INVESTOR PRESENTATION APRIL 2011 1
AGENDA 1. Key facts 2. Business Model 3. Tanker Market Demand Supply 4. OFFSHORE SERVICES MARKET 5. Q&A 2
1. KEY FACTS 3
HISTORY • 1995: JV Established between CNN & CMB • 1997: Become full subsidiary of CMB • 2000: founder of TI VLCC Pool • July 2004: Acquisition of ULCC with OSG • December 2004: Demerger from CMB • December 2004: Listing on Euronext • March 2005: Acquisition of Metrostar VLCC • April 2005: Merger with Tanklog (15 Suez) 4
PUBLIC COMPANY… …WITH SOLID REFERENCE S/H EURONAV Stock Exchange: EURONEXT Ticker: EURN Bloomberg: EURN BB Reuters: EURN.BR SAVERYS – LIVANOS Free Float Families 36.36% 39.29% -- 20.97% 5
A FOCUSED FLEET Vessel Type Cargo intake / Euronav owned TC-IN World Fleet vessel (Weighted) FSO 3 m bls 2 x 50% n/a V-PLUS 3.2 m bls 1 0 2 VLCC 2 m bls 11 (2 CSR) 10 incl. JV 502 (weighted 5,55) 10+ (2 x 1/2 in J/V) Newbuilding 2 m bls 1 VLCC SUEZMAX 1 m bls 20 (16 ice-class) 0 363 + (2 x in J/V) Newbuilding 1 m bls 4 (CSR) 2+ (3 x ½ in JV) Suezmax Total = 43 Ships Mix of spot and + 5 Newbuildings Fixed contracts
2. BUSINESS MODEL 2. Strategy 7
A Balanced Strategy Year 2011 onhire days Year 2010 Onhire Days 1,636 days 13% 1,904 days 15% 6,209 days 50% 6,949 days 4,447 days 4,654 days 52% 37% 33% fixed fixed-ps spot fixed fixed-ps spot Break-even OPEX Company contract Backlog (on 31 Dec 2010) $ 34,700 $ 10,200 VLCC USD 635.9 million $ 24,500 $ 8,800 Suezmax 8
CLIENTS OF EURN: TOP TIER 9
VLCC SPOT MARKET VIA POOL • Increased access to information • Increased access to contracts (COA) • Increased access to private cargoes • Economies of scale • Greater flexibility (swap vessels) • Improved expertise through dedicated roles (demurrage,scheduling ,…) • Global operation • Reduce the effect of volatility • Bunkers (Fuel Oil) purchase • Develop dedicated IT systems • Arbitrage opportunities • Improved Charter Party terms 10
TANKERS INTERNATIONAL POOL Euronav Reederei “Nord” Klaus GC Tankers E. Oldendorff Athenian Sea Oak Maritime (HK) Carriers Inc., Ltd. Overseas Shipholding Group
OFFSHORE SERVICE MARKET
Business approach • Use our “older” assets for a second life cycle under LT contracts • Convert only after winning contracts • Provide equity in kind (Ships) • Apply conservative policy with respect to leverage • Apply conservative policy with respect to depreciation • Manage in house when we are capable and partner when needed • Outsourcing specialty skills (detailed engineering, mooring systems,…) 13
CONVERSION Type V-Plus Size: 442,893 dwt (FSO Asia) 441,655 dwt (FSO Africa) Owners: Joint venture between OSG and Euronav Storage capacity: 2,800,000 barrels per vessel Location: Al Shaheen Offshore Qatar (FSO Asia) Al Shaheen Offshore Qatar (FSO Africa) Lease period: 8 years until March 2017 (FSO Asia) 3 years until August 2013 (FSO Africa) 14
Conservative Capex NEWBUILDING CAPEX • 1 VLCC 2011: USD 187M – 3Q11 2012: USD 60M • 2 Suezmax 2013: USD 51M Total: USD 298M – 3Q12 – 3Q13 • 2 Suezmax in JV -> Financing fully secured until end 2012 – 2 in 2011 15
Strenghtening of Balance sheet … throughout the cycle In thousands of 31.12.2010 31.12.2009 31.12.2008 31.12.2007 31.12.2006 31.12.2005 USD ASSETS NON-CURRENT 2,337,131 2,500,550 2,278,551 2,091,158 2,165,302 2,003,205 ASSETS CURRENT 307,083 286,116 341,542 182,298 174,892 214,900 ASSETS TOTAL ASSETS 2,644,214 2,786,666 2,621,243 2,274,693 2,340,194 2,218,105 In thousands of 31.12.2010 31.12.2009 31.12.2008 31.12.2007 31.12.2006 31.12.2005 USD LIABILITIES EQUITY 1,078,508 1,071,629 1,178,326 984,492 1,022,483 906,319 NON-CURRENT 1,314,341 1,463,456 1,181,793 963,340 1,107,555 1,133,029 LIABILITIES CURRENT 251,365 251,581 261,124 326,861 210,156 178,757 LIABILITIES TOTAL 2,644,214 2,786,666 2,621,243 2,274,693 2,340,194 2,218,105 LIABILITIES 16
ACCESS TO CAPITAL MKTS • PUBLICLY QUOTED COMPANY ON EURONEXT • CONVERTIBLE BOND IN 2009 Maturity: 2015 USD 150M Coupon: 6.5% - Strike price: € 16.2838 17
...BUT PREF. FOR BANK DEBT • Main Facility: USD 1.6B Maturity: 2013 Revolver of up to USD 488M • FSO Financing: USD 500M Maturity: 2017 • JV Vessels (2 Suezmax) Maturity: 2020 - 2021 All fully financed (pre and post delivery) • 2009 Facility: USD 300M ... In the middle of the financial crisis Maturity: 2014 18
