Storing
vital products with care
Q1 2020 - Roadshow Presentation
Royal Vopak
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 future, and Vopak cannot guarantee the accuracy and completeness of forward-looking statements.
These risks and uncertainties include, but are not limited to, factors affecting the realization of ambitions and financial expectations, developments regarding the potential capital raising, exceptional income and expense items, operational developments and trading conditions, economic, political and foreign exchange developments and changes to IFRS reporting rules.
Vopak's outlook does not represent a forecast or any expectation of future results or financial performance.
Statements of a forward-looking nature issued by the company must always be assessed in the context of the events, risks and uncertainties of the markets and environments in which Vopak operates. These factors could lead to actual results being materially different from those expected, and Vopak does not undertake to publicly update or revise any of these forward-looking statements.
Q1 2020 Roadshow Presentation 2
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 future opportunities
- Global well-diversified portfolio
- Strong competitive position
- Clear and robust financial framework
Q1 2020 Roadshow Presentation 3
External developments
Structural business drivers influenced by two global trends
Storage demand drivers
- Structural demand drivers for storage of vital products, driven by growth in population and global energy consumption
- Increasing global imbalances resulting from concentration of supply and demand
Energy transition
- Facilitate the introduction of lighter, cleaner fuels
- Pursue potential infrastructure solutions for a low-carbon energy future
Competition | Competitive landscape changed |
as a result of new storage capacity | |
worldwide | |
Vopak strategic capabilities of | |
more importance |
Digital transformation
- Real-timedata and transparent processes are required by customers
- Connectivity with external parties
Q1 2020 Roadshow Presentation 4
Business environment update
Long-term sustainable portfolio, well positioned for future opportunities
Chemicals
Gas
Focus on operational performance Oil products
- Long-termgrowth in global demand for chemicals
- Investments in petrochemical complexes provide industrial terminal opportunities
Strong growing markets | New |
Continued growth in LNG trade | energies |
increasing imports in Asia | |
Growing demand in LPG for | |
residential and petrochemical | |
markets |
IMO 2020 capacity delivered
- Oil hubs: short-term weakness from backwardated markets structures
- Fuel oil: IMO 2020 capacity rented out
- Import-distributionmarkets: Solid growth in markets with structural deficits
Opportunities for storage business
- Significant global growth in renewable energies
- First investments in hydrogen and solar
Q1 2020 Roadshow Presentation 5
Vopak at a glance
At year-end 2019
Number of terminals | Number of countries | Storage capacity* |
In million cbm
6623 34.0
37.0 | |
34.4 | |
2018 | 2019 |
Market capitalization | Number of employees |
In EUR billions | In FTE |
6.2 | 5,559 |
Total injury rate (TIR)
In 200,000 hours worked own
personnel and contractors
0.34
0,30 | 0,34 |
2018 | 2019 |
*Figures at year-end 2019 excluding divestments as from 31 January 2020. | Q1 2020 Roadshow Presentation 6 |
Robust Vopak strategy
Leadership in 5 pillars with clear strategy execution
Q1 2020 Roadshow Presentation 7
Strategic terminal types
Industrial terminals | Gas terminals | Chemical terminals | Oil terminals |
As petrochemical clusters are becoming larger and more complex, logistics integration is ever more crucial. Industrial terminals establish a single operator at the heart of the cluster, which typically serve multiple plants at the same time. They optimize the sites' logistics both by securing import and export flows to and from the cluster, and by ensuring reliable flows to feed the various plants inside the cluster. Due to the interdependency between the terminal and its customers, industrial terminals, typically have long-term customer contracts.
Vopak is expanding its gas storage - in response to increased demand, partly from petrochemicals and plastics production, but also from gas-fired power plants and transport. We are introducing new infrastructure for cleaner fuels like LPG and LNG. In doing so, Vopak is contributing to the energy transition. We own and operate LPG terminals in the Netherlands, China and Singapore; we have LNG facilities in Mexico, the Netherlands, Pakistan and Colombia.
