Royal Vopak Nv · EURONEXT:VPK
Royal Vopak Nv — Non-Deal Roadshow (2014)
79 slides from Royal Vopak Nv's roadshow presentation, 2014
Slide 1: HY1 2014 Roadshow Presentation: The world of Vopak
HY1 2014 ROADSHOW PRESENTATION ROADSHOW PRESENTATION The world The world of Vopak of Vopak
Slide 2: Forward-looking Statements
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Forward-looking Statements This presentation contains ‘forward-looking statements’, based on currently available plans and forecasts. By their nature, forward-looking statements invol
Slide 3: General Introduction
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead General Introduction 3
Slide 4: Vopak and storage since 1616
General Business Strategy and Business Selective Looking introduction environment execution performance 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 of Univar tank
Slide 5: The world of Vopak
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead The world of Vopak Terminal Terminal(s) hub locations 5 Roadshow presentation HY1 2014
Slide 6: Key figures HY1 2014
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead key figures HY1 2014 Total Revenues in € mln Number of employees Total storage capacity Number of terminals 31 December 2013 In mln cbm 647.2Compared to HY1 2013 6.174 30 Jun 2014 32.
Slide 7: Vopak's role in the supply chain
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Vopak’s role in the supply chain Focus on global hubs, major deficit markets, gas markets and industrial and chemical terminals Feedstock Feedstock Independent Product Production Prod
Slide 8: Requirement for independent storage
General Business Strategy and Business Selective Looking introduction environment execution performance 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 Independent storage capi
Slide 9: Vopak business model
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Vopak business model Products Clients Crude oil International oil/chemical companies Oil products National oil/chemical companies Liquid and gaseous chemicals Governments Vegetable oi
Slide 10: Strategic logistic functions of tank terminals
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Strategic logistic functions of tank terminals Three types of terminals Hub Import/Export Industrial Automotive Electronics Construction Hub Terminal Import/Export Terminal Industrial
Slide 11: Vopak's business model
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Vopak’s business model Blending nitrogen Adding / cooling Heating / unloading of ships / railcars / trucks Loading Excess througput fees Monthly invoicing in arrears Services Fixed re
Slide 12: Original contract duration
General Business Strategy and Business Selective Looking introduction environment execution performance 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 percent of reve
Slide 13: Business environment
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Business environment 13
Slide 14: Vopak competitive environment
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Vopak competitive environment Non-captive marine tank storage for liquid oil and chemical products Primary competition Secondary competition Captive storage* Independent competition r
Slide 15: Vopak: Global market leader
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Vopak: Global market leader In both oil and chemicals storage Storage Capacity as per 30 June 2014 In million cbm Vopak Vopak Oiltanking Kindermorgan Buckeye Nustar Magellan VTTI CLH
Slide 16: Market share according to definition
General Business Strategy and Business Selective Looking introduction environment execution performance 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 131.2 35.6 166.8
Slide 17: Mega trends that drive storage demand
General Business Strategy and Business Selective Looking introduction environment execution performance 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); World bank (2
Slide 18: Key global features as driver for change
General Business Strategy and Business Selective Looking introduction environment execution performance 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 the globalizati
Slide 19: Product developments in HY1 2014
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Product developments in HY1 2014 Stable business and focus on executing actions business review Oil products Biofuels & vegoils Chemical products LNG Oil market shows slight Biofuels
Slide 20: Questions arising on the business
General Business Strategy and Business Selective Looking introduction environment execution performance 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 refining & petroch
Slide 21: Strategy and execution
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Strategy and execution 21
Slide 22: Overall strategy
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Overall strategy Aligning the execution of the strategy Growth Leadership Operational Excellence Customer Leadership • Vopak will sharpen its focus on increasing cash flow generation
Slide 23: Business review
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Business review Value creation options in terminal portfolio and execution Overall Strategy Terminal Portfolio Criteria Execution of its business Financial update 23 Roadshow presenta
Slide 24: 3 pillar strategy remains
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead 3 pillar strategy remains Shift of focus to create more value from core assets & core competencies Terminal Portfolio Business Operations Organization Strategic Growth Know-how capita
Slide 25: Terminal portfolio criteria: alignment of network
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Terminal portfolio criteria Alignment of Vopak’s terminal network Acquired Haiteng * Commissioned Divestment Banyan rock cavern Brownfield under construction Canterm Penjuru (phase 2)
Slide 26: Storage capacity developments
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Storage capacity developments Split by brownfield, greenfield, acquisition and realized divestments Storage capacity developments In million cbm; commissioned and under development +6
Slide 27: Execution of its business
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Execution of its business Benefit from increased understanding and know-how Sustaining & improvement Professionalization Standards and capex approach organization procedures • Vopak a
