INVESTOR PRESENTATION - Home | Torm · focused on dry bulk and container ships •The product tanker order book to fleet ratio currently stands at 11%, relatively low compared in

JANUARY 2018

INVESTOR PRESENTATION

2

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 performance, and underlying assumptions and statements other than statements of historical facts. The words “believe,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions generally identify forward-looking statements.

The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies that are difficult or impossible to predict and are beyond our control, the Company cannot guarantee that it will achieve or accomplish these expectations, beliefs or projections.

Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward- looking statements include the strength of the world economy and currencies, changes in charter hire rates and vessel values, changes in demand for “ton miles” of oil carried by oil tankers, the effect of changes in OPEC’s petroleum production levels and worldwide oil consumption and storage, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled dry-docking, changes in TORM’s operating expenses, including bunker prices, dry-docking and insurance costs, changes in the regulation of shipping operations, including requirements for double hull tankers or actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents, political events or acts by terrorists.

In light of these risks and uncertainties, you should not place undue reliance on forward-looking statements contained in this release because they are statements about events that are not certain to occur as described or at all. These forward-looking statements are not guarantees of our future performance, and actual results and future developments may vary materially from those projected in the forward-looking statements.

Except to the extent required by applicable law or regulation, the Company undertakes no obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

3

Orion purchase price considerations

AGENDA

Attractive Product Tanker Fundamentals

Company Overview

Q3 2017 Financials

123

Source 4

SUPPLY-DEMAND FACTORS MOVING IN OWNERS’ FAVOR

+ Sustained, increasing demand for gasoline and other petroleum products

+ Product inventories have decreased (approaching 5-year average)

+ Relocation of refineries expanding ton-mile demand

+ Low order book, particularly for smaller product tankers

+ Significant reduction of shipyard capacity

Freight rates started to move up in Q4 2017,

with further gains anticipated in 2018

Source 5

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Q1 1

4

Q2 1

4

Q3 1

4

Q4 1

4

Q1 1

5

Q2 1

5

Q3 1

5

Q4 1

5

Q1 1

6

Q2 1

6

Q3 1

6

Q4 1

6

Q1 1

7

Q2 1

7

Q3 1

7e

Q4 1

7f

M b

/dNaphtha Gasoline Jet Diesel

0

2

4

6

8

10

12

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

M b

/d

RELOCATION OF REFINERIES WILL BENEFIT PRODUCT TANKERS AND EXPAND TON-MILES

3.4 times

* Decline in Saudi Arabia’s diesel exports in 4Q 2016 reflects heavy refinery maintenance

Source: WoodMackenzie

Middle Eastern refinery capacity set to grow Saudi Arabia diesel exports increasing*

1.9m b/d of capacity to be added through

2022Historical rate of 1.5m

b/d of capacity to

6

KEY DEMAND DRIVERS HAVE BEEN NORMALISING

Source: EIA, JODI, WoodMackenzie, TORM Research

Global CPP inventories

Short-term factorsProduct stock draws accelerated in Q3 driven by stronger-than-

expected oil demand, preliminary data for the US and Europe

shows that destocking continued in Q4.

During the first eight months of 2017, global CPP stocks

decreased by a volume equivalent to a loss of potential trade of

5% each month.

A high number of crude newbuilding deliveries in 2018 continue

to pressurize the product tanker market through cannibalization

of the gasoil trade from East to West.

Long-term factorsThe fundamental long-term outlook remains positive with oil

demand increasing and the ton-mile being positively impacted

by increasing imbalances between the demand for and supply

of clean petroleum products.

Middle East refinery capacity additions are expected to

accelerate from 1.5 mb/d during 2011-2016 to 1.9 mb/d during

2017-2022, placing a renewed pressure on less competitive

refineries in other areas.

Billion bbl

US gasoline forward cover (days)Days

20.0

22.0

24.0

26.0

28.0

30.0

32.0

20

22

24

26

28

30

32

W 1

W 6

W 1

1

W 1

6

W 2

1

W 2

6

W 3

1

W 3

6

W 4

1

W 4

6

W 5

1

5 Year High/Low 2017 5 Year Average

1.30

1.40

1.50

1.60

1.70

1.30

1.40

1.50

1.60

1.70

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

5-yr High/Low 2015 2016 2017 5-yr Average

Decreasing inventory levels,

approaching 5-year average

7

REDUCED ORDER BOOK FOR THE PRODUCT TANKER FLEET

* The number of vessels at the beginning of 2017 was: LR2 315, LR1 339, MR 1,570, Handy 704 (includes chemical vessels). Net f leet growth: gross order book adjusted for expected scrapping, delivery

slippage and TORM assumptions on additional ordering. Currently confirmed orders account on average for 100% and 71% of forecasted deliveries respectively in 2018 and 2019.

