Crossamerica Partners Lp · NYSE:CAPL
Crossamerica Partners Lp — Investor Presentation (November 2015)
34 slides from Crossamerica Partners Lp's investor presentation, Nov 12, 2015
Slide 1: CST Investor Update November 2015
CST Investor Update November 2015
Slide 2: Safe Harbor Statements
Safe Harbor Statements Forward-Looking Statements Statements contained in this presentation that state the Company’s and Partnership’s or management’s expectations or predictions of the future are forward-looking statements and are intended to be covered by the safe harbor provisions of the Securiti
Slide 3: CST Brands Overview
• Tax free spin off from Valero Energy Corporation on May 1, 2013 • Ranks #277 in Fortune 500 for 2014 • One of the largest independent wholesaler and retailer of motor fuels and convenience merchandise in North America • Strong urban footprint, supplying and retailing motor fuel in nearly 3,000 loc
Slide 4: Our CST Footprint
• TX ranks #3 in 2014 in states with job growth(1) • Top States to do Business 2015(2): TX ranks #2 and CO ranks #4 Site Locations • U.S. Retail – 1,027 – Substantially all company operated retail • Canadian Retail – 860 – Commission Agents – Company Operated Retail – Cardlock CO 76 AZ NM OK TX AR L
Slide 5: CrossAmerica Footprint
5 CrossAmerica Footprint • Over 1,100 locations – 526 Lessee Dealers – 368 Independent Dealers – 116 Retail Locations – 70 Commission Agents – 68 Non-fuel Real Estate • Significant amount of owned property – Approximately 60% Owned CrossAmerica Service Center • Allentown, PA Site count as of Septemb
Slide 6: Our Core Values
Our Core Values CORE VALUES i
Slide 7: Our Business Strategy
•Grow organically through the construction of New- To-Industry Stores (NTIs) Organic Growth •Grow our business in existing and new geographic locations through acquisitions Acquisitive Growth •Develop and expand our wholesale fuel distribution business U.S. Wholesale Business Growth •Grow our conven
Slide 8: Our 2020 Vision: Organic Growth
Our 2020 Vision Organic Growth 8 2009 - 2012 2013 2014 2015 2016 2017 - 2020 Canada 13 7 10 11 13 88 U.S. 28 15 28 38 48 238 Cumulative Total 41 63 101 150 211 537 0 100 200 300 400 500 600 N ew S to re C ou n t 75 - 100 225 - 250 10 - 15 45 - 50 10 - 12 33 - 35 • By the end of 2020, NTIs will make
Slide 9: Funding of Organic Growth: Dropdown Transactions with CrossAmerica
Funding of Organic Growth Dropdown Transactions with CrossAmerica Transaction #1 January 2015 5% interest in CST Fuel Supply $50.4 M in CrossAmerica units* $142.0 M in Cash + $119.5 M in CrossAmerica units* $261.5 M in Total Value Transaction #2 July 2015 12.5% interest in CST Fuel Supply Sale/Lease
Slide 10: Benefits of Recent Dropdowns
Benefits of Recent Dropdowns Benefits to CST • Received $142 million of cash • This funds approximately 65% of our 2015 expected U.S. NTI CAPEX program • Realized “gain” of approximately $138 million (unrecognized for accounting purposes) • Ownership interest in CrossAmerica increases to 15.9% • Ann
Slide 11: Proven Acquisitive Growth
Proven Acquisitive Growth $268.7 million of Combined Acquisition Growth with CrossAmerica Since October 1, 2014 185 million gallons of increased annual Wholesale fuel distribution from acquisitions 11 • Immediate synergy recognition in home market • Supplied by our local Distribution Center • New fu
Slide 12: Continued Acquisition Growth: Flash Foods
• 164 convenience stores with Flash Foods-branded fuel • Georgia and Florida markets • 21 branded Quick Service Restaurants • 90,000 SF merchandise distribution center in Alma, GA • 290 million gallons in fuel supply including leased storage and a transportation fleet • Strong customer-focused team
Slide 13: California Network Strategic Review
13 Total Non-Fuel Gross Profit YTD Sept. 2015 4% 96% California Remaining U.S. Network Total Fuel vs. Non-Fuel Gross Profit Mix YTD Sept. 2015 70% 30% Fuel Non-fuel *Excludes California Funding Acquisitive Growth California Network Strategic Review 76 Company Operated Locations California Network U.
