Royal Vopak NV · EURONEXT:VPK
Royal Vopak NV — Investor Day (November 2023)
61 slides from Royal Vopak NV's investor day presentation, Nov 1, 2023
Slide 1: Analyst & Investor day: Shaping the future to help the world flow forward
Analyst & Investor day Shaping the future to help the world flow forward 1 November 2023
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: CEO - Dick Richelle
Analyst & Investor day CEO - Dick Richelle Vopak Analyst & Investor day 2023 3
Slide 4: Our program for today
Our program for today 10:30 - 11:00 Strategic priorities and execution Dick Richelle, Chief Executive Officer 11:00 - 11:30 Sustainability ambition and progress Frits Eulderink , Chief Operating Officer 11:30 - 12:00 Financial performance and capital Michiel Gilsing, Chief Financial Officer structur
Slide 5: We help the world flow forward
We help the world We deliver flow forward We provide safe storage and infrastructure for vital liquids and gases. Our trusted professionals ensure that they are available in the right place, at the right time. We drive progress We create connections We proudly serve a growing world We are entreprene
Slide 6: Delivering on our Shaping the future strategy
Delivering on our Shaping the future strategy Improve the performance of our portfolio Well-diversified portfolio for energy security and the energy transition >12% operating cash return Creating value for all stakeholders and Grow actively managing our portfolio towards our base in industrial & gas
Slide 7: Well-positioned to leverage strong market fundamentals and energy transition opportunities
Well-positioned to leverage the strong market fundamentals and energy transition opportunities Macroeconomic and end market developments Business impact Additional storage requirements to optimize supply chains Global energy demand Energy and supply security > +8% by 20301 > As result of geopolitica
Slide 8: Well-diversified portfolio supports energy security and energy transition
Well-diversified portfolio supports energy security and energy transition We deliver We create connections an independent network partnerships that matter 78 23 5,500+ terminals countries professionals around the world 1,000+ customers We drive progress 35+ joint venture partners future focused capa
Slide 9: Delivering on our strategic priorities: Improve
Delivering on our strategic priorities Improve Continued focus on improving our financial and ESG performance across the portfolio and creating value for all stakeholders ~25% +€200m €1.30 Reduced GHG emissions Cash flow1 improvement, Dividend per share paid in compared to 2021, and supported by act
Slide 10: Actively managing the portfolio
Actively managing the portfolio Improve Rationalize – good progress on existing portfolio Repurpose – Continuing across the global portfolio Oil terminals in Canada Los Angeles Singapore Vopak Agencies Repurposing to sustainable Repurposing part of capacity aviation fuel and renewable diesel into bi
Slide 11: Improving financial performance
Improving financial performance Improve EBITDA Operating Total Net-debt to Cash Return EBITDA -0.89x +17% +2.8 p.p. ~970m >13% 3.16x 827m 10.2% 2.27x 2021 2023 outlook 2021 2023 outlook YTD Q3 2021 YTD Q3 2023 +17% >12% 2.5x-3.0x Strong EBITDA growth YoY, FY 2023 Operating cash return of the portfol
Slide 12: Delivering on our strategic priorities: Grow
Delivering on our strategic priorities Grow Attractive projects in the Netherlands, India, and Canada that will further drive expansion in LNG and LPG +1.3mcbm +40% 110kcbm Additional capacity in India Additional LNG capacity in New industrial capacity under the Netherlands construction in China Vop
Slide 13: Grow LNG and LPG infrastructure for today's energy security
Grow LNG and LPG infrastructure for today’s energy security and growing energy demand Grow Market opportunities Network that delivers Capabilities to drive progress Global energy demand and imbalance in gas Reputation and proven track record in developing, Investing and expanding the network by ensu
Slide 14: Unique assets positioned to capture opportunities in LNG and LPG
Unique assets strategically positioned to capture opportunities in LNG and LPG Hub terminal Terminal Market opportunities in LNG and LPG Vopak Analyst & Investor day 2023 14
Slide 15: Growing our footprint in industrial clusters
Growing our footprint in industrial clusters Grow Market opportunities Network that delivers Capabilities to drive progress Global manufacturing market will continue to grow Reputation and proven track record in developing Expansion opportunities in existing locations, exploring terminals in the big
Slide 16: Unique assets positioned to capture opportunities in industrial terminals
Unique assets strategically positioned to capture opportunities in industrial terminals Hub terminal Terminal Market opportunities in Industrial Vopak Analyst & Investor day 2023 16
