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Royal Vopak: Capital Markets Update

27 November 2018 - published 7:00 CET

Today, Royal Vopak (Euronext: VPK) hosts its Capital Markets Day for shareholders, investors and analysts in Houston, the United States. The update features presentations on Vopak's strategy execution and financial framework. The presentations are available through Vopak's website.

Vopak's strategy execution
The 2017-2019 strategy execution, set towards further growth and performance delivery is well on track. Capital allocation decisions are shifting the portfolio further towards industrial, chemicals and LNG, LPG and chemical gases terminals with access to further growth opportunities.
Vopak is confident that it will deliver short-term performance through focus on commercial efforts and cost management while managing long-term value through execution of growth projects, new business development and portfolio management together with its digital investment program. Major expansion projects are currently under development in Malaysia, Canada, Brazil, and South Africa. Commissioning of new chemical capacity in Deer Park, Houston, the United States, starts this week.

Robust financial framework
Vopak aims to deliver strong cash flow generation and is committed to a disciplined capital allocation. The focus on capital efficiency results in an expected return on capital employed (ROCE) between 10% and 15%. Vopak targets a robust balance sheet with sufficient financial flexibility within a leverage range of 2.5 to 3.0 times net debt to EBITDA and can for a period be outside this range depending on capital allocation choices. The strategy is executed with a balanced approach between allocating capital to growth opportunities, an efficient and robust capital structure and distributing cash to shareholders. In the 2017-2019 period, Vopak will invest a minimum of EUR 950 million in growing its well-diversified portfolio and new investment decisions may add to this number.

Shareholder dividend
Vopak will continue to manage the portfolio in line with its strategy and create shareholder value through further allocation of free cash flows to value accretive growth. To reflect its strong cash flow generation and growth opportunities, Vopak will update its dividend policy to pay an annual stable to rising cash dividend in balance with a management view on a payout ratio range of 25-75% of the net profit and subject to market circumstances.

Strategic review
Vopak's strategic review and testing of the market value of its terminals in Algeciras, Amsterdam, Hamburg and Tallinn, as announced in the Q2 2018 press release, is progressing on schedule.
 
Direct link to the page where the Capital Markets Day presentations are published including an update on the financial effect of applying IFRS 16 Lease accounting as per 1 January 2019.

Plenary management presentations in Houston will start at 08:30 am CST (15:30 CET) until approximately 11:30 am CST (18:30 CET) and can be followed via an on-demand audio webcast on Vopak's corporate website www.vopak.com.

For more information please contact:
Vopak Press: Liesbeth Lans - Manager External Communication,
Telephone: +31 (0)10 400 2777 | e-mail: global.communication@vopak.com
Vopak Analysts and Investors: Laurens de Graaf - Head of Investor Relations,
Telephone: +31 (0)10 400 2776 | e-mail: investor.relations@vopak.com

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