Yachting Industry Analysis - Rodriquez Consulting Ltd

The Super Yacht Industry 2011 Market data, trends and forecasts for the years to comeTrends, Consolidated data and Forecasts

1

IMPORTANT: Most of the values are not shown contact us

for a complete version

Wednesday, 17 July 13

ObjectivesThe main objective of this document is to supply readers with the strategic knowledge to operate and take crucial decisions in the Super Yacht industry

Highlighting Market drivers and industry drivers,

The target market HNWI (High Net Worth Individuals) and sub-clusters,

The geography of this global industry with its emerging markets and the established ones that preserve their economic relevance, and

The business generated by services to Yachts and specifically that of accessories supply plus public and private yacht marinas and port services.

2


Definitions

• Launches by Value = Yachts delivered (and launched) quantified by their economic value

• Order book = Orders to build new yachts collected by shipyards

• Investment of Passion = Allocation of financial resources to products or services typically considered passions or status-symbols.

• Market Drivers = Main element that influence the market

• Yacht Service = Services associated with ordinary and extraordinary maintenance (E.g.: launches, hauling, dry-docking, hull cleanings, zincs replacement)

• Yacht Accessories= All those accessories which are essential and non-essential to Yachting (E.g.: Gps, Radar, Bumpers, Sheets, etc..)

• HNWI= High Net Worth Individual

• CAGR= Compounded Annual Growth Rate

• Feet/Foot = Common Measuring unit (1 Mt= 3,28 Feet)

• Player = Company in the industry (E.g:. Benetti)

• YoY= Year over Year, percentage based on previous year

• Billionaire= Highest end of HNWIs having a net worth in excess of 1 billion USD

• Materials: Aluminum, Composite (can be Glass Fiber, GRP, Kevlar, Carbon, or mix of these), Steel

In order to better understand the content of this study we have included some of the main definitions which are fundamental to make good use of this knowledge.

3


Definitions and Notes

• Yacht Types = A yacht type refers mainly to the design style and and project type as for example open yachts (SEE Slide 8) do not have a flybridge and tend to be faster, therefore equipped with more powerful engines generating a higher fuel consumption and determining a different use of the yacht and type of client (single person with friends Vs Family used yacht in which case Flybridge yachts are preferred)

• Pre-Owned Yachts = Pre Owned are essentially second-hand yachts,

• De-stock Yachts = Instead are generally Yachts built for sepculative reason or for the simple need of a shipyard to not halt production waiting for orders to come but investing into the building process of a new yacht trying to sell the contract on the way shortening in so doing the delivery time by 30-40% or even 80% which has in many cases proved to be a very successful strategy for emerging economies clients or the so called new-rich willing to pay a premium to have the yacht delivered in a shorter-than-average time.

4


Notes on production cycle

• Please Note that as far as Super Yacht Order Books and deliveries/launches are concerned data shown in 2010 are considered to be actual as in most cases construction time goes from 12 to 40 months.

• For example a 130 feet Power Yacht ordered (signed) at the Monaco or Genova Yacht show in Sept-Oct 2010 is most likely considered to be launched in 2012.

IMPORTANT

5


Agenda

Super Yacht Market

Yachting Service Market

Market of Yachting Supplies/Accessories

6


AgendaSuper Yacht Market

✓ Segmentation

Order Book

Market Overview

Market Driver

Forecasts

Yacht Service Market

Accessories/Supplies Market

7


Segmentation of Super Yacht Market

8

Super YachtMarket

Propulsion

SizeSegments

Types*

Power

Sail

80’-89’

90’-99’

100’-119’

120’-149’

150’+

Flybridge

Open

Fisherman

Others


Agenda

9

Super Yacht Market

Segmentation

✓ Order Book

Market

Market Drivers

Forecasts

Yachting Service Mkt.

Accessories/Supplies Market


Super Yacht Order Book Evolution

10

0

250

500

750

1,000

1,250

2005 2006 2007 2008 2009 2010

Super Yacht Order Book by Volume

CAGR05-10

CAGR 09-10

+3% -26%

In 2010 the Super Yacht order book is worth 750 units showing a 26% decrease on the previous year. The main reason is identified in the combined effect of previous order

cancellation and lack of new orders.

Source: Created by Rodriquez Consulting with OMN Università Roma Torvergata




Super Yacht Order Book EvolutionMacro Type Segmentation: Power Vs Sail

11

0

250

500

750

1000

1250

2005 2006 2007 2008 2009 2010

Motor Sail

The power category is about 90% of the Super Yacht order book, in 2010 decreased by 30% alone.

