interim results - clarksons · 17 august 2015 interim results 9 acquisition costs 2015

Interim Results

30 June 2015

Clarkson PLC

Agenda

Headline results Divisional performance The Markets Outlook

www.clarksons.com 17 August 2015 3 Interim Results

June 2015 £m

June 2014 £m

Revenue 145.3 111.7 +30%

Profit before taxation (Before exceptional items and acquisition costs) 23.6 15.8 +49%

Exceptional items (3.7) -

Acquisition costs (9.1) (1.7)

Profit before taxation (After exceptional items and acquisition costs) 10.8 14.1

Results Summary

Earnings per share (Before exceptional items and acquisition costs) 54.3p 62.2p


Financial +£12.2m (+239.2%)

Support -£1.2m (-8.5%)

Broking +£22.3m (+25.4%)

Research +£0.3m (+6.4%)

£110.1m

£87.8m

£17.3m

£5.1m

£12.9m

£14.1m

£5.0m

£4.7m

H1 2015 H1 2014

£145.3m

£111.7m

Including 5 months of Platou

Revenue

www.clarksons.com

Divisional Performance - Profit

17 August 2015 5 Interim Results

2015 H1 £m

2014 H1 £m

Broking 22.0 15.1

Financial 2.2 0.1

Support 2.0 2.5

Research 1.5 1.4


Clarksons US$m

Platou US$m

Total US$m

Opening FOB for invoicing in 2015 110 60 170 Billed in the first half (46) (27) (73) Remaining opening FOB due second half 64 33 97

% remaining excluding new 2015 business 57%

Forward Order Book**

**Directors best estimates


Exceptional Items 2015 £m

2014 £m

Double rent and service charge (CQ)** 1.9 -

Onerous lease (Singapore)** 0.3 -

Reorganisation costs** 1.5 -

** Non recurring items 3.7 -


Integration

• Rebranding of Broking and Financial as ‘Clarksons Platou’

• Repaid bank loans

• Integrated teams in new offices in Oslo and London

• Singapore and Dubai to be fully integrated in 2nd half

• Annualised £4m of synergies achieved

• Revenue synergies already proven in integrated business plan


Acquisition Costs 2015 £m

2014 £m

Cash & share-based payment charges 1.3 1.5

Legal & professional fees** 3.0 0.1

Loan note interest 0.4 -

Amortisation: Platou 4.4 -

Amortisation: Boxton** - 0.1 ** Non recurring items 9.1 1.7


Platou Acquisition Consideration

£m

Consideration per circular (£22.15 per share) 281.2

Fair value adjustment: shares (31.0)

Fair value adjustment: loan notes (0.3)

Consideration on acquisition (£18.90 per share) 249.9

Cash 23.5

Loan notes 46.5

Shares 179.9

249.9


Platou Acquisition Intangibles £m

Consideration on acquisition 249.9

Intangible assets 21.9

Goodwill 231.1

Fair value of net liabilities (3.1)

249.9

£m

Intangible assets 21.9

Amortised:

Year to 31 Dec 15 9.6





21.9


Jun 2015 £m

Dec 2014 £m

Cash and cash equivalents* 130.3 152.9 Current investments 5.3 25.3 Overdraft (7.7) - Net cash equivalents 127.9 178.2 Reserved for bonus (full cost) (41.2) (62.5)

Net available funds* 86.7 115.7

Cash consideration on acquisition - (23.4)

Net available funds 86.7 92.3

Reserved for dividend (6.6) (11.7)

Net Funds

* Includes placing proceeds of £30.6m

www.clarksons.com

Movement in Net Funds


85.1

115.7

96.5

86.7

30.6

4.3

24.0 (23.5)

(11.7)

(8.6)

(7.3) (5.0)

(1.2)

Net Fundspre-placing

Dec 14

Placingproceeds

Net Fundspost-

placingDec 14

Cash paidon

acquisition

Net fundsacquired

Net fundspost-

acquisition

Profit Dividend Capex Tax paid Debtors /creditors

Pension Net FundsJun 15


Balance Sheet 2011 £m

2012 £m

2013 £m

2014 £m

2015 £m

Tangible fixed assets 9.2 8.8 9.4 8.4 20.7

Investments 1.9 1.9 1.8 1.9 1.9 11.1 10.7 11.2 10.3 22.6

Working capital (2.8) (2.8) 3.1 (1.8) (3.3)

