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October 2020 Corporate Presentation – Euronav NV

Euronav NV · Oct 30, 2020 · 51 slides

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Slides

  1. October 2020 Corporate Presentation – Euronav NV – slide 1
    INVESTOR PRESENTATION K BC SUSTAINABILI TY CON FEREN CE - OCTOBER 2020 1
  2. October 2020 Corporate Presentation – Euronav NV – slide 2
    EURONAV EURONAV WHO WHO WE ARE WE ARE The worlds largest, independent quoted crude tanker platform 45 VLCC incl. 4 N/B 25 Suezmax* International company internationally connected Av Age Av Age Headquarters in Antwerp 7.4 Yrs…
  3. October 2020 Corporate Presentation – Euronav NV – slide 3
    WHO WE ARE LIQUIDITY FOCUS Repayment schedule and RCF reductions Balance sheet liquidity June 2020 1086m 600 1200 806 Millions 1000 500 800 + 270 m outstanding 1086 capex m 400 600 400 280 300 200 0 200 Cash…
  4. October 2020 Corporate Presentation – Euronav NV – slide 4
    WHO WE ARE TWO YEAR LIQUIDITY RUNWAY & BALANCE SHEET STRENGTH 56% 1200 54% 1000 52% 1994to market leverage 800 m available liquidity 50% 48% 600 % marked 46% 2011 1990 1994 2017 2017 2013…
  5. October 2020 Corporate Presentation – Euronav NV – slide 5
    FSO 7 years +5 years WHO WE ARE OPERATIONAL LEVERAGE 1,188 Each 5,000 uplift in Long-term 20 years both VLCC and Suezmax rates improves net niche market revenue and EBITDA by 108mm 540 324 108 BASE +5,000 +15,000 +25,000…
  6. October 2020 Corporate Presentation – Euronav NV – slide 6
    TANKER MARKET STRUCTURE Seasonal Few customers, lots of suppliers Source: Clarksons 48 Quarterly average Thousands 46 VLCC rate 1990-2019 Traders 44 42 40 38 36 34 32 Oil Refiners 30 Companies Q1 Q2 Q3 Q4 Cyclical…
  7. October 2020 Corporate Presentation – Euronav NV – slide 7
    CURRENT MARKET CONDITIONS 8
  8. October 2020 Corporate Presentation – Euronav NV – slide 8
    TANKER MARKETS ARE SEASONAL 30 YEAR RECORD IMPLIES RATE LOW IN MID SEPT 60,000 55,000 50,000 Average VLCC spot rate since 1990 45,000 40,000 35,000 30,000 25,000 20,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct…
  9. October 2020 Corporate Presentation – Euronav NV – slide 9
    CRUDE DEMAND RECOVERY FORECAST TRAJECTORY DEPENDENT ON COVID IMPACT & TRANSPORTATION RECOVERY 105 102.1 102.4 101.0 M bpd EIA global oil consumption data and forecast 100 99.4 98.6 98.6 98.2 97.1 97.4 96.6 96.7 96.4 96.0…
  10. October 2020 Corporate Presentation – Euronav NV – slide 10
    DEMAND FOR OIL TRANSPORT HEAVY SO RECOVERY LIKELY PROLONGED 45 40 35 Oil demand m bpd by sector 2018 30 25 20 15 10 5 0 Road transport Aviation & Shipping Industry & Petrochemicals Buildings & Power Other…
  11. October 2020 Corporate Presentation – Euronav NV – slide 11
    CRUDE DEMAND RECOVERY LAST TIME WHAT HAPPENED IN 2008/9 FINANCIAL CRISIS Recovery took time globally Source: IEA 12
  12. October 2020 Corporate Presentation – Euronav NV – slide 12
    PEAK OIL DEMAND HERE ALREADY TRAJECTORY SUGGESTS FLAT TO 2025 BP ENERGY REVIEW - PEAK OIL DEMAND WILL EXPERIENCE WORSE THAN THIS FOR FULL YEAR 2020 100 98 96 Global oil demand m bpd 94 92 90 88 86 84 2015 2018…
  13. October 2020 Corporate Presentation – Euronav NV – slide 13
    STORAGE DISRUPTION DID NOT MATERIALISE Source: Clarksons 14
  14. October 2020 Corporate Presentation – Euronav NV – slide 14
