Braemar Plc · LSE:BMS

Braemar — Braemar Shipping Services — Investor Presentation (February 2015)

40 slides from Braemar's investor presentation, Feb 26, 2015

  1. Slide 1: Braemar Shipping Services Plc Investor Briefing 26th February 2015

    BRAEMAR SHIPPING SERVICES PLC INVESTOR BRIEFING 26TH FEBRUARY 2015 SHIPBROKING + TECHNICAL + LOGISTICS

  2. Slide 2: Agenda

    AGENDA • ACM Integra=on (Mar=n Beer-­‐ Finance Director) • PorHolio Balance (James Kidwell – Chief Execu=ve) • Merged Broking Team (James Gundy – CEO, Shipbroking) • The Tanker Market (Henry Curra – Head of Research) • Q&A and Drinks SHIPBROKING+ Technical + Logis=cs + Environmental SHIPBROKING + TE

  3. Slide 3: Successful Strategy

    SUCCESSFUL STRATEGY a small shipbroking en?ty to a diversified shipping services group From 180 160 140 Revenue £m 120 Environmental (Projects) 100 Logis?cs Technical 80 Shipbroking (ACM) 60 Shipbroking (Braemar) 40 20 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Braemar incorpora=ng ACM SHIPB

  4. Slide 4: ACM - Integration

    ACM -­‐ INTEGRATION MARTIN BEER – GROUP FINANCE DIRECTOR SHIPBROKING + TECHNICAL + LOGISTICS

  5. Slide 5: ACM - Integration - Shipbroking Head Count

    ACM – INTEGRATION – SHIPBROKING HEAD COUNT Head Count – Post Integra=on TANKERS 137 DRY 89 SnP 44 UK Asia Other OFFSHORE 25 ADMIN/OTHER 61 Total 356 UK Asia-­‐Australia UK Asia UK 192 UK Asia ASIA 156 OTHER 8 UK Asia Total 356 SHIPBROKING + TECHNICAL + LOGISTICS

  6. Slide 6: Shipbroking - Combined Entity

    SHIPBROKING – Combined En=ty • Strengthened global presence • Delivered office consolida?on; 19 to 15 in total • Office loca?ons in all major territories • Achieved cost savings • Strong synergy between exis?ng teams • Established improved base for future growth Now 1 Now 3 Now 1 Now 2 ACM offices Braemar

  7. Slide 7: ACM - Merger Integration - Cashflows

    ACM – MERGER INTEGRATION -­‐ CASHFLOWS FY2015 £m Merger Cash Considera?on (10.2) Excep?onal items to half year ( 3.0) Capital Expenditure for office consolida?on ( 2.5) Sale of 35 Cosway Street 9.5 TOTAL OUTFLOW IDENTIFIED TO DATE ( 6.2) SHIPBROKING + TECHNICAL + LOGISTICS

  8. Slide 8: ACM - Integration - Benefits

    ACM – INTEGRATION -­‐ BENEFITS • Annualised Cost Savings: £4.0m • Integrated offices and teams • Greater benefits to clients • Posi?ve morale and stronger teams • Stronger pla^orm for future growth SHIPBROKING + TECHNICAL + LOGISTICS

  9. Slide 9: Portfolio Balance

    PORTFOLIO BALANCE JAMES KIDWELL -­‐ GROUP CEO SHIPBROKING + TECHNICAL + LOGISTICS

  10. Slide 10: Portfolio Balance - Revenue Split

    PORTFOLIO BALANCE – Revenue Split Agency Logis=cs Howells Tankers Broking: 49% Engineering Technical: 40.5% Sale & Purchase 30.5% Braemar SA Logis?cs: 10.5% Offshore Adjus=ng *Es=mated revenue split Dry based on H2 2014/15 Technical (excluding logis=cs cost of Offshore sales) SHIPBROKING + TECHNICAL +

