INVESTOR PRESENTATION BRUSSELS MARCH 2019 EURONAV WHO WE ARE The - - PowerPoint PPT Presentation

INVESTOR PRESENTATION

BRUSSELS MARCH 2019

EURONAV – WHO WE ARE

The world’s largest, independent quoted crude tanker platform

TOTAL 72 VESSELS

43 VLCC 25 SUEZMAX

2

Fleet summary

47% 35% 19%

0-5 6-10 11-14

15% 35% 35% 15%

0-5 6-10 11-14 15+

Av Age 6.1 Yrs Av Age 9.7 Yrs

Fixed 12% Spot 88%

2 FSO 2 ULCC

EURONAV – WHO WE ARE

3

Actively managed high quality fleet…

EURONAV STRATEGY – LIQUIDITY FOCUS

Strong balance sheet hedge against cyclicality Balance sheet liquidity end Dec 2018 $674m

• Tanker business is cyclical, towards which the only cure

is to have a strong balance sheet and liquidity pool

• Policy to retain at least two years of operational

liquidity at all times and maintain strong banking relationships

1 2 3 4 5 6 7 8 9 10 200 400 600 800 1000 1200 1400 1600 1800 2000 Euronav DHT Frontline INSW Daily Value traded $m per day last 12 months Free Float $ Market Cap (000)

Liquidity in the Euronav share

Source: Bloomberg

+ no

• utstanding

capex

175 674 439 60

100 200 300 400 500 600 700 800 Cash Undrawn Secured Revolver Undrawn Unecured Credit Line FSO Financing Total

$m

TANKER MARKET STRUCTURE

5

Seasonal Cyclical Few customers, lots of suppliers

Oil Companies Traders

Ship Broker

Refiners

• wner
• wner
• wner
• wner

Pool

• wner

Source: Clarksons

28,000 33,000 38,000 43,000 48,000 53,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000

Monthly average VLCC rate 1990-2018 Monthly average 1 Year TCE rate 1990-2018

Source: Clarksons

Cash breakeven P&L breakeven

Source: Euronav

OPERATIONALLY GEARED

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 $112mm

BASE $112 $336 $560 $1,232 +$5,000 per day +$15,000 per day +$25,000 per day +$55,000 per day

FSO 5 year contract to 2022 Long term TC 7 year contract to 2024 Commercial TC relationships

+

6

OPERATIONAL LEVERAGE IN PRACTICE 2019 EPS $1.32 IN 2015 = $16 SHARE PRICE

7

2019 VLCC 40k Suez 30k = $1.25 EPS Euronav Share price $16 $8 EPS Euronav $1.00 $1.20 $1.40 ($0.20) $0.00

..If Euronav did VLCC $40k per day $30k Suez per day = $1.32 EPS…same as in 2015

Source: Bloomberg

STRONG PRO FORMA FINANCIALS

Leverage

• Credit margins between 1.225% and 2.25% (Bond

7.5%)

• Most of the secured bank debt is revolving
• Strong relationships with the leading international

shipping banks

• No material debt maturities until 2020
• Revolving credit facilities reduce by $138m/year
• Cash debt amortizations on term loans: $55m/year

Highlights Repayment schedule and RCF reductions Strong & supporting banking relations

8

100 200 300 400 500 600 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Millions

Reductions (non-cash) Repayments Balloon to be refinanced Undrawn balloon to be refinanced Bond Maturity

Source: Euronav

INDUSTRY AND MARKET OVERVIEW

OUTLOOK FOR 2019

GAME OF TWO HALVES 1H HEADWINDS, 2H TAILWINDS

Demand for Oil Supply

• f Oil

Vessel Supply IMO 2020 Ton Miles Euronav Balance sheet

10

Robust Positive Peak in 19 Flexibility US vs Saudi Growing

DEMAND FOR OIL – ROBUST AND STEADY

Y/Y Change in global demand for oil – consistently growing

Average 1.1 million barrels per day

Source IEA

11

Annual demand growth VLCC Equivalents (mbpd)