Demand for chemicals storage is growing. Vopak has a strong presence in key hub locations, including Antwerp, Rotterdam, Singapore and Houston. We operate a global chemicals distribution network. Besides growth opportunities, we are also looking at ways of operating our terminals more efficiently and strengthening customer service.
Oil import, distribution and hub terminals are an important part of our business. We have hub terminals located strategically along major shipping routes, where suppliers, customers and traders are active. These include Rotterdam, Fujairah and the Singapore Strait. Vopak plays an important role in energy distribution in major oil markets with structural supply deficits.
Q1 2020 Roadshow Presentation 8
Portfolio transformation
Shift towards industrial terminals, chemicals and gas terminals
Key projects 2019
Gas | • SPEC LNG - Colombia | |
• ETPL LNG - Pakistan | ||
• RIPET LPG - Canada | ||
Industrial | • Corpus Christi - US | |
terminals | ||
• | Qinzhou - China | |
• | PT2SB - Pengerang, Malaysia | |
Chemicals | • Houston Deer Park - US | |
• | Antwerp - Belgium | |
• Rotterdam Botlek - the Netherlands | ||
• | IMO 2020 conversion | |
Oil | ||
• | Mexico - Veracruz | |
• | Divestments Algeciras, Amsterdam, | |
Hamburg, Hainan and Tallinn |
Proportionate revenue per product
~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 |
Proportionate revenue per division
5-10% | 5-10% | ~10% | ||||
~15% | 15-20% | ~20% | ||||
~20% | 20-25% | |||||
~25% | ||||||
5-10% | ||||||
5-10% | ||||||
45-50% | ~10% | |||||
40-45% | ||||||
~35% | ||||||
2014 | 2017 | 2019 | >2019 |
Gas
Industrial terminals Chemicals
Oil
LNG
Americas
Asia & Middle East
China & North Asia
Europe & Africa
Note: keeping market conditionals equal and only taking announced projects into account | Q1 2020 Roadshow Presentation 9 |
Digital transformation
Improve safety performance, better service for our customers and more efficient use of our assets resulting in lower costs
Cyber security Centralized cyber security program to protect our systems
- Significant reduction in response time to cyber attacks
In progress
Digital Modernization
In progress
Replacing and modernizing our |
company-wide IT and OT |
systems |
Developed own software for |
core processes and standardize |
non-core processes |
Digital Innovation
Early phase
- Connecting our assets to generate real-time data with smart sensoring
- Digitizing our maintenance
Platforms
Early phase
Create digital platforms around |
smart terminals enabling |
efficient and reliable information |
sharing |
Engage in new ventures related |
to technology & innovation |
Q1 2020 Roadshow Presentation 10
Value creation - sustainability
Safety and sustainability developments
Safety
- Leading safety performance in storage industry
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 |
Process Safety (PSER)
Tier 1 and Tier 2 incidents per 200,000 hours worked
0.20 | 0.27 | 0.23 | 0.26 | |||||
0.16 | ||||||||
0.12 | ||||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019 |
Sustainability
- UN Sustainability Development Goals (SDGs)
- Task-forceon Climate-related Financial Disclosures
- Investing in emission-reducing methods
Q1 2020 Roadshow Presentation 11
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 energy and cleaner fuels and by exploring ways to develop storage and handling solutions for a low-carbon future. We aim to reduce our own footprint and improve our energy efficiency
In storing vital products today and tomorrow, safety is our first and foremost priority. This includes ensuring a safe and secure working environment for all people working at and for Vopak.
To realize our purpose, we develop, maintain and operate reliable, sustainable terminal infrastructure in ports around the world. We adopt and invest in environmentally sound technologies and processes. We explore the introduction of more sustainable technologies and processes and work on the digital transformation of our company
We strive for environmentally sound management of the products we store and handle, and we work hard to minimize any negative impact on the environment, in particular by reducing releases to air, water and soil.