  11. Slide 11: Portfolio Balance - Exposure to oil price and currency

    PORTFOLIO BALANCE Exposure to oil price and currency OIL PRICE DECLINE CURRENCY INCOME/COST Tankers Ç US$/£ Sale & Purchase -­‐ US$/£ Dry œ US$/A$, S$ Offshore È 75% £/£ Technical Offshore È 60% US$/Asian currencies Adjus?ng -­‐ Global/Global Salvage Associa?on -­‐ £/£ Engineering -­‐ 75% US$/£ Ho

  12. Slide 12: Portfolio Balance - Shipbroking Market Dynamics

    PorHolio Balance – Shipbroking Market Dynamics # World trade = # Freight rates # Supply vessels = $ Freight rates $ Shipyard prices = # New vessel contrac?ng (2013) # New technology = # New vessel investment (2013) $ Freight rates = # Spot chartering (2014) $ Freight rates = # Older vess

  13. Slide 13: Portfolio Balance - Broking

    PORTFOLIO BALANCE – Broking -­‐ Boeom cycle -­‐ Long term recovery -­‐ Vola=lity -­‐ Strength in Asia -­‐ Oil Price -­‐ Leader dD DRY: 19% -­‐ Major Player -­‐ Includes Containers -­‐ Synergy with Tankers TANKERS: 53% S&P: 15% Project Team -­‐ Services Vessels OFFSHORE: 13% -­‐ Short-­‐term challeng

  14. Slide 14: Portfolio Balance - Technical Division

    PORTFOLIO BALANCE – Technical Division • Significant increase in revenue of Braemar Engineering • Design of 6 LNG vessels for Nigeria • Trained 7 addi?onal staff members for client • Design complete • Site supervision underway • Working on new technology • Offshore seen comple?on of project work • Slow

  15. Slide 15: Merged Broking Team

    MERGED BROKING TEAM JAMES GUNDY – CEO BROKING SHIPBROKING + TECHNICAL + LOGISTICS

  16. Slide 16: Merged Broking Team

    MERGED BROKING TEAM • Established Shipbroking Board • Restructured desks and set the pla^orm • Tanker market assistance to the business • Shipbroking consolida?on and acquisi?ons • Strength of team in breadth and depth SHIPBROKING + TECHNICAL + LOGISTICS

  17. Slide 17: The Tanker Market & The Oil Trade

    THE TANKER MARKET & THE OIL TRADE HENRY CURRA – HEAD OF RESEARCH SHIPBROKING + TECHNICAL + LOGISTICS

  18. Slide 18: The Tanker Market & The Oil Trade - Key themes

    THE TANKER MARKET & THE OIL TRADE Key themes • Lower shipping costs, higher earnings -­‐ for some • Higher oil import demand -­‐ for now • Land and floa?ng storage demand • Impact slow-­‐steaming • Industry consolida?on • New refineries, pipelines, canals • The future of shale oil • Weak dry cargo shi

  19. Slide 19: Braemar ACM Research Services

    THE TANKER MARKET & THE OIL TRADE Braemar ACM Research Services • Client support – supply / demand modelling – forward-­‐views, event impact analysis – proprietary data • Revenue model – vessel valua?ons – subscrip?ons SHIPBROKING + TECHNICAL + LOGISTICS

