Superior Plus Corp · TSX:SPB
Superior Plus — Investor Day (June 2018)
89 slides from Superior Plus's investor day presentation, June 2018
Slide 1: Introduction
INTRODUCTION Luc Desjardins President and CEO Superior Plus Corp.
Slide 2: Forward-Looking Statements and Information
FORWARD-LOOKING STATEMENTS AND INFORMATION This presentation is for information purposes only and is not intended to, and should not be construed to constitute, an offer to sell or the solicitation of an offer to buy, securities of Superior Plus Corp. (“Superior"). This presentation and its contents
Slide 3: Agenda and Today's Presenters
AGENDA AND TODAY’S PRESENTERS Luc Desjardins President & Chief Executive Officer Introduction & Strategic Overview Andy Peyton President U.S. Propane Distribution U.S. Propane Distribution Greg McCamus President Energy Distribution Canadian Propane Distribution 3
Slide 4: Agenda and Today's Presenters
AGENDA AND TODAY’S PRESENTERS Shawn Vammen Senior Vice President Supply Portfolio Wholesale Propane Management Ed Bechberger President Specialty Chemicals Specialty Chemicals Beth Summers Executive Vice President & Chief Financial Overview Financial Officer Luc Desjardins President & Chief Executive
Slide 5: Introduction and Long-Term Strategy
INTRODUCTION AND LONG-TERM STRATEGY
Slide 6: Investment Highlights
INVESTMENT HIGHLIGHTS Proven History Executing management objectives Evolution 2020 Strategy updated Shareholder value and continue excellent Increase stakeholder relationships $100 to $150 Committed to delivering EBITDA from million operations growth by 2020(1) 5.7% Attractive dividend yield(1)(2)
Slide 7: Track Record of Success
TRACK RECORD OF SUCCESS Update since November 2016 Investor Day COMPLETED DEPLOYED RAISED INCREASED ANNOUNCED SETTLED RETURNED Acquisition of Over $140 $620 million EBITDA Transformational Reached Shareholder Canwest million in in debt from acquisition of agreement return 0f capital for financing op
Slide 8: Improved Financial Performance
IMPROVED FINANCIAL PERFORMANCE EBITDA from Operations (1) Adjusted EBITDA(1) AOCF per Share(1)(2) $75 million $100 million $0.61 per share or or $331.0 or 27% increase 44% increase 46% increase $352.1 $1.95 $276.5 $230.3 $1.34 (3) (3) (3) 2016 2018 2016 2018 2016 2018 (1) See “Non-GAAP Financial mea
Slide 9: On Track for Evolution 2020
ON TRACK FOR EVOLUTION 2020 426.5 2016 2017 2018 2020E Million(7) Canwest Synergies(3) Canwest(4) 352.1 $75 million in Specialty Chemicals(5) improvement(2) Tuck-in Acquisitions(6) Million(2) Organic Growth 306.8 Significant increase from 2016 and well Million on-track to achieve at least $100 milli
Slide 10: Evolution 2020 Keys to Success
EVOLUTION 2020 KEYS TO SUCCESS ORGANIC STRATEGIC CONTINUOUS TALENT GROWTH ACQUISITIONS IMPROVEMENT MANAGEMENT Digital Deploying Consistently Having the best innovation, capital to build identifying people aligned partnerships and up retail propane opportunities to with corporate geographic platform
Slide 11: Key Deliverables for 2018
KEY DELIVERABLES FOR 2018 Focus Safety and the environment $305 to $335 2018 Adjusted EBITDA guidance (1) million 2-3 More tuck-in acquisitions to be completed(1) $15 million Run-rate synergies from Canwest to be delivered(1) Closing the transformative acquisition of NGL’s NGL retail propane busines
Slide 12: NGL Propane Transaction Overview
NGL PROPANE TRANSACTION OVERVIEW • Total cash consideration of US$900 million (CAD$1.17 billion) subject to customary closing adjustments Transaction • Represents a purchase multiple of approximately 8.2x NGL Propane’s Overview normalized EBITDA(1) of US$110 million (CAD $143 million) including run-
Slide 13: Strategically Compelling
STRATEGICALLY COMPELLING • Aligned with Superior’s core strategy of investing in established Alignment businesses that are in desirable geographies and generate stable free cash flow • Expands Superior’s Energy Distribution footprint and scale in Expansion the U.S. and solidifies Superior as a leadi