- Reducing our environmental footprint (daily)
- Facilitate introduction of lighter, less polluting fuels (short to medium term)
- Development of new infrastructure for cleaner, alternative fuels (to 2050)
- Zero fatalities and reduced total injury rate (short to medium term)
-
Improve diversity in management in terms of both gender and nationality
(short to medium term)
For the short to medium term: Being the industry leader in:
- Sustainability, service delivery and efficiency standards
- Designing and engineering of new assets
- Project management and commissioning of new assets
- Operating and maintaining assets throughout the Vopak network
- Reduce Process Safety Event Rate (PSER)
- Reduce releases of harmful products to the environment
- No uncontained spills
- Climate neutral by 2050 and remaining the industry leader in sustainability in the period up to 2030 and 2050
Q1 2020 Roadshow Presentation 12
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) | |
| Governance: 2 | |
| Environmental: 2 | |
| Social: 2 | |
GRESB | Sustainalytics |
Rating: B (Scale: E to A) | Rating: 70 (Scale: 0 to 100) |
Q1 2020 Roadshow Presentation 13
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 | |||
Q1 2020 Roadshow Presentation 14
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-term delivery and protecting long-term value by executing our strategy
EBITDA* | EPS* | Occupancy rate | Terminal network | |||||||||
In EUR million | In EUR | In percent | In million cbm | |||||||||
subsidiaries | 84 | Growth | 1.5 | |||||||||
2020-2022 | ||||||||||||
200 | 0.65 | only | program | |||||||||
Proportional 86 | Today 34.3 | |||||||||||
* Including net result from joint ventures and associates and excluding exceptional items | Q1 2020 Roadshow Presentation 15 |
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.
Q1 2020 Roadshow Presentation 16
Q1 2020 vs Q1 2019 EBITDA
EBITDA - post divestments - increased by EUR 3 million
214.6 | 0.1 | |||||||||
17.2 | 2.7 | 0.2 | 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 | ||||||||||
and others |
Figures in EUR million, excluding exceptional items including net result from joint ventures and associates | Q1 2020 Roadshow Presentation 17 |
Q1 2020 vs Q4 2019 EBITDA
Resilient performance of the portfolio including growth project performance compensation one-off items and divestments
0.8 | |||||
204.8 | 4.2 | 6.1 | |||
1.2 | 2.7 | 200.9 | 4.9 | 6.7 | 200.2 |
2.2 |
Q4 2019 FX-effect Divestments Adjusted Americas | LNG | Europe & | Asia & | China & | Global | Q1 2020 |
Q4 2019 | Africa | Middle East | North Asia | functions, | ||
corporate |
activities
and others
Figures in EUR million, excluding exceptional items including net result from joint ventures and associates | Q1 2020 Roadshow Presentation 18 |
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 | ||||||||||||
89 | 91 | 92 | 90 | 88 | 92 | 80 | 82 | 87 | 83 | 79 | 73 | 74 | ||
71 | 64 | |||||||||||||
38.1 | 41.7 | 42.2 | 43.2 | 47.6 | 81.9 | 71.4 | 70.8 | 85.0 | 78.0 | 15.3 | 13.9 | 13.0 | 20.2 | 13.8 |
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 | 2019 | 2019 | 2019 | 2019 | 2020 |
Europe & Africa | LNG | ||||||||
82 | 83 | 84 | 84 | 83 | 96 | 96 | 96 | 97 | 97 |
78.4 | 81.1 | 77.6 | 62.8 | 60.7 | 9.7 | 9.4 | 10.6 | 8.4 | 12.6 |
Q1 | Q2 | Q3 | Q4 | Q1 | Q1 | Q2 | Q3 | Q4 | Q1 |
2019 | 2019 | 2019 | 2019 | 2020 | 2019 | 2019 | 2019 | 2019 | 2020 |
Occupancy rate (in percent) for subsidiaries only, with the exception of LNG
EBITDA (in EUR million) excluding exceptional items and including net result from joint ventures and associates and currency effects
