Ferrellgas Partners, L.p. · OTC:FGPR
Ferrellgas Partners, L.p — Investor Presentation (April 2020)
24 slides from Ferrellgas Partners, L.p's investor presentation, Apr 7, 2020
Slide 1: Ferrellgas Investor Presentation April 2020
FERRELLGAS INVESTOR PRESENTATION April 2020
Slide 2: Disclaimer: Forward Looking Statements
DISCLAIMER Forward Looking Statements • Statements included in this presentation include forward - looking statements. These forward - looking statements are identified as any statement that does not relate strictly to historical or current facts. These statements often use words such as “anticip at
Slide 3: Company Overview
COMPANY OVERVIEW PG 3
Slide 4: Company highlights and assets by the numbers
• The nation’s second - largest retail marketer 1 and leading distributor of propane and related accessories to residential , industrial, and agricultural customers throughout the U.S . • Founded in 1939 – 80 th anniversary of operations; a trusted consumer brand to millions of Americans • Corporate
Slide 5: Recent and Ongoing Strategic Initiatives
RECENT AND ONGOING STRATEGIC INITIATIVES PG 5 Phase 1 (2017 - 2019+) Phase 2 (current) Return to core propane business and focus on growing customer base Focus on efficiencies and maximizing profitability while continuing to grow the business Reverse prior decline with organic growth of customer bas
Slide 6: Strong Underlying Organic Business Growth
STRONG UNDERLYING ORGANIC BUSINESS GROWTH PG 6 Propane sales 1 evolution (mm gallons) Source: Company financials; Note: Fiscal year as of July 31; 1 Propane volumes include sales to end users, field resellers, and Blue Rhino clients Number of customers (‘000) 676 751 791 789 654 668 693 729 500 550
Slide 7: Ferrellgas Customer Overview
FERRELLGAS CUSTOMER OVERVIEW PG 7 • Organically grew customer base from 654,000 to 729,000 over the past three years • Focus on increasing density of residential customers • Increase margins by delivering to customers in the same neighborhood • Leverage national distributor network for commercial an
Slide 8: Financial Policy
FINANCIAL POLICY • Near term focus on reducing leverage and maximizing liquidity • Efficiently manage the business to generate cash flow by managing costs, increasing margins and more prudently spending capital • Expected to spend within cash flow for any near - term growth project or any acquisitio
Slide 9: Key Business Highlights
KEY BUSINESS HIGHLIGHTS PG 9
Slide 10: Key Business Highlights
KEY BUSINESS HIGHLIGHTS PG 10 Leading, national footprint with extensive logistics capabilities and geographic diversity Large, fragmented addressable market with growing market share Strong, long - term relationship with both suppliers and diverse, blue - chip customers Proven track record of opera
Slide 11: National Footprint Provides Competitive Advantage
NATIONAL FOOTPRINT PROVIDES COMPETITIVE ADVANTAGE PG 11 Asset map Ferrellgas Service Center Ferrellgas Service Unit Cobrand Service Unit X Blue Rhino Service Unit 1 Footprint highlights U.S. second largest retail marketer of propane, with: x ~864 retail locations x ~730,000 retail customers x ~57,00
Slide 12: Diverse Business Mix
DIVERSE BUSINESS MIX • Ability to serve customers in all 50 states, District of Columbia, and Puerto Rico • Broad geographic distribution reduces exposure to regional weather and economic patterns, improves stability of cash flows • Large distribution network lessens supply disruptions during demand
Slide 13: Large, Fragmented Addressable Market
LARGE, FRAGMENTED ADDRESSABLE MARKET Propane is an attractive clean fuel with a growing market • Propane is a basic necessity to many customers for heating and agricultural purposes • It is a clean burning, multi - use energy source • Alternative to natural gas due to its portability • Generally les
