Clarkson PLC · LSE:CKN
Clarkson — FY2015 Earnings Presentation
50 slides from Clarkson's earnings presentation, Mar 7, 2016
Slide 1: Final Results
Final Results Clarkson PLC 7 March 2016
Slide 2: Agenda
Agenda Headline results The Macro Picture Strategy Outlook
Slide 3: Results Summary
Results Summary 2015 2014 £m £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% Earnings
Slide 4: Revenue
Revenue £301.8m £11.1m Research +£0.7m (+6.7%) £22.5m £237.9m £28.7m Support -£6.1m (-21.3%) £10.4m £28.6m Financial +£20.0m (+229.9%) £8.7m Broking +£49.3m (+25.9%) £239.5m £190.2m 2014 2015 Including 11 months of Platou www.clarksons.com 4
Slide 5: Revenue by half year
Revenue by half year £156.5m £145.3m £6.1m £9.6m £5.0m £126.2m £12.9m £11.4m £5.7m £111.7m £17.3m £14.5m £4.7m £3.6m £14.1m £5.1m Research £129.4m £110.1m Support £102.4m £87.8m Financial Broking H1 2014 H2 2014 H1 2015 H2 2015 Including 11 months of Platou www.clarksons.com 5
Slide 6: Divisional Performance - Profit
Divisional Performance - Profit 2015 2014 £m £m Broking 49.1 34.6 Financial 1.2 (1.9) Support 3.3 4.0 Research 3.4 3.5 www.clarksons.com 6
Slide 7: Forward Order Book
Forward Order Book (for invoicing in the following year) 2016* 2015* US$m US$m Total FOB 151 110 Total FOB (Clarksons and 155 Platou) invoiced in 2015 *Directors best estimates www.clarksons.com 7
Slide 8: Exceptional Items and Acquisition Costs
Exceptional Items 2015 2014 £m £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 Acquisition Costs 2015 2014 £m £m Cash & share-based pa
Slide 9: Platou Acquisition Intangibles
Platou Acquisition Intangibles £m £m Consideration on acquisition 249.9 Intangible assets 21.9 Amortised: Year to 31 Dec 15 9.2 Year to 31 Dec 16** 6.5 Intangible assets 21.9 Year to 31 Dec 17 3.4 Goodwill 232.6 Year to 31 Dec 18 1.7 Fair value of net liabilities (4.6) Year to 31 Dec 19 1.1 249.9 21
Slide 10: Integration
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 i
Slide 11: Balance Sheet
Balance Sheet 2011 2012 2013 2014 2015 £m £m £m £m £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)
Slide 12: Net Funds
Net Funds Dec 2015 Dec 2014 £m £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 di
Slide 13: Movement in Net Funds
Movement in Net Funds 6.8 (18.2) 49.5 (24.4) 30.6 115.7 (23.4) (13.1) 2.5 (3.1) 1.6 93.9 (2.3) 91.6 85.1 Net Funds Placing Net Funds Cash paid Net funds Net funds Profit Sale of Dividend Capex Tax paid Debtors / Deferred Pension Net Funds pre-placing proceeds post-placing on acq'n acquired post-acq'
Slide 14: Dividends - Pence per Share
Dividends 65 60 55 50 Pence per Share 45 40 40 39 37 35 32 33 30 30 26 27 26 25 24 20 22 16 15 11 22 10 9 19 21 16 16 17 18 18 12 14 5 9 10 6 7 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Interim Final www.clarksons.com 14
Slide 15: The Macro Case
The Macro Case
Slide 16: World Seaborne Trade
World Seaborne Trade major dry bulk minor dry bulk crude oil oil products chemicals liquefied gas containers other dry cargo World Population 12 12 11 11 10 10 9 9 8 8 Billion tonnes Billion people 7 7 6 6 5 5 4 4 3 3 2 2 1 1 0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Slide 17: World Seaborne Trade vs. GDP
World Seaborne Trade vs. GDP World Seaborne Trade Trade trend volume GDP Current Prices GDP trend volume 16 160 14 140 World Seaborne Trade (Billion tonnes) GDP Current Prices (Trillion Dollars) 12 120 10 100 8 80 6 60 4 40 2 20 0 0 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 20
Slide 18: Growth in World GDP
% change (year on year) 0 1 2 3 4 5 6 -4 -3 -1 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 Growth in World GDP 1999 World GDP (IMF) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Average GDP Growth 1981-2015 2013 2014 2015 2016 www.clarksons.com 2017 18
Slide 19: Oil Prices vs Growth in Oil Demand and GDP
