Capital Markets Shipping Industry · PwC January 13, 2014 Global capital markets generally...

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Capital Markets Shipping Industry

Athens Ledra Hotel 13 January 2014

PwC

January 13, 2014

Agenda

2

Capital Markets • Shipping Industry

• Global top 10 exchanges – overview of activity

• US IPO markets – overview of activity

• A brief dive into the shipping industry – recent IPO’s, listing analysis, domicile

PwC

January 13, 2014

Global capital markets generally performed well 2013

3


• Global earnings and outlook continue to improve post-financial crisis, with developed economies gradually strengthening and no major economic crises looming as we move into 2014

• In 2013, as the US markets had a strong recovery with indices continuing to break record highs, the EU had slightly negative GDP, but is expected to become positive in 2014, Japan’s “Abenomics” delivered 2% growth, and while Chinese GDP has moderated over the past several years it remained at 7.7% growth in 2013

• The Global economy is starting to gain traction as companies have cuts costs over the last several years, repaired balance sheets, and are poised for expansion in 2014. However, global macro influences that could hamper equity markets growth include rising interest rates, foreign market instability, and Middle East instability

• Specifically in the US – ECM: both volume and value of 2013 IPO’s surpassed 2012 DCM: debt markets saw record levels of high-yield issuance again in 2013, approaching 2012 record highs

PwC

January 13, 2014

NYSE leads the world in listed market cap

4


The US continues to dominate global capital markets by market capitalization, with the NYSE and NASDAQ taking the top 2 spots with over 4,700 listings

Numbers above bar charts are total number of primary equity listings per exchange *London Stock Exchange includes (LSE and AIM), Toronto Stock Exchange includes TSX and TSX Venture, and Euronext includes Paris, Brussels, Amsterdam, and Lisbon USD Millions Source: S&P CapitalIQ

2281 primary equity listings

2506

1556 1985 2570 1146

3645 1792 891 591

0

2.000.000

4.000.000

6.000.000

8.000.000

10.000.000

12.000.000

14.000.000

NYSE NASDAQ Hong KongStock Exchange

London StockExchange

Tokyo StockExchange

Euronext(Europe)

The TorontoStock Exchange

AustralianSecuritiesExchange

Shanghai StockExchange

DeutscheBoerse AG

Utilities

Telecommunication Services

Materials

Information Technology

Industrials

Healthcare

Financials

Energy

Consumer Staples

Consumer Discretionary

PwC

January 13, 2014

NYSE dominates debt and M&A activity

5


Number of Transactions

Total Deal Value

USD Millions Source: Capital IQ

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

NYSE NASDAQ Hong KongStock

Exchange

LondonStock

Exchange

Tokyo StockExchange

Euronext(Europe)

The TorontoStock

Exchange


ShanghaiStock

Exchange

DeutscheBoerse AG

M&A Transactions

Debt Transactions

Equity Transactions

$-

$500.000

$1.000.000

$1.500.000

$2.000.000


Exchange

LondonStock

Exchange

TokyoStock

Exchange

Euronext(Europe)

TheTorontoStock

Exchange


ShanghaiStock

Exchange

DeutscheBoerse AG

M&A Transactions

Debt Transactions

Equity Transactions

PwC

January 13, 2014

US leads the world in IPO’s, Shanghai declines

6



Number of IPOs

Proceeds raised from IPOs

0

20

40

60

80

100

120

140


Exchange


Tokyo StockExchange

Euronext(Europe)

The TorontoStock

Exchange


ShanghaiStock

Exchange

DeutscheBoerse AG

2012

2013

$- $5.000

$10.000 $15.000 $20.000 $25.000 $30.000 $35.000 $40.000 $45.000


Exchange


Tokyo StockExchange

Euronext(Europe)

The TorontoStock

Exchange


ShanghaiStock

Exchange

DeutscheBoerse AG

2012

2013

PwC

January 13, 2014

PwC IPO watch – The US market has recently averaged 43 IPOs and $10.9 billion of proceeds per quarter

Volume of IPOs by quarter

Note: Does not include IPOs listed on foreign exchanges, closed-end funds or trusts

Source: SEC filings

Offering value of IPOs by quarter ($ bn)

29

41 34

64

33

52

21 28

45

33 30 38 34

63 63 78

0

20

40

60

80

100

2010 Q1 2010 Q2 2010 Q3 2010 Q4 2011 Q1 2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4

2010 - 168 IPOs 2011 - 134 IPOs 2012 - 146 IPOs 2013 - 238 IPOs

$4,2 $5,2

$4,8

$24,8

$13,0 $12,8

$3,2 $6,5

$5,8

$22,2

$6,7 $8,2 $7,8

$13,2

$11,8

$24.1

$-

$5,0

$10,0

$15,0

$20,0

$25,0

$30,0

2010 Q1 2010 Q2 2010 Q3 2010 Q4 2011 Q1 2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4

7


PwC

January 13, 2014

IPO’s raised $56.9 billion in 2013 and $42.9 billion in 2012

8


Financial $7,1

16,6%

Technology $20,0 46,6%

Healthcare $0,8 1,9%

Services $0,8 1,8%

Energy $5,8

13,5%

Industrial $3,7 8,7%

Consumer $3,2 7,5%

REIT $1,5 3,4%

2012

Consumer $10.3 18.1%

Energy $10.9 19.3%

Financial $5.7 10%

Healthcare $8.7

15.2%

Industrial $6.6

11.5%

REIT $5.6 9.8%

Technology $9.1

16.1%

2013


PwC

January 13, 2014

US Market volatility measure remains low

9


• Since Jan 2011, of the 518 IPO’s that took place, 68% of all IPOs occurred when the VIX was trading between 15 and 20 and 90% of all IPOs occurred when the VIX was trading below 20. These are periods of relatively low volatility, which generally promotes investor confidence.

