Annual
Report
2022
For as long as there have been people, there has been trade. And
for as long as there has been trade, people have interacted – and
learned – from each other. Together, we have developed tools, tech-
nologies and talents that accelerate growth through times.
From Scandinavia, we pioneered trade over the seas. For generations,
global trade expanded wealth across the globe by lowering prices
of goods, lifting wages and accelerating growth. If trade stops, the
world stops.
Previous generations set sail, and throughout our 160 years in opera-
tion we have gone from wooden ships to steel ships to partnerships.
Today, we all know that the world’s resources are limited. We chal-
lenge old rules with fresh ideas. As a responsible global company, we
explore new solutions to create a sustainable and competitive edge.
We pledge to be part of the solution to our time’s biggest challenge,
the climate change. We do this through innovation and imagina-
tion, exploring new ways to create value while driving our operations
towards zero emissions.
We ship our customers’ cars and machinery from continent to conti-
nent, from the manufacturers’ plants to the driveway in front of your
house. The infrastructure and logistics we provide is a chain built
through tight customer dialog. At the forefront of everything we do
is safety, quality and cutting emissions.
We have ships and infrastructure the size of cities. We have logistics
solutions and software that fit in your hand. We are a company with
employees spread across the world. We care about all because none
of us can do the things we do alone.
We will lead the way in
transforming shipping
and logistics
Contents →Contents →
3
Contents →
Wallenius Wilhelmsen – Annual Report 2022
About the report
This is Wallenius Wilhelmsen ASA’s annual report. It is approved by the Board of
Directors as signed in the Responsibility Statement. This report gives an account
of how we create value for our shareholders and other stakeholders along the four
pillars of People, Planet, Prosperity and Principles of governance.
The report complies with statutory requirements in Norwegian legislation and the
requirements related to the board of directors’ report are fulfilled in various sections
of the report. The report shall act as Wallenius Wilhelmsen’s Communication on
Progress according to the requirements from UN Global Compact and our report-
ing as required by the Norwegian Transparency Act. It has been prepared in accor-
dance with the GRI Standards and SASB Maritime and Road Transport standards.
The sustainability reporting should be read in combination with the GRI index to get
a full overview. In this report, we also continue to implement the recommendations
of the Task Force on Climate-Related Financial Disclosures, providing our share-
holders and other stakeholders with information on our climate-related risks and
opportunities. The reporting boundaries for the sustainability reporting are chal-
lenging given the complexity of our value chain, joint ownership and operational
arrangements. We strive to report consistently and accurately.
•
Unless otherwise stated, Scope 1 GHG emissions include all owned and
operated vessels and facilities, including ships on long-term and short-
term charter. Direct CO
2
emissions from our road transport service, Keen,
included for 2022, but not for previous years.
•
Scope 2 emissions are included for owned locations for logistics and
selected site offices.
•
Waste data is reported from owned vessels and facilities under operational
control.
•
Health and safety incident data are reported for our owned vessels and
those on bareboat charter, and landbased facilities under operational
control.
The consolidated financial statements and accompanying notes in this report have
been prepared in accordance with the International Financial Reporting Standards
(IFRS), as adopted by the European Union, effective December 31, 2021.
The scope of the reporting is Wallenius Wilhelmsen’s global operations for the
period January 1 to December 31, 2022.
4Wallenius Wilhelmsen – Annual Report 2022
Contents
About the report 3
Wallenius Wilhelmsen at a glance 5
A global leader in vehicle transportation and logistics 6
We are navigating towards a low carbon future 8
Targets foster results 10
AI-driven voyage to cut fuel emissions 12
Sailing beyond fossil fuels 14
Key figures 16
Corporate structure 17
Board of directors 18
Management 19
Words from CEO 21
Message from the board 25
Our Strategy 26
2022 in brief 28
Financial review 29
Financial position and capital structure 31
Long-term financial targets and dividend policy 33
Shipping segment 34
Logistics segment 35
Government segment 37
Market development and outlook 38
Key risk exposures 40
Events after the balance sheet date 43
Dividend for the financial year 2022 43
Prospects 44
People 45
Health, safety and wellbeing 46
Human and labor rights 52
Diversity, equity and inclusion 55
Training & Development 59
Planet 61
Greenhouse gas emissions (GHG) and climate risk 62
Biodiversity 71
Air quality 74
Waste management 75
Prosperity 77
Innovation 78
Quality of service 83
Sustainable consumption 86
Sustainable supply chain 87
Tax practices 89
Sustainable finance 90
Principles of governance 91
Implementation and reporting on corporate
governance 92
The business 94
Equity and dividend 96
Equal treatment of shareholders 97
Freely negotiable shares 97
General meeting 98
Nomination committee 99
Board of directors – composition and independence 100
Board responsibility and work 101
Remuneration of the Board of Directors 103
Risk management and internal control 104
Salary and other remuneration for executive
personnel 106
Information and communication 107
Takeovers 108
Auditor 108
Financial statements 109
Sustainability statements 214
Sustainability Performance Data 215
EU Taxonomy reporting 219
GRI Index 221
SASB Index 229
TCFD Index 230
Responsibility statement 231
Auditor’s report 234
Wallenius Wilhelmsen
at a glance
As a responsible global company, we steadily challenge old
ways and continue to explore new ideas and solutions for a
sustainable future. We remain strongly committed to our carbon
reduction strategy, and constantly strive to create value while
reducing our environmental footprint. We pledge to be part of
the solution, work with partners, to drive sustainable change.
Contents →
6
Wallenius Wilhelmsen at a glance
A global leader in vehicle transportation and logistics
Contents →
Wallenius Wilhelmsen – Annual Report 2022
A global leader in vehicle
transportation and logistics
Wallenius Wilhelmsen is a global leader in vehicle transportation and
logistics, serving customers from their manufacturing plants all the
way to the end-consumers. We strive to be the preferred partner for
our customers’ logistics infrastructure, working with them to build
resilient, digitalized and decarbonized logistics solutions.
We standardize and streamline processes through technology, with a
focus on automation, robotization, and better optimization. The ambi-
tion is that most decisions should be data-driven.
terminals handling more
than 3.1 million units
services and processing
centers, processing more
than 5.1 mil vehicles
8
66
125
vessels transporting
3.65 million units
7
Wallenius Wilhelmsen at a glance
A global leader in vehicle transportation and logistics
Contents →
Wallenius Wilhelmsen – Annual Report 2022
We provide a comprehensive land-based network of logistics services
through eight terminals, 11 inland distribution networks and more than
66 services and processing centers around the world. Our offerings
include technical services, inland distribution and terminal handling.
We even work in-house at the manufacturers’ plants, preparing vehi-
cles for the end user. We work with major manufacturers such as
BMW, Caterpillar, Derco, General Motors, John Deere, Hyundai, Kia
Motors, Land Rover, Mercedes Benz, Stellantis USA and Toyota. In 2022,
we received numerous awards from our world-renowned custom-
ers, including The Stellantis Supply Chain 2022 award and the silver
sustainability rating by EcoVadis.
Safety, security and compliance are at the core of everything we do,
and it is a top priority for management. We work to foster a true safety
and compliance culture for the safety of our colleagues, the trust of
our customers, and the benefit of the planet.
At sea, 125 vessels operate 15 trade routes across six continents. Our
fleet typically has a higher average number of hoistable decks and
stronger ramp capacity than most, allowing us to carry multiplex cargo.
Wallenius Wilhelmsen is listed on the Norwegian Stock Exchange (OSE:
WAWI) and is headquartered in Oslo, Norway with 8,875 employees in
29 countries.
2022
The Stellantis
supply chain award
John Deere
sustainability award
EcoVadis Silver
sustainability rating
CEO of ARC
the United Seamen’s
Service award
Admiral of the
Ocean Sea award
15th year in a row
John Deere
partner status
8
Wallenius Wilhelmsen at a glance
We are navigating towards a low carbon future
Contents →
Wallenius Wilhelmsen – Annual Report 2022
We are navigating towards a low
carbon future
Shipping exists because of global trade, and there is a mutual depen-
dency. Our industry is responsible for carrying approximately 90
percent of all goods. Shipping emits much less carbon than air and
land-based transportation per tonne-km. Still, the industry contributes
to the society’s largest challenge: Climate change. Shipping constitutes
3 percent of all CO
2
emissions globally, and at Wallenius Wilhelmsen,
nearly all our carbon emissions come from the 125 vessels we operate.
Wallenius Wilhelmsen and its customers face increased pressure to
reduce its carbon footprints. The automotive industry and we are rapidly
transforming with the rise of electric vehicles and stricter emission
regulations. Our industry will transform more over the next ten years,
than what it has done over the last 100 years. We will shape this trans-
formation! The company strategy has four key strategic goals, one of
which is to introduce one net-zero emission end-to-end service by 2027.
9
Wallenius Wilhelmsen at a glance
We are navigating towards a low carbon future
Contents →
Wallenius Wilhelmsen – Annual Report 2022
To meet the expectations and the objectives outlined in the Paris
Agreement, the industry is rapidly adjusting and changing. At Walle-
nius Wilhelmsen, we take ownership of this problem and we prioritize
solutions that reduce emissions, and transition to a zero emission
future. In the long run, environmental and economic interests will be
aligned: Only companies that contribute to solving the climate chal-
lenge and provide goods and services that society needs in a sustain-
able manner will prevail and prosper.
The energy transition to zero emissions will be a step-wise journey:
2024
Carbon-neutral
start
Net-zero
emission piloting
Zero
emission scaling
2027
2030+
10
Wallenius Wilhelmsen at a glance
Targets foster results
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Wallenius Wilhelmsen – Annual Report 2022
Targets foster results
Targets for emissions reductions are set, results are underway. Two
years ago, Wallenius Wilhelmsen set an ambitious goal to reduce our
carbon intensity in shipping by 27.5 percent by 2030, compared to
2019 levels. This target builds on our long-standing efforts to improve
energy efficiency from which we have reduced our carbon intensity
by more than 33.6 percent from 2008 to 2019.
33.33
gCO
2
e/t*km
50.20
gCO
2
e/t*km
2008 2019 2030
24.16
gCO
2
e/t*km
-27.5%
-33.6%
11
Wallenius Wilhelmsen at a glance
Targets foster results
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Wallenius Wilhelmsen – Annual Report 2022
We have already made significant progress towards our 2030 target.
We have implemented a number of initiatives to reduce our carbon
footprint, technical, operational and asset replacement initiatives. It
includes energy efficiency initiatives, exploring alternative fuel options
and optimizing our routes and operations. We also launched a financial
framework that will be used to link new financings with sustainability
objectives. Goals, targets, numbers are key to ensure we deliver results.
We are also committed to transparency. We regularly report our prog-
ress towards our sustainability targets to relevant stakeholders. We
continue to work closely with our customers, suppliers and other
stakeholders to drive sustainable change. To learn more about how
we work to decarbonize and reduce our environmental impact, see
the Planet chapter.
The different futures that could lie ahead:
Source: United Nations
+1.5°C +2.0°C +3.0°C
63%
+97%
16%
+62%
3%
Probability of an ice-
free Arctic summer
in any one year
Average length of
drought (months)
Increase in area burned
by wildfires in average
Mediterranean summer
2 4 10
+41%
12
Wallenius Wilhelmsen at a glance
AI-driven voyage to cut fuel emissions
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Wallenius Wilhelmsen – Annual Report 2022
AI-driven voyage to cut fuel
emissions
Reducing emissions from our vessels is crucial in making a contribu-
tion to cutting green house gases. We have implemented a number
of initiatives to reduce our carbon footprint, including optimizing our
routes. It also includes evaluating factors such as hull and machinery
conditions, having detailed insight into wind, waves, ocean currents
and knowing how cargo weight impacts carbon emissions. We have
access to data predicting speed, engine power and fuel consumption
and we correlate these with weather prognosis.
13
Wallenius Wilhelmsen at a glance
AI-driven voyage to cut fuel emissions
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Wallenius Wilhelmsen – Annual Report 2022
In 2022, we were the first global shipping company to equip five of
our owned vessels with an AI-tool to optimize our deep-sea voyages,
60 more will get this solution already in Q1 2023. By installing sensors
on these vessels and using cloud technology, we are able to moni-
tor vital operational parameters such as fuel consumption, shaft
power, speed and electricity consumption. The team from RaaLabs,
the Oslo-based company owned by Wilh Wilhelmsen, developed and
delivered the data acquisition infrastructure to our vessels. This data
is then run through a complex mathematical model, which is aided
by AI technology from the Athens-based company DeepSea Technol
-
ogies, ultimately providing the vessel captain with detailed instruc-
tions regarding optimal route and vessel speed. This AI tool helps us
predict sailing conditions with great precision when correlated with
weather forecast prognosis updates.
Our estimates indicate that this approach will reduce our fuel consump-
tion by up to 10 percent on our 65 vessels. No humans, no matter how
much sailing experience, can compete with these instructions.
Technology is the most effective emissions-cutting tool we have at
our disposal so far. We have invested in IT and cloud infrastructure
over several years to obtain data that is relevant to cutting back fuel
consumption. We will continue to invest in technology and explore new
solutions to reduce emissions and achieve our sustainability targets.
“It is a significant step on our
way towards zero emissions.”
Geir Fagerheim
SVP Marine Operations at Wallenius Wilhelmsen.
14
Wallenius Wilhelmsen at a glance
Sailing beyond fossil fuels
Contents →
Wallenius Wilhelmsen – Annual Report 2022
Sailing beyond fossil fuels
At Wallenius Wilhelmsen, we understand that to contribute to the Paris
Agreement and reduce our carbon footprint, we need to collaborate
with customers, researchers and other partners to mobilize the neces-
sary technology and infrastructure. One of the biggest challenges
facing the shipping industry is the question of which fuel to use for
new vessels not yet built.
The Orcelle Wind project is a crucial part of our fleet decarbonization
strategy. In 2022, we secured EUR 9m in funding from the Horizon
Europe award, which is a clear signal from the EU that they believe
in the Orcelle Wind concept and are willing to support it. The project
aims to close the gap between the concept and reality of the world’s
first full-scale deep-sea wind-powered RoRo vessel.
15
Wallenius Wilhelmsen at a glance
Sailing beyond fossil fuels
Contents →
Wallenius Wilhelmsen – Annual Report 2022
Academic and technical partners, along with select customers, are
key to running such an innovative and technologically challenging
project. The partnership model brings more talent to the table.
We believe we will see three waves of fuel transition: biofuel, methanol
and ammonia. We are currently introducing biofuel, methanol within
five years, and ammonia is likely to be at least ten years out. Green
certificates and carbon credits will be part of the solution today. To
succeed, we need trust from customers that we can deliver a real
green service, access to green fuels in key ports, competitive pricing
and accurate customers’ emissions data. We need a much closer
partnership with customers who are also on this same journey. We
will invest in making this happen!
We want to be “shapers,” not “adapters” in our industry. Wallenius
Wilhelmsen will continue to work even closer with our customers,
suppliers, and other stakeholders to drive change and achieve our
targets. Together, we can make a real impact on society’s largest
challenge – climate change.
“After receiving the EU funding, we
found that our application received 14,5
points out of a total 15 points. We can
safely say that the EU believes in the
project and wants to see it realized.”
Jon Tarjei Kråkenes
Commercial and operational project manager for
the Orcelle Wind project at Wallenius Wilhelmsen
16Wallenius Wilhelmsen – Annual Report 2022
Wallenius Wilhelmsen at a glance
Key figures
Contents →
Key figures
Key figures consolidated accounts
USD million unless otherwise stated 2022 2021 2020 2019 2018
Income statement
Total income 5,045 3,884 2,958 3,909 4,065
Operating profit before depreciation,
amortization and impairment (EBITDA) 1,548 830 473 805 601
Operating profit/(loss) (EBIT) 931 306 (84) 358 244
Profit/(loss) before tax 829 199 (306) 112 78
Profit/(loss) for the period 794 177 (302) 102 58
Balance sheet
Non-current assets 6,242 6,315 6,391 6,747 6,204
Current assets 2,151 1,479 1,237 1,048 1,210
Total assets 8,394 7,794 7,628 7,796 7,414
Equity – owners of the parent 3,153 2,539 2,391 2,678 2,647
Equity – non-controlling interests 355 266 224 243 228
Interest-bearing debt 4,087 4,128 4,081 4,044 3,584
Key financial figures
Net cash flow provided by operating activities 1,297 623 615 749 749
Liquid funds at December 31 1,216 710 654 398 484
Current ratio 1.8 1.1 1.1 1.0 1.1
Equity ratio 42% 36% 34% 37% 39%
Yield
Return on capital employed 12.9% 4.5% (1.3)% 5.0% 3.7%
Key figures per share
Basic and diluted earnings per share 1.60 0.32 (0.68) 0.22 0.12
EBITDA per share 3.66 1.96 1.12 1.9 1.42
Average number of shares outstanding (thousand) 422,451 422,399 422,360 422,326 422,974
Market price at year end (NOK) 97.05 50.60 23.20 21.82 29.70
Market price high (NOK) 103.00 50.95 28.40 32.05 65.00
Market price low (NOK) 44.86 20.80 7.75 19.38 27.90
Dividend paid per share (USD) 0.15 0.00 0.00 0.12 0.00
18Wallenius Wilhelmsen – Annual Report 2022
Wallenius Wilhelmsen at a glance
Board of directors
Contents →
Board of directors
Rune Bjerke
Chair of the board
Extensive career in international energy
and banking corporations in Norway,
most recently as CEO of DNB
Previously: CEO at Hafslund, CEO at
Scancem International, advisor at the
Norwegian Ministry of Petroleum and
Energy, city commissioner of finance in
the city cabinet of Oslo
On the boards of amongst other Norsk
Hydro, Schibsted and Reitan Retail
Degree in economics, University of Oslo,
a master’s degree in public administra-
tion, Harvard University
Margareta Alestig
Board member and
Chair of the audit committee
Extensive experience from the financial,
shipping and logistics industries
Previously: CFO at Broström AB, CFO at
JCE Group, Deputy Managing Director at
Sjätte AP-fonden (AP6) and Swisslog AB
Chair of the Board in Erik Thun AB,
Board member in Inission AB, Tjörns
Sparbank, Svenska Fribrevsbolaget
and Brännehylte Lagersystem AB
MBA degree, University of Örebro,
Sweden
Yngvil Eriksson Åsheim
Board member
Long career in the maritime industry
and currently Managing Director of BW
LNG owning and operating one of the
world’s biggest fleet of LNG carriers and
floating regasification terminals (FSRUs)
Previously: Various positions at the
classification society DNV for a decade.
Joined Höegh Fleet Services in 2002 as
EVP of Höegh Autoliners responsible for
global operation and ship management.
Joined BW in 2010 and has had different
positions incl. LPG, LNG and oil tankers
On several boards, currently Director of
Board at BW Ideol
Master in marine engineering, the
Norwegian Institute of Technology (NTNU)
Anna Felländer
Board member
One of Sweden’s leading experts on the
effects of digitalization on the econ-
omy, society and businesses. Founder
and president anch.AI, a SaaS gover-
nance platform for responsible AI. Has
been engaged with responsible AI from a
policy, academic, organizational as well
as from a start-up perspective since 2016
Previously: Chief economist at Swed-
bank. Working for the Swedish govern-
ment 10+ years in numerous positions
Master’s degree in macroeconomics,
Stockholm School of Economic
Hans Åkervall*
Board member
Extensive experience as lead partner for
a diverse portfolio of large clients across
financing, manufacturing, and logistics.
Deep insight into audit, corporate gover-
nance, M&A and the capital market
Now on board of Rederi AB Soya
Previously: CEO of KPMG Sweden, Partner
in KPMG
Chartered accountant, bachelor´s
degree in business and economics,
University of Stockholm
Thomas Wilhelmsen*
Board member
Group CEO at Wilh. Wilhelmsen Hold-
ing ASA since 2010. Has held numerous
positions in the group, including group
vice president for shipping and regional
director for Europe in Ships Service
Has also been in charge of the family’s
investments in Australia. In addition to
holding directorships in several industry-
related companies and organizations,
he sits on the boards of many group and
family-owned companies
Master of arts in business, Heriot-Watt
University in Scotland. Has numerous
courses from other universities includ-
ing the program for executive leadership
from IMD, Switzerland
* Each of the two large shareholders have respectively nominated one observer in Wallenius Wilhelmsen’s board, namely Christian Berg and Peter Augustsson.
19Wallenius Wilhelmsen – Annual Report 2022
Wallenius Wilhelmsen at a glance
Management
Contents →
Management
Lasse Kristoffersen
Chief Executive Officer
Joined Wallenius Wilhelmsen in June
Previously: 15 years at Torvald Klaveness, 11 as
CEO. President of the Norwegian Shipowners’
Association, a decade at DNV in various manage-
ment positions including two years in New York
launching the Maritime Solutions Americas for
DNV
Vice Chair at DNV Group and DNV Foundation,
board member in Gard and International Cham-
ber of Shipping (ICS), Chair of SAYFR AS and of the
election committee at the Norwegian War Risk
Insurance Association
Master of science in naval architecture and
marine engineering from the Norwegian Univer-
sity of Science and Technology (NTNU). Has
completed IMD’s Senior Management Program
and INSEAD’s Executive Management Program
Torbjørn Wist
Chief Financial Officer
Previously: CFO and senior representative for
Norway in Scandinavian Airlines System (SAS).
Joined SAS from Telenor Group, where he for
13 years held senior positions in finance and
several board memberships. Earlier, worked 11
years in investment banking in New York and
London for Salomon Brothers, Merrill Lynch and
Greenhill & Co
Degree in business administration (Siviløkonom)
from the Ivey Business School at the University of
Western Ontario, Canada
Pia Synnerman
Chief Customer Officer
Joined Wallenius Wilhelmsen in 2021 as SVP Sales
to EMEA. Took on role as CCO in January 2023
Previously: Has for 27 years had various leader-
ship roles at Ericsson with 20 years in the sales
and commercial area working in Sweden, Middle
East, Russia, and South Africa
Master of science in mechanical engineering
from KTH Royal Institute of Technology, Stock-
holm, and executive programs at INSEAD Busi-
ness School, Thunderbird School of Global
Management and London Business School
Wenche Agerup
Chief People Officer
Joined Wallenius Wilhelmsen in November
Previously: Various roles in Telenor ASA from 2015
to 2022, including EVP Corporate Affairs and
General Counsel and Head of Board Governance
and Support in Singapore. Prior to joining Telenor,
16 years in Hydro ASA, including plant manager
in Årdal, Norway, project director in Australia and
EVP People and General Counsel from 2010 to
2015
Board member at Equinor ASA from 2015 to 2020
and Oslo Stock Exchange from 2012 to 2015,
currently a board member at Crayon ASA
A master’s degree in law from the University of
Oslo and an MBA from Babson College, Boston
20Wallenius Wilhelmsen – Annual Report 2022
Wallenius Wilhelmsen at a glance
Management
Contents →
Michael (Mike) Hynekamp
COO Logistics Services
Previously: Joined Wallenius Wilhelmsen in 2007
with first ten years at Wallenius Wilhelmsen
Logistics AS, 13 years at Mercedes Benz (Daimler
AG) in various roles in marketing, operations and
finance both in the US and in Europe. Started his
career with Ernst & Young LLP
MBA degree in corporate finance, Fairleigh
Dickinson University, executive education from
Columbia Business School, licensed CPA,
CGMA and holds a CTP accreditation as well as
a member of National Association of Corporate
Directors
Xavier Leroi
COO Shipping Services
Took on role as COO Shipping in November
Previously: Chief Customer Officer heading the
global group sales teams, customer experience
and strategies for the Wallenius Wilhelmsen
group. Has held numerous positions within the
group for 25 years. Also holds the position as CEO
of EUKOR Car Carriers Ltd
On the boards of ARMACUP Car Carriers Ltd and
PIRT Terminal
Master’s degree from the Graduate School of
Management in Grenoble, France where he
majored in finance. Has completed various
leadership programs, including the IMD Global
Leadership Program
Simon White*
Chief Digital Officer
Previously: Joined Wilhelmsen Lines in 1995,
various roles in commercial, operations and
technology in Australia, Norway and Belgium. Six
years in various roles at UECC from 2008 to 2014.
Returned to Wallenius Wilhelmsen Logistics in
2014 where he was SVP Trade & Operations and
Chief Commercial Officer for Wallenius Wilhelm-
sen Ocean before moving to his current role in
2019
Degree in business administration, University of
Technology Sydney
*Left Wallenius Wilhelmsen in February 2023
Words from CEO
“Our 2022 financial results were rock solid. This lays the founda-
tion for a robust position – financially and strategically – to lead
the transformation of shipping and logistics towards the goal of
zero emission. I am particularly proud of how our people handled
the situation during this year: The pandemic subsided, but timely
delivery of cargo was disrupted, severe supply chain crunches
happened. Cargo had to be re-routed, we planned and replanned.
Customer dialog and people relationships became more crucial
than ever. We are well positioned for the future! And we have a joint
mission: Driving our operations towards zero emission.”
Contents →
22
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Wallenius Wilhelmsen – Annual Report 2022 22
Words from CEO
Contents →
Wallenius Wilhelmsen – Annual Report 2022
During the first six months as CEO, four areas have surfaced as key priorities for
my watch at Wallenius Wilhelmsen:
•
Bring net-zero emission service to customers by 2027
•
Make Wallenius Wilhelmsen a data and technology-driven company
•
Make every employee a rock star of their own career
•
Make safety, compliance, diversity and inclusion our competitive advan-
tage
These priorities are embedded in the updated corporate strategy that we launched
in January 2023. My ambitions for Wallenius Wilhelmsen are hefty, but I know we
have what it takes to deliver with the support of our great team. And we will invest
to make it happen.
The war in Ukraine
We cannot talk about 2022 without mentioning the Russian invasion of Ukraine.
The Ukrainians experience trauma and pain every day. As a responsible company,
we quickly moved to ban cargo going to Russia and we rerouted cargo to avoid
breaching international sanctions. We also decided to close our office in Russia,
while taking care of our local team in the process. As a Norwegian company, we
followed the measures decided by the Norwegian authorities.
Ideas, dedication and hard work
For one, the strong financial results of 2022 have given us a robust position both
financially and strategically to address future challenges. I am particularly proud
of our team and how they adapted and delivered in a constantly changing envi-
ronment. Keep in mind that our strong financial results came despite an unstable
geopolitical situation, high inflation across the world, rising energy prices especially
in Europe, supply chain disruptions and congestions in many markets we operate.
It is in times like these you know that the following statement is categorically true:
Our people are our most important investment. The financial results are the result
of their ideas, dedication and hard work.
Safety, safety, safety
Safety, security and compliance are a prerequisites for any responsible and sustain-
able business. These are at the top of my agenda, at the top of the management’s
agenda, and at the top of everyone’s agenda. Every key meeting at our produc-
tion sites and in our management starts off with the topic of safety. Do we have
concerns, how do we perform, what can we do better? If we had an incident, what
was the reason, what went wrong, what do we need to do differently to avoid this
from happening again? I realize we can probably never reach perfection, but I want
to make sure we get very close. Zero accidents will always be our goal.
For the times they are a-changin’
I think we all feel that our world is faced with far more uncertainty today than just
a few years back. Disruption is happening to many industries and supply chains,
and ours are no exception. Our customers are changing. Shipping and logistics are
changing. One reason for the change is consumers’ awareness of climate change
and their motivation to contribute to solving the problem by buying significantly
23
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Wallenius Wilhelmsen – Annual Report 2022 23
Words from CEO
Contents →
Wallenius Wilhelmsen – Annual Report 2022
more electric cars. Our customers, the car manufacturers, as well as manufac-
turers of high and heavy equipment, are switching fuel sources of their products.
This change challenges Wallenius Wilhelmsen, because it comes with a new set
of demands to how we deliver our services. We also see that cargo becomes taller
and heavier, and we constantly adjust and tailor our operations to new customer
demands.
Net-zero emission – right now
Consumers understand that we all need to fight climate change, our customers
understand that we urgently need to take action, and we are committed to bringing
zero emission services to our customers and their customers. Man-made climate
change is real and we are here to make a difference. Although we do not have all
the answers, we have expressed a goal to deliver ONE net-zero emissions inte-
grated supply chain service by 2027. I am impatient, on behalf of ourselves, our
industry and the society at large. I believe that there is no option, we must deliver
on this ambition. We need to significantly reduce our combined carbon footprint
– this decade. We will not invest in any new equipment unless it contributes to the
net-zero agenda. No industry can achieve zero emissions without zero emissions
logistics. We will shape the future, and we will lead the way.
Biofuels to be used 2023
One important piece of the zero emissions puzzle is transitioning away from fossil
fuels. We will start using biofuels in 2023; credible carbon credits from within our
own industry will be part of the solution. We will invest in developing vessels capable
of utilizing zero-carbon fuels at delivery. We need to secure renewable energy and
continue installing zero emissions solutions at terminals and processing centers.
It requires that we work closely with our customers and gain their trust, they have
cargo, we have capacity. We need to embark on this journey together.
Digitalization reduces emission
The answer to the greatest challenge ever is not only fuel choices, but also techno-
logy. I firmly believe in the creative power of Wallenius Wilhelmsen. Entrepreneurship
is at the core of our company. This entrepreneurship will contribute to solving the
two biggest challenges and opportunities of shipping and logistics: Decarboniza-
tion and Digitalization.
In 2022, we were the first global shipping company to equip five of our vessels with
an AI-tool to optimize our voyages, reducing fuel consumption by up to 10 percent.
Sixty more vessels will get this solution already in Q1 2023. No humans, no matter
how much sailing experience, can compete with the input and instructions from
the AI-tool. We will continue installing sensors and monitor performance, there is
surly more emissions savings to be made.
Digitalization is not only taking place onboard our vessels. We work with the whole
supply chain – from land to sea. In 2023, we will build an in house start-up to deliver
outbound supply chain orchestration and mobility services for our customers. We
have already done some of this with visibility tools and other initiatives. Now we
continue to strengthen our efforts. We will use our industry insight and partner
with selected customers who are willing to work with us to develop a digital and
physical service offering building resilience and effectiveness into supply chains.
24
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Wallenius Wilhelmsen – Annual Report 2022 24
Words from CEO
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Wallenius Wilhelmsen – Annual Report 2022
Compliance is about culture
To realize all the changes we want, there are no short-cuts when it comes to compli-
ance. I am personally deeply engaged in our compliance efforts. I do not, and will
not, accept any breach of our compliance codes or practices. Compliance is a CEO
responsibility. Compliance as a culture does not happen without a solid compli-
ance framework with code of conduct, values, leadership principles and more.
This framework is constantly updated, and we talk about them continuously. But
compliance is equally about culture – our company culture. Values such as open-
ness and honesty, to feel safe to speak up, to challenge and be honest to yourself.
I always say to my colleagues that if you see or do something that you would not be
comfortable reading about in the newspaper or sharing with your friends and family,
you are very likely in breach of our compliance procedures. During my six months
here at Wallenius Wilhelmsen, I have repeatedly encouraged everyone to talk about
compliance, both internally and externally, with customers and partners, friends
and family. We must always pass the test of our own and the society’s scrutiny.
More diversity needed
When I took on the role as CEO, I made it very clear that we need more diversity in
Wallenius Wilhelmsen. In all positions, at all levels. Diversity is good for business, it
is good for our people. Operating in 29 countries gives us an in-depth understand-
ing and opportunity to realize diversity in many facets. To foster progress, both
management and staff must be representative of the society in which we oper-
ate. I am proud to say that we have a diverse executive management group. Two
women have joined the team, one was an internal promotion, one was an external
hire. But diversity is not only about gender. It will be my priority to make sure that
we get diversity in every way possible. Equal opportunity for all independent of race,
color, religion, gender, age, nationality, sexual orientation, disability, or any other
status is a given.
“Be a rock star”
When all can bring their talents to work, we are safe, results improve, we become
more resilient and innovative, and ultimately we get closer to making the journey
towards zero emission happen. Happy employees are the foundation upon which
we achieve desired results. We encourage all our employees to “Be a rock star”
in their own career! We want to make a rock star of every employee by support-
ing them to realize their full potential, empower them through strong teams, and
encourage them to drive innovation towards zero emission by challenging status
quo in all aspects.
I believe Wallenius Wilhelmsen is in a unique position to lead the transformation
of shipping and logistics. We have a strong team, an industry-leading position as
well as stakeholders committed to long-term value creation.
Lasse Kristoffersen
President and CEO
26Wallenius Wilhelmsen – Annual Report 2022
Message from the board
Our Strategy
Contents →
Our Strategy
Our strategy is to lead the transformation of shipping and logistics towards the
goal of zero emission.
Our Position
Wallenius Wilhelmsen is a shipping and logistics service provider delivering premium
end-to-end supply chain services. We connect and facilitate world trade from the
end of the production line to delivery to ports, transport across oceans, perform
services at our processing centers and delivery to dealers and other customers. We
transport cars, tractors, trains, airplane parts, windmills and even components to
entire factories. To ensure long-term viability and prosperity for our company and
our industry, we build innovative and more sustainable solutions that create value
for everyone in our value chain, from our customers and partners to our employees
and society at large. This takes place while simultaneously reducing our carbon
footprint.
We have a longstanding commitment and proactive approach to sustainability and
continue to step up our ambitions and efforts. Delivering on these commitments
is central to the work of everyone in the organization.
Our competitive advantage is the investments and knowledge we have built over
decades to deliver end-to-end services to our customers, both on land and at sea.
As we operate across the entire outbound supply chain, we are well positioned to
improve operations, increase efficiency, reduce waste along the way and ensure a
holistic customer experience. Our flexible vessels with strong ramps and hoistable
decks make us an attractive logistics partner, especially for high & heavy and
breakbulk cargo. Wallenius Wilhelmsen is ideally positioned to deliver cargo with
services from A to Z.
Wallenius Wilhelmsen today has operations in three key segments: Shipping
services, logistics services and government services. Shipping is fully focused
on ocean transport of roll-on/roll-off (RoRo) cargo. We are the market leader with
about 20 percent of total global fleet capacity. Our main customers are global car
manufacturers as well as manufacturers of high & heavy equipment for construc-
tion, agriculture and mining. We are different from other global players operating
in the RoRo shipping space due to the scale of our capabilities to lift high, heavy
and complex cargoes. This allows us to secure higher margins.
Our logistics services on land mainly cater to the same customer groups as our
shipping services segment. Customers on land require sophisticated logistics
services on a global scale. These include vehicle processing centers, equipment
processing centers and inland distribution networks. We operate eight strategically
placed RoRo terminals, 39 vehicle processing centers and 27 equipment processing
centers around the world. The two segments, shipping and logistics, have a clear
link, as about half our shipping volume passes through our terminals.
Our third segment, government services, provides ocean transport of roll-on/roll-off
(RoRo) cargo and breakbulk on US flag vessels as well as related logistics services
on land. The primary customer is the US government. We provide sealift capacity
and we transport commercial cargo requiring US flag as required by world events
and government objectives.
27Wallenius Wilhelmsen – Annual Report 2022
Message from the board
Our Strategy
Contents →
We take pride in how our global customer service teams ensure efficiency and
coordination of our services.
Our business model has over time yielded resilient free cash flow. At the end of
2022, we find ourselves in a solid strategic and financial position and well posi-
tioned to weather an uncertain macroeconomic global outlook. We are commit-
ted to paying regular dividends to our shareholders, in accordance with our policy,
and to delivering on our long-term financial targets. We believe that continued and
future success will only be ensured by fully integrating sustainability and innova-
tion into our business model.
Long-term group strategy
The overall strategic ambition for Wallenius Wilhelmsen is:
We aim to elevate our strategic position and become an integral part of our custom-
ers’ supply chains where we enable them to build resilient, digitalized and decar-
bonized logistics. To this end, we have defined four strategic goals:
Becoming the leading supply chain and mobility orchestrator means that we will
work to optimize finished vehicle logistics flows together with customers through
a digitally enabled platform. We will partner with customers along a continuum of
orchestration services critical to their daily and long-term decision support as they
execute the supply chain from production through to the end users, whether they
be dealer networks, fleet / rental companies or consumers.
