Final Results Clarkson PLC 7 March 2016 Format Background. Click - - PowerPoint PPT Presentation

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Final Results Clarkson PLC 7 March 2016 Format Background. Click - - PowerPoint PPT Presentation

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Final Results Clarkson PLC 7 March 2016 Format Background. Click on Insert from File and select the Agenda Under Picture Colour, make Headline results The Macro Picture Strategy Outlook Results Summary 2015 2014 m

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Final Results

7 March 2016 Clarkson PLC

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“Format Background”. Click on “Insert from File” and select the Under “Picture Colour”, make

Agenda

Headline results The Macro Picture Strategy Outlook

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www.clarksons.com 3

2015 £m 2014 £m Revenue 301.8 237.9

+27%

Profit before taxation

(Before exceptional items and acquisition costs)

50.5 33.8

+49%

Exceptional items (2.5) (1.6) Acquisition costs (16.2) (7.0) Profit before taxation

(After exceptional items and acquisition costs)

31.8 25.2

+26%

Results Summary

Earnings per share

(Before exceptional items and acquisition costs)

121.9p 134.2p

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www.clarksons.com 4

Financial +£20.0m (+229.9%) Support -£6.1m (-21.3%) Broking +£49.3m (+25.9%) Research +£0.7m (+6.7%)

£190.2m £239.5m £8.7m £28.7m £28.6m £22.5m £10.4m £11.1m

2014 2015

£301.8m £237.9m

Revenue

Including 11 months of Platou

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www.clarksons.com 5

£87.8m £102.4m £110.1m £129.4m £5.1m £3.6m £17.3m £11.4m £14.1m £14.5m £12.9m £9.6m £4.7m £5.7m £5.0m £6.1m H1 2014 H2 2014 H1 2015 H2 2015

£145.3m £156.5m £111.7m £126.2m

Including 11 months of Platou

Revenue by half year

Financial Support Broking Research

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Divisional Performance - Profit

6

2015 £m 2014 £m

Broking

49.1 34.6

Financial

1.2 (1.9)

Support

3.3 4.0

Research

3.4 3.5

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Forward Order Book (for invoicing in the following year)

*Directors best estimates

2016* US$m 2015* US$m Total FOB 151 110 Total FOB (Clarksons and Platou) invoiced in 2015 155

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Exceptional Items

2015 £m 2014 £m

Double rent and service charge (CQ/SMH) 2.3 0.9 Onerous lease (SMH)

  • 0.7

Onerous lease (Singapore) 0.3

  • Reorganisation costs

1.2

  • Release of dilapidation provision

(1.3)

  • All items are non-recurring

2.5 1.6

8

Acquisition Costs

2015 £m 2014 £m

Cash & share-based payment charges 2.8 2.8 Legal & professional fees* 3.1 4.1 Loan note interest 1.1

  • Amortisation: Platou

9.2

  • Amortisation: Boxton*
  • 0.1

* Non recurring items

16.2 7.0 ** Total acquisition costs for year to 31 December 2016 anticipated to be £8.2m

**

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www.clarksons.com 9

Platou Acquisition Intangibles

£m Consideration on acquisition 249.9 Intangible assets 21.9 Goodwill 232.6 Fair value of net liabilities (4.6) 249.9 £m Intangible assets 21.9 Amortised: Year to 31 Dec 15 9.2 Year to 31 Dec 16** 6.5 Year to 31 Dec 17 3.4 Year to 31 Dec 18 1.7 Year to 31 Dec 19 1.1 21.9

** Total acquisition costs for year to 31 December 2016 anticipated to be £8.2m

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Integration

  • Rebranding of Broking and Financial as ‘Clarksons Platou’
  • Repaid bank loans and overdrafts
  • Integrated all teams in same locations and across business lines
  • New offices in Oslo, Singapore, London and Dubai
  • Annualised £4m of synergies achieved
  • Revenue synergies already proven in integrated business plan
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Balance Sheet

2011 £m 2012 £m 2013 £m 2014 £m 2015 £m

Tangible fixed assets

9.2 8.8 9.4 8.4 33.1

Investments

1.9 1.9 1.8 1.9 1.9 11.1 10.7 11.2 10.3 35.0

Working capital

(2.8) (2.8) 3.1 (1.8) (7.1)

Net funds

71.1 75.2 75.0 115.7 91.6 68.3 72.4 78.1 113.9 84.5

Pensions

(6.6) (9.4) (1.8) (10.3) (4.1)

