Royal Vopak Nv · EURONEXT:VPK

Royal Vopak Nv — Non-Deal Roadshow (February 2020)

45 slides from Royal Vopak Nv's roadshow presentation, Feb 17, 2020

  1. Slide 1: Storing vital products with care

    Storing vital products with care Q4 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: Full year 2019 key messages

    Full year 2019 key messages  Strong EBITDA and significant increase in earnings per share  Execution of our strategy with portfolio transformation and growing new digital capabilities  Continued growth investments for 2020 and EUR 100 million share buyback program  Portfolio well-positioned for

  4. Slide 4: External developments

    External developments 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 potential i

  5. Slide 5: Business environment update

    Business environment update Long-term sustainable portfolio, well positioned for future opportunities Chemicals Focus on operational performance Oil products IMO 2020 capacity delivered  Long-term growth in global  Oil hubs: short-term weakness from demand for chemicals backwardated markets struct

  6. Slide 6: Vopak at a glance

    Vopak at a glance At year-end 2019 Number of terminals Number of countries Storage capacity* In million cbm 66 23 34.0 37.0 34.4 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 6.2 5,559 0.34 0,3

  7. Slide 7: Robust Vopak strategy

    Robust Vopak strategy Leadership in 5 pillars with clear strategy execution Q4 2019 Roadshow Presentation 7

  8. Slide 8: Strategic terminal types

    Strategic terminal types Industrial terminals Gas terminals Chemical terminals Oil terminals As petrochemical clusters are becoming Vopak is expanding its gas storage – in Demand for chemicals storage is growing. Oil import, distribution and hub terminals larger and more complex, logistics response

  9. Slide 9: Portfolio transformation

    Portfolio transformation Shift towards industrial terminals, chemicals and gas terminals Key projects 2019 Proportionate revenue per product ~10% ~10% 10-15% Gas • SPEC LNG - Colombia ~15% 20-25% 25-30% Gas • ETPL LNG - Pakistan Industrial terminals 35-40% • RIPET LPG - Canada 25-30% 25-30% Chemical

  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 1.0 0.5 0.34 0.0 2010 2011 2012 2013 2014 2015 201

  12. Slide 12: UN Sustainable Development Goals (SDGs)

    UN Sustainable Development Goals (SDGs) We embrace the selected SDGs to create a focus on where we can contribute to society Description Ambitions / targets We facilitate the energy transition by creating reliable access to • Reducing our environmental footprint (daily) energy and cleaner fuels and

  13. Slide 13: Benchmark scores

    Benchmark scores Ratings based on Environmental, Social and Governance MSCI ESG Ratings Dow Jones Sustainability  Rating: AAA (Scale: CCC to AAA)  Rating: 56 (Scale: 0 to 100 / industry average: 38) FTSE4Good ISS  Rating: 3.7 (scale: 0 to 5)  Rating (scale: 10 high risk to 1 low risk)  Governan

  14. Slide 14: 2017-2019 strategy delivered

    2017-2019 strategy delivered Transformative portfolio changes and digital strategy is being rolled out  EUR 1 billion growth investment program in line with Capture growth long-term market developments Spend EUR 750 million on sustaining and  Sustaining and service improvement capex programs servi

  15. Slide 15: Q4 2019 Summary financial performance

    Q4 2019 Summary financial performance  EBITDA of EUR 830 million reflect good aggregate business performance including new asset performance and positive IFRS 16 effects  Earnings Per Share (EPS) significantly increased to EUR 2.80  Cost savings program is delivered – 2019 cost base is EUR 633 mi

  16. Slide 16: 2019 vs 2018 EBITDA

    2019 vs 2018 EBITDA Pro forma EBITDA increased reflected good aggregate business performance including new asset performance 829.8 5.2 45.0 7.9 784.8 5.8 22.5 5.6 734.3 733.8 26.8 14.4 14.9 2018 FX-effect Divested Adjusted Asia & Americas China & LNG Europe & Global pro forma IFRS 16 2019 terminals

  17. Slide 17: Q4 2019 vs Q3 2019 EBITDA

    Q4 2019 vs Q3 2019 EBITDA Q4 reflected positive effects from settlements, good performance from IMO 2020 capacity and growth projects replacing divested EBITDA 1.2 0.9 204.8 202.4 7.2 2.2 3.0 0.1 15.7 14.1 186.6 Q3 2019 FX-effect Divested Adjusted Asia & China & Americas Europe & LNG Global Q4 2019

