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Private and Confidential
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Applegreen plc 2015 Preliminary Results Presentation 14 th March - - PowerPoint PPT Presentation
Applegreen plc 2015 Preliminary Results Presentation 14 th March - - PowerPoint PPT Presentation
Applegreen plc 2015 Preliminary Results Presentation 14 th March 2016 Private and Confidential This presentation contains forward-looking statements. These statements have been made by the Directors in good faith based on the information
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Introduction & Highlights - Bob Etchingham Development Review – Bob Etchingham Financial Review – Paul Lynch Outlook – Bob Etchingham Q&A
Agenda 1 2 3 4 5
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Introduction & Highlights
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5 €18.3m €23.0m €28.9m 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 2013 2014 2015
30% increase in gross profit on 2014 (26.5% in constant currency)
Adjusted EBITDA1 increased 26% from €23.0m in 2014 to €28.9m in 2015
Driven by:
- Continued expansion of the estate
- Strong LFL performance
Further expansion in estate which has grown from 175 sites at 30 Jun 2015 to 200 at 31 Dec 2015
Continued investment in the development of the network with net capex of €58.8m for full year
Successful IPO raising €66.3m for the company, net of expenses
Net debt position at 31 Dec 2015 of €4.7m
Highlights
(1) EBITDA is defined as earnings before interest, tax, depreciation, amortisation and impairment charges, Adjusted EBITDA refers to normalised trading EBITDA, being EBITDA adjusted for share based payments, profit on disposal of assets, share of results of associates & non-recurring items
- Adj. EBITDA Growth
Site Growth
63 70 77 42 54 60 14 18 25 8 33 2 5 50 100 150 200 250 2013 2014 2015
- Rep. of Ireland PFS
UK PFS Service Areas Dealer USA
119 152 200
30% CAGR 26% CAGR
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Applegreen
Distinctive convenience retail offering in the forecourt sector
“Low Fuel Prices Always” price promise “Better Value Always” tailored retail offer Food and beverage focus
- mix of own and international
brands
- tailored to suit location, time of
day and customer types
43 15 10 4 8 1
Number of Food Offers at 31 Dec 2015
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Developments Review
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Service Areas
Service Area Sites fulfil at least 2 of the following 3 criteria:
Located on a motorway or trunk road
A seating area of at least 400 sq. ft.
More than one food offering
Service Area Sites
Overview
Birdhill, M7 Paulstown Motorway Service Area/M9
Other Service Areas Motorway service Areas (MSA’s)
High end stores with attractive ambiance
Café environment with 1-3 food and beverage offerings – Subway, Burger King, Chopstix
Typically brown / green field developments
On motorway with large facilities and extensive parking
At least 3 food and beverage offerings – Own brand (Bakewell & aCafé), Costa Coffee, Burger King, Subway
Greggs, Chopstix and Lavazza added in 2015
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Service Area Developments
First MSA in Northern Ireland opened in April 2015 on M2 north of Belfast, Crawley upgraded to Service Area in Q1
Two additions since year end - MSA on M1 heading south
- f Belfast opened in March, Ballymena opened in January
A further 2 MSA sites are expected to become operational in NI by the end of 2017
Developing pipeline, site secured subject to planning on A1(M), others in process
9 MSA’s operating in ROI
6 under 25 year licence from Republic of Ireland government
Opened Wicklow Service Area (M11) and Birdhill (M7) in 2014 as first company owned MSAs
Latest MSA opened at Paulstown (M9) in December 2015
4 other service areas opened in ROI during 2015
Two further service areas since year end, good pipeline in planning process Republic of Ireland UK 8 10 10 15 5 10 15 20 25 30 2014 2015
Site Numbers - Service Areas
Other Service Areas Motorway Service Areas
18 25
€18.5m €12.8m €6.5m €13.5m
2 4 6 8 10 12 14 16 18 20 2014 2015 Millions
Cap Ex - Service Areas
ROI UK
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Service Areas Sites
M2 Templepatrick (NI) Tuam Road, Galway (ROI) Paulstown, M9 (ROI) Mountgorry (ROI)
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Traditional forecourt and shop offer
Food to go either own brand / Subway
Relevant retail proposition built to reflect local demographic
Value offer in shop built on own brand and promotion
Significant rebrand / facility development opportunities
Petrol Filling Stations
Republic of Ireland
Ballinteer (ROI)
Tight retail proposition with focus on relevant product offer
- Limited grocery
- Alcohol a significant feature
Continuing rollout of food offer (mainly Subway / Greggs) delivering strong incremental contribution
Significant rebrand / facility development opportunities UK
Plainview (US) Ipswich (UK)
U.S.
