www.pwc.com
Capital Markets Shipping Industry
Athens Ledra Hotel 13 January 2014
Agenda • 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
Capital Markets • Shipping Industry PwC
January 13, 2014 2
Global capital markets generally performed well 2013 • 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
Capital Markets • Shipping Industry PwC
January 13, 2014 3
NYSE leads the world in listed market cap 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 14.000.000
2281 primary equity listings Utilities Telecommunication Services
12.000.000
Materials Information Technology
10.000.000
Industrials
8.000.000
Healthcare
2506
Financials
6.000.000 1556
1985
Energy
2570 1146
4.000.000
Consumer Staples Consumer Discretionary
2.000.000
3645
1792
The Toronto Stock Exchange
Australian Securities Exchange
891
591
0 NYSE
NASDAQ
Hong Kong London Stock Stock Exchange Exchange
Tokyo Stock Exchange
Euronext (Europe)
Shanghai Stock Exchange
Deutsche Boerse AG
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
Capital Markets • Shipping Industry PwC
January 13, 2014 4
NYSE dominates debt and M&A activity Number of Transactions 9000 8000 7000 6000 5000
M&A Transactions
4000 3000
Debt Transactions
2000
Equity Transactions
1000 0 NYSE
NASDAQ Hong Kong London Tokyo Stock Euronext The Toronto Australian Stock Stock Exchange (Europe) Stock Securities Exchange Exchange Exchange Exchange
Shanghai Deutsche Stock Boerse AG Exchange
Total Deal Value $2.000.000 $1.500.000 $1.000.000
M&A Transactions
$500.000
Debt Transactions Equity Transactions
$NYSE
NASDAQ Hong Kong London Tokyo Euronext Stock Stock Stock (Europe) Exchange Exchange Exchange
The Australian Shanghai Deutsche Toronto Securities Stock Boerse AG Stock Exchange Exchange Exchange
USD Millions Source: Capital IQ
Capital Markets • Shipping Industry PwC
January 13, 2014 5
US leads the world in IPO’s, Shanghai declines Number of IPOs 140 120 100 80
2012
60
2013
40 20 0 NYSE
NASDAQ
Hong Kong London Stock Tokyo Stock Stock Exchange Exchange Exchange
Euronext (Europe)
The Toronto Stock Exchange
Australian Securities Exchange
Shanghai Stock Exchange
Deutsche Boerse AG
Proceeds raised from IPOs $45.000 $40.000 $35.000 $30.000 $25.000 $20.000 $15.000 $10.000 $5.000 $-
2012 2013
NYSE
NASDAQ
Hong Kong Stock Exchange
London Stock Tokyo Stock Exchange Exchange
Euronext (Europe)
The Toronto Stock Exchange
Australian Securities Exchange
Shanghai Stock Exchange
Deutsche Boerse AG
USD Millions Source: Capital IQ
Capital Markets • Shipping Industry PwC
January 13, 2014 6
PwC IPO watch – The US market has recently averaged 43 IPOs and $10.9 billion of proceeds per quarter Volume of IPOs by quarter
2010 - 168 IPOs
100
2011 - 134 IPOs
2013 - 238 IPOs 78
80
64
63 52
60 41 40
2012 - 146 IPOs
29
34
45
33 21
33
28
38
30
63
34
20 0 2010 Q1 2010 Q2 2010 Q3 2010 Q4 2011 Q1 2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 Offering value of IPOs by quarter ($ bn) $30,0 $24,8
$24.1
$25,0
$22,2
$20,0 $15,0
$13,2
$13,0 $12,8
$10,0 $5,0
$4,2
$6,7
$6,5
$5,2 $4,8
$3,2
$8,2
$7,8
$11,8
$5,8
$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 Note: Does not include IPOs listed on foreign exchanges, closed-end funds or trusts Source: SEC filings
Capital Markets • Shipping Industry PwC
January 13, 2014 7
IPO’s raised $56.9 billion in 2013 and $42.9 billion in 2012 Consumer $3,2 7,5%
REIT $1,5 3,4%
Financial $7,1 16,6%
Consumer $10.3 18.1%
Technology $9.1 16.1%
Industrial $3,7 8,7%
Energy $5,8 13,5%
REIT $5.6 9.8%
2012
Services $0,8 1,8% Healthcare $0,8 1,9%
Technology $20,0 46,6%
2013
Energy $10.9 19.3%
Industrial $6.6 11.5%
Healthcare $8.7 15.2%
Financial $5.7 10%
USD Millions Source: Capital IQ
Capital Markets • Shipping Industry PwC
January 13, 2014 8
US Market volatility measure remains low -
• 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.
50
100
150
200
250
300
350
0-15 15-20 20-25 25-30 30-35
•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.
35 up # of IPOs and VIX
Monthly Number of US IPOs and VIX 40
50
35
45 40 35
25
30
20
25
15
20 15
10
10
5
5
-
0 Jan-11 Mar-11 May-11 Jul-11
Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12
USD Millions Source: Capital IQ and SEC filings
Capital Markets • Shipping Industry PwC
IPOs
Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13
Sep-13 Nov-13
VIX
January 13, 2014 9
VIX
# of IPOs
30
Recent shipping IPO’s are trading well below issue price 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
USD Millions Source: Capital IQ
Capital Markets • Shipping Industry PwC
January 13, 2014 10
US, Scandinavia and Tokyo have the most shipping company listings By Number of Listed Shipping Companies Number of Shipping Companies Listed NYSE
27
Total Market Cap of Shipping Companies (USD Millions)
By Total Market Cap of Shipping Companies
$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
Source: Capital IQ
Capital Markets • Shipping Industry PwC
January 13, 2014 11
US, Hong Kong and Shanghai markets show higher valuations 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
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
Capital Markets • Shipping Industry PwC
January 13, 2014 12
Let’s all domicile in the Marshall Islands!!
Tax Domicile
Shipping Companies Incorporated
Total Market Cap of Shipping Companies (USD Million)
Headquarters
Exchange
Greece (20), US (4), Bermuda (4), NYSE (18), NASDAQ (13), UK (2), Canada (1), Monaco (1), OTC, Pink Sheets (2), Hong Kong (1), Ireland (1), London (1) Marshall Islands (1) Hong Kong (4), Oslo Bors Hong Kong (6), Bermuda (5), (3), Singapore (1), NYSE Greece (1), UK(1), Monaco (1) (4) and NASDAQ(2)
Marshall Islands
34
$24,601
Bermuda
14
$13,229
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
Capital Markets • Shipping Industry PwC
January 13, 2014 13
Thank you.
This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
Copyright © 2014 PricewaterhouseCoopers SA. All rights reserved.
PwC refers to the Greece member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.