Annual
Report
2021
For as long as there has been history, there has been trade. And for
as long as there has been trade, people have been able to learn,
specialize and develop tools and skillsets that accelerate growth.
From Scandinavia, we pioneered trade over the seas.
For generations, global trade has expanded wealth by lowering the
price of goods, lifting wages and amplifying growth. If trade stops,
the world stops.
At Wallenius Wilhelmsen, we go to work to keep the world in motion.
With the knowledge that our world's resources are limited, we chal-
lenge old rules with fresh ideas. It's part of our responsibility as a
global company, and an opportunity to create a competitive edge.
Previous generations set sail. As a 160-year-old start-up we have gone
from wooden ships to steel ships to partnerships. Based on innovation
and imagination, we continue to explore new ways to create value.
We manage end-to-end deliveries for our clients based on customer-
centric solutions – always with supreme quality at the forefront of
everything we do. 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 are not only in the transportation business. We are also in the
business of providing new sustainable opportunities for growth.
Sustainable logistics
for a world in motion
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 Principles of Governance, People, Planet and
Prosperity. The report complies with statutory requirements in Norwegian legisla-
tion 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 accord-
ing to the requirements from UN Global Compact and has been prepared in accor-
dance with the Global Reporting Initiative (GRI) Standards: Core option 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 shareholders and other stakeholders with
information on our climate-related risks and opportunities.
The reporting boundaries for the sustainability reporting are challenging given the
complexity of our value chain and joint ownership and operational arrangements.
We strive to report consistently and accurately.
•
Unless otherwise stated, Scope 1 GHG emissions includes all owned and
operated vessels and facilities, including ships on long-term and short-
term charter. Exception being the direct emissions from our road transport
service, Keen, which is not included.
•
Scope 2 emissions is only included for owned locations for Logistics.
•
Waste data is reported from owned vessels and facilities under operational
control.
•
Health and safety incident data is reported for our owned vessels, long-
term and bareboat charter, and 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, eective December 31, 2021.
The scope of the reporting is Wallenius Wilhelmsen's global operations for the period
January 1 to December 31, 2021.
Photo – page : © Dan Formsma
Photo – page : © Romello Williams
Wallenius Wilhelmsen – Annual Report 2021
Contents
About the report
Wallenius Wilhelmsen in brief
How our operations deliver cars and larger cargo
from A to Z
How reducing emissions is our priority
How innovation enables our operational eciency
Key figures
Corporate structure
Board of directors
Management
Words from CEO
Message from the Board
Vision and Strategy
in brief
Financial review
Shipping segment
Logistics segment
Government segment
Market development and outlook
Key risk exposures
Events after the balance sheet date
Dividend for
Prospects
Principles of governance
Implementation and reporting on corporate
governance
The business
Equity and dividend
Equal treatment of shareholders
Freely negotiable shares
Nomination committee
Board of Directors – composition and independence
Board responsibility and work
Risk management and internal control
Remuneration of the Board of Directors
Salary and other remuneration for executive
personnel
Information and communication
Takeovers
Auditor
People
Health, safety and wellbeing
Human and labor rights
Diversity, equity and inclusion
Training & Development
Planet
GHG emissions and climate risk
Biodiversity
Air quality
Waste management
Prosperity
Innovation
Quality of service
Sustainable consumption
Sustainable supply chain
Tax practices
Financial statements
Sustainability statements
Sustainability Performance Data
EU Taxonomy reporting
GRI Index
SASB Index
TCFD Index
Responsibility statement
Auditor's report
At Wallenius Wilhelmsen, we go to work to keep the
world in motion. With the knowledge that our world's
resources are limited, we challenge old rules with fresh
ideas. It's part of our responsibility as a global company,
and an opportunity to create a competitive edge.
Wallenius
Wilhelmsen
in brief
Contents →
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen in brief
How our operations deliver cars and larger cargo from A to Z
Contents →
2021 Nissan
North American supply
chain management
partner of the ye
ar
2021 Toyota
Canada Kaizen award
2021 GM
Supplier of the year
Wallenius Wilhelmsen is a global leader in vehicle transportation and
supply chain.
We work with major manufacturers of cars, trucks, heavy equipment
and machinery such as BMW, Caterpillar, Daimler, John Deere, JLR,
Hyundai, Nissan, Toyota and Volkswagen. During 2021, we received
numerous awards from our world-renowned customers.
Over the last years, we are proud to say that we are an enabler of the
green shift by transporting “green” cargo such as electric vehicles,
windmills and components of battery plants.
How our operations deliver cars
and larger cargo from A to Z
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen in brief
How our operations deliver cars and larger cargo from A to Z
Contents →
To deliver supreme quality in the end-to-end supply chain, we provide
a land-based network of logistics services, including eight terminals
and more than 66 services and processing centers around the world.
Our oerings encompass technical services, inland distribution
and terminal handling. We even work inhouse at the OEM plants
to prepare the vehicles for the end user.
At sea, we have more than 130 vessels operating 15 trade routes across
six continents. We carry multiplex cargo because our fleet is charac-
terized by a higher average number of hoistable decks and stronger
ramp capacity.
Wallenius Wilhelmsen is listed on the Norwegian Stock Exchange
(OSE: WAWI), headquartered in Oslo. We have 8,200 employees in 29
countries.
A Toyota being processed in one of our
many services and processing centers ↓
inland distribution networks
moving over 242,000 units
terminals handling more
than 2.8 million units
66
11
8
services and processing
centers, processing more
than 4.6 million vehicles
130+
vessels on 6 continents
transporting more than
3.4 million units on ocean
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen in brief
How our operations deliver cars and larger cargo from A to Z
Contents →
This 237 tonne cargo
proves our high and
heavy capabilities →
The latest addition to our fleet,
the MV Nabucco. It has a 7,000
car capacity and is part of the
HERO series – one of the most
energy ecient vehicle carriers
on the water today ↓
“Toyota Canada is pleased to present the
Wallenius Wilhelmsen solutions team with
a 2021 Kaizen Award – in recognition of quick
action, root cause analysis and eective
countermeasure implemented to resolve
a recent logistics challenge we had.”
Lee Armour
National manager, vehicle logistics,
Toyota Canada
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen in brief
How reducing emissions is our priority
Contents →
Nearly all our carbon emissions come from vessels. Even though ship
-
ping emits much less carbon than air and land-based transporta tion,
it still constitutes three per cent of all CO
2
emissions globally. Keep
in mind: International shipping carries about 90 per cent of all world
trade. These volumes are predicted to increase significantly toward
2050 – because to most, there are no alternatives to seagoing trans-
portation. Shipping exists because of global trade, and there is a
mutual dependency.
To meet the objectives in the Paris Agreement, the industry needs
to transform. We need to drastically reduce our emissions of green
house gases, this is a priority for us – and where our environmental
and economic interests are perfectively aligned.
In 2021 we set a target to reduce our carbon intensity in shipping by
27.5 per cent by 2030, compared to 2019. This builds on our results from
2008 to 2019, a period during which we reduced our carbon intensity
by more than 33.6 per cent.
How reducing emissions
is our priority
2019
33.33
gCO
2
e/t*km
2030
24.16
gCO
2
e/t*km
-27.5%
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen in brief
How reducing emissions is our priority
Contents →
We are a long-term partner with Ocean Exchange. We annually contri-
bute USD 100,000 to their Orcelle award.
In 2021, we were awarded the silver medal rating from EcoVadis which
is the world's largest provider of business sustainability ratings.
Not only does this put Wallenius Wilhelmsen in the top 25 per cent of
over 85,000 companies rated, it proves we make progress in how we
integrate sustainability into our core business processes.
Our most important contribution to the green shift is reducing the
energy consumption and emissions of our ships. Many variables are
at play, including hull & machinery condition, wind, waves, ocean
currents and cargo weight. We have digital access to data predicting
speed, engine power and fuel consumption. Going forward, we will
equip all our vessels with automated decision support and engine
control equipment to assist the crew in achieving the lowest possible
fuel consumption.
To contribute to the Paris Agreement, we need to collaborate with
customers, researchers and other partners to mobilize the needed
technology and infrastructure.
Digital access to data predicting speed
is an important tool to reduce emissions ↓
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen in brief
How innovation enables our operational eciency
Contents →
How innovation enables our
operational eciency
Real value comes from truly connecting and optimizing operations
across our supply and value chains. Innovation is our key dierentiator!
The role of data in making supply chains resilient drives Wallenius
Wilhelmsen's expanding digital capabilities.
The use of Hololens to deliver
remote technical support,
training, inspection & audit
capabilities has been a key
innovation supporting business
continuity through the pandemic.
“For me, digitalization
and sustainability are two
sides of the same coin.”
Simon White
Chief Digital Ocer at Wallenius Wilhelmsen
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen in brief
How innovation enables our operational eciency
Contents →
We developed a new solution called “One Solution.” It is a visibility
platform that gives our customers full visibility into the movement of
their cargo.
We launched an AI-powered computer-vision product. We can now
conduct mobile inspection anywhere, anytime. It reduces manual
inspection time by 70 per cent – and makes human error a thing of
the past.
We launched TallyScan. It is a new mobile scanning app that not only
captures loading and discharging of cargo from vessels, it also updates
exact measurements, stus and strips equipment.
We launched vChek. It is a mobile quality checking app, powered by
machine learning, that ensures a task has been properly completed,
and saving time and costs.
We pilot wearable devices that monitor and give alerts when unusual
or unexpected movements that can cause injuries happen. This is
based on Internet of Things (IoT), data collected are used to adjust
training and operational processes.
↑ TallyScan, a new
mobile scanning app
vChek, a new mobile
quality checking app ↓
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen in brief
Key figures
Contents →
Key figures
Key figures consolidated accounts
USD million unless otherwise stated
Restated*
Income statement
Total income , , , , ,
Operating profit before depreciation,
amortization and impairment (EBITDA)
Operating profit (EBIT) ()
Profit before tax ()
Profit for the period ()
Balance sheet
Non-current assets , , , , ,
Current assets , , , , ,
Total assets , , , , ,
Equity – parent , , , , ,
Equity – NCI
Interest-bearing debt , , , , ,
Key financial figures
Net cash flow provided by operating activities
Liquid funds at December
Current ratio
. . . . .
Equity ratio
% % % % %
Yield
Return on capital employed .% (.%) .% .% -
Key figures per share
Basic and diluted earnings per share . (.) . . .
EBITDA per share . . . . .
Average number of shares outstanding (thousand) , , , , ,
Market price at year end (NOK) . . . . .
Market price high (NOK) . . . . .
Market price low (NOK) . . . . .
Dividend paid per share (USD) - - . - -
* For 2017, earnings per share is calculated based on 220,000,000 shares for
Q1 and 423,104,938 shares for the remaining part of 2017.
Current assets divided by current liabilities
Equity in per cent of total assets
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen in brief
Corporate structure
Contents →
Corporate structure
100% 100% 100%
100%
100%
80%
Wallenius Wilhelmsen ASA
Wallenius Wilhelmsen
International Holding AS
ARC Group
Holding AS
NOR
NOR
Wallenius Wilhelmsen
Ocean Holding AS
Wallenius Wilhelmsen
Ocean AS
100%
Wall RO/RO AB
100%
NOR
Wallenius Wilhelmsen
Solutions Holding AS
NORNOR
SWE
100%
WWL Shipowning
Singapore Pte Ltd
SGP
Subsidiaries
100%
Wilhelmsens Lines
Shipowning Malta Ltd
SWE
Wilhelmsen Lines
Malta Ltd
NOR
EUKOR Group ARC Group
Subsidiaries
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen in brief
Board of directors
Contents →
Board of directors
Rune Bjerke
Chair of the board
Distinguished 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 Norsk Hydro, Schibsted
and Fremtind
Degree in economics, University of Oslo,
a master's degree in public administra-
tion, Harvard University
Margareta Alestig
Board member
Extensive experience from the finan-
cial, shipping and logistics industries.
Previously: CFO at Broström AB, CFO at
JCE Group, deputy managing director at
Swisslog AB and Sjätte AP-fonden (AP6)
Chair of the board in Erik Thun AB, board
member in Inission AB and Metria AB.
Chair of the Audit Committee in Metria AB
MBA degree, University of Örebro, Sweden
Anna Felländer
Board member
One of Sweden's leading experts on the
eects of digitalization on the economy,
society and businesses. Founder and
presi dent anch.AI
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 Economics
Jonas Kleberg
Board member
Group CEO at Rederi AB Soya and
several years in various positions in the
Soya Group companies in commercial,
financial and sustainability areas
Chairman of all the Soya Group compa-
nies, on the boards of many external
companies. Born and raised in the
Wallenius family business
Degrees in economics, agriculture,
environment and a strong focus on
sustainability
Marianne Lie
Board member
Several years of experience from the
Norwegian business industry, director
general of the Norwegian Shipowners'
Association (2002-2008), runs her own
advisory business, founder and head of
secretariat at Forum for Miljøteknologi
(FFM – Forum for Environmental Tech-
nology)
On the boards of Noreco asa, Scana Asa,
R8 Property as and GNP Energy as
Degree in law and political science,
University of Oslo
Thomas Wilhelmsen
Board member
Group CEO at Wilh. Wilhelmsen Holding
ASA since 2010. Has held numerous
positions in the group before taking
on the helm, including group vice
president for shipping and regional
director for Europe in Ships Service.
He 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
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen in brief
Management
Contents →
Management
Torbjørn Wist
Acting Chief Executive Ocer (CEO)
& Chief Financial Ocer (CFO)
Previously: EVP & CFO in Scandinavian
Airlines System (SAS). Prior to joining SAS
he held several managerial positions
within the telecommunications and
financial services industries interna-
tionally, having worked for Telenor
ASA, Greenhill & Co., Merrill Lynch and
Salomon Brothers
Degree in business administration from
the Ivey Business School at the University
of Western Ontario, Canada
Erik Noeklebye
EVP & COO Shipping Services
Previously: CEO of EUKOR Car Carriers,
Vice President Head of Region North
America for EUKOR. President Head of
Region EMEA at Wallenius Wilhelmsen
and 18 years with Wilhelmsen Lines and
Wallenius Wilhelmsen
Degree in economics and business
administration, Norwegian School of
Management
Michael (Mike) Hynekamp
EVP & 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
Simon White
Chief Digital Ocer (CDO) & acting
Chief Human Resources Ocer (CHRO)
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 Logis-
tics in 2014 where he was SVP Trade &
Operations and Chief Commercial Ocer
for Wallenius Wilhelmsen Ocean before
moving to his current role in 2019.
Degree in business administration,
University of Technology Sydney
“Our ability to deliver cargo from A to Z comes from the investments
and know-how we have built over decades to become a one-stop
shop for services both on land and at sea. We remain the market-
leading global RoRo operator, we have terminals and processing
centers in key locations, and we have an unrivaled land-based
logistics and production network. Moving forward, these operations
in combination with digitalization and sustainability are key enablers
to our continued success.”
Torbjørn Wist – CFO and Acting CEO
Words from CEO
Contents →
Wallenius Wilhelmsen – Annual Report 2021
Words from CEO
Contents →
An extraordinary year and a solid foundation
Another extraordinary year has passed, a year in which we have delivered extraordi-
nary results. This is thanks to the trust from our long-term customers, the investors
who believe in us, and the dedication and eorts of our 8,200 employees worldwide.
This forms a solid platform for continued growth.
2021 has been challenging in many ways. Surging volumes, port congestions,
labor shortages and pandemic restrictions have been some of the issues we
have dealt with, and which will continue into 2022. The microchip shortages have
also caused supply-side issues, but at the end of 2021 we have seen some signs
that this situation will slowly ease.
Our competitive advantage is based on the investments and know-how we have
built over decades to become a one-stop shop for services both on land and at sea.
We continued our growth throughout 2021, with special emphasis on digitalization
and sustainability improvements. We deliver a unique combination of assets and
technology that optimizes the performance and eciency of services delivered to
our customers.
High demand gives strong results
We see strong results in a market where demand has returned and even surpassed
pre-pandemic levels. This has put a strain on global supply chains. Trade remained
overloaded throughout 2021, with particularly strong demand out of Asia. Europe
saw a more muted volume development.
Our segments cannot be viewed in isolation. Our ability to deliver high quality end-to-
end services is dependent on our full service oering on land and at sea. The shipping
segment experienced strong growth in volumes, revenues and margins. This was
driven by high demand, a positive trade mix and a solid cargo mix. Our flexibility and
capability to transport non-standard cargo at high market rates lifted profitability.
Several major original equipment manufacturer (OEM) contracts were renewed at
favorable long-term rates. The logistics segment was negatively impacted by lower
auto volumes due to current microchip shortages. The government segment saw
a drop in volumes caused by lower U.S. flag cargo activity.
During 2021, we strengthened our financial position significantly trough our results
and a build-up of liquidity, allowing for a prepayment of deferred debt and a return
to payment of dividends.
Resilient and diligent colleagues
Our people are key to delivering high quality services and driving value creation.
The safety and security of everyone is always at the top of the agenda at Wallenius
Wilhelmsen, but even more so through this challenging year. During 2021, the loss
of two people working for us was a stark reminder that our business is not without
risk, and that we must constantly train and update our organization on health and
safety measures. Our deepest sympathy goes to their families and friends.
About two thirds of our 8,200+ employees work in our logistics segment. They have
faced severe challenges due to the pandemic. In 2021, we took several actions to
raise the level of safety, care and concern for our employees. This included partner-
ships with local health care providers, flexible work schedules and mental health
campaigns. On-demand tutors provide an academic resource for kids. This initia-
tive came in response to our employee survey results raising the need to access
aordable and quality back-up for family care.
Wallenius Wilhelmsen – Annual Report 2021
Words from CEO
Contents →
The pandemic has also been challenging for our oce workers. Working from home
has for many been emotionally draining, with the line between work and private life
becoming increasingly blurred. We know and appreciate that energy that arises
from working side by side cannot be easily replicated in digital meetings. Being
a global company, we run digital meetings in a normal situation, but teamwork,
inspiration, idea-generation and knowledge-sharing takes more easily place in
the oce, around the coee machine or during lunch. We have run local initiatives
to support our oce workers. HR has monitored the situation continuously and
assisted individuals and teams as required.
Travels have been rare during 2021, but I was fortunate to meet the crews onboard
Tijuca and Nabucco in Gothenburg in the latter part of the year. Their positive attitude
despite the challenges they have faced is impressive! Remember that many of our
seafarers have been prevented from leaving vessels for long durations because
of Covid-19 restrictions. Others have been stuck at home because we were unable
to change crews according to plans. Our people, together with our ship manage-
ment partners, have done a fantastic job at minimizing extra o-shore time through
additional port-calls and tailored crew-change plans.
Focused employee eorts
We have had extra focus on the seafarers' health. Close cooperation with peers and
trade organizations such as the Norwegian Shipowners' Association and IMO have
been important to influence authorities to limit time on board and maximize the
opportunities for changeovers. Vessels have been furnished with oxygen meters
and antigen tests as well as virtual access to advice and support from physicians.
In addition, we established our own vaccination program. At the end of 2021,
more than 80 per cent of our seafarers were vaccinated, compared to the industry
average of 30 per cent.
During the pandemic, we have managed to implement a new organization with
successful results. One of the biggest changes was the establishment of the
customer growth team, serving both the logistics and shipping segments. This
change allows for coordinated sales of land and ocean services, ensuring a tighter
integration of our business, and putting our customers at the center of our eorts.
Thanks to the extraordinary eorts of our employees, we have been able to not only
preserve, but also develop our operations. I want to express my deepest gratitude
to those who have kept the wheels of trade in motion. The return journey back to
normalization will take time, but we are well positioned.
Planes, trains and automobiles
Our strategy is to take a leading role in end-to-end logistics on land and at sea –
not only for cars, but also windmills, trucks, trains and even planes. The multi-year
contract we signed with aircraft manufacturer Airbus for the transportation of A220
aircraft components between China and Canada is a testament to this. This contract
includes the complete move over land and across the ocean from the production
plant in Shenyang, China, all the way to the assembly plant in Mirabel, Canada.
Airbus has full digital visibility of their cargo throughout the journey allowing them
to better plan their operations.
Our ability to deliver cargo from A to Z is based on investments made over decades.
We remain the market-leading global RoRo operator, we have terminals in key
locations, and we have an unrivaled land-based logistics and production network.
We believe that moving forward digitalization and sustainability will be key drivers
to deliver excellent customer experience.
Wallenius Wilhelmsen – Annual Report 2021
Words from CEO
Contents →
Another exciting milestone was our investment into the solutions company DeGould.
Their technology automates the vehicle inspection process with high resolution
images combined with AI algorithms delivering complete vehicle condition reporting.
This solution allows for a more ecient and flawless inspection process across the
entire vehicle lifecycle, reducing the cost of claims.
Towards a more sustainable future
Shipping exists because of global trade, and there is a mutual dependency. Global
shipping carries about 90 per cent of world trade. Market estimates point to a
continued volume increase in world trade towards 2050, and shipping remains
the only option for most of our clients. Although shipping has a much lower carbon
intensity per tonne-kilometer transported than air and land transportation, our
environmental impact remains significant. The industry accounts for some three
per cent of global emissions, and we and other industry players must do what we can
to reduce our environmental footprint. Our unique end-to-end supply chain being a
one-shop-stop contributes towards more optimal and sustainable operations.
As with other industries, shipping and logistics have a moral obligation to contri-
bute to reaching the temperature goal set in the Paris Agreement. Consequently,
Wallenius Wilhelmsen has adopted a carbon intensity reduction target of 27.5 per
cent from 2019 to 2030. As evidence of our eorts, our EcoVadis score improved
sharply this past year, and we have launched our Sustainability Linked Financing
Framework setting out details of how we will achieve our target.
In 2021, we became a member of the UN Global Compact. Our progress is reported
according to these principles. We have developed our own sustainable procurement
policy and supplier code of conduct to identify and manage sustainability risks
amongst our suppliers. Recommendations from the task force on climate-related
financial disclosure (TCFD) have been implemented. We have set up an emissions
and energy management team to closely follow-up on the goal of minimizing our
carbon footprint.
The respect for human and labor rights is embedded in our code of conduct. We
aspire to be a workplace where everybody feels safe and well, where we bring out
our best version of ourselves and learn from each other. In order to ensure we
have an organization that is best positioned to solve challenges and capitalize
on opportunities in the future, we need to continue to strengthen and build on
diversity, equity and inclusion initiatives across our organization.
Welcome to our new CEO
On a personal note, it has been a privilege to serve as acting CEO during the past year.
I am grateful for the excellent teamwork with board, management and employees.
Our collective achievements in 2021 make me very proud.
I want to congratulate Lasse Kristoersen on being appointed new CEO of Wallenius
Wilhelmsen, and look forward to welcoming him onboard. He joins an impressive
company with a solid foundation for future success in an exciting, evolving market.
Torbjørn Wist
CFO & Acting CEO
Message from the Board
Wallenius Wilhelmsen's long-term group strategy focuses on
sustainable value creation. It is based on a tighter partnership with
our customers establishing new services and revenue streams as
well as constantly improving operational excellence.
The business model has over time yielded resilient-free cash flow.
In combination with the current solid market fundamentals, we are
well positioned to enjoy the high economic activity and return to our
policy of paying dividends to our shareholders.
We believe that continued and future success will only be ensured by
fully integrating sustainability and innovation into the business model.
Contents →
Wallenius Wilhelmsen – Annual Report 2021
Message from the Board
Vision and Strategy
Contents →
Vision and Strategy
Under the vision of Sustainable logistics for a world in motion, our strategy is to be
a leading provider of integrated logistics services, powered by sustainability and
digitalization.
Our Position
Wallenius Wilhelmsen is a shipping and logistics provider delivering premium
end-to-end supply chain management services. We connect and realize sustain-
able world trade from the end of the production line to delivery to ports, transport
across oceans, services performed at our processing centers and delivery to dealers
and end customers. We transport cars, tractors, trains, airplane parts, windmills
and even components to entire factories.
We succeed when the world economy prospers, people have safe and secure jobs,
and our environment is protected. To ensure long-term viability and prosperity for
our company and our industry, we build innovative and sustainable solutions that
create value for everyone in our value chain, from our customers and partners to
our employees and society at large. This must take place while simultaneously
reducing our carbon footprint in accordance with the Paris Agreement.
We have a longstanding commitment and proactive approach to sustainability and
continue to step up our ambitions and eorts. 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 eciency, reduce waste along the way and ensure a
holistic customer experience.
Our flexible vessels with strong ramps and hoistable decks make us an attrac-
tive logistics partner, especially for high & heavy and breakbulk cargo. Wallenius
Wilhelmsen is ideally positioned to deliver cargo with services from A to Z.
Safety is a prime focus
also when loading and
unloaded cargo
Wallenius Wilhelmsen – Annual Report 2021
Message from the Board
Vision and Strategy
Contents →
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-o (RoRo) cargo. We are
the market leader with about 20 per cent of total global fleet capacity.
Our main customers are global car manufacturers as well as manufacturers of
high & heavy equipment for construction, agriculture and mining. We are dierent
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 contributes towards
higher margins. Our services on land mainly cater to the same customer groups
as our shipping services segment. Customers on land require sophisticated logis-
tics services on a global scale. These include vehicle processing centers, equip-
ment processing centers, inland distribution networks and global supply chain
management services.
We operate eight strategically placed RoRo terminals, 39 vehicle processing centers
and 27 equipment processing centers around the world. The two segments, ship-
ping and logistics, have a clear link, as about half our shipping volume goes through
our terminals.
Our third segment, government services, provides ocean transport of roll-on/roll-o
(RoRo) cargo and breakbulk on U.S. flag vessels as well as related logistics services
on land. The primary customer is the U.S. government. We provide sealift capacity,
and we transport commercial cargo requiring U.S. flag as required by world events
and government objectives.
We take pride in how our holistic global customer service teams ensure eciency
and coordination of our services.
Our business model has over time yielded resilient free cash flow. In combination
with the current solid market fundamentals, we are well positioned to enjoy the high
economic activity and return to our policy of paying dividends to our shareholders.
We believe that continued and future success will only be ensured by fully integrat-
ing sustainability and innovation into our business model.
Our services include making
final adjustments to vehicles
before the ocean voyage
Wallenius Wilhelmsen – Annual Report 2021
Message from the Board
Vision and Strategy
Contents →
Long-term group strategy
Our long-term group strategy focuses on sustainable value creation. It is based on
a tighter partnership with our customers establishing new services and revenue
streams as well as constantly improving operational excellence.
Through our four strategic pathways, we execute several cross-functional initia-
tives to drive innovation, reduce emissions and generate new revenue streams:
. E2E supply chain orchestration by providing a fully digital, transparent,
predictable, and dynamic value chain solution giving our customers
visibility and predictability.
In a digital data driven era, transparency is even more important for both
stakeholder and client trust.
. Drive operational eectiveness by applying technology to digitalize and
automate our core operations. We do this by harnessing data, reinventing
processes, and introducing adaptive decision-making and collaborative
execution across the group.
. Expand to full lifecycle services by using our experience, assets, core
capabilities and customer relationship to create new services for fleet
providers building on the trend of vehicle usership and car as a service.
. Lead the journey to zero emissions by delivering sustainable service
oerings and optimizing core operations to reduce our carbon footprint.
End to end supply
chain management
Drive operational
eectiveness
Full lifecycle
services
Lead the journey
to zero emissions
Impacts
Give customer visibility
and predictability
Digitalize and automate
core operations
Create new services
targeting the entire
lifecycle of vehicles
Reduce carbon footprint
Response
•
Digital platform with
visibility, transportation
management and track
and trace
•
Best in class end to end
supply chain management
services
•
Use data
•
Reinvent processes
•
Use new technology
•
Cross functional
collaboration
•
New services for fleet
providers
•
New and existing
customers
•
Deliver sustainable
service oerings
Value creation
•
Digitalization
•
Revenue protection /
revenue growth
•
Reduce waste in supply
chain to support
sustainability
•
Digitalization
•
Cost reduction
•
Sustainability with
reduced emissions
•
Revenue growth
•
Sustainability with
focus on C
2
emission
reduction
Wallenius Wilhelmsen – Annual Report 2021
Message from the Board
2021 in brief
Contents →
2021 in brief
In a market where demand returned to pre-pandemic levels, Wallenius Wilhelmsen
delivered very strong results in 2021 despite strained global supply chains. Driven
by high demand, cargo mix and high spot rates, the shipping segment saw posi-
tive development in volumes, revenues and margins. Trade remained imbalanced
throughout the year, with particularly strong demand out of Asia and a more muted
volume development out of Europe.
Our flexibility and capability to transport non-standard cargo for our customers at
high market rates were utilized eectively to drive profitability. The last two quarters
of 2021 saw record post-merger EBITDA levels for Wallenius Wilhelmsen, primarily
driven by shipping. The logistics segment also saw improvements in revenues and
EBITDA from the previous year.
The full utilization of our sailing fleet was a key success factor in 2021. All 16 vessels
placed in cold lay-up at the height of the pandemic in 2020 were reactivated by the
end of 2021. Further, our newest vessel, the HERO class Nabucco, was delivered in Q4.
Our financial position strengthened further in 2021 with a solid operational cash
flow and two successful bond issues in August and November, totaling NOK 2bn.
In 2020, the group entered into temporary agreements with the support of its
bank group to waive certain covenants and to defer USD 70m of installments. At
the end of 2021, we commenced the prepayment of remaining deferred debt to be
completed within the first quarter of 2022. This paves the way for a return to a divi-
dend paying position.
The favorable market conditions and the company's strong financial performance
drove a steady increase in the share price throughout 2021. The share price closed
at NOK 50.6 at the end of the year, up 118 per cent from NOK 23.2 at the end of 2020.
In November, Wallenius Wilhelmsen was pleased to announce the appointment of
Lasse Kristoersen as new CEO of the company. He will join no later than June 1, 2022.
Wallenius Wilhelmsen – Annual Report 2021
Message from the Board
Financial review
Contents →
Financial review
Consolidated financial results
Total revenue was USD 3,884m for financial year (FY) 2021, an increase of 31 per cent
compared to FY 2020, with higher revenues for both the shipping and the logistics
segments. Shipping revenues were up 41 per cent year-over-year (YoY), from USD
2,145m in FY 2020 to USD 3,029m in FY 2021. This was driven by 25 per cent growth
in volumes, a solid increase in net rates and fuel surcharges. The strong volume
growth was due to normalization of the market in FY 2021, as FY 2020 was heav-
ily impacted by the pandemic. Logistics revenues were up 12 per cent, from USD
704m to 789m, as volumes increased and we saw fewer shutdowns. The root cause
of production disruptions shifted from Covid-19 to semiconductor chip shortages
and labor issues. Government revenue fell 4 per cent from USD 247m in FY 2020 to
USD 236m in FY 2021 mainly due to lower U.S. flag cargo activity.
EBITDA ended at USD 830m for FY 2021, up 75 per cent from USD 473m for FY 2020.
Adjusted EBITDA ended at USD 865m, up 61 per cent compared to FY 2020. Shipping
saw a significant increase in activity and a full reactivation of the operating fleet,
driving significant revenue and margin growth, with adjusted EBITDA up 75 per cent
from FY 2020. For logistics, adjusted EBITDA increased 39 per cent, a direct result
of higher activity and revenue growth. Government saw an EBITDA drop of 26 per
cent, due to lower revenues and increased fuel cost. 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 483m in FY 2021 versus USD 451m in
FY 2020. This was partly due to an increase in leased assets. In addition, one vessel
was reclassified from held-for-sale and one newbuilding was delivered in FY 2021.
In FY 2021, Wallenius Wilhelmsen recognized a net impairment loss of USD 62m.
USD 76m is a charge to goodwill allocated to shipping services, and USD 14m a
reversal of impairment related to a vessel 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 valu-
ation of the net derivative are recognized in the income statement. During FY 2021
there was an increase in the value of the put-call derivative for EUKOR of USD 21m,
recognized under the line Other gain/(loss) in the income statement. The impact
in FY 2020 was a loss of USD 16m.
Net financial expenses were USD 108m versus USD 223m in FY 2020. The group
registered a USD 19m financial income relating to a one-o distribution from Den
Norske Krigsforsikring for Skib (DNK), resulting in USD 27m in financial income vs
USD 8m in FY 2020. Interest expense including realized interest derivatives was
USD 165m, down USD 1m versus FY 2020. Currency loss including realized currency
derivatives was USD 12m, similar to FY 2020, while realized bunker derivatives led
to a gain of USD 10m versus a loss of USD 13m in FY 2020. Net financial income
further improved by USD 41m in unrealized derivative gains, mainly driven by USD
58m in positive interest rate derivative movements. In FY 2020, unrealized deriva-
tive losses were USD 31m.
The group recorded a tax expense of USD 23m versus a tax income of USD 4m in FY
2020. USD 2m of the increase is related to withholding tax on the DNK equity distri-
bution and USD 4m is a change in deferred tax. The group continues the non-rec-
Wallenius Wilhelmsen – Annual Report 2021
Message from the Board
Financial review
Contents →
ognition 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 income for FY 2021 was USD 177m, up from a net loss of USD 302m in FY 2020.
Financial position and capital structure
Wallenius Wilhelmsen had an equity ratio of 36.0 per cent at the end of FY 2021, up
from 34.3 per cent at the end of 2020. The liquidity position is solid, with cash and
cash equivalents of USD 710m and USD 349m in undrawn credit facilities. At the end
of FY 2021, the group had total interest-bearing debt and net debt of USD 4,128m
and USD 3,418m, respectively. Outstanding bonds were about USD 587m with the
remainder consisting of bank loans and leasing commitments.
Since 2020, Wallenius Wilhelmsen has had a deferral agreement including a divi-
dend block in place with certain banks. At year end, the group had USD 50m of
deferred amounts remaining. Prepayment has been initiated and will be concluded
during Q1-22.
The group complied with all loan covenants at year-end 2021.
Several financing arrangements were concluded during FY 2021. In August, Walle-
nius Wilhelmsen ASA completed a new senior unsecured bond issue of NOK 1.5
billion (USD 166m). Proceeds from the bond issue were used for partial repurchase
and net proceeds amounted to USD 41m. In November, Wallenius Wilhelmsen ASA
completed a tap issue of NOK 500m (USD 57m) on the August bond issue. In the
fourth quarter, the final newbuilding Nabucco was delivered and financed with a
loan drawdown of USD 50m. Four vessels were refinanced with bank debt during
the year for a total amount of USD 99m.
Cash flow
The group generated USD 56m of positive net cash flow from operations, investing
and financing activities in 2021.
The net cash flow from operations amounted to USD 623m, up from USD 615m in 2020,
as strong EBITDA development more than oset the increase in working capital.
Net cash flow used in investing activities was USD 140m. The most significant invest-
ing activities were the USD 42m for the new vessel Nabucco, USD 15m for scrubber
installations and regular dry dockings of approximately USD 63m.
Net cash flow from financing activities was negative USD 427m. The main items
were net proceeds from issue of debt of USD 474m, repayment of debt of USD 531m,
repayment of lease liabilities of USD 204m, interest and interest derivative payments
of USD 165m and realized derivatives of USD 7m.
Going concern assumption
Pursuant to section 3–3a, cf. section 4–5 of the Norwegian Accounting Act, it is
confirmed that the consolidated financial statements and the financial statements
of the parent company have been prepared based on the going concern assump-
tion, and the board confirms that conditions to make that assumption are present.
