Royal Vopak NV · EURONEXT:VPK

Royal Vopak NV — H1 2009 Earnings Presentation

69 slides from Royal Vopak NV's earnings presentation, Aug 28, 2009

  1. Slide 1: First half 2009 results

    _ First half 2009 results 28 August 2009 – – –

  2. Slide 2: The world of Vopak

    The world of Vopak – – – HY1 results 2009 28 August 2009 2

  3. Slide 3: Agenda

    Agenda Strategy HY1 Achievements Reliability and Efficiency Growth projects Business performance Financing Outlook Details and definitions used in this presentation are derived from the HY1 2009 press release and half year report, which are leading. – – – HY1 results 2009 28 August 2009 3

  4. Slide 4: Vopak transformation process

    Vopak transformation process "This is an infrastructure play; the company is benefitting from the outsourcing of storage by oil and chemical producers, which form the bulk of its customers. It is an under-recognized industry leader." Canadian Investor July 2002 2003 2004 2005/2006 2007/2008/2009 – –

  5. Slide 5: Drivers of structural growth in demand

    Drivers of structural growth in demand Countries setting individual specifications for products Liberalization of previously closed economies Increasing geographical imbalances Growing demand for environmentally friendlier fuels – – – HY1 results 2009 28 August 2009 5

  6. Slide 6: Accelerated Strategy Execution

    Accelerated Strategy Execution Based on Reliability and Efficiency EXCELLENT EXCELLENT CUSTOMER CUSTOMER MAXIMUM MAXIMUM OPERATIONAL OPERATIONAL SERVICE SERVICE EFFICIENCY EFFICIENCY •• Operational Operational Efficiency Efficiency Improvement Improvement •• Key Key Account Account Management Manage

  7. Slide 7: Agenda

    Agenda Strategy HY1 Achievements Reliability and Efficiency Growth projects Business performance Financing Outlook Details and definitions used in this presentation are derived from the HY1 2009 press release and half year report, which are leading. – – – HY1 results 2009 28 August 2009 7

  8. Slide 8: HY1 2009: Solid achievements

    HY1 2009: Solid achievements Added 0.8 mln cbm storage capacity Continuous focus on safety Spills TIR 70 10 7.8 50 58 5 6.7 44 30 0 HY1 2008 HY1 2009 HY1 2008 HY1 2009 And 2.8 mln cbm under construction Process safety Personal safety High occupancy rate Strong business performance EBIT In EUR mln, -

  9. Slide 9: Company growth

    Company growth 27.9 27.1 Under construction: Bahamas 21.8 20.4 21.2 20.2 +0.2 +0.8 +0.6 +5.3 +0.8 2004 2005 2006 2007 2008 HY1 2009 Storage capacity per end of period in mln cbm Expansion: Vopak E.O.S., Estonia Expansion: Banyan, Singapore Expansion: Left Bank, Belgium – – – HY1 results 2009 28 Augu

  10. Slide 10: Growth continues

    Growth continues Tallinn, Estland Gothenburg, Sweden Teesside, UK Product: Oil Product: Oil Product: Chemicals Capacity: 111,000 cbm Capacity: 54,000 cbm Capacity: 40,000 cbm In mln cbm YE 2008 Capacity 27.1 mln Total net capacity increase in HY1 2009 0.8 mln HY1 2009 YTD Capacity 27.9 mln Remaining

  11. Slide 11: Strong demand for storage capacity

    Strong demand for storage capacity Occupancy rate 2004 2005 2006 2007 2008 HY1 2009 85% 92% 94% 96% 95% 95% Capacity (in mln cbm) 20.2 20.4 21.2 21.8 27.1 27.9 – – – HY1 results 2009 28 August 2009 11

  12. Slide 12: Process Safety & Quality Performance

    Process Safety & Quality Performance TIR* Spills 8 120 100 7 80 6 60 5 40 4 20 2006 2007 2008 HY1 2009 2004 2005 2006 2007 2008 HY1 2009 * Number of accidents relative to the number of hours worked – – – HY1 results 2009 28 August 2009 12