Q1 2020 Roadshow Presentation 19
Non-IFRSproportional information
Proportional consolidated information provides transparency considering increase joint venture contribution relative to subsidiaries
IFRS BASED
EBITDA | Occupancy rate | Q1 2020 occupancy per division | ||||||||||||
In EUR million | In percent - subsidiaries only | In percent - subsidiaries only | ||||||||||||
215 | 208 | 202 | 205 | 200 | 86 | 84 | 82 | 84 | 84 | 88 | 87 | 74 | 83 | n/a |
Q1 | Q2 | Q3 | Q4 | Q1 | Q1 | Q2 | Q3 | Q4 | Q1 | Americas | Asia & | China | Europe LNG | |
2019 | 2019 | 2019 | 2019 | 2020 | 2019 | 2019 | 2019 | 2019 | 2020 | Middle | & North | & Africa | ||
East | Asia |
NON-IFRSPROPORTIONAL
EBITDA | Occupancy rate |
In EUR million | In percent |
240 | 239 | 232 | 270 | 241 | 84 | 84 | 84 | 85 | 86 |
Q1 | Q2 | Q3 | Q4 | Q1 | Q1 | Q2 | Q3 | Q4 | Q1 |
2019 | 2019 | 2019 | 2019 | 2020 | 2019 | 2019 | 2019 | 2019 | 2020 |
Q1 2020 occupancy per division
In percent
87 | 90 | 86 | 82 | 97 |
Americas | Asia & | China | Europe LNG | |
Middle | & North | & Africa | ||
East | Asia |
Q1 2020 Roadshow Presentation 20
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 | |||||
2 | 57 | 84 | ||||||
84 | ||||||||
CFFO Tax & other | CFFO | Sustaining, | FCF | Divestments | Growth | Other | Free Cash | |
(gross) | operating | (net) | service & IT | before | investments | CFFO | Flow | |
items | investments growth | incl capital | before | |||||
repayments financing |
159 | 154 | ||
5 | 53 | ||
101 | |||
121 |
6 -26
CFFO | Tax & other | CFFO | Sustaining, FCF | Growth | Other | Free Cash |
(gross) | operating | (net) | service & IT before investments | CFFI | Flow | |
items | investments growth | before |
financing
Figures in EUR million | Q1 2020 Roadshow Presentation 21 |
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 maintenance | |||||||||||||
88% | 92% | 93% | 90% | 86% | 86% | 84% | 82% | 84% | 84% | Chemical service improvement projects | |||
in Botlek and Penjuru to strengthen our | |||||||||||||
chemical storage positions | |||||||||||||
1.5 | 1.8 | 1.8 | 1.6 | | Europoort - Laurenshaven to capture | ||||||||
0.8 | 1.0 | 1.2 | |||||||||||
0.6 | opportunities from current oil | ||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | environment |
2019 | 2020 | ||||||||||||
Occupancy rate (in percent) for subsidiaries only | |||||||||||||
Out-of-service capacity (in million cbm) for subsidiaries only, not corrected for divestments |
Q1 2020 Roadshow Presentation 22
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 on capital employed (ROCE) between 10% and 15%
- Long term net debt to EBITDA ratio between 2.5 and 3.0
- Annual stable to rising cash dividend in balance with a management view on a payout ratio range of 25-75% of net profit
Q1 2020 Roadshow Presentation 23
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 + service + IT + growth capex
Joint ventures: equity injection + shareholder loans granted
Free Cash Flow (FCF) = CFFO-CFFI
Cash flow from operations minus the cash flow from investments
- Debt servicing
- Growth opportunities
- Shareholder dividend
- Capital optimization
Q1 2020 Roadshow Presentation 24
Well-balanced global portfolio
Strong resilient cash flow generation
Industrial | Gas | Chemical | Oil | |||
terminals | terminals | terminals | terminals | |||
5-20 years | 10-20 years | 0-5 years | 0-5 years | |||
25-30% | 10-15% | 25-30% | 35-40% | |||
Europe & Africa | Asia & Middle East | China & North Asia | Americas | LNG |
Typical contract duration per product / terminal category
