Viva Energy Group Ltd. · ASX:VEA
Viva Energy — H1 2020 Earnings Presentation
34 slides from Viva Energy's earnings presentation, Aug 17, 2020
Slide 1: Viva Energy Financial Results – Half Year ended 30 June 2020
17 August 2020 The Manager Market Announcements Office Australian Securities Exchange Electronic lodgment Viva Energy Financial Results – Half Year ended 30 June 2020 The attached announcement is for release to the market. Authorised for release by: the Board of Viva Energy Group Limited Julia Kagan
Slide 2: Financial results – Period ended 30 June 2020
Financial results Period ended 30 June 2020 Helping people reach their destination Viva Energy Group Limited
Slide 3: Important notice and disclaimer
Important notice and disclaimer This presentation has been prepared by Viva Energy Group date is indicated, in which case the information is current to that You should rely on your own independent assessment of any Limited, ACN 626 661 032 (“Company” or “Viva Energy”). date) and is subject to change
Slide 4: Contents
Contents 4 10 20 24 27 SAFETY & FINANCIAL CAPITAL SUMMARY & SUPPLEMENTARY PERFORMANCE RESULTS MANAGEMENT OUTLOOK INFORMATION HIGHLIGHTS SCOTT WYATT JEVAN BOUZO JEVAN BOUZO SCOTT WYATT CEO CFO CFO CEO Viva Energy Group Limited 1H2020 results presentation 3
Slide 5: Safety & performance highlights
Safety & performance highlights Viva Energy Group Limited 1H2020 results presentation 4
Slide 6: People, safety, community and environment performance
People, safety, community and environment performance COVID-19 impact & response • Robust health and COVID-19 management protocols in place • Around 50% of our workforce currently working successfully from home • Updated domestic & family violence policy Safety record • More than 40% reduction in re
Slide 7: Operational performance
Operational performance Sales volumes by product (ML) Refining Production FY2016 FY2017 FY2018 FY2019 1H2019 1H2020 FY2016 FY2017 FY2018 FY2019 1H2019 1H2020 8% 9% 10% 14% 14% 22% 15% 17% 16% 1,118 969 12% 11% 1,030 1,082 6% 3,196 3,488 Other 3,350 3,345 Other 35% Jet Δ (10.5%) 34% 36% 39% 41% 40% J
Slide 8: Financial performance
Financial performance Strong financial results were achieved despite immediate operational impacts from COVID-19 Financial Balance sheet & Capital performance working capital management $318.7m $480.9m 0.8c Non-Refining Underlying EBITDA (RC) Net Cash 1H2020 dividend per share, fully up 14% on 1H201
Slide 9: Half-on-half financial performance
Half-on-half financial performance Impacts from COVID-19 offset by significant improvement in marketing margins 1H2019 vs 1H2020 Underlying Group EBITDA (RC) variance ($m)1,2 3 59 (57) Direct COVID-19 impacts 7 (22) Total impact: ($41m) 5 (29) 14 (4) 297 (27) 23 269 1H2019 Alliance volume Integratio
Slide 10: Refining margin performance
Refining margin performance Weaker global and local oil products demand is weighing on refining margins Refining margin cracks and GRM (US$/bbl)1 Regional Refining Margins 20 • Regional refining margins in 2Q2020 impacted by global decline in demand for oil products • Global demand for oil products
Slide 11: Financial results
Financial results Viva Energy Group Limited 1H2020 results presentation 10
Slide 12: 1H2020 financial highlights
1H2020 financial highlights $m 1H2020 1H2019 Comparison $m 30 Jun 20 31 Dec 19 Comparison Volume (ML) 6,381 7,126 (10.5%) Long Term Assets Property, Plant & Equipment 1,444.7 1,474.8 (2.0%) Underlying EBITDA (RC) Investment in Associates 23.9 641.8 (96.3%) Retail, Fuels & Marketing 468.6 441.6 6.1%
Slide 13: Retail overview
Retail overview Fuel and Convenience has demonstrated significant resilience to lower sales environment Retail Underlying EBITDA (RC) ($m) 1H2020 overview on results • 1H2020 Underlying EBITDA (RC) of $332.9m up 17.5% on 1H2019 1H2019 283 a• 1H2020 Alliance sales volumes were impacted by COVID-19 re
Slide 14: Commercial overview
Commercial overview Earnings impacted largely by decline in Aviation sales volumes following COVID-19 Commercial Underlying EBITDA (RC) ($m) 1H2020 overview on results • 1H2020 Underlying EBITDA (RC) of $135.7m was 14.3% lower than 1H2019 1H2019 158 • a Aviation sales volumes are down 38% on 1H2019
Slide 15: Refining overview
Refining overview Regional refining margins and lower intake negatively impacted earnings Refining Underlying EBITDA (RC) ($m) 1H2020 overview on results • 1H2020 Underlying EBITDA (RC) of $(49.4)m was $67.8m lower than 1H2019 1H2019 18 a• 1H2020 Geelong Refining Margin US$2.9/BBL down on 1H2019 res
Slide 16: Supply, Corporate & Overheads overview
Supply, Corporate & Overheads overview Cost reductions achieved across storage, supply, and corporate Supply, Corporate & Overheads Underlying EBITDA (RC) ($m) 1H2020 overview on results • 1H2020 Underlying EBITDA (RC) of $(149.9)m was an 1H2019 (163) improvement of 7.8% over 1H2019 a • Storage and
Slide 17: 1H2020 cash flow bridge
