Danaos Corporation · NYSE:DAC
Danaos — Investor Presentation (August 2024)
52 slides from Danaos's investor presentation, August 2024
Slide 1: Investor Presentation August 2024
Investor Presentation August 2024
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 Leading Containership One of the largest publicly-listed owners of modern containerships with 50-year history in the shipping industry A Owner and Operator One of the most efficient operators in the industry with highly competitive breakeven levels Charter backlog of $3
Slide 5: Danaos by the Numbers
Danaos by the Numbers $3.2bn $372mm Cash Contracted revenue through 2033(1) Cash and Cash Equivalents as of June 30, 2024 0.29x $787mm Net Debt / LTM Q2 2024 Adjusted EBITDA(2) Liquidity(3) as of June 30, 2024 $705mm ~$1.8bn LTM Q2 2024 Adjusted EBITDA Enterprise value(4) (1) Cash Contracted Revenue
Slide 6: Second Quarter 2024 Financial & Operational Summary
Second Quarter 2024 Financial & Operational Summary Three Months ended June 30, 2024 and June 30, 2023 per segment* (Express in thousands of United States dollars, except as otherwise stated) Three Months Ended Three Months Ended June 30, 2024 June 30, 2023 Container Dry Bulk Container Dry Bulk Fina
Slide 7: First Half 2024 Financial & Operational Summary
First Half 2024 Financial & Operational Summary Six Months ended June 30, 2024 and June 30, 2023 per segment* (Express in thousands of United States dollars, except as otherwise stated) Six Months Ended Six Months Ended June 30, 2024 June 30, 2023 Container Dry Bulk Container Dry Bulk Financial & Op
Slide 8: Fleet Summary & Strong Charter Coverage Profile
Fleet Summary & Strong Charter Coverage Profile Containership Fleet TEU Capacity (in thousands)(1) Number of vessels (1) 90 600 Containerships Drybulk vessels Existing Fleet New Buildings 550 139.0 500 10 91.4 450 46.4 7 70 400 350 436.6 442.3 71 70 423.7 421.3 69 68 300 250 50 2021 2022 2023 June 3
Slide 9: First Quarter 2024 and First Half 2024 Highlights
First Quarter 2024 and First Half 2024 Highlights Operating Revenues Adjusted EBITDA USDm USDm $500 $400.0 $485.1 $499.8 $400 $356.4 $354.0 $300.0 $300 $200.0 $200 $241.5 $246.3 $176.8 $177.3 $100.0 $100 $0 $0.0 Three Months Ended June 30 Six Months Ended June 30 Three Months Ended June 30 Six Month
Slide 10: First Quarter and First Half 2024 Highlights – Segments
First Quarter and First Half 2024 Highlights – Segments Operating Revenues per Segment Time Charter Equivalent ($/per day)(1) per Segment USDm USD $60,000 $800.0 $37,802 $38,247 $700.0 $45,000 $600.0 $499.8 $500.0 $400.0 $30,000 $300.0 $246.3 $464.0 $20,614 $200.0 $230.6 $15,000 $18,052 $100.0 $0.0
Slide 11: Substantial Containership Fleet Employment and Charter Coverage
Substantial Containership Fleet Employment and Charter Coverage(1) As of: August 2, 2024 Current charter Next Charter Charter Charter 2024 2025 2026 2027 2028 2029 Vessel TEU Age Rate Expiry Rate Expiry Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Kota Peony 13,100 12 $54,000 Ma
Slide 12: Substantial Containership Fleet Employment and Charter Coverage
Substantial Containership Fleet Employment and Charter Coverage(1) As of: August 2, 2024 Current charter Next Charter Charter Charter 2024 2025 2026 2027 2028 2029 Vessel TEU Age Rate Expiry Rate Expiry Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Wide Alpha 5,466 10 $ 20,750 Au
Slide 13: Substantial Containership Fleet Employment and Charter Coverage
