Cmb.tech Nv · EURONEXT:CMBT
Cmb.tech Nv — Euronav — Investor Presentation (March 2021)
62 slides from Cmb.tech Nv's investor presentation, March 2021
Slide 1: Investor Presentation Petercam - March 2021
INVESTOR PRESENTATION PETERCAM - MARCH 2021
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: Tanker Market Dynamics: Current Issues
TANKER MARKET DYNAMICS CURRENT ISSUES 3
Slide 4: Short Term
SHORT TERM TOO MANY SHIPS CHASING TOO FEW CARGOES Source: Bloomberg 4
Slide 5: Trading Fleet Versus Consumption
VLCC trading fleet (adj idle, storage) 550 570 590 610 630 650 670 690 710 730 750 Jan-2014 Mar-2014 May-2014 Source: Clarksons Jul-2014 Sep-2014 Nov-2014 Jan-2015 Mar-2015 May-2015 Jul-2015 Sep-2015 Nov-2015 Jan-2016 Mar-2016 May-2016 Jul-2016 Periods over $40k spot Sep-2016 Nov-2016 Jan-2017 Mar-2
Slide 6: Global Oil Demand: Recovery Likely Protracted
GLOBAL OIL DEMAND RECOVERY LIKELY PROTRACTED EIA forecast for sustained recovery in oil and liquids – currently 5-6m bpd below peak 105 102,3 102,3 100 96,7 95 90 85 80 75 Source: EIA 6
Slide 7: Global Oil Demand: China Back to Growth
GLOBAL OIL DEMAND CHINA BACK TO GROWTH TRAJECTORY SINCE OCTOBER 2020 16,0 15,5 15,0 Chinese oil consumption m mpd 14,5 14,0 13,5 13,0 12,5 12,0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2020 2021 Source: Bloomberg 7
Slide 8: Floating Storage
FLOATING STORAGE MORE OR LESS OVER AS AN ISSUE Mar ’20 Mar ‘21 300 VLCC 43 59 250 Suezmax 19 15 Aframax 6 15 No of vessels floating storage 200 150 100 50 0 Suezmax Aframax VLCC Source: Clarksons 8
Slide 9: OPEC Barrels Due to Return Starting Q2 2021
OPEC BARRELS DUE TO RETURN STARTING Q2 2021 32,0 30,3 OPEC production forecasts - IEA & Clarksons mbpd 30,0 28,7 28,1 28,1 28,2 28,2 28,2 28,2 28,2 28,0 28,0 27,4 27,0 26,8 26,0 25,7 25,3 25,0 24,8 24,8 24,3 24,3 23,9 23,9 24,0 23,0 22,4 22,0 20,0 Source: Bloomberg, Clarksons 9
Slide 10: Inventory
INVENTORY ONSHORE APPROACHING 5 YEAR AVERAGES 3300 3200 3100 m bbls inventory EIA 3000 2900 2800 2700 2600 2500 EIA global crude inventory 5 year average Source: Bloomberg, EIA 10
Slide 11: Steel Prices
0 1000 2000 3000 4000 5000 6000 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Source: Bloomberg, Clarksons Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 STEEL PRICES Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Chinese Steel price index Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 VLCC scrap value $
Slide 12: Recycling – Has Started
RECYCLING – HAS STARTED Source: Bloomberg, Clarksons, Splash24.com, Pareto 12
Slide 13: Recycling – Has Started
RECYCLING – HAS STARTED 6 5 4 3 2 1 0 Jun-2020 Jul-2020 Aug-2020 Sep-2020 Oct-2020 Nov-2020 Dec-2020 Jan-2021 VLCC Suezmax Aframax Source: Bloomberg, Clarksons, Splash24.com, Pareto 13
Slide 14: Iranian Return - A Negative/Neutral
IRANIAN RETURN - A NEGATIVE/NEUTRAL WILL LIKELY TAKE TIME & FLEET AGED IRANIAN CRUDE EXPORTS IRANIAN FLEET - AGED 3000 14 12 So could need 60 VLCC 12 30 VLCC for 1mbpd 2500 10 10 10 Iran crude exports k bpd 2000 8 # of vessels 1500 6 6 5 1000 4 3 500 2 0 0 Jul-15 Mar-16 Jul-16 Mar-17 Jul-17 Mar-18 J
Slide 15: Only Half of 20 Year Old Plus Tankers Trading
