 4% duration of 3.2 years 18% (weighted by aggregate contracted 5% charter hire) (1) 8%
Slide 16: Track Record of Operational Excellence
Track Record of Operational Excellence Danaos' Management Practice Performance(1) Relative to Peers As part of a benchmarking exercise conducted by a global management consulting firm, Management Practice Performance and Safety & Quality Performance was assessed across a number of metrics and benchm
Slide 17: Pioneers in Digitization Supporting Operational Excellence
Pioneers in Digitization Supporting Danaos’ Class Leading Operational Excellence Early innovator in utilising technology in optimising operations: 1995 2004 2015 International Safety Management Lloyd’s List Technical Innovation Award Lloyd’s List Intelligence Big Data Award Certification of its cont
Slide 18: Leading Digitization Performance
Leading Digitization Performance Danaos utilises its leading management software capability, aiding in the optimal management of its fleet System Description Danaos Software Capability Manages maintenance jobs, schedules counter-based and condition- Planned based tasks, and automatically updates sto
Slide 19: Longstanding Champion of ESG Principles
Longstanding Champion of ESG Principles Danaos Management is keenly focused on maintaining a strong ESG framework for company operations Environmental Social Governance Last 3 Years Progress Advanced solutions to Code of ethics and ✓ Independent Board 72% decrease in the use of ✓ reduce emissions th
Slide 20: B. Robust Capital Structure and Conservative Financial Strategy
B. Robust Capital Structure and Conservative Financial Strategy
Slide 21: Financial Strategy
Financial Strategy Balanced Chartering Strategy • Continue to deploy assets on long-term charters to ensure cash flow visibility Supported by Continued Operational Excellence • Maintain high fleet utilization • Excess cash flow can be used for reducing leverage, for acquisition of young and modern f
Slide 22: Historical Financial Highlights
Historical Financial Highlights Revenues Adjusted EBITDA USDm USDm $1,200 $1,200 $993 $977 $1,000 $1,000 $851 $800 $800 $690 $711 $600 $600 $509 $452 $459 $447 $462 $400 $400 $310 $318 $311 $318 $200 $200 $0 $0 2017 2018 2019 2020 2021 2022 LTM 3Q 23 2017 2018 2019 2020 2021 2022 LTM 3Q 23 Net Incom
Slide 23: Focused on Maintaining Conservative Capital Structure
Focused on Maintaining Conservative Capital Structure De-leveraging Profile Cash and Cash Equivalents(2) and Undrawn Commitments Net Debt and LTM Q3 2023 Adjusted EBITDA Multiple(1) USDm Net Adjusted Debt Net Debt / Adjusted EBITDA (RH Axis) Cash and Cash Equivalents Undrawn Commitments $3,000 8.0x
Slide 24: Strong Free Cash Flow Visibility & Great Conversion to OCF
Strong Free Cash Flow Visibility & Great Conversion to OCF LTM Q3 2023 Free Cash Flow(1) Bridge USDm Drivers of FCF Uses of FCF Higher re-chartering Early repayment of debt and leases LTM Q3 2023 High utilization Capex and Investments FCF excludes CapEx and Operational efficiency Dividen
Slide 25: Financial Debt Maturity Profile
Financial Debt Maturity Profile Well-balanced repayment profile(1) USDm $300 $262.8 $200 $96.3 $100 $21.3 $15.1 $15.1 $6.9 $0 $0.0 2023 Reamaining 2024 2025 2026 2027 2028 Credit Facilities Unsecured Notes Breakdown of Financial Debt $417m Credit position • CFR rating : BB+ (Stable) and Ba2 (Stable)
