interim results presentation 30 june 2020 andi case and jeff … · 1 day ago · 11 interim...

Interim Results Presentation

30 June 2020

Andi Case and Jeff Woyda

10 August 2020

Andi Case and Jeff Woyda | 10 August 2020Interim Results Presentation | 30 June 20202

Agenda

1Financial results

2Markets

3Outlook


Financial results

Jeff WoydaChief Financial Officer &

Chief Operating Officer

to 30 JuneResults summary


2020

£m

2019

£m

Revenue 180.4 167.8 +7.5%

Underlying profit before taxation(Before acquisition related costs)

21.1 20.1 +5.0%

Underlying earnings per share(Before acquisition related costs)

51.4p 48.5p +6.0%

to 30 JuneResults summary


2020

£m

2019

£m

Revenue 180.4 167.8 +7.5%

Underlying profit before taxation(Before acquisition related costs)

21.1 20.1 +5.0%

Acquisition related costs (0.2) (0.9)

Profit before taxation(After acquisition related costs)

20.9 19.2 +8.9%

Underlying earnings per share(Before acquisition related costs)

51.4p 48.5p +6.0%

Earnings per share(After acquisition related costs)

50.6p 46.2p +9.5%

Revenue, profit and marginSegmental performance


Revenue

2020

£m

Revenue

2019

£m

Profit

2020

£m

Profit

2019

£m

Margin

2020

Margin

2019

Broking 147.1 130.1 29.4 21.8 20.0% 16.8%

Financial 13.3 16.1 (1.6) 1.1 n/a 6.8%

Support 11.5 13.3 0.2 1.3 1.7% 9.8%

Research 8.5 8.3 3.1 2.8 36.5% 33.7%

to 30 June

to 30 JuneAcquisition related costs


2020

£m

2019

£m

Cash and share-based payment charges 0.2 0.4

Amortisation – Platou - 0.5

Total 0.2 0.9

Balance sheet


Dec 2016

£m

Dec 2017

£m

Dec 2018

£m

Dec 2019

£m

June 2020

£m

Tangible fixed assets 33.0 33.3 29.3 28.9 28.7

Intangible fixed assets (software only) – 1.5 5.4 9.9 12.7

Investments (relating to convertible bonds) – – 6.7 6.7 9.8

Investments (other) 4.1 4.9 4.8 4.8 4.7

37.1 39.7 46.2 50.3 55.9

Working capital (7.4) 8.8 18.9 14.0 9.5

Net available funds 98.4 79.1 73.4 84.7 100.3

91.0 87.9 92.3 98.7 109.8

Pensions 2.3 12.3 14.0 11.0 12.0

Deferred tax 7.1 4.6 2.2 3.1 1.4

Loan notes (23.6) – – – –

Leases (7.7) (9.2) (8.1) (10.8) (10.7)

Net assets before intangibles 106.2 135.3 146.6 152.3 168.4

Intangibles (excluding software above) 300.5 288.1 288.0 228.3 225.7

Net assets 406.7 423.4 434.6 380.6 394.1

Sea/ related IT costs


30 June

2020

£m

30 June

2019

£m

Items taken to Income Statement

Non capitalised items (Sea/ only) (3.8) (3.0)

Amortisation (0.2) (0.1)

30 June

2020

£m

31 Dec

2019

£m

Software related Intangible Asset b/d 1 January 9.8 5.4

Additions 3.1 4.7

Amortisation (0.2) (0.3)

Software related Intangible Asset c/d 12.7 9.8

Net available funds and free cash resources


30 June

2020

£m

31 Dec

2019

£m

30 June

2019

£m

Cash and cash equivalents 158.9 175.7 109.1

Interest-bearing loans and borrowings (3.4) (1.2) (6.0)

Current investment deposits 1.8 2.4 1.7

Net cash equivalents 157.3 176.9 104.8

Reserved for bonus (full cost) (57.0) (92.2) (44.5)

Net available funds 100.3 84.7 60.3

Held by regulatory businesses (11.5) (16.0) (2.0)

Free cash resources 88.8 68.7 58.3

Movement in free cash resources


(0.0)

(5.3)

(5.6)