Slide 14: Pass-Through Nature of the Business Limits Commodity Price Exposures
PASS - THROUGH NATURE OF THE BUSINESS LIMITS COMMODITY PRICE EXPOSURES PG 14 3 Dual pricing structure limits commodity price exposure Suppliers ▪ FGP offers the option for clients to buy propane at fixed price ▪ Company enters into hedges on contracted volumes Fixed prices (Ferrell Secured) Floating
Slide 15: Blue Rhino Integration Provides a Seasonal Hedge on Sales Volumes
BLUE RHINO INTEGRATION PROVIDES A SEASONAL HEDGE ON SALES VOLUMES PG 15 3 • Founded in 1994 by Billy Prim as a propane tank exchange business • Acquired by Ferrellgas in 2004 for a total consideration of $420 million • 20 - pound tanks used for grilling, patio heaters, and mosquito elimination devic
Slide 16: Strong Relationships with Large, Stable Supplier Base
STRONG RELATIONSHIPS WITH LARGE, STABLE SUPPLIER BASE PG 16 4 Supplier overview Relationship summary • 66 total suppliers provide 616 million gallons of propane in FY 2019 • $43mm in total product letters of credit with 30 suppliers • Top 5 suppliers provide 53% of contracted volumes in FY 2019 • So
Slide 17: Diverse, Blue-Chip Customer Base
DIVERSE, BLUE - CHIP CUSTOMER BASE PG 17 • Current customer base of ~730,000 including: • ~627,000 residential clients • ~89,000 industrial / commercial clients • ~8,900 agricultural clients • ~3,600 reseller clients • ~200 propane wholesale clients • ~1,150 Blue Rhino resellers • 69% of residential
Slide 18: Technological Enhancements Provide Competitive Advantage
TECHNOLOGICAL ENHANCEMENTS PROVIDE COMPETITIVE ADVANTAGE PG 18 Technology highlights State - of - the - art tank monitoring system ▪ FGP is implementing a new tank monitoring system that will provide cloud integration between client tanks, FGPs’ offices and field logistics ▪ Technology will help opt
Slide 19: Demonstrated Operational Excellence
DEMONSTRATED OPERATIONAL EXCELLENCE $219 $229 $230 $239 FY 2017 FY 2018 FY 2019 LTM 2020 Adjusted EBITDA 3 ($mm) Gross margin 2 ($ / gallon) Unlevered FCF 3 ($mm) $0.91 $0.88 $0.89 $0.91 FY 2017 FY 2018 FY 2019 LTM 2020 Non - acquisition capex 4 ($mm) 5 Cash conv. (% of adjusted EBITDA ) Capex (% of
Slide 20: Significant Acquisition Track Record
SIGNIFICANT ACQUISITION TRACK RECORD WITH SUBSTANTIAL INTEGRATION CAPACITIES PG 20 5 Key acquisition tenets Ferrellgas has acquired and successfully integrated over 90 companies in the past 20 years, leading to significant experience and knowledge Identification of strategic targets ▪ Fragmented mar
Slide 21: Management team
of IT at Ferrellgas Served as Senior Director of IT at Blue Rhino Senior VP of Blue Rhino Operations, CIO Mark Tucker Joined in 2006 Appointed Chief Sales Officer in 2020 Previously served as SVP of Blue Rhino Operating Division Chief Sales Officer
Slide 22: Appendix
APPENDIX PG 22
Slide 23: Summary Historical Financials
SUMMARY HISTORICAL FINANCIALS PG 23 ($mm, unless otherwise noted) FY 2017 FY 2018 FY 2019 LTM 2020 1 Customers 653,695 667,823 692,941 729,000 Growth rate (3.6%) 2.2% 3.8% 5.2% Propane volumes 2 (‘000 gallons) 671,944 745,672 786,874 785,617 Growth rate (1.7%) 11.0 % 5.5% (0.2%) Gross margin ( cpg )
Slide 24: Non-GAAP Reconciliation Schedule
FY 2017 FY 2018 FY 2019 LTM 2020 1 Adjusted EBITDA $219 $229 $230 $239 Non - acquisition capex 3 ($46) ($80) ($77) ($78) Distributions ($120) ($71) ($41) ($31) Unlevered FCF $53 $78 $112 $130 NON - GAAP RECONCILIATION SCHEDULE PG 24 FY 2017 FY 2018 FY 2019 LTM 2020 1 Net earnings (loss) ($29) ($222)
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