Royal Vopak NV · EURONEXT:VPK
Royal Vopak NV — H1 2007 Earnings Presentation
60 slides from Royal Vopak NV's earnings presentation, August 2007
Slide 1: Semi Annual Results 2007
Semi Annual Results 2007 Professionals in liquid bulk logistics www.vopak.com 1
Slide 2: Agenda
Agenda ▢Strategy & Achievements ▢Ethanol: Important Business Driver ▢Business Performance 1H 2007 ▢Outlook 2
Slide 3: Strong foundations for the future
Strong foundations for the future Global presence Excellent track record Robust financial in Safety and Global market leader performance Environment 400 years of history Solid financing Preferred partner of many Multinational Know-how Trustworthy partner Petro-chemical companies 3
Slide 4: Highlights 1H 2007
Highlights 1H 2007 EBIT 150 Net Revenues 140 130 120 450 110 100 425 400 1H 06 1H 07 375 350 1H 06 1H 07 Commissioned projects in 1H 2007 (248.100 cbm) Confirmed projects in 1H 2007 4
Slide 5: Process Safety & Quality Performance
Process Safety & Quality Performance LTIR Terminal Health Assessment 100% 6 5 75% 4 3 50% 2 25% 1 0 0% 02 03 04 05 06 1H 07 04 05 06 1H 07 Spills 120 100 80 60 40 20 0 04 05 06 1H 07 5
Slide 6: Strategic Focus Vopak
Strategic Focus Vopak Growth Leadership Customer Leadership Cost Efficient Operations Pursue and strengthen Attain service excellence leadership in key locations across the network Attain low cost position compared to key Invest in partnerships with Become preferred provider competitors strategic cu
Slide 7: Growth leadership
Pursue and strengthen GROWTH leadership leadership in key locations Invest in partnerships with strategic customers Optimising existing capacity Expansion at existing terminals Acquisitions, mergers and joint ventures New terminals at new locations Development of concepts for Growth Maintenance & SH
Slide 8: Projects' overview
Projects’ overview London Amsterdam Teesside Europoort Rotterdam Biodiesel LNG (R’dam) Zhangjiagang Botlek pit 11 Botlek pit 19 Korea Houston Vlaardingen Lanshan Antwerp Fujairah Caojing Altamira Thailand Banyan Suape Biodiesel Vietnam Banyan Venezuela Sebarok Penjuru Darwin Alemoa Sydney Announced
Slide 9: Commissioned projects 1H 2007
Commissioned projects 1H 2007 Sydney site B Ulsan Zhangjiagang Vlaardingen Lanshan 9
Slide 10: Confirmed projects 1H 2007
Confirmed projects 1H 2007 Banyan Penjuru Zhangjiagang Teesside Vietnam Alemoa Botlek pit 19 Terminal in Suape, Brazil – due diligence 10
Slide 11: Customer leadership
Attain service excellence CUSTOMER leadership across the network Become preferred provider for strategic accounts Average occupancy rates 100% 95% 90% 85% 80% 2004 2005 2006 1H 2007 Income from rendering of services (core activities) 450 “Vopak has an excellent 425 In mln EUR 400 quality and, compar
Slide 12: Operational leadership
Attain low cost position compared to key competitors OPERATIONAL leadership Develop superior ability to withstand all economic conditions Portfolio Business Rationalisation Sale Hemiksem Sale tank cleaning stations in Sweden Sale Westwego Sale Joint Venture VOTG Tanktainer GmbH 12
Slide 13: Agenda
Agenda ▢Strategy & Achievements ▢Ethanol: Important Business Driver ▢Business Performance 1H 2007 ▢Outlook 13
Slide 14: Demand for fuel ethanol
Demand for fuel ethanol High oil prices and limited reserves… Strong political backing… CO2 concerns… Production capacity… Dependency on the Middle East… New technology… Source: IEA 14
