Royal Vopak Nv · EURONEXT:VPK
Royal Vopak Nv — H1 2015 Earnings Presentation
70 slides from Royal Vopak Nv's earnings presentation, Aug 21, 2015
Slide 1: The world of Vopak
HY1 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 4.9 billion* World’s largest independent Track record developing tank terminal operator: new t
Slide 5: Financial development
General Market Strategy Business Looking introduction trends execution performance ahead Financial development EBITDA development Cash flow from operating activities (gross) In EUR million In EUR million 768 753 763 713 751 659 598 636 513 454 455 496 370 429 387 314 286 335 2006 2007 2008 2009 2010
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: Strategic Framework
General Market Strategy Business Looking introduction trends execution performance ahead 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 presentat
Slide 9: Business review
General Market Strategy Business Looking introduction trends execution performance ahead Business review Strategic Divestment Growth Program 4 15 categories terminals Reduce * Reduce * Capex Cost base 100 30 EUR million EUR million * Up to and including 2016 9 Roadshow presentation HY1 2015
Slide 10: Priorities for cash
General Market Strategy Business Looking introduction trends execution performance ahead Priorities for cash 1 Debt servicing EUR 2.3 billion, remaining maturity 8 years, average interest 4.2% 2 Dividend EUR 0.8b paid to shareholders in the last 10 years 3 Disciplined growth Network expanded from 20
Slide 11: Business challenges
General Market Strategy Business Looking introduction trends execution performance ahead Business challenges Strategic Operational Competitive environment People with the right skills Changing flows Expansion projects Geopolitics Capital constraints Legislation Reputation Compliance Financial 11 Roa
Slide 12: Discussions with investors
General Market Strategy Business Looking introduction trends execution performance ahead Discussions with investors Market dynamics Projects • Asia market dynamics • Projects under development • Overcapacity and pricing • Ramp-up of new capacity • Impact contango Governance Network alignment • Gover
Slide 13: Market trends
General Market Strategy Business Looking introduction trends execution performance ahead Market trends
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: Structural imbalances
General Market Strategy Business Looking introduction trends execution performance ahead Structural imbalances 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 continue 15
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 HY1 2015
Slide 17: Product developments
General Market Strategy Business Looking introduction trends execution performance ahead Product developments Oil Chemicals Biofuels LNG Structural imbalances, A encouraging chemicals Biofuels demand coming Increase in supply product price volatility and industry, with feedstock purely from mandates
Slide 18: Strategy execution: Growth leadership
General Market Strategy Business Looking introduction trends execution performance ahead Strategy execution Growth leadership 18
Slide 19: Global presence
General Market Strategy Business Looking introduction trends execution performance ahead Global presence London Hamburg Talinn Amsterdam Rotterdam* Antwerp Ningbo Lanshan Tianjin Teesside Zhangjiagang Windmill Ulsan Tarragona Karachi Barcelona Nagoya Algeciras Moji Quebec Yokohama Hamilton Kobe Mont
Slide 20: Return requirements for investments
General Market Strategy Business Looking introduction trends execution performance ahead Return requirements for investments Footprint in Optimization growth emerging markets opportunities I II First-mover Option advantage value Contribution from key accounts VI III Mitigating downward risks Growth
Slide 21: Investments and divestments
General Market Strategy Business Looking introduction trends execution performance ahead Investments and divestments Finland terminals (175,400 cbm) Sweden terminals (1,261,000 cbm) Pengerang (Phase 1C) 413,000 cbm Galena park terminal (170,000 cbm) Vlissingen Wilmington terminal terminals 36,800 cb
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 +5.6 4.8 38.3* 0.2 -1.1 0.4 33.8 0.1 1.0 32.7 1.6 Greenfield Greenfield Brownfield Brownfield Divest
Slide 23: Selective growth opportunities
General Market Strategy Business Looking introduction trends execution performance ahead Selective growth opportunities Storage capacity In million cbm Divestments Galena park terminal +5.6 +12.8 38.3 35.1 36.2 36.2 (170,000 cbm) 33.8 34.3 32.7 30.5 Wilmington 20.3 terminals 20.2 20.3 20.3 21.7 20.1
Slide 24: Realized divestments 2015
General Market Strategy Business Looking introduction trends execution performance ahead Realized divestments 2015 Number of Number of terminals plots of land 9 2 Total net cash Storage proceeds capacity 299 * 1.8 EUR million million cbm Note: * Up including to and including the divestment 2016 of F
Slide 25: Storage capacity under development
