Clarkson Plc · LSE:CKN
Clarkson — H1 2021 Earnings Presentation
41 slides from Clarkson's earnings presentation, Aug 9, 2021
Slide 1: Interim Results Presentation 30 June 2021
Interim Results Presentation 30 June 2021 Andi Case and Jeff Woyda 9 August 2021
Slide 2: Agenda
Agenda 1 Financial results 2 Markets 3 Outlook 2 Interim Results Presentation | 30 June 2021 Andi Case and Jeff Woyda | 9 August 2021
Slide 3: Financial results
Financial results Jeff Woyda Chief Financial Officer & Chief Operating Officer 3 Interim Results Presentation | 30 June 2021 Andi Case and Jeff Woyda | 9 August 2021
Slide 4: Results summary to 30 June
Results summary to 30 June 2021 2020 £m £m Revenue 190.1 180.4 +5.4% Underlying profit before taxation 27.5 21.1 +30.3% (Before acquisition-related costs) Acquisition-related costs (0.2) (0.2) Profit before taxation 27.3 20.9 +30.6% (After acquisition-related costs) Underlying earnings per share 64.
Slide 5: Segmental performance: revenue, profit and margin
Segmental performance Revenue, profit and margin to 30 June Revenue Revenue Profit Profit 2021 2020 2021 2020 Margin Margin £m £m £m £m 2021 2020 Broking 142.7 147.1 30.3 29.4 21.2% 20.0% Financial 24.7 13.3 5.3 (1.6) 21.5% n/a Support 14.1 11.5 1.5 0.2 10.6% 1.7% Research 8.6 8.5 3.1 3.1 36.0% 36.5
Slide 6: Segmental performance: revenue, profit and margin
Segmental performance Revenue, profit and margin to 30 June Constant Constant Constant Constant Constant Reported Currency Reported Currency Reported Reported Currency Reported Currency Reported Currency Revenue Revenue Increase/ Revenue Revenue Revenue Increase/ Increase/ Profit Profit Profit Incre
Slide 7: Segmental performance: revenue, profit and margin
Segmental performance Revenue, profit and margin to 30 June Constant Constant Constant Constant Constant Reported Currency Reported Currency Reported Reported Currency Reported Currency Reported Currency Revenue Revenue Increase/ Revenue Revenue Revenue Increase/ Increase/ Profit Profit Profit Incre
Slide 8: Broking 10-year trend
Broking 10-year trend Revenue growth +95% Profit growth +139% Margin growth Consistency of performance 8 Interim Results Presentation | 30 June 2021 Andi Case and Jeff Woyda | 9 August 2021
Slide 9: Research 10-year trend
Research 10-year trend Revenue growth +87% Profit growth +121% Margin growth Consistency of performance 9 Interim Results Presentation | 30 June 2021 Andi Case and Jeff Woyda | 9 August 2021
Slide 10: Financial 10-year trend
Financial 10-year trend Pre Platou Post Platou • Growth in Revenue post Platou • Profitable except H2 2015 & H1 2020 • Sustainable business • Full capability to service client need 10 Interim Results Presentation | 30 June 2021 Andi Case and Jeff Woyda | 9 August 2021
Slide 11: Support 10-year trend
Support 10-year trend Pre oil price collapse Growth in Revenue post oil price collapse Safety & Survival Renewables Stable Profit H1 2020 – Covid-19 pandemic but still profitable Stable Margin Consistency of performance 11 Interim Results Presentation | 30 June 2021 Andi Case and Jeff Woyda | 9 Augu
Slide 12: Balance sheet
Balance sheet Dec 2017 Dec 2018 Dec 2019 Dec 2020 Jun 2021 £m £m £m £m £m Tangible fixed assets 33.3 29.3 28.9 28.6 26.7 Intangible fixed assets (software only) 1.5 5.4 9.9 15.6 17.0 Investments (relating to convertible bonds) – 6.7 6.7 5.5 0.8 Investments (other) 4.9 4.8 4.8 2.9 1.3 39.7 46.2 50.3
Slide 13: Sea/ related IT costs
Sea/ related IT costs 30 June 30 June 2021 2020 £m £m Items taken to Income Statement Non capitalised items (Sea/ only) (5.9) (3.8) Amortisation (0.3) (0.2) 30 June 31 Dec 30 June 2021 2020 2020 £m £m £m Software-related intangible asset as at 1 January 15.6 9.8 9.8 Additions 1.7 6.3 3.1 Amortisatio
Slide 14: Trade Debtors
Trade Debtors 30 Jun 31 Dec Increase/ 2021 2020 (Decrease) £m £m 0-3 months 63.6 51.5 12.1 3-12 months 10.2 8.7 1.5 73.8 60.2 13.6 14 Interim Results Presentation | 30 June 2021 Andi Case and Jeff Woyda | 9 August 2021
Slide 15: Net available funds and free cash resources
