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Archive press release Vopak 2001 Results
Rotterdam, February 28, 2002Koninklijke Vopak N.V. (Royal Vopak) announces the following results for 2001:
1 ) EBITDA excluding other operating income. 2 ) Average historical purchase value of intangible and tangible fixed assets, financial fixed assets, working capital and the goodwill paid in prior years. 3 ) EBITDA, excluding other operating income, stated as a percentage of average gross capital employed, excluding tangible and financial fixed assets that do not generate operating income. 4 ) Before amortization and excluding extraordinary items after income taxes. 5 ) Afer amortization of goodwill. Vopak achieved a net profit in 2001, before amortization of goodwill and before extraordinary results, of EUR 132.1 million (2000: EUR 160.1 million). Divestments led to a net extraordinary income of EUR 51.0 million. Extraordinary charges amounted to EUR 129.4 million. Net income for holders of common shares (after deduction of preferred dividends) amounts to EUR 35.6 million (2000: EUR 160.1 million). This translates into earnings per share of EUR 0.70 (2000: EUR 3.15) Earnings per share (before amortization of goodwill and before extraordinary results) amounted to EUR 2.61 (2000: EUR 3.15), while operating cash flow per share was EUR 7.87 (2000: EUR 3.61).Chairman’s statement Gary Pruitt, Chairman of the Executive Board:’2001 was an eventful year in many respects. Vopak has clearly felt the global decline in economic activity. After a positive first six months, the negative effects of the economic climate became increasingly noticeable, especially in our chemical distribution activities.The experiences of the past year have made the need to focus on improving the fundamentals of our core activities clear. Independently from each other, tank storage and chemical distribution each are market leader in their respective sectors. We recognize that they possess common features as to product knowledge and service expertise towards customers and suppliers in the oil and chemical industry. However, the expected synergies between the two core activities within the value chain have proven to be limited, because of the differences in the way of doing business, the specific economic drivers, and the general business models of each of these two core activities.Therefore our first priority will be to continue to strive for:
The objectives that we have identified earlier, such as stringent cost controls and increasing our efficiency, optimization of our fixed assets network, reduction of our interests in the shipping industry, and disposal of non-core activities, will continue to be pursued. We are today announcing the beginning of an expansion in our Asian logistics business by participating in an industrial terminal bulk storage project in Shanghai, China, in conjunction with projects announced by key producer partners. The project will be undertaken with a joint venture partner and will be a significant enhancement to our logistics network. Due to the deterioration of the economic environment in the second half of 2001 and the earlier announced one-time charges, a dividend for holders of common shares this year will not be proposed. This will enable the company to grow and further solidify its leadership position of its core businesses in order to enhance long-term shareholders value. Management’s strategic review of the company is progressing well. In an effort to be as transparent as possible, we will share the results of this review with our stakeholders prior to the shareholders meeting scheduled on April 24, 2002.’ Logistics The global infrastructure of tank storage terminals and transport services has been strengthened through the expansion of the terminal network in Finland, Singapore, Malaysia, Japan and China. Storage and transport of chemicals, gases, and edible oils in Europe, together with Logistic Services, were combined during the course of the year into a single organization under one management team. The activities in the field of Logistic Services have been enhanced through the acquisitions of Van Wellen in Antwerp and A.P.C.S. in Australia and the expansion of activities in the fields of waste management and rail transport management in the United States. Also, we have booked solid progress in our SHE policy. The accelerated optimization of business processes in logistics has not only led to improvement of services on behalf of our customers, but also to savings amounting to approximately EUR 22 million. In 2000 such savings amounted to EUR 13 million. The various companies that belong to this activity have been fully integrated, and the subsequent improvement programs are now part of the regular business processes. It is therefore no longer possible to identify the synergy savings specifically resulting from the merger. As from 2002 we will thus no longer report them separately.Chemical Distribution Through the acquisition of Ellis & Everard, we have solidified the basis of our chemical distribution activities in both the United States and Europe. The integration of Ellis & Everard with Vopak’s existing distribution activities have been completed according to plan. In North America, 37 distribution centers were merged with existing facilities, so that Vopak now has a network of 140 distribution centers, covering all of North America. Vopak USA and Vopak Canada can now provide a truly coast-to-coast distribution activity. Also in the United Kingdom the existing activities were merged according to plan. This has led to a total cost reduction for chemical distribution activities of EUR 5 million in 2001. Total savings are expected to reach at least EUR 17 million in 2002. Outlook 2002 The financial results for 2002 will heavily depend on the pace and extent of economic recovery in North America and Europe. At this moment it is therefore not possible to make any concrete statement about the result that may be expected for this year. After a disappointing year we are on the right track. Cost control, further operational improvements, and expansion of the services within our two core activities will further enhance the base of our two core activities.Financial calendar The Annual General Meeting will be held on April 24, 2002. The half-year 2002 results of Royal Vopak will be announced on August 12, 2002, before opening of the stock exchange.Profile Vopak As market leader, Vopak offers logistics and distribution services to the chemical and oil industries and end-users of chemicals throughout the world. The organization therefore operates a global logistics network of liquid bulk storage terminals, tankers and tank containers and a North American and European network of distribution warehouses. Vopak: the link between producer and end-user of chemicals and oil products. For further information: Koninklijke Vopak N.V.
