Results Presentation - Clarksons · 2018-03-12 · Results Presentation. Agenda Financial Results...

1 2 T H M A R C H 2 0 1 8

Results Presentation

Agenda

Financial Results

Markets

Outlook

Andi Case

CEO

Jeff Woyda

COO/CFO

12th March 2018 2017 Annual Results 2

http://www.clarksons.com/

Results summary

2017

£m

2016

£m

Increase

%

Revenue 324.0 306.1 +5.8%

Underlying profit before taxation(Before acquisition related costs) 50.2 44.8 +12.0%

Exceptional items - 11.1

Acquisition related costs (4.8) (8.6)

Profit before taxation(After acquisition related costs) 45.4 47.3 +25.1%

Underlying earnings per share(Before acquisition related costs) 116.8p 105.2p +11.0%

312th March 2018 2017 Annual Results


Results summary

2017

£m

2016

£m

Increase

%

Revenue 324.0 306.1 +5.8%

Underlying profit before taxation(Before acquisition related costs) 50.2 44.8 +12.0%

Exceptional items - 11.1

Acquisition related costs (4.8) (8.6)

Profit before taxation(After acquisition related costs) 45.4 47.3

Underlying earnings per share(Before acquisition related costs) 116.8p 105.2p +11.0%



Segmental margin

Revenue

2017

Revenue

2016

Profit

2017

Profit

2016

Margin

2017

Margin

2016

£m £m £m £m

238.9 233.6 43.9 40.2 18.4% 17.2%

52.0 41.0 10.1 6.8 19.4% 16.6%

18.5 17.8 2.1 2.1 11.4% 11.8%

14.6 13.7 4.8 4.9 32.9% 35.8%


Research

Broking

Financial

Support


Acquisition related costs

Acquisition related costs* 2017

£m

2016

£m

Cash and share-based payment charges 0.9 1.1

Loan note interest 0.3 0.9

Amortisation: Platou 3.6 6.6

4.8 8.6

*Assuming no further acquisitions, this should amount to a further £2.5m in 2018



Balance sheet

Dec 2012

£m

Dec 2013

£m

Dec 2014

£m

Dec 2015

£m

Dec 2016

£m

Dec 2017

£m

Tangible fixed assets 8.8 9.4 8.4 33.1 33.0 33.3

Investments 1.9 1.8 1.9 1.9 4.1 4.9

10.7 11.2 10.3 35.0 37.1 38.2

Working capital (2.8) 3.1 (1.8) (7.1) (15.1) (0.4)

Net available funds 75.2 75.0 115.7 91.6 98.4 79.1

72.4 78.1 113.9 84.5 83.3 78.7

Pensions (9.4) (1.8) (10.3) (4.1) 2.3 12.3

Deferred tax 12.5 10.0 13.0 8.4 7.1 4.6

75.5 86.3 116.6 88.8 92.7 95.6

Net assets before loan notes & intangibles 86.2 97.5 126.9 123.8 129.8 133.8

Loan notes - - - (46.1) (23.6) -

Net assets before intangibles 86.2 97.5 126.9 77.7 106.2 133.8

Intangibles 39.8 40.2 40.4 263.2 300.5 289.6

Net assets 126.0 137.7 167.3 340.9 406.7 423.4



8

Forward Order Book (“FOB”) for invoicing in the following year

2017

For 2018US$m

2016

For 2017US$m

Directors’ best estimate of deliverable FOB 93 112



Net available funds

2017

£m

2016

£m

Cash and cash equivalents 161.7 154.0

Current investment deposits 5.5 29.4

Net cash equivalents 167.2 183.4

Reserved for bonus (full cost) (88.1) (85.0)

Loan notes outstanding - (23.6)

Net available funds after loan notes 79.1 74.8

Held by regulatory businesses (25.0) (27.5)

Free cash resources 54.1 47.3



Movement in net available funds and free cash resources(after bonus & loan notes)

(0.2) (20.1)

(11.2)

(6.9)

(5.4)(1.5)

74.8

49.6

79.1 (25.0)

54.1

Net available fundsDec 16

Operating profit Other Dividends Working capital Taxation Capex Capitaliseddevelopment costs

Net available fundsDec 17

Cash held byregulated entities

Free cash resourcesDec 17



Dividend history

6 7 9 10 12 14 16 16 17 18 18 19 21 22 22 23911

16

2224

2626 27

3032 33

3739 40 43

50

0

10

20

30

40

50

60

70

80

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Interim Final

11

15 18 25 32 36 40 42 43 47 50 51 56 60 62 65 73



The Markets

1 2 T H M A R C H 2 0 1 8

Where were we in Freight/Earnings Shipping Cycles in 2017?