Share of proportionate revenues 2019*
EUR 300 million | EUR 309 million | EUR 62 million | EUR 165 million | EUR 38 million | 2019 |
EBITDA** | |||||
*Joint ventures, associates and subsidiaries with non-controlling interests are consolidated based on the economic ownership | |||||
interests of the Group in these entities. | |||||
** Including net result from joint ventures and associates and excluding exceptional items | Q1 2020 Roadshow Presentation 25 |
Growth investments
Growth program of 1.5 million cbm
Laurenshaven | Botlek | ||||
Corpus Christi | Thin-film Powerfoil | 63,000 cbm | Qinzhou | ||
Deer Park | Caojing | ||||
Vlissingen | German LNG | 290,000 cbm | |||
130,000 cbm | 33,000 cbm | 65,000 cbm | |||
Altamira | Vopak Moda | 9,200 cbm | Open season completed | Vietnam | PITSB |
Antwerp | |||||
40,000 cbm | 46,000 cbm | 20,000 cbm | 215,000 cbm* | ||
50,000 cbm | |||||
Veracruz | Merak | Jakarta | |||
Lesedi | |||||
Panama | |||||
79,000 cbm* | 50,000 cbm | 100,000 cbm | |||
40,000 cbm* | 100,000 cbm | Sydney | |||
Durban | |||||
Gas | |||||
Industrial terminals | 130,000 cbm | 105,000 cbm | |||
Chemicals | |||||
Oil |
* Remaining capacity, partly commissioned in 2019 | Q1 2020 Roadshow Presentation 26 |
Project timelines
Vopak's | Capacity | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | |||||||||||||||||||||||||||
Country | Terminal | ownership | Products | (cbm) | ||||||||||||||||||||||||||||||
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% | Oil products | 130,000 | ||||||||||||||||||||||||||||||
Netherlands | Rotterdam - Botlek | 100% | Chemicals | 63,000 | ||||||||||||||||||||||||||||||
Mexico | Veracruz | 100% | Oil products | 79,000 | ||||||||||||||||||||||||||||||
United States | Deer Park | 100% | Chemicals | 33,000 | ||||||||||||||||||||||||||||||
Australia | Sydney | 100% | Oil products | 105,000 | ||||||||||||||||||||||||||||||
Belgium | Antwerp - Linkeroever | 100% | Chemicals | 50,000 | ||||||||||||||||||||||||||||||
Mexico | Altamira | 100% | Chemicals | 40,000 | ||||||||||||||||||||||||||||||
China | Shanghai - Caojing Terminal | 50% | Industrial Terminal | 65,000 | ||||||||||||||||||||||||||||||
New terminals | ||||||||||||||||||||||||||||||||||
Panama | Panama Atlantic | 100% | Oil products | 40,000 | ||||||||||||||||||||||||||||||
South Africa | Lesedi | 70% | Oil products | 100,000 | ||||||||||||||||||||||||||||||
United States | Vopak Moda Houston | 50% | Chemical gases | 46,000 | ||||||||||||||||||||||||||||||
China | Qinzhou | 51% | Industrial Terminal | 290,000 | ||||||||||||||||||||||||||||||
United States | Corpus Christi | 100% | Industrial Terminal | 130,000 | ||||||||||||||||||||||||||||||
start construction | ||||||||||||||||||||||||||||||||||
expected to be commissioned | ||||||||||||||||||||||||||||||||||
Indicative overview, timing may change going forward, as it is currently too early to assess the extent and nature of | Q1 2020 Roadshow Presentation 27 | |||||||||||||||||||||||||||||||||
the full impact and future developments including the delays of projects under construction of the COVID-19 pandemic. |
Investment phasing
Balanced approach for growth, sustaining, service improvement and IT investments
Investments
In EUR million
New | |||
projects* | |||
~500 | Growth | ||
~340 | |||
investments** | |||
~125 | |||
~240 | ~265 | ~300 | Other |
investments*** | |||
2017 | 2018 | 2019 | 2020 |
Investments
-
For 2020, growth investment could amount to