  13. Slide 13: Ongoing improvement in financial performance

    Ongoing improvement in financial performance Net Revenues - excluding exceptionals - In EUR mln 600 400 200 0 EBIT - excluding exceptionals - HY1 HY2 HY1 HY2 HY1 HY2 HY1 HY2 HY1 HY2 HY1 In EUR mln 2004 2005 2006 2007 2008 2009 200 175 +17.5% EPS - excluding exceptionals - In EUR 150 2 125 +15% HY1 2

  14. Slide 14: Agenda

    Agenda Strategy HY1 Achievements Reliability and Efficiency Growth projects Business performance Financing Outlook Details and definitions used in this presentation are derived from the HY1 2009 press release and half year report, which are leading. – – – HY1 results 2009 28 August 2009 14

  15. Slide 15: Reliability and efficiency

    Reliability and efficiency “Crucial throughout the supply chain” The oil and chemical supply chain Vopak core processes – – – HY1 results 2009 28 August 2009 15

  16. Slide 16: Aligning maintenance with 24/7 operations

    Aligning maintenance with 24/7 operations Best practice maintenance and inspection planning ensure safe operations – – – HY1 results 2009 28 August 2009 16

  17. Slide 17: Sharing the networks' knowledge

    Sharing the networks’ knowledge Standardization: Further roll out of “The Vopak Way” – – – HY1 results 2009 28 August 2009 17

  18. Slide 18: Focus on safety awareness of employees

    Focus on safety awareness of employees Safety improvement requires constant management focus – – – HY1 results 2009 28 August 2009 18

  19. Slide 19: Improving ship and truck turn around times

    Improving ship and truck turn around times Contributing to the efficiency of customer key processes – – – HY1 results 2009 28 August 2009 19

  20. Slide 20: Best practice terminal design supports expansion

    Best practice terminal design supports expansion Greenfield Vopak Terminal Leftbank (Belgium) commissioned in 2008 and expanded with 20,000 cbm in HY1 2009 Greenfield: Left Bank, Antwerp – – – HY1 results 2009 28 August 2009 20

  21. Slide 21: Continuously improving relations with customers

    Continuously improving relations with customers Constant dialogue with customers (Key) account management Improving customer service Profound planning Digital connections Customer KPI’s Monitoring customer satisfaction – – – HY1 results 2009 28 August 2009 21

  22. Slide 22: Resulting in robust performance

    Resulting in robust performance Robust occupancy rates Strong connection with customers 100% < 1yr 75% 92% 94% 96% 95% 95% 1yr < > 3yr 85% 50% 25% > 3yr 2004 2005 2006 2007 2008 HY1 2009 0% 2007 2008 Increasing storage capacity Storage capacity per end of period in mln cbm 30.7 27.1 27.9 21.8 20.4 2

  23. Slide 23: Agenda

    Agenda Strategy HY1 Achievements Reliability and Efficiency Growth projects Business performance Financing Outlook Details and definitions used in this presentation are derived from the HY1 2009 press release and half year report, which are leading. – – – HY1 results 2009 28 August 2009 23

  24. Slide 24: Banyan and Penjuru, Singapore

    Banyan and Penjuru, Singapore Brownfield capacity additions at Banyan and Penjuru (Singapore): 417,000 cbm commissioned – – – HY1 results 2009 28 August 2009 24

  25. Slide 25: Vopak Jakarta Terminal, Indonesia

    Vopak Jakarta Terminal, Indonesia Jetty Undersea pipelines Tankterminal Division: Asia Start of operations: HY2 2009 Capacity: 250,000 cbm Product focus: oil ‘Artist impression of Vopak Jakarta Terminal’ – – – HY1 results 2009 28 August 2009 25

  26. Slide 26: Vopak Terminal Bahamas

    Vopak Terminal Bahamas 370,000 cbm under construction – – – HY1 results 2009 28 August 2009 26

