Royal Vopak : Vopak AGM Presentation 2020

Storing

vital products with care

Algemene Vergadering van Koninklijke Vopak N.V.

21 april 2020

Agenda voor de jaarlijkse Algemene Vergadering van Koninklijke Vopak N.V. - 21 april 2020

1. Opening
2. Bespreking van het bestuursverslag over het boekjaar 2019
3. Implementatie van het remuneratiebeleid voor het boekjaar 2019
4. Bespreking en vaststelling van de jaarrekening over het boekjaar 2019
5. Dividend
6. 1. Verantwoording reserverings- en dividendbeleid
   2. Voorstel dividenduitkering over het boekjaar 2019
7. Decharge van de leden van de Raad van Bestuur voor de uitoefening van hun taken in het boekjaar 2019
8. Decharge van de leden van de Raad van Commissarissen voor de uitoefening van hun taken in het boekjaar 2019
9. Benoeming van de heer B.J. Noteboom als lid van de Raad van Commissarissen

1. Remuneratiebeleid voor de Raad van Bestuur en voor de Raad van Commissarissen
2. 1. Raad van Commissarissen
   2. Raad van Bestuur
3. Voorstel tot machtiging van de Raad van Bestuur tot verwerving van gewone aandelen
4. Intrekking van gewone aandelen verworven door de vennootschap
5. Benoeming van Deloitte Accountants B.V. als de externe accountant voor het boekjaar 2021
6. Rondvraag
7. Sluiting

Een toelichting op de agendapunten 2 tot en met 12 is opgenomen in de Aandeelhouderscirculaire.

Punten 2 en 5a) zijn ter bespreking. De punten 3, 4 en 5b) tot en met 12 worden ter stemming voorgelegd, waarbij punt 3 in een adviserende stem wordt voorgelegd.

AGM 2020

Storing

vital products with care

Chairman of the Executive Board and CEO of Royal Vopak

Eelco

Hoekstra

Key messages

• Storing vital products with care helps both meet the needs of a growing population and reach society's broader goals
• Strategy execution
• • Portfolio transformation gained momentum throughout 2019
  • Excellent progress with our digital transformation
• Strong financial performance in 2019
• Covid-19response - taking good care of people working at our terminals and supporting society by storing vital products with care - all 66 terminals are operational

AGM 2020 4

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-continuityplans are in place and all terminals are operational to serve our customers. If and where possible, we do not procrastinate and keep an attitude of business as usual.
• Our attention is on the short term deliveryand protection of the long term value.
• We have seen a limited impact in Q1 - China and South Korea performed well. It is currently too early to assess the extent and nature of the full impact and future developments including the delays of projects under construction.

AGM 2020 5

Sustainability developments

Safety and sustainability developments

People		Planet

Personnel Safety (TIR)

Total injuries per 200,000 hours worked

1.0
0.5									0.34
0.0
2010	2011	2012	2013	2014	2015	2016	2017	2018	2019

Reportable spills

Uncontained spills in amount (metric tons) and frequency

200				Metric tons
150				Total number
100
50		21	12
0

2016

2018

2017

2019

 Trust and Verify program	 Our ambition is to be climate neutral by 2050
	and to remain the industry leader

AGM 2020 6

Growth developments

Shift towards industrial terminals, chemical and gas terminals

			Botlek			Vietnam
RIPET		Vlissingen					Caojing
		63,000 cbm
	Deer Park				20,000 cbm
96,000 cbm*		9,200 cbm	German LNG		Qinzhou	65,000 cbm*
Corpus Christi	33,000 cbm	Antwerp					PT2SB
	Openseason completed
			290,000 cbm
	Veracruz
		ETPL
130,000 cbm		50,000 cbm				1,496,000 cbm*
Altamira	110,000cbm*		151,000 cbm*			Sebarok	PITSB
40,000 cbm	SPEC	Lesedi				67,000 cbm*	430,000 cbm*
					Jakarta
Panama					Merak
	170,000 cbm*
		100,000 cbm
360,000 cbm*							100,000 cbm
Gas	Alemoa		50,000 cbm	Sydney
Industrial terminals
	Durban
Chemicals
					105,000 cbm
Oil	106,000 cbm*
		130,000 cbm

* Fully or partly commissioned in 2019

AGM 2020 7

2017-2019 strategy delivered

Transformative portfolio changes and digital strategy is being rolled out

	Capture growth		EUR 1 billion growth investment program in line with
		long-term market developments
	Spend EUR 750 million on sustaining and		Sustaining and service improvement capex programs
	service improvement capex		remained within the spending limit
	Invest EUR 100 million in new technology,		Build and global roll-out of Vopak's digital cloud-based
	innovation programs and replacing IT systems		terminal management software in progress
	Drive productivity and reduce the cost base		Efficiency program delivered - cost base for 2019
		is EUR 633 million

