Viva Energy Group Ltd. · ASX:VEA
Viva Energy — FY2020 Earnings Presentation
35 slides from Viva Energy's earnings presentation, Feb 24, 2021
Slide 1: Financial results Year ended 31 December 2020
Financial results Year ended 31 December 2020
Slide 2: Important notice and disclaimer
Important notice and disclaimer This presentation has been prepared by Viva Energy Group presentation. All reasonable care has been taken in preparing upon as an indication or guarantee of future performance. Limited, ACN 626 661 032 (“Company” or “Viva Energy”). the information and assumptions cont
Slide 3: Contents
Contents 4 10 21 26 GROUP FINANCIAL PATHWAY TO SUPPLEMENTARY HIGHLIGHTS PERFORMANCE RECOVERY INFORMATION -------------------- -------------------- -------------------- SCOTT WYATT JEVAN BOUZO SCOTT WYATT CEO CFO CEO Viva Energy Group Limited FY2020 Results Presentation 3
Slide 4: Group Highlights
Group Highlights Scott Wyatt Viva Energy Group Limited FY2020 Results Presentation 4
Slide 5: Resilience and Recovery
Resilience and Recovery Successfully navigated COVID-19 and emerged with clear pathway for recovery and growth COVID Response Financial Discipline Positioned for Recovery • Successfully implemented COVID safe • Entered the crisis in a strong net cash • Non-refining businesses performing well operati
Slide 6: Health and Safety Performance
Health and Safety Performance Operated safely and reliably in the COVID-19 environment Total recordable injury frequency rate 1, 2 • Continued strong safety performance, with 20% reduction in recordable injuries rate compared to FY2019 5.8 4.7 4.5 4.6 3.6 • Protected employees from exposure to COVID
Slide 7: Sales and Production Performance
Sales and Production Performance Successfully adapted to changing market conditions Sales volumes by product (ML) Refining production (%) FY2016 FY2017 FY2018 FY2019 FY2020 FY2016 FY2017 FY2018 FY2019 FY2020 8% 9% 10% 14% 14,557 14,151 14,695 25% 14,046 15% 17% 16% Other 1,118 969 12% 1,030 1,082 12
Slide 8: Financial performance
Financial performance Strong underlying performance in the non-refining businesses Financial Balance sheet & Capital performance working capital management $614.5M $104.2M ~$66.1M Non-Refining Underlying EBITDA (RC) Net Debt Paid in dividends during the year 1 up 16.5% on FY2019 down from Net Cash o
Slide 9: Progress on strategic priorities
Progress on strategic priorities Successfully delivered on several key priorities despite the COVID-19 disruption Retail Refining Cost and Capital Geelong performance sustainability management ‘Energy Hub’ • Progressive recovery of retail sales • Managed COVID-19 risk and • Maintained low levels of
Slide 10: Financial Performance
Financial Performance Jevan Bouzo Viva Energy Group Limited FY2020 Results Presentation 10
Slide 11: FY2020 financial highlights
FY2020 financial highlights Strong performance in non-refining with the refining result driving an overall loss $M FY2019 FY2020 Comparison Underlying EBITDA (RC) • FY2020 Non-Refining EBITDA (RC) increased by 16.5% Retail, fuels & Marketing: to $614.5M with: Retail 564.3 670.8 18.9% Retail increa
Slide 12: Year-on-year financial performance
Year-on-year financial performance Strong underlying performance in the non-refining businesses FY2019 vs FY2020 Underlying Group EBITDA (RC) variance ($M)1 129 (178) Direct COVID-19 impacts 22 Total impact: $(97M) (42) (67) 645 21 (1) (3) (69) 38 25 519 FY2019 Integration of Marketing Regional refi
Slide 13: Retail overview
Retail overview Resilient results despite disrupted volume environment Retail Underlying EBITDA (RC) ($M) FY2020 overview on results • FY2020 Underlying EBITDA (RC) of $670.8M, up 19% on FY2019 FY2019 564 • Following introduction of ‘stay at home’ restrictions to manage COVID-19, sales volumes decli
Slide 14: Commercial overview
Commercial overview Earnings largely impacted by decline in Aviation sales volumes Commercial Underlying EBITDA (RC) ($M) FY2020 overview on results • FY2020 Underlying EBITDA (RC) of $238.3M, down 19.6% on FY2019 FY2019 297 • Total Commercial sales volumes, excluding Aviation, have declined approxi
Slide 15: Refining overview
Refining overview Regional refining margins and lower production weighed on earnings Refining Underlying EBITDA (RC) ($M) FY2020 overview of results • FY2020 Underlying EBITDA (RC) of ($95.1M), down $212.1M on FY2019 117 FY2019 • Refining intake and production was reduced from May 2020 through to No
Slide 16: Supply, Corporate & Overheads overview
Supply, Corporate & Overheads overview Active cost management and variable cost base drove reduction in operating costs Supply, Corporate & Overheads Underlying EBITDA (RC) ($M) FY2019 (333) FY2020 overview on results Supply chain: 10 • FY2020 Underlying EBITDA (RC) of ($294.6M), an Storage & handli
Slide 17: FY2020 cash flow bridge
FY2020 cash flow bridge The Company successfully managed cash flow despite significant disruption from COVID-19 26 (125) Change in cash (70) ($m) Add back dividends and cap return 595 (178) Add back repayment of borrowings 107 12 730 (181) FCF before dividends & cap return 632 923 Subtract benefit o
