UGI Corporation · NYSE:UGI
UGI — Investor Day (December 2020)
48 slides from UGI's investor day presentation, Dec 7, 2020
Slide 1: The Foundation of a Renewable Energy Future
THE FOUNDATION OF A RENEWABLE ENERGY FUTURE DECEMBER 7, 2020
Slide 2: Our Management Team Welcomes You
Our Management Team Welcomes You UGI Corporation John Walsh Ted Jastrzebski Robert Beard Roger Perreault President & CEO CFO Executive VP, Natural Gas Executive VP, Global LPG 2
Slide 3: Our Agenda Today
Our Agenda Today UGI Corporation A Foundation for the Future Our Natural Gas Strategic Focus Our Global LPG Strategic Focus Our Financial Overview Q Q&A 3
Slide 4: About This Presentation
About This Presentation UGI Corporation This presentation contains statements, estimates and projections that are forward-looking statements (as defined in Section 21E of the Securities and Exchange Act of 1934, as amended). Management believes that these are reasonable as of today’s date only. Actu
Slide 5: Use of Non-GAAP Measures
Use of Non-GAAP Measures UGI Corporation In this presentation, Management uses certain non-GAAP financial measures, including UGI Corporation adjusted earnings per share, UGI Corporation Free Cash Flow, UGI Corporation Adjusted Earnings before interest, taxes, depreciation, and amortization (“EBITDA
Slide 6: A Foundation for the Future
UGI Corporation A Foundation for the Future 6
Slide 7: Our Mission and Vision
Our Mission and Vision UGI Corporation At UGI, we believe that safe, reliable, affordable, and sustainable energy solutions are a necessity for our customers and communities. We strive to deliver this Vision fundamental need through best-in-class safety, operations, products, and services while enha
Slide 8: Growth of Core Businesses and Meeting Commitments
Growth of Core Businesses and Meeting Commitments UGI Corporation Strengthened Maintained Expanding Foundations Momentum RNG Capabilities • Completed acquisitions • EPS / Dividend • Continuing to build our portfolio of Positioned as a complementing our commitments renewable solutions: Differentiated
Slide 9: Well Positioned for Leadership in Renewables
Well Positioned for Leadership in Renewables UGI Corporation Why Renewables? Rapidly growing customer demand Hydrogen RNG Disposal for sale Synergistic opportunities as BIO a producer and distributor of RNG and Bio-LPG Bio H2O Methane HVO Ethanol Strategic assets and proven competencies Residue Prog
Slide 10: Expanding Business Lines is a Core Competency
Expanding Business Lines is a Core Competency UGI Corporation Midstream & Marketing 2000-09 2010-12 2013-14 2015-18 2019-20 UGI Appalachia Bethlehem Steelton LNG LNG facility facilities $355 Auburn III Temple LNG expansion Marcellus Shale facility Hunlock and LP / Air facility $6 2000 2020 Total Mar
Slide 11: Expanding Business Lines is a Core Competency
Expanding Business Lines is a Core Competency UGI Corporation UGI International 2000-09 2010-11 2012-16 2017-18 2019-20 Four LPG acquisitions in Belgium, the Netherlands and UK 1 $936 $21 2000 2020 Total Margin2 21% CAGR Total Margin2 ($ Million) ($ Million) Over the past 20 years, UGI International
Slide 12: The Next Opportunity – Renewable Energy Solutions
The Next Opportunity – Renewable Energy Solutions UGI Corporation 2015-19 2020 2021-25 Renewable Solutions team Acquired GHI, Potential Renewable Solutions which will serve as opportunities of up to $1 billion Began marketing Bio-LPG in parts of Northern Europe a strong over the next five ye
Slide 13: The Foundation of Sustainable Energy Future
The Foundation of Sustainable Energy Future UGI Corporation UGI’s connection to customers, core competencies, and core infrastructure enable UGI to provide renewable energy solutions with minimal disruption to our customers Core competencies: Core infrastructure: Navigating legislative Supply and pr
Slide 14: Our Capital Allocation Strategy Evolution
Our Capital Allocation Strategy Evolution UGI Corporation 2015 2020 2025 2030 2035 Capital Allocation1,2: 20% 15% 15% Global LPG 40% 35% 15% 20% 25% Renewables Natural Gas 60% 65% 65% 65% 60% Our innovation-focused growth drivers align us with our goal of a greener portfolio • CNG • RNG • Bio-Gas (B
Slide 15: 6-10% EPS Growth with a 4-pronged Growth Strategy
6-10% EPS Growth with a 4-pronged Growth Strategy UGI Corporation Robust pipeline of organic, inorganic, and renewable Significant cash generation provides funding source for opportunities provides a stable foundation for the future. ongoing investments and balance sheet management. $4.00 Renew- abl
Slide 16: Our Natural Gas Strategic Focus
UGI Corporation Our Natural Gas Strategic Focus OUR 16 BUSINESSES
