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…
Proven track record of management and acquisitions/disposals 180 160 140 120 Purchased 15 VLCCs from Maersk for 980M 100 (mm USD) +4 +16 80 +1 +4 +3 +15 +4 +1 +1 60 +1 +1 40 20 0 2000 2001 2002 2003 2004…
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…
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…
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…
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…
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 50 OECD demand 45 40 Non-OECD demand overtaking OECD…
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 3 Arabian Gulf to China 21 days 5,500 miles West Africa to USA 19 days 5,000 miles West Africa to…
The result: Our thesis is significant need for larger ships Stage 1 Cyclical recovery underway Stage 2 - Structural shift continues to 2014-2016 support momentum 2017-2020 VLCC supply DISLOCATION in crude transportation routes DRIVING…
How do lower oil prices affect tankers VLCC rates not correlated with oil price Potential to reverse 7 years of demand destruction China demand strategic as well as organic Lower bunker costs = Higher tanker earnings China…
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…
Freight rates High volatility & price inelasticity Daily average tankers freight rate over 10 years 250000 200000 Average TCE 2004-2008 = 71,000 per day 150000 USD/DAY 100000 50000 Notional Break Even 0…
Financial Overview & Q4 update
Track record of shareholder value creation and distributions Historical earnings and dividends (mm) 700 657 100.000 90.000 600 80.000 500 70.000 432 402 60.000 400 372 344 303 50.000 300 260 40.000 237 209 218 187 195…
Full Year and Q4 Operating days & rates Operating days Total fleet operating days 2014: 14,433 Total fleet operating days 4Q14: 4,211 Rates 2014 2013 Q4 FY Q4 FY VLCC operated in TI Pool 31,665 27,625 27,900 20,450 VLCC under TC…
Conclusion
Robust industry fundamentals driving freight rates CONTANGO Take capacity out of the market Already started on 20 ships (2010: 60 ships) OIL PRICE FALL Contracts between TCE rates higher as 6 months and 1 fuel is cheaper…
Appendix
Asset values still below long-term medians VLCC Suezmax 180 (mm) Newbuild 5 Year Old (mm) Newbuild 5 Year Old 10 yr avg 115 94 10 yr avg 71 65 160 15 VLCCs 5 yr avg 98 71 5 yr avg 62 50 acquired 140 1 yr avg 98 72 1 yr avg 64 50…
Potential disruptive factors Slowdown is relative China - slowdown Strategic crude stockpile to grow to 2016 Refinery plans in China well advanced Geopolitical risk tends to be neutral to positive for shipping Pipelines…
Long Established Player Peter G. LIVANOS Chairman of Euronav January: Acquisition 52 vessels Chairman of Gaslog, Drylog and of 15 VLCC 13.0 mm dwt Tanklog Added 5 Suezmax & 3 VLCC newbuilds 2014 Marc SAVERYS Vice Chairman of…
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…
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