Koninklijke Vopak N.V.

Yes. Thank you, and good morning, ladies and gentlemen, and welcome to Vopak’s First Quarter Interim Update.

I will present a few prepared remarks over the next 20 minutes and update you on the developments in this quarter. We've also published the analyst presentation on the website, which you will have access to.

And today, we have a busy day. We have our annual AGM so we will manage the meeting to meet our commitments that are following this analyst call.

But thank you for making time. We will make time for you as well, best to our ability.

Before I start, I have to point to the disclaimer content of the forward-looking statement, which you have available, read it carefully. And then we go on to the meeting.

So, let's go to the key messages. Slide number 3, first quarter 2021 was impacted by the additional cost of the Texas winter storm.

Notwithstanding, we still improved the outlook for growth project contributions in 2021.

All right. Good morning, Gerard.

A few questions for me, please. Firstly on CapEx.

Just comparing the presentation from 1Q versus the presentation from the full year results, and the bar looks a bit lower. I was just wondering what has changed from when you present the full Q results or whether it was just kind of a mistake in the presentation.

So that's just to clarify on that. And then secondly, just on the occupancy rate for subsidiaries, it come off to 88% from 90%, presumably it's a function of the oil contracts rolling over.

Just wondering what the outlook is for the rest of the year. Yes, there's a bit more volatility, but clearly the shape of the curve doesn't look anywhere as good as last year.

So what's the potential range of outcomes that you see? And then maybe finally just on the throughput business, you’ve highlighted that chemicals remains a bit difficult and perhaps the industry is bringing forward maintenance to take benefit from the plants being already shut in.

Obviously that has an impact on your business in the U.S., but shouldn't that benefit your business outside of the U.S.? So just trying to kind of better understand the dynamics there as well.

Thank you.

Yes. Thank you, Thomas.

The investment question that was not deliberate. So you've looked clearly more closely at the slide than we intended.

There's not supposed to be a subtle or explicit change to that slide at all, lower to the message. The €300 million to €350 million is what we aspire to.

Most of that is in motion. There is an element of opportunistic investment, of course, where you things may happen or may not happen that’s mostly when you negotiate on certain assets in M&A situations and M&A, I’m – how we mean M&A is not a company M&A, but it’s asset M&A.

And that I would have given you exactly the same response at Q4.

Yes, thank you.

Thank you, Thomas.

Good morning, Gerard. Three quick questions please.

You highlighted the drivers for the impact on occupancy rates in Europe and Africa. I was wondering what is the reason that occupancy came down in Asia and Middle East?

I think you said two points on a proportionate basis. Is it still being held back by capacity auto surface for maintenance?

And when do you expect that that will come back on the market? Second question is around the impact of the maintenance that the Gate LNG terminal.

Can you quantify the EBITDA impact of that terminal being out of service for about a month? And then finally did I understand correctly that the Dow acquisition did not yet contribute to earnings in the first quarter?

Thanks very much.

Yes. Thank you.

Let me first deal with Gate. Gate has been planned for a long time.

As you can imagine the facility, the LNG facility here in the Netherlands has been operating uninterrupted for a period of 10 years. And at the certain moment you have to do your maintenance.

This has been coordinated in great detail with the customers. The effect of the shutdown will play out of our Q2 and Q3.

We will not give specific guidance on that effect. And in terms of supply, clients have obviously been planning for this for a long time, so alternative arrangements will have been made to by them as appropriate.

But we don’t specify an EBITDA number. They fit on that Singapore or Far East.

Fujairah was a little bit lower on the occupancy. We show a little bit lower occupancy in Pakistan.

We show a little bit lower in Singapore or relative to Q4, because compared to a year ago, it’s all a lot better. Singapore is still working its way through what the points that we highlighted in 2020.

And the other bits and pieces are sort of normal market movements I would qualify them. So hopefully over time Singapore brings that occupancy a bit up.

In Europe, you have the same effect in of a slightly lower occupancy that was mainly in Europoort and in Botlek. It’s a combination of so normal market movement and shutdowns.

Europoort is expected to have to majority of its shutdown and maintenance activity in the first half. And then have better availability in the second half of this year.

What else did you ask? Can you remind it?

Dow acquisition, the equal position of the Dow acquisition.

Yes. The Dow acquisition across Q4 and Q1 had a modest contribution.

The buildup more relevantly across the entire €30 million to €50 million. And as I said we will – we are confident we can get to the high end of that is more back-end loaded than front-end loaded.