Wallenius Wilhelmsen – Annual Report 2021
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, while taking a leading position in the journey to zero emis-
sions by digitalizing the supply chain and driving technological innovation and
operational eectiveness.
Summary of 2021
2021 was a solid year for the shipping segment and the market recovered from
the Covid-19 pandemic. Total revenue was USD 3,029m for FY 2021, up 41 per cent
compared with FY 2020. This was due to 25 per cent higher volumes YoY, higher
net freight per cubic square meter (CBM) due to strong outbound volumes out of
Asia and trade mix, and an increase in fuel surcharges due to continued increase
in fuel prices. Charter out activity remained stable YoY. Throughout the year, our
fleet was better utilized with increased cargo volumes, hence CO
2
emissions per
unit showed a positive development.
Market growth in light vehicle (LV) deep-sea volumes increased by 10 per cent to
13.8 million units in FY 2021, compared to 12.5 million units in FY 2020. Wallenius
Wilhelmsen's volumes increased more positively than the general global deep-sea
volumes for autos as we were present in more favorable trades and because we
had customers performing better than the market.
The eect of the component shortages and supply chain disruption impacted the
shipping segment in FY 2021. These remained challenging factors throughout the
year. However, in Q4 the situation improved somewhat and volumes increased 5
per cent quarter-over-quarter (QoQ).
Due to the recovery of the Covid-19 pandemic, volumes increased for almost all trade
lanes in FY 2021. FY 2020 was a year heavily impacted by the Covid-19 pandemic,
and we saw that in FY 2021, carried volumes were almost on par with 2019 carried
volumes. Growth in exports out of Asia was the main driver for the positive volume
increase in FY 2021, although a volume increase was seen in almost all trade lanes.
Volume development through FY 2021 has followed the general cyclicality in the
market historically, with stronger quarters in Q2 and Q4, due to end-of-year sales
targets and holiday eects impacting the quarters dierently. Volumes in the first
half versus the second half in 2021 were consequently relatively flat.
Cargo mix remained relatively stable as the high & heavy and breakbulk share went
from 30 per cent in FY 2020 to 31 per cent in FY 2021. Both cargo segments saw a
strong overall volume increase in FY 2021 resulting in a stable development in the
cargo mix. Compared to pre-pandemic levels, the cargo mix improved significantly
due to the strong rebound in high & heavy volumes relative to auto volumes.
Adjusted EBITDA for the shipping segment ended at USD 737m in FY 2021, up USD
318m (76 per cent) compared to FY 2020. Positive development in volumes and
gross rates including the fuel adjustment factor explains the 41 per cent revenue
growth compared to FY 2020. Cargo and voyage-related expenses increased as
volumes went up in FY 2021, mostly due to increased load and discharging opera-
tions, but also because of port and canal expenses. Fuel expenses were up 55 per
cent to USD 701m compared to FY 2020, partially as a result of a significant increase
in operations and activity, but mainly due to increased fuel prices in FY 2021. We
saw a gradual and constant increase in the prices of various fuel grades. Charter
expenses were up 32 per cent to USD 173m compared to FY 2020. This was caused
Wallenius Wilhelmsen – Annual Report 2021
Message from the Board
Shipping segment
Contents →
by higher charter-in activity due to increased need for tonnage and capacity in FY
2021, as well as significant growth in charter rates in the market due to increased
demand for adding capacity from the operators. Vessel operating expenses were
up 18 per cent to USD 219m compared to FY 2020, on crew, insurance, mainte-
nance, and repair due to delivery of newbuildings and reactivation of vessels from
lay-up. SG&A expenses remained stable compared to FY 2020, with a 2 per cent
increase to USD 133m. Loss on assets increased in FY 2021 due to a vessel sale
from the shipping segment to the government segment, resulting in a USD 32m
loss in FY 2021. This loss impacts EBITDA in the shipping segment but has zero
eect on group consolidated level and was part of an ordinary renewal of the ARC
fleet. Goodwill deriving from the 2017 merger was impaired by USD 76m in FY 2021,
based on updated long-term forecasts including expected required investments
such as replacement of capacity in coming years.
The fleet
At year-end 2021, the Wallenius Wilhelmsen group operated a core fleet of 125
vessels, excluding short-term time charters, with carrying capacity of about 860k
car equivalent units (CEU) accounting for about 20 per cent of the global car carrier
fleet. The group owned 83 vessels, had 42 vessels on long-term charter contracts
and six vessels were on net short-term time charters (contracts up to one year) as
of year-end 2021. The charter market showed a significant increase in charter rates
through FY 2021 and ended at an all-time high. The market has not experienced
these charter rate levels since 2008.
Nabucco
In Q4 2021, the group took delivery of the last
newbuild in the HERO series, the Post-Panamax
vessel Nabucco. The vessel is one of the largest and
most environmentally friendly in the world, with a
capacity of 8,000 CEU. One vessel in the government
segment was recycled in Q1 2021, one vessel was
sold from the shipping segment to the government
segment during Q4 2021. During the last quarter
of 2021, we also finished the scrubber installation
program which stands at 24 vessels. At the end
of 2020, 16 vessels were in cold lay-up. Due to the
rebound of volumes and increased activity levels in
FY 2021, the group reactivated the last vessel from
layup in Q4 2021 and there are no vessels in layup
at the end of 2021.
Wallenius Wilhelmsen – Annual Report 2021
Message from the Board
Logistics segment
Contents →
Logistics segment
Logistics services mainly serve the same customer groups as shipping services.
Customers operating globally are oered sophisticated logistics services includ-
ing vehicle processing centers, equipment processing centers, inland distribution
networks and terminals.
Summary of 2021
The logistics segment faced several supply-chain challenges in FY 2021, but also
saw improvements in revenues and profitability compared to the previous year. Total
logistics segment revenue for FY 2021 was 789m, up 12 per cent from USD 704m, as
volumes increased from FY 2020 which was severely impacted by the pandemic.
Adjusted EBITDA was USD 108m, up USD 30m (38 per cent) compared to FY 2020.
In addition to the continuing impact of Covid-19, FY 2021 also encountered further
disruptions to the semiconductor supply chain. While the semiconductor shortage
hit a wide range of markets like consumer electronics, the auto segment consumes
10 per cent of the global product, as cars have increased their dependability on
chip-intensive features like automatic cruise control, window wipers, lights etc.
EV units require about 1,400 chips per car. As a result of the global semiconductor
shortage, logistics encountered sporadic interruption to the business with unex-
pected production shutdowns and reductions in work orders. In addition, it was
challenging to manage labor to support unpredictable schedules as well as hire
and train new labor during the pandemic.
As global inflation went up, labor and material cost increased significantly. To oset
the increased cost, logistics collaborated with customers to ensure increased rates
on new contracts.
Diversification was key to our improved profitability in FY 2021. As the technical
services business suered from lower volumes due to the semiconductor short-
age, our terminals handled volumes above pre-pandemic levels, thus lifting our
overall revenue and EBITDA levels.
Solutions Americas (Auto) EBITDA for the full year ended at USD 32m, an 18.5 per
cent increase from FY 2020. VSA, a part of Solutions Americas (Auto), saw volumes
decrease 8 per cent YoY due to the chip shortage. However, margins improved with
fewer Covid-19 restrictions and other operational eciencies. Syngin, part of Solu-
tions Americas (Auto), showed a decrease in volume of –8 per cent YoY due to the
chip shortage, which has impacted the used car market, while FY 2020 volumes
were less impacted by the pandemic.
Solutions Americas (High & Heavy) sub-segment volume increased slightly by 1 per
cent YoY, EBITDA for FY 2021 was USD 14m compared to USD 11m in FY 2020. This
was mainly due to adjustment of customer rates for the brokerage service.
Solutions APAC/EMEA had a 4 per cent decrease in volumes YoY but showed posi-
tive EBITDA of USD 18m compared to USD 9m YoY due to fewer Covid-19 related inef-
ficiencies and an increase in value added services.
Terminal volumes increased 8 per cent YoY resulting in EBITDA of USD 53m compared
to USD 40m in FY 2020 due to higher margin cargo mix and value-added services.
Wallenius Wilhelmsen – Annual Report 2021
Message from the Board
Government segment
Contents →
Government segment
The government services segment provides ocean transport of U.S. flag cargoes
and performs global logistics services for the U.S. government. Ocean transport
includes RoRo cargo, breakbulk and vehicles. It also includes charters of vessels
to aliated companies in the shipping services segment and charters or sales
of vessels to the U.S. government. Logistics services for the U.S. government are
primarily related to multimodal transportation, third party logistics support, steve-
doring and terminal operations. The primary customer is the U.S. government, but
the segment also includes U.S. Flag commercial cargos such as those generated
by the financial sponsorship of a federal program, or a guarantee provided by the
U.S. government.
Summary of 2021
Total revenue from the government segment for the full year of 2021 was USD 236m,
down 4 per cent from USD 247m, mainly due to lower U.S. flag cargo activity.
EBITDA was USD 40m, down USD 15m (26 per cent) compared to FY 2020. The
reduction was primarily due to lower revenues and increased cargo handling and
fuel costs from the previous year. In general, 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 objectives, the segment reduced the impact
of rising fuel and labor costs through fuel consumption initiatives and increased
focus on safety management.
In April 2020, our subsidiary American Roll-On Roll-O Carrier Group Inc. (ARC) was
selected to provide global relocation services for the Department of Defense and
the U.S. Coast Guard, under the Global Household Goods Contract. That award was
protested by unsuccessful bidders and after corrective action by United States
Transportation Command (TRANSCOM), re-awarded to ARC. Unsuccessful bidders
protested again challenging the government's review process. The Government
Accountability Oce (GAO) sustained the second protest. Consequently, TRANSCOM
required a resubmission of bids in December 2020 and conducted a re-evaluation
of submitted bids. ARC timely resubmitted its bid and was informed in November
of 2021 that it was not awarded the contract. ARC has protested the award to the
GAO. A decision from the GAO is expected in March 2022. If ARC is successful in
ultimately securing the Global Household Goods Contract, it represents incremen-
tal business for the government segment, although the ultimate outcome of the
selection process will not impact the core business.
Wallenius Wilhelmsen – Annual Report 2021
Message from the Board
Market development and outlook
Contents →
Market development and outlook
The global demand for deep-sea transportation recovered from a pandemic-driven
dip in FY 2020, but it was weakened by supply chain disruption. Light vehicle (LV)
exports were hit the hardest, and momentum faded during the year, while the high
& heavy (H&H) segment did not face the same impact to the same extent as LVs
and thus saw a solid rebound in FY 2021.
The forward-looking statements herein, including assumptions, opinions and views
of Wallenius Wilhelmsen or cited from third party sources are solely views and fore-
casts which are subject to risks, uncertainties and other factors that may cause
actual events to dier materially from any anticipated development. The company
does not provide any assurance that the assumptions underlying such forward-look-
ing statements are free from errors, and it does not accept any responsibility for
the future accuracy of any forward-looking statements.
Light vehicle market
Based on data from IHS Markit, global LV sales increased by 2.9 per cent in FY
2021 compared to FY 2020 and totaled 79.4m units. The rebound from the Covid-19
pandemic had an impact on all major markets. However, production of LVs could
not keep up with demand as semiconductor shortage slowed the output. Chinese
LV sales fell 1.0 per cent YoY as internal combustion engine (ICE) vehicles declined
and low-emission vehicles (xEVs) grew sharply. Both in North America, up 3.8 per
cent, and Europe, up 0.1 per cent, inventories of new vehicles were at a record low
and average transaction prices trended high.
Global deep-sea LV exports were up 10.7 per cent from FY 2020 to FY 2021. Deep-
sea volumes grew more than total global sales, as North America and Europe, with
a relatively high share of deep-sea volume performed better than regions with lower
deep-sea shares. Light vehicle exports from Europe increased 7.2 per cent, while
North American exports increased 2.1 per cent. Japanese exports were up 3.5 per
cent from FY 2020, Korean vehicle exports were up 13.6 per cent. Chinese exports
almost doubled to a massive 95 per cent gain, from 0.5m to 1.0m. A positive factor
for Chinese LV export was the fact that new battery electric models gained ground
in Europe.
Securing vehicles on board
the vessels is vital to avoid
damage to the vehicles
during the ocean voyage
Wallenius Wilhelmsen – Annual Report 2021
Message from the Board
Market development and outlook
Contents →
According to the forecast from IHS Markit, the LV sales outlook for 2022 indicates
a growth of 3.7 per cent compared to 2021. Sales in North America are predicted
to increase by 2.9 per cent and exceed 18m units sold. Western Europe is expected
to see an improvement of 6.5 per cent. The base case scenario expects deep-sea
volumes to see a stronger rebound compared to global sales. Deep-sea volume
is forecasted to develop flat, as exports from Japan is expected to decline while
exports from Europe grow. The LV outlook for deep-sea carried volume for 2022 is
confident with a gradual improvement in supply chain issues including semicon-
ductor shortage. The fundamental macroeconomics look solid, but there is uncer-
tainty due to trade tensions, environmental regulations and geopolitical conflicts
that might influence sales.
High & heavy market
World markets for agricultural, construction and mining machinery experienced a
significant demand rebound in 2021. Global trade volumes increased 36.5 per cent
YoY in the first eleven months of the year – as demand continued to rise from the
pandemic-induced dip in Q2-2020.
Global construction machinery trade increased 41.7 per cent YoY during the period.
Machinery exports to all market regions grew strongly with every market recording
demand at least one-third higher than the year prior. The construction industry
experienced significant volatility as building sites were hit by waves of Covid-19
aecting workforce availability and productivity. Meanwhile, demand for construction
services remained strong in the residential segment, while nonresidential building
activity was hampered by uncertainty emerging from the pandemic. According
to O-Highway Research, global construction equipment demand (ex. China) is
forecasted to increase 2.4 per cent from 2021 to 2022, as growth in Europe, North
America and India more than osets declines in other parts of the world.
Our lift capacity is
impressive, and we
move a lot of high and
heavy bulk cargo for
our customers
Wallenius Wilhelmsen – Annual Report 2021
Message from the Board
Market development and outlook
Contents →
Global demand for mining machinery rebounded in 2021 with exports of mining
equipment increasing 55.4 per cent from the year prior. The upturn was driven by
machinery deliveries to European mines, but strong growth was also recorded to
Asia, North America and Latin America. 2021 represented the first year of market
growth since 2018, as soaring commodity prices left the mining industry with the
highest profits in a decade. Strong earnings allowed miners to again invest in projects
and machinery, and investments among major miners rose by an estimated 15.1 per
cent in 2021. Consensus estimates for selected machinery manufacturers indicate
that mining machinery sales will increase another 16.0 per cent from 2021 to 2022.
Compared with construction and mining machinery, markets for agriculture equip-
ment experienced a stronger rebound and ended 2020 essentially unchanged from
2019. With strong momentum even before the year started, global exports of agri-
culture machinery increased 23.1 per cent YoY in the first eleven months of 2021. The
market expansion was led by strong growth in Oceania and Latin America, but all
market regions recorded double-digit increases. Demand was driven by the high-
est food and crop prices in a decade, supporting farmer sentiment and investment
appetite around the world. Consensus estimates for selected equipment manu-
facturers indicate that machinery sales will grow another 15.6 per cent in 2022.
Global fleet
The global vehicle carrier fleet totaled 578 vessels with more than 4,000 car equiv-
alent unit (CEU) capacity. In 2021, five newbuilds were delivered and one vessel was
recycled. During 2021, there were 37 new orders above 4,000 CEU. This resulted in
an order book at year-end of 39 vessels with more than 4,000 CEU – the equiva-
lent of about 8 per cent of the active fleet. Most of the order book is scheduled for
delivery after 2023.
Wallenius Wilhelmsen
has 130 vessels in its fleet
Wallenius Wilhelmsen – Annual Report 2021
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: financial, market and commercial, oper-
ational, regulatory, climate, environmental and safety. Wallenius Wilhelmsen has
established a group-wide enterprise risk management model and maps all main
risks on a continuous 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 imple-
menting 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.
Financial risks
The main financial risk exposures for Wallenius Wilhelmsen are interest and currency
rates along with rising fuel oil prices. Wallenius Wilhelmsen's policy is to hedge
between 30-70 per cent of the net interest rate exposure predominantly through
interest rate swaps and fixed-rate loans. The hedge ratio currently stands at about
65 per cent.
The US dollar is the dominant currency for both revenues and costs across the
group. It is also the group's presentation currency. Most of the currency exposure
arises on the cost side in the ocean-operating companies where KRW, JPY, SEK,
CNY and NOK are the most important currencies. As a main principle, Wallenius
Wilhelmsen does not use financial instruments to hedge currency risk in the oper-
ating entities but assesses the merits of doing so in periods when the US dollar is
deemed historically strong compared to other currencies.
Fuel oil 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 eect exists, which means that the group is exposed to price changes in the
short term.
In addition to FAFs, the group had fuel oil swaps securing around a tenth of fuel oil
volumes during 2021.
For a detailed assessment of financial risk, see note 17 – financial risk in the finan-
cial statements.
Regulatory risks
Due to our global presence and operations within dierent segments, the group
is exposed to numerous regulatory frameworks. These include rules and regula-
tions related to for instance anti-corruption, sanctions, fair competition and data
privacy. Compliance with relevant requirements within these fields, in addition to
other corporate matters, are managed in collaboration between 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 section on Princi-
ples of corporate governance.
Wallenius Wilhelmsen – Annual Report 2021
Message from the Board
Key risk exposures
Contents →
Operational risks
Tonnage and trade imbalance, vessel incidents, adverse weather conditions and
access to skilled labor constitute the main operational risks at Wallenius Wilhelmsen.
We strive to secure sucient fleet flexibility by combining owned tonnage with both
long- and short-term charters. During 2021, global supply chain disruptions contin-
ued 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-ecient 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 remained
challenging. Our Covid-19 response team across the group has worked 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 compli-
ance with both global and local regulations.
Cyber-attacks is identified as a risk. 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 imple-
mented 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 exploita-
tion by criminal organizations involved in for instance smuggling of narcotics and
human trackers. Please see the human rights section in the People chapter.
The concern and safety
for our employees are
first priority. A number
of preventive measures
have been implemented,
such as a requirement
to wear masks
Wallenius Wilhelmsen – Annual Report 2021
Message from the Board
Key risk exposures
Contents →
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 vessels such as fire, piracy attacks and outbreak of contagious diseases.
The key risks at our land-based operations mainly relate to the handling and treat-
ment 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 regu-
lations. Frequent and regular emergency 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.
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 section of this report for further information.
Climate risks
Following current and future eects 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 financial material
climate risks are related to our shipping segment. High on the agenda is to best
prepare and position ourselves for forthcoming 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. Regulations to ensure these
targets are met. 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 regulatory 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.
Trade tensions and general geopolitical tensions that could lead to heightened
barriers to trade represent a risk. A continued disruption to the semiconductor
Wallenius Wilhelmsen – Annual Report 2021
Message from the Board
Key risk exposures
Contents →
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. Continued port congestions causing vessel delays pose a
risk to operations and the overall fleet utilization and lifting capacity. Furthermore,
illnesses or other events that may threaten the health and well-being of employ-
ees, customers, and wider communities may cause disruptions to operations and
demand, as seen during the Covid-19 pandemic. Any short-term direct eect 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 eects in case of slower 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 influence sales mix and trading patterns.
The geographical pattern of the production of LVs and H&H equipment is continu-
ously changing. A shift in the balance between locally produced and exported cargo
may aect the overall demand for deep-sea ocean transportation, resulting in a
shift to short-sea ocean transportation, and thus aect the overall fleet utilization.
A shift in customers' market positions can represent both opportunities and risks
for Wallenius Wilhelmsen's operating entities. However, our broad global presence
in many regions of the world combined with wide client exposure contributes to
actually reducing this risk element.
“We bring employees in 29 countries together through well
working technological solutions. Without these solutions,
we would not have been able to work as ecient as we
have done over the last year. When choosing partners to
deliver this, we balance risk vs. cost, and have a clear and
transparent process to make sure everything we do is in
compliance and accordance with our values.”
Håvard Melgaard
VP Global Sourcing & Partners
Wallenius Wilhelmsen – Annual Report 2021
Message from the Board
Events after the balance sheet date
Contents →
Events after the balance sheet date
In January, we commenced prepayment of the remaining USD 50m of deferred
amounts with the WW Ocean banks. All amounts will be prepaid within Q1-22, after
which the related dividend block will be removed.
On February 24, 2022, Russia invaded Ukraine. Wallenius Wilhelmsen has sus pended
operations in Russia and Belarus until further notice. The invasion of Ukraine is a
tragedy. Our deepest sympathy goes out to the people of Ukraine, and our thoughts
are with the millions of innocent people aected.
Wallenius Wilhelmsen has limited direct exposure in the region. In 2021 the reve-
nue related to transactions to and from Russia amounted to approx. USD 28 million
(0.7 per cent of total revenue for the group in 2021). There is significant uncertainty
associated with the duration and extent the disruption caused by the invasion, as
well as its impact on the global economy. Risks and developments are continuously
monitored by management. The group continues to adhere to prevailing sanctions
and other restrictions. Our main concern is the safety and well-being of our employ-
ees and partners, and the company continues to monitor the impact on operations.
Together with the Norwegian Shipowners' Association and other industry players,
Wallenius Wilhelmsen has donated financial support to the Red Cross in Ukraine.
Red Cross has a well-functioning network already on the ground as they have been
engaged in eastern Ukraine for the past eight years.
Dividend for 2021
The Board has decided to propose an ordinary dividend of USD 15 cents per share
to the Annual General Meeting on April 26, 2022, USD 9 cent per share payable in
May and USD 6 cent per share payable in November. In total, the proposed dividend
for FY 2021 is equivalent to about USD 63.5m.
Prospects
We continue to expect the supply-demand balance in shipping to remain favor-
able over the mid-term due to the overall global fleet situation. Logistics volumes
will benefit from gradual improvement of automotive semiconductor chip supply
expected during the latter part of 2022. In the absence of further volatility and
disruptions to supply chains, these developments are expected to further improve
financial flexibility and help drive shareholder value creation.
Potential risks include further parts shortages, labor shortages, increased geo po-
litical tension and further escalation of the conflict related to the Russian invasion
of Ukraine, negative impacts of any significant disruptions to the global supply
chains and operational impact from further Covid-19 outbreaks.
Wallenius Wilhelmsen – Annual Report 2021
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 17 October 2018), 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 elaborate on company,
accounting, stock exchange and securities legislations, as well as the Stock
Exchange Rules (from November 30, 2005 with later amendments). 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 to 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.
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. Making
up the core of the Company's governance framework, the governing elements guide
the employees in making the right decisions and navigate safely in a rapidly changing
environment. A summary of the governing elements is available electronically on
Wallenius Wilhelmsen's intranet; both as written and e-learning documentation.
We recognize that our extensive global reach, combined with operations in coun-
tries 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 encompasses topics such
as fair competition and anti-corruption, equal opportunities and diversity, harass-
ment and discrimination, health and safety, etc. The code of conduct is available
publicly on our webpage, and it is part of the onboarding procedures at Wallenius
Wilhelmsen in training programs and re-confirmed annually.
Wallenius Wilhelmsen – Annual Report 2021
Principles of governance
Implementation and reporting on corporate governance
Contents →
In 2021, as in 2020, 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 developed our third-party sanction
and credit risks screening and binding corporate rules which will be finalized and
implemented in 2022. We will also continue to focus on anti-corruption, competi-
tion law and other ethical and good corporate governance aspects.
Deviations from the Code: None
Security and emergency response
Security and emergency response is crucial for our operation. With an emerging
number of security risk, particularly in cyber security, we have escalated our
organization and focus. We established a new position as security and emergency
manager at corporate level. The position's mandate is to standardize and develop
emergency and crisis response capabilities across the group, and to focus on
security risks as criminality and terrorism.
In 2021 the CTPAT (Customs Trade Partnership Against Terrorism) program was
re-launched. This is a security framework to mitigate risks. The work will continue
in 2022 and this will be a framework for all our sites globally.
We have also established updated and standardized emergency response practices
for local and regional incidents. This is done to prepare the various local, regional
and global entities to ensure eective and common response mechanisms for
more global crises.
Wallenius Wilhelmsen – Annual Report 2021
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 read as follows:
‘The objective of the Company is to engage in shipping, maritime services, avia-
tion, industry, commerce, finance business, brokerage, 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
ecient solutions for the changing world of mobility on land and at sea. Our holistic
strategy is to create value for our shareholders and other stakeholder 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.
Principles of
Governance
People Planet Prosperity
Transparent,
with strong ethical
business conduct
Safe and inclusive workplace
where people's rights are
respected
Decarbonize and
reduce our
environmental impact
Solvingthe biggest
challengeswhile creating new
opportunities
Material Topics
Ethical business conduct
Emergency preparedness
Security
Privacy and data security
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
SDGs
Wallenius Wilhelmsen – Annual Report 2021
Principles of governance
The business
Contents →
Our strategy contributes to the Sustainable Development Goals (“SDGs”) issued
by the United Nations, and we focus on the eight SDGs provided in the above illus-
tration that we have assessed and that we have the greatest impact upon.
Our material topics are based on an assessment conducted to identify and prioritize
which topics are most material to our operations: We assessed relevant environ-
mental, social and governance related impacts along the company's value chain.
We ranked the dierent topics in terms of impact and importance to Wallenius
Wilhelmsen and our stakeholders. The assessment is based on continuous dialogue
with stakeholders, including our customers and partners, employees, investors,
and regulators. In 2022, we will update our materiality assessment in consultation
with external stakeholders.
Sustainability is integrated into our holistic approach to business: The Group's long-
term strategy is described in the section message from the board and consists of
four strategic pathways:
. E2E supply chain orchestration
. Drive operational eectiveness
. Expand to full lifecycle services
. Lead the journey to zero emissions
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.
Operationally we implement the strategy with a portfolio organized around the four
strategic pathways. Following the portfolios, we work in cross functional teams
around improving selected value streams or initiatives using agile methodology
and customer-centricity to innovate and develop better solutions.
Considering the risk profiles that our business have, 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
Wallenius Wilhelmsen – Annual Report 2021
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 of December 31, 2021, the total equity amounted
to USD 2,804 million, corresponding to 36 per cent, up from 34.3 per cent at the end
of 2020. The liquidity position is good, with cash and cash equivalents of USD 710
million and USD 349 million in undrawn credit facilities at year end 2021. The group
had net interest-bearing debt of USD 3,418 million at the end of 2021. Outstanding
bonds were USD 587 million, with the remainder consisting of bank loans, export
credit facilities and leasing commitments. The group was in compliance with all
loan covenants at year-end 2021.
The Board of Directors believes the capital structure of the Wallenius Wilhelmsen
group is appropriate to our objectives, strategies and risk profile.
Dividend policy
The Board of Directors has adopted the following dividend policy:
Wallenius Wilhelmsen's objective is to provide shareholders with a competitive return
over time through a combination of rising value for the WAWI ASA shares and divi-
dend payments to the shareholders. The board targets a dividend which over time
shall constitute between 30 per cent and 50 per cent of the Company's profit after
tax. When deciding the size of the dividend, the board will consider future capital
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 will be declared in USD and paid out semi-annually.
Dividend for the financial year 2021
The Board decided to propose an ordinary dividend of USD 15 cents per share to
the AGM on April 26, 2022, USD 9 cent per share payable in May and USD 6 cent
per share payable in November. In total, the proposed dividend for 2021 is equiva-
lent to about USD 63.5m.
Authorizations to the Board of Directors
At the AGM in 2021, 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 per
cent of the current share capital. The authorization can only be used in connection
with the Company's long-term incentive scheme for the executive management.
The authorization is valid until the AGM in 2022, but will last no longer than June 30,
2022. Furthermore, at the AGM in 2021, the board of directors was also granted an
authorization to increase the share capital by up to NOK 22,001,456, representing
10 per cent of the issued share capital. The authorization can be used in connec-
tion with acquisitions in return for shares and for general corporate purposes. The
authorization is valid until the AGM in 2022, but no longer than June 30, 2022.
Deviations from the Code: The authorization to the board of directors to increase
the share capital covers more than one purpose. The board of directors believes
that for several reasons this gives flexibility to increase the share capital by up to 10
per cent – either in connection with acquisitions, for general corporate purposes
or a combination of the two, depending on the specific needs of the Company.
Wallenius Wilhelmsen – Annual Report 2021
Principles of governance
Equal treatment of shareholders
Contents →
Equal treatment of shareholders
Shareholders
As of December 31, 2021, Wallenius Wilhelmsen had 5,971 shareholders, of which 292
were foreign, and the remaining were Norwegian. This indicates an increase of 11
per cent in the number of shareholders compared to year end 2020. The Norwegian
shareholders account for 208,198,118 of Wallenius Wilhelmsen shares, the equiva-
lent of 49 per cent 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 2021.
If the board resolves to carry out an increase in share capital and waive the pre-emp-
tion rights of existing shareholders 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 authori-
zation granted to the board of directors in 2021. However, it has previously purchased
own shares of which 700,883 was held in treasury as of year-end 2021.
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
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 suciently
detailed, comprehensive and specific, allowing shareholders to under-
stand and form a view on all matters to be considered at the general
meeting
•
The CEO, the members of the board of directors and the chair of the nomi-
nation committee shall attend the general meeting.
•
Pursuant to the articles of association of Wallenius Wilhelmsen, the chair
of the board will chair the general meeting and the board will accordingly
not arrange for an independent chairperson for the general meeting.
Wallenius Wilhelmsen – Annual Report 2021
Principles of governance
Nomination committee
Contents →
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 individual of the items on the agenda
and for candidates that are nominated for election. Wallenius Wilhelmsen will also
nominate a person who can act as proxy for the shareholders.
Shareholders with known addresses are notified 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 share-
holders at Wallenius Wilhelmsen´s oce. In accordance with Norwegian legislation,
the general meeting of 2021 was held digitally due to the Covid-19 and the chair
of the meeting was the Company's external counsel as appointed by the general
meeting and in accordance with Norwegian legislation.
Deviations from the Code: The articles of association provide that the chair of the
board will chair the general meeting. Due to Covid-19 restrictions, the board did,
however, arrange for an independent chairperson for the general meeting in 2021.
Nomination committee
In accordance with section eight of Wallenius Wilhelmsen's articles of associa-
tion, the general meeting has appointed the nomination committee, approved the
guidelines for the committee's work and agreed the remuneration to be paid for
participating 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. Jonas Kleberg is a member of
the board of directors. None of the committee members are executives in Walle-
nius Wilhelmsen.
The committee nominates candidates to the board and proposes board members'
remuneration. As part of its nomination process, the committee will have contact
with major shareholders, the board and Wallenius Wilhelmsen's executives to ensure
the process takes the board's and Wallenius Wilhelmsen's interests into consider-
ation. A justification 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 2021, the nomination committee held two meetings.
Deviations from the Code: Jonas Kleberg is a member of the board. He oered
himself for re-election to the board in 2021 based on the fact that the other
members of the nomination committee had identified him as a suitable candidate.
Wallenius Wilhelmsen – Annual Report 2021
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 composition 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. Three of the
directors are women. Four of the directors, Rune Bjerke, Marianne Lie, Margareta
Alestig and Anna Felländer, are independent of the majority owners, the execu-
tive management, and significant business relations. The board does not include
executive personnel.
Information on the background and experience of the directors is available on
Wallenius Wilhelmsen's website, which also lists the number of shares in Wallenius
Wilhelmsen held by each director. Members of the board of directors are encour-
aged 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 seminar hosted by Advokatfirmaet Thommessen
AS regarding the rules that apply to stock exchange listed companies. The objective
of the course was to provide information on legislation, rules, regulations, and best
practice 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 2
Thomas Wilhelmsen April
Jonas Kleberg April
Marianne Lie April
Margareta Alestig April
Anna Felländer April
Wallenius Wilhelmsen – Annual Report 2021
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. This
includes 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 management to clarify internal alloca-
tion 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
makes decisions that form the basis for the administration's execution of the strat-
egy. 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 2021, Wallenius Wilhelmsen arranged fifteen meetings which all board members
attended. I.e. 100 per cent attendance in meetings during 2021.
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 communica-
tion channels, including a board portal containing timely and relevant information.
The directors and ocers are covered by Wallenius Wilhelmsen ASA's Directors and
Ocers Liability Insurance (D&O) placed with AIG, AXA XL, Risk Point and IF. The
insurance comprises the directors' and ocers' personal legal liabilities, including
defense- and legal costs. The cover also includes employees in managerial posi-
tions 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 committee, compensation committee, litigation committee, advi-
sory committee or other management or board committees.
Wallenius Wilhelmsen – Annual Report 2021
Principles of governance
Board responsibility and work
Contents →
Audit committee
The Company's audit committee currently consists of three members:
•
Marianne Lie (chair)
•
Margareta Alestig
•
Anna Felländer
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 finance
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 reporting and
the eectiveness 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.
Remuneration Committee
The board of directors has established a remuneration committee consisting of:
•
Rune Bjerke (chair)
•
Thomas Wilhelmsen
•
Jonas Kleberg
The members are independent of Wallenius Wilhelmsen's executive management.
The board sets guidelines for remuneration of the executive management, includ-
ing incentive schemes, pension schemes/terms and employment agreements.
The remuneration committee also proposes the general remuneration principles
for other employees in the Company.
Management team
In 2021, the executive management team at Wallenius Wilhelmsen consists of an
acting chief executive ocer (CEO), who is also CFO, and the following other roles:
•
Chief financial ocer (CFO)
•
EVP, chief operating ocer (COO) Shipping Services
•
EVP, chief operating ocer (COO) Logistics Services
•
EVP, acting chief human resources ocer (CHRO)
•
EVP, chief digital ocer (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 16
as well as on the Company's website.
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 aairs of the Company
and its businesses in a proper and ecient manner, and in the best interests of
Wallenius Wilhelmsen and its shareholders.
Wallenius Wilhelmsen – Annual Report 2021
Principles of governance
Board responsibility and work
Contents →
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 dierent 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 su-
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 Carri-
ers, Armacup Limited and Syngin Technologies, LLC. 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, financial 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
“There's a good rationale for every position
in the Company. Regardless of your role and
tasks, trust that you always contribute and
make a dierence. We have lots of examples
of people that make a dierence.”
Ana Quaresma
VP Sales South America
Wallenius Wilhelmsen – Annual Report 2021
Principles of governance
Risk management and internal control
Contents →
Risk management and internal control
Board responsibility
The board is responsible for the Wallenius Wilhelmsen's internal control and risk
management and believes that Wallenius Wilhelmsen's systems are appropriate
given the extent and nature of our activities. The system contributes to control char-
acterized by integrity and ethical attitudes throughout the organization. It is based
on the Wallenius Wilhelmsen's guidelines for business standards and sustainable
social responsibility.
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 auditor.
About the system
Governing documents, code of conduct, company principles (including sustain-
able social responsibility), policies, guidelines and process descriptions are docu-
mented and electronically available to Wallenius Wilhelmsen's employees through
our global integrated management system. Various internal control activities
give management assurance 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:
•
Eective and ecient operations
•
Risk management
•
Reliable financial reporting
•
Compliance with laws and regulations
•
Necessary resources provided and used in cost-ecient 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
•
Quarterly reporting on 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.
Wallenius Wilhelmsen – Annual Report 2021
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 global whistleblowing system, including procedures
and channels, for giving notice about potential non-compliance, e.g. corruption,
theft, fraud, sexual harassment or other breaches to the Company's business
standards. The whistleblowing channel is hosted by an independent third party
and employees can report concerns confidentially.