Slide 14: CrossAmerica Wholesale Fuel Supply
14 CrossAmerica Wholesale Fuel Supply APPROX. 1.0 BILLION GALLONS (TTM) • Third party dealers • CST operated c-stores obtained via acquisitions • CrossAmerica company operated c-stores CrossAmerica Base Business and Future Acquisitions • Wholesale supply of fuel has grown to 1 billion gallons per ye
Slide 15: CST Wholesale Fuel Supply Equity – CST Fuel Supply LP
15 CST Wholesale Fuel Supply Equity – CST Fuel Supply LP CST US Stores 17.5% CrossAmerica Ownership CST Fuel Supply LP APPROX. 1.9 BILLION GALLONS (TTM) • As of October 1, 2015, CST Fuel Supply LP supplied fuel to 1,010 CST US stores – Comprised of all CST US stores, with the exception of stores acq
Slide 16: 2020 Vision: Inside Store Growth
2020 Vision Inside Store Growth Today 3Q15 2020 52% 48% Fuel Non-Fuel 30% 70% Fuel Non-Fuel 66% 34% Fuel Non-Fuel 50% 50% Fuel Non-Fuel U.S. Canada Note: Non-fuel includes Merchandise and “Other” Categories 16 Leads to Significant Shift in Gross Profit Mix Gross Profit Gross Profit Gross Profit Gros
Slide 17: Merchandise Margin Improvement Strategy
17 Merchandise Margin Improvement Strategy 1. Expand food service penetration 2. Continue to develop our private label packaged goods offering 3. Leverage logistics system to lower total cost of goods 4. Capitalize our highly developed immediately consumable business Targeting merchandise gross prof
Slide 18: Merchandise Profit Growth
Merchandise Profit Growth • U.S. merchandise sales per store are up 12% in 3Q15 vs. 3Q14 • Sales per store are up despite lower fuel volume as we drive for fuel margin gross profit improvement • Rolling out a grocery fill-in program Grow inside sales by expanding offerings and driving traffic • U.S.
Slide 19: Growing our Food Program
19 Growing our Food Program • Implementing best practices from Nice N Easy to ensure great tasting food offerings across all day-parts – Program will be implemented in 5 NTI prototypes in the greater San Antonio area in 4Q15 – Nice N Easy’s Made-to-Order program features pizza and sandwiches and is
Slide 20: Expanding Grocery Offerings
20 Expanding Grocery Offerings • Enhances large store product mix • Provides a fill-in alternative to grocery and drug channels • Implemented in 50 stores across our distribution center orbit • Opportunity to grow private label offering (200+ SKUs and growing in U.S. and Canada)
Slide 21: CST's Financial Model
21 CST’s Financial Model • 4 Key Operational Metrics – Merchandise Sales (quarterly guidance provided) – Merchandise Margin (quarterly guidance provided) – Fuel Volume (quarterly guidance provided) – Fuel Margin (monthly actual margins updated on our website) • OPEX, G&A and Depreciation (quarterly
Slide 22: CST Key Metrics – U.S. Retail
CST Key Metrics – September 30, 2015 Gross Profit (mm) Three Months Ended Sept. 30, % Change Motor Fuel $150 $117 28% Merchandise $121 $107 13% Other $15 $13 15% Key Metrics Three Months Ended Sept. 30, % Change Core Stores (EOP) 1,027 1,046 (2%) Motor Fuel Gallons Sold (PSPD) 5,226 4,921 6% Motor F
Slide 23: CST Key Metrics – Canadian Retail
Key Metrics Three Months Ended Sept. 30, % Change in USD % Change in CAD Total Retail Stores (EOP) 860 856 1% 1% Motor Fuel Gallons Sold (PSPD) 3,270 3,370 (3%) (3%) Motor Fuel CPG (net of CC) $0.237 $0.260 (9%) 8.4% Company Operated Stores (EOP) 291 282 3% 3% Merchandise Sales (PSPD) $2,442 $2,767