Slide 17: Natural Gas – A Platform for Continued Growth
Natural Gas – A Platform for Continued Growth UGI Corporation Natural Gas - Strategic Advantage Our Natural Gas businesses see continued significant growth driven by our core businesses, and are well positioned to drive a clean energy future. Sustainable Investments: Strategic investments coupled wi
Slide 18: Natural Gas – 3-Pronged Growth Strategy
Natural Gas – 3-Pronged Growth Strategy UGI Corporation Growing the Serving the evolving needs of our Improving our FOUNDATION CUSTOMERS ENVIRONMENT ENSURE RESOURCE KEEP ENERGY AFFORDABLE EXPAND OUR REACH REDUCE CARBON OPTIMIZATION Providing our customers the Ensuring safety FOOTPRINT Leveraging ass
Slide 19: A Strong Foundation for Growth
A Strong Foundation for Growth UGI Corporation ENSURE RESOURCE OPTIMIZATION Rate base growth (FY20-FY24 CAGR Expertise navigating evolving legislative and of 11%+) regulatory landscapes A strong and consistent history of growth, Physically connected to ~740,000 gas and while improving our en
Slide 20: Meeting Customers' Needs – Today and Tomorrow
Meeting Customers’ Needs – Today and Tomorrow UGI Corporation MAKE ENERGY AFFORDABLE Improve access and integrity Annual Customer Growth at UGI Utilities (in ‘000) ~ 675,000 conversion prospects within 1 mile of gas mains GET Gas program enables growth in underserved areas PNG CPG Locally sour
Slide 21: Contributing to a Cleaner Environment
Contributing to a Cleaner Environment UGI Corporation REDUCE CARBON FOOTPRINT Smart portfolio rebalancing Investment in feedstock infrastructure (RNG project in Idaho) Cleaner sources such as RNG (GHI) Investments advance GHG reduction commitment Divestiture of Conemaugh reduces direct emiss
Slide 22: Key Takeaways – Natural Gas
Key Takeaways – Natural Gas UGI Corporation FOUNDATION CUSTOMERS ENVIRONMENT Strategically located asset Strong customer growth As demand for clean, network and ability to renewable energy navigate an evolving Significant investment continues to grow, we have regulatory environment opportuni
Slide 23: Our Global LPG Strategic Focus
UGI Corporation Our Global LPG Strategic Focus 23
Slide 24: LPG – A Clear Path Forward
LPG – A Clear Path Forward UGI Corporation A Platform: Focus-Develop-Grow strategy provides a clear path to build Global LPG business of the future through organic and inorganic growth strategies Improving selling / Investing in • Enhance our renewable distribution efficiency Bio-LPG powered by anal
Slide 25: Global LPG Vision
Global LPG Vision UGI Corporation FOCUS DEVELOP GROW on LPG beyond LPG way beyond EMBED CONTINUAL MODERNIZE FOR FUTURE BRING NEW MARKET DRIVE BUSINESS EVOLUTION IMPROVEMENT To serve our customers harmoniously, OPPORTUNITIES To expand beyond our To keep us efficient, safe, and digitally, and autonomo
Slide 26: LPG Focus – Culture of Continuous Improvement
LPG Focus – Culture of Continuous Improvement UGI Corporation EMBED CONTINUAL IMPROVEMENT MODERNIZE FOR OUR FUTURE Launched Two Transformation Projects • Re-engineered processes across Global LPG to reduce costs and improve effectiveness FOCUS Operations Excellence Customer Digital Experience • Cont
Slide 27: Global LPG Transformation Benefits
Global LPG Transformation Benefits UGI Corporation Global LPG Transformation Estimated Benefits AmeriGas Identified incremental $20 Million in benefits; expect to AmeriGas UGI International realize $140 Million in permanent annual savings by FY22 o Increasing projected spend by $25 Million €30 o Tot
Slide 28: Develop and Grow Platform for Renewable Solutions
Develop and Grow Platform for Renewable Solutions UGI Corporation BRING NEW MARKET OPPORTUNITIES DRIVE LPG BUSINESS EVOLUTION New Renewable Fuels Tech-enabled Sales Channel Development • “De-fossilize” LPG via acquisitions and • Automatic vending solution supply sources • Home delivery • Business Mo
Slide 29: Key Takeaways – Global LPG
Key Takeaways – Global LPG UGI Corporation FOCUS DEVELOP GROW Transformation programs Molecules in supply chain Continue investing in set the stage for cost will be de-fossilized customer journey, vending, reduction home delivery, and digital Expansion of renewables in interface Evolving e
Slide 30: Our Financial Overview
UGI Corporation Our Financial Overview Our Portfolio 30 Approach
Slide 31: Our Strategic Evolution
Our Strategic Evolution UGI Corporation 2016 2017 2018 2019 2020 20212 2022 and beyond $2.95 Adjusted $2.65 6.8% EPS1 CAGR $2.05 $2.29 $2.74 $2.28 $2.67 2016 – 2020 Breaking Natural Gas Down Silos Global LPG Differentiated Renewable Energy Solutions • Core-competency focus • Strategic oversight - LP
Slide 32: Corporate Support Functions Transformation
