Download Business Review 2015

Business Review 2015/ 1 BUSINESS REVIEW 2015 Business Review 2015/ 2 Business Review 2015/ 3 OUR MISSION EXPERT CARE Wrist Ship Supply is the From offices around the globe world’s leading ship and all Wrist staff takes pride in offshore supplier of provisions making it easy for customers to and stores with a market share receive their supplies – where above 7%. and when requested – effi- ciently and at the best possible Wrist offers a global 24/7 price. service, including handling of owners’ goods, shipping, Our mission is to provide airfreight and related marine expert care to each ship and services that meet the demands offshore location. of international organisations as well as local businesses. Wrist branches Representative oces Haugesund Oslo Peterhead Aalborg Aberdeen Copenhagen Great Yarmouth Esbjerg Montreal London Skagen Vancouver Rotterdam Hamburg Den Helder Seattle Portland Marseille New York San Francisco / Oakland Piraeus Los Angeles Algeciras Houston Jacksonville Las Palmas Guangzhou Corpus Christi Dubai Shenzhen Mobile New Orleans Manilla Male Johor Bahru Singapore Singapore Business Review 2015/ 4 Business Review 2015/ 5 SIGNIFICANT STEPS Net sales Operating margin (EBITDA) Return on invested capital DKKm (%) (%) Acquisition of Garrets to expand Provision Management services Wrist acquired Garrets International in January 2016, a leading provider of provision management services to over 1,000 ships worldwide. Merged with Wrist’s SeaStar subsidiary Garrets will strengthen the global proposition to customers, deploy more re- sources for the development of service tools for the crew, enhancing welfare on board. Leading Scottish offshore supplier acquired North Sea Stores, Aberdeen's oldest stores supplier, joined Wrist in May 2015. The experienced staff joined the Strachans operation in Aberdeen. Expanding newbuilding services During 2015, Wrist stepped-up initial deliveries to shipyards, primarily in the Asian region, offering ship management companies and ship-owners the capabilities, infrastructure, experience and competitive prices of the world’s largest ship and offshore provider. Dutch offshore supplier joined Wrist After more than 25 years of close coopera- tion, leading Dutch offshore supplier Den Helder Stores was acquired in November 2015 as another step in Wrist’s growth strat- egy, offering a global value proposition in both the offshore and shipping segments. Continued development of global infrastructure Wrist continued developing and improving its storage and warehousing infrastructure in order to increase the operational efficiency, including new facilities in Algeciras, Spain, in Corpus Christi in the Mexican Gulf and in Peterhead in Scotland, allowing for additional volumes and optimisation of processes. Business Review 2015/ 6 Business Review 2015/ 7 During 2015 Wrist further consol- idated its position as the world’s largest supplier to ships and offshore locations. Volumes and sales increased more than market growth We achieved a substantial growth in volumes supplied to ships, but saw decreased demand from the badly hit offshore market. Based on our constant focus on customer service, responsiveness to changes in customer demand and competitive sourcing a substantial growth in our supplies to ships more than offset the negative impact from the headwind in the offshore oil & gas industry. Actually, Group revenue increased by 1% in local currencies and even 10% in our reporting cur- rency, reaching DKK 3.7bn. ROBERT KLEDAL CEO Operating "We achieved a substantial growth profits increased in volumes supplied to ships, Due to improved efficiency in all aspects of our operations we but saw decreased demand from increased our gross profit rate from the badly hit offshore market." 24.1 percent in 2014 to 25.4 percent in 2015. The operating profit (EBITDA) advanced by 9% from DKK 209m in 2014 to DKK 228m Innovation in Further investments in 2015, and the operating margin remained at a healthy level of 6.2 service offerings in operational percent for 2015. Wrist continued to seek solu- capabilities tions that improve its range and infrastructure of service offerings. We intro- Business platform We continued developing our duced bundled services to ship expanded through global operational capabilities customers, including provision and infrastructure in order to acquisitions management and optimisation improve quality and respon- In order to expand our offering of the last mile logistics, ena- siveness in our customer service further and capture opportunities bling savings in the operations and at the same time to increase in the market, Wrist acquired budget of the ships. Another our operational efficiency. businesses in Aberdeen in the UK initiative was additional in- Development and