A significant number of chemical projects are being constructed, especially in USA and Middle East… Estimated timing of new chemical projects, Geographic location of new million tonnes chemical projects, million tonnes Methanol 2019: 14 48 50 US 30 • MEGlobal Other Chemicals • South Louisiana 45 Methanol 2018: • G2X Energy 14 • Castleton Commodities 40 2017: China 5 • Reliance Industries • Zhejiang Rongsheng • Sadara Chemical Petrochemical 3 35 2H2016 • Kaveh Methanol • Saudi Aramco 2 3 • Petro Rabigh(phase II) 5 30 1H2017 2 • Natgasoline Iran 4 • OCI 3 2H2017 4 25 2 2 2 1H2018 20 12 Saudi Arabia 4 2020-2021: 2 2H2018 2 • Shandong Yuhang 15 6 Chemical 1H2019 • Celanese 10 • Connell group/Sino Life India 4 2H2019 6 • NWIWx2 5 1H2020 1 4 2H2020 0 Vietnam 1 Total production 2H2016 1H2017 2H2017 1H2018 2H2018 1H2019 2H2019 1H2020 1H2021 growth Korea 0 Source: Clarksons and Drewry 24
…which will boost exports from these areas… Chemical Exports, million tonnes US chemical exports, million tonnes Middle East Chemical exports, million tonnes +6.8% +11.9% 40 29 37 +5.3% 26 35 33 32 32 23 31 32 +4.0% 31 29 21 19 19 19 25 18 17 17 16 22 15 2008A 2009A 2010A 2012A 2013A 2014A 2015A 2016A 2017E 2018E 2019E 2008A 2009A 2010A 2012A 2013A 2014A 2015A 2016A 2017E 2018E 2019E 2011A 2011A Source: Clarksons, US assumption: 50% of capacity from new projects being exported 25
This is driving dislocation of supply and demand – and increasing average haul for the chemical fleet Overview of high and low cost petrochemical production High cost High Low cost cost Low cost USG – Far East 10,000 N. Miles 34 days ME – Far East High 6,000 N. Miles cost 19 days Global fleet average haul = 3,497 N. Miles 26
We hence forecast around 4% growth in demand, driven by GDP and ton-mile growth... Demand seaborne chemical trade, ton-mile CAGR +4.0% +3.7% 1,034 986 953 917 915 893 879 834 773 746 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017E 2018E 2019E Source: Odfjell 27
...which is also in line with consensus Odfjell and other data providers demand growth 2016A – 2019E, compound annual growth rate 5.0% 4.3% 4.1% 4.0% 3.5% 3.4% Clarksons Maersk Broker Steensland World GDP Consensus Odfjell Source: Various brokers 28
2017 will continue to be difficult, but we expect the market to be fairly balanced from 2018 onwards • Market still absorbing several years of supply growth • The de-consolidation has created added competition and pressure • The low CPP market impacts the chemical tanker markets 2017 - 2018 • Volumes continue to be good We expect 2017 to be difficult • Supply of vessels is trailing off • De-consolidation trend will reverse leading to greater concentration of tonnage • Demand will outgrow supply 2018 and • Longer hauls especially from USA will drive demand growth beyond • CPP markets (and swing tonnage) continues to be a “joker” We expect the market to be fairly balanced from 2018 onwards 29
Agenda • Welcome • Our story • Our markets • The Odfjell Compass • 1Q 2017 results 30
Our values fundamentally define Odfjell Professional • Skilled, dedicated and compliant • Show the right behaviour and attitude Pro-Active • Assess risk and give highest priority to safety • Take proper precautions and share knowledge Our values Sustainable • Aim for long-term success • Provide safe and enduring solutions Innovative • Embrace change • Look for new and improved solutions 31
Our Mission and Vision drive the strategy Our core business is handling hazardous liquids – Our Mission safely and more efficiently than anyone else in the industry We shall be a leading, preferred, environmental friendly and profitable global provider of transportation and Our Vision storage of bulk liquid chemicals, acids, edible oils and other special products 32
Our key guiding principles 1. We do not compromise on safety 1 2. Chemical Tankers and Terminals are our core business 2 3. In order to be world-class, we need to have world-class ambitions 3 in everything we do. Every day! 33