  27. Slide 27: Gate terminal progressing well

    Gate terminal progressing well All 3 roofs air lifted Launching customers: Division: LNG Start operations: HY2 2011 Capacity: 540,000 cbm Product: LNG – – – HY1 results 2009 28 August 2009 27

  28. Slide 28: Amsterdam Westpoort (Phase1)

    Amsterdam Westpoort (Phase1) • Phase 1: 620,000 cbm, potential total storage capacity of 1.1 mln cbm • 20 above-ground storage tanks, 11 x 40,000 cbm & 9 x 20,000 cbm • A facility for blending (mixing) products and components • Seven berths at two finger piers and a quay wall Artist impression of th

  29. Slide 29: Newly announced projects add another 622,000 cbm

    Newly announced projects add another 622,000 cbm New announcements bring the total storage capacity under construction to 2.8 mln cbm MOT, Rotterdam (Netherlands) Vopak increase in entitlement Zhangjigang with 360,000 cbm (China) additional 102,000 cbm Europoort, Rotterdam (NL) phase 8: 160,000 cbm

  30. Slide 30: The growth of Vopak: Projects in progress

    The growth of Vopak: Projects in progress – – – HY1 results 2009 28 August 2009 30

  31. Slide 31: Confidence in the future!

    “Confidence in the future!” – – – HY1 results 2009 28 August 2009 31

  32. Slide 32: Agenda

    Agenda Strategy HY1 Achievements Reliability and Efficiency Growth projects Business performance Financing Outlook Details and definitions used in this presentation are derived from the HY1 2009 press release and half year report, which are leading. – – – HY1 results 2009 28 August 2009 32

  33. Slide 33: HY1 2009: Robust demand for storage services

    HY1 2009: Robust demand for storage services STABLE STABLE CUSTOMER CUSTOMER FOCUSED FOCUSED OCCUPANCY OCCUPANCY RATES RATES GROWTH GROWTH Storage capacity per end of period in mln cbm 27.9 27.1 92% 94% 96% 95% 95% 21.8 85% 20.2 20.4 21.2 +0.2 +0.8 +0.6 +5.3 +0.8 2004 2005 2006 2007 2008 HY1 2009 20

  34. Slide 34: HY1 2009 EBIT excl. exceptional items: up 17.5% to EUR 184.2 mln

    HY1 2009 EBIT excl. exceptional items: up 17.5% to EUR 184.2 mln Net Revenues EBIT In EUR mln In EUR mln 184.2 156.8 453.9 492.1 +17.5% HY1 08 +8% HY1 09 HY1 08 HY1 09 Net Profit Earnings per share In EUR mln In EUR 114.9 1.83 98.9 1.59 +16% +15% HY1 08 HY1 09 HY1 08 HY1 09 – – – All HY1 figures exc

  35. Slide 35: Revenue developments supported by robust demand for storage capacity

    Revenue developments supported by robust demand for storage capacity Storage Capacity In mln cbm 30.7 27.1 27.9 21.8 20.2 20.4 21.2 +0.2 +0.8 +0.6 +5.3 +0.8 +2.8 2004 2005 2006 2007 2008 HY1 2009 2011 Occupancy Rate 85% 92% 94% 96% 95% 95% – – – HY1 results 2009 28 August 2009 35

  36. Slide 36: Adjusted for divestments, all divisions contribute to the revenue growth

    Adjusted for divestments, all divisions contribute to the revenue growth In EUR mln North America OEMEA Asia 126.0 132.8 100.2 56.0 68.1 77.6 HY1 08 22% HY1 09 HY1 08 5% HY1 09 HY1 08 29% HY1 09 Latin America CEMEA 152.0 Adjustment for divestments: 159.5 -/- EUR 13.8 mln 33.4 37.4 HY1 08 12% HY1 09