Deferred tax

10.2 12.5 10.0 13.0 8.4 71.9 75.5 86.3 116.6 88.8

Net assets before loan notes and intangibles

83.0 86.2 97.5 126.9 123.8

Loan notes (incl. accrued interest)

  • (46.1)

Net assets before intangibles

83.0 86.2 99.3 126.9 77.7

Intangibles

40.3 39.8 40.2 40.4 263.2

Net assets

123.3 126.0 139.5 167.3 340.9

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www.clarksons.com 12

Dec 2015 £m Dec 2014 £m Cash and cash equivalents* 168.4 152.9 Current investments 5.4 25.3 Net cash equivalents 173.8 178.2 Reserved for bonus (full cost) (82.2) (62.5) Net available funds 91.6 115.7* Cash consideration on acquisition

  • (23.4)

Net available funds 91.6 92.3 Reserved for dividend (12.1) (11.7)

Net Funds

* 2014 comparative includes placing proceeds of £30.6m

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Movement in Net Funds

13

85.1 115.7 93.9 91.6 30.6 1.6 49.5 (23.4) 6.8 (18.2) (24.4) (13.1) 2.5 (3.1) (2.3)

Net Funds pre-placing Dec 14 Placing proceeds Net Funds post-placing Dec 14 Cash paid

  • n acq'n

Net funds acquired Net funds post-acq'n Profit Sale of investments Dividend Capex Tax paid Debtors / creditors Deferred consideration Pension Net Funds Dec 15

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6 7 9 10 12 14 16 16 17 18 18 19 21 22 9 11 16 22 24 26 26 27 30 32 33 37 39 40 5 10 15 20 25 30 35 40 45 50 55 60 65 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Pence per Share Interim Final

Dividends

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The Macro Case

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World Seaborne Trade

16 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Billion people Billion tonnes major dry bulk minor dry bulk crude oil

  • il products

chemicals liquefied gas containers

  • ther dry cargo

World Population Data Source: Clarksons / US Census Bureau

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World Seaborne Trade vs. GDP

17 20 40 60 80 100 120 140 160 2 4 6 8 10 12 14 16 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 GDP Current Prices (Trillion Dollars) World Seaborne Trade (Billion tonnes) World Seaborne Trade Trade trend volume GDP Current Prices GDP trend volume Data Source: Clarksons / World Bank

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Growth in World GDP

18

  • 4
  • 3
  • 2
  • 1

1 2 3 4 5 6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 % change (year on year) World GDP (IMF) Average GDP Growth 1981-2015

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Oil Prices vs Growth in Oil Demand and GDP

19 20 40 60 80 100 120

  • 6
  • 5
  • 4
  • 3
  • 2
  • 1

1 2 3 4 5 6 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 US $ / bbl % change (year on year) Crude Price (Inflation Adjusted) Crude Price (Money of the Day)* World GDP (IMF) Oil Demand (EIA) Average GDP Growth 1981-2014 Average Oil Demand Growth 1981-2014

Data source: Reuters, EIA, IMF, BP Statistical Review of World Energy. *Crude price Arab Light posted at Ras Tanura 1981-1983. Dated Brent 1984-

  • present. 2015 oil price is year-to-date.
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28.0 29.0 30.0 31.0 32.0 33.0 34.0 35.0 36.0

  • 2%

0% 2% 4% 6% 8% 10% 2004 2008 2012 2016 E 2020 E Opec call, mbd Tanker demand

Tanker demand Opec call (r.s.)

Source; IEA MTOMR Feb ‘’15 and ‘16, , Clarksons Platou

Call-on-OPEC oil vs tanker demand

Sharply higher Opec «call» to 2020 should boost tanker demand

Opec «call» 2016 fcast Opec «call« 2015 fcast

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World Seaborne Oil Trade

21

  • 10%
  • 8%
  • 6%
  • 4%
  • 2%

0% 2% 4% 6% 8% 10% 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 % change, year on year Billion tonnes Cargo Volume Trade Growth

  • 10%
  • 8%
  • 6%
  • 4%
  • 2%

0% 2% 4% 6% 8% 10% 12% 14% 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 % change, year on year Billion tonnes Cargo Volume Trade Growth

Crude Oil Oil Products

Data Source: Clarksons

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Global GDP Growth Drives Specialised Products Trade

