INVESTOR PRESENTATION

Transcription

1 INVESTOR PRESENTATION October 2014 RETAIL GAS RESIDENTIAL HEATING BULK FUELS LUBRICANTS Investor Relations ext. 2533

2 FORWARD LOOKING STATEMENTS Certain information included herein is forward-looking. Forward-looking statements include, without limitation, statements regarding the future financial position, business strategy, budgets, projected costs, capital expenditures, financial results, taxes and plans and objectives of or involving Parkland Fuel Corporation ( Parkland or the Corporation ). Many of these statements can be identified by looking for words such as believe, expects, expected, will, intends, projects, anticipates, estimates, continues, or similar words. Parkland believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties some of which are described in the Corporation s interim reports, annual information form and other continuous disclosure documents. Such forward-looking statements necessarily involve known and unknown risks and uncertainties and other factors, which may cause the Corporation s actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general economic, market and business conditions; industry capacity; competitive action by other companies; refining and marketing margins; the ability of suppliers to meet commitments; actions by governmental authorities including increases in taxes; changes in environmental and other regulations; and other factors, many of which are beyond the control of Parkland. Any forward-looking statements are made as of the date hereof and Parkland does not undertake any obligation, except as required under applicable law, to publicly update or revise such statements to reflect new information, subsequent or otherwise. 2

3 NORTH AMERICA S FASTEST GROWING INDEPENDENT FUEL MARKETER $1.6 billion market capitalization (1) 10.1 billion litres per year (2) $185.2 million Adjusted EBITDA (3) 3 (1) As of market close on October 7, 2014 (2) For the 12 month period ended June 30, 2014 plus pro forma Pioneer Energy Volumes (3) For the 12 month period ended June 30, 2014

4 FUELING COMMUNITIES Connecting refiners to communities, and communities to the petroleum products they need to heat their homes, fuel their industries and drive their economies. Refineries Terminals and Storage Distribution Wholesale Customers Commercial Customers Retail Customers Marketing Channel Fuel Volume (TTM) Commercial Fuels: 1.8 billion litres Retail Fuels 3.8 billion litres Wholesale and Trading 4.5 billion litres Multiple Supply Contracts 148 ML Strategic storage including propane 2,090 Railcars and third party trucking 100+ Wholesale customers 121 Commercial Locations 1092 Gas Stations Total: 10.1 billion litres 4 PARKLAND CUSTOMERS THIRD PARTIES includes 5 Lube Distribution Centres

5 GROWING AROUND STRONG SUPPLY WHITEHORSE Fuel Products Storage 88 ML Fuel Storage Capacity 60 ML Propane / Butane Storage Capacity Propane / Butane Storage FORT NELSON GRANDE PRAIRIE EDMONTON BOWDEN 2,090 REGINA QUEBEC CITY Rail cars MINOT MONTREAL Relationships with major third party carriers and railways MARYSVILLE CONWAY 5 SARNIA

6 A HISTORY OF GROWTH We ve come along way Run rate: 10.1 Billion Litres 6

7 PARKLAND ACQUIRES PIONEER ENERGY Acquisition completes Parkland Penny Plan Investor Relations ext. 2533

8 7.9 Billion Litres EBITDA TTM $185.2 M 1092 gas stations nationwide Employees: 1,705 Stations Billion litres 2.2 Billion Litres 2015E EBITDA $55 M Employees: employees Stations 393 TWO GREAT COMPANIES JOIN FORCES

9 PIONEER ENERGY INVESTMENT THESIS Returns Growth Increases cash flow per share by 27% Pro forma payout ratio declines to 66% (excluding growth cap) 33% increase in marketing volumes 29% increase in EBITDA Supply Unbranded volumes empower supply Esso Presence Combined entity represents 43% of Esso RBD network (31% of total network) Differentiation Established low cost position drives 12% greater average site volume than majors 9

10 ACCRETION METRICS $0.26 per share Additional cash flow per share annually $55 M EBITDA Annually Achieves Parkland Penny Plan One Year Early 10

11 $ per Share CASH FLOW PER SHARE INCREASES BY $0.26 Cash Flow per Share After Growth Cap-Ex Current Dividend $1.06 / $0.95 = payout ratio of 111% $1.06 / $1.21 = payout ratio of 87% Parkland 2014E Distributable Cash Flow per Share Pioneer Energy Incremental Cash Flow Pro Forma Distributable Cash Flow per Sharee 11

12 CONSIDERATION & MULTIPLE Pioneer Group Cash 39% $76 M Shares 61% $119 M Total Consideration Cash 69% $259 M Shares 31% $119 M Total Consideration: $378 M Suncor Energy Cash 100% $183 M Shares 0% TTM EBITDA $55 M Trailing Multiple

13 PARKLAND ACHIEVES PENNY PLAN Progress: Double Adjusted EBITDA by $250 million in Annualized EBITDA by Achieved to Date $126 million Efficiencies Acquisitions Synergies $11 million Give me Five! $125 $150 $175 $200 $225 $250 $107 million $8 million Identified to date 13