Source: TORM Research

Net fleet growth y-o-y (no. of vessels)*

• In Q3, product tanker newbuilding activity slowed down

from Q2, as owners’ appetite for more expensive Tier 3

tonnage remained weak and newbuilding activity was

focused on dry bulk and container ships

• The product tanker order book to fleet ratio currently stands

at 11%, relatively low compared in historical terms

• Product tanker deliveries totaled 2.7m dwt during Q3,

which combined with limited scrapping activity resulted in a

1.4% net fleet growth in Q3 (Q-over-Q basis)

• For FY 2017, a fleet growth of around 5.4% is forecasted,

followed by a slowdown to around 4% p.a. during 2018-

2019

MR order book as percentage of the fleet (DWT)

2005-2015 average fleet growth for

LR2, LR1, MR and Handysize

%

m dwt

Source 8

0

10

20

30

40

50

60

70

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

202

0

Mill

. d

wt

Total deliveries Total orderbook

Capacity prior restructuring Capacity after restructuring

SIGNIFICANTLY REDUCED SHIPYARD CAPACITY FOR PRODUCT TANKERS

• Yard restructurings and consolidations in Korea and China

have caused a reduction in available capacity for product

tankers

• Overall yard capacity for product tankers is full in 2017 and

2018, and only limited capacity is available for deliveries in

the second half of 2019

• Restrictions on traditional bank financing

• Prices for newbuildings generally firm

Reduction in Korean shipyard capacity* Reduction in shipyard capacity

-45%

* Source: TORM, data as per September 2017

9

STABLE PRODUCT TANKER VESSEL PRICES

Source: Clarksons

Vessel price development

• Second-hand market in Q3 remained slow in a low freight

market. Activity focused on older tonnage with prices overall

unchanged

• In Q4 so far, second-hand activity is picking up with more

buyers interested in acquiring both modern and older tonnage

• In Q4 so far, newbuilding prices have remained firm with some

product tanker contracts for both Tier 2 and 3 versions

− Yards well-employed with other shipping segments:

crude, LPG, dry bulk and containers continue to be

active

USDm

USDm

LR1 - NewbuildingLR2 - Newbuilding MR - Newbuilding

MR - 5 yr. Second-Hand

MR 1Yr T/C

10


AGENDA


Company Overview

Q3 2017 Financials

123

11

TORM – KEY SUCCESS FACTORS

TORM is a large scale, pure-play product tanker owner, active in all key product tanker segments in order to meet customer needs

Our ~80 product tankers are primarily deployed in the spot market

TORM has a solid capital structurewith financial strength topursue growth

Competitive advantage when pursuing vessel acquisitions from yards

Semi-annual distribution policy of25-50% of net income

TORM’s superior integratedoperating platform includes

in-house technical and commercial management (preferred by customers)

Enhanced responsiveness toTORM’s customers,

resulting in higher TCEs

Scale and focus driving cost-efficient results

TORM pursues selectivegrowth based on rigorous

financial hurdles

In-house S&P team with relationships with brokers,

yards, banks and shipowners

Well-positioned to grow at market lows and to be a consolidator

12

LARGE SCALE, PURE-PLAY PRODUCT TANKER COMPANY

A world-leading pure product tanker company

• One of the largest owners and operators of product

tankers in the world

• 128 years of track record

• Customers consist of major independent oil

companies, state-owned oil companies, oil traders

and refiners

• ~3,000 seafarers and 295 land-based employees

• Listed on Nasdaq Copenhagen and Nasdaq New

York from 11 December 2017

Global footprint with presence in all major segmentsKey facts

On the water

Contracted newbuildings

Newbuilding options

Owned: 72

BB: 5

On order: 8

Newbuilding options: 8

10

LR2

LR1

MR

Handysize

7

52

+4

8

+4

TORM fleet

+4

+4

13













financial hurdles




14

0

20,000

25,000

30,000

15,000

10,000

5,000

Q3

USD 11m

Q2

USD 6m

Q1

USD 8m

Q4

USD -0m

Q3

USD 3m

Q2

USD 4m

Q1

USD 7m

Q4

USD 1m

Q3

USD 8m

MR

rep

ort

ed

TC

E,

US

D/d

ay

TORM COMMERCIALLY OUTPERFORMS PEERS IN ITS KEY MR SEGMENT

Note: Peer group is based on Ardmore, d’Amico (composite of MR and Handy), Frontline 2012, NORDEN, Maersk Tankers, Teekay Tankers, Scorpio and OSG

