Koninklijke Vopak N.V.: Vopak reports continued strong results and announces capacity expansions in industrial terminals

The Netherlands, 26 July 2024

Vopak reports continued strong results and announces capacity expansions in industrial terminals

Key highlights HY1 2024

Improve

• Net profit -including exceptional items- in HY1 2024 of EUR 213 million and EPS of EUR 1.73
• Proportional EBITDA -excluding exceptional items¹- increased in HY1 2024 to EUR 599 million compared to HY1 2023 (EUR 586 million), driven by growth project contributions and a certain one-off item that fully offset divestment impacts
• Updated FY2024 proportional EBITDA outlook to EUR 1,150-1,180 million, EBITDA outlook to EUR 920-950 million and consolidated growth capex outlook to around EUR 350 million

Grow

• Growing in gas terminals by building a large-scale LPG export terminal in Prince Rupert, Western Canada, with a total investment of EUR 924 million of which EUR 462 million is the Vopak share
• Growing our industrial footprint in Saudi Arabia and China, investing EUR 63 million proportional growth capex in capacity expansion
• Started market consultation to explore extension of EemsEnergyTerminal in the Netherlands for LNG, and potential for new energies such as CO₂ and hydrogen

Accelerate

• Entered the FEED phase of CO2next project, an important milestone for developing CO₂ infrastructure in Rotterdam
• Commissioned repurposed 15k cbm capacity in Alemoa, Brazil for renewable feedstock

Q2 2024	Q1 2024	Q2 2023		In EUR millions	HY1 2024	HY1 2023
				IFRS Measures -including exceptional items-
325.5	328.2	359.0		Revenues	653.7	720.8
106.7	105.8	121.0		Net profit / (loss) attributable to holders of ordinary shares	212.5	224.1
0.88	0.85	0.97		Earnings per ordinary share (in EUR)	1.73	1.79
239.1	278.8	250.8		Cash flows from operating activities (gross)	517.9	477.8
- 153.2	-111.1	77.1		Cash flows from investing activities (including derivatives)	- 264.3	-26.0
				Alternative performance measures -excluding exceptional items- 1
475.5	477.9	480.8		Proportional revenues	953.4	966.9
301.6	297.8	292.2		Proportional group operating profit / (loss) before depreciation and amortization (EBITDA)	599.4	586.3
252.1	235.0	245.2		Group operating profit / (loss) before depreciation and amortization (EBITDA)	487.1	494.2
120.8	105.8	103.5		Net profit / (loss) attributable to holders of ordinary shares	226.6	206.6
0.99	0.85	0.83		Earnings per ordinary share (in EUR)	1.84	1.65
				Business KPIs
34.7	34.8	36.4		Storage capacity end of period (in million cbm)	34.7	36.4
20.1	20.2	22.0		Proportional storage capacity end of period (in million cbm)	20.1	22.0
92%	92%	91%		Subsidiary occupancy rate	92%	91%
92%	93%	91%		Proportional occupancy rate	92%	91%
				Financial KPIs 1
16.4%	17.0%	13.7%		Proportional operating cash return	16.7%	14.6%
2,571.6	2,223.4	2,852.8		Net interest-bearing debt	2,571.6	2,852.8
2.28	1.76	2.46		Total net debt: EBITDA	2.28	2.46
				Sustainability performance
				Total Injury Rate (TIR), own employees and contractors (per 200,000 hours worked)	0.16	0.15
				Lost-time Injury Rate (LTIR), own employees and contractors (per 200,000 hours worked)	0.10	0.08
				Process Safety Event Rate (PSER), own employees and contractors (per 200,000 hours worked)	0.07	0.14
				Total GHG emissions - Scope 1 & 2 (metric tons)	190.9	225.2
				Percentage women in senior management positions	20.0%	20.4%

1. See Enclosure 2 for reconciliation to the most directly comparable subtotal or total specified by IFRS Accounting Standards

CEO statement
"In the first half of 2024, financial performance of our network improved and we executed on our strategy by growing in industrial and gas terminals and accelerating towards new energies and sustainable feedstocks. A continued healthy demand for our infrastructure services resulted in a 92% proportional occupancy in the first half year. With regards to safety, we continued to perform well compared to the first half of last year. We had strong results in executing our strategy by committing to develop a large-scale LPG export facility, together with our partner in Western Canada. In our existing industrial terminal portfolio we are expanding in Saudi Arabia and China. Simultaneously, we are accelerating in new energies and sustainable feedstocks by entering the FEED phase for CO₂ infrastructure in Rotterdam, and we commissioned repurposed capacity for renewable feedstock in Brazil and vegetable oil in the United States of America. We are well-positioned to capture opportunities which fit our improve, grow and accelerate strategy."

