Propel Funeral Partners Ltd. · ASX:PFP
Propel Funeral Partners — FY2024 Earnings Presentation
35 slides from Propel Funeral Partners's earnings presentation, Aug 27, 2024
Slide 1: FY24 Results Investor Presentation
FY24 Results Investor Presentation 27 August 2024 1
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer This presentation contains summary information about Propel Funeral Partners Limited No representation or warranty, express or implied, is made as to the fairness, accuracy, (ACN 616 909 310) (Propel) and its activities current as at the date of this presentation. Pro
Slide 3: Presenters
Presenters Albin Kurti Lilli Gladstone Fraser Henderson Managing Director Chief Financial Officer Head of M&A, General Counsel and Company Secretary 3
Slide 4: Agenda
Agenda 1. Key highlights of FY24 2. Company overview 3. FY24 financial results detail 4. Industry trends and acquisitions 5. Summary and outlook 6. Q&A Appendices 4
Slide 5: 1. Key Highlights of FY24
1. Key Highlights of FY24 PROPEL FUNERAL PARTNERS PrP
Slide 6: Key Highlights of FY24
Key Highlights of FY24 Revenue Funeral Volumes Average Revenue Per Funeral 1 TRADING1 $209.2m 21,655 $6,635 ~24% ~20% ~4% Operating EBITDA Operating NPAT (Pro Forma2) Cash Flow Conversion 2 EARNINGS1 $55.4m $23.4m ~99% ~21% ~12% ~360bps Dividend Gearing Ratio Funding Capacity4 CAPITAL 3 MANAGEME
Slide 7: 2. Company Overview
2. Company Overview PROPEL FUNERAL PARTNERS PrP
Slide 8: Geographic Presence
Geographic Presence 198 operating locations1 (118 owned / 80 leased), including 38 cremation facilities and 9 cemeteries 1 August 2013 2 August 2024 Queensland Queensland 1 Western 30 Australia South Australia 15 46 New South Wales 11 1 ACT 19 Victoria 58 New Zealand Tasmania 18 Geographic footprint
Slide 9: Brand Portfolio
Brand Portfolio Diversified single and multi-site brands with strong local community awareness Australia NZ Pinegrove Funerals ismore Funeral Services Southern Funeral Home Acquisitions completed since 1 July 2023. 9
Slide 10: Track Record
Track Record Propel has maintained a strong growth trajectory Funeral volumes (#) 21,655 ~20% Revenue ($m) 209.2 ~24% 18,029 168.5 16,537 145.2 13,916 13,299 120.4 110.8 11,304 10,111 95.1 80.9 6,054 46.1 2,967 22.4 1,625 10.9 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY15 FY16 FY17
Slide 11: Average Revenue Per Funeral Growth
Average Revenue Per Funeral Growth Compound annual growth rate (CAGR) of ~3.2% since FY15 $6,635 ~4% on FY23 $6,398 (comparable up 5.5%) CAGR ~3.2% $6,038 $5,917 $5,672 $5,585 $5,508 $5,223 $5,099 $4,976 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 11
Slide 12: Cash Flow Conversion
Cash Flow Conversion Consistently strong 104.0% 103.4% 101.8% 100.2% 98.9% 99.0% 93.7% 96.5% 97.4% 95.4% ~99% average (since FY15) FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 12
Slide 13: Performance Summary Since IPO
Performance Summary Since IPO Propel’s share price has outperformed the ASX300 since the IPO in November 2017 Relative share price and index performance (23 November 2017 to 30 June 2024) 125% Total shareholder return3 Propel ~104.7% 100% +113.3%1 75% Total shareholder value accretion4 50% ~$465m 25
Slide 14: 3. FY24 Financial Results Detail
3. FY24 Financial Results Detail
Slide 15: Financial Summary
Financial Summary Pro forma Income Statement1 Comments $ million FY24 FY23 Revenue Total revenue 209.2 168.5 • Increased 24.2% on FY23 to $209.2m, primarily due to: Gross profit 146.0 118.1 – comparable Average Revenue Per Funeral growth of 5.5% …margin 69.8% 70.1% – contributions from 162 acquisiti
Slide 16: Revenue Bridge and Operating EBITDA margin
Revenue Bridge and Operating EBITDA margin Resilient Operating EBITDA margin despite a contraction in industry death volumes (expected to be temporary) Operating EBITDA margin 27.3% 26.5% Comments Total: Organic: Operating EBITDA margin: Funeral Volumes Funeral Volumes Resilient margin of 26.5% (FY2
Slide 17: Cash Flow
Cash Flow Statutory actuals Comments $ million FY24 FY23 Receipts from customers (inc GST) 228.1 183.6 Operating activities Payments to suppliers and employees (inc GST) (174.1) (138.8) • Operating Cash Flow increased 20.5% on FY23 54.0 44.9 Income taxes paid (8.6) (8.0) • Cash Flow Conversion remai
Slide 18: Balance Sheet
Balance Sheet Statutory actuals Comments $ million FY24 FY23 Cash and cash equivalents 7.3 46.9 Cash and net debt position Contract assets 77.2 64.5 • $7.3m of cash (30 June 2023: $46.9m) Other current assets 18.9 17.8 • $113.2m of drawn senior debt (30 June 2023: $140.6m) Total Current Assets 103.3
