Koninklijke Vopak Uns/Adr

Hello and welcome to the Royal Volpac Fully Year 2024 update. Throughout the call, all participants will be in a listen-only mode, and afterwards, there will be a Q&A session. This call is being recorded. I am pleased to present Tatiana Topsyu, Head of Investor Relations. Please go ahead with your meeting.

Good morning, everyone, and welcome to our full year 2024 results analyst call. My name is Fabiola Tocciu, Head of IR. Today, our CEO, Zsuzsanna Grishel, and CFO, Mihail Hilsin, will guide you through our latest results. We will refer to full year 2024 analyst presentation, which you can follow on screen and download from our website. After the presentation, we will have the opportunity for the Q&A. A replay of the webcast will be made available on our website as well. Before we start, I would like to refer to the disclaimer content of the forward-looking statements, which you are familiar with. I would like to remind you that we may make forward-looking statements during the presentation, which involve certain risks and uncertainties. Accordingly, this is applicable to the entire call, including the answers provided to the questions during the Q&A. And with that, I would like to hand over the call to Dick.

Thank you very much, Fatrona, and good morning to all of you joining us in the call today. Let's move to the key highlights for the year 2024, starting on the left side with improve. In 2024, the need for our services remained strong across the portfolio. I'm very happy that that resulted in a proportional occupancy of 93%. And we did that by also continuing to serve our customers well. We reported improved financial performance, growing our proportional EBITDA. Adjusting for divestments and negative currency effect, our proportional EBITDA increased by 9% year-on-year to 1.17 billion euro, the highest result on record. Also, our operating cash return improved year-on-year to 15.1%, driven by strong performance of the business and contributions from growth projects, as well as lower capital employed due to the divestments done in 2023. Let's take a look at growth. growing our footprint in gas and industrial terminals. We made significant investments in Canada, India, and the Netherlands this year. And in all these countries, construction is ongoing to support energy security, energy affordability, and allowing the switch to more sustainable energy. We're also expanding our industrial terminals in China and Saudi Arabia. More than €500 million have been committed in gas and industrial investments in 2024, reaching a total of more than €1.2 billion on a proportional basis since we announced our strategic direction in 2022. Looking ahead, we see solid opportunities to further grow with, for example, an open season for the storage of LNG, after 2027 at AIMS energy terminal in the Netherlands, and positive developments in South Africa related to a potential energy import terminal. Let's move to accelerate towards new energies and sustainable feedstocks. We are focused on repurposing existing capacity for low-carbon fuels and feedstocks, as we did in Singapore, the US, Brazil, and the Netherlands during 2024. We're excited about the first steps of a second battery energy storage project here in the Netherlands. Our commitment remains unchanged to support our customers in the ongoing energy transition and invest when opportunity arise at the right returns. Move on to some of the dynamics of the key markets in which we operate and how they impact the demand for our infrastructure services. To start with the gas markets. We saw continued high utilization of our LNG infrastructure, and LPG demand is growing around the world, driven by petrochemical and residential demand in, for example, India. During 2024, our SPEC LNG terminal in Colombia had a strong performance, and that was driven by an increase of LNG imports as a result of energy imbalances in the country. The market for low-carbon fuels like SAF and renewable diesel remains in oversupply, anticipating increasing mandates. The demand for infrastructure of these fuels and feedstocks continues to be robust, supporting the longer-term prospects. New supply chains for new energy projects, such as ammonia as a hydrogen carrier and CO2, are developing at a somewhat slower pace than anticipated. As the direction of the energy transition remains unchanged, We continue to be well positioned to capture growth opportunities when they arise. Fundamentals in the energy markets remain healthy. Our oil hub terminals in Singapore Straits, Fujairah, and Rotterdam continued to have a strong demand. The need for local imports are driving a stable performance in oil distribution terminals. And lastly, chemical markets continue to be oversupplied, however, the impact on our chemical distribution terminals remains limited. Our industrial terminals connected to manufacturing clusters showed solid throughput levels driven by new capacity that was commissioned. Continuing on to the next slide and looking further into the financial performance of our portfolio across the different product markets. The divestment impact compared to 2023 was fully offset by growth contributions. gas and oil markets showed firm demand for our infrastructure, especially in the oil hubs. Even though chemical market performance is mixed with the strength in the U.S., contrasting the weakness in Asia and the Middle East, demand for our infrastructure remains healthy. The proportional EBITDA of our existing terminals increased by 96 million 96 million euros, excluding the impact of currency translation and divestment impact. The increase was mainly related to growth projects contribution of 75 million euros. And strong performance of our existing terminal, which was partly offset by increased expenses. Across the network, we were able to record an improved proportional EBITDA margin of 57%, slightly up from last year. Next up, financial performance. we have continuous focus on our sustainability performance. And to start with safety, our personal safety performance remains strong. And we keep an improving trend on our process safety event rate. With regards to emissions, we made further steps to reduce our scope one and two emissions compared to our baseline in 2021. This was mainly driven by investments in electrification and switching to green electricity for our operations. We made progress in increasing diversity in management, where women now represent 22% of our senior management. The next slide shows, this map shows the main developments ongoing around the globe. We're proud to see our industrial terminal in Weizhou in China now fully operational, and the expansion of industrial capacity in Xinzhou in China, and at Chemtank in Saudi Arabia. Major LPG and LNG new construction projects are ongoing in Western Canada and in the Netherlands. Repurposing existing capacity in multiple locations is a proof of our ability to adjust to evolving markets. We positioned ourselves well by acquiring additional land in the Port of Alamoa in Brazil, where we can develop projects like we are doing in Volpac Energy Park in Antwerp, Belgium. Access to land in strategic locations coupled with our capabilities to develop new capacity drives growth in the future. Let's look forward. And looking forward, we see that we are well positioned to further grow the business while creating shareholder value and returns. Market fundamentals continue to be strong, and the demand for infrastructure continues to increase. we see ample opportunity to continue our path to grow in industrial gas and new energy space. A strong balance sheet, driven by good business performance, supports the funding of these opportunities. In India, we are exploring options to fund growth via a potential local listing. As said, we remain committed to generate shareholder returns. This is further evidenced by the proposed dividend increase to €1.60 per share and the initiation of a new share buyback program of up to 100 million euro in 2025, following the program we executed last year of 300 million euro. To summarize, we delivered strong results with a record proportional EBITDA and high occupancy rate. We executed on a strategy to grow business, especially in gas and industrial terminals, and a well-diversified portfolio of terminals delivers healthy cash generation, supporting our growth ambition, and returning value to shareholders. And lastly, we are committed to invest in opportunities that the energy transition provides. With that, I want to hand it over to our CFO, Michiel Vilsing, who will give you more insights on the financial aspects of 2024 and for the last quarter. Michiel.