1.6 49 1.5 46

1.4 43

1.3 40 1.2 37 1.1 33 1 30 0.9 27 0.8 24 0.7 21

0.3 1.0 0.5 0.3 1.0 1.5 1.9 2.0 0.3 1.7 0.8 0.7 0.7 1.5 3.1 1.4 1.0 1.6

• 0.7
• 0.9

3.1 0.8 1.1 1.3 0.7 1.8 1.6 1.6 1.3 1.4 1.2

• 1.5
• 1.0
• 0.5

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 IEA m bpd global oil demand

2019 IEA

OIL PRICE IMPACT ON DEMAND – LOWER PRICE IS POSITIVE

Oil price outlook driven by Sheik v Shale/Trump tweets

Demand Destructive Demand Stimulating Demand Disruptive Neutral

12

Price is too high/demand is impacted Price is too low/long-term supply impacted/CAPEX cuts in E&P

Source: Bloomberg

< 1.1m bpd = 1.1m bpd > 1.1m bpd

20 30 40 50 60 70 80 90 100 110 Jun-2013 Dec-2013 Jun-2014 Dec-2014 Jun-2015 Dec-2015 Jun-2016 Dec-2016 Jun-2017 Dec-2017 Jun-2018 Dec-2018 Jun-2019 Dec-2019 Jun-2020 Dec-2020 Jun-2021 Dec-2021 Jun-2022 Dec-2022 Jun-2023 Dec-2023 Jun-2024 Dec-2024 Jun-2025 Dec-2025 Jun-2026 Dec-2026 USD per barrel brent crude price

OIL SUPPLY - OPEC CUTS ALREADY IN

13

Source: Clarksons, Bloomberg

10,000 20,000 30,000 40,000 50,000 60,000 39,000 40,000 41,000 42,000 43,000 44,000 45,000 46,000 Jul-2016 Aug-2016 Sep-2016 Oct-2016 Nov-2016 Dec-2016 Jan-2017 Feb-2017 Mar-2017 Apr-2017 May-2017 Jun-2017 Jul-2017 Aug-2017 Sep-2017 Oct-2017 Nov-2017 Dec-2017 Jan-2018 Feb-2018 Mar-2018 Apr-2018 May-2018 Jun-2018 Jul-2018 Aug-2018 Sep-2018 Oct-2018 Nov-2018 Dec-2018 Jan-2019 Feb-2019 VLCC freight rates US & OPEC crude production US & OPEC crude output VLCC rates

RISE OF US SHALE MEANS OPEC CUTS LESS EFFECTIVE

14

Source: Bloomberg

28,000 29,000 30,000 31,000 32,000 33,000 34,000 35,000 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Jul-2016 Aug-2016 Sep-2016 Oct-2016 Nov-2016 Dec-2016 Jan-2017 Feb-2017 Mar-2017 Apr-2017 May-2017 Jun-2017 Jul-2017 Aug-2017 Sep-2017 Oct-2017 Nov-2017 Dec-2017 Jan-2018 Feb-2018 Mar-2018 Apr-2018 May-2018 Jun-2018 Jul-2018 Aug-2018 Sep-2018 Oct-2018 Nov-2018 Dec-2018 Jan-2019 Feb-2019 OPEC crude production US crude production US output OPEC output

OIL SUPPLY – OPEC CUTS ARE IN..BUT SUPPLY BACKGROUND CONSTRUCTIVE

15 99.0 99.5 100.0 100.5 101.0 101.5 102.0 102.5 103.0 10.0 10.5 11.0 11.5 12.0 12.5 13.0 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Total oil supply m bbls per day US, Saudi & Russia oil production m bpd US Saudi Russia Total global oil supply

Source: Ciitigroup

TON MILES - INCREASING

Demand growth all from Far East – key for tankers is where supply is sourced from

