Royal Vopak NV · EURONEXT:VPK

Royal Vopak NV — Q1 2019 Earnings Presentation

41 slides from Royal Vopak NV's earnings presentation, Apr 19, 2019

1. Slide 1: Storing vital products with care

   Storing vital products with care Q1 2019 – Roadshow Presentation Royal Vopak

2. 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

3. Slide 3: Key message Capital Markets Day

   Key message Capital Markets Day  Confidence in short-term performance delivery and managing long-term value  Global well-diversified portfolio  Strong competitive position  Clear and robust financial framework  Strategy execution 2017-2019 is well on track Q1 2019 Roadshow Presentation 3

4. Slide 4: External developments 2017-2019

   External developments 2017-2019 Structural business drivers influenced by two global trends Storage  Structural demand drivers for Energy  Facilitate the introduction of demand storage of vital products, driven by transition lighter, cleaner fuels drivers growth in population and global  Pursue p

5. Slide 5: Business environment update

   Business environment update Diversified portfolio, well positioned for future opportunities Chemicals Focus on operational delivery Oil products Prepare for the uptick  Strong underlying demand for  Oil hubs: solid long-term demand chemicals drivers despite short-term weakness  Positive investmen

6. Slide 6: Vopak at a glance

   Vopak at a glance At end Q1 2019 Number of terminals Number of countries Storage capacity In million cbm 69 25 37.9 37.9 35.9 Q1 Q1 2018 2019 Market capitalization Number of employees Total injury rate (TIR) In EUR billions In FTE* In 200,000 hours worked own personnel and contractors* 5.5 5,733 0.3

7. Slide 7: Robust Vopak strategy

   Robust Vopak strategy Leadership in 5 pillars with clear strategy execution Storing vital products with care Leading asset Service Operational Technology People in leading leadership leadership leadership leadership locations Founder’s mentality Vopak Values Q1 2019 Roadshow Presentation 7

8. Slide 8: Strategic terminal types

   Strategic terminal types Industrial terminals LNG, LPG and Chemical terminals Oil terminals chemical gases Vopak has more than 40 years of Demand for gas is increasing, driven by The strong growth of global chemicals Oil import, distribution and hub terminals experience with industrial terminals. pe

9. Slide 9: Portfolio transformation

   Portfolio transformation Shift towards gases and industrial terminals and focus on the ‘East of Suez’ Proportionate revenue per product ~10% ~10% 2014-2016 Reshaping the portfolio ~15% 10-15% 20-25% 25-30% LNG, LPG & Chemical Period  Divestment of 19 terminals Gases 35-40% 25-30% Industrial termina

10. Slide 10: Digital transformation

    Digital transformation Improve safety performance, better service for our customers and more efficient use of our assets resulting in lower costs  Centralized cyber security Digital  Replacing and modernizing our Cyber security program to protect our systems Modernization company-wide IT and OT sy

11. Slide 11: Value creation - sustainability

    Value creation - sustainability Safety and sustainability developments Safety Sustainability  Leading safety performance in storage industry  UN Sustainability Development Goals (SDGs) Personnel Safety (TIR) Total injuries per 200,000 hours worked 1.5 1.0 0.5 0.30 0 2008 2009 2010 2011 2012 2013 2

12. Slide 12: Strategy execution well on track

    Strategy execution well on track Strategic direction is set towards growth and productivity improvements  14 expansion projects announced in last years Capture growth  New projects in Canada, Malaysia, Indonesia, Singapore, South Africa, Brazil, Pakistan and the Netherlands Spend EUR 750 million o

13. Slide 13: Key messages

    Key messages strategic direction Q1 2019 key messages Capture ‘Strong financial performance in Q1, growth next step taken in delivery of Vopak’s strategy’ Spend EUR 750m  Pro forma Q1 EBITDA of EUR 202 million is EUR 12 million higher than on sustaining and prior year as a result of currency effect

14. Slide 14: Q1 2019 vs Q1 2018 EBITDA

    Q1 2019 vs Q1 2018 EBITDA Pro forma EBITDA increased by EUR 12 million, mainly from contributions from joint ventures 214.6 2.2 1.0 12.2 5.0 202.4 5.9 194.8 190.2 4.6 6.7 10.2 Q1 2018 FX-effect Adjusted Europe & Asia & China & Americas LNG Global pro forma IFRS 16 Q1 2019 Q1 2018 Africa Middle East

15. Slide 15: Q1 2019 vs Q4 2018 EBITDA

    Q1 2019 vs Q4 2018 EBITDA Strong performance in Asia & Middle East and Americas supported pro forma EBITDA improvement 214.6 4.1 202.4 12.2 3.5 7.3 180.7 1.6 182.3 9.9 4.2 0.5 Q4 2018 FX-effect Adjusted China & LNG Asia & Americas Europe & Global pro forma IFRS 16 Q1 2019 Q4 2018 North Asia Middle E