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 profes-
sional way of handling potential breaches to laws and regulations, self-imposed
business standards or other serious irregularities. The procedures also include
guidelines to safeguard the whistleblower.
During 2021, we received 21 cases through the whistleblower channel. In addition,
cases and queries have been reported through the reporting line. The cases are
addressed upon being reported. No cases of corruption were confirmed, breaches
of our code of conduct were confirmed and if found in breach of our governing
requirements, led to repercussions. We will continue to raise awareness of the
whistleblower channel to encourage employees to report any potential breaches.
Deviations from the Code: None
5%
57%
12
5
3
1
14%
24%
0%
HR related – various
Safety
Performance, compensation etc
Conflict of interest
Compliance – other concerns
Cases reported through the whistleblower channel:
Total:
21
Wallenius Wilhelmsen – Annual Report 2021
Principles of governance
Remuneration of the Board of Directors
Contents →
Remuneration of the Board of Directors
Remuneration of directors is determined by the AGM and 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 complexity 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 assignments for Wallenius Wilhelmsen in addi-
tion to their appointment as member of the board of directors.
Deviations from the Code: None
“Our key priority is to be compliant with applicable
privacy and data protection requirements. We inform
our employees on a regular basis to make sure we all
follow our guidelines and policies and that this
is understood by everyone.”
Mari Campbell Strømme
Legal Counsel
Wallenius Wilhelmsen – Annual Report 2021
Principles of governance
Salary and other remuneration for executive personnel
Contents →
Salary and other remuneration for executive personnel
Remuneration policy
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 Group CEO's remuneration and establishes the frame-
work 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.
An overview of employee benefits, including salary and other components of the
CEO's, CFO's and COO's remuneration packages are detailed in the renumeration
report attached 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 addition to short-term variable remuneration, a long-term incentive plan for senior
and other executives was introduced in 2018 and approved by AGM in 2021. It aims
to promote and reward a long-term strategic perspective, while helping senior and
other executives build a meaningful personal share ownership in Wallenius Wilhelm-
sen. The plan, which is a bonus scheme resulting in a monetary amount, will make
awards over our common shares to the equivalent amount. The bonus is assessed
over, and becomes payable after three years. It is subject to continued employment
and the achievement of financial and strategic long-term performance targets
including return on capital, market capitalization and a discretionary element.
The maximum annual payments can be 50 per cent of base salary for the CEO, 40
per cent of base salary for the remaining senior executives and 30 per cent of base
salary for other executives.
A report on salary and other remuneration to the executive personnel will be prepared
in accordance with the Public Companies Act and relevant regulations.
Deviations from the Code: None
Wallenius Wilhelmsen – Annual Report 2021
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
activities 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 infor-
mation to shareholders, including reports and presentations, financial calendars,
share information, contact information, and news and media.
The Company is present on social media but has strict rules on who can use social
media for Company purposes, and has clear guidelines stating that stock-sensi-
tive 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
– the silent period – Wallenius Wilhelmsen will not 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 is 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
has not determined such guidelines, shareholders are 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 relevant information.
Wallenius Wilhelmsen – Annual Report 2021
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 sucient and timely information to consider the oer 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 sucient 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 accounts 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 estimated accounting figures, and (iii) reports all material matters on
which there has been disagreement between the auditor and the executive manage-
ment of Wallenius Wilhelmsen. There were no disagreements between management
and PwC during 2021. Once a year, the board of directors reviews the Company's
internal control procedures with the auditor, including weaknesses identified by
the auditor 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 independence of Wallenius Wilhelmsen's executive manage-
ment, 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 2021, Bjørn Lund was the Company's engagement partner
from PwC.
Deviations from the Code: None
While impressive deep sea vessels are our most visible
assets, we believe it is our people that are most important.
From managing processing centers and terminals to
operating our land and ocean fleets eciently and
responding to customer needs, Wallenius Wilhelmsen's
people are essential to how we create lasting value.
By providing a safe and inclusive workplace where
everybody's rights are respected, we strive for economic,
social and environmental excellence globally.
People
Contents →
Wallenius Wilhelmsen – Annual Report 2021
People
Health, safety and wellbeing
Contents →
We monitor, manage and report on four material topics related to our people:
. Health, safety & well-being
. Human and labor rights
. Diversity, equity, inclusion
. Training & development
1. Health, safety and wellbeing
Why is it important?
We are committed to preventing harm to our people's health, safety and wellbeing.
Wallenius Wilhelmsen is a global company with terminal operations, processing
centers, road and seagoing transportation. We face many potential risks. It could
be work-related incidents, road accidents, oil spills and other environmental inci-
dents. We continuously improve our safety culture by working with our employees,
partners, ship management and suppliers to ensure that safe work practices are
incorporated in all that we do, wherever we are.
How do we work?
Most of our employees work in logistics services. This includes outsourced labor
at terminals and processing centers. We have a health, safety, environment and
quality policy in place, and the management system is aligned with the ISO stan-
dards for health & safety (45001), environment (14001) and quality (9001). Several
of our facilities are certified to one or more of these standards. Dedicated HSEQ
managers are responsible for the continual improvement of the systems and senior
management monitor this work closely.
External ship management companies employ the crew onboard Wallenius Wilhelm-
sen's owned vessels and vessels on bareboat charter. Our marine operations
management team ensures that the ship management companies comply with our
working conditions, safety policies and our ship operations and maintenance policy.
How did we perform?
During 2021, a key priority has been to keep our people safe and healthy during the
ongoing Covid-19 pandemic. International Covid mitigation eorts, such as travel
restrictions, prevented many seafarers from getting on or o vessels. They had to
stay onboard for months past their contracts or on land with no possibility to work
and provide for their families. Together with our ship management companies, we
were able to minimize extra o-shore time through additional port-calls and tailored
crew-change plans. To alleviate the challenges of our sea crew, we supplied extra
bandwidth for satellite communication so they could stay in touch with friends
and family and established pre-paid bonuses. We also oered interest-free loans
to compensate seafarers at home who were unable to work.
Wallenius Wilhelmsen – Annual Report 2021
People
Health, safety and wellbeing
Contents →
We work with peers and trade organizations, such as the Norwegian Shipowners'
Association and IMO, to influence authorities to limit time on board and maximize
the number of changeovers. We provided vessels with oxygen meters and antigen
tests, virtual access to medical advice and support from physicians. In addition, we
established our own vaccination program. At the end of 2021, more than 80 per cent
of our seafarers were vaccinated, compared to the industry average of 30 per cent.
In the logistics segment we took several actions to ensure safety, care and concern
for our employees:
•
We engaged in partnerships with local health care providers to oer
testing, vaccinations and medical services
•
We paid for time o and oered flexible work schedules to support
individual needs for family care
In addition to mental health campaigns, we gave a global day o to all oce sta
with a call to engage in mental wellbeing activities.
In the US, where most of our logistics employees are based, we oered a new
benefit package through Care.com. This is available to all Wallenius Wilhelmsen
employees and provides subsidized emergency backup child or adult care, online
tutoring services, backup pet care and other services. Emergency in-home or
in-center backup care can be used when regular care is not available during work
hours. On-demand tutors provide an academic resource for kids in grades K-12,
plus some college-related tutoring. This initiative came in response to employees'
#engage survey results raising the need to access aordable and quality back-up
for family care.
Global safety committee supports global safety culture
In 2021, regional safety heads for our Logistics
services established a global safety committee to
share learnings and best practices.
Every month, regional safety heads from Austra
-
lia, Belgium, Canada, Mexico, South Africa, South
Korea, the UK and USA make the time to convene
and review safety issues and trends – all with the
aim of helping each other.
The initiative has had a big impact already, says
Anthony Miner, manager for Safety, Quality and
Sustainability who helped launched the initiative
and chairs the meetings.
“This kind of close collaboration allows us to benefit
from each other's successes – and mistakes too,”
says Anthony. “We know how we can help each other
to resolve challenges easier, pass along tips or assist
in scaling up new solutions quicker.”
“To be honest, we didn't realize how valuable this
committee would be,” reflects Anthony. “It's already
become a critical part of our Safety 1st management
system and leadership culture.”
of our seafarers were
vaccinated compared to
the industry average of
80%
30%
Wallenius Wilhelmsen – Annual Report 2021
People
Health, safety and wellbeing
Contents →
Tragically we experienced one work-related fatality in 2021. A contractor at a facility
in Shanghai, China, died after being hit by a reversing mini-truck. The incident has
been investigated and mitigating actions enforced to avoid similar incidents in
the future. Sadly, one of our vessel crew members contracted Covid-19 and passed
away on board in 2021. Our thoughts and support go to their families, friends and
colleagues.
Although we have achieved improvements over the years, the safety performance
in logistics declined during 2021. At the end of the year, LTIF was 15.15 in our land-
based operations with 178 lost-time injuries for sta and contractors. This is consid-
erably higher than our 2021 LTIF target of 13. Many of our incidents were related to
slips, trips and falls. Our operations in the Americas consequently ran a campaign
addressing these hazards and increasing awareness to minimize the risk of such
injuries in the future. Even though our LTIF is comparable to the industry average in
countries such as the US, it is a priority to drive continuous improvement of safety
performance and we will particularly focus on the facilities that have had the high
-
est numbers of incidents and recurring root causes. Absenteeism for Logistics
improved slightly in 2021 from 2.55 per cent to 2.35 per cent.
A global safety committee was established in 2021. The aim is to share good prac-
tices among operations and regions. The committee, which consists of health &
safety professionals from the Americas, EMEA, Asia and Oceania, meet regularly
to share lessons-learned and strengthen our general safety culture.
At sea, the LTIF was 0.88 at the end of 2021, better than our target of 1.0. Most of the
injuries are related to slips and trips.
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 2022:
•
Support our employees in taking care of their mental health and manage
stress cause by the pandemic
•
Strengthen eorts to reduce risk and improve health and safety
performance at our facilities with the highest numbers of incidents
•
Strengthen our health & safety management system
Key performance indicator actual target target
LTIF logistics . < . < .
LTIF ocean . < <
Wallenius Wilhelmsen – Annual Report 2021
People
Human and labor rights
Contents →
2. Human and labor rights
Why is it important?
As a global company we operate in many dierent regions and countries. Identifying
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 the internation-
ally recognized UN Universal Declaration of Human Rights and the International
Labour Standards (ILO declaration on fundamental principles and rights at work).
In addition, regulations, such as the upcoming Norwegian Transparency Act and
the minimum social safeguards of the EU taxonomy, increasingly demand that
companies carry out due diligence in their value chains, develop governance and
management, provide grievance mechanism and report on progress.
How do we work?
The respect for human and labor rights is embedded in our code of conduct. The
code specifies that discrimination based on race, color, religion, gender, age, nation-
ality, sexual orientation, disability, or any status protected by law is not tolerated.
In addition it condemns all forms of forced labor, exploitative working conditions
and child labor.
One of our focus areas is vessel recycling yards as these are a known hotspot for
human rights violations. For decades, we have conducted responsible ship recy-
cling according to our specific policies. We are one of the founding members of the
Ship Recycling Transparency Initiative, an online platform for sharing information
on shipping companies' recycling policies and practices. Corruption poses a detri-
mental risk to human rights and is another important focus area for us. The pres-
sure to pay facilitation payments, for instance in ports, has decreased considerably
over the years. This is due to, for instance, the group legal team providing training
and support, liaison with protection and indemnity clubs and ship management
companies, as well as peers and the Maritime Anti-Corruption Network (MACN) of
which we are a founding member. Letters describing our policy are sent to ports
prior to arrival.
To minimize the risk of piracy, we avoid areas and routes with a particular high
piracy risk. In addition, we have installed piracy protection plates on our vessels as
a concrete measure to avoid employing armed security. We did not have any armed
security on our vessels in 2021.
We have established a governance structure to comply with relevant regulations
relating to labor rights and working conditions. Please read in the DEI section below.
How did we perform?
In 2021, we developed a human rights policy. It lists key principles, objectives and
commitments on human and labor rights. The policy was operationalized with
human rights risk assessment & due diligence (HRRDD), in accordance with the
OECD guidelines for multinational enterprises and UN guiding principles on busi-
ness and human rights. The HRRDD encompasses our entire value chain as well
as direct operations.
The assessment involved a desktop analysis, development of a systematic process
and several workshops including managers from human resources, legal, safety,
emergency & security and procurement. We also consulted an external human rights
expert to verify our approach. Human rights were assessed across our extensive
value chain to determine which factors are relevant for us and decide why others
are not relevant.
Wallenius Wilhelmsen – Annual Report 2021
People
Human and labor rights
Contents →
For some we already have procedures in place, whilst others need to be addressed
in more detail.
Key human rights most relevant to our business include:
•
Supply chain risks: We identify, and address risks related to human rights.
Please see section on sustainable supply chain in the Prosperity section
below.
•
Discrimination and harassment: Non-discrimination and harassment is
specified in our code of conduct and integrated into our management
procedures and will be given strengthened focus as part of our increased
focus on diversity, equity and inclusion (DEI). This is further described
below.
•
Stowaways on vessels: Preventive measures in terminals and ports are
implemented and continuously strengthened especially for high-risk
shipping lanes. Examples of preventive measures are ID checks, CCTV
systems, manual cargo inspection and thermal screening cameras. In
the case stowaways are found on a vessel after leaving port of departure,
recommended practice is followed as per IMO in Resolution 13 (42): FAL
Convention with guidelines related to stowaways. P&I clubs are consulted
to ensure the safety of stowaways when considering potential ports for
disembarkation.
•
Migrants in distress picked up 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 international convention for the safety of life at sea. P&I clubs are
consulted to ensure the safety of migrants when considering potential
ports for disembarkation.
•
Shipyards and ship recycling: For a long time, we have had focus on elimi-
nating adverse human and labor right impact in this area (see above).
•
Health and wellbeing during the pandemic: During the Covid-19 pandemic
we have worked continuously to ensure the safety of our sta and to miti-
gate adverse human rights impacts on seafarers resulting from Covid-19
restrictions particularly related to crew-change restrictions (please see
the section on health, safety and wellbeing above).
•
Employee and supplier information privacy: Please see how we address
this risk in the governing elements in the principles of governance section
above.
Wallenius Wilhelmsen – Annual Report 2021
People
Human and labor rights
Contents →
How will we proceed?
We will develop our human rights due diligence by:
•
Ensuring that Wallenius Wilhelmsen's human rights policy is understood
and implemented in all parts of our company
•
Establishing a webpage for queries by external stakeholders relating
to human rights impacts
•
Establishing a taskforce of key functions to advance our human right work
•
Expanding our stakeholder engagement to a wider group of internal
stakeholders and consult external stakeholders such as NGOs
•
Conducting internal awareness campaigns and training, as well as
present initiative and results to management and the board
•
Including human rights in the scope of the established whistleblower
channel
•
Conducting assessment of risks in our supply chain
“Instead of worrying about hostility or fighting
against prejudice, I can focus on the real work
and my responsibilities in a friendly and fun
environment, which already feels like my second
family. I sincerely appreciate the opportunity of
being part of this great team and culture.”
Duygu Arikan
Solutions Architect Ocean Applications
Wallenius Wilhelmsen – Annual Report 2021
People
Diversity, equity and inclusion
Contents →
3. Diversity, equity and inclusion
Why is it important?
Our employees, with their diverse background and experiences, cooperate daily
across national 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 bring out our best version of ourselves and learn from each other. Diverse and
inclusive organizations, which provide everyone with a safe and inclusive workplace,
are innovative, make good decisions and perform well. We need this diversity to
solve challenges and realize opportunities.
How do we work?
With the pandemic, we saw the importance of providing people access to work,
development of skills and the time to focus on their wellbeing. Therefore, we are
further developing our approach so that everybody working at Wallenius Wilhelmsen
is treated equally and feels included. Our board of directors and senior manage-
ment are committed to, and 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, reli-
gion, gender, age, nationality, sexual orientation, disability, or any status protected
by law is not tolerated. We strive to provide everybody with equitable treatment
and opportunities when they are recruited and promoted, and in their daily work.
DEI is incorporated into Wallenius Wilhelmsen's strategy and our human resource
colleagues get support from sustainability and corporate communications as well
as safety and labor representatives.
Annually, we conduct an employee survey, called #engage, to monitor our employ-
ees' perception of the working environment and our progress on developing
an inclusive culture.
We have partnered with organizations such as Out in Tech, Techqueria, Women
who Code and Women's International Shipping & Trading Association (WISTA). We
will monitor the eect of our initiatives through the DE&I score in our bi-annual
employee survey.
25% 24% 24% 22%
75%
76% 76%
78%
50%
Americas Asia EMEA
*
Oceania
Women
Men
* Europe, Middle East and Africa
Gender mix per region
Wallenius Wilhelmsen – Annual Report 2021
People
Diversity, equity and inclusion
Contents →
How did we perform?
During 2021, we recruited eleven women to senior management positions meeting
our goal of ten. We increased our gender diversity to 21 per cent women in senior
management positions. Of our approximately 2,500 oce workers, 39 per cent are
women, whilst women constitute only 18 per cent of all production workers.
In our Norwegian operations, the gender diversity in 2021 was 35:65, both in total
and on executive level. It was a little lower on senior manager and manager levels,
34% and 32% respectively. At “professional” level, women represent 45% of the
employee group.
Our industry has historically been male-dominated and it is a priority for us to
change this. We have therefore set target for gender ratio for oce workers in senior
management to at least 24/76 (f/m) for 2022 and 35:65 (f/m) by 2030 as a first step.
To best reflect the communities where we operate and the stakeholders we serve,
we will continue to increase our diversity, especially amongst production workers.
The pandemic has also revealed a gap between available labor and the number of
jobs. We are implementing several initiatives to address this disparity. We oer train-
ing to talent acquisition teams and challenge them to use the structured interview
technique and selection process for inclusive hiring. We use third party technology
to review our job ads for potential biased language.
To secure equity and fair pay, we conducted a global gender compensation analysis
in 2021. The analysis assessed compensation based on gender, regions, positions,
and promotions before and after the yearly salary review. We ran a comparison with
recognized and relevant market data. The aim was to identify and lift employees
who have been compensated below target. The analysis showed that although an
equal number of women and men were promoted, the proportion of female employ-
ees promoted was greater than that of males.
The analyses also showed that we have succeeded in lifting a significant number
of employees that previously were compensated below 80 per cent of the market
benchmark. However, pay disparity in certain regions and for certain positions still
exists and further work is needed to close this gap. We also conducted a gender
compensation analysis for our Norwegian operations in accordance with local
anti-discrimination regulation.
Earnings ratio
women:men
Norway
98%
Sweden
101%
United States
87%
Korea
90%
Senior management: New hires:
% Women % Women
% Men % Men
Wallenius Wilhelmsen – Annual Report 2021
People
Diversity, equity and inclusion
Contents →
As part of diversity and inclusion, we amended the 2022 US holidays to include
Juneteenth and Martin Luther King Day. This demonstrates our commitment to DEI
and show that we honor our African American workforce. During October, we invited
employees to share personal stories on our internal social media channel to help
reduce the stigma of mental health challenges. We also launched our “Belonging”
statement as part of defining our internal culture.
How will we proceed?
Going forward, we will:
•
Conduct training on inclusive leadership and on the structured candidate
interview and selection process
•
Continue to close the pay gap
•
Enhance our anti-discrimination management practices
Diversity, equity, inclusion & belonging
We aspire to build a workplace where all contributors
feel they can bring their best selves everyday, learn
from each other, and be appreciated.
We believe inclusive leadership matters and will
help us protect our most valuable investment in our
success – our people.
Diversity, equity, integrity and belonging is 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.
Our journey towards sustainable and integrated
logistics will compel us to attract people with diverse
experiences, skills and abilities. As we build #TheWal-
WilWay, we will strengthen and diversify our services,
helping everyone thrive in a world that keeps surpris-
ing us.
Wallenius Wilhelmsen – Annual Report 2021
People
Training & Development
Contents →
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 regulations and best practices
are important to build a strong, competitive workforce. We believe that well-sup-
ported employees are more productive, and more engaged in business. Combined,
we expect these eorts to have a positive eect on the retention rates.
How do we work?
GoGrowSucceed is the company-wide platform for co-workers to manage their
professional development objectives and facilitate their performance and devel-
opment check-ins with management.
Unlike past performance reviews focusing on ranking 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 reports. We provide our employees with a combination of digital and in-person
training sessions. All employees at all sites are required to participate in an annual
training class 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 employees to develop their
own learning journey to bolster career progress.
How did we perform?
Covid-19 limited our ability to safely provide traditional in-person training sessions.
However, our training and development eorts continued thanks to iLearn.
During 2021, we conducted our annual code of conduct training. The training was
conducted as e-learning for our IT-enabled employees, and extensive workshops
were conducted for employees without PC. In total, close to 80 per cent of all
employees completed the training and we are satisfied with this outcome, given
the obstacles the Covid-19 pandemic created. We also further developed cyber
security governance and conducted a company-wide cyber security training for
all IT-enabled employees. We are pleased with the completion rate of the training,
which was 75 per cent of the targeted employees. The training must be completed
annually, and it is compulsory for all new employees. In 2021, we launched a cyber
security campaign to raise awareness and train our employees on how to recognize
phishing attempts and cause of action. Following the training, we have seen an
increase in reported cases and queries raised among our sta.
How will we proceed?
In 2022, we will continue our transition to digital learning, enhancing our ability to
deliver new knowledge and skills to all our coworkers, regardless of where they
work each day.
We believe in the power of connections to support
our people, provide an improved employee experience,
and help people perform at their best.
of our IT-enabled
workforce completed
the cyber security
gamification training
of all employees
completed Code of
Conduct training
75%
80%
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.
Decarbonization and the shift away from fossil fuels is recognized as
one of the most important measures to mitigate the worst irreversible
eects of climate change. Wallenius Wilhelmsen adheres to the scientific
consensus on climate change and supports the Paris Agreement.
Planet
Contents →
Wallenius Wilhelmsen – Annual Report 2021
Planet
GHG emissions and climate risk
Contents →
To manage our impacts on the planet, we monitor, manage and report on four
material topics:
. Greenhouse gas (GHG) emissions and climate risk
. Biodiversity
. Air quality
. Waste management
1. GHG emissions and climate risk
Why is it important?
Nearly all (99 per cent) of our scope 1 CO
2
e emissions relates to our seagoing trans-
portation. Although shipping in general has a much lower carbon intensity per
tonnes-km transported than air and land-based transportation
, it constitutes
three per cent of annual CO
2
emissions globally. To most, there are no alternatives
to seagoing transportation.
International shipping carries about 90 per cent of world trade, and the volumes
of goods are predicted to increase significantly toward 2050. To meet the objec-
tives set forth in the Paris Agreement, the industry needs to transform. It needs to
considerably reduce emissions and decouple activity from GHG emissions.
The challenge is becoming more acute as society misses the mark of 1.5 Celsius
ambition. Based on the current trajectory, we are most likely heading towards a
global warming of 2.3 Celsius by the end of this century, compared to pre-indus-
trial times
.
How do we work?
We believe that the best way to manage our climate risks impacts is to set ambitious
targets that lead us towards a zero emissions future. Our environmental policy is
at the center of our management approach.
Our carbon emission reduction targets:
Second IMO GHG Study 2009
Core insights | DNV
2023+
All new equipment at
terminals and yards to be
zero-emission
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
Wallenius Wilhelmsen – Annual Report 2021
Planet
GHG emissions and climate risk
Contents →
Reducing our GHG emission is integrated into our overall business strategy.
We work diligently on a day-to-day basis to minimize our emissions – in collabo-
ration with our customers and suppliers and through investments in known and
emerging technologies.
We have worked for decades to reduce our GHG emissions, and since 2008 our
CO
2
e intensity has decreased by 33.6 per cent.
In 2021, we committed to reducing our GHG intensity
by 27.5 per cent by 2030,
compared to 2019.
We also committed to setting a Science-Based Target to be validated by SBTi.
We are currently awaiting the publication of the shipping specific guidance.
Assuming a stable volume of business, meeting our CO
2
-intensity target will reduce
our annual CO
2
emissions by ~2 million tonnes, in 2030 compared to 2008. 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.
We firmly believe that our contribution to achieving the Paris Agreement can only
be made through collaboration with customers and other partners to develop the
needed technology and infrastructure. In addition, authorities need to put in place
progressive, yet pragmatic, regulatory measures with global applicability and eec-
tively enforce regulations to limit global warming to 1.5 degrees.
Wallenius Wilhelmsen has developed a comprehensive approach for reducing our
GHG emissions:
•
We invest time and resources to explore pathways to use low- or zero-
emission fuels for future vessels and logistics fleet and equipment
•
We work diligently to reduce our emissions on a day-to-day basis through
operational measures, in collaboration with partners and through invest-
ments in known and emerging technologies
•
We use operational and technical initiatives to reduce energy consump-
tion and emissions in our shipping fleet and existing operations.
We combine initiatives such as:
- Digitalizing our fleet to gather data and ensure continuous improvement
of ship operations
- Developing machine learning models to enhance performance
- Improving voyage planning, using advanced weather routing systems
- Using state-of-the-art biofouling management techniques and sharing
best practices
Grams of CO
2
/ tonne * km
Wallenius Wilhelmsen – Annual Report 2021
Planet
GHG emissions and climate risk
Contents →
Actions for reducing CO
2
e intensity
On a more occasional basis, we undertake upgrades and retrofits to enhance
energy eciency and to deploy emission abatement systems. 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 devel-
oped and made globally available.
33.33
gCO
2
e/t*km
24.16
gCO
2
e/t*km
Orcelle Wind
Our flagship R&D project is to develop a wind-pow-
ered PCTC, the Orcelle Wind, with a design capability
of reducing CO
2
emissions by as much as 90 percent
on a single voyage.
The concept is undergoing in-depth commercial,
operational and technical studies to ensure viability
prior to final investment decision.
Our ambition is to have the first two vessels ready
and in operations within 2027, and an additional two
delivered before 2030.
Wallenius Wilhelmsen – Annual Report 2021
Planet
GHG emissions and climate risk
Contents →
From 2022 onwards, we expect to see continued results from the operational and
technical initiatives. Until 2025, the reductions in CO
2
intensity are all due to oper-
ational and technical initiatives, in aggregate close to 7 per cent reduction from
2019. From 2025 to 2030, we estimate that asset replacement initiatives start to
contribute significantly to a reduced CO
2
intensity. However, operational and tech-
nical initiatives will continue to contribute with about half the annual reduction
in the latter years until 2030. During 2021, we developed a Sustainability-Linked
Financing Framework that can be used going forward to link new financing with
our climate objectives. Please see the investor relations web pages for the frame-
work and related document.
Contribution per initiative group
For our Logistics activities, including terminals, EPCs and VPCs, we are introducing
many initiatives to improve our energy eciency in buildings and to reduce our direct
emissions. The majority of our direct GHG emissions are related to fossil-powered
equipment such as forklifts, trucks and mini-vans used for crew transportation. In
2021, we launched our clean fleet initiative, requiring that all equipment purchased
as of 2023 will be zero-emission. In addition, we will build charging infrastructure for
our on-site equipment 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 minimize our scope 2 emissions.
2022
0%
20%
40%
60%
80%
100%
2023 2024 2025 2026 2027 2028 2029 2030
Technical upgrades Operational improvements Asset replacement
Wallenius Wilhelmsen – Annual Report 2021
Planet
GHG emissions and climate risk
Contents →
How did we perform?
Our CO
2
e-intensity from shipping services was 33.50 in 2021, which is similar to
the performance in 2020 of 33.51. In 2021, our total Scope 1
GHG emissions were
4,590,000 tonnes, of which 99.9 per cent were related to shipping. This is an increase
of 817,000 tonnes, or 18 per cent, compared to 2020. Due to the outbreak of the
Covid-19 pandemic and the drop in the global economic activity, we experienced a
reduced freight volume. In addition, many vessels were put in lay-up as a financial
precaution. As such, our direct emissions in 2020 were much lower than normal.
Compared to 2019, which is more representative to an average year with regards
to freight volumes, we see a 1.1 per cent decrease in 2021. In 2021 we experienced
higher than usual freight volumes and an increase in speed to compensate for
vessels that were coming out from lay-up.
From our Logistics activities, GHG emissions decreased by 669 tonnes, from 8,322
in 2020 to 7,653 tonnes in 2021. This development was mainly due to a change in
the profile of services we oer. Direct CO
2
emissions are related to combustion of
diesel and petrol fuels in fork-lifts and on-site vehicles, such as crew-transporting
mini-vans. This also includes natural gas and propane for heating.
Logistics – Tonnes Scope 1 CO
2
e per energy source
Our scope 2
emissions was reduced from 6,166 tonnes in 2020 to 5,878 tonnes in
2021. Corporate oces are not included in the scope 2 emissions, but we aspire to
disclose scope 2 emissions from all parts of our business in 2022.
Scope 1 CO
2
emissions includes operated facilities, owned vessels, vessels on bareboat charter, and short-term and Long-term
time-chartered vessels. Scope 1 CO
2
emissions does not include direct emissions from Keen. These will be disclosed from 2022
onwards.
Our scope 2 emissions do not include oces, only logistics' operated facilities.
3%
227
20%
1,506
38%
2,893
39%
3,028
Natural gas
Petrol
Diesel
Propane
Total:
7,654
Wallenius Wilhelmsen – Annual Report 2021
Planet
GHG emissions and climate risk
Contents →
How will we proceed?
•
Continuous implementation of operational improvements and technical
upgrades to meet our climate targets
•
Mapping of Scope 2 emissions from oces
•
Finalize asset replacement strategy
How we identify and manage climate risks and opportunities
We believe that climate change creates potential risks for our business, but it also
presents opportunities, and both are part of the company's long-term strategy.
Climate risks are identified and assessed regularly as part of our overall risk manage-
ment. In 2021, we conducted workshops to further identify and assess the climate
risks and opportunities to our shipping and logistics business following the recom-
mendations of the task force on climate-related financial disclosures (TCFD).
The assessment included desktop research to identify industry-specific risks and
opportunities; validation of relevance to our own business and operations; and a
discussion of the financial impacts on the business, and potential timeline of each
risk and impact.
Port of Zeebrugge Windfarm
Five new 150-meter wind turbines with a combined
capacity of 18 MW became operational in December
2021 on the terminals of transshipment companies
C.RO Ports Zeebrugge and Wallenius Wilhelmsen
Solutions. The green power producer Eneco carried
out the development of the wind farm.
“We are delighted to be able to contribute to this
expansion of green energy development at the port
for our region.” said, Emmanuel Van Damme, general
manager at Wallenius Wilhelmsen Solutions' termi-
nal in Zeebrugge.
The wind turbines will produce approximately 50
GWh of electricity per year. Part of this energy will
be used locally at the terminals and the rest will be
connected to the grid.
Wallenius Wilhelmsen – Annual Report 2021
Planet
GHG emissions and climate risk
Contents →
Risk Type Risks Potential Impacts
Physical Increased incidences of abnormal weather,
more frequent, severe storms
Increased OPEX for vessels due to schedule delays, port
downtime and disruptions in supply chain, added safety
measures, increased cargo damage, risk of machinery
problems and ship handling accidents. On land, this risk
could increase insurance and other operating costs due
to flooding at ports impacting terminal and processing
operations.
Rising temperatures Heat stress on maintenance crews and operators at
processing centers and terminals, leading to higher
cost on human capital
Transition -
market
Global trade flows may change or decline due
to stricter emission regulations.
Decreased revenues due to reduced demand for shipping
products and services. Increased capital expenditures
and stranded assets (vessels) and reduced service
capabilities.
Changes in consumer consumption patterns,
awareness and/or preferences (shift to local
production and consumption)
Reduced demand, lower revenues for shipping services.
Introduction of environmental criteria for new
business
Increased OPEX for technology and new business acquisi-
tion; greater reporting requirements; and lower revenues.
Transition –
policy & legal
Fractured, emerging local and international
regulations
Increased OPEX due to inconsistent legislation, sanc-
tions, flag registry etc.
Transition –
reputation
Risk premiums demanded by investors, lenders
and insurance companies
Declining access to financial products and/or increased
cost of capital.
Reputational risk from belonging to a high-emitting
industry
Increased costs due to diculties recruiting new
employees and skills
Transition –
technology
Lock-in to emitting fuels that become less
competitive during ship's lifetime
Increased operating costs, decreased return on invest-
ment (ROI) and risk of stranded assets. Higher road tolls
and restrictions for diesel powered inland fleet vehicles
Ships with outdated technologies may be denied
access to certain waters and ports.
Operational delays, longer routes leading to increased
operational expenses along with lower cargo leading to
reduced revenues.
Transitioning to low-emissions technology without
full certainty of long-term success.
Increased capex, stranded assets and early write-os.
Opportunity Type Opportunities Potential Impacts
Markets Access to new, favorable financing in the financial
markets
Increased access to capital and better rates; better ROI
due to lower cost of capital.
Resiliency Attract new talent, skillsets and become a more
competitive employer of choice
Higher employee retention rates, more diverse workforce
leading to better ROI from human capital.
Resource eciency Use of lower-emission sources of energy Increased access to and use of renewable energy (e.g.
shore to ship power) has the opportunity of lowering our
carbon footprint, reducing indirect (operating) costs and
increased revenues.
Wallenius Wilhelmsen – Annual Report 2021
Planet
GHG emissions and climate risk
Contents →
EU Taxonomy eligibility
In order 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, and 3) promote trans-
parency in economic and financial operations by defining sustainable activities
through a “common language.”
For 2021, it is required that companies, such as Wallenius Wilhelmsen, assess and
identify the portion of our turnover, Capex and Opex that can be considered eligible.
Please see the Sustainability Statements for our assessment.
How will we proceed?
In 2022, we will continue to identify the specific financial impacts of climate risk,
conduct a scenario analysis and assess consequent financial implications to further
implement TCFD's recommendations.
•
Assess financial impact of identified climate risks
•
Perform and disclose results from scenario analysis
•
Assess the portion of our KPIs (i.e. turnover, Capex and Opex)
that is taxonomy-aligned
Wallenius Wilhelmsen – Annual Report 2021
Planet
Biodiversity
Contents →
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. 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 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.
We strive to adhere to voluntary speed reduction measures to protect whales during
their feeding and migration seasons such as the Blue Skies Blue Whales program.
We engage electronic chart display and information system (ECDIS) suppliers to
add voluntary speed reduction regions to electronic maps.
Invasive species
We continued to manage our impacts on biodiversity by installing nine company-
owned vessels with ballast water treatment systems (BWTS) in compliance with
the regulatory schedule. By the end of 2021, 48 per cent of the company-owned
fleet of 86 vessels had a BWTS installed. The remainder of the owned fleet complies
with requirements through ballast water exchange. 100 per cent of the owned fleet
is enrolled in our hull biofouling management program. Guided by our biofouling
management policy, our management program includes regular underwater inspec-
tion, hull cleaning, propeller polishing and dry-docking.
Antifouling lowers environmental risks and costs
By reducing the number of invasive species clinging
to a vessel's hull, antifouling helps reduce drag and
subsequently reducing emissions, while protecting
the ocean's biodiversity and local ecosystems from
threats of invasions by non-native species.
A new antifouling standard was developed for the Ocean
fleet in 2019 and adopted fleet wide in 2020.
This initiative resulted in 3 per cent reduction in emissions
in 2020 (compared to 2019 figures), helping us avoid
approximately 140 000 metric tonnes of CO
2
e emissions.
