Propel Funeral Partners Ltd. · ASX:PFP
Propel Funeral Partners — Shareholder Meeting (November 2020)
47 slides from Propel Funeral Partners's shareholder meeting presentation, Nov 19, 2020
Slide 1: 2020 Annual General Meeting ASX Announcement
ASX ANNOUNCEMENT 19 November 2020 2020 Annual General Meeting Attached are the addresses and accompanying presentation to be delivered by the Chairman and Managing Director at the 2020 Annual General Meeting of Propel Funeral Partners Limited (AGM) commencing today at 9.30am (Sydney time). Please no
Slide 2: Chairman's and Managing Director's Addresses
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses PROPEL FUNERAL PARTNERS LIMITED Thursday, 19 November 2020 (9.30am) 2020 Annual General Meeting Address from the Chairman, Brian Scullin: Slide 3 Good morning everyone. I’m Brian Scullin, Independent Chairman and Non-Exec
Slide 3: Chairman's Address: Meeting Procedures and Voting
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Also online are: • Lilli Gladstone, Propel’s Head of Finance; • our audit partner from Nexia, Lester Wills, who is here to address any questions you may have of him; and • representatives from Link. Slide 5 After my intro
Slide 4: Chairman's Address: FY20 Performance and Management
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses resilience, and I commend the management team for their leadership, particularly during the initial lockdown period, a time of significant disruption and uncertainty. We have endeavoured to keep you, our shareholders, app
Slide 5: Chairman's Address: Funding, Manager and Performance Fee
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses funded, so that Propel can continue to capitalise on growth opportunities, when they materialise. As shareholders are aware, the Company was founded and is managed by Propel Investments Pty Limited (which I will refer to
Slide 6: Managing Director's Address: COVID-19 Impact
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, thanks for joining. As I’m sure shareholders would agree, the emergence of COVID-19 has been the defining event of 2020 and has
Slide 7: Operating EBITDA and NPAT Growth
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Operating EBITDA grew 36.4% to $32.4 million and Operating NPAT was up 6.5% to $14.2 million, including the impacts of the new accounting standard for Leases, AASB 16, which the Company adopted on 1 July 2019. It’s import
Slide 8: Brands, Funerals and Revenue
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Slide 12 This slide shows Propel’s main operating brands in Australia and in New Zealand. Each brand has a distinct identity and is well known in their respective markets. Some have been around for many decades. For examp
Slide 9: Industry Trends, Acquisitions, Capital Management
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses I’ll now touch on Industry Trends, Acquisitions, Capital Management, COVID-19 impacts and responses. Slide 17 These charts show that the number of deaths in Australia and New Zealand is forecast to both increase and accel
Slide 10: Funding Capacity and COVID-19 Impacts
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses As you can see from this slide, Propel’s current funding capacity is approximately $70 million. Moving to COVID-19 impacts and responses. Slide 21 In late March 2020, the Australian and New Zealand funeral industries conf
Slide 11: COVID-19 Responses
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Slide 22 This slide sets out some of our responses to COVID-19 and how we, our staff and our client families have had to adapt. Our focus has been on people safety, essential service continuity and financial resilience. I
Slide 12: Q1 FY21 Trading and Outlook
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Encouragingly, the financial resilience demonstrated by Propel in the final quarter of FY20 has continued into the start of FY21. In the first quarter of FY21: – Operating EBITDA was $10.5 million, up circa 18% on the PCP
Slide 13: Thanks and Close of Address
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Before I hand back to Brian, I’d like to quickly thank: • my fellow board members for their guidance during the year; • my colleagues Lilli Gladstone, Fraser Henderson and the small team at Propel’s head office for their