Being our customers’ first choice in shipping entails securing a number one posi-
tion in targeted trades, reduction of carbon intensity from our vessels with 27.5
percent by 2030, introducing a net-zero emission trade by 2027, and transforming
our shipping operation and creating a fully data driven organization.
Ambition
Goals
Become the leading
supply chain and
mobility orchestrator
Be the preferred
partner in processing
and terminal services
Be our customers’
first choice in
shipping
Introduce a net-zero
emissions end-to-end
service by 2027
We will lead the way in transforming
shipping and logistics
28Wallenius Wilhelmsen – Annual Report 2022
Message from the board
2022 in brief
Contents →
Being the preferred partner in processing and terminal services requires that we
expand our already global footprint and double our logistics services over the next
five years to achieve the scope and scale to deliver on customers’ increasing finished
vehicle logistics demands. Logistics services will also deliver components of our
net-zero emission end-to-end offering by 2027, and improved profitability through a
digitally enabled, highly differentiated service portfolio and a focused labor strategy.
Introducing one net-zero emission end-to-end service by 2027 is goal number one in
our strategy. As a first step on this ambitious journey, we will introduce a carbon-neu-
tral freight and logistics service by 2024. We will establish verified and audited emis-
sion tracking and mass balancing, and bring our customers fully onboard through
commercializing our net-zero emission offerings to carbon-conscious customers.
2022 in brief
2022 was an exceptional year for Wallenius Wilhelmsen. Global supply chains contin-
ued to experience disruptions, leading to light vehicle production and sales at a
ten-year low, well below end-user demand. The shipping industry was also heavily
impacted by port congestion. Throughout the year, the demand for RoRo services
remained high, and the global fleet was at full capacity. Our shipping services
segment delivered extraordinary results over the year, driven by high freight rates,
operational efficiency and the continued full utilization of our fleet.
Our global terminal operations also had a very strong year, even while unstable
parts supply had a negative impact on the logistics services segment through
most of 2022. As auto volumes gradually stabilized, the segment ended the year
with increasing volumes, revenues and margins. Access to skilled labor remained
a challenge for logistics throughout the year.
The government services segment saw solid growth, mainly due to high US flag
cargo activity levels, driven by the response of United States and NATO to the Russian
invasion of Ukraine.
As a whole, the group delivered an all-time high EBITDA of USD 1,548 million, with
significant contributions from all segments.
Our financial position strengthened further in 2022 with a very strong operational
cash flow and a solid balance sheet.
As a result of the strong financial performance, a record dividend payment for finan-
cial year (FY) 2022 of USD 360 million is proposed to the annual general meeting.
The favorable market conditions and the company’s financial performance also drove
a significant increase in the share price throughout 2022. The share price closed
at NOK 97.1 at the end of the year, up 92 percent from NOK 50.6 at the end of 2021.
29Wallenius Wilhelmsen – Annual Report 2022
Message from the board
Financial review
Contents →
Financial review
Consolidated financial results
Total revenue was USD 5,045 million for FY 2022, an increase of 30 percent compared
to FY 2021, with higher revenues in all segments. Shipping revenues were up 33
percent year-over-year (YoY), from USD 3,029 million in FY2021 to USD 4,038 million
in FY 2022. This was primarily driven by increases in net rates and fuel surcharges.
In addition, shipping experienced a 4 percent growth in volumes, which was some-
what hampered by global congestion issues. Logistics revenues were up 15 percent,
from USD 789 million to 911 million, as volumes increased as a result of less disrup-
tions in the supply chains. Government revenue increased 28 percent from USD
236 million in FY 2021 to USD 302 million in FY 2022 mainly due to increased US flag
cargo activity.
EBITDA ended at USD 1,548 million for FY 2022, up 87 percent from USD 830 million
for FY 2021. Adjusted EBITDA ended at USD 1,528 million, up 77 percent compared
to FY 2021. 2022 was a remarkably good year for shipping services with revenue
and margin growth, with adjusted EBITDA up 85 percent from FY 2021. The improve-
ment over last year was mostly related to the tight global RoRo fleet situation and
the group’s efforts to reprice its book of business to sustainable levels despite
global congestion issues. A reduction in net fuel costs, fuel surcharges less fuel
expenses, contributed to the improved profitability. For logistics, adjusted EBITDA
decreased 1 percent, as cost increases exceed the increase in revenues resulting
in a lower average margin. Government services saw adjusted EBITDA increase 101
percent, due to higher revenues and improved margins. For a detailed explanation
of the definition of adjusted EBITDA, please refer to the section on ‘Reconciliation of
alternative performance measures’ in the financial statements. Depreciation and
amortization amounted to USD 541 million in FY 2022 versus USD 483 million in FY
2021. This was mainly due to an increase in leased assets.
In FY 2022, Wallenius Wilhelmsen recognized an impairment loss of USD 29 million
related to the goodwill in the logistics segment. Net impairment loss for FY 2021
was USD 62 million, USD 76 million from a charge to goodwill allocated to shipping
services, and USD 14 million from a reversal of impairment related to two vessels
being reclassified from assets held-for-sale to tangible assets. See note 11 in the
financial statements for further details.
A put-call structure exists in the shareholder agreement with the minority share-
holders for the investment in EUKOR Car Carriers (EUKOR). Any changes in the
valuation of the net derivative are recognized in the income statement. During FY
2022, there was a decrease in the value of the put-call derivative for EUKOR of USD
47 million, recognized under the line Other gain/(loss) in the income statement.
The impact in FY 2021 was a gain of USD 21 million.
Net financial expenses were USD 104 million versus USD 108 million in FY 2021.
Financial income was USD 17 million, down from USD 27 million in FY 2021 when the
group registered a USD 19 million financial income relating to a one-off distribution
from Den Norske Krigsforsikring for Skib (DNK). Interest expense including real-
ized interest derivatives was USD 189 million, an increase of USD 24 million versus
FY 2021. Currency gain including realized currency derivatives was USD 42 million,
compared to a loss of USD 12 million for FY 2021. The group had no fuel deriva-
tives in 2022, while in FY 2021 the group registered a gain of USD 10 million on fuel
derivatives. Net financial expenses were positively impacted by USD 44 million in
30Wallenius Wilhelmsen – Annual Report 2022
Message from the board
Financial review
Contents →
unrealized derivative gains, mainly driven by USD 111 million in positive interest rate
derivative movements, partly offset by USD 67 million unrealized losses on foreign
currency derivatives. In FY 2021, unrealized derivative losses were USD 41 million.
The group recorded a tax expense of USD 35 million versus a tax expense of USD 23
million in FY 2021. Payable tax was USD 39 million, where of USD 4 million in with-
holding taxes. This was partly offset by USD 4 million positive change in deferred tax.
The group continues the non-recognition of net deferred tax assets in the balance
sheet related to tax losses in the Norwegian entities, primarily due to uncertainty
in future utilization.
Net profit for FY 2022 was USD 794 million, up 349 percent from USD 177 million FY
2021, whereof USD 679 million attributable to owners of the parent and USD 116 million
to non-controlling interests (primarily related to the minority shareholder in EUKOR).
31Wallenius Wilhelmsen – Annual Report 2022
Message from the board
Financial position and capital structure
Contents →
Financial position and capital structure
Total equity amounted to USD 3,508 million at year-end 2022, corresponding to a
ratio of 41.8 percent, up from 36.0 percent at the end of 2021. The liquidity position
was solid, with cash and cash equivalents of USD 1,216 million and USD 247 million
in undrawn credit facilities at year end 2022. The group had net interest-bearing
debt of USD 2,872 million, consisting of bonds, bank loans, export credit facilities
and leasing commitments. The group was in compliance with all loan covenants
at year-end 2022.
The current financing structure in the group consists of five funding units, as seen
below as of December 31, 2022. Most financing is subject to certain financial and
non-financial covenants or restrictions within the funding unit. See more informa-
tion on financing activity in 2022, financing structure and covenants in Note 16.
Interest-bearing liabilities.
In 2022, the group concluded above USD 1.5 billion of refinancing during the year
relating to bond and bank debt, including both drawn debt and undrawn revolv-
ing credit facilities. All transactions replaced existing debt facilities. See summary
of all financing arrangements conducted during 2022 in Note 16. Interest-bearing
liabilities.
Wallenius Wilhelmsen ASA
Consolidated interest-bearing debt: $4,103m
Bank debt, secured by
vessels
Bank and leasing debt,
mainly secured by vessels
Bank and leasing debt,
mainly secured by vessels
Parent company guarantee
Bank and lease debt,
guaranteed by material
subsidiaries and pledge
in shares
Covenants on ARC:
- Fixed charge coverage
ratio
- Funded debt / EBITDA
- Value to loan clause
Covenants on EUKOR:
- Minimum liquidity
- Ratio of EBITDA to
interest expense
- Loan to value clauses
Covenants WW ASA
consolidated:
- Minimum liquidity
- Gearing ratio
- Loan to value clauses
Covenants on WWS:
- Minimum liquidity
- NIBD / EBITDA
- Equity ratio
Bank debt: $92m
Undrawn RCF: n.a.
Leases: $1m
Bank debt: $581m
Undrawn RCF: $50m
Leases: $802m
Bank debt: $1,002m
Undrawn RCF: $180m
Leases: $338m
Bank debt: $322m
Undrawn RCF: $17m
Leases: $431m
Debt (bonds only): $534m
ARC EUKOR WW Ocean WW Solutions
32Wallenius Wilhelmsen – Annual Report 2022
Message from the board
Financial position and capital structure
Contents →
In February 2022, the group published its sustainability-linked financing framework
v1.0, underlining the commitment to reduce carbon intensity by 27.5 percent from
2019 to 2030. The framework includes interim carbon intensity targets for each year
from 2022 to 2030. Approximately USD 950 million of the refinancings concluded
during the year were sustainability-linked, and the pricing of the debt is linked to
whether the group achieves its carbon intensity targets:
•
In April, Wallenius Wilhelmsen ASA completed the issue of new NOK 1,250
million (~USD 144 million) sustainability-linked senior unsecured bonds, for
general corporate purposes and repaying maturing bonds. The redemp-
tion price of the bond will increase by 1.5 percent if the group fails to meet
its interim carbon intensity target for 2025 as defined in the framework.
•
In June, WW Ocean signed USD 800 million in secured bank financings,
refinancing outstanding vessel debt, increasing available credit lines
and extending maturities. The margin is linked to the carbon intensity
target defined in the framework and will be adjusted on an annual basis.
If the annual target is achieved, the interest margin will reduced by -0.05
percentage points for the next year, while if the target is not achieved the
margin will increase +0.05 percentage points for the next year. Read more
about this topic in the Sustainable finance chapter.
Cash flow
The group generated USD 505 million of positive net cash flow from operations,
investing and financing activities in 2022. The net cash flow from operations
amounted to USD 1,297 million, up from USD 623 million in 2021, as the strong EBITDA
development more than offset the increase in working capital. Net cash flow used
in investing activities was USD 62 million compared to USD 140 million in 2021. The
most significant investing activities were regular dry dockings of approximately
USD 48 million and other vessel upgrades of USD 19 million. Various investments
in logistics services amounted to USD 32 million, including for the Orcelle Termi-
nal expansion in Zeebrugge. Net cash flow from investing activities was positively
impacted by the sale of two vessels from government services to the US Government
with a total proceeds of USD 45 million. Net cash flow from financing activities was
negative USD 729 million compared to negative USD 427 million in 2021, reflecting
significant refinancing activity and payment of USD 63 million of dividends paid to
shareholders in 2022.
33Wallenius Wilhelmsen – Annual Report 2022
Message from the board
Long-term financial targets and dividend policy
Contents →
Long-term financial targets and dividend policy
In February 2023, the Board of Directors approved new long-term financial targets
and an updated dividend policy for the group. The changes in the dividend policy
are not material, but reflect that the board will consider the new financial targets
and future capital requirements when deciding on the dividend amount. The payout
ratio range in percent of profit after tax remains unchanged.
Long-term financial targets:
•
Return on capital employed (ROCE) > 8 percent. Calculated as last twelve
months of adjusted EBIT divided by the last twelve months of average capi-
tal employed (total assets less total liabilities plus total interest-bearing
debt)
•
Leverage ratio < 3.5x. Calculated as net interest-bearing debt divided by
last twelve months of adjusted EBITDA.
•
Equity ratio > 35 percent. Calculated as book value of equity divided by
book value of total assets.
Dividend policy
Wallenius Wilhelmsen’s objective is to provide shareholders with a competitive
return over time through a combination of rising value for the Wallenius Wilhelm-
sen share and payment of dividend to the shareholders.
The board targets a dividend which over time shall constitute between 30 and 50
percent of the company’s profit after tax. When deciding the size of the dividend, the
board will consider its financial targets and future capital requirements to ensure
the implementation of its growth strategy, as well as the need to ensure that the
group’s financial standing remains solid. Dividends will be declared in USD and
paid out semi-annually.
34Wallenius Wilhelmsen – Annual Report 2022
Message from the board
Shipping segment
Contents →
Shipping segment
Wallenius Wilhelmsen’s main objective for the shipping segment is to strengthen
its position as the RoRo shipping market leader with unrivaled high & heavy and
breakbulk capabilities. This shall be done while taking a leading position in the
decarbonization journey to zero emissions by digitalizing the supply chain and
driving technological innovation and operational effectiveness.
Summary of 2022
2022 was an extraordinary year for the shipping segment and the best year the
company has experienced historically. Shipping services have delivered strong
results since the middle of 2021 following several years of weak markets and fleet
oversupply. A fully utilized global RoRo fleet along with the repricing of our book of
business to sustainable levels are the main reasons for the impressive results in 2022.
Coming into 2022, the semiconductor chip shortage impeded global vehicle produc-
tion, creating severe challenges for the automotive industry. As the strains gradu-
ally eased during the second half of the year, the global port congestion situation
became the major operational challenge for Wallenius Wilhelmsen and our custom-
ers. Long waiting times at key ports was mainly caused by labor shortages in ports
and general bottlenecks in the logistics supply chain. In order to mitigate these chal-
lenges, we were in continuous dialog with our customers and worked together to
re-route cargo to other ports with less congestion whenever and wherever possible.
Total revenue was USD 4,038 million for FY 2022, up 33 percent compared with FY
2021. Average net freight rates increased in all cargo segments, and by 12 percent
on average from FY 2021 to FY 2022. The rate increase was due to trade mix and
repricing of contracts to sustainable levels, as cargo mix remained stable. The high
& heavy and breakbulk share was at 32 percent in both FY 2021 and FY 2022. Trans-
ported volumes grew by 4 percent to 62.9 cbm million in FY 2022, and the trade mix
was fairly balanced as the volume growth was seen both from exports out from Asia
and Europe/US. Throughout the year, our fleet was better utilized with increased
cargo volumes, hence CO
2
intensity
1
showed a positive development. Further read
-
ings about the company’s effort and work on decarbonization is described in the
Planet chapter.
Market growth in light vehicle (LV) deep-sea volumes fell by 6 percent to 13.3 million
units in FY 2022, compared to 14.1 million units in FY 2021. This was due to the semi-
conductor situation and the global port congestion, not due to lack of demand.
Wallenius Wilhelmsen’s volumes increased more than the general global deep-sea
volumes for autos as we were present in more favorable trades and because our
customers were performing somewhat better than the market. Charter out activ-
ity fell year over year due to a very tight tonnage situation, and more vessels were
needed in our own operations. Further, fuel surcharge revenues increased signifi-
cantly during FY 2022 due to higher fuel prices.
Adjusted EBITDA for the shipping segment ended at USD 1,363 million in FY 2022, up
USD 627 million compared to FY 2021. Cargo and voyage related expenses decreased
in FY 2022 due to less transshipment and port and canal fees. Fuel expenses
increased by 52 percent to USD 1,065 million in FY 2022, driven by a significant
increase in fuel prices. Fuel prices fell in the latter half of FY 2022, but was on aver-
age considerably higher compared to FY 2021. Charter expenses were stable year
1 gCO
2
e per tonne-km
35Wallenius Wilhelmsen – Annual Report 2022
Message from the board
Logistics segment
Contents →
over year. Throughout the year, the number of short-term charters has decreased
and been redelivered, but new long-term charters have entered the fleet as well as
increased charter hire from intra-group charters from government services. Vessel
operating expenses were up 8 percent to USD 236 million compared to FY 2021, on
crew, insurance, maintenance and repair. Further, year-end adjustments and dry
docking costs related to redelivery of the long-term charter vessel Morning Cornet
impacted the FY 2022 results. Selling, general and administrative expenses (SG&A)
increased 13 percent to USD 150 million on a larger employee base, payroll inflation
and more travelling activity post Covid-19. Other operating expenses decreased in
FY 2022 mainly related to antitrust provisions in FY 2021. As of year-end 2022, the
company has concluded all the customer settlements and no provisions remain
on the balance sheet.
The fleet
At year-end 2022, Wallenius Wilhelmsen operated a fleet of 125 vessels, down from
131 vessels at year-end 2021. The reduction is due to a cautious approach to short-
term charters despite capacity needs, with six fewer short-term charter vessels
at year-end 2022. The group owned 83 vessels at year-end 2022, stable year over
year. Vessels have been sold to the government segment, but exercise of purchase
options on long-term charter vessels has maintained the owned fleet. Long-term
charters was also stable year over year at 42 vessels. A few long-term charter
vessels have been redelivered, but new tonnage has also entered the fleet, hence
the stable development in 2022. The charter market showed a significant increase
in charter rates through FY 2022 and ended at an all-time high.
Logistics segment
Logistics services mainly serve the same customer groups as shipping services.
Customers operating globally are offered sophisticated logistics services through
four distinct products.
Auto is the largest product group in the logistics portfolio, providing light vehicle
processing services to auto producers globally. High and heavy (H&H) includes
equipment processing centers on and off port sites globally with the largest concen-
tration in the US. Terminal offers our cargo processing, handling and storage at
some of the world’s largest RoRo ports. Inland includes the global transporting of
cargo by road or rail to a port or final point of sale.
Summary of 2022
Global light vehicle (LV) sales for 2022 were slightly below 2021 and significantly
below pre-Covid levels. In the US market, LV sales dropped 8 percent in 2022. A
typical year before the pandemic saw 16-17 million units in US sales while 2022
was under 14 million units. Lead time and availability of semiconductors improved
towards the end of the year contributing to more stable volumes of finished vehicles.
Overall, logistics services saw volume improvement year over year across the busi-
ness, while the financial performance of the products varied due to market condi-
tions and supply chain challenges. Terminal services, which is closely aligned with
shipping, led the way with strong volume and positive cargo mix, despite severe port
congestion impacting operations. H&H and inland also saw growth and improved
margins year over year.
36Wallenius Wilhelmsen – Annual Report 2022
Message from the board
Logistics segment
Contents →
Auto, traditionally the biggest contributor to logistics profits, faced multiple chal-
lenges through the year. Erratic processing volumes led to sporadic interruption
to the business with unexpected production shutdowns. As volumes began to shift
positively in the second half of the year, hiring and training new labor to support the
still unpredictable volumes became challenging. Full time labor shortages were offset
by utilizing temporary labor, which is less efficient and more expensive, ultimately
impacting margins negatively. As a result of our strong, long-term relationship with
key customers, we were able to get partial compensation for labor not utilized as a
result of lower than expected volumes. To offset increasing labor and material cost,
all new customer contracts are repriced to reflect the high-cost market.
In spite of the challenging market conditions, total revenues improved and profits
fell only slightly below last year. Total logistics segment revenue for FY 2022 was
911 million, up 15 percent from USD 789 million, as volumes increased from FY 2021.
Adjusted EBITDA was USD 107 million, down USD 1 million compared to FY 2021.
Auto EBITDA for the full year ended at USD 17 million, a 49 percent decrease from FY
2021. North America, a main contributor to auto, saw a 2 percent increase in volume,
with the second half of the year significantly better than the first half. In addition
to higher volume, an increase in accessorization positively impacted margins in
the second half of the year. However, total margins were down due to the nega-
tive impact caused by labor shortages and unpredictable volumes resulting in
inefficiencies. High & Heavy processing volumes increased 38 percent year over
year, and EBITDA for FY 2022 was USD 20 million compared to USD 14 million in FY
2021, mainly due to high volume and increased storage revenue. Terminals volume
increased 9 percent year over year and EBITDA ended at USD 63 million compared
to USD 53 million in 2021 due to strong volume, positive cargo mix and high storage
revenue. Inland volumes increased 26 percent year over year resulting in EBITDA of
USD 19 million compared to USD 15 million in FY 2021 as a result of greater volumes
in the US and Asia.
37Wallenius Wilhelmsen – Annual Report 2022
Message from the board
Government segment
Contents →
Government segment
The government services segment provides ocean transport of US flag cargoes
and performs global logistics services for the US government. Ocean transport
includes RoRo cargo, breakbulk and vehicles. It also includes charters of vessels
to affiliated companies in the shipping services segment and charters or sales of
vessels to the US government. Logistics services for the US government are primarily
related to multimodal transportation, third party logistics support, stevedoring and
terminal operations. The primary customer is the US government, but the segment
also includes US Flag commercial cargos such as those generated by the financial
sponsorship of a federal program, or a guarantee provided by the US government.
Summary of 2022
Total revenue from the government segment for the full year of 2022 was USD 302
million, up 28 percent from USD 236 million. This was mainly due to increased US
flag cargo activity in large part attributable to cargo moved in support of the United
States and NATO response to the Russian invasion of Ukraine. EBITDA was USD 95
million, up USD 55 million (138 percent) compared to FY 2021. The increase in EBITDA
was driven by increased government revenue combined with lower operating costs
due to the higher mix of US flag cargo year over year and gain on the sale of two
vessels to the US government.
The segment’s revenue and EBITDA development is primarily driven by government
activities which are in part driven by world events and government objectives that
do not necessarily follow regular seasonal patterns or the commercial business
cycle driving the other segments. In line with the company’s sustainability objec-
tives, the segment reduced the impact of rising fuel and labor costs through fuel
consumption initiatives and increased focus on safety management.
During the year, government services also experienced significant growth in charter
and logistics business, in addition to strong growth in its core government shipping
business. Protests of the award of the Global Household Goods Contract (GHC) to
the General Accounting Office and Court of Federal Claims were not successful.
ARC was previously awarded the GHC twice in 2020, but subsequent protests by
unsuccessful bidders overturned the award.
38Wallenius Wilhelmsen – Annual Report 2022
Message from the board
Market development and outlook
Contents →
Market development and outlook
The global demand for deep-sea transportation softened in 2022 as supply chain
constraints including semiconductor shortages hampered light vehicle (LV) produc-
tion and thereby sales. The auto original equipment manufacturers (OEMs) have
prioritized the most profitable models and markets leading to record high transac-
tion prices. The high & heavy (HH) segment strengthened with record high volumes.
The forward-looking statements herein, including assumptions, opinions and
views of Wallenius Wilhelmsen or cited from third party sources, are solely views
and forecasts which are subject to risks, uncertainties and other factors that may
cause actual events to differ materially from any anticipated development. The
company does not provide any assurance that the assumptions underlying such
forward-looking statements are free from errors, and it does not accept any respon-
sibility for the future accuracy of any forward-looking statements.
Light vehicle market
Based on data from S&P Mobility (formerly IHS Markit), global light vehicle (LV) sales
declined by 1.4 percent in FY 2022 compared to FY 2021 and totaled 79.2 million units,
a ten-year low for global sales. Supply chain congestions including semiconductor
shortage had an impact on all major markets. The OEMs prioritized to produce and
sell well equipped vehicles at premium price points. Chinese LV sales increased 3.5
percent year over year (YoY) as the share of internal combustion engine (ICE) vehi-
cles declined and low-emission vehicles (xEVs) grew sharply. Both in North America,
down 7.6 percent, and Europe, down 11.9 percent, inventories of new vehicles grew
at the end of the year and average transaction prices trended high.
Global deep-sea LV exports were down 5.7 percent from FY 2021. Deep-sea volumes
declined more than total global sales, as North America and Europe, with a relatively
high share of deep-sea volume import, underperformed compared to regions with
lower deep-sea shares. Light vehicle exports from Europe declined 8.4 percent,
while North American exports declined 12.5 percent. Japanese exports were down
16.6 percent from FY 2021, Korean vehicle exports were down 8.0 percent. Chinese
exports were significantly up with 25 percent, from 1.2 million to 1.5 million units.
A positive factor for Chinese LV export was the fact that battery electric vehicles
continued to gain ground in Europe.
According to the forecast from S&P Global (former IHS Markit), the LV sales outlook
for 2023 indicates a growth of 5.6 percent compared to 2022. Sales in North America
are predicted to increase by 6.8 percent and exceed 17.5 million units sold. Europe
is expected to see an improvement of 6.7 percent. The base case scenario expects
deep-sea volumes to see a stronger rebound compared to global sales. Deep-sea
volume is forecasted to increase with 9.4 percent, with continued Chinese growth
and Japanese rebound as the most notable. Solid volumes are expected in the
first half of 2023 due to long orderbooks. Volumes are more uncertain towards
the second part of 2023, and will depend on the length and depth of the current
economic slowdown in Europe and the US. The global production and sales of
light vehicles are still far below pre-Covid levels. Constrained supply chains have
led to pent-up demand for new vehicles. The age of the global light vehicle fleet is
increasing and needs to be replaced. The shift towards low-emission vehicles, and
in particular battery electric vehicles, is also expected to drive sales and demand
for deep-sea shipments.
39Wallenius Wilhelmsen – Annual Report 2022
Message from the board
Market development and outlook
Contents →
High & heavy market
Global markets for agricultural, construction and mining machinery again recorded
a very strong year in 2022. According to data by S&P Global, global export volumes
increased 15.0 percent year over year (YoY) in the first eleven months of the year –
taking volumes to another all-time high.
Construction machinery exports increased 16.1 percent YoY during the period.
Except for Africa, all market regions recorded strong demand growth for machinery
compared to 2021. Meanwhile, the construction industry reported slowing activity
in key markets as the year progressed. Soaring inflation and interest rates weighed
heavily on housing markets and residential construction activity, while the nonresi-
dential segment proved somewhat more resilient. Against this backdrop, Off-High-
way Research forecasts global construction equipment demand (excluding China)
to decrease 5.9 percent from 2022 to 2023, including a moderate pullback in both
Europe and North America.
Agriculture machinery demand increased again in 2022, with global exports grow-
ing 11.5 percent YoY in the first eleven months of the year. Growth was muted in
Europe, while exports to Oceania and the Americas increased strongly. Despite
declining from the all-time high reached in Q2, food prices remained well above
pre-pandemic levels and supportive of strong farmer profits. Major equipment
manufacturers estimate that tractor markets will remain relatively unchanged in
volume terms in 2023.
Global demand for mining machinery continued to grow strongly in 2022 with exports
increasing 31.2 percent YoY. Excluding Russia, exports increased 47.3 percent, with
strong growth seen in all markets except Latin America. Demand was fuelled by
mined commodity prices well ahead of pre-pandemic levels, leaving the mining
industry with the highest profits in a decade. Strong earnings allowed miners to
continue investing in projects and machinery, and capex among mining major rose
by an estimated 14.4 percent in 2022. Consensus estimates for selected machinery
manufacturers indicate that revenues will increase another 10.9 percent from 2022
to 2023, but order growth has increasingly shifted to aftermarket at the expense of
machinery in recent quarters.
Global fleet
The global vehicle carrier fleet totaled 592 vessels with more than 4,000 car equiv-
alent unit (CEU) capacity. In 2022, two newbuilds were delivered and one vessel was
recycled. During 2022, there were 54 new orders of vessels above 4,000 CEU. This
resulted in an orderbook at the end of 2022 of 107 vessels with more than 4,000
CEU – the equivalent of about 21 percent of the active fleet. Most of the orderbook
is scheduled for delivery after mid 2024.
2
2 Wallenius Wilhelmsen Market Insight
40Wallenius Wilhelmsen – Annual Report 2022
Message from the board
Key risk exposures
Contents →
Key risk exposures
Wallenius Wilhelmsen is exposed to a variety of risks through its global operations.
These risks are within the following areas: safety, financial, market and commercial,
operational, regulatory, climate and environmental. Wallenius Wilhelmsen has a
group-wide enterprise risk management model and maps main risks on a contin-
uous basis. Every quarter, management presents a detailed risk assessment. This
includes mitigating actions which cover all business units and corporate functional
areas to the Board of Directors. Governing bodies, management and employees
must be aware of the current environment in which we operate and be responsible
for implementing measures to mitigate risks, acting upon unusual observations,
threats or incidents, and proactively try to reduce potential negative consequences.
Wallenius Wilhelmsen has internal controls, systems and processes for handling
risks in place.
Health, safety and security risks
As a result of our core operations, Wallenius Wilhelmsen is exposed to safety risks
arising from both its sea and land operations. Our key safety risks are incidents
onboard and related to vessels such as fire, piracy attacks and outbreak of conta-
gious diseases. The key risks at our land-based operations mainly relate to the
handling and treatment of vehicles and machinery and undesired breaches to
perimeters of our terminals and other facilities. These risks are mitigated through
respective management systems. The systems include a sharp focus on training,
updating routines and processes and measures designed to secure continuous
compliance with health, safety and security regulations. Frequent and regular emer-
gency response drills, toolbox talks, and risk assessments are run to reduce these
risks. The group monitors key performance indicators and performs root cause
analysis of undesired events to identify and prevent potential risks. For further
information, please see the People chapter in this annual report.
Financial risks
The main financial risk exposures for Wallenius Wilhelmsen are interest and currency
rates along with fuel prices. For a detailed assessment of financial risk, see note
17 – financial risk in the financial statements.
Wallenius Wilhelmsen’s policy is to economically hedge between 20-80 percent
of the average net interest rate exposure over the next five years, predominantly
through interest rate swaps and fixed rate loans. The hedge ratio currently stands
at about 50 percent.
The US dollar is the dominant currency for both revenues and costs across the group.
It is also the group’s presentation currency. The group is exposed to currency risk
on revenues and expenses in non-functional currencies (transaction/cash flow
risk) and balance sheet items denominated in currencies other than USD (trans-
lation risk). The group’s largest foreign exchange exposure is EUR against USD, but
the group also has exposure to a number of other currencies whereof KRW, JPY,
SEK, CNY and NOK are the most important. Various financial derivatives, such as
forwards, options and cross-currency (basis) swaps are used to hedge this exposure.
Fuel price risk is primarily managed through the inclusion of fuel adjustment factors
(FAF) in the customer contracts. Since FAFs are typically calculated on the average
price over an historical period, and then fixed during an application period, a lag effect
exists, which means that the group is exposed to price changes in the short term.
41Wallenius Wilhelmsen – Annual Report 2022
Message from the board
Key risk exposures
Contents →
Regulatory risks
Due to our global presence and operations within different segments, the group is
exposed to numerous regulatory frameworks. These include rules and regulations
related to for instance anti-corruption, sanctions, fair competition, environment
and data privacy. Compliance with relevant requirements within these fields, in
addition to other corporate matters, are managed in collaboration with corporate
functions, subject matter experts and local responsibilities as per jurisdictional
requirements. Awareness and training activities are conducted based on roles
and responsibilities. For more on risk management and internal control, please
see Principles of governance.
Operational risks
Tonnage and trade imbalance, vessel incidents, adverse weather conditions and
access to skilled labor constitute the main operational risks at Wallenius Wilhelm-
sen. We strive to secure sufficient fleet flexibility by combining owned tonnage with
both long- and short-term charters.
During 2022, global supply chain disruptions continued to create challenges to our
logistical planning. The owned tonnage and long-term charters represent the core
fleet, while the short-term charters enable the operating entities to scale up and
down capacity to meet changing demand in a cost-efficient manner. The company
proactively handles trade imbalances through vessel swaps and space charter
arrangements for excess volumes with other operators.
Due to strict Covid-19 health and safety protocols, crew management has remained
challenging. Our Covid-19 response team across the group has continued to work
to ensure that best practices, risk assessments and analytics are shared and
adopted across the fleet, as well as throughout our land-based organization, and
are in full compliance with both global and local regulations.
Post-pandemic, a lack of access to skilled labor has been a challenge for the group
as a whole, and for our landbased operations in particular. To mitigate the risk to
stable operations, we have made systematic efforts to attract, train and retain
skilled workers, while also increasing our utilization of temporary labor.
Cyber-attacks is identified as another important risk, and the company constantly
monitors the threat environment. Together with partnerships with leading industry
players, Wallenius Wilhelmsen has protection tools and mechanisms in place. We
have also implemented internal information campaigns and awareness programs to
mitigate risk of security breaches related to phishing and impostor fraud. As other
companies in the shipping industry, Wallenius Wilhelmsen risks exploitation by
criminal organizations involved in for instance smuggling of narcotics and human
traffickers. Please see the human rights section in the People chapter.
42Wallenius Wilhelmsen – Annual Report 2022
Message from the board
Key risk exposures
Contents →
Environmental risks
Wallenius Wilhelmsen is exposed to environmental risks. These are mainly related
to vessels and include risks such as oil spills through bunkering, chemical handling
and most severely, in case of collision and grounding. The management systems
prioritize training, routines and measures designed to ensure continuous compli-
ance with environmental regulations. To reduce these risks, we conduct frequent
emergency response drills, toolbox talks and risk assessments. The group monitors
key performance indicators and performs root cause analysis of undesired events
to identify and prevent potential risks. Please see the Planet chapter of this report
for further information.
Climate risks
Following current and future effects of climate change and the accelerating need to
decarbonize our global value chain, Wallenius Wilhelmsen is exposed to a number
of climate-related risks. These include physical as well as transitional risks such
as market, technology, reputational, policy and legal risks. Our financially material
climate risks are related to our shipping segment. High on the agenda is to best
prepare and position ourselves for upcoming greenhouse gas regulatory changes
from the International Maritime Organisation (IMO), the shipping industry’s global
regulator and the European Union (EU). For example, in April 2018, the IMO adopted
emission reduction targets for 2030, 2050 and beyond. These will have an impact
on the shipping industry and ourselves. Wallenius Wilhelmsen seeks to contribute
to progressive yet pragmatic outcomes through active engagement in the regula-
tory development process. For further information, please see the chapter on GHG
emissions and climate risk in the Planet chapter of this report.
Market and commercial risks
Demand for shipping and logistics services are cyclical and closely correlated to
global economic activity in general and deep-sea transportation of light vehicles (LVs)
and high and heavy (H&H) equipment in particular. Changes in the global economy
therefore strongly impact the development of Wallenius Wilhelmsen’s volumes and
financial performance, including the following events and conditions during 2022.
•
The Russian invasion of Ukraine in February 2022, and generally increased
geopolitical tensions across several dimensions, creates a more volatile
market environment which poses challenges to the company given our
global presence.
•
Continued disruptions to the semiconductor industry, leading to supply
chain bottle necks and shortage of components to car manufacturers,
and hence halting production, will continue to pose a risk to Wallenius
Wilhelmsen.
•
Sustained port congestions causing vessel delays pose a risk to opera-
tions and the overall fleet utilization and lifting capacity.
•
Furthermore, illnesses or other events that may threaten the health and
well-being of employees, customers, and wider communities may cause
disruptions to operations and demand, as seen during the Covid-19
pandemic.
Any short-term direct effect of reduction in volumes due to any of the above is not
expected to be critical as the group can implement measures to adjust capacity
and reduce costs temporarily. On the other hand, indirect effects in case of slower
43Wallenius Wilhelmsen – Annual Report 2022
Message from the board
Events after the balance sheet date
Contents →
underlying global economic growth, combined with reduced deep-sea volumes
across all cargo segments, would not only directly impact the results but could
also lead to continued and increased overcapacity and create pressure on rates.