13

Offshore

Product tankersCrude tankers

Str

ong

ma

rke

tR

eco

veri

ng

ma

rke

t

We

ake

nin

g m

ark

et

We

ak m

ark

et

Timeline of each cycle not defined and varies

Containers

LPG

Dry Bulk

Chemical/Specialised tankers

LNG



ClarkSea Shipping Index

12th March 2018 14

0

5

10

15

20

25

30

35

40

45

50

55

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

$’0

00

/da

y

Average Maximum Minimum

Average 16,879 15,316 10,679 19,125 30,980 27,569 24,622 33,061 32,660 11,331 15,491 12,315 9,577 10,263 11,743 14,410 9,441 10,767

Max 23,099 24,404 16,821 28,695 44,513 33,926 29,139 50,714 50,402 15,779 20,686 14,936 12,426 17,040 16,684 18,383 13,876 13,214

Min 11,648 8,878 8,940 15,758 23,523 18,918 18,964 25,407 13,532 7,444 12,841 10,389 7,644 7,520 9,135 12,364 7,073 8,465

Data Source: Clarksons

2017 Annual Results


World Seaborne Trade - historic

12th March 2018 15

0

1

2

3

4

5

6

7

8

9

10

11

12

0

1

2

3

4

5

6

7

8

9

10

11

12

199

0

199

1

199

2

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

Billio

n p

eo

ple

Billio

n to

nn

es

major dry bulk minor dry bulk crude oil oil products chemicals liquefied gas containers other dry cargo World Population

Source: Clarksons/US Census Bureau

2017 Annual Results


0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

199

0

199

1

199

2

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

To

nn

es

pe

r ca

pita

World Seaborne Trade per CapitaTrade per Capita 2018-2030 Extrapolated Based on Average Absolute Growth Rate 1990-2017

12th March 2018 16


2017 Annual Results


0

2

4

6

8

10

12

14

16

18

0

2

4

6

8

10

12

14

16

18

199

0

199

1

199

2

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

202

0

202

1

202

2

202

3

202

4

202

5

202

6

202

7

202

8

202

9

203

0

Billio

n p

eo

ple

Billio

n to

nn

es

major dry bulk minor dry bulk crude oil oil products chemicals liquefied gas containers other dry cargo World Population

World Seaborne Trade & Population Growth – the future

12th March 2018 17


Trade per sector 2018-2030 Extrapolated Based on Average absolute Growth Rate in Trade per Capita per Sector 1990-2017

2017 Annual Results


World & U.S. Economic Growth

12th March 2018 18

Data Source: IMF

-4

-2

0

2

4

6

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

(f)

% c

ha

ng

e (

ye

ar

on

ye

ar)

World GDP US GDP

2017 Annual Results


Distribution of World Economic Growth vs Seaborne Trade Growth

12th March 2018 19

Data Source: Clarksons/IMF

-6

-4

-2

0

2

4

6

8

10

12

14

16

198

4

198

5

198

6

198

7

198

8

198

9

199

0

199

1

199

2

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

% c

ha

ng

e (ye

ar

on

ye

ar)

World GDP US GDP EU GDP China GDP India GDP World Seaborne Trade

2017 Annual Results


World Seaborne Trade vs. GDP

12th March 2018 20

0

20

40

60

80

100

120

140

160

0

2

4

6

8

10

12

14

16

19

85

19

87

19

89

19

91

19

93

19

95

19

97

19

99

20

01

20

03

20

05

20

07

20

09

20

11

20

13

20

15

20

17

20

19

20

21

20

23

20

25

20

27

20

29

GD

P C

urr

en

t P

rice

s (T

rill

ion

Do

lla

rs)

Wo

rld

Se

ab

orn

e T

rad

e (B

illi

on

to

nn

es)

World Seaborne Trade Trade trend volume GDP Current Prices

GDP trend volume Linear (World Seaborne Trade) Linear (GDP Current Prices)

Data Source: Clarksons/World Bank

2017 Annual Results


Growing Investor Confidence That The Commodity Rally Will

Continue

21

0.0

0.2

0.4

0.6

0.8

1.0

1.2

Fu

ture

s &

Op

tio

ns

(m

illio

ns)

Brent Net Longs WTI Net Longs Combined

Source: Bloomberg, ICE, CFTC



China’s “One-Belt-One-Road” Silk Road Economic Belt and 21st Century Maritime Silk Road

12th March 2018 22

• Main goal: Boosting economic growth and trade through infrastructure

development.

• Infrastructure such as roads, ports, railways and airports have been built and

funded by Chinese state-backed firms, but private Chinese firms and

international partners will fund new business opportunities.

• Chinese companies and their partners aim to put some US$350bn in projects

over the next 5 years.

• Outward Chinese Investment linked to US$190bn over the next five years.

• The end-game target of all size corridors is 2049, which will encompass 63% of

the World’s population and 29% of the World GDP.

• Public and Development finance from:

– Asian Development Bank – aim at $1.5trillion per year until 2030 (45 member

countries)

– New Silk Road Fund

– Export Import Bank of China

– Asian Infrastructure Investment Bank

– China Development Bank

– The New Development Bank

– Commercial banks can provide project finance to boost trade flows


AIIB’s Global Investments in Approved Power Plants, Rail and Port projects

12th March 2018 23

• The Asian Infrastructure Investment Bank (AIIB)

has contracted 24 projects worth about US$4.23

billion, in its two years since inception in 2016.

• Projects range from power plants to rail and port

facilities, currently mostly in Asia, Egypt & Oman.

• The bank aims to finance projects in South

America, Africa, and more in Middle East, in its

third year of operation.