Substantial Containership Fleet Employment and Charter Coverage(1) As of: August 2, 2024 Charter terms Charter 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Newbuildings TEU Age Rate Expiry Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 14: Drybulk Fleet - Summary
Drybulk Fleet - Summary No. Vessel Type DWT Built Age(1) 1 Achievement Capesize 175,966 2011 13 2 Genius Capesize 175,580 2012 12 3 Ingenuity Capesize 176,022 2011 12 4 Integrity Capesize 175,966 2010 13 5 Peace Capesize 175,858 2010 14 6 W Trader Capesize 175,879 2009 14 7 E Trader Capesize 175,886
Slide 15: Experienced Senior Management
Experience Senior Management Dr. John Coustas, President & Chief Executive Officer Evangelos Chatzis, Vice President & 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 sh
Slide 16: A. Leading Containership Owner and Operator
A. Leading Containership Owner and Operator
Slide 17: 50 Year Legacy of Leadership in Container Shipping
50 Year Legacy of Leadership in Container Shipping 1987 2006 2018 2020 to 2024 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 18: A Diverse & High-Quality Fleet
A Diverse & High-Quality Fleet Containership Fleet Overview(1) 5x 5x 13,100 TEU NBs 9,200 TEU Average Age: 12.2 years Remaining Charter Term : 5.0 years Remaining Charter Term: 2.8 years 5x 2x 9,600 - 10,100 TEU Average Age: 15.0 years NBs 6,000 TEU 14% 8% Remaining Charter Term: 3.4 years Remaining
Slide 19: 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 $3.2 billion through to 2033(1) Average charter duration of 3.4 years (weighted by aggregate contracted charter hire) (1) Fleet utilization for Q2 2
Slide 20: 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 21: Pioneers in Digitization Supporting Danaos' Class Leading 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 22: 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 23: 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 24: B. Robust Capital Structure and Conservative Financial Strategy
B. Robust Capital Structure and Conservative Financial Strategy
Slide 25: Financial Strategy
Financial Strategy Balanced Chartering Strategy Continue to deploy assets on long-term charters to ensure cash flow visibility Supported by Continued Operational Maintain high fleet utilization Excellence Excess cash flow can be used for reducing leverage, for acquisition of young and modern f
Slide 26: Historical Financial Highlights
Historical Financial Highlights Revenues Adjusted EBITDA USDm USDm $1,200 $1,200 $993 $974 $988 $1,000 $1,000 $851 $800 $800 $690 $707 $705 $600 $600 $509 $452 $459 $447 $462 $400 $400 $310 $318 $311 $318 $200 $200 $0 $0 2017 2018 2019 2020 2021 2022 2023 LTM 2Q 2017 2018 2019 2020 2021 2022 2023 LT
Slide 27: 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 - Adjusted EBITDA Multiple(1) USDm Net Adjusted Debt Net Debt / Adjusted EBITDA (RH Axis) Cash and Cash Equivalents Undrawn Commitments $3,000 8.0x $800 7.3x Decr
Slide 28: Strong Free Cash Flow Visibility & Great Conversion to OCF
Strong Free Cash Flow Visibility & Great Conversion to OCF LTM 2Q 2024 Free Cash Flow(1) Bridge USDm Drivers of FCF Uses of FCF Higher re-chartering Early repayment of debt and leases LTM 2Q 2024 High utilization Capex and Investments FCF excludes CapEx and Operational efficiency Dividen
Slide 29: Financial Debt Maturity Profile
Financial Debt Maturity Profile Well-balanced repayment profile(1) USDm $300 $272.9 $200 $135.7 $106.3 $100 $25.2 $25.2 $12.6 $0 Remainder 2024 2025 2026 2027 2028 2029 Credit Facilities & Unsecured Notes Breakdown of Financial Debt $578m Credit position • CFR rating : BB+ (Stable) and Ba2 (Stable)
