Royal Vopak NV · EURONEXT:VPK
Royal Vopak NV — Non-Deal Roadshow (May 2020)
44 slides from Royal Vopak NV's roadshow presentation, May 11, 2020
Slide 1: Storing vital products with care
Storing vital products with care Q1 2020 – Roadshow Presentation Royal Vopak
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
Slide 3: Full year 2019 key messages
Full year 2019 key messages Strong EBITDA and significant increase in earnings per share Execution of our strategy with portfolio transformation and growing new digital capabilities Continued growth investments for 2020 and EUR 100 million share buyback program Portfolio well-positioned for
Slide 4: External developments
External developments 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 potential i
Slide 5: Business environment update
Business environment update Long-term sustainable portfolio, well positioned for future opportunities Chemicals Focus on operational performance Oil products IMO 2020 capacity delivered Long-term growth in global Oil hubs: short-term weakness from demand for chemicals backwardated markets struct
Slide 6: Vopak at a glance
Vopak at a glance At year-end 2019 Number of terminals Number of countries Storage capacity* In million cbm 66 23 34.0 37.0 34.4 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 6.2 5,559 0.34 0,3
Slide 7: Robust Vopak strategy
Robust Vopak strategy Leadership in 5 pillars with clear strategy execution Q1 2020 Roadshow Presentation 7
Slide 8: Strategic terminal types
Strategic terminal types Industrial terminals Gas terminals Chemical terminals Oil terminals As petrochemical clusters are becoming Vopak is expanding its gas storage – in Demand for chemicals storage is growing. Oil import, distribution and hub terminals larger and more complex, logistics response
Slide 9: Portfolio transformation
Portfolio transformation Shift towards industrial terminals, chemicals and gas terminals Key projects 2019 Proportionate revenue per product ~10% ~10% 10-15% Gas • SPEC LNG - Colombia ~15% 20-25% 25-30% Gas • ETPL LNG - Pakistan Industrial terminals 35-40% • RIPET LPG - Canada 25-30% 25-30% Chemical
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
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 1.0 0.5 0.34 0.0 2010 2011 2012 2013 2014 2015 201
Slide 12: UN Sustainable Development Goals (SDGs)
UN Sustainable Development Goals (SDGs) 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 • Reducing our environmental footprint (daily) energy and cleaner fuels and
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
Slide 14: 2017-2019 strategy delivered
2017-2019 strategy delivered Transformative portfolio changes and digital strategy is being rolled out EUR 1 billion growth investment program in line with Capture growth long-term market developments Spend EUR 750 million on sustaining and Sustaining and service improvement capex programs servi
Slide 15: Q1 2020 Key messages
Q1 2020 Key messages Prudent COVID-19 response by taking good care of people working at our terminals and supporting society by storing vital products with care - all 66 terminals are operational Good financial performance with robust balance sheet and strong liquidity position Focus on short-
Slide 16: COVID-19 update
COVID-19 update We are in control and our governance structures are functioning well. We continuously monitor the developments and remain alert. We will manage this crisis to our best ability to ensure we protect our people and support society by storing vital products with care. Business-contin
Slide 17: Q1 2020 vs Q1 2019 EBITDA
Q1 2020 vs Q1 2019 EBITDA EBITDA - post divestments - increased by EUR 3 million 214.6 0.1 2.7 0.2 17.2 1.5 4.1 9.5 3.7 200.2 197.5 Q1 2019 FX-effect Divested Adjusted Americas LNG Europe & China & Asia & Global Q1 2020 terminals Q1 2019 Africa North Asia Middle East functions, corporate activities
Slide 18: Q1 2020 vs Q4 2019 EBITDA
Q1 2020 vs Q4 2019 EBITDA Resilient performance of the portfolio including growth project performance compensation one-off items and divestments 0.8 4.2 6.1 204.8 200.9 4.9 1.2 2.7 6.7 200.2 2.2 Q4 2019 FX-effect Divestments Adjusted Americas LNG Europe & Asia & China & Global Q1 2020 Q4 2019 Africa
Slide 19: Divisional segmentation
Divisional segmentation Americas and LNG reflect growth projects; Asia & Middle East and China benefit from increased occupancy rates; Europe & Africa maintenance and divestments Americas Asia & Middle East China & North Asia 92 92 87 83 79 89 91 90 88 80 82 73 74 71 64 43.2 47.6 81.9 71.4 70.8 85.0
Slide 20: Non-IFRS proportional information
Non-IFRS proportional information Proportional consolidated information provides transparency considering increase joint venture contribution relative to subsidiaries EBITDA Occupancy rate Q1 2020 occupancy per division In EUR million In percent – subsidiaries only In percent – subsidiaries only IFR
Slide 21: Cash flow overview
Cash flow overview Cash momentum driven by divestment and capital repayment Q1 2020 Q1 2019 In EUR million In EUR million 171 143 141 135 132 159 154 2 84 5 57 53 84 101 121 6 -26 CFFO Tax & other CFFO Sustaining, FCF Divestments Growth Other Free Cash CFFO Tax & other CFFO Sustaining, FCF Growth Ot
Slide 22: Occupancy rate developments
Occupancy rate developments Planned inspection and maintenance out-of-service capacity, mainly in Rotterdam (Europoort & Botlek) and Singapore Subsidiary occupancy rate and out-of-service capacity Subsidiary planned out-of-service In percent, in million cbm, illustrative Regular inspection and mai
Slide 23: 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
Slide 24: 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 +