Net available funds and free cash resources 30 June 31 Dec Increase/ 2021 2020 (Decrease) £m £m £m Cash and cash equivalents 152.9 173.4 (20.5) Interest-bearing loans and borrowings - (0.1) 0.1 Current investment deposits 2.8 22.8 (20.0) Net cash equivalents 155.7 196.1 (40.4) Reserved for bonus (fu
Slide 16: Movement in free cash resources
Movement in free cash resources 6.3 (14.6) 28.3 (4.1) 81.1 (16.3) (5.3) (2.5) (1.7) 0.9 73.9 (1.3) 5.6 (2.5) 64.8 Free cash Final Dividend Free cash Operating profit Depreciation Other Working Taxation Lease payments Dividends paid Capitalised Capex Other Sale of Movement in Free cash resources reso
Slide 17: 18 years of progressive dividend
Dividend history 18 years of progressive dividend… 90 80 78 79 75 73 54 53 51 70 65 50 62 60 43 60 56 40 39 50 51 37 50 47 43 32 33 42 40 30 40 36 26 27 32 26 24 30 25 22 27 18 16 24 25 25 20 15 22 22 23 21 11 18 18 19 16 16 17 10 9 14 12 9 10 6 7 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Slide 18: Markets
Markets Andi Case Chief Executive Officer 18 Interim Results Presentation | 30 June 2021 Andi Case and Jeff Woyda | 9 August 2021
Slide 19: World Seaborne Trade & Population Growth
World Seaborne Trade & Population Growth 15 15 14 14 13 13 12 12 11 11 10 10 BN tonnes BN people 9 9 8 8 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 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Maj
Slide 20: Offshore and Renewables: improving market conditions
Offshore and Renewables: Improving market conditions in Offshore Oil & Gas and full speed ahead within Renewables Starting to see market improvement in O&G despite flat E&P-spending Offshore Renewables/Wind continues to see full speed ahead Global E&P-spending (USDbn) Offshore wind, European FIDs (G
Slide 21: Tanker Market Recovery
Tanker Market Recovery 105 Oil Demand Historicals Oil Demand Scenario (EIA Jul. 2021) • Oil demand, oil supply and refinery runs Oil Supply Historicals projected to recover strongly in 2nd half of 100 2021, driving a rebound in tanker demand. • Recently agreed OPEC+ plan allows for Million bpd 95 40
Slide 22: Specialised Products Seaborne Trade Development
Specialised Products Seaborne Trade Development Trade Growth Contracted in 2020 Due to COVID-19 but at a Lower Rate that Expected, Recovery Due 2H 2021 World GDP vs. Specialised Products trade = 0.9 correlation Seaborne Trade Growth by Cargo Parent Group 400 100 400 10% 19 21 20 90 350 350 16 25 26
Slide 23: US/East VLGC liftings
The number of VLGC liftings into the East accelerated October onwards Despite some fluctuation in 2021, US/East movements comprised 70% of total VLGC liftings ex US (vs. 69% in 2020) 70 90% 65 76% 83% 77% 77% 77% 69% 71% 74% 80% 60 70% 67% 73% 70% 69% 68% 72% 70% 70% 71% 64% 68% 69% 69% 68% 69% 55 6
Slide 24: The spot LNG freight market on a year-long rollercoaster ride
The spot LNG freight market on a year-long rollercoaster ride Rates recovery driven by improved economics for US LNG exports on long-haul voyages to Asia Surge in weather-driven Asia LNG 225 demand, LNG export plants outages, Panama Canal delays 200 175 Asia LNG restocking demand, COSCO Sanctions Re
Slide 25: Container Shipping Market Trends
Container Shipping Market Trends Box freight and vessel charter markets hit new record highs in 1H 2021 Containership Charter Rate Index Spot Container Freight Rate Index (SCFI) 200 4,000 180 3,500 160 3,000 140 120 2,500 100 2,000 80 1,500 60 1,000 40 20 500 0 0 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 J
Slide 26: Strong Global Box Trade Growth
Strong Global Box Trade Growth Firm rebound in box trade continuing following 1H20 downturn Annual Growth, % TEU Quarterly Growth, % y-o-y Monthly Growth, % y-o-y 15% 15% 20% 15% 10% 10% 10% 5% 5% 5% 0% 0% 0% -5% -5% -5% -10% -10% -10% -15% -15% -15% 2021f 2001 2003 2005 2007 2009 2011 2013 2015 201
Slide 27: Container Shipping Sector "Perfect Storm"
Container Shipping Sector “Perfect Storm” Returning volumes, “disruption upside”, and manageable supply growth Rebounding Volumes “Disruption Upside” Manageable Supply Growth Global Container Trade Boxships In Ports Globally, mTEU, 7 dma Containership Fleet Capacity Growth, % y-o-y 16% 7.9 10% Milli
Slide 28: Dry Bulk Market: Shock, Reposition, Rebound & Reflation
