USA INVESTOR PRESENTATION JUNE 2018
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, 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. 2
EURONAV – WHO WE ARE The world’s largest, independent quoted crude tanker platform 76 VESSELS* International company – internationally connected Fleet summary 2 FSO o Leading provider of transportation and 3 million barrels storage of crude oil Stripped water capacity o Hybrid operating Fixed 2 V-Plus** platform with mix of 23% Spot integrated & 3 million barrels 77% outsourced ship Over 441,000 dwt managers Only 2 in world fleet o Strong relationships to 43 VLCC oil majors and leading energy firms 2 million barrels o Market capitalization Up to 330,000 dwt of USD ~2 billion 3,900 EMPLOYEES 27 Suezmax 1 million barrels • Approx. 3, 720 seafarers of many different nationalities 150,000 – 165,000 dwt • Approx. 180 shore employees 3 *plus 2 panamax vessels **including V-Plus bought from INSW June 2018
Actively managed high quality fleet… EURONAV STRATEGY Strong balance sheet hedge towards Liquidity end June 2018 (USDm) $817m cyclicality 817 900 35 650 o Tanker business is cyclical, towards which the only cure 800 is to have a strong balance sheet and liquidity pool 700 600 o Policy to retain at least two years of operational liquidity at all times and maintain strong banking 500 $m relationships 400 300 200 132 100 As evidenced by: 0 Cash Undrawn Undrawn Total Secured Unecured Revolver Revolver Capital allocation key to growth strategy 1 2 Acquisition criteria Since 2014 1. Keep strong balance sheet – leverage c 50% o 25 vessels acquisition + 21 Vessels merger 2. Retain liquidity runway at least 2 years o High dividend yield adjusted to fixed dividend 3. Keep or lower average break-even o Maintain strong balance sheet ≈ 50% (leverage) o Maintain a high liquidity position 4
TANKER MARKET STRUCTURE Few customers, lots of suppliers Seasonal Cyclical 100,000 55,000 Monthly TCE rate Traders Average monthly 90,000 VLCC rate 1990- 2017 50,000 49,777 80,000 Oil Refiners 70,000 Companies 45,000 44,969 60,000 43,198 50,000 40,000 Ship 39,614 Broker 40,000 37,161 36,082 35,783 35,000 35,102 30,000 34,942 20,000 32,318 owner 30,293 Pool 30,000 28,823 10,000 owner owner 0 25,000 owner owner 1990 1992 1994 1997 1999 2002 2004 2006 2009 2011 2014 2016 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 5
FSO 5 year contract to 2022 OPERATIONALLY GEARED Each $5,000 uplift in both VLCC and Suezmax rates improves net revenue and EBITDA by $112mm Long term TC 7 year contract to 2024 $1,232 + $560 $336 $112 BASE +$5,000 +$15,000 +$25,000 +$55,000 per day per day per day per day Commercial TC relationships $25,000 $30,000 $40,000 $50,000 $80,000 VLCC TCE rates $20,000 $25,000 $35,000 $45,000 $75,000 Suezmax TCE rates 6
GENER8 TRANSACTION 7
COMBINED BUSINESS MAJOR POWERHOUSE IN LARGE CRUDE TANKERS SEGMENT 20 Euronav VLCC Suezmax Combined 15 VLCC Suezmax Total Fleet DWT 21 28 10 27 Gener8 5 43 VLCC Suezmax 0 6 15 + 2 FSO, 2 ULCC & 2 LR2s 18.9 million DWT in total in pro-forma combined business* * For total pro-forma business including FSO 8