EUR 300-500 million - In the period 2020-2022, Vopak may invest EUR 750-850million in sustaining and service improvement capex, subject to additional discretionary decisions, policy changes and regulatory environment
- in the period 2020-2022, Vopak expects to spend annually EUR 30-50million in IT capex
- For illustration purposes only, new announcements might increase future growth investments
- Growth capex at subsidiaries and equity injections for JV's and associates
*** Sustaining, service improvement and IT capex | Q1 2020 Roadshow Presentation 28 |
Maintain a return on capital
Expected ROCE between 10% and 15%
Average capital employed | Return on capital employed |
In EUR billion* | In percent |
4.1 | 4.0 | 4.3 | 4.2 | 4.3 | 4.2 | ||
2017 | 2018 | Q1 | Q2 | Q3 | Q4 | 2020 | 2021 |
2019 | 2019 | 2019 | 2019 |
12.0% | 12.6% | 12.5% | 12.0% | 12.5% | 10-15% |
11.6% |
2017 | 2018 | Q1 2019 | Q2 2019 | Q3 2019 | Q4 2019 | 2020 | 2021 |
- Disciplined capital for sustaining, service improvement and IT capex
- Value accretive growth opportunities
*Average capital employed definition has been applied consistently for all periods presented and is not affected by the | Q1 2020 Roadshow Presentation 29 |
application of IFRS 16. |
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 growth | |||||
Shareholder dividend | |||||
3 | |||||
Annual stable to rising cash dividend in balance with a management | |||||
view on a payout ratio range of 25-75% of the net profit | |||||
4 | Capital optimization | ||||
Efficient and robust capital structure
Q1 2020 Roadshow Presentation 30
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 & EUR | duration until June 2023 |
(at year-end 2019) |
Q1 2020 Roadshow Presentation 31
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 | Maximum ratio under other private placements | |||||
programs and syndicated revolving credit facility |
3.75 | |||||||||||
36% | 40% | 49% | 53% | 52% | 55% | ||||||
64% | 60% | 51% | 47% | 48% | 45% | 2.83 | 2.73 | 2.04 | 2.02 | 2.49 | 2.75 |
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 |
(pro forma)
*For certain joint ventures, limited guarantees are provided, affecting the Senior net debt | Q1 2020 Roadshow Presentation 32 |
Debt repayment schedule
Debt repayment schedule
In EUR million 1,400
1,200
1,000
800
600
400
200
0
2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2040 |
RCF flexibility RCF drawn
Other Subordinated loans
Asian PP
US PP
As per 31 December 2019 | Q1 2020 Roadshow Presentation 33 |
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 | Annual stable to rising cash dividend in balance | |
2.25 | 2.27 | ||
with a management view on a payout ratio of
1.00 | 1.05 | 1.05 | 1.10 | 1.15 |
2015 | 2016 | 2017 | 2018 | 2019 |
39% | 41% | 47% | 48% | 41% payout ratio |
EPS |
25-75% of net profit and subject to market circumstances
*Excluding exceptional items; attributable to holders of ordinary shares | Q1 2020 Roadshow Presentation 34 |
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 effect of COVID-19 on general economic and operating conditions will
influence the performance. - We will continue to invest in growth of our global terminal portfolio with growth investment
for 2020 that could amount to EUR 300 million to EUR 500 million. It is expected that some projects are delayed in execution and commissioning. - Cost management continues in 2020 to compensate at least for annual inflation and will take into account current and developing market conditions.
- We are prepared to respond to different economic scenarios focused on revenues, cost and cash flows to deliver performance and protect long-term value.