Corporate Support Functions Transformation UGI Corporation Economies of scale and scope $15+ Million Flexible / adaptive operations Corporate Support Annual Projected Function Cost Savings Transformation Better service / execution at lower prices Initiative Across: HR Centralization enhances control
Slide 33: Cash Flow Stability
Cash Flow Stability UGI Corporation Cash flow stability and growth remains a key differentiator for UGI. Focus on liquidity provides resilience against macro risks as well as flexibility in our capital project execution and operational process innovation. UGI-US NJR-US Peer 1 SJI-US Peer 2 ATO-US Pe
Slide 34: Cash Engine Drives Future EPS and Dividend Growth
Cash Engine Drives Future EPS and Dividend Growth UGI Corporation UGI Dividends, $350M - Share Repurchase, Base Business and $400M Regulatory 3-4% and Debt Earnings Growth $1.2 - $1.6 Billion Repayment Cash Flow from Capital Expenditures Operations and M&A ~55% Global LPG Investment Capital ~45% Nat
Slide 35: Our Cash Deployment
Our Cash Deployment UGI Corporation Cash Flow from Operations Capex Dividends and Net Debt FY 2021-24 and M&A Share Repurchase Reduction $5.0 - $5.6 B $3.7 - $3.9 B $1.2 - $1.3 B $0.1 - $0.4 B • Continuing to build a • Capital plan at Utilities • Meet commitment to • Reduce consolidated resilient co
Slide 36: Sustainable and Growing Cash Flows
Sustainable and Growing Cash Flows UGI Corporation Blueprint for Less Weather Sensitivity • Growing less weather-sensitive business lines: Resilient Cash Growth • Utilities business Sustainable Business Offsetting • LNG peaking services Model Cash Flows Conservation • ACE / NA • Renewable fuels for
Slide 37: Balance Sheet - Leverage
Balance Sheet - Leverage UGI Corporation Leverage1,2 Debt Maturities ($ Million) • UGI’s philosophy is to hold debt at its business AmeriGas UGI International units and keep capacity at the holding company Midstream & Marketing UGI Utilities level for truly compelling strategic opportunities UGI Cor
Slide 38: Achieving our Guidance
Achieving our Guidance UGI Corporation Executing a capital expenditure plan to $2.95 continue creating long-term sustainable shareholder value. Natural Gas, Global $2.67 64% LPG, 36% $2.65 2021E Capital Expenditures: $850 Million FY 2020 FY 2021E Adjusted EPS1 Adjusted EPS2 38 1. Adjusted EPS is a n
Slide 39: History of Meeting EPS and Dividend Commitments
History of Meeting EPS and Dividend Commitments UGI Corporation Long-Term Commitments • EPS Growth: 6 – 10% • Dividend Growth: 4% 2.95 EPS 2.74 10-year CAGR2 Adjusted Earnings Per Share1 ($) 2.67 2.65 7.1% 2.29 2.28 2.02 2.01 2.05 1.61 1.46 1.41 1.25 Dividend 10-year CAGR 6.9% 1.30 1.31 0.87 0.91 0.
Slide 40: Key Takeaways
UGI Corporation Key Takeaways 40
Slide 41: Key Takeaways
Key Takeaways UGI Corporation We continue to remain well-positioned to deliver on our long-term commitments to shareholders of 6-10% annual EPS growth and 4% dividend growth and position UGI as a leader of a renewable energy future. We will continue to: We will accelerate: • Build a more weather
Slide 42: UGI Corporation
CORPORATION uonesodio |9N
Slide 43: Appendix
43 UGI Corporation Appendix
Slide 44: UGI Corp Adjusted Net Income and Adjusted Earnings Per Share
UGI Corp Adjusted Net Income and Adjusted Earnings Per Share UGI Corporation (Millions of dollars, except per share amounts) Year Ended September 30, 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 NON-GAAP RECONCILIATION: Adjusted net income attributable to UGI Corporation: Net income attrib
Slide 45: UGI Corporation Free Cash Flow
UGI Corporation Free Cash Flow UGI Corporation ($ in millions) Year Ended September 30, 2011 2012 2013 2014 2015 Net Cash Provided By Operating Activities $555 $708 $802 $1,005 $1,164 Less: Expenditures for property, plant, and equipment (361) (339) (486) (457) (491) Less: Dividends (114) (119) (126
Slide 46: UGI International Margins
UGI International Margins UGI Corporation ($ in millions) Year Ended September 30, 2000 2020 Total Revenues $51 $2,127 Total Cost of Sales (30) (1,191) Total Margin $21 $936 46
Slide 47: Midstream & Marketing Margins
Midstream & Marketing Margins UGI Corporation ($ in millions) Year Ended September 30, 2000 2020 Total Revenues $147 $1,247 Total Cost of Sales 141 (892) Total Margin $6 $355 47
Slide 48: UGI Corporation Adjusted EBITDA and Leverage
UGI Corporation Adjusted EBITDA and Leverage UGI Corporation ($ in millions) Year Ended September 30, 2019 2020 Net income including noncontrolling interests $308 $532 Income taxes 93 135 Interest expense 258 322 Depreciation and amortization 448 484 EBITDA 1,107 1,473 Unrealized losses (gains) on c