Slide 1: Q1 2018 Results
17 May 2018 01.2018 RESULTS
Slide 2: Safe Harbor Statement
Safe Harbor Statement Matters discussed in this release may constitute forward-looking statements. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or
Slide 3: Agenda
Orion purchase price considerations AGENDA 1 Highlights 2 Product tanker market overview and outlook 3 Financial and operating performance 3
Slide 4: Q1 2018 Highlights
Q1 2018 HIGHLIGHTS • USD 100m equity raise in January 2018 for additional growth • EBITDA of USD 37m and Profit before tax of USD 1m • RoIC of 2.4% and Earnings per share of 1 US cent Q1 results • Net Asset Value estimated at USD 857m as of 31 March 2018, corresponding to a NAV/share of USD 11.6 or
Slide 5: Profitable in Q1 2018
PROFITABLE IN Q1 2018 USDm Q1 2018 Q1 2017 2017 P&L TCE Earnings 97 107 397 Gross profit 49 55 200 Sale of vessels 1 0 3 EBITDA 37 44 158 Profit before tax 1 5 3 Balance sheet Equity 892 786 791 NIBD 577 596 620 Cash and cash equivalents 174 215 134 Key figures 0.01 0.10 0.04 Earnings per share (USD
Slide 6: Agenda
Orion purchase price considerations AGENDA 1 Highlights 2 Product tanker market overview and outlook 3 Financial and operating performance 6
Slide 7: Main Market Drivers
MAIN MARKET DRIVERS POSITIVE DRIVERS ✓ Strong global refined product demand underpinned by healthy economic growth ✓ Global clean petroleum product stockpiles have returned to normal levels ✓ New export-oriented refineries coming online in the Middle East from Q2 2018 onwards ✓ Product tanker order
Slide 8: Product Tanker Market Remained Subdued in Q1 2018
PRODUCT TANKER MARKET REMAINED SUBDUED IN Q1 2018 LR2 (TC1) USD ‘000/day MR (average) USD ‘000/day Q1 2018 Q2 to date • LR segment negatively impacted by record heavy refinery • Continued refinery maintenance in the Middle East into April maintenance in the Middle East and crude tanker newbuildings
Slide 9: Product Inventories Back to Normal but Still Drawing
PRODUCT INVENTORIES BACK TO NORMAL BUT STILL DRAWING Global CPP inventories Billion bbl • Stockdrawing continues despite global inventories being close to the 5-year average levels (and below based on days of forward cover) • Price backwardation has reduced floating storage and removed inefficient s
Slide 10: Crude Tanker Newbuildings Cannibalizing Traditional LR Trade in the East
CRUDE TANKER NEWBUILDINGS CANNIBALIZING TRADITIONAL LR TRADE IN THE EAST Crude tanker newbuilding deliveries (m dwt) • Crude tanker newbuilding deliveries remain high in 2018 and 2019 • Crude tanker newbuildings are expected to continue to cannibalize traditional LR trades in the East • LR net migra
Slide 11: Long Term Demand Factors Remain Positive
LONG TERM DEMAND FACTORS REMAIN POSITIVE Middle East refinery capacity net additions (m b/d) +29% • Oil product demand is increasing and the ton-mile demand is positively impacted by an increasing geographic dislocations between the demand for and supply of clean petroleum products • Middle East ref
Slide 12: Order Book at Historical Lows
ORDER BOOK AT HISTORICAL LOWS Product tanker order book as percentage of the fleet • The product tanker order book to fleet ratio currently stands at just below 10%, the second lowest since 1995 • The order book to fleet ratio for the MR segment stands at 10.6% and for the LR2 segment at 14.0% • TOR