Wallenius Wilhelmsen – Annual Report 2021
Planet
Biodiversity
Contents →
Eective management of biofouling on the vessels' hull reduces drag and lowers
the fuel consumption needed to maintain optimal eciency. In addition, it is an
important measure to minimize the risk of carrying invasive species to new areas.
We are currently testing innovative measures to reduce biofouling. One example is
the use of Jotun's hull skater. This is a robot that attaches to the hull and system-
atically “skates” across the ship's hull to remove growth. The method is purely
mechanical, without the use of chemicals. If the trial is successful, we will introduce
hull skater technology to additional vessels.
As part of the Woods Hole Oceanographic Institute's Science Research on Commer-
cial Ships, we are contributing to important scientific monitoring of the ocean by
measuring pH and concentration of micro-plastic, reporting sighting of plastic
waste and pinpointing their location in the ocean during our voyages.
How will we proceed
•
Increase our focus on how we can reduce our negative impact on
biodiversity and contribute positively
•
Follow the development of the Task-Force on Nature-related Financial
Disclosures (TNFD)
“I find it so motivating to build things that will
create jobs for people for decades and which
dierentiates us from other RoRo companies.”
Filip Declercq
Project manager for the expansion at
Bastenaken West in Zeebrugge, Belgium
Wallenius Wilhelmsen – Annual Report 2021
Planet
Air quality
Contents →
3. Air quality
Why is it important?
Our environmental impacts extend beyond CO
2
. SOx and NOx are contributors
to acid rain which is harmful to ecosystems and can have an adverse impact on
human health. NOx 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 SOx and NOx and strictly adhere to global
regulations regarding the emissions of these gases.
How do we work?
We are a founding member and leader of the Trident Alliance, a coalition of ship
owners and operators who share a common interest in eective 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 per cent sulfur for all areas that are not
already at 0.1 per cent. Wallenius Wilhelmsen complies with IMO regulations using
very low sulfur fuel oil (VLSFO, <0.5 per cent) or low sulfur marine gas oil (LSMGO,
0.1 per cent 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 scrubbers significantly reduce SOx emissions
to air, in addition to Particulate Matter (PM). Improving our operational eciency
will further reduce our sulfur emissions as we become more energy ecient and
use less fuel. Wallenius Wilhelmsen is considering a number of dierent fuel and
engine technologies for the future. A shift to LNG and zero-emission fuels would
drastically reduce, and potentially eliminate, our emissions of SOx 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 2021, total SOx emissions of our ocean shipping fleet were 10,645 tonnes. This
is an increase of 16 per cent from 2020, which saw much lower activity due to the
Covid-19 pandemic. The average sulfur content of fuel for the ocean fleet was simi-
lar as in 2020, 0.37 per cent vs 0.38 per cent in 2021.
By the end of 2021, 24 of our owned vessels are equipped with a scrubber. There
are no more scrubber installations planned for the fleet.
Wallenius Wilhelmsen – Annual Report 2021
Planet
Waste management
Contents →
4. Waste management
How did we perform?
Our ocean fleet landed 7,368 tonnes of waste to shore reception facilities in 2021,
of which 2,217 tonnes were plastic. Waste from logistics services slightly increased
this year compared to 2020, from 4,538 tonnes in 2020 to 4,856 tonnes in 2021. We
sort all our waste as far as possible and use reputable waste reception services to
ensure that our waste is responsibly handled. As of now, we do not collect data on
waste production from our oces, however we will work to collect this information
in 2022. We will also work to reduce waste production and minimize waste going
to landfills.
How will we proceed?
In 2022, 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 Recy-
cling Transparency Initiative, SRTI
•
Co-founder of the ‘Show me the Plastic’
initiative to reduce packaging left onboard
•
First carrier to partner in port waste recep-
tion 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
•
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.
We will 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).
By solving some of our industry's greatest challenges,
we create prosperity for our employees, customers,
partners and the communities in which we operate.
Prosperity
Contents →
Wallenius Wilhelmsen – Annual Report 2021
Prosperity
Innovation
Contents →
To manage our impacts on global prosperity, we monitor, manage and report on
five material topics:
. Innovation
. Quality of service
. Sustainable consumption
. Sustainable supply chain management
. Tax practices
1. Innovation
Why is it important?
Innovation is a key to succeed with our zero emissions goals. Our search for inno-
vative solutions not only improves operations, it also increases our commercial
advantages while creating value and new opportunities for our employees, custom-
ers, investors and suppliers. Please see the strategy section for further information.
How do we work?
Digital product innovation is managed by our digital accelerator team (DA 1.0) who
work according to the principles of lean and agile to develop innovative digital goods
in the following five 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
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
Wallenius Wilhelmsen – Annual Report 2021
Prosperity
Innovation
Contents →
How did we perform?
By 2021, Wallenius Wilhelmsen's digital accelerator approach yielded ten digital
products viable to launch and to be commercialized. Our DA 1.0 team has succeeded
to drive a digital business culture shift, an important transformation essential
for us to reap the full benefits of digital innovations like AI, machine learning and
computer vision.
To foster innovations, we encourage innovators and
entrepreneurs to focus on maritime challenges.
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. 2021 marked the tenth year of our collaboration with Ocean
Exchange. Over this decade, we have awarded just over USD 1 million in funding
and attracted innovators to our cause.
“We are extremely honored to have
been selected as the winner of the
2021 Orcelle Award. We are looking
forward to a long, close relationship
with Wallenius Wilhelmsen through
the energy transition and beyond”
Hank Robinson
President and COO, Element Resources
Wallenius Wilhelmsen – Annual Report 2021
Prosperity
Innovation
Contents →
Wallenius Wilhelmsen is a member of an R&D coalition with the University of Copen-
hagen, Maersk, BMW, H&M, Disney and Levi Strauss, to develop and bring to scale
a lignin-based maritime bio-fuel product that would achieve a steep reduction in
lifecycle GHG emissions relative to conventional fossil fuels.
Development is still at an early stage and success is not assured, but we believe
an important new sustainable fuel option may result. Lignin is the most abundant
naturally occurring fiber and it is a waste product of paper production. Additional
collaborations in 2021 include cooperation with Jotun, a leading provider of marine
coatings to shipowners and management companies, to further develop HullSkater,
an innovative technology for proactive hull cleaning and C-Leanship who has a new
hull cleaning and inspection system called ShipShiner 02. We also partnered with
RaaLabs to further our digitalization.
How will we proceed?
We will continue to follow this path also in 2022. We will pursue the following objec-
tives in order to foster sustainable innovations in shipping and logistics:
•
Launch, scale and commercialize digital goods that have established
viability
•
Extend incubation across segments, such as EV and sustainability
•
Explore, incubate and test the viability of new business models, such as
platforms & marketplace
•
Advance open innovation and thought leadership towards customers and
the industry
•
Scale and invest in partnership ecosystem
Results of our Digital Accelerator 1.0
60+
Ideations
85+
Ecosystem
Partners
10
Digital goods with viability
for launch & commercialize
10+
Strategic
Partnerships
350+
Wallenius
Wilhelmsen
folks engaged
25+
Partners
engaged
10+
Leading
technologies
30+
Ideas
incubated
20+
Countries
engaged
10+
External forums
thought leadership
10+
Stopped and
learnt fast
Wallenius Wilhelmsen – Annual Report 2021
Prosperity
Quality of service
Contents →
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 e-
ciency of our customers' outbound supply chains.
How do we work?
To secure the quality of 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 o-hire on each vessel. We manage the risk of o time by
maintaining and adhering to detailed maintenance schedules and procedures for
our vessels, as well as having close communication with our suppliers.
We are committed to complying with local, national and transnational regulatory
policies. Our logistics sites all work consistent with ISO 9001, 14001 and 45001
standards. Many of our high-volume processing centers hold an ISO 90001 and/
or ISO 14001 certificate. Our management and production teams are empowered
to continuously improve our way of working to deliver global, best-in-class, inno-
vative solutions that are safe, sustainable, lean and agile.
How did we perform?
Covid-19 brought many challenges to our industry in 2021. Despite these upsets, we
remained focused on delivering uninterrupted, high-quality service while protecting
our people. That is why we are incredibly proud to have received the GM's Supplier of
the Year 2021 and Nissan's 2021 North America Supply Chain Management Partner
of the Year. We are also honored to receive Toyota's 2021 Canada Kaizen Award and
the renewed Partner Status from John Deere, the highest rating for their suppliers.
For Wallenius Wilhelmsen, there is no higher reward than acknowledgment and
trust from our customers. Trust is built on delivering quality results, and is essen-
tial to value creation because it unlocks future opportunities.
How will we proceed?
To enhance our ability to manage and improve the quality of our services, we will
develop two new quality metrics:
•
Customer satisfaction score
•
Quality index score
These will enable us to better monitor, track and improve quality.
We will also develop a roadmap for improved quality and sustainability manage-
ment systems and certifications.
Wallenius Wilhelmsen – Annual Report 2021
Prosperity
Sustainable consumption
Contents →
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 remain
dedicated to promoting more sustainable consumption of our services. By encour-
aging our customers to use more green 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?
We oer our customers more visibility into related carbon emissions in our value
chain. One example is the Carbon Compass 2.0 tracking tool, which enables us
to report our sustainability and climate risks and performance annually to CDP
and EcoVadis. We also collaborate with our customers to identify climate-posi
-
tive changes to their current ways of shipping, and to instill sustainable supplier
management practices into our own supply chain. Our new supplier code of conduct
outlines principles and practices that we expect our suppliers to follow. For our
most visible and financially valuable assets – ocean vessels – we select recyclers
using responsible supplier evaluation criteria according to our responsible vessel
recycling policy. We include sustainability requirements in contracts with strategic
suppliers. All these steps help ensure that our customers receive the benefits of
more sustainable consumption.
Carbon Compass 2.0
Wallenius Wilhelmsen – Annual Report 2021
Prosperity
Sustainable consumption
Contents →
How did we perform?
This past year, Wallenius Wilhelmsen finalized the Carbon Compass 2.0, which will
enable customers to track the carbon emissions of their supply chain. The Carbon
Compass calculates the emissions of our vessels and neatly visualizes the data. It's
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
consumptions, cargo weight and distance need to be taken into consideration.
We also had 35 direct engagements with OEM customers on sustainability topics
and our sustainability performance. We reported “allocated emissions” to three
OEM customers through CDP's supply chain management survey and platform.
How will we proceed?
In 2022, we will continue to work with customers on how we can oer services with
lower CO
2
emissions and increased positive impact on people and prosperity.
“The best part of my work is that I get to work with
two companies within the same group. They both
have a strong legacy and they combine both of
their expertise, resources and know ledge to drive
good value and results for our customers. There
are times when this also can be a challenge, but by
working together both current and new customers
increase their potential and reach. It is exciting.”
Sirapon Amornsakaya
VP, Wallenius Wilhelmsen (Solutions) in Thailand and Myanmar
and head of our joint venture MCW Logistics Solutions
Wallenius Wilhelmsen – Annual Report 2021
Prosperity
Sustainable supply chain
Contents →
4. Sustainable supply chain
Why is it important?
A sustainable supply chain is essential to satisfy our customers' needs, while mini-
mizing 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 cultivate strong and transparent relationships with our suppliers, emphasizing
pro-active and continuous improvement eorts on their part, and a high level of
transparency to manage risk. Our suppliers are our trusted, long-term partners,
helping us deliver innovative solutions and services to our customers.
The company's new sustainable procurement policy guides our procurement
activities, and an accompanying supplier code of conduct communicates our
expectations and policy objectives to our suppliers. 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
Additionally, supplier contracts include reference to our supplier code of conduct.
We expect to meet growing requirements from customers and regulators for supply
chain due diligence, while minimizing sustainability risks in our value chain.
How did we perform?
In 2021, we developed a new sustainable procurement policy and supplier code of
conduct to provide a solid foundation for building and managing a more sustain-
able supply chain. We digitally distributed the new supplier code of conduct to 25
targeted suppliers, asking for digital acknowledgment and engaging them by asking
for their suggestions for improvement. We received acknowledgment as well as
positive feedback on both the process and the contents of the new code of conduct.
By introducing the new code of conduct with a digital engagement approach, we are
now able to measure and better understand our supplier's awareness of the new
supplier code of conduct, which we see as a first step in building strong compliance.
Wallenius Wilhelmsen – Annual Report 2021
Prosperity
Tax practices
Contents →
How will we proceed?
In 2022, we plan to expand the scope of this KPI to a broader set of suppliers, and
further integrate sustainability considerations into procurement procedures, while
engaging our suppliers on a compliance and monitoring approach.
We will also conduct a risk assessment of human rights and labor conditions in
our supply chain. We aim to engage our suppliers on these important topics. We
will operationalize our new human rights policy into procurement procedures and
decisions.
5. Tax practices
Why is it important?
One of the most basic ways a responsible company contributes to general pros-
perity is by paying taxes. Wallenius Wilhelmsen is committed to being a responsible
corporate citizen, and that includes paying our fair share of taxes.
How do we work?
We have a dedicated tax department who ensures compliance with local require-
ments and practices, and transparency toward the tax authorities. The company
is also committed to adopting a justifiable and defendable tax position where
tax regulations are open to interpretation or choices. The tax position taken in all
significant transactions is supported by an external opinion. Corporate tax aairs
are the chief financial ocer's responsibility and extend to all jurisdictions where
the company operates.
How will we proceed?
We will follow developments and regulations regarding tax transparency and adjust
our reporting accordingly.
Key performance indicator actual target target
% of targeted suppliers to provide written acknowledgment
of Wallenius Wilhelmsen's supplier code of conduct
% % %
Main contents →
Wallenius Wilhelmsen – Annual Report 2021
Group
Consolidated income statement 94
Consolidated statement of comprehensive income 94
Consolidated balance sheet 95
Consolidated cash flow statement 96
Consolidated statement of changes in equity 97
Accounting policies 98
Note 1. Significant accounting judgments,
estimates and assumptions 113
Note 2. Segment reporting 116
Note 3. Operating expenses 121
Note 4. Employee benefits 122
Note 5. Other gain/loss 125
Note 6. Financial items 126
Note 7. Tax 127
Note 8. Goodwill, customer relations/contracts and
other intangible assets 130
Note 9. Vessels and other tangible assets 131
Note 10. Right-of-use assets 133
Note 11. Impairment on non-current assets 136
Note 12. Principal subsidiaries 139
Note 13. Subsidiaries with material non-controlling interest 141
Note 14. Share information and earnings per share 142
Note 15. Employee retirement plans 143
Note 16. Interest-bearing liabilities 145
Note 17. Financial risk 148
Note 18. Provisions and contingencies 159
Note 19. Specification of balance sheet 160
Note 20. Trade receivables and accounts payable 161
Note 21. Restricted bank deposits and undrawn
committed drawing rights 163
Note 22. Related party transactions 164
Note 23. Events after the balance sheet date 166
Reconciliation of alternative performance measures 167
Financial statements contents:
Parent
Income statement 172
Statement of comprehensive income 172
Balance sheet 173
Cash flow statement 174
Note 1. Specification of income statement 175
Note 2. Employee benefits 176
Note 3. Tax 179
Note 4. Investment in subsidiaries 180
Note 5. Equity 181
Note 6. Employee retirement obligations 183
Note 7. Interest-bearing debt 185
Note 8. Financial risk 186
Note 9. Specification of balance sheet 194
Note 10. Transactions with related party 195
Note 11. Events after the balance sheet date 196
Financial statements
Wallenius Wilhelmsen ASA Group
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Consolidated income statement
Financial statements contents → Main contents →
Consolidated income statement
Consolidated statement of comprehensive income
USD million Notes
Total revenue 3,884 2,958
Operating expenses (3,054 ) (2,484 )
Operating profit before depreciation, amortization and impairment (EBITDA) 830 473
Other gain/(loss) 21 (16 )
Depreciation and amortization , , (483 ) (451 )
(Impairment)/reversal of impairment (62 ) (90 )
Operating profit/(loss) (EBIT) 306 (84 )
Share of profit/(loss) from joint ventures and associates 1 1
Interest income and other financial items 95 34
Interest expenses and other financial expenses (203 ) (257 )
Financial items – net (108 ) (223 )
Profit/(loss) before tax 199 (306 )
Tax income/(expense) (23 ) 4
Profit/(loss) for the period 177 (302 )
Profit/(loss) for the period attributable to:
Owners of the parent 133 (286 )
Non-controlling interests 43 (16 )
Basic and diluted earnings per share (USD) 0.32 (0.68 )
USD million Notes
Profit/(loss) for the period 177 (302 )
Other comprehensive income/(loss):
Items that may be subsequently reclassified to the income statement
Currency translation adjustment (6 ) 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 22 -
Remeasurement pension liabilities, net of tax 3 (8 )
Other comprehensive income/(loss), net of tax 19 (1 )
Total comprehensive income/(loss) for the period 196 (303 )
Total comprehensive income/(loss) attributable to:
Owners of the parent 149 (288 )
Non-controlling interests 47 (15 )
Total comprehensive income/(loss) for the period 196 (303 )
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Consolidated balance sheet
Financial statements contents → Main contents →
Consolidated balance sheet
USD million Notes Dec , Dec ,
Assets
Non-current assets
Deferred tax assets 71 87
Goodwill and other intangible assets 455 571
Vessels and other tangible assets 4,033 4,175
Right-of-use assets 1,507 1,365
Other non-current assets 249 194
Total non-current assets 6,315 6,391
Current assets
Fuel/lube oil 147 79
Trade receivables 457 363
Other current assets 144 135
Cash and cash equivalents 710 654
Assets held for sale 21 5
Total current assets 1,479 1,237
Total assets 7,794 7,628
Equity and liabilities
Equity
Share capital 28 28
Retained earnings and other reserves 2,511 2,363
Total equity attributable to owners of the parent 2,539 2,391
Non-controlling interests 266 224
Total equity 2,804 2,615
Non-current liabilities
Pension liabilities 55 68
Deferred tax liabilities 82 84
Non-current interest-bearing debt 2,158 2,353
Non-current lease liabilities 1,218 1,176
Non-current provisions 16 59
Other non-current liabilities 68 179
Total non-current liabilities 3,596 3,919
Current liabilities
Trade payables 154 142
Current interest-bearing debt 515 378
Current lease liabilities 238 174
Current income tax liabilities 4 6
Current provisions 28 51
Other current liabilities 455 343
Total current liabilities 1,395 1,094
Total equity and liabilities 7,794 7,628
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Consolidated cash flow statement
Financial statements contents → Main contents →
Consolidated cash flow statement
USD million Notes
Cash flow from operating activities
Profit/(loss) before tax 199 (306 )
Financial (income)/expenses 108 223
Share of net (income)/loss from joint ventures and associates (1 ) (1 )
Depreciation and amortization , , 483 451
Impairment/(reversal of impairment) 62 90
(Gain)/loss on sale of tangible assets (0 ) 7
Change in net pension assets/liabilities (8 ) 2
Change in derivative financial assets (21 ) 16
Other change in working capital (173 ) 141
Tax (paid)/received (24 ) (9 )
Net cash flow provided by operating activities
Cash flow from investing activities
Dividend received from joint ventures and associates 0 -
Proceeds from sale of tangible assets 5 8
Investments in vessels, other tangible and intangible assets , (141 ) (135 )
Investments in joint ventures - (8 )
Investments in financial investments (7 ) -
Interest received 2 4
Net cash flow used in investing activities (140 ) (130 )
Cash flow from financing activities
Proceeds from issue of debt 474 557
Repayment of bank loans and bonds (531 ) (417 )
Repayment of lease liabilities (204 ) (181 )
Interest paid including interest derivatives (165 ) (166 )
Realized other derivatives 7 (19 )
Dividend to non-controlling interests (8 ) (3 )
Net cash flow used in financing activities (427 ) (229 )
Net increase in cash and cash equivalents 56 256
Cash and cash equivalents at beginning of period 654 398
Cash and cash equivalents at end of period
The group is located and operating world-wide and every entity has several bank accounts in dierent currencies.
Unrealized currency eects are included in net cash provided by operating activities.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Consolidated statement of changes in equity
Financial statements contents → Main contents →
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 , 28 (0 ) 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
Sale of own shares - 0 0 0 0 - 0
Change in non-controlling interests - - - (1 ) (1 ) 3 1
Dividend to non-controlling interests - - - - - (8 ) (8 )
Balance at December , 28 (0 ) 28 2,511 2,539 266 2,804
Balance at December , 28 (0 ) 28 2,650 2,678 243 2,921
Loss for the period - - - (286 ) (286 ) (16 ) (302 )
Other comprehensive income/(loss) - - - (2 ) (2 ) 0 (1 )
Total comprehensive income/(loss) - - - (288 ) (288 ) (15 ) (303 )
Sale of own shares - 0 0 0 0 - 0
Dividend to non-controlling interests - - - - - (3 ) (3 )
Balance at December , 28 (0 ) 28 2,363 2,391 224 2,615
As of December , , own shares represented .% of the share capital in nominal value.
As of December , , own shares represented .% of the share capital in nominal value.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Accounting policies
Financial statements contents → Main contents →
Accounting policies
General information and background
porated in Norway , and its shares are listed on the Oslo Stock Exchange. The parent
company's registered oce is at Strandveien 20 , Ly saker , Norway .
These consolidated financial statements consist of the parent company and its
subsidiaries (the group) and the group's interests in associated companies and
jointly controlled entities. The group's business is primarily made up of shipping
and logistics operations. The principal activities of the group are described in note
2 Segment information.
These consolidated financial statements were approved for issue by the board of
directors on March 22, 2022.
Basis of preparation
Statement of compliance
The consolidated financial statements have been prepared in accordance with the
International Financial Reporting Standards (IFRS), as adopted by the European
Union and additional disclosure requirements in the Norwegian Accounting Act
as eective December 31, 2021. The financial statements for the parent company
have been prepared and presented in accordance with simplified IFRS as stated
by § 3-9 of the Accounting Act and the Regulations on the Simplified Application
of International Accounting Standards established by the Norwegian Ministry of
Finance on 10 December 2019. In the parent company, the company has elected to
apply the exemption from IFRS for dividends and group contributions. Otherwise,
the accounting policies for the group are also adopted by the parent company.
Wallenius Wilhelmsen provides additional disclosures in accordance with require-
ments in the Norwegian Accounting Act related to remuneration to the board and
the management.
The consolidated financial statements are presented in US dollars (USD), rounded
to the nearest whole million unless otherwise stated. USD is the functional currency
of most entities in the group. The parent company is presented in its functional
currency USD.
Historical cost convention
The financial statements have been prepared under the historical cost convention
as modified by the revaluation of certain financial assets and liabilities (including
financial derivatives) at fair value either through the income statement or other
comprehensive income.
Preparing financial statements in conformity with IFRS and simplified IFRS requires
management to make use of estimates and assumptions which aect the appli-
cation of the accounting policies and the reported amounts of assets and liabilities,
revenues and expenses. Estimates and related judgments are based on historical
experience and other factors regarded as reasonable in the circumstances. The
actual result can vary from these estimates. The areas involving a higher degree
of judgment or complexity, or areas where assumptions and estimates are signifi-
cant to the consolidated financial statements are described in more detail in note 1.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Accounting policies
Financial statements contents → Main contents →
New and revised standards – adopted and not yet eective
None of the amendments to IFRSs or IFRIC interpretations implemented with eect
from January 1, 2021 have or are expected to have a material impact on the group
or the parent company's financial statements. At the date of the approval of these
financial statements, the group has not identified significant impact to the group
or the parent company's financial statements as a result of amendments eective
for 2022. The group has not yet fully assessed the impact of changes which are
eective for 2023 and beyond.
Principles of consolidation and equity accounting
The consolidated financial statements comprise the financial statements of Wallenius
Wilhelmsen ASA and its subsidiaries as at December 31, 2021.
Subsidiaries
Subsidiaries are all entities over which the group has control. The group controls
an entity where the group is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to aect those returns through its
power to direct the activities of the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the group. They are deconsolidated from
the date that control ceases.
The acquisition method is used by the group to account for business combinations.
Inter-company transactions, balances and unrealized gains on transactions between
group companies are eliminated. Unrealized losses are also eliminated unless
the transaction provides evidence of an impairment of the transferred asset.
Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the group.
Non-controlling interests in the results and equity of subsidiaries are presented
separately in the consolidated income statement, statement of comprehensive
income, statement of changes in equity and balance sheet, respectively.
Associates
Associates are all entities over which the group has significant influence but not
control or joint control. This is generally the case where the group holds between
20 per cent and 50 per cent of the voting rights. Investments in associates are
accounted for using the equity method.
Joint arrangements
Under IFRS 11 Joint Arrangements, investments in joint arrangements are classi-
fied as either joint operations or joint ventures. The classification depends on the
contractual rights and obligations of each investor, rather than the legal structure
of the joint arrangement. The group currently only has interests in joint ventures.
Interests in joint ventures are accounted for using the equity method.
Equity method
Under the equity method of accounting, the investments are initially recognized
at cost and adjusted thereafter to recognize the group's share of post-acquisition
profits or losses of the investee in profit or loss, and the group's share of movements
in other comprehensive income of the investee in other comprehensive income.
Dividends received or receivable from associates and joint ventures are recognized
as a reduction in the carrying amount of the investment.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Accounting policies
Financial statements contents → Main contents →
Where the group's share of losses in an equity-accounted investment equals or
exceeds its interest in the entity, including any other unsecured long-term receivables,
the group does not recognize further losses, unless it has incurred obligations or
made payments on behalf of the other entity.
Unrealized gains on transactions between the group and its associates and joint
ventures are eliminated to the extent of the group's interest in these entities. Unre-
alized losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of equity-accounted
investees have been changed where necessary to ensure consistency with the
policies adopted by the group.
Shares in subsidiaries, joint ventures and associates are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount
may exceed the recoverable amount of the investment. An impairment loss is
reversed if the impairment situation is deemed to no longer exist.
Changes in ownership interests
A change in ownership interest of a subsidiary that does not result in a loss of control
is a transaction with equity owners of the group and accounted for as an equity
transaction. A change in ownership interest results in an adjustment between the
carrying amounts of the controlling and non-controlling interests to reflect their
relative interests in the subsidiary.
When the group ceases to consolidate or equity account for an investment because
of a loss of control, joint control or significant influence, any retained interest in
the entity is remeasured to its fair value, with the change in the carrying amount
recognized in profit or loss. This fair value becomes the initial carrying amount for
the purposes of subsequently accounting for the retained interest as an associate,
joint venture or financial asset. In addition, any amounts previously recognized in
other comprehensive income in respect of that entity are accounted for as if the
group had directly disposed of the related assets or liabilities. This may mean that
amounts previously recognized in other comprehensive income are reclassified
to profit or loss.
If the ownership interest in a joint venture or an associate is reduced but joint control
or significant influence is retained, only the proportionate share of the amounts
previously recognized in other comprehensive income is reclassified to profit or loss.
Shares in subsidiaries, joint ventures and associates (parent company)
Shares in subsidiaries, joint ventures and associates are recognized according to
the cost method. Group contributions and dividends from subsidiaries are recog-
nized in the year in which it is proposed by the subsidiary to the extent the parent
company can control the decision of the subsidiary.
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Wallenius Wilhelmsen ASA Group
Accounting policies
Financial statements contents → Main contents →
Segment reporting
The group's operating segments are reported in a manner consistent with the
internal financial reporting provided to the chief operating decision-maker which
is the group's Chief Executive Ocer (CEO). Financial and operational information is
prepared for each segment, and the information disclosed is in line with the infor-
mation used by the CEO to assess performance and allocate resources.
The chief operating decision-maker is responsible for coordinating business and
management to optimize the use of knowhow and resources and to align decision-
making related to the implementation of the group's strategy.
Related party transactions
See note 22 to the group financial statements for related party transactions.
See note 4 to the group financial statements for remuneration of senior executives
in the group and note 2 to the parent company financial statements for information
related to loans and guarantees for employees in the parent company. Wallenius
Wilhelmsen also provides additional disclosures in accordance with requirements
in the Norwegian Accounting Act §7-31b related to remuneration to the board and
management. This information is included in the separate Remuneration Report
for 2021.
Foreign currency transaction and translation
Transactions
In individual companies, transactions in foreign currencies are initially recorded in
the functional currency by applying the rate of exchange as of the transaction date.
Monetary assets and liabilities denominated in foreign currencies are subsequently
translated into the respective functional currency by using the rate of exchange at
the balance sheet date. The realized and unrealized currency gains or losses are
included in financial income or expense.
Translation
In the consolidated financial statements, the assets and liabilities of non-USD
functional currency subsidiaries, joint ventures and associates, including related
goodwill, are translated into USD using the rate of exchange as of the balance sheet
date. The results and cash flows of non-USD functional currency subsidiaries, joint
ventures and associates are translated into USD using the average exchange rate
for the period reported (unless this average is not a reasonable approximation of
the cumulative eect of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the exchange rate on the dates of
the transactions).
Exchange rate adjustments arising when the opening net assets and the net income
for the year retained by non-USD operations are translated into USD, are recognized
in other comprehensive income. On disposal of a non-USD functional currency
subsidiary, joint venture or associate, the deferred cumulative amount recognized
in equity relating to that particular entity is recognized in the income statement.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Accounting policies
Financial statements contents → Main contents →
Business combinations
The acquisition method of accounting is used to account for all business combina-
tions, regardless of whether equity instruments or other assets are acquired. The
consideration transferred in a business combination is measured at fair value, which
is calculated as the sum of the acquisition-date fair values of assets transferred
by the Group, liabilities incurred by the Group to the former owners of the acquired
business and the equity interest issued by the Group in exchange for control of the
acquiree. Acquisition-related costs are recognized in profit or loss as incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a
business combination are, with limited exceptions, measured initially at their fair
values at the acquisition date. The group recognizes any non-controlling interest
in the acquired entity on an acquisition-by-acquisition basis either at fair value or
at the non-controlling interest's proportionate share of the acquired entity's net
identifiable assets.
The excess of the
•
consideration transferred,
•
amount of any non-controlling interest in the acquired entity, and
•
acquisition-date fair value of any previous equity interest in the
acquired entity
over the fair value of the net identifiable assets acquired is recognized as goodwill.
If after reassessment, those amounts are less than the fair value of the net identifi-
able assets of the business acquired, the dierence is recognized directly in profit
and loss as a bargain purchase gain.
Contingent consideration is classified either as equity or a financial liability
and initially measured at its acquisition-date fair value. Amounts classified as a
financial liability are subsequently remeasured to fair value with changes in fair
value recognized in profit and loss.
If a business combination is achieved in stages, the acquisition-date carrying value
of the acquirer's previously held equity interest in the acquiree is remeasured to
fair value. Any gains or losses arising from such remeasurement are recognized
in profit and loss.
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Wallenius Wilhelmsen ASA Group
Accounting policies
Financial statements contents → Main contents →
Revenue recognition
The group recognizes revenue from the following major sources:
•
Time charter revenue (freight revenue)
•
Voyage charter revenue (freight revenue)
•
Land-based revenue
Revenue is measured based on the consideration to which the group expects to be
entitled in a contract with a customer and excludes amounts collected on behalf of
third parties. The group recognizes revenue when it transfers control of a product
or service to a customer.
The group bases its estimates on historical results, taking into consideration the
type of customer, the type of transaction and the specifics of each arrangement.
The accounting policies for the group's main types of revenue are set out below:
Time charter revenue
Revenue from time charters is accounted for in accordance with lessor accounting
requirements in IFRS 16. Time charter agreements are recognized in the balance
sheet, with the exception of lease agreements with a lessor lease term of less than
70 per cent of either the estimated useful life of the asset (owned) or initial lease-in
lease term. When time charters are accounted for in the balance sheet as a lease
receivable, the group recognizes finance income over the lease term, based on a
pattern reflecting a constant periodic rate of return on the group's net investment
in the lease. The service component implicit in the agreement is recognized sepa-
rately as operating revenue.
When the lease term is less than 70 per cent of either the estimated useful life of
the asset (owned) or initial lease-in lease term, the revenue is recognized on a
straight-line basis over the lease term as the service is performed.
Agreements with a duration of less than 12 months are recognized applying the
exemption in IFRS 16 related to short-term leases. In applying the exemption, revenue
is recognized on straight-line basis over the lease term as the service is performed.
Revenues are adjusted for o-hire days as applicable.
Voyage charter revenue
Voyage charter revenue is recognized in accordance with IFRS 15 by estimating
the total income for a vessel on a round trip. The voyage charter revenue is recog-
nized over time on the basis of progress on fulfillment. The measure of progress
is the number of days incurred compared to estimated total days for the applica-
ble voyage. When recognizing revenue from voyage charters the group applies
the practical expedient defined by the standard enabling the group to account for
several contracts with similar characteristics as a portfolio, since combining the
contracts does not produce a materially dierent outcome than accounting for the
contracts individually.
Land-based logistics service revenue
Land-based logistics services are recognized in accordance with IFRS 15 in the
accounting period in which the services have been rendered.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Accounting policies
Financial statements contents → Main contents →
Tangible assets
Vessels and other tangible assets acquired by group companies are initially recog-
nized at cost. Depreciation is calculated on a straight-line basis. A residual value,
which reduces the depreciation base, is estimated for vessels. The estimate is based
on a 10 year average rolling demolition price for general cargo vessels. In addition,
a charge for green ship recycling is deducted. The calculation is performed on an
annual basis.
The carrying value of tangible assets equals the historical cost less accumulated
depreciation and any impairment charges.
The group capitalizes loan costs related to the construction of new vessels on the
basis of the group's average borrowing rate on interest-bearing debt. Shipbuilder
installments paid, other direct vessel costs and the group's interest costs related
to financing the acquisition of vessels are capitalized as they are paid.
Tangible assets are depreciated over the following estimated useful lives:
Vessels 27-30 years
Property 30-50 years
Land no depreciation
Other tangible assets 3-10 years
Each component of a tangible asset which is significant for the total cost of the
item and for which the estimated useful life is dierent will be depreciated sepa-
rately. Components with similar estimated useful lives will be included in a single
component.
An analysis of the group's fleet concluded that vessels based on a pure car truck
carrier/roll-on roll-o design do not need to be separated into dierent compo-
nents since there is no significant dierence in the estimated useful life for the
various components of these vessels over and above docking costs. Costs related
to docking and periodic maintenance will normally be depreciated over the period
until the next docking.
The estimated residual value and useful life and depreciation method of tangible
fixed assets are reviewed at each balance sheet date. The eect of any changes in
estimate is accounted for on a prospective basis.
Goodwill and other intangible assets
Amortization of intangible assets is based on the following estimated useful lives:
Goodwill Indefinite
Customer relations/contracts 3-10 years
Other intangible assets 3-10 years
Goodwill
Goodwill represents the excess of the consideration transferred, the amount of any
non-controlling interests in the acquiree and the acquisition date fair value of any
previous equity interests in the acquiree (if any) over the fair value of the group's share
of the identifiable net assets of the acquired subsidiary, joint venture or associate.
Goodwill arising from the acquisition of subsidiaries is classified as an intangible
asset. Goodwill arising from the acquisition of an interest in a joint venture or an
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Wallenius Wilhelmsen ASA Group
Accounting policies
Financial statements contents → Main contents →
associated company is included in the carrying amount of the investment and
tested for impairment as a single asset.
Goodwill from acquisition of subsidiaries is tested for impairment at least annually
and carried at cost less impairment losses. Impairment losses on goodwill are not
reversed. A gain or loss on disposal of a business or part of a business includes
the attributable amount of goodwill.