(1.7)(3.1)

(1.8) 2.4 0.7

68.7 68.7

23.0

7.13.6

88.0

Free cashresources

Dec 19

Final Dividend Free cashresources after

dividend

Operating profit Depreciation Other Workingcapital

Taxation Lease payments Dividends paid tonon-controlling

interests

Capitaliseddevelopment

costs

Capex Other Sale ofinvestments

Free cashresources

Jun 20

Trade Debtors


30 Jun

2020

£m

31 Dec

2019

£m

Increase/

(Decrease)

0-3 months 50.8 52.9 (2.1)

3-12 months 12.3 9.4 2.9

Over 12 months - - -

63.1 62.3 0.8

Dividend history


6 79 10

1214

16 16 17 18 18 1921 22 22 23 24 25 25

911

16

2224

2626 27

3032 33

3739

4043

5051

1518

25

3236

4042 43

4750 51

5660

6265

7375

0

10

20

30

40

50

60

70

80

90

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Interim Final Extra Interim 2020

78

53


Markets

Andi CaseChief Executive Officer

…deep economic & trade impact; shipping’s biggest market China with signs of recovery…

Source: Clarksons Research, Industry Sources. GDP forecasts shown against date reported. ^Monthly seaborne trade series based on selected basket of dry bulk, oil, container, gas and chemical trades, representing c.80% of global seaborne

trade. Growth rates may not exactly reflect annual figures published in the Seaborne Trade Monitor and other monthly trade publications.

Economic Impact…

Global 2020 GDP Forecasts Now At –c.5% China 2020 GDP Forecasts Mainly Positive Global Monthly Seaborne Trade Basket^

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

Feb

-20

Ma

r-2

0

Apr-

20

Ma

y-2

0

Jun-2

0

Jul-2

0

International Forecasters

Chinese Forecasters

Pre-coronavirus average

Latest IMF

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

Feb

-20

Ma

r-2

0

Apr-

20

Ma

y-2

0

Jun-2

0

Jul-2

0

Latest IMF

OECD ‘Second Wave’ Scenario

Pre-coronavirus average

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

Jan

-17

Ap

r-1

7

Jul-

17

Oct-

17

Jan

-18

Ap

r-1

8

Jul-

18

Oct-

18

Jan

-19

Ap

r-1

9

Jul-

19

Oct-

19

Jan

-20

Ap

r-2

0

Jul-

20

% Y-o-Y

% Y-o-Y, 3mma

June data

TBC

Andi Case and Jeff Woyda | 10 August 2020

Interim Results Presentation | 30 June 202015

….sharpest trade decline for 30 years; regional and commodity complexities …

…Seaborne Trade Trends…

3 day moving average. Port calls defined as all instances of a vessel entering and leaving a defined port location, excluding instances where

vessel not recorded as travelling at less than 1 knot, and combining multiple consecutive instances at the same port where the vessel has not

left a buffered shape around the port or within the same day (in selected vessel sectors). Includes oil tankers MR and above, bulkers Panamax

and above, containerships 3,000+ TEU, VLGCs, LNG carriers 60,000+ cbm and PCTCs 6,000+ ceu.

0

1

2

3

4

5

6

7

8

9

10

11

12

13

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

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

20

19

20

20 (

f)

20

21 (

f)

ThousandsDry Bulk

Oil

Containers

Gas

Others

Trade per Capita (LHS)

Global seaborne trade, bn tonnes

Source: Clarksons Research.

100

150

200

250

300

-15 0

15

30

45

60

75

90

10

5

12

0

13

5

15

0

16

5

18

0

19

5

2019

2020

Day 0: Chinese New Year

2019: 5th February

2020: 25th January

Latest date:

26th July 2020

China Port Calls – Deep Sea Cargo Vessels* (No. Calls, 3dma)

Global Port Calls – Deep Sea Cargo Vessels* (No. Calls, 7dma)

1,000

1,100

1,200

1,300

1,400

Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19

2019

2020

Latest date:

26th July 2020

Days before/after Chinese New Year



…shipping’s disruption impact compared to other transportation sectors…

Source: Clarksons Research, UK DfT, WorldACD, IATA. Jul-20 represents data up to 26th July.