Net funds 71.1 75.2 75.0 115.7 86.7

68.3 72.4 78.1 113.9 83.4

Pensions (6.6) (9.4) (1.8) (10.3) (8.9)

Deferred tax 10.2 12.5 10.0 13.0 7.2 71.9 75.5 86.3 116.6 81.7

Net assets before loan notes and intangibles 83.0 86.2 97.5 126.9 104.3

Loan notes (incl. accrued interest) - - - - (45.5)

Net assets before intangibles 83.0 86.2 99.3 126.9 58.8

Intangibles 40.3 39.8 40.2 40.4 288.6

Net assets 123.3 126.0 139.5 167.3 347.4


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

0

5

10

15

20

25

30

35

40

45

50

55

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

Pen

ce p

er S

hare

Interim Final

Dividends

The Markets

16

www.clarksons.com

World Seaborne Trade


-

1

2

3

4

5

6

7

8

9

10

11

0

1

2

3

4

5

6

7

8

9

10

11

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

Bill

ion

peop

le

Bill

ion

tonn

es

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

Data Source: Clarksons / US Census Bureau

www.clarksons.com

World Seaborne Trade vs. GDP


0

20

40

60

80

100

120

140

160

0

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

GD

P Current Prices (Trillion D

ollars) Wor

ld S

eabo

rne

Trad

e (B

illio

n to

nnes

)

World Seaborne Trade Trade trend volume GDP Current Prices GDP trend volume

Data Source: Clarksons / World Bank

www.clarksons.com

World Seaborne Trade per Capita


0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

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

Tonn

es p

er c

apita

Data Source: Clarksons / US Census Bureau


Growing World Population

0

1

2

3

4

5

6

7

8

9

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

Bill

ion

peop

le

China IndiaOther Asia Pacific Middle EastNorth America Latin America & CaribsEurope Africa

5%

2%

6%

7%

15%

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

20

40

60

80

100

120

140

160

USA CHINA LATINAMERICA

INDIA AFRICA

Mill

ion

peop

le

Population % Growth

Population Dynamics 2014-2020

Impact on Energy, Food & Transportation

+1.1 bn people

Data Source: US Census Bureau

www.clarksons.com

World Population Growth


2030 (Projected) 8.32 billion 2014 (Estimated) 7.2 billion

Data Source: US Census Bureau

182

335 342

123

368

17 66 145

61

288 291

116

526

54 111

0

100

200

300

400

500

600

China(1.36 billion)

India(1.24 billion)

Other AsiaPacific

(1.44 billion)

Middle East(0.40 billion)

Africa(1.12 billion)

Europe(0.74 billion)

North America(0.35 billion)

Latin America &Caribbean

(0.61 billion)

Mill

ion

peop

le

1990-2010 2010-2030

Existing population

www.clarksons.com

88

90

92

94

96

98

2013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q1 2014-Q2 2014-Q3 2014-Q4 2015-Q1 2015-Q2 2015-Q3

Mill

ion

bpd

Demand Supply

Global Oil Demand / Supply Balances


Data source: EIA

www.clarksons.com

Oil Prices and Tanker Earnings


0

20,000

40,000

60,000

80,000

100,000

120,000

0

20

40

60

80

100

120

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

$/da

y

$/ba

rrel

Brent Crude Oil Price VLCC Earnings MR Products Tanker Earnings

Data source: Clarksons.