Our long-term ambition level and targets Safety Zero incidents performance Size Target an operated fleet of 100 vessels Revenue / Average revenue growth of 10% per year Top-line Profitability Industry leading EBITDA margin 34
The key components of the Odfjell compass Growth • Tonnage renewal / fleet growth • Ideally take part in consolidation High quality service • Safety, predictability and reliability Operational excellence • Tankers: Project “Moneyball” and strong focus on utilization • Terminals: Implementation of the «value creation program» Financial strength • Solid balance sheet • Competitive cost of capital Terminals – back to meaningful profitability levels • Focus on improving and growing our core terminals • Fund growth via portfolio optimisation (capex to be self funded) 35
A key challenge for Odfjell is growth - we have to reverse the trend of a declining fleet and revenue Odfjell chemical tankers gross revenue, USD million -415 1,247 1,066 1,056 1,042 1,028 1,021 999 940 832 2008 2009 2010 2011 2012 2013 2014 2015 2016 Number of 93 95 86 98 96 81 77 74 73 vessels 36
We can handle 100 vessels without adding significant G&A - 30 % decrease in G&A per operated ship day From current to target G&A per operated ship day, USD per day -30% Current Target 37
Agenda • Welcome • Our story • Our markets • The Odfjell Compass • 1Q 2017 results 38
Highlights Highlights Annualised EBITDA 1 , USD mill 300 • Stable underlying operational performance in 250 first quarter, despite a challenging and 200 depressed market 150 • EBITDA of USD 46 mill, compared with USD 48 100 mill in fourth quarter last year 50 0 • Odfjell chemical freight index (ODFIX) up 1.3% compared with previous quarter. Clarkson 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Platou Spot market index was up 1.9% LPG/Ethylene Tank terminals • Chemical Tankers EBITDA in first quarter was Chemical tankers USD 36 mill which is identical to fourth quarter 2016 «We expect 2017 to remain challenging, but our underlying operational performance is stable. Over the past two • Stable results from Odfjell Terminals quarters we have taken crucial steps in renewing our core fleet at a very low point in the price cycle» • Fleet renewal programme for large stainless Kristian Mørch, CEO Odfjell SE steel chemical tankers nearly completed 1. Proportional consolidation method according to actual historical ownership share 39
Highlights Highlights Odfix quarterly average Index , 1990=100 150 • Odfjell Terminals continues the development of 140 the first dedicated ethylene export terminal in Odfix index the US at our Houston facility in Texas. Final +1.3% 130 Odfix average 2008-2016 investment decision is not taken 120 • 110 Odfjell Terminals has initiated a process to explore the potential sale of our share of Odfjell 100 +1.9% Terminals Singapore 90 • 80 A dividend of NOK 1.50 per share was Chemical tanker spot earnings index (midcycle = 100) approved at the Company's Annual General Source: Clarkson Platou 70 Meeting 11 May 60 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 40
Financials Income statement¹ - Odfjell Group 1Q 2017 4Q 2016 USD millions Gross revenue 243 238 Voyage expenses (82) (76) TC expenses (48) (42) Operating expenses (45) (48) General and administrative expenses (22) (24) Operating result before depr. (EBITDA) 46 48 Depreciation (29) (32) Impairment - (16) Capital gain (loss) on non-current assets 0 45 Operating result (EBIT) 18 45 Net finance (15) (1) Taxes (1) (1) Net result 2 43 1. Proportional consolidation method 41
Financials Quarterly figures¹ – Odfjell Group Quarterly Gross Revenue and EBITDA, USD millions 279 276 260 253 249 241 243 240 238 Gross Revenue Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 69 61 60 57 53 48 46 45 35 EBITDA Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Slightly increased revenue but reduced EBITDA due to increased voyage expenses and divestment of the Oman terminal in December 2016 1. Proportional consolidation method 42