Shipping vs Other Transportation Sectors

‘Peak’ Activity Impact by Industry, % y-o-y

-10%

-32%

-38%

-44%

-59%

-66%

-88%

-94%

-95%

-100% -80% -60% -40% -20% 0%

Deep Sea Port Calls (Global) - May

Air Cargo (Global) - May

HGV (UK) - April

Ferry Port Calls (Global) - May

Light Commerical (UK) - April

Passenger Cars (UK) - April

Cruise Port Calls (Global) - June

Passenger Air (Global) - April

Passenger Rail (UK) - April

-100%

-90%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20

Deep Sea Cargo (China)

Deep Sea Cargo (Global)

Air Cargo

Ferry

Cruise

Passenger Air

Varying ‘Shape’ of Recovery, % y-o-y



…strongest 1H ClarkSea for ten years driven by tanker floating storage, complexities around individual segments as disruption impacts…

ClarkSea Index…


0

5

10

15

20

25

30

35

40

Jan-1

6

Jul-1

6

Jan-1

7

Jul-1

7

Jan-1

8

Jul-1

8

Jan-1

9

Jul-1

9

Jan-2

0

$000/day

Year Avg. $/day % change

2017 10,767 +14%

2018 12,144 +13%

2019 15,082 +24%

1H 2020 16,373 +39% y-o-y

Improving Markets Since 2016… Events in 2008/09…Covid-19 Disruption…

0

5

10

15

20

25

30

35

40

Sep-0

8

De

c-0

8

Ma

r-0

9

Jun-0

9

Sep-0

9

De

c-0

9

$000/day

Collapse of Lehman Brothers

triggers global panic. Oil prices fall

sharply, stock markets experience

worst day in 7 years.

US congress passes

bailout, markets

continue to plummet US recession ends

Last 12 months the strongest

overall since 2008

Period Avg $/day Trend

1H 2019 11,760 Up 8% y-o-y

2H 2019 18,404 Up 38% y-o-y, strongest half year since 2008

1H 2020 16,373 Up 39% y-o-y, strongest 1H since 2010

Period Avg $/day Trend

1H 2008 39,129 Up 35% y-o-y, strongest half year on record

2H 2008 26,191 Down 30% y-o-y

1H 2009 10,786 Down 72% y-o-y, lowest half year since 2002

2H 2009 11,875 Down 55% y-o-y, up 10% from 1H 2019

0

5

10

15

20

25

30

35

40

Sep 1

9

No

v 1

9

Jan 2

0

Ma

r 20

Ma

y 2

0

Jul 20

IMO 2020 introduced,

first Covid-19 cases

reported

WHO declares

global health

emergency

Tanker market spike

driving strong ClarkSea

Index, despite pressure

in other segments



VLCC Spot Market Earnings (Middle East – China)

Source : Clarksons

Tanker Market Developments

Andi Case and Jeff Woyda | 11 March 2019Results Presentation | 31 December 201819

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000Ja

n

Fe

b

Ma

r

Apr

Ma

y

Ju

n

Ju

l

Aug

Sep

Oct

No

v

De

c

$/d

ay

2019 2020 • Generally very strong and volatile tanker

freight market in 1st half 2020.

• Freight rates expected to trade in a

narrower range in 2nd half, however

potential for further volatility remains.

• Oil demand, oil supply and refinery runs

expected to rebound in the 2nd half, leading

to rising trade volumes.

• Balance between recovering cargo

volumes and likely reduction in floating

storage will influence freight levels.

…floating storage peaks at 11% of fleet; containers idle peaks in May; congestion…

…Shipping Segment Complexities…

Source: Clarksons Research. Vessels believed to be employed in the storage of oil or oil

products. This includes laden vessels that have been stationary for a period of 14 days+, as

well as other vessels which are considered to be engaged in storage based on the latest

available information. Criteria used to assess a vessel's status including location, duration

in current location, voyage history and fixture history. Includes dedicated long-term storage.