2017 Annual Results


Infrastructure investment drive the demand for construction related

materials

12th March 2018 24

Construction Related Seaborne Trade Growth• China and Russia are discussing to extend

Eurasian Economic Union (EEU) membership to

include Russia, Belarus, Kazakhstan, Armenia and

Kyrgyzstan.

• EEU is holding talks with Iran and India to extend

the free trade block.

• China and Russia are active in development of the

Northern Sea Route. Yamal LNG project has

commenced. Belkomur railway project

commenced which is scheduled for completion by

2023.

• Port and railway investments in East Africa - port

expansions in Djibouti and Dar Es Salaam in

Tanzania and railways being built in Tanzania and

Kenya.

3%

10%

4%

16%

6%

9%

4%

0%

-14%

16%

7%

4%

11%

-8%

1% 1% 1%

5%

-15%

-13%

-10%

-8%

-5%

-3%

0%

3%

5%

8%

10%

13%

15%

18%

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8 (

f)

Tra

de

Gro

wth

(%

)

2017 Annual Results


12th March 2018 25

World Steel Consumption

Per Capita Steel Consumption Evolution

0

200

400

600

800

1,000

1,200

1,400

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80

Kg

Cru

de

Ste

el e

qu

ivale

nt p

er

pe

rso

n

Years

Japan (from 1955)

South Korea

(from 1973)

India (from 1995)

China (from 1995)

USA (from 1930)

2016 Per Capita Steel Consumption (finished steel prod.)

31

63

87

94

198

222

266

283

311

428

493

493

500

782

1,130

0 200 400 600 800 1000 1200

Africa

India

Brazil

Other Asia

Mexico

Middle East

Russia

USA

EU-28

Turkey

Japan

China

Germany

Taiwan

South Korea

Kg per person

World Average 208kg

Source: World Steel Association/IMF/Clarksons Platou

2017 Annual Results


12th March 2018 26

Manufacturing PMI’s increased across many countries

Global Purchasing Managers’ Indices Selected Asia Purchasing Managers’ Indices

44

46

48

50

52

54

56

58

60

62

Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17

US Japan Eurozone China

Source: HSBC, Markit, Caixin, Reuters

44

46

48

50

52

54

56

58

60

62

Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17

India S Korea Vietnam Taiwan

2017 Annual Results


27

Rises in Global Manufacturing send Commodity Prices Higher

Global Manufacturing Index Trending Up… …Demand Surge for Commodities

48

49

50

51

52

53

54

55

56

Feb-15 Aug-15 Feb-16 Aug-16 Feb-17 Aug-17

Global Manufacturing PMI

Source: Markit, JPMorgan, Bloomberg

240

260

280

300

320

340

360

380

400

Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18

Bloomberg Commodity Spot Index



28

Global Container Trade Growth

-15

-10

-5

0

5

10

15

20

25

19

80

19

81

19

82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

e

m. TEU

Source: Clarksons Research

Global Container Trade (TEU), Growth In Terms of Additional TEU, 1980-2017

1980s Average : 1.5m TEU pa



2010-17 Average : 8.7m TEU pa

In 2005 growth of 10.4% added

9.9m TEU to global trade; in

2017 growth of 5.2% added

9.4m TEU to global trade.



Oil Consumption per Capita

12th March 2018 29

203 204363

526832 919

1,6711,828

3,149

3,526

3,988

8,049

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Africa(1,190)

India(1,267)

Indonesia(258)

China(1,374)

Brazil(206)

Mexico(123)

European Union(515)

Japan(127)

S.Korea(51)

USA(323)

Canada(35)

Saudi Arabia(28)

Pe

r ca

pita

oil c

on

s (litr

e)

per capita oil cons World oil cons per capita OECD oil cons per capita

World Av. = 1.5 x China

World Av. = 3.8 x India

OECD= 4.0 x China

OECD = 10.4 x India

Million ppl

Source: EIA/BP Stats/US Census Bureau

2017 Annual Results


The oil market rebalancing is well in progress

30

• The oil market was largely balanced during

H2/17 with commercial inventories coming

down rapidly as a result

• The IEA currently forecasts slight

oversupply through 2018 on average. The

IEA’s demand growth estimate is however

conservative, particularly in light of current

strong global GDP growth. At the same

time, the IEA forecasts very strong non-

OPEC production growth in 2018

• In our view, the IEA potentially

underestimates demand growth and

overestimates non-OPEC supply growth,

and we forecast a fairly balanced market

for 2018

Data Source: IEA; EIA; Clarksons Platou Offshore

84

86

88

90

92

94

96

98

100

102

Q1

12

Q2

12

Q3

12

Q4

12

Q1

13

Q2

13

Q3

13

Q4

13

Q1

14

Q2

14

Q3

14

Q4

14

Q1

15

Q2

15

Q3

15

Q4

15

Q1

16

Q2

16

Q3

16

Q4

16

Q1

17

Q2

17

Q3

17

Q4

17e

Q1

18e

Q2

18e

Q3

18e

Q4

18e

Global Oil Supply and Demand balance

Demand Supply



31

Oil Production Developments

Data Source: EIA Feb 2018, IEA, Technip, Clarksons Platou

• U.S. crude production expected to rise substantially in 2018 despite declining

drilling efficiency and continued concerns about free cash flow, which may slow

future growth.