Financials Income statement¹ – Chemical tankers USD millions 1Q 2017 4Q 2016 Gross revenue 213 204 Voyage expenses (81) (74) TC expenses (48) (42) Operating expenses (31) (33) General and administrative expenses 2 (17) (19) Operating result before depr. (EBITDA) 36 36 Depreciation (20) (23) Impairment - (7) Capital gain/loss on fixed assets 0 1 Operating result (EBIT) 16 8 • Increase in gross revenue • Increase in voyage expenses primarily due to higher bunker prices 1. Proportional consolidation method 2. Including corporate functions 43
Financials EBITDA variance – Chemical tankers Quarterly EBITDA, USD millions 2.8 5.7 0.4 36.3 1.3 36.0 2.0 • Net gross revenue up 4% 1Q 2017 -6.6 • Net voyage expenses increased 8% -6.0 versus • TC expenses increased 14% 4Q 2016 4Q Gross Bunker Voy Bunker TC exp. OPEX G&A 1Q 2016 rev. cl. exp. der. 2017 55.7 12.2 • Net gross revenue down 1% 1.3 1Q 2017 1.9 0.5 36.0 • Net voyage expenses increased 20% -14.0 -14.6 versus -7.1 • TC expenses increased 18% 1Q 2016 1Q Gross Bunker Voy Bunker TC exp. OPEX G&A 1Q 2016 rev. cl. exp. der. 2017 44
Financials Vessel operating expenses – Chemical tankers Vessel operating expenses (OPEX) , USD/day Non-crew OPEX Crew cost Yearly development, 2008 - 2017 Quarterly development, 1Q 2015 - 1Q 2017 12 000 12 000 Average 2008-2014 10 000 10 000 -25% Average Total 2015-2017 8 000 8 000 -3% 6 000 6 000 Crew cost -3% 4 000 4 000 2 000 2 000 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 • OPEX remains stable at a competitive level • 25% drop in opex compared to 2008-2014 average 45
Financials Bunker development Quarterly net bunker cost Platts 3.5% FOB Rotterdam USD millions 1Q 2016 - 1Q 2017 January 2013 - April 2017 USD per metric tonne 38.6 37.8 36.7 700 3.3 34.1 32.9 600 9.9 6.2 15.5 11.4 500 400 35.8 28.0 26.7 300 21.4 21.0 200 100 -0.1 -0.5 1Q16 2Q16 3Q16 4Q16 1Q17 0 Bunker hedging Bunker clauses Bunker purchase 2013 2014 2015 2016 2017 2018 incl. in revenue • Net bunker cost in 1Q USD 391 per tonne before hedging vs. USD 342 in 4Q • Bunker clauses in CoAs cover about 60% of the exposure • 6% of 2017 exposure is hedged at USD 224 per tonne 46
Financials Income statement¹ – Tank terminals USD millions 1Q 2017 4Q 2016 Gross revenue 28 31 Operating expenses (13) (14) General and administrative expenses (5) (6) Operating result before depr. (EBITDA) 9 11 Depreciation (8) (10) Impairment - (4) Capital gain/loss on fixed assets - 44 Operating result (EBIT) 1 42 • Stable results but reduced EBITDA due to divestment of Oman terminal in December 2016 • The occupancy rate at 93% in 1Q based on available commercial capacity 1. Proportional consolidation method 47
Financials EBITDA Tank terminals EBITDA , USD millions YTD 5 3 1 Europe North America Asia EBITDA Tank Terminals 1Q 2017 4Q 2016 Europe 1 2 • Stable results in all areas North America 5 4 • Odfjell Terminals Singapore EBITDA USD 2 Asia 3 3 million in 1Q17 Middle East 0 2 Total EBITDA 9 11 48
Financials Balance sheet¹ 31.03.2017 – Odfjell Group Assets , USD millions Equity and liabilities , USD millions Ships and newbuilding contracts 1 212 Total equity 723 Other non-current assets/receivables 23 Non-current liabilities and derivatives 44 Investment in associates and JV’s 341 Non-current interest bearing debt 883 Total non-current assets 1 576 Total non-current liabilities 927 Cash and cash equivalent 212 Current portion of interest bearing debt 192 Other current assets 116 Other current liabilities and derivatives 67 Total current liabilities 259 Total current assets 328 Assets held for sale 5 Liabilities held for sale - Total assets 1 909 Total equity and liabilities 1 909 • Cash balance of USD 212 mill - excluding JV’s cash, but before USD 60 mill bond repayment in April 2017 • Net investment in tank terminals JV’s USD 312 mill • Equity ratio 37.9%, compared with 34.0% in 1Q16 1. Equity method 49
Chemical Tankers Harald Fotland Bergen, May 22 nd 2017 50