AGM 2020 8

Key figures 2019

• Strong EBITDA and significant increase in earnings per share
• Portfolio well-positioned for future opportunities

	EBITDA*		EPS*		Occupancy rate**		Terminal network
	In EUR million		In EUR		In percent		In million cbm
	830		2.80		84		Today 34.3
				program
							2020-20221.5
							Growth

* Including net result from joint ventures and associates and excluding exceptional items
** Occupancy rate include subsidiaries only	AGM 2020 9

Storing

vital products with care

Member of the Executive Board and CFO of Royal Vopak

Gerard

Paulides

Financial highlights

• EBITDA of EUR 830 million reflect good aggregate business performance including new asset performance and positive IFRS 16 effects
• Earnings Per Share (EPS) significantly increased to EUR 2.80
• Cost savings program is delivered - 2019 cost base is EUR 633 million
• Continued growth investments
• EUR 100 million share buyback program and (proposed) dividend of EUR 1.15

AGM 2020 11

2019 vs 2018 EBITDA

Pro forma EBITDA increased reflected good aggregate business performance including new asset performance

												829.8
						7.9	5.2			784.8	45.0
								5.8
					22.5			5.6
734.3	14.4	14.9	733.8	26.8
2018	FX-effect	Divested	Adjusted	Asia &	Americas	China &	LNG	Europe &	Global	pro forma	IFRS 16	2019
		terminals	2018	Middle		North Asia		Africa	functions,	2019	effects
				East					corporate
									activities
									and others

Figures in EUR million, excluding exceptional items including net result from joint ventures and associates

AGM 2020 12

Cash flow overview

Investment momentum driven by growth project phasing towards 2019

2019	2018
In EUR million	In EUR million

710		647
					500
	63				561
			300					390
				347
						18
CFFO* Tax & other	CFFO	Sustaining,	FCF	Divestments	Growth	Other	Free Cash
(gross)	operating	(net)	service & IT before	investments	CFFI	Flow
	items		investments growth				before
								financing

687		640
	47
			266		38
				374
						341
							21	50
CFFO	Tax & other	CFFO	Sustaining,	FCF	Divestments	Growth	Other	Free Cash
(gross)	operating	(net)	service & IT before	investments	CFFI	Flow
	items		investments growth				before
								financing

Figures in EUR million
* IFRS 16 classifies lease payments mostly as financing cash flows versus operating cash flows in prior years	AGM 2020 13

Robust balance sheet

Target leverage of 2.5 to 3.0 times senior net debt : EBITDA

Priorities for cash

1	Debt servicing
average interest 3.5%
	Growth opportunities
2
Value accretive growth
	Shareholder dividend
3
Stable to rising cash dividend
	Capital optimization
4
Efficient robust capital structure

Senior net debt : EBITDA ratio	Senior net debt : EBITDA ratio
(frozen GAAP)	scenarios

3.75

											2.0-2.5	2.5-3.0	3.0-3.5
											2.5-3.0
2.83	2.73	2.04	2.02	2.49		2.75					Strategic considerations
									•	Timing of growth opportunities
											•	Shareholder distributions
2014	2015	2016	2017	2018	2019	Target

Maximum ratio under private placements programs and syndicated revolving credit facility - 'frozen GAAP'

AGM 2020 14

Increase in shareholder returns

5% increase in dividend and EUR 100 million share buyback program

Dividend and EPS*

Share Buyback Program

In EUR

2.80

2.55 2.56

2.31

2.25

2.27

Vopak will start a share buyback program to return EUR 100 million to shareholders

0.90	1.00	1.05	1.05	1.10	1.15

2014	2015	2016	2017	2018	2019
39%	39%	41%	47%	48%	41% payout ratio

* Including net result from joint ventures and associates and excluding exceptional items

AGM 2020 15

Financial highlights

• EBITDA of EUR 830 million reflect good aggregate business performance including new asset performance and positive IFRS 16 effects
• Earnings Per Share (EPS) significantly increased to EUR 2.80
• Cost savings program is delivered - 2019 cost base is EUR 633 million
• Continued growth investments
• EUR 100 million share buyback program and (proposed) dividend of EUR 1.15

AGM 2020 16

Storing

vital products with care

Member of the Executive Board and COO of Royal Vopak

Frits

Eulderink

Sustainability messages

Storing vital products with care

• • Vopak is committed to remain a responsible member of the communities in which we operate.
  • We are committed to maximize positive, and minimize the negative effects of our business activities.
  • We aim to contribute to a more sustainable society by introducing more sustainable technologies, processes and products, and facilitating the energy transition.
• Important sustainability topics for society and Vopak result in 3 horizons of action on the short, medium and long term.
• Our ambition is to be the sustainability leader in our industry and to be climate neutral by 2050.