Financial Highlights for HY1 2024

IFRS Measures -including exceptional items-

• Revenues were EUR 654 million (HY1 2023: EUR 721 million). Adjusted for divestment impacts of chemical distribution terminals in Rotterdam and Savannah and currency translation impacts of EUR 91 million, revenues increased by 4% year-on-year. The positive performance was driven by favorable storage demand across different geographies and markets and contribution of growth projects. Demand for our services was healthy during the first half of 2024. Throughput levels in our industrial terminals were solid, with new capacity coming into service. Gas terminals showed firm throughput levels, backed by growing energy demand and energy security considerations. In chemical distribution terminals, the impact on demand for storage infrastructure was stable. In the oil hub locations, solid storage demand was primarily driven by the continued growth in oil demand globally and the rerouting of trade flows. Demand in the oil distribution terminals also remained firm.
• Operating expenses were EUR 325 million in HY1 2024 (HY1 2023: EUR 352 million). Adjusted for divestment impacts of EUR 47 million, these expenses increased by EUR 20 million, mainly due to other expenses recorded as a result of a true up of AVTL earn out payables of EUR 7 million and an increase in personnel expenses partly offset by a decrease in energy costs.
• Cash flows from operating activities increased by EUR 40 million to EUR 518 million compared to HY1 2023 EUR 478 million, an 8% increase year-on-year, mainly related to increased dividends received from joint ventures (EUR 85 million) partly offset derivatives settlements and by lower EBITDA due to divestment impacts.
• Net profit attributable to holders of ordinary shares was EUR 213 million (HY1 2023: EUR 224 million) with a reduction mainly driven by the divestment impacts. Earnings per share (EPS) in HY1 2024 were EUR 1.73 compared to EUR 1.79 in HY1 2023.
• Share buyback program of up to EUR 300 million announced on 14 February 2024, is progressing well. Since its start, around 75% of the program has been executed per July 25th, and will be finalized in the course of HY2 2024, barring unforeseen circumstances. For progress on our share buyback program please visit our website.

Alternative performance measures -excluding exceptional items-²

• Proportional revenues were EUR 953 million, (HY1 2023: EUR 967) an 8% increase after adjusting for divestments of EUR 87 million.
• Proportional EBITDA increased to EUR 599 million (HY1 2023: EUR 586 million). Adjusted for divestment impacts of EUR 43 million, proportional EBITDA increased by EUR 56 million (10% year-on-year). Compared to Q1 2024, proportional EBITDA increased by EUR 4 million, mainly due to an unconditional success fee related to positive FID taken on our new LPG terminal in Canada (EUR 7 million). Proportional EBITDA margin in HY1 2024 was 58.9% (HY1 2023: 57.4%) reflecting good business conditions.
• EBITDA was EUR 487 million (HY1 2023: EUR 494 million). Adjusted for divestment impacts of EUR 43 million, EBITDA increased by EUR 36 million (8% year-on-year). The increase was driven by favorable storage demand across the various markets and geographies and positive growth project contribution which includes an unconditional success fee related to a positive FID taken related to the new LPG terminal in Canada (EUR 7 million) and a deferred income tax release in our joint venture in Pakistan (EUR 10 million). Compared to Q1 2024 (EUR 235 million), EBITDA increased to EUR 252 million, partly due to certain one-off items totalling EUR 17 million, related to a deferred income tax release in our joint venture in Pakistan (EUR 10 million) and an unconditional success fee related to a positive FID taken related to the new LPG terminal in Canada (EUR 7 million).
• Growth capex in the first half year was EUR 189 million (HY1 2023: EUR 110 million) reflecting growth investments in India, Belgium, the United States and Canada. Proportional growth investments in HY1 2024 were EUR 231 million (HY1 2023: EUR 184 million).
• Operating capex, which includes sustaining and IT capex, was EUR 92 million (HY1 2023: EUR 120 million) due to divestment impacts. Proportional operating capex decreased to EUR 104 million compared to EUR 138 million in HY1 2023, mainly due to the divestment of the chemical distribution terminals.
• Proportional operating cash flow in HY1 2024 increased by EUR 32 million (8% year-on-year) to EUR 447 million (HY1 2023: EUR 415 million) driven mainly by lower proportional operating capex. Proportional operating cash flow per share in HY1 2024 increased to EUR 3.63 per share from EUR 3.31 in HY1 2023.

Business KPIs

• Proportional occupancy rate at Q2 2024 was 92% compared to 93% in Q1 2024, mainly related to decreased occupancy in the China Business Unit and out of service capacity in the Netherlands.

Financial KPIs

• Proportional operating cash return in HY1 2024 improved to 16.7% compared to 14.6% in HY1 2023. The increase was mainly due to a lower average capital employed due to divestments, and positive contribution from new growth projects.
• Total net debt: EBITDA ratio was 2.28x at the end of HY1 2024 compared to 2.46x at the end of HY1 2023. The increase compared to Q1 2024 was mainly driven by dividends paid to shareholders in May and the ongoing share buyback program. Our ambition is to keep total net debt to EBITDA in the range of around 2.50-3.00x. Proportional leverage in HY1 2024 was 2.67x compared to 2.85x in HY1 2023.

Exceptional items in Q2 2024 consist of:

• Divestment gain of EUR 4.3 million following the sale of the chemical distribution terminal Lanshan in China in May 2024.
• Impairment of EUR 10.1 million of the Ningbo terminal in China as a result of further infrastructure development plans in the Zhenhai port that will lead to a reduction of the capacity of Ningbo terminal.
• Other expenses of EUR 6.9 million following true up of earn out payables related to AVTL joint venture in India.

For more information please contact:

Vopak Press: Liesbeth Lans - Manager External Communication, e-mail: [e-mail]
Vopak Analysts and Investors: Fatjona Topciu - Head of Investor Relations, e-mail: [e-mail]

The analysts' presentation will be given via an on-demand audio webcast on Vopak's corporate website, starting at 10:00 AM CEST on 26 July 2024.

This press release contains inside information as meant in clause 7 of the Market Abuse Regulation. The content of this report has not been audited or reviewed by an external auditor.

2. To supplement Vopak's financial information presented in accordance with IFRS, management periodically uses certain alternative performance measures to clarify and enhance understanding of past performance and future outlook. For further information please refer to page 8 of the press release.