Royal Vopak Nv · EURONEXT:VPK

Royal Vopak Nv — Non-Deal Roadshow (February 2019)

41 slides from Royal Vopak Nv's roadshow presentation, Feb 26, 2019

  1. Slide 1: Storing vital products with care

    Storing vital products with care Full Year 2018 – 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 FY2018 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 FY2018 Roadshow Presentation 6

  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 FY2018 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: Summary financial performance FY2018

    Summary financial performance FY2018 strategic direction  EBITDA of EUR 734 million, adjusted for currency translation Capture growth effects, EBITDA was EUR 10 million lower than prior year Spend EUR 750m on  Resilient CFFO with investment momentum (CFFI) sustaining and service capex  In line wi

  14. Slide 14: 2018 vs 2017 EBITDA

    2018 vs 2017 EBITDA Adjusted for currency translation effects EBITDA was EUR 10 million lower than prior year 763.2 19.2 744.0 12.4 734.3 23.2 30.8 8.0 15.4 2.5 2017 FX-effect Adjusted Europe & Asia & LNG Americas China & Global 2018 2017 Africa Middle East North Asia functions, corporate activities

  15. Slide 15: Q4 2018 vs Q3 2018 EBITDA

    Q4 2018 vs Q3 2018 EBITDA Net EUR 7 million one-off cost items included in Q4 2018 182.7 0.4 183.1 6.5 5.5 180.7 7.0 5.3 5.2 3.5 Q3 2018 FX-effect Adjusted Europe & Americas LNG China & Asia & Global Q4 2018 Q3 2018 Africa North Asia Middle East functions, corporate activities and others Figures in

  16. Slide 16: 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

  17. Slide 17: Divisional segmentation

    Divisional segmentation Europe & Africa and Asia & Middle East impacted by oil hub weakness; Americas and China & North Asia benefit from strong chemical and gas markets Europe & Africa Asia & Middle East Americas 90 86 83 86 85 88 89 86 85 85 90 90 89 89 89 85.2 80.8 74.5 77.2 70.3 66.3 66.5 64.0 5

  18. Slide 18: Non-IFRS proportionate information

    Non-IFRS proportionate information Occupancy rate EBITDA Maintenance, Service In percent In EUR million & IT Capex IFRS BASED In EUR million 822 763 93 90 86 734 258 239 266 Non-IFRS proportionate information provides 2016 2017 2018 2016 2017 2018 2016 2017 2018 transparency in Vopak’s Occupancy rat

  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: Significant capacity to be delivered in 2019

    Significant capacity to be delivered in 2019 Shift towards industrial terminals and LNG, LPG and chemical gases terminals Vlissingen Deer Park German LNG 9,200 cbm RIPET Vietnam 138,000 cbm* Open season completed Botlek 96,000 cbm Mexico EETPL 20,000 cbm 63,000 cbm PT2SB 110,000 cbm 151,000 cbm* Pan

  23. Slide 23: Growth projects under development

    Growth projects under development 1 Terminal capacity available for customers. 2 In January 2019, Vopak acquired an additional 35% equity share in Vopak Terminal Ningbo (China) bringing the total share in equity to 85% and effectively obtaining control. The storage capacity of this terminal was alre

  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 Strategic review Fuel Oil capacity Conversion Estonia 10% ~35% Los Angeles Strategic review 15% 45% Algeciras Singapore 60% ~65% Panama Strategic review 45% MGO Expansion

  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 12.0% 12.3% 11.5% 11.8% 10-15% 4.1 10.8% 4.0 4.0 4.0 4.1 2017 Q1 Q2 Q3 Q4 2019 2020 2021 2017 Q1 Q2 Q3 Q4 2019 2020 2021 2018 2018 2018 2018 2018 2018 2018 2018  Disc

  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 25 February 2019 FY2018 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 No changes in economics, only changes in accounting (reporting) IFRS 16 Leases Indicative impact Vopak1  No changes in economics and cash flows only in Key figures accounting (reporting) EBITDA 40 – 50  IFRS implementation is substantially completed Net profit 0 – (10) and Vopak is

  33. Slide 33: Storing vital products with care - Appendix

    Storing vital products with care Full Year 2018 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 Q4 2018 90 86 86 85 165.8 158.9 155.8 158.2 2.3 83 153.2 13.7 million cbm Subsidiaries 11.4 Joint ventures & associates Operatorship Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2017 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 Q4 2018 88 89 86 85 85 81.8 80.2 77.2 79.1 76.4 3.3 4.2 14.1 million cbm Subsidiaries 6.6 Joint ventures & associates Operatorship Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2017 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 Q4 2018 77 79 0.7 70 73 73 4.2 million cbm 8.4 8.6 7.9 8.3 7.2 Subsidiaries 3.5 Joint ventures & associates Operatorship Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2017 2018 2018 2018 2018 20

  37. Slide 37: Americas developments

    Americas developments Storage capacity Occupancy rate* Revenues* In million cbm In percent In EUR million 0.1 0.6 Total Q4 2018 89 90 90 89 89 69.3 68.4 71.5 70.3 71.1 4.0 million cbm Subsidiaries 3.3 Joint ventures & associates Operatorship Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2017 2018 2018 2018 2018 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 36.6 26.9 12.4 23.8 25.4 25.0 9.6 10.7 7.7 6.6 0.9 0.7 0.5 0.6 -0.1 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2017 2018 2018 2018 2018 2017 2018 2018 2018

  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 787 867 1.00 1.05 1.05 1.10 783 714 0.90

  40. Slide 40: Occupancy rate developments

    Occupancy rate developments Occupancy rate of 86% (FY 2018) 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 90% FY 86% 90-95% 85-90% 91 9

  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 of

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