3. THE TANKER MARKET 19
WORLD FLEET VLCC EARNINGS World Fleet VLCC Earnings (TCE) $160,000 Platts/BITR TI VLCC Database $140,000 TI Actual $120,000 $100,000 TCE $80,000 $60,000 $40,000 $20,000 $0 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 20
VLCC AVERAGE EARNINGS 21
SUEZMAX AVERAGE EARNINGS 22
DEMAND Demand 23
WORLD OIL DEMAND World Oil Demand in million bpd (Source - IEA) 90 Source: IEA 85 80 mbpd 75 70 65 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10
WORLD OIL PRODUCTION World Oil Demand 87.0 2.0% 1.6% 86.5 -0.3% 86.0 85.5 1.1% mbpd -1.5% 85.0 84.5 1.7% 84.0 83.5 83.0 2005 2006 2007 2008 2009 2010 • Oil demand set to grow by 2%-3% between 2011 and 2015. • Oil demand fell 1.5% in 2009. • Demand increase mainly supported by Asia, Middle East and Latin America. 25
WORLD OIL PRODUCTION World Oil Production in million bpd (Source - IEA) 90 Source: IEA 85 80 mbpd 75 70 65 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 26
OPEC CAPACITY ON CALL Call on OPEC 2011 (IEA) 30.5 30.0 29.5 mbpd 29.0 28.5 28.0 Jun 10 Jul 10 Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Sep 10 Aug 10
CHINA OIL STATISTICS China Crude Production (IEA Feb 2011) China Oil Demand (IEA Feb 2011) 4.5 12.0 China 11.0 Forecast (Jun 10) 4.3 10.0 4.1 mbpd mbpd 9.0 3.9 8.0 China 3.7 7.0 12 Month Average Production Forecast (Jun 10) 3.5 6.0 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 China Vessel Demand (TUKA Mar 2011) China Refining Additions (IEA June 2010) 140 140 0.80 201 0 201 1 Crude Distillation 120 120 Additions and 0.70 Expansions 100 100 0.60 Vessels Vessels 80 80 0.50 mbpd 60 60 0.40 0.30 40 40 0.20 20 20 0.10 0 0 0.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2011 2012 2013 2014 2015
Large Tanker Supply 29
VLCC WORLD FLEET VLCC Fleet Development - Base Case Basis TUKA VLCC Database Fleet at DH SH NBs Total Exit SH to DH Growth Growth % year start 2006 467 304 163 18 2 0 16 3.4% 2007 483 322 161 29 22 4 7 1.4% 2008 490 354 136 42 38 3 4 0.8% 2009 494 396 98 53 33 3 20 4.0% 2010 514 450 64 60 43 3 17 3.3% 2011 531 512 19 65 20 1 45 8.5% 2012 576 572 4 76 6 0 70 12.2% 2013 646 642 4 50 6 0 44 6.8% 2014 690 686 4 20 6 0 14 2.0% 2015 704 700 4 9 9 0 0 0.0% 2016 704 703 1 1 6 0 -5 -0.7% 2011YTD 541 528 13 16 6 1 10 1.8% Rest of Year 49 14 0 35 6.5% Reference Date: 1 Apr 11 30
SUEZMAX WORLD FLEET Suezmax Fleet Development Souce: Clarksons Fleet at DH SH NBs Total Exit Growth Growth % year start 2006 321 253 68 26 3 23 7.2% 2007 344 279 65 25 12 13 3.8% 2008 357 304 53 14 12 2 0.6% 2009 359 317 42 46 15 31 8.6% 2010 390 361 29 40 18 22 5.6% 2011 412 399 13 56 12 44 10.7% 2012 456 455 1 61 0 61 13.4% 2013 517 516 1 36 0 36 7.0% 2014 553 552 1 3 1 2 0.4% 2015 555 555 0 0 0 0 0.0% 2016 555 555 0 0 0 0 0.0% Reference Date: 1 Apr 11 31
Large Tanker Supply TRIGGERS FOR TANKER MARKET 32
ORDERBOOK DLVY SCHEDULE Orderbook Delivery Schedule 100 Deferral Estimate Cancellation Estimate 80 Deliveries 60 40 Vessels 20 0 2010 2011 2012 2013 2014 -20 -40 • TUKA cancellation and deferrals estimate
Orderbook Delivery Schedule Orderbook Delivery Schedule 100 Additional NBs Orders Deferred 12 Months 80 Cancelled Orders Deliveries 60 40 Vessels 20 0 2010 2011 2012 2013 2014 -20 -40 • Additional orders for delivery in 2013-14
SLOW STEAMING • Super slow steaming reduce dramatically consumption of bunker costs • But add additional days into each voyage. 35
VLCC STORAGE 36
VLCC STORAGE VLCC Storage Seasonality 60 2008 2009 2010 2011 50 40 VLCCs 30 20 10 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 37
Piracy 38
North Africa – Unrest Middle-East • Libya: 1.3 Mbls/day out of production • Same capacity has to come from elsewhere • Middle-East or West Africa 39
Japan Earthquake • Japan is the 3 rd largest crude oil importer • 4.4 mbpd or 46% of Total Energy • Nuclear Energy was 11% of Total Energy -> additional Energy demand: * Short Term: Product + LNG * Mid Term: Additional Crude for 300 kbpd? 40
Scrapping 41
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