Slide 14: 2020 Annual General Meeting
2020 Annual General Meeting 19 November 2020
Slide 15: 1. Chairman's introduction
1. Chairman’s introduction
Slide 16: Propel is focussed on a clearly defined investment strategy
BRIAN SCULLIN “Propel is focussed on a clearly defined investment strategy to Independent Chairman & acquire social infrastructure and Non-Executive Director assets which operate within the death care industry in Australia and New Zealand.” Dils Funeral Services – Auckland, New Zealand 3
Slide 17: Your Board
Your Board Focussed on delivering for stakeholders Brian Scullin Fraser Henderson Independent Chairman and Non-Executive Director (NED) Executive Director – Head of M&A and – Chair of Tasmanian Development Board, Macquarie Point General Counsel/Company Secretary Development Corporation and OAK Possa
Slide 18: Items of business
Items of business 1. The Chairman’s introduction 2. Presentation from the Managing Director 3. Formal business resolutions 4. Shareholder questions 5
Slide 19: Proxies received prior to the cut off time
Proxies received prior to the cut off time A total of 225 valid proxy forms were received, and respective shareholdings were accumulated and are summarised below: Resolution For Open Against Abstain 2 40,041,926 1,448,079 1,352,684 47,144 3 20,302,701 1,439,789 304,633 45,486 4 41,318,400 1,458,646
Slide 20: The Chairman's introduction
The Chairman’s introduction 1. Growth and resilience in FY20 2. Dividends: • 10.0 cents per share fully franked in connection with FY20 • 27.9 cents per share fully franked since IPO 3. Clearly defined strategy underpinned by: • the growing and ageing population • industry fragmentation 4. Funding 5
Slide 21: 2. Presentation from the Managing Director
2. Presentation from the Managing Director
Slide 22: FY20 was another record year for Propel
ALBIN KURTI “FY20 was another record year for Propel, which continued Managing Director & its track record of delivering Head of Investments revenue and earnings growth despite COVID-19 impacts.” Gregson & Weight Funeral Directors – Sunshine Coast, Queensland 9
Slide 23: Key highlights for FY20
Key highlights for FY20 1 Revenue: Volumes: Average Revenue Per Funeral: TRADING1 $110.8 13,299 $5,672 million funerals 16.5% 17.6% 1.6% YoY / 2.1% comparable 2 Operating EBITDA: Operating NPAT: Cash Flow Conversion: EARNINGS1 $32.4 $14.2 103.4% million million 36.4% (up 19.7% ex AASB 16) 6.5% (up 8
Slide 24: Geographic presence
Geographic presence 136 locations (77 owned / 59 leased), including 31 cremation facilities and 9 cemeteries1 August 2013 August 2020 Queensland 1 Geographic footprint is difficult to replicate, with funeral homes dating back to the late 1800s and early 1900s 1 As at 18 November 2020 11
Slide 25: Brand portfolio
Brand portfolio Diversified single and multi-site brands with strong local community awareness Australia New Zealand Pinegrove Funerals ismore Funeral Services Acquired during and since FY20 12
Slide 26: Volume and revenue growth
Volume and revenue growth Propel has maintained a strong growth trajectory Funeral volumes Revenue ($m) 13,299 110.8 17.6% 11,304 95.1 16.5% 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 FY19 FY20 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
Slide 27: Earnings growth
Earnings growth Propel has maintained a strong growth trajectory Operating EBITDA ($m) Operating NPAT ($m) 32.4 14.2 36.4% 13.3 6.5% (up 19.7% 12.3 (up 8.4% ex AASB 16) ex AASB 16) 23.8 21.5 12.3 5.5 5.8 2.9 3.1 1.5 FY15 FY16 FY17 FY18 FY19 FY20 FY15 FY16 FY17 FY18 FY19 FY20 14
Slide 28: Average Revenue Per Funeral growth
Average Revenue Per Funeral growth Compound annual growth rate (CAGR) of ~2.5% since FY14 CAGR ~2.5% $5,672 $5,585 1.6% on FY19 $5,508 (comparable up 2.1% on FY19) $5,223 $5,099 $4,976 $4,899 FY14 FY15 FY16 FY17 FY18 FY19 FY20 15
Slide 29: Cash Flow Conversion
Cash Flow Conversion Cash Flow Conversion has been consistently strong, averaging ~99% since FY15 120% 50.0 104.0% 103.4% 98.9% 97.4% 40.0 90% 93.7% 96.5% 30.0 $m 60% 20.0 30% 10.0 0% - FY15 FY16 FY17 FY18 FY19 FY20 Operating Cash Flow (RHS) Cash Conversion (LHS) 16
