Cmb.Tech NV (CMBT) Earnings Call Transcript & Summary

Hello, and welcome to the Euronav General -- Special General Meeting webcast. [Operator Instructions] Please note, today's event is being recorded. I now would like to turn the conference over to your host today, Hugo De Stoop. Mr. De Stoop, please go ahead.

Thank you very much. And sorry to keep you waiting for a couple of minutes. I personally like the music. Well, welcome, everyone. Good afternoon, good morning, wherever you are. This is a special webcast. We don't do this very often. Last time we did it was to announce our green journey or energy transition journey last May. But we are very pleased today on the occasion of a Special General Meeting webcast. Special General Meeting has been called by one of our largest shareholder. And we have decided to organize this webcast to try to give you as much information as we can so that you can vote knowing what is important to know. Next slide, please. So basically, what is at stake on March 23 and March 23 is the date of the Special General Meeting and you should never forget that you need to vote way ahead of that specific event. Well, what will happen on that day, and that meeting has been called by CMB. CMB is one of our large minority shareholders. They are very large because they own 25% of the company, where 25% is nevertheless a minority. And they've asked to organize a general meeting to remove the entire existing board, so all the current members that are all independent and replace them by 5 members that they have handpicked themselves, i.e., they have selected the nominees that they are proposing to replace the current Supervisory Board. If they are successful, we believe that they will take effective control of Euronav because once you control the Board, you control the company. We believe that the strategy and the governance will change dramatically. And we also believe that the share price may be affected by it and probably affected negatively by it. Next slide, please. So when we saw this webcast, we thought that it was important to first, well, probably correct some of the statements or the claims that have been made by CMB about the current Board because this is probably the reason why they would like to change the board. So one of those claims was that after the termination of the combination that we had anticipated to do with Frontline, the Board continues to believe that the best strategy for the company was to go through a combination, go through a merger with Frontline and that we were litigating for that. Whereas the reality is somewhat different. Obviously, Frontline has terminated this agreement. And we believe that they didn't have the right to terminate the agreement, whereas Frontline believes they have the right to terminate this agreement. So the best way to know whether they had the right to terminate the agreement or not, is to go to arbitration. And I like the word arbitration because it represents someone that is neutral and that will base on the fact decide whether they have the right to terminate or not. And from there on, we will decide what to do next. What we are. And when I say, we, it's the Board, very much the Board and the Management Board. We're not trying to force anything with anyone that would be a serious mistake. The second claim is very much linked to the first one, but we would like to make it broader and that they believe that the Board can only see the future of Euronav in a combination with Frontline, whereas that's not the case. The case is that, at the moment, the company has a strategy, which is a growth strategy. When you have a growth strategy, then you are trying to find people to merge or people to acquire so that you are growing the platform, and whereas it is true that currently, the Board continues to have a growth strategy as a main strategy for the company. It is not specifically a strategy that would involve Frontline. The third point is that they claim that on the 8th of February, we have lost the arbitration. And as we have tried to explain during the earnings call that we had for the third quarter, there was 2 arbitration that we were trying to organize or trying to or where we had specific claims. The first one was what we call an emergency arbitration, and that one was not going to decide whether or not Frontline has the right to terminate and some other elements. It was only judging whether there were some elements that were so urgent that they had to be decided at that point in time. So the fact that we have so-called lost this arbitration has no impact and cannot be even used as a guidance to see where the Frontline had the right to terminate the main arbitration. And by the way, the only reason why the Board has decided to litigate about this right or no right to terminate is simply because our shareholders are entitled to know and are entitled to know if they didn't have the rights are entitled to damages. The last one is that only a new leadership will be able to restore what they call serenity in the boardroom after a tumultuous time. And I found that profoundly unfair because after all, there was no tumultuous time before CMB decided to oppose this merger. When we announced the merger, it seemed to us that everybody was very much in favor of this combination. When I say everyone, it doesn't stop at the shareholder, it's the stakeholders. All of the analysts that are covering our company were in favor of it. All the other shareholders that we had the opportunity to speak to, were very much in favor, and we're very pleased that we have made the move and when we talk to the other stakeholders, that is our clients or employees on both sides, on both companies, everybody seemed to be very, very pleased about it. So the chaos was brought to us by CMB. And so to say that, by then, taking over the boardroom, they will be able to restore the chaotic situation that they have provoked themselves, I feel was very [ cynical ]. Next slide, please. So I think that as a preamble, it is important to understand what is the vote about and what will be or what could be the outcome of the vote. We very much believe that a company is definitely driven by the Supervisory Board, who is setting the strategy for the future and then delegate the management to execute on that