Royal Vopak NV · EURONEXT:VPK
Royal Vopak NV — FY2007 Earnings Presentation
76 slides from Royal Vopak NV's earnings presentation, March 2008
Slide 1: Annual Results 2007
Annual Results 2007 Professionals in liquid bulk logistics 1
Slide 2: Executive Board
Executive Board Jack de Kreij John Paul Broeders Frans de Koning 2
Slide 3: Agenda
Agenda ▢ Achievements 2007 ▢ Vopak: a robust company ▢ Business performance FY 2007 ▢ Divisions’ performance FY 2007 ▢ Outlook 3
Slide 4: 2007: A year of focus, progress and acceleration
2007: A year of focus, progress and acceleration Organic growth Strategic initiatives Growth projects Safety Rationalization of the business Organization Many plans in the pipeline Outlook 4
Slide 5: Process Safety & Quality Performance
Process Safety & Quality Performance LTIR Terminal Health Assessment 6 100% 5 80% 4 60% 3 40% 2 1 20% 0 0% 2002 2003 2004 2005 2006 2007 2004 2005 2006 2007 Spills 160 140 120 Increased management attention 100 80 60 40 20 0 2004 2005 2006 2007 5
Slide 6: 2007 EBIT Growth Mainly By Autonomous Growth
2007 EBIT Growth Mainly By Autonomous Growth EBIT Growth in 2007 Net Revenues 900 15% In mln EUR 800 700 85% 600 500 2003* 2004 2005 2006 2007 Autonomous growth New capacity growth Occupancy rates 100% 96% 92% 88% 84% 80% 2003* 2004 2005 2006 2007 * based on Dutch GAAP. Revenues in 2003 include tank
Slide 7: Growth By Expansions
Growth By Expansions Once again, more gained from our existing network in 2007 Vlaardingen Zhangjiagang Lanshan Ulsan Sydney site B Banyan ACS Antwerp Darwin Europoort Botlek Altamira SABtank Thai Tank Savannah (Al Jubail) Ownership of the companies in Estonia and Vietnam was increased to 100%. 7
Slide 8: Step Into The LNG Terminal Business - Fulfilled
Step Into The LNG Terminal Business - Fulfilled Operational in 2011 The launching customers: 8
Slide 9: Current Growth Projects
Current Growth Projects – delivering 4 centuries of future London Amsterdam Teesside Europoort Rotterdam Gothenburg Biodiesel Tallin LNG (R’dam) Zhangjiagang Savannah Botlek pit11 Bahamas Pakistan Korea Botlek pit19 Vlaardingen Al Jubail Lanshan Houston Antwerp Fujairah Caojing Altamira Thailand Ban
Slide 10: Rationalization
Rationalization Portfolio Business Rationalisation Sale Hemiksem Sale Dordrecht Sale Westwego Westwego Hemiksem Dordrecht 10
Slide 11: Many Projects In The Pipeline
Many Projects In The Pipeline Potential Projects Announced opportunities under study projects 11
Slide 12: Strategic Focus Vopak
Strategic Focus Vopak The execution of the strategy is on track Growth Leadership Customer Leadership Cost Efficient Operations Pursue and strengthen Attain service excellence leadership in key locations across the network Attain low cost position compared to key Invest in partnerships with Become p
Slide 13: Growth Leadership
Growth Customer Cost Efficient Leadership Leadership Operations Growth Leadership - investing in growth Excellence Leadership Enablers Design standards for new terminals Priority setting & focus Business development teams ? Capacity additions, in mln cbm ? Bahamas Bahamas Bahamas ? 26 ?? EOS ? 25 24
Slide 14: Focus On Clients
Growth Customer Cost Efficient Leadership Leadership Operations Focus On Clients - recognizable high-level Excellence services at every site Leadership Enablers Focus on key accounts Global service proposition Business intelligence network Customer Service Improvements 14
Slide 15: Efficiency Leadership
Growth Customer Cost Efficient Leadership Leadership Operations Efficiency Leadership - safe, sustainable and Excellence profitable Leadership Enablers Focus on safety performance Design standards for new terminals Process efficiency Standardization of service processes 15