Q3 2017 excludes: Frontline and Teekay Tankers

*TORM premium calculation is based on TORM MR fleet of 50 vessels earning TORM’s TCE rate compared to the peer average

High-Low

2015 2016 2017

TORM Peer avg.

TORM MR

premium*

FY2016: USD 13m Q1-Q3 2017: USD 24mQ3-Q4 2015: USD 9m

Q3 Performance:

• TORM: USD/day 14,827

• Peer Average: USD/day 12,510

15

VESSEL POSITIONING IS A KEY DRIVER OF TCE DIFFERENTIAL

Source: Clarksons

Note: The shown routes do not reflect actual earnings but are a proxy for earnings within West respectively East region

18,000

16,000

14,000

12,000

10,000

22,000

20,000

2,000

0

6,000

4,000

8,000

JulJunMayAprMarFebJan SepAug Oct

2017WEST – Atlantic basket TC2 & TC14

EAST – Pacific round trip TC10

1616

-0.2% -0.5%

0.3%

2.1%

-0.3%

Note: RoIC defined as Annualized RoIC (adjusted for impairments) or EBIT less tax / invested capital (average invested capital through the period)* Scorpio Tankers adjusted for merger costs

INDUSTRY LEADING ROIC

Q3 2017

*

2.4%

1.1%

3.2%2.8%

4.9%

2016

2.5% 1.2% 0.8% -0.4%1.7%2017 YTD

16

17













financial hurdles




18

ACQUIRED SIX MR RE-SALE NEWBUILDINGS IN Q3 2017 FOR USD 185M; FOUR GSI VESSELS TO BE DELIVERED IN 2019

0

2

4

6

8

10

12

14

30-31 32-33 34-35 36-37 38-39 40-41 42-43 44-45 46-47 48-49 50-51 52-53 54-55 56-57 58-59 60+

TORM’s MR re-sales

Q3 2017 MR acquisitions:

2 Hyundai Mipo

4 GSI

-The six acquisition vessels

have attractive financing

Clarksons quarterly MR newbuilding prices 2006-2017#

of

qu

art

ers

USDm

Clarksons today

Source: Clarksons, TORM

19

TORM’S NEWBUILDING OPTIONS

Status

Pricing of options

TORM has negotiated to maintain eight options:

Four MR vessels with delivery in 2H 2019/Q1 2020

Four LR1 vessels with delivery in 2H 2019

The options are with high specifications, including:

USCG approved BWMS

All with a scrubber-ready design

The options are attractively priced approximately 10% below Clarksons’ benchmarks and also at

or below all Clarksons’ pricing observations of these vessel classes since 2006

MR options are priced at approximately 10% below Clarksons’ current MR benchmark at USD

33.5m

LR1 options are priced at approximately 10% below Clarksons’ current LR1 benchmark at USD

41.5m

19

20

0

5

10

15

56

-57

60

-61

70

+

68

-69

62

-63

64

-65

66

-67

58

-59

54

-55

52

-53

50

-51

48

-49

46

-47

44

-45

42

-43

40

-41

38

-39

36

-37

THE NEWBUILDING OPTIONS ARE VERY ATTRACTIVELY PRICED IN A HISTORICAL CONTEXT

Clarksons quarterly LR1 newbuilding prices 2006-2017

# o

f q

uart

ers

USDm

Clarksons quarterly MR newbuilding prices 2006-2017

# o

f q

uart

ers

USDm

Four LR1

options

Four MR

options

0

5

10

15

58

-59

60

+

34

-35

32

-33

30

-31

36

-37

56

-57

54

-55

52

-53

50

-51

48

-49

46

-47

44

-45

42

-43

40

-41

38

-39

4 LR1

options

4 MR

options

TORM’s option vessels

Clarksons Q3 2017

Clarksons quarterly 2006-17

Source: Clarksons, TORM 20

21













financial hurdles




22

TORM’S NET ASSET VALUE ESTIMATED AT USD 708M

* Calculated based on 61,985,975 shares (excluding 312,871 treasury shares) and USD/DKK fx rate of 6.28; Other includes Other plant and operating equipment, and total financial assets

