INVESTOR PRESENTATION April 2014
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 and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. All statements, other than statements of historical facts, that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future, including, without limitation, the delivery of vessels, the outlook for tanker shipping rates, general industry conditions future operating results of the Company’s vessels, capital expenditures , expansion and growth opportunities, bank borrowings, financing activities and other such matters, are forward-looking statements. Although the Company believes that its expectations stated in this presentation are based on reasonable assumptions, actual results may differ from those projected in the forward-looking statements. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their obligations to us, the strength of the world economies and currencies, general market conditions, including changes in tanker vessel charter hire rates and vessel values, changes in demand for tankers, changes in our vessel operating expenses when the are delivered to us, including dry-docking, crewing and insurance costs, or actions taken by regulatory authorities, ability of customers of our pools to perform their obligations under charter contracts on a timely basis, potential liability from future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists. We undertake no obligation to publicly update or revise any forward-looking statement contained in this presentation, whether as a result of new information, future events or otherwise, except as required by law. In light of the risks, uncertainties and assumptions, the forward looking events discussed in this presentation might not occur, and our actual results could differ materially from those anticipated in these forward-looking statements. 1
Today’s presenters ● Appointed CEO in 2000 ● BOD/Executive Committee since 2003 Paddy Rodgers ● Served as CFO from 1998 – 2000 Chief Executive Officer ● CFO since 2008 ● Executive Committee since 2008 Hugo De Stoop ● Investor Relations from 2004 Chief Financial Officer ● Joined Euronav 2014 ● 20 years in capital markets Brian Gallagher ● Extensive buy side experience Head of Investor Relations 2
Euronav at a glance Overview ● Fully-integrated, established top quality provider of international maritime shipping ● Market capitalization: ~$1.3bn share price up 149% in past 12 months SUEZMAX VLCC V PLUS FSO 125,000-180,000 DWT Up to 320,000 DWT Over 441,000 DWT Stripped water capacity 380k barrels 1 Million barrels 2 Million barrels 3 Million barrels 2.8 Million barrels Fleet: 53 vessels 27 Vessel 23 count 1 2 Fleet average age: ~7 years age (yrs) Average ~12 ~12 ~8 ~6 One of the largest independent owners and operators of crude oil tankers in the world Note: Market data as of 04/15/14 3
Agenda ● Industry overview ● Company overview ● Financial overview ● Conclusion 4
Industry overview
Crude Oil tankers: High volatility market Daily average tankers freight rate over 10 years 100,000 SUPER CYCLE EVERY 6-7 YEARS 90,000 80,000 70,000 60,000 USD/DAY 50,000 PROFITABLE ZONE 40,000 30,000 20,000 10,000 Notional Break- Even 0 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 -10,000 Average VLCC 2000-built Average VLCC 2010-built Average Suezmax 2000-built Average Suezmax 2010-built 6
Factors affecting shipping demand: Demand for oil and Distance Global oil demand is growing … … and increasingly moving to non-OECD countries (mb/day) (mb/day) (mb/day) 50 25.0 120.0 Non-OECD demand 48 OECD demand 100.0 46 20.0 44 80.0 42 15.0 40 60.0 Non-OECD demand overtaking OECD 38 10.0 demand 40.0 36 34 5.0 20.0 32 0.0 0.0 30 2009 2010 2011 2012 2013E 2014E 2020E OECD Non-OECD Total World (rhs) United States China India European Union Source: BP historical figures, IEA World Energy Outlook 2013 forecast figures Source: IEA Oil Market Report and World Energy Outlook 2013 7
