EARNINGS CALL Q4 2019
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 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, other than statements of historical facts, that address activities, events or developments that the Company expects, projects, 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 obligations to us, the strength of the world economies and currencies, general market conditions, including changes in tanker vessel 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 obligations under charter contracts on a timely basis, potential liability from future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists. We undertake no obligation to publicly update or revise any forward looking statement contained in this presentation, whether as a result of new 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. 2
CONTENT 1. Q4 2019 HIGHLIGHTS 2. FINANCIAL REVIEW 3. CURRENT THEMES 4. OUTLOOK 5. Q&A 3
HIGHLIGHTS Q4 2019 VLCC 70000 60000 • Strong tanker dynamics - highest quarterly rate performance in five years Q4 50000 • Crude tanker market fundamentals constructive for 2020 19 • Adoption of quarterly dividends under new Belgian company code to start 40000 Q1 2020 USD/day • Returns to shareholder guidance to target 80% including fixed annual Q4 30000 18 dividend USD 12 cents P&L • Final dividend proposal for 2019 of USD 0.35 per share 20000 B/E 10000 • Outlook – Q1 2020 so far VLCC 60% fixed at around 89,200 per day Q1 2020 so far Suezmax 51% fixed at around 57,500 per day 0 Suezmax In USD per day Fourth 45000 Full year 2019 quarter 2019 VLCC 40000 Average spot rate (in TI pool)* Q4 35000 61,700 35,900 19 30000 Average time charter rate** 35,700 32,400 25000 USD/day SUEZMAX 20000 P&L Average spot rate*** 26,000 41,800 Q4 B/E 15000 Average time charter rate 18 29,300 29,400 10000 5000 *Euronav owned ships in TI Pool (excluding technical offhire days) **Including profit share where applicable 0 ***Including profit share where applicable (excluding technical offhire days) 4
FINANCIAL HIGHLIGHTS – INCOME Fourth Quarter Fourth Quarter (in thousands of USD) 2019 2018 Full Year 2019 Full Year 2018 Revenue 355,154 236,107 932,377 600,024 Other operating income 5,515 1,237 10,094 4,775 Voyage expenses and commissions (34,881) (44,492) (144,682) (141,416) Vessel operating expenses (53,471) (53,812) (211,795) (185,792) Charter hire expenses (604) (7,844) (604) (31,114) General and administrative expenses (18,796) (15,977) (70,144) (66,232) Net gain (loss) on disposal of tangible assets 9,354 (237) 24,141 18,865 Net gain (loss) on disposal of investments in equity - (2,995) - (2,995) accounted investees Depreciation (84,403) (78,483) (337,547) (270,693) Net finance expenses (21,060) (23,828) (99,384) (74,389) Bargain purchase - (13,202) - 23,059 Share of profit (loss) of equity accounted investees 4,200 3,783 16,020 16,076 Result before taxation 161,008 257 118,476 (109,832) Tax benefit (expense) (207) 22 392 (238) Profit (loss) for the period 160,801 279 118,868 (110,070) Information per share (in USD per share): Weighted average number of shares (basic) * 215,078,497 218,999,367 216,029,171 191,994,398 Result after taxation 0.75 0.00 0.55 (0.57) * The number of shares issued on 31 December 2019 is 220,024,713. 5
FINANCIAL HIGHLIGHTS – BALANCE SHEET 2019 2018 HIGHLIGHTS dec/19 dec/18 (in $ million) 1 Leverage Cash 297.0 173.0 Restricted cash 0.0 0.1 44% book value Other current assets 503.4 348.0 Long term assets: Newbuildings 0.0 0.0 Vessels 3,077.0 3,520.1 2 Fleet Development Other long term assets 262.8 86.2 • No outstanding Total assets 4,140.1 4,127.4 capex for Euronav • 16 dry-docks Current liabilities 324.3 287.1 foreseen in 2020 Long term debt 1,484.3 1,569.6 (of which 6 require Other long term liabilities 13.1 10.1 BWTS) Equity 2,318.5 2,260.5 Total liabilities and stockholders' equity 4,140.1 4,127.4 6
FUEL SPREADS REDUCING MATERIALLY & EURONAV WITH BUILT IN PROTECTION LSFO Singapore retail HSFO Singapore retail 800 650 LSFO per tonne Singapore HSFO per tonne Singagore 750 600 700 550 500 650 retail $ retail $ 450 600 400 550 350 500 300 450 250 400 200 Jul 19 Aug 19 Sep 19 Oct 19 Nov 19 Dec 19 Jan 20 Jul 19 Aug 19 Sep 19 Oct 19 Nov 19 Dec 19 Jan 20 Development of LSFO-HSFO spread LSFO-HSFO futures 245 400 LSFO-HSFO spread Singapore Spread $ per tonne LSFO - HSFO 350 Singapore HSFO-LSFO 225 spread LSFO-HSFO spread Rotterdam 300 $ per tonne spread 205 250 185 200 150 165 100 145 50 0 125 Feb 20May 20Aug 20 Nov 20 Feb 21May 21Aug 21 Nov 21 Jul 19 Aug 19 Sep 19 Oct 19 Nov 19 Dec 19 Jan 20 7
CHINESE POLICY MOVE COULD CHANGE FUEL OIL DYNAMIC What was the position China had a levy of $175 p/tonne consumption tax of China on LSFO AND 13% VAT on fuel oil production production ? China lifted these restrictions early in January What has changed? However, fuel oil only for use by Chinese shipping China has developed large scale desulphurization capacity with 0.8m bpd existing today Potential for further 0.3m bpd in 2021 Source: Deutsche Bank 8
VLCC SUPPLY IN 2020 TO REMAIN CONSTRAINED COSCO ships -26 LT storage -20 IMO storage -20 VLCC retrofits -16 Iranian VLCC -38 9
SHARE LIQUIDITY RISING EURONAV CLEAR LEADER IN CRUDE TANKER SECTOR 60 $m value traded per day in stock across all exchanges 50 40 30 20 10 0 12 months $ value traded per day 3 months $ value traded per day 1 month $ value traded per day 10
OUTLOOK STRONG START TO Q1 - CYCLE THESIS INTACT Euronav Demand for Supply Ton miles & Vessel Balance Oil Supply IMO 2020 of Oil sheet Robust US v Saudi Positive Flexibility IMO to help from Q3 Change No change No change No change No Change No Change 11
APPENDIX – FROM SEPTEMBER 5 2020 EURONAV IMO WEBINAR IN IMO 2020 LSFO AVAILABILITY – IMPROVING Oil Majors LSFO (0.5% S) Bunker Ports • All majors announced plans for availability across world • For example Exxon patented their compliant fuel Refiners • Most major refiners producing 0.5% fuel already • Expectation in September 2019 was that refiners would accelerate plans into IMO adoption (1 January 2020) - this largely took place China wild card – Hydrogenation capacity Could see 0.9m bpd HSFO production in Port Authorities & Other 2020 • Processes will professionalise the bunker Source: Cockett Marine industry = good for all • Specific projects bringing compliant fuel to ports 12
Q&A 13
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