Tanker Storage, % Dwt Capesize Port Congestion, % of VesselsContainership Idle Fleet, % TEU

0%

2%

4%

6%

8%

10%

12%

Jan-1

9

Feb

-19

Ma

r-1

9

Apr-

19

Ma

y-1

9

Jun-1

9

Jul-1

9

Aug-1

9

Sep-1

9

Oct-

19

No

v-1

9

De

c-1

9

Jan-2

0

Feb

-20

Ma

r-2

0

Apr-

20

Ma

y-2

0

Jun-2

0

Jul-2

0

0%

2%

4%

6%

8%

10%

12%

Jan-1

9

Feb

-19

Ma

r-1

9

Apr-

19

Ma

y-1

9

Jun-1

9

Jul-1

9

Aug-1

9

Sep-1

9

Oct-

19

No

v-1

9

De

c-1

9

Jan-2

0

Feb

-20

Ma

r-2

0

Apr-

20

Ma

y-2

0

Jun-2

0

Jul-2

0

4%

6%

8%

10%

12%

14%

Jan-1

9

Feb

-19

Ma

r-1

9

Apr-

19

Ma

y-1

9

Jun-1

9

Jul-1

9

Aug-1

9

Sep-1

9

Oct-

19

No

v-1

9

De

c-1

9

Jan-2

0

Feb

-20

Ma

r-2

0

Apr-

20

Ma

y-2

0

Jun-2

0

Jul-2

0

Source: Clarksons Research. Idle containership time-series basis vessels not recorded with

a speed >1 knot for 7 days or more, and includes vessels with laid-up status or undergoing

scrubber retrofit.

Source: Clarksons Research, industry sources. As at start of month specified.



…regional variation and second “wave” risk; >$11tn stimulus globally…Covid-19 Spread vs Stimulus Measures…

Source: World Health Organisation, IMF, Clarksons Research. Latin America* = Brazil, Chile, Mexico

and Peru. Europe-5^ = UK, France, Italy, Germany, Spain.

Total Number Of Covid-19 Cases (millions)

0

2

4

6

8

10

12

14

16

18

Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20

Mill

ion

s

4th April: Total number of

global Covid-19 cases

reaches one million

23rd May: 5 million

17th June: 8 million



0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20

ChinaUSEurope-5^Latin America*IndiaRussia

No. Of New Daily Covid-19 Cases (7dma)

Country/Region Stimulus Measures

China• PBoC injected 5.1tn Yuan of liquidity into banking system; cuts to RRR rates.

• Government has encouraged lending to SMEs, delayed loan payments and encouraged

bond issuance by corporates, support for housing industry by reduced regulations.

US

• $483bn Paycheck Protection and Health Care Enhancement acts.

• $2.3tn+ in tax rebates, expanded unemployment benefits, loan guarantees, small

business loans, and local government funding.

• Fed funds rate cut to near zero, support for equities, bonds and treasuries markets.

EU/Eurozone

• Recent €750bn ‘recovery fund’ package on top of previous €540bn package which

allocated 2% of countries’ GDP towards health spending, €200bn support for corporate

lending, €100bn to support workers and jobs.

• Overall measures from national governments (as part of temporarily flexible state aid

rules) amount to €2.9tn of additional liquidity.

• €1.35tn asset purchasing programme by the ECB, as well as a raft of measures to

support national banks.

UK

• £16bn for healthcare, £29bn for business tax holidays and £8bn for social support;

Government paying 80% of income for furloughed workers; bounce-back loan schemes

for SMEs and business interruption loans for large companies.

• BoE increasing holding of government and corporate bonds by £200bn, £330bn of

loans and guarantees to businesses. Interest rate cuts.

India

• c.3% of GDP-worth of support for households and workers, healthcare infrastructure

and businesses.

• Cuts to key interest rates and c.4% of GDP of increased liquidity, relaxation of rules

around loan repayments and support for lenders.

Japan• 117tn Yen (21% GDP) emergency budget with support for healthcare, businesses,

households and local governments.

• 20tn Yen ($186bn) of additional purchases of corporate bonds.

GLOBAL• The IMF estimates that as of June 2020, governments around the world have

committed $11 trillion of fiscal support. Around half in the form of increased

government spending and reduced tax revenue, and half in the form of liquidity support.

