Superior Plus Corp · TSX:SPB
Superior Plus — Investor Presentation (January 2022)
25 slides from Superior Plus's investor presentation, January 2022
Slide 1: Investor Presentation
Investor Presentation January 2022 Serving You Safely and Your Way
Slide 2: Forward Looking Information
Forward Looking Information This written and accompanying oral presentation contains certain forward‐looking information within the meaning of applicable Canadian securities laws which is provided for the purpose of presenting information about management’s current expectations and plans. Readers ar
Slide 3: Superior Plus Business Overview
Superior Plus Business Overview Superior is an industry‐leading North American retail propane distribution company #1 5th largest propane distributor in Canada retail propane distributor with ~38% market share1 in the U.S. and growing1 3.2 billion litres ~800,000customers ~4,100 employees See End no
Slide 4: Superior Plus Financial Overview
Superior Plus Financial Overview EBITDA by Segment1 Market Capitalization2 $2.3 billion Enterprise value2 $4.2 billion Dividend – Annualized/Yield2 $0.72 per share / 5.5% 45% 55% Net Debt to Adjusted EBITDA3 3.5x Adjusted EBITDA4,5 $400.3 million Adjusted EBITDA Pro Forma Acquisitions U.S. Propane C
Slide 5: Executed Transition to a Pure-Play Energy Distributor
Executed Transition to a Pure‐Play Energy Distributor Superior has completed a comprehensive 5‐year transformation into a pure‐play energy distributor with a major U.S. platform for continued growth 2016 2017 2018 2019 2020 2021 Divestiture of Canwest Propane Retail East Integration of Integration o
Slide 6: Benefits of Pure-Play Energy Distribution Platform
Benefits of Pure‐Play Energy Distribution Platform • Rebalanced business around highest EBITDA Growth Since 20161 growth segment $413 • Consistent, stable free cash flow $410 $402 generation with ~83% FCF conversion2 $265 • Reduced cyclicality and exposure to oil $180 and gas end markets $167 (milli
Slide 7: What Makes the Propane Industry Attractive
What Makes the Propane Industry Attractive The North American propane market is attractive Pricing Model Protects Downside Cost plus pricing model provides for due to customer characteristics, sustainable free consistent, reliable cash flow cash flow and significant opportunities for growth High Swi
Slide 8: Targeting $700–$750 Million of EBITDA by 2026
Targeting $700–$750 Million of EBITDA by 2026 Superior is targeting $700 to EBITDA from Operations1 — Projected Growth ($millions) $750 million of EBITDA from Operations1, representing a 10% $700–$750 to 11% CAGR through 2026 by: Executing on acquisition growth strategy; Acquisition Continuous i
Slide 9: Significant Acquisition Opportunities in the U.S.
Significant Acquisition Opportunities in the U.S. 3,885 Active U.S. Distributors ~100 ~170 1,350+ Identified Targets ~1,100 Targets Within Footprint targets adjacent targets in new to states footprint ~10 ~20 ~1,070 platform mid‐size small targets targets targets EBITDA EBITDA EBITDA >$25m $10m –$25
Slide 10: Demonstrated Ability to Acquire, Integrate & Capture Synergies
Demonstrated Ability to Acquire, Integrate & Capture Synergies Strong track record NGL Energy Partners LP Continuing acquisitions through COVID‐19 demonstrates ability to acquire annually at scale US CANADA YEAR 2017 2018 2019 2020 2021 2022 # Acquisitions 4 6 5 5 7 1 $ TEV ($m) ~$525 ~$1,275 $~70 ~
Slide 11: Deployed $800 Million in Capital Across 20 Transactions
Deployed $800 Million in Capital Across 20 Transactions, Targeting Post‐Synergy Average Multiple Improvement of ~2.0x Summary of USPD Acquisitions (excl. NGL)1 Acquisitions Completed 20 Capital Deployed ~$800 million Acquired EBITDA2 ~$92 million Synergized EBITDA2 ~$128 million Acquired EV/EBITDA ~
Slide 12: Synergies Achieved Through Cost Reductions & Optimization
Synergies Achieved Through Cost Reductions & Optimization Marketing Sales Approach Distribution Management Workforce Planning Centralized Cost Structure Supply Chain Efficiencies • Implement strategic • Increase delivered • Improve local branch • Minimize selling, • Consolidate demand pricing using
Slide 13: Reputation as a Preferred Buyer
Reputation as a Preferred Buyer 1 2 3 Strong Financial Profile Seamless Transition Industry Leadership • Demonstrated ability to transact across • Experienced business development • Experienced management team small‐to‐large opportunities team utilizing a streamlined diligence • Best‐in‐class operat
Slide 14: Historical Results and 2021 Guidance
Historical Results and 2021 Guidance COVID‐19 impact Historical Adjusted EBITDA ($m)1,2 $390 – $420 2021 Guidance $373 $379 Adjusted EBITDA1 $237 $390m – $420m $159 $118 2021 Adjusted EBITDA guidance confirmed with Q3 2021 results 2016 2017 2018 2019 2020 2021 Guidance See End notes for further info
Slide 15: Capital Expenditures and Free Cash Flow Conversion Profile
Capital Expenditures and Free Cash Flow Conversion Profile Superior generates robust FCF conversion of 83%, with annual maintenance capex needs of ~$40m‐$50m Historical Free Cash Flow Conversion Profile1 Capital Expenditures1 ($m) 84% 83% 80%‐85% 72% 73% $30M reduction $120‐$140 in response to $118.