30 September 2017 figures, USDm

• Based on broker values, TORM’s

vessels including newbuildings were

estimated at USD 1,524m as of 30

September 2017

• With an outstanding debt of USD

775m and committed CAPEX of

USD 238m, TORM’s Net Loan-to-

Value was 57% ensuring a strong

capital structure

• Adjusting for cash and working

capital, TORM’s Net Asset Value

(NAV) was estimated at USD 708m

• On a per share basis*, the NAV was

estimated at USD 11.4 or DKK 71.9

• Market cap as of 12 January 2018

was USD 535m, or DKK 53.10 per

shareCash

145

Committed

CAPEX

238

Outstanding

debt

775

1,524

Value of

new-

buildings

310

Value of

vessels on

the water

1,214

Market

Cap*

(12/01/18)

708

50

Other*Working

Capital

2

Net LTV

of 57%

Net Asset

Value

535

173

24%

discount

to NAV

23

TORM HAS A FAVOURABLE FINANCING PROFILE AND STRONG LIQUIDITY POSITION

* Total debt includes a non-amortizing USD 6m credit facility

** Of which USD 40m must be cash or cash equivalent

*** Following the balance sheet date, TORM and Danish Ship Finance have agreed to extend the maturity of a loan tranche from June 2019 to December 2021. This is reflected in the graph

As of 30 September 2017 (USDm)

TORM is well-positioned

to service future CAPEX

and debt commitments.

CAPEX commitments Available liquidity (before equity transaction)

98102

Total201920182017 Total available

liquidity

LR2 and MR

financing

agreements

Available

debt facility

Cash position

Ample headroom under

our attractive covenant

package:

• Minimum liquidity: USD

75m**

• Minimum book equity

ratio: 25% (adjusted for

market value of

vessels)

Scheduled debt* repayments***

485

775

2020 repayment

86

2019 repayment

90

2018 repayment

85

2017 repayment

21

Debt as of 30

Sep 2017*

2021 or after

38

238145

75

196 416

24


AGENDA


Company Overview

Q3 2017 Financials

123

25

USDm Q3 2017 Q3 2016

Q1-Q3

2017

Q1-Q3

2016 2016 2015*

P&L

TCE Earnings 95 103 295 365 458 582

Gross profit 47 50 147 198 242 361

Sale of vessels 0 0 3 0 0 0

EBITDA 37 40 117 166 200 319

Profit before tax -4 2 -1 48 -142 188

Adjusted profit before tax

(excluding impairment

charges)

-2 2 2 47 43 188

Balance sheet

Equity 784 963 784 963 781 976

Net Interest-Bearing Debt 630 612 630 612 609 613

Cash and cash equivalents 145 77 145 77 76 168

Key figures

Earnings per share (USD)-0.1 0.0 0.0 0.8 -2.3 NA

Return on Invested Capital

(adjusted RoIC)

2.1% 2.5% 2.5% 6.3% 4.9% 14.1%

Net Asset Value (NAV) 708 873 708 873 733 1,169

Number of vessels (#) 77 81 77 81 81 74

Tanker TCE/day (USD) 14,290 14,391 14,477 17,248 16,050 22,879

Tanker OPEX/day (USD) 6,631 6,596 6,649 6,967 6,771 7,193

EBITDA OF USD 37M IN Q3 2017

Approximately break-even (net

income) in a very challenging 2017

environment

Note: See appendix slides 39-40 for reconciliation of quarterly non-IFRS measures

* 2015 figures are proforma figures

As of 6 November 2017, 60% of Q4

2017 covered at USD/day 15,775

26

OUR FOCUS ON COST CUTTING HAS REDUCED OPEX BY ~USD/DAY 1,000 SINCE 2014

* Pro forma figures for 2014 and 2015 presents the combined TORM and Njord fleet

TORM’s platform remains highly focused on cost-

efficiencies and high quality technical management Significant reduction in OPEX

• The in-house technical management allows for close

control over operating expenses and no margin leakage

to third-party providers

• The integrated platform provides customers with better

accountability and insight into safety and vessel

performance

• TORM assesses its technical performance across a wide

range of measures which besides OPEX level includes

indicators within e.g. safety (Lost Time Accident

Frequency) and fuel efficiency

OPEX per day (yearly, weighted avg. in USD/day)