strategy. So when we're trying to analyze the different elements of that strategy and the way the company is governed, I think it's worth explaining the difference between the 2 propositions. On the first one, we have an equity story that is relatively simple to explain. We are a pure player in a sector that is called the crude oil transportation sector. We use large ships to do so, and we are a leader in that sector. And we believe that if we grow, we will be able to achieve economy of scale that will be very important for the profitability of the company but probably equally or even more important because we do have very important challenges ahead of us, which are part of the energy transition, the way we propel the ships and the cargo that we transport. And we believe that consolidating the sector in the first place is very important in order to achieve and to overcome those challenges. As far as CMB [indiscernible] are concerned from what we understand, they are talking about diversification. Diversification for a public company means that you are acquiring a different type of assets, probably the type of assets that could be acquired or that are already present in other pure players. And specifically, they have mentioned as an example, container, dry bulk, chemical carrier, et cetera. As far as the timing is concerned, I think that they were a little bit more vague about it, I guess, it would be opportunistic, but we don't believe that this is the right strategy for a public company. In terms of governance, I think that you understand that all of our directors are completely independent. And by being independent, they are able to represent all types of shareholders at all time of the cycle, which means that they have been selected for their credentials. They have been selected because of their skill set and they have applied the highest corporate standard levels that one can imagine. In terms of what CMB is proposing, well, obviously, you have a very important shareholder owning 25% and they are proposing you the entire vote, the 5 members, whether they call them nonindependent or independent, the fact that they are the ones selecting those means that they are not as independent as someone that would have been [ carefully ] selected through a process set by independent board itself. On the growth strategy, I think I have already explained what the main differences are between the 2 of us. But we very much believe in economies of scale and the fact is that in shipping, yes, there are all ships, but not all same size of ships, same [indiscernible] ship, and therefore, the economies of scale that you can achieve are completely different. If you operate a containership from a crude oil tanker, chances are that there is very little economies of scale whereas if you operate the same type of ship, same category, the economies of scale are quite significant. In fact, we have shown over our history, history of growth, we have done 3 major acquisitions and we have demonstrated that those economies of scale exist because on every single occasion, we have decreased the OpEx and the overhead of this company. The next point is on decarbonization trajectory. And I think that here, Euronav is definitely an uncontested leader in the tanker sector but also in the shipping sector. As I said earlier, we have announced our decarbonization strategy by becoming a net zero company by 2050 with very clear milestones, very clear things that we need to achieve by certain dates and that are totally achievable today. We even have the ambition to improve this target simply because we believe that technology will move ahead and will accelerate and therefore, will allow us to accelerate ourselves. As far as CMB is concerned, obviously, this is an angle that they are playing very, very hard because that is their core business or will become their core business. It's all the application of hydrogen or ammonia and they would like to build a diversified fleet of vessels that employ ammonia or hydrogen. And whilst this is -- this may become available in the future, it is not something that is available today. Capital allocation is almost a derivative of the change of strategy. I think that we have a very strong track record in having a good balance sheet, a robust balance sheet, which allows us to distribute or return capital to our shareholders, distribute dividends or doing share buyback. And I think that we have explained many times how we would do one or the other following very strict rules. And I think that the market appreciates the fact that we set out a clear policy so that people know what to expect. As far as CMB is concerned, they have said that it would be in favor of distributing dividends and share buyback, but to a certain extent that is incompatible when you put more debt on the balance sheet, certainly at a time where the interest rate is going up, there will obviously be less cash available for the shareholders or for share buybacks and therefore, there will be a deviation of our policy. And on top of that, our policy is very clear with certain things that can be measured, whereas they were much more vague about it. Finally, on governance and what we call the control approach, we feel that proportionate representation in the Boardroom, and that is what our current Supervisory Board is proposing, a proportionate representation is far better than having only one large but minority shareholder having all the voices in the Board. Next slide, please. So in summary, I think that when you look at the past, Euronav has delivered what we call best-in-class total shareholder return. And this is not me saying, this will be [ presumptuous ] or over pretentious. This has been measured by some of the best analysts out there. And we've been doing that whilst becoming the world's largest publicly listed tanker platform. So how do we do that? Well, we did that by being extremely disciplined, but also by avoiding a lot of the pitfalls that exist in shipping like investing at the wrong time in the cycle or like doing a related party transaction or having just the same set of people around the table with no diversity. Euronav's strategy is, as far as we are concerned, very well balanced. We believe that we can deliver further growth. And at the same time, we do have clear