1.4 mbpd x 365 days = 511m barrels 511m barrels / 2m capacity per VLCC = 256 cargoes 256 cargoes / 9 annual journeys for VLCC MEG – F East = 28 VLCCs 1.4 mbpd x 365 days = 511m barrels 511m barrels / 2m capacity per VLCC = 256 cargoes 256 cargoes / 4.5 annual journeys for VLCC Atlantic – F East = 57 VLCCs

Exporter

Supply Demand Demand Supply Source Euronav, Morgan Stanley, Fearnley

West Africa US/LatAm / Caribs Middle East Asia Pacific China

28 VLCCs 57 VLCCs

Atlantic Basin – Far East route Middle East - Asia Pacific route

16

43

Annual demand growth VLCC equivalents (mbpd)

1.6 49 1.5 46

1.4 43

1.3 40 1.2 37 1.1 33 1 30 0.9 27 0.8 24 0.7 21

Importer

West of Suez will provide 81%

• f new oil production to 2023

East of Suez will provide 81%

• f new oil consumption & 74%

new refinery capacity to 2023

VESSEL SUPPLY – BALANCE IMPROVING

ORDER BOOK OPERATIONAL FLEET RECYCLING

Source: Euronav

17

CONTRACTING NEW VESSELS Korea dominating tanker orders Shipyard Consolidation VLCC OB/Fleet = 13.5% Suezmax OB/Fleet = 10.4% Below historic averages More Iranian vessels to exit IMO prep will reduce capacity Global fleet age will require further recycling

VESSEL SUPPLY - CONTRACTING – DRIVEN BY INDUSTRIAL REPLACEMENT/ “CHEAP” PRICES

VLCC below $80m attracted buyers

18

Source: Clarksons

77 79 81 83 85 87 89 91 93 95 1 2 3 4 5 6 7 8 9 10 Sep-2016 Oct-2016 Nov-2016 Dec-2016 Jan-2017 Feb-2017 Mar-2017 Apr-2017 May-2017 Jun-2017 Jul-2017 Aug-2017 Sep-2017 Oct-2017 Nov-2017 Dec-2017 Jan-2018 Feb-2018 Mar-2018 Apr-2018 May-2018 Jun-2018 Jul-2018 Aug-2018 Sep-2018 Oct-2018 Nov-2018 Dec-2018 Jan-2019 Value of New build VLCC No of VLCC contracted No of VLCC orders Expansion No of VLCC orders Replacement No of VLCC orders Speculative/Scrubber New Build VLCC price

VESSEL SUPPLY – CHANGES IN SHIPBUILDING STRUCTURE

19 10 20 30 40 50 60 70 Korea Japan China Number of VLCC & Suezmax ordered since 2017 VLCC Suezmax Hyundai Heavy Industries 14% DSME 6% Samsung Heavy 4% Other 76%

Korea dominates crude tanker orderbook Consolidation in Shipbuilding sector

Source: Clarksons Source: CSFB

Global Market share in shipbuilding

VLCC DELIVERY SCHEDULE

20

Source: Clarksons

30 24 20 47 50 39 17 48 39 11

• 22
• 14
• 4
• 2
• 14
• 39
• 1
• 21
• 31
• 31
• 60
• 40
• 20

20 40 60 80

2013 2014 2015 2016 2017 2018 2019 2020 2021

Number of VLCCs per year Delivered To be Delivered Recycled To be Recycled

SUEZMAX DELIVERY SCHEDULE

21

Source: Clarksons

27 8 10 27 57 32 17 16 17 2

• 7
• 7
• 1
• 13
• 23
• 1
• 15
• 26
• 22
• 40
• 30
• 20
• 10

10 20 30 40 50 60 70

2013 2014 2015 2016 2017 2018 2019 2020 2021

Number of Suezmax per year Delivered To be Delivered Recycled To be Recycled

CONCENTRATION OF VESSEL SUPPLY 2019 IS A HEADWIND FOR VLCC

22

Source Clarksons

14 13 12 10 11 10 5 4 6 8 2 8 4 5 7 4 11 12 12 12 18 11 13 8 8 13 9 9 21 15 15 14 12 7 9 11 5 10 15 20 25 No of VLCC deliveries per quarter