ONLY HALF 20 YEAR OLD PLUS TANKERS TRADING & SANCTION LEGACY TOO EMPLOYMENT STRUCTURE OF VLCC & SUEZMAX OVER 20 YEARS OLD 10 VLCC & 12 Suezmax highly unlikely to re-enter trading fleet given sanctions history 35 30 25 12 No of vessels 20 15 14 10 19 7 3 5 9 7 6 5 1 0 1 1 Long term storage Sanctioned
Slide 16: Asset Prices Showing Some Signs of Life
DESPITE VERY TOUGH FREIGHT MARKET ASSET PRICES SHOWING SOME SIGNS OF LIFE +7% +7% +6% +6% 100 90 90 85 80 70 67 63 60 $m value vessels 60 56 50 45 43 40 30 20 10 0 Newbuild Suezmax 5 year old Suezmax 5 year old VLCC Newbuild VLCC End October 2020 End March 2021 Source: Clarksons 16
Slide 17: Asset Prices Matter More to Tanker Share Prices
….AND ASSET PRICES MATTER MORE TO TANKER SHARE PRICES 175 60 165 50 155 Correlation 85% 145 40 $m value of new VLCC Euronav share price $ 135 125 30 115 20 105 95 10 85 75 0 VLCC new building $m Euronav share price $ Source: Clarksons 17
Slide 18: ...Than Freight Rates
VLCC long run earnings k per day 100.000 150.000 200.000 250.000 0 50.000 Source Clarksons Dec-04 May-05 Oct-05 Mar-06 Aug-06 Jan-07 Jun-07 Nov-07 Apr-08 Sep-08 Feb-09 Jul-09 Dec-09 May-10 Oct-10 Mar-11 Aug-11 Jan-12 VLCC long run earnings Jun-12 Nov-12 …THAN FREIGHT RATES Apr-13 Sep-13 Feb-14 Jul-1
Slide 19: Fuel Spreads
FUEL SPREADS Oil price Fuel Spread for 2021 Fuel Spread for 2022 Source: Bloomberg 19
Slide 20: Tanker Market Dynamics: Outlook
TANKER MARKET DYNAMICS OUTLOOK 20
Slide 21: Outlook: Tanker Market Awaiting Recovery
OUTLOOK TANKER MARKET AWAITING RECOVERY Demand for Supply Euronav Oil Ton miles Vessel Supply of Oil Balance sheet 2nd wave restrictions OPEC+ & Saudi China ton miles Fleet Age & Liquidity of $1bn lowering demand driving growing up but Orderbook to fleet + ADDITIONAL but vaccine to get supply cuts b
Slide 22: Tanker Market Dynamics: Oil Demand
TANKER MARKET DYNAMICS OIL DEMAND 22
Slide 23: Oil Demand Pre-Covid
Oil Demand OIL DEMAND PRE-COVID RESILIENT = WORLD GDP X 0.5 BUT TRANSPORT HEAVY GDP GROWTH CORRELATION WITH OIL DEMAND Oil demand % growth Global GDP growth 6,00% 5,00% 4,00% % growth oil demand and GDP 3,00% 2,00% 1,00% 0,00% 1990 1995 2000 2005 2010 2015 2020 -1,00% -2,00% Source IEA 23
Slide 24: Oil Demand Pre-Covid: Crude Usage Is Transport Heavy
Oil Demand OIL DEMAND PRE-COVID RESILIENT = WORLD GDP X 0.5 BUT TRANSPORT HEAVY CRUDE USAGE IS TRANSPORT HEAVY 45 40 Oil demand m bpd by sector 2018 35 30 25 20 15 10 5 0 Road transport Aviation & Shipping Industry & Petrochemicals Buildings & Power Other sectors Source: Kepler Chevereaus, WEO 2019
Slide 25: Crude Demand Recovery Deferred & Tonnage Added
Oil Demand CRUDE DEMAND RECOVERY DEFERRED & TONNAGE ADDED UNLESS GET RECYCLING IEA DEMAND FOREACT SEES RECOVERY DEFERRED – 2022 BEFORE HIT 2019 CONSUMPTION LEVELS 105 810 VLCC Qtr 104k 84k 88k 23k 15k Trading VLCC fleet (fleet minus storage plus new builds) 800 100 IEA global oil demand forecast m b
Slide 26: Tanker Markets & Inventory Draw
100.000 120.000 140.000 160.000 180.000 0 20.000 40.000 60.000 80.000 Jan-2013 Apr-2013 Jul-2013 Source: Clarksons Oct-2013 Jan-2014 Apr-2014 Jul-2014 Oct-2014 Jan-2015 Apr-2015 Jul-2015 Oct-2015 Jan-2016 CYCLES NOT MIX WELL Apr-2016 Jul-2016 Oct-2016 Jan-2017 Apr-2017 EIA global crude inventory Jul