Slide 26: C.1 Container Vessel Demand & Supply Side Dynamics
C.1 Container Vessel Demand & Supply Side Dynamics
Slide 27: Container Trade: Rising Volumes Following Slump in Q4 2022
Container Trade: Rising Volumes Following Slump in Q4 22 212 Mn Teu World Container Trade & GDP, 2000 – 2023F 2022(E) World Container Trade Mn TEU % yoy 275 17.5% 250 15.0% 225 12.5% -1.8% 200 10.0% 2022(E) Trade yoy Growth 175 7.5% 150 5.0% 125 2.5% 216 Mn Teu 100 0.0% 2023(F) World Container Trade
Slide 28: Demand: US Import Volumes Strengthen, Consumer Spending Remains Robust
Demand: US Import Volumes Strengthen, Consumer Spending Remains Robust - 8.5% US Containerised Imports from Far East, 2018-Q3 23 US Inflation-Adjusted Consumer Spending by Type US Far East TEU Imports, Q3 23 vs Q3 22 Mn TEU Index, 100=Jan 18 + 2.7% US Far East TEU Imports, 2.0 180 Q3 23 vs Q3 2019 1
Slide 29: Container TC Rates: Weaken in Q3, but Remain Above Pre-2020 Averages
Container TC Rates: Weaken in Q3, but Remain Above Pre-2020 Averages 59% 1-Year Timecharter Market Rates, January 2017 – October 2023 8,500 TEU Charter Rate % Ch: $k/Day Oct-23 vs. Avg 2010-19 200 180 31% 160 140 6,500 TEU Charter Rate % Ch: Oct-23 vs. Avg 2010-19 120 100 80 62% 60 4,300 TEU Charter
Slide 30: Orderbook Stable at 29% of Fleet, Continued Interest in 7-8k TEU Vessels
Orderbook Stable at 29% of Fleet, Continued Interest in 7-8k TEU Vessels 28.7% Containership Orderbook, End of September 2023 Age Profile of Fleet: Smaller Vessel Fleet Ageing Industry Orderbook-to-Fleet Ratio, End-September 23 Mn TEU % Share 6.0 100% 14.3% 5.0 80% Orderbook-to-Fleet Ratio: 4.0 Sub-
Slide 31: Supply: For Smaller Segments, Orderbooks Smaller Than 20+ Year Old Fleets
Supply : For Smaller Segments, Orderbooks Smaller Than 20+ Year Old Fleets 610 k TEU Containership Deliveries vs. Scrapping, 2014-23 20+ Year-Old Fleets vs. Segment Orderbooks Containership Deliveries, Q3 23 k TEU k TEU % 30+ Year Fleet 296 k TEU 700 25-29 Year Fleet Containership Demolitions Contai
Slide 32: Idle Capacity: Rise in Idling in Q3 23, but Almost Entirely Liner-Owned
Idle Capacity: Rise in Idling in Q3 23, but Idle Feet Almost Entirely Liner-Owned The volume of Idle Containership Capacity: Liner Company Owned vs Tonnage Provider Owned idle capacity remains at Mn TEU historical lows 3.0 90% 2.5 75% 1.7% 2016 71% Idle Fleet at End-Oct 23 2.0 60% NOO(1) vs. Peak of
Slide 33: 2,200-13,200 TEU Fleet: Workhorses of Long-Distance Container Trades
2,200-13,200 TEU Fleet: Workhorses of Long-Distance Container Trades 16.3% Danaos Fleet Segment Share of Long-Distance Trade Development Orderbook-to-Fleet Ratio in Danaos Fleet Segment Danaos fleet segments provide 79% of capacity Transpacific 63% of long-haul container trade volumes 79% Transatlan
Slide 34: Industry to Remain Consolidated as Alliance Patterns Face Shake-Up in 2025
Industry to Remain Consolidated as Alliance Patterns Face Shake-Up in 2025 Recent wave of Liner Company Alliance Members, End-Sept 2023 consolidation between liner operators Mn TEU Orderbook Consolidation between liner 8.0 Fleet 1 companies provides more stable 7.0 set of counterparties 9 6.0 Global
Slide 35: Environmental Regulations: Sailing Speeds Fall Again in Q3