• U.S. crude exports will drive crude tanker tonne-mile growth in 2018 along with

increased Asian imports.

• Returning OPEC oil in 2019 is expected to add to crude oil trade volumes in a

more balanced oil market.

• Offshore project cost curve has come down substantially over the last three

years. Combined with gradual oil price recovery, Offshore has increasingly

become viable again.

0

1

2

3

4

5

6

7

8

9

10

11

0

500

1,000

1,500

2,000

Jan-0

9

Jul-09

Jan-1

0

Jul-10

Jan-1

1

Jul-11

Jan-1

2

Jul-12

Jan-1

3

Jul-13

Jan-1

4

Jul-14

Jan-1

5

Jul-15

Jan-1

6

Jul-16

Jan-1

7

Jul-17

Jan-1

8

Millio

n b

pd

No.

of R

igs

US Crude Oil Production Oil Rig Count

15

17

19

21

23

25

27

29

Jan-0

3

Jan-0

4

Jan-0

5

Jan-0

6

Jan-0

7

Jan-0

8

Jan-0

9

Jan-1

0

Jan-1

1

Jan-1

2

Jan-1

3

Jan-1

4

Jan-1

5

Jan-1

6

Jan-1

7

Jan-1

8

Millio

n b

pd

OPEC Middle East Crude Production

OPEC Middle East Crude Oil Production Capacity

Breakeven prices of new offshore projects have fallen materially



Offshore drilling rigs: Fixing activity is improving, both for jackups and

floaters

32

Data Source: RigLogix, Clarksons Platou Securities

Jackup fixing activity 2009-2017 Floater fixing activity 2009-2017

63

184

246

290

150

100

69 70 69

0

50

100

150

200

250

300

350

2009 2010 2011 2012 2013 2014 2015 2016 2017

Floaters, #rig years

240

294

385369

402

295

231

174

217

0

50

100

150

200

250

300

350

400

450

2009 2010 2011 2012 2013 2014 2015 2016 2017

Jack-ups, #rig years

Floaters seemingly stable, but 2015/16 saw substantial contract cancellations implying net demand was ~zero. During 2017 there were almost no cancellations, implying net demand has started improving slightly



Rig fixing back to growth mode

33

YoY growth in rig fixing activity, last 12M

27%

8%

19%

32%

36%

31%

10%

4%

-7%

-16%-18%

-16%

-26%

-20%

-27%-28%

-19%-21%

-14%

-24%

-9%

-14%

-10%

-19% -19%

-7%

-11%

17%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

2011 2012 2013 2014 2015 2016 2017

Yo

Y g

row

th

Data Source: RigLogix, Clarksons Platou Securities



Rig fleet supply side adjustment progressing. More than 100 floaters

scrapped since the downturn started late-14 – seen utilisation and fixing

improve

34

Floaters Scrapped – 34% of peak fleet Jack-ups Scrapped – 13% of peak fleet

102

0

20

40

60

80

100

120

0

2

4

6

8

10

12

14

16

18

20

Scra

pp

ing

to

tal

Scra

pp

ing

/quart

er

Quarterly scrapping, lhs Total scrapping, rhs

63

0

10

20

30

40

50

60

70

0

2

4

6

8

10

12

Scra

pp

ing

to

tal

Scra

pp

ing

/quart

er

Quarterly scrapping, lhs Total scrapping, rhs



Offshore Service Vessels: Active utilization levels for the large vessels

seems to have bottomed out and starts displaying slight improvement

35

Global AHTS utilization, vessels > 10,000 BHP Global PSV utilization, vessels > 2,000 DWT

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

100

200

300

400

500

600

700

Ja

n 2

01

3

Ju

l 2

01

3

Ja

n 2

01

4

Ju

l 2

01

4

Jan

2015

Ju

l 201

5

Ja

n 2

01

6

Ju

l 2

01

6

Ja

n 2

01

7

Ju

l 2

01

7

Active Idle

Laid Up Utilisation

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

100

200

300

400

500

600

700

800

900

1000

1100

1200

1300

Ja

n 2

01

3

Ju

l 2

01

3

Ja

n 2

01

4

Ju

l 201

4

Ja

n 2

01

5

Ju

l 2

01

5

Ja

n 2

01

6

Ju

l 2

01

6

Ja

n 2

01

7

Ju

l 2

01

7

Active Idle

Laid Up Utilisation

Graphs measure active utilization. Total utilization (including laid up vessels) is significantly lower, but reactivation of laid up vessels is costly and owners will only reactivate stacked units vs. reasonable term contracts

Data Source: Clarksons Research Services; Clarksons Platou Offshore



Liquidity rising in the 2nd hand market, typically a bullish indicator

12th March 2018 36

2nd hand sales by vessel type and year Commentary

• All-time high level of asset sales in 2017 (106), which may indicate rising confidence

• Many of the most distressed assets have changed hands

• Brokers indicate that ask prices are rising, especially for larger and high quality vessels

Source: Clarksons Research

0

20

40

60

80

100

120

2013 2014 2015 2016 2017

AHTS >16,000 BHP AHTS 12-16,000 BHP AHTS 8-12,000 BHP

AHTS 4-8,000 BHP PSV >4,000 DWT PSV 3-4,000 DWT

PSV 2-3,000 DWT PSV <2,000 DWT

2017 Annual Results


Shipping Fleet Development: 1990-20181

37

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

0

500

1,000

1,500

2,000

2,500

199

0

199

1

199

2

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

…

mill

ion dw

t

Bulkers Tankers Containers Gas Carriers Other Growth

Year-on-year fleet growth (RHS)

Fleet as at end year.