milestones in order to go through this energy transition that I spoke on the previous slide. I guess that many people will agree with us that we are an ESG leader in the tanker market. And very often, many of my friends asked me, "How can you be an ESG leader when you're transporting crude oil?" And the answer is always the same. That is, in fact, it's in those sectors that you need to be an ESG leader. It's so easy to do a wind farm or to do solar panels. It's so much more important to be an ESG leader in the sectors that we are [ busy with, ]in our case, the transportation of crude oil. And when we speak about ESG, we speak about the E but we also speak about the S, and we also speak about the G and G is for governance, please do remember that. Next point is I'm going to skip, I'll leave it to you for reading. CMB wants to take control. And what we say is the expression is on the G because normally, when you want to take control of the company, what you do is, you pay a premium. You pay a premium, you take over the company and everybody is happy. And to the extent that they are not happy then they're not giving you their shares. Here, I think that it's taking over control through the back door. And whilst this is very smart, we just want people to be aware of it so that they can claim the premium if this is what CMB really wants to do. The last point in this executive summary, and that's what we are going to demonstrate is that we are proposing to have a balanced board. We are welcoming 2 non-independent representative of the 2 main shareholders. You know that today, we have 2 shareholders who have each 25% of the company. And we believe that, that will be very complementary to the existing Board, and there is no need to replace the entire existing Board in doing so. Next slide, please. What is CMB proposal? Well, the proposed resolutions are a serious dent in the impeccable corporate governance that we have had so far. And that's probably one of the reasons why we are here today trying to explain why this is so important because we do believe in governance. We are one of those companies who has put so much time and effort on governance, then it would be a pity to dent it on this occasion. So what is important for you to know is none of the proposed independent directors. So they are proposing 2 non-independent directors, absolutely fine with those, but they are also proposing 3 independent or so-called independent directors. Those guys, those persons, do not meet the criteria of the Belgian Corporate Governance Code. So in view of that Belgian Corporate Governance Code, and believe me, it's a very good corporate governance code, they are not independent. And in fact, I think that it's time to sort of take a step back and try to understand what is going on here. If you are being nominated by someone who has 25% of the company, you cannot be independent. It's as simple as that. Obviously, you owe those people something because they nominated you, if they didn't go through a process, it didn't go through a nomination committee, it's as simple as that. So we don't need to read carefully the different rules and regulations, even though they are clearly saying they are not, it's simple logic. They have been recruited by CMB without transparency, without a proper recruitment process as far as we know because the Board has asked CMB, but unfortunately, we didn't receive any answer. And then fundamentally, we don't believe that they are fully aligned with the other shareholders. And let's not forget that the other shareholders represent 75%, which is, in this case, a majority. Finally, the reason why we oppose the dismissal of the current Board is that we believe that they have all the current and necessary skills that are required by Euronav today to do their job, to be in the boardroom and to present all the shareholders in a fair and equal manner. Next slide, please. So in a nutshell, and you will see that this slide is coming back later in the presentation. This is what CMB resolutions are. So every shareholder will need to vote on them one by one. And they are classified in different pack of resolution. The first one is about the dismissal of the termination of the mandates of the 5 current Board members. We obviously, against -- the Board is against its own dismissal, but not because they want to achieve their seat, quite frankly, they are all very busy people, and I thank them for dedicate so much time to this company, but simply because they don't believe it's right to do that. Certainly, one go or over one day. The next set of resolutions are about the appointment of the people that have been nominated by CMB. The first who are nonindependent. We have absolutely no problem with that to the contrary. We welcome them we believe that they will be a good addition to the boardroom. But we have -- we do have a problem with the so-called independent. I already spoke on previous slide about them. So we are very much against their nomination. Remember, this is not about people. We have nothing against those 3 people. We have something against the fact that they represent one shareholder, and therefore, there will be too much concentration. I don't even know those 3, well, I know 1 of those individual, I don't even know the other 2, and I'm sure they're absolutely fine people. But this is not what it is about. It is about concentration of representation in the boardroom. And then the point #3 is an administrative one. That's the reason why we're recommending 4. And the last point is also an important one because it's Famatown, the holding of John Fredriksen who also has 25% of the shares of Euronav, and he has also proposed to nominate 2 representatives himself and Mr. Cato H. Stonex to be present in the boardroom. And obviously, we welcome that. We believe that this is fair in view of the fact we are welcoming CMB into the boardroom. Independently of that, we believe that shareholders should be represented when they have a significant stake in the company. And so that's the reason why the Board is recommending to vote in this way. So next slide, please. Yes. I will now turn to Brian Gallagher, who's going to present you the Euronav strategy for value creation, growing the leading independent platform in the crude tanker market. Brian, over to you.

