Royal Vopak Nv · EURONEXT:VPK
Royal Vopak Nv — Q1 2023 Earnings Presentation
55 slides from Royal Vopak Nv's earnings presentation, May 5, 2023
Slide 1: Shaping the future: Roadshow Presentation May 2023
Shaping the future Roadshow Presentation May 2023 Vopak Roadshow Presentation Q1 2023 1
Slide 2: Forward-looking statement
Forward-looking statement Any statement, presentation or other information contained herein that relates to future events, goals or conditions is, or should be considered, a forward-looking statement. Although Vopak believes these forward-looking statements are reasonable, based on the information a
Slide 3: Leading global platform
Shaping the future Leading global platform Unparalleled access to growth opportunities IMPROVE GROW ACCELERATE performance of our our base in industrial towards new energies & portfolio & gas terminals sustainable feedstocks Improve performance of existing portfolio Commitment to ESG > 12% EUR 1 bil
Slide 4: We serve multiple end markets through different products and customer offerings
We serve multiple end markets through different products and customer offerings End markets Energy Manufacturing New energies Products Gas & sustainable Oil Chemicals feedstocks Customer offerings Industrial Multifunctional Distribution Vopak Roadshow Presentation Q1 2023 4 Gas product segment inclu
Slide 5: Diversified portfolio through global network, product and commercial expertise
Diversified portfolio through global network, product and commercial expertise Global network Product expertise Commercial expertise Diversified portfolio of terminals Storing a wide variety of products and Our skilled commercial expertise allows across the globe expertise in handling gaseous produc
Slide 6: Diversified portfolio with terminals across countries around the globe
Diversified portfolio with 78 terminals across 23 countries around the globe Supporting energy and supply Biggest independent storage security in Europe provider in China and India Accelerating to sustainable feedstocks in LA Industrial terminals showing stable performance in Asia Chemicals and Indu
Slide 7: Q1 2023 Key Highlights
Q1 2023 Key Highlights >12% EUR 1 billion EUR 1 billion Operating cash return Growth capex by 2030 Growth capex by 2030 IMPROVE GROW ACCELERATE performance of our our base in industrial towards new energies & portfolio & gas terminals sustainable feedstocks Signed a joint venture for a Progressing t
Slide 8: Solid market demand across our services
Solid market demand across our services Market dynamics Vopak impact • Gate terminal enhancing energy security, in • LNG infrastructure remains in high demand. normalized LNG market. Gas • Supply security concerns expected to continue in • Other LNG terminals performing their role in local 2023. ene
Slide 9: Improve portfolio performance
Improve portfolio performance Improve Grow EBITDA EBITDA performance In EUR million • EBITDA of EUR 249 million in Q1 2023, supported 2 by improved market conditions 16 249 20 3 • Improved performance of oil and chemicals 25 • Gas continue to perform well in normalized market 213 2 4 • Energy and la
Slide 10: Actively managing our portfolio
Actively managing our portfolio Increase portfolio operating cash return Rationalize the portfolio • Divested our Canadian oil terminals and Agencies business. • Started a strategic review of our three chemical terminals in the port of Rotterdam (Botlek, TTR and Chemiehaven). Repurpose our existing
Slide 11: Actively managing our portfolio
Actively managing our portfolio Looking back Operating cash return1 average by terminal type In % for FY 2022, excluding the corporate cost allocation • Increased gas and industrial exposure over the last 5 years ~16 ~15 ~13 11.4 ~10 • Lowered oil exposure with 20% by material divestments and impair
Slide 12: Grow our base in gas in West Canada
Grow our base in gas in West Canada A new joint venture with AltaGas for large-scale liquefied petroleum gas (LPG) and bulk liquids export facility in Prince Rupert 2 REEF RIPET 1 10-11 days 25+ 18+ days days Expanding bulk liquid capacity in Canada, in addition to Ridley REEF has a significant logi
Slide 13: Grow our base in gas in West Canada
Grow our base in gas in West Canada Commercially attractive • Long-term commercial agreement for the first phase subject to a positive FID. • Key permits for construction received from Federal and Provincial governments. Strategic location • 77-hectare greenfield site with existing rail trackage. •
Slide 14: Aegis Vopak joint venture expansion
