Propel Funeral Partners Ltd. · ASX:PFP
Propel Funeral Partners — FY2018 Earnings Presentation
31 slides from Propel Funeral Partners's earnings presentation, Aug 28, 2018
Slide 1: FY18 Full year Results Presentation
FY18 Full year Results Presentation 28 August 2018
Slide 2: Important notice and disclaimer
Important notice and disclaimer This presentation contains summary information about Propel Funeral Partners Limited (ACN 616 909 310) (Propel) and its activities current as at the date of this presentation. Propel assumes no obligation to update such information. The information in this presentatio
Slide 3: Presenters
Presenters Albin Kurti Managing Director and Head of Investments Lilli Gladstone Head of Finance Fraser Henderson Head of M&A, General Counsel and Company Secretary 3
Slide 4: Agenda
Agenda 1. Key highlights for FY18 2. Business overview 3. FY18 financial results detail 4. Industry ‘tail winds’ and acquisition update 5. Outlook 6. Q&A Appendix 4
Slide 5: 1. Key highlights for FY18
1. Key highlights for FY18
Slide 6: Key highlights for FY18
Key highlights for FY18 1 Revenue: 76% to $80.9 million (FY17: $46.1 million) TRADING Funeral volumes: 67% to 10,111 (FY17: 6,054) ARPF1: 5.5% to $5,508 (FY17: $5,223) 2 Operating EBITDA: 75% to $21.5 million (FY17: $12.3 million) EARNINGS2 Operating NPAT3: 125% to $12.3 million (FY17: $5.5 million)
Slide 7: 2. Business overview
2. Business overview
Slide 8: Geographic presence
Geographic presence 107 locations (52 freehold / 55 leasehold), including 24 cremation facilities and 7 cemeteries August 2013 August 2018 Queensland Queensland 1 Western 14 Australia South Australia 9 28 New South Wales 3 1 ACT 17 Victoria 16 New Zealand Tasmania 19 FY12 FY13 FY14 FY15 FY16 FY17 FY
Slide 9: Brand portfolio
Brand portfolio Diversified single and multi-site brands with strong local community awareness QLD NSW/ACT VIC TAS SA WA NZ Pinegrove Funerals ismore Funeral Services Acquired since 1 July 2017 9
Slide 10: Volume and revenue growth
Volume and revenue growth Propel has maintained a strong growth trajectory Funeral volumes Revenue ($m) 10,111 80.9 2% 10% 9,907 Prospectus forecast 73.7 Prospectus forecast 6,054 46.1 2,967 22.4 1,625 10.9 906 6.0 465 278 1.2 2.2 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY12 FY13 FY14 FY15 FY16 FY17 FY18
Slide 11: Earnings growth
Earnings growth Propel has maintained a strong growth trajectory Operating EBITDA ($m) Operating NPAT1 ($m) 21.5 12.3 21.1 16% Guidance 19% 18.4 10.4 Prospectus Prospectus forecast forecast 12.3 5.5 5.8 2.9 3.1 1.5 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 . 1 Net profit after tax adjusted for the one
Slide 12: Average Revenue Per Funeral growth
Average Revenue Per Funeral growth 5 year compound annual growth rate (CAGR) of 3% $5,508 3% CAGR 3% $5,330 Prospectus $5,223 forecast $5,099 $4,976 $4,899 FY14 FY15 FY16 FY17 FY18 1Average Revenue Per Funeral excluding disbursements and delivered prepaid funeral impacts 12
Slide 13: 3. FY18 financial results detail
3. FY18 financial results detail
Slide 14: Financial summary
Financial summary Pro forma income statement Comments $ million FY18 FY17 Revenue • increased 76% on FY17 due to: Total revenue 80.9 46.1 – full period impact of six acquisitions completed in FY17 Cost of sales (24.5) (14.0) – part period impact of Seasons Funerals, Brindley Group Gross profit 56.4
Slide 15: Revenue bridge and Operating EBITDA
Revenue bridge and Operating EBITDA Operating EBITDA1 12.3 21.5 Margin 26.6% 26.6% Comments Total growth (26 businesses): Organic growth (16 businesses): Operating EBITDA Margin Average Revenue Per Funeral (ARPF)2 ARPF Influenced by: – 5.5% in FY18, influenced by the financial – 6.5% in FY18 over FY
Slide 16: Key operating and financial metrics