New emissions standards in the LV markets as well as incentives will also influ-
ence sales mix and trading patterns. The geographical pattern of the production of
LVs and H&H equipment is continuously changing. A shift in the balance between
locally produced and exported cargo may affect the overall demand for deep-sea
ocean transportation, resulting in a shift to short-sea ocean transportation, and
thus affect the overall fleet utilization. A shift in customers’ market positions can
represent both opportunities and risks for Wallenius Wilhelmsen’s operating enti-
ties. However, our broad global presence in many regions of the world combined
with wide client exposure contributes to actually reducing this risk element.
Events after the balance sheet date
In January 2023, Wallenius Wilhelmsen ASA signed a new USD 100 million revolving
credit facility to be available for collateral postings related to cross-currency swaps.
The facility is secured by five sailing vessels that were previously unencumbered.
In February 2023, the board of directors approved an updated finance policy for the
group. See separate stock exchange notice as of February 8, 2023.
In January 2023, Pia Synnerman became the new Chief Customer Officer. She joined
the group as head of sales to EMEA in 2021, coming from Ericsson with nearly 20
years of experience in international sales.
Dividend for the financial year 2022
The board proposed an ordinary dividend of USD 0.85 per share to the annual general
meeting on April 26, 2023. USD 0.51 to be payable in May 2023 and USD 0.34 to be
payable in November 2023. The dividend is declared in USD and paid in NOK. The
total proposed dividend amounts to USD 360 million, representing 45 percent of
the FY 2022 profit after tax which is in the upper end of the dividend policy range of
30-50 percent of profit after tax. Adjusting for one-off, non-cash items such as the
change in value of the symmetric put/call option in EUKOR and the impairment in
logistics, the dividend represents 42 percent of the adjusted FY 2022 profit after tax.
44Wallenius Wilhelmsen – Annual Report 2022
Message from the board
Prospects
Contents →
Prospects
2022 was an exceptional year for our shipping and terminal markets, despite
global light vehicle sales at 2012-levels. We expect continued strong volumes and
a tight market balance, at least for the first part of 2023. Volumes are more uncer-
tain towards the second part of 2023, and will depend on the length and depth of
the current economic slowdown in Europe and the US. In 2024, the fleet capacity
in CEU is expected to grow about 8 percent which may cause a less tight balance
for shipping. On the upside, we see a potential rate upside from renewing multi-
year customer contracts. Further, the global production and sales of light vehicles
are still far below pre-Covid levels. Constrained supply-chains have led to pent-up
demand for new vehicles. The age of the global light vehicle fleet is increasing and
needs to be replaced. The shift towards low-emission vehicles, and in particular
battery electric vehicles, is also expected to drive sales and demand for deep-sea
shipments.
We continue to expect increasing light vehicle sales in 2023 compared to 2022,
despite a shift from supply driven constraints to a softening of demand. This will
benefit both the shipping and logistics services segments. H&H volumes were at all
time high levels in the second half of 2022 and are expected to soften somewhat in
2023, in particular in the construction segment. The steep fall in container freight
rates will increase the competition for break bulk cargoes. We see risks to sales
and deep-sea volumes from a deeper than expected economic recession, further
disruptions to the global supply chains, as well as labor costs and labor availability.
Any escalation of geopolitical tensions may exacerbate these risks and in particular
impact our global business model.
Overall, we expect to further strengthen our financial position in 2023, while enabling
us to meet our financial targets and to remunerate shareholders. The strengthened
financial position will serve us well in a period of increasing uncertainty.
People
While impressive deep sea vessels are our most visible assets, it is our people
that are most important. They manage processing centers and terminals,
operate our land and ocean fleets efficiently and respond to customer needs.
Wallenius Wilhelmsen’s people are essential to how we create lasting value.
The Covid-19 pandemic has proven to have a lasting impact on the future of
work. Wallenius Wilhelmsen, along with many other companies, experiences
a competitive talent landscape and a workforce that has been under a lot of
pressure during the pandemic. This is more visible in some markets, such as
the United States.
Our mission and obligation to our people is to provide a safe and inclusive
workplace where everybody’s rights are respected. Indeed, we want to make
a rock star of every employee by supporting them to realize their full potential,
empower them through strong teams and encourage them to drive innova-
tion and development by challenging status quo.
Contents →Contents →
46
People
Health, safety and wellbeing
Contents →
Wallenius Wilhelmsen – Annual Report 2022
We monitor, manage and report on four material topics related to our people:
1. Health, safety and wellbeing
2. Human and labor rights
3. Diversity, equity, inclusion
4. Training & development
1. Health, safety and wellbeing
Why is it important?
We are committed to our people’s health, safety and general wellbeing. Wallenius
Wilhelmsen is a global company with extensive terminal operations, processing
centers, road and seagoing transportation. Our people handle and control many
potential risks. It could be work-related incidents, road accidents, oil spills and
other environmental incidents. Safety is the number one priority for Wallenius
Wilhelmsen and defining how we can improve our safety culture is at the top of the
management’s agenda.
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People
Health, safety and wellbeing
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Wallenius Wilhelmsen – Annual Report 2022
How do we work?
Most of our employees work in logistics services. This includes outsourced labor
at terminals and processing centers. Safety 1st is the foundation of logistic’s envi-
ronmental, health and safety program and requires that all employees must under-
stand their roles and responsibilities to maintain a safe work environment. The
management system is aligned with the ISO standards for health & safety (45001),
environment (14001) and quality (9001). Several of our facilities are already certified
to one or more of these standards. During 2022, our facilities in EMEA were certified
to the three above-mentioned standards, and our Compas facility in Mexico gained
the first ISO 45001 certification in the Americas. The plan is to have all facilities in
the Americas certified to all three standards in 2023. Global certification will follow.
Dedicated HSEQ managers are responsible for the continual improvement of the
systems and senior management monitors this work closely.
External ship management companies employ the crew onboard Wallenius Wilhelm-
sen’s owned vessels and bareboat charter vessels. Our marine operations manage-
ment team ensures that the ship management companies comply with our policies
and requirements to be certified in accordance with the Maritime Labor Convention,
the International Safety Management Code, ISO 14001 and ISO 9001.
Management systems already aligned with relevant global
standards
Wallenius Wilhelmsen’s Management System is aligned with key ISO standards.
A roadmap is being implemented to achieve groupwide certification. Currently,
selected sites are certified to one or more standards.
VEHICLE SERVICES – VPCs HIGH & HEAVY – EPCs TERMINAL Services Vessels
# of certified Sites in 2023 # of certified Sites in 2023 # of certified Sites in 2023
ISO 14001 6 ISO 14001 2 ISO 14001 3
•
External ship managers
•
ISO 9001 and 14001 certified
•
Compliance with health & safety
standards:
•
The International Ship and
Port Facility Security (ISPS)
Code
•
Maritime Labor Convention
•
The International Safety
Management (ISM) Code
ISO 9001 17 ISO 9001 9 ISO 9001 3
ISO 45001 6 ISO 45001 2 ISO 45001 3
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Wallenius Wilhelmsen – Annual Report 2022
How did we perform?
The Covid-19 pandemic is still impacting our seafarers. We have continued to work
with our ship manager vendors to secure their wellbeing whilst maintaining our
fleet’s operations. As society has opened up, visitors to the vessels, and seafarers
who have been onshore, are at risk of bringing Covid-19 infection back onto the
vessels. To ensure the health of our seafarers, we launched a Mariners Medico
Guide app for diagnosing and following up physical and mental disorders. The
app is developed by Gard, the insurer, and the Norwegian Centre for Maritime and
Diving Medicine and approved by the the Norwegian Flag State. All seafarers have
also been offered a third vaccination dose and the response has been good.
During the pandemic we had limited ability to visit the vessels. We have since
strengthened our safety and quality inspections with focus on clean living areas
and catering facilities. A limited number of inspections on charter vessels revealed
that conditions were not satisfactory. These were rectified. These inspections come
in addition to the compulsory maritime labor and port authority controls.
Covid-19 has changed the lives of our land-based employees. Whilst most of the
societies we operate in have opened up since the lockdowns, things will not return
to how it was prior to the pandemic: The future of work will balance remote and
hybrid attendance to meet employees’ desires for more flexibility and the need to
maintain and strengthen our company culture. We are conscious that increased
use of home office for some employees may contribute to mental challenges such
as isolation, social anxiety and addiction-related sicknesses. Policies for office-
based employees have been implemented across the geographies reflecting local
circumstances and regulatory requirements. For production workers, we are explor-
ing options to increase their work flexibility. In the US, for instance, we launched
pilot programs with fixed work schedules to provide better shift predictability in
order to increase retention of employees and reduce turnover. Preliminary results
and feedback are positive.
We are increasing our focus on mental health and have implemented employee
assistance programs to support to our colleagues:
•
UK: A new round of mental health courses to increase understanding of
mental health issues and raise awareness about how to talk about it and
how we can offer help.
•
Sweden: A mental first-aid training course was conducted for all manag-
ers and employees. All staff also receive a fixed sum annually to spend on
wellness initiatives.
•
Belgium: The Evoluno app was introduced. It provides production and
office employees with an opportunity to reflect on their current state of
mental wellbeing, provides micro learnings and information on where and
how to reach out to a mental health professional if desired. In addition an
employee assistance program, Pobos, focuses on psychological counsel-
ling and burnout issues.
•
Asia: A mental health toolkit was launched which included a local mental
health helpline across Asia as well as awareness sessions on emotional
support during tough times.
•
Korea: A LMC (Labor Management Council) and OSHC (Occupational
Safety and Health Committee) were formed to build a positive culture with
mutual trust between management and employees.
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•
In Brazil, Panama, El Salvador and Mexico: Employee assistance programs
were launched. The programs are free and confidential and provide finan-
cial, nutritional support, legal support as well as psychological assistance.
We experienced no serious injuries or fatalities among Wallenius Wilhelmsen employ-
ees in 2022. However, a sailor on one of the chartered vessel was lost at sea during
a voyage in November. A three-day search and rescue mission was carried out, but
the lost crew member was never located despite these efforts. Our thoughts and
support go to his family, friends and colleagues.
Although we have seen improvements over the years, the safety performance in
logistics declined during 2022. At the end of the year, lost time injury frequency
(LTIF) was 15.8 in our land-based operations with 206 lost-time injuries for staff and
contractors. This is above our 2022 LTIF target of 14.5. Many of our incidents were
related to slips, trips and muscle strains and we have run a number of initiatives
to bring attention to key causes of these injuries and accidents to reduce this risk.
We have also been piloting TuMeke, a computer vision joint tracking for ergonomic
assessments, to reduce muscle strains and injuries due to poor ergonomics. We
will improve our standard operating procedures based on the ergonomic risks
identified. With an aging workforce, we hope the tool will help educate managers
and frontline employees on how to complete tasks in a way that reduces the risk
of e.g. muscle strains.
The global safety committee which was established in 2021, expanded to include
more colleagues across the world. Discussions in the committee about incidents
and sharing experiences has contributed to an improved and more consistent
safety management across locations.
The aim is to share good practices among operations and regions. The committee,
which consists of health & safety professionals from the Americas, EMEA, Asia and
Oceania, meets regularly to share lessons-learned and strengthen our general
safety culture.
At sea, the LTIF was 0.38 at the end of 2022, well below our target of 1.0. Most of the
injuries are related to slips and trips.
In Durban, South Africa, our employees experi-
enced the devastation of the April 2022 floods.
Wallenius Wilhelmsen assisted employees with
food vouchers to bring them immediate help.
Also, the company secured payment through
an unemployment insurance scheme to alle-
viate some of the burden on the employees hit
by the floods.
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For many years we have arranged RoRo Rodeo events at our Baltimore terminal
and in 2022 the event was also held at our Zeebrugge terminal in Europe. The aim
of the RoRo Rodeo is to upskill sub-contractors and the operations team in cargo
securing techniques, ergonomic safety and damage prevention. The training is
provided by technical representatives from all the major machinery manufacturers.
We are proud of our employees who work diligently to ensure a safe work environ-
ment. Southampton achieved zero LTIs this year, while our operations in South Africa
saw an 80 percent reduction in LTIs , from 11 in 2021 to 2 in 2022. At our Brunswick
terminal in Georgia, USA, we realized almost 3,000 injury-free days.
Even though Wallenius Wilhelmsen’s LTIF is comparable to the industry average in
countries such as the US, it remains a priority to further improve our safety perfor-
mance. We are focussing on the facilities that have had the highest numbers of
incidents and recurring root causes. During 2022, we deep-dived into two sites and
the findings and remedies will be closely followed up. The work with certifying our
operations to ISO 45001 Health and Safety standard is expected to strengthen our
management processes and improve our performance.
We have also included work environment and safety as a section in our employees
#engage survey. The section is directed towards production workers in logistics
and covers questions related to how they perceive safety management, such as
“safety rules are carefully observed, even if it means work is slowed down.” We have
set targets for the score and monitor the results.
The absenteeism for logistics increased slightly from 2.35 percent in 2021 to 2.52
percent in 2022.
“RoRo Rodeo is a great way to facilitate com-
munication with our front-line team members.
Here we share information, solve problems
and improve teamwork. It is a great way to
strengthen our safety and quality culture.”
Mary Carmen Barrios
SVP Port, Terminal and Stevedoring Operations EMEA
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Health, safety and wellbeing
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Wallenius Wilhelmsen – Annual Report 2022
How will we proceed?
Improving our safety performance and safeguarding our people’s health and well-
being will continue to be a top priority for the company in 2023:
•
Continue to raise our employee survey safety score – #engage –
for production workers from 7.5 to 7.8.
•
Strengthen our health & safety management system by certifying
our facilities to ISO 45001 health and safety standard.
Safety is an indicator of a company’s health
“Safety is an indicator of a company’s health,” says
Sarah Walsh, VP Fleet Management. “Shipping is a
high-risk business. It’s a mix of multi-million-dollar
vessels, complex heavy machinery, large quantities
of polluting fluids combined with the unpredict-
able nature of the elements, the wind and the sea.
It can be a recipe for disaster. Add to that the human
elements, we are not robots. We all make mistakes.
For me there are three simple reasons why safety
is so important:
1. The human perspective, we all want to be
safe. We all have families and people who
we love.
2. Our responsibility towards the environment.
We should not harm the environment or the
habitats.
3. A commercial reason, we want to make
our business a success. Without safety,
no business model will survive.
Safety relates directly to quality. Quality relates to
customer satisfaction. Customer satisfaction relates
to the success of the business – and ultimately the
sustainability of our company long term. Safety is the
responsibility of all. It is our culture that empowers
our colleagues to act as safety barrier – to feel safe to
speak up! We need people to challenge the process!”
Key performance indicator 2022 actual 2022 target 2023 target
LTIF logistics 15.76 <14.25 14.15
LTIF ocean 0.38 <1 <1
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People
Human and labor rights
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Wallenius Wilhelmsen – Annual Report 2022
2. Human and labor rights
Why is it important?
As a global company, we operate in many different regions and countries. Identify-
ing relevant human rights and understanding how we may impact them is critical
for both us as a company and our stakeholders. We are committed to respecting
human and labor rights across our business in all countries and regions in which
we do business and recognize the internationally recognized UN Universal Decla-
ration of Human Rights and the International Labour Standards (ILO declaration
on fundamental principles and rights at work). In addition, regulations, such as the
Norwegian Transparency Act and the minimum social safeguards of the EU taxon-
omy, increasingly demand that companies carry out due diligence in their value
chains, develop governance and management, provide grievance mechanism and
report on progress. This section encompasses reporting to meet the requirements
of the Norwegian Transparency Act. Please also refer to our separate statement on
the website related to the UK Modern Slavery Act.
How do we work?
The respect for human and labor rights is embedded in our code of conduct and
our human rights policy which specify the key principles, objectives and commit-
ments. The policy explicitly bans any form of modern slavery in our operations and
supply chain. This includes human trafficking, forced labor, exploitative working
conditions and practices, slavery and child labor. Furthermore, human rights are a
core part of our supplier code of conduct and our sustainable procurement policy.
Please see the section on sustainable supply chain section in the prosperity chapter.
We have established a governance structure to comply with relevant regulations
relating to labor rights and working conditions: In 2021, we conducted a human
rights risk assessment and due diligence (HRDD). This was done in accordance
with the OECD Guidelines for Multinational Enterprises and UN Guiding Principles
on Business and Human Rights. The assessment involved a desktop analysis,
deve lopment of a systematic process and several workshops with colleagues from
human resources, legal, safety, emergency & security and procurement. Human
rights aspects were assessed across our value chain to determine which factors are
relevant for us and decide why others are not. Existing mitigating actions were also
mapped. For the relevant risks, scenarios were developed, likelihood and impacts
defined and assessed to prioritize key risks and mitigating actions.
How did we perform?
During 2022, we further built upon our human rights risk assessment and due dili-
gence from 2021. To raise awareness of human rights amongst our senior manage-
ment, we organized a seminar with internationally recognized experts as well as
an in-depth workshop for the task force of key functions which was established to
advance our internal human rights work. We also launched a sustainability gami-
fication training which included our approach to human rights as well as a specific
training course on human rights. The courses are directed towards our PC-enabled
employees and they are provided to new employees as part of the onboarding
process when joining Wallenius Wilhelmsen.
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We have updated our Alert Line to specifically include queries and concerns relat-
ing to human rights impacts and potential breaches, and we are in the process of
revising our Code of Conduct. The code specifies that discrimination based on race,
color, religion, gender, age, nationality, sexual orientation, disability, or any status
protected by law is not tolerated. In addition, it condemns all forms of forced labor,
modern slavery, trafficking and other exploitative working conditions and child labor.
An overview of key scenarios that are relevant for us and incidents and actions
in 2022:
•
Stowaways on vessels: Human traffickers and smugglers can be behind
stowaways onboard our vessels. Stowaways are also at risk of becoming
victims to modern slavery upon arrival. We experienced three incidents
of stowaways in 2022. When stowaways are found on a vessel after leav-
ing the port of departure, guidelines are in place as prescribed by IMO in
Resolution 13 (42): FAL Convention and strictly followed. P&I clubs are also
consulted to ensure the safety of stowaways when considering potential
ports for disembarkation. We also cooperate closely with port and termi-
nals to prevent this illegal activity. Examples of preventive measures are
ID-checks, CCTV-systems, manual cargo inspections and thermal screen-
ing cameras. During 2022, we have not engaged any armed guards during
transits.
•
Migrants in distress picked up at sea: Unfortunately, migrants still risk their
lives by crossing the seas in search of a better life and Wallenius Wilhelm-
sen recognizes our duty pursuant to international law for ships to attempt
to rescue persons at danger at sea. In the case where migrants in distress
are picked up at sea, recommended practice is followed as per IMO,
including the 1982 UN Convention on the law of the sea and the 1974 inter-
national convention for the safety of life at sea.
In September, a refugee boat with more than 200 persons was adrift
east of Malta in the Mediterranean. As requested by the Maritime Rescue
Co-ordination Center, our vessel, MV Morning Carol, remained stand-by
in case of an emergency. The crew lifted four people out of the water and
attempted to deliver food and water to the refugee boat, but unfortunately
their boat drifted away. MV Morning Carol could not approach the refugee
boat because it was too small compared to our vessel. They were rescued
by a smaller boat carrier. We do not know if the refugees were victims of
smugglers or human traffickers.
•
Supply chain risks: We have further developed our approach to identify and
address risks related to human rights in our supply chain. During 2022,
we have worked on implementing our sustainable procurement policy and
supplier code of conduct. Specifically we have strengthened our approach
towards shipyards to build and recycle our vessels because of the risk they
represent to human rights. Please see the section below on shipyards and
the sustainable supply chain in the Prosperity chapter.
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Human and labor rights
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Wallenius Wilhelmsen – Annual Report 2022
•
Shipyards and ship recycling: We have kept our focus on eliminating
adverse human and labor rights impact in the area of ship recycling for
decades. This is because vessel recycling yards are a known hotspot for
human rights violations and cases of modern slavery have been revealed.
We are one of the founding members of the Ship Recycling Transparency
Initiative, an online platform where we share information on shipping
companies’ recycling policies and practices. No vessels were recycled
in 2022.
During 2022, we also developed our approach for addressing human
rights in preparation for building new vessels. We consulted external
experts and included human rights requirements in the tender process in
line with our supplier code of conduct and procurement policy. In addition,
we will conduct ESG (Environment, Social and Governance) due diligence
audits for potential suppliers. We have already completed the tender
process to select the ESG due diligence auditor.
•
Health and wellbeing during the pandemic: The Covid-19 pandemic still
impacts our seafarers and we have worked tirelessly to ensure the safety
of our staff and to mitigate adverse human rights’ impacts. Please see the
section on health, safety and wellbeing above.
•
Discrimination and harassment: Non-discrimination and harassment
have a dedicated chapter in our code of conduct and it is integrated into
our management procedures. Please see section on diversity, equity and
inclusion (DEI) below.
•
Employee and supplier information privacy: Please see how we address
this risk in the governing elements in the principles of governance section
below.
How will we proceed?
We will develop our human rights due diligence by:
•
Continuing to raise awareness of the group’s human rights policy and
implement it in all parts of our company and towards our suppliers
•
Continuing to expand our stakeholder engagement to a wider group of
internal stakeholders and consult external stakeholders such as NGOs or
industry network
•
Updating the human rights scenarios
•
Presenting initiative and results to management and the board
•
Strengthening our assessment and monitoring of risks in our supply chain
55
People
Diversity, equity and inclusion
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Wallenius Wilhelmsen – Annual Report 2022
3. Diversity, equity and inclusion
Why is it important?
Our employees, with their diverse backgrounds and experiences, cooperate closely
every day across borders and time zones, making Wallenius Wilhelmsen a truly
global company. We aspire to be a workplace where everybody feels safe and well,
where we get the opportunity to realize the best version of ourselves and learn from
each other. Diverse and inclusive organizations are innovative, they make good
decisions and perform well. In other words: We aspire to make a rock star of every
employee by supporting all employees to:
•
Realize their full potential
•
Empower all through strong teams
•
Encourage all to drive innovation and development by challenging
status quo
In today’s society, recognition for who you are, where you are from, and that we
all bring something unique to the table, is a given. We constantly strengthen our
understanding on diversity, we mobilize and remobilize, as we continue to develop
this crucial component of our corporate strategy.
How do we work?
Our board of directors and senior management are committed to, and deeply
engaged in, the work with DEI which is anchored in our code of conduct. The code of
conduct explicitly states that discrimination based on race, color, religion, gender,
age, nationality, sexual orientation, disability, or any status protected by law is not
tolerated. We strive to provide everybody with equitable treatment and opportuni-
ties when they are recruited and promoted, as well as in their daily work.
“Happy employees are productive
employees”
Meet Silandra Makardoij, who is the general
manager in South Africa: “We have a really
great corporate culture that promotes work life
balance, diversity, mental wellbeing and equal
opportunity for all.” Makardoij is strongly commit-
ted to supporting people to develop, grow and
realize the best versions of themselves. “Through
my job, I feel that we can create a work environ-
ment of learning, innovation, and fun, where
all our employees can thrive and be the best
that they can be. With people being our great-
est assets, happy employees are productive
employees.”
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Diversity, equity and inclusion
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During 2022, we launched a new campaign called: Be a rock star of your own career,
to strengthen and motivate employees and leaders to understand that happy
employees who gets opportunities to grow and experience success in their roles
deliver better results. Leaders should help employees shine, colleagues should help
each other become rock stars. It is another way of visualizing “grow and learn.” The
concept encompasses diversity, integrity and inclusion. We monitor our employees’
perception of the working environment and our progress on developing an inclu-
sive culture through the DE&I score in our bi-annual employee survey.
We have partnered with organizations such as Women who Code, Women in Tech and
Women’s International Shipping & Trading Association (WISTA). Also, we supported
Microsoft Sweden’s program for Ukrainian refugees by inviting a group of women
to our offices as part of a crash course in IT development. One of the women joined
the technology services team as an intern in January 2023.
How did we perform?
In 2022, we reached an important milestone and we are proud to have our first female
captain. Captain Lee Eun Ran from South Korea is employed by our ship manage-
ment company and has taken command of our vessel Morning Pilot. Captain Lee is
the first female captain to be appointed within Wilhelmsen Ship Management and
only the third female captain in Korean commercial shipping history. She joined
EUKOR/WSM in 2010 as a cadet and has completed all of her maritime career to
date on Wallenius Wilhelmsen/EUKOR vessels. In addition, we have female chief
officers and chief engineers on our vessels. As there are currently only 2 percent
women participation in shipping
1
, these women are pioneers and we are already
seeing a marked increase in applications for cadetships. It is a focus area for us
to add gender diversity to the existing good diversity in nationalities and we are
focusing on creating a safe and inclusive workplace as well as retaining female
seafarers after motherhood by seeking to offer onshore jobs in the transition phase.
During 2022, we improved the gender diversity in our executive management team
by adding a new Chief People Officer. As of January 2023, a female Chief Customer
Officer was also appointed.
1 https://safety4sea.com/percentage-of-women-seafarers-unchanged-the-last-40-years/
25%
27% 23%
75%
73%
77%
50%
Americas Asia EMEA
*
Oceania
Women
Men
* Europe, Middle East and Africa
Gender mix per region – 2022
35%
65%
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Diversity, equity and inclusion
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Wallenius Wilhelmsen – Annual Report 2022
Moreover, we are continuing the work on increasing our diversity, especially amongst
production workers. The pandemic has also revealed a gap between available
labor and the number of jobs provided. We are dedicated to strengthening our DEI
work to attract talents from a wider labor market. We are implementing several
initiatives to encourage job applicants who would typically not consider our line of
business to address this disparity, but larger macro-factors such as labor short-
ages are also at play.
Of our approximately 2,500 office workers, 42 percent are women, whilst women
constitute only 18 percent of all production workers. Our industry has historically
been male-dominated and it is a priority for us to change this. We have therefore
set a target for gender ratio for office workers in senior management to at least
24/76 (f/m) for 2022 and 35:65 (f/m) by 2030 as a first step. The share of women
in senior management positions remained at 22 percent in 2022, falling short of
our target of 24 percent. The initiatives we are implementing are expected to close
this gap going forward.
To secure equity and fair pay, we conducted a global gender compensation ana ly-
sis in 2021 and during 2022, we have worked to close the pay disparity that was
identified in certain regions and for certain positions. For information regarding
our diversity and equal opportunities for our Norwegian operations, please see our
reporting in accordance with local anti-discrimination regulation.
Senior management: New hires to senior roles:
22% Women 50% Women
78% Men 50% Men
Earnings ratio
women:men
Norway
93%
Sweden
101%
United States
95%
Korea
95%
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Diversity, equity and inclusion
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Specific initiatives conducted during 2022 to strengthen work on DEI include the
following:
•
We launched a specific DEI policy to guide our work
•
We held a webinar on DEI and LGBT+ with internationally recognized
experts to increase awareness and understanding. The webinar was
attended by nearly 500 people
•
We launched an Inclusion TipKit campaign and e-learning courses to
enhance DEI and emotional awareness among leaders and new joiners
globally
•
We ran intranet campaigns on ideas to build an inclusive culture and
strengthen mental health
•
We published several articles on our intranet celebrating Pride month
As part of diversity and inclusion, we amended the US holiday calendar to include
Juneteenth and Martin Luther King Day in recognition of our African American
workforce.
How will we proceed?
Going forward, we will:
•
Conduct training on inclusive leadership and on structured-candidate
interview and selection process
•
Continue to close the pay gap
•
Establish local DEI goals that are aligned with country context, culture and
demographics
•
Introduce a DEI learning path on our learning management system with
specific required course
Diversity, equity, inclusion & belonging
We aspire to build a workplace where our people
feel they can bring their best version of themselves
– everyday, learn from each other and be appreci-
ated. Our employees are critical for us to achieve
our ambitions and our company’s future success.
Diversity, equity, integrity and belonging are central
to our business outcomes because it touches every
part of our operations and strategy. When the whole
workforce can bring their talents to the table, results
are better than when only some people can. Indeed,
diverse organizations are both more resilient and
innovative. Happy employees is the foundation upon
which we achieve desired results! Be a “rock star”
of your career! As we build #TheWalWilWay, we will
strengthen and diversify our services, helping every-
one thrive in a world that keeps surprising us.
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People
Training & Development
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Wallenius Wilhelmsen – Annual Report 2022
4. Training & Development
Why it is important?
Training and development are central to how we learn as individuals. As an orga-
nization, we prioritize the development of all employees globally. Developing new
skills and staying up-to-date in our knowledge of technical and scientific devel-
opments and best practices are important to build a strong, competitive work-
force. We believe that well-supported employees are more productive, and more
engaged in business.
How do we work?
GoGrowSucceed is the company-wide platform for employees to manage their
professional development objectives and facilitate their performance and develop-
ment check-ins with their managers. Unlike past performance reviews that ranked
individuals, GoGrowSucceed deliberately does not have a ranking system. The aim
is to foster engagement, further motivation and allow for an enhanced coaching
relationship between managers and team members. We provide our employees with
a combination of digital and in-person training sessions. Employees are required
to participate in regular trainings on the company’s code of conduct. In addition to
mandatory training sessions, the company provides open enrollment in e-courses
through iLearn, the company’s digital training platform. We aim to motivate employ-
ees to develop their own learning journey to bolster career progress.
We believe in the power of connections to support our people,
provide an improved employee experience, and help people perform
at their best.
“At the core of our company lies our people and
the company culture. Our commitment is to
build a great workplace where people feel safe,
trusted and engaged. We achieve our results
through collaboration, and everyone should feel
free to speak up without fear of repercussions.”
Wenche Agerup
CPO
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Training & Development
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How did we perform?
During 2022, we had several training and development initiatives and an overview
is provided below:
•
Code of Conduct: We ran a global reinvigorated initiative on this code. It
encompassed both office (automated) and production workers (manually).
•
Bluepoint Global leadership: We launched a global leadership development
experience program for selected team leaders. The program is designed to
optimize their leadership skills and enhance career growth potential. It is a
global program and in 2022, we had 33 participants enrolled in the eight-
month long academy-style program. Participants began their experience
with a three-day in-person program focused on leadership skills. They will
continue to work with individual coaches, personalized learning trios as
well as participating in webinars focused on critical leadership topics and
skills. The program capstone will take place in June and will be a three-day
event focusing on leading others.
•
iLearn: We enhanced the user experience by redesigning the homep-
age and updated communications. The content was enhanced through
new joiner orientation, custom courses and learning journeys. Learn-
ers completed more than 6,000 courses in 2022. This is an increase of
59.5 percent year over year and includes both required and non-required
courses. Learners spent close to 6,700 hours dedicated to their growth
and development. This is a 31 percent increase compared to 2021. In 2022,
this equates to 1.7 hours per active user.
•
Sustainability: A sustainability gamification training was launched in April
2022. The training aimed to develop a common understanding of what
‘sustainability’ means for Wallenius Wilhelmsen, what the drivers and
the benefits are. The course covered different aspects of sustainability,
our code of conduct, policies, practices and examples. We used interac-
tive learning and cases. It has been 100 percent completed by about 20
percent of learners and it is included in the onboarding training for new
employees.
•
Human Rights: We launched a gamified training on human rights on UN
Human Rights Day on December 10. The aim of this training was to raise
awareness and understanding of how we as a company impact human
rights and also how our colleagues can support them in their daily lives.
•
Cyber security training: We updated the 2021 gamified training on cyber
security to keep abreast of developing challenges. The training was
launched in November 2022 and so far, about 10 percent of the learner
population have completed the training.
How will we proceed?
In 2023, we will continue our transition to digital learning, enhancing our ability to
deliver new knowledge and skills to all our colleagues, regardless of their location.
Planet
The world faces a climate crisis, and there is an
urgent need for action. By decarbonizing operations
and reducing our environmental footprint, we will be
a part of the solution, not the problem. As a leading
provider of logistics services, both on land and at sea,
we work to minimize and responsibly manage our
environmental impact. Wallenius Wilhelmsen adheres
to the scientific consensus on climate change and
supports the Paris Agreement.
Contents →
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Planet
Greenhouse gas emissions (GHG) and climate risk
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Wallenius Wilhelmsen – Annual Report 2022
To manage our impacts on the planet, we monitor, manage and report on four
material topics:
1. Greenhouse gas (GHG) emissions and climate risk
2. Biodiversity
3. Air quality
4. Waste management
1. Greenhouse gas emissions (GHG) and climate
risk
Why is it important?
Nearly all (99 percent) of our scope 1 CO
2
e emissions relates to our seagoing
transportation. Although shipping in general has a much lower carbon intensity
per tonnes-km transported than air and land-based transportation, it constitutes
three percent of annual CO
2
emissions globally. To most, there are no alternatives to
seagoing transportation. International shipping carries about 90 percent of world
trade, and the volumes of goods are predicted to increase significantly toward 2050.
Our industry faces a clear call to decarbonize from our stakeholders:
•
Elevated pressure from consumers: The consumers’ increasing conscious-
ness around how their consumption contributes to climate change drives
our customers to seek new ways to reduce their carbon emissions, includ-
ing those related to the transportation of finished products. Decarbonizing
supply chains is becoming the new frontier.
•
Attracting talent: Our employees increasingly communicate that they
want to work for a company that is aligned with their values. To attract and
retain talented people with a diversity of skills, backgrounds and expe-
rience, this is particularly important in the current tight labor market.
Sustainability is a powerful attribute in attracting employees.
•
Tightening regulatory requirements: Technical (Energy Efficiency Existing
Ship Index) and operational (Carbon Intensity Indicator) IMO regulations
come into effect and impact the shipping fleet. In addition, maritime trans-
portation will be included in the EU Emissions Trading Scheme, putting
a price on each tonne of carbon emitted. IMO is also likely to introduce a
carbon pricing mechanism in the near future.
•
Increased scrutiny from investors and other financial stakeholders: Banks
and fund managers are adapting their portfolios to be aligned with e.g. the
EU taxonomy and the Paris Agreement.
Wallenius Wilhelmsen is the leading player in global RoRo shipping and finished
vehicle logistics. As an important infrastructure player, we have the ambition to be
a “shaper” of the race towards zero emission, not an “adaptor.” This way we can
build a lasting competitive advantage.
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Planet
Greenhouse gas emissions (GHG) and climate risk
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Wallenius Wilhelmsen – Annual Report 2022
How do we work?
The best way to meet our obligations is to set ambitious targets that lead us towards
a zero emissions future. Our environmental policy is at the center of our manage-
ment approach.
To strengthen how we manage our transition to zero emissions, the company will
assemble a task force named the “Orcelle Accelerator” in early 2023. The task force
will consist of dedicated resources and report directly to the CEO.
Milestones on our decarbonization journey:
The ambition to reduce CO
2
e emission intensity by 27.5 percent by 2030 (compared
to 2019) is in itself an ambitious challenge, going beyond regulatory requirements.
To meet this target, we will need to increase energy efficiency on existing vessels,
utilize biofuels in our existing fleet, while investing in new, zero emission, enabled
assets (e.g. vessels and trucks) and zero emission equipment and power at our
terminals and processing centers.
The CO
2
e intensity reduction target is integrated into our overall business strat-
egy. We work diligently on a day-to-day basis to minimize our emissions – through
investments in known and emerging technologies and in collaboration with part-
ners who share our ambitions to transition to a zero carbon industry.
Our goal is to ensure a resilient and competitive business model, while doing our
part to mitigate the climate crisis and reduce the emissions from global trade.
Rather than focusing strictly on factors we can directly control, we have voluntarily
committed to a target which is largely dependent upon external developments, such
as future propulsion technologies, fuels and fuel infrastructure.
We also need to invest in vessels with new propulsion technology and fuel types
before the end of the decade. Zero emission technology on propulsion and fuel
needs to be developed and made globally available. These considerations form
an integrated part of our newbuilding strategy, which will be completed in 2023.
