Propel Funeral Partners Ltd. · ASX:PFP
Propel Funeral Partners — Shareholder Meeting (November 2023)
44 slides from Propel Funeral Partners's shareholder meeting presentation, Nov 23, 2023
Slide 1: ASX Announcement: 2023 Annual General Meeting
ASX ANNOUNCEMENT 23 November 2023 2023 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 2023 Annual General Meeting (AGM) commencing today at 9.30am (Syd
Slide 2: 2023 Annual General Meeting
2023 Annual General Meeting 23 November 2023 1
Slide 3: 1. The Chairman's introduction
1. The Chairman’s introduction 2
Slide 4: Propel is focussed on a clearly defined growth strategy
“Propel is focussed on a clearly BRIAN SCULLIN defined growth strategy to acquire Independent Chairman & and operate assets within the Non-Executive Director death care industry in Australia and New Zealand.” Harbour City Funeral Home – Upper Hutt, New Zealand 3
Slide 5: Your board
Your board Focussed 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
Slide 7: Proxies received prior to the cut-off time
Proxies received prior to the cut-off time A total of 183 valid proxy forms were received, and respective shareholdings were accumulated and are summarised below: Resolution For Open Against Abstain 2 41,571,780 994,103 2,091,218 803,373 3 62,231,702 1,014,900 1,916,986 425,134 4 46,536,184 1,014,90
Slide 8: The Chairman's introduction
The Chairman’s introduction 1. Continued growth in FY23 • material revenue and earnings growth Relative share price and index performance 100% Propel 2. Dividends: • 14.0cps fully franked in connection with FY23 (FY22: 12.25cps) 80% +78.9%1 • 65.9cps fully franked since IPO (~94.0cps, grossed up for
Slide 9: 2. Presentation from the Managing Director
2. Presentation from the Managing Director 8
Slide 10: FY23 was another record year for Propel
“FY23 was another record year for ALBIN KURTI Propel, which continued its track Managing Director record of delivering revenue and earnings growth.” Olsens Funerals, – Sutherland (Sydney), Australia 9
Slide 11: Key highlights of FY23
Key highlights of FY23 Revenue Funeral Volumes Average Revenue Per Funeral 1 TRADING1 $168.5m 18,029 $6,398 16.0% 9.0% 6.0% (comparable up ~7%) Operating EBITDA Operating NPAT Cash Flow Conversion 2 EARNINGS1 $46.0m2 $20.9m2 95.4% 18.0% 17.9% 480 bps Dividend Gearing Ratio Funding Capacity
Slide 12: Geographic Presence
Geographic Presence 183 operating locations1 (109 owned / 74 leased), including 37 cremation facilities and 9 cemeteries 1 August 2013 2 September 2023 Queensland Queensland 1 Western 29 Australia South Australia 14 44 New South Wales 12 1 ACT 19 Victoria 46 New Zealand Tasmania 18 Geographic footpr
Slide 13: Brand Portfolio
Brand Portfolio Diversified single and multi-site brands with strong local community awareness Australia NZ Pinegrove Funerals ismore Funeral Services Acquisitions completed during and since FY23 12
Slide 14: Volume and Revenue Growth
Volume and Revenue Growth Propel has maintained a strong growth trajectory 1 Funeral volumes 2 Revenue ($m) 18,029 168.5 9.0% 16,537 16.0% 145.2 13,916 13,299 120.4 11,304 110.8 10,111 95.1 80.9 6,054 46.1 2,967 22.4 1,625 906 10.9 278 465 6.0 1.2 2.2 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
Slide 15: Earnings Growth
Earnings Growth Propel has maintained a strong growth trajectory 1 Operating EBITDA ($m) 2 Operating NPAT ($m) 20.9 46.0 17.9% 18.0% 39.0 17.7 36.3 15.3 32.4 14.2 13.3 12.3 23.8 21.5 12.3 5.5 5.8 2.9 3.1 1.5 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 1 FY23 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 1
Slide 16: Average Revenue Per Funeral Growth
Average Revenue Per Funeral Growth Compound annual growth rate (CAGR) of ~3.0% since FY14 $6,398 ~6% on FY22 CAGR ~3.0% $6,038 (comparable up ~7%) $5,917 $5,672 $5,508 $5,585 $5,223 $5,099 $4,899 $4,976 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 15
Slide 17: Cash Flow Conversion
Cash Flow Conversion Consistently strong and has averaged ~99% since FY15 104.0% 103.4% 101.8% 100.2% 98.9% 97.4% ~99% average 96.5% 95.4% 93.7% (since FY15) FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 16
Slide 18: 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 New Zealand 2.5% CAGR 300,000 (2031-2040) 60,000 2.1% CAGR 250,000 2.4% CAGR (2031-2040) (2023-2030) 50,000 1.8% CAGR (2023-2030) 200,000 0.9 % CAGR 40,000 0.8% CAGR (1990-
Slide 19: 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 CY222 InvoCare InvoCare ~25% ~21% Others Others ~74% ~71% ~1% ~8% 1. Note: 159,052 actual deaths (ABS data) for market size, 1,920 funerals performed by Propel
Slide 20: Acquisitions
Acquisitions Propel has committed ~$121 million1 on acquisitions during the past ~12 months (~$269 million1 since its IPO) 1 FY23: 1. Community Funerals/ Cremation for Pets Nov-22 Cairns, QLD 2. Mason Park Funerals Nov-22 Wangaratta, VIC Consideration: ~$44 million 3. Pets at Rest Dec-22 Auckland, N
Slide 21: Trading Update
Trading Update A record Q1 for Propel, despite the funeral industry cycling strong death volume growth in the PCP Q1 FY241: Revenue: $52.8m record Q1, materially above the PCP Operating EBITDA $14.4m record Q1, materially above the PCP Funeral volumes: 5,450 record Q1, materially above the PCP