0

5,000

1,000

6,000

4,000

8,000

3,000

7,000

2,000

-1,006 or-13%

2015*

7,655

6,771

2016

7,193

2014* 2017 Q1-Q3

6,649

27

TORM HAS A FULLY INTEGRATED BUSINESS MODEL AND ADMIN EXPENSES ARE TRENDING SIGNIFICANTLY DOWN

* Pro forma figures for 2015 presented as though the Restructuring occurred as of 1 January 2015 and include the combined TORM and Njord fleet

TORM operates a fully integrated commercial

and technical platform

TORM has trimmed administration expenses

significantly

0 2 4 6 8 10 12 14 16 18 20 22 24

-52%

Q1-Q3 2017

2010

2009

2008

2016

*2015

2014

2013

2012

2011

• TORM’s operational platform handles commercial and

technical operations in-house

• The integrated business model provides TORM with the

highest possible trading flexibility and earning power

• TORM manages

– ~80 vessels commercially

– ~75 vessels technically

• TORM has a global reach with offices in Denmark, India,

the Philippines, Singapore, the UK and the US

• Average admin cost per earning day for 2016 of

USD/day ~1,450

• Outsourced technical and commercial management

would affect other line items of the P&L

Admin. expenses (quarterly avg. in USDm)

28

TORM HAS SIGNIFICANT OPERATING LEVERAGE

Unfixed days (excluding newbuilding options)

522

2,509

25,070

2,692

16,730

2018

2,4474,238

2,767

19,189

28,641

2019

3,361545

4,963

2017

3,139

LR1LR2 MR

Illustrative change in cash flow generation potential for the TORM fleet

∆ Average TCE/day 2017 2018 2019

USD 2,000 9.9 50.1 57.3

USD 1,000 5.0 25.1 28.6

USD (1,000) (5.0) (25.1) (28.6)

USD (2,000) (9.9) (50.1) (57.3)

# of days as of 30 September 2017

USDm

Of total

earning days 73% 89% 99%

As of 6 November 2017, TORM had covered 60% of the Q4 earning days at a blended rate

of USD/day 15,775, relative to an average Q1 - Q3 2017 rate of USD/day 14,477

Handy

APPENDIX

30

0

10

20

30

40

50

60


LR2 (TC1)

5-year average 2014 2015 2016 2017

Q3 IMPACTED BY INVENTORY DRAWS AND HURRICANE HARVEY

Source: Clarksons. Spot earnings: LR2: TC1 Ras Tanura-> Chiba, LR1: TC5 Ras Tanura-> Chiba and MR: average basket of Rotterdam->NY, Bombay->Chiba, Mina Al Ahmadi->Rotterdam, Amsterdam->Lome,

Houston->Rio de Janeiro, Singapore->Sidney

Spot rates

A reduction in US refining capacity as a result of Hurricane Harvey initially

led to an increase in clean petroleum exports from Europe to US East Coast

and South America, which caused freight to spike sharply.

The secondary effect from Hurricane Harvey was a strengthening of the

transpacific market driven by a combination of low inventories on the US

West Coast and limited supply out of the US Gulf and Mexico.

Q3 MR

Q3 LRIncreased volume of middle distillates moved from the Middle East to

Europe, initially due to a shutdown of Europe’s largest refinery in Rotterdam

and later in order to replenish European stocks, following the rise in exports

across the Atlantic.

Q4-to-dateIn the West, more CPP has been moving from East to West, resulting in an

overcapacity of available vessels West of Suez. On the positive side,

naphtha and gasoline blendstock flows from West to East have increased.

In the East, activity for MRs in the Middle East has been good with strong

rates. The LR rates have improved, primarily driven by increased product

flows from the Middle East to Europe as well as stable demand for naphtha

in the Far East.

