Royal Vopak Annual Report 2002
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Royal Vopak N.V. Annual Report 2002 Vopak Jaarverslag 2002 Jaarverslag Vopak CO/205NL/A/04-2003 Key figures Main activities Net sales h 796.2 million Chemical tank terminals Net income h 111.3 million Oil tank terminals Earnings per Shipping common share* h 1.62 Other logistic services Number of employees 4,075 Tank storage facilities 66 Coastal tankers 31 Barges 145 *excluding extraordinary items after income taxes Royal Vopak Annual Report 2002 This annual report, containing the report of the Executive Board and the Annual Accounts, is also available in Dutch. In the event of textual inconsistencies between the English and the Dutch versions, the latter shall prevail. Copies of the Dutch and English versions of this annual report can be obtained from Royal Vopak, Corporate Communication & Investor Relations: Phone : +31 10 4002778 Fax : +31 10 4047302 E-mail : [email protected] The annual report is also available on the Internet: www.vopak.com Koninklijke Vopak N.V. (Royal Vopak) Westerlaan 10, 3016 CK Rotterdam P.O. Box 863, 3000 AW Rotterdam Phone : +31 10 4002911 Fax : +31 10 4139829 E-mail : [email protected] Website: www.vopak.com Registered at the Company Registry of the Rotterdam Chamber of Commerce under number 24295332. Contents 3 Profile 41 2002 Financial Statements 4 The world of Vopak 6 Policy highlights 42 Consolidated financial statements 7 Key figures 8 Report of the Supervisory Board 42 Consolidated income statement 10 To our shareholders, customers, 43 Consolidated balance sheet at partners and employees 31 December, after proposed distribution of net income 12 Report of the Executive Board 44 Consolidated statement of cash flows 45 Group accounting policies 12 Financial performance 50 Notes to the consolidated income 19 Safety, health and environment statement 20 Organization and employees 54 Notes to the consolidated balance sheet 22 Information & communication technology 65 Financial statements 23 Review by division 65 Income statement 65 Balance sheet at 31 December, 23 Chemicals Logistics Europe & Africa after proposed distribution of net income 28 Oil Logistics Europe & Middle East 66 Notes to the financial statements 32 Asia 34 Logistics North America 72 Other information 35 Logistics Latin America 72 Auditors’ report 36 Risk management 72 Articles of Association provisions 38 Information for shareholders governing the distribution of net income 40 Corporate governance 73 Proposed distribution of net income 73 Stichting Vopak 74 Information on the Executive Board members 75 Information on the Supervisory Board members 76 List of most important company officers 77 List of most important group companies and equity participations 78 Five-year consolidated review 79 Glossary 2 ProfessionalsProfile in liquid bulk logistics Royal Vopak provides independent tank ● An effective ICT infrastructure. terminal capacity over the whole world ● A strong track record in terms of to the chemical and oil industries for strategic alliance with third parties. the storage of liquid chemical products ● Vopak’s development of integrated and oil products. Related to this, Vopak logistic concepts based on tank also provides a wide range of value- storage. added logistic services, such as tanker shipping, barging and ware- Vopak’s strategy concentrates on housing, independently or in co- further expanding and optimising its operation with strategic partners. network of tank terminals, providing The company is divided globally specialist logistic concepts and into five market regions and operates entering into strategic alliances that a network of 66 tank terminals with provide related logistic services. In the a combined storage capacity of short-term, Vopak aims to improve its approximately 19.4 million m3 in financial ratios by reducing the fixed 26 countries. assets involved in providing additional Vopak’s strength derives from a logistic services. combination of factors: ● A strong global infrastructure of In 2002, Vopak achieved net sales of tank terminals. EUR 796.2 million and a net income of ● Experienced and well-trained staff. EUR 111.3 million before dividend on ● Recognisable quality through Vopak’s cumulative financing preference shares. adherence to the highest industry At the end of 2002, the company had a standards. workforce of 4,075 employees. ● A strict policy regarding safety, Vopak’s shares are listed on Euronext, health and environment. Amsterdam, The Netherlands. Royal Vopak ANNUAL REPORT 2002 3 The world of Vopak 66 terminals in 26 countries Hub location Import/Distribution terminal Export terminal Industrial terminal Tankterminals Number Total capacity in m3 Africa 1 129,000 Asia 13 3,031,000 Australia 1 134,000 Europe 30 11,220,000 Latin America 10 671,000 Middle East 3 1,817,000 North America 8 2,353,000 Total 66 19,355,000 March 2003 Policy highlights Core features: ● Professionalism in service provision ● Safety, Health and Environment (SHE) ● Focus on tank terminals ● Additional demand-driven services ● Partnerships and strategic alliances with other service providers ● Long-term relationships with customers ● Decisive organisation with attractive career possibilities Financial objectives: ● Return on capital employed (ROCE) of 16% ● Net debt : EBITDA maximised at 2.5 : 1 Strategy Objectives Steps Status _ Expand and optimise _ Increase in number of _ New construction _ Additional capacity for terminal network existing terminals Fujairah, United Arab Emirates (300,000 m3) _ Additional capacity for Sebarok, Singapore (100,000 m3) _ Up-grading _ Product specialisation in Botlek _ Conversion of Europoort from crude oil to oil products _ Growth in Latin America _ Focus on industrial terminals _ Growth in Asia _ Build new terminals _ Construction of Shanghai terminal in Caojing, China started _ Establishing strategic alliances _ Provide integrated _ Strategic alliance with logistic concepts Broström _ Strategic alliance with Stolt-Nielsen in Asia _ Interstream Barging operational _ Improve financial ratios _ Reduction in net debt of _ Stringent cash flow _ Net debt at EUR 820 million at mid-2002 management 31 December 2002: to EUR 700 million EUR 763.5 million _ 2002 investments less than depreciation _ Selling non-strategic _ Clarkson sold activities _ COSM sold _ Reduce capital employed _ Broström participating in shipping activities and interest sold other related logistic services _ Pay-out ratio of 25-40% _ Dividend 29% of net income of net income for holders of common shares _ Reduction in expense levels _ Reduce overhead costs _ Head office staff reduced from 124 to 76 in stages _ Head office staff at one location (1st quarter 2003) 6 Royal Vopak ANNUAL REPORT 2002 Key figures Pro forma In EUR millions 2002 20011) Results Net sales 796.2 810.5 EBITDA including income from equity participations 308.6 348.9 EBIT 199.7 236.8 Net income 111.3 145.8 Net income for holders of common shares excluding extraordinary items after income taxes 88.3 107.4 Net cash flow from operating activities 110.5 233.1 Investments Net investments in tangible and financial fixed assets and group companies 1.1 31.8 Average gross capital employed2) 2,581.9 2,667.2 Average capital employed2) 1,586.6 1,667.8 Distribution of net income Dividend: Cumulative financing preference shares 6.9 6.9 Common shares 30.0 – Equity and financing Shareholders’ equity 466.4 339.0 Long-term debt 824.9 1,090.1 Net debt (including guarantees replacing credits) 804.6 1,082.7 Ratios ROCE 12.6% 14.2% Current assets : current liabilities 1.2 1.1 Net debt : EBITDA 2.6 3.1 Interest cover (EBITDA : net interest) 5.3 4.5 1) Unaudited 2) Including the historic (book-)value of the goodwill paid and excluding tangible and financial fixed assets not used to generate operating income Royal Vopak ANNUAL REPORT 2002 7 Report of the Supervisory Board Financial statements current form, a public-to-private Extraordinary General Meeting on We have pleasure in presenting to transaction and the divestment of one 17 June 2002 paved the way for two you the 2002 financial statements of the two core activities. At no time transparent, focused companies, of Royal Vopak, prepared by the during the review did we receive a each a market leader in its own Executive Board. These are the first realistic offer. segment and with its own strategy financial statements following the During the process, the Executive and company policy. transfer of the chemical distribution Board received assistance from a During the year under review, the activities to Univar N.V. The financial Strategic Committee, comprising Supervisory Board also considered statements were audited by KPMG members of the Supervisory Board. capital expenditures such as the Accountants N.V., the independent As part of the process, a number of large industrial terminalling project auditors, and discussed with them on criteria were developed to ensure near Shanghai, China, budgets, the basis of their report of findings. balanced and transparent decision- divestments, such as the participa- Their unqualified auditors’ report is making. The major criterion was the ting interests in Broström and included on page 72. We approved the creation and maintenance of long- COSM, the merger of the Dutch financial statements at our meeting of term shareholders value. pension funds, reorganisations, 5 March 2003 and recommend that Partly in the light of deteriorating global implementation of the ERP you adopt them. company results, we came to the project for the tank terminals, internal We approve the proposal of the conclusion that splitting off the control systems, composition of the Executive Board to add an amount chemical distribution activities in Executive Board, termination of the of EUR 74.4 million to the other combination with the rights issue of two-tier board company regime for reserves after the distribution of EUR 150 million was the correct large enterprises and other corporate EUR 6.9 million on the cumulative decision for the activities and would governance issues.