Royal Vopak Nv · EURONEXT:VPK
Royal Vopak Nv — Non-Deal Roadshow (2014)
78 slides from Royal Vopak Nv's roadshow presentation, 2014
Slide 1: The world of Vopak
Q1 2014 ROADSHOW PRESENTATION The world of Vopak
Slide 2: Forward-looking Statements
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Forward-looking Statements This presentation contains ‘forward-looking statements’, based on currently available plans and forecasts. By their nature, forward-looking
Slide 3: General Introduction
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead General Introduction 3 Construction of ammonia tank at Banyan terminal (Singapore)
Slide 4: Vopak and storage since 1616
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Vopak and storage since 1616 Almost four centuries of history Vopak’s oldest Terminal (Vlaardingen) Full control Vopak continues as a Blauwhoed Van Ommeren was founded
Slide 5: The world of Vopak
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead The world of Vopak Terminal Terminal(s) hub locations 5 Roadshow presentation Q1 2014
Slide 6: Vopak key figures
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Vopak key figures Total Revenue in € million Number of employees Total storage capacity Number of terminals 31 December 2013 In million cbm 1,295.2 Compare to 2012 6.1
Slide 7: Vopak's role in the supply chain
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Vopak’s role in the supply chain Energy and Chemical supply chain Feedstock Feedstock Independent Product Production Product Independent Midstream Production Gathering
Slide 8: Requirement for independent storage
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Requirement for independent storage Rationale for our clients Non-core activity Economies of scale Flexibility Our clients focus their Economies of scale make Independ
Slide 9: Vopak business model
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Vopak business model Products Clients Crude oil International oil/chemical companies Oil products National oil/chemical companies Liquid and gaseous chemicals Governme
Slide 10: Strategic logistic functions of tank terminals
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Strategic logistic functions of tank terminals Three types of terminals Hub Import/Export Industrial Automotive Electronics Construction Hub Terminal Import/Export Ter
Slide 11: Vopak's business model
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Vopak’s business model Blending nitrogen Adding / cooling Heating / unloading of ships / railcars / trucks Loading Excess througput fees Monthly invoicing in arrears S
Slide 12: Original contract duration
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Original contract duration Robust contract portfolio with 80% contracts exceeding 1 year period Contract position 2011 Contract position 2012 Contract position 2013 In
Slide 13: Business environment
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Business environment 13 LPG tanks at Vopak terminal Vlissingen (Netherlands). Currently constructing 36,800 cbm additional capacity
Slide 14: Vopak competitive environment
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Vopak competitive environment Non-captive marine tank storage for liquid oil and chemical products Primary competition Secondary competition Captive storage* Independe
Slide 15: Vopak: Global market leader
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Vopak: Global market leader In both oil and chemicals storage Storage Capacity as per 31 December 2013 In million cbm Vopak Vopak Oiltanking Kindermorgan Buckeye Nusta
Slide 16: Market share according to definition
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Market share according to definition Oil storage market Non oil storage market* Total storage market In million cbm In million cbm In million cbm Primary competition 1
Slide 17: Mega trends that drive storage demand
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Mega trends that drive storage demand Growth scenarios projected for 2035 by different institutions Population GDP Energy demand 15-35% 70-170% 15-55% Source: UN (2013
Slide 18: Key global features as driver for change
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Key global features as driver for change On which Vopak should anticipate in the next decades A further Eastern Further Different Different energy The role of shift in
Slide 19: Product developments in 2013
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Product developments in 2013 Oil products LNG Chemical products Biofuels & vegoils The activities at hubs are LNG trade develops with Significant changes in Biofuels d
Slide 20: Questions arising on the business
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Questions arising on the business Vopak has analyzed and quantified the boundaries US oil and gas export scenarios LNG as transport fuel Shale gas in China European re
