Odfjell presentasjonsmal

1
A PRESENTATION OF ODFJELL
16 February 2005
2
WHAT WE WANT TO CONVEY

• Odfjell is an industrial shipper with a long term
  perspective
• Stable and positive cash flow
• Tank terminal activity stabilizing factor
• Positive outlook

3
HISTORY

• Regional Trade since 1997 in Asia
• Merger with Seachem in 2000
• Establishment of Odfjell Ahrenkiel Europe in 2004
• Tank Terminals
• Developed since the mid 60s
• Growth in tank terminals late 1990s/early 2000s
• Tank Containers
• Joint-venture with Hoyer since 1999, a sold with
  effect from 1 January 2005

• Corporate
• Established 1916
• Company split in 1980
• Listed on the Oslo Stock Exchange in 1986
• Fleet Development
• Pioneered the chemical tanker trade in the 1950s
• Strong growth through the 1990s
• Newbuilding programs 1994 2011

4
BUSINESS AREAS

• Regional Trade
• Asia/Europe/Brazil/Chile
• 32 ships
• Revenue 111 million
• EBITDA 14 million
• EBIT 8 million
• Total assets 94 million

• Global Trade
• - Leading global operator
• 64 ships and 13 nbs on order
• 6 T/C newbuildings
• - Revenue 703 million
• EBITDA 132 million
• EBIT 71 million
• Total assets 1.3 billion

• Tank Containers
• - 8 176 containers
• - Revenue 57 million
• EBITDA 4 million
• EBIT 2 million
• Total assets
• 43 million

• Tank Terminals
• 6 owned at strategic locations
• Projects in Iran, China and Oman
• - 8 associated terminals
• Revenue 130 million
• EBITDA 49 million
• EBIT 29 million
• Total assets 352 million

SOLD
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INTERNATIONAL ORGANISATION

• Global corporation with head office in Norway
• International network with offices in 18
  countries
• 3,300 employees
• 2,000 international crew members
• 300 Norwegian officers
• 800 international onshore employees
• Common corporate culture
• Streamlined reporting through common ICT systems
• International joint-ventures partners

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CUSTOMERS
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THE CHEMICAL INDUSTRY

• About 1 billion metric tons of organic and
  inorganic chemicals, vegetable oils and animal
  fats and other products are produced annually
• About 2,5 billion metric tons of clean petroleum
  products are produced annually
• Main products organic chemicals (BTX, EDC,
  Acrylo, Glycols, Metanol, etc.), Sulphuric and
  Phosphoric acids, Veg. oils, MTBE, etc.

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SOURCES AND PRODUCTS
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END USES
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GLOBALISATION, NEW PLANTS TRADE PATTERNS
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FROM PRODUCER TO CONSUMER

• Coastal ships
• Barges
• Rail cars
• Trucks
• Pipeline

• Coastal ships
• Barges
• Rail cars
• Trucks
• Pipeline

• Coal
• Gas
• Crude oil

Finished goods producer
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COMMON DENOMINATOR IN ALL MODES

• The same customers
• The same products
• Our ability to handle complicated cargoes
• Capital intensive
• Global aspect

gt SYNERGIES
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A NICHE IN THE WORLD TANKER MARKET

• Characteristics
• Many parcels per voyage
• Many ports per voyage
• A margin business

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A CHEMICAL TANKER VS. A PRODUCT TANKER
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BUSINESS CHARACTERISTICS

• Barriers to entry
• Highly specialised vessels and operation
• Scale Threshold
• Systems, organisation and human resources
• Customer relations Track record
• Contract coverage
• Customer expectations
• Quality Safety Reliability
• On spec and on time delivery
• Frequencies - Regularity
• Many ports for loading and discharging
• Cost efficiency

gt Few large operators/ many smaller
operators
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DEMAND DRIVERS

• Economic growth (industrial production/GDP)
• Regional trends (influencing ton-mile, cargo
  flows)
• Production/consumption
• Imbalances
• Just-in-time delivery
• Frequency, reliability
• A global chemical industry
• Global production global consumption
• Capacity changes
• Additions/deletions
• Types of tonnage vs. demand

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SUSTAINABLE CHEMICAL MARKET GROWTH
Chemicals and plastics growth has outpaced GDP
growth over the last two decades
Global Growth Index (Index Base Year 1985)
Source CMAI March 2002
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CHEMICAL TANKER MARKETDeep sea ships ? 13,000 dwt
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CORE CHEMICAL TANKER MARKETDeep sea ships ?
13,000 dwt, minimum 6 tanks, IMO II, avg tank
size max 3,000 m³
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FREIGHT RATE DEVELOPMENT (Chemicals)
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FACTORS INFLUENCING SUPPLY

