Third Quarter presentation 2018 November 9 2018 Agenda Highlights - PowerPoint PPT Presentation

Third Quarter presentation 2018 November 9 2018

Agenda Highlights • Financials • • Operational review/Strategy • Prospects and Market update

Highlights Highlights Key figures, USD mill¹ • The chemical tanker market remained largely unchanged from previous (USD mill, 4Q17 1Q18 2Q18 3Q18 3Q17 FY17 FY16 unaudited) quarter, and also on terminals the markets remained unchanged Odfjell Tankers 213.2 211.6 209.0 208.8 207.6 842.5 832.4 Odfjell Terminals 28.4 25.2 25.9 22.6 27.0 110.8 122.7 • EBITDA of USD 32 mill, compared with USD 37 mill in 2Q18, which was Revenues* 243.5 238.9 236.7 233.7 236.7 961.7 967.2 impacted by the sale of the Rotterdam terminal Odfjell Tankers 30.6 26.9 28.0 26.8 28.0 125.0 187.7 Odfjell Terminals 9.9 6.3 8.9 3.9 8.7 38.4 46.5 • EBITDA of USD 27 mill from Odfjell Tankers compared to USD 28 mill in EBITDA* 40.8 33.9 37.2 31.5 37.3 165.8 237.6 2Q18 EBIT 97.3 2.9 (52.9) (13.5) 3.6 132.8 144.6 Net profit 104.3 (12.2) (120.0) (31.2) (10.5) 90.6 100.0 • EBITDA of USD 4 mill from Odfjell Terminals compared to USD 9 mill in EPS** 1.33 (0.15) (1.53) (0.40) (0.13) 1.15 1.27 2Q18. Adjusting for the Rotterdam terminal, results were unchanged ROE*** 16.4% (6.3%) (22.3%) (13.8%) (7.0%) 11.8% 14.6% compared to 2Q18 ROCE*** 10.9% 0.6% (5.4%) (1.5%) 0.5% 8.8% 7.9% • Net result of USD -31 mill compared to USD -120 mill in last quarter before *Includes figures from Odfjell Gas ** Based on 78.6 million outstanding shares adjusting for non-recurring items *** Ratios are annualised • Completion of Sinochem transaction with four vessels to be delivered on bareboat charter “ The chemical tanker market remained depressed during the quarter, but we continue to believe that 2018 is the turning point • Successful placement of unsecured bond of NOK 500 mill in September for the chemical tanker markets. Adjusting for the Rotterdam terminal, our terminal division delivered stable results. We have • Concluded the sale of our Rotterdam terminal in September positioned ourselves well for the future, both within tankers and terminals, with one of the most energy efficient fleets in the world ” Kristian Mørch, CEO Odfjell SE 1. Proportional consolidation method 3

Agenda Highlights • Financials • • Operational review/Strategy • Prospects and Market update

Financials Income statement 1 – Odfjell Group by division Key quarterly deviations: Tankers Terminals Total* USD mill 2Q18 3Q18 2Q18 3Q18 2Q18 3Q18 • TC expenses reduced by USD 4.3 mill compared to 2Q18, as redeliveries of tc vessels continue Gross revenue 209.0 208.8 25.9 22.6 236.7 233.7 Voyage expenses (85.2) (89.9) - - (86.0) (90.9) • Gross revenues in Odfjell Terminals impacted by the Rotterdam terminal due to the oil spill in the Rotterdam TC expenses (37.6) (33.3) - - (37.6) (33.3) harbour Pool distribution (4.6) (6.3) - - (4.6) (6.3) • Higher G&A in Odfjell Terminals related to the sale of Opex (35.9) (36.6) (13.2) (12.5) (49.7) (49.7) Rotterdam and restructuring costs of Odfjell Terminals G&A (17.7) (15.9) (3.8) (6.1) (21.5) (22.1) • USD 12.5 mill in capital loss mainly related to currency EBITDA 28.0 26.8 8.9 3.9 37.2 31.5 translation loss at the Rotterdam terminal Depreciation (24.3) (24.4) (8.0) (7.4) (32.3) (31.8) • USD 2.7 mill in tax losses in Odfjell Terminals related to Impairment - - (58.1) - (58.1) - Odfjell Terminals B.V.sale of the Rotterdam terminal Capital gain/loss 0.2 (0.6) - (12.5) 0.2 (13.1) • The Rotterdam terminal contributed with a loss of USD -19.4 EBIT 3.9 1.9 (57.1) (16.1) (52.9) (13.5) mill during the quarter. Net interest expenses (16.5) (17.8) (2.4) (2.4) (19.0) (20.4) • Adjusted for non-recurring items related to the OTR sale and Other financial items (2.2) 4.4 (2.1) 0.4 (4.4) 4.8 other financial items, our net profit for 3Q18 was USD -18 mill compared to USD -14 mill previous quarter Net finance (18.8) (13.4) (4.5) (2.0) (23.5) (15.6) Taxes (1.2) (0.5) (42.4) (1.7) (43.6) (2.2) Net result (16.2) (12.0) (104.0) (19.8) (120.0) (31.2) EPS (0.21) (0.15) (1.32) (0.25) (1.53) (0.40) 1. Proportional consolidation method * Total includes contribution from Gas Carriers now classified as held for sale 5