Dry Bulk Market: Shock, Reposition, Rebound & Reflation Earnings responded strongly to seaborne trade rebound Baltic Dry Index vs Seaborne Trade 1H20 COVID 2H20 REPOSITION 1H21 REBOUND 2H21 REFLATION 4,000 SHOCK 1,250 1,230 3,500 1,210 3,000 1,190 Million Tonnes 2,500 1,170 BDI 2,000 1,150 1,130 1,5
Slide 29: Baltic Dry Indices
Baltic Dry Indices Earnings at 10-year high Baltic Dry Index Baltic Dry Index from 2010 5,000 4,500 4,500 4,000 4,000 3,500 3,500 4,000 Index Value Index Value 3,000 3,000 Index Value 2,500 2,500 3,000 2,000 2,000 1,500 1,500 2,000 1,000 1,000 500 500 1,000 0 0 2010 2011 2012 2013 2014 2015 2016 201
Slide 30: Fleet Speed & Turnaround Times
Fleet Speed & Turnaround Times Speed improved on higher earnings although capped by CO2 limits: Covid-induced increase in port turnaround times Monthly Avg Panamax & Supramax Speeds Panamax Average Port Turnaround Times 11.8 5.1 5.1 11.7 4.9 4.9 11.6 4.7 4.7 Average Turn Around Days in Ports 4.5 4.5
Slide 31: Manufacturing PMIs
Manufacturing PMI’s Rebound in support of steel complex driving a construction commodity boom Manufacturing PMI’s in Big 4 Economies Selection of Commodity Prices 370 1000 70 70 65 65 320 900 60 60 800 270 Contraction | Expansion 55 55 700 220 USD/Ton USD/ton 50 50 600 170 45 45 500 120 40 40 400 35
Slide 32: Orderbook as a % of the Fleet
Orderbook as a % of the Fleet 100% 20% 90% 18% Orderbook as % of fleet for individual sectors 80% 16% Orderbook as % of Global Fleet 70% 14% 60% 12% 50% 10% 40% 8% 30% 6% 20% 4% 10% 2% 0% 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Jul-21 Dry Bulk (Dwt) Co
Slide 33: Alternative Fuels: Current Uptake By Sector
Alternative Fuels: Current Uptake By Sector LNG Fuel Gaining Traction But Huge Uncertainty Over Longer-Term ‘Solution’ Fleet (100+ GT) Using Alternative Fuels Orderbook (100+ GT) Set To Use Alternative Fuels 100 100 c.440 LNG c.60 Battery/Hybrid c.155 LNG capable Large Passenger capable 31% of order
Slide 34: LNG Dual Fuel Fleet Development
LNG Dual Fuel Fleet Development Sustained and substantial uptake of LNG dual fuel vessels across shipping sectors LNG Dual Fuel Contracting LNG Dual Fuel Vessels on the Water 70 350 2021 year to date level of LNG DF contracting already 300 60 surpassed 2020 and equal with 2019 contracting Number of
Slide 35: Where are we in the cycle?
Where are we in the cycle? Timeline of each cycle not defined and varies Offshore renewables (wind) Weakening market Strong market Containers Dry Bulk LNG Recovering market Weak market LPG Chemical/Specialised Tankers Crude & Products Tankers Offshore 35 Interim Results Presentation | 30 June 2021 A
Slide 36: Status Financial/Securities Division
Status Financial/Securities Division Good progress in upward swinging core sectors and markets Solid path towards improving profitability Embracing the Green Transition and growth opportunities ➢ Re-organization completed in 2020 reduced cost base from ➢ A low carbon society is dependent on new Meta
Slide 37: Platform statistics: freight traded, users, modules
• USD 1bn of Freight traded on platform (CMD – USD235m) • Moving 57m Tonnes of Cargo (CMD – 22m) • 720 Corporate Clients (CMD – 650) • 4,400 users • 12 modules • 26 countries
Slide 38: Outlook
Outlook Interim Results Presentation | 30 June 2021 38 Andi Case and Jeff Woyda | 9 August 2021
Slide 39: Financial Outlook: Tailwinds vs Headwinds
Financial Outlook Tailwinds vs Headwinds Headwinds…? Macro Covid-19 Exchange questions rate How long is volatility Debt & the tail? inflation? Strength of sterling? Tailwinds Markets Company Supply side Green Volumes Cash The best • Lack of Transition generative Team across finance and debt every ar
Slide 40: Thank you
Thank you 40 Interim Results Presentation | 30 June 2021 Andi Case and Jeff Woyda | 9 August 2021
Slide 41: Disclaimer
Disclaimer Clarkson PLC The material and the information (including, without limitation, any future rates and/or forward looking predictions) contained herein (together, the "Information") are provided by Clarkson PLC (Clarksons) for general guide. The Information is provided on ‘as is’ and ‘as avai