Slide 30: C.1 Container Vessel Demand & Supply Side Dynamics
C.1 Container Vessel Demand & Supply Side Dynamics
Slide 31: Container Trade: Strong Start to 2024 Continues in Q2 2024
Container Trade: Strong Start to 2024 Continues in Q2 2024 213 Mn Teu World Container Trade & GDP, 2000 – 2024F 2023(E) World Container Trade Mn TEU % yoy 275 17.5% 250 15.0% 225 12.5% 0.0% 200 10.0% 2023(E) Trade yoy Growth 175 7.5% 150 5.0% 125 2.5% 222 Mn Teu 100 0.0% 75 -2.5% 2024(F) World Conta
Slide 32: Red Sea Crisis: Freight Markets Surge in Q2 2024
Red Sea Crisis: Freight Markets Surge in Q2 2024 + 2.2 Mn TEU Deployed Capacity Changes, Jul-24 vs Oct-23 Select Spot Container Freight Rates, Ex-Far East New Vessel Deliveries, Nov-23 to Jul-24 Mn TEU 2.5 2.0 + 1.5 Mn TEU Additional Capacity on Far 1.5 East-Europe Liner Services, Jul-24 vs Oct-23 1
Slide 33: Demand: US TEU Volumes Strong During Possible 'Early' Peak Season
Demand: US TEU Volumes Strong During Possible ‘Early’ Peak Season + 8.0% US Containerised Imports from Far East, 2018-23 US Inflation-Adjusted Consumer Spending by Type US Far East TEU Imports, Q2 24 vs Q2 23 Mn TEU Durable Goods 2.0 Index, Non-Durable Goods 100 = Services 1.8 Jan-18 Durable Goods (
Slide 34: Container Timecharter Rates: Ongoing Rebound as Chartering Needs Increase
Container Timecharter Rates: Ongoing Rebound as Chartering Needs Increase +165% 1-Year Timecharter Market Rates, January 2017 – July 2024 8,500 TEU Charter Rate % Ch: $k/Day Apr 24 vs. Avg 2010-19 200 180 160 +254% 140 120 6,500 TEU Charter Rate % Ch: 100 Apr 24 vs. Avg 2010-19 80 60 40 +313% 20 0 Ο
Slide 35: Supply: Orderbook Lower at 21.4% of Fleet, Recent Rise in Newbuild Contracting
Supply: Orderbook Lower at 21.4% of Fleet, Recent Rise in Newbuild Contracting 21.4% Containership Orderbook, End-April 2024 Age Profile of Fleet: Smaller Vessel Fleet Ageing Industry Orderbook-to-Fleet Mn TEU Ratio, End-June 24 4.5 4.0 3.5 11.1% 3.0 Orderbook-to-Fleet Ratio: 2.5 Increase in Sub-12,
Slide 36: Supply: Net Fleet Growth Highly Elevated, Driven by 12,000+ TEU Deliveries
Supply: Net Fleet Growth Highly Elevated, Driven by 12,000+ TEU Deliveries 912 k TEU Containership Deliveries versus Scrapping, 2014-24 20+ Year-Old Fleets vs Segment Orderbooks Containership Deliveries, Q2 24 k TEU 1000 Containership Demolitions 800 Containership Deliveries 296 k TEU 600 Containers
Slide 37: Idle Capacity: Vessel Idling Highly Limited in Scale
Idle Capacity: Vessel Idling Highly Limited in Scale The volume of idle Idle Containership Capacity: Liner Company Owned vs Tonnage Provider Owned capacity remains at a low level Mn TEU % Share 3.0 80% 70% 2.5 2016 0.8% 2.0 71% NOO Owned 60% 50% Idle Fleet at End-Jul 24 vs. Peak of 12% in Jun 20 1.5
Slide 38: 2,200-13,200 TEU Fleet: Workhorses of Long-Distance Container Trades
2,200-13,200 TEU Fleet: Workhorses of Long-Distance Container Trades 13.3% Danaos Fleet Segment Share of Long-Distance Trade Deployment Orderbook-to-Fleet Ratio in Danaos Fleet Segment Danaos fleet segments provide 76% of capacity 63% of long-haul container trade volumes Transpacific 76% Transatlant
Slide 39: 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 Announced Changes to Alliances (Current Fleets and Orderbooks) consolidation between liner Mn TEU operators 8.0 Orderbook Consolidation between liner Fleet 7.0 1 companies provides more stable set of counterpar
Slide 40: C.2 Drybulk Vessel Demand & Supply Side Dynamics
