Viva Energy Group Ltd. · ASX:VEA
Viva Energy — H1 2023 Earnings Presentation
29 slides from Viva Energy's earnings presentation, Aug 22, 2023
Slide 1: Half Year Results
Half Year Results Half Year ended 30 June 2023 Helping people reach their destination
Slide 2: Important notice and disclaimer
Important notice and disclaimer This presentation has been prepared by Viva Energy Group representation or warranty, express or implied, is made as to differ materially from any future results, performance or Limited, ACN 626 661 032 (“Company” or “Viva Energy”). the fairness, accuracy, completeness
Slide 3: Contents
Contents Scott Wyatt 01 Group Highlights CEO Carolyn Pedic 02 Financial Highlights CFO Scott Wyatt 03 Strategic Update, Outlook CEO 04 Appendix Viva Energy Group Limited – 1H2023 Results Presentation 3
Slide 4: Group Highlights
Group Highlights Scott Wyatt Viva Energy Group Limited – 1H2023 Results Presentation
Slide 5: Safety and Environment
Safety and Environment Improved safety performance during a period of significant maintenance activity Total Recordable Loss of primary Process safety events2 Injury Frequency Rate1 containment (>100KG)2 4 6.7 29 3 6.0 5.5 24 2 4.6 19 19 3.6 2 9 1 1 1 FY19 FY20 FY21 FY22 1H23 FY19 FY20 FY21 FY22 1H2
Slide 6: 1H2023 Highlights
1H2023 Highlights Continued strong sales and earnings performance from our non-refining businesses Fuel Sales EBITDA (RC) Net debt 1H2023 dividend +11% $362M $274M 8.5 CPS1 To 7.6BL +40% +$565M on FY22 +73% (excl. Refining) (excl. Refining) Convenience & Mobility (C&M) Commercial & Industrial (C&I)
Slide 7: Fuel Sales Performance
Fuel Sales Performance Sustained year on year sales growth in all segments C&M fuel volumes (ML) C&I fuel volumes (ML) 4,515 11,073 4,210 10,361 969 9,737 3,757 1,082 3,706 3,689 8,609 8,896 1,205 1,898 3,488 1,126 1,756 1,200 1,334 1,347 3,345 1,893 1,473 1,254 1,525 2,188 2,327 2,268 5,336 5,103 7
Slide 8: Fuel Market Performance
Fuel Market Performance Strong sales performance and steady improvement on overall market share in target segments National market share by fuel type Australian fuel sales (vs Dec-2019 baseline)2 40% VEA mkt share, VEA volume growth 1,2,3 growth 20% Petrol 20%, -0.4% ~ 0.5% 0% -20% Diesel 26%, +0.5%
Slide 9: Energy & Infrastructure (E&I) Performance
Energy & Infrastructure (E&I) Performance Extended major maintenance activity and softer regional refining margins impacted GRM in 1H2023 Refining margin cracks1, GRM2, Crude Premia3 Refining production (%) (US$/bbl) FY2018 FY2019 FY2020 FY2021 FY2022 1H2022 1H2023 58.0 10% Other 14% 17% 18% 17% 25%
Slide 10: Financial Highlights
Financial Highlights Carolyn Pedic Viva Energy Group Limited – 1H2023 Results Presentation 10
Slide 11: 1H2023 Financial Performance
1H2023 Financial Performance Growth in the non-refining businesses supported a 8.5 CPS dividend 1H2023 Group Results Change 1H2023 Group EBITDA (RC) bridge ($M) All financials in $M unless 1H2023 1H2022 noted otherwise (%) (#) Lower regional margins EBITDA (RC) 361.9 611.7 -41% (249.8) than 1H2022 a
Slide 12: 1H2023 Convenience & Mobility (C&M)
1H2023 Convenience & Mobility (C&M) Sales growth and improved margin conditions drove a strong earnings uplift 1H2023 C&M EBITDA (RC) bridge ($M) Continued sales growth across core channels Property and lease General inflation and expenses (>60% higher marketing fixed escalations) investment Improve
Slide 13: 1H2023 Commercial & Industrial (C&I)
1H2023 Commercial & Industrial (C&I) Continued recovery and robust demand from most sectors driving strong sales growth 1H2023 C&I EBITDA (RC) bridge ($M) Focus on Margin on higher margin specialty Inflation Benefits from uncontracted impact, bad purchasing products and spot sales debts and supply s
Slide 14: 1H2023 Energy & Infrastructure (E&I)
1H2023 Energy & Infrastructure (E&I) Significantly impacted by lower regional margin environment and extended major maintenance 1H2023 E&I (RC) bridge ($M) Impact from lower crack spreads compared with 1H2022 which Major Maintenance & Compressor incident was significantly Impacted intake (from 21.5M
Slide 15: 1H2023 Cash Flow
