Viva Energy Group Ltd. · ASX:VEA
Viva Energy — UBS Australasia Conference 2019
39 slides from Viva Energy's conference presentation, Nov 18, 2019
Slide 1: UBS Australasia Conference Presentation
For personal use only 18 November 2019 UBS Australasia Conference Presentation Viva Energy Chief Executive Officer, Scott Wyatt, will today present at the UBS Australasia Conference in Sydney, Australia. A copy of the presentation is attached. Further enquiries: Media Enquiries Investor Relations T:
Slide 2: About Viva Energy
For personal use only About Viva Energy Viva Energy (ASX: VEA) is one of Australia’s leading energy companies and supplies approximately a quarter of the country’s liquid fuel requirements. It is the exclusive supplier of high quality Shell fuels and lubricants in Australia through an extensive netw
Slide 3: UBS Australasia Conference - November 2019
For personal use only UBS Australasia Conference 18 - 19 November 2019
Slide 4: Important notice and disclaimer
Important notice and disclaimer This presentation has been prepared by Viva Energy This presentation has been prepared without taking information may materially change in the future. You should rely on your own independent assessment For personal use only Group Limited, ACN 626 661 032 (“Company” or
Slide 5: Agenda
Agenda For personal use only Introduction to Viva Energy Australia 1H2019 financial results, highlights and looking forward Q&A 3
Slide 6: Introduction to Viva Energy Australia
For personal use only Introduction to Viva Energy Australia 4
Slide 7: Business overview
Business overview RETAIL For personal use only Viva Energy supplies more than 1,250 retail sites Australia wide 25% 22 terminals Network of around of Australia’s downstream 1,241 and 52 airports petroleum market strong Australian workforce 37% based in regional areas and airfields across Australia C
Slide 8: Commitment to excellence
Commitment to excellence Safety Environment For personal use only Total Recordable Injury Frequency Rate (TRIFR)1 Loss of containment (>1,000 KG) 7 5.8 5 4 4.7 4.5 3.3 3 2.5 2 FY2015A FY2016A FY2017A FY2018A 1H2019A FY2015A FY2016A FY2017A FY2018A 1H2019A • TRIFR of 3.3, which represents a 40% reduc
Slide 9: Strategic national retail network
Strategic national retail network Viva Energy network distribution by channel Viva Energy network distribution by state For personal use only 1% 2% 7% NT 697 32% 12% TAS 3 SA 53 WA 3 50 QLD 466 17% VIC Dealer owned branded wholesale2 NSW 27% Company controlled1 800 of the Australian population are l
Slide 10: Diversified commercial and specialty business
Diversified commercial and specialty business For personal use only AVIATION TRANSPORT • 35% market share of Australian Aviation1 • Bulk diesel to an extensive blue-chip customer portfolio • Nationwide aviation fuel infrastructure footprint • Supply directly to customers’ on-site refuelling faciliti
Slide 11: Strategically positioned and profitable refinery
Strategically positioned and profitable refinery The Geelong Refinery is embedded into the Victorian supply chain For personal use only Flexibility of Crude Intake (1H2019)2 Production slate (1H2019) Operational availability (%) 1 120 kbbls/d capacity 2% 2% 8% 93% 94% 94% 2 9.44 Nelson Complexity In
Slide 12: Refining performance impacted by regional refining margins
Refining performance impacted by regional refining margins Geelong Refining Margin (excluding energy costs)1 vs Singapore FCC Margin2 (2015 to 3Q2019) For personal use only 14.0 12.0 10.0 US$8.8/bbl 8.0 Average premium US$3.6/bbl 6.0 US$5.2/bbl 4.0 2.0 - 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2
Slide 13: Industry volumes and 1H2019 snapshot