Slide 21: Strategy and growth projects
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Strategy and growth projects 21 Inside view of new ammonia tank at Banyan terminal (Singapore)
Slide 22: Vopak's strategy
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Vopak’s strategy Disciplined execution existing business and new projects Growth Leadership Operational Excellence Customer Leadership Our ability to identify and secu
Slide 23: Storage capacity developments
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Storage capacity developments Split by brownfield, greenfield, acquisition, and divestment Storage capacity developments In million cbm; commissioned and under develop
Slide 24: Further alignment of Vopak's terminal network Q1
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Further alignment of Vopak’s terminal network Q1 With markets dynamics Haiteng Announced Acquired Commissioned Penjuru Phase 2 Brownfield under construction Vlaardinge
Slide 25: Storage capacity under construction
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Storage capacity under construction 25 Roadshow presentation Q1 2014
Slide 26: Storage capacity under construction
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Storage capacity under construction 26 Roadshow presentation Q1 2014
Slide 27: Frontline execution and competitive position
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Frontline execution and competitive position Operational excellence is core to Vopak´s customer service offering Safety Cost efficiency Service improvement Ambition is
Slide 28: Maintaining and upgrading existing operations
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Maintaining and upgrading existing operations Different plans and programs Criticality review of all assets: Continuous improvement Long-term vision on full market saf
Slide 29: Roadmap Terminal Master Plan
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Roadmap Terminal Master Plan To align with future client needs Commercial vision Commercial/service req. Technical req. Terminal Market Operational req. Busine
Slide 30: Terminal Master Plan update
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Terminal Master Plan update Further improving Vopak’s top 16 largest upgrading terminals TMP per division TMP update (16 terminals) 100% = 10.4 million cbm In# Asia 12
Slide 31: Cost efficiency
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Cost efficiency We managed our cost base without compromising safety and service Group operational expenses per cbm per year Index 2004 = 100 140 120 100 Continuous fo
Slide 32: Service improvements
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Service improvements We invested in infrastructure that add value to our customers Upgrading jetty infrastructure Debottlenecking & pipeline connections We improved je
Slide 33: Serving markets from a product perspective
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Serving markets from a product perspective Product strategy Understand basic technology Understand imbalances Understand trade flow dynamics Winning clients and ports
Slide 34: Vopak's commercial organization
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Vopak’s commercial organization Global Regional Local Global sales & marketing Division Operating company Global Network Account Business developers Commercial manager
Slide 35: Global, regional and local clients
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Global, regional and local clients Each client segment represents about 1/3 of Vopak’s revenue Global clients Regional clients Local clients Attractive at multiple Vop
Slide 36: Sustainability: The core of every decision
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Sustainability The core of every decision Excellent people Safety and Health Environmental care Responsible partner Have the right people Provide a healthy Be energy a
Slide 37: Safety
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Safety We improved our process and own employee safety results Total Injury Rate The lost time injury rate (LTIR) Total injuries leading to lost time per million hours
Slide 38: Safety benchmark
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Safety benchmark To be as good as our leading customer Total Injury Rate Total injuries per million hours worked by employees per company 14.3 Sabic Shell 13.6 13.5 Vo
Slide 39: Business performance 2013
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Business performance 2013 39 Inside view of new ammonia tank at Banyan terminal (Singapore)
Slide 40: Strategic value creation
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Strategic value creation Value creation through capital disciplined growth and strong cash flow focus Alignment network and competitive position Growth strategy Full p
Slide 41: Value drivers of the financial performance