Slide 15: Fuel ethanol intercontinental trade 2007 vs 2010+
Fuel ethanol intercontinental trade 2007 vs 2010+ Major import market ? Major ? export market European imports grow rapidly. Import Brazilian exports increase. Export North America – probably balanced. Asia – importing or balanced. 15
Slide 16: Brazil: steep increase in production for national demand & export growth
Brazil: steep increase in production for national demand & export growth MILLION TONS BRAZIL Ethanol Exports Sugar Cane production 2002 320 2006 420 FC 2012 700 1.000 M³ BRAZIL Ethanol Production 2002 12,5 2006 17 FC 2012 30-35 1.000 M³ BRAZIL Ethanol Exports 2002 0,8 2006 3,4 Center South Other Bra
Slide 17: Vopak's presence in Brazil
Vopak’s presence in Brazil Aratu Suape Center North North East Ilha Barnabe Center South Alemoa Uniao/Vopak 17
Slide 18: Rotterdam – most important EU import harbour
Rotterdam – most important EU import harbour ► Fuel demand major cause for increased ethanol imports. ► Significant growth expected in coming years. ► Important driver for CEMEA occupancy & revenue. By 2010 about 4.1 mln cbm fuel ethanol to be imported through the Port of Rotterdam (Fuel) Ethanol Re
Slide 19: Ethanol: opportunity for Vopak
Ethanol: opportunity for Vopak Vopak well positioned to facilitate the storage of ethanol + future demand growth EXAMPLES: Alemoa Botlek pit 19 Teesside 19
Slide 20: Agenda
Agenda ▢Strategy & Achievements ▢Ethanol: Important Business Driver ▢Business Performance 1H 2007 ▢Outlook 20
Slide 21: Net Revenues / EBIT 1H 2007
Net Revenues / EBIT 1H 2007 | a enna age ; ; ce ae = www.vopak.com 21
Slide 22: Summary of market developments
Summary of market developments Oil: Chemicals: • Product differentiation • Increasing demand for storage • Geographical imbalances • New petrochemical complexes between demand and supply in Asia and the Middle East • Liberalisation of new markets LNG: Bio fuels: • More focus on LNG solutions • Stron
Slide 23: EBIT excl. exceptionals increased by 31%
EBIT excl. exceptionals increased by 31% In EUR millions 1H 06 1H 07 ∆% Net Revenues 382.8 423.7 11% EBIT 106.8 139.4 31% Net Profit* 55.3 82.3 49% EPS (EUR) 0.89 1.32 48% All figures are excluding exceptional items * attributable to holders of ordinary shares 23
Slide 24: EBIT incl. exceptionals increased by 45%
EBIT incl. exceptionals increased by 45% In EUR millions 1H 06 1H 07 ∆% Net Revenues 382.8 423.7 11% EBIT 103.3 149.3 45% Net Profit* 52.9 91.5 73% EPS (EUR) 0.85 1.47 73% All figures are including exceptional items * attributable to holders of ordinary shares 24
Slide 25: Exceptional items: 1H 2007
Exceptional items: 1H 2007 In EUR millions Impairment Assets Hemiksem -0.9 - CEMEA - Result Sale Tank cleaning stations in Sweden 1.4 - OEMEA - Result Sale Assets Westwego 2.8 - North America - Result Sale Joint Venture VOTG Tanktainer GmbH 6.6 - Non-core activities - Exceptional items 9.9 25
Slide 26: All divisions contributed to 11% increase in Net Revenues
All divisions contributed to 11% increase in Net Revenues North America OEMEA 78.9 95.9 65.2 66.0 Asia 67.1 1% 22% 59.3 1H 06 1H 07 1H 06 1H 07 13% 1H 06 1H 07 CEMEA 145.9 161.2 Latin America 31.2 31.3 0.3% 1H 06 1H 07 10% 1H 06 1H 07 26
Slide 27: 1H 2007: 32.5 mln increase in EBIT
1H 2007: 32.5 mln increase in EBIT* OEMEA 41.9 North America 31.7 Asia 12.1 15.5 36.9 39.0 28% 32% 1H 06 1H 07 1H 06 1H 07 6% CEMEA 44.4 1H 06 1H 07 Latin America 27.4 10.5 10.4 1% 62% Other 1H 06 1H 07 1H 06 1H 07 1H 06 1H 07 3% -11.7 -12.0 *EBIT excluding exceptional items and discontinued operati