Demand for oil and shipping Recent development ● Next 2-3 years oil demand: China up 2mbd, other Asia up 1.6mbd ● European refineries closing: Export down 6-7 mbd ● US refineries: up 2.5 mbd since 2009 ● Brazil and Nigeria, production flat to up – possibly 2mbd. Domestic demand up, but refinery capacity lagging causing increased trade Future VLCC demand by region over the next to years 100 92 10 75 17 Net demand increase of 53 50 Number of vessels VLCCs by 2016 65 25 0 (20) (7) (25) (12) (39) (50) US & Canada Europe, Lat Amer & Africa Japan China India SE Asia 8
China’s oil import driving positive tonne-miles demand growth ● Oil supply volumes to China increased from AG, Miles moved per ton West Africa, South America and Caribbean from transported to China (a) 2001 to 2013 ● Tons shipped from West Africa and South Arabian Gulf 5,500 TM America require more ships due to the longer trade distance ● Shift in global refinery capacity from the West Africa 9,650 TM developed to the developing world is having a positive impact on the seaborne oil trade given increasing distances from production to refineries South America 11,500 TM Ton Mile Demand Growth, 2009 to 2013 10,000 9,321 9,159 8,908 8,803 9,000 8,512 Billions of ton-mile 8,000 7,000 6,000 5,000 2009 2010 2011 2012 2013 9 (a) Average ton miles based on 2013 tons transported to China Source:Drewry, Clarkson’s
Change in trading patterns increase the need for tonnage Europe US Gulf Mid East Asia Mid East-Europe VLCC Suezmax Both VLCC and Suezmax Developments Scenario 2014-2020 ● ● Middle East refinery expansion of 4 mbpd crude by Asian refineries not getting ME crude = 5mbd 2018 i.e. if production remains flattish actual export ● Euro refineries not buying NSea and WAF crude = 2-3mbd are down ● Additional Atlantic crude supply = 2mbd ● Atlantic supply up by 3-5 mbd. Russian oil to Atlantic ● Conclusion - Likely shift of 5-8 mbd ME to Atlantic US, North Sea extending Brazil, West Africa ● Sensitivities - 1mbd crude from ME to WAF = 17 VLCC Asian demand continues to grow both end user 1mbd crude supplied to Asia from WAF = 40 VLCC demand and refineries with export ambitions 1mbd crude supplied to Asia from Venez.=45 VLCC/Suez Outcomes - 5mbd 1/3 each = 170 VLCC 8mbd 1/3 each = 270 VLCC ● At the high end current capacity more than absorbed 10
Global VLCC and Suezmax fleet supply dynamics VLCC orderbook represents 11.4% of total fleet (a) Suezmax orderbook 11.0% of total fleet (b) 90.0 60.0% 30.0 60.0% 80.0 50.0% 25.0 50.0% 70.0 60.0 40.0% 20.0 40.0% 78% decline 64% decline in orderbook in orderbook % of total fleet % of total fleet DWT from 50.0 DWT from MM DWT MM DWT peak peak 30.0% 15.0 30.0% 40.0 30.0 20.0% 10.0 20.0% 20.0 10.0% 5.0 10.0% 10.0 0.0 0.0% 0.0 0.0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2014E 2015E 2016E+ 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2014E 2015E 2016E+ MM DWT % of total fleet vessels to be delivered MM DWT % of total fleet vessels to be delivered (a) 2014 figures as of February 28, 2014 (b) 2014 figures as of February 28, 2014 Source: Drewry Source: Drewry Orderbook for crude tankers is near historic lows 11
Asset prices 220.00 200.00 VLCC SUEZMAX 180.00 ($mm) Newbuild Secondhand ($mm) Newbuild Secondhand 10 yr avg 115 96 10 yr avg 71 66 160.00 5 yr avg 100 72 5 yr avg 62 51 1 yr avg 92 60 1 yr avg 58 42 140.00 MUSD 120.00 100.00 80.00 60.00 40.00 2000-01 2000-05 2000-09 2001-01 2001-05 2001-09 2002-01 2002-05 2002-09 2003-01 2003-05 2003-09 2004-01 2004-05 2004-09 2005-01 2005-05 2005-09 2006-01 2006-05 2006-09 2007-01 2007-05 2007-09 2008-01 2008-05 2008-09 2009-01 2009-05 2009-09 2010-01 2010-05 2010-09 2011-01 2011-05 2011-09 2012-01 2012-05 2012-09 2013-01 2013-05 2013-09 2014-01 Suezmax 156-158K DWT NB Prices VLCC 315-320K DWT NB Prices VLCC D/H 310K DWT Resale 2nd hand Prices Suezmax D/H 160K DWT Resale 2nd hand Prices Asset prices for both VLCCs and Suezmax vessels have appreciated significantly since H2 2013 12
Company overview
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