Susser — Investor Presentation (September 2011)
75 slides from Susser's investor presentation, Sep 15, 2011
Slide 1: Business Review
Exhibit 99.2 Business Review September 15, 2011
Slide 2: Safe Harbor
Some of the statements in this presentation constitute “ forward - looking statements ” about Susser Holdings Corporation that involve risks, uncertainties and assumptions, including without limitation, our discussion and analysis of our financial condition and results of operations. These forward-l
Slide 3: \ a E a NS
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Slide 4: Current Company Overview
Retail stores in Texas, Oklahoma and New Mexico 535 retail sites largest company operated C-store chain in the U.S. Largest wholesale motor fuel distributor in Texas ~ 440 contracted dealers Q2 LTM $836 million of merchandise sales, 1.2 billion gallons Current Company Overview Current Company Overvi
Slide 5: Stores Open by 2000
Stores Open by 2000 Stores Open by 2000 Stores open by 2000
Slide 6: Coastal/Tex-Mart Stores Acquired (2001)
Coastal/Tex-Mart Stores Acquired (2001) Stores open by 2000 Coastal/Tex-Mart stores acquired (2001)
Slide 7: 2001–2007 Store Build-Out
2001–2007 Store Build-Out Stores open by 2000 Coastal/Tex-Mart stores acquired (2001) Build-out of stores, 2001-2007
Slide 8: Town & Country Acquisition – November 2007
Town & Country Acquisition – November 2007 Stores open by 2000 Coastal/Tex-Mart stores acquired (2001) Build-out of stores, 2001-2007 T&C acquisition
Slide 9: Build-out 2007-2011
Build-out 2007-2011 Stores open by 2000 Coastal/Tex-Mart stores acquired (2001) Build-out of stores, 2001-2007 T&C acquisition 2007-2011 Big Box Build-Out
Slide 10: Combined Susser Footprint
Combined Susser Footprint Build-out 2007-2011 Stores open by 2000 Coastal/Tex-Mart stores acquired (2001) Build-out of stores, 2001-2007 T&C acquisition Wholesale locations
Slide 11: Widening the Gap
Widening the Gap Widening the Gap (in 000’s, based on LTM data) (in 000’s, based on LTM data) Average Per-Store Merchandise Sales Note: Annual data based on each company’s fiscal year. LTM data based on latest fiscal quarter reported. $1,055 $1,142 $1,270 $1,437 $1,488 $1,540 $1,593 $898 $954 $999 $
Slide 12: Average Per-Store Gallons
Average Per-Store Gallons Note: Annual data based on each company’s fiscal year. LTM data based on latest fiscal quarter reported. Widening the Gap Widening the Gap (in 000’s, based on LTM data) (in 000’s, based on LTM data) 1,186 1,243 1,319 1,355 1,388 1,421 1,446 1,114 1,230 1,306 1,289 1,269 1,2
Slide 13: EBITDA Has Tripled Since IPO
$45 $58 $111 $90 $120 $145 $55 $66 $107 $113 $124 $130 EBITDA Has Tripled Since IPO EBITDA Has Tripled Since IPO (1) 2009 is adjusted to exclude the 53 week $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 $140 $150 2009 (1) 2011 Q2 LTM EBITDA (in millions) +21% +33% - 18% +29% +90% $30 $40 $50 $60 $
Slide 14: Key Drivers: Consolidated Break-Even CPG
Key Drivers Consolidated Break-Even CPG Consolidated Break-Even CPG Breakeven CPG = Minimum fuel margin/gallon needed to cover net operating expenses, rent, principal, interest and routine capex ($50k/retail stores, $5k dealer site). CPG is defined for this analysis as consolidated Susser Holdings a