Thank you, Hugo. I'm just going to take you Hugo suggested a few slides here running through a lot of strategy that you're aware of. If you move on to the following slide, please, just a restatement of some of the facts that Hugo alluded to on the next slide. Really just getting across the -- some of the stuff that Hugo was mentioning in terms of ammonia as a fuel that we currently can transport within our ships. It is a fuel that we believe has got a huge amount of benefit to merit as a future propulsion system. And we've got a joint development program engaging and investigating that development within tanker space, but it's still some years away. Also, our ship management business, whilst it's in a very, very good shape and it's got a good reputation, it's not simply a transferable skill or department into other shipping segments. We don't have a license to operate in other segments, for instance, and the economies of scale that Hugo talked about as well. Economies of scale are achievable within the sector, but they're not transferable across other shipping segments, as you mentioned before, between say containers and tankers. Selling ships in the simple answer, that's not going to accelerate the transition, selling ships into what we've seen in the last 18 months or so, I've often gone to owners with maybe less transparent histories and management practices that we're used to. We transport crude. We're very proud of what we do, and we do it safely. We're very aware of what the future development of the oil market will be and what the crude market will be, but we're not [indiscernible] industry just yet. The recent BP Energy outlook for 2023, highlighted more on its core scenarios that oil consumption will still be over 70 million barrels per day in 2050, so given that background, we're very much aware that we need to be focusing on the transition, but we need to be also conscious that there's a huge amount of opportunity to come through because the decline in consumption, we believe, will be gradual, not accelerated. Move on to the next slide, please. I'd like to highlight some of the strong pillars within the Euronav strategy, both in the past, but also which will lead us going forward. We've always been focused on fleet growth and we continue to [ deliver ] that. We have over 10% organic growth in build within our business today with new ships are due for delivery in the next 18 months. Those ships will be of the modern types, the most least consumptive in terms of fuel and the most in terms of beneficial to the environment. That's also intertwined with our wider governance approach. We've always had a very strong focus on governance, and that's been reflected in lots of surveys. And that's also been part of our wider financial structure in terms of the capital allocation. We've always had a very, very clear and transparent and coherent approach, not just in terms of shareholder returns, but also managing those returns within a very strong balance sheet, for instance. Lieve and her team have always been focused on having the loan-to-value structure and the leverage of between 30% and 50% and having sufficient liquidity to run through the next 2 years of any tanker cycle. But on top of that, we've adjusted in the last 3 years in particular, having a very sustainable and very, very coherent energy transition approach. Lieve will talk in a bit more detail on these on the later slides. But that's a very key focus for us and as a management team in order to secure the future for our business going forward. To move on to the following slide. We'd love to talk about looking at what our past performance is. This slide speaks for itself. This shows the total return for the 3 key and the largest tanker companies that are available to investors since Euronav listed in the New York Stock Exchange. And you can see consistently on that basis Euronav has been the best performer, not only over that period, but for most of the period that's under review there. That reflects those strengths and those core pillars of growth that will come through from the strategy, but also now we're outlining into our sustainability approach, and the core financing discipline we've had throughout that 5- to 6-year period. If I now move on to the following slide and look at some of the key financial strengths that the company has got. That's also very, very reflective of a very strong discipline on the following slide. The company, the Euronav, is ideally positioned on the following slide, Slide 12, to capture a lot of the opportunity that's out there. And we've delivered very strong results, in particular, in Q4 2022 as we outline what we believe is going to be a very, very strong and sustainable cycle -- up cycle for the tanker market. We can turn to the following slide, please, we can see that being reflected not only in terms of the fleet rejuvenation that we've undertaken, as I mentioned before, is we've got 7 ships due for delivery. The strong liquidity we've had as a core focus within what is a very, very cyclical industry. And we have that liquidity buffer now back up to nearly $1 billion. And this value creation approach and strategy, which has delivered sustainably over the last decade or so, we believe, is the appropriate strategy to continue delivering for our stakeholders. Next slide, please. To reflect that in a bit more detail, you can see on the left-hand side of this slide, you can see that we've made material progress in being early in terms of the cyclical recovery in getting new capacity being brought on board at very, very attractive prices. The middle part of the slide shows how we've been -- we've made significant progress in terms of fleet rejuvenation and reducing the average age of our fleet and therefore, obviously being friendly to the environment but also operationally the having more power for our business in terms of the earnings potential. And that's reflected in the fact that we've managed to sell all the tonnage and recycle our capital into that newer tonnage and develop a future platform for growth starting in last year. Next slide, please. And again, slight repetition, but the growth that we've got in place and the growth that we've delivered is something which has been incumbent and embedded in the company's DNA for a long period of time now. Hugo mentioned before, part of that's been consolidation, when the moment is right and when the opportunity arises, we've done that with 2 major transactions in the last 9 years. We are an operational leverage sector, but we have the best outlook that the tanker market has seen in over 20 years. We'll continue to have this very, very strict, strong discipline, balance sheet focused with sufficient liquidity that will help us drive returns currently at 80% returns in terms of our net income after capital gains to be returned to shareholders, either in cash dividends or buybacks depending on where the shares are trading. And we've augmented that quite successfully in the last 2 years in particular, with a net zero approach and net zero target, in particular, continue to develop a lot of ESG initiatives and sustainability initiatives which we believe will continue to drive the company forward and deliver growth. It is the best outlook for the market for 20 years, and I'm now going to hand over to our CFO, Lieve Logghe, to go through some of the sustainability initiatives and ambitions that we have as a company.

Thank you, Brian. Good afternoon, good morning, wherever you are. So welcome to the call. And as already mentioned by Brian and Hugo, indeed several times on sustainability, I want to bring your attention 2 specific points. First of all, I want to mention and to stress that at Euronav, we are convinced about our pivotal role we have to take into the energy transition. While we provide energy volume and security through oil, we continue to gradually transform ourselves to remain a sustainable and critical part of the energy global chain. And on the slide, you see that we also shift from using less energy to cleaner energy. And let me stress again that decarbonization is a priority for us. We have set one of the most ambitious net zero trajectories in the shipping industry with a clear roadmap and a sustainable or tangible milestones as the slide shows. We will be gradually shifting to a cleaner and more sustainable fleet through targeted investments. Moving to the next slide, please. That slide shows you the details of all third parties that have clearly validated and endorsed our decarbonization journey whether they are the major organizations like MSCI or rating agencies like CDP. We want to continue to elevate the environmental and sustainable standards at the tanker business. And plus, I want to mention that we are founding partners of the green trade or leading green trade organizations. What makes us most proud of, and this is for the full Euronav team, is that we stand at the forefront of sustainable finance as evidenced by our recently closed $377 million sustainability-linked loan. In total, more than 50% of our current loan portfolio has an integrated sustainability feature in its facility. This brings me back to Hugo.