14 EBITDA GUIDANCE INCREASES $188 M $250 M $125 $145 $165 $185 $205 $225 $245 $265 Year Adjusted EBITDA Forecast ($ Millions) LOW EXPECTED HIGH 2014 $ 178 M $188 M $194 M 2015 $235 M $250 M $265 M EBITDA / Quarter (%) Quarter % EBITDA 1 29% 2 20% 3 22% 4 29% 14

15 15 MARKET OVERVIEW

16 A STRONGER NATIONAL NETWORK 16

17 CANADIAN RETAIL BRANDS Brands Other Brands Total Operator Multiple Dealer Retailer Total Strategy Premium Independent Brands Nationally Recognized Premium Refiner Brands Independent Dealeroperated where other brands are not suited

18 STRONG PRESENCE IN SOUTHERN ONTARIO MARKET Pioneer Parkland 18

19 DECLINE IN GAS STATIONS INCREASES THROUGHPUT PER SITE Number of Gas Stations Throughput per Site # of stations ML / site 20,000 18,000 16,000 14,000 12, ML / site 11,849 sites , ,000 6,000 4,000 In order to survive (and thrive) in such an environment, a retailer requires a network of A sites, that survive as others close, thereby increasing volume per site over time Note: Estimates of throughput per site may vary due to differences in data sources. Source: Statistics Canada.

20 Suncor Pioneer Shell Imperial Canadian Tire Ultramar Parkland McDougall Couche-Tard MacEwen Unidentified Others Total Pioneer Suncor Shell Husky Imperial Amco Parkland McDougall Canadian Tire Ultramar MacEwen Loblaw s Others Total PIONEER IS #2 IN RETAIL GAS AND #1 IN RETAIL DIESEL MARKET SHARE IN ONTARIO % Gasoline Ontario Retail Market Share: % Diesel Source: Kent market data.

21 Suncor Combined Shell Imperial Canadian Tire Ultramar McDougall Couche-Tard MacEwen Unidentified Others Total Combined Suncor Shell Husky Imperial Amco McDougall Canadian Tire Ultramar MacEwen Loblaw s Others Total THE COMBINED OPERATION WILL BE THE NUMBER ONE FUEL MARKETER IN ONTARIO % Gasoline Ontario Retail Market Share: % Diesel Source: Kent market data.

22 PIONEER HAS SECOND HIGHEST THROUGHPUT IN ONTARIO Pioneer Throughput Relative to Competitors (Millions of Litres) Mac s 1 Top Valu 1 Race Trac Top ten brands by throughput included, along with select brands ranking below tenth (designated with a 1). Source: Kent Market data.

23 ESTABLISHED LOW COST VALUE PROPOSITION 22 % Which of these brands offers the lowest fuel price? % of respondents selecting that answer None 23 Source: Market research survey conducted on behalf of Parkland in February 2014.

24 QUALITY LOCATIONS AND POSITIONING DRIVE 12% HIGHER THROUGHPUT THAN MAJORS 2013 Throughput by Site in Ontario Kent Markets Pioneer vs. Majors (ML) ML Pioneer s mean throughput per site exceeds average of majors by 0.8ML or 12% 15 Pioneer Mean = 7.4ML Majors 1 Mean = 6.6ML Majors includes Petro Canada, Shell, and Esso. Note: Kent data does not cover all markets, and specifically excludes smaller markets. Source: 2013 Kent data for all Ontario retail locations.

25 FIVE YEAR PLAN The Opportunity Continues 25 RETAIL GAS RESIDENTIAL HEATING BULK FUELS LUBRICANTS

26 5 YEAR GROWTH STRATEGY 1. Grow Allocate capital carefully Achieve industry leading returns 2. Supply Leverage supply advantage Enhance growth opportunities 3. Operate Deploy best practices Support organic growth New five year plan and metrics to be introduced in spring

27 WE WILL CONTINUE TO ACQUIRE Organic Acquisitions Independents Major Oil Assets Volume Volume EBITDA Target 100 ML/yr Target 6.0 BL $55 M Progress (6) ML YTD Progress 5.6 BL $107 M 27

28 THE ACQUISITION PIPELINE IS ACTIVE $1.3 Billion EBITDA of Assets Identified Identified Businesses $750 M Prospects $550 M Discussions $20 M 28

29 FINANCIAL CAPACITY TO DELIVER Net Debt : EBITDA (Refer to Non-GAAP Measures in MD&A) Net Debt : Capitalization Pay-out Ratio (Refer to Non-GAAP Measures in MD&A) Q Q % Q % % % Conservative Balance Sheet Positioned for Growth Series 1 Debentures Maturing November Conversion price of $

30 AN INTEGRATION FRAMEWORK THAT WORKS Scale Integrated Blended Best of the best Integrated Business Activity Integration Organization Structure Executive Selection Cultural Integration Economies of Scale Scope Selective Separate Incentives to retain key management Harmonize at leadership level only 30

31 REALIZING ACQUISITION SYNERGIES Scale Supply Operations Back Office Economies of Scale 3 6 months 6 12 months 1 2 years Scope 31

32 COME GROW WITH US! North America s fastest growing fuel marketer Offering investors yield and growth Next Five Year Plan to be Launched After Q