Crossamerica Partners Lp · NYSE:CAPL
Crossamerica Partners Lp — Investor Presentation (January 2016)
29 slides from Crossamerica Partners Lp's investor presentation, Jan 7, 2016
Slide 1: Investor Update January 2016
Investor Update January 2016
Slide 2: Safe Harbor Statements
Investor Update January 2016 Safe Harbor Statements Forward-Looking Statements Statements contained in this presentation that state the Company’s and Partnership’s or management’s expectations or predictions of the future are forward-looking statements and are intended to be covered by the safe harb
Slide 3: New Real Estate Venture
Investor Update January 2016 3 NEW REAL ESTATE VENTURE
Slide 4: Unlocking Asset Potential to Fund Growth and Create Stockholder Value
Investor Update January 2016 Unlocking Asset Potential to Fund Growth and Create Stockholder Value 4 FUEL STORE OPERATIONS REAL ESTATE New Real Estate Venture
Slide 5: Creating Stockholder Value By Pursuing a New Real Estate Venture
Investor Update January 2016 Creating Stockholder Value By Pursuing a New Real Estate Venture • Provides an innovative solution to fund CST’s aggressive large format NTI program and acquisitions • More than doubles ROI of new large format stores by reducing CST’s capital requirements • Proposed vent
Slide 6: Improving U.S. New To Industry (NTI) Returns
Investor Update January 2016 Improving U.S. New To Industry (NTI) Returns Illustrative Economics - Before and After Real Estate Venture Before Venture Venture Impacts After Venture Construction Cost: Land & Building $4,000,000 ($4,000,000)* $0 Equipment 1,500,000 1,500,000 Total $5,500,000 (A) $1,50
Slide 7: Improving New To Industry (NTI) Returns Pro Forma Illustrative Impact
Investor Update January 2016 7 2013-2015 2016-2020 EBITDA $64.4 $161.0 Net Investment $430.0 $430.0 Net Cash Flow ROCE 15% 38% $64.4 $161.0 Potential Uplift From Accelerated 2016-2020 U.S. NTI Growth(C) (EBITDA dollars in millions) • The real estate venture dramatically changes the return profile on
Slide 8: Business Overview
Investor Update January 2016 8 BUSINESS OVERVIEW
Slide 9: CST Brands Overview – A Leading C-Store Platform
Investor Update January 2016 • One of the largest independent wholesalers and retailers of motor fuels and convenience merchandise in North America • Strong urban footprint, supplying and retailing motor fuel in nearly 1,900 locations in the U.S. and eastern Canada – TTM CST revenues through Sept. 3
Slide 10: CST Brands: Looking Back
Investor Update January 2016 • Pre-spin – Focus on Maintaining Status Quo • Built less than 10 new stores per year in 5 years prior to spin • Non-sustaining CapEx was less than $50 million per year • Minimal dollars spent on advertising • Only 2 retail acquisitions in prior 10 years – Focus on Fuel
Slide 11: CST Brands: Setting a New Path
Investor Update January 2016 • Objective since the spin has been to grow stockholder value by growing operating profit with a higher percentage coming from more stable non-fuel operating profit in the following ways: CST Brands: Setting a New Path… Acquisitive Growth & Portfolio Optimization • Grow
Slide 12: Recent Results Demonstrate Success of Plan
Investor Update January 2016 Recent Results Demonstrate Success of Plan Overall Results 12 • More than a 40% improvement in Gross Profit Dollars (GPD) per store over the last 12 months compared to 2012 – Outperformed peers and market expectations with fuel margin capture Note: Merchandise margin and
Slide 13: 2020 Vision
Investor Update January 2016 2020 VISION 13
Slide 14: Grow Inside Sales, Grow Margins
Investor Update January 2016 Grow Inside Sales Grow Margins • Implement enhanced advertising/marketing plan in key markets following store re-branding • Expand grocery fill-in offering – expected to be implemented in 200 stores by end of 2016 – Enhances large store product mix – Includes perishable
Slide 15: Enhanced Gross Profit From Merchandise Growth
Investor Update January 2016 30% 70% Enhanced Gross Profit From Merchandise Growth Q3’15 2020 Vision U.S. Canada Gross Profit Contribution Note: Non-fuel includes Merchandise and “Other” Categories; Figures exclude impact of California network and Flash Foods acquisition 22 percentage point increase
Slide 16: Organic Growth