39 65 2019 2020

23

VESSEL SUPPLY – IRANIAN SANCTIONS REDUCING SUPPLY WITH MORE TO COME

16 18 19 20 24 24 27 26 25 21 21 21 21 23 21 22 23 25 25 23 22 22 19 20 13 12 8 2 3 4 4 6 2 1 0 1 1 1 0 0 0 0 0 0 1 4 5 6 17 10 20 30 40 50 60 70 Number of VLCC Long term storage Iranian storage Market storage

14 more Iranian tankers to add?

Source: Clarksons

RECYCLING REFLECTS STEEL PRICE AND REGULATORY PRESSURE

Source Euronav

24

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

• lder vessels

RECYCLING – REFLECTS MORE MATURE VLCC FLEET

25 7.00 7.50 8.00 8.50 9.00 9.50 12 14 16 18 20 22 24 26 2011 2012 2013 2014 2015 2016 2017 2018 Average Age of VLCC in global fleet Average age of VLCC recycled av age demolition average average age vlcc fleet

Average age recycling at 20.6 years of age Recycling driven by steel prices in the main

Source: Clarksons Source: Clarksons

1 2 3 4 5 6 7 8 9 10 5 10 15 20 25 30 35 40 45 50 Aug-2010 Feb-2011 Aug-2011 Feb-2012 Aug-2012 Feb-2013 Aug-2013 Feb-2014 Aug-2014 Feb-2015 Aug-2015 Feb-2016 Aug-2016 Feb-2017 Aug-2017 Feb-2018 Aug-2018 Feb-2019 Number of VLCC recycled VLCC value $m Recycled VLCC VLCC Scrap Value 15 year old VLCC value

PIPELINE FOR MORE RECYCLING IS BUILDING

26

Average fleet age suggests 2-3% recycling rate Recycling pipeline for 2019 corroborates rate

Source: Clarksons

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 7.5 8.5 9.5 10.5 11.5 12.5 13.5 14.5 1996 2000 2004 2008 2012 2016 % of VLCC fleet recycled Average age of VLCC fleet VLCC Fleet - Average Age % of VLCC fleet recycled

Source: Clarksons

50% = 7 VLCC 100% = 8 VLCC

7 8 4 11 3 14 30 24 13 25 40 28 5 10 15 20 25 30 35 40 45 2018 2019 2020 2021 No of VLCC facing survey > 17.5 years per year SS at 22.5yrs SS at 20yrs SS at 17.5yrs

30% = 7 VLCC

VESSEL SUPPLY CAN BE ABSORBED – BUT WITH 2H BIAS

27 82 99 37 43 14 20 20 22

20 40 60 80 100 120 140 VLCC equivalent to be delivered 2010 PLUS OPEC 1.2m bpd cut takes out 37 VLCC Demand from 1.4m bpd Iranian VLCC taken out

• f market

US exports additional 500k bpd IMO 2020 Retrofitting and tank cleaning Recycling

No of VLCC equivalent for 2019

…Potentially yes given Iran, US export growth and impact IMO

FINANCIALS & REGULATION – STRUCTURAL CHANGE

Global end of the year loan shipping portfolio

• Banks under increasing

commercial & regulatory pressure

• Regulations starting to bite –

Basel 4 in particular

Source Petrofin

Around USD 104bn withdrawn from shipping sector since 2010

28

• From Sept 2019, to be installed

upon the next Dry Dock (5 yr) Euronav Fleet:

• 21 VLCC BWTS ready
• 8 Suezmax BWTS ready

Ballast Water Treatment systems

374 10 66 361

8 87

317

12 93

292 11 98 276 10 105 254 16 128 221 17 117 206 19 121

50 100 150 200 250 300 350 400 Europe US Far East & Australasia $m lending to shipping by banks 2010 2011 2012 2013 2014 2015 2016 2017

CURRENT THEMES

ISSUE #1 US – CHINA TRADE ISSUES HAD LITTLE IMPACT ON CRUDE TANKERS

30

J-KIT = Japan, Korea, India, Taiwan

Source: Bloomberg, EIA

1 1 2 2 3 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 US $ value of crude exports ($bn) per month US crude exports m bpd US $ value crude exports to China US $ value crude exports to JKIT US crude exports

ISSUE #2 VENEZUELA – MORE IMPACTFUL ON OIL PRICE STRUCTURE THAN TANKERS

31

Assuming lost Vz 500k bpd = 3 VLCC net units Impact on crude grades and differentials

100,000 mbpd x 365 days = 36.5m barrels 36.5m barrels / 2m capacity per VLCC = 19 cargoes 19 cargoes / 9 annual journeys for VLCC MEG – F East = 2 VLCCs 500,000 mbpd x 365 days = 182m barrels 182m barrels / 2m capacity per VLCC = 91 cargoes 91 cargoes / 18 annual journeys for VLCC VZ – USA = 5 VLCCs

Expect Canada, Brazil, Bolivia, Columbia to fill 400/500k Vz shortfall 500kbpd loss Vz to USA 100kbpd gain AG to USA

• 1.0
• 0.5

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Brent - Dubai spread crude $ per barrel

Source: Euronav Source: Bloomberg

ISSUE #3 US EXPORTS GAINING CRITICAL TRACTION FOR TANKERS

32 1 2 3 4 5 6 7 8 2016 2017 2018 2019 2020 US crude export capacity mbpd CC Brownsville Greater Houston St James NO LOOP Nederland

Source: ABG Sundal

US crude export capacity growing US is driving the barrel further and further

Source: EIA, Kepler

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Dec-2015 Feb-2016 Apr-2016 Jun-2016 Aug-2016 Oct-2016 Dec-2016 Feb-2017 Apr-2017 Jun-2017 Aug-2017 Oct-2017 Dec-2017 Feb-2018 Apr-2018 Jun-2018 Aug-2018 Oct-2018 Average distance import/export (nautical miles) exports distance imports distance

ISSUE #4 ASSET PRICES SIGNALLING AN IMPROVEMENT

33 75 80 85 90 95 100 7 8 9 10 11 12 13 14 15 16 VLCC new build price $m Euronav share price $ Euronav NAV $ per share Euronav share price $ New build VLCC $m

Source: Clarksons, Fearnley

ISSUE #4 ASSET VALUES APPEAR KEY

34

Correlation EURN share price & New Build VLCC = 84%

Source: Clarksons

10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 Dec-2004 May-2005 Oct-2005 Mar-2006 Aug-2006 Jan-2007 Jun-2007 Nov-2007 Apr-2008 Sep-2008 Feb-2009 Jul-2009 Dec-2009 May-2010 Oct-2010 Mar-2011 Aug-2011 Jan-2012 Jun-2012 Nov-2012 Apr-2013 Sep-2013 Feb-2014 Jul-2014 Dec-2014 May-2015 Oct-2015 Mar-2016 Aug-2016 Jan-2017 Jun-2017 Nov-2017 Apr-2018 Sep-2018 Euronav share price in Dollar Value of new build VLCC New Build VLCC EURN share price $