Going into 2023, we will begin to build one net-zero end-to-end service, aimed to
be launched by 2027. To reach this ambitious milestone, we will invest in vessels
capable of utilizing net-zero carbon fuels at delivery. Further, we need to secure
renewable energy and install net-zero emissions equipment at terminals and
processing centers.
2023
All new equipment at
terminals and yards to
be zero emissions
2027
One net-zero emissions
end-to-end service by
2027
2030
27.5% reduction of
carbon intensity
2025
All owned vessels equipped
for zero emissions at berth
2050
All our energy will
be from sustainable
sources
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Greenhouse gas emissions (GHG) and climate risk
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Wallenius Wilhelmsen – Annual Report 2022
This will require the support of our customers, and we will actively engage our
customers on our approach.
We will continue to improve our Carbon Compass 2.0 tool so we can integrate data
and accurately monitor emissions across all transportation modes. We also need
to establish a traceable, third-party verified process for mass balance calculations.
Reducing our CO
2
e from trucking services, terminals and
processing centers
For our logistics activities, which include terminals, EPCs and VPCs, we are intro-
ducing many initiatives to improve our energy efficiency in buildings and reduce
direct emissions. The majority of direct GHG emissions from logistics services are
related to fossil fuel powered equipment such as forklifts and trucks used to move
cargo, and also mini-vans used for crew transportation.
Our clean fleet initiative requires that all equipment purchased as of 2023 will be
zero emission. In addition, we will build charging infrastructure for our on-site equip-
ment and contribute towards building on-site renewable energy production, such
as wind turbines and solar panels. We will also shift our purchasing of electricity
to prioritize renewable and low-carbon sources to lower our scope 2 emissions. As
part of the clean fleet initiative, we purchased several electric heavy duty forklifts
in 2022. After an extensive trial period at our Baltimore facilities, more such fork-
lifts will be procured to start replacing our conventional diesel powered forklifts.
Unfortunately, long lead-times for delivery of the electric equipments affects the
rate of replacement.
In 2022, we stepped up our efforts to reduce our carbon emissions from land-
based operations by partnering with the company Einride to pilot electric trucks in
Georgia, USA. The initial phase of the new joint project was launched in Savannah,
Georgia, and includes the lease of three e-trucks which will be used for regular
shuttle moves between the port of Savannah and our equipment process facility
in nearby Pooler, including local dealer deliveries. Our ambition is to increase this
number up to 30 e-trucks by 2026, if initial tests yield satisfactory uptime, opera-
tional capacity and demonstrate the potential for scale that our customers need.
Orcelle Wind
Our flagship R&D project is to develop a
wind-powered pure car truck carrier, the Orcelle
Wind, with a design capability of reducing CO
2
e
emissions by as much as 90 percent on a single
voyage.
The concept is undergoing in-depth commer-
cial, operational and technical studies to ensure
viability prior to final investment decision.
Read more about this project in the Innovation
chapter under Prosperity.
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Greenhouse gas emissions (GHG) and climate risk
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Wallenius Wilhelmsen – Annual Report 2022
In 2022, we focused on screening different technical solutions to identify those
with the greatest potential to increase the energy efficiency of our vessels. We
also initiated new partnerships to explore technologies to implement and lay the
groundwork for future cooperation.
This year, we became the first global shipping company to adopt a fully AI-based
approach to voyage optimization. We implemented live-streaming of vital data
onboard five vessels at the end of 2022, with implementation of an additional 60
vessels within the first quarter of 2023. The team from RaaLabs, the Oslo-based
company owned by Wilh Wilhelmsen, developed and delivered the data acquisi-
tion infrastructure to our vessels. This new approach is expected to help reduce
fuel consumption by up to 10 percent. By sourcing the data through the cloud
and running it through a complex mathematical model, the company DeepSea
Analytics’ AI system ultimately provides the vessel captain with detailed instruc-
tions regarding optimal route and vessel speed. This solution delivers instructions
which no human could predict no matter how much experience s/he has. This will
in turn reduce fuel consumption with corresponding reductions of CO
2
emissions
and also strengthen safety.
A priority in 2022 was to achieve a granular understanding of how our vessels and
fleet can be developed to contribute to our carbon intensity target as well as the IMO
regulation on Carbon Intensity Indicator (CII) which entered into force in January
2023. The work involved enhanced monitoring of vessel emissions and the prepa-
ration of vessel-specific improvement plans in cooperation with ship management
service providers. 2023 and the following years will be focused on implementing
these solutions and will lead to fuel savings and emission reductions.
Keen Transport is partnering
with Einride to pilot electric
trucks in Georgia.
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Greenhouse gas emissions (GHG) and climate risk
Contents →
Wallenius Wilhelmsen – Annual Report 2022
We have for many years had a very strong bio-fouling management policy. This is
an important topic that received much attention in the industry in 2022. A clean
hull reduces fuel consumption and we perform continuous monitoring of hull
antifouling condition, as well as on-demand hull cleaning and propeller polishing
to reduce drag and lower subsequent fuel consumption. At the same time, these
measures reduce the risk for transfer of invasive species into new environments.
You can read more on how we we work on the topic of invasive species in our Biodi-
versity chapter below.
This year we strengthened our policy for keeping optimum trim and ballast for
our vessels. A new dashboard for monitoring and alerts of suboptimal conditions
ensure better control and follow up of vessels with potential to improve their float-
ing conditions and lower the required engine power output.
We are collaborating with our suppliers to evaluate and implement equipment
upgrades and retrofits of our vessels, these include:
•
Develop retrofit of new propeller hub caps (propeller boss cap fins, PBCF):
The initiative will improve the propulsion efficiency hence lower fuel
consumption. This upgrade is relevant for more than 30 of our vessels and
several were already completed by year end. Maker upgrades available to
the engines is another example that lowers the engine’s specific fuel oil
consumption.
•
Improve hydrodynamic with bulbous bow retrofits: We are also working
on, and evaluating, the possibility to retrofit the bulbous bow on some of
our vessels when they next time go to dry-dock. The aim is to improve the
vessels’ operating conditions and remaining lifetime.
•
Upgrade variance frequency drives (VFD) to lower onboard energy
consumption: We are upgrading many of our vessels with variable
frequency drives (VFD) for onboard main pumps and fans. These
frequency converters enable the equipment to operate dynamically
according to actual load demand, thus lowering energy consumption. This
year we entered into a frame agreement with a supplier and started the
work to prepare for installations which are planned for the majority of our
owned vessels.
Installing A.I system
onboard Thalatta
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Greenhouse gas emissions (GHG) and climate risk
Contents →
Wallenius Wilhelmsen – Annual Report 2022
•
Optimize the operation of main and auxiliary engines: We have engaged
a supplier of a smart digital tool that will help us to continuously monitor,
assess and calibrate the performance of the main and auxiliary engines
on most of the vessels in our fleet. Roll out of this solution started towards
the end of the 2022.
These ongoing operational and technical initiatives are critical to meeting our carbon
intensity target. Together with our newbuilding strategy, which will be launched in
2023, and the Orcelle task force’s objective of setting up a zero emission end-to-
end service, it forms the foundation of how we work to lead the journey to zero
emissions. We will also invest in carbon neutral fuels, such as biofuels, to meet our
carbon reduction commitments and comply with the CII regulation. Green certifi-
cates and carbon credits will also be part of the solution.
As biofuel is costly and in high demand, we will in 2023 conclude a fleet-wide study
to understand which vessels and trades should be prioritized to receive biofuel in
order to maximize the benefits and to ensure that we meet CII requirements. In
other words, we need to ensure that we get biofuel on the right vessels at the right
time. Simultaneously, we are in dialog with suppliers to secure access to the fuel
volumes required. We will not invest in transitional fuels such as LNG. We plan to go
directly to fuels that offer a significantly larger green house gas reduction potential.
How did we perform?
In 2022, our CO
2
e intensity (EEOI
1
) was 30.38, a significant reduction compared to
our 2021 performance of 33.51 gCO
2
per tonne-km. Our total CO
2
e emissions from
shipping in 2022, 4.51 million tonnes, was comparable to our performance in 2021
of 4.58 million tonnes. The improved CO
2
e intensity is mainly due to an increase in
cargo work compared to last year, in addition to our continuous focus on energy
efficiency.
Our EEOI target for 2023 is 31.16, with the ambition to further reduce our CO
2
e inten-
sity to 24.16 in 2030 to meet our 27.5 percent intensity reduction target.
1 Energy Efficiency Operational Indicator, gCO
2
e per tonne-km
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Greenhouse gas emissions (GHG) and climate risk
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Wallenius Wilhelmsen – Annual Report 2022
In 2022, our total Scope 1 CO
2
e emissions were 4.54 million tonnes, of which 99.4
percent were related to shipping. From our logistics segment, CO
2
e emissions
increased from 6,200 tonnes in 2021 to 28.3 thousand tonnes in 2022. This devel-
opment is due to including emissions from our land-based trucking services of
our Keen brand. Keen operates approximately 120 semi-trucks and was acquired
in late 2017. Logistic’s direct (scope 1) CO
2
emissions are related to combustion
of diesel and petrol fuels for semi-trucks fork-lifts and on-site vehicles, such as
crew-transporting mini-vans. Ninety-six percent of scope 1 emissions in logistics
are related to diesel and petrol consumption for transportation, while the remain-
ing 4 percent is related to the use of natural gas and propane. Natural gas is used
for heating and heat treatment of cargo, whilst propane is mainly used in forklifts.
Tonnes Scope 1 CO
2
per energy source
Scope 2 emissions from logistics was approximately 4000 tonnes CO
2
e in 2022.
Managing climate risks and opportunities
Climate change creates potential risks for our business, but it also presents oppor-
tunities. Both are part of the company’s long-term strategy, and are assessed regu-
larly as part of our overall risk management. In 2021, we conducted workshops to
identify climate risks and opportunities across the company, following the recom-
mendations of the Task-force on Climate-related Financial Disclosures (TCFD). This
initial assessment included desktop research to identify industry-specific risks and
opportunities, and potential timeline of each risk and impact. Please see our TCFD
index for further information.
We expanded this work in 2022 and the risks and opportunities were reassessed,
categorized and prioritized. The ranking methodology, which is based on the
upcoming EU Corporate Sustainability Reporting Directive (CSRD), considered the
potential impact on Wallenius Wilhelmsen in three different time horizons – short,
medium and long term. The results of this exercise were captured in a Climate Risk
and Opportunities register. Please see high level overview below.
Two climate risk scenarios are used in the assessment of physical climate change
risks based on the Intergovernmental Panel on Climate Change (IPCC) Represen-
tative Concentration Pathways (RCP) 2.6 and 8.5. These represent a future global
temperature of well below 2°C and 4°C respectively and provide a structured and
disorganized scenario. Projected climate data has been sourced from CMIP6 for
the years 2030 and 2050.
81.2%
21,700
14.9%
3,985
1.9%
518
0.1%
37
1.8%
471
Petrol
Diesel
Propane for transportation
Propane for heating
Natural gas for heating
Total:
26,711
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Greenhouse gas emissions (GHG) and climate risk
Contents →
Wallenius Wilhelmsen – Annual Report 2022
Technological Social Economic Environmental
Failure to supply adequate
renewables leading to
stranded assets
Failure of renewable technology
leading to stranded assets
Self-generated renewables
to ensure supply
Customer sentiment - cutting
scope 3 in their supply chain
Regionalization of customer
production.
Exposure of supply chain to
increased charges e.g. tolls,
emissions tax
Consumer sentiment – shift
towards low carbon product
Reduced access to and cost of
capital due to high emissions
Improved access to and cost of
capital due to lower emissions
Temperature extremes
leading to increase fuel
use & emissions
Overview – Transition Risk
Short – < 1 year
Medium – By 2030
Long – By 2050
Impact
Emissions policy & taxes
Risk
Opportunity
Explanation
Impact Continuation of the use of resources Dependency on the use of resources
Critical Impossible, very costly or unavailable in the short term Strong adverse reaction currently or very likely in the future
Significant
Possible, but costly in the short term, very costly or lacking
in the medium term, impossible in the long term
Adverse reaction currently, strong adverse reaction likely
in the future
Important
Possible in the short term, costly in the medium term,
very costly in the long term
Negative reaction currently, adverse reaction likely in
the future
Informative
Possible in the short, medium and log term Signs of negative reaction currently in the future
Minimal
Without consequence in the short, medium and log term Neutral / no reaction currently and likely in the future
Short
<= 1 yr
Medium
by 2030
Long
by 2050
Impact
Area Sub-category Description
Physical
Chronic & Acute Port Flooding
Acute
Business Interruption/ days down due to weather events
Increased insurance costs due to increased abnormal weather
Increased weather-related accidents
Heat stress on vessel crews and production workers
Increased weather-related damage to infrastructure, cargo and equipment
Variation of speed to make up time lost due to abnormal weather
Increased safety requirements due to increased abnormal weather
Increased traffic interruption due to increased abnormal weather
Overview – Physical Risk
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Greenhouse gas emissions (GHG) and climate risk
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Wallenius Wilhelmsen – Annual Report 2022
How will we proceed?
The following initiatives have been prioritized for 2023:
•
Continuous implementation of operational improvements and technical
upgrades on our vessels and land-based facilities to meet our climate
targets
•
Establish the “Orcelle Taskforce” with the goal of enabling a net-zero
emission end-to-end service by 2027
- Establish resources, governance, roles and responsibilities
- Order zero emission capable vessels
- Secure letters of intent for zero emission fuel upon delivery
- Establish a 3rd-party verified model for emission data and mass
balancing
•
Further enhance our climate risk and opportunities assessment by:
- Test the resiliency of our business model against two different
temperature scenarios
- Quantify the financial impacts of our climate risks and opportunities.
EU Taxonomy eligibility
To achieve its Green Deal and target for Europe to become climate neutral by 2050,
the EU has developed a classification system – a “taxonomy.” The purpose is to:
1. Reorient capital flows towards sustainable investments
2. Systematically integrate sustainability into risk management
3. Promote transparency in economic and financial operations by defining
sustainable activities through a “common language”
For 2021, we assessed and identified the portion of turnover, Capex and Opex, that
can be considered eligible. Norwegian companies are not required to report on
taxonomy alignment for 2022. We are working towards reporting on the alignment
criteria and our current status is provided in the sustainability statements.
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Planet
Biodiversity
Contents →
Wallenius Wilhelmsen – Annual Report 2022
2. Biodiversity
Why is it important?
The importance of protecting the planet’s biodiversity is critical to preserving a
healthy ecosystem that can sustain society. This is also called biosecurity and is
receiving increased attention. As a global logistics provider, we have an impact on
biodiversity in many ways, especially life below water. Our most important aspect
includes invasive species in our cargo, ballast water and through hull fouling, and
our vessels’ impact on whales and other cetacean species.
How do we work?
We manage our impact on biodiversity in several ways, including waste avoidance
and reduction, and avoiding sensitive areas on our journeys. Most importantly, we
strive to reduce the risk of spreading invasive species through ballast water treat-
ment systems and anti-fouling programs, adhering to our strict anti-fouling stan-
dard and ballast water management policy.
Whale protection
Whales are endangered species and whilst no longer at risk of being hunted, their
feeding and migration routes are often located close to major ports and often
overlap with shipping lanes. They are therefore vulnerable to collision with vessels
and could be impacted by noise pollution. We adhere to mandatory regimes on the
Americas’ east coast which include reporting when entering key whale habitats,
fixed and temporary speed reduction and slow zones. On the west coast of the US,
our efforts to adhere to voluntary speed reduction measures received a gold award
in 2022 by the Blue Whales and Blue Skies program. Together with a few other ship-
ping companies, we introduced a new voyage passage around Sri Lanka to protect
blue whales during their feeding and breeding areas. We engage electronic chart
displays and information system (ECDIS) suppliers to add voluntary speed reduc-
tion regions to electronic maps, although it is not easy to keep updated with the
movements of the whale populations.
None of our land-based operations are reported to be near protected or sensitive
areas.
“Together with a few other liner companies, we decided
to make our own routes around the southern tip of Sri
Lanka to avoid interfering with the blue whale feeding
and spawning ground. We follow a new route to go clear
of the blue whales for a sustainable future for whales
and other mammals in the oceans around the globe.”
Captain Filip Svensson
Senior Safety, Quality & Security Manager at
Wallenius Wilhelmsen Marine Operations Management
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Biodiversity
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Wallenius Wilhelmsen – Annual Report 2022
Invasive species
We continued to manage our impacts on biodiversity by installing nine compa-
ny-owned vessels with ballast water treatment systems (BWTS) in compliance
with regulations. By the end of 2022, 83 percent of the company-owned fleet had
a BWTS installed. The remainder of the owned fleet complies with requirements
through ballast water exchange. 100 percent of the owned fleet is enrolled in our
hull biofouling management program. Guided by our biofouling management policy,
our management program includes regular underwater inspection, hull cleaning,
propeller polishing and dry-docking.
Effective management of biofouling on the vessels’ hull reduces drag and lowers
the fuel consumption needed to maintain optimal efficiency. In addition, it is import-
ant to minimize the risk of carrying invasive species to new areas. We have contin-
ued our long-standing collaboration with Jotun and Kongsberg Maritime and are
committed to the roll out and use of the state-of-the-art Hull Skater hull inspection
and cleaning robot for proactive hull cleaning. This will take biofouling manage-
ment to the next level and ensure that our vessels’ hulls are as clean and efficient
as possible. We have the ambition to use this technology for many vessels in the
fleet and by year end more than ten vessels were already prepared for the hull
skating solutions service.
We are also at risk of carrying invasive species, such as snails and bugs as well as
seeds, in the cargo we transport and this is a growing international concert. Take the
Brown Marmorated Stink Bug (BMSB) as an example: The bug is native to East Asia,
but has now migrated to the US, Canada and Europe, where it ruins crop harvests
and has had significant economic impact. Measures are being taken to prevent
the BMSB from entering Australia, New Zealand, Papeete and Nouméa, where its
impact on the ecosystem would be catastrophic. We have established a Biosecu-
rity Management Plan to reduce this risk. All cargo travelling to these destinations
during the season must undergo either a heat treatment or a stringent fumiga-
tion process. We also inspect for BMSB findings during treatment sessions before
shipment – as well as count findings onboard the vessel during sea voyages. See
our webpage for further details.
Peak season is from September to December, but it can be hard to predict depend-
ing on seasonal temperatures. The bugs hibernate during wintertime.
“Australia and New Zealand are the countries
with the most stringent rules and regulations
regarding biosecurity. We have focus on the
brown marmorated stink bug (BMSB) season
and the treatments and inspections required
to comply with Oceania regulations.”
Henrik Meyer
Senior Manager Operational Excellence Quality
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Biodiversity
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Wallenius Wilhelmsen – Annual Report 2022
Water consumption
Water scarcity is an increasing environmental challenge due to the effects of climate
change. Use of potable water on our vessels is mainly limited to consumption by
crew, such as bottled drinking water (reusable bottles) or for other purposes, such
as showering and cooking, which is produced from seawater onboard the vessel.
However, our land-based operations consume water from municipal sources. This
water consumption can in some instances be significant, especially on sites that
offer vehicle cleaning services. In 2022 we performed a high-level stress test of
selected land-based assets to map exposure to water stress. The mapping identi-
fied
2
two sites that are located in areas with ‘extremely high’ water stress, and eight
in areas with ‘high’ water stress. All sites are located in either USA, UAE or Australia.
We strive to minimize water consumption at these facilities and to reuse water if
possible. We also collect and use rain water at some sites.
The mapping of facilities in water stressed areas and subsequent water consumption
is focused on those facilities that already internally report their water consumption.
How will we proceed
•
Conduct biodiversity impact assessment and set goals and take actions to
reduce material identified impacts.
•
In 2023, we plan to do a mapping of all facilities and prioritize collecting,
monitoring and reporting the water consumption for the facilities located
in areas with high or extremely high water stress.
2 WRI Aqueduct Water Risk Atlas
Water stress
High Extremely high
Water consumption in 2022 (mega liters) 6.1 13.0
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Air quality
Contents →
Wallenius Wilhelmsen – Annual Report 2022
3. Air quality
Why is it important?
Our environmental impacts extend beyond CO
2
. SO
X
and NO
X
are contributors
to acid rain which is harmful to ecosystems and can have an adverse impact on
human health. NO
X
also reacts with other pollutants in the presence of sunlight
to form ozone, which at high concentrations can damage vegetation. We have a
responsibility to reduce our emissions of SO
X
and NO
X
and strictly adhere to global
regulations regarding the emissions of these gases.
How do we work?
We were a founding member and leader of the Trident Alliance, a coalition of ship
owners and operators who share a common interest in effective enforcement of
maritime sulfur regulations and who are willing to collaborate to help mitigate the
problem. The Trident Alliance is now inactive, following the introduction of the IMO
global sulfur cap. We comply with the IMO global sulfur cap which came into force
on January 1, 2020. The requirement mandates a limit of 0.50 percent sulfur for all
areas that are not already at 0.1 percent.
Wallenius Wilhelmsen complies with IMO regulations using very low sulfur fuel
oil (VLSFO, <0.5 percent) or low sulfur marine gas oil (LSMGO, 0.1 percent max)
on ships where scrubbers are not installed. In the scrubbers we use, the exhaust
gases are brought into contact with seawater by spraying it into the exhaust stream.
Through several chemical reactions, the sulfur is transformed and released to sea
as sulphates. In addition to sulphates, the scrubber wash water may also contain
elevated concentrations of other pollutants, including heavy metals and organic
substances. We are investigating how we can measure the impact on water quality
from the release of scrubber wash water. All scrubbers installed on our vessels are
hybrid, meaning they can operate both in open and closed loop mode. The scrub-
bers significantly reduce SO
X
emissions to air, in addition to Particulate Matter (PM).
Improving our operational efficiency will further reduce our sulfur emissions as we
become more energy efficient and use less fuel. Wallenius Wilhelmsen is consid-
ering a number of different fuel and engine technologies for the future. A shift to
biofuels or zero emission fuels, such as methanol or ammonia, would drastically
reduce, and potentially eliminate, our emissions of SO
X
and PM to air.
To avoid emission to air of particulate matter (PM 2.5 and 10) at berth, we are commit-
ted to having all our owned vessels – by 2025 – equipped to utilize shore power where
available. By powering our ships with electricity during loading and unloading of
cargo, we can eliminate the emission of particulate matter to our surroundings.
Our logistics operations have limited emissions to air. Emissions sources are
confined to hydrocarbon powered equipment, vehicles and some natural gas or
propane-fired heating systems for buildings.
How did we perform?
In 2022, total SO
X
emissions of our ocean shipping fleet were 11,084 tonnes. This is
an increase of 4 percent from 2021. The average sulfur content of fuel for the ocean
fleet was similar as in 2020, 0.37 percent vs 0.39 percent in 2022. Twenty-four of our
owned vessels are equipped with a scrubber. There are no more scrubber instal-
lations planned for the fleet.
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Planet
Waste management
Contents →
Wallenius Wilhelmsen – Annual Report 2022
4. Waste management
Why is it important?
Proper waste management is crucial for protecting public health and the environ-
ment. It involves the collection, transportation, treatment and disposal of waste in
a manner that minimizes negative impacts. Improper waste management leads
to littering, air and water pollution, and the spread of disease, as well as damage
to ecosystems and wildlife. On the other hand, effective waste management can
reduce greenhouse gas emissions and conserve resources. By promoting sustain-
able waste management practices, we can create a cleaner, safer, and healthier
world for current and future generations.
How do we work:
Wallenius Wilhelmsen promotes proper waste management and strives to reduce
waste at source, recycling, properly disposing hazardous waste, and educating
employees on the importance of waste reduction and proper disposal methods.
How did we perform?
Our ocean fleet landed 7,177 m
3
of waste to shore reception facilities in 2022, of
which 2,217 tonnes were plastic. Waste from logistics services was reduced this
year compared to 2021, from 4,856 tonnes to 4,385 tonnes in 2022. We sort all our
waste as far as possible and use reputable waste reception services to ensure that
our waste is responsibly handled. We will also work to reduce waste production and
minimize waste going to landfills.
We were also the first carrier to partner in a port waste reception facility transpar-
ency initiative. The initiative entails providing vessels information on ports’ waste
management abilities and allow vessels to plan disposal of different types of waste
in ports which have facilities to recycle or incinerate it.
Wallenius Wilhelmsen and Wilhelmsen Ships Service
have a groundbreaking pilot underway: The initial goal
is to collect and handle 10,000 tons of ropes annually.
200-meter long vessels use a lot of mooring ropes during
their lifetime. Thus far most retired ropes end in landfills or
are burned. There has not been a sustainable rope return
system available.
“Keep in mind, these ropes are made from virgin plastic.
They are only in the initial phase of the lifecycle as fibers,
maybe we can build a functional and sustainable value
chain containing a series of plastic products,” says Tore
Strand, subject matter expert ropes at Wilhelmsen Ships
Service.
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Waste management
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Wallenius Wilhelmsen – Annual Report 2022
How will we proceed?
In 2023, we will continue to assess ways to reduce waste production, minimize
waste going to landfills and increase the share of waste that is recycled or recov-
ered for energy.
Preserving
biodiversity
Minimizing
waste
Protecting
cetaceans
Supporting
research
•
Industry leader in
hull-fouling manage-
ment through collabo-
ration with innovators to
develop new techniques
for hull monitoring and
cleaning
•
Pioneered measures for
cargo-borne invasive
species prevention and
treatment
•
Installed IMO ‘D2’
discharge standard
compliant ballast water
management systems
across owned fleet
•
Longstanding leader on responsible
vessel recycling, co-founder of Ship
Recycling Transparency Initiative, SRTI
•
Co-founder of the ‘Show me the Plastic’
initiative to reduce packaging left onboard
•
First carrier to partner in port waste
reception facility transparency initiative
•
Partner in developing of mooring rope
recycling initiative
•
Multi-year supporter of World Ocean Day
with numerous related beach clean-ups
•
Installed water fountains across owned
fleet to eliminate single-use plastic bottles
•
Owned vessels equipped with segregated
waste compactors for better recycling
•
Gold Award recipient
in 2020 Blue Skies Blue
Whales program
•
Successfully pushed
ECDIS suppliers to add
VSR areas to electronic
charts as standard
•
New route course imple-
mented for all vessels
further south of Sri Lanka
to avoid blue whale
breeding areas
•
Seek to adhere to all
Voluntary Speed Reduc-
tion measures
•
First carrier to join Woods
Hole Oceanographic Insti-
tute’s Science Research
on Commercial Ships, alias
‘Science RoCS’ initiative
•
Deploying free-drifting and
vessel mounted instruments
to monitor the vast and open
ocean
Prosperity
We will continue to create long-term value whilst contributing to local and
global economic, environmental and social progress. Our success is tied
to the economic well-being of society and we strongly believe our business
activities should contribute to sustainable value creation, societal prosperity
and the UN Sustainable Development Goals (SDGs). Prosperity is also tightly
aligned with the financial value we as a company generate for shareholders,
employees and society as a whole. For instance, the strategic work we have
done on sustainable finance during 2022 helps secure long-term economic
growth through the implementation of decarbonization initiatives that drive
the company’s emissions towards zero.
By solving some of our industry’s greatest challenges, we create prosperity
for our employees, customers, partners, shareholders and the communities
in which we operate.
Contents →
78
Prosperity
Innovation
Contents →
Wallenius Wilhelmsen – Annual Report 2022
To manage our impact on global prosperity, we monitor, manage and report on six
material topics:
1. Innovation
2. Quality of service
3. Sustainable consumption
4. Sustainable supply chain management
5. Tax practices
6. Sustainable finance
1. Innovation
Why is it important?
Innovation is necessary to succeed with our zero emissions goals. Our search for
innovative solutions not only improves operations, it also increases our commer-
cial advantages while creating value and new opportunities for our employees,
customers, investors and suppliers. Please see “Our strategy” section in the chap-
ter Message from the board for further information.
How do we work?
Digital product innovation is managed by our digital accelerator team (DA 1.0) who
works according to the principles of lean start-up and agile to develop innovative
digital goods in the following six strategic areas:
•
Inspection and quality with AI-powered computer vision
•
Boost supply chain management with data and AI
•
Mixed-reality powered services, audits and training
•
Automation and robotics for inventory, asset and safety
•
Logistics services for multi-modal, last mile and fleet management
•
Cooperation with research and science organizations to plan, identify and
test new areas of innovations supporting our decarbonization ambitions
Playbook to Innovate and Operationalize Digital Goods:
Find & execute
Ideas & Solutions
Validate Value
& Viability
Product Launch
Scale & commercialize
P
r
e
-
I
n
c
u
b
a
t
i
o
n
S
o
c
i
a
l
i
z
e
I
n
c
u
b
a
t
e
O
p
e
r
a
t
i
o
n
a
l
i
z
e
Explore & develop
Ecosystem
79
Prosperity
Innovation
Contents →
Wallenius Wilhelmsen – Annual Report 2022
How did we perform?
We continued to successfully drive a digital business culture shift which is a trans-
formation essential for us to reap the full benefits of digital innovations like AI,
machine learning and computer vision.
By the end of 2022, our Digital Playbook approach yielded several digital products
and platforms currently at different stages of operationalization:
Our digital products pipeline
Pradeep Garg and Hayley Roy Gill of Wallenius Wilhelmsen accept
the Corporate Innovation Award at the Silicon Valley Summit hosted
by Plug And Play, a leading innovation platform, in recognition of
Wallenius Wilhelmsen’s distinctive approach to promoting innovation
through its unique playbook approach driving innovation.
In Incubation Viable for production Limited Production, ready to scale
1 Safety training deploying VR to address
multilingual needs.
Asset Tracking Quality Check
2 Self-instructed employee training tool
using AR.
ErgoSafe Remote Assists & virtual visits
3 ID-powered digital wallet managing
rewards and recognition.
Vessel Voyage Geo Tracking Mobile Inspection
4 Private wireless network for reliable
operations and provisioning new services.
Competitor Insight Booth Inspection
5 Predicating Port Congestion for better
vessel capacity utilization, lower emissions.
Electrification of Fleet Port Intelligence
6 Logistics orchestration to replace legacy
solution for SCM contracts.
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Innovation
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Wallenius Wilhelmsen – Annual Report 2022
Throughout the year, the digital accellerator (DA) team continued to build the compa-
ny’s digital maturity, enabling us to create products, at scale, through increased
capacity and improved processes. The team also developed key learnings and
added two new roles (innovation champions) to help orchestrate complex global
partnerships and embed learnings into our digital business culture.
Partnerships and industry engagement are critical ingredients for our innovation
approach. The Orcelle Wind remains our flagship innovation project and partnership.
The Orcelle Wind is a wind-powered pure car truck carrier, a type of deep-sea Roll
On/Roll Off vessel. It will be 220 meters and have a capacity of ~7,400 cars. It will
also be capable of carrying breakbulk and rolling equipment. In 2022, Wallenius
Wilhelmsen and project partners were awarded EUR 9m from Horizon Europe to help
bring this project from concept to reality. This includes the installation of a land-
based test rig in 2023 and a test rig (a one wing sail) to be installed and tested on
an existing vessel in 2024. Orcelle Wind is a crucial part of Wallenius Wilhelmsen’s
fleet decarbonization strategy and the ambition is for the vessel to commence
sailing in 2027. There will be critical learning points to be taken from this project.
In 2022, we also partnered with the company DeepSea Technologies for the imple-
mentation of a suite of services using AI for voyage optimization. The goal is to reduce
CO
2
emissions. In addition, we partnered with the company Acceleron to support the
implementation of a fleet-wide solution on engine performance and optimization.
Orcelle Award continues to foster innovation in our industry
Since 2012, Wallenius Wilhelmsen has been a global partner and sponsor of Ocean
Exchange, a non-profit organization that finds, funds and fosters sustainable mari-
time innovations. Every year, Ocean Exchange and Wallenius Wilhelmsen host a
competition for the Orcelle® Award of USD 100,000 which goes to an innovative
solution that demonstrates the greatest combined sustainable and economic
value to our business. Over this decade, we have awarded just over USD 1 million
in funding and attracted innovators to our cause.
“Our products and solutions going forward will
be a combination of physical assets – powered
by electric, made smart with IoT, optimized by AI
– and orchestrated by people.”
Roopesh Das
SVP digital accelerator
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Innovation
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Wallenius Wilhelmsen – Annual Report 2022
Spanish-based startup BeePlanet Factory won the 2022 Orcelle Award. BeePlanet
Factory has a versatile and powerful green energy solution that is based around
creating a second life for electric vehicle batteries. This can provide an intriguing
fit with some of our own strategic interests surrounding full lifecycle logistics and
electric vehicles. BeePlanet Factory currently manufactures second-life lithium-ion
energy storage systems from 4kWh to +1MWh capacity with different applications for
a variety of commercial and industrial sectors, including solutions to address growing
electric vehicles’ rapid charging needs. The aim is to provide a more affordable and
sustainable energy solution, while also increasing the uptime of electric vehicles.
With the USD 100,000 that comes with the Orcelle Award, the BeePlanet Factory
team plans to refine their battery design to meet UL Standards, which they will need
to enter the North-American market. They are also looking at running a pilot based
on their current operations to see how their batteries would interact in an existing
electric vehicles’ charging ecosystem.
We also seek to contribute to scientific research and and continued our collabora-
tion with the Science Research on Commercial Ships (Science RoCS) of the Woods
Hole Oceanographic Institute. This involves installing sensors on seawater pipelines,
and in 2023, we will install instrumentation systems onboard one of our vessels,
Tysla, to draw air and water samples which will be analyzed for CO
2
content. This
will provide insight on the rate of CO
2
uptake in different parts of the ocean. The air
is sampled at about 35m over the water surface and the water is drawn from the
vessel’s sea chest which is about 8-9m below the surface. Tysla is an unusually
good test vessel because she operates in a regular round-the-world service which
few other vessels do. It means the instruments can collect data from a huge cross
section of the world’s ocean areas and assess how the data develop over time.
WHOI is planning for additional instrumentation to measure algae and microplas-
tic concentrations in the oceans. The crew of the Tysla has been very supportive of
the project and appreciates being part of the ‘greater good’ initiative.
BeePlanet Factory’s CEO and
Co-founder, Jon Asin in the middle.
Roger Strevens, VP Sustainability at
Wallenius Wilhelmsen, to the right
and Millicent Wallace Pitts, CEO of
OceanExchange.org
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Innovation
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Wallenius Wilhelmsen – Annual Report 2022
How will we proceed?
In 2023, the work on improving our digital capacity and maturity will continue.
Throughout our digital business transformation, we have had many successes, but
we have also identified learnings to help us improve our digital playbook. These are:
•
Effective collaboration within a global ecosystem of partners is difficult
•
Adoption at both speed and scale is complicated
•
Non-standardization of key moments in the supply chain inhibit product
development at a global scale
Over the upcoming year, the DA team will capitalize on these learnings, fine-tune
our digital playbook and continue to enhance our digital capacity and maturity. We
will continue to follow our digital playbook while pursuing three strategic objectives
in order to foster sustainable innovations in shipping and logistics:
Supercharge our
workforce
Make our
networks smarter
Advance our
sustainability priorities
83
Prosperity
Quality of service
Contents →
Wallenius Wilhelmsen – Annual Report 2022
2. Quality of service
Why is it important?
As a global logistics provider, our customers trust us to move billions of dollars of
manufactured goods worldwide. Quality is at the center of our workday, every day,
on land and at sea. This focus protects and contributes to the integrity and effi-
ciency of our customers’ outbound supply chains.
How do we work?
To secure the quality of our shipping services, we monitor, measure and manage the
uptime of the Wallenius Wilhelmsen fleet to ensure on-time deliveries. To monitor
uptime, Wallenius Wilhelmsen’s marine operations management team tracks the
unplanned off-hire on each vessel. We manage the risk of off time by maintaining
and adhering to detailed maintenance schedules and procedures for our vessels,
as well as having close communication with our suppliers.
