Slide 1: Third Quarter 2023 Earnings
2023 Third Quarter Earnings NOVEMBER 6, 2023 A Leading Retail Convenience Store Operator A Fortune 500® Company
Slide 2: Safe Harbor Statement
Safe Harbor Statement FORWARD-LOOKING STATEMENTS This document includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, the Company’s expected financial and operational
Slide 3: ARKO Overview
ARKO Overview 25 Acquisitions 6TH LARGEST CONVENIENCE STORE CHAIN IN U.S. SINCE 2013 • Large, Multi-State Convenience Store Operator with Majority of Profits Generated from Company Operated Stores • Runway for Growth In-Store Marketing Initiatives and 1,552 ~14,000 30+ Continued Acquisitions Company
Slide 4: Track Record of Delivering Long-Term Growth
Track Record of Delivering Long-Term Growth DELIVERING RESULTS WHILE NAVIGATING A STRONG 2022 COMPARISON $301 $257 $229 $225 $183 $99 $91 $82 $78 2018 2019 2020 2021 2022 Q3 2022 Q3 2023 First Nine First Nine Months 2022 Months 2023 Locations 289 87 1,537 96 261 460 Acquired: 2 Adjusted EBITDA1 ($ i
Slide 5: Continued Strong In-Store Performance
Continued Strong In-Store Performance YEAR OVER YEAR GROWTH IN SALES AND MARGIN Merchandise Sales Merchandise Contribution and Margin Two Year Stacks 180.0 ~50 bps 31.7 ~60 bps 160.0 140.0 30.6 31.2 ~110 bps 120.0 Margin improvement Axis Title 100.0 5.3% 80.0 60.0 7.9% CAGR 40.0 9.9% CAGR Same Store
Slide 6: Focus on Three Key Pillars: Loyalty
Focus on Three Key Pillars Loyal Members are 1 LOYALTY Valuable Members Growing our fas REWARDS® Loyalty Program ~1.85 Million • Develops and enhances our relationship with our customers Enrolled Loyalty Members1 • Drives more trips with our existing customers • Attracts new loyal customers $41 Aver
Slide 7: Focus on Three Key Pillars: Investments in Loyalty
Focus on Three Key Pillars Deliberate 1 LOYALTY Investments in Loyalty • March 28, 2023: Sales to enrolled loyalty members represented 19.3% of total merchandise − Upgraded fas REWARDS® loyalty sales for the quarter1 program launched • Enrolled loyalty merchandise sales mix has increased over time •
Slide 8: Focus on Three Key Pillars: Core Destination Categories
Focus on Three Key Pillars 2 CORE DESTINATION CATEGORIES Core Destination Categories1 represented 53% of merchandise 2.4% contribution this quarter Same-store sales growth • Concentration allows us to focus our initiatives on categories that we believe will in Q3 2023 vs. Q3 2022 move the needle • D
Slide 9: Focus on Three Key Pillars: Food and Beverage
Focus on Three Key Pillars 3 FOOD AND BEVERAGE In October 2023, we announced the addition of Richard Guidry to a newly-created role as GPM’s Senior Vice President of Food Service • Richard has a distinguished track record and long experience in food service ARKO’s food strategy will be a multi-year
Slide 10: Continued growth in retail fuel contribution
Continued growth in retail fuel contribution ARKO REMAINS FOCUSED ON MAXIMIZING FUEL CONTRIBUTION DOLLARS • In retail, we maintained robust margins while navigating a national, industry-wide decrease in fuel demand • We believe our core convenience store scale enables us to benefit relative to the t
Slide 11: Added contribution from recent transactions
Added contribution from recent transactions SINCE THE BEGINNING OF Q3 2022, ARKO HAS CLOSED 5 TRANSACTIONS CLOSED: Dec 6, 2022 CLOSED: Mar 1, 2023 CLOSED: Jun 6, 2023 CLOSED: August 15, 2023 ARKO CONSIDERATION: ~$25 million ARKO CONSIDERATION: ~$61 million2 ARKO CONSIDERATION: ~$25 million ARKO CONS
Slide 12: Strong Liquidity for Continued Growth
Strong Liquidity for Continued Growth OVER $2 BILLION $204M Cash and cash equivalents Quarterly dividend announced for Q4 2023 Available liquidity for continued M&A activity $0.03/SHARE ~$623M REPURCHASED Approximate availability under our lines of credit, as $11.6M of September 30, 2023 In shares u
Slide 13: Third Quarter Financial Recap
Third Quarter Financial Recap 2 KEY TAKEAWAYS $91.2 Million in Adjusted EBITDA • Closing of fifth acquisition since the beginning of Q3 2022 Q3 2023 compared to Q3 2022 • Record growth of enrolled loyalty members RETAIL • Continually expanding merchandise contribution margin 13.6% 50bps 3.2% Strong
Slide 14: Appendix: Disciplined control over retail operating expenses
Appendix: Disciplined control over retail operating expenses RETAIL OPERATING EXPENSE WATERFALL • Total retail operating expenses grew approximately $30 million, or 17.2% Q3 2023 Retail OpEx 17.2% GROWTH & M&A • As we continue to acquire new businesses and attractive returns, our expense base Growth
Slide 15: Appendix: Fuel contribution
Appendix: Fuel contribution ARKO’S RELATED SEGMENTS PROVIDE LEVERAGE, DIVERSIFICATION AND MULTIPLE AVENUES FOR GROWTH ARKO Consolidated Wholesale Q3 2023 COMPARED TO Q3 2022 Q3 2023 COMPARED TO Q3 2022 Fuel Contribution: $163m $7m / 4.8% Fuel Contribution: $26m $0.2m / 0.7% Gallons Sold: 251 million
Slide 16: Appendix: Reconciliation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA, net of incremental bonuses
Appendix: Reconciliation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA, net of incremental bonuses 16
Slide 17: Appendix: Reconciliation of Quarles Adjusted EBITDA
Appendix: Reconciliation of Quarles Adjusted EBITDA Quarles Adjusted EBITDA for the nine months ended September 30, 2023 of approximately $24 million is calculated using (i) a total of $24.6 million of Operating Income presented in the financial information tables detailed in the Wholesale and Fleet
Slide 18: A Family of Community Brands
A Family of Community Brands ARKO PRESERVES LONG-ESTABLISHED LOCAL COMMUNITY BRAND EQUITY