Scorpio Tankers Inc. · NYSE:STNG
Scorpio Tankers — Investor Presentation (September 2019)
29 slides from Scorpio Tankers's investor presentation, September 2019
Slide 1: Company Presentation
Company Presentation September 2019 1 1
Slide 2: Disclaimer and Forward-looking Statements
Disclaimer and Forward-looking Statements This presentation includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Scorpio Tanker Inc.’s (“Scorpio’s”) curre
Slide 3: Disclaimer and Forward-looking Statements (Cont'd)
Disclaimer and Forward-looking Statements (Cont’d) This presentation describes time charter equivalent revenue, or TCE revenue. TCE revenue is vessel revenue less voyage expenses (including bunkers and port charges) and is not a measure prepared in accordance with IFRS (i.e. a "Non-IFRS" measure). T
Slide 4: Company Overview
Company Overview Key Facts Fleet Profile 60 Scorpio Tankers Inc. is the world’s largest and youngest product tanker company Owned BB Chartered-In • Pure play product tanker offering all asset classes 50 • 109 owned ECO product tankers on the 3 water with an average age of 4.1 years • 10 bareboat cha
Slide 5: Investment Highlights
Investment Highlights Largest and Most Modern Product • 109 owned vessels with an average age of 4.1 years trading within the world’s largest product Tanker Fleet in the tanker platform with track record of outperforming the market World Largest Scrubber • Scorpio's ECO fleet well positioned as the
Slide 6: Largest and Most Modern Product Tanker Fleet Relative to Peers
Largest and Most Modern Product Tanker Fleet Relative to Peers Large, Modern Fleet Best Positions STNG Investors to Capture Market Recovery Largest & Most Modern Product Tanker Fleet Scorpio Average Age vs. Worldwide Fleet HM & MR LR1 LR2 Average Age 120 16 Scorpio Tankers Active Fleet 13.8 14 100 3
Slide 7: Scorpio Pools Have Consistently Outperformed Market
Scorpio Pools Have Consistently Outperformed Market • Scorpio’s trading platform Pool Performance ($/day) operates the largest product tanker fleet in the market $20,000 $15,000 • Commercial pools provide Scorpio Handymax $10,000 significant economies of $5,000 Tanker Pool scale (SHTP) $- Q2/16 Q3/1
Slide 8: Quarterly EBITDA Per Vessel
Quarterly EBITDA Per Vessel $1.80 $1.61 $1.60 $1.40 $1.27 $1.20 $1.08 $1.03 $1.03 (Millions $USD) $1.00 $0.95 $0.78 $0.80 $0.74 $0.64 $0.60 $0.60 $0.55 $0.50 $0.47 $0.45 $0.40 $0.37 $0.37 $0.35 $0.32 $0.24 $0.20 $0.00 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-1
Slide 9: Potential Cash Flow Generation
Potential Cash Flow Generation • Assuming spot rates of $30,000/day for HM/MR and $50,000/day for LR1/LR2 Company Per Share $35.0 $1,800 $1,600 $30.0 ($504.6) ($9.8) $1,400 OPEX, $25.5 Interest, $1,312.7 $25.0 Cash G&A $4.5 $1,200 $233.8 $21.0 $1,078.9 ($233.8) ($4.5) USD $ Millions $20.0 $2.9 Per S
Slide 10: Natural and Proactive De-leveraging
Natural and Proactive De-leveraging • From Dec-18 through July-19 the Company repaid ~$330 million of outstanding debt through scheduled principal repayments and the redemption of the Company’s 2019 baby bond and convertible bond Debt Reduction from Dec-18 through July-19 Debt Repayment Schedule thr
Slide 11: Scorpio Scrubber Installation Schedule
Scorpio Scrubber Installation Schedule Scrubber Installation Schedule MR LR1 LR2 95 93 80 38 70 38 58 36 32 12 12 30 7 35 7 17 7 43 45 37 6 31 7 21 4 12 1 1 3 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Source: Scrubber Installation schedule from Q1-19 & Q2-19 Company Earnings Release 11 11
Slide 12: Scrubber Economics
Scrubber Economics Rotterdam Forward Fuel Prices ($/MT)(1) Annual Scrubber Fuel Savings (2) HSFO 2020 Compliant Fuel (Scrubber Fitted) $200 MGO (0.1%) 2020 Compliant Fuels (Non Scrubber) $174.1 VLSFO (0.5% Straight Run) VLSFO 0.5% Blend (3.5% FO & ULSD) $160 $149.2 ($USD Millions) VLSFO 0.5% Blend (
Slide 13: Long Term Product Tanker Fundamentals
Long Term Product Tanker Fundamentals 13 13
Slide 14: Higher Spot TCE Rates in Every Month YoY
Higher Spot TCE Rates in Every Month YoY MR Average Earnings ($/day) LR2 Average Earnings ($/day) FY-18 FY-19 FY-18 FY-19 $30,000 $18,000 Jan-Aug FY-18 Avg: $8,419/day Jan-Aug FY-18 Avg: $13,006/day $16,000 Jan-Aug FY-19 Avg: $11,887/day Jan-Aug FY-19 Avg: $21,893/day $25,000 $14,000 $20,000 $12,000
Slide 15: One Year TC Rates Have Recovered
