Koninklijke Vopak Uns/Adr

Hello and welcome to the Royal Volpac first quarter 2025 update. Throughout the call all participants will be in listen only mode and afterwards there will be a question and answer session. This call is being recorded. I'm pleased to present Fationa Topsyu, Head of Investor Relations. Please go ahead with your meeting.

Good morning everyone and welcome to our Q125 results analyst call. My name is Fationa Topsyu, Head of IR. Today, our CEO, Jules-José Grichel, and CFO, Mihail Hilsing, will guide you through our latest results. We will refer to the Q125 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 statement 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 questions during the Q&A. With that, I would like to turn over the call to Woudik.

Thank you very much, Fachona, and a very good morning to all of you joining us in the call. Following our strategy update we presented at Capital Markets Day in March, I want to highlight our key strategic priorities before we dive into this quarter's results and achievements. First, we're focused to continue to improve the performance of our existing portfolio. This includes both our sustainability efforts and our financial results, with an operating cash return target for the portfolio above 13%. We have the ambition to invest an additional €1 billion in our industrial and gas terminals, bringing our total investment in this area to €2 billion since 2022. Third, we reconfirmed our ambition to invest €1 billion to accelerate towards energy transition infrastructure. Our improve, grow and accelerate strategy underpins our resilient business model and provides a solid foundation to continue delivering value. Now let's move into the key highlights of the first quarter of this year. First, related to improve. In the first quarter of this year, the demand for our services remained healthy across the portfolio, resulting in a proportional occupancy of 92%. And we continued to serve our customers well. We reported strong financial performance, growing our proportional EBITDA to €300 million, supporting an operating cash return of 16.8%. We're pleased with the signed agreements on the issuance of the new debt in the form of a USPP, which provides additional financial flexibility. Our joint venture AVTL in India has been granted conditional approval by the regulatory authorities for its proposed IPO, and we are confirming our full-year outlook, subject to market uncertainty and currency exchange movements. Our next strategic pillar, growing our footprint in gas and industrial terminals. Earlier this quarter, we announced an expansion for our Thai tank terminal in Thailand. This investment, which supports the import of ethane, is strengthening our industrial position in the Madhaput industrial region. We've also commissioned expansion capacity in China and India. Let's move to the acceleration towards energy transition infrastructure. We're partnering with OQ in Oman for industrial and energy transition infrastructure developments in the future. And today, we're pleased to announce an important expansion project in Alamoa, in Santos, Brazil, related to new capacity for low carbon fuels and feedstocks. The project aligns with the growing demand for energy transition infrastructure in the region. Furthermore, we're taking in another step forward in electricity storage with the acquisition of a 100% share in a battery development company in the Netherlands. Our commitment remains unchanged to actively support our customers with infrastructure for the ongoing energy transition and to invest when opportunities arise at the right returns. Now, let's look at our financial performance. We see an overall strong performance. slightly higher this quarter than the same period last year. Gas markets remained strong, though our proportional EBITDA was down due to planned out-of-service capacity and the technical issues at Eemshaven, which was not the case in Q1 last year. The industrial terminals performed well, with solid throughputs year-to-date. In addition, we saw growth contributions from newly commissioned capacity, like Weizhou in China. our chemical distribution terminals operated in a stable market environment. However, it's important to note that underlying conditions in chemical markets, especially in parts of Asia, remained soft. Terminals storing and handling oil products performed strong. Global uncertainties and dynamics continue to drive the need for our infrastructure services. All in all, this has led to an increased proportional EBITDA of €300 million, and a strong operating cash return in the first quarter of 2025. Our terminal portfolio is well diversified in terms of geography, products, and contract duration. As you can see on this slide, our global portfolio is well spread over the globe in both mature and emerging markets. Approximately 15% of AIBEDA comes from the US and Canada, 30% from Europe, and around 40% east of Suez. of which 8% from China and North Asia. Also, from a product perspective, we even restore and handle products for the energy and manufacturing markets. And looking at our commercial diversification, we have a strong portfolio of long-term contracts, with around 70% of our contracts exceeding three years in duration. Around 80% of our revenues has a fixed take-or-pay nature. Our well-diversified network ensures stable returns also in uncertain and dynamic times. Across the markets we operate in, there is uncertainty on trade tariffs. Wopak's strength lies in a well-diversified terminal portfolio, geographically by product and contract duration. Our infrastructure solutions have historically supported the dynamic nature of supply chains and provided the security of supply for our customers. We currently foresee limited direct impact on VOPAC in the short term. Our terminals in the US serve mainly the domestic flows and two-thirds of the proportional revenues from our China business come from industrial terminals with contracts longer than 10 years. We allocate capital and resources to navigate this volatile macroeconomic environment and continuously monitor developments, acting as needed based on their impact. the situation is evolving and remains dynamic. Considering our current estimation of the impact of these developments, we are confident in reaffirming our full year outlook for proportional EBITDA between 1.15 and 1.2 billion euro, subject to market uncertainty and currency exchange movements. Building on a proven track record of strategic execution, we're well positioned to capture growth opportunities in gas and industrial infrastructure, as well as infrastructure for the energy transition. This quarter, we announced three projects, totaling another 209 million of investments. For our largest projects, such as REEF in Canada, we have a large part of the costs locked in, making us less exposed to market volatility. We made significant progress in our growth investments, committing 1.2 billion euro over the last three years. This puts us firmly on track to meet our ambition of investing €3 billion in growth initiatives by 2030. This quarter, we delivered expansion capacity in China and India. At our Chaoqing terminal in China, we expanded with 110,000 cubic meters of industrial capacity, supporting our customer there. Also in India, with our AVTL joint venture, we keep growing. Two locations in Mangalore and Mumbai commissioned new capacity for liquid products. Brownfield expansions are attractive growth opportunities, since they benefit from common infrastructure and drive synergies. Now let's move to Thailand. In Thailand, our Thai tank terminal within the Maptaputh industrial cluster, we have announced an industrial capacity expansion for storage and handling of ethane. Volpac's share of the investment is around 130 million euro. The project will increase the capacity of the terminal by 160,000 cubic meters and is underpinned by a 15-year contract. Upon commissioning of the capacity, which is expected in 2029, the terminal will deliver attractive operating cash return. Moving on to a strategic pillar focused on accelerating the development of energy transition infrastructure. We've taken a final investment decision for an expansion in Santos, Alamoa in Brazil. We will develop 66,000 cubic meters of capacity for low carbon fuels and feedstocks to support the local ethanol market. Also, we acquired 100% share in a battery development company in the Netherlands. This company owns land and has the permits and grid connection to develop a large scale battery to store electricity. an opportunity we're excited about. Looking to the Middle East, we've established a strategic partnership in Oman. Our partner is OQ, a significant player in the region. In an exclusive partnership, we will explore future developments of both industrial and energy transition infrastructure. And we're looking forward to a successful partnership in Oman, which is a new country for Volpar. So to wrap it up, We did have strong results this quarter with a proportional EBITDA of €300 million and an operating cash return of almost 17%. Our portfolio is well diversified and resilient to ongoing uncertainties and macroeconomic dynamics. And we keep executing on our growth strategy by commissioning new capacity and announcing multiple growth investments. With that, I'd like to hand it over to Michiel to give more details on the numbers.