Oil Prices vs Growth in Oil Demand and GDP 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 6 120 5 4 100 3 % change (year on year) 2 80 US $ / bbl 1 0 60 -1 -2 40 -3 -4 20 -5 -6 0 1981
Slide 20: Tanker demand and OPEC call
Sharply higher Opec «call» to 2020 should boost tanker demand Call-on-OPEC oil vs tanker demand 10% 36.0 35.0 8% Opec «call» 2016 fcast 34.0 Tanker demand Opec call, mbd 6% 33.0 4% 32.0 31.0 2% Opec «call« 2015 fcast 30.0 0% 29.0 -2% 28.0 2004 2008 2012 2016 E 2020 E Source; IEA MTOMR Feb ‘’15 and ‘
Slide 21: World Seaborne Oil Trade
World Seaborne Oil Trade Crude Oil Oil Products Cargo Volume Trade Growth Cargo Volume Trade Growth 2.0 10% 1.2 14% 1.8 8% 1.1 12% 1.0 10% 1.6 6% 0.9 8% % change, year on year % change, year on year 1.4 4% 0.8 6% Billion tonnes Billion tonnes 1.2 2% 0.7 4% 1.0 0% 0.6 2% 0.8 -2% 0.5 0% 0.4 -2% 0.6 -4
Slide 22: Global GDP Growth Drives Specialised Products Trade
Global GDP Growth Drives Specialised Products Trade Seaborne Trade Growth by Sub-Group Trade Grows at 0.9x World GDP Change 300 6 250 26 5 26 25 24 Growth in trade / GDP Growth 22 Seaborne Trade (million tonnes) 200 19 4 16 18 69 70 59 65 57 53 56 150 50 3 38 38 273 284 36 39 38 32 33 31 100 2 108 1
Slide 23: Average Haul of Chemical Fleet Set to Increase
Average Haul of Chemical Fleet Set to Increase Burgeoning U.S Exports will be Key to DWT Demand U.S Exports 50% of 40 Production Scenario Middle East Gulf 30 Additional Capacity (000mts, 1,400 exc. Iran) 20 1,200 1,000 10 800 600 0 400 2014 2015 2016 2017 2018 2019 200 0 2016 2017 2018 USG-FEAST 10k
Slide 24: LPG Export Volumes move upwards
LPG Export Volumes move upwards The last few years have been mainly driven the U.S 40 2010 2011 2012 2013 2014 2015 35.4 34.8 34.5 34.5 32.1 35 30.1 30 Million MT 25 20.4 20 13.7 15 11.2 11.2 10.4 9.3 9.1 8.8 8.3 7.9 10 7.7 7.2 6.8 6.2 6.1 5.4 3.9 3.5 3.2 3.2 3.1 5 2.7 2.7 2.6 2.5 2.5 2.3 2.2 2.2 1.
Slide 25: World Container Trade
World Container Trade Global Box Trade 1996-2016 Trade Growth % m TEU growth 200 20% 180 15% 160 140 10% 120 100 5% 80 0% 60 40 -5% 20 0 -10% 2015 (e) 2001 2010 2016 (f) 2017 (f) 1996 1997 1998 1999 2000 2002 2003 2004 2005 2006 2007 2008 2009 2011 2012 2013 2014 Source : Clarksons Research www.clar
Slide 26: Dry bulk trade and fleet growth outlook
Dry bulk trade and fleet growth outlook Seaborne Trade Growth Dry Bulk Fleet Growth 5,000 120 18% +290 mt 4,500 100 16% +803 mt 4,000 14% 80 3,500 12% 60 Million tonnes 3,000 10% 40 % Growth Million dwt 2,500 8% 20 2,000 6% 0 1,500 4% -20 2% 1,000 2% 1% 500 -40 -1% 0% -1% 0 -60 -2% 2016f 2017f 2018f
Slide 27: China dry bulk imports and exports
China dry bulk imports and exports Imports Exports 1,000 140 750 100 Mt Mt 500 250 60 0 20 Iron Coal Grain Other Fertilisers Steel & Ore Ores Cement China Brazil (2) Aus (1) www.clarksons.com 27
Slide 28: Dry Bulk trade growth vs fleet growth
Dry Bulk trade growth is struggling to get in line with the fleet growth over the short term 20% 17.0% 14.9% 15% Year-on-year growth 13.1% 10.0% 10.5% 10% 6.6% 6.7% 8.7% 7.6% 7.0% 7.0% 4.4% 5% 6.8% 5.8% 5.9% 5.1% 5.2% 3.6% 2.5% 2.4% 1.3% 0.9% 2.1% 1.7% 0.5% 0% 0.8% -0.3% -0.6% -5% 2005 2006 2007 200
Slide 29: Shipping Fleet Development
Shipping Fleet Development 1990-2015 37% of tonnage public c. 300 Bulkers Tankers Containers Gas Carriers Other Growth companies 2,000 10% Fleet as at end year. 10 Year CAGR (2004-2014) 1,800 2015: projection. 6.6% 9% Comprises world merchant $1 trillion 1,600 fleet >100 GT, including ship- fleet 8%
Slide 30: Newbuilding Orders
Newbuilding Orders Orders representative of vessels over 20,000 dwt January 2016 www.clarksons.com 30
Slide 31: Historic Reported Bank Loan Portfolios: 2010 – 2014
