16 th Annual German Ship Finance Forum

Transcription

1 16 th Annual German Ship Finance Forum Loli Wu, Managing Director Capital Markets & M&A Update February 2017

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3 Constructive Equity Market Backdrop Post Election U.S. Indices Set New Records Post Election Post-Election 2017 YTD...With S&P Valuations Near All Time Highs Interest Rates Rise Above 2% For First Time Since Jan 2016 S&P % 9.9% 5.0% Current 17.6x Dow Jones 13.4% 12.5% 4.4% 1-yr Avg 16.7x Russell % 17.1% 3.1% Indexed VIX Index Price 5-yr Avg 15.2x NTM P/E DXY Index 2016 Post-Election 2017 YTD US 10YR (%) Nasdaq 7.5% 12.4% 8.5% 10-yr Avg 14.4x , US 10 Yr 7.7% 30.2% (1.2%) VIX (22.9%) (38.7%) (18.2%) 2.8 Inauguration USD 3.6% 3.1% (1.3%) 1, , , , , Inauguration 2, Inauguration US 10YR 11 interest rates 10 2, spike above U.S. U.S. 2% following Election 14.6 U.S. 1.4 Election Election election , Jun-16 Aug-16 Sep-16 Nov-16 Jan-17 Feb-17 Jun-16 Aug-16 Sep-16 Nov-16 Jan-17 Feb-17 Jun-16 Aug-16 Sep-16 Nov-16 Jan-17 Feb-17 S&P 500 NTM P/E S&P 500 Price Level... As Economic Optimism Leads to Rebound in Industrial Metals Indexed Post-Election 2017 YTD Gold 8.1% (3.3%) 7.5% Silver 15.0% (2.3%) 12.7% Copper 17.4% 16.6% 10.8% U.S. Election Sector Performance Post-Election (1) % Change 20% 17.2% 16.7% 15% 12.5% 11.3% 10.5% 10.1% 9.7% 10% 12.0% 8.5% 14.0% 120 Economic optimism leads to an initial rotation out of safe havens $271 5% 0% 2.3% 0.8% 0.9% 4.7% 4.3% 3.4% 2.3% Inauguration 80 Jun-16 Aug-16 Sep-16 Nov-16 Jan-17 Feb-17 $18 $1,235 (5%) (10%) (25%) Financials Transpo Biotech Consumer Discretionary Technology FANG Real Estate Consumer Staples 2016 Election Election Current Source: Bloomberg and Factset as of February 17, (1) Consumer Discretionary / Staples, Retail (Equal Weighted) and Tech track S&P 500 indices, Financials, Real Estate and Energy track Dow Jones indices and Biotech tracks its NASDAQ index. FANG includes: FB, AMZN, NFLX, GOOG. (22.7%) Energy

4 IPO Offer/ 1 Week 2H16 & 2017YTD Pricing Quarterly IPO Issuance IPO Market Off to the Best Start Since 2014 There are currently 2 IPOs on the road expected to raise $3.2bn in proceeds which would bring Q1 IPO volume to $6.3bn IPO Issuance, Pricing and Alpha Generation (1) % 26 31% 18.8% 46% 30% % 6 IPOs for $574mm in all of Q (3.1%) Q-15 3Q-15 4Q-15 1Q-16 2Q-16 3Q-16 4Q-16 1Q-17 Volume ($bn): $11.0 $5.4 $7.2 $0.6 $4.7 $5.9 $7.3 $3.1 2H16: 46 IPOs 2017YTD: 10 IPOs 18.1% 30% Above In Range Below 27.1% 50% 20% 6.9% 8 IPOs for $2.8bn in January alone % Performance of Recent Maritime Equity (2) Offer Price to: # of Deals 6 Months (3) Current Follow-Ons IPOs % (58.4%) (29.5%) (50.2%) (22.1%) 4.7% % 38.4% % % (40.4%) % (13.1%) (4.7%) (32.9%) Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 Sources: Dealogic and Factset as of February 17, ) Includes SEC registered IPOs with a base deal value greater than or equal to $50mm. Excludes MLPs, SPACs, REITs, BDCs, and YieldCos. 2) Includes United States or Norwegian IPOs and FOs with a base deal value greater than or equal to $50mm. Excludes bought deals. 3) Performance 6 months following offering date.

5 Most Shipping Sectors Have Rebounded from 2016 Lows Performance S&P 500 Crude Tankers (1) Container Liners (2) LNG (3) Drybulk (4) Containership Leasing (5) WTI Crude Maritime MLPs (6) 3 Months 7.5% 3.4% 30.7% 4.3% 18.2% (16.1%) 17.7% 15.0% 9 Months 14.8% (23.0%) 24.9% 33.0% 46.4% (40.7%) 10.6% 20.4% 12 Months 22.0% (25.4%) 23.2% 57.7% 49.8% (41.4%) 74.1% 60.0% (Indexed to 100) +74.1% +60.0% +57.7% +49.8% +23.2% +22.0% (25.4%) (41.4%) 3 Source: FactSet as of February 17, (1) Crude Tankers include: DHT Holdings, Euronav, Frontline, Gener8 Maritime, International Seaways, Nordic American Tanker and Teekay Tankers. (2) Container Liners include: Orient Overseas, Maersk, Evergreen Marine, Hyundai Merchant Marine and COSCO Shipping. (3) LNG includes: GasLog, Golar LNG and Hoegh LNG. (4) Drybulk includes: Golden Ocean, Star Bulk, Navios Maritime Holdings, Genco, Eagle Bulk, Diana Shipping, Scorpio Bulkers and Safe Bulkers. (5) Containership Lessors include: Danaos, Seaspan, Costamare, Diana Containerships, and Global Ship Lease. (6) Maritime MLPs include: Navios Maritime Partners, Navios Maritime Midstream Partners, Teekay Offshore Partners, Teekay LNG Partners, Hoegh LNG Partners, GasLog LNG Partners, Golar LNG Partners, Dynagas, Capital Product Partners, KNOP Offshore Partners.