  37. Slide 37: EBIT excluding exceptional items increased by 17.5%

    EBIT - excluding exceptional items - increased by 17.5% In EUR mln HY1 2009 HY1 2008 % Operating profit 155.7 145.2 10 Net result JV & Associates 28.6 21.3 34 Exceptional gain -0.1 -9.7 EBIT excl. exceptional items 184.2 156.8 17.5 – – – HY1 results 2009 28 August 2009 37

  38. Slide 38: Except for CEMEA, all divisions contribute to the EBIT increase

    Except for CEMEA, all divisions contribute to the EBIT increase of 17,5% In EUR mln, - excl. exceptional items - North America OEMEA Asia 51.1 65.1 46.3 64.5 16.8 22.6 HY1 08 35% HY1 09 HY1 08 27% HY1 09 HY1 08 39% HY1 09 Latin America CEMEA Other 44.8 40.3 10.4 11.9 -12.6 -20.2 HY1 08 14% HY1 09 HY

  39. Slide 39: Net Result from JV's and Associates supported by strategic alliances

    Net Result from JV’s and Associates supported by strategic alliances In EUR mln, - excl. exceptional items - 34.4 24.6 21.3 17.6 18.4 17.7 16.1 HY1 HY2 HY1 HY2 HY1 HY2 HY1 2006 2007 2008 2009 HY1 2009 Net result from JV's and Ass - excluding exceptionals - 34.4 Exceptional items (non-cash impairment

  40. Slide 40: Net result from Joint Ventures and Associates increases with 62%

    Net result from Joint Ventures and Associates increases with 62% In EUR mln, - excl. exceptional items - North America OEMEA Asia 5.0 15.9 14.0 15.5 1.1 2.1 HY1 08 91% HY1 09 HY1 08 218% HY1 09 HY1 08 11% HY 1 09 Latin America CEMEA Other 0.9 0.8 0.6 0.5 -0.3 -0.4 HY1 08 17% HY1 09 HY1 08 11% HY1 09

  41. Slide 41: Vopak E.O.S.

    Vopak E.O.S. Review of financial implications Pakterminal Before Vopak E.O.S. (50%) transaction date E.O.S. (35% > 50%) (100%) YE 2007 April 23th 2008 Joint ventures Joint ventures Balance Sheet 100% consolidated and associates and associates Result of jv Result of jv Profit & Loss 100% consolidated

  42. Slide 42: Stable EBIT(DA) margins

    Stable EBIT(DA) margins 60% 50% EBITDA margin* 40% EBIT margin* 30% 20% 10% 0% * Excluding exceptional items, 2004 2005 2006 2007 2008 HY1 including net result of JV’s 2009 – – – HY1 results 2009 28 August 2009 42

  43. Slide 43: Net Profit excluding exceptional items increased by 16%

    Net Profit - excluding exceptional items - increased by 16% In EUR mln, - excl. exceptional items - HY1 09 HY1 08 ∆% Net Revenues 492.1 453.9 8% Net Result JV & Ass. 34.4 21.3 62% EBIT 184.2 156.8 18% Net finance costs -22.5 -19.4 -16% Tax* -34.1 -31.4 -11% Non-controlling Interests -13.3 - 8.2 -62%

  44. Slide 44: Net Finance Costs aligned with expansion program

    Net Finance Costs aligned with expansion program In EUR mln HY1 09 HY1 08 Interest and dividend income 4.0 3.2 Finance costs -26.5 -22.6 Net finance costs -22.5 -19.4 Net-interest bearing debt Average interest rate 1,086.3 996.7 10% 8% 561.9 6% 505.0 411.7 425.7 4% 2% 0% 2004 2005 2006 2007 2008 HY1

  45. Slide 45: Stable effective tax rate HY1 2009

    Stable effective tax rate HY1 2009 In EUR mln Effective Tax Rate HY1 09 HY1 09 % HY1 08 % Tax -34.1 21.1% 21.4% – – – HY1 results 2009 28 August 2009 45

