Propel Funeral Partners Ltd. · ASX:PFP
Propel Funeral Partners — Shareholder Meeting (November 2022)
49 slides from Propel Funeral Partners's shareholder meeting presentation, Nov 25, 2022
Slide 1: 2022 Annual General Meeting ASX Announcement
ASX ANNOUNCEMENT ASX ANNOUNCEMENT 25 November 2022 2022 Annual General Meeting Attached are the addresses and accompanying presentation to be delivered by the Chairman and Managing Director of Propel Funeral Partners Limited (Company) at the Company’s 2022 Annual General Meeting (AGM) commencing tod
Slide 2: 2022 Annual General Meeting
INVESTOR PRESENTATION 2022 | PROPEL FUNERAL PARTNERS 2022 Annual General Meeting 25 November 2022 1
Slide 3: The Chairman's introduction
1. The Chairman’s introduction 2
Slide 4: Brian Scullin, Independent Chairman & Non-Executive Director
BRIAN SCULLIN “Propel is focussed on a clearly defined growth strategy to acquire social infrastructure and assets Independent Chairman & which operate within the death care industry in Australia and New Zealand.” Non-Executive Director Eagers Funerals – New Plymouth, New Zealand 3
Slide 5: Your board
Your board Focused on delivering for stakeholders Brian Scullin Jennifer Lang Independent Chairman and Non-Executive Director (NED) Independent NED and Chair of the Audit & Risk Committee – Chair of Macquarie Point Development Corporation – NED, Chair of the Audit Committee and a member of the Risk
Slide 6: Agenda
Agenda 1. The Chairman’s introduction 2. Presentation from the Managing Director 3. Formal business and resolutions 4. Shareholder questions 5. 5
Slide 7: Proxies received prior to the cut-off time
Proxies received prior to the cut-off time A total of 150 valid proxy forms were received, and respective shareholdings were accumulated and are summarised below: Resolution For Open Against Abstain 2 37,095,844 1,469,786 254,375 2,213,447 3 59,261,573 1,480,674 16,453 34,832 4 59,281,418 1,480,674
Slide 8: The Chairman's introduction
The Chairman’s introduction 1. Continued growth and resilience in FY22 2. Dividends: • 12.25 cents per share fully franked in connection with FY22 • 51.9 cents per share fully franked since IPO 3. Completion of Management Internalisation: • overwhelming shareholder support • positive market response
Slide 9: Presentation from the Managing Director
2. Presentation from the Managing Director 8
Slide 10: Albin Kurti, Managing Director
ALBIN KURTI “FY22 was another record year for Propel, which continued its track record of delivering revenue and Managing Director earnings growth despite COVID-19 impacts.” Berry Funeral Directors - Adelaide, South Australia 9
Slide 11: Key Highlights
Key Highlights Revenue Funeral Volumes Average Revenue Per Funeral 1 TRADING1 $145.2m 16,537 $6,038 20.6% 18.8% 2.0% (up 4.9% on the pre-COVID period2) Pro forma3 Operating EBITDA Pro forma3 Operating NPAT Cash Flow Conversion 2 EARNINGS1 $39.0m $16.9m 100.2% 25.2% 45.0% 160bps Dividend Gearing Rati
Slide 12: COVID-19 Impacts
COVID-19 Impacts Average Revenue Per Funeral and comparable funeral volume growth accelerated in 2H FY22 1 Average Revenue Per Funeral 2 Funeral Volumes $6,038 Comparable Average Revenue Per Funeral Comparable Funeral Volumes $5,756 $5,917 $5,421 (growth on the PCP) (growth on the PCP) ▲10.1% 8.9% i
Slide 13: Geographic Presence
Geographic Presence 149 operating locations (82 owned / 67 leased), including 34 cremation facilities and 9 cemeteries 1 August 2013 2 November 2022 Queensland Queensland 1 Western 29 Australia South Australia 14 34 New South Wales 5 1 ACT 19 Victoria 29 New Zealand Tasmania 18 Geographic footprint
Slide 14: Brand Portfolio
Brand Portfolio Diversified single and multi-site brands with strong local community awareness Australia NZ Pinegrove Funerals ismore Funeral Services Acquisitions completed during and since FY22 13
Slide 15: Volume and Revenue Growth
Volume and Revenue Growth Propel has maintained a strong growth trajectory despite COVID-19 impacts 1 Funeral volumes 2 Revenue ($m) 16,537 18.8% 145.2 20.6% 13,916 13,299 120.4 110.8 11,304 95.1 10,111 80.9 6,054 46.1 2,967 22.4 1,625 906 10.9 465 6.0 278 1.2 2.2 FY12 FY13 FY14 FY15 FY16 FY17 FY18
Slide 16: Earnings Growth
Earnings Growth Propel has maintained a strong growth trajectory despite COVID-19 impacts 1 Operating EBITDA ($m) 2 Operating NPAT ($m) 39.6 25.2% (Pro forma) 17.4 36.3 45.0% 39.0 (Pro forma) 32.4 15.3 16.9 14.2 13.3 31.1 12.3 23.8 21.5 11.6 12.3 5.5 5.8 2.9 3.1 1.5 FY15 FY16 FY17 FY18 FY19 FY20 FY2