Slide 14: Financially Attractive
FINANCIALLY ATTRACTIVE • High-quality, stable cash flow and earnings profile from a Cash Flow business with loyal customers and consistent gross margin profile • Strong cash flow accretion with the Transaction expected to be Accretive immediately accretive to AOCF before the realization of synergies
Slide 15: New Evolution 2020 Goals
NEW EVOLUTION 2020 GOALS $476.5 – 2016 2017 2018 2020E $526.5 million(10) NGL Propane Synergies(3) NGL Propane(4) Canwest Synergies(5) $426.5 Canwest(6) Specialty Chemicals(7) million(10) Tuck-in Acquisitions(8) Organic Growth $352.1 million(2) $306.8 million $276.5 million(1) Evolution 2020 updated
Slide 16: Energy Distribution
ENERGY DISTRIBUTION
Slide 17: North American Retail Energy Strategy Summary
NORTH AMERICAN RETAIL ENERGY STRATEGY SUMMARY Superior Plus is well positioned in the North American propane industry. U.S. PROPANE U.S. MARKET CANADIAN BUSINESS IS OPPORTUNITY IS PLATFORM IS RIPE FOR ATTRACTIVE PROVEN TRANSFORMATION • Most competitors have • Sales and marketing • Experienced new te
Slide 18: Energy Distribution Evolution 2020 Strategy
ENERGY DISTRIBUTION EVOLUTION 2020 STRATEGY ORGANIC CUSTOMER ACQUISITIONS CONTINUOUS GROWTH EXPERIENCE IMPROVEMENT • Differentiate through • Investment in Call • Growth through • Centralized Logistics Digital Offerings Centre Technology Tuck-ins • Real time delivery • Investment in a • Process • Int
Slide 19: North American Propane Market
NORTH AMERICAN PROPANE MARKET Propane Market Share in Canada(1) Propane Market Share in U.S, 2016(2) 13% 6% 40% 5% 52% 2% 1% 73% 8% Amerigas Ferrellgas Ferrellgas Suburban Suburban Superior(1) Superior Parklands Parkland(3) Other Other NGL Superior Superior Other Other Market Trends • Highly competi
Slide 20: Energy Distribution Overview
ENERGY DISTRIBUTION OVERVIEW Canadian Propane Distribution 2,005 270,000 1,776 12 Volume(1)(2) Customer Locations(3) Employees(3) Provinces & Territories (millions of litres) U.S. Propane Distribution 608 200,000 960 13 Volume(2) Customers(3) Employees(3) States(3) (millions of litres) (1) Canadian
Slide 21: Energy Distribution Progress
ENERGY DISTRIBUTION PROGRESS Accomplishments since Recent Acquisitions & Announcements November 2016 Investor Day 2018(1) NGL Propane LLC Northeast, Southeast and Upper Midwest U.S. Canada: Organic growth initiatives driving 2018 Pepco Propane 2%+ growth in 2017(2) Eastern Canada 2018 • Impact of sa
Slide 22: Retail Energy Distribution
RETAIL ENERGY RETAIL ENERGY DISTRIBUTION DISTRIBUTION
Slide 23: U.S. Propane Distribution
U.S. PROPANE RETAIL ENERGY DISTRIBUTION DISTRIBUTION Andy Peyton President U.S. Propane Distribution
Slide 24: Where We Were
WHERE WE WERE Sales Volume (1) Gross Profit (1) 13% In 2016 14% 29% Propane accounted for less than 48% 15% of the 38% volumes and 58% 48% of gross profit Retail Distillate Retail Distillate WholesaleDistillate Wholesale Distillate Propane Propane Propane Distillates Distillates Wholesale • Sales vo
Slide 25: U.S. Propane Distribution Progress
U.S. PROPANE DISTRIBUTION PROGRESS Accomplishments since Recent Acquisitions & Announcements November 2016 Investor Day 2018(1) NGL Propane LLC Northeast, Southeast and U.S. Restructured to focus on propane Upper Midwest U.S. • Completed five tuck-in acquisitions 2018 • Divested wholesale business t
Slide 26: U.S. Propane Distribution Overview
U.S. PROPANE DISTRIBUTION OVERVIEW U.S. Propane Distribution 608 200,000 960 13 Volume(1) Customer (3) Employees(3) States(3) (millions of litres) U.S. Propane Distribution Proforma NGL Propane 1,297 >516,000 >2,000 22 Volume(2) Customers(3) Employees(3) States(3) (millions of litres) (1) FY 2017 An
Slide 27: Where We Are Now (Q1-2018)
WHERE WE ARE NOW (Q1-2018) Approximately 40% of Q1-18 sales volumes were propane(1). Incorporating the wholesale business divestiture, propane volumes represent ~60% of volumes(2) • Propane sales Q1 2018 TTM Pro Forma Volumes(3) 2018 Q1 Update volumes are anticipated to • Divesture of the wholesale
Slide 28: NGL Propane
wr “ Superior Plus NGL PROPANE
Slide 29: U.S. Propane Distribution Footprint
U.S. PROPANE DISTRIBUTION FOOT PRINT Superior Plus Propane operates in 13 states in the Northeast U.S. • Propane market in current footprint was over 2.0 billion(1)(2) gallons and management estimated 3.5%(1)(2) market share • Our market share in our core states of NY, CT, PA, RI, OH, VA is estimate
Slide 30: NGL Expands U.S. Distribution Footprint
NGL EXPANDS U.S. DISTRIBUTION FOOTPRINT NGL Propane acquisition expands footprint to 22 states focused in the Eastern U.S. • Propane market in current footprint is over 2 billion(1)(2) gallons and we have 3.5%(1)(2) market share • Our new footprint represents 4.7(1)(2) billion gallon market and our
Slide 31: Aligned with Superior's Core Strategy
ALIGNED WITH SUPERIOR’S CORE STRATEGY Business Overview • NGL Propane sells propane and distillates to residential, commercial and industrial customers • Operates in 22 states Over 316,000 customers Approximately 182 million gallons sold in FY2018 • Over 160 locations including offices Heat Degr
Slide 32: Review of Synergies
REVIEW OF SYNERGIES Synergy Examples Run-rate Synergies(1) (millions) • Specific blend reductions (i.e. logistics, technology, office and other) • Improvements to customer service representative and technology staffing levels • Increase annual delivered volume target for drivers on Productivity impr
Slide 33: Where We Are Going (2020)
WHERE WE ARE GOING (2020) 2020 volumes are expected to approach ~1.3 billion litres and over 65% of the volume is anticipated to be retail propane(1) • Propane sales 2020E Volumes(1) 2020 Path Forward volumes are anticipated to • Continued focus on exiting oil and increasing reach ~66% by exposure t
Slide 34: Evolution 2020 Update
EVOLUTION 2020 UPDATE Strategy in place to transform the EBITDA from Operations (millions)(1) company from predominantly heating oil and refined fuels to a focus on retail propane $196.8 • Superior’s operating model will be leveraged to drive synergies and $170.8 operational improvements • Continued
Slide 35: U.S. Propane Distribution Summary
U.S. PROPANE DISTRIBUTION SUMMARY Acquisition strategy is evolving • We are targeting the entire east coast; over 1,250 opportunities(1) and 4+ billion gallon market • We have extended our target foot print significantly with the NGL acquisition • Target to complete 5-10 tuck-in acquisitions annuall
Slide 36: Leading Canadian Propane Distributor
LEADING CANADIAN PROPANE DISTRIBUTOR Greg McCamus President Energy Distribution
Slide 37: Canadian Retail Propane Distribution Overview
CANADIAN RETAIL PROPANE DISTRIBUTION OVERVIEW Leading propane distributor in Canada(1) 28% 16% 14% Commercial(1) Industrial(1) Residential(1) 14% 11% 17% Motor Fuels(1) Other(1) Oilfield(1) Strong customer base serving a diversified market. (1) Percentages based on TTM Q1 2018 sales volumes for Cana
Slide 38: Superior Propane – Improving Profitability
SUPERIOR PROPANE – IMPROVING PROFITABILITY EBITDA Growth/OPEX to GP RATIO 2011-2017(1)(2) Since 2011 Superior has 200,000 78% 80% reduced operating ratio from 78% to 180,000 73% 76% 72% 64%, improved 160,000 72% customer 69% retention and 66% 68% 140,000 65% 64% OPEX to GP Ratio (%) increased organi
Slide 39: Improving New Customer Acquisition
IMPROVING NEW CUSTOMER ACQUISITION Marketing Lead Growth Inside Sales Growth Commercial Sales Growth Jan-16 May-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Mar-16 Jul-16 Sep-16 Nov-16 2016 2017 2016 2017 New Customers Conversion Rate Realized GP ($000’s) Productivity/Rep ($000’s) 2017 Digital Marke
Slide 40: Reducing Customer Attrition
REDUCING CUSTOMER ATTRITION Digital improves customer retention • Reduced attrition rates post-digital solution implementation • Registrations for mySUPERIOR up 40% in 2017, driven by proactive marketing, sales and customer support programs New data-driven customers retention programs • Increase dig
Slide 41: Improving the Customer Experience
IMPROVING THE CUSTOMER EXPERIENCE 2016-2017 – Building the Foundation 2018-2020 – Reduce Cost to Serve Contact centre technology investment Phase two contact centre investments to improve self serve capabilities Universal contact centres introduced • Click-to-Chat Improvements in First Call Resoluti
Slide 42: Steady Improvement in Delivery Efficiency
STEADY IMPROVEMENT IN DELIVERY EFFICIENCY Logistics initiatives have steadily Tank Fill Rate Percentage(1) increased delivery fill rate • Implementation of ADD energy 55% platform, 52% • Continuous process improvement, 50% 50% 50% 50% • Superior Way; and 49% • The use of Tank Sensors 45% 45% Tank se
Slide 43: Tank Sensors – Progress and Plans
TANK SENSORS – PROGRESS AND PLANS ~20,000 tank sensors currently installed Tank Sensor Penetration(1)(2) • 10% of tank locations • 28% of deliveries • 47% of total volume delivered With new IoT technology 100,000 tanks are 100,000 targeted for sensor installation by 2020 • 50% of tank locations 68,0
Slide 44: Canwest Integration – The Opportunity
CANWEST INTEGRATION – THE OPPORTUNITY • Consolidate 178 total facilities in Western Canada to 108 facilities post-integration • 70 facilities to be disposed of to reduce cost of operating in each market plus management and support costs • One time proceeds from the reduction in facilities, tanks and
Slide 45: Canwest Integration – Current Status
CANWEST INTEGRATION – CURRENT STATUS • Integration of Thunder Bay market in early 2018 served as ‘pilot’ • As of May 2018, 8 of 21 markets have been integrated (representing 33% of delivery locations) • Remaining market integrations targeted for completion before October 2018 • Western Canada operat
Slide 46: Canwest Integration – The Path Forward
CANWEST INTEGRATION – THE PATH FORWARD • One business operating in our centralized logistics platform • Harmonized sales team and marketing programs under one brand • Full suite of digital offerings available for all Canwest customers • Consistent proactive retention and customer base management pro
Slide 47: Synergy Summary
SYNERGY SUMMARY Expect $15 $20 million per year OPEX synergies on run-rate basis by end of 2019(1) million run-rate synergies by the • 75% from reduction of labour and vehicles end of 2018 and $20 million by • 25% from consolidating operating facilities and reducing branch the end of 2019. support a
Slide 48: 2020 Targets
2020 TARGETS 2016 2017 2020 Target(1) Operating Expense 64.9% 64.0% 60% to 62% Ratio (3) Organic Annual 1.8% 2.7% 2% to 3% EBITDA Growth(1)(2) Sensors Deployed 16,000 20,000 100,000 (1) See “Non-GAAP Financial Measures” and “Forward-Looking Statements & Information”. (2) Organic Annual EBITDA Growth
Slide 49: Innovative Propane Distribution Platform
INNOVATIVE PROPANE DISTRIBUTION PLATFORM
Slide 50: Meet Jackie
MEET JACKIE wx “ Superior Plus
Slide 51: Our Digital Assets
OUR DIGITAL ASSETS Customer Experience • Convenient and paperless • Web or mobile • Reliable and seamless Operational Excellence • Improved efficiencies • Improved asset utilization • Lower overhead Organic Growth • Unique value proposition • Differentiated offer • Improved acquisition and retention
Slide 52: Our Digital Assets - Where We Are Going Next
OUR DIGITAL ASSETS - WHERE WE ARE GOING NEXT LOGISTICS NEW SERVICE MOBILITY CALL CENTER 2020 PLATFORM 2.0 AI with New digital, Sales automation Technology thousands of paperless apps, improved upgrade of our tank sensors, solution to mobile customer contact mySUPERIOR, streamline our experience for