Thank you very much, Lieve. Thank you, Brian. Another couple of slides to go, and then we will open for Q&A. But we just wanted to, well, explain another set of what we believe the CMB strategy is in all proposition. Next slide, please. Before doing so, I would like to remind everyone what has happened in terms of stakeholding of CMB. I mean, here, we're talking about a shareholder that has left sold out every single share that they had in Euronav over the course of '19, '20, '21. To the extent that [ Ludovic ] who was representing the family on the Board of Euronav decided to leave himself -- sorry, to leave the board and himself not to be involved with Euronav anymore. And at that time, the explanation that we were being given was simple and very logical. They wanted to focus on CMB and CMB Tech, which is a very large company. They are very entrepreneurial about it. They have invested a lot of time, effort and money on hydrogen solutions, ammonia solutions for the maritime sector, but not only for many industrial sectors. And they thought at that time, there was a difficult, if not incompatible to have a Board representation in crude oil transportation company, and much to the regret of the Board, the Board understood that move and accepted it. Then of course, we continued with the company, and we continued with a very similar strategy that we have applied successfully in the last 15, 20 years. And when it was time that we would look at the next big transaction, and we've done a big transaction every 4, 5 years. And this one was about frontline, they started to reinvest in Euronav, which was obviously a very smart move because obviously, there was a lot of value to be created by the transaction and by the fact that the market was turning, as demonstrated by the evolution of the share price. But in fact, they did so only to block the transaction. And they did so to block the transaction, much to a surprise. And I would say that to this date, we're not sure that we understand why they did that. And why would you spend so much money in a company in order to block a transaction that is by -- is categorized by most, if not all, of the other stakeholders as being value creative and a very good transaction for the company itself. Next slide. We can go relatively quickly over it. It's just a representation of what CMB is proposing at the next Special General Meeting. So they do have 25% of the company. They want to elect 5 members, already went over it. So I'm not going to spend too much time on this one. Next slide, please. And this is a very important slide, and it's just an extract of what CMB was explaining to you to the extent that you were a participant to the webcast that they organized about 10 days ago of what their intentions are. And I'm personally not sure I understand why they would not be more blunt about their strategy. Why were they a little bit vague about their intentions on what to do and when to do it. And I'm, as a shareholder of the company, I feel that I have a clear choice in front of me. I'm not only the CEO, I'm also lucky to be a shareholder and what I feel we have all the shareholders have in front of them is a clear choice between 2 different propositions. And if I put myself in the shoes of CMB and try to understand what they're trying to do is extract as much value of the tanker business Euronav is operating in as quickly as possible and certainly for the next cycle, then reinvest those proceeds into a diversified set of ships and this diversification of ships is well, was clearly mentioned by them, but it happens to be the type of ships that they own in their private company and the private company that they privatized 6 or 7 years ago. So maybe that's the regret that they have because when you have clear ambition for growth, you probably need a public vehicle. And then in doing so, probably increase the debt and decrease the dividend, and this is a perfectly fine strategy for a private company. To my mind, it is not a strategy that will work for a public company, and this is the reason why, so far, we have not done that at Euronav, and we don't intend to do that to the extent that you, shareholders, don't want to change the Board, change the management or change the strategy. And so this is a very, very clear choice that we have in front of us. Do you want to continue on the course that is very well defined, that has a very good track record that we believe will be very successful in the future? Or do you want to change the strategy and fall into the unknown -- fall into a lot of uncertainty with a lot of question marks and give the keys of the company to a single shareholder. That is very much the question that is at stake in the next special general meeting of shareholders. Next slide, please. So I just wanted to talk about, well, the governance as it is on the company. This particular slide is about the management. So you will understand that my intention is not to speak about us too much. I think that we have good credentials, and you know who we are, who are the people. They've been there for a certain period of time and it's all fine. I would prefer to move to the next slide and speak about the Board himself. And the Board is composed of 5 members. Those 5 members are bringing very specific skills to the boardroom. In fact, they've all been selected for their skills. Most of them buy [ headhunters ]. And when we talk to those [ headhunters ], as we were trying to find new candidates and refreshing the board from [ time to time ] is very important thing at Euronav against again, it is good corporate governance. So when we were talking to the headhunters, we were describing those specific skills very accurately. What it is that we need, what is it that we are missing in the boardroom. And that's how we end up with the Board that we have today. There is a lot of diversification -- diversification in skill sets. Some are very expert in capital markets, some are very expert in the oil and gas industry, some are very expert in shipping, some are very expert in audit matters, and certainly, new regulations that are coming our way as public companies are. But there's also diversification in gender and there is also a diversification of nationality. So this is a very good board. And so again, the question that I'm begging to ask is why would you remove such a good group of people in one go? What have they done that deserves to be dismissed in one go? Next slide, please. So instead of this brutal dismissal of a Board, what the current Board is proposing is to have a more balanced Board. A balanced Board that is representing the change in the shareholding that we have had in the past when CMB and Famatown were not shareholders, we only have relatively small shareholders and no disrespect for them, but it was difficult to welcome everybody that had a 2%, 3%, 4% on the Board, and they were not asking for it. So today, we have 2 significant minority shareholders, each owning 25%, and we honestly welcome them into the boardroom. We believe that it's going to be a huge advantage for Euronav to go and look at the future, look at our strategy together and find a way forward so that this company can strive again. And when you have 2 shareholders that have 25%, you want them to come into the boardroom and to have a constructive, robust, constructive discussion about the company that they are big shareholders of. That's what the recommendation of the Board is supposed to give and we hope that the majority of the people will follow this recommendation that we will be able to have a very good and balanced Board, as explained. Next slide, please. The next slide is relatively important. No sorry, we can go back to your vote matters at the SGM slide before we move to that one. There is no text here. And it's simply to explain that in fact, and I've discovered recently that a lot of people don't know this aspect, but the very, very few people vote in public companies. You have a lot of shareholders that our shareholders, but when it comes to voting, they do not exercise their rights. And it is a right. Every single share has a vote. And we feel that when you have 2 relatively big shareholders that will definitely vote their share, it is the right that you should exercise if you want to be heard, if you want your voice to be heard, and that's the reason why we insist so much. We have put in place a number of tools that are available on the website to facilitate your vote. This is again something maybe one of the reason why people don't tend to vote that much. But we believe that with the help and these tools that we've put online will be helpful for you to exercise you're right, and your vote. And so that's where we insist that your vote matters. I mean I feel a little bit like a politician here campaigning for votes, but to some extent, it's very smaller exercise. Next slide, please. The next slide is just a repetition of what we have said already over and over, but you will see that when you vote, it's not obvious to see which resolution says what, so it is very important that you keep this slide in mind. Again, we are rejecting this idea that the entire Board should be dismissed as if they have done something wrong. We don't believe that's the case. We welcome a nonindependent, true nonindependent representation of big shareholders. We believe that it will add value to the company. We believe that the dialogue in the boardroom will be constructive if we vote for 2 non-independent directors of each of our very important shareholders that have [ accumulated ] 25% of the company in recent months. Next slide, please. So it's time to move to Q&A. I will probably change the camera to make sure that you see the 3 of us. We thought it was better to have you -- to have us talking to you just in front camera. But whilst you are asking your questions, we can to switch camera and go unmute for a short while. Thank you.