Selected Key Economic Stimulus Measures



Tonne - miles supported by U.S-East volumes as Middle Eastern cuts take effect

Data Source: Clarksons | Note: VLGC export volumes from 2017 onwards are based on vessels that departed a U.S. port within the specified month.

Pace of U.S. LPG Growth to Asia on the increase again


12%

19%

22%

41%

47%

67%

62% 63%

68%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2012 2013 2014 2015 2016 2017 2018 2019 Jan-Jun20

Avera

ge U

S/E

ast

Movem

ents

%

2013–2020 YTD liftings

As US LPG exports continue to grow, more volumes are finding a home in the

East where LPG import demand is healthy

Import demand supported by growth in domestic consumption and also demand

from the Petchems sector when Naphtha/LPG price ratios shift in favour of LPG

Chinese PDH projects running at high utilisation levels since post lockdown as

the economics prove favourable

Additionally, new PDH projects and Ethylene crackers to start up in 2H20 which

will be reliant upon imported LPG

Indian LPG import requirement stimulated by the Government introduction of

free LPG cylinders to poorer households – beneficiaries have until end

September to redeem their entitlement

Shortfalls in Middle Eastern supply will help support tonne-miles as more volume

will have to be drawn from the West in order to cover Asian import demand

Strong underlying demand supports iron ore price and imports

Source: NBS of China, CISA

China Steel Demand Fundamentals


-35

-25

-15

-5

5

15

25

Jan

-16

Ap

r-16

Jul-

16

Oct-

16

Jan

-17

Ap

r-17

Jul-

17

Oct-

17

Jan

-18

Ap

r-18

Jul-

18

Oct-

18

Jan

-19

Ap

r-19

Jul-

19

Oct-

19

Jan

-20

Ap

r-20

Accu

mu

late

d G

row

th %

Real Estate Infrastructure Manufacturing

Fixed Asset Investment Growth China Steel Use in 2019 Iron Ore Prices and 10 day Steel Production

486

145

52 40 40

112

0.56

0.17

0.060.05 0.05

0.13

0%

10%

20%

30%

40%

50%

60%

0

100

200

300

400

500

600

700

800

Construction Machinery Auto ShipbuildingApplianceRailway

Container

Energy Others

%S

ha

re to

To

tal C

on

su

mp

tion

Mill

ion

to

nn

es

Steel Consumption %Share to Total Consumption

0

20

40

60

80

100

120

140

700

750

800

850

900

950

1000

1050

1100

Jan

16

Ap

r 16

Jul 16

Oct

16

Jan

17

Ap

r 17

Jul 17

Oct

17

Jan

18

Ap

r 18

Jul 18

Oct

18

Jan

19

Ap

r 19

Jul 19

Oct

19

Jan

20

Ap

r 20

Jul 20

TS

I 62$ Iro

n O

re P

rice ($

/tonne)

Mill

ion

To

nn

es

CISA 10 day Annualised steel production 62% Iron Ore Price (RHA)

Prolonged weather and pandemic affected seaborne shipments during first half

Source: GTIS, IHS

Iron Ore Seaborne Trade: Ramping up since June


Quarterly Iron Ore Seaborne Trade

310

320

330

340

350

360

370

380

390

400

410

Q1 Q2 Q3* Q4*

Mill

ion T

onnes

2020 3-yr Average 2019

Manufacturing PMIs, construction sector came under sharp pressure but now turning around

Source: Refinitiv

Asian Economies - PMI


Selected Asia Manufacturing PMIs• SE Asian economies emerge from restrictive measures with

construction restarting. PMIs improve in May / June.

• Share of imported steel demand in construction sector for Philippines

& Vietnam > 80%. Indonesia & Malaysia ~ 60%. Thailand < 60%.

• Major ASEAN economies have implemented large macroeconomic

policies to mitigate Covid-19 impact:

- Malaysia and Thailand have implemented economic support

packages equivalent to around 17% and 13% of GDP

- Indonesia and Philippines have announced sizeable fiscal stimulus

packages ranging around 3-5% of GDP.

- Philippines ramps up infrastructure investments to help further

support the economy

• Auto manufacturers cut projections for 2020. Thailand’s (ASEAN’s

leading carmaker) vehicle production to drop up to 50% this year.