Financials Balance sheet 30.09.2018 – Odfjell Group 2Q18 3Q18 2Q18 3Q18 Assets, USD mill Equity and liabilities, USD mill Ships and newbuilding contracts 1 379.1 1 373.4 Total equity 665.2 652.0 Investment in associates and JVs 245.1 243.1 Non-current liabilities and derivatives 8.3 8.3 Other non-current assets/receivables 26.2 27.9 Non-current interest bearing debt 975.1 907.2 Total non-current assets 1 650.3 1 644.1 Total non-current liabilities 983.4 915.5 Cash and cash equivalent 192.9 206.8 Current portion of interest bearing debt 210.6 310.6 Other current assets 118.2 132.6 Other current liabilities and derivatives 102.2 105.7 Total current assets 311.1 339.5 Total current liabilities 312.8 416.4 Total assets 1 961.4 1 983.9 Total equity and liabilities 1 961.4 1 983.9 • Balance sheet effect on Rotterdam transaction will increase cash & cash equivalents by around USD 88 mill in 4Q18. Investments in associates and JVs to be reduced by the equivalent amount • Increased short-term debt mainly due to September 2019 bond re-classified as short-term debt 1. Equity method * New leasing standard (IFRS 16) to be implemented from January 2019. We have done a simulation on how this will effect figures of Odfjell SE in note 1 of our quarterly report 6

Financials Cash flow – 30.09.2018 – Odfjell Group 1 1Q18 2Q18 3Q18 FY17 Cash flow , USD mill Net profit (12.5) (119.9) (30.9) 83.8 Adjustments 22.2 23.7 18.4 100.2 Changes in working capital 2.8 (2.4) (16.9) 5.7 Other (2.0) 118.4 33.5 (135.7) Cash flow from operating activities 10.5 19.8 4.1 54.0 Sale of non-current assets - - 4.0 Investments in non-current assets (83.4) (48.5) (18.3) (173.2) • Cash flow from operating activities of USD 2.8 mill during the quarter. Changes in working capital the Dividend/other from investments in Associates and JV’s - - - 117.1 main deviation to 2Q18 Other (0.9) 4.8 (1.0) 26.5 • New interest bearing debt includes new senior Cash flow from investing activities (84.2) (43.8) (19.3) (25.6) unsecured bond issue concluded in September New interest bearing debt (net of fees paid) 78.0 119.8 64.7 343.1 Repayment of interest bearing debt (28.8) (69.8) (34.4) (310.4) Dividends - (14.6) - (13.9) Other (1.4) (0.1) - (5.7) Cash flow from financing activities 47.8 35.4 30.3 13.1 Net cash flow* (25.2) 11.5 13.9 41.2 1. Equity method 7 2. * After FX effects

Financials Bunker expenses – 30.09.2018 – Odfjell Tankers • Our toal bunker costs has seen a modest increase the last 45 12 months despite a large increase in bunker prices +8% • Bunker adjustment clauses will hedge 60% to 65% of our bunker consumption based on our contract portfolio 40 3 rd party tonnage involves pool vessels that is included in • our P&L due to accounting rules, these costs are passed 35 on to the shipowner • Our contracts and a more fuel efficient fleet have USD mill contributed to mitigate bunker cost increases through 30 2018 42.9 41.0 40.4 39.7 39.8 25 Average Platts 3.5% FOB Rotterdam USD per metric tonne 500 20 +43% 424 401 400 354 336 296 15 300 3Q17 4Q17 1Q18 2Q18 3Q18 43.7 50.0 Gross bunker cost 35.9 39.9 42.6 200 - - Financial hedging (0.4) (0.6) - 100 Adj. Clauses 4.2 1.7 (1.0) (1.9) (4.2) 3 rd party vessels - 0.0 (1.2) (2.0) (3.0) 0 39.8 42.9 3Q17 4Q17 1Q18 2Q18 3Q18 Net bunker cost 39.7 41.0 40.4 8

Financials Debt development – Corporate and chemical tankers Bond Planned vessel financing Balloon Leasing/sale-leaseback Secured loans 150 Refinanced • Issued new USD 60 mill bond to Scheduled partly refinance USD 77 mill repayments and 100 bond maturing Dec 18 planned refinancing, • New bond to lower interest USD mill 50 expenses by 2.1 mill per year 0 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 Repayment Planned vessel financing Ending balance year-end 1 600 • Strong support from our 1 400 relationship banks for 1 200 refinancing 1 000 Gross debt 800 • Current amortization and ending balance, 600 1 166 refinancing plan shows USD 1 128 1 092 1 025 USD mill 400 103 mill lower debt by 2021… 200 0 • … However, plan remains on -200 reducing leverage further -400 2018 2019 2020 2021 9