AGM 2020 PRESENTATION
CEO HUGO DE STOOP - MAY 2020
AGM 2020 PRESENTATION CEO HUGO DE STOOP - MAY 2020 FORWARD LOOKING - - PowerPoint PPT Presentation
AGM 2020 PRESENTATION CEO HUGO DE STOOP - MAY 2020 FORWARD LOOKING STATEMENTS Matters discussed in this presentation may constitute forward-looking statements under U.S. federal securities laws, including the Private Securities Litigation Reform
CEO HUGO DE STOOP - MAY 2020
Matters discussed in this presentation may constitute forward-looking statements under U.S. federal securities laws, including the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect the Company’s current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. All statements,
believes or anticipates will or may occur in the future, including, without limitation, the delivery of vessels, the outlook for tanker shipping rates, general industry conditions future operating results of the Company’s vessels, capital expenditures, expansion and growth opportunities, bank borrowings, financing activities and other such matters, are forward-looking statements. Although the Company believes that its expectations stated in this presentation are based on reasonable assumptions, actual results may differ from those projected in the forward-looking statements. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their
charter hire rates and vessel values, changes in demand for tankers, changes in our vessel operating expenses, including dry- docking, crewing and insurance costs, or actions taken by regulatory authorities, ability of customers of our pools to perform their
conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists. We undertake no
information, future events or otherwise, except as required by law. In light of the risks, uncertainties and assumptions, the forward looking events discussed in this presentation might not occur, and our actual results could differ materially from those anticipated in these forward-looking statements.
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Euronav offices Partnerships
Headquarters in Antwerp
unemployment
need to stay on board or get on board
people
sourced and donated to hospitals and care centers
The world’s largest, independent quoted crude tanker platform
International company – internationally connected
4 Euronav offices Partnerships
2 FSO* 2 ULCC
Headquarters in Antwerp
Mix of time charter and spot exposure for the rest of 2020
* Includes JV
46 VLCC incl. 4 N/B
Av Age 7.3 Yrs Av Age 11.1 Yrs
26 Suezmax*
45% 29% 24% 2%
0-5 yrs 6-10 yrs 11-14 yrs 15+ yrs
16% 15% 46% 23%
0-5 yrs 6-10 yrs 11-14 yrs 15+ yrs
19% 81% Fixed days Spot days
Shareholder returns since 2014
Source: Bloomberg
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Source: Euronav
Repayment schedule and RCF reductions
100 200 300 400 500 600
Millions
Bond Maturity Balloon to be refinanced Repayments Reductions
Leverage:
payments for 2h 2019 & Q1 2020
347 187
119 226
270 123 45 23 77 172
7 3 32
45 145 245 345 445
$m net Income, Dividend & Buy back Net Income Dividend Share Buy Back
$1.035bn dividend paid since 2004 $17.76 p/s USD 3.77 DPS since 2015
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+$270m 4x VLCC DELIVERY Q4 20 Q1 21
BASE $108 $324 $540 $1,188 +$5,000 per day +$15,000 per day +$25,000 per day +$55,000 per day
VLCC TCE rates
$25,000 $30,000 $40,000 $50,000 $80,000
Suezmax TCE rates
$20,000 $25,000 $35,000 $45,000 $75,000
Each $5,000 uplift in both VLCC and Suezmax rates improves net revenue and EBITDA by $108mm FSO contract until 2022 Long term TC contract to 2024 Commercial TC relationships
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In USD million
Q1 Q2 Q3 Q4
2019
EBITDA 130.0 71.0 96.8 266.8 564.6 Net Income 19.5
160.8 118.9 EPS c per share 8.8
73.0 53.9
SHAREHOLDER RETURNS & MOVE TO QUARTERLY DIVIDENDS
35c per share dividend & $35m in buy back
ACTIVE FLEET MANAGEMENT
3x VLCC sale & leaseback, 1x VLCC sold, 1x Suezmax sold, 2x Suezmax bought in JV
BALANCE SHEET STRENGTHENED
Bond upsized to $200m with $1.1bn of cash or revolving credit facilities available
SUCCESSFUL IMPLEMENTATION OF IMO 2020
No Scrubbers – Fuel quality – Shipping emitting 85% less sulphur in the atmosphere
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6 7 8 9 10 11 12 13 EURN US EURN BB
Share buy backs $35m in total Share buy backs
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5 10 15 20 25 30 35 40 45 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q12020
USD value traded per day on NYSE and Euronext in Euronav
NYSE USD value traded Euronext USD value traded
Source: Bloomberg
85 90 95 100 105 110
Euronav bond price USD
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Bonds repurchased by Company Bond size upsized by USD 50m to USD 200m
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FOR OUR SOCIETY To deliver an essential source of energy in ways that are economically, socially and environmentally viable now and in the future.