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Value drivers of the financial performance Occupancy rates and capacity expansions determine (near) future Near past Present Near future Post 2016 2010 – 2012 2013 201
Slide 42: Results in 2013
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Results in 2013 Storage capacity* Occupancy rate** EBITDA*** Storage capacity grew to The occupancy rate was 88% EBITDA amounts to 30.5 million cbm (2012: 91%) EUR 753
Slide 43: Topics influencing results 2013
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Topics influencing results 2013 Capacity Regulations Currency effects expansions and pensions 43 Roadshow presentation Q1 2014
Slide 44: Occupancy rate developments
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Occupancy rate developments Higher rate compared to Q4 2013 but lower than Q1 2013 Occupancy rate In percent 90-95% Full potential playing field Current playing field
Slide 45: EBIT(DA) margin development
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead EBIT(DA) margin development Capital disciplined growth strategy requires strong focus on margins EBIT(DA) margin In percent 70 60 EBITDA margin 50 40 30 20 EBIT margin
Slide 46: Vopak's growth strategy
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Vopak’s growth strategy New strategic alliances and expansions at existing locations Storage capacity Terminals as per Q1 2014 In million cbm In # +7.5 38.5 +11.1 34.2
Slide 47: Q1 2014 results
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Q1 2014 results 47 Lifting dome roof for Midex project at Europoort terminal (the Netherlands)
Slide 48: Q1 2014 summary
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Q1 2014 summary EBIT(DA) affected by adverse currency effects and continuous challenging market circumstances, mainly in the EMEA region EBITDA* EBIT* In EUR million I
Slide 49: Q1 2014 EBITDA
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Q1 2014 EBITDA Adverse currency effects in Asia and Americas combined with challenging market circumstances, mainly in the EMEA region Netherlands EMEA -6% +2% 63.3 60
Slide 50: Net result of joint ventures
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Net result of joint ventures Difficult business environment in Estonia Netherlands EMEA Joint venture divestments Mejillones Terminal, Chile -8% -42% 19 December 2013
Slide 51: FX translation effects
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead FX translation effects Adverse translation effects of EUR 7.6 million in Q1 2014 2013 EBITDA transactional currencies FX translation-effect on Q1 2014 EBITDA In percen
Slide 52: Occupancy rate
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Occupancy rate Asia and Americas stable, EMEA region challenging Netherlands EMEA -8pp +3pp 0pp -9pp 93% 85% 88% 89% 89% 80% Occupancy rate -4pp -1pp 93% 89% 88% Q1 20
Slide 53: Netherlands
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Netherlands Challenges remain EBITDA* In EUR million 63.3 66.2 69.6 68.2 59.8 61.3 62.0 60.9 59.5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2012 2012 2012 2013 2013 2013 2013 20
Slide 54: EMEA
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead EMEA Challenging business circumstances EBITDA* In EUR million 32.3 36.7 31.8 31.5 34.7 33.6 33.1 34.2 28.9 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2012 2012 2012 2013 2013 20
Slide 55: Asia
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Asia Steady performance offset by adverse currency effects EBITDA* In EUR million 67.3 67.3 71.0 67.5 70.7 73.2 70.6 68.0 66.4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2012 201
Slide 56: Americas
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Americas Steady performance offset by adverse currency effects EBITDA* In EUR million 27.3 24.4 24.9 25.6 24.0 28.0 23.3 22.1 21.2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2012
Slide 57: Capital disciplined growth
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Capital disciplined growth 57 The Pengerang project has 1.3 million cbm under development (Malaysia)
Slide 58: Capital disciplined consideration
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Capital disciplined consideration Balanced global terminal network management Investment and Risk-return profile Balanced dividend Flexible long-term policy funding 58
Slide 59: Return requirements for investment
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Return requirements for investment Important elements to consider Footprint in Optimization growth emerging markets opportunities First-mover Option advantage I II val
Slide 60: Risk-return profile per type of investment
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Risk-return profile per type of investment Vopak’s capital disciplined growth: different concepts for different purposes High Growth projects with launching customers