Source: Processed by Rodriquez Consulting, OMN Universita’ Roma Torvergata/Show Boat

CAGR05-10

CAGR 09-10

+3% -26%+5% +9%+3% -29%

Super Yacht Order Book by volume Power Vs Sail




Super Yacht Order Book Evolution:Power Yacht Size Segments

Super Yacht Order Book break down in size segments

CAGR05-10

CAGR 09-10

+3% -29%

+12% -14%

+7% -19%

+1% -23%

+1% -40%

-5% -46%

Within power yacht it the segment over 120 feet is much more resilient to the financial crisis than other size segments.

0

200

400

600

800

1000

2005 20062007

20082009

2010

80’-’8990’-’99100’-119’120’-149’150’+

Source: Eleborated by Rodriquez Consulting with OMN Universita’ Roma Torvergata/Show Boat 12




13

0

250

500

750

1000

2005 2006 20072008

20092010Flybridge Open

Fisherman Others

Super Yacht order book segmented by type/style of vessel

CAGR05-10

CAGR 09-10

+3% -29%

+9% -25%

+11% -10%

-5% -31%

+3% -29%

The Flybridge segment is about 80% of the order book while so-called “open” yachts (generally faster yachts) are increasingly less in demand.

Source:: Elaborated by Rodriquez Consulting with OMN Universita’ Roma Torvergata/Show Boat

Super Yacht Order Book Evolution:Type of Yacht Segments




14

0

200

400

600

800

1,000

2005 2006 2007 2008 2009 2010 Composite Steel Aluminium

Order book by Construction Material

CAGR05-10

CAGR 09-10

+3% -29%

+5% -11%

+19% +17%

-3% -44%

The Segment of steel yachts grows by 17% in 09-10 whereas the Composite materials decrease by 44% and Aluminim by 11%

Source: Elaborated by Rodriquez Consulting with OMN Universita’ Roma Torvergata/Show Boat

Super Yacht Order Book Evolution:Materials used Yacht Segments




15

Order Book Sail Super Yachts in Sales Volume

CAGR05-10

CAGR 09-10

+5% +9%+17% +10%+5% -6%+1% +29%+6% +18%-4% -4%

The Sail Yachts segment grows by 9% compared to 2009 with 76 orders in total registered in 2010

0

20

40

60

80

2005 2006 20072008

20092010

80’-’8990’-’99100’-119’120’-149’150’+


Super Yacht Order Book Evolution:Sail Yachts by size Segments




16

0

20

40

60

80

2005 2006 2007 2008 2009 2010 Composite Steel Alluminium

CAGR05-10

CAGR 09-10

+5% +9%

-4% 0%

-7% -38%

+8% +18%

Composite material is the main technology used for the Sail Super Yachts with 60 Yachts over 75 total units ordered.


Order Book Sail Super Yachts in Sales Volume

Super Yacht Order Book Evolution:Sail Yachts by Construction Material




Agenda

17

Super Yacht Market

Segmentation

Order Book

✓ Market

Market Drivers

Forecasts

Yachting Service Market

Supplies and Accessories Market


Market Evolution by Delivery Volume

18

0

200

400

600

800

2005 2006 2007 2008 20092010

Deliveries/Launches of Super Yachts by volume

CAGR05-10

CAGR 09-10

+1% -31%

In 2010-2011 the market as recorded a solid 30% decrease mainly due to the effect of the financial crisis

Source: Elaborated by Rodriquez Consulting with OMN Universita’ Roma Torvergata




Super Yacht Market EvolutionMacro segments: Power Vs Sail

19

0

200

400

600

800

2005 2006 2007 2008 2009 2010

PowerSail

Total deliveries in 2010 are 472 units out of which 425 power super yachts: this macro segment shows a decrease of 34% vs 2009 as a whole the market shows a flat trend with a Compounded Annual Growth Rate (CAGR) ’05 - ’10 of 1%

Source: Elaborated by Rodriquez Consulting. with OMN Universita’ Roma Torvergata

CAGR05-10

CAGR 09-10

+1% -31%+4% +9%+1% -34%

Deliveries/Launches of Super Yachts: Power vs Sail




Market evolution of Power Super yachts:Size Segmentation

20

Deliveries/Launches Super Yachts a volume

CAGR05-10

CAGR 09-10

+1% -34%

+12% -14%

+6% -20%

+1% -24%

+1% -40%

-5% -46%

The financial crisis had it highest impact on the <30 mt (<99 ft) decreasing by 40% at the global level.

