Results Presentation - Clarksons...2010 2012 2014 2016 2018* 2020* 2022* T) US LPG Export Growth 2010-2022* Source: Waterborne, Clarksons Platou. *Projected volumes. 1H18 growth constrained

1 3 T H A U G U S T 2 0 1 8

Results Presentation

Agenda

Financial Results

Markets

Outlook

Andi Case

CEO

Jeff Woyda

COO/CFO

13th August 2018 2018 Interim Results 2

http://www.clarksons.com/


Results summary

June 2018

£m

June 2017

£m

Increase

%

Revenue 152.6 156.8 +x.x%

Underlying profit before taxation(Before acquisition related costs) 19.2 24.5 +x.x%

Acquisition related costs (1.2) (2.6)

Profit before taxation(After acquisition related costs) 18.0 21.9

Underlying earnings per share(Before acquisition related costs) 45.8p 57.5p +x.x%

Earnings per share(After acquisition related costs) 43.2p 50.8p

313th August 2018 2018 Interim Results



Results summary

June 2018

£m

June 2017

£m

Increase

%

Revenue 152.6 156.8 +x.x%

Underlying profit before taxation(Before acquisition related costs) 19.2 24.5 +x.x%

Acquisition related costs (1.2) (2.6)

Profit before taxation(After acquisition related costs) 18.0 21.9

Underlying earnings per share(Before acquisition related costs) 45.8p 57.5p +x.x%

Earnings per share(After acquisition related costs) 42.5p 50.8p




Segmental margin

Revenue

June 2018

Revenue

June 2017

Profit

June 2018

Profit

June 2017

Margin

June 2018

Margin

June 2017

£m £m £m £m

111.5 118.0 15.9 21.0 14.3% 17.8%

22.7 23.2 4.7 5.0 20.7% 21.6%

10.6 8.3 0.9 0.7 8.5% 8.4%

7.8 7.3 2.4 2.4 30.8% 32.9%





GBP v USD

Net impact on Profit (£ 2.2m)

Benefit from Hedge £ 0.5m



Acquisition related costs

Acquisition related costs June 2018

£m

June 2017

£m

Cash and share-based payment charges 0.4 0.5

Loan note interest - 0.3

Amortisation: Platou 0.8 1.8

1.2 2.6




Balance sheet

Dec 2013

£m

Dec 2014

£m

Dec 2015

£m

Dec 2016

£m

Dec 2017

£m

Jun 2018

£m

Tangible fixed assets 9.4 8.4 33.1 33.0 33.3 30.9

Investments 1.8 1.9 1.9 4.1 4.9 4.9

11.2 10.3 35.0 37.1 38.2 35.8

Working capital 3.1 (1.8) (7.1) (15.1) (0.4) 14.6

Net available funds 75.0 115.7 91.6 98.4 79.1 60.2

78.1 113.9 84.5 83.3 78.7 74.8

Pensions (1.8) (10.3) (4.1) 2.3 12.3 19.9

Deferred tax 10.0 13.0 8.4 7.1 4.6 0.8

86.3 116.6 88.8 92.7 95.6 95.5

Net assets before loan notes and intangibles 97.5 126.9 123.8 129.8 133.8 131.3

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

Net assets before intangibles 97.5 126.9 77.7 106.2 133.8 131.3

Intangibles 40.2 40.4 263.2 300.5 289.6 296.8

Net assets 137.7 167.3 340.9 406.7 423.4 428.1




Net available funds and free cash resources

June 2018

£m

December 2017

£m

Cash and cash equivalents 95.9 161.7

Current investment deposits 0.5 5.5

Net cash equivalents 96.4 167.2

Reserved for bonus (full cost) (36.2) (88.1)

Net available funds 60.2 79.1

Held by regulatory businesses (16.1) (25.0)

Free cash resources 44.1 54.1




Movement in net available funds and free cash resources

(15.2)

(12.2)

(4.8)(0.9)

(4.0)

79.1

18.8

60.2 (16.1)

44.1

Net availablefunds

Dec 17

Operating profit Dividends Working capital Taxation Capex Capitaliseddevelopment

costs

Purchase ofinvestments

Other Net availablefundsJun 18

Cash held byregulatedentities

Free cashresources

Jun 18

(2.0)1.4





Generation of net funds (recurring items only)

Shareholder returns & tax Capex & pensions

Operating Dividend Tax Inflow/ Capex Capitalised Pensions Inflow/

Profit (Outflow) Development (Outflow)

£ £ £ £ £ £ £ £

2015 H1 Actual 24.0 (11.7) (7.3) 5.0 (8.7) - (1.2) (4.9)

H2 Actual 25.5 (6.5) (5.8) 13.2 (15.8) - (1.1) (3.7)

Year Actual 49.5 (18.2) (13.1) 18.2 (24.5) - (2.3) (8.6)

2016 H1 Actual 21.4 (11.9) (4.9) 4.6 (1.0) - (1.1) 2.5

H2 Actual 22.8 (6.6) (2.5) 13.7 (2.1) - (0.8) 10.8

Year Actual 44.2 (18.5) (7.4) 18.3 (3.1) - (1.9) 13.3

2017 H1 Actual 24.1 (13.1) (3.2) 7.8 (1.6) - (0.6) 5.6

H2 Actual 25.4 (7.0) (3.7) 14.7 (3.7) (1.5) (0.3) 9.2

Year Actual 49.5 (20.1) (6.9) 22.5 (5.3) (1.5) (0.9) 14.8

2018 H1 Actual 18.8 (15.2) (4.8) (1.2) (0.9) (2.0) (0.2) (4.3)

H2 (7.3) (3.6) (0.9) (2.0) (0.2)

Year (22.5) (8.4) (1.8) (4.0) (0.4)



Dividend history

6 7 9 10 12 14 16 16 17 18 18 19 21 22 22 23 249 1116

2224

26 26 2730 32 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 2018

Interim Final

73

12

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




Market Analysis

Where were we in freight/earnings shipping cycles in 1st Half 2018?