Slide 17: Average Revenue Per Funeral Growth
Average Revenue Per Funeral Growth Compound annual growth rate (CAGR) of ~2.6% since FY14 CAGR ~2.6% $6,038 2.0% on FY21 $5,917 $5,672 Growth of: $5,508 $5,585 • 4.9% on the pre-COVID period1 $5,223 • 4.3% in 2H FY222 $5,099 $4,899 $4,976 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 1 1 July 2019 to
Slide 18: Cash Flow Conversion
Cash Flow Conversion Consistently strong and has averaged ~99% since FY15 104.0% 103.4% 101.8% 98.9% 100.2% ~99% average 96.5% 97.4% 93.7% (since FY15) FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 17
Slide 19: 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 NZ • Death volumes in Australia grew by 0.9% pa between 1990 and 20201 • Death volumes in New Zealand grew by 0.7% pa between 1990 and 20212 • Death volumes are expected to
Slide 20: 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 CY212 InvoCare InvoCare Others ~24.6% ~21.7% Others ~74.2% ~71.3% ~1.2% ~7.0% 1 Note: 159,052 actual deaths (ABS data) for market size, 1,920 funerals performe
Slide 21: Acquisitions
Acquisitions Propel has committed $155.5 million1 on acquisitions since its IPO 1 During FY22, Propel committed $21.02 million on acquisitions in SA, VIC, WA and NZ including: the companies that own Berry Funeral Directors (including the funeral property), which provides funeral directing services i
Slide 22: Funding Capacity – as at 30 September 2022
Funding Capacity – as at 30 September 2022 Funding Capacity Propel has available funding capacity of $140.6 million1 to support growth initiatives, including acquisitions Funding Capacity $ million Debt facility limit at 30 September 2022 200.0 Net Debt as at 30 September 20221 (42.0) Commitments: A
Slide 23: Outlook
Outlook Demand for essential funeral services is underpinned by favourable demographics 1 Propel has started FY23 with positive trading momentum. Below is a summary of the Company’s Q1 FY23 trading performance 1: • Revenue ~$44m ~33% • Operating EBITDA ~$13m ~40% • Operating EBITDA margin ~30% ~200b
Slide 24: Formal business and resolutions
3. Formal business and resolutions 23
Slide 25: Formal business: Item 1
Formal business: Item 1 Item 1: Financial report, directors’ report and auditors’ report “To receive and consider the Company’s financial report, director’s report and auditor’s report for the year ended 30 June 2022.” Note: there is no requirement for shareholders to approve these reports 24
Slide 26: Formal business: Item 2
Formal business: Item 2 Item 2: Remuneration report “That the remuneration report that forms part of the directors’ report of the Company for the financial year ended 30 June 2022 be adopted.” Note: this resolution is advisory only and does not bind the directors of the Company. 25
Slide 27: Formal business: Item 3
Formal business: Item 3 Item 3: Re-election of existing Director “That Ms Naomi Edwards, being a director of the Company who retires by rotation under rule 6.7(b) of the Company’s constitution, and being eligible, is re-elected as a director of the Company.” 26
Slide 28: Formal business: Item 4
Formal business: Item 4 Item 4: Election of existing Director “That Ms Jennifer Lang, who was appointed as a director of the Company on 6 May 2022, and who retires at the annual general meeting under rule 6.2(b) of the Company’s constitution, and being eligible, is elected as a director of the Compa
Slide 29: Formal business: Item 5
Formal business: Item 5 Item 5: Election of existing Director “That Mr Peter Dowding, who was appointed as a director of the Company on 6 May 2022, and who retires at the annual general meeting under rule 6.2(b) of the Company’s constitution, and being eligible, is elected as a director of the Compa
Slide 30: Formal business: Item 6
Formal business: Item 6 Item 6: Resolution relating to the ratification of the issuance of ordinary shares (Community Funerals acquisition) “That, conditional upon completion of the relevant transaction between the date of this notice of meeting and the Company’s 2022 AGM, and for the purposes of Li
Slide 31: Formal business: Item 7
Formal business: Item 7 Item 7: Resolution relating to the proposed issue of ordinary shares (Eagars Funerals acquisition) “That, for the purposes of Listing Rule 7.1 and for all other purposes, approval is given to issue a total of 57,654 fully paid ordinary shares in the capital of the Company to
Slide 32: Formal business: Item 8
