2005 Full Year Results Roadshow Presentation Full Year Results Roadshow Presentation 2 Disclaimer...

3-7 April 2006

2005 Full Year ResultsRoadshow Presentation

2

DisclaimerInvesting in the shares of Panalpina World Transport Holding Ltd involves risks. Prospective investors are strongly requested to consult their investment advisors and tax advisors prior to investing in shares of Panalpina World Transport Holding Ltd.

This document contains forward-looking statements which involve risks and uncertainties. These statements may be identified by such words as “may”, “plans”, “expects”, “believes” and similar expressions, or by their context. These statements are made on the basis of current knowledge and assumptions. Various factors could cause actual future results, performance or events to differ materially from those described in these statements. No obligation is assumed to update any forward-looking statements. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures and regulatory developments.

The information contained in this document has not been independently verified and no representation or warranty, express or implied, is made to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. The information in this presentation is subject to change without notice, it may be incomplete or condensed, and it may not contain all material information concerning the Panalpina Group. None of Panalpina World Transport Holding Ltd or their respective affiliates shall have any liability whatsoever for any loss whatsoever arising from any use of this document, or its content, or otherwise arising in connection with this document.

This document does not constitute, or form part of, an offer to sell or a solicitation of an offer to purchase any shares and neither it nor any part of it shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. This information does neither constitute an offer to buy shares of Panalpina World Transport Holding Ltd nor a prospectus within the meaning of the applicable Swiss law.

Disclaimer

3

Executive Summary

• 2005: the year of the successful Panalpina IPO

• Double digit turnover growth: +13.8%

• Operational result improved by +19.2%

• Highest net earnings in company’s history

• Consistent performance in the Regions. Asia was in line but willhave a special focus in 2006

• US restructuring showing promising signs

• Air and Oceanfreight grew faster than the market. Our SCM business grew 22.7%

• Buoyant oil & gas. Strengthened market leadership

• 2006: a new CEO will be appointed

M. Ribar, CFOExecutive Summary

4

Business Highlights: Our Strategy at Work

Business Highlights

• Increased market share on Asian trade flows

• Strengthened market leadership in O&G. Hi-Tech also outstanding performance

• Maintained balanced GA/SME customer mix (20/80) with nice business wins

• Strong productivity gains in 2005 as a result of 2004 initiatives

• Achieved double digit organic growth. 2 bolt-on acquisitions in O&G

• The “asset light” model works: SCM Turnover +22.7%

• Operational software (new release) roll out is on track. Air and Seawarder roll out to be completed by 2007

• Ongoing Management Incentive Plan will involve more than 220 managers

M. Ribar, CFO

5

Freight Forwarding Industry Trends are Favourable

• Global economic growth was still solid in 2005 at 3.3% (3.8% in 2004):– US, Europe, and Latin America slightly softer than previous year– Japan and rest of Asia picked up– China grew almost 10%, India and HK 8%

• 2006 is expected to be another good year for the World Economy with global GDP on a pace of 3.3-3.5% growth

• Outsourcing is a key driver with traffic on the Asia-Europe lane exceeding the transpacific. Foreseen acceleration of European outsourcing

• Increasing need for time definite delivery in several industry verticals

• The catalyst for consolidation wave is volumes and skills in managing integrated logistic solutions

Market and Competition M. Ribar, CFO

6

Regional Focus: Performance

EMEA: The year of Oil & Gas• Positive business development in the O&G sector (Angola, Kazakhstan, Russia)

• Full year impact from Grampian acquisition (4.8% of revenue growth)

• Strongly supported by business gains in the UK, Germany, Switzerland and the Benelux

NORAM: Positive signs of turnaround• Turnover grew 16.7% due to business wins across all industry verticals

• Increased sales activity with a more balanced approach to target different market segments

• Remarkable business wins in SCM

LATAM: The driver of SCM growth• Enjoyed the favorable economic and political climate in Brazil, Argentina, Venezuela

• Major contract award from a leading mobile phone manufacturer

• Growing share of SME’s accounts in customer portfolio

APAC: The volumes engine• Revenue grew 20% despite weaknesses on Europe to Asia trade lane