[Operator Instructions] The first question comes from Omar Nokta with Jefferies.

Hugo, Lieve, Brian. Thanks for the presentation. I would say it was very clear, concise and professional. I did want to ask about the structure of the proposals at the meeting, Hugo and just the way that they're arranged. Are they mutually exclusive? And what I mean is the proposal, say, to expand the Board from 5 members to 9, is it either you stay at 5 or you go to 9? Is there an in between or no in between.

There's all kinds of formats. Every resolution needs to be voted on an individual basis. So it's not a package. It's not 5 or 9. It's not the current 5 or the new 5 or 9. Every single person needs to be voted on or against on an individual basis. So we could end up with 0, in fact, for that matter. I hope not. That could be one or the other.

Okay. So it is -- so I guess it's conceivable then that CMB's proposal to replace the current 5 members is rejected, but it's also conceivable that they partially fill the remaining 4 seats where maybe Fredriksen gets his 2 Board seats and potentially CMB gets 0. That is a potential outcome of this meeting, if it were to happen that way?

That's correct, yes. Absolutely. And I insist -- sorry to insist on that, this is not what we are proposing. And again, we could have proposed that. I mean the Board could have said we don't want any of the CMB people in the boardroom because of the current -- well, hostility between the 2 of us. But as a matter of fact that what we're proposing, we believe that it's very important to have them in the board.

Yes. No. Makes sense. Hugo. And just as a quick follow-up, maybe not quick per se, but let's say it gets to the point where CMB does not get voted on to the Board. What do you think happens after that? And also, do you -- would you be interested as a company of potentially buying them out of their position?

One question at a time. The first one is obviously speculation. There is an AGM taking place in May, and that is our Annual General Meeting where you can also propose Board members. And so I suppose that either they or nomination committee would probably think about what is the best next move to do. So I don't want to speculate because this is not something that we are spending a lot of time on. I truly hope that they will be nominated at least one of them, if not 2 and that they will be able to explain to the Board what their real strategy is, how they want to influence the company in what direction, what would be the benefit of it, et cetera, et cetera. The next question is, if they are not, and I would say, unfortunately, continue to, well, oppose mergers or acquisitions that we want to do or we would be able to do in the future, that would be programmatic, buying them out is, to my mind, today, probably not the best use of capital. So we will need to find other solutions. But I think that I've said that in many earnings call, every problem has a solution. So I do believe that there are many so it's probably not appropriate to discuss them right now, and certainly not ahead of the AGM.

The next question comes from Christian Wetherbee with Citigroup.

This is Matt on for Chris. Just given the series of events that's unfolded with Frontline, we were wondering if there is some additional information that you could give us related to your M&A strategy moving forward, dividend strategy as well. Just anything on that front in terms of how the situation right now is going to ultimately play out and the effect in the business moving forward.

