Royal Vopak Nv · EURONEXT:VPK
Royal Vopak Nv — Q1 2015 Earnings Presentation
67 slides from Royal Vopak Nv's earnings presentation, Apr 22, 2015
Slide 1: The world of Vopak
Q1 2015 ROADSHOW PRESENTATION The world of Vopak
Slide 2: Forward-looking Statement
General Market Strategy Business Looking introduction trends execution performance ahead 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 be
Slide 3: General introduction
General Market Strategy Business Looking introduction trends execution performance ahead General introduction
Slide 4: Vopak at a glance
General Market Strategy Business Looking introduction trends execution performance ahead Vopak at a glance Building on an impressive Listed at the Euronext AEX history of almost 400 years Market cap of EUR 6.4 billion* World’s largest independent Track record developing tank terminal operator: new t
Slide 5: Financial development and indicators
General Market Strategy Business Looking introduction trends execution performance ahead Financial development and indicators EBITDA development Cash flow from operating activities (gross) In EUR million In EUR million 768 753 763 713 751 659 598 636 513 454 455 496 314 370 429 286 335 387 232 263 2
Slide 6: Investment thesis
General Market Strategy Business Looking introduction trends execution performance ahead Investment thesis Increasing global flows require storage infrastructure Diversified portfolio with presence at prime locations Stable margins and long-term take-or-pay contracts Strong capital structure
Slide 7: Vopak's ambition
General Market Strategy Business Looking introduction trends execution performance ahead Vopak’s ambition Presence Safety and Strong link Value Our at prime service supply creation values locations chain Solid leadership position in the global independent tank storage market 7 Roadshow presentation
Slide 8: Our strategic framework
General Market Strategy Business Looking introduction trends execution performance ahead Our strategic framework Growth Operational Customer leadership leadership leadership Our Sustainability Foundation Excellent People I Environmental Care I Health and Safety I Responsible Partner 8 Roadshow prese
Slide 9: Strategy execution
General Market Strategy Business Looking introduction trends execution performance ahead Strategy execution Strategic Divestment Reduce * Reduce * Growth Program Capex Cost base 4 15 100 30 categories terminals EUR million EUR million * Up to and including 2016 9 Roadshow presentation Q1 2015
Slide 10: Priorities for cash
General Market Strategy Business Looking introduction trends execution performance ahead Priorities for cash 1 Debt servicing EUR 2.0 billion, remaining maturity 8 years, average interest 4.0% 2 Dividend EUR 0.8b paid to shareholders in the last 10 years 3 Disciplined growth Network expended from 20
Slide 11: Business challenges
General Market Strategy Business Looking introduction trends execution performance ahead Business challenges Strategic Operational Increasing competition People with the right skills Changing flows Expansion projects Geopolitics Capital constraints Legislation Reputation Compliance Financial 11 Road
Slide 12: Discussions from investor meetings
General Market Strategy Business Looking introduction trends execution performance ahead Discussions from investor meetings Market dynamics Projects • Overcapacity and pricing • Projects under development pressure • Impact contango and • Ramp-up of new capacity backwardation Governance Network align
Slide 13: Market trends
General Market Strategy Business Looking introduction trends execution performance ahead Market trends 13
Slide 14: Trends driving storage demand
General Market Strategy Business Looking introduction trends execution performance ahead Trends driving storage demand Population GDP Energy demand 15-35% 70-170% 15-55% US oil and gas LNG as Shale gas in European refining Biofuel Energy role of export scenarios transport fuel China & petrochemical
Slide 15: Imbalances continue to develop
General Market Strategy Business Looking introduction trends execution performance ahead Imbalances continue to develop 2014 2020 2014 2020 2014 2020 2014 2020 2014 2020 Refined petroleum accumulated deficits 2014 2020 2014 2020 Refined petroleum accumulated surpluses increasing trade expected to co
Slide 16: Imbalances continue to develop
General Market Strategy Business Looking introduction trends execution performance ahead Imbalances continue to develop Source: ATEC / ICIS database and Vopak intelligence US and Middle East export; Asia and Europe import 16 Roadshow presentation Q1 2015
Slide 17: Product developments 2014
General Market Strategy Business Looking introduction trends execution performance ahead Product developments 2014 Oil production exceeds Chemicals: North Biofuels demand is LNG trade grew with demand resulting in price America is investing in stable in mature markets more short-term contracts reduc
Slide 18: Selective capital discipline growth
