SEB Nordic Seminar January 2017

Transcription

1 SEB Nordic Seminar January 2017

2 Our story Our Mission We are unique We are competitive Our core business is handling hazardous liquids safely and more efficiently than anyone else in the industry 100+ years of experience A market leader in the chemical tanker industry Integrated shipping and storage with a world wide presence Competitive cost base (Project Felix) Competitive asset utilization (Project Moneyball) We are profitable USD 190m EBITDA 3Q16 YTD Strong COA portfolio supports earnings in weak markets We are gaining strength 35% equity ratio as of 3Q16 Solid cash position Favourable market fundamentals 2015 and 2016 were good years for chemical tankers Fundamental balance in supply/demand over the next two years 2

3 Agenda Company overview Efficiency programs Key financials Going forward Q&A 3

4 Odfjell Group - at a glance We are a leading company in the global market for transportation and storage of bulk liquid chemicals, acids, edible oils and other special products Operate within the three business segments: Chemical Tankers Tank Terminals Odfjell Gas CEO: Kristian Mørch and CFO: Terje Iversen Employees: ~3,000 Background Headquarter in Bergen, Norway Extensive international network with offices in 20 countries Odfjell SE is listed on Oslo Stock Exchange (ODF and ODF) Laurence W. Odfjell (Chairman) controls 34% of the shares 3 NOK per share Shareholder Share price development last 12 months 10 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 ODF (A-share) ODFB (B-share) Shareholder overview A-shares B-shares % votes % shares Norchem (Odfjell family) % 34.0 % Odfjell SE (Treasury) % 9.5 % Svenska Handelsbanken % 5.5 % Morgan Stanley & Co Intl % 4.1 % Rederiet Odfjell AS % 4.0 % Top 5 shareholders % 57.0 % Other shareholders % 43.0 % Total shareholders % % 1. 3Q16 EBITDA 2. Nominee account 3. Adjusted for treasury shares 4

5 Odfjell Group - 3Q16 highlights LPG/Ethylene Tank terminals Chemical tankers Net result 3Q16 of USD 16 mill (same as 2Q16), and EBITDA of USD 60 mill (2Q16 of USD 61 mill) Continued softer chemical tanker spot market, however, our utilization remained high due to contract nominations Annualised EBITDA 1, USD mill Balance sheet continues to strengthen Stable results from Odfjell Terminals Signed agreement to sell our share in Oman tank terminal, with a gain of USD 46 mill Signed final agreement for construction of stainless steel chemical tankers, the largest and most efficient stainless steel chemical tankers ever built Odfix index 2008 Odfix quarterly average Index, 1990= Odfix average % change 3Q vs. 2Q Chemical tanker spot earnings index (midcycle = 100) Source: Clarkson Platou % -5% 1. Proportional consolidation method according to actual historical ownership share 5

6 Odfjell Group - Our business segments 1 100% 51% Chemical Tankers EBITDA: 80% 2 Assets: 82% 3 Tank Terminals EBITDA: 19% 2 Assets: 16% 3 Operates a fleet of ~80 owned and timecharter/bareboat vessels 44 owned and 35 time-charter/bareboat Focus on the deep sea market and large stainless steel vessels One of the world s largest chemical tanker companies We ship 600+ products with 600+ customers every year Recently signed final agreement for ,000 dwt stainless steel newbuildings Joint-venture between Odfjell SE (51%) and Lindsay Goldberg (49%) Total capacity of ~ 4.8m cbm A global network through strategic partnerships 9 operational tank terminals located in key ports around the world Focus on key hubs for petroleum and chemical products in addition to synergies with chemical tankers Further projects under development and being explored 1. On-going exit from Odfjell Gas 2. Share of Odfjell SE 3Q16 EBITDA 3. Share of Odfjell SE 3Q16 total assets 6

