Propel Funeral Partners Ltd. · ASX:PFP
Propel Funeral Partners — FY2023 Earnings Presentation
35 slides from Propel Funeral Partners's earnings presentation, Aug 24, 2023
Slide 1: FY23 Full Year Results
FY23 Full Year Results Investor Presentation 24 August 2023 1
Slide 2: 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 3: Presenters
Presenters Albin Kurti Lilli Gladstone Fraser Henderson Managing Director Chief Financial Officer Head of M&A, General Counsel and Company Secretary 3
Slide 4: Agenda
Agenda 1. Key highlights of FY23 2. Company overview 3. FY23 financial results detail 4. Industry trends and acquisitions 5. Summary, outlook and guidance 6. Q&A Appendices 4
Slide 5: 1. Key highlights of FY23
1. Key highlights of FY23 PROPEL FUNERAL PARTNERS PrP
Slide 6: Key highlights of FY23
Key highlights of FY23 Revenue Funeral Volumes Average Revenue Per Funeral 1 TRADING1 $168.5m 18,029 $6,398 T 16.0% T 9.0% T 6.0% (comparable up ~7%) Operating EBITDA Operating NPAT Cash Flow Conversion 2 EARNINGS1 $46.0m2 $20.9m2 95.4% T 18.0% T 17.9% 480 bps Dividend Gearing Ratio Funding Capacity
Slide 7: 2. Company Overview
2. Company Overview PROPEL FUNERAL PARTNERS PrP
Slide 8: Geographic Presence
Geographic Presence 180 operating locations1 (107 owned / 73 leased), including 37 cremation facilities and 9 cemeteries 1 August 2013 2 August 2023 Queensland Queensland 1 Western 29 Australia South Australia 14 44 New South Wales 12 1 ACT 19 Victoria 43 New Zealand Tasmania 18 Geographic footprint
Slide 9: Brand Portfolio
Brand Portfolio Diversified single and multi-site brands with strong local community awareness Australia NZ Pinegrove Funerals ismore Funeral Services Acquisitions completed or announced since 1 July 2022. 9
Slide 10: Volume and Revenue Growth
Volume and Revenue Growth Propel has maintained a strong growth trajectory 1 Funeral volumes 2 Revenue ($m) 18,029 168.5 p 9.0% 16,537 p 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 11: Earnings Growth
Earnings Growth Propel has maintained a strong growth trajectory 1 Operating EBITDA ($m) 2 Operating NPAT ($m) 20.9 46.0 p 17.9% p 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 12: Average Revenue Per Funeral Growth
Average Revenue Per Funeral Growth Compound annual growth rate (CAGR) of ~3.0% since FY14 $6,398 p ~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 12
Slide 13: 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 13
Slide 14: Performance Summary Since IPO
Performance Summary Since IPO Propel’s share price has outperformed the ASX300 and its listed domestic peer since the IPO in November 2017 Relative share price and index performance 85% Total shareholder return4 Propel 65% ~71% 45% +55.2% 1 25% ASX300 Total shareholder value accretion5 5% +20.5%2 -1
Slide 15: 3. FY23 Financial Results Detail
3. FY23 Financial Results Detail
Slide 16: Financial Summary
Financial Summary Income Statement1 Comments $ million FY23 FY22 Revenue Total revenue 168.5 145.2 • Increased 16.0% on FY22 to $168.5m, primarily due to: Gross profit 118.1 102.5 – comparable Average Revenue Per Funeral growth of ~7% and comparable funeral …margin 70.1% 70.6% volume growth of ~1% T
Slide 17: Revenue Bridge and Operating EBITDA Margin
Revenue Bridge and Operating EBITDA Margin Propel expanded its Operating EBITDA margin by 45 bps, despite higher inflation Operating EBITDA margin 26.8%1 27.3% Comments Total: Organic: Operating EBITDA margin: Funeral Volumes Funeral Volumes p 45 bps on FY22, positively impacted by: p ~9% on FY22 in
Slide 18: Cash Flow