Slide 15: Enterprise Value / LTM EBITDA
Enterprise Value / LTM EBITDA Enterprise Value / LTM EBITDA SUSS Presents Compelling Opportunity SUSS Presents Compelling Opportunity for Long-Term Investors for Long-Term Investors (1) Pro forma for T&C acquisition (2) Stock price as of Sept. 9, - $21.72 (3 ) Source: First Call, September 7, 2011 (
Slide 16: SUSS Trades at Compelling Value vs Peers
SUSS Trades at Compelling Value vs Peers SUSS Trades at Compelling Value vs Peers Stock price as of Sept. 9, 2011; LTM EBITDA as of latest reported fiscal quarter
Slide 17: Susser Petroleum Company
GY stripes» Susser Petroleum Company
Slide 18: Fuel Industry Supply Chain
Valero Exxon Conoco Chevron Texaco Shell Valero Chevron Conoco Flint Hills Stripes, Wholesale Dealers and other Commercial Customers GoPetro or 3 rd Party Transport Fuel Industry Supply Chain Fuel Industry Supply Chain Drilling/Pumping Station Refinery Crude Storage Tank Pipeline/Storage/Terminals T
Slide 19: Susser Holdings Focused on Three Segments
C-store industry is large ($576B in 2010 per NACS) and highly fragmented Susser participates in three Large chain segment – Stripes convenience stores Fuel supplier to independent operators – SPC o Over 91,000 independent convenience stores in U.S., and is fastest growing segment with 36% growth in
Slide 20: Susser Petroleum Company Overview
Susser Petroleum Company Overview Susser Petroleum Company Overview Largest non-refiner motor fuels distributor in Texas Branded distributor for all major brands of fuel available in our markets – Chevron, CITGO, Conoco, Exxon, Mobil, Phillips 66, Shell, Texaco and Valero Fuel and logistics supplier
Slide 21: Susser Holdings Gallon Breakdown
Susser Holdings Gallon Breakdown Susser Holdings Gallon Breakdown Note: Charts based on Q2 YTD results Gallons Sold by Division Diversified Supplier Base 60% 29% 11% Stripes Dealer Commercial
Slide 22: Consignment Dealer Customer Type
Consignment (21% of SPC volume, 35% of GP$) • SPC owns fuel in tanks • SPC sets retail price, pays dealer a commission for selling fuel • SPC collects $3.8 million rent from owned properties Dealer Customer Types Dealer Customer Types
Slide 23: Supply Dealer Customer Type
Supply (52% of SPC volume, 34% of GP$) • SPC sells fuel to dealer by the truckload at cost plus a fixed markup • Dealer owns fuel inventory at location and dealer sets retail price Dealer Customer Types Dealer Customer Types
Slide 24: Commercial Customer Profile
Over 600 unbranded customers Unbranded convenience stores Sub-jobber/fuel distributors Farm/agriculture/construction/trucking companies School districts and municipalities Spot customers Neither party obligated under contract SPC sends price quote to customer daily If customer accepts, SPC sells fue
Slide 25: Consignment Dealer Locations
Consignment Dealer Locations Consignment Dealer Locations Consignment Texas New Mexico Oklahoma Louisiana Dallas San Antonio Eagle Pass Galveston Austin Abilene Wichita Falls Midland San Angelo Corpus Christi Roswell Lawton Oklahoma City Brownsville McAllen Laredo Albuquerque Amarillo El Paso Santa
