#1Odfjell SE - Investor presentation June 2020#2Today's agenda Timer 09:00 09:30 Topic Strategy update 09:30 09:50 Finance strategy 09:50 - 10:10 Market update 10:10 10:15 Final remarks 10:15 10:30 Q&A Representative Kristian Mørch, CEO Odfjell SE Terje Iversen, CFO Odfjell SE Bjørn Kristian Røed, Research Odfjell SE Kristian Mørch, CEO Odfjell SE 2#3Introduction ESG Key highlights and operational update Results Strategy update Tank Terminals Capital Allocation Good start to the year. Based on the development so far, we expect 2Q20 results to be better than the 1Q20 results The market Spot market slightly softer, but activity remains good. CPP has helped us in 1Q/2Q COA coverage COA rates continue to be renewed at higher rates, and our COA coverage remains at about 50%. Overall structure of our COA portfolio has strengthened Our performance Our focus Finance We continue to operate safely, with high utilisation of our ships and terminals and we have not yet detected slips in quality of service due to Covid-19 Recent cost cutting and efficiency gains mean we have a very competitive platform which can now focus on OPERATIONS without distractions We have taken precautionary measures to build liquidity reserves due to the uncertain outlook driven by Covid-19 Our platform Our performance during these unprecedented times has shown the resilience and the competitive advantage of our operational platform 3#4Introduction Strategy update ESG Capital Allocation Tank Terminals Covid-19 has been a disruptive factor testing the strength of our platform - We have so far been largely unaffected by challenges created by covid-19 1 Global platform 2 Ship Management DEIL 3 COA coverage Adaptable TC fleet TC-in vessels Pool vessels 58% 60% 60 56% 53% 30 50% 51% 50 25 40 20 15 30 ODFJEL 10 20 5 10 0 0 2015 2016 2017 2018 2019 2020 4Q-1Q-2Q-3Q-4Q-1Q-2Q-3Q-4Q-1Q-mai- 17 18 18 18 18 19 19 19 19 20 20 5 Cargo flexibility Crude tanker Producttanker Chemical tanker Crude CPP Vegoil Organic Inorganic No presence Swing product Target product O Global operations with vessels in all main ports at all times O Local knowledge from 15 offices worldwide In-house ship management for part of our fleet Deep knowledge of our vessels that can be monitored remotely High enough to give protection from weaker markets... ...Low enough to target cargoes with best returns OTC vessels switched by pools and further TCs can be redelivered O Pool vessels gives Odfjell zero downside and exposure to upside Carries 600 different products per year... O Can swing into various products if economics are stronger 160 Odfjell earnings, ODFIX 140 Odfjell relative performance: Chemical tanker spot earnings index (midcycle = 100) 120 100 80 60 2008 2009 Source: Odfjell, Clarksons Platou Securities 2010 2011 2012 2013 2014 4 2015 2016 2017 2018 2019 2020#5Introduction Strategy update ESG Tank Terminals Capital Allocation The economic downturn in 2008-09 showed resilient demand for chemical tankers, Fundamentals looks likely to support our markets in the event of a new downturn Chemical tanker demand during 2008-2009 economic recession Organics Inorganics Vegoils Others Chemical tanker demand development post Covid-19 pandemic +3% 176 179 180 191 12 Outbreak timing O Pandemic struck Asia that accounts for 49% of seaborne imports of chemicals first O Recovery well underway in Asia supporting seaborne trade of chemicals O Regional differences are in general seen as supportive to seaborne trade 12 14 18 56 5557 51 55 53 25 27 GDP recovery 27 25 25 96 86 88 81 Supply growth 2007 2008 2009 2010 Source: ICIS, Odfjell сл 5 2008/09 economic crisis was structural, 2020 crisis due to "self-imposed" lockdowns 2008/09 recovery was quicker in Asia than in the western hemisphere O IMF forecast 2021 GDP growth of 5.8% driven by eased lockdowns and stimulus The weak chemical tanker market post 2008/09 was supply driven, not demand driven O Fleet growth in 2008 and 2009 was 15.4% and 14.9%, respectively Fleet growth in 2020 and 2021 is estimated to 1.4% and 0.4%, respectively#6Introduction Strategy update ESG Tank Terminals Capital Allocation Despite uncertain times, our long term strategy remains intact but we are adapting our short term priorities High level and long term targets Safety performance Zero accidents A Revenue / Top-line Average revenue growth of 10% per year (over time) 57 Profitability Industry leading EBITDA margins Attractive returns for our shareholders Tankers Terminals Benefit from scale advantages. Towards our customers by offering better service (cost, efficiency and predictability) and internally through efficiency gains and reduced unit cost Have a meaningful network of terminals, where we either have operational synergies with Odfjell Tankers or another clear angle for value creation. Terminals should ideally represent a third of our total balance sheet 6 Key focus areas driven by Covid-19 uncertainties Keep everyone safe and healthy QHSE Keep scheduled maintenance to minimum O Keep entire fleet and terminals operational OPERATIONS