VALUE CREATION AND POTENTIAL FROM LARGER LIQUID PLATFORM FIRST INDUSTRIAL BIG TANKER PLAYER : NAV GNRT NAV EURN Asset Asset Cash Cash Pure play Vessels Vessels Big market cap FSO Extension + Residual High liquidity (ADTV) Value Best in class corporate governance Brand value as crude transporter of choice No related party / conflict of interest Never defaulted Best in class operation Customer quality and Best in class chartering reliability Debt Debt Big enough to have an impact on markets Loans Loans Maximize optionality – Bonds Bonds play the tanker earnings cycle Transaction Costs Transaction Costs 9
CONCLUSION Euronav post- merger top holders 1. KEEP STRONG BALANCE SHEET - Leverage less than 50% on completion 7.3% Saverco NV 7.2% 2. RETAIN SUFFICIENT LIQUIDITY 4.3% Châteauban SA FOR CYCLE Oaktree 4.2% Victrix NV - Liquidity >$800m 3.7% M&G (Prudential) 3.5% Fidelity 0.5% 69.3% 3. RETAIN OR LOWER AVERAGE Euronav (treasury shares) Other Shareholders BREAK EVEN FOR FLEET - VLCC break even reduced on pro-forma basis; Suezmax flat MARKET CAP $1.5B $2.0B* *@$9.10 10
STRONG PRO FORMA FINANCIALS Leverage Repayment schedule and RCF reductions Highlights 600 Millions Bond Maturity Credit margins between 1.225% and 2.25% (Bond o 500 7.5%) Undrawn balloon to 400 o Most of the secured bank debt is revolving be refinanced o Strong relationships with the leading international 300 Balloon to be shipping banks refinanced 200 No material debt maturities until 2020 o Repayments o Revolving credit facilities reduce by $138m/year 100 o Cash debt amortizations on term loans: $55m/year Reductions (non- 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 cash) Strong & supporting banking relations Covenants o Liquidity (minimum USD 54.3 million): USD 817 million (Q1-18) o Equity Ratio (minimum 30%): 64.5% (Q1-18) o Working Capital (positive): USD 662.8 million (Q1-18) 11
INDUSTRY AND MARKET OVERVIEW
OUTLOOK Financing & Demand for Ton Miles Supply of Oil Vessel Supply Regulation Oil S/TERM HEADWINDS US EXPORTS OPEC CUTS ROBUST BARRIER TO GROW L/TERM EXPORTS ENTRY MANAGEABLE EXTENDED 13
Demand for Oil DEMAND FOR OIL – ROBUST AND STEADY Annual Y/Y Change in global demand for oil – consistently growing demand VLCC Equivalents growth (mbpd) Average 1.1 million barrels per day 1.6 49 1.5 46 1.4 43 3.5 1.3 40 3.1 3.1 1.2 37 3 1.1 33 1 30 2.5 0.9 27 0.8 24 1.9 2 2 0.7 21 1.8 1.7 M bpd Demand growth 1.6 1.6 1.6 1.5 1.5 1.4 1.4 1.4 1.5 1.3 1.2 1.1 1 1 1 1 0.8 0.7 0.7 0.8 0.7 0.5 0.5 0.3 0.3 0.3 0 -0.5 -0.7 -1 -0.9 Source IEA -1.5 14
OIL PRICE IMPACT ON DEMAND Oil supply increase Oil price outlook coming 2019+ 120 USD per barrel 100 Price is too high/demand is impacted Demand Destructive 80 Neutral 60 Demand Stimulating 40 Price is too low/long-term supply 20 Demand impacted/CAPEX cuts in E&P Disruptive Source: Bloomberg 0 15
REFINERY GROWTH UNDERPINS DEMAND Refinery Capacity expansion projects 2016-20: +7.5m bpd next three years 3.5 3 2.5 Million bpd 2 1.5 1 0.5 0 2016 2017 2018 2019 2020 North America Europe FSU Africa Middle East India China Other Asia Source: Clarksons, Citi 16
Supply of Oil SUPPLY OF OIL – OPEC & NON OPEC OPEC to “normalise” would mean 730k bpd+ Potential non OPEC oil supply growth 2000 1.5 1800 0.13 M bpd change if reverted to pre Vienna agreement levels Kuwait 1600 0.14 UAE K bpd YoY growth of annual average 1 0.15 Iraq 1400 Russia 0.25 Saudi Arabia 1200 Brazil 0.5 Venezuela Canada 1000 0.62 Iran Russia US 800 0 1 -0.25 600 -0.3 400 -0.5 200 -1 0 2017 2018 2019 2020 2021 2022 17 Source: Citi Source: Stifel
Recommend
More recommend
