Cmb.tech Nv · EURONEXT:CMBT
Cmb.tech Nv — Euronav — Marine Money Week 2016
30 slides from Cmb.tech Nv's conference presentation, June 2016
Slide 1: Investor Presentation – Marine Money
Investor Presentation – Marine Money June 2016 1
Slide 2: Forward Looking Statements
Forward Looking Statements Matters discussed in this presentation may constitute forward-looking statements under U.S. federal securities laws, including the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect the Company’s current views with respect to future events
Slide 3: Euronav at a Glance
Section 1 Euronav at a Glance 2 3
Slide 4: Euronav – Largest Tanker Company in the World
Euronav – Largest Tanker Company in the World CURRENT FLEET – TOTAL 53 VESSELS – 13.1 MM DWT WHO WE ARE 1 V – PLUS (1) 2 FSO 20 SUEZMAX 30 VLCC Over 441,000 DWT 380k barrels Leading pure-play tanker company 150,000 – 165,000 DWT Up to 330,000 DWT with best-in-class operating platform Only 4 in world
Slide 5: Euronav – Exposed to Structural Growth in Demand for Oil
Euronav – Exposed to Structural Growth in Demand for Oil INCREMENTAL VLCC DEMAND FOR 1.2 MBPD ADDITIONAL EXPORTS = 36 – 49 VLCC PER YEAR 1.2 mbpd x 365 days = 440m barrels 440m barrels / 2m capacity per VLCC = 220 cargoes Arabian Gulf to China 21 days 220 cargoes / 4.5 annual journeys for VLCC (1) =
Slide 6: Euronav - Most Liquid VLCC/Suezmax Player
Euronav - Most Liquid VLCC/Suezmax Player LIQUIDITY GIVES SHAREHOLDERS OPTIONALITY More Trading Hours Euronext Brussels: 9 a.m. – 5. 30 p.m. (CET) Ticker Symbol: EURN NYSE: 9.30 a.m. – 4 p.m. (EST) TOTAL TRADED VALUE OF EURONAV US AND BB SHARES (SAME SHARE) - EURN US EQUITY & EURN BB EQUITY 100% Ave
Slide 7: Shipping – access to finance is key in the new normal
Shipping– access to finance is key in the “new normal” Tanker sector remain CYCLICAL but……………… Financing becoming STRUCTURALLY restricted 14% 100 12% 95 % growth YOY VLCC fleet m barrels consumed per day 10% 90 8% 85 6% 80 4% • “New Normal” financing restricts amount of newbuilding orders – less cyc
Slide 8: Industry Dynamics
Section 2 Industry Dynamics 5 8
Slide 9: Oil Tankers – Five Key Drivers
Oil Tankers – Five Key Drivers Demand for Oil Supply of Oil Ton Miles Supply of Vessels Financing ROBUST EXCESS BALANCED MANAGEABLE NEW BARRIER TO ENTRY • Oil demand growing • Trade lines established • Order book largely • Market share strategy industrial not • New regulations last 25 years with Yea
Slide 10: Demand – steady and robust outlook
Demand – steady and robust outlook 1 Demand for Oil GLOBAL OIL DEMAND 1990-2015 (MB/D) AND AVERAGE OIL PRICE Average oil demand growth 1990-2015 =1.1 mbpd Grow almost always 3.5 3.1 3.1 95.5 2015 oil demand growth Million barrels per day 3 Est. = 1.8 mbpd 2.5 2 95 1.9 2 1.8 Est. 1.7 1.6 1.5 1.5 1.