O Keep delivering to our customers DE-RISK Fill the ships and collect our freight Accelerate refinancing O Increase liquidity to eliminate bond refinancing risk O Reduce capex and spending Keep distractions to a minimum FOCUS Keep engagement levels high#7Introduction ESG Strategy update Tank Terminals Capital Allocation ESG has always been a focus in Odfjell and we have consistently delivered improvements. ESG will continue to be a vital part of our strategy Strategy O Sustainability is included as an integral part of the Odfjell Strategy, with a clear statement of «<Our Impact» together with Vision, Mission and Commitment Our first sustainability report was released in 2018 and we have since then increased reporting on key ESG related topics based on high demand and growing attention O ESG has always been a core focus area for Odfjell. The higher attention on these factors from the finance community is welcomed Environmental O Energy efficency of our fleet has improved more than 30% since 2009 O EEOI reduced by more than 20% since 2008 Ranked number 1 among chemical tankers operators on fleet average EVDI rating since vs 2008 baseline O Ranked number 2 among chemical and product tankers operators on owners with a share of fleet with EEDI improvement Fuel-cell project to be piloted on an Odfjell ship in 2021. This is the first of its kind Social Odfjell do not compromise on safety Our last LTI was in August 2019 O All vendors have signed our corporate conduct principles where we have clear demands on issues like safety, ethics, human rights, discrimination and others Odfjell has a gender diversity programme O Odfjell is a signatory to the UN Global Compact and supports all the ten principles, where number 3 to 6 concerns labor rights Governance O Odfjell have a clear policy on anti- corruption and integrity framework based on the UK Bribery act O Mandatory training and signing of Code of Conduct and anti-corruption policies for all our employees O Odfjell is a member of the Maritime Anti- Corruption Network and the "Say-no" campaign is implemented on all our vessels O Odfjell supports and follow the recommendation on ship recycling ODFJELL Global operations - Our responsibility Sustainability in Odfjell Our Fleet initiatives gives us top ranking among chemical tanker peers and we are the 2nd most active operator retrofitting vessels between chemical and product tanker peers according to third party sources Chemical tankers Fleet average EVDI rating vs 2008 baseline (% above/below) Ddfjell Operator 2 Oparator 3 Operator 4 Operator 5 8% Operator & Operator Operator Operator Operator 10 45 Operator 11 Operator 12 1 0% Operator 14 Operator 15 -3% 21% 20% Jork 14% Operator 3 Operator 5 Ороголо Operator7 Operator 8 Оретабот 9 Operator 10 Oparator 11 Operator12 Operator 13 Operator 14 Operator 15 Chemical/product tankers: Share of fleet w/EEDI improvement 100% Retrofitted Non-atrofit DEEDI are set out in the M02050 initial strategy The 2000 and 2050 targets are 40% and 70% improvement vs. The 2008 baseline The above highlights the share of the operators fleet average that is above/below the 2008 baseline The above measures how actively operators are retrofitting vessels within the producchemical sarker peer group Source Of 4 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 7 13 Odfjell Anti-corruption course Anti-Corruption E-learning Course Merry ODFJELL Anti-Corruption E-Learning +SHOW INFO OPEN IN NEW TAB NEXT >#8Introduction Strategy update ESG Tank Terminals Capital Allocation Odfjell Terminals US has secured a refinancing of its debt facility that enables the terminal to execute on its growth potential Odfjell Terminals Houston BAY15- STORAGE BILDG. 0000 BAY #14 Phase 1: Bay 17 BAY 18 STORAGE BLDG. BAY 105 BAY 14 Phase 2: Bay 13 Phase 3: The Point (partly financed) BAY B WHARF #1 FROPERTY LIV 0000 0000 (*) The Point Development Current capacity: 380k cbm, 119 tanks O Built: 1983 O Capacity growth potential: 180k 200k cbm © 2019 EBITDA (Odfjell SE share): USD 19 mill BAY #19 O Capex plan: Bring three tanks back into service O Construction period: 2019-2020 O Capex projection range (Odfjell SE share): USD 1.8 - USD 2.5 mill O Estimated EBITDA (Odfjell SE share): USD 0.4 - USD 0.5 mill 8 O Capex plan: New speciality chemical tanks servicing truck, rail, ship and barge modalities O Planned new capacity: 30k - 35k cbm OFID to be concluded shortly O Construction period: 2021-2022 O Capex projection range (Odfjell SE share): USD 23 USD 25 mill - O Estimated EBITDA range (Odfjell SE share): USD 2.8 - USD 4.3 mill 00000be BAY BAY BAY BAY O Plan: New speciality chemical tanks servicing truck, rail, ship, barge and pipeline modalities O Planned capacity: 150k - 165k cbm Two deep water docks O FID to be taken when anchor customer signed and attractive returns secured O Construction period: 2022 - 2026 O Capex projection (Odfjell SE share): USD 88 USD 113 mill -#9Introduction Capital Allocation priorities Strategy update ESG Tank Terminals Capital Allocation Odfjell Tankers Newbuildings