2018 is a projection.Comprises world merchant

fleet >100 GT, including

ship-shaped offshore units

Note: data prior to 1996 does not include retrospective changes and certain estimates.1Fleet forecast based on provisional estimates.



Global Newbuilding Orders at Historic Low…

38

Orders representative of vessels over 20,000 dwt

480 545

411 547

795

546 667

1,378

1,196 1,144

2,254

2,905

1,873

581

1,835

1,042

708

2,046

1,343

1,122

231

621

0

500

1,000

1,500

2,000

2,500

3,000

3,500

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

No

. Sh

ips

NB: Number of orders may change retrospectively due to late reporting of data.

Eco-Bubble

2010 2011 2012 2013 2014 2015 2016 2017

Oil Price $79 $111 $110 $108 $98 $53 $45 $57

Bunker Price

$450 $618 $639 $595 $532 $264 $213 $305



Demolition Trends 2000 – 2017

12th March 2018 39

441487

617 624

543600 595 574

315

190

269 278

436

1,148

940

1,139

1,392

1,165

985

809

951

798

0

10

20

30

40

50

60

70

80

0

200

400

600

800

1000

1200

1400

1600

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

Mill

ion d

wt

No.

of V

essels

Number of vessels demolished Annual Volume of dwt demolished (RH Axis)

Source: Clarksons

2017 Annual Results


Shipyard Inflationary Pressure

12th March 2018 40

Note: Currency data as 5th March 2018. Source: Bloomberg; ASIAIS

1040

1060

1080

1100

1120

1140

1160

1180

Mar2017

Apr2017

May2017

Jun2017

Jul2017

Aug2017

Sep2017

Oct2017

Nov2017

Dec2017

Jan2018

Feb2018

USD

/WO

N E

xch

ange

Rat

e

USD/WON Exchange Rate

Won has strengthened 6.7% against dollar over

the last year

$400

$450

$500

$550

$600

$650

Jan

2015

Mar

20

15

May

201

5

Jul 2

015

Sep

20

15

No

v 2

015

Jan

2016

Mar

20

16

May

201

6

Jul 2

016

Sep

20

16

No

v 2

016

Jan

2017

Mar

20

17

May

201

7

Jul 2

017

Sep

20

17

No

v 2

017

Jan

2018

US$

pe

r to

n

Korean Steel Price Index

Source: ASIAIS

2017 Annual Results


Orderbook as % of Fleet

12th March 2018 41

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Ord

erb

oo

kas a

% o

f e

xis

tin

g fle

et

Tankers - 10,000+ Dwt (% based on Dwt) Bulk Carriers - 10,000+ Dwt (% based on Dwt)Containerships - 100+ TEU (% based on TEU) LNG Carriers (% based on Cu. M.)LPG Carriers (% based on Cu. M.) Global Fleet - All Vessel Types (% based on No. of Vessels)

2017 Annual Results


Environmental Regulation Timeline


2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Ratification of Ballast

Water Management

Convention (BWC)

1.0% ECA

Sulphur

Limit

EEDI for

newbuildings

formally

adopted

Baltic

Sea ECA

in effect

North

Sea ECA

in effect

*At the MEPC 66 it was decided that, as of 1st September 2015, Tier III l imits within future ECAs will only apply to ships bu ilt after the date of adoption of the

ECA, or a later date as may be specified in the amendment designating the NOx Tier III ECA.

Global

NOx Tier

II Limit

N. Am

ECA in

effect

3.5% Global

ECA Sulphur

Limit

EEDI &

SEEMP

Mandatory

(Phase 0)

Lower EEDI

reference line

(Phase 1)

0.1% ECA

Sulphur

limit

ECA NOx

Tier III

emission limit

takes effect*

BWC

enters

into force

North Sea &

Baltic Sea to

be adopted as

NOx ECAs

MRV becomes

mandatory in

EU ports

MRV

certification

in effect

Lower EEDI

reference line

(Phase 3)

Potential entry

into force of

Hong Kong

Convention

0.5% Global

ECA Sulphur

Limit

ECA

NOx

MRV

EEDI

Hong Kong Convention

SOx

Ballast Water Convention

Key

Current Position

US Carrib.