    FLOATING STORAGE AN INEXACT SCIENCE AND STILL NEEDS TO UNWIND 400 excess or market storage 350 = 98m bbls 300 250 242m bbl m bbls storage 28 Sep 2020 200 150 146m bbl start 2020 100 50 0 VLCC Suezmax…
  15. October 2020 Corporate Presentation – Euronav NV – slide 15
    FLOATING STORAGE OVERHANG IS REAL BUT LIMITED 120 100 80 28 VLCC No of Vessels 60 40 20 Suezmax 20 20 Aframax 0 VLCC Suezmax Aframax Source: Clarksons 16
  16. October 2020 Corporate Presentation – Euronav NV – slide 16
    VLCC - DISRUPTION REMAINS POSITIVE BUT LESS IMPACTFUL 0 -5 -10 -15 -20 -25 -30 -35 -40 -45 -50 Iranian Perm Storage Vz trade Market storage China congestion Ocean tankers Aug 8 2020 Sept 28 2020 Source:…
  17. October 2020 Corporate Presentation – Euronav NV – slide 17
    CRUDE SUPPLY OPEC CUTS VERSUS USA RESILIENCE OPEC AG EXPORTS REMAIN CHALLENGING US CRUDE EXPORTS RESILIENT AT 3M BPD 20,000 5,000 14,000 19,000 4,500 12,000 18,000 4,000 10,000 US crude production m bpd 17,000 3,500…
  18. October 2020 Corporate Presentation – Euronav NV – slide 18
    VESSEL SUPPLY CONTRACTING VERY LIMITED AND BELOW HISTORICAL RUN RATE 30 28 25 21 20 16 15 12 10 5 0 -5 -10 -15 Jan-2020 Feb-2020 Mar-2020 Apr-2020 May-2020 Jun-2020 Jul-2020 Aug-2020 Total 2020 Avg since…
  19. October 2020 Corporate Presentation – Euronav NV – slide 19
    VESSEL PRICES UNDER PRESSURE 120 100 80.00 80 m 60 40 20 0 VLCC 5 year old VLCC new build Source: Clarksons 20
  20. October 2020 Corporate Presentation – Euronav NV – slide 20
    TIME CHARTERS REMAINS AN ILLIQUID MARKET DESPITE STORAGE FRENZY 25 20 No of longer time charters agreed 15 10 5 0 6m-12m 12m-24m 24m+ 6m-12m 12m-24m 24m+ VLCC Suezmax 2019 2020 Source: Bloomberg 21
  21. October 2020 Corporate Presentation – Euronav NV – slide 21
    CRUDE INVENTORY EIA FORECAST BACK TO PRE COVID 19 LEVELS END 2021 3500 45 3400 3300 40 OECD crude inventory bbls k (EIA) EIA days of demand for inventory 3200 3100 35 3000 2900 30 2800 2700 25 2600 2500 20…
  22. October 2020 Corporate Presentation – Euronav NV – slide 22
    CONTANGO REMAINS A SUPPORTIVE FEATURE FOR NOW 6 month Brent contango based on spot and 6 month forward price VLCC breakeven* per day (nominal) 60k 30k *does not include insurance & other costs for break even Source:…
  23. October 2020 Corporate Presentation – Euronav NV – slide 23
    FUEL SPREADS CONTINUE TO CONTRACT Oil price Fuel Spread for 2020 Fuel Spread for 2021 Source: Bloomberg 24
  24. October 2020 Corporate Presentation – Euronav NV – slide 24
    VESSEL SUPPLY DYNAMIC POSITIVE MEDIUM & LONG TERM DRIVER 25
  25. October 2020 Corporate Presentation – Euronav NV – slide 25
    VESSEL SUPPLY BALANCE & OUTLOOK STRUCTURALLY IMPROVING Increasingly restricted financing CONTRACTING NEW + new technology to meet VESSELS environmental targets cap orders ORDER BOOK VLCC /Fleet = 8% Suezmax /Fleet = 10% ORDER…
  26. October 2020 Corporate Presentation – Euronav NV – slide 26
    LITTLE CONTRACTING AND ORDER BOOK AT 20 YEAR LOW 140,000 60 of VLCC ordered & Orderbook as % of fleet 120,000 50 100,000 40 VLCC rates 80,000 30 60,000 20 40,000 10 20,000 0 0 Orderbook as % of fleet No…
  27. October 2020 Corporate Presentation – Euronav NV – slide 27
