3Q 2012 Performance Revie · •Shipped +3% volume while reducing capacity •Core EBIT of US$74m for 3Q 2012 •Net profit of US$50m for 3Q 2012 •Improved results across Liner

3Q 2012 Performance Review25 October 2012

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.

1. 3Q 2012 Results Highlights

Page 4 | 25 October 2012 | 3Q 2012 Performance Review

Group achieves US$50 million net profit from

cost efficiencies, stable rates & volume growth

Efficiency program on track:•US$135m savings in 3Q 2012

•US$360m savings YTD 2012

Profitable Logistics growth:•Revenue +10% in 3Q12

•Acquiring APLL-Zhiqin to expand China growth platform

Slot cost improvement:•7 new, more cost efficient vessels received

•Shipped +3% volume while reducing capacity

• Core EBIT of US$74m for 3Q 2012

• Net profit of US$50m for 3Q 2012

• Improved results across Liner & Logistics


Note: 1Q and 4Q are normalised to 12-week periods

Third improved quarter turns Group to net

profit

2,302

50

74

(300)

(200)

(100)

-

100

200

300

400

-

500

1,000

1,500

2,000

2,500

3,000

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12

Revenue (LHS) Net profit (RHS) Core EBIT (RHS)

US$m US$m


Liner cost & efficiency focus improves results

764 692 699

824 791 720 707

-8

-53

-88

-297

-246

755

-350

150

-500

0

500

1,000

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12

Volume (FEU) (LHS) Liner Core EBIT (US$m) (RHS)

Volume('000s FEU)

Core EBIT(US$m)

Fleet Renewal is Lowering Slot Cost

+70,000 TEU

7 newbuild vessels

-113,000 TEU

24 vesselsVolume

+3%

8% less

fuel used

Cost & Efficiency Progress


ELP & Organizational streamlining going to plan

Efficiency Leadership Program (ELP) delivers results:

•US$135m cost savings in 3Q12

•US$360m cost savings YTD12

•On track for US$500m full year target

3Q12 ELP Categories

Organizational streamlining

improving Group’s competitiveness

•3Q12 G&A costs down

US$18m, mainly due to ELP and

Organizational streamlining

Bunker-related44%

Others21%

Terminals-related

13%

Network-related22%


1,015

1,120

700

800

900

1,000

1,100

1,200

US$m

YTD11 YTD12

333

365

200

300

400

US$m

3Q11 3Q12

Logistics sustains organic growth, expands China

footprint

Double digit revenue growth, Core EBIT of US$19m in 3Q 2012

Acquisition of APLL-Zhiqin will expand nationwide network to

nearly 80 locations to grow domestic logistics business

+10%

3Q Logistics Revenue YTD Logistics Revenue

+10%

2. 3Q 2012 Financial Performance


US$m YTD12 YTD11 % ▲ 3Q12 3Q11 % ▲

Revenue 7,013 6,808 3 2,302 2,213 4

Core EBITDA 86 111 (23) 146 (5) n.m.

• Depreciation & Amortisation (229) (211) 8 (72) (67) 7

Core EBIT (before non-

recurring items)

(143) (100) 43 74 (72) n.m.

Non-recurring items (111) (1) 11,000 - - -

EBIT (254) (101) 151 74 (72) n.m.

Net profit / (loss) to equity

holders

(321) (158) 104 50 (91) n.m.

Net profit / (loss) to equity

holders (before non-recurring

items)

(210) (157) 34 50 (91) n.m.

Group Financial Highlights

Core EBIT US$74 million, Net profit US$50m in 3Q12


Financial Highlights by Business Segment

Revenue (US$m) YTD12 YTD11 % ▲ 3Q12 3Q11 % ▲

Liner 5,965 5,868 2 1,961 1,904 3

Logistics 1,120 1,015 10 365 333 10

Elimination (72) (75) (4) (24) (24) -

Total Revenue 7,013 6,808 3 2,302 2,213 4

Core EBIT (US$m) YTD12 YTD11 % ▲ 3Q12 3Q11 % ▲

Liner (184) (149) 23 55 (88) n.m.