ECA in

effect

EU Monitoring,

Reporting &

Verification

Lower EEDI

reference line

(Phase 2)

Global

NOx Tier

I Limit


Shipping Lending Overview: By Bank & Geography

43

Top 40 Banks Lending to Shipping (by year)

2010: $449.8bn 2011: $454.9bn 2012: $422.1bn 2013: $401.0bn 2014: $391.5bn 2015: $397.6bn 2016: $355.3bn

Reported Top 40 Bank Portfolios as at 31 December 2016

Geographical Breakdown of Lenders

EUROPE 83.1% 79.3% 75.1% 72.9% 70.5% 63.9% 62.2%

USA 2.1% 1.7% 2.8% 2.7% 2.6% 3.9% 4.8%

ASIA-PAC 14.8% 19.0% 22.0% 24.4% 26.8% 32.2% 33.0%

21.020.0

18.5 18.0 18.0 17.6

15.2 15.114.5

14.013.0

12.0 11.911.0 10.5 10.3

8.7 8.5 8.07.0 6.5 6.0 6.0 6.0 6.0 6.0

5.0 5.0 4.74.0 3.5 3.5 3.3 3.0 3.0 2.7 2.4 2.2 2.0 1.7

2010 2011 2012 2013 2014 2015 2016

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

500.0

0

5

10

15

20

25

To

p 4

0 B

an

k P

ort

foli

o’s

(U

S$ b

illi

on

s)*

Actively seeking to lend to both existing and new clients

Selective/restricted lending capacity/criteria

Actively reducing/selling portfolio and/or exiting shipping



Clarksons Platou Securities: In Brief

44

Leading investment bank within energy and maritime industries

Research

• Equity and credit research

• Company reports

• Sector reports

• Daily, weekly, monthly, and quarterly reports

Sales & Trading

• Equity and Debt instruments

• Secondary trading

• Block trades

• Forward Freight Agreements

• FX services

• Private Equity

Investment Banking

• Equity and Debt

• IPOs and listings

• Private and Public Offerings

• Block trades

• Refinancing

• Restructuring

• Valuations

• M&A advisory

• Private Equity

43%

Market share for shipping equity issues

2013 – 2018YTD

$34.8bn

Raised in equity and high yield debt since 2010

40%

Market share for offshore drilling equity issues

2010 – 2018YTD

2

Offices located in Oslo and New York



Shipping Equity Market Activity by Sector

45

$4,813

$3,454

$3,038

$2,122

$5,427

$938

$110

$1,398

-

1,000

2,000

3,000

4,000

5,000

6,000

DRY Crude Product LPG LNG Container Chemicals Other

Oslo NYC

$2,764

$1,803

$1,066

$387 $472

$1,982

$4,196 $544

$364 $463

$1,860

$764

$735

$726 $693

$110

$157

$597

$650 $230

$306

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017%

of

Ship

pin

g Eq

uit

y R

aise

d i

n N

ew

Yo

rk a

nd

Osl

o

Tanker Gas Dry Containers Other

US$m

raised in

sector

2013-2018 YTD Equity Raised by Sector Increasing Investor Focus on Dry and Containers



Leader in raising capital for energy and maritime industries

46

USD 19.0bn ECM capital raised since 2010 USD 15.8bn DCM capital raised since 2010

Clarksons Platou Securities has raised USD 34.8bn in capital for energy and maritime industries, 2010-2018YTD

1,158

3,601

815

3,764

4,813

1,101 1,130

2,622

0

2

4

6

8

10

12

14

16

18

20

0

1,000

2,000

3,000

4,000

5,000

6,000

2010 2011 2012 2013 2014 2015 2016 2017

Equity raised Cumulative billions

Cu

mu

lati

ve

(U

SD

bn

)

Eq

uit

y ra

ise

d p

er

year

(US

Dm

)

2,011

601

2,759

3,830

4,214

76

875 880

0

2

4

6

8

10

12

14

16

18

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2010 2011 2012 2013 2014 2015 2016 2017

Debt raised Cumulative billions

Cu

mu

lati

ve

(U

SD

bn

)

De

bt

rais

ed

pe

r ye

ar

(US

Dm

)12th March 2018 2017 Annual Results


43% market share in global shipping equity transactions

47

43%

57%

Market share (%)

9.2

12.1

Amount (USDbn)

~USD 21.3bn global shipping equity issues in the period 2013 – 2018YTD

~21.3bn

~43%

Clarksons Platou Securities has a market share of 43% in global shipping ECM, 2013-2018YTD

876670 759 920 777 939

2,022

500 519

50 53263

61 52 224 153 81 50276

288 653

957

2,468

1,153 912

691

797

528

276 122 251 316

773622 672

26

347

1,164 1,323

1,715

3,388

1,929 1,851

2,713

500

797

1,047

326 175

263 312 368

997

774 753

76

623

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2013 2014 2015 2016 2017

CPS (Sole or Joint Lead) Others

US

Dm

US

Dm



40% market share in global offshore drilling equity transactions

40%

60%

Market share (%)

5.0

7.4

Amount (USDbn)

Source: Bloomberg, company information and press releases

~USD 12.4bn global offshore drilling equity issues in the period 2010 – 2018YTD

~12.4bn

~40%

Clarksons Platou Securities has a market share of 40% in global offshore drilling ECM, 2010-2018YTD

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

2010 2011 2012 2013 2014 2015 2016 2017

US

D m

illio

n

Clarksons Platou Securities Others



Market leader in USD denominated bonds on Norwegian docs

Market share in # of core sector transactions

Market share in core sector issue volume

DCM placing power

• Clarksons Platou Securities has a sustained market leading position in core segments:

―Offshore drilling

―OSV

―Shipping

• Proven track-record of strong placing power over time and across core segments

• We are in continuous dialogue with a large number of institutional debt investors looking for exposure to energy and maritime industries