Slide 53: Supply Portfolio Management
SUPPLY PORTFOLIO MANAGEMENT Shawn Vammen Senior Vice President Supply Portfolio Management
Slide 54: North American Wholesale NGL Market: Supply
NORTH AMERICAN WHOLESALE NGL MARKET Supply Increasing liquids-rich gas supply in North America changed: • Volumes available • Geographical availability • How the product moves • How the product is priced Superior’s response: Create new opportunities in wholesale procurement through expanded retail p
Slide 55: North American Wholesale NGL Market: Demand
NORTH AMERICAN WHOLESALE NGL MARKET Demand Supply initially “out front in the race” US LPG Export Volumes (Mbpd)(1) Demand began to catch 1200 1100 up through: 1000 • Investment in export facilities 900 • Increased fractionation 800 700 • Petrochemical development 600 500 Third Party Volumes(2) 400
Slide 56: North American Wholesale NGL Market: Changing Landscape
NORTH AMERICAN WHOLESALE NGL MARKET Changing Landscape Increased demand towards the coasts changes traditional product movement Changing Marketplace: • Traditional West East spread potentially reducing over time • Conway to Belvieu spreads changing • Exports influencing various markets Our way forwa
Slide 57: SGL Summary
SGL SUMMARY Focus on growth through: Organic initiatives • Sales and marketing to increase third party volumes • Improved customer service Expanding network • Our footprint for growth Pursue further acquisitions to expand scope of the business • Various targets across North America being reviewed La
Slide 58: Specialty Chemicals
SPECIALTY CHEMICALS Ed Bechberger President Specialty Chemicals
Slide 59: Specialty Chemicals Business Strategy
SPECIALTY CHEMICALS BUSINESS STRATEGY To be the preferred supplier of specialized chemicals, technology and value-added services Two-fold growth strategy: • Incremental production expansions, effective cost management, tuck-in acquisitions • Large acquisition in core business or adjacent/related bus
Slide 60: Specialty Chemicals Overview
SPECIALTY CHEMICALS OVERVIEW Manufacturer and supplier of specialty chemicals and provider CANADA of technology-related services Grand Prairie Saskatoon Buckingham Vancouver Thunder Bay • 579 employees EBITDA by Segment (4) Hargrave Toronto(5) • Headquartered in NORTH North Port Edwards Kingstown, R
Slide 61: Specialty Chemicals Growth Profile
SPECIALTY CHEMICALS GROWTH PROFILE Chlor-alkali recovery since 2020E 2016 fuelled Expected growth in increase from: EBITDA from Increase is 2018E Operations expected to • Continued 2017 strength in come from: 2016 The increase • Continued chlor-alkali came from: improvements • Growth in • Cost in ch
Slide 62: Leading Chemical Manufacturer Serving Multiple Markets
LEADING CHEMICAL MANUFACTURER SERVING MULTIPLE MARKETS Changes since November 2016 Investor Day SODIUM CHLORATE CHLOR-ALKALI CHLOR-ALKALI SODIUM CHLORITE GLOBALIZATION Go-To-Market Strategy Market Recovery IDI Acquisition Access to Markets Key account management Capturing the value Sodium chlorite a
Slide 63: Specialty Chemicals Business Portfolio
SPECIALTY CHEMICALS BUSINESS PORTFOLIO Diversified end products and customer exposure SODIUM SODIUM CHLOR-ALKALI CHLORATE CHLORITE Sodium chlorate Chlorine Sodium chlorite Bleach plant Hydrochloric acid Small-scale 61% optimization 32% 7% Chlorine dioxide Caustic soda generators of sales(1) Chlorine
Slide 64: Product Lines: Sodium Chlorate
SPECIALTY CHEMICALS PRODUCT LINES: SODIUM CHLORATE Chlorine dioxide bleaching for pulp and paper industry(1) 27% 18% 16% 9% International Softwood Pulp Bleached Board Fluff Pulp Exports & Chile Bleached Market Pulp Food Containers Bleached Market Pulp 9% 7% 7% 7% Specialty Pulp Coated Papers Hardwoo
Slide 65: Product Lines: Chlor-alkali