Investor Update January 2016 Organic Growth 2013 2014 2015 2016 2017 - 2020 Canada 7 10 11 13 88 U.S. 15 28 31 48 238 Cumulative Total 22 60 102 163 489 0 100 200 300 400 500 600 N ew S to re C ou n t 75 - 100 225 - 250 10 - 15 45 - 50 By the end of 2020, NTIs are expected to make up over 30% of the
Slide 17: New-To-Industry (NTI) Store Characteristics
Investor Update January 2016 New-To-Industry (NTI) Store Characteristics • Grow organically through construction of larger format NTIs • Optimize store portfolio by increasing percentage of larger format stores • Larger format U.S. stores generate approximately double the merchandise sales and fuel
Slide 18: Proven Track Record of Acquisitive Growth
Investor Update January 2016 Asset Date Acquirer Purchase Price (1) Stores Gallons (1) 2016 CAPL $49 31 27 2016 CST 425 164 290 2015 CAPL 45 41 36 2015 CAPL 85 64 68 2015 CST & CAPL 64 22 41 2014 CST & CAPL 78 32 40 Proven Track Record of Acquisitive Growth Acquisition Strategy • CST and CrossAmeric
Slide 19: Strategic Review of California Operations
Investor Update January 2016 California Network Remaining U.S. Network Average Store Size (Sq. Ft.) 1,320 2,637 Average Lot Size (Acres) 0.72 1.13 70% 30% Strategic Review of California Operations Exploring strategic options for California network to enhance stockholder value and fund future growth
Slide 20: Acquisitive Growth: Flash Foods Case Study
Investor Update January 2016 • 164 convenience stores with Flash Foods-branded fuel – Average store size: ~3,500 SF; Average lot size: ~56,000 SF • Provides entry into Georgia and Florida markets • 21 branded Quick Service Restaurants • 90,000 SF merchandise distribution center in Alma, GA • Approxi
Slide 21: Strategic Value of the CrossAmerica Relationship
Investor Update January 2016 • Sponsored MLP provides a growth vehicle to fund organic expansion and partner for strategic acquisitions • CST cash flows benefit from distributions on CrossAmerica common units while CST participates in long-term CrossAmerica value creation – CrossAmerica is currently
Slide 22: CrossAmerica Partners Update
Investor Update January 2016 CROSSAMERICA PARTNERS UPDATE 22
Slide 23: Partnership Overview
Investor Update January 2016 Partnership Overview • Leading motor fuel wholesale distributor, convenience store lessor and c-store operator – Distribute annually over 1 billion gallons – 17.5% equity interest in CST Brands’ wholesale fuels business – CST Brands’ wholesale fuels business is comprised
Slide 24: Continuing Accretive Growth
Investor Update January 2016 Continuing Accretive Growth 24 • Over 85% owned locations • Located in proximity with FreedomValu stores • Large stores with good inside sales • Holiday franchise brings strong brand recognition and optionality after three years 31 Company Operated $48.5 Million Purchase
Slide 25: Strong Financial Position
Investor Update January 2016 Strong Financial Position • Declared third quarter distribution of $0.5775 per unit – 1.5 cent per unit increase over second quarter – Continue to target 2015 annual per unit distribution growth of 7-9% – Expect 2015 annual Coverage Ratio over 1.0x, with a long-term targ
Slide 26: Strategic Vision
Investor Update January 2016 • Continue to execute on core competencies – Strong wholesale, retail operations and real estate business units – Acquisitive growth at accretive multiples • Target annual third party growth between $50 and $200 million, depending on market conditions • With CST, can str
Slide 27: Stockholder Value
Investor Update January 2016 STOCKHOLDER VALUE 27
Slide 28: Committed to Enhancing Stockholder Value
Investor Update January 2016 Committed to Enhancing Stockholder Value • Announced pending acquisition of Flash Foods • Announced strategic review of California network (76 stores) • Announced Real Estate Venture initiative • Returned approximately $100 million to stockholders in the last twelve mont
Slide 29: Investment Summary
Investor Update January 2016 Investment Summary Since the spin from our former parent we have: • Improved: Steadily increased fuel and inside margins with focus beyond just fuel volume • Grown: Constructed 98 NTIs across 7 states and provinces • Expanded: Acquired business and human capital through
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