C.2 Drybulk Vessel Demand & Supply Side Dynamics
Slide 41: Capesize: Markets see Continued Strength in H1 2024
Capesize: Markets see Continued Strength in H1 2024 $23,808 k/Day Weekly Average Capesize Spot Rate Developments, 2021-24 Baltic C5TC, Average Wk1-Wk31, 2024 $ k/Day 90 Range, 2015-20 2021 80 2022 2023 70 2024 $12,582 k/Day 60 Baltic C5TC, Average 50 Wk1-Wk31, 2023 40 30 20 $18,451 k/Day 10 Baltic C
Slide 42: Capesize: Wider Range of Iron Ore Importers Return to Growth
Capesize: Wider Range of Iron Ore Importers Return to Growth China Daily Steel Output, 10-Day Average, 2021-24 Incremental Seaborne Iron Ore Imports, 2018-2024(F) - 86.9 10yr Min-Max (2012-2021) MnT Western Europe % yoy MnT/Day Other Incremental Iron Ore Imports, 2024 2022 (MnT) 2.6 2021 Taiwan 2022
Slide 43: Capesize: Incremental Ton-Miles to Maintain Expansion in 2024
Capesize: Incremental Ton-Miles to Maintain Expansion in 2024 Capesize Incremental Tonne-Mile Demand by Cargo Capesize Annual Employment by Cargo (Mn Dwt) + 105.9 BnTm 1000 Incremental Capesize Ton-Miles 2022, BnTM Coal Minor Bulks 800 2003 40% Grains Iron Ore Coal 60% 600 Iron Ore Total 400 + 641.1
Slide 44: Capesize: Moderate Fleet Growth Expected to Remain in Place
Capesize: Moderate Fleet Growth Expected to Remain in Place 5.5% Capesize Contracting and Orderbook as % of Fleet, 2000-23 Age Profile of Capesize Fleet Capesize Orderbook-to- Fleet Ratio, End-H1 2024 % Share 25+ Years 20-24 Years Mn Dwt % 100 100% 15-19 Years 10-14 Years 100 Newbuild 90 Contracting
Slide 45: D. Appendix
D. Appendix
Slide 46: Adjusted Net Income
Adjusted Net Income Reconciliation of Net Income to Adjusted Net Income USD thousands LTM Three Months Six Months Ended June 30, Ended June 30, Ended June 30, Year Ended December 31, Reconciliation of Net Income / (Loss) to Adjusted Net Income 2024 2023 2024 2023 2024 2023 2023 2022 2021 2020 2019 2
Slide 47: Adjusted Net Income per segment
Adjusted Net Income per segment Reconciliation of Net Income to Adjusted Net Income per segment USD thousands Three Months Ended Three Months Ended June 30, 2024 June 30, 2023 Container Dry Bulk Container Dry Bulk Reconciliation of Net Income / (Loss) to Adjusted Net Income Vessels Vessels Other Tot
Slide 48: Adjusted EBITDA
Adjusted EBITDA Reconciliation of Net Income to EBITDA and Adjusted EBITDA USD thousands LTM Three Months Six Months Ended June 30, Ended June 30, Ended June 30, Year Ended December 31, Reconciliation of Net Income / (Loss) to EBITDA and Adjusted EBITDA 2024 2023 2024 2023 2024 2023 2023 2022 2021 2
Slide 49: Adjusted EBITDA per segment
Adjusted EBITDA per segment Reconciliation of Net Income to EBITDA and Adjusted EBITDA per segment USD thousands Three Months Ended Three Months Ended June 30, 2024 June 30, 2023 Container Dry Bulk Container Dry Bulk Reconciliation of Net Income to Adjusted EBITDA Vessels Vessels Other Total Vessels
Slide 50: 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 Six Months Ended June 30, Ended June 30, Ended June 30, Year Ended December 31, Reconciliation of Free Cash Flow 2024 2023 2024 2023 2024 2023 202
Slide 51: Stock Performance – Danaos vs. Peers
Stock Performance – Danaos vs. Peers Since July 1, 2020 3000% 2,401% 2500% 2000% Stockholders' Return1 1500% 1000% 500% 0% -500% Jul 2020 Oct 2020 Jan 2021Apr 2021 Jul 2021 Oct 2021 Jan 2022Apr 2022 Jul 2022 Oct 2022 Jan 2023Apr 2023 Jul 2023 Oct 2023 Jan 2024 Apr 2024 Jul 2024 Danaos Costamare GSL
Slide 52: Thank You
Thank You