Q4 2019 pro forma
Q4 2019* Q4 2019* Q3 2019 Q4 2018 in EUR millions
298.8 298.8 312.4 317.0 Revenues
1,252.6 1,252.6 1,254.5 0% Results -excluding exceptional items- 204.8 196.2 202.4 180.7
Group operating profit before depreciation and amortization (EBITDA) 829.8 784.8 734.3 13%
132.1 131.8 132.6 110.6 Group operating profit (EBIT) 539.1 526.4 463.3 16%
93.8 97.9 91.1 78.8 Net profit attributable to holders of ordinary shares 357.8 364.1 289.5 24%
0.73 0.76 0.72 0.62 Earnings per ordinary share (in EUR) 2.80 2.85 2.27 23%

Results -including exceptional items-
204.7 196.3 393.7 183.0 Group operating profit before depreciation and amortization (EBITDA) 1,038.5 993.7 754.8 38%
132.0 131.9 323.9 110.8 Group operating profit (EBIT) 747.8 735.3 481.7 55%
100.0 104.2 280.6 80.4 Net profit attributable to holders of ordinary shares 571.0 577.4 254.5 124%
0.78 0.81 2.20 0.63 Earnings per ordinary share (in EUR) 4.47 4.52 1.99 125%

172.3 185.7 190.4 Cash flow from operating activities (gross) 709.7 687.0
-149.3 225.0 -231.0 Cash flow from investing activities (including derivatives) -256.1 -589.4

Additional performance measures
269.5 258.4 231.8 206.5 Proportional EBITDA -excluding exceptional items- 980.7 929.7 821.6 19%
84% 82% 85% Occupancy rate subsidiaries 84% 86%
34.4 35.5 37.0 Storage capacity end of period (in million cbm) 34.4 37.0
12.5% 12.5% 12.0% 10.8% Return on Capital Employed (ROCE)** 12.4% 12.4% 11.6%
4,223.8 4,223.8 4,252.2 4,095.5 Average capital employed** 4,247.3 4,247.3 4,005.7
2,335.3 1,770.4 2,319.6 1,825.0 Net interest-bearing debt 2,335.3 1,770.4 1,825.0
2.75 2.75 2.81 2.49 Senior net debt : EBITDA (frozen GAAP) 2.75 2.75 2.49
* Pro forma excludes the IFRS 16 effects to allow comparison on the results to prior year
** Roce and Capital employed definition have been applied consistently for all periods presented and is not affected by IFRS 16

Highlights for full year and Q4 2019 -excluding exceptional items-

Full year EBITDA of EUR 830 million (2018: EUR 734 million) increased by EUR 96 million, reflecting good aggregate business (including new assets) performance of EUR 37 million, positive currency translation effects of EUR 14 million and positive IFRS 16 effects of EUR 45 million.
Occupancy rate of 84% (2018: 86%) reflected IMO 2020 capacity conversions during the year and ongoing market conditions at oil hub terminals.
Full year EBIT of EUR 539 million (2018: EUR 463 million) increased by EUR 76 million, including good performance from new assets, partly offset by hub terminals in Europe and Singapore, positive currency translation effects of EUR 11 million, lower depreciation (from terminals classified as held for sale) of EUR 22 million and positive IFRS 16 effects of EUR 13 million.
Return on Capital Employed increased to 12.4% (2018: 11.6%).
Significant increase in net profit attributable to holders of ordinary shares (24%) to EUR 358 million (2018: EUR 290 million), resulting in earnings per ordinary share of EUR 2.80 (2018: EUR 2.27).
The efficiency program to reduce Vopak's cost base is delivered; the cost level for 2019 amounted to EUR 633 million.
Q4 EBITDA of EUR 205 million (Q3 2019: EUR 202 million) reflected positive effects from settlements, good performance from converted IMO 2020 capacity and contributions from growth projects, replacing the EBITDA from terminals divested in September.
Q4 occupancy rate of 84% (Q3 2019: 82%) trended upwards following contracted IMO 2020 capacity coming into operations whereas adverse market conditions at oil hub terminals continued.
In the fourth quarter, new capacity was delivered from growth projects in Brazil, Mexico, Panama and Singapore.
Vopak announces a share buyback program to return EUR 100 million to shareholders following the completion of the divestment of the terminals in Algeciras, Amsterdam and Hamburg.

A dividend of EUR 1.15 (2018: EUR 1.10) per ordinary share, payable in cash, an increase of 5%, will be proposed during the Annual General Meeting on 21 April 2020.