Slide 27: Tanker Market Dynamics: Vessel Supply
TANKER MARKET DYNAMICS VESSEL SUPLY 27
Slide 28: Orderbook as % of Fleets
Vessel Supply ORDERBOOK AS % OF FLEETS 25 YEAR LOWS 60 50 40 30 20 10 0 VLCC Orderbook % Fleet Suezmax Orderbook % Fleet VLCC average Suezmax average Source: Clarksons 28
Slide 29: Delivery Schedule - VLCC
Vessel Supply DELIVERY SCHEDULE - VLCC 80 60 40 68 47 50 20 39 37 32 38 20 8 0 3 -2 -2 -4 -2 -13 -23 -26 -31 -35 -20 -40 Assume 30% of tankers >19 years recycled -60 2015 2016 2017 2018 2019 2020 2021 2022 2023 Deliveries To be Delivered Recycled Recycle forecast Source: Clarksons 29
Slide 30: Delivery Schedule - Suezmax
Vessel Supply DELIVERY SCHEDULE - SUEZMAX 70 60 50 40 30 57 20 32 30 27 26 16 27 10 15 10 5 0 -1 -6 -3 -13 -16 -10 -21 -18 -22 -20 -30 2015 2016 2017 2018 2019 2020 2021 2022 2023 Deliveries To be Delivered Recycled Recycle forecast Assume 30% of tankers >19 years recycled Source: Clarksons 30
Slide 31: Vessel Supply – Ripe for Re-sizing
Vessel Supply VESSEL SUPPLY – RIPE FOR RE-SIZING VLCC GLOBAL FLEET AGE STRUCTURE 25% VLCC fleet > 15 years Average fleet age = 10 years Orderbook 9% Back to level not seen since 2002 80 11 70 10 10 60 Average age of VLCC fleet Few >20 year old trading 9 50 & sanction effected No of VLCC 9 40 8 30 8
Slide 32: Vessel Supply – Suezmax
Vessel Supply VESSEL SUPPLY – SUEZMAX SIMILAR DYNAMICS TO VLCC PROFILE 25% Suezmax fleet > 15 years Average fleet age = 10 years Orderbook 10% Back to level not seen since 2002 60 11 10,5 50 10 40 average fleet age Few >20 year old trading 9,5 No of Suezmax & sanction effected 30 9 8,5 20 8 10 7,5 0
Slide 33: Global Fleet Age Profile
Vessel Supply GLOBAL FLEET AGE PROFILE IS AS HIGH AS HAS BEEN SINCE 2002 33
Slide 34: Not All Tankers Are Equal
Vessel Supply NOT ALL TANKERS ARE EQUAL… “Market” VLCC 15 Year Old VLCC “Eco” VLCC Fuel Fuel Freight Fuel Freight Freight TCE TCE TCE x80% Consumption 60 tonnes 70 tonnes 54 tonnes Utilisation 100 % 80 % 100 % Opex + DD $10,095 $11,740 $9,800 TCE rate $15,000 $9,600 $16,800 Costs OPEX +DD LSFO $300
Slide 35: Older Tonnage Under Pressure
Vessel Vesse Supply Supply OLDER TONNAGE UNDER PRESSURE OLDER TONNAGE - POST 15 YEARS CHANGES 12.000 10.000 8.000 VLCC ton-miles per year 6.000 4.000 2.000 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Age in years - VLCC Source: Braemar 35
Slide 36: Recycling Reflects Owner Pressure
Vessel Supply RECYCLING REFLECTS OWNER PRESSURE STEEL PRICE AND REGULATORY PRESSURE OLDER TONNAGE COMES UNDER INCREASING PRESSURE OWNERS DILEMMA Older vessels = Increased opex from heavy consumers IMO2020 Volatile steel/scrap price Lower cash earnings for older vessels Ballast water capex $1.5m from
Slide 37: Shipowners Dilemma
Vessel Supply SHIPOWNERS DILEMMA NEW TONNAGE BECOMING INCREASINGLY COMPLEX Regulation Emissions Technology Cost Demand Shape of Multiple Unlikely to be Tanker space Uncertainty future commitments category still capital over shape regulation? to reduce killer as new intensive with and duration Primac
Slide 38: Recycling