ISSUE #4 FREIGHT RATES LESS SO

35

Correlation EURN share price & VLCC rates = 66%

Source: Clarksons

10 20 30 40 50 60 50,000 100,000 150,000 200,000 250,000 Dec-2004 May-2005 Oct-2005 Mar-2006 Aug-2006 Jan-2007 Jun-2007 Nov-2007 Apr-2008 Sep-2008 Feb-2009 Jul-2009 Dec-2009 May-2010 Oct-2010 Mar-2011 Aug-2011 Jan-2012 Jun-2012 Nov-2012 Apr-2013 Sep-2013 Feb-2014 Jul-2014 Dec-2014 May-2015 Oct-2015 Mar-2016 Aug-2016 Jan-2017 Jun-2017 Nov-2017 Apr-2018 Sep-2018 Euronav share price in dollars VLCC freight rates VLCC EURN share price $

CONCLUSION

WHAT DOES IT MEAN? TWO TIER MARKET AND “STRETCHED” TANKER FLEET

37

“Twelve Empty Supertankers Reveal Truths About Today’s Oil Market – Bloomberg 21 February 2019”

Bifurcated freight market - Atlantic versus AG Global tanker fleet ballast legs increasing

Source: Tankers International

12 empty VLCCs heading for US @ 21 February 2019

BEGINNING TO STIR – VLCC REFLECT BETTER MARKET BALANCE

38

Market tightness reflected in higher rates Rate recovery stalled but still above 17 & 18

Source: Clarksons

10,000 20,000 30,000 40,000 50,000 60,000 Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Week 11 Week 12 Week 13 Week 14 Week 15 Week 16 Week 17 Week 18 Week 19 Week 20 Week 21 Week 22 Week 23 Week 24 Week 25 Week 26 Week 27 Week 28 Week 29 Week 30 Week 31 Week 32 Week 33 Week 34 Week 35 Week 36 Week 37 Week 38 Week 39 Week 40 Week 41 Week 42 Week 43 Week 44 Week 45 Week 46 Week 47 Week 48 Week 49 Week 50 Week 51 Week 52 2017 2018 2019

IT’S A GAME OF TWO HALVES, BRIAN

39

Refinery maintenance programmes brought forward ahead of IMO 2020?

Source: Citigroup, Euronav, Braemar, Bloomberg,

• 2
• 1.5
• 1
• 0.5

0.5 1 1.5

• 40
• 30
• 20
• 10

10 20 30 40 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Quarterly change in global oil supply (citi) Number of VLCC equivalents VLCC equivalents due to be delivered VLCC equivalents in DD for IMO 2020 Iranian VLCC post US waivers Recycling Oil supply change

2019 - A YEAR OF MANY MOVING PARTS BUT COULD SEE INFLECTION POINT

40

2016 2017 2018 2019 2020 VLCC to be delivered 47 50 39 65 39 Suezmax to be delivered 27 57 32 33 17 VLCC Equivalent 61 79 55 82 48 VLCC equivalent recycling*

• 2
• 15
• 46
• 30
• 44

IEA Demand Forecast mbpd 1.6 1.6 1.3 1.4 1.2 Translated into VLCC

• 49
• 49
• 40
• 43
• 37

Floating Storage Change**

• 8

21 12

• 30

Year end surplus/(deficit) 2 36

• 19
• 21
• 33

Cumulative Surplus/(Deficit) 2 37 18

• 3
• 36

Average VLCC earnings 41,488 17,794 15,561 Average Suezmax earnings 27,567 15,436 16,466

*recycling forecasts based on 100% SS 22.5yr ; 50% 20 yr; 30% 17.5 yr **negative change indicates an increase in floating storage inc Iranian vessels

SUPPLY DEMAND

Annual demand growth VLCC equivalents (mbpd)

1.6 49 1.5 46

1.4 43

1.3 40 1.2 37 1.1 33 1 30 0.9 27 0.8 24 0.7 21

Data assumes no disruption from IMO 2020

EURONAV IMO 2020 FRAMEWORK

IMO 2020 – A POSITIVE - MORE CRUDE RUNS…

42

More throughput to make compliant fuel

82.0 83.2 84.6 85.8 86.6 87.4 88.0 88.5 88.8 82.0 83.2 84.3 85.1 85.7 86.4 87.1 87.8 88.5 78 80 82 84 86 88 90 2017 2018 2019 2020 2021 2022 2023 2024 2025 m bpd Crude throughput with IMO Without IMO