Slide 30: Increasing number of deaths
Increasing number of deaths Number of deaths is the most significant driver of revenue in the death care industry Australia1 New Zealand2 350,000 60,000 1.8% CAGR 2.0% CAGR (2030-2050) (2030-2050) 300,000 50,000 1.1% CAGR 2.7% CAGR (2019-2030) 250,000 (2019-2030) 40,000 0.8% CAGR 0.9% CAGR (1990-201
Slide 31: Market Share estimate (funeral volumes)
Market Share estimate (funeral volumes) Propel has increased its market share in the highly fragmented Australian funeral industry CY151 CY192 InvoCare InvoCare ~24.6% ~22.9% Others Others ~74.2% ~70.8% ~1.2% ~6.3% 1 Note: 159,052 actual deaths (ABS data) for market size, 1,920 funerals performed by
Slide 32: Acquisitions (since IPO)
Acquisitions (since IPO) Propel has deployed $125.8 million1 on acquisitions since its IPO Funeral Third Party Australia Announced Volumes Cremations Revenue Brindley Group (VIC, NSW) December 2017 1,350 - A$11.0m Norwood Park (ACT, NSW, QLD) January 2018 - 2,000 A$4.8m Newhaven NQ (QLD) June 2018 2
Slide 33: Capital management
Capital management Propel has a current funding capacity of circa $70 million Funding capacity (as at 17 November 2020) Comments Debt facilities Debt facility limits / maturity: $ million - Tranche A (matures in August 2022) 50.0 • Expanded to $150.0m in December 2019 - Tranche B (matures in August
Slide 34: COVID-19 impacts
COVID-19 impacts Average Revenue Per Funeral and funeral volumes have been impacted by COVID-19 1 Average Revenue Per Funeral $5,672 $5,756 $5,835 $5,421 Funeral attendee limits and social distancing measures introduced in late March 2020 to curb the spread of COVID-19: • affected Propel’s ability t
Slide 35: COVID-19 responses
COVID-19 responses Focused on people safety, essential service continuity and financial resilience 1 People safety 2 Essential service continuity 3 Financial resilience • ensuring sufficient supply of PPE • ensuring staff able to cross state/territory • prudently increasing cash at bank borders and
Slide 36: Outlook
Outlook Demand for essential funeral services remains, underpinned by favourable demographics 1 In Q1 F21, Propel reported: • Operating EBITDA of $10.5 million, up circa 18% on the PCP • Average Revenue Per Funeral growth on FY20 within its target range of 2% to 4% • Total funeral volume growth on t
Slide 37: 3. Formal business and resolutions
2. 3.COVID-19 Impactand resolutions Formal business XXXX 24
Slide 38: 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, directors’ report and auditor’s report for the year ended 30 June 2020.” Note: there is no requirement for shareholders to approve these reports. 25
Slide 39: Formal business – item 2
Formal business – item 2 Item 2: Re-election of existing Director “That Mr Jonathan Trollip, 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 40: Formal business – item 3
Formal business – item 3 Item 3: Resolution to adopt the remuneration report “That the remuneration report that forms part of the director’s report of the Company for the financial year ended 30 June 2020 be adopted.” 27
Slide 41: Formal business – item 4
Formal business – item 4 Item 4: Amendment to the constitution “That the Company’s constitution be amended so that Rule 5.7(i) be deleted and replaced with: ‘If a poll has been taken at a meeting of shareholders, the chairperson of the meeting may close the meeting prior to the results being known o
Slide 42: 4. Shareholder questions
A. Shareholder questions )
Slide 43: Votes to be counted
Votes to be counted PROPEL FUNERAL PARTNERS PrP
Slide 44: Meeting Close – Thank you
Meeting Close — Thank you PROPEL FUNERAL PARTNERS PrP
Slide 45: 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 prepaid impacts, divided by the number of funerals performed in the relevant period. Cash Flow Conversion mea
Slide 46: Important notice and disclaimer
Important notice and disclaimer This presentation contains summary information about Propel Funeral Partners No representation or warranty, express or implied, is made as to the fairness, Limited (ACN 616 909 310) (Propel) and its activities current as at the date of accuracy, completeness or correc
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