Propel Funeral Partners Ltd. · ASX:PFP
Propel Funeral Partners — Bell Potter Emerging Leaders Conference 2021
26 slides from Propel Funeral Partners's conference presentation, Sep 14, 2021
Slide 1: Bell Potter Emerging Leaders Conference
Bell Potter Emerging Leaders Conference Investor Presentation 14 September 2021
Slide 2: Important notice and disclaimer
Important notice and disclaimer This presentation contains summary information about Propel Funeral Partners Limited (ACN 616 909 310) No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or (Propel) and its activities current as at the date of this p
Slide 3: 1. Key highlights for FY21
1. Key highlights for FY21
Slide 4: Key highlights for FY21
Key highlights for FY21 1 Revenue Funeral volumes Average Revenue Per Funeral TRADING1 $120.4m 8.7% 13,916 4.6% $5,917 4.3% (up 2.8% on the pre-COVID period2) 2 Operating EBITDA Operating NPAT Cash Flow Conversion EARNINGS1 $36.3m 11.9% $15.3m 7.6% 101.8% 160bps 3 Total Dividends Gearing Ratio Fundi
Slide 5: COVID-19 impacts
COVID-19 impacts Average Revenue Per Funeral growth despite below trend death volumes 1 Average Revenue Per Funeral $5,756 $5,917 $5,672 $5,421 Unlike the widespread impacts of strict funeral attendee limits in Australia and New Zealand during Q4 FY20, Average Revenue Per Funeral impacts during FY21
Slide 6: COVID-19 responses
COVID-19 responses Focused on people safety, essential service continuity and financial resilience 1 People safety • communicating government guidelines and directives to staff and mourners • ensuring sufficient supply of PPE • cessation of certain services (e.g. catering) • working from home, where
Slide 7: Management internalisation completed
Management internalisation completed Management internalisation completed on 26 July 2021 As described in the Explanatory Memorandum1: 1 The management internalisation involved: • the assignment and termination of the management agreement between the Company and the Manager • payment of a $15.0 mill
Slide 8: 2. Company overview
2. Company overview
Slide 9: Geographic presence
Geographic presence 136 locations (77 owned / 59 leased), including 32 cremation facilities and 9 cemeteries August 2013 August 2021 Queensland Queensland 1 Western 26 Australia South Australia 13 33 New South Wales 2 1 ACT 17 Victoria 25 New Zealand Tasmania 19 Geographic footprint is difficult to
Slide 10: Brand portfolio
Brand portfolio Diversified single and multi-site brands with strong local community awareness Australia New Zealand Pinegrove Funerals ismore Funeral Services Acquired during FY21 10
Slide 11: Volume and revenue growth
Volume and revenue growth Propel has maintained a strong growth trajectory despite COVID-19 impacts Funeral volumes Revenue ($m) 120.4 13,916 13,299 110.8 4.6% 8.7% 11,304 95.1 10,111 80.9 6,054 46.1 2,967 22.4 1,625 10.9 906 6.0 278 465 2.2 1.2 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY12
Slide 12: Earnings growth
Earnings growth Propel has maintained a strong growth trajectory despite COVID-19 impacts Operating EBITDA ($m) Operating NPAT ($m) 36.3 15.3 32.4 11.9% 14.2 7.6% 13.3 12.3 23.8 21.5 12.3 5.5 2.9 5.8 1.5 3.1 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY15 FY16 FY17 FY18 FY19 FY20 FY21 12
Slide 13: Dividend growth
Dividend growth Total dividends declared in connection with FY21 are up 17.5% on the prior year Dividends Declared (cps) Comments 11.75 • Dividends declared in connection with FY21 totalled 11.75 cps fully franked (FY20: 10 cps), which represents: 17.5% ‒ a payout ratio of ~81% of Distributable Earn
Slide 14: Average Revenue Per Funeral growth
Average Revenue Per Funeral growth Compound annual growth rate (CAGR) of ~2.7% since FY14 CAGR ~2.7% $5,917 $5,672 4.3% $5,585 (up 2.8% on the pre-COVID period1) $5,508 $5,223 $5,099 $4,976 $4,899 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 1 1 July 2019 to 31 March 2020 14
Slide 15: Cash Flow Conversion
Cash Flow Conversion Cash Flow Conversion has been consistently strong, averaging ~99% since FY15 104.0% 103.4% 101.8% 98.9% 97.4% 36.9 10.2% 96.5% 33.5 93.7% 23.1 20.6 12.2 5.4 3.2 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Operating Cash Flow ($m) Cash Conversion 15
Slide 16: Performance summary since IPO
Performance summary since IPO Propel’s share price has outperformed the ASX300 and its listed domestic peer since IPO Relative share price and index performance Comments Propel vs ASX300 vs InvoCare Since Propel’s IPO on 23 November 2017 and as at 30 June 2021: 50% Propel • Propel’s share price was
Slide 17: 3. Industry trends and acquisitions
3. Industry trends and acquisitions
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 Australia1 New Zealand2 • Death volumes in Australia grew by 0.9% pa between 1990 and • Death volumes in New Zealand grew by 0.7% pa between 1990 20191 and 20202 • Death volumes are expe
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 CY151 CY202 InvoCare InvoCare ~24.6% ~22.9% Others Others ~74.2% ~70.1% ~1.2% ~7.0% 1 Note: 159,052 actual deaths (ABS data) for market size, 1,920 funerals performed by
Slide 20: Acquisitions
Acquisitions Propel has committed $142.1 million1 on acquisitions since its IPO 1 During FY21, Propel deployed $29.6 million2 on acquisitions completed in NZ, WA, QLD and NSW, including: 100% of the issued share capital and certain freehold properties of, among others, Dils Funeral Services Limited,
Slide 21: 4. Summary and outlook
4. Summary and outlook
Slide 22: Summary
Summary Growth track record, stable management, defensive market position and sector thematic are attractive characteristics 1 Long term growth profile • Strong growth track record (>10 fold increase in Revenue and Operating EBITDA since FY15) • Consistent growth in key operating metrics (funeral vo
Slide 23: Outlook
Outlook Demand for essential funeral services remains, underpinned by favourable demographics 1 Death volumes expected to revert to long term trends given: • prior period declines have rebounded quickly • the unusually benign flu seasons in 2020 and 2021 YTD • the growing and ageing populations in A
Slide 24: 5. Q&A
5. Q&A
Slide 25: 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 26: Propel Funeral Partners
Ta PROPEL r FUNERAL PARTNERS
Propel Funeral Partners — Bell Potter Emerging Leaders Conference 2021 on 6ix