Investor Presentation - USA roadshow March 2015 Forward looking - - PowerPoint PPT Presentation

Investor Presentation - USA roadshow

March 2015

1

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,

• bjectives, 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

• ccur 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

• pportunities, 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

• f the risks, uncertainties and assumptions, the forward looking events discussed in this presentation might not
• ccur, and our actual results could differ materially from those anticipated in these forward-looking statements.

Company overview

3

Euronav – Key investment highlights

• Pure-play tanker company with best-in-class operating platform
• Experienced management team with proven track record of growth

through the cycle

• Limited world fleet growth for next two years, low relative orderbook

to fleet size

• Structural ton mile expansion underway with refinery shifts and Asian

demand

• Balance sheet strength and access to capital throughout cycle
• Structural growth drivers augmented by short term factors (contango,
• il price fall) providing platform for rate recovery and dividends

Leading crude tanker platform Cyclical shift underway Dynamic financial track record 2 FSO Stripped water capacity 380k barrels 2.8 Million barrels Average age 12 years 1 VPLUS Over 441,000 DWT Only 4 in world fleet 3 Million barrels Average age 12 years 23 SUEZMAX 125,000 – 180,000 DWT 1 Million barrels Average age 10 years 26 VLCC Upto 320,000 DWT 2 Million barrels Average age 6 years

4

Proven track record of management and acquisitions/disposals

Profitable vessel sale Loss-making vessel sale Vessel acquisition

20 40 60 80 100 120 140 160 180

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (mm USD) Suezmax 5 Year Old Secondhand Prices VLCC 5 Year Old Secondhand Prices

+15 +4 +3 +1 +1 +1 +1 +1 +4 +4 +16

Source: Clarksons to end Oct 2014

Bank debt raised $5,368mm Convertible bond issuance $275mm Bond issuance $235mm Equity issuance $625mm

2003 10 vessels 3.0mm dwt Proven growth track record with strong access to capital 52 vessels 13.0mm dwt

Purchased 15 VLCCs from Maersk for $980M

5

Potential for Powerful Cash Generation

Euronav is well positioned for strong cash flow generation Pro forma fleet earnings capability (EBITDA, $M) 1

1 Based on full year contribution of 52 ships – including JV

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

■ Breakeven (including debt service): ~$29,500 for VLCC

• opex $8,000

~$22,000 for Suezmax

• opex $7,400

■ FSOs generate a consistent, high quality income stream – $52mm of EBITDA provides a floor to earnings

Each $5,000 uplift in both VLCC and Suezmax rates improves Net Revenue and EBITDA by $80mm 2015 spot days exposure = 15,940 days

$255 $335 $496 $658 $1,130 +$5,000 per day +$15,000 per day +$25,000 per day +$55,000 per day

6

Fixed / Spot Exposure (2015E) Fixed / Spot Exposure (Year end 2008)

14% 86%

• Chartering strategy seeks to maximize returns through optimal mix of spot and fixed charters
• Deliberately positioned itself toward more spot exposure at this stage of the cycle
• Look to maximize earnings through combining high quality assets and directly employed crews in storage
• pportunities for both short term and long term (FSO) contracts

Chartering strategy provides upside leverage

Chartering strategy allows Euronav to capitalize on increasing rate environment

17% 83% Fixed Spot

Fixed / Spot Exposure (Year end 2004)

57% 43%

7

Maximizing value through size

• Founding member in 2000
• Leading spot market oriented VLCC pool in which ship
• wners with vessels of similar sizes and quality participate
• Formed VLCC Chartering October 2014 to combine TI

VLCC pool fleet with Frontline to improve fleet earnings potential while creating greater options for cargo end users

• Innovation platform (VL Database, TI Pool App)

Overview of the Tankers International Pool Global VLCC Fleet = 636 vessels

• Focus on ships/fleets on water. NOT new buildings
• Look to use equity as currency when accretive
• pportunities arise
• Returns driven acquisition criteria without stressing

balance sheet

Euronav Strategy TI Pool undertaking leadership role

60 20 40

Source: Clarksons @ 25/2/15

8

Strong and strategic relationships with high-quality charterers

Many customers have been served by us for more than 20 years Selected customer relationships

