World Kinect Corporation · NYSE:WKC
World Kinect — World Fuel Services — Q2 2017 Earnings Presentation
21 slides from World Kinect's earnings presentation, Jul 27, 2017
Slide 1: 2017 Second Quarter Earnings Call
World Fuel Services Corporation 2017 Second Quarter Earnings Call July 27, 2017 Copyright © 2017 World Fuel Services Corporation. Proprietary & Confidential. All Rights Reserved.
Slide 2: Safe Harbor Statement
Safe Harbor Statement Caution Concerning Forward Looking Statements Certain statements made today, including comments about World Fuel's expectations regarding future plans, performance and acquisitions are forward- looking statements that are subject to a range of uncertainties and risks that could
Slide 3: Business Overview
Business Overview Michael Kasbar Chairman and Chief Executive Officer Copyright © 2017 World Fuel Services Corporation. Proprietary & Confidential. All Rights Reserved. 3
Slide 4: Second Quarter Overview
Second Quarter Overview • Today we announced second quarter adjusted earnings of $34 million or $0.50 adjusted diluted earnings per share • Aviation segment volume at highest level ever o Increases came from core resale activities in North America as well as continued stable performance from governm
Slide 5: Financial Overview
Financial Overview Ira Birns Executive Vice President and Chief Financial Officer Copyright © 2017 World Fuel Services Corporation. Proprietary & Confidential. All Rights Reserved. 5
Slide 6: Consolidated Revenue
Consolidated Revenue ($ in millions) $8,086 $6,633 Q2'16 Q2'17 Copyright © 2017 World Fuel Services Corporation. Proprietary & Confidential. All Rights Reserved. 6
Slide 7: Volume by Segment
Volume by Segment 8.2 6.8 2,032 1,472 1,723 1,244 Q2'16 Q2'17 Q2'16 Q2'17 Q2'16 Q2'17 Aviation Marine Land (Gallons in millions) (Metric tons in millions) (Gallons in millions) Copyright © 2017 World Fuel Services Corporation. Proprietary & Confidential. All Rights Reserved. 7
Slide 8: Consolidated Gross Profit
Consolidated Gross Profit ($ in millions) $231 $219 Q2'16 Q2'17 Copyright © 2017 World Fuel Services Corporation. Proprietary & Confidential. All Rights Reserved. 8
Slide 9: Gross Profit by Segment
Gross Profit by Segment ($ in millions) $111 $99 $87 $80 $40 $33 Q2'16 Q2'17 Q2'16 Q2'17 Q2'16 Q2'17 Aviation Marine Land 9 Copyright © 2017 World Fuel Services Corporation. Proprietary & Confidential. All Rights Reserved.
Slide 10: Reconciliation of Non-Recurring Items
Reconciliation of Non-Recurring Items ($ in millions) Aviation segment $ 3.2 Land segment $ 1.1 Marine segment $ 0.8 Corporate overhead-unallocated $ 0.6 Total non-recurring items $ 5.7 Copyright © 2017 World Fuel Services Corporation. Proprietary & Confidential. All Rights Reserved. 10
Slide 11: Consolidated Operating Expenses
Consolidated Operating Expenses (excluding bad debt provision) ($ in millions) Q3’17E: $173 – $177 $173 $165 Q2'16 Q2'17 Q3'17E Copyright © 2017 World Fuel Services Corporation. Proprietary & Confidential. All Rights Reserved. 11
Slide 12: Consolidated Income From Operations
Consolidated Income From Operations ($ in millions) $57 $52 Q2'16 Q2'17 Copyright © 2017 World Fuel Services Corporation. Proprietary & Confidential. All Rights Reserved. 12
Slide 13: Non-Operating Expenses
Non-Operating Expenses ($ in millions) Q3’17E: 16.4 $14 – $16 8.7 Q2'16 Q2'17 Q3'17E Copyright © 2017 World Fuel Services Corporation. Proprietary & Confidential. All Rights Reserved. 13
Slide 14: Effective Tax Rate
Effective Tax Rate FY’17E: 19.5% 15% – 18% 15.1% Q2'16 Q2'17 FY'17E Copyright © 2017 World Fuel Services Corporation. Proprietary & Confidential. All Rights Reserved. 14
Slide 15: Net Income
Net Income ($ in millions) $44.0 $45.1 $34.8 $34.2 Q2'16 Q2'17 Q2'16 Q2'17 Adjusted Net Income Non-GAAP Net Income Copyright © 2017 World Fuel Services Corporation. Proprietary & Confidential. All Rights Reserved. 15
Slide 16: Diluted Earnings Per Share
Diluted Earnings Per Share $0.63 $0.66 $0.50 $0.50 Q2'16 Q2'17 Q2'16 Q2'17 Adjusted EPS Non-GAAP EPS Copyright © 2017 World Fuel Services Corporation. Proprietary & Confidential. All Rights Reserved. 16
Slide 17: Balance Sheet Management
Balance Sheet Management • Total accounts receivable was $2.2 billion at quarter end • Net working capital was $890 million o Net working capital decreased $50 million compared to the first quarter of 2017 • Generated $19 million of operating cash flow during quarter o Year-to-date operating cash fl
Slide 18: In Closing
In Closing • We are still facing challenges in our marine and parts of our land segments, but delivered a good result during our seasonally weakest quarter • We again generated operating cash flow, repaid debt, further strengthening our balance sheet • Our long-term opportunities remain strong acros
Slide 19: Questions & Answers
Questions & Answers Copyright © 2017 World Fuel Services Corporation. Proprietary & Confidential. All Rights Reserved. 19
Slide 20: Earnings Reconciliation
Earnings Reconciliation ($ in millions except per share data) Q2 2016 Q2 2017 As Reported Adjustments As Adjusted As Reported Adjustments As Adjusted Revenue $6,633.0 $0.0 $6,633.0 $8,086.2 $0.0 $8,086.2 Gross Profit 218.5 - 218.5 231.0 - 231.0 Operating Expenses 173.0 (5.9) 167.0 179.7 (5.7) 174.1
Slide 21: Guidance Reconciliation
Guidance Reconciliation With regard to the Company’s outlook for 2017, reconciliation of Adjusted EPS to the most directly comparable GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability and complexity with respect to the charges excluded