Slide 24: CrossAmerica Partners 3Q15 Results Summary
CrossAmerica Partners 3Q15 Results Summary (in thousands, except for per unit amounts) KEY METRICS Three Months ended Sept. 30, 2015 2014 % Change Gross Profit $47.8 $36.3 32% Adjusted EBITDA $31.0 $18.8 65% Distributable Cash Flow $25.1 $13.7 83% Weighted Avg. Diluted Units 33,094 19,359 71% DCF pe
Slide 25: CrossAmerica Partners 3Q15 Segment Results
CrossAmerica Partners 3Q15 Segment Results (in thousands, except for number of sites and per gallon amounts) WHOLESALE SEGMENT Three Months ended Sept. 30, 2015 2014 % Change Total Volume of Gallons Distributed 284,089 264,242 8% Fuel Margin per Gallon $0.061 $0.073 (16%) Rental Income $13,696 $9,46
Slide 26: Solid Financial Position – September 30, 2015
Solid Financial Position – September 30, 2015 CST Brands, Inc. Sept. 30, 2015 Cash $442 Total Debt $982 Net Debt $540 Net Revolver Capacity $296 Strong Balance Sheet Share Repurchase Plan $200 million stock purchase authorized in 3rd quarter of 2014 2.1 million shares repurchased through August
Slide 27: Investment Summary
27 Investment Summary Large, strong retail network in key growth markets across North America Industry leading fuel volumes with fuel margin strength and diversity across large footprint Growing network through successful new store builds and third party acquisitions Growth potential inside the stor
Slide 28: Appendix
Appendix 28
Slide 29: CST/CrossAmerica Relationship
CST/CrossAmerica Relationship On November 5, 2015 CST Brands, Inc. NYSE: CST CrossAmerica General Partner Canadian Retail U.S. Retail CrossAmerica Partners LP NYSE: CAPL Public Unitholders Joseph V. Topper & Affiliates Operating Subsidiaries CST 100% Ownership Interest 100% Ownership Interest 100% O
Slide 30: U.S. Retail
U.S. Retail Fuel Suppliers Merchandise Suppliers Company Operated Convenience Stores Wholesale fuel Business CrossAmerica owns 17.5% of this business. U.S. Retail 30
Slide 31: Canadian Retail
Canadian Retail Merchandise Suppliers Company Operated Convenience Stores Wholesale fuel Business Canadian Retail Fuel Suppliers Commission/Agent Sites Cardlock Sites Heating Oil Operations 31
Slide 32: Financial Metrics – CST Fuel Volume and Margin
Financial Metrics – CST 5,059 5,083 4,997 4,901 5,150 $0.131 $0.147 $0.139 $0.201 $0.190 2011 2012 2013 2014 YTD Sept. 2015 Fuel Volume Fuel Margin U.S. Fuel Volume and CPG Margin (net) Note: Fuel margins are net of credit card fees, and prior years are adjusted for commercial agreements. (Gallons p
Slide 33: Financial Metrics – CST Merchandise Sales and Margin
Financial Metrics – CST U.S. Merchandise & Other Sales and Margin % Note: Merchandise & Other Sales includes all non-fuel sales and are before credit card fees. Other Category Sales only include net revenue earned. (Sales per store per day) $3,510 $3,509 $3,533 $3,673 $4,073 32.6% 33.4% 33.5% 33.8%
Slide 34: CrossAmerica - Strong Financial Position
CrossAmerica - Strong Financial Position • Declared third quarter distribution of $0.5775 per unit – 1.5 cent per unit increase over second quarter – Continue to target 2015 annual per unit distribution growth of 7-9% – Expect 2015 annual Coverage Ratio over 1.0x, with continued long-term target of
CrossAmerica Partners — Investor Presentation (November 2015) on 6ix