Odfjell is a fully integrated shipping company Integrated processes promote safe, reliable and efficient operations Being a fully integrated shipping ...enables control across company... all aspects of our operations 1 Safety Ship owning 2 Reliability and predictability 3 Operational excellence 4 Sustainable cost Chartering & Ship operations management 5 Growth 51
Agenda • Ship Management • Odfjell Tankers • The Odfjell Compass 52
Introduction to Ship Management • Odfjell’s Ship Management division operates a fleet of 40+ vessels • We perform complex operations on sophisticated vessels and have in-house Ship Management to secure: – Safe and efficient operations – World-class quality of our service – Maximise lifetime of our vessels – High performing vessels throughout lifespan – Synergies with Odfjell Tankers and Odfjell Terminals • Few, if any, external ship managers have the required competence to manage our super-segregators 53
Ship Management geographic presence Bergen (HQ) • Crewing • Deep-sea fleet management • Newbuild projects • Technology/Innovation Manila Singapore • Crewing • Regional-Asia fleet • Training • Deep-sea vessels • Shared service with FE operation centre pattern Sao Paulo • Regional South America fleet 54
We deliver a complete range of ship management services to the Odfjell Tankers fleet Fully integrated Crewing services and a ship- owners’ perspective on all Superintendency and purchasing aspects of the operation Project management Ship inspection and vetting Insurance claims handling New building feasibility studies, specifications and supervision 55
We do not comprise on safety! Odfjell vs. market average in safety KPIs, units defined below LTIs 1 per million exposure hours TRC 2 per million exposure hours Sample of 1,038 tankers Sample of 1,038 tankers -20% -30% Market average Odfjell Market average Odfjell 1. Lost time injury (graph is showing Lost time injury frequency) 2. Total recordable cases Source: Shipping Benchmarking Initiative 2016 56
Education and training remains at the forefront of Ship Management • Ship Management is pro-actively involved in training seafarers • Core competence training is provided in-house by experienced staff • We operate training centres in the Philippines specially designed to professionalize chemical tankers competence • Training program include world-class safety culture program recognized as best practice by many oil majors 57
We have a unique competence base 21 years ...average time with Odfjell for our captains 15 years ...average time with Odfjell for our chief officers 96% ...retention rate for our crew ~10,000 days ...of onshore training performed every year by our crew Weekly ... training sessions for crew on-board our vessels 58
We have high quality standards and maintain our vessels for a long working life with efficient and safe operations • Safe and efficient operations • Maximise working life for assets Our goals • Full customer acceptance • Between SM offices Integrated systems and • Between business units procedures • Developed over 100+ years • Safety performance Performance • Vessel performance monitoring • Root cause monitoring 59
Unique customer acceptance level provides full flexibility for Odfjell Tankers CDI vetting SIRE vetting Port State Control 2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016 The figures represent the number of observations after an on-board inspection either by an oil major (Sire), the Chemical Distribution Institute (CDI) or by a Port State Control (PSC) 60
Our technology department is continuously improving vessel performance ...with environmental and economic benefits Ship management initiatives... Annual • Retrofitting program for our super- Propeller upgrade bunker consumption 1 segregators – New propeller blades – New rudder bulb and fairing cone 100 92 – Gear optimisation 86 • Mewis duct – 8 – 10% reduction in bunker consumption • State of the art anti-fouling – Up to 5% reduction in bunker consumption 2014 2015 2016 • Unlimited fresh water production – Reversed osmosis plants on all vessels 1. Indexed to 100 61