To manage the quality of our logistics services, we track internal damages and
report damages per units processed. Our logistics sites all work consistent with
the ISO 9001 standard, and many of our high-volume processing centers hold an
ISO 90001-certificate.
Our customers’ perceptions and satisfaction are also key elements of quality.
Engagement is therefore central for improving the quality of our services. Our global
sales team conducts a semi-annual customer satisfaction survey (CSAT). They use
the results to help our business units plan and prioritize initiatives for improving
quality and the customer experience. Twice annually, the CSAT Index Report gives
departments and team leaders data and insights from the survey so they can tap
into the voice of our customers to:
•
Prioritize initiatives as part of business planning
•
Leverage existing initiatives to address the Voice of the Customer
•
Use Voice of Customer for performance reviews and internal discussions
•
Communicate our services consistently
All our management and production teams are also empowered to continuously
improve our way of working to deliver global, best-in-class, innovative solutions
that are safe, sustainable, lean and agile. During 2022, we had increasingly more
strategic meetings with key customers. We expect strategic meetings to become
even more important going forward as we continue to execute on our decarbon-
ization strategy.
“Feedback is a gift, even when it is negative!
In these tough times, listening is even more
important. Companies are people, and one
builds trust by nurturing relationships.”
Cecilia Guerra
VP of Global Customer Experience
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Quality of service
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Wallenius Wilhelmsen – Annual Report 2022
How did we perform?
Covid-19 continued to challenge our industry throughout 2022. During the year, we
were again challenged by limited capacity, port slowdowns and congestions and a
severe workforce shortage in certain locations. Despite these upsets, we remained
focused on securing the delivery of services while protecting our people.
We believe that there is no higher reward than acknowledgment and trust from our
customers. Trust is built on delivering quality results, and it is essential to value
creation because it unlocks future opportunities. That is why we are incredibly
proud to have been named Logistics Supplier of the Year by Stellantis, and Nissan’s
North America Finished Vehicle Logistics Partner of the Year for the US market. We
are honored to have received Partner Status from John Deere for the 15th year in a
row, qualifying us for the Deere Hall of Fame. We also were awarded Toyota’s Kaizen
award for our work in Canada, and recognition from NIO for our work in China.
In logistics services, we began reporting on internal damages. This allows us to
more precisely understand and improve damage control measures.
Lasse Kristoffersen together
with William Li, CEO NIO at the
NIO house, Oslo, Norway.
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Quality of service
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Wallenius Wilhelmsen – Annual Report 2022
How will we proceed?
In 2023, the customer experience team will set performance benchmarks and
targets for our customer survey. We will enhance the survey with offering a new
website-based customer touchpoint for collecting more survey data to feed into
our customer satisfaction score. Additional touchpoints will also be explored to
ensure we receive continuous feedback from customers at important moments
of the customer journey. This could be collecting feedback from customers while
booking cargo, while accessing schedules and so forth.
We remain committed to working with globally recognized ISO standards to manage
quality across the organization. In 2023, we will continue developing our roadmap
for improved quality and sustainability management systems and certifications.
Building on work began in 2022, we will complete ISO certification (14001, 9001,
and 45001) of our logistics sites in the Americas, and then proceed with all other
logistics sites globally that are not already certified.
Key Results from Q4 2022 Customer Survey
To elevate the voice of our customers in our inter-
nal decision-making, the company developed and
launched a Customer Satisfaction (CSAT) Survey
in 2022. An overall customer satisfaction score is
measured by asking customers “How satisfied are
you with our service?” Responses range from 1 to
5 (1 = extremely dissatisfied, 5 = extremely satis-
fied). The survey also asks our customers about
five strategic themes: Effective communication,
operational excellence, partnership/relationship,
service offerings and digital solutions. In 2022, our
customer satisfaction score was 4.0 in Q2, slightly
dipping to 3.8 in Q4.
In the Q4 survey, 75 percent responded that they
were either “satisfied” or “extremely satisfied” with
our services. Of greatest concern to customers was
limited cargo space on vessels and service reliabil-
ity. Three topics – effective communication, service
offerings and operational excellence – were rated
most important (at that moment). Management used
this insight to validate internal priorities and decide
on related investments for 2023.
8 Partner accounts
100% participated
33 Global accounts
83% participated
96 Contract accounts
participated
87% of our revenue
base participated
+0% vs Q2 2022 (100%) +8% vs Q2 2022 (74%) +15 vs Q2 2022 (81) +15% vs Q2 2022 (79%)
+0% vs Target (100%) -3% vs Target (85%) +66 vs Target (33) +2% vs Target (85%)
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Sustainable consumption
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Wallenius Wilhelmsen – Annual Report 2022
3. Sustainable consumption
Why is it important?
At Wallenius Wilhelmsen, we believe developing our role as the leading supplier of
sustainable outbound logistics is critical to our long-term success. We are dedi-
cated to leading our industry’s transition to zero emissions, which requires more
sustainable consumption of our services. By encouraging our customers to use
more sustainable logistics solutions, we seek to ensure our own long-term economic
success, while contributing to a more prosperous and sustainable global economy.
How do we work?
At Wallenius Wilhelmsen, sustainable consumption goes hand in hand with our
decarbonization strategy. The sales organization works closely with our emissions
management and operational excellence teams to identify ways that our custom-
ers can help drive our strategy. The sales team leads customer outreach and takes
primary responsibility for engaging customers in this effort.
We also collaborate with our customers to identify climate-positive changes to their
current ways of shipping, and to instill sustainable supplier management practices
into our own supply chain .
How did we perform?
In 2021 we launched the Carbon Compass 2.0, an online tool that gives our customers
more visibility into their carbon emissions from our services. The Carbon Compass
calculates the emissions of our vessels and neatly visualizes the data. It is quick,
accurate and flexible, allowing emissions to be viewed by trade, customer or voyage.
Emissions are measured based on IMO standards. Key operational, technical and
commercial factors impact GHG performance. Factors such as fuel consumption,
cargo weight and distance need to be taken into consideration. This past year, we
continued to enhance this tool and developed our plans for customer adoption.
We also reported allocated emissions to OEM customers through CDP’s climate
survey and platform.
How will we proceed?
Over the past year, we have seen a growing sense of urgency among our customers
over their Scope 3 emissions. In pursuit of our decarbonization strategy, we will lever-
age this interest in 2023 and begin to engage with targeted customers who share
our journey on new biofuel offerings, which is an important part of transitioning to
one zero emission end-to-end service. We will also continue to improve our Carbon
Compass 2.0 tool with upgrades aimed at integrating emissions data from across
our network, and develop an adoption strategy focused on targeted customers.
87
Prosperity
Sustainable supply chain
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Wallenius Wilhelmsen – Annual Report 2022
4. Sustainable supply chain
Why is it important?
A sustainable supply chain is essential to satisfying our customers’ needs, while
minimizing our own sustainability risk exposure, reaching our emissions reductions
ambitions, contributing to our customers’ scope 3 emissions goals and ensuring
compliance with new legal requirements and social expectations.
How do we work?
We believe in cultivating strong and transparent relationships with our suppliers,
emphasizing pro-active and continuous improvement efforts on their part, and a
high level of transparency to manage risk. Our suppliers are our trusted, long-term
partners, who help us deliver innovative solutions and services to our customers.
In 2021, we adopted a Sustainable Procurement Policy to guide our procurement
activities. It included an accompanying supplier code of conduct that stated our
expectations and policy objectives to our suppliers and subcontractors. Addition-
ally, supplier contract templates were updated to include reference to our supplier
code of conduct.
Our policy is built upon a series of commitments that set our ambition for a more
sustainable supply chain:
•
Set objectives, action plans and KPIs in support of this policy, regular
monitoring and public reporting on progress, and pursuing continuous
improvement of our practices
•
Prioritize suppliers who have sustainable and ethical practices within their
respective organizations and who drive such practices throughout their
own supply chain
•
Identify environmental, social and governance risks within our supply
chain and collaborate with suppliers to manage those risks
•
Comply with local, national and transnational regulatory policies
•
Encourage our business partners, suppliers and sub-contractors to apply
principles of responsible business conduct compatible with the UN Global
Compact, UN Universal Declaration of Human Rights, the International
Labour Standards (ILO Declaration on fundamental principles and rights
at work) and the OECD’s Guidelines for multinational enterprises
The company has also assembled a sustainable procurement working group to
identify opportunities to make our supply chain more sustainable. The working
group meets at least once per quarter and covers three strategic procurement
areas: Vessel new builds, direct operations and vessel recycling.
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Prosperity
Sustainable supply chain
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Wallenius Wilhelmsen – Annual Report 2022
How did we perform?
In 2022, we integrated sustainability and human rights criteria into our procurement
processes and contract templates for vessel newbuilds. This will help ensure that our
largest (measured in USD) procurement decisions are sustainable, and that these
suppliers are aligned with our values and goals and contributing to our purpose.
We continued to integrate sustainability into our supply chain management by
developing a supplier self-assessment (SSA) which will help us better identify and
manage the sustainability risks in our supply chain. The SSA was sent to 25 targeted
suppliers, and about half replied by year end. The survey asked ten questions about
the suppliers’ environmental, social and governance practices, including if they
have a human rights policy in place, and if they have assessed the risk of child and/
or forced labor in their operations. Sixty-four percent of respondents told us they
have a human rights policy in place, and almost 80 percent have assessed their
operations for child and/or forced labor.
2022 Sustainability Self -Assessment results
A risk assessment of human rights and labor conditions in our value chain was also
conducted in 2022, identifying specific risks and their location in our value chain.
See the People chapter for more details.
How will we proceed?
In 2023, we will continue to develop, improve and refine our sustainable procurement
approach. We will launch a group-wide project to embed our sustainable procure-
ment policy into purchasing procedures group-wide, while developing tools to enable
group-wide monitoring and reporting on suppliers and supply chain performance.
64%
have a Human
Rights policy
in place
79%
have assesed their
operations for child
and/or forced labour
93%
have a Health
& Safety policy
60%
monitor and
publish their
carbon footprint
73%
have a Code
of Conduct
80%
have a policy in
place to ensure
anti-corruption and
fair competition
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Prosperity
Tax practices
Contents →
Wallenius Wilhelmsen – Annual Report 2022
5. Tax practices
Why is it important?
Wallenius Wilhelmsen is committed to being a responsible corporate citizen, and
that includes ensuring that we manage and report our tax affairs in a manner which
secures compliance with local law and regulations in all countries in which we
operate. This is applicable to all taxes, including direct taxes, indirect taxes, payroll
taxes and other forms of taxation. Transactions between Wallenius Wilhelmsen’s
group companies are conducted at an arm’s length basis in accordance with OECD
principles and our internal transfer pricing policy.
How do we work?
Tax compliance and day to day responsibilities for the operation of the local tax
function rest with the Wallenius Wilhelmsen subsidiaries. The global tax depart-
ment manages tax risks and ensures compliance in all significant operational and
financial transactions as well as securing arm’s length pricing in all intercompany
transactions. The company is committed to adopting a justifiable and fair tax position
where tax regulations are open to interpretation or choices. The tax position taken
in all significant transactions is supported by employment of qualified in-house
personnel and, where necessary, the use of an external tax opinion. Further we aim
to operate under a policy of transparency with local tax authorities. Corporate tax
affairs are the chief financial officer’s responsibility and extend to all jurisdictions
in which the company operates.
How did we perform?
Reporting of our total taxes paid provides information on Wallenius Wilhelmsen’s
contribution to governmental revenues which support governmental functions
and public benefits.
How will we proceed?
In 2023, we will continue to follow developments and regulations regarding tax
transparency and adjust our reporting accordingly.
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Prosperity
Sustainable finance
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Wallenius Wilhelmsen – Annual Report 2022
6. Sustainable finance
Why is it important?
Access to capital is essential to support our business and reach our target of
decarbonizing our operations. Many financial stakeholders, including lenders and
investors, seek long-term financial returns that mitigate harm to the environment
and that ensures social safeguards. They expect companies with high emissions in
hard to abate sectors to demonstrate how they will decarbonize. Over time, access
to capital may become limited for companies that do not decarbonize and trans-
parently report on their decarbonization strategy, goals and the results achieved
every year.
How do we work?
In February 2022, we launched our sustainability-linked financing framework v1.0,
underlining the commitment to reduce carbon intensity by 27.5 percent from 2019
to 2030. The framework includes interim CO
2
intensity targets for each year from
2022 to 2030 based on the fleet average carbon intensity indicator (CII). A second
opinion on our framework was provided at launch by CICERO Shades of Green. We
will release annual progress reports disclosing information regarding the perfor-
mance of the CO
2
intensity targets, any recalculations if applicable, and any updates
in the emission reduction strategy on our investor pages. The progress report will
be accompanied by external verification of the calculated CO
2
intensity.
In Q2, the group signed its first USD 950 million of sustainability-linked bank- and
bond financings with international banks and investors. The proceeds are available
for refinancing and general corporate purposes and pricing of the agreements is
linked to certain interim CO
2
intensity targets as defined in the framework. If we do
not meet the relevant targets, the price of the debt will increase, while if we meet
the targets pricing of the bank financing will improve.
How did we perform?
We will report on our performance 2022 CO
2
intensity target through a progress
report on our investor pages during Q2 2023. The performance of the target will
influence the pricing of the sustainability-linked bank financings for the coming
12 months. In 2022, we experienced very high activity in our shipping segment,
which in combination with the supply-demand imbalance and port congestions
have contributed to a higher average speed of our vessels. While we remain fully
committed to our CO
2
intensity target, we recognize that these factors will affect
our performance on the target.
How will we proceed?
In 2023, we will prepare for upcoming emission pricing regulation such as the EU
ETS and we will explore the adoption of an internal carbon pricing scheme. We will
intensify the dialog with the investment community on sustainability topics as well
as explore sustainable financing opportunities available to the company.
92Wallenius Wilhelmsen – Annual Report 2022
Principles of governance
Implementation and reporting on corporate governance
Contents →
Implementation and reporting on corporate
governance
Wallenius Wilhelmsen ASA (‘Wallenius Wilhelmsen’ or ‘the Company’) is a public
limited company which complies with Norwegian law. Listed on the Oslo Stock
Exchange, the Company is subject to Norwegian securities legislation and stock
exchange regulations. This report is based on the requirements covered in the
Norwegian Code of Practice for Corporate Governance (‘the Code’, dated October
14, 2021), the Public Limited Companies Act and the Norwegian Accounting Act,
approved by the board and published as part of the Company’s annual report. The
report is also available on the Company’s website.
The “comply or explain” principle
The Code covers provisions and guidance that in part elaborates on company,
accounting, stock exchange and securities legislation. It also covers areas not
addressed by legislation. We follow the ‘comply or explain’ principle required by
the Code and justify any deviations from its 15 provisions and describe alternative
solutions where and if applicable.
Governing elements
Employees and others working for and on behalf of Wallenius Wilhelmsen shall
carry out their business in a sustainable, ethical, and responsible manner, and
in accordance with current legislation and the Company’s standards such as the
board approved Code of Conduct. The Code is currently being updated and will be
implemented in 2023.
To ensure that the right results are achieved in the correct way, Wallenius Wilhelmsen
has a set of governing elements, including its values, basic philosophy, leadership
expectations, code of conduct, compliance policies and company principles. These
governing elements guide the employees in making the right decisions and navigate
safely in a rapidly changing environment. Steering documents are available elec-
tronically on our intranet. We recognize that our extensive global reach, combined
with operations in countries where corruption is a significant risk factor, requires
particularly high levels of integrity. The Code of Conduct, specifically, outlines how
employees should conduct trustworthy business and behave ethically. It encom-
passes topics such as fair competition and anti-corruption, equal opportunities
and diversity, harassment and discrimination, health and safety, etc. The Code of
Conduct is available publicly on our webpage, and it is part of the onboarding proce-
dures at Wallenius Wilhelmsen in training programs and re-confirmed annually.
In 2022, as in 2021, anti-corruption, competition law, data privacy (e.g. General
Data Protection Regulation and data protection agreements), fraud and theft
prevention received particular attention: The group authority policy and matrix
were updated and implemented. IT contracting was improved, i.e. through updated
routines regarding data processing agreements. We further developed our third-
party sanction and credit risks screening in 2022. We will also continue to focus on
anti-corruption, competition law, data privacy and other ethical and good corpo-
rate governance aspects.
Deviations from the Code: None
93Wallenius Wilhelmsen – Annual Report 2022
Principles of governance
Implementation and reporting on corporate governance
Contents →
Security and emergency response
Security and emergency response is crucial for our operation. With an emerging
number of security risks, particularly in cyber security, we have escalated our orga-
nization and focus. The process to standardize and develop emergency and crisis
response capabilities across the group, and to focus on security risks as criminality
and terrorism continues. Our CTPAT (Customs Trade Partnership Against Terrorism)
program was again re-certified and re-launched for 2023. This is a security frame-
work to mitigate risks. The work will continue in 2023 and this will be a framework
for all our sites globally. We have also established, updated and standardized emer-
gency response practices for local and regional incidents. This is done to prepare
the various local, regional, and global entities to ensure effective and common
response mechanisms for more global crises. In addition, we launched an updated
gamification training on cyber security.
94Wallenius Wilhelmsen – Annual Report 2022
Principles of governance
The business
Contents →
The business
Articles of Association
Wallenius Wilhelmsen’s business activities and the scope of the board’s authority
are restricted to the business specified in article three of the Company’s articles of
association which reads as follows: ‘The objective of the Company is to engage in
shipping, maritime services, aviation, industry, commerce, finance business, broker-
age, agencies and forwarding, to own or manage real estate, and to run business
related thereto or associated therewith. This may take place in a direct manner, or
in an indirect manner by way of guarantee, share subscription, or in other ways.’
The full articles of association are presented on the Company’s website.
Strategy and framework for implementation
Our ambition is to build more sustainable supply chains, imagining new and more
efficient solutions for the changing world of logistics on land and at sea. Our holistic
strategy is to create value for our shareholders and other stakeholders by further
developing our ocean and land-based business in a sustainable manner. The
group will leverage its market positions, global network, and collective competence
to continue to grow a sustainable and profitable business. Four principles of our
sustainability strategy guide us in this work. By striving for what is both economical
and sustainable, we will produce the best long-term results for the people and the
planet. Our commitment, approach and performance on sustainability is described
throughout this report and can be summarized in the model below.
People Planet Prosperity
Principles of
Governance
Safe and inclusive workplace
where people’s rights are
respected
Decarbonize and reduce our
environmental impact
Solving the biggest chal-
lenges while creating new
opportunities
Transparent, with strong ethi-
cal business conduct
Material Topics
Health, safety & wellbeing
Human rights
Diversity, equity & inclusion
Training & development
GHG emissions and climate
risk
Biodiversity
Waste management
Air quality
Innovation
Tax practices
Quality of service
Sustainable consumption
Sustainable supply-chain
Sustainable finance
Ethical business conduct
Emergency preparedness
Security
Privacy and data security
SDGs
95Wallenius Wilhelmsen – Annual Report 2022
Principles of governance
The business
Contents →
Our strategy contributes to the Sustainable Development Goals (“SDGs”) issued by
the United Nations. We focus on the eight SDGs listed in the above illustration, these
have been assessed and identified as the ones upon which we have the greatest
impact. We assessed relevant environmental, social and governance related impacts
along the company’s value chain. We ranked the different topics in terms of impact
and importance to Wallenius Wilhelmsen and our stakeholders. The assessment is
based on continuous dialog with stakeholders, including our customers and part-
ners, employees, investors and regulators. We delayed the update of our materiality
assessment awaiting the finalization of the EU Corporate Sustainability Reporting
Directive. A double materiality analysis will be conducted in 2023. Sustainability
is integrated into our holistic approach to business: The group’s long term strat-
egy has been sharpened and is described in the section Message from the board.
It consists of four strategic goals:
1. Become the leading supply chain and mobility orchestrator
2. Be our customers first choice in Shipping
3. Be the preferred partner in processing and terminal services
4. Introduce one net-zero emissions end-to-end service before 2027
We execute the strategy using tools and practices from SAFe (Scaled Agile Frame-
work). This methodology is adopted to create business agility. It is used by numerous
organizations to increase productivity, bring better solutions faster to the market
and improve collaboration, leading to happier and more motivated employees. Oper-
ationally, we implemented the strategy with a portfolio organized around the four
strategic goals. Following the portfolios, we work in cross functional teams using
agile methodology and customer-centricity to innovate and develop better solu-
tions. Considering the risk profiles that our business has, the strategy is formulated
to capitalize on our current market position, balance our risk profile and maximize
value creation for our shareholders and society. The Board of Directors evaluates
Wallenius Wilhelmsen’s objectives, strategies and risk profiles at least once per year.
Deviations from the Code: None
96Wallenius Wilhelmsen – Annual Report 2022
Principles of governance
Equity and dividend
Contents →
Equity and dividend
Capital structure
The Wallenius Wilhelmsen group has a sound level of equity tailored to its objec-
tives, strategy and risk profile, as seen in the Financial review. The Board of Directors
believes the capital structure of the Wallenius Wilhelmsen group is appropriate to
our objectives, strategies and risk profile.
Dividend policy
In 2022, the board applied a dividend policy that targeted a dividend which over
time would constitute between 30 percent and 50 percent of the Company’s profit
after tax. When deciding the size of the dividend, the board considered future capi-
tal requirements to ensure the implementation of its growth strategy as well as the
need to ensure the group’s financial standing remains warrantable at all times.
Dividends was declared in USD and paid out semi-annually. The Board of Direc-
tors has updated the dividend policy for the financial year 2023 and onwards, as
outlined in Financial targets and dividend policy.
Authorizations to the Board of Directors
At the AGM in 2022, the board of directors was granted an authorization to acquire
own shares, with a total nominal value of up to NOK 22,001,456, which equals 10
percent of the current share capital. The authorization can be used in connection
with the Company’s long-term incentive scheme for the executive management
and as an alternative to dividends. The authorization is valid until the AGM in 2023,
but will last no longer than June 30, 2023. Furthermore, at the AGM in 2022, the
board of directors was also granted an authorization to increase the share capital
by up to NOK 22,001,456, representing 10 percent of the issued share capital. The
authorization can be used in connection with acquisitions in return for shares and
for general corporate purposes. The authorization is valid until the AGM in 2023,
but no longer than June 30, 2023.
Deviations from the Code: The authorizations to the board of directors to acquire
own shares and to increase the share capital both cover more than one purpose.
The board of directors believes that for several reasons this gives flexibility to (i)
buy back shares to honor obligations under the incentive scheme or as an alter-
native to dividends, and (ii) increase the share capital by up to 10 percent – either
in connection with acquisitions, for general corporate purposes or a combination
of the two, depending on the specific needs of the Company.
97Wallenius Wilhelmsen – Annual Report 2022
Principles of governance
Equal treatment of shareholders
Contents →
Equal treatment of shareholders
Shareholders
As of December 31, 2022, Wallenius Wilhelmsen had 6,275 shareholders, of which
353 were foreign, and the remaining were Norwegian. This indicates an increase of
5 percent in the number of shareholders compared to year end 2021. The Norwegian
shareholders account for 194,615,641 of Wallenius Wilhelmsen shares, the equiva-
lent of 46 percent of the total number of shares.
Pre-emptive rights
The board of directors has not made any resolutions to increase the share capital
based on the authorizations granted in 2022. If the board resolves to carry out an
increase in share capital and waive the pre-emption rights of existing sharehold-
ers based on a mandate granted to the board, the board will publicly disclose the
justification in a stock exchange announcement to be issued in connection with
the increase in share capital.
Transaction in own shares
Wallenius Wilhelmsen has not purchased any own shares pursuant to the authoriza-
tion granted to the board of directors in 2023. However, it has previously purchased
own shares of which 586,119 was held in treasury as of year-end 2022.
Freely negotiable shares
All shares in Wallenius Wilhelmsen are freely negotiable and listed on the Oslo Stock
Exchange under the ticker ‘WAWI’. There are no restrictions on any party’s ability
to own, trade or vote for shares in Wallenius Wilhelmsen.
Deviations from the Code: None
98Wallenius Wilhelmsen – Annual Report 2022
Principles of governance
General meeting
Contents →
General meeting
The general meeting will normally be held in the middle of the second quarter. The
board of directors will ensure that the Company’s shareholders can participate in
the general meeting either through physical or electronic presence. The board of
directors will further ensure that:
•
The resolutions and any supporting documentation are sufficiently
detailed, comprehensive and specific, allowing shareholders to under-
stand and form a view on all matters to be considered at the general meet-
ing
•
The CEO, the members of the board of directors and the chair of the nomi-
nation committee shall attend the general meeting.
•
That the general meeting is able to elect an independent chairperson for
the general meeting.
Shareholders wishing to attend the general meeting must notify Wallenius Wilhelm-
sen at least two working days before the meeting takes place. Shareholders who
are unable to be present at the general meeting will be given the opportunity to
vote by proxy, or through written voting in a period prior to the general meeting.
Wallenius Wilhelmsen will in this respect provide information on the procedure and
prepare the form for the appointment of a proxy, or written voting form, which will
indicate that it is possible to vote on each agenda item. Wallenius Wilhelmsen seeks
to accommodate that shareholders are able to vote on each individual candidate
that is nominated for election. However, for practical reasons, the vote took place
as a combined vote in 2022. Wallenius Wilhelmsen will also nominate a person who
can act as proxy for the shareholders. Shareholders with known addresses are noti-
fied by mail no later than 21 days before the meeting, and all relevant documents
are published on Wallenius Wilhelmsen’s website no later than 21 days before the
meeting. Shareholders may, upon request, receive hard copies of the material. The
minutes from the AGM are available on the Company’s website, immediately after
the meeting and may be inspected by shareholders at Wallenius Wilhelmsen´s
office. The general meeting of 2022 was chaired by the Company’s external coun-
sel as appointed by the general meeting.
Deviations from the Code: In 2022, voting on members to the board of directors
took place as a combined vote.
99Wallenius Wilhelmsen – Annual Report 2022
Principles of governance
Nomination committee
Contents →
Nomination committee
In accordance with section eight of Wallenius Wilhelmsen’s articles of association,
the general meeting has appointed the nomination committee, approved the guide-
lines for the committee’s work and agreed the remuneration to be paid for partici-
pating in the committee. All members of the nomination committee are independent
from the Company’s executive management. The nomination committee currently
consists of Anders Ryssdal (chair), Carl Erik Steen and Jonas Kleberg. None of the
committee members are executives in Wallenius Wilhelmsen. The committee nomi-
nates candidates to the board and proposes board members’ remuneration. As
part of its nomination process, the committee will have contact with major share-
holders, the board and Wallenius Wilhelmsen’s executives to ensure the process
takes the board’s and Wallenius Wilhelmsen’s interests into consideration. A justi-
fication for a candidate will include information on each candidate’s competence,
capacity and independence. The nomination committee will justify its proposal on
each candidate separately. In 2022, the nomination committee held four meetings.
Deviations from the Code: None
100Wallenius Wilhelmsen – Annual Report 2022
Principles of governance
Board of directors – composition and independence
Contents →
Board of directors – composition and
independence
Wallenius Wilhelmsen does not have a corporate assembly, and therefore the
general meeting elects the board. The board shall consist of between three and
nine members and up to three deputy members. The board of directors currently
comprises six members. The board of directors elects its own chair, and Wallenius
Wilhelmsen is therefore in deviation with section eight of the Code. The composi-
tion of the board of directors addresses the common interests of all shareholders
and meets the Company’s need for expertise, including industry and sustainability
knowledge, capacity and diversity. The board of directors is also formed so that it
can act independently of any special interests. Four of the directors, Rune Bjerke,
Yngvil Eriksson Åsheim, Margareta Alestig and Anna Felländer, are independent of
the majority owners, the executive management, and significant business relations.
The board does not include executive personnel. Each of the two large sharehold-
ers have respectively nominated one observer in Wallenius Wilhelmsen’s board,
namely Christian Berg and Peter Augustsson.
Information on the background and experience of the directors is available on Walle-
nius Wilhelmsen’s website, which also lists the number of Wallenius Wilhelmsen
shares held by each director. Members of the board of directors are encouraged to
own shares in Wallenius Wilhelmsen, although they know not to let this encourage
a short-term approach, which is not in the best interests of Wallenius Wilhelmsen
and its shareholders over the longer term. Board members have attended a semi-
nar hosted by Advokatfirmaet Thommessen AS regarding the rules that apply to
stock exchange listed companies. The objective of the course was to provide infor-
mation on legislation, rules, regulations, and best practices that are relevant for
board members of listed Norwegian companies. We have also held sustainability
seminars with external experts where board members participated.
Deviations from the Code: The board elects its own chair as stated in Wallenius
Wilhelmsen’s articles of association as the members of the board have in-depth
knowledge of the Company’s underlying business and are best suited to nomi-
nate their own chair.
Board member Elected Period Up for election
Rune Bjerke April 2022 2 2024
Thomas Wilhelmsen April 2021 2 2023
Margareta Alestig April 2021 2 2023
Anna Felländer April 2022 2 2024
Hans Åkervall April 2022 2 2024
Yngvil Eriksson Åsheim April 2022 2 2024
101Wallenius Wilhelmsen – Annual Report 2022
Principles of governance
Board responsibility and work
Contents →
Board responsibility and work
The board of directors
The board of directors has adopted instructions for the work of the board. These
include rules on the work of the board and its administrative procedures which
determine what matters the board should consider. The board has the ultimate
responsibility for the management of Wallenius Wilhelmsen and must ensure the
business is run in a sustainable and responsible way.
The board of directors has also adopted instructions for the executive manage-
ment to clarify internal allocation of responsibilities and duties. The board heads
Wallenius Wilhelmsen’s strategic planning. This involves setting the direction for
management through discussions of the strategy and risk, and make decisions
that form the basis for the administration’s execution of the strategy. The board of
directors evaluates Wallenius Wilhelmsen’s objectives, strategies and risk profiles
at least once per year. The chair of the board has an extended duty to ensure that
the board operates well and carries out its duties.
The board of directors has also implemented procedures to ensure that members of
the board of directors and executive personnel make Wallenius Wilhelmsen aware
of any material conflicting interests that they may have regarding items being
considered by the board of directors.
The board of directors will also be chaired by some other member of the board, if
the board is to consider matters of a material character in which the chair of the
board is, or has been, personally involved.
Sustainability appears regularly on the board’s agenda, either in the form of updates
on sustainability regulation or progress on our sustainability initiatives.
Quarterly, the board reviews corporate risks and these include risks related to
more stringent climate, environment and social regulations as well as indicators
for attraction and retaining competence. The board establishes an annual plan for
its work and evaluates its performance and expertise annually.
In 2022, Wallenius Wilhelmsen arranged nine meetings which all board members
attended. I.e. 100 percent attendance in meetings during 2022. In addition, the board
regularly visits business-related locations to ensure they have a solid understanding
of the business, market and outlook for the shipping and logistics industry. Such
updates may also be given through a variety of communication channels, includ-
ing a board portal containing timely and relevant information. The directors and
officers are covered by Wallenius Wilhelmsen ASA’s Directors and Officers Liability
Insurance (D&O) placed with AIG, AXA XL, Risk Point and IF. The insurance comprises
the directors’ and officers’ personal legal liabilities, including defense- and legal
costs. The cover also includes employees in managerial positions or employees
who become named in a claim or investigation, or is named co-defendant, and is
extended to include members of the company’s steering committee, audit commit-
tee, compensation committee, litigation committee, advisory committee or other
management or board committees.
102Wallenius Wilhelmsen – Annual Report 2022
Principles of governance
Board responsibility and work
Contents →
Audit committee
The Company’s audit committee currently consists of three members:
•
Margareta Alestig (chair)
•
Yngvil Eriksson Åsheim
•
Hans Åkervall
All members of the audit committee are independent of Wallenius Wilhelmsen, and
at least one member of the audit committee is competent in respect to financial
reporting and audit. The committee’s objective is to act as a preparatory working
committee and support the board’s supervisory roles with respect to financial and
sustainability reporting and the effectiveness of Wallenius Wilhelmsen’s internal
control and risk management systems. The committee also monitors that the
external auditor is independent in relation to services rendered and relationships
that may impact objectivity and independence between the external auditor and
Wallenius Wilhelmsen, including review and pre-approval of non-audit services
provided by the external auditor. During 2022, the committee had six meetings,
including a strategy meeting.
People, Culture and Remuneration Committee
The board of directors’ people, culture and remuneration committee consists of
three members:
•
Rune Bjerke (chair)
•
Thomas Wilhelmsen
•
Anna Felländer
The members are independent of Wallenius Wilhelmsen’s executive management.
The committee sets guidelines for remuneration of the executive management,
including incentive schemes, pension schemes/terms and employment agree-
ments. The People, Culture and Remuneration Committee also proposes the general
remuneration principles for other employees in the Company as well as principles
related to people and culture. During 2022, the committee had four meetings.
Management team
In 2022, the executive management team at Wallenius Wilhelmsen consists of a
chief executive officer (CEO), and the following other roles:
•
Chief financial officer (CFO)
•
EVP, chief operating officer (COO) Shipping Services
•
EVP, chief operating officer (COO) Logistics Services
•
EVP, chief people officer (CPO)
•
EVP, chief digital officer (CDO)
The executive management team discusses and coordinates all main business and
management issues relevant for Wallenius Wilhelmsen. An overview of the back-
ground and expertise of the executive management team is provided on page 19
as well as on the Company’s website.
103Wallenius Wilhelmsen – Annual Report 2022
Principles of governance
Remuneration of the Board of Directors
Contents →
CEO
The board’s instruction to the CEO includes a statement of duties, responsibilities
and delegated authorities. The CEO has the overall responsibility for Wallenius
Wilhelmsen’s results and for conducting the businesses and affairs of the Company
and its businesses in a proper and efficient manner, and in the best interests of
Wallenius Wilhelmsen and its shareholders.
The CEO has a particular responsibility to ensure that the board receives accu-
rate, relevant and timely information that allows it to carry out its duties. Wallenius
Wilhelmsen’s operations, financial results, projections, financial status, or other
topics specified by the board are regularly shared with the board between board
meetings.
The CEO has delegated the responsibility of the different business areas to other
members of the executive management team.
CFO
The CFO heads finance, legal and compliance for Wallenius Wilhelmsen. The CFO
is responsible for providing the CEO and the board with reliable, relevant and suffi-
cient financial information related to Wallenius Wilhelmsen’s business activities,
and ensure that such information is based on requirements for listed companies.
Governance in partly-owned companies
Wallenius Wilhelmsen holds a controlling ownership interest in EUKOR Car Carriers,
Armacup Limited, Syngin Technologies, LLC, Wallenius Wilhelmsen Solutions (Pty)
Ltd, RRS RoRo Stevedores Germany GmbH and WWL-GZL Logistics Co., Ltd. Each
entity has its own board responsible for issues related to the specific operating
entity. Wallenius Wilhelmsen’s ambition is to be a demanding and reliable owner,
taking the long-term interests of the companies, as well as its own interests, into
consideration when developing its strategy. This includes how ownership, finan-
cial prospects and expectations towards code of conduct will be exercised, and
how environmental and sustainable standards and aspirations are determined.
Deviations from the Code: None
Remuneration of the Board of Directors
Remuneration of directors is determined by the AGM and it is not dependent upon
the Wallenius Wilhelmsen’s results. The fee reflects the responsibilities of the board,
its expertise, the amount of time devoted to board-related work and the complex-
ity of the Wallenius Wilhelmsen’s businesses. The remuneration of the board of
directors is not linked to our performance, and we do not grant share options to
members of the board of directors. None of the directors perform other assign-
ments for Wallenius Wilhelmsen in addition to their appointment as member of
the board of directors.