Slide 28: Execution of its business
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Execution of its business Operational excellence is core to Vopak´s customer service offering Safety Efficiency Service improvement Ambition is to be as good as Continuous focus on co
Slide 29: Sustainability: The core of every decision
General Business Strategy and Business Selective Looking introduction environment execution performance 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 and water Be a re
Slide 30: Safety
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Safety Relentless focus on improving performance Total injury rate (TIR) Lost time injury rate (LTIR) Total injuries per 200,000 hours worked by own Total injuries leading to lost tim
Slide 31: Cost efficiency
General Business Strategy and Business Selective Looking introduction environment execution performance 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 focus on cost 80 m
Slide 32: Service improvements
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Service improvements We continue to invest in infrastructure creating value to our customers Infrastructure Processes Improved flexibility New service KPI’s Improved flexibility in pr
Slide 33: Storage capacity under construction
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Storage capacity under construction 1. Only acting as operator; Vopak has a 10% interest in a joint service company. 2. As result of participation by a third party in the project, Vop
Slide 34: Storage capacity under construction
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Storage capacity under construction 3. Only acting as operator; Vopak Terminals Singapore (in which Vopak holds 69.5%) has a 45% interest in a joint service company. 34 Roadshow prese
Slide 35: Serving markets from a product perspective
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Serving markets from a product perspective Alignment of network along defined terminial portfolio criteria Product strategy Understand basic technology Understand imbalances Understan
Slide 36: Vopak's commercial organization
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Vopak’s commercial organization Global Regional Local Global sales & marketing Division Operating company Global Network Account Business developers Commercial manager Directors Comme
Slide 37: Global, regional and local clients
General Business Strategy and Business Selective Looking introduction environment execution performance 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 Vopak Active in mor
Slide 38: Business performance HY1 2014
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Business performance HY1 2014 38
Slide 39: Results HY1 2014
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Results HY1 2014 Stable business and focus on executing actions business review Storage capacity* Occupancy rate** EBITDA*** Cash flow**** Storage capacity grew to The occupancy rate
Slide 40: Topics influencing results HY1 2014
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Topics influencing results HY1 2014 Capacity Currency effects Regulations expansions 40 Roadshow presentation HY1 2014
Slide 41: Occupancy rate developments
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Occupancy rate developments Q2 in line with Q1 and 2013 Occupancy rate In percent Full potential playing field 90-95% Current playing field 85-90% 94 96 95 94 92 93 93 91 93 91 88 90
Slide 42: EBIT(DA) margin development
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead EBIT(DA) margin development Selective growth strategy requires strong focus on margins EBIT(DA) margin In percent 50 EBITDA margin 45 40 35 30 25 EBIT margin 20 15 10 Terminal portfol
Slide 43: Vopak's selective growth opportunities
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Vopak’s selective growth opportunities Strategic update: “shaping well-diversified network according to portfolio criteria” Storage capacity In million cbm +6.3 38.4 +12.2 36.7 37.4 3
Slide 44: HY1 2014 results
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead HY1 2014 results 44
Slide 45: Financial performance HY1 2014
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Financial performance HY1 2014 Revenue impacted by FX, EBITDA impacted by FX and non-recurring items Revenues Revenues (adj. for FX) In EUR million In EUR million 0% 0% +3% 648.1 648.
Slide 46: EBITDA development
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead EBITDA development Q2 2014 lower than Q2 2013, higher than Q1 2014 EBITDA development In EUR million HY1 2013: 385 HY2 2013: 368 HY1 2014: 367 196 196 193 192 187 189 185 187 183 180
Slide 47: Organic EBITDA growth analysis
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Organic EBITDA growth analysis Going forward: “create more value from core assets and core capabilities” 384.5 5.6 4.8 370.1 14.4 1.2 0.3 366.5 12.2 0.6 0.3 HY1 2013 HY1 2014 against
Slide 48: EBITDA per division
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead EBITDA per division Organic growth Netherlands and Asia offset by FX and EMEA Netherlands EMEA EBITDA* -8% +4% 380.1 384.5 366.5 129.5 -1% -17% 119.4 123.7 69.0 68.4 57.0 HY1 2012 HY1
Slide 49: Occupancy rate per division
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Occupancy rate Segmentation per division Netherlands EMEA -6pp +3pp 1pp -8pp Occupancy rate 90% 84% 87% 88% 89% 81% -3pp 0pp 91% 88% 88% HY1 2012 HY1 2013 HY1 2014 HY1 2012 HY1 2013 H
Slide 50: Net result of joint ventures
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Net result of joint ventures Vopak E.O.S. impacted by difficult market circumstances Netherlands EMEA Joint venture divestments Net result of -23% Mejillones Terminal, Chile 19 Decemb
Slide 51: EBIT
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead EBIT HY1 2013 HY1 2014 Delta In EUR million In EUR million In EUR million Group operating profit 211.0 193.6 - 17.4 Net result joint ventures 67.8 42.4 - 25.4 incl. exceptional items
Slide 52: Cash flow
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Cash flow Strategic update: “sharpen focus on increasing free cash flow generation” Cash flow from operating activities (gross) In EUR million 713 659 496 352 451 455 387 367 335 286
Slide 53: Financial ratios HY1 2014