• Construction materials: steel, cement, aggregates expected to see

recovery in trade 2H20.

25

30

35

40

45

50

55

60

65

Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20

Co

ntr

actio

n | E

xp

an

sio

n

China Caixin PMI India Indonesia Vietnam

Manufacturing expands

Manufacturing contracts

Capacity growth limited; idle capacity used to manage supply, now easing

Source: Clarksons Research, industry sources

Containership Supply Remains Manageable


Containership Fleet Capacity Growth Boxship Orderbook % Of Fleet, TEU Idle Containership Capacity, % Fleet TEU

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

1H

20

20

0%

2%

4%

6%

8%

10%

12%

Ja

n-1

8

Ma

r-18

Ma

y-1

8

Ju

l-1

8

Sep

-18

Nov-1

8

Ja

n-1

9

Ma

r-19

Ma

y-1

9

Ju

l-1

9

Sep

-19

Nov-1

9

Ja

n-2

0

Ma

r-20

Ma

y-2

0

Ju

l-2

0

0%

10%

20%

30%

40%

50%

60%

70%

200

0

200

2

200

4

200

6

200

8

201

0

201

2

201

4

201

6

201

8

202

0

includes capacity laid-up and undergoing scrubber retrofit

27

… fleet growth “manageable”: orderbook “shorter” at just 9% of fleet versus >50% in 2008; S&P and demolition activity picking up from April low …

Source: Clarksons Research, July 2020

-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

0

200

400

600

800

1,000

1,200

1,400

1,600

198

7

198

9

199

1

199

3

199

5

199

7

199

9

200

1

200

3

200

5

200

7

200

9

201

1

201

3

201

5

201

7

201

9

202

1f

Fleet, end year

Fleet Growth %

Fleet growth peaked

at c. 9% in 2010

Development of World Fleet, million GT

• world fleet 65% larger than 2008

• 35% more cargo being moved than 2008

2020 (f): 2.1%

2021 (f): 1.8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

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

Dry Bulk (Dwt) Containerships (TEU)

Deep Sea Tankers (Dwt) Specialised Products (Dwt)

LNG Carriers (No. of Vessels) LPG Carriers (Cu. M.)

Global Fleet, GT

Orderbook as % of fleet – lowest for 20 years

…Fleet & Orderbook Development…



Source: Clarksons Research. Data as of 1st July 2020. Retrospective changes to number of orders may occur

due to late reporting and other factors. Number of yards with at least one vessel of 20,000+ dwt on order.

Shipyards & Contracting….

0

50

100

150

200

250

300

350

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

Ju

l-2

0

Rest of World

China - Japan - Korea

2009: 322 yards

July 2020:

119 yards

No. Of Global Newbuilding OrdersNo. Of Active Yards

….newbuild ordering return to historic lows; shipyard capacity continues to consolidate…

Source: Clarksons Research. Data as of 1st July 2020. Retrospective changes to number of orders may occur due to late

reporting and other factors. Vessels of 20,000+ dwt. *2020 year to date basis January-July ordering.

2,927

256

0

500

1,000

1,500

2,000

2,500

3,000

3,500

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*



…IMO targets 50% CO2 reduction by 2050; regulatory timeline accelerating; technology uncertain; Green Transition still …

Environmental Pressures building…

Timeline Key

ECAs

SOx

NOx

GHG / EEDI

Green Recycling

Ballast Water

Current Position

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 - - - - - - 2030 - - - - - - 2050

Ratification of Ballast

Water Management

Convention (BWMC)

1.0% ECA

Sulphur LimitBaltic Sea

ECA in effect

Global NOx

Tier II Limit

3.5% Global

Sulphur Limit

Lower EEDI

reference line

(Phase 1)

EU MRV

certification

in effect

Lower EEDI

ref. line

(Phase 3)*

US

Caribbean

ECA in effect

Lower EEDI

ref. line

(Phase 2)

Global NOx

Tier I Limit

EEDI for

newbuildings

formally adopted

North Sea

ECA in effect

North

American

ECA in effect

EEDI & SEEMP

Mandatory

(Phase 0)

