Royal Vopak Nv · EURONEXT:VPK

Royal Vopak Nv — Q3 2019 Earnings Presentation

43 slides from Royal Vopak Nv's earnings presentation, Nov 4, 2019

1. Slide 1: Storing vital products with care

   Storing vital products with care Q3 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: Key message Capital Markets Day

   Key message Capital Markets Day  Confidence in short-term performance delivery and managing long-term value  Global well-diversified portfolio  Strong competitive position  Clear and robust financial framework  Strategy execution 2017-2019 is well on track Q3 2019 Roadshow Presentation 3

4. Slide 4: External developments 2017-2019

   External developments 2017-2019 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 p

5. Slide 5: Business environment update

   Business environment update Diversified portfolio, well positioned for future opportunities Chemicals Focus on operational delivery Oil products On track for IMO 2020 transition  Growing global demand for  Oil hubs: solid long-term demand chemicals drivers despite short-term weakness  Continued p

6. Slide 6: Vopak at a glance

   Vopak at a glance At end Q3 2019 Number of terminals Number of countries Storage capacity In million cbm 68 23 35.5 36.7 35.5 Q3 Q3 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* 6.0 5,565 0.4

7. Slide 7: Robust Vopak strategy

   Robust Vopak strategy Leadership in 5 pillars with clear strategy execution Storing vital products with care Leading asset Service Operational Technology People in leading leadership leadership leadership leadership locations Founder’s mentality Vopak Values Q3 2019 Roadshow Presentation 7

8. Slide 8: Strategic terminal types

   Strategic terminal types Industrial terminals LNG, LPG and Chemical terminals Oil terminals chemical gases Vopak has more than 40 years of Demand for gas is increasing, driven by The strong growth of global chemicals Oil import, distribution and hub terminals experience with industrial terminals. pe

9. Slide 9: Portfolio transformation

   Portfolio transformation Shift towards gases and industrial terminals and focus on the ‘East of Suez’ Proportionate revenue per product ~10% ~10% 2014-2016 Reshaping the portfolio ~15% 10-15% 20-25% 25-30% LNG, LPG & Chemical Period  Divestment of 19 terminals Gases 35-40% 25-30% Industrial termina

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 1.5 1.0 0.43 0.5 0 2008 2009 2010 2011 2012 2013 2

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

    UN Sustainable Development Goals (SDG) 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 Daily: Reducing our environmental footprint energy and cleaner fuels and by e

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: Strategy execution well on track

    Strategy execution well on track Strategic direction is set towards growth and productivity improvements  14 expansion projects announced in last years Capture growth  New projects in Canada, Malaysia, Indonesia, Singapore, South Africa, Brazil, Pakistan and the Netherlands Spend EUR 750 million o

15. Slide 15: Q3 Key messages

    Q3 Key messages Robust financial performance Significant increase in earnings per share Delivery on Vopak’s strategy with important steps in portfolio transformation  LNG Colombia is 4th regas terminal in Vopak LNG portfolio  Greenfield industrial terminal sanctioned in Qinzhou, China  Chemical c

16. Slide 16: YTD Q3 2019 vs YTD Q3 2018 EBITDA

    YTD Q3 2019 vs YTD Q3 2018 EBITDA Pro forma EBITDA increased by EUR 35 million, reflecting good aggregate business performance 625.0 36.4 4.5 6.9 588.6 3.9 11.0 565.2 553.6 11.6 9.5 14.4 YTD Q3 FX-effect Adjusted Europe & Asia & Americas China & LNG Global pro forma IFRS 16 YTD Q3 2018 YTD Q3 Africa

17. Slide 17: Q3 2019 vs Q2 2019 EBITDA

    Q3 2019 vs Q2 2019 EBITDA Positive new business contributions, planned temporary conversion activities related to IMO 2020 and divisional one-off items 208.0 207.9 0.1 3.3 0.8 0.4 1.2 2.5 0.5 202.4 Q2 2019 FX-effect Adjusted Europe & China & Asia & Americas LNG Global Q3 2019 Q2 2019 Africa North As

18. Slide 18: Divisional segmentation

    Divisional segmentation Europe & Africa and Asia & Middle East reflect temporary IMO conversion; Americas and LNG benefit from strong chemical and gas markets Europe & Africa Asia & Middle East Americas 86 85 84 85 85 92 92 82 83 80 89 89 89 91 71 77.2 70.3 73.6 76.2 72.8 59.6 65.9 77.5 66.9 66.3 39

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 571 554 589 90 86 84 180 206 161 Non-IFRS proportionate YTD Q3 YTD Q3 Pro forma YTD Q3 YTD Q3 YTD Q3 YTD Q3 YTD Q3 YTD Q3 information provides 2017 2018 YTD Q3

20. Slide 20: Cash flow overview

    Cash flow overview Investment momentum driven by growth project phasing towards 2019 YTD Q3 2019 YTD Q3 2018 In EUR million In EUR million 427 537 565 488 497 459 49 381 38 206 180 37 282 39 279 206 100 10 CFFO* Tax & other CFFO Sustaining, FCF Divestments Growth Other Free Cash CFFO* Tax & other CF