6 Improving Fundamentals Have Boosted Share Prices in Container Leasing Industry Recently Indexed Share Price Performance (Indexed to 100) Share Price Performance Since Year 1-Year 6-Month TGH (49.6%) (49.0%) 63.4% 85.4% CAI (26.0%) (29.8%) 195.0% 116.8% TRTN (37.1%) (33.2%) 162.1% 73.2% 09-Nov-15 Triton and TAL announced plan to merge 12-Jul-16 Triton and TAL complete merger (26.0%) (37.1%) (49.6%) 4 Source: FactSet as of February 17, 2017.

7 After a Strong 2013 & 2014, Equity Issuance Has Declined Significantly Maritime Equity Issuance (U.S. + Norway) $6,000 $498 $5,000 $522 $4,000 $3,000 $1,189 $996 Golar LNG Deals ~$2.6bn $2,000 $2,569 $863 $3,233 $580 $915 $412 $665 $400 $762 $4,672 $183 $570 $1,000 $677 $683 $978 $1,036 $1,493 $150 $1,060 $1,951 $1,253 $1,520 $2,190 $1,399 $460 $705 $ Follow-On IPO NOK 5 Source: Dealogic. Note: USD in millions.

8 Consolidation in Container Shipping Has Truly Started Announces the acquisition of Deal Value: $5bn Combined entity will have market share of ~11.5%, capacity of 2,399,000 TEUs and fleet of 563 vessels Filed for bankruptcy Filed for bankruptcy to protect vessels from being seized by creditors For months, Hanjin was struggling to raise liquidity and restructure its debt Deal Value: Announces the acquisition of $4bn Cements Maersk Line s global leadership position and delivers growth to APM Terminals December 2015 April 2016 August 2016 October 2016 December 2016 Announces the acquisition of Deal Value: $5bn Combination will create fifth largest container shipping line in the world with market share of ~7% Combined entity will have transport capacity of ~1.6 million TEU, fleet of 237 vessels and annual turnover of ~$12bn Merger Deal Value: $3bn Agreed to combine container operations to create the world s sixth-largest box carrier Combined entity will have market share of ~7%, fleet of 256 vessels and generate sales of $19bn annually 6 Source: Company website and other publicly available information.

9 Is U.S. Airline Consolidation a Good Roadmap for Container Liners? Pre-Consolidation U.S. Airline Industry Global Container Liner Industry Network Business GDP Correlated Overcapacity Limited Number of Suppliers Shareholder Discipline? 7

10 Bankruptcies in U.S. Airline Industry Filed for Chapter 11 bankruptcy Filed for Chapter 11 bankruptcy for the second time Filed for Chapter 11 bankruptcy August 2002 December 2002 September 2004 September 2005 November 2011 Filed for Chapter 11 bankruptcy Filed for Chapter 11 bankruptcy Filed for Chapter 11 bankruptcy 8

11 Drove Wave of Consolidation 14-Apr-08 3-May Feb-13 4-Apr-16 Announced acquisition of Announced acquisition of Announced merger with Announced acquisition of (Indexed to 100) Deal value: ~$6.5bn Deal value: ~$6.2bn Deal value: ~$2.3bn +2,511% +1,975% +1,204% +91% 9 DAL AAL UAL ALK Source: Company website, FactSet as of February 17, 2017 and Other publicly available information. Note: DAL Delta Air Lines; AAL American Airlines Group; United Continental Holdings; ALK Alaska Air Group

12 And Have Led to Unprecedented Profitability U.S. Airline Pre-tax Income Margin (2009A 2015A) 14.6% 9.1% 5.6% 3.6% 2.0% 2.9% (3.4%) Pre-tax Income Margin 10 Source: Wall Street research.

13 Why? ASM (Capacity) (In 1000s) , ,043.6 PRASM ( per Mile) (In Cents) ASM Economic Fuel Cost per Gallon ($) (In Dollars) PRASM Source: Wall Street research. Note: Represents U.S. domestic airline industry metrics. Fuel Cost per Gallon

14 Change in U.S. Airline Industry (2005 vs. 2015) Brent Crude $55 $54 3 Yr. Avg. GDP Growth 3.4% 2.1% Industry ASMs (bil) 1,000 1,067 Industry Earnings ($28) billion $19 billion Industry Structure Fragmented, Inefficient, Unfocused Efficient, Focused on Demand 12 Sources: American Airlines.