Slide 16: Organization
Organization Professionalize organization and management Invest in people Performance management Recruitment and selection Management development programme Knowledge sharing within organization 16
Slide 17: Our Efforts Followed By Increasing Result
Our Efforts Followed By Increasing Result EBIT excl. exceptionals EBIT 2007: EUR 272.9 mln 300 290 280 270 260 250 240 230 220 210 2006 2007 Confident to reach our 2011 plan EBITDA EUR 475-550 mln one or two years earlier 17
Slide 18: Agenda
Agenda ▢ Achievements 2007 ▢ Vopak: a robust company ▢ Business performance FY 2007 ▢ Divisions’ performance FY 2007 ▢ Outlook 18
Slide 19: Vopak: A Robust Company
Vopak: A Robust Company Key topics VOPAK RELATION MARKET STRATEGIC WITH THE POSITION CLIENT 19
Slide 20: Market
Market Main Business Drivers Oil: Chemicals: • Product differentiation • Increasing demand for storage • Increasing geographical imbalances • Robust growth in developing between demand and supply markets • Liberalization of new markets • Build-up of new petrochemical complexes in Asia and Middle Eas
Slide 21: Vopak Strategic Position
Vopak Strategic Position Current Locations: Excellent Position New Investments Well Spread Capacity of new announced investments Focus on strategic Product Per Division locations diversification CEMEA Approx. OEMEA 50% of Asia capacity North America Latin America increase: LNG HUB Hub Other Oil Chem
Slide 22: Relation With The Client
Relation With The Client Changed Role >> Integral Part of Supply Chain New oil players – national companies: Petrochina, Sinopec, Petrobras, Gazprom Long-term contracts are increasing: Focus on relations Revenues Contract > 3 Years 60% 40% 20% 0% 2005 2006 2007 22
Slide 23: Conclusion
Conclusion Key topics VOPAK RELATION MARKET STRATEGIC WITH THE POSITION CLIENT Vopak: more robust 23
Slide 24: Agenda
Agenda ▢ Achievements 2007 ▢ Vopak: a robust company ▢ Business performance FY 2007 ▢ Divisions’ performance FY 2007 ▢ Outlook 24
Slide 25: Market Developments
Market Developments Oil: Chemicals: • Product differentiation • Increasing demand for storage • Increasing geographical imbalances • Robust growth in developing markets between demand and supply • Liberalization of new markets • Build-up of new petrochemical complexes in Asia and Middle East • High
Slide 26: Strategic Focus
Strategic Focus DONE IN PROGRESS TO BE EXPLORED 2003-2007 2008-2010 TANK TERMINAL Divestments non-core activities STRATEGY Expansions: Expansions: Sebarok, Europoort, Fujairah, Gothenburg, Banyan REVITALIZE OIL Estonia, Malmö, Al Greenfield: Jakarta GROWTH Jubail, Sydney STRATEGY Greenfields: Darwin
Slide 27: Divestments 2003-2007
Divestments 2003-2007 2003 Chemgas Shipping VO Clipper Shipholdings Dutch P&I Services & Dutch Shipping Defence Dockwise Transport 2004 Chemical Tankers Fluvia (Shipping Switzerland) and Warehousing 2005 Total Totalannual annual Vegoils Shipping (Germany and the Netherlands) revenues: revenues: Mine
Slide 28: Net Revenues / EBIT FY 2007
Net Revenues / EBIT FY 2007 | a enna age ; ; ce ae = www.vopak.com 28
Slide 29: Robust Financial Performance
Robust Financial Performance FY 2007: EBIT increased by 24% In EUR millions FY06 FY07 ∆% Net Revenues 778.1 853.0 10% EBIT 220.9 272.9 24% Net Profit* 122.2 163.5 34% EPS (EUR) 1.96 2.62 34% All figures are excluding exceptional items * attributable to holders of ordinary shares 29
Slide 30: EBIT incl. Exceptionals Increased By 35%
EBIT incl. Exceptionals Increased By 35% In EUR millions FY06 FY07 ∆% Net Revenues 778.1 853.0 10% EBIT 216.6 292.2 35% Net Profit* 129.4 181.1 40% EPS (EUR) 2.08 2.90 39% All figures are including exceptional items * attributable to holders of ordinary shares 30