No, there is no update. I mean we thought it was very important for people to one more time understood that the emergency arbitration is something that is probably insignificant and that has happened in the past. According to the arbitrator, there was no emergency. The next one, which is very much about whether Frontline had the right to terminate or not, it's going to take a lot more time. Fortunately, the Belgian Corporate Governance, it made in a very good way that whenever there is a conflict of interest in one of the decisions that the Board has to make then that board member representing the interest of a shareholder or a strategic party has to reduce themself and leave the room. So even in the current circumstances and the -- as much as we hope that CMB two nonindependent will be elect -- we also hope that the 2 -- Famatown will be elected as well. And if we discuss the arbitration, then obviously, it will be in the boardroom with absence of those 2 members. That's the only update that I can give you. I mean, the rest is going to take probably a lot more time. And in terms of growth, again, I mean, we continue to believe that growth is of strategic importance for Euronav. There are many transactions that we can do in the market, as you know, and we have done that in the past. Let's not forget that we are a cyclical sector. At the moment, the cycle demonstrated it looks very interesting and it seems that it's going to be a multiyear cycle. But with a good cycle comes very high values, you know that we have always tried to time our acquisitions or merger at the time when the values were not as high as they are today. So let's see when we can apply that strategy, but there is no reason not to be as disciplined in the future as we have been in the past.

And the next question comes from Chris Tsung with Webber Research.

Just in regards to the first arbitration you discussed the merits of the Frontline's ability to terminate this, has there been date set?

No. I mean the way those arbitration takes place is that you first put your claim and then the other party has to respond to that claim that has already -- I mean, you have to give them a number of days, and I don't know how many by half. Then we have the ability to read what they've put in the file. Obviously, the arbitrators are also doing their job. You also need to take the time to select the arbitrator. I think we're talking about 3 arbitrators, tribunal. So honestly, it's not going to be quick. Again, the emergency one is by definition and by nature of it, a very, very quick process. But that's also the reason why it doesn't judge on the merit of the claim. It only looks at some of the elements that needs to be decided urgently. In the earnings call, I was giving an example of a couple that wants to divorce, well, nobody can sell the house until the divorce has been settled and the judge has allocated the house to one of the 2 parties. Here, the judge has us looked at all the elements and said, well, there is nothing urgent. So I don't have to do anything in emergency and I dismiss the couple of points that Euronav was making in terms of feeling that it was more urgent than not. But on the merits, it will take several months, if not years.

I see. All right. Great. That's great detail and color. Just as a follow-up. At this point, I'm just kind of curious like what does the blue sky scenario look like?

That's a very good one. It is blue sky, but very cold outside. So I do hope that it be blue sky and the temperature in the boardroom is going to be a little bit higher than the temperature outside the office today. I do believe that when people talk to one another in front of everybody because we have many sort of bilateral discussions but when the 3 main parties in here, I would say, Frontline is one party, CMB is one party and Euronav represented by its current supervisory board is a party, when they are around the table and they are directors of the company who have a duty to do whatever is best for the company, we will find solutions. So already having those 3 parties around the table in the boardroom is for me the blue sky. The temperature then needs to rise. We have to wait a little bit for the spring and the summer. I don't think that we will find a solution overnight, but I do believe that by having everybody around, we will find solutions.

And we also have one question on the webcast and that question is suppose new Saverys group nor the Fredriksen group gets a seat on the Board of Directors? If so, is there a plan B? What consequences be?

Well, I'm not sure that you need a plan B in these circumstances. I do believe that if none of them are coming into the boardroom is because the other shareholders, and I suppose that then they would neutralize each other. So the CMB guys would vote against the Frontline and Frontline would vote against the CMB. So those two 25% would neutralize each other. And so the outcome or the decision or whether or not they join the boardroom would be the decision of the other shareholders, which are 50%. But as I have explained, most often than not, not everybody exercising their right to vote. So whoever votes will decide who is in the boardroom to the extent that the 2 parties neutralize each other. The company can do [indiscernible] with that in the sense that that's what we have had so far. And I don't think that our track record is miserable for the opposite. So we will continue to operate the company and take advantage of the current market, as Brian said many times, we are entering what we believe is a multiyear cycle where the strategy of the company is about extracting value from the market, operating the ships as best as we can trying to keep the cost as low as we can and returning the one deserved returns to shareholders that they can claim. So I don't think that it's a problem in the short-term. In the long-term, I think that it's problematic not to have 2 large shareholders in the boardroom because I prefer to have a direct dialogue with all of them, than just not.

And that does conclude the questions. So I would like to turn the floor to management for any closing comments.

Well, closing comments will be very short and it's exercise your right, come and vote, please. And we will respect obviously the outcome, whatever that is. Thank you very much.

The conference and the presentation have now concluded. Thank you for attending the presentation, and you may now disconnect your lines.