SPECIALTY CHEMICALS PRODUCT LINES: CHLOR-ALKALI Serving highly diverse industries(1) 22% 15% 12% 10% Distribution Oil and Gas Fertilizers Ag Intermediates Diverse Applications Hydraulic Fracturing, Nutrients Weeds, Seeds Exploration 7% 7% 6% 21% Water Treatment Pulp and Paper De-icing Others Diverse
Slide 66: Product Lines: Sodium Chlorite
SPECIALTY CHEMICALS PRODUCT LINES: SODIUM CHLORITE Chlorine dioxide applications for small scale generators(1) 39% 31% 15% Oil and Gas Municipal Food & Industrial Water Treatment Water Treatment Diverse Applications & Breaker 6% 2% 6% Ethanol Exports Other Catalyst Diverse Applications Diverse Appli
Slide 67: Specialty Chemicals: Striving for Excellence
SPECIALTY CHEMICALS: STRIVING FOR EXCELLENCE Our Drivers Operational Excellence • Highly automated facilities • State-of-the-art asset management techniques • Responsible Care verified Commercial Excellence • Key account management • Sales and technical service team • “ERCO Smarts” services platform
Slide 68: Sources of Revenue and EBITDA
SPECIALTY CHEMICALS: SOURCES OF REVENUE AND EBITDA Positioning and Trends 2017 Sales by Product 7% • Chlor-alkali contribution increasing with oil & gas demand and market recovery 32% 61% • Significant sodium chlorate export capability • Sodium chlorite contribution increasing through Sodium SodiumC
Slide 69: Specialty Chemicals: Solid Manufacturing Base
SPECIALTY CHEMICALS: SOLID MANUFACTURING BASE History Manufacturing history dates back to the 1890s Safety of our employees and other stakeholders is paramount Safety Responsible Care Ethic Excellent safety record Plants are well-capitalized and reliable Reliability Five-year preventative asset mana
Slide 70: Financial Overview
FINANCIAL OVERVIEW Beth Summers Executive VP and CFO Financial Overview
Slide 71: 2018 Financial Outlook and Guidance Update
2018 FINANCIAL OUTLOOK AND GUIDANCE UPDATE Record First Quarter Results Q1 Adjusted EBITDA(1) (millions) Driven by: • Energy Distribution and Specialty Chemicals organic growth 28% $152.6 • Contribution from Canwest and tuck-in acquisitions $119.2 • Cold weather and wholesale NGL sales volumes incre
Slide 72: Delivering on Financial Targets
DELIVERING ON FINANCIAL TARGETS Metric(1) Target On-track Adjusted EBITDA(2) $305 to $335 million AOCF per Share(2) $1.75 to $1.95 Total Capital Expenditures(2)(3) $100 to $105 million Payout Ratio 40% to 60% (Long-term target) Total Debt to Adjusted EBITDA 3.0x (Long-term target) (1) See “Non-GAAP
Slide 73: Increasing Free Cash Flow Generation
INCREASING FREE CASH FLOW GENERATION EBITDA from Operations Annual Free Cash Flow(2) (millions) • $75 million increase since 2016, in line with Evolution 2020 goals(1) $250-$260 Disciplined Capex Approach • Maintenance capex in the range of $185 $50 million to $75 million per year Cash Available for
Slide 74: Committed to a Strong, BB Credit Rating
COMMITTED TO A STRONG, BB CREDIT RATING Debt/Adjusted Payout Considerations EBITDA(1) Ratio(1) (Long-term target) (Long-term target) • Access to capital markets 3.7x 40% - • Committed to BB 60% 47.9% rating 3.0x • Ensure ample liquidity under credit facility • Actively engaged with the rating agenci
Slide 75: Extended Debt Maturity Profile
EXTENDED DEBT MATURITY PROFILE Debt Maturity Timeline (millions)(1) Proactively Various long- managing the term financing debt profile $520 options are resulted in an $498 being analyzed improved, to refinance staggered secured bridge maturity facility profile and lower interest costs. $400 $220 201
Slide 76: Excellent Access to Capital
EXCELLENT ACCESS TO CAPITAL Financing Considerations Total Capital Raised (millions) $1.25 billion raised since 2012 Debt $820 • $820 million in unsecured note financing $400 • Average coupon of 5.52% • Average tenor of 7 years(1) Equity • $400 million gross proceeds from subscription receipts condi