Q1 2020 Roadshow Presentation 35
Storing
vital products with care
Q4 2019 Roadshow Presentation Appendix
Americas developments
Storage capacity | Occupancy rate* | Revenues* |
In million cbm | In percent | In EUR million |
Total Q1 2020 | 89 | 91 | 92 | 90 | 88 | 81.8 | 84.0 | ||||
0.2 0.5 | 4.5 million cbm | 77.0 | 79.3 | ||||||||
75.6 | |||||||||||
Subsidiaries | |||||||||||
3.8 | Joint ventures & associates | ||||||||||
Operatorships | |||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q1 | Q2 | Q3 | Q4 | Q1 | ||
2019 | 2019 | 2019 | 2019 | 2020 | 2019 | 2019 | 2019 | 2019 | 2020 |
19 Terminals (6 countries)
EBITDA** | EBIT** |
In EUR million | In EUR million |
41.7 | 42.2 | 43.2 | 47.6 | ||||||
38.1 | 30.9 | ||||||||
24.9 | 27.4 | 29.0 | 27.2 | ||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q1 | Q2 | Q3 | Q4 | Q1 |
2019 | 2019 | 2019 | 2019 | 2020 | 2019 | 2019 | 2019 | 2019 | 2020 |
* Subsidiaries only
** EBIT(DA) - including net result from joint ventures and associates and excluding exceptional items | Q1 2020 Roadshow Presentation 37 |
Asia & Middle East developments
Storage capacity | Occupancy rate* | Revenues* |
In million cbm | In percent | In EUR million |
3.3 | Total Q1 2020 | 92 | 80 | 82 | 87 | 84.5 | 76.5 | 70.6 | 73.4 | 74.9 | ||
4.2 | 15.3 million cbm | 71 | ||||||||||
Subsidiaries | ||||||||||||
7.8 | Joint ventures & associates | |||||||||||
Operatorships | ||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q1 | Q2 | Q3 | Q4 | Q1 | |||
2019 | 2019 | 2019 | 2019 | 2020 | 2019 | 2019 | 2019 | 2019 | 2020 |
19 Terminals (9 countries)
EBITDA** | EBIT** |
In EUR million | In EUR million |
81.9 | 85.0 | 78.0 | |||||||
71.4 | 70.8 | ||||||||
69.2 | |||||||||
66.0 | 62.2 | ||||||||
55.5 | 55.1 | ||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q1 | Q2 | Q3 | Q4 | Q1 |
2019 | 2019 | 2019 | 2019 | 2020 | 2019 | 2019 | 2019 | 2019 | 2020 |
* Subsidiaries only
** EBIT(DA) - including net result from joint ventures and associates and excluding exceptional items | Q1 2020 Roadshow Presentation 38 |
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 | 2019 | 2019 | 2019 | 2019 | 2020 |
8 Terminals (3 countries)
EBITDA** | EBIT** |
In EUR million | In EUR million |
20.2 | |||||||||
15.3 | 13.9 | 13.0 | 13.8 | 17.3 | |||||
12.4 | |||||||||
11.0 | |||||||||
10.1 | 10.8 | ||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q1 | Q2 | Q3 | Q4 | Q1 |
2019 | 2019 | 2019 | 2019 | 2020 | 2019 | 2019 | 2019 | 2019 | 2020 |
* Subsidiaries only
** EBIT(DA) - including net result from joint ventures and associates and excluding exceptional items | Q1 2020 Roadshow Presentation 39 |
Europe & Africa developments
Storage capacity | Occupancy rate* | Revenues* |
In million cbm | In percent | In EUR million |
1.3 | Total Q1 2020 | 82 | 83 | 84 | 84 | 83 | 153.8 | 151.9 | 152.7 | ||
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 | 2019 | 2020 | 2019 | 2019 | 2019 | 2019 | 2020 |
15 Terminals (4 countries)
EBITDA** | EBIT** |
In EUR million | In EUR million |
78.4 81.1 77.6
62.8 | 60.7 | 47.4 | 43.5 | ||
36.7 | |||||
29.0 | 27.0 | ||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q1 | Q2 | Q3 | Q4 | Q1 |
2019 | 2019 | 2019 | 2019 | 2020 | 2019 | 2019 | 2019 | 2019 | 2020 |
* Subsidiaries only | |||||||||
** EBIT(DA) - including net result from joint ventures and associates and excluding exceptional items | Q1 2020 Roadshow Presentation 40 |
JVs & associates developments