Customer relations and contracts
Identifiable customer relationships and other contractual arrangements acquired
as part of business combinations are initially recognized at fair value (which is
regarded as their cost) when the asset arises from contractual or other legal rights
or the relationships are separable, and it is probable that the future economic bene-
fits that are attributable to the asset will flow to the entity.
Subsequent to initial recognition, customer relations and contracts are amortized
over their estimated useful lives in accordance with the straight-line method.
Other intangible assets
Port use rights acquired through business combinations are recognized as an
intangible asset. The amount is initially estimated based on the discounted value
of the dierential cash flow for the future port use right period.
The dierential cash flow is calculated based on the dierence between the esti-
mated rental payments based on market terms and the rental payments under
the contractual port use right arrangement. The port use right intangible asset is
amortized using the unit of production method.
Development costs that are directly attributable to the design and testing of identi-
fiable and unique software products controlled by the group are recognized as
intangible assets when the following criteria are met:
•
it is technically feasible to complete the software product so that it will
be available for use;
•
management intends to complete the software product and use or sell it;
•
it can be demonstrated how the software product will generate probable
future economic benefits;
•
adequate technical, financial and other resources to complete the
development and to use or sell the software product are available; and
•
the expenditure attributable to the software product during its
development can be reliably measured.
Capitalized expenses related to software assets are amortized over their estimated
useful lives in accordance with the straight-line method.
Costs associated with maintaining computer software are recognized as an expense
as incurred.
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Wallenius Wilhelmsen ASA Group
Accounting policies
Financial statements contents → Main contents →
Impairment of goodwill and other non-financial assets
At each reporting date the group reviews the carrying amounts of its goodwill,
intangible assets, vessels and other tangible assets and right-of-use assets to
determine whether there is any indication of impairment.
If any indication of impairment exists, or when annual impairment testing for an
asset is required (goodwill), the asset's recoverable amount is estimated. Where
the asset does not generate cash flows that are independent from other assets,
the group estimates the recoverable amount of the cash-generating unit (CGU) to
which the asset belongs. A CGU is the smallest identifiable group of assets that
generates cash inflows that are largely independent of the cash inflows from other
assets or groups of assets.
The recoverable amount is the highest of the fair value less costs of disposal, and
value in use. In assessing value in use, the net present value (NPV) of future esti-
mated cash flows from the employment of the asset is determined. The discount
rate applied is the weighted average cost of capital (“WACC”) reflecting the required
rate of return of the asset or CGU. If the recoverable amount is estimated to be less
than the carrying amount, the carrying amount of the asset (or CGU) is reduced to
its recoverable amount. Impairment losses are recognized in the income statement.
Where an impairment loss subsequently reverses, the carrying amount of the asset
(or CGU) is increased to the revised estimate of its recoverable amount, but so that
the increased carrying amount does not exceed the carrying amount that would
have been determined had no impairment loss been recognized in prior years.
An impairment loss for goodwill is not subsequently reversed.
Vessels and newbuilding contracts
Estimated future cash flows are based on an assessment of the group's expected
time charter earnings and estimated level of operating expenses for each type of
vessel over the remaining useful life of the vessel. Vessels are organized and oper-
ated as a fleet and evaluated for impairment on the basis that the whole fleet is
the relevant CGU. The vessels are trading in a global network as part of the fleet,
where the income of a specific vessel is dependent upon the total fleet, and not
the individual vessel's earnings. Furthermore, the group's vessels are interchange-
able among the operating companies and part of a coordinated fleet management
structure in place to optimize operations (long term chartering activities, vessel
swaps, space chartering, combined schedules etc.).
Goodwill
Goodwill acquired through business combinations has for the purpose of impair-
ment testing been allocated to the relevant CGU or group of CGUs expected to
benefit from the business combination. CGUs to which goodwill has been allocated
are tested for impairment annually, or more frequently when there is an indication
that the unit may be impaired.
If the recoverable amount of the CGU (or CGUs) to which goodwill has been allocated
is less than the carrying amount, the impairment loss is allocated first to reduce
the carrying amount of any goodwill and then to the other assets, pro-rata on the
basis of the carrying amount of each asset in the CGU (or CGUs).
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Accounting policies
Financial statements contents → Main contents →
Leases
The group's leased assets primarily consist of vessels and land. In addition, the
group leases oce space and various equipment.
Identifying a lease
At the inception of a contract, the group assesses whether the contract is,
or contains, a lease. A contract is, or contains, a lease if the contract conveys the
right to control the use of an identified asset for a period of time in exchange for
consideration. To determine whether a contract conveys the right to control the
use of an identified asset, the group assesses whether:
•
The agreement creates enforceable rights of payment and obligations
•
The identified asset is physically distinct
•
It has the right to obtain substantially all of the economic benefits from
use of the asset
•
It has the right to direct the use of the asset
•
The supplier does not have a substantive right to substitute the asset
throughout the period of use
Separating components in the lease contract
For contracts that constitute, or contain a lease, the group separates lease compo-
nents if it benefits from the use of each underlying asset either on its own or
together with other resources that are readily available, and the underlying asset
is neither highly dependent on, nor highly interrelated with, the other underlying
assets in the contract. The group then accounts for each lease component within
the contract as a lease separately from non-lease components of the contract. The
group allocates the consideration in the contract to each lease component on the
basis of the relative stand-alone price of the lease component and the aggregate
stand-alone price of the non-lease components. If an observable stand-alone
price is not readily available, the group estimates this price by maximizing the use
of observable information.
Recognition and measurement of leases
At the lease commencement date, the group recognizes a lease liability and a
corresponding right-of-use asset for all lease agreements in which it is the lessee.
The following policy choices and practical expedients have been applied by the group:
•
The standard will not be applied to leases of intangible assets, and these
will continue to be recognized in accordance with IAS 38 Intangible assets.
•
All leases deemed to be short-term (<12 months) are recognized as an
operating expense on a straight-line basis over the term of the lease.
•
All leases deemed to be of low value are recognized as an operating
expense on a straight-line basis over the term of the lease. This mainly
relates to oce equipment and company cars.
•
Non-lease components are separated from the lease component in all
vessel leases. For other lease agreements, the group will apply a materiality
threshold when evaluating separation.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Accounting policies
Financial statements contents → Main contents →
Measuring the lease liability
The lease liability is initially measured at the present value of the lease payments
for the right to use the underlying asset during the lease term that are not paid at
the commencement date. The lease term represents the non-cancellable period of
the lease, together with periods covered by an option to extend the lease when the
group is reasonably certain to exercise this option, and periods covered by an option
to terminate the lease if the group is reasonably certain not to exercise that option.
The lease payments included in the measurement of the lease liability comprise:
•
Fixed lease payments less any lease incentives receivable
•
Variable lease payments that depend on an index or a rate, initially
measured using the index or rate as at the commencement date
•
Amount expected to be payable by the group under residual value guarantees
•
The exercise price of a purchase option, if the group is reasonably certain
to exercise that option
•
Payments of penalties for terminating the lease, if the lease term reflects
the group exercising an option to terminate the lease.
The group does not include variable lease payments in the lease liability arising from
contracted index regulations subject to future events, such as inflation. The lease
liability is subsequently measured by increasing the carrying amount to reflect interest
on the lease liability, reducing the carrying amount to reflect the lease payments
made and remeasuring the carrying amount to reflect any reassessment or lease
modifications, or to reflect adjustments in lease payments due to an adjustment
in an index or rate. The group presents its lease liabilities as separate line items in
the balance sheet reflecting the non-current and current portions of the liability.
Measuring the right-of-use asset
The right-of-use asset is initially measured at cost. The cost of the right-of-use
asset comprises:
•
The amount of the initial measurement of the lease liability
•
Any lease payments made at or before the commencement date,
less any lease incentives received
•
Any initial direct costs incurred by the group
•
An estimate of costs to be incurred by the group in dismantling and removing
the underlying asset, restoring the site on which it is located or restoring the
underlying asset to the condition required by the terms and conditions of the
lease, unless those costs are incurred to produce inventories
The right-of-use asset is subsequently measured at cost less accumulated depre
-
ciation and impairment losses. The group applies the depreciation requirements in
IAS 16 Property, Plant and Equipment in depreciating the right-of-use asset, except
that the right-of-use asset is depreciated from the commencement date over the
shorter of the lease term and the remaining useful life of the right-of-use asset.
The group applies IAS 36 Impairment of Assets to determine whether the right-of-
use asset is impaired and to account for any impairment loss identified.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Accounting policies
Financial statements contents → Main contents →
Financial assets
The group classifies financial assets based on the business model in which they
are managed and their contractual cash flows. The principal categories of financial
assets are amortized cost and fair value through either profit or loss (FVPL) or other
comprehensive income (FVOCI).
Management determines the classification of financial assets at their initial recog-
nition.
Financial assets carried at fair value through profit or loss are initially measured at
fair value with transaction costs recognized immediately in the income statement.
Subsequent changes in fair value are recognized in profit or loss.
Where the group has made an irrevocable decision to designate an investment at
fair value through other comprehensive income, the investment is initially measured
at fair value plus transaction costs. Subsequent changes in fair value are recog-
nized in other comprehensive income. Cumulative gains or losses are not recycled
through profit or loss on disposal of the investment.
Receivables and other financial assets
Non-derivative financial assets, such as receivables other than trade receivables,
are assets with fixed or determinable payments. They are classified as current
assets, except for assets with a maturity later than 12 months after the balance
sheet date, which are classified as non-current assets. Non-derivative financial
assets are classified as Other current assets or Other non-current assets in the
balance sheet. Non-derivative financial assets are recognized initially at their fair
value plus transaction costs and subsequently measured at amortized cost.
Financial assets are derecognized when the contractual rights to the cash flows
from the financial assets expire or are transferred, and the group has transferred
by and large all risk and return from the financial asset.
Realized gains and losses are recognized in the income statement in the period
they arise.
Trade receivables
Trade receivables are amounts due from customers for services performed in the
ordinary course of business. They are generally due for settlement within 30 days
and are therefore all classified as current. Trade receivables are recognized initially
at the amount of consideration that is unconditional, unless they contain significant
financing components, in which case they are recognized at fair value. The group
holds the trade receivables with the objective of collecting the contractual cash
flows and trade receivables are therefore measured subsequently at amortized
cost using the eective interest method. The group applies the IFRS 9 simplified
approach to measuring expected credit losses, which uses a lifetime expected loss
allowance for all trade receivables and contract assets.
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Wallenius Wilhelmsen ASA Group
Accounting policies
Financial statements contents → Main contents →
Derivative financial instruments
The group enters into a variety of derivative financial instruments to manage its
exposure to interest rate and foreign exchange rate risks.
Derivative financial instruments are included in current assets or current liabilities,
except for those with a maturity later than 12 months after the balance sheet date.
These are classified as non-current assets or other non-current liabilities.
Derivative financial instruments are recognized at fair value on the date a deriv-
ative contract is entered into and subsequently remeasured to their fair value at
each reporting date.
Contracts for derivative financial instruments are entered into for hedging purposes,
but the group has elected not to document the hedge relationship and can therefore
not apply hedge accounting. Changes in the fair value of derivative instruments are
thus recognized immediately in the income statement as financial income/expense.
Put and call options for non-controlling interest
Non-controlling interests containing a symmetrical put and call option held by the
non-controlling interest shareholder and the group respectively, is recognized as
one integrated derivative financial instrument. The derivative financial instrument
is recognized as a non-current asset when the options are exercisable, and the fair
value of the non-controlling interest exceeds the value of the exercise price for the
symmetrical put and call option. Changes in fair value of the derivative financial
instrument is recognized as Other gain/(loss) in the income statement.
Put options held by non-controlling interest shareholders are recognized as a
financial liability reflecting the present value of the redemption amount as other
non-current (interest-bearing) liabilities with a corresponding entry reducing equity
through retained earnings and other reserves. All subsequent changes to the liability
are recognized in profit or loss. In the event that the option expires unexercised, the
liability will be derecognized with a corresponding adjustment to equity.
Interest-bearing debt
Interest-bearing debt is recognized at fair value when the proceeds are received,
net of transaction costs. In subsequent periods, loans are measured at amortized
cost using the eective interest method. Any dierence between proceeds (net of
transaction costs) and the redemption value is recognized in the income statement
over the term of the loan.
Interest-bearing debt is classified as current liabilities unless the group or the
parent company has an unconditional right to defer settlement of the liability for
at least 12 months after the balance sheet date.
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Wallenius Wilhelmsen ASA Group
Accounting policies
Financial statements contents → Main contents →
Deferred tax assets and liabilities
Deferred tax is calculated using the liability method on all temporary dierences
arising between the tax bases of assets and liabilities and their carrying amounts
in the consolidated financial statements. Deferred income tax is determined using
the tax rates and laws which have been enacted or substantively enacted at the
balance sheet date and are expected to apply when the related deferred income
tax asset is realized, or the deferred income tax liability settled.
Deferred tax assets are recognized to the extent that it is probable that taxable profits
will be available against which deductible temporary dierences can be utilized.
Deferred income tax is calculated on temporary dierences arising on investments
in subsidiaries and associates, except where the timing of the reversal of the tempo-
rary dierence is controlled by the group.
For group companies subject to tonnage tax regimes, the tonnage tax is recog-
nized as an operating cost.
Employee compensation
Pension obligations
Group companies have various pension schemes, and the employees are covered
by pension plans which comply with local laws and regulations. The group and the
parent company have both defined contribution and defined benefit plans.
Defined contribution plans require the group and the parent company to pay
contributions to publicly or privately administered pension insurance plans on
an obligatory, contractual or voluntary basis. The group and the parent company
have no further legal or constructive payment obligations once the contributions
have been paid. The contributions are recognized as a payroll expense when they
fall due. Prepaid contributions are recognized as an asset to the extent that a cash
refund or a reduction in the future payments is available.
A defined benefit plan is one which is not a defined contribution plan. This type
of plan typically defines an amount of pension benefit an employee will receive
on retirement, normally dependent on one or more factors such as age, years of
service and level of wages and salaries.
The liability recognized in the balance sheet in respect of 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 obligation is calculated
annually by independent actuaries using the projected unit credit method. The
present value of the defined benefit obligation is determined 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.
Remeasurements of the pension liability for the defined benefit pension plan
arising from experience adjustments and changes in the actuarial assumptions
are recognized in other comprehensive income. Past service costs are recognized
immediately in the income statement.
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Wallenius Wilhelmsen ASA Group
Accounting policies
Financial statements contents → Main contents →
Share-based compensation
The group has long-term incentive plans for senior executives. These are bonus
schemes where monetary awards are delivered in an equivalent number of listed
Wallenius Wilhelmsen ASA shares to the extent that performance conditions have
been met over a defined period of time. The bonus is assessed over and becomes
payable after three years, subject to continued employment and the achievement of
financial and strategic long-term performance targets, including return on capital,
market capitalization and a discretionary element. The most recent plan also
includes a sustainability target.
The group may also oer employees an opportunity to purchase shares in Wallenius
Wilhelmsen ASA at a reduced price. The related cost is recognized when the employee
exercises this option.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks,
other current highly liquid investments with original maturities of three months or
less, and bank overdrafts. Bank overdrafts are presented as borrowings in current
liabilities on the balance sheet.
Dividend in the group financial statements
Dividend payments to the parent company's shareholders are recognized as a liabil-
ity in the group's financial statements from the date when the dividend is approved
by the general meeting.
Dividend and group contribution in the parent company
financial statements
Proposed dividend payments to the parent company's shareholders are presented
in the parent company financial statements as a liability as at December 31, in the
current year. Group contributions received from subsidiaries are recognized as
financial income and current assets in the financial statement at December 31, in
the current year.
Fuel/lube oil
Fuel is valued at the lower of cost and net realizable value. Lube oil represents the
lubrication oil held on board the vessels.
Provisions
The group and the parent company recognize provisions for legal claims when a
legal or constructive obligation exists as a result of past events, it is more likely
than not that an outflow of resources will be required to settle the obligation, and
the amount can be estimated with a sucient degree of reliability.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 1. Significant accounting judgments, estimates and assumptions
Financial statements contents → Main contents →
Note 1. Significant accounting judgments,
estimates and assumptions
The preparation of the group's consolidated financial statements requires manage-
ment to make judgments, estimates and assumptions that aect the reported
amounts of revenues, expenses, assets and liabilities, and the accompanying disclo-
sures, and the disclosure of contingent liabilities. The assumptions, estimates and
judgments are based on historical experience, current trends and other factors that
management believes to be relevant at the time the consolidated financial state-
ments are prepared. This includes risks related to the continued impact of Covid-19.
Actual results may dier from these estimates. Uncertainty about these assump-
tions and estimates could result in outcomes that require a material adjustment
to the carrying amount of assets or liabilities aected in future periods.
Wallenius Wilhelmsen faces significant risks as a result of climate change, and
climate-related factors may impact estimates and assumptions going forward.
Uncertainties and risks relate to both transition risk (market-related changes, regu-
latory requirements and technology) and physical risk (extreme weather) and may
aect management's estimates and judgments in a number of areas. More detailed
information on climate risk facing the group can be found in the chapter on Planet.
Key sources of estimation uncertainty and assumptions
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial
year, are described below.
Vessels and other tangible assets
The group has significant carrying amounts related to vessels and other tangible
assets recognized in the consolidated balance sheet. The value in use of some of
these assets could be influenced by changes in market conditions. Vessels consti-
tute the main asset group in the balance sheet and any changes to the value in
use of these vessels may render significant impairment losses recognized in the
income statement. A reduction in the estimated useful life of the assets can also
lead to periods with higher depreciation expense going forward. Climate-related
factors may in the future impact the estimated useful life of vessels and make
them commercially and technologically obsolete earlier than previously expected
(stranded assets). Consequently, the expected timing of replacement of existing
assets may be accelerated.
As there are no significant impairment indicators as at December 31, 2021, the
group has not carried out impairment tests for vessels as of this date. Vessel
market values (broker estimates) have increased, particularly in the fourth quarter,
following the improved market conditions and a tightening tonnage market, and
exceed carrying values on a fleet level. The carrying amount of vessels, other tangible
assets and leased assets at December 31, 2021 is USD 5,540 million. See notes 9
and 10 for further details.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 1. Significant accounting judgments, estimates and assumptions
Financial statements contents → Main contents →
Goodwill and other intangible assets
Determining whether goodwill and other intangible assets are impaired requires
an estimation of the value in use of the cash generating units to which goodwill and
other intangible assets have been allocated. The value in use calculation requires
management to estimate the future cash flows expected to arise from the cash
generating unit and a suitable discount rate in order to calculate present value.
Uncertainties and risk in relation to climate, both transition risk and physical risk,
may have an impact on management's estimates of future cash flows.
The carrying value of goodwill, customer relations/contracts and other intangible
assets at December 31, 2021 is USD 230 million, USD 196 million, and USD 29 million,
respectively. In 2021, USD 76 million goodwill impairments were recognized in the
shipping segment based on updated long-term forecasts including expected
required investments such as replacement of capacity in coming years.
Further information on recognized goodwill and intangible assets are provided in
note 8. The impairment information and sensitivities are provided in note 11.
Anti-trust provision
In arriving at the estimated costs for anti-trust proceedings taking into consideration
the possibility for civil claims, management makes a number of critical assump-
tions aecting the estimates. The judgments are made in conjunction with external
legal counsel based on amongst other status of the outstanding proceedings as
well as the possibility for civil claims. USD 44 million is the remaining provision as of
December 31, 2021. Further details on the anti-trust provision are provided in note 18.
Tax assets
The group recognizes deferred tax assets if it is probable that taxable income will
be available in the future against which the unused tax losses can be utilized. At
December 31, 2021, the group has estimated that sucient future taxable income
in the Norwegian entities would not be generated to recognize deferred tax assets
related to tax losses carried forward. As a result of this estimate, the group has
calculated an additional valuation allowance of USD 30 million related to the deferred
tax asset arising from tax losses carried forward in the Norwegian entities, giving
a total valuation allowance in the balance sheet of USD 103 million related to tax
losses carried forward. The estimate of future taxable income is based on signif-
icant judgment related to future development in taxable income for Norwegian
entities. The carrying amount of deferred tax assets at December 31, 2021 is USD
71 million of which USD 2 million relates to tax losses carried forward. See note 7
for more information.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 1. Significant accounting judgments, estimates and assumptions
Financial statements contents → Main contents →
Critical judgments in applying accounting policies
Financial instruments
A non-controlling shareholder holds a put option for their 20 per cent shareholding
in EUKOR through a shareholder agreement entered into in 2002. The shareholder
agreement also contains a symmetrical call option held by the group. The manage
-
ment has evaluated this to be a symmetrical put and call option held by the non-
controlling interest shareholder and the group, respectively, and it is recognized as
one integrated derivative financial instrument. The derivative financial instrument
is recognized as a non-current asset when the options are exercisable, and the fair
value of the non-controlling interest exceeds the value of the exercise price for the
symmetrical put and call option. Changes in fair value of the derivative financial
instrument is recognized as Other gain/(loss) in the income statement. In 2021 a
gain of USD 21 million was recognized related to this derivative. As of December
31, 2021, the estimated fair value of the derivative financial instrument is USD 152
million. See note 5 for more information.
Leases
The group cannot always determine the interest rate implicit in the lease, therefore,
it uses its incremental borrowing rate to measure lease liabilities. The incremental
borrowing rate reflects what the group ‘would have to pay’, which requires estima-
tion when no observable rates are available (such as for subsidiaries that do not
enter into financing transactions) or when the rates need to be adjusted to reflect
the term and currency of the lease. In determining the lease term, management
considers all facts and circumstances that create an economic incentive to exer-
cise an extension option, or not exercise a termination option. Extension options (or
periods after termination options) are only included in the lease term if the lease is
reasonably certain to be extended (or not terminated). The assessment is reviewed
if a significant event or a significant change in circumstances occurs which aects
this assessment and that is within the control of the group. The carrying amount of
leased assets (right-of-use assets) at December 31, 2021 is USD 1,507 million. See
note 10 for more information.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 2. Segment reporting
Financial statements contents → Main contents →
Note 2. Segment reporting
The group's operating segments, which are the same as the group's reporting
segments, are the key components of the group's business which are assessed,
monitored and managed on a regular basis by the Chief Executive Ocer (CEO).
Wallenius Wilhelmsen reorganized its operations with eect from January 1, 2021.
This impacted the information reported to the CEO and the board of directors
and management have identified three reporting segments based on the current
organization of activities. The reporting segments now comprise:
•
Shipping services
•
Logistics services
•
Government services
Prior year figures have been restated to reflect the current reporting segments for
comparative purposes. The organization of activities and reporting segments are
continuously being assessed and remains subject to future changes.
The activity in government services was previously mainly recognized in the ocean
segment, but also partly in landbased. This activity has now been separated out
primarily due to separate monitoring by the CEO, in addition to its nature in being
a service provider to the governmental sector. Comparative figures have been
restated accordingly.
Shipping services
The shipping services segment is engaged in ocean transport of cars and RoRo
cargo. Its main customers are global car manufacturers as well as manufacturers
of construction and other high and heavy equipment, in addition toselect indus-
trialbreak-bulk cargo. The customers' cargo is carried in a worldwide transport
network. This is the group's most capital-intensive segment. The revenue is gener-
ated from transporting these products and varies with voyage routes. The total
vessel capacity is balanced by time charter, both in and out. The shipping services
segment's margin is highly influenced by fuel prices. FAF (fuel adjustment factor)
is a main mechanism to manage fuel oil price risk in the segment and the main
contributor to fuel surcharges revenue. However, the segment has a short-term
exposure to the fuel prices since FAF is calculated based on the average fuel price
over a historical period and then fixed during an application period, creating a lag
eect. As such, in periods of rising fuel prices the segment will not be able to recoup
the higher prices through the FAF. Conversely, in periods of falling fuel prices the
segment will benefit from higher FAF. In the shipping services segment, contract
duration is normally one to five years, with some 20-30 per cent of contracts being
renewed annually. Fixed prices are usually applied, with review for CPI development
or other applicable index for contracts exceeding three years. FAF adjustments
are reflected in most contracts and represent a variable pricing element. In some
contracts, the group is guaranteed a fixed percentage of a customer's volume, but
mostly there are no defined minimum volumes.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 2. Segment reporting
Financial statements contents → Main contents →
Logistics services
The logistics segment has mainly the same customer groups as shipping services.
Customers operating globally are oered sophisticated logistics services, such
as vehicle processing centers, equipment processing centers, inland distribution
networks and terminals. The segment's primary assets are human capital (exper-
tise and systems) and customer contacts reflected in long-term relationships.
In the logistics services segment, contract duration is normally one to five years,
with some 20-30 per cent of contracts being renewed annually. Pricing is usually
fixed, and volumes may vary depending on customer output.
Government services
The government services segment provides ocean transport of RoRo cargo, break-
bulk and vehicles. The segment also performs logistics services primarily related
to multimodal transportation, stevedoring and terminal operations. The primary
customer is the U.S. government, but the segment also includes commercial cargos
such as those generated by the financial sponsorship of a federal program or a
guarantee provided by the U.S. Government. In the government services segment,
contract duration can vary between less than one year and as long as ten years.
Segment revenue and EBITDA is primarily driven by government activities which
are in part driven by world events and government objectives, and does not neces-
sarily follow regular seasonal patterns.
Holding/eliminations
Remaining group activities are shown in the “holding/eliminations” column. The
holding segment includes the parent company, and other minoractivities (including
corporate group activities like operational management, tax and finance) which
fail to meet the definition for other core activities. Eliminations are transactions
between the group's three segments mentioned above.
Accounting policies
The accounting policies of the reporting segments are the same as the group's
accounting policies.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 2. Segment reporting
Financial statements contents → Main contents →
In 2021, revenue of approximately USD 226 million and USD 189 million (2020: USD
194 million and USD 153 million respectively) related to the group's shipping segment
originated from two external customers.
In 2021, revenue of approximately USD 118 million (2020: USD 113 million) in the logistics
segment originated from one external customer.
Shipping
services
Logistics
services
Government
services
Holding/
eliminations Total
USD million
Net freight revenue , , - - - - , ,
Fuel surcharges - - - -
Operating revenue - -
Internal operating revenue () () - -
Total revenue , , () () , ,
Cargo expenses () () - - () () () ()
Fuel () () - - () () - - () ()
Other voyage expenses () () - - () () - - () ()
Ship operating expenses () () - - () () - - () ()
Charter expenses () () - - () () () ()
Manufacturing cost - - () () () () () ()
Other operating expenses
() () () () () () - () ()
Selling, general and admin expenses () () () () () () () () () ()
Total operating expenses (,) (,) () () () () (,) (,)
Operating profit/(loss) before
depreciation, amortization and
impairment (EBITDA) ()
Other gain/(loss) () - - - - - - ()
Depreciation () () () () () () - - () ()
Amortization () () () () () () - - () ()
(Impairment)/reversal of
impairment () () () () () - - () ()
Operating profit/(loss) (EBIT)
() () () ()
Share of profit/(loss) from joint ventures
and associates - - - - - -
Financial income/(expense) () () () () () () () () ()
Profit/(loss) before tax () () () () () () ()
Tax income/(expense) () () () () ()
Profit/(loss) for the period () () () () () () ()
Profit for the period attributable to:
Owners of the parent () () () () () () ()
Non-controlling interests () - - - - ()
Sale of a vessel from shipping to government services segment resulted in a USD million loss in the shipping segment included in
Other operating expenses. This amount is eliminated on group level.
Cash settled portion of fuel hedge swaps is included in net operating profit by reduction/(increase) of voyage related expenses.
Income statement
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 2. Segment reporting
Financial statements contents → Main contents →
Shipping
services
Logistics
services
Government
services
Holding/
eliminations Total
USD million
Dec ,
Dec ,
Dec ,
Dec ,
Dec ,
Dec ,
Dec ,
Dec ,
Dec ,
Dec ,
Deferred tax asset () ()
Goodwill and other intangible assets - -
Vessels and other tangible assets , , - - , ,
Right-of-use assets , - - , ,
Other non-current assets () ()
Other current assets () ()
Cash and cash equivalents
Assets held for sale - - - - - -
Total assets , , , , () () , ,
Equity controlling interests , , () () , ,
Equity non-controlling interests - - - -
Deferred tax - -
Interest-bearing debt , , , ,
Lease liabilities , - - , ,
Other non-current liabilities
Other current liabilities () ()
Total equity and liabilities , , , , () () , ,
Investments in tangible assets
() -
Government services purchased a vessel from the shipping segment for USD 54 million. This amount is eliminated on group level.
Balance sheet
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 2. Segment reporting
Financial statements contents → Main contents →
Geographical segments
Shipping services and government services segments
Assets in the shipping and government services segment, which are comprised
mainly of vessels, operate internationally, with individual vessels calling at various
ports across the globe. The group does not consider the domicile of its customers
as a relevant decision-making guideline and hence does not consider it meaningful
to allocate vessels and income to specific geographical locations. This is therefore
allocated under the “shipping and government services” geographical area.
Total revenue
Area revenue is based on the geographical location of the company.
Total assets
Area assets are based on the geographical location of the assets.
Investments in tangible assets
Area capital expenditure is based on the geographical location of the assets.
Europe
Americas Asia & Africa
Elimination
Total
landbased &
holding
Shipping and
government
services Elimination Total
USD million
Total revenue - - , , () () , ,
Total assets - - , , , , () () , ,
Investment
in tangible
assets - - () -
Europe includes Russia and the holding segment.
Asia & Africa includes Oceania.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 3. Operating expenses
Financial statements contents → Main contents →
Note 3. Operating expenses
USD million Notes
Voyage expenses
Stevedoring – loading/discharging () ()
Other cargo expenses () ()
Total cargo expenses () ()
Port & canal expenses () ()
Additional voyage expenses () ()
Total other voyage expenses () ()
Fuel () ()
Total voyage expenses (,) (,)
Charter expenses () ()
Ship operating expenses
Crew expenses
() ()
Maintenance of vessels () ()
Ship management fee () ()
Other ocean expenses () ()
Total ship operating expenses () ()
Manufacturing cost () ()
Other operating expenses and SG&A
Employee benefits () ()
Hired personnel () ()
External services () ()
Provision related to anti-trust investigations () ()
Other administration expenses () ()
Total operating expenses and SG&A () ()
Total operating expenses (,) (,)
Expensed audit fee (included in External services)
USD million
Statutory audit
Other assurance services
Tax and legal advisory services fee
Total expensed audit fee
Crew/seagoing personnel are hired and not employed by the group.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 4. Employee benefits
Financial statements contents → Main contents →
Note 4. Employee benefits
Executive management remuneration
Total executive management remuneration relates to current top executive manage-
ment, including executives who left their positions during the year. For further infor-
mation please refer to the separate remuneration report. Comparative information
for 2020 is revised to be consistent with 2021 definitions.
USD million Notes
Salary
Payroll tax
Pension cost
Other remuneration
Total employee benefits
Number of employees
Group companies in Norway
Group companies in Europe (incl Russia, excl Norway) , ,
Group companies in South Africa
Group companies in Asia & Africa (incl Oceania) ,
Group companies in United States
, ,
Group companies in Mexico , ,
Group companies in Americas (excl US and Mexico)
Total employees , ,
Average number of employees , ,
Categorization of production workers in the US has changed in 2021. The comparative figure for 2020 has been changed accordingly.
USD thousand
Fixed base salary , ,
Benefits
Pension
Short-term incentive ,
Long-term incentive ,
Severance , -
Total executive management remuneration , ,
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 4. Employee benefits
Financial statements contents → Main contents →
The board's remuneration for the financial year 2021 will be approved by the general
meeting April 26, 2022 and paid/expensed in 2022.
At the AGM in 2021, Håkan Larsson resigned from the board of directors with Rune
Bjerke replacing him as chair.
At the AGM in 2020, two additional board members were elected – Rune Bjerke and
Anna Felländer. They did not receive any remuneration in 2020.
See also note 22 Related party transactions, and note 2 Employee benefits in the
parent company accounts.
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.
Remuneration of the board of directors and
nomination committee
USD thousand Notes
Remuneration of the board of directors
Håkan Larsson
Rune Bjerke -
Thomas Wilhelmsen
Marianne Lie
Jonas Kleberg
Margareta Alestig
Anna Felländer -
Nomination committee
Anders Ryssdal
Jonas Kleberg
Carl Erik Steen
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 4. Employee benefits
Financial statements contents → Main contents →
The two main shareholders of Wallenius Wilhelmsen ASA are Walleniusrederierna
AB and Wilh. Wilhelmsen Holding ASA with 37.8 per cent of the shares each. 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).
Shares owned or controlled by representatives of the
group at December 31, 2021
Name Number of shares Per cent of shares
Board of directors
Rune Bjerke , .%
Thomas Wilhelmsen ,, .%
Marianne Lie - -
Jonas Kleberg - -
Margareta Alestig - -
Anna Felländer - -
Senior executives
Acting Chief Executive Ocer (CEO) and Chief Financial Ocer (CFO) – Torbjørn Wist , .%
Executive Vice President (EVP) and Chief Operating Ocer (COO) logistics services – Michael Hynekamp -
Chief Executive Ocer (CEO) shipping services – Erik Noeklebye , .%
Chief Digital Ocer (CDO) and acting Chief Human Resources Ocer (CHRO) – Simon White - -
Nomination committee
Anders Ryssdal - -
Jonas Kleberg - -
Carl Erik Steen - -
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 5. Other gain/loss
Financial statements contents → Main contents →
Note 5. Other gain/loss
Non-controlling shareholders hold a put option for their 20 per cent shareholding
in EUKOR through a shareholder agreement entered into in 2002. The shareholder
agreement also contains a symmetrical call option held by the group.
The exercise price for the put and call option is calculated based on a formula
consistent with valuation guidance used in “The Inheritance Tax and Gift Tax Act”
applicable in South Korea. The carrying value of the non-controlling interest is
expected to exceed the exercise price for the put and call option since these values
are calculated based on tax values. The put and call options became exercisable
in 2017 when the Hyundai Motor Group volumes carried by the group fell below 40
per cent. The put and call options have no expiry date and can be exercised at any
point in time. The group does not have any plan to exercise the call option.
Non-controlling interests containing a symmetrical put and call option held by the
non-controlling interest shareholders and the group, respectively, is recognized as
one integrated derivative financial instrument. The derivative financial instrument
is recognized as a non-current asset when the options are exercisable and the fair
value of the non-controlling interest exceeds the value of the exercise price for the
symmetrical put and call option.
In 2021, the change in the value of the derivative was USD 21 million recognized as a gain
under Other gain/(loss) in the income statement. One of the most important elements
to calculate the gain/loss is the estimated value of the 20 per cent non-controlling
interest related to EUKOR. The gain in 2021 is driven largely by an increase in the
estimated fair value of EUKOR shares compared with the end of 2020.
The financial derivative is recognized in Other non-current assets in the balance
sheet and has a carrying value of USD 152 million at December 31, 2021, compared
to USD 130 million at the end of 2020.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 6. Financial items
Financial statements contents → Main contents →
Note 6. Financial items
See note 17 on financial risk and the section of the accounting policies concerning
financial instruments.