16. Slide 16: Divisional segmentation

    Divisional segmentation Europe & Africa executes strategy and Asia & Middle East set for growth Europe & Africa Asia & Middle East Americas 86 86 85 89 86 85 85 92 83 82 90 90 89 89 89 80.8 74.5 77.2 70.3 73.6 64.0 66.5 65.9 77.5 59.6 32.2 34.9 33.4 28.5 35.9 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q

17. Slide 17: Non-IFRS proportionate information

    Non-IFRS proportionate information EBITDA Occupancy rate In EUR million In percent IFRS BASED 202 215 190 87 86 Non-IFRS proportionate information Q1 2018 Pro forma Q1 2019 Q1 2018 Q1 2019 Q1 2019 provides transparency in Vopak’s EBITDA Occupancy rate* underlying performance and free PROPORTIONATE I

18. Slide 18: Cash flow overview

    Cash flow overview Investment momentum driven by growth project phasing towards 2019 2018 2017 In EUR million In EUR million 687 714 640 669 47 45 266 239 430 374 127 45 348 341 17 50 CFFO Tax & other CFFO Sustaining, FCF Growth Other Free Cash CFFO Tax & other CFFO Sustaining, FCF Growth Other Free

19. Slide 19: Overview financial framework

    Overview financial framework Performance delivery and managing value  Clear financial framework to support strategy  Balanced portfolio management with focus on strong operational cash flow generation with a disciplined capital investment approach  Aimed towards a strong investment case • Return

20. Slide 20: Financial framework

    Financial framework Focus on cash flow generation to create shareholder value Cash Flow From Operations (CFFO) Consolidated terminals: EBITDA -/- tax + asset disposals Joint ventures: dividends received + shareholder loans repaid Cash Flow From Investments (CFFI) Consolidated terminals: sustaining +

21. Slide 21: Well-balanced global portfolio

    Well-balanced global portfolio Strong resilient cash flow generation Industrial LNG, LPG & Chemical Oil terminals chemical gases terminals terminals Typical contract 5-20 years 10-20 years 0-5 years 0-5 years duration per product / terminal category Share of 20-25% ~10% 25-30% ~40% proportionate rev

22. Slide 22: EUR 1 billion growth investments

    EUR 1 billion growth investments Shift towards industrial terminals, chemical and gas terminals Vlissingen Deer Park German LNG 9,200 cbm RIPET Vietnam 138,000 cbm* Open season completed Botlek 96,000 cbm Veracruz ETPL 20,000 cbm 63,000 cbm PT2SB 110,000 cbm 151,000 cbm* Panama Sebarok Richards Bay

23. Slide 23: Project timelines

    Project timelines Vopak’s Capacity Country Terminal ownership Products (cbm) 2013 2014 2015 2016 2017 2018 2019 2020 Growth projects per 5 November 2018 Existing terminals Malaysia Pengerang Independent 44.1% Oil products 430,000 Terminals (PITSB) Brazil Alemoa 100% Chemicals 106,000 Singapore Sebar

24. Slide 24: Global fuel oil network

    Global fuel oil network EUR 40 million investments to be fully ready to support new market requirements in 2020 Hamburg Rotterdam Agreement on sale Fuel Oil capacity Conversion Estonia ~35% Los Angeles Divested ~15% Algeciras Singapore Panama Agreement on sale ~55% MGO Expansion ~65% VLFSO Fujairah

25. Slide 25: Cash flow from investments

    Cash flow from investments Balanced approach for growth, sustaining, service improvement and IT investments Investments 2008-2019 Investments 2017-2019 Investments In EUR million In EUR million 2,012  Growth investments with clear New 1,899 projects* return criteria based on future 1,729 cash flow

26. Slide 26: Maintain a return on capital

    Maintain a return on capital Expected ROCE between 10% and 15% Capital employed Return on capital employed In EUR billion In percent 12.6% 12.0% 11.6% 10-15% 4.1 4.3 4.0 2017 2018 Q1 2020 2021 2017 2018 Q1 2019 2020 2021 2019  Disciplined capital for sustaining, service improvement and IT capex  V

27. Slide 27: Priorities for cash

    Priorities for cash Balanced approach between allocating capital to growth opportunities, an efficient and robust capital structure and distributions to shareholders 1 Debt servicing EUR 1.6 billion, remaining maturity ~7 years, average interest 4.1% 2 Growth opportunities Value accretive growth Sha