1H2020 cash flow bridge Underlying free cash flow impacted by inventory loss from oil price volatility 1H2020 cash flow bridge ($m) 1H2020 Change in cash 361 Add back dividends paid 51 Add back repayment of borrowings 260 20 (1) (49) FCF before dividends 672 (88) Subtract benefit of working capital
Slide 18: Balance sheet
Balance sheet Robust balance sheet to manage fluctuations and disruption from oil price environment Change in Net Cash (A$m) Strong balance sheet (13) (31) (3) • Pro-forma balance sheet post intended capital management process remains strong • Debt capacity remains robust, with current facility limi
Slide 19: Capital expenditure and balance sheet
Capital expenditure and balance sheet Total capital expenditure is forecast to be between $145 – 180 million for FY2020 Capital expenditure profile ($m) 309 250-300 42 234 241 • Reduction in capex achieved 30 110-140 • Non-essential projects deferred or re-assessed 45 132 32 145-180 • Asset integrit
Slide 20: 1H2020 Significant items, NPAT and dividend
1H2020 Significant items, NPAT and dividend Viva Energy returns 60% of Distributable NPAT to its shareholders Reconciliation of Underlying NPAT (RC) & Distributable NPAT (RC) Significant one off items during the period 1H2020 • Significant one-off gain of $187.4 million relates to sale of 35.5% $m s
Slide 21: Capital management
Capital management Viva Energy Group Limited 1H2020 results presentation 20
Slide 22: Proposed capital management plan
Proposed capital management plan Viva Energy intends to return all of the VVR divestment proceeds through a combination of a capital return (subject to shareholder approval), a special dividend (Board determined) and an on-market buyback. Method to distribute remaining $100 million to be confirmed P
Slide 23: Return of proceeds and share consolidation
Return of proceeds and share consolidation Return of proceeds of $0.2740 per share and share consolidation of 0.84 shares for every one share held (i.e. 25 shares would become 21 shares), subject to shareholder approval Cash Return amount: $0.2740 per share Return of capital – Dividend – Components
Slide 24: Capital management – key dates
Capital management – key dates Viva Energy intends to return $530 million to shareholders by 13 October 2020 Item Date Notice of meeting lodged with ASX 17 August 2020 Shareholder meeting and potential approval of capital return and share consolidation 30 September 2020 Last day for trading in pre-c
Slide 25: Summary and outlook
Summary and outlook Viva Energy Group Limited 1H2020 results presentation 24
Slide 26: Strategic priorities for 2H2020
Strategic priorities for 2H2020 The Company continues to progress its key priorities Sales Recovery Refining Sustainability Capital Management ‘Energy Hub’ • Continued recovery of retail sales • Manage COVID-19 risk and ensure • Continue to closely monitor credit • Complete Expressions of Interest v
Slide 27: Questions
Questions Viva Energy Group Limited 1H2020 results presentation 26
Slide 28: Supplementary information
Supplementary information Viva Energy Group Limited 1H2020 results presentation 27
Slide 29: Refinery – illustrative sensitivity analysis
Refinery – illustrative sensitivity analysis Refinery sensitivity analysis Pro forma Pro forma EBITDA Underlying NPAT Variable Increase/Decrease (RC) impact A$m (RC) impact A$m • For the purposes of tracking the financial performance of the Geelong Refinery, a sensitivity table is provided here to i
Slide 30: Refinery – margin analysis and key drivers
Refinery – margin analysis and key drivers Metric FY16 FY17 FY18 FY19 HY20 A: A$/US$ FX 0.74 0.77 0.75 0.69 0.65 B: Crude and feedstock intake mbbls 39.9 40.8 40.1 42.0 18.4 C: Geelong Refining Margin US$/bbl 7.9 10.2 7.4 6.6 2.9 D: Geelong Refining Margin = C / A A$/bbl 10.6 13.3 9.9 9.5 4.4 E: Gee
Slide 31: Strategic national retail network and infrastructure
Strategic national retail network and infrastructure Highly integrated manufacturing, supply and distribution assets developed over 110 years Darwin Cocos Islands 24% of the Australian downstream petroleum market 1 1,297 service station sites nationwide in Viva Energy’s network fuel import terminals
Slide 32: Viva Energy terminal network
Viva Energy terminal network Owned terminal storage capacity (ML)1,2 Geelong Refinery 309.1 Birkenhead3 63.6 Newport (excl solvents) 107.9 Port Lincoln 15.7 Total Victoria 417.0 Total South Australia 79.3 Clyde 264.0 Gore Bay 84.9 Devonport 23.8 Total NSW 348.9 Total Tasmania 23.8 Gladstone2 40.2 Pi
Slide 33: Glossary
Glossary Underlying EBITDA Distributable NPAT (RC) Historical Cost (“HC”) Geelong Refining Margin Profit before interest, tax, depreciation Represents Underlying NPAT Calculated in accordance with The Geelong Refining Margin is a and amortisation adjusted to remove the (RC) adjusted to remove the IF
Slide 34: Viva Energy Group Limited
Viva Energy Group Limited