FOR OUR CLIENTS To operate in a manner that contributes to the success of their business objectives by providing flexible, global high-quality and reliable services.
FOR OUR SHAREHOLDERS AND CAPITAL PROVIDERS To create significant long-term value by strategically planning financial and investment decisions while efficiently, consistently and transparently act as good stewards of capital.
FOR OUR SHAREHOLDERS AND CAPITAL PROVIDERS To attract, inspire and enable talented, hard-working people to develop themselves in order to contribute to our business and its vision in a challenging and rewarding environment.
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Social Environmental Governance
Carbon emissions cut 10% in 2019 with 2019 sector leading disclosure >40% Female representation
In GEI 3 years running & only transport co Top quartile rank since 2016 in key surveys
15 5 10 15 20 25 30 35 2014 2015 2016 2017 2018
Bloomberg ESG Disclosure Score Euronav Tanker Co A Tanker Co B
Source: Bloomberg, Euronav
Demand for Oil Supply
Vessel Supply Ton miles IMO 2020
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2020 temp impact Switch to AG Low orderbook Many ships >15 years Flexible Storage & over supply No Change Negative
ST Coronavirus
ST Positive
Change from Q4
Positive
Storage has further capacity for substantial impact
EIA estimate onshore storage capacity
Source: Bloomberg. IEA, EIA, Broker reports
70 75 80 85 90 95 100 105 200 400 600 800 1000 1200 1400 1600 1800
IEA oil demand & production m bbls Cumulative inventory build m bbls Cumulative inventory build IEA Oil Production IEA Oil Demand 17
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Source: HIS Markit, EIA, Livemnint, Reuters, various
Likely already approaching full onshore capacity given recent moves to tankers
0% 2% 4% 6% 8% 10% 12% 14% 16% 50 100 150 200 250
No of Vessels
Dedicated Infrastructure Storage Iranian VLCC Market Storage Suezmax % of VLCC fleet
…and now up to 73 Suezmax now in market storage x2 record high
Storage has ONLY just begun with:
Source: Bloomberg, Clarksons, Fearnley
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motivated by profit
contango price structure involuntary or forced storage due to Covid-19 Restrictions, congestion, supply chain issues part of logistical chain in crude oil supply
Short term
Storage demand is compensating more than decrease of trading demand – rates to remain underpinned
6m Contango Implied TC rate $3 25,000 $4 37,000 $5 46,000 $6 57,000 $8 80,000 $10 100,000
Mid term
Storage phase Storage Draw Global Fleet Re-sizing
Freight rate pressure Fleet oversupplied because of Returning vessels from storage and weaker demand for transportation Global Fleet RE-SIZING could be substantial 2 Scenarios
Contango persist and demand for storage ships persist
Backwardation means gradual storage draw
Long term
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RISING BARRIERS ORDER BOOK CURRENTLY 23 YR LOW NEWBUILDING CONTRACTS
FINANCING BANKS & CAPITAL MARKETS REGULATION IMO 2030, BASEL IV TECHNOLOGY IN FUEL PROPULSION LONG TERM CRUDE DEMAND
Source: Clarksons, Bloomberg, Euronav
10 20 30 40 50 60
Orderbook as % of fleet
VLCC Orderbook % Fleet Suezmax Orderbook % Fleet
Source Euronav
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Older tonnage comes under increasing pressure Owners dilemma
Increased opex from IMO2020 Volatile steel scrap price Ballast water capex $1.5m from Sept 19 Lower cash earnings for
Older vessels = heavy consumers
11.5 9 10 6.5 4 11 6.5 9 16 10.5 14 6.5 11 9 11 9.5 6.5 8 8.5 8 3.5 5 3 0.5 3.5 3 4.5 2.5 0.5 4.5 3.5 3 5 10 15 20 25 30 35 40 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21
No of VLCC equivalents
SS 15 yr SS 17.5 yr SS 20 yr SS 22.5 yr SS 25 yr
EACH QUARTER TO END 2021 - 27 VLCC EQUIVALENTS MUST UNDERTAKE A SPECIAL SURVEY
FLEET AGE RISING – 26% VLCC FLEET >15 YEARS (@ 1 JANUARY 21)
Source: Clarksons
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