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
Andi Case and Jeff Woyda | 10 August 2020Interim Results Presentation | 30 June 20203
Financial results
Jeff WoydaChief Financial Officer &
Chief Operating Officer
to 30 JuneResults summary
Andi Case and Jeff Woyda | 10 August 2020Interim Results Presentation | 30 June 20204
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
Andi Case and Jeff Woyda | 10 August 2020Interim Results Presentation | 30 June 20205
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
Andi Case and Jeff Woyda | 10 August 2020Interim Results Presentation | 30 June 20206
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
Andi Case and Jeff Woyda | 10 August 2020Interim Results Presentation | 30 June 20207
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
Andi Case and Jeff Woyda | 10 August 2020Interim Results Presentation | 30 June 20208
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
Andi Case and Jeff Woyda | 10 August 2020Interim Results Presentation | 30 June 20209
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
Andi Case and Jeff Woyda | 10 August 2020Interim Results Presentation | 30 June 202010
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
Andi Case and Jeff Woyda | 10 August 2020Interim Results Presentation | 30 June 202011
(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
Andi Case and Jeff Woyda | 10 August 2020Interim Results Presentation | 30 June 202012
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
Andi Case and Jeff Woyda | 10 August 2020Interim Results Presentation | 30 June 202013
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
Andi Case and Jeff Woyda | 10 August 2020Interim Results Presentation | 30 June 202014
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
Andi Case and Jeff Woyda | 10 August 2020
Interim Results Presentation | 30 June 202016
…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
Andi Case and Jeff Woyda | 10 August 2020
Interim Results Presentation | 30 June 202017
…strongest 1H ClarkSea for ten years driven by tanker floating storage, complexities around individual segments as disruption impacts…
ClarkSea Index…
Source: Clarksons Research.
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
Andi Case and Jeff Woyda | 10 August 2020
Interim Results Presentation | 30 June 202018
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.
Andi Case and Jeff Woyda | 10 August 2020
Interim Results Presentation | 30 June 202020
…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
26th June: 16 million
29th June: 10 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
Andi Case and Jeff Woyda | 10 August 2020
Interim Results Presentation | 30 June 202021
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
Andi Case and Jeff Woyda | 11 March 2019Results Presentation | 31 December 201822
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
Andi Case and Jeff Woyda | 11 March 2019Results Presentation | 31 December 201823
-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
Andi Case and Jeff Woyda | 11 March 2019Results Presentation | 31 December 201824
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
Andi Case and Jeff Woyda | 11 March 2019Results Presentation | 31 December 201825
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
Andi Case and Jeff Woyda | 11 March 2019Results Presentation | 31 December 201826
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…
Andi Case and Jeff Woyda | 10 August 2020
Interim Results Presentation | 30 June 202027
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*
Andi Case and Jeff Woyda | 10 August 2020
Interim Results Presentation | 30 June 202028
…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.
Andi Case and Jeff Woyda | 10 August 2020
Interim Results Presentation | 30 June 202029
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
Andi Case and Jeff Woyda | 10 August 2020
Interim Results Presentation | 30 June 202030
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
Source: Clarksons Research.
…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
Andi Case and Jeff Woyda | 10 August 2020
Interim Results Presentation | 30 June 202031
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.
Andi Case and Jeff Woyda | 10 August 2020
Interim Results Presentation | 30 June 202032
…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
Andi Case and Jeff Woyda | 10 August 2020
Interim Results Presentation | 30 June 202033
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
Andi Case and Jeff Woyda | 10 August 2020
Interim Results Presentation | 30 June 202034
…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
Andi Case and Jeff Woyda | 10 August 2020
Interim Results Presentation | 30 June 202035
Trends to amplifying post Covid-19Technology…
Andi Case and Jeff Woyda | 10 August 2020
Interim Results Presentation | 30 June 202036
• 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
Andi Case and Jeff Woyda | 10 August 2020Interim Results Presentation | 30 June 202037
Outlook
Financial Outlook
Andi Case and Jeff Woyda | 10 August 2020Interim Results Presentation | 30 June 202038
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
Andi Case and Jeff Woyda | 10 August 2020
Interim Results Presentation | 30 June 202039
Disclaimer
Andi Case and Jeff Woyda | 10 August 2020Interim Results Presentation | 30 June 202040
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