0.1% ECA

Sulphur limit

ECA NOx Tier III

emission limit

takes effect*

BWMC

enters into

force

North Sea &

Baltic Sea NOx

ECAs in effect

EU MRV reporting

period begins in

EU ports

0.5% Global Sulphur

Limit, carriage ban

from March

50% GHG

Reduction

Target

IMO DCS

reporting

period begins

EU SRR

enters into

force

40% CO2

Intensity

Reduction Target

BWMC

implementation for

majority of fleet

Source: Clarksons Research, July 2020. *EEDI phase 3 requirements brought forward to 2022 for gas carriers, general cargo ships and containerships.

Note: The 75th meeting of the IMO’s Marine Environment Protection Committee (MEPC) was originally scheduled in March-April 2020 but has been postponed due to Covid-19.



Shipping’s Carbon Footprint…

30

…shipping 2.4% of global CO2, but still the most carbon efficient mode of transport

Average CO2 intensity for different modes of freight transport (tonnes CO2 per million tonne-miles)

Source: Clarksons Research, IMO, IATA, Global Carbon Project. CO2 Intensity refers to tonnes of CO2 emitted per million tonne miles of trade. Shipping CO2 intensity calculated basis average global merchant fleet (100+ GT) as per Clarksons Research models.CO2 intensities for

Rail, Road and Air freight basis averages of a range of estimates provided in the IMO 2nd GHG study, 2009. Red bars extend from the lowest estimate provided to highest estimate provided in the IMO 2nd GHG study, 2009. Note: total CO2 emissions for airline industry includes

passenger as well as freight industry. All CO2 output statistics are based on annual figures. CO2 output for VLCC and tanker fleets are calculated basis a ‘modern’ c. 2010 built vessel. Total shipping CO2 output and global CO2 output volumes basis estimates for 2019.

0 500 1,000 1,500 2,000 2,500 3,000

Shipping

Rail

Road

Air (Freight)

Average CO2 Intensity

Red bars represent range of CO2

intensities for different types of

carrier within a transport

category.

Carbon footprint per annum of VLCCs, Tankers and Shipping as a share

of global CO2 emissions

1 VLCC

VLCC Fleet:

823 vessels

Oil Tanker Fleet

(10k+ dwt):

5,310 vessels

World Fleet:

c.99,000 vessels

World

%Global

CO2:

0.0%

%Global

CO2:

0.1%

%Global

CO2:

0.5%

CO2

Output:

~885 mt

%Global

CO2:

2.4%

CO2

Output:

36.7 bn t

2.4%

Shipping’s share

of global CO2

emissions, 2019



Reductions in CO2…

Average Vessel Speed Indices 2008-2019: down ~17%

70

75

80

85

90

95

100

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

Bulkers Containerships Crude Tankers

Product Tankers LNG Carriers

2019 Speed Trends:

Bulkers -0.9%

Containerships -2.1%

Crude Tankers +0.5%

Product Tankers -0.5%

LNG Carriers +0.2%

Estimated 2019 vs 2008 Speeds:

Bulkers down c.14 to c.11 knots

Oil Tankers down c.14 to c.11.5 knots

Containerships down c.19 to c.14 knots

LNG Carriers down c.18 to c.15 knots


…despite moving 35% more cargo and driven by speed reductions

200

300

400

500

600

700

800

900

1,000

1,100

1,200

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

CO2 Output down 14% 2008-2019

while moving ~35% more cargo;

Est. World Shipping Fleet CO2 Output, m. tonnes



Fleet Renewal & Fuel Transition……demolition ages reducing and retrofit potential…

Source: Clarksons Research, July 2020. “Eco” – defined as vessel with electronic main engine contracted after Jan 2012.

0%

2%

4%

6%

8%

10%

12%

0

20

40

60

80

100

120

% fle

et

mil

lio

n G

T

Eco Other % of Fleet (RHS)

World Fleet by Year of Delivery

1. 13% of fleet tonnage built between 1999 and 2004,

i.e. 15-20 years old.

2. 32% of fleet tonnage built 2009-13. Retrofit potential

– Energy Saving Technologies / Fuel Conversions?

3. 23% of fleet tonnage now “eco” and increasing, 17%

is scrubber fitted and increasing.



…LNG Fuel gaining traction……but no clear winner as the “solution” fuel…

Source: Clarksons Research, Data As Of July 2020

Existing Vessels (2,000+ GT) already burning Alternative Fuels Orderbook (2,000+ GT) to be burning Alternative Fuels

3% of fleet tonnage

alternative fuel

23% of orderbook tonnage

alternative fuel



0

20

40

60

80

100

120

0 50 100 150 200 250

Ma

x W

ate

r D

ep

th (

m)

Distance to Shore (km)

Long Term Potential

Probable

Construction

Active

…Offshore Wind Industry Growth Accelerating……10 year growth in MW capacity averages 24% as Energy Transition develops...

Internationalisation Of The Offshore Wind Industry Deeper And Further From Shore

Source: Clarksons Research, 2020.

Data Source: Clarksons Research Data Source: Clarksons Research

The area of the circles is proportional to total power

output in MW

0 20 40 60 80 100 120 140 160 180

China P.R.United Kingdom

VietnamGermany

South KoreaTaiwan

United StatesDenmark

JapanGreece

NetherlandsPolandFrance

SwedenCanadaBelgium

IrelandFinlandEstonia

IndiaBrazil

Canary IslandsNorwayOthers

ActiveConstructionPotential

No. Farms



…significant changes in financial landscape and now “Green Transition” focus…

Portfolio size source: Clarksons Research / Marine Money / Petrofin / Industry Sources, March 2020. Value of fleet & orderbook as at start July 2020. Capital Raised includes IPOs, Initial OTCs and Follow-ons, YTD up to start July.

…Financing requirements…

Value of The World Fleet & OrderbookEst. Portfolio Size at end 2019, $bn

0.0 5.0 10.0 15.0 20.0

BNP Paribas

China Exim

Bank of China

KfW IPEX-Bank

ABN AMRO

Sumitomo Mitsui Trust

Credit Agricole CIB

ICBC Leasing

Credit Suisse

K-Sure

BOCOMM Leasing

Citigroup

DNB

Nordea

ING Bank

SMBC

DVB

KEXIM

SEB

HSBC

Tankers$210bn

Bulkers$197bn

Boxships$128bn

Gas$120bn

Other Vessels$302bn

Offshore$259bn

World Fleet

& Orderbook

Value

$1.2tn

Capital Raised on NY & Oslo Exchanges, $bn

0

2

4

6

8

10

12

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

202

0 Y

TD

Offshore

Shipping



Trends to amplifying post Covid-19Technology…



• Sea/contracts now reached critical mass in Dry Cargo, Tankers, Containers and Sale & Purchase

• Sea/net proving itself as the leading AIS provider for vessel, port, cargo and commodity data

• Sea/chat handling significantly increased volumes of messages since lockdown

• Sea/gateway functionality now expanded to service customers across all chartering verticals

• Extensive interest across entire end to end suite of modules in the Sea/ platform, from all transaction

participants - charterers, owners, traders and brokers

• A significant number of key market leaders now using the platform

• A range of additional modules in development for roll out in Q4

• Integration with other vendor systems now well advanced


Outlook

Financial Outlook


Tailwinds vs Headwinds

Green

transition

Renewables

Volumes

Government

Stimuli

Infrastructure

investment

Supply side

challenged

• Lack of

finance

• Shipyard

sustainability

• Design

evolution

The best

Team across

every area

of the

business

Cash

generative

and debt

free

Exchange

rate

volatility

Brexit ,US

Election & ?

second

wave

Volumes

Covid - 19

Headwinds…?

Tailwinds

Sentiment

Uncertainty

Regulation

• IMO 2020

• 2030

• 2050

Markets Company

Thank you



Disclaimer


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

guidance and not by way of recommendation. The Information is provided on "as is" and "as available" basis. Clarksons 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 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, its Group companies and/or its licensors.

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

CLARKSON PLC, COMMODITY QUAY, ST. KATHARINE DOCKS, LONDON, E1W 1BF

interim results presentation 30 june 2020 andi case and jeff … · 1 day ago · 11 interim...

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