Slide 13: Newbuilding Prices Are Coming Off the Lows
NEWBUILDING PRICES ARE COMING OF THE LOWS USDm LR USDm MR ‘000 USD/day LR2 - Newbuilding LR1 - Newbuilding MR - Newbuilding MR - 5 yr. Second-Hand MR 1Yr T/C • Newbuilding prices increased in Q1 2018 despite relatively low newbuilding activity for product tankers. Long order books for main vessel ty
Slide 14: Agenda
Orion purchase price considerations AGENDA 1 Highlights 2 Product tanker market overview and outlook 3 Financial and operating performance 14
Slide 15: TORM Commercially Outperforms Peers in Its Key MR Segment
TORM COMMERCIALLY OUTPERFORMS PEERS IN ITS KEY MR SEGMENT High (incl TORM) Low (incl. TORM) Peer avg (excl. TORM) TORM 30,000 Q1 2018 performance: 25,000 • TORM: USD/day 14,320 • Peer average: USD/day 13,262 MR reported TCE, USD/day 20,000 15,000 10,000 5,000 - TORM MR Q1 15 Q2 15 Q3 15 Q4 15 Q1 16
Slide 16: Significant Operating Leverage
SIGNIFICANT OPERATING LEVERAGE LR2 LR1 Handy MR Unfixed days # of days as of 31 March 2018 31,008 28,566 4,299 4,295 3,278 2,585 18,290 2,233 1,774 19,282 20,908 12,400 2,404 2,523 Of total 87% 99% 100% 2018 2019 2020 earning days Illustrative change in cash flow generation potential for the TORM fl
Slide 17: Fully Integrated Business Model with Competitive Cost Structure
FULLY INTEGRATED BUSINESS MODEL WITH COMPETITIVE COST STRUCTURE Significant reduction in OPEX TORM has trimmed administration expenses OPEX per day (yearly, weighted avg. in USD/day) Admin. expenses (quarterly avg. in USDm) -14% 8,000 7,655 2008 7,193 2009 7,000 6,771 6,673 6,593 2010 6,000 2011 5,0
Slide 18: Net Asset Value Estimated at USD 857m
NET ASSET VALUE ESTIMATED AT USD 857M 31 March 2018 figures, USDm Net LTV of 51% 321 751 1,600 74 2 242 174 1,279 857 Value of vessels Value of Outstanding debt Committed Cash Working Capital Other* Net Asset Value on the water newbuildings CAPEX • Net loan-to-value was 51% ensuring a strong capital
Slide 19: Well-Positioned to Service Future CAPEX Commitments
WELL-POSITIONED TO SERVICE FUTURE CAPEX COMMITMENTS CAPEX and liquidity as of 31 March 2018 (USDm) CAPEX commitments Available liquidity 217 168 242 75 174 465 75 2018 2019 Total Cash position Available working Newbuilding Total available capital facility financing liquidity agreements 19
Slide 20: Favorable Financing Profile with No New Near-Term Maturities
FAVORABLE FINANCING PROFILE WITH NO NEW NEAR-TERM MATURITIES Scheduled debt repayments as of 31 March 2018 (USDm) 65 92 88 751 506 Debt* as of 31 March 2018 2018 repayment 2019 repayment 2020 repayment Hereafter Ample headroom under our attractive covenant package: • Minimum liquidity: USD 75m** • M
Slide 21: Appendix
APPENDIX
Slide 22: TORM at a Glance
TORM AT A GLANCE A world-leading product tanker company Fleet Overview 71 Owned 10 On order • A leading pure-play product tanker owner 5 BB • Large commercial footprint with presence in all key product tanker segments 13 • Strong capital structure to support disciplined growth strategy LR
Slide 23: Fleet Update