General Market Strategy Business Looking introduction trends execution performance ahead Selective capital discipline growth 18
Slide 19: Global presence
General Market Strategy Business Looking introduction trends execution performance ahead Global presence Gothenburg Malmo Sodertalje Gavle Kotka Hamina Tallinn Rotterdam Antwerp Shanghai Ningbo Hamburg Lanshan London Zhangjiagang Teesside Tianjin Windmill Ulsan Tarragona Karachi Barcelona Nagoya Alg
Slide 20: Return requirements for investment
General Market Strategy Business Looking introduction trends execution performance ahead Return requirements for investment Footprint in Optimization growth emerging markets opportunities I II First-mover Option advantage value Contribution from key accounts VI III Mitigating downward risks Growth a
Slide 21: Investments and divestments
General Market Strategy Business Looking introduction trends execution performance ahead Investments and divestments Oil Chemicals Industrial Gasses Pengerang (Industrial terminal) Divestments Galena park 2,100,000 cbm Pengerang (Hub location) (170,000 cbm) 413,000 cbm Wilmington terminals Europoort
Slide 22: Storage capacity developments
General Market Strategy Business Looking introduction trends execution performance ahead Storage capacity developments Storage capacity developments In million cbm; commissioned and under development +5.8 39.8 4.8 +0.2 1.0 0.1 0.4 34.0 33.8 0.3 Greenfield Greenfield Brownfield Brownfield Divestments
Slide 23: Selective growth opportunities
General Market Strategy Business Looking introduction trends execution performance ahead Selective growth opportunities Storage capacity In million cbm +5.8 +14.2 37.7 37.7 39.8 36.1 36.7 33.8 34.1 29.9 30.5 28.3 28.8 27.8 27.1 21,8 21,8 21,8 21,8 21.8 21,7 20.2 20.4 21.2 21,7 21,4 19.9 18,1 18,3 20
Slide 24: Storage capacity under construction
General Market Strategy Business Looking introduction trends execution performance ahead Storage capacity under construction Vopak's Capacity Country Terminal ownership Products (cbm) 2013 2014 2015 2016 2017 2017 2017 Existing terminals Netherlands Vlisssingen 100% LPG 13.100 Canada Canterm 100% Oi
Slide 25: Storage capacity under construction
General Market Strategy Business Looking introduction trends execution performance ahead Storage capacity under construction Vopak's Capacity Country Terminal ownership Products (cbm) 2013 2014 2015 2016 2017 2018 2019 New terminals China Dongguan 50% Chemicals 153.000 China Hainan 49% Oil products
Slide 26: Selective capital disciplined growth
General Market Strategy Business Looking introduction trends execution performance ahead Selective capital disciplined growth Total investments 2005-2019 Expansion capex** In EUR million In EUR million; 100% = EUR 3,300 million 3,284 ~400 Remaining Vopak share in capex (Group 2,235 capex and equity
Slide 27: Selective capital disciplined growth
General Market Strategy Business Looking introduction trends execution performance ahead Selective capital disciplined growth Senior net debt : EBITDA ratio Maximum ratio under other PP programs and syndicated 5 revolving credit facility 3.75 Maximum ratio under 4 current US PP programs 3.0 3 2.75 2
Slide 28: Vopak's capital structure
General Market Strategy Business Looking introduction trends execution performance ahead Vopak’s capital structure Syndicated Ordinary shares Private placement Equity(-like)* revolving program* credit facility* Listed on Euronext USD: 2.0 billion EUR 1.0 billion Subordinated loans Market capitalizat
Slide 29: Debt repayment schedule
General Market Strategy Business Looking introduction trends execution performance ahead Debt repayment schedule Debt repayment schedule In EUR million RCF flexibility US PP RCF drawn Asian PP Subordinated US PP Other 1,200 1,000 600 400 200 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2
Slide 30: Net finance costs
General Market Strategy Business Looking introduction trends execution performance ahead Net finance costs Net finance costs 2013 Net finance costs 2014 In EUR million In EUR million Interest and dividend income 3.3 7.9 Finance costs -108.6 -97.7 Net finance costs -105.3 -89.8 Net interest bearing d
Slide 31: Solvency ratio
General Market Strategy Business Looking introduction trends execution performance ahead Solvency ratio Total equity and liabilities In EUR million 5,226 4,644 4,386 4,152 3,649 Net 64% liabilities* 2,947 60% 58% 2,585 56% 58% 1,997 55% 1,703 61% 57% 56% 44% 40% 42% 36% Equity 45% 42% 43% 44% 39% 20
Slide 32: 2014 dividend
General Market Strategy Business Looking introduction trends execution performance ahead 2014 dividend Dividend and EPS 2006-2014** In EUR 2.73 2.45 2.31 Dividend policy: 2.08 2.16 1.92 1.62 Barring exceptional 1.31 circumstances, the 0.98 intention is to pay an annual cash dividend of 25-50% 0.70 0
Slide 33: Customer leadership
General Market Strategy Business Looking introduction trends execution performance ahead Customer leadership 33
Slide 34: Vopak's business model