Logistics 41 49 (16) 19 16 19

Total Core EBIT (143) (100) 43 74 (72) n.m.

Improved Liner performance from cost & efficiency focus,

Logistics maintains profitable growth


Group Financial Profile

Shareholders’ funds of US$2.4 billion

Net current assets of US$330 million

The Group also has sizeable committed long term credit facilities from

large reputable financial institutions to meet its commitments as well

as to repay any debts as and when they fall due

Fully financed newbuild vessel program, by bonds and committed ship

financing

Unlocking capital for strategic investment from ongoing sale of vessels

and NOL building

Resilient financial position


Group Balance Sheet Highlights

US$m 21 Sep’ 12 30 Dec’ 11

Total Assets 7,922 6,962

Total Liabilities 5,552 4,310

Total Equity 2,370 2,652

Total Debt 3,530 2,354

Total Cash 709 228

Net Debt 2,821 2,126

Gearing (Gross) 1.49x 0.89x

Gearing (Net) 1.19x 0.80x

NAV per share (US$) 0.90 1.01

(S$) 1.10 1.31


US$m YTD12 YTD11

Cash & Cash Equivalents - Beginning @ 1Q 228 977

Cash (Outflow)/Inflow

Operating Activities (92) 22

Investing/Capex Activities (562) (1,222)

Financing Activities 1,135 588

Cash & Cash Equivalents – Closing @ 3Q 709 365

Group Cash Flow Highlights


US$m YTD12 YTD11

1. Vessels 550 992

2. Equipment / Facilities 65 112

3. Drydock 18 42

4. IT 22 42

5. Others 6 4

Total 661 1,192

Group Capital Expenditure

3. Liner


Liner Results Highlights

Sustained efficiency & cost gains in YTD12:•Volume up 3%, fleet capacity down 7% and fuel consumption down 8%

Improving slot cost:•Cost of sales/FEU down 3% (excluding bunker price rise)

Managing capacity & network:•Received 7 new 10,000 TEU ships, returned charter ships - net fleet

reduction of 43,000 TEU

•Volume growth while network planning & deploying smaller fleet

• Core EBIT profit of US$55m in 3Q12

• Core EBIT loss of US$184m in YTD12

• Continued gains in efficiency & cost savings

• Stable freight rates & higher volume in 3Q12


Liner Results Summary

US$m YTD12 YTD11 % ▲ 3Q12 3Q11 % ▲

Revenue 5,965 5,868 2 1,961 1,904 3

Core EBITDA 37 55 (33) 124 (23) n.m.

Core EBIT (184) (149) 23 55 (88) n.m.

EBIT (293) (149) 97 56 (88) n.m.

Core EBIT margin (%) (3.1) (2.5) 2.8 (4.6)

Liner achieved YTD12 revenue of US$6 billion, a year-on-year (YoY) increase of 2% mainly

due to higher volumes transported, partly offset by lower freight rates.

Average revenue per FEU was US$2,541 or 1% lower YoY mainly due to lower

freight rates in the Transpacific and the Transatlantic trade.

Volume rose by 3% YoY mainly due to higher volumes across most trades.

Cost of sales per FEU was relatively unchanged, however bunker price rose 13%

YoY to US$674/MT. Excluding the bunker price rise, Cost of sales per FEU was 3%

lower due to stricter fuel consumption, operational cost efficiencies and slow

steaming.