What makes our Ship Management unique? • We do not comprise on safety! 1 • We have a lifetime perspective on our asset management 2 • We have a unique competence base 3 • We leverage on the integration with Odfjell Tankers and Odfjell 4 Terminals 62
Agenda • Ship Management • Odfjell Tankers • The Odfjell Compass 63
Introduction to Odfjell Tankers • Odfjell Tankers operates a fleet of 76 vessels and is a global service provider with offices at strategic important locations • We provide our service through a combination of contract of affreightments (CoAs) and spot cargos • Our ambition is to be the preferred provider of chemical tanker services and we aim to differentiate ourselves from competition by having: – Long-term relationships with all stakeholders – Operational excellence – Strong cooperation and synergies with Ship Management and Odfjell Terminals 64
We are a global provider of safe logistic solutions Leading Always prepared Efficient Any liquid Anywhere Anytime Always safe Preferred 65
Our vessels are sophisticated and built for serving any customer requirement Basic chemical tanker Sophisticated super-segregator 7WS 13WP 8WP 6WP 6W 5W 4W 3W 2W 1W 6P 5P 4P 3P 2P 1P 8WS 13WS 7WS 6WS Standardized and cost efficient Tailor-made and responsive Scale effect on basic equipment across similar ships Complex and flexible equipment Experienced crew with cost focus, comprehensive Experienced crew with cost focus technical competencies and training Pool and cargo optimization Continuous monitoring of performance 66
We are operating in a truly global system… 67
…with frequent sailings to all major ports… Example trade areas Example frequencies • Monthly voyages round-the-world Asia Pacific • All ships are super-segregators • Bimonthly voyages USG-SAM • Serving trades with mix of super-segregators and smaller tonnage • Bimonthly voyages NWE- • Serving trade with mix of super-segregators and SAM smaller tonnage Middle East • Every 10th day voyages to several destinations Export/ with products out of Middle East Import Regional • Weekly voyages from and to destinations in Asia Asia 68
…enabling us to serve up to 600 customers every year Selected customers Our stage 69
Our contract portfolio is the key to how we trade, and provides good coverage in calmer markets Monthly volumes loaded, thousand metric tonnes Spot CoA Average CoA Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 Dec 16 Jan 17 Feb 17 Mar 17 70
Our system enables us to outperform the market across cycles Odfjell 20k dwt stainless steel TCE vs. Clarksons 1-year TC benchmark, USD per day Odfjell chempool 20 Clarksons 20k 1-year TC Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Source: Clarksons 71
Agenda • Ship Management • Odfjell Tankers • The Odfjell Compass 72
The Odfjell compass: Leading us into the future Operational Sustainable I Safety II Growth III IV excellence costs • World-class: • Increase fleet to • Project Moneyball • Leverage on ‒ • Project Clockwork Training around 100 vessels integration ‒ • State of the art • Optimizing Procedures ‒ Systems performance procurement ‒ Maintenance monitoring processes 73
Safety I We have a zero incident ambition • Safety through every aspect of our operations Training • Strengthen focus on core competence • Implement Best Practices Culture/ • Competence/crew matrix routines • Leadership development • Automation/digitalisation • Enhanced communication throughout our Data/ value chain systems • Establish tier-1 performance monitoring and reporting 74
Growth II Our current fleet is a balanced mix of owned and chartered in vessels Own/BB TC Tonnage category Control type Vessel details Average size Average tanks Super-segregators 22 22 40 47 (Kvaerner & Poland) Large stainless steel 2 8 10 33 18 (27 - 36k dwt) Medium stainless steel 1 19 20 21 22 (19 - 26k dwt) Coated 6 6 48 24 (MIPO & SLS) South America 9 9 27 24 and other 1 5 4 9 Regional-Asia 11 17 Fleet overview as of March 2017 1. Includes Bow Atlantic and Bow Pioneer 75