So you have a lighter contribution of project contributions in Q1. Then we look forward to in the remainder of the year.

And that will play out over the remainder of the year. The South African market is still building up to doing well asset-wise in line with the market that we’ve seen in South Africa.

So the asset is doing well, but it’s ramping up in its earnings potential same for the Dow, same for other projects in the portfolio. As I said that it’s contribution, it’s building up and more in the second half or even third quarter than in the first quarter.

Okay, great. Thank you very much.

Thank you, David.

Yes. First of all, I have a question on the oil market, if can comment on the dynamics there at the moment.

And my second question is still on the Gate, and I understand if you don’t want to give a specific guidance on the impact. Can you talk a bit truly mechanics?

So you said that customers are prepared. Does that mean that they will schedule their throughput system in such a way that the month that in terms offline will have a limited impact on revenues?

Or should we interpret differently? Are there any costs that will be expensive during this month of maintenance that we should take into account?

How does this work?

Yes. On oil dynamics first.

Oil market is – the contango is limited at the moment to get. But the whole point of backwardation and contango I think is less relevant than it used to be in the past.

It’s still to an extent relevant, but less relevant. The oil markets in general are behaving in a more normalized manner now.

Production, of course, was completely taken by surprise by the demand falling away massively last year in a short period of time. Production adjusted, so supply adjusted and now demand is coming back and then supply will adjust back into that.

The oil prices have been in the second half of last year, when oil prices already were switching to backwardation. In fact, irony of course, is that the oil prices continue to rise when the market was in backwardation.

So sometimes these pricing dynamics are difficult to explain at least perceptions of it. What we look at is a more normalized market.

The only one that is in contango is the jet and the jet will obviously adjust to people in the world traveling again or not and that if the world can move to a more normalized and more welcome future than what we experienced in 2020, the sooner, the better of course for everybody. But it doesn’t preoccupy us at the moment disproportionately compared to the attention it was getting a year ago.

And we’re very pleased with the fact that we’ve gotten to better occupancy across the portfolio. If you look at Gate, when I said has been planned for a long time, that means that you need to do the engineering of course, and the planning of all the activities, and the clients, the customers of ours, they need to make their arrangements to manage their supply and demand flows of the product.

The terminal itself is not available for one month that effect will be spread out over the two quarters. There will be some expensing, I’m not commenting on revenues and I’m not commenting on EBITDA, but it’s clear that the facility is most available for four months and that effect will be spread out of our Q2 and Q3.

Thank you.

Yes, good morning. First question is on LNG, but then all your newly blends projects.

I think, meanwhile, we’ve seen seven or eight preannouncements of projects you’re working on, but this quarter, it seems no progress in these projects. Can you explain what is happening there?

And where do we, maybe you can write down where these projects do not come to the markets. Second question is on guidance you were quoted company talking with investors who want to make return on want to see, and that’s the company has an ambition to reach certain financial targets.

We are not seeing those financial targets markets seeing them. So when can we expect clearer guidance?

And then third, that’s maybe more remark or a question on behalf of a client of mine. What – can you maybe give some clarity on how board discussions are going on?

Let’s say, the share price of Vopak being flat for, let’s say, 10 years in a row, despite all the announcing changes in new projects, et cetera, et cetera.

Okay. Thanks, Thijs.

Let’s first talk about LNG. The LNG portfolio is developing well.

We now have four assets in the portfolio. We are planning on projects and spending time and effort on Germany, China, we’ve mentioned Hong Kong before, we’ve mentioned the LNG data center linked development with Keppel in Singapore.

All those projects are progressing and they are progressing at their own speed. Germany, the main HQ in Germany is the whole permitting discussion in Germany.

The commercial site is quite healthy and from supply into the North European market, it’s very attractive proposition. We are continuing to spend money developing that asset more than we would normally do pre-FID.

So you’re right there. We have been highlighting for some time, but it’s not – we’re not deviating from the path.

We continue to develop it. And the competition has actually folded, there was at a certain moment competitor one or two sites.

They have folded and I think everybody’s now banking on the success of – do you have any LNG, by solar park, which is a joint venture effort again. In terms of China – China LNG, it’s new facility on an existing site of solar park.

So it plays to our strengths. It has everything going for it.

It has a new partner, which is the local demand aggregator. And we are continuing to build the – designed the facility, the jetties have best I remember, but I didn’t check it recently, but the jetties have been made ready.

And also there you need to tidy up on some of the permits and the regulatory issues. Again, it’s progressing well.