Volume and Average Revenue/FEU Trend

Note: Average Period volumes are normalised based on number of weeks in the period

3Q11 Average Revenue/FEU

US$2,539

3Q12 Average Revenue/FEU

US$2,601

3Q12 Average Revenue/FEU up 2% year-on-year

-

10

20

30

40

50

60

70

1,200

1,600

2,000

2,400

2,800

3,200

3,600

P1

P2

P3

P4

P5

P6

P7

P8

P9

P1

0

P1

1

P1

2

P1

P2

P3

P4

P5

P6

P7

P8

P9

P1

0

P1

1

P1

2

P1

P2

P3

P4

P5

P6

P7

P8

P9

P1

0

P1

1

P1

2

P1

P2

P3

P4

P5

P6

P7

P8

P9

2009 2010 2011 2012

Average Period Volume (RHS) Average Revenue per FEU (LHS)

'000 FEU/ weekUS$/FEU

Period


Operational Update

Note: Based on point of sailing and inclusive of headhaul and backhaul trade.

Volume (‘000 FEUs) YTD12 YTD11 % ▲ 3Q12 3Q11 % ▲

Transpacific 624 623 - 207 203 2

Latin America 153 135 13 50 44 14

Asia-Europe 354 360 (2) 112 116 (3)

Transatlantic 122 101 21 41 30 37

Intra-Asia 965 936 3 297 306 (3)

Total 2,218 2,155 3 707 699 1

Average Revenue/FEU (US$) YTD12 YTD11 % ▲ 3Q12 3Q11 % ▲

Transpacific 3,748 3,912 (4) 3,763 3,944 (5)

Latin America 3,520 3,420 3 3,568 3,373 6

Asia-Europe 2,493 2,471 1 2,646 2,317 14

Transatlantic 2,855 3,293 (13) 2,780 3,434 (19)

Intra-Asia 1,583 1,491 6 1,591 1,478 8

Total 2,541 2,560 (1) 2,601 2,539 2

Volume and Revenue/FEU growth in 3Q12 despite weak market


Improved utilization and trade balance drives empty

repositioning YTD12 costs down 5%

92%91%

94%

92%

93%

94% 94%

87%86%

85%

91%

95%

91%

89%

80%

85%

90%

95%

100%

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2011 2012

Headhaul utilization Backhaul utilization

Maintained improved trade balance despite seasonal dip in 3Q

backhaul


Fleet Renewal

Note: 5 out of the 10 x 14,000 TEU vessels for delivery between 2013 and 2014 will be chartered out to MOL

Building a modern and cost-competitive fleet, seven 10,000 TEU

vessels already delivered in 2012

0

50,000

100,000

150,000

200,000

250,000

2012 2013 2014

8,100 TEU 9,000 TEU 10,000 TEU 14,000 TEU

10

21

3

TEUs

7 x 10,000 TEU vesselsdelivered

10 x 14,000 TEU

9 x 9,000 TEU

3 x 10,000 TEU

3 x 9,000 TEU2 x 8,100 TEU

Total vessels


Fleet Renewal

APL Fleet

Start YTD 2012

149 vessels

640,000 TEUs

Average size

4,300 TEU

APL Fleet

End 3Q 2012

132 vessels

597,000 TEUs

Average size

4,500 TEU

Improving slot costs with more efficient newbuild ships

Charters

expiring

4Q 2012 to

2014

29 vessels

171,600 TEUs

Current

Net capacity

change-43,000 TEU

+7 newbuild ships

-24 charter/own ships

Future

1 Jan 2012 21 Sep 2012

4. Logistics


Logistics Results Highlights

Continued business growth:•10% revenue growth in 3Q 2012, 10% in YTD 2012

•Strong demand for rail and land-based logistics services

Expanding growth platform in China:•Acquiring remaining shares in APLL-Zhiqin

•Expands nationwide network to nearly 80 offices and hub locations

•Tap demand from international customers within China’s fast-growing

consumption markets

• Core EBIT profit of US$19m in 3Q12

• Core EBIT profit of US$41m in YTD12


Logistics Results Highlights

US$m YTD12 YTD11 % ▲ 3Q12 3Q11 % ▲

Revenue 1,120 1,015 10 365 333 10

Core EBITDA 49 56 (13) 22 18 22

Core EBIT 41 49 (16) 19 16 19

EBIT 39 48 (19) 18 16 13

Core EBIT margin (%) 3.7 4.8 5.2 4.8

Logistics achieved YTD12 revenue of US$1.1 billion, growing 10% year-on-year (YoY)

while facing softer economic conditions in developed markets.