Source: Company filings and website

9

FSO – Offshore market – Opportunistic capability

Floating storage and offloading units (“FSOs”) market overview

• In 2008, Euronav undertook conversions of 2 ULCC into the

largest 2 FSOs in the world

• Fixed income service contract delivering $52mm EBITDA

annually until 2017

• Life expectancy of vessel extended to 2032; contract in place

until 2017

• Potential for contract extension

FSO Conversion

Industry overview

11

25 30 35 40 45 50 55 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E (mb/day)

Demand: Shift to Non-OECD driving oil demand growth

OECD demand Non-OECD demand Non-OECD demand

• vertaking OECD

demand

Global Oil Demand moving to non-OECD countries

Source: Wall Street commodity research

Strong growth in Chinese oil imports… Growth will continue to be led by non-OECD

Source: China customs, Wall Street commodity research

1 2 3 4 5 6 7 8

mb/day

Refinery expansion in Asia and Middle East a key driver

Source: Wood-Mackenzie

410 907 551 400 3,040 1,182

• 500

1,000 1,500 2,000 2,500 3,000 3,500

Asia Pacific Middle East Capacity additions (mbd) 2014 2015 2016+ 2014 2015 2016+

Total 4m bpd Total 2.5m bpd

12

Supply – Global VLCC and Suezmax fleet – limited growth

13

Structural expansion: Increased ton miles given trade shifts

USA no longer importing light crude but heavy crude imports from Middle East remain intact

1 2 3 6 5 4

Middle East – no additional exports as own production to feed their local refinery expansion Asian Demand to remain strong – underpinned by China refinery expansion & filling strategic reserve WAF (West Africa) light crude trade lane to USA dried up – now export to Asia Latam to Far East - trade lane expanding Atlantic = long crude – from Latam, Russia, North Sea, WAF – ALL going East

1 2 3 4 5 6

Arabian Gulf to China 5,500 miles 21 days West Africa to USA 5,000 miles 19 days West Africa to China 9,650 miles 33 days Latam to China 11,500 miles 44 days New order being established in transportation routes

14

The result: Our thesis is significant need for larger ships

Stage 1 – Cyclical recovery underway 2014-2016

Combined Demand based on 8m bpd for VLCCs = 270 (53 + 217)*

Stage 2 - Structural shift continues to support momentum 2017-2020

*217 VLCC estimate based on = 17 x 60% x 8mbpd + 40 x 20% x 8 + 45 x 20% x 8 = 217

VLCC demand by region (2014E – 2016E)

65 17 10 20 7 12 53

China India SE Asia US & Canada Europe, LatAm & Africa Japan Net est. demand

VLCC supply DISLOCATION in crude transportation routes DRIVING demand in for VLCCs (mbpd)

ATLANTIC Long 3-5mbpd

2-3m bpd additional crude supply from WAF/Brazil

= 6-8mbpd combined

demand

+

1-2m bpd as Euro refiners not buying WAF/North Sea crude Medium term 3m bpd additional demand from China as M East feeds own refinery 17 40 45 +1m bpd to Asia from

• W. Africa instead of

ME +1m bpd incremental to Asia from West Africa +1m bpd incremental to Asia from Caribbean

SUBSTITUTION INCREMENTAL DEMAND INCREMENTAL DEMAND

15

How do lower oil prices affect tankers?

Potential to reverse 7 years of demand destruction China demand strategic as well as organic VLCC rates not correlated with oil price Higher realized TCE rates through lower bunker costs

Oil @ $80

Spot Freight $5,700,000 $5,700,000 TCE rate $69,231 $60,358

Current Market

$5,700,000

Bunker $4900/t

$53,905

Bunker @ $490/t Bunker @ $410/t Bunker @ $300/t Oil @ $60 Oil @ $40

Lower bunker costs = Higher tanker earnings

China estimated Strategic Petroleum Reserve crude stocks and outlook (m bbls)

16

Contango returns…

• Recent move in oil prices has led to a sharp steepening of Brent forward curve into a Contango position
• Given this move in Contango, close to 20 vessels have already been booked for storage by oil traders
• Through the use of additional vessel for storage capacity (due to Contango trade requirements), the tanker

market should tighten further.