Slide 26: Supply Dealer Locations
Supply Dealer Locations Supply Dealer Locations Texas New Mexico Oklahoma Louisiana Dallas Fort Worth San Antonio Eagle Pass Galveston Houston Austin Abilene Wichita Falls Midland San Angelo Lubbock Corpus Christi Roswell Lawton Oklahoma City Brownsville McAllen Laredo New Orleans Baton Rouge Albuqu
Slide 27: Combined Dealer Locations
Combined Dealer Locations Combined Dealer Locations Consignment Supply Texas New Mexico Oklahoma Louisiana Dallas Fort Worth San Antonio Eagle Pass Galveston Houston Austin Abilene Wichita Falls Midland San Angelo Lubbock Corpus Christi Roswell Lawton Oklahoma City Brownsville McAllen Laredo New Orl
Slide 28: Wholesale Fuel – Stable Margins / Lower Volatility
Wholesale Fuel – Wholesale Fuel – Stable Margins / Lower Volatility Stable Margins / Lower Volatility Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Supply Consignment Commercial 4.9 6.0 7.3 7.2 3.5 4.0 5.1 3.7 4.2 5.8 5.9 5.1 5.1 7.0 0¢ 2¢ 4¢ 6¢ 8¢
Slide 29: SPC Gallons Sold by Type
48% 50% 50% 52% 20% 21% 21% 21% 32% 29% 29% 27% SPC Gallons Sold by Type – SPC Gallons Sold by Type – rd Party Party In Millions 2011 Q2 LTM Supply Consignment Commercial
Slide 30: SPC Gross Profit by Type
38% 35% 36% 33% 17% 37% 11% 32% 14% 34% 35% 13% SPC Gross Profit by Type SPC Gross Profit by Type $ In Millions $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 2011 Q2 LTM Supply Consignment Commercial Rent GoPetro 9% 13% 4% 3% 15% 3% % 14%
Slide 31: Wholesale Segment Growth Opportunities
Organic growth in existing markets Acquisitions in new & existing markets Sales – build “best in class” Technology/CRM – integrate tools for more effective market penetration and coverage Channels – leverage existing relationships and focus on affinity groups, third party channels, etc. Types – key
Slide 32: Optimization Opportunities for SPC
Supply Leverage purchasing power – scale leads to improved pricing Optimize supply point and contract economics Optimize product Transportation & Customer Service Increase truck utilization and efficiency Implement carrier score card – measure and drive performance Improve customer experience extend
Slide 33: Growth in Dealer Business
Growth in Dealer Business Growth in Dealer Business Total Dealer Count 2011Q2 Beginning of Year New Contracts Signed Dealer Contracts Acquired Closed/Divested Sites (9) (10) (42) (16) (18) (5) End of Year Dealer Gallons (millions) * * represents 2011 Q2 LTM
Slide 34: Dealer Locations
Dealer Locations Dealer Locations
Slide 35: Leveraging Technology to Expand Reach
Leveraging Technology to Expand Reach Leveraging Technology to Expand Reach Price Tool Price Control Center Sapphire POS System Price Sign Dispenser
Slide 36: Value-Added Programs Assist Dealers and Increase Retention
SPC works with Stripes to leverage purchasing power for our dealers National fountain pricing, coffee, ATM, prepaid cards, air/water dispensing, Blockbuster video rental, lawn maintenance, pressure washing, pump topper advertising, etc. Over 1500 program participants; 9% increase YTD 77% of dealers
Slide 37: Why Do Customers Choose SPC?