Source: Stamdata, Company filings, Clarksons Platou Securities Clarksons Platou Securities has a leading market share in core segments

29% 25% 43% 33% 33%0%

8%0

5

10

15

20

2011 2012 2013 2014 2015 2016 2017

# o

f iss

ue

s

CPS Others

20% 30% 50% 31% 26%0%

9%0

500

1,000

1,500

2,000

2,500

3,000

2011 2012 2013 2014 2015 2016 2017Issu

e v

olu

me

(USD

m)

CPS Others



Leading restructuring advisor

December 2015

Advisor to WWS Recovery in

Acquisition of WWS AS

$150m Debt Restructuring

December 2016

Financial Advisor to Bondholders


.

Proven track record Oil service –Selected recapitalization and restructuring credentials

Representation of Board of Directors, Companies, Banks, Bondholders, and Capital Providers

March 2016

Financial Advisor to Bondholders


December 2016

Financial Advisor to Company


March 2017



February 2017

Financial advisor to Secured Banks


February 2017

Sale of Ceona Amazon


July 2016

Fa i rness Opinion to Board of Directors

$1.75bn Debt Restructuring

November 2016

Fairness Opinion


June 2016

Financial Advisor to Secured Banks


Apri l 2016

Fairness Opinion


February 2015

Restructuring, Equity and Bond

Offering$50m Debt

Restructuring

May 2017



July 2017

Financial Advisor to Secured Bondholders


September 2017



• In excess of USD 13.5bn in oil service debt restructured since 2015

• Leading industry expertise combined with proven restructuring and financial strategy experience secures the best possible outcome for our clients

• Involved in oil service situations on a global basis, advising both public and private companies

• Demonstrated process leadership in recent complex situations involving a large number of stakeholders

• Able to create and drive consensus among stakeholders due to high industry credibility

• Independent and unbiased advisor with no objective other than achieving a value-maximizing solution for our clients



http://www.islandoffshore.com/

Clarksons Platou Securities has consistent transaction flow

Representative ECM, DCM, M&A and restructuring transactions (1)

Apri l 2017

USD 82mFol low-On

Equity Offering

Joint Lead Manager

May 2017

Financial advisor to

the Company

Financial Advisor

May 2017

Lis ting on

Os lo Axess

Joint Lead Manager

Songa Bulk

May 2017

Lis ting onOslo Stock Exchange

Sole Manager

June 2017

CAD 50m Equity Offering

Sole Selling Agent

July 2017

Financial Advisor to Secured Bondholders

(BOA OCV)

Sole Advisor

August 2017

NOK 30m Share Repurchase Tender

Offer

Sole Manager

August 2017

Advisor to Transocean in the

USD 3.4bn (EV) acquisition of Songa

Offshore SE

Sole Advisor

August 2017

USD 50m Equity Private Placement

Sole Bookrunner

September 2017


Financial Advisor

October 2017


Joint Lead Manager

October 2017

USD 360m Senior Secured Bond Issue

Joint Bookrunner

October 2017

USD 300m Senior Secured 2nd Lien

Notes Issue

Co-Manager

November 2017

NOK 200m Equity Offering

Sole Manager

November 2017


Joint BookrunnerFinancial Advisor

February 2018

Advisor to TechnipFMC in the 51% acquisition of

Is land Offshore Subsea

November 2017

NOK 500m Equity Private Placement

Joint Lead Manager

November 2017

USD 90mPubl ic Offering of Common Shares

Lead Underwriter

December 2017


Joint Bookrunner

December 2017

CAD 39mPrivate Placement

Lead Finder & Advisor

February 2018

USD 600m Senior Notes Issue

Co-Manager





December 2016

USD 500m Senior Notes Issue

Co-Manager

December 2016

NOK 275m Equity

Private Placement

Sole Manager

December 2016

Advisor to Prosafe SE

in acquiringAxis Offshore’s assets

Sole Advisor

December 2016

USD 150m

Convertible Senior Notes Issue

Co-Manager

December 2016

NOK 27m Equity

Private Placement

Sole Manager

December 2016

USD 155m Equity

Private Placement and N-OTC l isting

Joint Lead Manager

December 2016

Lis ting on

Merkur Market

Joint Lead Manager

Songa Bulk

January 2017


Sole Manager

January 2017


Joint Lead Manager

January 2017

USD 52mEquity Private

Placement (PIPE)

Sole Placement Agent

January 2017


Sole Manager

February 2017

USD 81mIni tial Public Offering

on NASDAQ

Joint Bookrunner

February 2017

Financial advisor to the Secured Bank Lenders

Sole Advisor

February 2017

Sale of Ceona Amazon (Deep water field

development vessel)