• New business gains in O&G in Singapore

• Strong benefits from expansion of local business in China

M. Ribar, CFORegional Focus

7

Performance per Division: Airfreight

Air Freight

Net forwarding revenue 20053’415 m CHF (49.1%)

• Central procurement andcapacity management (CPC)

• Strategic partnershipwith leading airlines

• 24x7 hub and charter activities

M. Ribar, CFODivisional Performance

• Turnover growth: 10.7% with some influence from fuelsurcharge

• Volume growth: 5.5%. Market growth estimated at 3.2%

• Well above market growth in Asia-EU and Asia-Noram:- EMEA-ASIA-EMEA +7.6% (30% of Group volumes)- EMEA-NORAM-EMEA +20.0% (20% of Group

volumes)

• Freight rates declined marginally. We expect stable toslightly declining rates in 2006. Market volumes shouldgrow 4-5%

• Stiff competition on busiest trade lane put pressure on themargins. Ongoing customer’s pressure will not ease.

8

Performance per division: Ocean Freight

• Turnover growth: 14.3%

• Volumes growth: 12%. Market growth estimated at 10.5-11.0%

• Outperformed market growth in most trade lanes. In particular Asia-Europe grew 20% (market 13.5%)

• Asia-Europe-Asia is the strongest trade lane with 30% of the Group volumes in oceanfreight

• Transpacific and transatlantic contribute 18% and 14% respectively to the Group volumes

• Sharp freight rates decline in Q4 in anticipation of new capacity expected to come in

• We estimate market growth of about 10% for 2006 and rates to decline further but at a slower pace

Ocean Freight

• Central procurement andcapacity management (CPC)

• Strategic partnershipwith leading carriers

• NVOCC Pantainer Express Line• Intermodal services



9

Performance per division: Supply Chain Management• Turnover growth: 22.7%

• Buoyant business conditions in Latam:• Major contract awarded from a mobile phone manufacturer• Increased penetration into large regional accounts

• Excellent business wins also in Noram from major Global Accounts. Strong performance in O&G.

• Full year impact of Grampian acquisition

• SCM is primarily a strong complimentary service to lever currentand perspective customer base volumes in Airfreight and Oceanfreight within industry verticals

• Execution consistent with “asset light” model

Supply Chain Management

• Lead Logistics Provider (LLP) • Competence in key industries• Innovative IT applications• Panprojects



10

Industry Verticals: Highlights

Automotive: Meeting just-in-sequence and just-in-time requirements

Hi-Tech: Network is key

M. Ribar, CFOIndustry Verticals

Retail and Fashion: Matching Seasonality and Short Delivery Periods

Healthcare: Safeguarding the integrity of products

11

Oil and Gas: A truly globalized industry

O&G operationsby Panalpina

HoustonHouston

SingaporeSingapore

AberdeenAberdeen

Global centersof the industry

DubaiDubai

Janco Oilfield ServicesSingapore 2005

Janco Oilfield ServicesSingapore 2005

Overseas Shipping Group, Oslo 2005

Grampian, Aberdeen 2004

Overseas Shipping Group, Oslo 2005

Grampian, Aberdeen 2004

Acquisitionsby Panalpina

Industry VerticalsM. Ribar, CFO

12

Management Incentive Plan

• Preferential allocation during the IPO to about 67 managers within the Group

• Ongoing Management Incentive Plan involving about 220 people

• Participants will be entitled to buy Panalpina shares at a discount

• The amount of shares will be capped at an amount equivalent to the paid bonus

• Each share comes with a 6 year call option and a 3 year vesting period

• Some impact on personnel expenses to be expected

M. Ribar, CFOManagement Incentive Plan

3-7 April 2006

Financials

14

Financial Highlights

• 2004 and 2005 figures impacted by the accounting fraud announced on Jan 4th, 2006. Number base for 2006 not affected.

