Wallenius Wilhelmsen’s ambition is to substantially grow the landbased segment by expanding the core offering and expanding to full lifecycle logistics.
Summary of 2019
Total income from the landbased segment for the full year of 2019 was USD 900 million, a decline of 1% compared with 2018. Both Solutions Americas – H&H and Solutions APAC/EMEA experienced strong volume growth in 2019 compared to 2018, while Solutions Americas – Auto and Terminals experienced lower volumes in 2019 compared to the previous year.
Adjusted EBITDA was USD 125 million, up USD 36 million compared to 2018 but including a USD 43 million positive impact from the implementation of IFRS 16, so underlying performance was down. The results were positively affected by continued strong development for Solutions Americas – Auto, including solid growth in Syngin Technology, which was acquired in July 2018, as well as strong performance in Solutions Americas – H&H. Solutions APAC/EMEA results, excluding the positive impact of IFRS 16 implementation, were flat compared to 2018, while underlying performance for Terminals declined as a result of lower volumes and some inefficiencies, as it takes time to adjust to the volume decline.
EBITDA for the landbased segment was also affected by an adjustment to pension liabilities which had a USD 3 million negative impact. Including this adjustment, EBITDA ended at USD 123 million.
VSA, part of Solutions Americas – Auto, experienced some decline in volumes during 2019, but maintained a solid financial performance due to efficiency improvements in the operations. Solutions Americas – Auto was furthermore strengthened by a good financial performance in Syngin. EBITDA for the full year 2019 ended at USD 60 million, up from USD 40 million in 2018, including a positive impact from implementation of IFRS 16 of USD 17 million. Solutions Americas – H&H experienced strong volume growth in 2019, which coupled with full realisation of synergies from the acquisition of Keen contributed to a strong result. EBITDA for 2019 was USD 20 million, up from USD 12 million in 2018, including an IFRS 16 implementation effect of USD 4 million.
Solutions APAC/EMEA benefited from growth in high-margin and value-added services, particularly in the first part of the year, while lower volumes and some inefficiencies in operations pulled down performance in the later part of 2019. This segment was also positively affected by the freight-forwarding and supply-chain management businesses moving to Solutions APAC/EMEA from 2019, from the ocean segment and Terminals segment, respectively. EBITDA was USD 13 million, up from USD 6 million in 2018, including a positive impact from IFRS 16 implementation of USD 6 million.
Lower volumes in 2019 had an impact on the Terminals segment, as did some cost inefficiencies as it takes time to adjust to lower volumes. This led to a decrease in the underlying performance, with EBITDA ending at USD 41 million for the full year 2019, up by USD 8 million compared to 2018 but positively affected by USD 15 million from the IFRS 16 implementation.
Wallenius Wilhelmsen has a clear ambition to continue to grow and expand the landbased footprint. In 2019, WW Solutions and Mitsubishi Corporation LT, Inc (MCLOGI) agreed to merge their inland finished vehicle transport and logistics services in Thailand, creating a 50/50 joint venture named MCW Logistics Solutions. The intention is further to expand the business into other countries in ASEAN (The Association of Southeast Asian Nations) with the objective to establish MCW Logistics Solutions as the preferred supplier of finished vehicle logistics solutions in ASEAN. The transaction will be concluded in March and commercial start up is planned for April 1st, 2020, subject to certain customary conditions.