Sole Advisor

February 2017

USD 220mSenior Unsecured

Bond

Joint Lead Manager

February 2017

USD 101mPrivate Placement

Joint Lead Manager

Songa Bulk

February 2017

NOK 38mExercise of Share Option Program

Sole Manager

March 2017


Sole Manager

March 2017


Joint Lead Manager

March 2017

Financial advisor to the company

Financial Advisor

Apri l 2017

USD 317mInitial Public Offering

on NYSE

Co-Manager





June 2015


Joint Lead Manager

June 2015

Lis ting on Oslo Stock Exchange

Sole Advisor

July 2015


Placement

Sole Manager

August 2015

USD 75mSenior Secured Ca llable

Bond Restructuring

Sole Manager

October 2015

Equity Private Placement directed

towards MAC SA

Sole Manager

November 2015

USD 61mSecondary Equity

Offering

Joint Lead Manager

December 2015

Advisor to WWS Recovery in its

acquisition of WWS

AS

Sole Manager

February 2016


Joint Lead Manager

March 2016

Advisor to committee of unsecured bondholders

Sole Advisor

March 2016

USD 63mUnderwritten Public Offering of Common

Shares

Sole Bookrunner

Apri l 2016

Fairness opinion

Financial Advisor

June 2016

Co-financial advisor to the Committee of Bank

Lenders

Co-Financial Advisor

June 2016


Shares

Sole Bookrunner

June 2016

Up to USD 500mInvestment by

StonepeakInfrastructure

Partners Sole Financial Advisor

July 2016

Fairness opinion

Financial Advisor

September 2016


Shares

Joint Lead Manager

September 2016

USD 225mConvertible Senior

Notes Issue

Co-Manager

November 2016


Placement and N-OTC l i sting

Joint Lead Manager

Songa Bulk

November 2016

USD 52mUSD 150m

Underwritten Public Offering of Common

Shares

Joint Lead Manager

November 2016

Advisor toMitsui & Co., Ltd.

in establishing JV with Akastor ASASole Advisor

November 2016


Sole Manager



http://www.epic-gas.com/

https://www.google.no/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjl-qngxYPLAhUG6xQKHWcgBbAQjRwIBw&url=https://en.wikipedia.org/wiki/File:Golden_Ocean_Group_logo.png&psig=AFQjCNHBQTn_PbOW0cKL4w2t-NnsDHTxxQ&ust=1455961594785050

http://www.islandoffshore.com/

Dry Bulk Market Recovery Anticipated and Invested In

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

20.00

25.00

30.00

35.00

40.00

45.00

50.00

Jan2016

Feb2016

Mar2016

Apr2016

May2016

Jun2016

Jul2016

Aug2016

Sep2016

Oct2016

Nov2016

Dec2016

Jan2017

Feb2017

Mar2017

Apr2017

May2017

Jun2017

Jul2017

Aug2017

Sep2017

Oct2017

Nov2017

Dec2017

Jan2018

Feb2018

Bal

tic

Dry

Ind

ex

Ass

et V

alu

es (U

S$m

)

Capesize 180k dwt Resale Prices Kamsarmax 82k dwt Resale Prices Baltic Exchange Dry Index

$200m Equity Private

Placement$63m Public

Equity Offering $61m Public Equity Offering

$52m Public Equity Offering

Songa Bulk

$74mEquity Private Placement and N-OTC listing

$82M Follow-on Equity Offering

Songa Bulk

Listing on Oslo Axess

Songa Bulk

$101m Private Placement

From Jan 2016: Dry Bulk Asset Values and BDI with CP Securities Dry Bulk Activity…

Since Jan 2016:BDI up 190%Capesize Resale up 33%Kamsarmax Resale up 30%



https://www.google.no/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjl-qngxYPLAhUG6xQKHWcgBbAQjRwIBw&url=https://en.wikipedia.org/wiki/File:Golden_Ocean_Group_logo.png&psig=AFQjCNHBQTn_PbOW0cKL4w2t-NnsDHTxxQ&ust=1455961594785050

Creating value at the heart of world tradeUnderpinned by our values, our integrated business model provides the platform for an unrivalled level of service and information

that enables trade and creates long-term value.



Corporate Outlook


Cyber security

No more debt

Markets recalibrating

Demand improving

Supply side challenged

Finance requirement strong

Cash generative

Progressive dividend policy in 15th year

56


Disclaimer

12th March 2018 58

The material and the information (including, without limitation, any future rates and/or forward looking predictions) contained herein (together, the "Information") are provided

by H. Clarkson & Co. Ltd ("Clarksons Platou") for general guidance and not by way of recommendation. The Information is provided on "as is" and "as available" basis.

Clarksons Platou and all its Group companies make no representations or warranties of any kind, express or implied about the completeness, accuracy, reliability, suitability or

availability with respect to the Information. Any reliance placed on such Information is therefore strictly at the recipient's own risk and no responsibility is accepted for any loss

or damage howsoever arising. Please note that future rates and/or forward looking predictions are for illustration purposes only and given without guarantee; the ultimate

outcome may be different.

This Information is not for reproduction or distribution without Clarksons Platou’s prior written consent. Especially, the Information is not to be used in any document for the

purposes of raising finance whether by way of debt or equity. All intellectual property rights are fully reserved by Clarksons Platou, its Group companies and/or its licensors.

This disclaimer shall be governed by and construed in accordance with English law.

H. CLARKSON & CO. LTD, COMMODITY QUAY, ST. KATHARINE DOCKS, LONDON, E1W 1BF


Results Presentation - Clarksons · 2018-03-12 · Results Presentation. Agenda Financial Results...

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