Superior Plus Corp · TSX:SPB
Superior Plus — Investor Presentation (October 2021)
28 slides from Superior Plus's investor presentation, Oct 27, 2021
Slide 1: October Investor Update
October Investor Update October 27, 2021
Slide 2: Forward Looking Information
Forward Looking Information This written and accompanying oral presentation contains certain forward-looking information within the meaning of applicable Canadian securities laws which is provided for the purpose of presenting information about management’s current expectations and plans. Readers ar
Slide 3: Superior Plus Business Overview
Superior Plus Business Overview Superior is an industry-leading North American retail propane distribution company #1 5th largest propane distributor in Canada retail propane distributor with ~38% market share1 in the U.S. and growing1 3.2 billion litres ~800,000customers ~4,100 employees See End no
Slide 4: Superior Plus Financial Overview
Superior Plus Financial Overview EBITDA by Segment1 Market Capitalization2 $2.5 billion Enterprise value2 $4.2 billion Dividend – Annualized/Yield2 $0.72 per share / 5.1% 45% 55% Net Debt to Adjusted EBITDA3 3.3x Adjusted EBITDA4,5 $398.1 million Adjusted EBITDA Pro Forma Acquisitions U.S. Propane C
Slide 5: Executed Transition to a Pure-Play Energy Distributor
Executed Transition to a Pure-Play Energy Distributor Superior has completed a comprehensive 5-year transformation into a pure-play energy distributor with a major U.S. platform for continued growth 2016 2017 2018 2019 2020 2021 Divestiture of Canwest NGL acquisition Integration of Integration of Di
Slide 6: Benefits of Pure-Play Energy Distribution Platform
Benefits of Pure-Play Energy Distribution Platform • Rebalanced business around highest EBITDA Growth Since 20161 growth segment • Consistent, stable free cash flow $410 $402 $417 generation with ~83% FCF conversion2 • Reduced cyclicality and exposure to oil $265 and gas end markets $180 $167 (milli
Slide 7: Propane Industry is Attractive
Propane Industry is Attractive The North American propane market is attractive Pricing Model Protects Downside Cost plus pricing model provides for due to customer characteristics, sustainable free consistent, reliable cash flow cash flow and significant opportunities for growth High Switching Costs
Slide 8: Superior Way Forward
Superior Way Forward Strategic plan to accelerate growth and maximize shareholder returns 1 2 3 Pursue robust pipeline of Apply operating best Employ disciplined capital accretive acquisitions practices organization-wide allocation to drive to further enhance shareholder return profitability and inn
Slide 9: Targeting $700–$750 Million of EBITDA by 2026
Targeting $700–$750 Million of EBITDA by 2026 Superior is targeting $700 to EBITDA from Operations1 — Projected Growth $750 million of EBITDA from ($millions) Operations1, representing a $700–$750 10% to 11% CAGR through 2026 Acquisition spending of $1.9 billion Driving operating expense-to-gross $4
Slide 10: Keys to Achieving Superior Way Forward
Keys to Achieving Superior Way Forward Vision Values Culture To become the leader in creating Innovation, winning with people, Entrepreneurship, continuous value through differentiation and customer focus, performance improvement, execution, safety best-in-class operations in the and safety, environ
Slide 11: Demonstrated Ability to Acquire & Integrate
Demonstrated Ability to Acquire & Integrate Strong track record NGL Energy Partners LP demonstrates ability to acquire annually at scale US CANADA YEAR 2017 2018 2019 2020 2021 # Acquisitions 4 6 5 5 6 $ TEV ($m) ~$525 ~$1,275 $~70 ~$288 ~$600 Slower acquisition pace given focus on integrating NGL 1
Slide 12: Exceeding Synergy Targets on Major Acquisitions
Exceeding Synergy Targets on Major Acquisitions Superior has Canwest Synergies Achieved 1 NGL Synergies Achieved 1 outperformed its initial Targeted Achieved Targeted Achieved synergy targets for both Run rate synergies achieved 27 months post close2 Run rate synergies achieved ~14 months post close
Slide 13: Deployed $725 Million in Capital Across 17 Transactions
Deployed $725 Million in Capital Across 17 Transactions, Targeting Post-Synergy Average Multiple Improvement of ~2.0x Summary of USPD Acquisitions (excl. NGL)1 Acquisitions Completed 17 Capital Deployed ~$725 million Acquired EBITDA2 ~$82 million Synergized EBITDA2 ~$115 million Acquired EV/EBITDA ~
Slide 14: Synergies Largely Achieved Through Controllable Cost Outs
