Royal Vopak NV · EURONEXT:VPK
Royal Vopak NV — Q3 2022 Earnings Presentation
36 slides from Royal Vopak NV's earnings presentation, Nov 11, 2022
Slide 1: Analyst Presentation 11 November 2022
Analyst Presentation 11 November 2022 Vopak Analyst Presentation Q3 2022 1
Slide 2: Forward-looking statement
Forward-looking statement Any statement, presentation or other information contained herein that relates to future events, goals or conditions is, or should be considered, a forward-looking statement. Although Vopak believes these forward-looking statements are reasonable, based on the information a
Slide 3: Shaping the future: Vopak Q3 2022 Results
Shaping the future Vopak Q3 2022 Results Dick Richelle CEO of Royal Vopak
Slide 4: Key highlights
Key highlights GROW ACCELERATE IMPROVE EUR 1 billion EUR 1 billion Growth capex by 2030 Growth capex by 2030 Repurposing oil capacity in Improved performance with Expansion of our industrial Los Angeles to sustainable a strong EBITDA of EUR terminal in China aviation fuel and renewable 227 million i
Slide 5: Market dynamics
Well diversified infrastructure portfolio contributing to energy and supply security New energies & Gas Energy Manufacturing sustainable feedstocks Market dynamics • Momentum for hydrogen • Rebalancing global oil flows • The chemicals market is • LNG infrastructure is in high continues to accelerate
Slide 6: Diversified portfolio through global network, product and commercial expertise
Diversified portfolio through global network, product and commercial expertise Global network Product expertise Commercial expertise Diversified portfolio of terminals Storing a wide variety of products and Our skilled commercial expertise allows across the globe expertise in handling gaseous produc
Slide 7: Improve portfolio performance
Improve portfolio performance Improve Grow Strong EBITDA performance • Strong EBITDA of EUR 659 million YTD Q3 2022, supported by positive currency translation effects 5 • Chemicals and gas continue to perform well 659 45 42 • Oil is still underperforming versus last year, but third 20 quarter shows
Slide 8: Grow our industrial footprint in Caojing
Grow our industrial footprint in Caojing Strong track record in China with a network of 7 terminals, including 4 industrial terminals Capacity 110k cbm expansion with a long-term contract to be commissioned by Q1 2025 Financing Financing via local funding means China network Caojing Operating cash r
Slide 9: Grow our gas footprint in Gate terminal
Grow our gas footprint in Gate terminal Gate terminal expands its capabilities and launches an open season for a 4th tank Truck loading Two additional truck loading bays to facilitate high demand Send-out Send-out capacity for this winter is increased, supplying the equivalent of 50% of the Netherla
Slide 10: Accelerating in new energies and sustainable feedstocks
Accelerating in new energies and sustainable feedstocks 4 focus areas Ammonia – ACE, import terminal for green ammonia as a Sustainable fuels – projects in LOHC – green liquid organic hydrogen carrier pilot (LOHC) Liquid hydrogen – green liquid hydrogen supply chain between Vlaardingen and Los Angel
Slide 11: Repurposing to sustainable fuels
Repurposing to sustainable fuels Transition to sustainable fuels in combination with long-term contract anchors our LA business Capacity Repurposing 22 storage tanks from traditional marine fuels to sustainable aviation fuel and renewable hydrocarbon diesel Long-term contract Long-term contract with
Slide 12: Key highlights
Key highlights GROW ACCELERATE IMPROVE EUR 1 billion EUR 1 billion Growth capex by 2030 Growth capex by 2030 Repurposing oil capacity in Improved performance with Expansion of our industrial Los Angeles to sustainable a strong EBITDA of EUR terminal in China aviation fuel and renewable 227 million i
Slide 13: Shaping the future: Vopak Q3 2022 Results