Net result JVs and associates* | Americas* | Asia & Middle East* | ||||||||||||
In EUR million | 53.4 | In EUR million | In EUR million | |||||||||||
50.9 | ||||||||||||||
46.2 | ||||||||||||||
39.7 | ||||||||||||||
37.2 | 22.5 | 24.8 | 24.8 | |||||||||||
19.3 | ||||||||||||||
15.5 | ||||||||||||||
2.9 | 3.1 | |||||||||||||
1.8 | 2.4 | |||||||||||||
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 | 2019 | 2019 | 2019 | 2019 | 2020 |
China & North Asia* | Europe & Africa* | LNG* |
In EUR million | In EUR million | In EUR million |
15.6 | ||||||||||||||
11.9 | 13.9 | |||||||||||||
8.8 | 8.6 | 10.6 | 11.1 | 10.0 | ||||||||||
8.4 | 8.4 | |||||||||||||
0.6 | 0.6 | 0.3 | 0.6 | 0.6 | ||||||||||
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 | 2019 | 2019 | 2019 | 2019 | 2020 |
* Excluding exceptional items | Q1 2020 Roadshow Presentation 41 |
Key developments
Occupancy rate*
In percent
92 | 93 | 90 | 86 | 84 |
2015 | 2016 | 2017 | 2018 | 2019 |
EBITDA development**
In EUR million
812 | 822 | 763 | 734 | 830 |
2015 | 2016 | 2017 | 2018 | 2019 |
Cash flow from operating activities (gross)
In EUR million
867 | 783 | |||
714 | 687 | 710 | ||
2015 2016 2017 2018 2019
*Subsidiaries only / **Excluding exceptional items; including net result of joint ventures
Dividend
In EUR per ordinary share
1.00 | 1.05 | 1.05 | 1.10 | 1.15 |
2015 | 2016 | 2017 | 2018 | 2019 |
Q1 2020 Roadshow Presentation 42
EBITDA to Net profit overview
Increase in Earning per Share
2019 (pro forma) In EUR million*
2018
In EUR million*
EBITDA
Depreciation and amortization
EBIT
Net finance costs
Income tax
Non-controlling interests
Net profit to holders of ordinary shares
784.8
258.4
526.4
67.1
61.9
33.3
364.1
734.3
271.0
463.3
82.4
55.4
36.0
289.5
EPS** 2.80
*Excluding exceptional items including net result from joint ventures and associates ** Earnings per share for holders of ordinary shares - IFRS consolidated
EPS 2.27
Q1 2020 Roadshow Presentation 43
Shareholder engagement: say-on-pay
2020 Executive Board and Supervisory Board policies:
- No material changes have been made to the policies
- Policies now include further explanation/ clarification of our current Board remuneration practices in order to meet the SRD II requirements
- No change in the Supervisory Board policy (last fee change was in 2017).
- The Supervisory Board decided to make following amendments to the Executive Board policy (subject to approval of the AGM):
- As of 2020, the KPI Cost as used in Vopak's Short-term Incentive Plan for Executive Board members, will be measured on a min. - max. sliding scale. This is a change from the Meet (=100%)/ Not Meet (= nil) approach in 2018 and 2019.
- The LTIP opportunity is increased from 100% to 110% for the CEO, and from 80% to 90% for the CFO and COO, in order to maintain overall market competitiveness on a total compensation level.
- Proposed policies for voting at the AGM will be published on the website together with the other AGM documents.
- Stakeholder engagement:
- Vopak's largest investor and the Works Council have already been informed of these policies.
- Retail shareholders will be engaged during the AGM.
o Other stakeholders' views were engaged via the Vopak Materiality survey in 2019.
Q1 2020 Roadshow Presentation 44
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Disclaimer
Royal Vopak NV published this content on 12 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 May 2020 09:14:07 UTC