It’s also same as Germany hard work, but you need to take thousand steps and we're taking them step by step. Hong Kong is an LNG import facility, which is exactly well positioned in the energy mix ambition of Hong Kong.

From that point of view it's an attractive proposition. It will be in the import facility with floating storage and an offshore buoy to connect to the shore.

The point there is to finalize the commercial negotiations and that is a binary thing, it either happens or it doesn't happen. The commercial negotiation, it looks attractive, it looks good, but a deal is never done until it is done.

The advantage of Hong Kong is we're not spending money on it, like China or Germany. So from that point, if you defect that Hong Kong is a bit more binary is not an issue, but it's still looking good.

Singapore is progressing well, which capital and then we can make two announcements on South Africa and Australia, and they are very early days. They are made together with interested parties to develop that, but there's little money involved on a relative scale and therefore not a concerned.

So I'm not concerned about the fact that it's costing us money. Yes, of course I am, but the business proposition is okay, and the risk reward is okay.

On the reflections on the share price, of course, that's not a thing that we would comment on. However, we obviously have noted that share price has not done well recently.

It's in a way disappointing because if you look at the EBITDA momentum, the proportional EBITDA, the robustness of the portfolio, our credentials in new energy as path into the – additional path into the future, it's all fully in line with our strategy. The operational momentum is good.

The cash flow momentum is good. The balance sheet is in good shape.

We're paying diffidence. Last year we bought back some shares.

So sometimes it's maybe a bit puzzling for us why the market does what the market does, but I think the – and it plays a bit on your point on guidance. We are certainly not going to entertain guidance on a quarterly basis.

I think this is a distraction which is not adding any value for that short moment that it is relevant. We managed the company on short-term performance.

We will be held accountable each quarter and each year. We give guidance on our return ambitions 10% to 15% on capital employed, Our added EBITDA from gross 30 million to 50 million, our cost ambition, so you can take a few on that where it is more difficult is market conditions.

We've seen extreme volatility last year in foreign exchange and in oil. I think if we – if we look through that particularly for an exchange, I think the results of the company are good.

I will not say very good because if I would say very good, then I will dismiss the fact that we believe that could be better. So the results could be better if we had – not had held back on the projects last year due to the global difficulty to deliver proteins in supply chains that were not functioning on the construction side.

And the foreign exchange has just not helped us, but on that account, I say they are good. The company is extremely healthy.

We have a compelling strategy. There's no other company comparable to us across the space.

We are the global leader in industrial terminals. We are the – one of the few companies that can actually in our space talk about new energy with credentials.

So I'll let the market decide whether that combination of distribution of dividends stability, growth of the portfolio, strengthening the EBITDA and the strategy is appealing or not. But I shared the fact that the share price is in my view, disappointing relative to the quality of the company and I have full confidence in the quality of the company.

Now that also answers implicitly your request on guidance. The things we control, we give guidance on.

The things we don't control foreign exchange and volatility in markets would make it extremely difficult to have a sensible discussion about the guidance. So we are still not going to get more guidance than what we gave at the moment.

And if you say we don't give guidance, literally that is true on EBITDA. If you look at the component parts, I think we do give a fair bit.

Sorry to interrupt. But as a Board, you discuss with each other and you make decisions with each other, and you must have an ambition where you want to stand in three to five years from now.

Let's look at 2025 Vopak, where do you want to stand was kind of resuming normalized market assuming flat for 4X that we all noticed. 4X is full of – for all the companies we cover and foreign exchange, yes, the market will understand a few changes as you change that long-term guidance.

But to me it's absolutely not feasible, where do you want to stand as a company in 2025 with what kind of financial returns; with what kind of capital employed; that's simply what I mean, and thus what the investors need. And only if U.S.

infrastructure company make clear where you want to stand in five years or 10 years from now or whatever, also financially. Then in my view investors will be willing to follow or not follow you, but then at least it's clear where we as, or where the shareholders can keep U.S.

Board accountable to?

Okay. Noted Thijs, I've given you my response, but I've noted your input.

I think the longer term ambition is a fair point. If we can stay away from quarterly or annually and pull it over to a longer horizon, I have sympathy for that, and we do discuss that.

So leave that taught with us and we'll see what that brings.

Thanks.

Yes, good morning. Can you hear me?

Yes, Quirijn. Good morning.

Yes, good morning, everyone. Yes.

My questions are focused on expansion. First of all, can you give me an idea about the expansion impact in the first quarter?

