Cmb.tech Nv · EURONEXT:CMBT
Cmb.tech Nv — Euronav — Investor Presentation (June 2015)
20 slides from Cmb.tech Nv's investor presentation, June 2015
Slide 1: Investor Presentation June 2015
Investor Presentation June 2015
Slide 2: Forward looking statements
Forward looking statements 1
Slide 3: Euronav – Largest independent quoted tanker company in world
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 stimulated demand •Financing of new builds much reduced •Demand
Slide 4: Potential for Powerful Cash Generation
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 quality income stream – $52mm of EBITDA ■ Dividend policy – to
Slide 5: Demand – 1m bpd = demand for 30 VLCC pa
1 – Demand – 1m bpd = demand for 30 VLCC pa Top line demand modest but consistent outlook Lower Oil Price can reverse 7 years demand destruction Source: IEA China Oil demand robust – ignore % changes! Refinery expansion in Asia & Middle East a key driver 1,200 Current Market Oil @ $80 Oil @ $60 1,00
Slide 6: Vessel Supply – VLCC order book today & recent progression
2 – Vessel Supply – VLCC order book today & recent progression Jan/2015 Mar/2015 Apr/2015 Jun/2015 2015 8 15 15 17 2016 23 28 28 28 5
Slide 7: Vessel Supply – Suezmax order book today & recent progression
2 – Vessel Supply – Suezmax order book today & recent progression Jan/2015 Mar/2015 Apr/2015 Jun/2015 2015 3 3 -2 -4 2016 12 12 15 22 6
Slide 8: ..but financing more difficult now and order book manageable
..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 etc) Companies Q2 2015 0 4 0 1 5 Q3 2015 1 1 1 5 8 Q4 2015 2 0
Slide 9: Supply of Oil = more cargoes = more demand for shipping
3 - Supply of Oil = more cargoes = more demand for shipping Historically VLCC rates close correlation with Output Brazil Oil Production at record high…and growing Source: Bloomberg Source: Gibsons Non OPEC output continues to grow More cargoes – Atlantic > East on VLCC Source: Mcquilling 8
Slide 10: Structural expansion - Increased ton miles given trade shifts
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 Africa to China 33 days 9,650 miles Latam to China 44 days 11,500 miles USA no long
Slide 11: Structural expansion - Increased ton miles given trade shifts
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: Mcquilling 10
Slide 12: Other factors – Why the Earnings and Asset price dislocation?
5 - Other factors – Why the Earnings and Asset price dislocation? Asset prices not kept pace with earnings Dislocation suggests asset values undervalued $180 R² = 0.9028 $160 VLCC 5-Yr Old Vessel Values $140 $120 Market in Nov $100 $80 Current M arket $60 $40 $- $10 $20 $30 $40 $50 $60 $70 $80 VLCC
Slide 13: What does it all mean? Tanker sector will remain volatile
6 - What does it all mean? Tanker sector will remain volatile Source: Clarksons to June 8th 2015 12
Slide 14: What does it all mean? Sustained growth for large tankers to 2020
6 - 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 Demand for 30 Demand VLCCs pa to • China, India economic & Middle East/Asia refinery build out und
Slide 15: Company overview
Company overview
Slide 16: Chartering strategy successful now and in past - upside leverage
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 the cycle Look to maximize earnings through combining high-qua
Slide 17: Maximizing value through size – Tankers International Pool
Maximizing value through size – Tankers International Pool Fragmented Global VLCC Fleet – Top 10 owners Overview of the Tankers International Pool 40 60 20 Only owners pool for VLCCs – a cost center No value leakage; no commissions Leading spot market oriented VLCC pool in which ship owners wi
Slide 18: FSO – Offshore market – Opportunistic capability
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 service contract in Qatar delivering $52mm EBITDA annually until 201
Slide 19: Potential disruptive factors
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 • Geopolitical risk tends to be neutral to positive for shipping Pipelines • Infrastructure build costly
Slide 20: Conclusion
Conclusion EURONAV – the largest, independent quoted crude tanker company in the world BALANCE SHEET – strengthened and simplified with over $3bn modern fleet; leverage at 40% CYCLE – Euronav well placed with over 75% spot exposure & strong management team NYSE LISTING – long term strategic