Deviations from the Code: None
104Wallenius Wilhelmsen – Annual Report 2022
Principles of governance
Risk management and internal control
Contents →
Risk management and internal control
Board accountability
The board is accountable for Wallenius Wilhelmsen’s internal control and risk
management frameworks and believes that Wallenius Wilhelmsen’s systems are
appropriate given the extent and nature of our activities. The system contributes to
a control environment characterized by integrity and responsible business conduct.
It is based on the Wallenius Wilhelmsen’s guidelines for business standards and
sustainability. The board reviews Wallenius Wilhelmsen’s risk matrix four times
per year and the internal control arrangements at least once per year, preferably
together with the Wallenius Wilhelmsen’s external auditor.
About the system
Governing documents, such as values, code of conduct, company principles,
policies, procedures and process descriptions are documented and electroni-
cally available to Wallenius Wilhelmsen’s employees through our global integrated
management system. Various internal control activities give management assur-
ance that the internal control of financial systems works adequately and according
to management’s expectations.
Wallenius Wilhelmsen’s internal control is a process designed to provide reason-
able assurance of:
•
Effective and efficient operations
•
Risk management
•
Reliable financial reporting
•
Compliance with laws and regulations
•
Necessary resources provided and used in cost-efficient ways.
Internal control includes:
•
Activities established to evaluate and confirm the quality of internal control
regarding financial reporting (per segment)
•
Procedure for year-end financial statements and the Wallenius Wilhelmsen
board’s responsibility statement semi-annually and annually
•
Enterprise risk assessment – including reporting of the segment’s internal
control, and quarterly reporting of risk assessment to the board
•
Risk factors are described and made public to the market in Wallenius
Wilhelmsen’s second quarter report and annual reports
Wallenius Wilhelmsen’s governing documents are in line with the group’s finan-
cial strategy.
During 2022, we conducted a strategic risk assessment facilitated by an external
expert. The assessment analyzed future trends and their potential impact as well
as the connection and velocity of the risks. The analysis leveraged the insight and
experience of ca 40 internal experts.
105Wallenius Wilhelmsen – Annual Report 2022
Principles of governance
Risk management and internal control
Contents →
External assurance
Wallenius Wilhelmsen’s auditors conduct the audit in accordance with the laws,
regulations, and auditing standards and practices generally accepted in Norway.
These give reasonable assurance as to whether the consolidated financial state-
ments are free from material misstatements, and whether internal control over
financial reporting was appropriate in the circumstances relevant to the audit.
The audit includes examining on test basis evidence supporting the amounts and
disclosures in the financial statements. It also includes assessing the accounting
policies used and the reasonableness of accounting estimates made by manage-
ment, as well as evaluation of the overall financial statement presentation includ-
ing the disclosures.
Whistleblowing
Wallenius Wilhelmsen has a Group-wide Alert line, which is a global whistleblowing
system where employees can submit notices about potential non-compliance, e.g.
corruption, theft, sanctions, anti-trust, fraud, bullying and harassment, modern
slavery and other human rights breaches or other breaches to the Company’s
business standards. The whistleblowing channel is hosted by an independent
third party and employees can report with due process related to confidentiality
and anonymity and as per regulations in relevant jurisdictions. The procedures
strengthen transparency and ensure that the business standards are applied the
way they are intended. They also ensure that the Group has a professional way of
handling potential breaches of laws and regulations, self-imposed business stan-
dards or other serious irregularities. Concerns raised in good faith and in line with
good principles related to this, and also stated elsewhere, shall not be met with
retaliatory actions. During 2022, we received 85 cases through the Alert line. Cases
are reviewed and acted upon by Legal & Compliance, HR and relevant resources
as per the nature of each submitted case. No cases of corruption were confirmed
during 2022. We will during 2023 continue to improve the Alert line further, and raise
awareness to encourage employees to report any potential breaches to a superior,
Legal & Compliance or HR, or through the Alert line.
Deviations from the Code: None
Cases reported through the whistleblower channel:
9%
4%
46%39
12
8
23
3
27%
14%
0%
Safety
HR related
Compliance
Perfomance and/or compensation
Human rights and labor
Conflict of interest
Total
85
106Wallenius Wilhelmsen – Annual Report 2022
Principles of governance
Salary and other remuneration for executive personnel
Contents →
Salary and other remuneration for executive
personnel
Remuneration policy and reporting
Wallenius Wilhelmsen’s remuneration policy covers all employees and is developed
to ensure we attract and retain competent employees. The remuneration princi-
ples are communicated to all employees to ensure a common understanding of
expectations and rewards, both linked to Wallenius Wilhelmsen’s strategic ambi-
tions, financial targets and business standards. The board determines the CEO’s
remuneration and establishes the framework for adjustments for other employees.
Salary adjustment for each employee is settled administratively within the limits
set. For these purposes, the administration carries out a comparison with salary
conditions in other companies and looks to the general level of pay adjustments
in the relevant markets. These details are listed in an overview showing employee
benefits, including salary and other components of the CEO’s, CFO’s and COO’s
remuneration packages. Sustainability targets are part of management’s remu-
neration and include safety and green house gas performance. The details are
provided in the remuneration report in accordance with the Public Companies Act
and relevant regulations, and provided on our website as a separate document.
Short-term variable remuneration
As a key component of the total remuneration package, the annual, variable pay
scheme emphasizes the link between performance and pay and aims to be moti-
vational. It aligns the senior executives with relevant, clear targets derived from the
overall strategic goals. The variable pay scheme takes into consideration both key
financial targets and individual targets (derived from the annual operating plan).
Long-term variable remuneration
In 2018, the board of directors approved the introduction of a long-term incentive
program (LTIP). The program is a performance share unit (PSU) program for the
members of the executive team and other defined employees in key positions.
Participation is subject to approval by the board of directors.
The purpose of the LTIP is to support Wallenius Wilhelmsen’s long-term strategy
and drive growth and performance leading to long-term value creation, and thus
increased shareholder value over time. The program should also contribute to
the retention and increased motivation of top executives. It aligns the interest of
the executive team and other employees in key positions with the interests of the
owners and shareholders of Wallenius Wilhelmsen.
The PSU plan is structured as a conditional right for participants to receive shares
and synthetic shares after a three-year performance period. The award is maximum
50 percent of the annual fixed salary for the President and CEO and the CFO, and
between 30 and 40 percent for other executives.
Deviations from the Code: None
107Wallenius Wilhelmsen – Annual Report 2022
Principles of governance
Information and communication
Contents →
Information and communication
Communication principles and standards
Transparency, accountability and timeliness guide the Group’s communication
activities. In its reporting, Wallenius Wilhelmsen follows applicable securities and
accounting legislation, and the guidelines set by the Oslo Stock Exchange. Further
to this, the Norwegian Investor Relations Association, and its opinion of best prac-
tice related to financial reporting and investor relations information is also followed.
Communication channels and activities
The quarterly, interim and annual results are presented to the financial markets and
business journalists. All presentations are transmitted directly by webcast. Results,
presentations and webcasts are also posted on the Company’s investor relations
web pages. The market is regularly informed about Wallenius Wilhelmsen’s activ-
ities and results through stock exchange notices, annual and quarterly reports,
press releases and updates on the Company’s website. Extensive information about
the activities of the group is provided on the group’s website. A separate section
named ‘Investors relations’ includes relevant information to shareholders, including
reports and presentations, financial calendars, share information, contact infor-
mation, and news and media. The Company is present on social media but it has
strict rules on who can use social media for Company purposes, and it has clear
guidelines stating that stock-sensitive information must be published through the
Stock Exchange before it is made available on social media.
Silent period
For a period of four weeks before the planned release of quarterly financial reports
there is a silent period. This is a period where Wallenius Wilhelmsen cannot comment
on matters related to its general financial results or expectations, and contact with
external analysts, investors, and journalists will be minimized. This is to reduce the
risk of information leaks and ensure the market has access to similar information.
Deviations from the Code: Wallenius Wilhelmsen was in 2022 in deviation of section
13 of the code, which recommends guidelines covering Wallenius Wilhelmsen’s
contact with its shareholders outside of the general meeting. Although the
board of directors in 2022 had not determined such guidelines, shareholders
were invited to four quarterly presentations per year, as well as a capital markets
day. A financial calendar is also updated and made public for the shareholders
annually. Wallenius Wilhelmsen’s website is also regularly updated with rele-
vant information. An investor relations policy has been adopted in 2023 and the
company will not deviate from the code on this point going forward.
108Wallenius Wilhelmsen – Annual Report 2022
Principles of governance
Takeovers
Contents →
Takeovers
The board has not established a policy for its response to possible takeover bids.
The board and management will seek to treat any takeover bids for Wallenius
Wilhelmsen’s activities or shares in a professional way and in the best interest of our
shareholders. If such circumstances arise, the board and the Wallenius Wilhelm-
sen’s management will seek to treat all shareholders equally, take action to ensure
shareholders receive sufficient and timely information to consider the offer and
otherwise abide by the principles of the corporate governance code.
Deviations from the Code: No policy developed, but intention described above.
Auditor
The board of directors is responsible for ensuring that the board and the audit
committee is provided with sufficient insight into the work of the auditor. In this
regard, the board of directors ensures that the auditor submits the main features
of the plan for the audit of the Company to the audit committee annually. The
Company’s auditor – PricewaterhouseCoopers AS (PwC) – attends all board audit
committee meetings and is always present when the annual financial statements
are reviewed. At these meetings, the auditor (i) reports on any material changes in
the Company’s accounting principles and key aspects of the audit, (ii) comments
on any material accounting estimates, and (iii) reports all material matters on which
there has been disagreement between the auditor and the executive management
of Wallenius Wilhelmsen. There were no disagreements between management and
PwC during 2022. Once a year, the board of directors reviews the Company’s internal
control procedures with the auditor, including weaknesses identified by the audi-
tor and proposals for improvement. It is important to the board that the auditor is
independent of management. The board therefore has at least one meeting with
PwC without senior management being present. To ensure the auditor’s indepen-
dence of Wallenius Wilhelmsen’s executive management, the board of directors
has established guidelines regarding the use of the auditor by the management
for services other than the audit. The auditor provides the board with confirmation
of independence in relation to non-audit services provided. For the financial year
2022, Bjørn Lund was the Company’s engagement partner from PwC.
Deviations from the Code: None
Main contents →
110Wallenius Wilhelmsen – Annual Report 2022
Group
Consolidated income statement 112
Consolidated statement of comprehensive income 112
Consolidated balance sheet 113
Consolidated cash flow statement 114
Consolidated statement of changes in equity 115
Accounting policies 116
Note 1. Significant accounting judgments,
estimates and assumptions 129
Note 2. Segment reporting 132
Note 3. Operating expenses 137
Note 4. Employee benefits 138
Note 5. Other gain/loss 141
Note 6. Financial items 142
Note 7. Tax 143
Note 8. Goodwill, customer relations/contracts and
other intangible assets 146
Note 9. Vessels and other tangible assets 147
Note 10. Right-of-use assets 149
Note 11. Impairment on non-current assets 152
Note 12. Principal subsidiaries 155
Note 13. Subsidiaries with material non-controlling interest 157
Note 14. Share information and earnings per share 158
Note 15. Employee retirement plans 159
Note 16. Interest-bearing liabilities 161
Note 17. Financial risk 166
Note 18. Provisions and contingencies 177
Note 19. Specification of balance sheet 178
Note 20. Trade receivables and trade payables 179
Note 21. Restricted bank deposits and undrawn
commited drawing rights 181
Note 22. Related party transactions 182
Note 23. Events after the balance sheet date 184
Reconciliation of alternative performance measures 185
Parent
Income statement 190
Statement of comprehensive income 190
Balance sheet 191
Cash flow statement 192
Note 1. Specification of income statement 193
Note 2. Employee benefits 194
Note 3. Tax 196
Note 4. Investment in subsidiaries 197
Note 5. Equity 198
Note 6. Employee retirement obligations 200
Note 7. Interest-bearing debt 202
Note 8. Financial risk 203
Note 9. Specification of balance sheet 211
Note 10. Transactions with related party 212
Note 11. Events after the balance sheet date 213
Financial statements contents:
112
Wallenius Wilhelmsen ASA Group
Consolidated income statement
Financial statements contents →
Main contents →
Wallenius Wilhelmsen – Annual Report 2022
Consolidated income statement
Consolidated statement of comprehensive income
USD million Notes 2022 2021
Total revenue 2 5,045 3,884
Operating expenses 3 (3,497 ) (3,054 )
Operating profit before depreciation, amortization and impairment (EBITDA) 1,548 830
Other gain/(loss) 5 (47 ) 21
Depreciation and amortization 8,9,10 (541 ) (483 )
(Impairment)/reversal of impairment 8,9,11 (29 ) (62 )
Operating profit/(loss) (EBIT) 931 306
Share of profit/(loss) from joint ventures and associates 2 1
Interest income and other financial items 184 95
Interest expense and other financial expenses (288 ) (203 )
Financial items – net 6 (104 ) (108 )
Profit/(loss) before tax 829 199
Tax income/(expense) 7 (35 ) (23 )
Profit/(loss) for the period 794 177
Profit/(loss) for the period attributable to:
Owners of the parent 679 133
Non-controlling interests 13 116 43
Basic and diluted earnings per share (USD) 14 1.60 0.32
USD million Notes 2022 2021
Profit/(loss) for the period 794 177
Other comprehensive income/(loss):
Items that may subsequently be reclassified to the income statement:
Currency translation adjustment (7 ) (6 )
Items that will not be reclassified to the income statement:
Changes in the fair value of equity investments designated at fair value through
other comprehensive income (5 ) 22
Remeasurement pension liabilities, net of tax 15 11 3
Other comprehensive income/(loss), net of tax (1 ) 19
Total comprehensive income/(loss) for the period 794 196
Total comprehensive income and loss attributable to:
Owners of the parent 679 149
Non-controlling interests 115 47
Total comprehensive income/(loss) for the period 794 196
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Consolidated balance sheet
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Consolidated balance sheet
USD million Notes Dec 31, 2022 Dec 31, 2021
Assets
Non-current assets
Deferred tax assets 7 59 71
Goodwill and other intangible assets 8 395 455
Vessels and other tangible assets 9 3,943 4,033
Right-of-use assets 10 1,599 1,507
Other non-current assets 19 247 249
Total non-current assets 6,242 6,315
Current assets
Fuel/lube oil 139 147
Trade receivables 20 605 457
Other current assets 19 191 144
Cash and cash equivalents 1,216 710
Asset held for sale 9 - 21
Total current assets 2,151 1,479
Total assets 8,394 7,794
Equity and liabilities
Equity
Share capital 14 28 28
Retained earnings and other reserves 3,125 2,511
Total equity attributable to owners of the parent 3,153 2,539
Non-controlling interests 13 355 266
Total equity 3,508 2,804
Non-current liabilities
Pension liabilities 15 40 55
Deferred tax liabilities 7 71 82
Non-current interest-bearing debt 16 2,200 2,158
Non-current lease liabilities 16 1,254 1,218
Non-current provisions 18 - 16
Other non-current liabilities 19 95 68
Total non-current liabilities 3,659 3,596
Current liabilities
Trade payables 20 112 154
Current interest-bearing debt 16 316 515
Current lease liabilities 16 317 238
Current income tax liabilities 7 2 4
Current provisions 18 - 28
Other current liabilities 19 479 455
Total current liabilities 1,226 1,395
Total equity and liabilities 8,394 7,794
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Consolidated cash flow statement
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Consolidated cash flow statement
USD million Notes 2022 2021
Cash flow from operating activities
Profit before tax 829 199
Financial (income)/expenses 6 104 108
Share of net (income)/loss from joint ventures and associates (2 ) (1 )
Depreciation and amortization 8,9,10 541 483
Impairment/(reversal of impairment) 29 62
(Gain)/loss on sale of tangible assets (14 ) -
Change in net pension assets/liabilities (12 ) (8 )
Change in derivative financial assets 5 47 (21 )
Net change in other assets/liabilities (190 ) (173 )
Tax (paid)/received (35 ) (24 )
Net cash flow provided by operating activities 1,297 623
Cash flow from investing activities
Dividend received from joint ventures and associates - -
Proceeds from sale of tangible assets 45 5
Investments in vessels, other tangible and intangible assets 8,9 (112 ) (141 )
Investment in subsidiaries, net of cash acquired (11 ) -
Investment in financial investments - (7 )
Interest received 6 15 2
Net cash flow provided by/(used in) investing activities (62 ) (140 )
Cash flow from financing activities
Proceeds from loans and bonds 16 1,002 474
Repayment of loans and bonds 16 (1,095 ) (531 )
Repayment of lease liabilities 16 (352 ) (204 )
Interest paid including interest derivatives (189 ) (165 )
Realized other derivatives (14 ) 7
Dividend to non-controlling interests (16 ) (8 )
Dividend to shareholders (63 ) -
Change in cash collateral 17 (2 ) -
Net cash flow used in financing activities (729 ) (427 )
Net increase/(decrease) in cash and cash equivalents 505 56
Cash and cash equivalents at beginning of period 710 654
Cash and cash equivalents at end of period
1
1 The group is located and operating world-wide and every entity has several bank accounts in different currencies.
Unrealized currency effects are included in net cash provided by operating activities.
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Consolidated statement of changes in equity
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Consolidated statement of changes in equity
USD million
Share
capital
Own
shares
Total
paid-in
capital
Retained
earnings
and other
reserves Total
Non-
controlling
interests
Total
equity
Balance at December 31, 2021 28 - 28 2,511 2,539 266 2,804
Profit for the period - - - 679 679 116 794
Other comprehensive income - - - - - (1 ) (1 )
Total comprehensive income - - - 679 679 115 794
Disposal of own shares - - - 1 1 - 1
Change in non-controlling interests - - - (3 ) (3 ) (8 ) (11 )
Dividend to owners of the parent - - - (63 ) (63 ) - (63 )
Dividend to non-controlling interests - - - - - (16 ) (16 )
Balance at December 31, 2022 28 - 28 3,125 3,153 355 3,508
Balance at December 31, 2020 28 - 28 2,363 2,391 224 2,615
Profit for the period - - - 133 133 43 177
Other comprehensive income - - - 16 16 3 19
Total comprehensive income - - - 149 149 47 196
Disposal of own shares - - - - - - -
Change in non-controlling interests - - - (1 ) (1 ) 3 1
Dividend to non-controlling interests - - - - - (8 ) (8 )
Balance at December 31, 2021 28 - 28 2,511 2,539 266 2,804
As of December 31, 2022, own shares represented 0.1 percent of the share capital in nominal value.
As of December 31, 2021, own shares represented 0.2 percent of the share capital in nominal value.
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Note 1. Significant accounting judgments, estimates and assumptions
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Note 2. Segment reporting
133
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Note 2. Segment reporting
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Note 2. Segment reporting
135
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Note 2. Segment reporting
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Note 2. Segment reporting
137
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Note 3. Operating expenses
138
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Note 4. Employee benefits
139
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Note 4. Employee benefits
140
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Note 4. Employee benefits
141
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Note 5. Other gain/loss
142
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Note 6. Financial items
143
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Note 7. Tax
144
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Note 7. Tax
145
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Note 7. Tax
146
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Note 8. Goodwill, customer relations/contracts and other intangible assets
147
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Note 9. Vessels and other tangible assets
148
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Note 9. Vessels and other tangible assets
149
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Note 10. Right-of-use assets
150
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Note 10. Right-of-use assets
151
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Note 10. Right-of-use assets
152
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Note 11. Impairment on non-current assets
153
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Note 11. Impairment on non-current assets
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Note 11. Impairment on non-current assets
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Note 12. Principal subsidiaries
156
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Note 12. Principal subsidiaries
157
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Note 13. Subsidiaries with material non-controlling interest
158
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Note 14. Share information and earnings per share
159
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Note 15. Employee retirement plans
160
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Note 15. Employee retirement plans
161
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Note 16. Interest-bearing liabilities
162
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Note 16. Interest-bearing liabilities
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Note 16. Interest-bearing liabilities
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Note 16. Interest-bearing liabilities
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Note 16. Interest-bearing liabilities
166
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Note 17. Financial risk
167
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Note 17. Financial risk
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Note 17. Financial risk
177
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Note 18. Provisions and contingencies
178
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Note 19. Specification of balance sheet
179
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Note 20. Trade receivables and trade payables
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Note 20. Trade receivables and trade payables
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Note 21. Restricted bank deposits and undrawn commited drawing rights
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Note 22. Related party transactions
183
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Note 22. Related party transactions
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Note 23. Events after the balance sheet date
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Reconciliation of alternative performance measures
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Reconciliation of alternative performance
measures
Definitions of Alternative Performance Measures (APMs)
This section describes the non-GAAP financial alternative performance measures
(APM) that are used in the annual report.
The following measures are not defined nor specified in the applicable finan-
cial reporting framework of IFRS. They may be considered as non-GAAP financial
measures that may include or exclude amounts that are calculated and presented
according to IFRS. These APMs are intended to enhance comparability of the results
and cash flows from period to period and it is the group’s experience that these
are frequently used by investors, analysts and other parties. Internally, these APMs
are used by management to measure performance on a regular basis. The APMs
should not be considered as a substitute for measures of performance in accor-
dance with IFRS.
EBITDA is defined as Total revenue less operating expenses. EBITDA is used as an
additional measure of the group’s operational profitability, excluding the impact
from financial items, taxes, depreciation and amortization and impairment/(rever-
sal of impairment).
EBITDA adjusted is defined as EBITDA excluding items in the result which are not
regarded as part of the underlying business. Examples of such items are restruc-
turing costs, anti-trust, gain/loss on sale of vessels and other tangible assets and
other income and expenses which are not primarily related to the period in which
they are recognized.
EBIT is defined as Total revenue less Operating expenses, Other gain/loss and
depreciation, amortization and impairment/(reversal of impairment). EBIT is used
as a measure of operational profitability excluding the effects of how the operations
were financed, taxed and excluding foreign exchange gains & losses.
EBIT adjusted and Profit/(loss) for the period adjusted is defined as EBIT/Profit/
(loss) for the period adjusted excluding items in the result which are not regarded
as part of the underlying business. Example of such items are restructuring costs,
anti-trust, gain/loss on sale of vessels and other tangible assets, impairment, other
gain/loss and other income and expenses which are not primarily related to the
period in which they are recognized.
Capital employed (CE) is calculated based on the average of Total assets less Total
liabilities plus total interest-bearing debt for the last twelve months. CE is measured
in order to assess how much capital is needed for the operations/business to func-
tion and evaluate if the capital employed can be utilized more efficiently and/or if
operations should be discontinued.
Return on capital employed (ROCE) is based on last twelve months EBIT/EBIT
adjusted divided by capital employed. ROCE is used to measure the return on the
capital employed without taking into consideration the way the operations and
assets are financed during the period under review. The group considers this ratio
as appropriate to measure the return of the period.
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Total interest-bearing debt is calculated as the end of period sum of Non-current
interest-bearing loans and bonds, Non-current lease liabilities, Current inter-
est-bearing loans and bonds and Current lease liabilities. The group considers this
a good measure of total financial debt.
Net interest-bearing debt (NIBD) is calculated as the end of period Total inter-
est-bearing debt less the end of period Cash and cash equivalents. The group
considers this a good measure of underlying financial debt.
NIBD/EBITDA adjusted is calculated based on the end of period Net interest-bear-
ing debt divided by the aggregate last twelve months of EBITDA adjusted. The
group considers this a good measure of leverage as it indicates how many years
of EBITDA adjusted, being a proxy for normal cash flow from operations, is needed
to cover the NIBD.
Return on equity is based profit/(loss) after tax for the last twelve months divided by
annual average of equity. The group considers this ratio as appropriate to measure
the return for the period.
USD million Dec 31, 2022 Dec 31, 2021
Non-current interest-bearing loans and bonds 2,200 2,158
Non-current lease liabilities 1,254 1,218
Current interest-bearing loans and bonds 316 515
Current lease liabilities 317 238
Total interest-bearing debt 4,087 4,128
Less Cash and cash equivalents 1,216 710
Net Interest-bearing debt 2,872 3,418
USD million 2022 2021
Net Interest-bearing debt 2,872 3,418
Last twelve months adjusted EBITDA 1,528 865
Net interest-bearing debt/adjusted EBITDA ratio 1.9 4.0
USD million Dec 31, 2022 Dec 31, 2021
Total equity 3,508 2,804
Total assets 8,394 7,794
Equity ratio 42% 36%
Net interest-bearing debt
Net interest-bearing debt divided by last twelve months adjusted EBITDA
Equity ratio
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Reconciliation of Total revenue to EBITDA and EBITDA adjusted
USD million 2022 2021
Total revenue 5,045 3,884
Operating expenses excluding other gain/(loss) (3,497) (3,054)
EBITDA 1,548 830
EBITDA shipping services 1,359 670
Loss on sale of vessel 10 32
Anti-trust expense/ (reversal of expenses) (6) 35
EBITDA adjusted shipping services 1,363 736
EBITDA logistics services 107 108
EBITDA adjusted logistics services 107 108
EBITDA government services 95 40
Gain on sale of vessel (14) -
EBITDA adjusted government services 81 40
EBITDA holding/eliminations (14) 11
Loss on sale of vessel (10) (32)
EBITDA adjusted holding/eliminations (23) (20)
EBITDA adjusted 1,528 865
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Reconciliation of total assets to capital employed and ROCE
calculation and return on equity calculation
Reconciliation of Total revenue to EBIT and EBIT adjusted
USD million Notes 2022 2021
EBITDA 1,548 830
Other gain/loss 5 (47) 21
Depreciation and amortization 8,9,10 (541) (483)
(Impairment)/reversal of impairment 11 (29) (62)
EBIT 931 306
Anti-trust expense/ (reversal of expenses) (6) 35
Gain on sale of vessel (14) -
Change in fair value of derivative financial asset 47 (21)
Reversal of/impairment asset held-for-sale - (8)
Impairment recycling vessels - -
Impairment goodwill and intangible assets 29 76
Total adjustments 55 82
EBIT adjusted 986 388
Profit/(loss) for the period 794 177
Total adjustments 55 82
Profit/(loss) for the period adjusted 850 259
Yearly average
USD million 2022 2021
Total assets 8,117 7,621
Less Total liabilities 5,008 4,959
Total equity 3,109 2,661
Total interest-bearing debt 4,082 4,098
Capital employed 7,191 6,759
EBIT last twelve months 931 306
EBIT last twelve months adjusted 986 388
ROCE 12.9% 4.5%
ROCE adjusted 13.7% 5.7%
Profit/(loss) last twelve months 794 177
Profit/(loss) last twelve months adjusted 850 259
Return on equity 25.6% 6.6%
Return on equity adjusted 27.3% 9.7%
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Income statement
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Income statement
Statement of comprehensive income
USD million Notes 2022 2021
Operating expenses
Employee benefits 2 (13) (10)
Other operating expenses 1 (9) (11)
Total operating expenses (23) (20)
Net operating profit/(loss) (23) (20)
Financial income and expenses
Financial income 1 156 24
Financial expenses 1 (47) (23)
Financial derivatives 1 (72) (17)
Financial income/(expense) 36 (16)
Profit/(loss) before tax 14 (37)
Tax income/(expense) 3 14 (0)
Profit/loss) for the year 27 (37)
Transfers and allocations
(To)/from equity 5 (27) 37
Total transfers and allocations (27) 37
USD million Notes 2022 2021
Profit/(loss) for the year 27 (37)
Other comprehensive income/(loss):
Items that will not be reclassified to the income statement
Remeasurement postemployment benefits, net of tax 6 1 2
Other comprehensive income, net of tax 1 2
Total comprehensive income/(loss) 28 (35)
Total comprehensive income/(loss) attributable to:
Owners of the parent 28 (35)
Total comprehensive income/(loss) for the year 28 (35)
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Balance sheet
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Balance sheet
USD million Notes Dec 31, 2022 Dec 31, 2021
Assets
Non-current assets
Deferred tax assets 3 23 11
Investments in subsidiaries 4 2,966 2,926
Other non-current assets 9 130 314
Total non-current assets 3,118 3,251
Current assets
Other current assets 9 209 138
Cash and bank deposits 21 0
Total current assets 230 138
Total assets 3,348 3,389
Equity and liabilities
Equity
Share capital 5 28 28
Retained earnings 5 2,673 2,707
Total equity 2,701 2,735
Non-current liabilities
Pension liabilities 6 21 27
Non-current interest-bearing debt 7 529 449
Financial derivatives 8 72 7
Other non-current liabilities to group companies 10 - 19
Total non-current liabilities 623 502
Current liabilities
Public duties payable 0 0
Other current liabilities 9 24 151
Total current liabilities 25 152
Total equity and liabilities 3,348 3,389
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Cash flow statement
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Cash flow statement
USD million 2022 2021
Cash flow from operating activities
Profit before tax 14 (37)
Financial (income)/expense (36) 16
Change in net pension assets/liabilities (4) (3)
Change in current assets/liabilities – group companies (105) (154)
Net change in other assets/liabilities 82 27
Net cash provided by/(used in) operating activities (50) (149)
Cash flow from investing activities
Investments in subsidiaries, associates and joint ventures (40) -
Interest received 10 5
Net cash flow provided by/(used in) investing activities (30) 5
Cash flow from financing activities
Proceeds from issuance of debt 142 230
Repayment of debt (133) (119)
Subsidaries’ repayment of debt 188 -
Proceeds from issuance of debt to subsidaries 31 -
Repayment of debt to subsidaries (12) -
Group contribution/ dividend from subsidaries 1 -
Disposal of own shares 1 0
Dividend to shareholders (63) -
Cash from financial derivatives (14) (11)
Interest paid including interest rate derivatives (40) (34)
Net cash flow provided by/(used in) financing activities 101 65
Net increase/(decrease) in cash and cash equivalents 20 (80)
Cash and cash equivalents at beginning of period
1
0 80
Cash and cash equivalents at end of period 21 0
1 The company has several banks accounts in different currencies. The cash flow effect from revaluation of cash and cash equivalents is included in net cash flow provided by/
(used in) operating activities. The company has no restricted bank deposits.
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Note 1. Specification of income statement
Note 1. Specification of income statement
Expensed audit fee
USD million Notes 2022 2021
Other operating expenses
Intercompany expenses 10 (6) (7)
Other administration expenses (3) (3)
Total other operating expenses (9) (11)
Financial income/(expenses)
Financial income
Dividend from subsidiaries and group contribution 10 67 1
Interest income 21 16
Net currency gain 68 7
Other financial income - 0
Total financial income 156 24
Financial expenses
Interest expenses (38) (27)
Net currency loss (6) 6
Other financial expenses (4) (2)
Total financial expenses (47) (23)
Financial derivatives
Realized gain/(loss) related to currency derivatives (14) (11)
Realized gain/(loss) related to interest rate derivatives (2) (5)
Unrealized gain/(loss) related to currency derivatives (67) (8)
Unrealized gain/(loss) related to interest rate derivatives 11 7
Total financial derivatives (72) (17)
Financial income/(expenses) 36 (16)
USD thousand 2022 2021
Statutory audit 189 138
Other assurance services - 43
Total expensed audit fee 189 182
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Note 2. Employee benefits
Note 2. Employee benefits
The board’s remuneration for the financial year 2022 will be approved by the general
meeting April 26, 2023 and paid/expensed in 2023.
The board’s remuneration for the financial year 2021 was paid in 2022.
At the AGM in 2022, Marianne Lie and Jonas Kleberg retired from the board of direc-
tors with Hans Åkervall and Yngvil Eriksson Åsheim replacing them.
At the AGM in 2021, Håkan Larsson resigned from the board of directors with Rune
Bjerke replacing him as chair.
Remuneration paid in other currencies than USD will not be comparable year-on-
year due to changes in exchange rates.
See separate remuneration report for further details regarding remuneration to
top executives.
Loans and guarantees
There were no loans or guarantees to members of the board per December 31, 2022.
USD million 2022 2021
Salary/remuneration board of directors 14 7
Payroll tax 1 1
Pension cost 0 1
Other remuneration (1) 1
Total employee benefits 13 10
USD thousand 2022 2021
Remuneration paid to the board of directors
Håkan Larsson - 181
Rune Bjerke 159 63
Thomas Wilhelmsen 59 63
Marianne Lie 69 76
Jonas Kleberg 57 63
Margareta Alestig 66 72
Anna Felländer 66 63
Yngvil Eriksson Åsheim - -
Hans Åkervall - -
Nomination committee
Anders Ryssdal 11 10
Jonas Kleberg 7 5
Carl Erik Steen 7 5
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Note 2. Employee benefits
Shares owned or controlled by representatives
of the group at December 31, 2022
The two main shareholders of Wallenius Wilhelmsen ASA are Walleniusrederierna
AB, with an ownership of 37.8 percent, and Wilh. Wilhelmsen Holding ASA with 37.9
percent of the shares. The Wilhelmsen family controls Wilh. Wilhelmsen Holding ASA
through Tallyman AS, and Mr Thomas Wilhelmsen controls Tallyman AS.
The Wallenius Kleberg family controls Walleniusrederierna AB through Rederi AB
Soya (Soya group).
Name
Number
of shares
Percent
of shares
Board of directors
Rune Bjerke (chair) 22,250 0.01%
Thomas Wilhelmsen 161,375,095 38.14%
Margareta Alestig - 0.00%
Anna Felländer - 0.00%
Yngvil Eriksson Åsheim - 0.00%
Hans Åkervall - 0.00%
Senior executives
Chief Executive Officer (CEO) – Lasse Kristoffersen - 0.00%
Chief Financial Officer (CFO) – Torbjørn Wist 5,000 0.00%
Executive Vice President (EVP) and Chief Operating Officer (COO) logistics services – Michael Hynekamp 20,315 0.00%
Executive Vice President (EVP) and Chief Operating Officer (COO) shipping services – Xavier Leroi 9,208 0.00%
Chief People Officer (CPO) – Wenche Agerup - 0.00%
Chief Digital Officer (CDO) – Simon White 15,691 0.00%
Nomination Committee
Anders Ryssdal - 0.00%
Jonas Kleberg - 0.00%
Carl Erik Steen - 0.00%
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Note 3. Tax
Note 3. Tax
USD 44 million in valuation allowance related to deferred tax asset arising from
tax losses carried forward in Norwegian entities, see note 1 to the group financial
statements for additional information.
USD million 2022 2021
Distribution of tax (income)/expense for the year
Change in deferred tax (14) 0
Total tax (income)/expense (14) 0
Basis for tax computation
Profit before tax 14 (37)
22% tax 3 (8)
Tax effect from
Non-taxable income (12) 0
Valuation allowance deferred tax assets 2 8
Currency translation from USD to local currency for tax purposes (6) 0
Total tax (income)/expense (14) 0
Effective tax rate (101.9%) (0.9%)
Deferred tax assets
Tax effect of temporary differences
Current assets and liabilities 0 0
Non-current liabilities and provisions for liabilities 23 11
Tax losses carried forward - -
Deferred tax assets 23 11
Composition of deferred tax and changes in deferred tax
Deferred tax assets at January 1 11 12
Charged directly to equity (0) (1)
Change of deferred tax through income statement 14 (0)
Currency translation differences (1) (0)
Deferred tax assets at December 31 23 11
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Note 4. Investment in subsidiaries
Note 4. Investment in subsidiaries
Investments in subsidiaries are initially measured at cost. Where a reduction in the
value of shares in subsidiaries is considered to be permanent and significant, an
impairment to net realizable value is recognized.
USD million Business office
Voting share/
ownership share
Book value
2022
Book value
2021
Wallenius Wilhelmsen Ocean Holding AS Lysaker, Norway 100% 1,267 1,267
Wallenius Wilhelmsen International Holding AS Lysaker, Norway 100% 1,116 1,116
ARC Group Holding AS Lysaker, Norway 100% 200 200
Wallenius Wilhelmsen Solutions Holding AS Lysaker, Norway 100% 383 343
Total investments in subsidiaries 2,966 2,926
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Note 5. Equity
Note 5. Equity
Nominal share value of NOK 0.52 each.