Growth II We have growth ambitions... Illustration of Odfjell Target fleet +14 ∑ = 10 vessels 100 2 86 2 6 76 Current fleet Newbuild orders BB charters Time-charters Fleet including Target fleet concluded orders Comments • 4 x 49k dwt • 2 x 36k dwt • 2 x 35.5k dwt • 2 x 38k dwt 76
Growth II ...and are close to completing the renewal of our super-segregator fleet... 4 x Hudong 2 x Hudong 2 x BB 2 x TC Q2 19, Q3 19, Q4 Q2 and Q3 2020 Q4 19 and Q2 20 Q4 18 and Q1 19 Delivery 19 and Q1 20 Owned Owned 10 years 8 years Charter period 49,000 38,000 36,000 35,500 Dwt 54,600 45,000 40,000 37,300 Cbm 33 40 28 28 Cargo tanks Hudong-Zhonghua Hudong-Zhonghua Undisclosed Shin-Kurushima Yard Shipbuilding Shipbuilding 77
Growth II ...at an attractive point in the cycle 38k 30 tanks newbuild price, USD million 80 -32% 75 70 65 60 55 50 45 40 35 30 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Maersk Brokers 78
Growth II We have a clear strategy for how we will proceed Current fleet Tonnage category Tonnage market characteristics • Specialised market Super-segregators 22 • Illiquid TC/BB market (Kvaerner & Poland) • Specialised market Large stainless steel 10 • BB/TC mostly available for purpose built long-term contracts (27 - 36k dwt) • Very liquid BB/TC for standard J19s, but less liquid for 25k’s and Medium stainless steel 20 (19 - 26k dwt) vessels with higher sophistication • Liquid TC market for conventional MRs, but limited access to Coated 6 (MIPO & SLS) MRs with higher sophistication South America • Local requirements dictate specialised tonnage to succeed 9 and other 1 • Local requirements dictate specialised tonnage to succeed Regional-Asia 9 Fleet overview as of March 2017 1. Includes Bow Atlantic and Bow Pioneer 79
Operational excellence III Port rotations in large ports can involve a large number of berth calls – Houston example X Stop at anchorage Stop at berth X 10 Example voyage: Bow Mekka, 201504, USG 2 12 5 • Multiple berths • 7 Barging operations • Complex cargo programs 3 • Cleaning and purging • Crew changes • Service and repairs • Supplies • Bunkering 13 • Vetting 6 14 • Inspections 11 1 • Surveyors 4 • Training • Coordination with land organization • … • Continuously changing 8 plans and assumptions 9 80
Operational excellence III Project Moneyball: Working with several initiatives to improve port efficiency Project Moneyball Type of initiatives • Use KPIs and statistics as a means to improve vessels operational performance • Overall ambition: improve port efficiency to increase Odfjell’s fleet • utilization Consolidate cargo programs • Main areas of improvement: − Commercial and cargo program • Improved execution through better planning − Operational efficiency processes and new tools − Leverage possibilities from increased data availability • Strategic partnerships • Involving several external stakeholders such as customers, terminals, port authorities and brokers • Automate certain administrative tasks to free up capacity 81
Operational excellence III Successful project implementation and significant port efficiency improvement per Q1 2017 Project Moneyball status, End of first quarter 2017 Implementation of Project Port efficiency is 7% better than historic Moneyball is 83% completed benchmark and 3% better than target Project implementation progress Odfjell port efficiency index 100% 100% -7% 96% 83% 93% Full implementation 2017YTD status Historic benchmark Target 2016- Actual 2016- (Baseline) 2017YTD 2017YTD 82
Operational excellence III Port time performance has been better than target in 12 of 15 months in the Moneyball period Prediction Actual Moneyball period 10 11 12 01 02 03 04 05 06 07 08 09 10 11 12 01 02 03 04 05 06 07 08 09 10 11 12 01 02 03 2014 2015 2016 2017 Source: IMOS; Team analyses 83
Operational excellence III We have initiated Project Clockwork to become the preferred provider Key focus areas for our customers: Example customer benefits: + Safety Logistic / planning optimisation Working capital optimisation Price / cost of services + 2 Reduction of demurrage exposure + 2 Reliability Customer creditability towards end-users + Predictability 84