Slide 19: Capital Management
Capital Management Available funding capacity of ~$153 million, significant debt covenant headroom and higher dividends Funding Capacity Dividend summary (cps)5 $ million FY24 FY23 Fully franked dividend (cps) 14.4 14.0 Senior debt facility limit 275.0 Dividend payout ratio (rounded) 85% 79% Net Deb
Slide 20: 4. Industry Trends and Acquisitions
4. Industry Trends and Acquisitions
Slide 21: Increasing Number of Deaths
Increasing Number of Deaths Number of deaths is the most significant driver of revenue in the death care industry 1 Australia 2 New Zealand 2.9% CAGR 60,000 300,000 (2031-2040) 2.1% CAGR (2031-2040) 2.5% CAGR 50,000 1.9% CAGR 250,000 (2024-2030) (2024-2030) 40,000 200,000 0.9 % CAGR 0.8% CAGR (1990-
Slide 22: Market Share Estimate (Funeral Volumes)
Market Share Estimate (Funeral Volumes) Propel has increased its market share in the highly fragmented Australian funeral industry 1 CY151 2 CY232 InvoCare InvoCare ~21% ~25% Others Others ~74% ~70% ~1% ~9% 1. Note: 159,052 actual deaths (ABS data) for market size, 1,920 funerals performed by Propel
Slide 23: Acquisitions
Acquisitions Propel completed or announced ~$104 million1 on 12 acquisitions in FY24 (~$295 million1 since its IPO) 1 1. Olsens Funerals Jul-23 Sydney, NSW 2. J Fraser & Sons Jul-23 Southland, NZ 3. Harbour City Funeral Home Aug-23 Wellington, NZ 4. Terry Longley and Tong & Peryer Sep-23 Hastings &
Slide 24: 5. Summary and Outlook
5. Summary and Outlook PROPEL FUNERAL PARTNERS PrP
Slide 25: Summary
Summary Growth track record, stable management, defensive market position and sector thematic are attractive characteristics 1 Long term growth profile • Strong growth track record (>18 fold increase in Revenue and Operating EBITDA since FY15) • Consistent growth in key operating metrics (funeral vo
Slide 26: Outlook
Outlook Demand for essential funeral services is underpinned by favourable demographics 1 Expected growth drivers for the remainder of FY25: • favourable demographics in Australia and New Zealand • a strong funding position • acquisitions completed to date and other potential acquisitions in what is
Slide 27: 6. Q&A
6. Q&A PROPEL FUNERAL PARTNERS PrP
Slide 28: Appendices
Appendices PROPEL FUNERAL PARTNERS PrP
Slide 29: Definitions
Definitions Adjusted Effective Tax Rate means income tax expense divided net profit before tax, adjusted for non deductible and non assessable items. ANZ means Australia and New Zealand. Average Effective Interest Rate means the average interest rate on senior debt, including the interest rate swap
Slide 30: Propel's ESG Journey
Propel’s ESG Journey Propel acknowledges the importance of ESG considerations in today’s corporate and social landscape Environmental Social Sustainability Community participation Price Transparency Working towards a more sustainable future: ▪ multi-brand portfolio = meaningful identity within local
Slide 31: Statutory Financial Summary
Statutory Financial Summary Income Statement $ million FY24 FY23 Statutory Statutory Total revenue 209.2 168.5 Gross profit 146.0 118.1 …margin 69.8% 70.1% Total operating costs (90.6) (72.1) Operating EBITDA 55.4 46.0 …margin 26.5% 27.3% Depreciation (14.3) (11.4) Operating EBIT 41.1 34.6 …margin 1
Slide 32: Income Statement Analysis
Income Statement Analysis $ million FY24 FY23 Comments Funeral operations 186.6 148.1 Cemetery, crematoria and memorial gardens 20.3 18.5 Revenue segments: Other trading revenue 2.4 2.0 • 89.2% generated from funeral operations (FY23: 87.9%) Total revenue 209.2 168.5 • 9.7% generated from cemetery a
Slide 33: NPAT to Operating NPAT Reconciliation
NPAT to Operating NPAT Reconciliation $ million FY24 FY23 Pro forma Statutory Statutory net profit after tax 17.8 19.0 Add: Interest expense (tax effected) 2.3 Pro forma net profit after tax 20.1 Add: Acquisition and transaction costs 3.3 1.6 Add: Net other income and expenses 0.3 0.2 Add: Net finan
Slide 34: Distributable Earnings and Dividend
Distributable Earnings and Dividend Reconciliation $ million FY24 FY23 Pro forma Statutory Net profit/(loss) after tax 20.1 19.0 Distributable Earnings calculation Acquisition and transaction costs 2.8 1.3 Net financing charge on prepaid contracts 0.5 0.8 Distributable Earnings 23.4 21.1 Dividend pa
Slide 35: Propel Funeral Partners
PROPEL FUNERAL PARTNERS PrP
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