5 forecourts all based in Long Island with 3 added in 2015
3 sites now rebranded Applegreen
Larger site opened in October, finalising plan for franchise partnership
In discussion to extend trial to Massachusetts with partner
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Seven new PFS sites in ROI in 2015
Three additions since year end, good pipeline
65% of estate in ROI now branded Applegreen
Ten rebrands completed during the year
Petrol Filling Station Developments
Republic of Ireland
Seven new PFS sites in UK in 2015
Three new sites since 31 December 2015, strong pipeline
24% of the UK estate now branded Applegreen
Seven rebrands completed during the year, one upgrade to Service Area UK
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Typically 5 year fuel supply agreements
Fixed margin per litre to dealer
Applegreen determines pump price
Increases the Applegreen footprint nationwide
Now accounts for 9% of ROI fuel volumes
Positive contribution to EBITDA in 2015
Dealer & Fuelcard
Dealer Fuelcard
Targeting commercial customers using greater than 500 litres per month
Most competitive fuel card on the market – no card fees / hidden charges
Online account management tool / Support team
Now accounts for 4% of ROI fuel volumes
Modest but growing earnings profile
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Financial Performance
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Profit and Loss Account
30.4% growth in gross profit leading to 25.7% growth in adjusted EBITDA
Growth in S&D in line with scale
- f business
Finance costs include FX loss on translation of Stg£ loan
Increase in admin largely reflects addition to support functions in late 2014, early 2015
Non recurring charges in 2015 comprise shareholder payment to staff and tax provision
2015 EPS calculated on expanded share capital (wtd. ave.)
2015 2014 €m €m % Var Revenue 1,081.5 937.3 15.4% Gross Profit 125.9 96.6 30.4% Selling & Distribution Costs (78.5) (61.5) Administrative Expenses (19.5) (13.1) Other income 1.0 1.0 Adjusted EBITDA 28.9 23.0 25.7% Depreciation (8.6) (6.0) Finance Costs, net (2.5) (2.5) Adjusted PBT 17.7 14.5 22.1% Tax (Adjusted) (2.1) (1.5) Adjusted PAT 15.6 13.0 20.0% Adjusted EBITDA 28.9 23.0 25.7% Share Based Payments (2.7) (0.3) Non-recurring charges (1.1) 0.7 Reported EBITDA 25.1 23.4 7.4% Adjusted EPS (cents) 22.22 21.73
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Revenue and Gross Profit Analysis
Total gross profit of €125.9m reflecting growth of 30.4% from prior year
LFL gross profit growth at constant currency of 4.6%
Strong growth in food gross profit at 49.2% and strong LFL performance.