USD million Notes
Financial income
Interest income
DNK distribution
-
Other financial items
Net financial income
Financial expenses
Interest expenses () ()
Interest rate derivatives – realized () ()
Interest rate derivatives – unrealized ()
Other financial items () ()
Loss on sale of investments ()
Net financial expenses () ()
Currency
Net currency gain/(loss) () ()
Foreign currency derivatives – realized () ()
Foreign currency derivatives – unrealized ()
Net currency ()
Financial fuel oil derivatives
Fuel oil derivatives – realized ()
Fuel oil derivatives – unrealized ()
Net fuel oil derivatives ()
Financial income/(expenses) () ()
The group has in the fourth quarter received a distribution from Den Norske Krigsforsikring (DNK) of USD million less withholding
tax of USD million. The gross amount is recognized as finance income, and the related withholding tax is recognized as an income tax
expense/receivable (see note ).
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 7. Tax
Financial statements contents → Main contents →
Note 7. Tax
Tonnage tax
Companies subject to tonnage tax regimes are exempt from ordinary tax on their
shipping income. In lieu of ordinary taxation, tonnage taxed companies are taxed
on a notional basis based on the net tonnage of the companies' vessels. Income
not derived from the operation of vessels in international waters, such as financial
income, is usually taxed according to the ordinary taxation rules applicable in the
resident country of each respective company. The group had three wholly-owned
companies resident in Malta, Singapore and Sweden which were taxed under a
tonnage tax regime in 2021. Further, the group have an ownership of 80 per cent
in EUKOR which is a tonnage taxed company resident in the Republic of Korea. The
tonnage tax is considered as an operating expense in the accounts.
Ordinary taxation
The ordinary rate of corporation tax in Norway is 22 per cent for 2021. Norwegian
limited liability companies are encompassed by the participation exemption method
for share income. Thus, share dividends and gains are tax free for the receiving
company. Corresponding losses on shares are not deductible. The participation
exemption method does not apply to share income from companies considered low
taxed and that are located outside the European Economic Area (EEA), and on share
income from companies owned by less than 10 per cent resident outside the EEA.
For group companies owned more than 90 per cent, and located in Norway and
within the same tax regime, taxable profits in one company can be oset against
tax losses and tax loss carry forwards in other group companies. Deferred tax/
deferred tax asset has been calculated on temporary dierences to the extent
that it is likely that these can be utilized and for Norwegian entities the group has
applied a rate of 22 per cent.
The group's landbased entities are ordinary taxed in the country of operation. Excep-
tions are some US Limited Liability Corporations (LLCs) which are disregarded for
US tax purpose. These LLCs are taxed on owner level.
Deferred tax
The group's deferred tax asset/liability is calculated based on the relevant tax rate
in each country. The group continues the non-recognition of net deferred tax asset
in the balance sheet related to tax losses in the Norwegian entities, due to uncer-
tain future utilization. The deferred tax assets not recognized per year-end 2021
amount to USD 103 million.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 7. Tax
Financial statements contents → Main contents →
Specification of tax expense for the year
Reconciliation of actual tax expense against expected tax
expense in accordance with the income tax rate of 22%
The eective tax rate for the group will, from period to period, change depending
on the group gains and losses from investments inside the exemption method and
tax exempt revenues from tonnage tax regimes. Change in local tax rates will also
impact the eective tax rate for the group.
USD million
Current income tax (including withholding tax)
Change in deferred tax ()
Total tax expense ()
USD million
Profit/(loss) before tax ()
% tax ()
Tax eect from
Non-taxable income ()
Share of profits from joint ventures and associates () ()
Other permanent dierences
Withholding tax refund from the Republic of Korea () ()
Corporate income tax dierent tax rate than % () ()
Currency transition from USD to local currency for tax purpose ()
Valuation allowance deferred tax assets in Norway
Prior year adjustments - ()
Withholding tax
Calculated tax expense for the group ()
Eective tax rate for the group % %
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 7. Tax
Financial statements contents → Main contents →
Deferred tax assets
Deferred tax liabilities
The net currency gain and losses are recognized on entity level due to dierent
functional currency than local currency.
The movement in deferred income tax assets and liabilities during the year,
without taking into consideration the osetting of balances within the same
tax jurisdiction, is as follows:
USD million
Tangible/
intangible assets
Deferred
capital gains Other Total
At December , () - () ()
Through income statement - ()
Deferred tax liabilities at December , () - () ()
Reclassification of deferred tax items ()
Net deferred tax liability at December , ()
At December , () - () ()
Through income statement -
Deferred tax liabilities at December , () - () ()
Reclassification of deferred tax items ()
Net deferred tax liability at December , ()
USD million
Non-current
assets and liabilities
Current assets
and liabilities
Tax losses
carried forward Total
At December ,
Through income statement () () - ()
Charged directly to equity () - - ()
Currency translations () - - ()
Deferred tax assets at December ,
Reclassification of deferred tax items
Net deferred tax asset at December ,
At December ,
Through income statement () () ()
Charged directly to equity - -
Currency translations () - - ()
Deferred tax assets at December ,
Reclassification of deferred tax items
Net deferred tax asset at December ,
USD million
Net deferred tax liabilities at January ()
Currency translation dierences () ()
Tax charged to equity ()
Income statement charge ()
Net deferred tax assets/(liabilities) at December ()
Deferred tax assets in balance sheet
Deferred tax liabilities in balance sheet () ()
Net deferred tax assets/(liabilities) at December ()
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 8. Goodwill, customer relations/contracts and other intangible assets
Financial statements contents → Main contents →
Note 8. Goodwill, customer relations/contracts
and other intangible assets
“Other intangible assets” include port use rights and software.
USD million Notes Goodwill
Customer
relations/
contracts
Other
intangible
assets
Total goodwill
and other
intangible
assets
Cost at January
Additions - -
Disposal - - () ()
Currency translation adjustment - - () ()
Cost at December
Accumulated amortization and impairment losses at January () () () ()
Amortization - () () ()
Impairment
() - () ()
Disposal - -
Accumulated amortization and impairment losses at December () () () ()
Carrying amounts at December
USD million Notes Goodwill
Customer
relations/
contracts
Other
intangible
assets
Total goodwill
and other
intangible
assets
Cost at January
Additions - -
Disposal - - () ()
Currency translation adjustment - -
Cost at December
Accumulated amortization and impairment losses at January - () () ()
Amortization - () () ()
Impairment
() - () ()
Disposal - -
Accumulated amortization and impairment losses at December () () () ()
Carrying amounts at December
In the fourth quarter of 2021, a goodwill impairment loss of USD 76 million was recognized.
During 2020, impairment losses related to goodwill (USD 40 million) and capitalized development cost (USD 5 million) were recognized.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 9. Vessels and other tangible assets
Financial statements contents → Main contents →
Note 9. Vessels and other tangible assets
USD million
Property
& land
Other
tangible
assets
Vessels
& docking
Newbuilding
contracts
Total
tangible
assets
Cost at January , ,
Additions
Disposal () () () () ()
Reclassification () () ()
Currency translation adjustment () () - - ()
Cost at December , ,
Accumulated depreciation and
impairment losses at January () () (,) - (,)
Depreciation () () () - ()
(Impairment)/reversal of impairment - - -
Disposal -
Reclassification - () - ()
Currency translation adjustment - -
Accumulated depreciation and
impairment losses at December () () (,) - (,)
Carrying amounts at December , ,
USD million
Property
& land
Other
tangible
assets
Vessels
& docking
Newbuilding
contracts
Total
tangible
assets
Cost at January , ,
Additions
Reclassification () () () () ()
Disposal () () ()
Currency translation adjustment - -
Cost at December , ,
Accumulated depreciation and
impairment losses at January () () (,) - (,)
Depreciation () () () - ()
Impairment - - () - ()
Disposal -
Reclassification () () -
Currency translation adjustment () () - - ()
Accumulated depreciation and
impairment losses at December () () (,) - (,)
Carrying amounts at December , ,
The group has reclassified vessels from right-of-use assets to tangible assets eective from January , due to contracts
being considered financing arrangements rather than lease contracts. The corresponding lease liabilities have been reclassified to
bank loans.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 9. Vessels and other tangible assets
Financial statements contents → Main contents →
Vessels include dry-docking, of which carrying amounts at year end was USD 81
million (2020: USD 54 million). Newbuilding contracts include dry-dock expenditure
and installments on scrubber installations.
During the year, a new vessel was delivered resulting in a reclassification from
newbuilding contracts to vessels of USD 74 million.
As part of the measure to take out capacity in 2020 it was decided that four vessels
would be recycled early, all 24 years or older. The reason for the recycling decision
was the overcapacity in the market and the drastic drop in demand due to the Covid-
19 pandemic. It was not expected that there would be any need for the vessels in
the foreseeable future and they were classified as held for sale. The market has
changed drastically in 2021 and with a current tonnage shortage in the market
three out of the four vessels have been recycled. The last vessel was reclassified
to tangible assets from assets held-for-sale in the second quarter as it continues
to be used in operations. The USD 14 million impairment that was charged in 2020
was reversed in the second quarter. In addition, USD 6 million of incremental depre-
ciation was recognized.
During the fourth quarter 2021 two vessels were classified as assets held for sale
as their sale is highly probable. The vessels are measured at net carrying value,
USD 21 million, which is lower than their fair value less costs to sell.
See note 11 for further information regarding impairment.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 10. Right-of-use assets
Financial statements contents → Main contents →
Note 10. Right-of-use assets
USD million
Property
& land Vessels
Other
assets
Total
right-of-use
assets
Cost at January , ,
Additions
Change in lease payments -
Disposal () () () ()
Reclassification to tangible assets - () - ()
Currency translation adjustment () () () ()
Cost at December , ,
Accumulated depreciation and impairment losses at January () () () ()
Depreciation () () () ()
Disposal
Reclassification to tangible assets - () - ()
Currency translation adjustment
Accumulated depreciation and impairment losses at December () () () ()
Carrying amounts at December , ,
USD million
Property
& land Vessels
Other
assets
Total
right-of-use
assets
Cost at January , ,
Additions
Change in lease payments
Disposal () () () ()
Reclassification to tangible assets () () () ()
Currency translation adjustment -
Cost at December , ,
Accumulated depreciation and impairment losses at January () () () ()
Depreciation () () () ()
Disposal
Reclassification to tangible assets () () () ()
Currency translation adjustment () - () ()
Accumulated depreciation and impairment losses at December () () () ()
Carrying amounts at December ,
The group has reclassified vessels from right-of-use assets to tangible assets eective from January , due to contracts
being considered financing arrangements rather than lease contracts. The corresponding lease liabilities have been reclassified to
bank loans.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 10. Right-of-use assets
Financial statements contents → Main contents →
Right-of-use vessels
Per year-end 2021, the group has a total of 43 vessels recognized as right-of-use
assets with remaining lease terms from 0.5 to 15 years. Of the 43 right-of-use vessels,
16 have a purchase option and seven have an option to extend. Per year-end 2020,
the group had a total of 36 vessels recognized as leased assets.
Right-of-use property and land
In addition to vessels, the groups right-of-use assets primarily consist of land and
property arising from lease of land related to dierent terminal sites around the
globe, in addition to oce space at various locations. Per year-end 2021, the recog-
nized land and property leases have remaining lease terms from one to 30 years.
Other right-of-use assets
The group also has minor agreements related to vehicles and other equipment
applied in the group's day-to-day operations.
Specification of lease liabilities
See note 16 for specification of lease liability maturity and note 17 for specification
of undiscounted lease commitments.
Of the group's total lease commitments, option periods represent USD 191 million
(2020: USD 151 million). The option periods recognized are primarily related to leases
of vessels and land.
USD million Dec , Dec ,
Current lease liabilities
Non-current lease liabilities , ,
Total leased liabilities , ,
Interest expense on lease liability recognized in the income statement
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 10. Right-of-use assets
Financial statements contents → Main contents →
Lease expenses related to lease agreements not
recognized in the balance sheet
Short-term lease expenses
Short-term lease expenses primarily comprise lease expenses related to lease of
vessels. Short-term lease of vessels enhances the group's tonnage flexibility and
the lease terms are primarily up to three months. In addition to lease of vessels on
short-term basis, the group occasionally enters into short-term leases of land area
when site operations require additional area for shorter periods of time.
Low value lease expenses
Low value lease expenses comprise the lease expenses related to lease agreements
deemed out of group scope due to evaluation of materiality at the implementation
of IFRS 16. The assets are company cars, oce- and IT-equipment.
Variable lease expenses
Variable lease expenses comprise expenses related to lease agreements where
the payment will fluctuate during the lease term. The fluctuations are primarily due
to the use of assets being variable with the invoiced amount reflecting the actual
usage, instead of a pre-defined contractual amount.
Short-term lease commitments
Per year-end 2021, commitments related to short-term lease agreements amount
to USD 3 million (2020: USD 6 million).
Operating lease revenue
Wallenius Wilhelmsen's operating lease revenue is generated through short-term
fixed time charter agreements. The agreements are entered into based on the
group's tonnage surplus at any given time and enables flexibility in tonnage plan-
ning for the operations.
Fixed time charter revenue is accounted for as other operating revenue in the ship-
ping segment.
USD million Dec , Dec ,
Short-term lease expenses (< months)
Low value leases expenses
Variable lease expenses
Total lease expenses
USD million
Fixed Time Charter
Total operating revenue from fixed time charter
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 11. Impairment on non-current assets
Financial statements contents → Main contents →
Note 11. Impairment on non-current assets
Impairment – Goodwill
Goodwill is tested for impairment on an annual basis, or more frequently if there is
an indication of impairment. Management performed impairment testing of cash
generating units (CGUs) or groups of CGUs that contain goodwill during the fourth
quarter 2021. Reporting segment definitions have changed from the prior year as
described in note 2.
Goodwill acquired through business combinations has been allocated to the groups
of CGUs as presented below together with carrying amounts, applicable discount
rates and perpetuity growth rates used for impairment testing:
The recoverable amounts for CGUs with goodwill have been determined based on
a value in use (ViU) calculation. The goodwill impairment test resulted in a partial
impairment of the goodwill allocated to Wallenius Wilhelmsen Ocean (WW Ocean)
of USD 76 million. The impairment charge was primarily triggered by cash flow
forecasts that include expected capital expenditure for replacement of capacity in
coming years to maintain operating activities in line with the five-year plan.
Key assumptions used in determination of value in use
Discount rate
Discount rates used in the calculation of ViU reflect the current market assessment
of the risks specific to each cash generating unit. The discount rates were estimated
based on the weighted average cost of capital for the industry.
Cash flows
Future cash flow estimates are based on an assessment of the CGU's expected
earnings which is best represented by group management's latest five-year plan
reflecting both experience as well as external sources of information concern-
ing expected future market developments. Current estimated cash flows include
expected impact of committed initiatives and cash outflows to maintain operating
capacity. Cash flows beyond the five-year period are extrapolated using moderate
estimated growth rates.
Goodwill
Discount rate
post tax
Growth rate
terminal value
USD million Reporting segment
Wallenius Wilhelmsen Ocean Shipping services .% .% .% .%
ARC Government services .% .% .% .%
Logistics services Logistics services .% .% .% .%
Total
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 11. Impairment on non-current assets
Financial statements contents → Main contents →
Sensitivities for main CGUs with goodwill
WW Ocean (part of the shipping services segment)
WW Ocean owns or charter (long-term time-charter or bare-boat in) a fleet of 54
vessels through its ship owning subsidiaries, WWL Shipowning Singapore Pte Ltd,
Wall RO/RO AB and Wilhelmsen Lines Shipowning Malta Ltd. In addition, three
vessels are chartered from aliated companies in the government services segment.
The vessels are used in its global ocean operations for transportation of autos, high
and heavy and break-bulk cargo for OEMs or other customers or chartered (T/C
out) to other carriers with variable durations. Four vessels are chartered to other
group companies. The key cash flow assumptions are related to the expected aver-
age earnings per day (T/C less vessel running costs and selling, general & admin-
istration expenses per day) for the fleet operated by WW Ocean. The five-year plan
also reflects the assessment of the supply/demand balance (volume, tonnage
supply and utilization) in the short to medium term. Cash flows, and the resulting
impairment charge, are particularly impacted by expected required investments
such as replacement of capacity in coming years to maintain operating activities
in line with the five-year plan.
The (post tax) discount rate used in the impairment test for WW Ocean is 7 per cent
and the perpetuity growth rate is estimated at 1 per cent. The impairment test is
sensitive to changes in these variables, and the below table shows what the head-
room or impairment charge for WW Ocean would have been with had the perpetuity
growth rate and/or the discount rate changed by 0.5 percentage points.
Government services
Government services provide ocean transport of RoRo cargo, breakbulk and vehicles.
Logistics services, primarily related to multimodal transportation, stevedoring and
terminal operations, are also performed. The entities in the government services
segment (ARC) own ten US flagged vessels at the end of the year, of which six vessels
are deployed by ARC and four vessels are chartered to aliates in the shipping
services segment. Two of the vessels operated by ARC are classified as assets held
for sale at December 31, 2021. The market value of the vessels and other net assets
(cash & net receivables) is sucient to support the limited goodwill (USD 11 million)
allocated to this CGU. No reasonably possible changes in key variables are likely to
reduce the headroom to nil.
Logistics services
Logistics services include vehicle processing centers, equipment processing
centers, inland distribution networks and terminals. The key cash flow assumptions
used are the throughput and average margins obtained in the network operated
by logistics services.
A reduction in the perpetuity growth rate by 1 percentage point to 0.5 per cent or an
increase in the discount rate of 0.5 percentage points to 8 per cent would reduce
the headroom to nil.
WACC
.% .% .%
Perpetuity
growth rate
.% () () ()
.% () ()
.% ()
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 11. Impairment on non-current assets
Financial statements contents → Main contents →
Impairment assessment
– intangible assets with a definite useful life
The group has significant intangible assets, largely related to customer contracts
and customer relations acquired in business combinations. At every balance sheet
date, the group considers whether there are any indications of impairment. If such
indications exist, an impairment test is performed.
Management considers that there are no indications of impairment as at December
31, 2021.
Impairment assessment
– vessels and other tangible assets
The group has significant investments in vessels and other tangible assets of which
vessels constitute the vast majority. At every balance sheet date, the group consid-
ers whether there are any indications of impairment of the carrying values of these
assets. If such indications exist, an impairment test is performed.
Management considers that there are no indications of impairment as at December
31, 2021.
Due to overcapacity in the market in 2020 due to the Covid-19 pandemic it was
decided to recycle 4 vessels early. Three out of the four vessels have been recycled
and the last vessel was reclassified to tangible assets from assets held-for-sale in
2021 as it continues to be used in operations. The USD 14 million impairment that
was charged in 2020 was reversed and USD 6 million of incremental depreciation
was recognized.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 12. Principal subsidiaries
Financial statements contents → Main contents →
Note 12. Principal subsidiaries
The four holding companies and their principal subsidiaries at 31 December, 2021
are set out above. Unless otherwise stated, they have share capital consisting
solely of ordinary shares that are held directly by the group, and the proportion of
ownership interests held equals the voting rights held by the group. The country of
incorporation or registration is also their principal place of business.
Ownership interest
held by the group
Company Business oce, country Nature of business
Wallenius Wilhelmsen Ocean Holding AS Lysaker, Norway Intermediate holding company % %
Wall RO/RO AB
Stockholm, Sweden Shipowner % %
WWL Shipowning Singapore Pte Ltd
Singapore Shipowner % %
Wilhelmsen Lines Shipowning Malta Ltd
Floriana, Malta Shipowner % %
Wallenius Wilhelmsen Ocean AS
Lysaker, Norway Vessel operator % %
Armacup Maritime Services Ltd
Auckland New Zealand Vessel operator % %
Wallenius Wilhelmsen International Holding AS
Lysaker, Norway Intermediate holding company % %
EUKOR Car Carriers Inc
Seoul, Republic of Korea Shipowner and operator % %
ARC Group Holding AS
Lysaker, Norway Intermediate holding company % %
American Roll-On Roll-O Carrier Group Inc
New Jersey, USA Shipowner and operator % %
American Roll-On Roll-O Carrier Holdings LLC
New Jersey, USA Vessel operator % %
Fidelio Limited Partnership
New Jersey, USA Shipowner % %
Wallenius Wilhelmsen Solutions Holding AS
Lysaker, Norway Intermediate holding company % %
Wallenius Wilhelmsen Terminals Holding AS
Lysaker, Norway Intermediate holding company % %
Melbourne International RoRo and Auto
Terminal Pty Ltd
Melbourne, Australia Terminal operations % %
Mid-Atlantic Terminal LLC
Baltimore, Maryland, USA Terminal operations % %
Pacific Ro-Ro Stevedoring LLC
California, US Terminal operations % %
Wallenius Wilhelmsen Terminals UK Branch
Southampton, United Kingdom Terminal operations % %
Pyeongtaek International Ro-Ro Terminal
Pyeongtaek, Republic of Korea Terminal operations % %
Wallenius Wilhelmsen Logistics Zeebrugge NV
Zeebrugge, Belgium Terminal operations % %
Wallenius Wilhelmsen Inland Services Holding AS
Lysaker, Norway Intermediate holding company % %
Wallenius Wilhelmsen Logistics Abnormal Load
Services Holding B.V.
Ittervort, Netherlands Intermediate holding company % %
W Americas Holdings, LLC
New Jersey, USA Intermediate holding company % %
WWL Vehicle Service Americas
New Jersey, USA Landbased Solutions % %
Keen Transport Inc Holding
Carlisle, Pennsylvania, USA Landbased Solutions % %
Syngin Technologies LLC
Tampa, Florida, USA Landbased Solutions % %
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 12. Principal subsidiaries
Financial statements contents → Main contents →
Liabilities related to non-controlling interest
The group owns 70 per cent of the shares in the subsidiary Syngin Technology
LLC which is consolidated in the group financial statements based upon owner-
ship with a corresponding non-controlling interest. The non-controlling interest
is provided with a put option as part of the transaction for their remaining 30 per
cent shareholding. The price is based on certain performance related measures
and can be exercised five years (2023) after the transaction date. At December 31,
2021, a financial liability of USD 17 million has been recognized reflecting the pres-
ent value of the redemption amount as an other non-current interest-bearing debt
with a corresponding entry reducing equity through retained earnings and other
reserve. All subsequent changes to the liability are recognized in profit and loss.
In the event that the option expires unexercised, the liability will be derecognized
with a corresponding adjustment to equity.
The group owns 65 per cent of the shares in the subsidiary Armacup Maritime
Services Ltd which is consolidated in the group accounts based upon ownership with
a corresponding non-controlling interest. According to a shareholder agreement,
the group shall purchase the remaining 35 per cent of the shares on 31 December
2022. The fair value at December 31, 2020 is USD 15 million and is recognized as
an other current liability. All subsequent changes to the liability are recognized in
profit and loss.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 13. Subsidiaries with material non-controlling interest
Financial statements contents → Main contents →
Note 13. Subsidiaries with material non-controlling interest
Summarized cash flows
Set out below is the summarized financial information for the subsidiary that has
non-controlling interests (NCI) material to the group. The amounts disclosed are
100 per cent.
Summarized income statement/OCI
Summarized balance sheet
Company Business oce, country Voting/control share Non-controlling interest
Ocean
EUKOR Car Carriers Inc Seoul, Republic of Korea % % % %
USD million
Net cash flow provided by/(used in) operating activities
Net cash flow provided by/(used in) investing activities ()
Net cash flow provided by/(used in) financing activities () ()
Net increase/(decrease) in cash and cash equivalents ()
Accumulated NCI – EUKOR Car Carriers Inc
Accumulated NCI – immaterial subsidiaries
Accumulated non-controlling interests (NCI)
Profit/(loss) for the period attributable to NCIs – EUKOR Car Carriers Inc ()
Profit for the period attributable to NCIs – immaterial subsidiaries
Profit/(loss) for the period to NCIs ()
USD million
Non-current assets , ,
Current assets
Total assets , ,
Non-current liabilities , ,
Current liabilities
Total liabilities , ,
Net assets ,
Accumulated non-controlling interests (NCI)
USD million
Total revenue , ,
Profit/(loss) for the year ()
Other comprehensive income ()
Total comprehensive income ()
Profit/(loss) allocated to material NCI ()
Dividends paid to material NCI - -
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 14. Share information and earnings per share
Financial statements contents → Main contents →
Note 14. Share information and earnings per share
Earnings per share takes into consideration the number of issued shares exclud-
ing own shares in the period.
Basic earnings per share is calculated by dividing profit for the period attributable
to the owners of the parent by the average number of total outstanding shares
(adjusted for average number of own shares).
The annual general meeting on April 28, 2020, granted an authorization to the board
of directors to, on behalf of the company, acquire own shares with a total nominal
value of up to NOK 22,001,456 which equals 10 per cent of the current share capital.
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.
The company's number of shares is as follows: Dec , Dec ,
Total number of shares ,, ,,
Own shares , ,
Earnings per share
Number of shares ,, ,,
Profit/(loss) for the period attributable to owners of the parent (USD million) ()
Basic and diluted earnings per share (USD)
. (.)
For the share-based compensation program there is no dilutive eect for the periods presented.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 15. Employee retirement plans
Financial statements contents → Main contents →
Note 15. Employee retirement plans
The group companies provide various retirement plans in accordance with local
regulations and practice in the countries in which they operate.
The pension plans are for the material part defined contribution plans in which the
companies are required to make agreed contributions to a separate fund when
employees have rendered services entitling them to the contributions. For the
defined contribution plans the companies' legal or constructive obligations are
limited to the amount that they have agreed to contribute to the fund.
The defined benefit plans for the group are based on years of service and salary
levels and normally guarantees a specified return or agreed benefit. For these plans
the group has investment and actuarial risks. If the actuarial or investment experi-
ence is worse than expected, the group's obligation may be increased. In order to
reduce the group's exposure to certain risks associated with defined benefit plans,
such as longevity, inflation, and eects of increases in compensation, the group
regularly reviews and continuously improves the design of its post-employment
defined benefit plans. The defined benefit plans are for the main part related to
subsidiaries in Norway, US, UK and the Republic of Korea and are closed plans or
only applicable for senior executives.
The group also have agreements on early retirement. These obligations are mainly
financed from operations.
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 the terms of
the related pension obligation.
Actuarial gains and losses arising from experience adjustments and changes in
actuarial assumptions are recognized in Other comprehensive income in the period
in which they arise.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 15. Employee retirement plans
Financial statements contents → Main contents →
Number of people covered by pension schemes at December
In employment , ,
In retirement (inclusive disability pensions)
Total number of people covered by pension schemes , ,
USD million Notes
Expenses for employee retirement plans recognized in the statement of income
Defined benefit plans
Defined contribution plans
Net pension expenses
Remeasurements
Remeasurements recognized in other comprehensive income ()
Tax eect of pension other comprehensive income ()
Net remeasurements in other comprehensive income ()
USD million
Pension obligations
Defined benefit obligation at end of prior year
Current/past service cost and interest cost
Benefit payments from employer () ()
Transfer of obligation in/(out)
Remeasurements ()
Eect of changes in foreign exchange rates ()
Defined benefit obligations at December
Gross pension assets
Fair value of plan assets at end of prior year
Interest income
Employer contributions
Benefit payments from plan assets () ()
Transfer of assets in/(out)
Return on plan assets (excluding interest income)
Reclassifications from other non-current assets -
Eect of changes in foreign exchange rates ()
Gross pension assets at December
Total pension obligations
Defined benefit obligations
Fair value of plan assets
Net pension liabilities
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 16. Interest-bearing liabilities
Financial statements contents → Main contents →
Note 16. Interest-bearing liabilities
After the onset of the pandemic in 2020, the company agreed with the banks of WW
Ocean to defer installments of about USD 70 million, previously scheduled for the
second half of 2020. This was done to strengthen the cash position during the period
of reduced activity. While deferred amounts are outstanding, the group is restricted
from paying out dividends. In January 2022, the group commenced prepayment of
the remaining USD 50 million of deferred amounts with the WW Ocean banks. By
early March 2022, all amounts are repaid and the related dividend block removed.
During the fourth quarter, Wallenius Wilhelmsen ASA completed a tap issue of USD
57 million (NOK 500 million) in the bond WAWI01. Delivery of the last newbuilding
on order was financed with a loan drawdown of USD 50 million.
During the third quarter, Wallenius Wilhelmsen ASA completed a new senior unse-
cured bond issue of USD 166 million. Net proceeds from the bond issue were used
for partial repurchase of other outstanding bonds and during third quarter, USD 72
million of outstanding bonds was repurchased. In addition, USD 40 million of bond
debt matured during the quarter.
Reconciliation of liabilities arising from financing activities
USD million
Non-current
interest-bearing
debt
Current
interest-bearing
debt
Non-current
lease liabilities
Current lease
liabilities
Total financing
activities
Net debt December , , , ,
Cash flows from debt uptake - -
Cash flow from debt repayments () () - () ()
Net change lease commitments - -
Foreign exchange movement () () () () ()
Other non-cash movements - - -
Re-classification () () -
Net debt December , , , ,
USD million
Non-current
interest-bearing
debt
Current
interest-bearing
debt
Non-current
lease liabilities
Current lease
liabilities
Total financing
activities
Net debt December , , , ,
Cash flows from debt uptake - -
Cash flow from debt repayments () () - () ()
Net change lease commitments - -
Foreign exchange movement ()
Other non-cash movements - - -
Re-classification () () -
Net debt December , , , ,
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 16. Interest-bearing liabilities
Financial statements contents → Main contents →
In 2020, the group entered into sale and leaseback agreements for two vessels. The
arrangements are regarded as financing arrangements and the liabilities related
to these of total USD 90 million have been classified as bank loans.
Most financing is subject to certain financial and non-financial covenants or
restrictions. The main covenant related to the group's bond debt is limitation on
the ability to pledge assets. The main bank and lease financing of the group have
financial covenant clauses relating to one or several of the following minimum
liquidity, current assets/current liabilities, net interest-bearing debt/ EBITDA and
loan to value clauses.
The minimum ratios are adjusted to reflect the financial situation of the relevant
borrowing company or group of companies. Certain subsidiary loan agreements
also have change of control clauses. As of December 31, 2021 (analogous for 2020),
the group is in compliance with all financial and non-financial covenants. Cove-
nants can be adjusted in the event of material changes in accounting principles.
Repayment schedule for interest-bearing liabilities
USD million Bank loans Bonds Lease liabilities Other Dec ,
Due in
Due in - ,
Due in
Due in -
Due in and later ,
Total repayable interest-bearing debt , , ,
Amortized financing costs () () - - ()
Book value interest-bearing debt , , ,
USD million Bank loans Bonds Lease liabilities Other Dec ,
Due in
Due in
Due in -
Due in
Due in and later - ,
Total repayable interest-bearing debt , , ,
Amortized financing costs - -
Book value interest-bearing debt , , ,
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 16. Interest-bearing liabilities
Financial statements contents → Main contents →
Net debt reconciliation
This section sets out an analysis of net debt and the movements in net debt for
each of the periods presented.
A key part of the liquidity reserve takes the form of undrawn committed drawing
rights, which amounted to USD 348 million at December 31, 2021 (2020: USD 326
million). See note 21.
See otherwise note 17 for information on financial derivatives (interest rate and
currency hedges) relating to interest-bearing liabilities.
USD million
Gross debt – fixed interest rates , ,
Gross debt – variable interest rates , ,
Less Cash and liquid investments
Net debt , ,
USD million
Book value of mortgaged and leased assets
Vessels , ,
Property & land
Total book value of mortgaged and leased assets , ,
USD million
The carrying amounts of the group's borrowings are denominated in the following currencies
USD , ,
NOK
KRW
Total carrying amounts of group's borrowings , ,
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 17. Financial risk
Financial statements contents → Main contents →
Note 17. Financial risk
The group has exposure to the following financial risks from its operations:
•
Market risk
- Foreign exchange rate risk
- Interest rate risk
- Fuel oil price risk
•
Credit risk
•
Liquidity risk
Market risk
Economic hedging strategies have been established in order to reduce market
risks in line with the financial strategy approved by the board of directors. Hedge
accounting has not been applied for any economic hedges.
Any change in market value of other economic hedge derivatives is recognized in
the income statement.
Foreign exchange rate risk
The group 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 group's largest foreign exchange
exposure is EUR against USD, but the group also has exposure towards a number
of other currencies whereof KRW, JPY, SEK, CNY and NOK are most important.
Economic hedging of transaction risk
As a main principle, the group does not use financial instruments to economically
hedge cash flow risk in the operating entities but will make an assessment of the
merits to do so in periods when the USD is historically strong vs. other currencies. In
order to capitalize on the strong USD, the group has an economic hedging program
for CNY, NOK and SEK exposures in place as of both year-ends 2021 and 2020.
The portfolio of derivatives used to economically hedge the group's transaction risk
exhibit the following income statement sensitivity:
USD million
Income statement sensitivities of economic hedge program
Change in exchange rate's levels (%) (%) % % %
Transaction risk
USD/NOK spot rate . . . . .
Income statement eect (post tax) () ()
USD/SEK spot rate . . . . .
Income statement eect (post tax) () ()
USD/CNY spot rate . . . . .
Income statement eect (post tax) () ()
(Tax rate used is % which equals the Norwegian tax rate)
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 17. Financial risk
Financial statements contents → Main contents →
Economic hedging of translation risk
For balance sheet items denominated in other currencies than USD, the group will
in each case consider whether to economic hedge the exposure. The group has
outstanding NOK-denominated bonds of about NOK 4.6 billion (USD 517 million).
The corresponding amount was NOK 3.3 billion (USD 381 million) for 2020. A large
part of this debt (NOK 4.5 billion) has been economically hedged against USD with
basis swaps.
FX sensitivities
The group monitors the net exposure and calculates sensitivities on a regular
basis, based on average market volatility per currency cross. Sensitivities showing
a potential accounting eect below USD 5 million on group level are considered
non-material. On December 31, 2021 there were no material FX sensitivities.
For the period ending December 31, 2021, the net impact from translation dierences
had a very limited impact on other comprehensive income with negative USD 6
million (2020: positive USD 6 million). All fair value changes of the financial derivatives,
except fuel oils derivatives in EUKOR, are booked against the income statement.
Equity sensitivities will therefore equal sensitivities in the income statement.
USD million Note
Through income statement
Financial currency
Net currency gain/(loss) – operating currency ()
Net currency gain/(loss) – financial currency () ()
Derivatives for economic hedging of cash flow risk – realized () ()
Derivatives for economic hedging of cash flow risk – unrealized ()
Derivatives for economic hedging of translation risk – realized ()
Derivatives for economic hedging of translation risk – unrealized ()
Net financial currency ()
Through other comprehensive income
Currency translation dierences through other comprehensive income ()
Total net currency eect ()
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 17. Financial risk
Financial statements contents → Main contents →
Interest rate risk
The group seeks to economically hedge between 30-70 per cent of the net inter-
est rate exposure, predominantly through interest rate swaps and fixed rate loans.
Interest rate contracts held by the group corresponded to about 40 per cent (2020:
about 50 per cent) of its outstanding long-term interest exposure at December 31.
However, when fixed rate debt is included, the economic hedge ratio is about 65
per cent (2020: about 65 per cent) as at December 31. Leases are considered fixed
rate debt for this calculation.
As of end 2021 the group did not hold any forward starting swaps (2020: USD 100
million).
The average remaining term of the existing loan portfolio is about 2.8 years, while
the average remaining term of the running interest rate derivatives and fixed interest
loans is approximately 2.7 years.