And then the secondary, you have raised your guidance for the expansion, so it's €250 million to the high end of that range. What's the reason, because in my view, if I look at the tables, then it looks like there is some delay here and there, maybe slightly, but maybe in Botlek, maybe in the Corpus Christi, so that does not contribute.

And the lockdowns are not over, so that means also a risk of delay. So is there – can you maybe flip that just on the situation on these projects and why you are raising your guidance on this – in this respect?

Yes. The contribution in the first quarter was about €5 million, maybe a little bit more €5 million to €7 million thereabouts.

So relatively light compared to what you – what we expected the remainder of the year and building up. And that is relative – sorry, that's relative to Q1 2020.

If you take the range of €30 million to €50 million, when we set the range Quirijn late last year at the Q4 results, we of course already took a few on the factors that you mentioned. And we have de-risked some of that in our progress.

And therefore, are more confident, than we expressed at the end of Q4 with sort of conservative €30 million to €50 million range, and we’re moving that up. So I'm not saying that the fact that you mentioned are not the fact that in the market, but relative to how we assess those in Q4, we are confident that we can safely move up the range.

Okay. And then with regard to your cost level, let me say from some to below €615 million, as I am well informed that does – let me say that does include let me say the expansion, so you're running rate that's €149 million indicates €600 million , is that the calculation €600 million in the line plus €10 million for related expansion – further expansion?

Is that the correct idea?

Yes, the idea is correct. I don't comment on the exact numbers.

Otherwise, I would have given you an exact number. But yes, the logic is absolutely correct.

And we are totally on top of our cost, at least more even focused than we anticipated at the start of the year, and it's proving to be productive and we'll have a payout on that, I hope.

And do you see more opportunities in cost containment or not in the coming months?

Yes, we do. And it's an aggregate of well, all opportunities that are being scrutinized constantly.

And it's across a wide range of activities. The only thing that doesn't work is the utilities.

The utilities last year was extremely low, because of the prevailing commodity prices. And now we like everybody are phased with utility bills that are higher than a year ago, but in aggregate, almost all the cost are pointing in the right direction, what – well, it could be even be better if we had low our utilities and regretfully in some places, the port authorities also decide it's a good moment to increase their rates or their real estate taxes.

And that is very unfortunate, certainly when business should be promoted, they decide to accept the opposite, which is unfortunate and I would say shortsighted, but that is reality.

Okay. And then my final question, if I'm allowed.

So on the effect of the winter storm in Texas, there is a direct effect in America and indirect too, did you calculate complete impact on your business of the winter storm in the quarter and maybe some impact on the second quarter?

No. What we did is we – well knowing yes, what we did is we assessed it at approximately €6 million, which is the combination of the – let's say the core business and some cost effects.

And when I say core business, I mean, the revenue, some cost effects, that €6 million is a goal for Mexico area number. So it's not a worldwide number, worldwide, I don't think it was a plus or a minus for us.

It just meant that products came from different source. Our customers starts from different locations, if they needed to find different supply points.

Europe winters was the one who responded to Europe is to Middle East, if you look at for instance, the Styrene market, the Styrene market, the majority of Styrene in Europe comes from the U.S., it comes from Houston, and it comes from – imports from Saudi are only 14%. And I'm talking that the – our average – Amsterdam, Rotterdam, Algeciras.

So if you have this interruption from the U.S., you will see that people like the Middle East will start ramping up a bit. As it happens, this is exactly the period where we are starting up our Styrene facility in the booklet.

So if you now have a market that is dislocated, that's a tough place to start. So that doesn't help, but we didn't put a number on the rest of the world.

Okay. Thank you.

Okay, it's going well, I think, is there any other questions?

Okay. Thank you all.

What resonates with me is the continued question about guidance and the rest is, I think more easy to handle almost the movements in the quarter and the outlook. As I said, we call it a good, but slow start of the year.

We've grown our business again by 5%, our initial first small steps in New Energy are now becoming reality. The portfolio is showing a more robust composition of EBITDA, i.e., we've replaced the EBITDA of assets that we sold would not create long-term shareholder value additionally with higher quality EBITDA.

And the ambition of the company over the quarter and over the year to stay away from that, but into a translation as – made the point. I do think it's fair.

We have debt of course, we always hesitate on that, but we will consider it made the point very eloquently, but it's not an issue point. Leave it with us again, we will think about it.

Thank you for attending. Thank you for taking the time and talk to you soon.