    NEWBUILDING ORDERS CONSTRAINED NEWBUILDING CONTRACTS RISING BARRIERS ORDER BOOK CURRENTLY 23 YR LOW 60 FINANCING BANKS & CAPITAL 50 MARKETS 40 REGULATION IMO 2030, BASEL IV 30 20 TECHNOLOGY IN FUEL PROPULSION 10…
  28. October 2020 Corporate Presentation – Euronav NV – slide 28
    FLEET AGEING FLEET AGE BACK AT LEVELS NOT SEEN SINCE 2002 Large tanker average age 10 years of age last seen in 2002 10.5 10.0 Average Age of Global Fleet 9.5 9.0 8.5 8.0 7.5 7.0 VLCC Fleet - Average Age…
  29. October 2020 Corporate Presentation – Euronav NV – slide 29
    LARGE TANKER SHIPPING REGULATED 6 5 1.5 100% utilisation m cost of special surveys 4 1.5 1.5 3 1.5 1.5 2 4 3.25 2.5 1 2 1.5 0 Year 5 - Spec Survey1 Year 10 - Spec Survey2 Year 15 - Spec Survey3 Year 17.5 -…
  30. October 2020 Corporate Presentation – Euronav NV – slide 30
    25-21 yrs 3% 20-16 yrs 18% VLCC FLEET STRUCTURE 15-11 yrs 10-6 yrs 21% 28% 5-0 yrs 30% Orderbook 8% Current fleet 80 18% survey pool Under construction 70 60 50 of VLCCs 40 65 68 30 59 19 51 49 47 50 20 39…
  31. October 2020 Corporate Presentation – Euronav NV – slide 31
    29-21 yrs 8% 20-16 yrs 19% SUEZMAX FLEET STRUCTURE 15-11 yrs 10-6 yrs 25% 23% 5-0 yrs 25% Orderbook 10% 60 Current fleet 18% survey pool Under construction 50 40 of VLCCs 30 50 44 43 44 20 37 28 26 14 23 25…
  32. October 2020 Corporate Presentation – Euronav NV – slide 32
    KEY SUPPLY ISSUE POTENTIAL CATALYSTS FROM 186 SURVEYS NEXT 2 YEARS Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Total % of fleet Over 20 years 7 5 8 17 9 11 4 18 79 10% Over 17.5 years 14 20 13 29 14 17 7 28 142 18%…
  33. October 2020 Corporate Presentation – Euronav NV – slide 33
    SHIPOWNERS DILEMMA Illustrative maths older vessels have lower addressable market Scrap Scrap Revenue Factor in Cash BE Special VLCC Today VLCC over 50% 15k Survey Net Return 900 days utilisation Value m* Value m* Rate m m 900 days m…
  34. October 2020 Corporate Presentation – Euronav NV – slide 34
    SCRAPPING OUTLOOK STEEL PRICES RISING - FORECAST TO REMAIN HIGHER 5000 22 20 4500 Steel price composite index CNY/tonne 18 4000 VLCC scrap price m 16 3500 14.7 14 3000 12 2500 10 2000 8 Composite Steel…
  35. October 2020 Corporate Presentation – Euronav NV – slide 35
    SCRAPPING VLCC RATES GO BELOW P&L BREAK EVEN = 5% FLEET DEPARTS VLCC fleet 804 start of year = 40 VLCC or 53 VLCC equivalents 9% 30,000 8% 25,000 7% % of VLCC fleet scrapped 6% 20,000 VLCC rates 5% 15,000 4% 3%…
  36. October 2020 Corporate Presentation – Euronav NV – slide 36
    LARGE TANKER RE-SIZING WHAT COULD THAT MEAN State of play end 2019 Global IEA Seaborne Required Required IEA Crude VLCC Trading Seaborne Demand Trade VLCC Resizing Demand Fleet = Crude m bpd m bpd fleet vessels 99.9m bpd 742 40m…
  37. October 2020 Corporate Presentation – Euronav NV – slide 37
    OUTLOOK TANKER MARKET IN TRANSITION PHASE Demand for Supply Vessel Euronav Oil Ton miles Balance of Oil Supply sheet Q4 19 Rating Restrictions lower OPEC+ driving US export growth Orderbook to fleet Liquidity of 1bn Q2…
  38. October 2020 Corporate Presentation – Euronav NV – slide 38
    SUSTAINABILITY AT EURONAV 39
  39. October 2020 Corporate Presentation – Euronav NV – slide 39
    SHIPPINGS POSITIONING ON EMISSIONS IN STRONG RELATIVE POSITION Shipping low relative emissions Air 425 Road 80 2.7% of global CO2 emissions Rail 35 Shipping 5 0 50 100 150 200 250 300 350 400 450 gCO2/ton-km(1,2,3)…