• Regulations
• Marpol Annex II revision reclassification of
  other products (veg. oils., MTBE, etc.)
  approved in Oct. 2004
• Newbuildings
• Availability yard and price
• Vetting
• Customer approval/CAP test
• Cost factors
• Scrapping
• 240,000 dwt. in 2003
• 470,000 dwt. in 2004
• More scrapping anticipated in 200506

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NEWBUILDING PRICE INDEX
Source Clarkson
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RECATEGORIZATION OF CARGOES

• IMO adopted revision of current product pollution
  classification
• Vegetable oils to require much stricter hull
  protection
• Also affects products such as methanol, MTBE,
  caustic, etc.
• Likely to be a significant demand factor for
  chemical tankers
• Limited set of compromises on stowage
  requirements, to ease potential transportation
  capacity shortages
• New cargo categorisation regime effective as from
  Jan. 1, 2007

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Recategorisation of Annex II cargoesTanker
segmentation
Current cargo spectrum
Chemical Tanker Domain
Oil Product Tanker Domain
Unregulated cargoes and poll. cat. D
Clean Petroleum Products
Dirty Petroleum Products
Crude Oil
Oil-like Substances
Non-flammable chemicals
Chemicals
Future cargo spectrum
Chemical Tanker Domain
Oil Product Tanker Domain
Unregulated cargoes (OS)
Clean Petroleum Products
Dirty Petroleum Products
Crude Oil
Vegoils, etc.
Non-flammable chemicals
Chemicals
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Core Chemical Deep Sea Fleet Changes 1991 -
2008Current order book, outphasing at 30 (Eur)
and 25 (FE) years
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ORDERBOOKCore fleet ? 13,000 dwt
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MARINE TERMINALS (Chemical capacity in cbm)
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ODFJELL TERMINALS
Rotterdam ?
Quebec ?
Dalian ?
? Onsan
? Ningbo
Houston ?
Singapore ?
Callao ?
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TERMINALS - EUROPE
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TERMINALS - NORTH AMERICA
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TERMINALS - ASIA
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TERMINALS - SOUTH AMERICA
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FINANCIAL HIGHLIGHTS 2004

• Gross revenue reached USD 1 billion
• Daily time-charter earnings in fourth quarter
  2004 were 24 higher than fourth quarter 2003
• Continued high bunker cost
• EBIT in 2004 was USD 106 million, up 36 over
  last year
• Stable results from tank terminal activities
• Sale of tank container joint-venture
• Proposed dividend NOK 4 per share

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GROSS REVENUE
Per Quarter (in USD million)
Accumulated
846 850 907 1 001
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TIME CHARTER INDEX VS. EBITDA
gt Increased EBITDA Capacity
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NET RESULT, CASH FLOW AND RETURN

• Average RoE ROCE
• 1990-00 11.8 10.2
• 2002 8.5 5.7
• 2003 4.1 6.1
• 2004 15.5 8.0

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BALANCE SHEET (31 December 2004)
LIABILITIES EQUITY
ASSETS
Liquid assets
ST debt
Other assets
Tank terminals
LT debt
Vessels nbs
Equity
Equity ratio 32
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LONG TERM DEBT
¹Loan capazity unencumbered assets about usd 400
million
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LONG TERM DEBT
¹Loan capazity unencumbered assets about usd 400
million
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LONG TERM DEBT
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SHARE PRICE DEVELOPMENT



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SHAREHOLDER STRUCTURE

• Odfjell family 35
• Chemlog ApS 24
• 6 Norwegian Funds 11
• Others 30

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SUMMARY

• World economy continuing strong
• Helped by Chinas growth
• Favorable fundamentals
• Remain a long term industrial shipper
• Tank terminal increasingly important
• Strong cash generation
• Future outlook
• Anticipate significantly improved operating
  result in 2005

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BOND

• New source of funding
• Optimize debt structure
• Provide liquidity in the bond issue

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MISSION STATEMENT

• Odfjell shall be a leading, preferred and
  profitable global provider of transportation and
  storage of bulk liquid chemicals, acids, edible
  oils and other special products.
• Odfjell shall be a true logistic service
  provider, capable of combining different modes of
  transportation and storage.
• Odfjell shall provide its customers with safe,
  reliable and efficient services.
• In the execution of its services, Odfjell is to
  meet high quality, safety and environmental
  standards.