7 Agenda Company overview Efficiency programs Key financials Going forward Q&A 7

8 Project Felix: Consisted of more than 400 work streams, which covered all aspects of our business A Project Felix work streams General and administrative expenses Example initiatives Reduction of 100+ FTEs Across Tankers, Ship Management and Administration Other G&A initiatives Revised pension agreement, divestment of HQ building etc. B Vessel operating expenses Reduction of non-crew OPEX by >25% for internally managed ships Technical accounts, provision and stores, ship general expenses C Odfjell Tankers profitability Exit from unprofitable Intra-EU trade Divestment of four vessels (Bracaria, Balearia, Brasilia and Pilot) Improved competitiveness in USG Far East trade lane through increased frequency D Bunker costs Real time monitoring of fleet consumption figures Retrofitting projects to improve energy efficiency for core tonnage 8

9 Project Felix: USD 109 million improvement ambition successfully achieved by end of 2015 Improvement ambition for Project Felix Indicative only = USD 100 million Pre-Felix expected result G&A OPEX OT Profitability Bunker costs A B C D Post-Felix result Significant cost reduction Reduction of crew- and technical cost Exit unprofitable trades and core optimization Reduced consumption Full-scale implementation kicked off January 2015, and effect realization completed by December

10 Project Felix is substituted by Project Moneyball, which is focused on process excellence and efficiency gains To leverage the positive momentum in our organization, Project Moneyball was launched in January 2015, targeting operational excellence In Project Moneyball we combine our internal expertise with external data sources in order for Odfjell to conquer some of the largest challenges facing our industry today Port time for chemical tanker operators has increased significantly over the last decade due to port infrastructure not being able to keep up with a growing global fleet We want to find solutions that are unique to Odfjell to reduce port time for our vessels and in general improve our operational efficiency Project Moneyball is based on wide implementation of business intelligence tools and has sparked a data driven and fact based way of running our business It's unbelievable how much you don't know about the game you've been playing all your life. -Mickey Mantle 10

11 Project Moneyball: Working with several initiatives to reduce port time Project Moneyball Type of initiatives Use KPIs and statistics as a means to improve vessels operational performance Overall ambition: reduce port time to increase Odfjell s fleet utilization Main areas of improvement: Commercial and cargo program Operational efficiency Leverage possibilities from increased data availability Involving several external stakeholders such as customers, terminals, port authorities and brokers Consolidate cargo programs to reduce number of berth calls Improved execution through better planning processes and new tools Strategic partnerships Automate certain administrative tasks to free up capacity 11

12 Project Moneyball: Successful project implementation and significant port efficiency improvement in 2016 Project Moneyball status, YTD November 2016 Implementation of Project Moneyball is 71% completed Project implementation progress Port efficiency is 8% better than benchmark and 5% better than 2016 target Odfjell port efficiency index -8% 100% 100% 97% 92% 71% Full implementation YTD status Historic benchmark 2016 target YTD actual 12

13 Agenda Company overview Efficiency programs Key financials Going forward Q&A 13

14 Odfjell Group Quarterly figures 1 Quarterly Gross Revenue, EBITDA and net result, USD millions Gross Revenue Q Q Q Q Q Q Q Q Q EBITDA Q Q Q Q Q Q Q Q Q Net Result Q Q Q Q Q Q Q Q Q Proportional consolidation method 14

15 Odfjell Group Balance sheet as of ¹ Assets, USD millions Ships and newbuilding contracts Other non-current assets/receivables 38 Investment in associates and JV s 359 Total non-current assets Cash and cash equivalent 191 Other current assets 121 Total current assets 311 Assets held for sale 16 Total assets Equity and liabilities, USD millions Total equity 683 Non-current liabilities and derivatives 31 Non-current interest bearing debt 936 Total non-current liabilities 967 Current portion of interest bearing debt 197 Other current liabilities and derivatives 83 Total current liabilities 279 Liabilities held for sale - Total equity and liabilities Cash balance of USD 191 mill - excluding JV s cash Net investment in tank terminals JV s USD 310 mill Equity ratio 35.4% (34.6% end 2Q) Asset held for sale consist of planned vessel 1. Equity method 15

16 Odfjell Group Capital expenditure programme as of USD millions Remaining Chemical Tankers Newbuildings 4 x 49,000 dwt¹ Docking Other investments * Odfjell Gas, 100% 2 Sinopacific, 1 x 17,000 cbm TBD Sinopacific, 4 x 22,000 cbm TBD TBD Tank Terminals, 100% Planned capex Construction cost USD 60 mill per vessel, payment terms 3 x , delivery June The construction of gas newbuildings is substantially delayed * Includes propeller upgrade and Ballast Water Treatment 16