Operational excellence III We are investing in real time monitoring of our fleet Expected benefits Customer service Connection / real time data Energy efficiency Improved planning Vessel Onshore • Raw data capture • Real time data transfer Reduced maintenance • Real time data • State of the art data transmission processing Improved control • Data analysis and usage 85
Operational excellence III Demonstration of business intelligence system 86
Sustainable costs IV Significant efforts already implemented to bring costs down to a sustainable level Historic OPEX performance and 2017 budget , USD per day Non-crew Crew -26% -1% -4% Budget 2014 Budget 2015 Budget 2016 Actual 2016 Budget 2017 Pre-Felix Post-Felix 87
Sustainable costs IV Example cost initiatives: Weather routing 628 nautical miles longer distance BUT: 106.3 hours and USD 125k saved Weather routing effects 2016: 88
Sustainable costs IV Example cost initiatives: Propeller cleaning 89
Sustainable costs IV Optimizing procurement processes – integrated operations high on the agenda Both organizations Complete cost base Example levers we are working with 1 Consolidating suppliers Voyage Odfjell Tankers Expenses Improving planning and 2 logistics planning Bundling of purchases across 3 business units Odfjell Ship Operating Continuously developing Management Expenses 4 procurement process 90
Our way forward • We are in a challenger position 1 • We are developing a unique commercial and technical platform 2 • Our team is dynamic and agile 3 • The new organisation embrace change and high ambitions 4 91
Odfjell Terminals Frank Erkelens/Koert Schouten Bergen, May 22 nd 2017 92
Agenda • Company profile • Market update • Strategy 93
Company profile A global tank storage service provider • Owned by Odfjell SE (51%) and Lindsay Goldberg LLC (49%), a US based private equity fund • Odfjell Terminals operates 9 tank terminals , located in key ports around the world • Odfjell Terminals offers in Rotterdam a toll distillation service for the petrochemical and petroleum industry (PID) • Odfjell Terminals aims to become the best in class provider of tank storage and associated services for liquid chemicals, oil, biofuels, edible oils and gases, adding value to all relevant stakeholders • The company’s strategy is to grow within its current footprint of terminals , especially in Rotterdam and Houston. A key objective is to harvest synergies with Odfjell Tankers • The terminal network also includes a cooperation agreement with a group of tank terminals in South America , partly owned by related parties Key figures terminals 1 ~950 9 3.5 $237 $91 tanks 1 million CBM 1 millon Turnover 2 millon EBTIDA 2 1. 100% basis 2. 2016 propionate consolidated figures, including Oman 94
Company profile Mission It is our mission to provide safe, clean, efficient and reliable storage and handling services for liquid chemicals, oil, biofuels, edible oils and gases. We realize we have a serious responsibility to store and handle products that can endanger people’s health and the environment if not taken care of appropriately. We want to be respected by all stakeholders , from customers, partners, authorities, local communities to our shareholders and employees. Our long term sustainability depends on our ability to respond to changing demands from our environment, as well as our ability to be flawless in the execution of our mission. 95
Company profile Worldwide footprint – terminals located in key ports Storage capacity, CBM thousand Mineral Chemical Terminal Share JV partner Capacity Rotterdam 100% 1 100 536 Noord Natie Holding Antwerp 25 % 348 Fully owned JV Under Terminal Share Capacity development Houston 100 % 380 Charleston 100 % 79 Terminal Share JV partner(s) Capacity Singapore 50 % Oiltanking 402 Ulsan 50 % KPIC 314 Dalian 50 % Dalian Port Authority 120 100 Jiangyin 55 % Garson Investment Tianjin 49 % Tianjin NIZ Ports 138 Quanzhou 1 50 % Founder Commodities Changxing 1 Dalian Port Authority, 40 % CXI Committee 1. Under development 96