Timecharter Rates vs. Prices

0

20

40

60

80

100

120

140

160

180

0

10

20

30

40

50

60

70

80

90

Jan-

00Ja

n-01

Jan-

02Ja

n-03

Jan-

04Ja

n-05

Jan-

06Ja

n-07

Jan-

08Ja

n-09

Jan-

10Ja

n-11

Jan-

12Ja

n-13

Jan-

14Ja

n-15

$’00

0/da

y

1yr TC rate 5yr old Price 10yr old Price

0

20

40

60

80

100

120

0

10

20

30

40

50

60

Jan-

00Ja

n-01

Jan-

02Ja

n-03

Jan-

04Ja

n-05

Jan-

06Ja

n-07

Jan-

08Ja

n-09

Jan-

10Ja

n-11

Jan-

12Ja

n-13

Jan-

14Ja

n-15

0

10

20

30

40

50

60

70

80

90

0

5

10

15

20

25

30

35

40

45

Jan-

00Ja

n-01

Jan-

02Ja

n-03

Jan-

04Ja

n-05

Jan-

06Ja

n-07

Jan-

08Ja

n-09

Jan-

10Ja

n-11

Jan-

12Ja

n-13

Jan-

14Ja

n-15

$ m

illio

n

Aframax VLCC Suezmax

Data Source: Clarksons


Timecharter Rates vs. Prices

0

10

20

30

40

50

60

70

80

0

5

10

15

20

25

30

35

40

Jan-

00Ja

n-01

Jan-

02Ja

n-03

Jan-

04Ja

n-05

Jan-

06Ja

n-07

Jan-

08Ja

n-09

Jan-

10Ja

n-11

Jan-

12Ja

n-13

Jan-

14Ja

n-15

$’00

0/da

y

1yr TC rate 5yr old Price 10yr old Price

0

10

20

30

40

50

60

0

5

10

15

20

25

30

Jan-

00Ja

n-01

Jan-

02Ja

n-03

Jan-

04Ja

n-05

Jan-

06Ja

n-07

Jan-

08Ja

n-09

Jan-

10Ja

n-11

Jan-

12Ja

n-13

Jan-

14Ja

n-15

$ m

illio

n

0

10

20

30

40

50

60

70

0

5

10

15

20

25

30

35

Jan-

00Ja

n-01

Jan-

02Ja

n-03

Jan-

04Ja

n-05

Jan-

06Ja

n-07

Jan-

08Ja

n-09

Jan-

10Ja

n-11

Jan-

12Ja

n-13

Jan-

14Ja

n-15

Panamax/LR1 Handysize MR


www.clarksons.com

Specialised Products Spot Indices Robust Freight Markets & Encouraging Trade


0

20

40

60

80

100

120

140

160

0

20

40

60

80

100

120

140

160

2008

-01

2008

-07

2009

-01

2009

-07

2010

-01

2010

-07

2011

-01

2011

-07

2012

-01

2012

-07

2013

-01

2013

-07

2014

-01

2014

-07

2015

-01

2015

-07

Inde

x Va

lue

USD

p/b

arre

l

Brent Crude (LH Axis) Clarksons Spot Chemicals Index (RH Axis) Clarksons Spot Edible Oils Index (RH Axis)


www.clarksons.com

Benchmark Propane Prices v Baltic Freight Assessment


0

20

40

60

80

100

120

140

0

200

400

600

800

1,000

1,200

1,400

2010 2011 2012 2013 2014 2015

$/m

t - Baltic R

ate

$/m

t -

LPG

Pri

ce

Far East Index Propane Price (FEI) Middle East Propane CP Price

US Propane Price BALTIC 44kt Rate(Right Hand Axis)*

Source: Clarksons * Monthly Average Rate

$213

$395

$456

Jul 15

• US propane prices have been receding since mid April mostly due to increasing inventories

www.clarksons.com

Offshore Rates


0

20

40

60

80

100

120

140

160

50

60

70

80

90

100

110

120

2007

2008

2009

2010

2011

2012

2013

2014

2015

OSV Rate Index (left scale) Oil Price ($/bbl, right scale)

Drilling Rig Rate Index (Jack-Ups, left scale)

Index $/bbl

www.clarksons.com

Future of Offshore…


Remaining Reserves Production Costs

Data Source: IEA, EIA, APICORP,BOEM,IMF, CITI, Reuters

17 23

49 50 57

66

83 76

0

10

20

30

40

50

60

70

80

90

100

110

0 10 20 30 40 50 60 70 80 90 100

Prod

uctio

n C

ost p

er B

arre

l, U

SD$

(201

3)