Data Source: Clarksons 95 93 100 108 111 112 118 120 32 33 31 36 39 38 38 38 50 53 56 57 59 65 69 70 16 18 19 22 24 25 26 26 273 284 50 100 150 200 250 300 2007 2008 2009 2010 2011 2012 2013 2014 2015 (F) 2016 (F) Seaborne Trade (million tonnes) Organic Chemicals Inorganic Chemicals Veg Oils Molasses Lubeoils Ethanol Overall Outlook

  • 1

1 2 3 4 5 6 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Growth in trade / GDP Growth Trade Multiplier Median

Trade Grows at 0.9x World GDP Change Seaborne Trade Growth by Sub-Group

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Average Haul of Chemical Fleet Set to Increase

Burgeoning U.S Exports will be Key to DWT Demand

Data Source: Clarksons SeaNet

USG-FEAST 10k nm / 34 days MEG-FEAST 6k nm / 19 days

Global Fleet Average Haul = 3,433 N. Miles

200 400 600 800 1,000 1,200 1,400 2016 2017 2018

Middle East Gulf Additional Capacity (000mts,

  • exc. Iran)
10 20 30 40 2014 2015 2016 2017 2018 2019

U.S Exports 50% of Production Scenario

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LPG Export Volumes move upwards

30.1 9.3 6.1 3.9 3.2 3.1 34.5 9.1 6.2 3.5 2.5 2.7 34.5 8.8 6.8 5.4 3.2 2.6 32.1 8.3 7.2 10.4 2.7 2.2 34.8 11.2 7.7 13.7 2.2 2.3 35.4 11.2 7.9 20.4 2.5 1.7 5 10 15 20 25 30 35 40 AG Africa North Sea US Americas (exc USA) Asia Million MT

2010 2011 2012 2013 2014 2015

Data Source: JODI, Waterborne, Customs Stats

The last few years have been mainly driven the U.S

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World Container Trade

Global Box Trade 1996-2016

  • 10%
  • 5%

0% 5% 10% 15% 20% 20 40 60 80 100 120 140 160 180 200

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (e) 2016 (f) 2017 (f)

growth m TEU Source : Clarksons Research

Trade Growth %

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Dry bulk trade and fleet growth outlook

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000

2008 2009 2010 2011 2012 2013 2014 2015 2016f 2017f 2018f 2019f 2020f

Million tonnes

Seaborne Trade Growth

Coal Iron Ore Agricultural related Construction related 2% 1%

  • 1% -1%
  • 2%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

  • 60
  • 40
  • 20

20 40 60 80 100 120

2008 2009 2010 2011 2012 2013 2014 2015 2016f 2017f 2018f 2019f 2020f

% Growth Million dwt

Dry Bulk Fleet Growth

Deliveries Deletions Forecast Deliveries Forecast Deletions Existing Orderbook Fleet Growth +803 mt +290 mt

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China dry bulk imports and exports

China Brazil (2) Aus (1) 20 60 100 140

Fertilisers Steel & Cement

Mt

Exports

250 500 750 1,000

Iron Ore Coal Grain Other Ores

Mt

Imports

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Dry Bulk trade growth is struggling to get in line with the fleet growth over the short term

7.6% 7.0% 5.8% 1.3% 0.8% 13.1% 5.1% 5.2% 8.7% 3.6%

  • 0.3%

0.5% 2.4% 2.1% 7.0% 6.8% 6.6% 6.7% 10.0% 17.0% 14.9% 10.5% 5.9% 4.4% 2.5% 0.9% 1.7%

  • 0.6%
  • 5%

0% 5% 10% 15% 20% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015f 2016f 2017f 2018f

Year-on-year growth

Trade growth Net fleet growth

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www.clarksons.com 29 January 2016 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (f) million dwt

Bulkers Tankers Containers Gas Carriers Other Growth

Fleet growth, during the year (RHS) Fleet as at end year. 2015: projection. Comprises world merchant fleet >100 GT, including ship- shaped offshore units

Data Source: Clarkson Research Services, data prior to 1996 does not include retrospective changes and certain estimates.