Own shares are meant to cover management’s share incentive program and the
employee share purchase program financially supported by “The Foundation for
WW Group employees.” When any of the programs are exercised, there will be a
reduction of own shares and the price paid in excess of the nominal value of the
shares increases retained earnings.
USD million
Share
capital
Own
shares
Total
paid-in
capital
Other
paid-in
capital
Retained
earnings Total
Change in equity
Equity at December 31, 2021 28 (0) 28 1,079 1,628 2,735
Profit for the year - - - - 27 27
Other comprehensive income for the year - - - - 1 1
Total comprehensive income - - - - 28 28
Sale of own shares - 0 0 - 1 1
Dividend to owners of the parent - - - - (63) (63)
Group contribution given - - - - - -
Equity at December 31, 2022 28 (0) 28 1,079 1,594 2,701
Equity at December 31, 2020 28 (0) 28 1,079 1,614 2,721
Profit for the year - - - - (37) (37)
Other comprehensive income for the year - - - - 2 2
Total comprehensive income - - - - (35) (35)
Sale of own shares - 0 0 - 0 0
Group contribution given - - - - 49 49
Equity at December 31, 2021 28 (0) 28 1,079 1,628 2,735
The company’s number of shares is as follows: Dec 31, 2022 Dec 31, 2021
Total number of shares 423,104,938 423,104,938
Own shares 586,119 700,883
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Note 5. Equity
The largest shareholders at December 31, 2022
Shareholders Notes Number of shares Percent of shares
Wilh. Wilhelmsen Holding ASA 10 160,210,000 37.87%
Skandinaviska Enskilda Banken AB 10 160,000,000 37.82%
Folketrygdfondet 9,711,845 2.30%
Clearstream Banking S.A. 3,481,038 0.82%
Verdipapirfondet Storebrand Norge 3,158,404 0.75%
Verdipapirfondet Alfred Berg Gamba 2,951,964 0.70%
State Street Bank And Trust Comp 2,829,858 0.67%
J.P. Morgan SE 2,316,499 0.55%
JPMorgan Chase Bank, N.A., London 2,071,650 0.49%
The Bank Of New York Mellon SA/NV 2,056,818 0.49%
Other 74,316,862 17.56%
Total number of shares 423,104,938 100.00%
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Note 6. Employee retirement obligations
Note 6. Employee retirement obligations
Description of the pension scheme
In order to reduce the company’s exposure to certain risks associated with defined
benefit plans, such as longevity, inflation, effects of compensation increases, the
company regularly reviews and continuously improves the design of its post-em-
ployment defined benefit plans. Until December 31, 2014, the company provided
both defined benefit pension plans and defined contribution pension plans.
The remaining pension obligation is related to some employees in the company’s
senior executive management. These obligations are mainly covered via company
annuity policies in Storebrand.
Pension costs and obligations includes payroll taxes. No provision has been made
for payroll tax in pension plans where the plan assets exceed the plan obligations.
The liability recognized in the balance sheet in respect of the remaining defined
benefit pension plans is the present value of the defined benefit obligation at the
end of the reporting period less the fair value of plan assets. The defined benefit
obligations are calculated annually by independent actuaries using the projected
unit credit method. The present value of the defined benefit obligation is deter-
mined by discounting the estimated future cash outflows using interest rates of
high-quality corporate bonds that are denominated in the currency in which the
benefits will be paid, and that have terms to maturity approximating to the terms
of the related pension obligation.
Actuarial gains and losses arising from experience adjustments and changes in
actuarial assumptions are charged or credited to equity in other comprehensive
income in the period in which they arise.
Anticipated pay regulation are business sector specific, influenced by composition
of employees under the plans. Anticipated increase in G is tied up to the anticipated
pay regulations. Anticipated regulation of pensions is determined by the difference
between return on assets and the hurdle rate.
Number of people covered by pension schemes at December 31 2022 2021
In retirement (inclusive disability pensions) 508 535
Total number of people covered by pension schemes 508 535
Financial assumptions applied for the valuation of liabilities 2022 2021
Discount rate 3.6% 1.8%
Anticipated pay regulation 3.5% 2.3%
Anticipated regulation of National Insurance base amount (G) 3.5% 2.3%
Anticipated regulation of pensions 1.7% 0.1%
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Note 6. Employee retirement obligations
USD thousand 2022 2021
Pension expenses
Current service cost - 290
Interest expense on defined benefit obligation 415 516
Interest income on plan assets - (22)
Net pension expenses 415 783
Remeasurements – Other comprehensive income
Effect of changes in financial assumptions 496 460
Effect of experience adjustments 669 3,690
Return on plan assets (excluding interest income) - (1,323)
Total remeasurements included in OCI 1,164 2,827
Tax effect of pension OCI (256) (670)
Net remeasurement in OCI 908 2,157
USD thousand 2022 2021
Pension obligations
Defined benefit obligations at January 1 26,990 33,675
Current service cost - 290
Interest expense 415 516
Benefit payments from employer (2,025) (2,466)
Remeasurements – change in assumptions (496) (460)
Remeasurements – experience adjustments (669) (3,690)
Effect of changes in foreign exchange rates (2,852) (874)
Pension obligations at December 31 21,363 26,990
Gross pension assets
Fair value of plan assets at January 1 - 1,355
Interest income - 22
Employer contributions - -
Return on plan assets (excluding interest income) - (1,340)
Effect of changes in foreign exchange rates - (37)
Gross pension assets at December 31 - -
Total pension obligations
Defined benefit obligations 21,363 26,990
Net pension liabilities 21,363 26,990
Payments from operations are estimated at USD 1.8 million in 2023 (2022: USD 2.3 million).
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Note 7. Interest-bearing debt
Note 7. Interest-bearing debt
Reconciliation of liabilities arising from financing activities
USD million Notes 2022 2021
Interest-bearing debt
Bonds 529 582
Repayment schedule for interest-bearing debt
Due in year 1 9 - 133
Due in year 2 203 -
Due in year 3 - 227
Due in year 4 203 -
Due in year 5 and later 127 227
Total interest-bearing debt repayable 534 587
Amortized financing costs (4) (6)
Book value interest-bearing debt 529 582
As of December 31, 2022, weighted average interest rate on interest-bearing debt is 8.07 percent.
USD million
Non-current
interest-bearing
debt
Current
interest-bearing
debt
Total
financing
activities
Net debt at December 31, 2021 449 133 582
Cash flows (proceeds) from loans and bonds 142 - 142
Cash flow (repayments) from loans and bonds - (133) (133)
Foreign exchange movement (63) (4) (67)
Other non-cash movements 1 4 5
Net debt at December 31, 2022 529 0 529
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Note 8. Financial risk
Note 8. Financial risk
The company has exposure to the following financial risks from its operations:
•
Market risk
- Foreign exchange rate risk
- Interest rate risk
•
Credit risk
•
Liquidity risk
The financial risk management program of the group, and by extension the company,
focuses on the unpredictability of financial markets and seek to minimize the
potential adverse effects on the group’s financial performance. Derivative financial
instruments are used to hedge certain exposures.
Identification, evaluation and hedging of financial risk is carried out by the central
treasury department under policies approved by the board of directors.
Separate policies have not been established for the parent company for the market
risks. As a consequence, financial derivatives part of the group’s economic hedg-
ing strategies, can be held by the company and included in the parent company’s
financial statements without any direct economic hedging effect for the parent
company. Hedge accounting has not been applied for these economic hedges.
Any change in market value of economic hedge derivatives is therefore recognized
in the income statement.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange
rates and interest rates, will affect the company’s profit or the value of its holdings
of financial instruments. The sensitivity analyses in the sections below relate to
the position of financial instruments at December 31, 2022. It is assumed that the
sensitivities have a symmetric impact, i.e., an increase in rates result in the same
absolute movement as a decrease in rates.
Foreign exchange rate risk
The company is exposed to currency risk on revenues and costs in non-functional
currencies (transaction (cash flow) risk) and balance sheet items denominated
in currencies other than USD (translation risk). The company’s largest individual
foreign exchange exposure is NOK against USD.
Various financial derivatives, such as forwards, options and cross-currency (basis)
swaps are used to hedge this exposure. Key aspects of the currency hedging policy
are:
•
Net cash flows in other significant currencies than USD can be hedged using
a layered model with up to a 36-month horizon
•
Significant capital commitments or divestments in other currencies than USD
are hedged
•
Balance sheet exposure in currencies other than USD shall in general be
hedged. The group will in each case, however, consider e.g., the asset-liability
match and the currency of any related cash flow.
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Note 8. Financial risk
Economic hedging of transaction risk
The group has an economic hedging program for CNY, NOK and SEK exposures in
place as of both year-ends 2022 and 2021.
The portfolio of derivatives used to economically hedge the group’s transaction
risk exhibit the following income statement sensitivity:
Economic hedging of translation risk
The company has outstanding NOK-denominated bonds of about NOK 5.25 billion
(USD 533 million). The corresponding amount was NOK 4.6 billion (USD 517 million)
for 2021. All of this debt (NOK 5.25 billion) has been economically hedged against
USD with cross-currency swaps.
FX sensitivities
The company monitors the net exposure and calculates sensitivities on a regular
basis, based on average market volatility per currency cross. Sensitivities showing
a potential accounting effect below USD 2 million are considered non-material. On
December 31, 2022, there were no material FX sensitivities. All changes in the fair
value of financial derivatives are recognized in the income statement. Equity sensi-
tivities will therefore equal sensitivities in the income statement.
Interest rate risk
The group, of which the company is a part, seeks to economically hedge between
20-80 percent of the average net interest rate exposure over the next five years,
predominantly through interest rate swaps and fixed rate loans.
Interest rate hedges held by the company corresponded to about 10 percent (2021:
about 15 percent) of its average net interest exposure at December 31. It should be
noted that hedge levels are considered at a group level. As such hedge levels for
the company can be higher or lower than group policy while still being within policy.
USD million
Income statement sensitivities of economic hedge program
Change in exchange rate levels (20%) (10%) 0% 10% 20%
Transaction risk
USD/NOK spot rate 7.87 8.85 9.84 10.82 11.81
Income statement effect (post tax) 3 1 - (1) (3)
USD/SEK spot rate 8.32 9.36 10.40 11.44 12.48
Income statement effect (post tax) 2 1 - (1) (2)
USD/CNY spot rate 5.51 6.20 6.89 7.58 8.27
Income statement effect (post tax) - - - - -
(Tax rate used is 22 percent, which equals the corporate tax rate in Norway)
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Note 8. Financial risk
As of December 31, 2022, the company did not hold any forward starting swaps
(2021: nil).
The average remaining term of the existing loan portfolio is about 2.9 years, while
the average remaining term of the running interest rate derivatives and fixed inter-
est loans is approximately 1.2 years.
Interest rate sensitivities
The company’s interest rate risk originates from differences in duration and amount
between interest-bearing assets and interest-bearing liabilities. On the asset side,
bank deposits are subject to risk from changes in the general level of interest rates,
primarily in USD. On the liability side, the mix of debt and issued bonds with attached
fixed or floating coupons – in combination with financial derivatives on interest
rates (plain vanilla interest rates swaps) – are exposed to changes in the level and
curvature of interest rates. The group uses the weighted average duration of inter-
est-bearing assets, liabilities and financial interest rate derivatives to compute the
group’s sensitivity towards changes in interest rates. The below table summarizes
the interest rate sensitivity towards the fair value of assets and liabilities:
Apart from the fair value sensitivity calculation based on the group’s net duration,
the group has cash flow risk exposure stemming from the risk of increased future
interest payments on the unhedged part of the group’s interest-bearing debt.
Changes in fair value of financial derivatives are recognized in the income statement.
Book value equals market value.
USD million 2022 2021
Maturity schedule economic interest rate hedges (nominal amounts)
Due in year 2 150 0
Due in year 3 0 150
Total economic interest rate hedges 150 150
USD million
Change in interest rate level (2%) (1%) 0% 1% 2%
Fair value sensitivities of interest rate risk
Estimated change in fair value (post tax) - - - - -
(Tax rate used is 22 percent, which equals the corporate tax rate in Norway)
Assets Liabilities Assets Liabilities
USD million 2022 2021
Interest rate derivatives - - - 7
Derivatives used for economic cash flow hedging 3 - 1 -
Derivatives used for economic translation risk hedging (basis swaps) - 72 1 7
Total market value of derivatives 3 72 2 14
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Note 8. Financial risk
Credit risk
Credit risk is the risk of financial loss to the company if a customer or counterparty
to a financial instrument fails to meet its contractual obligations, and originates
primarily from the company’s customer receivables, financial derivatives used to
economically hedge interest rate risk or foreign exchange risk, as well as bank
deposits.
Cash and cash equivalents
The company’s exposure to credit risk on cash and cash equivalents is consid-
ered to be very limited as the company maintains banking relationships with well
reputed and familiar banks. In addition, the group – of which the company is a part
– in most instances – has a net debt position towards these banks.
Financial derivatives
The company’s exposure to credit risk on its financial derivatives is considered to
be limited as the group’s counterparties are well reputed and familiar banks.
Guarantees
The company has provided a parent company guarantee towards the banks involved
in the financing of Wallenius Wilhelmsen Ocean.
Credit risk exposure
The carrying amount of financial assets represents the maximum credit exposure.
The maximum exposure to credit risk at the reporting date was:
Book value equals market value.
USD million Notes 2022 2021
Exposure to credit risk
Other non-current assets from group companies 9 127 314
Financial derivatives asset 9 3 2
Receivables from group companies 9 157 137
Other current receivables 9 2 -
Cash and cash equivalents 21 -
Total exposure to credit risk 309 453
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Note 8. Financial risk
Liquidity risk
The company’s approach to managing liquidity is to secure that it will always have
sufficient liquidity to meet its liabilities, under both normal and stressed condi-
tions, without incurring unacceptable losses or risking damage to the company’s
reputation.
The company regularly issues NOK debt in the Norwegian bond market, with
proceeds swapped into USD via cross-currency swaps at the time of each issue. If
the USD/NOK exchange rate increases above certain thresholds from the rate at
the time of issue, the company will need to post cash collateral with the counter-
parties based on the mark-to-market value above the threshold. The cash collateral
is released back to the company if the USD/NOK exchange rate decreases. As of
December 31, 2022, the group had posted USD 2 million in cash collateral relating
to cross-currency swaps for the three outstanding NOK bonds. The cash collateral
is recognized in Other current assets in the balance sheet.
The company’s liquidity risk is considered low in that it holds significant liquid
assets. At December 31, the company had USD 211 million (2021: USD 74 million) in
liquid assets which can be realized over a three-day period.
Undiscounted cash flows financial liabilities
Interest expenses on interest-bearing debt included above have been computed
using interest rate curves as of year-end.
USD million
Less than
1 year
Between
1 and 2 years
Between
2 and 5 years
2022
Bonds 62 261 397
Financial derivatives (3) - -
Total interest-bearing debt 60 261 397
Current liabilities
(excluding next year’s instalment on interest-bearing debt and financial derivatives) 24 - -
Total gross undiscounted cash flows financial liabilities at December 31 84 261 397
USD million
Less than
1 year
Between
1 and 2 years
Between
2 and 5 years
2021
Bonds 174 33 505
Financial derivatives 4 5 1
Total interest-bearing debt 177 37 506
Current liabilities
(excluding next year’s instalment on interest-bearing debt and financial derivatives) 12 - -
Total gross undiscounted cash flows financial liabilities at December 31 189 37 506
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Note 8. Financial risk
Covenants
The main covenant on the company’s bond debt is limitation on the ability to pledge
assets. As of the balance date, the group is in compliance with all financial and
non-financial covenants.
Fair value estimation
The fair value of financial instruments traded in an active market is based on
quoted market prices at the balance sheet date. The fair value of financial instru-
ments not traded in an active market (over-the-counter contracts) are based on
third party quotes.
These quotes use the maximum number of observable market rates for price discov-
ery. Specific valuation techniques used to value financial instruments include:
•
Quoted market prices or dealer quotes for similar instruments
•
The fair value of interest rate swaps is calculated as the present value of the
estimated future cash flows based on observable yield curves
•
The fair value of forward foreign exchange contracts is determined using
forward exchange rates at the balance sheet date, with the resulting value
discounted back to present value and
•
The fair value of foreign exchange option contracts is determined using
observable forward exchange rates, volatility, yield curve and time-to-maturity
parameters at the balance sheet date, resulting in an option premium
The fair value of financial liabilities for disclosure purposes is estimated by discount-
ing the future contractual cash flows at the current market interest rate that is
available to the group for similar financial instruments.
Interest-bearing debt
All interest-bearing liabilities are considered to be level 3 in the fair value hierarchy.
USD million Fair value Book value
2022
Bonds 543 529
Total interest-bearing liabilities at December 31 543 529
USD million Fair value Book value
2021
Bonds 604 582
Total interest-bearing liabilities at December 31 604 582
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Note 8. Financial risk
Fair value hierarchy
The fair value of financial instruments not traded in an active market are based on
third-party quotes (mark-to-market). These quotes use the maximum number of
observable market rates for price discovery.
The different valuation techniques typically applied by financial counterparties
(banks) are described above. These instruments – currency and interest rate deriv-
atives – are included in level 2.
See note 17 to the group financial statements for further information on financial risk.
USD million Level 2 Total balance
2022
Financial assets at fair value through income statement
- Financial derivatives 3 3
Total assets at December 31 3 3
Financial liabilities at fair value through income statement
- Financial derivatives 72 72
Total liabilities at December 31 72 72
USD million Level 2 Total balance
2021
Financial assets at fair value through income statement
- Financial derivatives 2 2
Total assets at December 31 2 2
Financial liabilities at fair value through income statement
- Financial derivatives 14 14
Total liabilities at December 31 14 14
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Note 8. Financial risk
Financial instruments by category
USD million
Assets at
amortized cost
Assets at fair
value through the
income statement Total
2022
Assets
Other non-current assets 127 - 127
Financial derivatives 3 - 3
Other current assets 159 - 159
Cash and cash equivalents 21 - 21
Assets at December 31 309 - 309
USD million
Liabilities at fair
value through the
income statement
Other financial
liabilities at
amortized cost Total
2022
Liabilities
Non-current interest-bearing debt - 529 529
Financial derivatives 72 - 72
Other current liabilities - 24 24
Liabilities at December 31 72 553 625
USD million
Assets at
amortized cost
Assets at fair
value through the
income statement Total
2021
Assets
Other non-current assets 314 - 314
Financial derivatives 2 - 2
Other current assets 137 - 137
Cash and cash equivalents - - -
Assets at December 31 453 - 453
USD million
Liabilities at fair
value through the
income statement
Other financial
liabilities at
amortized cost Total
2021
Liabilities
Non-current interest-bearing debt - 449 449
Financial derivatives 14 - 14
Other non-current liabilities - 19 19
Current interest-bearing debt - 133 133
Other current liabilities - 12 12
Liabilities at December 31 14 612 627
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Note 9. Specification of balance sheet
Note 9. Specification of balance sheet
The fair value of current receivables and payables is virtually the same as the carried
amount, since the effect of discounting is insignificant.
USD million Notes 2022 2021
Other non-current assets
Other non-current assets from group companies 10 127 314
Financial derivatives 3 1
Total other non-current assets 130 314
Other current assets
Receivables from group companies 10 207 137
Financial derivatives - 1
Other current receivables 2 0
Total other current assets 209 138
Other current liabilities
Account payables 0 0
Payables to group companies 10 4 0
Next year’s instalment on interest-bearing debt 7 - 133
Financial derivatives 0 7
Other current liabilities 20 11
Total other current liabilities 24 151
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Wallenius Wilhelmsen – Annual Report 2022
Financial statements contents →
Wallenius Wilhelmsen ASA Parent
Note 10. Transactions with related party
Note 10. Transactions with related party
The two main shareholders of Wallenius Wilhelmsen ASA are Walleniusrederierna
AB, with an ownership of 37.8 percent, and Wilh. Wilhelmsen Holding ASA with
37.9 percent of the shares each. The Wilhelmsen family controls Wilh. Wilhelmsen
Holding ASA through Tallyman AS, and the Wallenius Kleberg family controls Walle-
niusrederierna AB through Rederi AB Soya (Soya group).
For participation in the board of directors, Thomas Wilhelmsen received USD 59
thousand and Jonas Kleberg USD 57 thousand. In addition, Jonas Kleberg received
USD seven thousand for participation in the nomination committee.
See note 2 regarding fees to board of directors, note 5 regarding ownership and
separate remuneration report for further details.
The company has undertaken several transactions with related parties within the
Wilh. Wilhelmsen Holding group (WWH group). All transactions are entered into in
the ordinary course of business of the company.
WWH delivers services to the company related to inter alia human resources (“Shared
Services”) and in-house services such as canteen, post, switchboard and rent of
office facilities. Generally, Shared Services are priced using a cost plus five percent
margin calculation, in accordance with the principles set out in the OECD Transfer
Pricing Guidelines and are delivered according to agreements that are renewed
annually.
USD million Notes 2022 2021
Income statement
Operating expenses to subsidiaries 1 (6) (7)
Dividend from subsidiaries and group contribution 1 67 1
Other financial income from subsidiaries 21 16
Financial expenses to subsidiaries (0) (0)
USD million Notes 2022 2021
Balance sheet
Non-current assets from subsidiaries 9 127 314
Current receivables from subsidiaries 9 207 137
Non-current liabilities to subsidiaries - 19
Current payables to subsidiaries 9 4 0
213
Main contents →
Wallenius Wilhelmsen – Annual Report 2022
Financial statements contents →
Wallenius Wilhelmsen ASA Parent
Note 11. Events after the balance sheet date
Note 11. Events after the balance sheet date
In January 2023, Wallenius Wilhelmsen ASA signed a new USD 100 million revolving
credit facility to be available for collateral postings related to cross-currency swaps.
The facility is secured by five sailing vessels that were previously unencumbered.
In February, the board proposed an ordinary dividend of USD 0.85 per share to the
annual general meeting on April 26, 2023, with USD 0.51 to be payable in May 2023
and USD 0.34 to be payable in November 2023. The dividend is declared in USD and
paid in NOK. The total proposed dividend amounts to USD 360 million, representing
45 percent of profit after tax for 2022.
Sustainability
statements
Through our sustainability reporting, we communicate our
performance and impacts on a wide range of sustainability topics
such as people, planet, prosperity and principles of governance.
The sustainability statements specifically provide overviews of
our sustainability performance data, GRI, SASB indices, TCFD
indices and EU Taxonomy reporting.
Contents →
215Wallenius Wilhelmsen – Annual Report 2022
Sustainability statements
Sustainability Performance Data
Contents →
Sustainability Performance Data
KPI & Description 2022 2021 2020 2019
Planet
GHG emissions
CO
2
e intensity from Shipping services, gCO
2
e / tonne km (EEOI) 30.38 33.50 33.51 33.33
Total Scope 1 emissions, tonne CO
2
e 4,546,703 4,591,612 3,772,582 4,695,394
-Shipping 4,518,404 4,585,392 3,764,260 4,687,389
-Logistics 28,299
1
7,654 8,322 8,005
Total Scope 2 emissions, tonne CO
2
e 4,241 5,879 6,166 6,611
-Shipping
2
- - - -
-Logistics 4,241 5,879 6,166 6,611
Total Scope 3 emissions, tonne CO
2
e 1,575,000 1,540,000 1,487,000 -
Energy use
Total electrical consumption, Logistics services, in megawatt hours 13,854 14,023 15,209 16,094
Total energy consumed in terajoule (TJ), Shipping services 59,385 5,997,600 4,891,150 -
Percentage heavy fuel oil, Shipping services 19,1% 18% 11% -
Percentage renewable, Shipping services - - - -
Air Quality
Average sulphur content of fuel, Shipping services, percentage 0.39 0.37 0.38 2.06
Total SO
X
emissions of fleet under group control, in tonnes 11,084 10,645 8,945 60,989
Relative NO
X
emissions from owned fleet (as an average of International
Air Pollution Prevention certification values) 13.47 13.57 13.63 13.64
Biodiversity
Total number of significant spills (> 20 litres), Shipping services 1 1 - 1
Number of spills or discharges reported to authorities, Logistics
services 16 10 2 1
Percentage of owned fleet enrolled in hull fouling management
programme 100 100 100 100
Percentage of owned fleet complying with ballast water exchange; and 17 24
3
52 -
Percentage of owned fleet with ballast water treatment system installed 83 76 48 -
Waste management
Total waste landed to shore reception facilities (owned fleet) in cbm’s 7,177 7,368 6,532 4,931
Average amount of waste landed to shore reception per vessel
(owned fleet) in cbm’s 86.5 85.7 82.0 64.8
Food waste discharged to sea, in cbm’s 529 469 472 388
Average amount of food waste discharged to sea, per vessel, in cbm’s 6.37 4.50 5,5 5,1
Waste sent to landfills, generated from Logistics services, in tonnes 4,385 4,856 4,538 5,843
Water consumption
1 The increase in Logisitc’s scope 1 CO2e emissions from 2021 to 2022 is due to the inclusion of emissions from our landbased trucking operations, Keen.
2 We do currently not disclose scope 2 emissions from offices.
3 This data has been corrected compared to 2021 performance presented in annual raport 2021
216Wallenius Wilhelmsen – Annual Report 2022
Sustainability statements
Sustainability Performance Data
Contents →
KPI & Description 2022 2021 2020 2019
Water consumption in areas with high or extremely high water stress,
in mega liters 19.0 - - -
People
Diversity, Equity and Inclusion
Total number of employees, without consultants/contractors 7,456
4
7,509 8,665 9,397
- EMEA 1,635 1,732 1,815 2,044
- America 5,043 4,774 5,934 5,948
- Asia 530 753 - -
- Oceania 248 250 - -
- External Consultants or contractors 1,419 771 - -
Gender balance, all employees, M:F 75:25 75:25 - -
Gender balance, office workers, M:F 58:42 61:39 59:41 60:40
Gender balance, production workers, M:F 82:18 81:19 - -
Gender balance of office workers in senior roles, M:F 78:22 79:21 81:19 -
Number of females in senior roles 59 54 50 -
Earnings ratio, percentage Women:Men
- Sweden 101 101 - -
- Norway 93 98 - -
- Korea 95 80 - -
- USA 95 87 - -
Overall score from employee engagement survey 7.4 - - -
Diversity score from employee engagement survey, (score 1-8) 8.0 7.9 7,6 -
Health, Safety & Wellbeing
Work related fatalities - 1.00 - 1.00
Number of marine casualties, percentage classified as very serious - - - -
Lost Time Incident Frequency, Shipping services 0.38 0.88 0.99 0.73
Lost Time Incident Frequency, Logistics services 15.76 15.15 13.99 15.79
Port state controls
Number of port state control detentions - - - -
Average number of deficiencies per vessel inspection, Shipping
5
0.78 0.73 1.00 -
Number of road accidents and incidents, road transport 3 6 3 -
Safety Measurement System BASIC percentiles for
1) unsafe driving 3 2 0 -
2) hours of service compliance 22 0 0 -
3) Driver fitness 0 0 0 -
4) Controlled substances/alcohol 0 0 0 -
5) vehicle maintenance 23 25 24 -
6) Hazardous Materials Compliance; road transport 0
6
0
6
0 -
Annual retention rate of Shipping crew 0.99 0.97 0.97 0.95
4 Not including consultants
5 Target is <1
6 Updated from n/a to 0 in 2021 and 2022
217Wallenius Wilhelmsen – Annual Report 2022
Sustainability statements
Sustainability Performance Data
Contents →
KPI & Description 2022 2021 2020 2019
Absenteeism, Logistics services
(days away due to illness per hours worked) 2.52% 2.35% 2.55% 3.00%
Training & development
Office workers invited to take a performance dialog 1.00 1.00 1.00 1.00
Human and Labor rights
Number and % of retired vessels recycled according to responsible
recycling policy 0; 0% 2
7
; 100% 2; 100% -
Principles of governance
Ethical business conduct
Number of cases which group companies were found in breach
of international sanction laws and regulations - - - -
Number of calls at ports in countries that have the 20 lowest rankings
in Transparency International Corruption Perception Index 12 23 11 -
Total amount of monetary losses as a result of legal proceedings
associated with bribery or corruption - - - -
Governance body members and employees the
organization’s anti-corruption policies and procedures
have been communicated to, % 100 80 - -
Incidents of corruption confirmed during the current year,
related to this year - - - -
Incidents of corruption confirmed during the current year,
but related to previous years - - - -
Total number of cases reported to AlertLine 85 21
- HR related cases 39 12
- Safety-related cases 3 3
- Performance and or compensation related cases 23 5
- Compliance related cases 12 1
- Human rights and labor-related cases - -
- Conflict of interest related cases 8 -
Security
Cyber security, % up-time of essential systems
8
99.9 - - -
Cyber security, Number of days where expected uptime of essential
systems is met or exceeded
8
354 - - -
Number of incidents of security breaches or theft, Logistics services 12 3 - 1
Number of security breaches on board company owned vessels 5 6 2 3
Number of substantiated breaches of customer privacy and
data security - -
Number of substantiated breaches of empoloyee privacy and
data security - - - 4.00
7 Number of recycled vessels updated from 1 to 2
8 New metric for 2022
218Wallenius Wilhelmsen – Annual Report 2022
Sustainability statements
Sustainability Performance Data
Contents →
KPI & Description 2022 2021 2020 2019
Prosperity
Quality
Customer Satisfaction
9
Q2 4.0 - - -
Q4 3.8 - - -
Tax practices
Number of tax incentives or special tax agreements with authorities 1
10
1 1 1
9 New disclosure for 2022, no data for previous years. The survey is completed two times a year, in Q2 and Q4
10 In 2022, Wallenius Wilhelmsen had 1 (one) tax incentive, compared to 1 (one) in 2021. The relevant tax incentive is related to our International Business Center (IBC) in Thailand, whereas we are
taxed at a 8 percent corporate income tax rate instead of the regular 20 percent.
219Wallenius Wilhelmsen – Annual Report 2022
Sustainability statements
EU Taxonomy reporting
Contents →
EU Taxonomy reporting
The EU Taxonomy is a green classification system that translates the EU’s sustain-
ability goals into criteria for specific economic activities. The purpose of the regu-
lation is to:
1. reorient capital flows towards sustainable investments,
2. systematically integrate sustainability into risk management, and
3. promote transparency in economic and financial operations by defining
sustainable activities through a “common language”
In 2021 we reported on our activities that were considered eligible according to
the requirements specified by the EU Taxonomy reporting framework. Norwegian
companies are not required to report on taxonomy alignment for 2022. we are
working towards reporting on the alignment criteria and below is the result of our
current assessment.
The group’s activities are linked to the boundaries of the reporting entity as defined
by IFRS and described in the group financial statements.
The below table shows the total Revenue, OPEX and CAPEX for the Wallenius Wilhelm-
sen group, and the estimated proportion of which is considered eligible and non-el
-
igible under the EU Taxonomy regulation.
The majority of our activities are classified as eligible under the economic activity
“Sea and coastal freight water transport, vessels for port operations and auxil-
iary activities included.” This includes all activity in our shipping and government
services segments, as all core and most ancillary activities in the segments are
related to international ocean movement of RoRo cargo.
We also have eligible activities related to “Freight transport services by road.” This
includes the Inland Transportation sub-segment, where we transport RoRo cargo
on land, as part of our logistics services operation.
Revenue OPEX CAPEX
Economic activities, 2022 USDm % USDm % USDm %
Taxonomy-eligible activities 4,425 88% 2,948 84% 79 77%
Sea and coastal freight water transport,
vessels for port operations and auxiliary activities (6.10) 4,243 84% 2,779 79% 73 70%
Freight transport services by road (6.6) 182 4% 168 5% 6 6%
Taxonomy non-eligible activities 620 12% 549 16% 24 23%
Other activities (e.g. terminal operations and technical services) 620 12% 549 16% 24 23%
Total 5,045 100% 3,497 100% 103 100%
220Wallenius Wilhelmsen – Annual Report 2022
Sustainability statements
EU Taxonomy reporting
Contents →
Compliance with Do No Significant Harm (DNSH) criteria
To make a substantial contribution to climate change mitigation, the eligible
economic activities must meet the technical screening criteria described in the
Taxonomy. In order to be aligned they must also comply with the criteria for deter-
mining if the activity causes no significant harm to any of the other environmental
objectives.
Our shipping services meet the DNSH criteria for all environmental objectives by
complying with relevant EU and IMO regulations and are not dedicated to the trans-
portation of fossil fuels.
Our road freight activities meets the DNSH criteria for all environmental objectives
as long as they have performed a climate risk and vulnerability assessment, meet
the criteria for reusable or recyclable parts and use tires which comply with exter-
nal noise requirements.
None of our eligible economic activities meets the substantial contribution criteria
described in the Taxonomy, however, we have no reason to believe that they do not
meet the DNSH criteria.
Compliance with minimum safequards
Our activities are carried out in compliance with the minimum safeguards. Please
refer to the following sections for further information:
•
Human rights: The section on human rights in the People chapter
describes our approach to human rights. Our due diligence process is
guided by the UNGP and the OECD Guidelines for Multinational Enter-
prises.
•
For fair competition and bribery and corruption: Refer to the Principles of
governance chapter.
•
For taxation: Refer to the Tax practices section in the Prosperity chapter
and note 7 in the financial statements.
We recognize that the EU Taxonomy Regulation is in the process of being developed
and implemented. We will continue to assess its impact on our operations and our
future reporting obligations. We have used our best judgment in interpreting the
requirements as they are currently available and as the regulation evolves and
becomes clearer, this may amend the initial classification.
221Wallenius Wilhelmsen – Annual Report 2022
Sustainability statements
GRI Index
Contents →
GRI Index
Global Reporting Initiative (GRI) is a independent international standards organi-
zation which has developed the world’s most widely used framework for sustain-
ability reporting. The GRI guidelines consist of reporting principles, aspects and
indicators that organizations can use to disclose information related to economic,
environmental and social performance.
Wallenius Wilhelmsen ASA has reported in accordance with the GRI Standards for
the period 01.01.2022 - 31.12.2022.
The table below shows Wallenius Wilhelmsen reporting relative to the GRI Stan-
dards guidelines
GRI standard/
other source Disclosure Wallenius Wilhelmsens’ response
Omission
Requirement(s)
omitted Reason Explanation
General disclosures
GRI 2:
Genereal
Discussions
2-1 Organiza-
tional details
a. Wallenius Wilhelmsen ASA
b. Principles of governance (p. 91)
c. Strandveien 20, 1366 Lysaker, Norway
d. Wallenius Wilhelmsen at a glance (p. 5)
A gray cell indicates that reasons for omission are not permit-
ted for the disclosure or that a GRI Sector Standard reference
number is not available.
2-2 Entities
included in the
organization’s
sustainability
reporting
Wallenius Wilhelmsen at a glance (p. 5)
Principles of governance (p. 91)
About the report (p. 3)
2-3 Reporting
period, frequency
and contact point
Period: Jan 1, 2021- Dec 30, 2022
Frequency: Yearly
Contact point: Anette.Ronnov@walwil.com
2-4 Restate-
ments of infor-
mation
As notes throughout the report.
No material restatements in this year’s report.
2-5 External
assurance
No, consistency check by financial auditor only
2-6 Activities,
value chain and
other business
relationships
Wallenius Wilhelmsen at a glance (p. 5)
Throughout Prosperity chapter (p. 77)
2-7 Employees Sustainability performance data (p. 215)
People (p. 45)
2-8 Workers who
are not employ-
ees
Sustainability performance data (p. 215)
2-9 Governance
structure and
composition
Wallenius Wilhelmsen at a glance (p. 5)
Principles of governance (p. 91)
2-10 Nomina-
tion and selection
of the highest
governance body
Principles of governance, Nomination Committee (p. 99)
2-11 Chair of the
highest gover-
nance body
Board of directors (p. 18)
Chair of the board, independent
2-12 Role of the
highest gover-
nance body in
overseeing the
management of
impacts
Principles of governance;
Board responsibility and work (p. 101)
The Chief Sustainability Officer (CSO) is responsible for sustainability
on a group level.