  46. Slide 46: Pensions

    Pensions Vopak defined Pension obligations Impact of Dutch Pension obligations Reported year end 2008 • Year end cover ratio around 97% Other Cash 18% • One-off contribution of EUR 10 mln • Increased pension contribution IFRS • Estimated 2009 impact EUR 13.8 mln Dutch 82% Current situation • Recover

  47. Slide 47: Sources and uses of cash

    Sources and uses of cash In EUR mln Gross operating cash flow Investments 200 150 3.7 45.9 100 170.4 50 219.7 0 -24.6 -25.6 -50 53.1 -100 37.4 -150 Cash position Interest, Finance Divestments Financing cash Cash position 1 Jan 2009 dividend costs, tax flows, FX and 30 June 2009 received paid (de)con

  48. Slide 48: Business performance

    Vopak Terminal Europoort Vopak Horizon Fujairah Business performance EBIT per Division Vopak Houston Vopak Singapore Deer Park Terminal Sebarok Terminal – – – HY1 results 2009 28 August 2009 48

  49. Slide 49: Chemicals EMEA

    Chemicals EMEA “Too early to draw positive conclusions as to the structural recovery of the chemicals market” EBIT in EUR mln 23.1 22.6 22.8 21.7 22.1 17.7 23% 4% Vopak Terminal Botlek Zuid, Rotterdam Q1 Q2 Q3 Q4 2008 2009 – – – HY1 results 2009 28 August 2009 49

  50. Slide 50: Oil EMEA

    Oil EMEA “Robust demand for tank storage” EBIT in EUR mln 31.5 33.6 29.1 27.9 26.0 25.1 21% 34% Vopak Terminal Europoort, Rotterdam Q1 Q2 Q3 Q4 2008 2009 – – – HY1 results 2009 28 August 2009 50

  51. Slide 51: Asia

    Asia “Continued EBIT growth by expanding capacity and efficiency improvements” EBIT in EUR mln 30.6 33.9 24.2 25.0 23.4 22.9 31% 48% Q1 Q2 Q3 Q4 Vopak Terminal Sakra, Singapore 2008 2009 – – – HY1 results 2009 28 August 2009 51

  52. Slide 52: North America

    North America “Growth through acquisitions and rationalizations” EBIT in EUR mln 11.4 11.2 9.3 9.2 8.4 7.5 52% 20% Vopak Terminal Deerpark, Houston Q1 Q2 Q3 Q4 2008 2009 – – – HY1 results 2009 28 August 2009 52

  53. Slide 53: Latin America

    Latin America “Continuing steady performance” EBIT in EUR mln 6.4 5.8 5.8 5.5 5.3 5.1 21% 8% Vopak Terminal Cartagena, Colombia Q1 Q2 Q3 Q4 2008 2009 – – – HY1 results 2009 28 August 2009 53

  54. Slide 54: Investments

    Vopak Terminal Westpoort Gate terminal Investments Vopak Bahamas Vopak Singapore Penjuru Terminal – – – HY1 results 2009 28 August 2009 54

  55. Slide 55: Investing in growth

    Investing in growth Total investments 2009 - 2011 Investments in HY1 2009 EUR 220 mln EUR 220 mln, including ½ year sustaining Capex Annual Sustaining Capex EUR 250 – 325 mln EUR 100-125 mln per full year Remaining Expansion Capex HY2 2009 - 2011 Group companies and Vopak’s remaining joint ventures

  56. Slide 56: Total investments

    Total investments In EUR mln > 800 800 30.7 27.9 446 HY1 2009 +2.8 2011 268 HY1 2009 147 188 220 2003* 2004 2005 2006 2007 2008 2009-2011 – – – HY1 results 2009 28 August 2009 56

  57. Slide 57: Construction of expansion projects progressing well

    Construction of expansion projects progressing well Vopak Terminal Westpoort, Netherlands Gate Terminal, Netherlands 620,000 cbm 540,000 cbm Vopak Terminal Bahamas 370,000 cbm Vopak Terminal Jakarta, Indonesia 250,000 cbm – – – HY1 results 2009 28 August 2009 57