Aegis Vopak joint venture expansion Kandla 855k cbm 1.3M Six distribution terminals storing Hindustan Aegis LPG Cbm current capacity and handling chemicals, gas and 50k cbm vegoils Distribution terminal for LPG +6% Liquid products capacity to be Pipavav added 117k cbm + 200k cbm Haldia 174k cbm + 51
Slide 15: Growing Vopak's LNG footprint
Growing Vopak’s LNG footprint Intention to acquire 50% of the shares Gate terminal successfully closed the No longer make use of the share right of EemsEnergyTerminal open season for the 4th LNG tank of 49.99% FSRU in Hong Kong Regas capacity of 8 bcma, Growing regas capacity by 4 bcma Vopak has bee
Slide 16: Accelerating in new energies and sustainable feedstocks
Accelerating in new energies and sustainable feedstocks 4 focus areas Ammonia – ACE, import terminal for green ammonia as a Sustainable fuels – projects in LOHC – green liquid organic hydrogen carrier pilot (LOHC) Liquid hydrogen – green liquid hydrogen supply chain between Vlaardingen and Los Angel
Slide 17: Redeveloping land in Port of Antwerp
Redeveloping land in Port of Antwerp Redevelop Accelerate to make a positive contribution to the decarbonization of the industrial cluster of Antwerp Multi-modality Deep sea, river, road and rail access, as well as pipeline connections to Northwest Europe Products of the future The adjacent and futu
Slide 18: Repurposing to low carbon fuels
Repurposing to low carbon fuels Market need Existing oil assets show huge potential to be repurposed and transformed to store and handle Vlaardingen sustainable fuels and feedstocks Capacity being built for waste-based feedstocks Well positioned We have presence in the locations where import, export
Slide 19: Q1 2023 Key Highlights
Q1 2023 Key Highlights >12% EUR 1 billion EUR 1 billion Operating cash return Growth capex by 2030 Growth capex by 2030 IMPROVE GROW ACCELERATE performance of our our base in industrial towards new energies & portfolio & gas terminals sustainable feedstocks “Good progress on our strategy to improve
Slide 20: Financial framework and performance
Shaping the future Vopak Roadshow Presentation Financial framework and performance
Slide 21: Delivering on performance improvement
Delivering on performance improvement Revenue EBITDA Proportional occupancy EUR 362 m. EBITDA +12% EURoperating Prop. 249 m. cash+17% flow 92% Prop. +8 return operating cash %p. Operating Cash Return Growth capital expenditures Net debt to EBITDA 15.4% +3.7 p.p. EUR 54 m. EBITDA +29% 2.49x Prop. -0.
Slide 22: Strong EBITDA performance driven by organic growth across all divisions
Strong EBITDA performance driven by organic growth across all divisions EBITDA In EUR million 0 1 2 249 EBITDA performance 22 • Favorable storage demands in Asia & Middle East and Europe & Africa drive improved performance. 12 • Steady improvements across the other 213 4 2 1 divisions. • Positive cu
Slide 23: Strong cash flow generation
Strong cash flow generation Cash flow overview In EUR million • CFFO improved driven by a positive business +51% performance, working capital movement and 227 7 220 derivatives offset by lower dividend received 50 150 28 142 8 from joint ventures 184 86 Dividends 54 • Other CFFI and CFFF include int
Slide 24: Capital allocation driving strategy execution
Capital allocation driving strategy execution >12% EUR 1 billion EUR 1 billion Operating cash return Growth capex by 2030 Growth capex by 2030 IMPROVE GROW ACCELERATE performance of our our base in industrial towards new energies & portfolio & gas terminals sustainable feedstocks In Belgium, Vopak i
Slide 25: Solid balance sheet allows us to execute our strategy
Solid balance sheet allows us to execute our strategy Net debt : EBITDA Agreement for new debt issuance Senior net debt : EBITDA Total net debt : EBITDA • US Private Placement of in total EUR 400 million equivalent, 4.00 consisting of USD 225 and EUR 193 million with maturities Maximum covenant leve
Slide 26: Progress on our capital allocation priorities
Progress on our capital allocation priorities We focus on a robust balance sheet – Maintain a healthy leverage ratio We return value to shareholders – By a progressive dividend policy Remaining capital is spent on growth investments with attractive operating cash returns Focus on cash flow generatio
Slide 27: Portfolio transformation to industrial and gas terminals continue to improve earnings quality
Portfolio transformation to industrial and gas terminals continue to improve earnings quality Share of proportional revenue with Contract duration as a share of a contract duration > 10 years proportional revenue (%) 100% 100% 12% < 1 year 25% 27% 1-3 years 22% 34% 13% 16% 3-5 years 11% 5-10 years 1
