Royal Vopak Nv · EURONEXT:VPK
Royal Vopak Nv — Q1 2017 Earnings Presentation
66 slides from Royal Vopak Nv's earnings presentation, April 2017
Slide 1: Q1 2017 Roadshow Presentation
Storing vital products with care• Royal Vopak Q1 2017 Roadshow Presentation
Slide 2: Forward-looking statement
Forward-looking statement This presentation contains ‘forward-looking statements’, based on currently available plans and forecasts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the
Slide 3: Introduction
The world’s leading independent tank storage company building Introduction • on an impressive history of more than 400 years
Slide 4: Vopak at a glance
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Vopak at a glance Number of terminals* Number of countries* Market capitalization* FY2016 Revenues** In EUR billion In EUR million 67 25 5.3 1,347 Compared to 2015 -3% Storage capacity
Slide 5: Four centuries of history
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Four centuries of history 1616 ‘De Blaauwhoudenveem’ was founded 1967 (much later known as ‘Blaauwhoed’) Merger of Pakhuismeesteren and Blaauwhoed into 1818 Pakhoed Establishment of Pa
Slide 6: Who we are
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Who we are We ensure safe, efficient and clean storage of products that are needed to meet the basic needs of people. This is what our stakeholders value us for. We store vital product
Slide 7: Business model
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Business model Blending Heating / cooling Additional handling services related to loading / unloading Excess throughput fees Administrative support Monthly invoicing in arrears Service
Slide 8: Occupancy rate developments
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Occupancy rate developments Vopak is confident that it will achieve an average occupancy rate of at least 90% in 2017 Occupancy rate* In percent 90-95% 85-90% 94 96 95 94 94 94 92 93 9
Slide 9: Strategic terminal types
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Strategic terminal types Industrial terminals Gas terminals Distribution terminals Hub terminals Industrial terminals Terminals facilitating Import and distribution Major hubs, in the
Slide 10: Global presence
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Global presence Per Q1 2017 ARA region* Houston Fujairah Singapore Strait Number of Number of Storage terminals countries capacity *Amsterdam-Rotterdam-Antwerp = Hub location = Vopak t
Slide 11: Diversified product-market mix
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Diversified product-market mix Vopak Q1 2017 Roadshow Presentation 11
Slide 12: Well-balanced global portfolio
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Well-balanced global portfolio Oil Chemical Industrial Vegoils Gas products products terminals & biofuels products Typical contract duration 0-5 years 0-5 years 5-20 years 0-3 years 10
Slide 13: Key developments
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Key developments Occupancy rate* EBITDA development** In percent In EUR million 94 96 95 94 93 93 91 92 93 812 822 88 88 768 753 763 598 636 513 429 370 314 2006 2007 2008 2009 2010 20
Slide 14: Business challenges
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Business challenges Strategic Operational Safety and service Competitive environment Assure 2016 Shifting energy landscape and product flows Productivity through technology Compliance
Slide 15: Discussions with investors
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Discussions with investors Economic & market dynamics Projects Slowdown emerging growth Projects under construction and business development Developments oil and commodity Stra
Slide 16: Why invest in Vopak
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Why invest in Vopak Independent global storage and service provider active in all continents and all product groups Market leader in safety and service standards with a strong focus on
Slide 17: Demand drivers
As the world population is growing and becoming more affluent, Demand demand for vital products like energy, chemicals and food are drivers • increasing 17
Slide 18: Megatrends
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Megatrends Influencing global demand and supply Industrialization and urbanization Changing Disruptive in emerging economies demographics technologies Geopolitical developments Sustain
Slide 19: Impact on end markets
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Impact on end markets Energy, Manufacturing and Food & Agriculture Trends ENERGY MANUFACTURING FOOD & AGRICULTURE End Power generation sector to be Demand growth in the Growth dr
Slide 20: Imbalances of petroleum products
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Imbalances of petroleum products Growing need for efficient hub functions and import/distribution type facilities FSU Greater Europe North America Middle East 2016 2026 2016 2026 2016
Slide 21: Chemicals outlook
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Chemicals outlook Increasing global demand for plastics Ethylene Capacity Growth 250 World consumption in mln tons 200 Other 150 Europe 100 Asia & Pacific Middle East 50 North America
Slide 22: Rebalancing of the LNG market
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Rebalancing of the LNG market A new wave of supply expected, predominately coming from the US and Australia Norway ~4% Russia ~7% North America Qatar ~23% North Africa ~14% ~5% West Af
Slide 23: Vopak's LNG strategy