fully funded and zero capex or investments plans beyond 2020. Any growth needs to be capital light and have limited effect on our balance sheet Odfjell Terminals To remain self-funded after successful refinancing. Growth is focused on our Houston terminal and any further accretive growth plans to be considered on a case by case basis De- leveraging Reduce our debt levels and ensure we reach our target of low break-even levels (Market dependent) Dividends Establish a fixed and sustainable dividend policy and return cash flow to shareholders (Market dependent) 9#10Agenda Strategy update O Finance strategy O Market update O Final remarks ODFJELL#11Finance strategy Efficient capital structure... DEBT O Reduce debt COST O Optimise debt structure O Flexible debt structure O Lower cost of equity ...And meet relevant financial targets... O Improved Equity ratio ...That enables us to: O Lower daily break-even O Optimise debt structure according to collateral O Lower cost of capital Have attractive capital resources O Manage risk Accommodate operational strategy Have a competitive cost of capital Secure growth and flexibility Secure attractive returns to shareholders Returns through improved ROIC O Improved free cash flow to equity Having an efficient capital structure is key to ensure we succeed on our finance strategy 11#12Efficient capital structure Debt Equity Financial targets LTV & Equity ratio Break-even FCF to equity ROIC Long-term priority Reducing debt and reduce our daily cash break-even remains a priority Description $ Secured and amortized debt BOND $ Today, USD mill Target range, USD mill USD/day effect: 962 200 • Non-amortising debt 234 250 DEBT • Extend average amortization profile (in years to pay down debt to zero) 8,5 12 Unencumbered assets, including 15 75 undrawn revolvers EINONE • Total debt * Excludes right of use assets (operational leases) 550 650 750 1,196 900 12 Reduction: USD 850/day Last 12 months achievements: O Newbuilding deliveries drives debt development in the short run Reduction: USD 0-250/day Reduction: USD 2,075/day OUSD 62 mill bond and replaced with USD 32 mill tap issue w/lower margins Net reduction of USD 30 mill together with lower margins reduced break-even by USD150/day 011 of 14 amort. Profiles extended USD2,500/day reduction on 9 vessels O USD340/day redcuction for entire fleet Reduction: USD 200/day O Refinanced unencumbered assets to build liquidity reserves Reduction: USD 3,375/day O Refinancing measurements has contributed to lower our fleet's break- even by USD 290/day the last 12 months#13Efficient capital structure Debt Equity LTV & Equity ratio Financial targets Break-even FCF to equity ROIC Long-term priority Efficient capital structure means having access to various capital sources to secure flexibility and competitive cost of capital 1 Financial initiatives being taken Jan-20 tap issues 33 Comments Bond tap issues concluded in Jan-20 generating proceeds of USD 33 mill Concluded Unencumbered vessels 15 O Refinanced two mature unencumbered vessels in May 2 OTD sales proceeds 27 O Sale of OTD (unrelated to financial market turbulence) To be Concluded Early refi of low LTV vessels 3 Liquidity facility In processes of refinancing some vessels with a low LTV O In a process to secure a new liquidity facility ODF08 -83 The above initiatives to profice liquidity to redeem Jan-21 bond at maturity if needed Strategy RCF O Possibility to repay our revolver to keep LTV and interest rate expenses at sustainable/unchanged levels 13#14Efficient capital structure Debt Equity Financial targets LTV & Equity ratio Break-even FCF to equity ROIC Long-term priority Our shares are trading at significant discount to underlying values, which means our cost of capital remains to high despite attractive cost of debt Funding sources Margin 6.0% 6.0% 5.8% 5.5% 5.0% 4.9% 5.0% 4.5% 4.0% 3.8% 3.6% 3.5% 3.0% 2.5% 2.5% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% ୮ Mortgage funding Sale/lease back TC/BB Bonds Equity? jun-19 mar-20 Source: Odfjell, estimated broker values, * Valuation only accounts for Odfjell Tankers on-balance sheet vessels and their associated debt (i.e. no corporate or JV factors included) Equity Odfjell Tankers external fleet valuation Mar-20 (USD mill) (excludes TC/BB vessels) Market value fleet Equity instalments NB Excess market value NB 1,448 18 47 Total 1,513 Odfjell Tankers vessel debt 962 Net fleet value 551 Odfjell JVs equity book value Mar-20 (USD mill) Odfjell Terminals book equity value 147 Odfjell Gas book equity value 16#15Debt Efficient capital structure Equity Financial targets Long-term priority FCF to equity ROIC LTV & Equity ratio Break-even We are below our target on LTV and equity ratio 60% Equity ratio Equity ratio ex IFRS 16 50% 40% 30-40% 31% 28% 30% Equity ratio 20% 39% 41% 34% 36% 37% 38% 28% 30% 31% 33% 33% 27% 25% 10% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20 Target 80% 70% 60% 62% 63% 63% 64% 59% 55-60% 50% Loan-to- 40% Value 30% 20% 10% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20 