Propel Funeral Partners Ltd. · ASX:PFP
Propel Funeral Partners — Shareholder Meeting (November 2021)
51 slides from Propel Funeral Partners's shareholder meeting presentation, Nov 18, 2021
Slide 1: 2021 Annual General Meeting
ASX ANNOUNCEMENT 18 November 2021 2021 Annual General Meeting Attached are the addresses and accompanying presentation to be delivered by the Chairman and Managing Director at the 2021 Annual General Meeting of Propel Funeral Partners Limited (Company) (AGM) commencing today at 9.30am (Sydney time).
Slide 2: Chairman's and Managing Director's Addresses
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses PROPEL FUNERAL PARTNERS LIMITED Thursday, 18 November 2021 (9.30am) 2021 Annual General Meeting Address from the Chairman, Brian Scullin: Slide 3 Good morning everyone. I’m Brian Scullin, Independent Chairman and Non-Exec
Slide 3: Chairman's introduction and meeting attendees
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Also online are: • Lilli Gladstone, Propel’s Chief Financial Officer; • our audit partner from Nexia, Lester Wills, who is here to address any questions you may have of him; and • representatives from Link and Mont Lawyer
Slide 4: FY21 results and management internalisation
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses territories of Australia and in New Zealand, including regional and metropolitan markets, delivered growth and resilience in earnings and operating cash flows in FY21, which Albin will discuss in more detail shortly. The
Slide 5: SPP update and meeting process
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses I thank all shareholders who submitted applications under the SPP for their ongoing support of Propel. After today’s AGM and following relevant confirmations from the Company’s share registry provider, the Company will re
Slide 6: Proxy votes received
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Address from the Managing Director, Albin Kurti: Slide 8 Thanks Brian. Good morning everyone, thanks for joining. Although COVID-19 related restrictions are easing and we have reasons to be cautiously optimistic about the
Slide 7: FY21 overview and dividends
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses From a capital management perspective: • as Brian mentioned, total dividends for the year were 11.75 cents per share, up 17.5% on the prior year; • in August, the Company announced it had expanded its senior debt faciliti
Slide 8: Managing Director's remarks on COVID-19
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses • Average Revenue Per Funeral growth across Propel’s network returned to pre COVID-19 levels, which is encouraging. Funeral volumes were also impacted. During FY21, particularly in the first half, death volumes were below
Slide 9: Management internalisation
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Shareholders voted overwhelmingly in favour of a proposal to internalise the senior management functions of the Company, with the two shareholder resolutions being carried with over 98% of votes in favour. In summary, the
Slide 10: FY21 operating and financial highlights
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Slide 16 As you can see on the left of this slide, the Company performed over 13,900 funerals in FY21, up 4.6%. The chart on the right shows that Propel generated revenue of $120.4 million in FY21, up 8.7%. Slide 17 In te
Slide 11: COVID-19 impacts on trading
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Slide 21 The industry is highly fragmented in Australia and in New Zealand, with Propel the second largest in both countries. In the last three calendar years, Propel’s estimated market share in Australia has increased mo
Slide 12: Long-term growth positioning
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Slide 24 Propel continues to be well positioned to generate sustainable long-term growth and value creation. We operate in a highly fragmented and essential service industry, with assets and social infrastructure that are
Slide 13: Funeral restrictions and recovery
Propel Funeral Partners Limited – Chairman’s and Managing Director’s Addresses Thankfully, funeral attendee limits have eased significantly in recent weeks in NSW and Victoria and we expect funeral restrictions in Auckland will continue to ease, as the vaccination rate increases. Our experience sinc
Slide 14: 2021 Annual General Meeting
2021 Annual General Meeting 18 November 2021
Slide 15: Chairman's introduction
1. Chairman’s introduction
Slide 16: Brian Scullin
BRIAN SCULLIN Independent Chairman & “Propel is focussed on a clearly defined growth Non-Executive Director strategy to acquire social infrastructure and assets which operate within the death care industry in Australia and New Zealand.” Berry Funeral Directors – Adelaide, South Australia 3
Slide 17: Your board
Your board Focussed on delivering for stakeholders Brian Scullin Fraser Henderson Independent Chairman and Non-Executive Director (NED) Executive Director – Head of M&A and – Chair of Tasmanian Development Board, Macquarie Point Development General Counsel/Company Secretary Corporation – Co-founder
Slide 18: Items of business
Items of business 1. The Chaiman’s introduction 2. Presentation from the Managing Director 3. Formal business and resolutions 4. Shareholder questions 5
Slide 19: Proxies received prior to the cut-off time
Proxies received prior to the cut-off time A total of 218 valid proxy forms were received, and respective shareholdings were accumulated and are summarised below: Resolution For Open Against Abstain 2 54,218,775 2,537,839 69,182 1,183,760 3 38,810,864 2,537,839 12,155 16,648,698 4 38,422,072 2,533,4
Slide 20: The Chairman's introduction
The Chairman’s introduction 1. Continued growth and resilience in FY21 2. Dividends: • 11.75 cents per share fully franked in connection with FY21 • 39.65 cents per share fully franked since IPO 3. Completion of management internalisation: • overwhelming shareholder support and positive market respo
Slide 21: Presentation from the Managing Director
2. Presentation from the Managing Director
Slide 22: Albin Kurti
ALBIN KURTI “FY21 was another record year for Propel, which Managing Director continued its track record of delivering revenue and earnings growth despite COVID-19 impacts.” Berry Funeral Directors – Adelaide, South Australia Dils Funeral Services – Auckland, New Zealand 9
Slide 23: Key highlights
Key highlights 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 Dividends1 Net Leverage Ratio3 Funding
Slide 24: 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 25: 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 26: 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 $15.0 mill
Slide 27: Geographic presence
Geographic presence 138 locations (76 owned / 62 leased), including 32 cremation facilities and 9 cemeteries August 2013 November 2021 Queensland Queensland 1 Western 25 Australia South Australia 13 33 New South Wales 4 1 ACT 16 Victoria 27 New Zealand Tasmania 19 Geographic footprint is difficult t
Slide 28: Brand portfolio
Brand portfolio Diversified single and multi-site brands with strong local community awareness Australia New Zealand Pinegrove Funerals ismore Funeral Services Completed/announced during and since FY21 15
Slide 29: Volume and revenue growth
Volume and revenue growth Propel has maintained a strong growth trajectory despite COVID-19 impacts Funeral volumes Revenue ($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 30: 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 17
Slide 31: 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 $4,899 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 1 1 July 2019 to 31 March 2020 18
Slide 32: Cash Flow Conversion
Cash Flow Conversion Cash Flow Conversion has been consistently strong, averaging ~99% since FY15 104.0% 103.4% 101.8% 98.9% 97.4% 36.9 10.2% 96.5% 33.5 93.7% 23.1 20.6 12.2 5.4 3.2 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Operating Cash Flow ($m) Cash Conversion 19
Slide 33: 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 34: Market share estimate
Market share estimate (funeral volumes) Propel has increased its market share in the highly fragmented Australian funeral industry CY151 CY202 InvoCare InvoCare ~24.6% ~22.6% Others Others ~74.2% ~70.4% ~1.2% ~7.0% 1 Note: 159,052 actual deaths (ABS data) for market size, 1,920 funerals performed by
Slide 35: 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 36: Capital management
Capital management Propel’s proforma funding capacity has increased to ~ $150 million, with no near term debt maturities Senior Debt Facility Limits/Maturity Proforma Funding Capacity $200m $ million Debt facility limit at 30 June 2021 150.0 $150m Net Debt as at 30 June 2021 1 (79.0) $50m Subsequent
Slide 37: 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 • the growing and ageing populations in Austr
Slide 38: Formal business and resolutions
3. Formal business and resolutions
Slide 39: Financial report and auditors' report
Formal business: Item 1 Item 1: Financial report, directors’ report and auditors’ report “To receive and consider the Company’s financial report, directors’ report and auditor’s report for the year ended 30 June 2021.” Note: there is no requirement for shareholders to approve these reports. 26
Slide 40: Re-election of Brian Scullin
Formal business: Item 2 Item 2: Re-election of existing Director “That Mr Brian Scullin, being a director of the Company who retires by rotation under rule 6.7(b) of the Company’s constitution, and being eligible, is re-elected as a director of the Company.” 27
Slide 41: Re-election of Fraser Henderson
Formal business: Item 3 Item 3: Re-election of existing Director “That Mr Fraser Henderson, being a director of the Company who retires by rotation under rule 6.7(b) of the Company’s constitution, and being eligible, is re-elected as a director of the Company.” 28
Slide 42: Adoption of remuneration report
Formal business: Item 4 Item 4: Resolution to adopt the remuneration report “That the remuneration report that forms part of the director’s report of the Company for the financial year ended 30 June 2021 be adopted.” 29
Slide 43: Non-executive director remuneration
Formal business: Item 5 Item 5: Remuneration of Non-Executive Directors “That in accordance with Listing Rule 10.17 of the Listing Rules of the ASX Limited and rule 6.5(a) of the Company's constitution, the total aggregate annual remuneration payable to non-executive directors of the Company be incr
Slide 44: Financial assistance resolution
Formal business: Item 6 Item 6: Resolution relating to the giving of financial assistance “That the Company approve the transactions described in the Explanatory Memorandum (which forms a part of the proposed resolution in this item 6) and all elements of those transactions that may constitute finan
Slide 45: Ratification of share issue
Formal business: Item 7 Item 7: Resolution relating to the ratification of the issuance of ordinary shares (Berry Funeral Directors) "That, for the purposes of Listing Rule 7.4 and for all other purposes, approval is given to ratify the prior issue of a total of 52,546 fully paid ordinary shares in
Slide 46: Shareholder questions
4. Shareholder questions
Slide 47: Votes to be counted
Votes to be counted PROPEL FUNERAL PARTNERS 34 PrP
Slide 48: Meeting close - Thank you
Meeting close - Thank you PROPEL FUNERAL 4. PARTNERS 35 PrP
Slide 49: 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 50: 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 51: End slide
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Propel Funeral Partners — Shareholder Meeting (November 2021) on 6ix