Formal business: Item 8 Item 8: Resolution to amend the Company’s constitution to comply with the CHESS Replacement System “That, in accordance with section 136(2) of the Corporations Act 2001 (Cth), the Company’s constitution be modified by making the amendments described in the Explanatory Memoran
Slide 33: Shareholder questions
4. Shareholder questions 32
Slide 34: Votes to be counted
Votes to be counted 33
Slide 35: Meeting close – thank you
Meeting close – thank you 34
Slide 36: Definitions
Definitions Average Revenue Per Funeral means revenue from funeral operations, excluding direct disbursements (such as third party cemetery fees and third party cremation fees) and delivered pre-paid impacts, divided by the number of funerals in the relevant period. Bps means basis points. Cash Flow
Slide 37: 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. com
Slide 38: Slide 38
Slide 39: Chairman's and Managing Director's Addresses
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses PROPEL FUNERAL PARTNERS LIMITED Friday, 25 November 2022 (9.30am) 2022 Annual General Meeting Address from the Chairman, Brian Scullin: Slide 3 Good morning everyone. I’m Brian Scullin, Independent Chairman and Non-Execut
Slide 40: Chairman's and Managing Director's Addresses
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses As set out in the Notice of Meeting, in terms of the formal matters of the Meeting, all resolutions will be decided on a poll. In order to provide everyone with an opportunity to vote and in case anyone cannot stay for th
Slide 41: Chairman's and Managing Director's Addresses
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses As shareholders would be aware, on 26 July 2021 the Company announced that, following receipt of overwhelming shareholder approval, it had completed the management internalisation. The management internalisation has align
Slide 42: Chairman's and Managing Director's Addresses
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses a member of the Board and its sub-committees. Jennifer is a former Partner of KPMG and Deloitte and is an experienced Non-Executive Director with a wealth of experience across governance, risk assessment, financial and op
Slide 43: Chairman's and Managing Director's Addresses
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Address from the Managing Director, Albin Kurti: Slide 8 Thanks Brian. Good morning everyone, thank you for being here. First and foremost, I’d like to thank our dedicated staff in Australia and New Zealand for their hard
Slide 44: Chairman's and Managing Director's Addresses
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses From a capital management perspective: – as Brian mentioned, total dividends for the year were 12.25 cents per share, up half a cent per share on the prior year; – Propel ended FY22 with a Gearing Ratio of circa 14%, havi
Slide 45: Chairman's and Managing Director's Addresses
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses As can be seen from the middle chart on this slide, during the first half of FY22, Average Revenue Per Funeral was impacted by extended lock downs and strict funeral attendee limits in parts of Australia and New Zealand.
Slide 46: Chairman's and Managing Director's Addresses
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses The orange dotted lines show the brands relating to acquisitions completed during and since FY22. These brands are an important part of the goodwill of each business. Slide 14 As you can see on the left of this slide, the
Slide 47: Chairman's and Managing Director's Addresses
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Slide 18 These charts show that the number of deaths in Australia and New Zealand is forecast to both increase and accelerate, according to the Australian Bureau of Statistics and Stats NZ. I won’t go through the specific
Slide 48: Chairman's and Managing Director's Addresses
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Slide 21 As you would expect, the Board regularly discusses capital management and the Company’s funding needs, particularly in light of its acquisition pipeline and the fact that, Propel has committed approximately $156
Slide 49: Chairman's and Managing Director's Addresses
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses However, it should be noted that: • death volumes fluctuate over short time horizons; • higher inflation is expected to impact funeral related pricing and costs; and • ongoing impacts from COVID-19, particularly on death
Propel Funeral Partners — Shareholder Meeting (November 2022) on 6ix