Contango in oil markets  Bullish near term signal for tankers

17

Freight rates – High volatility & price inelasticity

Source: Clarksons to February 27, 2015

Average TCE 2004-2008 = $71,000 per day Notional Break Even

• 50000

50000 100000 150000 200000 250000 jan/04 apr/04 jul/04

• kt/04

jan/05 apr/05 jul/05

• kt/05

jan/06 apr/06 jul/06

• kt/06

jan/07 apr/07 jul/07

• kt/07

jan/08 apr/08 jul/08

• kt/08

jan/09 apr/09 jul/09

• kt/09

jan/10 apr/10 jul/10

• kt/10

jan/11 apr/11 jul/11

• kt/11

jan/12 apr/12 jul/12

• kt/12

jan/13 apr/13 jul/13

• kt/13

jan/14 apr/14 jul/14

• kt/14

jan/15 USD/DAY

Daily average tankers freight rate over 10 years

Average VLCC 2000-built Average Suezmax 2000-built

Financial Overview & Q4 update

19

Track record of shareholder value creation and distributions

Historical earnings and dividends

Between 2004- 2010, we returned $657 million in dividends and $50 million in share buybacks to shareholders

• ut of cumulative net profits of $1,169 million and with capex of $2,695 million

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Leverage 50% 56% 52% 52% 47% 55% 54% 55% 54% 59% 54% No of Vessels 27 31 28 29 32 35 34 34 33 34 52 % fleet = spot 83 31 65 50 57 41 57 47 59 61 74 Capex $m 65 297 561 411 680 406 275 201 none none none Payout ratio 70% 50% 51% 56% 27% N/A 35% N/A N/A N/A N/A

104 303 372 432 344 657 195 260 128 121 138 172 57 237 209 218 101 402 (18) 20 (96) (119) (90) (46) 176 101 118 65 187 7 7 (30.000) (20.000) (10.000) 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 90.000 100.000 (200) (100) 100 200 300 400 500 600 700 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 ($mm) EBITDA Net profit Dividends Avg VLCC TCE Avg Suezmax TCE

20

Full Year and Q4 Operating days & rates

Operating days We maintain strong liquidity and manageable leverage at present

Total fleet operating days 2014: 14,433 Total fleet operating days 4Q14: 4,211 Q4 FY Q4 FY VLCC operated in TI Pool 31,665 27,625 27,900 20,450 VLCC under TC contracts* 33,415 38,538 37,650 42,800 Suezmax operated in the spot by Euronav 24,248 23,382 17,600 16,575 Suezmax under TC contracts* 30,513 25,930 24,800 21,300 * including Profit split when applicable 2014 2013

Rates

Conclusion

22

Robust industry fundamentals driving freight rates

• Tight Vessel supply

for at least 2 years

SUPPLY DEMAND OIL PRICE FALL CONTANGO

• Continued demand

growth led by non- OECD nations

• Refinery relocation

driving greater Ton-Miles

• TCE rates higher as

fuel is cheaper

• Chinese SPR filling up
• Consumer demand

growth as prices fall

• Global GDP Stimulus

directed to consumers not banks

• Take capacity out
• f the market
• Already started on

20 ships (2010: 60 ships)

• Contracts between

6 months and 1 year

SUPER BOOST

STRUCTURAL RECOVERY

Appendix

24

20 40 60 80 100 120 140 160 180 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

(mm USD) Suezmax New Building Prices Suezmax 5 Year Old Secondhand Prices VLCC New Building Prices VLCC 5 Year Old Secondhand Prices

Asset values still below long-term medians

Asset prices have appreciated since H2 2013 but still remain well below long-term medians