9 21 27 30 27 21 9

Potential additional VLCC required

Source: HSBC

…IMO 2020 A POSITIVE – MORE TRADING ROUTES

43

New trading routes driven by sulphur content

Source Braemar, Euronav 0.2 0.2 0.2

Potential additional trade mbpd

Source: Braemar, Euronav

IMO 2020 – POTENTIAL FOR STORAGE OPPORTUNITIES & LOGISTICS

44

Volumes Bear Case Bull Case MARKET SIZE IMO 2020 HSFO Conversion Volumes 3.3 3.3 MITIGATING FACTORS Estimated Non Compliance/Scrubber Penetration

• 1.0
• 0.5

HSFO Volumes to be replaced 2.3 2.8 HSFO REPLACEMENT Higher coking capacity, higher light sweet crude runs etc

• 2.2
• 2.0

Remaining non compliant volumes 0.1 0.8 Mid Point 0.5 STORAGE Estimated Global HSFO storage 94.0 AVAILABILITY Current HSFO Inventory 64.0 Remaining Land based HSFO Storage 30.0 Time it would take to fill land based storage 62 days

VLCCs Absorbed per Quarter until market clears 23

Source: Wells Fargo, IMO, UNCTAD, Company Filings

• Logistics at Port should not be overlooked – will be more “artificial employment”
• Segregation of the barrel will need to be replicated through infrastructure
• Likely congestion & delays thus reducing tanker fleet capacity

EURONAV ON SCRUBBERS – SCEPTICAL STANCE

45

Scrubber framework Upfront capital investment without visibility Full capture of savings likely to be challenging

“Cart before the horse”

EURONAV ON SCRUBBERS – SCEPTICAL STANCE

46

Scrubber framework Much flexibility in refinery system to produce LSFO Applicability of scrubber technology reducing

SCRUBBERS - REGULATORY & OPERATIONAL RISKS REQUIRE CLARITY

47

• Scrubber = more

power = more CO2 emissions

• Reduced

buffering capacity

• f sea from

increased sulphur

• Cumulative SO2

impact in sea unclear

• Investor arena

increasingly ESG / CSR focused

• Oil majors

under huge ESG pressure

• Repeat of single

hull tanker move in noughties?

• Risk of future

port/flag state action

• No guidelines on

technology failure

• r enforcement

regime

• Wastewater

never properly assessed

• Unknown safety

risks but known corrosion risk

• Retrofit

installation risk & complexity

• 30,000m3 daily

wastewater = 12 Olympic pools EVERY DAY Scrubber framework Environment Risk Regulatory & Enforcement Operational Risk

KEY – SCRUBBER ECONOMICS – WE WANT TO FOCUS ON FULLY COSTED APPROACH

48

Scrubber framework CASH RETURNS Fuel Spread $150-200 per ton Consumption 50-65 tonnes per day Scrubber $2.8m per unit/$5m “all in” FULLY COSTED RETURNS Base assumption of fuel cost savings $10,000 per day Applicability of scrubber use: Port bans, time in port 75% $7,500 per day Depreciation of scrubber unit: $2.8 unit cost/3 years real cost to be accounted for Interest on capital cost: $5m all in cost x 5% pa real cost to be accounted for Additional operating costs: 3 tons per day @$200 p/t real cost to be accounted for Capture of fuel cost savings: JPMorgan 60%, DNB 75%, Morgan Stanley 30-70% 60% Regulatory and Operational risks: difficult to quantify and price All the focus been on above this line not below it

APPENDIX

VLCC GLOBAL FLEET AGE PROFILE

50 1 11 7 5 11 28 23 36 37 28 31 18 29 39 52 59 64 49 30 24 20 47 50 39 13 52 39 11 10 20 30 40 50 60 70 No of VLCC

25% > 15 years Orderbook 13%

SUEZMAX GLOBAL FLEET AGE PROFILE

51 2 1 3 2 2 1 8 5 18 13 23 18 25 23 21 20 13 44 37 43 44 16 8 9 24 50 28 7 23 17 2 10 20 30 40 50 60 No of Suezmax

24% > 15 years Orderbook 10%

ORDERBOOK – MANAGEABLE IN SIZE TERMS….