Slide 22: FY24 guidance
FY24 guidance Propel reaffirms its FY24 guidance range1 for Revenue of $200m-$220m and Operating EBITDA of $54m-60m Revenue ($m) Operating EBITDA ($m) 220.0 High1 60.0 High1 200.0 Low1 54.0 Low1 168.5 46.0 145.2 39.0 36.3 120.4 32.4 110.8 95.1 23.8 80.9 21.5 FY18 FY19 FY20 FY21 FY22 FY23 FY24G FY18
Slide 23: 3. Formal business and resolutions
3. Formal business and resolutions 22
Slide 24: 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 2023.” Note: there is no requirement for shareholders to approve these reports 23
Slide 25: 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 2023 be adopted.” Note: this resolution is advisory only and does not bind the directors of the Company. 24
Slide 26: Formal business: Item 3
Formal business: Item 3 Item 3: Re-election of existing Director “That Mr Brian Scullin, 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.” 25
Slide 27: Formal business: Item 4
Formal business: Item 4 Item 4: Re-election of existing Director “That Mr Fraser Henderson, 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 5
Formal business: Item 5 Item 5: Resolution relating to the ratification of the issuance of ordinary shares (acquisition of Harbour City Funeral Home) “That approval is given to ratify the issue of 222,878 fully paid ordinary shares in the capital of the Company to HCF1 Limited as described in the Ex
Slide 29: Formal business: Item 6
Formal business: Item 6 Item 6: Resolution relating to the proposed issue of ordinary shares (acquisition of a property from which Terry Longley & Sons operates) “That approval is given to ratify the issue of 58,685 fully paid ordinary shares in the capital of the Company to Shannadore Longley, Moni
Slide 30: 4. Shareholder questions
4. Shareholder questions 29
Slide 31: Votes to be counted
Votes to be counted PROPEL FUNERAL, PARI INES PrP
Slide 32: Meeting close - thank you
Meeting close — thank you PrP PROPEL FUNERAL, PARTNERS 31
Slide 33: Definitions
Definitions ABS means the Australian Bureau of Statistics. 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 rel
Slide 34: 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. Pro
Slide 35: Propel Funeral Partners
PROPEL FUNERAL PARTNERS PrP
Slide 36: Chairman's and Managing Director's Addresses
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses PROPEL FUNERAL PARTNERS LIMITED Thursday, 23 November 2023 (9.30am) 2023 Annual General Meeting Address from the Chairman, Brian Scullin: Slide 3 Good morning everyone. I’m Brian Scullin, Independent Chairman and Non-Exec
Slide 37: Chairman's address: Slide 5
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Slide 5 After my introduction, Albin will provide some comments on last year’s financial results and a trading update, among other matters. The formal matters of the Meeting will then be addressed and you will have the op
Slide 38: Chairman's address: listing, dividends and strategy
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses One of the primary reasons for listing on the ASX was to enable the Company to access debt and equity markets more efficiently. During FY23, Propel expanded its senior debt facilities by $55 million to $255 million and al
Slide 39: Chairman's address: takeover interest and board
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses • the Board has determined the interest received to date has not been compelling and has, therefore, elected not to engage with any party regarding its interest; and • the Company has appointed financial and legal adviser
Slide 40: Address from the Managing Director
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 would like to acknowledge bereaved client families who farewelled loved ones du
Slide 41: Managing Director's address: growth and network
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses In terms of growth: – Propel added 15 locations to its network in FY23, completing five new acquisitions in Queensland, Victoria, South Australia and New Zealand; – subsequent to year end, Propel has completed four acquis
Slide 42: Managing Director's address: earnings growth
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Slide 14 In terms of earnings growth: − as you can see on the left, the Company generated Operating EBITDA of $46 million in FY23, up 18% and a circa 15 fold increase since FY15; and − the chart on the right shows that Pr
Slide 43: Managing Director's address: acquisitions
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Slide 19 Since its IPO six years ago today, Propel has deployed circa $269 million on acquisitions, which are geographically spread across Australia and New Zealand. In FY23, the Company deployed circa $44 million on five
Slide 44: Managing Director's address: FY24 guidance and conclusion
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Slide 21 Based on the Company’s Q1 trading performance and outlook for the remainder of the financial year, Propel re-affirms its FY24 guidance for: − Revenue in the range of $200 to $220 million; and − Operating EBITDA o
Propel Funeral Partners — Shareholder Meeting (November 2023) on 6ix