Viva Energy Group Ltd. · ASX:VEA
Viva Energy — FY2021 Earnings Presentation
37 slides from Viva Energy's earnings presentation, Feb 21, 2022
Slide 1: Financial results Full year ended 31 December 2021
Financial results Full year ended 31 December 2021 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 achievements expressed or implied by these forward-looking Limited, ACN 626 661 032 (“Company” or “Viva Energy”). the fairness, accuracy, completenes
Slide 3: Contents
Contents 4 10 18 25 26 GROUP FINANCIAL RECONCILIATION OF HIGHLIGHTS PERFORMANCE OUTLOOK APPENDIX FINANCIAL -------------------- -------------------- -------------------- ACCOUNTS SCOTT WYATT JEVAN BOUZO SCOTT WYATT CEO COFO CEO Viva Energy Group Limited – FY2021 Results Presentation 3
Slide 4: Group highlights
Group highlights Scott Wyatt Viva Energy Group Limited – FY2021 Results Presentation 4
Slide 5: FY2021 highlights
FY2021 highlights1 Significant growth across all business units, with strong progress on strategic priorities Retail market share Commercial earnings Refining margin growth growth recovery • 8% increase in Retail fuel sales volumes2 • 7% increase in non-aviation sales volume • Return to profitabilit
Slide 6: Safety performance
Safety performance Maintained strong safety performance and focus on people throughout the pandemic Total Recordable Loss of primary Process safety events1 Injury Frequency Rate2 containment (>100KG) 4 4 6.7 5.8 29 29 3 4.6 2 3.6 19 19 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 • Ge
Slide 7: Retail Fuels and Marketing
Retail Fuels and Marketing Fuel demand recovering with Viva Energy increasing share Retail fuel volumes (ML) 1 4,210 National market share by fuel type2,3: 3,757 3,706 3,689 1,756 VEA mkt share VEA growth Market growth 1,334 1,347 1,473 795 766 740 771 Premium Petrol: 18%, +1% 5% 0.3% 1,628 1,593 1,
Slide 8: Refining
Refining Material uplift in refining margins and production Refining margin cracks1, GRM2, Crude Premia3 (US$/bbl) Refining production (%) FY2018 FY2019 FY2020 FY2021 18.0 10% 14% 17% Other 25% 16% 12% 3% 13.0 4% Jet Diesel 36% 39% 43% 40% 8.0 Gasoline 38% 36% 32% 36% 3.0 Intake (MBBLs) 40.1 42.0 34
Slide 9: Strategic Priorities
Strategic Priorities Material progress on post-pandemic growth strategy Fuel Security Package Geelong Energy Hub Strategic Objectives • Underpins future Refining earnings until • Completed Front End Engineering Design • Develop and maximise value of our three mid-2028 with option to 2030 and progres
Slide 10: Financial highlights
Financial highlights Jevan Bouzo Viva Energy Group Limited – FY2021 Results Presentation 10
Slide 11: Financial Performance
Financial Performance Strong group wide performance delivering a $240M uplift to EBITDA (RC) FY2021 FY2020 All financials in $m Retail, Fuels Financial highlights Refining Group Group Change unless noted & Marketing • FY2021 EBITDA (RC) increased 98% to EBITDA (RC) $484.2M Retail 187.5 - 187.5 235.4
Slide 12: Reporting Segmentation
Reporting Segmentation Updated segmentation shows true underlying cash performance FY2021 Key segmentation changes to reporting Old reporting All financials in $m Old 1. Lease with lease 2. SCO 3. Reclass New 1. Lease costs: Now captured within relevant segment unless noted reporting costs impacts a
Slide 13: Year on Year Growth
Year on Year Growth Improved Refining and Commercial performance offset Retail margin compression FY2021 Group EBITDA (RC) waterfall (A$M)1 Refining Corp. 30.1 (26.1) 53.0 (4.7) (23.4) (18.4) (6.2) (12.5) 239.3 Commercial Retail 13.7 (49.2) 5.9 29.6 (5.5) 484.2 32.7 (11.9) (6.1) 244.6 FY2020 Volumes
Slide 14: Cashflow
Cashflow Strong free cash generation supported by all parts of the business Net cash flow (A$M) Underlying free cash flow (RC) (A$M) 126.6 178.2 (126.6) (178.2) 15.8 387.7 183.3 (37.3) 261.1 209.5 (137.7) 47.7 Change in Add back Add back Add back FCF before Subtract Underlying Add back Underlying ca
Slide 15: Capital Expenditure
Capital Expenditure Higher capex spend reflecting recovery and investment in new growth opportunities Capital Expenditure ($M) • Base capital expenditure increase driven by deferred spend from prior years and investment in anticipated growth opportunities. 309 • Energy Hub Projects include anticipat
Slide 16: Dividends
Dividends Determined a final dividend of 3.2cps, supported by strong Refinery performance in Q4 Interim Final FY2021 FY2021 HY2021 • As a result of the strong Retail, Fuels & Marketing Retail, Retail, NPAT (RC) of $65.2M, a dividend of 2.5cps was Fuels & Fuels & Refining2 Combined Group determined f
Slide 17: Balance Sheet
Balance Sheet Disciplined approach to deploying cash and managing balance sheet capacity Change in Net Debt (A$m) Capital management framework • Returned $183M to shareholders in FY2021 through: • $66M dividends paid (payout ratio 60%) 126.6 (178.2) • $100M capital return • $18M of the announced $40
Slide 18: Outlook and priorities for 2022
Outlook and priorities for 2022 Scott Wyatt Viva Energy Group Limited – FY2021 Results Presentation 18
Slide 19: Group Strategy
