Royal Vopak NV · EURONEXT:VPK
Royal Vopak NV — FY2006 Earnings Presentation
53 slides from Royal Vopak NV's earnings presentation, March 2007
Slide 1: Professionals in liquid bulk logistics
Professionals in liquid bulk logistics 1
Slide 2: Annual Results 2006
Annual Results 2006 = Vopak
Slide 3: Executive Board
Executive Board Jack de Kreij John Paul Broeders Frans de Koning 3
Slide 4: Agenda
Agenda ▢ Achievements 2006 ▢ Mission, Strategy, Future ▢ Oil products’ trade flows 2010 ▢ Business performance FY 2006 ▢ Performance divisions FY 2006 ▢ Outlook 4
Slide 5: 2006: A Good Year for Vopak
2006: A Good Year for Vopak EBIT 250 Net Revenues 200 800 150 700 100 2005 2006 600 500 2005 2006 EPS Net Profit 3 160 2 130 1 100 2005 2006 70 2005 2006 5
Slide 6: Commercial Excellence
Commercial Excellence Income from rendering of services core activities 400 In mln EUR 375 350 325 300 275 250 1H 2H 1H 2H 1H 2H 2004 2005 2006 Average occupancy rates 95% 90% 85% 80% 2004 2005 2006 6
Slide 7: Operational Excellence
Operational Excellence LTIR 6 5 4 3 2 1 0 02 03 04 05 06 Spills 120 100 80 60 40 20 0 04 05 06 7
Slide 8: Commissioned Greenfields, Expansions and Acquisitions
Commissioned Greenfields, Expansions and Acquisitions Banyan Caojing Vietnam Chile Darwin Ulsan Alemoa Barranquilla Al Jubail 2006: stopped merger process Vopak ITC 8
Slide 9: Confirmed Projects
Confirmed Projects London Amsterdam Europoort Rotterdam Biodiesel LNG (R’dam) Botlek Zhangjiagang Lanshan Antwerp Fujairah Caojing Altamira Banyan Biodiesel Banyan Venezuela Sebarok Sydney Announced investigation Construction 9
Slide 10: Future Gate Terminal Viewed from the East
Future Gate Terminal Viewed from the East LNG storage & process LNG channel 10
Slide 11: EBITDA Range Reached
EBITDA Range Reached € 350 mln € 275 mln 2004 2005 2006 11
Slide 12: Agenda
Agenda ▢ Achievements 2006 ▢ Mission, Strategy, Future ▢ Oil products’ trade flows 2010 ▢ Business performance FY 2006 ▢ Performance divisions FY 2006 ▢ Outlook 12
Slide 13: A Challenging Environment
A Challenging Environment Organisation Profitability Market Growth + Market Position Customer Perception 13
Slide 14: Vopak's Mission
Vopak’s Mission To give inspiration and a sense of direction for the future. Vopak aspires to be the world’s greatest terminal company for liquid chemicals, oil products and gasses, admired by its strategic partners for an outstanding corporate reputation. • Dedicated to our customer success by serv
Slide 15: Strategic Focus Vopak
Strategic Focus Vopak 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 preferred provider competitors strategic cu
Slide 16: Strategy Targets
Strategy Targets Cost Efficient Grow faster than Storage provider Operations the market of choice & Profitable Growth 16
Slide 17: Agenda
Agenda ▢ Achievements 2006 ▢ Mission, Strategy, Future ▢ Oil products’ trade flows 2010 ▢ Business performance FY 2006 ▢ Performance divisions FY 2006 ▢ Outlook 17
Slide 18: Oil Developments
Emerging economies in China and India Oil Developments Middle East Major Refining Projects Kuwait Shuaiba Intensification of geographical 300KBD Iran Various imbalances between demand 400KBD and supply Saudi Arabia Yanbu Product differentiation: 400KBD low sulphur levels in Gasoline, Saudi Diesel an
Slide 19: Global Naphtha Net Trade
Global Naphtha Net Trade The major changes in Naphtha trade by 2010 are an increasing Middle East surplus and deepening Asia deficit. 2010 Net trade flow Impact on Vopak Vopak’s Projects Increased need for storage Middle Singapore Banyan Terminal well East and Asia positioned to benefit from H
Slide 20: Global Gasoline Net Trade
Global Gasoline Net Trade Europe, as the main surplus region in 2010, is likely to export gasoline to Asia and America. 2010 Net trade flow Key new net trade flow in 2010 Impact on Vopak Vopak’s Projects Increased need for blending New Amsterdam Terminal planned Increased need for storage, bot
Slide 21: Global Jet/Kerosene Net Trade
Global Jet/Kerosene Net Trade In 2010, the Middle East will become a dominant global supplier of jet/kero. It is likely to be the major source of supply to growing European deficit. 2010 Net trade flow Impact on Vopak Vopak’s Projects Increased need for storage Expansion at Europoort Terminal
Slide 22: Global Fuel Oil Net Trade
Global Fuel Oil Net Trade Europe’s imports from the FSU will be sustained, possibly at the expense of FSU exports to North America. 2010 Net trade flow Impact on Vopak Vopak’s Projects Increased need for blending Expansion at Europoort Terminal Increased need for storage Expansion at Sebarok
Slide 23: Agenda
Agenda ▢ Achievements 2006 ▢ Mission, Strategy, Future ▢ Oil products’ trade flows 2010 ▢ Business performance FY 2006 ▢ Performance divisions FY 2006 ▢ Outlook 23
Slide 24: Summary of Market Developments
Summary of Market Developments Oil: Chemicals: • Product differentiation • Increasing demand for storage • Increasing geographical • Build-up of new petrochemical imbalances between demand complexes in Asia and and supply Middle East • Liberalisation of new markets LNG: Bio fuels: • More focus on LN
Slide 25: 2006 In Line with Ambitious Outlook
2006 In Line with Ambitious Outlook EUR (mln) FY 05 FY 06 Outlook/Guidance EBITDA* 253.5 309.8 EUR 275-350 EBIT** 179.7 220.9 around EUR 220 Net cash flow from 164.3 225.3 operating activities EPS** (EUR) 1.61 1.96 ↑ around 10% per annum ↑ 16.8% ↑ 21.7% CAPEX (EUR mln) 160.3 232 around EUR 250 Capac
Slide 26: Robust Financial Performance
Robust Financial Performance FY 2006: 27% EBIT Increase EUR (mln) FY 05 FY 06 ∆% Net Revenues 683.6 778.1 14% EBIT 170.7 216.6 27% Net Profit* 90.2 129.4 43% EPS (EUR) 1.46 2.08 42% ROCE (%) 16.5 19.4 Net Revenues 800 700 600 500 2003 2004 2005 2006 All figures are including exceptional items * attr
Slide 27: All Divisions Contributed to 14% Increase in Net Revenues
All Divisions Contributed to 14% Increase in Net Revenues North America OEMEA 143.7 165.1 118.2 128.2 Asia 121.4 8% 15% 97.5 05 06 05 06 25% 05 06 CEMEA 263.9 296.6 Latin America 51.9 61.8 19% 05 06 12% 05 06 27
Slide 28: FY 2006: 23% EBIT Increase excl. Exceptionals
FY 2006: 23% EBIT Increase excl. Exceptionals EUR (mln) FY 05 FY 06 ∆% EBITDA 262.4 314.2 20% EBIT 179.7 220.9 23% Net Profit* 99.5 122.2 23% EPS (EUR) 1.61 1.96 22% EBIT 260 220 180 140 100 2003 2004 2005 2006 All figures are excluding exceptional items * attributable to holders of ordinary shares
Slide 29: FY 2006: 41.2 mln Increase in EBIT
FY 2006: 41.2 mln Increase in EBIT* OEMEA 62.7 North America 57.6 Asia 74.9 20.6 25.5 59.9 24% 9% 05 06 05 06 25% 05 06 CEMEA 60.7 Latin America 44.6 19.9 Other 16.3 -19.3 -22.8 22% 36% 18% 05 06 05 06 05 06 *EBIT excluding exceptional items 29
Slide 30: Strong Earnings Delivery
Strong Earnings Delivery EPS: increase by 42% EUR (mln) FY 05 FY 06 ∆% EBIT** 170.7 216.6 27% Financing charges - 39.3 - 44.2 12% Tax - 25.6 - 25.5 0.4% Minority interests - 12.6 -15.0 19% Net profit*** 90.2 129.4 43% EPS** (EUR) 1.46 2.08 42% EPS 2,5 2 1,5 1 2003* 2004 2005 2006 * based on Dutch GA
Slide 31: Strategic Finance: Sufficient Flexibility
Strategic Finance: Sufficient Flexibility Net debt : EBITDA ratio 2007 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 31
Slide 32: US Private Placements
US Private Placements • USD 400 mln, GBP 35 mln, EUR 8 mln • Average remaining term of 4.3 years • Maximum remaining term is 10 years • The ratio net debt to EBITDA may not exceed: – 3.00 (July 1, 2004 – June 30, 2007) – 2.75 (from July 1, 2007) Vopak Debt Structure Revolving Amendment Credit Facili
Slide 33: Strategic Finance: Solid Equity Position
Strategic Finance: Solid Equity Position Shareholders’ equity EUR (mln) Net Debt 800 700 600 500 400 300 496 785 521 618 500 509 604 472 671 504 200 2002* 2003* 2004 ** 2005 2006 * based on Dutch GAAP 33 ** Restructuring preference shares: -50.3 and IFRS adjustment: -44.7
Slide 34: Sources and Uses of Cash
Sources and Uses of Cash EUR (mln) 2005 2006 350 +43.9 -64.8 Proposed 300 Dividends Dividends 250 Divestments Divestments 200 Investments Investments 150 100 Operations Operations 50 Financing 0 Financing Sources Uses Sources Uses 34
Slide 35: Operational Net Free Cash Flow
Cash Source Operational Net Free Cash Flow 2006: increased by 37% EUR (mln) 250 200 225.3 150 164.3 100 50 37 % 0 2005 2006 35
Slide 36: Investments
Investments* 2006: increased by 43% Worldwide capacity increased by 783.300 cbm in 2006 EUR (mln) 300 200 267.6 187.5 100 0 43 % 2005 2006 * including Maintenance and SHE CAPEX 36
Slide 37: Investing in Asset Reliability & Growth
Investing in Asset Reliability & Growth Optimising existing capacity Expansion at existing terminals Acquisitions, mergers and joint ventures New terminals at new locations Growth Maintenance & SHE CAPEX Development of concepts for new products 37
Slide 38: Step Up in Dividends
Step Up in Dividends 2006: increased by 25% • Proposed dividend in 2006 amounts to EUR 0.75 per ordinary share. This reflects 36% of EPS (2005: 41%). 1,00 Proposed dividend 0,75 0,50 0.75 0.60 0.50 0.50 0.50 0,25 0,00 2002 2003* 2004* 2005 2006 * Optional in cash or ordinary shares 38
Slide 39: SUMMARY: A Strong Year for Vopak
SUMMARY: A Strong Year for Vopak 2006 FINANCIAL PERFORMANCE • Strong environment and operating performance • Net Revenues of EUR 778.1 mln (+14%) • EBIT excluding exceptionals of EUR 220.9 (+23%) • EPS excluding exceptionals of EUR 1.96 (+22%) STRATEGIC FINANCE • US Private Placement programme • Str
Slide 40: Agenda
Agenda ▢ Achievements 2006 ▢ Mission, Strategy, Future ▢ Oil products’ trade flows 2010 ▢ Business performance FY 2006 ▢ Performance divisions FY 2006 ▢ Outlook 40
Slide 41: Division: Chemicals EMEA
Division: Chemicals EMEA “Exploiting new market trends” EBIT* (mln) 20 18 16 14 12 2005 10 2006 8 6 4 10,2 13,1 10,7 14,3 12,9 17,6 10,8 15,7 2 0 28% 34% 36% 45% Q1 Q2 Q3 Q4 * excluding exceptional items 41
Slide 42: Division: Oil EMEA
Division: Oil EMEA “Enlarge hub functions” EBIT* (mln) 20 18 16 14 12 2005 10 8 2006 6 4 13,4 16,3 14,3 15,4 15,7 17,8 14,2 13,2 2 0 22% 8% 13% 7% Q1 Q2 Q3 Q4 * excluding exceptional items 42
Slide 43: Division: Asia
Division: Asia “Plan, build, operate” EBIT* (mln) 20 18 16 14 12 2005 10 8 2006 6 14,9 20,0 18,8 16,8 19,2 13,8 16,9 14,4 4 2 0 22% 34% 31% 14% Q1 Q2 Q3 Q4 * excluding exceptional items 43
Slide 44: Division: North America
Division: North America “Reorient and optimise” EBIT* (mln) 20 18 16 14 12 2005 10 8 2006 6 4 5,4 6,2 5,8 7,2 4,5 6,7 4,9 5,4 2 0 49% 10% 15% 24% Q1 Q2 Q3 Q4 * excluding exceptional items 44
Slide 45: Division: Latin America
Division: Latin America “Network expansion step by step” EBIT * (mln) 20 18 16 14 12 2005 10 8 2006 6 4 4,0 5,4 3,5 5,0 3,8 4,1 5,0 5,4 2 0 35% 43% 8% 8% Q1 Q2 Q3 Q4 * excluding exceptional items 45
Slide 46: SUMMARY
SUMMARY 2006: All divisions contributed to the 23% increase in EBIT* CEMEA OEMEA 70 70 60 60 50 50 40 40 30 30 2003 2004 2005 2006 2003 2004 2005 2006 Asia 80 70 60 50 40 2003 2004 2005 2006 North America Latin America 30 25 25 20 20 15 15 10 10 2003 2004 2005 2006 2003 2004 2005 2006 *excluding exc
Slide 47: Agenda
Agenda ▢ Achievements 2006 ▢ Mission, Strategy, Future ▢ Oil products’ trade flows 2010 ▢ Business performance FY 2006 ▢ Performance divisions FY 2006 ▢ Outlook 47
Slide 48: Vopak's Capacity Growth
Vopak’s Capacity Growth 24 ? ? X 1,000,000 cbm 23 ? 22 Addition 21 Capacity 20 19 2005 2006 2007 2008 2009 • Successful improvement steps on road to excellence • Further growth continues worldwide • Pipeline well-filled with potential and ongoing projects 48
Slide 49: CAPEX 2002 – 2006 & Outlook 2007
CAPEX 2002 – 2006 & Outlook 2007** (In)Tangible fixed assets 450 - 550 232 160.3 124.9 97 106.5 2002* 2003* 2004 2005 2006 2007 * based on Dutch GAAP 49 **including Maintenance and SHE CAPEX
Slide 50: Outlook EBIT 2007
Outlook EBIT 2007 2007 (March 9, 2007) Short-term outlook • Vopak will globally add more than 1.7 million cbm in storage capacity during 2007 and 2008 • Vopak expects total capital expenditures between EUR 450 million and EUR 550 million in 2007, including expenditures for maintenance, safety and en
Slide 51: Outlook Summary
Outlook Summary Guidance Outlook 5 year plan EUR (mln) FY 2005 FY 2006 FY 2007 (2011) Long-term EBITDA* 253.5 309.8 475-550 EBIT** 179.7 220.9 At least 10% higher CAPEX 160.3 232 450-550 ROCE 16.5% 19.4% Around 16% Baring Baringininmind mind substantial substantialinvestments investments iningreenfi
Slide 52: 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 53: Thank you for your attention!
Thank you for your attention! 53