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Financial ratio’s HY1 2014 Going forward: “focus on increasing cash flow return and improving capital efficiency” ROCE* ROE** In % In % 20.8% 19.5% 18.5% 17.3% 15.2% 14.6% HY1 2012 HY
Slide 54: Non-IFRS proportionate financial information
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Non-IFRS proportionate financial information Proportionate EBITDA In EUR million 836 817 617 660 537 403 396 -4% 414 2009 2010 2011 2012 2013 HY1 2014 Cash Flow Return on Gross Assets
Slide 55: FX translation effects
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead FX translation effects Adverse translation effects of EUR 14.4 million in HY1 2014 HY1 2014 EBITDA transactional currencies FX translation-effect on HY1 2013 EBITDA In percent In EUR
Slide 56: Netherlands
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Netherlands EBITDA* In EUR million 63.3 66.2 69.6 68.2 59.8 61.3 62.0 60.9 62.8 59.5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 Occupancy rate** S
Slide 57: EMEA
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead EMEA EBITDA* In EUR million 32.3 36.7 31.8 31.5 34.7 33.6 33.1 34.2 28.9 28.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 Occupancy rate** Storage
Slide 58: Asia
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Asia EBITDA* In EUR million 67.3 67.3 71.0 67.5 70.7 73.2 70.6 68.0 66.4 70.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 Occupancy rate** Storage
Slide 59: Americas
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Americas EBITDA* In EUR million 27.3 24.4 24.9 25.6 24.0 28.0 23.3 25.9 22.1 21.2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 Occupancy rate** Stor
Slide 60: Selective growth
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Selective growth 60
Slide 61: Capital disciplined consideration
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Capital disciplined consideration Balanced global terminal network management Investment and Risk-return profile Balanced dividend Flexible long-term policy funding 61 Roadshow presen
Slide 62: Return requirements for investment
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Return requirements for investment Important elements to consider Footprint in Optimization growth emerging markets opportunities First-mover Option advantage I II value Contribution
Slide 63: Risk-return profile per type of investment
General Business Strategy and Business Selective Looking introduction environment execution performance 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 Greenfield Growt
Slide 64: Terminal portfolio criteria
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Terminal portfolio criteria Updated criteria for alignment of our network Hub terminals Gasses Distribution terminals Industrial terminals Vopak project management FID Scenario Identi
Slide 65: Capital disciplined consideration: stable solvency ratio
General Business Strategy and Business Selective Looking introduction environment execution performance 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% 1,997 55% 1,70
Slide 66: Selective capital disciplined growth
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Selective capital disciplined growth Reduce other capex program to approx. EUR 700 million until 2016 Total investments 2008-2016 Expansion capex** In EUR million In EUR million; 100%
Slide 67: Vopak capital disciplined growth strategy
General Business Strategy and Business Selective Looking introduction environment execution performance 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 counterparty to Relat
Slide 68: Selective capital disciplined growth
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Selective capital disciplined growth Senior net debt : EBITDA ratio Maximum ratio under other PP programs and syndicated 5 revolving credit facility Maximum ratio under 4 3.75 current
Slide 69: Vopak's capital structure
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Vopak’s capital structure Approval to repurchase and cancel preference shares Ordinary shares* Private placement Syndicated revolving Equity(-like) Programs* credit facility* Listed o
Slide 70: Balanced debt repayment schedule
General Business Strategy and Business Selective Looking introduction environment execution performance 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 Subordinated US PP
Slide 71: Net finance costs aligned with growth
General Business Strategy and Business Selective Looking introduction environment execution performance 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 Interest and dividend
Slide 72: 2013 dividend
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead 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 exceptional 1.62 circumstance
Slide 73: Looking ahead
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Looking ahead 73
Slide 74: Outlook assumptions
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Outlook assumptions Vopak has updated its terminal portfolio criteria ~x% Share of EBITDA* Industrial terminals Biofuels & Oil products Chemicals & other pipeline LNG connected infra
Slide 75: Outlook
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Outlook Focus on cash flow return and EPS Vopak expects, basis of current market insights, to realize an EBITDA -excluding exceptional items- exceeding the 2012 results of EUR 768 mil
Slide 76: Outlook 2014 and financial update 2016
General Business Strategy and Business Selective Looking introduction environment execution performance growth ahead Outlook 2014 and financial update 2016 Alignment network and competitive position Growth strategy Full potential excellence “Vopak expects, Focus on the basis of divestments current m
Slide 77: We have built trust and reliability
General Business Strategy and Business Selective Looking introduction environment execution performance growth “We have built ahead our company over 400 years on trust and reliability.” • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Slide 78: Cash flow
Cash flow We will sharpen our focus on capital efficiency and cash flow return Consolidated statement of cash flows In EUR million 3 43 28 367 343 127 115 2 171 142 Net cash Cash Interest / Finance Income Investing Finance Dividend Other incl. tax Net cash position flow from dividend costs paid tax
Slide 79: 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 79 Roadshow presentation HY1 2014