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Vopak’s LNG strategy LNG is received, stored, reloaded or regasified Mature markets Drivers Inland gas markets LNG trading Hub terminal Break-bulk distribution Transport / bunkering Si
Slide 24: Strategy execution
Our success depends on our ability to show leadership in five Strategy key areas execution •
Slide 25: Leadership in five areas
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Leadership in five areas Storing vital products with care• Leading Operational Service Technology People assets in leadership leadership leadership leadership leading locations Founder
Slide 26: Leading assets in leading locations
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Leading assets in leading locations 67 terminals in 25 countries* Hamburg Talinn Amsterdam Rotterdam Antwerp Yangpu Ningbo Haiteng Lanshan Tianjin Zhangjiagang Tarragona Karachi Barcel
Slide 27: Storage capacity developments
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Storage capacity developments In million cbm between 2003 – Q1 2017 +15.8 33.8 34.3 34.7 35.7 29.9 30.5 Subsidiaries 27.1 28.3 28.8 27.8 Joint ventures 21.2 21.8 20.1 19.7 19.7 19.9 20
Slide 28: Return requirements for investments
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Return requirements for investments Footprint in Optimization growth emerging markets opportunities 1 2 First-mover Option advantage value Contribution from key accounts 6 3 Mitigating
Slide 29: New projects under construction
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics New projects under construction 2.8 million cbm currently under construction +2.8 2.5 38.5 Storage capacity In million cbm 1.0 35.7 0.3 34.7 FY 2016 Operatorship* Q1 2017 Brownfield Gr
Slide 30: Operational leadership
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Operational leadership The right people, high quality assets and robust repeatable processes 1. Safety Maximizing operational safety Minimizing environmental impact 2. Service Ma
Slide 31: Safety performance
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Safety performance Process safety and occupational health and safety is our top priority Total Injury Rate (TIR) Lost Time Injury Rate (LTIR) Total injuries per 200,000 hours worked by
Slide 32: Service leadership
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Service leadership Based on a thorough understanding of specific customer needs combined with our in-depth knowledge of markets, products and operational expertise Global customers A
Slide 33: Contract durations
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Contract durations A well-balanced global portfolio supported by a diversified customer base with different underlying demand drivers Contract position FY2014 Contract position FY2015
Slide 34: Technology leadership
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Technology leadership Eliminating human error, further improving our safety performance and increasing the productivity of our terminals Vopak will accelerate investments to experiment
Slide 35: People leadership
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics People leadership We aim to inspire and challenge our people without losing sight of our strong competences and core values Team spirit Integrity Care for Safety, Health and Commitment
Slide 36: Capital management
Disciplined capital allocation, maintaining a balanced risk-return Capital profile, and consistent dividend policy management • 36
Slide 37: Priorities for cash
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Priorities for cash 1 Debt servicing EUR 2.1 billion, remaining maturity 7 years, average interest 4.1% 2 Dividend EUR 0.9 billion paid to shareholders in the last 12 years 3 Disciplin
Slide 38: Value creation
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Value creation Vopak well-positioned to take several investment decisions in the 2017-2019 period Total investments 2005-2019 Expansion capex** In EUR million In EUR million; 100% = EU
Slide 39: Headroom
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Headroom Financial flexibility to support growth Senior net debt : EBITDA ratio Strong investment grade company Maximum ratio under other PP programs and syndicated revolving credit fa
Slide 40: Capital structure
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Capital structure Financial flexibility to support growth Syndicated Ordinary shares Private placement Equity(-like) Revolving program Credit Facility Listed on Euronext USD: 1.8 billi
Slide 41: Debt repayment schedule
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Debt repayment schedule Debt repayment schedule RCF flexibility US PP In EUR million RCF drawn Asian PP Subordinated US PP Other 1,200 1,100 1,000 400 300 200 100 0 2017 2018 2019 2020
Slide 42: Net finance costs
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Net finance costs Net finance costs 2016 In EUR million Interest and dividend income 11.4 10.7 Finance costs -118.6 -115.9 Net finance costs -107.2 -105.2 Net interest bearing debt Ave
Slide 43: Solid financial position
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Solid financial position Maintaining a consistent solvency while growing our global network Total equity and net liabilities Net liabilities* Equity 54% 61% 46% 64% 39% 36% FY FY FY FY
Slide 44: Stable dividend growth
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Stable dividend growth Increase dividend with 5% to EUR 1.05 per share Dividend and EPS* 2003-2016 In EUR 3.0 2.56 EPS BARRING 2.5 EXCEPTIONAL 2.0 CIRCUMSTANCES, 1.5 +5% THE INTENTION
Slide 45: Business performance