Vessel Supply RECYCLING WHEN VLCC RATES GO BELOW P&L BREAK EVEN = ON AVERAGE 5% FLEET DEPARTS 5% OF CURRENT FLEET = 41 VLCC 9% 30.000 8% 8% 8% 8% 7% 25.000 % of VLCC fleet recycled during year 7% VLCC freight rate for Year 6% 6% 20.000 5% 5% 5% 5% 5% 4% 15.000 4% 3% 3% 3% 10.000 2% 2% 5.000 1% 0% 0
Slide 39: Recycling – Strong Correlation
VLCC freight rates INVERTED 100.000 120.000 140.000 160.000 180.000 200.000 0 20.000 40.000 60.000 80.000 200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Q1-2011 Q2-2011 Source: Clarksons Q3-2011 Q4-2011 Q1-2012 Q2-2012 Q3-2012 Q4-2012 Q1-2013 Q2-2013 Q3-2013 Q4-2013 Q1
Slide 40: Conducive Conditions for Recycling
Vessel Supply CONDUCIVE CONDITIONS FOR RECYCLING WHICH ARE ALSO INTENSIFYING OLDER TONNAGE VALUES & FREIGHT RATE OUTLOOK SUPPORTIVE OF RECYCLING… Recycle value VLCC >$18m 1 year TC rate < $25,000 VLCC 1 year VLCC* recycled Recycle $m TC rate over next12 months 2010 18.6 19,800 20 2017 15.8 27,100 20
Slide 41: Conducive Conditions for Recycling: Special Surveys
Vessel Supply CONDUCIVE CONDITIONS FOR RECYCLING WHICH ARE ALSO INTENSIFYING …WITH CATALYST OF 62 VLCCS REQUIRING SPECIAL SURVEYS DURING 2021 20 18 16 6 14 6 12 8 10 4 8 8 8 6 5 5 4 2 4 3 3 2 0 Q1 2021 Q2 2021 Q3 2021 Q4 2021 22.5 year survey 20 year survey 17.5 year survey Source: Clarksons * VLCC
Slide 42: Tanker Market Dynamics: Ton Miles
TANKER MARKET DYNAMICS TON MILES 42
Slide 43: Global Refinery Capacity Changes
Ton Miles GLOBAL REFINERY CAPACITY CHANGES SUPPORTIVE OF TON MILE DEVELOPMENT REFINERY PLANNED DEVELOPMENTS 2020-2023 2000 1500 k bpd refinery capacity 1000 500 0 -500 -1000 North Europe China India Japan SE Asia Australasia Middle East Latin America Africa America 2020 2021 2022 2023 Source: Braema
Slide 44: Ton Miles Impact
Ton TON MILES IMPACT Miles FOR RETURNING BARRELS 1m bpd of transit = requirement for 30 VLCC - long term tanker market dynamics ATLANTIC BASIN – FAR EAST ROUTE MIDDLE EAST - ASIA PACIFIC ROUTE Annual 1.4 mbpd x 365 days = 511m barrels 1.4 mbpd x 365 days = 511m barrels VLCC 511m barrels / 2m capacit
Slide 45: Tanker Market Dynamics: Other
TANKER MARKET DYNAMICS OTHER 45
Slide 46: Freight Rates and Oil Prices
Ton Miles FREIGHT RATES AND OIL PRICES DON’T REALLY MIX BUT… Source: Bloomberg 46
Slide 47: Freight Rates and Contango
Ton Miles FREIGHT RATES AND CONTANGO DO HAVE A STRONG CORRELATION contango backwardation Source: Bloomberg 47
Slide 48: Share Buy Back for Longer Term Value Creation
SHARE BUY BACK FOR LONGER TERM VALUE CREATION SINCE 2018 EURONAV HAS RETURNED $146M VIA BUY BACKS + $50M 95 90 Buy backs $m value of newbuild VLCC 85 80 75 70 65 New build VLCC $m Implied EURN valuation as new build VLCC Source: Clarksons, Euronav
Slide 49: Sustainability at Euronav
SUSTAINABILITY AT EURONAV 49
Slide 50: Sustainable Financing in Action
SUSTAINABLE FINANCING IN ACTION Ship Financing – the past Ship Financing – the future Emission targets > IMO All banks to agree $469m revolver Euronav and its bank partners finalise the first $713m sustainable linked loan on sustainable September 10th, 2020 linked loan $244m term loan Independent me
Slide 51: Shipping Already Has Track Record