10 Year CAGR (2004-2014) 6.6%

  • c. 200 Public

Companies $1 trillion fleet

37% of tonnage public c. 300 companies 20% of tonnage public c.30 companies

Shipping Fleet Development 1990-2015

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Newbuilding Orders

Orders representative of vessels over 20,000 dwt

January 2016

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Historic Reported Bank Loan Portfolios: 2010 – 2014

2010 2011 2012 2013 2014 350 360 370 380 390 400 410 420 430 5 10 15 20 25 30 35 Total Portfolio (US$ bn)

2010 2011 2012 2013 2014 Estimated non-reported loan portfolio: c.$40 billion % of Global Loans by European banks : 2007: 84% 2014: 75% 2015: 62%?

*Indicates new 2014 entrant to Bank Portfolio League Table

**Indicates not reported in 2014 Bank Portfolio League Table

Reported Portfolios $418.4bn $400.3bn $388.5bn $379.1bn $391.5bn

Data Sources: Dealogic / Clarksons Total Loan Volumes subject to variance in reporting methods (+/- 10%)

Number of Banks 30 30 30 38 40 Reported Portfolio Totals (by year)

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Strategy

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Consolidation Ability to hire Flight to quality Competition Shipyard Capacity Seaborne demand Flow & placing power Diversity of earnings Balance sheet strength

34

Commodity Pricing Offshore Funding China Geographic instability Supply/Demand Imbalance

Breadth Reach Trust Understanding People

Integrated Solutions

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New Build Second Hand Recycling Voyage COA Time Charter

Asset Lifecycle

Use of Asset

Tankers Tankers Dry Cargo Specialised Products Gas Containers Specialist Crude Oil Refined Products Iron Ore Coal Steel Agricultural Chemicals Fertilisers Edible Oils LPG Ammonia Pet Chem Gases LNG Component & Finished Goods Commods RoRo Ferries Car Carriers Cruise Dry Cargo Specialised Products Gas Containers Specialist

Shipping

Drilling Survey Construction Production Support Renewables Rigs Seismic Construction Subsea E&P Renewables Jackups Semi Sub Drillships Seismic Geophysic Subsea Pipe lay Heavy lift FPSO FSO Shuttle AHTS PSV Crew/FSV Wind Tide

Offshore

Broking

$670bn Fleet $200bn Order Book $320bn Fleet $95bn Order Book

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Securities

Equity & Debt Public & Private Fixed Income/High Yield Restructuring & M&A Oslo New York Secondary Sales & trading Debt & Equity Research >180 companies covered Shipping & MLP Offshore & Oil Service Coal & Mining E&P

Project Finance

Shipping Offshore Real Estate

Debt & Advisory

Banks Other lenders

Financial

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www.clarksons.com 39

8.3 9.0

Amount (USDbn)

48% 52%

Market share (%)

~USD 17.3bn global shipping equity issues in the period 2013 – 2016YTD

Market leader in global shipping equity transactions

Source: Bloomberg, company information and press releases ~17.3bn ~48%

Clarksons Platou Securities has a market share of 48% in global shipping ECM, 2013-2016YTD

876 670 759 920 777 939 2,022 500 519 50 53 200 288 653 957 2,468 1,203 912 816 797 528 276 122

1,164 1,323 1,715 3,388 1,979 1,851 2,838 500 797 1,047 326 175 200 500 1,000 1,500 2,000 2,500 3,000 3,500 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2013 2014 2015 2016

Chart Title

CPS (Sole or Joint Lead) Others

USDm USDm

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Source: Bloomberg, company information and press releases

~USD 9.4bn global offshore drilling equity issues in the period 2010 – 2016YTD

40

Market leader in global offshore drilling equity transactions

171 351 73 776 3,208 830 43 1,268 502 297 93 263 370 50 490 250 150 200 40 500 1,000 1,500 2,000 2,500 3,000 3,500 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2012 2013 2014 2015 USDm CPS (Sole or Joint Lead) Others

3.4 6.0

Amount (USDbn) ~9.4bn

36% 64%

Market share (%) ~36%

Clarksons Platou Securities has a market share of 36% in global offshore drilling ECM, 2010-2016YTD

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www.clarksons.com LNG Crude & Product Dry bulk Container Chemical Car Carrier LPG Jack-up rigs Floater rigs OSV 70% 72% 74% 76% 78% 80% 82% 84% 86% 88% 90% 92% 94% 96% 98% 100% Fleet utilization in percent

Different products for different stages in the cycle

41 Estimated fleet utilization 2015e

M&A

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Distress within offshore is leading to dislocations in capital markets pricing as well as balance sheet/liquidity issues for virtually most corporates. Our unique product offering combined with industry expertise enables us to significantly grow our revenue line within distressed debt trading and restructuring advisory in the current challenging environment. Illustrative stakeholders in restructuring situations:

42

Restructurings demand multiple advisory roles

Company Commercial banks Bondholders Charterers Shareholders

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Clarksons Research

>90 staff globally London, Singapore & Shanghai

Equity Research Shipping & Trade Offshore & Energy Vessel Registers

Securities

Equity Analysts Shipping Offshore & Oil Services E&P Coal & Mining MLP Oslo & New York

Broking

Desk analysts Every Freight Sector All Bulk Commodities Real Time data flows All time zones covered

Research

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Offshore Intelligence Network Shipping Intelligence Network World Fleet Monitor

Research – Data Mining

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Research – Real time insights

50 real time In house developed platforms

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Global Presence

A N V J S Y P I C D E B H G Q X K W L R U F M T O
  • A. Aberdeen
  • B. Alexandria
  • C. Athens
  • D. Casablanca
  • E. Cairo
  • F. Cape Town
  • G. Dubai
  • H. Geneva
  • I. Genoa
  • J. Hamburg
  • K. Hong Kong
  • L. Houston
  • M. Johannesburg
  • N. London
  • O. Melbourne
  • P. Moscow
  • Q. New Delhi
  • R. New York
  • S. Oslo
  • T. Perth
  • U. Rio de Janeiro
  • V. Rotterdam
  • W. Shanghai
  • X. Singapore
  • Y. Uppsala

48

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Outlook

17 August 2015 Interim Results

49

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Disclaimer

THIS PRESENTATION IS CONFIDENTIAL AND IS SOLELY FOR THE USE OF THE RECIPIENT. NEITHER THE WHOLE NOR ANY PART OF THE INFORMATION CONTAINED IN THE PRESENTATION MAY BE DISCLOSED TO, OR USED OR RELIED UPON BY, ANY OTHER PERSON OR USED FOR ANY OTHER PURPOSE WITHOUT THE PRIOR WRITTEN CONSENT OF CLARKSON PLC (CLARKSONS). THE INFORMATION CONTAINED IN THE PRESENTATION, AND UPON WHICH THE PRESENTATION IS BASED, HAS BEEN DERIVED FROM PUBLICLY AVAILABLE INFORMATION. NONE OF THE INFORMATION ON WHICH THE PRESENTATION IS BASED HAS BEEN INDEPENDENTLY VERIFIED BY ANY MEMBER OF CLARKSONS NOR ANY OF ITS CONNECTED PERSONS. ACCORDINGLY, NO MEMBER OF CLARKSONS NOR ANY OF ITS CONNECTED PERSONS MAKE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE ACCURACY OF THE INFORMATION CONTAINED IN THE PRESENTATION, OR ON WHICH THE PRESENTATION IS BASED, OR THAT THIS INFORMATION REMAINS UNCHANGED AFTER THE ISSUE OF THE PRESENTATION. THE PRESENTATION IS NOT TO BE CONSTRUED AS CARRYING THE ENDORSEMENT OF CLARKSONS OR ANY OF ITS CONNECTED PERSONS. CONSEQUENTLY, NEITHER CLARKSONS NOR ANY OF ITS CONNECTED PERSONS CAN BE HELD LIABLE TO ANY PERSON TO WHOM INFORMATION DERIVED FROM THE PRESENTATION IS MADE AVAILABLE FOR THE ACCURACY OF THE INFORMATION CONTAINED IN IT. THE PRESENTATION IS NOT INTENDED TO RECOMMEND ANY STRATEGIC DECISION BY THE COMPANY AND SHOULD NOT BE CONSIDERED AS A RECOMMENDATION SUPPORTING ANY OF THE OPTIONS DISCUSSED HEREIN BY ANY MEMBER OF CLARKSONS OR ANY OF ITS CONNECTED PERSONS TO ANY RECIPIENT OF THE INFORMATION. EACH PERSON TO WHOM THE INFORMATION IS MADE AVAILABLE MUST MAKE THEIR OWN INDEPENDENT ASSESSMENT OF THE OPTIONS AVAILABLE. NOTHING IN THE PRESENTATION IS, OR SHOULD BE RELIED UPON AS, A PROMISE OR REPRESENTATION AS TO THE FUTURE. Clarkson PLC Commodity Quay, St Katharine Docks, London E1W 1BF, UK TELEPHONE +44 (0) 207-334-0000