Slide 28: Sources and Uses of Cash
Sources and Uses of Cash | www.vopak.com 28
Slide 29: Sources and Uses of Cash
Sources and Uses of Cash 1H 06 1H 07 Net Cash Flow -87.4 +56.0 EUR (mln) 450 400 350 300 Dividends Proceeds from 250 interest-bearing Proceeds from loans 200 Investments interest-bearing 150 Dividends loans 100 Divestments Divestments Investments 50 Financing Operations Operations Financing 0 Source
Slide 30: Operational Net Cash Flow
Cash Source Operational Net Cash Flow 1H 2007: increased by 69% Sources Uses EUR (mln) 100 75 96.1 50 56.8 25 0 1H 2006 69% 1H 2007 30
Slide 31: Investments
Cash Use Investments* 1H 2007: increased by 50% Sources Uses EUR (mln) 200 160 120 164.1 80 109.5 40 0 50% 1H 2006 1H 2007 * including Maintenance and SHE CAPEX 31
Slide 32: CAPEX
www.vopak.com 32
Slide 33: CAPEX 2002 – 2006 & Outlook 2007
CAPEX 2002 – 2006 & Outlook 2007** (In)Tangible fixed assets 450 - 550 232.7 160.3 124.9 97 106.5 2002* 2003* 2004 2005 2006 2007 * based on Dutch GAAP 33 **including Maintenance and SHE CAPEX
Slide 34: Expansion of Banyan Terminal
Expansion of Banyan Terminal Division: Asia Start of operations: Q3 2008 Capacity: expansion 320.000 cbm Product focus: gasoline, biofuels Vopak Singapore – Banyan Terminal 34
Slide 35: Expansion of Penjuru Terminal
Expansion of Penjuru Terminal Division: Asia Start of operations: Q3 2008 Capacity: expansion 22.000 cbm Product focus: chemical products Vopak Singapore – Penjuru Terminal 35
Slide 36: Expansion of Vietnam Terminal
Expansion of Vietnam Terminal Division: Asia Start of operations: Q1 2008 Capacity: expansion 40.000 cbm Product focus: chemical products AP Petrochemical Vietnam 36
Slide 37: Expansion of Zhangjiagang Terminal
Expansion of Zhangjiagang Terminal Division: Asia Start of operations: Q2 2008 Capacity: expansion 72.400 cbm Product focus: methanol Vopak China – Zhangjiagang Terminal 37
Slide 38: Expansion of Teesside Terminal
Expansion of Teesside Terminal Division: CEMEA Start of operations: Q3 2008 Capacity: expansion 40.000 cbm Product focus: ethanol Vopak Teesside Terminal 38
Slide 39: Net Profit
Net Profit . www.vopak.com 39
Slide 40: Net Profit 1H 2007 increased by 73%
Net Profit 1H 2007 increased by 73% In EUR millions 1H 06 1H 07 ∆% Net Revenues 382.8 423.7 11% EBIT 103.3 149.3 45% Finance Income & Expenses -23.2 -21.0 9% Effective Tax Rate -19.0 -27.6 45% Minority Interests -7.0 -8.3 19% Net Profit* 52.9 91.5 73% All figures are including exceptional items * at
Slide 41: Finance Income & Expense
Finance Income & Expense 1H 2007: 9% decrease in Financing charges In EUR millions 1H 06 1H 07 Interest Income and Expenses -20.4 -20.1 FX Differences -2.8 -0.9 Finance Income & Expenses -23.2 -21.0 41
Slide 42: Effective Tax Rate 1H 2007
Effective Tax Rate 1H 2007 Effective Tax Rate € In EUR millions 1H 07 1H 07 % 1H 06 % Tax (ex one-off) -30.6 23.8% 23.7% One-off 3.0 Effective Tax Rate -27.6 21.5% 23.7% 42
Slide 43: Strategic Finance
Strategic Finance | www.vopak.com 43
Slide 44: Strategic Finance: Sufficient Flexibility
Strategic Finance: Sufficient Flexibility Total Net Senior Debt : EBITDA ratio 1H 2007 1,83 2006 1,61 2005 1,76 2004 2,20 2003* 2,42 2002* 2,49 ׀ 0 0,5 1 1,5 2 2,5 3 3,5 3,75 4 4,25 Maximum Ratio * based on Dutch GAAP 44
Slide 45: Overview of US PP terms and RCF