Slide 17: Delivering on our strategic priorities: Accelerate
Delivering on our strategic priorities Accelerate Portfolio transition across the world in low-carbon fuels, ammonia, and CO2 infrastructure by using the existing assets and exploring greenfield opportunities €30m 18 Invested in projects since Vopak venture investments +200Kcbm Biofuel capacity comm
Slide 18: Opportunities in all phases of decarbonization journey
Opportunities in all phases of Next generation fuels decarbonization journey Ammonia as H2 carrier Renewable fuels & Hydrogen feedstocks electrolysis Generating wind & solar New Hydrogen carriers Electricity storage Large-scale electrification Carbon capture Gas replacing coal New gas capacity Repur
Slide 19: Unique assets positioned to capture opportunities in biofuels
Unique assets strategically positioned to capture opportunities in biofuels Hub terminal Terminal Market opportunities in biofuels Vopak Analyst & Investor day 2023 19
Slide 20: Unique assets positioned to capture opportunities in ammonia
Unique assets strategically positioned to capture opportunities in ammonia Hub terminal Terminal Market opportunities in ammonia Vopak Analyst & Investor day 2023 20
Slide 21: Our capability to be a partner in low-carbon storage
Our capability to be a partner in low-carbon storage OUR STRENGTH OUR PLAN Strengthen our existing network to deliver by Infrastructure in highly strategic locations repurposing some of the current infrastructure Extensive connections with partners and Leverage the connections to develop brownfield
Slide 22: Positioned for the future of energy
Positioned for the future of energy Vopak is capturing the opportunities in the energy transition today and tomorrow We deliver Proven track record of execution • Trusted independent network of infrastructure solutions that supports customers’ ambitions worldwide • With a heritage of 400+ years, tra
Slide 23: COO – Frits Eulderink
Analyst & Investor day COO – Frits Eulderink Vopak Analyst & Investor day 2023 23
Slide 24: Delivering on our Shaping the future strategy
Delivering on our Shaping the future strategy Improve the performance of our portfolio Contributing towards a net-zero >12% operating cash return society Grow Strong capabilities to support the our base in industrial & gas terminals energy transition, and continuing investing EUR 1 billion growth ca
Slide 25: Our contribution to a net-zero society: invest in asset base
Our contribution to a net-zero society Invest in our asset base for cleaner fuels and feedstocks Repurpose Invest Current asset base for cleaner In LNG/LPG terminals that offer fuels and feedstocks where cleaner alternatives to existing possible, for example biofuels energy systems Vopak Analyst & I
Slide 26: Our contribution to a net-zero society: accelerate investments
Our contribution to a net-zero society Accelerate investments in infrastructure for new energies and sustainable feedstocks Invest Contribute Focus EUR 1 billion in infrastructure Actively to decarbonize In four areas: low-carbon fuels, for new energies & industrial clusters CO2 infrastructure, Hydr
Slide 27: Global capabilities to store and handle low-carbon products
Global capabilities to store and handle low-carbon products Massive opportunity Global demand for liquid 3x low-carbon fuels by 2030 compared to 20201 Market demand for hydrogen 1.5x expected to grow from 90 MTPA today to 140 MTPA in 20302 Capabilities to deliver 1. Technical capabilities 2. IT capa
Slide 28: Strong expertise in LNG and ammonia supports CO2 and hydrogen solutions
Strong expertise in LNG and ammonia supports CO2 and hydrogen solutions Safety & sustainability Global expertise combined with local insights drive safety & sustainability Service & operations Driving effectiveness and efficiency in our core processes Asset management Keeping highest standards to ma
Slide 29: Leading digital capabilities
Leading digital capabilities Operations supported by digital solutions Terminal management system Real-time operational data Interesting IT follow-up investments • Modern HR and Finance systems • Enhancing operational efficiency by real- • Leverage on digital solutions time data and analytics • MySe
Slide 30: Funding ventures facilitating new sustainable solutions
Funding ventures facilitating new sustainable solutions New energies, Operational excellence Platforms, data feedstock & sustainability & Asset management & digitalization Vopak Analyst & Investor day 2023 30
Slide 31: Footprint in perspective
Footprint in perspective GHG emissions per annum In million metric tons CO2 savings of Gate sized terminal Gate emissions LNG throughput, compared to coal 25 close to zero usage for the same amount of energy ~ 0,001% of Total Vopak emissions 0.52 worldwide emissions ~ 1,8% of Germany CO2 emissions 6
Slide 32: Decarbonizing our operations and becoming net-zero