SHIPPING ALREADY HAS TRACK RECORD ON SPILLS, MARINE LIFE AND EMISSIONS Dramatic improvement in Single hull to double hull Ballast water IMO 2020 – 85% cut to oil pollution spills transition treatment systems SO2 emissions 30 No of spills >700t 25 28% 20 VLCC global fleet dwt 60% 15 10 72% 5 Mandator
Slide 52: Shipping's Positioning on Emissions
SHIPPING’S POSITIONING ON EMISSIONS IN STRONG RELATIVE POSITION SHIPPING – LOW RELATIVE EMISSIONS Air 425 Road 80 2.7% of global CO2 emissions Rail 35 Shipping 5 0 100 200 300 400 500 gCO2/ton-km(1,2,3) Source: IMO GHG study 2009. Notes: 1) Energy-efficient transport is much dependent on the load fa
Slide 53: Crude Has Core Energy Transition Role
CRUDE HAS CORE ENERGY TRANSITION ROLE CRUDE REMAINS CORE PART OF ENERGY MIX IEA FORECAST CRUDE EXPANSION TO 2040 120 4,3% Million bpd consumption estimate by IEA 6,4% 100 13 5,0% 12 9 33,1% 80 13 23 60 18 16 12 27,0% 40 20 41 45 24,2% 0 2017 2040 Road Transport Aviation & Shipping Oil Gas Coal Renew
Slide 54: Sustainability Matters at Euronav
SUSTAINABILITY MATTERS AT EURONAV Tanker sector leading ESG foundations established Next stage ACCOMPLISHMENTS TARGETS & DECARBONISATION Environmental Social Governance Architecture & framework to Emissions data since ‘17 Consistent survey top 10 be rolled out during 2021 “Good steward” of Independe
Slide 55: Shipping Can Deliver 2030 Targets
SHIPPING CAN DELIVER 2030 TARGETS Shipping 3rd largest C02 emitter in transport CARS HGVs SHIPPING AVIATION RAIL/BUS/LGV 37% 25% 13% 12% 4% 4% 4% Source: HSBC
Slide 56: Shipping Can Deliver 2030 Targets
SHIPPING CAN DELIVER 2030 TARGETS Tech, self help & regulation to deliver 2030 target 50% EEDI – Energy Efficiency Design Index phase 1 started 2015 with phase 3 IMO CO2 emissions targets requiring approval June 2021to start 2023 30% 20% 10% 2015-2019 2020-2024 2025> 2050 Hull Self help solutions Cl
Slide 57: Case Studies: Premium Antifouling Paints
CASE STUDIES PREMIUM ANTIFOULING PAINTS Potential relative emission savings in CO2 tons for a five year period 14000 12000 10000 8000 $400k investment $300k investment 6000 4000 2000 0 VLCC Suezmax 57
Slide 58: EEDI & EEXI
EEDI & EEXI GLOBAL SHIPPING REGULATIONS SHOULD ENABLE SHIPPING TO MEET 2030 GOALS Shape of incoming regulation Source: DNV-GL 58
Slide 59: EEDI & EEXI
EEDI & EEXI GLOBAL SHIPPING REGULATIONS SHOULD ENABLE SHIPPING TO MEET 2030 GOALS EEXI to be enforced by global regulator IMO • Carbon intensity assesses CO2 emissions from shipping relative to tonne miles • EXISTING VESSELS will have to reduce carbon intensity by reducing fuel consumption • EEXI re
Slide 60: Future Fuel Key – Especially 2030+
FUTURE FUEL KEY – ESPECIALLY 2030+ LOTS TO CHOOSE FROM AT THIS STAGE – UNLIKELY WILL BE ONE CATEGORY KILLER HOWEVER LNG Ammonia Methanol Hydrogen Biofuels Currently available Partially 2030? Available viable 2025 available earliest today Exact CO2e LT better Scaleable? Highest Scale? cut? solution b
Slide 61: Thank You
THANK YOU EURONAV. » @
Slide 62: Investor Relations Contact
Brian GALLAGHER ir@euronav.com Head of Investor Relations www.euronav.com Member of Executive Committee Please consider the environment Phone +44 20 7870 0436 before printing Mobile +44 77 0368 4996 62