Key operating and financial metrics Propel outperformed key Prospectus forecasts FY18 FY18 Pro forma Prospectus Achieved Comments actual Forecast Operating metrics Number of locations 103 80 ✓ Number of funerals 10,111 9,907 ✓ 1 Average Revenue Per Funeral $5,508 $5,330 ✓ Financial metrics Gross pro
Slide 17: Cash flow highlights
Cash flow highlights Pro forma and Statutory actuals Comments Operating cash flow Pro forma actuals Statutory actuals • Reflects solid trading $ million FY18 FY17 FY18 FY17 • Minimal working capital movements: Receipts from customers (inc GST) 89.1 49.8 89.1 49.8 Payments to suppliers and employees
Slide 18: Strong financial position
Strong financial position Statutory balance sheet Comments $ million 30-Jun-18 30-Jun-17 Net cash position Cash and cash equivalents 28.3 6.8 – $28.3m of cash (as at 30 June 2018) Trade and other receivables 4.2 3.9 – no senior debt (Borrowings relate to hire purchase) Contract assets 45.6 35.6 – he
Slide 19: 4. Industry 'tail winds' and acquisition update
4. Industry ‘tail winds’ and acquisition update
Slide 20: Increasing number of deaths
Increasing number of deaths Number of deaths is the most significant driver of revenue in the death care industry Australia New Zealand 350,000 60,000 1.8% CAGR 2.2% CAGR (2025-2050) 300,000 (2025-2050) 50,000 1.1% CAGR 250,000 1.4% CAGR 0.6% CAGR (2016-2025) 40,000 0.9% CAGR (2016-2025) (1990-2016)
Slide 21: Acquisition update
Acquisition update Propel is focussed on delivering its Investment Strategy 1 WA entry: Acquired Seasons Funerals DURING ACT entry: Acquired Norwood Park (ACT/NSW/QLD) FY2018 NSW/VIC/QLD expansion: Acquired Brindley Group Signed agreement in relation to Newhaven Funerals NQ 2 QLD expansion: Complete
Slide 22: 5. Outlook
5. Outlook
Slide 23: Outlook
Outlook Propel is focussed on delivering on its Investment Strategy 1 Well positioned: Expect to benefit from: • acquisitions completed during and since FY18 CONTINUED • property transactions GROWTH • other potential future acquisitions and organic growth Record volume month in July 2018 2 Well fund
Slide 24: 6. Q&A
6. Q&A
Slide 25: Appendix
Appendix
Slide 26: Statutory – Pro forma reconciliation
Statutory – Pro forma reconciliation Pro forma verses Statutory Income Statement Comments FY18 Proforma FY18 $ million Key variances: Statutory Adjustments Proforma Total revenue 80.9 80.9 Operating costs Cost of sales (24.5) (24.5) • Corporate expenses as a consequence of Propel being listed on ASX
Slide 27: Income statement analysis
Income statement analysis Pro forma Income Statement Comments $ million FY18 FY17 Change % Funeral operations 72.3 40.7 31.5 77.3% Revenue segments: Cemetery and memorial gardens 6.9 4.4 2.5 55.7% • 89.4% generated from funeral operations Other trading revenue 1.7 0.9 0.8 90.8% • 8.5% generated from
Slide 28: Distributable Earnings and Dividend
Distributable Earnings and Dividend Reconciliation $ million FY18 Statutory NPAT (14.3) Proforma Adjustments: Share based payment 21.9 Interest expense 2.0 IPO costs 2.8 Operating cost benefit under listed company 0.1 Proforma NPAT 12.5 Distributable Earnings calculation: Acquisition costs 0.7 Net f
Slide 29: External management structure with 10 year escrow
External management structure with 10 year escrow Management Agreement and escrow provisions put shareholder returns first and align for the long term 1 Exclusivity ❑ The Manager works exclusively for Propel 2 ❑ No salaries or directors fees are paid to the Management Shareholders No performance = n
Slide 30: Simplified corporate structure
Simplified corporate structure Management Agreement QLD NSW/ACT VIC TAS SA WA NZ Property Trust Freehold Operating subsidiaries Properties 30
Slide 31: Propel Funeral Partners
PROPEL FUNERAL PARTNERS PrP
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