Slide 25: Well-balanced global portfolio
Well-balanced global portfolio Strong resilient cash flow generation Industrial Gas Chemical Oil terminals terminals terminals terminals Typical contract 5-20 years 10-20 years 0-5 years 0-5 years duration per product / terminal category Share of 25-30% 10-15% 25-30% 35-40% proportionate revenues 20
Slide 26: Growth investments
Growth investments Growth program of 1.5 million cbm Laurenshaven Botlek Qinzhou Corpus Christi Deer Park Thin-film Powerfoil 63,000 cbm Caojing Vlissingen 290,000 cbm 130,000 cbm 33,000 cbm German LNG 65,000 cbm Altamira Vopak Moda 9,200 cbm Open season completed Vietnam PITSB Antwerp 40,000 cbm 46
Slide 27: Project timelines
Project timelines Vopak’s Capacity Country Terminal ownership Products (cbm) 2017 2018 2019 2020 2021 2022 Growth projects Existing terminals Indonesia Jakarta 49% Oil products 100,000 Indonesia Merak 95% Chemicals 50,000 Netherlands Vlissingen 100% LPG & Chemical gases 9,200 South Africa Durban 70%
Slide 28: Investment phasing
Investment phasing Balanced approach for growth, sustaining, service improvement and IT investments Investments Investments In EUR million For 2020, growth investment could amount to EUR 300-500 million New projects* In the period 2020-2022, Vopak may invest EUR 750-850 million in sustaining and
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% 12.5% 12.0% 11.6% 12.0% 10-15% 4.1 4.3 4.2 4.3 4.2 4.0 2017 2018 Q1 Q2 Q3 Q4 2020 2021 2017 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 2020 2021 2019 20
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 1.8 billion, remaining average maturity ~5.4 years, average interest 3.85% 2 Growth opportunities Value accretive
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 ~6.2 billion GBP, CAD & EU
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
Slide 33: Debt repayment schedule
Debt repayment schedule Debt repayment schedule In EUR million 1,400 RCF flexibility 1,200 RCF drawn Other 1,000 Subordinated loans 800 Asian PP US PP 600 400 200 0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2040 As per 31 December 2019 Q1 2020 Roadshow Presentation 33
Slide 34: Increase in dividend to EUR 1.15 per share
Increase in dividend to EUR 1.15 per share Continued rising cash dividends Dividend and EPS* Dividend policy: In EUR 2.80 2.55 2.56 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 1.10 1.15 1.00 1.05 1.
Slide 35: Looking ahead
Looking ahead We reiterate our aim to grow EBITDA over time with new contributions from growth projects and IMO 2020 converted capacity and replace the EBITDA from divested terminals, subject to general market conditions and currency exchange movements. The effect of contango oil markets and the e
Slide 36: Storing vital products with care - Appendix
Storing vital products with care Q4 2019 Roadshow Presentation Appendix
Slide 37: Americas developments
Americas developments Storage capacity Occupancy rate* Revenues* In million cbm In percent In EUR million Total Q1 2020 89 91 92 90 88 84.0 79.3 81.8 0.2 0.5 4.5 million cbm 75.6 77.0 Subsidiaries 3.8 Joint ventures & associates Operatorships Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2019 2019 2019 2019 2020 20
Slide 38: Asia & Middle East developments
Asia & Middle East developments Storage capacity Occupancy rate* Revenues* In million cbm In percent In EUR million Total Q1 2020 92 84.5 3.3 80 82 87 76.5 74.9 4.2 15.3 million cbm 70.6 73.4 71 Subsidiaries Joint ventures & associates 7.8 Operatorships Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2019 2019 2019 2
Slide 39: China & North Asia developments
China & North Asia developments Storage capacity Occupancy rate* Revenues* In million cbm In percent In EUR million Total Q1 2020 83 79 73 74 0.8 2.8 million cbm 64 10.5 9.8 9.7 9.8 8.9 2.0 Subsidiaries Joint ventures & associates Operatorships Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2019 2019 2019 2019 2020
Slide 40: Europe & Africa developments
Europe & Africa developments Storage capacity Occupancy rate* Revenues* In million cbm In percent In EUR million Total Q1 2020 82 83 84 84 83 153.8 151.9 152.7 1.3 10.4 million cbm 131.9 126.8 Subsidiaries 9.1 Joint ventures & associates Operatorships Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2019 2019 2019 201
Slide 41: JVs & associates developments
JVs & associates developments Net result JVs and associates* Americas* Asia & Middle East* In EUR million In EUR million In EUR million 53.4 50.9 46.2 39.7 37.2 24.8 24.8 22.5 19.3 15.5 2.9 3.1 2.4 1.8 0.3 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2019 2019 2019 2019 2020 2019 2019 2019 2019 2020
Slide 42: Key developments
Key developments Occupancy rate* EBITDA development** In percent In EUR million 92 93 90 86 812 822 830 84 763 734 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Cash flow from operating activities (gross) Dividend In EUR million In EUR per ordinary share 867 1.10 1.15 783 1.00 1.05 1.05 714 687
Slide 43: EBITDA to Net profit overview
EBITDA to Net profit overview Increase in Earning per Share 2019 (pro forma) 2018 In EUR million* In EUR million* EBITDA 784.8 734.3 Depreciation and amortization 258.4 271.0 EBIT 526.4 463.3 Net finance costs 67.1 82.4 Income tax 61.9 55.4 Non-controlling interests 33.3 36.0 Net profit to holders 3
Slide 44: Shareholder engagement: say-on-pay
Shareholder engagement: say-on-pay 2020 Executive Board and Supervisory Board policies: • No material changes have been made to the policies o Policies now include further explanation/ clarification of our current Board remuneration practices in order to meet the SRD II requirements o No change in t