  18. Slide 18: Divisional segmentation

    Divisional segmentation Europe & Africa reflect divestments; Asia & Middle East and China benefit from settlements; Americas and LNG show continued robust gas and chemical markets Europe & Africa Asia & Middle East Americas 85 84 84 85 92 92 82 83 80 82 89 89 91 90 71 70.3 73.6 76.2 72.8 65.9 77.5 6

  19. Slide 19: Non-IFRS proportionate information

    Non-IFRS proportionate information EBITDA Occupancy rate Maintenance, Service In EUR million In percent & IT Capex IFRS BASED In EUR million 763 785 90 86 84 734 266 300 239 Non-IFRS proportionate information provides 2017 2018 Pro forma 2017 2018 2019 2017 2018 2019 2019 transparency in Vopak’s und

  20. Slide 20: Cash flow overview

    Cash flow overview Investment momentum driven by growth project phasing towards 2019 2019 2018 In EUR million In EUR million 710 687 647 640 561 500 63 47 300 266 390 38 347 374 18 341 21 50 CFFO* Tax & other CFFO Sustaining, FCF Divestments Growth Other Free Cash CFFO Tax & other CFFO Sustaining, F

  21. Slide 21: Occupancy rate developments

    Occupancy rate developments Occupancy rate trended upwards following contracted IMO 2020 capacity coming into operations; Adverse market conditions at oil hub terminals continued Occupancy rate* In percent 90-95% 85-90% 86 84 82 84 IMO related out-of-service capacity 2010 2011 2012 2013 2014 2015 20

  22. Slide 22: 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

  23. Slide 23: 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 +

  24. Slide 24: Well-balanced global portfolio

    Well-balanced global portfolio Strong resilient cash flow generation Industrial Gas Chemical Oil terminals terminals terminals terminals Typical contract 5-20 years 10-20 years 0-5 years 0-5 years duration per product / terminal category Share of 25-30% 10-15% 25-30% 35-40% proportionate revenues 20

  25. Slide 25: Growth investments

    Growth investments Shift towards industrial terminals, chemical and gas terminals Botlek Vietnam Vlissingen RIPET Caojing 63,000 cbm Deer Park 20,000 cbm 9,200 cbm German LNG 96,000 cbm* Qinzhou 65,000 cbm* 33,000 cbm Corpus Christi Antwerp PT2SB Open season completed Veracruz 290,000 cbm ETPL 130,0

  26. Slide 26: Project timelines

    Project timelines Vopak’s Capacity Country Terminal ownership Products (cbm) 2017 2018 2019 2020 2021 2022 Growth projects Existing terminals Malaysia Pengerang Independent Terminals (PITSB) 44.1% Oil products 215,000 Vietnam Vopak Vietnam 100% Chemicals 20,000 South Africa Durban 70% Oil products 1

  27. Slide 27: Global fuel oil network

    Global fuel oil network Good performance from contracted IMO 2020 capacity Fuel Oil capacity Rotterdam IMO contracted ~35% ~3.5m cbm 15% Los Angeles 55% Singapore ~65% Panama 30% IMO contracted Fujairah 2017 2020 Operational VLSFO IMO contracted Flexible (HSFO/VLSFO/MGO) HSFO Fuel oil hub terminal F

  28. Slide 28: Investment phasing

    Investment phasing Balanced approach for growth, sustaining, service improvement and IT investments Investments Investments In EUR million  For 2020, growth investment could amount to EUR 300-500 million New projects*  In the period 2020-2022, Vopak may invest EUR 750-850 million in sustaining and

  29. Slide 29: Maintain a return on capital

    Maintain a return on capital Expected ROCE between 10% and 15% Average capital employed Return on capital employed In EUR billion* In percent 12.6% 12.5% 12.5% 12.0% 11.6% 12.0% 10-15% 4.1 4.3 4.2 4.3 4.2 4.0 2017 2018 Q1 Q2 Q3 Q4 2020 2021 2017 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 2020 2021 2019 20

  30. Slide 30: 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 1.9 billion, remaining average maturity ~6 years, average interest 3.75% 2 Growth opportunities Value accretive g

  31. Slide 31: Capital structure

    Capital structure Financial flexibility to support growth Ordinary shares Private placement Syndicated Revolving program Credit Facility Listed on Euronext EUR 1.5 billion equivalent EUR 1.0 billion Market capitalization: Mainly USD and also JPY, 15 participating banks EUR ~6.2 billion GBP, CAD & EU