Target 15 We got a self-imposed target of having an equity ratio of 30-40 per cent We are currently below our target at 27% This underlines our strategy to focus on de- leveraging our balance sheet going forward O Weak markets has made us refinance vessels with low LTVs We still got some headroom to add leverage if needed... ...but our focus is to reduce our LTV going forward when the market development allows for this#16Efficient capital structure Debt Equity LTV & Equity ratio Financial targets Break-even FCF to equity ROIC Long-term priority We continue to focus on reducing our cash break-even in order to generate positive cash flows in any market cycle Odfjell Tankers historical Break-even (USD/day) 30,000 Cost savings initatives 26,099 Capital structure Initiatives 25,000 23,137 22,851 21,393 21,544 21,148 20,084 20,000 18,000/ 19,500 15,000 10,000 5,000 2014 2015 2016 2017 2018 2019 mar-20 Target 16 Break-even comments We target to lower our cash break-even to USD18,000 - USD19,500 per day This positions us to generate positive cash flow in every cycle We believe this will lower our cost of capital and improve our competitiveness in the future This is to ensure we can deliver on our financial strategy Break-even levels increased in 2019 driven by increased debt and reduced number of operating days of our owned fleet Timing to successfully reach these levels are market dependent... ... But we expect to reach this level by 2022 should the current earnings environment continue through 2020 and 2021#17Efficient capital structure Debt Equity LTV & Equity ratio Financial targets Break-even FCF to equity ROIC Long-term priority Free cash flow should improve in 2021 after completion of newbuilding deliveries - Lower debt repayments are a key to increase free cash flow to equity Annual free cash flow Cash flow from operations Cash flow from investments Annual free cash flow to equity*** Cash flow operations Debt amortisations Adj. CF from investments Free cash flow to equity to changes in freight rates and debt structure 48 200 180 200 126 126 27 33 150 24 150 3 70 123 5 100 28 126 151 151 100 50 94 98 160 163 57 54 43 123 132 50 0 94 98 -24 -26 -25 -25 54 43 -50 -99 -123 0 -25 -24 -24 -16 -30 -25 -25 -25 24 -100 -202 -56 -50 -150 -25 -90 -93 -105-108 -99 -104-108 -105 -100 0 -200 -76 -21 -150 -76 -81 -31 -250 2015 2016 2017 2018 2019 2020* 2021**2022** 2015 2016 2017 2018 2019 2020* 2021** 2022** Free Cash flow to equity (2020)* Freight rate (A1.000/day) Lower B/E Total sensitivity (A1,000/day) to FCF to Equity O Free cash flow in recent years impacted by newbuilding deliveries O Zero capex from 2021 and onwards to improve free cash flow generation Our debt amortisation makes free cash flow after debt repayments a more relevant parameter O The lower capex is set to improve our free cash flow to equity in the years to come Assuming TCE rates reaches last 5-year average, Free Cash flow to equity reaches USD 27 - USD 33 mill in 2021/22 * Includes annualised 1Q20 operating cash flow less 2020 newbuilding capex and annual docking/other capex of USD 25 mill per year ** Cash flow from operations reflecting average TCE rates 5 years And our free cash flow to equity is highly sensitive to improved freight rates lower break-even USD 48 mill of free cash flow to equity to be generated for every USD1,000/day higher freight rates and every USD1,000/day lower break-even costs *** Free cash flow to equity calculated by operating cash flow less investment cash flow less debt amortisations. Investment capex adjusted for non-recurring items like sales gains received from JVs and newbuilding instalments 17#18Efficient capital structure Debt Equity Financial targets LTV & Equity ratio Break-even FCF to equity ROIC Long-term priority Our terminal restructuring and fleet renewals will increase returns going forward Terminal restructuring & Fleet renewals Odfjell Terminals ROIC 5% 4% 11% Odfjell Tankers ROIC 13% 1% 1% Odfjell Tankers fleet renewals ROIC (1Q20) 6% Newbuildings* 4% CTG acquisition & pool 8% 4% 2017 2018 2019 1Q-20 2017 2018 2019 1Q-20 Sinochem bareboat & pool 2xTC-in newbuilding -4% 13% A stronger portfolio after sale of terminals 28 vessel transactions last two years O Reorganisation and new JV structure A leaner and more cost-effective company O Replacing expensive & inefficient charters Added capital effective pool structures New vessels are positively contributing to our returns * ROIC from newbuildings reflects Jan-April performance and reflects maiden voyages and delivery costs. Performance after maiden voyage reflects the positive contribution to our returns from our newbuilding programme ** Odfjell Tankers ROIC reflects underlying results and does not take corporate G&A into account#19Efficient capital structure Debt Equity LTV & Equity ratio Financial targets Break-even FCF to equity ROIC Long-term priority Optimise our capital structure by lower debt and reduce our break-even remains a priority - We are about to secure liquidity to meet upcoming debt maturities Debt maturities