Slide 18: Balance sheet
Balance sheet The balance sheet remains solid with strong cash generation during the year Change in Net Debt (A$M) Strong balance sheet • Balance sheet remains strong with a reduction in net debt achieved during the year • Robust debt capacity, with current facility limits of US$700M Changes in net
Slide 19: Capital expenditure
Capital expenditure Group capex in 2021 to increase from 2020 but in-line with prior periods Capital Expenditure Profile ($M) FY2021 $M FY2020 guidance 309 Retail, Fuels & Marketing 19 42 Refining (exclusive of major 234 241 25 maintenance) 30 132 45 32 Supply, Corporate & Overheads 23 21 161 159 39
Slide 20: FY2020 Significant items, NPAT and dividend
FY2020 Significant items, NPAT and dividend Reconciliation of Underlying NPAT (RC) & Distributable NPAT (RC) 1H2020 2H2020 FY2020 Total Return to Shareholders $M $M $M • $595M returned to Shareholders during 2020 via dividends (including Statutory profit after tax (HC) 11.1 (47.3) (36.2) special div
Slide 21: Pathway to Recovery
Pathway to Recovery Scott Wyatt Viva Energy Group Limited FY2020 Results Presentation 21
Slide 22: Business Performance
Business Performance Business fundamentals are strong with growth outlook once refining sustainability resolved Sales and Marketing (Non-Refining) Cash contribution ($M)1 • Despite impacts of COVID-19, the sales and marketing businesses have delivered consistent cash contributions over time • Recove
Slide 23: Business Recovery
Business Recovery A strong foundation to recover from impacts of COVID-19 Building a strong Resilient to impacts of Pathway Outcomes foundation COVID-19 to recovery • Renegotiation of the Alliance • Optimised volume/margin mix • Entering recovery with a strong • Maintain safety and Agreement leading
Slide 24: Priorities to deliver sustained recovery
Priorities to deliver sustained recovery Our focus areas will deliver a sustained recovery through to 2023+ Area Priority Timeframe At end Feb 2021 Retail Stronger Alliance network performance Alliance volume recovering from COVID-19 lows and overall Development of Liberty Convenience retail channel
Slide 25: 2021 Priorities
2021 Priorities A year for recovery and growth as the country emerges from impacts of COVID-19 Refining Retail and Commercial Geelong Capital Sustainability Performance ‘Energy Hub’ Management • Work closely with Government on • Optimise sales and margin mix to • Secure approvals to proceed with • M
Slide 26: 2021 Outlook
2021 Outlook A year for recovery and growth as the country emerges from impacts of COVID-19 Outlook statements • As the country sustains a ‘covid-normal’ environment and vaccines are rolled out we expect to see ‐ Continued recovery of retail sales volumes through our core Retail channels ‐ Retail fu
Slide 27: Supplementary Information
SUPPLEMENTARY INFORMATION Viva Energy Group Limited FY2020 Results Presentation 27
Slide 28: Retail fuel margins
Retail fuel margins Industry retail fuel margins strengthened in early 2020, with margin environment softening volume disruption Industry fuel margin1 (cpl) 18.6 17.2 16.5 2014-2018 average fuel margin: 12.5cpl 15.4 14.9 12.8 13.0 2010-2013 average fuel margin: 9.3cpl 12.3 11.9 12.3 11.4 9.7 10.0 8.
Slide 29: Strategic national retail network
Strategic national retail network Viva Energy network distribution by channel Network brand Viva Energy network distribution by state Total 1% 2% 8% Alliance 722 - - 722 30% NT Liberty Oil 14% TAS Convenience1,2 17 72 89 SA Dealer Owned and WA Other Platforms 3 280 227 21 528 QLD 17% VIC Total 1,019
Slide 30: 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 1,330+ service station sites nationwide in Viva Energy’s network fuel import terminal
Slide 31: Refinery – illustrative sensitivity analysis
Refinery – illustrative sensitivity analysis Refinery sensitivity analysis Pro forma Pro forma EBITDA (RC) Underlying NPAT Variable Increase/Decrease 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 32: Refinery – margin analysis and key drivers
Refinery – margin analysis and key drivers Metric FY16 FY17 FY18 FY19 FY20 A: A$/US$ FX 0.74 0.77 0.75 0.69 0.69 B: Crude and feedstock intake mbbls 39.9 40.8 40.1 42.0 34.8 C: Geelong Refining Margin US$/bbl 7.9 10.2 7.4 6.6 3.1 D: Geelong Refining Margin = C / A A$/bbl 10.6 13.3 9.9 9.5 4.4 E: Gee
Slide 33: Refining margin performance
Refining margin performance Refining margin cracks1, GRM2 and Crude Premia3 (US$/bbl) 20.0 Regional refining margins • Regional refining margins in FY2020 impacted by global decline in demand for oil 15.0 products • Refining rationalisation occurring with some closures and new project deferrals 10.0
Slide 34: Glossary
Glossary Underlying EBITDA Distributable NPAT (RC) Historical Cost (“HC”) Geelong Refining Margin Profit before interest, tax, Represents Underlying NPAT Calculated in accordance with The Geelong Refining Margin is a depreciation and amortisation (RC) adjusted to remove the IFRS non-IFRS measure cal
Slide 35: Viva Energy
VIVA EnergyAustralia