Slide 1: Investor Presentation
Investor Presentation May 2022 Serving you Safely and Your Way
Slide 2: Forward-looking statements and information
Forward-looking statements and information This presentation contains certain forward-looking information within the meaning of applicable Canadian securities laws which is provided for the purpose of presenting information about management’s current expectations and plans. Readers are cautioned tha
Slide 3: Superior Plus Business Overview
Superior Plus Business Overview Superior is an industry- 3.4 billion leading North American litres total retail propane distribution company 2.1 billion litres in Canada #1 1.3 billion litres in U.S. propane distributor in Canada with ~38% market share1 ~890,000 customers 4th largest retail propane
Slide 4: Superior Plus Financial Overview
Superior Plus Financial Overview EBITDA by Segment1 Market Capitalization2 $2.4 billion 2021 Enterprise value2 $4.7 billion Distribution Leverage Ratio3 4.0x 56% 44% U.S. Propane Canadian Propane Distribution Distribution Adjusted EBITDA4 $437.2 million See End notes for further information 4
Slide 5: Investment highlights
Investment highlights 1 2 3 4 5 6 Market Leader Strong Free Growth Runway Proven Track Dynamic Capital Compelling Cash Flow Record Allocation Dividend Yield Leading propane Stable and Substantial Proven track Disciplined and Current yield distributor in the consistent FCF white-space to record of un
Slide 6: Benefits of Pure-Play Energy Distribution Platform
Benefits of Pure-Play Energy Distribution Platform EBITDA Growth Since 20161 • Superior has completed a comprehensive 5-year transformation into a pure-play energy distributor with $410 $402 $410 a major U.S. platform for continued growth (millions) $265 • Rebalanced business around highest $180 $16
Slide 7: What Makes the Propane Industry Attractive
What Makes the Propane Industry Attractive The North American propane market is attractive Pricing Model Protects Downside due to customer characteristics, sustainable free Cost plus pricing model provides for consistent, reliable cash flow cash flow and significant opportunities for growth High Swi
Slide 8: Targeting $700-$750 Million of EBITDA by 2026
Targeting $700-$750 Million of EBITDA by 2026 EBITDA from Operations1 – Projected Growth Superior is targeting $700 to $750 ($millions) million of EBITDA from Operations1, $700–$750 representing a 10% to 11% CAGR through 2026 by: Executing on acquisition growth strategy; Acquisition spending of $1
Slide 9: Demonstrated Ability to Acquire, Integrate & Capture Synergies
Demonstrated Ability to Acquire, Integrate & Capture Synergies Strong track record NGL Energy Partners LP Continuing acquisitions through COVID-19 demonstrates ability Heartland Industries to acquire annually at scale US CANADA YEAR 2017 2018 2019 2020 2021 2022 # Acquisitions 4 6 5 5 7 4 $ TEV ($m)
Slide 10: Deployed $800 Million in Capital Across 20 Transactions
Deployed $800 Million in Capital Across 20 Transactions, Targeting Post-Synergy Average Multiple Improvement of ~2.0x Summary of USPD Acquisitions (excl. NGL)1 Acquisitions Completed 20 Capital Deployed ~$800 million Acquired EBITDA2 ~$92 million Synergized EBITDA2 ~$128 million Acquired EV/EBITDA ~
Slide 11: Recent Financial Results – Q1 2022 & FY 2021
Recent Financial Results – Q1 2022 & FY 2021 Adjusted EBITDA (millions)(1) First Quarter 2022 Results(1)(2) Full Year 2021 Results(1)(2) $250.4 $398.4 $379.4 $211.6 Q1 2021 Q1 2022 FY 2020 FY 2021 Strong year over year growth Modestly higher results inline driven by acquisitions, higher with guidanc
Slide 12: Historical Results and 2022 Guidance
Historical Results and 2022 Guidance COVID-19 impact Historical Adjusted EBITDA ($m)1,2 $425 – $465 2022 Guidance $398 $373 $379 Adjusted EBITDA1 $425m – $465m $237 $159 $118 2016 2017 2018 2019 2020 2021 2022 Guidance See End notes for further information 12
Slide 13: Capital Expenditures and Free Cash Flow Conversion Profile
Capital Expenditures and Free Cash Flow Conversion Profile Superior generates robust FCF conversion of ~80%, with annual maintenance capex needs of ~$40m-$50m Historical Free Cash Flow Conversion Profile1 Capital Expenditures1 ($m) 84% 83% 79% 72% 73% $130-$150 $118 $122 $107 $30-$40 55% $24 $25 $90
Slide 14: Strong Balance Sheet Provides Efficient Financing for Growth
Strong Balance Sheet Provides Efficient Financing for Growth $750 million revolver Current leverage: 4.0x2 Weighted average pre-tax with $296 million currently undrawn1 (Long-term leverage target of 3.5x – 4.0x) cost of debt 4.4%3 Debt Maturity Profile $750m No Near-Term Maturities $540m of $500m In
Slide 15: Committed to Social Responsibility
Committed to Social Responsibility Creating long term shareholder value in a socially responsible and sustainable manner Reducing impacts on the Helping employees thrive Creating a strong safety culture Giving back to communities environment • Providing flexibility for employees’ • Working diligentl
Slide 16: Questions?
Questions?
Slide 17: Appendix
Appendix 17
Slide 18: Total Volumes and Gross Profit
Total Volumes and Gross Profit Sales Volume and • Residential and commercial (“retail”) customers represent Gross Profit by Segment1 94% of total gross profit • Residential volumes are typically more correlated to weather, so 26% Residential there is less of an impact from economic slowdowns 53% Com
Slide 19: Canadian Propane Distribution
Canadian Propane Distribution • Canadian propane distribution includes Superior Propane, Superior Gas Liquids and Volume and Gross Profit by Segment1 United Pacific Energy (“UPE”) 9% • Superior Propane is the leading propane distributor in Canada with a diversified customer 26% base and coast-to-coa
Slide 20: U.S. Propane Distribution
U.S. Propane Distribution • U.S. propane distribution includes Superior’s retail energy distribution business Volume and Gross Profit by Segment1 in the Eastern U.S., upper Midwest and California • U.S. propane distribution customer mix is less diversified than Canada and 55% gross profit is driven
Slide 21: End Notes
End Notes Slide 3 Slide 6 Slide 11 1. Canadian Source Data: Conference Board of Canada Report Dec 1. Energy Distribution EBITDA from Operations. EBITDA from 1. Adjusted EBITDA is a Non-GAAP Financial Measure. Details for 2018 – Fueled Up. US Data: LP Gas 2022 Top Propane Retailers Operations is a No
Slide 22: End Notes
End Notes Slide 14 1. As at Q1 2022. 2. Q1 2022 Leverage is based on Net Debt to Adjusted EBITDA for the Trailing Twelve Months ended March 31, 2022 excluding Specialty Chemicals segment. Leverage Ratio is a Non-GAAP Financial Measure. Details for Non-GAAP financial information is provided in Superi
Slide 23: Non-GAAP Financial Measures
Non-GAAP Financial Measures Throughout the presentation, Superior has used the following terms that are not defined by International Financial Reporting Standards (“GAAP”), but are used by management to evaluate the performance of Superior and its businesses. Since non-GAAP financial measures do not
Slide 24: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) Capital Expenditures Efficiency, process improvement and growth-related expenditures will include expenditures such as acquisition of new customer equipment to facilitate growth, system upgrades and initiatives to facilitate improvements in customer service. M