Interest rate sensitivities
The group's interest rate risk originates from dierences in duration and amounts
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 interest-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
interest-bearing assets and liabilities:
USD million
Maturity schedule economic interest rate hedges (nominal amounts)
Due in year
Due in year
Due in year
Due in year
Due in year and later*
Total economic interest rate hedges , ,
*of which forward starting -
USD million
Change in exchange rate's levels (%) (%) % % %
Fair value sensitivities of interest rate risk
Estimated change in fair value (post tax) () ()
(Tax rate used is % which equals the Norwegian tax rate)
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 17. Financial risk
Financial statements contents → Main contents →
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.
All financial derivatives are booked against the income statement in accordance
with the fair value accounting principle. Equity sensitivities will therefore equal
sensitivities in the income statement.
The market value of financial derivatives are included under Other non-current
assets, Other non-current liabilities and Other current liabilities in the balance sheet.
Assets Liabilities Assets Liabilities
USD million Notes
Interest rate derivatives
Holding - -
Shipping services - -
Government services
Logistics services - -
Total interest rate derivatives - -
Derivatives used for economic cash flow hedging
Holding - -
Shipping services - -
Total currency cash flow derivatives -
Derivatives used for economic translation risk hedging (basis swaps)
Holding
Shipping services - -
Total cross currency derivatives (basis swaps)
Derivatives used for economic fuel hedging
Shipping services - - -
Total fuel derivatives - - -
Other derivatives – non-controlling shareholder net derivative
Shipping services - -
Total non-controlling shareholder net derivative - -
Total market value of derivatives
Book value equals fair value.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 17. Financial risk
Financial statements contents → Main contents →
Fuel oil price risk
The group is exposed to fuel oil price fluctuations through its operations in Wallenius
Wilhelmsen Ocean, American Roll-On Roll-O Carrier and EUKOR Car Carriers.
As a general principle, fuel adjustment factors (FAF) in customer contracts are the
main mechanism to manage fuel oil price risk in the group. In the short term, the
group is exposed to changes in the fuel oil price since FAF is calculated based on
the average price over a historical period, and then fixed during an application
period, creating a lag eect.
As at end 2021, the group does not hold any fuel oil hedging contracts. At end 2020,
EUKOR had entered into fuel oil hedging contracts to reduce the risk connected to
rising fuel oil prices. For the mentioned economic fuel oil hedges, the profit/loss
was taken through the income statement.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 17. Financial risk
Financial statements contents → Main contents →
Credit risk
Credit risk is the risk of financial loss to the group if a customer or counterparty to a
financial instrument fails to meet its contractual obligations, and originates primarily
from the group's customer receivables, financial derivatives used to economically
hedge interest rate risk or foreign exchange risk, as well as bank deposits.
Trade receivables
The group's exposure to credit risk through its operating entities is influenced mainly
by individual characteristics of each customer. The demographics of the group's
customer base, including the default risk of the industry and country, in which the
customers operate, has less of an influence on credit risk.
The group's shipping segment has historically been considered to have low credit
risk as the customers tend to be large and well-reputed. In addition, cargo can be
held back.
Cash and cash equivalents
The group's exposure to credit risk on cash and cash equivalents is considered to
be very limited as the group maintains banking relationships with well reputed and
familiar banks and where the group – in most instances – has a net debt position
towards these banks.
Financial derivatives
The group'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.
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
Exposure to credit risk
Long-term investments
Financial derivatives – asset
Other non-current assets
Trade receivable
Other current assets
Cash and cash equivalents
Total exposure to credit risk , ,
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 17. Financial risk
Financial statements contents → Main contents →
Liquidity risk
The group's approach to managing liquidity is to secure that it will always have
sucient liquidity to meet its liabilities, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the group's reputation.
The group's liquidity risk is considered low in that it holds significant liquid assets
in addition to credit facilities with the banks.
At December 31, the group had USD 710 million (2020: USD 654 million) in liquid
assets which can be realized over a three-day period in addition to USD 348 million
(2020: USD 326 million) in undrawn capacity under its bank facilities.
Interest expenses on floating interest-bearing debt included above have been
computed using interest rate curves as of year-end.
Undiscounted cash flows financial liabilities
USD million
Less than
year
Between
and years
Between
and years
Later than
years
Bank loans
Bonds -
Current liabilities (excluding next year's installment on
interest-bearing debt, lease liabilities and financial derivatives) - - -
Total non-derivative liabilities excluding leasing , ,
Leasing liabilities
Financial derivatives
Total gross undiscounted cash flows financial liabilities
December , , ,
USD million
Less than
year
Between
and years
Between
and years
Later than
years
Bank loans ,
Bonds -
Current liabilities (excluding next year's installment on
interest-bearing debt, lease liabilities and financial derivatives) - - -
Total non-derivative liabilities excluding leasing ,
Leasing liabilities
Financial derivatives
Total gross undiscounted cash flows financial liabilities
December , ,
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 17. Financial risk
Financial statements contents → Main contents →
Covenants
Most financing is subject to certain financial and non-financial covenants or restric-
tions. The main covenant related to the group's bond debt is limitation on the ability
to pledge assets.
The main bank and lease financing of the group have financial covenant clauses
relating to one or several of the following:
•
Minimum liquidity
•
Current assets/current liabilities
•
Net interest-bearing debt/EBITDA
•
Loan to value clauses
The minimum ratios are adjusted to reflect the financial situation of the relevant
borrowing company or group of companies. Certain subsidiary loan agreements
also have change of control clauses. As of the balance date, the group is in compli-
ance with all financial and non-financial covenants. Covenants can be adjusted in
the event of material changes in accounting principles.
Capital risk management
The group's policy is to maintain a strong capital base to maintain investor, creditor
and market confidence and to sustain future development of the business. The
board of directors monitors return on capital employed, which the group defines
as operating profit divided by capital employed (shareholders equity and interest-
bearing liabilities). The board also monitors the level of dividends to shareholders.
Wallenius Wilhelmsen ASA targets a dividend which over time shall constitute
between 30-50 per cent of the company's profit after tax. When deciding the size
of the dividend, the board will consider 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 warrantable at all times.
The group seeks to maintain a balance between the potentially higher returns that
can be achieved with a higher level of debt and the advantages of maintaining a
solid capital position. The group's target is to achieve a return on capital employed
over time that exceeds 8 per cent. In 2021 the return on capital employed was 4.4
per cent. See reconciliation of alternative performance measures (p. 167-170) for
definition and calculation.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 17. Financial risk
Financial statements contents → Main contents →
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 instruments 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 discovery.
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 carrying value less impairment provision of trade receivables and payables
are assumed to approximate their fair values. The fair value of financial liabilities
for disclosure purposes is estimated by discounting the future contractual cash
flows at the current market interest rate that is available to the group for similar
financial instruments.
Interest-bearing liabilities
USD million Fair value Book value
Bank loans , ,
Leasing liabilities , ,
Bonds
Other
Total interest-bearing liabilities December , ,
USD million Fair value Book value
Bank loans , ,
Leasing liabilities , ,
Bonds
Other
Total interest-bearing liabilities December , ,
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 17. Financial risk
Financial statements contents → Main contents →
Fair value hierarchy
The quoted market price used for financial assets held by the group is the current
close price. The group held no instruments qualifying for inclusion in level 1 at year
end.
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 dierent valuation techniques
typically applied by financial counterparties (banks) were described above. These
instruments – currency and interest rate derivatives – are included in level two.
USD million Notes Level Level Level Total balance
Financial assets at fair value through income statement
- Financial derivatives - -
- Non-controlling shareholder net derivative - -
Total assets December -
Financial liabilities at fair value through income statement
- Financial derivatives - -
Total liabilities December - -
USD million Notes Level Level Level Total balance
Financial assets at fair value through income statement
- Financial derivatives - -
- Non-controlling shareholder net derivative - -
Total assets December -
Financial liabilities at fair value through income statement
- Financial derivatives - -
Total liabilities December - -
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 17. Financial risk
Financial statements contents → Main contents →
Financial instruments by category
USD million
Assets at
amortized cost
Assets at fair
value through the
income statement Other Total
Assets
Other non-current assets -
Fuel/lube oil - -
Trade receivables - -
Other current assets - -
Cash and cash equivalent - -
Assets at December , ,
USD million
Liabilities at fair
value through the
income statement
Other financial
liabilities at
amortized cost Total
Liabilities
Non-current interest-bearing debt - , ,
Non-current lease liabilities - , ,
Other non-current liabilities
Trade payables -
Current interest-bearing debt -
Current lease liabilities -
Other current liabilities
Liabilities December , ,
USD million
Assets at
amortized cost
Assets at fair
value through the
income statement Other Total
Assets
Other non-current assets -
Fuel/lube oil - -
Trade receivables - -
Other current assets - -
Cash and cash equivalent - -
Assets at December , ,
USD million
Liabilities at fair
value through the
income statement
Other financial
liabilities at
amortized cost Total
Liabilities
Non-current interest-bearing debt - , ,
Non-current lease liabilities - , ,
Other non-current liabilities
Trade payables -
Current interest-bearing debt -
Current lease liabilities -
Other current liabilities
Liabilities December , ,
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 18. Provisions and contingencies
Financial statements contents → Main contents →
Note 18. Provisions and contingencies
From time to time, the group will be involved in disputes and legal actions.
The operating entities WW Ocean and EUKOR have been part of anti-trust investi-
gations in several jurisdictions since 2012. During 2021 the proceedings with the
outstanding jurisdictions have been resolved, but some amounts are not yet paid
and have been reclassified from provisions to other current liabilities. The timeline
for the resolution of civil claims is more uncertain and in updated assessments of
claims resulted in additional provisions of USD 35 million. This amount was recog-
nized as an operating expense. During the year, the group paid USD 149 million in
customer settlements and fines to jurisdictions.
In 2021, USD 37 million were reclassified from Current provisions to Other current
liabilities as the amounts are no longer uncertain in amount or timing. USD 43 million
were reclassified from Non-current provisions to Current provisions.
In total, USD 44 million remain classified as provisions as amounts and timing are
uncertain. The provisions are expected to cover any pay-outs related to potential
civil claims as of December 31, 2021. At year-end, the group has recognized USD 120
million of provisions (USD 44 million) and other current liabilities (USD 76 million)
related to fines, civil claims and customer settlement. The ongoing investigations
of WW Ocean and EUKOR are confidential, and Wallenius Wilhelmsen is therefore
not able to provide more detailed comments.
In 2020, the main change was that USD 63 million and USD 62 million were reclas-
sified from Non-current provisions and Current provisions to Other non-current
liabilities and Other current liabilities, respectively, due to amounts no longer being
uncertain in amount or timing. Also, provisions were reduced by USD 12 million in
2020 due to commercial settlements.
Contingencies
The group is party to lawsuits related to laws and regulations in various jurisdictions
arising out of the conduct of its ordinary business activities. The potential civil
claims related to the anti-trust investigations are uncertain and as such there is a
contingency element in the provision made.
USD million
Current provisions
Non-current provisions
Total provisions presented in the consolidated balance sheet
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 19. Specification of balance sheet
Financial statements contents → Main contents →
Note 19. Specification of balance sheet
USD million
Other non-current assets
Long-term investments
Financial derivatives
Pension assets
Derivative financial asset
Investments in joint ventures and associates
Other non-current assets
Total other non-current assets
EUKOR owns .per cent of the shares in KOBC (Korean Ocean Business Corporation). These shares are held for long-term strategic
benefits and the group has made an irrevocable decision to present changes in fair value through other comprehensive income.
The investment has increased by USD million in value during and fair value at December , is estimated at USD
million. The increase is primarily related to improved results in KOBC's underlying investments.
USD million
Other current assets
Financial derivatives
Prepaid expenses
Total other current assets
Other non-current liabilities
Financial derivatives
Other non-current liabilities
Total other non-current liabilities
Other current liabilities
Financial derivatives
Accrued operating expenses
Other current liabilities
Total other current liabilities
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 20. Trade receivables and accounts payable
Financial statements contents → Main contents →
Note 20. Trade receivables and accounts payable
Trade receivables
At December 31, 2021, USD 91 million (2020: USD 95 million) in trade receivables
had fallen due. These receivables are related to a number of separate customers.
Historically, the percentage of credit losses on trade receivables has been low and
the group expects the receivables to be recoverable. The expected credit losses
on trade receivables are estimated by reference to past default experience of the
debtor and an analysis of the debtor's current financial position, adjusted for factors
that are specific to the debtors, general economic conditions of the industry and
an assessment of both the current as well as the forecast direction of conditions
at the reporting date. The group's customers are generally large, multi-national
OEMs and historic credit losses have been minor.
At December 31, 2021, the group's impairment allowance on receivables amounts
to approximately USD 4 million (2020: USD 3 million). Approx. 70 per cent of the
impairment allowance at relates to the logistics segment and 30 per cent to the
shipping segment both in 2021 and 2020. The aging profile of trade receivables
that are past due is as follows:
USD million
Aging of trade receivables fallen due
- days
- days
- days
Over days
Total fallen due
Trade receivables per segment
Shipping services
Logistics services
Government services -
Total trade receivables
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 20. Trade receivables and accounts payable
Financial statements contents → Main contents →
Trade payables
At December 31, 2021, USD 5 million in trade payables had fallen due (2020: USD 6
million). These payables refer to a number of separate suppliers and are related to
general business. The group expects to settle outstanding payables within 30-60
days.
See note 17 for more information on credit risk.
USD million
Trade payables per segment
Shipping services
Logistics services
Government services -
Holding -
Total trade payables
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 21. Restricted bank deposits and undrawn committed drawing rights
Financial statements contents → Main contents →
Note 21. Restricted bank deposits and undrawn
committed drawing rights
USD million
Payroll tax withholding account
USD million
Undrawn committed drawing rights
- Of which backstop for outstanding certificates and bonds with a remaining term of
less than months to maturity
Undrawn committed loans -
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 22. Related party transactions
Financial statements contents → Main contents →
Note 22. Related party transactions
Transactions with related parties
The two main shareholders of Wallenius Wilhelmsen ASA are Walleniusrederierna
AB and Wilh. Wilhelmsen Holding ASA with 37.8 per cent of the shares each. The
Wilhelmsen family controls Wilh. Wilhelmsen Holding ASA (WWH group) through
Tallyman AS, and the Wallenius Kleberg family controls Walleniusrederierna AB
through Rederi AB Soya (Soya group).
For participation in the board of directors, Thomas Wilhelmsen and Jonas Kleberg
were each paid USD 63 thousand. In addition, Jonas Kleberg received USD 5 thousand
for participation in the nomination committee.
The group has undertaken several transactions with related parties within Wilh.
Wilhelmsen Holding ASA (WWH), Wilservice AS, Wilhelmsen Maritime Services group
(WMS group) and Soya group. All transactions are entered into in the ordinary course
of business of the company and the agreements pertaining to the transactions are
all entered into on commercial market terms.
Wilh. Wilhelmsen Holding ASA (WWH) delivers services to the Wallenius Wilhelmsen
ASA group including human resources (“Shared Services”) and in-house services
such as canteen, post, switchboard and rent of oce facilities. Generally, Shared
Services are priced using a cost plus 5 per cent 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. In addition, the Soya group
delivers rent of oce facilities to the group.
Historically and currently the majority shareholders, WWH and Soya, further deliver
several services to the group, based on the principles set out in the OECD's transfer
pricing guidelines for group services, including, inter alia, cost plus basis or based
on independent broker estimates. In the event services are provided to both external
and internal parties, the prices set forth in the contracts regarding such services,
are on same level for both the external and the internal customers.
The services cover:
•
Ship management including crewing, technical and management service
•
Insurance brokerage
•
Agency services
•
Freight and liner services
•
Marine products to vessels
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 22. Related party transactions
Financial statements contents → Main contents →
In addition, Wallenius Marine (part of Soya Group) had the supervision of the
newbuilding. Their fee adds up to approximately USD 0.2 million (2020: 2 million)
and is capitalized with the vessels.
USD million
Income statement
Operating revenue from related parties related parties within WWH group
Operating revenue from related parties related parties within Soya group - -
Operating expenses to related parties within WWH group
Operating expenses to related parties within Soya group
Operating expenses top executive team
Operating expenses top executive team for is as reported for that year. For there has been changes to whom is included in
the top executive team. See separate remuneration report for further details regarding remuneration to top executives.
USD million
Balance sheet
Current receivables from related parties within Soya group
Non-current loan/payables to related parties within Soya group -
Current loan/payables to related parties within Soya group -
Non-current receivables from related parties within WWH group
Current receivables from related parties within WWH group
Non-current loan/payables to related parties within WWH group
Current loan/payables to related parties within WWH group
Current payables related to top executive team -
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Note 23. Events after the balance sheet date
Financial statements contents → Main contents →
Note 23. Events after the balance sheet date
After the onset of the pandemic in 2020, the company agreed with the banks of WW
Ocean to defer installments of about USD 70 million, previously scheduled for the
second half of 2020. This was done to strengthen the cash position during the period
of reduced activity. While deferred amounts are outstanding, the group is restricted
from paying out dividends. In January 2022, the group commenced prepayment of
the remaining USD 50 million of deferred amounts with the WW Ocean banks. By
early March 2022, all amounts are repaid and the related dividend block removed.
Dividend
The Board has decided to propose an ordinary dividend of USD 15 cents per share to
the Annual General Meeting on April 26, 2022, USD 9 cent per share payable in May
2022 and USD 6 cent per share payable in November 2022. In total, the proposed
dividend for 2021 is equivalent to about USD 63.5 million.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Reconciliation of alternative performance measures
Financial statements contents → Main contents →
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 the 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.
EBITDA adjusted is defined as EBITDA excluding items in the result which are not
regarded as part of the underlying business. Example 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 income (Operating revenue and gain/(loss) on sale of
assets) less Operating expenses excluding other gain/(loss), Other gain/(loss) and
depreciation and amortization. EBIT is used as a measure of operational profitability
excluding the eects 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 yearly average of Total assets less
Total liabilities plus total interest-bearing liabilities. CE is measured in order to
assess how much capital is needed for the operations/business to function and
evaluate if the capital employed can be utilized more eciently and/or if operations
should be discontinued.
Return on Capital employed (ROCE) is based on yearly 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.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Reconciliation of alternative performance measures
Financial statements contents → Main contents →
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 interest-
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 interest-bear-
ing 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 12 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 on yearly profit/(loss) after tax divided by yearly average
of equity. The group considers this ratio as appropriate to measure the return of
the period.
Net interest-bearing debt
Net interest-bearing debt divided by last twelve months adjusted EBITDA
Equity ratio
USD million Dec , Dec ,
Non-current interest-bearing loans and bonds , ,
Non-current lease liabilities , ,
Current interest-bearing loans and bonds
Current lease liabilities
Less Cash and cash equivalents
Net interest-bearing debt , ,
USD million
Net interest-bearing debt , ,
Last twelve months adjusted EBITDA
Net interest-bearing debt/adjusted EBITDA ratio .x .x
USD million Dec , Dec ,
Total equity , ,
Total assets , ,
Equity ratio .% .%
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Reconciliation of alternative performance measures
Financial statements contents → Main contents →
Reconciliation of Total revenue to EBITDA and EBITDA adjusted
USD million
Total revenue , ,
Operating expenses excluding other gain/(loss) (,) (,)
EBITDA
EBITDA shipping services
Loss on sale of vessel
Anti-trust expense
Scrapping of scrubber installations -
EBITDA adjusted shipping services
EBITDA logistics services
EBITDA adjusted logistics services
EBITDA government services
EBITDA adjusted government services
EBITDA holding/eliminations ()
Loss on sale of vessel ()
EBITDA adjusted holding/eliminations () ()
EBITDA adjusted
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Group
Reconciliation of alternative performance measures
Financial statements contents → Main contents →
Reconciliation of Total revenue to EBIT and EBIT adjusted
Reconciliation of total assets to capital employed and
ROCE calculation and return on equity calculation
USD million Notes
EBITDA
Other gain/loss ()
Depreciation and amortization , , () ()
(Impairment)/reversal of impairment () ()
EBIT ()
Anti-trust expense
Scrapping of scrubber installations -
Change in fair value of derivative financial asset ()
Reversal of/impairment asset held-for-sale ()
Impairment recycling vessels -
Impairment goodwill and intangible assets
Total adjustments
EBIT adjusted
Profit/(loss) for the period ()
Total adjustments
Profit/(loss) for the period adjusted ()
Yearly average
USD million
Total assets , ,
Less Total liabilities , ,
Total equity , ,
Total interest-bearing debt , ,
Capital employed , ,
EBIT annualized ()
EBIT annualized adjusted
ROCE .% (.%)
ROCE adjusted .% .%
Profit/(loss) for the period annualized ()
Profit/(loss) for the period annualized and adjusted ()
Return on equity .% (.%)
Return on equity adjusted .% (.%)
Financial statements
Wallenius Wilhelmsen ASA Parent
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Income statement
Financial statements contents → Main contents →
Income statement
Statement of comprehensive income
USD million Notes
Operating expenses
Employee benefits () ()
Impairment of investment in subsidiaries - ()
Other operating expenses () ()
Total operating expenses () ()
Net operating profit/(loss) () ()
Financial income and expenses
Financial income
Financial expenses () ()
Financial derivatives ()
Financial income/(expense) () ()
Profit/(loss) before tax () ()
Tax income/(expense) () ()
Profit/loss) for the year () ()
Transfers and allocations
(To)/from equity
Total transfers and allocations
USD million Notes
Profit/(loss) for the year () ()
Other comprehensive income:
Items that will not be reclassified to the income statement
Remeasurement post employment benefits, net of tax ()
Other comprehensive income, net of tax ()
Total comprehensive income () ()
Total comprehensive income attributable to:
Owners of the parent () ()
Total comprehensive income for the year () ()
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Balance sheet
Financial statements contents → Main contents →
Balance sheet
USD million Notes Dec , Dec ,
Assets
Non-current assets
Deferred tax assets
Investments in subsidiaries , ,
Other non-current assets
Total non-current assets , ,
Current assets
Other current assets
Cash and bank deposits
Total current assets
Total assets , ,
Equity and liabilities
Equity
Share capital
Retained earnings , ,
Total equity , ,
Non-current liabilities
Pension liabilities
Non-current interest-bearing debt
Financial derivatives
Other non-current liabilities to group companies
Total non-current liabilities
Current liabilities
Public duties payable
Other current liabilities
Total current liabilities
Total equity and liabilities , ,
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Cash flow statement
Financial statements contents → Main contents →
Cash flow statement
USD million
Cash flow from operating activities
Profit before tax () ()
Financial (income)/expense
(Gain)/loss from liquidation of subsidiary -
Impairment of investment in subsidiaries -
Change in net pension assets/liabilities () ()
Change in current assets from group companies () ()
Other change in working capital ()
Net cash provided by/(used in) operating activities () ()
Cash flow from investing activities
Investments in subsidiaries, associates and joint ventures - ()
Interest received
Net cash flow provided by/(used in) investing activities ()
Cash flow from financing activities
Proceeds from issuance of debt
Repayment of debt () ()
Purchase of own shares
Cash from financial derivatives () ()
Interest paid including interest rate derivatives () ()
Net cash flow provided by/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents ()
Cash and cash equivalents at January
Cash and cash equivalents at December
The company has several banks accounts in dierent currencies. The cash flow eect 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.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 1. Specification of income statement
Financial statements contents → Main contents →
Note 1. Specification of income statement
Expensed audit fee
USD million Note
Other operating expenses
Intercompany expenses () ()
Other administration expenses () ()
Total other operating expenses () ()
Financial income/(expenses)
Financial income
Dividend from subsidiaries and group contribution
Interest income
Net currency gain
Other financial income
Total financial income
Financial expenses
Interest expenses () ()
Net currency loss ()
Other financial expenses () ()
Total financial expenses () ()
Financial derivatives
Realized gain/(loss) related to currency derivatives () ()
Realized gain/(loss) related to interest rate derivatives () ()
Unrealized gain/(loss) related to currency derivatives ()
Unrealized gain/(loss) related to interest rate derivatives ()
Total financial derivatives ()
Financial income/(expenses) () ()
USD thousand
Statutory audit
Other assurance services
Total expensed audit fee
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 2. Employee benefits
Financial statements contents → Main contents →
Note 2. Employee benefits
Both the President and CEO and Chief Financial Ocer are employed by group
company Wallenius Wilhelmsen Ocean AS until end of 2020. From January 1, 2021,
they were transferred to Wallenius Wilhelmsen ASA together with the Chief Human
Resources Ocer (CHRO).
USD million
Salary/remuneration board of directors
Payroll tax
Pension cost
Other remuneration
Total employee benefits
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 2. Employee benefits
Financial statements contents → Main contents →
The board's remuneration for the financial year 2021 will be approved by the general
meeting April 24, 2022 and paid/expensed in 2022.
The board's remuneration for board members, for the financial year 2020 was
received in 2021.
At the AGM in 2021, Håkan Larsson resigned from the board of directors with Rune
Bjerke replacing him as chair.
At the AGM in 2020, two additional board members were elected – Rune Bjerke and
Anna Felländer. They did not receive any remuneration in 2020.
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, 2021.
USD thousand
Remuneration of the board of directors
Håkan Larsson
Rune Bjerke -
Thomas Wilhelmsen
Marianne Lie
Jonas Kleberg
Margareta Alestig
Anna Felländer -
Nomination committee
Anders Ryssdal
Jonas Kleberg
Carl Erik Steen
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 2. Employee benefits
Financial statements contents → Main contents →
The two main shareholders of Wallenius Wilhelmsen ASA are Walleniusrederierna
AB and Wilh. Wilhelmsen Holding ASA with 37.8 per cent of the shares each. 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).
Shares owned or controlled by representatives
of the group at December 31, 2021
Name
Number
of shares
Per cent
of shares
Board of directors
Rune Bjerke (chair) , .%
Thomas Wilhelmsen ,, .%
Marianne Lie - -
Jonas Kleberg - -
Margareta Alestig - -
Anna Felländer - -
Senior executives
Acting Chief Executive Ocer (CEO) and Chief Financial Ocer (CFO) – Torbjørn Wist , .%
Executive Vice President (EVP) and Chief Operating Ocer (COO) logistics services – Michael Hynekamp -
Chief Executive Ocer (CEO) shipping services – Erik Noeklebye , .%
Chief Digital Ocer (CDO) and acting Chief Human Resources Ocer (CHRO) – Simon White - -
Nomination Committee
Anders Ryssdal - -
Jonas Kleberg - -
Carl Erik Steen - -
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 3. Tax
Financial statements contents → Main contents →
Note 3. Tax
USD 48 million in valuation allowance related to deferred tax asset arising from tax loss
carry forward in Norwegian entities, see note 1 to the group accounts for additional
information.
USD million
Distribution of tax (income)/expense for the year
Change in deferred tax
Total tax (income)/expense
Basis for tax computation
Profit before tax () ()
% tax () ()
Tax eect from
Non-taxable income
Valuation allowance deferred tax assets
Currency transition from USD to local currency for tax purpose
Total tax (income)/expense
Eective tax rate (.%) (.%)
Deferred tax assets
Tax eect of temporary dierences
Current assets and liabilities
Non-current liabilities and provisions for liabilities
Tax losses carried forward - -
Deferred tax assets
Composition of deferred tax and changes in deferred tax
Deferred tax assets at January
Charged directly to equity ()
Change of deferred tax through income statement () ()
Currency translation dierences ()
Deferred tax assets at December
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 4. Investment in subsidiaries
Financial statements contents → Main contents →
Note 4. Investment in subsidiaries
Investments in subsidiaries are recorded 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 recorded.
Per year end 2020, the company wrote down the investment in Wallenius Wilhelmsen
Solutions Holding AS with USD 100 million and Wallenius Wilhelmsen International
Holding AS of USD 50 million.
USD million Business oce
Voting share/
ownership share
Book value
Book value
Wallenius Wilhelmsen Ocean Holding AS Lysaker, Norway % , ,
Wallenius Wilhelmsen International Holding AS Lysaker, Norway % , ,
ARC Group Holding AS Lysaker, Norway %
Wallenius Wilhelmsen Solutions Holding AS Lysaker, Norway %
Total investments in subsidiaries , ,
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 5. Equity
Financial statements contents → Main contents →
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 December , () , , ,
Profit for the year - - - - () ()
Other comprehensive income for the year - - - -
Total comprehensive income - - - - () ()
Sale of own shares - -
Group contribution given - - - -
Equity December , () , , ,
Equity December , () , , ,
Profit for the year - - - - () ()
Other comprehensive income for the year - - - - () ()
Total comprehensive income - - - - () ()
Sale of own shares - -
Equity December , () , , ,
The company's number of shares is as follows: Dec , Dec ,
Total number of shares ,, ,,
Own shares , ,
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 5. Equity
Financial statements contents → Main contents →
The largest shareholders at December 31, 2021
Shareholders Note Number of shares Per cent of shares
Walleniusrederierna AB ,, .%
Wilh. Wilhelmsen Holding ASA ,, .%
Folketrygdfondet ,, .%
The Bank Of New York Mellon Sa/Nv ,, .%
Verdipapirfondet Alfred Berg Norge ,, .%
Verdipapirfondet Storebrand Norge ,, .%
Verdipapirfondet Alfred Berg Gamba ,, .%
The Bank Of New York Mellon ,, .%
J.P. Morgan Bank Luxembourg S.A. ,, .%
State Street Bank And Trust Comp ,, .%
Other ,, .%
Total number of shares ,, .%
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 6. Employee retirement obligations
Financial statements contents → Main contents →
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, eects of compensation increases,
the company regularly reviews and continuously improves the design of its post-
employment defined benefit plans. Until 31 December 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 dierence
between return on assets and the hurdle rate.
Number of people covered by pension schemes at December
Previous employees not yet retired -
In retirement (inclusive disability pensions)
Total number of people covered by pension schemes
Financial assumptions applied for the valuation of liabilities
Discount rate .% .%
Anticipated pay regulation .% .%
Anticipated regulation of National Insurance base amount (G) .% .%
Anticipated regulation of pensions .% .%
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 6. Employee retirement obligations
Financial statements contents → Main contents →
USD million
Pension expenses
Current service cost
Interest expense on defined benefit obligation
Interest income on plan assets () ()
Net pension expenses
Remeasurements – Other comprehensive income
Eect of changes in financial assumptions ()
Eect of experience adjustments
Return on plan assets (excluding interest income) ()
Total remeasurements included in OCI ()
Tax eect of pension OCI ()
Net remeasurement in OCI ()
USD million
Pension obligations
Defined benefit obligations January
Current service cost
Interest expense
Benefit payments from employer () ()
Remeasurements – change in assumptions ()
Remeasurements – experience adjustments () ()
Eect of changes in foreign exchange rates ()
Pension obligations December
Gross pension assets
Fair value of plan assets January
Interest income
Employer contributions -
Return on plan assets (excluding interest income) ()
Eect of changes in foreign exchange rates ()
Gross pension assets December -
Total pension obligations
Defined benefit obligations
Fair value of plan assets -
Net pension liabilities
Payments from operations are estimated at USD . million in (: USD . million).
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 7. Interest-bearing debt
Financial statements contents → Main contents →
Note 7. Interest-bearing debt
Reconciliation of liabilities arising from financing activities
USD million Notes
Interest-bearing debt
Bonds
Repayment schedule for interest-bearing debt
Due in year
Due in year -
Due in year -
Due in year -
Due in year -
Total interest-bearing debt repayable
Amortized fees () ()
Book value interest-bearing debt
As of December , , weighted average interest rate on interest-bearing debt is . per cent.
USD million
Non-current
interest-bearing
debt
Current
interest-bearing
debt
Total
financing
activities
Net debt December ,
Cash flows from debt uptake -
Cash flow from debt repayments () () ()
Foreign exchange movement () () ()
Other non-cash movements -
Reclassification () -
Net debt December ,
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 8. Financial risk
Financial statements contents → Main contents →
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
Market risk
For the group as a whole, economic hedging strategies have been established in
order to reduce market risks in line with the financial strategy approved by the board
of directors. Separate economic hedging strategies have not been established for
the parent company for the market risks. As a consequence, financial derivatives
part of the group's economic hedging strategies, can be held by the company and
included in the parent company's accounts without any direct economic hedging
eect 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.
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.
Economic hedging of transaction risk
As a main principle, the group does not use financial instruments to economic hedge
cash flow risk in the operating entities but will make an assessment of the merits
to do so in periods when the USD is historically strong vs. other currencies. In order
to capitalize on the strong USD, the group has an economic hedging program for
CNY, NOK and SEK exposures in place as of both year-ends 2021 and 2020.
The portfolio of derivatives used to economically hedge the group's transaction risk
exhibit the following income statement sensitivity:
USD million
Income statement sensitivities of economic hedge program
Change in exchange rate's levels (%) (%) % % %
Transaction risk
USD/NOK spot rate . . . . .
Income statement eect (post tax) () ()
USD/SEK spot rate . . . . .
Income statement eect (post tax) () ()
USD/CNY spot rate . . . . .
Income statement eect (post tax) () ()
(Tax rate used is % which equals the Norwegian tax rate)
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 8. Financial risk
Financial statements contents → Main contents →
Economic hedging of translation risk
The company has outstanding NOK-denominated bonds of about NOK 4.6 billion
(USD 517 million). The corresponding amount was NOK 3.3 billion (USD 381 million)
for 2020. A large part of this debt (NOK 4.5 billion) has been economically hedged
against USD with basis 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 eect below USD 2 million are considered non-material. On
December 31, 2021, there were no material FX sensitivities.
All financial derivatives are booked against the income statement. Equity sensitiv-
ities will therefore equal sensitivities in the income statement.
Interest rate risk
The group's strategy, of which the company is a part, seeks to economically hedge
between 30-70 per cent of the net interest rate exposure, predominantly through
interest rate swaps and fixed rate loans.
Interest rate contracts held by the company corresponded to about 30 per cent
(2020: about 40 per cent) of its outstanding long-term interest exposure at Decem-
ber 31. However, when fixed rate debt is included, the economic hedge ratio is about
40 per cent (2020: about 50 per cent) as at December 31. It should be noted that
the company also takes on economic hedges on behalf of the group.
The company has not entered into any forward starting swaps (analogous for 2020).
The average remaining term of the existing loan portfolio is about 2.8 years, while
the average remaining term of the running interest rate derivatives and fixed interest
loans is approximately 1.8 years.
USD million
Maturity schedule economic interest rate hedges (nominal amounts)
Due in year -
Due in year -
Total economic interest rate hedges
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 8. Financial risk
Financial statements contents → Main contents →
Interest rate sensitivities
The company's interest rate risk originates from dierences 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 interest-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.
All financial derivatives are booked against the income statement in accordance
with the fair value accounting principle. Equity sensitivities will therefore equal
sensitivities in the income statement.
USD million
Change in interest rates' level (%) (%) % % %
Fair value sensitivities of interest rate risk
Estimated change in fair value (post tax) () ()
(Tax rate used is % which equals the Norwegian tax rate)
Assets Liabilities Assets Liabilities
USD million
Interest rate derivatives - -
Derivatives used for economic cash flow hedging - -
Derivatives used for economic translation risk hedging (basis swaps)
Total market value of derivatives
Book value equals fair value.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 8. Financial risk
Financial statements contents → Main contents →
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 considered
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 Holding AS.
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:
USD million Notes
Exposure to credit risk
Other non-current assets from group companies
Financial derivatives asset
Receivables from group companies
Other current receivables
Cash and cash equivalents
Total exposure to credit risk
Book value equals fair value.
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 8. Financial risk
Financial statements contents → Main contents →
Liquidity risk
The company's approach to managing liquidity is to secure that it will always have
sucient 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's liquidity risk is considered low in that it holds significant liquid assets.