Slide 31: Exceptional Items in 2007
Exceptional Items in 2007 In EUR millions Result of divestments 21.7 Other - 2.4 Exceptional items 19.3 31
Slide 32: Net Profit
Net Profit . www.vopak.com 32
Slide 33: Net Profit FY 2007 Increased By 40%
Net Profit FY 2007 Increased By 40% In EUR millions FY06 FY07 ∆% Net Revenues 778.1 853.0 10% EBIT 216.6 292.2 35% Finance Income & Expenses -44.2 -42.9 3% Tax -25.5 -51.2 101% Minority Interests -15.0 -15.2 1% Net Profit* 129.4 181.1 40% EPS 2.08 2.90 39% All figures are including exceptional items
Slide 34: Net Financing Costs
Effective Access to Financing Sources Net Financing Costs In EUR millions FY06 FY07 Interest and dividend income 6.8 7.0 Financing costs -51.0 -49.9 Net financing costs -44.2 -42.9 34
Slide 35: Effective Tax Rate FY 2007
Effective Tax Rate FY 2007 Effective Tax Rate € In EUR millions FY07 FY07 % FY06 % Tax -51.2 20.5% 20.8%* Effective Tax Rate -51.2 20.5% 14.8%** * excl. exceptional movements in prior-year taxes ** incl. exceptional movements in prior-year taxes Changes in tax rates: Tax rates 2006 2007 As of 2008 S
Slide 36: 5 Years Vopak
5 Years Vopak | www.vopak.com 36
Slide 37: Robust Performance: 2003-2007
Robust Performance: 2003-2007 In EUR millions Net Revenues Occupancy rates 900 100% 850 96% 800 92% 750 88% 700 84% 650 600 80% 2003* 2004 2005 2006 2007 2003* 2004 2005 2006 2007 EBIT excl. exceptionals ROCE 300 30 250 25 200 20 150 15 10 100 2003* 2004 2005 2006 2007 2003* 2004 2005 2006 2007 Net
Slide 38: Revenues 2003 vs 2007
Revenues 2003 vs 2007 In EUR millions 900,0 41% 800,0 700,0 853.0 600,0 500,0 749.6 400,0 300,0 200,0 100,0 0,0 Revenues 2003 Divestments New capacity & Revenues 2007 improved margins Revenues 2003 are based on Dutch GAAP 38
Slide 39: EBIT excl. Exceptionals 2003 vs 2007
EBIT excl. Exceptionals 2003 vs 2007 In EUR millions 300,0 96% 250,0 200,0 272.9 150,0 100,0 148.3 50,0 0,0 EBIT 2003 Divestments New capacity & EBIT 2007 improved margins EBIT 2003 are based on Dutch GAAP 39
Slide 40: Sources and Uses of Cash
Sources and Uses of Cash | www.vopak.com 40
Slide 41: Sources and Uses of Cash
Sources and Uses of Cash FY06 FY07 Net Cash Flow -64.8 25.5 EUR (mln) 305.2 -370.0 686.1 -660.6 800 700 Dividends 600 Proceeds from Proceeds from 500 interest-bearing interest-bearing 400 loans loans Dividends Investments 300 Divestments Divestments 200 Investments 100 Operations Financing Operation
Slide 42: Operational Net Cash Flow
Cash Source Operational Net Cash Flow FY 2007: increased by 17% Operations Sources Uses EUR (mln) 300 250 263.2 200 150 225.3 100 50 0 17% 2006 2007 42
Slide 43: Investments
Cash Use Investments* Investments FY 2007: increased by 67% Sources Uses EUR (mln) 500 400 300 445.7 200 267.6 100 0 67% 2006 2007 * including Maintenance and SHE CAPEX 43
Slide 44: Step Up in Dividends
Cash Use Step Up in Dividends Dividends Sources Uses Proposed dividend in 2007 amounts to EUR 0.95 per ordinary share Proposed dividend 1 0,8 0,6 0.95 0.75 0,4 0.60 0.50 0.50 0,2 0 2003 * 2004 * 2005 2006 2007 * optional in cash or ordinary shares 44
Slide 45: Total investments
Total investments | www.vopak.com 45
Slide 46: Total Investments 2003-2007
Total Investments 2003-2007 446 268 188 146 151 2003* 2004 2005 2006 2007 * based on Dutch GAAP 46
Slide 47: Investing In Growth
Investing In Growth 2008 and onwards Group companies and Around joint ventures € 450M € 1.6B Total investments to be spent from 2008+ Vopak share 2008+ Approved & Under Construction Projects Approved & Under Construction Projects Yearly Sustaining Capex +/- € 100M 47
Slide 48: Focus On Growth
Focus On Growth Capacity will be increased by more than 2.7M cbm by the end of 2009 2006 Capacity 21,224,300 cbm 2007 New capacity on stream 878,000 cbm 2007 Divestments 268,100 cbm 2007 Capacity 21,834,200 cbm 2008 & 2009 +/- 2.7M cbm Gate 0.5M cbm Bahamas 3.0M cbm Total > 28.0M cbm 48
Slide 49: Expansion in progress: Europoort Terminal
Expansion in progress Europoort Terminal Division: OEMEA Start of operations: Q1 2008 Capacity: expansion 200,000 cbm Product focus: oil Vopak Terminal Europoort 49
Slide 50: Expansion in progress: Teesside Terminal
Expansion in progress Teesside Terminal Division: CEMEA Start of operations: Q3/Q4 2008 Capacity: expansion 40,000 cbm Product focus: ethanol Vopak Teesside Terminal 50
Slide 51: Expansion in progress: Zhangjiagang Terminal
Expansion in progress Zhangjiagang Terminal Division: Asia Start of operations: Q2/Q3 2008 Capacity: expansion 85,000 cbm Product focus: chemicals Vopak China – Zhangjiagang Terminal 51
Slide 52: Expansion in progress: Banyan Terminal
Expansion in progress Banyan Terminal 371,800 cbm 165,000 cbm 320,000 cbm 397,500 cbm 1.25 M 2006 2007 2008 2009 52
Slide 53: Vopak Jakarta Terminal
Vopak Jakarta Terminal Jetty Undersea pipelines Tankfarm Division: Asia Start of operations: Q4 2009 Capacity: 250,000 cbm Product focus: oil ‘Artist impression of Vopak Jakarta Terminal’ 53
Slide 54: New terminal – under construction
New terminal – under construction Gate Terminal Division: LNG Start of operations: 2H 2011 Capacity: 540,000 cbm Product focus: LNG ‘Artist impression of Gate Terminal’ 54
Slide 55: Strategic Finance
Strategic Finance | www.vopak.com 55
Slide 56: Strategic Finance: Sufficient Flexibility
Strategic Finance: Sufficient Flexibility Net debt : EBITDA ratio 2007 1.71 2006 1.61 2005 1.76 2004 2.20 2003* 2.42 2002* 2.49 ׀ 0 0.5 1 1.5 2 2.5 3 3.5 3.75 4 Maximum Ratio under US PP Maximum Ratio under other loans and syndicated revolving credit facility * based on Dutch GAAP 56
Slide 57: Strategic Finance: Solid Equity Position
Strategic Finance: Solid Equity Position Shareholders’ equity EUR (mln) Net Debt 900 810 785 800 671 700 619 604 625 600 521 500 509 504 496 472 500 400 300 200 2002* 2003* 2004** 2005 2006 2007 * based on Dutch GAAP 57 ** Restructuring preference shares: -50.3 and IFRS adjustment: -44.7
Slide 58: Other projects: Accounting/Financial reporting implications
Other projects: Accounting/Financial reporting implications 58
Slide 59: Gate Terminal – impact on Vopak Financial Statement
Gate Terminal – impact on Vopak Financial Statement Equity: 42.5% Capacity: 0.5M cbm Project Phase Operations 2007-2011 beyond 2011 Joint ventures Joint Jointventures ventures Balance sheet and associates and associates and associates Result of jv based Profit & Loss Only pre-OPEX on equity method E
Slide 60: Vopak Terminal Bahamas – impact on Vopak Financial Statement
Vopak Terminal Bahamas – impact on Vopak Financial Statement Equity: 20% Capacity: 3M cbm Joint ventures Balance sheet and associates Result of jv Profit & Loss (equity method) + Management fee Acquisition price Cash Flow* Dividend * First 5 years no dividend expected. Operational free cash flow wil
Slide 61: Pakterminal – impact on Vopak Financial Statement
Pakterminal – impact on Vopak Financial Statement Capacity: 0.4M cbm Before 50% Pakterminal transaction date EOS Pakterminal EOS (50%) (100%) (Share) Joint ventures Joint ventures Balance sheet 100% consolidated and associates and associates Result of jv Result of jv Profit & Loss 100% consolidated
Slide 62: Barging – impact on Vopak Financial Statement