21. Slide 21: Occupancy rate developments

    Occupancy rate developments YTD occupancy rate reflects high out-of-service capacity; IMO 2020 conversion impact is approximately 4-5% in Q3 Occupancy rate* In percent FY 86% YTD 84% 90-95% 85-90% 87 85 86 85 86 84 82 IMO out-of-service capacity 2010 2011 2012 2013 2014 2015 2016 2017 Q1 Q2 Q3 Q4 Q1

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 LNG, LPG & Chemical Oil terminals chemical gases terminals terminals Typical contract 5-20 years 10-20 years 0-5 years 0-5 years duration per product / terminal category Share of 20-25% ~10% 25-30% ~40% proportionate rev

25. Slide 25: Growth investments

    Growth investments Shift towards industrial terminals, chemical and gas terminals Botlek Vlissingen Vietnam RIPET 63,000 cbm Deer Park 9,200 cbm German LNG 96,000 cbm* Qinzhou 20,000 cbm 33,000 cbm Antwerp PT2SB Altamira Open season completed 290,000 cbm Veracruz EETPL 50,000 cbm 1,496,000 cbm* 40,0

26. Slide 26: Project timelines

    Project timelines Vopak’s Capacity Country Terminal ownership Products (cbm) 2017 2018 2019 2020 2021 2022 Growth projects per 4 November 2019 Existing terminals Malaysia Pengerang Independent Terminals (PITSB) 44.1% Oil products 430,000 Brazil Alemoa 100% Chemicals 106,000 Singapore Sebarok 69.5% O

27. Slide 27: Global fuel oil network

    Global fuel oil network Most of the fuel oil capacity conversions for IMO 2020 bunker fuels have been delivered and support revenues as from Q4 2019 Fuel Oil capacity Rotterdam Algeciras IMO ready 10% ~35% ~3.5m cbm Los Angeles Held for sale 15% 45% 55% Singapore ~65% 45% Panama 30% Delivering capac

28. Slide 28: Investment phasing

    Investment phasing Balanced approach for growth, sustaining, service improvement and IT investments Investments 2017-2019 Investments Investments In EUR million In EUR million  Growth investments with clear New return criteria based on future projects* cash flow and risk profile Growth ~1bn investm

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% 12.0% 11.6% 12.0% 10-15% 4.1 4.3 4.2 4.3 4.0 2017 2018 Q1 Q2 Q3 2020 2021 2017 2018 Q1 2019 Q2 2019 Q3 2019 2020 2021 2019 2019 2019  Disciplined

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 2.1 billion, remaining average maturity ~6 years, average interest 3.5% 2 Growth opportunities Value accretive gr

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 ~6.0 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 1,300 1,200 RCF flexibility 1,100 RCF drawn* 1,000 Other 900 Subordinated loans 800 Asian PP 700 US PP 600 500 400 300 200 100 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2040 As per 30 September 2019 *Per 30 September EUR 2

34. Slide 34: Increase in dividend to EUR 1.10 per share

    Increase in dividend to EUR 1.10 per share Continued rising cash dividends Dividend and EPS* Dividend policy: In EUR 2.55 2.56 2.31 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 1.05 1.05 1.10 1.00 ci

35. Slide 35: 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

36. Slide 36: Appendix

    Storing vital products with care Q3 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 Q3 2019 86 85 82 83 84 155.8 158.2 153.8 151.9 152.7 10.8 million cbm Subsidiaries 9.5 Joint ventures & associates Operatorship Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2018 2018 2019 2019

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 Q3 2019 92 84.5 3.3 85 85 80 77.2 79.1 76.5 4.2 15.1 million cbm 71 70.6 Subsidiaries Joint ventures & associates 7.6 Operatorship Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2018 2018 2019 20

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 Q3 2019 83 79 0.8 73 73 73 4.2 million cbm 10.5 9.8 9.7 7.9 8.3 Subsidiaries 3.4 Joint ventures & associates Operatorship Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2018 2018 2019 2019 2019 2

40. Slide 40: Americas developments

    Americas developments Storage capacity Occupancy rate* Revenues* In million cbm In percent In EUR million Total Q3 2019 89 89 89 91 92 79.3 75.6 77.0 0.2 0.5 4.2 million cbm 70.3 71.1 Subsidiaries 3.5 Joint ventures & associates Operatorship Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2018 2018 2019 2019 2019 201

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 46.8 40.3 37.7 36.6 22.9 26.9 19.8 16.0 10.7 6.6 0.6 0.7 0.6 0.6 0.4 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2018 2018 2019 2019 2019 2018 2018 2019 201

42. Slide 42: Key developments

    Key developments Occupancy rate* EBITDA development** In percent In EUR million 88 92 93 90 86 763 812 822 763 734 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Cash flow from operating activities (gross) Dividend In EUR million In EUR per ordinary share 867 1.05 1.05 1.10 787 783 1.00 714 687 0

43. Slide 43: EBITDA to Net profit overview

    EBITDA to Net profit overview Increase in Earning per Share 2018 2017 In EUR million* In EUR million* EBITDA 734.3 763.2 Depreciation and amortization 271.0 272.8 EBIT 463.3 490.4 Net finance costs 82.4 98.5 Income tax 55.4 64.7 Non-controlling interests 36.0 39.8 Net profit to holders 289.5 287.4 o

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