Exceptional items 2019:

Total exceptional gains included in net profit amounted to EUR 213 million (2018: exceptional losses of EUR 35 million). This mainly comprised the aggregate divestment gains of terminals in Amsterdam, Hamburg, Tallinn and Hainan, a tax provision recognized in a joint venture in the Asia & Middle East division and an impairment recognized for the terminal in Quebec City in Canada.
Subsequent events:

In January 2020, the associate industrial terminal PT2SB in Malaysia repaid part of its preference share capital, which resulted in a cash inflow of EUR 85 million for Vopak in the first quarter of 2020.
On 31 January 2020, Vopak completed the earlier announced divestment of its 100% shareholding in the terminal in Algeciras, Spain generating a cash inflow of EUR 135 million in the first quarter of 2020.
On 12 February 2020, Vopak announced the expansion of the Vopak Shanghai - Caojing Terminal with 65,000 cbm for chemical gas products. This industrial terminal serves the chemical plants that are located in the Shanghai Chemicals Industry Park (SCIP) and its adjacent areas. The additional storage capacity has been fully rented out under long-term contracts and is expected to be commissioned in the second half of 2022.


Eelco Hoekstra, Chairman of the Executive Board and CEO of Royal Vopak commented:

Strong EBITDA and significant increase in earnings per share
Continued growth investments and EUR 100 million share buyback program
Portfolio well-positioned for future opportunities
Performance
2019 was a successful year for Vopak. We executed our strategy, realized strong EBITDA and significantly increased earnings per share.

Over the years 2017-2019, we have been transforming our portfolio through EUR 700 million divestments and EUR 1 billion investments in new growth projects. We successfully divested almost 5 million cbm of oil capacity, mainly in Europe, and bolstered our hub positions. We prepared our oil hub terminals for IMO 2020 and expanded storage capacity in future growth markets. In 2019, we expanded our LNG business in Pakistan and Colombia and started the construction of new industrial terminals in China and the US. Our portfolio is well-positioned for future developments. As part of our new energies focus, we made our first investments in hydrogen and solar.

Delivery of our digital strategy has progressed well. We continued the roll-out of our new cloud-based system for our terminals, as part of broader efforts to develop our digital architecture. Growing Vopak’s digital capabilities and using data are key to our short-term performance and long-term value creation, as well as to our position as the leading independent tank storage company.

Looking ahead
We continue the course we set in previous years. We focus on performance and value.

Our financial framework and priorities for cash are unchanged. We will use the majority of cash from recent strategic divestments to grow our portfolio. We propose to increase our annual dividend by 5% over 2019 and announce today a EUR 100 million share buyback program to increase our distribution to shareholders. The share buyback program is complementary to our continued investments in growth, sustaining, service improvement and IT capex.

We aim to grow EBITDA over time with new contributions from growth projects and IMO 2020 converted capacity and replace the EBITDA from divested terminals, subject to general market conditions.
In the period 2020-2022, Vopak may invest EUR 750 million to EUR 850 million in sustaining and service improvement capex, subject to additional discretionary decisions, policy changes and regulatory environment.
To complete the Vopak’s digital terminal management system build and roll-out, Vopak expects to spend annually EUR 30 million to EUR 50 million in IT capex over the period 2020-2022.
We continue with further strengthening our cost culture and expect to compensate for annual inflation in our cost performance.
We will continue to look for attractive ventures in new energies and innovative technologies.
Growth investment for 2020 could amount to EUR 300 million to EUR 500 million.
For 2020 and beyond, we will keep storing vital products with care to make a meaningful contribution to a more sustainable society, enabled by our financial performance.

Link to video of CEO and CFO commenting on Vopak's FY 2019 results

Link to Vopak's report and presentations where the Annual Report 2019 is published

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https://www.vopak.com/investors/reports-and-presentations

Vopak announces share buyback program to return EUR 100 million to shareholders
Today, Vopak announces the start of a share buyback program to return EUR 100 million to shareholders following the completion of the divestment of the terminals in Algeciras, Amsterdam and Hamburg in line with Vopak’s strategy. This divestment program was completed on 31 January 2020.

Vopak will execute the share buyback program with the purpose to reduce its issued capital. The share buyback program will start 13 February 2020 and is expected to be completed within 2020. The share buyback program will be executed under the existing authority granted at the 2019 Annual General Meeting on 17 April 2019, and the authority (if granted) by the 2020 Annual General Meeting on 21 April 2020. Under these limits the share buyback program cannot exceed 10% of Vopak’s issued capital.

The share buyback program will be executed by an independent intermediary, allowing the execution of open market transactions during open and closed periods.

In connection with the share buyback program, HAL Holding N.V. will proportionally sell part of its current shareholding in Vopak in order to maintain its interest at the current level. Vopak will instruct an independent intermediary to match the open market trades under the share buyback program by purchasing on Vopak’s behalf shares from HAL Holding N.V., at the same average price per share as the open market trades, in proportion to its current shareholding. The size of the buyback program of EUR 100 million includes the shares to be bought from HAL Holding N.V.

The share buyback program is separate from any share transactions Vopak may execute to cover obligations under the long term incentive programs for employees.

Vopak will provide weekly updates on the progress of the share buyback program through press releases and transaction details on Vopak’s website for the duration of the program.

This press release contains inside information as meant in clause 7 of the Market Abuse Regulation.

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