Cash Flow Statutory actuals Comments $ million FY23 FY22 Receipts from customers (inc GST) 183.6 158.2 Operating activities Payments to suppliers and employees (inc GST) (138.8) (116.4) • Operating Cash Flow increased 7.2% on FY22 44.9 41.9 • Cash Flow Conversion remained strong at 95.4% Income taxe
Slide 19: Balance Sheet
Balance Sheet Statutory actuals Comments $ million FY23 FY22 Cash and cash equivalents 46.9 7.9 Cash and net debt position Contract assets 64.5 53.1 • $46.9m of cash (30 June 2022: $7.9m) Other current assets 17.8 13.1 • $93.7m of net debt1 (30 June 2022: $40.3m) Total Current Assets 129.2 74.1 • $1
Slide 20: Capital Management
Capital Management Available funding capacity of ~$87 million, significant debt covenant headroom and materially higher dividends Funding Capacity (as at 30 June 2023) Dividend summary (cps) • Available funding capacity of ~$87m: • FY23 fully franked dividends totalled 14.00 cps (FY22: 12.25 cps) $
Slide 21: 4. Industry Trends and Acquisitions
4. Industry Trends and Acquisitions
Slide 22: 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 23: 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 24: 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 25: 5. Summary, Outlook and Guidance
5. Summary, Outlook and Guidance
Slide 26: 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 (>15 fold increase in Revenue and Operating EBITDA since FY15) • Consistent growth in key operating metrics (funeral vo
Slide 27: Outlook and Guidance
Outlook and Guidance Given ~$121m of acquisition commitments in the past ~12 months, Propel provides the following FY24 guidance: 1 FY24 guidance range: Low High Revenue ($m) 220.0 High Revenue ($m) 200.0 220.0 168.5 200.0 Low Operating EBITDA ($m) 54.0 60.0 145.2 120.4 110.8 95.1 2 Key assumptions
Slide 28: 6. Q&A
swe ee % Ze re PROPEL 6. Q&A FP P
Slide 29: Appendices
Appendices PROPEL FUNERAL PARTNERS PrP
Slide 30: Definitions
Definitions Adjusted Effective Interest Rate means the average interest rate on senior debt, including the interest rate swap (where relevant) and establishment fees but excluding the commitment fee on undrawn debt. Adjusted Effective Tax Rate means income tax expense divided net profit before tax,
Slide 31: Financial Summary
Financial Summary Income Statement1 $ million FY23 FY22 Statutory Statutory Total revenue 168.5 145.2 Gross profit 118.1 102.5 …margin 70.1% 70.6% Total operating costs (72.1) (62.9) Operating EBITDA 46.0 39.6 …margin 27.3% 27.3% Depreciation (11.4) (10.3) Operating EBIT 34.6 29.3 …margin 20.5% 20.2
Slide 32: Income Statement Analysis
Income Statement Analysis1 Comments $ million FY23 FY22 Funeral operations 148.1 127.5 Revenue segments: Cemetery, crematoria and memorial gardens 18.5 15.4 • 87.9% generated from funeral operations (FY22: 87.8%) Other trading revenue 2.0 2.3 • 11.0% generated from cemetery and memorial gardens (FY2
Slide 33: NPAT to Operating NPAT Reconciliation
NPAT to Operating NPAT Reconciliation FY23 FY22 FY22 $ million Statutory Pro forma Statutory Net profit/(loss) after income tax 19.0 16.0 (0.3) Add: Acquisition and transaction costs 1.6 1.1 1.5 Add: Net other income and expenses 0.2 0.1 0.1 Add: Net financing charge on pre-paid contracts 0.8 0.8 0.
Slide 34: Distributable Earnings and Dividend
Distributable Earnings and Dividend Reconciliation $ million FY23 FY22 Net profit/(loss) after tax 19.0 (0.3) Distributable Earnings calculation Acquisition and transaction costs 1.3 1.1 Net financing charge on prepaid contracts 0.8 0.8 Termination fee - 10.5 Share based payment revaluation expense
Slide 35: Propel Funeral Partners
PROPEL FUNERAL PARTNERS PrP
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