0

10

20

30

40

50


LR1 (TC5)

5-year average 2014 2015 2016 2017

0

5

10

15

20

25

30

35


MR (Average)

5-year average 2014 2015 2016 2017

31

FLEET UPDATE

As of 14.11.2017# of vessels

Q2 2017 Changes Q3 2017 Changes 2017 Changes 2018 Changes 2019

Owned vessels

LR2 7 - 7 - 7 4 11 - 11

LR1 7 - 7 - 7 - 7 - 7

MR 48 2 50 - 50 - 50 4 54

Handysize 9 -1 8 - 8 -1 7 - 7

Total 71 1 72 - 72 3 75 4 79

Charter-in and leaseback vessels

LR2 3 - 3 - 3 -2 1 - 1

LR1 0 - 0 - 0 - 0 - 0

MR 2 - 2 - 2 - 2 - 2

Handysize 0 - 0 - 0 - 0 - 0

Total 5 - 5 - 5 -2 3 - 3

Total fleet 76 1 77 - 77 1 78 4 82

Note: In addition to above development, TORM is currently planning towards a potential sale of one older MR vessel. The transaction is subject to mutual Board approvals.

32

Share information

OAKTREE IS THE MAJORITY SHAREHOLDER AND

OWNERSHIP HAS BECOME MORE DISPERSED

TORM’s shares are listed on Nasdaq

Copenhagen under the ticker TRMD A

and on Nasdaq New York under the

ticker TRMD

Shares

• 62.3m A shares, one B share and one

C share

• The B and C shares have certain

voting rights

• A Shares have a nominal value of

USD/share 0.01

100

13

13

TotalUnknown

2

RetailInstitutionalDW

8

Oaktree

64

Estimated shareholdings as of 31 January 2017, %

33

TORM HAS DISTRIBUTED A TOTAL OF USD 48M TO SHAREHOLDERS IN 2016 AND 2017

* Based on share price as of 31 December 2016 and a USD/DKK fx rate of 7.0

• During the first nine months of 2017, TORM has

paid a USD 1.2m dividend on 12 September

2017, corresponding to a dividend per share of

USD 0.02 or DKK ~0.13

• During 2016, TORM has distributed a total of

USD 47m to shareholders, corresponding to a

yield of 8%*

25

19

2017 H1 dividendRepurchase

from Corporate

Reorganization

3

2016 dividend Total distribution

48

Market purchase

1

Distribution to shareholders (USDm)

TORM’s Distribution Policy for 2017

• 25 to 50% of Net Income

• Semi-annual distribution

• Dividend and/or share repurchase

• Policy reviewed periodically

34

Jacob Meldgaard

▪ Executive Director in TORM plc

▪ CEO of TORM A/S since April 2010

▪ Previously Executive Vice President of the Danish shipping company NORDEN, where he was in charge of the company’s dry cargo division

▪ Prior to that, he held various positions with J. Lauritzen and A.P. Møller-Mærsk