  40. October 2020 Corporate Presentation – Euronav NV – slide 40
    AND CRUDE IS CENTRAL TO THE ENERGY TRANSITION Crude remains core part of energy mix IEA forecast crude expansion to 2040 120 Million bpd consumption estimate by IEA 4.3% 6.4% 100 13 12 9 5.0% 33.1% 80 13 23 60 18 16 12…
  41. October 2020 Corporate Presentation – Euronav NV – slide 41
    SHIPPING ALREADY HAS TRACK RECORD IMPROVING TRAJECTORY IN POLLUTION INCIDENCES 30 25 No of spills above 700t from 1970 20 15 10 5 0 1970-9 1980-9 1990-9 2000-9 2010-9 Source: ITOPF - International…
  42. October 2020 Corporate Presentation – Euronav NV – slide 42
    AND ON MARINE LIFE AND EMISSIONS SINGLE HULL TO DOUBLE HULL BALLAST WATER TREATMENT IMO 2020 85% CUT TO SO2 TRANSITION SYSTEMS EMISSIONS Mandatory since Sept 2019 28% VLCC global fleet dwt 60% 72% 35% 5% 1990 1996…
  43. October 2020 Corporate Presentation – Euronav NV – slide 43
    WITH MORE TO COME A PATHWAY TO REDUCE CO2 BY 2030 Business as usual Emission pathway emissions in line with IMOs GHG strategy 2008 base year Emission Gap Zero emissions as soon as possible within the century Intensity 40%…
  44. October 2020 Corporate Presentation – Euronav NV – slide 44
    WHAT DOES ESG MEAN AT EURONAV 45
  45. October 2020 Corporate Presentation – Euronav NV – slide 45
    ESG ITS IN OUR DNA Supervisory Board 6 members 3 Male 3 Female Oversee all strategic actions 5 independents - No executive on Sup Board Management Board ESG & Climate Change Ctte 7 members 6 members 5 Male 2 Female 4 Male 2…
  46. October 2020 Corporate Presentation – Euronav NV – slide 46
    ESG CANNOT DO E WITHOUT STRONG AND ROBUST S&G Social Highest social equality standards across company and at boardroom level too 60% % of board = female 50% 40% 30% 20% Female board 10% Representation 0% 2014 2015…
  47. October 2020 Corporate Presentation – Euronav NV – slide 47
    ESG CANNOT DO E WITHOUT STRONG AND ROBUST S&G Governance 100% Euronav percentile ranking in shipping governance scorecard 95% 6th out of 52 in 2H 2020 90% 85% 80% 75% 70% H1 2016 H2 2016 H1 2017 H2 2017 H1…
  48. October 2020 Corporate Presentation – Euronav NV – slide 48
    CASE STUDIES EURONAV TARGETING BETTER THAN POSEIDON PRINCIPLES VLCC Trajectory Values 2.50 2.40 2.37 2.33 2.31 2.30 2.27 2.25 2.21 2.19 2.20 2.15 2.13 2.10 2.08 2.07 2.02 2.00 1.90 1.80 2020 2021 2022 2023 2024 2025…
  49. October 2020 Corporate Presentation – Euronav NV – slide 49
    CASE STUDIES PREMIUM ANTIFOULING PAINTS Potential relative emission savings in CO2 tons for a five year period 14000 12000 10000 8000 400k investment 300k investment 6000 4000 2000 0 VLCC Suezmax 50
  50. October 2020 Corporate Presentation – Euronav NV – slide 50
    ESG IN ACTION FINANCING Ship Financing the past Ship Financing the future Emission targets IMO All banks to agree 469m revolver Euronav and its bank partners finalize the first 713m sustainable linked loan on sustainable…
  51. October 2020 Corporate Presentation – Euronav NV – slide 51
    Environmental Accomplishments Sustainability needs all 3 E, S and G Tangible 2020-25 emission targets set to work effectively and not in isolation Emissions data since 17 Opportunities Social More disclosure, targets & route…

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