under control Reduce debt a key focus Lower our break-even levels Bcient captal structure We are in the process to secure USD 142 mill of liquidity to redeem Jan-21 bond if refinancing is not available - If so, proceeds will be used to reduce revolver Boient capital structure Add debt section on how we plan to reduce debt - Include what has been done Financial targets Cash break-even development since June 2019 Financial natives being ab Jan 20 Comments added in -20 gading proce Concluded Dark Facebook Totalco USD 15 financial market turbulence Totalcar proceeds of USD 27 mil Fere of Treads Diaproofing sow vessels with alow LTV. Total caihprosseds ofSD 50 ill To be Concludon aprosto savsko-texey Total cashpres of USD 3 D Stregto refrance Jay21 bond face is not right U50825mill bend to be redeemed Strategy H2 Robert TV and pincharged mas Description Seared and amorted debt Noordeb Today, USD mil Target range, USD mill USD dayt Last 12 months achievement Reduction USD850/day Reduction USD -250 day Neing deliveries dadebt development inthe shortrin USD2 mon 2pas Net USD 20 Endpo Extend average amortization profile Reduction yarapay down debt USD 2,075/day US con on the USD040/day forthefee DEBT Unencumbered essets, including unde - Total debi Reduction party as meased procedste 5,000 USD 200 Reduction 1,196 USD 3,375/dy Odjel Tankers historical Break-eran (USD/day) Cost savings in tatives Break-even comments Morget to lower cashbreak evento LED1000 1500day Capital structure initiatives This post genesta posa ca flow invay cyra 21544 We believe the viveror cost of capital and inver competisinthe har 1800 2018 2019 Improve FCF to equity Financial targets Lagempty) Free cash flow should improve in 2021 after completion of newbuilding deliveries - Lower debt repayments are a key to increase free cash flow to equity Annus free cash flow Annual free cash flow to equity™ Free cash flow to equity to changes in height rates and debt structure Cash flow from operations from Co ■ OF tominostor Fleet renewals with accretive returns Financial targets Our terminal restructuring and fleet renewals to increasingly contribute with stronger returns going forward Terminal restructuring & Fleet renewals 2015 2016 2017 2018 2019 2020 2021 2022** 2015 2016 2017 2018 2018 2830 20313822 Free Cash Freight Love BE Tositivity foto quy (1.000) (41,000/day) to FCF to E This is to ensure we can deler onour fancial strategy Break-ever 2018 d by ineased dab and reduced number af operating days of our red feet Timing reach the event dependent 9. But we teach the level by 2022 should cascondine tagh 2020 2021 he can recy budd Decape fra 2021 and onwards to improve fee cash flowg Du deltamorinnakes free cash/low after del The mar capetteimprove our tea can flow to y the years reaches lowout USD 27-USD 13 mill 2021/22 And out equity is highly sensi to improved gelraven UGD4fchfety tebe LED1300 higher fight and everyday lower banca Cowg casted four content setting Have attractive capital resources Manage risk Accommodate operational strategy Have a competitive cost of capital Secure growth and flexibility Secure attractive returns to shareholders 19 Defjell Terminals ROC Ofers RCIC Cofjell Tankers fleet renewals CC (1020) 2017 2018 2019 10:20 A stronger portfol Rosganisation and s Grande company 02B vessel transactionel at two years Newbuildings Cod Selembab p T Dinewbuilding De New veads are positively contribute gts our Added capta effective pool aces#20Agenda Strategy update O Finance strategy O Market update O Final remarks ODFJELL#21Our markets was tightening ahead of Covid-19 with demand surpassing fleet growth for two years despite various negative factors impacting our markets Weak CPP market & high influx of swing tonnage Organic chemical plant start-up's & strong vegoil exports counters slower trade-war related economic growth/sentiment Attack on Saudi oil installations IMO 2020 & reduced swing tonnage Covid-19 Annual growth, % 12 9 6 3 0 -3 -6 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 Net fleet growth (%) Tonne-mile demand growth (%) O Tonne-mile demand has surpassed net fleet growth for chemical tankers since the second quarter of 2018 Swing tonnage driven by a weak CPP market has been a key dampening effect on the speed of the recovery of our markets through 2018 and first half of 2019 The stronger markets we experienced before Covid-19 plays a role in why the impact from the pandemic has not been as severe as initially feared as fleet utilisation was improving 21#22Organic & inorcanic chemicals continued with strong demand in 1Q20 while Vegoil shipments were initially negatively affected by Covid-19 Weak CPP market & high influx of swing tonnage 22 25 20 Billion TM 15 15 10 10 5 LO 0 9 Organic chemical plant start-up's & strong vegoil exports counters slower trade-war related economic growth/sentiment Attack on Saudi oil installations IMO 2020 & reduced swing tonnage Covid-19 Annual growth, % 12 6 3 0 -3 -6 -15 2018Q2 2018Q3 Net fleet growth (%) 2018Q4 Tonne-mile demand growth (%) 