Euroseas Ltd. · NASDAQ:ESEA
Euroseas — Investor Presentation (December 2018)
28 slides from Euroseas's investor presentation, December 2018
Slide 1: Euroseas Ltd. December 2018
Euroseas Ltd. December 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements in this presentation may be "forward-looking statements" within the meaning of federal securities laws. The matters discussed herein that are forward-looking statements are based on current management expectations that involve risks and uncertainties that may re
Slide 3: A Strategic Evolution
A Strategic Evolution BULKERS (EURODRY LTD) CONTAINERSHIPS A traditional Greek shipping company (EUROSEAS LTD) NEW EQUITY / that has adapted its strategy to the FLEET RENEWAL changing times and opportunities… 2018: Separation of fleets PRIVATE 2014 EQUITY PUBLIC 2010 MARKETS CONTAINER- 2005-2007 SHI
Slide 4: Drybulk & Containership Fleet Separation
Drybulk & Containership Fleet Separation EuroDry Ltd. (“EuroDry”, NASDAQ: EDRY) was spun-off from Euroseas Ltd. (“Euroseas”) on May 30, 2018 as a pure drybulk carrier owner to provide worldwide ocean-going transportation services for … … transporting major bulks (iron ore, coal and grains) and m
Slide 5: Reasons For The Spin-Off
5 Reasons For The Spin-Off Maximize shareholder value Euroseas’ stock before the spin-off was trading around 40% of its NAV, while most public peers - which are all “pure-play” companies - traded close to their NAV Euroseas’ mixed fleet strategy was, likely, the main reason for the trading dis
Slide 6: The Spin-off Created Shareholder Value
The Spin-off Created Shareholder Value » Combined price after spin-off averaged $3.32/share compared to $2.24/share prior to the spin-off, a 48% gain Euroseas & EuroDry Share Price development $4.0 $3.5 EDRY, adjusted for share count $3.0 ESEA after spin-off ESEA prior spinoff $2.5 $2.0 $1.5 $1.0 $0
Slide 7: Euroseas - Containership Fleet & NAV Calculator
Euroseas - Containership Fleet & NAV Calculator CONTAINERSHIPS Proforma Notes: Proforma adjustments Size Year As of during 2018Q4: 1) Refinancing of loan Name Type DWT TEU Built 9/30/2018 (million USD) facilities for nine vessels Akinada Bridge Intermediate 71,366 5,610 2001 Value of vessels (1) 69.
Slide 8: Pillar of Success: Fleet Management & Operational Performance
Pillar of Success: Fleet Management & Operational Performance Focus on cost control & quality operations Daily costs per vessel(1) 10,000 Combined Euroseas’ & EuroDry’s fleet 9,000 utilization exceeded 99.4% over last 5 years 8,000 7,000 Outstanding safety and environmental record 6,000 $ / day
Slide 9: Sulfur Emissions Regulations (IMO 2020)
Sulfur Emissions Regulations (IMO 2020) IMO regulation requires by 2020 the use of fuels with a maximum sulfur content of 0.5% vs present limit of 3.5% to minimize effects of acid rain on human health and the environment (forests, rivers, lakes etc). Compliance can be achieved either by using co
Slide 10: Further Considerations For Scrubber Installation
Further Considerations For Scrubber Installation In addition to the cost differential of compliant and high sulfur fuels, the following factors – among others- might also influence the decision to invest in scrubbers: Availability of the two types of fuels at different ports With the big majorit
Slide 11: Our Own Scrubber Strategy
Our Own Scrubber Strategy We are planning to rely on compliant fuel to satisfying the sulfur emissions requirement … …based on a number of reasons: We believe that since 95% of owners will rely on compliant fuels sulfur compliant fuel will soon become available at competitive prices compared to
Slide 12: Other Regulations: Ballast Water Treatment (BWT)
Other Regulations: Ballast Water Treatment (BWT) Ballast Water Treatment Ballast water would require treatment before disposal back to the sea to prevent transfer of organisms from different areas All vessels need to have BWT by their first drydocking after 1/1/2016 in order to be able to trad
Slide 13: Euroseas Ltd – Market Review
E Euroseas Ltd — Market Review
Slide 14: Orderbook-to-fleet ratio
Orderbook/Fleet Ratio, Total Fleet Orderbook as Percentage of Total Fleet Near Lowest Level of the Last 20+ Years 100% 18% 90% 16% Orderbook-to-Fleet ratio 80% 14% Fleet Growth (y-o-y) Orderbook-to-fleet ratio 70% 12% 60% 10% Fleet Growth 50% 8% 40% 6% 30% 4% 20% 2% 10% 0% 0% -2% Source: Clarksons P
Slide 15: Orderbook-to-fleet ratio
Orderbook/Fleet Ratio, Feeders (100-3000 teu) Orderbook as Percentage of Total Fleet Low; Fleet Growth Picked up in 2018 50% 20% Orderbook-to-Fleet ratio 40% 15% Fleet Growth (y-o-y) Orderbook-to-fleet ratio 30% 10% Fleet Growth 20% 5% 10% 0% 0% -10% -5% Source: Clarksons Page 15
Slide 16: 1000-3000 teu Fleet Age Profile & Orderbook Delivery Schedule
1000-3000 teu Fleet Age Profile & Orderbook Delivery Schedule Feeder Containership Age Profile Container Feeder Orderbook m TEU m TEU 1.2 0.20 5.3% 33% 5.1% 5.2% 17% of the 1-3,000 teu 0% fleet is over 0.15 0.62 0.8 aged!!! 0.15 0.08 0.12 0% 18% 0.06 17% -1.8% 0.10 15% 0.18 0.24 13% 0.05 0.34 0.4 0.