Decarbonizing our operations and becoming net-zero – 5 lines of action Lines of action Examples Apply heat tracing optimization, pump performance programs (e.g. Vlaardingen), steam system Energy efficiency segregation, optimization flameless thermal oxidizer, LED lighting Renewable energy Use of sol
Slide 33: Double materiality assessment
Double materiality assessment Vopak Analyst & Investor day 2023 33
Slide 34: Delivering on improvements with our sustainability performance
Delivering on improvements with our sustainability performance Topic Target and actual score YTD Q3 2023 0.17 Total Injury Rate 2024 0.22 Process Event Safety Rate YTD Q3 2023 0.09 2024 0.15 Reduction of GHG emissions YTD Q3 2023 -25% (% reduction of scope 1 & 2 vs. 2021) 2030 -30% VOC emission FY 2
Slide 35: ESG benchmarks
ESG benchmarks Rating: Rating: Rating: (Scale: CCC to AAA) (scale: 1 low risk to 10 high risk) (Scale: 0 to 50 high exposure) • Consensus has not been reached, particularly on the AAA Environmental 27.8 inclusion or exclusion of the use phase emissions of the 3 Rank in the Refiners & LNG we store an
Slide 36: Positioned for the future of energy
Positioned for the future of energy Vopak is capturing the opportunities in the energy transition today and tomorrow We deliver Proven track record of execution • Improving on all environment, social and governance aspects • Scoring well compared to industry according to external benchmarks We creat
Slide 37: CFO – Michiel Gilsing
Analyst & Investor day CFO – Michiel Gilsing Vopak Analyst & Investor day 2023 37
Slide 38: Delivering on our Shaping the future strategy
Delivering on our Shaping the future strategy Robust fundamentals support value Improve creation The performance of our portfolio >12% operating cash return Strong, stable, long-term cash flows Grow our base in industrial & gas terminals From vision to execution EUR 1 billion growth capex by 2030 Di
Slide 39: Robust fundamentals support value creation
Robust fundamentals support value creation EBITDA Proportional Operating Total net debt occupancy rate Cash Return to EBITDA -0.89x +17% +3 p.p. +3.3 p.p. ~970m 91% 14.4% 3.16x 827m 88% 11.1% 2.27x 2021 2023 outlook YTD Q3 2021 YTD Q3 2023 YTD Q3 2021 YTD Q3 2023 YTD Q3 2021 YTD Q3 2023 EBITDA margi
Slide 40: Stable cash flow generation across the portfolio
Stable cash flow generation across the portfolio Proportional EBITDA Proportional Operating Cash Flow JV dividend upstream EUR million EUR million As % of JV & associates net income 872 615 107% 798 711 719 749 514 103% 41% 447 439 438 42% 51% 81% 72% 36% 43% 41% 53% 50% 58% 55% 52% 177 186 195 166
Slide 41: Strong cash flow generation funding our ambitions
Strong cash flow generation funding our ambitions Cashflow YTD 2023 in EUR million % of CFFO gross 15% 680 27% • Cash generation improvements 102 sufficient to fund company 578 needs. 186 28% 518 • Dividend and growth capex fully funded by strong cash 187 22% generation. • In a pro-rata approach the
Slide 42: Long-term cash flow generation supported by business performance
Long-term cash flow generation supported by business performance Proportional EBITDA YTD 2023 in EUR million % change YoY vs YTD 2022 +12% +9% 872 +17% 338 79 -3% 272 +10% 166 175 Gas Industrial Chemicals Oil Other Total • Gas market has normalized • Stable performance across • The global chemical m
Slide 43: Stable, strong and long-term cash flows
Stable, strong and long- term cash flows portfolio +200m Improved cash flow returns of Additional operating cash flow generated in the last 2 years1 Strong dividend upstream capabilities >90% Of joint ventures net income upstream as dividend to Vopak2 Growth capex allocated towards accretive investm
Slide 44: Well-diversified portfolio with attractive EBITDA margin
Well-diversified portfolio with attractive EBITDA margin Actions taken to Proportional EBITDA margin In % Contract duration as a share of proportional revenue In % protect margins Indexations clauses in contracts 100% 100% More than 70% of revenues coming from 12% < 1 year contracts with indexation
Slide 45: Adapting the portfolio to evolving market dynamics
Adapting the portfolio to evolving market dynamics Proportional capital employed per product category1 in % • Portfolio well-positioned to capture 10-15% opportunities 20-25% 25-30% 25-30% 15-20% 35-40% • Share of oil and chemical expected to reduce 20-25% 20-25% overtime as new energies investments
Slide 46: Well-positioned towards higher cash returns
Well-positioned towards higher cash returns Operating cash return1 average by terminal type Development in %, excluding the corporate cost allocation and other Q3 YTD ’22 Q3 YTD’23 • Average returns per terminal type improved 20.3 • Chemical terminal performance improved due 16.0 17.8 16.1 15.2 to p
Slide 47: Growth capex allocated towards accretive investments