Barging – impact on Vopak Financial Statement Before After transaction date transaction date (100%) (50%) Joint Jointventures ventures Balance sheet 100% consolidated and associates and associates Result of jv Profit & Loss 100% consolidated (equity method) Result of Sale Cash Flow 100% consolidated
Slide 63: SUMMARY: 2007 Another Strong Year for Vopak
SUMMARY: 2007 Another Strong Year for Vopak Revenues in billion EUR; all figures are excl. exceptional items and incl. joint ventures Revenues EBITDA margin EBIT margin ROCE 6 50% 45% 5 40% 35% 4 30% 3 25% 20% 2 15% 10% 1 5% 0 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 63
Slide 64: Agenda
Agenda ▢ Achievements 2007 ▢ Vopak: a robust company ▢ Business performance FY 2007 ▢ Divisions’ performance FY 2007 ▢ Outlook 64
Slide 65: All Divisions Contributed to 10% Increase in Net Revenues
All Divisions Contributed to 10% Increase in Net Revenues North America OEMEA 165.1 193.4 128.2 130.4 Asia 121.4 136.8 2% 17% 06 07 06 07 13% 06 07 CEMEA 324.2 296.6 Latin America 61.8 63.7 3% 06 07 9% 06 07 65
Slide 66: FY 2007: EUR 52 mln increase in EBIT
FY 2007: EUR 52 mln increase in EBIT* OEMEA 79.7 North America 62.7 Asia 31.1 74.9 78.8 25.5 22% 27% 06 07 06 07 5% 06 07 CEMEA 89.3 Latin America 60.7 21.1 Other 19.9 -22.8 -27.1 6% 47% 19% 06 07 06 07 06 07 *excluding exceptional items 66
Slide 67: Division: Chemicals EMEA
Division: Chemicals EMEA “Improved results with existing capacity” EBIT* (mln) 25 23.5 22.5 22.4 20.9 20 17.6 15.7 14.3 15 13.1 2006 2007 10 5 0 60% 64% 28% 43% Q1 Q2 Q3 Q4 * excluding exceptional items 67
Slide 68: Division: Oil EMEA
Division: Oil EMEA “Effective response to increasing market demand” EBIT* (mln) 25 21.3 20.6 19.3 18.5 20 17.8 16.3 15.4 15 13.2 2006 10 2007 5 0 31% 34% 8% 40% Q1 Q2 Q3 Q4 * excluding exceptional items 68
Slide 69: Division: Asia
Division: Asia “Continuing growth with good results” EBIT* (mln) 25 19.2 20.0 19.8 19.9 19.2 19.9 20 18.8 16.9 15 2006 2007 10 5 0 14% 0.1% 6% 4% Q1 Q2 Q3 Q4 * excluding exceptional items 69
Slide 70: Division: North America
Division: North America “Focus on improving results is bearing fruit” EBIT* (mln) 25 20 15 2006 10 8.3 2007 7.2 7.7 7.2 7.9 6.7 6.2 5.4 5 0 7% 54% 24% 10% Q1 Q2 Q3 Q4 * excluding exceptional items 70
Slide 71: Division: Latin America
Division: Latin America “Continuing steady performance” EBIT * (mln) 25 20 15 2006 10 2007 5.4 5.1 5.0 5.4 5.5 5.4 5.1 5 4.1 0 6% 8% 34% 6% Q1 Q2 Q3 Q4 * excluding exceptional items 71
Slide 72: Agenda
Agenda ▢ Achievements 2007 ▢ Vopak: a robust company ▢ Business performance FY 2007 ▢ Divisions’ performance FY 2007 ▢ Outlook 72
Slide 73: Outlook EBIT 2008
Outlook EBIT 2008 2008 (March 7, 2008) Vopak expects Group operating profit excluding exceptional items to increase around 10% in 2008 (2007: EUR 272.9 million). As a consequence of the commissioning of the current expansion projects in the coming years Vopak expects to achieve the lower end of its
Slide 74: Outlook Summary
Outlook Summary Guidance Outlook 5 year plan EUR (mln) FY 2006 FY 2007 FY 2008 (2011) Long-term EBITDA* 309.8 388.8 475-550 Updated to EBIT** 220.9 272.9 increase 2009 / 2010 around 10% ROCE 19.4% 25.1% Around 16% Bearing Bearingininmind mind substantial investments substantial investments iningreen
Slide 75: Forward-looking statement
Forward-looking statement This presentation contains statements of a forward-looking nature, based on currently available plans and forecasts. Given the dynamics of the markets and the environments of the 30 countries in which Vopak renders logistics services, the company cannot guarantee the accura
Slide 76: Thank you for your attention!
Thank you for your attention! 76