Slide 17: World GDP & Shipping Demand Growth
World GDP & Shipping Demand Growth Containerized Trade (teu) Containerized Trade - GDP Multiplier 250 14% Trade Growth 2.8 World GDP Growth 200 12% GDP Multiplier 2.4 2010-2018: 4.7% p.a. 10% 2.0 Trade multiplier million teu p.a. 150 Trade Growth 8% 1.6 1996-2008: 9.2% p.a. 100 6% 1.2 4% 0.8 50 2% 0
Slide 18: Containership 1-Yr Charter Rates, 2009-2018
Containership 1-Yr Charter Rates, 2009-2018 Containership Markets Have Recovered From All Time Historical Lows 16,000 14,000 2500 teu 1700 teu 12,000 10,000 $ / day 8,000 6,000 4,000 2,000 0 09.01 10.01 11.01 12.01 13.01 14.01 15.01 16.01 17.01 18.01 Source: Clarksons Page 18
Slide 19: Market Snapshot – Investment Opportunities
Market Snapshot – Investment Opportunities 1700 teu 1-Year Time Charter Rate 10 Year Old Historical Price Range $/day $m 35,000 40 35 Avg 1700teu Price (excl. 30,000 Avg 1700teu Rate 2 highest and 2 lowest (excl. 2 highest and 2 years) lowest years) 30 25,000 25 20,000 20 15,000 15 10,000 10 5,000 5
Slide 20: Outlook Summary - Containerships
Outlook Summary - Containerships Historically low orderbook despite recent feeder ordering Possibility of supply squeeze due to regulations Demand depends on the world GDP growth and consumption trends in the developed world Far East – Europe remains the key trade route to generate demand fo
Slide 21: Euroseas Ltd – Market Strategy & Position
Euroseas Ltd – Market Strategy & Position
Slide 22: Vessels Employment Chart--updated
Vessels Employment Chart--updated Coverage : About 30% in 2019 (based on min durations) 2018 2019 Jan Feb Mar Apr May June Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May June Jul Aug Sep Oct Nov Dec Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 JOANNA $7,000 $10,500 $6,80$7,000 EM CORFU $11,000 $9,950 AEGEAN EXPRESS $8,250
Slide 23: Container Companies Total Operating And G&A Costs – 2018 H1
Container Companies Total Operating And G&A Costs – 2018 H1-- Container Companies H1 2018 OPEX 10,000 9,000 G&A+Mgt Fees 8,000 Running Exp 7,000 USD per Vessel/Day 6,000 5,000 4,000 3,000 2,000 1,000 0 ESEA Vesels own: 8.5 18 96.6 53.4 11.9 54.7 Market Peers 23 Note: Market peers include: DAC, DCIX,
Slide 24: Euroseas - Debt Profile Pre- and Post-Refinancing
Euroseas - Debt Profile Pre- and Post-Refinancing Debt Repayment Profile Cash Flow Breakeven $30 Debtestimate Budget as of 9/30/2018 for next 12 $25 months: $20 $/vessel/day OPEX $ 5,550 million $15 $22.4m G&A $ 600 Drydock $ 250 Interest $ 550 $10 $7.9m Pref. Dividend $ 550 $9.4m Subtotal $ 7,500
Slide 25: Euroseas EBITDA Calculator
Euroseas EBITDA Calculator We believe Euroseas is positioned to benefit from any market recovery due to its “benign” leverage which would amplify the market increase for the shareholders The Company’s balance sheet includes a layer of perpetual preferred equity that we treat as debt; but it does
Slide 26: Euroseas - Valuation Comparables
26 Euroseas - Valuation Comparables P / NAV Current EV/2019 EBITDA 3.0x 2.9x 10.0x 9.0x 2.5x 8.0x 8.0x 6.7x 6.8x 7.0x 2.0x 6.0x 1.5x 1.4x 5.0x 4.5x 4.1x 1.2x 4.0x 1.0x 3.0x 0.7x 0.5x 2.0x 0.5x 1.0x 0.0x 0.0x ESEA SSW DAC CMRE GSL ESEA SSW DAC CMRE GSL Source: Comparables - Seaborne Capital Advisors
Slide 27: Why Euroseas?
Why Euroseas? • The containership sector is at an attractive point in the cycle for growth • Focused on feeders, a segment with diversified demand (trade route-wise) • Conservative leverage of about 55% with limited value downside by the steel value of the fleet • Sponsor with significant stake inve
Slide 28: Euroseas Contacts
Euroseas Contacts Euroseas Ltd c/o Eurobulk Ltd 4, Messogiou & Evropis Street 151 24 Maroussi, Greece www.euroseas.gr euroseas@euroseas.gr Tel. +30-211-1804005 or, Tasos Aslidis Nicolas Bornozis Chief Financial Officer Investor Relations Euroseas Ltd Capital Link, Inc. 11 Canterbury Lane 230 Park Av