15 VLCCs acquired

VLCC

($mm) Newbuild 5 Year Old 10 yr avg 115 94 5 yr avg 98 71 1 yr avg 98 72 Current 97 80

Suezmax

($mm) Newbuild 5 Year Old 10 yr avg 71 65 5 yr avg 62 50 1 yr avg 64 50 Current 65 60

4 VLCCs acquired

Source: Clarksons Source: Clarksons to January 2015

25

Potential disruptive factors

China - slowdown

• Slowdown is relative
• Strategic crude stockpile to grow to 2016
• Refinery plans in China well advanced

Pipelines Slow steaming (hidden capacity) Yard capacity affecting

• rderbook

Worldwide shale oil development

• Geopolitical risk tends to be neutral to positive for shipping
• Infrastructure build costly in time and money
• Infrastructure has political risks (tax, terrorism, boycott)
• Slow steaming here for good (unless rates sustainable > $50k)
• No evidence of changing patterns in last market upturns
• Order slippage been growing every year for past four years
• Limited amount of yards building VLCC/Suezmax
• Financing landscape has changed post financial crisis
• Huge water requirement for development
• Legal/Environmental opposition to shale outside USA is high
• USA benefit 100 years of drilling expertise & geological survey

Other

• Oil price weakens = no shale production – most costs are sunk
• Eco-ships – vast majority of benefits matched in existing fleets
• Middle East reduce production & export

26

Long Established Player

Proven history operating in the crude tanker industry

2014 1989 2000 2004 2005

January: Acquisition

• f 15 VLCC

Added 5 Suezmax & 3 VLCC newbuilds April: Acquired 14 Suezmax and 2 Aframax Lists Euronext Brussels TANKERS INTERNATIONAL Pool founded Initiated focus on larger sized and modern vessels: Six VLCC (double hull) ordered Started doing business under the name “Euronav” as a subsidiary of CNN

2005

March: Acquired 4 VLCC

2005 - 2014 1997 2008-2010

TI Asia and TI Africa Conversion into FSO Asia and FSO Africa Acquisition of 4 ULCC in JV July: Acquisition of 4 VLCC

Peter G. LIVANOS

• Chairman of Euronav
• Chairman of Gaslog, Drylog and

Tanklog Marc SAVERYS

• Vice Chairman of Euronav
• Chairman of CMB, Delphis

and Saverco

52 vessels 13.0 mm dwt

27

Tankers International Pool App – providing transparency

Trade – AG = Arabian Gulf USG = US Gulf WAF = West Africa RS = Red Sea FE = Far East UKCM = Europe WS = Worldscale – The New Worldwide Tanker Nominal Freight Scale is a catalogue of theoretical freight rates expressed as USD per ton for most of the conceivable spot voyages in the tanker trade. Laycan - An abbreviation of "layday cancelling date" or "laydays cancelling“ referring to the period of time when the charterer must commence loading the cargo and the cancelling date (being the date after which the charterer may repudiate the charterparty) if the vessel has not then arrived at the specified port. This period is typically expressed as two dates, eg laycan 25 March/2 April", meaning that the charterer may not be

• bliged to commence loading earlier than 25 March even if the ship has

arrived at the specified port or place of loading by that date, and that he may cancel the charterparty if the ship has not arrived there by 2 April. TCE – time charter equivalent – TCE revenues which are voyage revenues less voyage expenses serve as an industry standard for measuring fleet revenue and comparing results between geographical regions & competitors. Speed - expressed in knots per hr when ballast and when laden Ballast – laden – port – split between the 3 for a voyage Demurrage – Additional revenue paid to the shipowner on its Voyage Charters for delays experienced in loading and/or unloading cargo that are not deemed to be the responsibility of the shipowner, calculated in accordance with specific Charter terms.

https://itunes.apple.com/gb/app/vlcc-fixtures/id727040139?mt=8 https://play.google.com/store/apps/details?id=com.BoelIT.tifixtures&hl=en

28

Rate Environment – continues to improve