General Market Strategy Business Looking introduction trends execution performance 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 rental fees for capacity Fixed
Slide 35: Global, regional and local clients
General Market Strategy Business Looking introduction trends execution performance ahead Global, regional and local clients Global clients Regional clients Local clients Active at multiple Vopak Active in more than one Vopak Active in one Vopak location locations around the world location on regiona
Slide 36: Market share according to definition
General Market Strategy Business Looking introduction trends execution performance 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 132.5 36.3 168.8 Secondary competition 81.8 1
Slide 37: EBIT(DA) margin development
General Market Strategy Business Looking introduction trends execution performance ahead EBIT(DA) margin development EBIT(DA) margin In percent 55 50 45 EBITDA margin 40 35 30 EBIT margin 25 20 15 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Focus on creating more value from our core asset
Slide 38: Original contract duration
General Market Strategy Business Looking introduction trends execution performance ahead Original contract duration Contract position 2012 Contract position 2013 Contract position 2014 In percent of revenues In percent of revenues In percent of revenues 18% 20% 21% 52% 52% 53% 30% 28% 26% < 1 year 1
Slide 39: Operational excellence
General Market Strategy Business Looking introduction trends execution performance ahead Operational excellence 39
Slide 40: Sustainability
General Market Strategy Business Looking introduction trends execution performance ahead Sustainability Excellent people Safety and Health Environmental care Responsible partner Have the right people Provide a healthy Be energy and water Be a responsible and create an agile and safe workplace effici
Slide 41: Safety performance
General Market Strategy Business Looking introduction trends execution performance ahead Safety performance Total injury rate (TIR) Lost time injury rate (LTIR) Total injuries per 200,000 hours worked by own Total injuries leading to lost time per 200,000 hours worked by own employees and contractor
Slide 42: Service improvements
General Market Strategy Business Looking introduction trends execution performance ahead Service improvements Jetty upgrades New rail loading spots Sebarok, Singapore Savannah, US Manifold Port pipeline expansion connections Westpoort, Fujairah, Netherlands UAE Truck Vapour management combustion Lan
Slide 43: Efficiency enhancements
General Market Strategy Business Looking introduction trends execution performance ahead Efficiency enhancements Sustaining & Organizational Leverage on improvement productivity standards and capex enhancements procedures reduction 43 Roadshow presentation Q1 2015
Slide 44: Business performance
General Market Strategy Business Looking introduction trends execution performance ahead Business performance 44
Slide 45: Topics influencing 2014 results
General Market Strategy Business Looking introduction trends execution performance ahead Topics influencing 2014 results Capacity Geopolitics Oil price Currency expansions and regulation volatility effects 45 Roadshow presentation Q1 2015
Slide 46: Results 2014
General Market Strategy Business Looking introduction trends execution performance ahead Results 2014 Terminal EBITDA Network * Excl. ex items *** 33.8 763 In million cbm In EUR million Occupancy Cash flows Rate ** Operating **** 88% 703 Average In EUR million * Terminal network is defined as the to
Slide 47: EBITDA development
General Market Strategy Business Looking introduction trends execution performance ahead EBITDA development Alignment network and competitive position Comprehensive scenario planning Full potential excellence Growth strategy Tank terminal strategy 768 753 763 ≥768 232 2004 2005 2006 2007 2008 2009 2
Slide 48: EBITDA development
General Market Strategy Business Looking introduction trends execution performance ahead EBITDA development EBITDA development In EUR million 206 202 196 194 189 187 185 183 180 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2013 2014 2015 While expanding our worldwide storage capacity we were able to increase the over
Slide 49: Q1 2015 summary
General Market Strategy Business Looking introduction trends execution performance ahead Q1 2015 summary EBITDA* EBIT* In EUR million In EUR million -5% +15% -11% +16% 188.9 179.6 206.2 138.4 123.8 143.3 Q1 2013 Q1 2014 Q1 2015 Q1 2013 Q1 2014 Q1 2015 Net profit** Occupancy rate*** In EUR million In
Slide 50: Q1 2015 EBITDA analysis
General Market Strategy Business Looking introduction trends execution performance ahead Q1 2015 EBITDA analysis 4.4 7.4 206.2 0.5 2.5 3.1 4.4 1.3 193.8 179.6 14.2 Americas Netherlands Other Q1 2014 Asia LNG Q1 2015 FX-effect Q1 2014 against FX Q1 2015 EMEA /Divestments /Greenfields Acquisitions /Pr
Slide 51: Occupancy rate developments