Environmental Regulations: Sailing Speeds Fall Again in Q3 23 CII: Estimated 2022 Performance vs. 2023 40% Benchmarks Containership Average Sailing Speeds Estimated Share of D-E CII % A-Grade B-Grade C-Grade D-Grade E-Grade Index, 100 = Average 2013-19 Grades, Total Fleet 2022 100% 110 90% 8+ k TEU
Slide 36: C.2 Dry Bulk Vessel Demand & Supply Side Dynamics
C.2 Dry Bulk Vessel Demand & Supply Side Dynamics
Slide 37: Capesize: Market Rally in September after Slow Start to the Year
Capesize: Market Rally in September after Slow Start to the Year $14,174/Day Weekly Average Capesize Spot Rate Developments, 2021-2023 Baltic C5TC, Avg Wk1 - $ k/Day Wk45, 2023 Range, 2015-20 2021 2022 2023 90 80 $16,648/Day 70 Baltic C5TC, Avg Wk1 - Wk45, 2022 60 50 $33,221/Day 40 Baltic C5TC, Avg
Slide 38: Capesize: Seasonal Slowdown in Chinese Steel Output Following Healthy Q3 23
Capesize: Seasonal Slowdown in Chinese Steel Output Following Healthy Q3 23 China Daily Steel Output, 10-Day Average, 2021- Incremental Seaborne Iron Ore Imports, - 58.2 23 2018-2024(F) Incremental Seaborne Iron Ore Imports, 2022 (MnT) MnT/Day MnT % yoy Western Europe Other Taiwan South Korea 3.0 15
Slide 39: Capesize: Incremental Iron Ore and Minor Bulk Ton-Mile to Accelerate in 2024
Capesize: Incremental Iron Ore and Minor Bulk Ton-Mile to Accelerate in 2024 Capesize Incremental Tonne-Mile Demand by Capesize Annual Employment by Cargo (Mn - 34.9 Cargo Dwt) Incremental Capesize Ton-Miles Coal 2022, BnTM 40% 1000 BnTm 2003 Iron 800 Minor Bulks Grains Coal Iron Ore Total Ore 60% 6
Slide 40: Capesize: Moderate Fleet Growth so far in 2023, Orderbook Historically Small
Capesize: Moderate Fleet Growth so far in 2023, Orderbook Historically Small 5.2% Capesize Orderbook as % of Fleet, 2000-23 Age Profile of Capesize Fleet Capesize Orderbook-to-Fleet Ratio, End-Sep 23 Mn Dwt % % Share 25+ Years 20-24 Years 15-19 Years Newbuild Contracting 10-14 Years 5-9 Years 0-4 Ye
Slide 41: D. Appendix
D. Appendix <i a EI Fa
Slide 42: Adjusted Net Income
Adjusted Net Income Reconciliation of Net Income to Adjusted Net Income USD thousands LTM Three Months Nine Months Ended September 30, Ended September 30, Ended September 30, Year Ended December 31, Reconciliation of Net Income / (Loss) to Adjusted Net Income 2023 2022 2023 2022 2023 2022 2022 2021
Slide 43: Adjusted EBITDA
Adjusted EBITDA Reconciliation of Net Income to EBITDA and Adjusted EBITDA USD thousands LTM Three Months Nine Months Ended September 30, Ended September 30, Ended September 30, Year Ended December 31, Reconciliation of Net Income / (Loss) to EBITDA and Adjusted EBITDA 2023 2022 2023 2022 2023 2022
Slide 44: Free Cash Flow
Free Cash Flow Reconciliation of Free Cash Flow to Net Increase / (Decrease) in Cash, cash equivalents and restricted cash USD thousands LTM Three Months Nine Months Ended September 30, Ended September 30, Ended September 30, Year Ended December 31, Reconciliation of Free Cash Flow 2023 2022 2023 20
Slide 45: Stock Performance – Danaos vs. Peers
Stock Performance – Danaos vs. Peers Since July 1, 2020 3000% 1822% 2500% 2000% Stockholders' Return1 1500% 1000% 500% 0% -500% Jul 2020 Oct 2020 Jan 2021 Apr 2021 Jul 2021 Oct 2021 Jan 2022 Apr 2022 Jul 2022 Oct 2022 Jan 2023 Apr 2023 Jul 2023 Oct 2023 Danaos Costamare GSL Source: NASDAQ (1) Stockh
Slide 46: Thank You
Thank You