FLEET UPDATE As of 31.03.2018 # of Owned Vessels 90 80 7 7 7 7 70 8 60 50 57 56 50 50 40 50 30 20 7 7 9 9 10 7 7 9 11 11 11 0 EoY 2017 Q1 2018 EoY 2018 EoY 2019 EoY 2020 LR2 LR1 MR Handysize Charter-in and Leaseback Vessels 5 5 3 3 3 23
Slide 24: The Reference Company in the Product Tanker Segment
THE REFERENCE COMPANY IN THE PRODUCT TANKER SEGMENT TORM’s superior integrated TORM is a large scale, pure-play operating platform includes product tanker owner, active in all in-house technical and commercial key product tanker segments in management (preferred by customers) order to meet customer
Slide 25: Flexibility to Transport a Wide Range of Different Products
FLEXIBILITY TO TRANSPORT A WIDE RANGE OF DIFFERENT PRODUCTS 25
Slide 26: TORM Has Distributed a Total of USD 48m to Shareholders in 2016 and 2017
TORM HAS DISTRIBUTED A TOTAL OF USD 48M TO SHAREHOLDERS IN 2016 AND 2017 Distribution to shareholders (USDm) 1 • On 12 September 2017, TORM paid a dividend of USD 1.2m, corresponding to a dividend per share of USD 25 0.02 or DKK ~0.13 48 19 3 • During 2016, TORM distributed a total of USD 47m to sha
Slide 27: Oaktree Is the Majority Shareholder and Ownership Has Become More Dispersed
OAKTREE IS THE MAJORITY SHAREHOLDER AND OWNERSHIP HAS BECOME MORE DISPERSED Share information Estimated shareholdings as of 31 January 2018, % TORM’s shares are listed on NASDAQ 100 1 Copenhagen and NASDAQ New York under 13 the tickers TRMD A and TRMD, respectively. 16 Shares 64 6 • 74.2m A-shares,
Slide 28: Management Team with an International Outlook
MANAGEMENT TEAM WITH AN INTERNATIONAL OUTLOOK AND MANY YEARS OF SHIPPING EXPERIENCE Executive Director Senior Management Jacob Meldgaard Christian Søgaard-Christensen ▪ Executive Director in TORM plc ▪ Chief Financial Officer ▪ CEO of TORM A/S since April 2010 ▪ Previously Executive Vice President o
Slide 29: Key Figures
KEY FIGURES Proforma USDm Q1 2018 Q1 2017 2017 2016 2015 Revenue 163 173 657 680 854 EBITDA 37 44 158 200 319 Profit/(loss) before tax 1 5 3 -142 188 Net profit/(loss) excluding impairment charges 1 6 2 43 187 Balance sheet Total assets 1,737 1,699 1,647 1,571 1,867 Equity 892 786 791 781 976 NIBD 5
Slide 30: TORM Tanker Spot Rates versus Industry Benchmark
TORM TANKER SPOT RATES VERSUS INDUSTRY BENCHMARK TORM spot vs. industry benchmark Q1 2018 (USD/day) TORM Benchmark 20,000 +92% +37% 15,000 +18% +34% 10,000 5,000 0 LR2 LR1 MR Handysize TORM spot vs. industry benchmark last 12 months (USD/day) TORM Benchmark 20,000 +74% +43% 15,000 +25% +66% 10,000 5
Slide 31: TORM Has a Spot-Oriented Profile with Significant Leverage to Market Upside
TORM HAS A SPOT-ORIENTED PROFILE WITH SIGNIFICANT LEVERAGE TO MARKET UPSIDE As of 31.03.2018 2018 2019 2020 2018 2019 2020 Owned days LR2 2,757 3,957 3,978 Owned days LR1 1,883 2,585 3,278 MR 13,496 18,706 20,295 Handysize 1,913 2,404 2,523 Total 20,049 27,652 30,074 Charter-in and leaseback days at
Slide 32: TORM's Corporate Social Responsibility
INDUSTRY COOPERATION AND TRANSPARENCY IS KEY TO TORM’S CORPORATE SOCIAL RESPONSIBILITY TORM is actively participating in… TORM has set and communicated on climate targets • UN Global Compact Set climate target: TORM became signatory to the UNGC in 2009 as the first Danish • In 2017, TORM has continu