Slide 28: Outlook drivers
Outlook drivers Market Business Cost Growth indicators performance Continue the momentum in Normalized energy costs in The storage demand is Capturing growth improved financial Q1 2023. Volatility in the expected to remain opportunities and performance. EBITDA energy prices, inflation and favorable
Slide 29: Increased FY 2023 outlook of EBITDA and operating cash return
Increased FY 2023 outlook of EBITDA and operating cash return For FY 2023 is expected to be above EUR 950 million compared to the prior EBITDA communicated range of EUR 910 million to EUR 950 million Short term Consolidated operating capex For FY 2023 is expected to be a maximum of EUR 300 million o
Slide 30: Sustainability framework and performance
Shaping the future Vopak Roadshow Presentation Sustainability framework and performance
Slide 31: Vopak's approach to sustainability
Vopak’s approach to sustainability We are ambitious and performance driven with a balanced roadmap focusing on care for people, planet and profit Network Environmental Social Governance GHG emissions Safety performance Diversity & inclusion Achieved 10% CO2 reduction in 2022 Maintained good performa
Slide 32: Our contribution to a net-zero society
Our contribution to a net-zero society Accelerate investments • Invest EUR 1 billion in infrastructure for new energies & sustainable feedstocks in infrastructure for 1 • Contribute actively to decarbonize industrial clusters new energies and • Focus on four areas in new energies and sustainable fee
Slide 33: Reducing our own environmental and carbon footprint
Reducing our own environmental and carbon footprint Interim GHG emissions reduction target of Decarbonize our existing Our ambition is to be net-zero by 30% by 2030 vs. 2021, which corresponds to and future operations 2050 (scope 1 & 2) a 45-60% reduction of the current asset base GHG emissions in t
Slide 34: Decarbonizing our operations and becoming net-zero – lines of action
Decarbonizing our operations and becoming net-zero – 5 lines of action Lines of action Examples Apply heat tracing optimization, pump performance programs, steam system segregation, optimization flameless Energy efficiency thermal oxidizer, LED lighting e.g. at Savannah and Botlek Renewable energy U
Slide 35: Funding ventures facilitating new sustainable solutions
Funding ventures facilitating new sustainable solutions With the Vopak Ventures New Energies, Feedstocks & Sustainability fund, we focus on funding ventures facilitating new sustainable solutions in areas such as zero emission fuels, green feedstocks, recycling solutions and flow batteries New energ
Slide 36: ESG benchmarks
ESG benchmarks “Carbon intensity is 77 % lower than industry average” “Strong efforts to mitigate environmental impacts of operation MSCI relative to peers” ▪ Rating: AAA (Scale: CCC to AAA) “100% of operations from business lines with low injury and fatality rates” ISS Sustainalytics ▪ Rating (scal
Slide 37: Appendix
Shaping the future XY Appendix Vopak
Slide 38: Project timelines
Project timelines Vopak’s Capacity Country Terminal ownership Products (cbm) 2020 2021 2022 2023 2024 2025 Growth projects Existing terminals United States Los Angeles 100% Renewable fuels 148,000 Netherlands Vlaardingen 100% Renewable feedstocks 64,000 Belgium Antwerp 100% Chemicals 41,000 Brazil A
Slide 39: Well spread maturity profile
Well spread maturity profile Debt repayment schedule In EUR million 1,300 1,200 1,100 1,000 900 700 800 700 600 500 400 300 138 300 200 43 274 267 253 100 165 117 96 138 69 72 46 75 0 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2040 RCF headroom RCF VTS Subordinated loans Asian
Slide 40: Strategic terminal types
Strategic terminal types Energy Manufacturing New energies & Gas terminals Industrial terminals Chemical terminals Oil terminals feedstocks • Accelerate infrastructure • Contribute to the energy • Petrochemical clusters are • Vopak operates a global • Hub terminals are located solutions for the worl
Slide 41: Ammonia terminal for import of hydrogen carrier
Ammonia terminal for import of hydrogen carrier Products: green ammonia as hydrogen carrier Partners: Gasunie, HES International and Vopak Start 2021 – Operational 2026 Possible services: storage, cracking, break-bulk, pipeline integration with Northwest European industrial areas End-use: industry a
Slide 42: LNG terminal strengthening supply security
LNG terminal strengthening supply security Product: high-calorific liquefied natural gas (LNG) Shareholding: Gasunie (50%) and Vopak (50%) Services: storage, regasification, truck and vessel loading, ship-to-ship transfer, bio-LNG End-use: power and industry Gate terminal in the Netherlands Storage:
Slide 43: Industrial terminal integrated with petrochemical complex
Industrial terminal integrated with petrochemical complex Product: chemicals and base oils Services: storage, blending, integrated pipeline systems with Vopak Sakra terminal in Singapore industrial complex, trucking, drumming, heating and chilling End-use: manufacturing, wide range of consumer goods
Slide 44: Vopak Industrial Infrastructure
Vopak Industrial Infrastructure 1. Serves feedstock and rundown from/to Refineries, Crackers and Single or multi-customer Industrial Terminal Chemical Plants 2. Handles all shipping operations: loading and unloading of vessels 3. Transfers between terminal and plant(s), built to specific needs of pl
Slide 45: Typical ITL contracting
Typical ITL contracting Lease Long-term between 10 to 25 years Term Stable revenues with fixed “take-or-pay”, Fee variable OPEX and energy & utilities Structure (pass-through or with markup) Fixed Fee adjustment in consideration of Renewal investment capex recovery Vopak Roadshow Presentation Q1 202
Slide 46: Vopak Industrial Infrastructure Americas
Vopak Industrial Infrastructure Americas Product: chemicals, oil products, biofuels, base oils and Freeport lubricants Shareholding: BlackRock (50%) and Vopak (50%) Services: storage, blending, integrated pipeline systems with industrial complex End-use: manufacturing, wide range of consumer goods S
Slide 47: Chemicals distribution terminal
Chemicals distribution terminal Products: chemicals including acetyls, acrylics, solvents and acids Services: import, export, distributing, blending End-use: manufacturing for a wide range of products like paints, adhesives and packaging Vopak ACS terminal in Antwerp Belgium Storage: 203 thousand cb
Slide 48: Oil hub terminal
Oil hub terminal Products: crude and oil products Services: storage, blending and heating Vopak Sebarok terminal in Singapore End-use: industry and mobility Storage: 1.3 million cbm (83 tanks) Access for barges - break bulk distribution Access for seagoing vessels - long haul Hub, import, shipments
Slide 49: Fuel distribution terminal
Fuel distribution terminal Products: oil products Services: storage, distribution and truck loading Vopak Lesedi terminal in South Africa End-use: mobility Storage: 100 thousand cbm (6 tanks) Johannesburg Lesedi Truck loading bays for inland distribution Durban Solar Fuel supply to panels Johannesbu
Slide 50: Well diversified infrastructure portfolio
Well diversified infrastructure portfolio Vopak Americas Asia & Middle East 92 95 93 89 90 93 93 94 94 90 87 88 84 84 84 249.0 83.4 89.9 213.1 219.4 226.9 227.8 73.4 76.4 78.4 58.7 54.5 56.2 57.2 58.7 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2022 2022 2022 2022 2023 2022 2022 2022 2022 2023 2022
Slide 51: Americas developments
Americas developments Storage capacity Proportional occupancy rate Revenues* In million cbm In percent In EUR million 0.5 Q1 2023 93 93 94 95 94 96.3 98.2 97.7 97.2 94.8 0.9 4.7 million cbm 3.3 Subsidiaries Joint ventures & associates Operatorships Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2022 2022 2022 2022 2
Slide 52: Asia & Middle East developments
Asia & Middle East developments Storage capacity Proportional occupancy rate Revenues* In million cbm In percent In EUR million Q1 2023 88 90 93 85.9 85.8 91.0 3.3 4.2 84 84 78.2 78.8 16.8 million cbm 9.3 Subsidiaries Joint ventures & associates Operatorships Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2022 2022
Slide 53: China & North Asia developments
China & North Asia developments Storage capacity Proportional occupancy rate Revenues* In million cbm In percent In EUR million Q1 2023 85 87 85 84 85 0.8 3.2 million cbm 13.0 13.3 13.5 11.7 12.2 2.4 Subsidiaries Joint ventures & associates Operatorships Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2022 2022 2022
Slide 54: Europe & Africa developments
Europe & Africa developments Storage capacity Proportional occupancy rate Revenues* In million cbm In percent In EUR million 1.3 Q1 2023 87 87 89 90 151.1 158.6 159.7 79 136.7 147.0 10.6 million cbm 9.3 Subsidiaries Joint ventures & associates Operatorships Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2022 2022 20
Slide 55: JVs & associates developments
JVs & associates developments* Net result JVs and associates Americas Asia & Middle East In EUR million In EUR million In EUR million 51.0 53.2 53.0 47.1 43.4 22.8 23.8 19.2 18.4 18.6 4.5 3.8 3.3 2.9 3.0 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2022 2022 2022 2022 2023 2022 2022 2022 2022 2023 2