28. Slide 28: Capital structure

    Capital structure Financial flexibility to support growth Ordinary shares Private placement Syndicated Revolving Equity(-like) program Credit Facility Listed on Euronext USD 1.55 billion EUR 1.0 billion Subordinated loans: Market capitalization: JPY 20 billion 15 participating banks USD 75 million E

29. Slide 29: Financial flexibility

    Financial flexibility The solid operational cash flow generation, strong balance sheet and sufficient financial flexibility, provides an excellent platform to continue our capital disciplined growth journey Equity and net liabilities Senior net debt* : EBITDA ratio In percent Equity Net liabilities

30. Slide 30: Debt repayment schedule

    Debt repayment schedule Debt repayment schedule In EUR million 1,300 RCF flexibility 1,200 RCF drawn Other 600 Subordinated loans 500 Asian PP US PP 400 300 200 100 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2040 As per 17 April 2019 Q1 2019 Roadshow Presentation 30

31. Slide 31: Increase in dividend to EUR 1.10 per share

    Increase in dividend to EUR 1.10 per share Continued rising cash dividends Dividend and EPS* Dividend policy: In EUR 2.55 2.56 2.31 2.25 2.27 Annual stable to rising cash dividend in balance with a management view on a payout ratio of 25-75% of net profit and subject to market 1.05 1.05 1.10 1.00 ci

32. Slide 32: IFRS 16 Leases

    IFRS 16 Leases IFRS 16 Leases Impact Vopak  No commercial impact Key figures In EUR million EBITDA 40 – 50  Accounting change only, no net cash impact Net profit 0 – (10)  No economic impact on the business and how we IFRS 16 Lease liabilities ~675 manage it reported on Return on Capital Employed

33. Slide 33: Appendix

    Storing vital products with care Q1 2019 Roadshow Presentation Appendix

34. Slide 34: Europe & Africa developments

    Europe & Africa developments Storage capacity Occupancy rate* Revenues* In million cbm In percent In EUR million Total Q1 2019 86 83 86 85 82 158.9 155.8 158.2 2.3 153.2 153.8 13.7 million cbm Subsidiaries 11.4 Joint ventures & associates Operatorship Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2018 2018 2018 201

35. Slide 35: Asia & Middle East developments

    Asia & Middle East developments Storage capacity Occupancy rate* Revenues* In million cbm In percent In EUR million Total Q1 2019 89 92 80.2 84.5 3.3 86 85 85 76.4 77.2 79.1 4.2 14.9 million cbm Subsidiaries Joint ventures & associates 7.4 Operatorship Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2018 2018 2018 20

36. Slide 36: China & North Asia developments

    China & North Asia developments Storage capacity Occupancy rate* Revenues* In million cbm In percent In EUR million Total Q1 2019 79 83 0.8 77 73 73 4.2 million cbm 10.5 8.4 8.6 7.9 8.3 Subsidiaries 3.4 Joint ventures & associates Operatorship Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2018 2018 2018 2018 2019 2

37. Slide 37: Americas developments

    Americas developments Storage capacity Occupancy rate* Revenues* In million cbm In percent In EUR million Total Q1 2019 90 90 89 89 89 75.6 0.1 0.5 4.0 million cbm 71.5 70.3 71.1 68.4 Subsidiaries 3.4 Joint ventures & associates Operatorship Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2018 2018 2018 2018 2019 201

38. Slide 38: JVs & associates developments

    JVs & associates developments Net result JVs and associates Europe & Africa Asia & Middle East In EUR million** In EUR million** In EUR million** 40.3 36.6 19.8 25.4 25.0 26.9 0.9 9.6 10.7 0.6 0.7 0.6 7.7 6.6 0.5 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2018 2018 2018 2018 2019* 2018 2018 2018 2

39. Slide 39: Key developments

    Key developments Occupancy rate* EBITDA development** In percent In EUR million 88 92 93 90 86 763 812 822 763 734 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Cash flow from operating activities (gross) Dividend In EUR million In EUR per ordinary share 867 1.05 1.05 1.10 787 783 1.00 714 687 0

40. Slide 40: Occupancy rate developments

    Occupancy rate developments Occupancy rate of 86% (Q1 2019) explained by lower rented capacity at the oil hub terminals caused by a less favorable oil market structure. Other product-market segments showed stable demand for storage services Occupancy rate* In percent FY 86% 90-95% 85-90% 87 85 86 85

41. Slide 41: EBITDA to Net profit overview

    EBITDA to Net profit overview Increase in Earning per Share 2018 2017 In EUR million* In EUR million* EBITDA 734.3 763.2 Depreciation and amortization 271.0 272.8 EBIT 463.3 490.4 Net finance costs 82.4 98.5 Income tax 55.4 64.7 Non-controlling interests 36.0 39.8 Net profit to holders 289.5 287.4 o

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