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 Methanol EG SA Vegoils Other O Tonne-mile demand has surpassed net fleet growth for chemical tankers since the second quarter of 2018 -5 -10 Swing tonnage driven by a weak CPP market has been a key dampening effect on the speed of the recovery of our markets through 2018 and first half of 2019 The stronger markets we experienced before Covid-19 plays a role in why the impact from the pandemic has not been as severe as initially feared as fleet utilisation was improving 22#23The chemical industry is considered an essential industry in most countries Timing of outbreak and oil price collapse has neutralized the effect so far... Prospects and market update Covid-19 has so far had limited overall effect on chemical tankers as it has impacted key areas at different times - COA volumes began to weaken end-1020 y/y growth in global port calls (total shipping) -USA -Europe (5) Chima 22 Phase 1: China 21,3% Phase 2: Europe Phase 3: USA 22 22 The chemical industry 20 20 18 16 14 18 18 16 16 14 14 12,3% 11,5% 12 12 10 10 10 8 7,2% 5,6% 6 2.5% Globall Global Global Global Global Global import share. export share import share export share import share export share. O The chemical industry is considered as an essential industry, therefore production was kept up and there was no immediate reaction to the pandemic The pandemic accelerated in regions at different times has kept seaborne trade fairly resilient in the initial phases of the pandemic where pockets of demand was still found O Exports of excess cargoes originally meant for domestic consumption mitigated reduced import volumes in the initial phase in both China and Europe We started to see a weakening sentiment and volumes in our markets towards the end of the first quarter which could spill over to the 2nd quarter We serve various industries. Some industries like pharma, home supplies and packaging has seen increased demand, some are unaffected, major consumers of chemicals like the auto and construction industries are heavily affected. Therefore, the future development of these industries are key demand drivers to tum volumes in a positive direction There are encouraging signs from China and it looks like Europe and the US are now starting to tentatively open up their economies. Still, the outlook and speed off a recovery in the global economy is highly uncertain Source Clarkson Platou Secuiel Saly, Spain, Germany, France, LO Regional outbreaks Prospects and market update Oil price drop improved Chemical producers' margins and has supported high operating rates from producers demanding liquid chemicals Chemical feedstock prices (USD/tonne) Methanol producer margins MTO, PE & PS operating rates % (China) 650 250 100 600 200 90 550 150 77% 500 100 50 450 400 350 01.09.2019 01.11.2019 01.01.2020 01.03.2020 - Europe 01.05.2020 MTO Week 300 250 Ethylene Glycol producer margins PET & PTA operating rates % (China) 200 150 800 84% 80 100 200 50 0 0 Jan-19 W-Jul-19 Ju-19 1-Jan-19 1-mal-19 1-Sep-19 1-jan-20 1-mal-20 -200 -Ethane US-Naphtha US Naphtha Far East Еигоре PTA Week Week PET (Fiber grade) O Drop in oil prices has reduced the major cost advantage for gas based US chemical producers Son Defel SE Argus Source: Odfjell 1Q20 presentation Feedstock dynamic - The chemical industry has been considered an essential industry in most countries O Operations has therefore continued throughout the Covid-19 outbreak Some plant shut downs, reduced operating rates and deferred start-up reported O China impact limited by Lunar holiday, export rebates and heavy port congestion Europe impact limited by strong exports and a strong CPP market O US impact has been fairly muted except exports to US and South America being weak O Lower oil prices led to lower naphtha prices, the main feedstock for chemical production This led to strong demand for liquid chemical intermediates into production of solids O Asian producers were main drivers which supported deep-sea shipments But US producers still produces better margins than European and Asian producers PET (Brad) - - 2010 Aug Lower feedstock costs also for Naphtha has kept operating rates in Asia/China high for end-user products and supportive of liquid chemical tanker demand. Industry diversification O The chemical industry serves a wide range of products in our "everyday" needs O This has supported chemical tanker demand before and looks to do so again There are, and will be, both winners and loosers on a product specific basis from Covid-19 10 23 23#24... And our end-user demand and cargo mix is highly diversified - The food industry followed by the construction and automobile sector are key drivers Total seaborne import demand by end-user market Organic chemicals (MMT) Inorganic chemicals (MMT)* Vegoils & molasses (MMT)* 120 28 85 110 26 5% 80 75 20% 100 19% 24 14% 70 26% 22 65 90 20 60 80 20% 18 35% 70 16 5% 45 60 14 25% 40 12 50 35 6% 10 30 40 30 80 25 6 46% 20 10% 23% 20 36% 4 10 10 10% 20 0 0 505050505050505050 6% 12% 12% 69% 15 Electronics, appliances, packaging