Shaping the future Vopak Q3 2022 Results Michiel Gilsing CFO of Royal Vopak
Slide 14: Delivering on performance improvement
Delivering on performance improvement EBITDA Prop. operating cash flow Prop. operating cash return €659 m. EBITDA +7% Prop.€514 m. cash operating +17% flow 11.3% cash Prop. operating +0.2 pp return Net Debt to EBITDA Inflation protection 2022 Outlook Proportional Raising EBITDA and cash 2.82x EBITDA
Slide 15: Q3 2022 Key messages
Q3 2022 Key messages EBITDA – Q3 ‘22 Occupancy – Q3 ‘22 Costs – Q3 ‘22 OCR – YTD ‘22 In EUR million % In EUR million % 227 QoQ +3% 89 QoQ +2 pp 183 QoQ +5% 11.3 YoY +0.2 pp Proportional occupancy Costs increased due to Improved financial Proportional operating improved driven by Asia higher utility
Slide 16: High EBITDA primarily due to strong performance of our LNG assets
High EBITDA primarily due to strong performance of our LNG assets EBITDA In EUR million EBITDA performance 0.9 1.8 2.1 226.9 • Positive currency effects also contributed to 2.1 1.2 improved EBITDA performance 6.5 3.6 • EBITDA improved due to improved results in 4.3 our New Energy & LNG division with
Slide 17: Well diversified infrastructure portfolio
Well diversified infrastructure portfolio Americas Asia & Middle East China & North Asia 88 93 93 94 87 87 90 91 84 84 84 84 85 85 85 58.7 70.9 72.5 73.4 76.4 78.4 48.2 54.4 54.5 56.2 22.0 19.5 18.6 16.8 15.6 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2021 2021 2022 2022 2022 2021 2021 2022 2022 2
Slide 18: Actively managing our portfolio towards higher operating cash returns
Actively managing our portfolio towards higher operating cash returns Increase portfolio operating cash return Rationalize the portfolio • Vopak entered into an agreement to sell 100% of Vopak Agencies • The transaction is expected to close by the end of the year Repurpose our existing assets in Los
Slide 19: Strong cash flow generation
Strong cash flow generation Cash flow overview In EUR million +24% YoY 531 429 35 496 Cash flow 346 194 • Improved cash flow driven by higher dividends from joint 353 69 233 ventures and lower operating capex Dividends 180 • Growth investments include Aegis joint ventures, slightly from JV 185 offse
Slide 20: Good operational performance driving higher proportional operating cash flow
Good operational performance driving higher proportional operating cash flow Proportional cash flow (YTD ’22) Proportional operating cash flow bridge In EUR million In EUR million +17% 798 514 438 34 284 49 7 514 299 215 EBITDA Operating Operating Growth Cash flow Proportional Proportional Proportio
Slide 21: Operating cash return increased due to positive EBITDA performance and lower operating capex
Operating cash return increased due to positive EBITDA performance and lower operating capex Operating cash return1 reconciliation – YoY In EUR million Operating cash return performance Joint ventures Subsidiaries Proportional EBITDA Proportional Operating Capex • Operating cash return improved due
Slide 22: Disciplined capital allocation priorities
Disciplined capital allocation priorities We focus on a robust balance sheet – Maintain a healthy leverage ratio We return value to shareholders – By a progressive dividend policy Remaining capital is spent on growth investments with attractive operating cash returns Generate total shareholder retur
Slide 23: Solid balance sheet at 2.82x senior net debt : EBITDA
Solid balance sheet at 2.82x senior net debt : EBITDA and 5-year average time to maturity Senior net debt : EBITDA Debt repayment schedule In EUR million Maximum covenant level of 3.75x 3.75 RCF headroom RCF drawn Other Subordinated loans 2.93 3.0 2.82 781 Asian PP US PP 2.5 445 297 229 YTD ‘21 YTD
Slide 24: Healthy interest coverage