Slide 11: Oil Price – Impact on Demand
Oil Price – Impact on Demand 1 Demand for Oil OIL PRICE OUTLOOK (ILLUSTRATION) 110 100 Lack of disruption/market share game Demand Destructive Iran and other supply remain high Shale - as swing producer increases 2009 - 2014 proved in this oil 90 price range that demand was destroyed 80 70 Neutral 6
Slide 12: China & Oil Tankers – Four Reasons for Confidence
China & Oil Tankers – Four Reasons for Confidence 1 Demand for Oil OPERATIONAL Chinese oil imports (2006-2016) • BASE EFFECT – China consumes ECONOMY 1 11.8 mbpd (source: IEA) so small 1 % change means large no of barrels 3% growth 4% growth 5% growth 210k bpd 280k bpd 350k bpd 600 Additional 110
Slide 13: VLCC Order Book Dynamics
VLCC Order Book Dynamics 4 Supply of Vessels VLCC – ADDITIONS, SCRAPPING, REMOVALS IMPLIED BUFFER 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1=12 Q1=12 Q3=7 Q2=4 Q2=7 Q4=19 Q3=4 Q3=7 60 Q4=25 Q4=10 40 62 26 54 49 45 20 36 30 24 23 19 2 0 -5 -8 -7 -8 -13 -11 -1 -25 -22 -8 -10 -20 -16 -48 -2
Slide 14: SUEZMAX Order Book Dynamics
SUEZMAX Order Book Dynamics 4 Supply of Vessels SUEZMAX – ADDITIONS, SCRAPPING, REMOVALS IMPLIED BUFFER 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 55 Q1=16 Q2=10 45 Q3= 4 Q4=15 Q1=3 35 Q2=4 Q3=2 Q1=3 Q4=1 Q2=4 25 Q3=10 45 45 Q3=2 43 Q4=12 38 Q4=1 15 22 27 5 8 10 10 5 4 -3 -7 -7 -6 -7 -5 -9
Slide 15: Scrapping Decision Making Process
Scrapping Decision Making Process 4 Supply of Vessels TANKER SHIPPING – A HIGHLY REGULATED INDUSTRY Costs of surveys increase during tanker life leading to scrapping decision USD 4m Average cumulative SS #5 survey cost 100% utilisation (17.5 21 years) USD 3.25m > USD 7.25 mm IS Dry #4 USD 2.5m Me
Slide 16: VLCC fleet age profile
VLCC fleet age profile 4 Supply of Vessels VLCC TRADING FLEET AGE PROFILE 70 Permanent idle/on storage Fleet <=2000 Fleet 2001-2016 On Order 60 50 17% No of Vessels 40 83% 30 17% 20 10 0 Year Total <=2000 2001-2016 On Order Clarkson order book adjusted for 12 orders = 1 unknown owner, 4 x STX, No 66
Slide 17: Oil supply high - shale the new swing producer
Oil supply high - shale the new swing producer 2 Supply of Oil WHO IS GOING TO MATERIALLY CUT? NEED CO-ORDINATION BETWEEN THE TOP 10 PRODUCERS = 60% WORLD SUPPLY MOST SHALE PRODUCTION KICKS IN AGAIN USD 50-60 FSU ex Kuwait 2.8 million barrels per day 12.0 Russia 2.9 U.S. shale crude and condensate p
Slide 18: Increasing Barriers to Entry
Financing Increasing Barriers to Entry 5 HUGE REDUCTION REGULATIONS PRIVATE SHIP OWNERS SHIPYARD IN SHIPPING FORCE EQUITY IN UNDER PRESSURE TO BANK LEVERAGE RETREAT PRESSURE RESTRUCTURE EXPOSURE DOWN & REDUCE Around USD 70bn CAPACITY • Banks lending • Other shipping withdrawn from shipping flexibili
Slide 19: Asset prices: Growth opportunity again?