Food Construction, automotive Fertilizer Industrial Textile, clothing Other (Fragmented) Construction, automotive Bleach, water treatment Alumina, pulp, paper Other (Fragmented) Fertilizer Other (Fragmented) Industrial Construction, automotive Food Electronics, appliances, packaging Textile, clothing Other (Fragmented) ⚫ We consider 28% of seaborne trade of liquid chemicals to have a negative effect from lengthened Covid-19 effects on the global economy O This is mainly related to organic chemicals with exposure to the global construction and automotive industry (auto parts and also fuel consumption through blends) A recovery in Construction and automotive is therefore a key to reduce the risk of a low growth scenario for chemical tanker demand Demand from the construction industry could recover quickly through policy support as highlighted by IMF and the same goes for the automotive industry when it comes to fuel consumption from easing lockdowns. While demand from the automotive industry when it comes to production stand at a risk of having a more prolonged negative effects for demand Still, we find 50% of products in our market to have a neutral/neutral to positive effect from Covid-19 driven by food/agricultural industry, packaging, pharma and the remaining 22% to have a mixed demand picture based on regional differences and diversified end-user applications 24 Source: Odfjell#25The feedstock situation has changed - US and Middle Eastern competitiveness remains superior, but majority of crackers still reliant on Naphtha Global cracker capacity by feedstock type Chemical feedstock prices (USD/tonne) Styrene producer margins (USD/tonne) 650 600 550 500 400 200 0 M -200 -400 USA - Europe - NE Asia May-19 Sep-19 Jan-20 May-20 450 31% Ethylene Glycol producer margins (USD/tonne) 400 USA 600 Europe NE Asia 350 400 300 200 0 250 -200 69% 200 150 May-19 Sep-19 Jan-20 May-20 Methanol producer margins (USD/tonne) 100 Naphtha NGL/Other 50 Mar-19 Ethane US Aug-19 Naphtha US 300 - USA - Europe Asia 200 100 0 Jan-20 Jun-20 - Naphtha Far East May-19 Sep-19 Jan-20 May-20 -100 Source: Odfjell, Argus 25#26The peak growth of new capacity is now behind us and we expect this to normalize demand growth between 2020 and 2022 compared to 2018 and 2019 Million tonnes Total liquid chemical capacity - US gulf and Middle East +4% 190 180 +13% 184 182 178 173 170 166 160 160 157 150 140 130 120 110 100 90 80 88 70 2016 2017 2018 2019 2020E 2021E 2022E Source: Odfjell, ICIS 26 46 O Growth in new export oriented liquid chemical plants in the US and Middle East has been key contributors to the strong tonne-mile demand in 2018 and 2019 The chemical industry is now faced with margin pressure driven by the large supply growth caused by major investments in previous years Economic uncertainty through 2019 has also kept a lid on investment appetite which is expected to be further kept low driven by Covid-19 and low prices We are therefore seeing limited growth in new export oriented capacity in 2021 and 2022 This is expected to "normalize" tonne-mile demand growth going forward#273 1 27% 21% 25% Orderbook share of 16% 15% 17% 20% total tanker fleet 13% 8% 8% 1996 With normalized demand growth the next three years, the deviation versus supply growth is expected to remain at similar levels due to slower supply growth 1997 1998 1999 2000 2001 2002 2 Age distribution tanker fleet (Mdwt) 13% of existing fleet current chemical Newbuilding orders as a share of existing fleet 1991 1996 1997 1998 1999 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 26% 43% 43% 44% 32% 28% 18% 2003 2004 2005 2006 2007 2008 2009 2010 36% of existing fleet 2004 2005 2006 2007 2008 17% 12% 13% 14% 12% 11% 8% 9% 5% 6% 7% 9% 4% 4% 2001 28% 2002 2003 2004 2005 2006 2007 2008 2009 2010 22 27 20% 12% 13% 14% O Product tanker orderbook share: 7.4% 14% 12% 12% 7% O Chemical tanker orderbook share: 4.5% 2009 2011 2010 2012 2011 2013 2012 2014 2013 2014 2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 O Crude tanker orderbook share: 7.6 % A larger share of the chemical tanker fleet to become less competitive and less compliant with future regulations in the coming years 2% 6% 5% 4% 1% 2011 3% 3% 2012 0 2013 2014 2015 2016 2017 10% 8% 6% 2018 ST 2019 2020 Newbuilding orders remains non-existent for chemical tankers Newbuilding activity for crude and product tanker also muted New regulations a likely hurdle to avoid larger newbuilding orders in the near-term...