Synergies Largely Achieved Through Controllable Cost Outs Marketing Sales Approach Distribution Management Workforce Planning Centralized Cost Structure Supply Chain Efficiencies • Implement strategic • Increase delivered • Improve CSR • Minimize SG&A • Consolidate demand pricing using in-depth volu
Slide 15: Recent Financial Results
Recent Financial Results • Decrease driven by lower EBITDA from Second Quarter 2021 Results1 Operations due primarily to warmer weather (millions) and lower unit margins as a result of short- term margin opportunities that existed in the $39.1 prior year quarter with low commodity prices $31.6 • To
Slide 16: Historical Results and 2021 Guidance
Historical Results and 2021 Guidance COVID-19 impact Historical Adjusted EBITDA ($m)1,2 $390 – $420 2021 Guidance $373 $379 Adjusted EBITDA1 $237 $390m – $420m $159 $118 2016 2017 2018 2019 2020 2021 Guidance See End notes for further information 16 16
Slide 17: Capital Expenditures and Free Cash Flow Conversion Profile
Capital Expenditures and Free Cash Flow Conversion Profile Superior generates robust FCF conversion of 83%, with annual maintenance capex needs of ~$40m-$50m Historical Free Cash Flow Conversion Profile1 Capital Expenditures1 ($m) 84% 83% 80%-85% 72% 73% $30M reduction $120-$140 in response to $118.
Slide 18: Strong Balance Sheet Provides Efficient Financing for Growth
Strong Balance Sheet Provides Efficient Financing for Growth $750 million revolver Current leverage: 3.3x2 Weighted average pre-tax with $706 million currently undrawn1 (Long-term leverage target of 3.0x – 3.5x) cost of debt 4.4%3 $750m Debt Maturity Profile No Near-Term Maturities $706m of undrawn
Slide 19: Our Sustainability Journey
Our Sustainability Journey Superior recently issued its inaugural Sustainability Report • Committed to keeping our employees safe, supporting the communities where we operate and minimizing our impact on the environment Superior is committed to building genuine relationships with customers, communit
Slide 20: Committed to Social Responsibility
Committed to Social Responsibility Creating long term shareholder value in a socially responsible and sustainable manner Reducing impacts on the environment Helping employees thrive Creating a strong safety culture Giving back to communities • Climate change is one of the largest • Providing flexibi
Slide 21: Investment Highlights
Investment Highlights 1 2 3 4 5 6 Market Strong Free Growth Proven Dynamic Capital Compelling Leader Cash Flow Runway Track Record Allocation Dividend Yield Leading propane Stable and consistent Substantial white- Proven track record Disciplined and Current yield distributor in the FCF generation sp
Slide 22: Appendix
Superior Plus
Slide 23: Total Volumes and Gross Profit
Total Volumes and Gross Profit • Residential and commercial customers represent Energy Distribution Volume 94% of total gross profit and Gross Profit by Segment1 – Residential volumes are typically more correlated to weather, so there is less of an impact from economic slowdowns 27% – Commercial vol
Slide 24: Canadian Propane Distribution
Canadian Propane Distribution • Canadian propane distribution includes Superior Propane, Superior Gas Volume and Gross Profit by Segment1 Liquids and United Pacific Energy (“UPE”) – Superior Propane is the leading propane distributor in Canada with a 9% 27% diversified customer base and coast-to-coa
Slide 25: U.S. Propane Distribution
U.S. Propane Distribution • U.S. propane distribution includes Superior’s retail energy distribution business in the Eastern U.S., upper Midwest and California Volume and Gross Profit by Segment1 • U.S. propane distribution customer mix is less diversified than Canada and gross profit is driven prim
Slide 26: End Notes
End Notes Slide 3 Slide 12 Slide 17 (1) Canadian Source Data: Conference Board of Canada Report Dec 2018 – (1) Rounded to nearest million. Canwest Synergies were $20 million targeted (1) Free Cash Flow Conversion is calculated as Adjusted EBITDA less Fueled Up. US Data ICF 2018 Retail Sales Report p
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures Throughout the presentation, Superior has used the following terms that are not defined by International Financial Reporting Standards (“GAAP”), but are used by management to evaluate the performance of Superior and its businesses. Since non-GAAP financial measures do not
Slide 28: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) Capital Expenditures Efficiency, process improvement and growth-related expenditures will include expenditures such as acquisition of new customer equipment to facilitate growth, system upgrades and initiatives to facilitate improvements in customer service. M