Investor Presentation - USA roadshow March 2015
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. 1
Company overview
Euronav – Key investment highlights • Pure-play tanker company with best-in-class operating platform Leading crude tanker platform • Experienced management team with proven track record of growth through the cycle • Limited world fleet growth for next two years, low relative orderbook Cyclical shift underway to fleet size • Structural ton mile expansion underway with refinery shifts and Asian demand • Balance sheet strength and access to capital throughout cycle Dynamic financial track record • Structural growth drivers augmented by short term factors (contango, oil price fall) providing platform for rate recovery and dividends 1 VPLUS 2 FSO 26 VLCC 23 SUEZMAX Over 441,000 DWT Stripped water capacity Upto 320,000 DWT 125,000 – 180,000 DWT Only 4 in world fleet 380k barrels 2 Million barrels 1 Million barrels 3 Million barrels 2.8 Million barrels Average age 12 years Average age 12 years Average age 6 years Average age 10 years 3
Proven track record of management and acquisitions/disposals 180 160 140 Purchased 15 VLCCs from Maersk for $980M 120 100 (mm USD) +4 +16 +4 80 +1 +3 +15 +4 +1 +1 60 +1 +1 40 20 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Suezmax 5 Year Old Secondhand Prices VLCC 5 Year Old Secondhand Prices Source: Clarksons to end Oct 2014 Proven growth track record with strong access to capital Bank debt Convertible Bond issuance Equity raised bond issuance issuance 2003 52 vessels 10 vessels $5,368mm $275mm $235mm $625mm 3.0mm dwt 13.0mm dwt Vessel acquisition Profitable vessel sale Loss-making vessel sale 4
Potential for Powerful Cash Generation Euronav is well positioned for strong cash flow generation ■ 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 Pro forma fleet earnings capability (EBITDA, $M) 1 2015 spot days exposure = 15,940 days $1,130 Each $5,000 uplift $658 in both VLCC and $496 $335 Suezmax rates $255 improves Net +$5,000 +$15,000 +$25,000 +$55,000 Revenue and per day per day per day per day EBITDA by $80mm VLCC $25,000 $30,000 $40,000 $50,000 $80,000 TCE rates Suezmax $20,000 $25,000 $35,000 $45,000 $75,000 TCE rates 1 Based on full year contribution of 52 ships – including JV 5
Chartering strategy provides upside leverage ● 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 opportunities for both short term and long term (FSO) contracts Fixed / Spot Exposure Fixed / Spot Exposure Fixed / Spot Exposure (2015E) (Year end 2004) (Year end 2008) Fixed 17% 14% 43% 57% Spot 83% 86% Chartering strategy allows Euronav to capitalize on increasing rate environment 6
Maximizing value through size Global VLCC Fleet = 636 vessels Overview of the Tankers International Pool 40 60 20 Source: Clarksons @ 25/2/15 ● Founding member in 2000 Euronav Strategy ● Leading spot market oriented VLCC pool in which ship ● Focus on ships/fleets on water. NOT new buildings owners with vessels of similar sizes and quality participate ● Formed VLCC Chartering October 2014 to combine TI ● Look to use equity as currency when accretive VLCC pool fleet with Frontline to improve fleet earnings opportunities arise potential while creating greater options for cargo end users ● Returns driven acquisition criteria without stressing ● Innovation platform (VL Database, TI Pool App) balance sheet TI Pool undertaking leadership role 7
Strong and strategic relationships with high-quality charterers Selected customer relationships Many customers have been served by us for more than 20 years Source: Company filings and website 8
FSO – Offshore market – Opportunistic capability FSO Conversion 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 9
Industry overview
Demand: Shift to Non-OECD driving oil demand growth Global Oil Demand moving to non-OECD countries Growth will continue to be led by non-OECD (mb/day) 55 Non-OECD demand OECD demand 50 45 40 Non-OECD demand overtaking OECD 35 demand 30 25 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E Source: Wall Street commodity research Strong growth in Chinese oil imports… Refinery expansion in Asia and Middle East a key driver 3,500 8 3,040 7 3,000 6 Capacity additions (mbd) Total mb/day 2,500 Total 5 4m bpd 2.5m bpd 4 2,000 3 1,500 1,182 2 907 1,000 1 551 410 400 0 500 2014 2015 2016 + 2014 2015 2016+ - Asia Pacific Middle East 11 Source: China customs, Wall Street commodity research Source: Wood-Mackenzie
Supply – Global VLCC and Suezmax fleet – limited growth 12
Structural expansion: Increased ton miles given trade shifts 1 5 4 6 2 New order being established in transportation routes Arabian Gulf to China 3 21 days 5,500 miles West Africa to USA 19 days 5,000 miles West Africa to China 33 days 9,650 miles Latam to China 44 days 11,500 miles USA no longer importing light crude but heavy Middle East – no additional exports as own 1 4 crude imports from Middle East remain intact production to feed their local refinery expansion WAF (West Africa) light crude trade lane Atlantic = long crude – from Latam, Russia, 2 5 to USA dried up – now export to Asia North Sea, WAF – ALL going East Latam to Far East - trade lane expanding Asian Demand to remain strong – underpinned 6 3 by China refinery expansion & filling strategic reserve 13
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