General Market Strategy Business Looking introduction trends execution performance ahead Storage capacity under development 25 Roadshow presentation HY1 2015
Slide 26: Storage capacity under development
General Market Strategy Business Looking introduction trends execution performance ahead Storage capacity under development 26 Roadshow presentation HY1 2015
Slide 27: 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 28: 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 29: Capital structure
General Market Strategy Business Looking introduction trends execution performance ahead 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 capitalization: SGD
Slide 30: 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 31: Net finance costs
General Market Strategy Business Looking introduction trends execution performance ahead Net finance costs Net finance costs HY1 2014 Net finance costs HY1 2015 In EUR million In EUR million Interest and dividend income 3.1 6.1 Finance costs -50.6 -53.7 Net finance costs -47.5 -47.6 Net interest bea
Slide 32: Solvency ratio
General Market Strategy Business Looking introduction trends execution performance ahead Solvency ratio Total equity and liabilities In EUR million 5,336 5,226 4,644 4,386 4,152 3,649 Net 64% 62% 58% Liabilities* 2,947 60% 2,585 56% 58% 1,997 55% 1,703 61% 56% 57% 44% 40% 42% 36% 38% Equity 45% 42%
Slide 33: Dividend growth
General Market Strategy Business Looking introduction trends execution performance ahead Dividend growth Dividend and EPS 2006-2014** In EUR 2.73 2.45 2.31 Dividend policy: 2.08 2.16 1.92 Barring exceptional 1.62 circumstances, the 1.31 intention is to pay 0.98 an annual cash dividend of 25-50% of t
Slide 34: Strategy execution: Operational leadership
General Market Strategy Business Looking introduction trends execution performance ahead Strategy execution Operational leadership
Slide 35: Execution of the business
General Market Strategy Business Looking introduction trends execution performance ahead Execution of the business Safety Efficiency Service improvement Committed to improving our Continuous focus on cost Always working on service personal and process safety management and capital improvements for o
Slide 36: 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 37: 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 employees and contractors worked by ow
Slide 38: Strategy execution: Customer leadership
General Market Strategy Business Looking introduction trends execution performance ahead Strategy execution Customer leadership
Slide 39: Business model
General Market Strategy Business Looking introduction trends execution performance ahead 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 number
Slide 40: 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 a reg
Slide 41: 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 137.8 36.2 174.0 Secondary competition 90.0 1
Slide 42: EBIT(DA) margin development
General Market Strategy Business Looking introduction trends execution performance ahead EBIT(DA) margin development EBIT(DA) margin In percent 49.6% 50 EBITDA margin 40 31.8% 30 EBIT margin 20 10 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 HY1 2015 Focus on creating more value from our
Slide 43: Contract duration
General Market Strategy Business Looking introduction trends execution performance ahead 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 1-3 year >
Slide 44: Business performance
Highlights Strategy Business Selective Looking Question & Appendix HY1 2015 execution performance growth ahead answers divisional results Business performance Analyst presentation HY1 2015 21 August 2015
Slide 45: Results HY1 2015
General Market Strategy Business Looking introduction trends execution performance ahead Results HY1 2015 Terminal Network * EBITDA*** 32.7 408 In million cbm In EUR million Occupancy Cash flows Rate ** Operating **** 91% 363 Average In EUR million * Terminal network is defined as the total availabl
Slide 46: Topics influencing HY1 2015 results
General Market Strategy Business Looking introduction trends execution performance ahead Topics influencing HY1 2015 results Geographical differences Currency effects 46 Roadshow presentation HY1 2015
Slide 47: HY1 2015 summary
General Market Strategy Business Looking introduction trends execution performance ahead HY1 2015 summary Revenues EBITDA* In EUR million In EUR million 0% +8% +11% -5% 649 647 701 408 385 367 HY1 2013 HY1 2014 HY1 2015 HY1 2013 HY1 2014 HY1 2015 Net profit** Occupancy rate*** In EUR million In perc
Slide 48: EBITDA development
General Market Strategy Business Looking introduction trends execution performance ahead EBITDA development EBITDA development In EUR million 206 202 202 196 194 189 187 185 183 180 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2014 2015 Note: EBITDA in EUR million excluding exceptional items and including joi
Slide 49: EBITDA per division
General Market Strategy Business Looking introduction trends execution performance ahead EBITDA per division EBITDA* Netherlands EMEA +11% +4% +14% 137.2 -17% 119.4 123.7 +11% 68.4 65.1 -5% 57.0 384.5 408.4 366.5 HY1 2013 HY1 2014 HY1 2015 HY1 2013 HY1 2014 HY1 2015 Asia Americas Non-allocated -5% +