Overview of US PP terms and RCF Covenant/ Term US PP 2001 US PP 2007 New RCF Maximum Net 3.75x 3.75x 3.75x Debt / EBITDA Additional headroom Up to 4.25 > 3.75 When financed with subordinated debt EBITDA / Net Interest 4.0x 3.5x 3.5x Payable Amount USD USD EUR 396 mln 375 mln 1 bln 45
Slide 46: Revolving Credit Facility
Revolving Credit Facility event after the balance sheet date 46
Slide 47: Performance Divisions
Performance Divisions DF AEE ABET ATS a ee ne Se ere T 17, www.vopak.com 47
Slide 48: Division: Chemicals EMEA
Division: Chemicals EMEA “Ongoing active response to new market developments” EBIT* (mln) 25 20 15 2006 2007 10 13,1 20,9 14,3 23,5 17,6 15,7 5 0 60% 64% Q1 Q2 Q3 Q4 * excluding exceptional items 48
Slide 49: Division: Oil EMEA
Division: Oil EMEA “Effective response to increasing market demand” EBIT* (mln) 25 20 15 2006 10 2007 16,3 21,3 15,4 20,6 17,8 13,2 5 0 31% 34% Q1 Q2 Q3 Q4 * excluding exceptional items 49
Slide 50: Division: Asia
Division: Asia “Continuing growth with good results” EBIT* (mln) 25 20 15 2006 10 2007 16,9 19,2 19,8 20,0 18,8 19,2 5 0 14% 0.1% Q1 Q2 Q3 Q4 * excluding exceptional items 50
Slide 51: Division: North America
Division: North America “Focus on improving results is bearing fruit” EBIT* (mln) 25 20 15 2006 10 2007 5 6,7 7,2 8,3 5,4 6,2 7,2 0 7% 54% Q1 Q2 Q3 Q4 * excluding exceptional items 51
Slide 52: Division: Latin America
Division: Latin America “Continuing steady performance” EBIT * (mln) 25 20 15 2006 10 2007 5 5,4 5,1 5,0 5,4 5,4 4,1 0 6% 8% Q1 Q2 Q3 Q4 * excluding exceptional items 52
Slide 53: Events after the balance sheet date
Events after the balance sheet date 53
Slide 54: Events after the balance sheet date
Events after the balance sheet date Integrating Vopak Dupeg Tank Terminal with Vopak Terminal Hamburg: Compensation for Vopak EUR 101 mln Received on August 15, 2007 EUR 27 mln To be received on January 2, 2008 EUR 59 mln To be received on January 2, 2009 EUR 15 mln 54
Slide 55: Agenda
Agenda ▢Strategy & Achievements ▢Ethanol: Important Business Driver ▢Business Performance 1H 2007 ▢Outlook 55
Slide 56: Full Focus on Growth
Full Focus on Growth Adding 2.3 mln cbm in 2007 & 2008 24 ? ? X 1,000,000 cbm 23 ? 22 Addition 21 Capacity 20 19 2005 2006 2007 2008 2009 • Successful improvement steps on road to excellence • Further growth continues worldwide • Pipeline well-filled with potential and ongoing projects 56
Slide 57: Outlook EBIT 2007
Outlook EBIT 2007 August 31, 2007 Short-term outlook Barring unforeseen circumstances and taking into account the cost of implementing strategic initiatives, Vopak expects Group operating profit excluding exceptional items to rise by about 20% in 2007 (2006: EUR 220.9 million) Unforeseen circumstanc
Slide 58: Outlook Summary
Outlook Summary Guidance Outlook 5 year plan EUR (mln) FY 2005 FY 2006 FY 2007 (2011) Long-term EBITDA* 253.5 309.8 475-550 EBIT** 179.7 220.9 about 20% higher CAPEX 160.3 232.7 450-550 ROCE 16.5% 19.4% Around 16% Bearing Bearingininmind mind substantial substantialinvestments investments iningreenf
Slide 59: Forward-looking statement
Forward-looking statement This presentation contains statements of a forward-looking nature, based on currently available plans and forecasts. Given the dynamics of the markets and the environments of the 30 countries in which Vopak renders logistics services, the company cannot guarantee the accura
Slide 60: Thank you for your attention!
Thank you for your attention! 60