#28In 2018, IMO defined their initial 2050 strategy to reduce overall emissions from shipping by 50% Overall timeline for IMO GHG reduction MEPC 72 (2018) Resolution on initial strategy to reduce GHG emissions from ships MEPC X (2023) Complete short-term measures and review initial strategy Carbon intensity reduction EEDI vs. 2008 baseline (%) EEDI and SEEMP introduced 2010 Emissions reporting1 Potential EEDI strengthening² 2015 2020 EEDI Phase 1 EEDI Phase 2 -10% -20% -30% -40% -50% -60% EEDI is a mandatory design requirement for new ships. The index sets increasingly strict carbon intensity standards to gradually phase-in more energy efficient ships -70% 2025 EEDI Phase 3 2030 2035 2040 IMO target: EEDI trajectory not specified Point at which we believe alternative fuels need to play part of the role to achieve further improvements 1. Mandatory IMO data collection system: All vessels >5 000 GT required to collect and report fuel oil consumption data 2. IMO considering to change EEDI basis from payload (cargo) to DWT ("EEXI") Source: Source: IMO 28 50% emissions reduction vs. 2008 baseline 70% reduction of new vessels energy intensity 2045 2050#29- Alternatives Future choice of propulsion is a dilemma if ordering vessels today are not compliant with regulations, technically feasible or readily available Better suited as energy Non-attractive Attractive Challenges carrier than as a fuel Summary of characteristics ? ? ? ? ? ? ? Hydrogen Ammonia of alternative fuels Relative to HFO LPG Methanol DME LNG Battery Thorium Compr. Liquid Compr. Liquid Emissions 1 -8% CO2 per transport work -2% -38% -28% -100% -100% -100% -100% -100% -100% Specific density 2 DWT requirement 3 -4% +125% +2% -17% +13866% -99.9% -71% -71% +115% +115% Energy density +40% +148% +32% +60% -99% +2637090% +979% +252% +202% Tank volume requirement +176% Carrying temperature 4 -42°C Ambient -24°C -163°C Ambient Ambient Celsius, given state Ambient -253°C Ambient -33°C ? II Summary Moderate reduction, but potential interm. step Not offering enough emissions reduction Potential Potential intermediate intermediate step step Extensive volume requirement Radioactive & political resistance. Extensive volume requirement Temperature and volume density questionable Realistic long-term alternative, but still immature Realistic long-term alternative, but still immature No propulsion solutions points out as an obvious alternative in the short-term to solve medium to long-term targets - This should keep a lid on speculative new orders Source: Odfjell 29#30Summary - Covid-19 creates high uncertainties for future demand, but demand still looks likely to continue surpassing net fleet growth in the years to come Covid-19 O Relatively resilient to Covid-19 impact so far - Essential Products & wide product mix are key ORegional outbreaks and a reduction in fleet supply has given a short-term boost to our markets We still expect tonne-mile growth between 2 to 4 per cent p.a. through 2022 depending on the outcome for the global economy following Covid-19 Chemical tanker tonne-mile demand, Billion tonne-miles Other chemical products New capacity O New organic capacity led to strong demand growth of 6 and 8 percent in 2018 and 2019 A slowdown in new capacity is expected to normalise demand growth rates between 2020 and 2022 Demand growth Regulations Swing tonnage Tonne-mile demand forecasted to grow between 2 to 4 percent on average between 2020 and 2022 A slow recovery post Covid-19 to result in low growth (2%) and 2021 recovery in high growth (4%) Forecast Vegoils Inorganic chemicals 1138 1102 1058 1006 Organic chemicals 938 854 868 898 777 755 738 788 805 669 688 376 365 385 358 263 255 286 301 333 298 309 339 351 245 250 126 132 136 122 106 94 106 109 108 102 99 101 109 115 119 265 302 329 332 330 333 358 362 385 448 482 506 524 377 397 2008 2009 יי YOY +3% 2% to growth 4% Source: Odfjell SE p.a. 2012 2013 2014 2015 2016 2017 2018 2019E 2020E 2021E 2022E Dependent on outcome of covid- 19 for the global economy O Regulations to positively impact fleet growth until 2022 and maybe also beyond A large share of the tanker fleet needs replacement by 2025 - But propulsion dilemma a positive hurdle The market has gone through a period with high fleet growth, but we expect growth to decline to 1% on average p.a. through 2022 Deep-sea fleet development, DWT mill. O Low orderbook also the case neighbouring crude and product tanker segments OA positive development in competition from swing tonnage could therefore be expected O Current orderbook to fleet ratio for chemical tankers is 4.9%, an all-time low Fleet growth O Fleet growth estimated to be 1% on average per year between 2020 and 2022 30 Forecast Core fleet Swing/other fleet 88 89 81 92 16 94 95 95 17 17 17 75 72 15 16 64 66 68 13 61 13 57 12 50 10 11 12 12 10 9 68 72 74 76 77 78 78 62 47 51 53 54 56 59 41 2008 2009 2010 12 YoY growth +1% p.a. Source: Odfjell 2013 2014 2015 2016 2017 2018E 2019E 2020E 2021E 2022E +/- Swing tonnage#31Agenda ⚫ Strategy update Finance strategy O Market update O Final remarks ODFJELL#32Final remarks Performance Good start to the year and we are benefitting from our strong operational platform. Strategy update Our strategy remains intact but we are adapting to the terrain Finance strategy Market outlook De-leveraging and focus on improved cash flow generation going forward with limited capex commitments to ensure we succeed on our financial strategy Covid-19 creates great uncertainties on the future, but the chemical tanker industry should be fairly resilient and is helped by limited fleet growth going forward 32 2#33Thank you ODFJELL