▪ More than 25 years of shipping experience

Lars Christensen

▪ Head of Projects

▪ With TORM since 2011

▪ Previously with Navita Ship,

Maersk Broker and EA

Gibson

▪ More than 25 years of

shipping experience

Executive Director

Senior Management

Christian Søgaard-Christensen

▪ Chief Financial Officer


▪ Previously with McKinsey & Co

▪ More than 10 years of shipping and

transportation experience

Jesper S. Jensen

▪ Head of Technical Division


▪ Previously with Clipper and

Maersk

▪ More than 25 years of shipping

experience

MANAGEMENT TEAM WITH AN INTERNATIONAL OUTLOOK AND MANY YEARS OF SHIPPING EXPERIENCE

35

RECONCILIATION OF NON-IFRS FINANCIAL MEASURES

Q3 Q3 Q1-Q3 Q1-Q3

USDm 2017 2016 2017 2016

Non-IFRS Financial Measures

Time charter equivalent (TCE) earnings 95.2 103.4 295.1 364.6

Gross profit 47.1 50.1 146.6 198.0

EBITDA 37.0 40.2 116.8 166.3

Invested capital 1,409.6 1,572.7 1,409.6 1,572.7

Net interestbearing debt 630.0 611.5 630.0 611.5

Net Asset Value (NAV) 707.7 800.0 707.7 800.0

Q3 Q3 Q1-Q3 Q1-Q3

USDm 2017 2016 2017 2016

Time charter equivalent (TCE) earnings

Revenue 155.8 155.8 485.6 526.4

Port expenses, bunkers and commision -60.6 -52.4 -190.5 -161.8

Total 95.2 103.4 295.1 364.6

Q3 Q3 Q1-Q3 Q1-Q3

USDm 2017 2016 2017 2016

Gross profit

Operating profit 5.8 9.9 26.9 75.5

Depreciation 28.6 30.3 86.3 90.8

Impairment losses on tangible and intangible assets 2.6 0.0 3.6 0.0

Other operating expenses 0.0 0.1 0.3 0.3

Administrative expenses 10.1 9.8 32.3 31.4

Profit from sale of vessels 0.0 0.0 -2.8 0.0

Total 47.1 50.1 146.6 198.0

Q3 Q3 Q1-Q3 Q1-Q3

USDm 2017 2016 2017 2016

EBITDA

Net profit/(loss) for the period -4.2 1.6 -1.2 47.4

Tax expense 0.3 0.2 0.6 0.8

Financial expenses 11.1 8.7 29.9 30.1

Financial income -1.4 -0.6 -2.4 -2.8

Depreciation 28.6 30.3 86.3 90.8

Impairment losses on tangible and intangible assets 2.6 0.0 3.6 0.0

Total 37.0 40.2 116.8 166.3

36

RECONCILIATION OF NON-IFRS FINANCIAL MEASURES CONTINUED

Q3 Q3 Q1-Q3 Q1-Q3

USDm 2017 2016 2017 2016

Net interest-bearing debt

Mortgage debt and bank loans (current and non-current) 741.8 671.2 741.8 671.2

Finance lease liabilities (current and non-current) 28.8 15.8 28.8 15.8

Amortized bank fees 4.5 1.9 4.5 1.9

Cash and cash equivalents -145.1 -77.4 -145.1 -77.4

Total 630.0 611.5 630.0 611.5

Q3 Q3 Q1-Q3 Q1-Q3

USDm 2017 2016 2017 2016

Invested capital

Tangible and intangible fixed assets 1,404.2 1,590.3 1,404.2 1,590.3

Investments in joint ventures 0.3 0.3 0.3 0.3

Bunkers 34.1 28.9 34.1 28.9

Accounts receivables *) 75.2 64.0 75.2 64.0

Deferred tax liability -44.9 -45.0 -44.9 -45.0

Trade payables **) -57.7 -63.7 -57.7 -63.7

Current tax liabilities -1.4 -1.9 -1.4 -1.9

Deferred income -0.2 -0.2 -0.2 -0.2

Total 1,409.6 1,572.7 1,409.6 1,572.7

Q3 Q3 Q1-Q3 Q1-Q3

USDm 2017 2016 2017 2016

Net Asset Value

Total vessels value including newbuildings (broker values) 1,523.5 1,540.6 1,523.5 1,540.6

Committed CAPEX on newbuildings -238.0 -158.4 -238.0 -158.4

Cash position 145.1 77.4 145.1 77.4

Bunkers 34.1 28.9 34.1 28.9

Freight receivables 62.1 54.6 62.1 54.6

Other receivables 10.3 3.7 10.3 3.7

Other plant and operating equipment 1.7 1.7 1.7 1.7

Investments in joint ventures 0.3 0.3 0.3 0.3

Prepayment 2.8 5.7 2.8 5.7

Outstanding debt *) -775.1 -688.9 -775.1 -688.9

Trade payables -24.7 -21.5 -24.7 -21.5

Other liabilities -33.0 -42.2 -33.0 -42.2

Current tax liabilities -1.4 -1.9 -1.4 -1.9

Total Net Asset Value (NAV) 707.7 800.0 707.7 800.0

Q3 Q3 Q1-Q3 Q1-Q3

USDm 2017 2016 2017 2016

Return on Invested Capital (adjusted ROIC)

Operating profit for the period 5.8 9.9 26.9 75.5

Reversal of impairment losses on tangible and intangible assets 2.6 0.0 3.6 0.0

Tax expense -0.3 -0.2 -0.6 -0.8

Adjusted return for the period 8.1 9.7 29.9 74.7

Full year equivalent return 32.4 38.8 39.9 99.6

Invested capital, beginning of period 1,340.6 1,587.1 1,387.8 1,587.5

Invested capital, end of period 1,409.6 1,572.7 1,409.6 1,572.7

Accumulated impairment, begining of period 173.6 0.0 173.6 0.0

Accumulated impairment, end of period 173.6 0.0 173.6 0.0

Average invested capital, ajdusted for impairment 1,548.7 1,579.9 1,572.3 1,580.1

ROIC 2.1% 2.5% 2.5% 6.3%

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INVESTOR PRESENTATION - Home | Torm · focused on dry bulk and container ships •The product tanker order book to fleet ratio currently stands at 11%, relatively low compared in