Slide 61: Expansion projects: Vopak's project management
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Expansion projects Vopak’s project management Vopak project management FID Scenario Identifi- Selection Definition Execution Evalua- analysis cation tion Scenario Iden
Slide 62: Capital disciplined consideration
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Capital disciplined consideration Stable solvency ratio Total equity and liabilities In EUR million 4,644 4,386 4,152 3,649 Net 2,947 58% 2,585 56% 60% liabilities* 58
Slide 63: Capital disciplined growth
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Capital disciplined growth Total investments and approved expansion capex as per Q1 Total investments 2008-2016 Expansion capex** In EUR million In EUR million; 100% =
Slide 64: Vopak capital disciplined growth strategy
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Vopak capital disciplined growth strategy Supported by a solid capital structure with balanced leverage 0 Net debt : EBITDA ratio 6 Positioning Vopak as reliable count
Slide 65: Capital disciplined growth
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Capital disciplined growth Vopak retains a solid capital structure Senior net debt : EBITDA ratio Maximum ratio under other PP programs and syndicated 5 revolving cred
Slide 66: Balanced debt repayment schedule
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Balanced debt repayment schedule Average remaining maturity 9 years; average interest rate 4.5% Debt repayment schedule* In EUR million RCF flexibility US PP Other Sub
Slide 67: Vopak's capital structure
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Vopak’s capital structure Vopak continues to explore various equity-like alternatives Ordinary shares* Private placement Syndicated revolving Equity(-like) Programs* c
Slide 68: Net Finance costs aligned with growth
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Net Finance costs aligned with growth Higher net financing costs weighed on 2013 EPS Net finance costs 2012 Net finance costs 2013 In EUR million In EUR million Intere
Slide 69: Proposed 2013 dividend
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Proposed 2013 dividend EUR 0.90 per ordinary share (pay-out ratio: 37%) Dividend and EPS 2006-2013** In EUR 2.73 2.45 -10% Dividend policy: 2.08 2.16 1.92 Barring exce
Slide 70: Looking ahead
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Looking ahead 70 Manifold of Vopak Horizon Fujiarah terminal (UAE) connected to the port with new pipelines
Slide 71: EBITDA development
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead EBITDA development Looking back EBITDA development 2004-2013* In EUR million +12.5% CAGR 768 753 636 598 513 429 370 314 263 232 2004 2005 2006 2007 2008 2009 2010 201
Slide 72: Outlook assumptions
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead Outlook assumptions Overall business climate unchanged except in oil products Industrial Biofuels & Oil products Chemicals LNG terminals vegoils ~60-65% ~17.5-20% ~7.5
Slide 73: EBITDA outlook and ambition
General Business Strategy and Business Capital Looking introduction environment growth projects performance disciplined growth ahead EBITDA outlook and ambition ‘Assuming similar challenging ‘review of the performance of our business circumstances as current terminals and exploring we experienced in
Slide 74: We have built trust and reliability
General Business Strategy and Business Capital Looking introduction environment growth projects performance “We have built disciplined growth ahead our company over 400 years on trust and reliability.” • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Slide 75: EBITDA development
EBITDA development Value creation through capital disciplined growth and strong cash flow focus EBITDA development Proportionate EBITDA development In EUR million In EUR million 893 878 768 753 701 636 665 598 582 513 474 370 429 421 314 284 341 263 2005 2006 2007 2008 2009 2010 2011 2012 2013 2005*
Slide 76: Cash flow
Cash flow Capital disciplined growth results in steady increase of cash flows Cash flow from operating activities (gross) In EUR million 713 659 +8% 496 451 455 387 590 335 571 286 392 225 420 410 307 362 187 250 38 36 28 25 31 45 104 88 123 2005 2006 2007 2008 2009 2010 2011 2012 2013 Subsidiaries
Slide 77: Strong focus on cash flow
Strong focus on cash flow Operating cash flow important source for growth strategy Consolidated statement of cash flows In EUR million 533 478 180 90 713 120 533 436 169 59 171 Gross Sustaining Operational Net cash Operational Invest- Finance Dividend Other Disposals Net Cash operating capex free ca
Slide 78: Other topics
Other topics Effective tax rate* In percent 19.5 18.0 17.1 2011 2012 2013 * Excluding exceptional items. Pension cover ratio In percent +6pp 106 112 118 2011 2012 2013 78 Roadshow presentation Q1 2014