Slide 16: Strong Balance Sheet Provides Efficient Financing for Growth
Strong Balance Sheet Provides Efficient Financing for Growth $750 million revolver Current leverage: 3.5x2 Weighted average pre‐tax with $644 million currently undrawn1 (Long‐term leverage target of 3.0x – 3.5x) cost of debt 4.4%3 $750m Debt Maturity Profile No Near‐Term Maturities $644m of undrawn
Slide 17: Committed to Social Responsibility
Committed to Social Responsibility Creating long term shareholder value in a socially responsible and sustainable manner Reducing impacts on the environment Helping employees thrive Creating a strong safety culture Giving back to communities • Climate change is one of the largest • Providing flexibi
Slide 18: Investment Highlights
Investment Highlights 1 2 3 4 5 6 Market Strong Free Growth Proven Dynamic Capital Compelling Leader Cash Flow Runway Track Record Allocation Dividend Yield Leading propane Stable and consistent Substantial white‐ Proven track record Disciplined and Current yield distributor in the FCF generation sp
Slide 19: Appendix
Appendix “ Superior Plus gg : Superior Ph
Slide 20: Total Volumes and Gross Profit
Total Volumes and Gross Profit Sales Volume and Gross • Residential and commercial (“retail”) customers represent Profit by Segment1 94% of total gross profit 27% – Residential volumes are typically more correlated to weather, so Residential 54% there is less of an impact from economic slowdowns Com
Slide 21: Canadian Propane Distribution
Canadian Propane Distribution • Canadian propane distribution includes Superior Propane, Superior Gas Volume and Gross Profit by Segment1 Liquids and United Pacific Energy (“UPE”) 9% – Superior Propane is the leading propane distributor in Canada with a 27% diversified customer base and coast‐to‐coa
Slide 22: U.S. Propane Distribution
U.S. Propane Distribution • U.S. propane distribution includes Superior’s retail energy distribution business in the Eastern U.S., upper Midwest and California Volume and Gross Profit by Segment1 • U.S. propane distribution customer mix is less diversified than Canada and gross profit is driven prim
Slide 23: End Notes
End Notes Slide 3 Slide 11 Slide 20 1. Canadian Source Data: Conference Board of Canada Report Dec 2018 – 1. Represents all U.S. acquisitions since 2017 excluding NGL, UPE and IDI 1. TTM Q3 2021 Fueled Up. US Data ICF 2018 Retail Sales Report published December 2019 as NGL was a platform acquisition
Slide 24: Non-GAAP Financial Measures
Non‐GAAP Financial Measures Throughout the presentation, Superior has used the following terms that are not defined by International Financial Reporting Standards (“GAAP”), but are used by management to evaluate the performance of Superior and its businesses. Since non‐GAAP financial measures do not
Slide 25: Non-GAAP Financial Measures (continued)
Non‐GAAP Financial Measures (continued) Capital Expenditures Efficiency, process improvement and growth‐related expenditures will include expenditures such as acquisition of new customer equipment to facilitate growth, system upgrades and initiatives to facilitate improvements in customer service. M