LFL growth in non fuel revenue and gross profit at constant currency amounts to 4.5% and 6.8% respectively
Fuel gross profit increased by 1.3% on a LFL constant currency basis
L4L Growth 2015 2014 @ const curr. €m €m Growth % % Fuel Revenue 879.3 779.0 12.9%
- 12.1%
Food Revenue 67.5 46.4 45.5% 15.9% Store Revenue 134.7 111.9 20.4% 0.0% Total Revenue 1,081.5 937.3 15.4%
- 9.2%
Fuel Gross Profit 49.0 38.6 26.9% 1.3% Food Gross Profit 37.9 25.4 49.2% 18.7% Store Gross Profit 39.0 32.5 20.0%
- 1.9%
Total Gross Profit 125.9 96.5 30.5% 4.6%
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Geographical Revenue and Gross profit mix
UK as a region accounts for 28% of total gross margin for the period
Continued evolution of mix of gross profit
Food accounts for 30% of gross profit
- 36% in ROI up from 32% in 2014
- 16% in the UK compared to 8% in the
prior year
Gross Profit Mix - ROI Gross Profit Mix - UK 2015 Revenue and Gross Profit by geography
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Gross profit- Fuel
Continued volatility in oil prices creates challenges but net impact on margins is limited
Oil price changes passed through to consumer
Relative UK and ROI LFL gross profit performance explained by:
- Strong 2014 comparison in ROI
- Impact of weaker Euro reduced benefit of falling
$ oil price in ROI
No major changes in competitive fuel environment in UK or Ireland
Gross Profit Gross Profit Growth Growth LFL @ const curr. % %
Ireland 19.3%
- 0.6%
UK 37.4% 4.9% Total 26.9% 1.2%
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EBITDA Bridge
Incremental contribution from sites opened in 2014 and 2015 was €8.4m
Additional site contribution from like for like locations of €3.9m
Increase in central costs incurred to facilitate the growth of the business – 70% of that growth occurred in H1
Adjusted EBITDA Bridge
(1) Site EBITDA before allocation of central overhead
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Cashflow Summary
Continued strong cash conversion
- f 129%
Growth in working capital reflects:
- Volume growth driven by expansion
- Offset to an extent by falling oil price
IPO proceeds of €66.3m
(1)
(1) Cash Conversion is calculated using Adjusted EBITDA, Adjusted EBITDA refers to normalised trading EBITDA, being EBITDA adjusted for share based payments, profit on disposal of assets, share of results of associates & non-recurring items
2015 2014 €m €m Profit Before Tax 13.9 14.9 Non - cash Adjustments 14.3 6.0 Working Capital Movement 8.5 8.3 Taxes Paid (2.9) (2.8) Cash flows from Operating Activities 33.8 26.4 Capital Expenditure (54.8) (37.9) IPO Proceeds 66.3 0.0 Capital Contributions / Option Proceeds 1.7 0.0 Long-Term Borrowings (7.0) 11.4 Net Finance Leasing (1.3) (1.3) Net Interest Paid (2.1) (1.9) Redemption of Share Capital (1.9) Cash Flows from Financing Activities 55.7 8.2 Net increase in cash and cash equivalents 34.6 (3.3) Opening Cash & Cash Equivalents 12.3 15.3 Exchange Gains/(losses) 0.3 0.3 Closing Cash & Cash Equivalents 47.2 12.3 Cash Conversion 129% 136%
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Balance Sheet Summary
Capital Expenditure Analysis
Net debt position of €4.7m at 31 Dec 2015
2015 2014 €'m €'m Service Areas 26.4 25.0 PFS 8.8 6.2 Rebrands 7.0 5.6 Dealer / USA 4.1 1.0 Development sites 5.8 0.5 Other 6.7 9.9 Total 58.8 48.1
31-Dec-15 31-Dec-14 €m €m Non-Current Assets 187.1 135.4 Current Assets 39.6 27.5 Current Liabilities 113.4 92.2 Working Capital (73.8) (64.7) Cash and Cash Equivalents 49.3 13.8 Total Debt 54.0 60.8 Non Current Liabilities 10.3 6.0 Net Assets 98.3 17.7 Share Capital & Share Premium 140.2 68.2 Capital Reserves (62.3) (65.4) Retained Earnings 20.4 14.9 Equity 98.3 17.7 ROCE (Adjusted) 24.2% 34.3%
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Outlook
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Outlook
Upgrades / Rebrands
27 rebrands/upgrades completed in 2015 and a further 5 completed since year end
Programme ongoing PFS Network expansion
14 sites added across ROI and UK in 2015
3 further sites opened in ROI and 3 in the UK since the year end
US estate expanded by 3 during 2015 with one additional site in Jan 2016
Opportunistic approach to multi-site acquisition Service Area development
7 additional service areas in 2015
4 further Service Areas trading since year end including M1 Southbound, Belfast
Growing pipeline of UK Service Areas and development team expanded We continue to see good opportunities for expansion in our two main markets, both green field and bolt on. Consumer sentiment strong in Ireland and 2016 has seen a positive start to trading across the business.