Group Strategy Continued progress on our transition and growth strategy Strategic approach: 1 2 3 Balance sheet to support >$50M of new attractive Outperform in our core Leverage diversity to develop new Acquire capability to accelerate earnings streams business growth pathways proven opportunities
Slide 20: Energy Security and Transition
Energy Security and Transition Viva Energy has a key role to play in supporting the energy transition • Fuel supply to 25% of Australia, and over 50% of Victoria demand Economic • Geelong Refinery an asset of national significance and security Energy Security Security • Strategic position to support
Slide 21: Victorian Gas Terminal Project
Victorian Gas Terminal Project Material progress towards final investment decision expected in 3Q 2022 • Southern states are forecast to have a shortfall of gas from 20231 • Victoria is the largest domestic gas consumer in Australia, representing 37% of gas consumed in East Coast Market2 • Geelong p
Slide 22: Minimum Stockholding Obligations (MSO)
Minimum Stockholding Obligations (MSO) Viva Energy is well placed to meet anticipated MSO obligations • Federal Government has announced plans to introduce a Minimum Stock Obligation for Petrol, Jet and Diesel stocks held in Australia. Required stock holdings for Diesel expected to increase by 40% i
Slide 23: Strategic Priorities
Strategic Priorities FY2022 will see a significant milestones reach on key growth initiatives 1. Develop Energy Hub at Geelong 2. Grow non-fuel earnings 3. Develop projects to achieve lower emissions, new energies and lower carbon agenda Reach FID on Gas Progress ULSG and Reach FID on Grow Carbon an
Slide 24: Outlook
Outlook Global uncertainty and volatility mitigated by strong defensive cash generative businesses Macro themes Potential near-term impacts / mitigants Post pandemic recovery and growth • Potential new travel and border restrictions impacting fuel • Improving retail sales, and continued network dema
Slide 25: Appendix
Appendix Viva Energy Group Limited – Presentation Title 25
Slide 26: Reconciliation of financial accounts
Reconciliation of financial accounts Viva Energy Group Limited – FY2021 Results Presentation 26
Slide 27: Reporting changes
Reporting changes Simplified reporting and better alignment of segment profitability with cashflow Segment level changes To provide improved transparency of underlying performance, The Group has revised the way segment results are reported. These changes include the recording of lease expense within
Slide 28: Explanation of adjustments
Explanation of adjustments Adjustments to segments Group level reporting changes 1. Lease adjustments 1. NPAT (RC) will be reported for each operating segment separately, with the new a. Lease costs previously excluded from EBITDA (RC) under AASB16 are now Corporate segment allocated evenly across b
Slide 29: FY2020 segment and group level changes
FY2020 segment and group level changes1 1 2 3 4 Old reported Lease Wholesale re- FX & New reported Retail, Fuels & segments adjustments SCO allocation classification derivatives segments Marketing g Refining g Retail 670.8 (244.0) a (143.6) d (47.8) e - 235.4 235.4 - Commercial 238.3 (5.2) a (124.5)
Slide 30: FY2021 segment and group level changes
FY2021 segment and group level changes1 1 2 3 4 Old reported Lease Wholesale re- FX & New reported Retail, Fuels & segments adjustments SCO allocation classification derivatives segments Marketing g Refining g Retail 659.9 (264.9) a (157.1) d (50.4) e - 187.5 187.5 - Commercial 241.7 (5.8) a (69.0)
Slide 31: Proforma financials
Proforma financials Old reporting New reporting Old reporting New reporting Group EBITDA (RC) A$M A$M Refinery EBITDA (RC) A$M A$M 2018 774.6 531.5 2018 124.5 99.0 2019 644.6 392.9 2019 117.0 79.0 2020 519.5 244.6 2020 (95.1) (127.9) 2021 784.4 484.2 2021 143.5 103.4 Retail, Fuels & Marketing: Old r
Slide 32: Additional information
Additional information Viva Energy Group Limited – FY2021 Results Presentation 32
Slide 33: Capital management framework
Capital management framework Viva Energy will maintain a disciplined approach to capital management Underlying capital expenditure Invest in existing businesses to mainting current earnings - Underlying earnings maintenance capital. Distributions to shareholders Target payout ratio of 50% to 70% NPA
Slide 34: Fuel Security Services Payment (FSSP)
Fuel Security Services Payment (FSSP) Protects earnings during periods of low refining margins providing for more certain and reliable cashflow Historical actual Geelong Refining Margin (GRM) No FSSP received FSSP is payable and FSSP Margin Marker (A$/bbl) when regional when the Margin refining
Slide 35: Refinery – margin analysis and key drivers
Refinery – margin analysis and key drivers Metric FY18 FY19 FY20 FY21 A: A$/US$ FX 0.75 0.69 0.69 0.75 B: Crude and feedstock intake mbbls 40.1 42.0 34.8 41.2 C: Geelong Refining Margin US$/bbl 7.4 6.6 3.1 7.1 D: Geelong Refining Margin = C / A A$/bbl 9.9 9.5 4.4 9.4 E: Geelong Refining Margin = B x
Slide 36: 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 37: Viva Energy
VIVA EnergyAustralia