improvement and Den Helder in the Nether- vestments in ‘Ice-Box’ contain- of storage and warehousing lands, both contributing positive- er inlets, a concept enabling facilities included new facilities ly to sales as well as earnings. stable temperature for several in Algeciras, Corpus Christi and January 2016 we were pleased to days without a power source, Peterhead, allowing for addition- announce our acquisition of Gar- introduced to customers in the al volumes as well as process rets International which provides North Sea, US Gulf and Middle flow optimisation. Enhanced provision management services to East. Further, we initiated the quality management systems SOLID PERFORMANCE more than 1,000 ships worldwide. implementation of a new and were implemented in more loca- Together with Wrist’s subsidiary more efficient procurement and tions, allowing e.g. higher levels SeaStar Management Garrets will stock management tool for ships of quality accreditation. Further, CONTINUED IN 2015 strengthen the global proposition operating on provision manage- in 2015 we initiated the roll out to customers and provide an en- ment contracts. hanced ability to support welfare of a new, global business support on board as well as more resourc- system, building the platform for es for the development of service additional digitalised customer tools for the crew. and vendor solutions. Business Review 2015/ 8 Business Review 2015/ 9 THE SHIP AND OFFSHORE SUPPLY MARKET The key determinants of the ship negatively affect the offshore sec- Industry trends and offshore supply market are tor as more oil could put further Transparency and budget control the world fleet developments, pressure on oil prices. are key priorities for the custom- fleet composition and offshore ers, and in the current market oil and gas exploration and Customer demands ensuring optimum efficiency is installations. Wrist and other suppliers bring business-critical. In general, the The market continues its ex- together the interests of cus- interest for e-business compati- pansion, and an annual global tomers in the shipping and bility has increased as have re- market growth of 3 to 4 percent offshore industries on one side quests for quotations and orders is expected in the medium term. and manufacturers and onshore submitted electronically. In the short term the market is wholesalers on the other. The Thus, main trends affecting the expected to grow moderately due customers require consolidation supply industry include: to a negative growth in the off- of broad product ranges, a high shore sector, where especially the service level, and fast delivery • Shipping industry North Sea is experiencing layoffs within short and dynamic time consolidation and reduction in exploration limits, customised logistical • Stronger focus on expenditure. The prospect of the service solutions and e-business operational savings dry bulk market and the contain- offerings. The ability to consoli- er market is depressed after a date product deliveries, delivery • Professionalisation of prolonged period of overcapacity flexibility in logistics and handle procurement meaning that rates are at a low frequent changes in deliveries is • Digitalisation is increasing, level. The tanker market is the distinctive for ship suppliers. In requiring e.g. efficient sys- primary bright spot where rates addition, customers in general tem integration solutions were healthy for the better part of aim to reduce their operational 2015 and is expected to stay at a costs of the ships and bundled • More and more owners sustainable level in 2016. Market services, including provision are entering into provision growth is expected to be highest management and optimisation management and/or ship in the Asian ship supply market. of the last mile logistics, enables management agreements such optimisations. The past year also saw many • The recent decline in oil The key characteristics of uncertainties for world trade, as Ship management companies prices has stemmed down there is still turmoil in Syria and operate an increasing number the demand for drilling rigs – and current trends within – Iran, and the situation with Russia of vessels, and consolidation of and seismic, offshore sup- the shipping and offshore industry following the Crimea conflict with ship owners and managers is port and other specialised Ukraine have hindered the flow of progressing – in particular among vessels corresponds very well to Wrist’s business large corporate entities. Concur- goods in these regions. The effect • Increasing customer demand rently, high standards for suppli- model, focusing on the procurement in the short term and medium for certification (HACCP, ers emerge, and a professional term is still unknown. The

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