Propel Funeral Partners Ltd. · ASX:PFP
Propel Funeral Partners — H1 FY2018 Earnings Presentation
31 slides from Propel Funeral Partners's earnings presentation, Feb 26, 2018
Slide 1: FY18 First Half Results Presentation
FY18 First Half Results Presentation 26 February 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 1H FY18 2. Business overview 3. 1H FY18 financial results detail 4. Industry ‘tail winds’ and acquisition update 5. FY18 Outlook 6. Q&A Appendix 4
Slide 5: Key highlights for 1H FY18
1. Key highlights for 1H FY18
Slide 6: Key highlights for 1H FY18
Key highlights for 1H FY18 1 Revenue: 84% to $38.9 million (1H FY17: $21.2 million) TRADING Funeral volumes: 85% to 5,053 (1H FY17: 2,729) ARPF1: 3.9% to $5,427 (FY17: $5,223) 2 Operating EBITDA: 79% to $11.0 million (1H FY17: $6.1 million) EARNINGS2 Operating NPAT3: 90% to $6.3 million (1H FY17: $3
Slide 7: Business overview
2. Business overview
Slide 8: Geographic presence
Geographic presence 103 locations (50 freehold and 53 leasehold), including 23 crematoria and 7 cemeteries February 2013 February 2018 Queensland Queensland 1 Western 12 Australia South Australia 8 28 New South Wales 2 2 ACT 16 Victoria 16 New Zealand Tasmania 19 FY2012 FY2013 FY2014 FY2015 FY2016 F
Slide 9: Brand portfolio
Brand portfolio Diversified single and multi-site brands with strong local community awareness QLD NSW/ACT VIC TAS SA WA NZ Pinegrove Funerals Brands acquired from ismore Funeral Services Brindley Group 96% relevant interest acquired via a takeover 9 offer which closed 13 February 2018
Slide 10: Volume and revenue growth
Volume and revenue growth Propel has maintained a strong growth trajectory Funeral volumes Revenue ($m) Prospectus Prospectus Forecast Forecast 9,907 73.7 6,054 46.1 5,053 38.9 2,967 22.4 2,729 21.2 1,625 10.9 906 6.0 465 278 1.2 2.2 FY12 FY13 FY14 FY15 FY16 FY17 FY18F FY12 FY13 FY14 FY15 FY16 FY17
Slide 11: Earnings growth
Earnings growth Propel has maintained a strong growth trajectory Operating EBITDA ($m) Operating NPAT1 ($m) Prospectus Prospectus Forecast Forecast 10.4 18.4 12.3 11.0 5.5 6.3 5.8 2.9 6.1 3.3 3.1 1.5 FY15 FY16 FY17 FY18F FY15 FY16 FY17 FY18F 1H Actual 1H Actual 1Proforma net profit after tax adjuste
Slide 12: Average Revenue Per Funeral growth
Average Revenue Per Funeral growth Propel has maintained a strong growth trajectory Average Revenue Per Funeral1 $5,427 $5,330 $5,223 $5,099 $4,976 $4,899 FY14 FY15 FY16 FY17 FY18 P 1H FY18A 1Average Revenue Per Funeral excluding disbursements and delivered prepaid funeral impacts 12
Slide 13: 1H FY2018 financial results detail
3. 1H FY2018 financial results detail
Slide 14: Financial summary
Financial summary Pro forma income statement Comments $ million 31-Dec-17 31-Dec-16 Change Revenue Total revenue 38.9 21.2 84% • increased ~84% on PCP due to: Cost of sales (11.9) (6.3) 90% – full period impact of six acquisitions completed in FY17 Gross profit 27.0 14.9 81% – part period impact of
Slide 15: Revenue bridge and Operating EBITDA
Revenue bridge and Operating EBITDA Operating EBITDA1 6.1 11.0 Margin 29.0% 28.1% Comments Total growth (24 businesses): Organic growth (16 businesses): Operating EBITDA Margin Volumes Volumes Influenced by: – up ~85.2% on PCP due to the full period impact – up 2.0% on PCP, impacted by 2017 winter f
Slide 16: Key operating and financial metrics
Key operating and financial metrics 1H FY18 FY18 Pro forma Prospectus actual Forecast Operating metrics Number of locations 80 80 Number of funerals 5,053 9,907 Encouraged by 1H FY18 performance given: 1 Average Revenue Per Funeral $5,427 $5,330 – funeral volumes were 3.4% above expectations Financi
Slide 17: Cash flow highlights
Cash flow highlights Pro forma and Statutory actuals Comments Pro forma actuals Statutory actuals Operating cash flow $ million 31-Dec-17 31-Dec-16 31-Dec-17 31-Dec-16 • Reflects strong trading in 1H FY18 Receipts from customers (inc GST) 43.1 22.4 43.1 22.4 • Minimal working capital movements: Paym
Slide 18: Strong financial position
Strong financial position Statutory balance sheet Comments $ million As at 31 Dec 17 As at 30 June 17 Net cash position Cash and cash equivalents 52.0 6.8 – $52.0m of cash (as at 31 December 2017) Trade and other receivables 4.2 3.9 – no senior debt Contract assets 38.3 35.6 – strong balance sheet t
Slide 19: 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: Fragmented industry of scale
Fragmented industry of scale Industry revenue estimated to be $1.1 billion1 in Australia and NZ$0.26 billion2 in NZ Australian death care industry New Zealand death care industry market share by revenue1 market share by revenue2 InvoCare 19.1% InvoCare 39.5% Others Others 56.4% 74.2% 6.7% 4.1% 1The
Slide 22: Acquisition update
Acquisition update Propel is focussed on delivering its Investment Strategy 1 DURING WA entry: Acquired Seasons Funerals 1H FY18 NSW/VIC expansion: Signed agreement in relation to Brindley Group 2 NSW/VIC/QLD expansion Completed Brindley Group acquisition (NSW/VIC) SINCE 1H FY18 and ACT entry: Acqui
Slide 23: FY18 Outlook
5. FY18 Outlook
Slide 24: FY18 Outlook
FY18 Outlook Propel is focussed on delivering on the Investment Strategy 1 21.1 FY18 FORECAST Operating EBITDA: Increased to $21.1 million1, 15% on UPGRADE Prospectus forecast of $18.4 million 18.4 2.7 2 Funeral volumes: Strong 1H FY18 volumes may result in a higher POSSIBLE degree of seasonality in
Slide 25: Q&A
6. Q&A
Slide 26: Appendix
Appendix
Slide 27: Statutory – Pro forma reconciliation
Statutory – Pro forma reconciliation Pro forma verses Statutory Income Statement Comments Proforma Key variances: $ million 31-Dec-17 31-Dec-17 Adjustments Total revenue 38.9 38.9 Operating costs • Corporate expenses as a consequence of Propel Cost of sales (11.9) (11.9) being listed on ASX for the
Slide 28: Income statement analysis
Income statement analysis Pro forma Income Statement Comments $ million 31-Dec-17 31-Dec-16 Change % Funeral operations 35.6 18.8 16.8 89.3% Revenue segments: • 91.3% generated from funeral operations Cemetery and memorial gardens 2.6 2.2 0.4 20.3% • 6.6% generated from cemetery and memorial Other t
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 will work exclusively for Propel 2 No salaries or directors fees will be paid to the Management Shareholders No perform
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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