Financial review

Highlights for 2017

2017 was an eventful year in WWL’s 156-year long history. The merger between Wilh. Wilhelmsen ASA (WW ASA) and Wallroll AB (Wallroll) creating Wallenius Wilhelmsen Logistics ASA (WWL ASA) marked a new start for the group. In 2017 WWL also carried out a major organisational restructuring, improved its financial results, and expanded the landbased solutions network.

WWL ASA was established in April 2017, creating a more efficient and agile ownership and governance structure enabling substantial cost synergies and faster decision making. Furthermore, the merger between WW ASA and Wallroll created the unrivalled market leader in the finished logistics segment and facilitated an improved growth path for both the ocean and landbased businesses. After the completion of the merger, Wilh. Wilhelmsen Holding ASA and Wallenius Lines AB each own 160 000,000 shares in the company, representing 37.8% of the share capital.

WWL is well on its way to realise the USD 100 million synergy target set in connection with the merger, and in February 2018 the target was raised to USD 120 million. As per year-end 2017, about USD 75 million of the targeted annualised synergies had been confirmed, delivered through actions related mainly to an organisational restructuring and procurement. The organisational restructuring was successfully completed in August 2017 with limited disruption to the daily operations. The remaining synergies are mainly related to fleet optimisation, ship management and IT, and realisation is expected to materialise during 2018.

In April 2017, WWL initiated a project to establish a legal and funding structure consistent with the business unit structure of Wallenius Wilhelmsen Ocean (WW Ocean), Wallenius Wilhelmsen Solutions (WW Solutions), EUKOR and ARC. As part of the process all ship loans in Wallenius Logistics AB and Wilhelmsen Lines AS will either be refinanced or amended to allow for the restructuring to take place. The process is well on its way and the target is to finalise the process during the second quarter 2018.

For the ocean segment, results developed positively in 2017 supported by increased volumes, improved cargo mix, and realisation of synergies. On the negative side, the ocean segment continued to be faced with overcapacity of tonnage and resulting pressure on freight rates throughout 2017.

For the landbased segment, the underlying activity level and results developed positively during the year, mainly driven by strong performance for technical services in North America and increased volumes for the terminals. Towards the end of the year, Keen Transport Inc. (Keen) was acquired for USD 64 million, making WWL the clear market leader for high & heavy processing and transportation in North America.