Pareto Conference Investor Presentation September 2015
Forward looking statements 1
Euronav Largest independent quoted tanker company in world Additional increase but limited by historical standards IEA forecast 1m bpd growth every year to 2020 Order book at 16% of fleet all time low of 13% Lower oil price has…
Potential for Powerful Cash Generation Euronav is well positioned for strong cash flow generation Breakeven (including debt service): 27,000 for VLCC - opex 8,000 22,000 for Suezmax - opex 7,400 FSOs generate a consistent, high…
1 Demand 1m bpd = demand for 30-40 VLCCs pa Demand for Oil has ALWAYS been robust Lower Oil Price can reverse 7 years demand destruction Source: Citi Demand consistently upgraded during 2015 Refinery expansion in Asia & Middle…
2 Vessel Supply VLCC order book today & recent progression Source: Clarksons + Poten 5
2 Vessel Supply Suezmax order book today & recent progression Source: Clarksons + Poten 6
..but financing more difficult now and order book manageable New era of financing restrictive Order book assessment not as strong as first looks Traditional Captive fleet Private equity Unknown* Total Ownership Shipping (China, Saudi…
3 - Supply of Oil = more cargoes = more demand for shipping Historically VLCC rates close correlation with Output Brazil Oil Production at record highand growing Source: Bloomberg Source: Gibsons Non OPEC output continues to…
4 - Structural expansion - Increased ton miles given trade shifts 1 5 4 6 2 New order being established in transportation routes 3 Arabian Gulf to China 21 days 5,500 miles West Africa to USA 19 days 5,000 miles West…
4 - Structural expansion - Increased ton miles given trade shifts Ton miles driving Suezmax too China sourcing diversified increasing ton miles Source: DNB Demand for VLCCs on each 1m bpd Source: SEB Source:…
5 - Other factors Iran, asset/earnings correlation, contango Iranian fleet re-admittance to global fleet neutral impact Dislocation suggests asset values undervalued 17 VLCC Fleet Been Trading since 2012 to China, India, Taiwan…
6 China demand robust with structural support China important but demand now diversified Currency moves dwarfed by impact of lower crude price Spr & teapot structural base Source:IEA Source: Bloomberg China Oil demand robust…
Euronav substantial increase in liquidity 13
What does it all mean Tanker sector will remain volatile 14
What does it all mean Sustained growth for large tankers to 2020 IEA forecasts at least 1m bpd growth pa to 2020 1m bpd currently equates to demand for around 30 VLCCs depending on trade route Likely demand Demand for 30-40 VLCCs…
Company overview
Chartering strategy successful now and in past - 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…
Maximizing value through size Tankers International Pool Fragmented Global VLCC Fleet Top 10 owners Overview of the Tankers International Pool 60 20 + 40 Only owners pool for VLCCs a cost center No value leakage; no…
FSO Offshore market Opportunistic capability Al-Shaheen field 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…
Potential disruptive factors Slowdown is relative base effect on absolute numbers is key China - slowdown Strategic crude stockpile to grow 2015/2016 Refinery plans in China well advanced & teapot reforms started Part of fleet been…
Conclusion EURONAV the largest, independent quoted crude tanker company in the world BALANCE SHEET strengthened and simplified with over 3bn modern fleet; leverage at 46%* CYCLE Euronav well placed with over 75% spot exposure &…
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