General Market Strategy Business Looking introduction trends execution performance ahead Occupancy rate developments Occupancy rate In percent Full potential playing field 90-95% Current playing field 85-90% 96 95 94 92 94 93 93 91 88 88 89 88 87 87 88 88 89 88 91 84 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11
Slide 52: Occupancy rate per division
General Market Strategy Business Looking introduction trends execution performance ahead Occupancy rate per division Netherlands EMEA +4pp +11pp +3pp -9pp 85% 88% 92% 89% 91% Occupancy rate 80% -1pp +3pp 89% 88% 91% Q1 2013 Q1 2014 Q1 2015 Q1 2013 Q1 2014 Q1 2015 Asia Americas Q1 2013 Q1 2014 Q1 201
Slide 53: Cash flow developments
General Market Strategy Business Looking introduction trends execution performance ahead Cash flow developments Cash flow from operating activities (gross) In EUR million 751 713 659 496 451 455 387 335 286 188 185 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Increasing free cash flow I Improvi
Slide 54: Financial ratio's 2014
General Market Strategy Business Looking introduction trends execution performance ahead Financial ratio’s 2014 Non-IFRS ROCE* ROE** Proportional information In % In % CFROGA*** 21.9% In % 18.8% 18.1% 16.7% 16.3% 14.6% 11.8% 10.9% 10.3% 2012 2013 2014 2012 2013 2014 2012 2013 2014 Focus on Free cash
Slide 55: Non-IFRS proportional information
General Market Strategy Business Looking introduction trends execution performance ahead Non-IFRS proportional information Proportionate EBITDA* In EUR million 836 817 824 617 660 537 196 227 2009 2010 2011 2012 2013 2014 2015 Occupancy rate subsidiaries Cash Flow Return on Gross Assets and joint ve
Slide 56: Divisional results
General Market Strategy Business Looking introduction trends execution performance ahead Divisional results 56
Slide 57: Netherlands
General Market Strategy Business Looking introduction trends execution performance ahead Netherlands EBITDA* In EUR million 59.8 59.5 61.3 62.0 60.9 62.8 68.0 61.0 68.2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2013 2013 2013 2013 2014 2014 2014 2014 2015 Occupancy rate** Storage capacity In percent In million cbm
Slide 58: EMEA
General Market Strategy Business Looking introduction trends execution performance ahead EMEA EBITDA* In EUR million 34.7 33.6 33.1 34.2 28.9 30.4 30.9 34.0 28.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2013 2013 2013 2013 2014 2014 2014 2014 2015 Occupancy rate** Storage capacity In percent In million cbm 89% 90
Slide 59: Asia
General Market Strategy Business Looking introduction trends execution performance ahead Asia EBITDA* In EUR million 70.7 73.2 70.6 68.0 66.4 70.0 76.9 77.9 75.4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2013 2013 2013 2013 2014 2014 2014 2014 2015 Occupancy rate** Storage capacity In percent In million cbm 95% 95
Slide 60: Americas
General Market Strategy Business Looking introduction trends execution performance ahead Americas EBITDA* In EUR million 28.0 25.9 26.3 29.5 29.4 24.0 22.1 21.2 23.3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2013 2013 2013 2013 2014 2014 2014 2014 2015 Occupancy rate** Storage capacity In percent In million cbm 91
Slide 61: Looking ahead
General Market Strategy Business Looking introduction trends execution performance ahead Looking ahead 61
Slide 62: Outlook assumptions
General Market Strategy Business Looking introduction trends execution performance ahead Outlook assumptions ~x% Share of EBITDA* Industrial terminals Biofuels & LNG Oil products Chemicals & other pipeline vegoils connected infra ~50% ~20% 15% - 20% 7.5% - 10% 2.5% - 5% Contract duration ~0 - 5 year
Slide 63: Outlook elements
General Market Strategy Business Looking introduction trends execution performance ahead Outlook elements 2014 Expansions Divestments Productivity and Fx and Uncertainties incl. 2015 and organisations pension costs phased build-up acquisitions efficiency enhancements In line with our previous outloo
Slide 64: Other topics
General Market Strategy Business Looking introduction trends execution performance ahead Other topics 64
Slide 65: FX translation effects
General Market Strategy Business Looking introduction trends execution performance ahead FX translation effects 2014 EBITDA transactional currencies FX translation-effect on 2013 EBITDA In percent In EUR million USD Netherlands SGD EMEA EUR Asia Americas Other 22% Non allocated Total -20.0 14% 38% F
Slide 66: Other topics
General Market Strategy Business Looking introduction trends execution performance ahead Other topics Effective tax rate* In percent 18.0 20.9 17.1 2012 2013 2014 * Excluding exceptional items. Pension cover ratio In percent 112 118 118 2012 2013 2014 66 Roadshow presentation Q1 2015
Slide 67: We have built our company over 400 years on trust and reliability
General Market Strategy Business Looking introduction trends execution We have built performance ahead our company over 400 years on trust and reliability • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •• •• ••