• We met 2005 financial guidance as:

• Net Forwarding Revenue grew by 13.8%

• GP/NFR margin was 20.2%

• EBITDA1/GP margin was 14.4%

• NWC/GFR at 5%

• Personnel expenses outgrew GP increase as a result of one time costs

• Net Working Capital Intensity at 5% thanks to a better payables management

• Net Cash Flow from Operating activities improved to CHF 142 Mio, +318% over 2004

Monika Ribar, CFOFinancials

(1) Excluding impact of gain on sale of assets

15

Historical Overview (1995-2005)Monika Ribar, CFOFinancials

EBIT MarginGross ProfitGross Revenue Net Revenue Net Income Margin

9,153 9,519 10,402 9,915 11,015 11,586 12,042 12,463 12,344 13,224 13,583Headcount

0

1'000

2'000

3'000

4'000

5'000

6'000

7'000

8'000

9'000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

CH

F m

0%

2%

4%

6%

8%

10%

12%

14%

% M

argi

n on

GP

16

Summary Consolidated Income Statement (2003-2005)2003 20043 2005

Net Forwarding Revenue 3rd 5’362

3.6%

Gross Profit (reported) 1’238.9 1’327.2 1’407.7

-0.7%

23.1%

195.4

195.1

15.8%

138.1

139.3

11.2%

98.1

6’120 6’962

% Growth 14.1%. 13.8%

% Growth 7.1% 6.1%

GP* margin on NFR 21.7% 20.2%

EBITDA (reported) 198.1 214.2

EBIT2 margin on GP 10.7% 10.9%

Consolidate Net Earnings 100.0 120.3

EBIDTA1 (normalized) 195.2 202.2

EBITDA1 margin on GP 14.7% 14.4%

EBIT (reported) 139.0 165.6

EBIT2 (normalized) 141.9 153.9


(1) Excluding impact of gain on sale of assets(2) Excluding impact of gain on sale of assets and impairment of financial assets(3) 2004 was restated as per company announcement on Jan. 4th, 2006

17

Net Forwarding Revenue by SegmentsNet Revenue Split by Region

(CHF in millions)

North AmericaCentral & South AmericaEurope / Africa / ME / CIS Asia/Pacific

Net Revenue Split by Business Segment(CHF in millions)

Air Ocean Supply Chain Management

• APAC and NORAM shares grew while EMEA came off almost 1%. LATAM relatively stable.

• Air dropped below 50% again. Ocean basically flat at 34.5% from 34.3%. Impact of fuel surcharge is slightly inflating Air revenue’s share.

• Supply Chain Management growth in in 2004 and 2005 proves that “Asset Light” business model works as supported by strong management skills and IT platform

0

1'000

2'000

3'000

4'000

5'000

6'000

7'000

2003 2004 2005

14.9%12.3%

8.5%16.7%

16.7%8.9%

19.4%

20.0%

0

1'000

2'000

3'000

4'000

5'000

6'000

7'000

2003 2004 2005

13.5% 10.7%

14.3%11.5%

23.0% 22.7%

50.7% 50.4%49.1%

35.2%34.4% 34.5%

14.1%15.2%

16.4%

57.0%56.6%

22.6%21.5%

22.1%9.7%9.9%

9.5%10.7%

11.2%11.8%

53636120

6962

57.4%


18

Regional Overview – Gross Profit Development

In C

HF

mio

.

1320

1330

1340

1350

1360

1370

1380

1390

1400

1410

1420

FY 2004 EMEA NORAM LATAM APAC FY 2005

1’327

22

29

11

19 1’408

2.8%

11.9%

9.9%

9.7% 6.1%


19

• 2005 Operating Costs grew 5.8% mainly driven by personnel expenses.

• 2005 Operating Costs as a percent of GP decreased by 20 bps to 89.1%.

• Personnel Expenses increase due to:

– Approx. 5 Mio from currency impact

– Approx. 8 Mio one time costs in the US

– Approx. 2 Mio related to ESOP

– Approx. 10 Mio of statutory provisions in several countries

– Headcount increase of 2.7%

• We estimate PGP could decrease by 30 bps this year due to additional productivity gains

Other operating

Operating Cost Development

Personnel

Operating Costs(CHF in millions)