Historic Reported Bank Loan Portfolios: 2010 – 2014 2010 2011 2012 2013 2014 35 430 Reported Number of Reported Portfolio Portfolios Banks % of Global Loans by Totals (by year) European banks : 420 30 2010 $418.4bn 30 2007: 84% 2014: 75% 2011 $400.3bn 30 2015: 62%? 410 25 2012 $388.5bn 30 Total Port
Slide 32: Strategy
Strategy
Slide 33: www.clarksons.com
www.clarksons.com 33
Slide 34: Integrated Solutions: Breadth, Reach, Trust
Consolidation Commodity Pricing Ability to hire Offshore Flight to quality Funding Competition China Shipyard Capacity Geographic instability Seaborne demand Supply/Demand Imbalance Flow & placing power Diversity of earnings Balance sheet strength Integrated Solutions Breadth Reach Trust Understandi
Slide 35: www.clarksons.com
bi ) Clarksons www.Cclarksons.com 35
Slide 36: Broking
Broking Asset New Build Second Recycling Lifecycle Hand Shipping Offshore Specialised Tankers Dry Cargo Gas Containers Specialist Drilling Survey Construction Production Support Renewables Products Crude Oil Iron Ore Chemicals LPG Component RoRo Jackups Seismic Subsea FPSO AHTS Wind Refined Coal Fer
Slide 37: www.clarksons.com
www.clarksons.com 37
Slide 38: Financial
Financial Securities Equity & Debt Project Finance Public & Private Fixed Income/High Yield Restructuring & M&A Oslo New York Secondary Sales & trading Shipping Offshore Debt & Advisory Debt & Equity Research >180 companies covered Banks Other lenders Shipping & MLP Real Estate Offshore & Oil Servic
Slide 39: Market leader in global shipping equity transactions
Market leader in global shipping equity transactions ~USD 17.3bn global shipping equity issues in the period 2013 – 2016YTD 3,388 Chart Title Amount (USDbn) 3,500 CPS (Sole or Joint Lead) Others 3,000 2,838 ~17.3bn 8.3 9.0 2,500 816 2,468 1,979 2,000 1,851 1,715 USDm Market share (%) 1,500 1,323 1,2
Slide 40: Market leader in global offshore drilling equity transactions
Market leader in global offshore drilling equity transactions ~USD 9.4bn global offshore drilling equity issues in the period 2010 – 2016YTD Amount (USDbn) CPS (Sole or Joint Lead) Others 3,500 3,208 3,000 3.4 ~9.4bn 6.0 2,500 2,000 USDm Market share (%) 1,500 1,268 1,000 776 830 36% 502 ~36% 490 50
Slide 41: Different products for different stages in the cycle
Different products for different stages in the cycle Estimated fleet utilization 2015e 100% 98% 96% 94% LPG 92% 90% Fleet utilization in percent Crude & Product 88% 86% Chemical 84% Floater rigs Car Carrier 82% LNG 80% Jack-up rigs Dry bulk 78% OSV Container 76% 74% 72% 70% M&A www.clarksons.com 41
Slide 42: Restructurings demand multiple advisory roles
Restructurings demand multiple advisory roles 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 reve
Slide 43: www.clarksons.com
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Slide 44: Research
Research Equity Research Shipping & Trade Offshore & Energy Vessel Registers Securities Broking Clarksons Research Equity Analysts Desk analysts >90 staff globally Shipping Every Freight Sector London, Singapore & Shanghai Offshore & Oil Services All Bulk Commodities E&P Real Time data flows Coal &
Slide 45: Research – Data Mining
Research – Data Mining Offshore Intelligence Network World Fleet Monitor Shipping Intelligence Network www.clarksons.com 45
Slide 46: Research – Real time insights
Research – Real time insights 50 real time In house developed platforms www.clarksons.com 46
Slide 47: www.clarksons.com
Clarksons XC Mi (IN 47 www.Cclarksons.com
Slide 48: Global Presence
Global Presence A. Aberdeen S Y B. Alexandria A P C. Athens N V J D. Casablanca H I E. Cairo R F. Cape Town C G. Dubai L D E W B H. Geneva G I. Genoa Q K J. Hamburg K. Hong Kong L. Houston M. Johannesburg X N. London O. Melbourne P. Moscow Q. New Delhi R. New York U S. Oslo M T. Perth T U. Rio de Ja
Slide 49: Outlook
Outlook 17 August 2015 Interim Results 49
Slide 50: Disclaimer
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