Industry volumes and 1H2019 snapshot Industry and VEA YoY volume movement (%)1 For personal use only Overview 1H2019 FY2016 FY2017 FY2018 1H2019 • Total volumes of 7,126 million litres, up 2.5% on 1H2018 Industry 3.7% 0.9% 4.5% -2.2% volume of 6,955 million litres • Total market volume growth (2015-
Slide 14: 1H2019 financial results, highlights and looking forward
For personal use only 1H2019 financial results, highlights and looking forward 12
Slide 15: Key financial results for 1H2019
Key financial results for 1H2019 For personal use only AASB 1171 AASB 161 1H2019 $m AASB 1171 AASB 161 Underlying EBITDA (RC) (old standard) (new standard) $168.7m $168.7m Retail 283.3 283.3 Net debt Net debt Commercial 155.6 158.3 Total Retail, Fuels & Marketing 438.9 441.6 $50.9m $2,393.2m Lease l
Slide 16: Divisional results for 1H2019
Divisional results for 1H2019 Retail Underlying EBITDA (RC) Commercial Underlying EBITDA (RC) For personal use only Overview AASB 16 (new standard) $m AASB 16 (new standard) $m 800 800 607 609 • Retail earnings in 1H2019 were impacted by lower retail market fuel 600 497 542 600 margins. Alliance vol
Slide 17: Capital expenditure and investment in growth
Capital expenditure and investment in growth For personal use only FY2019 capex FY19 capex FY2018A 1H2019A 2H2019F • Total FY19 capex forecast for Retail, Fuels & Marketing, Refining and SC&O is $179.9 million $m $m $m • Total FY19 capex forecast, inclusive of additional growth investments, is Retai
Slide 18: Strong balance sheet
Balance sheet 30 June 31 Dec Difference For personal use only 2019 2018 $m Strong balance sheet $m $m Summary balance sheet 1. Net debt of $168.7 million at 30 June 2019, including one-off payment of 1 $137m to Coles Express to effect the reset of the Alliance partnership Working capital 348.0 268.0
Slide 19: 1H2019 dividend
1H2019 dividend For personal use only Strong cash flow and balance sheet provides financial flexibility 1H2019A $m • Dividend for the six months ended 30 June 2019 of 2.1 cents per share, fully franked was paid on 14 October 2019 Underlying Net Profit After Tax (RC) 50.9 Add Impact of AASB 16 50.2 •
Slide 20: Year to date highlights and looking forward
Year to date highlights and looking forward For personal use only Highlights Looking forward 1• Renegotiated the retail Alliance partnership with Coles Express •1 Targeting Alliance growth to 70-75ML per week • Improved pump pricing nationally and a range of new marketing initiatives 2 underway •2 L
Slide 21: Q&A
For personal use only 19 Q&A
Slide 22: Appendix
For personal use only Appendix 20
Slide 23: Board of Directors
Board of Directors For personal use only Robert Hill Arnoud De Meyer Jane McAloon Sarah Ryan Dat Duong Hui Meng Kho Scott Wyatt Chairman Independent Independent Independent Head of Asia President & Chief Executive Independent Non-executive Non-executive Non-executive Pacific CEO, Vitol Asia Officer
Slide 24: Executive Leadership Team
Executive Leadership Team For personal use only Scott Wyatt Jevan Bouzo Daniel Ridgway Lachlan Pfeiffer Chief Executive Chief Financial Chief Operating Executive General Officer Officer Officer Manager, Legal and External Affairs Megan Foster Denis Urtizberea Thys Heyns Amanda Fleming Executive Gene
Slide 25: Coles Alliance
For personal use only Coles Alliance 23
Slide 26: 1H2019 financial highlights
1H2019 financial highlights 30 June 31 Dec 1H2019 $m 1H2018 $m 2019 2018 For personal use only AASB 1171 AASB 16 AASB 117 AASB 162 $m $m Volume (ML) 7,126.1 7,126.1 6,955.0 6,955.0 Long term assets Property, Plant & Equipment 1,441.0 1,471.3 Underlying EBITDA (RC) Retail, Fuels & Marketing 438.9 441
Slide 27: AASB 16: New lease accounting standard
AASB 16: New lease accounting standard For personal use only Viva Energy has adopted the new lease accounting standard (AASB 16) for 1H2019 results, in line with accounting standard requirements The transition to AASB 16 has no impact on the underlying economics of the business, cash flows nor on an