Long-term value creation, robust cash flow generation and margin Business management performance • 45
Slide 46: Long-term value creation
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Long-term value creation Key elements supporting our business model Focus on Strong capital risk-return structure with Stable margins and healthy Diversified and take-or-pay cash flow
Slide 47: Robust business results
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Robust business results Capital disciplined, step-by-step EBITDA growth EBITDA and Net result joint ventures and associates In EUR million 2005 - 2007 2008 - 2010 2011 - 2013 2014 - 20
Slide 48: FY 2016 financial highlights
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics FY 2016 financial highlights Results impacted by divestments but fully compensated thanks to higher occupancy rate supported by healthy demand drivers Revenues* Adj. Revenues* ** In EU
Slide 49: Margin developments
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Margin developments Maintaining solid margins EBIT(DA) margin* OCCUPANCY In percent RATE DEVELOPMENT 70 65 60 EBITDA margin 55 EBIT margin 50 MARGIN 45 MANAGEMENT 40 35 30 25 20 15 CAP
Slide 50: FY 2016 return indicators
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics FY 2016 return indicators Focus on cash flow and capital disciplined growth NON-IFRS IFRS BASED PROPORTIONAL ROE* ROCE** CFROGA*** (after interest, after tax) (before interest, before
Slide 51: Non-IFRS proportionate information
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Non-IFRS proportionate information FY 2016 key figures IFRS BASED NON-IFRS PROPORTIONAL Occupancy rate Occupancy rate In percent In percent 88 92 93 88 92 94 2014 2015 2016 2014 2015 2
Slide 52: Q1 2017 key figures
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Q1 2017 key figures -excluding exceptional items- Positive developments in Q1 2017 compared to the previous quarter, while results are lower compared to Q1 2016 Revenues* EBITDA** In E
Slide 53: Q1-Q4 EBITDA analysis
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Q1-Q4 EBITDA analysis Improved results in Asia, the Americas and LNG offset mainly by the Netherlands +2% 4.4 5.1 4.7 203.1 1.3 2.2 2.4 199.8 0.6 1.2 197.6 0.2 Acquisitions/ Pre-OPEX Q
Slide 54: Q1-Q1 EBITDA analysis
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Q1-Q1 EBITDA analysis Improved results in EMEA, the Americas and LNG more than offset by mainly the Netherlands -3% 4.3 0.9 214.7 1.2 1.1 2.3 3.8 209.1 1.0 203.1 9.4 12.2 Acquisitions/
Slide 55: EBIT to Net profit analysis
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics EBIT to Net profit analysis Q1 2017 Q4 2016 Q1 2016 EBIT 135.4 128.9 150.4 Net finance costs 25.8 25.9 25.8 Profit before income tax 109.6 103.0 124.6 Income tax 21.6 19.4 17.1 Net pro
Slide 56: Segmentation
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Segmentation Occupancy and EBITDA development per division Occupancy rate* Netherlands Asia EBITDA** 92 80 100 80 91 91 91 92 96 96 90 75 94 94 75 90 92 95 70 70 88 75.5 90 74.6 75.6 7
Slide 57: Q1 2017 Netherlands developments
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Q1 2017 Netherlands developments Occupancy rate* Revenues* In percent In EUR million 92 96 92 126.4 119.2 85 88 110.8 109.9 117.6 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Stor
Slide 58: Q1 2017 EMEA developments
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Q1 2017 EMEA developments Occupancy rate* Revenues* In percent In EUR million 89 91 96 93 63.0 68.3 80 58.4 58.5 44.6 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Storage capacity
Slide 59: Q1 2017 Asia developments
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Q1 2017 Asia developments Occupancy rate* Revenues* In percent In EUR million 95 95 90 92 91 95.6 94.8 99.5 89.7 86.7 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Storage capacity
Slide 60: Q1 2017 Americas developments
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Q1 2017 Americas developments Occupancy rate* Revenues* In percent In EUR million 91 91 89 92 90 78.1 67.6 68.0 61.1 56.9 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Storage capa
Slide 61: Q1 2017 JVs and associates
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Q1 2017 JVs and associates Netherlands Americas In EUR million In EUR million 0.7 0.7 0.7 0.4 0.4 0.2 0.1 0.2 0.0 0.0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 EMEA LNG In EUR
Slide 62: Looking ahead and other topics
Outlook 2017, strategic priorities 2017-2019 and other topics Looking ahead and other topics •
Slide 63: Looking ahead
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Looking ahead Continue long-term growth journey Vopak believes it will be able to continue its long-term growth journey and positive EPS development while maintaining a Cash Flow Ret
Slide 64: Strategic priorities 2017-2019
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Strategic priorities 2017-2019 Disciplined growth and productivity improvement Vopak is well-positioned to take several investment decisions in the Growth 2017-2019 period to capture g
Slide 65: Other topics
Demand Strategy Capital Business Looking ahead Introduction drivers execution management performance & other topics Other topics Effective tax rate* 2016 EBITDA* transactional currencies In percent In percent 20.9 20% 17.1 18.1 17.6 USD SGD EUR 16% Other 38% 2013 2014 2015 2016 26% Funding level Dut
Slide 66: Storing vital products with care
Storing vital products with care• Royal Vopak Q1 2017 Roadshow Presentation 66