Slide 77: Historical Capital Spending
HISTORICAL CAPITAL SPENDING Corporate goals Historical Capital Spending(1) (millions) • Ensure liquidity to fund 140 capital expenditures to support organic growth $122 $123 120 and tuck-in acquisitions $50 $111 $20 • Size recurring capital 100 $98 $28 $95 $33 expenditures at current $46 $20 levels
Slide 78: Leverage Comparison to Peers
LEVERAGE COMPARISON TO PEERS Select Canadian and U.S. energy distribution and chemical peer comparison(1) 9.0x Superior 8.0x 8.3x deploys less 7.0x leverage than MLP peers 6.0x Leverage(1)(2) 5.0x 4.7x 4.0x 4.3x 3.7x 3.6x 3.0x 3.1x 3.0x 2.7x 2.0x 1.0x 0.0x Ferrell Suburban Amerigas Superior Plus (2)
Slide 79: Financially Attractive Acquisition
FINANCIALLY ATTRACTIVE ACQUISITION Substantial Synergies Transaction Metrics(1)(2) • Approximately US $20-25 EV / • 8.2x including run-rate million (CAD $26-32 million)(1) EBITDA synergies EBITDA • Removal of SG&A overlap AOCF Synergies • Optimization of supply costs • Double-digit Accretion • Opera
Slide 80: Financing Structure
FINANCING STRUCTURE • CAD $400 million equity offering by way of subscription receipts announced concurrently with the Transaction; closed on June 8, 2018 • Fully committed debt financing for the remaining purchase price which includes: New senior secured bridge credit facility Drawing on existi
Slide 81: Summary
SUMMARY Acquiring all of the outstanding equity interest in NGL Propane from NGL – NGL’s Eastern U.S. retail propane distribution business • Total Consideration: US $900 million (CAD $1.17 billion) • Financing – Fully funded with • Drawing on existing credit facility and new senior secured bridge cr
Slide 82: Summary & Conclusion
SUMMARY & a) = a ~~ 2 - © a 3 a ‘ LY CONCLUSION
Slide 83: Conclusion
CONCLUSION GREATER FOCUS 2020 PROFILE WINNING FOR ALL SOCIAL IN THE U.S. STAKEHOLDERS RESPONSIBILITY • Proforma NGL U.S. Propane Distribution • New Evolution 2020 • Dedicated to • Continuous is same size as Goal of increasing increasing improvement in Canadian Propane EBITDA from shareholder value H
Slide 84: New Evolution 2020 Goals
NEW EVOLUTION 2020 GOALS $476.5 – 2016 2017 2018 2020E $526.5 million(10) NGL Propane Synergies(3) NGL Propane(4) Canwest Synergies(5) $426.5 Canwest(6) Specialty Chemicals(7) million(10) Tuck-in Acquisitions(8) Organic Growth $352.1 million(2) $306.8 million $276.5 million(1) Evolution 2020 updated
Slide 85: Question & Answer
QUESTION & ANSWER
Slide 86: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Throughout the presentation, Superior has used the following terms that are not defined by GAAP, but are used by management to evaluate the performance of Superior and its businesses. Since non- GAAP financial measures do not have standardized meaning prescribed by GAAP a
Slide 87: Non-GAAP Financial Measures (Continued)
NON-GAAP FINANCIAL MEASURES (CONTINUED) Organic Growth Organic growth calculated as increase in EBITDA from Operations year over year excluding the impact of acquisitions. Free Cash Flow Calculated as AOCF before transaction & other costs less maintenance capex and capital lease repayments. NGL Non-
Slide 88: Appendix A: NGL Propane EBITDA Reconciliation
APPENDIX A: NGL PROPANE EBITDA RECONCILIATION NGL Propane EBITDA Reconciliation (USD 000s) NGL Propane Year Ended March 31, 2018 Net Earnings $43,994 Add back: Depreciation $36,945 Non-controlling interest $1,340 (Gain) loss on disposal of assets $1,365 Stock-based compensation $1,358 Finance $413 A
Slide 89: Appendix B: Superior Plus Adjusted EBITDA Reconciliation
APPENDIX B: SUPERIOR PLUS ADJUSTED EBITDA RECONCILIATION Superior Plus EBITDA Reconciliation (CAD millions) Superior Plus TTM Q1 2018 Net Earnings -$33.8 Add back: Income Tax Expense $141.1 Depreciation(1) $125.5 Unrealized gains/losses on derivative financial instruments -$10.5 (Gain) loss on dispo