17 Financial ratios reflecting the turnaround of Odfjell Gross interest bearing debt / EBITDA Equity ratio 20.9x 27.7x 17.6x 43% 37% 31% 33% 35% 8.5x 5.6x YTD annualised YTD annualised 2 Return on capital employed (ROCE) 1 Return on equity (ROE) 7% 11% 2% -3% -3% -1% YTD annualised 2-12% -14% -12% -6% YTD annualised 2 Note figures are by the equity method and not adjusted for extraordinary items 1. EBIT divided by end of period total equity plus net interest bearing debt 2. Figures annualised based on YTD as of 3Q

18 Agenda Company overview Efficiency programs Key financials Going forward Q&A 18

19 0% 2% 2% 1% 1% 1% 3% 4% 5% 4% 4% 6% 5% 6% 5% 5% 9% 8% 9% 10% 10% 13% 2015 & 2016 have been good years in the chemical tanker industry, mainly due to limited growth in supply Chemical tanker supply 1, demand and TC rate development Year-on-year percentage growth Supply growth (dwt) Demand growth (tonne-miles) Steensland J19 TCE USD k / day 14% 25 12% 10% 8% 6% 4% 2% 0% -2% and 2016 have been the two best years for chemical tankers since 2008 Stable demand growth in the period (with the exception of 2014) More modest fleet growth in the period Source: Clarksons, Steensland 1) Chemical tankers are defined as tankers that are suitable for chemical trades, including chemical parcel and chemical bulk tankers. Chemical tanker fleet includes IMO I tankers, IMO III tankers excluding those classed as product tankers, tankers of an unknown IMO grade below 25k dwt and stainless steel tankers not designated as specialised tankers 19

20 The market consensus is a balanced market over the next two years which also is our view Consensus 1 chemical tanker supply and demand forecast, E Year-on-year percentage growth 7% 6.7% CAGR 16-18E: Demand: 4.6% Supply: 4.6% Supply Demand We expect the market to be well balanced over the next two years Slowing fleet growth after 2016 and limited downside risk in the current orderbook (new orders delivered earliest 2019) 6% 5% 4% 4.4% 4.6% 4.8% 5.1% Ramp-up of petrochemical exports in the US Gulf and Middle East driving long haul trades Higher global economic growth Chinese economy shifting to consumer driven De-consolidation is reversing 3% 2.4% We are currently experiencing a softer spot market mainly driven by: 2% 1% 0% 2016E 2017E 2018E Weaker CPP market Higher competition due to vessel deliveries and product tanker swinging into the market Our COA portfolio provides a limits the impact of a volatile and softer market Source: Consensus based on an average of Swedbank, Clarksons, Steensland (only fleet growth), IMF (Demand growth) and Odfjell (only fleet growth) Note: There are differences between fleet definitions 20

21 Where are we today? Smarter In-house competencies and systems representing 100+ years of experience We have implemented new data driven and analytical decision tools Leaner A leaner and more fit organisation ~USD 100m in Felix effect is realized Stronger Stronger balance sheet Have the financial capability to act quickly as opportunities may arise More focused On-going exit from Odfjell Gas Focusing investment and growth around our core fleet Sophisticated tonnage Amongst the few operator and owners of large sophisticated chemical tankers + integrated logistics via Odfjell Terminals 21

22 Key focus areas going forward Growth Tonnage renewal / fleet growth Take part in consolidation High quality service Safety, predictability and reliability Operational excellence Tankers: OPEX + SG&A Terminals: implementing operational excellence project Financial strength Further improve balance sheet to be able to act quickly as opportunities may arise Cost of capital Terminals back to meaningful profitability levels Implementation of the «value creation program» 22

23 Agenda Company overview Efficiency programs Key financials Going forward Q&A 23

24 20 17 OD FJELL SE Conrad Mohrs veg 29, P.O. Box 6101 Postterminalen 5892 Bergen, Norway Tel: Fax: Org. no: Investor Relation and Media contact Tom A. Haugen Phone: Mobile: tom.haugen@odfjell.com 24