222Wallenius Wilhelmsen – Annual Report 2022
Sustainability statements
GRI Index
Contents →
GRI standard/
other source Disclosure Wallenius Wilhelmsens’ response
Omission
Requirement(s)
omitted Reason Explanation
GRI 2:
Genereal
Discussions
2-13 Delegation
of responsibil-
ity for managing
impacts
Principles of governance;
Board responsibility and work (p. 101)
2-14 Role of the
highest gover-
nance body in
sustainability
reporting
The board reviews and approves the annual report, including the
sustainability sections, Board responsibility and work (p. 101)
2-15 Conflicts of
interest
Principles of governance;
Nomination Committee (p. 99), Board of Directors - composition and
independence (p. 100), Board responsibility and work (p. 101)
2-16 Communi-
cation of critical
concerns
Board responsibility and work (p. 101)
No material new topics or concerns were identified related to the
sustainability reporting in 2022.
2-17 Collective
knowledge of the
highest gover-
nance body
All board members were invite to complete our Sustainability training
which is mandatory for all employees.
2-18 Evaluation
of the perfor-
mance of the
highest gover-
nance body
Principles of governance;
Board responsibility and work (p. 101)
2-19 Remunera-
tion policies
Principles of governance;
Remuneration of the Board of Directors (p. 103),
Salary and other remuneration for executive personnel (p. 106)
2-20 Process to
determine remu-
neration
Principles of governance;
Remuneration of the Board of Directors (p. 103),
Salary and other remuneration for executive personnel (p. 106)
2-21 Annual total
compensation
ratio
People (p. 45) Fully Information
unavailable/
incomplete
We currently only
track compen-
sation ratio for
women compared
to men
2-22 Statement
on sustainable
development
strategy
Words from CEO (p. 21)
2-23 Policy
commitments
People, Human and labor rights (p. 52)
Principles of governance;
Governance in partly-owned companies (p. 103)
Relevant policies are available one our webpage.
Policies are communicated in on-boarding, trainings, and on the
intranet
2-24 Embedding
policy commit-
ments
Refer to descriptions in specific policies for responsible business
which are availble on our homepage: https://www.walleniuswilhelm-
sen.com/who-we-are/sustainability
People, Training and development (p. 59)
2-25 Processes
to remediate
negative impacts
Described in the section "Why is it important" on the People, Planet,
Prosperity and Principles of governance chapters
2-26 Mecha-
nisms for seeking
advice and rais-
ing concerns
People, Human and labor rights (p. 52)
We have an open AlertLine which is a confidential service that you can
access from any location. Reports may be made on either an anon-
ymous or named basis. This website is hosted by an independent
third party. You can access it and read more abour our AlertLine on
our webpage at: https://www.walleniuswilhelmsen.com/who-we-are/
governance
2-27 Compliance
with laws and
regulations
Principles of governance (p. 91)
223Wallenius Wilhelmsen – Annual Report 2022
Sustainability statements
GRI Index
Contents →
GRI standard/
other source Disclosure Wallenius Wilhelmsens’ response
Omission
Requirement(s)
omitted Reason Explanation
GRI 2:
Genereal
Discussions
2-28 Member-
ship associations
In addition to the above:
The Ocean Exchange, Norwegian Shipping Association, World Ship-
ping Council, Maritime Anti Corruption Network ( MACN ), National
Association of Waterfront Employers, Norwegian Shipowners’ Associ-
ation, Norwegian Sea Law Association, The Association of European
Vehicle Logistics (ECG), American Association of Port Authorities,
National Freight Transportation Association
2-29 Approach
to stakeholder
engagement
We carry out regular stakeholder engagement through multiple
means including sector specific initiatives and working groups. In
2022, we engaged with customers on sustainability topics through
Drive Sustainability, as well as one-on-one engagements with targeted
customers on vessel recycling and supply chains. We also engaged
several shareholders on climate change and sustainability topics.
However, no specific stakeholder engagement was carried out in
2022 related to our report preparation process.
2-30 Collec-
tive bargaining
agreements
Pension obligations (p. 160)
Note 15, Employee retirement plans (p. 159)
Material topics
GRI 3: Material
Topics 202
3-1 Process to
determine mate-
rial topics
About the report (p. 3)
Principles of governance (p. 94)
A gray cell indicates that reasons for omission are not permit-
ted for the disclosure or that a GRI Sector Standard reference
number is not available.
3-2 List of mate-
rial topics
1. Green House Gas (GHG) emissions and climate risk
2. biodiversity
3. air quality and waste management
4. health, safety & well-being
5. human and labor rights
6. diversity, equity, inclusion
7. training & development;
8. innovation
9. quality of service
10. sustainable consumption
11. sustainable supply chain management
12. tax practices
13. ethical business conduct
14. security, privacy and data
15. sustainable finance
16. emergency preparedness
Anti-corruption
GRI 3: Material
Topics 2021
3-3 Management
of material topics
Principles of governance (p. 91)
GRI 205:
Anti-corruption
2016
205-1 Opera-
tions assessed
for risks related to
corruption
Zero
205-2 Commu-
nication and
training about
anti-corruption
policies and
procedures
All employees, senior management and Board are required to
complete Code of Conduct training
205-3 Confirmed
incidents of
corruption and
actions taken
Zero confirmed incidents of corruption in 2022
224Wallenius Wilhelmsen – Annual Report 2022
Sustainability statements
GRI Index
Contents →
GRI standard/
other source Disclosure Wallenius Wilhelmsens’ response
Omission
Requirement(s)
omitted Reason Explanation
Anti-competitive behavior
GRI 3: Material
Topics 2021
3-3 Management
of material topics
Principles of governance (p. 91)
GRI 206:
Anti-compet-
itive Behavior
2016
206-1 Legal
actions for
anti-compet-
itive behavior,
anti-trust, and
monopoly prac-
tices
3 class action processes
Settlements related to civil claims not included here
Tax
GRI 3: Material
Topics 2021
3-3 Management
of material topics
Prosperity (p. 77)
GRI 207: Tax
2019
207-1 Approach
to tax
Prosperity, section on Tax practices (p. 89) We do not have
a publicly avail-
able tax strategy.
Corporate tax
affairs are the
chief financial
officer’s
responsibility and
extend to all juris-
dictions where
the company
operates. The tax
position taken
in all significant
transactions is
supported by
obtaining an
external opinion.
Energy
GRI 3: Material
Topics 2021
3-3 Management
of material topics
Planet, Greenhouse gas emissions (GHG) and climate risk (p. 62)
GRI 302:
Energy 2016
302-1 Energy
consumption
within the organi-
zation
Sustainability performance data (p. 215)
Water and effluents
GRI 3: Material
Topics 2021
3-3 Management
of material topics
Water consumption and classification of water use in water scarce
areas to be included in EMS risk process
303-5 Water
consumption
Planet, Water Consumption (p. 73)
Emissions
GRI 3: Material
Topics 2021
3-3 Management
of material topics
Planet (p. 61)
GRI 305: Emis-
sions 2016
305-1 Direct
(Scope 1) GHG
emissions
Planet (p. 61)
305-2 Energy
indirect (Scope 2)
GHG emissions
Planet (p. 61)
305-3 Other
indirect (Scope 3)
GHG emissions
Sustainability performance data (p. 215)
305-4 GHG emis-
sions intensity
Planet (p. 61)
225Wallenius Wilhelmsen – Annual Report 2022
Sustainability statements
GRI Index
Contents →
GRI standard/
other source Disclosure Wallenius Wilhelmsens’ response
Omission
Requirement(s)
omitted Reason Explanation
GRI 305: Emis-
sions 2016
305-7 Nitrogen
oxides (NO
X
),
sulfur oxides
(SO
X
), and other
significant air
emissions
Planet (p. 61) We do not report
total NO
X
emis-
sions
Information
unavailable/
incomplete
It is technically
not possible to
report on this,
because we
cannot measure
it.
Waste
GRI 3: Material
Topics 2021
3-3 Management
of material topics
Planet (p. 61)
GRI 306:
Waste 2020
306-1 Waste
generation
and significant
waste-related
impacts
Planet (p. 75)
Sustainability performance data (p. 215)
306-2
Management
of significant
waste-related
impacts
Not applicable
306-3 Waste
generated
Planet (p. 61) We do not
currently report
a breakdown by
hazardous versus
non-hazard-
ous waste nor
waste treatment
method
Information
unavailable/
incomplete
This is challeng-
ing due to the
global nature of
our operations
and variable local
waste and recy-
cling practices.
Employment
GRI 3: Material
Topics 2021
3-3 Management
of material topics
People (p. 45)
GRI 401:
Employment
2016
401-1 New
employee hires
and employee
turnover
People (p. 45) Employee turn-
over
Information
unavailable/
incomplete
We are imple-
menting a new HR
system which will
be able to track
global turn-over.
To be completed
within 2024.
226Wallenius Wilhelmsen – Annual Report 2022
Sustainability statements
GRI Index
Contents →
GRI standard/
other source Disclosure Wallenius Wilhelmsens’ response
Omission
Requirement(s)
omitted Reason Explanation
Occupational health and safety
GRI 3: Material
Topics 2021
3-3 Management
of material topics
People (p. 45)
GRI 403:
Occupational
Health and
Safety 2018
403-1 Occupa-
tional health and
safety manage-
ment system
For Shipping services, in compliance with ISM Code, and to ensure
the safe operation of each ship and to provide a link between the
Company and those on board, the Company has designated a
person or persons ashore having direct access to the highest level
of management. The responsibility and authority of the designated
person(s) include monitoring the safety and pollution- prevention
aspects of the operation of each ship.
The Company has procedures, plans and instructions and checklists
for key shipboard operations concerning the safety of the person-
nel, ship and protection of the environment. Tasks are defined and
assigned to qualified personnel. The SMS includes procedures ensur-
ing that non- conformities, accidents and hazardous situations are
reported to the Company, investigated and analysed with the objective
of improving safety and pollution prevention. The Company also has
established procedures for the implementation of corrective action,
including measures intended to prevent recurrence.The company also
maintains a global Ethics Hotline so employees and stakeholders can
report (confidentially if desired) concernss about health and safety
issues , or any other concerns. At Logistics services, the company
requires Hazard Assessments, which includes on-site hazard identi-
fication and job safety analyses. e.g. before all physical jobs there is a
process to assess and discuss potential work related hazards between
team members. All employees are trained in identifying potential
hazards. In addition potential hazards identified are reported in the
incident reporting system and must be addressed by the line manager
and marked complete when they have been mitigated. Reminders are
automatically sent by the system to ensure risks are addressed and
results are discussed regularly at daily operations manager meet-
ings. The company uses Systems Evaluations, weekly HSE Audits and
Programme Manager Audits to ensure the quality of these processes,
and system changes are identified and approved at quarterly manage-
ment reviews. All workers are protected against reprisals per the Safe-
tyFirst programme documentation, and have continual training and
are aware of targets around incident reporting to ensure high levels
of hazard reporting. Workers can remove themselves from hazardous
situations if they deem it necessary and are protected from reprisals
as stated in SafetyFirst Handbook. The company’s Ethics Hotline
and Issues & Opportunities Register are tools for all employees and
contractors to enter HSQ risks from their mobile devices.
403-2 Hazard
identification, risk
assessment, and
incident investi-
gation
At Logistics services, each site has a dedicated Health & Safety First
representative, who has specialist knowledge and training to support
workers at their site. Additionally, hazard identifications, hazard
assessments and job safety analyses contribute to finding and elimi-
nating hazards. Read about our global safety committee on page 49 in
the Health and Safety chapter.
403-3 Occu-
pational health
services
People, Health, safety and wellbeing (p. 46)
403-4 Worker
participation,
consultation, and
communication
on occupational
health and safety
Monthly global safety meetings and weekly Safety meetings are
held at all production (logistics) sites, and weekly safety topics are
communicated to all safety responsibles. Additionally, shift meetings
follow a standardised format coverng safety topics before every shift
at all sites. Safety Committee members play a vital role supporting
the Safety 1st culture. Safety Committees provide an opportunity for
employees to use their experience to assist in promoting safe work
practices and working conditions. Safety Committee members are
available as a resource and point of contact to promote safe work
practices. The Safety Committee Chairperson and site Operations
Manager work as a team to facilitate the effective implementation of
the Safety 1st Program, perform senior level reviews/evaluations, and
serve as the liaison with the Safety 1st Program Manager.
227Wallenius Wilhelmsen – Annual Report 2022
Sustainability statements
GRI Index
Contents →
GRI standard/
other source Disclosure Wallenius Wilhelmsens’ response
Omission
Requirement(s)
omitted Reason Explanation
GRI 403:
Occupational
Health and
Safety 2018
403-5 Worker
training on occu-
pational health
and safety
At Shipping services, the company complies with ISM Code Ch.6, and
ensures that vessel masters are properly qualified for command;
fully conversant with the Company’s Safety Management System;
and given the necessary support so that the master’s duties can be
safely performed. We ensure that each ship is manned with qualified,
certificated and medically fit seafarers in accordance with national
and international requirements; and appropriately manned in order
to encompass all aspects of maintaining safe operation on board.
(See the Principles of minimum safe manning, adopted by the Orga-
nization by Resolution A.1047(27). The Company also has proce-
dures to ensure that new personnel and personnel transferred to new
assignments related to safety and protection of the environment are
given proper familiarization with their duties. Instructions essential
to be provided prior to sailing are identified, documented and given.
We ensure that all personnel involved in the Company’s SMS have an
adequate understanding of relevant rules, regulations, codes and
guidelines. Additional procedures exist for a) identifying any training
which may be required in support of the SMS to help ensure training
is provided for all personnel concerned; and b) ensuring the ship’s
personnel receive relevant information on the SMS in a working
language or languages understood by them. The Company ensures
that the ship’s personnel are able to communicate effectively in the
execution of their duties related to the SMS. At production and logistics
sites, Safety Committee members are trained in using the JSA process
as it relates to all facets of our logistics operations, including the
generation of a health and safety plans or risk management strategies
for project work.
403-6 Promotion
of worker health
a. Logistics employees have access to two Company-sponsored
services:
- Active employees are eligible to enroll into company sponsored
medical plans. Employee pays a portion of cost.
- All employees can participate in short-term disability insur-
ance. The cost of this insurance is fully paid by the company.
While WW uses from time to time contract staffing services,
contract (Temporary ) employees are not eligible for this cover-
age.
b. The company also provides an employee wellness program.
These services include healthy lifestyle coaching and deep, clin-
ically-focused condition management. Ocean crew are directly
employed by ship management suppliers hired by WW. Health-
care is provided to ocean crew by ship management company
and paid by WW. We also pay for additional healthcare insurance
for families. The ship management companies are held respon-
sible for implementing our Ship Operation & Management Policy
and ensuring that the vessel complies with the company’s HSEQC
policies as well as all IMO SOLAS requirements. Our Marine Oper-
ations Management team can have vessels audited for compli-
ance with the company’s policies on fair wages and working
conditions. Additionally, the company maintains a global Alert
Line which crew and employees can use (confidentially, if desired)
to report complaints on working conditions or any other subject.
403-7 Prevention
and mitigation
of occupational
health and safety
impacts directly
linked by busi-
ness relation-
ships
At Logistics services, when working with heavy equipment and prod-
ucts, there are often health and safety risks that may not be directly
under our control. Therefore we actively communicate to business
partners about our health & safety standards through our Code of
Conduct for employees and suppliers, and train our employees so they
can report incidents where they feel unsafe for example through our
whistleblower channel. We also conduct trainings (RoRo Rodeo, etc) to
show our suppliers, customers and other partners how to work safely
with heavy equipment.
For Shipping services, in compliance with ISM Code Chapter 12, the
Company conducts internal safety audits on board and ashore at
appropriate intervals to verify whether safety and pollution-prevention
activities comply with the SMS. The Company also periodically verifies
whether all those undertaking delegated ISM-related tasks are acting
in conformity with the Company’s responsibilities. The Company
periodically evaluates the effectiveness of the SMS, and audits and
possible corrective actions are carried out in accordance with internal
procedures. Management personnel responsible for the vessel or area
involved is required to take timely corrective action on deficiencies
found.
People, Health, safety and wellbeing (p. 46)
228Wallenius Wilhelmsen – Annual Report 2022
Sustainability statements
GRI Index
Contents →
GRI standard/
other source Disclosure Wallenius Wilhelmsens’ response
Omission
Requirement(s)
omitted Reason Explanation
GRI 403:
Occupational
Health and
Safety 2018
403-9 Work-re-
lated injuries
People, Health, safety and wellbeing (p. 46) Office workers
are not included
in the LTI statistic
and office related
man-hours are
not reported. the
total number of
hours worked are
used to calculate
LTIF per million
man-hours.
We currently
do not have a
breakdown by
emplyees and
contractors.
Information
unavailable/
incomplete
Training and education
GRI 3: Material
Topics 2021
3-3 Management
of material topics
People (p. 45)
GRI 404: Train-
ing and Educa-
tion 2016
404-1 Average
hours of train-
ing per year per
employee
3,5hrs
404-2 Programs
for upgrading
employee skills
and transi-
tion assistance
programs
All office employees are included in our GoGrowSucceed programme
and are offerd person development discussions with manager.
404-3 Percent-
age of employees
receiving regular
performance and
career develop-
ment reviews
People (p. 45)
Diversity and equal opportunity
GRI 3: Material
Topics 2021
3-3 Management
of material topics
People (p. 45)
GRI 405:
Diversity and
Equal Opportu-
nity 2016
405-1 Diversity
of governance
bodies and
employees
People (p. 45)
405-2 Ratio of
basic salary and
remuneration of
women to men
People (p. 45)
Customer privacy
GRI 3: Material
Topics 2021
3-3 Management
of material topics
Principles of governance (p. 91)
GRI 418:
Customer
Privacy 2016
418-1 Substan-
tiated complaints
concerning
breaches of
customer privacy
and losses of
customer data
We have had zero privacy and data security incidents
229Wallenius Wilhelmsen – Annual Report 2022
Sustainability statements
SASB Index
Contents →
SASB Index
Topic Accounting metric Unit of measure Data 2022 SASB code
Greenhouse
Gas Emissions
CO
2
Emissions
Gross global Scope 1 emissions: Financial control approach Metric tonnes CO₂-e 4,518,404 TR-MT-110a.1
Discussion of long-term and short-term strategy or plan to
manage Scope 1 emissions, emissions reduction targets,
and an analysis of performance against those targets
Qualitative description Planet (p. 61) TR-MT-110a.2
Energy consumed
Total energy consumed, shipping services Gigajoules (GJ) 59,385,000
TR-MT-110a.3
Percentage of energy from heavy
fuel (%)
19,1%
Percentage of energy from renew-
able/low-carbon sources (%)
0%
EEDI
Average Energy Efficiency Design Index (EEDI) for new ships Grams of CO₂ per tonne-
nautical mile
12.8 TR-MT-110a.4
Air Quality Other emissions to air
(1) NO
X
(excluding N2O) Metric tons Data not available
TR-MT-120a.1(2) SO
X
Metric tons 11,084
(3) particulate matter Metric tons Data not available
Ecological
Impacts
Marine protected areas
Shipping duration in marine protected areas or areas of protected
conservation status
Number of travel days Not available TR-MT-160a.1
Implemented ballast water
(1) exchange Percentage (%) 17%
TR-MT-160a.2
(2) treatment Percentage (%) 83%
Spills and releases to the environment
(1) number Number 1
TR-MT-160a.3
(2) aggregate volume Cubic meters (m³) 0.03
Employee
Health &
Safety
Lost time incident rate
Lost time incident rate (LTIR) Rate
Shipping: 0.38
Logistics: 15.76
TR-MT-320a.1
Business
Ethics
Corruption index
Number of calls at ports in countries that have the 20 lowest rank-
ings in Transparency International’s Corruption Perception Index
Number 12 TR-MT-510a.1
Corruption
Total amount of monetary losses as a result of legal proceedings
associated with bribery or corruption
Reporting currency $ 0.00 TR-MT-510a.2
Accident
& Safety
Management
Marine casualties
Incidents Number 0
TR-MT-540a.1
Very serious marine casualties Percentage (%) 0
Conditions of Class
Number of Conditions of Class or Recommendations Number Data not available TR-MT-540a.2
Port State Control
(1) deficiencies
Rate
.82 average deficiencies
per inspection
TR-MT-540a.3
(2) detentions Number 0
230Wallenius Wilhelmsen – Annual Report 2022
Sustainability statements
TCFD Index
Contents →
TCFD Index
Theme Recommendation See section, page:
Governance a. Describe the board’s oversight of climate-related risks and opportunities. Principles of governance (p. 91), Planet (p. 61)
b. Describe management’s role in assessing and managing climate-related risks and oppor-
tunities.
Planet (p. 61)
Strategy a. Describe the climate-related risks and opportunities the organization has identified over
the short, medium, and long term.
Planet (p. 61)
b. Describe the impact of climate-related risks and opportunities on the organization’s busi-
nesses, strategy, and financial planning
Planet (p. 61)
c. Describe the resilience of the organization’s strategy, taking into consideration different
climate-related scenarios, including a 2°C or lower scenario
The organization will be able to make this disclosure
after we start to use scenario analyses in 2022.
Risk
Management
a. Describe the organization’s processes for identifying and assessing climate-related risks. Key risk exposure (p. 42), Planet (p. 61)
b. Describe the organization’s processes for managing climate-related risks. Planet (p. 61)
c. Describe how processes for identifying, assessing, and managing climate-related risks are
integrated into the organization’s overall risk management.
Key risk exposure (p. 42), Planet (p. 61)
Metrics &
targets
a. Disclose the metrics used by the organization to assess climate-related risks and opportu-
nities in line with its strategy and risk management process.
Planet (p. 61)
b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions
and the related risks.
Planet (p. 61) for Scope 1 and Scope 2 emissions.
~2 000 000 tonnes CO2e is estimated following
SBTi’s generic industry guidance.
A comprehensive Scope 3 assessment is underway
c. Describe the targets used by the organization to manage climate-related risks and oppor-
tunities and performance against targets.
Planet (p. 61)
232
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Wallenius Wilhelmsen – Annual Report 2022 232
Responsibility statement
Contents →
Wallenius Wilhelmsen – Annual Report 2022
The responsibility statement includes the board of directors and the CEO’s approval
of the annual report
The board of directors and the CEO approve the annual report for Wallenius Wilhelm-
sen ASA (“the Company”) and the Wallenius Wilhelmsen Group (“the Group”) for
the financial year ending December 31, 2022.
We confirm, to the best of our knowledge, that as of December 31, 2022:
•
The consolidated financial statements have been prepared in accordance
with current applicable accounting standards and they give a true and fair
view of the Company’s and the Group’s assets, liabilities, financial position
and results
•
The consolidated financial statements and the financial statements of
the parent company have been prepared based on the going concern
assumption, and the conditions to make that assumption are present
•
The annual report meets the requirements of the Sustainability Account-
ing Standards Board’s (SASB) Marine Transportation and Road Transpor-
tation as well as the GRI Universal Standards for sustainability reporting
•
The annual report covers the requirements of the Norwegian Transparency
Act regarding reporting on human rights due diligence
•
The annual report meets the requirements of the Norwegian Accounting
Act regarding the content of the report of the board of directors, state-
ments of corporate governance and corporate social responsibility
•
The annual report, including the message from the board, and the chap-
ters on corporate governance and sustainability, gives a true and fair view
of the development, performance and financial position of the Company
and the Group, and includes a description of the key risks and uncertain-
ties facing the Company and the Group
Wallenius Wilhelmsen ASA Annual Report 2022 for signing.pdf
Name Method Signed at
HANS ÅKERVALL BANKID 2023-03-14 19:14 GMT+01
Anna Elsa Felländer BANKID 2023-03-14 17:13 GMT+01
Kristoffersen, Lasse BANKID_MOBILE 2023-03-14 15:27 GMT+01
Åsheim, Yngvil S Eriksson BANKID_MOBILE 2023-03-14 15:24 GMT+01
Kerstin Margareta Alestig Johnson BANKID 2023-03-14 15:23 GMT+01
Bjerke, Rune BANKID 2023-03-14 20:17 GMT+01
Wilhelmsen, Thomas BANKID_MOBILE 2023-03-14 19:58 GMT+01
List of Signatures
Page 1/1
This file is sealed with a digital signature. The seal is a guarantee for the authenticity of the document.
External reference: CEA392299E564AE0B58A9AD60891A644
Wallenius Wilhelmsen ASA Annual Report 2022 for signing.pdf
Name Method Signed at
HANS ÅKERVALL BANKID 2023-03-14 19:14 GMT+01
Anna Elsa Felländer BANKID 2023-03-14 17:13 GMT+01
Kristoffersen, Lasse BANKID_MOBILE 2023-03-14 15:27 GMT+01
Åsheim, Yngvil S Eriksson BANKID_MOBILE 2023-03-14 15:24 GMT+01
Kerstin Margareta Alestig Johnson BANKID 2023-03-14 15:23 GMT+01
Bjerke, Rune BANKID 2023-03-14 20:17 GMT+01
Wilhelmsen, Thomas BANKID_MOBILE 2023-03-14 19:58 GMT+01
List of Signatures
Page 1/1
This file is sealed with a digital signature. The seal is a guarantee for the authenticity of the document.
External reference: CEA392299E564AE0B58A9AD60891A644
Lysaker, March 14, 2023
The board of directors of Wallenius Wilhelmsen ASA
233
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Wallenius Wilhelmsen – Annual Report 2022 233
Responsibility statement
Contents →
Wallenius Wilhelmsen – Annual Report 2022
The below list maps requirements in the Norwegian Accounting Act related to the
board of directors report to the relevant sections in the annual report
Norwegian
Accounting
Act reference Content
Annual report
chapter reference
Page
reference
Section 3-3a,
para. 1
Information regarding the nature and location of the business, including information on any
branch offices
Wallenius Wilhelmsen at a glance
Message from the board
Principles of governance
Group financial statements:
- note 2
- note 12
5-20
25-44
91-108
132-136
155-156
Section 3-3a,
para. 2
Overview of the development and results of operations and position, together with a descrip-
tion of the main risks and uncertainty factors facing the group and including information on
research and development activities.
Words from CEO
Message from the board
Prosperity
21-24
25-44
77-90
Section 3-3a,
para. 5
A description that provides a basis for assessing the enterprise’s future outlook, including
whether the results for the year agree with previously stated expectations and reasons for any
discrepancy.
Message from the board 25-44
Section 3-3a,
para. 6
Information regarding any financial risk that is significant to the evaluation of the compa-
ny’s assets, liabilities, financial position and results. This information shall include goals and
strategies that have been determined for managing the financial risk, including the strategy
for hedging each main type of planned transaction for which a hedging assessment has been
used. An account shall be given of the enterprise’s exposure to market risk, credit risk and
liquidity risk.
Message from the board
Principles of governance
Group financial statements:
- note 17
25-44
91-108
166-176
Section 3-3a,
para. 7,
cfr. Section 4-5
Information regarding the going concern assumption Responsibility statement 231
Section 3-3a,
para. 8
Proposal for the allocation of profit or settlement of loss Message from the board 25-44
Section 3-3a,
para. 9
Information about the work environment, along with an overview of implemented measures
relevant to the working environment including information on injuries, accidents and sick leave
rates.
Message from the board
People
25-44
45-60
Section 3-3a,
para. 10
Information shall be provided about matters relating to the business, hereunder its factor
inputs and products, which may result in a not insignificant impact on the external environ-
ment. The environmental impacts each aspect of the business has or may have, as well as the
measures implemented or planned implemented to prevent or reduce negative environmental
impacts, shall be stated.
Message from the board
Planet
25-44
61-76
Section 3-3a,
para. 11
Information on whether there is insurance cover for the board members’ and CEO’s potential
liabilities towards the company and third parties, including information on the relevant insur-
ance coverage
Principles of governance 91-108
Section 3-3a,
para. 12
cfr. Securities
Trading Act Section
5-8a (1)-(4)
Shareholder information:
- description of any provisions of articles of association that restrict the right to trade in the
shares of the company
- description of who exercises the rights attached to shares in any employee share schemes
where authority is not exercised directly by the employees covered by the scheme
- agreements between shareholders which are known to the company, and which restrict the
possibilities of trading in or exercising voting rights attached to shares
- significant agreements to which the company is a party, the terms of which take effect, alter
or terminate as a result of a takeover bid, and a description of those terms
N/A
Section 3-3b Report on corporate governance Principles of governance 91-108
Section 3-3c,
para. 1
Report on social responsibility Message from the board
People
Planet
Prosperity
25-44
45-60
61-76
77-90
235
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Wallenius Wilhelmsen – Annual Report 2022 235
Auditor’s report
Contents →
Wallenius Wilhelmsen – Annual Report 2022
PricewaterhouseCoopers AS, Dronning Eufemias gate 71, Postboks 748 Sentrum, NO-0106 Oslo
T: 02316, org. no.: 987 009 713 MVA, www.pwc.no
Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
To the General Meeting of Wallenius Wilhelmsen ASA
Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Wallenius Wilhelmsen ASA, which comprise:
• the financial statements of the parent company Wallenius Wilhelmsen ASA (the Company),
which comprise the balance sheet as at 31 December 2022, the income statement, statement
of comprehensive income and statement of cash flows for the year then ended, and notes to
the financial statements, including a summary of significant accounting policies, and
• the consolidated financial statements of Wallenius Wilhelmsen ASA and its subsidiaries (the
Group), which comprise the balance sheet as at 31 December 2022, the income statement,
statement of comprehensive income, statement of changes in equity and statement of cash
flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies.
In our opinion
• the financial statements comply with applicable statutory requirements,
• the financial statements give a true and fair view of the financial position of the Company as at
31 December 2022, and its financial performance and its cash flows for the year then ended in
accordance with simplified application of international accounting standards according to
section 3-9 of the Norwegian Accounting Act, and
• the consolidated financial statements give a true and fair view of the financial position of the
Group as at 31 December 2022, and its financial performance and its cash flows for the year
then ended in accordance with International Financial Reporting Standards as adopted by the
EU.
Our opinion is consistent with our additional report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company and the
Group as required by relevant laws and regulations in Norway and the International Ethics Standards
Board for Accountants’ International Code of Ethics for Professional Accountants (including
International Independence Standards) (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
We have been the auditor of the Company for 13 years from the election by the general meeting of the
shareholders on 12 February 2010 for the accounting year 2010.
236
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Wallenius Wilhelmsen – Annual Report 2022 236
Auditor’s report
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Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Similar to the 2021 audit, we focused on Impairment Assessment of Goodwill as this risk remain
relevant. Since all remaining provisions related to anti-trust investigations were settled during 2022,
we did not focus on this matter to the same extent as we did for the 2021 audit.
Key Audit Matters
How our audit addressed the Key Audit Matter
Impairment Assessment of Goodwill
The net book value of goodwill as at 31
December 2022 is USD 201 million. In line
with IFRS requirements, an impairment test
for goodwill was performed as at 31
December 2022 resulting in an impairment
of U
SD 29 million that was recognized for
the cash
-generating unit Logistics services.
The goodwill impairment assessment
involved significant management judgement
in preparing cash flow forecasts for the
applicable reporting segments and in
assessing the disc
ount rate.
We focused on goodwill due to the
significance of the amount in the balance
sheet and the significant judgment applied
by management in assessing the potential
need for impairment.
We refer to note 1 (Significant accounting
judgements, estimates and assumptions),
note 8 (Goodwill, customer
relations/contracts and other intangible
assets) and note 11 (Impairment on non
-
current assets) for further information on
management’s impairment assessment.
We evaluated and challenged management’s
impairment assessment and the process by which
this was performed. We assessed management’s
accounting policy against relevant IFRSs and
obtained explanations from management as to
how the specific requirements of the standards, in
particular IAS 36 – Impairment of assets, were
met.
The forecast for the future cash flows were based
on a detailed budgeting process. To assess the
reliability of management’s forecast, we held
discussions with management and challenged
them on several of the assumptions applied in the
impairment model, such as the discount rate, the
long-term growth rate and capital expenditure.
Specifically, we used our internal valuation
specialists and external market data to discuss the
assumptions management had used to build the
discount rate. We concluded that the discount rate
used by management was within a reasonable
range.
We reviewed management’s authorized budgets
and forecasts and discussed the impact of climate
related risks to the future cash flows of the Group.
Where possible, we compared these to current
and
historical market data to corroborate the
reasonableness of cash flows used by
management. Our procedures also included
sensitivity analyses to key assumptions applied.
The performed sensitivity analyses indicated some
headroom for all key assumptions for the
segments, except for the CGU Logistics services
where an impairment was recognized.
Through our testing and discussion, we were able
to conclude that the assumptions applied by
237
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Wallenius Wilhelmsen – Annual Report 2022 237
Auditor’s report
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Wallenius Wilhelmsen – Annual Report 2022
3 / 5
management in the impairment assessment were
reasonable.
We also tested the mathematical accuracy of the
impairment model. We found that the model was
calculating net present values as intended.
We considered the appropriateness of the related
disclosures in note 1, 8 and 11 to the consolidated
financial statements to the requirements of the
applicable financial reporting framework, IFRS,
including IAS 36 – Impairment of assets and found
the disclosures to be adequate.
Other Information
The Board of Directors and the Managing Director (management) are responsible for the information
in the Board of Directors’ report and the other information accompanying the financial statements. The
other information comprises information in the annual report, but does not include the financial
statements and our auditor’s report thereon. Our opinion on the financial statements does not cover
the information in the Board of Directors’ report nor the other information accompanying the financial
statements.
In connection with our audit of the financial statements, our responsibility is to read the Board of
Directors’ report and the other information accompanying the financial statements. The purpose is to
consider if there is material inconsistency between the Board of Directors’ report and the other
information accompanying the financial statements and the financial statements or our knowledge
obtained in the audit, or whether the Board of Directors’ report and the other information
accompanying the financial statements otherwise appear to be materially misstated. We are required
to report if there is a material misstatement in the Board of Directors’ report or the other information
accompanying the financial statements. We have nothing to report in this regard.
Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report
• is consistent with the financial statements and
• contains the information required by applicable statutory requirements.
Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate
Governance and Corporate Social Responsibility.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in
accordance with simplified application of international accounting standards according to the
Norwegian Accounting Act section 3-9, and for the preparation and true and fair view of the
consolidated financial statements of the Group in accordance with International Financial Reporting
Standards as adopted by the EU, and for such internal control as management determines is
necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Group or to cease operations, or has no realistic alternative but to do so.
238
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Auditor’s report
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Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
• identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error. We design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's and the Group's internal control.
• evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
• conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company's and the
Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company and the Group to cease to
continue as a going concern.
• evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves a true and fair view.
• obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
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matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
Report on Compliance with Requirement on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of Wallenius Wilhelmsen ASA, we have performed an
assurance engagement to obtain reasonable assurance about whether the financial statements
included in the annual report, with the file name 549300NBN0URT3RA3Y54-2022-12-31-en.zip, have
been prepared, in all material respects, in compliance with the requirements of the Commission
Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation)
and regulation pursuant to Section 5-5 of the Norwegian Securities Trading Act, which includes
requirements related to the preparation of the annual report in XHTML format, and iXBRL tagging of
the consolidated financial statements.
In our opinion, the financial statements, included in the annual report, have been prepared, in all
material respects, in compliance with the ESEF regulation.
Management’s Responsibilities
Management is responsible for the preparation of the annual report in compliance with the ESEF
regulation. This responsibility comprises an adequate process and such internal control as
management determines is necessary.
Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the
ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger
Oslo, 14 March 2023
PricewaterhouseCoopers AS
Bjørn Lund
State Authorised Public Accountant
(This document is signed electronically)