Contract Logistics achieved revenue of US$740 million, a 16% YoY increase due to

strong demand for rail and land-based logistics services.

International Services achieved revenue of US$380 million, a 1% increase YoY

amidst a softer retail and apparel environment.

Core EBIT of US$41 million for YTD12, a 16% decrease YoY mainly due to increased

investments to improve our technology products and commercial infrastructure, and

lower contribution from associated company.


Performance Breakdown

US$m YTD12 YTD11 % ▲ 3Q12 3Q11 % ▲

Revenue 1,120 1,015 10 365 333 10

• Contract Logistics 740 639 16 232 206 13

• International Services 380 376 1 133 127 5

Core EBIT 41 49 (16) 19 16 19

• Contract Logistics 21 20 5 9 6 50

• International Services 20 29 (31) 10 10 -

Core EBIT Margin (%) 3.7 4.8 5.2 4.8

• Contract Logistics 2.8 3.1 3.9 2.9

• International Services 5.3 7.7 7.5 7.9

Growth across both business segments


Revenue and Core EBIT Margin Trend

Record weekly revenue growth, 3Q12 margin recovery mainly from

stronger demand and improved cost management

5.1%

4.3%

6.0%5.3%

5.7%

3.8%

4.8%5.1%

3.3%

2.5%

5.2%

0.0%

5.0%

10.0%

15.0%

10

15

20

25

30

35

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12

Weekly Revenue (US$m) (LHS) Core EBIT Margin (%) (RHS)

Weekly Revenue(US$m)

Core EBITMargin (%)


Expanding APL Logistics China growth platform

• Acquire remaining shares in APLL-Zhiqin, turning it into wholly-owned

subsidiary

• Expands nationwide network to nearly 80 offices & hub locations

• Positioned to better serve international customers seeking to penetrate

China’s fast-growing consumption markets


YTD12 Revenue Breakdown – by Region (US$m)

Revenue Trend by Region

YTD11 Revenue Breakdown – by Region (US$m)

24% (Asia/Middle

East)

66% (Americas)

10% (Europe)

$741$106

$273

26% (Asia/Middle

East)

62%

(Americas)

12% (Europe)

$631$120

$264

Revenue growth led by Americas which benefited from expansion

into US intermodal and strong demand from automotive sector

5. Group Outlook


Group Outlook

The Group turned in an improved third quarter result due mainly to cost savings

and improved business efficiencies. However, the macro-economic outlook

remains weak and the container shipping industry continues to face

overcapacity and high fuel prices. The Group posted weak first quarter results.

While the Group will continue to extract further operational efficiencies and

strengthen its competitive position, it expects to post a full year loss.

Appendix


YTD11 Revenue Breakdown – by Customer Segment

3% (Electronics/Hi tech)

10% (Others)

41% (Auto/Industrial)

34% (Retail)

12% (Consumer)

YTD12 Revenue Breakdown – by Customer Segment

9% (Others)

53% (Auto/Industrial)

23% (Retail)

12% (Consumer)

Logistics - Revenue Trend by Customer Segment

Greater demand for our auto-related logistics services increases Auto/Industrial segment

share.

3% (Electronics/Hi tech)


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.

End of Presentation

Thank You

Neptune Orient Lines Ltd

456 Alexandra Road,

NOL Building

Singapore 119962

Tel: (65) 6278 9000

Fax: (65) 6278 4900

Company registration

number : 196800632D

Website: www.nol.com.sg

Documents

3Q 2012 Performance Revie · •Shipped +3% volume while reducing capacity •Core EBIT of US$74m for 3Q 2012 •Net profit of US$50m for 3Q 2012 •Improved results across Liner