Superior Plus Corp · TSX:SPB
Superior Plus — Investor Presentation (July 2022)
26 slides from Superior Plus's investor presentation, July 2022
Slide 1: Investor Presentation
Investor Presentation July 2022 Serving you Safely and Your Way
Slide 2: Forward-looking statements and information
Forward-looking statements and information This 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 are cautioned tha
Slide 3: Superior Plus Business Overview
Superior Plus Business Overview Superior is an industry- 3.4 billion leading North American litres total retail propane distribution company 2.1 billion litres in Canada #1 1.3 billion litres in U.S. - propane distributor in Canada with ~38% market share1 ~890,000 customers 4th largest ~4,200 employ
Slide 4: What is Propane?
What is Propane? Propane is an attractive energy source that is A Wide Range of Applications extracted primarily from natural gas during Home and water heating and powering home appliances production and processing but may also be Business and commercial applications such as heating extracted fr
Slide 5: Investment highlights
Investment highlights 1 2 3 4 5 6 Market Leader Strong Free Growth Runway Proven Track Dynamic Capital Compelling Cash Flow Record Allocation Dividend Yield Leading propane Stable and Substantial Proven track Disciplined and Current yield distributor in the consistent FCF white-space to record of un
Slide 6: Superior Plus Financial Overview
Superior Plus Financial Overview EBITDA by Segment1 Market Capitalization2 $2.3 billion 2021 Enterprise value2 $4.6 billion Distribution 56% 44% Leverage Ratio3 4.0x U.S. Propane Canadian Propane Distribution Distribution Adjusted EBITDA4 $437.2 million 2022 Guidance Adjusted EBITDA1 $425m – $465m S
Slide 7: Superior Plus Distribution & Customer Composition
Superior Plus Distribution & Customer Composition Propane Supply Customer mix weighted toward commercial U.S. business is heavily weighted towards and industrial end-use markets/customers residential and small commercial customers Residential / Wholesale / Commercial 7
Slide 8: What Makes the Propane Industry Attractive
What Makes the Propane Industry Attractive The North American propane market is attractive Pricing Model Protects Downside due to customer characteristics, sustainable free Cost plus pricing model provides for consistent, reliable cash flow cash flow and significant opportunities for growth High Swi
Slide 9: Strong EBITDA Growth and Free Cash Flow Conversion
Strong EBITDA Growth and Free Cash Flow Conversion EBITDA Growth Since 20161 • In 2021, Superior completed a comprehensive transformation into a pure-play energy distributor with a $410 $402 $410 major U.S. platform set for continued growth (millions) $265 • Streamlined management focus on $180 $167
Slide 10: Targeting $700-$750 Million of EBITDA by 2026
Targeting $700-$750 Million of EBITDA by 2026 Superior is targeting $700 to $750 EBITDA from Operations1 – Projected Growth ($millions) million of EBITDA from Operations1 through 2026 by: $700–$750 Executing on acquisition growth strategy; Acquisition spending of $1.1 billion Continuous improvem
Slide 11: 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 Heartland Industries to acquire annually at scale US CANADA YEAR 2017 2018 2019 2020 2021 2022 # Acquisitions 4 6 5 5 7 4 $ TEV ($m)
Slide 12: Deployed $1.1 Billion in Capital Across 21 Transactions
Deployed $1.1 Billion in Capital Across 21 Transactions, Targeting Post-Synergy Average Multiple Improvement of ~2.0x Summary of USPD Acquisitions (excl. NGL)1 Acquisitions Completed 21 Capital Deployed ~$1.1 billion Acquired EBITDA2 ~$126 million Synergized EBITDA2 ~$173 million Acquired EV/EBITDA
Slide 13: Recent Financial Results – Q1 2022 & FY 2021
Recent Financial Results – Q1 2022 & FY 2021 Adjusted EBITDA (millions)(1) First Quarter 2022 Results(1)(2) Full Year 2021 Results(1)(2) $250.4 $398.4 $379.4 $211.6 Q1 2021 Q1 2022 FY 2020 FY 2021 Strong year over year growth Modestly higher results inline driven by acquisitions, higher with guidanc
Slide 14: Historical Results and 2022 Guidance
Historical Results and 2022 Guidance COVID-19 impact Historical Adjusted EBITDA ($m)1,2 $425 – $465 2022 Guidance $398 $373 $379 Adjusted EBITDA1 $425m – $465m $237 $159 $118 2016 2017 2018 2019 2020 2021 2022 Guidance See End notes for further information 14
Slide 15: Capital Expenditures and Free Cash Flow Conversion Profile
Capital Expenditures and Free Cash Flow Conversion Profile Superior generates robust FCF conversion of ~80%, with annual maintenance capex needs of ~$40m-$50m Historical Free Cash Flow Conversion Profile1 Capital Expenditures1 ($m) 84% 83% 79% 72% 73% $130-$150 $118 $122 $107 55% $24 $25 $30-$40 $90
Slide 16: Strong Balance Sheet Provides Efficient Financing for Growth
Strong Balance Sheet Provides Efficient Financing for Growth $750 million revolver Current leverage: 4.0x2 Weighted average pre-tax with $296 million currently undrawn1 (Leverage target of 3.5x – 4.0x) cost of debt 4.4%3 Debt Maturity Profile $750m $750m No Near-Term Maturities $500m Inexpensive BA/
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 Helping employees thrive Creating a strong safety culture Giving back to communities environment • Providing flexibility for employees’ • Working diligentl
Slide 18: Questions?
Questions?
Slide 19: Appendix
Appendix 19
Slide 20: Total Volumes and Gross Profit
Total Volumes and Gross Profit Sales Volume and • Residential and commercial (“retail”) customers represent Gross Profit by Segment1 94% of total gross profit • Residential volumes are typically more correlated to weather, so 26% Residential there is less of an impact from economic slowdowns 53% Com
Slide 21: Canadian Propane Distribution
Canadian Propane Distribution • Canadian propane distribution includes Superior Propane, Superior Gas Liquids and Volume and Gross Profit by Segment1 United Pacific Energy (“UPE”) 9% • Superior Propane is the leading propane distributor in Canada with a diversified customer 26% 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 Volume and Gross Profit by Segment1 in the Eastern U.S., upper Midwest and California • U.S. propane distribution customer mix is less diversified than Canada and 55% gross profit is driven
Slide 23: End Notes
End Notes Slide 3 Slide 8 Slide 13 1. Canadian Source Data: Conference Board of Canada Report Dec 1. Calculated as average of 2020 and 2021. 1. Adjusted EBITDA is a Non-GAAP Financial Measure. Details for 2018 – Fueled Up. US Data: LP Gas 2022 Top Propane Retailers Non-GAAP financial information is
Slide 24: End Notes
End Notes Slide 16 1. As at Q1 2022. 2. Q1 2022 Leverage is based on Net Debt to Adjusted EBITDA for the Trailing Twelve Months ended March 31, 2022 excluding Specialty Chemicals segment. Leverage Ratio is a Non-GAAP Financial Measure. Details for Non-GAAP financial information is provided in Superi
Slide 25: 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 26: 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