At December 31, the company had USD 74 million (2020: USD 80 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
year
Between
and years
Between
and years
Bonds
Financial derivatives
Total interest-bearing debt
Current liabilities
(excluding next year's installment on interest-bearing debt and financial deriva-
tives) - -
Total gross undiscounted cash flows financial liabilities December
USD million
Less than
year
Between
and years
Between
and years
Bonds
Financial derivatives
Total interest-bearing debt
Current liabilities
(excluding next year's installment on interest-bearing debt and financial deriva-
tives) - -
Total gross undiscounted cash flows financial liabilities December
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 8. Financial risk
Financial statements contents → Main contents →
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 instruments 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 discovery.
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 discounting
the future contractual cash flows at the current market interest rate that is available
to the group for similar financial instruments.
Interest-bearing debt
USD million Fair value Book value
Bonds
Total interest-bearing debt December
USD million Fair value Book value
Bonds
Total interest-bearing debt December
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 8. Financial risk
Financial statements contents → Main contents →
Fair value hierarchy
There were no level 1 nor level 3 instruments in 2021 and 2020.
The quoted market price used for financial assets held by the group is the current
close price. The group held no instruments qualifying for inclusion in level 1.
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 dierent valuation techniques
typically applied by financial counterparties (banks) were described above. These
instruments – currency and interest rate derivatives – are included in level 2.
See note 17 to the group accounts for further information on financial risk and fair
value of interest-bearing debt.
USD million Level Total balance
Financial assets at fair value through income statement
- Financial derivatives
Total assets December
Financial liabilities at fair value through income statement
- Financial derivatives
Total liabilities December
USD million Level Total balance
Financial assets at fair value through income statement
- Financial derivatives
Total assets December
Financial liabilities at fair value through income statement
- Financial derivatives
Total liabilities December
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 8. Financial risk
Financial statements contents → Main contents →
Financial instruments by category
USD million
Assets at
amortized cost
Assets at fair
value through the
income statement Total
Assets
Other non-current assets -
Financial derivatives -
Other current assets -
Cash and cash equivalents -
Assets at December -
USD million
Liabilities at fair
value through the
income statement
Other financial
liabilities at
amortized cost Total
Liabilities
Non-current interest-bearing debt -
Financial derivatives -
Other non-current liabilities -
Current interest-bearing debt -
Other current liabilities -
Liabilities at December
USD million
Assets at
amortized cost
Assets at fair
value through the
income statement Total
Assets
Other non-current assets -
Financial derivatives -
Other current assets -
Cash and cash equivalents -
Assets at December -
USD million
Liabilities at fair
value through the
income statement
Other financial
liabilities at
amortized cost Total
Liabilities
Non-current interest-bearing debt -
Financial derivatives -
Other non-current liabilities -
Current interest-bearing debt -
Other current liabilities -
Liabilities at December
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 9. Specification of balance sheet
Financial statements contents → Main contents →
Note 9. Specification of balance sheet
The fair value of current receivables and payables is virtually the same as the carried
amount, since the eect of discounting is insignificant.
USD million Notes
Other non-current assets
Other non-current assets from group companies
Financial derivatives asset
Total other non-current assets
Other current assets
Receivables from group companies
Financial derivatives asset
Other current receivables
Total other current assets
Other current liabilities
Account payables
Payables to group companies
Next year's installment on interest-bearing debt
Financial derivatives liability
Other current liabilities
Total other current liabilities
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 10. Transactions with related party
Financial statements contents → Main contents →
Note 10. Transactions with related party
The two main shareholders of Wallenius Wilhelmsen ASA are Walleniusrederierna
AB and Wilh. Wilhelmsen Holding ASA with 37.8 per cent of the shares each. The
Wilhelmsen family controls Wilh. Wilhelmsen Holding ASA through Tallyman AS,
and the Wallenius Kleberg family controls Walleniusrederierna AB through Rederi
AB Soya (Soya group).
For participation in the board of directors, Thomas Wilhelmsen and Jonas Kleberg
were each paid USD 63 thousand. In addition, Jonas Kleberg received USD 5 thou-
sand 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
oce facilities. Generally, Shared Services are priced using a cost plus 5 per cent
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
Income statement
Operating expenses to subsidiaries () ()
Dividend from subsidiaries and group contribution
Other financial income from subsidiaries
Financial expenses to subsidiaries () ()
USD million Notes
Balance sheet
Non-current assets from subsidiaries
Current receivables from subsidiaries
Non-current liabilities to subsidiaries
Current payables to subsidiaries
Wallenius Wilhelmsen – Annual Report 2021
Wallenius Wilhelmsen ASA Parent
Note 11. Events after the balance sheet date
Financial statements contents → Main contents →
Note 11. Events after the balance sheet date
In January 2022, wecommencedprepayment of the remaining USD 50 million of
deferred amounts with the WW Ocean banks. All amounts will be prepaid by early
March, after which the related dividend block will be removed.
Dividend
The Board has decided to propose an ordinary dividend of USD 15 cents per share
to the Annual General Meeting on April 26, 2022, USD 9 cent per share payable in
May and USD 6 cent per share payable in November. In total, the proposed dividend
for 2021 is equivalent to about USD 63.5 million.
Through our sustainability reporting, we communicate our
performance and impacts on a wide range of sustainability
topics such as planet, people, principles of governance and
prosperity parameters.
The sustainability statements specifically provide overviews
of our sustainability performance data and GRI, SASB indices,
TCFD indices and EU Taxonomy reporting.
Sustainability
statements
Contents →
Wallenius Wilhelmsen – Annual Report 2021
Sustainability statements
Sustainability Performance Data
Contents →
Sustainability Performance Data
KPI & Description
Planet
GHG emissions
CO
e intensity from Shipping services, gCO
e / tonne km . . .
.
Total Scope emissions, tonne CO
e ,, ,, ,, ,,
-Shipping ,, ,, ,,
,,
-Logistics , , , ,
Total Scope emissions, tonne CO
e , , , -
-Shipping - - - -
-Logistics , , , -
Energy use
Total electrical consumption, Logistics services, in megawatt hours , , , ,
) Total energy consumed in terajoule (TJ) , , - -
) percentage heavy fuel oil .% .% - -
) percentage renewable, Shipping services % % - -
Air quality
Average sulfur content of fuel, Shipping services, percentage . . . .
Total SOx emissions of fleet under group control, in tonnes , , , ,
Relative NOx emissions from owned fleet (as an average of
International Air Pollution Prevention certification values) . . . .
Biodiversity
Total number of significant spills (> liters), Shipping services
Number of non-compliant environmental breeches (release, spill
or discharge) reported to authorities, Logistics services -
- percentage of owned fleet complying with ballast water exchange; . . - -
- percentage of owned fleet complying with ballast water treatment . . - -
Percentage of owned fleet enrolled in hull fouling management
program
Waste management
Total waste landed to shore reception facilities (owned fleet) in cbm's , , , ,
Average amount of waste landed to shore reception per vessel
(owned fleet) in cbm's . . . .
Food waste discharged to sea, in cbm's
Average amount of food waste discharged to sea, per vessel, in cbm's . . . .
Water consumption from Logistics services, in liters ,, ,, ,, -
Waste sent to landfills, generated from Logistics services, in tonnes , , , -
This data, originally disclosed as CO
2
, has been recalculated as C02e according to the GLEC framework and is being restated in this report.
Wallenius Wilhelmsen – Annual Report 2021
Sustainability statements
Sustainability Performance Data
Contents →
KPI & Description
PEOPLE
Diversity, equity, and inclusion
Total number of employees , , , ,
- Asia Pacific , , ,
- EMEA , , , ,
- America , , , ,
Gender balance, all employees, M:F :
- - -
Gender balance, oce workers, M: F : : : :
Gender balance, production workers, M:F :
- - -
Gender balance of oce workers in senior roles, M:F ratio : : - -
Number of females in senior roles - -
Earnings ratio, percentage Women:Men
- Sweden - - -
- Norway - - -
- Korea - - -
- USA - - -
Diversity score from employee engagement survey, (score -) . . - -
Health, safety & wellbeing
Work related fatalities
Number of marine casualties, percentage classified as very serious - -
Lost Time Incident Frequency, Shipping services
. . . .
Lost Time Incident Frequency, Logistics services
. . . .
a) Number of port state control detentions - -
b) Average number of deficiencies per vessel inspection, Shipping . - -
Number of road accidents and incidents, road transport
- -
Safety Measurement System BASIC percentiles for
) unsafe driving - -
) hours of service compliance - -
) driver fitness - -
) controlled substances/alcohol - -
) vehicle maintenance - -
) hazardous Materials Compliance; road transport
- - - -
Voluntary turnover rate of drivers, road transport, in % .% .% - -
Involuntary turnover rate of drivers, road transport, in % % %
Annual retention rate of Shipping crew % % % %
Absenteeism, Logistics services
(days away due to illness per hours worked) .% .% % -
Newly added for Annual Report 2021
Per million man-hours
Please see SASB Road Transport standards for more details on this KPI.
Wallenius Wilhelmsen – Annual Report 2021
Sustainability statements
Sustainability Performance Data
Contents →
KPI & Description
Training and development
Oce workers invited to take a performance dialogue % % % %
Human and labor rights
Number and % of retired vessels recycled according to responsible
recycling policy
; % ; %
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 lowest rankings
in Transparency International Corruption Perception Index - -
Total amount of monetary losses as a result of legal proceedings
associated with bribery or corruption - -
Governance body members, employees and business partners who
have received training on the organization's anti-corruption policies
and procedures, % - - -
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 - - -
Security
Number of incidents of theft, Logistics services
Number of security breaches on board company owned vessels
Number of substantiated breaches of privacy and data security
Prosperity
Quality
Average unplanned o-hire across the entire owned fleet, in hours . . . .
Tax practices
Number of tax incentives or special tax agreements with authorities
A vessel is considered recycled for this KPI, when the vessel recycling project begins.
The definition of breach for this KPI is “a security violation in which sensitive, protected or confidential data is copied, transmitted,
viewed, stolen or used by an individual unauthorized to do so.” (Source: US DHHS)
Wallenius Wilhelmsen – Annual Report 2021
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 regula-
tion 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 line with the requirements specified by the EU Taxonomy reporting framework
for 2021, we have focused on identifying which of our activities should be consid-
ered eligible. In 2022, we will focus on assessing the criteria for alignment, and on
establishing systems for monitoring and reporting on KPIs. 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
Wilhelmsen group, and the estimated proportion of which is considered eligible
and non-eligible under the EU Taxonomy regulation.
The majority of our activities are classified as eligible under “Sea and coastal freight
water transport, vessels for port operations and auxiliary 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.
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.
Revenue
OPEX
CAPEX
Economic activities, USDm % USDm % USDm %
Taxonomy-eligible activities , % , % %
Sea and coastal freight water transport, vessels for port
operations and auxiliary activities (.) , % , % %
Freight transport services by road (.) % % %
Taxonomy-non-eligible activities % % %
Other activities (e.g. terminal operations and technical services) % % %
Total , % , % %
Revenue is for the purpose of this reporting defined as identical to “Turnover”, which is the term used in the EU Taxonomy
OPEX is defined as all operating expenses linked to the eligible economic activities
CAPEX is defined as all capital expenditure related to assets or processes that are associated with eligible economic activities,
such as upgrades of vessels
Wallenius Wilhelmsen – Annual Report 2021
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.
This report has been prepared in accordance with the GRI Standards: Core option.
The table below shows Wallenius Wilhelmsen reporting relative to the GRI Stan-
dards guidelines.
GRI § Description Source (page no.)
Organizational profile
- Name of the organization Wallenius Wilhelmsen ASA
- Activities, brands, products, and services Wallenius Wilhelmsen in brief (p. )
- Location of headquarters Strandveien , Lysaker, Norway
- Location of operations Wallenius Wilhelmsen in brief (p. )
- Ownership and legal form Wallenius Wilhelmsen in brief (p. )
Principles of governance (p. )
- Markets served Wallenius Wilhelmsen in brief (p. )
- Scale of the organization Wallenius Wilhelmsen in brief (p. )
- Information on employees and other workers Sustainability Performance Data (p. )
- Supply chain Prosperity (p. )
- Significant changes to the organization and its supply chain Highlights for (p. )
- Precautionary Principle or approach Please see Wallenius Wilhelmsen's environmental policy where we discuss
our approach to tackling environmental challenges and how we take a
precautionary approach
- External initiatives UN Global Compact, LEO Coalition, Getting to Zero Coalition, Ship Recycling
Transparency Initiative
- Membership of associations In addition to the above:
The Ocean Exchange, Norwegian Shipping Association, World Shipping
Council, Maritime Anti Corruption Network ( MACN ), National Association of
Waterfront Employers, Norwegian Ship owners Association, Norwegian Sea Law
Association, The Association of European Vehicle Logistics (ECG), American
Association of Port Authorities, National Freight Transportation Association
Strategy
- Statement from senior decision-maker Words from CEO (p. )
Ethics and integrity
- Values, principles, standards, and norms of behavior Message from the board (p. )
Governance
- Governance structure Wallenius Wilhelmsen in brief (p. )
Principles of governance (p. )
Stakeholder engagement
- List of stakeholder groups Employees, customers, shareholders, investors & financial community, industry
peers, regulators and government, ports and port communities
General disclosures
Wallenius Wilhelmsen – Annual Report 2021
Sustainability statements
GRI Index
Contents →
GRI § Description Source (page no.)
- Collective bargaining agreements As stated in our Code of Conduct; Subject to the applicable laws and regu-
lations, we cooperate with employee representatives with the aim to achieve
balance between the interests of the company and interests of the employee.
Total number of US Production Employees represented by a union = or
%
Total number of US production workers are ,, of which & are repre-
sented by a union.
These employees work at three () locations and are represented by four ()
separate Collective Bargaining Agreements.
- Identifying and selecting stakeholders Our reporting approach (p. )
- Approach to stakeholder engagement We carry out regular stakeholder engagement through multiple means includ-
ing sector-specific initiatives and working groups. In , 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 related to our report preparation process.
- Key topics and concerns raised No specific new topics or concerns were identified related to the sustainability
reporting in .
Reporting practice
- Entities included in the consolidated financial statements Wallenius Wilhelmsen in brief (p. )
Principles of governance (p. )
- Defining report content and topic Boundaries Our Reporting Approach (p. )
- List of material topics Principles of governance (p. )
- Restatements of information No material restatements. See notes where applicable.
- Changes in reporting We have consolidated material topics into pillars; People, Planet Prosperity
and Principles of governance. The reporting scope and organizational bound-
aries remain unchanged.
- Reporting period January , - December ,
- Date of most recent report Annual Report
- Reporting cycle Yearly
- Contact point for questions regarding the report Anette.Ronnov@walwil.com
- Claims of reporting in accordance with the GRI Standards GRI Standards Core
- GRI content index Wallenius Wilhelmsen GRI Index (this document)
Wallenius Wilhelmsen – Annual Report 2021
Sustainability statements
GRI Index
Contents →
WWL topic
/ § no. Description
Disclosure or Source
(page number) Omission
Reason
for omission
Explanation
for omission
People
GRI – Management approach
- Explanation of the
material topic and
its boundary
Our reporting approach (p. ), People (p. )
- The management
approach and its
components
People (p. )
- Evaluation of the
management
approach
People (p. )
GRI – Occupational health and safety ()
- Occupational
health and safety
management
system
People chapter, section on Health & Safety (p. )
- Hazard identifica-
tion, risk assess-
ment, and incident
investigation
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 author-
ity 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 personnel, ship and protection of the environment. Non-
conformities, accidents and hazardous situations are reported
to the Company, investigated and analyzed with the objec-
tive of improving safety and pollution prevention, including
measures intended to prevent recurrence. At logistics services,
the company a) requires Hazard Assessments, which includes
on-site hazard identification 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 addi-
tion 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. Remind-
ers are automatically sent by the system to ensure risks are
addressed and results are discussed regularly at daily opera-
tions manager meetings. The company uses Systems Evalua-
tions, weekly HSE Audits and Programme Manager and audits
to ensure the quality of these processes, and system changes
are identified and approved at quarterly management reviews.
All workers are protected against reprisals per the Safety-
First program documentation and can stop actions they deem
unsafe. The company's Ethics Hotline and Issues & Opportuni-
ties Register are tools for all employees and contractors to enter
HSQ risks from their mobile devices.
Please refer to the People-section for more information (p. )
- Occupational
health services
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 identifica-
tions, hazard assessments and job safety analyses contribute
to finding and eliminating hazards.
Read about our global safety committee in the Health and
Safety chapter (p. )
- Worker participa-
tion, consultation,
and communica-
tion on occupa-
tional 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 standardized format covering safety topics
before every shift at all sites. Safety committee members play a
vital role supporting the Safety st culture.
Please refer to the People-section for more information (p. )
Material topics
Wallenius Wilhelmsen – Annual Report 2021
Sustainability statements
GRI Index
Contents →
WWL topic
/ § no. Description
Disclosure or Source
(page number) Omission
Reason
for omission
Explanation
for omission
- Worker training on
occupational health
and safety
At shipping services, the company complies with ISM Code
Ch., and ensures that vessel masters are properly qualified for
command; fully conversant with the Company's Safety Manage-
ment 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 require-
ments; and appropriately manned in order to encompass all
aspects of maintaining safe operation on board. Instructions
essential to be provided prior to sailing are identified, docu-
mented 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 eectively 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 opera-
tions, including the generation of a health and safety plans or
risk management strategies for project work.
Please refer to the People-section for more information (p. )
- Promotion of
worker health
Logistics employees have access to two Company-sponsored
services:
- Active employees are eligible to enroll into company spon-
sored 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 stang services,
contract (Temporary ) employees are not eligible for this
coverage.
The company also provides an employee wellness program.
These services include healthy lifestyle coaching and deep,
clinically-focused condition management. Ocean crew are
directly employed by ship management suppliers hired by WW.
Healthcare is provided to ocean crew by ship management
company and paid by WW. We also pay for additional health-
care insurance for families. The ship management companies
are held responsible 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 require-
ments. Our marine operations management team can have
vessels audited for compliance 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.
Please refer to the People-section for more information (p. )
- Prevention and
mitigation of occu-
pational health
and safety impacts
directly linked by
business relation-
ships
At logistics services, when working with heavy equipment and
products, there are often health and safety risks that may not
be directly under our control. Therefore we actively communi-
cate 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 to show our suppliers, customers and other
partners how to work safely with heavy equipment.
For shipping services, in compliance with ISM Code Chapter
, 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 under-
taking delegated ISM-related tasks are acting in conformity
with the Company's responsibilities. Management personnel
responsible for the vessel or area involved is required to take
timely corrective action on deficiencies found.
See 'Health & Safety' in the People section for more information
(p. )
Wallenius Wilhelmsen – Annual Report 2021
Sustainability statements
GRI Index
Contents →
WWL topic
/ § no. Description
Disclosure or Source
(page number) Omission
Reason
for omission
Explanation
for omission
GRI - Work-related
injuries
People chapter, section on Health & Safety (p. ) Oce workers
are not included
in the LTI statistic
and oce-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 employees and
contractors.
Data not available
GRI – Training and education
- Percentage of
employees receiv-
ing regular perfor-
mance and career
development
reviews
People (p. )
Principles of governance
GRI – Management approach
- Explanation of the
material topic and
its boundary
Principles of governance (p. )
- The management
approach and its
components
Principles of governance (p. ), Planet (p. ), People (p. ),
Prosperity (p. )
- Evaluation of the
management
approach
Principles of governance (p. ), Planet (p. ), People (p. ),
Prosperity (p. )
GRI – Socioeconomic compliance
- Non-compliance
with laws and regu-
lations in the social
and economic area
(sanction laws and
regulations)
Principles of governance (p. )
GRI – Tax
- Approach to tax Prosperity, section on Tax practices (p. ) We do not have a
publicly available tax
strategy. Corpo-
rate tax aairs are
the chief financial
ocer's
responsibility and
extend to all juris-
dictions where the
company operates.
The tax position
taken in all signif-
icant transactions
is supported by
obtaining an exter-
nal opinion.
Wallenius Wilhelmsen own disclosure – security at sea
WALWIL- Number of secu-
rity breaches on
vessels owned
by WW
We had security breaches on our own vessels.
Wallenius Wilhelmsen own disclosure – data security
WALWIL- Number of
substantiated
breaches of privacy
and data security
We had zero privacy and data security incidents.
Wallenius Wilhelmsen – Annual Report 2021
Sustainability statements
GRI Index
Contents →
WWL topic
/ § no. Description
Disclosure or Source
(page number) Omission
Reason
for omission
Explanation
for omission
Planet
GRI – Management approach
- Explanation of the
material topic and
its boundary
Planet (p. )
- The management
approach and its
components
Planet (p. )
- Evaluation of the
management
approach
Planet (p. )
GRI – Euents and waste
- Waste by type and
disposal method
Planet (p. )
Sustainability Performance Data (p. )
We do not currently
report a breakdown
by hazardous versus
non-hazardous
waste nor waste
treatment method
Data not available This is challenging
due to the global
nature of our oper-
ations and variable
local waste and
recycling practices.
- Significant spills Message from the board (p. )
Sustainability Performance Data (p. )
GRI – Environmental compliance
- Non-compliance
with environmental
laws and regula-
tions
Planet (p. ) Currently we do not
report total value of
fines, total number
of non-monetary
sanctions or the
cases brought
through dispute
resolution mech-
anism
Data not available Currently we do not
collect individual
data related to envi-
ronmental laws and
regulations. We will
explore the feasibil-
ity of doing this in
.
GRI – Management approach
- Explanation of the
material topic and
its boundary
Planet (p. )
- The management
approach and its
components
Planet (p. )
- Evaluation of the
management
approach
Planet (p. )
GRI – Emissions
- Direct (Scope )
GHG emissions
Planet (p. )
- Energy indirect
(Scope ) GHG
emissions
Planet (p. )
- Greenhouse gas
emission intensity
Planet (p. )
- Nitrogen oxides
(NOx), sulfur oxides
(SOx), and other
significant air emis-
sions
Planet (p. ) We do not report
total NOx emissions
We have not estab-
lished a system to
calculate total NOx
emissions
It is technically not
possible to report
on this, because we
cannot measure it.
Prosperity
GRI - Management approach
- Explanation of the
material topic and
its boundary
Prosperity (p. )
Wallenius Wilhelmsen – Annual Report 2021
Sustainability statements
GRI Index
Contents →
WWL topic
/ § no. Description
Disclosure or Source
(page number) Omission
Reason
for omission
Explanation
for omission
- The management
approach and its
components
Prosperity (p. )
- Evaluation of the
management
approach
Prosperity (p. )
Wallenius Wilhelmsen own disclosure- Quality of Service
WALWIL- Unplanned o-hire Prosperity (p. )
Wallenius Wilhelmsen – Annual Report 2021
Sustainability statements
SASB Index
Contents →
Topic Accounting metric Unit of measure Data SASB code
Greenhouse
Gas Emissions
CO
Emissions
Gross global Scope emissions: Financial control approach Metric tonnes CO-e ,, TR-MT-a.
Discussion of long-term and short-term strategy or plan to
manage Scope emissions, emissions reduction targets,
and an analysis of performance against those targets
Qualitative description See Planet, PP. - TR-MT-a.
Energy consumed
Total energy consumed, shipping services Gigajoules (GJ) ,,
TR-MT-a.
Percentage of energy from heavy
fuel (%)
.%
Percentage of energy from renew-
able/low-carbon sources (%)
%
EEDI
Average Energy Eciency Design Index (EEDI) for new ships Grams of CO per tonne-nauti-
cal mile
. TR-MT-a.
Air Quality Other emissions to air
() NOx (excluding NO) Metric tonnes Data not available
TR-MT-a.() SOx Metric tonnes ,
() particulate matter Metric tonnes 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-a.
Implemented ballast water
() exchange Percentage (%) .%
TR-MT-a.
() treatment Percentage (%) .%
Spills and releases to the environment
() number Number
TR-MT-a.
() aggregate volume Cubic meters (m) .
Employee
Health & Safety
Lost time incident rate
Lost time incident rate (LTIR)
Rate
Shipping: .
Logistics: .
TR-MT-a.
Business Ethics Corruption index
Number of calls at ports in countries that have the lowest rank-
ings in Transparency International's Corruption Perception Index
Number TR-MT-a.
Corruption
Total amount of monetary losses as a result of legal proceedings
associated with bribery or corruption
Reporting currency . TR-MT-a.
Accident
& Safety
Management
Marine casualties
Incidents Number
TR-MT-a.
Very serious marine casualties Percentage (%)
Conditions of Class
Number of Conditions of Class or Recommendations Number Data not available TR-MT-a.
Port State Control
() deficiencies
Rate
. average deficiencies
per inspection
TR-MT-a.
() detentions Number
SASB Index
Wallenius Wilhelmsen – Annual Report 2021
Sustainability statements
TCFD Index
Contents →
Theme Recommendation See section, page:
Governance
a. Describe the board's oversight of climate-related risks and opportunities. Principles of governance, p.
b. Describe management's role in assessing and managing climate-related risks
and opportunities.
Planet, pp. -
Strategy
a. Describe the climate-related risks and opportunities the organization has identified
over the short, medium, and long term.
Planet, pp. -
b. Describe the impact of climate-related risks and opportunities on the organization's
businesses, strategy, and financial planning
Planet, pp. -
c. Describe the resilience of the organization's strategy, taking into consideration
dierent climate-related scenarios, including a °C or lower scenario
The organization will be able to make this disclosure
after we start to use scenario analyses in .
Risk
Management
a. Describe the organization's processes for identifying and assessing climate-related risks. Risk exposures, p. and Planet, pp. -
b. Describe the organization's processes for managing climate-related risks. Planet, pp. -
c. Describe how processes for identifying, assessing, and managing climate-related risks
are integrated into the organization's overall risk management.
Risk exposures , p. and Planet, pp. -
Metrics &
targets
a. Disclose the metrics used by the organization to assess climate-related risks and
opportunities in line with its strategy and risk management process.
Planet, pp. ;
b. Disclose Scope , Scope and, if appropriate, Scope greenhouse gas (GHG)
emissions and the related risks.
Planet, "pp. -; for Scope and Scope
emissions.
~ tonnes CO
e is estimated following
SBTi's generic industry guidance.
A comprehensive Scope assessment is underway
c. Describe the targets used by the organization to manage climate-related risks
and opportunities and performance against targets.
Planet, pp. -;
TCFD Index
Wallenius Wilhelmsen – Annual Report 2021
Responsibility statement
Contents →
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, 2021.
We confirm, to the best of our knowledge, that as of December 31, 2021:
•
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 annual report meets the requirements of the Sustainability Account-
ing Standards Board's (SASB) Marine Transportation and Road Transporta-
tion as well as the GRI standards (Core Option) for sustainability reporting
•
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
Wallenus Wilhelmsen ASA Annual Report 2021 for signing.pdf
Name Method Signed at
JONAS KLEBERG BANKID 2022-03-22 18:09 GMT+01
Lie, Marianne BANKID_MOBILE 2022-03-22 17:57 GMT+01
Bjerke, Rune BANKID_MOBILE 2022-03-22 17:39 GMT+01
Kerstin Margareta Alestig Johnson BANKID 2022-03-22 17:38 GMT+01
Wist, Torbjørn Mogård BANKID_MOBILE 2022-03-22 17:29 GMT+01
Anna Elsa Felländer BANKID 2022-03-22 20:13 GMT+01
Wilhelmsen, Thomas BANKID_MOBILE 2022-03-22 18:16 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: 8699457EAC0547719799C741B599E346
Wallenus Wilhelmsen ASA Annual Report 2021 for signing.pdf
Name Method Signed at
JONAS KLEBERG BANKID 2022-03-22 18:09 GMT+01
Lie, Marianne BANKID_MOBILE 2022-03-22 17:57 GMT+01
Bjerke, Rune BANKID_MOBILE 2022-03-22 17:39 GMT+01
Kerstin Margareta Alestig Johnson BANKID 2022-03-22 17:38 GMT+01
Wist, Torbjørn Mogård BANKID_MOBILE 2022-03-22 17:29 GMT+01
Anna Elsa Felländer BANKID 2022-03-22 20:13 GMT+01
Wilhelmsen, Thomas BANKID_MOBILE 2022-03-22 18:16 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: 8699457EAC0547719799C741B599E346
Lysaker, March 22, 2022
The board of directors of Wallenius Wilhelmsen ASA
Wallenius Wilhelmsen – Annual Report 2021
Responsibility statement
Contents →
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 -a,
para.
Information regarding the nature and location of the business, including information on any
branch oces
Wallenius Wilhelmsen in brief
Message from the board
Principles of governance
Group financial statements:
- note
- note
-
-
-
-
-
Section -a,
para.
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
-
-
-
Section -a,
para.
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 -
Section -a,
para.
Information regarding any financial risk that is significant to the evaluation of the company's
assets, liabilities, financial position and results. This information shall include goals and strate-
gies that have been determined for managing the financial risk, including the strategy for hedg-
ing 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
-
-
-
Section -a,
para. ,
cfr. Section -
Information regarding the going concern assumption Message from the board -
Section -a,
para.
Proposal for the allocation of profit or settlement of loss Message from the board -
Section -a,
para.
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
-
-
Section -a,
para.
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
-
-
Section -a,
para.
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 -
Section -a,
para.
cfr. Securities
Trading Act Section
-a ()-()
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 eect, alter
or terminate as a result of a takeover bid, and a description of those terms
N/A
Section -b Report on corporate governance Principles of governance -
Section -c,
para.
Report on social responsibility Message from the board
People
Planet
Prosperity
-
-
-
-
Wallenius Wilhelmsen – Annual Report 2021
Auditor's report
Contents →
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 2021, the income statement, statement of
comprehensive income and cash flow statement 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 2021, the income statement,
statement of comprehensive income, statement of changes in equity and cash flow statement
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 2021, 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 financial statements give a true and fair view of the financial position of the Group as at 31
December 2021, 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 laws and regulations 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
Wallenius Wilhelmsen – Annual Report 2021
Auditor's report
Contents →
Independent Auditor's Report - Wallenius Wilhelmsen ASA
(2)
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 12 years from the election by the general meeting of the
shareholders on 12 February 2010 for the accounting year 2010.
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 2020 audit, we focused on the impairment assessments of goodwill as well as the
provision related to anti-trust investigations as these risks remain relevant. Since no indicators for
impairment related to the vessels were identified, we did not focus on this matter to the same extent as
we did for the 2020 audit.
Key Audit Matter How our audit addressed the Key Audit Matter
Impairment Assessment for goodwill
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). The net book value of
goodwill as of 31 December 2021 is USD
230 million. In line with IFRS
requirements, an impairment test for
goodwill was performed at 31 December
2021 resulting in an impairment of USD
76 million that was recognized for the
cash-generating unit Wallenius
Wilhelmsen Ocean which is part of the
Shipping services operating segment. The
goodwill impairment assessments at 31
December 2021 involved significant
management judgement in preparing
cash flow forecasts for the applicable
reporting segments and in assessing the
discount rate. We focused on goodwill
due to the significance of the amount in
the balance sheet and the significant
judgment applied by management in
We evaluated and challenged managements’
impairment assessments and the process by which
these were performed. We assessed managements’
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. As evidence of reliability of
Groups’ forecasting process, we challenged
management on several of the assumptions used in the
impairment model, especially the discount rate, the
long-term growth rate and capital expenditure.
Through our testing and discussion, we were able to
conclude that management's assumptions were
reasonable. In order to challenge each of the
assumptions in the forecast, we held discussions with
management to corroborate our testing.
We reviewed managements’ authorized budgets and
forecasting. 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 analysis to key
assumptions applied. These indicated some headroom
Wallenius Wilhelmsen – Annual Report 2021
Auditor's report
Contents →
Independent Auditor's Report - Wallenius Wilhelmsen ASA
(3)
assessing the potential need for
impairment.
for all key assumptions for the segments except for the
CGU Wallenius Wilhelmsen Ocean where an
impairment was recognized. We also verified the
mathematical accuracy of the model. We found that the
model was calculating net present values as intended.
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 considered the appropriateness
of the related disclosures in note 1, 8 and 11 to the
financial statements for the Group to the requirements
of the applicable financial reporting framework, IFRS,
including IAS 36 – Impairment of assets and found the
disclosures to be adequate.
Provision related to anti-trust
investigations
We refer note 1 (Significant accounting
judgements, estimates and assumptions)
and note 18 (Provisions and
contingencies). The provision for anti-
trust investigations and civil claims
amounts to USD 44 million as of 31
December 2021 and is both material and
involves significant judgement by
management. We focused on this area
due to the relative size of the amounts
and the significant judgement used in
arriving at their best estimate for anti-
trust provision.
We obtained a breakdown of the provision. We
assessed managements’ accounting policy against IFRS
and obtained explanations from management as to how
the specific requirements of the standards, in particular
IAS 37 – Provisions, contingent liabilities and
contingent assets, were met.
We obtained explanations from management, general
counsel and external counsel for the amounts provided
for provisions related to anti-trust investigations as
well as the possibility for civil claims.
We tested the reliability of the estimate made by
management with reference to the provision made as of
31 December 2017, 2018, 2019 and 2020 and the
rulings and settlements during the four years to 31
December 2021.
The calculation of a provision is inherently uncertain.
Changes to the assumptions used could result in
different amounts compared to those calculated by
management. We considered that the above
assessments made by management were within a
reasonable range.
In reading the note disclosures, we concluded that the
note appropriately describes the risks involved and
judgments made by management.
Wallenius Wilhelmsen – Annual Report 2021
Auditor's report
Contents →
Independent Auditor's Report - Wallenius Wilhelmsen ASA
(4)
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 appears 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 legal 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.
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
Wallenius Wilhelmsen – Annual Report 2021
Auditor's report
Contents →
Independent Auditor's Report - Wallenius Wilhelmsen ASA
(5)
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 or 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 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
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
Wallenius Wilhelmsen – Annual Report 2021
Auditor's report
Contents →
Independent Auditor's Report - Wallenius Wilhelmsen ASA
(6)
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 Regulation on European Single Electronic Format
(ESEF)
Opinion
We have performed an assurance engagement to obtain reasonable assurance that the financial
statements with file name 549300NBN0URT3RA3Y54-2021-12-31-en have been prepared in
accordance with Section 5-5 of the Norwegian Securities Trading Act (Verdipapirhandelloven) and the
accompanying Regulation on European Single Electronic Format (ESEF).
In our opinion, the financial statements have been prepared, in all material respects, in accordance
with the requirements of ESEF.
Management’s Responsibilities
Management is responsible for preparing, tagging and publishing the financial statements in the single
electronic reporting format required in ESEF. This responsibility comprises an adequate process and
the internal control procedures which management determines is necessary for the preparation,
tagging and publication of the financial statements.
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, 22 March 2022
PricewaterhouseCoopers AS
Bjørn Lund
State Authorised Public Accountant
(This document is signed electronically)
Wallenius Wilhelmsen – Annual Report 2021
Auditor's report
Contents →
Signers:
Name
This document package contains:
- Closing page (this page)
- The original document(s)
- The electronic signatures. These are not visible in the
document, but are electronically integrated.
This le is sealed with a digital signature.
The seal is a guarantee for the authenticity
of the document.
Method
Date
Revisjonsberetning Wallenius Wilhelmsen ASA (2)
Lund, Bjørn
2022-03-22 22:49
BANKID_MOBILE