Slide 28: AASB 16: Leases
AASB 16: Leases Operating costs D&A Interest Tax use only • Remove lease expense from • Increase amortization • Higher net finance • Lower profit before tax, operating costs within EBITDA cost from Right of costs based on lease results in smaller • Add back lease straight-lining Use Asset liability
Slide 29: Group Underlying EBITDA (RC) $m
Group Underlying EBITDA (RC) $m For personal use only AASB 117 (old standard)1 AASB 16 (new standard)2 Historical Historical Cost (“HC”) 483 394 626 435 176 Cost (“HC”) 693 616 856 676 301 Replacement 535 455 634 Replacement 746 677 864 529 172 770 297 Cost (“RC”) Cost (“RC”) 1,000 1000 900 900 800
Slide 30: Group Underlying Net Profit After Tax (RC) $m
Group Underlying Net Profit After Tax (RC) $m For personal use only AASB 117 (old standard)1 AASB 16 (new standard)2 Historical Historical Cost (“HC”) 207 212 355 228 81 Cost (“HC”) 122 135 285 163 54 450 450 400 400 350 350 300 300 250 250 $m $m 200 200 361 150 293 150 291 244 255 229 100 100 178 1
Slide 31: Tax update
Tax update Income tax benefits For personal use only • Listing on the ASX and the consequent election by the Company to be a single taxpayer resulted in an increase in the tax cost base of company assets reflecting the amount subscribed by investors under the IPO • For the purposes of the FY2018 Acc
Slide 32: AASB leases: Proforma financials
AASB leases: Proforma financials AASB 117 AASB 16 AASB 117 AASB 16 $m $m1 $m $m1 For personal use only Group Underlying EBITDA (RC) D&A 2015A 535.2 745.9 2015A (69.7) (258.7) 2016A 455.4 677.2 2016A (80.6) (269.7) 2017A 634.3 864.4 2017A (111.5) (300.5) 2018A 528.9 770.0 2018A (129.7) (318.7) 1H2019
Slide 33: Viva Energy terminal network
Viva Energy terminal network For personal use only Owned terminal storage capacity (ML)1 Geelong Refinery 280.6 Birkenhead2 61.9 Newport 86.3 Port Lincoln 15.7 Total Victoria 366.9 Total South Australia 77.7 Clyde 266.1 Gore Bay 65.9 Devonport 21.7 Total NSW 332.0 Total Tasmania 21.7 Gladstone2 40.2
Slide 34: Industry volumes
Industry volumes For personal use only Total volumes sold by product (ML)1 (2015-2018 & 1H2019) CAGR CAGR Gasoline Diesel (2015-2018) (2015-2018) 18,313 18,480 18,653 35,766 17,868 32,404 32,791 31,183 Industry 8,562 -0.8% 17,699 Industry +5.6% VEA 4,394 4,063 3,540 3,270 -9.4% 6,200 6,181 6,231 6,3
Slide 35: Refinery – illustrative sensitivity analysis
Refinery – illustrative sensitivity analysis For personal use only • For the purposes of tracking the financial performance of the Geelong Refinery, a sensitivity table is provided below to illustrate the impact on 2H2019 Underlying EBITDA (RC) and Underlying NPAT (RC) of each US$1.0 move in GRM alo
Slide 36: Refinery – margin analysis and key drivers
Refinery – margin analysis and key drivers Metric FY2015A FY2016A FY2017A FY2018A 1H2019A 4.5 Year For personal use only Average A: A$/US$ FX 0.75 0.74 0.77 0.75 0.71 0.75 B: Crude and feedstock intake mbbls 37.8 39.9 40.8 40.1 21.4 40.0 C: Geelong Refining Margin US$/bbl 11.8 7.9 10.2 7.4 5.1 8.9 D
Slide 37: Refining margin: the market
Refining margin: the market Singapore FCC Refining Margin (US$/bbl) Gasoline and diesel cracks1 (US$/bbl) For personal use only 10.0 30 9.0 25 8.0 20 7.0 6.0 15 5.0 10 4.0 5 3.0 2.0 0 1.0 -5 - Oct 2014 Apr 2015 Oct 2015 Apr 2016 Oct 2016 Apr 2017 Oct 2017 Apr 2018 Oct 2018 Apr 2019 -10 Oct 2014 Apr
Slide 38: Definitions
Definitions Historical Cost (“HC”) Net inventory gain/(loss) Distributable NPAT (RC) For personal use only Calculated in accordance with IFRS Represents the difference between the historical Represents Underlying NPAT (RC) adjusted to cost basis and the replacement cost basis remove the impact of fo
Slide 39: For personal use only
For personal use only ~~ Lee Vi VA EnergyAustralia