  20. Slide 20: Lower Shipping Costs, Higher Earnings - For Some

    LOWER SHIPPING COSTS, HIGHER EARNINGS – FOR SOME SHIPBROKING + TECHNICAL + LOGISTICS

  21. Slide 21: Lower Shipping Costs, Higher Earnings - For Some

    LOWER SHIPPING COSTS, HIGHER EARNINGS – FOR SOME SHIPBROKING + TECHNICAL + LOGISTICS

  22. Slide 22: Lower Shipping Costs, Higher Earnings - For Some

    LOWER SHIPPING COSTS, HIGHER EARNINGS – FOR SOME SHIPBROKING + TECHNICAL + LOGISTICS

  23. Slide 23: Lower Shipping Costs, Higher Earnings - For Some

    LOWER SHIPPING COSTS, HIGHER EARNINGS -­‐ FOR SOME SHIPBROKING + TECHNICAL + LOGISTICS

  24. Slide 24: Lower Shipping Costs, Higher Earnings - For Some

    LOWER SHIPPING COSTS, HIGHER EARNINGS – FOR SOME SHIPBROKING + TECHNICAL + LOGISTICS

  25. Slide 25: Lower Shipping Costs, Higher Earnings - For Some

    LOWER SHIPPING COSTS, HIGHER EARNINGS – FOR SOME SHIPBROKING + TECHNICAL + LOGISTICS

  26. Slide 26: Lower Shipping Costs, Higher Earnings - For Some

    LOWER SHIPPING COSTS, HIGHER EARNINGS – FOR SOME SHIPBROKING + TECHNICAL + LOGISTICS

  27. Slide 27: Lower Shipping Costs, Higher Earnings - For Some

    LOWER SHIPPING COSTS, HIGHER EARNINGS – FOR SOME SHIPBROKING + TECHNICAL + LOGISTICS

  28. Slide 28: Higher Oil Import Demand - For Now

    HIGHER OIL IMPORT DEMAND – FOR NOW SHIPBROKING + TECHNICAL + LOGISTICS

  29. Slide 29: Higher Oil Import Demand - For Now

    HIGHER OIL IMPORT DEMAND – FOR NOW SHIPBROKING + TECHNICAL + LOGISTICS

  30. Slide 30: Land and Floating Storage Demand

    LAND AND FLOATING STORAGE DEMAND SHIPBROKING + TECHNICAL + LOGISTICS

  31. Slide 31: Land and Floating Storage Demand

    LAND AND FLOATING STORAGE DEMAND SHIPBROKING + TECHNICAL + LOGISTICS

  32. Slide 32: Land and Floating Storage Demand

    LAND AND FLOATING STORAGE DEMAND SHIPBROKING + TECHNICAL + LOGISTICS

  33. Slide 33: Impact of Slow Steaming

    IMPACT OF SLOW STEAMING SHIPBROKING + TECHNICAL + LOGISTICS

  34. Slide 34: Industry Consolidation

    INDUSTRY CONSOLIDATION • VLCCs – Feb 15 – Genmar (7 VLCCs + 7 on order) merges with Navig8 (22 VLCCs + 14 on order) – Oct 14 -­‐ Frontline (24 VLCCs + 2 on order) pools ships with TI (40 VLCCs) – From Jan to Jul 14 – Euronav buys 19 VLCCs from Maersk (now in TI Pool) • Suezmax – Feb 15 – Genmar (11

  35. Slide 35: New Refineries, Pipelines, Canals

    NEW REFINERIES, PIPELINES, CANALS • New Refineries in 2015 – Mid East: + 937k b/d (Yanbu (Yasref); Ruwais; Persian Gulf Star 1) – India: + 420k b/d (Cuddalore; Paradip) – China: + 300k b/d (various) • New Pipelines – Burma to China – Canada to USG • New Canals – Panama Canal expansion (2016) – Nicara

  36. Slide 36: The Future of Shale Oil

    THE FUTURE OF SHALE OIL SHIPBROKING + TECHNICAL + LOGISTICS

  37. Slide 37: The Future of Shale Oil

    THE FUTURE OF SHALE OIL SHIPBROKING + TECHNICAL + LOGISTICS

  38. Slide 38: The Future of Shale Oil

    THE FUTURE OF SHALE OIL SHIPBROKING + TECHNICAL + LOGISTICS

  39. Slide 39: The Future of Shale Oil

    THE FUTURE OF SHALE OIL SHIPBROKING + TECHNICAL + LOGISTICS

  40. Slide 40: Weak Dry Cargo Sector

    WEAK DRY CARGO SECTOR Since start of 2015 up to 20 Capes orders switched tankers – 8 and 14 LR2s; 3-­‐4 Suezmaxes; 3 LR1s; 0-­‐6 Afras) Confirmed Conversions -­‐ – Scorpio: 2 capes each at Daehan, Mangalia and Sungdong to a total 6 LR2s. 3 further capes at Sungdong to 3 LR1s. – Korean: 4 Capes to 4 L

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