AGM 2020 18

Sustainability at a glance

Energy supplied	Income tax paid
In peta-joules	In EUR millions

4,500	71
Equivalent to 120 million	We pay fair tax in
households	countries in which we
operate

Total energy	Renewable energy
consumption
In peta-joules

14.5	69%
Equivalent to 0.4 million	+8% vs 2018
households

People employed

Own employees (in FTE) and

contractor (in man years)

>15,000

Total Injury Rate (TIR)

In 200,000 hours worked own

personnel and contractors

0.34

+0.04 vs 2018

Living wage

Percentage of employees that

receive living wage

100%

Process Safety Event

Rate (PSER)

In 200,000 hours worked own personnel

and contractors in operational sites

0.16

+0.04 vs 2018

AGM - Sustainability 19

Storing vital products with care

Important sustainability topics for society and Vopak

Care for our	Assuring occupational
societal impact	health and safety
	Ensuring process safety
	Ensuring human rights
	and decent work
	Increasing diversity

Care for our	Air quality: Reducing VOC
environment	and other air emissions
	Preventing water and soil
	pollution
	Reducing GHG emissions
	Increasing energy efficiency

Our economic impact	Delivering vital products to
	customers and society
	Following our business
	ethics and integrity
	Boosting innovation
	Paying fair tax

External climate change risks, opportunities and impacts on Vopak

Organizing yearly climate day to stress test:

• Resilience of portfolio
• Growth strategy

AGM 2020 20

Vopak's lines of actions towards a sustainable future

SDGs			Action on 3 horizons
Decent work	Responsible		Continuous focus on safety & reducing
and economic	consumption		environmental footprint (short-term)
growth	and production
Affordable and	Industry,		Facilitating the switch to lighter fuels and
clean energy	innovation and		feedstocks (medium-term)
	infrastructure
Affordable and	Industry,		Developing infrastructure solutions for new
clean energy	innovation and		energies (long-term)
	infrastructure

AGM 2020 21

Personal safety & GHG reduction

Continuous focus on safety & reducing environmental footprint

Personal safety		GHG reduction
Aiming to be as safe as the safest customer	Supporting Paris Climate goals
Personnel Safety (TIR)	Total GHG emissions
Total injuries per 200,000 hours worked	in metric tons of CO2 equivalents

			0.95	460
			440
				420				408
	0.34	0.40		400
0.23
				2015	2016	2017	2018	2019	2050

Oil industry	Vopak	Chemical	Tankstorage
average		industry	competitor	 We are particularly looking for ways to reduce energy
		average
			consumption from heating (38% of total GHG emissions).
 Vopak's Trust & Verify program		 Ambition to be climate neutral by 2050

AGM 2020 22

Facilitating the switch to lighter fuels and feedstocks

Transforming our portfolio to facilitate the switch to lighter fuels and feedstocks

Progress during 2019

Facilitating LNG

• ETPL in Pakistan facilitates energy equivalent of 4.5 million households
• Gate Rotterdam facilitates energy equivalent of 8 million households

Facilitating LPG

• LPG Canada supports Asian energy demand deficit

~10%	~10%	10-15%
~15%	20-25%
	25-30%
35-40%	25-30%
		25-30%
40-45%	40-45%	35-40%
2014	2017	2019	>2019

Gas Industrial terminals Chemicals Oil

AGM 2020 23

New Energies

Developing infrastructure solutions for new energies

New energies strategy

Hydrogen

- Clean and renewable source of energy

Flow batteries

• Use molecules to store large quantities of electricity

CO2 storage & use

• Carbon Capture Storage & Use to support Paris Climate goals

Green feedstocks

• New feedstocks for chemical industry and recycling plastics

Hydrogen progress

• Vopak explores 3 potential ways to handle hydrogen
• • Liquid Hydrogen
  • Ammonia
  • Liquid Organic Hydrogen Carrier (LOHC)
• Vopak is one of the members of H-visionRotterdam
• Vopak made its first hydrogen investment in Hydrogenious (LOHC)

AGM 2020 24

Vopak WeConnect Foundation

Contributing to the youth in communities we operate

• Since 2016
• Focus on young people aged between 10-24years
• Engage with our communities and help empower young people and connect them to the world

Caojing, China

Rotterdam Botlek, Netherlands

Alemoa, Brazil

• So far, 30 WeConnect projects were launched around the world
• Reaching more than 5,000 young people in all Vopak regions

Malaysia

Altamira, Mexico

Rotterdam Europoort, Netherlands

Panama	Pakistan

AGM 2020 25

Storing

vital products with care

Annual General Meeting 21 April 2020

Questions & Answers

Storing

vital products with care

Algemene Vergadering van Koninklijke Vopak N.V.

21 april 2020