Why Do Customers Choose SPC? Why Do Customers Choose SPC? Solid reputation (integrity, financially sound, etc.) Choice of quality brands - more than competitors Competitive pricing Reliable supply of product Willingness to invest capital in projects Value-added programs and support We provide more t
Slide 38: Synergy between Wholesale and Retail
Synergy between Wholesale and Retail Synergy between Wholesale and Retail Purchasing power Fuel Certain Stripes programs offered to dealers Fuel distribution/logistics expertise benefits both businesses without duplicate cost Leveraged technology and G&A investment Stability of margin – wholesale is
Slide 39: Susser Petroleum Company
GY stripes» Susser Petroleum Company
Slide 40: Leveraging our unique connection with key stakeholders
Leveraging our unique connection with key stakeholders Team members, suppliers, customers …combined with our technology platform …and growing markets Delivers consistent top tier performance Same store sales growth while protecting margins Reduce operating costs relative to sales Nimbleness to chang
Slide 41: Key Drivers: Average Fuel Gallons Sold per Store
Key Drivers +5% +3% 5% +2% +2% +4% +6% Average Weekly Fuel Gallons Sold per Store Favorable demographics Strategy: Protect and grow volume New stores built for volume Expansion of diesel Dedicated diesel islands Auto diesel added to legacy stores Investment in new fuel dispensers Average Fuel Gallon
Slide 42: Key Drivers: Retail Fuel Margin
Key Drivers 10.8 12.1 13.6 11.1 14.1 16.2 2.9 2.7 4.2 3.5 4.3 5.0 Retail Fuel Margin Retail Fuel Margin Volatility Strategy: Competitive retail price on every corner Shift in product mix – higher margin in diesel Communication Availability of information Transparency through technology (cents per ga
Slide 43: Key Drivers: Average Merchandise Sales per Store
Key Drivers +8% +13% +3% +4% +6% +11% Average Weekly Merchandise Sales per Store Average Merchandise Sales per Store Average Merchandise Sales per Store Continue to Grow Continue to Grow + 22 years of positive same store sales Favorable demographics New store development Aggressive category manageme
Slide 44: Key Drivers: Consistent Merchandise Margin Performance
Key Drivers 32.6% 32.5% 34.3% 33.3% 33.6% 34.0% 35.9% 35.6% 36.8% 35.7% 36.0% 36.6% Consistent Merchandise Margin Performance Consistent Merchandise Margin Performance Store-specific pricing Supplier offers Capital invested in revenue-generating equipment, e.g.: Ice makers Fountains Bundling with fo
Slide 45: Category Management
Category Management Educated, passionate success-driven team Data-driven decision making Store-specific plan-o- grams on key categories led by designated category captains Space to opportunity Store-specific pricing Sales-Driven Culture Sales-Driven Culture
Slide 46: It's All About The Food
It’s All About The Food Leveraging Hot, Fresh & Delicious Leveraging Hot, Fresh & Delicious Prepare and serve great food Made from scratch Market basket impact Create customer trial Build lunch & dinner
Slide 47: LTC Customers Visit Stripes 40% More Often
LTC Customers Visit Stripes 40% More Often LTC Customers Visit Stripes 40% More Often Famous for Tacos Famous for Tacos 2011 Q2 LTM Number of LTC Food Units Sold Annually
Slide 48: Stripes 2010 Incentive Contests
Stripes 2010 Incentive Contests Incentive Target Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2011 Camaro (1) Area Mgr 2011 Camaro (1) Area Mgr 2011 Super Bowl (1) Division Mgr 2011 Pro Bowl (5) SM/AM/DM 100 Days of Summer (325i BMW/ 25Trips) AM/DM Ford Mustang Cars (7) Store Mgr Las Vegas ACMA T
Slide 49: Plus Selling Impact on Sales
$9,800,000 attributed to plus selling Average Weekly Sales 50 bps of SSS Due to Plus Selling 50 bps of SSS Due to Plus Selling $0 $50,000 $100,000 $150,000 $200,000 Jan Feb May Jun Jul Aug Oct Nov Jan Feb Apr May Jun Jul Aug Oct Nov Jan Feb Apr May Jun
Slide 50: Private Label is Important to Stripes