52

Source Clarksons

13.5% 10.4%

10 20 30 40 50 60 Orderbook as % of fleet VLCC Orderbook % Fleet Suezmax Orderbook % Fleet VLCC long term average Suezmax long term average

LONGER TERM ASSET AND EARNINGS CORRELATIONS

53 3 8 13 18 23 28 33 38 43 48 20 40 60 80 100 120 140 160 180 Dec/04 May/05 Oct/05 Mar/06 Aug/06 Jan/07 Jun/07 Nov/07 Apr/08 Sep/08 Feb/09 Jul/09 Dec/09 May/10 Oct/10 Mar/11 Aug/11 Jan/12 Jun/12 Nov/12 Apr/13 Sep/13 Feb/14 Jul/14 Dec/14 May/15 Oct/15 Mar/16 Aug/16 Jan/17 Jun/17 Nov/17 Apr/18 Sep/18 Euronav share price $ VLCC new build, 5, 10 year old New Build VLCC 5 year VLCC 10 year VLCC Price

Correlations VLCC Earnings New Build 5 Year old VLCC 10 Year old VLCC Euronav Price from Dec 2004 66% 84% 94% 96%

PRIMARY VALUE OF EURONAV IS ITS STOCK OF THIS COMMODITY – FLEET DAYS

54

Remaining fixing days at Euronav

50 100 150 200 250 300 VLCC Suezmax Thousands 50 100 150 200 250 300 VLCC Suezmax Thousands

• Pre merger Euronav

had 735 shares per fleet day

• Post merger it has

649 shares per fleet day

• Accretion of

15%

Pre merger Post merger

79 84 89 94 99 104 109 20,000 40,000 60,000 80,000 100,000 120,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 New build VLCC $m VLCC rates $ per day VLCC rates New Build VLCC $m

COUNTER CYCLICAL INVESTING

55

Gener8 Maersk

Source: Clarksons

LONGER TERM FREIGHT RATES BY QUARTER

56 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 Q1-2000 Q3-2000 Q1-2001 Q3-2001 Q1-2002 Q3-2002 Q1-2003 Q3-2003 Q1-2004 Q3-2004 Q1-2005 Q3-2005 Q1-2006 Q3-2006 Q1-2007 Q3-2007 Q1-2008 Q3-2008 Q1-2009 Q3-2009 Q1-2010 Q3-2010 Q1-2011 Q3-2011 Q1-2012 Q3-2012 Q1-2013 Q3-2013 Q1-2014 Q3-2014 Q1-2015 Q3-2015 Q1-2016 Q3-2016 Q1-2017 Q3-2017 Q1-2018 Q3-2018 VLCC Suezmax VLCC average since 2000 Suezmax average since 2000

VLCC $44,320 average Suezmax $35,701 average

CONSOLIDATION IN LARGE TANKERS

57 6 5 16 14 18 32 29 11 10 10 22 21 21 38 25 34 30 31 30 39 46 49 51 73 22 22 24 26 27 27 30 37 32 22 42 46 46 44 17 17 31 31 32 35 41 124 116 142 206 227 254 273

0% 5% 10% 15% 20% 25% 50 100 150 200 250 300 2012 2013 2014 2015 2016 2017 2018 % of VLCC/Suezmax fleet Number of VLCC/Suezmax DHT TNK GNRT* EURN* NAT

FEARNLEY ON SCRUBBER RESTRICTIONS

58