0

160

320

480

640

800

2005 2006 2007 2008 2009 2010

80’-’8990’-’99100’-119’120’-149’150’+

Source: Elaborated by Rodriquez Consulting su dati OMN Universita’ Roma Torvergata




Market Evolution Power Super Yachts: Segmeted by type of yachts

2111

0

175

350

525

700

2005 2006 2007 2008 2009 2010

FlybridgeOpenFishermanOther Types Launches of Super Yachts by Volume

CAGR05-10

CAGR 09-10

+1% -34%

+7% -31%

+9% -17%

-7% -36%

+1% -35%

In terms of types the Flybridge type of yachts are those taking the biggest hit from the financial crisis

Source: Elaborated by Rodriquez Consulting and OMN Universita’ Roma Torvergata

IMPORTANT: Most of the values are not shown contact us for a

complete version


22

Deliveries of Sails Super Yachts by volume

CAGR05-10

CAGR 09-10

+4% +9%+18% +13%+6% 0%0% +14%

+7% +22%-3% 0%

Sail Super Yachts demonstrated to by much more resilient to the crisis althought the make 10% of the overall market.

0

10

20

30

40

50

2005 2006 20072008

20092010

80’-’8990’-’99100’-119’120’-149’150’+


Market Evolution Sail Super Yachts: Segmented by size


complete version


Super Yacht Market Evolution:Macro geographical areas segmentation

23

Super Yacht launches by volume

CAGR05-10

CAGR 09-10

+1% -31%

-6% -20%

+2% -35%

+3% -31%

The global market downturn is substatially driven the North American (-35%) and European market size drecrease (-31%)

0

200

400

600

800

2005 2006 20072008

20092010 Europa

Nord AmericaRoW



complete version


Evolution new launches vs. de-stock and pre-owned market

24

Breakdown Super Yacht volume supply

In 2010, solid increase of the impact of pre-owned/de-stock on the total demand of super yachts due to the effect of the financial and economic crisis.

0%

25%

50%

75%

100%

2005

2008

2010

New LaunchesUsato/De-stock

Source: Rodriquez Consulting

IMPORTANT: Most of the values are not shown contact

us for a complete version


Market Evolution Value of Super Yachts

25

0

2

4

6

2005 2006 20072008

20092010

Deliveries of Super Yacht by total value in billion Euros

CAGR05-10

CAGR 09-10

-1% -24%

In 2010 and pre season 2011 the value of deliveries has recorded a loss of 24%; which shows almost a flat trend from 2005 of about 4 €/billion in total value worldwide.

Source: Elaborated by Rodriquez Consulting with OMN Università Roma Torvergata




Market Evolution:Economic value of Super Yachts

26

CAGR05-10

CAGR 09-10

-1% -24%

-2% +10%

0% -31%

-1% -28%

In 2010 Emerging Counties are the only market area that shows some growth as compared to Europe and North America which are significantly down.

0

2

4

6

2005 20062007

20082009

2010 EuropaNord AmericaRow

Deliveries of Super Yacht by value in billion Euros



complete version


Agenda

27

Super Yacht Market

Segmentation

Order Book

Market

✓ Market Drivers

Forecasts

Yacht Service Market

Supplies and Accessories Market


28

The HNWI family is the target market of Super Yacht builders. Segmented as shown above and this clusters relates to specific sizes and often move up or down depending on wealth gain or loss

Source: Elaborated Rodriquez Consulting, extract Nautica Super Yacht (Sept. 2011)

Super Yachts Market Driver :Identified and Clustered

Customer Targeting

YachtingSegments

Reference Price

Luxury Yacht Value Mkt 2010-11

Giga Yachts>150 feet

Super Yacht80-150 feet

Yachts40-80 feet

>35/40M€

5M€ - 30/35M€

< 3/4M€

~15%

~20%

~65%

HNWI Family


29

In 2010-11 HNWIs are 10,9 milion people, growing despite the economic crisis by 9% as compared to the previous years

Trend: Number of HNWI by macro geographical areas

0

2

4

6

8

10

12

2005 2006 20072008

20092010

North AmericaEuropeAsia-PacificLatin AmericaMiddle EastAfrica

N. High Net Worth Individuals

Year over Year xx%8,5%

xx%8,5%

xx%8,5%

xxx%8,5%

xx%8,5%

Values In Millions

Source: Elaborated by Rodriquez Consulting extract Nautica Super Yacht (Sept 2011)

tot xxx tot xxx tot xxxxtot xxxx

tot xxxx tot xxxIMPORTANT: Most of the values are not shown

contact us for a complete version


Our Services

30

•Market Analysis and Strategic Market Research & Development

•Niche Market Analysis (e.g. Yacht Paints)

•Business Planning

•Sales Process Training, sales network building & management and Sales performance management

•Business Process and Cost Analysis [Organization Consulting]


Our Services

31

•Joint Venture and cooperation development

•Branding & Luxury Brand Digital Management [Building intangible assets]

•Financial Analysis

•M&A Support and Valuation

•International Marketing Planning

•Revenue Management


Contacts

32

Contact us to receive a complete table of content of our most recent Yacht Market Analysis with forecasts to 2015

[email protected]

Call: +44 (0) 7445 30 86 22


mailto:[email protected]

mailto:[email protected]