Healthy interest coverage Interest cover Interest-bearing loans Composition and average rate Floating interest rate Fixed interest rate 8.4 8.6 Average floating rates: 1.0% 3.5 Average fixed 32% rates: 3.9% Minimum covenant 68% level of 3.5x FY ‘21 YTD ‘22 Solid balance sheet allows us to execute ou
Slide 25: Protecting our EBITDA margin through indexation clauses
Protecting our EBITDA margin through indexation clauses Proportional revenues containing indexation clauses Indexation clauses by type Proportional EBITDA margin (%) 55 57 58 56 55 53 52 Inflation protection at 100% 46% 72% 4% Inflation protection at 80% 16% Inflation protection at <80% 2016 2017 20
Slide 26: Portfolio transformation has improved earnings quality
Portfolio transformation to industrial and gas terminals has improved earnings quality Share of proportional revenue with Contract duration as a share of a contract duration > 10 years proportional revenue (%) 100% 100% 12% < 1 year 25% 29% 1-3 years 22% 31% 13% 10% 18% 3-5 years 5-10 years 17% 23%
Slide 27: 2022 Outlook
2022 Outlook Vopak Analyst Presentation Q3 2022 27
Slide 28: Appendix
Shaping the future XY Appendix Vopak
Slide 29: Project timelines
Project timelines Vopak’s Capacity Country Terminal ownership Products (cbm) 2020 2021 2022 2023 2024 2025 Growth projects Existing terminals United States Los Angeles 100% Renewable fuels 148,000 Netherlands Vlaardingen 100% Renewable feedstocks 64,000 Belgium Antwerp 100% Chemicals 41,000 Brazil A
Slide 30: Vopak's approach to sustainability
Vopak’s approach to sustainability We are ambitious and performance driven with a balanced roadmap focusing on care for people, planet and profit ESG benchmarks Sustainability roadmap MSCI Rating: AAA* (Scale: CCC to AAA) Safety is our first priority Positioned towards the future and ready to
Slide 31: Non-IFRS proportional information
Non-IFRS proportional information EBITDA Occupancy rate In EUR million In percent – subsidiaries only IFRS BASED 211 213 213 219 227 87 86 83 87 88 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2021 2021 2022 2022 2022 2021 2021 2022 2022 2022 EBITDA Occupancy rate PROPORTIONAL In EUR million In percent NON-IFRS 26
Slide 32: Americas developments
Americas developments Storage capacity Proportional occupancy rate Revenues* In million cbm In percent In EUR million 0.5 Q3 2022 90 91 93 93 94 96.3 98.2 94.8 0.9 4.7 million cbm 83.1 86.7 3.3 Subsidiaries Joint ventures & associates Operatorships Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2021 2021 2022 2022 2
Slide 33: Asia & Middle East developments
Asia & Middle East developments Storage capacity Proportional occupancy rate Revenues* In million cbm In percent In EUR million Q3 2022 84 84 84 84 88 85.9 3.3 4.2 74.6 78.2 78.8 16.8 million cbm 68.9 9.3 Subsidiaries Joint ventures & associates Operatorships Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2021 2021
Slide 34: China & North Asia developments
China & North Asia developments Storage capacity Proportional occupancy rate Revenues* In million cbm In percent In EUR million Q3 2022 87 85 85 87 85 0.8 3.2 million cbm 11.9 13.0 13.3 13.5 11.2 2.4 Subsidiaries Joint ventures & associates Operatorships Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2021 2021 2022
Slide 35: Europe & Africa developments
Europe & Africa developments Storage capacity Proportional occupancy rate Revenues* In million cbm In percent In EUR million 1.3 Q3 2022 88 86 87 87 142.7 147.0 151.1 79 141.3 136.7 10.6 million cbm 9.3 Subsidiaries Joint ventures & associates Operatorships Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2021 2021 20
Slide 36: JVs & associates developments
JVs & associates developments* Net result JVs and associates Americas Asia & Middle East In EUR million In EUR million In EUR million 57.6 47.1 51.0 42.2 43.4 22.1 23.2 19.2 18.4 18.6 4.4 4.5 3.8 3.3 1.5 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2021 2021 2022 2022 2022 2021 2021 2022 2022 2022 2