•2013 saw low levels of volatility, as reflected by the VIX index amid a background of record equity market performance, partly driven by investors chasing yield.

- 50 100 150 200 250 300 350

35 up

30-35

25-30

20-25

15-20

0-15

# of IPOs and VIX

0

5

10

15

20

25

30

35

40

45

50

-

5

10

15

20

25

30

35

40

Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13

VIX

# o

f IP

Os

Monthly Number of US IPOs and VIX

IPOs VIXUSD Millions Source: Capital IQ and SEC filings

PwC

January 13, 2014

Recent shipping IPO’s are trading well below issue price

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Exchange Date Priced Proceeds 1 Day

Return

IPO to

Dec 31, 2013

Return

TEV/LTM

Revenue

TEV/LTM

EBITDA

OB 10/21/2013 $127 -2% 33% 0.4x 14.2x

SEHK 8/14/2013 $7 10% -5% 0.4x 7.1x

NYSE 7/31/2013 $140 -4% 11% 10.2x 43.3x

OTCNO 6/27/2013 $250 19% 27% N/A N/A

JKSE 2/11/2013 $9 50% 30% 2.2x 7.9x

ICSE 11/18/2012 $91 1% 16% 0.8x 8.7x

JKSE 9/28/2012 $6 22% -5% 2.0x 4.6x

SHSE 8/27/2012 $175 7% -25% 3.5x 13.4x

WSE 7/25/2012 $8 2% -3% 2.2x 5.6x

PwC

January 13, 2014

US, Scandinavia and Tokyo have the most shipping company listings

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Number of

Shipping

Companies

Listed

Total Market

Cap of

Shipping

Companies (USD Millions)

NYSE 27 $89,952

NASDAQ 18 $7,155

Oslo Bors 16 $7,639

OMX Nordic Exchange 16 $49,114

Tokyo Stock Exchange 16 $14,497

Number of

Shipping

Companies

Listed

Total Market

Cap of

Shipping

Companies (USD Millions)

NYSE 27 $89,952

OMX Nordic Exchange 16 $49,114

Hong Kong Stock Exchange 13 $21,785

Swiss Exchange 1 $15,422

Tokyo Stock Exchange 16 $14,497

By Number of Listed Shipping Companies

By Total Market Cap of Shipping Companies

Source: Capital IQ

PwC

January 13, 2014

US, Hong Kong and Shanghai markets show higher valuations

12


Multiples are an arithmetic mean (not market cap weighted) for shipping companies listed on the exchange TEV – Total Enterprise Value, (Market Capitalization plus net debt); LTM – Last Twelve Months Source: Capital IQ

TEV/LTM Revenue TEV/LTM EBITDA

Exchange Overall

Industrial

Sector

Shipping

Companies

Overall

Industrial

Sector

Shipping

Companies

NYSE 2.3X 6.4x 12.0x 21.9x

NASDAQ 2.5x 6.4x 13.8x 19.5x

Hong Kong 4.6x 2.0x 16.3x 42.4x

London 3.5x 3.4x 13.8x 9.8x

Tokyo 0.7x 1.1x 8.3x 9.2x

Euronext (Europe) 1.6x 4.5x 9.9x 11.4x

Toronto 4.4x 1.4x 10.8x 6.4x

Australia 3.3x 1.9x 9.1x 6.6x

Shanghai 4.2x 6.8x 26.2x 24.1x

Deutsche Boerse 1.1x 3.2x 11.7x 9.1x

PwC

January 13, 2014

Let’s all domicile in the Marshall Islands!!

13


Tax Domicile

Shipping

Companies

Incorporated

Total Market Cap of

Shipping Companies

(USD Million) Headquarters Exchange

Marshall Islands 34 $24,601

Greece (20), US (4), Bermuda (4),

UK (2), Canada (1), Monaco (1),

Hong Kong (1), Ireland (1),

Marshall Islands (1)

NYSE (18), NASDAQ (13),

OTC, Pink Sheets (2),

London (1)

Bermuda 14 $13,229 Hong Kong (6), Bermuda (5),

Greece (1), UK(1), Monaco (1)

Hong Kong (4), Oslo Bors

(3), Singapore (1), NYSE

(4) and NASDAQ(2)

China (incl Hong

Kong) 13 $18,913 China (including Hong Kong) (13)

Shanghai (6), Hong Kong

(6),Shenzhen (1)

United States 11 $70,235 US (8), Viet Nam (1), Hong Kong

(1), Monaco (1) NYSE (5), NASDAQ (2),

OTC, Pink Sheets (4)

Norway 10 $1,691 Norway (15) Oslo Bors (9), Norway OTC

(1)

Singapore 9 $2,773 Singapore (9) Singapore (8), London (1)

Malaysia 9 $8,396 Malaysia (9) Bursa Malaysia (9)

India 8 $1178 India (8) Mumbai (8)

Indonesia 4 $237 Indonesia (4) Jakarta (4)

Japan 2 $5,128 Japan (8) Tokyo (2)

Source: CapitalIQ; data reflected above was for a sample size of 177 of the 264 total shipping companies identified

Thank you.

This content is for general information purposes only, and should not be used as a substitute

for consultation with professional advisors.

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Capital Markets Shipping Industry · PwC January 13, 2014 Global capital markets generally...

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