1H2023 Cash Flow Underlying cash conversion remains strong despite a major maintenance turnaround Group net cash flow bridge ($M) Higher tax due to catch-up instalments relating to FY2022 period Includes $10.4M of C&M acquisition integration costs Underlying free cash flow ($M) *Includes C&M acquisi
Slide 16: Capital Expenditure
Capital Expenditure Highly focused on return on capital in the current environment FY2023 guidance remains unchanged for net capex of $405M – $455M 1H2023 Updated FY2023 • Base capital guidance lowered to $165M – $190M. actual Guidance Convenience & Mobility, 40 110 – 130 • Refining major maintenanc
Slide 17: Balance Sheet
Balance Sheet Substantial capacity to pursue strategic growth objectives Change in net cash (debt) ($M) • Returned $205.8M to shareholders (net of dividends paid on treasury shares) from the final FY2022 dividend, and expect to distribute $131.3M through interim dividend in September 2023. Borrowing
Slide 18: Dividends
Dividends Interim 1H2023 fully franked dividend of 8.5 cps supported by strong non-refining earnings 1H2023 • Determined an interim, fully franked dividend of 8.5 cps, up +73% y/y for C&M and C&I and at top end of dividend policy3 All financials in $M Convenience Commercial & Energy & Group unless n
Slide 19: Strategic Update, Outlook
Strategic Update, Outlook Scott Wyatt Viva Energy Group Limited – 1H2023 Results Presentation 19
Slide 20: Progressing our Transition and Growth Strategy
Progressing our Transition and Growth Strategy Leveraging the diversity in our three increasingly distinct businesses Today Pathway Future Outperform in core business Extend offer outside traditional fuel Further enhancements • Directly capture convenience earnings (Coles Express • Continue to grow
Slide 21: Convenience & Mobility (C&M) Update
Convenience & Mobility (C&M) Update Progressing regulatory approval for OTR Group acquisition, as Coles Express integration begins Coles Express acquisition completed 1 May 2023 • In-store experience and customer offer remains unchanged. – ~6,000 Coles Express team members have joined Viva Energy Re
Slide 22: Ultra Low Sulphur Gasoline Project (ULSG) Update
Ultra Low Sulphur Gasoline Project (ULSG) Update Planning and investment well underway, with completion expected by mid-2025 Total investment of approximately ~$350M expected for ULSG project and further changes to fuel specifications (aromatics) • To date, $84M has been invested in the ULSG project
Slide 23: Co-Processing Renewable and Waste Derived Feedstocks
Co-Processing Renewable and Waste Derived Feedstocks Supports processing of up to 50,000 tonnes of renewable feedstocks • Viva Energy plans to build infrastructure which will enable its refinery at Geelong to receive and process feedstocks such as used cooking oil, animal fats and synthetic crude ma
Slide 24: Outlook
Outlook Diversity of three businesses and growth initiatives to support earnings in 2H2023 Convenience & Mobility (C&M) Commercial & Industrial (C&I) Energy & Infrastructure (E&I) • Lower mobility and cost of living pressures drive • Expect commercial segments to continue to • Well positioned to tak
Slide 25: Appendix
Appendix Viva Energy Group Limited – 1H2023 Results Presentation 25
Slide 26: OTR Group Acquisition
OTR Group Acquisition Transaction highlights Viva Energy to acquire OTR Group for $1.15bn. Completion expected in 2H20231. Contributes $165M to EBITDA (post synergies) on a pro-forma basis2. A best-in-class convenience and QSR capability that generates $3.9M of sales per store (versus Coles Ex
Slide 27: Refinery – Margin Analysis and Key Drivers
Refinery – Margin Analysis and Key Drivers Metric FY18 FY19 FY20 FY21 FY22 1H22 1H23 A: A$/US$ FX 0.75 0.69 0.69 0.75 0.70 0.72 0.68 B: Crude and feedstock intake mbbls 40.1 42.0 34.8 41.2 41.9 21.5 16.2 C: Geelong Refining Margin US$/bbl 7.4 6.6 3.1 7.1 17.1 19.9 10.8 D: Geelong Refining Margin = C
Slide 28: Glossary
Glossary Replacement Cost (“RC”) EBITDA (RC) Historical Cost (“HC”) Geelong Refining Margin Viva Energy reports its performance Profit before interest, tax, depreciation Calculated in accordance with The Geelong Refining Margin is a on a “replacement cost” (RC) basis. and amortisation adjusted to re
Slide 29: VIVA Energy
VIVA EnergyAustralia