  58. Slide 58: Agenda

    Agenda Strategy HY1 Achievements Reliability and Efficiency Growth projects Business performance Financing Outlook Details and definitions used in this presentation are derived from the HY1 2009 press release and half year report, which are leading. – – – HY1 results 2009 28 August 2009 58

  59. Slide 59: Sufficient headroom to continue growth strategy

    Sufficient headroom to continue growth strategy Debt repayment schedule (in EUR mln) • Total financing program around EUR 1.5 bln • No major debt refinancing until 2011 406.3 319.7 181.9 80.8 46.8 23.2 2.0 2009 2010 2011 2012 2013 2014 > 2014 Ample financing sources of recent date Facility Maturity

  60. Slide 60: Strategic finance

    Strategic finance Net debt : EBITDA ratio HY1 2009 2.55 2008 2.54 2007 1.71 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 4 Maximum Ratio under US PP Maximum Ratio under other loans and syndicated revolving credit facility * Based on Dutch GAAP – – – HY1 results 2009 28

  61. Slide 61: Preference Shares Program supports growth Strategy

    Preference Shares Program supports growth Strategy The Preference Shares continue to qualify as equity under the current financing programs and IFRS standards EUR 110 mln Dividend percentage 7.45% + EUR 84 mln growth capital Remaining: EUR 26 mln Dividend percentage 4.73% Current program New program

  62. Slide 62: Pro forma: Net debt: EBITDA ratio decreases

    Pro forma: Net debt: EBITDA ratio decreases Creating more headroom for growth investments 2.55 Preference Shares 2.36 HY1 2009 Pro forma – – – HY1 results 2009 28 August 2009 62

  63. Slide 63: Agenda

    Agenda Strategy HY1 Achievements Reliability and Efficiency Growth projects Business performance Financing Outlook Details and definitions used in this presentation are derived from the HY1 2009 press release and half year report, which are leading. – – – HY1 results 2009 28 August 2009 63

  64. Slide 64: Outlook

    Outlook Full year 2008 and Q1 2009 Previous Outlook: “For 2009, Vopak expects a group operating profit before depreciation and (EBITDA) amortization (EBITDA) ofof atat least least EUR EUR 450 450 million”. million.” HY1 2009 Current Outlook: “For 2009, Vopak expects a group operating profit before d

  65. Slide 65: Outlook Assumptions

    Outlook Assumptions Oil Biofuels and Industrial Chemicals vegoils terminals ~ 20% of EBIT ~ 50% of EBIT ~ 15% of EBIT ~ 15% of EBIT ROBUST STABLE MIXED Healthy demand for storage capacity Contract renewals + New storage capacity commissioned – – – HY1 results 2009 28 August 2009 65

  66. Slide 66: Reconciling HY1 with FY09 outlook

    Reconciling HY1 with FY09 outlook * - excl. exceptional items - Actual HY1 2009 EBITDA* EUR 245.9 mln + -/- * expansions * tanks out of operation * margin management * pre-operating expenses * contract renewals * start-up results * operational efficiency improvements * uncertainty chemical storage (

  67. Slide 67: Outlook 2009: in the EUR 475-550 mln range

    Outlook 2009: in the EUR 475-550 mln range Outlook In EUR mln Guidance 2004 2005 2006 2007 2008 2009 Around 495 429.3 369.5 314.1 262.5 HY1 245.9 231.8 EBITDA** 320.4 272.9 220.9 HY1 184.2 EBIT 179.7 151.0 Long-term guidance ROCE of 16% Long-term guidance ROCE of 16% * Excluding exceptional items Be

  68. Slide 68: 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 32 countries in which Vopak provides logistics services, the company cannot guarantee the accur

  69. Slide 69: www.vopak.com

    – – – – HY1 results 2009 28 August 2009 69 www.vopak.com

Royal Vopak — H1 2009 Earnings Presentation on 6ix