E- mail : corporate.communication@vopak.com Website : www.vopak.com Annexes:
(Live broadcast of the press conference of the Year-end 2001 results can be viewed on Vopak’s website (www.vopak.com) today, February 28, 2002, at 10.00 AM. The presentation will be available on Vopak’s website (www.vopak.com) as from 09.45 AM). ANNEX 1: REVIEW OF RESULTS IN 2001 Net sales by activity
Vopak realized a sales increase in 2001 by 35.9% to EUR 5,639.7 million (2000: EUR 4,150.7 million). This increase relates almost entirely to the acquisition of Ellis & Everard, as organic growth was practically flat. Exchange rate movements had a small negative effect of 0.4%. Operating income by activity Oil & Gas Logistics
The worldwide demand for storage capacity and tank shipping for oil products remained at a solid level. The positive trend that was set in 2000 continued and Vopak benefited especially from the global favorable market situation in mineral oils. Utilization rates and throughputs were high. The contract portfolio improved in number and contract duration, as well as in rates. Chemical Logistics
Also in Chemicals Logistics, the utilization of storage capacity remained at a solid level. In Chemicals Logistics, demand and supply were in better balance compared to 2000. Vopak enhanced its position in Asia through a number of acquisitions. Chemical Distribution North America
Business results in Chemical Distribution in North America suffered severely from various causes. Firstly, the combination of the economic recession and excess production capacity in the chemical industry resulted in pressure on volumes and product pricing, which in turn impacted achievable gross margins. Secondly, the integration of the newly acquired Ellis & Everard took extra efforts. During the fourth quarter, the effects of the tragic events of 11 September also clearly played a role. Sales rose in 2001 by EUR 851.3 to EUR 3,152.5. This increase is almost entirely attributable to the acquisition of Ellis & Everard. In Canada, where Vopak has a leading position, the company again achieved excellent results. Similarly in the market for chemical pesticides, Vopak was able to improve its solid position even further, achieving increased sales and operating profits. Chemical Distribution Europe
In Europe, the weakening of the economy impacted especially the British and Northern European markets, while sales in Southern Europe came under pressure after the third quarter. Net sales in Chemical Distribution Europe increased by 58% to EUR 1,676.7 million. This increase is almost entirely attributable to the acquisition of Ellis & Everard. Merger synergies The accelerated optimization of business processes in Logistics has not only led to improvement of services on behalf of our customers, but also to savings amounting to approximately EUR 22 million. Such savings amounted to EUR 13 million in 2000. The various companies that belong to this activity have been fully integrated, and the subsequent improvement programs are now part of the regular business processes. It is therefore no longer possible to identify the synergy savings specifically resulting from the merger. As from 2002 we will no longer report them separately. Extraordinary items Divestments resulted in a net extraordinary profit of EUR 51.0 million. This is offset by extraordinary expenses totaling EUR 129.4 million for the write-off of an IT system for the European distribution organization, the write down of the investment in the shipping company Broström, and non-recurring restructuring costs in connection with the integration of Ellis & Everard. On balance, the income statement thus reflects extraordinary expenses amounting to EUR 78.4 million. The net profit in 2001 before amortization of goodwill and before extraordinary results is EUR 132.1 million (2000: EUR 160.1 million). Earnings per share (excluding extraordinary items after taxes) amounted to EUR 2.61 (2000: EUR 3.15), while operating cash flow per share amounted to EUR 7.87 (2000: EUR 3.61). Divestments Divestment in 2001 included Theodora Tankers, the European liner agency activities, one third of Vopak’s 30% interest in the Heavy Transport Group (HTG), the dry-cargo terminals in the United States, and the tank terminals in Hastings (near Melbourne, Australia), Richmond (United States), Dalian (China) and Marseilles (France). These disposals resulted in a book profit of EUR 51.0 million. We expect to reduce our 50% interest in Broström within the near future. Investments Vopak’s net investments in 2001 totaled EUR 520.0 million, distributed as follows across the various activities:
Taxation The effective tax rate on ordinary income for 2001 amounts to 35.4%, which is 4.3% more than in 2000 (31.1%). The increase in tax rate is mainly caused by goodwill amortization, which is not deductible for tax purposes. Shares outstanding As at December 31, 2001, 25,400,000 financing preference shares and 52,436,976 common shares in Vopak were outstanding; 1,736,645 common shares are still in treasury stock in connection with existing stock option plans. Earnings per share have been calculated on the basis of the average amount of outstanding shares of 50,612,675. Annual General Meeting The Annual General Meeting of Shareholders will take place at Hilton Hotel, 10 Weena, Rotterdam on Wednesday April 24, 2002, at 15:00 hours. ANNEX 2: KEY FIGURES
1 ) net debt includes guarantees replacing credit and excludes subordinated loans ANNEX 3: SUMMARY OF EBITDA PER HALF YEAR
ANNEX 4: CONSOLIDATED INCOME STATEMENT
ANNEX 5: CONSOLIDATED BALANCE SHEET AS AT DECEMBER 31
ANNEX 6: CONSOLIDATED STATEMENT OF CASH FLOWS
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