Slide 50: EBITDA analysis
General Market Strategy Business Looking introduction trends execution performance ahead EBITDA analysis +3% 3.9 1.0 9.3 13.5 408.4 10.5 4.9 29.1 395.6 0.5 366.5 /Divestments Netherlands Asia Americas Other EMEA LNG FX-effect HY1 2014 HY1 2014 HY1 2015 /Greenfields Acquisitions /Pre-opex Against FX
Slide 51: HY1 2015 net result of joint ventures
General Market Strategy Business Looking introduction trends execution performance ahead HY1 2015 net result of joint ventures EBITDA* Netherlands EMEA -8% +8% 1.3 1.3 -52% +18% -25% +31% 1.2 20.2 56.9 55.4 9.6 11.3 42.4 HY1 2013 HY1 2014 HY1 2015 HY1 2013 HY1 2014 HY1 2015 Asia Americas Global LNG
Slide 52: HY1 2015 EBIT
General Market Strategy Business Looking introduction trends execution performance ahead HY1 2015 EBIT HY1 2015 HY1 2014 Delta In EUR million In EUR million In EUR million Group operating profit 229.3 193.6 + 35.7 (18%) Net result joint ventures 42.4 55.4 + 13.0 (31%) Incl. exceptional items EBIT in
Slide 53: 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% 85-90% 96 95 94 92 94 93 93 91 88 88 91 89 88 87 87 88 88 89 88 91 91 84 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ‘14 HY1
Slide 54: Occupancy rate per division
General Market Strategy Business Looking introduction trends execution performance ahead Occupancy rate per division Occupancy rate Netherlands EMEA +10pp +3pp +6pp -8pp 87% 93% 89% 91% 84% 81% 0pp +3pp 88% 88% 91% HY1 2013 HY1 2014 HY1 2015 HY1 2013 HY1 2014 HY1 2015 Asia Americas HY1 2013 HY1 2014
Slide 55: 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 -1% 286 361 367 363 2006 2007 2008 2009 2010 2011 2012 2013 2014 HY1 2015 Undiminished focus on f
Slide 56: Financial ratios HY1 2015
General Market Strategy Business Looking introduction trends execution performance ahead Financial ratio’s HY1 2015 CFROGA* ROCE** ROE*** In % In % In % 19.5% 17.3% 17.1% 14.6% 15.2% 13.8% 12.0% 11.0% 10.5% HY1 2013 HY1 2014 HY1 2015 HY1 2013 HY1 2014 HY1 2015 HY1 2013 HY1 2014 HY1 2015 * CFROGA is
Slide 57: Non-IFRS proportional information
General Market Strategy Business Looking introduction trends execution performance ahead Non-IFRS proportional information Proportionate EBITDA In EUR million 836 817 824 617 660 403 428 +14% 414 396 452 2010 2011 2012 2013 2014 HY1 2015 Cash Flow Return on Gross Assets Occupancy rate subsidiaries a
Slide 58: Divisional results
General Market Strategy Business Looking introduction trends execution performance ahead Divisional results
Slide 59: 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 69.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 Occupancy rate** Storage capacity In percent I
Slide 60: 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 31.1 28.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 Occupancy rate** Storage capacity In percent In milli
Slide 61: 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 73.3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 Occupancy rate** Storage capacity In percent In milli
Slide 62: Americas
General Market Strategy Business Looking introduction trends execution performance ahead Americas EBITDA* In EUR million 28.0 25.9 26.3 29.6 29.4 30.0 24.0 22.1 21.2 23.3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 Occupancy rate** Storage capacity In percent In m
Slide 63: Looking ahead
Highlights Strategy Business Selective Looking Question & Appendix HY1 2015 execution performance growth ahead answers Looking ahead Analyst presentation HY1 2015 21 August 2015
Slide 64: Topics influencing HY2 2015
General Market Strategy Business Looking introduction trends execution performance ahead Topics influencing HY2 2015 Asian Commissioning Impact market new capacity divestments 64 Roadshow presentation HY1 2015
Slide 65: 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 45-50% 20-25% 20-25% 5-7.5% 2.5% - 5% Contract duration ~0 - 5 years ~
Slide 66: 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 new capacity enhancements Vopak reconfirms it
Slide 67: Other topics
Highlights Strategy Business Selective Looking Question & Appendix HY1 2015 execution performance growth ahead answers Other topics Analyst presentation HY1 2015 21 August 2015
Slide 68: FX translation effects
General Market Strategy Business Looking introduction trends execution performance ahead FX translation effects HY1 2015 EBITDA transactional currencies FX translation-effect on HY1 2015 EBITDA In percent In EUR million USD SGD Netherlands EUR 24% Other EMEA 3.8 Asia 21.5 38% 15% Americas 3.4 Non-al
Slide 69: 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 69 Roadshow presentation HY1 2015
Slide 70: We have built our company over 400 years on trust and reliability
Highlights Strategy Business Selective Looking Question & Appendix HY1 2015 execution performance growth ahead We have built answers our company over 400 years on trust and reliability • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •