UGI Corporation · NYSE:UGI
UGI — BNP Paribas High-Yield and Leveraged Finance Conference 2020
22 slides from UGI's conference presentation, Jan 16, 2020
Slide 1: BNP Paribas High-Yield and Leveraged Finance Conference
BNP Paribas High-Yield and Leveraged Finance Conference January 16, 2020 1
Slide 2: Introduction
Introduction Roger Perreault Executive VP, Global LPG of UGI Corporation Paul Ladner Chief Operating Officer, UGI International Marie-Dominique Ortiz-Landazabal VP, Finance and Chief Financial Officer, UGI International 2
Slide 3: UGI International Overview
UGI International Overview Operations in 17 Countries Over 615,000 Total Customers LPG Distribution UGI INTERNATIONAL ~ 2.0 million tons 3 of LPG sold in FY 2019 Largest distributor in France, Austria, Belgium, Denmark, Luxembourg, and Hungary Over 19 million cylinders in circulation Over 527,000 bu
Slide 4: Evolution – Major Acquisitions
Evolution – Major Acquisitions 2017 2017 2015 2011 2017Italy 2010 UGI 2011 Belgium Finland 2001 (20%) 4 INTERNATIONAL Luxembourg 2004 (100%) 2010 Denmark Norway Sweden 1999 2006 Hungary Poland Netherlands Romania United Kingdom 2004Switzerland 2001France 2019: ~ 2.0 million tons 1999 Austria Czech R
Slide 5: Strategic Advantages
Strategic Advantages Largest LPG distributor in Austria, Denmark, France, Market Leader in Europe Hungary, Belgium, and Luxembourg; significant participant in Czech Republic, Norway, Poland, Slovakia, Sweden and The Netherlands LPG is a core business to UGI International’s parent, Strong Parent Supp
Slide 6: Market Leader in Europe
Market Leader in Europe UGI International is a market leader in the majority of the countries in which it operates UGI International is operating Norway Sweden in 17 countries under 7 LPG Denmark Market size: 239KT Market size: 340KT Finland brands, and is a market leader Market size: 57KT Poland Ma
Slide 7: Market Leader in Europe
Market Leader in Europe UGI International serves customers across a broad market Commercial & Residential Agriculture Autogas Aerosol Energy Industrial Growth from heating Large market off- Market demand is Strong industrial Marketing Stable market that oil conversions season dependent on customer b
Slide 8: Strong Parent Support
Strong Parent Support UGI International’s parent, UGI Corporation (NYSE: UGI), is a distributor and marketer of energy products and services including natural gas, LPG and electricity Strong track record of disciplined capital LPG distribution is a core business to deployment and meeting performance
Slide 9: Strategic Supply Assets Provide Flexibility
Strategic Supply Assets Provide Flexibility UGI International stores Import terminal - SEA Import terminal - PIPELINE LPG at various storage Import terminal - RAILCARS facilities and terminals Terminal - REFINERY Depots / Railheads / Storage Intra-Europe trade across Europe flows are increasing Hami
Slide 10: Track Record of Margin Management
Track Record of Margin Management UGI International has grown volume while maintaining stable LPG Unit Margins Historical LPG Volume (‘000 tons) Historical Revenue ($ in millions) 1,963 1,807 1,811 1,864 $2,684 $2,323 $2,372 1,351 $2,180 1,223 $1,946 $1,878 1,117 1,148 $1,789 $1,862 UGI 833 $1,489 1
Slide 11: Mechanisms for Stable Margins
Mechanisms for Stable Margins LPG Costs Hedging for LPG & EUR / USD • North and West European LPG prices are • UGI International has an LPG and commodities associated CIF ARA prices hedging strategy to protect margins for fixed • ARA: Amsterdam-Rotterdam-Antwerp – price customers (about 15% of sales
Slide 12: Key Objectives in Fiscal 2020 and Beyond
Key Objectives in Fiscal 2020 and Beyond • Achieve organic growth in cylinder business LPG • Grow bulk business • Focus on operational efficiencies UGI INTERNATIONAL • Explore opportunities to grow energy marketing 12 Business • Assess LNG distribution opportunities with a focus Development on UK an
Slide 13: Operational Efficiency
Operational Efficiency • Identified over €30 million of permanent annual savings and operational efficiencies that will be implemented by the end of Fiscal Year 2022 • Establishment of Two Centers of Excellence • Commercial Excellence – continuous improvement to customer experience • Operational Exc
Slide 14: Target a Low Leverage Profile
Target a Low Leverage Profile • UGI International’s target leverage range remains 2.0x to 2.5x • At September 30, 2019 leverage was ~2.6x (~2.0x excluding short term debt) • In August 2019, UGI International paid a dividend to its parent that was largely debt funded through its revolver • Revolver b
Slide 15: Summary Financial Performance
Summary Financial Performance Fiscal 2019 was a challenging year due to warmer weather and a weak grain drying season. Lower Adjusted Total Margins were partially offset by an aggressive reduction in operating expenses. Adjusted Total Margin1 ($ in millions) $1,043.2 $964.2 $942.1 $955.8 UGI INTERNA
Slide 16: Summary & Conclusion
Summary & Conclusion • Goal-based operational strategies provide clear path for continued growth • LPG core focus, energy marketing, acquisitions • Strategies to yield consistent earnings growth, including operational synergies • Strong market position in 17 countries under 8 brands throughout Europ
Slide 17: Appendix
Appendix 17
Slide 18: UGI Corporation Adjusted EPS
UGI Corporation Adjusted EPS (Millions of dollars, except per share amounts) Year Ended September 30, 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Non-GAAP Reconciliation: Adjusted net income attributable to UGI Corporation: Net income attributable to UGI Corporation $ 251.8 $ 245.4 $ 210.2 $ 2
Slide 19: UGI France Unit Margins
UGI France Unit Margins ($ & € in thousands, except unit margin) Year Ended September 30, 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 LPG revenues $ 1,062,561 $ 837,676 $ 887,067 $ 1,050,628 $ 1,083,666 $ 1,244,753 $ 1,169,610 $ 942,511 $ 1,160,013 $ 1,144,939 $ 1,349,884 $ 1,218,105
Slide 20: UGI International Adjusted Total Margin
UGI International Adjusted Total Margin ($ in millions) Year Ending September 30 Adjusted Total Margin 2019 2018 2017 2016 Total revenues $ 2,372.2 $ 2,683.8 $ 1,877.5 $ 1,862.1 Cost of sales (1,558.9) (1,527.2) (916.4) (866.1) French energy certificates (a) - (20.5) - - UGI Total Margin $ 813.3 $ 1
Slide 21: UGI International Adjusted EBITDA
UGI International Adjusted EBITDA ($ in millions) Year Ending September 30 EBITDA and Adjusted EBITDA 2019 2018 2017 2016 Net income attributable to UGI International, LLC $ 52.2 $ 218.2 $ 151.9 $ 129.0 Subtract net loss attributable to noncontrolling inerests (a) (0.1) (2.9) 0.2 - Income tax expens
Slide 22: European & Global LPG Market Outlook
European & Global LPG Market Outlook Industry Characteristics Global LPG Consumption (2017-2030) [mn t/yr] • High barriers to entry given significant capital investment required for cylinders, bulks, transport vehicles and storage facilities. 376 308 • Natural gas and electricity adjacencies offer s
UGI — BNP Paribas High-Yield and Leveraged Finance Conference 2020 on 6ix