Growth capex allocated towards accretive investments Return Allocation Timing Investments multiples1 per segment EUR 1 billion towards new energies & Of allocating EUR 2 billion in growth and brownfield and greenfield (excl. M&A) sustainable feedstocks accelerate Gas 5-7x 80-90% Majority of growth c
Slide 48: Disciplined capital allocation
Disciplined capital allocation Driving value through accretive growth investments Capital allocation policy with discipline on shareholder returns We focus on a robust balance sheet – Target achieved: 2.27x net debt / Maintain a healthy leverage ratio EBITDA below target range 2.5x-3.0x We return va
Slide 49: Strong long-term fundamentals
Strong long-term fundamentals Vopak is well-positioned to capture growth opportunities driven by its strong financial position We deliver Resilient financial performance • Assets that generate strong, stable, long-term cash flows • Actively managing the portfolio towards higher returns We create con
Slide 50: EVP Global BD - Walter Moone
Analyst & Investor day EVP Global BD - Walter Moone Vopak Analyst & Investor day 2023 50
Slide 51: Opportunities in all phases of decarbonization journey
Opportunities in all phases of Next generation fuels decarbonization journey Ammonia as H2 carrier Renewable fuels & Hydrogen feedstocks electrolysis Generating wind & solar New Hydrogen carriers Electricity storage Large-scale electrification Carbon capture Gas replacing coal New gas capacity Repur
Slide 52: Additional storage demand in low carbon fuels & feedstocks
Additional storage demand in low carbon fuels & feedstocks Multiple products Infrastructure need New value chains 40% 2.4x 4.5x GHG reduction target on Methanol capacity required for Additional feedstock storage in emissions from ships by 2030 vs. the energy equivalent of 1 cbm Vlaardingen compared
Slide 53: Our role in the Biofuels supply chain
Our role in the Biofuels supply chain Biofuels Supply Chain Step Local Feedstock Feedstock Shipping Feedstock Biorefinery Blending collection aggregation storage & Distribution What Collection through Consolidation in port Feedstock shipped Storage in receiving Integrated units at Biofuels are blend
Slide 54: Leverage our strength – biofuel capacity at key locations
Leverage our strength – biofuel capacity at key locations Los Angeles • 22 repurposed Fuel Oil tanks • 148,000 cubic meters • Long-term agreement with Neste • SAF and renewable diesel distribution Existing biofuels and sustainable fuel locations Vopak Analyst & Investor day 2023 54
Slide 55: CCUS will be required to meet Paris climate goals
CCUS will be required to meet Paris climate goals CCUS LCO2 emerging market Driving progress 1,300 ~150 • Ability to offer common infra with economies of scale MTPA globally required to achieve MTPA regional liquid CO2 the net-zero commitments flows of in 2030 in Europe pledged at COP26 by 2030 and
Slide 56: Our core play: large-scale liquid CO2 terminals
Our core play will be building, owning, and operating large-scale liquid CO2 terminals 1. Vopak’s core play 2. Vopak’s adjacent activities Where not to play ● Temporary storage & handling infrastructure ● Development of open access CO2 ● Carbon Capture ● Pressurization of the LCO2 for injection into
Slide 57: Liquid CO2 infrastructure - proximity to industrial clusters and sinks
Liquid CO2 infrastructure - leverage our proximity to industrial clusters and sinks CO2NEXT • New liquid CO2 capacity at existing terminal • Connected to Aramis underground storage • Launch ~5.4 Mtpa, 2 jetties • Developed with existing partners • Modular growth possible up to 4 jetties and 15 Mtpa
Slide 58: Hydrogen key to decarbonize, Ammonia the most versatile carrier
Hydrogen key to decarbonize, Ammonia being the most versatile carrier Market size Infrastructure need Driving progress 90 ~7x • Expertise and proven track record in 6 existing ammonia Mtpa global hydrogen demand tonnes Ammonia required to today1 transport 1 ton of Hydrogen terminals • Presence in ke
Slide 59: Core of the ammonia strategy: large-scale import & export infrastructure
Core of the ammonia strategy will center around developing large-scale import & export infrastructure Logistic chain Production and Storage at export Primary Storage and handling liquefaction terminal transportation infrastructure Transport to end customer and direct Ammonia 1 1 Vopak value plays ex
Slide 60: Leverage our strength – H2/Ammonia capacity at key locations
Leverage our strength – H2/Ammonia capacity at key locations Vopak Moda Houston • Existing Vopak ammonia import terminal • Industrial long-term agreement • Expansion for green ammonia exports • Strong partners: Inpex, Air liquide, LSB Existing ammonia locations Vopak Analyst & Investor day 2023 60
Slide 61: Shaping the future to help the world flow forward
Analyst & Investor day Shaping the future to help the world flow forward 1 November 2023