Asset prices *: Growth opportunity again? 5 Financing driven lower due to “new normal” financing VLCC PRICES (2006-2016) 180 Average VLCC c. 2010-built Earnings VLCC 315-320K DWT Newbuilding Prices 140,000 Price in MUSD VLCC D/H 310K DWT 5 Year old Secondhand Prices 160 120,000 140 Contrarian trend
Slide 20: Our Strategy
EURO The ocean is our environment Section 3 oad . 7 “e Our Strategy
Slide 21: Maximizing Value Through Information
Maximizing Value Through Information BARRIER TO ENTRY – INFORMATION SIZE IS CRITICAL TO IMPROVE MARKET KNOWLEDGE Differentiate spot players vs industrial players 57 1 Ship Owner, 37 Vessels 2 Ship Owner, 52 NIOC, 37 China Merchants Grp, 36 Bahri, 36 3 Ship Owner, 27 39 18 COSCO Group, 32 Top 10 Owne
Slide 22: Capital allocation strategy
Capital allocation strategy CAPITAL ALLOCATION Strong balance sheet Leverage 1 • Maintain strong balance sheet • Target 30% to 50% leverage through cycle according to where we are in the cycle Capex Liquidity reserve 2 • No newbuilding capex • TWO years of operational liquidity • Approximately USD 2
Slide 23: Supplemental Materials
Section 4 Supplemental Materials 22 23
Slide 24: Appendix
Appendix MOST TANKER OWNERS HEAVILY EXPOSED TO OTHER SHIPPING ORDER BOOK AS % OF FLEET – MANAGEABLE 60 20++ VLCCs LNG 35% Containers 32% 50 VLCC Dry bulk 33% 15-19 VLCCs Suezmax 40 10-14 VLCCs 30 18% 5-9 VLCCs 20 16% 1-5 VLCCs 10 Source Clarksons 0 200 400 600 800 1000 0 Container Dry Bulk Product A
Slide 25: Appendix: China oil demand and imports
Appendix CHINA OIL DEMAND – VERY STREADY (UNLIKE GDP GROWTH) CHINA CRUDE OIL IMPORT DIVERSIFICATION CONTINUES 35 14 GDP growth (%) Source Bloomberg Imports (mbpd) 13 Russia 14% 30 Other 20% 12 25 11 Libya 1% Saudi Arabia 20 Kzakhstan 14% 10 1% Brazil 3% 15 9 Kuwait 4% 10 8 Venezuela Oman 11% 5 7 6%
Slide 26: Tanker shipping is….volatile
Tanker shipping is….volatile VLCC SPOT RATES (1997-2016) 200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 Date Average VLCC c. 2000-built Earnings $/Day Date Average VLCC c. 2010-built Earnings $/Day 26
Slide 27: Order Book – Logical Fleet Renewal – VLCC
Order Book – Logical Fleet Renewal – VLCC 4 Supply of Vessels ORDERS FROM INDUSTRIAL SHIPPING ARE DIFFERENT THAN ORDERS FROM SPECULATIVE SHIPPING National Oil Companies Traditional Ship Owners Chinese Ship Owners 2016 2017 2018 2019 Number of vessels delivered 20 15 10 19 16 14 14 12 5 9 5 4 0 1 1 2
Slide 28: Appendix - Order Book – Logical Fleet Renewal Suezmax
Appendix - Order Book – Logical Fleet Renewal 4 Supply of Vessels Suezmax ORDERS FROM INDUSTRIAL SHIPPING ARE DIFFERENT THAN ORDERS FROM SPECULATIVE SHIPPING National Oil Companies Traditional Ship Owners Chinese Ship Owners 2017 2018 2019 2016 Number of vessels delivered 35 30 25 20 15 31 10 5 12 2
Slide 29: Euronav Strategy - Powerful Cash Generation
Euronav Strategy - Powerful Cash Generation PRO FORMA FLEET EARNINGS CAPABILITY (EBITDA, $MM) (1) Next 12 Months Spot Days Exposure = 14,341 Days ($MM) 1,500 1,092 650 1,000 493 339 500 264 0 +$5,000 +$15,000 +$25,000 +$55,000 per day per day per day per day VLCC $25,000 $30,000 $40,000 $50,000 $80,
Slide 30: Suezmax fleet age profile
Suezmax fleet age profile SUEZMAX TRADING FLEET AGE PROFILE Permanent idle/on storage Fleet <=2000 Fleet 2001-2016 On Order 18% 50 45 40 35 No of Vessels 30 83% 25 20 15 10 17% 5 0 Total <=2000 2001-2016 On Order Clarkson order book adjusted for 11 orders = 2 unknown owner, 4 x STX, 5 old orders mad