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Appendices
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Key elements of customer proposition
Applegreen Customer Proposition
“Low Fuel Prices Always” price promise “Better Value Always” in shop Food and beverage offering is high quality Entrepreneurial culture ‘Giving back’ embedded in company culture Charitable fund – circa €1m in 5 years
Branding strategy
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International brands complement Applegreen’s own offer
Food & Beverage
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Warehouse near Dublin: 60,000 sq ft with 10,000 sq ft Chilled/Frozen Area
Fully integrated IT systems with voice picking & automatic order generation by sites
Tri temperature trucks – Ambient, Chilled and Frozen combined
Single delivery for sites for majority of product in Republic of Ireland
Facilitates own brand products – 136 stock keeping units
- Ambient - water; motor accessories
- Chilled milk; chilled foods
- Sandwiches; Food to go
Enables delivery of value to consumer and enhanced margin for company
Greater control and flexibility for retail proposition
Irish Retail Supply chain
Distribution Centre
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Ireland locations
Applegreen estate
Site Numbers at 31st December 2015
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GB locations
Applegreen estate
Site Numbers at 31st December 2015
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Howard Millar Independent Non-Executive Director Martin Southgate Independent Non-Executive Director Danny Kitchen Independent Non-Executive Chairman Eugene Moore Developments Director Michael O’Loughlin Managing Director UK Paul Lynch Chief Financial Officer Bob Etchingham Chief Executive Officer
Management Board Members
Chairman of Hibernia REIT plc
Non-Executive Chairman of Workspace Group plc and Non-Executive Director of LXB Retail Properties plc
Previously Finance Director of Green Property plc and Government appointed chairman of Irish Nationwide Building Society
Founded the business in 1992
30+ years in fuel industry
Strategic vision on Applegreen’s position in the forecourt sector
Led aggressive growth in footprint capitalising
- n opportunities presented by the downturn
Joined the business in its 2nd year of
- peration
Co-owner with Bob Etchingham
Background in retail and fmcg
Key responsibility for management and development of retail proposition
Delivered strong partnerships with international food brands
A chartered accountant with extensive corporate finance and management experience across a number of sectors
Served as a Director of a former Irish plc for 5 years
Worked with Applegreen on the delivery of their refinance in 2013 and joined as Finance Director in July 2014
Having led the Irish operations moved to the UK in 2008 to lead the development in that market
Opened 54th site in December 2014
Highly regarded in UK forecourt sector
Former Managing Director of JTI UK & Ireland (Global tobacco company – B&H, Silk Cut, Camel etc.)
Director of Gallaher Pensions Ltd
London Philharmonic Concert Orchestra – Advisory Council Member
Wide ranging general management experience
Deputy Chief Executive and CFO of Ryanair until he stepped down from that post in December 2014
Non executive director of Ryanair as well as Irelandia (Ryan family investment company)
Senior partner in Phelan Prescott & Company, a long established Dublin accounting firm
Director of Get Cover & Company and QYouTV International
Founding Director of The Little Museum of Dublin
Chartered Accountant (Fellow of Chartered Accountants Ireland)
Joined Applegreen in 2011 having previously served as a Director of Bennett Construction.
Also served as a non executive director of the National Roads Authority
Leads development activity for Applegreen with responsibility for the in-house construction team responsible for recently
- pened MSAs and TRSAs
Key management and board members
Joe Barrett Chief Operating Officer Brian Geraghty Independent Non-Executive Director
Proven management team supported by a highly experienced board