Murphy Usa Inc. · NYSE:MUSA
Murphy Usa — Raymond James 40th Annual Institutional Investors Conference 2019
20 slides from Murphy Usa's conference presentation, March 2019
Slide 1: Raymond James 40th Annual Institutional Investor Conference
Raymond James 40th Annual Institutional Investor Conference March 2019 Murphy USA Inc. 1
Slide 2: Cautionary Statement
Cautionary Statement This presentation contains forward-looking statements. These statements, which express management’s current views concerning future events or results, are subject to inherent risks and uncertainties. Factors that could cause actual results to differ materially from those express
Slide 3: Today's presenters
Today’s presenters Andrew Clyde, President and Chief Executive Officer • Appointed President and Chief Executive Officer of Murphy USA Jan 2013 • Leads development and execution of strategy for creating long-term shareholder value • Oversees corporate-wide strategic initiatives enabling Murphy USA’s
Slide 4: Murphy USA continues its proven and differentiated strategy
Murphy USA continues its proven and differentiated strategy • Murphy USA is uniquely positioned as a MUSA Relative Stock Performance low-cost fuel and convenience retailer Indexed From December 31, 2013 to February 26, 2019 Murphy USA Inc. • Our strategy to compete has five coherent S&P 500 Index el
Slide 5: MUSA creates value through a simple formula – and executes
MUSA creates value through a simple formula – and executes MUSA Value Creation Drivers 2013 vs 2018 Go-forward 21% total unit growth Modest Unit Growth Organic • 271 new sites • 40-50 high-return projects Growth • 59 Raze & Rebuilds per year • Format optimization * 10% total contribution $ growth Fu
Slide 6: Organic growth moderates ahead of shift in format strategy
Organic Growth Organic growth moderates ahead of shift in format strategy Estimated Store Activity 2015 - 2019 Raze & Rebuild 74 77 1 66 New Stores 10 53 Up to 20 45 21 73 27 67 Up to 25 45 26 Up to 20 2015a 2016a 2017a 2018a 2019e Total Units 1,335 1,401 1,446 1,472 1,492 Raze & Rebuild 1 11 32 59
Slide 7: Reinvestment programs enhance existing network quality
Organic Growth Reinvestment programs enhance existing network quality Raze and Rebuild Program • 59 sites completed through 2018 • Kiosks replaced with 1200/1400 sq ft stores along with more dispensers and increased fuel offer • Given the premium locations, we estimate per site unlevered IRR’s betwe
Slide 8: Fuel differentiates MUSA from its peers
Fuel Contribution Fuel differentiates MUSA from its peers Total Chain Fuel Volume (MMgal) Annual Fuel Volumes (Kgal) / Avg Store Last Fiscal Year Last Fiscal Year 9,794 2,901 NACS 2,475 Top Quartile 2,070 6,293 1,725 1,664 NACS AVG 4,232 1,085 1,050 National AVG 2,199 MUSA CASY ATD (US) Speedway MUS
Slide 9: Total fuel margins consistently generate 14-16 cpg since spin
Fuel Contribution Total fuel margins consistently generate 14-16 cpg since spin MUSA Total Fuel Margin MUSA Total Fuel Contribution CPG ($MM) Product Supply & Wholesale + RINs Product Supply & Wholesale + RINs Retail Retail 18.5 $737 $678 $686 16.4 2.7 16.4 16.2 $106 $647 15.4 $624 $616 $62 14.9 1.5
Slide 10: Volatility favors our low-cost business model
Fuel Contribution Volatility favors our low-cost business model Total Fuel and Breakeven Margin (cpg) Fuel Breakeven Margin (cpg) 2013 – 2018 PS&W plus RIN Retail Margins 25 20.0 20.6 20 18.5 17.9 18.1 16.4 16.7 16.5 16.4 16.7 16.2 16.2 14.9 15.5 15.4 15.4 15 13.8 14.0 13.9 14.0 11.4 10.1 CPG 10 5 3
Slide 11: We actively make our business more competitive
Fuel Breakeven We actively make our business more competitive Fuel Breakeven Requirement CPG (2013 – 2018) 3.2 2.6 2.3 1.3 1.2 0.8 2013 2014 2015 2016 2017 2018 (Operating expense less payment fees and rent – merchandise margins) Fuel Breakeven = Fuel Gallons Note: Operating expense includes allocat
Slide 12: Operating costs declining, bucking the industry trend
Fuel Breakeven Operating costs declining, bucking the industry trend Site Opex APSM ($K) 2013 – 2018 MUSA 44.9 45 42.2 42.1 Industry 40 38.2 36.1 35 30 25 22.4 22.3 22.1 21.4 21.0 20.8 20 15 10 5 0 2013 2014 2015 2016 2017 2018 Note: MUSA Site OPEX excludes credit card fees; Industry Site Opex sourc
Slide 13: Merchandise margins and contribution expanding
Fuel Breakeven Merchandise margins and contribution expanding Merchandise APSM GM ($K) Drivers 2013 – YTD 2018 Non-Tobacco Continuous Improvement Initiatives 30 Tobacco • Price optimization • Promotion effectiveness 25 22.6 23.1 22.5 20.4 21.3 • Product assortment by format 19.9 20 • Visual merchand
Slide 14: Murphy Drive Rewards: A unique and distinctive capability
Corporate Costs Murphy Drive Rewards: A unique and distinctive capability Murphy Drive Rewards Capabilities: • Murphy Drive Rewards is a modern, highly flexible and adaptable platform to engage with our customers in a meaningful way • Provides insight into customer behaviors and Murphy Drive Rewards
Slide 15: Capital allocation balances growth and capital returns
Shares Outstanding Capital allocation balances growth and capital returns Capital Allocation ($MM) Capital Allocation 2014 – 2018 2014 – 2018 $2,060 Retail Growth Capital $587 $973 $464 $480 $323 39% $206 $338 47% $248 $144 $191 $1,087 $52 $264 $274 $216 $194 $139 Share 8% Repurchases 6% Retail 2014
Slide 16: We have strategically added leverage to boost equity returns
Shares Outstanding We have strategically added leverage to boost equity returns Leverage Structure and Ratio 2013 to YTD 2018 Total Debt Debt / • Adding appropriate debt to the ($MM) EBITDA balance sheet allows us to 1,400 2.5x leverage business improvements 2.1x for the benefit of long-term 1,200 1
Slide 17: Through our formula, we continue to build a bright future
Through our formula, we continue to build a bright future MUSA Formula for EPS Growth MUSA Value Creation Drivers Organic Growth Disciplined Capital * Allocation Fuel Contribution Commitment Modest + to Share Organic Unit Repurchase Growth EPS Fuel Growth Breakeven − Corporate High Sustained EBITDA
Slide 18: Appendix
Appendix te DY Murphy USA Inc. “f
Slide 19: 2019 guidance
2019 guidance 2018 Guidance 2018 Actual 2019 Guidance Range Results Range Organic Growth New Stores Up to 30 26 15-20 Raze and Rebuilds Up to 25 27 20-25 Fuel Contribution Total fuel contribution ($ Millions) $575 to $700 $686 Not provided Annual retail volume (Billion gallons) 4.1 to 4.3 4.2 Not pr
Slide 20: Non-GAAP Adjusted EBITDA Reconciliation
Non-GAAP Adjusted EBITDA Reconciliation For purposes of this reconciliation, the midpoint of a range for each reconciling item was used, and therefore actual results for each of these reconciling items is expected to be higher or lower than the amounts shown above. The size of the ranges varies base
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