0

200

400

600

800

1'000

1'200

1'400

2003 2004 2005

59.3% of GP

59.0% of GP

59.9% of GP

88.8% of GP1,100

1,1851,254

735

309

56

782

350

53

844

362

4889.3% of GP

89.1% of GP

24.9% of GP26.3% of GP

25.7% of GP13.3% 3.4%

6.4%7.9%

(9.4)%

(5.4)%

Other operating costs D & A


20

Note: EBIT adjusted for impact of gain on sale of assets and impairment of financial assets

Profitability Development by RegionGross Profit Margin by Region EBIT Margin by Region

19.2%19.4%

31.9%

23.6%

18.5%18.3%

28.7%

22.1%

17.8%18.1%

26.1%

20.3%

Europe / Africa / ME / CIS

Asia / Pacif ic Central & South America

North America

(3.0%)

(9.9%)

35.5%

12.6%

1.2%

13.5%

33.2%

7.6%

-4.0%

9.0%

32.7%

10.5%

Europe / Africa / ME / CIS

Asia / Pacif ic Central & South America

North America

(As a % of Gross Profit)(As a % of Net Forwarding Revenues)


• Regional margins not comparable (differences in revenue sharing agreements)

• Rates development in the last 3 ½ year and the impact of fuel surcharge have eroded GP margin. Stiff competition on some trade lanes also played a role.

• Sharp recovery in EMEA EBIT margin due to absence of extraordinary costs incurred in 2004 (16 Mio)

20052003 2004 20052003 2004

21

Balance Sheet & Cash Flow Summary2003 20043 2005

332.4

32.2

300.2

263.1

4.0%

740.1

1’486.8

22.7%

246.6

42

36.6

241.0

31.2

209.8

418.7

5.0%

857.9

1’830.7

22.1%

210.0

356.2

4.8%

787.9

1’574.3

21.1%

21112

Cash and cash equivalents (1)

Borrowings

Net cash (debt)

Net Working Capital (2)

% of gross revenue

Total shareholder’s equity

Total assets

% of gross revenue

Net Capital Expenditures

(1) Including financial assets held for trading(2) Net working capital defined as current assets net of cash and equivalents minus current liabilities net of interest

bearing debt(3) Impacted by 2004 restatement

In CHF mio.


22

Receivables & other assets

Breakdown of Assets(CHF in millions)

0

200

400

600

800

1'000

1'200

1'400

1'600

1'800

2'000

2003 2004 2005

13.4% of GR

13.6% of GR 15.1% of GR

22.7% of GR21.1% of GR

22.1% of GR1'487

1'5741'831

275

879

332

311

1,016

247

334

1,255

241

4.2% of GR 4.2% of GR 4.0% of GR

5.1% of GR

3.3% of GR

2.9% of GR

Non-current assets Liquid funds

Note: GR = Gross Revenue

Borrowings


• Very low tangible fixed asset intensity consistent with our strategy

• Capital structure is extremely solid; in line with peer freight forwarders

• Dividend Policy: target payout ratio of approximately 30-40% of the annual profit

Key Assets & Capital Structure Strategy

Payables, Accruals & Provisions

Retained Earnings & Minorities

Breakdown of Liabilities(CHF in millions)

0

200

400

600

800

1'000

1'200

1'400

1'600

1'800

2'000

1'487 1'574

1'831

690

50 32

715

737

5037

750

2003 2004 2005

11.2% of Cash Opex

10.4% ofCash Opex

942

31 50

808

11.7% ofCash Opex

Share Capital Borrowings

Note: Cash Opex = Gross Revenue - EBITDA

23

Free Cash Flow Development

-80

-60

-40

-20

0

20

40

60

80

100

120

140

FCF FY 2004 OperatingActivities

WorkingCapital

Finance andTax

InvestingActivities

FCF FY 2005

(78)

18

99

(9)

91 121

In C

HF

mio

.


24

Working Capital - OverviewNet Working Capital Intensity

NWC NWC Intensity (%)

• Overall measures to improve working capital begin to yield results• The improvement in NWC Intensity stemmed from a better Payables management. Receivables

suffered from year end spike. • No deterioration in credit quality

5.4%

4.8%

4.0%

3.5%

5.6%

5.0%

5.1%

0

50

100

150

200

250

300

350

400

450

500

12/05 9/05 6/05 3/05 12/04 12/03 12/02

CHF

Mio

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%


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