One Year TC Rates Have Recovered • One Year MR and LR2 TC rates have recovered from 2018, but are still below the historical average with ample room to grow given the strong supply/demand fundamentals One Year Time Charter Rates ($/day) $45,000 $40,000 $35,000 $30,000 ($/day) $25,000 $20,000 $15,000
Slide 16: Distillate & Ton Mile Demand Continue to Grow
Distillate & Ton Mile Demand Continue to Grow • Light & middle distillate demand has increased every year except 2008/2009 • Ton miles, the quantity of cargo multiplied by the distance it travels, has increased at a CAGR of 3.8% since 2000 Incremental Light & Middle Distillate Demand (1) Seaborne Pr
Slide 17: Limited Product Tanker Newbuilding Orders
Limited Product Tanker Newbuilding Orders Since 2000: • 133 product tankers have been ordered each year on average • 28 product tankers have been ordered YTD, making it third lowest year for newbuilding orders Product Tanker Newbuilding Orders MR LR1 LR2 450 431 400 78 350 67 300 255 (# of Vessels)
Slide 18: Record Low Product Tanker Orderbook as a % of Fleet
Record Low Product Tanker Orderbook as a % of Fleet Lowest Orderbook as a % of Fleet Since March 2000 Product Tanker 10K+ Orderbook % Fleet 5 Yr Avg 10 Yr Avg 25.0% 23.0% 21.0% 19.0% 17.0% 15.0% 13.0% 11.0% 9.0% 7.0% 7.1% 5.0% Source: Clarksons Research Services, September 2019 18 18
Slide 19: IMO 2020 Demand Catalyst for Products Market
IMO 2020 Demand Catalyst for Products Market • Marine fuel switch from non-compliant HSFO to low-sulfur products (like MGO) expected to add significant incremental demand for distillates that are transported on product tankers • Platts estimates a switch of 1.3 million b/d of new low sulfur fuel and
Slide 20: Seaborne Refined Product Exports
Seaborne Refined Product Exports Incremental (YoY) Increases in Seaborne Refined Product Exports (1) 2.5 2.0 2.0 1.5 1.5 1.4 1.3 1.3 1.0 1.0 1.0 0.9 0.9 0.8 (mb/d) 0.7 0.7 0.7 0.6 0.5 0.4 0.3 0.1 0.2 - (0.1) (0.2) (0.5) (0.5) (1.0) (2) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Slide 21: Supply to Outpace Demand in 2020
Supply to Outpace Demand in 2020 Historically Low Orderbook & IMO 2020 Demand Catalyst to Provide Favorable Supply/Demand Balance (1) 10.0% Product Tanker Net Fleet Growth Seaborne Refined Products Trade 8.4% 8.0% 7.2% 6.3% 6.0% 5.7% 4.9% 3.9% 4.2% 4.2% 4.0% 3.9% 2.6% 2.6% 1.8% 2.0% 2.0% 1.6% 0.8% 0
Slide 22: Fleet Age Profile Transitions into Normalized Cycle
Fleet Age Profile Transitions into Normalized Cycle • Due to the significant fleet expansion during the initial growth phase, a large number of vessels will soon turn 15 years and older • For example, including newbuilding deliveries, the % of the MR fleet that’s 15-19 years old will increase from 1
Slide 23: Appendix
Appendix Cccrrio 23
Slide 24: Product Tankers in the Oil Supply Chain
Product Tankers in the Oil Supply Chain • Crude Tankers provide the marine transportation of the crude oil to the refineries. • Product Tankers provide the marine transportation of the refined products to areas of demand. • Structural demand drivers in the product tanker industry: • US has emerged a
Slide 25: Product and Crude Tankers
Product and Crude Tankers Tankers “Dirty” “Clean” Crude Products Vessel VLCC Suezmax Aframax Panamax Handysize LR2 LR1 Hmx/MR Handysize (200,000 + (120,000 - (80,000 - (60,000 - (< 60,000 (80,000- (60,000- (25,000- (<25,000 Size DWT) 200,000 DWT) 120,000 DWT) 80,000 DWT) DWT) 120,000 DWT) 80,000 DWT
Slide 26: Product Tanker Specifications
Product Tanker Specifications IMO Classes I, II, & III IMO Class I Chemical IMO Class I refers to the transportation of the most hazardous, Tankers very acidic, chemicals. The tanks can be stainless steel, epoxy or marine-line coated. IMO Class II Chemical & Product Tankers IMO Class II carries Veg
Slide 27: New Design Features on Scorpio Product Tankers
New Design Features on Scorpio Product Tankers 27 27
Slide 28: Scrubber Fuel Savings
Scrubber Fuel Savings Consumption figures below assume that: • Scrubbers do not operate during any port activities • Each voyage has a load and discharge port in an ECA, i.e. scrubber does not operate in ECA waters Annual ECO Vessel Fuel Consumption (MT/year) (1) Sailing (Ballast & Laden) MR LR1 LR2
Slide 29: Fleet List
Fleet List Owned & Finance Leased Vessels Name Year DWT Type Name Year DWT Type Name Year DWT Type STI Comandante May-14 38,734 HM STI Soho Dec-14 49,990 MR STI Broadway Nov-14 109,999 LR2 STI Brixton Jun-14 38,734 HM STI Tribeca Jan-15 49,990 MR STI Condotti Nov-14 109,999 LR2 STI Pimlico Jul-14 38
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