Quality with great price Private Label is Important to Stripes Quality product Enhances value offering Enhances overall sales and gross profits Only at Stripes
Slide 51: Stripes Key Shortage Expenses
Key Drivers 3.0% 2.7% 2.8% 2.6% 2.4% 2.0% Stripes Key Shortage Expenses Stripes Key Shortage Expenses ~$7M Annualized Shortages / Shrink / Waste (% of merchandise sales excluding food service sales ) Common POS platform POS & digital video integration Transaction-level data warehouse New – Store-lev
Slide 52: Store Labor Expense Management
Key Drivers 14.4% 14.6% 14.7% 14.7% 14.0% 13.9% Store Labor Expense Management Store Labor Expense Management Challenges Offsetting wage inflation Competing with the oil patch Food service model Labor hours controlled to common standard Next steps: labor distributed to meet peak customer traffic per
Slide 53: Alignment of Performance Based Incentives
Key Drivers Alignment of Performance Based Incentives Alignment of Performance Based Incentives Aligned incentives around key business drivers Introduced a balanced scorecard that is easily understood OER is a key non-financial performance measure Progressive Improvement People Systems Customers Fin
Slide 54: Real Estate Development: Driving Organic Growth
Real Estate Development Driving Organic Growth
Slide 55: Leading Market Position in Highly Attractive Markets
Population Change ‘00 – ‘10 (Top 5 States) (1) 35 and Under Population Demographic (2) Texas population growth projected to be one of the highest in the U.S. Favorable core demographic Relatively young population 38% of Texas population is Hispanic 46% of Texas population <18 is Hispanic McAllen & B
Slide 56: Regional Economy is Improving
Largest 10 States - Change in Non-Farm Employment January 2007 thru July 2011 (1) Regional Economy is Improving Regional Economy is Improving Sources: (1) Source: Bureau of Labor Statistics. (2) Texas Wide Open for Business (affiliated with the Office of the Governor) Texas economy outperforming U.S
Slide 57: Stable Real Estate Market
Stable Real Estate Market % of Underwater Mortgages by State (2 nd Quarter 2011) Note: 7 states are excluded due to lack of data Source: CoreLogic, Inc.
Slide 58: Drilling Activity = Positive Impact on Our Markets
Drilling Activity = Positive Impact on Our Markets Drilling Activity = Positive Impact on Our Markets Sources: Baker Hughes Corp.
Slide 59: Existing Stores Continue to Grow
Merchandise Sales Merchandise Gross Profit Fuel Gallons 4-Wall Cash Flow Existing Stores Continue to Grow…. Existing Stores Continue to Grow…. Stores Opened Prior to 2000 Stores Opened Prior to 2000 (in millions) $110 $130 $150 $170 $190 Q2 LTM $40 $44 $48 $52 $56 $60 Q2 LTM $20 $24 $28 $32 $36 $40
Slide 60: New Store Returns
New Store Returns New Store Returns New New Stores Stores Delivering Delivering ~ ~ 20% 20% Unlevered Unlevered ROI ROI Unlevered ROI = Store incremental cash flow before rent / Total initial store investment Levered ROI = Store incremental cash flow after rent / Net store investment (after sale/lea
Slide 61: New Stores Driving Cash Flow
Legacy Stores (Prior to 2000) Town & Country Stores Acquired Stores Built (1) All Stores # of Stores Avg. Building Sq. Ft. 2.6K 3.7K 4.9K 3.5K Avg. Lot Sq. Ft. 21K 50-60K 50-80K 47K Avg. Annual Merch Sales (000’s) $1,230 $1,821 $2,248 $1,618 Avg. Annual Fuel Gallons (000’s) 1,674 2,250 1,480 Avg. An
Slide 62: Growing Merchandise Sales per Square Foot
Merchandise Sales per Sq. Ft. Average Building and Land Sq. Ft. per Retail Store Growing Merchandise Sales per Square Foot Growing Merchandise Sales per Square Foot New stores deliver strong returns Typical cost is $2.5 - $3.5 million Unlevered ROI of approximately 20% by year 3 New stores are 2x th
Slide 63: 2011 Retail Growth
Midland – 6,325 Sq. Ft. 2011 Retail Growth 2011 Retail Growth Lubbock – 6,325 Sq. Ft. Blanco – 10,220 Sq. Ft. (Acq.) Refugio – 6,325 Sq. Ft. Odessa – 4,850 Sq. Ft. Eagle Pass – 4,850 Sq. Ft. Corpus Christi – 4,850 Sq. Ft. Rio Grande City – 4,650 Sq. Ft.