14

Tankers

Str

on

g m

ark

et

Reco

ve

rin

g m

ark

et

Wea

ken

ing

ma

rke

tW

ea

k m

ark

et

Timeline of each cycle not defined and varies

LNG

Dry Bulk

Chemical/Specialised tankers

LPG

Offshore


Containers



15

Year-on-year VLCC MEG-Far East spot market earnings

Data Source: Clarksons.

• Weak first half of the year mainly due to over

compliance with OPEC production cuts.

• Increased volumes of crude oil exports

expected in 2nd half of the year from Saudi

Arabia, UAE, Kuwait, Russia, the U.S. and

Brazil. Likely to be partially offset by reduced

exports from Iran and Venezuela. Q4

traditionally sees a stronger market, and this

seasonality is expected to resume this year.

• Further reduction in floating storage has added

to the trading fleet, even though scrapping has

led to a slight reduction in the total crude tanker

fleet size,

• If Iran uses own tonnage for floating storage as

previously, this will reduce the trading fleet size

and may tighten the crude tanker market..

0

20

40

60

80

100

120

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

$’0

00/d

ay

2018 2017 2016 2015 2014




USA - expansion of production and exports in LPG and LNG

sectors

16

0

5

10

15

20

25

30

35

40

45

2010 2012 2014 2016 2018* 2020* 2022*

Ex

po

rts (

Mil

lio

n M

T)

US LPG Export Growth 2010-2022*

Source: Waterborne, Clarksons Platou. *Projected volumes.

1H18 growth constrained by

Mariner East 2 terminal delays.

Growth pushed into ‘19


0

20

40

60

80

100

120

140

2010 2012 2014 2016 2018* 2020* 2022*E

xp

ort

s (

Mil

lio

n M

T)

Capacity Forecast Capacity Production

US LNG Export Growth 2010-2022*



Fleet growth across the sectors

17

0%

5%

10%

15%

20%

25%

30%

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

8f

201

9f

Tankers Specialised Products

0%

5%

10%

15%

20%

25%

30%

35%

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

8f

201

9f

LNG LPG

Source: Clarksons

0%

5%

10%

15%

20%

25%

30%

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

8f

201

9f

Ye

ar-

on

-Ye

ar

Fle

et

Gro

wth

Dry Bulk Containers




Order book as % of existing fleet*

18

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

Tankers Specialised Products

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

LNG LPG

Source: Clarksons. *Data as at start of each period

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

Ord

erb

oo

ka

s %

of

Ex

isti

ng

Fle

et

Dry Bulk Containers




Containership sector supply and demand growth

13th August 2018 19

0%

2%

4%

6%

8%

10%2

01

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8f

201

9f

% G

row

th

Supply Demand

Source: Clarksons. Demand basis global container trade, supply basis total containership capacity.

2018 Interim Results



20

Baltic Dry Index performance

Data Source: Clarksons.

The freight market performed 25% better than last year and

ended the 6 months 36% higher than last year.

Supramax and handysize markets consistently

outperformed last year’s levels.

Panamaxes underperformed in March and capes in both

March and April due to trade disruptions caused by labour

related strikes in Guinea affecting bauxite exports and in

Canada affecting iron ore exports. The suspension of Anglo

American iron ore operations in Brazil led to further

declines in iron ore exports.

Period rates and asset values followed the positive market

sentiment and remain resilient during the softer months.

Global manufacturing continues to expand albeit at a

slower rate than second half of last year. China’s new

housing starts continue to grow and reached an 11 month

high in May.

200

400

600

800

1,000

1,200

1,400

1,600

1,800Jan 1

6

Apr

16

Jul 16

Oct 16

Jan 1

7

Apr

17

Jul 17

Oct 17

Jan 1

8

Apr

18

Jul 18

Ind

ex V

alu

e




Active offshore rig count has stabilized and looks set to increase

forward


100

110

120

130

140

150

160

170

180

190

200 Total number of floaters under contract

270

280

290

300

310

320

330

340Total number of jack-ups under contract

Active offshore rigcount was stable through 2017 and so far in 2018. Tendering activity is currently rising and forward offshore rig count seems set to increase

Source: RigLogix; Clarksons Platou Securities

• The oil market has rebalanced

• Oil companies are reporting very strong cash flow

• E&P capex is set to increase

• Field development costs are substantially reduced

• Field development sanctioning activity is improving

• Active offshore rig count stabilised and set to increase

• Backlog for leading subsea EPC contractors stopped falling and stabilised

• Signals indicating potential increase in exploration in future



IMO 2020 rapidly approaching

22

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

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

20

21

20

22

20

23

20

24

20

25

Sulp

hur

conte

nt

%

ECA Global • Shipping industry evaluating

suitable methods of compliance

• Potential impact on newbuilding and

demolition activity

• Oil industry evaluating impact on

refining sector, product supply /

demand and trade

Global Sulphur Limit for Bunker Fuels Falling to 0.5% on 1st January 2020




Clarksons Platou Securities has leading transaction market share





Summary

• Chartering

• Offshore

• Sale & Purchase

• Ongoing investment

• Longer term fundamentals

• Currency




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 responsibil ity 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



Documents

Results Presentation - Clarksons...2010 2012 2014 2016 2018* 2020* 2022* T) US LPG Export Growth 2010-2022* Source: Waterborne, Clarksons Platou. *Projected volumes. 1H18 growth constrained