Developments Positive development last year, delivering on important milestones in terminal strategy Developments Focus going forward Business improved significantly in 2016: Strategic focus on terminals where we have – All terminals delivered stable earnings managerial control of the assets, and growth opportunities in core markets – Distillation business has seen a gradual ramp up of utilization of the new expanded capacity in 2016 Continue focus on utilization of the assets: – Rotterdam showed significant improved full year – Contango in the petroleum market until mid positive operating result 2017 – Increased occupancy rates in Houston Implementation of new strategy for Rotterdam, – Opening of new terminal in Tianjin, November 2016 including gradual introduction of new tank – Divestment of share in Oman terminal in capacity December 2016. Proceeds ~$130m, resulting in a net Divestment of non-operated terminals evaluated gain of ~$86m to finance major investment projects Highlights 2017: – Process to explore a possible sale of our – Q1 2017 EBITDA of $18.4m vs. $17.4m 1 in the shares in the Singapore terminal initiated 2 previous quarter – Average occupancy rate Q1 2017 was 93% , compared to 94% last quarter – Basic engineering phase (FELIII) initiated in February 2017 for Ethylene export facility in the US – Without LTI’s for 14 consecutive months 1. $3.6 mill adjustment for the effect of the Oman terminal that was sold as per 29 December 2016. 2. 2016 EBITDA of $20.9m and had a net debt of $35.0m end of last year 97
Developments QHSSE – We do not compromise on safety QHSSE KPIs 2016 Safety is a value and impact everything we do… …our performance shows that we truly mean it • Odfjell Terminals strives to be a global leader in terms of Lagging KPI’S Result Target quality, health, safety, environment, and sustainability • We aim to achieve operational excellence through Lost time injury frequency (LTIF) 0.26 0.30 operational discipline and standardization including: Total recordable injury frequency – Minimizing our environmental footprint, 1.18 1.20 (TRIF) – Being a responsible member of the communities we Process safety event rate operate in and 1.0 1.0 (PSER) – By doing the right things, the right way, every time • Safety is a value and everything we do is based on a Leading KPI’S Result Target zero incident philosophy Safety observation rounds(SOR) 2 597 SOR corrective action closed (%) 81% >80% Completion rate inspection 98.6% >99% Safety Critical Equipment Management walk throughs 1 266 Near miss reports 467 Odfjell Terminals currently operates its terminals without LTI’s for 14 consecutive months 98
Developments Quarterly financial developments Gross revenue, EBITBA and CAPEX on proportional basis , USD millions Oman 60.4 59.1 59.2 58.3 56.7 53.0 52.1 53.4 51.0 5.2 5.1 4.9 5.2 4.9 4.8 4.8 5.0 Gross revenue 1 55.3 53.9 53.1 54.3 51.8 47.3 48.2 46.0 23.8 23.3 22.3 22.7 21.0 EBITDA 1 19.3 18.3 3.8 18.4 16.9 3.7 3.5 3.7 3.6 3.5 3.5 3.6 19.6 20.0 18.8 19.0 17.4 15.8 14.8 13.3 26.0 17.2 17.4 CAPEX 1 15.0 13.9 11.5 11.2 7.2 25.7 7.1 17.2 17.0 14.9 13.7 11.3 9.4 5.0 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 99
Developments Quarterly operational developments Storage capacity, throughput and distillation 100% basis Available Unemployed Unavailable Available - Oman Expansion 2 Occupancy Rate 4 792 100% 589 438 589 584 589 699 488 780 3 516 1 294 1 294 1 294 1 263 1 294 1 264 1 243 428 Capacity 1 283 95% tcbm 1 93% 2 897 2 736 2 794 2 656 2 692 2 673 2 693 2 566 2 396 0% Oman 5 748 5 646 5 571 5 321 4 893 4 601 4 490 Through- 2 446 2 473 1 991 2 838 3 346 3 283 put 2 161 1 711 1 801 tMT 2 225 3 329 3 302 3 098 2 891 2 808 2 689 2 732 1 121 296 214 Distillation 190 165 168 141 134 Volumes 107 78 tMT 3 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 1. Including divested Oman activity in 2015 and 2016 2. Permit unavailable 3. Rotterdam (OTR) 100
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