Slide 64: New Retail Store Growth
Abilene – 4,650 Sq. Ft. 2009 2010 2011 2012 2011 Retail Growth 2011 Retail Growth New Retail Store Growth Los Fresnos – 6,150 Sq. Ft. Brownsville– 4,650 Sq. Ft. Leakey – 4,384 Sq. Ft. (Acquisition) 19 - > 21
Slide 65: SUSS Real Estate Summary
SUSS Real Estate Summary SUSS Real Estate Summary As of July 3, 2011 As of July 3, 2011 Controlled by Operating: Fee Leased Franchisee Total Sites Retail Wholesale Total Operating Sites Non-Operating: Land Bank / In Development Surplus / Income Producing Office / Warehouse Total:
Slide 66: Why is Susser an Excellent Buy Today?
Strong and resilient industry fundamentals Leading market position in highly attractive markets Differentiated retail strategy Unique retail/wholesale business model Strong and consistent operating performance Visible growth opportunities Experienced management with significant ownership Proven abil
Slide 67: Susser Petroleum Company
GY stripes» Susser Petroleum Company
Slide 68: Continuing Track Record of Growth
Revenue EBITDAR generation family led fuel business dating back to 1930s Sam L. Susser joined the Company in 1988 when the Company operated five stores Completed 12 significant acquisitions in last 22 years Doubled the business in 1988, 1992, 1995, 2001 & 2007 Transitioned to a large-format store mo
Slide 69: Recent Operating Trends
Merchandise Same Store Sales Average Retail Gallons per Store per Week Merchandise Same Store Sales Average Retail Gallons per Store per Week Positive merchandise same store sales in 21 of the past 22 quarters 2011 started strong Recent Operating Trends Recent Operating Trends ($ millions) Increase
Slide 70: Key Results
Key Results Key Results Merchandise Same Store Sales Growth 3.3% 4.0% 2.8% 5.7% Retail Avg. / Store/Week Gallons Growth 2.3% 2.5% 0.8% 3.4% Merchandise Margin, Net of Shortages 33.3% 33.6% 33.3% 34.0% Fuel Margins (CPG) Retail 14.6¢ 18.4¢ 18.0¢ 23.3¢ Wholesale 4.1¢ 5.3¢ 5.0¢ 6.1¢ Expense as % of Mer
Slide 71: Growing Merchandise Profit Dollars
Merchandise Same Store Sales & Margins 32.0% 32.2% 32.3% 32.6% 32.5% 34.3% 33.3% 33.6% 34.0% Growing Merchandise Profit Dollars _____________________ (1) Net of shortages, does not include other income such as lottery, ATM, etc. (2) Pro forma, assuming Town & Country acquisition occurred January 1,
Slide 72: Growing Both Retail & Wholesale Segments
173 180 182 336 308 305 306 319 325 504 512 525 526 532 34 222 238 291 334 332 333 346 367 387 372 390 431 439 Successfully integrated 12 major acquisitions, including: $361 million acquisition of 168 units in November 2007 25-unit acquisition in August 2009 40-unit acquisition in September/October
Slide 73: Managing Leverage and Delivering Growth
Managing Leverage and Delivering Growth Managing Leverage and Delivering Growth 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 12/07 * * Pro forma for acquisition of Town & Country (168 retail sites) Net Debt to Adj EBITDA 8x Rent + Net Debt to Adj EBITDAR
Slide 74: Financial Strength Provides Opportunity for Growth
Cash = $3.80/sh Financial Strength Provides Opportunity for Growth Financial Strength Provides Opportunity for Growth Refinanced debt at 8.5% in May 2010 Extended maturities Improved flexibility and cash flow Increased unencumbered properties $66mm of cash and $101mm available on revolver at end of
Slide 75: Partial List of Sources for Economic Data
http://www.window.state.tx.us/ http://www.texasahead.org/economy/tracking/ http://www.dallasfed.org/ http://texaseconomicdevelopmentguide.com/ http://recenter.tamu.edu/ http://texascenter.tamiu.edu/ http://www.ccredc.com/ http://www.mcallenedc.org/ http://www.ldfonline.org/ http://www.midlandtxedc.c
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