  32. Slide 32: 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

  33. Slide 33: Debt repayment schedule

    Debt repayment schedule Debt repayment schedule In EUR million 1,400 RCF flexibility 1,200 RCF drawn Other (incl. short-term money markets) 1,000 Subordinated loans 800 Asian PP US PP 600 400 200 0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2040 As per 31 December 2019 Q4 2019 Roadshow Presen

  34. Slide 34: Increase in dividend to EUR 1.15 per share

    Increase in dividend to EUR 1.15 per share Continued rising cash dividends Dividend and EPS* Dividend policy: In EUR 2.80 2.55 2.56 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 1.10 1.15 1.00 1.05 1.

  35. Slide 35: Looking ahead

    Looking ahead  We aim to grow EBITDA over time with new contributions from growth projects and IMO 2020 converted capacity and replace the EBITDA from divested terminals, subject to general market conditions.  In the period 2020-2022, Vopak may invest EUR 750 million to EUR 850 million in sustaini

  36. Slide 36: Appendix

    Storing vital products with care Q4 2019 Roadshow Presentation Appendix

  37. Slide 37: Europe & Africa developments

    Europe & Africa developments Storage capacity Occupancy rate* Revenues* In million cbm In percent In EUR million 1.3 Total Q4 2019 85 82 83 84 84 158.2 153.8 151.9 152.7 10.8 million cbm 131.9 Subsidiaries 9.5 Joint ventures & associates Operatorships Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2018 2019 2019 201

  38. Slide 38: Asia & Middle East developments

    Asia & Middle East developments Storage capacity Occupancy rate* Revenues* In million cbm In percent In EUR million Total Q4 2019 92 84.5 3.3 85 80 82 79.1 76.5 73.4 4.2 15.1 million cbm 71 70.6 Subsidiaries Joint ventures & associates 7.6 Operatorships Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2018 2019 2019 2

  39. Slide 39: China & North Asia developments

    China & North Asia developments Storage capacity Occupancy rate* Revenues* In million cbm In percent In EUR million Total Q4 2019 83 79 73 73 0.8 2.8 million cbm 64 10.5 9.8 9.7 8.3 8.9 2.0 Subsidiaries Joint ventures & associates Operatorships Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2018 2019 2019 2019 2019

  40. Slide 40: Americas developments

    Americas developments Storage capacity Occupancy rate* Revenues* In million cbm In percent In EUR million Total Q4 2019 89 89 91 92 90 81.8 77.0 79.3 0.2 0.5 4.4 million cbm 75.6 71.1 Subsidiaries 3.7 Joint ventures & associates Operatorships Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2018 2019 2019 2019 2019 20

  41. Slide 41: 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 56.5 46.8 40.3 37.7 25.3 36.6 22.9 19.8 16.0 10.7 0.7 0.6 0.6 0.6 0.4 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2018 2019 2019 2019 2019 2018 2019 2019 20

  42. Slide 42: Key developments

    Key developments Occupancy rate* EBITDA development** In percent In EUR million 92 93 90 86 812 822 830 84 763 734 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Cash flow from operating activities (gross) Dividend In EUR million In EUR per ordinary share 867 1.10 1.15 783 1.00 1.05 1.05 714 687

  43. Slide 43: EBITDA to Net profit overview

    EBITDA to Net profit overview Increase in Earning per Share 2019 (pro forma) 2018 In EUR million* In EUR million* EBITDA 784.8 734.3 Depreciation and amortization 258.4 271.0 EBIT 526.4 463.3 Net finance costs 67.1 82.4 Income tax 61.9 55.4 Non-controlling interests 33.3 36.0 Net profit to holders 3

  44. Slide 44: Shareholder engagement: say-on-pay

    Shareholder engagement: say-on-pay 2020 Executive Board and Supervisory Board policies: • No material changes have been made to the policies o Policies now include further explanation/ clarification of our current Board remuneration practices in order to meet the SRD II requirements o No change in t

  45. Slide 45: IFRS 16 Leases

    IFRS 16 Leases IFRS 16 Leases Impact Vopak  No economic impact on the business and how we Key figures* In EUR million manage it, accounting change only EBITDA 40 – 50 Net profit 0 – (10)  Sizeable portfolio of long-term land leases IFRS 16 Lease liabilities ~675 (explains more than 90% of the leas

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