Potential Production m bpd

Onshore Middle East

Shallow Water

Offshore

Other Conventional

Onshore Deep- water

Tight Oil

Onshore Arctic

Arctic

Ultra- Deepwater Heavy

Oil

Tar Sands

2012 $103/bbl

2010 $79/bbl

2005 $56/bbl

Price for 50% Total Reserve Extraction

US GOM : $20 Alaskan Arctic : $70

Breakeven Fiscal Prices Saudi Arabia: $92/bbl

Russia : $117/bbl

www.clarksons.com

China the leading force in the dry bulk market

China’s slow down in industrial production weighted heavily on the dry bulk market

0

500

1,000

1,500

2,000

2,500

46

48

50

52

54

56

Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15

China Purchasing Manufacturing Index vs Baltic Dry Index

China PMI

BDI

China Imp. 35%

China Exp. 4%

RoW 61%

1.135bn Total China

30 Interim Results 17 August 2015


World energy mix - World energy consumption 2014 BP statistical review

17% 17%

66%

56% 26%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

NorthAmerica

OtherAmericas

Europeand

Eurasia

MiddleEast

Africa China India OtherPacificAsia

Mill

ion

tonn

es o

il eq

uiva

lent

World energy consumption by type

Coal Oil Natural Gas Nuclear Hydro Other renewables

Coal consumption’s market share decline

Changes in energy mix will affect different ship asset classes. Coal loose to more greener energies.

70%

30% 2005

1.1bn

69%

31% 2010

1.6bn

66%

34% 2015

2bn

www.clarksons.com

50

100

150

200

250

1H12

1H13

1H14

1H15

2H12

2H13

2H14

1H12

1H13

1H14

1H15

2H12

2H13

2H14

Mill

ion

tonn

es

Global coal shipments

32

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1H12 2H12 1H13 2H13 1H14 2H14 1H15

China RoW

% S

hare

China lndia Europe Other Asia

China’s decline in coal imports could not be compensated before by increments in other importing countries. India’s imports are set to continue to increase.

Interim Results 17 August 2015

www.clarksons.com

50

100

150

200

250

300

350

400

1H12

2H12

1H13

2H13

1H14

2H14

1H15

1H12

2H12

1H13

2H13

1H14

2H14

1H15

1H12

2H12

1H13

2H13

1H14

2H14

1H15

Milli

on t

onne

s

Global iron ore shipments

33

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1H12 2H12 1H13 2H13 1H14 2H14 1H15

Big 2 Others

% S

hare

Australia Brazil Others

Low cost iron ore mines in Australia and Brazil displace high cost Chinese domestic and international supplies. The Two countries seasonally tend to have weaker first halves.

Interim Results 17 August 2015


Capesize Spot rate vs Asset price

30

35

40

45

50

55

60

0

10,000

20,000

30,000

40,000

50,000

60,000

Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15

Asset price in US$ M

illion

Spot

rate

in U

S$

Spot (Aver. 4TC's) Newbuild 5 Yr Old


World Container Trade

-10%

-5%

0%

5%

10%

15%

20%

0

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

(e)

2015

(f)

growth m TEU

Source : Clarksons Research

Trade Growth %


Containership Charter Rates & Prices

0

10

20

30

40

50

0

5

10

15

20

25

30

Jun-

10

Dec

-10

Jun-

11

Dec

-11

Jun-

12

Dec

-12

Jun-

13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

$m $000/day

Source : Clarksons Research

4400 teu gls 1 Yr TC

2750 teu gls 1 Yr TC

4400 teu 10yo SH Price

2750 teu 5yo SH Price

Outlook

17 August 2015 Interim Results 37


• Integration at an advanced stage and completed by year end

• Strong client support for Clarksons Platou & the integrated business model

• Global seaborne trade growth set to continue despite commodity price volatility

• Challenges balanced by opportunities

• Second half weighting


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

interim results - clarksons · 17 august 2015 interim results 9 acquisition costs 2015

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